DEFM14A 1 nt10025002x2_defm14a.htm DEFM14A

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant ☒
Filed by a Party other than the Registrant
Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material under §240.14a-12
Cadence Bancorporation
(Exact name of registrant as specified in its charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
No fee required.
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
 
(1)
Title of each class of securities to which transaction applies:
 
 
 
 
(2)
Aggregate number of securities to which transaction applies:
 
 
 
 
(3)
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
 
 
 
 
(4)
Proposed maximum aggregate value of transaction:
 
 
 
 
(5)
Total fee paid:
 
 
 
Fee paid previously with preliminary materials.
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
(1)
Amount Previously Paid:
 
 
 
 
(2)
Form, Schedule or Registration Statement No.:
 
 
 
 
(3)
Filing Party:
 
 
 
 
(4)
Date Filed:
 
 
 

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PROXY STATEMENT/OFFERING CIRCULAR


To the shareholders of BancorpSouth Bank and Cadence Bancorporation
MERGER PROPOSED—YOUR VOTE IS VERY IMPORTANT
On April 12, 2021, BancorpSouth Bank (“BancorpSouth”) and Cadence Bancorporation (“Cadence”) entered into an Agreement and Plan of Merger, which was amended as of May 27, 2021 (as further amended from time to time, the “merger agreement”), pursuant to which BancorpSouth and Cadence have agreed to combine their respective businesses in a merger. Under the merger agreement, Cadence will merge with and into BancorpSouth (the “merger”), with BancorpSouth as the surviving entity. Following the completion of the merger, Cadence Bank, N.A., a subsidiary of Cadence, will merge with and into BancorpSouth (the “bank merger”), with BancorpSouth as the surviving entity (the “combined company” or the “surviving entity,” as the case may be). The merger will bring together two companies with complementary franchises to create the fifth largest bank with headquarters in the combined nine-state footprint.
In the merger, holders of Cadence common stock will have the right to receive 0.70 shares (the “exchange ratio” and such shares, the “merger consideration”) of BancorpSouth common stock for each share of Cadence common stock they own. In addition, prior to the effective time of the merger and in connection with the closing, Cadence will declare and pay a special cash dividend of $1.25 per share of Cadence common stock (the “special dividend”) to holders of record of shares of Cadence common stock. Holders of BancorpSouth common stock will continue to own their existing shares of BancorpSouth common stock. Based on the closing price of BancorpSouth’s common stock on the New York Stock Exchange (the “NYSE”) on April 9, 2021, the last trading day before public announcement of the merger, the exchange ratio represented approximately $22.58 in value for each share of Cadence common stock, representing merger consideration of approximately $2.8 billion on an aggregate basis, not including the aggregate amount of the special dividend. Based on BancorpSouth’s closing price on June 29, 2021 of $28.29, the exchange ratio represented approximately $19.80 in value for each share of Cadence common stock, representing merger consideration of approximately $2.5 billion on an aggregate basis, not including the aggregate amount of the special dividend. The value of the BancorpSouth common stock at the time of completion of the merger could be greater than, less than or the same as the value of BancorpSouth common stock on the date of the accompanying joint proxy statement/offering circular. We urge you to obtain current market quotations of BancorpSouth common stock (trading symbol “BXS”) and Cadence common stock (trading symbol “CADE”).
We expect the merger will qualify as a reorganization for U.S. federal income tax purposes. Accordingly, holders of Cadence common stock generally will not recognize any gain or loss for federal income tax purposes on the exchange of shares of Cadence common stock for BancorpSouth common stock in the merger, except with respect to any cash received by such holders, as described in greater detail in the section entitled “Material U.S. Federal Income Tax Consequences of the Merger.”
Based on the current number of shares of Cadence common stock outstanding or reserved for issuance, BancorpSouth expects to issue approximately 89 million shares of BancorpSouth common stock to holders of Cadence common stock in the aggregate in the merger. Following the completion of the merger, we estimate that former holders of Cadence common stock will own approximately 45% and former holders of BancorpSouth common stock will own approximately 55% of the common stock of the combined company.
BancorpSouth and Cadence will each hold a special meeting of its respective shareholders in connection with the merger. At our respective special meetings, in addition to other business, BancorpSouth will ask holders of its common stock and Cadence will ask holders of its common stock to approve the merger. Holders of BancorpSouth preferred stock are not entitled to and are not requested to vote at the BancorpSouth special meeting. Information about these meetings and the merger is contained in this document. In particular, see section entitled “Risk Factors” beginning on page 32. We urge you to read this document carefully and in its entirety.
The special meeting of holders of BancorpSouth common stock will be held virtually on August 9, 2021, at 9:00 a.m. (Central Time), at the following website: http://meetings.computershare.com/MTCW5QQ. The special meeting of holders of Cadence common stock will be held virtually on August 9, 2021, at 9:00 a.m. (Central Time), at the following website: www.virtualshareholdermeeting.com/CADE2021SM.
Whether or not you plan to attend your special meeting, please vote as soon as possible to make sure that your shares are represented at the meeting. Each of our boards of directors unanimously recommends that holders of common stock vote “FOR” each of the proposals to be considered at the respective meetings. We strongly support this combination of our companies and join our boards in their recommendations.
This joint proxy statement/offering circular provides you with detailed information about the merger agreement and the merger. It also contains or references information about BancorpSouth and Cadence and certain related matters. You are encouraged to read this joint proxy statement/offering circular carefully. In particular, you should read the “Risk Factors” section beginning on page 32 for a discussion of the risks you should consider in evaluating the proposed merger and how it will affect you. You can also obtain information about BancorpSouth and Cadence from documents that have been filed with the Federal Deposit Insurance Corporation and the Securities and Exchange Commission, respectively, that are incorporated into this joint proxy statement/offering circular by reference.

James D. Rollins III
Chairman of the Board and Chief Executive Officer
BancorpSouth Bank

Paul B. Murphy, Jr.
Chairman and Chief Executive Officer
Cadence Bancorporation
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES TO BE ISSUED IN CONNECTION WITH THE MERGER OR DETERMINED IF THIS DOCUMENT IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
THE SECURITIES TO BE ISSUED IN THE MERGER ARE NOT SAVINGS OR DEPOSIT ACCOUNTS OR OTHER OBLIGATIONS OF ANY BANK OR NON-BANK SUBSIDIARY OF EITHER BANCORPSOUTH OR CADENCE. THESE SECURITIES ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY, AND ARE SUBJECT TO INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION NOR HAS THE FEDERAL DEPOSIT INSURANCE CORPORATION PASSED ON THE ADEQUACY OR ACCURACY OF THIS OFFERING CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
The accompanying joint proxy statement/offering circular is dated July 7, 2021, and is first being mailed to holders of BancorpSouth common stock and BancorpSouth preferred stock and holders of Cadence common stock on or about July 12, 2021.

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ADDITIONAL INFORMATION
The accompanying joint proxy statement/offering circular incorporates important business and financial information about BancorpSouth and Cadence from other documents that are not included in or delivered with this document. This information is available to you without charge upon your written or oral request. You can obtain the documents incorporated by reference in this document through the Federal Deposit Insurance Corporation website at https://efr.fdic.gov/fcxweb/efr/index.html, and the Securities and Exchange Commission website at https://www.sec.gov or by requesting them in writing, by e-mail or by telephone at the appropriate address below:
if you are a BancorpSouth shareholder:
BancorpSouth Bank
One Mississippi Plaza
201 South Spring Street
Tupelo, Mississippi 38804
Attention: Corporate Secretary
Telephone: (662) 680-2000
if you are a Cadence shareholder:
Cadence Bancorporation
2800 Post Oak Boulevard, Suite 3800
Houston, Texas 77056
Attention: Valerie Toalson
Telephone: (713) 871-4103
You will not be charged for any of these documents that you request. To obtain timely delivery of these documents, you must request them no later than five (5) business days before the date of the applicable special meeting. This means that holders of BancorpSouth common stock requesting documents must do so by August 2, 2021, in order to receive them before the BancorpSouth special meeting, and holders of Cadence common stock requesting documents must do so by August 2, 2021, in order to receive them before the Cadence special meeting.
No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this document. This document is dated July 7, 2021, and you should assume that the information in this document is accurate only as of such date. You should assume that the information incorporated by reference into this document is accurate as of the date of such incorporated document. Neither the mailing of this document to holders of BancorpSouth common stock or holders of Cadence common stock, nor the issuance by BancorpSouth of shares of BancorpSouth common stock in connection with the merger will create any implication to the contrary.
This document does not constitute an offer to sell, or a solicitation of an offer to purchase, the securities offered by this document, or the solicitation of a proxy, in any jurisdiction to or from any person to whom or from whom it is unlawful to make such offer, solicitation of an offer or proxy solicitation in such jurisdiction. Neither the delivery of this document nor any distribution of securities pursuant to this document shall, under any circumstances, create any implication that there has been no change in the information set forth or incorporated into this document by reference or in our affairs since the date of this document. The information contained in this document with respect to BancorpSouth was provided by BancorpSouth and the information contained in this document with respect to Cadence was provided by Cadence.
See section entitled “Where You Can Find More Information” beginning on page 154 of the accompanying joint proxy statement/offering circular for further information.

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BancorpSouth Bank
One Mississippi Plaza
201 South Spring Street
Tupelo, Mississippi 38804
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To BancorpSouth Shareholders:
On April 12, 2021, BancorpSouth Bank (“BancorpSouth”) and Cadence Bancorporation (“Cadence”) entered into an Agreement and Plan of Merger, which was amended as of May 27, 2021 (as further amended from time to time, the “merger agreement”), a copy of which is attached as Annex A to the accompanying joint proxy statement/offering circular.
NOTICE IS HEREBY GIVEN that a special meeting of holders of BancorpSouth common stock (the “BancorpSouth special meeting”) will be held virtually on August 9, 2021, at 9:00 a.m. (Central Time), at the following website: http://meetings.computershare.com/MTCW5QQ. We are pleased to notify you of and invite you to the BancorpSouth special meeting.
At the BancorpSouth special meeting you will be asked to vote on the following matters:
Proposal to approve the merger agreement (the “BancorpSouth merger proposal”).
Proposal to approve, on an advisory (non-binding) basis, the merger-related compensation payments that will or may be paid by BancorpSouth to its named executive officers in connection with the merger (the “BancorpSouth compensation proposal”).
Proposal to adjourn the BancorpSouth special meeting, if necessary or appropriate, to solicit additional proxies if, immediately prior to such adjournment, there are not sufficient votes to approve the BancorpSouth merger proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/offering circular is timely provided to holders of BancorpSouth common stock (the “BancorpSouth adjournment proposal”).
The board of directors of BancorpSouth has fixed the close of business on July 6, 2021 as the record date for the BancorpSouth special meeting. BancorpSouth shareholders of record on the record date are entitled to notice of the BancorpSouth special meeting. Each holder of BancorpSouth common stock is entitled to cast one (1) vote on each matter properly brought before the BancorpSouth special meeting for each share of BancorpSouth common stock that such holder owned of record as of the record date. Holders of BancorpSouth preferred stock are not entitled to and are not requested to vote at the BancorpSouth special meeting.
BancorpSouth has determined that holders of BancorpSouth common stock and BancorpSouth preferred stock are not entitled to dissenters’ rights with respect to the proposed merger under Section 79-4-13.02 of the Mississippi Business Corporation Act (the “MBCA”).
The BancorpSouth board of directors unanimously recommends that holders of BancorpSouth common stock vote “FOR” the BancorpSouth merger proposal, “FOR” the BancorpSouth compensation proposal and “FOR” the BancorpSouth adjournment proposal.
Your vote is important. We cannot complete the transactions contemplated by the merger agreement unless holders of BancorpSouth common stock approve the merger agreement. The affirmative vote of a majority of the votes cast on the merger agreement by the holders of BancorpSouth common stock is required to approve the BancorpSouth merger proposal.

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Whether or not you plan to attend the BancorpSouth special meeting, we urge you to please promptly complete, sign, date and return the accompanying proxy card in the enclosed postage-paid envelope or authorize the individuals named on the accompanying proxy card to vote your shares by using the Internet, QR code scan or calling the toll-free telephone number as described in the instructions included with the accompanying proxy card. If your shares are held in the name of a bank, broker, BancorpSouth 401(k) Profit-Sharing Plan trustee or other nominee, please follow the instructions on the voting instruction card furnished by such bank, broker, BancorpSouth 401(k) Profit-Sharing Plan trustee or other nominee.
 
 
 
By Order of the Board of Directors
 
 
 


 
James D. Rollins III
Chairman of the Board and Chief Executive Officer
July 7, 2021

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Cadence Bancorporation
2800 Post Oak Boulevard, Suite 3800
Houston, Texas 77056
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Cadence Shareholders:
On April 12, 2021, BancorpSouth Bank (“BancorpSouth”) and Cadence Bancorporation (“Cadence”) entered into an Agreement and Plan of Merger, which was amended as of May 27, 2021 (as further amended from time to time, the “merger agreement”), a copy of which is attached as Annex A to the accompanying joint proxy statement/offering circular.
NOTICE IS HEREBY GIVEN that a special meeting of holders of Cadence common stock (the “Cadence special meeting”) will be held virtually on August 9, 2021, at 9:00 a.m. (Central Time), at the following website: www.virtualshareholdermeeting.com/CADE2021SM. We are pleased to notify you of and invite you to the Cadence special meeting.
At the Cadence special meeting, holders of Cadence common stock will be asked to vote on the following matters:
Proposal to adopt the merger agreement (the “Cadence merger proposal”).
Proposal to approve, on an advisory (non-binding) basis, the merger-related compensation payments that will or may be paid by Cadence to its named executive officers in connection with the merger (the “Cadence compensation proposal”).
Proposal to adjourn the Cadence special meeting, if necessary or appropriate, to solicit additional proxies if, immediately prior to such adjournment, there are not sufficient votes to approve the Cadence merger proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/offering circular is timely provided to holders of Cadence common stock (the “Cadence adjournment proposal”).
The board of directors of Cadence has fixed the close of business on July 6, 2021 as the record date for the Cadence special meeting. Only holders of record of Cadence common stock as of the close of business on the record date for the Cadence special meeting are entitled to notice of the Cadence special meeting or any adjournment or postponement thereof. Only holders of record of Cadence common stock will be entitled to vote at the Cadence special meeting or any adjournment or postponement thereof.
Cadence has determined that holders of Cadence common stock are not entitled to appraisal rights with respect to the proposed merger under Section 262 of the Delaware General Corporation Law (the “DGCL”).
The Cadence board of directors unanimously recommends that holders of Cadence common stock vote “FOR” the Cadence merger proposal, “FOR” the Cadence compensation proposal and “FOR” the Cadence adjournment proposal.
Your vote is important. We cannot complete the transactions contemplated by the merger agreement unless holders of Cadence common stock approve the merger agreement. The affirmative vote of a majority of the outstanding common stock of Cadence entitled to be cast on the merger agreement is required to approve the Cadence merger proposal.

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Whether or not you plan to attend the Cadence special meeting, we urge you to please promptly complete, sign, date and return the accompanying proxy card in the enclosed postage-paid envelope, call the toll-free number specified on your proxy card or authorize the individuals named on the accompanying proxy card to vote your shares by using the Internet as described in the instructions included with the accompanying proxy card. If your shares are held in the name of a bank, broker or other nominee, you will need to follow the voting instructions provided by your bank, broker or nominee to ensure that your shares are represented at the Cadence special meeting.
 
 
 
By Order of the Board of Directors
 
 
 

