BancorpSouth Seems To Have A Harder Path To Growth

Sometimes different is better. Bank of the Ozarks (NASDAQ:OZRK) has focused on specialized real estate lending in the South to fuel exceptional growth, while Ameris (NASDAQ:ABCB) has used serial M&A to acquire footholds in multiple Southern growth markets. In the case of BancorpSouth (NYSE:BXS), though, I'm less certain that its different strategy of targeting mid-sized geographies with less competition is going to work out as well over the long run.

There are positives to this story. BancorpSouth should be approaching the end of some serious regulatory issues that have restricted its operations (particularly with respect to M&A), the company's capital position is fine, and the company's credit situation looks healthy. What's more, it generates a significant amount of fee/non-interest revenue and there is still operating cost leverage left to achieve. All of that being said, the market seems to be already pricing in mid-teens long-term growth, and I don't think that leaves a lot of room for disappointment or outperformance.

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BancorpSouth Seems To Have A Harder Path To Growth