BancorpSouth Announces Earnings of $0.35 per Diluted Share for First Quarter 2009

BancorpSouth Announces Earnings of $0.35 per Diluted Share for First Quarter
2009

TUPELO, Miss., April 20 /PRNewswire-FirstCall/ -- BancorpSouth, Inc. (NYSE:
BXS) today announced financial results for the quarter ended March 31, 2009.

Highlights of the first quarter include:

-- Continuing solid profitability, with net income of $29.5 million, or
$0.35 per diluted share.
-- Maintenance of the net interest margin at 3.74 percent for the second
consecutive quarter.
-- A 5.2 percent increase in net loans and leases year over year.
-- Strong credit quality, with non-performing loans of 0.76 percent of
loans and leases and annualized net charge-offs of 0.54 percent of
average loans and leases.
-- A more than doubling of mortgage lending revenue, excluding the write
down of the mortgage servicing asset, compared with both the first and
fourth quarters of 2008.

-- An increase in the ratio of shareholders' equity to assets to 9.33
percent, the 11th consecutive comparable quarter increase.

Summary Results

BancorpSouth's net income for the first quarter of 2009 was $29.5 million, or
$0.35 per diluted share, compared with $35.1 million, or $0.43 per diluted
share, for the first quarter of 2008. For the fourth quarter of 2008, net
income was $16.8 million or $0.20 per diluted share.

Aubrey Patterson, Chairman and Chief Executive Officer of BancorpSouth,
commented, "For the first quarter of 2009, BancorpSouth produced another
strong performance in an unusually challenging environment for both the
financial services industry and the national economy. This performance was
highlighted by solid profitability for the quarter, which contributed to a
further improvement in our already strong capital structure. We continued to
expand our portfolio of high quality loans, which we again funded through an
asset/liability management strategy that enabled us to maintain our net
interest margin. Our credit quality remained strong on both an absolute basis
and relative to our industry peers. Despite the weak economy, our credit
quality metrics for the first quarter were consistent with the manageable
levels produced for the fourth quarter of 2008, contributing to a significant
reduction in our provision for credit losses on a sequential-quarter basis.

"We continued to complement the controlled growth in our interest rate spread
dependent business with our diversified noninterest revenue streams, which, in
the aggregate, increased to 37.6 percent of total revenue for the first
quarter. Although first quarter insurance commission revenue reflected soft
market conditions, our mortgage originations increased 51.2% for the first
quarter of 2009 from the first quarter of 2008, due primarily to historically
low mortgage interest rates.

"Our first quarter results again demonstrated that BancorpSouth, through its
strong capital structure, asset quality and revenue diversification, is
well-positioned to deal with the current economic environment. We have
ongoing opportunities to expand our market share, particularly in new markets
entered through the opening of four full-service branch bank offices so far in
2009 and 17 new offices during 2008. We will continue to focus on controlling
our growth, maintaining our credit quality and managing our expenses."

Net Interest Revenue

Net interest revenue decreased 0.2 percent to $109.9 million for the first
quarter of 2009 from $110.1 million for the first quarter of 2008 and 1.3
percent from $111.3 million for the fourth quarter of 2008. The fully taxable
equivalent net interest margin was 3.74 percent for the first quarter of 2009,
down from 3.79 percent for the first quarter of 2008 and even with 3.74
percent for the fourth quarter of 2008.

Patterson remarked, "We are pleased with the consistency evident in our first
quarter net interest revenue and net interest margin, in spite of weakening
economic conditions and the decline in interest rates since the first and
fourth quarters of 2008. In the past year, we have consistently implemented
an asset/liability management strategy focused on funding our loan growth with
the proceeds of maturing lower yielding investment securities, short-term
borrowings and growth in demand deposits. As a result, we lowered interest
expense in part by reducing other time deposits by 14.6 percent at the end of
the first quarter of 2009 from a year earlier through more conservative
pricing of these deposit products. During this same period, demand deposits
grew 11.9 percent.

