EXHIBIT 99.1
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 FINANCIAL RESULTS FOR THE FIRST QUARTER OF 2004
TUPELO, Miss., Apr. 16, 2004 /PRNewswire-FirstCall via COMTEX/ -- BancorpSouth,
Inc. (NYSE: BXS) today announced that net income for the first quarter of 2004
was $27.2 million, or $0.35 per basic and diluted share, compared with net
income of $39.1 million, or $0.51 per basic share and $0.50 per diluted share,
for the first quarter of 2003. Results for the first quarter of 2003 include the
impact of net gains from securities sales of $13.6 million ($8.4 million after
tax or $0.11 per diluted share).
"While our financial results for the first quarter of 2004 reflected the impact
of low interest rates on our investment and loan yields, they also continued to
demonstrate the strategic benefits of our ongoing initiatives to diversify
through the growth of noninterest revenues," said Aubrey Patterson, Chairman and
Chief Executive Officer of BancorpSouth. "During the first quarter, these
benefits were particularly evident in the more-than doubling of our insurance
commissions, to $14.5 million from $6.4 million for the first quarter of last
year. This increase was nearly double the $4.2 million decline in net interest
revenue after loan loss provision between the comparable quarters. We remain
confident that our conservative lending and investment policies will serve us
well as the economy continues to recover. We expect the dual effect of increased
loan demand and rising asset yields will enhance revenue in a recovering
economic environment. We will continue to pursue our strategies for expanding
market share in our core six-state market through both our traditional community
banking business and our increasing array of noninterest revenue products and
services."
Net Interest Revenue
Interest revenue for the first quarter of 2004 was $123.2 million, a 10.5
percent decrease from $137.7 million for the first quarter of 2003 and a 2.4
percent decline from $126.2 million for the fourth quarter of 2003. Interest
expense declined 16.5 percent for the first quarter of 2004 to $39.7 million
from $47.5 million for the first quarter of 2003 and declined 1.1 percent from
$40.1 million for the fourth quarter of 2003.
The average taxable equivalent yield on earning assets fell to 5.22 percent for
the first quarter of 2004 from 6.00 percent for the first quarter of 2003 and
5.39 percent for the fourth quarter of 2003. The average rate paid on interest
bearing liabilities decreased to 1.94 percent for the first quarter of 2004 from
2.36 percent for the first quarter of 2003 and 1.99 percent for the fourth
quarter of 2003.
Net interest revenue for the first quarter of 2004 was $83.5 million, down 7.4
percent from $90.1 million for the first quarter of 2003 and down 3.0 percent
from $86.1 million for the fourth quarter of 2003. Net interest margin declined
to 3.57 percent for the first quarter of 2004 from 3.97 percent for the first
quarter of 2003 and 3.70 percent for the fourth quarter of 2003.
"The decline in net interest revenue for the first quarter primarily reflects
the difficulty in a low interest rate environment of reducing funding costs
enough to offset falling asset yields," Patterson added. "Despite this
challenge, we have continued a conservative stance in the average maturity of
our investment assets, which, despite incremental short-term costs, better
prepares us for a rising
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rate environment. In addition, because rates paid on interest bearing
liabilities have fallen to such low levels, we are constrained in our ability to
further lower them because of the value we place on long-term customer
relationships. The impact of these decisions, which are consistent with the
conservative operating philosophies of our organization, is reflected in the
compression of our net interest margin for the quarter."
Deposit and Loan Activity
Total assets increased 2.4 percent to $10.6 billion at the end of the first
quarter of 2004 from $10.3 billion at March 31, 2003. Total deposits rose 2.2
percent to $8.9 billion at the end of the first quarter of 2004 from $8.7
billion at the end of the first quarter of 2003. Total loans were $6.28 billion
at March 31, 2004, down 0.3 percent from $6.31 billion at March 31, 2003. Loan
growth has continued to be impacted by the Company's decision to reduce its
exposure to indirect automobile sales financing and certain higher risk consumer
loans by allowing its portfolio of such loans to decline. The Company's
portfolio of such loans totaled $48.4 million at March 31, 2004, down from $59.2
million at December 31, 2003 and $95.7 million at March 31, 2003.
Patterson said, "Although loan activity in our markets for the first quarter of
2004 was less than early indications suggested, we are pleased that total loans
essentially stabilized compared to the end of the first quarter of 2003 and
December 31, 2003. As a result of our ongoing efforts to manage interest rate
exposure, our total savings and other time deposits declined by 2.6% for the
first quarter of 2004 when compared to the same period of 2003. Total deposits
increased as a result of an 8.7% growth in our demand deposits, a low-cost
source of funds that we believe reflects our expanding share of our six-state
market."
