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                                                                    Exhibit 20.1

FOR RELEASE MONDAY, MAY 4, 1998

                              CONTACT:    Harry Baxter 601-680-2410
                                          BancorpSouth
                                          Howell N. Gage 601-630-2211
                                          Merchants


     Tupelo, Miss. -- The holding companies of Bank of Mississippi,
headquartered in Tupelo, and Merchants Bank of Vicksburg have entered into a
binding agreement to merge.

     BancorpSouth, Inc., (NYSE/BXS) holding company of BancorpSouth Bank which
does business in Mississippi as Bank of Mississippi, and Merchants Capital
Corporation, holding company of Merchants Bank, today announced the signing of a
definitive agreement to merge Merchants Capital Corporation into BancorpSouth,
subject to approval of the shareholders of Merchants Capital Corporation and
federal and state regulatory authorities.

     Under the terms of the agreement, shareholders of Merchants Capital will
receive 1.884 shares of BancorpSouth, Inc. common stock in exchange for each
share of Merchants Capital Corporation common stock. The
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exchange rate will be adjusted to reflect BancorpSouth's previously announced
two-for-one stock split effected in the form of a 100% stock dividend that will
be issued on May 15, 1998.

     On a post-split basis, Merchants' shareholders will receive 3.768 shares of
BancorpSouth stock for each share of Merchants' Capital Corporation common
stock. The subsidiary banks of the two bank holding companies will also be
merged.

     The transaction will be structured as a pooling of interests and as a
tax-free exchange to the shareholders Merchants Capital. In connection with the
transaction, BancorpSouth has been granted an option to acquire up to 19% of the
common stock of Merchants, subject to certain limitations, terms, and conditions
set forth in a stock option agreement between Merchants and BancorpSouth.

     The merger represents an in-market transaction between BancorpSouth and
Merchants. The combination of the two banks will give Bank of Mississippi a more
significant share of the Vicksburg and Warren County banking market. Bank of
Mississippi currently operates two branch offices in Vicksburg while Merchants
operates four Vicksburg locations. Merchants also operates two additional branch
offices in Utica and Edwards in Hinds County and a loan production office in
Jackson, Miss.
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     As of March 31, 1998, BancorpSouth's total assets were $4.4 billion while
Merchants Capital Corporation assets totaled $222.2 million. The combining of
the two banks is expected to result in a reduction of duplicative operating
expenses. The merger is expected to be slightly dilutive to BancorpSouth's 1998
earnings per share but antidilutive in 1999.

     Based on the closing price of BancorpSouth's common stock as traded on the
New York Stock Exchange, the transaction is valued at $63,136,000.

     BancorpSouth has a total of 134 offices serving 55 Mississippi and
Tennessee communities.

     BancorpSouth Chairman and CEO Aubrey B. Patterson said "Merchants Bank is a
truly outstanding institution. It is a bulwark of the Vicksburg business
community, and Merchants' philosophy of planting deep roots in the Vicksburg
market mirrors that of Bank of Mississippi. Like us, they have strong ties to
the state and local economy, and they will bring great strength to our Company.
Together, we can lend a higher level of service to the Vicksburg, Edwards and
Utica markets."

     Merchants' Chairman and CEO Gage said, "Merchants is quite pleased to
affiliate with such a fine company and such capable people. Bank of Mississippi
is an extremely well run bank which shares our commitments of service to
customers, concern for employees and development of the
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communities we serve. This merger will allow us to carry forward these
commitments while remaining viable and competitive in the rapidly changing
financial services industry."

     STATEMENTS ARE CONSIDERED TO BE FORWARD-LOOKING STATEMENTS WITHIN THE
MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH STATEMENTS
ARE BASED ON MANAGEMENTS CURRENT EXPECTATIONS AND THE CURRENT ECONOMIC
ENVIRONMENT. ACTUAL STRATEGIES AND RESULTS IN FUTURE PERIODS MAY DIFFER
MATERIALLY FROM THOSE CURRENTLY EXPECTED DUE TO VARIOUS RISKS AND UNCERTANTIES.
ADDITIONAL DISCUSSIONS OF FACTORS AFFECTING BANCORPSOUTH, INC.'S BUSINESS AND
PROSPECTS IS CONTAINED IN THE COMPANY'S PERIODIC FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION.