On Dec 15, 2015, we issued an updated research report on BancorpSouth, Inc. BXS. Shares of this Tupelo, MS-based commercial banking and financial services provider has gained nearly 10% year to date.
In recent quarters, BancorpSouth has witnessed increasing net interest income supported by steady loan growth, benefiting from its diverse footprint across regions including Mississippi, Tennessee, Alabama, Arkansas, Texas, and Illinois. Notably, loans are predicted to grow at a consistent pace in the quarters ahead as well.
Also, the company’s time deposits continue to trend down, while lower cost demand and saving deposits have been increasing over the past several quarters.
Besides, the company continues to maintain a strong capital position, improving credit quality while remaining focused on expense management.
Additionally, driven by sound liquidity, BancorpSouth raised its quarterly cash dividend by 33% in July 2015. Also, as of Sep 30, 2015, the company is authorized to repurchase approximately 2.9 million shares remaining under its share buyback program announced in December 2014. Undoubtedly, the company's efforts in improving shareholder value enhanced investors' confidence in the stock.
However, we remain cautious owing to net interest margin pressure and the prevailing stringent regulatory landscape. Further, BancorpSouth’s long-awaited merger deals with Central Community Corporation and Ouachita Bancshares Corp. were delayed for the second time in June 2015. Still subject to regulatory approvals, the deals are expected to close on Dec 31, 2015. While the mergers will likely prove beneficial to the company’s growth upon completion, recurring postponement hints at compliance-related issues.
Over the past 30 days, the Zacks Consensus Estimate remained stable at $1.47 per share and $1.64 per share, for 2015 and 2016, respectively. BancorpSouth currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in the finance space include Franklin Financial Network, Inc. FSB, National Bank Holdings Corp. NBHC and American River Bankshares AMRB. All three stocks sport a Zacks Rank #1 (Strong Buy).
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