BancorpSouth’s first quarter earnings took a huge hit on Thursday as poor-performing loans and credit losses continue to cut into profits. At the same time, a Wall Street credit rating agency said it would review BancorpSouth’s credit rating.
For the period ended March, the Tupelo-Miss.-based banked reported net income of $8.4 million or 10 cents diluted share, down 71 percent from net income of $29.5 million or 35 cents a year ago.
After Thursday’s closing bell, Moody’s Investors Service placed the ratings of BancorpSouth Inc., and its subsidiaries, including its lead bank, BancorpSouth Bank under review for possible downgrade. Currently, the bank has a C+ rating for financial strength and A2 –rating for long-term deposits.
Aubrey Patterson, Chairman and CEO of BancorpSouth, said the bank has operated effectively “in a stressful economic environment that has continued to challenge the financial services industry.”
“The banking industry, as a whole, has experienced a decline in loans for the last several quarters,” Patterson said. “We are encouraged that we have been able to maintain our volume of loans outstanding and believe that we are well positioned to capitalize on loan growth opportunities as the economy improves.”
BancorpSouth will conduct a conference call with analysts this morning at 10 a.m. to discuss its first quarter results. Analysts polled by Thomson Reuters expected the bank’s first quarter earnings to average 20 cents per share.
So far, first quarter results for regional banks have been a mixed bag. Conway’s Home Bancshares and Lafayette, La-based IberiaBank have performed well beyond Wall Street’s expectations and are currently trading near or above their 52-week highs.
However, Simmons First National Corp.’s results fell well below analysts’ predictions as the non-performing loans cut first quarter earnings by nearly 20 percent. Little Rock’s Bank of the Ozarks is expected to release its first quarter report next week.