BancorpSouth (BXS) Misses Q1 EPS by 8c

April 20, 2020 4:38 PM EDT

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BancorpSouth (NYSE: BXS) reported Q1 EPS of $0.25, $0.08 worse than the analyst estimate of $0.33. Revenue for the quarter came in at $202.06 million versus the consensus estimate of $243.88 million.

"Our first quarter efforts were obviously largely focused on navigating the health, logistical and economic impacts of the COVID-19 pandemic," remarked Dan Rollins, Chairman and Chief Executive Officer. "We have worked diligently to create an environment that protects the health and wellbeing of our teammates while also meeting the needs of our customers. Although it is still too early to predict the ultimate impact of the pandemic on our customers and loan portfolio, particularly in light of the government stimulus programs, we recorded a provision for credit losses of $46.0 million for the quarter primarily as a result of the deterioration of economic factors included in our reserve methodology. Otherwise, we continue to be pleased with our financial performance given the current operating environment. We reported pre-tax pre-provision net revenue of $91.7 million for the quarter, or 1.74 percent of average assets on an annualized basis, which is actually an improvement over both the first and fourth quarters of 2019."

"As we look more specifically at our first quarter performance, our mortgage team had a great quarter, generating $477 million in total production. Refinance activity has historically helped our Company during periods of declining rates, and the first quarter was no different as mortgage production and servicing income totaled $20.6 million for the quarter. The rate environment certainly had a negative impact on our net interest margin and we expect this trend to continue into the second quarter. Finally, we deployed a portion of the $470 million in capital that we raised late last year through the closing of our merger with Texas First as well as the repurchase of 3.3 million shares of our common stock. With that said, our regulatory capital metrics remain strong. As of the end of the quarter, each ratio was in excess of 300 basis points above the regulatory prescribed 'well-capitalized' levels. We will continue to monitor the stability of the economy very closely with respect to any potential future share repurchase activity."

The Company is a participant in the U.S. Small Business Association ("SBA") Preferred Lender Program. The Company is actively assisting its customers to obtain the stimulus aid provided by the CARES Act, including the Paycheck Protection Program ("PPP"). The Company has received approval for and is currently in the process of funding approximately 8,500 loans totaling $1.0 billion under the PPP program. The Company continues to take applications and is prepared to process them should additional funding be approved. Rollins added, "When you look at our balance sheet composition and footprint, small businesses are at the core of who we are as a company. They are critical to the economic success of the geographies we serve. Our relationship officers, credit administrators, and operational support staff have worked tirelessly over the past few weeks to accomplish what seemed to be an insurmountable task. The customer experience during this unprecedented time provides a real opportunity to broaden and deepen relationships."

For earnings history and earnings-related data on BancorpSouth (BXS) click here.



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