It has been about a month since the last earnings report for BancorpSouth . Shares have added about 2.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is BancorpSouth due for a pullback? 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 catalysts.
BancorpSouth Q4 Earnings Beat Estimates, Revenues Rise
BancorpSouth delivered a fourth-quarter 2020 positive earnings surprise of 7.8% on higher interest income. Net operating earnings of 69 cents per share beat the Zacks Consensus Estimate of 64 cents. Also, the bottom line compares favorably with 65 cents reported in year-ago quarter.
Higher net revenues, aided by increase in interest income and non-interest revenues, acted as a tailwind. Moreover, higher deposit balances supported the results. However, elevated provisions and shrinking net interest margins were major drags.
The company’s net income for the December quarter amounted to $68.8 million or 65 cents per share, up from the $65.8 million or 63 cents reported in the year-ago quarter.
In full-year 2020, BancorpSouth reported net income of $228.1 million or $2.12 per share compared with $234.3 million or $2.30 in 2019.
Revenues & Deposits Climb, Expenses Rise
In 2020, the company reported revenues of $1.03 billion, which matched with the consensus estimate. Also, the figure rose 10.4% year over year.
Net revenues in the reported quarter increased 4.2% year over year to $255.8 million. Moreover, the top line surpassed the Zacks Consensus Estimate of $255.4 million.
Net interest revenues in the quarter came in at $176.9 million, up 3.6% year over year. Fully-taxable equivalent net interest margin (NIM) was 3.29%, contracting 47 basis points (bps).
Non-interest revenues climbed 5.5% year over year to $78.8 million. Also, the figure included a positive mortgage servicing rights valuation adjustment of $0.2 million. This upswing mainly resulted from rise in mortgage banking along with credit card, debit card and merchant fees.
Non-interest expenses were $167.9 million, up 3.4% year over year. This upside stemmed primarily from higher occupancy expenses and a pension settlement expense reported during the quarter.
As of Dec 31, 2020, total deposits were $19.6 billion, up 1.8% sequentially, while loans and leases, net of unearned income, deteriorated 1.1% to $15 billion.
Credit Quality Deteriorates
Non-performing loans and leases were 0.81% of net loans and leases as of Dec 31, 2020, up from 0.79% as of Dec 31, 2019. Also, non-performing assets were $132.6 million, up 12.1% from the prior-year quarter. In addition, in the fourth quarter, the company recorded $5 million in provision for credit losses against no provisions reported in the year-ago quarter.
However, allowance for credit losses to net loans and leases was 1.74% as of Dec 31, 2020, up 89 bps year on year.
Capital Position
As of Dec 31, 2020, tier 1 capital and tier 1 leverage capital ratios were 11.70% and 8.63% compared with the 10.60% and 9.69%, respectively, recorded at the end of the prior-year quarter. The ratio of tangible shareholders' equity to tangible assets contracted 29 bps to 8.63%.
However, ratio of total shareholders' equity to total assets was 11.72% at the end of the fourth quarter, down from 12.75% as of Dec 31, 2019.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 10.07% due to these changes.
VGM Scores
At this time, BancorpSouth has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been 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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Why Is BancorpSouth (BXS) Up 2.2% Since Last Earnings Report?
It has been about a month since the last earnings report for BancorpSouth . Shares have added about 2.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is BancorpSouth due for a pullback? 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 catalysts.
BancorpSouth Q4 Earnings Beat Estimates, Revenues Rise
BancorpSouth delivered a fourth-quarter 2020 positive earnings surprise of 7.8% on higher interest income. Net operating earnings of 69 cents per share beat the Zacks Consensus Estimate of 64 cents. Also, the bottom line compares favorably with 65 cents reported in year-ago quarter.
Higher net revenues, aided by increase in interest income and non-interest revenues, acted as a tailwind. Moreover, higher deposit balances supported the results. However, elevated provisions and shrinking net interest margins were major drags.
The company’s net income for the December quarter amounted to $68.8 million or 65 cents per share, up from the $65.8 million or 63 cents reported in the year-ago quarter.
In full-year 2020, BancorpSouth reported net income of $228.1 million or $2.12 per share compared with $234.3 million or $2.30 in 2019.
Revenues & Deposits Climb, Expenses Rise
In 2020, the company reported revenues of $1.03 billion, which matched with the consensus estimate. Also, the figure rose 10.4% year over year.
Net revenues in the reported quarter increased 4.2% year over year to $255.8 million. Moreover, the top line surpassed the Zacks Consensus Estimate of $255.4 million.
Net interest revenues in the quarter came in at $176.9 million, up 3.6% year over year. Fully-taxable equivalent net interest margin (NIM) was 3.29%, contracting 47 basis points (bps).
Non-interest revenues climbed 5.5% year over year to $78.8 million. Also, the figure included a positive mortgage servicing rights valuation adjustment of $0.2 million. This upswing mainly resulted from rise in mortgage banking along with credit card, debit card and merchant fees.
Non-interest expenses were $167.9 million, up 3.4% year over year. This upside stemmed primarily from higher occupancy expenses and a pension settlement expense reported during the quarter.
As of Dec 31, 2020, total deposits were $19.6 billion, up 1.8% sequentially, while loans and leases, net of unearned income, deteriorated 1.1% to $15 billion.
Credit Quality Deteriorates
Non-performing loans and leases were 0.81% of net loans and leases as of Dec 31, 2020, up from 0.79% as of Dec 31, 2019. Also, non-performing assets were $132.6 million, up 12.1% from the prior-year quarter. In addition, in the fourth quarter, the company recorded $5 million in provision for credit losses against no provisions reported in the year-ago quarter.
However, allowance for credit losses to net loans and leases was 1.74% as of Dec 31, 2020, up 89 bps year on year.
Capital Position
As of Dec 31, 2020, tier 1 capital and tier 1 leverage capital ratios were 11.70% and 8.63% compared with the 10.60% and 9.69%, respectively, recorded at the end of the prior-year quarter. The ratio of tangible shareholders' equity to tangible assets contracted 29 bps to 8.63%.
However, ratio of total shareholders' equity to total assets was 11.72% at the end of the fourth quarter, down from 12.75% as of Dec 31, 2019.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 10.07% due to these changes.
VGM Scores
At this time, BancorpSouth has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been 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.