PR Newswire | Jul 20, 2020 04:30PM EDT

07/20 15:30 CDT

BancorpSouth Announces Second Quarter 2020 Financial Results TUPELO, Miss., July 20, 2020

TUPELO, Miss., July 20, 2020 /PRNewswire/ -- BancorpSouth Bank (NYSE: BXS) (the "Company") today announced financial results for the quarter ended June 30, 2020.

Highlights for the second quarter of 2020 included:

* Achieved quarterly net income available to common shareholders of $58.8 million, or $0.57 per diluted common share, and net operating income available to common shareholders - excluding MSR - of $60.9 million, or $0.59 per diluted common share. * Recorded provision for credit losses of $20.0 million primarily as a result of the continued deterioration in certain economic factors included in the Company's allowance for credit losses methodology resulting from the coronavirus ("COVID-19") pandemic. * Generated $102.1 million in pre-tax pre-provision net revenue, or 1.81 percent of average assets on an annualized basis, which represents an increase from 1.73 percent for the second quarter of 2019 and an increase from 1.74 percent for the first quarter of 2020. * Originated and funded approximately 14,500 loans totaling approximately $1.2 billion under the U.S. Small Business Association ("SBA") Paycheck Protection Program (the "PPP"). * Generated total deposit growth of $2.3 billion for the quarter; excluding the estimated impact of additional customer liquidity associated with the PPP loans and government stimulus payments, deposit growth totaled approximately $1.0 billion, or 24 percent on an annualized basis. * Record mortgage production volume of $989.0 million contributed to mortgage production and servicing revenue of $31.9 million; earnings were negatively impacted by a pre-tax mortgage servicing rights ("MSR") valuation adjustment of $2.4 million. * Maintained strong regulatory capital metrics; estimated total risk-based capital of 13.79 percent at June 30, 2020 compared to 11.28 percent at June 30, 2019.

"We are very pleased with our second quarter financial results, particularly in light of the economic and industry headwinds associated with the continuation of the COVID-19 pandemic," remarked Dan Rollins, Chairman and Chief Executive Officer. "We had hoped to be taking steps toward a return to normal operations by now but COVID-19 case counts have continued to rise across our footprint. Protecting the health of both our teammates and customers has been, and will continue to be, our top priority. While we have not yet seen increases in charge-offs or significant deterioration in other credit quality metrics, we did record a provision for credit losses of $20.0 million as a result of the deterioration of certain economic data points within our reserve methodology compared to March 31, 2020. Outside of the additional provisioning, our Company continues to perform at a very high level. We generated $102.1 million in pre-tax pre-provision net revenue for the quarter, or 1.81 percent of average assets on an annualized basis."

"As we look more specifically at our second quarter performance, our efforts were largely focused on assisting our customers with the SBA's Paycheck Protection Program. A tremendous effort was required of all of our teammates to originate and fund approximately 14,500 loans totaling $1.2 billion in a very short period of time. The additional customer liquidity created as a result of the PPP and other government stimulus programs contributed to tremendous deposit growth this quarter. Excluding the estimated impact of these programs, deposit growth was very strong totaling approximately $1.0 billion, or 24 percent on an annualized basis. Finally, our mortgage operation had a record quarter. Production volume totaled almost $1 billion, which contributed to total production and servicing revenue of $31.9 million. While elevated refinance activity has certainly benefitted our mortgage production, new purchase money volume continues to hold strong."

Earnings Summary

The Company reported net income available to common shareholders of $58.8 million, or $0.57 per diluted common share, for the second quarter of 2020, compared with net income available to common shareholders of $53.1 million, or $0.53 per diluted common share, for the second quarter of 2019 and net income available to common shareholders of $21.9 million, or $0.21 per diluted common share, for the first quarter of 2020. The Company reported net operating income available to common shareholders - excluding MSR - of $60.9 million, or $0.59 per diluted common share, for the second quarter of 2020, compared with $62.0 million, or $0.61 per diluted common share, for the second quarter of 2019 and $34.4 million, or $0.33 per diluted common share, for the first quarter of 2020.

The Company reported pre-tax pre-provision net revenue of $102.1 million, or 1.81 percent of average assets on an annualized basis, compared to $80.6 million, or 1.73 percent of average assets on an annualized basis, for the second quarter of 2019 and $91.7 million, or 1.74 percent of average assets, for the first quarter of 2020.

Net Interest Revenue

Net interest revenue was $170.6 million for the second quarter of 2020, an increase of 6.6 percent from $160.0 million for the second quarter of 2019 and an increase of 1.8 percent from $167.5 million for the first quarter of 2020. The fully taxable equivalent net interest margin was 3.35 percent for the second quarter of 2020, compared with 3.87 percent for the second quarter of 2019 and 3.54 percent for the first quarter of 2020. Yields on net loans and leases were 4.59 percent for the second quarter of 2020, compared with 5.12 percent for the second quarter of 2019 and 5.00 percent for the first quarter of 2020, while yields on total interest earning assets were 3.87 percent for the second quarter of 2020, compared with 4.61 percent for the second quarter of 2019 and 4.27 percent for the first quarter of 2020. The net interest margin, excluding accretable yield, was 3.30 percent for the second quarter of 2020, compared with 3.79 percent for the second quarter of 2019 and 3.48 percent for the first quarter of 2020, while yields on net loans and leases, excluding accretable yield, were 4.53 percent for the second quarter of 2020, compared with 5.02 percent for the second quarter of 2019 and 4.93 percent for the first quarter of 2020.

The $1.2 billion in PPP loans that closed during the quarter had an adverse impact of approximately 14 basis points on the yield on net loans and leases, excluding accretable yield, and 5 basis points on the net interest margin, excluding accretable yield, for the second quarter of 2020. In addition, the earning asset mix shift resulting from the deposit growth above and beyond the PPP loan growth was responsible for approximately 10 basis points of margin decline compared to the first quarter. The average cost of deposits was 0.50 percent for the second quarter of 2020, compared with 0.68 percent for the second quarter of 2019 and 0.67 percent for the first quarter of 2020.

Balance Sheet Activity

Loans and leases, net of unearned income, increased $1.2 billion during the second quarter of 2020. Deposits increased $2.3 billion during the second quarter of 2020. There were no acquisitions during the second quarter of 2020. The loan growth for the quarter was primarily attributable to the closing of $1.2 billion in PPP loans. Otherwise, loans and leases were essentially flat on an organic basis for the quarter. The additional customer liquidity created by the PPP and other government stimulus programs, also aided in the deposit growth total for the quarter. Excluding the impact of these programs, organic deposit growth for the quarter totaled approximately $1.0 billion, or 24.0 percent on an annualized basis. The elevated deposit growth resulted in an increase of approximately $800 million in additional securities and lower yielding assets for the quarter.

Provision for Credit Losses and Allowance for Credit Losses

Earnings for the second quarter of 2020 reflect a provision for credit losses of $20.0 million, compared with a provision of $0.5 million for the second quarter of 2019 and a provision of $46.0 million for the first quarter of 2020. Net charge-offs for the second quarter of 2020 were $1.2 million, compared with net charge-offs of $1.3 million for the second quarter of 2019 and net charge-offs of $13.7 million for the first quarter of 2020. Net charge-offs for the second quarter of 2020 consisted primarily of acquired loans. Of the $13.7 million in net charge-offs for the first quarter of 2020, $12.7 million were acquired loans that were previously recorded as purchased credit impaired prior to the adoption of the Current Expected Credit Losses Methodology ("CECL") and were subsequently classified as purchased credit deteriorated loans. The allowance for credit losses was $237.0 million, or 1.54 percent of net loans and leases, at June 30, 2020, compared with $115.7 million, or 0.85 percent of net loans and leases, at June 30, 2019, and $218.2 million, or 1.53 percent of net loans and leases, at March 31, 2020. The allowance for credit losses coverage, excluding the impact of PPP loans, was 1.67 percent at June 30, 2020.

The Company implemented 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 $155.4 million, or 1.01 percent of net loans and leases, at June 30, 2020, compared with $96.0 million, or 0.70 percent of net loans and leases, at June 30, 2019, and $137.8 million, or 0.97 percent of net loans and leases, at March 31, 2020. Other real estate owned was $7.2 million at June 30, 2020, compared with $6.2 million at June 30, 2019 and $9.2 million at March 31, 2020.

Noninterest Revenue

Noninterest revenue was $91.3 million for the second quarter of 2020, compared with $66.3 million for the second quarter of 2019 and $76.5 million for the first quarter of 2020. These results include a negative MSR valuation adjustment of $2.4 million for the second quarter of 2020, compared with a negative MSR valuation adjustment of $8.8 million for the second quarter of 2019 and a negative MSR valuation adjustment of $11.1 million for the first 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 $31.9 million for the second quarter of 2020, compared with $9.2 million for the second quarter of 2019 and $20.6 million for the first quarter of 2020. Mortgage origination volume for the second quarter of 2020 was $989.0 million, compared with $495.5 million for the second quarter of 2019 and $477.1 million for the first quarter of 2020. Home purchase money volume was $522.6 million for the first quarter of 2020, compared with $285.3 million for the second quarter of 2019 and $397.9 million for the first quarter of 2020. Of the total mortgage origination volume for the second quarter of 2020, $251.7 million was portfolio loans, compared with $153.7 million for the second quarter of 2019 and $85.6 million for the first quarter of 2020.

Credit card, debit card, and merchant fee revenue was $9.1 million for the second quarter of 2020, compared with $10.2 million for the second quarter of 2019 and $9.2 million for the first quarter of 2020. Deposit service charge revenue, was $7.6 million for the second quarter of 2020, compared with $11.1 million for the second quarter of 2019 and $11.7 million for the first quarter of 2020. Credit card, debit card, and merchant fee revenue as well as deposit service charge revenue for the second quarter of 2020 were adversely impacted by the COVID-19 pandemic. Wealth management revenue was $6.4 million for the second quarter of 2020, compared with $5.9 million for the second quarter of 2019 and $6.6 million for the first quarter of 2020. Insurance commission revenue was $33.1 million for the second quarter of 2020, compared with $34.0 million for the second quarter of 2019 and $29.6 million for the first quarter of 2020. Other noninterest revenue was $5.4 million for the second quarter of 2020, compared with $4.8 million for the second quarter of 2019 and $10.1 million for the first quarter of 2020. Other noninterest revenue for the first quarter of 2020 included a $4.2 million gain associated with the sale of a book of business within the Company's insurance agency.

