2014

MidSouth Bancorp, Inc. Reports Second Quarter 2013 Results - Diluted EPS $0.29 per common share versus $0.20 per common share for 2Q 2012

- Net loans increased 7.8% to $1.1 billion versus 1Q 2013

- SBLF dividend expected to drop to 1.00% beginning 4Q 2013

- Annualized net charge-offs for the quarter of 0.06% versus 0.18% for 1Q 2013

- Core FTE NIM of 4.33% versus 4.03% for 1Q 2013

LAFAYETTE, La., July 29, 2013 /PRNewswire/ -- MidSouth Bancorp, Inc. ("MidSouth") (NYSE MKT:MSL) today reported record quarterly net earnings available to common shareholders of $3.3 million for the second quarter of 2013, compared to net earnings available to common shareholders of $2.1 million reported for the second quarter of 2012 and $3.1 million in net earnings available to common shareholders for the first quarter of 2013.  Diluted earnings for the second quarter of 2013 were $0.29 per common share, compared to $0.20 per common share reported for the second quarter of 2012 and $0.27 per common share reported for the first quarter of 2013. 

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

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 $292,000 for the second quarter of 2013 based on a dividend rate of 3.65%.  Although the dividend rate for the third quarter of 2013 is estimated to be 4.60%, we anticipate the the fourth quarter rate to drop to 1.0% due to attaining the target 10% growth rate in qualified small business loans during the second quarter.  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 June 30, 2013. 

Balance Sheet

Total consolidated assets at June 30, 2013 were $1.9 billion, compared to $1.4 billion at June 30, 2012 and $1.9 billion at March 31, 2013.  Deposits totaled $1.5 billion at June 30, 2013, compared to $1.2 billion at June 30, 2012 and $1.6 billion at March 31, 2013.  Total deposits declined $24.3 million during the quarter primarily due to the run-off of higher cost time deposits from acquired branches.  Our strong core deposit base continued to yield a low cost of interest-bearing deposits, which declined 4 basis points, from 0.39% compared to 0.35%, over the three months ended June 30, 2013. 

Loans totaled $1.1 billion at June 30, 2013, compared to $751.5 million at June 30, 2012 and $1.0 billion at March 31, 2013.  Total loans increased $80.7 million in the second quarter of 2013 primarily due to $54.1 million in commercial loans funded as a result of a small business lending campaign held during the quarter.  Additional commercial loans funded during the quarter resulted in a total increase of $75.8 million, or 24.0%, in commercial loans during the second quarter of 2013.

MidSouth's Tier 1 leverage capital ratio was 9.14% at June 30, 2013 compared to 8.98% at March 31, 2013.  Tier 1 risk-based capital and total risk-based capital ratios were 13.24% and 13.95% at June 30, 2013, compared to 13.75% and 14.41% at March 31, 2013, respectively.  The Tier 1 common equity to total risk-weighted assets at June 30, 2013 was 7.53%.  Tangible common equity totaled $94.5 million at June 30, 2013, compared to $97.4 million at March 31, 2013.  Tangible book value per share at June 30, 2013 was $8.39 versus $8.67 at March 31, 2013 primarily due to a $5.7 million decline in the net unrealized gain on securities available-for-sale during the second quarter. 

"We held a very successful SBLF loan campaign this quarter across all of our markets with a focus on small commercial customers," said MidSouth Vice Chairman and Chief Operating Officer Jerry Reaux.  "The campaign expanded our customer base throughout our footprint and resulted in $54.1 million in loans funded, a reinvestment of well over 100% of our $32.0 million in SBLF funds into the communities we serve." 

Rusty Cloutier, President & CEO added, "Our markets in Louisiana and Texas are benefitting from a return to a stronger energy outlook and continue to outperform the rest of the country.  In a recent address to community bankers, well-known energy specialist and economist Dr. Loren Scott (www.lorencscottassociates.com) noted that Louisiana has been allotted $1.2 billion of the $4.5 billion under the RESTORE Act, which directs 80% of BP federal fine money, to restore Louisiana's Gulf coast.  Other positive news for our markets includes significant employment opportunities with $90 billion in expansion projects slated for several companies in various industries."

