TUPELO, Miss., Jan. 23 /PRNewswire-FirstCall/ -- BancorpSouth, Inc. today announced financial results for the fourth quarter and year ended December 31, 2007.
Highlights of the announcement include: -- An increase in net income and net income per diluted share for the fourth quarter of 2007 of 14.8 percent and 11.4 percent, respectively, from the fourth quarter of 2006. -- A 16.6 percent increase in loans and leases, net of unearned income, to $9.2 billion at the end of 2007 from the end of 2006. -- Expansion of the net interest margin to 3.72 percent for the fourth quarter of 2007 from 3.64 percent for the fourth quarter of 2006 and 3.66 percent for the third quarter of 2007. -- Net interest revenue of $109.7 million for the fourth quarter of 2007, up 13.9 percent from the fourth quarter of 2006. -- Strong credit quality, with minimal exposure to subprime residential mortgages. -- Growth in noninterest revenue of 9.6 percent for the fourth quarter of 2007 compared with the fourth quarter of 2006. -- Recognition of a $2.3 million charge in the fourth quarter of 2007 related to a guarantee of Visa's obligations for certain litigation matters. Fourth Quarter 2007 Summary Results
The Company's net income for the fourth quarter of 2007 increased 14.8 percent to $32.2 million from $28.1 million for the fourth quarter of 2006. Net income per diluted share rose 11.4 percent to $0.39 for the fourth quarter of 2007 from $0.35 for the fourth quarter of 2006.
2007 Summary Results
BancorpSouth's net income for 2007 increased 10.2 percent to $137.9 million from $125.2 million for 2006. Net income per diluted share rose 7.6 percent to $1.69 for 2007 from $1.57 for 2006.
Aubrey Patterson, Chairman and Chief Executive Officer of BancorpSouth, commented, "BancorpSouth achieved profitable growth for the fourth quarter of 2007 and produced a strong performance for the full year. BancorpSouth stood out in a year during which an uncertain economy and an expanding credit crisis significantly affected many financial institutions. It also validated our continuing commitment to a conservative business philosophy designed to produce long-term profitable growth in an industry inherently at risk from interest rate volatility and the economic cycle.
"We attribute a significant portion of the Company's growth for 2007 to the acquisition of The Signature Bank. This transaction further illustrates our proven, conservative expansion strategy, as we entered contiguous markets that were familiar. We focus on markets with diverse economies that produce steady, significant growth and that can perform consistently throughout the economic cycle. As we also do with de novo expansion, we entered these new markets with a veteran management team who share our focus on providing high quality customer service to retail and small to mid-sized businesses.
"In addition, the Company's financial results for the fourth quarter and full-year 2007 reflected conservative lending and credit philosophies that have made strong credit quality a hallmark characteristic of BancorpSouth. As a result, our exposure to the credit issues affecting the subprime residential mortgage market remained immaterial and measures of credit quality continued to be within historic ranges.
"Our long-term strategy of diversifying revenue to reduce interest-rate spread dependency also served us well in 2007. With a comprehensive array of financial products and services, we again produced substantial comparable- quarter growth in noninterest revenue for the fourth quarter, even as a softening insurance market affected the expansion of insurance commission revenue, which had been a primary driver of noninterest revenue growth for the previous seven quarters."
Net Interest Revenue
Interest revenue for the fourth quarter of 2007 increased 13.5 percent, or $24.2 million, to $203.6 million from $179.4 million for the fourth quarter of 2006 and decreased 2.1 percent from $208.0 million for the third quarter of 2007. Interest expense increased 13.0 percent, or $10.8 million, to $93.9 million for the fourth quarter of 2007 from $83.1 million for the fourth quarter of 2006 and decreased 6.1 percent from $100.0 million for the third quarter of 2007.
The average taxable equivalent yield on earning assets increased to 6.84 percent for the fourth quarter of 2007 from 6.70 percent for the fourth quarter of 2006 and decreased from 6.98 percent for the third quarter of 2007. The average rate paid on interest bearing liabilities was 3.68 percent for the fourth quarter of 2007, compared with 3.67 percent for the fourth quarter of 2006 and 3.92 percent for the third quarter of 2007.
Net interest revenue increased 13.9 percent to $109.7 million for the fourth quarter of 2007 from $96.3 million for the fourth quarter of 2006 and increased 1.6 percent from $107.9 million for the third quarter of 2007. Importantly, net interest margin increased to 3.72 percent for the fourth quarter of 2007 compared with 3.64 percent for the fourth quarter of 2006 and 3.66 percent for the third quarter of 2007.
"We produced double-digit comparable-quarter growth in net interest revenue for the second consecutive quarter," said Patterson. "In addition to the positive impact from the strong growth in loans, our expansion of net interest revenue was driven by conservative asset/liability management strategies designed to lower interest rate risk. We continued to fund loan growth for the fourth quarter primarily by redeploying capital from maturing securities into higher yielding loans. This strategy enabled us to restructure liabilities through more selective pricing of public fund deposits and greater use of Federal Home Loan Bank borrowings. While the aggregate impact of these asset/liability management strategies contributed significantly to the improvement in net interest margin on a comparable- quarter and sequential-quarter basis, our strategies also reflected our commitment to serve the needs of core deposit customers and to sustain substantial levels of liquidity."
Deposit and Loan Activity
Total assets at December 31, 2007 increased 9.6 percent to $13.2 billion from $12.0 billion at December 31, 2006. Total deposits grew 3.6 percent to $10.1 billion at December 31, 2007 from $9.7 billion at December 31, 2006. Loans and leases, net of unearned income, increased 16.6 percent to $9.2 billion at December 31, 2007 from $7.9 billion at December 31, 2006.
"The addition of loans from The Signature Bank acquisition accounted for the substantial majority of the 16.6 percent expansion in the portfolio for the fourth quarter of 2007 compared to the fourth quarter of 2006," added Patterson. "We also continued to produce solid organic loan growth, with loans and leases, net of unearned income, increasing 1.4 percent at the end of the quarter from the end of the third quarter. While this rate improved over the 1.0 percent sequential-quarter growth for the third quarter of 2007, it remained consistent with slowing activity due to continuing uncertainty evident in the national economic environment.
"The growth in total deposits also primarily resulted from the acquisition, with demand deposits increasing 5.8 percent during 2007 and savings and other time deposits increasing 1.6 percent. Reflecting the restructuring of the Company's liabilities through our asset/liability management efforts, total deposits at year end decreased 1.2 percent from the end of the third quarter, following sequential-quarter declines of 2.4 percent and 2.1 percent for the third and second quarters of 2007."
Provision for Credit Losses and Allowance for Credit Losses
For the fourth quarter of 2007, the provision for credit losses was $7.8 million compared with $6.3 million for the fourth quarter of 2006 and $5.7 million for the third quarter of 2007. Annualized net charge-offs were 0.21 percent of average loans and leases for the fourth quarter of 2007 compared with 0.25 percent for the fourth quarter of 2006 and 0.13 percent for the third quarter of 2007.
Non-performing loans and leases increased to $29.2 million, or 0.32 percent of loans and leases, at December 31, 2007 from $23.5 million, or 0.30 percent of loans and leases, at December 31, 2006 and declined from $31.3 million, or 0.35 percent of loans and leases, at September 30, 2007. The allowance for credit losses was 1.25 percent of loans and leases at December 31, 2007 compared with 1.26 percent of loans and leases at December 31, 2006 and 1.24 percent of loans and leases at September 30, 2007.
Patterson remarked, "We remain very pleased with our credit quality despite a challenging national economic environment. Non-performing loans and leases at the end of 2007 increased slightly as a percentage of total loans and leases from the end of 2006, while improving from the end of the third quarter of 2007. While we have seen an increase of $13.8 million in other real estate owned since the same time in 2006, we feel these properties will be liquidated without additional loss. Losses from the loans that were secured by these properties have already been reflected in the allowance for credit losses. Net charge-offs declined on a comparable-quarter basis, although they increased from unsustainably low levels for the third quarter of 2007. At 1.25 percent of loans and leases, the allowance for credit losses is consistent with historical levels. Our strong credit quality reflects our commitment to conservative lending policies throughout the economic cycle. These policies substantially limit the Company's participation in the subprime residential mortgage market. As a result, we continue to have only nominal exposure to the credit issues affecting that market, totaling approximately $329,000 at the end of 2007."