Noninterest Expense

Noninterest expense for the second quarter of 2020 was $162.5 million, compared with $157.7 million for the second quarter of 2019 and $168.0 million for the first quarter of 2020. Salaries and employee benefits expense was $108.1 million for the second quarter of 2020, compared with $101.0 million for the second quarter of 2019 and $108.3 million for the first quarter of 2020. Occupancy expense was $12.9 million for the second quarter of 2020, compared with $12.0 million for the second quarter of 2019 and $12.7 million for the first quarter of 2020. Other noninterest expense was $34.8 million for the second quarter of 2020, compared with $38.1 million for the second quarter of 2019 and $40.8 million for the first quarter of 2020. Additionally, merger-related expense for the second quarter of 2020 was $0.5 million, compared with merger-related expense of $3.1 million for the second quarter of 2019 and $4.5 million for the first quarter of 2020.

Capital Management

The Company's ratio of shareholders' equity to assets was 11.76 percent at June 30, 2020, compared with 12.29 percent at June 30, 2019 and 12.75 percent at March 31, 2020. The ratio of tangible common shareholders' equity to tangible assets was 7.44 percent at June 30, 2020, compared with 8.42 percent at June 30, 2019 and 7.99 percent at March 31, 2020. The $1.2 billion in PPP loans had an adverse impact of approximately 44 basis points on tangible common shareholders' equity to tangible assets at June 30, 2020.

In November 2019, the Company completed an underwritten public offering of $300.0 million aggregate principal amount of its 4.125 percent Fixed-to-Floating Rate Subordinated Notes due November 20, 2029 (the "Notes") and an underwritten public offering of $172.5 million of its 5.50 percent Series A Non-Cumulative Perpetual Preferred Stock, par value $0.01 per share (the "Series A Preferred Stock"). For additional details regarding the terms of the Notes, including those related to interest rates and interest payment dates, redemption, seniority, and maturity, and the terms of the Series A Preferred Stock, including those related to dividends and dividend payment dates, redemption, seniority, and maturity, please refer to the offering circulars related to each offering that the Company filed with the Federal Deposit Insurance Corporation ("FDIC") on November 15, 2019.

During the second quarter of 2020, the Company did not repurchase any shares of its common stock pursuant to its share repurchase program. As of June 30, 2020, the Company had 4,700,000 remaining shares available for repurchase under its current share repurchase authorization which expires on December 31, 2020.

Estimated regulatory capital ratios at June 30, 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 June 30, 2020, with Tier 1 risk-based capital of 11.22 percent and total risk-based capital of 13.79 percent, compared with required minimum levels of 8 percent and 10 percent, respectively, in order to qualify for "well capitalized" classification.

Summary

Rollins concluded, "As we move into the second half of the year, our management team will continue to prioritize the health and wellbeing of our teammates and customers while at the same time ensuring the resources are available to meet each and every customer need. Our relationship managers and credit administrators are working diligently to monitor the impact of the pandemic on our customers and on our loan portfolio. While we expect there will be challenges along the way, we remain optimistic about the strength and position of our Company and our ability to weather the resulting credit cycle. Despite elevated provision levels, our capital metrics have continued to improve, which better positions our Company for any potential stressed scenarios."

TRANSACTIONS

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. The purchase accounting for this transaction is considered provisional as management continues to identify and assess information regarding the nature of the acquired assets and liabilities and reviews the associated valuation assumptions and methodologies.

Van Alstyne Financial Corporation & Summit Financial Enterprises, Inc.

On September 1, 2019, the Company completed the mergers with Van Alstyne Financial Corporation and its wholly owned subsidiary, Texas Star Bank (collectively referred to as "Texas Star"), pursuant to which Texas Star was merged with and into the Company, and with Summit Financial Enterprises, Inc. and its wholly owned subsidiary, Summit Bank (collectively referred to as "Summit"), pursuant to which Summit was merged with and into the Company. Texas Star operated 7 full-service banking offices in Collin and Grayson counties in Texas, and one loan production office in Durant, Oklahoma, while Summit operated 4 offices located in Panama City, Panama City Beach, Fort Walton Beach, and Pensacola, Florida. As of September 1, 2019, Texas Star and Summit collectively reported total assets of $805.2 million, total loans of $610.2 million and total deposits of $794.2 million. Under the terms of the definitive merger agreements, the Company issued approximately 4,600,000 shares of the Company's common stock plus $48.2 million in cash for all outstanding shares of both institutions. For more information regarding these transactions, see our Current Report on Form 8-K that was filed with the FDIC on September 3, 2019. The purchase accounting for these transactions is considered provisional as management continues to identify and assess information regarding the nature of the acquired assets and liabilities and reviews the associated valuation assumptions and methodologies.

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 24 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 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 an SBA Preferred Lender, the Company is actively participating 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 second quarter 2020 financial results on July 21, 2020, 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 $23 billion in assets. BancorpSouth operates approximately 310 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, and are subject to the safe harbor created 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 "may," "should," "could," "predict," "potential," "believe," "will likely result," "expect," "continue," "will," "anticipate," "seek," "aspire," "roadmap," "achieve," "estimate," "intend," "plan," "project," "projection," "forecast," "goal," "target," "would," and "outlook," or the negative version of those words or other comparable words of a future or forward-looking nature. These forward-looking statements include, without limitation, those relating to the impact of the COVID-19 pandemic on the Company's assets, business, cash flows, financial condition, liquidity, prospects and results of operations, the opportunities to enhance market share in certain markets and market acceptance of the Company generally in new markets, the Company's ability to operate its regulatory compliance programs consistent with federal, state and local laws, including its Bank Secrecy Act ("BSA") and anti-money laundering ("AML") compliance program and its fair lending compliance program, the Company's ability to pay dividends or coupons on Series A Preferred Stock or the Notes or its ability to ultimately repay the Notes or otherwise comply with the terms of such instruments, amortization expense for intangible assets, goodwill impairments, loan impairments, utilization of appraisals and inspections for real estate loans, maturity, renewal or extension of construction, acquisition and development loans, net interest revenue and net interest margin, fair value determinations, the amount of the Company's non-performing loans and leases, credit quality, credit losses, liquidity, off-balance sheet commitments and arrangements, valuation of mortgage servicing rights, allowance and provision for credit losses, early identification and resolution of credit issues, utilization of non-GAAP financial measures, the ability of the Company to collect all amounts due according to the contractual terms of loan agreements, the Company's reserve for losses from representation and warranty obligations, the Company's foreclosure process related to mortgage loans, the resolution of non-performing loans that are collaterally dependent, real estate values, fully-indexed interest rates, interest rate risk, interest rate sensitivity, the impact of interest rates on loan yields, calculation of economic value of equity, impaired loan charge-offs, diversification of the Company's revenue stream, the growth of the Company's insurance business and commission revenue, the growth of the Company's customer base and loan, deposit and fee revenue sources, liquidity needs and strategies, the ability of the Company to access successfully the capital and credit markets when needed or as desired, sources of funding, declaration and payment of dividends, the utilization of the Company's share repurchase program, the implementation and execution of cost saving initiatives, improvement in the Company's efficiencies, operating expense trends, and the impact of certain claims and ongoing, pending or threatened litigation, administrative and investigatory matters.

These forward-looking statements are not historical facts, and are based upon current expectations, estimates and projections about the Company's industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain, involve risk and are beyond the Company's control. The inclusion of these forward-looking statements should not be regarded as a representation by the Company or any other person that such expectations, estimates and projections will be achieved. Accordingly, the Company cautions that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict and that are beyond the Company's control. These risks, assumptions and uncertainties may include, but are not limited to, the impact of the COVID-19 pandemic on the Company's assets, business, cash flows, financial condition, liquidity, prospects and results of operations, increases in the provision and allowance for credit losses and interest rate pressure on net interest revenue and net interest margin, the Company's ability to operate its regulatory compliance programs consistent with federal, state and local laws, including its BSA/AML compliance program and its fair lending compliance program, the lack of availability of the Company's filings mandated by the Exchange Act from the Securities and Exchange Commission's publicly available website after November 1, 2017, the impact of any ongoing pending or threatened litigation, administrative and investigatory matters involving the Company, conditions in the financial markets and economic conditions generally, the adequacy of the Company's provision and allowance for credit losses to cover actual credit losses, the credit risk associated with real estate construction, acquisition and development loans, limitations on the Company's ability to declare and pay dividends, the availability of capital on favorable terms if and when needed, liquidity risk, governmental regulation, including the Dodd-Frank Wall Street Reform, Consumer Protection Act, and the Coronavirus Aid, Relief and Economic Security Act established in response to the COVID-19 pandemic and any similar or related rules and regulations, and supervision of the Company's operations, the short-term and long-term impact of changes to banking capital standards on the Company's regulatory capital and liquidity, the impact of regulations on service charges on the Company's core deposit accounts, the susceptibility of the Company's business to local economic and environmental conditions, the soundness of other financial institutions, changes in interest rates, the impact of monetary policies and economic factors on the Company's ability to attract deposits or make loans, volatility in capital and credit markets, reputational risk, the impact of the loss of any key Company personnel, the impact of hurricanes or other adverse weather events, any requirement that the Company write down goodwill or other intangible assets, diversification in the types of financial services the Company offers, the growth of the Company's insurance business and commission revenue, the growth of the Company's loan, deposit and fee revenue sources, the Company's ability to adapt its products and services to evolving industry standards and consumer preferences, competition with other financial services companies, risks in connection with completed or potential acquisitions, dispositions and other strategic growth opportunities and initiatives, the Company's growth strategy, interruptions or breaches in the Company's information system security, the failure of certain third-party vendors to perform, unfavorable ratings by rating agencies, dilution caused by the Company's issuance of any additional shares of its capital stock to raise capital or acquire other banks, bank holding companies, financial holding companies and insurance agencies, the utilization of the Company's share repurchase program, the implementation and execution of cost saving initiatives, other factors generally understood to affect the assets, business, cash flows, financial condition, liquidity, prospects and/or results of operations of financial services companies, and other factors detailed from time to time in the Company's press and news releases, reports and other filings 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 the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date of this news release, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. If one or more events related to these or other risks or uncertainties materialize, or if the Company's underlying assumptions prove to be incorrect, actual results may differ materially from the Company's forward-looking statements. Accordingly, undue reliance should not be placed on any such forward-looking statements. Any forward-looking statement speaks only as of the date of this news release, and the Company does 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 law. New risks and uncertainties may emerge from time to time, and it is not possible for the Company to predict their occurrence or how they will affect the Company.

