PR Newswire | Jul 21, 2021 04:31PM EDT

07/21 15:30 CDT

BancorpSouth Announces Second Quarter 2021 Results TUPELO, Miss., July 21, 2021

TUPELO, Miss., July 21, 2021 /PRNewswire/ -- BancorpSouth Bank (NYSE: BXS) (the "Company") today announced financial results for the quarter ended June 30, 2021.

Highlights for the second quarter of 2021 included:

* Achieved quarterly net income available to common shareholders of $73.2 million, or $0.69 per diluted common share, and record net operating income available to common shareholders - excluding MSR - of $90.6 million, or $0.86 per diluted common share. * Generated $119.9 million in pre-tax pre-provision net revenue (PPNR), or 1.80 percent of average assets on an annualized basis. * Credit quality indicators continued to improve as evidenced by a decline of $8.9 million, or 8.1 percent, in total non-performing assets; provision for credit losses of $11.5 million driven primarily by day one accounting provision requirements associated with loans acquired during the quarter. * Generated organic total deposit and customer repo growth of $224.4 million for the quarter, or 4.1 percent on an annualized basis, and total organic net loan growth of approximately $65.0 million. * Sold 12,289 Paycheck Protection Program (PPP) loans totaling $725.4 million, which generated a gain on sale of $21.6 million; received PPP forgiveness payments totaling $347.1 million during the quarter. * Maintained strong regulatory capital metrics; estimated total risk-based capital of 14.57 percent at June 30, 2021 compared to 14.65 percent at March 31, 2021. * Completed transactions with National United Bancshares, Inc., the parent company of National United, and FNS Bancshares, Inc., the parent company of FNB Bank, effective May 1, 2021, which add approximately $1.6 billion in total assets to the Company. * Announced the signing of a merger agreement with Cadence Bancorporation, the parent company of Cadence Bank N.A., which creates a $46 billion institution on a pro forma basis that will be the 5th largest bank headquartered in the Company's nine-state footprint.

"While we aren't immune to the balance sheet and margin dynamics impacting the industry, we continue to report strong financial results," remarked Dan Rollins, Chairman and Chief Executive Officer. "Second quarter was another record quarter from an operating earnings standpoint. Consistent with the last several quarters, we reported meaningful organic deposit growth, improvement in our credit quality indicators, and a stable core expense base. We generated net organic loan growth for the first time since the second quarter of 2019. In addition, our insurance brokerage team had a great quarter from a revenue growth perspective."

"As we look at other highlights for the quarter, we sold $725.4 million in PPP loans, which resulted in a gain on sale of $21.6 million. In addition we received forgiveness payments totaling $347.1 million which, combined with the loan sale, resulted in less than $170 million in PPP loans remaining on the balance sheet at quarter end. This will allow our frontline team to return to critical sales and customer service activities including prospecting and building customer relationships. We are also pleased to have completed both the closing and operational integration of our transactions with National United Bancshares, Inc. and FNS Bancshares, Inc. These teams have made a seamless transition to our Company and will be an integral part of our growth efforts going forward."

Earnings Summary

The Company reported net income available to common shareholders of $73.2 million, or $0.69 per diluted common share, for the second quarter of 2021, compared with net income available to common shareholders of $58.8 million, or $0.57 per diluted common share, for the second quarter of 2020 and net income available to common shareholders of $79.2 million, or $0.77 per diluted common share, for the first quarter of 2021. The Company reported net operating income available to common shareholders - excluding MSR - of $90.6 million, or $0.86 per diluted common share, for the second quarter of 2021, compared with $60.9 million, or $0.59 per diluted common share, for the second quarter of 2020 and $74.8 million, or $0.73 per diluted common share, for the first quarter of 2021.

The Company reported PPNR of $119.9 million, or 1.80 percent of average assets on an annualized basis, for the second quarter of 2021 compared to $102.1 million, or 1.81 percent of average assets on an annualized basis, for the second quarter of 2020 and $99.1 million, or 1.64 percent of average assets on an annualized basis, for the first quarter of 2021.

Net Interest Revenue

Net interest revenue was $180.2 million for the second quarter of 2021, an increase of 5.6 percent from $170.6 million for the second quarter of 2020 and an increase of 4.3 percent from $172.8 million for the first quarter of 2021. The fully taxable equivalent net interest margin was 2.99 percent for the second quarter of 2021, compared with 3.35 percent for the second quarter of 2020 and 3.15 percent for the first quarter of 2021. Yields on net loans and leases were 4.43 percent for the second quarter of 2021, compared with 4.59 percent for the second quarter of 2020 and 4.53 percent for the first quarter of 2021, while yields on total interest earning assets were 3.31 percent for the second quarter of 2021, compared with 3.87 percent for the second quarter of 2020 and 3.51 percent for the first quarter of 2021. The net interest margin, excluding accretable yield, was 2.94 percent for the second quarter of 2021, compared with 3.30 percent for the second quarter of 2020 and 3.08 percent for the first quarter of 2021, while yields on net loans and leases, excluding accretable yield, were 4.35 percent for the second quarter of 2021, compared with 4.53 percent for the second quarter of 2020 and 4.43 percent for the first quarter of 2021.

PPP loans had an adverse impact of approximately four basis points on the yield on net loans and leases, excluding accretable yield, for the second quarter of 2021. Net interest income for the second quarter of 2021 included approximately $3.7 million of accelerated PPP fee income recognition resulting from the payoff of loans that were forgiven by the SBA during the quarter. The average cost of deposits was 0.27 percent for the second quarter of 2021, compared with 0.50 percent for the second quarter of 2020 and 0.33 percent for the first quarter of 2021.

Balance Sheet Activity

Loans and leases, net of unearned income, decreased $34.8 million during the second quarter of 2021 while deposits and customer repos increased $1.7 billion. The Company completed a sale of $725.4 million in PPP loans during the second quarter, which resulted in a gain on sale of $21.6 million. In addition, forgiveness payments were received during the quarter totaling $347.1 million. The Company also completed acquisitions with National United Bancshares, Inc., the parent company of National United, and FNS Bancshares, Inc., the parent company of FNB Bank, during the second quarter which collectively added $877.9 million in loans, net of day one accounting adjustments, and $1.5 billion in deposits and customer repos. Excluding the impact of acquisitions and PPP activity, total loans increased approximately $65.0 million compared to March 31, 2021, while deposits and customer repos increased approximately $225.0 million, or 4.1 percent on an annualized basis.

Provision for Credit Losses and Allowance for Credit Losses

Earnings for the second quarter of 2021 reflect a provision for credit losses of $11.5 million, compared with a provision of $20.0 million for the second quarter of 2020 and no provision for credit losses for the first quarter of 2021. The $11.5 million provision for the second quarter was primarily associated with the day one accounting provision requirements for loans acquired during the quarter. Net recoveries for the second quarter of 2021 were $1.8 million, or 0.05 percent of net loans and leases on an annualized basis, compared with net charge-offs of $1.2 million for the second quarter of 2020 and net charge-offs of $3.3 million for the first quarter of 2021. The allowance for credit losses was $265.7 million, or 1.77 percent of net loans and leases, at June 30, 2021, compared with $237.0 million, or 1.54 percent of net loans and leases, at June 30, 2020, and $241.1 million, or 1.60 percent of net loans and leases, at March 31, 2021. The allowance for credit losses coverage, excluding the impact of PPP loans, was 1.79 percent of net loans and leases at June 30, 2021, compared with 1.67 percent at June 30, 2020 and 1.74 percent at March 31, 2021.

Total non-performing assets were $101.8 million, or 0.37 percent of total assets, at June 30, 2021, compared with $155.4 million, or 0.67 percent of total assets, at June 30, 2020, and $110.7 million, or 0.43 percent of total assets, at March 31, 2021. Other real estate owned was $17.3 million at June 30, 2021, compared with $7.2 million at June 30, 2020 and $9.4 million at March 31, 2021.

Noninterest Revenue

Noninterest revenue was $101.9 million for the second quarter of 2021, compared with $91.3 million for the second quarter of 2020 and $87.9 million for the first quarter of 2021. These results include a negative mortgage servicing rights (MSR) valuation adjustment of $1.9 million for the second quarter of 2021, compared with a negative MSR valuation adjustment of $2.4 million for the second quarter of 2020 and a positive MSR valuation adjustment of $7.4 million for the first quarter of 2021. Valuation adjustments in the MSR asset are driven primarily by fluctuations in interest rates period over period.

Mortgage production and servicing revenue was $11.0 million for the second quarter of 2021, compared with $31.9 million for the second quarter of 2020 and $17.9 million for the first quarter of 2021. Mortgage origination volume for the second quarter of 2021 was $906.4 million, compared with $989.0 million for the second quarter of 2020 and $789.8 million for the first quarter of 2021. Home purchase money volume was $615.2 million for the second quarter of 2021, compared with $522.6 million for the second quarter of 2020 and $379.4 million for the first quarter of 2021. Of the total mortgage origination volume for the second quarter of 2021, $344.1 million was portfolio loans, compared with $251.7 million for the second quarter of 2020 and $149.0 million for the first quarter of 2021.

Credit card, debit card, and merchant fee revenue was $11.6 million for the second quarter of 2021, compared with $9.1 million for the second quarter of 2020 and $9.7 million for the first quarter of 2021. Deposit service charge revenue was $8.8 million for the second quarter of 2021, compared with $7.6 million for the second quarter of 2020 and $8.5 million for the first quarter of 2021. Wealth management revenue was $7.5 million for the second quarter of 2021, compared with $6.4 million for the second quarter of 2020 and $8.5 million for the first quarter of 2021. Insurance commission revenue was $36.1 million for the second quarter of 2021, compared with $33.1 million for the second quarter of 2020 and $30.7 million for the first quarter of 2021. Other noninterest revenue was $7.1 million for the second quarter of 2021, compared with $5.4 million for the second quarter of 2020 and $5.3 million for the first quarter of 2021. Additionally, second quarter 2021 results included a $21.6 million gain on the sale of PPP loans.

