BancorpSouth Announces First Quarter 2021 Results

TUPELO, Miss., April 21, 2021 /PRNewswire/ -- BancorpSouth Bank (NYSE: BXS) (the "Company") today announced financial results for the quarter ended March 31, 2021.

Highlights for the first quarter of 2021 included:

• Achieved record quarterly net income available to common shareholders of $79.2 million, or $0.77 per diluted common share, and record net operating income available to common shareholders – excluding MSR – of $74.8 million, or $0.73 per diluted common share.
• Generated $99.1 million in pre-tax pre-provision net revenue (PPNR), or 1.64 percent of average assets on an annualized basis.
• Credit quality indicators improved as evidenced by no recorded provision for credit losses for the quarter and a decline of $21.9 million, or 16.5 percent, in total non-performing assets.
• Generated total deposit and customer repo growth of $1.3 billion for the quarter, or 26.7 percent on an annualized basis.
• Originated and funded 7,527 loans totaling $463.5 million under the Paycheck Protection Program (PPP); received PPP forgiveness payments totaling $307.9 million during the quarter.
• Continued strong mortgage production volume of $789.8 million which contributed to mortgage production and servicing revenue of $17.9 million.
• Maintained strong regulatory capital metrics; estimated total risk-based capital of 14.65 percent at March 31, 2021 compared to 14.48 percent at December 31, 2020.
• Recently received regulatory approval to complete transactions with National United Bancshares, Inc., the parent company of National United, and FNS Bancshares, Inc., the parent company of FNB Bank, which are expected to close effective May 1, 2021 and add approximately $1.6 billion in total assets to the Company.
• On April 12, 2021, announced the signing of a merger agreement with Cadence Bancorporation, the parent company of Cadence Bank N.A., which creates a $44 billion institution on a pro forma basis that will be the 5^th largest bank headquartered in the Company's nine-state footprint.

"We are pleased to report another quarter of record financial performance," remarked Dan Rollins, Chairman and Chief Executive Officer.  "While the unprecedented liquidity levels in the industry continue to pressure our net interest margin and adversely impact loan demand, our teammates are doing a great job taking care of customers and controlling the things we can control.  Consistent with industry trends, we reported meaningful deposit and customer repo growth for the quarter. Our mortgage team had another outstanding quarter, while our insurance and wealth management teams reported strong revenue growth for the quarter.  We also originated almost $465 million in new PPP loans during the quarter while also receiving forgiveness payments totaling over $300 million on loans that were originated last year."

"As we look at other highlights for the quarter, we are extremely pleased with credit quality.  The economies across our footprint are open and generally performing quite well.  Virtually all of our credit quality indicators, including non-performing and classified assets, improved which, along with the economic forecasts utilized in our modeling process, resulted in no recorded provision for credit losses for the quarter.  Finally, we continue to be pleased with our efforts to improve our expense base as reflected in the meaningful decline in total non-interest expense compared to both the first and fourth quarters of last year."

Earnings Summary

The Company reported net income available to common shareholders of $79.2 million, or $0.77 per diluted common share, for the first quarter of 2021, compared with net income available to common shareholders of $21.9 million, or $0.21 per diluted common share, for the first quarter of 2020 and net income available to common shareholders of $66.4 million, or $0.65 per diluted common share, for the fourth quarter of 2020.  The Company reported net operating income available to common shareholders – excluding MSR – of $74.8 million, or $0.73 per diluted common share, for the first quarter of 2021, compared with $34.4 million, or $0.33 per diluted common share, for the first quarter of 2020 and $70.8 million, or $0.69 per diluted common share, for the fourth quarter of 2020.

The Company reported PPNR of $99.1 million, or 1.64 percent of average assets on an annualized basis, for the first quarter of 2021 compared to $91.7 million, or 1.74 percent of average assets on an annualized basis, for the first quarter of 2020 and $93.6 million, or 1.57 percent of average assets on an annualized basis, for the fourth quarter of 2020.