Asset Quality

Nonperforming assets declined 4.3% in year-over-year comparison and 9.6% in sequential-quarter comparison as asset quality continued to improve.  Total nonperforming assets were reduced from $18.5 million at December 31, 2012 to $15.3 million at March 31, 2013 and to $13.8 million at June 30, 2013, primarily due to a $4.0 million reduction in nonperforming loans, including loans past due 90 days and over, during the first six months of 2013.    

Allowance coverage for nonperforming loans increased to 123.84% at June 30, 2013 compared to 96.98% at March 31, 2013 due to a $1.3 million charge to the provision for loan losses during the second quarter of 2013.  The provision for loan losses increased $0.7 million in sequential-quarter comparison primarily due to the $80.7 million in loan growth during the second quarter of 2013.  The ALL/total loans ratio increased slightly to 0.76% from the 0.72% reported for the first quarter of 2013.  The ratio of annualized net charge-offs to total loans was 0.06% for the three months ended June 30, 2013 compared to 0.18% for the three months ended March 31, 2013.

Total nonperforming assets to total loans plus ORE and other assets repossessed decreased to 1.23% at June 30, 2013 from 1.46% at March 31, 2013.  Loans classified as troubled debt restructurings ("TDRs") totaled $535,000 at June 30, 2013 compared to $5.0 million at March 31, 2013.  The $4.5 million decrease resulted primarily from payoffs related to two commercial credits previously classified as TDRs.  Classified assets, including ORE, increased to $36.1 million compared to $29.2 million at March 31, 2013 due primarily to approximately $8.2 million in five commercial loans downgraded to substandard rating during the second quarter following review of borrowers' year-end financials.  Despite the downgrades, these five commercial loans are well collateralized with no loss expected on the credits.

Second Quarter 2013 vs. Second Quarter 2012 Earnings Comparison

Second quarter 2013 net earnings available to common shareholders totaled $3.3 million compared to $2.1 million for the second quarter of 2012.  Revenues from consolidated operations increased $7.0 million in quarterly comparison and included $2.1 million in purchase accounting adjustments on the 2012 and 2011 acquisitions.  Noninterest income increased $1.0 million in quarterly comparison, from $4.0 million for the three months ended June 30, 2012 to $5.0 million for the three months ended June 30, 2013.  Increases in noninterest income consisted primarily of $403,000 in service charges on deposit accounts and $489,000 in ATM/debit card income. 

Noninterest expenses increased $4.5 million for the second quarter 2013 compared to second quarter 2012 and included approximately $1.8 million in operating expenses for the Timber Region and approximately $410,000 in operating costs for four new branches opened in late 2012 and early 2013.  The increased operating costs consisted primarily of $2.2 million in salaries and benefits costs, $942,000 in occupancy expense, $169,000 in ATM/debit card expense, $153,000 in the cost of printing and supplies, $141,000 in loss on disposal of fixed assets and $172,000 in legal and professional fees.  Expenses on ORE and other assets repossessed decreased $209,000 in prior year quarterly comparison.  The provision for loan losses increased $675,000 primarily as a result of the loan growth experienced during the second quarter of 2013.  Income tax expense increased $635,000 in quarterly comparison.

Fully taxable-equivalent ("FTE") net interest income totaled $20.1 million and $14.1 million for the quarters ended June 30, 2013 and 2012, respectively.  The FTE net interest income increased $6.0 million in prior year quarterly comparison primarily due to a $395.4 million increase in the volume of average earning assets primarily as a result of the PSB acquisition.  The average volume of loans increased $331.4 million in quarterly comparison and the average yield on loans increased 12 basis points, from 6.64% to 6.76%.  Purchase accounting adjustments on acquired loans added 75 basis points to the average yield on loans for the second quarter of 2013 and 30 basis points to the average yield on loans for the second quarter of 2012.  Net of the impact of the purchase accounting adjustments, average loan yields declined 33 basis points in prior year quarterly comparison, from 6.34% to 6.01%.  Loan yields have declined primarily as the result of a sustained low market interest rate environment.

