MIDSOUTH BANCORP, INC. 
By LAFAYETTE, La., Jan. 29, 2013 /PRNewswire/ -- MidSouth Bancorp, Inc. ("MidSouth") (NYSE MKT: MSL) today reported net earnings available to common shareholders of $1.3 million for the fourth quarter of 2012, compared to net earnings available to common shareholders of $0.9 million reported for the fourth quarter of 2011 and $2.2 million in net earnings available to common shareholders for the third quarter of 2012. Diluted earnings for the fourth quarter of 2012 were $0.12 per common share, compared to $0.09 per common share reported for the fourth quarter of 2011 and $0.21 per common share reported for the third quarter of 2012. The fourth quarter of 2012 included $0.06 per share of after-tax merger related expenses, compared to $0.08 per share for the fourth quarter of 2011 and $0.02 per share for the third quarter of 2012. Excluding these non-operating expenses, operating earnings per share for the fourth quarter of 2012 were $0.18, compared to $0.17 for the fourth quarter of 2011 and $0.23 for the third quarter of 2012.
(Logo: http://photos.prnewswire.com/prnh/20100125/MIDSOUTHLOGO)
For the year ended December 31, 2012, net income available to common shareholders totaled $8.1 million compared to $2.7 million for the year ended December 31, 2011. Diluted earnings per share were $0.77 for 2012, compared to $0.27 for 2011. Merger related expenses totaled $1.2 million for the year ended December 31, 2012 versus $2.4 million for the year ended December 31, 2011. Repayment of the Series A Preferred Stock under the CPP resulted in accelerated accretion of discount on the preferred stock of approximately $444,000 in the third quarter of 2011, or approximately $0.05 per share. Excluding these non-operating expenses, operating earnings per share for the year ended December 31, 2012 were $0.85 versus $0.46 for the year ended December 31, 2011.
On December 28, 2012, MidSouth completed the merger with PSB Financial Corporation. PSB is the holding company of Many, Louisiana-based The Peoples State Bank, which operates fourteen branches in north Louisiana and one branch in Texarkana, Texas. MidSouth acquired approximately $471.4 million in assets from PSB and ended 2012 with $1.9 billion in consolidated assets. There were no material changes in the balance sheet or material operating results of PSB between December 28, 2012 and December 31, 2012. Therefore, the fourth quarter of 2012 includes no operating results for PSB. Additional information on the merger with PSB can be found under the Investor Relations tab of our website.
Mr. Cloutier, commenting on completing the merger with PSB Financial Corporation and 2012 results said, "We are extremely happy to welcome Peoples State Bank to the MidSouth Bank family and are excited about the opportunity to offer expanded services to our customers in Louisiana and Texas. In 2012, in addition to the Peoples State Bank merger, we continued to invest in our business with new branch locations and upgraded technology. We grew loans over 5% and enhanced our strong core deposit franchise. Nevertheless, the current low interest rate environment presents challenges to our business that we will continue to work through in 2013, especially focusing on improving efficiencies by leveraging our cost structure with continued loan growth and expense savings to continue to build shareholder value."
Balance Sheet
Total consolidated assets at December 31, 2012 were $1.9 billion, compared to $1.4 billion at December 31, 2011 and September 30, 2012. Deposits totaled $1.6 billion at December 31, 2012, compared to $1.2 billion at December 31, 2011 and September 30, 2012. Continued improvement in the mix of deposits with nontime deposits accounting for 80% of deposits helped reduce the cost of funds to 0.42%. Deposits acquired through the PSB merger totaled $401.0 million and consisted of $311.0 million of transaction deposits and $90.0 million of time deposits.
Loans totaled $1.0 billion at December 31, 2012, which included $260.1 million in loans acquired from PSB at fair value, compared to $746.3 million at December 31, 2011 and $808.8 million at September 30, 2012. PSB's loan mix consisted of 51% commercial real estate loans, 23% commercial and industrial loans, 13% residential real estate loans, 7% consumer installment loans, and 6% construction loans. Excluding loans from PSB, loans decreased $21.9 million on a sequential basis, including an $8.5 million reduction in the utilization of commercial lines of credit.
