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BXS surpasses Trustmark as state

BancorpSouth balances acquisitions with internal growth

TUPELO — BancorpSouth has surpassed Trustmark as Mississippi’s largest bank in assets.

Last month, Jackson-based Trustmark Corp. (Nasdaq: TRMK), the holding company for Trustmark National Bank, listed $1.6 billion in market capitalization and $6.8 billion in assets.

Tupelo-based BancorpSouth Inc. (NYSE: BXS), a bank holding company with commercial and financial services operations in more than 240 locations in Alabama, Arkansas, Louisiana, Mississippi, Tennessee and Texas, listed $1.39 billion in market capitalization and $9.3 billion in assets.

The activity that catapulted BancorpSouth to Mississippi’s largest bank and the 49th largest commercial bank in the U.S. was the bank’s acquisition of El Dorado, Ark.-based First United Bancshares Inc. (Nasdaq: UNTD) that was approved by shareholders of both corporations last August.

With First United’s $2.7 billion in assets, 11 affiliate banks and a subsidiary trust company and 69 banking locations with approximately 1,000 employees in Arkansas, Louisiana and Texas, it boosted BancorpSouth’s total assets past the $9 billion mark and its employment to nearly 4,000.

“Happily, approximately half of our growth in the decade prior to the acquisition in Arkansas, Louisiana and Texas has been internally generated,” said Aubrey B. Patterson Jr., BancorpSouth chairman and CEO. “It has been a very balanced growth. If you look at the markets where we already had a presence at the beginning of the 1990s, you’ll see we’ve had significantly faster growth than almost every other competitor, which has given us great opportunities to leverage the company.”

Since the early 1990s, BancorpSouth has aggressively acquired banks to expand its interstate operations.

“We have been acquisitive on a rational basis, though we haven’t pursued every opportunity we’ve had,” Patterson said. “We try to look for growth opportunities in a good mixture of community banks and metropolitan areas and we try to look at contiguous market areas where expanding our existing footprint makes sense from a standpoint of how we will manage it after the fact. We’ve been able to consistently grow deposits — the raw material of this business — and grow loans both at a faster rate than our competition.”

At year-end, BancorpSouth and its subsidiaries reported total deposits of approximately $7.48 billion.

“What’s often overlooked in acquisitions is the importance of maintaining customer support levels and the customer base that you acquire,” said Patterson. “When you see surveys that tell you what’s important in banking to customers, you’ll see that more than half say the most important attribute is good customer service. If the level of service deteriorates after a merger, it doesn’t matter what you say to bring customers back. It’s what you do.”

Patterson added, “After the merger, we told Wall Street analysts that we would take a year to execute the merger and assimilate the system and do all the conversions. We obviously could do it quicker by wringing out savings and laying people off like some other banks have done, but when they do that they have an enormous attrition of their customer base and the employees aren’t happy. We’re not lethargic about the process, but we want to balance what we do to make sure there’s no erosion in the quality of the service.”

Patterson said the bank is back where earnings per share is not adversely affected by the merger, even though one analyst said that BancorpSouth hasn’t quite turned the corner into maximum potential profitability. For the first six months of 2001, BancorpSouth reported a net income of $45.6 million. “In absolute dollars, we’re making record profits this year,” Patterson said.

BancorpSouth was originally established as Raymond Trice Banking Co. in a back office of a hardware store in Verona in 1886. The bank moved its operations to nearby Tupelo a decade later and its name was changed to Bank of Lee County. Later its name changed to Bank of Tupelo, and in 1966 to Bank of Mississippi.

In 1986, it became Mississippi’s first statewide bank after the merger of Hattiesburg-based First Mississippi National Bank, which had offices on the Gulf Coast and in Jackson. In 1999, the bank’s name changed to BancorpSouth Bank. Since then, the word “bank” was removed from the name to reflect BancorpSouth’s diversity as a financial service company.

BancorpSouth’s principle activities include commercial and retail banking services, personal and corporate trust, agency and investment services, consumer lending, credit life insurance, investment brokerage and the sale of insurance products. Real estate mortgages represent more than two-thirds of its loan portfolio.

“We keep an eye on having the best long-term return to our shareholders,” Patterson said. “To be successful in today’s world, you can’t be just a plain vanilla bank that takes deposits and makes loans. You have to be an investment company, have brokerage operations, wealth management functions, insurance mortgage lending, credit cards and a variety of financial services.

“There’s nothing Bank of America can offer people in Mississippi that we can’t offer in terms of retail banking services. All that takes capital and manpower, a willingness to develop on a scale to make it economical.”

Patterson said BancorpSouth’s long-range plans are for continued yet controlled growth. “Not just growth for growth’s sake,” Patterson said. “We’ve never not been in the mode of acquiring. This is my 30th year in the company. When I started, we were a $100-million bank. Now we’re the largest in the state.”

Contact MBJ contributing writer Lynne Wilbanks Jeter at lwjeter@yahoo.com or (601) 853-3967.

About Lynne W. Jeter

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