TUPELO, Miss., April 20 /PRNewswire-FirstCall/ -- BancorpSouth,
Inc. (NYSE:BXS) today announced financial results for the quarter
ended March 31, 2009. Highlights of the first quarter include: --
Continuing solid profitability, with net income of $29.5 million,
or $0.35 per diluted share. -- Maintenance of the net interest
margin at 3.74 percent for the second consecutive quarter. -- A 5.2
percent increase in net loans and leases year over year. -- Strong
credit quality, with non-performing loans of 0.76 percent of loans
and leases and annualized net charge-offs of 0.54 percent of
average loans and leases. -- A more than doubling of mortgage
lending revenue, excluding the write down of the mortgage servicing
asset, compared with both the first and fourth quarters of 2008. --
An increase in the ratio of shareholders' equity to assets to 9.33
percent, the 11th consecutive comparable quarter increase. Summary
Results BancorpSouth's net income for the first quarter of 2009 was
$29.5 million, or $0.35 per diluted share, compared with $35.1
million, or $0.43 per diluted share, for the first quarter of 2008.
For the fourth quarter of 2008, net income was $16.8 million or
$0.20 per diluted share. Aubrey Patterson, Chairman and Chief
Executive Officer of BancorpSouth, commented, "For the first
quarter of 2009, BancorpSouth produced another strong performance
in an unusually challenging environment for both the financial
services industry and the national economy. This performance was
highlighted by solid profitability for the quarter, which
contributed to a further improvement in our already strong capital
structure. We continued to expand our portfolio of high quality
loans, which we again funded through an asset/liability management
strategy that enabled us to maintain our net interest margin. Our
credit quality remained strong on both an absolute basis and
relative to our industry peers. Despite the weak economy, our
credit quality metrics for the first quarter were consistent with
the manageable levels produced for the fourth quarter of 2008,
contributing to a significant reduction in our provision for credit
losses on a sequential-quarter basis. "We continued to complement
the controlled growth in our interest rate spread dependent
business with our diversified noninterest revenue streams, which,
in the aggregate, increased to 37.6 percent of total revenue for
the first quarter. Although first quarter insurance commission
revenue reflected soft market conditions, our mortgage originations
increased 51.2% for the first quarter of 2009 from the first
quarter of 2008, due primarily to historically low mortgage
interest rates. "Our first quarter results again demonstrated that
BancorpSouth, through its strong capital structure, asset quality
and revenue diversification, is well-positioned to deal with the
current economic environment. We have ongoing opportunities to
expand our market share, particularly in new markets entered
through the opening of four full-service branch bank offices so far
in 2009 and 17 new offices during 2008. We will continue to focus
on controlling our growth, maintaining our credit quality and
managing our expenses." Net Interest Revenue Net interest revenue
decreased 0.2 percent to $109.9 million for the first quarter of
2009 from $110.1 million for the first quarter of 2008 and 1.3
percent from $111.3 million for the fourth quarter of 2008. The
fully taxable equivalent net interest margin was 3.74 percent for
the first quarter of 2009, down from 3.79 percent for the first
quarter of 2008 and even with 3.74 percent for the fourth quarter
of 2008. Patterson remarked, "We are pleased with the consistency
evident in our first quarter net interest revenue and net interest
margin, in spite of weakening economic conditions and the decline
in interest rates since the first and fourth quarters of 2008. In
the past year, we have consistently implemented an asset/liability
management strategy focused on funding our loan growth with the
proceeds of maturing lower yielding investment securities,
short-term borrowings and growth in demand deposits. As a result,
we lowered interest expense in part by reducing other time deposits
by 14.6 percent at the end of the first quarter of 2009 from a year
earlier through more conservative pricing of these deposit
products. During this same period, demand deposits grew 11.9
percent. "We were modestly more aggressive in pricing longer term
time deposits during the first quarter of 2009 in order to extend
maturities with interest rates at historically low levels. As a
result, we produced a 0.6 percent increase in the average balance
of other time deposits for the quarter compared with the fourth
quarter of 2008 and a 4.5 percent increase in the balance of other
time deposits at the end of the first quarter from the end of 2008.