 
Paul B. Murphy, Jr.
Chairman and Chief Executive Officer
July 7, 2021

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QUESTIONS AND ANSWERS
The following are some questions that you may have about the merger and the BancorpSouth special meeting or the Cadence special meeting, and brief answers to those questions. We urge you to read carefully the remainder of this joint proxy statement/offering circular because the information in this section does not provide all the information that might be important to you with respect to the merger and the BancorpSouth special meeting or the Cadence special meeting. Additional important information is also contained in the documents incorporated by reference into this joint proxy statement/offering circular. See the section entitled “Where You Can Find More Information” beginning on page 154.
In this joint proxy statement/offering circular, unless the context otherwise requires:
“BancorpSouth” refers to BancorpSouth Bank, a Mississippi state-chartered bank;
“BancorpSouth common stock” refers to the common stock, par value $2.50 per share, of BancorpSouth;
“BancorpSouth preferred stock” refers to the preferred stock of BancorpSouth, par value $0.01 per share, including the Series A Non-Cumulative Perpetual Preferred Stock, par value $0.01 per share, of BancorpSouth (the “BancorpSouth Series A preferred stock”);
“Cadence” refers to Cadence Bancorporation, a Delaware corporation;
“Cadence common stock” refers to the common stock, par value $0.01 per share, of Cadence, including the class A common stock, par value $0.01 per share (the “Cadence Class A common stock”); and
“shareholders” or “holders” refers to holders of shares of the capital stock of BancorpSouth, Cadence or the combined company (as defined below), as the context suggests.
Q:
Why am I receiving this joint proxy statement/offering circular?
A:
You are receiving this joint proxy statement/offering circular because BancorpSouth and Cadence have agreed to combine their companies in a merger structured through a merger of Cadence with and into BancorpSouth (the “merger”), with BancorpSouth as the surviving entity (the “combined company” or the “surviving entity,” as the case may be). A copy of the Agreement and Plan of Merger, dated as of April 12, 2021 and amended as of May 27, 2021, by and between BancorpSouth and Cadence (as further amended from time to time, the “merger agreement”) is attached as Annex A to this joint proxy statement/offering circular and is incorporated by reference herein. Following the completion of the merger, Cadence Bank, N.A., a subsidiary of Cadence, will merge with and into BancorpSouth with BancorpSouth as the surviving entity. In this joint proxy statement/offering circular, we refer to the closing of the transactions contemplated by the merger agreement as the “closing” and the date on which the closing occurs as the “closing date.”
In order to complete the merger, among other things:
holders of BancorpSouth common stock must approve the merger agreement (the “BancorpSouth merger proposal”);
holders of Cadence common stock must adopt the merger agreement (the “Cadence merger proposal”).
BancorpSouth is holding a special meeting of holders of BancorpSouth common stock (the “BancorpSouth special meeting”) to obtain approval of the BancorpSouth merger proposal. BancorpSouth shareholders of record on the record date are entitled to notice of the BancorpSouth special meeting. Each holder of BancorpSouth common stock is entitled to cast one (1) vote on each matter properly brought before the BancorpSouth special meeting for each share of BancorpSouth common stock that such holder owned of record as of the record date. Holders of BancorpSouth preferred stock are not entitled to and are not requested to vote at the BancorpSouth special meeting. Holders of BancorpSouth common stock will also be asked to approve the proposal to adjourn the BancorpSouth special meeting to solicit additional proxies (i) if there are not sufficient votes at the time of the BancorpSouth special meeting to approve the BancorpSouth merger proposal or (ii) if adjournment is necessary or appropriate to ensure that any supplement or amendment to this joint proxy statement/offering circular is timely provided to holders of BancorpSouth common stock (the “BancorpSouth adjournment proposal”). Pursuant to BancorpSouth’s bylaws, if a quorum is not established because a sufficient number of shares entitled to vote are not represented at the BancorpSouth special meeting, the meeting may be adjourned by the presiding officer of the BancorpSouth special meeting without further notice. Holders of BancorpSouth common stock will also be asked to approve, on an advisory (non-binding) basis, the
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merger-related compensation payments that will or may be paid by BancorpSouth to its named executive officers in connection with the merger (the “BancorpSouth compensation proposal”).
Cadence is holding a special meeting of holders of Cadence common stock (the “Cadence special meeting”) to obtain approval of the Cadence merger proposal. Holders of Cadence common stock will also be asked to approve, on an advisory (non-binding) basis, the merger-related compensation payments that will or may be paid by Cadence to its named executive officers in connection with the merger (the “Cadence compensation proposal”) and to approve the proposal to adjourn the Cadence special meeting to solicit additional proxies (i) if there are not sufficient votes at the time of the Cadence special meeting to approve the Cadence merger proposal or (ii) if adjournment is necessary or appropriate, to ensure that any supplement or amendment to this joint proxy statement/offering circular is timely provided to holders of Cadence common stock (the “Cadence adjournment proposal”). Under Cadence’s bylaws, the Chairperson of the board of directors or the President may adjourn the Cadence special meeting whether or not there is a quorum and no notice of the time and place, if any, of the adjourned meeting need be given except as required by law. Pursuant to Cadence’s bylaws, the Cadence special meeting may be postponed or cancelled, by resolution of the board of directors upon public notice given prior to the scheduled date of the Cadence special meeting.
This document is also an offering circular that is being delivered to holders of Cadence common stock because, in connection with the merger, BancorpSouth is offering shares of BancorpSouth common stock to holders of Cadence common stock. This joint proxy statement/offering circular contains important information about the merger and the other proposals being voted on at the BancorpSouth and Cadence special meetings. You should read it carefully and in its entirety. The enclosed materials allow you to have your shares of common stock voted by proxy without attending your meeting. Your vote is important and we encourage you to submit your proxy as soon as possible.
Q:
What will happen in the merger?
A:
In the merger, Cadence will merge with and into BancorpSouth. Each share of Cadence common stock issued and outstanding immediately prior to the effective time of the merger (the “effective time”) (other than certain shares held by BancorpSouth or Cadence) will be converted into the right to receive 0.70 shares (the “exchange ratio” and such shares, the “merger consideration”) of BancorpSouth common stock, par value $2.50. Prior to the effective time and in connection with the closing, Cadence will declare and pay a special cash dividend of $1.25 per share of Cadence common stock (the “special dividend”) to holders of record of shares of Cadence common stock. After completion of the merger, Cadence will no longer be a public company, and Cadence common stock will be delisted from the New York Stock Exchange (“NYSE”), will be deregistered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and will cease to be publicly traded. Holders of BancorpSouth common stock will continue to own their existing shares of BancorpSouth common stock. The name of the surviving entity will be “Cadence Bank” and the common stock of the surviving entity will be listed on the NYSE under the symbol “CADE.” See the information provided in the section entitled “The Merger Agreement—Structure of the Merger” beginning on page 112 and the merger agreement for more information about the merger.
Q:
When and where will each of the special meetings take place?
A:
The BancorpSouth special meeting will be held virtually on August 9, 2021, at 9:00 a.m. (Central Time), at the following website (the “BancorpSouth special meeting website”): http://meetings.computershare.com/MTCW5QQ.
The Cadence special meeting will be held virtually on August 9, 2021, at 9:00 a.m. (Central Time), at the following website (the “Cadence special meeting website”): www.virtualshareholdermeeting.com/CADE2021SM.
Even if you plan to attend your respective company’s special meeting, BancorpSouth and Cadence recommend that you vote your shares in advance as described below under the section entitled “—How can I vote my shares at my respective special meeting?” so that your vote will be counted if you later decide not to or become unable to attend the applicable special meeting. If your shares of BancorpSouth common stock are held in “street name,” you will receive instructions from the registered holder that must be followed in order for your shares to be voted on your behalf.
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Q:
What matters will be considered at each of the special meetings?
A:
At the BancorpSouth special meeting, holders of BancorpSouth common stock will be asked to consider and vote on the following proposals:
BancorpSouth Proposal 1: The BancorpSouth merger proposal. Approval of the merger agreement;
BancorpSouth Proposal 2: The BancorpSouth compensation proposal. Approval of, on an advisory (non-binding) basis, the merger-related compensation payments that will or may be paid by BancorpSouth to its named executive officers in connection with the merger; and
BancorpSouth Proposal 3: The BancorpSouth adjournment proposal. Approval of the adjournment of the BancorpSouth special meeting to solicit additional proxies (i) if there are not sufficient votes at the time of the BancorpSouth special meeting to approve the BancorpSouth merger proposal or (ii) if necessary or appropriate, to ensure that any supplement or amendment to this joint proxy statement/offering circular is timely provided to holders of BancorpSouth common stock.
At the Cadence special meeting, holders of Cadence common stock will be asked to consider and vote on the following proposals:
Cadence Proposal 1: The Cadence merger proposal. Adoption of the merger agreement;
Cadence Proposal 2: The Cadence compensation proposal. Approval of, on an advisory (non-binding) basis, the merger-related compensation payments that will or may be paid by Cadence to its named executive officers in connection with the merger; and
Cadence Proposal 3: The Cadence adjournment proposal. Approval of the adjournment of the Cadence special meeting to solicit additional proxies (i) if there are not sufficient votes at the time of the Cadence special meeting to approve the Cadence merger proposal or (ii) if necessary or appropriate, to ensure that any supplement or amendment to this joint proxy statement/offering circular is timely provided to holders of Cadence common stock.
In order to complete the merger, among other things, holders of BancorpSouth common stock must approve the BancorpSouth merger proposal and holders of Cadence common stock must approve the Cadence merger proposal. None of the approval of the BancorpSouth compensation proposal, the BancorpSouth adjournment proposal, the Cadence compensation proposal or the Cadence adjournment proposal are conditions to the obligations of BancorpSouth or Cadence to complete the merger.
Q:
What will holders of Cadence common stock receive in the merger?
A:
In the merger, holders of Cadence common stock will have the right to receive 0.70 shares of BancorpSouth common stock for each share of Cadence common stock held immediately prior to the completion of the merger. BancorpSouth will not issue any fractional shares of BancorpSouth common stock in the merger. Holders of Cadence common stock who would otherwise be entitled to receive a fraction of a share of BancorpSouth common stock in the merger will instead receive an amount in cash (rounded to the nearest cent) determined by multiplying the fraction of a share (after taking into account all shares of Cadence common stock held by such holder immediately prior to the effective time and rounded to the nearest thousandth when expressed in decimal form) of BancorpSouth common stock to which the holder would otherwise be entitled to receive by the average closing-sale price per share of BancorpSouth common stock on the NYSE as reported by The Wall Street Journal for the consecutive period of five (5) trading days ending on the day preceding the closing date of the merger.
In addition, prior to the effective time and in connection with the closing, Cadence will declare and pay the special dividend of $1.25 per share of Cadence common stock to holders of record of shares of Cadence common stock.
Q:
What will holders of BancorpSouth common stock receive in the merger?
A:
In the merger, holders of BancorpSouth common stock will not receive any consideration, and their shares of BancorpSouth common stock will remain outstanding and will constitute shares of the combined company. Following the merger, shares of the common stock of the surviving entity will continue to be traded on the NYSE under the symbol “CADE.”
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Q:
Will the value of the merger consideration change between the date of this joint proxy statement/offering circular and the time the merger is completed?
A:
Yes. Although the number of shares of BancorpSouth common stock that holders of Cadence common stock will receive is fixed, the value of the merger consideration will fluctuate between the date of this joint proxy statement/offering circular and the completion of the merger based upon the market value for BancorpSouth common stock. Any fluctuation in the market price of BancorpSouth common stock will change the value of the shares of BancorpSouth common stock that holders of Cadence common stock will receive. Neither BancorpSouth nor Cadence is permitted to terminate the merger agreement as a result of any increase or decrease in the market price of BancorpSouth common stock or Cadence common stock.
Q:
How will the merger affect Cadence equity awards?
A:
With respect to Cadence equity awards granted prior to the execution of the merger agreement:
Each option to purchase shares of Cadence common stock (a “Cadence stock option”) that is outstanding immediately prior to the effective time will be equitably adjusted immediately prior to the effective time by an amount equal to the special dividend and, at the effective time, will automatically be converted into an option (a “BancorpSouth converted stock option”) to purchase shares of BancorpSouth common stock based on the exchange ratio and subject to the same terms and conditions, after giving effect to any “change in control” provisions under the applicable Cadence equity incentive plan or award agreement, as applied to the corresponding Cadence stock option immediately prior to the effective time.
At the effective time, each restricted stock unit award in respect of shares of Cadence common stock (a “Cadence RSU award”) that is outstanding immediately prior to the effective time will automatically be converted into the right to receive (A) a restricted stock unit award in respect of shares of BancorpSouth common stock (each, a “BancorpSouth converted RSU award”) based on the exchange ratio and (B) the special dividend with respect to the number of shares of Cadence common stock subject to the Cadence RSU award, subject to the same terms and conditions, including vesting and settlement, as apply to the corresponding Cadence RSU award immediately prior to the effective time, and each such BancorpSouth converted RSU award will be subject to the same terms and conditions (including vesting terms), after giving effect to any “change in control” provisions under the applicable Cadence equity incentive plan or award agreement, as applied to the corresponding Cadence RSU award immediately prior to the effective time.
At the effective time, each performance stock unit (a “Cadence PSU award”) that is outstanding immediately prior to the effective time will automatically be converted into the right to receive (A) a BancorpSouth converted RSU award based on the exchange ratio, assuming the higher of target performance and actual performance through the latest practicable date prior to the effective time, and (B) the special dividend with respect to the number of shares of Cadence common stock subject to such Cadence PSU award that is determined to be earned as provided above, subject to the same terms and conditions, including vesting and settlement, as applied with respect to the corresponding Cadence PSU award immediately prior to the effective time, and each such BancorpSouth converted RSU award will be subject to the same terms and conditions (including service-based vesting terms but not performance goals), after giving effect to any “change in control” provisions under the applicable Cadence equity incentive plan or award agreement, as applied to the corresponding Cadence PSU award immediately prior to the effective time.
With respect to the BancorpSouth converted stock options and BancorpSouth converted RSU awards, upon a termination of employment of a holder by BancorpSouth without “cause” (as defined in the Cadence 2015 Omnibus Incentive Plan) or, in certain circumstances, a termination of employment by the holder for “good reason” (as defined in the individual agreement with the applicable holder) (such terminations, a “qualifying termination”), within the two-year period following the closing of the merger, such converted BancorpSouth equity awards will become fully vested, and the BancorpSouth converted stock options will remain exercisable for the full original term.
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Q:
How will the merger affect the Cadence ESPP?
A:
Pursuant to the merger agreement, the offering period under the Cadence Employee Stock Purchase Plan (the “ESPP”) that commenced on April 1, 2021 will be the final offering period under the ESPP, the ESPP will terminate at the effective time and no further rights will be granted or exercised under the ESPP thereafter.
Q:
How will the merger affect BancorpSouth equity awards?
A:
With respect to BancorpSouth equity awards outstanding immediately prior to the effective time, upon a termination of employment of a holder by BancorpSouth without “Cause” (as defined in the BancorpSouth Long-Term Equity Incentive Plan) within 24 months following the closing of the merger, such BancorpSouth equity awards (other than any BancorpSouth performance stock units with an outstanding performance period (the “outstanding performance period BancorpSouth PSUs”)) will become fully vested. Any outstanding performance period BancorpSouth PSU will cease to be subject to any service-based vesting conditions and continue to be subject to performance-based vesting conditions in accordance with the terms of the award.
Q:
How does the BancorpSouth board of directors recommend that I vote at the BancorpSouth special meeting?
A:
The BancorpSouth board of directors unanimously recommends that you vote “FOR” the BancorpSouth merger proposal, “FOR” the BancorpSouth compensation proposal and “FOR” the BancorpSouth adjournment proposal.
In considering the recommendations of the BancorpSouth board of directors, holders of BancorpSouth common stock should be aware that BancorpSouth directors and executive officers may have interests in the merger that are different from, or in addition to, the interests of holders of BancorpSouth common stock generally. For a more complete description of these interests, see the information provided in the section entitled “The Merger—Interests of Certain BancorpSouth Directors and Executive Officers in the Merger” beginning on page 95.
Q:
How does the Cadence board of directors recommend that I vote at the Cadence special meeting?
A:
The Cadence board of directors unanimously recommends that you vote “FOR” the Cadence merger proposal, “FOR” the Cadence compensation proposal and “FOR” the Cadence adjournment proposal.
In considering the recommendations of the Cadence board of directors, holders of Cadence common stock should be aware that Cadence directors and executive officers may have interests in the merger that are different from, or in addition to, the interests of holders of Cadence common stock generally. For a more complete description of these interests, see the information provided in the section entitled “The Merger—Interests of Certain Cadence Directors and Executive Officers in the Merger” beginning on page 98.
Q:
Who is entitled to vote at the BancorpSouth special meeting?
A:
The record date for the BancorpSouth special meeting is July 6, 2021. BancorpSouth shareholders of record at the close of business on the record date are entitled to notice of the BancorpSouth special meeting.
Each holder of BancorpSouth common stock is entitled to cast one (1) vote on each matter properly brought before the BancorpSouth special meeting for each share of BancorpSouth common stock that such holder owned of record as of the record date. As of July 6, 2021, there were 108,614,595 outstanding shares of BancorpSouth common stock. Holders of BancorpSouth preferred stock are not entitled to and are not requested to vote at the BancorpSouth special meeting.
Attendance at the special meeting is not required to vote. See below and the section entitled “The BancorpSouth Special Meeting—Proxies” beginning on page 42 for instructions on how to vote your shares without attending the BancorpSouth special meeting.
Q:
Who is entitled to vote at the Cadence special meeting?
A:
The record date for the Cadence special meeting is July 6, 2021. All holders of Cadence common stock who held shares at the close of business on the record date for the Cadence special meeting are entitled to receive notice of, and to vote at, the Cadence special meeting.
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Each holder of Cadence common stock is entitled to cast one (1) vote on each matter properly brought before the Cadence special meeting for each share of Cadence common stock that such holder owned of record as of the record date. As of July 6, 2021, there were 124,752,738 outstanding shares of Cadence common stock.
Attendance at the special meeting is not required to vote. See below and the section entitled “The Cadence Special Meeting—Proxies” beginning on page 48 for instructions on how to vote your shares of Cadence common stock without attending the Cadence special meeting.
Q:
What constitutes a quorum for the BancorpSouth special meeting?
A:
Holders of shares representing a majority of the outstanding shares of BancorpSouth common stock entitled to vote that are present or represented by proxy will be necessary to constitute a quorum for purposes of taking actions on the BancorpSouth merger proposal, the BancorpSouth compensation proposal and the BancorpSouth adjournment proposal at the BancorpSouth special meeting. Abstentions will be included in determining the number of shares present at the meeting for the purpose of determining the presence of a quorum.
Q:
What constitutes a quorum for the Cadence special meeting?
A:
Holders of shares representing a majority of the outstanding shares of Cadence common stock entitled to vote, present or represented by proxy will be necessary to constitute a quorum for purposes of taking actions on the Cadence merger proposal, the Cadence compensation proposal and the Cadence adjournment proposal at the Cadence special meeting. Abstentions will be included in determining the number of shares present at the meeting for the purpose of determining the presence of a quorum.
Q:
What vote is required for the approval of each proposal at the BancorpSouth special meeting?
A:
BancorpSouth Proposal 1: BancorpSouth merger proposal. Approval of the BancorpSouth merger proposal requires the affirmative vote of a majority of the votes cast on the BancorpSouth merger proposal by the holders of BancorpSouth common stock. Accordingly, an abstention or a broker non-vote or other failure to vote will have no effect on the outcome of the BancorpSouth merger proposal.
BancorpSouth Proposal 2: BancorpSouth compensation proposal. Approval of the BancorpSouth compensation proposal requires the affirmative vote of a majority of the votes cast by the holders of BancorpSouth common stock. Accordingly, an abstention or a broker non-vote or other failure to vote will have no effect on the outcome of the BancorpSouth compensation proposal.
BancorpSouth Proposal 3: BancorpSouth adjournment proposal. Approval of the BancorpSouth adjournment proposal requires the affirmative vote of a majority of the votes cast by the holders of BancorpSouth common stock at the BancorpSouth special meeting. Accordingly, an abstention or a broker non-vote or other failure to vote will have no effect on the outcome of the BancorpSouth adjournment proposal.
Q:
What vote is required for the approval of each proposal at the Cadence special meeting?
A:
Cadence Proposal 1: Cadence merger proposal. Approval of the Cadence merger proposal requires the affirmative vote of a majority of the outstanding common stock of Cadence entitled to be cast on the merger agreement. Shares of Cadence common stock not present, including by broker non-vote or otherwise, and shares present and not voted, whether by abstention or otherwise, will have the same effect as votes cast “AGAINST” the proposal to approve the merger agreement.
Cadence Proposal 2: Cadence compensation proposal. Approval of the Cadence compensation proposal requires the affirmative vote of the holders of a majority of the shares of Cadence common stock entitled to vote who are represented by virtual attendance or by proxy at the Cadence special meeting. Accordingly, an abstention will have the same effect as a vote “AGAINST” the Cadence compensation proposal, while a failure to vote or instruct your bank, broker or other nominee how to vote will have no effect on the outcome of the Cadence compensation proposal.
Cadence Proposal 3: Cadence adjournment proposal. Approval of the Cadence adjournment proposal requires the affirmative vote of the holders of a majority of the shares of Cadence common stock entitled to vote who are represented by virtual attendance or by proxy at the Cadence special meeting. Accordingly, an abstention will have the same effect as a vote “AGAINST” the Cadence adjournment proposal, while a failure to vote or instruct your bank, broker or other nominee how to vote will have no effect on the outcome of the Cadence adjournment proposal.
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Q:
Why am I being asked to consider and vote on a proposal to approve, by non-binding, advisory vote, merger-related compensation arrangements for the BancorpSouth and Cadence named executive officers (i.e., the BancorpSouth compensation proposal and the Cadence compensation proposal)?
A:
Under the applicable Federal Deposit Insurance Corporation (the “FDIC”) rules and Securities and Exchange Commission (the “SEC”) rules, BancorpSouth and Cadence are required to seek a non-binding, advisory vote with respect to the compensation that may be paid or become payable to BancorpSouth’s or Cadence’s named executive officers, respectively, that is based on or otherwise relates to the merger.
Q:
What happens if holders of BancorpSouth or Cadence common stock do not approve, by non-binding, advisory vote, merger-related compensation arrangements for BancorpSouth’s or Cadence’s named executive officers (i.e., the BancorpSouth compensation proposal and the Cadence compensation proposal)?
A:
The votes on the proposals to approve the merger-related compensation arrangements for each of BancorpSouth’s and Cadence’s named executive officers are each separate and apart from the votes to approve the other proposals being presented at the BancorpSouth and Cadence special meetings. Because the votes on the proposals to approve the merger-related executive compensation are advisory in nature only, they will not be binding upon BancorpSouth, Cadence, or the combined company in the merger. Accordingly, the merger-related compensation will be paid to BancorpSouth’s and Cadence’s named executive officers to the extent payable in accordance with the terms of their compensation agreements and other contractual arrangements even if the holders of BancorpSouth and/or Cadence common stock, respectively, do not approve the proposals to approve the merger-related executive compensation.
Q:
What if I hold shares in both BancorpSouth and Cadence?
A:
If you hold shares of both BancorpSouth common stock and Cadence common stock, you will receive separate packages of proxy materials. A vote cast as a holder of BancorpSouth common stock will not count as a vote cast as a holder of Cadence common stock, and a vote cast as a holder of Cadence common stock will not count as a vote cast as a holder of BancorpSouth common stock. Therefore, please submit separate proxies for your shares of BancorpSouth common stock and your shares of Cadence common stock.
Q:
How can I vote my shares at my respective special meeting?
A:
Record Holders. Shares held directly in your name as the holder of record of BancorpSouth or Cadence common stock may be voted at the BancorpSouth special meeting or the Cadence special meeting, as applicable.