Noninterest Revenue
For the fourth quarter of 2007, noninterest revenue increased 9.6 percent to $55.3 million from $50.1 million for the fourth quarter of 2006. These results included a decline in the value of the mortgage servicing asset totaling $4.5 million for the fourth quarter of 2007 and $4.0 million for the fourth quarter of 2006.
Patterson continued, "The growth in noninterest revenue for the fourth quarter resulted from a long-term strategy of providing customers comprehensive financial products and services, which strengthen customer relationships and generate noninterest revenue. While our insurance business drove noninterest revenue growth for the first nine months of 2007, insurance commission revenue was essentially unchanged for the fourth quarter compared with the fourth quarter of 2006 due to soft industry conditions. As a result, other products and services accounted for the growth in noninterest revenue for the fourth quarter, including double-digit comparable-quarter growth in fee revenue from our credit and debit card business and in service charges. We were also pleased with the 6.8 percent growth in revenue from mortgage originations for the fourth quarter compared with the fourth quarter of 2006, and with the 10.1 percent growth in mortgage origination revenue for the full year."
Noninterest Expense
Noninterest expense increased 10.0 percent to $110.2 million for the fourth quarter of 2007 from $100.1 million for the fourth quarter of 2006 and increased 3.6 percent from $106.4 million for the third quarter of 2007. The comparable-quarter increase in noninterest expense is primarily attributable to the acquisition of The Signature Bank, effective March 1, 2007. The Company also incurred additional salaries, employee benefits and occupancy expense associated with the opening of new loan production offices and full- service branch bank offices during 2007, including two new full-service banking locations opened in suburban St. Louis. BancorpSouth recorded a $2.3 million charge in the fourth quarter for liabilities in connection with obligations of Visa, Inc. related to certain settled and pending litigation. BancorpSouth is a member bank of Visa and based on information provided by Visa regarding its planned initial public offering, BancorpSouth expects that its proportionate share of the proceeds will more than offset any liabilities related to such settled and pending litigation.
Capital Management
BancorpSouth repurchased 113,700 shares of its common stock during the fourth quarter of 2007 under a stock repurchase plan for the repurchase of up to three million shares that commenced on May 1, 2007 and expires on April 30, 2009. BancorpSouth will continue to evaluate additional share repurchase opportunities under this plan. The Company has repurchased approximately 12.0 million shares of its common stock since its original share repurchase program was initiated in 2001.
Summary
"We expect the difficult economic environment to continue to challenge the financial services industry," stated Patterson. "Our continuing commitment to conservative operating philosophies and the strength and diversity of markets across our geographic franchise have reduced its effects on the Company, as evidenced by our solid fourth quarter results. In addition, current conditions do not diminish BancorpSouth's substantial long-term opportunities for expanding profitably in existing markets through the addition of new products and services, and by geographic expansion into contiguous markets through de novo bank development and acquisition. As a result, the Company remains well positioned to pursue our long-term objectives as we enter 2008.
"In recognition of current market conditions, our immediate focus for the year will be on providing outstanding service to core customers served by existing operations. We intend to continue to expand into new contiguous markets, albeit cautiously and at a sustainable pace. We remain absolutely committed to preserving strong credit quality, and we will not sacrifice the strength and liquidity of our financial position to drive short-term revenue. These principles have enabled BancorpSouth to achieve a long-term record of profitable growth through many economic cycles. We are confident that they will support further progress toward our long-term goals during 2008."
Conference Call
BancorpSouth will conduct a conference call to discuss its fourth quarter 2007 results tomorrow, January 24, 2008, at 10:00 a.m. (Central Time). 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, statements relating to the liquidation of other real estate owned, proceeds from the Visa initial public offering offsetting liabilities related to Visa litigation, our ability to achieve long-term objectives, our focus for 2008, expansion into new markets, credit policy and repurchases under our common stock repurchase plan.
