TUPELO – For the first time in two years, BancorpSouth is raising its dividend.
The Tupelo-based bank said it would pay a quarterly dividend of 5 cents a share on Oct. 1.
It is the company’s first increase since reducing the dividend to 1 cent a share in the second quarter of 2011.
BancorpSouth CEO said the dividend was “consistent with current industry dividend payout ratios, which measure the size of a dividend payment compared to the company’s net income.”
In a statement, Rollins, who was named CEO last November, said the bank’s board of directors reflected the “clearly understood and shared the desire to enhance our dividend and return more capital to our shareholders. Our decision reflects the confidence that we have in the strength of our enterprise risk management system, the strength of our core capital base and the belief that our strategic plan will continue to produce profitable growth.”
Rollins said the bank’s efforts this year to reduce expenses and improve efficiency, along with moves to improve asset quality and to emphasize growth was encouraging.
The company noted that at the end of the second quarter of this year, it has achieved quarter-over-quarter loan growth for the first time in three years, while its earnings benefitted from strong performances from a wide range of noninterest lines of business.
BancorpSouth reported net income of $20.8 million, or 22 cents a share for the second quarter of this year.
Earlier this year, the company completed a voluntary early retirement program that reduced its workforce by about 5 percent, which should save the company about $9 million a year. Also, a $125 million trust preferred securities redemption is expected to save another $9 million annually.
BancorpSouth (NYSE: BXS) shares were unchanged Wednesday, closing at $19.68. In after-hours trading, were up nearly 1 percent.