BancorpSouth Freed from BSA-Related Order

BancorpSouth in Tupelo, Miss., has been freed from a consent order tied to Bank Secrecy Act and anti-money-laundering compliance.

The $13.3 billion-asset company disclosed in a regulatory filing Monday that the Federal Deposit Insurance Corp. and the Mississippi Banking Department had terminated the September order last week.

The consent order required BancorpSouth to create a board subcommittee to ensure compliance. The company also agreed to develop and implement a plan to analyze certain deposit account and transaction activity to determine if any suspicious activity was identified and reported. BancorpSouth also agreed to revise its BSA and anti-money-laundering program to more fully identify and characterize risks tied to the BSA and Patriot Act.

BancorpSouth withdrew applications for two planned acquisitions after the company drew regulatory scrutiny for its Bank Secrecy Act compliance. The Federal Reserve Board had informed BancorpSouth that it would not review the applications to buy Ouachita Bancshares in Monroe, La., and Central Community Corp. in Temple, Texas, until BancorpSouth addressed the FDIC's issues.

The company invested more than $3 million in the third quarter to beef up its staff and processes, moving personnel around until it had roughly 40 people dedicated to BSA compliance. Management said in a conference call in October that it planned to spend $3 million annually to maintain the systems and practices it put in place. Regulators revisited the company in January to review progress before signing off on the termination last week.

The latest filing did not provide an update on its plans to buy Ouachita and Central Community, though Steven Moss, an analyst at Evercore Partners, noted in a report Monday that BancorpSouth refiled its merger applications at the end of February. Moss noted that BancorpSouth still faces investigations from the Consumer Financial Protection Bureau and Justice Department over the company's fair-lending program.