Investment securities totaled $530.9 million, or 28.5% of total assets at June 30, 2013, versus $493.3 million, or 35.4% of total assets at June 30, 2012.  The investment portfolio had an effective duration of 4.19 years and an unrealized gain of $2.2 million at June 30, 2013.  The average volume of investment securities increased $68.0 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 18 basis points, from 2.70% to 2.52% primarily due to lower reinvestment rates.  The average yield on all earning assets increased 28 basis points in prior year quarterly comparison, from 4.98% for the second quarter of 2012 to 5.26% for the second quarter of 2013.   Net of the impact of purchase accounting adjustments, the average yield on total earning assets declined 3 basis points, from 4.81% to 4.78% for the three month periods ended June 30, 2012 and 2013, respectively.

The impact to interest expense of a $308.1 million increase in the average volume of interest bearing liabilities was partially offset by a 12 basis point decrease in the average rate paid on interest bearing liabilities, from 0.63% at June 30, 2012 to 0.51% at June 30, 2013.  Net of purchase accounting adjustments on acquired certificates of deposit and FHLB borrowings, the average rate paid on interest bearing liabilities was 0.74% for the second quarter of 2012 compared to 0.60% for the second 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 36 basis points, from 4.51% for the second quarter of 2012 to 4.87% for the second quarter of 2013.  Net of purchase accounting adjustments on loans, deposits and FHLB borrowings, the FTE margin increased 8 basis points, from 4.25% for the second quarter of 2012 to 4.33% for the second quarter of 2013.

Second Quarter 2013 vs. First Quarter 2013 Earnings Comparison

In sequential-quarter comparison, net earnings available to common shareholders increased $135,000 as a $1.3 million increase in net interest income and a $573,000 increase in non-interest income were offset by an $836,000 increase in noninterest expenses, a $700,000 increase in provision for loan losses and a $132,000 increase in income tax expense.  The improvement in noninterest income resulted primarily from $117,000 in safe deposit box income and increases of $282,000 in ATM/debit card income and $100,000 in service charges on deposit accounts, which were partially offset by a decrease of $204,000 in gain on sale of securities.  

Noninterest expenses increased $836,000 and consisted primarily of increases of $311,000 in expenses on ORE and repossessed assets, $189,000 in legal and professional fees, $163,000 in ATM/debit card expense, $128,000 in occupancy expenses, and $95,000 in corporate development expenses.  The increases in noninterest expenses were partially due to non-recurring items, including a $300,000 write-down on a commercial real estate property in ORE and a $148,000 loss on disposal of assets acquired from PSB that were no longer in use.  The $163,000 increase in ATM/debit card expense resulted primarily from an increase in the volume of transactions processed, which was offset by increased ATM/debit card income for the quarter.  Excluding the effect of these items, noninterest expenses increased $225,000, or 1.3%, in sequential-quarter comparison.

FTE net interest income increased $1.3 million in sequential-quarter comparison, which resulted primarily from a shift in the mix of earnings assets.  An average decrease of $34.5 million in interest bearing deposits in other banks funded a $36.5 million increase in the average volume of loans.  The average yield on loans increased 11 basis points, from 6.65% for the first quarter of 2013 to 6.76% for the second quarter of 2013.  An increase of $355,000 in commercial loan fee income resulting from the $75.8 million in commercial loan growth during the second quarter contributed to the improvement in the loan yield.  The average yield on total earning assets increased 23 basis points for the same period, from 5.03% to 5.26%, respectively.  Interest expense decreased $103,000 in sequential-quarter comparison, despite a $19.0 million increase in the average volume of interest bearing liabilities for the same period.  The decrease in interest expense was a result of a decrease in the average yield on interest bearing liabilities, from 0.56% for the first quarter of 2013 to 0.51% for the second 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 26 basis points, from 4.61% to 4.87%.  Net of purchase accounting adjustments, the FTE net interest margin increased 30 basis points, from 4.03% for the quarter ended March 31, 2013 to 4.33% for the quarter ended June 30, 2013.

Year-Over-Year Earnings Comparison

In year-over-year comparison, net earnings available to common shareholders increased $1.8 million primarily as a result of a $10.5 million improvement in net interest income and a $1.9 million increase in noninterest income which offset a $9.2 million increase in noninterest expense, a $550,000 increase in provision for loan loss and a $966,000 increase in income tax expense.  The $10.5 million increase in net interest income included approximately $6.6 million earned from the Timber Region.  An increase in purchase accounting adjustments of $2.6 million in year-to-date comparison also contributed to the increase in net interest income.  

