BancorpSouth (BXS) Down 3.3% Since Last Earnings Report: Can It Rebound?

“Beware of the scribes, who like to walk around in long robes, and love greetings in the marketplaces and the best seats in the synagogues and the places of honor at feasts, who devour widows’ houses and for a pretense make long prayers.”

They will receive the greater condemnation” (Luke 20:46-47). Here the sin is not the audible nature of the prayer but its pretentiousness. Jesus condemns the hypocrisy of pretending to have a relationship with God while oppressing the very people He loves.

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A month has gone by since the last earnings report for BancorpSouth (BXS). Shares have lost about 3.3% in that time frame, under-performing the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is BancorpSouth due for a breakout? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

BancorpSouth Q1 Earnings Top Estimates, Costs Up

BancorpSouth reported first-quarter 2019 net operating earnings of 56 cents per share, surpassing the Zacks Consensus Estimate of 54 cents. Also, the bottom line increased 3.7% from the prior-year quarter.

Results were driven by an improvement in net interest revenues, net interest margin and lower provisions. However, non-interest income and higher expenses were headwinds.

The company’s net income for the first quarter amounted to $51.6 million compared with $53.5 million reported in the year-ago quarter.

Revenues Decline, Expenses Rise, Deposits Improve

Net revenues for the reported quarter decreased slightly year over year to $216.8 million. Further, the revenue figure missed the Zacks Consensus Estimate of $221.2 million.

Net interest revenues for the quarter came in at $152.6 million, up 10.5% year over year. Fully-taxable equivalent NIM was 3.86%, expanding 19 basis points (bps) year over year.

Non-interest revenues decreased 18.6% year over year to $64.2 million. However, the figure included a negative mortgage servicing rights valuation adjustment of $4.9 million. The downside mainly resulted from lower mortgage banking and other revenues.

Non-interest expenses came in at $150 million, up 1.5% from the year-ago quarter. The upswing stemmed from the impact of elevated salaries and employee benefits, net occupancy, equipment and deposit insurance assessments.

As of Mar 31, 2019, total deposits were $14.7 billion, up 4.4% sequentially, while loans and leases, net of unearned income, edged down to $13.1 billion.

Credit Quality: A Mixed Bag

Non-performing loans and leases were 0.67% of net loans and leases as of Mar 31, 2019, up from 0.66% as of Mar 31, 2018. Annualized net charge-offs, as a percentage of average loans and leases, increased to 0.12% from net recoveries of 0.01% recorded as of Mar 31, 2018. However, allowance for credit losses to net loans and leases was 0.89%, marginally down from 0.97% registered in the year-ago quarter.

Non-performing assets were nearly $97 million, up from the prior-year quarter’s $90.9 million. However, the company recorded provision for credit losses of $0.5 million compared with the $1 million reported in the year-ago quarter.

Strong Capital Ratios

As of Mar 31, 2019, tier I capital and tier I leverage capital was 10.79% and 11.60%, down from 11.30% and 12.18%, respectively, witnessed at the end of the prior-year quarter.

The ratio of its total shareholders’ equity to total assets was 12.16% at the end of the Mar-end quarter, up from 11.99% as of Mar 31, 2018. However, the ratio of tangible shareholders’ equity to tangible assets shrunk 28 bps to 8.41%.

Share Repurchases

During the reported quarter, the company repurchased 1 million common shares at a weighted average price of $27.60 per share.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

Currently, BancorpSouth has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren’t focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, BancorpSouth has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.



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What’s in Bancorpsouth Bank (NYSE:BXS) After Decline in Shorted Shares?

Investors sentiment is 0 in 2018 Q4. Its the same as in 2018Q3. It is flat, as 0 investors sold BancorpSouth Bank shares while 0 reduced holdings. only 0 funds opened positions while 1 raised stakes. 19,260 shares or 101.27% more from 9,569 shares in 2018Q3 were reported.
Fruth Invest holds 0.12% or 9,500 shares in its portfolio. Gemmer Asset Mgmt Ltd Liability invested in 0% or 130 shares.

The stock of Bancorpsouth Bank (NYSE:BXS) registered a decrease of 2.38% in short interest. BXS’s total short interest was 4.93 million shares in May as published by FINRA. Its down 2.38% from 5.05M shares, reported previously. With 609,800 shares average volume, it will take short sellers 8 days to cover their BXS’s short positions.

The stock increased 0.49% or $0.14 during the last trading session, reaching $28.85. About 460,344 shares traded. BancorpSouth Bank (NYSE:BXS) has risen 1.65% since May 17, 2018 and is uptrending. It has underperformed by 2.72% the S&P500.

BancorpSouth, Inc. operates as a financial holding firm for BancorpSouth Bank that provides commercial banking and financial services to individuals and small-to-medium size businesses. The company has market cap of $2.92 billion. It offers various deposit products, including interest and noninterest bearing demand deposits, and saving and other time deposits. It has a 13.05 P/E ratio. The firm also provides commercial loans, including term loans, lines of credit, equipment and receivable financing, and agricultural loans; a range of short-to-medium term secured and unsecured commercial loans to businesses for working capital, business expansion, and the purchase of equipment and machinery; and construction loans to real estate developers for the acquisition, development, and construction of residential subdivisions.

More notable recent BancorpSouth Bank (NYSE:BXS) news were published by: Zacks.com which released: “Why BancorpSouth (BXS) is a Great Dividend Stock Right Now – Zacks.com” on April 08, 2019, also Seekingalpha.comwith their article: “BancorpSouth Bank’s (BXS) CEO James Rollins on Q1 2018 Results – Earnings Call Transcript – Seeking Alpha” published on April 19, 2018, Seekingalpha.com published: “BancorpSouth completes merger with Icon Capital – Seeking Alpha” on October 01, 2018. More interesting news about BancorpSouth Bank (NYSE:BXS) were released by: Seekingalpha.com and their article: “BancorpSouth Inc 2018 Q4 – Results – Earnings Call Slides – Seeking Alpha” published on January 24, 2019 as well as Prnewswire.com‘s news article titled: “BancorpSouth Receives Regulatory Approval of its Mergers with Dallas, Texas-based Casey Bancorp, Inc. and Jackson, Alabama-based Merchants Trust, Inc. – PRNewswire” with publication date: March 18, 2019.

BancorpSouth Bank (NYSE:BXS) Ratings Chart

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A Long Journey Home

A book about a fourteen-year-old boy, the son of a Baptist pastor, thrown from his home at age 14. This boy, StevieRay, would later become a multimillionaire. Now he gives orphans a second chance at life.