<PAGE> 1
Filed by BancorpSouth, Inc. pursuant to
Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934.
Subject Company: BancorpSouth, Inc.
Commission File No.: 0-10826
EXPLANATORY NOTE
This filing pursuant to Rule 425 under the Securities Act of 1933 contains a
form of correspondence mailed, and/or to be mailed, to certain shareholders of
BancorpSouth, Inc., and a press release and certain investor presentation
materials relating to an Agreement and Plan of Merger, dated as of April 16,
2000, between BancorpSouth, Inc. and First United Bancshares, Inc. The press
release and investor presentation materials were previously included as exhibits
to a Current Report on Form 8-K filed by BancorpSouth, Inc. on April 17, 2000.
April 26, 2000
- ------------------------
- ------------------------
- ------------------------
- ------------------------
Dear ______________:
I would like to give you an update of the facts concerning our recently
announced agreement to acquire First United Bancshares. I am enclosing a copy of
our press release and the presentation I made to banking stock analysts on
Monday, April 17, 2000. I hope you will find this information helpful.
First United Bancshares is a multi-bank holding company headquartered
in El Dorado, Arkansas. The company consists of eleven subsidiary banks and one
trust subsidiary in Arkansas, Louisiana, and Texas. The total assets of the
company are just over $2.7 billion and total deposits are approximately $2.3
billion. The transaction is to be accounted for as a pooling of interests. We
believe it is very attractively priced from our perspective as BancorpSouth
shareholders. We currently expect that our operating earnings per share will be
positively impacted in the first full year of operations.
We are particularly pleased to be associating with bankers of the
caliber of Jim Kelley, First United's CEO, and the outstanding staff which
surrounds him. First United's three-state operation would bring to six the total
number of states served by the new BancorpSouth, which would have assets of
approximately $8.6 billion based on current totals. We expect the merger with
First United will offer many exciting new opportunities for the sale of
specialized banking services already available to BancorpSouth customers.
While the marketplace is sometimes critical of acquisitions in today's
banking environment, without exception, analysts who have commented to me on the
transaction have had uniformly positive things to say. We're certainly gratified
by this validation of our judgment. We believe this to be a great new
opportunity for BancorpSouth as we seek to expand our footprint and become a
Mid-South regional banking franchise.
Thank you for your interest and your loyal support of our efforts on
your behalf. We will keep you posted on this significant event as we proceed
through the merger process.
Yours truly,
/s/ Aubrey B. Patterson
-----------------------------------
Aubrey B. Patterson
Chairman and CEO
ABP:cw
Enclosures
<PAGE> 2
IMPORTANT FEDERAL SECURITIES LAW DISCLOSURE:
Certain statements contained in this letter and the enclosures 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," or "intend." These
forward-looking statements include, without limitation, those relating to the
Merger's positive impact on future earnings, accounting treatment and
opportunities presented by the merger.
We caution you not to place undue reliance on the forward-looking
statements contained in this letter and the enclosures in that actual results
could differ materially from those indicated in such forward-looking statements,
due to a variety of factors. Those factors include, but are not limited to,
failure to obtain required shareholder or regulatory approvals, the companies'
failure to consummate the merger, inability to successfully integrate the
companies after the merger, material adverse changes in the Companies' financial
conditions, changes in economic conditions and government fiscal and monetary
policies, fluctuations in prevailing interest rates, the ability of the
BancorpSouth to compete with other financial services companies, changes in
BancorpSouth's operating or expansion strategy, geographic concentration of
BancorpSouth's assets, the ability of BancorpSouth to attract, train, and retain
qualified personnel, the ability of BancorpSouth to effectively market its
services and products, BancorpSouth's dependence on existing sources of funding,
and other factors generally understood to affect the financial results of
financial service companies, and other risks detailed from time to time in
BancorpSouth's news releases and 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.
This letter and the enclosures may be deemed to be solicitation
material with respect to the proposed merger of BancorpSouth and First United.
BancorpSouth and its directors may be deemed to be participants in the
solicitation of proxies with respect to a shareholder meeting to be held in
connection with such merger. Information concerning the participants in the
solicitation is set forth in the definitive proxy statement filed by
BancorpSouth with the Securities and Exchange Commission on March 31, 2000 for
its 2000 annual meeting of shareholders. In connection with the proposed merger,
BancorpSouth will file a registration statement on Form S-4 with the Securities
and Exchange Commission. Shareholders of BancorpSouth and First United are
encouraged to read the registration statement, including the joint proxy
statement/prospectus that will be part of the registration statement, because it
will contain important information about the merger, BancorpSouth and First
United. After the registration statement is filed with the SEC, it will be
available for free, both on the SEC's web site (www.sec.gov) and from
BancorpSouth's and First United's corporate secretaries.