Provision for Credit Losses and Allowance for Credit Losses
The provision for credit losses was $4.0 million for the first quarter of 2004,
down 38.4 percent from $6.5 million for the first quarter of 2003 and 46.3
percent from $7.5 million for the fourth quarter of 2003. Annualized net
charge-offs were 0.31 percent of average loans for the first quarter of 2004
compared with 0.30 percent for the first quarter of 2003 and 0.38 percent for
the fourth quarter of 2003.
Non-performing loans at March 31, 2004 were $39.8 million, or 0.64 percent of
loans, compared with $40.2 million, or 0.64 percent of loans, at March 31, 2003,
and $51.4 million, or 0.83 percent of loans, at December 31, 2003. The allowance
for credit losses was 1.46 percent of loans at March 31, 2004, 1.43 percent of
loans at March 31, 2003 and 1.48 percent of loans at December 31, 2003.
Patterson continued, "Our first quarter results demonstrate that strong credit
quality remains a hallmark of BancorpSouth. We were particularly pleased with
the drop in annualized charge-offs and the 22.7 percent reduction in
non-performing loans compared to the fourth quarter of 2003. As a result of
these improvements, we reduced our provision for credit losses substantially for
the first quarter of 2004 on both a comparable and sequential quarter basis,
while maintaining an allowance for credit losses as a percentage of loans
consistent with that of prior periods."
Noninterest Revenue
Noninterest revenue for the first quarter of 2004 was $46.0 million, a decrease
of 12.0 percent from $52.3 million for the first quarter of 2003 and a decrease
of 4.2 percent from $48.1 million for the fourth quarter of 2003. During the
first quarter of 2004, mortgage lending reflected a loss of $1.1 million
primarily as a result of a $2.3 million non-cash charge for impairment of the
Company's mortgage servicing asset. For the first quarter of 2003, mortgage
lending produced revenue of $4.9 million that included an $815,000 reversal of
previously recorded impairment charges. The Company originated $149.8 million in
mortgage loans during the first quarter of 2004, down from $302.4 million for
the first quarter of 2003. For the fourth consecutive year, the Company sold its
accumulated inventory of government guaranteed student loans during the first
quarter, generating
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a $2.4 million gain which equaled the $2.4 million gain for such sales in the
first quarter of 2003. Net gains of $618,000 on the sale of securities were
recorded in the first quarter of 2004. This compares to net gains of $13.6
million in the first quarter of 2003 as the Company sold intermediate term bonds
pursuant to its efforts to manage its interest rate risk.
BancorpSouth's insurance commissions grew 126.4 percent to $14.5 million for the
first quarter of 2004 from $6.4 million for the first quarter of 2003 and 10.4
percent from $13.1 million for the fourth quarter of 2003. The growth compared
to the first quarter of 2003 is primarily a result of the acquisition of Wright
& Percy Insurance, Baton Rouge, Louisiana, in the second quarter of 2003 and the
acquisition of Ramsey, Krug, Farrell & Lensing Insurance, Little Rock, Arkansas,
in the third quarter of 2003.
"One of the primary goals of our initiatives to increase noninterest revenue is
to lessen the Company's exposure to interest rate risk, and we believe that
significant progress has been made toward achieving that goal," remarked
Patterson. "Although we continue to expect mortgage originations to slow
compared with 2003, we believe we have additional significant opportunities to
expand noninterest revenue through growth of our existing products and services
within existing markets, through acquisitions and through geographic expansion."
Noninterest Expense
For the first quarter of 2004, noninterest expense increased 11.8 percent to
$86.0 million from $76.9 million for the first quarter of 2003 and 1.4 percent
from $84.8 million for the fourth quarter of 2003. Consistent with the growth in
noninterest expense for the fourth quarter of 2003, this increase primarily
reflects a 17.0 percent increase in salaries and employee benefits principally
as a result of the acquisitions of two insurance agencies in the second and
third quarters of 2003.
