##### 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 March 31, 2010
 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
(State or other jurisdiction of incorporation or organization)
    
    64-0659571
(I.R.S. Employer Identification No.)One Mississippi Plaza, 201 South Spring Street 
Tupelo, Mississippi
(Address of principal executive offices)
    
    38804
(Zip Code)
 (662) 680-2000
 NOT APPLICABLE
 þ o
 o o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




---



##### 



BANCORPSOUTH, INC.
TABLE OF CONTENTS
 PagePART I. Financial InformationITEM 1. Financial StatementsConsolidated Balance Sheets March 31, 2010
(Unaudited) and December 31, 2009
    
    
    3Consolidated Statements of Income (Unaudited)
Three Months March 31, 2010 and 2009
    
    
    4Consolidated Statements of Cash Flows (Unaudited)
Three Months Ended March 31, 2010 and 2009
    
    
    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
    
    
    43ITEM 4. Controls and Procedures
    
    
    43PART II. Other InformationITEM 1A. Risk Factors
    
    
    44ITEM 6. Exhibits
    
    
    44EX-31.1EX-31.2EX-32.1EX-32.2
  FORWARD-LOOKING STATEMENTS
  2




---



##### Table of Contents



PART I.
 FINANCIAL INFORMATION
 
 ITEM 1.
    
    FINANCIAL STATEMENTS.
  Consolidated
Balance Sheets
 March 31,
    
    
    December 31,
    
    
    March 31,2010
    
    
    2009
    
    
    2009(Unaudited)
    
    
    (1)
    
    
    (Unaudited)(Dollars in thousands, except per share amounts)ASSETSCash and due from banks
    
    $
    187,115
    
    
    $
    222,741
    
    
    $
    242,180Interest bearing deposits with other banks
    
    
    9,943
    
    
    
    15,704
    
    
    
    34,230Held-to-maturity securities, at amortized cost
    
    
    1,219,983
    
    
    
    1,032,822
    
    
    
    1,330,810Available-for-sale securities, at fair value
    
    
    891,221
    
    
    
    960,772
    
    
    
    993,529Federal funds sold and securities
purchased under agreement to resell
    
    
    120,000
    
    
    
    75,000
    
    
    
    Loans and leases
    
    
    9,756,081
    
    
    
    9,822,986
    
    
    
    9,759,787Less: Unearned income
    
    
    45,259
    
    
    
    47,850
    
    
    
    46,964Allowance for credit losses
    
    
    188,884
    
    
    
    176,043
    
    
    
    134,632Net loans
    
    
    9,521,938
    
    
    
    9,599,093
    
    
    
    9,578,191Loans held for sale
    
    
    80,312
    
    
    
    80,343
    
    
    
    168,769Premises and equipment, net
    
    
    339,860
    
    
    
    343,877
    
    
    
    348,734Accrued interest receivable
    
    
    69,022
    
    
    
    68,651
    
    
    
    77,503Goodwill
    
    
    270,097
    
    
    
    270,097
    
    
    
    269,062Bank owned life insurance
    
    
    189,022
    
    
    
    187,770
    
    
    
    184,026Other assets
    
    
    331,677
    
    
    
    310,997
    
    
    
    231,330TOTAL ASSETS
    
    $
    13,230,190
    
    
    $
    13,167,867
    
    
    $
    13,458,364LIABILITIESDeposits:Demand: Noninterest bearing
    
    $
    1,860,579
    
    
    $
    1,901,663
    
    
    $
    1,820,807Interest bearing
    
    
    4,589,029
    
    
    
    4,323,646
    
    
    
    4,005,620Savings
    
    
    768,302
    
    
    
    725,192
    
    
    
    719,676Other time
    
    
    3,776,251
    
    
    
    3,727,201
    
    
    
    3,545,871Total deposits
    
    
    10,994,161
    
    
    
    10,677,702
    
    
    
    10,091,974Federal funds purchased and securities
sold under agreement to repurchase
    
    
    480,795
    
    
    
    539,870
    
    
    
    1,256,649Short-term Federal Home Loan Bank and
other short-term borrowings
    
    
    2,500
    
    
    
    203,500
    
    
    
    210,000Accrued interest payable
    
    
    17,972
    
    
    
    19,588
    
    
    
    22,841Junior subordinated debt securities
    
    
    160,312
    
    
    
    160,312
    
    
    
    160,312Long-term Federal Home Loan Bank borrowings
    
    
    112,760
    
    
    
    112,771
    
    
    
    286,302Other liabilities
    
    
    196,806
    
    
    
    177,828
    
    
    
    174,627TOTAL LIABILITIES
    
    
    11,965,306
    
    
    
    11,891,571
    
    
    
    12,202,705SHAREHOLDERS EQUITYCommon stock, $2.50 par value per share
Authorized  500,000,000 shares; Issued  83,462,120
83,450,296 and 83,124,534 shares, respectively
    
    
    208,655
    
    
    
    208,626
    
    
    
    207,811Capital surplus
    
    
    223,307
    
    
    
    222,547
    
    
    
    216,138Accumulated other comprehensive loss
    
    
    (10,645
    )
    
    
    (8,409
    )
    
    
    (23,620
    )Retained earnings
    
    
    843,567
    
    
    
    853,532
    
    
    
    855,330TOTAL SHAREHOLDERS EQUITY
    
    
    1,264,884
    
    
    
    1,276,296
    
    
    
    1,255,659TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    13,230,190
    
    
    $
    13,167,867
    
    
    $
    13,458,364
 
 (1)
    
    Derived from audited financial statements.  3




---



##### Table of Contents



Three months endedMarch 31,2010
    
    
    2009(In thousands, except for per share amounts)INTEREST REVENUE:Loans and leases
    
    $
    126,956
    
    
    $
    129,209Deposits with other banks
    
    
    21
    
    
    
    70Federal funds sold and securities purchased
under agreement to resell
    
    
    82
    
    
    
    1Held-to-maturity securities:Taxable
    
    
    9,415
    
    
    
    13,031Tax-exempt
    
    
    2,461
    
    
    
    2,111Available-for-sale securities:Taxable
    
    
    8,385
    
    
    
    9,038Tax-exempt
    
    
    832
    
    
    
    883Loans held for sale
    
    
    506
    
    
    
    1,275Total interest revenue
    
    
    148,658
    
    
    
    155,618INTEREST EXPENSE:Deposits:Interest bearing demand
    
    
    9,392
    
    
    
    12,248Savings
    
    
    889
    
    
    
    936Other time
    
    
    21,529
    
    
    
    25,833Federal funds purchased and securities sold
under agreement to repurchase
    
    
    228
    
    
    
    572Federal Home Loan Bank borrowings
    
    
    1,880
    
    
    
    2,823Junior subordinated debt
    
    
    2,855
    
    
    
    2,955Other
    
    
    3
    
    
    
    375Total interest expense
    
    
    36,776
    
    
    
    45,742Net interest revenue
    
    
    111,882
    
    
    
    109,876Provision for credit losses
    
    
    43,519
    
    
    
    14,945Net interest revenue, after provision for
credit losses
    
    
    68,363
    
    
    
    94,931NONINTEREST REVENUE:Mortgage lending
    
    
    5,025
    
    
    
    7,652Credit card, debit card and merchant fees
    
    
    8,810
    
    
    
    8,348Service charges
    
    
    16,262
    
    
    
    16,755Trust income
    
    
    2,587
    
    
    
    2,209Security gains, net
    
    
    1,297
    
    
    
    5Insurance commissions
    
    
    21,668
    
    
    
    22,645Other
    
    
    7,683
    
    
    
    10,204Total noninterest revenue
    
    
    63,332
    
    
    
    67,818NONINTEREST EXPENSE:Salaries and employee benefits
    
    
    69,287
    
    
    
    71,363Occupancy, net of rental income
    
    
    10,775
    
    
    
    9,999Equipment
    
    
    5,739
    
    
    
    6,222Deposit insurance assessments
    
    
    4,250
    
    
    
    3,126Other
    
    
    30,432
    
    
    
    29,268Total noninterest expense
    
    
    120,483
    
    
    
    119,978Income before income taxes
    
    
    11,212
    
    
    
    42,771Income tax expense
    
    
    2,816
    
    
    
    13,294Net income
    
    $
    8,396
    
    
    $
    29,477Earnings per share: Basic
    
    $
    0.10
    
    
    $
    0.35Diluted
    
    $
    0.10
    
    
    $
    0.35Dividends declared per common share
    
    $
    0.22
    
    
    $
    0.22
  4




---



##### Table of Contents



Three months endedMarch 31,2010
    
    
    2009(In thousands)Operating Activities:Net income
    
    $
    8,396
    
    
    $
    29,477Adjustment to reconcile net income to net
cash provided by operating activities:Provision for credit losses
    
    
    43,519
    
    
    
    14,945Depreciation and amortization
    
    
    7,547
    
    
    
    7,688Deferred taxes
    
    
    (6,328
    )
    
    
    9,826Amortization of intangibles
    
    
    1,015
    
    
    
    1,360Amortization of debt securities premium and discount, net
    
    
    1,268
    
    
    
    1,228Share-based compensation expense
    
    
    567
    
    
    
    591Security gains, net
    
    
    (1,297
    )
    
    
    (5
    )Net deferred loan origination expense
    
    
    (2,371
    )
    
    
    (2,286
    )Excess tax benefit from exercise of stock options
    
    
    (21
    )
    
    
    (23
    )(Increase) decrease in interest receivable
    
    
    (371
    )
    
