PR Newswire | Oct 19, 2020 04:30PM EDT

10/19 15:30 CDT

BancorpSouth Announces Third Quarter 2020 Financial Results TUPELO, Miss., Oct. 19, 2020

TUPELO, Miss., Oct. 19, 2020 /PRNewswire/ -- BancorpSouth Bank (NYSE: BXS) (the "Company") today announced financial results for the quarter ended September 30, 2020.

Highlights for the third quarter of 2020 included:

* Achieved record quarterly net income available to common shareholders of $71.5 million, or $0.69 per diluted common share, and record net operating income available to common shareholders - excluding MSR - of $71.2 million, or $0.69 per diluted common share. * Recorded provision for credit losses of $15.0 million primarily as a result of the lengthening of the anticipated recovery time for certain economic factors included in the Company's allowance for credit losses methodology associated with the coronavirus ("COVID-19") pandemic; net charge-offs for the quarter totaled $1.4 million, or 0.04 percent of net loans and leases on an annualized basis. * Generated a record $110.0 million in pre-tax pre-provision net revenue, or 1.88 percent of average assets on an annualized basis, which represents an increase from 1.87 percent for the third quarter of 2019 and an increase from 1.81 percent for the second quarter of 2020. * Generated total deposit and customer repo growth of $174.9 million for the quarter, or 3.5 percent on an annualized basis. * Mortgage production volume of $937.7 million contributed to mortgage production and servicing revenue of $26.7 million. * Continued improvement in operating efficiency reflected in the decline in the operating efficiency ratio - excluding MSR - to 58.4 percent for the quarter. * Maintained strong regulatory capital metrics; estimated total risk-based capital of 14.20 percent at September 30, 2020 compared to 11.28 percent at September 30, 2019.

"We continue to report strong financial performance despite the lingering economic and operational impact of the COVID-19 pandemic," remarked Dan Rollins, Chairman and Chief Executive Officer. "While the economies across our footprint have generally re-opened and most businesses are performing well, there are certain industries, including hospitality, that are still feeling the impact of the pandemic. The economic forecasts that we utilize in our reserve methodology reflect a lengthening in the anticipated economic recovery time as compared to the forecasts at the end of the second quarter. Accordingly, we recorded a provision for credit losses of $15.0 million for the third quarter of 2020. Outside of this additional provisioning, we continue to be pleased with our operating performance. We generated a record $110.0 million in pre-tax pre-provision net revenue for the quarter, or 1.88 percent of average assets on an annualized basis."

"As we look more specifically at our third quarter performance, our mortgage team had another outstanding quarter generating production volume of over $937.7 million and total production and servicing revenue of $26.7 million. Although refinance activity remains elevated, purchase money production remains very strong, representing 61 percent of total volume for the quarter. Although loan demand has been slow following the completion of the Paycheck Protection Program ("PPP"), we had a solid quarter from a deposit growth standpoint as total deposits and customer repos increased $174.9 million, or 3.5 percent on an annualized basis, during the third quarter. While we saw a meaningful increase in net interest income, the shift in earning asset mix resulting from the additional liquidity continues to pressure our net interest margin. Finally, our operating efficiency continues to improve as reflected in the operating efficiency ratio - excluding MSR - of 58.4 percent for the third quarter. This marks the first time our efficiency ratio has been below 60 percent for a quarter since well before the last financial crisis."

Earnings Summary

The Company reported net income available to common shareholders of $71.5 million, or $0.69 per diluted common share, for the third quarter of 2020, compared with net income available to common shareholders of $63.8 million, or $0.63 per diluted common share, for the third quarter of 2019 and net income available to common shareholders of $58.8 million, or $0.57 per diluted common share, for the second quarter of 2020. The Company reported net operating income available to common shareholders - excluding MSR - of $71.2 million, or $0.69 per diluted common share, for the third quarter of 2020, compared with $69.7 million, or $0.69 per diluted common share, for the third quarter of 2019 and $60.9 million, or $0.59 per diluted common share, for the second quarter of 2020.

The Company reported pre-tax pre-provision net revenue of $110.0 million, or 1.88 percent of average assets on an annualized basis, compared to $90.4 million, or 1.87 percent of average assets on an annualized basis, for the third quarter of 2019 and $102.1 million, or 1.81 percent of average assets, for the second quarter of 2020.

Net Interest Revenue

Net interest revenue was $175.9 million for the third quarter of 2020, an increase of 5.6 percent from $166.6 million for the third quarter of 2019 and an increase of 3.1 percent from $170.6 million for the second quarter of 2020. The fully taxable equivalent net interest margin was 3.31 percent for the third quarter of 2020, compared with 3.88 percent for the third quarter of 2019 and 3.35 percent for the second quarter of 2020. Yields on net loans and leases were 4.54 percent for the third quarter of 2020, compared with 5.16 percent for the third quarter of 2019 and 4.59 percent for the second quarter of 2020, while yields on total interest earning assets were 3.77 percent for the third quarter of 2020, compared with 4.63 percent for the third quarter of 2019 and 3.87 percent for the second quarter of 2020. The net interest margin, excluding accretable yield, was 3.23 percent for the third quarter of 2020, compared with 3.76 percent for the third quarter of 2019 and 3.30 percent for the second quarter of 2020, while yields on net loans and leases, excluding accretable yield, were 4.44 percent for the third quarter of 2020, compared with 5.02 percent for the third quarter of 2019 and 4.53 percent for the second quarter of 2020.

The $1.2 billion in PPP loans on the balance sheet had an adverse impact of approximately 11 basis points on the yield on net loans and leases, excluding accretable yield, for the third quarter of 2020. The average cost of deposits was 0.44 percent for the third quarter of 2020, compared with 0.71 percent for the third quarter of 2019 and 0.50 percent for the second quarter of 2020.

Balance Sheet Activity

Loans and leases, net of unearned income, decreased $99.7 million during the third quarter of 2020. Deposits and customer repos increased $174.9 million during the third quarter of 2020. There were no acquisitions during the third quarter of 2020. Most of the loan origination volume occurred during the second quarter of 2020, with the PPP expiring during the third quarter of 2020. In total, the Company originated and funded just over 15,000 loans totaling in excess of $1.2 billion under the program. Over 5,000 of these loans were made to new customers of the Company.

Provision for Credit Losses and Allowance for Credit Losses

Earnings for the third quarter of 2020 reflect a provision for credit losses of $15.0 million, compared with a provision of $0.5 million for the third quarter of 2019 and a provision of $20.0 million for the second quarter of 2020. Net charge-offs for the third quarter of 2020 were $1.4 million, or 0.04 percent of net loans and leases on an annualized basis, compared with net recoveries of $0.7 million for the third quarter of 2019 and net charge-offs of $1.2 million for the second quarter of 2020. The allowance for credit losses was $250.6 million, or 1.64 percent of net loans and leases, at September 30, 2020, compared with $116.9 million, or 0.83 percent of net loans and leases, at September 30, 2019, and $237.0 million, or 1.54 percent of net loans and leases, at June 30, 2020. The allowance for credit losses coverage, excluding the impact of PPP loans, was 1.78 percent at September 30, 2020.

The Company adopted Accounting Standards Update 2016-13 "Financial Instruments - Credit Losses" 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 $157.3 million, or 1.03 percent of net loans and leases, at September 30, 2020, compared with $116.0 million, or 0.82 percent of net loans and leases, at September 30, 2019, and $155.4 million, or 1.01 percent of net loans and leases, at June 30, 2020. Other real estate owned was $6.4 million at September 30, 2020, compared with $7.9 million at September 30, 2019 and $7.2 million at June 30, 2020.

Noninterest Revenue

Noninterest revenue was $89.9 million for the third quarter of 2020, compared with $75.4 million for the third quarter of 2019 and $91.3 million for the second quarter of 2020. These results include a positive mortgage servicing rights ("MSR") valuation adjustment of $0.4 million for the third quarter of 2020, compared with a negative MSR valuation adjustment of $4.0 million for the third quarter of 2019 and a negative MSR valuation adjustment of $2.4 million for the second 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 $26.7 million for the third quarter of 2020, compared with $11.3 million for the third quarter of 2019 and $31.9 million for the second quarter of 2020. Mortgage origination volume for the third quarter of 2020 was $937.7 million, compared with $536.1 million for the third quarter of 2019 and $989.0 million for the second quarter of 2020. Home purchase money volume was $568.4 million for the third quarter of 2020, compared with $353.9 million for the third quarter of 2019 and $522.6 million for the second quarter of 2020. Of the total mortgage origination volume for the third quarter of 2020, $218.0 million was portfolio loans, compared with $112.1 million for the third quarter of 2019 and $251.7 million for the second quarter of 2020.

