(14) PENSION, OTHER POST RETIREMENT BENEFIT AND PROFIT SHARING PLANS

The Basic Plan is a non-contributory defined benefit pension plan managed by a trustee covering substantially all full-time employees who have at least one year of service, have attained the age of 21 and were hired prior to January 1, 2006. During 2011, the Basic Plan was amended to implement a 2.5% cash balance formula that becomes effective January 1, 2012 for employees hired on or after January 1, 2006. Prior to this amendment, benefits were based on years of service and the employee's compensation. For employees hired prior to January 1, 2006, benefits will continue to be based on years of service and the employee's compensation until January 1, 2017, at which time benefits will be based on a 2.5% cash balance formula. As a result of the amendment, the plan was remeasured as of October 31, 2011. The amendment reduced the projected benefit obligation by $8.2 million. The Company's funding policy is to contribute to the Basic Plan the amount that meets the minimum funding requirements set forth in the Employee Retirement Income Security Act of 1974, plus such additional amounts as the Company determines to be appropriate. The difference between the plan assets and projected benefit obligation is included in other assets or other liabilities, as appropriate. Actuarial assumptions are evaluated periodically.

The Restoration Plan provides for the payment of retirement benefits to certain participants in the Basic Plan. The Restoration Plan is a non-qualified plan that covers any employee whose benefit under the Basic Plan is limited by the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), and any employee who elects to participate in the BancorpSouth, Inc. Deferred Compensation Plan, which reduces the employee's benefit under the Basic Plan. During 2011, the Restoration Plan was amended to implement a 2.5% cash balance formula that becomes effective January 1, 2012 for employees hired on or after January 1, 2006. Prior to this amendment, benefits were based on years of service and the employee's compensation. For employees hired prior to January 1, 2006, benefits will continue to be based on years of service and the employee's compensation until January 1, 2017, at which time benefits will be based on a 2.5% cash balance formula. As a result of the amendment, the plan was remeasured as of October 31, 2011. The amendment reduced the projected benefit obligation by approximately $316,000. The Supplemental Plan is a non-qualified defined benefit supplemental retirement plan for certain key employees. Benefits commence when the employee retires and are payable over a period of ten years.

The Company uses a December 31 measurement date for its pension and other benefit plans.

A summary of the three defined benefit retirement plans at and for the years ended December 31, 2011, 2010 and 2009 follows:

	Pension Benefits
	2011			2010			2009
Change in benefit obligations:	(In thousands)
Projected benefit obligations at beginning of year	$	156,595		$	134,892		$	120,050
Service cost		8,107			7,449			7,127
Interest cost		8,327			7,676			7,019
Amendments		(8,494	)		-			330
Actuarial loss		22,253			11,457			4,882
Benefits paid		(4,197	)		(4,879	)		(4,516	)
Administrative expenses paid		(229	)		-			-
Projected benefit obligations at end of year	$	182,362		$	156,595		$	134,892
Change in plans assets:
Fair value of plans assets at beginning of year	$	197,536		$	180,217		$	116,136
Actual return on assets		1,347			21,488			29,740
Employer contributions		547			710			38,857
Benefits paid		(4,197	)		(4,879	)		(4,516	)
Administrative expenses paid		(229	)		-			-
Fair value of plans assets at end of year	$	195,004		$	197,536		$	180,217
Funded status:
Projected benefit obligations	$	(182,362	)	$	(156,595	)	$	(134,892	)
Fair value of plans assets		195,004			197,536			180,217
Unrecognized transition amount		-			-			-
Unrecognized prior service cost		-			-			-
Unrecognized actuarial loss		-			-			-
Net amount recognized	$	12,642		$	40,941		$	45,325

Amounts recognized in the consolidated balance sheets consisted of:

	Pension Benefits
	2011			2010			2009
	(In thousands)
Prepaid benefit cost	$	102,307		$	104,749		$	105,900
Accrued benefit liability		(20,572	)		(18,678	)		(16,868	)
Intangible asset		-			-			-
Accumulated other comprehensive
income adjustment		(69,093	)		(45,130	)		(43,707	)
Net amount recognized	$	12,642		$	40,941		$	45,325