Increases in noninterest income consisted primarily of $750,000 in service charges on deposit accounts and $719,000 in ATM and debit card income.  Noninterest expenses increased $9.2 million in year-to-date comparison and included approximately $3.4 million in operating expenses for the Timber region and approximately $782,000 in operating expenses for the four new branches opened in late 2012 and early 2013.  Increases in noninterest expense, excluding operating expenses on the Timber Region and the new branches, included primarily $2.5 million in salary and benefits costs, $910,000 in occupancy expense, $163,000 in data processing expense, and $314,000 in corporate development expense. 

In year-to-date comparison, FTE net interest income increased $10.6 million primarily due to a $10.9 million increase in interest income.  The increase resulted primarily from a $391.8 million increase in the average volume of earning assets.  The average yield on earning assets increased in year-to-date comparison, from 4.97% at June 30, 2012 to 5.14% at June 30, 2013.  Net of a 48 basis point effect of discount accretion on acquired loans, the average yield on earning assets was 4.66% at June 30, 2013.

Interest expense increased in year-over-year comparison primarily due to a $293.1 million increase in the average volume of interest-bearing liabilities, from $955.5 million at June 30, 2012 to $1.2 billion at June 30, 2013.   The average rate paid on interest-bearing liabilities decreased 9 basis points, from 0.63% at June 30, 2012 to 0.54% at June 30, 2013.  Net of a 9 basis point effect of premium amortization on acquired certificates of deposit and FHLB advances, the average rate paid on interest bearing liabilities was 0.63% at June 30, 2013.  The FTE net interest margin increased 25 basis points, from 4.49% for the six months ended June 30, 2012 to 4.74% for the six months ended June 30, 2013.  Net of purchase accounting adjustments, the FTE net interest margin declined 3 basis points, from 4.21% to 4.18% for the six months ended June 30, 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 June 30, 2013. 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 60 banking centers in Louisiana and 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)               