BancorpSouth Bank

Selected Financial Information

(Dollars in thousands, except per share data)

(Unaudited)

Quarter Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended Year to Date Year to Date

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

Earnings Summary:

Interest revenue $ 197,472 $ 202,064 $ 203,812 $ 199,004 $ 191,063 $ 399,536 $ 372,196

Interest expense 26,902 34,534 33,038 32,405 31,046 61,436 59,625

Net interest revenue 170,570 167,530 170,774 166,599 160,017 338,100 312,571

Provision for credit losses 20,000 46,000 - 500 500 66,000 1,000

Net interest revenue, after provision

for credit losses 150,570 121,530 170,774 166,099 159,517 272,100 311,571

Noninterest revenue 91,258 76,496 74,697 75,432 66,332 167,754 130,552

Noninterest expense 162,504 168,006 162,351 159,614 157,674 330,510 307,642

Income before income taxes 79,324 30,020 83,120 81,917 68,175 109,344 134,481

Income tax expense 18,164 5,759 17,271 18,160 15,118 23,923 29,826

Net income $ 61,160 $ 24,261 $ 65,849 $ 63,757 $ 53,057 $ 85,421 $ 104,655

Less: Preferred dividends 2,372 2,372 - - - 4,744 -

Net income available to common shareholders $ 58,788 $ 21,889 $ 65,849 $ 63,757 $ 53,057 $ 80,677 $ 104,655

Balance Sheet - Period End Balances

Total assets $ 23,236,176 $ 21,032,524 $ 21,052,576 $ 19,850,225 $ 18,936,814 $ 23,236,176 $ 18,936,814

Total earning assets 21,119,073 18,939,750 18,891,021 17,619,053 16,948,009 21,119,073 16,948,009

Total securities 4,973,171 4,468,340 4,481,974 2,766,446 2,760,732 4,973,171 2,760,732

Loans and leases, net of unearned income 15,427,421 14,224,645 14,089,683 14,120,783 13,658,527 15,427,421 13,658,527

Allowance for credit losses 237,025 218,199 119,066 116,908 115,691 237,025 115,691

Net book value of acquired loans (included in loans and leases above) 1,510,008 1,661,329 1,628,265 1,845,056 1,421,303 1,510,008 1,421,303

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

Remaining loan mark on acquired loans 19,977 22,286 46,240 53,137 38,408 19,977 38,408

Total deposits 19,179,486 16,887,916 16,410,699 16,025,756 15,136,648 19,179,486 15,136,648

Long-term debt 4,615 4,721 5,053 5,161 5,271 4,615 5,271

Junior subordinated debt securities 296,898 296,723 296,547 - - 296,898 -

Total shareholders' equity 2,732,687 2,681,904 2,685,017 2,489,427 2,327,120 2,732,687 2,327,120

Common shareholders' equity 2,565,694 2,514,911 2,517,996 2,489,427 2,327,120 2,565,694 2,327,120

Balance Sheet - Average Balances

Total assets $ 22,707,686 $ 21,189,637 $ 20,243,023 $ 19,170,926 $ 18,637,258 $ 21,948,661 $ 18,337,053

Total earning assets 20,594,889 19,113,449 18,125,676 17,148,574 16,693,115 19,854,169 16,426,158

Total securities 4,437,614 4,461,298 3,555,014 2,738,691 2,733,335 4,449,456 2,718,939

Loans and leases, net of unearned income 15,114,732 14,226,788 14,061,118 13,726,755 13,549,591 14,670,759 13,315,208

PPP loans (included in loans and leases above) 975,029 - - - - 487,515 -

Total deposits 18,454,472 16,905,229 16,218,715 15,509,511 15,080,885 17,679,851 14,765,114

Long-term debt 4,699 4,800 5,138 5,303 5,403 4,750 5,613

Junior subordinated debt securities 296,793 296,617 135,535 - - 296,705 -

Total shareholders' equity 2,738,434 2,658,699 2,572,750 2,378,882 2,298,512 2,698,567 2,255,866

Common shareholders' equity 2,571,441 2,491,678 2,498,033 2,378,882 2,298,512 2,531,560 2,255,866

Nonperforming Assets:

Non-accrual loans and leases $ 126,753 $ 110,074 $ 78,796 $ 76,383 $ 71,076 $ 126,753 $ 71,076

Loans and leases 90+ days past due, still accruing 9,877 7,272 17,531 16,659 8,053 9,877 8,053

Restructured loans and leases, still accruing 11,575 11,284 15,184 15,033 10,676 11,575 10,676

Non-performing loans (NPLs) 148,205 128,630 111,511 108,075 89,805 148,205 89,805

Other real estate owned 7,164 9,200 6,746 7,929 6,179 7,164 6,179

Non-performing assets (NPAs) $ 155,369 $ 137,830 $ 118,257 $ 116,004 $ 95,984 $ 155,369 $ 95,984

Financial Ratios and Other Data:

Return on average assets 1.08% 0.46% 1.29% 1.32% 1.14% 0.78% 1.15%

Operating return on average assets-excluding MSR* 1.12% 0.70% 1.33% 1.44% 1.33% 0.92% 1.30%

Return on average shareholders' equity 8.98% 3.67% 10.15% 10.63% 9.26% 6.37% 9.36%

Operating return on average shareholders' equity-excluding MSR* 9.29% 5.56% 10.46% 11.63% 10.82% 7.46% 10.54%

Return on average common shareholders' equity 9.19% 3.53% 10.46% 10.63% 9.26% 6.41% 9.36%

Operating return on average common shareholders' equity-excluding MSR* 9.53% 5.55% 10.78% 11.63% 10.82% 7.57% 10.54%

Return on average tangible equity* 13.43% 5.56% 15.47% 16.23% 14.06% 9.58% 14.16%

Operating return on average tangible equity-excluding MSR* 13.89% 8.42% 15.94% 17.75% 16.42% 11.22% 15.95%

Return on average tangible common equity* 14.20% 5.54% 16.19% 16.23% 14.06% 9.97% 14.16%

Operating return on average tangible common equity-excluding MSR* 14.71% 8.71% 16.68% 17.75% 16.42% 11.78% 15.95%

Pre-tax pre-provision net revenue to total average assets* 1.81% 1.74% 1.68% 1.87% 1.73% 1.78% 1.68%

Noninterest income to average assets 1.62% 1.45% 1.46% 1.56% 1.43% 1.54% 1.44%

Noninterest expense to average assets 2.88% 3.19% 3.18% 3.30% 3.39% 3.03% 3.38%

Net interest margin-fully taxable equivalent 3.35% 3.54% 3.76% 3.88% 3.87% 3.44% 3.86%

Net interest margin-fully taxable equivalent, excluding net accretion

on acquired loans and leases 3.30% 3.48% 3.61% 3.76% 3.79% 3.38% 3.77%

Net interest rate spread 3.08% 3.24% 3.44% 3.56% 3.56% 3.15% 3.56%

Efficiency ratio (tax equivalent)* 61.89% 68.65% 65.92% 65.68% 69.36% 65.15% 69.11%

Operating efficiency ratio-excluding MSR (tax equivalent)* 61.16% 63.89% 64.39% 63.01% 65.46% 62.50% 66.19%

Loan/deposit ratio 80.44% 84.23% 85.86% 88.11% 90.23% 80.44% 90.23%

Price to earnings multiple (close) 11.15 9.46 13.60 13.77 13.26 11.15 13.26

Market value to common book value 90.91% 77.21% 130.38% 124.62% 125.60% 90.91% 125.60%

Market value to common book value (avg) 84.79% 107.86% 128.18% 120.12% 125.47% 95.14% 126.90%

Market value to common tangible book value 140.44% 120.81% 201.13% 193.15% 191.45% 140.44% 191.45%

Market value to common tangible book value (avg) 130.99% 168.76% 197.74% 186.17% 191.25% 146.99% 193.43%

Employee FTE 4,792 4,737 4,693 4,674 4,581 4,792 4,581

*Denotes non-GAAP financial measure. Refer to related disclosure andreconciliation on pages 24 and 25.