Net Interest Revenue

Net interest revenue was $172.8 million for the first quarter of 2021, an increase of 3.1 percent from $167.5 million for the first quarter of 2020 and a decrease of 2.3 percent from $176.9 million for the fourth quarter of 2020.  The fully taxable equivalent net interest margin was 3.15 percent for the first quarter of 2021, compared with 3.54 percent for the first quarter of 2020 and 3.29 percent for the fourth quarter of 2020.  Yields on net loans and leases were 4.53 percent for the first quarter of 2021, compared with 5.00 percent for the first quarter of 2020 and 4.55 percent for the fourth quarter of 2020, while yields on total interest earning assets were 3.51 percent for the first quarter of 2021, compared with 4.27 percent for the first quarter of 2020 and 3.70 percent for the fourth quarter of 2020.  The net interest margin, excluding accretable yield, was 3.08 percent for the first quarter of 2021, compared with 3.48 percent for the first quarter of 2020 and 3.24 percent for the fourth quarter of 2020, while yields on net loans and leases, excluding accretable yield, were 4.43 percent for the first quarter of 2021, compared with 4.93 percent for the first quarter of 2020 and 4.49 percent for the fourth quarter of 2020. 

The $1.1 billion in PPP loans on the balance sheet had an adverse impact of approximately six basis points on the yield on net loans and leases, excluding accretable yield, for the first quarter of 2021.  Net interest income for the first quarter of 2021 included approximately $3.1 million of accelerated PPP fee income recognition resulting from the payoff of loans that were forgiven by the SBA during the quarter.  The average cost of deposits was 0.33 percent for the first quarter of 2021, compared with 0.67 percent for the first quarter of 2020 and 0.38 percent for the fourth quarter of 2020.

Balance Sheet Activity

Loans and leases, net of unearned income, increased $16.3 million during the first quarter of 2021.  Excluding the impact of PPP originations and paydowns, total loans declined approximately $140.0 million compared to December 31, 2020.  Deposits and customer repos increased $1.3 billion, or 26.7 percent on an annualized basis, during the first quarter of 2021.  There were no acquisitions during the first quarter of 2021. 

Provision for Credit Losses and Allowance for Credit Losses

Earnings for the first quarter of 2021 reflect no provision for credit losses, compared with a provision of $46.0 million for the first quarter of 2020 and a provision of $5.0 million for the fourth quarter of 2020.  Net charge-offs for the first quarter of 2021 were $3.3 million, or 0.09 percent of net loans and leases on an annualized basis, compared with net charge-offs of $13.7 million for the first quarter of 2020 and net charge-offs of $11.2 million for the fourth quarter of 2020.  The allowance for credit losses was $241.1 million, or 1.60 percent of net loans and leases, at March 31, 2021, compared with $218.2 million, or 1.53 percent of net loans and leases, at March 31, 2020, and $244.4 million, or 1.63 percent of net loans and leases, at December 31, 2020.   The allowance for credit losses coverage, excluding the impact of PPP loans, was 1.74 percent of net loans and leases at March 31, 2021.   

Total non-performing assets were $110.7 million, or 0.43 percent of total assets, at March 31, 2021, compared with $137.8 million, or 0.66 percent of total assets, at March 31, 2020, and $132.6 million, or 0.55 percent of total assets, at December 31, 2020.  Other real estate owned was $9.4 million at March 31, 2021, compared with $9.2 million at March 31, 2020 and $11.4 million at December 31, 2020.

Noninterest Revenue

Noninterest revenue was $87.9 million for the first quarter of 2021, compared with $76.5 million for the first quarter of 2020 and $78.8 million for the fourth quarter of 2020.  These results include a positive mortgage servicing rights (MSR) valuation adjustment of $7.4 million for the first quarter of 2021, compared with a negative MSR valuation adjustment of $11.1 million for the first quarter of 2020 and a positive MSR valuation adjustment of $0.2 million for the fourth quarter of 2020.  Valuation adjustments in the MSR asset are driven primarily by fluctuations in interest rates period over period.   

Mortgage production and servicing revenue was $17.9 million for the first quarter of 2021, compared with $20.6 million for the first quarter of 2020 and $19.9 million for the fourth quarter of 2020.  Mortgage origination volume for the first quarter of 2021 was $789.8 million, compared with $477.1 million for the first quarter of 2020 and $845.9 million for the fourth quarter of 2020.  Home purchase money volume was $379.4 million for the first quarter of 2021, compared with $285.3 million for the first quarter of 2020 and $466.4 million for the fourth quarter of 2020.  Of the total mortgage origination volume for the first quarter of 2021, $149.0 million was portfolio loans, compared with $85.6 million for the first quarter of 2020 and $157.8 million for the fourth quarter of 2020.

Credit card, debit card, and merchant fee revenue was $9.7 million for the first quarter of 2021, compared with $9.2 million for the first quarter of 2020 and $10.1 million for the fourth quarter of 2020.  Deposit service charge revenue was $8.5 million for the first quarter of 2021, compared with $11.7 million for the first quarter of 2020 and $9.7 million for the fourth quarter of 2020.  Wealth management revenue was $8.5 million for the first quarter of 2021, compared with $6.6 million for the first quarter of 2020 and $6.8 million for the fourth quarter of 2020.  Insurance commission revenue was $30.7 million for the first quarter of 2021, compared with $29.6 million for the first quarter of 2020 and $29.8 million for the fourth quarter of 2020.  Other noninterest revenue was $5.3 million for the first quarter of 2021, compared with $10.1 million for the first quarter of 2020 and $2.3 million for the fourth quarter of 2020.  Other noninterest revenue for the fourth quarter of 2020 was adversely impacted by $2.7 million of book amortization associated with a historic tax credit.  A related benefit of $3.0 million was recorded as a reduction to income tax expense for the fourth quarter of 2020.  Other noninterest revenue for the first quarter of 2020 included a $4.2 million gain associated with the sale of a book of business within the Company's insurance agency.

Noninterest Expense

Noninterest expense for the first quarter of 2021 was $155.8 million, compared with $168.0 million for the first quarter of 2020 and $167.9 million for the fourth quarter of 2020.  Salaries and employee benefits expense was $101.1 million for the first quarter of 2021, compared with $108.3 million for the first quarter of 2020 and $97.2 million for the fourth quarter of 2020.  Occupancy expense was $12.8 million for the first quarter of 2021, compared with $12.7 million for the first quarter of 2020 and $13.0 million for the fourth quarter of 2020.  Other noninterest expense was $35.9 million for the first quarter of 2021, compared with $40.8 million for the first quarter of 2020 and $45.4 million for the fourth quarter of 2020.  Additionally, merger-related expense for the first quarter of 2021 was $1.6 million, compared with merger-related expense of $4.5 million for the first quarter of 2020 and $0.2 million for the fourth quarter of 2020. 

Noninterest expense for the first quarter of 2021 and the fourth quarter of 2020 included certain items that were non-routine in nature as defined by the Company.  Salaries and benefits expense for the first quarter of 2021 benefited from an accrual true-up totaling approximately $3.0 million related to the Company's equity compensation plans.  During the fourth quarter of 2020, the Company recorded a charge of $5.8 million in accordance with ASC 715 "Compensation – Retirement Benefits" to reflect the settlement accounting impact of an elevated number of retirements and related lump sum pension payouts during the quarter.   Salaries and employee benefits expense was positively impacted by accrual true ups totaling approximately $6.7 million relating to incentive compensation and other employee benefits.  Other non-interest expense included charges and write-downs totaling approximately $5.0 million associated with the anticipated disposition of certain facilities and other fixed assets, including fixed assets associated with branches identified for closure. 

Capital Management

The Company's ratio of shareholders' equity to assets was 10.95 percent at March 31, 2021, compared with 12.75 percent at March 31, 2020 and 11.72 percent at December 31, 2020.  The ratio of tangible common shareholders' equity to tangible assets was 7.04 percent at March 31, 2021, compared with 7.99 percent at March 31, 2020 and 7.54 percent at December 31, 2020.  The $1.1 billion in PPP loans had an adverse impact of approximately 34 basis points on tangible common shareholders' equity to tangible assets at March 31, 2021.

During the first quarter of 2021, the Company did not repurchase any shares of its common stock pursuant to its share repurchase program.  The Company has 6.0 million shares remaining on its current share repurchase authorization which will expire on December 31, 2021.  

Estimated regulatory capital ratios at March 31, 2021 were calculated in accordance with the Basel III capital framework as well as the interagency final rule published on September 30, 2020 entitled "Revised Transition of the Current Expected Credit Losses Methodology for Allowances".  The Company is a "well capitalized" bank, as defined by federal regulations, at March 31, 2021, with Tier 1 risk-based capital of 11.95 percent and total risk-based capital of 14.65 percent, compared with required minimum levels of 8 percent and 10 percent, respectively, in order to qualify for "well capitalized" classification. 

Summary

Rollins concluded, "It's an exciting time for our Company.  The economies in our markets are performing quite well and, despite certain industry headwinds, we continue to be pleased with our financial performance.   We look forward to the growth opportunities ahead of us.  The recent merger announcement with Cadence is a transformational opportunity for our Company.  We believe the strengths of each organization are complementary.  Both organizations are highly focused on improving the customer experience and giving back to the communities we serve.  We are also excited about the opportunity to complete our pending mergers with National United and FNB Bank next month.  These two teams will be an integral part of our strategic efforts going forward as we continue to grow our Company and enhance shareholder value."

TRANSACTIONS

Cadence Bancorporation (NYSE: CADE)

On April 12, 2021, the Company announced the signing of a definitive merger agreement (the Cadence Merger Agreement) with Cadence Bancorporation, the parent company of Cadence Bank N.A., (collectively referred to as Cadence), pursuant to which Cadence will be merged with and into the Company (the Cadence Merger).  Cadence operates 98 full-service banking offices in the southeast.  As of December 31, 2020, Cadence collectively reported total assets of $18.7 billion, total loans of $12.7 billion and total deposits of $16.1 billion.  Under the terms of the Cadence Merger Agreement, each Cadence shareholder will receive 0.70 shares of the Company's common stock.  In addition, Cadence will pay a one-time special dividend of $1.25 per share at closing.  For more information regarding the Cadence Merger, see our Current Report on Form 8-K that was filed with the Federal Deposit Insurance Corporation (FDIC) on April 12, 2021.  The Cadence Merger Agreement has been unanimously approved by the Boards of Directors of the Company and Cadence.  Subject to the satisfaction of all closing conditions, including the receipt of all required regulatory and shareholder approvals, the Cadence Merger is expected to be completed during the fourth quarter of 2021, although the Company can provide no assurance that the Cadence Merger will close during this time period or at all.

FNS Bancshares, Inc.

On January 13, 2021, the Company announced the signing of a definitive merger agreement (the FNS Merger Agreement) with FNS Bancshares, Inc., the parent company of FNB Bank, (collectively referred to as FNS), pursuant to which FNS will be merged with and into the Company (the FNS Merger).  FNS operates 17 full-service banking offices in Alabama, Georgia and Tennessee.  The merger will expand the Company's presence in Jackson, DeKalb and Marshall counties in Alabama and the Chattanooga, Tennessee-Georgia and Nashville-Davidson-Murfreesboro-Franklin, Tennessee metropolitan statistical areas.  As of March 31, 2021, FNS collectively reported total assets of $826.5 million, total loans of $475.1 million and total deposits of $709.9 million.  Under the terms of the FNS Merger Agreement, the Company will issue approximately 2,975,000 shares of the Company's common stock plus $18.0 million in cash for all outstanding shares of FNS.  For more information regarding the FNS Merger, see our Current Report on Form 8-K that was filed with the FDIC on January 13, 2021.  Subject to the satisfaction of all closing conditions, the FNS Merger is expected to close on May 1, 2021.