For the Quarter Ended




For the Quarter Ended





June 30,


%


March 31,


%

EARNINGS DATA


2013


2012


Change


2013


Change

     Total interest income


$        21,356


$        15,298


39.6%


$                             20,129


6.1%

     Total interest expense


1,614


1,489


8.4%


1,717


-6.0%

          Net interest income


19,742


13,809


43.0%


18,412


7.2%

     FTE net interest income


20,079


14,108


42.3%


18,761


7.0%

     Provision for loan losses


1,250


575


117.4%


550


127.3%

     Non-interest income


5,004


3,965


26.2%


4,431


12.9%

     Non-interest expense


18,267


13,790


32.5%


17,431


4.8%

          Earnings before income taxes


5,229


3,409


53.4%


4,862


7.5%

     Income tax expense


1,566


931


68.2%


1,434


9.2%

          Net earnings


3,663


2,478


47.8%


3,428


6.9%

     Dividends on preferred stock


392


380


3.2%


292


34.2%

          Net earnings available to common shareholders


$          3,271


$          2,098


55.9%


$                               3,136


4.3%












PER COMMON SHARE DATA











     Basic earnings per share


$            0.29


$            0.20


45.0%


$                                 0.28


3.6%

     Diluted earnings per share


0.29


0.20


45.0%


0.27


7.4%

     Quarterly dividends per share


0.08


0.07


14.3%


0.07


14.3%

     Book value at end of period


12.92


12.78


1.1%


13.24


-2.4%

     Tangible book value at period end


8.39


9.76


-14.0%


8.67


-3.2%

     Market price at end of period


15.53


14.08


10.3%


16.26


-4.5%

     Shares outstanding at period end 


11,253,216


10,475,504


7.4%


11,238,786


0.1%

     Weighted average shares outstanding











        Basic


11,238,945


10,469,681


7.3%


11,237,916


0.0%

        Diluted


11,838,862


10,481,417


13.0%


11,866,108


-0.2%












AVERAGE BALANCE SHEET DATA











     Total assets


$   1,850,483


$   1,390,814


33.1%


$                        1,850,759


0.0%

     Loans and leases


1,080,295


748,885


44.3%


1,043,780


3.5%

     Total deposits


1,538,320


1,151,543


33.6%


1,542,726


-0.3%

     Total common equity


150,287


132,968


13.0%


148,565


1.2%

     Total tangible common equity


98,996


101,297


-2.3%


96,692


2.4%

     Total equity 


192,284


164,968


16.6%


190,564


0.9%












SELECTED RATIOS


6/30/2103


6/30/2012




3/31/2013



     Annualized return on average assets


0.71%


0.61%


16.4%


0.69%


2.9%

     Annualized return on average common equity


8.73%


6.35%


37.5%


8.56%


2.0%

     Average loans to average deposits


70.23%


65.03%


8.0%


67.66%


3.8%

     Taxable-equivalent net interest margin


4.87%


4.51%


8.0%


4.61%


5.6%

     Tier 1 leverage capital ratio


9.14%


10.45%


-12.5%


8.98%


1.8%












CREDIT QUALITY











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


0.76%


0.96%


-20.8%


0.72%


5.6%

    Nonperforming assets to tangible equity + ALLL


9.51%


10.18%


-6.6%


10.39%


-8.5%

    Nonperforming assets to total loans, other real estate owned and other repossessed assets












1.23%


1.90%


-35.5%


1.46%


-16.0%

     Annualized QTD net charge-offs to total loans


0.06%


0.23%


-72.3%


0.18%


-64.7%

 


MIDSOUTH BANCORP, INC. and SUBSIDIARIES          

Condensed Consolidated Financial Information (unaudited)       

(in thousands)               



















BALANCE SHEET


June 30,


June 30,


%


March 31,


December 31,



2013


2012


Change


2013


2012

Assets











Cash and cash equivalents


$     59,578


$     50,646


17.6%


$   118,009


$         73,573

Securities available-for-sale


367,299


370,293


-0.8%


387,786


424,617

Securities held-to-maturity


163,610


123,054


33.0%


167,617


153,524

     Total investment securities


530,909


493,347


7.6%


555,403


578,141

Time deposits held in banks


-


710


-100.0%


-


881

Other investments


10,951


5,815


88.3%


10,017


8,310

Total loans


1,118,572


751,455


48.9%


1,037,859


1,046,940

Allowance for loan losses


(8,531)


(7,222)


18.1%


(7,457)


(7,370)

     Loans, net


1,110,041


744,233


49.2%


1,030,402


1,039,570

Premises and equipment


67,881


45,550


49.0%


66,797


63,461

Goodwill and other intangibles


50,980


31,573


61.5%


51,447


51,828

Other assets


33,436


22,953


45.7%


34,981


35,964

     Total assets


$1,863,776


$1,394,827


33.6%


$1,867,056


$    1,851,728























Liabilities and Shareholders' Equity











Non-interest bearing deposits


$   395,341


$   269,110


46.9%


$   390,774


$       381,083

Interest-bearing deposits


1,140,453


884,651


28.9%


1,169,352


1,170,821

   Total deposits


1,535,794


1,153,761


33.1%


1,560,126


1,551,904

Securities sold under agreements to

repurchase and other short term borrowings






















51,710


50,347


2.7%


48,557


41,447

Short-term borrowings


25,000


-


100.0%


-


-

Other borrowings


28,416


-


100.0%


28,772


29,128

Junior subordinated debentures


29,384


15,465


90.0%


29,384


29,384

Other liabilities


6,039


9,414


-35.9%


9,384


10,624

     Total liabilities


1,676,343


1,228,987


36.4%


1,676,223


1,662,487

Total shareholders' equity


187,433


165,840


13.0%


190,833


189,241

     Total liabilities and shareholders' equity


$1,863,776


$1,394,827


33.6%


$1,867,056


$    1,851,728

 


MIDSOUTH BANCORP, INC. and SUBSIDIARIES             








Condensed Consolidated Financial Information (unaudited)          

(in thousands except per share data)                
















