LAFAYETTE, La., April 27, 2017 /PRNewswire/ -- MidSouth Bancorp, Inc. ("MidSouth") (NYSE:MSL) today reported quarterly net earnings available to common shareholders of $1.7 million for the first quarter of 2017, compared to net earnings available to common shareholders of $1.9 million reported for the first quarter of 2016 and $1.4 million in net earnings available to common shareholders for the fourth quarter of 2016.  Diluted earnings for the first quarter of 2017 were $0.15 per common share, compared to $0.17 per common share reported for the first quarter of 2016 and $0.12 per common share reported for the fourth quarter of 2016.

Energy Lending Update

MidSouth Bank defines an energy loan as any loan where the borrower's ability to repay is disproportionately impacted by a prolonged downturn in energy prices.  Under this definition, the Bank includes direct Commercial and Industrial (C&I) loans to energy borrowers, as well as Commercial Real Estate (CRE) loans, Residential Real Estate loans and loans to energy-related borrowers where the loan's primary collateral is cash and marketable securities.

Other comments on the Bank's energy lending:

  • Total energy loans, as defined above, decreased $5.6 million during 1Q17 to $231.8 million, or 18.2% of total loans, from 18.5% at December 31, 2016.
  • Direct C&I energy loans were $193.1 million or 15.2% of total loans and had a weighted average maturity of 3.2 years at March 31, 2017.
  • Energy-related CRE and residential real estate loans were $38.3 million or 3.0% of total loans at March 31, 2017.
  • Total criticized energy-related loans decreased $7.7 million, or 6.5%, during 1Q17 to $111.5 million and represented 48.1% of energy loans at March 31, 2017, versus 50.2% at December 31, 2016.
  • Seven energy loan relationships had rating changes during the quarter.
    • One loan relationship totaling $108,000 was downgraded to Special Mention
    • Five loan relationships totaling $23.4 million were downgraded to Substandard
    • One loan relationship totaling $438,000 was upgraded to Pass
  • Three energy-related charge-offs totaled $657,000.
  • Cycle to date net charge-offs totaled $4.1 million, or 1.56% of December 31, 2014 energy loans, which was when the effects of declining oil prices began to surface.
  • Two energy-related impairments totaling $177,000 were identified during 1Q17 and one impairment increase of $272,000 on an impaired loan identified prior to 1Q17.
  • The energy reserve as a percentage of total energy loans, as defined, was 5.5% at March 31, 2017. The reserve attributable to C&I energy loans was approximately 6.5%. The reserve on all other energy loans was 1.0%.
  • The Bank has two Shared National Credits (SNCs) totaling $14.2 million in the energy portfolio at March 31, 2017 and both are rated as Substandard.

More information on our energy loan portfolio can be found on our website at MidSouthBank.com under Investor Relations/Presentations.

Balance Sheet

Consolidated assets remained constant at $1.9 billion as of March 31, 2017 and 2016 and December 31, 2016.  Our stable core deposit base, which excludes time deposits, totaled $1.4 billion at March 31, 2017 and December 31, 2016 and accounted for 90.4% and 90.0% of deposits at March 31, 2017 and December 31, 2016, respectively.  Net loans totaled $1.247 billion at March 31, 2017 and 2016, compared to $1.260 billion at December 31, 2016.

MidSouth's Tier 1 leverage capital ratio was 10.27% at March 31, 2017, compared to 10.11% at December 31, 2016.  Tier 1 risk-based capital and total risk-based capital ratios were 13.14% and 14.40% at March 31, 2017, respectively, compared to 13.02% and 14.28% at December 31, 2016, respectively.  Tier 1 common equity to total risk-weighted assets at March 31, 2017 was 8.91%, compared to 8.81% at December 31, 2016.  Tangible common equity totaled $128.4 million at March 31, 2017, compared to $126.5 million at December 31, 2016.  Tangible book value per share at March 31, 2017 was $11.28 versus $11.13 at December 31, 2016.

