2014

MidSouth Bancorp, Inc. Reports Fourth Quarter 2013 Results And Declares Quarterly Dividends - Diluted EPS $0.29 per common share versus $0.12 per common share for 4Q 2012

- Quarterly return on average tangible common equity of 13.5%

- NPA's to Loans + ORE of 1.05% versus 1.70% at YE 2012

- Core FTE NIM on linked quarter basis of 4.31% versus 4.30%

- Net loan growth of $89.2 million or 8.6% YOY

- Stable core deposits represent 84.2% of total deposits and grew $38.9 million YOY

LAFAYETTE, La., Jan. 28, 2014 /PRNewswire/ -- MidSouth Bancorp, Inc. ("MidSouth") (NYSE: MSL) today reported record quarterly net earnings available to common shareholders of $3.4 million for the fourth quarter of 2013, compared to net earnings available to common shareholders of $1.3 million reported for the fourth quarter of 2012 and $3.1 million in net earnings available to common shareholders for the third quarter of 2013.  Diluted earnings for the fourth quarter of 2013 were $0.29 per common share, compared to $0.12 per common share reported for the fourth quarter of 2012 and $0.27 per common share reported for the third quarter of 2013. 

(Logo: http://photos.prnewswire.com/prnh/20100125/MIDSOUTHLOGO)

MidSouth's Board of Directors announced a cash dividend was declared in the amount of $0.08 per share to be paid on its common stock on April 1, 2014 to shareholders of record as of the close of business on March 14, 2014.  Additionally, a quarterly cash dividend of 1.00% per preferred share on its 4.00% Non-Cumulative Perpetual Convertible Preferred Stock, Series C was declared payable on April 15, 2014 to shareholders of record as of the close of business on April 1, 2014.  The Company's Series C Preferred Stock is now quoted on the OTC Bulletin Board ("OTCBB") under the ticker symbol MSLXP.

Dividends paid on the Series B Preferred Stock issued to the Treasury as a result of our participation in the Small Business Lending Fund ("SBLF") totaled $80,000 for the fourth quarter of 2013 based on a dividend rate of 1.00%.  The dividend rate was set at 1.00% for the fourth quarter of 2013 due to attaining the target 10% growth rate in qualified small business loans during the second quarter of 2013.  As a result of qualified small business loan growth as of September 30, 2013, the dividend rate was set at 1.00% for the period from January 1, 2014 through February 25, 2016.  The Series C Preferred Stock issued with the December 28, 2012 acquisition of PSB Financial Corporation ("PSB") paid dividends totaling $100,000 for the three months ended December 31, 2013. 

Balance Sheet

Consolidated assets remained constant at $1.9 billion for the years ended December 31, 2013 and December 31, 2012.   Deposits totaled $1.5 billion at December 31, 2013, compared to $1.6 billion at December 31, 2012.  Our stable core deposit base, which excludes time deposits, grew $38.9 million and accounted for 84.2% of deposits at December 31, 2013 compared to 80% of deposits at year end 2012.  Time deposits declined $72.0 million for the year ended December 31, 2013 primarily due to the run-off of acquired higher cost certificate of deposit accounts.  Net loans totaled $1.1 billion at December 31, 2013, compared to $1.0 billion at December 31, 2012.  Net loans grew $89.2 million, or 8.6% for the year ended December 31, 2013.  Net loans declined $7.6 million in the fourth quarter of 2013 primarily due to approximately $14.2 million in net paydowns received on commercial lines of credit.

MidSouth's Tier 1 leverage capital ratio was 9.35% at December 31, 2013 compared to 9.17% at September 30, 2013.  Tier 1 risk-based capital and total risk-based capital ratios were 13.47% and 14.19 % at December 31, 2013, compared to 13.13% and 13.84% at September 30, 2013, respectively.  Tier 1 common equity to total risk-weighted assets at December 31, 2013 was 7.86%.  Tangible common equity totaled $98.6 million at December 31, 2013, compared to $96.9 million at September 30, 2013.  Tangible book value per share at December 31, 2013 was $8.76 versus $8.61 at September 30, 2013.

Rusty Cloutier, President & CEO, commenting on the fourth quarter earnings stated, "We continued to see a strong return on average tangible common equity at 13.5% and improving trends in asset quality with stable net interest margins.  However, early in the fourth quarter, we announced that Jerry Reaux, our Vice Chairman and COO, would lead an initiative to accelerate improvement in earnings for our shareholders.  This initiative began with a study of our peers that report strong efficiency ratios and with the internal appointment of Clay Abington as Business Process Manager to oversee implementation of the initiative over the next 24 months.  We also engaged FIS Consulting Services to work with us in identifying opportunities for operating efficiencies and enhancing revenues.  To reinforce the initiative, the Board of Directors and executive management made a commitment to paying no bonuses under the annual incentive plan for 2013 and no raises are to be awarded to executive management in 2014.  In making the changes necessary to accomplish this efficiency initiative, we will reinforce priorities held throughout our history – a strong return on investment to our shareholders and a strong return on investment in the communities we serve for the benefit of our customers." 

