PR Newswire | Jan 25, 2021 04:31PM EST

01/25 15:30 CST

BancorpSouth Announces Fourth Quarter 2020 and Annual Financial Results TUPELO, Miss., Jan. 25, 2021

TUPELO, Miss., Jan. 25, 2021 /PRNewswire/ -- BancorpSouth Bank (NYSE: BXS) (the "Company") today announced financial results for the quarter and year ended December 31, 2020.

Annual highlights for 2020 included:

* Achieved net income available to common shareholders of $218.6 million, or $2.12 per diluted common share, and net operating income available to common shareholders - excluding mortgage servicing rights ("MSR") - of $237.3 million, or $2.30 per diluted common share. * Recorded provision for credit losses of $86.0 million associated primarily with economic deterioration associated with the COVID-19 pandemic while net charge-offs totaled 0.18 percent of average loans and leases, 0.14 percent of which was related to previously acquired loans; adopted Accounting Standards Update 2016-13 "Financial Instruments - Credit Losses" ("CECL") effective January 1, 2020 which, combined with the provision, contributed to an increase of $125.4 million in the allowance for credit losses. * Reported record annual pre-tax pre-provision net revenue ("PPNR") of $397.5 million, or 1.75 percent of average assets; represents an increase of 20.7 percent from $329.2 million, or 1.73 percent of average assets, for 2019. * Generated total organic deposit and customer repo growth of approximately $3.2 billion, or 19 percent for the year. * Originated over 15,000 loans totaling $1.2 billion under the Paycheck Protection Program ("PPP"); processed forgiveness applications on approximately 6,900 loans totaling $608.9 million and received forgiveness funds from the U.S. Small Business Administration ("SBA") on just over 4,000 loans totaling $262.5 million. * Reported record annual mortgage production volume and mortgage revenue for the year - production volume of $3.2 billion contributed to production and servicing revenue totaling $99.1 million. * Improvement in cost structure; operating efficiency ratio - excluding MSR - improved to 61.6 percent compared to 64.9 percent for 2019. * Completed merger with Texas First Bancshares, Inc. which added $396.9 million in assets to the Company's Central Texas presence. * Repurchased 3,300,000 shares of outstanding common stock at a weighted average price of $26.42 per share.

Highlights for the fourth quarter of 2020 included:

* Achieved quarterly net income available to common shareholders of $66.4 million, or $0.65 per diluted common share, and net operating income available to common shareholders - excluding MSR - of $70.8 million, or $0.69 per diluted common share. * Recorded provision for credit losses of $5.0 million; total non-performing assets declined 15.7% while past dues, loan deferrals, and modifications remained relatively stable. * Generated $93.6 million in PPNR, or 1.57 percent of average assets on an annualized basis; PPNR was impacted by seasonal revenue factors as well as certain other elevated one-time or non-recurring expense items. * Generated total deposit and customer repo growth of $459.7 million for the quarter, or 9.1 percent on an annualized basis. * Record fourth quarter mortgage production volume of $845.9 million contributed to mortgage production and servicing revenue of $19.9 million. * Recorded a charge of $5.8 million in accordance with Accounting Standards Codification ("ASC") 715 "Compensation - Retirement Benefits" to reflect the settlement accounting impact of the lump sum payments associated with an elevated number of retirements that occurred in the fourth quarter of 2020. * Maintained strong regulatory capital metrics; estimated total risk-based capital of 14.24 percent at December 31, 2020 compared to 14.17 percent at December 31, 2019. * Announced the signing of a definitive merger agreement with National United Bancshares, Inc., the parent company of National United, which is expected to add approximately $750 million in assets to the Company's Central Texas presence. * On January 13, 2021, announced the signing of a definitive merger agreement with FNS Bancshares, Inc., the parent company of FNB Bank, which is expected to add approximately $790 million in assets across Alabama, Tennessee, and Georgia.

"As we look at our financial results for 2020, the COVID-19 pandemic certainly created a challenging year for our industry as a whole," remarked Dan Rollins, Chairman and Chief Executive Officer. "I am extremely proud of our team's ability to navigate this difficult environment while continuing to improve our core operating results. While protecting the health of our teammates and customers was our first priority, we achieved some unprecedented milestones in several areas of our Company. Our mortgage team generated record production of $3.2 billion, which exceeds our previous annual production record of $2.0 billion by 60 percent. As we have previously reported, our bankers and support staff produced over 15,000 PPP loans totaling over $1.2 billion in a very short period of time. We are currently actively working with our customers on the second phase of funding under the PPP. I am also pleased with our lenders and credit administrators' ability to work with our customers on deferrals and modifications while actively managing our credit risk. While we recorded a provision of credit losses of $86 million for the year, our credit quality indicators continue to remain stable. Net charge-offs, excluding acquired loans, totaled 0.04 percent of net loans and leases for the year. Finally, we reported record pre-tax pre-provision net revenue of $397.5 million, or 1.75 percent of average assets. This represents an increase from $329.2 million, or 1.73 percent of average assets for 2019."

"As we look specifically at our fourth quarter performance, we had another great quarter of deposit and customer repo growth, which totaled $459.7 million, or 9.1 percent on an annualized basis. We were also pleased to be able to continue to work our total cost of deposits down meaningfully and hold our net interest margin in a relatively tight range. Our mortgage team had another outstanding quarter generating production volume of $845.9 million and total production and servicing revenue of $19.9 million. While we had several items that created some noise in our results, we are pleased to report operating earnings per share - excluding MSR - of $0.69 per diluted share in a quarter that has historically faced seasonal headwinds in both our mortgage and insurance business. The largest of these items was a $5.8 million pension accounting charge resulting from elevated retirements and lump sum pension payouts in the fourth quarter. While this charge adversely impacted earnings, the decline of employee FTE of approximately 100 over the course of 2020 reflects our continued focus on improving our operating efficiency. Finally, we are excited about the growth opportunities that we have recently announced with National United in Gatesville, Texas and FNB Bank in Scottsboro, Alabama, which will collectively add approximately $1.5 billion in assets to our Company. We are hopeful that we can receive the required approvals in order to close these transactions during the second quarter of this year."

Earnings Summary

The Company reported net income available to common shareholders of $66.4 million, or $0.65 per diluted common share, for the fourth quarter of 2020, compared with net income available to common shareholders of $65.8 million, or $0.63 per diluted common share, for the fourth quarter of 2019 and net income available to common shareholders of $71.5 million, or $0.69 per diluted common share, for the third quarter of 2020. The Company reported net operating income available to common shareholders - excluding MSR - of $70.8 million, or $0.69 per diluted common share, for the fourth quarter of 2020, compared with $67.8 million, or $0.65 per diluted common share, for the fourth quarter of 2019 and $71.2 million, or $0.69 per diluted common share, for the third quarter of 2020.

Additionally, the Company reported net income available to common shareholders of $218.6 million, or $2.12 per diluted common share, for the year ended December 31, 2020 compared with $234.3 million, or $2.30 per diluted common share, for the year ended December 31, 2019. The Company reported net operating income available to common shareholders - excluding MSR - of $237.3 million, or $2.30 per diluted common share, for the year ended December 31, 2020 compared with $255.4 million, or $2.51 per diluted common share, for the year ended December 31, 2019.

The Company reported pre-tax pre-provision net revenue of $93.6 million, or 1.57 percent of average assets on an annualized basis, for the fourth quarter of 2020 compared to $85.8 million, or 1.68 percent of average assets on an annualized basis, for the fourth quarter of 2019 and $110.0 million, or 1.88 percent of average assets, for the third quarter of 2020. Additionally, the Company reported pre-tax pre-provision net revenue of $397.5 million, or 1.75 percent of average assets, for the year ended December 31, 2020 compared with $329.2 million, or 1.73 percent of average assets, for the year ended December 31, 2019.

Net Interest Revenue

Net interest revenue was $176.9 million for the fourth quarter of 2020, an increase of 3.6 percent from $170.8 million for the fourth quarter of 2019 and an increase of 0.6 percent from $175.9 million for the third quarter of 2020. The fully taxable equivalent net interest margin was 3.29 percent for the fourth quarter of 2020, compared with 3.76 percent for the fourth quarter of 2019 and 3.31 percent for the third quarter of 2020. Yields on net loans and leases were 4.55 percent for the fourth quarter of 2020, compared with 5.13 percent for the fourth quarter of 2019 and 4.54 percent for the third quarter of 2020, while yields on total interest earning assets were 3.70 percent for the fourth quarter of 2020, compared with 4.48 percent for the fourth quarter of 2019 and 3.77 percent for the third quarter of 2020. The net interest margin, excluding accretable yield, was 3.24 percent for the fourth quarter of 2020, compared with 3.61 percent for the fourth quarter of 2019 and 3.23 percent for the third quarter of 2020, while yields on net loans and leases, excluding accretable yield, were 4.49 percent for the fourth quarter of 2020, compared with 4.95 percent for the fourth quarter of 2019 and 4.44 percent for the third quarter of 2020.

The $975.4 million in PPP loans on the balance sheet had an adverse impact of approximately four basis points on the yield on net loans and leases, excluding accretable yield, for the fourth quarter of 2020. Net interest income for the fourth quarter of 2020 included approximately $2.5 million of accelerated PPP fee income recognition resulting from the payoff of loans that were forgiven by the SBA during the quarter. The average cost of deposits was 0.38 percent for the fourth quarter of 2020, compared with 0.68 percent for the fourth quarter of 2019 and 0.44 percent for the third quarter of 2020.

Balance Sheet Activity

Loans and leases, net of unearned income, decreased $305.3 million during the fourth quarter of 2020 primarily as a result of the SBA forgiveness of $262.5 million of PPP loans during the quarter. Deposits and customer repos increased $459.7 million, or 9.1 percent on an annualized basis, during the fourth quarter of 2020. There were no acquisitions during the fourth quarter of 2020.

Provision for Credit Losses and Allowance for Credit Losses

Earnings for the fourth quarter of 2020 reflect a provision for credit losses of $5.0 million, compared with no provision for the fourth quarter of 2019 and a provision of $15.0 million for the third quarter of 2020. Net charge-offs for the fourth quarter of 2020 were $11.2 million, or 0.29 percent of net loans and leases on an annualized basis, compared with net recoveries of $2.2 million for the fourth quarter of 2019 and net charge-offs of $1.4 million for the third quarter of 2020. Net charge-offs for the fourth quarter of 2020 consisted primarily of the charge down of loans that were previously identified as impaired in prior quarters. The allowance for credit losses was $244.4 million, or 1.63 percent of net loans and leases, at December 31, 2020, compared with $119.1 million, or 0.85 percent of net loans and leases, at December 31, 2019, and $250.6 million, or 1.64 percent of net loans and leases, at September 30, 2020. The allowance for credit losses coverage, excluding the impact of PPP loans, was 1.74 percent at December 31, 2020.

The Company adopted CECL effective January 1, 2020. The increase in the allowance for credit losses resulting from this implementation was $62.6 million. Of this increase, $22.6 million was a result of the reclassification of non-accretable difference on previously purchased credit impaired loans that are now considered purchased credit deteriorated loans, while $40.0 million was the result primarily of the requirement of estimating credits losses over the life of the loan portfolio. The adoption of this standard impacted the comparability of credit quality and coverage metrics to all periods preceding January 1, 2020.

Total non-performing assets were $132.6 million, or 0.55 percent of total assets, at December 31, 2020, compared with $118.3 million, or 0.56 percent of total assets, at December 31, 2019, and $157.3 million, or 0.67 percent of total assets, at September 30, 2020. Other real estate owned was $11.4 million at December 31, 2020, compared with $6.7 million at December 31, 2019 and $6.4 million at September 30, 2020.

Noninterest Revenue

Noninterest revenue was $78.8 million for the fourth quarter of 2020, compared with $74.7 million for the fourth quarter of 2019 and $89.9 million for the third quarter of 2020. These results include a positive MSR valuation adjustment of $0.2 million for the fourth quarter of 2020, compared with a positive MSR valuation adjustment of $3.2 million for the fourth quarter of 2019 and a positive MSR valuation adjustment of $0.4 million for the third quarter of 2020. Valuation adjustments in the MSR asset are driven primarily by fluctuations in interest rates period over period.

