BancorpSouth meets Wall Street expectations, looks to get tabled merger deals back on schedule

BancorpSouth Inc., which recently extended merger deals with two community banks in northeast Louisiana and central Texas into 2017, matched Wall Street expectations for the quarter as the Tupelo, Miss.-based regional bank saw growth in loans, deposits, and consumer mortgages.

For the period ended Sept. 30, BancorpSouth reported third quarter net income of $37.8 million, or 40 cents per share, compared with net income of $34.3 million, or 36 cents share, in the same period a year ago.

A consensus of financial analysts surveyed by Thomson Reuters had expected the Mississippi-based regional bank to report third quarter earnings of 40 cents per share on revenue of $189.8 million.

“Our core financial results continue to improve quarter after quarter. We are extremely pleased with our front line efforts in producing deposit growth,” BancorpSouth Chairman and CEO Dan Rollins said in a statement. “We have consistently communicated to our teammates the importance of leading our sales efforts with deposits. Our balance sheet growth contributed to meaningful growth in net interest income during the quarter.”

Still, after more than two years, BancorpSouth has not completed merger pacts with Ouachita Bancshares Corp. in Monroe, La. and Central Community Corp., headquartered in Temple, Texas. Both deals were announced a few weeks apart in January 2014, the mergers were put on hold after the Federal Deposit Insurance Corp. notified the Tupelo that it was lowering its Community Reinvestment Act rating from “satisfactory” to “needs to improve.”

The FDIC downgrade occurred after the Consumer Financial Protection Bureau (CFPB) and the Department of Justice announced a joint action against Tupelo, Miss.-based BancorpSouth for discriminatory mortgage lending practices that harmed African Americans and other minorities. BancorpSouth was ordered to pay $4 million in direct loan subsidies to minority neighborhoods in Memphis, at least $800,000 for community programs, advertising, outreach, and credit repair, $2.78 million to African-American consumers who were unlawfully denied or overcharged for loans, and a $3 million penalty.

Rollins said the recent merger agreement extensions with Central Community Corporation and Ouachita Bancshares Corp.  into 2017 was a positive step forward for the bank.

“While we are disappointed in the length of time taken to close these transactions, we are pleased with the continued commitment of these two organizations to being a part of our team,” he said.

Ouachita Bancshares and its main subsidiary, Ouachita Independent Bank (OIB), operate 11 full-service banking offices along the I-20 corridor and has a loan production office in Madison, Miss. As of Sept. 30, OIB reported total assets of $688.1 million, total loans of $494.8 million and total deposits of $574.7 million. Central Community Corp.’s First State Bank operates 31 full-service banking offices in central Texas.  As the end of September, the Texas community bank reported total assets of $1.4 billion, total loans of $619.3 million and total deposits of $1.1 billion.

BancorpSouth, which has 236 full service branch locations as well as additional mortgage, insurance, and loan production offices in Alabama, Arkansas, Florida, Louisiana, Mississippi, Missouri, Tennessee and Texas, reported total assets were $14.6 billion at the end of the third quarter, compared with $13.8 billion a year ago. Loans and leases, net of unearned income, were $10.7 billion on Sept. 30, compared with $10.2 billion in the same period a year ago. Total deposits in the quarter were $11.6 billion, compared with $11.1 billion at September 30, 2015.

At the end of business Wednesday, BancorpSouth shares (NYSE: BXS) closed at $23.65, up 40 cents, or 1.7%. The bank’s shares have traded over the past 52 weeks from a high of $27.23 to a low of $18.69.