If your shares of BancorpSouth common stock are registered directly in your name with BancorpSouth’s transfer agent, Computershare Limited (“Computershare”), you are considered the shareholder of record with respect to those shares. As a shareholder of record, you can attend the BancorpSouth special meeting by accessing the BancorpSouth special meeting website and entering the 15-digit control number on the enclosed proxy card.
If you are a holder of record of Cadence common stock as of the record date for the Cadence special meeting, you may vote by:
accessing the Internet website specified on your proxy card;
calling the toll-free number specified on your proxy card;
signing and returning the enclosed proxy card in the postage-paid envelope provided; or
attending the Cadence special meeting.
Shares in “street name.” Shares held in a brokerage or other account in “street name” may be voted at the BancorpSouth special meeting or Cadence special meeting, as applicable. If your shares of BancorpSouth common stock are held in “street name,” you will receive instructions from the registered holder that must be followed in order for your shares to be voted on your behalf. Please note that if you are a beneficial owner of shares of BancorpSouth common stock held through the BancorpSouth 401(k) Profit-Sharing Plan (the “BancorpSouth 401(k) Plan”), you will not be able to vote those shares at the BancorpSouth special meeting.
If your shares of BancorpSouth common stock are held in a stock brokerage account or by a bank, broker, trustee (including the BancorpSouth 401(k) Plan and the trustee for the BancorpSouth 401(k) Plan (such trustee, the “BancorpSouth 401(k) Plan trustee”)) or other nominee, the bank, broker, BancorpSouth 401(k)
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Plan trustee or other nominee is considered the record holder of those shares. You are considered the beneficial owner of those shares, and your shares are held in “street name.” If you are a beneficial owner of shares of BancorpSouth common stock held through the BancorpSouth 401(k) Plan as of the record date, you can attend the BancorpSouth special meeting by accessing the BancorpSouth special meeting website and entering the 15-digit control number on the enclosed proxy card. You will not, however, be able to vote those shares at the BancorpSouth special meeting. If you are a beneficial owner of BancorpSouth common stock whose stock is held in a stock brokerage account or by a bank, broker, trustee or other nominee as of the record date and want to attend the BancorpSouth special meeting, you may register in advance to virtually attend the BancorpSouth special meeting by submitting to Computershare, along with your name and email address, one of the following documents: (i) a copy of the voting instruction form you received from your bank or broker, (ii) a copy of a brokerage statement validating your holdings as of the meeting record date or (iii) proof of your proxy power (“legal proxy”) from your broker, bank or other nominee reflecting your BancorpSouth common stock holdings. Requests for registration should be directed to Computershare either by email to legalproxy@computershare.com or by mail to Computershare, BancorpSouth Bank Legal Proxy, P.O. Box 43001, Providence, RI 02940-3001. Requests for registration must be labeled as “Legal Proxy” and be received no later than 4:00 p.m. (Central Time) on August 2, 2021. You will receive a confirmation of your registration by email after Computershare receives your registration materials. If you did not submit a legal proxy, but did submit a voting instruction form or brokerage statement, you will not be entitled to vote at the meeting, but you will be able to attend and ask questions.
The platform for the virtual BancorpSouth special meeting is fully supported across browsers (MS Edge, Firefox, Chrome and Safari) and devices (desktops, laptops, tablets and cell phones) running the most up-to-date version of applicable software and plugins. Participants should ensure that they have a strong WiFi connection wherever they intend to participate in the meeting. We encourage you to access the BancorpSouth special meeting prior to the start time. A link on the meeting page will provide further assistance should you need it or you may call 1-888-724-2416.
If you hold Cadence common stock in the name of a broker, bank or nominee, please follow the voting instructions provided by your broker, bank or nominee to ensure that your shares are represented at your special meeting. Street name holders may only vote at the Cadence special meeting if they have a legal proxy to vote their shares.
If you do not have Internet capabilities, you can listen to the virtual Cadence special meeting by telephone by calling the toll-free number specified on your proxy card.
Even if you plan to attend virtually the BancorpSouth special meeting or the Cadence special meeting, as applicable, BancorpSouth and Cadence recommend that you vote your shares in advance as described below so that your vote will be counted if you later decide not to or become unable to attend the respective special meeting.
Additional information on attending the special meetings virtually can be found under the section entitled “The BancorpSouth Special Meeting” on page 40 and under the section entitled “The Cadence Special Meeting” on page 47.
Q:
How can I vote my shares without attending my respective special meeting?
A:
Whether you hold your shares directly as the holder of record of BancorpSouth or Cadence or beneficially in “street name,” you may direct your vote by proxy without attending the BancorpSouth special meeting or the Cadence special meeting, as applicable.
If you are a record holder of BancorpSouth common stock, you can vote your shares by proxy over the Internet, QR code scan, by telephone or by mail by following the instructions provided in the enclosed proxy card. Please note that if you are a beneficial owner of shares of BancorpSouth common stock held through the BancorpSouth 401(k) Plan, your proxies submitted by Internet, QR code scan, telephone or by mail must be received by 11:59 p.m. (Central Time) on August 4, 2021 in order to ensure that your vote is counted. If you are a record holder of Cadence common stock, you can vote your shares by accessing the Internet website specified on your proxy card, calling the toll-free number specified on your proxy card, signing and returning the enclosed proxy card in the postage-paid envelope provided or attending the Cadence special meeting. If your shares of
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BancorpSouth common stock are held in “street name,” you will receive instructions from the registered holder that must be followed in order for your shares to be voted on your behalf. If your shares of Cadence common stock are held in “street name,” street name holders may only vote at the Cadence special meeting if they have a legal proxy to vote their shares.
Additional information on voting procedures can be found under the section entitled “The BancorpSouth Special Meeting” on page 40 and under the section entitled “The Cadence Special Meeting” on page 47.
Q:
What do I need to do now?
A:
After carefully reading and considering the information contained in this document, please vote as soon as possible. If you are a record holder of shares of BancorpSouth common stock, please respond by submitting your proxy through the Internet, QR code scan, by telephone or by completing, signing and dating the accompanying proxy card and returning it in the enclosed postage-paid envelope; or if you are a record holder of Cadence common stock, submitting your proxy through the Internet, calling the toll-free number specified on your proxy card or by completing, signing and dating the accompanying proxy card and returning it in the enclosed postage-paid envelope, as soon as possible so that your shares may be represented at your respective meeting.
Please see below for instruction on voting your shares held beneficially in “street name.”
Q:
If my shares are held in “street name” by a broker, bank, trustee or other nominee, will my broker, bank, trustee or other nominee vote my shares for me?
A:
No. Your bank, broker, trustee (including the BancorpSouth 401(k) Plan trustee) or other nominee cannot vote your shares without instructions from you. If your shares of BancorpSouth common stock are held in “street name,” you will receive instructions from the registered holder that must be followed in order for your shares to be voted on your behalf. If your shares of Cadence common stock are held in “street name,” street-name holders may only vote at the Cadence special meeting if they have a legal proxy to vote their shares.
Q:
Why is my vote important?
A:
If you do not vote, it will be more difficult for BancorpSouth and Cadence to obtain the necessary quorum to hold its respective special meeting. If you fail to submit a proxy or vote at the BancorpSouth special meeting, or fail to instruct your bank, broker, BancorpSouth 401(k) Plan trustee or other nominee how to vote with respect to the BancorpSouth merger proposal, you will not be deemed to have cast a vote with respect to the BancorpSouth merger proposal. Your failure to submit a proxy or vote at the Cadence special meeting, or failure to instruct your bank or broker how to vote, or abstention from voting will have the same effect as a vote “AGAINST” approval of the Cadence merger proposal.
The merger agreement must be approved by the affirmative vote of a majority of votes cast on the BancorpSouth merger proposal by the holders of BancorpSouth common stock and by the affirmative vote of a majority of the outstanding common stock of Cadence entitled to be cast on the merger agreement. The BancorpSouth board of directors unanimously recommends that you vote “FOR” the BancorpSouth merger proposal and the Cadence board of directors unanimously recommends that you vote “FOR” the Cadence merger proposal and “FOR” the other proposals to be considered at the BancorpSouth special meeting and the Cadence special meeting, respectively.
Q:
What will happen if I return my proxy card without indicating how to vote?
A:
If you sign and return your proxy card without indicating how to vote on any particular proposal, the shares of BancorpSouth common stock represented by your proxy will be voted as recommended by the BancorpSouth board of directors with respect to such proposals or the shares of Cadence common stock represented by your proxy will be voted as recommended by the Cadence board of directors with respect to such proposals, as the case may be.
Q:
Can I change my vote after I have delivered my proxy or voting instruction card?
A:
If you directly hold shares of BancorpSouth common stock or Cadence common stock in your name as a record holder, you can change your vote at any time before your proxy is voted at your meeting. You can do this by:
submitting a written statement that you would like to revoke your proxy to the corporate secretary of BancorpSouth or Cadence, as applicable;
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signing and returning a proxy card with a later date;
in the case of holders of BancorpSouth common stock, voting through the Internet, QR code scan or by telephone at a later time; or in the case of holders of Cadence common stock, voting through the Internet at a later time; or
attending the applicable special meeting virtually, and voting at the special meeting.
If your shares are held by a broker, bank or other nominee, you should contact your broker, bank or other nominee to change your vote. If you are a beneficial owner of shares of BancorpSouth common stock held through the BancorpSouth 401(k) Plan, you may change your instruction to the BancorpSouth 401(k) Plan trustee by submitting a subsequent instruction to such trustee by 11:59 p.m. (Central Time) on August 4, 2021. You will not be able to vote those shares at the BancorpSouth special meeting.
Q:
Will BancorpSouth be required to submit the BancorpSouth merger proposal to its shareholders even if the BancorpSouth board of directors has withdrawn, modified or qualified its recommendation?
A:
Yes. Unless the merger agreement is terminated before the BancorpSouth special meeting, BancorpSouth is required to submit the BancorpSouth merger proposal to its shareholders even if the BancorpSouth board of directors has withdrawn or modified its recommendation.
Q:
Will Cadence be required to submit the Cadence merger proposal to its shareholders even if the Cadence board of directors has withdrawn, modified or qualified its recommendation?
A:
Yes. Unless the merger agreement is terminated before the Cadence special meeting, Cadence is required to submit the Cadence merger proposal to its shareholders even if the Cadence board of directors has withdrawn or modified its recommendation.
Q:
Are holders of BancorpSouth common stock or holders of BancorpSouth preferred stock entitled to dissenters’ rights?
A:
No. Holders of BancorpSouth common stock and BancorpSouth preferred stock are not entitled to dissenters’ rights under the Mississippi Business Corporation Act (the “MBCA”). For more information, see the section entitled “The Merger—Appraisal or Dissenters’ Rights in the Merger” beginning on page 110.
Q:
Are holders of Cadence common stock entitled to appraisal rights?
A:
No. Holders of Cadence common stock are not entitled to appraisal rights under the Delaware General Corporation Law (the “DGCL”). For more information, see the section entitled “The Merger—Appraisal or Dissenters’ Rights in the Merger” beginning on page 110.
Q:
Are there any risks that I should consider in deciding whether to vote for the approval of the BancorpSouth merger proposal, or the approval of the Cadence merger proposal?
A:
Yes. You should read and carefully consider the risk factors set forth in the section entitled “Risk Factors” beginning on page 32. You also should read and carefully consider the risk factors of BancorpSouth and Cadence contained in the documents that are incorporated by reference into this joint proxy statement/offering circular.
Q:
What are the material U.S. federal income tax consequences of the merger to U.S. holders of Cadence common stock?
A:
The merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), and it is a condition to the respective obligations of BancorpSouth and Cadence to complete the merger that each of BancorpSouth and Cadence receives a legal opinion to that effect. Accordingly, subject to the discussion regarding the special dividend below, U.S. holders (as defined in the section entitled “Material U.S. Federal Income Tax Consequences of the Merger”) generally will not recognize any gain or loss for U.S. federal income tax purposes on the exchange of their Cadence common stock for BancorpSouth common stock in the merger, except for any gain or loss that may result from the receipt of cash instead of a fractional share of BancorpSouth common stock.
Cadence intends to report the special dividend as a distribution with respect to its stock for U.S. federal income tax purposes. Accordingly, the receipt of the special dividend is expected to be treated as ordinary dividend income to the extent of Cadence’s current or accumulated earnings and profits, as determined under U.S. federal
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income tax principles, with any excess being treated first as a non-taxable return of capital to the extent of each U.S. holder’s tax basis in its Cadence common stock and thereafter as gain from the sale or exchange of a capital asset. It is possible, however, that the special dividend could be treated as cash received in the merger, in which case a U.S. holder generally would recognize gain (but not loss) in an amount equal to the lesser of (i) the special dividend received and (ii) the excess, if any, of (a) the sum of the special dividend plus the fair market value of the BancorpSouth common stock received in exchange for its shares of Cadence common stock in the merger over (b) such U.S. holder’s tax basis in its shares of Cadence common stock exchanged.
Tax consequences to you of the merger will depend upon your own situation. In addition, you may be subject to state, local or foreign tax laws that are not discussed in this joint proxy statement/offering circular. You should therefore consult with your own tax advisor for a full understanding of the tax consequences to you of the merger. For a more complete discussion of the material U.S. federal income tax consequences of the merger, see the section entitled “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 128.
Q:
When is the merger expected to be completed?
A:
BancorpSouth and Cadence expect the merger to close in the fourth quarter of 2021. However, neither BancorpSouth nor Cadence can predict the actual date on which the merger will be completed, or if the merger will be completed at all, because completion is subject to conditions and factors outside the control of both companies. BancorpSouth and Cadence must first obtain the approval of holders of BancorpSouth common stock and holders of Cadence common stock for the merger, as well as obtain necessary regulatory approvals and satisfy certain other closing conditions.
Q:
What are the conditions to complete the merger?
A:
The obligations of BancorpSouth and Cadence to complete the merger are subject to the satisfaction or waiver of certain closing conditions contained in the merger agreement, including the receipt of required regulatory approvals and the expiration of all statutory waiting periods without the imposition of any materially burdensome regulatory condition, authorization for listing on the New York Stock Exchange of the shares of the BancorpSouth common stock to be issued in the merger, subject to official notice of issuance, the absence of any order, injunction, decree or other legal restraint preventing the completion of the merger or the bank merger or making the completion of the merger or the bank merger illegal, receipt of certain tax opinions, approval by BancorpSouth shareholders of the BancorpSouth merger proposal and approval by Cadence shareholders of the Cadence merger proposal. For more information, see section entitled “The Merger Agreement—Conditions to Complete the Merger” beginning on page 124.
Q:
What happens if the merger is not completed?
A:
If the merger is not completed, holders of Cadence common stock will not receive any consideration for their shares of Cadence common stock in connection with the merger. Instead, Cadence will remain an independent public company, Cadence common stock will continue to be listed and traded on the NYSE, and BancorpSouth will not complete the issuance of shares of BancorpSouth common stock pursuant to the merger agreement. In addition, if the merger agreement is terminated in certain circumstances, a termination fee of $118 million will be payable by either BancorpSouth or Cadence, as applicable. See section entitled “The Merger Agreement—Termination Fee” beginning on page 126 for a more detailed discussion of the circumstances under which a termination fee will be required to be paid.
Q:
What happens if I sell my shares after the applicable record date but before my company’s special meeting?
A:
Each of the BancorpSouth and Cadence record date is earlier than the date of the BancorpSouth special meeting and the Cadence special meeting, as applicable, and earlier than the date that the merger is expected to be completed. If you sell or otherwise transfer your shares of BancorpSouth common stock or Cadence common stock, as applicable, after the applicable record date but before the date of the applicable special meeting, you will retain your right to vote at such special meeting (provided that such shares remain outstanding on the date of such special meeting), but, with respect to the Cadence common stock, you will not have the right to receive the merger consideration to be received by Cadence shareholders in connection with the merger. In order to receive the merger consideration, you must hold your shares of Cadence common stock through the completion of the merger.
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Q:
Should I send in my stock certificates now?
A:
No. Please do not send in your stock certificates with your proxy. After the merger is completed, an exchange agent selected by BancorpSouth and Cadence (the “exchange agent”) will send you instructions for exchanging Cadence stock certificates for the consideration to be received in the merger. See section entitled “The Merger Agreement—Conversion of Shares; Exchange of Cadence Stock Certificates” beginning on page 115. As of the date of this joint proxy statement/offering circular, Cadence does not have any stock certificates outstanding.
Q:
What should I do if I receive more than one set of voting materials for the same special meeting?
A:
If you hold shares of BancorpSouth common stock or Cadence common stock in “street name” and also directly in your name as a holder of record or otherwise or if you hold shares of BancorpSouth common stock or Cadence common stock in more than one (1) brokerage account, you may receive more than one (1) set of voting materials relating to the same special meeting.
Record Holders. For shares held directly, please complete, sign, date and return each proxy card (or cast your vote by telephone or over the Internet as provided on each proxy card) or otherwise follow the voting instructions provided in this joint proxy statement/offering circular to ensure that all of your shares of BancorpSouth common stock or Cadence common stock are voted.
Shares in “street name.” For shares held in “street name” through a bank, broker, trustee (including the BancorpSouth 401(k) Plan trustee) or other nominee, you should follow the procedures provided by your bank, broker, trustee or other nominee to vote your shares.
Q:
Who can help answer my questions?
A:
BancorpSouth shareholders: If you have any questions about the merger or how to submit your proxy or voting instruction card, or if you need additional copies of this document or the enclosed proxy card or voting instruction card, you should contact BancorpSouth’s proxy solicitor, Georgeson LLC, by calling toll-free at (866) 295-8105.
Cadence shareholders: If you have any questions about the merger or how to submit your proxy or voting instruction card, or if you need additional copies of this document or the enclosed proxy card or voting instruction card, you should contact Cadence’s proxy solicitor, Georgeson LLC, by calling toll-free at (866) 767-8867.
Q:
Where can I find more information about BancorpSouth and Cadence?
A:
You can find more information about BancorpSouth and Cadence from the various sources described under “Where You Can Find More Information” beginning on page 154.
Q:
What is householding and how does it affect me?
A:
The applicable regulatory rules permit companies to send a single set of proxy materials to any household at which two or more shareholders reside, unless contrary instructions have been received, but only if the applicable shareholders provide advance notice and follow certain procedures. In such cases, each shareholder continues to receive a separate notice of the meeting and proxy card. Certain brokerage firms may have instituted householding for beneficial owners of BancorpSouth common stock and Cadence common stock, as applicable, held through brokerage firms. If your family has multiple accounts holding BancorpSouth common stock or Cadence common stock, as applicable, you may have already received a householding notification from your broker. Please contact your broker directly if you have any questions or require additional copies of this joint proxy statement/offering circular. The broker will arrange for delivery of a separate copy of this joint proxy statement/offering circular promptly upon your written or oral request. You may decide at any time to revoke your decision to household, and thereby receive multiple copies.
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SUMMARY
This summary highlights selected information in this joint proxy statement/offering circular and may not contain all the information that is important to you. You should carefully read this entire joint proxy statement/offering circular and the other documents we refer you to for a more complete understanding of the matters being considered at the special meetings. In addition, we incorporate by reference important business and financial information about BancorpSouth and Cadence into this joint proxy statement/offering circular. You may obtain the information incorporated by reference into this joint proxy statement/offering circular without charge by following the instructions in the section entitled “Where You Can Find More Information” beginning on page 154 of this joint proxy statement/offering circular.
The Parties to the Merger (page 53)
BancorpSouth Bank
One Mississippi Plaza
201 South Spring Street
Tupelo, Mississippi 38804
(662) 680-2000
BancorpSouth is a Mississippi state-chartered bank headquartered in Tupelo, Mississippi. BancorpSouth has commercial banking, mortgage and insurance operations in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Missouri, Tennessee and Texas, and one loan production office in Durant, Oklahoma. BancorpSouth’s insurance agency subsidiary also operates an office in Illinois. BancorpSouth and its insurance agency subsidiary provide commercial banking, leasing, mortgage origination and servicing, insurance, brokerage and trust services to corporate customers, local governments, individuals and other financial institutions through an extensive network of branches and offices. As of March 31, 2021, BancorpSouth had total assets of $25.8 billion, deposits of $21.2 billion, and shareholders’ equity of $2.8 billion.
BancorpSouth common stock is traded on the NYSE under the symbol “BXS.
Cadence Bancorporation
2800 Post Oak Boulevard, Suite 3800
Houston, Texas 77056
(713) 871-4103
Cadence is a financial holding company and a Delaware corporation headquartered in Houston, Texas, and is the parent company of Cadence Bank, N.A. As of March 31, 2021, Cadence operated a network of 98 locations across Texas, Georgia, Alabama, Florida, Mississippi, and Tennessee. Cadence focuses on middle-market commercial lending, complemented by retail banking and wealth management services, and provides a broad range of banking services to businesses, high-net-worth individuals and business owners. As of March 31, 2021, Cadence had total assets of $18.8 billion in assets, $12.4 billion in total loans (net of unearned discounts and fees), $16.1 billion in deposits and $2.1 billion in shareholders’ equity.
Cadence common stock is traded on the NYSE under the symbol “CADE.”
The Merger and the Merger Agreement (pages 54 and 112)
The terms and conditions of the merger are contained in the merger agreement, a copy of which is attached as Annex A to this joint proxy statement/offering circular. You are encouraged to read the merger agreement carefully and in its entirety, as it is the primary legal document that governs the merger.
Pursuant to the merger agreement, Cadence will merge with and into BancorpSouth, with BancorpSouth continuing as the surviving entity in the merger. Following the completion of the merger, Cadence Bank, N.A., a subsidiary of Cadence, will merge with and into BancorpSouth, with BancorpSouth as the surviving entity in the bank merger. The name of the surviving entity will be “Cadence Bank” and the stock of the surviving entity will be listed on the NYSE under the symbol “CADE.” For a more detailed description of the Merger Agreement, see the section entitled “The Merger Agreement” beginning on page 112.
Merger Consideration (page 112)
At the effective time, holders of Cadence common stock will have the right to receive 0.70 shares of BancorpSouth common stock for each share of Cadence common stock they hold immediately prior to the effective time. Prior to
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the effective time and in connection with the closing, Cadence will declare and pay the special dividend of $1.25 per share of Cadence common stock to holders of record of shares of Cadence common stock. BancorpSouth will not issue any fractional shares of BancorpSouth common stock in the merger. Holders of Cadence common stock who would otherwise be entitled to receive a fraction of a share of BancorpSouth common stock in the merger will instead receive, for the fraction of a share, an amount in cash (rounded to the nearest cent) determined by multiplying the fraction of a share (after taking into account all shares of Cadence common stock held by such holder immediately prior to the effective time and rounded to the nearest thousandth when expressed in decimal form) of BancorpSouth common stock to which the holder would otherwise be entitled to receive by the average closing-sale price per share of BancorpSouth common stock on the NYSE as reported by The Wall Street Journal for the consecutive period of five (5) trading days ending on the day preceding the closing date of the merger. BancorpSouth common stock is listed on the NYSE under the symbol “BXS,” and Cadence common stock is listed on the NYSE under the symbol “CADE.” The following table shows the closing sale prices of BancorpSouth common stock and Cadence common stock as reported on the NYSE, as applicable, on April 9, 2021, the last full trading day before the public announcement of the merger agreement, and on June 29, 2021, the last practicable trading day before the date of this joint proxy statement/offering circular. This table also shows the implied value of the merger consideration to be issued in exchange for each share of Cadence common stock, which was calculated by multiplying the closing price of BancorpSouth common stock on those dates by the exchange ratio of 0.70, and not including the amount of the special dividend.
 
