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TUPELO, Miss., April 21, 2021 /PRNewswire/ -- BancorpSouth Bank (NYSE: BXS) (the "Company") today announced financial results for the quarter ended March 31, 2021. Highlights for the first quarter of 2021 included: Achieved record quarterly net income available to common shareholders of $79.2 million, or $0.77 per diluted common share, and record net operating income available to common shareholders excluding MSR of $74.8 million, or $0.73 per diluted common share. Generated $99.1 million in pre-tax pre-provision net revenue (PPNR), or 1.64 percent of average assets on an annualized basis. Credit quality indicators improved as evidenced by no recorded provision for credit losses for the quarter and a decline of $21.9 million, or 16.5 percent, in total non-performing assets. Generated total deposit and customer repo growth of $1.3 billion for the quarter, or 26.7 percent on an annualized basis. Originated and funded 7,527 loans totaling $463.5 million under the Paycheck Protection Program (PPP); received PPP forgiveness payments totaling $307.9 million during the quarter. Continued strong mortgage production volume of $789.8 million which contributed to mortgage production and servicing revenue of $17.9 million. Maintained strong regulatory capital metrics; estimated total risk-based capital of 14.65 percent at March 31, 2021 compared to 14.48 percent at December 31, 2020. Recently received regulatory approval to complete transactions with National United Bancshares, Inc., the parent company of National United, and FNS Bancshares, Inc., the parent company of FNB Bank, which are expected to close effective May 1, 2021 and add approximately $1.6 billion in total assets to the Company. On April 12, 2021, announced the signing of a merger agreement with Cadence Bancorporation, the parent company of Cadence Bank N.A., which creates a $44 billion institution on a pro forma basis that will be the 5th largest bank headquartered in the Company's nine-state footprint. "We are pleased to report another quarter of record financial performance," remarked Dan Rollins, Chairman and Chief Executive Officer. "While the unprecedented liquidity levels in the industry continue to pressure our net interest margin and adversely impact loan demand, our teammates are doing a great job taking care of customers and controlling the things we can control. Consistent with industry trends, we reported meaningful deposit and customer repo growth for the quarter. Our mortgage team had another outstanding quarter, while our insurance and wealth management teams reported strong revenue growth for the quarter. We also originated almost $465 million in new PPP loans during the quarter while also receiving forgiveness payments totaling over $300 million on loans that were originated last year." "As we look at other highlights for the quarter, we are extremely pleased with credit quality. The economies across our footprint are open and generally performing quite well. Virtually all of our credit quality indicators, including non-performing and classified assets, improved which, along with the economic forecasts utilized in our modeling process, resulted in no recorded provision for credit losses for the quarter. Finally, we continue to be pleased with our efforts to improve our expense base as reflected in the meaningful decline in total non-interest expense compared to both the first and fourth quarters of last year." Earnings Summary The Company reported net income available to common shareholders of $79.2 million, or $0.77 per diluted common share, for the first quarter of 2021, compared with net income available to common shareholders of $21.9 million, or $0.21 per diluted common share, for the first quarter of 2020 and net income available to common shareholders of $66.4 million, or $0.65 per diluted common share, for the fourth quarter of 2020. The Company reported net operating income available to common shareholders excluding MSR of $74.8 million, or $0.73 per diluted common share, for the first quarter of 2021, compared with $34.4 million, or $0.33 per diluted common share, for the first quarter of 2020 and $70.8 million, or $0.69 per diluted common share, for the fourth quarter of 2020. The Company reported PPNR of $99.1 million, or 1.64 percent of average assets on an annualized basis, for the first quarter of 2021 compared to $91.7 million, or 1.74 percent of average assets on an annualized basis, for the first quarter of 2020 and $93.6 million, or 1.57 percent of average assets on an annualized basis, for the fourth quarter of 2020. Net Interest Revenue Net interest revenue was $172.8 million for the first quarter of 2021, an increase of 3.1 percent from $167.5 million for the first quarter of 2020 and a decrease of 2.3 percent from $176.9 million for the fourth quarter of 2020. The fully taxable equivalent net interest margin was 3.15 percent for the first quarter of 2021, compared with 3.54 percent for the first quarter of 2020 and 3.29 percent for the fourth quarter of 2020. Yields on net loans and leases were 4.53 percent for the first quarter of 2021, compared with 5.00 percent for the first quarter of 2020 and 4.55 percent for the fourth quarter of 2020, while yields on total interest earning assets were 3.51 percent for the first quarter of 2021, compared with 4.27 percent for the first quarter of 2020 and 3.70 percent for the fourth quarter of 2020. The net interest margin, excluding accretable yield, was 3.08 percent for the first quarter of 2021, compared with 3.48 percent for the first quarter of 2020 and 3.24 percent for the fourth quarter of 2020, while yields on net loans and leases, excluding accretable yield, were 4.43 percent for the first quarter of 2021, compared with 4.93 percent for the first quarter of 2020 and 4.49 percent for the fourth quarter of 2020. The $1.1 billion in PPP loans on the balance sheet had an adverse impact of approximately six basis points on the yield on net loans and leases, excluding accretable yield, for the first quarter of 2021. Net interest income for the first quarter of 2021 included approximately $3.1 million of accelerated PPP fee income recognition resulting from the payoff of loans that were forgiven by the SBA during the quarter. The average cost of deposits was 0.33 percent for the first quarter of 2021, compared with 0.67 percent for the first quarter of 2020 and 0.38 percent for the fourth quarter of 2020. Balance Sheet Activity Loans and leases, net of unearned income, increased $16.3 million during the first quarter of 2021. Excluding the impact of PPP originations and paydowns, total loans declined approximately $140.0 million compared to December 31, 2020. Deposits and customer repos increased $1.3 billion, or 26.7 percent on an annualized basis, during the first quarter of 2021. There were no acquisitions during the first quarter of 2021. Provision for Credit Losses and Allowance for Credit Losses Earnings for the first quarter of 2021 reflect no provision for credit losses, compared with a provision of $46.0 million for the first quarter of 2020 and a provision of $5.0 million for the fourth quarter of 2020. Net charge-offs for the first quarter of 2021 were $3.3 million, or 0.09 percent of net loans and leases on an annualized basis, compared with net charge-offs of $13.7 million for the first quarter of 2020 and net charge-offs of $11.2 million for the fourth quarter of 2020. The allowance for credit losses was $241.1 million, or 1.60 percent of net loans and leases, at March 31, 2021, compared with $218.2 million, or 1.53 percent of net loans and leases, at March 31, 2020, and $244.4 million, or 1.63 percent of net loans and leases, at December 31, 2020. The allowance for credit losses coverage, excluding the impact of PPP loans, was 1.74 percent of net loans and leases at March 31, 2021. Total non-performing assets were $110.7 million, or 0.43 percent of total assets, at March 31, 2021, compared with $137.8 million, or 0.66 percent of total assets, at March 31, 2020, and $132.6 million, or 0.55 percent of total assets, at December 31, 2020. Other real estate owned was $9.4 million at March 31, 2021, compared with $9.2 million at March 31, 2020 and $11.4 million at December 31, 2020. Noninterest Revenue Noninterest revenue was $87.9 million for the first quarter of 2021, compared with $76.5 million for the first quarter of 2020 and $78.8 million for the fourth quarter of 2020. These results include a positive mortgage servicing rights (MSR) valuation adjustment of $7.4 million for the first quarter of 2021, compared with a negative MSR valuation adjustment of $11.1 million for the first quarter of 2020 and a positive MSR valuation adjustment of $0.2 million for the fourth quarter of 2020. Valuation adjustments in the MSR asset are driven primarily by fluctuations in interest rates period over period. Mortgage production and servicing revenue was $17.9 million for the first quarter of 2021, compared with $20.6 million for the first quarter of 2020 and $19.9 million for the fourth quarter of 2020. Mortgage origination volume for the first quarter of 2021 was $789.8 million, compared with $477.1 million for the first quarter of 2020 and $845.9 million for the fourth quarter of 2020. Home purchase money volume was $379.4 million for the first quarter of 2021, compared with $285.3 million for the first quarter of 2020 and $466.4 million for the fourth quarter of 2020. Of the total mortgage origination volume for the first quarter of 2021, $149.0 million was portfolio loans, compared with $85.6 million for the first quarter of 2020 and $157.8 million for the fourth quarter of 2020. Credit card, debit card, and merchant fee revenue was $9.7 million for the first quarter of 2021, compared with $9.2 million for the first quarter of 2020 and $10.1 million for the fourth quarter of 2020. Deposit service charge revenue was $8.5 million for the first quarter of 2021, compared with $11.7 million for the first quarter of 2020 and $9.7 million for the fourth quarter of 2020. Wealth management revenue was $8.5 million for the first quarter of 2021, compared with $6.6 million for the first quarter of 2020 and $6.8 million for the fourth quarter of 2020. Insurance commission revenue was $30.7 million for the first quarter of 2021, compared with $29.6 million for the first quarter of 2020 and $29.8 million for the fourth quarter of 2020. Other noninterest revenue was $5.3 million for the first quarter of 2021, compared with $10.1 million for the first quarter of 2020 and $2.3 million for the fourth quarter of 2020. Other noninterest revenue for the fourth quarter of 2020 was adversely impacted by $2.7 million of book amortization associated with a historic tax credit. A related benefit of $3.0 million was recorded as a reduction to income tax expense for the fourth quarter of 2020. Other noninterest revenue for the first quarter of 2020 included a $4.2 million gain associated with the sale of a book of business within the Company's insurance agency. Noninterest Expense Noninterest expense for the first quarter of 2021 was $155.8 million, compared with $168.0 million for the first quarter of 2020 and $167.9 million for the fourth quarter of 2020. Salaries and employee benefits expense was $101.1 million for the first quarter of 2021, compared with $108.3 million for the first quarter of 2020 and $97.2 million for the fourth quarter of 2020. Occupancy expense was $12.8 million for the first quarter of 2021, compared with $12.7 million for the first quarter of 2020 and $13.0 million for the fourth quarter of 2020. Other noninterest expense was $35.9 million for the first quarter of 2021, compared with $40.8 million for the first quarter of 2020 and $45.4 million for the fourth quarter of 2020. Additionally, merger-related expense for the first quarter of 2021 was $1.6 million, compared with merger-related expense of $4.5 million for the first quarter of 2020 and $0.2 million for the fourth quarter of 2020. Noninterest expense for the first quarter of 2021 and the fourth quarter of 2020 included certain items that were non-routine in nature as defined by the Company. Salaries and benefits expense for the first quarter of 2021 benefited from an accrual true-up totaling approximately $3.0 million related to the Company's equity compensation plans. During the fourth quarter of 2020, the Company recorded a charge of $5.8 million in accordance with ASC 715 "Compensation Retirement Benefits" to reflect the settlement accounting impact of an elevated number of retirements and related lump sum pension payouts during the quarter. Salaries and employee benefits expense was positively impacted by accrual true ups totaling approximately $6.7 million relating to incentive compensation and other employee benefits. Other non-interest expense included charges and write-downs totaling approximately $5.0 million associated with the anticipated disposition of certain facilities and other fixed assets, including fixed assets associated with branches identified for closure. Capital Management The Company's ratio of shareholders' equity to assets was 10.95 percent at March 31, 2021, compared with 12.75 percent at March 31, 2020 and 11.72 percent at December 31, 2020. The ratio of tangible common shareholders' equity to tangible assets was 7.04 percent at March 31, 2021, compared with 7.99 percent at March 31, 2020 and 7.54 percent at December 31, 2020. The $1.1 billion in PPP loans had an adverse impact of approximately 34 basis points on tangible common shareholders' equity to tangible assets at March 31, 2021. During the first quarter of 2021, the Company did not repurchase any shares of its common stock pursuant to its share repurchase program. The Company has 6.0 million shares remaining on its current share repurchase authorization which will expire on December 31, 2021. Estimated regulatory capital ratios at March 31, 2021 were calculated in accordance with the Basel III capital framework as well as the interagency final rule published on September 30, 2020 entitled "Revised Transition of the Current Expected Credit Losses Methodology for Allowances". The Company is a "well capitalized" bank, as defined by federal regulations, at March 31, 2021, with Tier 1 risk-based capital of 11.95 percent and total risk-based capital of 14.65 percent, compared with required minimum levels of 8 percent and 10 percent, respectively, in order to qualify for "well capitalized" classification. Summary Rollins concluded, "It's an exciting time for our Company. The economies in our markets are performing quite well and, despite certain industry headwinds, we continue to be pleased with our financial performance. We look forward to the growth opportunities ahead of us. The recent merger announcement with Cadence is a transformational opportunity for our Company. We believe the strengths of each organization are complementary. Both organizations are highly focused on improving the customer experience and giving back to the communities we serve. We are also excited about the opportunity to complete our pending mergers with National United and FNB Bank next month. These two teams will be an integral part of our strategic efforts going forward as we continue to grow our Company and enhance shareholder value." TRANSACTIONS Cadence Bancorporation (NYSE: CADE) On April 12, 2021, the Company announced the signing of a definitive merger agreement (the Cadence Merger Agreement) with Cadence Bancorporation, the parent company of Cadence Bank N.A., (collectively referred to as Cadence), pursuant to which Cadence will be merged with and into the Company (the Cadence Merger). Cadence operates 98 full-service banking offices in the southeast. As of December 31, 2020, Cadence collectively reported total assets of $18.7 billion, total loans of $12.7 billion and total deposits of $16.1 billion. Under the terms of the Cadence Merger Agreement, each Cadence shareholder will receive 0.70 shares of the Company's common stock. In addition, Cadence will pay a one-time special dividend of $1.25 per share at closing. For more information regarding the Cadence Merger, see our Current Report on Form 8-K that was filed with the Federal Deposit Insurance Corporation (FDIC) on April 12, 2021. The Cadence Merger Agreement has been unanimously approved by the Boards of Directors of the Company and Cadence. Subject to the satisfaction of all closing conditions, including the receipt of all required regulatory and shareholder approvals, the Cadence Merger is expected to be completed during the fourth quarter of 2021, although the Company can provide no assurance that the Cadence Merger will close during this time period or at all. FNS Bancshares, Inc. On January 13, 2021, the Company announced the signing of a definitive merger agreement (the FNS Merger Agreement) with FNS Bancshares, Inc., the parent company of FNB Bank, (collectively referred to as FNS), pursuant to which FNS will be merged with and into the Company (the FNS Merger). FNS operates 17 full-service banking offices in Alabama, Georgia and Tennessee. The merger will expand the Company's presence in Jackson, DeKalb and Marshall counties in Alabama and the Chattanooga, Tennessee-Georgia and Nashville-Davidson-Murfreesboro-Franklin, Tennessee metropolitan statistical areas. As of March 31, 2021, FNS collectively reported total assets of $826.5 million, total loans of $475.1 million and total deposits of $709.9 million. Under the terms of the FNS Merger Agreement, the Company will issue approximately 2,975,000 shares of the Company's common stock plus $18.0 million in cash for all outstanding shares of FNS. For more information regarding the FNS Merger, see our Current Report on Form 8-K that was filed with the FDIC on January 13, 2021. Subject to the satisfaction of all closing conditions, the FNS Merger is expected to close on May 1, 2021. National United Bancshares, Inc. On December 2, 2020, the Company announced the signing of a definitive merger agreement (the National United Merger Agreement) with National United Bancshares, Inc., the parent company of National United, (collectively referred to as National United), pursuant to which National United will be merged with and into the Company (the National United Merger). National United operates 6 full-service banking offices in the Killeen-Temple, Texas; Waco, Texas; and Austin-Round Rock-Georgetown, Texas metropolitan statistical areas. As of March 31, 2021, National United collectively reported total assets of $788.9 million, total loans of $440.6 million and total deposits of $712.8 million. Under the terms of the National United Merger Agreement, the Company will issue approximately 3,110,000 shares of the Company's common stock plus $33.25 million in cash for all outstanding shares of National United. For more information regarding National United Merger, see our Current Report on Form 8-K that was filed with the FDIC on December 2, 2020. Subject to the satisfaction of all closing conditions, the National United Merger is expected to close on May 1, 2021. Non-GAAP Measures and Ratios This news release presents certain financial measures and ratios that are not calculated in accordance with U.S. generally accepted accounting principles (GAAP). A discussion regarding these non-GAAP measures and ratios, including reconciliations of non-GAAP measures to the most directly comparable GAAP measures and definitions for non-GAAP ratios, appears under the caption "Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions" beginning on page 24 of this news release. Statement Regarding Impact of COVID-19 Pandemic The Company prioritizes the health and safety of its teammates and customers, and it will continue to do so throughout the duration of the COVID-19 pandemic. At the same time, the Company remains focused on improving shareholder value, managing credit exposure, challenging expenses, enhancing the customer experience and supporting the communities it serves. Lastly, as a SBA Preferred Lender, the Company is an active participant in the SBA's PPP for the betterment of its customers and the communities that it serves. In the presentation that accompanies this news release and in its earnings conference call, the Company has sought and will seek to describe the historical and future impact of the COVID-19 pandemic on the Company's assets, business, cash flows, financial condition, liquidity, prospects and results of operations, including the information and discussions regarding negative pressure on its net interest margin and loan demand. Although the Company believes that the statements that pertain to future events, results and trends and their impact on the Company's business are reasonable at the present time, those statements are not historical facts and are based upon current assumptions, expectations, estimates and projections, many of which, by their nature, are beyond the Company's control. Accordingly, all discussions regarding future events, results and trends and their impact on the Company's business, even in the near term, are necessarily uncertain given the fluid and evolving nature of the pandemic. If the health, logistical or economic effects of the pandemic worsen, or if the assumptions, expectations, estimates or projections that underlie the Company's statements regarding future effects or trends prove to be incorrect, then the Company's actual assets, business, cash flows, financial condition, liquidity, prospects and results of operations and the trading prices of its capital stock may be materially and adversely impacted in ways that the Company cannot reasonably forecast. Accordingly, when reading this news release and the accompanying presentation and when listening to the earnings conference call, undue reliance should not be placed upon any statement pertaining to future events, results and trends and their impact on the Company's business in future periods. Conference Call and Webcast The Company will conduct a conference call to discuss its first quarter 2021 financial results on April 22, 2021, at 10:00 a.m. (Central Time). This conference call will be an interactive session between management and analysts. Interested parties may listen to this live conference call via Internet webcast by accessing www.bancorpsouth.investorroom.com/webcasts. The webcast will also be available in archived format at the same address. About BancorpSouth Bank BancorpSouth Bank (NYSE: BXS) is headquartered in Tupelo, Mississippi, with approximately $26 billion in assets. BancorpSouth operates approximately 300 full service branch locations as well as additional mortgage, insurance, and loan production offices in Alabama, Arkansas, Florida, Louisiana, Mississippi, Missouri, Tennessee and Texas, including an insurance location in Illinois. BancorpSouth is committed to a culture of respect, diversity, and inclusion in both its workplace and communities. To learn more, visit our Community Commitment page at www.bancorpsouth.com. Like us on Facebook; follow us on Twitter and Instagram: @MyBXS; or connect with us through LinkedIn. Forward-Looking Statements Certain statements made in this news release are not statements of historical fact and constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and are subject to the safe harbor created thereby under the Private Securities Litigation Reform Act of 1995. These statements are often, but not always, made through the use of words or phrases such as "anticipate," "aspire," "assume," "believe," "budget," "contemplate," "continue," "could," "estimate," "expect," "forecast," "foresee," "goal," "hope," "indicate," "intend," "may," "might," "outlook," "plan," "project," "projection," "predict," "prospect," "potential," "roadmap," "seek," "should," "target," "will," and "would," or the negative versions of those words or other comparable words of a future or forward-looking nature. These forward-looking statements include, without limitation, discussions regarding general economic, interest rate, real estate market, competitive, employment, and credit market conditions, including the impact of the COVID-19 pandemic on the Company's business; the Company's: assets; business; cash flows; financial condition; liquidity; prospects; results of operations; deposit and customer repo growth; interest and fee-based revenue; capital resources; capital metrics; efficiency ratio; valuation of mortgage servicing rights; net income; net interest revenue; non-interest revenue; net interest margin; interest expense; non-interest expense; earnings per share; interest rate sensitivity; interest rate risk; balance sheet and liquidity management; off-balance sheet arrangements; fair value determinations; asset quality; credit quality; credit losses; provision and allowance for credit losses, impairments, charge-offs, recoveries and changes in loan volumes; investment securities portfolio yields and values; ability to manage the impact of pandemics, natural disasters and other force majeure events; adoption and use of critical accounting policies; adoption and implementation of new accounting standards and their effect on the Company's financial results and the Company's financial reporting; utilization of non-GAAP financial metrics; declaration and payment of dividends; ability to pay dividends or coupons on the Company's 5.5% Series A Non-Cumulative Perpetual Preferred Stock, par value $0.01 per share, or the 4.125% Fixed-to-Floating Rate Subordinated Notes due November 20, 2029; mortgage origination volume; mortgage servicing and production revenue; insurance commission revenue; implementation and execution of cost savings initiatives; ability to successfully litigate, resolve or otherwise dispense with threatened, pending, ongoing and future litigation and governmental, administrative and investigatory matters; ability to successfully complete pending or future acquisitions, dispositions and other strategic growth opportunities and initiatives; ability to successfully obtain regulatory approval for acquisitions and other growth initiatives; ability to successfully integrate and manage acquisitions; opportunities and efforts to grow market share; reputation; ability to compete with other financial institutions; ability to recruit and retain key employees and personnel; access to capital markets; availability of capital; investments in the securities of other financial institutions; and ability to operate the Company's regulatory compliance programs in accordance with applicable law. Forward-looking statements are based upon management's expectations as well as certain assumptions and estimates made by, and information available to, the Company's management at the time such statements were made. Forward-looking statements are not historical facts, are not guarantees of future results or performance and are subject to certain known and unknown risks, uncertainties and other factors that are beyond the Company's control and that may cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. These risks, uncertainties and other factors include, without limitation, potential delays or other problems in implementing and executing the Company's growth, expansion and acquisition strategies, including delays in obtaining regulatory or other necessary approvals or the failure to realize any anticipated benefits or synergies from any acquisitions or growth strategies; the risks of changes in interest rates and their effects on the level and composition of deposits, loan demand and the values of loan collateral, securities and interest sensitive assets and liabilities; the failure of assumptions underlying the establishment of reserves for possible credit losses, fair value for loans and other real estate owned; changes in real estate values; the availability of and access to capital; possible downgrades in the Company's credit ratings or outlook which could increase the costs or availability of funding from capital markets; the ability to attract new or retain existing deposits or to retain or grow loans; the ability to grow additional interest and fee income or to control noninterest expense; the potential impact of the proposed phase-out of the London Interbank Offered Rate ("LIBOR") or other changes involving LIBOR; competitive factors and pricing pressures, including their effect on the Company's net interest margin; general economic, unemployment, credit market and real estate market conditions, and the effect of such conditions on the creditworthiness of borrowers, collateral values, the value of investment securities and asset recovery values; changes in legal, financial and/or regulatory requirements; recently enacted and potential legislation and regulatory actions and the costs and expenses to comply with new and/or existing legislation and regulatory actions, including those actions in response to the COVID-19 pandemic such as the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the "Economic Aid Act") and any related rules and regulations; changes in U.S. Government monetary and fiscal policy; FDIC special assessments or changes to regular assessments; the enforcement efforts of federal and state bank regulators; possible adverse rulings, judgments, settlements and other outcomes of pending, ongoing and future litigation and governmental, administrative and investigatory matters (including litigation or actions arising from the Company's participation in and administration of programs related to the COVID-19 pandemic (including, among other things, the PPP loan programs authorized by the CARES Act and the Economic Aid Act); the ability to keep pace with technological changes, including changes regarding maintaining cybersecurity; the impact of failure in, or breach of, the Company's operational or security systems or infrastructure, or those of third parties with whom the Company does business, including as a result of cyber-attacks or an increase in the incidence or severity of fraud, illegal payments, security breaches or other illegal acts impacting the Company or the Company's customers; natural disasters or acts of war or terrorism; the adverse effects of the ongoing global COVID-19 pandemic, including the magnitude and duration of the pandemic, and the effect of actions taken to mitigate the impact of the COVID-19 pandemic on the Company, the Company's employees, the Company's customers, the global economy and the financial markets; international or political instability; impairment of the Company's goodwill or other intangible assets; losses of key employees and personnel; adoption of new accounting standards, including the effects from the adoption of the current expected credit loss methodology on January 1, 2020, or changes in existing standards; the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the definitive merger agreement between the Company and Cadence; the outcome of any legal proceedings that may be instituted against the Company or Cadence; the possibility that the proposed transaction will not close when expected or at all because required regulatory, shareholder or other approvals are not received or other conditions to the closing are not satisfied on a timely basis or at all, or are obtained subject to conditions that are not anticipated; the ability of the Company and Cadence to meet expectations regarding the timing, completion and accounting and tax treatments of the proposed transaction; the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of the common stock of either or both parties to the proposed transaction; the possibility that the anticipated benefits of the proposed transaction will not be realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where the Company and Cadence do business certain restrictions during the pendency of the proposed transaction that may impact the parties' ability to pursue certain business opportunities or strategic transactions; the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events diversion of management's attention from ongoing business operations and opportunities the possibility that the parties may be unable to achieve expected synergies and operating efficiencies in the merger within the expected timeframes or at all and to successfully integrate Cadence's operations and those of the Company; such integration may be more difficult, time consuming or costly than expected; revenues following the proposed transaction may be lower than expected; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed transaction the Company and Cadence's success in executing their respective business plans and strategies and managing the risks involved in the foregoing; the dilution caused by the Company's issuance of additional shares of its capital stock in connection with the proposed transaction and other factors as detailed from time to time in the Company's press and news releases, periodic and current reports and other filings the Company files with the FDIC. The foregoing factors should not be construed as exhaustive and should be read in conjunction with those factors that are set forth from time to time in the Company's periodic and current reports filed with the FDIC, including those factors included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 under the heading "Item 1A. Risk Factors," in the Company's Quarterly Reports on Form 10-Q and in the Company's Current Reports on Form 8-K. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date of this news release, if one or more events related to these or other risks or uncertainties materialize, or if the Company's underlying assumptions prove to be incorrect, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Accordingly, undue reliance should not be placed on any forward-looking statements. The forward-looking statements speak only as of the date of this news release, and the Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by applicable law. New risks and uncertainties may emerge from time to time, and it is not possible for the Company to predict their occurrence or how they will affect the Company. All written or oral forward-looking statements attributable to the Company are expressly qualified in their entirety by this section. BancorpSouth Bank Selected Financial Information (Dollars in thousands, except per share data) (Unaudited) Quarter Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Earnings Summary: Interest revenue $ 192,783 $ 199,287 $ 200,670 $ 197,472 $ 202,064 Interest expense 19,994 22,351 24,739 26,902 34,534 Net interest revenue 172,789 176,936 175,931 170,570 167,530 Provision for credit losses - 5,000 15,000 20,000 46,000 Net interest revenue, after provision for credit losses 172,789 171,936 160,931 150,570 121,530 Noninterest revenue 87,936 78,826 89,924 91,258 76,496 Noninterest expense 155,823 167,911 155,505 162,504 168,006 Income before income taxes 104,902 82,851 95,350 79,324 30,020 Income tax expense 23,347 14,046 21,525 18,164 5,759 Net income $ 81,555 $ 68,805 $ 73,825 $ 61,160 $ 24,261 Less: Preferred dividends 2,372 2,372 2,372 2,372 2,372 Net income available to common shareholders $ 79,183 $ 66,433 $ 71,453 $ 58,788 $ 21,889 Balance Sheet - Period End Balances Total assets $ 25,802,497 $ 24,081,194 $ 23,555,422 $ 23,236,176 $ 21,032,524 Total earning assets 23,542,657 21,792,725 21,340,371 21,119,073 18,939,750 Total securities 7,640,268 6,231,006 5,659,785 4,973,171 4,468,340 Loans and leases, net of unearned income 15,038,808 15,022,479 15,327,735 15,427,421 14,224,645 Allowance for credit losses 241,117 244,422 250,624 237,025 218,199 Net book value of acquired loans (included in loans and leases above) 1,023,252 1,160,267 1,320,671 1,510,008 1,661,329 Paycheck protection program (PPP) loans (included in loans and leases above) 1,146,000 975,421 1,212,246 1,192,715 - Remaining loan mark on acquired loans 10,069 13,886 16,198 19,977 22,286 Total deposits 21,173,186 19,846,441 19,412,979 19,179,486 16,887,916 Total deposits and securities sold under agreement to repurchase 21,833,671 20,484,156 20,024,434 19,849,502 17,426,878 Long-term debt 4,295 4,402 4,508 4,615 4,721 Junior subordinated debt securities 297,425 297,250 297,074 296,898 296,723 Total shareholders' equity 2,825,198 2,822,477 2,782,539 2,732,687 2,681,904 Common shareholders' equity 2,658,205 2,655,484 2,615,546 2,565,694 2,514,911 Balance Sheet - Average Balances Total assets $ 24,545,560 $ 23,660,503 $ 23,318,877 $ 22,707,686 $ 21,189,637 Total earning assets 22,346,075 21,497,938 21,241,896 20,594,889 19,113,449 Total securities 6,606,027 5,820,425 5,309,982 4,437,614 4,461,298 Loans and leases, net of unearned income 15,029,076 15,219,402 15,369,684 15,114,732 14,226,788 PPP loans (included in loans and leases above) 1,062,423 1,139,959 1,207,097 975,029 - Total deposits 20,472,080 19,600,863 19,258,930 18,454,472 16,905,229 Total deposits and securities sold under agreement to repurchase 21,123,774 20,272,881 19,940,330 19,098,599 17,446,936 Long-term debt 4,378 4,488 4,592 4,699 4,800 Junior subordinated debt securities 297,318 297,145 296,969 296,793 296,617 Total shareholders' equity 2,813,001 2,774,589 2,729,870 2,738,434 2,658,699 Common shareholders' equity 2,646,008 2,607,596 2,562,877 2,571,441 2,491,678 Nonperforming Assets: Non-accrual loans and leases $ 73,142 $ 96,378 $ 122,108 $ 126,753 $ 110,074 Loans and leases 90+ days past due, still accruing 21,208 14,320 17,641 9,877 7,272 Restructured loans and leases, still accruing 6,971 10,475 11,154 11,575 11,284 Non-performing loans (NPLs) 101,321 121,173 150,903 148,205 128,630 Other real estate owned 9,351 11,395 6,397 7,164 9,200 Non-performing assets (NPAs) $ 110,672 $ 132,568 $ 157,300 $ 155,369 $ 137,830 Financial Ratios and Other Data: Return on average assets 1.35% 1.16% 1.26% 1.08% 0.46% Operating return on average assets-excluding MSR* 1.28% 1.23% 1.26% 1.12% 0.70% Return on average shareholders' equity 11.76% 9.87% 10.76% 8.98% 3.67% Operating return on average shareholders' equity-excluding MSR* 11.13% 10.49% 10.72% 9.29% 5.56% Return on average common shareholders' equity 12.14% 10.14% 11.09% 9.19% 3.53% Operating return on average common shareholders' equity-excluding MSR* 11.47% 10.80% 11.05% 9.53% 5.55% Return on average tangible equity* 17.35% 14.66% 16.08% 13.43% 5.56% Operating return on average tangible equity-excluding MSR* 16.42% 15.58% 16.03% 13.89% 8.42% Return on average tangible common equity* 18.46% 15.54% 17.13% 14.20% 5.54% Operating return on average tangible common equity-excluding MSR* 17.44% 16.56% 17.08% 14.71% 8.71% Pre-tax pre-provision net revenue to total average assets* 1.64% 1.57% 1.88% 1.81% 1.74% Noninterest income to average assets 1.45% 1.33% 1.53% 1.62% 1.45% Noninterest expense to average assets 2.57% 2.82% 2.65% 2.88% 3.19% Net interest margin-fully taxable equivalent 3.15% 3.29% 3.31% 3.35% 3.54% Net interest margin-fully taxable equivalent, excluding net accretion on acquired loans and leases 3.08% 3.24% 3.23% 3.30% 3.48% Net interest rate spread 2.97% 3.07% 3.06% 3.08% 3.24% Efficiency ratio (tax equivalent)* 59.64% 65.47% 58.36% 61.89% 68.65% Operating efficiency ratio-excluding MSR (tax equivalent)* 60.74% 63.18% 58.41% 61.16% 63.89% Loan/deposit ratio 71.03% 75.69% 78.96% 80.44% 84.23% Price to earnings multiple (close) 12.07 12.88 9.18 11.15 9.46 Market value to common book value 125.39% 105.98% 75.99% 90.91% 77.21% Market value to common book value (avg) 119.10% 97.56% 83.75% 84.79% 107.86% Market value to common tangible book value 190.14% 161.00% 116.01% 140.44% 120.81% Market value to common tangible book value (avg) 180.60% 148.21% 127.86% 130.99% 168.76% Employee FTE 4,546 4,596 4,691 4,742 4,737 *Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 24 and 25. Credit Quality Ratios: Net charge-offs(recoveries) to average loans and leases (annualized) 0.09% 0.29% 0.04% 0.03% 0.39% Provision for credit losses to average loans and leases (annualized) 0.00% 0.13% 0.39% 0.53% 1.30% Allowance for credit losses to net loans and leases 1.60% 1.63% 1.64% 1.54% 1.53% Allowance for credit losses to net loans and leases, excluding PPP loans 1.74% 1.74% 1.78% 1.67% 1.53% Allowance for credit losses to non-performing loans and leases 237.97% 201.71% 166.08% 159.93% 169.63% Allowance for credit losses to non-performing assets 217.87% 184.37% 159.33% 152.56% 158.31% Non-performing loans and leases to net loans and leases 0.67% 0.81% 0.98% 0.96% 0.90% Non-performing loans and leases to net loans and leases, excluding acquired loans and leases 0.54% 0.62% 0.74% 0.63% 0.64% Non-performing assets to total assets 0.43% 0.55% 0.67% 0.67% 0.66% Non-performing assets to total assets, excluding acquired loans and leases 0.34% 0.42% 0.49% 0.43% 0.44% Equity Ratios: Total shareholders' equity to total assets 10.95% 11.72% 11.81% 11.76% 12.75% Total common shareholders' equity to total assets 10.30% 11.03% 11.10% 11.04% 11.96% Tangible shareholders' equity to tangible assets* 7.71% 8.26% 8.30% 8.18% 8.82% Tangible shareholders' equity to tangible assets-excluding PPP loans* 8.08% 8.63% 8.77% 8.65% 8.82% Tangible common shareholders' equity to tangible assets* 7.04% 7.54% 7.56% 7.44% 7.99% Tangible common shareholders' equity to tangible assets-excluding PPP loans* 7.38% 7.87% 7.99% 7.86% 7.99% Capital Adequacy: Common Equity Tier 1 capital 10.97% 10.74% 10.64% 10.21% 10.11% Tier 1 capital 11.95% 11.74% 11.65% 11.22% 11.13% Total capital 14.65% 14.48% 14.20% 13.79% 13.75% Tier 1 leverage capital 8.59% 8.67% 8.59% 8.54% 8.90% Estimated for current quarter Common Share Data: Basic earnings per share $ 0.77 $ 0.65 $ 0.70 $ 0.57 $ 0.21 Diluted earnings per share 0.77 0.65 0.69 0.57 0.21 Operating earnings per share* 0.78 0.69 0.70 0.57 0.25 Operating earnings per share- excluding MSR* 0.73 0.69 0.69 0.59 0.33 Cash dividends per share 0.190 0.190 0.185 0.185 0.185 Book value per share 25.90 25.89 25.50 25.01 24.50 Tangible book value per share* 17.08 17.04 16.71 16.19 15.66 Market value per share (last) 32.48 27.44 19.38 22.74 18.92 Market value per share (high) 35.59 28.54 24.29 25.93 31.61 Market value per share (low) 26.95 18.77 18.11 17.21 17.24 Market value per share (avg) 30.85 25.26 21.36 21.21 26.43 Dividend payout ratio 24.62% 29.34% 26.56% 32.29% 88.20% Total shares outstanding 102,624,818 102,561,480 102,558,459 102,566,301 102,632,484 Average shares outstanding - basic 102,622,111 102,569,547 102,564,466 102,603,525 104,354,328 Average shares outstanding - diluted 102,711,584 102,817,409 102,839,749 102,827,225 104,733,897 Yield/Rate: (Taxable equivalent