2011 Net Income Up For BancorpSouth

BancorpSouth reported that 2011 net income reached $37.6 million, a gain over 2010 income of $22.9 million. For the fourth quarter, the company posted net income of $13.3 million, up over the $11.9 million in the 2010 period.

The fourth quarter income of 16 cents per share bested the analyst consensus estimate of 15 cents per share.

“Our results for the fourth quarter reflect meaningful progress in our efforts to improve credit quality,” Aubrey Patterson, bank chairman and CEO said in the earnings statement. “This progress is evidenced by both comparable quarter and sequential quarter improvement in many of our credit quality indicators, including the provision for credit losses, non-performing loans, nonaccrual loan formation, and near term delinquencies.”

Revenue during 2011 was $705.758 million for the Tupelo, Miss.-based regional bank operation. Revenue during 2010 was $705.286 million.

Financial improvements came primarily from an almost 28% decline during 2011 in the bank’s provision for credit losses. The bank held only $130.081 million in provisions for credit losses during 2011, down 27.9% compared to the $264.144 million set aside for potential bad loans in 2010.

Other details released about improvements in credit provisions included:
• Non-performing loans (NPL) declined $40.5 million, or 11.2%, during the fourth quarter of 2011 to $322.3 million at Dec. 31, compared with $362.8 million at Sept. 30, 2011;
• Gross nonaccrual loan formation decreased to $39.5 million for the fourth quarter of 2011 compared to $131.1 million for the fourth quarter of 2010 and $60.8 million for the third quarter of 2011; and,
• Total loans 30-89 days past due decreased during the fourth quarter of 2011 to $37.5 million at Dec. 31, from $54.1 million at Sept. 30, 2011.

The company was able to grow non-interest revenue during 2011. The category generated $270.845 million during 2011, ahead of the $264.144 million during 2010.

“We continue to have solid performance from our community banking group as well as our other noninterest revenue lines of business, which include our insurance group and our mortgage business,” Patterson explained. “Our mortgage business had another strong year, both in terms of production and revenue, and our insurance group produced organic growth when compared to the same quarter last year as well as on an annual basis.”

The national foreclosure problem was evident in the BancorpSouth earnings report. Other real estate owned by the bank increased $11.1 million during the fourth quarter to $173.8 million. The increase was pushed by a $36.5 million increase in foreclosures. Also, foreclosed property expenses increased to $10.8 million for the fourth quarter of 2011 from $6.1 million for the fourth quarter of 2010 and $6.1 million for the third quarter of 2011.

Patterson said the company is “pleased with the performance” of the bank’s operations, but “we remain cautious about the impact of the current economic environment on our near-term results.”

BancorpSouth Inc. is a financial holding company with $13 billion in assets as of Dec. 31. The company operates approximately 286 commercial banking, mortgage, insurance, trust and broker/dealer locations in Alabama, Arkansas, Florida, Louisiana, Mississippi, Missouri, Tennessee and Texas.

Shares of BancorpSouth (NYSE: BXS) were trading midday Wednesday (Jan. 18) at $11.36, down 83 cents. During the past 52 weeks, the share price has ranged from a $16.25 high to a $8.23 low.

Michael Tilley with our content partner, The City Wire, is the author of this report. He can be reached by email at [email protected].