    
    1,680Increase (decrease) in interest payable
    
    
    (1,616
    )
    
    
    2,086Realized gain on student loans sold
    
    
    
    
    
    
    (1,692
    )Proceeds from student loans sold
    
    
    
    
    
    
    62,080Origination of student loans held for sale
    
    
    
    
    
    
    (31,873
    )Realized gain on mortgages sold
    
    
    (2,041
    )
    
    
    (5,992
    )Proceeds from mortgages sold
    
    
    208,825
    
    
    
    426,154Origination of mortgages held for sale
    
    
    (207,400
    )
    
    
    (424,306
    )Increase in bank-owned life insurance
    
    
    (1,252
    )
    
    
    (1,754
    )Decrease in prepaid pension asset
    
    
    395
    
    
    
    561Decrease in prepaid deposit insurance assessments
    
    
    3,830
    
    
    
    Other, net
    
    
    2,072
    
    
    
    (10,280
    )Net cash provided by operating activities
    
    
    54,737
    
    
    
    79,465Investing activities:Proceeds from calls and maturities of held-to-maturity securities
    
    
    106,558
    
    
    
    9,637Proceeds from calls and maturities of available-for-sale securities
    
    
    142,641
    
    
    
    41,210Purchases of held-to-maturity securities
    
    
    (293,816
    )
    
    
    (7,154
    )Purchases of available-for-sale securities
    
    
    (77,220
    )
    
    
    (48,709
    )Net (increase) decrease in loans and leases
    
    
    36,004
    
    
    
    (33,399
    )Purchases of premises and equipment
    
    
    (3,567
    )
    
    
    (5,608
    )Proceeds from sale of premises and equipment
    
    
    42
    
    
    
    622Acquisition of businesses, net of cash acquired
    
    
    
    
    
    
    (96
    )Other, net
    
    
    
    
    
    
    (64
    )Net cash provided by (used in) investing activities
    
    
    (89,358
    )
    
    
    (43,561
    )Financing activities:Net increase in deposits
    
    
    316,459
    
    
    
    380,102Net (decrease) increase in short-term debt and other liabilities
    
    
    (305,075
    )
    
    
    (426,237
    )Repayment of long-term debt
    
    
    (11
    )
    
    
    (10
    )Issuance of common stock
    
    
    201
    
    
    
    316Excess tax benefit from exercise of stock options
    
    
    21
    
    
    
    23Payment of cash dividends
    
    
    (18,361
    )
    
    
    (18,285
    )Net cash used in financing activities
    
    
    (6,766
    )
    
    
    (64,091
    )Decrease in cash and cash equivalents
    
    
    (41,387
    )
    
    
    (28,187
    )Cash and cash equivalents at beginning of period
    
    
    238,445
    
    
    
    304,597Cash and cash equivalents at end of period
    
    $
    197,058
    
    
    $
    276,410
  5




---



##### 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
  March 31,
    
    
    December 31,2010
    
    
    2009
    
    
    2009(In thousands)Commercial and industrial
    
    $
    1,515,404
    
    
    $
    1,437,006
    
    
    $
    1,514,419Real estateConsumer mortgages
    
    
    2,014,085
    
    
    
    2,037,439
    
    
    
    2,017,067Home equity
    
    
    549,924
    
    
    
    519,528
    
    
    
    550,085Agricultural
    
    
    266,649
    
    
    
    238,466
    
    
    
    262,069Commercial and
industrial-owner occupied
    
    
    1,423,098
    
    
    
    1,455,422
    
    
    
    1,449,554Construction, acquisition
and development
    
    
    1,428,882
    
    
    
    1,692,526
    
    
    
    1,459,503Commercial
    
    
    1,809,660
    
    
    
    1,660,211
    
    
    
    1,806,766Credit cards
    
    
    101,464
    
    
    
    98,450
    
    
    
    108,086All other
    
    
    646,915
    
    
    
    620,739
    
    
    
    655,437Total
    
    $
    9,756,081
    
    
    $
    9,759,787
    
    
    $
    9,822,986
   6




---



##### Table of Contents



March 31,
    
    
    December 31,2010
    
    
    2009
    
    
    2009(In thousands)Non-accrual loans and leases
    
    $
    199,637
    
    
    $
    38,936
    
    
    $
    144,013Loans and leases 90 days or more past due,
still accruing
    
    
    20,452
    
    
    
    27,299
    
    
    
    36,301Restructured loans and leases still accruing
    
    
    15,576
    
    
    
    7,581
    
    
    
    6,161Total non-performing loans
    
    $
    235,665
    
    
    $
    73,816
    
    
    $
    186,475
    NOTE 3  ALLOWANCE FOR CREDIT LOSSES
  Three months ended
    
    
    Year endedMarch 31,
    
    
    December 31,2010
    
    
    2009
    
    
    2009(In thousands)Balance at beginning of period
    
    $
    176,043
    
    
    $
    132,793
    
    
    $
    132,793Provision charged to expense
    
    
    43,519
    
    
    
    14,945
    
    
    
    117,324Recoveries
    
    
    701
    
    
    
    1,045
    
    
    
    4,139Loans and leases charged off
    
    
    (31,379
    )
    
    
    (14,151
    )
    
    
    (78,213
    )Balance at end of period
    
    $
    188,884
    
    
    $
    134,632
    
    
    $
    176,043
 7




---



##### Table of Contents



NOTE 4  SECURITIES
  March 31, 2010Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    Value(In thousands)U.S. Government agencies
    
    $
    983,178
    
    
    $
    33,105
    
    
    $
    572
    
    
    $
    1,015,711Obligations of states
and political
subdivisions
    
    
    236,805
    
    
    
    6,363
    
    
    
    730
    
    
    
    242,439Total
    
    $
    1,219,983
    
    
    $
    39,468
    
    
    $
    1,302
    
    
    $
    1,258,150
 December 31, 2009Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    Value(In thousands)U.S. Government agencies
    
    $
    798,660
    
    
    $
    39,685
    
    
    $
    
    
    
    $
    838,345Obligations of states
and political
subdivisions
    
    
    234,162
    
    
    
    6,238
    
    
    
    670
    
    
    
    239,730Total
    
    $
    1,032,822
    
    
    $
    45,923
    
    
    $
    670
    
    
    $
    1,078,075
   March 31, 2010EstimatedAmortized
    
    
    FairCost
    
    
    Value(In thousands)Maturing in one year or less
    
    $
    433,090
    
    
    $
    441,039Maturing after one year through five years
    
    
    449,111
    
    
    
    471,811Maturing after five years through ten years
    
    
    143,214
    
    
    
    145,013Maturing after ten years
    
    
    194,568
    
    
    
    200,287Total
    
    $
    1,219,983
    
    
    $
    1,258,150
  8




---



##### Table of Contents



March 31, 2010Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    Value(In thousands)U.S. Government agencies
    
    $
    473,284
    
    
    $
    16,567
    
    
    $
    
    
    
    $
    489,851Government agency issued residential
mortgage-backed securities
    
    
    243,353
    
    
    
    7,348
    
    
    
    463
    
    
    
    250,238Government agency issued commercial
mortgage-backed securities
    
    
    20,544
    
    
    
    661
    
    
    
    92
    
    
    
    21,113Obligations of states and political
subdivisions
    
    
    111,152
    
    
    
    1,666
    
    
    
    405
    
    
    
    112,413Collateralized debt obligations
    
    
    1,449
    
    
    
    
    
    
    
    
    
    
    
    1,449Other
    
    
    15,600
    
    
    
    558
    
    
    
    
    
    
    
    16,157Total
    
    $
    865,382
    
    
    $
    26,800
    
    
    $
    960
    
    
    $
    891,221
 December 31, 2009Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    Value(In thousands)U.S. Government agencies
    
    $
    493,970
    
    
    $
    18,325
    
    
    $
    207
    
    
    $
    512,088Government agency issued residential
mortgage-backed securities
    
    
    282,634
    
    
    
    9,906
    
    
    
    122
    
    
    
    292,418Government agency issued commercial
mortgage-backed securities
    
    
    18,229
    
    
    
    693
    
    
    
    85
    
    
    
    18,837Obligations of states and political
subdivisions
    
    
    109,751
    
    
    
    1,589
    
    
    
    502
    
    
    
    110,838Collateralized debt obligations
    
    
    2,125
    
    
    
    
    
    
    
    
    
    
    
    2,125Other
    
    
    23,967
    
    
    
    500
    
    
    
    1
    
    
    
    24,466Total
    
    $
    930,676
    
    
    $
    31,013
    
    
    $
    917
    
    
    $
    960,772
   March 31, 2010EstimatedAmortized
    
    
    FairCost
    
    
    Value(In thousands)Maturing in one year or less
    
    $
    68,468
    
    
    $
    69,692Maturing after one year through five years
    
    
    459,805
    
    
    
    477,408Maturing after five years through ten years
    
    
    131,749
    
    
    
    133,838Maturing after ten years
    
    
    205,360
    
    
    
    210,283Total
    
    $
    865,382
    
    
    $
    891,221
  9




---



##### Table of Contents



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. Government agencies
    
    $
    223,093
    
    
    $
    (572
    )
    
    $
    
    
    
    $
    
    
    
    $
    223,093
    
    
    $
    (572
    )Obligations of states and
political subdivisions
    
    
    21,139
    
    
    
    (335
    )
    
    
    9,001
    
    
    
    (395
    )
    
    
    30,140
    
    
    
    (730
    )Total
    
    $
    244,232
    
    
    $
    (907
    )
    
    $
    9,001
    
    
    $
    (395
    )
    
    $
    253,233
    
    
    $
    (1,302
    )Available-for-sale securities:U.S. Government agencies
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Government agency issued
residential
mortgage-backed securities
    
    
    61,160
    
    
    
    (384
    )
    
    $
    2,661
    
    
    
    (79
    )
    
    
    63,821
    
    
    
    (463
    )Government agency issued
commercial
mortgage-backed securities
    
    
    3,071
    
    
    
    (26
    )
    
    
    2,282
    
    
    
    (66
    )
    
    
    5,353
    
    
    
    (92
    )Obligations of states and political subdivisions
    
    
    34,995
    
    
    
    (205
    )
    
    
    2,409
    
    
    
    (200
    )
    
    
    37,404
    
    
    
    (405
    )Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    99,226
    
    
    $
    (615
    )
    
    $
    7,352
    
    
    $
    (345
    )
    
    $
    106,578
    
    
    $
    (960
    )
  NOTE 5  PER SHARE DATA
   10




---



##### Table of Contents



Three months ended March 31,2010
    
    
    2009Income
    
    
    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
    
    $
    8,396
    
    
    
    83,404
    
    
    $
    0.10
    
    
    $
    29,477
    
    
    
    83,107
    
    
    $
    0.35Effect of dilutive share-
based awards
    
    
    
    
    
    
    171
    
    
    
    
    
    
    
    
    
    
    
    127Diluted EPSIncome available to common
shareholders plus assumed
exercise of all outstanding
share-based awards
    
    $
    8,396
    
    
    
    83,575
    
    
    $
    0.10
    
    
    $
    29,477
    
    
    
    83,234
    
    
    $
    0.35
 NOTE 6  COMPREHENSIVE INCOME
  Three months ended March 31,2010
    
    
    2009Before
    
    
    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) gains arising during
holding period
    
    $
    (4,255
    )
    
    $
    1,627
    
    
    $
    (2,628
    )
    
    $
    4,108
    
    
    $
    (1,576
    )
    
    $
    2,532Less: Reclassification adjustment for
net gains realized in net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5
    )
    
    
    2
    
    
    
    (3
    )Recognized employee benefit plan
net periodic benefit cost
    
    
    634
    
    
    
    (242
    )
    
    
    392
    
    
    
    1,210
    
    
    
    (463
    )
    
    
    747Other comprehensive income
    
    $
    (3,621
    )
    
    $
    1,385
    
    
    $
    (2,236
    )
    
    $
    5,313
    
    
    $
    (2,037
    )
    
    $
    3,276Net income
    
    
    
    
    
    
    
    
    
    
    8,396
    
    
    
    
    
    
    
    
    
    
    
    29,477Comprehensive income
    
    
    
    
    
    
    
    
    
    $
    6,160
    
    
    
    
    
    
    
    
    
    
    $
    32,753
 NOTE 7  GOODWILL AND OTHER INTANGIBLE ASSETS
  Community
    
    
    InsuranceBanking
    
    
    Agencies
    
    
    Total(In thousands)Balance as of December 31, 2009
    
    $
    217,618
    
    
    $
    52,479
    
    
    $
    270,097Goodwill recorded during the period
    
    
    
    
    
    
    
    
    
    
    Balance as of March 31, 2010
    
    $
    217,618
    
    
    $
    52,479
    
    
    $
    270,097
 11




---



##### Table of Contents



As of
    
    
    As ofMarch 31, 2010
    
    
    December 31, 2009Gross Carrying
    
    
    Accumulated
    
    
    Gross Carrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    Amount
    
    
    Amortization(In thousands)Amortized intangible assets:Core deposit intangibles
    
    $
    27,801
    
    
    $
    18,747
    
    
    $
    27,801
    
    
    $
    18,408Customer relationship intangibles
    
    
    32,511
    
    
    
    19,736
    
    
    
    32,511
    
    
    
    19,060Non-solicitation intangibles
    
    
    600
    
    
    
    600
    
    
    
    600
    
    
    
    600Total
    
    $
    60,912
    
    
    $
    39,083
    
    
    $
    60,912
    
    
    $
    38,068Unamortized intangible assets:Trade names
    
    $
    688
    
    
    $
    
    
    
    $
    688
    
    
    $
    
 Three months endedMarch 31,2010
    
    
    2009(In thousands)Aggregate amortization expense for:Core deposit intangibles
    
    $
    339
    
    
    $
    517Customer relationship intangibles
    
    
    676
    
    
    
    783Non-solicitation intangibles
    
    
    
    
    
    
    60Total
    
    $
    1,015
    
    
    $
    1,360
  CustomerCore Deposit
    
    RelationshipIntangibles
    
    Intangibles
    
    Total(In thousands)Estimated Amortization Expense:For year ended December 31, 2010
    
    $
    1,308
    
    
    $
    2,601
    
    
    $
    3,909For year ended December 31, 2011
    
    
    1,016
    
    
    
    2,223
    
    
    
    3,239For year ended December 31, 2012
    
    
    946
    
    
    
    1,905
    
    
    
    2,851For year ended December 31, 2013
    
    
    582
    
    
    
    1,632
    
    
    
    2,214For year ended December 31, 2014
    
    
    526
    
    
    
    1,398
    
    
    
    1,924
 12




---



##### Table of Contents



NOTE 8  PENSION BENEFITS
  Pension BenefitsThree months endedMarch 31,2010
    
    
    2009(In thousands)Service cost
    
    $
    1,803
    
    
    $
    1,817Interest cost
    
    
    1,907
    
    
    
    1,826Expected return on assets
    
    
    (3,487
    )
    
    
    (2,797
    )Amortization of unrecognized transition amount
    
    
    5
    
    
    
    5Recognized prior service cost
    
    
    85
    
    
    
    75Recognized net loss
    
    
    544
    
    
    
    1,130Net periodic benefit costs
    
    $
    857
    
    
    $
    2,056
 NOTE 9  RECENT PRONOUNCEMENTS
   NOTE 10  SEGMENT REPORTING
   13




---



##### Table of Contents



GeneralCommunity
    
    
    Insurance
    
    
    CorporateBanking
    
    
    Agencies
    
    
    and Other
    
    
    Total(In thousands)Three months ended March 31, 2010:Results of OperationsNet interest revenue
    
    $
    101,340
    
    
    $
    148
    
    
    $
    10,394
    
    
    $
    111,882Provision for credit losses
    
    
    41,948
    
    
    
    
    
    
    
    1,571
    
    
    
    43,519Net interest revenue after provision for credit losses
    
    
    59,392
    
    
    
    148
    
    
    
    8,823
    
    
    
    68,363Noninterest revenue
    
    
    26,292
    
    
    
    21,735
    
    
    
    15,305
    
    
    
    63,332Noninterest expense
    
    
    77,609
    
    
    
    17,403
    
    
    
    25,471
    
    
    
    120,483Income (loss) before income taxes
    
    
    8,075
    
    
    
    4,480
    
    
    
    (1,343
    )
    
    
    11,212Income taxes (benefit)
    
    
    2,028
    
    
    
    1,782
    
    
    
    (994
    )
    
    
    2,816Net income (loss)
    
    $
    6,047
    
    
    $
    2,698
    
    
    $
    (349
    )
    
    $
    8,396Selected Financial InformationTotal assets (at end of period)
    
    $
    10,774,812
    
    
    $
    181,635
    
    
    $
    2,273,743
    
    
    $
    13,230,190Depreciation and amortization
    
    
    6,956
    
    
    
    1,060
    
    
    
    545
    
    
    
    8,561Three months ended March 31, 2009:Results of OperationsNet interest revenue
    
    $
    101,247
    
    
    $
    189
    
    
    $
    8,440
    
    
    $
    109,876Provision for credit losses
    
    
    13,723
    
    
    
    
    
    
    
    1,222
    
    
    
    14,945Net interest revenue after provision for credit losses
    
    
    87,524
    
    
    
    189
    
    
    
    7,218
    
    
    
    94,931Noninterest revenue
    
    
    27,456
    
    
    
    22,613
    
    
    
    17,749
    
    
    
    67,818Noninterest expense
    
    
    76,371
    
    
    
    17,588
    
    
    
    26,019
    
    
    
    119,978Income (loss) before income taxes
    
    
    38,609
    
    
    
    5,214
    
    
    
    (1,052
    )
    
    
    42,771Income taxes (benefit)
    
    
    12,000
    
    
    
    2,069
    
    
    
    (775
    )
    
    
    13,294Net income (loss)
    
    $
    26,609
    
    
    $
    3,145
    
    
    $
    (277
    )
    
    $
    29,477Selected Financial InformationTotal assets (at end of period)
    
    $
    11,041,535
    
    
    $
    159,888
    
    
    $
    2,256,941
    
    
    $
    13,458,364Depreciation and amortization
    
    
    7,298
    
    
    
    1,178
    
    
    
    572
    
    
    
    9,048
 NOTE 11  MORTGAGE SERVICING RIGHTS
  (Dollars in thousands)Unpaid principal balance
    
    $
    3,451,958Weighted-average prepayment speed (CPR)
    
    
    15.8Discount rate (annual percentage)
    
    
    10.3Weighted-average coupon interest rate (percentage)
    
    
    5.6Weighted-average remaining maturity (months)
    
    
    321.0Weighted-average servicing fee (basis points)
    
    
    28.9
  14




---



##### Table of Contents



2010
    
    
    2009(In thousands)Fair value as of January 1
    
    $
    35,560
    
    
    $
    24,972Additions:Origination of servicing assets
    
    
    2,085
    
    
    
    4,212Changes in fair value:Due to payoffs/paydowns
    
    
    (1,302
    )
    
    
    (1,938
    )Due to change in valuation inputs or assumptions
used in the valuation model
    
    
    8
    
    
    
    (1,511
    )Other changes in fair value
    
    
    (1
    )
    
    
    (4
    )Fair value as of March 31
    
    $
    36,350
    
    
    $
    25,731
  NOTE 12  DERIVATIVE INSTRUMENTS
   NOTE 13  FAIR VALUE DISCLOSURES
  15




---



##### Table of Contents



Determination of Fair Value
  Available-for-sale securities.
 Mortgage servicing rights.
 Derivative instruments.
 Loans held for sale.
 Impaired loans.
 Other real estate owned.
 16




---



##### Table of Contents



Assets and Liabilities Recorded at Fair Value on a Recurring Basis
  March 31, 2010Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    Total(In thousands)Assets:Available-for-sale securities:U.S. Government agencies
    
    $
    
    
    
    $
    489,851
    
    
    $
    
    
    
    $
    489,851Government agency issued residential
mortgage-backed securities
    
    
    
    
    
    
    250,237
    
    
    
    
    
    
    
    250,237Government agency issued commercial
mortgage-backed securities
    
    
    
    
    
    
    21,113
    
    
    
    
    
    
    
    21,113Obligations of states and
political subdivisions
    
    
    
    
    
    
    112,413
    
    
    
    
    
    
    
    112,413Collateralized debt obligations
    
    
    
    
    
    
    
    
    
    
    1,449
    
    
    
    1,449Other
    
    
    512
    
    
    
    15,646
    
    
    
    
    
    
    
    16,158Mortgage servicing rights
    
    
    
    
    
    
    
    
    
    
    36,350
    
    
    
    36,350Derivative instruments
    
    
    
    
    
    
    28,263
    
    
    
    1,053
    
    
    
    29,316Total
    
    $
    512
    
    
    $
    917,523
    
    
    $
    38,852
    
    
    $
    956,887Liabilities:Derivative instruments
    
    $
    
    
    
    $
    28,546
    
    
    $
    192
    
    
    $
    28,738March 31, 2009Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    Total(In thousands)Assets:Available-for-sale securities:U.S. Government agencies
    
    $
    
    
    
    $
    514,266
    
    
    $
    
    
    
    $
    514,266Government agency issued residential
mortgage-backed securities
    
    
    
    
    
    
    354,589
    
    
    
    
    
    
    
    354,589Government agency issued commercial
mortgage-backed securities
    
    
    
    
    
    
    18,828
    
    
    
    
    
    
    
    18,828Obligations of states and
political subdivisions
    
    
    
    
    
    
    80,159
    
    
    
    
    
    
    
    80,159Collateralized debt obligations
    
    
    
    
    
    
    
    
    
    
    2,375
    
    
    
    2,375Other
    
    
    197
    
    
    
    23,115
    
    
    
    
    
    
    
    23,312Mortgage servicing rights
    
    
    
    
    
    
    
    
    
    
    25,731
    
    
    
    25,731Derivative instruments
    
    
    
    
    
    
    41,276
    
    
    
    2,572
    
    
    
    43,848Total
    
    $
    197
    
    
    $
    1,032,233
    
    
    $
    30,678
    
    
    $
    1,063,108Liabilities:Derivative instruments
    
    $
    
    
    
    $
    41,276
    
    
    $
    1,464
    
    
    $
    42,740
 17




---



##### Table of Contents



Mortgage
    
    
    
    
    
    
    Available-Servicing
    
    
    Derivative
    
    
    for-saleRights
    
    
    Instruments
    
    
    Securities(In thousands)Balance at December 31, 2009
    
    $
    35,560
    
    
    $
    1,110
    
    
    $
    2,125Total net gains (losses) for the year to date included in:Net income
    
    
    790
    
    
    
    (249
    )
    
    
    (676
    )Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    Purchases, sales, issuances and settlements, net
    
    
    
    
    
    
    
    
    
    
    Transfers in and/or out of Level 3
    
    
    
    
    
    
    
    
    
    
    Balance at March 31, 2010
    
    $
    36,350
    
    
    $
    861
    
    
    $
    1,449Net unrealized gains (losses) included in net income for the
quarter relating to assets and liabilities held at March
31, 2010
    
    $
    8
    
    
    $
    (249
    )
    
    $
    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
    
    
    759
    
    
    
    1,791
    
    
    
    Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    Purchases, sales, issuances and settlements, net
    
    
    
    
    
    
    
    
    
    
    Transfers in and/or out of Level 3
    
    
    
    
    
    
    
    
    
    
    Balance at March 31, 2009
    
    $
    25,731
    
    
    $
    1,108
    
    
    $
    2,375Net unrealized (losses) gains included in net income for the
quarter relating to assets and liabilities held at
March 31, 2009
    
    $
    (3,449
    )
    
    $
    1,791
    
    
    $
    
 Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis
  March 31, 2010TotalLevel 1
    
    Level 2
    
    Level 3
    
    Total
    
    Gains (Losses)(In thousands)Assets:Loans held for sale
    
    $
    
    
    
    $
    80,312
    
    
    $
    
    
    
    $
    80,312
    
    
    $
    Impaired loans
    
    
    
    
    
    
    
    
    
    
    140,444
    
    
    
    140,444
    
    
    
    (30,855
    )Other real estate owned
    
    
    
    
    
    
    
    
    
    
    59,269
    
    
    
    59,269
    
    
    
    (6,024
    )March 31, 2009TotalLevel 1
    
    Level 2
    
    Level 3
    
    Total
    
    Gains (Losses)(In thousands)Assets:Loans held for sale
    
    $
    
    
    
    $
    168,769
    
    
    $
    
    
    
    $
    168,769
    
    
    $
    Impaired loans
    
    
    
    
    
    
    
    
    
    
    22,208
    
    
    
    22,208
    
    
    
    (5,252
    )Other real estate owned
    
    
    
    
    
    
    
    
    
    
    47,450
    
    
    
    47,450
    
    
    
    (2,039
    )
 18




---



##### Table of Contents



NOTE 14  FAIR VALUE OF FINANCIAL INSTRUMENTS
  Securities.
 Loans and Leases.
  Loans Held for Sale.
 Deposit Liabilities
 Debt
 Derivative Instruments.
 Lending Commitments.
 19




---



##### Table of Contents



March 31, 2010
    
    December 31, 2009Carrying
    
    Fair
    
    Carrying
    
    FairValue
    
    Value
    
    Value
    
    Value(In thousands)Assets:Cash and due from banks
    
    $
    187,115
    
    
    $
    187,115
    
    
    $
    222,741
    
    
    $
    222,741Interest bearing deposits with other
banks
    
    
    9,943
    
    
    
    9,943
    
    
    
    15,704
    
    
    
    15,704Held-to-maturity securities
    
    
    1,219,983
    
    
    
    1,258,150
    
    
    
    1,032,822
    
    
    
    1,078,075Available-for-sale securities
    
    
    891,221
    
    
    
    891,221
    
    
    
    960,772
    
    
    
    960,772Federal funds sold and securities
purchased under agreement to resell
    
    
    120,000
    
    
    
    120,000
    
    
    
    75,000
    
    
    
    75,000Net loans and leases
    
    
    9,521,938
    
    
    
    9,597,419
    
    
    
    9,599,093
    
    
    
    9,744,673Loans held for sale
    
    
    80,312
    
    
    
    80,345
    
    
    
    80,343
    
    
    
    80,429Liabilities:Noninterest bearing deposits
    
    
    1,860,579
    
    
    
    1,860,579
    
    
    
    1,901,663
    
    
    
    1,901,663Savings and interest bearing deposits
    
    
    5,357,331
    
    
    
    5,357,331
    
    
    
    5,048,838
    
    
    
    5,048,838Other time deposits
    
    
    3,776,251
    
    
    
    3,799,582
    
    
    
    3,727,201
    
    
    
    3,757,602Federal funds purchased and securities
sold under agreement to repurchase
and other short-term borrowings
    
    
    483,295
    
    
    
    482,219
    
    
    
    743,370
    
    
    
    743,188Long-term debt and other borrowings
    
    
    273,072
    
    
    
    287,727
    
    
    
    273,174
    
    
    
    290,622Derivative instruments:Forward commitments to sell fixed rate
mortgage loans
    
    
    36
    
    
    
    36
    
    
    
    806
    
    
    
    806Commitments to fund fixed rate
mortgage loans
    
    
    825
    
    
    
    825
    
    
    
    304
    
    
    
    304Interest rate swap position to receive
    
    
    28,263
    
    
    
    28,263
    
    
    
    23,992
    
    
    
    23,992Interest rate swap position to pay
    
    
    (28,546
    )
    
    
    (28,546
    )
    
    
    (24,258
    )
    
    
    (24,258
    )
 NOTE 15  OTHER NONINTEREST INCOME AND EXPENSE
  Three months endedMarch 31,2010
    
    
    2009(In thousands)Annuity fees
    
    $
    781
    
    
    $
    1,350Brokerage commissions and fees
    
    
    1,317
    
    
    
    978Bank-owned life insurance
    
    
    1,669
    
    
    
    1,754Other miscellaneous income
    
    
    3,916
    
    
    