Asset Quality

Nonperforming assets totaled $58.9 million at March 31, 2017, a decrease of $6.1 million compared to $65.0 million reported at December 31, 2016.  The decrease is primarily attributable to the payoff of four relationships during the quarter that were on non-accrual at December 31, 2016 and totaled $9.6 million.  Allowance coverage for nonperforming loans increased to 42.96% at March 31, 2017, compared to 38.78% at December 31, 2016.  The ALLL/total loans ratio was 1.93% at March 31, 2017 and 1.90% at December 31, 2016.  Including valuation accounting adjustments on acquired loans, the total valuation accounting adjustment plus ALLL was 2.08% of loans at March 31, 2017.  The ratio of annualized net charge-offs to total loans increased to 0.83% for the three months ended March 31, 2017 compared to 0.46% for the three months ended December 31, 2016, with $1.7 million, or 67.4% of first quarter net charge-offs attributable to loans reserved for in previous quarters.

Total nonperforming assets to total loans plus ORE and other assets repossessed was 4.62% at March 31, 2017 compared to 5.06% at December 31, 2016.  Loans classified as troubled debt restructurings, accruing ("TDRs, accruing") increased to $2.0 million at March 31, 2017 compared to $152,000 at December 31, 2016.  Classified assets, including ORE, increased $14.2 million, or 10.6%, to $148.4 million at March 31, 2017 compared to $134.2 million at December 31, 2016.  The increase in classified assets during the quarter ended March 31, 2017 is primarily due to the downgrade of two energy-related credits totaling $22.2 million.  These increases to classified assets were partially offset by the payoff/paydown of $6.2 million of energy-related classified relationships during the first quarter as well as the payoff of $4.7 million of classified relationships not related to energy.

First Quarter 2017 vs. Fourth Quarter 2016 Earnings Comparison

In sequential-quarter comparison, net earnings available to common shareholders increased $293,000, from $1.4 million for the three months ended December 31, 2016 to $1.7 million for the three months ended March 31, 2017.  Net interest income decreased $169,000 in sequential-quarter comparison.  Noninterest income decreased $27,000 in sequential-quarter comparison.

Noninterest expense decreased $406,000 in sequential-quarter comparison and consisted primarily of decreases of $107,000 in occupancy expense, $108,000 in ATM and debit card expense, $135,000 in legal and professional fees and $107,000 in corporate development.  These decreased costs were partially offset by a $121,000 increase in data processing costs.  A reclass of certain hosted services subscriptions from corporate development into data processing at the beginning of 2017 caused the fluctuations in those two expense categories.  The provision for loan losses increased $200,000 in sequential-quarter comparison.  Income tax expense decreased $282,000.

Dividends on the Series B Preferred Stock issued to the Treasury as a result of our participation in the Small Business Lending Fund ("SBLF") totaled $720,000 for the first quarter of 2017 based on a dividend rate of 9%, unchanged from $720,000 for the fourth quarter of 2016.  Dividends on the Series C Preferred Stock issued with the December 28, 2012 acquisition of PSB Financial Corporation ("PSB") totaled $91,000 for the three months ended March 31, 2017 and $92,000 for the three months ended December 31, 2016.

Fully taxable-equivalent ("FTE") net interest income decreased $199,000 in sequential-quarter comparison.  Interest income on loans decreased $437,000.  The average yield on loans decreased 2 basis points, from 5.31% to 5.29%, and the average balance of loans decreased $3.3 million in sequential-quarter comparison.  Excluding purchase accounting adjustments, the loan yield increased 3 basis points, from 5.19% to 5.22% during the same period.  Interest income on investment securities increased $277,000 in sequential-quarter comparison.  The average yield on investment securities increased 9 basis points, and the average balance of investment securities increased $27.5 million.  The average yield on total earning assets increased 10 basis points for the same period, from 4.41% to 4.51%, respectively.  As a result of these changes in volume and yield on earning assets, the FTE net interest margin increased 9 basis points, from 4.09% to 4.18%.  Excluding purchase accounting adjustments, the FTE net interest margin, after reflecting a reclassification of certain credit card income to noninterest income, increased 13 basis points, from 3.98% for the fourth quarter of 2016 to 4.11% for the first quarter of 2017.

First Quarter 2017 vs. First Quarter 2016 Earnings Comparison

First quarter 2017 net earnings available to common shareholders totaled $1.7 million compared to $1.9 million for the first quarter of 2016. Revenues from consolidated operations increased $239,000 in quarterly comparison, from $22.9 million for the three months ended March 31, 2016 to $23.1 million for the three months ended March 31, 2017.  Net interest income decreased $61,000 in quarterly comparison, resulting from a $16,000 decrease in interest income and a $45,000 increase in interest expense.  Noninterest income increased $300,000 in quarterly comparison and consisted primarily of a $94,000 increase in ATM/debit card income and a $111,000 increase in service charges on deposits accounts.