Noninterest Expense

Noninterest expense for the second quarter of 2021 was $174.0 million, compared with $162.5 million for the second quarter of 2020 and $155.8 million for the first quarter of 2021. Salaries and employee benefits expense was $108.2 million for the second quarter of 2021, compared with $108.1 million for the second quarter of 2020 and $101.1 million for the first quarter of 2021. Occupancy expense was $13.2 million for the second quarter of 2021, compared with $12.9 million for the second quarter of 2020 and $12.8 million for the first quarter of 2021. Other noninterest expense was $46.0 million for the second quarter of 2021, compared with $34.8 million for the second quarter of 2020 and $35.9 million for the first quarter of 2021. Additionally, merger-related expense for the second quarter of 2021 was $10.0 million, compared with merger-related expense of $0.5 million for the second quarter of 2020 and $1.6 million for the first quarter of 2021. Salaries and benefits expense for the first quarter of 2021 benefited from an accrual true-up totaling approximately $3.0 million related to the Company's equity compensation plans.

Capital Management

The Company's ratio of shareholders' equity to assets was 11.12 percent at June 30, 2021, compared with 11.76 percent at June 30, 2020 and 10.95 percent at March 31, 2021. The ratio of tangible common shareholders' equity to tangible assets was 7.11 percent at June 30, 2021, compared with 7.44 percent at June 30, 2020 and 7.04 percent at March 31, 2021.

During the second quarter of 2021, the Company did not repurchase any shares of its common stock pursuant to its share repurchase program. The Company has 6.0 million shares remaining on its current share repurchase authorization which will expire on December 31, 2021.

Estimated regulatory capital ratios at June 30, 2021 were calculated in accordance with the Basel III capital framework as well as the interagency final rule published on September 30, 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, 2021, with Tier 1 risk-based capital of 11.85 percent and total risk-based capital of 14.57 percent, compared with required minimum levels of 8 percent and 10 percent, respectively, in order to qualify for "well capitalized" classification.

Summary

Rollins concluded, "Despite the current industry headwinds, our board and management team are excited about the pathway ahead for our Company. We are in a strong position from a credit quality and capital perspective. Our noninterest product lines, including mortgage and insurance, are performing quite well in this environment. While we continue to exercise caution, our relationship managers are pleased to be back out in person calling on customers and prospects. Finally, we continue to work diligently toward the completion of our merger with Cadence. Our operational and back office teams are making progress daily on our conversion and integration planning and we remain optimistic that we are on track for a fourth quarter 2021 transaction closing."

TRANSACTIONS

Cadence Bancorporation (NYSE: CADE)

On April 12, 2021, the Company announced the signing of a definitive merger agreement (the Cadence Merger Agreement) with Cadence Bancorporation, the parent company of Cadence Bank N.A., (collectively referred to as Cadence), pursuant to which Cadence will be merged with and into the Company (the Cadence Merger). Cadence operates 98 full-service banking offices in the southeast. As of March 31, 2021, Cadence collectively reported total assets of $18.8 billion, total loans of $12.4 billion and total deposits of $16.1 billion. Under the terms of the Cadence Merger Agreement, each Cadence shareholder will receive 0.70 shares of the Company's common stock. In addition, Cadence will pay a one-time special dividend of $1.25 per share at closing. For more information regarding the Cadence Merger, see our Current Report on Form 8-K that was filed with the Federal Deposit Insurance Corporation (FDIC) on April 12, 2021. The Cadence Merger Agreement has been unanimously approved by the Boards of Directors of the Company and Cadence. Subject to the satisfaction of all closing conditions, including the receipt of all required regulatory and shareholder approvals, the Cadence Merger is expected to be completed during the fourth quarter of 2021, although the Company can provide no assurance that the Cadence Merger will close during this time period or at all.

FNS Bancshares, Inc.

On May 1, 2021, the Company completed the merger with FNS Bancshares, Inc., the parent company of FNB Bank, (collectively referred to as FNS), pursuant to which FNS was merged with and into the Company. FNS operated 17 full-service banking offices in Alabama, Georgia and Tennessee. The merger expanded the Company's presence in Jackson, DeKalb and Marshall counties in Alabama and the Chattanooga, Tennessee-Georgia and Nashville-Davidson-Murfreesboro-Franklin, Tennessee metropolitan statistical areas. As of May 1, 2021, FNS collectively reported total assets of $826.6 million, total loans of $464.7 million and total deposits of $720.7 million. Under the terms of the definitive merger agreement, the Company issued approximately 2,975,000 shares of the Company's common stock plus $18.0 million in cash for all outstanding shares of FNS. For more information regarding this transaction, see our Current Report on Form 8-K that was filed with the FDIC on May 3, 2021. 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.

National United Bancshares, Inc.

On May 1, 2021, the Company completed the merger with National United Bancshares, Inc., the parent company of National United, (collectively referred to as National United), pursuant to which National United was merged with and into the Company. National United operated 6 full-service banking offices in the Killeen-Temple, Texas; Waco, Texas; and Austin-Round Rock-Georgetown, Texas metropolitan statistical areas. As of May 1, 2021, National United collectively reported total assets of $817.3 million, total loans of $434.6 million and total deposits of $742.9 million. Under the terms of the definitive merger agreement, the Company issued approximately 3,110,000 shares of the Company's common stock plus $33.25 million in cash for all outstanding shares of National United. For more information regarding this transaction, see our Current Report on Form 8-K that was filed with the FDIC on May 3, 2021. 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 COVID-19 pandemic. At the same time, the Company remains focused on improving shareholder value, managing credit exposure, challenging expenses, enhancing the customer experience and supporting the communities it serves. Lastly, as a SBA Preferred Lender, the Company 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 negative pressure on its net interest margin and loan demand. 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 and the trading prices of its capital stock 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 2021 financial results on July 22, 2021, at 10:00 a.m. (Central Time). This conference call will be an interactive session between management and analysts. Interested parties may listen to this live conference call via Internet webcast by accessing www.bancorpsouth.investorroom.com/webcasts. The webcast will also be available in archived format at the same address.

About BancorpSouth Bank

BancorpSouth Bank (NYSE: BXS) is headquartered in Tupelo, Mississippi, with approximately $28 billion in assets. BancorpSouth operates approximately 315 full service branch locations as well as additional mortgage, insurance, and loan production offices in Alabama, Arkansas, Florida, Georgia, 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 and Instagram: @MyBXS; or connect with us through LinkedIn.

Forward-Looking Statements

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

Forward-looking statements are based upon management's expectations as well as certain assumptions and estimates made by, and information available to, the Company's management at the time such statements were made. Forward-looking statements are not historical facts, are not guarantees of future results or performance and are subject to certain known and unknown risks, uncertainties and other factors that are beyond the Company's control and that may cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. These risks, uncertainties and other factors include, without limitation, potential delays or other problems in implementing and executing the Company's growth, expansion and acquisition strategies, including delays in obtaining regulatory or other necessary approvals or the failure to realize any anticipated benefits or synergies from any acquisitions or growth strategies; the risks of changes in interest rates and their effects on the level and composition of deposits, loan demand and the values of loan collateral, securities and interest sensitive assets and liabilities; the failure of assumptions underlying the establishment of reserves for possible credit losses, fair value for loans and other real estate owned; changes in real estate values; the availability of and access to capital; possible downgrades in the Company's credit ratings or outlook which could increase the costs or availability of funding from capital markets; the ability to attract new or retain existing deposits or to retain or grow loans; the ability to grow additional interest and fee income or to control noninterest expense; the potential impact of the proposed phase-out of the London Interbank Offered Rate ("LIBOR") or other changes involving LIBOR; competitive factors and pricing pressures, including their effect on the Company's net interest margin; general economic, unemployment, credit market and real estate market conditions, and the effect of such conditions on the creditworthiness of borrowers, collateral values, the value of investment securities and asset recovery values; changes in legal, financial and/or regulatory requirements; recently enacted and potential legislation and regulatory actions and the costs and expenses to comply with new and/or existing legislation and regulatory actions, including those actions in response to the COVID-19 pandemic such as the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the "Economic Aid Act") and any related rules and regulations; changes in U.S. Government monetary and fiscal policy; FDIC special assessments or changes to regular assessments; the enforcement efforts of federal and state bank regulators; possible adverse rulings, judgments, settlements and other outcomes of pending, ongoing and future litigation and governmental, administrative and investigatory matters (including litigation or actions arising from the Company's participation in and administration of programs related to the COVID-19 pandemic (including, among other things, the PPP loan programs authorized by the CARES Act and the Economic Aid Act); the ability to keep pace with technological changes, including changes regarding maintaining cybersecurity; the impact of failure in, or breach of, the Company's operational or security systems or infrastructure, or those of third parties with whom the Company does business, including as a result of cyber-attacks or an increase in the incidence or severity of fraud, illegal payments, security breaches or other illegal acts impacting the Company or the Company's customers; natural disasters or acts of war or terrorism; the adverse effects of the ongoing global COVID-19 pandemic, including the magnitude and duration of the pandemic, and the effect of actions taken to mitigate the impact of the COVID-19 pandemic on the Company, the Company's employees, the Company's customers, the global economy and the financial markets; international or political instability; impairment of the Company's goodwill or other intangible assets; losses of key employees and personnel; adoption of new accounting standards, including the effects from the adoption of the current expected credit loss methodology on January 1, 2020, or changes in existing standards; the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the Cadence Merger Agreement; the outcome of any legal proceedings that have been or may be instituted against the Company or Cadence in respect of the Cadence Merger; the possibility that the Cadence Merger will not close when expected or at all because required regulatory, shareholder or other approvals are not received or other conditions to the closing are not satisfied on a timely basis or at all, or are obtained subject to conditions that are not anticipated; the ability of the Company and Cadence to meet expectations regarding the timing, completion and accounting and tax treatments of the Cadence Merger; the risk that any announcements relating to the Cadence Merger could have adverse effects on the market price of the common stock of either or both parties to the Cadence Merger; the possibility that the anticipated benefits of the Cadence Merger will not be realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where the Company and Cadence do business? certain restrictions during the pendency of the Cadence Merger that may impact the parties' ability to pursue certain business opportunities or strategic transactions; the possibility that the Cadence Merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events? diversion of management's attention from ongoing business operations and opportunities? the possibility that the parties may be unable to achieve expected synergies and operating efficiencies in the Cadence Merger within the expected timeframes or at all and to successfully integrate Cadence's operations and those of the Company; such integration may be more difficult, time consuming or costly than expected; revenues following the Cadence Merger may be lower than expected; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the Cadence Merger? the Company and Cadence's success in executing their respective business plans and strategies and managing the risks involved in the foregoing; the dilution caused by the Company's issuance of additional shares of its capital stock in connection with the Cadence Merger and other factors as detailed from time to time in the Company's press and news releases, periodic and current reports and other filings the Company files 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 the Company's periodic and current reports filed with the FDIC, including those factors included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 under the heading "Item 1A. Risk Factors," in the Company's Quarterly Reports on Form 10-Q under the heading "Part II-Item 1A. Risk Factors" and in the Company's 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, 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 prove to be materially different from the results expressed or implied by the forward-looking statements. Accordingly, undue reliance should not be placed on any forward-looking statements. The forward-looking statements speak only as of the date of this news release, and 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 applicable 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. All written or oral forward-looking statements attributable to the Company are expressly qualified in their entirety by this section.

