MIDSOUTH BANCORP, INC. LAFAYETTE, La., Jan. 27, 2015 /PRNewswire/ -- MidSouth Bancorp, Inc. ("MidSouth") (NYSE:MSL) today reported quarterly net earnings available to common shareholders of $3.5 million for the fourth quarter of 2014, compared to net earnings available to common shareholders of $3.4 million reported for the fourth quarter of 2013 and $4.3 million in net earnings available to common shareholders for the third quarter of 2014. Diluted earnings for the fourth quarter of 2014 were $0.30 per common share, compared to $0.29 per common share reported for the fourth quarter of 2013 and $0.37 per common share reported for the third quarter of 2014. Third quarter 2014 net earnings included $700,000 of an after-tax gain on the sale of a commercial property held as other real estate ("ORE"), an after-tax charge of $168,000 on the redemption of the Company's Statutory Trust 1 and Capital Securities (TRUPS), and an after-tax charge of $256,000 for losses on disposal of fixed assets incurred in the quarter. Net earnings for the fourth and third quarters of 2014 also included after-tax charges for efficiency consultant expenses of $101,000 and $130,000, respectively. Excluding these non-operating income and expenses, operating earnings per share for the fourth and third quarters of 2014 was $0.31 and $0.36, respectively. In addition, a special loan loss reserve for potential yet unidentified energy loan losses in the amount of $650,000, or approximately $0.04 per share after-tax, was established in the fourth quarter of 2014.
http://photos.prnewswire.com/prnvar/20100125/MIDSOUTHLOGO
C. R. Cloutier, President and CEO, commenting on fourth quarter earnings remarked, "Excluding an increased provision for loan losses, the fourth quarter represents a continued improvement in the operating performance of the company. On a sequential basis, we saw period-end annualized loan growth of over 11%, core net interest margin improvement and flat operating expenses.
"Obviously we are closely monitoring the effects of the recent sharp decline in oil prices. We continue to communicate with our customers who provide valuable insight on the present energy cycle. Our loan review function continues to stress test our oil and gas loan portfolio and review for potential downgrades. We have not yet identified any specific loan impairments resulting from the recent downturn in oil prices. However, in light of recent developments, we established this quarter a special reserve for potential future energy loan losses that have not yet been identified. The amount of the special reserve was $650,000 or approximately 25 basis points of energy related loans. We believe establishing this reserve is a prudent action at this time.
"MidSouth Bank began as an energy lender during the oil downturn of the 80's and we have a strong thirty year track record of lending to this industry. We have seen many ups and downs in the oil and gas industry over the years, and we don't bet on energy prices in our lending practices."
Balance Sheet
Consolidated assets remained constant at $1.9 billion for the quarters ended December 31, 2014 and September 30, 2014. Our stable core deposit base, which excludes time deposits, totaled $1.3 billion at December 31, 2014 and September 30, 2014 and accounted for 84.1% of deposits compared to 85.7% of deposits, respectively. Net loans totaled $1.3 billion at December 31, 2014, compared to $1.2 billion at September 30, 2014 and $1.1 billion at December 31, 2013. Total loans grew $36.1 million, or 2.9% for the quarter and $146.9 million for the year ended December 31, 2014. The majority of the loan growth during the fourth quarter was in the CRE and C&I portfolios, which was offset by a decline in the construction real estate loans.
MidSouth's Tier 1 leverage capital ratio was 9.52% at December 31, 2014 compared to 9.56% at September 30, 2014. Tier 1 risk-based capital and total risk-based capital ratios were 12.90% and 13.73% at December 31, 2014, compared to 12.93% and 13.63% at September 30, 2014, respectively. Tier 1 common equity to total risk-weighted assets at December 31, 2014 was 8.36%. Tangible common equity totaled $118.6 million at December 31, 2014, compared to $115.3 million at September 30, 2014. Tangible book value per share at December 31, 2014 was $10.46 versus $10.17 at September 30, 2014.
Asset Quality
Nonperforming assets totaled $15.1 million at December 31, 2014, an increase of $2.6 million compared to $12.5 million reported at September 30, 2014. The increase resulted primarily from the addition of a commercial real estate (CRE) loan unrelated to energy that was placed on nonaccrual status during the quarter. The increase in nonaccrual loans in the fourth quarter of 2014 resulted in a lower allowance coverage for nonperforming loans of 103.10% at December 31, 2014, compared to 121.25% at September 30, 2014. The ALLL/total loans ratio was 0.87% at December 31, 2014 and 0.75% at September 30, 2014. Including valuation accounting adjustments on acquired loans, the total valuation accounting adjustment plus ALLL was 1.29% of loans at December 31, 2014. The ratio of annualized net charge-offs to total loans was 0.28% for the three months ended December 31, 2014 compared to 0.26% for the three months ended September 30, 2014.
Total nonperforming assets to total loans plus ORE and other assets repossessed was 1.17% at December 31, 2014 compared to 0.99% at September 30, 2014. Loans classified as troubled debt restructurings ("TDRs") totaled $410,000 at December 31, 2014 compared to $416,000 at September 30, 2014. Classified assets, including ORE, decreased $0.8 million, or 2.3%, to $33.6 million at December 31, 2014 compared to $34.4 million at September 30, 2014.