    6,122Total other noninterest income
    
    $
    7,683
    
    
    $
    10,204
 20




---



##### Table of Contents



Three months endedMarch 31,2010
    
    
    2009(In thousands)Advertising
    
    $
    656
    
    
    $
    965Foreclosed property expense
    
    
    3,538
    
    
    
    2,302Telecommunications
    
    
    2,200
    
    
    
    2,205Public relations
    
    
    1,648
    
    
    
    1,547Data processing
    
    
    1,470
    
    
    
    1,536Computer software
    
    
    1,704
    
    
    
    1,811Amortization of intangibles
    
    
    1,015
    
    
    
    1,360Legal fees
    
    
    1,328
    
    
    
    1,058Postage and shipping
    
    
    1,360
    
    
    
    1,259Other miscellaneous expense
    
    
    15,513
    
    
    
    15,225Total other noninterest expense
    
    $
    30,432
    
    
    $
    29,268
 
 ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
 OVERVIEW
     21




---



##### Table of Contents



22




---



##### Table of Contents



SELECTED FINANCIAL QUARTERLY DATA
 Three months endedMarch 31,2010
    
    
    2009(Dollars in thousands, except per share data)Earnings Summary:Total interest revenue
    
    $
    148,658
    
    
    $
    155,618Total interest expense
    
    
    36,776
    
    
    
    45,742Net interest income
    
    
    111,882
    
    
    
    109,876Provision for credit losses
    
    
    43,519
    
    
    
    14,945Noninterest income
    
    
    63,332
    
    
    
    67,818Noninterest expense
    
    
    120,483
    
    
    
    119,978Income before income taxes
    
    
    11,212
    
    
    
    42,771Income taxes
    
    
    2,816
    
    
    
    13,294Net income
    
    $
    8,396
    
    
    $
    29,477Balance Sheet  Period-end balances:Total assets
    
    $
    13,230,190
    
    
    $
    13,458,364Total securities
    
    
    2,111,204
    
    
    
    2,324,339Loans and leases, net of unearned income
    
    
    9,710,822
    
    
    
    9,712,823Total deposits
    
    
    10,994,161
    
    
    
    10,091,974Long-term debt
    
    
    112,760
    
    
    
    286,302Total shareholders equity
    
    
    1,264,884
    
    
    
    1,255,659Balance Sheet-Average Balances:Total assets
    
    $
    13,127,171
    
    
    $
    13,324,878Total securities
    
    
    1,998,928
    
    
    
    2,294,335Loans and leases, net of unearned income
    
    
    9,767,088
    
    
    
    9,695,475Total deposits
    
    
    10,878,270
    
    
    
    9,908,432Long-term debt
    
    
    112,764
    
    
    
    286,305Total shareholders equity
    
    
    1,265,409
    
    
    
    1,238,971Common Share Data:Basic earnings per share
    
    $
    0.10
    
    
    $
    0.35Diluted earnings per share
    
    
    0.10
    
    
    
    0.35Cash dividends per share
    
    
    0.22
    
    
    
    0.22Book value per share
    
    
    15.16
    
    
    
    15.11Dividend payout ratio
    
    
    220.00
    %
    
    
    62.86
    %Financial Ratios (Annualized):Return on average assets
    
    
    0.26
    %
    
    
    0.90
    %Return on average shareholders equity
    
    
    2.69
    
    
    
    9.65Total shareholders equity to total assets
    
    
    9.56
    
    
    
    9.33Tangible shareholders equity to tangible assets
    
    
    7.52
    
    
    
    7.29Net interest margin-fully taxable equivalent
    
    
    3.88
    
    
    
    3.74Credit Quality Ratios (Annualized):Net charge-offs to average loans and leases
    
    
    1.26
    %
    
    
    0.54
    %Provision for credit losses to average loans and leases
    
    
    1.78
    
    
    
    0.62Allowance for credit losses to net loans and leases
    
    
    1.95
    
    
    
    1.39Allowance for credit losses to NPLs
    
    
    80.15
    
    
    
    182.39Allowance for credit losses to non-performing assets
(NPAs)
    
    
    64.04
    
    
    
    111.02NPLs to net loans and leases
    
    
    2.43
    
    
    
    0.76NPAs to net loans and leases
    
    
    3.04
    
    
    
    1.25Captial Adequacy:Tier I capital
    
    
    11.12
    %
    
    
    10.92
    %Total capital
    
    
    12.38
    
    
    
    12.17Tier I leverage capital
    
    
    8.86
    
    
    
    8.72
 23




---



##### Table of Contents



March 31,2010
    
    
    2009(In thousands)Tangible Assets:Total assets
    
    $
    13,230,190
    
    
    $
    13,458,364Less: Goodwill
    
    
    270,097
    
    
    
    269,062Other identifiable intangible assets
    
    
    22,517
    
    
    
    26,805Total tangible assets
    
    $
    12,937,576
    
    
    $
    13,162,497Tangible Shareholders EquityTotal shareholders equity
    
    $
    1,264,884
    
    
    $
    1,255,659Less: Goodwill
    
    
    270,097
    
    
    
    269,062Other identifiable intangible assets
    
    
    22,517
    
    
    
    26,805Total tangible shareholders equity
    
    $
    972,270
    
    
    $
    959,792
 FINANCIAL HIGHLIGHTS
    24




---



##### Table of Contents



RESULTS OF OPERATIONS
 Net Interest Revenue
  25




---



##### Table of Contents



Three months ended March 31,2010
    
    
    2009Average
    
    
    
    
    
    
    Yield/
    
    
    Average
    
    
    
    
    
    
    Yield/Balance
    
    
    Interest
    
    
    Rate
    
    
    Balance
    
    
    Interest
    
    
    Rate(Dollars in millions, yields on taxable equivalent basis)ASSETSLoans and leases (net of unearned
income) (1)(2)
    
    $
    9,767.1
    
    
    $
    127.8
    
    
    
    5.31
    %
    
    $
    9,695.5
    
    
    $
    130.1
    
    
    
    5.44
    %Loans held for sale
    
    
    42.8
    
    
    
    0.5
    
    
    
    4.80
    %
    
    
    178.2
    
    
    
    1.3
    
    
    
    2.90
    %Held-to-maturity securities:Taxable (3)
    
    
    851.5
    
    
    
    9.5
    
    
    
    4.54
    %
    
    
    1,146.8
    
    
    
    13.1
    
    
    
    4.65
    %Non-taxable (4)
    
    
    215.2
    
    
    
    3.8
    
    
    
    7.13
    %
    
    
    182.1
    
    
    
    3.2
    
    
    
    7.23
    %Available-for-sale securities:Taxable
    
    
    859.8
    
    
    
    8.4
    
    
    
    3.96
    %
    
    
    891.7
    
    
    
    9.0
    
    
    
    4.11
    %Non-taxable (5)
    
    
    72.3
    
    
    
    1.3
    
    
    
    7.16
    %
    
    
    73.8
    
    
    
    1.4
    
    
    
    7.46
    %Federal funds sold, securities
purchased under agreement to resell
and short-term investments
    
    
    170.7
    
    
    
    0.1
    
    
    
    0.24
    %
    
    
    19.1
    
    
    
    0.1
    
    
    
    1.51
    %Total interest earning
assets and revenue
    
    
    11,979.4
    
    
    
    151.4
    
    
    
    5.12
    %
    
    
    12,187.2
    
    
    
    158.2
    
    
    
    5.26
    %Other assets
    
    
    1,340.6
    
    
    
    
    
    
    
    
    
    
    
    1,277.5Less: allowance for credit losses
    
    
    (193.0
    )
    
    
    
    
    
    
    
    
    
    
    (139.8
    )Total
    
    $
    13,127.0
    
    
    
    
    
    
    
    
    
    
    $
    13,324.9LIABILITIES AND
SHAREHOLDERS EQUITYDeposits:Demand  interest bearing
    
    $
    4,568.1
    
    
    $
    9.4
    
    
    
    0.83
    %
    
    $
    4,090.8
    
    
    $
    12.2
    
    
    
    1.21
    %Savings
    
    
    748.3
    
    
    
    0.9
    
    
    
    0.48
    %
    
    
    697.7
    
    
    
    0.9
    
    
    
    0.54
    %Other time
    
    
    3,741.9
    
    
    
    21.5
    
    
    
    2.33
    %
    
    
    3,419.2
    
    
    
    25.8
    
    
    
    3.06
    %Federal funds purchased,securities
sold under agreement to repurchase,
short-term FHLB borrowings
and other short term borrowings
    
    
    564.2
    
    
    
    0.6
    
    
    
    0.42
    %
    
    
    1,588.2
    
    
    
    1.0
    
    
    
    0.24
    %Junior subordinated debt securities
    
    
    160.3
    
    
    
    2.9
    
    
    
    7.22
    %
    
    
    160.3
    
    
    
    3.0
    
    
    
    7.48
    %Long-term FHLB borrowings
    
    
    112.8
    
    
    
    1.5
    
    
    
    5.48
    %
    
    
    286.3
    
    
    
    2.8
    
    
    
    3.98
    %Total interest bearing
liabilities and expense
    
    
    9,895.6
    
    
    
    36.8
    
    
    
    1.51
    %
    
    
    10,242.5
    
    
    
    45.7
    
    
    
    1.81
    %Demand deposits 
noninterest bearing
    
    
    1,819.9
    
    
    
    
    
    
    
    
    
    
    