"We were modestly more aggressive in pricing longer term time deposits during
the first quarter of 2009 in order to extend maturities with interest rates at
historically low levels. As a result, we produced a 0.6 percent increase in
the average balance of other time deposits for the quarter compared with the
fourth quarter of 2008 and a 4.5 percent increase in the balance of other time
deposits at the end of the first quarter from the end of 2008. We also
continued to benefit from increased demand deposits, which rose by 3.3 percent
at the end of the first quarter from the end of 2008. Because of this deposit
growth, we reduced our short-term borrowings during the first quarter,
enhancing the already ample liquidity represented by our borrowing capacity
with the FHLB and other banks."

Deposit and Loan Activity

Total assets at March 31, 2009 increased 2.3 percent to $13.5 billion from
$13.2 billion at March 31, 2008. Total deposits of $10.1 billion at March 31,
2009 increased 0.1 percent from March 31, 2008. Loans and leases, net of
unearned income, increased 5.2 percent to $9.7 billion at March 31, 2009 from
$9.2 billion at March 31, 2008.

"We are encouraged by the steady loan growth we have experienced in a time of
increased competition for high quality loans," added Patterson. "We generated
a significant portion of this activity by increasing our business in newer
markets, validating our long-term strategy of expansion into familiar,
contiguous markets with diverse economies and attractive growth dynamics. We
also continue to believe that our financial strength and stability, which
differentiates us from many industry peers, have contributed to the growth in
our loans and deposits."

Provision for Credit Losses and Allowance for Credit Losses

For the first quarter of 2009, the provision for credit losses was $14.9
million compared with $10.8 million for the first quarter of 2008 and $17.8
million for the fourth quarter of 2008. Annualized net charge-offs were 0.54
percent of average loans and leases for the first quarter of 2009 compared
with 0.29 percent for the first quarter of 2008 and 0.57 percent for the
fourth quarter of 2008.

Non-performing loans and leases increased to $73.8 million, or 0.76 percent of
net loans and leases, at March 31, 2009 from $38.7 million, or 0.42 percent of
net loans and leases, at March 31, 2008 and from $64.0 million, or 0.66
percent of net loans and leases, at December 31, 2008. The allowance for
credit losses increased to 1.39 percent of net loans and leases at March 31,
2009 compared with 1.29 percent at March 31, 2008 and 1.37 percent at December
31, 2008.

Patterson said, "Although we are not complacent with the level of
non-performing loans and net charge-offs for the first quarter of 2009, our
credit metrics continue to demonstrate the high quality of our loan portfolio
and should, we expect, compare very favorably with industry averages. To
support our continued strong performance, we remain focused on early
identification and resolution of any emerging credit issues. We also plan to
remain well reserved against expected losses inherent within the portfolio.
Our provision for loan losses for the first quarter was in excess of our net
charge-offs, and we completed the quarter with an allowance for credit losses
totaling 1.8 times non-performing loans at the end of the quarter and 2.6
times annualized net charge-offs for the quarter."

Noninterest Revenue

For the first quarter of 2009, noninterest revenue was $66.3 million, an
increase of 0.1 percent from $66.2 million for the first quarter of 2008.
These results included a $3.4 million pre-tax write down of the mortgage
servicing asset for both the first quarters of 2009 and 2008. In addition,
results for the first quarter of 2008 included a $2.8 million gain related to
the sale of Visa common stock.

"The highlight of our noninterest revenue performance for the first quarter
was a 125.2 percent growth in mortgage lending revenue, excluding the write
down of the mortgage servicing asset, compared with the first quarter of 2008
and a 172.1 percent increase from the fourth quarter of 2008," stated
Patterson. "As we experienced during the fourth quarter, much of this growth
represented new customers who came to BancorpSouth to refinance their existing
mortgages. Given the current low interest rate environment, we believe our
mortgage operations represent a further growth opportunity. We also note that
with the decline in interest rates during the first quarter, the additional
write down of our mortgage servicing asset has lowered its carrying value to
0.82 percent of the unpaid principal balance of the loans being serviced
compared with 1.07 percent at March 31, 2008."

