The board of BancorpSouth’s Dec. 11 authorization of a buy-back program of up to 5.7 million shares of common stock pushed up the Tupelo banking company’s share price 0.5 percent by the middle of this week.
The move also won praise from analysts who see the buyback as an attractive reward to shareholders.
The repurchase authorization of up to 6 percent of outstanding shares extends to Nov. 30, 2016 and sets a par value of $2.50 per share. The authorization specifies the buybacks be under “favorable conditions.”
Shares opened at $21.36 Tuesday and closed at $21.78. BancorpSouth shares have a 52-week high of $26.24 (March 20)) and a low of $19.23 (Oct. 15).
Together with a quarterly cash dividend of 7.5 cents per share to be paid on Jan.2, 2015, the share repurchase authorization “reflects BancorpSouth’s commitment toward rewarding its shareholders handsomely,” said a Zacks Equity Research analysis. Zacks maintained a “hold” rating on BancorpSouth shares, however.
The $13.1 billion multi-state banking company’s third-quarter EPS of 32 cents missed Zacks Consensus Estimate by a penny. However, earnings came in 10.3 percent higher than the prior-year quarter.
In its third quarter analysis, Zacks said BancorpSouth’s improvement in its fee-based business will help it navigate through the current low interest rate environment, a stringent regulatory landscape and a weak mortgage market.
“Moreover, the company is well poised for both organic and inorganic growth, which will significantly drive earnings in the coming quarters,” Zacks said.
Dan Rolins, BancorpSouth chairman & CEO, said the stock
repurchase program demonstrates “our continued confidence in our ability to generate long-term growth and profitability. This authorization reflects our commitment to strategically managing capital levels and delivering value to our shareholders.”
The shares may be purchased periodically in open market transactions at prevailing market prices, in privately negotiated transactions, or by other means in accordance with federal
securities laws, BancorpSouth said.
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