##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from _________ to _________
 Commission File Number: 001-12991
 BANCORPSOUTH, INC.
  Mississippi
    
    64-0659571(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)One Mississippi Plaza, 201 South Spring StreetTupelo, Mississippi
    
    38804(Address of principal executive offices)
    
    (Zip Code)
 (662) 680-2000
 NOT APPLICABLE
  þ o
 o o
  Large accelerated filer þ
Accelerated filer o
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company o o þ




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##### 



BANCORPSOUTH, INC.
TABLE OF CONTENTS
 PagePART I. Financial InformationITEM 1.
    
    Financial StatementsConsolidated Balance Sheets June 30, 2009 (Unaudited) and December 31, 2008
    
    
    3Consolidated Statements of Income (Unaudited) Three Months and Six Months Ended
June 30, 2009 and 2008
    
    
    4Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended June 30, 2009 and 2008
    
    
    5Notes to Consolidated Financial Statements (Unaudited)
    
    
    6ITEM 2.
    
    Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    21ITEM 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    35ITEM 4.
    
    Controls and Procedures
    
    
    35PART II. Other InformationITEM 1A.
    
    Risk Factors
    
    
    35ITEM 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    35ITEM 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    36ITEM 6.
    
    Exhibits
    
    
    36EX-3.AEX-31.1EX-31.2EX-32.1EX-32.2
  FORWARD-LOOKING STATEMENTS
  2




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##### Table of Contents



PART I.  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS.
 
 
 June 30,
    
    
    December 31,2009
    
    
    2008(Unaudited)
    
    
    (1)(Dollars in thousands, except per share amounts)ASSETSCash and due from banks
    
    $
    236,327
    
    
    $
    291,055Interest bearing deposits with other banks
    
    
    28,836
    
    
    
    13,542Held-to-maturity securities, at amortized cost
    
    
    1,204,618
    
    
    
    1,333,521Available-for-sale securities, at fair value
    
    
    969,207
    
    
    
    982,859Loans and leases
    
    
    9,806,735
    
    
    
    9,740,867Less: Unearned income
    
    
    45,335
    
    
    
    49,590Allowance for credit losses
    
    
    138,747
    
    
    
    132,793Net loans
    
    
    9,622,653
    
    
    
    9,558,484Loans held for sale
    
    
    94,736
    
    
    
    189,242Premises and equipment, net
    
    
    348,661
    
    
    
    351,204Accrued interest receivable
    
    
    71,349
    
    
    
    79,183Goodwill
    
    
    270,097
    
    
    
    268,966Other assets
    
    
    451,335
    
    
    
    412,162TOTAL ASSETS
    
    $
    13,297,819
    
    
    $
    13,480,218LIABILITIESDeposits:Demand: Noninterest bearing
    
    $
    1,773,418
    
    
    $
    1,735,130Interest bearing
    
    
    3,960,008
    
    
    
    3,904,307Savings
    
    
    718,302
    
    
    
    678,326Other time
    
    
    3,705,819
    
    
    
    3,394,109Total deposits
    
    
    10,157,547
    
    
    
    9,711,872Federal funds purchased and securities
sold under agreement to repurchase
    
    
    755,609
    
    
    
    1,205,366Short-term Federal Home Loan Bank and
other short-term borrowings
    
    
    475,000
    
    
    
    691,510Accrued interest payable
    
    
    24,084
    
    
    
    20,755Junior subordinated debt securities
    
    
    160,312
    
    
    
    160,312Long-term Federal Home Loan Bank borrowings
    
    
    286,292
    
    
    
    286,312Other liabilities
    
    
    164,028
    
    
    
    163,831TOTAL LIABILITIES
    
    
    12,022,872
    
    
    
    12,239,958SHAREHOLDERS EQUITYCommon stock, $2.50 par value per share
Authorized  500,000,000 shares, Issued  83,356,430 and
83,105,100 shares, respectively
    
    
    208,391
    
    
    
    207,763Capital surplus
    
    
    220,859
    
    
    
    215,255Accumulated other comprehensive loss
    
    
    (25,162
    )
    
    
    (26,896
    )Retained earnings
    
    
    870,859
    
    
    
    844,138TOTAL SHAREHOLDERS EQUITY
    
    
    1,274,947
    
    
    
    1,240,260TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    13,297,819
    
    
    $
    13,480,218
 
 (1)
    
    Derived from audited financial statements.  3




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Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands, except for per share amounts)INTEREST REVENUE:Loans and leases
    
    $
    129,263
    
    
    $
    147,289
    
    
    $
    258,472
    
    
    $
    306,473Deposits with other banks
    
    
    22
    
    
    
    193
    
    
    
    92
    
    
    
    401Federal funds sold and securities purchased
under agreement to resell
    
    
    3
    
    
    
    
    
    
    
    4
    
    
    
    67Held-to-maturity securities:Taxable
    
    
    12,108
    
    
    
    15,044
    
    
    
    25,139
    
    
    
    30,991Tax-exempt
    
    
    2,155
    
    
    
    2,025
    
    
    
    4,266
    
    
    
    4,100Available-for-sale securities:Taxable
    
    
    8,721
    
    
    
    8,531
    
    
    
    17,759
    
    
    
    18,095Tax-exempt
    
    
    826
    
    
    
    1,260
    
    
    
    1,709
    
    
    
    2,464Loans held for sale
    
    
    1,215
    
    
    
    1,420
    
    
    
    2,490
    
    
    
    3,630Total interest revenue
    
    
    154,313
    
    
    
    175,762
    
    
    
    309,931
    
    
    
    366,221INTEREST EXPENSE:Deposits:Interest bearing demand
    
    
    9,738
    
    
    
    12,938
    
    
    
    21,986
    
    
    
    30,195Savings
    
    
    927
    
    
    
    1,291
    
    
    
    1,863
    
    
    
    2,834Other time
    
    
    26,496
    
    
    
    39,778
    
    
    
    52,329
    
    
    
    86,638Federal funds purchased and securities sold
under agreement to repurchase
    
    
    421
    
    
    
    3,321
    
    
    
    993
    
    
    
    8,516Federal Home Loan Bank borrowings
    
    
    2,885
    
    
    
    5,359
    
    
    
    5,708
    
    
    
    11,644Other
    
    
    2,906
    
    
    
    3,232
    
    
    
    6,236
    
    
    
    6,481Total interest expense
    
    
    43,373
    
    
    
    65,919
    
    
    
    89,115
    
    
    
    146,308Net interest revenue
    
    
    110,940
    
    
    
    109,843
    
    
    
    220,816
    
    
    
    219,913Provision for credit losses
    
    
    17,594
    
    
    
    11,237
    
    
    
    32,539
    
    
    
    22,048Net interest revenue, after provision for
credit losses
    
    
    93,346
    
    
    
    98,606
    
    
    
    188,277
    
    
    
    197,865NONINTEREST REVENUE:Mortgage lending
    
    
    13,959
    
    
    
    9,507
    
    
    
    21,611
    
    
    
    11,050Credit card, debit card and merchant fees
    
    
    9,111
    
    
    
    8,846
    
    
    
    17,459
    
    
    
    16,822Service charges
    
    
    15,642
    
    
    
    17,093
    
    
    
    29,727
    
    
    
    32,932Trust income
    
    
    2,040
    
    
    
    2,261
    
    
    
    4,249
    
    
    
    4,495Security gains, net
    
    
    42
    
    
    
    199
    
    
    
    47
    
    
    
    277Insurance commissions
    
    
    20,575
    
    
    
    21,462
    
    
    
    43,220
    
    
    
    46,130Other
    
    
    18,370
    
    
    
    13,898
    
    
    
    29,719
    
    
    
    27,791Total noninterest revenue
    
    
    79,739
    
    
    
    73,266
    
    
    
    146,032
    
    
    
    139,497NONINTEREST EXPENSE:Salaries and employee benefits
    
    
    70,092
    
    
    
    68,121
    
    
    
    141,455
    
    
    
    138,296Occupancy, net of rental income
    
    
    10,492
    
    
    
    9,716
    
    
    
    20,491
    
    
    
    19,199Equipment
    
    
    5,855
    
    
    
    6,245
    
    
    
    12,077
    
    
    
    12,678Deposit insurance assessments
    
    
    9,357
    
    
    
    399
    
    
    
    12,483
    
    
    
    691Other
    
    
    27,471
    
    
    
    27,583
    
    
    
    55,214
    
    
    
    54,670Total noninterest expense
    
    
    123,267
    
    
    
    112,064
    
    
    
    241,720
    
    
    
    225,534Income before income taxes
    
    
    49,818
    
    
    
    59,808
    
    
    
    92,589
    
    
    
    111,828Income tax expense
    
    
    15,951
    
    
    
    19,683
    
    
    
    29,245
    
    
    
    36,558Net income
    
    $
    33,867
    
    
    $
    40,125
    
    
    $
    63,344
    
    
    $
    75,270Earnings per share: Basic
    
    $
    0.41
    
    
    $
    0.49
    
    
    $
    0.76
    
    
    $
    0.91Diluted
    
    $
    0.41
    
    
    $
    0.49
    
    
    $
    0.76
    
    
    $
    0.91Dividends declared per common share
    
    $
    0.22
    
    
    $
    0.22
    
    
    $
    0.44
    
    
    $
    0.43
  4




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##### Table of Contents



Six months endedJune 30,2009
    
    
    2008(In thousands)Operating Activities:Net income
    
    $
    63,344
    
    
    $
    75,270Adjustment to reconcile net income to net
cash provided by operating activities:Provision for credit losses
    
    
    32,539
    
    
    
    22,048Depreciation and amortization
    
    
    15,539
    
    
    
    14,360Deferred taxes
    
    
    (477
    )
    
    
    (1,016
    )Amortization of intangibles
    
    
    2,623
    
    
    
    3,003Amortization of debt securities premium and discount, net
    
    
    2,828
    
    
    
    1,382Share-based compensation expense
    
    
    1,298
    
    
    
    1,381Security gains, net
    
    
    (47
    )
    
    
    (277
    )Net deferred loan origination expense
    
    
    (4,934
    )
    
    
    (4,731
    )Excess tax benefit from exercise of stock options
    
    
    (394
    )
    
    
    (165
    )Decrease in interest receivable
    
    
    7,834
    
    
    
    12,288Increase (decrease) in interest payable
    
    
    3,329
    
    
    
    (8,612
    )Realized gain on student loans sold
    
    
    (3,681
    )
    
    
    (17
    )Proceeds from student loans sold
    
    
    155,859
    
    
    
    1,483Origination of student loans held for sale
    
    
    (33,407
    )
    
    
    (43,101
    )Realized gain on mortgages sold
    
    
    (14,424
    )
    
    
    (5,696
    )Proceeds from mortgages sold
    
    
    928,287
    
    
    
    548,696Origination of mortgages held for sale
    
    
    (931,859
    )
    
    
    (546,194
    )Increase in bank-owned life insurance
    
    
    (3,550
    )
    
    
    (3,432
    )(Increase) decrease in prepaid pension asset
    
    
    (37,719
    )
    
    
    668Other, net
    
    
    (7,024
    )
    
    
    (3,695
    )Net cash provided by operating activities
    
    
    175,964
    
    
    
    63,643Investing activities:Proceeds from calls and maturities of held-to-maturity securities
    
    
    155,652
    
    
    
    186,681Proceeds from calls and maturties of available-for-sale securities
    
    
    72,598
    
    
    
    249,015Purchases of held-to-maturity securities
    
    
    (27,220
    )
    
    
    (8,860
    )Purchases of available-for-sale securities
    
    
    (60,732
    )
    
    
    (274,541
    )Net increase in loans and leases
    
    
    (96,834
    )
    
    
    (314,881
    )Purchases of premises and equipment
    
    
    (14,258
    )
    
    
    (31,797
    )Proceeds from sale of premises and equipment
    
    
    2,600
    
    
    
    490Acquisition of businesses, net of cash acquired
    
    
    (1,130
    )
    
    
    (10,152
    )Other, net
    
    
    (39
    )
    
    
    (440
    )Net cash provided by (used in) investing activities
    
    
    30,637
    
    
    
    (204,485
    )Financing activities:Net increase (decrease) in deposits
    
    
    445,675
    
    
    
    (257,546
    )Net (decrease) increase in short-term debt and other liabilities
    
    
    (659,914
    )
    
    
    219,602Advances of long-term debt
    
    
    
    
    
    
    200,000Repayment of long-term debt
    
    
    (20
    )
    
    
    (77
    )Issuance of common stock
    
    
    4,454
    
    
    
    1,386Purchase of common stock
    
    
    
    
    
    
    (326
    )Excess tax benefit from exercise of stock options
    
    
    394
    
    
    
    165Payment of cash dividends
    
    
    (36,624
    )
    
    
    (35,429
    )Net cash (used in) provided by financing activities
    
    
    (246,035
    )
    
    
    127,775Decrease in cash and cash equivalents
    
    
    (39,434
    )
    
    
    (13,067
    )Cash and cash equivalents at beginning of period
    
    
    304,597
    
    
    
    335,636Cash and cash equivalents at end of period
    
    $
    265,163
    
    
    $
    322,569
  5




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##### Table of Contents



BANCORPSOUTH, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 NOTE 1  BASIS OF FINANCIAL STATEMENT PRESENTATION AND PRINCIPLES OF CONSOLIDATION
   NOTE 2  LOANS AND LEASES
  June 30,
    
    
    December 31,2009
    
    
    2008
    
    
    2008(In thousands)Commercial and industrial
    
    $
    1,323,524
    
    
    $
    1,302,595
    
    
    $
    1,288,227Real estateConsumer mortgages
    
    
    2,054,666
    
    
    
    2,102,414
    
    
    
    2,096,568Home equity
    
    
    532,337
    
    
    
    470,503
    
    
    
    511,480Agricultural
    
    
    242,034
    
    
    
    255,262
    
    
    
    234,024Commercial and
industrial-owner
occupied
    
    
    1,394,852
    
    
    
    1,444,014
    
    
    
    1,465,027Construction,
acquisition and
development
    
    
    1,652,052
    
    
    
    1,578,628
    
    
    
    1,689,719Commercial
    
    
    1,719,044
    
    
    
    1,479,867
    
    
    
    1,568,956Credit cards
    
    
    101,844
    
    
    
    90,193
    
    
    
    93,650All other
    
    
    786,382
    
    
    
    806,502
    
    
    
    793,216Total
    
    $
    9,806,735
    
    
    $
    9,529,978
    
    
    $
    9,740,867
  June 30,
    
    
    December 31,2009
    
    
    2008
    
    
    2008(In thousands)Non-accrual loans and leases
    
    $
    45,542
    
    
    $
    17,710
    
    
    $
    28,168Loans and leases 90 days or more past due,
still accruing
    
    
    43,866
    
    
    
    25,719
    
    
    
    33,373Restructured loans and leases still accruing
    
    
    8,264
    
    
    
    2,620
    
    
    
    2,472Total non-performing loans
    
    $
    97,672
    
    
    $
    46,049
    
    
    $
    64,013
 6




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NOTE 3  ALLOWANCE FOR CREDIT LOSSES
  Six months ended
    
    
    Year endedJune 30,
    
    
    December 31,2009
    
    
    2008
    
    
    2008(In thousands)Balance at beginning of period
    
    $
    132,793
    
    
    $
    115,197
    
    
    $
    115,197Provision charged to expense
    
    
    32,539
    
    
    
    22,048
    
    
    
    56,176Recoveries
    
    
    2,032
    
    
    
    2,169
    
    
    
    3,913Loans and leases charged off
    
    
    (28,617
    )
    
    
    (15,936
    )
    
    
    (42,067
    )Acquisitions
    
    
    
    
    
    
    
    
    
    
    (426
    )Balance at end of period
    
    $
    138,747
    
    
    $
    123,478
    
    
    $
    132,793
 NOTE 4  SECURITIES
  June 30, 2009Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    Value(In thousands)U.S. Government agencies
    
    $
    938,118
    
    
    $
    47,067
    
    
    $
    
    
    
    $
    985,185Obligations of states
and political
subdivisions
    
    
    266,500
    
    
    
    4,578
    
    
    
    2,193
    
    
    
    268,885Total
    
    $
    1,204,618
    
    
    $
    51,645
    
    
    $
    2,193
    
    
    $
    1,254,070
 December 31, 2008Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    Value(In thousands)U.S. Government agencies
    
    $
    1,079,431
    
    
    $
    59,252
    
    
    $
    
    
    
    $
    1,138,683Obligations of states
and political
subdivisions
    
    
    254,090
    
    
    
    3,426
    
    
    
    3,994
    
    
    
    253,522Total
    
    $
    1,333,521
    
    
    $
    62,678
    
    
    $
    3,994
    
    
    $
    1,392,205
   7




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##### Table of Contents



June 30, 2009EstimatedAmortized
    
    
    FairCost
    
    
    Value(In thousands)Maturing in one year or less
    
    $
    419,255
    
    
    $
    427,643Maturing after one year through five years
    
    
    542,376
    
    
    
    578,506Maturing after five years through ten years
    
    
    94,554
    
    
    
    97,918Maturing after ten years
    
    
    148,433
    
    
    
    150,003Total
    
    $
    1,204,618
    
    
    $
    1,254,070
  June 30, 2009Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    Value(In thousands)U.S. Government agencies
    
    $
    495,327
    
    
    $
    17,675
    
    
    $
    4,383
    
    
    $
    508,619Government agency issued residential
mortgage-backed securities
    
    
    325,301
    
    
    
    4,857
    
    
    
    183
    
    
    
    329,975Government agency issued commercial
mortgage-backed securities
    
    
    18,384
    
    
    
    231
    
    
    
    159
    
    
    
    18,456Obligations of states and political subdivisions
    
    
    74,666
    
    
    
    986
    
    
    
    343
    
    
    
    75,309Collateralized debt obligations
    
    
    2,375
    
    
    
    
    
    
    
    
    
    
    
    2,375Other
    
    
    34,019
    
    
    
    459
    
    
    
    5
    
    
    
    34,473Total
    
    $
    950,072
    
    
    $
    24,208
    
    
    $
    5,073
    
    
    $
    969,207
 December 31, 2008Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    Value(In thousands)U.S. Government agencies
    
    $
    496,665
    
    
    $
    19,616
    
    
    $
    
    
    
    $
    516,281Government agency issued residential
mortgage-backed securities
    
    
    319,996
    
    
    
    1,933
    
    
    
    2,754
    
    
    
    319,175Government agency issued commercial
mortgage-backed securities
    
    
    18,534
    
    
    
    296
    
    
    
    277
    
    
    
    18,553Obligations of states and political subdivisions
    
    
    83,102
    
    
    
    714
    
    
    
    1,277
    
    
    
    82,539Collateralized debt obligations
    
    
    2,375
    
    
    
    
    
    
    
    
    
    
    
    2,375Other
    
    
    43,538
    
    
    
    407
    
    
    
    9
    
    
    
    43,936Total
    
    $
    964,210
    
    
    $
    22,966
    
    
    $
    4,317
    
    
    $
    982,859
   8




---



##### Table of Contents



June 30, 2009EstimatedAmortized
    
    
    FairCost
    
    
    Value(In thousands)Maturing in one year or less
    
    $
    45,413
    
    
    $
    46,170Maturing after one year through five years
    
    
    439,541
    
    
    
    458,752Maturing after five years through ten years
    
    
    264,778
    
    
    
    262,080Maturing after ten years
    
    
    200,340
    
    
    
    202,205Total
    
    $
    950,072
    
    
    $
    969,207
  Continuous Unrealized Loss PositionLess Than 12 Months
    
    
    12 Months or Longer
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedValue
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    Losses(In thousands)Held-to-maturity securities:U.S. Treasury
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    U.S. government agencies
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Obligations of states and
political subdivisions
    
    
    27,429
    
    
    
    938
    
    
    
    25,883
    
    
    
    1,255
    
    
    
    53,312
    
    
    
    2,193Total
    
    $
    27,429
    
    
    $
    938
    
    
    $
    25,883
    
    
    $
    1,255
    
    
    $
    53,312
    
    
    $
    2,193Available-for-sale securities:U.S. Government agencies
    
    $
    204,762
    
    
    $
    4,383
    
    
    $
    29,343
    
    
    $
    43
    
    
    $
    234,105
    
    
    $
    4,426Government agency issued
residential
mortgage-backed securities
    
    
    12,065
    
    
    
    140
    
    
    
    
    
    
    
    
    
    
    
    12,065
    
    
    
    140Government agency issued
commercial
mortgage-backed securities
    
    
    11,061
    
    
    
    159
    
    
    
    
    
    
    
    
    
    
    
    11,061
    
    
    
    159Obligations of states and
political subdivisions
    
    
    5,305
    
    
    
    86
    
    
    
    1,990
    
    
    
    257
    
    
    
    7,295
    
    
    
    343Collateralized debt obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    13
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    13
    
    
    
    5Total
    
    $
    233,206
    
    
    $
    4,773
    
    
    $
    31,333
    
    
    $
    300
    
    
    $
    264,539
    
    
    $
    5,073
  NOTE 5  PER SHARE DATA
   9




---



##### Table of Contents



Three months ended June 30,2009
    
    
    2008Income
    
    
    Shares
    
    
    Per Share
    
    
    Income
    
    
    Shares
    
    
    Per Share(Numerator)
    
    
    (Denominator)
    
    
    Amount
    
    
    (Numerator)
    
    
    (Denominator)
    
    
    Amount(In thousands, except per share amounts)Basic EPSIncome available to
common shareholders
    
    $
    33,867
    
    
    
    83,307
    
    
    $
    0.41
    
    
    $
    40,125
    
    
    
    82,369
    
    
    $
    0.49Effect of dilutive share-based awards
    
    
    
    
    
    
    154
    
    
    
    
    
    
    
    
    
    
    
    197Diluted EPSIncome available to common
shareholders plus assumed
exercise of all outstanding
share-based awards
    
    $
    33,867
    
    
    
    83,461
    
    
    $
    0.41
    
    
    $
    40,125
    
    
    
    82,566
    
    
    $
    0.49
 Six months ended June 30,2009
    
    
    2008Income
    
    
    Shares
    
    
    Per Share
    
    
    Income
    
    
    Shares
    
    
    Per Share(Numerator)
    
    
    (Denominator)
    
    
    Amount
    
    
    (Numerator)
    
    
    (Denominator)
    
    
    Amount(In thousands, except per share amounts)Basic EPSIncome available to
common shareholders
    
    $
    63,344
    
    
    
    83,207
    
    
    $
    0.76
    
    
    $
    75,270
    
    
    
    82,350
    
    
    $
    0.91Effect of dilutive share-based awards
    
    
    
    
    
    
    135
    
    
    
    
    
    
    
    
    
    
    
    200Diluted EPSIncome available to common
shareholders plus assumed
exercise of all outstanding
share-based awards
    
    $
    63,344
    
    
    
    83,342
    
    
    $
    0.76
    
    
    $
    75,270
    
    
    
    82,550
    
    
    $
    0.91
 10




---



##### Table of Contents



NOTE 6  COMPREHENSIVE INCOME
  Three months ended June 30,2009
    
    
    2008Before
    
    
    Tax
    
    
    Net
    
    
    Before
    
    
    Tax
    
    
    Nettax
    
    
    (expense)
    
    
    of tax
    
    
    tax
    
    
    (expense)
    
    
    of taxamount
    
    
    benefit
    
    
    amount
    
    
    amount
    
    
    benefit
    
    
    amount(In thousands)Net unrealized gains on available-for-sale securities:Unrealized losses arising during
holding period
    
    $
    (3,575
    )
    
    $
    1,364
    
    
    $
    (2,211
    )
    
    $
    (16,684
    )
    
    $
    6,452
    
    
    $
    (10,232
    )Less: Reclassification adjustment for
net gains realized in net income
    
    
    (42
    )
    
    
    16
    
    
    
    (26
    )
    
    
    (199
    )
    
    
    76
    
    
    
    (123
    )Recognized employee benefit plan
net periodic benefit cost
    
    
    1,125
    
    
    
    (430
    )
    
    
    695
    
    
    
    146
    
    
    
    (55
    )
    
    
    91Other comprehensive loss
    
    $
    (2,492
    )
    
    $
    950
    
    
    $
    (1,542
    )
    
    $
    (16,737
    )
    
    $
    6,473
    
    
    $
    (10,264
    )Net income
    
    
    
    
    
    
    
    
    
    
    33,867
    
    
    
    
    
    
    
    
    
    
    
    40,125Comprehensive income
    
    
    
    
    
    
    
    
    
    $
    32,325
    
    
    
    
    
    
    
    
    
    
    $
    29,861Six months ended June 30,2009
    
    
    2008Before
    
    
    Tax
    
    
    Net
    
    
    Before
    
    
    Tax
    
    
    Nettax
    
    
    (expense)
    
    
    of tax
    
    
    tax
    
    
    (expense)
    
    
    of taxamount
    
    
    benefit
    
    
    amount
    
    
    amount
    
    
    benefit
    
    
    amount(In thousands)Net unrealized gains on available-for-sale securities:Unrealized gains (losses) arising
during holding period
    
    $
    533
    
    
    $
    (212
    )
    
    $
    321
    
    
    $
    (3,508
    )
    
    $
    1,481
    
    
    $
    (2,027
    )Less: Reclassification adjustment for
net gains realized in net income
    
    
    (47
    )
    
    
    18
    
    
    
    (29
    )
    
    
    (277
    )
    
    
    106
    
    
    
    (171
    )Recognized employee benefit plan
net periodic benefit cost
    
    
    2,335
    
    
    
    (893
    )
    
    
    1,442
    
    
    
    291
    
    
    
    (111
    )
    
    
    180Other comprehensive income (loss)
    
    $
    2,821
    
    
    $
    (1,087
    )
    
    $
    1,734
    
    
    $
    (3,494
    )
    
    $
    1,476
    
    
    $
    (2,018
    )Net income
    
    
    
    
    
    
    
    
    
    
    63,344
    
    
    
    
    
    
    
    
    
    
    
    75,270Comprehensive income
    
    
    
    
    
    
    
    
    
    $
    65,078
    
    
    
    
    
    
    
    
    
    
    $
    73,252
 NOTE 7  GOODWILL AND OTHER INTANGIBLE ASSETS
  Community
    
    
    InsuranceBanking
    
    
    Agencies
    
    
    Total(In thousands)Balance as of December 31, 2008
    
    $
    217,618
    
    
    $
    51,348
    
    
    $
    268,966Goodwill recorded during the period
    
    
    
    
    
    
    1,131
    
    
    
    1,131Balance as of June 30, 2009
    
    $
    217,618
    
    
    $
    52,479
    
    
    $
    270,097
  11




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##### Table of Contents



As of
    
    
    As ofJune 30, 2009
    
    
    December 31, 2008Gross Carrying
    
    
    Accumulated
    
    
    Gross Carrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    Amount
    
    
    Amortization(In thousands)Amortized intangible assets:Core deposit intangibles
    
    $
    27,801
    
    
    $
    17,571
    
    
    $
    27,801
    
    
    $
    16,607Customer relationship intangibles
    
    
    32,186
    
    
    
    17,603
    
    
    
    32,186
    
    
    
    16,064Non-solicitation intangibles
    
    
    600
    
    
    
    560
    
    
    
    600
    
    
    
    440Total
    
    $
    60,587
    
    
    $
    35,734
    
    
    $
    60,587
    
    
    $
    33,111Unamortized intangible assets:Trade names
    
    $
    688
    
    
    $
    
    
    
    $
    688
    
    
    $
    Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands)
    
    
    (In thousands)Aggregate amortization expense for:Core deposit intangibles
    
    $
    447
    
    
    $
    531
    
    
    $
    964
    
    
    $
    1,097Customer relationship intangibles
    
    
    756
    
    
    
    883
    
    
    
    1,539
    
    
    
    1,786Non-solicitation intangibles
    
    
    60
    
    
    
    60
    
    
    
    120
    
    
    
    120Total
    
    $
    1,263
    
    
    $
    1,474
    
    
    $
    2,623
    
    
    $
    3,003
  Customer
    
    Non-Core Deposit
    
    Relationship
    
    SolicitationIntangibles
    
    Intangibles
    
    Intangibles
    
    Total(In thousands)Estimated Amortization Expense:For year ended December 31, 2009
    
    $
    1,800
    
    
    $
    2,996
    
    
    $
    160
    
    
    $
    4,956For year ended December 31, 2010
    
    
    1,308
    
    
    
    2,551
    
    
    
    
    
    
    
    3,859For year ended December 31, 2011
    
    
    1,016
    
    
    
    2,178
    
    
    
    
    
    
    
    3,194For year ended December 31, 2012
    
    
    946
    
    
    
    1,863
    
    
    
    
    
    
    
    2,809For year ended December 31, 2013
    
    
    582
    
    
    
    1,595
    
    
    
    
    
    
    
    2,177
 NOTE 8  PENSION BENEFITS
  Pension BenefitsThree months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands)Service cost
    
    $
    1,746
    
    
    $
    1,667
    
    
    $
    3,563
    
    
    $
    3,334Interest cost
    
    
    1,683
    
    
    
    1,654
    
    
    
    3,509
    
    
    
    3,308Expected return on assets
    
    
    (2,551
    )
    
    
    (2,646
    )
    
    
    (5,348
    )
    
    
    (5,292
    )Amortization of unrecognized
transition amount
    
    
    3
    
    
    
    5
    
    
    
    8
    
    
    
    10Recognized prior service cost
    
    
    96
    
    
    
    67
    
    
    
    171
    
    
    
    134Recognized net loss
    
    
    1,026
    
    
    
    73
    
    
    
    2,156
    
    
    
    146Net periodic benefit costs
    
    $
    2,003
    
    
    $
    820
    
    
    $
    4,059
    
    
    $
    1,640
 12




---



##### Table of Contents



NOTE 9  RECENT PRONOUNCEMENTS
      13




---



##### Table of Contents



NOTE 10  SEGMENT REPORTING
  14




---



##### Table of Contents



GeneralCommunity
    
    
    Insurance
    
    
    CorporateBanking
    
    
    Agencies
    
    
    and Other
    
    
    Total(In thousands)Three months ended June 30, 2009:Results of OperationsNet interest revenue
    
    $
    102,697
    
    
    $
    135
    
    
    $
    8,108
    
    
    $
    110,940Provision for credit losses
    
    
    14,976
    
    
    
    
    
    
    
    2,618
    
    
    
    17,594Net interest revenue after provision for credit losses
    
    
    87,721
    
    
    
    135
    
    
    
    5,490
    
    
    
    93,346Noninterest revenue
    
    
    36,064
    
    
    
    20,437
    
    
    
    23,238
    
    
    
    79,739Noninterest expense
    
    
    81,681
    
    
    
    17,457
    
    
    
    24,129
    
    
    
    123,267Income before income taxes
    
    
    42,104
    
    
    
    3,115
    
    
    
    4,599
    
    
    
    49,818Income taxes
    
    
    13,481
    
    
    
    1,223
    
    
    
    1,247
    
    
    
    15,951Net income
    
    $
    28,623
    
    
    $
    1,892
    
    
    $
    3,352
    
    
    $
    33,867Selected Financial InformationTotal assets (at end of period)
    
    $
    10,970,135
    
    
    $
    162,501
    
    
    $
    2,165,183
    
    
    $
    13,297,819Depreciation and amortization
    
    
    7,380
    
    
    
    1,170
    
    
    
    568
    
    
    
    9,118Three months ended June 30, 2008:Results of OperationsNet interest revenue
    
    $
    101,032
    
    
    $
    338
    
    
    $
    8,473
    
    
    $
    109,843Provision for credit losses
    
    
    9,618
    
    
    
    
    
    
    
    1,619
    
    
    
    11,237Net interest revenue after provision for credit losses
    
    
    91,414
    
    
    
    338
    
    
    
    6,854
    
    
    
    98,606Noninterest revenue
    
    
    30,259
    
    
    
    21,486
    
    
    
    21,521
    
    
    
    73,266Noninterest expense
    
    
    70,865
    
    
    
    17,577
    
    
    
    23,622
    
    
    
    112,064Income before income taxes
    
    
    50,808
    
    
    
    4,247
    
    
    
    4,753
    
    
    
    59,808Income taxes
    
    
    16,721
    
    
    
    1,661
    
    
    
    1,301
    
    
    
    19,683Net income
    
    $
    34,087
    
    
    $
    2,586
    
    
    $
    3,452
    
    
    $
    40,125Selected Financial InformationTotal assets (at end of period)
    
    $
    11,078,459
    
    
    $
    152,581
    
    
    $
    2,168,111
    
    
    $
    13,399,151Depreciation and amortization
    
    
    6,876
    
    
    
    1,191
    
    
    
    670
    
    
    
    8,737
 15




---



##### Table of Contents



GeneralCommunity
    
    
    Insurance
    
    
    CorporateBanking
    
    
    Agencies
    
    
    and Other
    
    
    Total(In thousands)Six months ended June 30, 2009:Results of OperationsNet interest revenue
    
    $
    203,943
    
    
    $
    324
    
    
    $
    16,549
    
    
    $
    220,816Provision for credit losses
    
    
    28,699
    
    
    
    
    
    
    
    3,840
    
    
    
    32,539Net interest revenue after provision for credit losses
    
    
    175,244
    
    
    
    324
    
    
    
    12,709
    
    
    
    188,277Noninterest revenue
    
    
    64,577
    
    
    
    43,050
    
    
    
    38,405
    
    
    
    146,032Noninterest expense
    
    
    158,097
    
    
    
    35,045
    
    
    
    48,578
    
    
    
    241,720Income before income taxes
    
    
    81,724
    
    
    
    8,329
    
    
    
    2,536
    
    
    
    92,589Income taxes
    
    
    25,813
    
    
    
    3,292
    
    
    
    140
    
    
    
    29,245Net income
    
    $
    55,911
    
    
    $
    5,037
    
    
    $
    2,396
    
    
    $
    63,344Selected Financial InformationTotal assets (at end of period)
    
    $
    10,970,135
    
    
    $
    162,501
    
    
    $
    2,165,183
    
    
    $
    13,297,819Depreciation and amortization
    
    
    14,678
    
    
    
    2,348
    
    
    
    1,136
    
    
    
    18,162Six months ended June 30, 2008:Results of OperationsNet interest revenue
    
    $
    201,404
    
    
    $
    766
    
    
    $
    17,743
    
    
    $
    219,913Provision for credit losses
    
    
    19,139
    
    
    
    
    
    
    
    2,909
    
    
    
    22,048Net interest revenue after provision for credit losses
    
    
    182,265
    
    
    
    766
    
    
    
    14,834
    
    
    
    197,865Noninterest revenue
    
    
    58,919
    
    
    
    46,038
    
    
    
    34,540
    
    
    
    139,497Noninterest expense
    
    
    139,741
    
    
    
    35,868
    
    
    
    49,925
    
    
    
    225,534Income before income taxes
    
    
    101,443
    
    
    
    10,936
    
    
    
    (551
    )
    
    
    111,828Income taxes
    
    
    33,163
    
    
    
    4,293
    
    
    
    (898
    )
    
    
    36,558Net income
    
    $
    68,280
    
    
    $
    6,643
    
    
    $
    347
    
    
    $
    75,270Selected Financial InformationTotal assets (at end of period)
    
    $
    11,078,459
    
    
    $
    152,581
    
    
    $
    2,168,111
    
    
    $
    13,399,151Depreciation and amortization
    
    
    11,243
    
    
    
    2,389
    
    
    
    3,731
    
    
    
    17,363
 NOTE 11  MORTGAGE SERVICING RIGHTS
   16




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##### Table of Contents



2009
    
    
    2008(In thousands)Fair value as of January 1
    
    $
    24,972
    
    
    $
    32,482Additions:Origination of servicing assets
    
    
    9,066
    
    
    
    1,818Changes in fair value:Due to change in valuation inputs or assumptions
used in the valuation model
    
    
    (506
    )
    
    
    (3,387
    )Other changes in fair value
    
    
    (8
    )
    
    
    (4
    )Fair value as of June 30
    
    $
    33,524
    
    
    $
    30,909
  NOTE 12  DERIVATIVE INSTRUMENTS
   NOTE 13  FAIR VALUE DISCLOSURES
  17




---



##### Table of Contents



Determination of Fair Value
  Available-for-sale securities.
 Mortgage servicing rights.
 Derivative instruments.
 Loans held for sale.
 Impaired loans.
 18




---



##### Table of Contents



Assets and Liabilities Recorded at Fair Value on a Recurring Basis
  Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    Total(In thousands)Assets:Available-for-sale securities:U.S. Government agencies
    
    $
    
    
    
    $
    508,619
    
    
    $
    
    
    
    $
    508,619Government agency issued residential
mortgage-backed securities
    
    
    
    
    
    
    329,975
    
    
    
    
    
    
    
    329,975Government agency issued commercial
mortgage-backed securities
    
    
    
    
    
    
    18,456
    
    
    
    
    
    
    
    18,456Obligations of states and
political subdivisions
    
    
    
    
    
    
    75,309
    
    
    
    
    
    
    
    75,309Collateralized debt obligations
    
    
    
    
    
    
    
    
    
    
    2,375
    
    
    
    2,375Other
    
    
    407
    
    
    
    34,066
    
    
    
    
    
    
    
    34,473Mortgage servicing rights
    
    
    
    
    
    
    
    
    
    
    33,524
    
    
    
    33,524Derivative instruments
    
    
    
    
    
    
    25,229
    
    
    
    1,669
    
    
    
    26,898Total
    
    $
    407
    
    
    $
    991,654
    
    
    $
    37,568
    
    
    $
    1,029,629Liabilities:Derivative instruments
    
    $
    
    
    
    $
    25,229
    
    
    $
    1,266
    
    
    $
    26,495
  Mortgage
    
    
    
    
    
    
    Available-Servicing
    
    
    Derivative
    
    
    for-saleRights
    
    
    Instruments
    
    
    Securities(In thousands)Balance at December 31, 2008
    
    $
    24,972
    
    
    $
    (683
    )
    
    $
    2,375Total net gains for the year to date included in:Net income
    
    
    8,552
    
    
    
    1,086
    
    
    
    Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    Purchases, sales, issuances and settlements, net
    
    
    
    
    
    
    
    
    
    
    Transfers in and/or out of Level 3
    
    
    
    
    
    
    
    
    
    
    Balance at June 30, 2009
    
    $
    33,524
    
    
    $
    403
    
    
    $
    2,375Net unrealized gains (losses) included in net income for the
quarter relating to assets and liabilities held at June 30, 2009
    
    $
    (506
    )
    
    $
    403
    
    
    $
    
 Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis
  TotalLevel 1
    
    Level 2
    
    Level 3
    
    Total
    
    Gains (Losses)(In thousands)Assets:Loans held for sale
    
    $
    
    
    
    $
    94,736
    
    
    $
    
    
    
    $
    94,736
    
    
    $
    Impaired loans
    
    
    
    
    
    
    
    
    
    
    32,204
    
    
    
    32,204
    
    
    
    (3,968
    )
 19




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NOTE 14  FAIR VALUE OF FINANCIAL INSTRUMENTS
  Securities.
 Loans and Leases.
  Loans Held for Sale.
 Deposit Liabilities
 Debt
 Derivative Instruments.
 Lending Commitments.
  20




---



##### Table of Contents



June 30, 2009
    
    December 31, 2008Carrying
    
    Fair
    
    Carrying
    
    FairValue
    
    Value
    
    Value
    
    Value(In thousands)Assets:Cash and due from banks
    
    $
    236,327
    
    
    $
    236,327
    
    
    $
    291,055
    
    
    $
    291,055Interest bearing deposits with other
banks
    
    
    28,836
    
    
    
    28,836
    
    
    
    13,542
    
    
    
    13,542Held-to-maturity securities
    
    
    1,204,618
    
    
    
    1,254,070
    
    
    
    1,333,521
    
    
    
    1,392,205Available-for-sale securities
    
    
    969,207
    
    
    
    969,207
    
    
    
    982,859
    
    
    
    982,859Net loans and leases
    
    
    9,622,653
    
    
    
    9,698,414
    
    
    
    9,558,484
    
    
    
    9,634,721Loans held for sale
    
    
    94,736
    
    
    
    94,770
    
    
    
    189,242
    
    
    
    197,310Liabilities:Noninterest bearing deposits
    
    
    1,773,418
    
    
    
    1,773,418
    
    
    
    1,735,130
    
    
    
    1,735,130Savings and interest bearing deposits
    
    
    4,678,310
    
    
    
    4,678,310
    
    
    
    4,582,633
    
    
    
    4,582,633Other time deposits
    
    
    3,705,819
    
    
    
    3,710,731
    
    
    
    3,394,109
    
    
    
    3,426,475Federal funds purchased and securities
sold under agreement to repurchase
and other short-term borrowings
    
    
    1,230,609
    
    
    
    1,228,335
    
    
    
    1,896,876
    
    
    
    1,893,630Long-term debt and other borrowings
    
    
    446,709
    
    
    
    459,004
    
    
    
    446,745
    
    
    
    460,449Derivative instruments:Forward commitments to sell fixed rate
mortgage loans
    
    
    (515
    )
    
    
    (515
    )
    
    
    (1,944
    )
    
    
    (1,944
    )Commitments to fund fixed rate
mortgage loans
    
    
    918
    
    
    
    918
    
    
    
    1,261
    
    
    
    1,261Interest rate swap position to receive
    
    
    25,229
    
    
    
    25,229
    
    
    
    42,558
    
    
    
    42,558Interest rate swap position to pay
    
    
    (25,229
    )
    
    
    (25,229
    )
    
    
    (42,558
    )
    
    
    (42,558
    )
 
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
 OVERVIEW
    21




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##### Table of Contents



Three months endedJune 30,2009
    
    
    2008
    
    
    % Change(Dollars in thousands, except per share amounts)Net income
    
    $
    33,867
    
    
    $
    40,125
    
    
    
    (15.60
    )%Net income per share: Basic
    
    $
    0.41
    
    
    $
    0.49
    
    
    
    (16.33
    )Diluted
    
    $
    0.41
    
    
    $
    0.49
    
    
    
    (16.33
    )Return on average assets (annualized)
    
    
    1.02
    %
    
    
    1.23
    %
    
    
    (17.07
    )Return on average shareholders equity
(annualized)
    
    
    10.86
    %
    
    
    13.16
    %
    
    
    (17.48
    )
 Six months endedJune 30,2009
    
    
    2008
    
    
    % Change(Dollars in thousands, except per share amounts)Net income
    
    $
    63,344
    
    
    $
    75,270
    
    
    
    (15.84
    )%Net income per share: Basic
    
    $
    0.76
    
    
    $
    0.91
    
    
    
    (16.48
    )Diluted
    
    $
    0.76
    
    
    $
    0.91
    
    
    
    (16.48
    )Return on average assets (annualized)
    
    
    0.96
    %
    
    
    1.15
    %
    
    
    (16.52
    )Return on average shareholders equity
(annualized)
    
    
    10.26
    %
    
    
    12.48
    %
    
    
    (17.79
    )
  22




---



##### Table of Contents



RESULTS OF OPERATIONS
 Net Interest Revenue
  23




---



##### Table of Contents



24




---



##### Table of Contents



Interest Rate Sensitivity
  Interest Rate Sensitivity  Maturing or Repricing Opportunities91 Days
    
    
    Over One0 to 90
    
    
    to
    
    
    Year to
    
    
    OverDays
    
    
    One Year
    
    
    Five Years
    
    
    Five Years(In thousands)Interest earning assets:Interest bearing deposits with banks
    
    $
    28,836
    
    
    $
    
    
    
    $
    
    
    
    $
    Held-to-maturity securities
    
    
    64,881
    
    
    
    366,126
    
    
    
    579,629
    
    
    
    193,982Available-for-sale and trading securities
    
    
    55,118
    
    
    
    20,843
    
    
    
    445,506
    
    
    
    447,740Loans and leases, net of unearned income
    
    
    5,056,181
    
    
    
    1,616,381
    
    
    
    2,875,848
    
    
    
    212,990Loans held for sale
    
    
    60,270
    
    
    
    431
    
    
    
    2,592
    
    
    
    31,443Total interest earning assets
    
    
    5,265,286
    
    
    
    2,003,781
    
    
    
    3,903,575
    
    
    
    886,155Interest bearing liabilities:Interest bearing demand deposits and savings
    
    
    4,678,310
    
    
    
    
    
    
    
    
    
    
    
    Other time deposits
    
    
    881,841
    
    
    
    1,828,652
    
    
    
    937,801
    
    
    
    57,525Federal funds purchased and securities
sold under agreement to repurchase,
short-term FHLB borrowings and other
short-term borrowings
    
    
    1,148,158
    
    
    
    2,960
    
    
    
    79,491
    
    
    
    Long-term FHLB borrowings and junior
subordinated debt securities
    
    
    
    
    
    
    202,000
    
    
    
    55,792
    
    
    
    188,812Other
    
    
    2
    
    
    
    13
    
    
    
    
    
    
    
    98Total interest bearing liabilities
    
    
    6,708,311
    
    
    
    2,033,625
    
    
    
    1,073,084
    
    
    
    246,435Interest rate sensitivity gap
    
    $
    (1,443,025
    )
    
    $
    (29,844
    )
    
    $
    2,830,491
    
    
    $
    639,720Cumulative interest sensitivity gap
    
    $
    (1,443,025
    )
    
    $
    (1,472,869
    )
    
    $
    1,357,622
    
    
    $
    1,997,342
 Provision for Credit Losses and Allowance for Credit Losses
  25




---



##### Table of Contents



Three months endedJune 30,2009
    
    2008
    
    % Change(Dollars in thousands)Provision for credit losses
    
    $
    17,594
    
    
    $
    11,237
    
    
    
    56.57
    %Net charge-offs
    
    $
    13,479
    
    
    $
    7,060
    
    
    
    90.92Net charge-offs as a percentage
of average loans and leases (annualized)
    
    
    0.55
    %
    
    
    0.30
    %
    
    
    83.33
 Six months endedJune 30,2009
    
    2008
    
    % Change(Dollars in thousands)Provision for credit losses
    
    $
    32,539
    
    
    $
    22,048
    
    
    
    47.58
    %Net charge-offs
    
    $
    26,585
    
    
    $
    13,767
    
    
    
    93.11Net charge-offs as a percentage
of average loans and leases (annualized)
    
    
    0.55
    %
    
    
    0.30
    %
    
    
    83.33Allowance for credit losses as a percentage
of loans and leases outstanding at period end
    
    
    1.42
    %
    
    
    1.30
    %
    
    
    9.23
  26




---



##### Table of Contents



June 30,
    
    
    December 31,2009
    
    
    2008
    
    
    2008Allowance
    
    
    % of
    
    
    Allowance
    
    
    % of
    
    
    Allowance
    
    
    % offor
    
    
    Total
    
    
    for
    
    
    Total
    
    
    for
    
    
    TotalCredit
    
    
    Loans
    
    
    Credit
    
    
    Loans
    
    
    Credit
    
    
    LoansLosses
    
    
    and Leases
    
    
    Losses
    
    
    and Leases
    
    
    Losses
    
    
    and Leases(Dollars in thousands)Commercial and industrial
    
    $
    16,948
    
    
    
    13.50
    %
    
    $
    17,609
    
    
    
    13.67
    %
    
    $
    16,210
    
    
    
    13.22
    %Real estateConsumer mortgages
    
    
    31,857
    
    
    
    20.95
    %
    
    
    29,994
    
    
    
    22.06
    %
    
    
    31,158
    
    
    
    21.52
    %Home equity
    
    
    6,388
    
    
    
    5.43
    %
    
    
    5,149
    
    
    
    4.94
    %
    
    
    5,689
    
    
    
    5.25
    %Agricultural
    
    
    3,880
    
    
    
    2.47
    %
    
    
    3,582
    
    
    
    2.68
    %
    
    
    3,167
    
    
    
    2.40
    %Commercial and
industrial-owner
occupied
    
    
    19,269
    
    
    
    14.22
    %
    
    
    18,022
    
    
    
    15.15
    %
    
    
    17,982
    
    
    
    15.04
    %Construction,
acquisition and
development
    
    
    27,121
    
    
    
    16.85
    %
    
    
    21,913
    
    
    
    16.56
    %
    
    
    29,771
    
    
    
    17.35
    %Commercial
    
    
    20,277
    
    
    
    17.53
    %
    
    
    17,163
    
    
    
    15.53
    %
    
    
    17,899
    
    
    
    16.11
    %Credit cards
    
    
    3,280
    
    
    
    1.04
    %
    
    
    1,086
    
    
    
    0.95
    %
    
    
    1,572
    
    
    
    0.96
    %All other
    
    
    9,727
    
    
    
    8.01
    %
    
    
    8,960
    
    
    
    8.46
    %
    
    
    9,345
    
    
    
    8.15
    %Total
    
    $
    138,747
    
    
    
    100.00
    %
    
    $
    123,478
    
    
    
    100.00
    %
    
    $
    132,793
    
    
    
    100.00
    %
  27




---



##### Table of Contents



Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands)Balance, beginning of period
    
    $
    134,632
    
    
    $
    119,301
    
    
    $
    132,793
    
    
    $
    115,197Loans and leases charged off:Commercial and industrial
    
    
    (754
    )
    
    
    (1,679
    )
    
    
    (1,494
    )
    
    
    (5,748
    )Real estateConsumer mortgages
    
    
    (4,877
    )
    
    
    (1,977
    )
    
    
    (8,950
    )
    
    
    (2,751
    )Home equity
    
    
    (1,106
    )
    
    
    (65
    )
    
    
    (2,259
    )
    
    
    (350
    )Agricultural
    
    
    (3
    )
    
    
    
    
    
    
    (40
    )
    
    
    (12
    )Commercial and industrial-owner occupied
    
    
    (649
    )
    
    
    (1,236
    )
    
    
    (1,485
    )
    
    
    (1,392
    )Construction, acquisition and development
    
    
    (4,335
    )
    
    
    (1,291
    )
    
    
    (8,712
    )
    
    
    (2,149
    )Commercial
    
    
    (321
    )
    
    
    
    
    
    
    (881
    )
    
    
    Credit cards
    
    
    (1,290
    )
    
    
    (990
    )
    
    
    (2,448
    )
    
    
    (1,846
    )All other
    
    
    (1,131
    )
    
    
    (984
    )
    
    
    (2,348
    )
    
    
    (1,688
    )Total loans charged off
    
    
    (14,466
    )
    
    
    (8,222
    )
    
    
    (28,617
    )
    
    
    (15,936
    )Recoveries:Commercial and industrial
    
    
    67
    
    
    
    530
    
    
    
    192
    
    
    
    714Real estateConsumer mortgages
    
    
    263
    
    
    
    217
    
    
    
    483
    
    
    
    281Home equity
    
    
    2
    
    
    
    3
    
    
    
    5
    
    
    
    5Agricultural
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    Commercial and industrial-owner occupied
    
    
    248
    
    
    
    13
    
    
    
    256
    
    
    
    18Construction, acquisition and development
    
    
    4
    
    
    
    14
    
    
    
    90
    
    
    
    102Commercial
    
    
    
    
    
    
    
    
    
    
    56
    
    
    
    Credit cards
    
    
    140
    
    
    
    45
    
    
    
    278
    
    
    
    128All other
    
    
    263
    
    
    
    340
    
    
    
    670
    
    
    
    921Total recoveries
    
    
    987
    
    
    
    1,162
    
    
    
    2,032
    
    
    
    2,169Net charge-offs
    
    
    (13,479
    )
    
    
    (7,060
    )
    
    
    (26,585
    )
    
    
    (13,767
    )Provision charged to operating expense
    
    
    17,594
    
    
    
    11,237
    
    
    
    32,539
    
    
    
    22,048Balance, end of period
    
    $
    138,747
    
    
    $
    123,478
    
    
    $
    138,747
    
    
    $
    123,478Average loans for period
    
    $
    9,740,916
    
    
    $
    9,369,676
    
    
    $
    9,718,321
    
    
    $
    9,291,485Ratios:Net charge-offs to average loans (annualized)
    
    
    0.55
    %
    
    
    0.30
    %
    
    
    0.55
    %
    
    
    0.30
    %Allowance for credit losses as a percentage of
loans and leases outstanding at period end
    
    
    1.42
    %
    
    
    1.30
    %
    
    
    1.42
    %
    
    
    1.30
    %Allowance for credit losses as a percentage of
non-performing loans and leases at period end
    
    
    142.05
    %
    
    
    268.14
    %
    
    
    142.05
    %
    
    
    268.14
    %
 28




---



##### Table of Contents



Noninterest Revenue
  Three months endedJune 30,2009
    
    
    2008
    
    
    % Change(Dollars in thousands)Mortgage lending
    
    $
    13,959
    
    
    $
    9,507
    
    
    
    46.83
    %Credit card, debit card
and merchant fees
    
    
    9,111
    
    
    
    8,846
    
    
    
    3.00Service charges
    
    
    15,642
    
    
    
    17,093
    
    
    
    (8.49
    )Trust income
    
    
    2,040
    
    
    
    2,261
    
    
    
    (9.77
    )Securities gains, net
    
    
    42
    
    
    
    199
    
    
    
    (78.89
    )Insurance commissions
    
    
    20,575
    
    
    
    21,462
    
    
    
    (4.13
    )Other
    
    
    18,370
    
    
    
    13,898
    
    
    
    32.18Total noninterest revenue
    
    $
    79,739
    
    
    $
    73,266
    
    
    
    8.83
    %
 Six months endedJune 30,2009
    
    
    2008
    
    
    % Change(Dollars in thousands)Mortgage lending
    
    $
    21,611
    
    
    $
    11,050
    
    
    
    95.57
    %Credit card, debit card
and merchant fees
    
    
    17,459
    
    
    
    16,822
    
    
    
    3.79Service charges
    
    
    29,727
    
    
    
    32,932
    
    
    
    (9.73
    )Trust income
    
    
    4,249
    
    
    
    4,495
    
    
    
    (5.47
    )Securities gains, net
    
    
    47
    
    
    
    277
    
    
    
    (83.03
    )Insurance commissions
    
    
    43,220
    
    
    
    46,130
    
    
    
    (6.31
    )Other
    
    
    29,719
    
    
    
    27,791
    
    
    
    6.94Total noninterest revenue
    
    $
    146,032
    
    
    $
    139,497
    
    
    
    4.68
    %
    29




---



##### Table of Contents



Noninterest Expense
  Three months endedJune 30,2009
    
    
    2008
    
    
    % Change(Dollars in thousands)Salaries and employee benefits
    
    $
    70,092
    
    
    $
    68,121
    
    
    
    2.89
    %Occupancy, net of rental income
    
    
    10,492
    
    
    
    9,716
    
    
    
    7.99Equipment
    
    
    5,855
    
    
    
    6,245
    
    
    
    (6.24
    )Deposit insurance assessments
    
    
    9,357
    
    
    
    399
    
    
    
    2,245.11Other
    
    
    27,471
    
    
    
    27,583
    
    
    
    (0.41
    )Total noninterest expense
    
    $
    123,267
    
    
    $
    112,064
    
    
    
    10.00
    %
 Six months endedJune 30,2009
    
    
    2008
    
    
    % Change(Dollars in thousands)Salaries and employee benefits
    
    $
    141,455
    
    
    $
    138,296
    
    
    
    2.28
    %Occupancy, net of rental income
    
    
    20,491
    
    
    
    19,199
    
    
    
    6.73Equipment
    
    
    12,077
    
    
    
    12,678
    
    
    
    (4.74
    )Deposit insurance assessments
    
    
    12,483
    
    
    
    691
    
    
    
    1,706.51Other
    
    
    55,214
    
    
    
    54,670
    
    
    
    1.00Total noninterest expense
    
    $
    241,720
    
    
    $
    225,534
    
    
    
    7.18
    %
  30




---



##### Table of Contents



Income Tax
  FINANCIAL CONDITION
 Earning Assets
     31




---



##### Table of Contents



NPL as a %Loan and Lease Portfolio
    
    Outstanding
    
    
    NPL
    
    
    of Outstanding(Dollars in thousands)Commercial and industrial
    
    $
    1,323,338
    
    
    $
    9,203
    
    
    
    0.70
    %Real estateConsumer mortgages
    
    
    2,054,666
    
    
    
    20,162
    
    
    
    0.98Home equity
    
    
    532,337
    
    
    
    2,247
    
    
    
    0.42Agricultural
    
    
    242,034
    
    
    
    4,455
    
    
    
    1.84Commercial and
industrial-owner
occupied
    
    
    1,394,852
    
    
    
    7,083
    
    
    
    0.51Construction,
acquisition and
development
    
    
    1,652,052
    
    
    
    44,828
    
    
    
    2.71Commercial
    
    
    1,719,044
    
    
    
    3,613
    
    
    
    0.21Credit cards
    
    
    101,844
    
    
    
    4,127
    
    
    
    4.05All other
    
    
    741,233
    
    
    
    1,954
    
    
    
    0.26Total loans
    
    $
    9,761,400
    
    
    $
    97,672
    
    
    
    1.00
    %
  90+ Days
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    NPL as aReal Estate Construction,
    
    
    
    
    
    Past Due still
    
    
    Non-accruing
    
    
    Restructured
    
    
    
    
    
    
    % ofAcquisition and Development
    
    Outstanding
    
    
    Accruing
    
    
    Loans
    
    
    Loans
    
    
    NPL
    
    
    Outstanding(Dollars in thousands)Multi-family construction
    
    $
    12,489
    
    
    $
    119
    
    
    $
    
    
    
    $
    
    
    
    $
    119
    
    
    
    0.95
    %Condominiums
    
    
    18,178
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    One-to-four family construction
    
    
    303,698
    
    
    
    2,361
    
    
    
    2,682
    
    
    
    953
    
    
    
    5,996
    
    
    
    1.97Recreation and all other loans
    
    
    53,888
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Commercial construction
    
    
    365,024
    
    
    
    147
    
    
    
    
    
    
    
    
    
    
    
    147
    
    
    
    0Commercial acquisition and
development
    
    
    262,612
    
    
    
    4,208
    
    
    
    
    
    
    
    147
    
    
    
    4,355
    
    
    
    1.66Residential acquisition and
development
    
    
    636,163
    
    
    
    11,814
    
    
    
    19,060
    
    
    
    3,337
    
    
    
    34,211
    
    
    
    5.38Total
    
    $
    1,652,052
    
    
    $
    18,649
    
    
    $
    21,742
    
    
    $
    4,437
    
    
    $
    44,828
    
    
    
    2.71
    %
 32




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##### Table of Contents



Deposits and Other Interest Bearing Liabilities
  Liquidity and Capital Resources
     Off-Balance Sheet Arrangements
  33




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##### Table of Contents



Regulatory Requirements for Capital
    Uses of Capital
   34




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##### Table of Contents



Certain Litigation Contingencies
   CRITICAL ACCOUNTING POLICIES
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
  
 ITEM 4. CONTROLS AND PROCEDURES.
  
 PART II
OTHER INFORMATION
 
 ITEM 1A. RISK FACTORS.
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
  35




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##### Table of Contents



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    Votes Cast
    
    Votes CastName
    
    in Favor
    
    Against or WithheldHassell H. Franklin
    
    
    68,993,668
    
    
    
    1,300,962Robert C. Nolan
    
    
    69,152,381
    
    
    
    1,142,249W. Cal Partee, Jr.
    
    
    68,654,776
    
    
    
    1,639,854James E. Campbell, III
    
    
    69,283,034
    
    
    
    1,011,596
  Name
    
    Term ExpiresLarry G. Kirk
    
    
    2010Guy W. Mitchell, III
    
    
    2010R. Madison Murphy
    
    
    2010Aubrey B. Patterson
    
    
    2010W.G. Holliman, Jr.
    
    
    2011James V. Kelley
    
    
    2011Turner O. Lashlee
    
    
    2011Alan W. Perry
    
    
    2011
   Votes Cast
    
    Votes Cast
    
    Abstentions/In Favor
    
    Against or Withheld
    
    Non-Votes39,619,286
    
    
    20,853,355
    
    
    
    9,821,989
 
 ITEM 6. EXHIBITS.
 (3)
    
    (a)
    
    Restated Articles of Incorporation, as amended. *(b)
    
    Bylaws, as amended and restated. (1)(c)
    
    Amendment No. 1 to Amended and Restated Bylaws. (2)(d)
    
    Amendment No. 2 to Amended and Restated Bylaws. (3)(e)
    
    Amendment No. 3 to Amended and Restated Bylaws. (3)(4)
    
    (a)
    
    Specimen Common Stock Certificate. (4)(b)
    
    Rights Agreement, dated as of April 24, 1991, including as Exhibit A the forms
of Rights Certificate and of Election to Purchase and as Exhibit B the summary of
Rights to Purchase Common Shares. (5)(c)
    
    First Amendment to Rights Agreement, dated as of March 28, 2001. (6)(d)
    
    Amended and Restated Certificate of Trust of BancorpSouth Capital Trust I. (7)
 36




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##### Table of Contents



(e)
    
    Second Amended and Restated Trust Agreement of BancorpSouth Capital Trust I,
dated as of January 28, 2002, between BancorpSouth, Inc., The Bank of New York, The
Bank of New York (Delaware) and the Administrative Trustees named therein. (8)(f)
    
    Junior Subordinated Indenture, dated as of January 28, 2002, between
BancorpSouth, Inc. and The Bank of New York. (8)(g)
    
    Guarantee Agreement, dated as of January 28, 2002, between BancorpSouth, Inc.
and The Bank of New York. (8)(h)
(i)
    
    Junior Subordinated Debt Security Specimen. (8)
Trust Preferred Security Certificate for BancorpSouth Capital Trust I. (8)(j)
    
    Certain instruments defining the rights of certain holders of long-term debt
securities of the Registrant are omitted pursuant to Item 601(b)(4)(iii)(A) of
Regulation S-K. The Registrant hereby agrees to furnish copies of these instruments to
the SEC upon request.(10)
    
    (a)
    
    BancorpSouth, Inc. Change in Control Agreement for William L. Prater. (9)(31.1)
    
    
    
    Certification of the Chief Executive Officer of BancorpSouth, Inc. pursuant to Rule 13a-14
or 15d-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.*(31.2)
    
    
    
    Certification of the Chief Financial Officer of BancorpSouth, Inc. pursuant to Rule 13a-14
or 15d-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.*(32.1)
    
    
    
    Certification of the Chief Executive Officer of BancorpSouth, Inc. pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*(32.2)
    
    
    
    Certification of the Chief Financial Officer of BancorpSouth, Inc. pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
 
 (1)
    
    Filed as an exhibit to the Companys Annual Report on Form 10-K for the year ended December
31, 1998 (file number 1-12991) and incorporated by reference thereto.(2)
    
    Filed as an exhibit to the Companys Annual Report on Form 10-K for the year ended December
31, 2000 (file number 1-12991) and incorporated by reference thereto.(3)
    
    Filed as exhibits 3.1 and 3.2 to the Companys Current Report on Form 8-K filed on January
26, 2007 (File number 1-12991) and incorporated by reference thereto.(4)
    
    Filed as an exhibit to the Companys Annual Report on Form 10-K for the year ended December
31, 1994 (file number 0-10826) and incorporated by reference thereto.(5)
    
    Filed as exhibit 1 to the Companys registration statement on Form 8-A filed on April 24,
1991 (file number 0-10826) and incorporated by reference thereto.(6)
    
    Filed as exhibit 2 to the Companys amended registration statement on Form 8-A/A filed on
March 28, 2001 (file number 1-12991) and incorporated by reference thereto.(7)
    
    Filed as exhibit 4.12 to the Companys registration statement on Form S-3 filed on November
2, 2001 (Registration No. 33-72712) and incorporated by reference thereto.(8)
    
    Filed as an exhibit to the Companys Current Report on Form 8-K filed on January 28, 2002
(file number 1-12991) and incorporated by reference thereto.(9)
    
    Filed as an exhibit to the Companys Current Report on Form 8-K filed on June 25, 2009 (file
number 1-12991) and incorporated by reference thereto.*
    
    Filed herewith. 37




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##### Table of Contents



SIGNATURES
  BancorpSouth, Inc.(Registrant)DATE:  August 7, 2009
    /s/ William L. PraterWilliam L. PraterTreasurer and
Chief Financial Officer 38




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##### Table of Contents



INDEX TO EXHIBITS
 Exhibit No.
    
    
    
    Description(3)
    
    (a)
    
    Restated Articles of Incorporation, as amended. *(b)
    
    Bylaws, as amended and restated. (1)(c)
    
    Amendment No. 1 to Amended and Restated Bylaws. (2)(d)
    
    Amendment No. 2 to Amended and Restated Bylaws. (3)(e)
    
    Amendment No. 3 to Amended and Restated Bylaws. (3)(4)
    
    (a)
    
    Specimen Common Stock Certificate. (4)(b)
    
    Rights Agreement, dated as of April 24, 1991, including as Exhibit A the forms
of Rights Certificate and of Election to Purchase and as Exhibit B the summary of
Rights to Purchase Common Shares. (5)(c)
    
    First Amendment to Rights Agreement, dated as of March 28, 2001. (6)(d)
    
    Amended and Restated Certificate of Trust of BancorpSouth Capital Trust I. (7)(e)
    
    Second Amended and Restated Trust Agreement of BancorpSouth Capital Trust I,
dated as of January 28, 2002, between BancorpSouth, Inc., The Bank of New York, The
Bank of New York (Delaware) and the Administrative Trustees named therein. (8)(f)
    
    Junior Subordinated Indenture, dated as of January 28, 2002, between
BancorpSouth, Inc. and The Bank of New York. (8)(g)
    
    Guarantee Agreement, dated as of January 28, 2002, between BancorpSouth, Inc.
and The Bank of New York. (8)(h)
    
    Junior Subordinated Debt Security Specimen. (8)(i)
    
    Trust Preferred Security Certificate for BancorpSouth Capital Trust I. (8)(j)
    
    Certain instruments defining the rights of certain holders of long-term debt
securities of the Registrant are omitted pursuant to Item 601(b)(4)(iii)(A) of
Regulation S-K. The Registrant hereby agrees to furnish copies of these instruments to
the SEC upon request.(10)
    
    (a)
    
    BancorpSouth, Inc. Change in Control Agreement for William L. Prater. (9)(31.1)
    
    
    
    Certification of the Chief Executive Officer of BancorpSouth, Inc. pursuant to Rule 13a-14
or 15d-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.*(31.2)
    
    
    
    Certification of the Chief Financial Officer of BancorpSouth, Inc. pursuant to Rule 13a-14
or 15d-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.*(32.1)
    
    
    
    Certification of the Chief Executive Officer of BancorpSouth, Inc. pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*(32.2)
    
    
    
    Certification of the Chief Financial Officer of BancorpSouth, Inc. pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
 
 (1)
    
    Filed as an exhibit to the Companys Annual Report on Form 10-K for the year ended December
31, 1998 (file number 1-12991) and incorporated by reference thereto.(2)
    
    Filed as an exhibit to the Companys Annual Report on Form 10-K for the year ended December
31, 2000 (file number 1-12991) and incorporated by reference thereto.(3)
    
    Filed as exhibits 3.1 and 3.2 to the Companys Current Report on Form 8-K filed on January
26, 2007 (File number 1-12991) and incorporated by reference thereto.(4)
    
    Filed as an exhibit to the Companys Annual Report on Form 10-K for the year ended December
31, 1994 (file number 0-10826) and incorporated by reference thereto.(5)
    
    Filed as exhibit 1 to the Companys registration statement on Form 8-A filed on April 24,
1991 (file number 0-10826) and incorporated by reference thereto.(6)
    
    Filed as exhibit 2 to the Companys amended registration statement on Form 8-A/A filed on
March 28, 2001 (file number 1-12991) and incorporated by reference thereto. 39




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##### Table of Contents



(7)
    
    Filed as exhibit 4.12 to the Companys registration statement on Form S-3 filed on November
2, 2001 (Registration No. 33-72712) and incorporated by reference thereto.(8)
    
    Filed as an exhibit to the Companys Current Report on Form 8-K filed on January 28, 2002
(file number 1-12991) and incorporated by reference thereto.(9)
    
    Filed as an exhibit to the Companys Current Report on Form 8-K filed on June 25, 2009 (file
number 1-12991) and incorporated by reference thereto.*
    
    Filed herewith. 40