BancorpSouth Bank

Selected Financial Information

(Dollars in thousands, except per share data)

(Unaudited)

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

6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020 6/30/2021 6/30/2020

Earnings Summary:

Interest revenue $ 199,129 $ 192,783 $ 199,287 $ 200,670 $ 197,472 $ 391,912 $ 399,536

Interest expense 18,947 19,994 22,351 24,739 26,902 38,941 61,436

Net interest revenue 180,182 172,789 176,936 175,931 170,570 352,971 338,100

Provision for credit losses 11,500 - 5,794 16,000 20,000 11,500 67,250

Net interest revenue, after provision

for credit losses 168,682 172,789 171,142 159,931 150,570 341,471 270,850

Noninterest revenue 101,943 87,936 78,826 89,924 91,258 189,879 167,754

Noninterest expense 173,984 155,823 167,117 154,505 162,504 329,807 329,260

Income before income taxes 96,641 104,902 82,851 95,350 79,324 201,543 109,344

Income tax expense 21,102 23,347 14,046 21,525 18,164 44,449 23,923

Net income $ 75,539 $ 81,555 $ 68,805 $ 73,825 $ 61,160 $ 157,094 $ 85,421

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

Net income available to common shareholders $ 73,167 $ 79,183 $ 66,433 $ 71,453 $ 58,788 $ 152,350 $ 80,677

Balance Sheet - Period End Balances

Total assets $ 27,612,365 $ 25,802,497 $ 24,081,194 $ 23,555,422 $ 23,236,176 $ 27,612,365 $ 23,236,176

Total earning assets 25,129,873 23,542,657 21,792,725 21,340,371 21,119,073 25,129,873 21,119,073

Total securities 9,084,111 7,640,268 6,231,006 5,659,785 4,973,171 9,084,111 4,973,171

Loans and leases, net of unearned income 15,004,039 15,038,808 15,022,479 15,327,735 15,427,421 15,004,039 15,427,421

Allowance for credit losses 265,720 241,117 244,422 250,624 237,025 265,720 237,025

Net book value of acquired loans (included in loans and leases above) 1,646,031 1,023,252 1,160,267 1,320,671 1,510,008 1,646,031 1,510,008

Paycheck protection program (PPP) loans (included in loans and leases above) 167,144 1,146,000 975,421 1,212,246 1,192,715 167,144 1,192,715

Remaining loan mark on acquired loans 13,037 10,069 13,886 16,198 19,977 13,037 19,977

Total deposits 22,838,486 21,173,186 19,846,441 19,412,979 19,179,486 22,838,486 19,179,486

Total deposits and securities sold under agreement to repurchase 23,521,621 21,833,671 20,484,156 20,024,434 19,849,502 23,521,621 19,849,502

Long-term debt 4,189 4,295 4,402 4,508 4,615 4,189 4,615

Junior subordinated debt securities 307,601 297,425 297,250 297,074 296,898 307,601 296,898

Total shareholders' equity 3,069,574 2,825,198 2,822,477 2,782,539 2,732,687 3,069,574 2,732,687

Common shareholders' equity 2,902,581 2,658,205 2,655,484 2,615,546 2,565,694 2,902,581 2,565,694

Balance Sheet - Average Balances

Total assets $ 26,666,296 $ 24,545,560 $ 23,660,503 $ 23,318,877 $ 22,707,686 $ 25,611,786 $ 21,948,661

Total earning assets 24,211,759 22,346,075 21,497,938 21,241,896 20,594,889 23,284,071 19,854,169

Total securities 8,067,109 6,606,027 5,820,425 5,309,982 4,437,614 7,340,604 4,449,456

Loans and leases, net of unearned income 15,470,539 15,029,076 15,219,402 15,369,684 15,114,732 15,251,027 14,670,759

PPP loans (included in loans and leases above) 973,036 1,062,423 1,139,959 1,207,097 975,029 1,017,483 487,515

Total deposits 22,385,883 20,472,080 19,600,863 19,258,930 18,454,472 21,434,268 17,679,851

Total deposits and securities sold under agreement to repurchase 23,092,969 21,123,774 20,272,881 19,940,330 19,098,599 22,113,811 18,272,768

Long-term debt 4,714 4,378 4,488 4,592 4,699 4,547 4,750

Junior subordinated debt securities 304,056 297,318 297,145 296,969 296,793 300,706 296,705

Total shareholders' equity 2,954,834 2,813,001 2,774,589 2,729,870 2,738,434 2,884,309 2,698,567

Common shareholders' equity 2,787,841 2,646,008 2,607,596 2,562,877 2,571,441 2,717,316 2,531,560

Nonperforming Assets:

Non-accrual loans and leases $ 61,664 $ 73,142 $ 96,378 $ 122,108 $ 126,753 $ 61,664 $ 126,753

Loans and leases 90+ days past due, still accruing 15,386 21,208 14,320 17,641 9,877 15,386 9,877

Restructured loans and leases, still accruing 7,368 6,971 10,475 11,154 11,575 7,368 11,575

Non-performing loans (NPLs) 84,418 101,321 121,173 150,903 148,205 84,418 148,205

Other real estate owned 17,333 9,351 11,395 6,397 7,164 17,333 7,164

Non-performing assets (NPAs) $ 101,751 $ 110,672 $ 132,568 $ 157,300 $ 155,369 $ 101,751 $ 155,369

Financial Ratios and Other Data:

Return on average assets 1.14% 1.35% 1.16% 1.26% 1.08% 1.24% 0.78%

Operating return on average assets-excluding MSR* 1.40% 1.28% 1.23% 1.26% 1.12% 1.34% 0.92%

Return on average shareholders' equity 10.25% 11.76% 9.87% 10.76% 8.98% 10.98% 6.37%

Operating return on average shareholders' equity-excluding MSR* 12.62% 11.13% 10.49% 10.72% 9.29% 11.90% 7.46%

Return on average common shareholders' equity 10.53% 12.14% 10.14% 11.09% 9.19% 11.31% 6.41%

Operating return on average common shareholders' equity-excluding MSR* 13.04% 11.47% 10.80% 11.05% 9.53% 12.28% 7.57%

Return on average tangible equity* 15.21% 17.35% 14.66% 16.08% 13.43% 16.25% 9.58%

Operating return on average tangible equity-excluding MSR* 18.73% 16.42% 15.58% 16.03% 13.89% 17.61% 11.22%

Return on average tangible common equity* 16.08% 18.46% 15.54% 17.13% 14.20% 17.24% 9.97%

Operating return on average tangible common equity-excluding MSR* 19.92% 17.44% 16.56% 17.08% 14.71% 18.72% 11.78%

Pre-tax pre-provision net revenue to total average assets* 1.80% 1.64% 1.59% 1.89% 1.81% 1.72% 1.79%

Noninterest income to average assets 1.53% 1.45% 1.33% 1.53% 1.62% 1.50% 1.54%

Noninterest expense to average assets 2.62% 2.57% 2.81% 2.64% 2.88% 2.60% 3.02%

Net interest margin-fully taxable equivalent 2.99% 3.15% 3.29% 3.31% 3.35% 3.07% 3.44%

Net interest margin-fully taxable equivalent, excluding net accretion

on acquired loans and leases 2.94% 3.08% 3.24% 3.23% 3.30% 3.01% 3.38%

Net interest rate spread 2.83% 2.97% 3.07% 3.06% 3.08% 2.90% 3.15%

Efficiency ratio (tax equivalent)* 61.55% 59.64% 65.16% 57.98% 61.89% 60.63% 64.91%