MidSouth's Tier 1 leverage capital ratio was 11.82% at December 31, 2012 compared to 10.53% at September 30, 2012. Tier 1 risk-based capital and total risk-based capital ratios were 13.46% and 14.10% at December 31, 2012, compared to 15.78% and 16.62% at September 30, 2012, respectively. The Tier 1 common equity leverage ratio at December 31, 2012 was 6.54%. Tangible common equity totaled $95.4 million at December 31, 2012, compared to $104.9 million at September 30, 2012. Tangible book value per share at December 31, 2012 was $8.49 versus $10.01 at September 30, 2012. The primary factors reducing tangible book value per share were the recording of $18.0 million of goodwill and $2.7 million of core deposit intangible in the PSB transaction. Also reducing tangible book value per share was the decrease in other comprehensive income of $1.2 million or approximately $0.11 per share for the quarter ended December 31, 2012.
Asset Quality
Nonperforming assets totaled $18.5 million at December 31, 2012, an increase of $4.3 million over the $14.2 million reported for year-end 201l and $3.0 million over the $15.5 million reported for September 30, 2012. The increase resulted primarily from the addition of $4.4 million in nonperforming assets acquired from PSB, which included $1.6 million in nonaccrual loans, $2.0 million in loans past due 90 days and over and accruing and $0.8 million in other real estate owned ("ORE"). Net of the impact of nonperforming assets from PSB, nonperforming assets declined $1.4 million, or 9.0% compared to September 30, 2012.
The addition of PSB nonperforming loans reduced the allowance coverage for nonperforming loans to 67.78% at December 31, 2012 from 83.43% at September 30, 2012. The ALL/total loans ratio decreased to 0.70% for the fourth quarter of 2012, compared to 0.91% at September 30, 2012. The ratio of annualized net charge-offs to total loans was 0.19% for the three months ended December 31, 2012 compared to 0.07% for the three months ended September 30, 2012.
Total nonperforming assets to total loans plus ORE and other assets repossessed decreased from 1.90% at September 30, 2012 to 1.76% at December 31, 2012 due to the addition of $260.1 million in loans from PSB. ORE and other assets repossessed increased $1.0 million during the fourth quarter primarily due to the $0.8 million in ORE from PSB. Loans classified as troubled debt restructurings ("TDRs") totaled $5.1 million at December 31, 2012 compared to $242,000 at September 30, 2012. A total of $4.8 million in TDRs acquired with PSB included four credits, two of which are large commercial credits. Classified assets, including ORE, increased $10.4 million, or 43.3% during the three months ended December 31, 2012, from $24.0 million at September 30, 2012 to $34.4 million. The increase in classified assets resulted primarily from $9.7 million in classified loans and $0.8 million in ORE from PSB.
Fourth Quarter 2012 vs. Fourth Quarter 2011 Earnings Comparison
Fourth quarter 2012 net earnings before dividends on preferred stock totaled $1.6 million compared to $1.3 million for the fourth quarter of 2011. The fourth quarter of 2012 included $998,000 of merger related expenses compared to $1.3 million in merger related charges for the fourth quarter of 2011. Additionally, operating expenses related to new branches opened in the second half of 2012 totaled approximately $220,000 or $0.02 per share on a diluted basis for the fourth quarter of 2012. Net earnings increased as a $607,000 increase in net interest income, a $275,000 decrease in the provision for loan losses and a $277,000 increase in noninterest income were partially offset by a $398,000 increase in noninterest expense and a $411,000 increase in income tax expense.
Increases in noninterest income consisted primarily of $202,000 in ATM/debit card income and $66,000 in mortgage banking fees. Increases in noninterest expenses were primarily related to the 2011 acquisitions and included $419,000 in salaries and benefits costs, $474,000 in occupancy expense, $246,000 in legal and professional fees, $127,000 in expenses on ORE and repossessed assets and $78,000 in ATM and debit card expense. The increased costs were partially offset by decreases of $694,000 in data processing expenses, $122,000 in shares tax expense and $123,000 in marketing expenses.