BancorpSouth
Common Stock
Cadence
Common Stock
Implied Value
of One Share
of Cadence
Common Stock
April 9, 2021
$32.26
$21.48
$22.58
June 29, 2021
$28.29
$20.82
$19.80
For more information on the exchange ratio, see the section entitled “The Merger—Terms of the Merger” beginning on page 54 and “The Merger Agreement—Merger Consideration” beginning on page 112.
Treatment of Cadence Equity Awards (page 113)
Cadence Stock Options
Each Cadence stock option that is outstanding immediately prior to the effective time will be equitably adjusted immediately prior to such date by an amount equal to the special dividend and, at the effective time, will automatically be converted into a BancorpSouth converted stock option to purchase shares of BancorpSouth common stock based on the exchange ratio and subject to the same terms and conditions, after giving effect to any “change in control” provisions under the applicable Cadence equity incentive plan or award agreement, as applied to the corresponding Cadence stock option immediately prior to the effective time.
Cadence Restricted Stock Unit Awards
At the effective time, each Cadence RSU award that is outstanding immediately prior to the effective time will automatically be converted into the right to receive (A) a BancorpSouth converted RSU award based on the exchange ratio and (B) the special dividend with respect to the number of shares of Cadence common stock subject to the Cadence RSU award, subject to the same terms and conditions, including vesting and settlement, as apply to the corresponding Cadence RSU award immediately prior to the effective time, and each such BancorpSouth converted RSU Award will be subject to the same terms and conditions (including vesting terms), after giving effect to any “change in control” provisions under the applicable Cadence equity incentive plan or award agreement, as applied to the corresponding Cadence RSU award immediately prior to the effective time.
Cadence PSU Awards
At the effective time, each Cadence PSU award that is outstanding immediately prior to the effective time will, automatically be converted into the right to receive (A) a BancorpSouth converted RSU award based on the exchange ratio, assuming the higher of target performance and actual performance through the latest practicable date prior to the effective time, and (B) the special dividend with respect to the number of shares of Cadence common stock subject to such Cadence PSU award that is determined to be earned as provided above, subject to the same terms and conditions, including vesting and settlement, as applied with respect to the corresponding Cadence PSU award
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immediately prior to the effective time, and each such BancorpSouth converted RSU award will be subject to the same terms and conditions (including service-based vesting terms but not performance goals), after giving effect to any “change in control” provisions under the applicable Cadence equity incentive plan or award agreement, as applied to the corresponding Cadence PSU award immediately prior to the effective time.
Treatment upon Certain Terminations of Employment following the Effective Time
With respect to the BancorpSouth converted stock options and BancorpSouth converted RSU awards, upon a qualifying termination within the two-year period following the closing of the merger, such converted BancorpSouth equity awards will become fully vested, and the BancorpSouth converted stock options will remain exercisable for the full original term.
Treatment of Cadence ESPP
Pursuant to the merger agreement, the offering period under the ESPP that commenced on April 1, 2021 will be the final offering period under the ESPP, the ESPP will terminate at the effective time and no further rights will be granted or exercised under the ESPP thereafter.
Treatment of BancorpSouth Equity Awards (page 95)
With respect to BancorpSouth equity awards outstanding immediately prior to the effective time, upon a termination of employment of a holder by BancorpSouth without “Cause” (as defined in the BancorpSouth Long-Term Equity Incentive Plan) within 24 months following the closing of the merger, such BancorpSouth equity awards (other than any outstanding performance period BancorpSouth PSUs) will become fully vested. Any outstanding performance period BancorpSouth PSU will cease to be subject to any service-based vesting conditions and continue to be subject to performance-based vesting conditions in accordance with the terms of the award.
Material U.S. Federal Income Tax Consequences of the Merger (page 128)
The merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code, and it is a condition to the respective obligations of BancorpSouth and Cadence to complete the merger that each of BancorpSouth and Cadence receives a legal opinion to that effect. Accordingly, subject to the discussion below regarding the special dividend, U.S. holders (as defined in the section entitled “Material U.S. Federal Income Tax Consequences of the Merger”) generally will not recognize any gain or loss for U.S. federal income tax purposes on the exchange of their Cadence common stock for BancorpSouth common stock in the merger, except for any gain or loss that may result from the receipt of cash instead of a fractional share of BancorpSouth common stock.
Cadence intends to report the special dividend as a distribution with respect to its stock for U.S. federal income tax purposes. Accordingly, the receipt of the special dividend is expected to be treated as ordinary dividend income to the extent of Cadence’s current or accumulated earnings and profits, as determined under U.S. federal income tax principles, with any excess being treated first as a non-taxable return of capital to the extent of each U.S. holder’s tax basis in its Cadence common stock and thereafter as gain from the sale or exchange of a capital asset. It is possible, however, that the special dividend could be treated as consideration received in the merger, in which case a U.S. holder generally would recognize gain (but not loss) in an amount equal to the lesser of (i) the special dividend received and (ii) the excess, if any, of (a) the sum of the special dividend plus the fair market value of the BancorpSouth common stock received (including any fractional shares of BancorpSouth common stock deemed received) in exchange for its shares of Cadence common stock in the merger over (b) such U.S. holder’s tax basis in its shares of Cadence common stock exchanged.
The tax consequences to you of the merger will depend upon your own situation. In addition, you may be subject to state, local or foreign tax laws that are not discussed in this joint proxy statement/offering circular. You should therefore consult with your own tax advisor for a full understanding of the tax consequences to you of the merger. For a more complete discussion of the material U.S. federal income tax consequences of the merger, see the section entitled “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 128.
BancorpSouth’s Reasons for the Merger; Recommendation of BancorpSouth’s Board of Directors (page 61)
The BancorpSouth board of directors has determined that the merger, the merger agreement and the transactions contemplated by the merger agreement are advisable and fair to and in the best interests of BancorpSouth and its shareholders and has unanimously approved and adopted the merger agreement, the merger and the other transactions
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contemplated by the merger agreement. The BancorpSouth board of directors unanimously recommends that holders of BancorpSouth common stock vote “FOR” the approval of the merger agreement and “FOR” the other proposals presented at the BancorpSouth special meeting. For a more detailed discussion of the BancorpSouth board of directors’ recommendation, see “The Merger—BancorpSouth’s Reasons for the Merger; Recommendation of BancorpSouth’s Board of Directors” beginning on page 61.
Cadence’s Reasons for the Merger; Recommendation of Cadence’s Board of Directors (page 72)
After careful consideration, the Cadence board of directors, by a unanimous vote of all directors, approved and adopted the merger agreement and declared the merger agreement and the transactions contemplated thereby, including the merger, to be advisable and in the best interests of Cadence and the shareholders of Cadence. The Cadence board of directors unanimously recommends that holders of Cadence common stock vote “FOR” the adoption of the merger agreement and “FOR” the other proposals presented at the Cadence special meeting. See section entitled “The Merger—Cadence’s Reasons for the Merger; Recommendation of Cadence’s Board of Directors” beginning on page 72 for a more detailed discussion of the Cadence board of directors’ recommendation.
Opinion of BancorpSouth’s Financial Advisor (page 64)
In connection with the merger, Keefe, Bruyette & Woods, Inc. (“KBW”) delivered a written opinion, dated April 9, 2021, to the BancorpSouth board of directors as to the fairness, from a financial point of view and as of the date of the opinion, to BancorpSouth of the exchange ratio in the proposed merger. The full text of KBW’s opinion, which describes the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW in preparing the opinion, is attached as Annex B to this joint proxy statement/offering circular. The opinion was for the information of, and was directed to, the BancorpSouth board of directors (in its capacity as such) in connection with its consideration of the financial terms of the merger. The opinion did not address the underlying business decision of BancorpSouth to engage in the merger or enter into the merger agreement or constitute a recommendation to the BancorpSouth board of directors in connection with the merger, and it does not constitute a recommendation to any holder of BancorpSouth common stock or any shareholder or stockholder of any other entity as to how to vote in connection with the merger or any other matter.
For more information, see the section entitled “The Merger—Opinion of BancorpSouth’s Financial Advisor” beginning on page 64 and the full text of KBW’s opinion attached as Annex B to this joint proxy statement/offering circular.
Opinions of Cadence’s Financial Advisors (page 75)
Opinion of Goldman Sachs & Co. LLC
At a meeting of the Cadence board of directors, Goldman Sachs & Co. LLC (“Goldman Sachs”) rendered to the Cadence board of directors its oral opinion, subsequently confirmed in Goldman Sachs’ written opinion, dated April 12, 2021, to the effect that, as of the date of Goldman Sachs’ written opinion, and based upon and subject to the factors and assumptions set forth in Goldman Sachs’ written opinion, the 0.70 shares of BancorpSouth common stock plus the $1.25 special dividend per share to be paid to the holders (other than BancorpSouth and its affiliates) of shares of Cadence Class A common stock pursuant to the merger agreement was fair from a financial point of view to such holders.
The full text of the written opinion of Goldman Sachs, dated April 12, 2021, which sets forth the assumptions made, procedures followed, matters considered, qualifications and limitations on the review undertaken in connection with the opinion, is attached to this joint proxy statement/offering circular as Annex C. The summary of the Goldman Sachs opinion contained in this joint proxy statement/offering circular is qualified in its entirety by reference to the full text of Goldman Sachs’ written opinion. Goldman Sachs’ advisory services and opinion were provided for the information and assistance of the Cadence board of directors in connection with its consideration of the proposed merger and the opinion does not constitute a recommendation as to how any holder of shares of Cadence Class A common stock should vote with respect to the proposed merger or any other matter.
Pursuant to an engagement letter between Cadence and Goldman Sachs, Cadence has agreed to pay Goldman Sachs for its services in connection with the merger an aggregate fee of up to $15 million, $2 million of which became payable upon the execution of the merger agreement, and the remainder of which is payable contingent upon completion of the proposed merger.
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For more information, see the section entitled “The Merger—Opinions of Cadence’s Financial Advisors—Opinion of Goldman Sachs & Co. LLC” beginning on page 75 and Annex C.
Opinion of J.P. Morgan Securities LLC
Pursuant to an engagement letter dated April 7, 2021, Cadence retained J.P. Morgan Securities LLC (“J.P. Morgan”) as its financial advisor in connection with the proposed merger.
At a meeting of the board of directors of Cadence on April 9, 2021, J.P. Morgan rendered its oral opinion to the board of directors of Cadence, subsequently confirmed by delivery of J.P. Morgan’s written opinion to the board of directors of Cadence, dated April 12, 2021, that, as of the date of J.P. Morgan’s written opinion, and based upon and subject to the factors and assumptions set forth in its written opinion, the 0.70 shares of BancorpSouth common stock plus the $1.25 special dividend per share to be paid to the holders of shares of Cadence Class A common stock in the proposed merger was fair, from a financial point of view, to such holders.
The full text of the written opinion of J.P. Morgan, dated April 12, 2021, which sets forth the assumptions made, matters considered and limits on the review undertaken, is attached as Annex D to this proxy statement/offering circular and is incorporated herein by reference. The summary of the opinion of J.P. Morgan set forth in this proxy statement/offering circular is qualified in its entirety by reference to the full text of such opinion. Cadence’s stockholders are urged to read the opinion in its entirety. J.P. Morgan’s written opinion was provided to the board of directors of Cadence (in its capacity as such) in connection with and for the purposes of its evaluation of the merger consideration plus special dividend to be paid to the holders of Cadence Class A common stock in the proposed merger, was directed only to the merger consideration plus special dividend to be paid to the holders of Cadence Class A common stock in the proposed merger and did not address any other aspect of the proposed merger. J.P. Morgan expressed no opinion as to the fairness of any consideration to be paid in connection with the proposed merger to the holders of any other class of securities, creditors or other constituencies of Cadence, or as to the underlying decision by Cadence to engage in the proposed merger. The issuance of J.P. Morgan’s opinion was approved by a fairness committee of J.P. Morgan. The opinion does not constitute a recommendation to any stockholder of Cadence as to how such stockholder should vote with respect to the proposed merger or any other matter.
For more information, see the section entitled “The Merger—Opinions of Cadence’s Financial Advisors—Opinion of J.P. Morgan Securities LLC” beginning on page 84 and Annex D.
Appraisal or Dissenters’ Rights in the Merger (page 110)
Under Section 79-4-13.02 of the MBCA, the holders of BancorpSouth common stock and BancorpSouth preferred stock will not be entitled to dissenters’ rights in connection with the merger with respect to shares of any class or series that remain outstanding after completion of the merger. If the merger is completed, holders of BancorpSouth common stock and BancorpSouth preferred stock will not receive any consideration, and their shares of BancorpSouth common stock and BancorpSouth preferred stock will remain outstanding and will constitute shares of the combined company. Accordingly, holders of BancorpSouth common stock and BancorpSouth preferred stock are not entitled to any dissenters’ rights in connection with the merger.
Under Section 262 of the DGCL, the holders of Cadence common stock will not be entitled to appraisal rights in connection with the merger if, on the record date for the Cadence special meeting, Cadence’s shares are listed on a national securities exchange or held of record by more than two thousand (2,000) shareholders and holders of Cadence common stock are not required to accept as consideration for their shares anything other than the shares of the combined company, shares of another corporation which at the effective date of the merger will be either listed on a national securities exchange or held of record by more than two thousand (2,000) shareholders, cash paid in lieu of fractional shares or any combination of the foregoing. Cadence common stock is currently listed on the NYSE, a national securities exchange, and is expected to continue to be so listed on the record date for the Cadence special meeting. Accordingly, the holders of Cadence common stock are not entitled to any appraisal rights in connection with the merger.
For more information, see section entitled “The Merger—Appraisal or Dissenters’ Rights in the Merger” beginning on page 110.
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Interests of Certain BancorpSouth Directors and Executive Officers in the Merger (page 95)
In considering the BancorpSouth board of directors’ recommendation to vote to approve the BancorpSouth merger proposal, holders of BancorpSouth common stock should be aware that BancorpSouth’s directors and executive officers may have interests in the merger, including financial interests, that may be different from, or in addition to, those of holders of BancorpSouth common stock generally. These interests include, among others:
BancorpSouth equity awards (other than any outstanding performance period BancorpSouth PSUs), including those held by its directors and executive officers, will become fully vested upon a qualifying termination within 24 months following the closing of the merger in accordance with the merger agreement, and any outstanding performance period BancorpSouth PSU will cease to be subject to any service-based vesting conditions and continue to be subject to performance-based vesting conditions in accordance with the terms of the award.
Each of Messrs. Rollins and Bagley have entered into a new employment agreement with BancorpSouth, in each case setting forth the terms of such executive’s post-closing service with BancorpSouth, including with respect to retention awards, and agreement to comply with restrictive covenants in exchange for certain compensation and benefits after the effective time.
In connection with the merger, Cadence and BancorpSouth may establish a cash retention program to promote retention and to incentivize efforts to consummate the transactions contemplated by the merger agreement and effectuate integration and conversion. BancorpSouth’s executive officers (including BancorpSouth’s named executive officers) will be eligible to participate in these retention programs.
While certain of BancorpSouth’s executive officers are party to a change in control agreement with BancorpSouth that provides for certain benefits upon a termination of employment within twelve (12) months following a change in control event, the merger will not constitute a change in control event for purposes of these change in control agreements, so no entitlements will arise thereunder.
Certain current members of the BancorpSouth board of directors and BancorpSouth executive officers will continue to serve as members, of the board of directors of BancorpSouth or executive officers or key leaders of BancorpSouth after the effective time.
The BancorpSouth board of directors was aware of and considered these respective interests when deciding to adopt the merger agreement and in determining to recommend to BancorpSouth shareholders that they vote for the BancorpSouth merger proposal and thereby approve the transactions contemplated by the merger agreement, including the merger. For more information, see the section entitled “The Merger—Interests of Certain BancorpSouth Directors and Executive Officers in the Merger” beginning on page 95.
Interests of Certain Cadence Directors and Executive Officers in the Merger (page 98)
In considering the Cadence board of directors’ recommendation to vote to approve the Cadence merger proposal, holders of Cadence common stock should be aware that Cadence’s directors and executive officers may have interests in the merger, including financial interests, that may be different from, or in addition to, those of holders of Cadence common stock generally. These interests include, among others:
Cadence equity awards, including those held by its executive officers, will be converted into equity awards of BancorpSouth in accordance with the merger agreement (with any performance goals deemed satisfied at the greater of the target and actual level of performance prior to the effective time of the merger), and such converted Cadence equity awards will be subject to “double-trigger” vesting upon a qualifying termination within the two-year period following the merger, with stock options to remain exercisable for the remainder of the full original term;
Cadence performance cash awards will remain outstanding and will be subject to “double-trigger” vesting upon a qualifying termination within the two-year period following the merger (with any performance goals deemed satisfied at the greater of the target and actual level of performance prior to the effective time of the merger);
Each Cadence executive officer is party to an employment or change-in-control agreement with Cadence that provides that if such executive officer’s employment is terminated without cause by Cadence, or if the executive officer terminates his or her employment for good reason, in each case within two years
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following the merger, such executive officer will be entitled to cash severance benefits and, in certain instances, continued life insurance and medical benefits coverage at Cadence’s expense, although the new agreements between BancorpSouth and each of Paul B. Murphy, Jr., R. H. “Hank” Holmes, IV, Valerie Toalson, Jack Randall Schultz, Edward Braddock and Thomas Clark supersede the legacy Cadence agreements;
Each of Messrs. Murphy, Holmes, Braddock, Schultz and Clark and Ms. Toalson have entered into a new employment agreement with BancorpSouth, and each of Sheila Ray and Aimee Touchet Hamilton have entered into an offer letter with BancorpSouth, in each case setting forth the terms of such executives’ post-closing service with BancorpSouth, including with respect to retention awards, and their agreement to comply with restrictive covenants in exchange for certain compensation and benefits after the effective time;
Certain current members of the Cadence board of directors and Cadence executive officers will continue to serve as members of the board of directors of BancorpSouth or executive officers or key leaders of BancorpSouth after the effective time; and
Cadence’s directors and officers are entitled to continued indemnification and insurance coverage under the merger agreement.
The Cadence board of directors was aware of and considered these respective interests when deciding to adopt and approve the merger agreement and the transactions contemplated thereby, including the merger, and in determining to recommend to Cadence shareholders that they vote for the Cadence merger proposal and thereby approve the transactions contemplated by the merger agreement, including the merger. For more information, see the section entitled “The Merger—Interests of Certain Cadence Directors and Executive Officers in the Merger” beginning on page 98.
Governance of the Combined Company After the Merger (page 107)
Charter
Effective as of the effective time, the articles of incorporation of the surviving entity will be amended (such amendment, the “BancorpSouth charter amendment”) to reflect (i) an increase in the size of the board of directors to twenty (20) directors as contemplated under the section entitled “—Board of Directors” below and (ii) the change in the name of the surviving entity to “Cadence Bank” as contemplated under the section entitled “—Corporate Name; Headquarters of the Combined Company After the Merger” below.
Bylaws
Prior to the effective time, the BancorpSouth board of directors will take all actions necessary to cause the bylaws of BancorpSouth to be amended as set forth in Exhibit A to the merger agreement (such amendment, the “BancorpSouth bylaw amendment”), and as so amended, effective upon the completion of the merger, the bylaws of BancorpSouth will be the bylaws of the combined company, until thereafter amended as provided therein or in accordance with applicable law. The bylaws of BancorpSouth as amended pursuant to the merger agreement will implement certain governance and related matters for the combined company following completion of the merger, including: the roles of the Chairman of the board of directors and the Chief Executive Officer, the Executive Vice Chairman and the independent lead director, the composition and size of the combined company’s board of directors, the composition of the committees of the board of directors, the name of the combined company and the locations of the main office and bank headquarters and corporate headquarters. Each of the foregoing governance matters is discussed further below. For a more detailed description of the governing documents of the combined company, see the section entitled “The Merger—Governance of the Combined Company After the Merger” beginning on page 107.
Chairman; Executive Vice Chairman; Independent Lead Director; Chief Executive Officer
