BancorpSouth (BXS) Tops Q2 EPS by 23c

July 20, 2020 4:33 PM EDT

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BancorpSouth (NYSE: BXS) reported Q2 EPS of $0.57, $0.23 better than the analyst estimate of $0.34.

Highlights for the second quarter of 2020 included:

  • Achieved quarterly net income available to common shareholders of $58.8 million, or $0.57 per diluted common share, and net operating income available to common shareholders – excluding MSR – of $60.9 million, or $0.59 per diluted common share.
  • Recorded provision for credit losses of $20.0 million primarily as a result of the continued deterioration in certain economic factors included in the Company's allowance for credit losses methodology resulting from the coronavirus ("COVID-19") pandemic.
  • Generated $102.1 million in pre-tax pre-provision net revenue, or 1.81 percent of average assets on an annualized basis, which represents an increase from 1.73 percent for the second quarter of 2019 and an increase from 1.74 percent for the first quarter of 2020.
  • Originated and funded approximately 14,500 loans totaling approximately $1.2 billion under the U.S. Small Business Association ("SBA") Paycheck Protection Program (the "PPP").
  • Generated total deposit growth of $2.3 billion for the quarter; excluding the estimated impact of additional customer liquidity associated with the PPP loans and government stimulus payments, deposit growth totaled approximately $1.0 billion, or 24 percent on an annualized basis.
  • Record mortgage production volume of $989.0 million contributed to mortgage production and servicing revenue of $31.9 million; earnings were negatively impacted by a pre-tax mortgage servicing rights ("MSR") valuation adjustment of $2.4 million.
  • Maintained strong regulatory capital metrics; estimated total risk-based capital of 13.79 percent at June 30, 2020 compared to 11.28 percent at June 30, 2019.

"We are very pleased with our second quarter financial results, particularly in light of the economic and industry headwinds associated with the continuation of the COVID-19 pandemic," remarked Dan Rollins, Chairman and Chief Executive Officer. "We had hoped to be taking steps toward a return to normal operations by now but COVID-19 case counts have continued to rise across our footprint. Protecting the health of both our teammates and customers has been, and will continue to be, our top priority. While we have not yet seen increases in charge-offs or significant deterioration in other credit quality metrics, we did record a provision for credit losses of $20.0 million as a result of the deterioration of certain economic data points within our reserve methodology compared to March 31, 2020. Outside of the additional provisioning, our Company continues to perform at a very high level. We generated $102.1 million in pre-tax pre-provision net revenue for the quarter, or 1.81 percent of average assets on an annualized basis."

"As we look more specifically at our second quarter performance, our efforts were largely focused on assisting our customers with the SBA's Paycheck Protection Program. A tremendous effort was required of all of our teammates to originate and fund approximately 14,500 loans totaling $1.2 billion in a very short period of time. The additional customer liquidity created as a result of the PPP and other government stimulus programs contributed to tremendous deposit growth this quarter. Excluding the estimated impact of these programs, deposit growth was very strong totaling approximately $1.0 billion, or 24 percent on an annualized basis. Finally, our mortgage operation had a record quarter. Production volume totaled almost $1 billion, which contributed to total production and servicing revenue of $31.9 million. While elevated refinance activity has certainly benefitted our mortgage production, new purchase money volume continues to hold strong."

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



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