Noninterest expense increased $471,000 in quarterly comparison and consisted primarily of a $699,000 increase in salaries and employee benefits costs and a $163,000 increase in data processing costs, which were partially offset by a $101,000 decrease in marketing expense.  The $699,000 increase in salaries and benefits costs included a $262,000 increase in group health costs, a $135,000 increase in incentive pay and $81,000 of sign-on bonuses.  The provision for loan losses remained unchanged at $2.8 million in quarterly comparison.  Income tax expense decreased $374,000 in quarterly comparison.

Dividends on preferred stock totaled $811,000 for the three months ended March 31, 2017 and $427,000 for the three months ended March 31, 2016.  Dividends on the Series B Preferred Stock were $720,000 for the first quarter of 2017 and totaled $336,000 for the first quarter of 2016 based on a dividend rate of 4.2%.  The dividend rate increased to 9% on February 25, 2016.  Dividends on the Series C Preferred Stock issued with the December 28, 2012 acquisition of PSB totaled $91,000 for the three months ended March 31, 2017 and March 31, 2016.

FTE net interest income, after reflecting a reclassification of certain credit card income to noninterest income, decreased $89,000 in prior year quarterly comparison.  Interest income on loans decreased $244,000 due to a decrease in the average yield on loans of 12 basis points.  The average balance of loans increased $21.5 million in prior year quarterly comparison.  Purchase accounting adjustments added 7 basis points to the average yield on loans for the first quarter of 2017 and 25 basis points to the average yield on loans for the first quarter of 2016.  Excluding the impact of the purchase accounting adjustments, average loan yields decreased 3 basis points in prior year quarterly comparison, from 5.25% to 5.22%.

Investment securities totaled $449.0 million, or 23.2% of total assets at March 31, 2017, versus $440.1 million, or 22.6% of total assets at December 31, 2016.  The investment portfolio had an effective duration of 4.1 years and a net unrealized loss of $1.2 million at March 31, 2017.  The average volume of investment securities increased $19.1 million in prior year quarterly comparison.  The average tax equivalent yield on investment securities increased 8 basis points, from 2.58% to 2.66%.

The average yield on all earning assets remained unchanged in prior year quarterly comparison at 4.51%.  Excluding the impact of purchase accounting adjustments, the average yield on total earning assets increased 8 basis points, from 4.39% to 4.47% for the three-month periods ended March 31, 2016 and 2017, respectively.

Interest expense increased $45,000 in prior year quarterly comparison.  Increases in interest expense included a $28,000 increase in interest expense on deposits and a $41,000 increase in interest expense on variable rate junior subordinated debentures.  These increases were partially offset by a $23,000 decrease in interest expense on short-term FHLB advances.  Excluding purchase accounting adjustments on acquired certificates of deposit and FHLB borrowings, the average rate paid on interest-bearing liabilities was 0.49% for the three months ended March 31, 2017 and 0.46% for the three months ended March 31, 2016.

As a result of these changes in volume and yield on earning assets and interest-bearing liabilities, the FTE net interest margin remained unchanged in prior year quarterly comparison at 4.18%.  Excluding purchase accounting adjustments on loans, deposits and FHLB borrowings, the FTE margin increased 6 basis points, from 4.05% for the first quarter of 2016 to 4.11% for the first quarter of 2017.

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 July 3, 2017 to shareholders of record as of the close of business on June 15, 2017.  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 July 17, 2017 to shareholders of record as of the close of business on July 3, 2017.

Leadership Transition. 

MidSouth also announced today in a separate press release changes to its executive management team, including the termination of employment of C.R. "Rusty" Cloutier as MidSouth's President and CEO and Troy M. Cloutier as MidSouth Bank's President and CEO and the appointment of James R. McLemore as interim President and CEO for MidSouth and MidSouth Bank, effective immediately.

About MidSouth Bancorp, Inc.

