BancorpSouth Announces Earnings of $0.26 per Diluted Share for Third Quarter 2009

TUPELO, Miss., Oct. 22 /PRNewswire-FirstCall/ -- BancorpSouth, Inc. (NYSE: BXS) today announced financial results for the quarter ended September 30, 2009.

Highlights of the third quarter include:

-- Solid profits with net income of $21.5 million, or $0.26 per diluted share. -- Incremental growth in net interest revenue on a comparable and sequential quarter basis to a record level. -- Continued net interest margin stability with an increase to 3.77 percent from 3.67 percent for the third quarter of 2008 and 3.75 percent for the second quarter of 2009. -- Annualized net charge-offs of 0.68 percent of average loans and leases and non-performing loans and leases of 1.14 percent of total loans and leases. -- Continued emphasis on noninterest expense management programs provides positive results.

-- Continued growth in capital levels with common equity to assets of 9.69 percent at September 30, 2009.

Summary Results

BancorpSouth's net income for the third quarter of 2009 was $21.5 million, or $0.26 per diluted share, compared with $28.3 million, or $0.34 per diluted share, for the third quarter of 2008.

Aubrey Patterson, Chairman and Chief Executive Officer of BancorpSouth, remarked, "BancorpSouth's third quarter results reflect a strong and stable net interest margin, well controlled expenses and solid operating performance in an otherwise difficult operating environment. The sustained profitable performance of our Company throughout this recent economic downturn continues to validate our deliberate and conservative long-term approach in managing through this business cycle. With a strong capital base, high quality assets and solid banking franchise, we remain confident that we are well positioned to manage through this period and continue operating a business plan that will result in achieving our long-term objectives.

"The prolonged economic downturn has put pressure on the financial services industry and BancorpSouth has experienced some of that pressure. During the third quarter, non-performing loans and leases increased $14.0 million to $111.6 million. This increase was primarily attributable to one loan totaling $10.7 million that was placed on non-accrual during the third quarter. This loan, which is classified as a Shared National Credit, is part of our portfolio of $140 million in loans outstanding where BancorpSouth acts as a participant with other banks.

"Our provision for credit losses was $22.5 million for the third quarter, while net charge-offs in the period were $16.5 million. At quarter end, our allowance for credit losses was 1.48 percent of net loans and leases. We continue to focus on early identification and decisive resolution of any credit issues.

"For the third quarter of 2009, the Company's financial results also included the impact of a $4.1 million decrease in the value of our mortgage servicing rights compared with a $1.0 million decrease in value for the third quarter of 2008 and a $2.9 million increase in value for the second quarter of 2009. In addition, comparable quarter results continued to be affected by the major increase in the FDIC insurance premiums initiated in the first quarter of 2009, which totaled $2.7 million more for the third quarter of 2009 than the third quarter last year."

Net Interest Revenue

Net interest revenue increased to $111.7 million for the third quarter of 2009, up 1.9 percent from $109.6 million for the third quarter of 2008 and 0.7 percent from $110.9 million for the second quarter of 2009. The fully taxable equivalent net interest margin was 3.77 percent for the third quarter of 2009, compared with 3.67 percent for the third quarter of 2008 and 3.75 percent for the second quarter of 2009.

Patterson said, "For the third quarter of 2009, we again achieved incremental growth in net interest revenue. By producing a comparable quarter and sequential quarter increase in our net interest margin, we have sustained a consistent and relatively high net interest margin thus far through the economic downturn. Over the last year, our net interest margin has ranged from 3.74 percent to 3.77 percent.

"While asset growth opportunities have been limited by the weak economy, we have benefitted from good growth in deposits, particularly demand deposits. We have also lengthened the average maturity of our time deposits from 10 to 13 months over the last year. In addition, over the last year, average short-term borrowings have declined from $1.8 billion to $1.1 billion. These funding strategies are intended to limit the negative impact to our net interest margin should interest rates rise."

Asset, Deposit and Loan Activity

Total assets at September 30, 2009 were $13.3 billion, virtually unchanged from the end of the third quarter last year. Total deposits of $10.3 billion at September 30, 2009 increased 6.3 percent from $9.7 billion at September 30, 2008. Loans and leases, net of unearned income, increased 1.7 percent to $9.8 billion at September 30, 2009 from $9.6 billion at September 30, 2008.

"While growth opportunities have been very limited, we continue to concentrate on positioning the balance sheet to take advantage of opportunities that become available," commented Patterson. "We are confident that our diversified geographic footprint positions us for stronger loan growth in an improving economic environment, but we will not relax our lending policies for the sake of growth in the current environment. We will continue our efforts to grow lower-cost deposits by expanding our core customer base and will evaluate strategic opportunities to expand and strengthen our franchise."