We also continued to benefit from increased demand deposits, which
rose by 3.3 percent at the end of the first quarter from the end of
2008. Because of this deposit growth, we reduced our short-term
borrowings during the first quarter, enhancing the already ample
liquidity represented by our borrowing capacity with the FHLB and
other banks." Deposit and Loan Activity Total assets at March 31,
2009 increased 2.3 percent to $13.5 billion from $13.2 billion at
March 31, 2008. Total deposits of $10.1 billion at March 31, 2009
increased 0.1 percent from March 31, 2008. Loans and leases, net of
unearned income, increased 5.2 percent to $9.7 billion at March 31,
2009 from $9.2 billion at March 31, 2008. "We are encouraged by the
steady loan growth we have experienced in a time of increased
competition for high quality loans," added Patterson. "We generated
a significant portion of this activity by increasing our business
in newer markets, validating our long-term strategy of expansion
into familiar, contiguous markets with diverse economies and
attractive growth dynamics. We also continue to believe that our
financial strength and stability, which differentiates us from many
industry peers, have contributed to the growth in our loans and
deposits." Provision for Credit Losses and Allowance for Credit
Losses For the first quarter of 2009, the provision for credit
losses was $14.9 million compared with $10.8 million for the first
quarter of 2008 and $17.8 million for the fourth quarter of 2008.
Annualized net charge-offs were 0.54 percent of average loans and
leases for the first quarter of 2009 compared with 0.29 percent for
the first quarter of 2008 and 0.57 percent for the fourth quarter
of 2008. Non-performing loans and leases increased to $73.8
million, or 0.76 percent of net loans and leases, at March 31, 2009
from $38.7 million, or 0.42 percent of net loans and leases, at
March 31, 2008 and from $64.0 million, or 0.66 percent of net loans
and leases, at December 31, 2008. The allowance for credit losses
increased to 1.39 percent of net loans and leases at March 31, 2009
compared with 1.29 percent at March 31, 2008 and 1.37 percent at
December 31, 2008. Patterson said, "Although we are not complacent
with the level of non-performing loans and net charge-offs for the
first quarter of 2009, our credit metrics continue to demonstrate
the high quality of our loan portfolio and should, we expect,
compare very favorably with industry averages. To support our
continued strong performance, we remain focused on early
identification and resolution of any emerging credit issues. We
also plan to remain well reserved against expected losses inherent
within the portfolio. Our provision for loan losses for the first
quarter was in excess of our net charge-offs, and we completed the
quarter with an allowance for credit losses totaling 1.8 times
non-performing loans at the end of the quarter and 2.6 times
annualized net charge-offs for the quarter." Noninterest Revenue
For the first quarter of 2009, noninterest revenue was $66.3
million, an increase of 0.1 percent from $66.2 million for the
first quarter of 2008. These results included a $3.4 million
pre-tax write down of the mortgage servicing asset for both the
first quarters of 2009 and 2008. In addition, results for the first
quarter of 2008 included a $2.8 million gain related to the sale of
Visa common stock. "The highlight of our noninterest revenue
performance for the first quarter was a 125.2 percent growth in
mortgage lending revenue, excluding the write down of the mortgage
servicing asset, compared with the first quarter of 2008 and a
172.1 percent increase from the fourth quarter of 2008," stated
Patterson. "As we experienced during the fourth quarter, much of
this growth represented new customers who came to BancorpSouth to
refinance their existing mortgages. Given the current low interest
rate environment, we believe our mortgage operations represent a
further growth opportunity. We also note that with the decline in
interest rates during the first quarter, the additional write down
of our mortgage servicing asset has lowered its carrying value to
0.82 percent of the unpaid principal balance of the loans being
serviced compared with 1.07 percent at March 31, 2008." Noninterest
Expense Noninterest expense increased 4.4 percent to $118.5 million
for the first quarter of 2009 from $113.5 million for the first
quarter of 2008 and 6.6 percent from $111.1 million for the fourth
quarter of 2008. BancorpSouth experienced a major increase in its
FDIC insurance premium for the first quarter, despite being
assessed at the FDIC's lowest rate because of BancorpSouth Bank's
strong credit quality and its "well capitalized" status under
federal regulations. In addition, nearly half of the increase in
noninterest expense compared with the first quarter of 2008 was
attributable to the opening of 17 full-service branch bank offices
during 2008 and four full-service branch offices in 2009. Capital
Management For the first quarter of 2009, BancorpSouth continued