Capital Management
BancorpSouth repurchased 588,900 shares of its common stock during the first
quarter of 2004 under a stock repurchase plan authorized in April 2003 for the
repurchase of up to 3.9 million shares. A total of 1,032,408 shares had been
purchased under this plan at the end of the first quarter of 2004. Combined with
the shares repurchased earlier under separate plans for the repurchase of 4.2
million shares and 4.1 million shares, respectively, BancorpSouth had
repurchased approximately 9.3 million shares of its common stock as of March 31,
2004, or 11.1 percent of its outstanding shares at March 5, 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
Patterson concluded, "In many respects, BancorpSouth's first-quarter results are
attributable to disciplined decisions we made to adhere to our conservative
lending and investment philosophies. We believe these philosophies underlie our
long-term record of enhanced shareholder value, despite the short-term costs
they entail. We will continue to proactively manage our assets and liabilities
to decrease our exposure to changing interest rates, even as we diversify our
revenue streams through the growth of noninterest revenues. As a result of
conservative operating philosophies that have built a strong, liquid and well
capitalized Company, we believe we have well positioned BancorpSouth for success
in an improving economic environment."
Conference Call
BancorpSouth will conduct a conference call with analysts at 1:30 p.m. (Central
Time) on April 19, 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.
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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, lending and investment policies, market share, credit quality,
mortgage originations, noninterest revenue, expansion of products and services,
geographic expansion 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. These factors include, but are not limited to, changes in economic
conditions and government fiscal and monetary policies, fluctuations in
prevailing interest rates, the ability of BancorpSouth 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 and market 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 manage its growth and effectively serve an expanding
customer and market base, 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 $10.6 billion in assets. BancorpSouth operates
approximately 250 commercial banking, insurance, trust and broker/dealer
locations in Alabama, Arkansas, Louisiana, Mississippi, Tennessee and Texas.
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SELECTED FINANCIAL DATA
Three Months Ended
March 31,
--------------------------------
2004 2003
---------------- ---------------
(Dollars in thousands, except per share amounts)
EARNINGS SUMMARY:
Net interest revenue $ 83,482 $ 90,144
Provision for credit losses (4,015) (6,522)
Noninterest revenue 46,040 52,309
Noninterest expense 86,006 76,916
------------ ------------
Income before income taxes 39,501 59,015
Income tax provision 12,336 19,867
------------ ------------
Net income $ 27,165 $ 39,148
============ ============
Earning per share: Basic $ 0.35 $ 0.51
============ ============
Diluted $ 0.35 $ 0.50
============ ============
BALANCE SHEET DATA AT MARCH 31:
Total assets $ 10,582,429 $ 10,335,009
Total earning assets 9,792,926 9,587,753
Loans and lease receivables, net of unearned discount 6,252,956 6,263,585
Allowance for credit losses (91,327) (89,600)
Total deposits 8,881,115 8,689,351
Common shareholders' equity 882,988 820,610
Book value per share 11.41 10.61
AVERAGE BALANCE SHEET DATA:
Total assets $ 10,453,731 $ 10,191,544
Total earning assets 9,674,642 9,494,684
Loans and lease receivables, net of unearned discount 6,227,264 6,347,818
Total deposits 8,786,720 8,560,002
Common shareholders' equity 867,994 815,907
NON-PERFORMING ASSETS AT MARCH 31:
Non-accrual loans $ 16,410 $ 13,764
Loans 90+ days past due 19,392 26,458
Restructured loans 3,954 17
Other real estate owned 18,176 16,641
Net charge-offs as a percentage
of average loans (annualized) 0.31% 0.30%
PERFORMANCE RATIOS (ANNUALIZED)
Return on average assets 1.05% 1.56%
Return on common equity 12.59% 19.46%
Net interest margin 3.57% 3.97%
Average shares outstanding - diluted 78,123,071 77,857,362
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BANCORPSOUTH, INC.