Effective as of the effective time, (i) James D. Rollins III, the current Chairman of the board of directors and Chief Executive Officer of BancorpSouth, will continue to serve as Chairman of the board of directors and Chief Executive Officer of the combined company, (ii) Paul B. Murphy, Jr., the current Chairman and Chief Executive Officer of Cadence, will serve as Executive Vice Chairman of the combined company, and (iii) Larry G. Kirk, a current member of the board of directors of BancorpSouth, will serve as independent lead director of the board of directors of the
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combined company.
From the effective time and until the thirty-six (36) month anniversary of the effective time, any removal of any of the individuals serving in the capacities described above, any amendment or modification to any employment or similar agreement to the extent such amendment or modification would materially and adversely affect such individual, or any termination of their employment by the combined company or any of its subsidiaries, in each case, will require the affirmative vote of at least two-thirds (66.7%) of the entire board of directors of the combined company.
Board of Directors
During the period between the effective time and the first (1st) annual meeting of shareholders of the combined company, the board of directors of the combined company will have twenty (20) members, consisting of:
eleven (11) members of the BancorpSouth board of directors as of the effective time who were directors of BancorpSouth as in existence immediately prior to the effective time (collectively, the “legacy BancorpSouth directors” and, each, a “legacy BancorpSouth director”), one of whom, as of the effective time, will be the Chief Executive Officer of BancorpSouth as of immediately prior to the effective time; and
nine (9) members of the Cadence board of directors as of the effective time who were directors of Cadence as in existence immediately prior to the effective time (collectively, the “legacy Cadence directors” and, each, a “legacy Cadence director”), one of whom, as of the effective time, will be the Chief Executive Officer of Cadence as of immediately prior to the effective time.
As a result, immediately following the effective time, the board of directors of the combined company is expected to consist of the members of the boards of directors of BancorpSouth and Cadence as of immediately prior to the effective time.
As of the first (1st) annual meeting of shareholders of the combined company, the board of directors of the combined company will be reduced to eighteen (18) directors and in connection with the first (1st) annual meeting of shareholders, the board of directors of the combined company will nominate a slate of directors to serve in designated classes that is comprised of:
all the legacy Cadence directors who are eligible to serve under the provisions of the bylaws and, in accordance with BancorpSouth’s corporate governance principles, who are under the age of seventy-five (75) as of the date of the first (1st) annual meeting of shareholders of the combined company; and
each legacy BancorpSouth director whose class term has expired as of the first (1st) annual meeting of shareholders of the combined company.
From the effective time and until the thirty-six (36) month anniversary of the effective time, any modification or amendment to, or repeal of, the bylaw provisions implementing the above arrangements will require the affirmative vote of at least two-thirds (66.7%) of the entire board of directors of the combined company.
Composition of Committees
From the effective time and until the thirty-six (36) month anniversary of the effective time, (i) the board of directors of the combined company will have and maintain as standing committees, an audit committee, a risk management committee, an executive compensation and stock incentive committee, a nominating and corporate governance committee, a credit risk committee and a trust and financial services committee, (ii) the board of directors of the combined company may, by resolution, establish any committee not expressly contemplated by BancorpSouth’s bylaws composed of directors as they may determine to be necessary or appropriate for the conduct of business of the combined company and may prescribe the composition, duties and procedures thereof, (iii) during any period in which an executive committee is in existence, the chair of the executive committee will be James D. Rollins III and each of Paul B. Murphy, Jr. and Larry G. Kirk will serve as a member of the executive committee, and (iv) no committee will be permitted to take any action, and the board of directors will not delegate to any committee the power to take any action, that, if taken by the board of directors, would require the affirmative vote of at least two-thirds (66.7%) of the entire board of directors of the combined company.
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From the effective time and until the thirty-six (36) month anniversary of the effective time, any modification or amendment to, or repeal of, the bylaw provisions implementing the above arrangements will require the affirmative vote of at least two-thirds (66.7%) of the entire board of directors of the combined company.
Management Team
Effective as of the effective time, the officers of the combined company will include James D. Rollins III as Chairman and Chief Executive Officer, Paul B. Murphy, Jr. as Executive Vice Chairman, Chris A. Bagley as President, R.H. “Hank” Holmes, IV, as Chief Banking Officer and Valerie C. Toalson as Chief Financial Officer.
Corporate Name; Headquarters of the Combined Company After the Merger
From the effective time and until the thirty-six (36) month anniversary of the effective time, (i) the name of the combined company will be “Cadence Bank,” (ii) the shares of common stock of the surviving entity will be listed on the NYSE under the symbol “CADE” and (iii) the main office and bank headquarters of the combined company will be located in Tupelo, Mississippi and the corporate headquarters of the combined company will be located in Houston, Texas, and any modification or amendment to, or repeal of, the bylaw provisions implementing the foregoing arrangements will require the affirmative vote of at least two-thirds (66.7%) of the entire board of directors of the combined company.
Regulatory Approvals (page 109)
BancorpSouth and Cadence have agreed to cooperate with each other and use reasonable best efforts to promptly prepare and file all documentation to obtain as promptly as practicable all permits, consents, waivers, approvals and authorizations of all third parties and governmental entities that are necessary or advisable to consummate the transactions contemplated by the merger agreement (including the merger and the bank merger), and to comply with the terms and conditions of all such permits, consents, waivers, orders, approvals and authorizations of all such governmental entities. These approvals or waivers include, among others, the approval or waiver, as applicable, of the FDIC, the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”) and the Mississippi Department of Banking and Consumer Finance (the “Mississippi Banking Department”). On May 7, 2021, BancorpSouth filed applications with the FDIC and the Mississippi Banking Department seeking approval for the merger and the bank merger. On May 13, 2021, BancorpSouth requested from the Federal Reserve Board a waiver from the approval requirements under Section 3 of the Bank Holding Company Act of 1956, as amended (the “BHC Act”), pursuant to 12 C.F.R. § 225.12(d)(2).
Although neither BancorpSouth nor Cadence knows of any reason why it cannot obtain these regulatory approvals in a timely manner, BancorpSouth and Cadence cannot be certain when or if they will be obtained.
Expected Timing of the Merger
BancorpSouth and Cadence expect to consummate the merger in the fourth quarter of 2021.
Conditions to Complete the Merger (page 124)
As more fully described in this joint proxy statement/offering circular and in the merger agreement, the completion of the merger depends on a number of conditions being satisfied or, where legally permissible, waived. These conditions include:
approval of the merger agreement by the holders of BancorpSouth common stock and approval of the merger agreement by the holders of Cadence common stock;
authorization for listing on the NYSE, subject to official notice of issuance, of the shares of BancorpSouth common stock to be issued in the merger;
all requisite regulatory authorizations, consents, waivers, orders and approvals from the Federal Reserve Board, the FDIC and the Mississippi Banking Department or such other approvals the failure of which to be obtained would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the combined company and its subsidiaries, after giving effect to the merger (the “requisite regulatory approvals”) having been obtained and remaining in full force and effect, and all statutory waiting periods in respect thereof having expired or been terminated, without the imposition of any materially burdensome regulatory condition;
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no order, injunction or other legal restraint preventing the completion of the merger or making the completion of the merger, the bank merger or the other transactions contemplated by the merger agreement illegal;
subject to materiality standards provided in the merger agreement, the accuracy of the representations and warranties of BancorpSouth and Cadence in the merger agreement;
performance in all material respects by each of BancorpSouth and Cadence of its obligations, covenants and agreements under the merger agreement; and
receipt by each of Cadence and BancorpSouth of an opinion from counsel as to certain tax matters.
Termination of the Merger Agreement (page 125)
The merger agreement may be terminated at any time prior to the completion of the merger, whether before or after the receipt of the required vote to approve the merger agreement by BancorpSouth shareholders or Cadence shareholders, in the following circumstances:
by mutual written consent of BancorpSouth and Cadence;
by either BancorpSouth or Cadence if any governmental entity that must grant a requisite regulatory approval has denied approval of the merger or the bank merger and such denial has become final and nonappealable or any governmental entity of competent jurisdiction has issued a final and nonappealable order, injunction, decree or other legal restraint or prohibition permanently enjoining or otherwise prohibiting or making illegal the merger or the bank merger, unless the failure to obtain a requisite regulatory approval is due to the failure of the party seeking to terminate the merger agreement to perform or observe its obligations, covenants and agreements under the merger agreement;
by either BancorpSouth or Cadence if the merger has not been completed on or before April 12, 2022 (the “termination date”), unless the failure of the merger to be completed by such date is due to the failure of the party seeking to terminate the merger agreement to perform or observe its obligations, covenants and agreements under the merger agreement;
by either BancorpSouth or Cadence (provided that the terminating party is not then in material breach of any representation, warranty, obligation, covenant or other agreement contained in the merger agreement) if there is a breach of any of the obligations, covenants or agreements or any of the representations or warranties (or any such representation or warranty ceases to be true) set forth in the merger agreement on the part of the other party that either individually or in the aggregate would constitute, if occurring or continuing on the date the merger is completed, the failure of a closing condition of the terminating party and which is not cured within forty-five (45) days following written notice to the party committing such breach, or by its nature or timing cannot be cured during such period (or such fewer days as remain prior to the termination date);
by Cadence, if: (1) the BancorpSouth board of directors (i) withholds, withdraws, modifies or qualifies in a manner adverse to Cadence its recommendation in this joint proxy statement/offering circular that the holders of BancorpSouth common stock approve the merger agreement (the “BancorpSouth board recommendation”); (ii) fails to make the BancorpSouth board recommendation in this joint proxy statement/offering circular; (iii) adopts, approves, recommends or endorses an acquisition proposal (as defined below in “The Merger Agreement—Agreement Not to Solicit Other Offers” beginning on page 123) or publicly announces an intention to adopt, approve, recommend or endorse an acquisition proposal; (iv) fails to publicly and without qualification (A) recommend against any acquisition proposal or (B) reaffirm the BancorpSouth board recommendation within ten (10) business days (or such fewer number of days as remains prior to the BancorpSouth special meeting) after an acquisition proposal is made public or any request by Cadence to do so; or (v) publicly proposes to do any of the foregoing; or (2) BancorpSouth or the BancorpSouth board of directors breaches in any material respect its obligations relating to non-solicitation of acquisition proposals or its obligations related to shareholder approval and the BancorpSouth board recommendation; or
by BancorpSouth, if: (1) the Cadence board of directors (i) withholds, withdraws, modifies or qualifies in a manner adverse to BancorpSouth its recommendation in this joint proxy statement/offering circular that the holders of Cadence common stock approve the merger agreement (the “Cadence board recommendation”); (ii) fails to make the Cadence board recommendation in this joint proxy
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statement/offering circular; (iii) adopts, approves, recommends or endorses an acquisition proposal or publicly announces an intention to adopt, approve, recommend or endorse an acquisition proposal; (iv) fails to publicly and without qualification (A) recommend against any acquisition proposal or (B) reaffirm the Cadence board recommendation within ten (10) business days (or such fewer number of days as remains prior to the Cadence special meeting) after an acquisition proposal is made public or any request by BancorpSouth to do so; or (v) publicly proposes to do any of the foregoing; or (2) Cadence or the Cadence board of directors breaches in any material respect its obligations relating to non-solicitation of acquisition proposals or its obligations related to shareholder approval and the Cadence board recommendation.
Neither BancorpSouth nor Cadence is permitted to terminate the merger agreement as a result of any increase or decrease in the market price of BancorpSouth common stock or Cadence common stock.
Termination Fee (page 126)
If the merger agreement is terminated under certain circumstances, including circumstances involving alternative acquisition proposals and changes in the recommendation of Cadence’s or BancorpSouth’s respective boards, Cadence or BancorpSouth may be required to pay a termination fee to the other equal to $118 million.
Accounting Treatment (page 108)
BancorpSouth and Cadence each prepare their respective financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). The merger will be accounted for using the acquisition method of accounting, and BancorpSouth will be treated as the accounting acquirer.
The Rights of Holders of Cadence Common Stock Will Change as a Result of the Merger (page 23)
The rights of holders of Cadence common stock are governed by Delaware law and by the certificate of incorporation and bylaws of Cadence. In the merger, holders of Cadence common stock will become holders of BancorpSouth common stock, and their rights will be governed by Mississippi law and by BancorpSouth’s articles of incorporation, as amended by the BancorpSouth charter amendment, and bylaws, as amended by the BancorpSouth bylaw amendment. Holders of Cadence common stock will have different rights once they become holders of BancorpSouth common stock due to differences between the Cadence governing documents and Delaware law, on the one hand, and the BancorpSouth governing documents and Mississippi law, on the other hand. These differences are described in more detail under the section entitled “Comparison of Shareholders’ Rights” beginning on page 139.
The BancorpSouth Special Meeting (page 40)
The BancorpSouth special meeting will be held virtually on August 9, 2021, at 9:00 a.m. (Central Time), at the following website: http://meetings.computershare.com/MTCW5QQ. At the BancorpSouth special meeting, holders of BancorpSouth common stock will be asked to vote on the following matters:
the BancorpSouth merger proposal;
the BancorpSouth compensation proposal; and
the BancorpSouth adjournment proposal.
You may vote at the BancorpSouth special meeting if you owned shares of BancorpSouth common stock at the close of business on July 6, 2021. As of July 6, 2021, there were 108,614,595 shares of BancorpSouth common stock outstanding, of which less than 2 percent (1.27%) were owned and entitled to be voted by BancorpSouth directors and executive officers and their affiliates. We currently expect that BancorpSouth’s directors and executive officers will vote their shares in favor of the BancorpSouth merger proposal, although none of them has entered into any agreements obligating them to do so.
If you do not vote, it will be more difficult for BancorpSouth to obtain the necessary quorum to hold the BancorpSouth special meeting. The BancorpSouth merger proposal, BancorpSouth compensation proposal and BancorpSouth adjournment proposal will each be approved if a majority of the votes cast on each proposal by the holders of BancorpSouth common stock are voted in favor of each such proposal. If you mark “ABSTAIN” on your proxy, fail to submit a proxy or vote at the BancorpSouth special meeting or fail to instruct your bank, broker, BancorpSouth 401(k) Plan trustee or other nominee how to vote with respect to the BancorpSouth merger proposal, BancorpSouth compensation proposal or BancorpSouth adjournment proposal, you will not be deemed to have cast a vote with respect to the applicable proposal and it will have no effect on the applicable proposal.
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The Cadence Special Meeting (page 47)
The Cadence special meeting will be held virtually on August 9, 2021, at 9:00 a.m. (Central Time), at the following website: www.virtualshareholdermeeting.com/CADE2021SM. At the Cadence special meeting, holders of Cadence common stock will be asked to vote on the following matters:
the Cadence merger proposal;
the Cadence compensation proposal; and
the Cadence adjournment proposal.
You may vote at the Cadence special meeting if you owned shares of Cadence common stock at the close of business on July 6, 2021. As of July 6, 2021, there were 124,752,738 shares of Cadence common stock outstanding, of which less than 2.1% were owned and entitled to be voted by Cadence directors and executive officers and their affiliates. We currently expect that Cadence’s directors and executive officers will vote their shares in favor of the Cadence merger proposal, although none of them has entered into any agreements obligating them to do so.
If you do not vote, it will be more difficult for Cadence to obtain the necessary quorum to hold the Cadence special meeting. The Cadence merger proposal will be approved if a majority of the outstanding shares of common stock of Cadence entitled to be cast on the merger agreement are voted in favor of such proposal. The Cadence compensation proposal and the Cadence adjournment proposal will each be approved if a majority of the shares of Cadence common stock entitled to vote, represented by virtual attendance or by proxy at the Cadence special meeting, are voted in favor of each such proposal. If you mark “ABSTAIN” on your proxy, fail to submit a proxy or vote at the Cadence special meeting or fail to instruct your bank, broker or other nominee how to vote with respect to the Cadence merger proposal, it will have the same effect as a vote “AGAINST” the Cadence merger proposal. If you mark “ABSTAIN” on your proxy, it will have the same effect as a vote “AGAINST” the Cadence compensation proposal or the Cadence adjournment proposal, as applicable, and if you fail to submit a proxy or vote at the Cadence special meeting or fail to instruct your bank, broker or other nominee how to vote on the Cadence compensation proposal or the Cadence adjournment proposal, your shares will not be deemed to be represented at the Cadence special meeting and it will have no effect on the Cadence compensation proposal or the Cadence adjournment proposal, as applicable.
Risk Factors (page 32)
In evaluating the merger agreement, the merger or the issuance of shares of BancorpSouth common stock, you should carefully read this joint proxy statement/offering circular and give special consideration to the factors discussed in the section entitled “Risk Factors” beginning on page 32.
Litigation Relating to the Merger (page 111)
Beginning on May 28, 2021, three purported holders of Cadence common stock filed substantially similar complaints against Cadence and the members of the Cadence board of directors. Two complaints were filed in the United States District Court for the District of Delaware, while one complaint was filed in the United States District Court for the Southern District of New York. The complaints assert claims under Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9 promulgated thereunder against Cadence and the members of the Cadence board of directors alleging, among other things, that the preliminary proxy statement filed on May 27, 2021 with the SEC was materially incomplete and misleading in various respects. In addition, on June 9, 2021, a purported holder of BancorpSouth common stock filed a complaint against BancorpSouth and the members of the BancorpSouth board of directors in the United States District Court for the Eastern District of New York. The complaint asserts claims under Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9 promulgated thereunder against BancorpSouth and the members of the BancorpSouth board of directors alleging, among other things, that the preliminary proxy statement filed on May 27, 2021 with the SEC was materially incomplete and misleading in various respects. Among other remedies, the plaintiffs in each of the foregoing actions seek to enjoin the merger and, if the merger is completed, money damages.
If any case is not resolved, the lawsuit(s) could prevent or delay completion of the merger and result in costs to Cadence and BancorpSouth.
For more information, see the section entitled “The Merger—Litigation Relating to the Merger” beginning on page 111.
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SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF BANCORPSOUTH
The following table presents selected consolidated historical financial data of BancorpSouth. The selected consolidated historical financial data as of December 31, 2020 and 2019, and for the years ended December 31, 2020, 2019 and 2018, have been derived from BancorpSouth’s audited consolidated financial statements and accompanying notes contained in BancorpSouth’s Annual Report on Form 10-K for the year ended December 31, 2020, which is incorporated into this joint proxy statement/offering circular by reference. The selected consolidated historical financial data as of December 31, 2018, 2017 and 2016, and for the years ended December 31, 2017 and 2016, have been derived from BancorpSouth’s audited consolidated financial statements for such years and accompanying notes, which are not incorporated into this joint proxy statement/offering circular by reference. The selected consolidated historical financial data for BancorpSouth as of March 31, 2021 and for the three months ended March 31, 2021 and 2020 has been derived from BancorpSouth’s unaudited interim consolidated financial statements contained in its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, which is incorporated into this joint proxy statement/offering circular by reference. The selected consolidated balance sheet data for BancorpSouth as of March 31, 2020 has been derived from BancorpSouth’s unaudited interim consolidated balance sheet as of March 31, 2020, which is not incorporated into this joint proxy statement/offering circular by reference.
You should read the following financial information relating to BancorpSouth in conjunction with the historical audited consolidated financial statements of BancorpSouth and the related notes, including those contained in its Quarterly Report on Form 10-Q for the period ended March 31, 2021 and Annual Report on Form 10-K for the year ended December 31, 2020 and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for such Quarterly Report and Annual Report, and in any subsequently filed Quarterly Reports on Form 10-Q, each of which are incorporated by reference in this joint proxy statement/offering circular. See “Where You Can Find More Information” beginning on page 154.
BancorpSouth’s historical results for any prior period are not necessarily indicative of results to be expected in any future period. The selected financial information in the tables immediately below do not include, on any basis, the results or financial condition of Cadence for any period or as of any date.
 