Asset Quality

Nonperforming assets declined 33.1% in year-over-year comparison and 9.2% in sequential-quarter comparison as asset quality continued to improve.  Total nonperforming assets were reduced from $17.9 million at December 31, 2012 to $13.2 million at September 30, 2013 and to $12.0 million at December 31, 2013, primarily due to a $5.0 million reduction in nonperforming loans during 2013.    

Allowance coverage for nonperforming loans increased to 166.36% at December 31, 2013 compared to 133.26% at September 30, 2013.  The ALL/total loans ratio was 0.77% at December 31, 2013, compared to 0.76% at September 30, 2013.  Including valuation accounting adjustments on acquired loans, the total valuation accounting adjustment plus ALL was 1.50% of loans at December 31, 2013.  The ratio of annualized net charge-offs to total loans was 0.24% for the three months ended December 31, 2013 compared to 0.11% for the three months ended September 30, 2013.  The increase in annualized net charge-offs during the fourth quarter of 2013 resulted primarily from the charge-off of several small commercial loans totaling approximately $427,000.

Total nonperforming assets to total loans plus ORE and other assets repossessed decreased to 1.05% at December 31, 2013 from 1.15% at September 30, 2013.  Loans classified as troubled debt restructurings ("TDRs") totaled $412,000 at December 31, 2013 compared to $419,000 at September 30, 2013.  Classified assets, including ORE, decreased $3.6 million, or 10.4%, to $30.9 million compared to $34.5 million at September 30, 2013.

Fourth Quarter 2013 vs. Fourth Quarter 2012 Earnings Comparison

Fourth quarter 2013 net earnings available to common shareholders totaled $3.4 million compared to $1.3 million for the fourth quarter of 2012.  Revenues from consolidated operations increased $7.0 million in quarterly comparison and included a net increase of $940,000 in purchase accounting adjustments on the 2012 and 2011 acquisitions.  Noninterest income increased $1.2 million in quarterly comparison, from $3.7 million for the three months ended December 31, 2012 to $4.9 million for the three months ended December 31, 2013.  Increases in noninterest income consisted primarily of $591,000 in service charges on deposit accounts and $480,000 in ATM/debit card income due to the acquired branches in the Timber Region, formerly PSB. 

Noninterest expenses increased $3.9 million for the fourth quarter 2013 compared to fourth quarter 2012 and included approximately $1.8 million in operating expenses for the Timber Region and approximately $374,000 in operating costs for six new branches opened in late 2012 and 2013.  The remaining $1.7 million of increased operating costs consisted primarily of $1.3 million in salaries and benefits costs, $368,000 in occupancy expense and $281,000 in ATM/debit card expense.  The increased costs were partially offset by a $263,000 decrease in legal and professional fees, a $163,000 decrease in data processing costs and a $184,000 decrease in expenses on ORE.  The provision for loan losses increased $300,000 primarily as a result of increased net charge-offs in the fourth quarter of 2013.  Income tax expense increased $880,000 in quarterly comparison.

Fully taxable-equivalent ("FTE") net interest income totaled $19.8 million and $14.0 million for the quarters ended December 31, 2013 and 2012, respectively.  The FTE net interest income increased $5.8 million in prior year quarterly comparison primarily due to a $414.2 million increase in the volume of average earning assets primarily as a result of the PSB acquisition.  The average volume of loans increased $342.5 million in quarterly comparison and the average yield on loans increased 6 basis points, from 6.21% to 6.27%.  Purchase accounting adjustments on acquired loans added 51 basis points to the average yield on loans for the fourth quarter of 2013 and 22 basis points to the average yield on loans for the fourth quarter of 2012.  Net of the impact of the purchase accounting adjustments, average loan yields declined 23 basis points in prior year quarterly comparison, from 5.99% to 5.76%.  Loan yields have declined primarily as the result of a sustained low market interest rate environment.

Investment securities totaled $497.2 million, or 26.9% of total assets at December 31, 2013, versus $578.1 million, or 31.2% of total assets at December 31, 2012.  The investment portfolio had an effective duration of 4.2 years and an unrealized loss of $164,000 at December 31, 2013.  The average volume of investment securities increased $78.4 million in quarterly comparison primarily due to $152.7 million in securities acquired with the PSB acquisition at year end December 2012, of which $28.8 million were sold early in the first quarter of 2013.  The average tax equivalent yield on investment securities decreased 5 basis points, from 2.62% to 2.57%.  

The average yield on all earning assets increased 23 basis points in prior year quarterly comparison, from 4.83% for the fourth quarter of 2012 to 5.06% for the fourth quarter of 2013.   Net of the impact of purchase accounting adjustments, the average yield on total earning assets increased 2 basis points, from 4.70% to 4.72% for the three month periods ended December 31, 2012 and 2013, respectively.

