Magazine article American Banker

BancorpSouth's Filing Delay Sparks Concerns

Magazine article American Banker

BancorpSouth's Filing Delay Sparks Concerns

Article excerpt

Byline: Marissa Fajt

BancorpSouth Inc. in Tupelo, Miss., surprised investors late last week by announcing it would delay filing its annual report because auditors found asset-quality issues that will likely require an earnings restatement.

The $13.2 billion-asset company has weathered the economic downturn relatively well, and it declined on Friday to provide further details on the extent of its credit problems or when it would file the report with the Securities and Exchange Commission.

Analysts said that lack of disclosure likely contributed to the market's harsh reaction. BancorpSouth's shares fell 13.6% by late afternoon Friday in heavy trading.

"This has been a company that had held up extremely well from a credit perspective," said Mark Muth, an analyst at Howe Barnes Hoefer & Arnett Inc.

"They had a little slippage in recent quarters, but nothing compared to the sector as a whole," he continued. "They still looked very strong. The market is fearing the worst at this point, especially given the skimpy details in the release and no time line for when revisions would be made."

A statement from Aubrey Patterson, the company's chairman and chief executive, said: "We are taking all actions necessary to release our final audited 2009 financial results as soon as possible. Regardless of the outcome of the current review, we are confidently looking forward to continued strong performance as a company."

BancorpSouth was scheduled to file the results today.

BancorpSouth's credit quality has held up better than many other banks because it is a conservative lender that operates in smaller cities where the real estate bubble was not as pronounced.

But those second-tier markets are now starting to feel the ripple effects of real estate troubles, and that could be affecting BancorpSouth's results, said Adam Barkstrom, a managing director with Sterne, Agee & Leach. …

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