BancorpSouth reported a net loss of $494,000 for the first quarter.
The loss represented a penny per share compared with net income of $8.4 million, or 10 cents per share, for the first quarter of 2010.
Analysts for Thomson Reuters had projected earnings of 9 cents per share.
The “break-even” financial performance, said company Chairman and CEO Aubrey Patterson, “was primarily the result of an increase in the provision for credit losses of $10.2 million from the fourth quarter to $53.5 million, a decline in mortgage lending revenue of $10.5 million from the fourth quarter and an increase in salaries and benefits of $4.4 million consisting primarily of increases in FICA taxes, 401(k) contributions and medical insurance expense.”
Net interest revenue for the quarter was $109.4 million, a 2.2 percent decrease from the year-ago quarter. Net interest margin was 3.69 percent, compared with 3.88 percent a year ago and 3.59 percent for the fourth quarter of 2010.
Total assets at the end of the quarter were $13.5 billion, an increase of 2.4 percent. Total deposits were $11.5 billion, a 4.3 percent increase. Loans and leases, net of unearned income, were $9.2 billion a 5.1 percent decline.
CAD loan contribution
The CAD loan portfolio, which decreased $340.4 million, or 23.8 percent, accounted for 69 percent of the decline in net loans and leases. Excluding the impact of the CAD loan portfolio, net loans and leases declined $156.6 million, or 1.6 percent.
The provision for credit losses in the first quarter was $53.5 million, compared with $43.5 million for the first quarter of 2010 and $43.3 million for the fourth quarter of 2010. Annualized net charge-offs were 2.24 percent of average loans and leases for the first quarter of 2011, compared with 1.26 percent for the first quarter of 2010 and 2.19 percent for the fourth quarter of 2010.
Non-performing loans were $425.0 million, or 4.61 percent of net loans and leases, for the period, compared to $235.7 million, or 2.43 percent of net loans and leases for the year-ago quarter and $394.4 million, or 4.23 percent of net loans and leases, on Dec. 31. The allowance for credit losses was 2.15 percent of net loans and leases, compared to 1.95 percent a year ago and 2.11 percent at the end of 2010.
Noninterest revenue was $68.3 million for the quarter, compared with $63.3 million for the first quarter of 2010. BancorpSouth’s mortgage production and servicing operations accounted for the largest component of this growth, with revenue for the first quarter of 2011 of $7.6 million, compared with revenue of $5 million a year earlier Mortgage origination volume for the first quarter of 2011 was $202.8 million, compared with $207.4 million for the first quarter of 2010.
“While the first quarter of 2011 did not produce the bottom-line financial results we would have liked to have seen as we entered the new year, pre-tax, pre-provision earnings for the quarter were $47.7 million and reflected solid performance from our core operations,” Patterson said.
BancorpSouth announced its results after the close of markets on Monday. Shares rose 31 cents to close at $15.32 but fell in after-hours trading.
Dennis Seid/NEMS Daily Journal