Credit Quality Ratios:

Net charge-offs(recoveries) to average loans and leases (annualized) 0.03% 0.39% (0.06%) (0.02%) 0.04% 0.20% 0.08%

Provision for credit losses to average loans and leases (annualized) 0.53% 1.30% 0.00% 0.01% 0.01% 0.90% 0.02%

Allowance for credit losses to net loans and leases 1.54% 1.53% 0.85% 0.83% 0.85% 1.54% 0.85%

Allowance for credit losses to net loans and leases, excluding PPP loans 1.67% 1.53% 0.85% 0.83% 0.85% 1.67% 0.85%

Allowance for credit losses to non-performing loans and leases 159.93% 169.63% 106.78% 108.17% 128.83% 159.93% 128.83%

Allowance for credit losses to non-performing assets 152.56% 158.31% 100.68% 100.78% 120.53% 152.56% 120.53%

Non-performing loans and leases to net loans and leases 0.96% 0.90% 0.79% 0.77% 0.66% 0.96% 0.66%

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

acquired loans and leases 0.63% 0.64% 0.65% 0.66% 0.61% 0.63% 0.61%

Non-performing assets to net loans and leases 1.01% 0.97% 0.84% 0.82% 0.70% 1.01% 0.70%

Non-performing assets to net loans and leases, excluding

acquired loans and leases 0.68% 0.68% 0.68% 0.69% 0.63% 0.68% 0.63%

Equity Ratios:

Total shareholders' equity to total assets 11.76% 12.75% 12.75% 12.54% 12.29% 11.76% 12.29%

Total common shareholders' equity to total assets 11.04% 11.96% 11.96% 12.54% 12.29% 11.04% 12.29%

Tangible shareholders' equity to tangible assets* 8.18% 8.82% 8.92% 8.47% 8.42% 8.18% 8.42%

Tangible shareholders' equity to tangible assets-excluding PPP loans* 8.65% 8.82% 8.92% 8.47% 8.42% 8.65% 8.42%

Tangible common shareholders' equity to tangible assets* 7.44% 7.99% 8.09% 8.47% 8.42% 7.44% 8.42%

Tangible common shareholders' equity to tangible assets-excluding PPP loans* 7.86% 7.99% 8.09% 8.47% 8.42% 7.86% 8.42%

Capital Adequacy:

Common Equity Tier 1 capital 10.21% 10.11% 10.57% 10.54% 10.52% 10.21% 10.52%

Tier 1 capital 11.22% 11.13% 11.60% 10.54% 10.52% 11.22% 10.52%

Total capital 13.79% 13.75% 14.17% 11.28% 11.28% 13.79% 11.28%

Tier 1 leverage capital 8.54% 8.90% 9.69% 9.14% 8.96% 8.54% 8.96%

Estimated for current quarter

Common Share Data:

Basic earnings per share $ 0.57 $ 0.21 $ 0.63 $ 0.63 $ 0.53 0.78 $ 1.05

Diluted earnings per share 0.57 0.21 0.63 0.63 0.53 0.78 1.04

Operating earnings per share* 0.57 0.25 0.67 0.66 0.55 0.82 1.07

Operating earnings per share- excluding MSR* 0.59 0.33 0.65 0.69 0.61 0.92 1.18

Cash dividends per share 0.19 0.19 0.19 0.19 0.17 0.37 0.34

Book value per share 25.01 24.50 24.09 23.76 23.12 25.01 23.12

Tangible book value per share* 16.19 15.66 15.62 15.33 15.17 16.19 15.17

Market value per share (last) 22.74 18.92 31.41 29.61 29.04 22.74 29.04

Market value per share (high) 25.93 31.61 32.97 30.54 31.10 31.61 33.45

Market value per share (low) 17.21 17.24 28.13 26.47 26.92 17.21 25.76

Market value per share (avg) 21.21 26.43 30.88 28.54 29.01 23.80 29.34

Dividend payout ratio 32.29% 88.20% 29.43% 29.36% 32.24% 47.46% 32.51%

Total shares outstanding 102,566,301 102,632,484 104,522,804 104,775,876 100,651,798 102,566,301 100,651,798

Average shares outstanding - basic 102,603,525 104,354,328 104,739,906 101,168,730 100,610,746 103,478,927 100,058,849

Average shares outstanding - diluted 102,827,225 104,733,897 105,144,032 101,493,247 100,888,164 103,780,561 100,302,641

Yield/Rate:

(Taxable equivalent basis)

Loans, loans held for sale, and leases net of unearned income 4.59% 5.00% 5.13% 5.16% 5.12% 4.79% 5.11%

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

net accretion on acquired loans and leases 4.53% 4.93% 4.95% 5.02% 5.02% 4.72% 4.98%

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

net accretion on acquired loans and leases - excluding PPP loans 4.67% 4.93% 4.95% 5.02% 5.02% 4.80% 4.98%

PPP loans 2.50% N/A N/A N/A N/A 2.50% N/A

Available-for-sale securities:

Taxable 1.95% 1.99% 2.00% 2.13% 2.10% 1.97% 2.07%

Tax-exempt 3.86% 4.44% 4.69% 5.56% 4.53% 4.12% 4.58%

Short-term, FHLB and other equity investments 0.20% 1.53% 1.95% 2.41% 2.52% 0.55% 2.59%

Total interest earning assets and revenue 3.87% 4.27% 4.48% 4.63% 4.61% 4.06% 4.59%

Deposits 0.50% 0.67% 0.68% 0.71% 0.68% 0.58% 0.66%

Demand - interest bearing 0.61% 0.84% 0.88% 0.94% 0.91% 0.72% 0.88%

Savings 0.18% 0.26% 0.28% 0.28% 0.29% 0.22% 0.29%

Other time 1.54% 1.64% 1.68% 1.67% 1.60% 1.59% 1.53%

Short-term borrowings 0.39% 1.25% 1.51% 1.90% 2.14% 0.81% 2.15%

Total interest bearing deposits and short-term borrowings 0.71% 0.95% 1.01% 1.07% 1.06% 0.83% 1.03%

Junior subordinated debt 4.18% 4.42% 4.17% N/A N/A 4.42% N/A

Long-term debt 4.81% 4.96% 4.83% 4.93% 4.87% 4.89% 4.88%

Total interest bearing liabilities and expense 0.79% 1.03% 1.04% 1.07% 1.06% 0.91% 1.03%

Interest bearing liabilities to interest earning assets 66.65% 70.81% 69.37% 70.15% 70.47% 68.65% 70.80%

Net interest tax equivalent adjustment $ 725 $ 714 $ 800 $ 972 $ 974 $ 1,439 $ 2,009

*Denotes non-GAAP financial measure. Refer to related disclosure andreconciliation on pages 24 and 25.

BancorpSouth Bank

Consolidated Balance Sheets

(Unaudited)

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

(Dollars in thousands)

Assets

Cash and due from banks $ 240,354 $ 253,495 $ 261,773 $ 333,108 $ 212,080

Interest bearing deposits with other banks

and Federal funds sold 318,615 29,490 71,233 466,650 314,172

Available-for-sale securities, at fair value 4,973,171 4,468,340 4,481,974 2,766,446 2,760,732

Loans and leases* 15,444,794 14,241,912 14,107,743 14,137,563 13,674,990

Less: Unearned income 17,373 17,267 18,060 16,780 16,463

Allowance for credit losses 237,025 218,199 119,066 116,908 115,691

Net loans and leases 15,190,396 14,006,446 13,970,617 14,003,875 13,542,836

Loans held for sale 391,051 194,321 210,361 229,514 175,898

Premises and equipment, net 504,748 497,669 480,901 480,819 447,564

Accrued interest receivable 101,321 70,463 65,173 62,818 60,598

Goodwill 847,984 848,242 825,679 822,093 734,473

Other identifiable intangibles 56,989 59,345 60,008 61,100 65,930

Bank owned life insurance 329,167 327,312 326,417 328,670 315,398

Other real estate owned 7,164 9,200 6,746 7,929 6,179

Other assets 275,216 268,201 291,694 287,203 300,954

Total Assets $ 23,236,176 $ 21,032,524 $ 21,052,576 $ 19,850,225 $ 18,936,814

Liabilities

Deposits:

Demand: Noninterest bearing $ 6,385,370 $ 4,861,155 $ 4,661,821 $ 4,770,907 $ 4,329,172

Interest bearing 7,907,637 7,268,053 7,176,934 6,745,329 6,511,332

Savings 2,234,853 2,013,343 1,937,985 1,898,813 1,861,247

Other time 2,651,626 2,745,365 2,633,959 2,610,707 2,434,897

Total deposits 19,179,486 16,887,916 16,410,699 16,025,756 15,136,648

Securities sold under agreement to repurchase 670,016 538,962 513,422 529,788 439,541

Federal funds purchased

and other short-term borrowing 220 290,224 725,000 480,000 730,000

Accrued interest payable 13,476 17,482 15,124 13,120 12,225

Junior subordinated debt securities 296,898 296,723 296,547 - -

Long-term debt 4,615 4,721 5,053 5,161 5,271

Other liabilities 338,778 314,592 401,714 306,973 286,009

Total Liabilities 20,503,489 18,350,620 18,367,559 17,360,798 16,609,694

Shareholders' Equity

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

Common stock 256,416 256,581 261,307 261,940 251,629

Capital surplus 561,541 558,114 605,976 611,115 506,201

Accumulated other comprehensive income (loss) 25,191 17,849 (62,663) (50,538) (53,252)

Retained earnings 1,722,546 1,682,367 1,713,376 1,666,910 1,622,542

Total Shareholders' Equity 2,732,687 2,681,904 2,685,017 2,489,427 2,327,120

Total Liabilities & Shareholders' Equity $ 23,236,176 $ 21,032,524 $ 21,052,576 $ 19,850,225 $ 18,936,814

*Includes $1.193 billion in PPP loans at June 30, 2020.

