Shareholders are investigating claims against BancorpSouth, Inc. (NYSE: BXS) and its board of directors in connection with the delay in the filing of the BancorpSouth’s annual 10-K report with the SEC, and subsequent writedown and losses due to previously undisclosed loan deteriation.
Shareholders are investigating allegedly false and misleading statements by BancorpSouth’s directors and senior executives, as well as BancorpSouth’s failure to properly disclose or account for delinquent real estate and construction loans.
Initially, the delay in filing BancorpSouth’s required 10-K resulted in a 22 percent drop in the company’s common shares the next trading day. The shares closed down 13.7 percent for the week. Concerning the filing delay of its required Form 10-K, BancorpSouth said:
management has determined, in consultation with BancorpSouth’s independent registered public accounting firm and with the concurrence of the audit committee of the board of directors, that certain asset quality indicators, including the allowance for credit losses, and their impact on BancorpSouth’s financial statements for the quarter ended Dec. 31, 2009, should be further reviewed.
Then, on March 15, 2010, BancorpSouth announced it was filing its Form 10-K for the year ended December 31, 2009. The filing contained downward revisions to the bank’s results for the quarter and year. Among other things, the bank disclosed (pdf):
- $27.6 million increase in the provision for credit losses
- $21.6 million decrease in net income, or a $0.26 reduction per diluted share
- $186.5 million in nonperforming loans and leases
- $2.3 million in previously-undisclosed litigation expenses
- $4.5 million increase in foreclosed property expense
According to BancorpSouth’s CEO, an internal review determined the bank had to take an additional $27.6 million in downgrades and impairments, and write down the net carrying value of other real estate by $4.5 million. The write-downs included the establishment of a valuation reserve of $3.8 million for losses in other real estate owned by BancorpSouth.
If you owned or traded BancorpSouth, Inc. common stock, or are a current owner of BXS common shares, and wish to learn about your rights or wish to participate in legal action, please call us at 1-877-573-0007, or fill out the following form and we will respond immediately to your inquiry: