MIDSOUTH BANCORP, INC. 
By 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, September 30, June 30, March 31, December 31,
2013 2013 2013 2013 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, September 30, June 30, March 31, December 31,
2013 2013 2013 2013 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.