Mortgage production and servicing revenue was $19.9 million for the fourth quarter of 2020, compared with $6.9 million for the fourth quarter of 2019 and $26.7 million for the third quarter of 2020. Mortgage origination volume for the fourth quarter of 2020 was $845.9 million, compared with $504.9 million for the fourth quarter of 2019 and $937.7 million for the third quarter of 2020. Home purchase money volume was $466.4 million for the fourth quarter of 2020, compared with $321.7 million for the fourth quarter of 2019 and $568.4 million for the third quarter of 2020. Of the total mortgage origination volume for the fourth quarter of 2020, $157.8 million was portfolio loans, compared with $106.4 million for the fourth quarter of 2019 and $218.0 million for the third quarter of 2020.

Credit card, debit card, and merchant fee revenue was $10.1 million for the fourth quarter of 2020, compared with $9.8 million for the fourth quarter of 2019 and $9.9 million for the third quarter of 2020. Deposit service charge revenue was $9.7 million for the fourth quarter of 2020, compared with $12.2 million for the fourth quarter of 2019 and $8.9 million for the third quarter of 2020. Wealth management revenue was $6.8 million for the fourth quarter of 2020, compared with $6.6 million for the fourth quarter of 2019 and $6.5 million for the third quarter of 2020. Insurance commission revenue was $29.8 million for the fourth quarter of 2020, compared with $27.6 million for the fourth quarter of 2019 and $32.8 million for the third quarter of 2020. Other noninterest revenue was $2.3 million for the fourth quarter of 2020, compared with $8.3 million for the fourth quarter of 2019 and $4.8 million for the third quarter of 2020. Other noninterest revenue for the fourth quarter of 2020 was adversely impacted by $2.7 million of book amortization associated with a historic tax credit. A related benefit of $3.0 million was recorded as a reduction to income tax expense for the quarter.

Noninterest Expense

Noninterest expense for the fourth quarter of 2020 was $167.9 million, compared with $162.4 million for the fourth quarter of 2019 and $155.5 million for the third quarter of 2020. Salaries and employee benefits expense was $97.2 million for the fourth quarter of 2020, compared with $97.1 million for the fourth quarter of 2019 and $104.2 million for the third quarter of 2020. Occupancy expense was $13.0 million for the fourth quarter of 2020, compared with $12.3 million for the fourth quarter of 2019 and $13.1 million for the third quarter of 2020. Other noninterest expense was $45.4 million for the fourth quarter of 2020, compared with $46.0 million for the fourth quarter of 2019 and $32.2 million for the third quarter of 2020. Additionally, merger-related expense for the fourth quarter of 2020 was $0.2 million, compared with merger-related expense of $5.8 million for the fourth quarter of 2019 and $0.1 million for the third quarter of 2020.

Noninterest expense for the fourth quarter of 2020 included certain items that were either non-operating or non-routine in nature as defined by the Company. The Company recorded a charge of $5.8 million in accordance with ASC 715 "Compensation - Retirement Benefits" to reflect the settlement accounting impact of an elevated number of retirements and related lump sum pension payouts during the quarter. Salaries and employee benefits expense was positively impacted by accrual true ups totaling approximately $6.7 million relating to incentive compensation and other employee benefits. Other non-interest expense included charges and write-downs totaling approximately $5.0 million associated with the anticipated disposition of certain facilities and other fixed assets, including fixed assets associated with branches identified for closure.

Capital Management

The Company's ratio of shareholders' equity to assets was 11.72 percent at December 31, 2020, compared with 12.75 percent at December 31, 2019 and 11.81 percent at September 30, 2020. The ratio of tangible common shareholders' equity to tangible assets was 7.54 percent at December 31, 2020, compared with 8.09 percent at December 31, 2019 and 7.56 percent at September 30, 2020. The $975.4 million in PPP loans had an adverse impact of approximately 33 basis points on tangible common shareholders' equity to tangible assets at December 31, 2020.

During the fourth quarter of 2020, the Company did not repurchase any shares of its common stock pursuant to its share repurchase program. On December 9, 2020, the Company announced a new share repurchase program, pursuant to which the Board of Directors has authorized the repurchase of up to an aggregate of 6 million shares, which commenced on January 4, 2021 and will expire on December 31, 2021.

Estimated regulatory capital ratios at December 31, 2020 were calculated in accordance with the Basel III capital framework as well as the interagency interim final rule published on March 31, 2020 entitled "Revised Transition of the Current Expected Credit Losses Methodology for Allowances". The Company is a "well capitalized" bank, as defined by federal regulations, at December 31, 2020, with Tier 1 risk-based capital of 11.70 percent and total risk-based capital of 14.24 percent, compared with required minimum levels of 8 percent and 10 percent, respectively, in order to qualify for "well capitalized" classification.

Summary

Rollins concluded, "I am proud of the accomplishments that our teammates achieved over the course of the year in unprecedented circumstances. We reported record deposit growth and mortgage origination volume, while our bankers cultivated current relationships and built new ones through the government stimulus programs as well as other opportunities to assist customers during this time. As a company, we have taken other actions to drive continued efficiency improvement including our efforts to improve our branch structure and employee headcount as well as various other initiatives to enhance our technology offerings and customer experience. While we expect the industry to continue to experience revenue headwinds as we enter the New Year, we are glad 2020 is behind us. We look forward to the opportunity to continue to grow our Company and improve shareholder value."

TRANSACTIONS

FNS Bancshares, Inc.

On January 13, 2021, the Company announced the signing of a definitive merger agreement (the "FNS Merger Agreement") with FNS Bancshares, Inc., the parent company of FNB Bank, (collectively referred to as "FNS"), pursuant to which FNS will be merged with and into the Company (the "FNS Merger"). FNS operates 17 full-service banking offices in Alabama, Georgia and Tennessee. The merger will expand the Company's presence in Jackson, DeKalb and Marshall counties in Alabama and the Chattanooga, Tennessee-Georgia and Nashville-Davidson-Murfreesboro-Franklin, Tennessee metropolitan statistical areas. As of December 31, 2020, FNS collectively reported total assets of $797.0 million, total loans of $483.5 million and total deposits of $675.5 million. Under the terms of the FNS Merger Agreement, the Company will issue approximately 2,975,000 shares of the Company's common stock plus $18.0 million in cash for all outstanding shares of FNS. For more information regarding the FNS Merger, see our Current Report on Form 8-K that was filed with the Federal Deposit Insurance Corporation ("FDIC") on January 13, 2021. The FNS Merger Agreement has been unanimously approved by the Boards of Directors of the Company and FNS. FNS has agreed to convene a meeting of its shareholders to vote upon the approval of the FNS Merger Agreement. Subject to the satisfaction of all closing conditions, including the receipt of all required regulatory approvals, the FNS Merger is expected to be completed during the first half of 2021, although the Company can provide no assurance that the FNS Merger will close during this time period or at all.

National United Bancshares, Inc.

On December 2, 2020, the Company announced the signing of a definitive merger agreement (the "National United Merger Agreement") with National United Bancshares, Inc., the parent company of National United, (collectively referred to as "National United"), pursuant to which National United will be merged with and into the Company (the "National United Merger"). National United operates 6 full-service banking offices in the Killeen-Temple, Texas; Waco, Texas; and Austin-Round Rock-Georgetown, Texas metropolitan statistical areas. As of December 31, 2020, National United collectively reported total assets of $752.3 million, total loans of $446.0 million and total deposits of $676.7 million. Under the terms of the National United Merger Agreement, the Company will issue approximately 3,110,000 shares of the Company's common stock plus $33.25 million in cash for all outstanding shares of National United. For more information regarding National United Merger, see our Current Report on Form 8-K that was filed with the FDIC on December 2, 2020. The National United Merger Agreement has been unanimously approved by the Boards of Directors of the Company and National United. National United has agreed to convene a meeting of its shareholders to vote upon the approval of the National United Merger Agreement. Subject to the satisfaction of all closing conditions, including the receipt of all required regulatory approvals, the National United Merger is expected to be completed during the first half of 2021, although the Company can provide no assurance that the National United Merger will close during this time period or at all.

Texas First Bancshares, Inc.

On January 1, 2020, the Company completed the merger with Texas First Bancshares, Inc., the parent company of Texas First State Bank, (collectively referred to as "Texas First"), pursuant to which Texas First was merged with and into the Company. Texas First operated 6 full-service banking offices in the Waco, Texas and Killeen-Temple, Texas metropolitan statistical areas ("MSA"). As of January 1, 2020, Texas First collectively reported total assets of $396.9 million, total loans of $185.7 million and total deposits of $369.3 million. Under the terms of the definitive merger agreement, the Company issued approximately 1,040,000 shares of the Company's common stock plus $13.0 million in cash for all outstanding shares of Texas First. For more information regarding this transaction, see our Current Report on Form 8-K that was filed with the FDIC on January 2, 2020.

Non-GAAP Measures and Ratios

This news release presents certain financial measures and ratios that are not calculated in accordance with U.S. generally accepted accounting principles ("GAAP"). A discussion regarding these non-GAAP measures and ratios, including reconciliations of non-GAAP measures to the most directly comparable GAAP measures and definitions for non-GAAP ratios, appears under the caption "Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions" beginning on page 26 of this news release.

Statement Regarding Impact of COVID-19 Pandemic

The Company prioritizes the health and safety of its teammates and customers, and it will continue to do so throughout the duration of the COVID-19 pandemic. At the same time, the Company remains focused on improving shareholder value, managing credit exposure, challenging expenses, enhancing the customer experience and supporting the communities it serves. Lastly, as a SBA Preferred Lender, the Company is an active participant in the SBA's PPP for the betterment of its customers and the communities that it serves.

In the presentation that accompanies this news release and in its earnings conference call, the Company has sought and will seek to describe the historical and future impact of the COVID-19 pandemic on the Company's assets, business, cash flows, financial condition, liquidity, prospects and results of operations, including the information and discussions regarding the increases in its provision and allowance for credit losses and the discussion regarding negative pressure to its net interest revenue and net interest margin. Although the Company believes that the statements that pertain to future events, results and trends and their impact on the Company's business are reasonable at the present time, those statements are not historical facts and are based upon current assumptions, expectations, estimates and projections, many of which, by their nature, are beyond the Company's control. Accordingly, all discussions regarding future events, results and trends and their impact on the Company's business, even in the near term, are necessarily uncertain given the fluid and evolving nature of the pandemic.

If the health, logistical or economic effects of the pandemic worsen, or if the assumptions, expectations, estimates or projections that underlie the Company's statements regarding future effects or trends prove to be incorrect, then the Company's actual assets, business, cash flows, financial condition, liquidity, prospects and results of operations may be materially and adversely impacted in ways that the Company cannot reasonably forecast.

Accordingly, when reading this news release and the accompanying presentation and when listening to the earnings conference call, undue reliance should not be placed upon any statement pertaining to future events, results and trends and their impact on the Company's business in future periods.

Conference Call and Webcast

The Company will conduct a conference call to discuss its fourth quarter 2020 financial results on January 26, 2021, at 10:00 a.m. (Central Time). This conference call will be an interactive session between management and analysts. Interested parties may listen to this live conference call via Internet webcast by accessing www.bancorpsouth.investorroom.com/webcasts. The webcast will also be available in archived format at the same address.

About BancorpSouth Bank

BancorpSouth Bank (NYSE: BXS) is headquartered in Tupelo, Mississippi, with approximately $24 billion in assets. BancorpSouth operates approximately 305 full service branch locations as well as additional mortgage, insurance, and loan production offices in Alabama, Arkansas, Florida, Louisiana, Mississippi, Missouri, Tennessee and Texas, including an insurance location in Illinois. BancorpSouth is committed to a culture of respect, diversity, and inclusion in both its workplace and communities. To learn more, visit our Community Commitment page at www.bancorpsouth.com. Like us on Facebook; follow us on Twitter: @MyBXS; or connect with us through LinkedIn.

