) enhanced its quarterly cash dividend by 400% to 5 cents per
share. The increased dividend will be paid on Oct 1, 2013 to
shareholders of record as of Sep 13, 2013.
This reflects the company's commitment to return value to
shareholders with its strong cash generation capabilities.
Notably, the latest rise in cash dividend by BancorpSouth is the
first increase since the quarterly dividend payment was reduced
to 1 cent per share in second-quarter 2011.
The dividend increase follows the company's accomplishments in
the first half of 2013. Notably, during the June quarter-end,
BancorpSouth's earnings benefited from higher non-interest
revenues. Moreover, loan loss provision levels stabilized in the
quarter with a number of credit quality metrics exhibiting a
BancorpSouth is working rigorously on its efficiency initiatives
to reduce costs. Moving forward with its strategic plan,
recently the company announced a Voluntary Early Retirement
Program and redemption of trust preferred securities (TruPS)
worth $125 million, completed in early August.
Notably, fully phased-in annual pre-tax savings of about $9
million or 6 cents per share, net of tax is anticipated from the
retirement program. Moreover, due to TruPS redemption, annual
interest expenses are expected to go down by $9 million or 6
cents per share, net of tax.
In the first half of 2013, BancorpSouth paid $1.9 million as cash
dividends. Cash and due from banks exiting the year was $268.6
We are encouraged by the better-than-expected results at
BancorpSouth. Along with its robust mortgage lending business
performance, the company benefited from numerous opportunistic
acquisitions. Capital deployment activities also serve as
positive catalysts. Further, TruPS redemption is viewed as
a positive step for the banks, enabling them to bring down
interest expenses, as these securities demand higher rates than
other securities and often the banks replace TruPS with equity or
other low-cost debt.
While concerns remain over the continuation of the low interest
rate environment and its adverse impact on NIM, we believe that
the improvement in the company's fee-based business would help it
navigate through the current cycle.
BancorpSouth currently carries a Zacks Rank #2 (Buy). Among other
Farmers Capital Bank Corporation
Middleburg Financial Corporation
SY Bancorp Inc.
) are worth considering with a Zacks Rank #1 (Strong Buy).
BANCORPSOUTH (BXS): Free Stock Analysis
FARMERS CAP KY (FFKT): Free Stock Analysis
MIDDLEBURG FINL (MBRG): Free Stock Analysis
S Y BANCORP INC (SYBT): Free Stock Analysis
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