Fully taxable-equivalent ("FTE") net interest income totaled $14.0 million and $13.4 million for the quarters ended December 31, 2012 and 2011, respectively. The FTE net interest income increased $605,000 in prior year quarterly comparison primarily due to a $109.3 million increase in the volume of average earning assets as a result of the three acquisitions completed in the second half of 2011. The average volume of loans increased $95.7 million in quarterly comparison and the average yield on loans decreased 48 basis points, from 6.69% to 6.21%. Purchase accounting adjustments on acquired loans added 22 basis points to the average yield on loans for the fourth quarter of 2012 and 19 basis points for the fourth quarter of 2011. Net of the impact of the purchase accounting adjustments, average loan yields declined 51 basis points in prior year quarterly comparison to 5.99%. Loan yields have declined primarily as the result of a sustained low market interest rate environment.
The average volume of investment securities increased $36.5 million in quarterly comparison primarily due to $32.6 million in securities acquired with the First Louisiana National Bank acquisition in December of 2011. Additionally, portions of excess cash flow from the 2011 acquisitions were used to purchase primarily agency mortgage-backed securities for the portfolio. As a result of the purchases, the average volume of overnight interest bearing deposits earning 0.28% decreased $14.5 million in quarterly comparison. The average tax equivalent yield on investment securities decreased 41 basis points, from 3.00% to 2.59% primarily due to lower reinvestment rates. The average yield on all earning assets decreased 29 basis points in prior year quarterly comparison, from 5.12% for the fourth quarter of 2011 to 4.83% for the fourth quarter of 2012. Net of the impact of purchase accounting adjustments, the average yield on total earning assets declined 30 basis points, from 5.00% to 4.70% for the three month periods ended December 31, 2011 and 2012, respectively.
The impact to interest expense of a $55.0 million increase in the average volume of interest bearing liabilities was offset by a 10 basis point decrease in the average rate paid on interest-bearing liabilities, from 0.68% at December 31, 2011 to 0.58% at December 31, 2012. Net of purchase accounting adjustments on acquired certificates of deposit, the average rate paid on interest bearing liabilities was 0.66% for the fourth quarter of 2012 compared to 0.83% for the fourth quarter of 2011.
As a result of these changes in volume and yield on earning assets and interest bearing liabilities, the FTE net interest margin decreased 19 basis points, from 4.60% for the fourth quarter of 2011 to 4.41% for the fourth quarter of 2012. Net of purchase accounting adjustments on loans and deposits, the FTE margin decreased 16 basis points, from 4.38% for the fourth quarter of 2011 to 4.22% for the fourth quarter of 2012.
Fourth Quarter 2012 vs. Third Quarter 2012 Earnings Comparison
In sequential quarter comparison, net earnings before dividends on preferred stock decreased $1.0 million for the fourth quarter of 2012 compared with the third quarter of 2012 primarily due to an increase of $775,000 in merger related costs and $200,000 in additional provision expense incurred in the fourth quarter. Noninterest expenses increased $937,000 including $775,000 of merger related expenses and consisted primarily of increases of $331,000 in data processing expenses (merger-related increase of $281,000), $204,000 in legal and professional fees (net merger-related increase of $144,000), $134,000 in expenses on ORE and repossessed assets, and $108,000 in printing and supplies costs. The sequential increase in expenses related to branches opened in the second half of 2012 was $138,000, or approximately $0.01 per share. Noninterest income decreased $57,000 in sequential quarter comparison. The net decrease resulted primarily from a $69,000 net gain on sale of securities and a $51,000 gain on sale of ORE recorded in the third quarter of 2012 that were partially offset by an $84,000 increase in ATM and debit card income in the fourth quarter of 2012. The provision for loan losses increased $200,000 primarily due to an increase in net charge-offs on loans from 7 basis points for the third quarter of 2012 to 19 basis points in the fourth quarter of 2012. Net interest income decreased $205,000, primarily driven by a $249,000 decrease in interest income on investment securities.
FTE net interest income decreased $181,000 in sequential quarter comparison primarily due to a $33.2 million decrease in the average volume of investment securities combined with a 4 basis point decrease in the average yield on investment securities. The impact to net interest income of a $26.5 million increase in the average volume of loans was offset by a 25 basis decline in the yield on loans. The average volume of interest-bearing liabilities decreased $15.5 million and noninterest-bearing deposits increased $15.7 million in the fourth quarter of 2012. The FTE net interest margin declined 5 basis points, from 4.46% for the three months ended September 30, 2012 to 4.41% for the three months ended December 31, 2012. Net of purchase accounting adjustments, the FTE net interest margin decreased 4 basis points, from 4.26% to 4.22% in sequential quarter comparison.