Forward-Looking Statements

Certain statements made in this news release are not statements of historical fact and constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and are subject to the safe harbor created thereby under the Private Securities Litigation Reform Act of 1995. These statements are often, but not always, made through the use of words or phrases such as "anticipate," "aspire," "assume," "believe," "budget," "contemplate," "continue," "could," "estimate," "expect," "forecast," "foresee," "goal," "hope," "indicate," "intend," "may," "might," "outlook," "plan," "project," "projection," "predict," "prospect," "potential," "roadmap," "seek," "should," "target," "will," and "would," or the negative versions of those words or other comparable words of a future or forward-looking nature. These forward-looking statements include, without limitation, discussions regarding general economic, interest rate, real estate market, competitive, employment, and credit market conditions, including the impact of the COVID-19 pandemic on our business; our: assets; business; cash flows; financial condition; liquidity; prospects; results of operations; deposit and customer repo growth; interest and fee-based revenue; capital resources; capital metrics; efficiency ratio; valuation of mortgage servicing rights; mortgage production volume; net income; net interest revenue; non-interest revenue; net interest margin; interest expense; non-interest expense; earnings per share; interest rate sensitivity; interest rate risk; balance sheet and liquidity management; off-balance sheet arrangements; fair value determinations; asset quality; credit quality; credit losses; provision and allowance for credit losses, impairments, charge-offs, recoveries and changes in loan volumes; investment securities portfolio yields and values; ability to manage the impact of pandemics and natural disasters; adoption and use of critical accounting policies; adoption and implementation of new accounting standards and their effect on our financial results and our financial reporting; utilization of non-GAAP financial metrics; declaration and payment of dividends; ability to pay dividends or coupons on our 5.5% Series A Non-Cumulative Perpetual Preferred Stock, par value $0.01 per share, or the 4.125% Fixed-to-Floating Rate Subordinated Notes due November 20, 2029; mortgage origination volume; mortgage servicing and production revenue; insurance commission revenue; implementation and execution of cost savings initiatives; ability to successfully litigate, resolve or otherwise dispense with threatened, pending, ongoing and future litigation and governmental, administrative and investigatory matters; ability to successfully complete pending or future acquisitions, dispositions and other strategic growth opportunities and initiatives; ability to successfully obtain regulatory approval for acquisitions and other growth initiatives; ability to successfully integrate and manage acquisitions; opportunities and efforts to grow market share; reputation; ability to compete with other financial institutions; ability to recruit and retain key employees and personnel; access to capital markets; availability of capital; investments in the securities of other financial institutions; and ability to operate our regulatory compliance programs in accordance with applicable law.

Forward-looking statements are based upon management's expectations as well as certain assumptions and estimates made by, and information available to, our management at the time such statements were made. Forward-looking statements are not historical facts, are not guarantees of future results or performance and are subject to certain known and unknown risks, uncertainties and other factors that are beyond our control and that may cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. These risks, uncertainties and other factors include, without limitation, potential delays or other problems in implementing and executing our growth, expansion and acquisition strategies, including delays in obtaining regulatory or other necessary approvals or the failure to realize any anticipated benefits or synergies from any acquisitions or growth strategies; the risks of changes in interest rates and their effects on the level and composition of deposits, loan demand and the values of loan collateral, securities and interest sensitive assets and liabilities; the failure of assumptions underlying the establishment of reserves for possible credit losses, fair value for loans and other real estate owned; changes in real estate values; the availability of and access to capital; possible downgrades in our credit ratings or outlook which could increase the costs or availability of funding from capital markets; the ability to attract new or retain existing deposits or to retain or grow loans; the ability to grow additional interest and fee income or to control noninterest expense; the potential impact of the proposed phase-out of the London Interbank Offered Rate ("LIBOR") or other changes involving LIBOR; competitive factors and pricing pressures, including their effect on our net interest margin; general economic, unemployment, credit market and real estate market conditions, and the effect of such conditions on the creditworthiness of borrowers, collateral values, the value of investment securities and asset recovery values; changes in legal, financial and/or regulatory requirements; recently enacted and potential legislation and regulatory actions and the costs and expenses to comply with new and/or existing legislation and regulatory actions, including those actions in response to the COVID-19 pandemic such as the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the "Economic Aid Act") and any related rules and regulations; changes in U.S. Government monetary and fiscal policy, including any changes that result from the recent U.S. elections; FDIC special assessments or changes to regular assessments; possible adverse rulings, judgments, settlements and other outcomes of pending, ongoing and future litigation and governmental, administrative and investigatory matters (including litigation or actions arising from our participation in and administration of programs related to the COVID-19 pandemic (including, among other things, the PPP loan programs authorized by the CARES Act and the Economic Aid Act); the ability to keep pace with technological changes, including changes regarding maintaining cybersecurity; the impact of failure in, or breach of, our operational or security systems or infrastructure, or those of third parties with whom we do business, including as a result of cyber-attacks or an increase in the incidence or severity of fraud, illegal payments, security breaches or other illegal acts impacting us or our customers; natural disasters or acts of war or terrorism; the adverse effects of the ongoing global COVID-19 pandemic, including the magnitude and duration of the pandemic, and the impact of actions taken to contain or treat COVID-19 on us, our employees, our customers, the global economy and the financial markets; international or political instability; impairment of our goodwill or other intangible assets; losses of key employees and personnel; adoption of new accounting standards, including the effects from the adoption of the current expected credit loss methodology on January 1, 2020, or changes in existing standards; and other factors as detailed from time to time in our press and news releases, periodic and current reports and other filings we file with the FDIC.

The foregoing factors should not be construed as exhaustive and should be read in conjunction with those factors that are set forth from time to time in our periodic and current reports filed with the FDIC, including those factors included in our Annual Report on Form 10-K for the year ended December 31, 2019 under the heading "Item 1A. Risk Factors," in our Quarterly Reports on Form 10-Q and in our Current Reports on Form 8-K.

Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date of this news release, if one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Accordingly, undue reliance should not be placed on any forward-looking statements. The forward-looking statements speak only as of the date of this news release, and we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by applicable law. New risks and uncertainties may emerge from time to time, and it is not possible for us to predict their occurrence or how they will affect us. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this section.

BancorpSouth Bank

Selected Financial Information

(Dollars in thousands, except per share data)

(Unaudited)

Quarter Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended Year Ended Year Ended

12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019 12/31/2020 12/31/2019

Earnings Summary:

Interest revenue $ 199,287 $ 200,670 $ 197,472 $ 202,064 $ 203,812 $ 799,493 $ 775,012

Interest expense 22,351 24,739 26,902 34,534 33,038 108,526 125,068

Net interest revenue 176,936 175,931 170,570 167,530 170,774 690,967 649,944

Provision for credit losses 5,000 15,000 20,000 46,000 - 86,000 1,500

Net interest revenue, after provision

for credit losses 171,936 160,931 150,570 121,530 170,774 604,967 648,444

Noninterest revenue 78,826 89,924 91,258 76,496 74,697 336,504 280,681

Noninterest expense 167,911 155,505 162,504 168,006 162,351 653,926 629,607

Income before income taxes 82,851 95,350 79,324 30,020 83,120 287,545 299,518

Income tax expense 14,046 21,525 18,164 5,759 17,271 59,494 65,257

Net income $ 68,805 $ 73,825 $ 61,160 $ 24,261 $ 65,849 $ 228,051 $ 234,261

Less: Preferred dividends 2,372 2,372 2,372 2,372 - 9,488 -

Net income available to common shareholders $ 66,433 $ 71,453 $ 58,788 $ 21,889 $ 65,849 $ 218,563 $ 234,261

Balance Sheet - Period End Balances

Total assets $ 24,081,194 $ 23,555,422 $ 23,236,176 $ 21,032,524 $ 21,052,576 $ 24,081,194 $ 21,052,576

Total earning assets 21,792,725 21,340,371 21,119,073 18,939,750 18,891,021 21,792,725 18,891,021

Total securities 6,231,006 5,659,785 4,973,171 4,468,340 4,481,974 6,231,006 4,481,974

Loans and leases, net of unearned income 15,022,479 15,327,735 15,427,421 14,224,645 14,089,683 15,022,479 14,089,683

Allowance for credit losses 244,422 250,624 237,025 218,199 119,066 244,422 119,066

Net book value of acquired loans (included in loans and leases above) 1,160,267 1,320,671 1,510,008 1,661,329 1,628,265 1,160,267 1,628,265

Paycheck protection program (PPP) loans (included in loans and leases above) 975,421 1,212,246 1,192,715 - - 975,421 -

Remaining loan mark on acquired loans 13,886 16,198 19,977 22,286 46,240 13,886 46,240

Total deposits 19,846,441 19,412,979 19,179,486 16,887,916 16,410,699 19,846,441 16,410,699

Total deposits and securities sold under agreement to repurchase 20,484,156 20,024,434 19,849,502 17,426,878 16,924,121 20,484,156 16,924,121

Long-term debt 4,402 4,508 4,615 4,721 5,053 4,402 5,053

Junior subordinated debt securities 297,250 297,074 296,898 296,723 296,547 297,250 296,547

Total shareholders' equity 2,822,477 2,782,539 2,732,687 2,681,904 2,685,017 2,822,477 2,685,017

Common shareholders' equity 2,655,484 2,615,546 2,565,694 2,514,911 2,517,996 2,655,484 2,517,996

Balance Sheet - Average Balances

Total assets $ 23,660,503 $ 23,318,877 $ 22,707,686 $ 21,189,637 $ 20,243,023 $ 22,723,386 $ 19,027,644

Total earning assets 21,497,938 21,241,896 20,594,889 19,113,449 18,125,676 20,616,184 17,036,618

Total securities 5,820,425 5,309,982 4,437,614 4,461,298 3,555,014 5,010,378 2,934,654

Loans and leases, net of unearned income 15,219,402 15,369,684 15,114,732 14,226,788 14,061,118 14,984,356 13,606,951

PPP loans (included in loans and leases above) 1,139,959 1,207,097 975,029 - - 830,467 -

Total deposits 19,600,863 19,258,930 18,454,472 16,905,229 16,218,715 18,559,655 15,319,130

Total deposits and securities sold under agreement to repurchase 20,272,881 19,940,330 19,098,599 17,446,936 16,748,932 19,194,697 15,814,512

Long-term debt 4,488 4,592 4,699 4,800 5,138 4,644 5,415

Junior subordinated debt securities 297,145 296,969 296,793 296,617 135,535 296,882 34,162

Total shareholders' equity 2,774,589 2,729,870 2,738,434 2,658,699 2,572,750 2,725,545 2,366,745

Common shareholders' equity 2,607,596 2,562,877 2,571,441 2,491,678 2,498,033 2,558,545 2,347,913

Nonperforming Assets:

Non-accrual loans and leases $ 96,378 $ 122,108 $ 126,753 $ 110,074 $ 78,796 $ 96,378 $ 78,796

Loans and leases 90+ days past due, still accruing 14,320 17,641 9,877 7,272 17,531 14,320 17,531

Restructured loans and leases, still accruing 10,475 11,154 11,575 11,284 15,184 10,475 15,184

Non-performing loans (NPLs) 121,173 150,903 148,205 128,630 111,511 121,173 111,511

Other real estate owned 11,395 6,397 7,164 9,200 6,746 11,395 6,746

Non-performing assets (NPAs) $ 132,568 $ 157,300 $ 155,369 $ 137,830 $ 118,257 $ 132,568 $ 118,257

Financial Ratios and Other Data:

Return on average assets 1.16% 1.26% 1.08% 0.46% 1.29% 1.00% 1.23%

Operating return on average assets-excluding MSR* 1.23% 1.26% 1.12% 0.70% 1.33% 1.09% 1.34%

Return on average shareholders' equity 9.87% 10.76% 8.98% 3.67% 10.15% 8.37% 9.90%

Operating return on average shareholders' equity-excluding MSR* 10.49% 10.72% 9.29% 5.56% 10.46% 9.05% 10.79%

Return on average common shareholders' equity 10.14% 11.09% 9.19% 3.53% 10.46% 8.54% 9.98%

Operating return on average common shareholders' equity-excluding MSR* 10.80% 11.05% 9.53% 5.55% 10.78% 9.27% 10.88%

Return on average tangible equity* 14.66% 16.08% 13.43% 5.56% 15.47% 12.53% 15.04%

Operating return on average tangible equity-excluding MSR* 15.58% 16.03% 13.89% 8.42% 15.94% 13.56% 16.40%

Return on average tangible common equity* 15.54% 17.13% 14.20% 5.54% 16.19% 13.22% 15.22%

Operating return on average tangible common equity-excluding MSR* 16.56% 17.08% 14.71% 8.71% 16.68% 14.35% 16.60%

