On Jul 1, 2014, we issued an updated research report on
). Lower expenses and higher net interest revenues were offset by
reduced non-interest revenues, which led first-quarter 2014
earnings to be in line with the Zacks Consensus Estimate.
Though the company reflected impressive expense management and
reduction in provision for credit losses, credible improvement in
the mortgage market was missing, thereby pressurizing fee income.
Notably, non-interest income declined 6.7% year over year in
BancorpSouth is trying to recoup revenues through strategic deals,
but has experienced a volatile trend in loans and deposits growth
over the past 5 years (2009-2013). Notably, following the
acquisition of the assets of GEM Insurance Agencies, LP in Dec
2013, the company again struck two cash cum stock merger deals in
Jan 2014 and an asset acquisition deal in Apr 2014.
The macroeconomic environment is recovering at a slow pace, with
uncertain prospects. This is compounded by changes within the
financial services industry as well as regulatory actions.
Therefore, amidst such a situation and unstable mortgage markets,
fee income growth is expected to remain limited in the near future.
For BancorpSouth, the Zacks Consensus Estimate for 2014 and 2015
remained stable at $1.33 and $1.57, respectively, over the last 60
days. BancorpSouth currently has a Zacks Rank #4 (Sell).
Stocks That Warrant a Look
Some better-ranked Southeast banks include
Capital Bank Financial Corp.
Independent Bank Group, Inc.
). All of these carry a Zacks Rank #2 (Buy).
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