Year-Over-Year Earnings Comparison
In year-over-year comparison, net earnings before dividends on preferred stock increased
$5.2 million primarily as a result of a $10.0 million improvement in net interest income, a $1.9 million decrease in provision for loan loss and a $1.9 million increase in noninterest income which offset a $5.4 million increase in noninterest expense and a $3.2 million increase in income tax expense. Of the $10.0 million increase in net interest income, a total of $5.4 million was earned from the branches acquired in the third and fourth quarters of 2011. An increase in purchase accounting adjustments totaling $1.8 million also contributed to the increase in net interest income. Interest income on investments and other interest-bearing accounts increased $2.1 million in prior year-to-date comparison and included interest earned on excess cash invested from the 2011 acquisitions.
Increases in noninterest income consisted primarily of $509,000 in service charges on deposit accounts, $803,000 in ATM and debit card income, $130,000 in mortgage banking fees and a $105,000 net gain on sale of securities. Increases in non-interest expense included primarily $3.0 million in salary and benefits costs, $2.0 million in occupancy expense, and $303,000 in ATM/debit card expense.
In year-to-date comparison, FTE net interest income increased $9.8 million primarily due to a $9.9 million increase in FTE interest income. The increase resulted primarily from a $244.7 million increase in the average volume of earning assets which offset a 22 basis point reduction in the average yield on earning assets, from 5.14% at December 31, 2011 to 4.92% at December 31, 2012. Net of a 16 basis point effect of discount accretion on acquired loans, the average yield on earning assets was 4.76% at December 31, 2012.
Interest expense increased minimally in year-over-year comparison as the impact of the increase in average volume of interest-bearing liabilities on interest expense was mostly offset by the impact of lower rates paid on interest-bearing liabilities. The average volume of interest-bearing liabilities increased $200.4 million in year-over year comparison, from $745.7 million at December 31, 2011 to $946.1 million at December 31, 2012. The average rate paid decreased 16 basis points, from 0.78% at December 31, 2011 to 0.62% at December 31, 2012. Net of an 11 basis point effect of premium amortization on acquired certificates of deposit, the average rate paid on interest-bearing liabilities was 0.73% for the year ended December 31, 2012. The FTE net interest margin declined 13 basis points, from 4.58% for the year ended December 31, 2011 to 4.45% for the year ended December 31, 2012. Net of purchase accounting adjustments, the FTE net interest margin declined 25 basis points, from 4.47% to 4.22% for the years ended December 31, 2011 and 2012, 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, 2012. 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 59 banking centers in Louisiana and Texas and is connected to a worldwide ATM network that provides customers with access to more than 43,000 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, 2011 filed with the SEC on March 15, 2012 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
December 31, % September 30, %
EARNINGS DATA 2012 2011 Change 2012 Change
---- ---- ------ ---- ------
Total interest income $15,036 $14,564 3.2% $15,355 -2.1%
Total interest expense 1,354 1,489 -9.1% 1,468 -7.8%
----- ----- -----
Net interest income 13,682 13,075 4.6% 13,887 -1.5%
------ ------ ------
FTE net interest income 13,972 13,401 4.3% 14,187 -1.5%
------ ------ ------
Provision for loan losses 500 775 -35.5% 300 66.7%
--- --- ---
Non-interest income 3,697 3,420 8.1% 3,754 -1.5%
Non-interest expense 14,567 14,169 2.8% 13,630 6.9%
------ ------ ------
Earnings before income taxes 2,312 1,551 49.1% 3,711 -37.7%
Income tax expense 683 272 151.1% 1,062 -35.7%
--- --- -----
Net earnings 1,629 1,279 27.4% 2,649 -38.5%
Dividends on preferred stock 367 400 -8.3% 400 -8.3%