<PAGE> 3
NEWS RELEASE
FOR THE NEWS MEDIA:
TO PARTICIPATE IN A 9:00 A.M. CDT, MONDAY, APRIL 17,
TELE-NEWS CONFERENCE, DIAL TOLL-FREE 1-888-831-6081, CODE # 52031
FOR ANALYSTS:
TO PARTICIPATE IN A 10:00 A.M., CDT, MONDAY, APRIL 17,
ANALYSTS PRESENTATION, DIAL TOLL-FREE 1-800-857-4882, CODE # 57376
Financial Contact: BancorpSouth, L. Nash Allen, 662-680-2330
First United, John Copeland, 870-863-3181
Media Contact: BancorpSouth: Harry Baxter, 662-680-2410
Randy Burchfield, 662-680-2216
First United, Cindy Alphin, 870-863-3181, #332
On-line: www.bancorpsouth.com
FOR IMMEDIATE RELEASE April 17, 2000
BANCORPSOUTH AND FIRST UNITED BANCSHARES
ANNOUNCE MERGER AGREEMENT
EL DORADO, Ark. and TUPELO, Miss. - April 17, 2000 - BancorpSouth, Inc. (NYSE:
BXS) and First United Bancshares, Inc. (NASDAQ: UNTD) said today they have
signed a definitive agreement for the merger of BancorpSouth and First United,
which would create a six-state regional financial services company.
Under the terms of the agreement which has been approved by the boards of both
companies, First United stockholders would receive 1.125 shares of BancorpSouth
common stock in exchange for each share of First United stock. The transaction,
based on BancorpSouth's closing stock price of $16.00 on April 14, 2000, values
each First United share at $18.00, or a premium to First United's closing price
on April 14th of approximately 43%, for a total transaction value of
approximately $455 million.
The transaction is expected to be completed in the third quarter of this year
and to be accounted for as a pooling of interests. Approval of banking
regulators and both BancorpSouth and First United shareholders is required. The
transaction is expected to be tax-free for First United stockholders. Each party
has granted the other an option to purchase up to 19.9% of its outstanding
shares in certain circumstances. BancorpSouth expects to incur related after-tax
merger and restructuring charges of approximately $20 million. The merger is
expected to be accretive to earnings in 2001.
First United, based in El Dorado, Ark., at year-end 1999 had $2.7 billion in
assets. It operates 11 affiliate banks and a non-bank subsidiary, First United
Trust Company N.A., from 69 banking locations with approximately 1,000 employees
in Arkansas, Louisiana and Texas. The company has a strong position in the major
markets it serves.
"We are dedicated to our communities, our employees and our shareholders. That
is why this merger is such a good fit. BancorpSouth, like First United, has
always been very close to the people and communities it serves," said James V.
Kelley, Chairman of the Board, President and CEO of First United. "BancorpSouth
serves similar markets in Mississippi, Alabama and Tennessee to the ones we
serve in Arkansas, Louisiana and Texas. The level of technology and
<PAGE> 4
information systems that BancorpSouth brings to this merger would enhance our
ability to identify and meet the needs of our customers. BancorpSouth is an
ideal partner for us."
"First United's dedicated staff has earned a reputation for expertise and
service in its market area. Our similarities are many, and the merging of our
companies is an excellent opportunity for us all. Just like First United, we
take pride in the fact that we are close to the communities we serve," said
Aubrey B. Patterson, Chairman and CEO of BancorpSouth. "We both understand the
importance of building long lasting relationships with our customers. In fact,
our success and profitability depend on our ability to add value in the lives of
our stakeholders - our employees, our shareholders and our customers. By uniting
our energies, our bank will leave a regional footprint over six states."
Kelley would become president and chief operating officer of BancorpSouth after
the merger, while Patterson would continue as Chairman and CEO. On a combined
basis, BancorpSouth would have 13 members on its board of directors, of which
four would come from the current First United Board. The definitive agreement
with regard to the transaction has been signed. Each party performed due
diligence on the other during the week of April 10th. An additional three-week
due diligence period will commence upon the announcement of the transaction
during which either party will have the right to terminate the transaction only
in the event of a material difference in expectations based upon information
presented in the companies' 10-Ks for 1999.
The combined company would have assets of approximately $8.6 billion, deposits
of $7.25 billion and shareholders' equity of $758 million. It would operate in
Alabama, Arkansas, Louisiana, Mississippi, Tennessee and Texas. The merger would
make BancorpSouth the largest Mississippi-based banking company in terms of
total assets.