Fourth Quarter 2014 vs. Fourth Quarter 2013 Earnings Comparison
Fourth quarter 2014 net earnings available to common shareholders totaled $3.5 million compared to $3.4 million for the fourth quarter of 2013. Revenues from consolidated operations increased $875,000 in quarterly comparison. Net interest income increased $721,000 in quarterly comparison, as decreases of $566,000 in loan valuation income and $310,000 in interest income on investment securities were offset primarily by a $1.3 million increase in interest income earned on a higher volume of loans and a $259,000 decrease in interest expense on junior subordinated debentures. Noninterest income increased $154,000 in quarterly comparison, from $4.9 million for the three months ended December 31, 2013 to $5.1 million for the three months ended December 31, 2014. The increase in noninterest income resulted primarily from a $147,000 increase in ATM/debit card income.
Excluding non-operating expenses of $156,000, fourth quarter 2014 noninterest expenses decreased $1.3 million compared to fourth quarter 2013 and primarily consisted of decreases of $522,000 in salaries and benefits costs, $166,000 in occupancy expenses, $176,000 in legal and professional fees, and $119,000 in courier expense, combined with smaller decreases in several other noninterest expense categories. The provision for loan losses increased $1.9 million in quarterly comparison, primarily due to establishing the aforementioned special reserve in the amount of $650,000 and an impairment of approximately $575,000 related to a CRE loan unrelated to energy being placed on a non-accrual status.
Dividends paid on the Series B Preferred Stock issued to the Treasury as a result of our participation in the Small Business Lending Fund ("SBLF") totaled $80,000 for the fourth quarter of 2014 based on a dividend rate of 1.00%. The dividend rate is set at 1.00% through February 25, 2016. The Series C Preferred Stock issued with the December 28, 2012 acquisition of PSB Financial Corporation ("PSB") paid dividends totaling $94,000 for the three months ended December 31, 2014.
Fully taxable-equivalent ("FTE") net interest income totaled $20.5 million and $19.8 million for the quarters ended December 31, 2014 and 2013, respectively. The FTE net interest income increased $662,000 in prior year quarterly comparison primarily due to a $752,000 increase in interest income on loans despite a $566,000 reduction in purchase accounting adjustments on acquired loans. The increased interest income on loans resulted from a $122.2 million increase in the average volume of loans in quarterly comparison. The average yield on loans decreased 37 basis points, from 6.27% to 5.90%. The purchase accounting adjustments added 26 basis points to the average yield on loans for the fourth quarter of 2014 and 51 basis points to the average yield on loans for the fourth quarter of 2013. Net of the impact of the purchase accounting adjustments, average loan yields declined 12 basis points in prior year quarterly comparison, from 5.76% to 5.64%. Loan yields have declined primarily as the result of a sustained low interest rate environment.
Investment securities totaled $418.2 million, or 21.6% of total assets at December 31, 2014, versus $497.2 million, or 26.9% of total assets at December 31, 2013. The investment portfolio had an effective duration of 3.2 years and a net unrealized gain of $4.4 million at December 31, 2014. The average volume of investment securities decreased $85.1 million in prior year quarterly comparison. The average tax equivalent yield on investment securities increased 17 basis points, from 2.57% to 2.74%. The $85.1 million decrease in the average volume of investment securities was used to fund loan growth during the same period.
The average yield on all earning assets decreased 11 basis points in prior year quarterly comparison, from 5.06% for the fourth quarter of 2013 to 4.95% for the fourth quarter of 2014. Net of the impact of purchase accounting adjustments, the average yield on total earning assets increased 5 basis points, from 4.72% to 4.77% for the three month periods ended December 31, 2013 and 2014, respectively, due to a favorable shift in earning assets from investment securities to loans.
The impact to interest expense of a $29.5 million increase in the average volume of interest- bearing liabilities was offset by a 9 basis point decrease in the average rate paid on interest- bearing liabilities, from 0.49% at December 31, 2013 to 0.40% at December 31, 2014. Net of purchase accounting adjustments on acquired certificates of deposit and FHLB borrowings, the average rate paid on interest-bearing liabilities was 0.55% for the fourth quarter of 2013 and declined to 0.44% for the fourth quarter of 2014.
As a result of these changes in volume and yield on earning assets and interest bearing liabilities, the FTE net interest margin decreased 4 basis points, from 4.69% for the fourth quarter of 2013 to 4.65% for the fourth quarter of 2014. Net of purchase accounting adjustments on loans, deposits and FHLB borrowings, the FTE margin increased 13 basis points, from 4.31% for the fourth quarter of 2013 to 4.44% for the fourth quarter of 2014.
Fourth Quarter 2014 vs. Third Quarter 2014 Earnings Comparison
In sequential-quarter comparison, net earnings available to common shareholders decreased $808,000 primarily due to a $1.5 million increase in the provision for loan losses. The increase in provision for loan losses in the fourth quarter was primarily due to the aforementioned special reserve in the amount of $650,000 and an impairment in the amount of approximately $575,000 on a CRE loan unrelated to energy being placed on non-accrual. Additionally, the decrease in net earnings available to common shareholders resulted from a $1.1 million decrease in non-interest income. Excluding the $1.1 million gain on the sale of a commercial property held as ORE included in third quarter 2014, noninterest income decreased $67,000 in sequential-quarter comparison as a $161,000 decrease in service charges on deposit accounts was partially offset by a $96,000 increase in the cash surrender value of life insurance.
Third quarter noninterest expenses included a charge of $258,000 on the redemption of the Company's Statutory Trust 1 and Capital Securities (TRUPS) and a charge of $394,000 for losses on disposal of fixed assets incurred in the quarter. Additionally, noninterest expenses in the fourth and third quarters of 2014 included efficiency consultant expenses of $156,000 and $200,000, respectively. Excluding these non-operating expenses, noninterest expense increased $166,000 in sequential-quarter comparison and consisted primarily of an increase of $147,000 in marketing expenses.
FTE net interest income increased $640,000 in sequential-quarter comparison primarily due to an increase of $31.8 million in the average volume of loans. The average yield on loans increased 2 basis points, from 5.88% for the third quarter of 2014 to 5.90% for the fourth quarter of 2014. Net of purchase accounting adjustments, the loan yield declined 2 basis points, from 5.66% to 5.64% during the same period. The average yield on total earning assets decreased 1 basis point for the same period, from 4.96% to 4.95%, respectively. Average interest bearing liabilities increased $20.7 million, as a $26.2 million increase in the average volume of interest bearing deposits was partially offset by a $4.1 million average decrease in junior subordinated debentures. As a result of these changes in volume and yield on earning assets and interest bearing liabilities, the FTE net interest margin increased 4 basis points, from 4.61% to 4.65%. Net of purchase accounting adjustments, the FTE net interest margin increased 2 basis points, from 4.42% for the third quarter of 2014 to 4.44% for the fourth quarter of 2014.
Year-Over-Year Earnings Comparison
In year-over-year comparison, net earnings available to common shareholders totaled $18.4 million at December 31, 2014, an increase of $5.6 million compared to $12.8 million at December 31, 2013. The $5.6 million included $3.0 million of executive life insurance proceeds and a $1.1 million gain on sale of ORE recorded in noninterest income for the year ended December 31, 2014. Excluding these non-operating income items and non-operating expenses of $394,000 in losses on disposal of fixed assets, a $258,000 loss on redemption of Trust Preferred Securities, $516,000 in efficiency consultant expenses, and $189,000 of expenses related to the loss of an executive officer, operating earnings totaled $15.6 million at December 31, 2014. Net of $214,000 of net merger and conversion related expenses associated with the PSB acquisition in the first quarter of 2013, operating earnings totaled $13.0 million at December 31, 2013. The net increase of $2.6 million in operating earnings in year-over-year comparison resulted primarily from a $3.7 million decrease in noninterest expense and a $1.0 million increase in noninterest income. Net interest income also increased $1.0 million which included a $732,000 decrease in interest expense. The increase in revenues was partially offset by a $2.6 million increase in the provision for loan losses and a $1.2 million increase in income tax expense.
Excluding non-operating income, increases in noninterest income consisted primarily of $555,000 in service charges on deposit accounts and $809,000 in ATM and debit card income. Excluding the non-operating expenses in 2014 and 2013, decreases in noninterest expense primarily included $666,000 in marketing expenses, $474,000 in salaries and benefits costs, $440,000 in legal and professional fees, $510,000 in expenses on ORE and other repossessed assets, $397,000 in courier expense and $316,000 in printing and supplies. The decreased expenses were partially offset by a $510,000 increase in ATM/debit card expense.
A reduction in the dividend rate paid on the Series B preferred stock issued in connection with SBLF resulted in a $634,000 decrease in dividends on preferred stock in year-over-year comparison.
In year-to-date comparison, FTE net interest income increased $658,000 primarily due to a $732,000 decrease in interest expense. Interest income remained relatively flat in year-over-year comparison, as a $1.1 million decrease in interest income on investments was offset by a $1.3 million increase in interest income on loans. Interest income on loans increased $1.3 million despite a $2.9 million reduction in purchase accounting adjustments on acquired loans. The average volume of loans increased $115.1 million in year-over-year comparison, and the average yield on loans decreased 51 basis points, from 6.47% to 5.96%. The average yield on earning assets decreased in year-over-year comparison, from 5.10% at December 31, 2013 to 4.97% at December 31, 2014. The purchase accounting adjustments added 60 basis points to the average yield on loans for the year ended December 31, 2013 and 28 basis points for the year ended December 31, 2014. Net of purchase accounting adjustments, the average yield on earning assets increased 6 basis points, from 4.71% at December 31, 2013 to 4.77% at December 31, 2014.
