(14) PENSION, OTHER POST RETIREMENT BENEFIT AND PROFIT SHARING PLANS

The Basic Plan is a non-contributory defined benefit pension plan managed by a trustee covering substantially all full-time employees who have at least one year of service and have attained the age of 21. For such employees hired prior to January 1, 2006, benefits are based on years of service and the employee's compensation until January 1, 2017, at which time benefits will be based on a 2.5% cash balance formula. For such employees hired on or after January 1, 2006, benefits accrue based on a cash balance formula, effective January 1, 2012. The Company's funding policy is to contribute to the Basic Plan the amount that meets the minimum funding requirements set forth in the Employee Retirement Income Security Act of 1974, plus such additional amounts as the Company determines to be appropriate. The difference between the plan assets and projected benefit obligation is included in other assets or other liabilities, as appropriate. Actuarial assumptions are evaluated periodically.

The Restoration Plan provides for the payment of retirement benefits to certain participants in the Basic Plan. The Restoration Plan is a non-qualified plan that covers any employee whose benefit under the Basic Plan is limited by the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and any employee who elects to participate in the BancorpSouth, Inc. Deferred Compensation Plan, which reduces the employee's benefit under the Basic Plan. For such employees hired prior to January 1, 2006, benefits are based on years of service and the employee's compensation until January 1, 2017, at which time benefits will be based on a 2.5% cash balance formula. For such employees hired on or after January 1, 2006, benefits accrue based on a cash balance formula, effective January 1, 2012. The Supplemental Plan is a non-qualified defined benefit supplemental retirement plan for certain key employees. Benefits commence when the employee retires and are payable over a period of ten years.

The Company uses a December 31 measurement date for its pension and other benefit plans.

A summary of the three defined benefit retirement plans at and for the years ended December 31, 2012, 2011 and 2010 follows:

	Pension Benefits
	2012			2011			2010
Change in benefit obligations:	(In thousands)
Projected benefit obligations at beginning of year	$	182,362		$	156,595		$	134,892
Service cost		9,670			8,107			7,449
Interest cost		8,104			8,327			7,676
Amendments		300			(8,494	)		-
Actuarial loss		22,417			22,253			11,457
Benefits paid		(8,232	)		(4,197	)		(4,879	)
Administrative expenses paid		(817	)		(229	)		-
Projected benefit obligations at end of year	$	213,804		$	182,362		$	156,595
Change in plans' assets:
Fair value of plans' assets at beginning of year	$	195,004		$	197,536		$	180,217
Actual return on assets		16,631			1,347			21,488
Employer contributions		1,118			547			710
Benefits paid		(8,232	)		(4,197	)		(4,879	)
Administrative expenses paid		(817	)		(229	)		-
Fair value of plans' assets at end of year	$	203,704		$	195,004		$	197,536
Funded status:
Projected benefit obligations	$	(213,804	)	$	(182,362	)	$	(156,595	)
Fair value of plans' assets		203,704			195,004			197,536
Unrecognized transition amount		-			-			-
Unrecognized prior service cost		-			-			-
Unrecognized actuarial loss		-			-			-
Net amount recognized	$	(10,100	)	$	12,642		$	40,941

Amounts recognized in the consolidated balance sheets consisted of:

	2012			2011			2010
	(In thousands)
Prepaid benefit cost	$	94,046		$	102,307		$	104,749
Accrued benefit liability		(22,123	)		(20,572	)		(18,678	)
Intangible asset		-			-			-
Accumulated other comprehensive
income adjustment		(82,023	)		(69,093	)		(45,130	)
Net amount recognized	$	(10,100	)	$	12,642		$	40,941

Pre-tax amounts recognized in accumulated other comprehensive income consisted of:

	Year ended December 31,
	2012			2011
	(In thousands)

Net transition obligation	$	37		$	55
Net prior service benefit		(6,134	)		(6,901	)
Net actuarial loss		88,120			75,939
Total accumulated other comprehensive income	$	82,023		$	69,093

The net transition obligation, net prior service credit and net actuarial loss that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year are approximately $18,000, $768,000 and $6,099,000, respectively.