Operating efficiency ratio-excluding MSR (tax equivalent)* 57.66% 60.74% 62.87% 58.03% 61.16% 59.11% 62.26%

Loan/deposit ratio 65.70% 71.03% 75.69% 78.96% 80.44% 65.70% 80.44%

Price to earnings multiple (close) 10.08 12.07 12.88 9.18 11.15 10.08 11.15

Market value to common book value 106.01% 125.39% 105.98% 75.99% 90.91% 106.01% 90.91%

Market value to common book value (avg) 113.49% 119.10% 97.56% 83.75% 84.79% 114.43% 95.14%

Market value to common tangible book value 162.77% 190.14% 161.00% 116.01% 140.44% 162.77% 140.44%

Market value to common tangible book value (avg) 174.26% 180.60% 148.21% 127.86% 130.99% 175.70% 146.99%

Employee FTE 4,835 4,546 4,596 4,691 4,742 4,835 4,742

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

BancorpSouth Bank

Consolidated Balance Sheets

(Unaudited)

Jun-21 Mar-21 Dec-20 Sep-20 Jun-20

(Dollars in thousands)

Assets

Cash and due from $ $ $ $ $ banks 331,873 263,289 284,095 306,164 240,354

Interest bearingdeposits with otherbanks

and Federal funds 629,390 336,253 133,273 39,782 318,615sold

Available-for-salesecurities, at fair 9,084,111 7,640,268 6,231,006 5,659,785 4,973,171value

Loans and leases* 15,023,228 15,056,559 15,039,239 15,344,006 15,444,794

Less: Unearned 19,189 17,751 16,760 16,271 17,373income

Allowance for credit 265,720 241,117 244,422 250,624 237,025losses

Net loans and leases 14,738,319 14,797,691 14,778,057 15,077,111 15,190,396

Loans held for sale 403,046 518,352 397,076 304,215 391,051

Premises and 533,276 508,508 508,147 508,149 504,748equipment, net

Accrued interest 98,575 106,355 106,318 110,185 101,321receivable

Goodwill 957,474 851,612 851,612 847,531 847,984

Other identifiable 54,659 53,581 55,899 54,757 56,989intangibles

Bank owned life 355,660 335,707 333,264 331,799 329,167insurance

Other real estate 17,333 9,351 11,395 6,397 7,164owned

Other assets 408,649 381,530 391,052 309,547 275,216

Total Assets $ $ $ $ $ 27,612,365 25,802,497 24,081,194 23,555,422 23,236,176

Liabilities

Deposits:

Demand: $ $ $ $ $ Noninterest bearing 7,619,308 6,990,880 6,341,457 6,336,792 6,385,370

9,671,662 9,067,373 8,524,010 8,170,402 7,907,637Interest bearing

Savings 2,939,958 2,678,276 2,452,059 2,325,980 2,234,853

Other time 2,607,558 2,436,657 2,528,915 2,579,805 2,651,626

Total deposits 22,838,486 21,173,186 19,846,441 19,412,979 19,179,486

Securities soldunder agreement to 683,135 660,485 637,715 611,455 670,016repurchase

Federal fundspurchased

and other - - - 95,217 220short-term borrowing

Accrued interest 8,718 11,879 10,885 15,286 13,476payable

Junior subordinated 307,601 297,425 297,250 297,074 296,898debt securities

Long-term debt 4,189 4,295 4,402 4,508 4,615

Other liabilities 700,662 830,029 462,024 336,364 338,778

Total Liabilities 24,542,791 22,977,299 21,258,717 20,772,883 20,503,489

Shareholders' Equity

Preferred stock 166,993 166,993 166,993 166,993 166,993

Common stock 271,536 256,562 256,404 256,396 256,416

Capital surplus 730,294 563,481 565,187 565,635 561,541

Accumulated othercomprehensive (loss) (34,575) (43,459) 11,923 18,490 25,191income

Retained earnings 1,935,326 1,881,621 1,821,970 1,775,025 1,722,546

Total Shareholders' 3,069,574 2,825,198 2,822,477 2,782,539 2,732,687Equity

Total Liabilities & $ $ $ $ $ Shareholders' Equity 27,612,365 25,802,497 24,081,194 23,555,422 23,236,176

*Includes $167.1 million, $1.146 billion, $975.4 million, $1.212 billion and$1.193 billion in PPP loans at June 30, 2021, March 31, 2021, December 31,2020, September 30, 2020 and June 30, 2020, respectively.

BancorpSouth Bank

Consolidated Average Balance Sheets

(Unaudited)

Jun-21 Mar-21 Dec-20 Sep-20 Jun-20

(Dollars in thousands)

Assets

Cash and due from banks $ 365,647 $ 261,519 $ 247,799 $ 232,421 $ 229,334

Interest bearing deposits with other banks

and Federal funds sold 302,845 412,313 171,650 257,057 760,789

Available-for-sale securities, at fair value 8,067,109 6,606,027 5,820,425 5,309,982 4,437,614

Loans and leases* 15,488,980 15,045,837 15,235,827 15,386,721 15,132,600

Less: Unearned income 18,441 16,761 16,425 17,037 17,868

Allowance for credit losses 245,095 242,935 247,049 236,536 217,508

Net loans and leases 15,225,444 14,786,141 14,972,353 15,133,148 14,897,224

Loans held for sale 361,999 289,755 277,600 296,352 261,377

Premises and equipment, net 526,960 508,551 508,053 507,190 499,767

Accrued interest receivable 100,357 102,190 105,513 104,435 137,456

Goodwill 910,448 851,612 852,472 847,744 848,160

Other identifiable intangibles 52,564 54,876 54,858 56,045 58,280

Bank owned life insurance 348,378 333,837 332,543 330,642 328,037

Other real estate owned 12,293 11,043 14,872 7,754 8,410

Other assets 392,252 327,696 302,365 236,107 241,238

Total Assets $ 26,666,296 $ 24,545,560 $ 23,660,503 $ 23,318,877 $ 22,707,686

Liabilities

Deposits:

Demand: Noninterest bearing $ 7,367,832 $ 6,484,703 $ 6,391,006 $ 6,340,942 $ 5,942,570

Interest bearing 9,598,550 8,956,420 8,268,528 8,022,755 7,674,479

Savings 2,851,113 2,550,095 2,386,034 2,280,860 2,152,092

Other time 2,568,388 2,480,862 2,555,295 2,614,373 2,685,331

Total deposits 22,385,883 20,472,080 19,600,863 19,258,930 18,454,472

Securities sold under agreement to repurchase 707,086 651,694 672,018 681,400 644,127

Federal funds purchased

and other short-term borrowing 3,901 1,500 3,893 36,696 269,121

Accrued interest payable 11,169 11,607 14,175 15,589 16,268

Junior subordinated debt securities 304,056 297,318 297,145 296,969 296,793

Long-term debt 4,714 4,378 4,488 4,592 4,699

Other liabilities 294,653 293,982 293,332 294,831 283,772

Total Liabilities 23,711,462 21,732,559 20,885,914 20,589,007 19,969,252

Shareholders' Equity

Preferred stock 166,993 166,993 166,993 166,993 166,993

Common stock 266,676 256,536 256,422 256,412 256,515

Capital surplus 674,949 563,529 568,343 563,267 559,737

Accumulated other comprehensive (loss) income (30,614) (5,090) 12,432 24,758 23,016

Retained earnings 1,876,830 1,831,033 1,770,399 1,718,440 1,732,173

Total Shareholders' Equity 2,954,834 2,813,001 2,774,589 2,729,870 2,738,434

Total Liabilities & Shareholders' Equity $ 26,666,296 $ 24,545,560 $ 23,660,503 $ 23,318,877 $ 22,707,686

*Includes $973.0 million, $1.062 billion, $1.140 billion, $1.207 billion and$975.0 million in PPP loans for the quarter ended June 30, 2021, March 31,2021, December 31, 2020, September 30, 2020 and June 30, 2020, respectively.

BancorpSouth Bank

Consolidated Condensed Statements of Income

(Dollars in thousands, except per share data)

(Unaudited)

Quarter Ended Year to Date

Jun-21 Mar-21 Dec-20 Sep-20 Jun-20 Jun-21 Jun-20

INTEREST REVENUE:

Loans and leases $ 171,305 $ 169,195 $ 174,072 $ 175,810 $ 173,164 $ 340,500 $ 350,183

Deposits with other banks 97 108 50 74 207 205 946

Federal funds sold, securities purchased

under agreement to resell, FHLB and

other equity investments 28 6 6 52 178 34 493

Available-for-sale securities:

Taxable 23,983 21,192 21,895 21,280 20,783 45,175 42,291

Tax-exempt 676 687 760 986 1,178 1,363 2,238

Loans held for sale 3,040 1,595 2,504 2,468 1,962 4,635 3,385

Total interest revenue 199,129 192,783 199,287 200,670 197,472 391,912 399,536

INTEREST EXPENSE:

Interest bearing demand 8,247 8,796 9,766 10,773 11,631 17,043 27,153

Savings 626 700 872 1,012 943 1,326 2,233

Other time 6,428 6,966 8,189 9,287 10,296 13,394 21,464

Federal funds purchased and securities sold

under agreement to repurchase 206 203 276 279 291 409 1,727

Short-term and long-term debt 44 45 47 49 477 89 2,334

Junior subordinated debt 3,387 3,269 3,201 3,338 3,263 6,656 6,524

Other 9 15 - 1 1 24 1

Total interest expense 18,947 19,994 22,351 24,739 26,902 38,941 61,436

Net interest revenue 180,182 172,789 176,936 175,931 170,570 352,971 338,100

Provision for credit losses 11,500 - 5,794 16,000 20,000 11,500 67,250

Net interest revenue, after provision for

credit losses 168,682 172,789 171,142 159,931 150,570 341,471 270,850

NONINTEREST REVENUE:

Mortgage banking 9,105 25,310 20,129 27,097 29,557 34,415 39,027

Credit card, debit card and merchant fees 11,589 9,659 10,053 9,938 9,080 21,248 18,256

Deposit service charges 8,849 8,477 9,708 8,892 7,647 17,326 19,329

Security gains(losses), net 96 82 63 18 62 178 (23)

Insurance commissions 36,106 30,667 29,815 32,750 33,118 66,773 62,721

Wealth management 7,543 8,465 6,751 6,471 6,421 16,008 12,991

Gain on sale of PPP loans 21,572 - - - - 21,572 -

Other 7,083 5,276 2,307 4,758 5,373 12,359 15,453

Total noninterest revenue 101,943 87,936 78,826 89,924 91,258 189,879 167,754

NONINTEREST EXPENSE:

Salaries and employee benefits 108,188 101,060 97,215 104,219 108,103 209,248 216,375

Occupancy, net of rental income 13,187 12,814 13,004 13,053 12,890 26,001 25,598

Equipment 4,967 4,564 4,756 4,519 4,762 9,531 9,411

Deposit insurance assessments 1,638 1,455 1,696 1,522 1,962 3,093 3,508

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

Other 46,004 35,930 44,600 31,192 34,787 81,934 74,368

Total noninterest expense 173,984 155,823 167,117 154,505 162,504 329,807 329,260

Income before income taxes 96,641 104,902 82,851 95,350 79,324 201,543 109,344

Income tax expense 21,102 23,347 14,046 21,525 18,164 44,449 23,923

Net income $ 75,539 $ 81,555 $ 68,805 $ 73,825 $ 61,160 $ 157,094 $ 85,421

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

Net income available to common shareholders $ 73,167 $ 79,183 $ 66,433 $ 71,453 $ 58,788 $ 152,350 $ 80,677

Net income per common share: Basic $ 0.69 $ 0.77 $ 0.65 $ 0.70 $ 0.57 $ 1.46 $ 0.78

Diluted $ 0.69 $ 0.77 $ 0.65 $ 0.69 $ 0.57 $ 1.46 $ 0.78

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

Quarter Ended

Jun-21 Mar-21 Dec-20 Sep-20 Jun-20

LOAN AND LEASE PORTFOLIO:

Commercial and industrial

Commercial and industrial-non real estate 2,056,034 2,865,706 2,673,429 2,937,608 3,038,957

Commercial and industrial-owner occupied 2,273,433 2,260,456 2,281,127 2,297,008 2,296,287

Total commercial and industrial 4,329,467 5,126,162 4,954,556 5,234,616 5,335,244

Commercial real estate

Agricultural 350,067 337,710 317,994 333,839 333,615

Construction, acquisition and development 1,926,421 1,707,800 1,728,682 1,700,030 1,658,678

Commercial real estate 3,323,883 3,127,510 3,211,434 3,229,959 3,323,744

Total commercial real estate 5,600,371 5,173,020 5,258,110 5,263,828 5,316,037

Consumer

Consumer mortgages 3,991,790 3,700,076 3,726,241 3,704,490 3,646,168

Home equity 625,365 608,924 630,097 658,708 655,543

Credit cards 84,699 81,499 89,077 85,760 86,592

Total consumer 4,701,854 4,390,499 4,445,415 4,448,958 4,388,303

All other 372,347 349,127 364,398 380,333 387,837

Total loans $ 15,004,039 $ 15,038,808 $ 15,022,479 $ 15,327,735 $ 15,427,421

ALLOWANCE FOR CREDIT LOSSES:

Balance, beginning of period $ 241,117 $ 244,422 $ 250,624 $ 237,025 $ 218,199

Loans and leases charged-off:

Commercial and industrial

Commercial and industrial-non real estate (1,411) (2,269) (4,343) (560) (1,506)

Commercial and industrial-owner occupied (471) (677) (1,168) (441) (13)

Total commercial and industrial (1,882) (2,946) (5,511) (1,001) (1,519)

Commercial real estate

Agricultural - (98) (155) - (21)

Construction, acquisition and development (125) (807) (1,773) - (9)

Commercial real estate (498) (478) (3,134) (738) -

Total commercial real estate (623) (1,383) (5,062) (738) (30)

Consumer

Consumer mortgages (421) (293) (731) (81) (124)

Home equity (64) (50) (395) (41) (162)

Credit cards (476) (733) (458) (682) (703)

Total consumer (961) (1,076) (1,584) (804) (989)

All other (396) (501) (875) (599) (396)

Total loans charged-off (3,862) (5,906) (13,032) (3,142) (2,934)

Recoveries:

Commercial and industrial

Commercial and industrial-non real estate 2,318 1,031 779 294 277

Commercial and industrial-owner occupied 735 62 37 163 136

Total commercial and industrial 3,053 1,093 816 457 413

Commercial real estate

Agricultural 8 86 24 3 6

Construction, acquisition and development 1,265 53 73 55 172

Commercial real estate 26 56 45 209 50

Total commercial real estate 1,299 195 142 267 228

Consumer

Consumer mortgages 510 403 230 352 345

Home equity 201 220 151 132 259

Credit cards 254 297 211 270 195

Total consumer 965 920 592 754 799

All other 345 393 280 263 320

Total recoveries 5,662 2,601 1,830 1,741 1,760

Net recoveries(charge-offs) 1,800 (3,305) (11,202) (1,401) (1,174)

Initial allowance on loans purchased with credit deterioration 12,803 - - - -

Provision:

Initial provision for loans acquired during the quarter 11,500 - - - -

Provision for credit losses related to loans and leases (1,500) - 5,000 15,000 20,000

Total provision for loans and leases 10,000 - 5,000 15,000 20,000

Balance, end of period $ 265,720 $ 241,117 $ 244,422 $ 250,624 $ 237,025

Average loans for period $ 15,470,539 $ 15,029,076 $ 15,219,402 $ 15,369,684 $ 15,114,732

Ratio:

Net (recoveries)charge-offs to average loans (annualized) (0.05%) 0.09% 0.29% 0.04% 0.03%

RESERVE FOR UNFUNDED COMMITMENTS*

Balance, beginning of period $ 7,044 $ 7,044 $ 6,250 $ 5,250 $ 5,250

Provision for credit losses for unfunded commitments 1,500 - 794 1,000 -

Balance, end of period $ 8,544 $ 7,044 $ 7,044 $ 6,250 $ 5,250

*The Reserve for Unfunded Commitments is classified in other liabilities on thebalance sheet.

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

Quarter Ended

Jun-21 Mar-21 Dec-20 Sep-20 Jun-20

BXS ORIGINATED LOANS AND LEASES:

Loans and leases charged off:

Commercial and industrial

Commercial and industrial-non real estate $ (1,108) $ (1,971) $ (1,991) $ (490) $ (420)

Commercial and industrial-owner occupied (471) (187) (303) (434) (13)

Total commercial and industrial (1,579) (2,158) (2,294) (924) (433)

Commercial real estate

Agricultural - (94) (124) - -

Construction, acquisition and development (113) (344) (1,709) - -

Commercial real estate (110) (27) (1,704) (155) -

Total real estate (223) (465) (3,537) (155) -

Consumer

Consumer mortgages (398) (181) (537) (70) (113)

Home equity (64) (50) (395) (41) (162)

Credit cards (476) (733) (458) (682) (703)

Total consumer (938) (964) (1,390) (793) (978)

All other (315) (399) (698) (459) (288)

Total loans charged off (3,055) (3,986) (7,919) (2,331) (1,699)

Recoveries:

Commercial and industrial

Commercial and industrial-non real estate 1,014 387 645 231 210

Commercial and industrial-owner occupied 325 61 27 163 136

Total commercial and industrial 1,339 448 672 394 346

Commercial real estate

Agricultural (65) 5 23 3 5

Construction, acquisition and development 1,184 51 73 55 170

Commercial real estate (403) 36 45 208 50

Total real estate 716 92 141 266 225

Consumer

Consumer mortgages 359 392 221 350 343

Home equity 199 219 149 130 258

Credit cards 254 297 211 270 195

Total consumer 812 908 581 750 796

All other 287 325 249 235 275

Total recoveries 3,154 1,773 1,643 1,645 1,642

Net recoveries/(charge-offs) $ 99 $ (2,213) $ (6,276) $ (686) $ (57)

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

Quarter Ended

Jun-21 Mar-21 Dec-20 Sep-20 Jun-20

ACQUIRED LOANS AND LEASES:

Loans and leases charged off:

Commercial and industrial

Commercial and industrial-non real estate $ (303) $ (298) $ (2,352) $ (70) $ (1,086)

Commercial and industrial-owner occupied - (490) (865) (7) -

Total commercial and industrial (303) (788) (3,217) (77) (1,086)

Commercial real estate

Agricultural - (4) (31) - (21)

Construction, acquisition and development (12) (463) (64) - (9)

Commercial real estate (388) (451) (1,430) (583) -

Total real estate (400) (918) (1,525) (583) (30)

Consumer

Consumer mortgages (23) (112) (194) (11) (11)

Home equity - - - - -

Credit cards - - - - -

Total consumer (23) (112) (194) (11) (11)

All other (81) (102) (177) (140) (108)

Total loans charged off (807) (1,920) (5,113) (811) (1,235)

Recoveries:

Commercial and industrial

Commercial and industrial-non real estate 1,304 644 134 63 67

Commercial and industrial-owner occupied 410 1 10 - -

Total commercial and industrial 1,714 645 144 63 67

Commercial real estate

Agricultural 73 81 1 - 1

Construction, acquisition and development 81 2 - - 2

Commercial real estate 429 20 - 1 -

Total real estate 583 103 1 1 3

Consumer

Consumer mortgages 151 11 9 2 2

Home equity 2 1 2 2 1

Credit cards - - - - -

Total consumer 153 12 11 4 3

All other 58 68 31 28 45

Total recoveries 2,508 828 187 96 118

Net recoveries/(charge-offs) $ 1,701 $ (1,092) $ (4,926) $ (715) $ (1,117)

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

Quarter Ended

Jun-21 Mar-21 Dec-20 Sep-20 Jun-20

NON-PERFORMING ASSETS

NON-PERFORMING LOANS AND LEASES:

Nonaccrual Loans and Leases

Commercial and industrial

Commercial and industrial-non real estate $ 10,485 $ 9,703 $ 12,768 $ 17,936 $ 16,124

Commercial and industrial-owner occupied 11,872 15,019 15,783 18,343 16,745

Total commercial and industrial 22,357 24,722 28,551 36,279 32,869

Commercial real estate

Agricultural 1,284 2,293 5,013 5,907 5,244

Construction, acquisition and development 2,582 8,494 9,738 10,434 9,715

Commercial real estate 13,483 12,838 16,249 32,554 45,047

Total commercial real estate 17,349 23,625 31,000 48,895 60,006

Consumer

Consumer mortgages 20,532 23,535 32,951 32,872 30,672

Home equity 686 847 2,657 3,325 2,584

Credit cards 122 131 173 144 90

Total consumer 21,340 24,513 35,781 36,341 33,346

All other 618 282 1,046 593 532

Total nonaccrual loans and leases $ 61,664 $ 73,142 $ 96,378 $ 122,108 $ 126,753

Loans and Leases 90+ Days Past Due, Still Accruing: 15,386 21,208 14,320 17,641 9,877

Restructured Loans and Leases, Still Accruing 7,368 6,971 10,475 11,154 11,575

Total non-performing loans and leases $ 84,418 $ 101,321 $ 121,173 $ 150,903 $ 148,205

OTHER REAL ESTATE OWNED: 17,333 9,351 11,395 6,397 7,164

Total Non-performing Assets $ 101,751 $ 110,672 $ 132,568 $ 157,300 $ 155,369

BXS originated assets $ 81,039 $ 85,266 $ 97,025 $ 109,418 $ 94,155

Acquired assets 20,712 25,406 35,543 47,882 61,214

Total Non-performing Assets $ 101,751 $ 110,672 $ 132,568 $ 157,300 $ 155,369

Additions to Nonaccrual Loans and Leases During the Quarter $ 16,005 $ 10,029 $ 11,087 $ 19,973 $ 36,619

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

BXS originated loans $ 36,748 $ 34,929 $ 40,424 $ 42,978 $ 35,002

Acquired loans 10,701 2,798 6,048 5,694 10,450

Total Loans and Leases 30-89 days past due, still accruing $ 47,449 $ 37,727 $ 46,472 $ 48,672 $ 45,452

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)

June 30, 2021

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 $ 2,005,765 $ - $ 40,286 $ 171 $ - $ 1,885 $ 7,927 $ 2,056,034

Commercial and industrial-owner occupied 2,193,141 4,000 63,638 - - 7,452 5,202 2,273,433

Total commercial and industrial 4,198,906 4,000 103,924 171 - 9,337 13,129 4,329,467

Commercial real estate

Agricultural 341,430 - 6,326 - - - 2,311 350,067

Construction, acquisition and development 1,879,040 - 40,498 - - 714 6,169 1,926,421

Commercial real estate 3,150,789 - 159,066 - - 9,316 4,712 3,323,883

Total commercial real estate 5,371,259 - 205,890 - - 10,030 13,192 5,600,371

Consumer

Consumer mortgages 3,926,705 - 63,645 - - 1,256 184 3,991,790

Home equity 619,269 - 6,096 - - - - 625,365

Credit cards 84,699 - - - - - - 84,699

Total consumer 4,630,673 - 69,741 - - 1,256 184 4,701,854

All other 362,556 - 9,726 - - - 65 372,347

Total loans $ 14,563,394 $ 4,000 $ 389,281 $ 171 $ - $ 20,623 $ 26,570 $ 15,004,039

BXS originated loans $ 13,007,886 $ 4,000 $ 219,242 $ 171 $ - $ 13,989 $ - $ 13,245,288

Acquired loans* 1,555,508 - 170,039 - - 6,634 26,570 1,758,751

Total Loans $ 14,563,394 $ 4,000 $ 389,281 $ 171 $ - $ 20,623 $ 26,570 $ 15,004,039

March 31, 2021

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 $ 2,825,297 $ - $ 30,526 $ 171 $ - $ 1,909 $ 7,803 $ 2,865,706

Commercial and industrial-owner occupied 2,184,516 3,471 58,754 - - 11,086 2,629 2,260,456

Total commercial and industrial 5,009,813 3,471 89,280 171 - 12,995 10,432 5,126,162

Commercial real estate

Agricultural 331,802 - 2,877 - - 705 2,326 337,710

Construction, acquisition and development 1,659,787 1,534 38,665 - - 2,448 5,366 1,707,800

Commercial real estate 2,987,075 - 127,147 - - 9,642 3,646 3,127,510

Total commercial real estate 4,978,664 1,534 168,689 - - 12,795 11,338 5,173,020

Consumer

Consumer mortgages 3,629,182 - 67,881 - - 2,825 188 3,700,076

Home equity 603,768 - 5,156 - - - - 608,924

Credit cards 81,499 - - - - - - 81,499

Total consumer 4,314,449 - 73,037 - - 2,825 188 4,390,499

All other 343,656 - 5,404 - - - 67 349,127

Total loans $ 14,646,582 $ 5,005 $ 336,410 $ 171 $ - $ 28,615 $ 22,025 $ 15,038,808

BXS originated loans $ 13,635,053 $ 5,005 $ 252,140 $ 171 $ - $ 18,188 $ - $ 13,910,557

Acquired loans* 1,011,529 - 84,270 - - 10,427 22,025 1,128,251

Total Loans $ 14,646,582 $ 5,005 $ 336,410 $ 171 $ - $ 28,615 $ 22,025 $ 15,038,808

*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-21 Mar-21 Dec-20 Sep-20 Jun-20

LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE:

Pass $ 14,563,394 $ 14,646,582 $ 14,602,079 $ 14,877,943 $ 14,985,673

Special Mention 4,000 5,005 8,736 - 4,264

Substandard 389,281 336,410 358,988 372,483 350,264

Doubtful 171 171 172 178 179

Loss - - - - -

Impaired 20,623 28,615 29,545 49,818 57,406

Purchased Credit Deteriorated (Loss) 26,570 22,025 22,959 27,313 29,635

Total $ 15,004,039 $ 15,038,808 $ 15,022,479 $ 15,327,735 $ 15,427,421

BXS ORIGINATED LOAN PORTFOLIO BY INTERNALLY

ASSIGNED GRADE:

Pass $ 13,007,886 $ 13,635,053 $ 13,459,529 $ 13,592,460 $ 13,516,292

Special Mention 4,000 5,005 8,736 - 2,741

Substandard 219,242 252,140 259,682 252,875 231,687

Doubtful 171 171 172 178 179

Loss - - - - -

Impaired 13,989 18,188 17,520 30,909 28,288

Purchased Credit Deteriorated (Loss) - - - - -

Total $ 13,245,288 $ 13,910,557 $ 13,745,639 $ 13,876,422 $ 13,779,187

ACQUIRED LOAN PORTFOLIO BY INTERNALLY

ASSIGNED GRADE:

Pass $ 1,555,508 $ 1,011,529 $ 1,142,550 $ 1,285,483 $ 1,469,381

Special Mention - - - - 1,523

Substandard 170,039 84,270 99,306 119,608 118,577

Doubtful - - - - -

Loss - - - - -

Impaired 6,634 10,427 12,025 18,909 29,118

Purchased Credit Deteriorated (Loss) 26,570 22,025 22,959 27,313 29,635

Total $ 1,758,751 $ 1,128,251 $ 1,276,840 $ 1,451,313 $ 1,648,234

BancorpSouth Bank

Geographical Information

(Dollars in thousands)

(Unaudited)

June 30, 2021

Alabama Tennessee

and Florida and

Panhandle Arkansas Louisiana Mississippi Missouri Georgia Texas Other Total

LOAN AND LEASE PORTFOLIO:

Commercial and industrial

Commercial and industrial-non real estate $ 200,136 $ 140,703 $ 189,328 $ 438,063 $ 70,107 $ 124,418 $ 886,927 $ 6,352 $ 2,056,034

Commercial and industrial-owner occupied 304,416 160,747 217,698 579,772 63,502 119,129 827,525 644 2,273,433

Total commercial and industrial 504,552 301,450 407,026 1,017,835 133,609 243,547 1,714,452 6,996 4,329,467

Commercial real estate

Agricultural 32,020 68,507 22,108 66,530 6,920 12,187 140,762 1,033 350,067

Construction, acquisition and development 241,404 56,528 70,949 359,989 20,030 92,610 1,084,692 219 1,926,421

Commercial real estate 476,140 313,530 236,752 632,114 202,824 230,910 1,229,165 2,448 3,323,883

Total commercial real estate 749,564 438,565 329,809 1,058,633 229,774 335,707 2,454,619 3,700 5,600,371

Consumer

Consumer mortgages 703,186 322,580 343,656 815,369 109,712 356,234 1,305,445 35,608 3,991,790