    1,700.8Other liabilities
    
    
    146.2
    
    
    
    
    
    
    
    
    
    
    
    142.6Total liabilities
    
    
    11,861.7
    
    
    
    
    
    
    
    
    
    
    
    12,085.9Shareholders equity
    
    
    1,265.4
    
    
    
    
    
    
    
    
    
    
    
    1,239.0Total
    
    $
    13,127.1
    
    
    
    
    
    
    
    
    
    
    $
    13,324.9Net interest revenue-FTE
    
    
    
    
    
    $
    114.6
    
    
    
    
    
    
    
    
    
    
    $
    112.5Net interest margin-FTE
    
    
    
    
    
    
    
    
    
    
    3.88
    %
    
    
    
    
    
    
    
    
    
    
    3.74
    %Net interest rate spread
    
    
    
    
    
    
    
    
    
    
    3.62
    %
    
    
    
    
    
    
    
    
    
    
    3.45
    %Interest bearing liabilities to
interest earning assets
    
    
    
    
    
    
    
    
    
    
    82.61
    %
    
    
    
    
    
    
    
    
    
    
    84.04
    %
 
 (1)
    
    Includes taxable equivalent adjustment to interest of approximately $0.8 million for both of the three months ended
March 31, 2010 and 2009, respectively, using an effective tax rate of 35%.(2)
    
    Non-accrual loans are included in Loans (net of unearned income).(3)
    
    Includes taxable equivalent adjustments to interest of approximately $0.1 million for both of the three months ended
March 31, 2010 and 2009, respectively, using an effective tax rate of 35%.(4)
    
    Includes taxable equivalent adjustments to interest of approximately $1.3 million and $1.1 million for the three months
ended March 31, 2010 and 2009, respectively, using an effective tax rate of 35%.(5)
    
    Includes taxable equivalent adjustment to interest of approximately $0.4 million and $0.5 million for the three months
ended March 31, 2010 and 2009, respectively, using an effective tax rate of 35%. 26




---



##### Table of Contents



Interest Rate Sensitivity
  27




---



##### Table of Contents



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
    
    $
    9,943
    
    
    $
    
    
    
    $
    
    
    
    $
    Federal funds sold and securities purchased
under agreement to resell
    
    
    120,000
    
    
    
    
    
    
    
    
    
    
    
    Held-to-maturity securities
    
    
    189,914
    
    
    
    256,403
    
    
    
    484,751
    
    
    
    288,915Available-for-sale and trading securities
    
    
    41,533
    
    
    
    65,127
    
    
    
    379,314
    
    
    
    405,246Loans and leases, net of unearned income
    
    
    4,987,168
    
    
    
    1,649,204
    
    
    
    2,836,360
    
    
    
    238,091Loans held for sale
    
    
    53,452
    
    
    
    346
    
    
    
    2,083
    
    
    
    24,432Total interest earning assets
    
    
    5,402,009
    
    
    
    1,971,080
    
    
    
    3,702,508
    
    
    
    956,684Interest bearing liabilities:Interest bearing demand deposits and savings
    
    
    5,357,331
    
    
    
    
    
    
    
    
    
    
    
    Other time deposits
    
    
    670,918
    
    
    
    1,795,220
    
    
    
    1,308,904
    
    
    
    1,209Federal funds purchased and securities
sold under agreement to repurchase,
short-term FHLB borrowings and other
short-term borrowings
    
    
    481,795
    
    
    
    1,500
    
    
    
    
    
    
    
    Long-term FHLB borrowings and junior
subordinated debt securities
    
    
    
    
    
    
    
    
    
    
    56,260
    
    
    
    216,812Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    88Total interest bearing liabilities
    
    
    6,510,044
    
    
    
    1,796,720
    
    
    
    1,365,164
    
    
    
    218,109Interest rate sensitivity gap
    
    $
    (1,108,035
    )
    
    $
    174,360
    
    
    $
    2,337,344
    
    
    $
    738,575Cumulative interest sensitivity gap
    
    $
    (1,108,035
    )
    
    $
    (933,675
    )
    
    $
    1,403,669
    
    
    $
    2,142,244
   Interest Rate Risk Management
  28




---



##### Table of Contents



Net Interest Income% Variance from Base Case ScenarioRate Shock
    
    March 31, 2010
    
    March 31, 2009+200 basis points
    
    
    -2.8
    %
    
    
    -5.8
    %-200 basis points
    
    
    n/a
    
    
    
    n/a
 Economic Value of Equity% Variance from Base Case ScenarioRate Shock
    
    March 31, 2010
    
    March 31, 2009+200 basis points
    
    
    -10.5
    %
    
    
    -9.9
    %-200 basis points
    
    
    n/a
    
    
    
    n/a
  Net Interest Income% Variance from Base Case ScenarioRate Ramp
    
    March 31, 2010
    
    March 31, 2009+200 basis points
    
    
    -3.1
    %
    
    
    -5.2
    %-200 basis points
    
    
    n/a
    
    
    
    n/a
 Provision for Credit Losses and Allowance for Credit Losses
    29




---



##### Table of Contents



30




---



##### Table of Contents



Three months endedMarch 31,2010
    
    
    2009(Dollars in thousands)Balance, beginning of period
    
    $
    176,043
    
    
    $
    132,793Loans and leases charged off:Commercial and industrial
    
    
    (2,169
    )
    
    
    (1,147
    )Real estateConsumer mortgages
    
    
    (4,598
    )
    
    
    (4,073
    )Home equity
    
    
    (1,683
    )
    
    
    (1,153
    )Agricultural
    
    
    (207
    )
    
    
    (37
    )Commercial and industrial-owner occupied
    
    
    (2,465
    )
    
    
    (836
    )Construction, acquisition and development
    
    
    (15,769
    )
    
    
    (4,377
    )Commercial
    
    
    (2,278
    )
    
    
    (560
    )Credit cards
    
    
    (1,160
    )
    
    
    (1,158
    )All other
    
    
    (1,050
    )
    
    
    (810
    )Total loans charged off
    
    
    (31,379
    )
    
    
    (14,151
    )Recoveries:Commercial and industrial
    
    
    63
    
    
    
    179Real estateConsumer mortgages
    
    
    64
    
    
    
    220Home equity
    
    
    52
    
    
    
    3Agricultural
    
    
    
    
    
    
    2Commercial and industrial-owner occupied
    
    
    7
    
    
    
    8Construction, acquisition and development
    
    
    56
    
    
    
    86Commercial
    
    
    12
    
    
    
    56Credit cards
    
    
    150
    
    
    
    138All other
    
    
    297
    
    
    
    353Total recoveries
    
    
    701
    
    
    
    1,045Net charge-offs
    
    
    (30,678
    )
    
    
    (13,106
    )Provision charged to operating expense
    
    
    43,519
    
    
    
    14,945Balance, end of period
    
    $
    188,884
    
    
    $
    134,632Average loans for period
    
    $
    9,767,088
    
    
    $
    9,695,475Ratios:Net charge-offs to average loans (annualized)
    
    
    1.26
    %
    
    
    0.54
    %Provision for credit losses to average
loans and leases, net of unearned (annualized)
    
    
    1.78
    %
    
    
    0.62
    %Allowance for credit losses to loans and
leases, net of unearned
    
    
    1.95
    %
    
    
    1.39
    %
  31




---



##### Table of Contents



March 31,
    
    
    December 31,2010
    
    
    2009
    
    
    2009Allowance
    
    
    % 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
    
    $
    21,872
    
    
    
    14.87
    %
    
    $
    18,785
    
    
    
    15.57
    %
    
    $
    21,154
    
    
    
    15.11
    %Real estateConsumer mortgages
    
    
    36,250
    
    
    
    20.88
    %
    
    
    30,523
    
    
    
    20.98
    %
    
    
    37,048
    
    
    
    20.53
    %Home equity
    
    
    6,641
    
    
    
    5.52
    %
    
    
    5,896
    
    
    
    5.35
    %
    
    
    7,218
    
    
    
    5.60
    %Agricultural
    
    
    3,992
    
    
    
    2.60
    %
    
    
    3,240
    
    
    
    2.46
    %
    
    
    4,192
    
    
    
    2.67
    %Commercial and
industrial-owner
occupied
    
    
    23,715
    
    
    
    14.62
    %
    
    
    20,072
    
    
    
    14.98
    %
    
    
    22,989
    
    
    
    14.76
    %Construction,
acquisition and
development
    
    
    53,706
    
    
    
    15.64
    %
    
    
    29,032
    
    
    
    17.43
    %
    
    
    46,193
    
    
    
    14.86
    %Commercial
    
    
    28,309
    
    
    
    18.06
    %
    
    
    18,439
    
    
    
    17.09
    %
    
    
    26,694
    
    
    
    18.39
    %Credit cards
    
    
    3,268
    
    
    
    1.05
    %
    
    
    1,473
    
    
    
    1.01
    %
    
    
    3,481
    
    
    
    1.10
    %All other
    
    
    11,131
    
    
    
    6.76
    %
    
    
    7,172
    
    
    
    5.13
    %
    
    
    7,074
    
    
    
    6.98
    %Total
    
    $
    188,884
    
    
    
    100.00
    %
    
    $
    134,632
    
    
    
    100.00
    %
    
    $
    176,043
    
    
    
    100.00
    %
 32




---



##### Table of Contents



Noninterest Revenue
  Three months endedMarch 31,2010
    
    
    2009
    
    

%
Change(Dollars in thousands)Mortgage lending
    
    $
    5,025
    
    
    $
    7,652
    
    
    