Pre-tax amounts recognized in accumulated other comprehensive income consisted of:

	Year ended December 31,
	2011			2010
	(In thousands)

Net transition obligation	$	55		$	73
Net prior service (benefit) cost		(6,901	)		1,623
Net actuarial loss		75,939			43,434
Total accumulated other comprehensive income	$	69,093		$	45,130

The net transition obligation, net prior service credit and net actuarial loss that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year are approximately $18,000, $768,000 and $5,725,000, respectively.

The components of net periodic benefit cost at December 31, 2011, 2010 and 2009 were as follows:

	Pension Benefits
	2011			2010			2009
Components of net periodic benefit cost:	(In thousands)
Service cost	$	8,107		$	7,449		$	7,127
Interest cost		8,327			7,676			7,019
Expected return on assets		(14,864	)		(14,032	)		(10,698	)
Amortization of unrecognized transition amount		18			18			18
Recognized prior service cost		31			341			342
Recognized net loss		3,264			2,218			4,320
Net periodic benefit cost	$	4,883		$	3,670		$	8,128

The weighted-average assumptions used to determine benefit obligations at December 31, 2011 and 2010 were as follows:

	Basic Plan						Restoration Plan						Supplemental Plan
	2011			2010			2011			2010			2011			2010
Discount rate		4.80	%		5.50	%		4.45	%		5.15	%		3.85	%		4.50	%
Rate of compensation increase*		2.00	%		2.50	%		2.00	%		2.50	%		2.00	%		2.50	%

* 3.00% rate of compensation increase used for 2012 and beyond.

The weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31, 2011, 2010 and 2009 were as follows:

	Basic Plan
	2011			2010			2009
Discount rate		5.50	%		6.00	%		6.25	%
Rate of compensation increase		3.00	%		3.00	%		3.60	%
Expected rate of return on plan assets		8.00	%		8.00	%		8.00	%

	Restoration Plan
	2011			2010			2009
Discount rate		5.15	%		5.85	%		6.50	%
Rate of compensation increase		3.00	%		3.00	%		3.60	%
Expected rate of return on plan assets		N/A			N/A			N/A

	Supplemental Plan
	2011			2010			2009
Discount rate		4.50	%		5.35	%		6.50	%
Rate of compensation increase		3.00	%		3.00	%		3.60	%
Expected rate of return on plan assets		N/A			N/A			N/A
N/A = not applicable

The following table presents information related to the Restoration Plan and Supplemental Plan that had accumulated benefit obligations in excess of plan assets at December 31, 2011 and 2010:

	2011		2010
	(In thousands)
Projected benefit obligation	$	26,712	$	23,468
Accumulated benefit obligation		25,409		22,439
Fair value of assets		-		-

The following table presents information related to the Company's defined benefit pension plans at December 31, 2011 and 2010:

	2011		2010
	(In thousands)
Accumulated benefit obligation	$	172,439	$	140,967

In selecting the expected long-term rate of return on assets used for the Basic Plan, the Company considered the average rate of earnings expected on the funds invested or to be invested to provide for the benefits of the plan. This included considering the trust asset allocation and the expected returns likely to be earned over the life of the plan. This basis is consistent with the prior year. The discount rate is the rate used to determine the present value of the Company's future benefit obligations for its pension and other postretirement benefit plans. The discount rate used to discount plan liabilities is determined by matching the timing and duration of expected cash flows of the Company's pension obligations to a yield curve generated from a broad portfolio of high-quality fixed income debt instruments.

The Company's pension plan weighted-average asset allocations at December 31, 2011 and 2010, by asset category, were as follows:

	Plan assets at December 31		Target for
Asset category:	2011	2010	2012

Equity securities	36.87%	57.26%	40-60%
Debt securities	58.16%	37.18%	40-60%
Cash and equivalents	4.97%	5.56%	0%
Total	100.00%	100.00%

Equity securities held in the Basic Plan included shares of the Company's common stock with a fair value of approximately $907,000 (0.46% of total plan assets) and $1.2 million (0.66% of total plan assets) at December 31, 2011 and 2010, respectively. Management does not anticipate that the Company will contribute to the Basic Plan in 2012.