Home equity 128,529 43,435 70,696 201,327 16,118 126,052 39,208 - 625,365

Credit cards - - - - - - - 84,699 84,699

Total consumer 831,715 366,015 414,352 1,016,696 125,830 482,286 1,344,653 120,307 4,701,854

All other 64,976 31,056 32,756 122,687 1,750 20,578 98,232 312 372,347

Total loans $ 2,150,807 $ 1,137,086 $ 1,183,943 $ 3,215,851 $ 490,963 $ 1,082,118 $ 5,611,956 $ 131,315 $ 15,004,039

Loan growth, excluding loans acquired during

the quarter (annualized) 5.29% (30.14%) (48.57%) (28.97%) (11.70%) (39.49%) (16.63%) (69.02%) (22.86%)

Loan growth, excluding PPP loans (annualized) 101.71% (6.60%) (5.03%) (5.16%) 5.60% 25.94% 36.65% (13.45%) 25.18%

NON-PERFORMING LOANS AND LEASES:

Commercial and industrial

Commercial and industrial-non real estate $ 525 $ 689 $ 1,369 $ 973 $ 936 $ 314 $ 6,178 $ - $ 10,984

Commercial and industrial-owner occupied 571 827 1,067 1,076 163 - 10,758 - 14,462

Total commercial and industrial 1,096 1,516 2,436 2,049 1,099 314 16,936 - 25,446

Commercial real estate

Agricultural 63 219 - 964 - - 98 - 1,344

Construction, acquisition and development 119 630 72 25 - 191 1,676 - 2,713

Commercial real estate 2,756 171 1,741 872 - - 8,762 - 14,302

Total commercial real estate 2,938 1,020 1,813 1,861 - 191 10,536 - 18,359

Consumer

Consumer mortgages 9,012 3,438 3,764 9,050 1,454 3,167 6,649 1,184 37,718

Home equity 244 50 298 270 87 233 132 - 1,314

Credit cards - - - - - - - 771 771

Total consumer 9,256 3,488 4,062 9,320 1,541 3,400 6,781 1,955 39,803

All other 121 2 45 190 - 48 404 - 810

Total loans $ 13,411 $ 6,026 $ 8,356 $ 13,420 $ 2,640 $ 3,953 $ 34,657 $ 1,955 $ 84,418

NON-PERFORMING LOANS AND LEASES

AS A PERCENTAGE OF OUTSTANDING:

Commercial and industrial

Commercial and industrial-non real estate 0.26% 0.49% 0.72% 0.22% 1.34% 0.25% 0.70% 0.00% 0.53%

Commercial and industrial-owner occupied 0.19% 0.51% 0.49% 0.19% 0.26% 0.00% 1.30% 0.00% 0.64%

Total commercial and industrial 0.22% 0.50% 0.60% 0.20% 0.82% 0.13% 0.99% 0.00% 0.59%

Commercial real estate

Agricultural 0.20% 0.32% 0.00% 1.45% 0.00% 0.00% 0.07% 0.00% 0.38%

Construction, acquisition and development 0.05% 1.11% 0.10% 0.01% 0.00% 0.21% 0.15% 0.00% 0.14%

Commercial real estate 0.58% 0.05% 0.74% 0.14% 0.00% 0.00% 0.71% 0.00% 0.43%

Total commercial real estate 0.39% 0.23% 0.55% 0.18% 0.00% 0.06% 0.43% 0.00% 0.33%

Consumer

Consumer mortgages 1.28% 1.07% 1.10% 1.11% 1.33% 0.89% 0.51% 3.33% 0.94%

Home equity 0.19% 0.12% 0.42% 0.13% 0.54% 0.18% 0.34% N/A 0.21%

Credit cards N/A N/A N/A N/A N/A N/A N/A 0.91% 0.91%

Total consumer 1.11% 0.95% 0.98% 0.92% 1.22% 0.70% 0.50% 1.63% 0.85%

All other 0.19% 0.01% 0.14% 0.15% 0.00% 0.23% 0.41% 0.00% 0.22%

Total loans 0.62% 0.53% 0.71% 0.42% 0.54% 0.37% 0.62% 1.49% 0.56%

BancorpSouth Bank

Noninterest Revenue and Expense

(Dollars in thousands)

(Unaudited)

Quarter Ended Year to Date

Jun-21 Mar-21 Dec-20 Sep-20 Jun-20 Jun-21 Jun-20

NONINTEREST REVENUE:

Mortgage banking excl. MSR and MSR Hedge market value adj $ 11,013 $ 17,929 $ 19,917 $ 26,667 $ 31,930 $ 28,942 $ 52,483

MSR and MSR Hedge market value adjustment (1,908) 7,381 212 430 (2,373) 5,473 (13,456)

Credit card, debit card and merchant fees 11,589 9,659 10,053 9,938 9,080 21,248 18,256

Deposit service charges 8,849 8,477 9,708 8,892 7,647 17,326 19,329

Securities gains (losses), net 96 82 63 18 62 178 (23)

Insurance commissions 36,106 30,667 29,815 32,750 33,118 66,773 62,721

Trust income 4,434 5,129 4,046 3,902 4,064 9,563 8,077

Annuity fees 50 51 53 53 54 101 109

Brokerage commissions and fees 3,059 3,285 2,652 2,516 2,303 6,344 4,805

Gain on sale of PPP loans 21,572 - - - - 21,572 -

Bank-owned life insurance 1,845 2,020 2,425 1,902 1,855 3,865 3,854

Other miscellaneous income 5,238 3,256 (118) 2,856 3,518 8,494 11,599

Total noninterest revenue $ 101,943 $ 87,936 $ 78,826 $ 89,924 $ 91,258 $ 189,879 $ 167,754

NONINTEREST EXPENSE:

Salaries and employee benefits $ 108,188 $ 101,060 $ 97,215 $ 104,219 $ 108,103 $ 209,248 $ 216,375

Occupancy, net of rental income 13,187 12,814 13,004 13,053 12,890 26,001 25,598

Equipment 4,967 4,564 4,756 4,519 4,762 9,531 9,411

Deposit insurance assessments 1,638 1,455 1,696 1,522 1,962 3,093 3,508

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

Advertising 783 1,004 899 826 918 1,787 2,017

Foreclosed property expense 649 1,021 2,122 (278) 1,306 1,670 2,230

Telecommunications 1,517 1,398 1,448 1,462 1,512 2,915 2,973

Public relations 1,012 741 897 1,130 459 1,753 1,139

Data processing 11,024 10,424 9,980 9,477 9,693 21,448 19,339

Computer software 4,887 5,113 5,301 4,779 4,979 10,000 9,294

Amortization of intangibles 2,401 2,318 2,499 2,357 2,355 4,719 4,749

Legal 774 1,166 1,474 (316) 1,375 1,940 2,273

Merger expense 9,962 1,649 212 129 510 11,611 5,004

Postage and shipping 1,317 1,547 1,418 1,199 1,198 2,864 2,639

Other miscellaneous expense 11,678 9,549 18,350 10,427 10,482 21,227 22,711

Total noninterest expense $ 173,984 $ 155,823 $ 167,117 $ 154,505 $ 162,504 $ 329,807 $ 329,260

INSURANCE COMMISSIONS:

Property and casualty commissions $ 26,040 $ 21,949 $ 21,304 $ 24,060 $ 23,644 $ 47,989 $ 44,890

Life and health commissions 7,130 6,494 5,915 6,072 6,771 13,624 12,946

Risk management income 611 613 829 609 540 1,224 1,072

Other 2,325 1,611 1,767 2,009 2,163 3,936 3,813

Total insurance commissions $ 36,106 $ 30,667 $ 29,815 $ 32,750 $ 33,118 $ 66,773 $ 62,721

BancorpSouth Bank

Selected Additional Information

(Dollars in thousands)

(Unaudited)

Quarter Ended

Jun-21 Mar-21 Dec-20 Sep-20 Jun-20

MORTGAGE SERVICING RIGHTS:

Fair value, beginning of period $ 60,332 $ 47,571 $ 44,944 $ 40,821 $ 42,243

Additions to mortgage servicing rights:

Originations of servicing assets 6,833 5,588 6,608 7,041 4,297

Changes in fair value:

Due to payoffs/paydowns (2,946) (3,273) (3,898) (3,198) (3,144)

Due to change in valuation inputs or

assumptions used in the valuation model (3,604) 10,446 (83) 280 (2,575)

Other changes in fair value - - - - -

Fair value, end of period $ 60,615 $ 60,332 $ 47,571 $ 44,944 $ 40,821

MORTGAGE BANKING REVENUE:

Production revenue:

Origination $ 8,646 $ 15,955 $ 18,561 $ 23,632 $ 30,194

Servicing 5,313 5,247 5,254 6,233 4,880

Payoffs/Paydowns (2,946) (3,273) (3,898) (3,198) (3,144)

Total production revenue 11,013 17,929 19,917 26,667 31,930

Market value adjustment on MSR (3,604) 10,446 (83) 280 (2,575)

Market value adjustment on MSR Hedge 1,696 (3,065) 295 150 202

Total mortgage banking revenue $ 9,105 $ 25,310 $ 20,129 $ 27,097 $ 29,557

Mortgage loans serviced $ 7,407,690 $ 7,259,808 $ 7,330,293 $ 7,218,090 $ 7,000,425

MSR/mtg loans serviced 0.82% 0.83% 0.65% 0.62% 0.58%

AVAILABLE-FOR-SALE SECURITIES, at fair value

U.S. Government agencies 2,758,412 2,642,646 2,871,408 $ 3,116,458 $ 3,348,206

U.S. Government agency issued residential

mortgage-back securities 4,709,540 3,438,246 2,421,409 1,625,325 699,864

U.S. Government agency issued commercial

mortgage-back securities 1,478,058 1,414,345 806,206 758,116 759,980

Obligations of states and political subdivisions 117,248 126,589 113,953 141,896 163,121