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 because of a variety of factors. These factors may include, but are not limited to, the amount of BancorpSouth's liability with respect to litigation involving Visa, the amount of proceeds from the Visa initial public offering, changes in economic conditions and government fiscal and monetary policies, fluctuations in prevailing interest rates and the ability of BancorpSouth to manage its assets and liabilities to limit exposure to changing interest rates, the ability of BancorpSouth to increase noninterest revenue and expand noninterest revenue business, the ability of BancorpSouth to maintain credit quality, changes in laws and regulations affecting financial service companies in general, 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, the ability of BancorpSouth to manage its growth and effectively serve an expanding customer and market base, the ability of BancorpSouth to achieve profitable growth and increase shareholder value, the ability of BancorpSouth to attract, train and retain qualified personnel, the ability of BancorpSouth to repurchase its common stock on favorable terms, the ability of BancorpSouth to identify, close and effectively integrate potential acquisitions, the ability of BancorpSouth to expand geographically and enter growing markets, 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 financial holding company headquartered in Tupelo, Mississippi, with approximately $13.2 billion in assets. BancorpSouth Bank, a wholly-owned subsidiary of BancorpSouth, Inc., operates approximately 290 commercial banking, mortgage, insurance, trust and broker/dealer locations in Alabama, Arkansas, Florida, Louisiana, Mississippi, Missouri, Tennessee and Texas.
BancorpSouth, Inc. Selected Financial Data Three Months Ended Twelve Months Ended December 31, December 31, 2007 2006 2007 2006 (Dollars in thousands, except per share amounts) Earnings Summary: Net interest revenue $109,657 $96,251 $422,899 $385,799 Provision for credit losses 7,771 6,325 22,696 8,577 Noninterest revenue 55,314 50,490 231,799 206,094 Noninterest expense 110,169 100,141 428,058 393,154 Income before income taxes 47,031 40,275 203,944 190,162 Income tax provision 14,803 12,202 66,001 64,968 Net income $32,228 $28,073 $137,943 $125,194 Earning per share: Basic $0.39 $0.35 $1.69 $1.58 Diluted $0.39 $0.35 $1.69 $1.57 Balance sheet data at December 31: Total assets $13,189,841 $12,040,521 Total earning assets 11,948,038 10,879,587 Loans and leases, net of unearned income 9,179,684 7,871,471 Allowance for credit losses 115,197 98,834 Total deposits 10,064,099 9,710,578 Common shareholders' equity 1,196,626 1,026,585 Book value per share 14.54 12.98 Average balance sheet data: Total assets $13,080,720 $11,854,667 $12,857,135 $11,798,153 Total earning assets 11,956,412 10,771,897 11,749,433 10,712,327 Loans and leases, net of unearned income 9,105,475 7,797,381 8,784,940 7,579,935 Total deposits 10,045,400 9,479,773 10,200,098 9,554,441 Common shareholders' equity 1,162,821 1,013,082 1,121,000 1,000,332 Non-performing assets at December 31: Non-accrual loans and leases $9,789 $6,603 Loans and leases 90+ days past due 18,671 15,282 Restructured loans and leases 721 1,571 Other real estate owned 24,281 10,463 Net charge-offs as a percentage of average loans (annualized) 0.21% 0.25% 0.14% 0.15% Performance ratios (annualized): Return on average assets 0.98% 0.94% 1.07% 1.06% Return on common equity 11.00% 10.99% 12.31% 12.52% Net interest margin 3.72% 3.64% 3.68% 3.70% Average shares outstanding - basic 82,230,448 79,098,187 81,505,510 79,140,379 Average shares outstanding - diluted 82,482,626 79,513,993 81,844,343 79,542,734 BancorpSouth, Inc. Consolidated