. . . EXHIBIT 99.1 NEWS RELEASE [BANCORPSOUTH(R) LOGO] CONTACT: L. Nash Allen, Jr. Gary C. Bonds Treasurer and Chief Financial Senior Vice President and Officer Controller 662/680-2330 662/680-2332 BANCORPSOUTH, INC. ANNOUNCES FOURTH-QUARTER 2003 FINANCIAL RESULTS TUPELO, Miss., Jan. 21, 2004 /PRNewswire-FirstCall via COMTEX/ -- BancorpSouth, Inc. (NYSE: BXS) today announced that net income for the fourth quarter of 2003 was $28.9 million, a 12.7 percent increase from $25.6 million for the fourth quarter of 2002. Net income per basic and diluted share was $0.37 for the fourth quarter of 2003, up 12.1 percent from $0.33 for the fourth quarter of 2002. Net income increased 17.1 percent for full-year 2003, to $131.1 million from $112.0 million for full-year 2002. Net income per basic share rose 20.7 percent for 2003 to $1.69 from $1.40 for 2002, and net income per diluted share increased 20.9 percent to $1.68 from $1.39. Aubrey Patterson, Chairman and Chief Executive Officer of BancorpSouth, remarked, "We are pleased with BancorpSouth's financial and operating results for the fourth quarter and for full-year 2003, especially during a period of low loan demand. Consistent with trends throughout 2003, our fourth-quarter results were driven by strong growth in non-interest revenue, including the more than doubling of our insurance commissions for the fourth quarter compared with the fourth quarter of last year. We attribute this growth, as well as substantial gains in mortgage lending and other non-interest revenue, to our continuing long-term strategy to provide a greater variety of financial services to our core retail and small-to-mid-size business markets. In addition to creating stronger customer relationships, the successful growth of these non-interest revenue products and services significantly increased the diversification of our revenue stream, with non-interest revenue for 2003 expanding to 54.1% of net interest revenue for the year, up from 33.6% for 2002. "The expansion of non-interest revenue more than offset a 6.8% decline in fourth-quarter net interest revenue compared with the same period in 2002, which, consistent with our full-year results, reflected lower interest rates and loan demand. However, we were pleased to see initial indications of improving loan demand during the latter part of the fourth quarter. With substantial liquidity, solid credit quality and conservative capitalization, we are confident of our prospects, assuming an improving economy, for expanding our loan portfolio during 2004." -MORE- Box 789 - Tupelo, MS 38802-0789 - (662) 680-2000 BANCORPSOUTH, INC. is a bank holding company. BXS Announces Fourth-Quarter Results Page 2 January 21, 2004 Net Interest Revenue For the fourth quarter of 2003, interest revenue was $126.2 million, a decrease of 12.7 percent from $144.5 million for the fourth quarter of 2002 and a 2.8 percent decrease from $129.8 million for the third quarter of 2003. Interest expense declined 23.0 percent to $40.1 million for the fourth quarter of 2003 from $52.1 million for the fourth quarter of 2002 and declined 4.4 percent from $42.0 million for the third quarter of 2003. The average taxable equivalent yield on earning assets for the fourth quarter of 2003 was 5.39 percent compared with 6.19 percent for the fourth quarter of 2002 and 5.52 percent for the third quarter of 2003. The average rate paid on interest bearing liabilities declined to 1.99 percent for the fourth quarter of 2003 from 2.55 percent for the fourth quarter last year and from 2.07 percent for the third quarter this year. Net interest revenue for the fourth quarter of 2003 was $86.1 million, down 6.8 percent from $92.4 million for the fourth quarter of 2002 and down 2.0 percent from $87.8 million for the third quarter of 2003. Net interest margin was 3.70 percent for the fourth quarter of 2003, compared with 4.00 percent for the fourth quarter of 2002 and 3.76 percent for the third quarter of 2003. Patterson continued, "Although the decline in net interest revenue for the quarter is partially the result of lower loan volume and interest rates when compared to the fourth quarter of 2002, it also reflects proactive steps taken earlier in the year