BancorpSouth On Track, With More Growth Opportunities Ahead

Since my last update on BancorpSouth (BXS), this Mississippi-based regional bank has managed to close three significant M&A transactions and meaningfully expand its lending franchise in Texas. At the same time, the bank still maintains an uncommonly good mix of low-cost core deposits and solid credit quality, as well as meaningful fee-generating businesses.

At the time of that last article, I didn’t think the valuation of BancorpSouth shares was all that exciting or likely to lead to outsized gains. Since then, the shares have basically tracked the performance of regional banks in general with surprisingly little deviation from either the SPDR S&P Regional Bank ETF (KRE) or the iShares U.S. Regional Banks ETF (IAT). And the story is largely the same today – while I do believe BancorpSouth scores well in most of the quality metrics that matter, and I believe there is significant opportunity for tuck-in/fill-in M&A within its footprint, the core growth potential isn’t exceptional and the current share price seems pretty fair at a time when banks are looking at a turn in the operating environment.

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BancorpSouth On Track, With More Growth Opportunities Ahead