National United Bancshares, Inc.

On December 2, 2020, the Company announced the signing of a definitive merger agreement (the National United Merger Agreement) with National United Bancshares, Inc., the parent company of National United, (collectively referred to as National United), pursuant to which National United will be merged with and into the Company (the National United Merger).  National United operates 6 full-service banking offices in the Killeen-Temple, Texas; Waco, Texas; and Austin-Round Rock-Georgetown, Texas metropolitan statistical areas.  As of March 31, 2021, National United collectively reported total assets of $788.9 million, total loans of $440.6 million and total deposits of $712.8 million.  Under the terms of the National United Merger Agreement, the Company will issue approximately 3,110,000 shares of the Company's common stock plus $33.25 million in cash for all outstanding shares of National United.  For more information regarding National United Merger, see our Current Report on Form 8-K that was filed with the FDIC on December 2, 2020.  Subject to the satisfaction of all closing conditions, the National United Merger is expected to close on May 1, 2021.

Non-GAAP Measures and Ratios

This news release presents certain financial measures and ratios that are not calculated in accordance with U.S. generally accepted accounting principles (GAAP).  A discussion regarding these non-GAAP measures and ratios, including reconciliations of non-GAAP measures to the most directly comparable GAAP measures and definitions for non-GAAP ratios, appears under the caption "Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions"  beginning on page 24 of this news release.

Statement Regarding Impact of COVID-19 Pandemic

The Company prioritizes the health and safety of its teammates and customers, and it will continue to do so throughout the duration of the COVID-19 pandemic.  At the same time, the Company remains focused on improving shareholder value, managing credit exposure, challenging expenses, enhancing the customer experience and supporting the communities it serves. Lastly, as a SBA Preferred Lender, the Company is an active participant in the SBA's PPP for the betterment of its customers and the communities that it serves.

In the presentation that accompanies this news release and in its earnings conference call, the Company has sought and will seek to describe the historical and future impact of the COVID-19 pandemic on the Company's assets, business, cash flows, financial condition, liquidity, prospects and results of operations, including the information and discussions regarding negative pressure on its net interest margin and loan demand.  Although the Company believes that the statements that pertain to future events, results and trends and their impact on the Company's business are reasonable at the present time, those statements are not historical facts and are based upon current assumptions, expectations, estimates and projections, many of which, by their nature, are beyond the Company's control.  Accordingly, all discussions regarding future events, results and trends and their impact on the Company's business, even in the near term, are necessarily uncertain given the fluid and evolving nature of the pandemic.

If the health, logistical or economic effects of the pandemic worsen, or if the assumptions, expectations, estimates or projections that underlie the Company's statements regarding future effects or trends prove to be incorrect, then the Company's actual assets, business, cash flows, financial condition, liquidity, prospects and results of operations and the trading prices of its capital stock may be materially and adversely impacted in ways that the Company cannot reasonably forecast.

Accordingly, when reading this news release and the accompanying presentation and when listening to the earnings conference call, undue reliance should not be placed upon any statement pertaining to future events, results and trends and their impact on the Company's business in future periods.

Conference Call and Webcast

The Company will conduct a conference call to discuss its first quarter 2021 financial results on April 22, 2021, at 10:00 a.m. (Central Time).  This conference call will be an interactive session between management and analysts. Interested parties may listen to this live conference call via Internet webcast by accessing www.bancorpsouth.investorroom.com/webcasts. The webcast will also be available in archived format at the same address.

About BancorpSouth Bank

BancorpSouth Bank (NYSE: BXS) is headquartered in Tupelo, Mississippi, with approximately $26 billion in assets.  BancorpSouth operates approximately 300 full service branch locations as well as additional mortgage, insurance, and loan production offices in Alabama, Arkansas, Florida, Louisiana, Mississippi, Missouri, Tennessee and Texas, including an insurance location in Illinois.  BancorpSouth is committed to a culture of respect, diversity, and inclusion in both its workplace and communities. To learn more, visit our Community Commitment page at www.bancorpsouth.com.  Like us on Facebook; follow us on Twitter and Instagram: @MyBXS; or connect with us through LinkedIn.

