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BancorpSouth Unveils Share Buyback Plan to Cheer Stockholders

Zacks Equity Research

BancorpSouth Bank’s BXS board of directors has authorized a new share repurchase program of up to 8 million shares. The plan will be commencing on Jan 2, 2020 and expire on Dec 31, 2020.

In December 2018, BancorpSouth had announced a share repurchase program of nearly 3 million shares expiring on Dec 31, 2019. Prior to this, the bank had completed its share buyback of 6 million on Oct 31, 2018.

The increase in current buyback authorization was possible as the company generated enough capital by issuing 4.125% Fixed-to-Floating Rate Subordinated Notes worth $300 million and 5.5% Series A Non-Cumulative Perpetual Preferred Stock worth $172.5 million in November.

Alongside share repurchases, the company pays dividends regularly. BancorpSouth has been raising its quarterly dividend on an annual basis since 2013. The latest hike of 8.8% was announced in July 2019. Prior to this, it had raised dividend by 21.4% in July 2018.

BancorpSouth’s ability to generate positive cash flows and its consistently improving earnings performance over the last few quarters seem encouraging. Thus, driven by a healthy liquidity position, the company remains well poised to increase shareholders’ wealth.

Shares of the company have rallied 23.8% so far this year, outperforming the industry’s growth of 21.7%.

Currently, BancorpSouth carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past three months, other banks like Fulton Financial Corporation FULT and Hancock Whitney Corporation HWC have announced share buyback program. While Fulton Financial authorized the repurchase of up to $100 million worth of shares, Hancock Whitney has entered into an accelerated share repurchase agreement with Morgan Stanley MS) to buy back shares worth $185 million.

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