The impact to interest expense of a $346.7 million increase in the average volume of interest bearing liabilities was partially offset by a 9 basis point decrease in the average rate paid on interest bearing liabilities, from 0.58% at December 31, 2012 to 0.49% at December 31, 2013.  Net of purchase accounting adjustments on acquired certificates of deposit and FHLB borrowings, the average rate paid on interest bearing liabilities was 0.66% for the fourth quarter of 2012 and declined to 0.55% for the fourth quarter of 2013.

As a result of these changes in volume and yield on earning assets and interest bearing liabilities, the FTE net interest margin increased 28 basis points, from 4.41% for the fourth quarter of 2012 to 4.69% for the fourth quarter of 2013.  Net of purchase accounting adjustments on loans, deposits and FHLB borrowings, the FTE margin increased 9 basis points, from 4.22% for the fourth quarter of 2012 to 4.31% for the fourth quarter of 2013.

Fourth Quarter 2013 vs. Third Quarter 2013 Earnings Comparison

In sequential-quarter comparison, net earnings available to common shareholders increased $293,000 as the positive impact from a $368,000 increase in net interest income and a $288,000 decrease in preferred dividends was partially offset by a $350,000 increase in provision for loan losses.  Net interest income increased in sequential-quarter comparison primarily due to $483,000 in non-recurring interest income recorded in the fourth quarter of 2013.  This amount was comprised of additional discount accretion earned from the PSB loan portfolio as a result of higher than anticipated loan payoffs.

Noninterest expenses decreased $54,000 as reductions in several noninterest expense categories offset increases of $141,000 in salaries and benefits costs and $203,000 in legal and professional fees. 

FTE net interest income increased $348,000 in sequential-quarter comparison primarily due to an increase in purchase accounting adjustments that resulted in an increase in the average yield on loans, from 6.24% for the third quarter of 2013 to 6.27% for the fourth quarter of 2013.  An average decrease of $12.0 million in investment securities partially funded an $18.7 million increase in the average volume of loans.  The average yield on total earning assets increased 7 basis points for the same period, from 4.99% to 5.06%, respectively.  An average decrease of $6.4 million in interest bearing deposits was offset by an average increase of $2.7 million in overnight repurchase agreements.  As a result of these changes in volume and yield on earning assets and interest bearing liabilities, the FTE net interest margin increased 9 basis points, from 4.60% to 4.69%.  Net of purchase accounting adjustments, the FTE net interest margin increased 1 basis point, from 4.30% for the quarter ended September 30, 2013 to 4.31% for the quarter ended December 31, 2013.

Year-Over-Year Earnings Comparison

In year-over-year comparison, net earnings available to common shareholders increased $4.7 million primarily as a result of a $21.5 million improvement in net interest income and a $4.4 million increase in noninterest income.  The $25.9 million improvement in revenues was offset by an $18.0 million increase in noninterest expense, a $2.4 million increase in income tax expense and a $1.0 million increase in provision for loan loss.  The $21.5 million increase in net interest income included approximately $12.6 million earned in the acquired Timber Region and $4.1 million in increased purchase accounting adjustments in year-to-date comparison.

Increases in noninterest income consisted primarily of $1.8 million in service charges on deposit accounts and $1.8 million in ATM and debit card income.  Noninterest expenses increased $18.0 million in year-to-date comparison and included approximately $7.3 million in operating expenses for the Timber Region and approximately $2.0 million in operating expenses for the six new branches opened in late 2012 and 2013.  Increases in noninterest expense, excluding operating expenses on the Timber Region and the new branches, included primarily $4.2 million in salary and benefits costs, $1.7 million in occupancy expense, $766,000 in ATM/debit card expense and $425,000 in corporate development expense.  The increase was partially offset by a $656,000 decrease in expenses on ORE and repossessed assets, excluding expenses on ORE and repossessed assets incurred by the Timber Region.

In year-to-date comparison, FTE net interest income increased $22.0 million primarily due to a $402.9 million increase in the average volume of earning assets that resulted in a $22.7 million increase in interest income.  The average yield on earning assets increased in year-to-date comparison, from 4.92% at December 31, 2012 to 5.10% at December 31, 2013.  Net of a 39 basis point effect of discount accretion on acquired loans, the average yield on earning assets was 4.71% at December 31, 2013, compared to 4.76% at December 31, 2012, net of a 16 basis point effect of discount accretion on acquired loans.