At and for the
Three months ended
March 31,
At and for the Year Ended
December 31,
 
2021
2020
2020
2019
2018
2017
2016
 
(Dollars in thousands, except per share amounts)
Earnings Summary:
 
 
 
 
 
 
 
Interest revenue
$192,783
$202,064
$799,493
$775,012
$653,493
$512,991
$483,179
Interest expense
19,994
34,534
108,526
125,068
78,271
38,955
29,727
Net interest revenue
172,789
167,530
690,967
649,944
575,222
474,036
453,452
Provision for credit losses
46,000
86,000
1,500
4,500
3,000
4,000
Net interest revenue, after provision for credit losses
172,789
121,530
604,967
648,444
570,722
471,036
449,452
Noninterest revenue
87,936
76,496
336,504
280,681
282,037
268,033
274,901
Noninterest expense
155,823
168,006
653,926
629,607
587,634
507,446
527,909
Income before income taxes
104,902
30,020
287,545
299,518
265,125
231,623
196,444
Income tax expense
23,347
5,759
59,494
65,257
43,808
78,590
63,716
Net income
81,555
24,261
228,051
234,261
221,317
153,033
132,728
Less: Preferred dividends
2,372
2,372
9,488
Net income available to common shareholders
$79,183
$21,889
$218,563
$234,261
$221,317
$153,033
$132,728
 
 
 
 
 
 
 
 
Balance Sheet – Period and Year-End Balances:
 
 
 
 
 
 
 
Total assets
$25,802,497
$21,032,524
$24,081,194
$21,052,576
$18,001,540
$15,298,518
$14,724,388
Total securities
7,640,268
4,468,340
6,231,006
4,481,974
2,749,188
2,835,367
2,531,676
Loans and leases, net of unearned income
15,038,808
14,224,645
15,022,479
14,089,683
13,112,149
11,056,434
10,811,991
Total deposits
21,173,186
16,887,916
19,846,441
16,410,699
14,069,966
11,915,596
11,688,141
Long-term debt
4,295
4,721
4,402
5,053
6,213
30,000
530,000
Junior subordinated debt
297,425
296,723
297,250
296,547
12,888
Total shareholders’ equity
2,825,198
2,681,904
2,822,477
2,685,017
2,205,737
1,713,485
1,723,883
Common shareholders’ equity
2,658,205
2,514,911
2,655,484
2,517,996
2,205,737
1,713,485
1,723,883
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At and for the
Three months ended
March 31,
At and for the Year Ended
December 31,
 
2021
2020
2020
2019
2018
2017
2016
 
(Dollars in thousands, except per share amounts)
Balance Sheet - Average Balances:
 
 
 
 
 
 
 
Total assets
24,545,560
21,189,637
22,723,386
19,027,644
17,240,092
14,773,217
14,226,953
Total securities
6,606,027
4,461,298
5,010,378
2,934,654
2,867,439
2,454,545
2,193,937
Loans and leases, net of unearned income
15,029,076
14,226,788
14,984,356
13,606,951
12,481,534
10,932,505
10,557,103
Total deposits
20,472,080
16,905,229
18,559,655
15,319,130
13,641,476
11,871,281
11,520,186
Long-term debt
4,378
4,800
4,644
5,415
29,508
278,493
313,979
Junior subordinated debt
297,318
296,617
296,882
34,162
282
22,691
Total shareholders’ equity
2,813,001
2,658,699
2,725,545
2,366,745
2,086,922
1,702,176
1,701,052
Common shareholders’ equity
2,646,008
2,491,678
2,558,545
2,347,913
2,086,922
1,702,176
1,701,052
 
 
 
 
 
 
 
 
Common Share Data:
 
 
 
 
 
 
 
Basic earnings per share
$0.77
$0.21
$2.12
$2.31
$2.24
$1.67
$1.41
Diluted earnings per share
0.77
0.21
2.12
2.30
2.23
1.67
1.41
Cash dividends per share
0.19
0.185
0.745
0.710
0.620
0.530
0.450
Book value per share
25.90
24.50
25.89
24.09
22.10
18.97
18.40
Tangible book value per share(1)
17.08
15.66
17.04
15.62
14.62
15.44
14.95
Dividend payout ratio
24.62%
88.20%
35.12%
30.76%
27.72%
31.71%
31.94%
 
 
 
 
 
 
 
 
Financial Ratios (Annualized):
 
 
 
 
 
 
 
Return on average assets
1.35%
0.46%
1.00%
1.23%
1.28%
1.04%
0.93%
Return on average shareholders’ equity
11.76%
3.67%
8.37%
9.90%
10.60%
8.99%
7.80%
Total shareholders’ equity to total assets
10.95%
12.75%
11.72%
12.75%
12.25%
11.20%
11.71%
Total common shareholders’ equity to total assets
10.30%
11.96%
11.03%
11.96%
12.25%
11.20%
11.71%
Tangible shareholders’ equity to tangible assets (1)
7.71%
8.82%
8.26%
8.92%
8.46%
9.31%
9.73%
Tangible common shareholders’ equity to tangible assets (1)
7.04%
7.99%
7.54%
8.09%
8.46%
9.31%
9.73%
Net interest margin-fully taxable equivalent
3.15%
3.54%
3.36%
3.84%
3.72%
3.54%
3.52%
 
 
 
 
 
 
 
 
Credit Quality Ratios (Annualized):
 
 
 
 
 
 
 
Net charge-offs (recoveries) to average loans and leases
0.09%
0.39%
0.18%
0.02%
0.02%
0.08%
0.06%
Provision for credit losses to average loans and leases
—%
1.30%
0.57%
0.01%
0.04%
0.03%
0.04%
Allowance for credit losses to net loans and leases
1.60%
1.53%
1.63%
0.85%
0.92%
1.07%
1.14%
Allowance for credit losses to NPLs
237.97%
169.63%
201.71%
106.78%
124.11%
150.66%
121.50%
Allowance for credit losses to NPAs
217.87%
158.31%
184.37%
100.68%
113.25%
139.89%
112.84%
NPLs to net loans and leases
0.67%
0.90%
0.81%
0.79%
0.74%
0.71%
0.94%
NPAs to total assets
0.43%
0.66%
0.55%
0.56%
0.59%
0.55%
0.74%
 
 
 
 
 
 
 
 
Capital Adequacy:
 
 
 
 
 
 
 
Common Equity Tier 1 capital
10.97%
10.11%
10.74%
10.57%
10.84%
12.15%
12.23%
Tier 1 capital
11.95%
11.13%
11.74%
11.60%
10.84%
12.15%
12.34%
Total capital
14.65%
13.75%
14.48%
14.17%
11.68%
13.13%
13.38%
Tier 1 leverage capital
8.59%
8.90%
8.67%
9.69%
9.06%
10.12%
10.32%
(1)
Non-GAAP financial measures. See “—Non-GAAP Financial Measures and Reconciliations.”
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Non-GAAP Financial Measures and Reconciliations
In addition to financial ratios based on measures defined by U.S. GAAP, BancorpSouth utilizes tangible shareholders’ equity, tangible shareholders’ common equity, tangible assets, tangible shareholders’ equity to tangible assets, tangible common shareholders’ equity to tangible assets and tangible book value per share measures when evaluating the performance of BancorpSouth. Tangible shareholders’ equity is defined by BancorpSouth as total shareholders’ equity less goodwill and identifiable intangible assets. Tangible common shareholders’ equity to tangible assets is defined by BancorpSouth as total shareholders’ equity less preferred stock, goodwill and identifiable intangible assets, divided by total assets less goodwill and identifiable intangible assets. Tangible assets are defined by BancorpSouth as total assets less goodwill and identifiable intangible assets. Management believes the ratio of tangible shareholders’ equity to tangible assets and tangible common shareholders’ equity to tangible assets to be important to investors who are interested in evaluating the adequacy of BancorpSouth’s capital levels. Tangible book value per share is defined by BancorpSouth as tangible shareholders’ equity divided by total common shares outstanding. Management believes that tangible book value per share is important to investors who are interested in changes from period to period in book value per share exclusive of changes in intangible assets. The following table reconciles tangible shareholders’ equity, tangible assets and tangible book value per share as presented above to U.S. GAAP financial measures as reflected in BancorpSouth’s unaudited consolidated financial statements:
 
Three months ended
March 31,
Year ended
December 31,
 
2021
2020
2020
2019
2018
2017
2016
 
(Dollars in thousands, except per share amounts)
Tangible Assets:
 
 
 
 
 
 
 
Total assets
$25,802,497
$21,032,524
$24,081,194
$21,052,576
$18,001,540
$15,298,518
$14,724,388
Less: Goodwill
851,612
848,242
851,612
825,679
695,720
300,798
300,798
Other identifiable intangible assets
53,581
59,345
55,899
60,008
50,896
17,882
21,894
Total tangible assets
$24,897,304
$20,124,937
$23,173,683
$20,166,889
$17,254,924
$14,979,838
$14,401,696
Tangible Shareholders’ Equity:
 
 
 
 
 
 
 
Total shareholders’ equity
$2,825,198
$2,681,904
$2,822,477
$2,685,017
$2,205,737
$1,713,485
$1,723,883
Less: Goodwill
851,612
848,242
851,612
825,679
695,720
300,798
300,798
Other identifiable intangible assets
53,581
59,345
55,899
60,008
50,896
17,882
21,894
Total tangible shareholders’ equity
$1,920,005
$1,774,317
$1,914,966
$1,799,330
$1,459,121
$1,394,805
$1,401,191
Less: Preferred stock
166,993
166,993
166,993
167,021
Total tangible common shareholders’ equity
$1,753,012
$1,607,324
$1,747,973
$1,632,309
$1,459,121
$1,394,805
$1,401,191
Total common shares outstanding
102,624,818
102,632,484
102,561,480
104,522,804
99,797,271
90,312,378
93,696,687
Tangible shareholders’ equity to tangible assets
7.71%
8.82%
8.26%
8.92%
8.46%
9.31%
9.73%
Tangible common shareholders’ equity to tangible assets
7.04%
7.99%
7.54%
8.09%
8.46%
9.31%
9.73%
Tangible book value per common share
$17.08
$15.66
$17.04
$15.62
$14.62
$15.44
$14.95
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SELECTED UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA
The following table shows selected unaudited pro forma combined condensed financial information about the financial condition and results of operations of the combined company after giving effect to the merger, for the year ended December 31, 2020 and as of and for the three months ended March 31, 2021.
The selected unaudited pro forma combined condensed financial information has been prepared using the acquisition method of accounting, adjusted from BancorpSouth’s unaudited interim consolidated financial statements as of and for the period ended March 31, 2021 and BancorpSouth’s audited consolidated financial statements for the year ended December 31, 2020 to give effect to the merger and the estimated purchase accounting adjustments resulting from the merger. The unaudited pro forma combined condensed consolidated balance sheet information as of March 31, 2021 in the tables below are presented as if the merger occurred on March 31, 2021, and the unaudited pro forma combined condensed consolidated statements of income information for the three months ended March 31, 2021 and the year ended December 31, 2020 is presented as if the merger occurred on January 1, 2020.
The selected unaudited pro forma combined condensed financial information is presented for illustrative purposes only and does not necessarily indicate the financial condition and results of operations of the combined company had BancorpSouth and Cadence actually been combined as of the dates indicated and at the beginning of the periods presented, nor does it necessarily indicate the results of operations in future periods or the future financial position of the combined company, which could differ materially from those shown in this information. The selected unaudited pro forma combined condensed financial information does not reflect the benefits of expected synergies, cost savings or other factors that may result as a consequence of the merger. Future results may differ materially from the results reflected because of various factors, including those discussed in the section entitled “Risk Factors” beginning on page 32 and appearing under the caption “Risk Factors” in BancorpSouth’s and Cadence’s Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K most recently filed with the FDIC and SEC, respectively, and in any subsequently filed Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, which are incorporated by reference in this joint proxy statement/offering circular, and the factors discussed in the section entitled “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 30.
The selected unaudited pro forma combined condensed financial information has been derived from, and should be read in conjunction with, the unaudited pro forma combined condensed financial information, including the notes thereto, which is included in this joint proxy statement/offering circular in the section entitled “Unaudited Pro Forma Combined Condensed Consolidated Financial Statements” on page 132.
 