Balance Sheet (Unaudited) December 31, % 2007 2006 Change (Dollars in thousands) Assets Cash and due from banks $322,926 $444,033 (27.27%) Interest bearing deposits with other banks 12,710 7,418 71.34% Held-to-maturity securities, at amortized cost 1,625,916 1,723,420 (5.66%) Available-for-sale securities, at fair value 1,001,194 1,041,999 (3.92%) Federal funds sold and securities purchased under agreement to resell - 145,957 (100.00%) Loans and leases 9,227,495 7,917,523 16.55% Less: Unearned income 47,811 46,052 3.82% Allowance for credit losses 115,197 98,834 16.56% Net loans and leases 9,064,487 7,772,637 16.62% Loans held for sale 128,532 89,323 43.90% Premises and equipment, net 317,379 287,215 10.50% Accrued interest receivable 96,027 89,090 7.79% Goodwill 254,889 143,718 77.35% Other assets 365,781 295,711 23.70% Total Assets $13,189,841 $12,040,521 9.55% Liabilities Deposits: Demand: Noninterest bearing $1,670,198 $1,817,223 (8.09%) Interest bearing 3,276,275 2,856,295 14.70% Savings 698,449 715,587 (2.39%) Other time 4,419,177 4,321,473 2.26% Total deposits 10,064,099 9,710,578 3.64% Federal funds purchased and securities sold under agreement to repurchase 809,898 672,438 20.44% Short-term Federal Home Loan Bank borrowings 706,586 200,000 253.29% Accrued interest payable 37,746 36,270 4.07% Junior subordinated debt securities 160,312 144,847 10.68% Long-term Federal Home Loan Bank borrowings 88,977 135,707 (34.43%) Other liabilities 125,597 114,096 10.08% Total Liabilities 11,993,215 11,013,936 8.89% Shareholders' Equity Common stock 205,748 197,774 4.03% Capital surplus 198,620 113,721 74.66% Accumulated other comprehensive income (loss) (7,214) (24,742) (70.84%) Retained earnings 799,472 739,832 8.06% Total Shareholders' Equity 1,196,626 1,026,585 16.56% Total Liabilities & Shareholders' Equity $13,189,841 $12,040,521 9.55% BancorpSouth, Inc. Consolidated Condensed Statements of Income (Dollars in thousands, except per share data) (Unaudited) Quarter Ended Dec-07 Sep-07 Jun-07 Mar-07 INTEREST REVENUE: Loans and leases $171,068 $174,787 $169,717 $153,241 Deposits with other banks 274 316 268 286 Federal funds sold and securities purchased under agreement to resell 311 232 633 2,511 Held-to-maturity securities: Taxable 16,890 17,585 16,962 16,705 Tax-exempt 2,120 2,077 2,044 2,015 Available-for-sale securities: Taxable 10,227 10,554 10,839 9,592 Tax-exempt 941 960 1,010 1,115 Loans held for sale 1,751 1,454 1,082 1,675 Total interest revenue 203,582 207,965 202,555 187,140 INTEREST EXPENSE: Interest bearing demand 19,765 22,189 21,992 19,887 Savings 1,934 2,503 2,481 2,383 Other time 52,551 55,728 55,459 51,985 Federal funds purchased and securities sold under agreement to repurchase 8,259 9,151 9,283 7,824 Other 11,416 10,478 6,682 6,393 Total interest expense 93,925 100,049 95,897 88,472 Net interest revenue 109,657 107,916 106,658 98,668 Provision for credit losses 7,771 5,727 7,843 1,355 Net interest revenue, after provision for credit losses 101,886 102,189 98,815 97,313 NONINTEREST REVENUE: Mortgage lending (1,149) 100 5,484 1,779 Credit card, debit card and merchant fees 7,904 7,667 7,391 6,874 Service charges 18,125 17,281 17,677 15,396 Trust income 2,996 2,487 2,457 2,214 Security gains, net 97 7 10 7 Insurance commissions 16,181 17,542 17,665 19,794 Other 11,160 12,810 9,548 12,295 Total noninterest revenue 55,314 57,894 60,232 58,359 NONINTEREST EXPENSES: Salaries and employee benefits 64,594 63,269 63,851 63,628 Occupancy, net of rental income 8,967 8,959 8,709 8,463 Equipment 6,078 6,057 6,053 6,026 Other 30,530 28,066 27,315 27,493 Total noninterest expenses 110,169 106,351 105,928 105,610 Income before income taxes 47,031 53,732 53,119 50,062 Income tax