MidSouth Bancorp, Inc. is a financial holding company headquartered in Lafayette, Louisiana, with assets of $1.9 billion as of March 31, 2017. MidSouth Bancorp, Inc. trades on the NYSE under the symbol "MSL." 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 57 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 performance of new hires, performance in non-energy related lending, expected loan loss provision 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, 2016 filed with the SEC on March 16, 2017 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


3/31/2017


12/31/2016


9/30/2016


6/30/2016


3/31/2016

     Total interest income


$     19,531


$      19,694


$     19,667


$     19,122


$     19,547

     Total interest expense


1,465


1,459


1,414


1,397


1,420

          Net interest income


18,066


18,235


18,253


17,725


18,127

     FTE net interest income


18,279


18,478


18,472


17,946


18,368

     Provision for loan losses


2,800


2,600


2,900


2,300


2,800

     Non-interest income


5,044


5,071


5,152


5,139


4,744

     Non-interest expense


17,230


17,636


17,114


17,041


16,759

          Earnings before income taxes


3,080


3,070


3,391


3,523


3,312

     Income tax expense


589


871


993


1,030


963

          Net earnings


2,491


2,199


2,398


2,493


2,349

     Dividends on preferred stock


811


812


811


811


427

          Net earnings available to common shareholders


$       1,680


$        1,387


$       1,587


$       1,682


$       1,922












PER COMMON SHARE DATA











     Basic earnings per share


$         0.15


$          0.12


$         0.14


$         0.15


$         0.17

     Diluted earnings per share


0.15


0.12


0.14


0.15


0.17

     Quarterly dividends per share


0.09


0.09


0.09


0.09


0.09

     Book value at end of period


15.37


15.25


15.58


15.56


15.38

     Tangible book value at period end (Non-GAAP)(*)


11.28


11.13


11.44


11.40


11.19

     Market price at end of period


15.30


13.60


10.40


10.04


7.63

     Shares outstanding at period end 


11,383,914


11,362,716


11,362,716


11,362,705


11,362,150

     Weighted average shares outstanding











        Basic


11,264,394


11,271,948


11,262,282


11,255,042


11,261,644

        Diluted


11,282,491


11,273,302


11,262,710


11,255,178


11,261,644












AVERAGE BALANCE SHEET DATA











     Total assets


$1,932,818


$ 1,960,436


$1,927,351


$1,921,004


$1,931,904

     Loans and leases


1,274,213


1,277,555


1,268,270


1,256,133


1,252,742

     Total deposits


1,569,188


1,591,814


1,562,193


1,562,680


1,552,217

     Total common equity


174,785


176,747


177,866


175,994


175,479

     Total tangible common equity (Non-GAAP)(*)


128,124


129,821


130,662


128,516


127,722

     Total equity 


215,895


217,857


218,976


217,112


216,599












SELECTED RATIOS











     Annualized return on average assets, operating (Non-GAAP)(*)


0.35%


0.28%


0.33%


0.35%


0.40%

     Annualized return on average common equity, operating (Non-GAAP)(*)


3.89%


3.12%


3.55%


3.81%


4.41%

     Annualized return on average tangible common equity, operating (Non-GAAP)(*)


5.31%


4.25%


4.83%


5.22%


6.05%

     Pre-tax, pre-provision annualized return on average assets, operating (Non-GAAP)(*)


1.23%


1.15%


1.30%


1.21%


1.27%

     Efficiency ratio, operating (Non-GAAP)(*)


74.51%


75.67%


73.04%


74.49%


73.28%

     Average loans to average deposits


81.20%


80.26%


81.19%


80.38%


80.71%

     Taxable-equivalent net interest margin


4.18%


4.09%


4.17%


4.11%


4.18%

     Tier 1 leverage capital ratio


10.27%


10.11%


10.27%


10.25%


10.17%












CREDIT QUALITY











     Allowance for loan and lease losses (ALLL) as a % of total loans


1.93%


1.90%


1.83%


1.69%


1.63%

     Nonperforming assets to tangible equity + ALLL


30.34%


33.88%


32.98%


32.77%


30.83%

    Nonperforming assets to total loans, other real estate owned and other repossessed assets


4.62%


5.06%


5.03%


4.97%


4.64%

     Annualized QTD net charge-offs to total loans


0.83%


0.46%


0.32%


0.40%


0.47%












(*)See reconciliation of Non-GAAP financial measures on pages 8-10.