Interest expense decreased $732,000 in year-over-year comparison primarily due to a 7 basis point decrease in the average rate paid on interest-bearing liabilities, from 0.52% at December 31, 2013 to 0.45% at December 31, 2014. Net of purchase accounting adjustments, the average rate paid on interest-bearing liabilities decreased 10 basis points, from 0.60% at December 31, 2013 to 0.50% at December 31, 2014. The FTE net interest margin decreased 8 basis points, from 4.71% for the year ended December 31, 2013 to 4.63% for the year ended December 31, 2014. Net of purchase accounting adjustments, the FTE net interest margin increased 13 basis points, from 4.26% to 4.39% for the years ended December 31, 2013 and 2014, respectively, due to a favorable shift in earning assets from investment securities to loans.
Dividends
MidSouth's Board of Directors announced a cash dividend was declared in the amount of $0.09 per share to be paid on its common stock on April 1, 2015 to shareholders of record as of the close of business on March 13, 2015. Additionally, a quarterly cash dividend of 1.00% per preferred share on its 4.00% Non-Cumulative Perpetual Convertible Preferred Stock, Series C was declared payable on April 15, 2015 to shareholders of record as of the close of business on April 1, 2015. MidSouth's Series C Preferred Stock is quoted on the OTC Bulletin Board ("OTCBB") under the ticker symbol MSLXP.
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, 2014. MidSouth Bancorp, Inc. trades on the NYSE under the symbol "MSL." MidSouth's Series C Preferred Stock is quoted on the OTC Bulletin Board ("OTCBB") under the ticker symbol MSLXP. Through its wholly owned subsidiary, MidSouth Bank, N.A., MidSouth offers a full range of banking services to commercial and retail customers in Louisiana and Texas. MidSouth Bank currently has 58 locations in Louisiana and Texas and is connected to a worldwide ATM network that provides customers with access to more than 55,000 surcharge-free ATMs. Additional corporate information is available at 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 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, 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, 2013 filed with the SEC on March 14, 2014 and in its other filings with the SEC. MidSouth does not undertake any obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information, future events or otherwise, except as required by law.
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands except per share data)
-----------------------------------
Quarter Quarter Quarter Quarter Quarter
Ended Ended Ended Ended Ended
EARNINGS DATA 12/31/2014 9/30/2014 6/30/2014 3/31/2014 12/31/2013
---------- --------- --------- --------- ----------
Total interest income $21,477 $21,016 $20,595 $20,399 $21,014
Total interest expense 1,317 1,504 1,482 1,504 1,575
----- ----- ----- ----- -----
Net interest income 20,160 19,512 19,113 18,895 19,439
------ ------ ------ ------ ------
FTE net interest income 20,496 19,856 19,459 19,261 19,834
------ ------ ------ ------ ------
Provision for loan losses 2,700 1,175 1,200 550 800
----- ----- ----- --- ---
Non-interest income 5,050 6,194 5,261 7,917 4,896
Non-interest expense 17,327 17,857 17,123 17,702 18,427
------ ------ ------ ------ ------
Earnings before income taxes 5,183 6,674 6,051 8,560 5,108
Income tax expense 1,519 2,202 1,935 1,702 1,563
----- ----- ----- ----- -----
Net earnings 3,664 4,472 4,116 6,858 3,545
Dividends on preferred stock 174 174 170 180 180
Net earnings available to common
shareholders $3,490 $4,298 $3,946 $6,678 $3,365
====== ====== ====== ====== ======
PER COMMON SHARE DATA
Basic earnings per share $0.31 $0.38 $0.35 $0.59 $0.30
Diluted earnings per share 0.30 0.37 0.34 0.57 0.29
Diluted earnings per share, operating
(Non-GAAP)(*) 0.31 0.36 0.35 0.33 0.29
Quarterly dividends per share 0.09 0.09 0.09 0.08 0.08
Book value at end of period 14.78 14.52 14.25 13.92 13.21
Tangible book value at period end
(Non-GAAP)(*) 10.46 10.17 9.86 9.51 8.76
Market price at end of period 17.34 18.70 19.89 16.83 17.86
Shares outstanding at period end 11,340,735 11,336,594 11,296,147 11,281,647 11,256,712
Weighted average shares outstanding
Basic 11,314,690 11,313,879 11,288,045 11,258,374 11,255,670
Diluted 11,933,388 11,954,811 11,922,525 11,878,660 11,886,433
AVERAGE BALANCE SHEET DATA
Total assets $1,929,750 $1,892,609 $1,887,726 $1,859,212 $1,862,962
Loans and leases 1,264,011 1,232,196 1,205,930 1,147,010 1,141,829
Total deposits 1,563,006 1,525,059 1,532,910 1,527,353 1,515,673
Total common equity 167,430 163,855 159,766 153,012 149,489
Total tangible common equity (Non-
GAAP)(*) 118,291 114,438 110,075 103,036 98,941
Total equity 208,816 205,291 201,257 194,980 191,486
SELECTED RATIOS
Annualized return on average assets,
operating (Non-GAAP)(*) 0.74% 0.87% 0.85% 0.84% 0.72%
Annualized return on average common
equity, operating (Non-GAAP)(*) 8.51% 10.05% 10.08% 10.26% 8.93%
Annualized return on average tangible
common equity, operating (Non-
GAAP)(*) 12.04% 14.39% 14.63% 15.24% 13.49%
Average loans to average deposits 80.87% 80.80% 78.67% 75.10% 75.33%
Taxable-equivalent net interest
margin 4.65% 4.61% 4.58% 4.66% 4.69%
Tier 1 leverage capital ratio 9.52% 9.56% 9.81% 9.71% 9.35%
CREDIT QUALITY
Allowance for loan and lease losses
(ALLL) as a % of total loans 0.87% 0.75% 0.74% 0.74% 0.77%
Nonperforming assets to tangible
equity + ALLL 8.83% 7.50% 8.34% 8.16% 8.02%
Nonperforming assets to total loans,
other real estate owned and other
repossessed assets 1.17% 0.99% 1.10% 1.08% 1.05%
Annualized QTD net charge-offs to
total loans 0.28% 0.26% 0.29% 0.19% 0.24%
(*)See reconciliation of Non-GAAP financial measures on page 6.