Forward-Looking Statements

Certain statements made in this news release are not statements of historical fact and constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and are subject to the safe harbor created thereby under the Private Securities Litigation Reform Act of 1995. These statements are often, but not always, made through the use of words or phrases such as "anticipate," "aspire," "assume," "believe," "budget," "contemplate," "continue," "could," "estimate," "expect," "forecast," "foresee," "goal," "hope," "indicate," "intend," "may," "might," "outlook," "plan," "project," "projection," "predict," "prospect," "potential," "roadmap," "seek," "should," "target," "will," and "would," or the negative versions of those words or other comparable words of a future or forward-looking nature. These forward-looking statements include, without limitation, discussions regarding general economic, interest rate, real estate market, competitive, employment, and credit market conditions, including the impact of the COVID-19 pandemic on the Company's business; the Company's: assets; business; cash flows; financial condition; liquidity; prospects; results of operations; deposit and customer repo growth; interest and fee-based revenue; capital resources; capital metrics; efficiency ratio; valuation of mortgage servicing rights; net income; net interest revenue; non-interest revenue; net interest margin; interest expense; non-interest expense; earnings per share; interest rate sensitivity; interest rate risk; balance sheet and liquidity management; off-balance sheet arrangements; fair value determinations; asset quality; credit quality; credit losses; provision and allowance for credit losses, impairments, charge-offs, recoveries and changes in loan volumes; investment securities portfolio yields and values; ability to manage the impact of pandemics, natural disasters and other force majeure events; adoption and use of critical accounting policies; adoption and implementation of new accounting standards and their effect on the Company's financial results and the Company's financial reporting; utilization of non-GAAP financial metrics; declaration and payment of dividends; ability to pay dividends or coupons on the Company's 5.5% Series A Non-Cumulative Perpetual Preferred Stock, par value $0.01 per share, or the 4.125% Fixed-to-Floating Rate Subordinated Notes due November 20, 2029; mortgage origination volume; mortgage servicing and production revenue; insurance commission revenue; implementation and execution of cost savings initiatives; ability to successfully litigate, resolve or otherwise dispense with threatened, pending, ongoing and future litigation and governmental, administrative and investigatory matters; ability to successfully complete pending or future acquisitions, dispositions and other strategic growth opportunities and initiatives; ability to successfully obtain regulatory approval for acquisitions and other growth initiatives; ability to successfully integrate and manage acquisitions; opportunities and efforts to grow market share; reputation; ability to compete with other financial institutions; ability to recruit and retain key employees and personnel; access to capital markets; availability of capital; investments in the securities of other financial institutions; and ability to operate the Company's regulatory compliance programs in accordance with applicable law.