Net earnings available to common
shareholders $1,262 $879 43.6% $2,249 -43.9%
====== ==== ======
PER COMMON SHARE DATA
Basic earnings per share $0.12 $0.09 33.3% $0.21 -42.9%
Diluted earnings per share 0.12 0.09 33.3% 0.21 -42.9%
Quarterly dividends per share 0.07 0.07 0.0% 0.07 0.0%
Book value at end of period 13.10 12.41 5.6% 13.01 0.7%
Tangible book value at period end 8.49 9.34 -9.1% 10.01 -15.2%
Market price at end of period 16.35 13.01 25.7% 16.19 1.0%
Shares outstanding at period end 11,236,159 10,465,506 7.4% 10,479,077 7.2%
Weighted average shares outstanding
Basic 10,512,255 9,976,057 5.4% 10,478,456 0.32%
Diluted 10,599,583 9,988,472 6.1% 10,517,999 0.78%
AVERAGE BALANCE SHEET DATA
Total assets $1,400,244 $1,273,272 10.0% $1,398,355 0.1%
Loans and leases 799,316 703,590 13.6% 772,838 3.4%
Total deposits 1,153,728 1,035,792 11.4% 1,149,892 0.3%
Total common equity 136,006 123,912 9.8% 135,055 0.7%
Total tangible common equity 104,343 104,257 0.1% 103,577 0.7%
Total equity 168,115 155,912 7.8% 167,055 0.6%
SELECTED RATIOS 12/31/2012 12/31/2011 9/30/2012
---------- ---------- ---------
Annualized return on average assets 0.36% 0.27% 33.3% 0.64% -43.8%
Annualized return on average common equity 3.69% 3.34% 10.5% 6.62% -44.3%
Average loans to average deposits 69.28% 67.93% 2.0% 67.21% 3.1%
Taxable-equivalent net interest margin 4.40% 4.60% -4.3% 4.46% -1.3%
Tier 1 leverage capital ratio 11.82% 11.14% 6.1% 10.53% 12.3%
CREDIT QUALITY
Allowance for loan losses (ALLL) as a % of
total loans 0.70% 0.97% -27.8% 0.91% -23.1%
Nonperforming assets to tangible equity +
ALLL 12.79% 10.33% 23.8% 10.74% 19.1%
Nonperforming assets to total loans, other
real estate
owned and other repossessed assets 1.76% 1.88% -6.6% 1.90% -7.6%
Annualized QTD net charge-offs to total
loans 0.19% 0.44% -56.5% 0.07% 173.6%
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands)
-------------
BALANCE SHEET December 31, December 31, % September 30, June 30,
2012 2011 Change 2012 2012
---- ---- ------ ---- ----
Assets
Cash and cash equivalents $73,745 $83,303 -11.5% $59,655 $50,646
------- ------- ------- -------
Securities available-for-sale 424,617 367,241 15.6% 341,170 370,293
Securities held-to-maturity 153,524 100,472 52.8% 117,628 123,054
------- ------- ------- -------
Total investment securities 578,141 467,713 23.6% 458,798 493,347
------- ------- ------- -------
Time deposits held in banks 709 710 -0.1% 709 710
Other investments 8,310 5,637 47.4% 5,820 5,815
Total loans 1,046,940 746,305 40.3% 808,833 751,455
Allowance for loan losses (7,370) (7,276) 1.3% (7,374) (7,222)
------ ------ ------ ------
Loans, net 1,039,570 739,029 40.7% 801,459 744,233
--------- ------- ------- -------
Premises and equipment 63,461 44,598 42.3% 48,086 45,550
Goodwill and other intangibles 51,831 32,106 61.4% 31,391 31,573
Other assets 35,964 23,660 52.0% 23,018 22,953
------ ------ ------ ------
Total assets $1,851,731 $1,396,756 32.6% $1,428,936 $1,394,827
========== ========== ========== ==========
Liabilities and Shareholders' Equity
Non-interest bearing deposits $380,557 $254,755 49.4% $306,463 $269,110
Interest-bearing deposits 1,171,347 910,051 28.7% 872,549 884,651
--------- ------- ------- -------
Total deposits 1,551,904 1,164,806 33.2% 1,179,012 1,153,761
Securities sold under agreements to
repurchase and other short term
borrowings 41,447 46,078 -10.1% 55,233 50,347
Federal Home Loan Bank advances 27,128 0 100.0% 0 0
Notes payable 2,000 0 100.0% 0 0
Junior subordinated debentures 29,384 15,465 90.0% 15,465 15,465
Other liabilities 10,624 8,570 24.0% 10,891 9,414
------ ----- ------ -----
Total liabilities 1,662,487 1,234,919 34.6% 1,260,601 1,228,987
--------- --------- --------- ---------
Total shareholders' equity 189,244 161,837 16.9% 168,335 165,840
------- ------- ------- -------
Total liabilities and shareholders'
equity $1,851,731 $1,396,756 32.6% $1,428,936 $1,394,827
========== ========== ========== ==========
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands except per share data)
-----------------------------------
Three Months Ended Year Ended
