BancorpSouth Bank

Sizeable contribution to revenues from noninterest income Large base of low-cost and non-interest-bearing deposits Good loan credit quality over the last several years Substantial returns of capital to equity shareholders High percentage of construction and development loans Frequent, though relatively small, acquisitions S&P Global Ratings' positive outlook on BancorpSouth Bank primarily reflects the potential that the bank's capital ratios could rebound to a level we view as strong, provided earnings remain good, credit quality remains excellent, and the bank continues to focus primarily on organic growth. The positive outlook also reflects some potential that the bank could further improve its competitive market position and revenue diversification, while maintaining conservative business and financial policies, although we view this as less likely.

...Outlook: Positive S&P Global Ratings' positive outlook on BancorpSouth Bank primarily reflects the potential that the bank's capital ratios could rebound to a level we view as strong, provided earnings remain good, credit quality remains excellent, and the bank continues to focus primarily on organic growth. The positive outlook also reflects some potential that the bank could further improve its competitive market position and revenue diversification, while maintaining conservative business and financial policies, although we view this as less likely. We could raise the ratings by one notch over the next two years if we believe the bank's risk-adjusted capital (RAC) ratio will rise and stay above 10%, which could result from a continuation of robust earnings, a reduction in share buybacks, a stabilization in its dividend payout ratio, or less acquisition activity. We could also raise the rating if we view the company's financial performance as commensurate with higher rated peers. Conversely,...

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