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First quarter 2001 off to a healthy start

Mississippi’s public banks report robust year in 2000

Despite an economic downturn, most of Mississippi’s public banks — and regional public banks with a significant presence in the state — ended 2000 on a financially healthy note and are off to a good start in 2001.

AmSouth rebounded a year after reporting a net loss; Britton & Koontz expanded into new markets; Hancock Bank announced plans to acquire The Lamar Bank; NBC reached a milestone, surpassing $1 billion in assets in 2000; and SouthTrust reported record earnings per share for the 10th consecutive year.

BancorpSouth, Merchants & Farmers Bank and The People’s Bank marked 2000 as a rebuilding year; Trustmark reported record earnings; and Union Planters ended 2000 with record cash operating earnings.

Bank executives commented on fourth quarter 2000 earnings and the outlook for first quarter 2001 earnings:

AmSouth

Birmingham-based AmSouth Bancorporation (NYSE:ASO) reported fourth quarter earnings of $126.6 million, or $.34 per share, a year after reporting a net loss of $62.6 million, or $.16 cents per share, for the same period, which included merger-related and loan impairment charges of $324.7 million.

“These results reflect our efforts to build a solid foundation for renewed growth in this challenging economic environment,” said Dowd Ritter, chairman, president and CEO of AmSouth.

AmSouth’s fourth quarter performance resulted in a return on average equity of 18.26%, a return on average assets of 1.3% and an efficiency ratio of 52.25%. Fourth quarter 2000 earnings included approximately $.01 per share benefit from leveraged lease transactions, approximately $.02 in gains from the sale of branches in Kentucky and Virginia — announced in the third quarter of 2000 — and an additional loan loss provision of $21 million, or approximately $.03 per share.

Even though AmSouth is a regional bank holding company with $38.9 billion in assets, 600 branch offices and operations in Alabama, Florida, Georgia, Louisiana, Mississippi and Tennessee, its Magnolia State roots run deep.

Deposit Guaranty Bank, a Mississippi-owned and operated bank established in early 1900s was sold to First American Corp. in 1998. The following year, AmSouth acquired First American Corp. The bank continues to rank third in deposit share in Mississippi, with more than $3.2 billion, or 11.06% of total deposit base, in deposits, according to the FDIC Summary of Deposits dated June 2000. Approximately 88 AmSouth branches are located in more than 20 Mississippi markets, employ approximately 1,000 Mississippians and serve more than 179,000 households in the state.

AmSouth declined to comment on first quarter 2001 earnings, stating that “as a matter of policy, we don’t provide guidance on earnings or business conditions between our quarterly earnings announcements,” said a spokesperson.

BancorpSouth

Fourth quarter and year-end 2000 earnings were down from 1999 for Tupelo-based BancorpSouth (NYSE: BXS), a financial services company with $9 billion in assets and the holding company for BancorpSouth Bank, which provides service from more than 250 branches in Alabama, Arkansas, Louisiana, Mississippi, Tennessee and Texas.

For the year ended Dec. 31, 2000, net income was $74.4 million, or $.88 per share, compared to $102.4 million, or $1.19 per share for 1999. Net operating income, excluding merger-related items totaled $96.9 million, or $1.14 per share, compared to $103.2 million, or $1.20 per share, for 1999. For the fourth quarter 2000, net income, including merger-related items, was $12.3 million, or $.15 per share, compared to $26.4 million, or $.31 per share in the comparable period of 1999. Net operating income, excluding merger-related items, was $22.8 million, or $.27 cents per share, versus $26.5 million, or $.31 per share for the same quarter in 1999.

“Compressed spreads, increased operating expenses and one-time charges relating to the restructuring of the investment portfolio impacted fourth quarter and year-end 2000 earnings,” said Aubrey Patterson, BancorpSouth chairman and CEO. “On the positive side, BancorpSouth continues to experience growth in total assets, net loans and leases and progress continues to be made to assimilate First United into BancorpSouth. By the fourth quarter of 2001, we expect to realize major cost savings associated with our acquisition of First United Bancshares. Realizing these cost savings as well as generating increased revenue by providing additional financial products and services to existing customers is the formula for increasing shareholder value in 2001 and beyond.”

Fourth quarter results included the effect of restructuring the investment portfolio acquired on Aug. 31, 2000 in the merger with First United Bancshares Inc. The sale of investment securities resulted in a $9.7 million, $.12 per share, after-tax loss in the fourth quarter. Other merger-related expenses in the fourth quarter of 2000 totaled $900,000, net of tax, or one cent per share.

“While we expect that the company will experience increased levels of expenses for the next three quarters until the merger of First United Bancshares is fully integrated with BancorpSouth’s operating systems, we believe that our most significant costs relating to the merger and investment security portfolio restructuring are behind us,” Patterson said.

Britton & Koontz

Last year was a good one for Britton & Koontz, said W. Page Ogden, president and CEO of Britton & Koontz First National Bank in Natchez.

“Earnings per share for the bank’s holding company, Britton & Koontz Capital Corporation (NASDAQ: BKBK), increased from $1.21 to $1.28,” Ogden said. “In 2000, we continued our expansion into new markets and such growth dampened core earnings somewhat. With big banks digesting earlier acquisitions, a window opened for community banks such as B&K. We hope that growth opportunities realized now will enhance future income.”

In the last quarter of 2000, B&K completed the acquisition of a $42-million bank in Baton Rouge. In 1999, B&K entered the Vicksburg market and is well-positioned in growth markets along the Mississippi River/Highway 61 corridor, Ogden said.

“Like most community banks, we have experienced strong loan growth, particularly in the real estate and small commercial loan areas,” he said. “Funding such loan growth, however, is a rising concern because of the slower growth in core deposits. The flat yield curve for much of the year 2000 also helped to squeeze our net interest margins. We see the real estate construction market slowing in 2001 but the small business lending needs remaining solid.”

While pursuing geographic expansion and branching, B&K is placing heavy emphasis on maintaining solid electronic systems within the bank and developing e-commerce financial solutions with customers through its “bricks and clicks” focus, Ogden said.

“Of note, our holding company maintains a 37% venture capital interest in Sumx Inc., a technology company headed by B&K’s CFO Bazile Lanneau,” he said. “The electronic banking software that B&K uses was developed at B&K by Sumx. At the end of 2000, B&K, Sumx and Diebold Corporation (NYSE: DBD) issued a joint press release announcing efforts by Diebold and Sumx to work toward a joint arrangement to market and support the Sumx Internet banking solution. Thus, I remain enthusiastic about opportunities for B&K in 2001 and beyond.”

Hancock Bank

“We ended the fourth quarter of 2000 doing very, very well,” said Carl J. Chaney, CFO of Hancock Holding Co., (NASDAQ: HBHC) holding company for Hancock Bank and Hancock Bank of Louisiana, founded in 1899, which operates approximately 100 branches along the Gulf Coast in Mississippi and Louisiana and lists assets of more than $3 billion.

“Earnings were up 16%,
partly due to a premium we received when we sold part of our cre
dit portfolio,” he said. “When you back that out, earnings were

About Lynne W. Jeter

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