basis) Loans, loans held for sale, and leases net of unearned income 4.53% 4.55% 4.54% 4.59% 5.00% Loans, loans held for sale, and leases net of unearned income, excluding net accretion on acquired loans and leases 4.43% 4.49% 4.44% 4.53% 4.93% Loans, loans held for sale, and leases net of unearned income, excluding net accretion on acquired loans and leases - excluding PPP loans 4.49% 4.53% 4.55% 4.67% 4.93% PPP loans 3.69% 3.99% 3.11% 2.50% N/A Available-for-sale securities: Taxable 1.32% 1.53% 1.64% 1.95% 1.99% Tax-exempt 3.52% 3.40% 3.67% 3.86% 4.44% Short-term, FHLB and other equity investments 0.11% 0.13% 0.19% 0.20% 1.53% Total interest earning assets and revenue 3.51% 3.70% 3.77% 3.87% 4.27% Deposits 0.33% 0.38% 0.44% 0.50% 0.67% Demand - interest bearing 0.40% 0.47% 0.53% 0.61% 0.84% Savings 0.11% 0.15% 0.18% 0.18% 0.26% Other time 1.14% 1.28% 1.41% 1.54% 1.64% Total interest bearing deposits 0.48% 0.57% 0.65% 0.74% 0.92% Short-term borrowings 0.13% 0.26% 0.25% 0.39% 1.25% Total interest bearing deposits and short-term borrowings 0.46% 0.55% 0.63% 0.71% 0.95% Junior subordinated debt 4.46% 4.05% 4.24% 4.18% 4.42% Long-term debt 4.88% 4.84% 4.85% 4.81% 4.96% Total interest bearing liabilities and expense 0.54% 0.63% 0.71% 0.79% 1.03% Interest bearing liabilities to interest earning assets 66.87% 65.99% 65.61% 66.65% 70.81% Net interest tax equivalent adjustment $ 569 $ 709 $ 618 $ 725 $ 714 *Denotes non-GAAP financial measure. Refer to related disclosure and reconciliation on pages 24 and 25. BancorpSouth Bank Consolidated Balance Sheets (Unaudited) Mar-21 Dec-20 Sep-20 Jun-20 Mar-20 (Dollars in thousands) Assets Cash and due from banks $ 263,289 $ 284,095 $ 306,164 $ 240,354 $ 253,495 Interest bearing deposits with other banks and Federal funds sold 336,253 133,273 39,782 318,615 29,490 Available-for-sale securities, at fair value 7,640,268 6,231,006 5,659,785 4,973,171 4,468,340 Loans and leases* 15,056,559 15,039,239 15,344,006 15,444,794 14,241,912 Less: Unearned income 17,751 16,760 16,271 17,373 17,267 Allowance for credit losses 241,117 244,422 250,624 237,025 218,199 Net loans and leases 14,797,691 14,778,057 15,077,111 15,190,396 14,006,446 Loans held for sale 518,352 397,076 304,215 391,051 194,321 Premises and equipment, net 508,508 508,147 508,149 504,748 497,669 Accrued interest receivable 106,355 106,318 110,185 101,321 70,463 Goodwill 851,612 851,612 847,531 847,984 848,242 Other identifiable intangibles 53,581 55,899 54,757 56,989 59,345 Bank owned life insurance 335,707 333,264 331,799 329,167 327,312 Other real estate owned 9,351 11,395 6,397 7,164 9,200 Other assets 381,530 391,052 309,547 275,216 268,201 Total Assets $ 25,802,497 $ 24,081,194 $ 23,555,422 $ 23,236,176 $ 21,032,524 Liabilities Deposits: Demand: Noninterest bearing $ 6,990,880 $ 6,341,457 $ 6,336,792 $ 6,385,370 $ 4,861,155 Interest bearing 9,067,373 8,524,010 8,170,402 7,907,637 7,268,053 Savings 2,678,276 2,452,059 2,325,980 2,234,853 2,013,343 Other time 2,436,657 2,528,915 2,579,805 2,651,626 2,745,365 Total deposits 21,173,186 19,846,441 19,412,979 19,179,486 16,887,916 Securities sold under agreement to repurchase 660,485 637,715 611,455 670,016 538,962 Federal funds purchased and other short-term borrowing - - 95,217 220 290,224 Accrued interest payable 11,879 10,885 15,286 13,476 17,482 Junior subordinated debt securities 297,425 297,250 297,074 296,898 296,723 Long-term debt 4,295 4,402 4,508 4,615 4,721 Other liabilities 830,029 462,024 336,364 338,778 314,592 Total Liabilities 22,977,299 21,258,717 20,772,883 20,503,489 18,350,620 Shareholders' Equity Preferred stock 166,993 166,993 166,993 166,993 166,993 Common stock 256,562 256,404 256,396 256,416 256,581 Capital surplus 563,481 565,187 565,635 561,541 558,114 Accumulated other comprehensive (loss) income (43,459) 11,923 18,490 25,191 17,849 Retained earnings 1,881,621 1,821,970 1,775,025 1,722,546 1,682,367 Total Shareholders' Equity 2,825,198 2,822,477 2,782,539 2,732,687 2,681,904 Total Liabilities & Shareholders' Equity $ 25,802,497 $ 24,081,194 $ 23,555,422 $ 23,236,176 $ 21,032,524 *Includes $1.146 billion, $975.4 million, $1.212 billion and $1.193 billion in PPP loans at March 31, 2021, December 31, 2020, September 30, 2020 and June 30, 2020, respectively. BancorpSouth Bank Consolidated Average Balance Sheets (Unaudited) Mar-21 Dec-20 Sep-20 Jun-20 Mar-20 (Dollars in thousands) Assets Cash and due from banks $ 261,519 $ 247,799 $ 232,421 $ 229,334 $ 246,860 Interest bearing deposits with other banks and Federal funds sold 412,313 171,650 257,057 760,789 239,766 Available-for-sale securities, at fair value 6,606,027 5,820,425 5,309,982 4,437,614 4,461,298 Loans and leases* 15,045,837 15,235,827 15,386,721 15,132,600 14,244,649 Less: Unearned income 16,761 16,425 17,037 17,868 17,861 Allowance for credit losses 242,935 247,049 236,536 217,508 193,796 Net loans and leases 14,786,141 14,972,353 15,133,148 14,897,224 14,032,992 Loans held for sale 289,755 277,600 296,352 261,377 147,798 Premises and equipment, net 508,551 508,053 507,190 499,767 494,413 Accrued interest receivable 102,190 105,513 104,435 137,456 64,010 Goodwill 851,612 852,472 847,744 848,160 844,635 Other identifiable intangibles 54,876 54,858 56,045 58,280 58,805 Bank owned life insurance 333,837 332,543 330,642 328,037 326,808 Other real estate owned 11,043 14,872 7,754 8,410 8,151 Other assets 327,696 302,365 236,107 241,238 264,101 Total Assets $ 24,545,560 $ 23,660,503 $ 23,318,877 $ 22,707,686 $ 21,189,637 Liabilities Deposits: Demand: Noninterest bearing $ 6,484,703 $ 6,391,006 $ 6,340,942 $ 5,942,570 $ 4,717,202 Interest bearing 8,956,420 8,268,528 8,022,755 7,674,479 7,466,674 Savings 2,550,095 2,386,034 2,280,860 2,152,092 1,975,690 Other time 2,480,862 2,555,295 2,614,373 2,685,331 2,745,663 Total deposits 20,472,080 19,600,863 19,258,930 18,454,472 16,905,229 Securities sold under agreement to repurchase 651,694 672,018 681,400 644,127 541,707 Federal funds purchased and other short-term borrowing 1,500 3,893 36,696 269,121 502,257 Accrued interest payable 11,607 14,175 15,589 16,268 19,205 Junior subordinated debt securities 297,318 297,145 296,969 296,793 296,617 Long-term debt 4,378 4,488 4,592 4,699 4,800 Other liabilities 293,982 293,332 294,831 283,772 261,123 Total Liabilities 21,732,559 20,885,914 20,589,007 19,969,252 18,530,938 Shareholders' Equity Preferred stock 166,993 166,993 166,993 166,993 167,021 Common stock 256,536 256,422 256,412 256,515 261,065 Capital surplus 563,529 568,343 563,267 559,737 600,880 Accumulated other comprehensive (loss) income (5,090) 12,432 24,758 23,016 (36,367) Retained earnings 1,831,033 1,770,399 1,718,440 1,732,173 1,666,100 Total Shareholders' Equity 2,813,001 2,774,589 2,729,870 2,738,434 2,658,699 Total Liabilities & Shareholders' Equity $ 24,545,560 $ 23,660,503 $ 23,318,877 $ 22,707,686 $ 21,189,637 *Includes $1.062 billion, $1.140 billion, $1.207 billion and $975.0 million in PPP loans for the quarter ended March 31, 2021, December 31, 2020, September 30, 2020 and June 30, 2020, respectively. BancorpSouth Bank Consolidated Condensed Statements of Income (Dollars in thousands, except per share data) (Unaudited) Quarter Ended Mar-21 Dec-20 Sep-20 Jun-20 Mar-20 INTEREST REVENUE: Loans and leases $ 169,195 $ 174,072 $ 175,810 $ 173,164 $ 177,019 Deposits with other banks 108 50 74 207 739 Federal funds sold, securities purchased under agreement to resell, FHLB and other equity investments 6 6 52 178 315 Available-for-sale securities: Taxable 21,192 21,895 21,280 20,783 21,508 Tax-exempt 687 760 986 1,178 1,060 Loans held for sale 1,595 2,504 2,468 1,962 1,423 Total interest revenue 192,783 199,287 200,670 197,472 202,064 INTEREST EXPENSE: Interest bearing demand 8,796 9,766 10,773 11,631 15,522 Savings 700 872 1,012 943 1,290 Other time 6,966 8,189 9,287 10,296 11,168 Federal funds purchased and securities sold under agreement to repurchase 203 276 279 291 1,436 Short-term and long-term debt 45 47 49 477 1,857 Junior subordinated debt 3,269 3,201 3,338 3,263 3,261 Other 15 - 1 1 - Total interest expense 19,994 22,351 24,739 26,902 34,534 Net interest revenue 172,789 176,936 175,931 170,570 167,530 Provision for credit losses - 5,000 15,000 20,000 46,000 Net interest revenue, after provision for credit losses 172,789 171,936 160,931 150,570 121,530 NONINTEREST REVENUE: Mortgage banking 25,310 20,129 27,097 29,557 9,470 Credit card, debit card and merchant fees 9,659 10,053 9,938 9,080 9,176 Deposit service charges 8,477 9,708 8,892 7,647 11,682 Security gains(losses), net 82 63 18 62 (85) Insurance commissions 30,667 29,815 32,750 33,118 29,603 Wealth management 8,465 6,751 6,471 6,421 6,570 Other 5,276 2,307 4,758 5,373 10,080 Total noninterest revenue 87,936 78,826 89,924 91,258 76,496 NONINTEREST EXPENSE: Salaries and employee benefits 101,060 97,215 104,219 108,103 108,272 Occupancy, net of rental income 12,814 13,004 13,053 12,890 12,708 Equipment 4,564 4,756 4,519 4,762 4,649 Deposit insurance assessments 1,455 1,696 1,522 1,962 1,546 Pension settlement expense - 5,846 - - - Other 35,930 45,394 32,192 34,787 40,831 Total noninterest expense 155,823 167,911 155,505 162,504 168,006 Income before income taxes 104,902 82,851 95,350 79,324 30,020 Income tax expense 23,347 14,046 21,525 18,164 5,759 Net income $ 81,555 $ 68,805 $ 73,825 $ 61,160 $ 24,261 Less: Preferred dividends 2,372 2,372 2,372 2,372 2,372 Net income available to common shareholders $ 79,183 $ 66,433 $ 71,453 $ 58,788 $ 21,889 Net income per common share: Basic $ 0.77 $ 0.65 $ 0.70 $ 0.57 $ 0.21 Diluted $ 0.77 $ 0.65 $ 0.69 $ 0.57 $ 0.21 BancorpSouth Bank Selected Loan Data (Dollars in thousands) (Unaudited) Quarter Ended Mar-21 Dec-20 Sep-20 Jun-20 Mar-20 LOAN AND LEASE PORTFOLIO: Commercial and industrial Commercial and industrial-non real estate 2,865,706 2,673,429 2,937,608 3,038,957 2,008,043 Commercial and industrial-owner occupied 2,260,456 2,281,127 2,297,008 2,296,287 2,290,585 Total commercial and industrial 5,126,162 4,954,556 5,234,616 5,335,244 4,298,628 Commercial real estate Agricultural 337,710 317,994 333,839 333,615 339,539 Construction, acquisition and development 1,707,800 1,728,682 1,700,030 1,658,678 1,582,039 Commercial real estate 3,127,510 3,211,434 3,229,959 3,323,744 3,303,537 Total commercial real estate 5,173,020 5,258,110 5,263,828 5,316,037 5,225,115 Consumer Consumer mortgages 3,700,076 3,726,241 3,704,490 3,646,168 3,572,277 Home equity 608,924 630,097 658,708 655,543 686,202 Credit cards 81,499 89,077 85,760 86,592 93,896 Total consumer 4,390,499 4,445,415 4,448,958 4,388,303 4,352,375 All other 349,127 364,398 380,333 387,837 348,527 