Headquartered in Tupelo, Miss., BancorpSouth is a financial services company
with $5.8 billion in assets operating 167 banking and mortgage locations and 170
ATMs in 87 Mississippi, Tennessee and Alabama communities. The Company also
provides investment services through its subsidiary, BancorpSouth Investment
Services Inc. and insurance services through BancorpSouth Insurance Services.
BancorpSouth's common stock is traded on the New York Stock Exchange under the
symbol BXS.
###
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," OR "INTEND." THESE FORWARD-LOOKING
STATEMENTS INCLUDE, WITHOUT LIMITATION, THOSE RELATING TO THE COMPANY'S FUTURE
CHANGES, THE ACCRETIVE EFFECT OF THE MERGER, ACCOUNTING AND TAX TREATMENTS OF
THE MERGER AND THE EFFECTS OF THE MERGER.
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, DUE TO A VARIETY OF
FACTORS. THOSE FACTORS INCLUDE, BUT ARE NOT LIMITED TO, FAILURE TO OBTAIN
REQUIRED SHAREHOLDER OR REGULATORY APPROVALS, THE COMPANIES' FAILURE TO
CONSUMMATE THE MERGER, INABILITY TO SUCCESSFULLY INTEGRATE THE COMPANIES AFTER
THE MERGER, MATERIALLY ADVERSE CHANGES IN THE COMPANIES' FINANCIAL CONDITIONS,
CHANGES IN ECONOMIC CONDITIONS AND GOVERNMENT FISCAL AND MONETARY POLICIES,
FLUCTUATIONS IN PREVAILING INTEREST RATES, THE ABILITY OF THE COMPANY TO COMPETE
WITH OTHER FINANCIAL SERVICES COMPANIES, CHANGES IN THE
<PAGE> 5
COMPANY'S OPERATING OR EXPANSION STRATEGY, GEOGRAPHIC CONCENTRATION OF THE
COMPANY'S ASSETS, THE ABILITY OF THE COMPANY TO ATTRACT, TRAIN, AND RETAIN
QUALIFIED PERSONNEL, THE ABILITY OF THE COMPANY TO EFFECTIVELY MARKET ITS
SERVICES AND PRODUCTS, THE COMPANY'S DEPENDENCE ON EXISTING SOURCES OF FUNDING,
AND OTHER FACTORS GENERALLY UNDERSTOOD TO AFFECT THE FINANCIAL RESULTS OF
FINANCIAL SERVICE COMPANIES, AND OTHER RISKS DETAILED FROM TIME TO TIME IN THE
COMPANY'S NEWS RELEASES AND 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.
THIS NEWS RELEASE MAY BE DEEMED TO BE SOLICITATION MATERIAL WITH RESPECT TO THE
PROPOSED MERGER OF BANCORPSOUTH AND FIRST UNITED. BANCORPSOUTH AND ITS DIRECTORS
MAY BE DEEMED TO BE PARTICIPANTS IN THE SOLICITATION OF PROXIES WITH RESPECT TO
A SHAREHOLDER MEETING TO BE HELD IN CONNECTION WITH SUCH MERGER. BANCORPSOUTH'S
DIRECTORS INCLUDE SHED H. DAVIS, HASSELL H. FRANKLIN, FLETCHER H. GOODE, M.D.,
W. G. HOLLIMAN, JR., A. DOUGLAS JUMPER, TURNER O. LASHLEE, AUBREY B. PATTERSON,
ALAN W. PERRY, TRAVIS E. STAUB, ANDREW R. TOWNES, D.D.S. AND LOWERY A. WOODALL.
