 BancorpSouth, Inc.
Investor Presentation
March 2012
Exhibit 99.1 |
 Forward Looking Information
2
Certain
statements
contained
in
this
presentation
and
the
accompanying
slides
may
not
be
based
on
historical
facts
and
are
“forward-looking
statements”
within
the
meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking statements may be
identified
by
reference
to
a
future
period
or
by
the
use
of
forward-looking
terminology,
such
as
“anticipate,”
“believe,”
“estimate,”
“expect,”
“foresee,”
“may,”
“might,”
“will,”
“intend,”
“could,”
“would”
or “plan,”
or future or conditional verb tenses, and variations or negatives of such terms.
These forward-looking statements include, without limitation, statements
about the use of non-GAAP financial measures, maturities of our CDs, pro forma capital ratios, our strategic focus, results of operations and financial condition. We
caution you not to place undue reliance on the forward-looking statements
contained in this presentation, in that actual results could differ materially from those indicated in
such forward-looking statements as a result of a variety of factors. These
factors include, but are not limited to, conditions in the financial markets and economic conditions
generally, the ongoing debt crisis and the downgrade of the sovereign credit
ratings for various nations, the adequacy of the Company’s provision and allowance for credit
losses
to
cover
actual
credit
losses,
the
credit
risk
associated
with
real
estate
construction,
acquisition
and
development
loans,
losses
resulting
from
the
significant
amount
of
the Company’s other real estate owned, limitations on the Company’s
ability to declare and pay dividends, the impact of legal or administrative proceedings, the availability of
capital on favorable terms if and when needed, liquidity risk, governmental
regulation, including the Dodd Frank Act, and supervision of the Company’s operations, the impact
of regulations on service charges on the Company’s core deposit accounts, the
susceptibility of the Company’s business to local economic conditions, the soundness of other
financial
institutions,
changes
in
interest
rates,
the
impact
of
monetary
policies
and
economic
factors
on
the
Company’s
ability
to
attract
deposits
or
make
loans,
volatility
in
capital and credit markets, reputational risk, the impact of hurricanes or other
adverse weather events, any requirement that the Company write down goodwill or other
intangible assets, diversification in the types of financial services the Company
offers, competition with other financial services companies, risks in connection with completed or
potential acquisitions, the Company’s growth strategy, interruptions or
breaches in the Company’s information system security, the failure of certain third party vendors to
perform,
dilution
caused
by
the
Company’s
issuance
of
any
additional
shares
of
its
common
stock
to
raise
capital
or
acquire
other
banks,
bank
holding
companies,
financial
holding companies and insurance agencies, the effectiveness of the Company’s
internal controls, other factors generally understood to affect the financial results of financial
services companies and other factors detailed from time to time in the
Company’s press releases and filings with the Securities and Exchange Commission. Forward-looking
statements speak only as of the date they were made, and, except
as required by law, we do not undertake any obligation to update or revise
forward-looking statements to reflect events or circumstances after the
date of this presentation. Certain tabular presentations may not reconcile because of rounding. Unless otherwise noted, any quotes in
this presentation can be attributed to company management.
|
 This presentation contains financial information determined by methods other than
those prescribed by accounting principles generally accepted in the United
States ("GAAP'). Management uses this "non-GAAP" financial measure in its analysis of the Company's capital.
Management
believes
that
the
ratio
of
tangible
shareholders’
equity
to
tangible
assets
is
important
to
investors
who
are
interested
in
evaluating
the adequacy of the Company's capital levels.
You should not view these disclosures as a substitute for results determined in
accordance with GAAP, and they are not necessarily comparable to
non-GAAP measures used by other companies. The limitations associated with this measure are the risks that persons might
disagree as to the appropriateness of items comprising this measure and that
different companies might calculate this measures differently. Information
provided in the Appendix of this presentation reconciles this non-GAAP measure with comparable measures calculated in
accordance with GAAP.
Non-GAAP Financial Disclaimer
3 |
 Strong core capital base
Overview of BancorpSouth, Inc.
