-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, JDP9CC7oD3cDfqXEjIENY8ZaZaVYsvw/nJnYHQGKSmUqNA9887ajBXPCJLHGI087 2oMoJkXmocYCT5lwP8Yafw== 0000701853-95-000008.txt : 19950814 0000701853-95-000008.hdr.sgml : 19950814 ACCESSION NUMBER: 0000701853-95-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950811 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: 95562040 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 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, 1995 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, 1995, the registrant had outstanding 8,771,959 shares of common stock, par value $2.50 per share. PART I FINANCIAL INFORMATION BANCORPSOUTH, INC. Consolidated Condensed Balance Sheets (Unaudited) (In Thousands)
June 30 December 31 1995 1994 ASSETS Cash and due from banks 124,414 130,085 Interest bearing deposits with other banks 13,353 1,367 Held-to-maturity securities, at amortized 444,842 496,838 cost Federal funds sold 68,350 - Loans 1,984,367 1,895,925 Less: Unearned discount 65,524 61,416 Allowance for credit losses 29,483 28,142 Net loans 1,889,360 1,806,367 Available-for-sale securities 132,043 150,573 Mortgages held for sale 24,160 10,471 Premises and equipment, net 72,271 67,119 Other assets 48,934 43,323 TOTAL ASSETS 2,817,727 2,706,143 LIABILITIES Deposits: Demand: Non-interest bearing 331,834 372,939 Interest bearing 607,465 575,485 Savings 288,795 287,416 Time 1,237,828 1,102,396 Total deposits 2,465,922 2,338,236 Federal funds purchased and securities sold under repurchase agreements 36,473 63,314 Long-term debt 46,298 48,028 Other liabilities 32,134 31,633 TOTAL LIABILITIES 2,580,827 2,481,211 SHAREHOLDERS' EQUITY Common stock 22,065 22,004 Capital surplus 73,847 73,130 Unrealized gain (loss) on available-for-sale securities 776 (878) Retained earnings 141,246 131,710 Less cost of shares held in treasury (1,034) (1,034) TOTAL SHAREHOLDERS' EQUITY 236,900 224,932 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 2,817,727 2,706,143 See accompanying notes to consolidated condensed financial statements.
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 1995 1994 1995 1994 INTEREST REVENUE: Interest & fees on loans 44,597 35,828 86,852 69,143 Deposits with other banks 136 82 218 163 Interest on federal funds sold 620 739 1,001 1,060 Interest on held-to-maturity securities: U. S. Treasury 986 180 1,949 212 U. S. Government agencies & corporations 4,980 3,248 10,184 5,611 Obligations of states & political 1,744 1,451 3,281 3,089 subdivisions Other - 99 67 236 Interest and dividends on available-for-sale 1,866 3,061 3,725 6,448 securities Interest on mortgages held for sale 318 678 480 1,894 Total interest revenue 55,247 45,366 107,757 87,856 INTEREST EXPENSE: Interest on deposits 23,448 17,208 44,559 33,269 Interest on federal funds purchased & securities sold under repurchase agreements 457 228 915 471 Other interest expense 937 980 1,881 1,722 Total interest expense 24,842 18,416 47,355 35,462 Net interest revenue 30,405 26,950 60,402 52,394 Provision for credit losses 1,190 1,393 2,366 2,457 Net interest revenue, after provision for credit losses 29,215 25,557 58,036 49,937 OTHER REVENUE: Mortgage lending 926 (318) 1,825 (494) Trust income 486 455 950 896 Service charges 3,657 3,325 7,042 6,302 Security gains (losses), net (24) 478 (39) (111) Life insurance income 621 678 1,367 1,361 Other 1,611 818 3,194 2,366 Total other revenue 7,277 5,436 14,339 10,320 OTHER EXPENSES: Salaries and employee benefits 12,104 10,478 24,927 21,560 Net occupancy expense 1,794 1,749 3,531 3,419 Equipment expense 1,885 1,603 3,691 3,208 Deposit insurance premiums 1,301 1,219 2,604 2,433 Other 7,659 6,854 15,447 13,143 Total other expenses 24,743 21,903 50,200 43,763 Income before income taxes 11,749 9,090 22,175 16,494 Income tax expense 3,752 2,350 7,137 4,365 Net income 7,997 6,740 15,038 12,129 Net income per share 0.91 0.77 1.71 1.39 Dividends declared per common share 0.30 0.27 0.60 0.54 See accompanying notes to consolidated condensed financial statements.