AS OF JANUARY 31, 2000, HASSELL H. FRANKLIN WAS THE BENEFICIAL OWNER OF
APPROXIMATELY 923,461 SHARES OF BANCORPSOUTH COMMON STOCK (OR APPROXIMATELY
1.61% OF THE OUTSTANDING SHARES OF BANCORPSOUTH COMMON STOCK), AND EACH OF THE
OTHER DIRECTORS OF BANCORPSOUTH BENEFICIALLY OWNED LESS THAN 1% OF THE
OUTSTANDING SHARES OF BANCORPSOUTH COMMON STOCK. FIRST UNITED AND ITS DIRECTORS
MAY BE DEEMED TO BE PARTICIPANTS IN THE SOLICITATION OF PROXIES WITH RESPECT TO
A SHAREHOLDER MEETING TO BE HELD IN CONNECTION WITH SUCH MERGER. FIRST UNITED'S
DIRECTORS INCLUDE E. LARRY BURROW, CLAIBORNE P. DEMING, AL GRAVES, JR., TOMMY
HILLMAN, JAMES V. KELLEY, ROY E. LEDBETTER, MICHAEL F. MAHONY, RICHARD H. MASON,
JACK W. MCNUTT, GEORGE F. MIDDLEBROOK, III, R. MADISON MURPHY, ROBERT C. NOLAN,
CAL PARTEE, JR., CAROLYN TENNYSON AND JOHN D. TRIMBLE, JR. AS OF FEBRUARY 1,
2000, CLAIBORNE P. DEMING, R. MADISON MURPHY, ROBERT C. NOLAN AND CAL PARTEE,
JR. WERE THE BENEFICIAL OWNERS, RESPECTIVELY, OF APPROXIMATELY 393,290 (1.55%),
602,440 (2.38%), 531,756 (2.10%) AND 465,506 (1.84%) SHARES OF FIRST UNITED
BANCSHARES, INC. COMMON STOCK AND EACH OF THE OTHER DIRECTORS OF FIRST UNITED
BENEFICIALLY OWNED LESS THAN 1% OF THE OUTSTANDING SHARES OF FIRST UNITED COMMON
STOCK. JAMES V. KELLEY HAS ENTERED INTO A STOCK BONUS AGREEMENT AND A CHANGE OF
CONTROL AGREEMENT WITH BANCORPSOUTH WHICH WILL BE EFFECTIVE UPON CLOSING OF THE
MERGER.
IN CONNECTION WITH THE PROPOSED MERGER, BANCORPSOUTH WILL FILE A
REGISTRATION STATEMENT ON FORM S-4 WITH THE SECURITIES AND EXCHANGE COMMISSION.
SHAREHOLDERS OF BANCORPSOUTH AND FIRST UNITED ARE ENCOURAGED TO READ THE
REGISTRATION STATEMENT, INCLUDING THE JOINT PROXY STATEMENT/PROSPECTUS THAT WILL
BE PART OF THE REGISTRATION STATEMENT, BECAUSE IT WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE MERGER, BANCORPSOUTH AND FIRST UNITED. AFTER THE
REGISTRATION STATEMENT IS FILED WITH THE SEC, IT WILL BE AVAILABLE FOR FREE,
BOTH ON THE SEC'S WEB SITE (WWW.SEC.GOV) AND FROM BANCORPSOUTH'S AND FIRST
UNITED'S CORPORATE SECRETARIES.
###
<PAGE> 6
Investor Presentation Materials
<PAGE> 7
[LOGO BANCORPSOUTH]
EXPANDING THE
MID-SOUTH FINANCIAL
SERVICES PLATFORM
FIRST UNITED BANCSHARES, INC.
April 17, 2000
<PAGE> 8
Forward Looking Statement
The forward-looking statements being made today are subject to risks and
uncertainties. The actual results of BancorpSouth, Inc. ("BancorpSouth") and
First United Bancshares, Inc. ("First United") may differ materially from those
set forth in such forward-looking statements. Reference is made to
BancorpSouth's and First United's reports filed with the Securities and Exchange
Commission for a discussion of factors that may cause such differences to occur.
1
<PAGE> 9
Key Transaction Terms
<TABLE>
<S> <C>
Fixed Exchange Ratio: 1.125 BancorpSouth shares per First United Share
Purchase Price per First United Share: $18.00(1)
Transaction Value: $460 million(1)(2)
Implied Market Premium: 42.6%(3)
Pro Forma Market Capitalization: $1,375 million
Company Name: BancorpSouth, Inc.
Headquarters: Tupelo, MS
Board Representation: 4 Additional Directors from First United (Total of 13)
Executive Management: Aubrey B. Patterson, Chairman & CEO
James V. Kelley, President & COO
L. Nash Allen Jr., CFO
</TABLE>
(1) Based on BancorpSouth share price of $16.00 as of April 14, 2000
(2) Based on 25.6 million fully diluted First United shares outstanding as of
December 31, 1999
(3) Based on First United price of $12.625 on April 14, 2000
2
<PAGE> 10
Key Structural Terms
<TABLE>
<S> <C>
Transaction Structure: Pooling-of-interests
Tax-free exchange of shares
Ownership Split: 66.8% BXS / 33.2% UNTD
Lock-up Option: Cross lock-ups of 19.9%, struck at market
Expected Closing: 3Q 2000
Expected Merger-Related Charges: $31 M pre-tax, $20 M after-tax
Due Diligence: Pre-signing - Week of April 10, 2000
Post-signing - Completed by May 8, 2000
Required Approvals: Regulatory:
- Federal Reserve
- FDIC
- OCC
- States of Mississippi, Arkansas, Louisiana & Texas
BancorpSouth and First United Shareholders
</TABLE>
3
<PAGE> 11
FIRST UNITED BANCSHARES, INC.