CONSOLIDATED BALANCE SHEETS
March 31, %
----------------------------
2004 2003 Change
--------------------------------------
(In thousands)
Assets
- ------
Cash and due from banks $ 329,876 $ 351,278 (6.09%)
Interest bearing deposits with other banks 199,820 26,305 659.63%
Held-to-maturity securities, at amortized cost 1,320,134 1,864,519 (29.20%)
Available-for-sale securities, at fair market value 1,906,746 1,069,325 78.31%
Federal funds sold and securities
purchased under agreement to resell 72,511 303,735
Loans 6,284,805 6,305,533 (0.33%)
Less: Unearned discount (31,849) (41,948) (24.08%)
Allowance for credit losses (91,327) (89,600) 1.93%
------------ ------------
Net loans 6,161,629 6,173,985 (0.20%)
Loans held for sale 40,759 60,283 (32.39%)
Premises and equipment, net 212,797 210,789 0.95%
Accrued interest receivable 66,682 70,919 (5.97%)
Goodwill 59,671 32,462 83.82%
Other assets 211,804 171,409 23.57%
------------ ------------
Total Assets $ 10,582,429 $ 10,335,009 2.39%
============ ============
Liabilities
- -----------
Deposits:
Demand: Noninterest bearing $ 1,320,812 $ 1,214,216 8.78%
Interest bearing 2,704,473 2,489,120 8.65%
Savings 788,679 819,430 (3.75%)
Other time 4,067,151 4,166,585 (2.39%)
------------ ------------
Total deposits 8,881,115 8,689,351 2.21%
Federal funds purchased and
securities sold under agreement
to repurchase 416,222 446,932 (6.87%)
Accrued interest payable 18,816 25,036 (24.84%)
Junior subordinated debt securities 128,866 125,000 3.09%
Long-term debt 138,170 139,450 (0.92%)
Other liabilities 116,252 88,630 31.16%
------------ ------------
Total Liabilities 9,699,441 9,514,399 1.94%
Shareholders' Equity
- --------------------
Common stock 193,456 193,319 0.07%
Capital surplus 43,833 21,115 107.59%
Accumulated other comprehensive income 27,598 30,677 (10.04%)
Retained earnings 618,101 575,499 7.40%
------------ ------------
Total Shareholders' Equity 882,988 820,610 7.60%
------------ ------------
Total Liabilities & Shareholders' Equity $ 10,582,429 $ 10,335,009 2.39%
============ ============
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BANCORPSOUTH, INC.
CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
QUARTER ENDED
------------------------------------------------------------
MAR 2004 DEC 2003 SEPT 2003 JUN 2003 MAR 2003
------------ ---------- ----------- ---------- -----------
INTEREST REVENUE:
Loans $ 92,250 $ 94,822 $ 98,292 $ 102,369 $ 104,546
Deposits with other banks 128 96 67 100 84
Federal funds sold and securities purchased
under agreement to resell 697 772 1,295 2,215 2,307
Held-to-maturity securities:
Taxable 10,112 9,831 10,258 12,628 13,602
Tax-exempt 1,796 1,860 1,941 2,079 2,216
Available-for-sale securities:
Taxable 15,688 16,108 15,160 11,031 12,127
Tax-exempt 1,759 1,878 1,903 1,995 2,094
Loans held for sale 756 856 896 777 706
--------- --------- --------- --------- ---------
Total interest revenue 123,186 126,223 129,812 133,194 137,682
--------- --------- --------- --------- ---------
INTEREST EXPENSE:
Deposits 33,918 33,929 35,260 39,289 40,544
Federal funds purchased and securities sold
under agreement to repurchase 1,063 1,551 2,018 2,191 2,355
Other 4,723 4,658 4,726 4,645 4,639
--------- --------- --------- --------- ---------
Total interest expense 39,704 40,138 42,004 46,125 47,538
--------- --------- --------- --------- ---------
Net interest revenue 83,482 86,085 87,808 87,069 90,144
Provision for credit losses 4,015 7,472 4,664 6,472 6,522
--------- --------- --------- --------- ---------
Net interest revenue, after provision for
credit losses 79,467 78,613 83,144 80,597 83,622
--------- --------- --------- --------- ---------
NONINTEREST REVENUE:
Mortgage lending (1,141) 6,441 10,323 1,634 4,854
Service charges 14,318 15,882 16,131 16,232 13,654
Life insurance premiums 562 657 760 876 961
Trust income 1,686 2,138 1,905 1,684 1,486
Security gains, net 618 40 60 180 13,556
Insurance commissions 14,458 13,101 11,946 8,314 6,387
Other 15,539 9,815 8,695 10,962 11,411
--------- --------- --------- --------- ---------
Total noninterest revenue 46,040 48,074 49,820 39,882 52,309
--------- --------- --------- --------- ---------
NONINTEREST EXPENSE:
Salaries and employee benefits 50,036 47,633 46,449 44,974 42,754
Occupancy, net of rental income 5,956 5,853 5,932 5,609 5,580
Equipment 5,460 5,569 6,063 5,776 6,003
Telecommunications 1,838 1,874 1,915 1,828 1,860
Other 22,716 23,898 22,192 20,113 20,719
--------- --------- --------- --------- ---------
Total noninterest expenses 86,006 84,827 82,551 78,300 76,916
--------- --------- --------- --------- ---------
Income before income taxes 39,501 41,860 50,413 42,179 59,015
Income tax expense 12,336 12,990 16,539 12,938 19,867
--------- --------- --------- --------- ---------
Net income $ 27,165 $ 28,870 $ 33,874 $ 29,241 $ 39,148
========= ========= ========= ========= =========
Net income per share: Basic $ 0.35 $ 0.37 $ 0.43 $ 0.38 $ 0.51
========= ========= ========= ========= =========
Diluted $ 0.35 $ 0.37 $ 0.43 $ 0.37 $ 0.50
========= ========= ========= ========= =========
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BANCORPSOUTH, INC.
