-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EYGrCSaO29NtkN5cEIeg1ijlxpAroihspgbr5mZORYTKTklcdWcJsdShpGZqJu/v PXUV6dr3XvVDhihVOJOgFg== 0000701853-96-000005.txt : 19960812 0000701853-96-000005.hdr.sgml : 19960812 ACCESSION NUMBER: 0000701853-96-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960809 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BANCORPSOUTH INC CENTRAL INDEX KEY: 0000701853 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 640659571 STATE OF INCORPORATION: MS FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-10826 FILM NUMBER: 96606877 BUSINESS ADDRESS: STREET 1: ONE MISSISSIPPI PL CITY: TUPELO STATE: MS ZIP: 38801 BUSINESS PHONE: 6016802000 MAIL ADDRESS: STREET 1: PO BOX 789 CITY: TUPELO STATE: MS ZIP: 38802-0789 FORMER COMPANY: FORMER CONFORMED NAME: BANCORP OF MISSISSIPPI INC DATE OF NAME CHANGE: 19920703 10-Q 1 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------- FORM 10-Q (Mark One) /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to --------------------- Commission file number 0-10826 BancorpSouth, Inc. (Exact name of registrant as specified in its charter) Mississippi 64-0659571 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) One Mississippi Plaza, Tupelo, Mississippi 38801 (Address of principal executive offices) (Zip Code) 601/680-2000 (Registrant's telephone number, including area code) (Former name, former address, and former fiscal year, if changed since last year) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes /X/ No On June 30, 1996, the registrant had outstanding 21,033,313 shares of common stock, par value $2.50 per share. 2 PART I FINANCIAL INFORMATION BANCORPSOUTH, INC. Consolidated Condensed Balance Sheets
(Unaudited) (In Thousands) 30-Jun 31-Dec 1996 1995 ASSETS Cash and due from banks $167,582 $149,923 Interest bearing deposits with other banks 3,345 15,892 Held-to-maturity securities, at amortized cost 492,303 439,303 Federal funds sold 6,200 35,450 Loans 2,495,113 2,371,684 Less: Unearned discount 80,525 76,518 Allowance for credit losses 36,637 34,636 Net loans 2,377,951 2,260,530 Available-for-sale securities 245,381 239,755 Mortgages held for sale 26,092 25,168 Premises and equipment, net 89,293 81,240 Other assets 62,002 54,767 TOTAL ASSETS $3,470,149 $3,302,028 LIABILITIES Deposits: Demand: Non-interest bearing $403,530 $393,417 Interest bearing 711,251 665,313 Savings 376,577 333,436 Time 1,506,866 1,471,446 Total deposits 2,998,224 2,863,612 Federal funds purchased and securities sold under repurchase agreements 45,650 35,848 Long-term debt 81,688 73,624 Other liabilities 44,216 40,849 TOTAL LIABILITIES 3,169,778 3,013,933 SHAREHOLDERS' EQUITY Common stock 52,860 52,764 Capital surplus 84,496 84,391 Unrealized gain (loss) on available-for-sale securities 1,026 2,480 Retained earnings 163,083 149,494 Less cost of shares held in treasury (1,094) (1,034) TOTAL SHAREHOLDERS' EQUITY 300,371 288,095 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $3,470,149 $3,302,028
3 BANCORPSOUTH, INC. Consolidated Condensed Statements of Income
(Unaudited) (In thousands except for per share amounts) Three months ended Six months ended June 30 June 30 1996 1995 1996 1995 INTEREST REVENUE: Interest & fees on loans $55,477 $50,103 $109,986 $96,890 Deposits with other banks 105 204 336 350 Interest on federal funds sold 644 630 1,251 1,025 Interest on held-to-maturity securities: U. S. Treasury 1,006 972 1,611 1,949 U. S. Government agencies & corporations 4,856 6,181 9,882 12,486 Obligations of states & political subdivisions 1,682 2,161 3,445 4,038 Other - 79 2 239 Interest and dividends on available-for-sale securities 3,725 1,866 7,364 3,725 Interest on mortgages held for sale 613 318 1,045 480 Total interest revenue 68,108 62,514 134,922 121,182 INTEREST EXPENSE: Interest on deposits 28,878 26,925 57,585 50,791 Interest on federal funds purchased & securities sold under repurchase agreements 591 513 1,046 979 Other interest expense 1,456 1,293 2,852 2,569 Total interest expense 30,925 28,731 61,483 54,339 Net interest revenue 37,183 33,783 73,439 66,843 Provision for credit losses 3,060 1,240 4,504 2,538 Net interest revenue, after provision for credit losses 34,123 32,543 68,935 64,305 OTHER REVENUE: Mortgage lending 2,173 938 3,463 1,844 Trust income 660 485 1,247 950 Service charges 4,409 4,045 8,488 7,749 Security gains (losses), net 57 (17) 278 (32) Life insurance income 1,057 621 1,990 1,367 Other 1,702 1,902 3,448 3,781 Total other revenue 10,058 7,974 18,914 15,659 OTHER EXPENSES: Salaries and employee benefits 12,988 13,619 28,687 27,663 Net occupancy expense 2,090 2,198 4,123 4,247 Equipment expense 2,400 1,890 4,717 3,702 Deposit insurance premiums 148 1,314 359 2,630 Other 9,153 8,563 18,559 17,165 Total other expenses 26,779 27,584 56,445 55,407 Income before income taxes 17,402 12,933 31,404 24,557 Income tax expense 6,202 4,064 10,755 7,783 Net income $11,200 $8,869 $20,649 $16,774 Net income per share $0.53 $0.42 $0.97 $0.80 Dividends declared per common share $0.17 $0.15 $0.34 $0.30 See accompanying notes to consolidated condensed financial statements.