BANCORPSOUTH, INC. Consolidated Condensed Statements of Cash Flows (Unaudited) (In Thousands)
Six Months Ended June 30 1995 1994 Net cash provided by operating activities 8,247 105,086 Investing activities: Proceeds from calls and maturities of held-to-maturity securities 66,494 29,625 Proceeds from calls and maturities of available-for-sale securities 160,784 261,998 Proceeds from sales of held-to-maturity securities 994 - Proceeds from sales of available-for-sale securities 225 4,000 Purchases of held-to-maturity securities (25,795) (95,398) Purchases of available-for-sale securities (128,133) (244,107) Net increase in short-term investments (68,350) (38,900) Net increase in loans (84,362) (108,573) Purchases of premises and equipment (8,831) (4,307) Other (5,508) (7,315) Net cash used by investing activities (93,476) (201,983) Financing activities: Net increase in deposits 127,686 79,300 Net decrease in short-term borrowings and other liabilities (29,956) (2,715) Increase (decrease) in long-term debt (1,729) 24,862 Payment of cash dividends (4,747) (4,249) Issuance of common stock 119 219 Other 171 182 Net cash provided by financing activities 91,544 97,599 Increase in cash and cash equivalents 6,315 702 Cash and cash equivalents at beginning of period 131,452 122,848 Cash and cash equivalents at end of period 137,767 123,550 See accompanying notes to consolidated condensed financial statements BANCORPSOUTH, INC. 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, 1994, 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 financial statements have been included and all such adjustments were of a normal recurring nature. The results of operations for the three-month and six-month periods ended June 30, 1995 are not necessarily indicative of the results to be expected for the full year. 2. On March 31, 1995, the Company merged with LF Bancorp, Inc. ("LF Bancorp"), the parent company of Laurel Federal Savings and Loan Association, headquartered in Laurel, Mississippi. The consolidated total assets of LF Bancorp were $189.5 million at the merger date. Each share of outstanding LF Bancorp common stock was exchanged for 1.013 shares of the Company's common stock. A total of 832,101 shares of the Company's common stock were issued to effect the transaction. This business combination was accounted for by the pooling-of-interests method. Accordingly, financial statements for periods prior to the merger have been restated. 3. Comparative net income per share amounts have been restated to reflect the acquisition of LF Bancorp, which was accounted for as a pooling-of-interests. The computation of net income per share is based upon weighted average number of shares outstanding (8,828,225 and 8,734,960 for the three months ended June 30, 1995, and 1994, respectively; 8,814,792 and 8,733,849 for the six months ended June 30, 1995, and 1994, 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"). Laurel was a subsidiary of LF Bancorp, Inc. which merged into the Company on March 31, 1995, in a business combination accounted for by the pooling-of-interests method. Accordingly, all the information regarding the financial condition and results of operations on which this discussion is based reflects the combined results of the Company and LF Bancorp for the periods analyzed. This discussion should be read in conjunction with the unaudited consolidated condensed financial statements for the periods ended June 30, 1995 and 1994. Reference is also made to Note 2 to those unaudited consolidated condensed financial statements for additional discussion regarding the merger with LF Bancorp. RESULTS OF OPERATIONS Net Income The Company's net income for the second quarter of 1995 was $8.0 million compared to $6.74 million in the second quarter of 1994. For the first six months of 1995, net income was $15.04 million, an increase of 24.0% from $12.13 million for the same period of 1994. Net income per share was $0.91 for the second quarter of 1995 compared to $0.77 in 1994. For the first six months of 1995, earnings per share were $1.71, an increase of 23.0% from $1.39 for the first six months of 1994. The annualized returns on average assets for the second quarter of 1995 and 1994 were 1.15% and 1.03%, respectively. For the six months ended June 30, the annualized returns on average assets were 1.09% and 0.95% for 1995 and 1994, 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 $31.32 million for the three months ended June 30, 1995, compared to $27.67 million for the same period in 1994. For the six months ended June 30, 1995 and 1994, net interest revenue was $62.26 million and $54.28 million, respectively. Earning assets averaged $2.58 billion in the second quarter and $2.55 billion for the first six months of 1995, compared with $2.40 billion and $2.35 billion in the respective periods in 1994. Average interest-bearing liabilities were $2.20 billion in the second quarter and $2.15 billion for the first six months of 1995, compared with $2.03 billion and $1.99 billion in the respective periods in 1994. Net interest revenue, expressed as a percentage of average earning assets, was 4.88% for the second quarter of 1995 as compared to 4.62% for the same period of 1994 and 4.93% for the first six months of 1995 as compared to 4.65% for the same period of 1994. 