Provision for Credit Losses and Allowance for Credit Losses

For the third quarter of 2009, the provision for credit losses was $22.5 million compared with $16.3 million for the third quarter of 2008 and $17.6 million for the second quarter of 2009. Annualized net charge-offs were 0.68 percent of average loans and leases for the third quarter of 2009 compared with 0.45 percent for the third quarter of 2008 and 0.55 percent for the second quarter of 2009.

Non-performing loans and leases increased to $111.6 million, or 1.14 percent of net loans and leases, at September 30, 2009 from $65.2 million, or 0.68 percent of net loans and leases, at September 30, 2008 and from $97.7 million, or 1.00 percent of net loans and leases, at June 30, 2009. The allowance for credit losses increased to 1.48 percent of net loans and leases at September 30, 2009 compared with 1.35 percent at September 30, 2008 and 1.42 percent at June 30, 2009.

Patterson added, "As addressed earlier, the growth in non-performing loans was primarily driven by one larger credit that was placed on non-accrual during the quarter, while our loan portfolio as a whole continued to perform well given the length and severity of the recent recession. While we recognize that, the longer this period of economic weakness persists, troubled borrowers could find it increasingly difficult to comply with repayment terms, we are confident that our process to identify credit problems early will enable us to keep those problems manageable. All our loans were originated within our markets and our conservative lending and credit policies are designed to enhance our ability to work with each borrower to minimize risk of loss."

Noninterest Revenue

For the third quarter of 2009, noninterest revenue decreased 6.1 percent to $59.5 million from $63.4 million for the third quarter of 2008. This decrease reflected, in part, a $4.1 million decline in the value of the mortgage servicing rights (MSR) for the third quarter of 2009 compared with a $1.0 million decline for the third quarter of 2008.

Patterson commented, "We are pleased with the strong growth in our mortgage origination business, with mortgage lending revenue, excluding the MSR valuation adjustment, of $6.1 million, a 43.1 percent increase from the third quarter last year. Comparable quarter noninterest revenue also benefitted from the second consecutive quarterly increase in credit and debit card fee income resulting primarily from higher transaction volume. Although service charges have not recovered to the levels achieved for the third quarter of 2008, they have now increased on a sequential quarter basis for the second consecutive quarter. Because of insurance market conditions that remain soft, our insurance commission revenue declined 7.6 percent compared with record insurance commission revenue for the third quarter of 2008."

Noninterest Expense

Noninterest expense was $119.7 million for the third quarter of 2009, an increase of 3.2 percent from $116.1 million for the third quarter of 2008. These results again reflected the substantial increase in BancorpSouth's FDIC premium initiated in the first quarter of 2009. Although the Company continues to be assessed at the FDIC's lowest rate because of its "well capitalized" status under federal regulations, the FDIC premium for the third quarter of 2009 increased $2.7 million over the third quarter of 2008. The growth in noninterest expense from the third quarter of 2008 also related to the opening of 12 full-service branch bank offices during the 12 month period ended September 30, 2009. Noninterest expense for the second quarter of 2009 was $123.3 million, which included the impact of a special FDIC assessment totaling $6.1 million that was in addition to the recurring FDIC premium.

Capital Management

BancorpSouth's commitment to a strong capital base is one of its fundamental operating principles. The Company's capital base was further strengthened during the third quarter of 2009, as the ratio of shareholders' equity to assets improved on a comparable quarter basis for the 13th consecutive quarter, increasing to 9.69 percent at the end of the third quarter from 9.34 percent at the end of the third quarter of 2008 and 9.59 percent at the end of the second quarter of 2009. The ratio of tangible equity to assets also increased to 7.64 percent from 7.25 percent at the end of the third quarter of 2008 and 7.53 percent at the end of the second quarter of 2009. BancorpSouth remains a "well capitalized" financial holding company, as defined by federal regulations.

Summary

Patterson concluded, "BancorpSouth's third quarter operating performance highlighted many of the challenges we continue to face in an extended recessionary environment, as well as many of the strengths that have enabled us to consistently outperform our peers throughout the economic downturn. The fundamental basis of these strengths is our conservative operating philosophy that we believe best positions BancorpSouth to achieve long-term growth and increased shareholder value in an industry subject to interest rate and economic cycles.

"Because of our consistent adherence to this philosophy, BancorpSouth is not only well prepared to manage through the challenges presented in today's market, but we are well positioned to generate additional growth in an improving economic environment. We have continued to prepare for organic growth by engaging existing customers with new products and services, winning new customers in existing markets and expanding our geographic footprint into attractive new markets. Through the consistent strengthening of our capital structure, we have also prepared to leverage opportunities for growth through strategic acquisitions.