Forward-looking statements are based upon management's expectations as well as certain assumptions and estimates made by, and information available to, the Company's management at the time such statements were made. Forward-looking statements are not historical facts, are not guarantees of future results or performance and are subject to certain known and unknown risks, uncertainties and other factors that are beyond the Company's control and that may cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. These risks, uncertainties and other factors include, without limitation, potential delays or other problems in implementing and executing the Company's growth, expansion and acquisition strategies, including delays in obtaining regulatory or other necessary approvals or the failure to realize any anticipated benefits or synergies from any acquisitions or growth strategies; the risks of changes in interest rates and their effects on the level and composition of deposits, loan demand and the values of loan collateral, securities and interest sensitive assets and liabilities; the failure of assumptions underlying the establishment of reserves for possible credit losses, fair value for loans and other real estate owned; changes in real estate values; the availability of and access to capital; possible downgrades in the Company's credit ratings or outlook which could increase the costs or availability of funding from capital markets; the ability to attract new or retain existing deposits or to retain or grow loans; the ability to grow additional interest and fee income or to control noninterest expense; the potential impact of the proposed phase-out of the London Interbank Offered Rate ("LIBOR") or other changes involving LIBOR; competitive factors and pricing pressures, including their effect on the Company's net interest margin; general economic, unemployment, credit market and real estate market conditions, and the effect of such conditions on the creditworthiness of borrowers, collateral values, the value of investment securities and asset recovery values; changes in legal, financial and/or regulatory requirements; recently enacted and potential legislation and regulatory actions and the costs and expenses to comply with new and/or existing legislation and regulatory actions, including those actions in response to the COVID-19 pandemic such as the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the "Economic Aid Act") and any related rules and regulations; changes in U.S. Government monetary and fiscal policy; FDIC special assessments or changes to regular assessments; the enforcement efforts of federal and state bank regulators; possible adverse rulings, judgments, settlements and other outcomes of pending, ongoing and future litigation and governmental, administrative and investigatory matters (including litigation or actions arising from the Company's participation in and administration of programs related to the COVID-19 pandemic (including, among other things, the PPP loan programs authorized by the CARES Act and the Economic Aid Act); the ability to keep pace with technological changes, including changes regarding maintaining cybersecurity; the impact of failure in, or breach of, the Company's operational or security systems or infrastructure, or those of third parties with whom the Company does business, including as a result of cyber-attacks or an increase in the incidence or severity of fraud, illegal payments, security breaches or other illegal acts impacting the Company or the Company's customers; natural disasters or acts of war or terrorism; the adverse effects of the ongoing global COVID-19 pandemic, including the magnitude and duration of the pandemic, and the effect of actions taken to mitigate the impact of the COVID-19 pandemic on the Company, the Company's employees, the Company's customers, the global economy and the financial markets; international or political instability; impairment of the Company's goodwill or other intangible assets; losses of key employees and personnel; adoption of new accounting standards, including the effects from the adoption of the current expected credit loss methodology on January 1, 2020, or changes in existing standards; the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the definitive merger agreement between the Company and Cadence; the outcome of any legal proceedings that may be instituted against the Company or Cadence; the possibility that the proposed transaction will not close when expected or at all because required regulatory, shareholder or other approvals are not received or other conditions to the closing are not satisfied on a timely basis or at all, or are obtained subject to conditions that are not anticipated; the ability of the Company and Cadence to meet expectations regarding the timing, completion and accounting and tax treatments of the proposed transaction; the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of the common stock of either or both parties to the proposed transaction; the possibility that the anticipated benefits of the proposed transaction will not be realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where the Company and Cadence do business; certain restrictions during the pendency of the proposed transaction that may impact the parties' ability to pursue certain business opportunities or strategic transactions; the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; diversion of management's attention from ongoing business operations and opportunities; the possibility that the parties may be unable to achieve expected synergies and operating efficiencies in the merger within the expected timeframes or at all and to successfully integrate Cadence's operations and those of the Company; such integration may be more difficult, time consuming or costly than expected; revenues following the proposed transaction may be lower than expected; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed transaction; the Company and Cadence's success in executing their respective business plans and strategies and managing the risks involved in the foregoing; the dilution caused by the Company's issuance of additional shares of its capital stock in connection with the proposed transaction and other factors as detailed from time to time in the Company's press and news releases, periodic and current reports and other filings the Company files with the FDIC.

The foregoing factors should not be construed as exhaustive and should be read in conjunction with those factors that are set forth from time to time in the Company's periodic and current reports filed with the FDIC, including those factors included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 under the heading "Item 1A. Risk Factors," in the Company's Quarterly Reports on Form 10-Q and in the Company's Current Reports on Form 8-K.

Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date of this news release, if one or more events related to these or other risks or uncertainties materialize, or if the Company's underlying assumptions prove to be incorrect, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Accordingly, undue reliance should not be placed on any forward-looking statements. The forward-looking statements speak only as of the date of this news release, and the Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by applicable law. New risks and uncertainties may emerge from time to time, and it is not possible for the Company to predict their occurrence or how they will affect the Company.  All written or oral forward-looking statements attributable to the Company are expressly qualified in their entirety by this section.

SOURCE BancorpSouth Bank