Corporate bonds 20,853 18,442 18,030 17,990 2,000

Total available-for-sale securities $ 9,084,111 $ 7,640,268 $ 6,231,006 $ 5,659,785 $ 4,973,171

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 average tangible equity,return on average tangible common equity, operating return on average tangibleequity-excluding MSR, operating return on average tangible commonequity-excluding MSR, operating return on average assets-excluding MSR,operating return on average shareholders' equity-excluding MSR, operatingreturn on average common shareholders' equity-excluding MSR, pre-taxpre-provision net revenue to total average assets, average tangible book valueper common share, operating earnings per common share, operating earnings percommon share-excluding MSR, efficiency ratio (tax equivalent) and operatingefficiency ratio-excluding MSR (tax equivalent). The Company has includedthese non-GAAP financial measures in this news release for the applicableperiods presented. Management believes that the presentation of these non-GAAPfinancial measures (i) provides important supplemental information thatcontributes to a proper understanding of the Company's capital position andoperating performance, (ii) enables a more complete understanding of factorsand trends affecting the Company's business and (iii) allows investors toevaluate the Company's performance in a manner similar to management, thefinancial services industry, bank stock analysts and bank regulators. Reconciliations of these non-GAAP financial measures to the most directlycomparable GAAP financial measures are presented in the tables below. Thesenon-GAAP financial measures should not be considered as substitutes for GAAPfinancial measures, and the Company strongly encourages investors to review theGAAP financial measures included in this news release and not to place unduereliance upon any single financial measure. In addition, because non-GAAPfinancial measures are not standardized, it may not be possible to compare thenon-GAAP financial measures presented in this news release with othercompanies' 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

6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020 6/30/2021 6/30/2020

Net income $ 75,539 $ 81,555 $ 68,805 $ 73,825 $ 61,160 $ 157,094 $ 85,421

Plus: Merger expense, net of tax 7,476 1,238 159 97 383 8,714 3,755

Initial provision for acquired loans,

net of tax 8,631 - - - - 8,631 751

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

Less: Security gains(losses), net of tax 72 62 48 13 47 134 (17)

Net operating income $ 91,574 $ 82,731 $ 73,304 $ 73,909 $ 61,496 $ 174,305 $ 89,944

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

Net operating income available to

common shareholders $ 89,202 $ 80,359 $ 70,932 $ 71,537 $ 59,124 $ 169,561 $ 85,200

Net operating income $ 91,574 $ 82,731 $ 73,304 $ 73,909 $ 61,496 $ 174,305 $ 89,944

Less: MSR market value adjustment, net of tax (1,432) 5,539 159 323 (1,781) 4,107 (10,099)

Net operating income-excluding MSR $ 93,006 $ 77,192 $ 73,145 $ 73,586 $ 63,277 $ 170,198 $ 100,043

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

Net operating income available to common

shareholders-excluding MSR $ 90,634 $ 74,820 $ 70,773 $ 71,214 $ 60,905 $ 165,454 $ 95,299

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

Net income $ 75,539 $ 81,555 $ 68,805 $ 73,825 $ 61,160 $ 157,094 $ 85,421

Plus: Provision for credit losses 11,500 - 5,794 16,000 20,000 11,500 67,250

Merger expense 9,962 1,649 212 129 510 11,611 5,004

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

Income tax expense 21,102 23,347 14,046 21,525 18,164 44,449 23,923

Less: Security gains(losses) 96 82 63 18 62 178 (23)

MSR market value adjustment (1,908) 7,381 212 430 (2,373) 5,473 (13,456)

Pre-tax pre-provision net revenue $ 119,915 $ 99,088 $ 94,428 $ 111,031 $ 102,145 $ 219,003 $ 195,077

Reconciliation of Total Operating Expense to Total Noninterest Expense:

Total noninterest expense $ 173,984 $ 155,823 $ 167,911 $ 155,505 $ 162,504 $ 329,807 $ 329,260

Less: Merger expense 9,962 1,649 212 129 510 11,611 5,004

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

Total operating expense $ 164,022 $ 154,174 $ 161,853 $ 155,376 $ 161,994 $ 318,196 $ 324,256

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

6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020 6/30/2021 6/30/2020

Tangible assets

Total assets $ 27,612,365 $ 25,802,497 $ 24,081,194 $ 23,555,422 $ 23,236,176 $ 27,612,365 $ 23,236,176

Less: Goodwill 957,474 851,612 851,612 847,531 847,984 957,474 847,984

Other identifiable intangible assets 54,659 53,581 55,899 54,757 56,989 54,659 56,989

Total tangible assets $ 26,600,232 $ 24,897,304 $ 23,173,683 $ 22,653,134 $ 22,331,203 $ 26,600,232 $ 22,331,203

Less: PPP loans 167,144 1,146,000 975,421 1,212,246 1,192,715 167,144 1,192,715

Total tangible assets-excluding PPP loans $ 26,433,088 $ 23,751,304 $ 22,198,262 $ 21,440,888 $ 21,138,488 $ 26,433,088 $ 21,138,488

PERIOD END BALANCES:

Tangible shareholders' equity

Total shareholders' equity $ 3,069,574 $ 2,825,198 $ 2,822,477 $ 2,782,539 $ 2,732,687 $ 3,069,574 $ 2,732,687

Less: Goodwill 957,474 851,612 851,612 847,531 847,984 957,474 847,984

Other identifiable intangible assets 54,659 53,581 55,899 54,757 56,989 54,659 56,989

Total tangible shareholders' equity $ 2,057,441 $ 1,920,005 $ 1,914,966 $ 1,880,251 $ 1,827,714 $ 2,057,441 $ 1,827,714

Less: Preferred stock 166,993 166,993 166,993 166,993 166,993 166,993 166,993

Total tangible common shareholders' equity $ 1,890,448 $ 1,753,012 $ 1,747,973 $ 1,713,258 $ 1,660,721 $ 1,890,448 $ 1,660,721

AVERAGE BALANCES:

Tangible shareholders' equity

Total shareholders' equity $ 2,954,834 $ 2,813,001 $ 2,774,589 $ 2,729,870 $ 2,738,434 $ 2,884,309 $ 2,698,567

Less: Goodwill 910,448 851,612 852,472 847,744 848,160 881,192 846,398

Other identifiable intangible assets 52,564 54,876 54,858 56,045 58,280 53,714 58,542

Total tangible shareholders' equity $ 1,991,822 $ 1,906,513 $ 1,867,259 $ 1,826,081 $ 1,831,994 $ 1,949,403 $ 1,793,627

Less: Preferred stock 166,993 166,993 166,993 166,993 166,993 166,993 167,007

Total tangible common shareholders' equity $ 1,824,829 $ 1,739,520 $ 1,700,266 $ 1,659,088 $ 1,665,001 $ 1,782,410 $ 1,626,620

Total average assets $ 26,666,296 $ 24,545,560 $ 23,660,503 $ 23,318,877 $ 22,707,686 $ 25,611,786 $ 21,948,661

Total shares of common stock outstanding 108,614,595 102,624,818 102,561,480 102,558,459 102,566,301 108,614,595 102,566,301

Average shares outstanding-diluted 105,838,056 102,711,584 102,817,409 102,839,749 102,827,225 104,274,819 103,780,561

Tangible shareholders' equity to tangible assets (1) 7.73% 7.71% 8.26% 8.30% 8.18% 7.73% 8.18%

Tangible shareholders' equity to tangible assets-excluding PPP loans (2) 7.78% 8.08% 8.63% 8.77% 8.65% 7.78% 8.65%

Tangible common shareholders' equity to tangible assets (3) 7.11% 7.04% 7.54% 7.56% 7.44% 7.11% 7.44%

Tangible common shareholders' equity to tangible assets-excluding PPP loans (4) 7.15% 7.38% 7.87% 7.99% 7.86% 7.15% 7.86%

Return on average tangible equity (5) 15.21% 17.35% 14.66% 16.08% 13.43% 16.25% 9.58%

Return on average tangible common equity (6) 16.08% 18.46% 15.54% 17.13% 14.20% 17.24% 9.97%

Operating return on average tangible equity-excluding MSR (7) 18.73% 16.42% 15.58% 16.03% 13.89% 17.61% 11.22%

Operating return on average tangible common equity-excluding MSR (8) 19.92% 17.44% 16.56% 17.08% 14.71% 18.72% 11.78%

Operating return on average assets-excluding MSR (9) 1.40% 1.28% 1.23% 1.26% 1.12% 1.34% 0.92%

Operating return on average shareholders' equity-excluding MSR (10) 12.62% 11.13% 10.49% 10.72% 9.29% 11.90% 7.46%

Operating return on average common shareholders' equity-excluding MSR (11) 13.04% 11.47% 10.80% 11.05% 9.53% 12.28% 7.57%

Pre-tax pre-provision net revenue to total average assets (12) 1.80% 1.64% 1.59% 1.89% 1.81% 1.72% 1.79%

Tangible book value per common share (13) $ 17.41 $ 17.08 $ 17.04 $ 16.71 $ 16.19 $ 17.41 $ 16.19

Operating earnings per common share (14) $ 0.84 $ 0.78 $ 0.69 $ 0.70 $ 0.57 $ 1.63 $ 0.82

Operating earnings per common share-excluding MSR (15) $ 0.86 $ 0.73 $ 0.69 $ 0.69 $ 0.59 $ 1.59 $ 0.92

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 hareholders' 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