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands)
-------------
BALANCE SHEET December 31, September 30, June 30, March 31, December 31,
2014 2014 2014 2014 2013
---- ---- ---- ---- ----
Assets
Cash and cash equivalents $86,872 $54,215 $63,935 $64,503 $59,731
------- ------- ------- ------- -------
Securities available-for-sale 276,984 288,397 301,028 331,488 341,665
Securities held-to-maturity 141,201 145,030 148,927 152,162 155,523
------- ------- ------- ------- -------
Total investment securities 418,185 433,427 449,955 483,650 497,188
------- ------- ------- ------- -------
Other investments 9,990 12,091 12,090 11,530 11,526
Total loans 1,284,431 1,248,373 1,224,182 1,184,189 1,137,554
Allowance for loan losses (11,226) (9,425) (9,075) (8,765) (8,779)
------- ------ ------ ------ ------
Loans, net 1,273,205 1,238,948 1,215,107 1,175,424 1,128,775
--------- --------- --------- --------- ---------
Premises and equipment 69,958 71,115 71,787 72,500 72,343
Goodwill and other intangibles 49,005 49,282 49,559 49,835 50,112
Other assets 29,525 32,682 33,845 31,483 31,485
------ ------ ------ ------ ------
Total assets $1,936,740 $1,891,760 $1,896,278 $1,888,925 $1,851,160
========== ========== ========== ========== ==========
Liabilities and Shareholders'
Equity
Non-interest bearing deposits $390,863 $396,263 $389,734 $379,576 $383,257
Interest-bearing deposits 1,194,371 1,124,581 1,135,688 1,168,354 1,135,546
--------- --------- --------- --------- ---------
Total deposits 1,585,234 1,520,844 1,525,422 1,547,930 1,518,803
Securities sold under agreements
to
repurchase and other short term
borrowings 62,098 70,964 67,574 51,995 53,916
Short-term FHLB advances 25,000 35,000 35,000 25,000 25,000
Other borrowings 26,277 26,384 26,990 27,347 27,703
Junior subordinated debentures 22,167 22,167 29,384 29,384 29,384
Other liabilities 6,952 10,387 9,492 8,632 5,605
----- ------ ----- ----- -----
Total liabilities 1,727,728 1,685,746 1,693,862 1,690,288 1,660,411
--------- --------- --------- --------- ---------
Total shareholders' equity 209,012 206,014 202,416 198,637 190,749
------- ------- ------- ------- -------
Total liabilities and
shareholders' equity $1,936,740 $1,891,760 $1,896,278 $1,888,925 $1,851,160
========== ========== ========== ========== ==========
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands except per share data)
-----------------------------------
EARNINGS STATEMENT Three Months Ended
------------------
12/31/2014 9/30/2014 6/30/2014 3/31/2014 12/31/2013
---------- --------- --------- --------- ----------
Interest income:
Loans, including fees $18,045 $17,670 $17,183 $16,395 $16,727
Investment securities 2,566 2,617 2,725 2,829 2,876
Accretion of purchase accounting
adjustments 757 603 586 1,088 1,323
Other interest income 109 126 101 87 88
--- --- --- --- ---
Total interest income 21,477 21,016 20,595 20,399 21,014
------ ------ ------ ------ ------
Interest expense:
Deposits 973 915 926 950 1,017
Borrowings 401 409 395 377 411
Junior subordinated debentures 80 327 320 347 339
Accretion of purchase accounting
adjustments (137) (147) (159) (170) (192)
---- ---- ---- ---- ----
Total interest expense 1,317 1,504 1,482 1,504 1,575
----- ----- ----- ----- -----
Net interest income 20,160 19,512 19,113 18,895 19,439
Provision for loan losses 2,700 1,175 1,200 550 800
----- ----- ----- --- ---
Net interest income after provision
for loan losses 17,460 18,337 17,913 18,345 18,639
------ ------ ------ ------ ------
Noninterest income:
Service charges on deposit accounts 2,395 2,556 2,448 2,380 2,431
ATM and debit card income 1,834 1,808 1,853 1,714 1,687
Gain on securities, net - - 128 - 5
Gain on sale of ORE (non-
operating)(*) - 1,077 - - -
Mortgage lending 151 161 49 49 82
Executive officer life insurance
proceeds (non-operating)(*) - - - 3,000 -
Other charges and fees 670 592 783 774 691
--- --- --- --- ---
Total non-interest income 5,050 6,194 5,261 7,917 4,896
----- ----- ----- ----- -----
Noninterest expense:
Salaries and employee benefits 8,259 8,287 8,488 8,674 8,781
