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BancorpSouth's (BXS) Q2 Earnings Beat on Higher Revenues
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BancorpSouth reported second-quarter 2018 operating earnings of 56 cents per share, beating the Zacks Consensus Estimate by a penny. Also, the bottom line compared favorably with the year-ago quarter earnings of 41 cents.
Results benefited from an improvement in net interest revenues and non-interest revenues, partially offset by higher expenses. Loans balances improved during the quarter. However, worsening of capital position remained a key headwind.
The company’s net income for the quarter amounted to $54 million compared with $37.9 million reported in the year-ago quarter.
Revenue Rise Partially Offset by Higher Expenses, Loans Increase
Quarterly net revenues increased nearly 16% year over year to $214.6 million. Also, the reported figure surpassed the Zacks Consensus Estimate of $214.2 million.
Net interest revenues came in at $142.1 million, up 21% year over year. Fully-taxable equivalent net interest margin (NIM) was 3.71%, increasing 19 basis points (bps) from the prior-year quarter.
Non-interest revenues increased 6% year over year to $72.5 million. The rise was primarily due to growth in mortgage banking revenues, card fees and deposit service charges.
Non-interest expenses were $145.2 million, increasing 14% from the year-ago quarter. The rise was due to impact of merger expenses and higher compensation expenses.
As of Jun 30, 2018, total deposits were $13.5 billion, down 3% sequentially while loans and leases, net of unearned income increased nearly 1% to $12.3 billion.
Credit Quality: A Mixed Bag
Non-performing loans and leases were 0.59% of net loans and leases as of Jun 30, 2018, down from 0.65% as of Jun 30, 2017. Additionally, allowance for credit losses to net loans and leases was 0.97%, down from 1.10% registered in the last-year quarter. Annualized net-charge offs, as a percent of average loans and leases, were 0.07% compared with 0.17% a year ago.
However, non-performing assets were nearly $81.2 million, up from $79.4 million registered in the prior-year quarter. Also, the company recorded $2.5 million of provisions, up significantly from $1 million in year-ago quarter.
Capital Ratios Deteriorate
As of Jun 30, 2018, Tier I capital and tier I leverage capital was 11.42% and 9.38%, down from 11.90% and 9.93%, respectively, at the end of the prior-year quarter.
The ratio of its total shareholders' equity to total assets was 12.03% at the end of the quarter, up from 11.40% as of Jun 30, 2017. However, the ratio of tangible shareholders' equity to tangible assets contracted 73 bps to 8.71%.
Share Repurchases
During the quarter, the company repurchased 785,877 common shares at a weighted average price of $31.39 per share. As of Jun 30, 2018, it had 3.1 million remaining shares available for repurchase under current share repurchase program through Dec 31, 2019.
Our Viewpoint
BancorpSouth reported a decent quarter. Expanding NIM along with loan growth is likely to support its top line in the quarters ahead. Also, the company’s efforts to grow through strategic acquisitions are encouraging. Further, cost savings associated with these buyouts are likely to be achieved in quarters ahead. However, deterioration in capital position remains a drag.
BancorpSouth Bank Price, Consensus and EPS Surprise
Comerica (CMA - Free Report) reported adjusted earnings per share of $1.90 in second-quarter 2018, up from the year-ago adjusted figure of $1.15. Including certain non-recurring items, earnings came in at $1.87. The Zacks Consensus Estimate was $1.62.
M&T Bank Corporation (MTB - Free Report) reported net operating earnings of $3.29 per share in second-quarter 2018, surpassing the Zacks Consensus Estimate of $3.17. Also, the bottom line improved 38% year over year.
First Horizon National Corporation (FHN - Free Report) reported second-quarter 2018 adjusted earnings per share of 36 cents, in line with the Zacks Consensus Estimate. The figure reflects an increase of 26.3% from the year-ago quarter.
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BancorpSouth's (BXS) Q2 Earnings Beat on Higher Revenues
BancorpSouth reported second-quarter 2018 operating earnings of 56 cents per share, beating the Zacks Consensus Estimate by a penny. Also, the bottom line compared favorably with the year-ago quarter earnings of 41 cents.
Results benefited from an improvement in net interest revenues and non-interest revenues, partially offset by higher expenses. Loans balances improved during the quarter. However, worsening of capital position remained a key headwind.
The company’s net income for the quarter amounted to $54 million compared with $37.9 million reported in the year-ago quarter.
Revenue Rise Partially Offset by Higher Expenses, Loans Increase
Quarterly net revenues increased nearly 16% year over year to $214.6 million. Also, the reported figure surpassed the Zacks Consensus Estimate of $214.2 million.
Net interest revenues came in at $142.1 million, up 21% year over year. Fully-taxable equivalent net interest margin (NIM) was 3.71%, increasing 19 basis points (bps) from the prior-year quarter.
Non-interest revenues increased 6% year over year to $72.5 million. The rise was primarily due to growth in mortgage banking revenues, card fees and deposit service charges.
Non-interest expenses were $145.2 million, increasing 14% from the year-ago quarter. The rise was due to impact of merger expenses and higher compensation expenses.
As of Jun 30, 2018, total deposits were $13.5 billion, down 3% sequentially while loans and leases, net of unearned income increased nearly 1% to $12.3 billion.
Credit Quality: A Mixed Bag
Non-performing loans and leases were 0.59% of net loans and leases as of Jun 30, 2018, down from 0.65% as of Jun 30, 2017. Additionally, allowance for credit losses to net loans and leases was 0.97%, down from 1.10% registered in the last-year quarter. Annualized net-charge offs, as a percent of average loans and leases, were 0.07% compared with 0.17% a year ago.
However, non-performing assets were nearly $81.2 million, up from $79.4 million registered in the prior-year quarter. Also, the company recorded $2.5 million of provisions, up significantly from $1 million in year-ago quarter.
Capital Ratios Deteriorate
As of Jun 30, 2018, Tier I capital and tier I leverage capital was 11.42% and 9.38%, down from 11.90% and 9.93%, respectively, at the end of the prior-year quarter.
The ratio of its total shareholders' equity to total assets was 12.03% at the end of the quarter, up from 11.40% as of Jun 30, 2017. However, the ratio of tangible shareholders' equity to tangible assets contracted 73 bps to 8.71%.
Share Repurchases
During the quarter, the company repurchased 785,877 common shares at a weighted average price of $31.39 per share. As of Jun 30, 2018, it had 3.1 million remaining shares available for repurchase under current share repurchase program through Dec 31, 2019.
Our Viewpoint
BancorpSouth reported a decent quarter. Expanding NIM along with loan growth is likely to support its top line in the quarters ahead. Also, the company’s efforts to grow through strategic acquisitions are encouraging. Further, cost savings associated with these buyouts are likely to be achieved in quarters ahead. However, deterioration in capital position remains a drag.
BancorpSouth Bank Price, Consensus and EPS Surprise
BancorpSouth Bank Price, Consensus and EPS Surprise | BancorpSouth Bank Quote
Currently, BancorpSouth carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
Comerica (CMA - Free Report) reported adjusted earnings per share of $1.90 in second-quarter 2018, up from the year-ago adjusted figure of $1.15. Including certain non-recurring items, earnings came in at $1.87. The Zacks Consensus Estimate was $1.62.
M&T Bank Corporation (MTB - Free Report) reported net operating earnings of $3.29 per share in second-quarter 2018, surpassing the Zacks Consensus Estimate of $3.17. Also, the bottom line improved 38% year over year.
First Horizon National Corporation (FHN - Free Report) reported second-quarter 2018 adjusted earnings per share of 36 cents, in line with the Zacks Consensus Estimate. The figure reflects an increase of 26.3% from the year-ago quarter.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>