For the three
months ended
March 31, 2021
For the year ended
December 31,
2020(1)
 
(In thousands)
Unaudited Pro Forma Condensed Consolidated Income Statement Information:
 
 
Net interest income
$314,067
$1,298,915
Provision (release) for credit losses
(48,262)
540,248
Income (loss) before income taxes
242,121
(82,949)
Net income (loss)
188,238
(126,446)
(1)
Cadence historical includes accelerated hedge revenue of $169.2 million in noninterest income, $129.5 million after tax that was recognized in the fourth quarter of 2020 and a non-cash goodwill impairment charge of $443.7 million in noninterest expense, $412.9 million after-tax that was recognized in the first quarter of 2020.
 
As of
March 31,
2021
 
(In thousands)
Unaudited Pro Forma Condensed Consolidated Balance Sheet Information:
 
Net loans
$26,652,310
Total assets
44,934,140
Deposits
37,306,351
Shareholders’ equity
5,159,755
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COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA
Presented below are BancorpSouth’s historical per share data for the year ended December 31, 2020, as derived from the audited consolidated financial statements of BancorpSouth, and the three months ended March 31, 2021, as derived from the unaudited consolidated financial statements of BancorpSouth. Also presented below are Cadence’s historical per share data for the year ended December 31, 2020, as derived from the audited consolidated financial statements of Cadence, and the three months ended March 31, 2021, as derived from the unaudited consolidated financial statements of Cadence. The pro forma combined per share data for the year ended December 31, 2020 and three months ended March 31, 2021 and the per equivalent Cadence share information provided in the table below is unaudited. The unaudited pro forma data and equivalent per share information give effect to the merger as if the transaction had been effective on the dates presented, in the case of the book value data, and as if the transactions had become effective on January 1, 2020, in the case of the earnings per share and dividends declared data.
The unaudited pro forma combined per share data has been derived using the acquisition method of accounting. Accordingly, the pro forma adjustments reflect the assets and liabilities of Cadence at their preliminary estimated fair values. Differences between these preliminary estimates and the final values in acquisition accounting will occur and these differences could have a material impact on the unaudited pro forma combined per share information set forth below. This information should be read together with the information included in the section entitled “Selected Consolidated Historical Financial Data of BancorpSouth” on page 25, historical consolidated financial statements and related notes of BancorpSouth and Cadence filed by each with the FDIC and SEC, respectively, and incorporated by reference in this joint proxy statement/offering circular, and with the unaudited pro forma combined condensed consolidated financial statements included in the section entitled “Unaudited Pro Forma Combined Condensed Consolidated Financial Statements” on page 132.
The unaudited pro forma financial information is presented for illustrative purposes only and does not necessarily indicate the financial results of the combined company had the companies been combined at the beginning of the period presented. The unaudited pro forma financial information also does not consider any potential impacts of current market conditions on revenues, potential revenue enhancements, anticipated cost savings and expense efficiencies, or asset dispositions, among other factors.
 
BancorpSouth
Historical
Cadence
Historical
Pro Forma
Combined
Per Equivalent
Cadence Share(3)
For the three months ended March 31, 2021:
 
 
 
 
Earnings per share of common stock (Basic)(1)
$0.77
$0.85
$0.98
$0.68
Earnings per share of common stock (Diluted)(1)
0.77
0.84
0.98
0.68
Dividends declared per share(2)
0.19
0.15
0.19
0.13
Book value per share of common stock
25.90
16.78
26.29
19.26
 
 
 
 
 
For the year ended December 31, 2020:
 
 
 
 
Earnings (loss) per share of common stock (Basic)(1)
$2.12
$(1.63)
$(0.71)
$(0.49)
Earnings (loss) per share of common stock (Diluted)(1)
2.12
(1.63)
(0.71)
(0.49)
Dividends declared per share(2)
0.745
0.35
0.745
0.52
Book value per share of common stock
25.89
16.84
 