Three Months Ended




Six Months Ended



EARNINGS STATEMENT


June 30,


%


June 30,


%



2013


2012


Change


2013


2012


Change














Interest income


$21,356


$15,298


39.6%


$41,485


$30,631


35.4%

Interest expense


1,614


1,489


8.4%


3,331


3,018


10.4%

Net interest income


19,742


13,809


43.0%


38,154


27,613


38.2%

Provision for loan losses


1,250


575


117.4%


1,800


1,250


44.0%














Service charges on deposit accounts


2,271


1,868


21.6%


4,442


3,692


20.3%

Other charges and fees


2,733


2,097


30.3%


4,993


3,801


31.4%

Total non-interest income


5,004


3,965


26.2%


9,435


7,493


25.9%

Salaries and employee benefits


8,369


6,152


36.0%


16,761


12,238


37.0%

Occupancy expense


3,725


2,783


33.8%


7,322


5,331


37.3%

FDIC premiums


244


195


25.1%


589


453


30.0%

Other non-interest expense


5,929


4,660


27.2%


11,026


8,436


30.7%

Total non-interest expense


18,267


13,790


32.5%


35,698


26,458


34.9%

Earnings before income taxes


5,229


3,409


53.4%


10,091


7,398


36.4%

Income tax expense


1,566


931


68.2%


3,000


2,034


47.5%

Net earnings


3,663


2,478


47.8%


7,091


5,364


32.2%

Dividends on preferred stock


392


380


3.2%


684


780


-12.3%

Net earnings available to common shareholders


$  3,271


$  2,098


55.9%


$  6,407


$  4,584


39.8%



























Earnings per common share, diluted


$    0.29


$    0.20


45.0%


$    0.56


$    0.44


27.3%

 


MIDSOUTH BANCORP, INC. and SUBSIDIARIES          

Condensed Consolidated Financial Information (unaudited)          

(in thousands except per share data)               












EARNINGS STATEMENT


Second


First


Fourth


Third


Second

QUARTERLY TRENDS


Quarter


Quarter


Quarter


Quarter


Quarter



2013


2013


2012


2012


2012

Interest income


$21,356


$20,129


$15,036


$15,355


$15,298

Interest expense


1,614


1,717


1,354


1,468


1,489

Net interest income


19,742


18,412


13,682


13,887


13,809

Provision for loan losses


1,250


550


500


300


575

Net interest income after provision for loan loss


18,492


17,862


13,182


13,587


13,234

Total non-interest income


5,004


4,431


3,697


3,754


3,965

Total non-interest expense


18,267


17,431


14,567


13,630


13,790

Earnings before income taxes


5,229


4,862


2,312


3,711


3,409

Income tax expense


1,566


1,434


683


1,062


931

Net earnings


3,663


3,428


1,629


2,649


2,478

Dividends on preferred stock


392


292


367


400


380

Net earnings available to common shareholders


$  3,271


$  3,136


$  1,262


$  2,249


$  2,098












Earnings per common share, diluted


$    0.29


$    0.27


$    0.12


$    0.21


$    0.20

 


MIDSOUTH BANCORP, INC. and SUBSIDIARIES          

Condensed Consolidated Financial Information (unaudited)       

(in thousands)               




COMPOSITION OF LOANS


June 30,


June 30,


%


March 31, 


December 31,



2013


2012


Change


2013


2012














Commercial, financial, and agricultural


$   391,241


$   233,629


67.5%


$   315,397


$       315,655


Lease financing receivable


5,656


3,974


42.3%


4,962


5,769


Real estate - construction


82,851


55,111


50.3%


82,508


75,334


Real estate - commercial


404,543


271,141


49.2%


405,705


414,384


Real estate - residential


141,689


112,343


26.1%


138,284


142,858


Installment loans to individuals


90,571


72,859


24.3%


88,898


90,561


Other


2,021


2,398


-15.7%


2,105


2,379














Total loans


$1,118,572


$   751,455


48.9%


$1,037,859


$    1,046,940


































COMPOSITION OF DEPOSITS


June 30,


June 30,


%


March 31,


December 31,



2013


2012


Change


2013


2012    (1)














Noninterest bearing


$   395,341


$   269,110


46.9%


$   390,774


$       381,083


NOW & Other


431,596


239,059


80.5%


432,540


402,121


Money Market/Savings


453,729


369,524


22.8%


465,954


456,222


Time Deposits of less than $100,000


119,299


119,098


0.2%


125,020


133,304


Time Deposits of $100,000 or more


135,829


156,970


-13.5%


145,838


179,174














Total deposits


$1,535,794


$1,153,761


33.1%


$1,560,126


$    1,551,904



(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).