4 BANCORPSOUTH, INC. Consolidated Condensed Statements of Cash Flows
(Unaudited) (In Thousands) Six Months Ended June 30 1996 1995 Net cash provided by operating activities $27,281 $14,153 Investing activities: Proceeds from calls and maturities of held-to-maturity securities 72,558 72,565 Proceeds from calls and maturities of available-for-sale securities 105,356 160,784 Proceeds from sales of available-for-sale securities 3,940 1,689 Purchases of held-to-maturity securities (125,019) (29,436) Purchases of available-for-sale securities (116,590) (128,133) Net (increase) decrease in short-term investments 29,250 (65,075) Net increase in loans (123,540) (133,329) Purchases of premises and equipment (13,585) (10,627) Other (3,936) (7,604) Net cash used by investing activities (171,566) (139,166) Financing activities: Net increase in deposits 134,612 166,489 Net increase (decrease) in short-term borrowings and other liabilities 13,422 (27,961) Increase (decrease) in long-term debt 8,064 1,475 Payment of cash dividends (6,737) (5,194) Issuance of common stock - 119 Exercise of stock options 96 402 Other (60) (19) Net cash provided by financing activities 149,397 135,311 Increase in cash and cash equivalents 5,112 10,298 Cash and cash equivalents at beginning of period 165,815 144,693 Cash and cash equivalents at end of period $170,927 $154,991 See accompanying notes to consolidated condensed financial statements
5 Notes to Consolidated Condensed Financial Statements (Unaudited) 1. The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with the accounting policies in effect as of December 31, 1995, as set forth in the annual consolidated financial statements of BancorpSouth, Inc. (the "Company"), as of such date. In the opinion of management, all adjustments necessary for a fair presentation of the consolidated condensed financial statements have been included and all such adjustments were of a normal recurring nature. The results of operations for the threemonth and six-month periods ended June 30, 1996 are not necessarily indicative of the results to be expected for the full year. 2. The computation of net income per share is based upon weighted average number of shares outstanding (21,216,528 and 20,815,075 for the three months ended June 30, 1996, and 1995, respectively; 21,015,540 and 20,807,097 for the six months ended June 30, 1996, and 1995, respectively). ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion provides certain information concerning the consolidated financial condition and results of operations of BancorpSouth, Inc. (the "Company"), a bank and thrift holding company and the parent of Bank of Mississippi ("BOM"), Volunteer Bank ("VOL") and Laurel Federal Savings and Loan Association ("Laurel"). This discussion should be read in conjunction with the unaudited consolidated condensed financial statements for the periods ended June 30, 1996 and 1995. RESULTS OF OPERATIONS Net Income The Company's net income for the second quarter of 1996 was $11.20 million compared to $8.87 million in the second quarter of 1995. For the first six months of 1996, net income was $20.65 million, an increase of 23.1% from $16.77 million for the same period of 1995. Net income per share was $0.53 for the second quarter of 1996 compared to $0.42 in 1995. For the first six months of 1996, earnings per share were $0.97, an increase of 21.3% from $0.80 for the first six months of 1995. The annualized returns on average assets for the second quarter of 1996 and 1995 were 1.31% and 1.14%, respectively. For the six months ended June 30, the annualized returns on average assets were 1.22% and 1.09% for 1996 and 1995, respectively. Net Interest Revenue Net interest revenue, the difference between interest earned on assets and the cost of interest-bearing liabilities, is the largest component of the Company's net income. For purposes of this discussion, all interest revenue has been adjusted to a fully taxable equivalent basis. The primary items of concern in managing net interest revenue are the mix and maturity balance between interest-sensitive assets and liabilities. Net interest revenue was $38.14 million for the three months ended June 30, 1996, compared to $34.82 million for the same period in 1995. For the six months ended June 30, 1996 and 1995, net interest revenue was $75.38 million and $68.93 million, respectively. Earning assets averaged $3.19 billion in the second quarter and $3.13 billion for the first six months of 1996, compared with $2.90 billion and $2.85 billion in the respective periods in 1995. Average interest-bearing liabilities were $2.70 billion in the second quarter and $2.67 billion for the first six months of 1996, compared with $2.48 billion and $2.41 billion in the respective periods in 1995. Net interest revenue, expressed as a percentage of average earning assets, was 4.80% for the second quarter of 1996 as compared to 4.82% for the same period of 1995 and 4.84% for the first six months of 1996 as compared