A month has gone by since the last earnings report for BancorpSouth . Shares have added about 11.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is BancorpSouth due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
BancorpSouth Q2 Earnings & Revenues Surpass Estimates
BancorpSouth delivered an earnings surprise of 28.36% in second-quarter 2021 on higher interest income. Net operating earnings of 86 cents per share beat the Zacks Consensus Estimate of 67 cents. Also, the bottom line compares favorably with the 59 cents reported in the year-ago quarter.
Higher net revenues were aided by increases in net interest revenues and non-interest revenues. Moreover, higher deposit balances and improved credit quality aided the company. However, shrinking NIM and loan balancewere major drags.
The company’s net income for the June-end quarter amounted to $73.2 million or 69 cents per share, up from the $58.8 million or 57 cents reported in the year-ago quarter.
Revenues & Deposits Climb, Expenses Rise
Net revenues for the reported quarter increased 6.9% year over year to $282.1 million. In addition, the top-line figure surpassed the Zacks Consensus Estimate of $272.08 million.
Net interest revenues for the quarter came in at $172.8 million, up 3.2% year over year. Fully-taxable equivalent NIM was 3.15%, contracting 39 basis points (bps) year over year.
Non-interest revenues climbed 11.6% year over year to $101.9 million. The figure included a negative mortgage servicing rights valuation adjustment of $1.9 million. This upswing resulted from rise in all the components.
Non-interest expenses came in at $174 million, flaring up 7.1% year on year. This upside stemmed primarily from higher salaries, occupancy expense, other non-interest expenses and merger-related expenses.
As of Jun 30, 2021, total deposits were $22.8 billion, up 9.4% sequentially, while loans and leases, net of unearned income, fell 2.9% sequentially to $15.47 billion.
Credit Quality Strengthens
Non-performing loans and leases were 0.56% of net loans and leases as of Jun 30, 2021, down from 0.96% as of Jun 30, 2020. Also, non-performing assets were $101.7 million, down 34.5% from the prior-year quarter.
During the April-June period, the company recorded provision for credit losses of $11.5 million compared with the provision of $20 million witnessed in the second quarter of 2020. The provision was primarily associated with the day one accounting provision requirements for loans acquired during the quarter.
However, allowance for credit losses to net loans and leases was 1.77% as of Jun 30, 2021, up 23 bps, year on year.
Capital Position
As of Jun 30, 2021, tier 1 capital and tier 1 leverage capital ratios were 11.85% and 8.43% compared with the 11.22% and 8.54%, respectively, recorded at the end of the prior-year quarter.
However, the ratio of tangible shareholders' equity to tangible assets shrunk 33 bps to 7.11%. Additionally, ratio of its total shareholders' equity to total assets was 11.12% at the end of the second quarter, down from 11.76% as of Jun 30, 2020.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
Currently, BancorpSouth has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, BancorpSouth has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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BancorpSouth (BXS) Up 11.2% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for BancorpSouth . Shares have added about 11.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is BancorpSouth due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
BancorpSouth Q2 Earnings & Revenues Surpass Estimates
BancorpSouth delivered an earnings surprise of 28.36% in second-quarter 2021 on higher interest income. Net operating earnings of 86 cents per share beat the Zacks Consensus Estimate of 67 cents. Also, the bottom line compares favorably with the 59 cents reported in the year-ago quarter.
Higher net revenues were aided by increases in net interest revenues and non-interest revenues. Moreover, higher deposit balances and improved credit quality aided the company. However, shrinking NIM and loan balancewere major drags.
The company’s net income for the June-end quarter amounted to $73.2 million or 69 cents per share, up from the $58.8 million or 57 cents reported in the year-ago quarter.
Revenues & Deposits Climb, Expenses Rise
Net revenues for the reported quarter increased 6.9% year over year to $282.1 million. In addition, the top-line figure surpassed the Zacks Consensus Estimate of $272.08 million.
Net interest revenues for the quarter came in at $172.8 million, up 3.2% year over year. Fully-taxable equivalent NIM was 3.15%, contracting 39 basis points (bps) year over year.
Non-interest revenues climbed 11.6% year over year to $101.9 million. The figure included a negative mortgage servicing rights valuation adjustment of $1.9 million. This upswing resulted from rise in all the components.
Non-interest expenses came in at $174 million, flaring up 7.1% year on year. This upside stemmed primarily from higher salaries, occupancy expense, other non-interest expenses and merger-related expenses.
As of Jun 30, 2021, total deposits were $22.8 billion, up 9.4% sequentially, while loans and leases, net of unearned income, fell 2.9% sequentially to $15.47 billion.
Credit Quality Strengthens
Non-performing loans and leases were 0.56% of net loans and leases as of Jun 30, 2021, down from 0.96% as of Jun 30, 2020. Also, non-performing assets were $101.7 million, down 34.5% from the prior-year quarter.
During the April-June period, the company recorded provision for credit losses of $11.5 million compared with the provision of $20 million witnessed in the second quarter of 2020. The provision was primarily associated with the day one accounting provision requirements for loans acquired during the quarter.
However, allowance for credit losses to net loans and leases was 1.77% as of Jun 30, 2021, up 23 bps, year on year.
Capital Position
As of Jun 30, 2021, tier 1 capital and tier 1 leverage capital ratios were 11.85% and 8.43% compared with the 11.22% and 8.54%, respectively, recorded at the end of the prior-year quarter.
However, the ratio of tangible shareholders' equity to tangible assets shrunk 33 bps to 7.11%. Additionally, ratio of its total shareholders' equity to total assets was 11.12% at the end of the second quarter, down from 11.76% as of Jun 30, 2020.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
Currently, BancorpSouth has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, BancorpSouth has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.