- First United Bancshares, Inc. is a multi-bank holding company
that operates 11 subsidiary banks and 1
- 62 branches throughout Arkansas, Northern Louisiana and
Eastern Texas
- At December 31, 1999, First United had total consolidated
assets of $2.7 billion, loans of $1.5 billion,
- Today announced 1st-Quarter 2000 earnings of $0.34 per share,
a 6.3% increase over 1st-Quarter 1999
4
<PAGE> 12
TRANSACTION RATIONALE
- - Entry into Attractive New Markets
- - Leveraging First United's Branch Network
- - Strong Management Additions
- - Fairly Priced Transaction
- - Financially Attractive
- - History of Successful Merger Integration and Customer Retention
- - Exciting Opportunity
5
<PAGE> 13
BUILDING A SIX STATE REGIONAL PLATFORM
[MAP]
Pro Forma Deposits by State
<TABLE>
<CAPTION>
State Deposits % of Total
-------- ----------
<S> <C> <C>
Mississippi $3,367 48.2%
Arkansas 1,520 21.8
Tennessee 825 11.8
Alabama 525 7.5
Texas 486 7.0
Louisiana 256 3.7
------ -----
Total: $6,979 100.0%
====== =====
</TABLE>
MORE THAN HALF OF PRO FORMA DEPOSITS OUTSIDE HOME STATE
SOURCE: SNL SECURITIES; DATA AS OF JUNE 30, 1999.
6
<PAGE> 14
ENTRY INTO ATTRACTIVE NEW MARKETS
DIVERSIFIED, GROWING MARKETS WITH AVERAGE MEDIAN INCOME GROWTH
RATES ABOVE THE NATIONAL AVERAGE OF 12.2%
<TABLE>
<CAPTION>
MARKET
SHARE MEDIAN INCOME
DEPOSITS RANK GROWTH RATE (2) MAJOR INDUSTRIES
-------- ------ --------------- ----------------
<S> <C> <C> <C> <C>
Tupelo, MS(1) $433.4 1 24.2% Mfg./Healthcare
Hattiesburg, MS 408.4 1 14.0 Education/Healthcare
Jackson, TN 288.1 1 18.7 Mfg./Retail Services
Fort Smith, AR-OK 469.3 2 13.1 Healthcare/Light Mfg.
Jackson, MS 486.6 3 16.4 Telecom/Government
Biloxi-Gulfport, MS 255.8 4 15.4 Tourism/Military
Memphis, TN-AR-MS 488.0 6 15.3 Distribution Center
Shreveport-Bossier City, LA 104.8 6 14.8 Tourism/Energy
Monroe, LA 74.3 6 12.4 Agriculture/Education
Birmingham, AL 206.3 11 15.9 Manufacturing
</TABLE>
(1) City of Tupelo and surrounding counties
(2) Source: SNL Branch Migration; growth rates span 2000-2004
7
<PAGE> 15
CHANGING THE REGIONAL COMPETITIVE LANDSCAPE
<TABLE>
<CAPTION>
MARKET MARKET
RANK INSTITUTION DEPOSITS BRANCHES SHARE CAPITALIZATION(1)(1)
----------- -------- -------- ------ --------------------
<S> <C> <C> <C> <C> <C>
1 Regions $11,556 293 6.4%. $ 4,563
2 AmSouth 9,559 257 5.3. 5,708
3 Union Planters 8,149 307 4.5. 3,859
- -----------------------------------------------------------------------------------------------
4 BXS/UNTD PRO FORMA 6,979 229 3.9. 1,375
- -----------------------------------------------------------------------------------------------
4 First Tennessee 6,971 71 3.9. 2,395
5 SouthTrust 6,712 94 3.7. 4,164
6 BANCORPSOUTH 4,717 167 2.6. 915
7 Bank of America 4,209 101 2.3. 83,138
8 Trustmark 3,848 139 2.1. 1,253
9 Hibernia 3,122 80 1.7. 1,642
10 National Commerce 2,841 46 1.6. 1,920
12 FIRST UNITED BANCSHARES 2,262 62 1.3. 323
</TABLE>
N.B. Region defined as pro forma MSA's of BancorpSouth and First United
(1) Fully diluted market capitalizations as of April 14, 2000
Source: SNL Branch Migration data as of June 30, 1999
8
<PAGE> 16
LEVERAGING FIRST UNITED'S BRANCH NETWORK
- - Expanded product offerings for all First United customers:
- Commercial Insurance
- Life Insurance
- Trust and Brokerage
- Mortgage Banking
- Credit & Debit Cards