Noninterest Expense

Noninterest expense increased 4.4 percent to $118.5 million for the first
quarter of 2009 from $113.5 million for the first quarter of 2008 and 6.6
percent from $111.1 million for the fourth quarter of 2008. BancorpSouth
experienced a major increase in its FDIC insurance premium for the first
quarter, despite being assessed at the FDIC's lowest rate because of
BancorpSouth Bank's strong credit quality and its "well capitalized" status
under federal regulations. In addition, nearly half of the increase in
noninterest expense compared with the first quarter of 2008 was attributable
to the opening of 17 full-service branch bank offices during 2008 and four
full-service branch offices in 2009.

Capital Management

For the first quarter of 2009, BancorpSouth continued its long history of
maintaining a strong capital position and ample liquidity, while continuing to
maintain its cash dividends to shareholders. The Company's shareholders'
equity to asset ratio increased to 9.33 percent at the end of the first
quarter from 9.28 percent at the end of the first quarter of 2008 and 9.20
percent at the end of 2008. The ratio of tangible equity to assets rose to
7.29 percent from 7.14 percent at the end of the first quarter of 2008 and
7.15 percent at the end of 2008. BancorpSouth remains a "well capitalized"
financial holding company as defined by federal regulations. BancorpSouth
paid cash dividends of $0.22 per share during the first quarter and did not
repurchase any shares of its common stock.

Summary

Patterson said, "Our ability to strengthen our capital structure and maintain
strong credit quality during the past three quarters of extraordinary turmoil
in the financial services industry continues to validate our decision to
forego participation in the U.S. Treasury's Capital Purchase Program under
TARP. We are fundamentally a strong financial institution, although we remain
cautious about our outlook for the future with an appropriate focus on early
identification and resolution of emerging credit issues and on expense
management. Consistent with our performance for the first quarter, we will
also continue to leverage our strengths to gain market share, thereby
enhancing our ability to grow when the economic cycle begins to improve.
Until that time, we are prepared to manage any challenges we face due to the
economic downturn. We are confident that through our strong capital
structure, conservative management principles and uniquely diversified market
position across our mid-South franchise, we are positioned to continue to
operate profitability, to grow and to build long-term shareholder value."

Conference Call

BancorpSouth will conduct a conference call to discuss its first quarter 2009
results tomorrow, April 21, 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 credit quality, our loan growth and growth in deposits, the
management of our expenses, leveraging our strengths to gain market share, our
growth, the quality of our loan portfolio compared to industry averages, our
loan loss reserves, growth opportunities resulting from our mortgage
operations and our financial strength and flexibility.

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 approximately $13.5 billion in assets. BancorpSouth Bank, a
wholly-owned subsidiary of BancorpSouth, Inc., operates approximately 318
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
March 31,
2009 2008
(Dollars in thousands, except per
share amounts)
Earnings Summary:
Net interest revenue $109,876 $110,070
Provision for credit losses 14,945 10,811
Noninterest revenue 66,293 66,231
Noninterest expense 118,453 113,470
Income before income taxes 42,771 52,020
Income tax provision 13,294 16,875
Net income $29,477 $35,145
Earning per share: Basic $0.35 $0.43
Diluted $0.35 $0.43

Balance sheet data at March 31:
Total assets $13,458,364 $13,154,871
Total earning assets 12,240,161 11,909,702
Loans and leases, net of unearned
income 9,712,823 9,233,023
Allowance for credit losses 134,632 119,301
Total deposits 10,091,974 10,086,201
Common shareholders' equity 1,255,659 1,221,135
Book value per share 15.11 14.83

Average balance sheet data:
Total assets $13,324,878 $13,100,524
Total earning assets 12,187,151 11,947,759
Loans and leases, net of unearned
interest 9,695,475 9,213,294
Total deposits 9,908,432 10,090,342
Common shareholders' equity 1,238,971 1,199,457

