BancorpSouth income falls in the fourth quarter, up more than 9% in 2015
by January 25, 2016 6:40 pm 537 views
BancorpSouth posted fourth quarter net income of $21.2 million, below the $28.66 million in the fourth quarter of 2014 and well below what market watchers expected from the regional bank holding company. However, full year net income of $127.5 million was up 9.16% compared to 2014.
The per share earnings of 22 cents was 15 cents below market expectations. The consensus estimate of the 10 analysts who cover the company was 37 cents per share net income for the quarter on revenue of $180.98 million.
Total revenue during the quarter was $229.28 million, better than the estimate and better than the $220.682 million for the same period in 2014.
Hurting the fourth quarter was a $16.5 million settlement of a class action lawsuit filed in 2010 and related to $24 million in overdraft fees.
“Our fourth quarter results were impacted by elevated non-interest expense, particularly related to the legal settlement,” Dan Rollins, BancorpSouth Chairman and CEO, said in Monday’s (Jan. 25) earnings statement. “While this settlement has an adverse impact on current quarter earnings, we believe it was in the best interest of our shareholders to put this case behind us and move forward.”
Rollins also said the company was able to shed foreclosed property and reduce its other-real-estate-owned allowance (ORE) by $8.9 million.
“Despite elevated legal and foreclosed property expense, we continue to be pleased with our core fundamental performance. We reported nice loan and deposit growth for the quarter. Additionally, both our net interest margin and our credit quality indicators remained stable. Finally, we continue to challenge expenses as many of our other core expense line items were either flat or down for the quarter,” Rollins noted.
However, legal woes continue to delay regulatory approval of two pending acquisitions. BancorpSouth announced in January 2014 it would buy Ouachita Independent Bancorp of Monroe, La., for $115 million in stock and cash. In the same month BancorpSouth also sought to buy Central Community Corp., the parent company of Austin, Texas-based First State Bank Central Texas. The deal pushed BancorpSouth much deeper into the competitive Texas banking market. BancorpSouth anted up $182.3 million in stock and $28.5 million in cash for this Texas deal.
BancorpSouth officials said federal bank regulators have found problems with its compliance with the Bank Secrecy Act and programs to fight money laundering. BancorpSouth also said the federal Consumer Financial Protection Bureau is reviewing the bank’s fair lending practices.
“Additionally, we have begun settlement discussions with the Consumer Financial Protection Bureau and the U.S. Department of Justice regarding their joint investigation of our fair lending practices,” the company noted Monday. “While it is too early to speculate on the potential timing or outcome of these discussions, we are pleased that these agencies have opened this dialogue with us and we are working toward a resolution. However, if we are able to reach a settlement of this investigation, there is no guarantee that the terms would permit our pending mergers to move forward.”
Following are other key items in the BancorpSouth earnings report.
• Net operating income of $31.4 million, or 33 cents per diluted share.
• Net interest revenue was $111.2 million for the fourth quarter of 2015, an increase of 4.5 percent from $106.4 million for the fourth quarter of 2014.
• Noninterest revenue was $67.4 million for the fourth quarter of 2015, compared with $63.5 million for the fourth quarter of 2014
• Generated net loan growth of $153.2 million, or 5.9% on an annualized basis and deposit growth of $189.2 million, or 6.7% on an annualized basis.
• Other real estate owned (“OREO”) declined $8.9 million, or 37.7%, as a result of the disposition of several large parcels of property. Related foreclosed property expense was elevated at $3 million.
Tupelo, Miss.-based BancorpSouth is a financial holding company with $13.8 billion in assets. BancorpSouth Bank operates 241 branch locations as well additional mortgage, insurance, and loan production offices in Alabama, Arkansas, Florida, Louisiana, Mississippi, Missouri, Tennessee and Texas, including an insurance location in Illinois.
BancorpSouth shares (NYSE: BXS) closed Monday at $19.51, up $1.01. During the past 52 weeks the share price has ranged from a $27.23 high to a $19.47 low.