expense 14,803 17,475 17,238 16,485 Net income $32,228 $36,257 $35,881 $33,577 Net income per share: Basic $0.39 $0.44 $0.44 $0.42 Diluted $0.39 $0.44 $0.43 $0.42 Quarter Ended Year To Date Dec-06 Dec-07 Dec-06 INTEREST REVENUE: Loans and leases $147,784 $668,813 $553,265 Deposits with other banks 217 1,144 829 Federal funds sold and securities purchased under agreement to resell 635 3,687 5,066 Held-to-maturity securities: Taxable 16,532 68,142 63,010 Tax-exempt 2,012 8,256 7,993 Available-for-sale securities: Taxable 9,653 41,212 42,351 Tax-exempt 1,170 4,026 5,024 Loans held for sale 1,366 5,962 4,353 Total interest revenue 179,369 801,242 681,891 INTEREST EXPENSE: Interest bearing demand 16,228 83,833 60,145 Savings 2,160 9,301 7,987 Other time 48,585 215,723 172,368 Federal funds purchased and securities sold under agreement to repurchase 8,940 34,517 29,889 Other 7,205 34,969 25,703 Total interest expense 83,118 378,343 296,092 Net interest revenue 96,251 422,899 385,799 Provision for credit losses 6,325 22,696 8,577 Net interest revenue, after provision for credit losses 89,926 400,203 377,222 NONINTEREST REVENUE: Mortgage lending (820) 6,214 6,117 Credit card, debit card and merchant fees 6,793 29,836 25,779 Service charges 16,262 68,479 63,124 Trust income 3,703 10,154 10,388 Security gains, net 4 121 40 Insurance commissions 16,146 71,182 63,286 Other 8,402 45,813 37,360 Total noninterest revenue 50,490 231,799 206,094 NONINTEREST EXPENSES: Salaries and employee benefits 60,178 255,342 234,580 Occupancy, net of rental income 8,173 35,098 31,972 Equipment 5,941 24,214 23,422 Other 25,849 113,404 103,180 Total noninterest expenses 100,141 428,058 393,154 Income before income taxes 40,275 203,944 190,162 Income tax expense 12,202 66,001 64,968 Net income $28,073 $137,943 $125,194 Net income per share: Basic $0.35 $1.69 $1.58 Diluted $0.35 $1.69 $1.57 BancorpSouth, Inc. Average Balances, Interest Income and Expense, and Average Yields and Rates (Dollars in thousands) (Unaudited) Quarter Ended December 31, 2007 Average Yield/ (Taxable equivalent basis) Balance Interest Rate ASSETS Loans, loans held for sale, and leases net of unearned income $9,216,034 $173,685 7.48% Held-to-maturity securities: Taxable 1,498,608 16,890 4.47% Tax-exempt 192,464 3,261 6.72% Available-for-sale securities: Taxable 923,725 10,227 4.39% Tax-exempt 79,422 1,448 7.23% Short-term investments 46,159 585 5.03% Total interest earning assets and revenue 11,956,412 206,096 6.84% Other assets 1,241,631 Less: allowance for credit losses (117,323) Total $13,080,720 LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand - interest bearing $3,214,493 $19,765 2.44% Savings 700,583 1,934 1.09% Other time 4,512,151 52,550 4.62% Short-term borrowings 1,382,163 14,320 4.11% Junior subordinated debt 161,556 3,302 8.11% Long-term debt 141,576 2,054 5.75% Total interest bearing liabilities and expense 10,112,522 93,925 3.68% Demand deposits - noninterest bearing 1,618,173 Other liabilities 187,204 Total liabilities 11,917,899 Shareholders' equity 1,162,821 Total $13,080,720 Net interest revenue $112,171 Net interest margin 3.72% Net interest rate spread 3.15% Interest bearing liabilities to interest earning assets 84.58% Net interest tax equivalent adjustment $2,514 BancorpSouth, Inc. Average Balances, Interest Income and Expense, and Average Yields and Rates (Dollars in thousands) (Unaudited) Quarter Ended December 31, 2006 Average Yield/ (Taxable equivalent basis) Balance Interest Rate ASSETS Loans, loans held for sale, and leases net of unearned income $7,876,801 $149,992 7.55% Held-to-maturity securities: Taxable 1,533,105 16,532 4.28% Tax-exempt 185,158 3,096 6.63% Available-for-sale securities: Taxable 1,018,403 