Non-performing assets at March 31:
Non-accrual loans and leases $38,936 $14,709
Loans and leases 90+ days past due,
still accruing 27,299 21,522
Restructured loans and leases, still
accruing 7,581 2,493
Other real estate owned 47,450 26,623
Total non-performing assets 121,266 65,347

Net charge-offs as a percentage
of average loans (annualized) 0.54% 0.29%

Performance ratios (annualized):
Return on average assets 0.90% 1.08%
Return on common equity 9.65% 11.78%

Net interest margin 3.74% 3.79%

Average shares outstanding - basic 83,107,469 82,330,916
Average shares outstanding - diluted 83,234,105 82,533,799

BancorpSouth, Inc.
Consolidated Balance Sheet
(Unaudited)
March 31, %
2009 2008 Change
(Dollars in thousands)
Assets
Cash and due from banks $242,180 $290,246 (16.56%)
Interest bearing deposits with other
banks 34,230 19,258 77.74%
Held-to-maturity securities, at
amortized cost 1,330,810 1,523,994 (12.68%)
Available-for-sale securities, at fair
value 993,529 971,613 2.26%
Loans and leases 9,759,787 9,280,659 5.16%
Less: Unearned income 46,964 47,636 (1.41%)
Allowance for credit
losses 134,632 119,301 12.85%
Net loans and leases 9,578,191 9,113,722 5.10%
Loans held for sale 168,769 161,814 4.30%
Premises and equipment, net 348,734 328,920 6.02%
Accrued interest receivable 77,503 92,520 (16.23%)
Goodwill 269,062 270,762 (0.63%)
Other assets 415,356 382,022 8.73%
Total Assets $13,458,364 $13,154,871 2.31%
Liabilities
Deposits:
Demand: Noninterest bearing $1,820,807 $1,722,914 5.68%
Interest bearing 4,005,620 3,484,607 14.95%
Savings 719,676 725,494 (0.80%)
Other time 3,545,871 4,153,186 (14.62%)
Total deposits 10,091,974 10,086,201 0.06%
Federal funds purchased and
securities sold under agreement
to repurchase 1,256,649 784,532 60.18%
Short-term Federal Home Loan Bank
borrowings and other short-term
borrowing 210,000 430,000 (51.16%)
Accrued interest payable 22,841 34,203 (33.22%)
Junior subordinated debt securities 160,312 160,312 0.00%
Long-term Federal Home Loan Bank
borrowings 286,302 288,939 (0.91%)
Other liabilities 174,627 149,549 16.77%
Total Liabilities 12,202,705 11,933,736 2.25%
Shareholders' Equity
Common stock 207,811 205,913 0.92%
Capital surplus 216,138 200,742 7.67%
Accumulated other comprehensive income
(loss) (23,620) 1,032 N/A
Retained earnings 855,330 813,448 5.15%
Total Shareholders' Equity 1,255,659 1,221,135 2.83%
Total Liabilities & Shareholders'
Equity $13,458,364 $13,154,871 2.31%

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

Quarter Ended
Mar-09 Dec-08 Sep-08 Jun-08 Mar-08
INTEREST REVENUE:
Loans and leases $129,209 $139,099 $144,393 $147,289 $159,184
Deposits with other
banks 70 111 172 193 208
Federal funds sold and
securities purchased
under agreement to
resell 1 3 218 - 67
Held-to-maturity
securities:
Taxable 13,031 13,625 14,063 15,044 15,947
Tax-exempt 2,111 2,053 1,959 2,025 2,075
Available-for-sale
securities:
Taxable 9,038 8,693 9,025 8,531 9,564
Tax-exempt 883 867 874 1,260 1,204
Loans held for sale 1,275 2,117 1,920 1,420 2,210
Total interest
revenue 155,618 166,568 172,624 175,762 190,459