Pre-tax pre-provision net revenue to total average assets* 1.57% 1.88% 1.81% 1.74% 1.68% 1.75% 1.73%

Noninterest income to average assets 1.33% 1.53% 1.62% 1.45% 1.46% 1.48% 1.48%

Noninterest expense to average assets 2.82% 2.65% 2.88% 3.19% 3.18% 2.88% 3.31%

Net interest margin-fully taxable equivalent 3.29% 3.31% 3.35% 3.54% 3.76% 3.36% 3.84%

Net interest margin-fully taxable equivalent, excluding net accretion

on acquired loans and leases 3.24% 3.23% 3.30% 3.48% 3.61% 3.31% 3.72%

Net interest rate spread 3.07% 3.06% 3.08% 3.24% 3.44% 3.11% 3.53%

Efficiency ratio (tax equivalent)* 65.47% 58.36% 61.89% 68.65% 65.92% 63.47% 67.38%

Operating efficiency ratio-excluding MSR (tax equivalent)* 63.18% 58.41% 61.16% 63.89% 64.39% 61.62% 64.90%

Loan/deposit ratio 75.69% 78.96% 80.44% 84.23% 85.86% 75.69% 85.86%

Price to earnings multiple (close) 12.88 9.18 11.15 9.46 13.60 12.88 13.60

Market value to common book value 105.98% 75.99% 90.91% 77.21% 130.38% 105.98% 130.38%

Market value to common book value (avg) 97.56% 83.75% 84.79% 107.86% 128.18% 90.96% 122.58%

Market value to common tangible book value 161.00% 116.01% 140.44% 120.81% 201.13% 161.00% 201.13%

Market value to common tangible book value (avg) 148.21% 127.86% 130.99% 168.76% 197.74% 138.19% 189.09%

Employee FTE 4,596 4,691 4,742 4,737 4,693 4,596 4,693

*Denotes non-GAAP financial measure. Refer to related disclosure andreconciliation on pages 26 and 27.

Credit Quality Ratios:

Net charge-offs(recoveries) to average loans and leases (annualized) 0.29% 0.04% 0.03% 0.39% (0.06%) 0.18% 0.02%

Provision for credit losses to average loans and leases (annualized) 0.13% 0.39% 0.53% 1.30% 0.00% 0.57% 0.01%

Allowance for credit losses to net loans and leases 1.63% 1.64% 1.54% 1.53% 0.85% 1.63% 0.85%

Allowance for credit losses to net loans and leases, excluding PPP loans 1.74% 1.78% 1.67% 1.53% 0.85% 1.74% 0.85%

Allowance for credit losses to non-performing loans and leases 201.71% 166.08% 159.93% 169.63% 106.78% 201.71% 106.78%

Allowance for credit losses to non-performing assets 184.37% 159.33% 152.56% 158.31% 100.68% 184.37% 100.68%

Non-performing loans and leases to net loans and leases 0.81% 0.98% 0.96% 0.90% 0.79% 0.81% 0.79%

Non-performing loans and leases to net loans and leases, excluding

acquired loans and leases 0.62% 0.74% 0.63% 0.64% 0.65% 0.62% 0.65%

Non-performing assets to total assets 0.55% 0.67% 0.67% 0.66% 0.56% 0.55% 0.56%

Non-performing assets to total assets, excluding acquired loans and leases 0.42% 0.49% 0.43% 0.44% 0.40% 0.42% 0.40%

Equity Ratios:

Total shareholders' equity to total assets 11.72% 11.81% 11.76% 12.75% 12.75% 11.72% 12.75%

Total common shareholders' equity to total assets 11.03% 11.10% 11.04% 11.96% 11.96% 11.03% 11.96%

Tangible shareholders' equity to tangible assets* 8.26% 8.30% 8.18% 8.82% 8.92% 8.26% 8.92%

Tangible shareholders' equity to tangible assets-excluding PPP loans* 8.63% 8.77% 8.65% 8.82% 8.92% 8.63% 8.92%

Tangible common shareholders' equity to tangible assets* 7.54% 7.56% 7.44% 7.99% 8.09% 7.54% 8.09%

Tangible common shareholders' equity to tangible assets-excluding PPP loans* 7.87% 7.99% 7.86% 7.99% 8.09% 7.87% 8.09%

Capital Adequacy:

Common Equity Tier 1 capital 10.70% 10.64% 10.21% 10.11% 10.57% 10.70% 10.57%

Tier 1 capital 11.70% 11.65% 11.22% 11.13% 11.60% 11.70% 11.60%

Total capital 14.24% 14.20% 13.79% 13.75% 14.17% 14.24% 14.17%

Tier 1 leverage capital 8.63% 8.59% 8.54% 8.90% 9.69% 8.63% 9.69%

Estimated for current quarter

Common Share Data:

Basic earnings per share $ 0.65 $ 0.70 $ 0.57 $ 0.21 $ 0.63 $ 2.12 $ 2.31

Diluted earnings per share 0.65 0.69 0.57 0.21 0.63 2.12 2.30

Operating earnings per share* 0.69 0.70 0.57 0.25 0.67 2.20 2.40

Operating earnings per share- excluding MSR* 0.69 0.69 0.59 0.33 0.65 2.30 2.51

Cash dividends per share 0.190 0.185 0.185 0.185 0.185 0.745 0.710

Book value per share 25.89 25.50 25.01 24.50 24.09 25.89 24.09

Tangible book value per share* 17.04 16.71 16.19 15.66 15.62 17.04 15.62

Market value per share (last) 27.44 19.38 22.74 18.92 31.41 27.44 31.41

Market value per share (high) 28.54 24.29 25.93 31.61 32.97 31.61 33.45

Market value per share (low) 18.77 18.11 17.21 17.24 28.13 17.21 25.76

Market value per share (avg) 25.26 21.36 21.21 26.43 30.88 23.55 29.53

Dividend payout ratio 29.34% 26.56% 32.29% 88.20% 29.43% 35.12% 30.76%

Total shares outstanding 102,561,480 102,558,459 102,566,301 102,632,484 104,522,804 102,561,480 104,522,804

Average shares outstanding - basic 102,569,547 102,564,466 102,603,525 104,354,328 104,739,906 103,022,966 101,506,583

Average shares outstanding - diluted 102,817,409 102,839,749 102,827,225 104,733,897 105,144,032 103,304,570 101,810,640

Yield/Rate:

(Taxable equivalent basis)

Loans, loans held for sale, and leases net of unearned income 4.55% 4.54% 4.59% 5.00% 5.13% 4.66% 5.13%

Loans, loans held for sale, and leases net of unearned income, excluding

net accretion on acquired loans and leases 4.49% 4.44% 4.53% 4.93% 4.95% 4.59% 4.98%

Loans, loans held for sale, and leases net of unearned income, excluding

net accretion on acquired loans and leases - excluding PPP loans 4.53% 4.55% 4.67% 4.93% 4.95% 4.66% 4.98%

PPP loans 3.99% 3.11% 2.50% N/A N/A 3.38% N/A

Available-for-sale securities:

Taxable 1.53% 1.64% 1.95% 1.99% 2.00% 1.75% 2.06%

Tax-exempt 3.40% 3.67% 3.86% 4.44% 4.69% 3.85% 4.82%

Short-term, FHLB and other equity investments 0.13% 0.19% 0.20% 1.53% 1.95% 0.43% 2.37%

Total interest earning assets and revenue 3.70% 3.77% 3.87% 4.27% 4.48% 3.89% 4.57%

Deposits 0.38% 0.44% 0.50% 0.67% 0.68% 0.49% 0.68%

Demand - interest bearing 0.47% 0.53% 0.61% 0.84% 0.88% 0.61% 0.89%

Savings 0.15% 0.18% 0.18% 0.26% 0.28% 0.19% 0.29%

Other time 1.28% 1.41% 1.54% 1.64% 1.68% 1.47% 1.61%

Total interest bearing deposits 0.57% 0.65% 0.74% 0.92% 0.96% 0.71% 0.95%

Short-term borrowings 0.26% 0.25% 0.39% 1.25% 1.51% 0.54% 1.93%

Total interest bearing deposits and short-term borrowings 0.55% 0.63% 0.71% 0.95% 1.01% 0.70% 1.03%

Junior subordinated debt 4.05% 4.24% 4.18% 4.42% 4.17% 4.40% 4.17%

Long-term debt 4.84% 4.85% 4.81% 4.96% 4.83% 4.87% 4.88%

Total interest bearing liabilities and expense 0.63% 0.71% 0.79% 1.03% 1.04% 0.78% 1.04%

Interest bearing liabilities to interest earning assets 65.99% 65.61% 66.65% 70.81% 69.37% 67.17% 70.25%

Net interest tax equivalent adjustment $ 709 $ 618 $ 725 $ 714 $ 800 $ 2,766 $ 3,782

*Denotes non-GAAP financial measure. Refer to related disclosure andreconciliation on pages 26 and 27.

BancorpSouth Bank

Consolidated Balance Sheets

(Unaudited)

Dec-20 Sep-20 Jun-20 Mar-20 Dec-19

(Dollars in thousands)

Assets

Cash and due from banks $ 284,095 $ 306,164 $ 240,354 $ 253,495 $ 261,773

Interest bearing deposits with other banks

and Federal funds sold 133,273 39,782 318,615 29,490 71,233

Available-for-sale securities, at fair value 6,231,006 5,659,785 4,973,171 4,468,340 4,481,974

Loans and leases* 15,039,239 15,344,006 15,444,794 14,241,912 14,107,743

Less: Unearned income 16,760 16,271 17,373 17,267 18,060

Allowance for credit losses 244,422 250,624 237,025 218,199 119,066

Net loans and leases 14,778,057 15,077,111 15,190,396 14,006,446 13,970,617

Loans held for sale 397,076 304,215 391,051 194,321 210,361

Premises and equipment, net 508,147 508,149 504,748 497,669 480,901

Accrued interest receivable 106,318 110,185 101,321 70,463 65,173

Goodwill 851,612 847,531 847,984 848,242 825,679

Other identifiable intangibles 55,899 54,757 56,989 59,345 60,008

Bank owned life insurance 333,264 331,799 329,167 327,312 326,417

Other real estate owned 11,395 6,397 7,164 9,200 6,746

Other assets 391,052 309,547 275,216 268,201 291,694

Total Assets $ 24,081,194 $ 23,555,422 $ 23,236,176 $ 21,032,524 $ 21,052,576

Liabilities

Deposits:

Demand: Noninterest bearing $ 6,341,457 $ 6,336,792 $ 6,385,370 $ 4,861,155 $ 4,661,821

Interest bearing 8,524,010 8,170,402 7,907,637 7,268,053 7,176,934

Savings 2,452,059 2,325,980 2,234,853 2,013,343 1,937,985

Other time 2,528,915 2,579,805 2,651,626 2,745,365 2,633,959

Total deposits 19,846,441 19,412,979 19,179,486 16,887,916 16,410,699

Securities sold under agreement to repurchase 637,715 611,455 670,016 538,962 513,422

Federal funds purchased

and other short-term borrowing - 95,217 220 290,224 725,000

Accrued interest payable 10,885 15,286 13,476 17,482 15,124

Junior subordinated debt securities 297,250 297,074 296,898 296,723 296,547

Long-term debt 4,402 4,508 4,615 4,721 5,053

Other liabilities 462,024 336,364 338,778 314,592 401,714

Total Liabilities 21,258,717 20,772,883 20,503,489 18,350,620 18,367,559

Shareholders' Equity

Preferred stock 166,993 166,993 166,993 166,993 167,021

Common stock 256,404 256,396 256,416 256,581 261,307

Capital surplus 565,187 565,635 561,541 558,114 605,976

Accumulated other comprehensive income (loss) 11,923 18,490 25,191 17,849 (62,663)

Retained earnings 1,821,970 1,775,025 1,722,546 1,682,367 1,713,376

Total Shareholders' Equity 2,822,477 2,782,539 2,732,687 2,681,904 2,685,017

Total Liabilities & Shareholders' Equity $ 24,081,194 $ 23,555,422 $ 23,236,176 $ 21,032,524 $ 21,052,576

*Includes $975.4 million, $1.212 billion and $1.193 billion in PPP loans atDecember 31, 2020, September 30, 2020 and June 30, 2020.