its long history of maintaining a strong capital position and ample
liquidity, while continuing to maintain its cash dividends to
shareholders. The Company's shareholders' equity to asset ratio
increased to 9.33 percent at the end of the first quarter from 9.28
percent at the end of the first quarter of 2008 and 9.20 percent at
the end of 2008. The ratio of tangible equity to assets rose to
7.29 percent from 7.14 percent at the end of the first quarter of
2008 and 7.15 percent at the end of 2008. BancorpSouth remains a
"well capitalized" financial holding company as defined by federal
regulations. BancorpSouth paid cash dividends of $0.22 per share
during the first quarter and did not repurchase any shares of its
common stock. Summary Patterson said, "Our ability to strengthen
our capital structure and maintain strong credit quality during the
past three quarters of extraordinary turmoil in the financial
services industry continues to validate our decision to forego
participation in the U.S. Treasury's Capital Purchase Program under
TARP. We are fundamentally a strong financial institution, although
we remain cautious about our outlook for the future with an
appropriate focus on early identification and resolution of
emerging credit issues and on expense management. Consistent with
our performance for the first quarter, we will also continue to
leverage our strengths to gain market share, thereby enhancing our
ability to grow when the economic cycle begins to improve. Until
that time, we are prepared to manage any challenges we face due to
the economic downturn. We are confident that through our strong
capital structure, conservative management principles and uniquely
diversified market position across our mid-South franchise, we are
positioned to continue to operate profitability, to grow and to
build long-term shareholder value." Conference Call BancorpSouth
will conduct a conference call to discuss its first quarter 2009
results tomorrow, April 21, 2009, at 10:00 a.m. (Central Time).
Investors may listen via the Internet by accessing BancorpSouth's
website at http://www.bancorpsouth.com/. A replay of the conference
call will be available at BancorpSouth's website for at least two
weeks following the call. Forward-Looking Statements Certain
statements contained in this news release may not be based on
historical facts and are "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
These forward-looking statements may be identified by their
reference to a future period or periods or by the use of
forward-looking terminology such as "anticipate," "believe,"
"estimate," "expect," "may," "might," "will," "would," "could" or
"intend." These forward-looking statements include, without
limitation, statements relating to our credit quality, our loan
growth and growth in deposits, the management of our expenses,
leveraging our strengths to gain market share, our growth, the
quality of our loan portfolio compared to industry averages, our
loan loss reserves, growth opportunities resulting from our
mortgage operations and our financial strength and flexibility. We
caution you not to place undue reliance on the forward-looking
statements contained in this news release in that actual results
could differ materially from those indicated in such
forward-looking statements because of a variety of factors. These
factors may include, but are not limited to, changes in general
business or economic conditions or government fiscal and monetary
policies, volatility and disruption in national and international
financial markets, fluctuations in prevailing interest rates and
the ability of BancorpSouth to manage its assets and liabilities to
limit exposure to changing interest rates, the ability of
BancorpSouth to increase noninterest revenue and expand noninterest
revenue business, the ability of BancorpSouth to maintain credit
quality, changes in laws and regulations affecting financial
service companies in general, the ability of BancorpSouth to
compete with other financial services companies, the ability of
BancorpSouth to provide and market competitive services and
products, changes in BancorpSouth's operating or expansion
strategy, BancorpSouth's business model, geographic concentration
of BancorpSouth's assets, the ability of BancorpSouth to manage its
growth and effectively serve an expanding customer and market base,
the ability of BancorpSouth to achieve profitable growth and
increase shareholder value, the ability of BancorpSouth to attract,
train and retain qualified personnel, the ability of BancorpSouth
to identify, close and effectively integrate potential
acquisitions, the ability of BancorpSouth to expand geographically
and enter growing markets, changes in consumer preferences, other
factors generally understood to affect the financial results of
financial services companies, and other factors described from time
to time in BancorpSouth's filings with the Securities and Exchange
Commission. We undertake no obligation to update these
forward-looking statements to reflect events or circumstances that
occur after the date on which such statements were made.