 
(1)
Reflects pro forma adjustments to the weighted-average shares of BancorpSouth common stock outstanding to eliminate weighted-average shares of Cadence common stock outstanding and record shares of BancorpSouth common stock issued in the merger, calculated using the exchange ratio of 0.70 shares of BancorpSouth common stock per each share of Cadence common stock. See the section entitled “Unaudited Pro Forma Combined Condensed Consolidated Financial Statements” on page 132.
(2)
Pro forma combined cash dividends declared are based upon BancorpSouth’s historical amounts.
(3)
Pro forma per equivalent Cadence share information is calculated based on pro forma combined multiplied by the 0.70 exchange ratio.
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained or incorporated by reference into this joint proxy statement/offering circular may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934.
Words such as “anticipate,” “believe,” “could,” “continue,” “seek,” “intend,” “estimate,” “expect,” “foresee,” “hope,” “intend,” “may,” “might,” “plan,” “positions,” “potential,” “predict,” “project,” “prospects,” “goal,” “objective,” “outlook,” “potential,” “should,” “target,” “will,” “will result,” “will likely result,” or “would” or future or conditional verb tenses and variations or negatives of such terms used in connection with any discussions regarding timing of completion of the merger, expected benefits of the merger and the future operating or financial performance of BancorpSouth, Cadence or the combined company identify forward-looking statements. All forward-looking statements are management’s present expectations or forecasts of future events and are subject to a number of factors and uncertainties, many of which, by their nature, are inherently uncertain and beyond BancorpSouth’s and Cadence’s control, and could cause actual results to differ materially from those described in the forward-looking statements. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. In addition to the factors relating to the merger discussed under the caption “Risk Factors” beginning on page 32 and the factors previously disclosed in BancorpSouth’s and Cadence’s reports filed with the FDIC and the SEC, respectively, the following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements:
the occurrence of any event, change or other circumstance that could give rise to the right of one or both of the parties to terminate the merger agreement;
the outcome of pending or threatened litigation, or of matters before regulatory agencies, whether currently existing or commencing in the future, including litigation related to the merger;
delays in completing the transaction;
the failure to obtain necessary regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction) and shareholder approvals or to satisfy any of the other conditions to the completion of the merger on a timely basis or at all;
the possibility that the anticipated benefits of the transaction are not 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 BancorpSouth and Cadence do business;
the possibility that the parties may be unable to achieve expected synergies and operating efficiencies in the merger within the expected time frames or at all and to successfully integrate BancorpSouth’s and Cadence’s operations, or such integration may be more difficult, time consuming or costly than expected;
certain restrictions during the pendency of the merger 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;
the impact of purchase accounting with respect to the merger, or any change in the assumptions used regarding the assets purchased and liabilities assumed to determine their fair value;
diversion of management’s attention from ongoing business operations and opportunities;
ability of management to execute their respective business plans and strategies and manage the risks involved with consummating the transaction;
potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction;
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the ability to complete the transaction and integration of BancorpSouth and Cadence successfully, which may take longer than anticipated or be more costly than anticipated or have unanticipated adverse results relating to BancorpSouth’s or Cadence’s existing businesses;
the challenges of integrating, retaining and hiring key personnel;
failure to attract new customers and retain existing customers in the manner anticipated;
the effect of divestitures that may be required by regulatory authorities in certain markets in which BancorpSouth and Cadence compete;
any interruption or breach of security as a result of systems integration resulting in failures or disruptions in customer account management, general ledger, deposit, loan or other systems;
changes in BancorpSouth’s stock price before closing, including as a result of the financial performance of Cadence prior to closing;
the dilution caused by BancorpSouth’s issuance of additional shares of its capital stock in connection with the transaction;
operational issues stemming from, and/or capital spending necessitated by, the potential need to adapt to industry changes in information technology systems, on which BancorpSouth and Cadence are highly dependent;
changes in legislation, regulation, policies or administrative practices, whether by judicial, governmental or legislative action and other changes pertaining to banking, securities, taxation and financial accounting and reporting, environmental protection and insurance, and the ability to comply with such changes in a timely manner;
changes in the monetary and fiscal policies of the U.S. government, including policies of the U.S. Department of the Treasury and the Federal Reserve Board;
changes in interest rates, which may affect BancorpSouth’s or Cadence’s net income and other future cash flows, or the market value of BancorpSouth’s or Cadence’s assets, including its investment securities;
changes in accounting principles, policies, practices or guidelines;
changes in BancorpSouth’s credit ratings or in BancorpSouth’s or Cadence’s ability to access the capital markets;
market, operational, liquidity, credit, strategic and general risks associated with BancorpSouth’s or Cadence’s business;
natural disasters, war or terrorist activities, or pandemics, or the outbreak of COVID-19 or similar outbreaks, and their effects on economic and business environments in which BancorpSouth and Cadence operate; and
other economic, competitive, governmental, regulatory, technological and geopolitical factors affecting BancorpSouth’s or Cadence’s operations, pricing and services.
For any forward-looking statements made in this joint proxy statement/offering circular or in any documents incorporated by reference into this joint proxy statement/offering circular, BancorpSouth and Cadence claim the protection of the safe harbor for forward-looking statements under the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this joint proxy statement/offering circular or the dates of the documents incorporated by reference in this joint proxy statement/offering circular. Except as required by applicable law, neither BancorpSouth nor Cadence undertakes to update these forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements are made.
For additional information about factors that could cause actual results to differ materially from those described in the forward-looking statements, please see the reports that BancorpSouth and Cadence have filed with the FDIC and the SEC as described under “Where You Can Find More Information” beginning on page 154.
We expressly qualify in their entirety all forward-looking statements attributable to either of us or any person acting on our behalf by the cautionary statements contained or referred to in this joint proxy statement/offering circular.
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RISK FACTORS
In addition to the other information contained in or incorporated by reference into this joint proxy statement/offering circular, including the matters addressed under the caption “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 30, you should carefully consider the following risk factors in deciding whether to vote for the approval of the merger agreement.
Risks Relating to the Consummation of the Merger and the Combined Company Following the Merger
The ongoing social, political, and economic impact of the COVID-19 pandemic poses risks to BancorpSouth, Cadence and the combined company and may adversely affect the value of the merger consideration.
The economy, companies and individuals generally, including the customers of BancorpSouth and Cadence, have experienced and may continue to experience impacts from the COVID-19 pandemic and the range of related private and government actions and reactions to the pandemic. Among other things, the financial results of either company or both companies or the combined company may be impacted due to an inability of customers to meet their loan commitments in a timely manner because of their losses associated with impacts of the pandemic, including a decrease in revenues for certain businesses in areas that have been more adversely impacted by the pandemic or other changes in consumer behavior. In addition, downturns in the global market related to pandemic fears could result in a further lowering of interest rates as a stimulus to boost consumer spending, which could further negatively impact BancorpSouth’s, Cadence’s, both companies’ or the combined company’s results of operations. These factors, together or in combination with other events or occurrences not yet known or anticipated, could adversely affect the value of the merger consideration or could delay or prevent the consummation of the merger.
Because the market price of BancorpSouth common stock may fluctuate, holders of Cadence common stock cannot be certain of the market value of the merger consideration they will receive.
In the merger, each share of Cadence common stock issued and outstanding immediately prior to the effective time of the merger (other than certain shares held by BancorpSouth or Cadence) will be converted into 0.70 shares of BancorpSouth common stock. This exchange ratio is fixed and will not be adjusted for changes in the market price of either BancorpSouth common stock or Cadence common stock. Changes in the price of BancorpSouth common stock between now and the time of the merger will affect the value that holders of Cadence common stock will receive in the merger. Neither BancorpSouth nor Cadence is permitted to terminate the merger agreement as a result of any increase or decrease in the market price of BancorpSouth common stock or Cadence common stock.
Stock price changes may result from a variety of factors, including general market and economic conditions, changes in Cadence’s and BancorpSouth’s businesses, operations and prospects and regulatory considerations, many of which factors are beyond Cadence’s or BancorpSouth’s control. Therefore, at the time of the BancorpSouth special meeting and the Cadence special meeting, holders of BancorpSouth common stock and holders of Cadence common stock will not know the market value of the consideration that Cadence shareholders will receive at the effective time of the merger. You should obtain current market quotations for shares of BancorpSouth common stock and for shares of Cadence common stock.
The market price of the combined company’s common stock after the merger may be affected by factors different from those affecting the shares of Cadence common stock or BancorpSouth common stock currently.
As a result of the merger, holders of Cadence common stock will become holders of BancorpSouth common stock. BancorpSouth’s business differs from that of Cadence. Accordingly, the results of operations and financial condition of the combined company and the market price of the combined company’s common stock after the completion of the merger may be affected by factors different from those currently affecting the independent results of operations and financial condition of each of BancorpSouth and Cadence. For a discussion of the businesses of BancorpSouth and Cadence and of certain factors to consider in connection with those businesses, see the documents incorporated by reference in this joint proxy statement/offering circular and referred to under “Where You Can Find More Information” beginning on page 154.
The opinions delivered by KBW, Goldman Sachs and J.P. Morgan, respectively, to BancorpSouth’s and Cadence’s respective boards of directors prior to the entry into the merger agreement will not reflect changes in circumstances that may have occurred since the dates of the opinions.
The opinions received by the respective boards of directors of BancorpSouth and Cadence from KBW, which is BancorpSouth’s financial advisor, or from Goldman Sachs or J.P. Morgan, each of which is Cadence’s financial advisor, were delivered on April 9, 2021 and confirmed with written opinions dated April 9, 2021, in the case of
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KBW, and dated April 12, 2021, in the case of Goldman Sachs and J.P. Morgan. Changes in the operations and prospects of BancorpSouth or Cadence, general market and economic conditions and other factors which may be beyond the control of BancorpSouth and Cadence may have altered the value of BancorpSouth or Cadence or the prices of shares of BancorpSouth common stock and shares of Cadence common stock as of the date of this joint proxy statement/offering circular, or may alter such values and prices by the time the merger is completed. The opinions do not speak as of the date of this joint proxy statement/offering circular or as of any date other than the dates of those opinions.
Combining BancorpSouth and Cadence may be more difficult, costly or time-consuming than expected and the combined company may fail to realize the anticipated benefits of the merger.
The success of the merger will depend, in part, on the ability to realize the anticipated synergies, operating efficiencies and cost savings from combining the business operations of BancorpSouth and Cadence. To realize the anticipated benefits and cost savings from the merger, BancorpSouth and Cadence must integrate and combine their businesses in a manner that permits those benefits and cost savings to be realized, without adversely affecting current revenues and future growth. If BancorpSouth and Cadence are not able to successfully achieve these objectives, the anticipated benefits of the merger may not be realized fully or at all or may take longer to realize than expected. In addition, the actual cost savings of the merger could be less than anticipated, the costs associated with effecting the merger may be more than anticipated and integration may result in additional and unforeseen expenses. For more information, see the section entitled “Unaudited Pro Forma Combined Condensed Consolidated Financial Statements” beginning on page 132.
An inability to realize the full extent of the anticipated benefits of the merger and the other transactions contemplated by the merger agreement and the bank merger agreement, as well as any delays encountered in the integration process, could have an adverse effect upon the revenues, levels of expenses and operating results and financial condition of the combined company, which may adversely affect the value of the common stock of the combined company after the completion of the merger.
BancorpSouth and Cadence have operated and, until the completion of the merger, must continue to operate, independently. It is possible that the integration process could result in the loss of key personnel, the disruption of each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect the companies’ ability to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits and cost savings of the merger. Integration efforts between the two companies may also divert management attention and resources. These integration matters could have an adverse effect on each of BancorpSouth and Cadence during this transition period and on the combined company for an undetermined period after completion of the merger. Other factors such as the strength of the economy and competitive factors in the areas where BancorpSouth and Cadence do business may also affect the ability of the combined company to realize the anticipated benefits of the merger.
Furthermore, the board of directors and executive leadership of the combined company will consist of former directors and executive officers from each of BancorpSouth and Cadence. Combining the boards of directors and management teams of each company into a single board and a single management team could require the reconciliation of differing priorities and philosophies.
The future results of the combined company following the merger may suffer if the combined company does not effectively manage its expanded operations.
Following the merger, the size of the business of the combined company will increase significantly beyond the current size of either BancorpSouth’s and Cadence’s respective businesses. The combined company’s future success will depend, in part, upon its ability to manage this expanded business, which may pose challenges for management, including challenges related to the management and monitoring of new operations and associated increased costs and complexity. The combined company may also face increased scrutiny from governmental authorities as a result of the significant increase in the size of its business. There can be no assurances that the combined company will be successful or that it will realize the expected operating efficiencies, cost savings, revenue enhancements or other benefits currently anticipated from the merger.
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The combined company may be unable to retain BancorpSouth and/or Cadence personnel successfully after the merger is completed.
The success of the merger will depend in part on the combined company’s ability to retain the talents and dedication of key personnel currently employed by BancorpSouth and Cadence. It is possible that these personnel may decide not to remain with BancorpSouth or Cadence, as applicable, while the merger is pending or with the combined company after the merger is consummated. If BancorpSouth, Cadence or the combined company are unable to retain key employees, including management, who are critical to the successful integration and future operations of the companies, the combined company could face disruptions in its operations, loss of existing customers, loss of key information, expertise or know-how and unanticipated additional recruitment costs. In addition, if key personnel terminate their employment, the combined company’s business activities may be adversely affected and management’s attention may be diverted from successfully integrating BancorpSouth and Cadence to hiring suitable replacements, all of which may cause the combined company’s business to suffer. In addition, BancorpSouth, Cadence or the combined company may not be able to locate or retain suitable replacements for any key employees who leave. For more information, see sections entitled “The Merger—Governance of the Combined Company After the Merger—Chairman; Executive Vice Chairman; Independent Lead Director; Chief Executive Officer” and “The Merger—Governance of the Combined Company After the Merger—Management Team” beginning on pages 107 and 108, respectively.
Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated or that could have an adverse effect on the combined company following the merger.
Before the merger and the bank merger may be completed, various approvals, consents, waivers and/or non-objections must be obtained from the FDIC, the Federal Reserve Board and the Mississippi Banking Department and various other regulatory authorities in the United States. In determining whether to grant these approvals or waivers, such regulatory authorities consider a variety of factors, including the regulatory standing of each company and the factors described under “The Merger—Regulatory Approvals” beginning on page 109. These approvals and waivers could be delayed or not obtained at all, including due to: an adverse development in either company’s regulatory standing or in any other factors considered by regulators when granting such approvals; governmental, political or community group inquiries, investigations or opposition; or changes in legislation or the political environment generally.
The approvals and waivers that are granted may impose terms and conditions, limitations, obligations or costs, or place restrictions on the conduct of the combined company’s business or require changes to the terms of the transactions contemplated by the merger agreement and the bank merger agreement. There can be no assurance that regulators will not impose any such conditions, limitations, obligations or restrictions and that such conditions, limitations, obligations or restrictions will not have the effect of delaying the completion of any of the transactions contemplated by the merger agreement and the bank merger agreement, imposing additional material costs on or materially limiting the revenues of the combined company following the merger or otherwise reduce the anticipated benefits of the merger if the merger were consummated successfully within the expected timeframe. In addition, there can be no assurance that any such conditions, terms, obligations or restrictions will not result in the delay or abandonment of the merger. Additionally, the completion of the merger is conditioned on the absence of certain orders, injunctions or decrees by any court or regulatory agency of competent jurisdiction that would prohibit or make illegal the completion of any of the transactions contemplated by the merger agreement and the bank merger agreement.
In addition, despite the companies’ commitments to use their reasonable best efforts to comply with conditions imposed by regulators, under the terms of the merger agreement, neither BancorpSouth nor Cadence will be required, and neither company will be permitted without the prior written consent of the other company, to take actions or agree to conditions that would reasonably be expected to have a material adverse effect on the combined company and its subsidiaries, taken as a whole, after giving effect to the merger. See section entitled “The Merger—Regulatory Approvals” beginning on page 109.
The unaudited pro forma combined condensed financial information included in this joint proxy statement/offering circular is preliminary and the actual purchase price as well as the actual financial condition and results of operations of the combined company after the merger may differ materially.
The unaudited pro forma combined condensed financial information in this joint proxy statement/offering circular is presented for illustrative purposes only and is not necessarily indicative of what the combined company’s actual financial condition or results of operations would have been had the merger been completed on the dates indicated.
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The unaudited pro forma combined condensed financial information reflects adjustments, which are based upon preliminary estimates, to record the Cadence identifiable assets acquired and liabilities assumed at fair value and the resulting goodwill recognized. The purchase price allocation reflected in this document is preliminary, and final allocation of the purchase price will be based upon the actual purchase price and the fair value of the assets and liabilities of Cadence as of the date of the completion of the merger. Financial markets generally, and the market prices of stock of BancorpSouth and Cadence, are experiencing higher than normal volatility and, therefore, the actual purchase price may vary significantly from the purchase price used in preparing the unaudited pro forma combined consolidated financial information in this document. Accordingly, the final acquisition accounting adjustments may differ materially from the pro forma adjustments reflected in this document. For more information, see section entitled “Unaudited Pro Forma Combined Condensed Consolidated Financial Statements” beginning on page 132.
Certain of BancorpSouth’s and Cadence’s directors and executive officers may have interests in the merger that may differ from the interests of holders of BancorpSouth common stock and holders of Cadence common stock.
Holders of BancorpSouth common stock and holders of Cadence common stock should be aware that some of BancorpSouth’s and Cadence’s directors and executive officers may have interests in the merger and have arrangements that are different from, or in addition to, those of holders of BancorpSouth common stock and holders of Cadence common stock generally. The BancorpSouth and Cadence boards of directors were each aware of these respective interests and considered these interests, among other matters, when making their decisions to approve the merger agreement and the bank merger agreement, and in recommending that holders of common stock vote to approve the merger agreement. For a more complete description of these interests, please see sections entitled “The Merger—Interests of Certain BancorpSouth Directors and Executive Officers in the Merger” beginning on page 95 and “The Merger—Interests of Certain Cadence Directors and Executive Officers in the Merger” beginning on page 98.
The merger agreement may be terminated in accordance with its terms and the merger may not be completed.
The merger agreement is subject to a number of conditions that must be fulfilled in order to complete the merger. Those conditions include: (i) the approval of the BancorpSouth merger proposal by the requisite vote of the BancorpSouth shareholders; (ii) the approval of the Cadence merger proposal by the requisite vote of the Cadence shareholders; (iii) authorization for listing on the NYSE of the shares of BancorpSouth common stock to be issued in the merger, subject to official notice of issuance; (iv) the receipt of all required regulatory authorizations, consents, waivers, orders or approvals that are necessary to close the merger and the bank merger being in full force and effect and the expiration or termination of all statutory waiting periods without the imposition of any materially burdensome regulatory condition; (v) the absence of any order, injunction, decree or other legal restraint preventing the completion of the merger or any of the other transactions contemplated by the merger agreement or making the completion of the merger illegal; (vi) subject to certain exceptions, the accuracy of the representations and warranties of each company, generally subject to a material adverse effect qualification; (vii) the prior performance in all material respects by each company of the obligations required to be performed by it at or prior to the closing date; and (viii) receipt by each company of an opinion from its counsel to the effect that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code.
These conditions to the closing may not be fulfilled in a timely manner or at all, and, accordingly, the merger may not be completed. In addition, the companies can mutually decide to terminate the merger agreement at any time, before or after shareholder approval, or BancorpSouth or Cadence may elect to terminate the merger agreement in certain other circumstances. See section entitled “The Merger Agreement—Termination of the Merger Agreement” beginning on page 125.
Failure to complete the merger could negatively impact BancorpSouth or Cadence.
If the merger is not completed for any reason, including as a result of either BancorpSouth shareholders failing to approve the BancorpSouth merger proposal or Cadence shareholders failing to approve the Cadence merger proposal, there may be various adverse consequences, and BancorpSouth and/or Cadence may experience negative reactions from the financial markets and from their respective customers and personnel. For example, BancorpSouth’s or Cadence’s businesses may have been impacted adversely by the failure to pursue other beneficial opportunities due to the focus of management on the merger, without realizing any of the anticipated benefits of completing the merger. Additionally, if the merger agreement is terminated, the market price of BancorpSouth common stock or Cadence
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common stock could decline to the extent that current market prices reflect a market assumption that the merger will be beneficial and will be completed. BancorpSouth and/or Cadence also could be subject to litigation related to any failure to complete the merger or to proceedings commenced against BancorpSouth or Cadence to perform their respective obligations under the merger agreement. If the merger agreement is terminated under certain circumstances, either BancorpSouth or Cadence may be required to pay a termination fee of $118 million to the other party.
Additionally, each of BancorpSouth and Cadence has incurred and will incur substantial expenses in connection with the negotiation and completion of the transactions contemplated by the merger agreement, as well as the costs and expenses of preparing, filing, printing and mailing this joint proxy statement/offering circular, and all filing and other fees paid in connection with the merger. If the merger is not completed, BancorpSouth and Cadence would have to pay these expenses without realizing the expected benefits of the merger.
BancorpSouth and Cadence will be subject to business uncertainties and contractual restrictions while the merger is pending.
Uncertainty about the effect of the merger on customers and personnel may have an adverse effect on BancorpSouth or Cadence. These uncertainties may impair BancorpSouth’s or Cadence’s ability to attract, retain and motivate key personnel until the merger is completed, and could cause customers and others that deal with BancorpSouth or Cadence to seek to change existing business relationships with BancorpSouth or Cadence. The outcome of legal proceedings that may be instituted against BancorpSouth or Cadence in connection with the merger may also have an adverse effect on BancorpSouth, Cadence or the combined company. In addition, subject to certain exceptions, BancorpSouth and Cadence have agreed to operate their respective businesses in the ordinary course prior to the closing, and each company is restricted from making certain acquisitions and taking other specified actions without the consent of the other party until the merger is completed. These restrictions may prevent BancorpSouth and/or Cadence from pursuing attractive business opportunities or strategic transactions that may arise prior to the completion of the merger. See section entitled “The Merger Agreement—Covenants and Agreements” beginning on page 117 for a description of the restrictive covenants applicable to BancorpSouth and Cadence.
The merger agreement contains provisions that could discourage a potential acquirer that might be willing to pay more to acquire or merge with either BancorpSouth or Cadence.
The merger agreement contains provisions that restrict each of BancorpSouth’s and Cadence’s ability to, among other things, initiate, solicit, knowingly encourage or knowingly facilitate, inquiries or proposals with respect to, or, subject to certain exceptions generally related to the exercise of fiduciary duties by each respective board of directors, engage in any negotiations concerning, or provide any confidential or nonpublic information or data relating to, any alternative acquisition proposals. These provisions, which include a $118 million termination fee payable under certain circumstances, might discourage a potential acquirer that might have an interest in acquiring all or a significant part of BancorpSouth or Cadence from considering or proposing that acquisition even if, in the case of a potential acquisition of Cadence, it were prepared to pay consideration with a higher per share price to Cadence shareholders than what is contemplated in the merger, or might result in a potential acquirer’s proposing to pay a lower per share price to acquire BancorpSouth or Cadence than it might otherwise have proposed to pay. For more information, see sections entitled “The Merger Agreement—Agreement Not to Solicit Other Offers; Termination of the Merger Agreement; Effect of Termination; Termination Fee” and “The Merger Agreement—Shareholder Meetings and Recommendation of BancorpSouth’s and Cadence’s Boards of Directors” beginning on pages 123 and 122, respectively.
The shares of BancorpSouth common stock to be received by holders of Cadence common stock as a result of the merger will have different rights from the shares of Cadence common stock.
In the merger, holders of Cadence common stock will become holders of BancorpSouth common stock and their rights as shareholders will be governed by Mississippi law and the governing documents of the combined company. The rights associated with BancorpSouth common stock are different from the rights associated with Cadence common stock. See section entitled “Comparison of Shareholders’ Rights” beginning on page 139 for a discussion of the different rights associated with BancorpSouth common stock.
BancorpSouth and Cadence will incur transaction and integration costs in connection with the merger.
BancorpSouth and Cadence have incurred and expect to incur significant, non-recurring costs in connection with negotiating the merger agreement and the bank merger agreement and closing the merger. These costs include legal, financial advisory, accounting, consulting and other advisory fees, severance/employee benefit-related costs,
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regulatory fees, financial printing and other printing costs and other related costs. BancorpSouth and Cadence may also incur additional costs to maintain employee morale and to retain key employees. Some of these costs are payable by BancorpSouth, Cadence or both companies regardless of whether the merger is completed. See section entitled “The Merger Agreement—Expenses and Fees” beginning on page 126.
In addition, the combined company is expected to incur substantial costs in connection with the related integration. There are a large number of processes, policies, procedures, operations, technologies and systems that may need to be integrated, including purchasing, accounting and finance, payroll, compliance, treasury management, branch operations, vendor management, risk management, lines of business, pricing and benefits. Although BancorpSouth and Cadence have assumed that a certain level of costs will be incurred, there are many factors beyond their control that could affect the total amount or the timing of the integration costs. There can be no assurances that the expected benefits and efficiencies related to the integration of the businesses will be realized to offset these transaction and integration costs over time. Moreover, many of the costs that will be incurred are, by their nature, difficult to estimate accurately. Furthermore, there can be no assurances that the expected benefits and efficiencies related to the integration of the businesses will be realized to offset these transaction and integration costs over time. These integration costs may result in the combined company taking charges against earnings following the completion of the merger, and the amount and timing of such charges are uncertain at present. For more information, see section entitled “Unaudited Pro Forma Combined Condensed Consolidated Financial Statements” beginning on page 132.
In connection with the merger, BancorpSouth will assume Cadence’s outstanding debt obligations, and the combined company’s level of indebtedness following the completion of the merger could adversely affect the combined company’s ability to raise additional capital and to meet its obligations under its existing indebtedness.
In connection with the merger, BancorpSouth will assume Cadence’s outstanding indebtedness. As of March 31, 2021, Cadence had outstanding $100 million in Federal Home Loan Bank advances, approximately $50 million in senior debt, approximately $145 million in subordinated debt, approximately $50 million in junior subordinated debentures, approximately $2 million in notes payable and approximately $246 million in other liabilities. BancorpSouth’s existing debt, together with any future incurrence of additional indebtedness, could have important consequences for the combined company’s creditors and the combined company’s shareholders. For example, it could:
limit the combined company’s ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes;
restrict the combined company from making strategic acquisitions or cause the combined company to make non-strategic divestitures;
restrict the combined company from paying dividends to its shareholders;
increase the combined company’s vulnerability to general economic and industry conditions; and
require a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on the combined company’s indebtedness and dividends on the preferred stock, thereby reducing the combined company’s ability to use cash flows to fund its operations, capital expenditures and future business opportunities.
Following completion of the merger, holders of BancorpSouth common stock will be subject to the prior dividend and liquidation rights of the holders of outstanding indebtedness of the combined company, including indebtedness of Cadence assumed by BancorpSouth in the merger. Holders of outstanding indebtedness of the combined company and holders of shares of BancorpSouth preferred stock and any shares of preferred stock that BancorpSouth may issue in the future would receive, upon the combined company’s voluntary or involuntary liquidation, dissolution or winding up, before any payment is made to holders of BancorpSouth common stock, their liquidation preferences as well as any accrued and unpaid distributions, as applicable. These payments would reduce the remaining amount of the combined company’s assets, if any, available for distribution to holders of its common stock.
Holders of BancorpSouth and Cadence common stock will have a reduced ownership and voting interest in the combined company after the merger and will exercise less influence over management.
Holders of BancorpSouth and Cadence common stock currently have the right to vote in the election of the board of directors and on other matters affecting BancorpSouth and Cadence, respectively. When the merger is completed, each holder of Cadence common stock who receives shares of BancorpSouth common stock will become a
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shareholder of the combined company, with a percentage ownership of the combined company that is smaller than the holder’s percentage ownership of Cadence, and each holder of BancorpSouth common stock will become a holder of common stock of the combined company, with a percentage ownership of the combined company that is smaller than the holder’s percentage ownership of BancorpSouth. Based on the number of shares of BancorpSouth and Cadence common stock currently outstanding, and based on the number of shares of BancorpSouth common stock expected to be issued in the merger, the former holders of Cadence common stock, as a group, are estimated to own approximately forty-five percent (45%) of the outstanding shares of the combined company immediately after the merger and current holders of BancorpSouth common stock as a group are estimated to own approximately fifty-five percent (55%) of the outstanding shares of common stock of the combined company immediately after the merger. Because of this, holders of Cadence common stock may have less influence on the management and policies of the combined company than they now have on the management and policies of Cadence, and holders of BancorpSouth common stock may have less influence on the management and policies of the combined company than they now have on the management and policies of BancorpSouth.
Holders of BancorpSouth common stock and BancorpSouth preferred stock and holders of Cadence common stock will not have dissenters’ rights or appraisal rights in the merger.
Appraisal rights (also known as dissenters’ rights) are statutory rights that, if applicable under law, enable shareholders to dissent from an extraordinary transaction, such as a merger, and to demand that the corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to shareholders in connection with the extraordinary transaction.
Under Section 79-4-13.02 of the MBCA, the holders of BancorpSouth common stock and BancorpSouth preferred stock will not be entitled to dissenters’ rights in connection with the merger with respect to shares of any class or series that remain outstanding after consummation of the merger. If the merger is completed, holders of BancorpSouth common stock and BancorpSouth preferred stock will not receive any consideration, and their shares of BancorpSouth common stock and BancorpSouth preferred stock will remain outstanding and will constitute shares of the combined company. Accordingly, holders of BancorpSouth common stock and BancorpSouth preferred stock are not entitled to any dissenters’ rights in connection with the merger.
Under Section 262 of the Delaware General Corporation Law, the holders of Cadence common stock will not be entitled to appraisal or dissenters’ rights in connection with the merger if, on the record date for the Cadence special meeting, Cadence’s shares are listed on a national securities exchange or held of record by more than two thousand (2,000) shareholders, and holders of Cadence common stock are not required to accept as consideration for their shares anything other than the shares of the combined company, shares of another corporation which at the effective date of the merger are either listed on a national securities exchange or held of record by more than two thousand (2,000) shareholders, cash paid in lieu of fractional shares or any combination of the foregoing. Cadence common stock is currently listed on the New York Stock Exchange, a national securities exchange, and is expected to continue to be so listed on the record date for the Cadence special meeting. In addition, the holders of Cadence common stock will receive shares of BancorpSouth common stock as consideration in the merger, which shares are currently listed on the New York Stock Exchange, and are expected to continue to be so listed at the effective time of the merger. Accordingly, the holders of Cadence common stock are not entitled to any appraisal or dissenters’ rights in connection with the merger.
Shareholder litigation could prevent or delay the completion of the merger or otherwise negatively impact the business and operations of BancorpSouth and Cadence.
Beginning on May 28, 2021, three purported holders of Cadence common stock filed substantially similar complaints against Cadence and the members of the Cadence board of directors. Two complaints were filed in the United States District Court for the District of Delaware, while one complaint was filed in the United States District Court for the Southern District of New York. The complaints assert claims under Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9 promulgated thereunder against Cadence and the members of the Cadence board of directors alleging, among other things, that the preliminary proxy statement filed on May 27, 2021 with the SEC was materially incomplete and misleading in various respects. In addition, on June 9, 2021, a purported holder of BancorpSouth common stock filed a complaint against BancorpSouth and the members of the BancorpSouth board of directors in the United States District Court for the Eastern District of New York. The complaint asserts claims under Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9 promulgated thereunder against BancorpSouth and the members of the BancorpSouth board of directors alleging, among other things, that the preliminary proxy statement
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filed on May 27, 2021 with the SEC was materially incomplete and misleading in various respects. Among other remedies, the plaintiffs in each of the foregoing actions seek to enjoin the merger and, if the merger is completed, money damages.
Additional lawsuits against Cadence, BancorpSouth and/or the directors and officers of either company in connection with the merger may be filed. If plaintiffs are successful in obtaining an injunction prohibiting the completion of the merger on the agreed-upon terms, then such injunction may prevent the merger from being completed, or from being completed within the expected time frame. The defense or settlement of any lawsuit or claim may result in costs to Cadence and BancorpSouth. See the section entitled “The Merger—Litigation Relating to the Merger” beginning on page 111.
Risks Relating to BancorpSouth’s Business
You should read and consider risk factors specific to BancorpSouth’s business that will also affect the combined company after the merger. These risks are described in the sections entitled “Risk Factors” in BancorpSouth’s Annual Report on Form 10-K for the year ended December 31, 2020, BancorpSouth’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, and in other documents incorporated by reference into this joint proxy statement/offering circular. Please see the section entitled “Where You Can Find More Information” beginning on page 154 of this joint proxy statement/offering circular for the location of information incorporated by reference into this joint proxy statement/offering circular.