Profit fell at BancorpSouth (BXS) in Tupelo, Miss., on declining net interest revenue and a hefty charge for legal expenses.
The $13.4 billion-asset company said Monday it earned a first-quarter profit of $20.8 million, down 9% from a year earlier. Per-share earnings of 22 cents beat analysts' expectations by 1 cent.
Net interest revenue fell 7%, to $98 million, as net interest margin contracted by 29 basis points, to 3.37%.
Noninterest revenue fell 1.4%, to $71.3 million, as revenue from mortgage lending and service charges declined.
Noninterest expense declined less than 1%, to $135.4 million, in BancorpSouth's first full quarter under cost-conscious Chief Executive Dan Rollins, who succeeded Aubrey Patterson in November. Salary and employee benefits rose by 6%, to $79.4 million, which was offset by declines in the deposit-insurance cost.
BancorpSouth also recorded a $6.8 million reserve related to various legal matters, but it did not provide specifics.
Its asset quality improved dramatically from the first quarter of 2012, as nonperforming assets declined 33%, to $303 million. Its provision for credit losses was $4 million, $6 million less than the prior-year quarter, and net chargeoffs fell 75%, to $5.9 million.