to manage our assets and liabilities to limit our exposure to changing interest rates. As discussed in our first-quarter news release, we foresaw the potential of our substantial securities sale - undertaken during the first quarter to narrow our interest sensitivity gap - to contribute to a reduced net interest margin in the event of stable or declining interest rates. We stand by this decision to better position the Company for rising interest rates, and we note that, despite the comparable-quarter declines during 2003, net interest margin has remained within a range of six basis points for the past three sequential quarters." Deposit and Loan Activity Total assets were $10.3 billion at December 31, 2003, a 1.1 percent increase from $10.2 billion at December 31, 2002. Total deposits at the end of 2003 were $8.6 billion, a 0.6 percent increase from $8.5 billion at the end of 2002. Total loans at December 31, 2003, were $6.2 billion, down 2.4 percent from $6.4 billion at December 31, 2002. "Responding to a 2.4 percent decline in the loan portfolio in 2003, we reduced our total savings and time deposits by 2.5 percent," said Patterson. "We produced an increase in total deposits, however, through 8.7 percent growth in non-interest bearing demand deposits and 2.8 percent growth in interest bearing demand deposits, which we attribute to increased market penetration. In addition to providing BancorpSouth a low-cost source of funds, we believe the increased market share implicit in this demand-deposit growth strengthens our prospects for further expansion in a recovering economy." -MORE- BXS Announces Fourth-Quarter Results Page 3 January 21, 2004 Provision for Credit Losses and Allowance for Credit Losses BancorpSouth's provision for credit losses for the fourth quarter of 2003 was $7.5 million, up 3.4 percent from $7.2 million for the fourth quarter of 2002 and 60.2 percent from $4.7 million for the third quarter of 2003. Annualized net charges-offs declined to 0.38 percent of average loans for the fourth quarter of 2003 from 0.43 percent for the fourth quarter of last year, and increased from 0.34 percent for the third quarter of 2003. Non-performing loans were $51.4 million at December 31, 2003, or 0.83 percent of loans, compared with $39.6 million, or 0.62 percent of loans, at December 31, 2002, and $46.3 million, or 0.74 percent of loans, at September 30, 2003. The allowance for credit losses also increased to 1.48 percent of loans at the end of 2003 from 1.38 percent at the end of 2002 and 1.45 percent at the end of the third quarter of 2003. Mr. Patterson added, "We remain pleased with BancorpSouth's credit quality at year end, which, after a multi-year period of economic weakness, is a tribute to the soundness of the Company's lending and credit practices. Although the provision for credit losses increased slightly on a comparable quarter basis, it fell 14.6 percent for the full year versus full-year 2002. Our net charge-offs as a percentage of average loans improved on an annual and quarterly comparable-period basis, and we strengthened our allowance for credit losses. Both of these indicators of asset quality for BancorpSouth compare well to industry averages. Because BancorpSouth is primarily a secured lender, we do not anticipate a significant rise in charge-offs despite the increase in non-performing loans at year-end." Non-Interest Revenue BancorpSouth's non-interest revenue increased 47.3 percent for the fourth quarter of 2003 to $48.1 million from $32.6 million for the fourth quarter of 2002 and declined 3.5 percent from $49.8 million for the third quarter of 2003. The largest portion of the comparable-quarter revenue growth is attributable to the 121.0 percent increase in insurance commissions, to $13.1 million from $5.9 million, primarily as a result of the second-quarter acquisition of Wright & Percy Insurance and the third-quarter acquisition of Ramsey, Krug, Farrell & Lensing Insurance. In addition, mortgage lending revenue increased 83.2 percent, service charges increased 17.1 percent and other non-interest revenue increased 47.4 percent. Reflecting the relatively stable interest rate environment, the Company's mortgage lending revenue of $6.4 million for the fourth quarter of 2003 included the recovery of $3.8 million of a previously recorded non-cash impairment charge against the mortgage servicing asset. Mortgage lending revenue for the fourth quarter of 2002 of $3.5 million included a non-cash provision for the impairment of the asset of $3.2 million. The Company expects mortgage lending revenue will continue to be affected by non-cash impairment charges and recoveries against its mortgage servicing asset due to changing interest rates. Also reflecting a shift to higher mortgage interest rates, mortgage originations for the fourth quarter of 2003 totaled $140.6 million compared with $365.6 million for the fourth quarter of 2002. Nevertheless, the Company's total mortgage originations for 2003 totaled $1.2 billion, significantly above the $1.0 billion in total originations produced for 2002. -MORE- BXS Announces Fourth-Quarter Results Page 4 January 21, 2004 "We expect our increasing ability to provide more comprehensive financial services to our customers will continue to be a key element of our long-term strategy for profitable growth," remarked Patterson. "We are focused on increasing non-interest revenue, as we fully roll out new and existing products and services across our six-state core market. We also will continue to evaluate accretive acquisitions like those completed in 2003. Our mortgage servicing business remains an important component of our growth strategy. Although we would expect mortgage origination volume to slow in response to higher interest rates, the record level of low interest rate originations achieved for 2003 and 2002 has significantly reduced the pre-payment risk of our $2.8 billion mortgage servicing portfolio in a rising rate environment, making it a more predictable source of future revenue." Non-Interest Expense Non-interest expense increased 3.0 percent to $84.8 million for the fourth quarter of 2003 from $82.3 million for the fourth quarter of 2002. This increase primarily resulted from a 9.7 percent rise in salaries and employee benefits, which reflected the integration of the Company's acquisition of two insurance agencies in the second and third quarters. The acquisitions also increased other non-interest expenses, which totaled $23.9 million for the fourth quarter of 2003 compared with $22.2 million for the third quarter of 2003. Other non-interest expenses for the fourth quarter of 2003 declined 5.8 percent from $25.4 million for the fourth quarter of 2002. Capital Management During the fourth quarter of 2003, BancorpSouth repurchased 116,200 shares of its common stock under a stock repurchase plan authorized in April 2003. A total of 443,508 shares had been purchased at December 31, 2003 under this plan which authorized the repurchase of up to 3.9 million shares. Combined with the shares repurchased earlier under separate plans for the repurchase of 4.2 million shares and 4.1 million shares, BancorpSouth had repurchased approximately 8.7 million shares of its common stock as of December 31, 2003, or 10.4 percent of its outstanding shares at March 31, 2001, when the first of these plans was authorized. BancorpSouth will continue to evaluate additional share repurchases under the April 2003 plan, which authorizes these repurchases during a two-year period. Summary "The foundation for BancorpSouth's profitable growth for the fourth quarter and full-year 2003 is consistent and high quality customer service provided by well trained, experienced people," concluded Patterson. "Our ingrained culture of community bank-style service, and the strong customer relationships that develop as a result, have not only differentiated BancorpSouth over many years but have also driven the growth that has enabled us to steadily enhance the sophistication and comprehensiveness of the financial products and services we provide. We are confident that the qualities that have produced profitable growth and increased shareholder value in each of the three challenging years since the economy began to weaken in 2000 will continue to support us in today's still uncertain economic environment and become even more compelling in a period of sustained economic expansion." -MORE- BXS