BancorpSouth Bank

Consolidated Average Balance Sheets

(Unaudited)

Dec-20 Sep-20 Jun-20 Mar-20 Dec-19

(Dollars in thousands)

Assets

Cash and due from banks $ 247,799 $ 232,421 $ 229,334 $ 246,860 $ 244,444

Interest bearing deposits with other banks

and Federal funds sold 171,650 257,057 760,789 239,766 300,495

Available-for-sale securities, at fair value 5,820,425 5,309,982 4,437,614 4,461,298 3,555,014

Loans and leases* 15,235,827 15,386,721 15,132,600 14,244,649 14,078,793

Less: Unearned income 16,425 17,037 17,868 17,861 17,675

Allowance for credit losses 247,049 236,536 217,508 193,796 117,668

Net loans and leases 14,972,353 15,133,148 14,897,224 14,032,992 13,943,450

Loans held for sale 277,600 296,352 261,377 147,798 173,649

Premises and equipment, net 508,053 507,190 499,767 494,413 481,623

Accrued interest receivable 105,513 104,435 137,456 64,010 60,678

Goodwill 852,472 847,744 848,160 844,635 823,812

Other identifiable intangibles 54,858 56,045 58,280 58,805 60,559

Bank owned life insurance 332,543 330,642 328,037 326,808 328,567

Other real estate owned 14,872 7,754 8,410 8,151 7,820

Other assets 302,365 236,107 241,238 264,101 262,912

Total Assets $ 23,660,503 $ 23,318,877 $ 22,707,686 $ 21,189,637 $ 20,243,023

Liabilities

Deposits:

Demand: Noninterest bearing $ 6,391,006 $ 6,340,942 $ 5,942,570 $ 4,717,202 $ 4,803,104

Interest bearing 8,268,528 8,022,755 7,674,479 7,466,674 6,872,921

Savings 2,386,034 2,280,860 2,152,092 1,975,690 1,913,650

Other time 2,555,295 2,614,373 2,685,331 2,745,663 2,629,040

Total deposits 19,600,863 19,258,930 18,454,472 16,905,229 16,218,715

Securities sold under agreement to repurchase 672,018 681,400 644,127 541,707 530,217

Federal funds purchased

and other short-term borrowing 3,893 36,696 269,121 502,257 487,272

Accrued interest payable 14,175 15,589 16,268 19,205 14,942

Junior subordinated debt securities 297,145 296,969 296,793 296,617 135,535

Long-term debt 4,488 4,592 4,699 4,800 5,138

Other liabilities 293,332 294,831 283,772 261,123 278,454

Total Liabilities 20,885,914 20,589,007 19,969,252 18,530,938 17,670,273

Shareholders' Equity

Preferred stock 166,993 166,993 166,993 167,021 74,717

Common stock 256,422 256,412 256,515 261,065 261,905

Capital surplus 568,343 563,267 559,737 600,880 611,667

Accumulated other comprehensive income (loss) 12,432 24,758 23,016 (36,367) (53,111)

Retained earnings 1,770,399 1,718,440 1,732,173 1,666,100 1,677,572

Total Shareholders' Equity 2,774,589 2,729,870 2,738,434 2,658,699 2,572,750

Total Liabilities & Shareholders' Equity $ 23,660,503 $ 23,318,877 $ 22,707,686 $ 21,189,637 $ 20,243,023

*Includes $1.140 billion, $1.207 billion and $975.0 million in PPP loans forthe quarter ended December 31, 2020, September 30, 2020 and June 30, 2020.

BancorpSouth Bank

Consolidated Condensed Statements of Income

(Dollars in thousands, except per share data)

(Unaudited)

Quarter Ended Year Ended

Dec-20 Sep-20 Jun-20 Mar-20 Dec-19 Dec-20 Dec-19

INTEREST REVENUE:

Loans and leases $ 174,072 $ 175,810 $ 173,164 $ 177,019 $ 182,269 $ 700,065 $ 697,425

Deposits with other banks 50 74 207 739 1,225 1,070 6,489

Federal funds sold, securities purchased

under agreement to resell, FHLB and

other equity investments 6 52 178 315 426 551 2,077

Available-for-sale securities:

Taxable 21,895 21,280 20,783 21,508 17,241 85,466 56,660

Tax-exempt 760 986 1,178 1,060 1,266 3,984 7,160

Loans held for sale 2,504 2,468 1,962 1,423 1,385 8,357 5,201

Total interest revenue 199,287 200,670 197,472 202,064 203,812 799,493 775,012

INTEREST EXPENSE:

Interest bearing demand 9,766 10,773 11,631 15,522 15,202 47,692 58,771

Savings 872 1,012 943 1,290 1,334 4,117 5,361

Other time 8,189 9,287 10,296 11,168 11,134 38,940 39,380

Federal funds purchased and securities sold

under agreement to repurchase 276 279 291 1,436 1,591 2,282 7,195

Short-term and long-term debt 47 49 477 1,857 2,293 2,430 12,875

Junior subordinated debt 3,201 3,338 3,263 3,261 1,482 13,063 1,482

Other - 1 1 - 2 2 4

Total interest expense 22,351 24,739 26,902 34,534 33,038 108,526 125,068

Net interest revenue 176,936 175,931 170,570 167,530 170,774 690,967 649,944

Provision for credit losses 5,000 15,000 20,000 46,000 - 86,000 1,500

Net interest revenue, after provision for

credit losses 171,936 160,931 150,570 121,530 170,774 604,967 648,444

NONINTEREST REVENUE:

Mortgage banking 20,129 27,097 29,557 9,470 10,102 86,253 19,782

Credit card, debit card and merchant fees 10,053 9,938 9,080 9,176 9,836 38,247 38,656

Deposit service charges 9,708 8,892 7,647 11,682 12,193 37,929 46,015

Security gains(losses), net 63 18 62 (85) (41) 58 174

Insurance commissions 29,815 32,750 33,118 29,603 27,648 125,286 123,291

Wealth management 6,751 6,471 6,421 6,570 6,617 26,213 24,809

Other 2,307 4,758 5,373 10,080 8,342 22,518 27,954

Total noninterest revenue 78,826 89,924 91,258 76,496 74,697 336,504 280,681

NONINTEREST EXPENSE:

Salaries and employee benefits 97,215 104,219 108,103 108,272 97,137 417,809 396,500

Occupancy, net of rental income 13,004 13,053 12,890 12,708 12,267 51,655 48,129

Equipment 4,756 4,519 4,762 4,649 4,725 18,686 17,712

Deposit insurance assessments 1,696 1,522 1,962 1,546 2,200 6,726 9,143

Pension settlement expense 5,846 - - - - 5,846 -

Other 45,394 32,192 34,787 40,831 46,022 153,204 158,123

Total noninterest expense 167,911 155,505 162,504 168,006 162,351 653,926 629,607

Income before income taxes 82,851 95,350 79,324 30,020 83,120 287,545 299,518

Income tax expense 14,046 21,525 18,164 5,759 17,271 59,494 65,257

Net income $ 68,805 $ 73,825 $ 61,160 $ 24,261 $ 65,849 $ 228,051 $ 234,261

Less: Preferred dividends 2,372 2,372 2,372 2,372 - 9,488 -

Net income available to common shareholders $ 66,433 $ 71,453 $ 58,788 $ 21,889 $ 65,849 $ 218,563 $ 234,261

Net income per common share: Basic $ 0.65 $ 0.70 $ 0.57 $ 0.21 $ 0.63 $ 2.12 $ 2.31

Diluted $ 0.65 $ 0.69 $ 0.57 $ 0.21 $ 0.63 $ 2.12 $ 2.30

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

Quarter Ended

Dec-20 Sep-20 Jun-20 Mar-20 Dec-19

LOAN AND LEASE PORTFOLIO:

Commercial and industrial

Commercial and industrial-non real estate 2,673,429 2,937,608 3,038,957 2,008,043 1,979,507

Commercial and industrial-owner occupied 2,281,127 2,297,008 2,296,287 2,290,585 2,268,813

Total commercial and industrial 4,954,556 5,234,616 5,335,244 4,298,628 4,248,320

Commercial real estate

Agricultural 317,994 333,839 333,615 339,539 337,349

Construction, acquisition and development 1,728,682 1,700,030 1,658,678 1,582,039 1,577,342

Commercial real estate 3,211,434 3,229,959 3,323,744 3,303,537 3,220,914

Total commercial real estate 5,258,110 5,263,828 5,316,037 5,225,115 5,135,605

Consumer

Consumer mortgages 3,726,241 3,704,490 3,646,168 3,572,277 3,543,075

Home equity 630,097 658,708 655,543 686,202 683,515

Credit cards 89,077 85,760 86,592 93,896 102,559

Total consumer 4,445,415 4,448,958 4,388,303 4,352,375 4,329,149

All other 364,398 380,333 387,837 348,527 376,609

Total loans $ 15,022,479 $ 15,327,735 $ 15,427,421 $ 14,224,645 $ 14,089,683

ALLOWANCE FOR CREDIT LOSSES:

Balance, beginning of period $ 250,624 $ 237,025 $ 218,199 $ 119,066 $ 116,908

Impact of adopting ASC 326 - cumulative effect adjustment - - - 40,000 -

Impact of adopting ASC 326 - purchased loans with credit

deterioration - - - 22,634 -

Loans and leases charged-off:

Commercial and industrial

Commercial and industrial-non real estate (4,343) (560) (1,506) (10,792) (1,273)

Commercial and industrial-owner occupied (1,168) (441) (13) (184) (192)

Total commercial and industrial (5,511) (1,001) (1,519) (10,976) (1,465)

Commercial real estate

Agricultural (155) - (21) (65) (11)

Construction, acquisition and development (1,773) - (9) (3,173) (26)

Commercial real estate (3,134) (738) - (67) -

Total commercial real estate (5,062) (738) (30) (3,305) (37)

Consumer

Consumer mortgages (731) (81) (124) (524) (687)

Home equity (395) (41) (162) (236) (173)

Credit cards (458) (682) (703) (798) (797)

Total consumer (1,584) (804) (989) (1,558) (1,657)

All other (875) (599) (396) (914) (965)

Total loans charged-off (13,032) (3,142) (2,934) (16,753) (4,124)

Recoveries:

Commercial and industrial

Commercial and industrial-non real estate 779 294 277 355 353

Commercial and industrial-owner occupied 37 163 136 1,179 30

Total commercial and industrial 816 457 413 1,534 383

Commercial real estate

Agricultural 24 3 6 6 4

Construction, acquisition and development 73 55 172 245 584

Commercial real estate 45 209 50 135 4,212

Total commercial real estate 142 267 228 386 4,800

Consumer

Consumer mortgages 230 352 345 397 407

Home equity 151 132 259 80 216

Credit cards 211 270 195 285 218

Total consumer 592 754 799 762 841

All other 280 263 320 344 258

Total recoveries 1,830 1,741 1,760 3,026 6,282

Net (charge-offs)recoveries (11,202) (1,401) (1,174) (13,727) 2,158

Initial allowance on loans purchased with credit deterioration - - - 4,226 -

Provision:

Initial provision for loans acquired during the quarter - - - 1,000 -

Provision for credit losses related to loans and leases 5,000 15,000 20,000 45,000 -

Total provision 5,000 15,000 20,000 46,000 -

Balance, end of period $ 244,422 $ 250,624 $ 237,025 $ 218,199 $ 119,066

Average loans for period $ 15,219,402 $ 15,369,684 $ 15,114,732 $ 14,226,788 $ 14,061,118

Ratio:

Net charge-offs(recoveries) to average loans (annualized) 0.29% 0.04% 0.03% 0.39% (0.06%)

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

Quarter Ended

Dec-20 Sep-20 Jun-20 Mar-20 Dec-19

BXS ORIGINATED LOANS AND LEASES:

Loans and leases charged off:

Commercial and industrial

Commercial and industrial-non real estate $ (1,991) $ (490) $ (420) $ (230) $ (844)

Commercial and industrial-owner occupied (303) (434) (13) (19) (184)

Total commercial and industrial (2,294) (924) (433) (249) (1,028)

Commercial real estate

Agricultural (124) - - (65) (6)

Construction, acquisition and development (1,709) - - (121) (26)