BancorpSouth Bank

Consolidated Average Balance Sheets

(Unaudited)

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

(Dollars in thousands)

Assets

Cash and due from banks $ 229,334 $ 246,860 $ 244,444 $ 229,814 $ 202,564

Interest bearing deposits with other banks

and Federal funds sold 760,789 239,766 300,495 486,716 254,951

Available-for-sale securities, at fair value 4,437,614 4,461,298 3,555,014 2,738,691 2,733,335

Loans and leases* 15,132,600 14,244,649 14,078,793 13,743,876 13,565,632

Less: Unearned income 17,868 17,861 17,675 17,121 16,041

Allowance for credit losses 217,508 193,796 117,668 116,232 116,339

Net loans and leases 14,897,224 14,032,992 13,943,450 13,610,523 13,433,252

Loans held for sale 261,377 147,798 173,649 157,691 117,995

Premises and equipment, net 499,767 494,413 481,623 458,758 453,239

Accrued interest receivable 137,456 64,010 60,678 57,941 54,977

Goodwill 848,160 844,635 823,812 761,084 735,540

Other identifiable intangibles 58,280 58,805 60,559 59,253 49,058

Bank owned life insurance 328,037 326,808 328,567 319,894 313,550

Other real estate owned 8,410 8,151 7,820 6,908 7,313

Other assets 241,238 264,101 262,912 283,653 281,484

Total Assets $ 22,707,686 $ 21,189,637 $ 20,243,023 $ 19,170,926 $ 18,637,258

Liabilities

Deposits:

Demand: Noninterest bearing $ 5,942,570 $ 4,717,202 $ 4,803,104 $ 4,479,698 $ 4,307,570

Interest bearing 7,674,479 7,466,674 6,872,921 6,655,962 6,485,523

Savings 2,152,092 1,975,690 1,913,650 1,869,045 1,872,552

Other time 2,685,331 2,745,663 2,629,040 2,504,806 2,415,240

Total deposits 18,454,472 16,905,229 16,218,715 15,509,511 15,080,885

Securities sold under agreement to repurchase 644,127 541,707 530,217 507,558 484,950

Federal funds purchased

and other short-term borrowing 269,121 502,257 487,272 487,456 499,385

Accrued interest payable 16,268 19,205 14,942 13,756 12,239

Junior subordinated debt securities 296,793 296,617 135,535 - -

Long-term debt 4,699 4,800 5,138 5,303 5,403

Other liabilities 283,772 261,123 278,454 268,460 255,884

Total Liabilities 19,969,252 18,530,938 17,670,273 16,792,044 16,338,746

Shareholders' Equity

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

Common stock 256,515 261,065 261,905 254,881 252,351

Capital surplus 559,737 600,880 611,667 538,665 511,786

Accumulated other comprehensive income (loss) 23,016 (36,367) (53,111) (52,204) (66,048)

Retained earnings 1,732,173 1,666,100 1,677,572 1,637,540 1,600,423

Total Shareholders' Equity 2,738,434 2,658,699 2,572,750 2,378,882 2,298,512

Total Liabilities & Shareholders' Equity $ 22,707,686 $ 21,189,637 $ 20,243,023 $ 19,170,926 $ 18,637,258

*Includes $975.0 million in PPP loans for the quarter ended June 30, 2020.

BancorpSouth Bank

Consolidated Condensed Statements of Income

(Dollars in thousands, except per share data)

(Unaudited)

Quarter Ended Year to Date

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

INTEREST REVENUE:

Loans and leases $ 173,164 $ 177,019 $ 182,269 $ 178,729 $ 172,748 $ 350,183 $ 336,427

Deposits with other banks 207 739 1,225 2,456 1,292 946 2,808

Federal funds sold, securities purchased

under agreement to resell, FHLB and

other equity investments 178 315 426 735 542 493 916

Available-for-sale securities:

Taxable 20,783 21,508 17,241 13,759 13,223 42,291 25,660

Tax-exempt 1,178 1,060 1,266 1,883 1,890 2,238 4,011

Loans held for sale 1,962 1,423 1,385 1,442 1,368 3,385 2,374

Total interest revenue 197,472 202,064 203,812 199,004 191,063 399,536 372,196

INTEREST EXPENSE:

Interest bearing demand 11,631 15,522 15,202 15,689 14,741 27,153 27,880

Savings 943 1,290 1,334 1,341 1,348 2,233 2,686

Other time 10,296 11,168 11,134 10,546 9,635 21,464 17,700

Federal funds purchased and securities sold

under agreement to repurchase 291 1,436 1,591 1,857 1,972 1,727 3,747

Short-term and long-term debt 477 1,857 2,293 2,971 3,349 2,334 7,611

Junior subordinated debt 3,263 3,261 1,482 - - 6,524 -

Other 1 - 2 1 1 1 1

Total interest expense 26,902 34,534 33,038 32,405 31,046 61,436 59,625

Net interest revenue 170,570 167,530 170,774 166,599 160,017 338,100 312,571

Provision for credit losses 20,000 46,000 - 500 500 66,000 1,000

Net interest revenue, after provision for

credit losses 150,570 121,530 170,774 166,099 159,517 272,100 311,571

NONINTEREST REVENUE:

Mortgage banking 29,557 9,470 10,102 7,289 351 39,027 2,391

Credit card, debit card and merchant fees 9,080 9,176 9,836 9,778 10,168 18,256 19,042

Deposit service charges 7,647 11,682 12,193 11,939 11,117 19,329 21,883

Security gains(losses), net 62 (85) (41) 117 59 (23) 98

Insurance commissions 33,118 29,603 27,648 31,512 33,951 62,721 64,131

Wealth management 6,421 6,570 6,617 6,651 5,906 12,991 11,541

Other 5,373 10,080 8,342 8,146 4,780 15,453 11,466

Total noninterest revenue 91,258 76,496 74,697 75,432 66,332 167,754 130,552

NONINTEREST EXPENSE:

Salaries and employee benefits 108,103 108,272 97,137 101,154 100,981 216,375 198,209

Occupancy, net of rental income 12,890 12,708 12,267 12,323 11,988 25,598 23,539

Equipment 4,762 4,649 4,725 4,676 4,423 9,411 8,311

Deposit insurance assessments 1,962 1,546 2,200 2,038 2,165 3,508 4,905

Other 34,787 40,831 46,022 39,423 38,117 75,618 72,678

Total noninterest expense 162,504 168,006 162,351 159,614 157,674 330,510 307,642

Income before income taxes 79,324 30,020 83,120 81,917 68,175 109,344 134,481

Income tax expense 18,164 5,759 17,271 18,160 15,118 23,923 29,826

Net income $ 61,160 $ 24,261 $ 65,849 $ 63,757 $ 53,057 $ 85,421 $ 104,655

Less: Preferred dividends 2,372 2,372 - - - 4,744 -

Net income available to common shareholders $ 58,788 $ 21,889 $ 65,849 $ 63,757 $ 53,057 $ 80,677 $ 104,655

Net income per common share: Basic $ 0.57 $ 0.21 $ 0.63 $ 0.63 $ 0.53 $ 0.78 $ 1.05

Diluted $ 0.57 $ 0.21 $ 0.63 $ 0.63 $ 0.53 $ 0.78 $ 1.04

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

Quarter Ended

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

LOAN AND LEASE PORTFOLIO:

Commercial and industrial

Commercial and industrial-non real estate 3,038,957 2,008,043 1,979,507 1,887,817 1,832,016

Commercial and industrial-owner occupied 2,296,287 2,290,585 2,268,813 2,276,338 2,157,292

Total commercial and industrial 5,335,244 4,298,628 4,248,320 4,164,155 3,989,308

Commercial real estate

Agricultural 333,615 339,539 337,349 347,866 332,902

Construction, acquisition and development 1,658,678 1,582,039 1,577,342 1,538,073 1,441,269

Commercial real estate 3,323,744 3,303,537 3,220,914 3,345,166 3,287,453

Total commercial real estate 5,316,037 5,225,115 5,135,605 5,231,105 5,061,624

Consumer

Consumer mortgages 3,646,168 3,572,277 3,543,075 3,519,449 3,422,661

Home equity 655,543 686,202 683,515 678,294 670,352

Credit cards 86,592 93,896 102,559 101,213 101,024

Total consumer 4,388,303 4,352,375 4,329,149 4,298,956 4,194,037

All other 387,837 348,527 376,609 426,567 413,558

Total loans $ 15,427,421 $ 14,224,645 $ 14,089,683 $ 14,120,783 $ 13,658,527

ALLOWANCE FOR CREDIT LOSSES:

Balance, beginning of period $ 218,199 $ 119,066 $ 116,908 $ 115,691 $ 116,499

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 (1,506) (10,792) (1,273) (218) (866)

Commercial and industrial-owner occupied (13) (184) (192) (65) -

Total commercial and industrial (1,519) (10,976) (1,465) (283) (866)

Commercial real estate

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

Construction, acquisition and development (9) (3,173) (26) - (45)

Commercial real estate - (67) - (49) (250)

Total commercial real estate (30) (3,305) (37) (49) (295)

Consumer

Consumer mortgages (124) (524) (687) (255) (237)

Home equity (162) (236) (173) (39) (124)

Credit cards (703) (798) (797) (631) (922)

Total consumer (989) (1,558) (1,657) (925) (1,283)

All other (396) (914) (965) (895) (912)

Total loans charged-off (2,934) (16,753) (4,124) (2,152) (3,356)

Recoveries:

Commercial and industrial

Commercial and industrial-non real estate 277 355 353 835 747

Commercial and industrial-owner occupied 136 1,179 30 49 71

Total commercial and industrial 413 1,534 383 884 818

Commercial real estate

Agricultural 6 6 4 3 10

Construction, acquisition and development 172 245 584 480 63

Commercial real estate 50 135 4,212 29 218

Total commercial real estate 228 386 4,800 512 291

Consumer

Consumer mortgages 345 397 407 278 244

Home equity 259 80 216 731 179

Credit cards 195 285 218 224 223

Total consumer 799 762 841 1,233 646

All other 320 344 258 240 293

Total recoveries 1,760 3,026 6,282 2,869 2,048

Net (charge-offs)recoveries (1,174) (13,727) 2,158 717 (1,308)

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 20,000 45,000 - 500 500

Total provision 20,000 46,000 - 500 500

Balance, end of period $ 237,025 $ 218,199 $ 119,066 $ 116,908 $ 115,691

Average loans for period $ 15,114,732 $ 14,226,788 $ 14,061,118 $ 13,726,755 $ 13,549,591

Ratio:

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

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

Quarter Ended

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

BXS ORIGINATED LOANS AND LEASES:

Loans and leases charged off:

Commercial and industrial

Commercial and industrial-non real estate $ (420) $ (230) $ (844) $ (185) $ (773)

Commercial and industrial-owner occupied (13) (19) (184) (65) -

Total commercial and industrial (433) (249) (1,028) (250) (773)

Commercial Real estate

Agricultural - (65) (6) - -

Construction, acquisition and development - (121) (26) - (45)

Commercial real estate - (67) - (49) (250)

Total real estate - (253) (32) (49) (295)

Consumer

Consumer mortgages (113) (357) (648) (255) (237)

Home equity (162) (236) (173) (39) (124)

Credit cards (703) (798) (797) (631) (922)

Total consumer (978) (1,391) (1,618) (925) (1,283)

All other (288) (704) (782) (848) (832)

Total loans charged off (1,699) (2,597) (3,460) (2,072) (3,183)

Recoveries:

Commercial and industrial

Commercial and industrial-non real estate 210 325 277 833 720

Commercial and industrial-owner occupied 136 1,177 30 49 41

Total commercial and industrial 346 1,502 307 882 761

Commercial Real estate

Agricultural 5 4 4 3 10

Construction, acquisition and development 170 244 583 480 63

Commercial real estate 50 135 4,212 29 218

Total real estate 225 383 4,799 512 291

Consumer

Consumer mortgages 343 395 405 275 241

Home equity 258 79 215 729 177

Credit cards 195 285 218 224 223

Total consumer 796 759 838 1,228 641

All other 275 316 245 226 291

Total recoveries 1,642 2,960 6,189 2,848 1,984

Net (charge-offs)/recoveries $ (57) $ 363 $ 2,729 $ 776 $ (1,199)

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

Quarter Ended

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

ACQUIRED LOANS AND LEASES:

Loans and leases charged off:

Commercial and industrial

Commercial and industrial-non real estate $ (1,086) $ (10,562) $ (429) $ (33) $ (93)

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

Total commercial and industrial (1,086) (10,727) (437) (33) (93)

Commercial Real estate

Agricultural (21) - (5) - -

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

Commercial real estate - - - - -

Total real estate (30) (3,052) (5) - -

Consumer

Consumer mortgages (11) (167) (39) - -

Home equity - - - - -

Credit cards - - - - -

Total consumer (11) (167) (39) - -

All other (108) (210) (183) (47) (80)

Total loans charged off (1,235) (14,156) (664) (80) (173)

Recoveries:

Commercial and industrial

Commercial and industrial-non real estate 67 30 76 2 27

Commercial and industrial-owner occupied - 2 - - 30

Total commercial and industrial 67 32 76 2 57

Commercial Real estate

Agricultural 1 2 - - -

Construction, acquisition and development 2 1 1 - -

Commercial real estate - - - - -

Total real estate 3 3 1 - -

Consumer

Consumer mortgages 2 2 2 3 3

Home equity 1 1 1 2 2

Credit cards - - - - -

Total consumer 3 3 3 5 5

All other 45 28 13 14 2

Total recoveries 118 66 93 21 64

Net (charge-offs)/recoveries $ (1,117) $ (14,090) $ (571) $ (59) $ (109)

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

Quarter Ended

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

NON-PERFORMING ASSETS

NON-PERFORMING LOANS AND LEASES:

Nonaccrual Loans and Leases

Commercial and industrial

Commercial and industrial-non real estate $ 16,124 $ 16,589 $ 11,105 $ 10,430 $ 9,456

Commercial and industrial-owner occupied 16,745 11,212 7,838 7,446 8,648

Total commercial and industrial 32,869 27,801 18,943 17,876 18,104

Commercial real estate

Agricultural 5,244 5,454 4,772 4,423 6,115

Construction, acquisition and development 9,715 13,899 6,225 2,231 2,071

Commercial real estate 45,047 29,697 16,199 16,823 13,064

Total commercial real estate 60,006 49,050 27,196 23,477 21,250

Consumer

Consumer mortgages 30,672 29,834 28,879 31,744 28,779

Home equity 2,584 2,597 2,993 2,767 2,432

Credit cards 90 122 63 85 86

Total consumer 33,346 32,553 31,935 34,596 31,297

All other 532 670 722 434 425

Total nonaccrual loans and leases $ 126,753 $ 110,074 $ 78,796 $ 76,383 $ 71,076

Loans and Leases 90+ Days Past Due, Still Accruing: 9,877 7,272 17,531 16,659 8,053

Restructured Loans and Leases, Still Accruing 11,575 11,284 15,184 15,033 10,676

Total non-performing loans and leases $ 148,205 $ 128,630 $ 111,511 $ 108,075 $ 89,805

OTHER REAL ESTATE OWNED: 7,164 9,200 6,746 7,929 6,179

Total Non-performing Assets $ 155,369 $ 137,830 $ 118,257 $ 116,004 $ 95,984

BXS originated assets $ 94,155 $ 85,908 $ 78,295 $ 84,413 $ 76,816

Acquired assets 61,214 51,922 39,962 31,591 19,168

Total Non-performing Assets $ 155,369 $ 137,830 $ 118,257 $ 116,004 $ 95,984

Additions to Nonaccrual Loans and Leases During the Quarter $ 36,619 $ 47,523 $ 25,147 $ 26,331 $ 22,002

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

BXS originated loans $ 35,002 $ 54,315 $ 44,559 $ 40,668 $ 42,968

Acquired loans 10,450 14,405 23,054 16,741 14,042

Total Loans and Leases 30-89 days past due, still accruing $ 45,452 $ 68,720 $ 67,613 $ 57,409 $ 57,010

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

June 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 $ 2,980,373 $ - $ 43,368 $ 179 $ - $ 3,789 $ 11,248 $ 3,038,957

Commercial and industrial-owner occupied 2,222,454 - 61,204 - - 8,515 4,114 2,296,287

Total commercial and industrial 5,202,827 - 104,572 179 - 12,304 15,362 5,335,244

Commercial real estate

Agricultural 316,390 - 14,159 - - 714 2,352 333,615

Construction, acquisition and development 1,626,162 2,741 20,890 - - 3,122 5,763 1,658,678

Commercial real estate 3,164,522 - 113,206 - - 40,672 5,344 3,323,744

Total commercial real estate 5,107,074 2,741 148,255 - - 44,508 13,459 5,316,037

Consumer

Consumer mortgages 3,560,630 - 84,207 - - 594 737 3,646,168

Home equity 648,891 - 6,652 - - - - 655,543

Credit cards 86,592 - - - - - - 86,592

Total consumer 4,296,113 - 90,859 - - 594 737 4,388,303

All other 379,659 1,523 6,578 - - - 77 387,837

Total loans $ 14,985,673 $ 4,264 $ 350,264 $ 179 $ - $ 57,406 $ 29,635 $ 15,427,421

BXS originated loans $ 13,516,292 $ 2,741 $ 231,687 $ 179 $ - $ 28,288 $ - $ 13,779,187

Acquired loans* 1,469,381 1,523 118,577 - - 29,118 29,635 1,648,234

Total Loans $ 14,985,673 $ 4,264 $ 350,264 $ 179 $ - $ 57,406 $ 29,635 $ 15,427,421

March 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 $ 1,936,032 $ 3,424 $ 53,713 $ 191 $ 667 $ 1,769 $ 12,247 $ 2,008,043

Commercial and industrial-owner occupied 2,224,075 - 56,824 - - 5,568 4,118 2,290,585

Total commercial and industrial 4,160,107 3,424 110,537 191 667 7,337 16,365 4,298,628

Commercial real estate

Agricultural 324,412 - 12,006 - - 711 2,410 339,539

Construction, acquisition and development 1,551,667 2,045 14,739 - - 7,778 5,810 1,582,039

Commercial real estate 3,199,726 - 74,263 - - 24,205 5,343 3,303,537

Total commercial real estate 5,075,805 2,045 101,008 - - 32,694 13,563 5,225,115

Consumer

Consumer mortgages 3,476,631 - 94,324 - - 596 726 3,572,277

Home equity 679,135 - 7,067 - - - - 686,202

Credit cards 93,896 - - - - - - 93,896

Total consumer 4,249,662 - 101,391 - - 596 726 4,352,375

All other 336,028 1,660 10,761 - - - 78 348,527

Total loans $ 13,821,602 $ 7,129 $ 323,697 $ 191 $ 667 $ 40,627 $ 30,732 $ 14,224,645

BXS originated loans $ 12,150,616 $ 2,045 $ 225,506 $ 191 $ - $ 22,356 $ - $ 12,400,714

Acquired loans* 1,670,986 5,084 98,191 - 667 18,271 30,732 1,823,931

Total Loans $ 13,821,602 $ 7,129 $ 323,697 $ 191 $ 667 $ 40,627 $ 30,732 $ 14,224,645

*Includes certain loans that are no longer included in the "Net book value ofacquired loans" on page 10 as a result of maturity, refinance, or othertriggering event.