Announces Fourth-Quarter Results Page 5 January 21, 2004 Conference Call BancorpSouth will conduct a conference call with analysts at 1:30 p.m. (Central Time) on January 22, 2004. Investors may listen via the Internet by accessing BancorpSouth's website at http://www.bancorpsouth.com. A replay of the conference call will be available at BancorpSouth's website for at least two weeks following the call. Forward-Looking Statements Certain statements contained in this news release 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 their reference to a future period or periods or by the use of forward-looking terminology such as "anticipate," "believe," "estimate," "expect," "may," "might," "will," "would," "could" or "intend." These forward-looking statements include, without limitation, those relating to interest rates, loan demand and lending activities, market share, credit quality, expansion of loan portfolio and resulting benefits, non-interest revenue, expansion of products and services, internal growth and acquisitions, common stock repurchase plan, shareholder value, strategies to achieve consistent long-term growth and BancorpSouth's future growth and profitability. We caution you not to place undue reliance on the forward-looking statements contained in this news release in that actual results could differ materially from those indicated in such forward-looking statements, due to a variety of factors. Those factors include, but are not limited to, changes in economic conditions and government fiscal and monetary policies, fluctuations in prevailing interest rates, the ability to maintain credit quality, the ability of BancorpSouth to effectively integrate acquisitions, changes in laws and regulations affecting financial institutions in general, possible adverse rulings, judgments, settlements and other outcomes of pending litigation, the ability of BancorpSouth to compete with other financial services companies, the ability of BancorpSouth to provide competitive services and products, changes in BancorpSouth's operating or expansion strategy, geographic concentration of BancorpSouth's assets, availability of and costs associated with obtaining adequate and timely sources of liquidity, the ability of BancorpSouth to attract, train and retain qualified personnel, the ability of BancorpSouth to effectively market its services and products, the ability of BancorpSouth to repurchase its common stock on favorable terms, the ability of BancorpSouth to identify potential acquisitions, changes in consumer preferences, other factors generally understood to affect the financial results of financial services companies, and other factors described from time to time in BancorpSouth's filings with the Securities and Exchange Commission. We undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made. BancorpSouth, Inc. is a bank holding company headquartered in Tupelo, Mississippi with approximately $10.3 billion in assets. BancorpSouth operates approximately 250 commercial banking, insurance, trust and broker/dealer locations in Alabama, Arkansas, Louisiana, Mississippi, Tennessee and Texas. -MORE- SELECTED FINANCIAL DATA Three Months Ended Twelve Months Ended December 31, December 31, ---------------------------- ----------------------------- 2003 2002 2003 2002 ----------- ----------- ----------- ----------- (Dollars in thousands, except per share amounts) EARNINGS SUMMARY: Net interest revenue $ 86,085 $ 92,394 $ 351,106 $ 371,526 Provision for credit losses 7,472 7,228 25,130 29,411 Non-interest revenue 48,074 32,628 190,086 124,826 Non-interest expense 84,827 82,325 322,594 304,985 ----------- ----------- ----------- ----------- Income before income taxes 41,860 35,469 193,468 161,956 Income tax provision 12,990 9,848 62,334 49,938 ----------- ----------- ----------- ----------- Net income $ 28,870 $ 25,621 $ 131,134 $ 112,018 =========== =========== =========== =========== Earning per share: Basic $ 0.37 $ 0.33 $ 1.69 $ 1.40 =========== =========== =========== =========== Diluted: $ 0.37 $ 0.33 $ 1.68 $ 1.39 =========== =========== =========== =========== BALANCE SHEET DATA AT DECEMBER 31: Total assets $10,303,478 $10,189,247 Total earning assets 9,466,037 