The components of net periodic benefit cost at December 31, 2012, 2011 and 2010 were as follows:

	Pension Benefits
	2012			2011			2010
Components of net periodic benefit cost:	(In thousands)
Service cost	$	9,670		$	8,107		$	7,449
Interest cost		8,104			8,327			7,676
Expected return on assets		(11,263	)		(14,864	)		(14,032	)
Amortization of unrecognized transition amount		18			18			18
Recognized prior service (benefit) cost		(768	)		31			341
Recognized net loss		4,868			3,264			2,218
Special termination benefit		300			-			-
Net periodic benefit cost	$	10,929		$	4,883		$	3,670

The weighted-average assumptions used to determine benefit obligations at December 31, 2012 and 2011 were as follows:

	Basic Plan		Restoration Plan		Supplemental Plan
	2012	2011	2012	2011	2012	2011
Discount rate	4.05%	4.80%	3.65%	4.45%	2.85%	3.85%
Rate of compensation increase*	3.00%	2.00%	3.00%	2.00%	3.00%	2.00%

*	3.00% rate of compensation increase used for 2012 and beyond.

The weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31, 2012, 2011 and 2010 were as follows:

	Basic Plan
	2012	2011	2010
Discount rate	4.80%	5.50%	6.00%
Rate of compensation increase	3.00%	3.00%	3.00%
Expected rate of return on plan assets	6.00%	8.00%	8.00%

	Restoration Plan
	2012	2011	2010
Discount rate	4.45%	5.15%	5.85%
Rate of compensation increase	3.00%	3.00%	3.00%
Expected rate of return on plan assets	N/A	N/A	N/A

	Supplemental Plan
	2012	2011	2010
Discount rate	3.85%	4.50%	5.35%
Rate of compensation increase	3.00%	3.00%	3.00%
Expected rate of return on plan assets	N/A	N/A	N/A
N/A = not applicable

The following table presents information related to the Restoration Plan and Supplemental Plan that had accumulated benefit obligations in excess of plan assets at December 31, 2012 and 2011:

	2012		2011
	(In thousands)
Projected benefit obligation	$	32,659	$	26,712
Accumulated benefit obligation		31,154		25,409
Fair value of assets		-		-

The following table presents information related to the Company's defined benefit pension plans at December 31, 2012 and 2011:

	2012		2011
	(In thousands)
Accumulated benefit obligation	$	205,298	$	172,439

In selecting the expected long-term rate of return on assets used for the Basic Plan, the Company considered the average rate of earnings expected on the funds invested or to be invested to provide for the benefits of the plan. This included considering the trust asset allocation and the expected returns likely to be earned over the life of the plan. This basis is consistent with the prior year. The discount rate is the rate used to determine the present value of the Company's future benefit obligations for its pension and other postretirement benefit plans. The discount rate used to discount plan liabilities is determined by matching the timing and duration of expected cash flows of the Company's pension obligations to a yield curve generated from a broad portfolio of high-quality fixed income debt instruments.

The Company's pension plan weighted-average asset allocations at December 31, 2012 and 2011 and the Company's target allocations for 2013, by asset category, were as follows:

	Plan assets at December 31		Target for
Asset category:	2012	2011	2013

Equity securities	32.92%	36.87%	33%
Debt securities	61.19%	58.16%	67%
Cash and equivalents	5.89%	4.97%	0%
Total	100.00%	100.00%

Equity securities held in the Basic Plan included shares of the Company's common stock with a fair value of $1.2 million (0.58% of total plan assets) and approximately $907,000 (0.46% of total plan assets) at December 31, 2012 and 2011, respectively. An analysis by management is performed annually to determine whether the Company will make a contribution to the Basic Plan.

