BancorpSouth Beats on Earnings - Analyst Blog
January 23 2014 - 10:50AM
Zacks
BancorpSouth, Inc.’s (BXS) fourth-quarter 2013
earnings per share came in at 29 cents, beating the Zacks Consensus
Estimate by a penny. Further, earnings compared favorably with the
prior-year quarter figure of 18 cents. With this, the company has
delivered positive earnings surprises in three of the last four
quarters.
For full-year 2013, BancorpSouth’s earnings per share of 99 cents
missed the Zacks Consensus Estimate by a penny. However, it came in
ahead of the prior-year figure of 90 cents.
BancorpSouth’s results benefited from increased net interest
revenue, lower expenses and the absence of provision for credit
losses. These positives were partially offset by decline in
non-interest revenues.
The company’s net income stood at $27.7 million in the reported
quarter, reflecting a significant increase of 63.1% from the
year-ago quarter. Also, for 2013, it came in at $94.1 million, up
1.1% year over year
Quarter in Detail
BancorpSouth’s net interest revenue came in at $102.4 million, up
1.5% year over year. Fully taxable equivalent net interest margin
(NIM) climbed 8 basis points (bps) year over year to 3.52%. The
rise was mainly due to lower interest expenses, partially offset by
a fall in yields on loans and leases and interest earning
assets.
Non-interest revenues declined 8.2% year over year to $65.1
million. The decline was mainly due to lower deposit service charge
revenues, partially offset by higher credit and debit card fee
revenues as well as insurance commission revenue. Non-interest
revenues for the quarter included a positive mortgage servicing
right (MSR) valuation adjustment of $2.9 million, compared with a
positive adjustment of $0.2 million for fourth-quarter 2012.
Excluding the MSR valuation adjustments, net mortgage lending
revenue was $6.7 million, a significant decline from $17.0 million
in the year-ago quarter.
BancorpSouth’s non-interest expense declined 10.8 % year over year
to $127.8 million. This was mainly due to lower salaries and
employee benefits costs as well as lower foreclosed property
expenses.
As of Dec 31, 2013, total deposits stood at $10.8 billion, down
2.8% year over year, while net loans and leases rose 3.9% to $9.0
billion.
Credit Quality
BancorpSouth reported a partial improvement in its credit quality.
Provision for credit losses was nil in the reported quarter.
Annualized net charge-offs as a percent of average loans and leases
declined 46 bps year over year to 0.03%.
Further, as of Dec 31, 2013, BancorpSouth’s nonperforming loans
were $120.4 million or 1.34% of net loans and leases, decreasing
from $233.6 million or 2.70% as of Dec 31, 2012.
However, allowance for credit losses to non-performing loans and
leases significantly increased to 127.27% from the prior-year
figure of 70.42%. Also, allowance for credit losses to
non-performing assets stood at 80.76% compared with 48.83% in the
prior-year quarter.
Capital Position
Though capital ratios declined in the reported quarter,
BancorpSouth remained well capitalized. Tier I capital and
tier I leverage capital stood at 12.99% and 9.93%, respectively,
compared with 13.77% and 10.25% at the end of the prior-year
quarter.
As of Dec 31, 2013, total risk based capital came in at 14.25
%.
The ratio of total shareholders' equity to total assets increased
to 11.61% at the end of the quarter from 10.82% as of Dec 31, 2012.
Moreover, the ratio of tangible shareholders' equity to tangible
assets advanced 61 bps to 9.44%.
Our Take
The results of BancorpSouth reflect a commendable year for the
company. While there are lingering concerns over the prevalent
stringent regulatory landscape and a weak mortgage market that may
adversely impact NIM, we believe that improvement in the company’s
fee-based business will help it navigate through the current
cycle.
BancorpSouth currently carries a Zacks Rank #2 (Buy).
Among other banks, F.N.B. Corporation’s (FNB)
fourth-quarter operating earnings came in at 21 cents per share,
which was in line with the Zacks Consensus Estimate.
State Street Corporation (STT) is scheduled to
report fourth-quarter results on Jan 24, while Zions
Bancorporation (ZION) will report on Jan 27.
BANCORPSOUTH (BXS): Free Stock Analysis Report
FNB CORP (FNB): Free Stock Analysis Report
STATE ST CORP (STT): Free Stock Analysis Report
ZIONS BANCORP (ZION): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
BancorpSouth Bank (NYSE:BXS)
Historical Stock Chart
From Apr 2024 to May 2024
BancorpSouth Bank (NYSE:BXS)
Historical Stock Chart
From May 2023 to May 2024