Data as of and for the year ended December 31, 2011
Insurance ranking from Business Insurance Magazine as of December 31, 2010
$13.0 billion in assets
287 locations with reach throughout a 9-state footprint
Customer-focused business model with comprehensive line of financial products
and banking services for individuals and small to mid-size businesses
Nation’s
26
th
largest
insurance
agency
/
brokerage
operation
Strong
mortgage
operations
with
production
totaling
$1.2
billion
for
2011
Consistent core earnings with over 35% of total revenue derived from
noninterest sources
4 |
 5
Regional Management Structure |
 6
Fourth Quarter Financial Highlights
Net income of $13.3 million, or $0.16 per diluted share
Improvement in credit quality indicators including the provision
for
credit losses, total NPLs and NPAs, nonaccrual loan formation and
near-term past dues
Net interest margin remained stable at 3.69%
Mortgage production increased to $390 million, although a negative
MSR market valuation adjustment reduced mortgage revenue by
$1 million
Capital levels improved:
12/31/11
9/30/11
12/31/10
Tangible Common Equity / Tangible Assets
7.67%
7.58%
7.00%
Tier I Capital
11.77%
11.36%
10.61%
Total Capital
13.03% 12.62%
11.87%
At and for the three months ended December 31, 2011 |
 Common
Stock Offering Pro forma capital ratios assume $109 million of net
proceeds. Closed $115 million common stock
offering on January 24, 2012
Improves capitalization at the
Holding Company and maintains
flexibility at the Bank
Increases Holding Company
liquidity
Enhances strategic flexibility
Positioned for recovery
Ability to invest
Opportunistic M&A
Holding Company Capital Ratios
7
7.67%
10.15%
11.77%
13.03%
8.46%
11.28%
12.90%
14.16%
6.00%
9.00%
12.00%
15.00%
TCE / TA
Tier 1 Common
Ratio
Tier 1 Ratio
Total Capital Ratio
12/31/11
12/31/11 Pro Forma |
 Stable
Net Interest Margin Fiscal Year
Quarter Ended
Shown on a fully taxable equivalent basis
8
3.68%
3.75%
3.77%
3.70%
3.69%
3.71%
3.66%
3.69%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
2007
2008
2009
2010
3/31/11
6/30/11
9/30/11
12/31/11 |
 Mortgage
lending
11%
Card and
merchant fees
16%
Service
charges
25%
Trust income
4%
Insurance
commissions
32%
Other
12%
Diversified Revenue Stream
Percentages and amounts based on data for the twelve months ended December 31,
2011 *Excludes net securities gains of $12.1 million and MSR impairment of
$13.7 million Noninterest Revenue Composition
Insurance and mortgage businesses
provide significant sources of noninterest
revenue
Historically, over 35% of total revenue
has been derived from noninterest
sources
Insurance commissions were up 6% for
2011 compared to 2010
Mortgage production volume totaled $1.2
billion for 2011
Total Noninterest Revenue of $272.4M*
9 |
 Core
Deposit Franchise Reduced reliance on public funds
deposits and single service CDs
Noninterest bearing deposits have
grown approximately 10% since
December 31, 2010
Cost of total deposits for the quarter
ended December 31, 2011 was 0.67%
Over $1 billion in CDs are maturing over
the next two quarters at a weighted
average rate of approximately 1.26%
As of and for the periods ended December 31, 2011
$11.0B Total
Deposit Composition
10
Non-Interest
Bearing
21%
Interest Bearing
DDA
43%
Time
27%
Savings
9% |
 11
Lending and Credit |
 Credit Quality Improvement
Non-performing loans decreased 11.2% from the previous quarter
Non-performing assets decreased 5.6% from the previous quarter
Both NPLs and NPAs have declined for three consecutive quarters
Provision for credit losses declined $5.9 million, or 23.3%, compared to
the previous quarter and $73.9 million, or 36.2%, for the year ended
12/31/11 compared to the prior year
51% of non-accrual loans paying as agreed
85% of non-accrual loans were impaired and carried at 68% of unpaid
principal balance (“UPB”)
12
Sales of OREO properties during the quarter totaled $16.7 million, resulting in no
material net gain/loss. OREO is carried at 54% of aggregate loan
balances at time of foreclosure
At and for the three months ended December 31, 2011
includes loans < 30days past due with payments occurring at least
quarterly “Paying as agreed” |
 Commercial &
Industrial
16%
Consumer Mortgages
22%
Home
Equity
6%
Agricultural
3%
C&I Owner-Occupied
15%
Construction,
Acquisition & Dev.