 


MIDSOUTH BANCORP, INC. and SUBSIDIARIES          

Condensed Consolidated Financial Information (unaudited)       

(in thousands)               








ASSET QUALITY DATA


June 30,


June 30,


%


March 31,


December 31,


2013


2012


Change


2013


2012












Nonaccrual loans


$  6,772


$  7,370


-8.1%


$    7,526


$           8,887

Loans past due 90 days and over


117


62


88.7%


163


1,986

Total nonperforming loans


6,889


7,432


-7.3%


7,689


10,873

Other real estate owned


6,900


6,968


-1.0%


7,552


7,496

Other repossessed assets


0


2


-100.0%


16


151

Total nonperforming assets


$13,789


$14,402


-4.3%


$  15,257


$         18,520












Troubled debt restructurings


$     535


$     417


28.3%


$    5,032


$           5,062























Nonperforming assets to total assets


0.74%


1.03%


-28.2%


0.82%


1.00%

Nonperforming assets to total loans +      











OREO + other repossessed assets


1.23%


1.90%


-35.3%


1.46%


1.76%

ALLL to nonperforming loans


123.84%


97.17%


27.4%


96.98%


67.78%

ALLL to total loans


0.76%


0.96%


-20.8%


0.72%


0.70%












Quarter-to-date charge-offs


$     267


$     526


-49.2%


$       523


$              557

Quarter-to-date recoveries


91


95


-4.2%


60


53

Quarter-to-date net charge-offs


$     176


$     431


-59.2%


$       463


$              504

Annualized QTD net charge-offs to total loans


0.06%


0.23%


-72.3%


0.18%


0.19%

 


MIDSOUTH BANCORP, INC. and SUBSIDIARIES             

Condensed Consolidated Financial Information (unaudited)   

(in thousands)    






YIELD ANALYSIS


Three Months Ended


Three Months Ended  


June 30, 2013


June 30, 2012














Tax






Tax





Average


Equivalent


Yield/


Average


Equivalent


Yield/



Balance


Interest


Rate


Balance


Interest


Rate














Taxable securities


$     434,730


$       2,251


2.07%


$     390,149


$       2,148


2.20%

Tax-exempt securities


104,747


1,149


4.39%


81,283


1,029


5.06%

Total investment securities


539,477


3,400


2.52%


471,432


3,177


2.70%

Federal funds sold


1,593


1


0.25%


3,294


2


0.20%

Time and interest bearing deposits in other banks














23,346


17


0.29%


30,042


21


0.27%

Other investments


10,056


78


3.10%


5,757


42


2.93%

Loans (1)


1,080,295


18,197


6.76%


748,885


12,355


6.64%

Total interest earning assets


1,654,767


21,693


5.26%


1,259,410


15,597


4.98%

Non-interest earning assets


195,716






131,404





Total assets


$  1,850,483






$  1,390,814


















Interest-bearing liabilities:













Deposits (2)


$  1,149,285


$          990


0.35%


$     885,467


$       1,059


0.48%

Repurchase agreements


47,667


182


1.53%


49,057


186


1.52%

Federal funds purchased


1,466


3


0.81%


-


-


-

Other borrowings (3)


28,559


90


1.25%


-


-


-

Notes Payable


1,700


13


3.03%


-


-


-

Junior subordinated debentures


29,384


336


4.52%


15,465


244


6.25%

    Total interest-bearing liabilities


1,258,061


1,614


0.51%


949,989


1,489


0.63%

Non-interest bearing liabilities


400,138






275,857





Shareholders' equity


192,284






164,968





    Total liabilities and  shareholders'

equity














$  1,850,483






$  1,390,814


















Net interest income (TE) and spread




$     20,079


4.75%




$     14,108


4.35%














Net interest margin






4.87%






4.51%


(1)

Includes $1.8 million and $495,000 of interest income from accretable yield on purchase loans from acquisitions for the three months ended June 30, 2013 and 2012, respectively.