Interest expense increased in year-over-year comparison primarily due to a $317.4 million increase in the average volume of interest bearing liabilities, from $946.1 million at December 31, 2012 to $1.3 billion at December 31, 2013.  The average rate paid on interest-bearing liabilities decreased 10 basis points, from 0.62% at December 31, 2012 to 0.52% at December 31, 2013.  Net of an 8 basis point effect of premium amortization on acquired certificates of deposit and FHLB advances, the average rate paid on interest bearing liabilities was 0.60% at December 31, 2013.  The FTE net interest margin increased 26 basis points, from 4.45% for the year ended December 31, 2012 to 4.71% for the year ended December 31, 2013.  Net of purchase accounting adjustments, the FTE net interest margin increased 4 basis points, from 4.22% to 4.26% for the years ended December 31, 2012 and 2013, respectively.

About MidSouth Bancorp, Inc.

MidSouth Bancorp, Inc. is a financial holding company headquartered in Lafayette, Louisiana, with assets of $1.9 billion as of December 31, 2013. MidSouth Bancorp, Inc. trades on the NYSE under the symbol "MSL." The Company's Series C Preferred Stock is now quoted on the OTC Bulletin Board ("OTCBB") under the ticker symbol MSLXP.  Through its wholly owned subsidiary, MidSouth Bank, N.A., MidSouth offers a full range of banking services to commercial and retail customers in Louisiana and Texas. MidSouth Bank currently has 62 locations in Louisiana and Texas, including a Loan Production Office in Austin, Texas, and is connected to a worldwide ATM network that provides customers with access to more than 50,000 surcharge-free ATMs. Additional corporate information is available at www.midsouthbank.com.

Forward-Looking Statements

Certain statements contained herein are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties.  These statements include, among others, the expected impacts of the recently completed PSB acquisition, future expansion plans and future operating results.  Actual results may differ materially from the results anticipated in these forward-looking statements.  Factors that might cause such a difference include, among other matters, the ability of MidSouth to integrate the PSB operations and capitalize on new market opportunities resulting from the acquisition; the effect of the PSB acquisition on relations with customers and employees; changes in interest rates and market prices that could affect the net interest margin, asset valuation, and expense levels; changes in local economic and business conditions, including, without limitation, changes related to the oil and gas industries, that could adversely affect customers and their ability to repay borrowings under agreed upon terms, adversely affect the value of the underlying collateral related to their borrowings, and reduce demand for loans; the timing and ability to reach any agreement to restructure nonaccrual loans;  increased competition for deposits and loans which could affect compositions, rates and terms; the timing and impact of future acquisitions, the success or failure of integrating operations, and the ability to capitalize on growth opportunities upon entering new markets; loss of critical personnel and the challenge of hiring qualified personnel at reasonable compensation levels; legislative and regulatory changes, including changes in banking, securities and tax laws and regulations and their application by our regulators, changes in the scope and cost of FDIC insurance and other coverage; and other factors discussed under the heading "Risk Factors" in MidSouth's Annual Report on Form 10-K for the year ended December 31, 2012 filed with the SEC on March 18, 2013 and in its other filings with the SEC.  MidSouth does not undertake any obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information, future events or otherwise, except as required by law.

 

 


MIDSOUTH BANCORP, INC. and SUBSIDIARIES          

Condensed Consolidated Financial Information (unaudited)          

(in thousands except per share data)               