BancorpSouth, Inc. is a financial holding company headquartered in
Tupelo, Mississippi, with approximately $13.5 billion in assets.
BancorpSouth Bank, a wholly-owned subsidiary of BancorpSouth, Inc.,
operates approximately 318 commercial banking, mortgage, insurance,
trust and broker/dealer locations in Alabama, Arkansas, Florida,
Louisiana, Mississippi, Missouri, Tennessee and Texas. BancorpSouth
Bank also operates an insurance location in Illinois. BancorpSouth,
Inc. Selected Financial Data Three Months Ended March 31, 2009 2008
(Dollars in thousands, except per share amounts) Earnings Summary:
Net interest revenue $109,876 $110,070 Provision for credit losses
14,945 10,811 Noninterest revenue 66,293 66,231 Noninterest expense
118,453 113,470 Income before income taxes 42,771 52,020 Income tax
provision 13,294 16,875 Net income $29,477 $35,145 Earning per
share: Basic $0.35 $0.43 Diluted $0.35 $0.43 Balance sheet data at
March 31: Total assets $13,458,364 $13,154,871 Total earning assets
12,240,161 11,909,702 Loans and leases, net of unearned income
9,712,823 9,233,023 Allowance for credit losses 134,632 119,301
Total deposits 10,091,974 10,086,201 Common shareholders' equity
1,255,659 1,221,135 Book value per share 15.11 14.83 Average
balance sheet data: Total assets $13,324,878 $13,100,524 Total
earning assets 12,187,151 11,947,759 Loans and leases, net of
unearned interest 9,695,475 9,213,294 Total deposits 9,908,432
10,090,342 Common shareholders' equity 1,238,971 1,199,457
Non-performing assets at March 31: Non-accrual loans and leases
$38,936 $14,709 Loans and leases 90+ days past due, still accruing
27,299 21,522 Restructured loans and leases, still accruing 7,581
2,493 Other real estate owned 47,450 26,623 Total non-performing
assets 121,266 65,347 Net charge-offs as a percentage of average
loans (annualized) 0.54% 0.29% Performance ratios (annualized):
Return on average assets 0.90% 1.08% Return on common equity 9.65%
11.78% Net interest margin 3.74% 3.79% Average shares outstanding -
basic 83,107,469 82,330,916 Average shares outstanding - diluted
83,234,105 82,533,799 BancorpSouth, Inc. Consolidated Balance Sheet
(Unaudited) March 31, % 2009 2008 Change (Dollars in thousands)
Assets Cash and due from banks $242,180 $290,246 (16.56%) Interest
bearing deposits with other banks 34,230 19,258 77.74%
Held-to-maturity securities, at amortized cost 1,330,810 1,523,994
(12.68%) Available-for-sale securities, at fair value 993,529
971,613 2.26% Loans and leases 9,759,787 9,280,659 5.16% Less:
Unearned income 46,964 47,636 (1.41%) Allowance for credit losses
134,632 119,301 12.85% Net loans and leases 9,578,191 9,113,722
5.10% Loans held for sale 168,769 161,814 4.30% Premises and
equipment, net 348,734 328,920 6.02% Accrued interest receivable
77,503 92,520 (16.23%) Goodwill 269,062 270,762 (0.63%) Other
assets 415,356 382,022 8.73% Total Assets $13,458,364 $13,154,871
2.31% Liabilities Deposits: Demand: Noninterest bearing $1,820,807
$1,722,914 5.68% Interest bearing 4,005,620 3,484,607 14.95%
Savings 719,676 725,494 (0.80%) Other time 3,545,871 4,153,186