 

MIDSOUTH BANCORP, INC. and SUBSIDIARIES          

Condensed Consolidated Balance Sheets (unaudited)       

(in thousands)               



















BALANCE SHEET


March 31,


December 31,


September 30,


June 30,


March 31,



2017


2016


2016


2016


2016

Assets











Cash and cash equivalents


$     78,471


$         82,228


$        126,667


$     98,535


$   112,410

Securities available-for-sale


357,803


341,873


316,145


318,239


302,151

Securities held-to-maturity


91,242


98,211


103,412


109,420


113,623

     Total investment securities


449,045


440,084


419,557


427,659


415,774

Other investments


11,362


11,355


11,339


11,036


11,195

Total loans


1,272,000


1,284,082


1,272,800


1,262,389


1,250,049

Allowance for loan losses


(24,578)


(24,372)


(23,268)


(21,378)


(20,347)

     Loans, net


1,247,422


1,259,710


1,249,532


1,241,011


1,229,702

Premises and equipment


68,216


68,954


69,778


68,468


68,482

Goodwill and other intangibles


46,516


46,792


47,069


47,346


47,622

Other assets


33,907


34,217


29,978


28,469


31,366

     Total assets


$1,934,939


$    1,943,340


$     1,953,920


$1,922,524


$1,916,551























Liabilities and Shareholders' Equity











Non-interest bearing deposits


$   426,998


$       414,921


$        403,301


$   383,797


$   383,684

Interest-bearing deposits


1,145,946


1,164,509


1,181,906


1,176,269


1,174,519

   Total deposits


1,572,944


1,579,430


1,585,207


1,560,066


1,558,203

Securities sold under agreements to repurchase


89,807


94,461


95,210


85,786


87,879

Long-term FHLB advances


25,318


25,424


25,531


25,638


25,744

Junior subordinated debentures


22,167


22,167


22,167


22,167


22,167

Other liabilities


8,641


7,482


7,679


10,926


6,704

     Total liabilities


1,718,877


1,728,964


1,735,794


1,704,583


1,700,697

Total shareholders' equity


216,062


214,376


218,126


217,941


215,854

     Total liabilities and shareholders' equity


$1,934,939


$    1,943,340


$     1,953,920


$1,922,524


$1,916,551

 

MIDSOUTH BANCORP, INC. and SUBSIDIARIES             

Condensed Consolidated Income Statements (unaudited)          

(in thousands except per share data)                


















Percent Change

EARNINGS STATEMENT


Three Months Ended







3/31/2017


12/31/2016


3/31/2016


1Q17 vs. 4Q16


1Q17 vs. 1Q16












Interest income:











Loans, including fees


$ 16,437


$   16,697


$ 16,404


-1.6%


0.2%

Investment securities


2,734


2,427


2,494


12.6%


9.6%

Accretion of purchase accounting adjustments


185


362


462


-48.9%


-60.0%

Other interest income


175


208


187


-15.9%


-6.4%

Total interest income


19,531


19,694


19,547


-0.8%


-0.1%












Interest expense:











Deposits


935


936


920


-0.1%


1.6%

Borrowings


411


422


436


-2.6%


-5.7%

Junior subordinated debentures


208


197


167


5.6%


24.6%

Accretion of purchase accounting adjustments


(89)


(96)


(103)


-7.3%


-13.6%

Total interest expense


1,465


1,459


1,420


0.4%


3.2%












Net interest income


18,066


18,235


18,127


-0.9%


-0.3%

Provision for loan losses


2,800


2,600


2,800


7.7%


0.0%

Net interest income after provision for loan losses


15,266


15,635


15,327


-2.4%


-0.4%












Noninterest income:











Service charges on deposit accounts


2,480


2,479


2,369


0.0%


4.7%

ATM and debit card income


1,703


1,682


1,609


1.2%


5.8%

Gain on securities, net  (non-operating)(*)


6


-


-


-


-

Mortgage lending


143


164


109


-12.8%


31.2%

Other charges and fees


712


746


657


-4.6%


8.4%

Total non-interest income


5,044


5,071


4,744


-0.5%


6.3%












Noninterest expense:











Salaries and employee benefits


8,689


8,726


7,990


-0.4%


8.7%

Occupancy expense


3,624


3,731


3,597


-2.9%


0.8%

ATM and debit card


721


829


785


-13.0%


-8.2%

Legal and professional fees


385


520


383


-26.0%


0.5%

FDIC premiums


397


387


429


2.6%


-7.5%

Marketing


280


349


381


-19.8%


-26.5%

Corporate development


316


423


335


-25.3%


-5.7%

Data processing


621


500


458


24.2%


35.6%

Printing and supplies


183


158


188


15.8%


-2.7%

Expenses on ORE, net


79


59


194


33.9%


-59.3%

Amortization of core deposit intangibles


277


277


277


0.0%


0.0%

Other non-interest expense


1,658


1,677


1,742


-1.1%


-4.8%

Total non-interest expense


17,230


17,636


16,759


-2.3%


2.8%

Earnings before income taxes


3,080


3,070


3,312


0.3%


-7.0%

Income tax expense


589


871


963


-32.4%


-38.8%

Net earnings


2,491


2,199


2,349


13.3%


6.0%

Dividends on preferred stock


811


812


427


-0.1%


89.9%

Net earnings available to common shareholders


$   1,680


$     1,387


$   1,922


21.1%


-12.6%












Earnings per common share, diluted


$     0.15


$       0.12


$     0.17


25.0%


-11.8%












Operating earnings per common share, diluted (Non-GAAP)(*)


$     0.15


$       0.12


$     0.17


25.0%


-11.8%












(*)See reconciliation of Non-GAAP financial measures on page 8-10.
















Note: Prior period information presented above has been adjusted to reflect a reclass of certain credit card income from interest income to other non-interest income as well as certain wire fee income from other non-interest income into service charges on deposit accounts.

 

MIDSOUTH BANCORP, INC. and SUBSIDIARIES          

Composition of Loans and Deposits and Asset Quality Data (unaudited)       

(in thousands)               