Commercial real estate (1,704) (155) - (67) -

Total real estate (3,537) (155) - (253) (32)

Consumer

Consumer mortgages (537) (70) (113) (357) (648)

Home equity (395) (41) (162) (236) (173)

Credit cards (458) (682) (703) (798) (797)

Total consumer (1,390) (793) (978) (1,391) (1,618)

All other (698) (459) (288) (704) (782)

Total loans charged off (7,919) (2,331) (1,699) (2,597) (3,460)

Recoveries:

Commercial and industrial

Commercial and industrial-non real estate 645 231 210 325 277

Commercial and industrial-owner occupied 27 163 136 1,177 30

Total commercial and industrial 672 394 346 1,502 307

Commercial real estate

Agricultural 23 3 5 4 4

Construction, acquisition and development 73 55 170 244 583

Commercial real estate 45 208 50 135 4,212

Total real estate 141 266 225 383 4,799

Consumer

Consumer mortgages 221 350 343 395 405

Home equity 149 130 258 79 215

Credit cards 211 270 195 285 218

Total consumer 581 750 796 759 838

All other 249 235 275 316 245

Total recoveries 1,643 1,645 1,642 2,960 6,189

Net (charge-offs)/recoveries $ (6,276) $ (686) $ (57) $ 363 $ 2,729

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

Quarter Ended

Dec-20 Sep-20 Jun-20 Mar-20 Dec-19

ACQUIRED LOANS AND LEASES:

Loans and leases charged off:

Commercial and industrial

Commercial and industrial-non real estate $ (2,352) $ (70) $ (1,086) $ (10,562) $ (429)

Commercial and industrial-owner occupied (865) (7) - (165) (8)

Total commercial and industrial (3,217) (77) (1,086) (10,727) (437)

Commercial real estate

Agricultural (31) - (21) - (5)

Construction, acquisition and development (64) - (9) (3,052) -

Commercial real estate (1,430) (583) - - -

Total real estate (1,525) (583) (30) (3,052) (5)

Consumer

Consumer mortgages (194) (11) (11) (167) (39)

Home equity - - - - -

Credit cards - - - - -

Total consumer (194) (11) (11) (167) (39)

All other (177) (140) (108) (210) (183)

Total loans charged off (5,113) (811) (1,235) (14,156) (664)

Recoveries:

Commercial and industrial

Commercial and industrial-non real estate 134 63 67 30 76

Commercial and industrial-owner occupied 10 - - 2 -

Total commercial and industrial 144 63 67 32 76

Commercial real estate

Agricultural 1 - 1 2 -

Construction, acquisition and development - - 2 1 1

Commercial real estate - 1 - - -

Total real estate 1 1 3 3 1

Consumer

Consumer mortgages 9 2 2 2 2

Home equity 2 2 1 1 1

Credit cards - - - - -

Total consumer 11 4 3 3 3

All other 31 28 45 28 13

Total recoveries 187 96 118 66 93

Net (charge-offs)/recoveries $ (4,926) $ (715) $ (1,117) $ (14,090) $ (571)

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

Quarter Ended

Dec-20 Sep-20 Jun-20 Mar-20 Dec-19

NON-PERFORMING ASSETS

NON-PERFORMING LOANS AND LEASES:

Nonaccrual Loans and Leases

Commercial and industrial

Commercial and industrial-non real estate $ 12,768 $ 17,936 $ 16,124 $ 16,589 $ 11,105

Commercial and industrial-owner occupied 15,783 18,343 16,745 11,212 7,838

Total commercial and industrial 28,551 36,279 32,869 27,801 18,943

Commercial real estate

Agricultural 5,013 5,907 5,244 5,454 4,772

Construction, acquisition and development 9,738 10,434 9,715 13,899 6,225

Commercial real estate 16,249 32,554 45,047 29,697 16,199

Total commercial real estate 31,000 48,895 60,006 49,050 27,196

Consumer

Consumer mortgages 32,951 32,872 30,672 29,834 28,879

Home equity 2,657 3,325 2,584 2,597 2,993

Credit cards 173 144 90 122 63

Total consumer 35,781 36,341 33,346 32,553 31,935

All other 1,046 593 532 670 722

Total nonaccrual loans and leases $ 96,378 $ 122,108 $ 126,753 $ 110,074 $ 78,796

Loans and Leases 90+ Days Past Due, Still Accruing: 14,320 17,641 9,877 7,272 17,531

Restructured Loans and Leases, Still Accruing 10,475 11,154 11,575 11,284 15,184

Total non-performing loans and leases $ 121,173 $ 150,903 $ 148,205 $ 128,630 $ 111,511

OTHER REAL ESTATE OWNED: 11,395 6,397 7,164 9,200 6,746

Total Non-performing Assets $ 132,568 $ 157,300 $ 155,369 $ 137,830 $ 118,257

BXS originated assets $ 97,025 $ 109,418 $ 94,155 $ 85,908 $ 78,295

Acquired assets 35,543 47,882 61,214 51,922 39,962

Total Non-performing Assets $ 132,568 $ 157,300 $ 155,369 $ 137,830 $ 118,257

Additions to Nonaccrual Loans and Leases During the Quarter $ 11,087 $ 19,973 $ 36,619 $ 47,523 $ 25,147

Loans and Leases 30-89 Days Past Due, Still Accruing:

BXS originated loans $ 40,424 $ 42,978 $ 35,002 $ 54,315 $ 44,559

Acquired loans 6,048 5,694 10,450 14,405 23,054

Total Loans and Leases 30-89 days past due, still accruing $ 46,472 $ 48,672 $ 45,452 $ 68,720 $ 67,613

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

December 31, 2020

Purchased

Special Credit

Pass Mention Substandard Doubtful Loss Impaired Deteriorated (Loss) Total

LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:

Commercial and industrial

Commercial and industrial-non real estate $ 2,616,471 $ 7,202 $ 39,040 $ 172 $ - $ 1,949 $ 8,595 $ 2,673,429

Commercial and industrial-owner occupied 2,208,214 - 58,683 - - 11,579 2,651 2,281,127

Total commercial and industrial 4,824,685 7,202 97,723 172 - 13,528 11,246 4,954,556

Commercial real estate

Agricultural 310,766 - 4,526 - - 777 1,925 317,994

Construction, acquisition and development 1,686,907 1,534 32,363 - - 2,054 5,824 1,728,682

Commercial real estate 3,062,894 - 134,054 - - 10,780 3,706 3,211,434

Total commercial real estate 5,060,567 1,534 170,943 - - 13,611 11,455 5,258,110

Consumer

Consumer mortgages 3,645,357 - 78,287 - - 2,406 191 3,726,241

Home equity 624,581 - 5,516 - - - - 630,097

Credit cards 89,077 - - - - - - 89,077

Total consumer 4,359,015 - 83,803 - - 2,406 191 4,445,415

All other 357,812 - 6,519 - - - 67 364,398

Total loans $ 14,602,079 $ 8,736 $ 358,988 $ 172 $ - $ 29,545 $ 22,959 $ 15,022,479

BXS originated loans $ 13,459,529 $ 8,736 $ 259,682 $ 172 $ - $ 17,520 $ - $ 13,745,639

Acquired loans* 1,142,550 - 99,306 - - 12,025 22,959 1,276,840

Total Loans $ 14,602,079 $ 8,736 $ 358,988 $ 172 $ - $ 29,545 $ 22,959 $ 15,022,479

September 30, 2020

Purchased

Special Credit

Pass Mention Substandard Doubtful Loss Impaired Deteriorated (Loss) Total

LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:

Commercial and industrial

Commercial and industrial-non real estate $ 2,875,468 $ - $ 47,526 $ 178 $ - $ 3,664 $ 10,772 $ 2,937,608

Commercial and industrial-owner occupied 2,224,302 - 56,919 - - 12,116 3,671 2,297,008

Total commercial and industrial 5,099,770 - 104,445 178 - 15,780 14,443 5,234,616

Commercial real estate

Agricultural 324,010 - 7,109 - - 725 1,995 333,839

Construction, acquisition and development 1,656,961 - 34,197 - - 2,961 5,911 1,700,030

Commercial real estate 3,070,472 - 127,835 - - 27,493 4,159 3,229,959

Total commercial real estate 5,051,443 - 169,141 - - 31,179 12,065 5,263,828

Consumer

Consumer mortgages 3,615,071 - 85,827 - - 2,859 733 3,704,490

Home equity 651,525 - 7,183 - - - - 658,708

Credit cards 85,760 - - - - - - 85,760

Total consumer 4,352,356 - 93,010 - - 2,859 733 4,448,958

All other 374,374 - 5,887 - - - 72 380,333

Total loans $ 14,877,943 $ - $ 372,483 $ 178 $ - $ 49,818 $ 27,313 $ 15,327,735

BXS originated loans $ 13,592,460 $ - $ 252,875 $ 178 $ - $ 30,909 $ - $ 13,876,422

Acquired loans* 1,285,483 - 119,608 - - 18,909 27,313 1,451,313

Total Loans $ 14,877,943 $ - $ 372,483 $ 178 $ - $ 49,818 $ 27,313 $ 15,327,735

*Includes certain loans that are no longer included in the "Net book value ofacquired loans" on page 12 as a result of maturity, refinance, or othertriggering event.

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

Quarter Ended

Dec-20 Sep-20 Jun-20 Mar-20 Dec-19

LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:

Pass $ 14,602,079 $ 14,877,943 $ 14,985,673 $ 13,821,602 $ 13,738,979

Special Mention 8,736 - 4,264 7,129 2,240

Substandard 358,988 372,483 350,264 323,697 298,491

Doubtful 172 178 179 191 194

Loss - - - 667 -

Impaired 29,545 49,818 57,406 40,627 24,094

Purchased Credit Deteriorated (Loss) 22,959 27,313 29,635 30,732 -

Purchased Credit Impaired - - - - 25,685

Total $ 15,022,479 $ 15,327,735 $ 15,427,421 $ 14,224,645 $ 14,089,683

BXS ORIGINATED LOAN PORTFOLIO BY INTERNALLY

ASSIGNED GRADE:

Pass $ 13,459,529 $ 13,592,460 $ 13,516,292 $ 12,150,616 $ 12,080,336

Special Mention 8,736 - 2,741 2,045 -

Substandard 259,682 252,875 231,687 225,506 202,017

Doubtful 172 178 179 191 194

Loss - - - - -

Impaired 17,520 30,909 28,288 22,356 17,110

Purchased Credit Deteriorated (Loss) - - - - -

Purchased Credit Impaired - - - - -

Total $ 13,745,639 $ 13,876,422 $ 13,779,187 $ 12,400,714 $ 12,299,657

ACQUIRED LOAN PORTFOLIO BY INTERNALLY

ASSIGNED GRADE:

Pass $ 1,142,550 $ 1,285,483 $ 1,469,381 $ 1,670,986 $ 1,658,643

Special Mention - - 1,523 5,084 2,240

Substandard 99,306 119,608 118,577 98,191 96,474

Doubtful - - - - -

Loss - - - 667 -

Impaired 12,025 18,909 29,118 18,271 6,984

Purchased Credit Deteriorated (Loss) 22,959 27,313 29,635 30,732 -

Purchased Credit Impaired - - - - 25,685

Total $ 1,276,840 $ 1,451,313 $ 1,648,234 $ 1,823,931 $ 1,790,026

BancorpSouth Bank

Geographical Information

(Dollars in thousands)

(Unaudited)

December 31, 2020

Alabama

and Florida

Panhandle Arkansas Louisiana Mississippi Missouri Tennessee Texas Other Total

LOAN AND LEASE PORTFOLIO:

Commercial and industrial

Commercial and industrial-non real estate $ 235,705 $ 203,719 $ 315,937 $ 685,643 $ 78,660 $ 156,025 $ 993,617 $ 4,123 $ 2,673,429

Commercial and industrial-owner occupied 266,149 184,830 230,662 615,647 64,430 123,899 785,629 9,881 2,281,127

Total commercial and industrial 501,854 388,549 546,599 1,301,290 143,090 279,924 1,779,246 14,004 4,954,556

Commercial real estate

Agricultural 26,568 67,754 18,735 69,091 6,818 10,552 117,374 1,102 317,994

Construction, acquisition and development 176,272 56,042 79,577 333,078 20,293 87,469 975,951 - 1,728,682