Occupancy expense 3,750 3,834 3,689 3,791 3,916
ATM and debit card 699 793 707 690 707
Legal and professional fees 330 342 326 288 506
FDIC premiums 268 269 251 262 282
Marketing 543 396 366 303 545
Corporate development 381 342 331 366 347
Data processing 462 503 483 492 473
Printing and supplies 280 279 275 280 304
Expenses on ORE and other assets
repossessed 169 122 172 228 201
Amortization of core deposit
intangibles 276 277 276 277 276
Loss on disposal of fixed assets
(non-operating)(*) - 394 - - -
Loss on redemption of Trust Preferred
Securities (non-operating)(*) - 258 - - -
Efficiency consultant expenses (non-
operating)(*) 156 200 107 53 -
Expenses related to death of
executive officer (non-
operating)(*) - - - 189 -
Other non-interest expense 1,754 1,561 1,652 1,809 2,089
----- ----- ----- ----- -----
Total non-interest expense 17,327 17,857 17,123 17,702 18,427
------ ------ ------ ------ ------
Earnings before income taxes 5,183 6,674 6,051 8,560 5,108
Income tax expense 1,519 2,202 1,935 1,702 1,563
----- ----- ----- ----- -----
Net earnings 3,664 4,472 4,116 6,858 3,545
Dividends on preferred stock 174 174 170 180 180
--- --- --- --- ---
Net earnings available to common
shareholders $3,490 $4,298 $3,946 $6,678 $3,365
====== ====== ====== ====== ======
Earnings per common share, diluted $0.30 $0.37 $0.34 $0.57 $0.29
===== ===== ===== ===== =====
Operating earnings per common share,
diluted (Non-GAAP)(*) $0.31 $0.36 $0.35 $0.33 $0.29
===== ===== ===== ===== =====
(*)See reconciliation of Non-GAAP financial measures on page 6.
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands)
-------------
COMPOSITION OF LOANS December 31, Percent September 30, June 30, March 31, December 31, Percent
2014 of Total 2014 2014 2014 2013 of Total
---- -------- ---- ---- ---- ---- --------
Commercial, financial, and agricultural $467,147 36.37% $452,065 $454,310 $435,523 $403,976 35.51%
Lease financing receivable 4,857 0.38% 5,285 4,750 5,102 5,542 0.49%
Real estate - construction 68,577 5.34% 86,315 86,238 78,988 82,691 7.27%
Real estate - commercial 467,172 36.37% 430,930 413,565 408,546 397,135 34.91%
Real estate - residential 154,602 12.04% 153,915 153,082 150,551 146,841 12.91%
Installment loans to individuals 119,328 9.29% 116,340 108,581 101,869 97,459 8.57%
Other 2,748 0.21% 3,523 3,656 3,610 3,910 0.34%
----- ----- ----- ----- -----
Total loans $1,284,431 $1,248,373 $1,224,182 $1,184,189 $1,137,554
========== ========== ========== ========== ==========
COMPOSITION OF DEPOSITS
December 31, Percent September 30, June 30, March 31, December 31, Percent
2014 of Total 2014 2014 2014 2013 of Total
---- -------- ---- ---- ---- ---- --------
Noninterest bearing $390,863 24.66% $396,263 $389,734 $379,576 $383,257 25.23%
NOW & Other 469,627 29.63% 447,403 443,287 456,127 429,279 28.26%
Money Market/Savings 473,290 29.86% 460,100 470,731 482,143 465,748 30.67%
Time Deposits of less than $100,000 96,577 6.09% 101,373 104,423 108,306 112,782 7.43%
Time Deposits of $100,000 or more 154,877 9.77% 115,705 117,247 121,778 127,737 8.41%
------- ------- ------- ------- -------
Total deposits $1,585,234 $1,520,844 $1,525,422 $1,547,930 $1,518,803
========== ========== ========== ========== ==========
ASSET QUALITY DATA
December 31, September 30, June 30, March 31, December 31,
2014 2014 2014 2014 2013
---- ---- ---- ---- ----
Nonaccrual loans $10,701 $7,750 $6,913 $6,025 $5,099
Loans past due 90 days and over 187 23 203 251 178
--- --- --- --- ---
Total nonperforming loans 10,888 7,773 7,116 6,276 5,277
Other real estate 4,234 4,663 6,314 6,525 6,687
Other repossessed assets - 19 81 56 20
--- --- --- --- ---
Total nonperforming assets $15,122 $12,455 $13,511 $12,857 $11,984
======= ======= ======= ======= =======
Troubled debt restructurings $410 $416 $417 $1,579 $412
==== ==== ==== ====== ====
Nonperforming assets to total assets 0.78% 0.66% 0.71% 0.68% 0.65%
Nonperforming assets to total loans +
ORE + other repossessed assets 1.17% 0.99% 1.10% 1.08% 1.05%