The following table presents information regarding expected future benefit payments, which reflect expected service, as appropriate:

	Pension
	Benefits
Expected future benefit payments:	(In thousands)
2013	$	10,560
2014		11,650
2015		13,238
2016		11,965
2017		12,285
2018-2022		66,277

The following table presents the fair value of each major category of plan assets held in the Basic Plan at December 31, 2012 and 2011:

	Pension Benefits
	2012		2011
Investments, at fair value:	(In thousands)
Cash	$	88	$	-
U.S. agency debt obligations		49,886		70,757
Mutual funds		138,904		112,995
Common stock of BancorpSouth, Inc.		1,196		907
Money market funds		9,356		4,701
Brokered certificates of deposit		3,784		4,965
Total investments, at fair value		203,214		194,325
Accrued interest and dividends		490		679
Fair value of plan assets	$	203,704	$	195,004

Fair values are determined based on valuation techniques categorized as follows: Level 1 means the use of quoted prices for identical instruments in active markets; Level 2 means the use of quoted prices for identical or similar instruments in markets that are not active or are directly or indirectly observable; Level 3 means the use of unobservable inputs. Quoted market prices, when available, are used to value investments. Pension plan investments include funds which invest in various types of investment securities and in various companies within various markets. Investment securities are exposed to several risks, such as interest rate, market and credit risks. Because of the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported.

The following table sets forth by level, within the FASB ASC 820, Fair Value Measurements and Disclosure ("FASB ASC 820"), fair value hierarchy, the plan investments at fair value as of December 31, 2012 and 2011:

	December 31, 2012
	Level 1		Level 2		Level 3		Total
	(In thousands)
U.S. agency debt obligations	$	-	$	49,886	$	-	$	49,886
Mutual funds		138,904		-		-		138,904
Common stock of BancorpSouth, Inc.		1,196		-		-		1,196
Money market funds		-		9,356		-		9,356
Brokered certificates of deposit		-		3,784		-		3,784
Total	$	140,100	$	63,026	$	-	$	203,126

	December 31, 2011
	Level 1		Level 2		Level 3		Total
	(In thousands)
U.S. agency debt obligations	$	-	$	70,757	$	-	$	70,757
Mutual funds		112,995		-		-		112,995
Common stock of BancorpSouth, Inc.		907		-		-		907
Money market funds		-		4,701		-		4,701
Brokered certificates of deposit		-		4,965		-		4,965
Total	$	113,902	$	80,423	$	-	$	194,325

There were no transfers between Levels of the fair value hierarchy in 2012 or 2011.

The following investments represented 5% or more of the total plan asset value as of December 31, 2012:

	2012
	(In thousands)
Fidelity Advisor New Insight S Institution	$	11,947
T. Rowe Price Equity Income Fund		11,151
Dodge & Cox Income Fund		11,339
Pioneer Multi-Asset Ultrashort Inc. Fund		15,129
Fidelity Total Bond		17,120
Vanguard Total Bond Market Index Institutional Fund		18,501

The Company has a defined contribution plan (commonly referred to as a "401(k) Plan"). Pursuant to the 401(k) Plan, employees may contribute a portion of their compensation, as set forth in the 401(k) Plan, subject to the limitations as established by the Code. Employee contributions (up to 5% of defined compensation) are matched dollar-for-dollar by the Company. Employer contributions were $9.2 million, $8.6 million and $8.6 million for the years ended December 31, 2012, 2011 and 2010, respectively. Until December 31, 2011, the 401(k) Plan provided that the Company make a profit sharing contribution on behalf of each eligible employee in an amount equal to two percent of each such employee's eligible compensation. Eligible employees were those hired after December 31, 2005 who worked at least 1,000 hours during the plan year and had attained the age of 21. As of December 31, 2011, the 401(k) Plan was amended and the profit sharing contribution was discontinued. Employer profit sharing contributions were $1.3 million for each of the years ended December 31, 2011 and 2010.