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

Quarter Ended

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

LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:

Pass $ 14,985,673 $ 13,821,602 $ 13,738,979 $ 13,782,584 $ 13,363,023

Special Mention 4,264 7,129 2,240 2,530 490

Substandard 350,264 323,697 298,491 280,059 244,585

Doubtful 179 191 194 194 218

Loss - 667 - - -

Impaired 57,406 40,627 24,094 24,948 24,048

Purchased Credit Deteriorated (Loss) 29,635 30,732 - - -

Purchased Credit Impaired - - 25,685 30,468 26,163

Total $ 15,427,421 $ 14,224,645 $ 14,089,683 $ 14,120,783 $ 13,658,527

BXS ORIGINATED LOAN PORTFOLIO BY INTERNALLY

ASSIGNED GRADE:

Pass $ 13,516,292 $ 12,150,616 $ 12,080,336 $ 11,901,311 $ 11,876,557

Special Mention 2,741 2,045 - - -

Substandard 231,687 225,506 202,017 192,133 181,045

Doubtful 179 191 194 194 218

Loss - - - - -

Impaired 28,288 22,356 17,110 24,379 22,821

Purchased Credit Deteriorated (Loss) - - - - -

Purchased Credit Impaired - - - - -

Total $ 13,779,187 $ 12,400,714 $ 12,299,657 $ 12,118,017 $ 12,080,641

ACQUIRED LOAN PORTFOLIO BY INTERNALLY

ASSIGNED GRADE:

Pass $ 1,469,381 $ 1,670,986 $ 1,658,643 $ 1,881,273 $ 1,486,466

Special Mention 1,523 5,084 2,240 2,530 490

Substandard 118,577 98,191 96,474 87,926 63,540

Doubtful - - - - -

Loss - 667 - - -

Impaired 29,118 18,271 6,984 569 1,227

Purchased Credit Deteriorated (Loss) 29,635 30,732 - - -

Purchased Credit Impaired - - 25,685 30,468 26,163

Total $ 1,648,234 $ 1,823,931 $ 1,790,026 $ 2,002,766 $ 1,577,886

BancorpSouth Bank

Geographical Information

(Dollars in thousands)

(Unaudited)

June 30, 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 $ 277,855 $ 232,865 $ 363,059 $ 813,505 $ 95,316 $ 191,870 $ 1,058,622 $ 5,865 $ 3,038,957

Commercial and industrial-owner occupied 270,088 187,072 256,107 639,818 64,171 135,193 743,838 - 2,296,287

Total commercial and industrial 547,943 419,937 619,166 1,453,323 159,487 327,063 1,802,460 5,865 5,335,244

Commercial real estate

Agricultural 26,828 71,146 26,722 66,207 7,190 11,125 123,797 600 333,615

Construction, acquisition and development 158,608 48,414 79,285 323,112 19,204 122,846 907,209 - 1,658,678

Commercial real estate 355,893 353,641 316,082 676,399 230,650 224,551 1,164,087 2,441 3,323,744

Total commercial real estate 541,329 473,201 422,089 1,065,718 257,044 358,522 2,195,093 3,041 5,316,037

Consumer

Consumer mortgages 583,468 345,831 342,423 843,050 105,036 322,052 1,031,117 73,191 3,646,168

Home equity 104,309 46,520 85,555 234,473 16,229 131,247 36,890 320 655,543

Credit cards - - - - - - - 86,592 86,592

Total consumer 687,777 392,351 427,978 1,077,523 121,265 453,299 1,068,007 160,103 4,388,303

All other 66,043 43,392 33,804 113,763 3,628 18,373 99,599 9,235 387,837

Total loans $ 1,843,092 $ 1,328,881 $ 1,503,037 $ 3,710,327 $ 541,424 $ 1,157,257 $ 5,165,159 $ 178,244 $ 15,427,421

Loan growth, excluding loans acquired during

the quarter (annualized) 28.32% 32.98% 34.25% 27.87% 24.31% 42.95% 40.77% 10.58% 34.01%

Loan growth, excluding PPP loans (annualized) (6.46%) 2.87% (10.34%) (1.16%) 3.26% (1.99%) 8.17% (45.62%) 0.28%

NON-PERFORMING LOANS AND LEASES:

Commercial and industrial

Commercial and industrial-non real estate $ 594 $ 1,569 $ 1,193 $ 1,787 $ 1,457 $ 433 $ 10,311 $ 201 $ 17,545

Commercial and industrial-owner occupied 3,278 2,444 622 3,375 163 94 12,661 - 22,637

Total commercial and industrial 3,872 4,013 1,815 5,162 1,620 527 22,972 201 40,182

Commercial real estate

Agricultural 410 727 223 251 - - 4,128 - 5,739

Construction, acquisition and development 203 182 2,404 161 - 462 6,579 - 9,991

Commercial real estate 3,320 33 5,347 1,214 - 95 38,164 - 48,173

Total commercial real estate 3,933 942 7,974 1,626 - 557 48,871 - 63,903

Consumer

Consumer mortgages 8,065 3,756 2,579 14,124 149 3,010 6,400 1,273 39,356

Home equity 243 259 390 997 188 965 100 - 3,142

Credit cards - - - - - - - 1,039 1,039

Total consumer 8,308 4,015 2,969 15,121 337 3,975 6,500 2,312 43,537

All other 204 3 2 108 - 16 247 3 583

Total loans $ 16,317 $ 8,973 $ 12,760 $ 22,017 $ 1,957 $ 5,075 $ 78,590 $ 2,516 $ 148,205

NON-PERFORMING LOANS AND LEASES

AS A PERCENTAGE OF OUTSTANDING:

Commercial and industrial

Commercial and industrial-non real estate 0.21% 0.67% 0.33% 0.22% 1.53% 0.23% 0.97% 3.43% 0.58%

Commercial and industrial-owner occupied 1.21% 1.31% 0.24% 0.53% 0.25% 0.07% 1.70% N/A 0.99%

Total commercial and industrial 0.71% 0.96% 0.29% 0.36% 1.02% 0.16% 1.27% 3.43% 0.75%

Commercial real estate

Agricultural 1.53% 1.02% 0.83% 0.38% 0.00% 0.00% 3.33% 0.00% 1.72%

Construction, acquisition and development 0.13% 0.38% 3.03% 0.05% 0.00% 0.38% 0.73% N/A 0.60%

Commercial real estate 0.93% 0.01% 1.69% 0.18% 0.00% 0.04% 3.28% 0.00% 1.45%

Total commercial real estate 0.73% 0.20% 1.89% 0.15% 0.00% 0.16% 2.23% 0.00% 1.20%

Consumer

Consumer mortgages 1.38% 1.09% 0.75% 1.68% 0.14% 0.93% 0.62% 1.74% 1.08%

Home equity 0.23% 0.56% 0.46% 0.43% 1.16% 0.74% 0.27% 0.00% 0.48%

Credit cards N/A N/A N/A N/A N/A N/A N/A 1.20% 1.20%

Total consumer 1.21% 1.02% 0.69% 1.40% 0.28% 0.88% 0.61% 1.44% 0.99%

All other 0.31% 0.01% 0.01% 0.09% 0.00% 0.09% 0.25% 0.03% 0.15%

Total loans 0.89% 0.68% 0.85% 0.59% 0.36% 0.44% 1.52% 1.41% 0.96%

BancorpSouth Bank

Noninterest Revenue and Expense

(Dollars in thousands)

(Unaudited)

Quarter Ended Year to Date

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

NONINTEREST REVENUE:

Mortgage banking excl. MSR and MSR Hedge market value adj $ 31,930 $ 20,553 $ 6,938 $ 11,283 $ 9,167 $ 52,483 $ 16,076

MSR and MSR Hedge market value adjustment (2,373) (11,083) 3,164 (3,994) (8,816) (13,456) (13,685)

Credit card, debit card and merchant fees 9,080 9,176 9,836 9,778 10,168 18,256 19,042

Deposit service charges 7,647 11,682 12,193 11,939 11,117 19,329 21,883

Securities gains (losses), net 62 (85) (41) 117 59 (23) 98

Insurance commissions 33,118 29,603 27,648 31,512 33,951 62,721 64,131

Trust income 4,064 4,013 3,951 4,488 3,815 8,077 7,603

Annuity fees 54 55 136 184 245 109 510

Brokerage commissions and fees 2,303 2,502 2,530 1,979 1,846 4,805 3,428

Bank-owned life insurance 1,855 1,999 3,427 2,529 1,854 3,854 3,676

Other miscellaneous income 3,518 8,081 4,915 5,617 2,926 11,599 7,790

Total noninterest revenue $ 91,258 $ 76,496 $ 74,697 $ 75,432 $ 66,332 $ 167,754 $ 130,552

NONINTEREST EXPENSE:

Salaries and employee benefits $ 108,103 $ 108,272 $ 97,137 $ 101,154 $ 100,981 $ 216,375 $ 198,209

Occupancy, net of rental income 12,890 12,708 12,267 12,323 11,988 25,598 23,539

Equipment 4,762 4,649 4,725 4,676 4,423 9,411 8,311

Deposit insurance assessments 1,962 1,546 2,200 2,038 2,165 3,508 4,905

Advertising 918 1,099 1,153 1,382 1,427 2,017 2,374

Foreclosed property expense 1,306 924 855 870 519 2,230 1,143

Telecommunications 1,512 1,461 1,504 1,400 1,419 2,973 2,759

Public relations 459 680 880 1,069 934 1,139 1,699

Data processing 9,693 9,646 10,041 9,066 7,968 19,339 16,410

Computer software 4,979 4,315 4,478 3,825 3,835 9,294 7,534

Amortization of intangibles 2,355 2,394 2,508 2,117 2,508 4,749 4,493

Legal 1,375 898 854 786 1,310 2,273 1,915

Merger expense 510 4,494 5,782 4,062 3,136 5,004 4,027

Postage and shipping 1,198 1,441 1,353 1,281 1,217 2,639 2,629

Other miscellaneous expense 10,482 13,479 16,614 13,565 13,844 23,961 27,695

Total noninterest expense $ 162,504 $ 168,006 $ 162,351 $ 159,614 $ 157,674 $ 330,510 $ 307,642

INSURANCE COMMISSIONS:

Property and casualty commissions $ 23,644 $ 21,246 $ 19,994 $ 22,643 $ 23,429 $ 44,890 $ 44,667

Life and health commissions 6,771 6,175 5,979 6,116 7,355 12,946 13,337

Risk management income 540 532 667 564 622 1,072 1,209

Other 2,163 1,650 1,008 2,189 2,545 3,813 4,918

Total insurance commissions $ 33,118 $ 29,603 $ 27,648 $ 31,512 $ 33,951 $ 62,721 $ 64,131

BancorpSouth Bank

Selected Additional Information

(Dollars in thousands)

(Unaudited)

Quarter Ended

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

MORTGAGE SERVICING RIGHTS:

Fair value, beginning of period $ 42,243 $ 57,109 $ 51,492 $ 55,294 $ 64,643

Additions to mortgage servicing rights:

Originations of servicing assets 4,297 3,079 4,025 3,410 2,790

Changes in fair value:

Due to payoffs/paydowns (3,144) (2,506) (2,323) (2,542) (2,739)

Due to change in valuation inputs or

assumptions used in the valuation model (2,575) (15,438) 3,915 (4,669) (9,399)

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

Fair value, end of period $ 40,821 $ 42,243 $ 57,109 $ 51,492 $ 55,294

MORTGAGE BANKING REVENUE:

Production revenue:

Origination $ 30,194 $ 17,906 $ 4,326 $ 8,922 $ 7,016

Servicing 4,880 5,153 4,935 4,903 4,890

Payoffs/Paydowns (3,144) (2,506) (2,323) (2,542) (2,739)

Total production revenue 31,930 20,553 6,938 11,283 9,167

Market value adjustment on MSR (2,575) (15,438) 3,915 (4,669) (9,399)

Market value adjustment on MSR Hedge 202 4,355 (751) 675 583

Total mortgage banking revenue $ 29,557 $ 9,470 $ 10,102 $ 7,289 $ 351

Mortgage loans serviced $ 7,000,425 $ 6,999,383 $ 6,898,195 $ 6,799,186 $ 6,749,416

MSR/mtg loans serviced 0.58% 0.60% 0.83% 0.76% 0.82%

AVAILABLE-FOR-SALE SECURITIES, at fair value

U.S. Government agencies $ 3,348,206 $ 3,532,905 $ 3,599,317 $ 2,323,159 $ 2,283,899

U.S. Government agency issued residential

mortgage-back securities 699,864 132,902 133,375 128,677 134,648

U.S. Government agency issued commercial

mortgage-back securities 759,980 595,885 609,009 115,228 94,878

Obligations of states and political subdivisions 163,121 206,648 140,273 199,382 247,307

Corporate bonds 2,000 - - - -

Total available-for-sale securities $ 4,973,171 $ 4,468,340 $ 4,481,974 $ 2,766,446 $ 2,760,732

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 to Date

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

Net income $ 61,160 $ 24,261 $ 65,849 $ 63,757 $ 53,057 $ 85,421 $ 104,655

Plus: Merger expense, net of tax 383 3,372 4,339 3,049 2,354 3,755 3,023

Initial provision for acquired loans,

net of tax - 751 - - - 751 -

Less: Security gains(losses), net of tax 47 (64) (30) 88 45 (17) 74

Net operating income $ 61,496 $ 28,448 $ 70,218 $ 66,718 $ 55,366 $ 89,944 $ 107,604

Less: Preferred dividends 2,372 2,372 - - - 4,744 -

Net operating income available to

common shareholders $ 59,124 $ 26,076 $ 70,218 $ 66,718 $ 55,366 $ 85,200 $ 107,604

Net operating income $ 61,496 $ 28,448 $ 70,218 $ 66,718 $ 55,366 $ 89,944 $ 107,604

Less: MSR market value adjustment, net of tax (1,781) (8,318) 2,374 (2,998) (6,616) (10,099) (10,270)

Net operating income-excluding MSR $ 63,277 $ 36,766 $ 67,844 $ 69,716 $ 61,982 $ 100,043 $ 117,874

Less: Preferred dividends 2,372 2,372 - - - 4,744 -

Net operating income available to common

shareholders-excluding MSR $ 60,905 $ 34,394 $ 67,844 $ 69,716 $ 61,982 $ 95,299 $ 117,874

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

Net income $ 61,160 $ 24,261 $ 65,849 $ 63,757 $ 53,057 $ 85,421 $ 104,655

Plus: Provision for credit losses 20,000 46,000 - 500 500 66,000 1,000

Merger expense 510 4,494 5,782 4,062 3,136 5,004 4,027

Income tax expense 18,164 5,759 17,271 18,160 15,118 23,923 29,826

Less: Security gains(losses) 62 (85) (41) 117 59 (23) 98

MSR market value adjustment (2,373) (11,083) 3,164 (3,994) (8,816) (13,456) (13,685)

Pre-tax pre-provision net revenue $ 102,145 $ 91,682 $ 85,779 $ 90,356 $ 80,568 $ 193,827 $ 153,095

Reconciliation of Total Operating Expense to Total Noninterest Expense:

Total noninterest expense $ 162,504 $ 168,006 $ 162,351 $ 159,614 $ 157,674 $ 330,510 $ 307,642

Less: Merger expense 510 4,494 5,782 4,062 3,136 5,004 4,027

Total operating expense $ 161,994 $ 163,512 $ 156,569 $ 155,552 $ 154,538 $ 325,506 $ 303,615

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 to Date

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

Tangible assets

Total assets $ 23,236,176 $ 21,032,524 $ 21,052,576 $ 19,850,225 $ 18,936,814 $ 23,236,176 $ 18,936,814

Less: Goodwill 847,984 848,242 825,679 822,093 734,473 847,984 734,473

Other identifiable intangible assets 56,989 59,345 60,008 61,100 65,930 56,989 65,930

Total tangible assets $ 22,331,203 $ 20,124,937 $ 20,166,889 $ 18,967,032 $ 18,136,411 $ 22,331,203 $ 18,136,411

Less: PPP loans 1,192,715 - - - - 1,192,715 -

Total tangible assets-excluding PPP loans $ 21,138,488 $ 20,124,937 $ 20,166,889 $ 18,967,032 $ 18,136,411 $ 21,138,488 $ 18,136,411

PERIOD END BALANCES:

Tangible shareholders' equity

Total shareholders' equity $ 2,732,687 $ 2,681,904 $ 2,685,017 $ 2,489,427 $ 2,327,120 $ 2,732,687 $ 2,327,120

Less: Goodwill 847,984 848,242 825,679 822,093 734,473 847,984 734,473

Other identifiable intangible assets 56,989 59,345 60,008 61,100 65,930 56,989 65,930

Total tangible shareholders' equity $ 1,827,714 $ 1,774,317 $ 1,799,330 $ 1,606,234 $ 1,526,717 $ 1,827,714 $ 1,526,717

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

Total tangible common shareholders' equity $ 1,660,721 $ 1,607,324 $ 1,632,309 $ 1,606,234 $ 1,526,717 $ 1,660,721 $ 1,526,717

AVERAGE BALANCES:

Tangible shareholders' equity

Total shareholders' equity $ 2,738,434 $ 2,658,699 $ 2,572,750 $ 2,378,882 $ 2,298,512 $ 2,698,567 $ 2,255,866

Less: Goodwill 848,160 844,635 823,812 761,084 735,540 846,398 715,773

Other identifiable intangible assets 58,280 58,805 60,559 59,253 49,058 58,542 49,583

Total tangible shareholders' equity $ 1,831,994 $ 1,755,259 $ 1,688,379 $ 1,558,545 $ 1,513,914 $ 1,793,627 $ 1,490,510

Less: Preferred stock 166,993 167,021 74,717 - - 167,007 -

Total tangible common shareholders' equity $ 1,665,001 $ 1,588,238 $ 1,613,662 $ 1,558,545 $ 1,513,914 $ 1,626,620 $ 1,490,510

Total average assets $ 22,707,686 $ 21,189,637 $ 20,243,023 $ 19,170,926 $ 18,637,258 $ 21,948,661 $ 18,337,053

Total shares of common stock outstanding 102,566,301 102,632,484 104,522,804 104,775,876 100,651,798 102,566,301 100,651,798

Average shares outstanding-diluted 102,827,225 104,733,897 105,144,032 101,493,247 100,888,164 103,780,561 100,302,641

Tangible shareholders' equity to tangible assets (1) 8.18% 8.82% 8.92% 8.47% 8.42% 8.18% 8.42%

Tangible shareholders' equity to tangible assets-excluding PPP loans (2) 8.65% 8.82% 8.92% 8.47% 8.42% 8.65% 8.42%

Tangible common shareholders' equity to tangible assets (3) 7.44% 7.99% 8.09% 8.47% 8.42% 7.44% 8.42%

Tangible common shareholders' equity to tangible assets-excluding PPP loans (4) 7.86% 7.99% 8.09% 8.47% 8.42% 7.86% 8.42%

Return on average tangible equity (5) 13.43% 5.56% 15.47% 16.23% 14.06% 9.58% 14.16%

Return on average tangible common equity (6) 14.20% 5.54% 16.19% 16.23% 14.06% 9.97% 14.16%

Operating return on average tangible equity-excluding MSR (7) 13.89% 8.42% 15.94% 17.75% 16.42% 11.22% 15.95%

Operating return on average tangible common equity-excluding MSR (8) 14.71% 8.71% 16.68% 17.75% 16.42% 11.78% 15.95%

Operating return on average assets-excluding MSR (9) 1.12% 0.70% 1.33% 1.44% 1.33% 0.92% 1.30%

Operating return on average shareholders' equity-excluding MSR (10) 9.29% 5.56% 10.46% 11.63% 10.82% 7.46% 10.54%

Operating return on average common shareholders' equity-excluding MSR (11) 9.53% 5.55% 10.78% 11.63% 10.82% 7.57% 10.54%

Pre-tax pre-provision net revenue to total average assets (12) 1.81% 1.74% 1.68% 1.87% 1.73% 1.78% 1.68%

Tangible book value per common share (13) $ 16.19 $ 15.66 $ 15.62 $ 15.33 $ 15.17 $ 16.19 $ 15.17

Operating earnings per common share (14) $ 0.57 $ 0.25 $ 0.67 $ 0.66 $ 0.55 $ 0.82 $ 1.07

Operating earnings per common share-excluding MSR (15) $ 0.59 $ 0.33 $ 0.65 $ 0.69 $ 0.61 $ 0.92 $ 1.18

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.

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SOURCE BancorpSouth Bank