Commercial real estate 332,075 336,629 260,110 664,930 221,773 221,706 1,171,593 2,618 3,211,434

Total commercial real estate 534,915 460,425 358,422 1,067,099 248,884 319,727 2,264,918 3,720 5,258,110

Consumer

Consumer mortgages 598,700 325,951 342,591 820,025 111,956 326,826 1,148,809 51,383 3,726,241

Home equity 94,774 46,559 77,749 218,451 16,314 133,636 42,268 346 630,097

Credit cards - - - - - - - 89,077 89,077

Total consumer 693,474 372,510 420,340 1,038,476 128,270 460,462 1,191,077 140,806 4,445,415

All other 56,584 39,079 37,097 114,565 3,054 24,281 80,821 8,917 364,398

Total loans $ 1,786,827 $ 1,260,563 $ 1,362,458 $ 3,521,430 $ 523,298 $ 1,084,394 $ 5,316,062 $ 167,447 $ 15,022,479

Loan growth, excluding loans acquired during

the quarter (annualized) (8.03%) (14.12%) (27.10%) (8.00%) (6.33%) (26.19%) 2.81% (6.11%) (7.92%)

Loan growth, excluding PPP loans (annualized) 0.96% (7.80%) (21.61%) (2.52%) (3.49%) (17.32%) 8.16% 4.28% (1.78%)

NON-PERFORMING LOANS AND LEASES:

Commercial and industrial

Commercial and industrial-non real estate $ 233 $ 1,050 $ 1,774 $ 1,113 $ 1,408 $ 530 $ 7,202 $ 283 $ 13,593

Commercial and industrial-owner occupied 1,211 1,630 497 3,196 166 280 13,938 - 20,918

Total commercial and industrial 1,444 2,680 2,271 4,309 1,574 810 21,140 283 34,511

Commercial real estate

Agricultural 312 409 44 988 - - 3,264 - 5,017

Construction, acquisition and development 102 133 1,692 932 - 215 6,949 - 10,023

Commercial real estate 3,027 204 4,488 1,054 - 94 8,282 - 17,149

Total commercial real estate 3,441 746 6,224 2,974 - 309 18,495 - 32,189

Consumer

Consumer mortgages 9,401 3,621 4,345 13,420 1,807 2,646 12,738 1,323 49,301

Home equity 331 115 306 859 103 1,038 399 - 3,151

Credit cards - - - - - - - 918 918

Total consumer 9,732 3,736 4,651 14,279 1,910 3,684 13,137 2,241 53,370

All other 191 2 97 116 - 14 678 5 1,103

Total loans $ 14,808 $ 7,164 $ 13,243 $ 21,678 $ 3,484 $ 4,817 $ 53,450 $ 2,529 $ 121,173

NON-PERFORMING LOANS AND LEASES

AS A PERCENTAGE OF OUTSTANDING:

Commercial and industrial

Commercial and industrial-non real estate 0.10% 0.52% 0.56% 0.16% 1.79% 0.34% 0.72% 6.86% 0.51%

Commercial and industrial-owner occupied 0.46% 0.88% 0.22% 0.52% 0.26% 0.23% 1.77% 0.00% 0.92%

Total commercial and industrial 0.29% 0.69% 0.42% 0.33% 1.10% 0.29% 1.19% 2.02% 0.70%

Commercial real estate

Agricultural 1.17% 0.60% 0.23% 1.43% 0.00% 0.00% 2.78% 0.00% 1.58%

Construction, acquisition and development 0.06% 0.24% 2.13% 0.28% 0.00% 0.25% 0.71% N/A 0.58%

Commercial real estate 0.91% 0.06% 1.73% 0.16% 0.00% 0.04% 0.71% 0.00% 0.53%

Total commercial real estate 0.64% 0.16% 1.74% 0.28% 0.00% 0.10% 0.82% 0.00% 0.61%

Consumer

Consumer mortgages 1.57% 1.11% 1.27% 1.64% 1.61% 0.81% 1.11% 2.57% 1.32%

Home equity 0.35% 0.25% 0.39% 0.39% 0.63% 0.78% 0.94% 0.00% 0.50%

Credit cards N/A N/A N/A N/A N/A N/A N/A 1.03% 1.03%

Total consumer 1.40% 1.00% 1.11% 1.37% 1.49% 0.80% 1.10% 1.59% 1.20%

All other 0.34% 0.01% 0.26% 0.10% 0.00% 0.06% 0.84% 0.06% 0.30%

Total loans 0.83% 0.57% 0.97% 0.62% 0.67% 0.44% 1.01% 1.51% 0.81%

BancorpSouth Bank

Noninterest Revenue and Expense

(Dollars in thousands)

(Unaudited)

Quarter Ended Year Ended

Dec-20 Sep-20 Jun-20 Mar-20 Dec-19 Dec-20 Dec-19

NONINTEREST REVENUE:

Mortgage banking excl. MSR and MSR Hedge market value adj $ 19,917 $ 26,667 $ 31,930 $ 20,553 $ 6,938 $ 99,067 $ 34,297

MSR and MSR Hedge market value adjustment 212 430 (2,373) (11,083) 3,164 (12,814) (14,515)

Credit card, debit card and merchant fees 10,053 9,938 9,080 9,176 9,836 38,247 38,656

Deposit service charges 9,708 8,892 7,647 11,682 12,193 37,929 46,015

Securities gains (losses), net 63 18 62 (85) (41) 58 174

Insurance commissions 29,815 32,750 33,118 29,603 27,648 125,286 123,291

Trust income 4,046 3,902 4,064 4,013 3,951 16,025 16,042

Annuity fees 53 53 54 55 136 215 830

Brokerage commissions and fees 2,652 2,516 2,303 2,502 2,530 9,973 7,937

Bank-owned life insurance 2,425 1,902 1,855 1,999 3,427 8,181 9,632

Other miscellaneous income (118) 2,856 3,518 8,081 4,915 14,337 18,322

Total noninterest revenue $ 78,826 $ 89,924 $ 91,258 $ 76,496 $ 74,697 $ 336,504 $ 280,681

NONINTEREST EXPENSE:

Salaries and employee benefits $ 97,215 $ 104,219 $ 108,103 $ 108,272 $ 97,137 $ 417,809 $ 396,500

Occupancy, net of rental income 13,004 13,053 12,890 12,708 12,267 51,655 48,129

Equipment 4,756 4,519 4,762 4,649 4,725 18,686 17,712

Deposit insurance assessments 1,696 1,522 1,962 1,546 2,200 6,726 9,143

Pension settlement expense 5,846 - - - - 5,846 -

Advertising 899 826 918 1,099 1,153 3,742 4,909

Foreclosed property expense 2,122 (278) 1,306 924 855 4,074 2,868

Telecommunications 1,448 1,462 1,512 1,461 1,504 5,883 5,663

Public relations 897 1,130 459 680 880 3,166 3,648

Data processing 9,980 9,477 9,693 9,646 10,041 38,796 35,517

Computer software 5,301 4,779 4,979 4,315 4,478 19,374 15,837

Amortization of intangibles 2,499 2,357 2,355 2,394 2,508 9,605 9,118

Legal 1,474 (316) 1,375 898 854 3,431 3,555

Merger expense 212 129 510 4,494 5,782 5,345 13,871

Postage and shipping 1,418 1,199 1,198 1,441 1,353 5,256 5,263

Other miscellaneous expense 19,144 11,427 10,482 13,479 16,614 54,532 57,874

Total noninterest expense $ 167,911 $ 155,505 $ 162,504 $ 168,006 $ 162,351 $ 653,926 $ 629,607

INSURANCE COMMISSIONS:

Property and casualty commissions $ 21,304 $ 24,060 $ 23,644 $ 21,246 $ 19,994 $ 90,254 $ 87,304

Life and health commissions 5,915 6,072 6,771 6,175 5,979 24,933 25,432

Risk management income 829 609 540 532 667 2,510 2,440

Other 1,767 2,009 2,163 1,650 1,008 7,589 8,115

Total insurance commissions $ 29,815 $ 32,750 $ 33,118 $ 29,603 $ 27,648 $ 125,286 $ 123,291

BancorpSouth Bank

Selected Additional Information

(Dollars in thousands)

(Unaudited)

Quarter Ended

Dec-20 Sep-20 Jun-20 Mar-20 Dec-19

MORTGAGE SERVICING RIGHTS:

Fair value, beginning of period $ 44,944 $ 40,821 $ 42,243 $ 57,109 $ 51,492

Additions to mortgage servicing rights:

Originations of servicing assets 6,608 7,041 4,297 3,079 4,025

Changes in fair value:

Due to payoffs/paydowns (3,898) (3,198) (3,144) (2,506) (2,323)

Due to change in valuation inputs or

assumptions used in the valuation model (83) 280 (2,575) (15,438) 3,915

Other changes in fair value - - - (1) -

Fair value, end of period $ 47,571 $ 44,944 $ 40,821 $ 42,243 $ 57,109

MORTGAGE BANKING REVENUE:

Production revenue:

Origination $ 18,561 $ 23,632 $ 30,194 $ 17,906 $ 4,326

Servicing 5,254 6,233 4,880 5,153 4,935

Payoffs/Paydowns (3,898) (3,198) (3,144) (2,506) (2,323)

Total production revenue 19,917 26,667 31,930 20,553 6,938

Market value adjustment on MSR (83) 280 (2,575) (15,438) 3,915

Market value adjustment on MSR Hedge 295 150 202 4,355 (751)

Total mortgage banking revenue $ 20,129 $ 27,097 $ 29,557 $ 9,470 $ 10,102

Mortgage loans serviced $ 7,330,293 $ 7,218,090 $ 7,000,425 $ 6,999,383 $ 6,898,195

MSR/mtg loans serviced 0.65% 0.62% 0.58% 0.60% 0.83%

AVAILABLE-FOR-SALE SECURITIES, at fair value

U.S. Government agencies 2,871,408 $ 3,116,458 $ 3,348,206 $ 3,532,905 $ 3,599,317

U.S. Government agency issued residential

mortgage-back securities 2,421,409 1,625,325 699,864 132,902 133,375

U.S. Government agency issued commercial

mortgage-back securities 806,206 758,116 759,980 595,885 609,009

Obligations of states and political subdivisions 113,953 141,896 163,121 206,648 140,273

Corporate bonds 18,030 17,990 2,000 - -

Total available-for-sale securities $ 6,231,006 $ 5,659,785 $ 4,973,171 $ 4,468,340 $ 4,481,974

BancorpSouth Bank

Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions

(Dollars in thousands, except per share amounts)

(Unaudited)

Management evaluates the Company's capital position and operating performanceby utilizing certain financial measures not calculated in accordance with U.S.Generally Accepted Accounting Principles (GAAP), including net operatingincome, net operating income available to common shareholders, net operatingincome-excluding MSR, net operating income available to commonshareholders-excluding MSR, pre-tax pre-provision net revenue, total operatingexpense, tangible shareholders' equity to tangible assets, tangibleshareholders' equity to tangible assets-excluding PPP loans, tangible commonshareholders' equity to tangible assets, tangible common shareholders' equityto tangible assets-excluding PPP loans, return on tangible equity, return ontangible common equity, operating return on tangible equity-excluding MSR,operating return on tangible common equity-excluding MSR, operating return onaverage assets-excluding MSR, operating return on average shareholders'equity-excluding MSR, operating return on average common shareholders'equity-excluding MSR, pre-tax pre-provision net revenue to total averageassets, tangible book value per common share, operating earnings per commonshare, operating earnings per common share-excluding MSR, efficiency ratio (taxequivalent) and operating efficiency ratio-excluding MSR (tax equivalent). TheCompany has included these non-GAAP financial measures in this news release forthe applicable periods presented. Management believes that the presentation ofthese non-GAAP financial measures (i) provides important supplementalinformation that contributes to a proper understanding of the Company's capitalposition and operating performance, (ii) enables a more complete understandingof factors and trends affecting the Company's business and (iii) allowsinvestors to evaluate the Company's performance in a manner similar tomanagement, the financial services industry, bank stock analysts and bankregulators. Reconciliations of these non-GAAP financial measures to the mostdirectly comparable GAAP financial measures are presented in the tables below. These non-GAAP financial measures should not be considered as substitutes forGAAP financial measures, and the Company strongly encourages investors toreview the GAAP financial measures included in this news release and not toplace undue reliance upon any single financial measure. In addition, becausenon-GAAP financial measures are not standardized, it may not be possible tocompare the non-GAAP financial measures presented in this news release withother companies' non-GAAP financial measures having the same or similar names.

Reconciliation of Net Operating Income, Net Operating Income Available toCommon Shareholders, Net Operating Income-Excluding MSR, and Net OperatingIncome Available to Common Shareholders-excluding MSR to Net Income:

Quarter ended Year Ended

12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019 12/31/2020 12/31/2019

Net income $ 68,805 $ 73,825 $ 61,160 $ 24,261 $ 65,849 $ 228,051 $ 234,261

Plus: Merger expense, net of tax 159 97 383 3,372 4,339 4,011 10,411

Initial provision for acquired loans,

net of tax - - - 751 - 751 -

Pension settlement expense, net of tax 4,388 - - - - 4,388 -

Less: Security gains(losses), net of tax 48 13 47 (64) (30) 44 132

Net operating income $ 73,304 $ 73,909 $ 61,496 $ 28,448 $ 70,218 $ 237,157 $ 244,540

Less: Preferred dividends 2,372 2,372 2,372 2,372 - 9,488 -

Net operating income available to

common shareholders $ 70,932 $ 71,537 $ 59,124 $ 26,076 $ 70,218 $ 227,669 $ 244,540

Net operating income $ 73,304 $ 73,909 $ 61,496 $ 28,448 $ 70,218 $ 237,157 $ 244,540

Less: MSR market value adjustment, net of tax 159 323 (1,781) (8,318) 2,374 (9,617) (10,894)

Net operating income-excluding MSR $ 73,145 $ 73,586 $ 63,277 $ 36,766 $ 67,844 $ 246,774 $ 255,434

Less: Preferred dividends 2,372 2,372 2,372 2,372 - 9,488 -

Net operating income available to common

shareholders-excluding MSR $ 70,773 $ 71,214 $ 60,905 $ 34,394 $ 67,844 $ 237,286 $ 255,434

Reconciliation of Net Income to Pre-Tax Pre-Provision Net Revenue

Net income $ 68,805 $ 73,825 $ 61,160 $ 24,261 $ 65,849 $ 228,051 $ 234,261

Plus: Provision for credit losses 5,000 15,000 20,000 46,000 - 86,000 1,500

Merger expense 212 129 510 4,494 5,782 5,345 13,871

Pension settlement expense 5,846 - - - - 5,846 -

Income tax expense 14,046 21,525 18,164 5,759 17,271 59,494 65,257

Less: Security gains(losses) 63 18 62 (85) (41) 58 174

MSR market value adjustment 212 430 (2,373) (11,083) 3,164 (12,814) (14,515)

Pre-tax pre-provision net revenue $ 93,634 $ 110,031 $ 102,145 $ 91,682 $ 85,779 $ 397,492 $ 329,230

Reconciliation of Total Operating Expense to Total Noninterest Expense:

Total noninterest expense $ 167,911 $ 155,505 $ 162,504 $ 168,006 $ 162,351 $ 653,926 $ 629,607

Less: Merger expense 212 129 510 4,494 5,782 5,345 13,871

Pension settlement expense 5,846 - - - - 5,846 -

Total operating expense $ 161,853 $ 155,376 $ 161,994 $ 163,512 $ 156,569 $ 642,735 $ 615,736

BancorpSouth Bank

Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions

(Dollars in thousands, except per share amounts)

(Unaudited)

Reconciliation of Tangible Assets and Tangible Shareholders' Equity to

Total Assets and Total Shareholders' Equity:

Quarter ended Year Ended

12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019 12/31/2020 12/31/2019

Tangible assets

Total assets $ 24,081,194 $ 23,555,422 $ 23,236,176 $ 21,032,524 $ 21,052,576 $ 24,081,194 $ 21,052,576

Less: Goodwill 851,612 847,531 847,984 848,242 825,679 851,612 825,679

Other identifiable intangible assets 55,899 54,757 56,989 59,345 60,008 55,899 60,008

Total tangible assets $ 23,173,683 $ 22,653,134 $ 22,331,203 $ 20,124,937 $ 20,166,889 $ 23,173,683 $ 20,166,889

Less: PPP loans 975,421 1,212,246 1,192,715 - - 975,421 -

Total tangible assets-excluding PPP loans $ 22,198,262 $ 21,440,888 $ 21,138,488 $ 20,124,937 $ 20,166,889 $ 22,198,262 $ 20,166,889

PERIOD END BALANCES:

Tangible shareholders' equity

Total shareholders' equity $ 2,822,477 $ 2,782,539 $ 2,732,687 $ 2,681,904 $ 2,685,017 $ 2,822,477 $ 2,685,017

Less: Goodwill 851,612 847,531 847,984 848,242 825,679 851,612 825,679

Other identifiable intangible assets 55,899 54,757 56,989 59,345 60,008 55,899 60,008

Total tangible shareholders' equity $ 1,914,966 $ 1,880,251 $ 1,827,714 $ 1,774,317 $ 1,799,330 $ 1,914,966 $ 1,799,330

Less: Preferred stock 166,993 166,993 166,993 166,993 167,021 166,993 167,021

Total tangible common shareholders' equity $ 1,747,973 $ 1,713,258 $ 1,660,721 $ 1,607,324 $ 1,632,309 $ 1,747,973 $ 1,632,309

AVERAGE BALANCES:

Tangible shareholders' equity

Total shareholders' equity $ 2,774,589 $ 2,729,870 $ 2,738,434 $ 2,658,699 $ 2,572,750 $ 2,725,545 $ 2,366,745

Less: Goodwill 852,472 847,744 848,160 844,635 823,812 848,263 754,426

Other identifiable intangible assets 54,858 56,045 58,280 58,805 60,559 56,988 54,787

Total tangible shareholders' equity $ 1,867,259 $ 1,826,081 $ 1,831,994 $ 1,755,259 $ 1,688,379 $ 1,820,294 $ 1,557,532

Less: Preferred stock 166,993 166,993 166,993 167,021 74,717 167,000 18,833

Total tangible common shareholders' equity $ 1,700,266 $ 1,659,088 $ 1,665,001 $ 1,588,238 $ 1,613,662 $ 1,653,294 $ 1,538,699

Total average assets $ 23,660,503 $ 23,318,877 $ 22,707,686 $ 21,189,637 $ 20,243,023 $ 22,723,386 $ 19,027,644

Total shares of common stock outstanding 102,561,480 102,558,459 102,566,301 102,632,484 104,522,804 102,561,480 104,522,804

Average shares outstanding-diluted 102,817,409 102,839,749 102,827,225 104,733,897 105,144,032 103,304,570 101,810,640

Tangible shareholders' equity to tangible assets (1) 8.26% 8.30% 8.18% 8.82% 8.92% 8.26% 8.92%

Tangible shareholders' equity to tangible assets-excluding PPP loans (2) 8.63% 8.77% 8.65% 8.82% 8.92% 8.63% 8.92%

Tangible common shareholders' equity to tangible assets (3) 7.54% 7.56% 7.44% 7.99% 8.09% 7.54% 8.09%

Tangible common shareholders' equity to tangible assets-excluding PPP loans (4) 7.87% 7.99% 7.86% 7.99% 8.09% 7.87% 8.09%

Return on average tangible equity (5) 14.66% 16.08% 13.43% 5.56% 15.47% 12.53% 15.04%

Return on average tangible common equity (6) 15.54% 17.13% 14.20% 5.54% 16.19% 13.22% 15.22%

Operating return on average tangible equity-excluding MSR (7) 15.58% 16.03% 13.89% 8.42% 15.94% 13.56% 16.40%

Operating return on average tangible common equity-excluding MSR (8) 16.56% 17.08% 14.71% 8.71% 16.68% 14.35% 16.60%

Operating return on average assets-excluding MSR (9) 1.23% 1.26% 1.12% 0.70% 1.33% 1.09% 1.34%

Operating return on average shareholders' equity-excluding MSR (10) 10.49% 10.72% 9.29% 5.56% 10.46% 9.05% 10.79%

Operating return on average common shareholders' equity-excluding MSR (11) 10.80% 11.05% 9.53% 5.55% 10.78% 9.27% 10.88%

Pre-tax pre-provision net revenue to total average assets (12) 1.57% 1.88% 1.81% 1.74% 1.68% 1.75% 1.73%

Tangible book value per common share (13) $ 17.04 $ 16.71 $ 16.19 $ 15.66 $ 15.62 $ 17.04 $ 15.62

Operating earnings per common share (14) $ 0.69 $ 0.70 $ 0.57 $ 0.25 $ 0.67 $ 2.20 $ 2.40

Operating earnings per common share-excluding MSR (15) $ 0.69 $ 0.69 $ 0.59 $ 0.33 $ 0.65 $ 2.30 $ 2.51

Tangible shareholders' equity to tangible assets is defined by the Company as(1) total shareholders' equity less goodwill and other identifiable intangible assets, divided by the difference of total assets less goodwill and other identifiable intangible assets.

Tangible shareholders' equity to tangible assets-excluding PPP loans is defined(2) by the Company as total shareholders' equity less goodwill and other identifiable intangible assets, divided by the difference of total assets less goodwill, other identifiable intangible assets, and PPP loans.

Tangible common shareholders' equity to tangible assets is defined by the(3) Company as total shareholders' equity less preferred stock, goodwill and other identifiable intangible assets, divided by the difference of total assets less goodwill and other identifiable intangible assets.

Tangible common shareholders' equity to tangible assets-excluding PPP loans is defined by the Company as total shareholders' equity less preferred stock,(4) goodwill and other identifiable intangible assets, divided by the difference of total assets less goodwill, other identifiable intangible assets, and PPP loans.

(5) Return on average tangible equity is defined by the Company as annualized net income divided by average tangible shareholders' equity.

Return on average tangible common equity is defined by the Company as(6) annualized net income available to common shareholders divided by average tangible common shareholders' equity.

Operating return on average tangible equity-excluding MSR is defined by the(7) Company as annualized net operating income-excluding MSR divided by average tangible shareholders' equity.

Operating return on average tangible common equity-excluding MSR is defined by(8) the Company as annualized net operating income available to common shareholders-excluding MSR divided by average tangible common shareholders' equity.

(9) Operating return on average assets-excluding MSR is defined by the Company as annualized net operating income-excluding MSR divided by total average assets.

Operating return on average shareholders' equity-excluding MSR is defined by(10) the Company as annualized net operating income-excluding MSR divided by average shareholders' equity.

Operating return on average common shareholders' equity-excluding MSR is(11) defined by the Company as annualized net operating income available to common shareholders-excluding MSR divided by average common shareholders' equity.

Pre-tax pre-provision net revenue to total average assets is defined by the(12) Company as annualized pre-tax pre-provision net revenue divided by total average assets adjusted for other non-operating items included in the definition and calculation of net operating income-excluding MSR.

Tangible book value per common share is defined by the Company as tangible(13) common shareholders' equity divided by total shares of common stock outstanding.

Operating earnings per common share is defined by the Company as net operating(14) income available to common shareholders divided by average common shares outstanding-diluted.

Operating earnings per common share-excluding MSR is defined by the Company as(15) net operating income available to common shareholders-excluding MSR divided by average common shares outstanding-diluted.

Efficiency Ratio (tax equivalent) and Operating Efficiency Ratio-excluding MSR(tax equivalent) Definitions

The efficiency ratio (tax equivalent) and the operating efficiencyratio-excluding MSR (tax equivalent) are supplemental financial measuresutilized in management's internal evaluation of the Company's use of resourcesand are not defined under GAAP. The efficiency ratio (tax equivalent) iscalculated by dividing total noninterest expense by total revenue, whichincludes net interest income plus noninterest income plus the tax equivalentadjustment. The operating efficiency ratio-excluding MSR (tax equivalent)excludes expense items otherwise disclosed as non-operating from totalnoninterest expense. In addition, the MSR valuation adjustment as well assecurities gains and losses are excluded from total revenue.

View original content: http://www.prnewswire.com/news-releases/bancorpsouth-announces-fourth-quarter-2020-and-annual-financial-results-301214402.html

SOURCE BancorpSouth Bank