COMPOSITION OF LOANS


March 31,


December 31,


Mar 17 vs Dec 16 % Change


September 30,


June 30,


March 31, 


Mar 17 vs Mar 16 % Change



2017


2016



2016


2016


2016



Commercial, financial, and agricultural


$   469,815


$       459,574


2.2%


$       463,031


$   456,264


$   441,160


6.5%


Lease financing receivable


969


1,095


-11.5%


1,449


1,641


1,590


-39.1%


Real estate - construction


100,248


100,959


-0.7%


96,365


96,331


84,790


18.2%


Real estate - commercial


464,859


481,155


-3.4%


464,853


463,142


467,648


-0.6%


Real estate - residential


159,426


157,872


1.0%


155,653


148,379


149,961


6.3%


Installment loans to individuals


75,258


82,660


-9.0%


88,537


94,522


103,181


-27.1%


Other


1,425


767


85.8%


2,912


2,110


1,719


-17.1%


















Total loans


$1,272,000


$    1,284,082


-0.9%


$    1,272,800


$1,262,389


$1,250,049


1.8%


















COMPOSITION OF DEPOSITS

















March 31,


December 31,


Mar 17 vs Dec 16 % Change


September 30,


June 30,


March 31, 


Mar 17 vs Mar 16 % Change




2017


2016



2016


2016


2016



Noninterest bearing


$   426,998


$       414,921


2.9%


$       403,301


$   383,798


$   383,684


11.3%


NOW & other


489,789


472,484


3.7%


465,850


467,987


472,309


3.7%


Money market/savings


505,669


539,815


-6.3%


557,068


544,256


534,854


-5.5%


Time deposits of less than $100,000


75,579


75,940


-0.5%


78,785


80,158


80,802


-6.5%


Time deposits of $100,000 or more


74,909


76,270


-1.8%


80,203


83,867


86,554


-13.5%


















Total deposits


$1,572,944


$    1,579,430


-0.4%


$    1,585,207


$1,560,066


$1,558,203


0.9%


















ASSET QUALITY DATA

















March 31,


December 31,




September 30,


June 30,


March 31, 






2017


2016



2016


2016


2016




Nonaccrual loans


$     56,443


$         62,580




$         60,522


$     59,865


$     53,714




Loans past due 90 days and over


775


268




968


56


258




Total nonperforming loans


57,218


62,848




61,490


59,921


53,972




Other real estate


1,643


2,175




2,317


2,735


3,908




Other repossessed assets


30


16




283


263


265




Total nonperforming assets


$     58,891


$         65,039




$         64,090


$     62,919


$     58,145




















Troubled debt restructurings, accruing


$       1,995


$              152




$              153


$          154


$       5,675




































Nonperforming assets to total assets


3.04%


3.35%




3.28%


3.27%


3.03%




Nonperforming assets to total loans +      
















ORE + other repossessed assets


4.62%


5.06%




5.03%


4.97%


4.64%




ALLL to nonperforming loans


42.96%


38.78%




37.84%


35.68%


37.70%




ALLL to total loans


1.93%


1.90%




1.83%


1.69%


1.63%




















Quarter-to-date charge-offs


$       2,906


$           1,835




$           1,161


$       1,425


$       1,594




Quarter-to-date recoveries


312


339




151


156


130




Quarter-to-date net charge-offs


$       2,594


$           1,496




$           1,010


$       1,269


$       1,464




Annualized QTD net charge-offs to total loans


0.83%


0.46%




0.32%


0.40%


0.47%




 

MIDSOUTH BANCORP, INC. and SUBSIDIARIES             

Loan Portfolio - Quarterly Roll Forward (unaudited)

(in thousands)    










Three Months Ended



March 31,


December 31,


March 31,



2017


2016


2016

LOAN ACTIVITY














Loans originated


$  63,141


$         91,332


$  74,797

Repayments


(72,179)


(64,528)


(60,252)

Increases on renewals


3,940


5,259


2,307

Change in lines of credit


(4,798)


(19,990)


(30,920)

Change in allowance for loan losses


(206)


(1,104)


(1,336)

Other


(2,186)


(791)


473

Net change in loans


$ (12,288)


$         10,178


$ (14,931)

 

MIDSOUTH BANCORP, INC. and SUBSIDIARIES          

Tangible Common Equity to Tangible Assets and Regulatory Ratios (unaudited)

(in thousands)               



COMPUTATION OF TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS







March 31,


March 31,




2017


2016


Total equity


$   216,062


$   215,854


Less preferred equity


41,110


41,120


Total common equity


174,952


174,734


Less goodwill


42,171


42,171


Less intangibles


4,345


5,451


Tangible common equity


$   128,436


$   127,112








Total assets


$1,934,939


$1,916,551


Less goodwill


42,171


42,171


Less intangibles


4,345


5,451


Tangible assets


$1,888,423


$1,868,929








Tangible common equity to tangible assets


6.80%


6.80%








REGULATORY CAPITAL












Common equity tier 1 capital


$   131,660


$   128,483


Tier 1 capital


194,269


191,770


Total capital


212,820


209,848








Regulatory capital ratios:






Common equity tier 1 capital ratio


8.91%


8.90%


Tier 1 risk-based capital ratio


13.14%


13.28%


Total risk-based capital ratio


14.40%


14.53%


Tier 1 leverage ratio


10.27%


10.17%


 

MIDSOUTH BANCORP, INC. and SUBSIDIARIES             

Quarterly Yield Analysis (unaudited)   



















(in thousands)    






