Credit card, debit card, and merchant fee revenue was $9.9 million for the third quarter of 2020, compared with $9.8 million for the third quarter of 2019 and $9.1 million for the second quarter of 2020. Deposit service charge revenue was $8.9 million for the third quarter of 2020, compared with $11.9 million for the third quarter of 2019 and $7.6 million for the second quarter of 2020. Wealth management revenue was $6.5 million for the third quarter of 2020, compared with $6.7 million for the third quarter of 2019 and $6.4 million for the second quarter of 2020. Insurance commission revenue was $32.8 million for the third quarter of 2020, compared with $31.5 million for the third quarter of 2019 and $33.1 million for the second quarter of 2020. Other noninterest revenue was $4.8 million for the third quarter of 2020, compared with $8.1 million for the third quarter of 2019 and $5.4 million for the second quarter of 2020.

Noninterest Expense

Noninterest expense for the third quarter of 2020 was $155.5 million, compared with $159.6 million for the third quarter of 2019 and $162.5 million for the second quarter of 2020. Salaries and employee benefits expense was $104.2 million for the third quarter of 2020, compared with $101.2 million for the third quarter of 2019 and $108.1 million for the second quarter of 2020. Occupancy expense was $13.1 million for the third quarter of 2020, compared with $12.3 million for the third quarter of 2019 and $12.9 million for the second quarter of 2020. Other noninterest expense was $32.2 million for the third quarter of 2020, compared with $39.4 million for the third quarter of 2019 and $34.8 million for the second quarter of 2020. Additionally, merger-related expense for the third quarter of 2020 was $0.1 million, compared with merger-related expense of $4.1 million for the third quarter of 2019 and $0.5 million for the second quarter of 2020.

Capital Management

The Company's ratio of shareholders' equity to assets was 11.81 percent at September 30, 2020, compared with 12.54 percent at September 30, 2019 and 11.76 percent at June 30, 2020. The ratio of tangible common shareholders' equity to tangible assets was 7.56 percent at September 30, 2020, compared with 8.47 percent at September 30, 2019 and 7.44 percent at June 30, 2020. The $1.2 billion in PPP loans had an adverse impact of approximately 43 basis points on tangible common shareholders' equity to tangible assets at September 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 third quarter of 2020, the Company did not repurchase any shares of its common stock pursuant to its share repurchase program. As of September 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 September 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 September 30, 2020, with Tier 1 risk-based capital of 11.65 percent and total risk-based capital of 14.20 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 look to the remainder of 2020 and into 2021, we will not be immune to the headwinds facing our industry and our nation's economy. While we expect our mortgage operation to continue to provide a significant component of our revenue, it's not reasonable to believe that production volume can remain at the level that we have seen thus far in 2020. In addition, it's inevitable there will be some customers experience financial hardships as the economic impact of this pandemic continues. Beyond continuing to ensure we protect the health of our teammates and customers, monitoring credit quality and working through issues with our customers will be our top priority. Given the changes in customer behavior as well as lessons learned through this pandemic, banks like ours will need to continue to automate processes and rethink the workplace while ensuring the customer experience is a top priority. As we work through our 2021 strategic planning and budgeting process, our team is working diligently to identify ways to improve our cost structure including continued investments in technology as well as an enhanced focus on optimizing our branch structure. I'm confident that the strength of both our balance sheet and capital position will aide us in navigating this economic cycle and continuing to improve shareholder value."

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.

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 a Small Business Administration ("SBA") Preferred Lender, the Company actively participated 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 third quarter 2020 financial results on October 20, 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 $24 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

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

Earnings Summary:

Interest revenue $ 200,670 $ 197,472 $ 202,064 $ 203,812 $ 199,004 $ 600,206 $ 571,200

Interest expense 24,739 26,902 34,534 33,038 32,405 86,175 92,030

Net interest revenue 175,931 170,570 167,530 170,774 166,599 514,031 479,170

Provision for credit losses 15,000 20,000 46,000 - 500 81,000 1,500

Net interest revenue, after provision

for credit losses 160,931 150,570 121,530 170,774 166,099 433,031 477,670

Noninterest revenue 89,924 91,258 76,496 74,697 75,432 257,678 205,984

Noninterest expense 155,505 162,504 168,006 162,351 159,614 486,015 467,256

Income before income taxes 95,350 79,324 30,020 83,120 81,917 204,694 216,398

Income tax expense 21,525 18,164 5,759 17,271 18,160 45,448 47,986

Net income $ 73,825 $ 61,160 $ 24,261 $ 65,849 $ 63,757 $ 159,246 $ 168,412

Less: Preferred dividends 2,372 2,372 2,372 - - 7,116 -

Net income available to common shareholders $ 71,453 $ 58,788 $ 21,889 $ 65,849 $ 63,757 $ 152,130 $ 168,412

Balance Sheet - Period End Balances

Total assets $ 23,555,422 $ 23,236,176 $ 21,032,524 $ 21,052,576 $ 19,850,225 $ 23,555,422 $ 19,850,225

Total earning assets 21,340,371 21,119,073 18,939,750 18,891,021 17,619,053 21,340,371 17,619,053

Total securities 5,659,785 4,973,171 4,468,340 4,481,974 2,766,446 5,659,785 2,766,446

Loans and leases, net of unearned income 15,327,735 15,427,421 14,224,645 14,089,683 14,120,783 15,327,735 14,120,783

Allowance for credit losses 250,624 237,025 218,199 119,066 116,908 250,624 116,908

Net book value of acquired loans (included in loans and leases above) 1,320,671 1,510,008 1,661,329 1,628,265 1,845,056 1,320,671 1,845,056

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

Remaining loan mark on acquired loans 16,198 19,977 22,286 46,240 53,137 16,198 53,137

Total deposits 19,412,979 19,179,486 16,887,916 16,410,699 16,025,756 19,412,979 16,025,756

Total deposits and securities sold under agreement to repurchase 20,024,434 19,849,502 17,426,878 16,924,121 16,555,544 20,024,434 16,555,544

Long-term debt 4,508 4,615 4,721 5,053 5,161 4,508 5,161

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

Total shareholders' equity 2,782,539 2,732,687 2,681,904 2,685,017 2,489,427 2,782,539 2,489,427

Common shareholders' equity 2,615,546 2,565,694 2,514,911 2,517,996 2,489,427 2,615,546 2,489,427

Balance Sheet - Average Balances

Total assets $ 23,318,877 $ 22,707,686 $ 21,189,637 $ 20,243,023 $ 19,170,926 $ 22,408,734 $ 18,618,066

Total earning assets 21,241,896 20,594,889 19,113,449 18,125,676 17,148,574 20,320,121 16,669,610

Total securities 5,309,982 4,437,614 4,461,298 3,555,014 2,738,691 4,738,392 2,725,595

Loans and leases, net of unearned income 15,369,684 15,114,732 14,226,788 14,061,118 13,726,755 14,905,435 13,453,898

PPP loans (included in loans and leases above) 1,207,097 975,029 - - - 729,126 -

Total deposits 19,258,930 18,454,472 16,905,229 16,218,715 15,509,511 18,210,053 15,015,973

Total deposits and securities sold under agreement to repurchase 19,940,330 19,098,599 17,446,936 16,748,932 16,017,069 18,832,679 15,499,616

Long-term debt 4,592 4,699 4,800 5,138 5,303 4,697 5,509

Junior subordinated debt securities 296,969 296,793 296,617 135,535 - 296,794 -

Total shareholders' equity 2,729,870 2,738,434 2,658,699 2,572,750 2,378,882 2,709,077 2,297,322

Common shareholders' equity 2,562,877 2,571,441 2,491,678 2,498,033 2,378,882 2,542,075 2,297,322

Nonperforming Assets:

Non-accrual loans and leases $ 122,108 $ 126,753 $ 110,074 $ 78,796 $ 76,383 $ 122,108 $ 76,383

Loans and leases 90+ days past due, still accruing 17,641 9,877 7,272 17,531 16,659 17,641 16,659

Restructured loans and leases, still accruing 11,154 11,575 11,284 15,184 15,033 11,154 15,033

Non-performing loans (NPLs) 150,903 148,205 128,630 111,511 108,075 150,903 108,075

Other real estate owned 6,397 7,164 9,200 6,746 7,929 6,397 7,929

Non-performing assets (NPAs) $ 157,300 $ 155,369 $ 137,830 $ 118,257 $ 116,004 $ 157,300 $ 116,004

Financial Ratios and Other Data:

Return on average assets 1.26% 1.08% 0.46% 1.29% 1.32% 0.95% 1.21%

Operating return on average assets-excluding MSR* 1.26% 1.12% 0.70% 1.33% 1.44% 1.03% 1.35%

Return on average shareholders' equity 10.76% 8.98% 3.67% 10.15% 10.63% 7.85% 9.80%

Operating return on average shareholders' equity-excluding MSR* 10.72% 9.29% 5.56% 10.46% 11.63% 8.56% 10.92%

Return on average common shareholders' equity 11.09% 9.19% 3.53% 10.46% 10.63% 7.99% 9.80%

Operating return on average common shareholders' equity-excluding MSR* 11.05% 9.53% 5.55% 10.78% 11.63% 8.75% 10.92%

Return on average tangible equity* 16.08% 13.43% 5.56% 15.47% 16.23% 11.79% 14.88%

Operating return on average tangible equity-excluding MSR* 16.03% 13.89% 8.42% 15.94% 17.75% 12.85% 16.57%

Return on average tangible common equity* 17.13% 14.20% 5.54% 16.19% 16.23% 12.41% 14.88%

Operating return on average tangible common equity-excluding MSR* 17.08% 14.71% 8.71% 16.68% 17.75% 13.58% 16.57%

Pre-tax pre-provision net revenue to total average assets* 1.88% 1.81% 1.74% 1.68% 1.87% 1.81% 1.75%

Noninterest income to average assets 1.53% 1.62% 1.45% 1.46% 1.56% 1.54% 1.48%

Noninterest expense to average assets 2.65% 2.88% 3.19% 3.18% 3.30% 2.90% 3.36%

Net interest margin-fully taxable equivalent 3.31% 3.35% 3.54% 3.76% 3.88% 3.39% 3.87%

Net interest margin-fully taxable equivalent, excluding net accretion

on acquired loans and leases 3.23% 3.30% 3.48% 3.61% 3.76% 3.33% 3.76%

Net interest rate spread 3.06% 3.08% 3.24% 3.44% 3.56% 3.12% 3.56%

Efficiency ratio (tax equivalent)* 58.36% 61.89% 68.65% 65.92% 65.68% 62.81% 67.90%

Operating efficiency ratio-excluding MSR (tax equivalent)* 58.41% 61.16% 63.89% 64.39% 63.01% 61.12% 65.07%

Loan/deposit ratio 78.96% 80.44% 84.23% 85.86% 88.11% 78.96% 88.11%

Price to earnings multiple (close) 9.18 11.15 9.46 13.60 13.77 9.18 13.77

Market value to common book value 75.99% 90.91% 77.21% 130.38% 124.62% 75.99% 124.62%

Market value to common book value (avg) 83.75% 84.79% 107.86% 128.18% 120.12% 90.07% 122.35%

Market value to common tangible book value 116.01% 140.44% 120.81% 201.13% 193.15% 116.01% 193.15%

Market value to common tangible book value (avg) 127.86% 130.99% 168.76% 197.74% 186.17% 137.50% 189.63%

Employee FTE 4,691 4,742 4,737 4,693 4,674 4,691 4,674

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

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

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

Credit Quality Ratios:

Net charge-offs(recoveries) to average loans and leases (annualized) 0.04% 0.03% 0.39% (0.06%) (0.02%) 0.15% 0.05%

Provision for credit losses to average loans and leases (annualized) 0.39% 0.53% 1.30% 0.00% 0.01% 0.73% 0.01%

Allowance for credit losses to net loans and leases 1.64% 1.54% 1.53% 0.85% 0.83% 1.64% 0.83%

Allowance for credit losses to net loans and leases, excluding PPP loans 1.78% 1.67% 1.53% 0.85% 0.83% 1.78% 0.83%

Allowance for credit losses to non-performing loans and leases 166.08% 159.93% 169.63% 106.78% 108.17% 166.08% 108.17%

Allowance for credit losses to non-performing assets 159.33% 152.56% 158.31% 100.68% 100.78% 159.33% 100.78%

Non-performing loans and leases to net loans and leases 0.98% 0.96% 0.90% 0.79% 0.77% 0.98% 0.77%

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

acquired loans and leases 0.74% 0.63% 0.64% 0.65% 0.66% 0.74% 0.66%

Non-performing assets to net loans and leases 1.03% 1.01% 0.97% 0.84% 0.82% 1.03% 0.82%

Non-performing assets to net loans and leases, excluding

acquired loans and leases 0.78% 0.68% 0.68% 0.68% 0.69% 0.78% 0.69%

Equity Ratios:

Total shareholders' equity to total assets 11.81% 11.76% 12.75% 12.75% 12.54% 11.81% 12.54%

Total common shareholders' equity to total assets 11.10% 11.04% 11.96% 11.96% 12.54% 11.10% 12.54%

Tangible shareholders' equity to tangible assets* 8.30% 8.18% 8.82% 8.92% 8.47% 8.30% 8.47%

Tangible shareholders' equity to tangible assets-excluding PPP loans* 8.77% 8.65% 8.82% 8.92% 8.47% 8.77% 8.47%

Tangible common shareholders' equity to tangible assets* 7.56% 7.44% 7.99% 8.09% 8.47% 7.56% 8.47%

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

Capital Adequacy:

Common Equity Tier 1 capital 10.64% 10.21% 10.11% 10.57% 10.54% 10.64% 10.54%

Tier 1 capital 11.65% 11.22% 11.13% 11.60% 10.54% 11.65% 10.54%

Total capital 14.20% 13.79% 13.75% 14.17% 11.28% 14.20% 11.28%

Tier 1 leverage capital 8.59% 8.54% 8.90% 9.69% 9.14% 8.59% 9.14%

Estimated for current quarter

Common Share Data:

Basic earnings per share $ 0.70 $ 0.57 $ 0.21 $ 0.63 $ 0.63 1.47 $ 1.68

Diluted earnings per share 0.69 0.57 0.21 0.63 0.63 1.47 1.67

Operating earnings per share* 0.70 0.57 0.25 0.67 0.66 1.51 1.73

Operating earnings per share- excluding MSR* 0.69 0.59 0.33 0.65 0.69 1.61 1.86

Cash dividends per share 0.19 0.19 0.19 0.19 0.19 0.56 0.53

Book value per share 25.50 25.01 24.50 24.09 23.76 25.50 23.76

Tangible book value per share* 16.71 16.19 15.66 15.62 15.33 16.71 15.33

Market value per share (last) 19.38 22.74 18.92 31.41 29.61 19.38 29.61

Market value per share (high) 24.29 25.93 31.61 32.97 30.54 31.61 33.45

Market value per share (low) 18.11 17.21 17.24 28.13 26.47 17.21 25.76

Market value per share (avg) 21.36 21.21 26.43 30.88 28.54 22.97 29.07

Dividend payout ratio 26.56% 32.29% 88.20% 29.43% 29.36% 37.64% 31.31%

Total shares outstanding 102,558,459 102,566,301 102,632,484 104,522,804 104,775,876 102,558,459 104,775,876

Average shares outstanding - basic 102,564,466 102,603,525 104,354,328 104,739,906 101,168,730 103,174,106 100,428,809

Average shares outstanding - diluted 102,839,749 102,827,225 104,733,897 105,144,032 101,493,247 103,466,957 100,699,510

Yield/Rate:

(Taxable equivalent basis)

Loans, loans held for sale, and leases net of unearned income 4.54% 4.59% 5.00% 5.13% 5.16% 4.70% 5.13%

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

net accretion on acquired loans and leases 4.44% 4.53% 4.93% 4.95% 5.02% 4.62% 4.99%

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

net accretion on acquired loans and leases - excluding PPP loans 4.55% 4.67% 4.93% 4.95% 5.02% 4.72% 4.99%

PPP loans 3.11% 2.50% N/A N/A N/A 2.84% N/A

Available-for-sale securities:

Taxable 1.64% 1.95% 1.99% 2.00% 2.13% 1.85% 2.09%

Tax-exempt 3.67% 3.86% 4.44% 4.69% 5.56% 3.97% 4.85%

Short-term, FHLB and other equity investments 0.19% 0.20% 1.53% 1.95% 2.41% 0.47% 2.50%

Total interest earning assets and revenue 3.77% 3.87% 4.27% 4.48% 4.63% 3.96% 4.61%

Deposits 0.44% 0.50% 0.67% 0.68% 0.71% 0.53% 0.68%

Demand - interest bearing 0.53% 0.61% 0.84% 0.88% 0.94% 0.66% 0.90%

Savings 0.18% 0.18% 0.26% 0.28% 0.28% 0.20% 0.29%

Other time 1.41% 1.54% 1.64% 1.68% 1.67% 1.53% 1.58%

Total interest bearing deposits 0.65% 0.74% 0.92% 0.96% 0.99% 0.77% 0.95%

Short-term borrowings 0.25% 0.39% 1.25% 1.51% 1.90% 0.63% 2.07%

Total interest bearing deposits and short-term borrowings 0.63% 0.71% 0.95% 1.01% 1.07% 0.76% 1.04%

Junior subordinated debt 4.24% 4.18% 4.42% 4.17% N/A 4.44% N/A

Long-term debt 4.85% 4.81% 4.96% 4.83% 4.93% 4.87% 4.89%

Total interest bearing liabilities and expense 0.71% 0.79% 1.03% 1.04% 1.07% 0.84% 1.05%

Interest bearing liabilities to interest earning assets 65.61% 66.65% 70.81% 69.37% 70.15% 67.58% 70.58%

Net interest tax equivalent adjustment $ 618 $ 725 $ 714 $ 800 $ 972 $ 2,057 $ 2,982

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

BancorpSouth Bank

Consolidated Balance Sheets

(Unaudited)

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

(Dollars in thousands)

Assets

Cash and due from banks $ 306,164 $ 240,354 $ 253,495 $ 261,773 $ 333,108

Interest bearing deposits with other banks

and Federal funds sold 39,782 318,615 29,490 71,233 466,650

Available-for-sale securities, at fair value 5,659,785 4,973,171 4,468,340 4,481,974 2,766,446

Loans and leases* 15,344,006 15,444,794 14,241,912 14,107,743 14,137,563

Less: Unearned income 16,271 17,373 17,267 18,060 16,780

Allowance for credit losses 250,624 237,025 218,199 119,066 116,908

Net loans and leases 15,077,111 15,190,396 14,006,446 13,970,617 14,003,875

Loans held for sale 304,215 391,051 194,321 210,361 229,514

Premises and equipment, net 508,149 504,748 497,669 480,901 480,819

Accrued interest receivable 110,185 101,321 70,463 65,173 62,818

Goodwill 847,531 847,984 848,242 825,679 822,093

Other identifiable intangibles 54,757 56,989 59,345 60,008 61,100

Bank owned life insurance 331,799 329,167 327,312 326,417 328,670

Other real estate owned 6,397 7,164 9,200 6,746 7,929

Other assets 309,547 275,216 268,201 291,694 287,203

Total Assets $ 23,555,422 $ 23,236,176 $ 21,032,524 $ 21,052,576 $ 19,850,225

Liabilities

Deposits:

Demand: Noninterest bearing $ 6,336,792 $ 6,385,370 $ 4,861,155 $ 4,661,821 $ 4,770,907

Interest bearing 8,170,402 7,907,637 7,268,053 7,176,934 6,745,329

Savings 2,325,980 2,234,853 2,013,343 1,937,985 1,898,813

Other time 2,579,805 2,651,626 2,745,365 2,633,959 2,610,707

Total deposits 19,412,979 19,179,486 16,887,916 16,410,699 16,025,756

Securities sold under agreement to repurchase 611,455 670,016 538,962 513,422 529,788

Federal funds purchased

and other short-term borrowing 95,217 220 290,224 725,000 480,000

Accrued interest payable 15,286 13,476 17,482 15,124 13,120

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

Long-term debt 4,508 4,615 4,721 5,053 5,161

Other liabilities 336,364 338,778 314,592 401,714 306,973

Total Liabilities 20,772,883 20,503,489 18,350,620 18,367,559 17,360,798

Shareholders' Equity

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

Common stock 256,396 256,416 256,581 261,307 261,940

Capital surplus 565,635 561,541 558,114 605,976 611,115

Accumulated other comprehensive income (loss) 18,490 25,191 17,849 (62,663) (50,538)

Retained earnings 1,775,025 1,722,546 1,682,367 1,713,376 1,666,910

Total Shareholders' Equity 2,782,539 2,732,687 2,681,904 2,685,017 2,489,427

Total Liabilities & Shareholders' Equity $ 23,555,422 $ 23,236,176 $ 21,032,524 $ 21,052,576 $ 19,850,225

*Includes $1.212 billion and $1.193 billion in PPP loans at September 30, 2020and June 30, 2020.

BancorpSouth Bank

Consolidated Average Balance Sheets

(Unaudited)

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

(Dollars in thousands)

Assets

Cash and due from banks $ 232,421 $ 229,334 $ 246,860 $ 244,444 $ 229,814

Interest bearing deposits with other banks

and Federal funds sold 257,057 760,789 239,766 300,495 486,716

Available-for-sale securities, at fair value 5,309,982 4,437,614 4,461,298 3,555,014 2,738,691

Loans and leases* 15,386,721 15,132,600 14,244,649 14,078,793 13,743,876

Less: Unearned income 17,037 17,868 17,861 17,675 17,121

Allowance for credit losses 236,536 217,508 193,796 117,668 116,232

Net loans and leases 15,133,148 14,897,224 14,032,992 13,943,450 13,610,523

Loans held for sale 296,352 261,377 147,798 173,649 157,691

Premises and equipment, net 507,190 499,767 494,413 481,623 458,758

Accrued interest receivable 104,435 137,456 64,010 60,678 57,941

Goodwill 847,744 848,160 844,635 823,812 761,084

Other identifiable intangibles 56,045 58,280 58,805 60,559 59,253

Bank owned life insurance 330,642 328,037 326,808 328,567 319,894

Other real estate owned 7,754 8,410 8,151 7,820 6,908

Other assets 236,107 241,238 264,101 262,912 283,653

Total Assets $ 23,318,877 $ 22,707,686 $ 21,189,637 $ 20,243,023 $ 19,170,926

Liabilities

Deposits:

Demand: Noninterest bearing $ 6,340,942 $ 5,942,570 $ 4,717,202 $ 4,803,104 $ 4,479,698

Interest bearing 8,022,755 7,674,479 7,466,674 6,872,921 6,655,962

Savings 2,280,860 2,152,092 1,975,690 1,913,650 1,869,045

Other time 2,614,373 2,685,331 2,745,663 2,629,040 2,504,806

Total deposits 19,258,930 18,454,472 16,905,229 16,218,715 15,509,511

Securities sold under agreement to repurchase 681,400 644,127 541,707 530,217 507,558

Federal funds purchased

and other short-term borrowing 36,696 269,121 502,257 487,272 487,456

Accrued interest payable 15,589 16,268 19,205 14,942 13,756

Junior subordinated debt securities 296,969 296,793 296,617 135,535 -

Long-term debt 4,592 4,699 4,800 5,138 5,303

Other liabilities 294,831 283,772 261,123 278,454 268,460

Total Liabilities 20,589,007 19,969,252 18,530,938 17,670,273 16,792,044

Shareholders' Equity

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

Common stock 256,412 256,515 261,065 261,905 254,881

Capital surplus 563,267 559,737 600,880 611,667 538,665

Accumulated other comprehensive income (loss) 24,758 23,016 (36,367) (53,111) (52,204)

Retained earnings 1,718,440 1,732,173 1,666,100 1,677,572 1,637,540

Total Shareholders' Equity 2,729,870 2,738,434 2,658,699 2,572,750 2,378,882

Total Liabilities & Shareholders' Equity $ 23,318,877 $ 22,707,686 $ 21,189,637 $ 20,243,023 $ 19,170,926

*Includes $1.207 billion and $975.0 million in PPP loans for the quarter endedSeptember 30, 2020 and June 30, 2020.