9,427,250 Loans and lease receivables, net of unearned discount 6,233,067 6,389,385 Allowance for credit losses 92,112 87,875 Total deposits 8,599,128 8,548,918 Common shareholders' equity 869,210 807,823 Book value per share 11.15 10.40 AVERAGE BALANCE SHEET DATA: Total assets $10,213,475 $10,133,283 $10,236,772 $ 9,882,168 Total earning assets 9,471,363 9,447,700 9,517,008 9,232,615 Loans and lease receivables, net of unearned discount 6,200,368 6,357,688 6,276,805 6,283,798 Total deposits 8,495,008 8,490,567 8,533,115 8,247,444 Common shareholders' equity 859,823 802,890 845,899 810,893 NON-PERFORMING ASSETS AT DECEMBER 31: Non-accrual loans $ 18,139 $ 10,514 Loans 90+ days past due 30,634 29,104 Restructured loans 2,659 20 Other real estate owned 14,952 18,978 Net charge-offs as a percentage of average loans (annualized) 0.38% 0.43% 0.33% 0.41% PERFORMANCE RATIOS (ANNUALIZED) Return on average assets 1.12% 1.00% 1.28% 1.13% Return on common equity 13.32% 12.66% 15.50% 13.81% Net interest margin 3.70% 4.00% 3.80% 4.15% Average shares outstanding - diluted 78,368,591 78,576,536 78,163,647 80,480,627 BANCORPSOUTH, INC. CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS) (UNAUDITED) December 31, December 31, 2003 2002 ------------ ------------ Assets Cash & due from banks $ 369,699 $ 356,976 Interest bearing deposits with other banks 9,327 5,007 Held-to-maturity securities 1,091,991 1,193,375 Available-for-sale securities 1,989,690 1,642,172 Federal funds sold and securities purchased under agreement to resell 67,293 139,508 Loans & leases 6,233,067 6,389,385 Allowance for credit losses (92,112) (87,875) ------------ ------------ Net loans & leases 6,140,955 6,301,510 Loans held for sale 74,669 57,804 Bank premises & equipment 212,216 210,183 Accrued interest receivable 75,914 83,614 Other real estate owned 14,952 18,978 Other assets 256,772 180,120 ------------ ------------ Total assets $ 10,303,478 $ 10,189,247 ============ ============ Liabilities Demand deposits: Non-interest bearing $ 1,286,607 $ 1,183,127 Interest bearing 2,524,159 2,455,821 ------------ ------------ Total demand deposits 3,810,766 3,638,948 Savings & time deposits: Savings 779,298 824,902 Certificates of deposit 4,009,064 4,085,068 ------------ ------------ Total savings & time deposits 4,788,362 4,909,970 ------------ ------------ Total deposits 8,599,128 8,548,918 Federal funds purchased and securities sold under agreement to repurchase 437,014 457,389 Short-term borrowings 0 0 Accrued interest payable 17,140 23,306 Junior subordinated debt 128,866 125,000 Long-term debt 138,498 139,757 Other liabilities 113,622 87,054 ------------ ------------ Total liabilities 9,434,268 9,381,424 ------------ ------------ Shareholders' Equity Common stock 194,817 194,202 Capital surplus 43,344 20,773 Unrealized gain (loss) on securities 14,602 37,744 Retained earnings 616,447 555,104 ------------ ------------ Total shareholders' equity 869,210 807,823 ------------ ------------ Total liabilities and shareholders' equity $ 10,303,478 $ 10,189,247 ============ ============ BANCORPSOUTH, INC. CONSOLIDATED STATEMENTS OF INCOME (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) QUARTER ENDED YEAR TO DATE ------------------------------------------------------------ --------------------- DEC-03 SEP-03 JUN-03 MAR-03 DEC-02 DEC-03 DEC-02 -------- -------- -------- -------- -------- -------- -------- Interest Revenue: Loans, including fees $ 95,678 $ 99,188 $103,146 $105,252 $110,129 $403,263 $451,127 Held-to-maturity securities: 11,691 12,199 14,707 15,818 15,681 54,416 64,779 Available-for-sale securities 17,986 17,063 13,026 14,221 16,277 62,297 62,702 Short term investments 868 1,362 2,315 2,391 2,451 6,935 11,810 -------- -------- -------- -------- -------- -------- -------- Total interest revenue 126,223 129,812 133,194 137,682 144,538 526,911 590,418 Interest Expense: Deposits 33,929 35,260 39,289 40,544 44,695 149,022 188,530 Short term borrowings 1,090 1,055 987 904 1,132 4,036 4,621 Long term borrowings 2,070 2,075 2,079 2,082 2,090 8,306 8,365 Junior subordinated debt 2,547 2,547 2,547 2,547 2,547 10,188 9,423 Other interest expense 502 1,067 1,223 1,461 1,680 4,253 7,953 -------- -------- -------- -------- -------- -------- -------- Total interest expense 40,138 42,004 46,125 47,538 52,144 175,805 218,892 -------- -------- -------- -------- -------- -------- -------- Net interest revenue 86,085 87,808 87,069 90,144 92,394 351,106 371,526 Provision for credit losses 7,472 4,664 6,472 6,522 7,228 25,130 29,411 -------- -------- -------- -------- -------- -------- -------- Net interest revenue, after credit loss provision 78,613 83,144 80,597 83,622 85,166 325,976 342,115 Non-Interest Revenue Mortgage lending 6,441 10,323 1,634 4,854 3,515 23,252 2,515 Service charges 15,882 16,131 16,232 13,654 13,557 61,899 49,249 Life insurance premiums 657 760 876 961 1,031 3,255 4,340 Trust income 2,138 1,905 1,684 1,486 1,767 7,214 7,021 Securities gains, net 40 60 180 13,556 170 13,837 5,486 Insurance commissions 13,101 11,946 8,314 6,387 5,927 39,749 23,604 Other 9,815 8,695 10,962 11,411 6,661 40,880 32,611 -------- -------- -------- -------- -------- -------- -------- Total non-interest revenue 48,074 49,820 39,882 52,309 32,628 190,086 124,826 Non-Interest Expense Salaries and employee benefits 47,633 46,449 44,974 42,754 43,431 181,810 163,691 Occupancy 5,853 5,932 5,609 5,580 5,497 22,973 21,658 Equipment 5,569 6,063 5,776 6,003 6,093 23,411 24,962 Telecommunications 1,874 1,915 1,828 1,860 1,948 7,477 7,827 Other 23,898 22,192 20,113 20,719 25,356 86,923 86,847 -------- -------- -------- -------- -------- -------- -------- Total non-interest expense 84,827 82,551 78,300 76,916 82,325 322,594 304,985 -------- -------- -------- -------- -------- -------- -------- Income before income taxes 41,860 50,413 42,179 59,015 35,469 193,468 161,956 Income tax expense 12,990 16,539 12,938 19,867 9,848 62,334 49,938 -------- -------- -------- -------- -------- -------- -------- Net Income $ 28,870 $ 33,874 $ 29,241 $ 39,148 $ 25,621 $131,134 $112,018 ======== ======== ======== ======== ======== ======== ======== Net Income Per Share: Basic $ 0.37 $ 0.43 $ 0.38 $ 0.51 $ 0.33 $ 1.69 $ 1.40 ======== ======== ======== ======== ======== ======== ======== Diluted $ 0.37 $ 0.43 $ 0.37 $ 0.50 $ 0.33 $ 1.68 $ 1.39 ======== ======== ======== ======== ======== ======== ======== BANCORPSOUTH, INC. AVERAGE BALANCES, INTEREST INCOME AND EXPENSE, AND AVERAGE YIELDS AND RATES (DOLLARS IN THOUSANDS) (UNAUDITED) QUARTER ENDED DECEMBER 31, 2003 ------------------------------------------- AVERAGE YIELD/ BALANCE INTEREST RATE ------------ -------- ------ (Taxable equivalent basis) ASSETS Loans net of Unearned Income $ 6,272,715 $ 96,018 6.07% Held-to-maturity securities: Taxable 889,669 9,831 4.38% Non Taxable 154,458 2,861 7.35% Available-for-sale securities: Taxable 1,813,225 16,108 3.52% Non Taxable 185,682 2,889 6.17% Short term investments 155,614 868 2.21% ------------ -------- Total interest earning assets and revenue 9,471,363 128,575 5.39% Other assets 833,404 Less: allowance for credit losses (91,292) ------------ Total $ 10,213,475 ============ LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand - interest bearing $ 2,477,156 $ 5,168 0.83% Savings 784,774 1,405 0.71% Time 4,003,151 27,355 2.71% Short-term borrowings 472,366 1,592 1.34% Junior subordinated debt 125,042 2,547 8.15% Long-term debt 138,608 2,070 5.92% ------------ -------- Total interest bearing liabilities and expense 8,001,097 40,137 1.99% Demand deposits - non-interest bearing 1,229,927 Other liabilities 122,628 ------------ Total liabilities 9,353,652 Shareholders' equity 859,823 ------------ Total $ 10,213,475 ============ -------- Net interest revenue $ 88,438 ======== Net interest margin 3.70% Net interest rate spread 3.40% Interest bearing liabilities to interest earning assets 84.48% Net interest tax equivalent adjustment $ 2,353 BANCORPSOUTH, INC. AVERAGE BALANCES, INTEREST INCOME AND EXPENSE, AND AVERAGE YIELDS AND RATES (DOLLARS IN THOUSANDS) (UNAUDITED) QUARTER ENDED DECEMBER 31, 2002 ------------------------------------------- AVERAGE YIELD/ BALANCE INTEREST RATE ------------ -------- ------ (Taxable equivalent basis) ASSETS Loans net of Unearned Income $ 6,431,410 $110,573 6.82% Held-to-maturity securities: Taxable 1,014,286 13,328 5.21% Non Taxable 187,603 3,619 7.65% Available-for-sale securities: Taxable 1,317,550 14,118 4.25% Non Taxable 204,586 3,322 6.44% Short term investments 292,265 2,451 3.33% ------------ -------- Total interest earning assets and revenue 9,447,700 147,411 6.19% Other assets 773,798 Less: allowance for credit losses (88,215) ------------ Total $ 10,133,283 ============ LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand - interest bearing $ 2,414,759 $ 8,099 1.33% Savings 832,530 2,788 1.33% Time 4,128,077 33,808 3.25% Short-term borrowings 459,505 2,812 2.43% Junior subordinated debt 125,000 2,547 8.15% Long-term debt 139,859 2,090 5.93% ------------ -------- Total interest bearing liabilities and expense 8,099,730 52,144 2.55% Demand deposits - non-interest bearing 1,115,201 Other liabilities 115,463 ------------ Total liabilities 9,330,394 Shareholders' equity 802,890 ------------ Total $ 10,133,284 ============ -------- Net interest revenue $ 95,267 ======== Net interest margin 4.00% Net interest rate spread 3.64% Interest bearing liabilities to interest earning assets 85.73% Net interest tax equivalent adjustment $ 2,873 2 BANCORPSOUTH, INC. AVERAGE BALANCES, INTEREST INCOME AND EXPENSE, AND AVERAGE YIELDS AND RATES (DOLLARS IN THOUSANDS) (UNAUDITED) YEAR TO DATE DECEMBER 31, 2003 ------------------------------------------- AVERAGE YIELD/ BALANCE INTEREST RATE ------------ -------- ------ (Taxable equivalent basis) ASSETS Loans net of Unearned Income $ 6,342,430 $404,734 6.38% Held-to-maturity securities: Taxable 1,130,833 46,319 4.10% Non Taxable 164,762 12,455 7.56% Available-for-sale securities: Taxable 1,412,151 54,426 3.85% Non Taxable 191,589 12,108 6.32% Short term investments 275,243 6,935 2.52% ------------ -------- Total interest earning assets and revenue 9,517,008 536,977 5.64% Other assets 810,463 Less: allowance for credit losses (90,699) ------------ Total $ 10,236,772 ============ LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand - interest bearing $ 2,478,188 $ 24,186 0.98% Savings 799,861 7,074 0.88% Time 4,074,487 117,761 2.89% Short-term borrowings 475,391 8,290 1.74% Junior subordinated debt 125,011 10,188 8.15% Long-term debt 139,082 8,306 5.97% ------------ -------- Total interest bearing liabilities and expense 8,092,020 175,805 2.17% Demand deposits - non-interest bearing 1,180,579 Other liabilities 118,274 ------------ Total liabilities 9,390,873 Shareholders' equity 845,899 ------------ Total $ 10,236,772 ============ -------- Net interest revenue $361,172 ======== Net interest margin 3.80% Net interest rate spread 3.47% Interest bearing liabilities to interest earning assets 85.03% Net interest tax equivalent adjustment $ 10,066 3 BANCORPSOUTH, INC. AVERAGE BALANCES, INTEREST INCOME AND EXPENSE, AND AVERAGE YIELDS AND RATES (DOLLARS IN THOUSANDS) (UNAUDITED) YEAR TO DATE DECEMBER 31, 2002 -------------------------------------------- AVERAGE YIELD/ BALANCE INTEREST RATE ------------ -------- ------ (Taxable equivalent basis) ASSETS Loans net of Unearned Income $ 6,342,682 $452,982 7.14% Held-to-maturity securities: Taxable 998,800 55,091 5.52% Non Taxable 194,089 14,905 7.68% Available-for-sale securities: Taxable 1,160,733 54,065 4.66% Non Taxable 199,218 13,287 6.67% Short term investments 337,093 11,810 3.50% ------------ -------- Total interest earning assets and revenue 9,232,615 602,140 6.52% Other assets 735,800 Less: allowance for credit losses (86,247) ------------ Total $ 9,882,168 ============ LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand - interest bearing $ 2,338,775 $ 35,756 1.53% Savings 852,694 12,689 1.49% Time 3,991,757 140,085 3.51% Short-term borrowings 457,347 12,574 2.75% Junior subordinated debt 114,726 9,423 8.15% Long-term debt 140,085 8,366 5.97% ------------ -------- Total interest bearing liabilities and expense 7,895,384 218,893 2.77% Demand deposits - non-interest bearing 1,064,218 Other liabilities 111,673 ------------ Total liabilities 9,071,275 Shareholders' equity 810,893 ------------ Total $ 9,882,168 ============ -------- Net interest revenue $383,247 ======== Net interest margin 4.15% Net interest rate spread 3.75% Interest bearing liabilities to interest earning assets 85.52% Net interest tax equivalent adjustment $ 11,721