MidSouth Bancorp, Inc. Reports Fourth Quarter 2012 Results
MidSouth Bancorp, Inc. Reports Fourth Quarter 2012 Results
- 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
PR Newswire
LAFAYETTE, La., Jan. 29, 2013
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
For the Quarter Ended Quarter
Ended
December 31, % September %
30,
EARNINGS DATA 2012 2011 Change 2012 Change
Total interest $ $ 3.2% $ -2.1%
income 15,036 14,564 15,355
Total interest 1,354 1,489 -9.1% 1,468 -7.8%
expense
Net interest 13,682 13,075 4.6% 13,887 -1.5%
income
FTE net interest 13,972 13,401 4.3% 14,187 -1.5%
income
Provision for 500 775 -35.5% 300 66.7%
loan losses
Non-interest 3,697 3,420 8.1% 3,754 -1.5%
income
Non-interest 14,567 14,169 2.8% 13,630 6.9%
expense
Earnings 2,312 1,551 49.1% 3,711 -37.7%
before income taxes
Income tax 683 272 151.1% 1,062 -35.7%
expense
Net earnings 1,629 1,279 27.4% 2,649 -38.5%
Dividends on 367 400 -8.3% 400 -8.3%
preferred stock
Net earnings $ $ $
available to common 1,262 879 43.6% 2,249 -43.9%
shareholders
PER COMMON SHARE DATA
Basic earnings $ $ $
per share 0.12 0.09 33.3% -42.9%
0.21
Diluted earnings 0.12 0.09 33.3% 0.21 -42.9%
per share
Quarterly 0.07 0.07 0.0% 0.07 0.0%
dividends per share
Book value at end 13.10 12.41 5.6% 13.01 0.7%
of period
Tangible book 8.49 9.34 -9.1% 10.01 -15.2%
value at period end
Market price at 16.35 13.01 25.7% 16.19 1.0%
end of period
Shares
outstanding at period 11,236,159 10,465,506 7.4% 10,479,077 7.2%
end
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 $ 10.0% $ 0.1%
1,273,272 1,398,355
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 136,006 123,912 9.8% 135,055 0.7%
equity
Total tangible 104,343 104,257 0.1% 103,577 0.7%
common equity
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 0.36% 0.27% 33.3% 0.64% -43.8%
on average assets
Annualized return
on average common 3.69% 3.34% 10.5% 6.62% -44.3%
equity
Average loans to 69.28% 67.93% 2.0% 67.21% 3.1%
average deposits
Taxable-equivalent net 4.40% 4.60% -4.3% 4.46% -1.3%
interest margin
Tier 1 leverage 11.82% 11.14% 6.1% 10.53% 12.3%
capital ratio
CREDIT QUALITY
Allowance for
loan losses (ALLL) as 0.70% 0.97% -27.8% 0.91% -23.1%
a % of total loans
Nonperforming
assets to tangible 12.79% 10.33% 23.8% 10.74% 19.1%
equity + ALLL
Nonperforming
assets to total loans,
other real estate
owned and
other repossessed 1.76% 1.88% -6.6% 1.90% -7.6%
assets
Annualized QTD
net charge-offs to 0.19% 0.44% -56.5% 0.07% 173.6%
total loans
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands)
BALANCE SHEET December December % September June 30,
31, 31, 30,
2012 2011 Change 2012 2012
Assets
Cash and cash $ $ -11.5% $ $
equivalents 73,745 83,303 59,655 50,646
Securities 424,617 367,241 15.6% 341,170 370,293
available-for-sale
Securities 153,524 100,472 52.8% 117,628 123,054
held-to-maturity
Total investment 578,141 467,713 23.6% 458,798 493,347
securities
Time deposits held in 709 710 -0.1% 709 710
banks
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 (7,370) (7,276) 1.3% (7,374) (7,222)
losses
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 51,831 32,106 61.4% 31,391 31,573
intangibles
Other assets 35,964 23,660 52.0% 23,018 22,953
Total assets $ $ 32.6% $ $
1,851,731 1,396,756 1,428,936 1,394,827
Liabilities and
Shareholders' Equity
Non-interest bearing $ $ 49.4% $ $
deposits 380,557 254,755 306,463 269,110
Interest-bearing 1,171,347 910,051 28.7% 872,549 884,651
