BancorpSouth in Tupelo, Miss., reported weaker quarterly profit after boosting its loan-loss provision and recording lower fee income.
The $14.1 billion-asset company said in a press release Wednesday that its second-quarter earnings fell more than 12% from a year earlier to $34.7 million.
BancorpSouth recorded a $2 million provision in the second quarter; the company had a credit of $5 million a year earlier.
Net interest income rose more than 4% to $112.3 million. Total loans increased by 5% to $10.6 billion; the net interest margin widened by 2 basis points to 3.56%. Consumer mortgages jumped roughly 7%, to $2.5 billion, and commercial real estate loans increased by 8%, to $2.3 billion.
Noninterest revenue fell 6%, to $69.7 million, as deposit service charges declined about 4%, to $11 million, and insurance commissions dropped by almost 2%, to $28.8 million.
Noninterest expense remained relatively flat at $128.7 million.
BancorpSouth agreed during the quarter to pay $10.6 million to resolve an investigation into its fair lending practices that was being conducted by the Consumer Financial Protection Bureau and the Justice Department. The settlement didn't materially affect second-quarter results; BancorpSouth had already set aside funds to cover a possible settlement, Chairman and Chief Executive Dan Rollins said in the release.
BancorpSouth's acquisition plans had been stymied partly by the investigation. The company agreed in January 2014 to buy Ouachita Bancshares in Monroe, La., and Central Community Corp. in Temple, Texas, but those deals were first delayed by problems with its anti-money laundering compliance and then by the fair lending probe. The merger agreements weren't extended by a Dec. 31 deadline but are still in effect, the release said.