AVERAGE BALANCES, INTEREST INCOME AND EXPENSE,
AND AVERAGE YIELDS AND RATES
(DOLLARS IN THOUSANDS)
(UNAUDITED)
QUARTER ENDED
MARCH 31, 2004
---------------------------------------------
AVERAGE YIELD/
(Taxable equivalent basis) BALANCE INTEREST RATE
------- -------- ----
ASSETS
Loans net of unearned income $ 6,314,778 $ 93,522 5.96%
Held-to-maturity securities:
Taxable 998,854 10,113 4.07%
Tax-exempt 149,264 2,762 7.44%
Available-for-sale securities:
Taxable 1,742,486 15,686 3.62%
Tax-exempt 165,208 2,706 6.59%
Short-term investments 304,052 825 1.09%
------------ ------------
Total interest earning
assets and revenue 9,674,642 125,614 5.22%
Other assets 871,419
Less: allowance for credit losses (92,330)
------------
Total $ 10,453,731
============
LIABILITIES AND
SHAREHOLDERS' EQUITY
Deposits:
Demand - interest bearing $ 2,701,052 $ 5,694 0.85%
Savings 784,161 1,362 0.70%
Other time 4,064,639 26,861 2.66%
Short-term borrowings 411,693 1,097 1.07%
Junior subordinated debt 128,866 2,626 8.19%
Long-term debt 138,282 2,063 6.00%
------------ ------------
Total interest bearing
liabilities and expense 8,228,693 39,703 1.94%
Demand deposits -
noninterest bearing 1,236,868
Other liabilities 120,176
------------
Total liabilities 9,585,737
Shareholders' equity 867,994
------------
Total $ 10,453,731
============ ------------
Net interest revenue $ 85,911
============
Net interest margin 3.57%
Net interest rate spread 3.28%
Interest bearing liabilities to
interest earning assets 85.05%
Net interest tax equivalent adjustment $ 2,428
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BANCORPSOUTH, INC.
AVERAGE BALANCES, INTEREST INCOME AND EXPENSE,
AND AVERAGE YIELDS AND RATES
(DOLLARS IN THOUSANDS)
(UNAUDITED)
QUARTER ENDED
MARCH 31, 2003
--------------------------------------------
AVERAGE YIELD/
(Taxable equivalent basis) BALANCE INTEREST RATE
------- -------- ----
ASSETS
Loans net of unearned income $ 6,398,632 $ 105,660 6.70%
Held-to-maturity securities:
Taxable 1,274,105 13,602 4.33%
Tax-exempt 178,998 3,409 7.72%
Available-for-sale securities:
Taxable 1,056,317 12,127 4.66%
Tax-exempt 201,746 3,222 6.48%
Short-term investments 384,886 2,390 2.52%
------------ ------------
Total interest earning
assets and revenue 9,494,684 140,410 6.00%
Other assets 785,579
Less: allowance for credit losses (88,719)
------------
Total $ 10,191,544
============
LIABILITIES AND
SHAREHOLDERS' EQUITY
Deposits:
Demand - interest bearing $ 2,500,301 $ 7,134 1.16%
Savings 820,832 2,159 1.07%
Other time 4,132,837 31,252 3.07%
Short-term borrowings 445,811 2,364 2.15%
Junior subordinated debt 125,000 2,547 8.15%
Long-term debt 139,559 2,082 6.05%
------------ ------------
Total interest bearing
liabilities and expense 8,164,340 47,538 2.36%
Demand deposits -
noninterest bearing 1,106,032
Other liabilities 105,265
------------
Total liabilities 9,375,637
Shareholders' equity 815,907
------------
Total $ 10,191,544
============ ------------
Net interest revenue $ 92,872
============
Net interest margin 3.97%
Net interest rate spread 3.64%
Interest bearing liabilities to
interest earning assets 85.99%
Net interest tax equivalent adjustment $ 2,728
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