- Leasing
- Cash Management
- Student Loans
- - Successful implementation of STAR sales and service process into First
United markets
- - First United low cost funding (20 bps advantage vs. BancorpSouth) used
to support loan growth throughout BancorpSouth existing markets
9
<PAGE> 17
APPLYING FIRST UNITED'S EXCESS LIQUIDITY & CAPITAL
- - Redeployment of excess liquidity into higher-yielding assets
- First United has AFS securities of $729 million, yielding
6.21%
- First United has a loan to deposit ratio of 66.1%
- - Pick-up in BancorpSouth capital ratios can be leveraged in future
purchase accounting acquisitions or balance sheet growth
<TABLE>
<CAPTION>
BancorpSouth Pro Forma Pick-Up
------------ --------- -------
<S> <C> <C> <C>
Leverage Ratio 8.34% 8.76% 42 bps
Total Capital Ratio 12.80 13.67 87
Tier 1 Capital Ratio 11.49 12.70 121
</TABLE>
10
<PAGE> 18
STRONG MANAGEMENT ADDITIONS
- - James V. Kelley, 50
- First United CEO since 1985
- President and COO of the combined company
- Executive management expertise
- - Regional chairmen from First United:
- John Robert Graves South Arkansas Region
- Jim Harwood North and West Arkansas Region
- Gordon Lewis Texas and Louisiana Region
- - Knowledge of local markets
- - Help facilitate transition and retention of customers
11
<PAGE> 19
FAIRLY PRICED TRANSACTION
<TABLE>
<CAPTION>
TRANSACTION COMPARABLE TRANSACTION/
MULTIPLES MEDIAN COMPARABLES
<S> <C> <C> <C>
Price as Multiple of:
LTM Normalized EPS(1) 13.6x 14.7x 93%
Forward EPS(2) 12.9 13.4 96
Forward+1 EPS(2) 12.0 12.2 98
Book Value(1)(3) 1.74x 2.09x 83
Tangible Book Value(1)(3) 1.85 2.39 77
Premium to Deposits(1)(3) 9.4% 15.0% 63
Premium to Market(4) 42.6 27.2 157
</TABLE>
Note: Transactions include WFC / FSCO, NCBC / CCB and BBT / OV
(1) Based on First United financial results for the year ended December 31,
1999
(2) Earnings based on median IBES estimates as of April 14, 2000
(3) Book value includes the exercise of options
(4) Based on First United price of $12.625 on April 14, 2000
12
<PAGE> 20
RESTRUCTURING AND MERGER RELATED CHARGES
(Dollars in 000's, except per share amounts)
<TABLE>
<CAPTION>
PROJECTED
---------
AFTER TAX ESTIMATES 2000 2001
- ------------------- ------- ------
<S> <C> <C>
Legal, Accounting & Consulting $ 3,525 --
Data Processing Write-Offs and Charges 1,400 2,935
Change of Control, Retention & Other 2,975 465
Recognition of Loss on Sale of Securities 12,400 --
Total Charges $20,300 $ 3,400
</TABLE>
13
<PAGE> 21
EARNINGS ACCRETIVE
(Dollars in 000's, except per share amounts)
<TABLE>
<CAPTION>
PROJECTED
---------
NET INCOME (AFTER TAX ESTIMATES) 2000 2001
- -------------------------------- ------- ------
<S> <C> <C>
BancorpSouth Stand-alone (1) $ 83,000 $ 90,400
First United (1) 38,000 41,200
-------- --------
Pro Forma Combined Income $121,000 $131,600
Net Cost Savings 860 3,900
Increased Spread on AFS Securities (2) 2,200 2,200
Shift from HTM Securities to Loans(3) 850 1,700
Other Fee Income 600 1,100
-------- --------
Pro Forma Operating Income $125,510 $140,500
-------- --------
Operating EPS Stand-alone (1) $ 1.45 $ 1.58
Operating EPS Pro Forma (4) 1.46 1.64
% Accretion/(Dilution) 0.9% 3.8%
</TABLE>
(1) Based on IBES estimates as of April 14, 2000 for both BancorpSouth and
First United; 2002 earnings based on IBES long-term growth rate of 9.0%