ALLL to nonperforming loans 103.10% 121.25% 127.53% 139.66% 166.36%
ALLL to total loans 0.87% 0.75% 0.74% 0.74% 0.77%
Quarter-to-date charge-offs $985 $1,253 $990 $688 $740
Quarter-to-date recoveries 86 428 100 124 53
--- --- --- --- ---
Quarter-to-date net charge-offs $899 $825 $890 $564 $687
==== ==== ==== ==== ====
Annualized QTD net charge-offs to total
loans 0.28% 0.26% 0.29% 0.19% 0.24%
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands)
-------------
YIELD ANALYSIS Three Months Ended Three Months Ended Three Months Ended Three Months Ended Three Months Ended
December 31, 2014 September 30, 2014 June 30, 2014 March 31, 2014 December 31, 2013
----------------- ------------------ ------------- -------------- -----------------
Tax Tax Tax Tax Tax
Average Equivalent Yield/ Average Equivalent Yield/ Average Equivalent Yield/ Average Equivalent Yield/ Average Equivalent Yield/
Balance Interest Rate Balance Interest Rate Balance Interest Rate Balance Interest Rate Balance Interest Rate
------- -------- ---- ------- -------- ---- ------- -------- ---- ------- -------- ---- ------- -------- ----
Taxable securities $339,536 $1,936 2.28% $351,645 $1,965 2.24% $379,124 $2,064 2.18% $397,642 $2,136 2.15% $409,561 $2,128 2.08%
Tax-exempt securities 83,612 966 4.62% 86,528 996 4.60% 87,964 1,007 4.58% 91,792 1,059 4.61% 98,648 1,143 4.63%
------ --- ------ --- ------ ----- ------ ----- ------ -----
Total investment securities 423,148 2,902 2.74% 438,173 2,961 2.70% 467,088 3,071 2.63% 489,434 3,195 2.61% 508,209 3,271 2.57%
----- ----- ----- ----- -----
Federal funds sold 3,792 2 0.21% 3,143 2 0.25% 2,260 1 0.18% 2,921 1 0.14% 2,535 1 0.15%
Time and interest bearing deposits in
other banks 44,841 28 0.24% 22,922 15 0.26% 16,789 11 0.26% 25,891 16 0.25% 14,546 9 0.24%
Other investments 11,063 79 2.86% 12,090 109 3.61% 11,679 89 3.05% 11,527 70 2.43% 11,263 78 2.77%
Loans 1,264,011 18,802 5.90% 1,232,196 18,273 5.88% 1,205,930 17,769 5.91% 1,147,010 17,483 6.18% 1,141,829 18,050 6.27%
--------- ------ --------- ------ --------- ------ --------- ------ --------- ------
Total interest earning assets 1,746,855 21,813 4.95% 1,708,524 21,360 4.96% 1,703,746 20,941 4.93% 1,676,783 20,765 5.02% 1,678,382 21,409 5.06%
------ ------ ------ ------ ------
Non-interest earning assets 182,895 184,085 183,980 182,429 184,580
------- ------- ------- ------- -------
Total assets $1,929,750 $1,892,609 $1,887,726 $1,859,212 $1,862,962
========== ========== ========== ========== ==========
Interest-bearing liabilities:
Deposits $1,158,317 $927 0.32% $1,132,132 $859 0.30% $1,156,638 $858 0.30% $1,155,011 $871 0.31% $1,126,742 $917 0.32%
Repurchase agreements 69,735 207 1.18% 70,587 210 1.18% 62,322 199 1.28% 48,413 180 1.51% 67,022 207 1.23%
Federal funds purchased - - 0.00% 70 - 0.00% 679 1 0.58% 168 - 0.00% 747 1 0.52%
Short-term borrowings 28,696 12 0.16% 28,913 13 0.18% 25,110 9 0.14% 25,000 10 0.16% 23,913 9 0.15%
Notes payable 26,326 91 1.35% 26,640 95 1.40% 27,218 95 1.38% 27,577 96 1.39% 27,922 101 1.42%
Junior subordinated debentures 22,167 80 1.41% 26,247 327 4.88% 29,384 320 4.31% 29,384 347 4.72% 29,384 339 4.51%
------ --- ------ --- ------ --- ------ --- ------ ---
Total interest bearing liabilities 1,305,241 1,317 0.40% 1,284,589 1,504 0.46% 1,301,351 1,482 0.46% 1,285,553 1,504 0.47% 1,275,730 1,575 0.49%
----- ----- ----- ----- -----
Non-interest bearing liabilities 404,689 402,729 385,118 378,679 395,746
Shareholders' equity 219,820 205,291 201,257 194,980 191,486
------- ------- ------- ------- -------
Total liabilities and shareholders'
equity $1,929,750 $1,892,609 $1,887,726 $1,859,212 $1,862,962
========== ========== ========== ========== ==========
Net interest income (TE) and spread $20,496 4.55% $19,856 4.50% $19,459 4.47% $19,261 4.55% $19,834 4.57%
======= ======= ======= ======= =======
Net interest margin 4.65% 4.61% 4.58% 4.66% 4.69%
Core net interest margin (Non-GAAP)(*) 4.44% 4.42% 4.39% 4.33% 4.31%
(*) See reconciliation of Non-GAAP financial measures on page 6.
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures (unaudited)
(in thousands except per share data)
-----------------------------------
Three Months Ended
------------------
Per Common Share Data December 31, September 30, June 30, March 31, December 31,
2014 2014 2014 2014 2013
---- ---- ---- ---- ----
Book value per common share $14.78 $14.52 $14.25 $13.92 $13.21
Effect of intangible assets per
share 4.32 4.35 4.39 4.41 4.45
---- ---- ---- ---- ----
Tangible book value per common
share $10.46 $10.17 $9.86 $9.51 $8.76
====== ====== ===== ===== =====
Diluted earnings per share $0.30 $0.37 $0.34 $0.57 $0.29
Effect of efficiency consultant
expenses, after-tax 0.01 0.01 0.01 - -
Effect of loss on disposal of
fixed assets, after-tax - 0.02 - - -
Effect of loss on redemption of
Trust Preferred Securities,
after-tax - 0.02 - - -
Effect of gain on sale of other
real estate, after-tax - (0.06) - - -
Executive officer life insurance
proceeds, net of related
expenses, after-tax - - - (0.24) -
Diluted earnings per share,
operating $0.31 $0.36 $0.35 $0.33 $0.29
===== ===== ===== ===== =====
Three Months Ended
------------------
December 31, September 30, June 30, March 31, December 31,
2014 2014 2014 2014 2013
---- ---- ---- ---- ----
Average Balance Sheet Data
Total average
assets A $1,929,750 $1,892,609 $1,887,726 $1,859,212 $1,862,962
Total equity $208,816 $205,291 $201,257 $194,980 $191,486
Less preferred equity 41,386 41,436 41,491 41,968 41,997
------ ------ ------ ------ ------
Total common equity B $167,430 $163,855 $159,766 $153,012 $149,489
Less intangible assets 49,139 49,417 49,691 49,976 50,548
------ ------ ------ ------ ------
Tangible common
equity C $118,291 $114,438 $110,075 $103,036 $98,941
===
Three Months Ended
------------------
December 31,
2014
September 30,
2014
June 30,
2014
March 31,
2014
December 31,
2013
Core Net Interest Margin
Net interest income (TE) $20,496 $19,856 $19,459 $19,261 $19,834
Less purchase accounting
adjustments (894) (750) (745) (1,258) (1,515)
Net interest
income, net of
purchase
accounting
adjustments D $19,602 $19,106 $18,714 $18,003 $18,319
===
Total average earnings assets $1,746,855 $1,708,524 $1,703,746 $1,676,783 $1,678,382
Add average balance of loan
valuation discount 5,764 6,498 7,013 7,915 9,347
Average earnings
assets, excluding
loan valuation
discount E $1,752,619 $1,715,022 $1,710,759 $1,684,698 $1,687,729
===
Core net interest
margin D/E 4.44% 4.42% 4.39% 4.33% 4.31%
=====
Three Months Ended
------------------
December 31,
2014
September 30,
2014
June 30,
2014
March 31,
2014
December 31,
2013
Return Ratios
Net earnings available to common
shareholders $3,490 $4,298 $3,946 $6,678 $3,365
Efficiency consultant expenses,
after-tax 101 130 70 34 -
Loss on disposal of fixed assets,
after-tax - 256 - - -
Loss on redemption of Trust
Preferred Securities, after-tax - 168 - - -
Gain on sale of other real
estate, after-tax - (700) - - -
Executive officer life insurance
proceeds, net of related
expenses, after-tax - - - (2,840) -
Net earnings
available to
common
shareholders,
operating F $3,591 $4,152 $4,016 $3,872 $3,365
===
Annualized return
on average assets,
operating F/A 0.74% 0.87% 0.85% 0.84% 0.72%
Annualized return
on average common
equity, operating F/B 8.51% 10.05% 10.08% 10.26% 8.93%
Annualized return
on average
tangible common
equity, operating F/C 12.04% 14.39% 14.63% 15.24% 13.49%
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. "Diluted earnings
per share, operating" is defined
as net earnings available to
common shareholders adjusted for
specified one-time items
divided by diluted weighted-
average shares. "Core net
interest margin" is defined as
reported net interest margin
less purchase accounting
adjustments. "Annualized return
on average assets, operating" is
defined as net earnings
available to common shareholders
adjusted for specified one-time
items divided by average assets.
"Annualized return on average
common equity, operating" is
defined as net earnings
available to common shareholders
adjusted for specified one-time
items divided by average common
equity. "Annualized return on
average tangible common equity,
operating" is defined as net
earnings available to common
shareholders adjusted for
specified one-time items
divided by average tangible
common equity.
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.
Logo - http://photos.prnewswire.com/prnh/20100125/MIDSOUTHLOGO
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/midsouth-bancorp-inc-reports-fourth-quarter-2014-results-and-declares-quarterly-dividends-300026589.html
SOURCE MidSouth Bancorp, Inc.