(14.62%) Total deposits 10,091,974 10,086,201 0.06% Federal funds
purchased and securities sold under agreement to repurchase
1,256,649 784,532 60.18% Short-term Federal Home Loan Bank
borrowings and other short-term borrowing 210,000 430,000 (51.16%)
Accrued interest payable 22,841 34,203 (33.22%) Junior subordinated
debt securities 160,312 160,312 0.00% Long-term Federal Home Loan
Bank borrowings 286,302 288,939 (0.91%) Other liabilities 174,627
149,549 16.77% Total Liabilities 12,202,705 11,933,736 2.25%
Shareholders' Equity Common stock 207,811 205,913 0.92% Capital
surplus 216,138 200,742 7.67% Accumulated other comprehensive
income (loss) (23,620) 1,032 N/A Retained earnings 855,330 813,448
5.15% Total Shareholders' Equity 1,255,659 1,221,135 2.83% Total
Liabilities & Shareholders' Equity $13,458,364 $13,154,871
2.31% BancorpSouth, Inc. Consolidated Condensed Statements of
Income (Dollars in thousands, except per share data) (Unaudited)
Quarter Ended Mar-09 Dec-08 Sep-08 Jun-08 Mar-08 INTEREST REVENUE:
Loans and leases $129,209 $139,099 $144,393 $147,289 $159,184
Deposits with other banks 70 111 172 193 208 Federal funds sold and
securities purchased under agreement to resell 1 3 218 - 67
Held-to-maturity securities: Taxable 13,031 13,625 14,063 15,044
15,947 Tax-exempt 2,111 2,053 1,959 2,025 2,075 Available-for-sale
securities: Taxable 9,038 8,693 9,025 8,531 9,564 Tax-exempt 883
867 874 1,260 1,204 Loans held for sale 1,275 2,117 1,920 1,420
2,210 Total interest revenue 155,618 166,568 172,624 175,762
190,459 INTEREST EXPENSE: Interest bearing demand 12,248 15,924
14,214 12,938 17,257 Savings 936 1,080 1,366 1,291 1,543 Other time
25,833 28,293 33,660 39,778 46,860 Federal funds purchased and
securities sold under agreement to repurchase 572 2,175 4,308 3,321
5,195 FHLB Borrowings 2,823 4,537 6,277 5,359 6,285 Other 3,330
3,238 3,197 3,232 3,249 Total interest expense 45,742 55,247 63,022
65,919 80,389 Net interest revenue 109,876 111,321 109,602 109,843
110,070 Provision for credit losses 14,945 17,822 16,306 11,237
10,811 Net interest revenue, after provision for credit losses
94,931 93,499 93,296 98,606 99,259 NONINTEREST REVENUE: Mortgage
lending 7,652 (12,174) 3,270 9,507 1,543 Credit card, debit card
and merchant fees 8,348 8,409 8,512 8,846 7,976 Service charges
14,085 16,915 17,687 17,093 15,839 Trust income 2,209 2,328 2,507
2,261 2,234 Security gains (losses), net 5 (6,226) 100 199 78
Insurance commissions 22,645 18,752 21,779 21,462 24,668 Other
11,349 11,446 9,578 13,898 13,893 Total noninterest revenue 66,293
39,450 63,433 73,266 66,231 NONINTEREST EXPENSES: Salaries and
employee benefits 71,363 64,395 68,865 68,121 70,175 Occupancy, net
of rental income 9,999 10,307 10,340 9,716 9,483 Equipment 6,222
6,319 6,214 6,245 6,433 Other 30,869 30,072 30,640 27,982 27,379
Total noninterest expenses 118,453 111,093 116,059 112,064 113,470
Income before income taxes 42,771 21,856 40,670 59,808 52,020
Income tax expense 13,294 5,060 12,325 19,683 16,875 Net income
$29,477 $16,796 $28,345 $40,125 $35,145 Net income per share: Basic