to 4.88% for the same period of 1995. Provision and Allowance for Credit Losses The provision for credit losses charged to operating expense is an amount which, in the judgment of management, is necessary to maintain the allowance for credit losses at a level that is adequate to meet the present and potential risks of losses on the Company's current portfolio of loans. Management's judgment is based on a variety of factors which include the Company's experience related to loan balances, charge-offs and recoveries, scrutiny of individual loans and risk factors, results of regulatory agency reviews of loans, and present and anticipated future economic conditions of the Company's market area. Material estimates that are particularly susceptible to significant change in the near term are a necessary part of this process. Future additions to the allowance may be necessary based on changes in economic conditions. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company's allowance for credit losses. These agencies may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination. The provision for credit losses totaled $3.06 million for the second quarter of 1996 compared to $1.24 million for the same period of 1995. For the six month periods ended June 30, 1996 and 1995, the provision for credit losses totaled $4.50 million and $2.54 million, respectively. Provision for credit losses increased in 1996 to provide for the continuing growth in loans and to provide for a slight impairment in the quality of the Company's consumer loan portfolio. The allowance for credit losses as a percent of loans outstanding was 1.52% at the end of the second quarter 1996, compared to 1.51% at December 31, 1995. Other Revenue Other revenue for the quarter ended June 30, 1996, totaled $10.06 million compared to $7.97 million for the same period of 1995, a 26.1% increase. For the six months ended June 30, 1996 and 1995, other revenue was $18.91 million and $15.66 million, respectively, a 20.8% increase. The most significant change in other revenue was in mortgage lending where income of $3.46 million was recorded during the first six months of 1996 compared to $1.84 million in the same period of 1995. Favorable interest rates during the first six months of 1996 contributed to significantly higher activity in the Company's mortgage operation. Trust income and life insurance premiums both showed significant increases. Service charges on deposit accounts for the first six months increased 9.5%. Net security gains were $278,000 for the first six months of 1996 compared to a net loss of $32,000 for the same period in 1995. Other Expenses Other expenses totaled $26.78 million for the second quarter of 1996, a 2.9% decrease from the same period of 1995. For the six months ended June 30, 1996, other expenses totaled $56.45 million , a 1.9% increase over 1995's other expenses. Salaries and employee benefits for the first six months of 1996 show a modest increase over the same period of 1995 while the second quarter of 1996 showed a decrease in salaries and employee benefits when compared to 1995. The second quarter decrease is due to the recapture of expense related to stock appreciation rights recorded in the first quarter of 1996 and to staff reductions related to the Company's acquisition of Wes-Tenn Bancorp, Inc. This merger took place during the fourth quarter of 1995 but full integration of all operations did not occur until the second quarter of 1996. Deposit insurance was $359,000 for the six months ended 1996 compared to the same period last year of $2,630,000. The decrease is the result of lower assessment rated for 1996 for the Company's deposits in the Bank Insurance Fund (BIF). The Company's deposits in the Savings Association Insurance Fund (SAIF) will continue to experience assessments for 1996 at the same rate as 1995. Also included in other expenses for the first six months of 1995 are amounts totaling $577,000 related to merger and acquisition activity compared to $38,000 in the same period for 1996. The other components of other expenses reflect normal increases and general inflation in the cost of services and supplies purchased by the Company. Income Tax Income tax expense was $6.20 million and $4.06 million for the second quarters of 1996 and 1995, respectively. For the six month period ended June 30, 1996, income tax expense was $10.76 million compared to $7.78 million for the same period in 1995. The increase in the Company's effective tax rate (34.2% for the first six months of 1996 versus 31.7% for comparable period of 1995) reflects the decrease in the relative level of the Company's investment in assets with respect to which earnings are afforded favorable tax treatment. FINANCIAL CONDITION Loans The loan portfolios of the Company's bank and thrift subsidiaries make up the largest single component of the Company's earning assets. These portfolios, net of unearned discount, totaled $2.41 billion at June 30, 1996, which represents a 5.2% increase from the December 31, 1995 total of $2.30 billion. Non-performing loans were 0.40% of all loans outstanding at June 30, 1996, compared to 0.41% at the end of 1995. Investment Securities and Other Earning Assets The securities portfolios are used to make various term investments, to provide a source of liquidity and to serve as collateral to secure certain types of deposits. Held-tomaturity securities at June 30, 1996, were $492.3 million compared with $439.3 million at the end of 1995, a 12.2% decrease. Available for sale securities were $245.4 million at June 30, 1996, compared to $239.8 million at December 31, 1995, a 2.3% increase. Proceeds from maturing investment securities have been used to fund the Company's loan growth. Deposits Total deposits at the end of the second quarter were $3.00 billion as compared to $2.86 billion at December 31, 1995, representing a 4.7% increase. Deposits continue to be the Company's primary source of funds with which to support its earning assets. LIQUIDITY Liquidity is the ability of the Company to fund the need of its borrowers, depositors, and creditors. The Company's traditional sources of liquidity include maturing loans and investment securities, purchased federal funds and its base of core deposits. Management believes these sources are adequate to meet liquidity needs for normal operations. The Company continues to pursue a lending policy stressing adjustable rate loans, in furtherance of its strategy for matching interest sensitive assets with an increasingly interest sensitive liability structure. CAPITAL RESOURCES The Company is required to comply with the risk-based capital requirements of the Board of Governors of the Federal Reserve System (FRB). These requirements apply a variety of weighting factors which vary according to the level of risk associated with the particular assets. At June 30, 1996, the Company's Tier 1 capital and total capital, as a percentage of total risk-adjusted assets, was 12.07% and 13.91%, respectively. Both ratios exceed the required minimum levels for these ratios of 4.0% and 8.0%, respectively. In addition, the Company's leverage capital ratio (Tier 1 capital divided by total assets, less goodwill) was 8.44% at June 30, 1996, compared to the required minimum leverage capital ratio of 4%. The Company's current capital position continues to provide it with a level of resources available for the acquisition of depository institutions and businesses closely related to banking in the event opportunities arise. PART II OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The annual meeting of shareholders of the Company was held on Tuesday, April 25, 1996. At this meeting, the following matters were voted upon by the Company's shareholders: (a) Election of Class II Directors A. Douglas Jumper, T. O. Lashlee, W. G. Holliman and Alan W. Perry were elected to serve as Class II directors of the Company until the annual meeting of shareholders in 1999 or until their respective successors are elected and qualified. The vote was as follows: Votes Cast Votes Cast Abstentions/ in Favor Against or Withheld Non Votes NAME A. Douglas Jumper 17,007,228 103,965 0 T. O. Lashlee 16,999,191 112,002 0 W. G. Holliman, Jr. 17,007,050 104,143 0 Alan W. Perry 17,000,476 110,717 0 (b) Election of Class I Director Fletcher H. Goode, M.D. was elected to serve as a Class I director of the Company until the annual meeting of shareholders in 1997 or until his respective successor is elected and qualified. The vote was as follows: Votes Cast Votes Cast Abstentions/ in Favor Against or Withheld Non Votes Fletcher H. Goode, M.D. 17,003,648 107,545 0 The following directors continue in office following the meeting: NAME Term Expires S. H. Davis 1997 Hassell H. Franklin 1997 Travis E. Staub 1997 Lowery A. Woodall 1997 Aubrey Burns Patterson 1998 Frank A. Riley 1998 Dr. Andrew R. Townes 1998 J. Louis Griffin, Jr. 1998 (c) Selection of Independent Auditors The shareholders of the Company ratified the appointment of KPMG Peat Marwick LLP as the Company's independent auditors for the fiscal year ended December 31, 1996 by the following vote: Votes Cast Votes Cast Abstentions/ in Favor Against or Withheld Non Votes 16,998,618 49,953 62,622 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (b) No reports on Form 8-K were filed during the quarter ended June 30, 1996. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BancorpSouth, Inc. (Registrant) DATE: August 9, 1996 L. Nash Allen, Jr. ---------------------------------- L. Nash Allen, Jr. Treasurer and Chief Financial Officer EX-27 2
9 DEC-31-1996 JAN-1-1996 JUN-30-1996 6-MOS 167,582 3,345 6,200 0 245,381 245,381 245,381 2,414,588 36,637 3,470,149 2,998,224 45,650 44,216 81,688 52,860 0 0 247,511 3,470,149 109,986 14,940 9,996 134,922 57,585 61,483 73,439 4,504 278 56,445 31,404 10,755 0 0 10,775 0.97 0.97 4.84 1,923 5,234 78 0 34,636 3,525 1,022 36,637 36,637 0 0
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