Total loans $ 15,038,808 $ 15,022,479 $ 15,327,735 $ 15,427,421 $ 14,224,645 ALLOWANCE FOR CREDIT LOSSES: Balance, beginning of period $ 244,422 $ 250,624 $ 237,025 $ 218,199 $ 119,066 Impact of adopting ASC 326 - cumulative effect adjustment - - - - 40,000 Impact of adopting ASC 326 - purchased loans with credt deterioration - - - - 22,634 Loans and leases charged-off: Commercial and industrial Commercial and industrial-non real estate (2,269) (4,343) (560) (1,506) (10,792) Commercial and industrial-owner occupied (677) (1,168) (441) (13) (184) Total commercial and industrial (2,946) (5,511) (1,001) (1,519) (10,976) Commercial real estate Agricultural (98) (155) - (21) (65) Construction, acquisition and development (807) (1,773) - (9) (3,173) Commercial real estate (478) (3,134) (738) - (67) Total commercial real estate (1,383) (5,062) (738) (30) (3,305) Consumer Consumer mortgages (293) (731) (81) (124) (524) Home equity (50) (395) (41) (162) (236) Credit cards (733) (458) (682) (703) (798) Total consumer (1,076) (1,584) (804) (989) (1,558) All other (501) (875) (599) (396) (914) Total loans charged-off (5,906) (13,032) (3,142) (2,934) (16,753) Recoveries: Commercial and industrial Commercial and industrial-non real estate 1,031 779 294 277 355 Commercial and industrial-owner occupied 62 37 163 136 1,179 Total commercial and industrial 1,093 816 457 413 1,534 Commercial real estate Agricultural 86 24 3 6 6 Construction, acquisition and development 53 73 55 172 245 Commercial real estate 56 45 209 50 135 Total commercial real estate 195 142 267 228 386 Consumer Consumer mortgages 403 230 352 345 397 Home equity 220 151 132 259 80 Credit cards 297 211 270 195 285 Total consumer 920 592 754 799 762 All other 393 280 263 320 344 Total recoveries 2,601 1,830 1,741 1,760 3,026 Net (charge-offs)recoveries (3,305) (11,202) (1,401) (1,174) (13,727) Initial allowance on loans purchased with credit deterioration - - - - 4,226 Provision: Initial provision for loans acquired during the quarter - - - - 1,000 Provision for credit losses related to loans and leases - 5,000 15,000 20,000 45,000 Total provision - 5,000 15,000 20,000 46,000 Balance, end of period $ 241,117 $ 244,422 $ 250,624 $ 237,025 $ 218,199 Average loans for period $ 15,029,076 $ 15,219,402 $ 15,369,684 $ 15,114,732 $ 14,226,788 Ratio: Net charge-offs(recoveries) to average loans (annualized) 0.09% 0.29% 0.04% 0.03% 0.39% BancorpSouth Bank Selected Loan Data (Dollars in thousands) (Unaudited) Quarter Ended Mar-21 Dec-20 Sep-20 Jun-20 Mar-20 BXS ORIGINATED LOANS AND LEASES: Loans and leases charged off: Commercial and industrial Commercial and industrial-non real estate $ (1,971) $ (1,991) $ (490) $ (420) $ (230) Commercial and industrial-owner occupied (187) (303) (434) (13) (19) Total commercial and industrial (2,158) (2,294) (924) (433) (249) Commercial real estate Agricultural (94) (124) - - (65) Construction, acquisition and development (344) (1,709) - - (121) Commercial real estate (27) (1,704) (155) - (67) Total real estate (465) (3,537) (155) - (253) Consumer Consumer mortgages (181) (537) (70) (113) (357) Home equity (50) (395) (41) (162) (236) Credit cards (733) (458) (682) (703) (798) Total consumer (964) (1,390) (793) (978) (1,391) All other (399) (698) (459) (288) (704) Total loans charged off (3,986) (7,919) (2,331) (1,699) (2,597) Recoveries: Commercial and industrial Commercial and industrial-non real estate 387 645 231 210 325 Commercial and industrial-owner occupied 61 27 163 136 1,177 Total commercial and industrial 448 672 394 346 1,502 Commercial real estate Agricultural 5 23 3 5 4 Construction, acquisition and development 51 73 55 170 244 Commercial real estate 36 45 208 50 135 Total real estate 92 141 266 225 383 Consumer Consumer mortgages 392 221 350 343 395 Home equity 219 149 130 258 79 Credit cards 297 211 270 195 285 Total consumer 908 581 750 796 759 All other 325 249 235 275 316 Total recoveries 1,773 1,643 1,645 1,642 2,960 Net (charge-offs)/recoveries $ (2,213) $ (6,276) $ (686) $ (57) $ 363 BancorpSouth Bank Selected Loan Data (Dollars in thousands) (Unaudited) Quarter Ended Mar-21 Dec-20 Sep-20 Jun-20 Mar-20 ACQUIRED LOANS AND LEASES: Loans and leases charged off: Commercial and industrial Commercial and industrial-non real estate $ (298) $ (2,352) $ (70) $ (1,086) $ (10,562) Commercial and industrial-owner occupied (490) (865) (7) - (165) Total commercial and industrial (788) (3,217) (77) (1,086) (10,727) Commercial real estate Agricultural (4) (31) - (21) - Construction, acquisition and development (463) (64) - (9) (3,052) Commercial real estate (451) (1,430) (583) - - Total real estate (918) (1,525) (583) (30) (3,052) Consumer Consumer mortgages (112) (194) (11) (11) (167) Home equity - - - - - Credit cards - - - - - Total consumer (112) (194) (11) (11) (167) All other (102) (177) (140) (108) (210) Total loans charged off (1,920) (5,113) (811) (1,235) (14,156) Recoveries: Commercial and industrial Commercial and industrial-non real estate 644 134 63 67 30 Commercial and industrial-owner occupied 1 10 - - 2 Total commercial and industrial 645 144 63 67 32 Commercial real estate Agricultural 81 1 - 1 2 Construction, acquisition and development 2 - - 2 1 Commercial real estate 20 - 1 - - Total real estate 103 1 1 3 3 Consumer Consumer mortgages 11 9 2 2 2 Home equity 1 2 2 1 1 Credit cards - - - - - Total consumer 12 11 4 3 3 All other 68 31 28 45 28 Total recoveries 828 187 96 118 66 Net (charge-offs)/recoveries $ (1,092) $ (4,926) $ (715) $ (1,117) $ (14,090) BancorpSouth Bank Selected Loan Data (Dollars in thousands) (Unaudited) Quarter Ended Mar-21 Dec-20 Sep-20 Jun-20 Mar-20 NON-PERFORMING ASSETS NON-PERFORMING LOANS AND LEASES: Nonaccrual Loans and Leases Commercial and industrial Commercial and industrial-non real estate $ 9,703 $ 12,768 $ 17,936 $ 16,124 $ 16,589 Commercial and industrial-owner occupied 15,019 15,783 18,343 16,745 11,212 Total commercial and industrial 24,722 28,551 36,279 32,869 27,801 Commercial real estate Agricultural 2,293 5,013 5,907 5,244 5,454 Construction, acquisition and development 8,494 9,738 10,434 9,715 13,899 Commercial real estate 12,838 16,249 32,554 45,047 29,697 Total commercial real estate 23,625 31,000 48,895 60,006 49,050 Consumer Consumer mortgages 23,535 32,951 32,872 30,672 29,834 Home equity 847 2,657 3,325 2,584 2,597 Credit cards 131 173 144 90 122 Total consumer 24,513 35,781 36,341 33,346 32,553 All other 282 1,046 593 532 670 Total nonaccrual loans and leases $ 73,142 $ 96,378 $ 122,108 $ 126,753 $ 110,074 Loans and Leases 90+ Days Past Due, Still Accruing: 21,208 14,320 17,641 9,877 7,272 Restructured Loans and Leases, Still Accruing 6,971 10,475 11,154 11,575 11,284 Total non-performing loans and leases $ 101,321 $ 121,173 $ 150,903 $ 148,205 $ 128,630 OTHER REAL ESTATE OWNED: 9,351 11,395 6,397 7,164 9,200 Total Non-performing Assets $ 110,672 $ 132,568 $ 157,300 $ 155,369 $ 137,830 BXS originated assets $ 85,266 $ 97,025 $ 109,418 $ 94,155 $ 85,908 Acquired assets 25,406 35,543 47,882 61,214 51,922 Total Non-performing Assets $ 110,672 $ 132,568 $ 157,300 $ 155,369 $ 137,830 Additions to Nonaccrual Loans and Leases During the Quarter $ 10,029 $ 11,087 $ 19,973 $ 36,619 $ 47,523 Loans and Leases 30-89 Days Past Due, Still Accruing: BXS originated loans $ 34,929 $ 40,424 $ 42,978 $ 35,002 $ 54,315 Acquired loans 2,798 6,048 5,694 10,450 14,405 Total Loans and Leases 30-89 days past due, still accruing $ 37,727 $ 46,472 $ 48,672 $ 45,452 $ 68,720 BancorpSouth Bank Selected Loan Data (Dollars in thousands) (Unaudited) March 31, 2021 Purchased Special Credit Pass Mention Substandard Doubtful Loss Impaired Deteriorated (Loss) Total LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE: Commercial and industrial Commercial and industrial-non real estate $ 2,825,297 $ - $ 30,526 $ 171 $ - $ 1,909 $ 7,803 $ 2,865,706 Commercial and industrial-owner occupied 2,184,516 3,471 58,754 - - 11,086 2,629 2,260,456 Total commercial and industrial 5,009,813 3,471 89,280 171 - 12,995 10,432 5,126,162 Commercial real estate Agricultural 331,802 - 2,877 - - 705 2,326 337,710 Construction, acquisition and development 1,659,787 1,534 38,665 - - 2,448 5,366 1,707,800 Commercial real estate 2,987,075 - 127,147 - - 9,642 3,646 3,127,510 Total commercial real estate 4,978,664 1,534 168,689 - - 12,795 11,338 5,173,020 Consumer Consumer mortgages 3,629,182 - 67,881 - - 2,825 188 3,700,076 Home equity 603,768 - 5,156 - - - - 608,924 Credit cards 81,499 - - - - - - 81,499 Total consumer 4,314,449 - 73,037 - - 2,825 188 4,390,499 All other 343,656 - 5,404 - - - 67 349,127 Total loans $ 14,646,582 $ 5,005 $ 336,410 $ 171 $ - $ 28,615 $ 22,025 $ 15,038,808 BXS originated loans $ 13,635,053 $ 5,005 $ 252,140 $ 171 $ - $ 18,188 $ - $ 13,910,557 Acquired loans* 1,011,529 - 84,270 - - 10,427 22,025 1,128,251 Total Loans $ 14,646,582 $ 5,005 $ 336,410 $ 171 $ - $ 28,615 $ 22,025 $ 15,038,808 December 31, 2020 Purchased Special Credit Pass Mention Substandard Doubtful Loss Impaired Deteriorated (Loss) Total LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE: Commercial and industrial Commercial and industrial-non real estate $ 2,616,471 $ 7,202 $ 39,040 $ 172 $ - $ 1,949 $ 8,595 $ 2,673,429 Commercial and industrial-owner occupied 2,208,214 - 58,683 - - 11,579 2,651 2,281,127 Total commercial and industrial 4,824,685 7,202 97,723 172 - 13,528 11,246 4,954,556 Commercial real estate Agricultural 310,766 - 4,526 - - 777 1,925 317,994 Construction, acquisition and development 1,686,907 1,534 32,363 - - 2,054 5,824 1,728,682 Commercial real estate 3,062,894 - 134,054 - - 10,780 3,706 3,211,434 Total commercial real estate 5,060,567 1,534 170,943 - - 13,611 11,455 5,258,110 Consumer Consumer mortgages 3,645,357 - 78,287 - - 2,406 191 3,726,241 Home equity 624,581 - 5,516 - - - - 630,097 Credit cards 89,077 - - - - - - 89,077 Total consumer 4,359,015 - 83,803 - - 2,406 191 4,445,415 All other 357,812 - 6,519 - - - 67 364,398 Total loans $ 14,602,079 $ 8,736 $ 358,988 $ 172 $ - $ 29,545 $ 22,959 $ 15,022,479 BXS originated loans $ 13,459,529 $ 8,736 $ 259,682 $ 172 $ - $ 17,520 $ - $ 13,745,639 Acquired loans* 1,142,550 - 99,306 - - 12,025 22,959 1,276,840 Total Loans $ 14,602,079 $ 8,736 $ 358,988 $ 172 $ - $ 29,545 $ 22,959 $ 15,022,479 *Includes certain loans that are no longer included in the "Net book value of acquired loans" on page 10 as a result of maturity, refinance, or other triggering event. BancorpSouth Bank Selected Loan Data (Dollars in thousands) (Unaudited) Quarter Ended Mar-21 Dec-20 Sep-20 Jun-20 Mar-20 LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE: Pass $ 14,646,582 $ 14,602,079 $ 14,877,943 $ 14,985,673 $ 13,821,602 Special Mention 5,005 8,736 - 4,264 7,129 Substandard 336,410 358,988 372,483 350,264 323,697 Doubtful 171 172 178 179 191 Loss - - - - 667 Impaired 28,615 29,545 49,818 57,406 40,627 Purchased Credit Deteriorated (Loss) 22,025 22,959 27,313 29,635 30,732 Total $ 15,038,808 $ 15,022,479 $ 15,327,735 $ 15,427,421 $ 14,224,645 BXS ORIGINATED LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE: Pass $ 13,635,053 $ 13,459,529 $ 13,592,460 $ 13,516,292 $ 12,150,616 Special Mention 5,005 8,736 - 2,741 2,045 Substandard 252,140 259,682 252,875 231,687 225,506 Doubtful 171 172 178 179 191 Loss - - - - - Impaired 18,188 17,520 30,909 28,288 22,356 Purchased Credit Deteriorated (Loss) - - - - - Total $ 13,910,557 $ 13,745,639 $ 13,876,422 $ 13,779,187 $ 12,400,714 ACQUIRED LOAN PORTFOLIO BY INTERNALLY ASSIGNED GRADE: Pass $ 1,011,529 $ 1,142,550 $ 1,285,483 $ 1,469,381 $ 1,670,986 Special Mention - - - 1,523 5,084 Substandard 84,270 99,306 119,608 118,577 98,191 Doubtful - - - - - Loss - - - - 667 Impaired 10,427 12,025 18,909 29,118 18,271 Purchased Credit Deteriorated (Loss) 22,025 22,959 27,313 29,635 30,732 Total $ 1,128,251 $ 1,276,840 $ 1,451,313 $ 1,648,234 $ 1,823,931 BancorpSouth Bank Geographical Information (Dollars in thousands) (Unaudited) March 31, 2021 Alabama and Florida Panhandle Arkansas Louisiana Mississippi Missouri Tennessee Texas Other Total LOAN AND LEASE PORTFOLIO: Commercial and industrial Commercial and industrial-non real estate $ 254,421 $ 205,840 $ 331,255 $ 674,111 $ 87,701 $ 175,804 $ 1,132,825 $ 3,749 $ 2,865,706 Commercial and industrial-owner occupied 265,198 180,900 229,123 592,555 64,563 123,882 787,661 16,574 2,260,456 Total commercial and industrial 519,619 386,740 560,378 1,266,666 152,264 299,686 1,920,486 20,323 5,126,162 Commercial real estate Agricultural 26,692 69,704 22,287 69,210 7,834 11,234 130,343 406 337,710 Construction, acquisition and development 202,159 52,596 74,407 346,196 12,741 83,245 936,258 198 1,707,800 Commercial real estate 316,143 320,806 243,605 645,649 204,343 218,316 1,177,921 727 3,127,510 Total commercial real estate 544,994 443,106 340,299 1,061,055 224,918 312,795 2,244,522 1,331 5,173,020 Consumer Consumer mortgages 594,984 319,060 326,864 811,487 110,284 327,596 1,157,824 51,977 3,700,076 Home equity 92,721 44,282 73,245 209,906 16,218 130,875 41,573 104 608,924 Credit cards - - - - - - - 81,499 81,499 Total consumer 687,705 363,342 400,109 1,021,393 126,502 458,471 1,199,397 133,580 4,390,499 All other 48,036 36,285 46,268 117,094 2,030 22,245 73,793 3,376 349,127 Total loans $ 1,800,354 $ 1,229,473 $ 1,347,054 $ 3,466,208 $ 505,714 $ 1,093,197 $ 5,438,198 $ 158,610 $ 15,038,808 Loan growth, excluding loans acquired during the quarter (annualized) 3.07% (10.00%) (4.59%) (6.36%) (13.63%) 3.29% 9.32% (21.40%) 0.44% Loan growth, excluding PPP loans (annualized) (0.62%) (13.30%) (13.71%) (9.37%) (16.50%) (1.02%) 4.46% (41.87%) (4.16%) NON-PERFORMING LOANS AND LEASES: Commercial and industrial Commercial and industrial-non real estate $ 188 $ 776 $ 1,176 $ 841 $ 1,162 $ 422 $ 5,546 $ 156 $ 10,267 Commercial and industrial-owner occupied 607 1,225 373 1,512 166 - 13,351 - 17,234 Total commercial and industrial 795 2,001 1,549 2,353 1,328 422 18,897 156 27,501 Commercial real estate Agricultural 63 337 - 965 - - 1,522 - 2,887 Construction, acquisition and development - 131 1,149 83 - 189 10,838 - 12,390 Commercial real estate 2,027 243 1,766 896 - - 8,584 - 13,516 Total commercial real estate 2,090 711 2,915 1,944 - 189 20,944 - 28,793 Consumer Consumer mortgages 11,093 2,942 2,975 11,157 1,120 2,597 8,481 2,027 42,392 Home equity 163 52 298 388 87 131 294 - 1,413 Credit cards - - - - - - - 832 832 Total consumer 11,256 2,994 3,273 11,545 1,207 2,728 8,775 2,859 44,637 All other 43 1 45 42 - 3 234 22 390 Total loans $ 14,184 $ 5,707 $ 7,782 $ 15,884 $ 2,535 $ 3,342 $ 48,850 $ 3,037 $ 101,321 NON-PERFORMING LOANS AND LEASES AS A PERCENTAGE OF OUTSTANDING: Commercial and industrial Commercial and industrial-non real estate 0.07% 0.38% 0.36% 0.12% 1.32% 0.24% 0.49% 4.16% 0.36% Commercial and industrial-owner occupied 0.23% 0.68% 0.16% 0.26% 0.26% 0.00% 1.70% 0.00% 0.76% Total commercial and industrial 0.15% 0.52% 0.28% 0.19% 0.87% 0.14% 0.98% 0.77% 0.54% Commercial real estate Agricultural 0.24% 0.48% 0.00% 1.39% 0.00% 0.00% 1.17% 0.00% 0.85% Construction, acquisition and development 0.00% 0.25% 1.54% 0.02% 0.00% 0.23% 1.16% 0.00% 0.73% Commercial real estate 0.64% 0.08% 0.72% 0.14% 0.00% 0.00% 0.73% 0.00% 0.43% Total commercial real estate 0.38% 0.16% 0.86% 0.18% 0.00% 0.06% 0.93% 0.00% 0.56% Consumer Consumer mortgages 1.86% 0.92% 0.91% 1.37% 1.02% 0.79% 0.73% 3.90% 1.15% Home equity 0.18% 0.12% 0.41% 0.18% 0.54% 0.10% 0.71% 0.00% 0.23% Credit cards N/A N/A N/A N/A N/A N/A N/A 1.02% 1.02% Total consumer 1.64% 0.82% 0.82% 1.13% 0.95% 0.60% 0.73% 2.14% 1.02% All other 0.09% 0.00% 0.10% 0.04% 0.00% 0.01% 0.32% 0.65% 0.11% Total loans 0.79% 0.46% 0.58% 0.46% 0.50% 0.31% 0.90% 1.91% 0.67% BancorpSouth Bank Noninterest Revenue and Expense (Dollars in thousands) (Unaudited) Quarter Ended Mar-21 Dec-20 Sep-20 Jun-20 Mar-20 NONINTEREST REVENUE: Mortgage banking excl. MSR and MSR Hedge market value adj $ 17,929 $ 19,917 $ 26,667 $ 31,930 $ 20,553 MSR and MSR Hedge market value adjustment 7,381 212 430 (2,373) (11,083) Credit card, debit card and merchant fees 9,659 10,053 9,938 9,080 9,176 Deposit service charges 8,477 9,708 8,892 7,647 11,682 Securities gains (losses), net 82 63 18 62 (85) Insurance commissions 30,667 29,815 32,750 33,118 29,603 Trust income 5,129 4,046 3,902 4,064 4,013 Annuity fees 51 53 53 54 55 Brokerage commissions and fees 3,285 2,652 2,516 2,303 2,502 Bank-owned life insurance 2,020 2,425 1,902 1,855 1,999 Other miscellaneous income 3,256 (118) 2,856 3,518 8,081 Total noninterest revenue $ 87,936 $ 78,826 $ 89,924 $ 91,258 $ 76,496 NONINTEREST EXPENSE: Salaries and employee benefits $ 101,060 $ 97,215 $ 104,219 $ 108,103 $ 108,272 Occupancy, net of rental income 12,814 13,004 13,053 12,890 12,708 Equipment 4,564 4,756 4,519 4,762 4,649 Deposit insurance assessments 1,455 1,696 1,522 1,962 1,546 Pension settlement expense - 5,846 - - - Advertising 1,004 899 826 918 1,099 Foreclosed property expense 1,021 2,122 (278) 1,306 924 Telecommunications 1,398 1,448 1,462 1,512 1,461 Public relations 741 897 1,130 459 680 Data processing 10,424 9,980 9,477 9,693 9,646 Computer software 5,113 5,301 4,779 4,979 4,315 Amortization of intangibles 2,318 2,499 2,357 2,355 2,394 Legal 1,166 1,474 (316) 1,375 898 Merger expense 1,649 212 129 510 4,494 Postage and shipping 1,547 1,418 1,199 1,198 1,441 Other miscellaneous expense 9,549 19,144 11,427 10,482 13,479 Total noninterest expense $ 155,823 $ 167,911 $ 155,505 $ 162,504 $ 168,006 INSURANCE COMMISSIONS: Property and casualty commissions $ 21,949 $ 21,304 $ 24,060 $ 23,644 $ 21,246 Life and health commissions 6,494 5,915 6,072 6,771 6,175 Risk management income 613 829 609 540 532 Other 1,611 1,767 2,009 2,163 1,650 Total insurance commissions $ 30,667 $ 29,815 $ 32,750 $ 33,118 $ 29,603 BancorpSouth Bank Selected Additional Information (Dollars in thousands) (Unaudited) Quarter Ended Mar-21 Dec-20 Sep-20 Jun-20 Mar-20 MORTGAGE SERVICING RIGHTS: Fair value, beginning of period $ 47,571 $ 44,944 $ 40,821 $ 42,243 $ 57,109 Additions to mortgage servicing rights: Originations of servicing assets 5,588 6,608 7,041 4,297 3,079 Changes in fair value: Due to payoffs/paydowns (3,273) (3,898) (3,198) (3,144) (2,506) Due to change in valuation inputs or assumptions used in the valuation model 10,446 (83) 280 (2,575) (15,438) Other changes in fair value - - - - (1) Fair value, end of period $ 60,332 $ 47,571 $ 44,944 $ 40,821 $ 42,243 MORTGAGE BANKING REVENUE: Production revenue: Origination $ 15,955 $ 18,561 $ 23,632 $ 30,194 $ 17,906 Servicing 5,247 5,254 6,233 4,880 5,153 Payoffs/Paydowns (3,273) (3,898) (3,198) (3,144) (2,506) Total production revenue 17,929 19,917 26,667 31,930 20,553 Market value adjustment on MSR 10,446 (83) 280 (2,575) (15,438) Market value adjustment on MSR Hedge (3,065) 295 150 202 4,355 Total mortgage banking revenue $ 25,310 $ 20,129 $ 27,097 $ 29,557 $ 9,470 Mortgage loans serviced $ 7,259,808 $ 7,330,293 $ 7,218,090 $ 7,000,425 $ 6,999,383 MSR/mtg loans serviced 0.83% 0.65% 0.62% 0.58% 0.60% AVAILABLE-FOR-SALE SECURITIES, at fair value U.S. Government agencies 2,642,646 2,871,408 $ 3,116,458 $ 3,348,206 $ 3,532,905 U.S. Government agency issued residential mortgage-back securities 3,438,246 2,421,409 1,625,325 699,864 132,902 U.S. Government agency issued commercial mortgage-back securities 1,414,345 806,206 758,116 759,980 595,885 Obligations of states and political subdivisions 126,589 113,953 141,896 163,121 206,648 Corporate bonds 18,442 18,030 17,990 2,000 - Total available-for-sale securities $ 7,640,268 $ 6,231,006 $ 5,659,785 $ 4,973,171 $ 4,468,340 BancorpSouth Bank Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions (Dollars in thousands, except per share amounts) (Unaudited) Management evaluates the Company's capital position and operating performance by utilizing certain financial measures not calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP), including net operating income, net operating income available to common shareholders, net operating income-excluding MSR, net operating income available to common shareholders-excluding MSR, pre-tax pre-provision net revenue, total operating expense, tangible shareholders' equity to tangible assets, tangible shareholders' equity to tangible assets-excluding PPP loans, tangible common shareholders' equity to tangible assets, tangible common shareholders' equity to tangible assets-excluding PPP loans, return on average tangible equity, return on average tangible common equity, operating return on average tangible equity-excluding MSR, operating return on average tangible common equity-excluding MSR, operating return on average assets-excluding MSR, operating return on average shareholders' equity-excluding MSR, operating return on average common shareholders' equity-excluding MSR, pre-tax pre-provision net revenue to total average assets, average tangible book value per common share, operating earnings per common share, operating earnings per common share-excluding MSR, efficiency ratio (tax equivalent) and operating efficiency ratio-excluding MSR (tax equivalent). The Company has included these non-GAAP financial measures in this news release for the applicable periods presented. Management believes that the presentation of these non-GAAP financial measures (i) provides important supplemental information that contributes to a proper understanding of the Company's capital position and operating performance, (ii) enables a more complete understanding of factors and trends affecting the Company's business and (iii) allows investors to evaluate the Company's performance in a manner similar to management, the financial services industry, bank stock analysts and bank regulators. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the tables below. These non-GAAP financial measures should not be considered as substitutes for GAAP financial measures, and the Company strongly encourages investors to review the GAAP financial measures included in this news release and not to place undue reliance upon any single financial measure. In addition, because non-GAAP financial measures are not standardized, it may not be possible to compare the non-GAAP financial measures presented in this news release with other companies' non-GAAP financial measures having the same or similar names. Reconciliation of Net Operating Income, Net Operating Income Available to Common Shareholders, Net Operating Income-Excluding MSR, and Net Operating Income Available to Common Shareholders-excluding MSR to Net Income: Quarter ended 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Net income $ 81,555 $ 68,805 $ 73,825 $ 61,160 $ 24,261 Plus: Merger expense, net of tax 1,238 159 97 383 3,372 Initial provision for acquired loans, net of tax - - - - 751 Pension settlement expense, net of tax - 4,388 - - - Less: Security gains(losses), net of tax 62 48 13 47 (64) Net operating income $ 82,731 $ 73,304 $ 73,909 $ 61,496 $ 28,448 Less: Preferred dividends 2,372 2,372 2,372 2,372 2,372 Net operating income available to common shareholders $ 80,359 $ 70,932 $ 71,537 $ 59,124 $ 26,076 Net operating income $ 82,731 $ 73,304 $ 73,909 $ 61,496 $ 28,448 Less: MSR market value adjustment, net of tax 5,539 159 323 (1,781) (8,318) Net operating income-excluding MSR $ 77,192 $ 73,145 $ 73,586 $ 63,277 $ 36,766 Less: Preferred dividends 2,372 2,372 2,372 2,372 2,372 Net operating income available to common shareholders-excluding MSR $ 74,820 $ 70,773 $ 71,214 $ 60,905 $ 34,394 Reconciliation of Net Income to Pre-Tax Pre-Provision Net Revenue Net income $ 81,555 $ 68,805 $ 73,825 $ 61,160 $ 24,261 Plus: Provision for credit losses - 5,000 15,000 20,000 46,000 Merger expense 1,649 212 129 510 4,494 Pension settlement expense - 5,846 - - - Income tax expense 23,347 14,046 21,525 18,164 5,759 Less: Security gains(losses) 82 63 18 62 (85) MSR market value adjustment 7,381 212 430 (2,373) (11,083) Pre-tax pre-provision net revenue $ 99,088 $ 93,634 $ 110,031 $ 102,145 $ 91,682 Reconciliation of Total Operating Expense to Total Noninterest Expense: Total noninterest expense $ 155,823 $ 167,911 $ 155,505 $ 162,504 $ 168,006 Less: Merger expense 1,649 212 129 510 4,494 Pension settlement expense - 5,846 - - - Total operating expense $ 154,174 $ 161,853 $ 155,376 $ 161,994 $ 163,512 BancorpSouth Bank Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions (Dollars in thousands, except per share amounts) (Unaudited) Reconciliation of Tangible Assets and Tangible Shareholders' Equity to Total Assets and Total Shareholders' Equity: Quarter ended 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Tangible assets Total assets $ 25,802,497 $ 24,081,194 $ 23,555,422 $ 23,236,176 $ 21,032,524 Less: Goodwill 851,612 851,612 847,531 847,984 848,242 Other identifiable intangible assets 53,581 55,899 54,757 56,989 59,345 Total tangible assets $ 24,897,304 $ 23,173,683 $ 22,653,134 $ 22,331,203 $ 20,124,937 Less: PPP loans 1,146,000 975,421 1,212,246 1,192,715 - Total tangible assets-excluding PPP loans $ 23,751,304 $ 22,198,262 $ 21,440,888 $ 21,138,488 $ 20,124,937 PERIOD END BALANCES: Tangible shareholders' equity Total shareholders' equity $ 2,825,198 $ 2,822,477 $ 2,782,539 $ 2,732,687 $ 2,681,904 Less: Goodwill 851,612 851,612 847,531 847,984 848,242 Other identifiable intangible assets 53,581 55,899 54,757 56,989 59,345 Total tangible shareholders' equity $ 1,920,005 $ 1,914,966 $ 1,880,251 $ 1,827,714 $ 1,774,317 Less: Preferred stock 166,993 166,993 166,993 166,993 166,993 Total tangible common shareholders' equity $ 1,753,012 $ 1,747,973 $ 1,713,258 $ 1,660,721 $ 1,607,324 AVERAGE BALANCES: Tangible shareholders' equity Total shareholders' equity $ 2,813,001 $ 2,774,589 $ 2,729,870 $ 2,738,434 $ 2,658,699 Less: Goodwill 851,612 852,472 847,744 848,160 844,635 Other identifiable intangible assets 54,876 54,858 56,045 58,280 58,805 Total tangible shareholders' equity $ 1,906,513 $ 1,867,259 $ 1,826,081 $ 1,831,994 $ 1,755,259 Less: Preferred stock 166,993 166,993 166,993 166,993 167,021 Total tangible common shareholders' equity $ 1,739,520 $ 1,700,266 $ 1,659,088 $ 1,665,001 $ 1,588,238 Total average assets $ 24,545,560 $ 23,660,503 $ 23,318,877 $ 22,707,686 $ 21,189,637 Total shares of common stock outstanding 102,624,818 102,561,480 102,558,459 102,566,301 102,632,484 Average shares outstanding-diluted 102,711,584 102,817,409 102,839,749 102,827,225 104,733,897 Tangible shareholders' equity to tangible assets (1) 7.71% 8.26% 8.30% 8.18% 8.82% Tangible shareholders' equity to tangible assets-excluding PPP loans (2) 8.08% 8.63% 8.77% 8.65% 8.82% Tangible common shareholders' equity to tangible assets (3) 7.04% 7.54% 7.56% 7.44% 7.99% Tangible common shareholders' equity to tangible assets-excluding PPP loans (4) 7.38% 7.87% 7.99% 7.86% 7.99% Return on average tangible equity (5) 17.35% 14.66% 16.08% 13.43% 5.56% Return on average tangible common equity (6) 18.46% 15.54% 17.13% 14.20% 5.54% Operating return on average tangible equity-excluding MSR (7) 16.42% 15.58% 16.03% 13.89% 8.42% Operating return on average tangible common equity-excluding MSR (8) 17.44% 16.56% 17.08% 14.71% 8.71% Operating return on average assets-excluding MSR (9) 1.28% 1.23% 1.26% 1.12% 0.70% Operating return on average shareholders' equity-excluding MSR (10) 11.13% 10.49% 10.72% 9.29% 5.56% Operating return on average common shareholders' equity-excluding MSR (11) 11.47% 10.80% 11.05% 9.53% 5.55% Pre-tax pre-provision net revenue to total average assets (12) 1.64% 1.57% 1.88% 1.81% 1.74% Tangible book value per common share (13) $ 17.08 $ 17.04 $ 16.71 $ 16.19 $ 15.66 Operating earnings per common share (14) $ 0.78 $ 0.69 $ 0.70 $ 0.57 $ 0.25 Operating earnings per common share-excluding MSR (15) $ 0.73 $ 0.69 $ 0.69 $ 0.59 $ 0.33 (1) Tangible shareholders' equity to tangible assets is defined by the Company as total shareholders' equity less goodwill and other identifiable intangible assets, divided by the difference of total assets less goodwill and other identifiable intangible assets. (2) Tangible shareholders' equity to tangible assets-excluding PPP loans is defined by the Company as total shareholders' equity less goodwill and other identifiable intangible assets, divided by the difference of total assets less goodwill, other identifiable intangible assets, and PPP loans. (3) Tangible common shareholders' equity to tangible assets is defined by the Company as total shareholders' equity less preferred stock, goodwill and other identifiable intangible assets, divided by the difference of total assets less goodwill and other identifiable intangible assets. (4) Tangible common shareholders' equity to tangible assets-excluding PPP loans is defined by the Company as total shareholders' equity less preferred stock, goodwill and other identifiable intangible assets, divided by the difference of total assets less goodwill, other identifiable intangible assets, and PPP loans. (5) Return on average tangible equity is defined by the Company as annualized net income divided by average tangible shareholders' equity. (6) Return on average tangible common equity is defined by the Company as annualized net income available to common shareholders divided by average tangible common shareholders' equity. (7) Operating return on average tangible equity-excluding MSR is defined by the Company as annualized net operating income-excluding MSR divided by average tangible shareholders' equity. (8) Operating return on average tangible common equity-excluding MSR is defined by the Company as annualized net operating income available to common shareholders-excluding MSR divided by average tangible common shareholders' equity. (9) Operating return on average assets-excluding MSR is defined by the Company as annualized net operating income-excluding MSR divided by total average assets. (10) Operating return on average shareholders' equity-excluding MSR is defined by the Company as annualized net operating income-excluding MSR divided by average shareholders' equity. (11) Operating return on average common shareholders' equity-excluding MSR is defined by the Company as annualized net operating income available to common shareholders-excluding MSR divided by average common shareholders' equity. (12) Pre-tax pre-provision net revenue to total average assets is defined by the Company as annualized pre-tax pre-provision net revenue divided by total average assets adjusted for other non-operating items included in the definition and calculation of net operating income-excluding MSR. (13) Tangible book value per common share is defined by the Company as tangible common shareholders' equity divided by total shares of common stock outstanding. (14) Operating earnings per common share is defined by the Company as net operating income available to common shareholders divided by average common shares outstanding-diluted. (15) Operating earnings per common share-excluding MSR is defined by the Company as net operating income available to common shareholders-excluding MSR divided by average common shares outstanding-diluted. Efficiency Ratio (tax equivalent) and Operating Efficiency Ratio-excluding MSR (tax equivalent) Definitions The efficiency ratio (tax equivalent) and the operating efficiency ratio-excluding MSR (tax equivalent) are supplemental financial measures utilized in management's internal evaluation of the Company's use of resources and are not defined under GAAP. The efficiency ratio (tax equivalent) is calculated by dividing total noninterest expense by total revenue, which includes net interest income plus noninterest income plus the tax equivalent adjustment. The operating efficiency ratio-excluding MSR (tax equivalent) excludesexpense items otherwise disclosed as non-operating from total noninterest expense. In addition,the MSR valuation adjustment as well as securities gains and losses are excluded from total revenue. SOURCE BancorpSouth Bank

Answer: BancorpSouth Announces First Quarter 2021 Results