9,653 3.76% Tax-exempt 98,101 1,800 7.28% Short-term investments 60,329 853 5.61% Total interest earning assets and revenue 10,771,897 181,926 6.70% Other assets 1,182,664 Less: allowance for credit losses (99,894) Total $11,854,667 LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand - interest bearing $2,765,276 $16,228 2.33% Savings 718,623 2,160 1.19% Other time 4,292,368 48,585 4.49% Short-term borrowings 925,273 11,197 4.80% Junior subordinated debt 144,847 2,965 8.12% Long-term debt 135,838 1,983 5.79% Total interest bearing liabilities and expense 8,982,225 83,118 3.67% Demand deposits - noninterest bearing 1,703,506 Other liabilities 155,854 Total liabilities 10,841,585 Shareholders' equity 1,013,082 Total $11,854,667 Net interest revenue $98,808 Net interest margin 3.64% Net interest rate spread 3.03% Interest bearing liabilities to interest earning assets 83.39% Net interest tax equivalent adjustment $2,557 BancorpSouth, Inc. Average Balances, Interest Income and Expense, and Average Yields and Rates (Dollars in thousands) (Unaudited) Year to Date December 31, 2007 Average Yield/ (Taxable equivalent basis) Balance Interest Rate ASSETS Loans, loans held for sale, and leases net of unearned income $8,880,253 $678,155 7.64% Held-to-maturity securities: Taxable 1,530,247 68,142 4.45% Tax-exempt 189,234 12,701 6.71% Available-for-sale securities: Taxable 977,459 41,212 4.22% Tax-exempt 84,292 6,194 7.35% Short-term investments 87,948 4,831 5.49% Total interest earning assets and revenue 11,749,433 811,235 6.90% Other assets 1,217,135 Less: allowance for credit losses (109,433) Total $12,857,135 LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand - interest bearing $3,191,433 $83,833 2.63% Savings 718,080 9,301 1.30% Other time 4,636,436 215,723 4.65% Short-term borrowings 1,057,057 48,098 4.55% Junior subordinated debt 159,939 13,067 8.17% Long-term debt 144,006 8,321 5.78% Total interest bearing liabilities and expense 9,906,951 378,343 3.82% Demand deposits - noninterest bearing 1,654,149 Other liabilities 175,035 Total liabilities 11,736,135 Shareholders' equity 1,121,000 Total $12,857,135 Net interest revenue $432,892 Net interest margin 3.68% Net interest rate spread 3.09% Interest bearing liabilities to interest earning assets 84.32% Net interest tax equivalent adjustment $9,993 BancorpSouth, Inc. Average Balances, Interest Income and Expense, and Average Yields and Rates (Dollars in thousands) (Unaudited) Year to Date December 31, 2006 Average Yield/ (Taxable equivalent basis) Balance Interest Rate ASSETS Loans, loans held for sale, and leases net of unearned income $7,647,131 $560,673 7.33% Held-to-maturity securities: Taxable 1,517,430 63,010 4.15% Tax-exempt 183,986 12,297 6.68% Available-for-sale securities: Taxable 1,135,506 42,351 3.73% Tax-exempt 106,635 7,730 7.25% Short-term investments 121,639 5,895 4.85% Total interest earning assets and revenue 10,712,327 691,956 6.46% Other assets 1,184,643 Less: allowance for credit losses (98,817) Total $11,798,153 LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand - interest bearing $2,886,030 $60,145 2.08% Savings 744,106 7,987 1.07% Other time 4,211,371 172,368 4.09% Short-term borrowings 807,860 35,835 4.44% Junior subordinated debt 144,847 11,791 8.14% Long-term debt 136,411 7,966 5.84% Total interest bearing liabilities and expense 8,930,625 296,092 3.32% Demand deposits - noninterest bearing 1,712,934 Other liabilities 154,262 Total liabilities 10,797,821 Shareholders' equity 1,000,332 Total $11,798,153 Net interest revenue $395,864 Net interest margin 3.70% Net interest rate spread 3.14% Interest bearing liabilities to interest earning assets 83.37% Net interest tax equivalent adjustment $10,065