BancorpSouth Bank

Consolidated Condensed Statements of Income

(Dollars in thousands, except per share data)

(Unaudited)

Quarter Ended Year to Date

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

INTEREST REVENUE:

Loans and leases $ 175,810 $ 173,164 $ 177,019 $ 182,269 $ 178,729 $ 525,993 $ 515,156

Deposits with other banks 74 207 739 1,225 2,456 1,020 5,264

Federal funds sold, securities purchased

under agreement to resell, FHLB and

other equity investments 52 178 315 426 735 545 1,651

Available-for-sale securities:

Taxable 21,280 20,783 21,508 17,241 13,759 63,571 39,419

Tax-exempt 986 1,178 1,060 1,266 1,883 3,224 5,894

Loans held for sale 2,468 1,962 1,423 1,385 1,442 5,853 3,816

Total interest revenue 200,670 197,472 202,064 203,812 199,004 600,206 571,200

INTEREST EXPENSE:

Interest bearing demand 10,773 11,631 15,522 15,202 15,689 37,926 43,569

Savings 1,012 943 1,290 1,334 1,341 3,245 4,027

Other time 9,287 10,296 11,168 11,134 10,546 30,751 28,246

Federal funds purchased and securities sold

under agreement to repurchase 279 291 1,436 1,591 1,857 2,006 5,604

Short-term and long-term debt 49 477 1,857 2,293 2,971 2,383 10,582

Junior subordinated debt 3,338 3,263 3,261 1,482 - 9,862 -

Other 1 1 - 2 1 2 2

Total interest expense 24,739 26,902 34,534 33,038 32,405 86,175 92,030

Net interest revenue 175,931 170,570 167,530 170,774 166,599 514,031 479,170

Provision for credit losses 15,000 20,000 46,000 - 500 81,000 1,500

Net interest revenue, after provision for

credit losses 160,931 150,570 121,530 170,774 166,099 433,031 477,670

NONINTEREST REVENUE:

Mortgage banking 27,097 29,557 9,470 10,102 7,289 66,124 9,680

Credit card, debit card and merchant fees 9,938 9,080 9,176 9,836 9,778 28,194 28,820

Deposit service charges 8,892 7,647 11,682 12,193 11,939 28,221 33,822

Security gains(losses), net 18 62 (85) (41) 117 (5) 215

Insurance commissions 32,750 33,118 29,603 27,648 31,512 95,471 95,643

Wealth management 6,471 6,421 6,570 6,617 6,651 19,462 18,192

Other 4,758 5,373 10,080 8,342 8,146 20,211 19,612

Total noninterest revenue 89,924 91,258 76,496 74,697 75,432 257,678 205,984

NONINTEREST EXPENSE:

Salaries and employee benefits 104,219 108,103 108,272 97,137 101,154 320,594 299,363

Occupancy, net of rental income 13,053 12,890 12,708 12,267 12,323 38,651 35,862

Equipment 4,519 4,762 4,649 4,725 4,676 13,930 12,987

Deposit insurance assessments 1,522 1,962 1,546 2,200 2,038 5,030 6,943

Other 32,192 34,787 40,831 46,022 39,423 107,810 112,101

Total noninterest expense 155,505 162,504 168,006 162,351 159,614 486,015 467,256

Income before income taxes 95,350 79,324 30,020 83,120 81,917 204,694 216,398

Income tax expense 21,525 18,164 5,759 17,271 18,160 45,448 47,986

Net income $ 73,825 $ 61,160 $ 24,261 $ 65,849 $ 63,757 $ 159,246 $ 168,412

Less: Preferred dividends 2,372 2,372 2,372 - - 7,116 -

Net income available to common shareholders $ 71,453 $ 58,788 $ 21,889 $ 65,849 $ 63,757 $ 152,130 $ 168,412

Net income per common share: Basic $ 0.70 $ 0.57 $ 0.21 $ 0.63 $ 0.63 $ 1.47 $ 1.68

Diluted $ 0.69 $ 0.57 $ 0.21 $ 0.63 $ 0.63 $ 1.47 $ 1.67

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

Quarter Ended

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

LOAN AND LEASE PORTFOLIO:

Commercial and industrial

Commercial and industrial-non real estate 2,937,608 3,038,957 2,008,043 1,979,507 1,887,817

Commercial and industrial-owner occupied 2,297,008 2,296,287 2,290,585 2,268,813 2,276,338

Total commercial and industrial 5,234,616 5,335,244 4,298,628 4,248,320 4,164,155

Commercial real estate

Agricultural 333,839 333,615 339,539 337,349 347,866

Construction, acquisition and development 1,700,030 1,658,678 1,582,039 1,577,342 1,538,073

Commercial real estate 3,229,959 3,323,744 3,303,537 3,220,914 3,345,166

Total commercial real estate 5,263,828 5,316,037 5,225,115 5,135,605 5,231,105

Consumer

Consumer mortgages 3,704,490 3,646,168 3,572,277 3,543,075 3,519,449

Home equity 658,708 655,543 686,202 683,515 678,294

Credit cards 85,760 86,592 93,896 102,559 101,213

Total consumer 4,448,958 4,388,303 4,352,375 4,329,149 4,298,956

All other 380,333 387,837 348,527 376,609 426,567

Total loans $ 15,327,735 $ 15,427,421 $ 14,224,645 $ 14,089,683 $ 14,120,783

ALLOWANCE FOR CREDIT LOSSES:

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

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

Impact of adopting ASC 326 - purchased loans with credt

deterioration - - 22,634 - -

Loans and leases charged-off:

Commercial and industrial

Commercial and industrial-non real estate (560) (1,506) (10,792) (1,273) (218)

Commercial and industrial-owner occupied (441) (13) (184) (192) (65)

Total commercial and industrial (1,001) (1,519) (10,976) (1,465) (283)

Commercial real estate

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

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

Commercial real estate (738) - (67) - (49)

Total commercial real estate (738) (30) (3,305) (37) (49)

Consumer

Consumer mortgages (81) (124) (524) (687) (255)

Home equity (41) (162) (236) (173) (39)

Credit cards (682) (703) (798) (797) (631)

Total consumer (804) (989) (1,558) (1,657) (925)

All other (599) (396) (914) (965) (895)

Total loans charged-off (3,142) (2,934) (16,753) (4,124) (2,152)

Recoveries:

Commercial and industrial

Commercial and industrial-non real estate 294 277 355 353 835

Commercial and industrial-owner occupied 163 136 1,179 30 49

Total commercial and industrial 457 413 1,534 383 884

Commercial real estate

Agricultural 3 6 6 4 3

Construction, acquisition and development 55 172 245 584 480

Commercial real estate 209 50 135 4,212 29

Total commercial real estate 267 228 386 4,800 512

Consumer

Consumer mortgages 352 345 397 407 278

Home equity 132 259 80 216 731

Credit cards 270 195 285 218 224

Total consumer 754 799 762 841 1,233

All other 263 320 344 258 240

Total recoveries 1,741 1,760 3,026 6,282 2,869

Net (charge-offs)recoveries (1,401) (1,174) (13,727) 2,158 717

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 15,000 20,000 45,000 - 500

Total provision 15,000 20,000 46,000 - 500

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

Average loans for period $ 15,369,684 $ 15,114,732 $ 14,226,788 $ 14,061,118 $ 13,726,755

Ratio:

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

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

Quarter Ended

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

BXS ORIGINATED LOANS AND LEASES:

Loans and leases charged off:

Commercial and industrial

Commercial and industrial-non real estate $ (490) $ (420) $ (230) $ (844) $ (185)

Commercial and industrial-owner occupied (434) (13) (19) (184) (65)

Total commercial and industrial (924) (433) (249) (1,028) (250)

Commercial real estate

Agricultural - - (65) (6) -

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

Commercial real estate (155) - (67) - (49)

Total real estate (155) - (253) (32) (49)

Consumer

Consumer mortgages (70) (113) (357) (648) (255)

Home equity (41) (162) (236) (173) (39)

Credit cards (682) (703) (798) (797) (631)

Total consumer (793) (978) (1,391) (1,618) (925)

All other (459) (288) (704) (782) (848)

Total loans charged off (2,331) (1,699) (2,597) (3,460) (2,072)

Recoveries:

Commercial and industrial

Commercial and industrial-non real estate 231 210 325 277 833

Commercial and industrial-owner occupied 163 136 1,177 30 49

Total commercial and industrial 394 346 1,502 307 882

Commercial real estate

Agricultural 3 5 4 4 3

Construction, acquisition and development 55 170 244 583 480

Commercial real estate 208 50 135 4,212 29

Total real estate 266 225 383 4,799 512

Consumer

Consumer mortgages 350 343 395 405 275

Home equity 130 258 79 215 729

Credit cards 270 195 285 218 224

Total consumer 750 796 759 838 1,228

All other 235 275 316 245 226

Total recoveries 1,645 1,642 2,960 6,189 2,848

Net (charge-offs)/recoveries $ (686) $ (57) $ 363 $ 2,729 $ 776

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

Quarter Ended

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

ACQUIRED LOANS AND LEASES:

Loans and leases charged off:

Commercial and industrial

Commercial and industrial-non real estate $ (70) $ (1,086) $ (10,562) $ (429) $ (33)

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

Total commercial and industrial (77) (1,086) (10,727) (437) (33)

Commercial real estate

Agricultural - (21) - (5) -

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

Commercial real estate (583) - - - -

Total real estate (583) (30) (3,052) (5) -

Consumer

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

Home equity - - - - -

Credit cards - - - - -

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

All other (140) (108) (210) (183) (47)

Total loans charged off (811) (1,235) (14,156) (664) (80)

Recoveries:

Commercial and industrial

Commercial and industrial-non real estate 63 67 30 76 2

Commercial and industrial-owner occupied - - 2 - -

Total commercial and industrial 63 67 32 76 2

Commercial real estate

Agricultural - 1 2 - -

Construction, acquisition and development - 2 1 1 -

Commercial real estate 1 - - - -

Total real estate 1 3 3 1 -

Consumer

Consumer mortgages 2 2 2 2 3

Home equity 2 1 1 1 2

Credit cards - - - - -

Total consumer 4 3 3 3 5

All other 28 45 28 13 14

Total recoveries 96 118 66 93 21

Net (charge-offs)/recoveries $ (715) $ (1,117) $ (14,090) $ (571) $ (59)

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

Quarter Ended

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

NON-PERFORMING ASSETS

NON-PERFORMING LOANS AND LEASES:

Nonaccrual Loans and Leases

Commercial and industrial

Commercial and industrial-non real estate $ 17,936 $ 16,124 $ 16,589 $ 11,105 $ 10,430

Commercial and industrial-owner occupied 18,343 16,745 11,212 7,838 7,446

Total commercial and industrial 36,279 32,869 27,801 18,943 17,876

Commercial real estate

Agricultural 5,907 5,244 5,454 4,772 4,423

Construction, acquisition and development 10,434 9,715 13,899 6,225 2,231

Commercial real estate 32,554 45,047 29,697 16,199 16,823

Total commercial real estate 48,895 60,006 49,050 27,196 23,477

Consumer

Consumer mortgages 32,872 30,672 29,834 28,879 31,744

Home equity 3,325 2,584 2,597 2,993 2,767

Credit cards 144 90 122 63 85

Total consumer 36,341 33,346 32,553 31,935 34,596

All other 593 532 670 722 434

Total nonaccrual loans and leases $ 122,108 $ 126,753 $ 110,074 $ 78,796 $ 76,383

Loans and Leases 90+ Days Past Due, Still Accruing: 17,641 9,877 7,272 17,531 16,659

Restructured Loans and Leases, Still Accruing 11,154 11,575 11,284 15,184 15,033

Total non-performing loans and leases $ 150,903 $ 148,205 $ 128,630 $ 111,511 $ 108,075

OTHER REAL ESTATE OWNED: 6,397 7,164 9,200 6,746 7,929

Total Non-performing Assets $ 157,300 $ 155,369 $ 137,830 $ 118,257 $ 116,004

BXS originated assets $ 109,418 $ 94,155 $ 85,908 $ 78,295 $ 84,413

Acquired assets 47,882 61,214 51,922 39,962 31,591

Total Non-performing Assets $ 157,300 $ 155,369 $ 137,830 $ 118,257 $ 116,004

Additions to Nonaccrual Loans and Leases During the Quarter $ 19,973 $ 36,619 $ 47,523 $ 25,147 $ 26,331

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

BXS originated loans $ 42,978 $ 35,002 $ 54,315 $ 44,559 $ 40,668

Acquired loans 5,694 10,450 14,405 23,054 16,741

Total Loans and Leases 30-89 days past due, still accruing $ 48,672 $ 45,452 $ 68,720 $ 67,613 $ 57,409

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

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

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

*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

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

LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:

Pass $ 14,877,943 $ 14,985,673 $ 13,821,602 $ 13,738,979 $ 13,782,584

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

Substandard 372,483 350,264 323,697 298,491 280,059

Doubtful 178 179 191 194 194

Loss - - 667 - -

Impaired 49,818 57,406 40,627 24,094 24,948

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

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

Total $ 15,327,735 $ 15,427,421 $ 14,224,645 $ 14,089,683 $ 14,120,783

BXS ORIGINATED LOAN PORTFOLIO BY INTERNALLY

ASSIGNED GRADE:

Pass $ 13,592,460 $ 13,516,292 $ 12,150,616 $ 12,080,336 $ 11,901,311

Special Mention - 2,741 2,045 - -

Substandard 252,875 231,687 225,506 202,017 192,133

Doubtful 178 179 191 194 194

Loss - - - - -

Impaired 30,909 28,288 22,356 17,110 24,379

Purchased Credit Deteriorated (Loss) - - - - -

Purchased Credit Impaired - - - - -

Total $ 13,876,422 $ 13,779,187 $ 12,400,714 $ 12,299,657 $ 12,118,017

ACQUIRED LOAN PORTFOLIO BY INTERNALLY

ASSIGNED GRADE:

Pass $ 1,285,483 $ 1,469,381 $ 1,670,986 $ 1,658,643 $ 1,881,273

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

Substandard 119,608 118,577 98,191 96,474 87,926

Doubtful - - - - -

Loss - - 667 - -

Impaired 18,909 29,118 18,271 6,984 569

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

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

Total $ 1,451,313 $ 1,648,234 $ 1,823,931 $ 1,790,026 $ 2,002,766

BancorpSouth Bank

Geographical Information

(Dollars in thousands)

(Unaudited)

September 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 $ 275,711 $ 237,417 $ 352,908 $ 739,580 $ 78,753 $ 189,569 $ 1,058,826 $ 4,844 $ 2,937,608

Commercial and industrial-owner occupied 265,239 185,519 238,839 636,024 62,987 128,232 777,603 2,565 2,297,008

Total commercial and industrial 540,950 422,936 591,747 1,375,604 141,740 317,801 1,836,429 7,409 5,234,616

Commercial real estate

Agricultural 26,136 70,808 24,489 71,275 7,362 10,925 122,401 443 333,839

Construction, acquisition and development 173,894 49,582 83,313 310,262 22,506 104,294 956,179 - 1,700,030

Commercial real estate 333,696 338,794 304,446 659,031 230,587 222,234 1,141,171 - 3,229,959

Total commercial real estate 533,726 459,184 412,248 1,040,568 260,455 337,453 2,219,751 443 5,263,828

Consumer

Consumer mortgages 584,926 335,889 344,462 828,965 109,091 340,804 1,093,636 66,717 3,704,490

Home equity 102,779 46,382 79,574 227,479 16,660 145,480 40,354 - 658,708

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

Total consumer 687,705 382,271 424,036 1,056,444 125,751 486,284 1,133,990 152,477 4,448,958

All other 61,241 42,561 34,041 121,036 3,818 19,284 88,622 9,730 380,333

Total loans $ 1,823,622 $ 1,306,952 $ 1,462,072 $ 3,593,652 $ 531,764 $ 1,160,822 $ 5,278,792 $ 170,059 $ 15,327,735

Loan growth, excluding loans acquired during

the quarter (annualized) (4.20%) (6.56%) (10.84%) (12.51%) (7.10%) 1.23% 8.75% (18.27%) (2.57%)

Loan growth, excluding PPP loans (annualized) (5.32%) (6.83%) (11.42%) (12.95%) (7.59%) 0.91% 8.29% (17.53%) (3.07%)

NON-PERFORMING LOANS AND LEASES:

Commercial and industrial

Commercial and industrial-non real estate $ 582 $ 1,363 $ 2,160 $ 1,742 $ 1,799 $ 595 $ 10,611 $ 225 $ 19,077

Commercial and industrial-owner occupied 2,921 2,373 677 3,644 166 - 14,201 - 23,982

Total commercial and industrial 3,503 3,736 2,837 5,386 1,965 595 24,812 225 43,059

Commercial real estate

Agricultural 279 618 166 999 - - 3,850 - 5,912

Construction, acquisition and development 161 166 2,573 208 - 315 7,270 - 10,693

Commercial real estate 3,388 33 5,265 876 - 95 24,052 - 33,709

Total commercial real estate 3,828 817 8,004 2,083 - 410 35,172 - 50,314

Consumer

Consumer mortgages 9,198 4,069 4,224 13,572 1,032 6,456 11,741 1,912 52,204

Home equity 363 258 395 996 237 1,228 387 - 3,864

Credit cards - - - - - - - 817 817

Total consumer 9,561 4,327 4,619 14,568 1,269 7,684 12,128 2,729 56,885

All other 197 2 52 95 - 16 279 4 645

Total loans $ 17,089 $ 8,882 $ 15,512 $ 22,132 $ 3,234 $ 8,705 $ 72,391 $ 2,958 $ 150,903

NON-PERFORMING LOANS AND LEASES

AS A PERCENTAGE OF OUTSTANDING:

Commercial and industrial

Commercial and industrial-non real estate 0.21% 0.57% 0.61% 0.24% 2.28% 0.31% 1.00% 4.64% 0.65%

Commercial and industrial-owner occupied 1.10% 1.28% 0.28% 0.57% 0.26% 0.00% 1.83% 0.00% 1.04%

Total commercial and industrial 0.65% 0.88% 0.48% 0.39% 1.39% 0.19% 1.35% 3.04% 0.82%

Commercial real estate

Agricultural 1.07% 0.87% 0.68% 1.40% 0.00% 0.00% 3.15% 0.00% 1.77%

Construction, acquisition and development 0.09% 0.33% 3.09% 0.07% 0.00% 0.30% 0.76% N/A 0.63%

Commercial real estate 1.02% 0.01% 1.73% 0.13% 0.00% 0.04% 2.11% N/A 1.04%

Total commercial real estate 0.72% 0.18% 1.94% 0.20% 0.00% 0.12% 1.58% 0.00% 0.96%

Consumer

Consumer mortgages 1.57% 1.21% 1.23% 1.64% 0.95% 1.89% 1.07% 2.87% 1.41%

Home equity 0.35% 0.56% 0.50% 0.44% 1.42% 0.84% 0.96% N/A 0.59%

Credit cards N/A N/A N/A N/A N/A N/A N/A 0.95% 0.95%

Total consumer 1.39% 1.13% 1.09% 1.38% 1.01% 1.58% 1.07% 1.79% 1.28%

All other 0.32% 0.00% 0.15% 0.08% 0.00% 0.08% 0.31% 0.04% 0.17%

Total loans 0.94% 0.68% 1.06% 0.62% 0.61% 0.75% 1.37% 1.74% 0.98%

BancorpSouth Bank

Noninterest Revenue and Expense

(Dollars in thousands)

(Unaudited)

Quarter Ended Year to Date

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

NONINTEREST REVENUE:

Mortgage banking excl. MSR and MSR Hedge market value adj $ 26,667 $ 31,930 $ 20,553 $ 6,938 $ 11,283 $ 79,150 $ 27,359

MSR and MSR Hedge market value adjustment 430 (2,373) (11,083) 3,164 (3,994) (13,026) (17,679)

Credit card, debit card and merchant fees 9,938 9,080 9,176 9,836 9,778 28,194 28,820

Deposit service charges 8,892 7,647 11,682 12,193 11,939 28,221 33,822

Securities gains (losses), net 18 62 (85) (41) 117 (5) 215

Insurance commissions 32,750 33,118 29,603 27,648 31,512 95,471 95,643

Trust income 3,902 4,064 4,013 3,951 4,488 11,979 12,091

Annuity fees 53 54 55 136 184 162 694

Brokerage commissions and fees 2,516 2,303 2,502 2,530 1,979 7,321 5,407

Bank-owned life insurance 1,902 1,855 1,999 3,427 2,529 5,756 6,205

Other miscellaneous income 2,856 3,518 8,081 4,915 5,617 14,455 13,407

Total noninterest revenue $ 89,924 $ 91,258 $ 76,496 $ 74,697 $ 75,432 $ 257,678 $ 205,984

NONINTEREST EXPENSE:

Salaries and employee benefits $ 104,219 $ 108,103 $ 108,272 $ 97,137 $ 101,154 $ 320,594 $ 299,363

Occupancy, net of rental income 13,053 12,890 12,708 12,267 12,323 38,651 35,862

Equipment 4,519 4,762 4,649 4,725 4,676 13,930 12,987

Deposit insurance assessments 1,522 1,962 1,546 2,200 2,038 5,030 6,943

Advertising 826 918 1,099 1,153 1,382 2,843 3,756

Foreclosed property expense (278) 1,306 924 855 870 1,952 2,013

Telecommunications 1,462 1,512 1,461 1,504 1,400 4,435 4,159

Public relations 1,130 459 680 880 1,069 2,269 2,768

Data processing 9,477 9,693 9,646 10,041 9,066 28,816 25,476

Computer software 4,779 4,979 4,315 4,478 3,825 14,073 11,359

Amortization of intangibles 2,357 2,355 2,394 2,508 2,117 7,106 6,610

Legal (316) 1,375 898 854 786 1,957 2,701

Merger expense 129 510 4,494 5,782 4,062 5,133 8,089

Postage and shipping 1,199 1,198 1,441 1,353 1,281 3,838 3,910

Other miscellaneous expense 11,427 10,482 13,479 16,614 13,565 35,388 41,260

Total noninterest expense $ 155,505 $ 162,504 $ 168,006 $ 162,351 $ 159,614 $ 486,015 $ 467,256

INSURANCE COMMISSIONS:

Property and casualty commissions $ 24,060 $ 23,644 $ 21,246 $ 19,994 $ 22,643 $ 68,950 $ 67,310

Life and health commissions 6,072 6,771 6,175 5,979 6,116 19,018 19,453

Risk management income 609 540 532 667 564 1,681 1,773

Other 2,009 2,163 1,650 1,008 2,189 5,822 7,107

Total insurance commissions $ 32,750 $ 33,118 $ 29,603 $ 27,648 $ 31,512 $ 95,471 $ 95,643

BancorpSouth Bank

Selected Additional Information

(Dollars in thousands)

(Unaudited)

Quarter Ended

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

MORTGAGE SERVICING RIGHTS:

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

Additions to mortgage servicing rights:

Originations of servicing assets 7,041 4,297 3,079 4,025 3,410

Changes in fair value:

Due to payoffs/paydowns (3,198) (3,144) (2,506) (2,323) (2,542)

Due to change in valuation inputs or

assumptions used in the valuation model 280 (2,575) (15,438) 3,915 (4,669)

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

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

MORTGAGE BANKING REVENUE:

Production revenue:

Origination $ 23,632 $ 30,194 $ 17,906 $ 4,326 $ 8,922

Servicing 6,233 4,880 5,153 4,935 4,903

Payoffs/Paydowns (3,198) (3,144) (2,506) (2,323) (2,542)

Total production revenue 26,667 31,930 20,553 6,938 11,283

Market value adjustment on MSR 280 (2,575) (15,438) 3,915 (4,669)

Market value adjustment on MSR Hedge 150 202 4,355 (751) 675

Total mortgage banking revenue $ 27,097 $ 29,557 $ 9,470 $ 10,102 $ 7,289

Mortgage loans serviced $ 7,218,090 $ 7,000,425 $ 6,999,383 $ 6,898,195 $ 6,799,186

MSR/mtg loans serviced 0.62% 0.58% 0.60% 0.83% 0.76%

AVAILABLE-FOR-SALE SECURITIES, at fair value

U.S. Government agencies $ 3,116,458 $ 3,348,206 $ 3,532,905 $ 3,599,317 $ 2,323,159

