BancorpSouth reported second-quarter 2019 net operating earnings of 61 cents per share, which came in line with the Zacks Consensus Estimate. Also, the bottom line increased 8.9% from the prior-year quarter.
Results were affected by lower non-interest income and higher expenses. However, an improvement in net interest revenues, net interest margin (NIM) and lower provisions were tailwinds.
After considering certain non-recurring items, the company’s net income for the second quarter amounted to $53.1 million compared with $54 million reported in the year-ago quarter.
Revenues Climb, Expenses Rise, Loans Improve
Net revenues for the reported quarter increased 5.5% year over year to $226.3 million. However, the top line missed the Zacks Consensus Estimate of $235 million.
Net interest revenues for the quarter came in at $160 million, up 12.6% year over year. Fully-taxable equivalent NIM was 3.87%, expanding 16 basis points (bps).
Non-interest revenues decreased 8.5% year over year to $66.3 million. However, the figure included a negative mortgage servicing rights valuation adjustment of $8.8 million. The downside mainly resulted from lower mortgage banking and credit card fees.
Non-interest expenses came in at $157.7 million, up 8.6% from the year-ago quarter. The rise stemmed from the impact of higher salaries and employee benefits, net occupancy, equipment and deposit insurance assessments.
As of Jun 30, 2019, total deposits were $15.1 billion, up 3% sequentially while loans and leases, net of unearned income, increased 4.5% to $13.7 billion.
Credit Quality: A Mixed Bag
Non-performing loans and leases were 0.66% of net loans and leases as of Jun 30, 2019, up from 0.59% as of Jun 30, 2018. However, annualized net charge-offs, as a percentage of average loans and leases, decreased to 0.04% from 0.07% recorded on Jun 30, 2018. Also, allowance for credit losses to net loans and leases was 0.85%, down from 0.97% in the year-ago quarter.
Non-performing assets were nearly $96 million, up from the prior-year quarter’s $81.2 million. However, the company recorded provision for credit losses of $0.5 million compared with the $2.5 million in the year-ago quarter.
Strong Capital Ratios
As of Jun 30, 2019, tier I capital and tier I leverage capital was 10.52% and 8.96%, down from 11.42% and 9.38%, respectively, at the end of the prior-year quarter.
Ratio of its total shareholders' equity to total assets was 12.29% at the end of the June-ended quarter, up from 12.03% as of Jun 30, 2018. However, the ratio of tangible shareholders' equity to tangible assets shrunk 29 bps to 8.41%.
Share Repurchases
During the reported quarter, the company repurchased 0.61 million common shares at a weighted average price of $28.21 per share.
Our Viewpoint
BancorpSouth’s second-quarter performance seems decent. Improved NIM, along with rise in loans and deposits, will likely be conducive to its top-line growth, moving ahead. Also, the company’s efforts to grow through acquisitions are encouraging. However, mounting expenses might impede bottom-line growth.
Currently, BancorpSouth carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
Commerce Bancshares, Inc.’s (CBSH - Free Report) second-quarter 2019 earnings per share of 96 cents surpassed the Zacks Consensus Estimate of 94 cents. Moreover, the figure was in line with the prior-year quarter’s earnings.
Washington Federal’s (WAFD - Free Report) third-quarter fiscal 2019 (ended Jun 30) earnings came in at 67 cents per share, surpassing the Zacks Consensus Estimate of 64 cents. The figure also reflects year-over-year growth of 10%.
Hancock Whitney Corporation’s (HWC - Free Report) second-quarter 2019 operating earnings per share of $1.01 came in line with the Zacks Consensus Estimate. The bottom line was 5.2% higher than the year-ago figure.
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
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BancorpSouth reported second-quarter 2019 net operating earnings of 61 cents per share, which came in line with the Zacks Consensus Estimate. Also, the bottom line increased 8.9% from the prior-year quarter.
Results were affected by lower non-interest income and higher expenses. However, an improvement in net interest revenues, net interest margin (NIM) and lower provisions were tailwinds.
After considering certain non-recurring items, the company’s net income for the second quarter amounted to $53.1 million compared with $54 million reported in the year-ago quarter.
Revenues Climb, Expenses Rise, Loans Improve
Net revenues for the reported quarter increased 5.5% year over year to $226.3 million. However, the top line missed the Zacks Consensus Estimate of $235 million.
Net interest revenues for the quarter came in at $160 million, up 12.6% year over year. Fully-taxable equivalent NIM was 3.87%, expanding 16 basis points (bps).
Non-interest revenues decreased 8.5% year over year to $66.3 million. However, the figure included a negative mortgage servicing rights valuation adjustment of $8.8 million. The downside mainly resulted from lower mortgage banking and credit card fees.
Non-interest expenses came in at $157.7 million, up 8.6% from the year-ago quarter. The rise stemmed from the impact of higher salaries and employee benefits, net occupancy, equipment and deposit insurance assessments.
As of Jun 30, 2019, total deposits were $15.1 billion, up 3% sequentially while loans and leases, net of unearned income, increased 4.5% to $13.7 billion.
Credit Quality: A Mixed Bag
Non-performing loans and leases were 0.66% of net loans and leases as of Jun 30, 2019, up from 0.59% as of Jun 30, 2018. However, annualized net charge-offs, as a percentage of average loans and leases, decreased to 0.04% from 0.07% recorded on Jun 30, 2018. Also, allowance for credit losses to net loans and leases was 0.85%, down from 0.97% in the year-ago quarter.
Non-performing assets were nearly $96 million, up from the prior-year quarter’s $81.2 million. However, the company recorded provision for credit losses of $0.5 million compared with the $2.5 million in the year-ago quarter.
Strong Capital Ratios
As of Jun 30, 2019, tier I capital and tier I leverage capital was 10.52% and 8.96%, down from 11.42% and 9.38%, respectively, at the end of the prior-year quarter.
Ratio of its total shareholders' equity to total assets was 12.29% at the end of the June-ended quarter, up from 12.03% as of Jun 30, 2018. However, the ratio of tangible shareholders' equity to tangible assets shrunk 29 bps to 8.41%.
Share Repurchases
During the reported quarter, the company repurchased 0.61 million common shares at a weighted average price of $28.21 per share.
Our Viewpoint
BancorpSouth’s second-quarter performance seems decent. Improved NIM, along with rise in loans and deposits, will likely be conducive to its top-line growth, moving ahead. Also, the company’s efforts to grow through acquisitions are encouraging. However, mounting expenses might impede bottom-line growth.
Currently, BancorpSouth carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
Commerce Bancshares, Inc.’s (CBSH - Free Report) second-quarter 2019 earnings per share of 96 cents surpassed the Zacks Consensus Estimate of 94 cents. Moreover, the figure was in line with the prior-year quarter’s earnings.
Washington Federal’s (WAFD - Free Report) third-quarter fiscal 2019 (ended Jun 30) earnings came in at 67 cents per share, surpassing the Zacks Consensus Estimate of 64 cents. The figure also reflects year-over-year growth of 10%.
Hancock Whitney Corporation’s (HWC - Free Report) second-quarter 2019 operating earnings per share of $1.01 came in line with the Zacks Consensus Estimate. The bottom line was 5.2% higher than the year-ago figure.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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