deposits
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 27,128 0 100.0% 0 0
advances
Notes payable 2,000 0 100.0% 0 0
Junior subordinated 29,384 15,465 90.0% 15,465 15,465
debentures
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' 189,244 161,837 16.9% 168,335 165,840
equity
Total liabilities $ $ $ $
and shareholders' 1,851,731 1,396,756 32.6% 1,428,936 1,394,827
equity
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 $ $ 3.2% $ $ 19.6%
15,036 14,564 61,022 51,007
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 500 775 -35.5% 2,050 3,925 -47.8%
losses
Service charges 1,840 1,855 -0.8% 7,430 6,921 7.4%
on deposit accounts
Other charges and fees 1,857 1,565 18.7% 7,514 6,140 22.4%
Total non-interest 3,697 3,420 8.1% 14,944 13,061 14.4%
income
Salaries and 6,202 5,783 7.2% 24,713 21,763 13.6%
employee benefits
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 5,093 5,613 -9.3% 17,692 17,339 2.0%
expense
Total non-interest 14,567 14,169 2.8% 54,655 49,304 10.9%
expense
Earnings before income 2,312 1,551 49.1% 13,421 5,037 166.4%
taxes
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 367 400 -8.3% 1,547 1,802 -14.2%
stock
Net earnings available $ $ 43.6% $ $ 203.1%
to common shareholders 1,262 879 8,095 2,671
Earnings per common $ $ 33.3% $ $ 185.2%
share, diluted 0.12 0.09 0.77 0.27
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 500 300 575 675 775
losses
Net interest income
after provision for 13,182 13,587 13,234 13,129 12,300
loan loss
Total non-interest 3,697 3,754 3,965 3,528 3,420
income
Total non-interest 14,567 13,630 13,790 12,668 14,169
expense
Earnings before 2,312 3,711 3,409 3,989 1,551
income taxes
Income tax expense 683 1,062 931 1,103 272
Net earnings 1,629 2,649 2,478 2,886 1,279
Dividends on 367 400 380 400 400
preferred stock
Net earnings $
available to common $ 1,262 $ 2,249 $ 2,098 $ 2,486 879
shareholders
Earnings per common $ 0.12 $ 0.21 $ $ $
share, diluted 0.20 0.24 0.09
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands)
Acquired
from
December 31, December 31, % September PSB at
COMPOSITION OF LOANS 30, Fair
2012 2011 Change 2012 Value (1)
Commercial, $ $ $ $
financial, and 315,655 223,283 41.4% 266,046 59,093
agricultural
Lease financing 5,769 4,276 34.9% 5,041 0
receivable
Real estate - 75,334 52,712 42.9% 57,727 16,431
construction
Real estate - 414,384 280,798 47.6% 293,579 132,071
commercial
Real estate - 142,858 113,582 25.8% 110,735 34,687
residential
Installment loans to 90,561 69,980 29.4% 73,334 17,652
individuals
Other 2,379 1,674 42.1% 2,371 119
Total loans $ $ 40.3% $ $
1,046,940 746,305 808,833 260,053
Acquired
from
COMPOSITION OF December 31, December 31, % September PSB at
DEPOSITS 30, Fair
2012 2011 Change 2012 Value (1)
Noninterest bearing $ $ 49.4% $ $
380,557 254,755 306,463 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 133,304 140,428 -5.1% 111,356 33,777
less than $100,000
Time Deposits of 179,174 184,113 -2.7% 143,851 56,257
$100,000 or more
Total deposits $ $ 33.2% $ $
1,551,904 1,164,806 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)
December December % September June 30,
ASSET QUALITY DATA 31, 31, 30,
2012 2011 Change 2012 2012
$ $ $ $
Nonaccrual loans 8,887 6,229 42.7% 8,307
7,370
Loans past due 1,986 231 759.7% 532 62
90 days and over
Total nonperforming 10,873 6,460 68.3% 8,839 7,432
loans
Other real estate 7,496 7,369 1.7% 6,608 6,968
owned