EARNINGS STATEMENT December 31, % December 31, %
2012 2011 Change 2012 2011 Change
---- ---- ------ ---- ---- ------
Interest income $15,036 $14,564 3.2% $61,022 $51,007 19.6%
Interest expense 1,354 1,489 -9.1% 5,840 5,802 0.7%
----- ----- ----- -----
Net interest income 13,682 13,075 4.6% 55,182 45,205 22.1%
------ ------
Provision for loan losses 500 775 -35.5% 2,050 3,925 -47.8%
--- --- ----- -----
Service charges on deposit accounts 1,840 1,855 -0.8% 7,430 6,921 7.4%
Other charges and fees 1,857 1,565 18.7% 7,514 6,140 22.4%
----- ----- ----- -----
Total non-interest income 3,697 3,420 8.1% 14,944 13,061 14.4%
----- ----- ------ ------
Salaries and employee benefits 6,202 5,783 7.2% 24,713 21,763 13.6%
Occupancy expense 3,037 2,563 18.5% 11,320 9,281 22.0%
FDIC premiums 235 210 11.9% 930 921 1.0%
Other non-interest expense 5,093 5,613 -9.3% 17,692 17,339 2.0%
----- ----- ------ ------
Total non-interest expense 14,567 14,169 2.8% 54,655 49,304 10.9%
------ ------ ------ ------
Earnings before income taxes 2,312 1,551 49.1% 13,421 5,037 166.4%
Income tax expense 683 272 151.1% 3,779 564 570.0%
--- --- ----- ---
Net earnings 1,629 1,279 27.4% 9,642 4,473 115.6%
Dividends on preferred stock 367 400 -8.3% 1,547 1,802 -14.2%
Net earnings available to common
shareholders $1,262 $879 43.6% $8,095 $2,671 203.1%
====== ==== ====== ======
Earnings per common share, diluted $0.12 $0.09 33.3% $0.77 $0.27 185.2%
===== ===== ===== =====
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands except per share data)
-----------------------------------
EARNINGS STATEMENT Fourth Third Second First Fourth
QUARTERLY TRENDS Quarter Quarter Quarter Quarter Quarter
2012 2012 2012 2012 2011
---- ---- ---- ---- ----
Interest income $15,036 $15,355 $15,298 $15,333 $14,564
Interest expense 1,354 1,468 1,489 1,529 1,489
----- ----- ----- ----- -----
Net interest income 13,682 13,887 13,809 13,804 13,075
Provision for loan losses 500 300 575 675 775
--- --- --- --- ---
Net interest income after
provision for loan loss 13,182 13,587 13,234 13,129 12,300
Total non-interest income 3,697 3,754 3,965 3,528 3,420
Total non-interest expense 14,567 13,630 13,790 12,668 14,169
------ ------ ------ ------ ------
Earnings before income
taxes 2,312 3,711 3,409 3,989 1,551
Income tax expense 683 1,062 931 1,103 272
--- ----- --- ----- ---
Net earnings 1,629 2,649 2,478 2,886 1,279
Dividends on preferred
stock 367 400 380 400 400
Net earnings available to
common shareholders $1,262 $2,249 $2,098 $2,486 $879
====== ====== ====== ====== ====
Earnings per common share,
diluted $0.12 $0.21 $0.20 $0.24 $0.09
===== ===== ===== ===== =====
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands)
-------------
Acquired from
COMPOSITION OF LOANS December 31, December 31, % September 30, PSB at Fair
2012 2011 Change 2012 Value (1)
---- ---- ------ ---- --------
Commercial, financial, and agricultural $315,655 $223,283 41.4% $266,046 $59,093
Lease financing receivable 5,769 4,276 34.9% 5,041 0
Real estate - construction 75,334 52,712 42.9% 57,727 16,431
Real estate - commercial 414,384 280,798 47.6% 293,579 132,071
Real estate - residential 142,858 113,582 25.8% 110,735 34,687
Installment loans to individuals 90,561 69,980 29.4% 73,334 17,652
Other 2,379 1,674 42.1% 2,371 119
----- ----- ----- ---
Total loans $1,046,940 $746,305 40.3% $808,833 $260,053
========== ======== ======== ========
Acquired from
COMPOSITION OF DEPOSITS December 31, December 31, % September 30, PSB at Fair
2012 2011 Change 2012 Value (1)
---- ---- ------ ---- --------
Noninterest bearing $380,557 $254,755 49.4% $306,463 $85,048
NOW & Other 338,296 235,168 43.9% 239,937 81,659
Money Market/Savings 520,573 350,342 48.6% 377,405 143,826
Time Deposits of less than $100,000 133,304 140,428 -5.1% 111,356 33,777
Time Deposits of $100,000 or more 179,174 184,113 -2.7% 143,851 56,257
------- ------- ------- ------
Total deposits $1,551,904 $1,164,806 33.2% $1,179,012 $400,567
========== ========== ========== ========
(1) Amounts acquired from PSB at fair value on December 28, 2012.