$0.35 $0.20 $0.34 $0.49 $0.43 Diluted $0.35 $0.20 $0.34 $0.49 $0.43
BancorpSouth, Inc. Average Balances, Interest Income and Expense,
and Average Yields and Rates (Dollars in thousands) (Unaudited)
Quarter Ended March 31, 2009 Average Yield/ (Taxable equivalent
basis) Balance Interest Rate ASSETS Loans, loans held for sale, and
leases net of unearned income $9,873,692 $131,339 5.39%
Held-to-maturity securities: Taxable 1,146,772 13,141 4.65%
Tax-exempt 182,051 3,247 7.23% Available-for-sale securities:
Taxable 891,699 9,038 4.11% Tax-exempt 73,814 1,358 7.46%
Short-term investments 19,123 71 1.51% Total interest earning
assets and revenue 12,187,151 158,194 5.26% Other assets 1,277,538
Less: allowance for credit losses (139,811) Total $13,324,878
LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand - interest
bearing $4,090,821 $12,248 1.21% Savings 697,639 936 0.54% Other
time 3,419,180 25,833 3.06% Short-term borrowings 1,588,229 959
0.24% Junior subordinated debt 160,312 2,955 7.48% Long-term debt
286,306 2,811 3.98% Total interest bearing liabilities and expense
10,242,487 45,742 1.81% Demand deposits - noninterest bearing
1,700,792 Other liabilities 142,628 Total liabilities 12,085,907
Shareholders' equity 1,238,971 Total $13,324,878 Net interest
revenue $112,452 Net interest margin 3.74% Net interest rate spread
3.45% Interest bearing liabilities to interest earning assets
84.04% Net interest tax equivalent adjustment $2,576 BancorpSouth,
Inc. Average Balances, Interest Income and Expense, and Average
Yields and Rates (Dollars in thousands) (Unaudited) Quarter Ended
March 31, 2008 Average Yield/ (Taxable equivalent basis) Balance
Interest Rate ASSETS Loans, loans held for sale, and leases net of
unearned income $9,356,790 $162,267 6.97% Held-to-maturity
securities: Taxable 1,406,000 15,947 4.56% Tax-exempt 191,754 3,192
6.69% Available-for-sale securities: Taxable 864,368 9,563 4.45%
Tax-exempt 102,658 1,853 7.26% Short-term investments 26,189 275
4.22% Total interest earning assets and revenue 11,947,759 193,097
6.50% Other assets 1,273,866 Less: allowance for credit losses
(121,101) Total $13,100,524 LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits: Demand - interest bearing $3,485,167 $17,257 1.99%
Savings 709,403 1,543 0.88% Other time 4,291,257 46,860 4.39%
Short-term borrowings 1,247,203 9,015 2.91% Junior subordinated
debt 160,312 3,184 7.99% Long-term debt 249,391 2,530 4.08% Total
interest bearing liabilities and expense 10,142,733 80,389 3.19%
Demand deposits - noninterest bearing 1,604,515 Other liabilities
153,819 Total liabilities 11,901,067 Shareholders' equity 1,199,457
Total $13,100,524 Net interest revenue $112,708 Net interest margin
3.79% Net interest rate spread 3.31% Interest bearing liabilities
to interest earning assets 84.89% Net interest tax equivalent
adjustment $2,638 DATASOURCE: BancorpSouth, Inc. CONTACT: L. Nash
Allen, Jr., Treasurer and Chief Financial Officer, +1-662-680-2330,
or Gary C. Bonds, Executive Vice President and Controller,
+1-662-680-2332 Web Site: http://www.bancorpsouth.com/
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