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

Jan 28, 2014, 16:00 ET from MidSouth Bancorp, Inc.

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.



RELATED LINKS

http://www.midsouthbank.com