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 experi ence 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 $1.19 million for the second quarter of 1995 compared to $1.39 million for the same period of 1994. For the six month periods ended June 30, 1995 and 1994, the provision for credit losses totaled $2.37 million and $2.46 million, respectively. The quality of the Company's loan portfolio is evidenced by the low levels of charge-offs experienced in the first six months of 1995. The allowance for credit losses as a percent of loans outstanding was 1.54% at the end of the second quarter 1995, compared to 1.50% at December 31, 1994. Other Revenue Other revenue for the quarter ended June 30, 1995, totaled $7.28 million compared to $5.44 million for the same period of 1994, a 33.9% increase. For the six months ended June 30, 1995 and 1994, other revenue was $14.34 million and $10.32 million, respectively, a 38.9% increase. The most significant change in other revenue was in mortgage lending where income of $1.83 million was recorded during the first six months of 1995 versus a loss of $0.49 million in the same period of 1994. This loss was attributable to realized and unrealized losses on mortgage loans held for sale during the rising rate environment of the first six months of 1994. Trust income and life insurance premiums both showed a modest increase. Service charges on deposit accounts for the first six months increased 11.7%. Other Expenses Other expenses totaled $24.74 million for the second quarter of 1995, a 13.0% increase from the same period of 1994. For the six months ended June 30, 1995, other expenses totaled $50.20 million , a 14.7% increase over 1994's other expenses. The components of other expenses reflect normal increases for personnel related expenses and general inflation in the cost of services and supplies purchased by the Company. Also included in other expenses for the first six months of 1995 are amounts totalling $577,000 related to merger and acquisition activity. Income Tax Income tax expense was $3.75 million and $2.35 million for the second quarters of 1995 and 1994, respectively. For the six month period ended June 30, 1995, income tax expense was $7.14 million compared to $4.37 million for the same period in 1994. The increase in the Company's effective tax rate (32.2% for the first six months of 1995 versus 26.5% for comparable period of 1994) reflects the decrease in the relative level of the Company's investment in assets with respect to which earnings are afforded favorable tax treatment. The Company's taxable net income continues to increase. 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 $1.92 billion at June 30, 1995, which represents a 4.6% increase from the December 31, 1994 total of $1.83 billion. Non- performing loans were 0.46% of all loans outstanding at June 30, 1995, compared to 0.48% at the end of 1994. Investment Securities and Other Earning Assets The securities portfolios are used to make various term invest ments, to provide a source of liquidity and to serve as collateral to secure certain types of deposits. Held-to-maturity securities at June 30, 1995, were $444.8 million compared with $496.8 million at the end of 1994, a 10.5% decrease. Available for sale securities were $132.0 million at June 30, 1995, compared to $150.6 million at December 31, 1994, a 12.3% decrease. 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 $2.47 billion as compared to $2.34 billion at December 31, 1994, representing a 5.5% 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, 1995, the Company's Tier 1 capital and total capital, as a percentage of total risk-adjusted assets, was 11.67% and 13.88%, 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 8.25% at June 30, 1995, 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, 1995. At this meeting, the following matters were voted upon by the Company's shareholders: (a) Election of Class III Directors Aubrey Burns Patterson, Frank A. Riley, Dr. Andrew R. Townes and J. Louis Griffin, Jr. were elected to serve as Class III directors of the Company until the annual meeting of shareholders in 1998 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 Aubrey Burns Patterson 6,560,602 25,939 0 Frank A. Riley 6,557,111 29,430 0 Dr. Andrew R. Townes 6,557,680 28,861 0 J. Louis Griffin, Jr. 6,472,601 113,940 0 The following directors continue in office following the meeting: NAME Term Expires A. Douglas Jumper 1996 Turner O. Lashlee 1996 W. G. Holliman, Jr. 1996 Alan W. Perry 1996 S. H. Davis 1997 Hassell H. Franklin 1997 Travis E. Staub 1997 Lowery A. Woodall 1997 (b) 1994 Stock Incentive Plan and 1995 Non Qualified Stock Option Plan for Non-Employee Directors The Company's shareholders jointly approved the Company's 1994 Stock Incentive Plan and 1995 Non-Qualified Stock Option Plan for Non-Employee Directors by the following vote: Votes Cast Votes Cast Abstentions/ in Favor Against or Withheld Non Votes 6,080,683 395,818 110,040 (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, 1995 by the following vote: Votes Cast Votes Cast Abstentions/ in Favor Against or Withheld Non Votes 6,546,141 6,077 34,323 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) (27) Financial Data Schedule (b) On June 22, 1995, the Registrant filed a Current Report on Form 8-K disclosing under Item 5 the signing of a definitive agreement providing for the merger of Wes- Tenn Bancorp, Inc. with and into the Registrant and filing a copy of the merger agreement as an exhibit. 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 11, 1995 _____________________________________ L. Nash Allen, Jr. Treasurer and Chief Financial Officer
EX-27 2 ARTICLE 9 FDS FOR 10-Q
9 6-MOS DEC-31-1995 JAN-1-1995 JUN-30-1995 124,414 13,353 68,350 0 132,043 132,043 132,043 1,918,843 29,483 2,817,727 2,465,922 36,473 32,134 46,298 22,065 0 0 214,835 2,817,727 86,852 15,481 4,205 107,757 44,559 47,355 60,402 2,366 (39) 50,200 22,175 15,038 0 0 15,038 1.71 1.71 4.93 1,563 3,811 506 0 28,142 1,623 598 29,483 29,483 0 0
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