for BancorpSouth and 8.6% for First United
(2) Assumes $600 million of First United AFS securities portfolio is sold
and redeployed at a 60 bps pre-tax gain in yield
(3) Assumes gradual shift from HTM portfolio to loans totaling $240 million
by end of year 2002 at a 160 bps pre-tax gain in yield
(4) Based on a pro forma fully diluted average shares outstanding of 86.0
million
14
<PAGE> 22
HISTORY OF SUCCESSFUL MERGER INTEGRATION
AND CUSTOMER RETENTION
================================================================================
<TABLE>
<CAPTION>
Current / Current /
Beginning Beginning
Deposits(1) Deposits(1)
1998 1995
- ---- ----
<S> <C> <C> <C> <C> <C>
HomeBanc Corp. AL Wes-Tenn Bancorp TN
The First Corp. AL Shelby Bank TN 111.8%
Alabama Bancorp AL 105.6% First Federal Bank MS
Merchants Capital MS
1994
----
1997 LF Bancorp MS
- ----
Iuka Guaranty Bank MS 98.2%
1992
Volunteer Bancshares TN
</TABLE>
In 1997, BancorpSouth successfully completed a charter consolidation process
(1) From announcement date to present
15
<PAGE> 23
AN EXCITING OPPORTUNITY
================================================================================
- Entry into Attractive New Markets
- Leveraging First United's Branch Network
- Strong Management Additions
- Fairly Priced Transaction
- Financially Attractive
- History of Successful Merger Integration and Customer
Retention
EXCITING OPPORTUNITY FOR BANCORPSOUTH AND
FIRST UNITED SHAREHOLDERS
16
<PAGE> 24
APPENDIX
SUPPLEMENT FINANCIAL INFORMATION
<PAGE> 25
PRO FORMA BALANCE SHEET
(Dollars in millions; data at Decembert 31, 1999)
<TABLE>
<CAPTION>
BXS UNTD PRO FORMA
<S> <C> <C> <C>
Cash & Equivalents $ 223 $ 118 $ 341
Securities 1,186 976 2,162
Gross Loans 4,054 1,488 5,542
Allowance for Loan Losses (56) (19) (74)
Intangibles & Other Assets 370 102 471
Total Assets $ 5,777 $ 2,666 $ 8,443
Deposits $ 4,815 $ 2,252 $ 7,067
Other Liabilities 464 155 619
Total Equity 497 260 757
Total Liabilities & Equity $ 5,777 $ 2,666 $ 8,443
KEY RATIOS:
Tier 1 Capital 11.49% 15.81% 12.70
Total Capital 12.80 15.92 13.67
Tangible Common 8.40 9.20 8.65
Tier 1 Leverage 8.34 9.67 8.76
</TABLE>
18
<PAGE> 26
PRO FORMA INCOME STATEMENT
(Dollars in millions; for the year ended December 31, 1999; no cost savings
assumed)
<TABLE>
<CAPTION>
BXS UNTD PRO FORMA
----- ----- ---------
<S> <C> <C> <C>
Net interest income after provision $ 203 $ 102 $ 305
Non-interest income 79 20 99
----- ----- -----
Total revenue (1) 282 122 404
Non-interest expense (178) (68) (245)
Other expense (5) (1) (6)
----- ----- -----
Pre-tax income 99 52 151
Tax Expense (30) (19) (49)
----- ----- -----
Net income $ 69 $ 33 $ 102
===== ===== =====
Key Ratios:
ROAA 1.26% 1.29% 1.26%
ROACE 14.7 12.7 13.9
Net interest margin 4.28 4.39 4.32
Efficiency ratio 60.7 54.6 58.9
Non-interest income/revenue 25.7 15.6 22.7
</TABLE>
(1) Net of provision for loan losses
19
<PAGE> 27
PRO FORMA LOAN & DEPOSIT COMPOSITION
<TABLE>
<CAPTION>
------------------ ------------------ ------------------
BXS UNTD PRO FORMA
------------ -------------- -------------
$ % $ % $ %
------------------ ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
GROSS LOANS
Commercial & Agriculture $ 371 9.0% $ 341 22.9% $ 712 12.7%
Commercial Real Estate 1,408 34.1 492 32.9 1,900 33.8
Consumer & Installment 978 23.7 219 14.7 1,197 21.3
Residential Real Estate 1,043 25.3 437 29.3 1,480 26.3
Lease Financing & Other 331 8.0 4 0.3 335 6.0
DEPOSITS
Demand:
Interest Bearing $1,075 22.3% $ 485 21.5% $1,560 22.1%
Non-Interest Bearing 615 12.8 352 15.6 967 13.7
Savings 800 16.6 138 6.1 938 13.3
Time Deposit 2,326 48.3 1,277 56.7 3,603 51.0
</TABLE>
N.B. Financial data as of December 31, 1999
20
<PAGE> 28
PRO FORMA ASSET QUALITY
(Dollars in thousands; financial data at December 31, 1999)
<TABLE>
<CAPTION>
BXS UNTD PRO FORMA
------- ------- ---------
<S> <C> <C> <C>
Non-accrual loans $ 5,150 $ 8,202 $13,352
Restructured loans 91 1,034 1,125
Loans 90+ days past due 14,378 2,933 17,311
------- ------- -------
Non-performing loans 19,619 12,169 31,788
Other real estate owned 7,764 3,418 11,182
------- ------- -------
Non-performing assets $27,383 $15,587 $42,970
======= ======= =======
KEY RATIOS:
Non-performing loans / loans 0.48% 0.82% 0.57%
Non-performing assets / assets 0.47 0.58 0.51
Allowance / NPL's 2.84x 1.54x 2.34x
Allowance / NPA's 2.03 1.20 1.73
</TABLE>
N.B. Financial data as of December 31, 1999
21
<PAGE> 29
FIRST UNITED HISTORICAL FINANCIALS
<TABLE>
<CAPTION>
1997 1998 1999 CAGR
---------- ---------- ---------- -----
<S> <C> <C> <C> <C>
Income Statement:
Net interest income $ 90.7 $ 94.4 $ 104.9 7.6%
Provision for losses 5.2 3.2 3.1 NM
Non-interest income (1) 18.1 17.8 19.4 3.7
Non-interest expense 68.0 65.3 67.9 NM
Net income $ 25.8 $ 30.3 $ 33.5 13.9%
Balance Sheet:
Total assets $ 2,355.3 $ 2,516.5 $ 2,666.0 6.4%
Loans(2) 1,213.3 1,353.2 1,488.4 10.8
Deposits 1,990.2 2,134.0 2,251.6 6.4
Shareholders' equity 234.5 255.6 259.7 5.2
</TABLE>
(1) Excludes securities gains
(2) Net of unearned income
22
<PAGE> 30
BANCORPSOUTH Q1 2000 INCOME STATEMENT
<TABLE>
<CAPTION>
------------- ------------- ---------------
THREE MONTHS THREE MONTHS
ENDED 3/31/00 ENDED 3/31/99 PERCENT CHANGE
------------- ------------- ---------------
<S> <C> <C> <C>
Net interest income after provision $ 52.4 $ 49.3 6.3%
Non-interest income 21.5 20.1 7.0
-------- --------
Total revenue (1) 73.9 69.4 6.5
Non-interest expense (46.6) (46.9) 0.6
-------- --------
Pre-tax income 27.3 22.5 21.3
Tax expense (9.2) (6.2) (48.4)
-------- --------
Net income $ 18.2 $ 16.3 11.7
======== ========
Diluted EPS $ 0.32 $ 0.29 10.3
KEY RATIOS:
ROAA (2) 1.25% 1.25%
ROACE (2) 14.7 14.4
Net interest margin (2) 4.21 4.29
Efficiency ratio 60.3 64.7
Non-interest income/revenue (1) 29.1 29.0
</TABLE>
(1) Net of provision for loan losses
(2) Annualized
23
<PAGE> 31
FIRST UNITED Q1 2000 INCOME STATEMENT
<TABLE>
<CAPTION>
------------- ------------- ---------------
THREE MONTHS THREE MONTHS
ENDED 3/31/00 ENDED 3/31/99 PERCENT CHANGE
------------- ------------- ---------------
<S> <C> <C> <C>
Net interest income after provision $ 24.5 $ 23.6 3.8%
Non-interest income 5.0 4.8 4.2
-------- --------
Total revenue (1) 29.5 28.4 3.9
Non-interest expense (17.6) (16.7) (5.4)
-------- --------
Pre-tax income 11.9 11.7 1.7
Tax expense (3.4) (3.6) 5.6
-------- --------
Net income $ 8.5 $ 8.1 4.9
======== ========
Diluted EPS $ 0.34 $ 0.32 6.3
KEY RATIOS:
ROAA (2 1.30% 1.29%
ROACE (2) 13.0 12.7
Net interest margin (2) 4.32 4.40
Efficiency ratio 57.1 57.3
Non-interest income/revenue (1) 20.4 16.9
</TABLE>
(1) Net of provision for loan losses
(2) Annualized
24
