Shares of BancorpSouth Inc. were up sharply early Tuesday after the Tupelo, Miss., company rebounded from a surprisingly weak first quarter to report a second-quarter profit that handily beat analysts' estimates.

The $13.3 billion-asset company said late Monday that it earned $12.8 million in the second quarter, or 15 cents per diluted share. That's compared to a loss of $12.8 million in last year's second quarter and a loss of $949,000 in this year's first quarter. Analysts surveyed by Thomson Reuters had predicted that the company would earn just four cents per share in the second quarter.

At mid-morning Tuesday, BancorpSouth's stock was up 9%, to $13.77.

BancorpSouth attributed the earnings comeback to a significant improvement in its credit quality.

Nonperforming loans fell almost 11%, to $380 million, and net chargeoffs dropped 35% quarter over quarter. As a result, BancorpSouth cut its provision nearly in half, to $32.2 million, year over year and 40% from the previous quarter.

BancorpSouth's chairman and chief executive, Aubrey Patterson, added in a new release that new loans placed on nonaccrual status during the quarter were at their lowest level in eight quarters. Still, he said the company remains wary about its prospects for earnings growth.

"We are encouraged by this performance, but we remain cautious about short-term prospects for continued improvement given slow economic growth and persistently high unemployment," Patterson said.

BancorpSouth is looking to get a better handle on expenses. It announced last quarter that it plans to close 23 underperforming branches, a move it says will save the company roughly $4.4 million a year.

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