Other repossessed 151 326 -53.7% 51 2
assets
Total nonperforming $ $ 30.8% $ $
assets 18,520 14,155 15,498 14,402
Troubled debt $ $ $ $
restructurings 5,062 456 1010.1% 242
417
Nonperforming assets 1.00% 1.01% -1.0% 1.08% 1.03%
to total assets
Nonperforming assets
to total loans
+
OREO +
other repossessed 1.76% 1.88% -6.4% 1.90% 1.90%
assets
ALLL to nonperforming 67.78% 112.63% -39.8% 83.43% 97.17%
loans
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 53 54 -1.9% 86 95
recoveries
Quarter-to-date net $ $ $ $
charge-offs 504 828 -39.1% 148
431
Annualized QTD net
charge-offs to total 0.19% 0.44% -56.5% 0.07% 0.23%
loans
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 $ $ 2.06% $ $ 2.40%
securities 352,796 1,818 304,741 1,825
Tax-exempt 77,063 1,001 5.20% 88,605 1,122 5.07%
securities
Total investment 429,859 2,819 2.62% 393,346 2,947 3.00%
securities
Federal funds 2,959 1 0.13% 11,933 6 0.20%
sold
Time and
interest bearing
deposits in
other banks 26,249 19 0.28% 40,742 27 0.26%
Other 5,820 42 2.89% 5,250 38 2.90%
investments
Loans (1) 799,316 12,479 6.21% 703,590 11,872 6.69%
Total interest 1,264,203 15,360 4.83% 1,154,861 14,890 5.12%
earning assets
Non-interest 136,041 118,411
earning assets
Total assets $ $
1,400,244 1,273,272
Interest-bearing
liabilities:
Deposits (2) $ $ 0.42% $ $ 0.51%
861,239 911 801,743 1,038
Repurchase 52,155 192 1.46% 56,849 206 1.44%
agreements
Federal funds 16 - 0.00% - - 0.00%
purchased
Other borrowings 42 - 0.00%
Junior
subordinated 15,616 251 6.29% 15,465 245 6.20%
debentures
Total
interest-bearing 929,068 1,354 0.58% 874,057 1,489 0.68%
liabilities
Non-interest
bearing 303,061 243,303
liabilities
Shareholders' 168,115 155,912
equity
Total
liabilities and
shareholders'
equity $ $
1,400,244 1,273,272
Net interest income (TE) and $ 4.25% $ 4.44%
spread 14,006 13,401
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 $ $ 2.17% $ $ 2.36%
securities 373,277 8,083 226,819 5,362
Tax-exempt 80,590 4,120 5.11% 93,796 4,786 5.10%
securities
Total investment 453,867 12,203 2.69% 320,615 10,148 3.17%
securities
Federal funds 3,482 7 0.20% 6,567 14 0.21%
sold
Time and
interest bearing
deposits in
other banks 34,087 92 0.27% 61,292 196 0.32%
Other 5,758 184 3.20% 5,107 155 3.04%
investments
Loans (1) 766,018 49,776 6.48% 624,889 41,887 6.70%
Total interest 1,263,212 62,262 4.92% 1,018,470 52,400 5.14%
earning assets
Non-interest 132,903 99,206
earning assets
Total assets $ $
1,396,115 1,117,676
Interest-bearing
liabilities:
Deposits (2) $ $ 0.46% $ $ 0.59%
879,801 4,100 680,551 4,024
Repurchase 50,776 756 1.48% 49,654 807 1.63%
agreements
Federal funds 21 - - - - -
purchased
Other borrowings 11 - - - - -
Junior
subordinated 15,503 984 6.24% 15,465 971 6.19%
debentures
Total
interest-bearing 946,112 5,840 0.62% 745,670 5,802 0.78%
liabilities
Non-interest
bearing 284,090 228,036
liabilities
Shareholders' 165,913 143,970
equity
Total
liabilities and
shareholders'
equity $ $
1,396,115 1,117,676
Net interest income (TE) and $ 4.30% $ 4.36%
spread 56,422 46,598
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 4.61 3.07 3.00
assets per share
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, 0.06 0.08 0.02
after-tax
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.
Website: http://www.midsouthbank.com
Contact: investor, Rusty Cloutier, President & CEO, or Jim McLemore, CFA, Sr.
EVP & CFO, +1.337.237.8343
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