10%
Commercial Real
Estate
20%
Credit Cards
1%
Other
7%
Loans / NPLs By Category
Net loans and leases as of December 31, 2011
NPLs include nonaccrual loans, loans 90+ days past due and restructured loans
$8.9B Portfolio
Loans By Category
NPLs By Category
13
Commercial & Industrial
4%
Consumer Mortgages
16%
Home Equity
1%
Agricultural
1%
C&I Owner-
Occupied
13%
Construction, Acquisition
& Development
42%
Commercial
Real Estate
19%
Credit Cards
1%
Other
2% |
 Loans
/ NPLs By Geography Loans By Geography
NPLs By Geography
14
AL & FL
Panhandle
16%
AR**
8%
MS**
17%
MO
15%
Greater
Memphis
13%
TN**
9%
TX & LA
18%
Other*
4%
AL & FL
Panhandle
8%
AR**
14%
MS**
29%
MO
6%
Greater
Memphis
6%
TN**
8%
TX & LA
19%
Other*
10%
Net loans and leases as of December 31, 2011
NPLs include nonaccrual loans, loans 90+ days past due and restructured loans
*”Other” includes all other geographic regions and lines of business not managed by a
geographic region **Excludes the Greater Memphis Area
|
 Decreased Exposure in CAD Portfolio
15
Dollars in millions
Net loans and leases
$601
$570
$523
$456
$420
$393
$377
$342
3/31/10
6/30/10
9/30/10
12/31/10
3/31/11
6/30/11
9/30/11
12/31/11
$1,429
$1,419
$1,336
$1,117
$977
$908
$1,061
$1,175
Residential CAD
All Other Construction, Acquisition and Development
$0
$300
$600
$900
$1,200
$1,500 |
 NPL
Improvement 16
Dollars in millions
NPLs include nonaccrual loans, loans 90+ days past due and restructured loans
$394
$425
$380
$363
$322
$200
$250
$300
$350
$400
$450
12/31/10
3/31/11
6/30/11
9/30/11
12/31/11
Total NPLs Have Declined Over $100 Million Since the Peak at 3/31/11
|
 17
Newly Identified Non-Accrual Loans
Dollars in millions
Newly identified non-accrual loans for quarters ended as of dates shown
Q4 11 Non-Accrual Loan Formation Represents the Lowest Level in Ten
Quarters $83
$136
$166
$131
$111
$50
$61
$39
$143
$131
$74
$60
$52
$48
$54
$38
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
3/31/10
6/30/10
9/30/10
12/31/10
3/31/11
6/30/11
9/30/11
12/31/11
Newly Identified Non-Accrual Loans
Loans 30-89 Days Past Due, Still Accruing |
 Non-Accrual Loans
18
Dollars
in
millions
includes loans < 30 days past due with payments occurring at least
quarterly 51% of non-accrual loans were paying as agreed as of December
31, 2011 $0
$100
$200
$300
$400
12/31/10
3/31/11
6/30/11
9/30/11
12/31/11
Non-Accrual Lns Paying as Agreed
All Other Non-Accrual Lns
“Paying as Agreed”
36%
37%
47%
48%
51% |
 Data for quarters ended as of dates shown
Positive Trends in Net Charge-Offs
% Avg. Loans
19
$51
$52
$33
$23
$24
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
$0
$10
$20
$30
$40
$50
$60
12/31/10
3/31/11
6/30/11
9/30/11
12/31/11
Net Charge-Offs
Net Charge-offs / Average loans
Dollars in millions |
 Strategic Focus
Preserve strong capital and position the Company for growth
Focus on continuing improvement in asset quality
Pursue quality loan growth
Grow core earnings through loan growth and noninterest revenue growth
Expense control and reduction
20 |
 Appendix |
 22
Non-GAAP Financial Reconciliation
Tangible Common Equity / Tangible Assets (TCE/TA)
Pro Forma
As of
As of
As of
12/31/2011*
12/31/2011
9/30/2011
12/31/2010
(In Thousands, Except Percentages)
Common Equity --> A
$1,371,912
$1,262,912
$1,266,753
$1,222,244
Assets --> B
13,104,851
12,995,851
13,198,518
13,615,010
Intangibles --> C
287,910
287,910
288,723
289,720
Tangible Common Equity --> D=A-C
1,084,002
975,002
978,030
932,524
Tangible Assets --> E=B-C
12,816,941
12,707,941
12,909,795
13,325,290
*Assumes $109 million of net proceeds from common stock offering
8.46%
7.67%
7.58%
7.00%
Tangible Common Equity / Tangible Assets (%) --
> F=D/E |