The following table presents information regarding expected future benefit payments, which reflect expected service, as appropriate:

	Pension
	Benefits
Expected future benefit payments:	(In thousands)
2012	$	12,629
2013		9,705
2014		10,450
2015		11,950
2016		10,790
2017-2021		58,568

The following table presents the fair value of each major category of plan assets held in the Basic Plan at December 31, 2011 and 2010:

	Pension Benefits
	2011		2010
Investments, at fair value:	(In thousands)
U.S. agency debt obligations	$	70,757	$	33,433
Mutual funds		112,995		150,964
Common stock of BancorpSouth, Inc.		907		1,312
Money market funds		4,701		3,568
Brokered certificates of deposit		4,965		7,881
Total investments, at fair value		194,325		197,158
Accrued interest and dividends		679		378
Fair value of plan assets	$	195,004	$	197,536

Fair values are determined based on valuation techniques categorized as follows: Level 1 means the use of quoted prices for identical instruments in active markets; Level 2 means the use of quoted prices for identical or similar instruments in markets that are not active or are directly or indirectly observable; Level 3 means the use of unobservable inputs. Quoted market prices, when available, are used to value investments. Pension plan investments include funds which invest in various types of investment securities and in various companies within various markets. Investment securities are exposed to several risks, such as interest rate, market and credit risks. Because of the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported.

The following table sets forth by level, within the FASB ASC 820, Fair Value Measurements and Disclosure (“FASB ASC 820”), fair value hierarchy, the plan investments at fair value as of December 31, 2011 and 2010:

	December 31, 2011
	Level 1		Level 2		Level 3		Total
	(In thousands)
U.S. agency debt obligations	$	-	$	70,757	$	-	$	70,757
Mutual funds		112,995		-		-		112,995
Common stock of BancorpSouth, Inc.		907		-		-		907
Money market funds		-		4,701		-		4,701
Brokered certificates of deposit		-		4,965		-		4,965
Total	$	113,902	$	80,423	$	-	$	194,325

	December 31, 2010
	Level 1		Level 2		Level 3		Total
	(In thousands)
U.S. agency debt obligations	$	-	$	33,433	$	-	$	33,433
Mutual funds		150,964		-		-		150,964
Common stock of BancorpSouth, Inc.		1,312		-		-		1,312
Money market funds		-		3,568		-		3,568
Brokered certificates of deposit		-		7,881		-		7,881
Total	$	152,276	$	44,882	$	-	$	197,158

There were no transfers between Levels of the fair value hierarchy in 2011 or 2010.

The following investments represented 5% or more of the total plan asset value as of December 31, 2011:

	2011
	(In thousands)
Fidelity Advisor New Insight S Institution	$	10,382
Franklin Mutual Discovery Z Fund		10,489
T. Rowe Price Equity Income Fund		10,724
Vanguard Total Bond Market Index Institutional Fund		21,641

The Company has a defined contribution plan (commonly referred to as a “401(k) Plan”). Pursuant to the 401(k) Plan, employees may contribute a portion of their compensation, as set forth in the 401(k) Plan, subject to the limitations as established by the Code. Employee contributions (up to 5% of defined compensation) are matched dollar-for-dollar by the Company. Employer contributions were $8.6 million for each of the years ended December 31, 2011, 2010 and 2009. Also, the 401(k) Plan provides that the Company shall make a profit sharing contribution on behalf of each eligible employee in an amount equal to two percent of each such employee's eligible compensation. Eligible employees are those hired after December 31, 2005 who work at least 1,000 hours during the plan year and have attained the age of 21. Employer profit sharing contributions for the years ended December 31, 2011, 2010 and 2009 were $1.3 million, $1.3 million and $1.1 million, respectively.