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands)
-------------
ASSET QUALITY DATA December 31, December 31, % September 30, June 30,
2012 2011 Change 2012 2012
---- ---- ------ ---- ----
Nonaccrual loans $8,887 $6,229 42.7% $8,307 $7,370
Loans past due 90 days and over 1,986 231 759.7% 532 62
----- --- --- ---
Total nonperforming loans 10,873 6,460 68.3% 8,839 7,432
Other real estate owned 7,496 7,369 1.7% 6,608 6,968
Other repossessed assets 151 326 -53.7% 51 2
--- --- --- ---
Total nonperforming assets $18,520 $14,155 30.8% $15,498 $14,402
======= ======= ======= =======
Troubled debt restructurings $5,062 $456 1010.1% $242 $417
====== ==== ==== ====
Nonperforming assets to total assets 1.00% 1.01% -1.0% 1.08% 1.03%
Nonperforming assets to total loans +
OREO + other repossessed assets 1.76% 1.88% -6.4% 1.90% 1.90%
ALLL to nonperforming loans 67.78% 112.63% -39.8% 83.43% 97.17%
ALLL to total loans 0.70% 0.97% -27.8% 0.91% 0.96%
Quarter-to-date charge-offs $557 $882 -36.8% $234 $526
Quarter-to-date recoveries 53 54 -1.9% 86 95
--- --- --- ---
Quarter-to-date net charge-offs $504 $828 -39.1% $148 $431
==== ==== ==== ====
Annualized QTD net charge-offs to total loans 0.19% 0.44% -56.5% 0.07% 0.23%
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands)
-------------
YIELD ANALYSIS Three Months Ended Three Months Ended
December 31, 2012 December 31, 2011
----------------- -----------------
Tax Tax
Average Equivalent Yield/ Average Equivalent Yield/
Balance Interest Rate Balance Interest Rate
------- -------- ---- ------- -------- ----
Taxable securities $352,796 $1,818 2.06% $304,741 $1,825 2.40%
Tax-exempt securities 77,063 1,001 5.20% 88,605 1,122 5.07%
------ ----- ------ -----
Total investment securities 429,859 2,819 2.62% 393,346 2,947 3.00%
----- -----
Federal funds sold 2,959 1 0.13% 11,933 6 0.20%
Time and interest bearing deposits in
other banks 26,249 19 0.28% 40,742 27 0.26%
Other investments 5,820 42 2.89% 5,250 38 2.90%
Loans (1) 799,316 12,479 6.21% 703,590 11,872 6.69%
------- ------ ------- ------
Total interest earning assets 1,264,203 15,360 4.83% 1,154,861 14,890 5.12%
------ ------
Non-interest earning assets 136,041 118,411
------- -------
Total assets $1,400,244 $1,273,272
========== ==========
Interest-bearing liabilities:
Deposits (2) $861,239 $911 0.42% $801,743 $1,038 0.51%
Repurchase agreements 52,155 192 1.46% 56,849 206 1.44%
Federal funds purchased 16 - 0.00% - - 0.00%
Other borrowings 42 - 0.00%
Junior subordinated debentures 15,616 251 6.29% 15,465 245 6.20%
------ --- ------ ---
Total interest-bearing liabilities 929,068 1,354 0.58% 874,057 1,489 0.68%
----- -----
Non-interest bearing liabilities 303,061 243,303
Shareholders' equity 168,115 155,912
------- -------
Total liabilities and shareholders'
equity $1,400,244 $1,273,272
========== ==========
Net interest income (TE) and spread $14,006 4.25% $13,401 4.44%
======= =======
Net interest margin 4.41% 4.60%
(1) Includes $394,000 and $295,000 of interest income from accretable yield on purchased loans from acquisitions for the three months ended December 31, 2012 and 2011, respectively.