INTEREST EXPENSE:
Interest bearing demand 12,248 15,924 14,214 12,938 17,257
Savings 936 1,080 1,366 1,291 1,543
Other time 25,833 28,293 33,660 39,778 46,860
Federal funds purchased
and securities sold
under agreement to
repurchase 572 2,175 4,308 3,321 5,195
FHLB Borrowings 2,823 4,537 6,277 5,359 6,285
Other 3,330 3,238 3,197 3,232 3,249
Total interest
expense 45,742 55,247 63,022 65,919 80,389

Net interest
revenue 109,876 111,321 109,602 109,843 110,070
Provision for credit
losses 14,945 17,822 16,306 11,237 10,811
Net interest
revenue, after
provision for
credit losses 94,931 93,499 93,296 98,606 99,259

NONINTEREST REVENUE:
Mortgage lending 7,652 (12,174) 3,270 9,507 1,543
Credit card, debit card
and merchant fees 8,348 8,409 8,512 8,846 7,976
Service charges 14,085 16,915 17,687 17,093 15,839
Trust income 2,209 2,328 2,507 2,261 2,234
Security gains (losses),
net 5 (6,226) 100 199 78
Insurance commissions 22,645 18,752 21,779 21,462 24,668
Other 11,349 11,446 9,578 13,898 13,893
Total
noninterest
revenue 66,293 39,450 63,433 73,266 66,231

NONINTEREST EXPENSES:
Salaries and employee
benefits 71,363 64,395 68,865 68,121 70,175
Occupancy, net of rental
income 9,999 10,307 10,340 9,716 9,483
Equipment 6,222 6,319 6,214 6,245 6,433
Other 30,869 30,072 30,640 27,982 27,379
Total
noninterest
expenses 118,453 111,093 116,059 112,064 113,470
Income before
income taxes 42,771 21,856 40,670 59,808 52,020
Income tax expense 13,294 5,060 12,325 19,683 16,875
Net income $29,477 $16,796 $28,345 $40,125 $35,145

Net income per share:
Basic $0.35 $0.20 $0.34 $0.49 $0.43
Diluted $0.35 $0.20 $0.34 $0.49 $0.43

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
March 31, 2008
Average Yield/
(Taxable equivalent basis) Balance Interest Rate
ASSETS
Loans, loans held for sale,
and leases net of unearned
income $9,356,790 $162,267 6.97%
Held-to-maturity securities:
Taxable 1,406,000 15,947 4.56%
Tax-exempt 191,754 3,192 6.69%
Available-for-sale securities:
Taxable 864,368 9,563 4.45%
Tax-exempt 102,658 1,853 7.26%
Short-term investments 26,189 275 4.22%
Total interest earning
assets and revenue 11,947,759 193,097 6.50%
Other assets 1,273,866
Less: allowance for credit losses (121,101)
Total $13,100,524

LIABILITIES AND
SHAREHOLDERS' EQUITY
Deposits:
Demand - interest bearing $3,485,167 $17,257 1.99%
Savings 709,403 1,543 0.88%
Other time 4,291,257 46,860 4.39%
Short-term borrowings 1,247,203 9,015 2.91%
Junior subordinated debt 160,312 3,184 7.99%
Long-term debt 249,391 2,530 4.08%
Total interest bearing
liabilities and expense 10,142,733 80,389 3.19%
Demand deposits -
noninterest bearing 1,604,515
Other liabilities 153,819
Total liabilities 11,901,067
Shareholders' equity 1,199,457
Total $13,100,524
Net interest revenue $112,708
Net interest margin 3.79%
Net interest rate spread 3.31%
Interest bearing liabilities to
interest earning assets 84.89%

Net interest tax equivalent
adjustment $2,638

SOURCE BancorpSouth, Inc.

L. Nash Allen, Jr., Treasurer and Chief Financial Officer, +1-662-680-2330, or
Gary C. Bonds, Executive Vice President and Controller, +1-662-680-2332