BancorpSouth, Inc. (NYSE:BXS) Q4 2014 Earnings Conference Call - Final Transcript

Jan 22, 2015 • 11:00 am ET

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BancorpSouth, Inc. (NYSE:BXS) Q4 2014 Earnings Conference Call - Final Transcript

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Presentation
Executive
Unidentified Speaker

bankers were successful in growing lower-cost funding during 2014.

Non-interest bearing demand, interest-bearing demand and savings deposits all grew over 5% in 2014. Now that the majority of our promotional CDs have either left or were repriced, we are hopeful that our focus and efforts on deposit growth will be more visible during 2015. We continue to hold our net interest margin in a tight range. Margin for the fourth quarter was 3.6% compared to 3.62% for the third quarter of '14. The mix and repricing of our deposits has helped us offset continued pressure on loan yields.

Moving on to non-financial highlights, our team worked diligently in the quarter to fine tune the enhancements made to our BSA and AML compliance program since last summer. Chris will speak more specifically to that progress momentarily. Consistent with the timeline communicated in last quarter's call, our primary regulators are currently on-site reviewing our enhanced program. We continue to believe the BSA AML cost projections, both the one-time cost and ongoing costs disclosed in last quarter's call are reasonable.

Finally, in December our Board of Directors authorized the repurchase of up to 6% or 5.764 million shares of our company's outstanding common stock. This authorization will give us another viable tool to use in our efforts to most effectively and efficiently manage capital.

I will now turn to Bill and allow him to discuss our financial results in more detail.

Executive
Bill Prater

Thanks, Dan. If you'll turn to slide 4, you'll see our summary income statement. Net income was $28.7 million or $0.30 per diluted share for the fourth quarter, essentially unchanged from the third quarter of 2014 and up $1 million or $0.01 per share from the fourth quarter of 2013.

Fourth quarter results were adversely impacted by the $3.4 million negative MSR valuation adjustment that Dan mentioned earlier which is a non-cash charge. There were no material items in the fourth quarter results that we consider to be non-operating. As a reminder, for comparative purposes, earnings for the third quarter of 2014 were adversely impacted by a one-time pre-tax charge of $3.1 million related to our BSA AML remediation efforts.

You'll also notice on this slide the continued growth in our net interest revenue. Net interest revenue increased to $106.4 million for the fourth quarter compared to $105.6 million for the third quarter of 2014 and $102.4 million for the fourth quarter of 2013. Our net interest margin was 3.60% for the fourth quarter, compared to 3.62% for the third quarter and 3.52% for the fourth quarter of 2013. Net loan growth as well as the repricing of higher-cost time deposits has continued to allow us to hold our net interest margin relatively steady. We believe there are still some additional opportunities to lower our cost of deposits.

The following two slides break our non-interest revenue and expense into further detail. If you'll turn to slide 5, you'll see a detail of our non-interest lines of business. Total non-interest revenue was $63.5