(2) Includes $181,000 and $340,000 of reduction in interest expense from premium amortization on time deposits acquired from acquisitions for the three months ended December 31, 2012 and 2011, respectively.
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands)
-------------
YIELD ANALYSIS Year Ended Year Ended
December 31, 2012 December 31, 2011
----------------- -----------------
Tax Tax
Average Equivalent Yield/ Average Equivalent Yield/
Balance Interest Rate Balance Interest Rate
------- -------- ---- ------- -------- ----
Taxable securities $373,277 $8,083 2.17% $226,819 $5,362 2.36%
Tax-exempt securities 80,590 4,120 5.11% 93,796 4,786 5.10%
------ ----- ------ -----
Total investment securities 453,867 12,203 2.69% 320,615 10,148 3.17%
------ ------
Federal funds sold 3,482 7 0.20% 6,567 14 0.21%
Time and interest bearing deposits in
other banks 34,087 92 0.27% 61,292 196 0.32%
Other investments 5,758 184 3.20% 5,107 155 3.04%
Loans (1) 766,018 49,776 6.48% 624,889 41,887 6.70%
------- ------ ------- ------
Total interest earning assets 1,263,212 62,262 4.92% 1,018,470 52,400 5.14%
------ ------
Non-interest earning assets 132,903 99,206
------- ------
Total assets $1,396,115 $1,117,676
========== ==========
Interest-bearing liabilities:
Deposits (2) $879,801 $4,100 0.46% $680,551 $4,024 0.59%
Repurchase agreements 50,776 756 1.48% 49,654 807 1.63%
Federal funds purchased 21 - - - - -
Other borrowings 11 - - - - -
Junior subordinated debentures 15,503 984 6.24% 15,465 971 6.19%
------ --- ------ ---
Total interest-bearing liabilities 946,112 5,840 0.62% 745,670 5,802 0.78%
----- -----
Non-interest bearing liabilities 284,090 228,036
Shareholders' equity 165,913 143,970
------- -------
Total liabilities and shareholders'
equity $1,396,115 $1,117,676
========== ==========
Net interest income (TE) and spread $56,422 4.30% $46,598 4.36%
======= =======
Net interest margin 4.45% 4.58%
(1) Includes $1.8 million and $413,000 of interest income from accretable yield on purchased loans from acquisitions for the year ended December 31, 2012 and 2011, respectively.
(2) Includes $1.0 million and $568,000 of reduction in interest expense from premium amortization on time deposits acquired from acquisitions for the year ended December 31, 2012 and 2011, respectively.
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures (unaudited)
(in thousands except per share data)
-----------------------------------
For the Quarter Ended
December 31, December 31, September 30,
Per Common Share
Data 2012 2011 2012
---- ---- ----
Book value per
common share $13.10 $12.41 $13.01
Effect of
intangible assets
per share 4.61 3.07 3.00
---- ---- ----
Tangible book value
per common share $8.49 $9.34 $10.01
===== ===== ======
Earnings per share $0.12 $0.09 $0.21
Effect of merger-
related costs,
after-tax 0.06 0.08 0.02
Operating earnings
per share $0.18 $0.17 $0.23
===== ===== =====
Average Balance
Sheet Data
Total equity $168,115 $155,912 $167,055
Less preferred
equity 32,109 32,000 32,000
------ ------ ------
Total common equity $136,006 $123,912 $135,055
Less intangible
assets 31,663 19,655 31,478
------ ------ ------
Tangible common
equity $104,343 $104,257 $103,577
======== ======== ========
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.