"As a result of the Company's strong market position and its performance throughout the economic downturn, we remain confident of BancorpSouth's long-term growth potential. We have neither been, nor will we be, complacent about the impact of the current economic environment on our customers, our credit quality, our ability to produce revenue growth and manage expenses or our shareholder value. However, through the long-term orientation of our conservative business model, we have consistently prepared BancorpSouth to deal with the challenges of the full economic cycle, and we expect to emerge from the current downturn in a stronger competitive position than when the downturn began."

Conference Call

BancorpSouth will conduct a conference call to discuss its third quarter 2009 results tomorrow, October 23, 2009, at 10:00 a.m. (Central Time). Investors may listen via the Internet by accessing BancorpSouth's website at http://www.bancorpsouth.com . A replay of the conference call will be available at BancorpSouth's website for at least two weeks following the call.

Forward-Looking Statements

Certain statements contained in this news release may not be based on historical facts and are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may be identified by their reference to a future period or periods or by the use of forward-looking terminology such as "anticipate," "believe," "estimate," "expect," "may," "might," "will," "would," "could" or "intend." These forward-looking statements include, without limitation, statements relating to our ability to achieve our long-term objectives, the impact of rising interest rates on our net interest margin, our lending policies, our efforts to grow lower-cost deposits, strategic opportunities to expand and strengthen our franchise, our process to identify credit problems, our conservative operating philosophy, the impact of the current economic environment on our customers and our competitive position.

We caution you not to place undue reliance on the forward-looking statements contained in this news release in that actual results could differ materially from those indicated in such forward-looking statements because of a variety of factors. These factors may include, but are not limited to, changes in general business or economic conditions or government fiscal and monetary policies, volatility and disruption in national and international financial markets, fluctuations in prevailing interest rates and the ability of BancorpSouth to manage its assets and liabilities to limit exposure to changing interest rates, the ability of BancorpSouth to increase noninterest revenue and expand noninterest revenue business, the ability of BancorpSouth to maintain credit quality, changes in laws and regulations affecting financial service companies in general, the ability of BancorpSouth to compete with other financial services companies, the ability of BancorpSouth to provide and market competitive services and products, changes in BancorpSouth's operating or expansion strategy, BancorpSouth's business model, geographic concentration of BancorpSouth's assets, the ability of BancorpSouth to manage its growth and effectively serve an expanding customer and market base, the ability of BancorpSouth to achieve profitable growth and increase shareholder value, the ability of BancorpSouth to attract, train and retain qualified personnel, the ability of BancorpSouth to identify, close and effectively integrate potential acquisitions, the ability of BancorpSouth to expand geographically and enter growing markets, changes in consumer preferences, other factors generally understood to affect the financial results of financial services companies, and other factors described from time to time in BancorpSouth's filings with the Securities and Exchange Commission. We undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.

BancorpSouth, Inc. is a financial holding company headquartered in Tupelo, Mississippi, with $13.3 billion in assets. BancorpSouth Bank, a wholly-owned subsidiary of BancorpSouth, Inc., operates approximately 314 commercial banking, mortgage, insurance, trust and broker/dealer locations in Alabama, Arkansas, Florida, Louisiana, Mississippi, Missouri, Tennessee and Texas. BancorpSouth Bank also operates an insurance location in Illinois.

BancorpSouth, Inc. Selected Financial Data ----------------------- Three Months Ended Nine Months Ended September 30, September 30, ------------- ------------- 2009 2008 2009 2008 ---- ---- ---- ---- (Dollars in thousands, except per share amounts) Earnings Summary: Net interest revenue $111,736 $109,602 $332,552 $329,515 Provision for credit losses 22,514 16,306 55,053 38,354 Noninterest revenue 59,549 63,433 205,581 202,930 Noninterest expense 119,746 116,059 361,466 341,593 ------- ------- ------- ------- Income before income taxes 29,025 40,670 121,614 152,498 Income tax provision 7,494 12,325 36,739 48,883 ----- ------ ------ ------ Net income $21,531 $28,345 $84,875 $103,615 ======= ======= ======= ======== Earning per share: Basic $0.26 $0.34 $1.02 $1.26 ===== ===== ===== ===== Diluted $0.26 $0.34 $1.02 $1.25 ===== ===== ===== =====

Balance sheet data at September 30: Total assets $13,271,873 $13,300,728 Total earning assets 12,094,937 12,073,837 Loans and leases, net of unearned income 9,757,944 9,592,412 Allowance for credit losses 144,791 129,147 Total deposits 10,297,034 9,684,800 Common shareholders' equity 1,286,218 1,242,719 Book value per share 15.41 14.96

Average balance sheet data: Total assets $13,167,057 $13,304,939 $13,250,329 $13,174,345 Total earning assets 12,027,909 12,132,130 12,116,158 12,012,791 Loans and leases, net of unearned interest 9,750,159 9,529,731 9,729,050 9,371,480 Total deposits 10,200,211 9,659,246 10,057,028 9,873,058 Common shareholders' equity 1,265,099 1,231,350 1,251,769 1,219,170

Non-performing assets at September 30: Non-accrual loans and leases $82,732 $30,642 Loans and leases 90+ days past due, still accruing 20,699 31,866 Restructured loans and leases, still accruing 8,205 2,666 Other real estate owned 62,072 32,479 ------ ------ Total non-performing assets 173,708 97,653

Net charge-offs as a percentage of average loans (annualized) 0.68% 0.45% 0.59% 0.35%

Performance ratios (annualized): Return on average assets 0.65% 0.85% 0.86% 1.05% Return on common equity 6.75% 9.16% 9.07% 11.35%

Net interest margin 3.77% 3.67% 3.75% 3.75%

Average shares outstanding - basic 83,368,580 82,560,724 83,260,911 82,420,266 Average shares outstanding - diluted 83,512,826 82,765,428 83,398,142 82,645,153

BancorpSouth, Inc. Consolidated Balance Sheet (Unaudited)

September 30, % 2009 2008 Change ---- ---- ------ (Dollars in thousands) Assets ------ Cash and due from banks $189,103 $246,687 (23.34%) Interest bearing deposits with other banks 43,067 15,730 173.79% Held-to-maturity securities, at amortized cost 1,180,716 1,350,396 (12.57%) Available-for-sale securities, at fair value 958,158 919,468 4.21% Federal funds sold and securities purchased under agreement to resell 75,000 - N/A Loans and leases 9,803,235 9,641,497 1.68% Less: Unearned income 45,291 49,085 (7.73%) Allowance for credit losses 144,791 129,147 12.11% ------- ------- Net loans and leases 9,613,153 9,463,265 1.58% Loans held for sale 80,053 195,830 (59.12%) Premises and equipment, net 346,931 345,235 0.49% Accrued interest receivable 74,589 85,968 (13.24%) Goodwill 270,097 271,017 (0.34%) Other assets 441,006 407,132 8.32% ------- ------- Total Assets $13,271,873 13,300,728 (0.22%) =========== ========== Liabilities ----------- Deposits: Demand: Noninterest bearing $1,769,432 1,694,303 4.43% Interest bearing 4,055,395 3,771,265 7.53% Savings 712,446 693,034 2.80% Other time 3,759,761 3,526,198 6.62% --------- --------- Total deposits 10,297,034 9,684,800 6.32% Federal funds purchased and securities sold under agreement to repurchase 816,374 1,079,088 (24.35%) Short-term Federal Home Loan Bank borrowings and other short-term borrowing 200,000 625,000 (68.00%) Accrued interest payable 24,243 24,846 (2.43%) Junior subordinated debt securities 160,312 160,312 0.00% Long-term Federal Home Loan Bank borrowings 286,281 288,861 (0.89%) Other liabilities 201,411 195,102 3.23% ------- ------- Total Liabilities 11,985,655 12,058,009 (0.60%) Shareholders' Equity -------------------- Common stock 208,615 207,714 0.43% Capital surplus 222,135 216,394 2.65% Accumulated other comprehensive income (loss) (18,568) (8,746) 112.30% Retained earnings 874,036 827,357 5.64% ------- ------- Total Shareholders' Equity 1,286,218 1,242,719 3.50% --------- --------- Total Liabilities & Shareholders' Equity $13,271,873 $13,300,728 (0.22%) =========== ===========

BancorpSouth, Inc. Consolidated Condensed Statements of Income (Dollars in thousands, except per share data) (Unaudited)

Quarter Ended ------------- Sep-09 Jun-09 Mar-09 Dec-08 Sep-08 ------ ------ ------ ------ ------ INTEREST REVENUE: Loans and leases $129,455 $129,263 $129,209 $139,099 $144,393 Deposits with other banks 20 22 70 111 172 Federal funds sold and securities purchased under agreement to resell 27 3 1 3 218 Held-to-maturity securities: Taxable 11,690 12,108 13,031 13,625 14,063 Tax-exempt 2,193 2,155 2,111 2,053 1,959 Available-for-sale securities: Taxable 8,592 8,721 9,038 8,693 9,025 Tax-exempt 812 826 883 867 874 Loans held for sale 698 1,215 1,275 2,117 1,920 --- ----- ----- ----- ----- Total interest revenue 153,487 154,313 155,618 166,568 172,624 ------- ------- ------- ------- -------

INTEREST EXPENSE: Interest bearing demand 9,038 9,738 12,248 15,924 14,214 Savings 937 927 936 1,080 1,366 Other time 25,534 26,496 25,833 28,293 33,660 Federal funds purchased and securities sold under agreement to repurchase 331 421 572 2,175 4,308 FHLB borrowings 2,877 2,885 2,823 4,537 6,277 Junior subordinated debt 2,884 2,928 2,955 3,162 3,064 Other 150 (22) 375 76 133 --- --- --- -- --- Total interest expense 41,751 43,373 45,742 55,247 63,022 ------ ------ ------ ------ ------

Net interest revenue 111,736 110,940 109,876 111,321 109,602 Provision for credit losses 22,514 17,594 14,945 17,822 16,306 ------ ------ ------ ------ ------ Net interest revenue, after provision for credit losses 89,222 93,346 94,931 93,499 93,296 ------ ------ ------ ------ ------

NONINTEREST REVENUE: Mortgage lending 2,012 13,959 7,652 (12,174) 3,270 Credit card, debit card and merchant fees 8,902 9,111 8,348 8,409 8,512 Service charges 16,313 15,642 14,085 16,915 17,687 Trust income 2,435 2,040 2,209 2,328 2,507 Security gains (losses), net - 42 5 (6,226) 100 Insurance commissions 20,134 20,575 22,645 18,752 21,779 Other 9,753 18,370 11,349 11,446 9,578 ----- ------ ------ ------ ----- Total noninterest revenue 59,549 79,739 66,293 39,450 63,433 ------ ------ ------ ------ ------

NONINTEREST EXPENSES: Salaries and employee benefits 70,353 70,092 71,363 64,395 68,865 Occupancy, net of rental income 10,720 10,492 9,999 10,307 10,340 Equipment 5,853 5,855 6,222 6,319 6,214 Deposit insurance assessments 3,402 9,358 3,126 1,444 717 Other 29,418 27,470 27,743 28,628 29,923 ------ ------ ------ ------ ------ Total noninterest expenses 119,746 123,267 118,453 111,093 116,059 ------- ------- ------- ------- ------- Income before income taxes 29,025 49,818 42,771 21,856 40,670 Income tax expense 7,494 15,951 13,294 5,060 12,325 ----- ------ ------ ----- ------ Net income $21,531 $33,867 $29,477 $16,796 $28,345 ======= ======= ======= ======= =======

Net income per share: Basic $0.26 $0.41 $0.35 $0.20 $0.34 ===== ===== ===== ===== ===== Diluted $0.26 $0.41 $0.35 $0.20 $0.34 ===== ===== ===== ===== =====

Year To Date ------------ Sep-09 Sep-08 ------ ------ INTEREST REVENUE: Loans and leases $387,927 $450,866 Deposits with other banks 112 573 Federal funds sold and securities purchased under agreement to resell 31 285 Held-to-maturity securities: Taxable 36,829 45,054 Tax-exempt 6,459 6,059 Available-for-sale securities: Taxable 26,351 27,120 Tax-exempt 2,521 3,338 Loans held for sale 3,188 5,550 ----- ----- Total interest revenue 463,418 538,845 ------- -------

INTEREST EXPENSE: Interest bearing demand 31,024 44,409 Savings 2,800 4,200 Other time 77,863 120,298 Federal funds purchased and securities sold under agreement to repurchase 1,324 12,824 FHLB borrowings 8,585 17,921 Junior subordinated debt 8,767 9,309 Other 503 369 --- --- Total interest expense 130,866 209,330 ------- -------

Net interest revenue 332,552 329,515 Provision for credit losses 55,053 38,354 ------ ------ Net interest revenue, after provision for credit losses 277,499 291,161 ------- -------

NONINTEREST REVENUE: Mortgage lending 23,623 14,320 Credit card, debit card and merchant fees 26,361 25,334 Service charges 46,040 50,619 Trust income 6,684 7,002 Security gains (losses), net 47 377 Insurance commissions 63,354 67,909 Other 39,472 37,369 ------ ------ Total noninterest revenue 205,581 202,930 ------- -------

NONINTEREST EXPENSES: Salaries and employee benefits 211,808 207,161 Occupancy, net of rental income 31,211 29,539 Equipment 17,930 18,892 Deposit insurance assessments 15,886 1,408 Other 84,631 84,593 ------ ------ Total noninterest expenses 361,466 341,593 ------- ------- Income before income taxes 121,614 152,498 Income tax expense 36,739 48,883 ------ ------ Net income $84,875 $103,615 ======= ========

Net income per share: Basic $1.02 $1.26 ===== ===== Diluted $1.02 $1.25 ===== =====

BancorpSouth, Inc. Selected Loan Data (Dollars in thousands) (Unaudited)

Quarter Ended ------------- Sep-09 Jun-09 Mar-09 Dec-08 Sep-08 ------ ------ ------ ------ ------ LOAN AND LEASE PORTFOLIO: Commercial and industrial $1,442,344 $1,441,718 $1,390,042 $1,417,499 $1,401,177 Real estate Consumer mortgages 2,046,433 2,054,666 2,037,439 2,096,568 2,108,991 Home equity 540,875 532,337 519,528 511,480 500,489 Agricultural 254,647 242,034 238,466 234,024 236,647 Commercial and industrial-owner occupied 1,432,859 1,394,852 1,455,422 1,465,027 1,489,215 Construction, acquisition and development 1,533,622 1,652,052 1,692,526 1,689,719 1,671,693 Commercial 1,770,066 1,719,044 1,660,211 1,568,956 1,489,548 Credit cards 103,208 101,844 98,450 93,650 90,112 All other 633,890 622,853 620,739 614,354 604,540 ------- ------- ------- ------- ------- Total loans $9,757,944 $9,761,400 $9,712,823 $9,691,277 $9,592,412 ---------- ---------- ---------- ---------- ----------

ALLOWANCE FOR CREDIT LOSSES: Balance, beginning of period $138,747 $134,632 $132,793 $129,147 $123,478

Loans and leases charged off: Commercial and industrial (3,913) (1,070) (1,147) (1,003) (267) Real estate Consumer mortgages (2,669) (4,877) (4,073) (3,582) (1,828) Home equity (1,278) (1,106) (1,153) (596) (361) Agricultural (407) (3) (37) (350) (19) Commercial and industrial-owner occupied (1,795) (649) (836) (511) (67) Construction, acquisition and development (3,160) (4,335) (4,377) (6,208) (6,975) Commercial (2,135) (321) (560) (611) (203) Credit cards (1,204) (1,290) (1,158) (953) (837) All other (939) (815) (810) (953) (807) ---- ---- ---- ---- ---- Total loans charged off (17,500) (14,466) (14,151) (14,767) (11,364) ------- ------- ------- ------ -------

Recoveries: Commercial and industrial 320 68 179 279 134 Real estate Consumer mortgages 132 263 220 174 77 Home equity 28 2 3 1 24 Agricultural - - 2 - - Commercial and industrial-owner occupied 31 248 8 54 3 Construction, acquisition and development 31 4 86 97 64 Commercial 108 - 56 23 - Credit cards 123 140 138 99 92 All other 257 262 353 290 333 --- --- --- --- --- Total recoveries 1,030 987 1,045 1,017 727 ----- --- ----- ----- ---

Net charge-offs (16,470) (13,479) (13,106) (13,750) (10,637)

Provision charged to operating expense 22,514 17,594 14,945 17,822 16,306 Other, net - - - (426) - ---- ---- ---- ---- ---- Balance, end of period $144,791 $138,747 $134,632 $132,793 $129,147 -------- -------- -------- -------- --------

Average loans for period $9,750,159 $9,740,916 $9,695,475 $9,604,142 $9,529,731 ========== ========== ========== ========== ==========

Ratios: Net charge-offs to average loans (annualized) 0.68% 0.55% 0.54% 0.57% 0.45% ==== ==== ==== ==== ====

BancorpSouth, Inc. Selected Loan Data (Dollars in thousands) (Unaudited)

Quarter Ended ------------- Sep-09 Jun-09 Mar-09 ----------------- ----------------- ----------------- NPL as a % NPL as a % NPL as a % of of of NPL outstanding NPL outstanding NPL outstanding --- ------------ --- ------------ --- ------------ NON-PERFORMING LOANS Commercial and industrial $7,509 0.52% $9,378 0.65% $7,341 0.53% Real estate Consumer mortgages 27,074 1.32 20,162 0.98 18,113 0.89 Home equity 2,586 0.48 2,247 0.42 1,590 0.31 Agricultural 2,936 1.15 4,455 1.84 1,353 0.57 Commercial and industrial-owner occupied 6,386 0.45 7,083 0.51 7,135 0.49 Construction, acquisition and development 45,757 2.98 44,828 2.71 30,544 1.80 Commercial 12,770 0.72 3,613 0.21 2,387 0.14 Credit cards 4,306 4.17 4,127 4.05 3,934 4.00 All other 2,312 0.36 1,779 0.29 1,419 0.23 ----- ---- ----- ---- ----- ---- Total loans $111,636 1.14% $97,672 1.00% $73,816 0.76% ======== ==== ======= ==== ======= ====

Quarter Ended ------------- Dec-08 Sep-08 ----------------- ----------------- NPL as a % NPL as a % of of NPL outstanding NPL outstanding --- ------------ --- ------------ Commercial and industrial $8,093 0.57% $6,377 0.46% Real estate Consumer mortgages 17,970 0.86 22,136 1.05 Home equity 939 0.18 486 0.10 Agricultural 849 0.36 1,260 0.53 Commercial and industrial-owner occupied 4,529 0.31 3,281 0.22 Construction, acquisition and development 24,874 1.47 25,696 1.54 Commercial 1,445 0.09 628 0.04 Credit cards 3,882 4.15 3,705 4.11 All other 1,432 0.23 1,605 0.27 ----- ---- ----- ---- Total loans $64,013 0.66% $65,174 0.68% ======= ==== ======= ====

BancorpSouth, Inc. Average Balances, Interest Income and Expense, and Average Yields and Rates (Dollars in thousands) (Unaudited) Quarter Ended September 30, 2009 ------------------ Average Yield/ (Taxable equivalent basis) Balance Interest Rate ------- -------- ---- ASSETS Loans, loans held for sale, and leases net of unearned income $9,808,427 $130,957 5.30% Held-to-maturity securities: Taxable 998,773 11,799 4.69% Tax-exempt 199,360 3,373 6.71% Available-for-sale securities: Taxable 889,278 8,591 3.83% Tax-exempt 69,737 1,251 7.12% Short-term investments 62,334 47 0.30% ------ -- Total interest earning assets and revenue 12,027,909 156,020 5.15% Other assets 1,285,360 Less: allowance for credit losses (146,212) -------- Total $13,167,057 ===========

LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand - interest bearing $4,010,281 $9,038 0.89% Savings 716,155 936 0.52% Other time 3,726,754 25,535 2.72% Short-term borrowings 1,071,144 544 0.20% Junior subordinated debt 160,312 2,884 7.14% Long-term debt 286,285 2,814 3.90% ------- ----- Total interest bearing liabilities and expense 9,970,931 41,751 1.66% Demand deposits - noninterest bearing 1,747,021 Other liabilities 184,006 ------- Total liabilities 11,901,958 Shareholders' equity 1,265,099 --------- Total $13,167,057 =========== -------- Net interest revenue $114,269 ======== Net interest margin 3.77% Net interest rate spread 3.49% Interest bearing liabilities to interest earning assets 82.90%

Net interest tax equivalent adjustment $2,533

BancorpSouth, Inc. Average Balances, Interest Income and Expense, and Average Yields and Rates (Dollars in thousands) (Unaudited) Quarter Ended June 30, 2009 ------------- Average Yield/ (Taxable equivalent basis) Balance Interest Rate ------- -------- ---- ASSETS Loans, loans held for sale, and leases net of unearned income $9,896,890 $131,313 5.32% Held-to-maturity securities: Taxable 1,040,896 12,218 4.71% Tax-exempt 186,473 3,316 7.13% Available-for-sale securities: Taxable 919,217 8,721 3.81% Tax-exempt 69,960 1,270 7.28% Short-term investments 21,727 25 0.47% ------ -- Total interest earning assets and revenue 12,135,163 156,863 5.18% Other assets 1,270,193 Less: allowance for credit losses (144,570) -------- Total $13,260,786 ===========

LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand - interest bearing $3,948,759 $9,738 0.99% Savings 719,281 928 0.52% Other time 3,634,336 26,496 2.92% Short-term borrowings 1,340,244 470 0.14% Junior subordinated debt 160,312 2,928 7.33% Long-term debt 286,294 2,813 3.94% ------- ----- Total interest bearing liabilities and expense 10,089,226 43,373 1.72% Demand deposits - noninterest bearing 1,756,861 Other liabilities 163,749 ------- Total liabilities 12,009,836 Shareholders' equity 1,250,950 --------- Total $13,260,786 =========== -------- Net interest revenue $113,490 ======== Net interest margin 3.75% Net interest rate spread 3.46% Interest bearing liabilities to interest earning assets 83.14%