Quarter


Quarter


Quarter


Quarter


Quarter



Ended


Ended


Ended


Ended


Ended

EARNINGS DATA


12/31/2013


9/30/2013


6/30/2013


3/31/2013


12/31/2012

     Total interest income


$      21,014


$     20,704


$     21,356


$     20,129


$      15,036

     Total interest expense


1,575


1,633


1,614


1,717


1,354

          Net interest income


19,439


19,071


19,742


18,412


13,682

     FTE net interest income


19,834


19,486


20,079


18,761


13,972

     Provision for loan losses


800


450


1,250


550


500

     Non-interest income


4,896


4,988


5,004


4,431


3,697

     Non-interest expense


18,427


18,481


18,267


17,431


14,567

          Earnings before income taxes


5,108


5,128


5,229


4,862


2,312

     Income tax expense


1,563


1,588


1,566


1,434


683

          Net earnings


3,545


3,540


3,663


3,428


1,629

     Dividends on preferred stock


180


468


392


292


367

          Net earnings available to common shareholders


$        3,365


$       3,072


$       3,271


$       3,136


$        1,262












PER COMMON SHARE DATA











     Basic earnings per share


$          0.30


$         0.27


$         0.29


$         0.28


$          0.12

     Diluted earnings per share


0.29


0.27


0.29


0.27


0.12

     Quarterly dividends per share


0.08


0.08


0.08


0.07


0.07

     Book value at end of period


13.21


13.12


12.92


13.24


13.10

     Tangible book value at period end


8.76


8.61


8.39


8.67


8.49

     Market price at end of period


17.86


15.50


15.53


16.26


16.35

     Shares outstanding at period end 


11,256,712


11,253,216


11,253,216


11,238,786


11,236,159

     Weighted average shares outstanding











        Basic


11,255,670


11,253,216


11,238,945


11,237,916


10,512,255

        Diluted


11,886,433


11,868,851


11,838,862


11,866,108


10,599,583












AVERAGE BALANCE SHEET DATA











     Total assets


$ 1,862,962


$1,863,090


$1,850,483


$1,850,759


$ 1,400,244

     Loans and leases


1,141,829


1,123,086


1,080,295


1,043,780


799,316

     Total deposits


1,515,673


1,521,146


1,538,320


1,542,726


1,153,728

     Total common equity


149,489


146,182


150,287


148,565


136,006

     Total tangible common equity


98,941


95,363


98,996


96,692


104,343

     Total equity 


191,486


188,179


192,284


190,564


168,115












SELECTED RATIOS











     Annualized return on average assets


0.72%


0.65%


0.71%


0.69%


0.36%

     Annualized return on average common equity


8.93%


8.34%


8.73%


8.56%


3.69%

     Annualized return on average tangible common equity


13.50%


12.78%


13.25%


13.15%


4.81%

     Average loans to average deposits


75.33%


73.83%


70.23%


67.66%


69.28%

     Taxable-equivalent net interest margin


4.69%


4.60%


4.87%


4.61%


4.41%

     Tier 1 leverage capital ratio


9.35%


9.17%


9.14%


8.98%


11.82%












CREDIT QUALITY











     Allowance for loan losses (ALLL) as a % of total loans


0.77%


0.76%


0.76%


0.72%


0.70%

     Nonperforming assets to tangible equity + ALLL


8.02%


8.94%


9.51%


10.39%


12.79%

     Nonperforming assets to total loans, other real estate











          owned and other repossessed assets


1.05%


1.15%


1.23%


1.46%


1.76%

     Annualized QTD net charge-offs to total loans


0.24%


0.11%


0.06%


0.18%


0.19%

 

MIDSOUTH BANCORP, INC. and SUBSIDIARIES          

Condensed Consolidated Financial Information (unaudited)       

(in thousands)               



















BALANCE SHEET


December 31,


September 30,


June 30,


March 31,


December 31,



2013


2013


2013


2013


2012

Assets











Cash and cash equivalents


$         59,731


$          43,434


$     59,578


$   118,009


$         73,573

Securities available-for-sale


341,665


358,675


367,299


387,786


424,617

Securities held-to-maturity


155,523


159,141


163,610


167,617


153,524

     Total investment securities


497,188


517,816


530,909


555,403


578,141

Time deposits held in banks


-


-


-


-


881

Other investments


11,526


10,951


10,951


10,017


8,310

Total loans


1,137,554


1,145,023


1,118,572


1,037,859


1,046,940

Allowance for loan losses


(8,779)


(8,667)


(8,531)


(7,457)


(7,370)

     Loans, net


1,128,775


1,136,356


1,110,041


1,030,402


1,039,570

Premises and equipment


72,343


70,147


67,881


66,797


63,461

Goodwill and other intangibles


50,112


50,703


50,980


51,447


51,828

Other assets


31,485


33,400


33,436


34,981


35,964

     Total assets


$    1,851,160


$     1,862,807


$1,863,776


$1,867,056


$    1,851,728























Liabilities and Shareholders' Equity











Non-interest bearing deposits


$       383,257


$        380,048


$   395,341


$   390,774


$       381,083

Interest-bearing deposits


1,135,546


1,126,078


1,140,453


1,169,352


1,170,821

   Total deposits


1,518,803


1,506,126


1,535,794


1,560,126


1,551,904

Securities sold under agreements to 











    repurchase and other short term 











    borrowings


53,916


77,809


51,710


48,557


41,447

Short-term FHLB advances


25,000


25,000


25,000


-


-

Other borrowings


27,703


28,059


28,416


28,772


29,128

Junior subordinated debentures


29,384


29,384


29,384


29,384


29,384

Other liabilities


5,605


6,800


6,039


9,384


10,624

     Total liabilities


1,660,411


1,673,178


1,676,343


1,676,223


1,662,487

Total shareholders' equity


190,749


189,629


187,433


190,833


189,241

     Total liabilities and shareholders' equity


$    1,851,160


$     1,862,807


$1,863,776


$1,867,056


$    1,851,728

 


MIDSOUTH BANCORP, INC. and SUBSIDIARIES             










Condensed Consolidated Financial Information (unaudited)          

(in thousands except per share data)                



























EARNINGS STATEMENT


Three Months Ended


Twelve Months Ended



12/31/2013


9/30/2013


6/30/2013


3/31/2013


12/31/2012


12/31/2013


12/31/2012
















Interest income:















Loans, including fees


$   16,727


$ 16,707


$ 16,370


$ 15,250


$   12,084


$   65,054


$   47,984

Investment securities


2,876


2,956


3,063


2,898


2,496


11,793


10,963

Accretion of purchase accounting adjustments


1,323


945


1,827


1,867


394


5,962


1,792

Other interest income


88


96


96


114


62


394


283

Total interest income


21,014


20,704


21,356


20,129


15,036


83,203


61,022
















Interest expense:















Deposits


1,017


1,114


1,166


1,309


1,092


4,606


5,137

Borrowings


411


414


380


395


192


1,600


756

Junior subordinated debentures


339


335


336


336


251


1,346


984

Accretion of purchase accounting adjustments


(192)


(230)


(268)


(323)


(181)


(1,013)


(1,037)

Total interest expense


1,575


1,633


1,614


1,717


1,354


6,539


5,840
















Net interest income


19,439


19,071


19,742


18,412


13,682


76,664


55,182

Provision for loan losses


800


450


1,250


550


500


3,050


2,050

Net interest income after provision for loan losses


18,639


18,621


18,492


17,862


13,182


73,614


53,132
















Noninterest income:















Service charges on deposit accounts


2,431


2,352


2,271


2,171


1,840


9,225


7,430

ATM and debit card income


1,687


1,719


1,638


1,356


1,207


6,400


4,605

Gain on securities, net


5


25


-


204


-


234


204

Mortgage lending


82


109


138


71


115


400


398

Other charges and fees


691


783


957


629


535


3,060


2,307

Total non-interest income


4,896


4,988


5,004


4,431


3,697


19,319


14,944
















Noninterest expense:















Salaries and employee benefits


8,781


8,640


8,369


8,392


6,092


34,182


24,603

Occupancy expense


3,916


3,874


3,725


3,587


3,037


15,102


11,320

ATM and debit card


707


661


597


414


408


2,379


1,559

Professional fees


506


303


535


382


388


1,726


1,457

FDIC premiums


282


265


244


320


235


1,111


930

Marketing


545


739


521


469


346


2,274


1,463

Corporate development


347


349


453


337


237


1,486


969

Data processing


473


482


409


471


358


1,835


1,408

Printing and supplies


304


321


430


375


350


1,430


1,095

Expenses on ORE and other assets repossessed


201


288


523


189


409


1,201


1,742

Amortization of core deposit intangibles


276


277


276


277


182


1,106


762

Merger related costs


-


-


-


214


998


214


1,221

Other non-interest expense


2,089


2,282


2,185


2,004


1,527


8,560


6,126

Total non-interest expense


18,427


18,481


18,267


17,431


14,567


72,606


54,655

Earnings before income taxes


5,108


5,128


5,229


4,862


2,312


20,327


13,421

Income tax expense


1,563


1,588


1,566


1,434


683


6,151


3,779

Net earnings


3,545


3,540


3,663


3,428


1,629


14,176


9,642

Dividends on preferred stock


180


468


392


292


367


1,332


1,547

Net earnings available to common shareholders


$     3,365


$   3,072


$   3,271


$   3,136


$     1,262


$   12,844


$     8,095
















Earnings per common share, diluted


$       0.29


$     0.27


$     0.29


$     0.27


$       0.12


$       1.12


$       0.77

 

MIDSOUTH BANCORP, INC. and SUBSIDIARIES          

Condensed Consolidated Financial Information (unaudited)       

(in thousands)               





COMPOSITION OF LOANS


December 31,


Percent


September 30,


June 30,


March 31, 


December 31,


Percent


2013


of Total


2013


2013


2013


2012


of Total

Commercial, financial, and agricultural


$       403,976


35.51%


$       423,073


$   391,241


$   315,397


$       315,655


30.15%

Lease financing receivable


5,542


0.49%


5,340


5,656


4,962


5,769


0.55%

Real estate - construction


82,691


7.27%


76,213


82,851


82,508


75,334


7.20%

Real estate - commercial


397,135


34.91%


401,080


404,543


405,705


414,384


39.58%

Real estate - residential


146,841


12.91%


142,431


141,689


138,284


142,858


13.65%

Installment loans to individuals


97,459


8.57%


94,722


90,571


88,898


90,561


8.65%

Other


3,910


0.34%


2,164


2,021


2,105


2,379


0.23%
















Total loans


$    1,137,554




$    1,145,023


$1,118,572


$1,037,859


$    1,046,940


















COMPOSITION OF DEPOSITS
















December 31,


Percent


September 30,


June 30,


March 31, 


December 31,


Percent



2013


of Total


2013


2013


2013


2012


of Total

Noninterest bearing


$       383,257


25.23%


$       380,048


$   395,341


$   390,774


$       381,083

(1)

24.56%

NOW & Other


429,279


28.26%


412,873


431,596


432,540


402,121

(1)

25.91%

Money Market/Savings


465,748


30.67%


463,621


453,729


465,954


456,222

(1)