U.S. Government agency issued residential

mortgage-back securities 1,625,325 699,864 132,902 133,375 128,677

U.S. Government agency issued commercial

mortgage-back securities 758,116 759,980 595,885 609,009 115,228

Obligations of states and political subdivisions 141,896 163,121 206,648 140,273 199,382

Corporate bonds 17,990 2,000 - - -

Total available-for-sale securities $ 5,659,785 $ 4,973,171 $ 4,468,340 $ 4,481,974 $ 2,766,446

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

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

Net income $ 73,825 $ 61,160 $ 24,261 $ 65,849 $ 63,757 $ 159,246 $ 168,412

Plus: Merger expense, net of tax 97 383 3,372 4,339 3,049 3,852 6,072

Initial provision for acquired loans,

net of tax - - 751 - - 751

Less: Security gains(losses), net of tax 13 47 (64) (30) 88 (4) 162

Net operating income $ 73,909 $ 61,496 $ 28,448 $ 70,218 $ 66,718 $ 163,853 $ 174,322

Less: Preferred dividends 2,372 2,372 2,372 - - 7,116 -

Net operating income available to

common shareholders $ 71,537 $ 59,124 $ 26,076 $ 70,218 $ 66,718 $ 156,737 $ 174,322

Net operating income $ 73,909 $ 61,496 $ 28,448 $ 70,218 $ 66,718 $ 163,853 $ 174,322

Less: MSR market value adjustment, net of tax 323 (1,781) (8,318) 2,374 (2,998) (9,776) (13,268)

Net operating income-excluding MSR $ 73,586 $ 63,277 $ 36,766 $ 67,844 $ 69,716 $ 173,629 $ 187,590

Less: Preferred dividends 2,372 2,372 2,372 - - 7,116 -

Net operating income available to common

shareholders-excluding MSR $ 71,214 $ 60,905 $ 34,394 $ 67,844 $ 69,716 $ 166,513 $ 187,590

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

Net income $ 73,825 $ 61,160 $ 24,261 $ 65,849 $ 63,757 $ 159,246 $ 168,412

Plus: Provision for credit losses 15,000 20,000 46,000 - 500 81,000 1,500

Merger expense 129 510 4,494 5,782 4,062 5,133 8,089

Income tax expense 21,525 18,164 5,759 17,271 18,160 45,448 47,986

Less: Security gains(losses) 18 62 (85) (41) 117 (5) 215

MSR market value adjustment 430 (2,373) (11,083) 3,164 (3,994) (13,026) (17,679)

Pre-tax pre-provision net revenue $ 110,031 $ 102,145 $ 91,682 $ 85,779 $ 90,356 $ 303,858 $ 243,451

Reconciliation of Total Operating Expense to Total Noninterest Expense:

Total noninterest expense $ 155,505 $ 162,504 $ 168,006 $ 162,351 $ 159,614 $ 486,015 $ 467,256

Less: Merger expense 129 510 4,494 5,782 4,062 5,133 8,089

Total operating expense $ 155,376 $ 161,994 $ 163,512 $ 156,569 $ 155,552 $ 480,882 $ 459,167

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

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

Tangible assets

Total assets $ 23,555,422 $ 23,236,176 $ 21,032,524 $ 21,052,576 $ 19,850,225 $ 23,555,422 $ 19,850,225

Less: Goodwill 847,531 847,984 848,242 825,679 822,093 847,531 822,093

Other identifiable intangible assets 54,757 56,989 59,345 60,008 61,100 54,757 61,100

Total tangible assets $ 22,653,134 $ 22,331,203 $ 20,124,937 $ 20,166,889 $ 18,967,032 $ 22,653,134 $ 18,967,032

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

Total tangible assets-excluding PPP loans $ 21,440,888 $ 21,138,488 $ 20,124,937 $ 20,166,889 $ 18,967,032 $ 21,440,888 $ 18,967,032

PERIOD END BALANCES:

Tangible shareholders' equity

Total shareholders' equity $ 2,782,539 $ 2,732,687 $ 2,681,904 $ 2,685,017 $ 2,489,427 $ 2,782,539 $ 2,489,427

Less: Goodwill 847,531 847,984 848,242 825,679 822,093 847,531 822,093

Other identifiable intangible assets 54,757 56,989 59,345 60,008 61,100 54,757 61,100

Total tangible shareholders' equity $ 1,880,251 $ 1,827,714 $ 1,774,317 $ 1,799,330 $ 1,606,234 $ 1,880,251 $ 1,606,234

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

Total tangible common shareholders' equity $ 1,713,258 $ 1,660,721 $ 1,607,324 $ 1,632,309 $ 1,606,234 $ 1,713,258 $ 1,606,234

AVERAGE BALANCES:

Tangible shareholders' equity

Total shareholders' equity $ 2,729,870 $ 2,738,434 $ 2,658,699 $ 2,572,750 $ 2,378,882 $ 2,709,077 $ 2,297,322

Less: Goodwill 847,744 848,160 844,635 823,812 761,084 846,850 731,043

Other identifiable intangible assets 56,045 58,280 58,805 60,559 59,253 57,704 52,842

Total tangible shareholders' equity $ 1,826,081 $ 1,831,994 $ 1,755,259 $ 1,688,379 $ 1,558,545 $ 1,804,523 $ 1,513,437

Less: Preferred stock 166,993 166,993 167,021 74,717 - 167,002 -

Total tangible common shareholders' equity $ 1,659,088 $ 1,665,001 $ 1,588,238 $ 1,613,662 $ 1,558,545 $ 1,637,521 $ 1,513,437

Total average assets $ 23,318,877 $ 22,707,686 $ 21,189,637 $ 20,243,023 $ 19,170,926 $ 22,408,734 $ 18,618,066

Total shares of common stock outstanding 102,558,459 102,566,301 102,632,484 104,522,804 104,775,876 102,558,459 104,775,876

Average shares outstanding-diluted 102,839,749 102,827,225 104,733,897 105,144,032 101,493,247 103,466,957 100,699,510

Tangible shareholders' equity to tangible assets (1) 8.30% 8.18% 8.82% 8.92% 8.47% 8.30% 8.47%

Tangible shareholders' equity to tangible assets-excluding PPP loans (2) 8.77% 8.65% 8.82% 8.92% 8.47% 8.77% 8.47%

Tangible common shareholders' equity to tangible assets (3) 7.56% 7.44% 7.99% 8.09% 8.47% 7.56% 8.47%

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

Return on average tangible equity (5) 16.08% 13.43% 5.56% 15.47% 16.23% 11.79% 14.88%

Return on average tangible common equity (6) 17.13% 14.20% 5.54% 16.19% 16.23% 12.41% 14.88%

Operating return on average tangible equity-excluding MSR (7) 16.03% 13.89% 8.42% 15.94% 17.75% 12.85% 16.57%

Operating return on average tangible common equity-excluding MSR (8) 17.08% 14.71% 8.71% 16.68% 17.75% 13.58% 16.57%

Operating return on average assets-excluding MSR (9) 1.26% 1.12% 0.70% 1.33% 1.44% 1.03% 1.35%

Operating return on average shareholders' equity-excluding MSR (10) 10.72% 9.29% 5.56% 10.46% 11.63% 8.56% 10.92%

Operating return on average common shareholders' equity-excluding MSR (11) 11.05% 9.53% 5.55% 10.78% 11.63% 8.75% 10.92%

Pre-tax pre-provision net revenue to total average assets (12) 1.88% 1.81% 1.74% 1.68% 1.87% 1.81% 1.75%

Tangible book value per common share (13) $ 16.71 $ 16.19 $ 15.66 $ 15.62 $ 15.33 $ 16.71 $ 15.33

Operating earnings per common share (14) $ 0.70 $ 0.57 $ 0.25 $ 0.67 $ 0.66 $ 1.51 $ 1.73

Operating earnings per common share-excluding MSR (15) $ 0.69 $ 0.59 $ 0.33 $ 0.65 $ 0.69 $ 1.61 $ 1.86

Tangible shareholders' equity to tangible assets is defined by the Company(1) as 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(2) defined 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(4) preferred stock, 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(7) the Company as annualized net operating income-excluding MSR divided by average tangible shareholders' equity.

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

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

Operating return on average shareholders' equity-excluding MSR is defined(10) by 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(12) the 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(14) operating income available to common shareholders divided by average common shares outstanding-diluted.

Operating earnings per common share-excluding MSR is defined by the(15) Company as 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