(2)

Includes $176,000 and $269,000 of reduction in interest expense from premium amortization on time deposits acquired from acquisitions for the three months ended June 30, 2013 and 2012, respectively.

(3)

Includes $92,000 of reduction in interest expense from premium amortization on FHLB borrowings acquired from PSB for the three months ended June 30, 2013.

 


MIDSOUTH BANCORP, INC. and SUBSIDIARIES             

Condensed Consolidated Financial Information (unaudited)   

(in thousands)    






YIELD ANALYSIS


Six Months Ended


Six Months Ended  


June 30, 2013


June 30, 2012














Tax






Tax





Average


Equivalent


Yield/


Average


Equivalent


Yield/



Balance


Interest


Rate


Balance


Interest


Rate














Taxable securities


$      430,397


$       4,310


2.20%


$      377,726


$       4,217


2.23%

Tax-exempt securities


105,859


2,349


4.44%


83,624


2,122


5.07%

Total investment securities


536,256


6,659


2.48%


461,350


6,339


2.75%

Federal funds sold


4,789


5


0.21%


3,701


4


0.20%

Time and interest bearing deposits in other banks














40,492


55


0.27%


45,043


60


0.26%

Other investments


9,688


150


3.10%


5,696


87


3.04%

Loans (1)


1,062,141


35,314


6.70%


745,740


24,758


6.66%

Total interest earning assets


1,653,366


42,183


5.14%


1,261,530


31,248


4.97%

Non-interest earning assets


198,351






131,859





Total assets


$   1,851,717






$   1,393,389


















Interest-bearing liabilities:













Deposits (2)


$   1,141,230


$       2,068


0.37%


$      892,556


$       2,159


0.49%

Repurchase agreements


46,661


361


1.56%


47,462


367


1.55%

Federal funds purchased


737


3


0.81%


2


-


-

Other borrowings


28,827


199


1.37%


1


-


-

Notes payable


1,768


28


3.15%


-


-


-

Junior subordinated debentures


29,384


672


4.55%


15,465


492


6.29%

    Total interest-bearing liabilities


1,248,607


3,331


0.54%


955,486


3,018


0.63%

Non-interest bearing liabilities


411,681






273,680





Shareholders' equity


191,429






164,223





    Total liabilities and  shareholders'

equity














$   1,851,717






$   1,393,389


















Net interest income (TE) and spread




$     38,852


4.60%




$     28,230


4.34%














Net interest margin






4.74%






4.49%


(1)

Includes $3.7 million and $1.0 million of interest income from accretable yield on purchased loans from acquisitions for the six months ended June 30, 2013 and 2012, respectively.

(2)

Includes $408,000 and $643,000 of reduction in interest expense from premium amortization on time deposits acquired from acquisitions for the six months ended June 30, 2013 and 2012, respectively.

(3)

Includes $184,000 of reduction in interest expense from premium amortization on FHLB borrowings acquired from PSB for the six months ended June 30, 2013.

 








MIDSOUTH BANCORP, INC. and SUBSIDIARIES             

Reconciliation of Non-GAAP Financial Measures (unaudited)

(in thousands except per share data)    










For the Quarter Ended



June 30,


June 30,


March 31,

Per Common Share Data


2013


2012


2013








Book value per common share


$     12.92


$     12.78


$     13.24

Effect of intangible assets per share


4.53


3.02


4.57

Tangible book value per common share


$       8.39


$       9.76


$       8.67








Diluted earnings per share


$       0.29


$       0.20


$       0.27

Effect of merger-related costs, after-tax


-


-


0.01

Operating earnings per share


$       0.29


$       0.20


$       0.28








Average Balance Sheet Data














Total equity


$ 192,284


$ 164,968


$ 190,564

Less preferred equity


41,997


32,000


41,999

Total common equity


$ 150,287


$ 132,968


$ 148,565

Less intangible assets


51,291


31,671


51,873

Tangible common equity


$   98,996


$ 101,297


$   96,692















     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.  


     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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https://www.midsouthbank.com

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