Net interest tax equivalent adjustment $2,550

BancorpSouth, Inc. Average Balances, Interest Income and Expense, and Average Yields and Rates (Dollars in thousands) (Unaudited) Quarter Ended March 31, 2009 -------------- Average Yield/ (Taxable equivalent basis) Balance Interest Rate ------- -------- ---- ASSETS Loans, loans held for sale, and leases net of unearned income $9,873,692 $131,339 5.39% Held-to-maturity securities: Taxable 1,146,772 13,141 4.65% Tax-exempt 182,051 3,247 7.23% Available-for-sale securities: Taxable 891,699 9,038 4.11% Tax-exempt 73,814 1,358 7.46% Short-term investments 19,123 71 1.51% ------ -- Total interest earning assets and revenue 12,187,151 158,194 5.26% Other assets 1,277,538 Less: allowance for credit losses (139,811) -------- Total $13,324,878 ===========

LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand - interest bearing $4,090,821 $12,248 1.21% Savings 697,639 936 0.54% Other time 3,419,180 25,833 3.06% Short-term borrowings 1,588,229 959 0.24% Junior subordinated debt 160,312 2,955 7.48% Long-term debt 286,306 2,811 3.98% ------- ----- Total interest bearing liabilities and expense 10,242,487 45,742 1.81% Demand deposits - noninterest bearing 1,700,792 Other liabilities 142,628 ------- Total liabilities 12,085,907 Shareholders' equity 1,238,971 --------- Total $13,324,878 =========== -------- Net interest revenue $112,452 ======== Net interest margin 3.74% Net interest rate spread 3.45% Interest bearing liabilities to interest earning assets 84.04%

Net interest tax equivalent adjustment $2,576

BancorpSouth, Inc. Average Balances, Interest Income and Expense, and Average Yields and Rates (Dollars in thousands) (Unaudited) Quarter Ended December 31, 2008 ----------------- Average Yield/ (Taxable equivalent basis) Balance Interest Rate ------- -------- ---- ASSETS Loans, loans held for sale, and leases net of unearned income $9,773,683 $142,039 5.78% Held-to-maturity securities: Taxable 1,193,555 13,734 4.58% Tax-exempt 180,695 3,159 6.96% Available-for-sale securities: Taxable 868,913 8,693 3.98% Tax-exempt 73,476 1,335 7.23% Short-term investments 19,338 114 2.34% ------ --- Total interest earning assets and revenue 12,109,660 169,074 5.55% Other assets 1,304,386 Less: allowance for credit losses (134,453) -------- Total $13,279,593 ===========

LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand - interest bearing $3,811,782 $15,924 1.66% Savings 684,068 1,080 0.63% Other time 3,400,071 28,293 3.31% Short-term borrowings 1,828,010 3,951 0.86% Junior subordinated debt 160,312 3,161 7.84% Long-term debt 287,990 2,838 3.92% ------- ----- Total interest bearing liabilities and expense 10,172,233 55,247 2.16% Demand deposits - noninterest bearing 1,702,400 Other liabilities 165,462 ------- Total liabilities 12,040,095 Shareholders' equity 1,239,498 --------- Total $13,279,593 =========== -------- Net interest revenue $113,827 ======== Net interest margin 3.74% Net interest rate spread 3.39% Interest bearing liabilities to interest earning assets 84.00%

Net interest tax equivalent adjustment $2,506

BancorpSouth, Inc. Average Balances, Interest Income and Expense, and Average Yields and Rates (Dollars in thousands) (Unaudited) Quarter Ended September 30, 2008 ------------------ Average Yield/ (Taxable equivalent basis) Balance Interest Rate ------- -------- ---- ASSETS Loans, loans held for sale, and leases net of unearned income $9,689,955 $147,113 6.04% Held-to-maturity securities: Taxable 1,219,169 14,173 4.62% Tax-exempt 180,579 3,014 6.64% Available-for-sale securities: Taxable 901,023 9,025 3.98% Tax-exempt 75,917 1,344 7.04% Short-term investments 65,487 390 2.37% ------ --- Total interest earning assets and revenue 12,132,130 175,059 5.74% Other assets 1,304,430 Less: allowance for credit losses (131,621) -------- Total $13,304,939 ===========

LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand - interest bearing $3,492,942 $14,214 1.62% Savings 723,444 1,366 0.75% Other time 3,761,753 33,660 3.56% Short-term borrowings 1,790,760 7,879 1.75% Junior subordinated debt 160,312 3,064 7.60% Long-term debt 288,875 2,839 3.91% ------- ----- Total interest bearing liabilities and expense 10,218,086 63,022 2.45% Demand deposits - noninterest bearing 1,681,107 Other liabilities 174,396 ------- Total liabilities 12,073,589 Shareholders' equity 1,231,350 --------- Total $13,304,939 =========== -------- Net interest revenue $112,037 ======== Net interest margin 3.67% Net interest rate spread 3.29% Interest bearing liabilities to interest earning assets 84.22%

Net interest tax equivalent adjustment $2,435

SOURCE BancorpSouth, Inc.