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MIDSOUTH BANCORP INC
Symbol U : MSL
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MidSouth Bancorp, Inc. Reports Fourth Quarter 2012 Results

2013-01-29 16:10 ET - News Release

- Diluted EPS $0.12 per common share versus $0.09 per common share YOY
- Operating EPS of $0.18 per common share excluding merger-related charges
- Merger with PSB Financial Corporation completed

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.

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