Analyst sees headwinds for BancorpSouth

by The City Wire staff ( 10 views 

Sterne Agee analyst Peyton Green recently lowered his earning estimates for BancorpSouth for fiscal 2014. Young expects the regional bank to earn $1.26 per share, about 7 cents less than previously noted. He shaved 14 cents off of his 2015 earnings forecast of $1.48 per share.

“Despite steady progress in restoring returns, BancorpSouth will likely tread water until regulatory issues pass and its two pending acquisitions are successfully closed and integrated,” Green wrote in a note to investors Friday (Aug. 22).

The lower guidance reflects news that the pending acquisitions of Ouachita Bancshares Corp. and Central Community Corporation will not close until the second quarter of 2015.

“Unfortunately, BancorpSouth has its hands tied with the FDIC in its Bank Secrecy Act / Anti-Money Laundering compliance issue and the Consumer Financial Protection Bureau with regard to a fair lending investigation,” Green noted.

He adds that management is confident that these issues can resolved in fairly short order but they do extend the closing time for the two pending acquisitions.

Green is neutral on the shares. Bancorp South shares closed Friday at $21.10, up 4 cents. For the past 52 weeks the share price has ranged from $18.93 to $26.24.