29.40%

Time Deposits of less than $100,000


112,782


7.43%


116,118


119,299


125,020


133,304


8.59%

Time Deposits of $100,000 or more


127,737


8.41%


133,466


135,829


145,838


179,174


11.55%
















Total deposits


$    1,518,803




$    1,506,126


$1,535,794


$1,560,126


$    1,551,904


















ASSET QUALITY DATA
















December 31,




September 30,


June 30,


March 31, 


December 31,





2013




2013


2013


2013


2012



Nonaccrual loans (2)


$           5,099




$           5,760


$       6,388


$       7,019


$           8,276



Loans past due 90 days and over


178




744


117


163


1,986



Total nonperforming loans


5,277




6,504


6,505


7,182


10,262



Other real estate owned


6,687




6,672


6,900


7,552


7,496



Other repossessed assets


20




18


0


16


151



Total nonperforming assets


$         11,984




$         13,194


$     13,405


$     14,750


$         17,909


















Troubled debt restructurings (2)


$              412




$              419


$          405


$       4,211


$           4,137

































Nonperforming assets to total assets


0.65%




0.71%


0.72%


0.79%


0.97%



Nonperforming assets to total loans +      















OREO + other repossessed assets


1.05%




1.15%


1.19%


1.41%


1.70%



ALLL to nonperforming loans


166.36%




133.26%


131.15%


103.83%


71.82%



ALLL to total loans


0.77%




0.76%


0.76%


0.72%


0.70%


















Quarter-to-date charge-offs


$              740




$              375


$          267


$          523


$              557



Quarter-to-date recoveries


53




61


91


60


53



Quarter-to-date net charge-offs


$              687




$              314


$          176


$          463


$              504



Annualized QTD net charge-offs to total loans


0.24%




0.11%


0.06%


0.18%


0.19%





(1)

A restatement of the deposit mix acquired from The Peoples State Bank is included in the Composition of Deposits for December 31, 2012.  A total of $64.3 million in Money Market/Savings deposits were reclassed to NOW & Other deposits ($63.8 million) and to Noninterest bearing balances ($0.5 million).

(2)

Balances have been adjusted from previously reported amounts for discounts associated with purchase credit impaired loans.

 

MIDSOUTH BANCORP, INC. and SUBSIDIARIES             



















Condensed Consolidated Financial Information (unaudited)   



















(in thousands)    






























YIELD ANALYSIS


Three Months Ended


Three Months Ended  


Three Months Ended  


Three Months Ended  


Three Months Ended  


December 31, 2013


September 30, 2013


June 30, 2013


March 31, 2013


December 31, 2012


























Tax






Tax






Tax






Tax






Tax





Average


Equivalent


Yield/


Average


Equivalent


Yield/


Average


Equivalent


Yield/


Average


Equivalent


Yield/


Average


Equivalent


Yield/



Balance


Interest


Rate


Balance


Interest


Rate


Balance


Interest


Rate


Balance


Interest


Rate


Balance


Interest


Rate
































Taxable securities


$   409,561


$     2,128


2.08%


$   418,964


$     2,171


2.07%


$   434,730


$     2,251


2.07%


$   426,017


$     2,059


1.93%


$   352,796


$     1,818


2.06%

Tax-exempt securities


98,648


1,143


4.63%


101,226


1,200


4.74%


104,747


1,149


4.39%


106,982


1,188


4.44%


77,063


1,001


5.20%

Total investment securities


508,209


3,271


2.57%


520,190


3,371


2.59%


539,477


3,400


2.52%


532,999


3,247


2.44%


429,859


2,819


2.62%

Federal funds sold


2,535


1


0.15%


2,180


1


0.18%


1,593


1


0.25%


8,021


4


0.20%


2,959


1


0.13%

Time and interest bearing deposits in































other banks


14,546


9


0.24%


22,519


15


0.26%


23,346


17


0.29%


57,829


38


0.26%


26,249


19


0.28%

Other investments


11,263


78


2.77%


10,948


80


2.92%


10,056


78


3.10%


9,317


72


3.09%


5,820


42


2.89%

Loans 


1,141,829


18,050


6.27%


1,123,086


17,652


6.24%


1,080,295


18,197


6.76%


1,043,780


17,117


6.65%


799,316


12,479


6.21%

Total interest earning assets


1,678,382


21,409


5.06%


1,678,923


21,119


4.99%


1,654,767


21,693


5.26%


1,651,946


20,478


5.03%


1,264,203


15,360


4.83%

Non-interest earning assets


184,580






184,167






195,716






198,813






136,041





Total assets


$1,862,962






$1,863,090






$1,850,483






$1,850,759






$1,400,244




































Interest-bearing liabilities:































Deposits


$1,126,742


$        917


0.32%


$1,133,126


$        976


0.34%


$1,149,285


$        990


0.35%


$1,133,087


$     1,078


0.39%


$   861,239


$        911


0.42%

Repurchase agreements


67,022


207


1.23%


64,274


204


1.26%


47,667


182


1.53%


45,644


179


1.59%


52,155


192


1.46%

Federal funds purchased


747


1


0.52%


354


-


0.00%


1,466


3


0.81%


-


-


0.00%


16


-


0.00%

Other borrowings


50,661


102


0.79%


51,853


104


0.78%


28,559


90


1.25%


29,076


108


1.49%


42


-


0.00%

Notes payable


1,174


9


3.00%


1,448


14


3.78%


1,700


13


3.03%


1,836


15


3.27%


-


-


0.00%

Junior subordinated debentures


29,384


339


4.51%


29,384


335


4.46%


29,384


336


4.52%


29,384


337


4.59%


15,616


251


6.29%

Total interest-bearing liabilities


1,275,730


1,575


0.49%


1,280,439


1,633


0.51%


1,258,061


1,614


0.51%


1,239,027


1,717


0.56%


929,068


1,354


0.58%

Non-interest bearing liabilities


395,746






394,472






400,138






421,168






303,061





Shareholders' equity


191,486






188,179






192,284






190,564






168,115





Total liabilities and  shareholders'































equity


$1,862,962






$1,863,090






$1,850,483






$1,850,759






$1,400,244




































Net interest income (TE) and spread



$   19,834


4.57%




$   19,486


4.48%




$   20,079


4.75%




$   18,761


4.47%




$   14,006


4.25%
































Net interest margin





4.69%






4.60%






4.87%






4.61%






4.41%
































Core net interest margin (1)






4.31%






4.30%






4.33%






4.03%






4.21%



(1)

Core net interest margin is defined as reported net interest margin less purchase accounting adjustments.  See reconciliation of Non-GAAP financial measures on page 6.

 

MIDSOUTH BANCORP, INC. and SUBSIDIARIES             

Reconciliation of Non-GAAP Financial Measures (unaudited)

(in thousands except per share data)    














Three Months Ended



December 31,

2013


September 30,

2013


June 30,

2013


March 31,

2013


December 31,

2012

Per Common Share Data

















Book value per common share


$           13.21


$            13.12


$        12.92


$        13.24


$           13.10

Effect of intangible assets per share


4.45


4.51


4.53


4.57


4.61

Tangible book value per common share


$             8.76


$              8.61


$          8.39


$          8.67


$             8.49












Diluted earnings per share


$             0.29


$              0.27


$          0.29


$          0.27


$             0.12

Effect of merger-related costs, after-tax


-


-


-


0.01


0.06

Operating earnings per share


$             0.29


$              0.27


$          0.29


$          0.28


$             0.18














Three Months Ended



December 31,


September 30,


June 30,


March 31,


December 31,



2013


2013


2013


2013


2012

Average Balance Sheet Data






















Total equity


$       191,486


$        188,179


$    192,284


$    190,564


$       168,115

Less preferred equity


41,997


41,997


41,997


41,999


32,109

Total common equity


$       149,489


$        146,182


$    150,287


$    148,565


$       136,006

Less intangible assets


50,548


50,819


51,291


51,873


31,663

Tangible common equity


$         98,941


$          95,363


$      98,996


$      96,692


$       104,343

























Three Months Ended



December 31,

2013


September 30,

2013


June 30,

2013


March 31,

2013


December 31,

2012

Core Net Interest Margin

















Net interest income (TE)


$         19,834


$          19,486


$      20,079


$      18,761


$         14,006

Less purchase accounting adjustments


(1,515)


(1,175)


(2,095)


(2,190)


(575)

Net interest income, net of purchase accounting adjustments


$         18,319


$          18,311


$      17,984


$      16,571


$         13,431












Total average earnings assets


$    1,678,382


$     1,678,923


$ 1,654,767


$ 1,651,946


$    1,264,203

Add average balance of loan valuation discount


9,347


10,323


12,019


13,786


2,676

Average earnings assets, excluding loan valuation discount


$    1,687,729


$     1,689,246


$ 1,666,786


$ 1,665,732


$    1,266,879












Core net interest margin


4.31%


4.30%


4.33%


4.03%


4.21%


     Certain financial information included in the earnings release and the associated Condensed Consolidated Financial Information (unaudited) is determined by methods other than in accordance with GAAP.  The non-GAAP financial measure above is calculated by using "tangible common equity," which is defined as total common equity reduced by intangible assets.  "Tangible book value per common share" is defined as tangible common equity divided by total common shares outstanding.  "Core net interest margin" is defined as reported net interest margin less purchase accounting adjustments.

     We use non-GAAP measures because we believe they are useful for evaluating our financial condition and performance over periods of time, as well as in managing and evaluating our business and in discussions about our performance.  We also believe these non-GAAP financial measures provide users of our financial information with a meaningful measure for assessing our financial condition as well as comparison to financial results for prior periods.  These results should not be viewed as a substitute for results determined in accordance with GAAP, and are not necessarily comparable to non-GAAP performance measures that other companies may use.

 

SOURCE MidSouth Bancorp, Inc.



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