    (34.3
    )%Credit card, debit card and merchant fees
    
    
    8,810
    
    
    
    8,348
    
    
    
    5.5Service charges
    
    
    16,262
    
    
    
    16,755
    
    
    
    (2.9
    )Trust income
    
    
    2,587
    
    
    
    2,209
    
    
    
    17.1Securities gains, net
    
    
    1,297
    
    
    
    5
    
    
    
    N/MInsurance commissions
    
    
    21,668
    
    
    
    22,645
    
    
    
    (4.3
    )Annuity fees
    
    
    781
    
    
    
    1,350
    
    
    
    (42.1
    )Brokerage commissions and fees
    
    
    1,317
    
    
    
    978
    
    
    
    34.7Bank-owned life insurance
    
    
    1,669
    
    
    
    1,754
    
    
    
    (4.8
    )Other miscellaneous income
    
    
    3,916
    
    
    
    6,122
    
    
    
    (36.0
    )Total noninterest revenue
    
    $
    63,332
    
    
    $
    67,818
    
    
    
    (6.6
    )%
 
 N/M=Not meaningful    33




---



##### Table of Contents



Three months endedMarch 31,2010
    
    
    2009Amount
    
    
    Amount
    
    
    % Change(Dollars in thousands)Production revenue:Origination
    
    $
    3,426
    
    
    $
    8,521
    
    
    
    (59.8
    )%Servicing
    
    
    2,893
    
    
    
    2,579
    
    
    
    12.2Payoffs/Paydowns
    
    
    (1,302
    )
    
    
    (1,938
    )
    
    
    (32.8
    )Total
    
    
    5,017
    
    
    
    9,162
    
    
    
    (45.2
    )Market value adjustment
    
    
    8
    
    
    
    (1,510
    )
    
    NMMortgage lending revenue
    
    $
    5,025
    
    
    $
    7,652
    
    
    
    (34.3
    )(Dollars in millions)Origination volume
    
    $
    207
    
    
    $
    424
    
    
    
    (51.2
    )Mortgage loans serviced at period-end
    
    $
    3,451
    
    
    $
    3,133
    
    
    
    10.2
 
 NM=Not meaningful   34




---



##### Table of Contents



Noninterest Expense
  Three months endedMarch 31,2010
    
    
    2009
    
    

%
Change(Dollars in thousands)Salaries and employee
benefits
    
    $
    69,287
    
    
    $
    71,363
    
    
    
    (2.9
    )%Occupancy, net
    
    
    10,775
    
    
    
    9,999
    
    
    
    7.8Equipment
    
    
    5,739
    
    
    
    6,222
    
    
    
    (7.8
    )Deposit insurance
assessments
    
    
    4,250
    
    
    
    3,126
    
    
    
    36.0Advertising
    
    
    656
    
    
    
    965
    
    
    
    (32.0
    )Foreclosed property expense
    
    
    3,538
    
    
    
    2,302
    
    
    
    53.7Telecommunications
    
    
    2,200
    
    
    
    2,205
    
    
    
    (0.2
    )Public relations
    
    
    1,648
    
    
    
    1,547
    
    
    
    6.5Data processing
    
    
    1,470
    
    
    
    1,536
    
    
    
    (4.3
    )Computer software
    
    
    1,704
    
    
    
    1,811
    
    
    
    (5.9
    )Amortization of intangibles
    
    
    1,015
    
    
    
    1,360
    
    
    
    (25.4
    )Legal fees
    
    
    1,328
    
    
    
    1,058
    
    
    
    25.5Postage and shipping
    
    
    1,360
    
    
    
    1,259
    
    
    
    8.0Other miscellaneous expense
    
    
    15,513
    
    
    
    15,225
    
    
    
    1.9Total noninterest expense
    
    $
    120,483
    
    
    $
    119,978
    
    
    
    0.4
    %
  Income Tax
  FINANCIAL CONDITION
  Loans and Leases
  35




---



##### Table of Contents



March 31,
    
    
    December 31,2010
    
    
    2009
    
    
    2009(In thousands)Commercial and industrial
    
    $
    1,515,404
    
    
    $
    1,437,006
    
    
    $
    1,514,419Real estateConsumer mortgages
    
    
    2,014,085
    
    
    
    2,037,439
    
    
    
    2,017,067Home equity
    
    
    549,924
    
    
    
    519,528
    
    
    
    550,085Agricultural
    
    
    266,649
    
    
    
    238,466
    
    
    
    262,069Commercial and
industrial-owner occupied
    
    
    1,423,098
    
    
    
    1,455,422
    
    
    
    1,449,554Construction, acquisition
and development
    
    
    1,428,882
    
    
    
    1,692,526
    
    
    
    1,459,503Commercial
    
    
    1,809,660
    
    
    
    1,660,211
    
    
    
    1,806,766Credit cards
    
    
    101,464
    
    
    
    98,450
    
    
    
    108,086All other
    
    
    646,915
    
    
    
    620,739
    
    
    
    655,437Total
    
    $
    9,756,081
    
    
    $
    9,759,787
    
    
    $
    9,822,986
 Commercial and Industrial
 Real Estate  Consumer Mortgages 
 Real Estate  Home Equity 
 Real Estate  Agricultural 
 Real Estate  Commercial and Industrial-Owner Occupied 
 36




---



##### Table of Contents



Real Estate  Construction, Acquisition and Development 
 Real Estate  Commercial 
 Credit Cards 
 All Other 
  37




---



##### Table of Contents



March 31,
    
    
    December 31,2010
    
    
    2009
    
    
    2009(Dollars in thousands)Non-accrual loans and leases
    
    $
    199,637
    
    
    $
    38,936
    
    
    $
    144,013Loans 90 days or more past due, still
accruing
    
    
    20,452
    
    
    
    27,299
    
    
    
    36,301Restructured loans and leases, but accruing
    
    
    15,576
    
    
    
    7,581
    
    
    
    6,161Total NPLs
    
    
    235,665
    
    
    
    73,816
    
    
    
    186,475Other real estate owned
    
    
    59,269
    
    
    
    47,450
    
    
    
    59,265Total NPAs
    
    $
    294,934
    
    
    $
    121,266
    
    
    $
    245,740NPLs to net loans and leases
    
    
    2.43
    %
    
    
    0.76
    %
    
    
    1.91
    %NPAs to net loans and leases
    
    
    3.04
    %
    
    
    1.25
    %
    
    
    2.51
    %
     38




---



##### Table of Contents



90+ Days
    
    
    
    
    
    
    Restructured
    
    
    
    
    
    
    NPLs as aPast Due still
    
    
    Non-accruing
    
    
    Loans, still
    
    
    
    
    
    
    % ofLoans and leases, net of unearned
    
    Outstanding
    
    
    Accruing
    
    
    Loans
    
    
    accruing
    
    
    NPLs
    
    
    Outstanding(Dollars in thousands)Commercial and industrial
    
    $
    1,470,145
    
    
    $
    1,405
    
    
    $
    6,306
    
    
    $
    420
    
    
    $
    8,131
    
    
    
    0.6
    %Real estateConsumer mortgages
    
    
    2,014,085
    
    
    
    10,984
    
    
    
    24,047
    
    
    
    2,347
    
    
    
    37,378
    
    
    
    1.9Home equity
    
    
    549,924
    
    
    
    320
    
    
    
    761
    
    
    
    100
    
    
    
    1,181
    
    
    
    0.2Agricultural
    
    
    266,649
    
    
    
    199
    
    
    
    3,049
    
    
    
    651
    
    
    
    3,899
    
    
    
    1.5Commercial and
industrial-owner occupied
    
    
    1,423,098
    
    
    
    1,482
    
    
    
    15,083
    
    
    
    1,552
    
    
    
    18,117
    
    
    
    1.3Construction, acquisition and
development
    
    
    1,428,882
    
    
    
    3,339
    
    
    
    116,191
    
    
    
    3,234
    
    
    
    122,764
    
    
    
    8.6Commercial
    
    
    1,809,660
    
    
    
    1,671
    
    
    
    30,094
    
    
    
    3,875
    
    
    
    35,640
    
    
    
    2.0Credit cards
    
    
    101,464
    
    
    
    296
    
    
    
    1,072
    
    
    
    3,341
    
    
    
    4,709
    
    
    
    4.6All other
    
    
    646,915
    
    
    
    756
    
    
    
    3,034
    
    
    
    56
    
    
    
    3,846
    
    
    
    0.6Total
    
    $
    9,710,822
    
    
    $
    20,452
    
    
    $
    199,637
    
    
    $
    15,576
    
    
    $
    235,665
    
    
    
    2.4
    %
  90+ Days
    
    
    
    
    
    
    Restructured
    
    
    
    
    
    
    NPLs as aReal Estate Construction,
    
    
    
    
    
    Past Due still
    
    
    Non-accruing
    
    
    Loans, still
    
    
    
    
    
    
    % ofAcquisition and Development
    
    Outstanding
    
    
    Accruing
    
    
    Loans
    
    
    accruing
    
    
    NPLs
    
    
    Outstanding(Dollars in thousands)Multi-family construction
    
    $
    12,738
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    
    %Condominiums
    
    
    15,860
    
    
    
    
    
    
    
    9,071
    
    
    
    
    
    
    
    9,071
    
    
    
    57.2One-to-four family construction
    
    
    242,209
    
    
    
    748
    
    
    
    4,223
    
    
    
    
    
    
    
    4,971
    
    
    
    2.1Recreation and all other loans
    
    
    39,938
    
    
    
    146
    
    
    
    
    
    
    
    
    
    
    
    146
    
    
    
    0.4Commercial construction
    
    
    236,111
    
    
    
    16
    
    
    
    12,650
    
    
    
    
    
    
    
    12,666
    
    
    
    5.4Commercial acquisition and
development
    
    
    280,630
    
    
    
    678
    
    
    
    463
    
    
    
    
    
    
    
    1,141
    
    
    
    0.4Residential acquisition and
development
    
    
    601,396
    
    
    
    1,751
    
    
    
    89,783
    
    
    
    3,234
    
    
    
    94,768
    
    
    
    15.8Total
    
    $
    1,428,882
    
    
    $
    3,339
    
    
    $
    116,191
    
    
    $
    3,234
    
    
    $
    122,764
    
    
    
    8.6
    %
 39




---



##### Table of Contents



Securities
   Amortized Cost
    
    
    Estimated Fair ValueAmount
    
    
    %
    
    
    Amount
    
    
    %(Dollars in thousands)Available-for-sale Securities:Aaa
    
    $
    752,249
    
    
    
    86.9
    %
    
    $
    776,271
    
    
    
    87.10
    %Aa1 to Aa3
    
    
    40,821
    
    
    
    4.7
    %
    
    
    40,947
    
    
    
    4.59
    %A1 to A3
    
    
    6,002
    
    
    
    0.7
    %
    
    
    6,118
    
    
    
    0.69
    %Baa1
    
    
    1,210
    
    
    
    0.1
    %
    
    
    1,215
    
    
    
    0.14
    %Caa1
    
    
    66
    
    
    
    
    
    
    
    131
    
    
    
    0.01
    %C
    
    
    1,449
    
    
    
    0.2
    %
    
    
    1,449
    
    
    
    0.16
    %Not rated (1)
    
    
    63,564
    
    
    
    7.3
    %
    
    
    65,090
    
    
    
    7.30
    %Total
    
    $
    865,361
    
    
    
    100.0
    %
    
    $
    891,221
    
    
    
    100.00
    %Held-to-maturity Securities:Aaa
    
    $
    989,140
    
    
    
    81.08
    %
    
    $
    1,018,721
    
    
    
    83.16
    %Aa1 to Aa3
    
    
    56,768
    
    
    
    4.65
    %
    
    
    38,385
    
    
    
    3.13
    %A1 to A3
    
    
    39,278
    
    
    
    3.22
    %
    
    
    36,034
    
    
    
    2.94
    %Baa1 to Baa3
    
    
    11,944
    
    
    
    0.98
    %
    
    
    8,638
    
    
    
    0.71
    %Not rated (1)
    
    
    122,853
    
    
    
    10.07
    %
    
    
    123,207
    
    
    
    10.06
    %Total
    
    $
    1,219,983
    
    
    
    100.00
    %
    
    $
    1,224,985
    
    
    
    100.00
    %
 
 (1)
    
    Not rated securities primarily consist of Mississippi and Arkansas municipal bonds. Deposits and Other Interest-Bearing Liabilities
  40




---



##### Table of Contents



March 31,
    
    
    December 31,2010
    
    
    2009
    
    

% Change(Dollars in millions)Noninterest bearing
demand
    
    $
    1,861
    
    
    $
    1,902
    
    
    
    (2.2
    )%Interest bearing demand
    
    
    4,589
    
    
    
    4,324
    
    
    
    6.1Savings
    
    
    768
    
    
    
    725
    
    
    
    5.9Other time
    
    
    3,776
    
    
    
    3,727
    
    
    
    1.3Total deposits
    
    $
    10,994
    
    
    $
    10,678
    
    
    
    3.0
    %
 Liquidity and Capital Resources
    Off-Balance Sheet Arrangements
  41




---



##### Table of Contents



Regulatory Requirements for Capital
  March 31, 2010
    
    December 31, 2009Amount
    
    Ratio
    
    Amount
    
    Ratio(Dollars in thousands)BancorpSouth, Inc.Tier I capital (to risk-weighted assets)
    
    $
    1,134,779
    
    
    
    11.12
    %
    
    $
    1,143,019
    
    
    
    11.17
    %Total capital (to risk-weighted assets)
    
    
    1,263,156
    
    
    
    12.38
    
    
    
    1,271,634
    
    
    
    12.42Tier I leverage capital (to average
assets)
    
    
    1,134,779
    
    
    
    8.86
    
    
    
    1,143,019
    
    
    
    8.95
  March 31, 2010
    
    December 31, 2009Amount
    
    Ratio
    
    Amount
    
    Ratio(Dollars in thousands)BancorpSouth BankTier I capital (to risk-weighted assets)
    
    $
    1,111,047
    
    
    
    10.90
    %
    
    $
    1,119,612
    
    
    
    10.95
    %Total capital (to risk-weighted assets)
    
    
    1,239,424
    
    
    
    12.16
    
    
    
    1,248,227
    
    
    
    12.21Tier I leverage capital (to average
assets)
    
    
    1,111,047
    
    
    
    8.67
    
    
    
    1,119,612
    
    
    
    8.79
  Uses of Capital
   42




---



##### Table of Contents



Certain Litigation Contingencies
   CRITICAL ACCOUNTING POLICIES
  
 ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
  
 ITEM 4.
    
    CONTROLS AND PROCEDURES.
 Changes in Internal Control over Financial Reporting
  
    
    The creation of a real estate risk management group to oversee full compliance with
laws, regulations and U.S. GAAP related to lending activities;
 
    
    Testing of significant loans, with a focus on higher risk loans, for impairment on a
quarterly basis;
 
    
    Reporting by management to the Board of Directors on a quarterly basis regarding
significant problem loans and potentially problematic portfolios; and
 
    
    The commitment of additional resources to the Banks appraisal group, as necessary, for
compliance with appraisal policies and procedures.
  43




---



##### Table of Contents



Evaluation of Disclosure Controls and Procedures
  
 PART II
OTHER INFORMATION
 
 ITEM 1A.
    
    RISK FACTORS.
  
 ITEM 6.
    
    EXHIBITS.
 (3)
    
    (a)
    
    Restated Articles of Incorporation, as amended. (1)(b)
    
    Bylaws, as amended and restated. (2)(c)
    
    Amendment No. 1 to Amended and Restated Bylaws. (3)(d)
    
    Amendment No. 2 to Amended and Restated Bylaws. (4)(e)
    
    Amendment No. 3 to Amended and Restated Bylaws. (4)(4)
    
    (a)
    
    Specimen Common Stock Certificate. (5)(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. (6)(c)
    
    First Amendment to Rights Agreement, dated as of March 28, 2001. (7)(d)
    
    Amended and Restated Certificate of Trust of BancorpSouth Capital Trust I. (8)(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. (9)(f)
    
    Junior Subordinated Indenture, dated as of January 28, 2002, between
BancorpSouth, Inc. and The Bank of New York. (9)(g)
    
    Guarantee Agreement, dated as of January 28, 2002, between BancorpSouth, Inc.
and The Bank of New York. (9)(h)
    
    Junior Subordinated Debt Security Specimen. (9)(i)
    
    Trust Preferred Security Certificate for BancorpSouth Capital Trust I. (9)
 44




---



##### Table of Contents



(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.(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 Quarterly Report on Form 10-Q for the three months ended
June 30, 2009 (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, 1998 (file number 1-12991) and incorporated by reference thereto.(3)
    
    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.(4)
    
    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.(5)
    
    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.(6)
    
    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.(7)
    
    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.(8)
    
    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.(9)
    
    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.*
    
    Filed herewith. 45




---



##### Table of Contents



SIGNATURES
  BancorpSouth, Inc.(Registrant)DATE: May 4, 2010
    
    /s/ William L. PraterWilliam L. PraterTreasurer andChief Financial Officer
 46




---



##### Table of Contents



INDEX TO EXHIBITS
 Exhibit No.
    
    Description(3)
    
    (a)
    
    Restated Articles of Incorporation, as amended. (1)(b)
    
    Bylaws, as amended and restated. (2)(c)
    
    Amendment No. 1 to Amended and Restated Bylaws. (3)(d)
    
    Amendment No. 2 to Amended and Restated Bylaws. (4)(e)
    
    Amendment No. 3 to Amended and Restated Bylaws. (4)(4)
    
    (a)
    
    Specimen Common Stock Certificate. (5)(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. (6)(c)
    
    First Amendment to Rights Agreement, dated as of March 28, 2001. (7)(d)
    
    Amended and Restated Certificate of Trust of BancorpSouth Capital Trust I. (8)(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. (9)(f)
    
    Junior Subordinated Indenture, dated as of January 28, 2002, between
BancorpSouth, Inc. and The Bank of New York. (9)(g)
    
    Guarantee Agreement, dated as of January 28, 2002, between BancorpSouth, Inc.
and The Bank of New York. (9)(h)
    
    Junior Subordinated Debt Security Specimen. (9)(i)
    
    Trust Preferred Security Certificate for BancorpSouth Capital Trust I. (9)(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.(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 Quarterly Report on Form 10-Q for the three months ended
June 30, 2009 (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, 1998 (file number 1-12991) and incorporated by reference thereto.(3)
    
    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.(4)
    
    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.(5)
    
    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.(6)
    
    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.(7)
    
    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. 47




---



##### Table of Contents



(8)
    
    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.(9)
    
    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.*
    
    Filed herewith. 48