YIELD ANALYSIS


Three Months Ended


Three Months Ended  


Three Months Ended  


Three Months Ended  


Three Months Ended  


March 31, 2017


December 31, 2016


September 30, 2016


June 30, 2016


March 31, 2016


























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


$   382,105


$     2,327


2.44%


$   348,673


$     1,965


2.25%


$   354,770


$     1,983


2.24%


$   349,433


$     1,940


2.22%


$   358,623


$     2,036


2.27%

Tax-exempt securities


60,618


620


4.09%


66,549


705


4.24%


60,544


635


4.20%


60,972


641


4.21%


64,971


699


4.30%

Total investment securities


442,723


2,947


2.66%


415,222


2,670


2.57%


415,314


2,618


2.52%


410,405


2,581


2.52%


423,594


2,735


2.58%

Federal funds sold


3,571


6


0.67%


3,261


5


0.60%


2,703


3


0.43%


3,655


3


0.32%


3,843


5


0.51%

Time and interest bearing deposits in other banks


41,785


85


0.81%


90,527


125


0.54%


64,444


83


0.50%


76,042


97


0.50%


74,271


94


0.50%

Other investments


11,355


84


2.96%


11,342


78


2.75%


11,253


95


3.38%


11,232


90


3.21%


11,189


88


3.15%

Loans 


1,274,213


16,622


5.29%


1,277,555


17,059


5.31%


1,268,270


17,087


5.36%


1,256,133


16,572


5.31%


1,252,742


16,866


5.41%

Total interest earning assets


1,773,647


19,744


4.51%


1,797,907


19,937


4.41%


1,761,984


19,886


4.49%


1,757,467


19,343


4.43%


1,765,639


19,788


4.51%

Non-interest earning assets


159,171






162,529






165,367






163,537






166,265





Total assets


$1,932,818






$1,960,436






$1,927,351






$1,921,004






$1,931,904




































Interest-bearing liabilities:































Deposits


$1,155,407


$        935


0.33%


$1,179,174


$        929


0.31%


$1,170,660


$        915


0.31%


$1,176,387


$        903


0.31%


$1,180,581


$        907


0.31%

Repurchase agreements


92,571


234


1.03%


94,609


241


1.01%


88,560


236


1.06%


85,479


233


1.10%


85,756


233


1.09%

Federal funds purchased


-


-


0.00%


-


-


0.00%


-


-


0.00%


2


-


0.00%


-


-


0.00%

Short-term FHLB advances


-


-


0.00%


-


-


0.00%


-


-


0.00%


-


-


0.00%


22,802


23


0.40%

Long-term FHLB advances


25,370


88


1.39%


25,474


92


1.41%


25,581


93


1.42%


25,687


91


1.40%


25,794


90


1.38%

Junior subordinated debentures


22,167


208


3.75%


22,167


197


3.48%


22,167


170


3.00%


22,167


170


3.03%


22,167


167


2.98%

Total interest bearing liabilities


1,295,515


1,465


0.46%


1,321,424


1,459


0.44%


1,306,968


1,414


0.43%


1,309,722


1,397


0.43%


1,337,100


1,420


0.43%

Non-interest bearing liabilities


421,408






421,155






401,407






394,170






378,205





Shareholders' equity


215,895






217,857






218,976






217,112






216,599





Total liabilities and  shareholders' equity


$1,932,818






$1,960,436






$1,927,351






$1,921,004






$1,931,904




































Net interest income (TE) and spread


$   18,279


4.05%




$   18,478


3.97%




$   18,472


4.06%




$   17,946


4.00%




$   18,368


4.08%
































Net interest margin




4.18%






4.09%






4.17%






4.11%






4.18%
































Core net interest margin (Non-GAAP)(*)






4.11%






3.98%






4.05%






4.02%






4.05%































































(*) See reconciliation of Non-GAAP financial measures on page 8-10.


Note: Prior period information presented above has been adjusted to reflect a reclass of certain credit card income from interest income to non-interest income.

 

MIDSOUTH BANCORP, INC. and SUBSIDIARIES             

Reconciliation of Non-GAAP Financial Measures (unaudited)

(in thousands except per share data)    












     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.  We are providing disclosure of the reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures. 
"Tangible common equity" is defined as total common equity reduced by intangible assets.  "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.  "Pre-tax, pre-provision annualized return on average assets, operating" is defined as pre-tax,
pre-provision earnings adjusted for specified one-time items divided by average 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.  The GAAP-based efficiency ratio is measured as noninterest expense as a percentage of net interest income plus noninterest
income.  The non-GAAP efficiency ratio excludes specified one-time items in addition to securities gains and losses and gains and losses on the sale/valuation of other real
estate owned and other assets repossessed.


     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.

























Three Months Ended



March 31,


December 31,


September 30,


June 30,


March 31,



2017


2016


2016


2016


2016

AVERAGE BALANCE SHEET DATA






















Total average assets

A

$ 1,932,818


$    1,960,436


$     1,927,351


$ 1,921,004


$ 1,931,904












Total equity


$    215,895


$       217,857


$        218,976


$    217,112


$    216,599

Less preferred equity


41,110


41,110


41,110


41,118


41,120

Total common equity

B

$    174,785


$       176,747


$        177,866


$    175,994


$    175,479

Less intangible assets


46,661


46,926


47,204


47,478


47,757

Tangible common equity

C

$    128,124


$       129,821


$        130,662


$    128,516


$    127,722

 

MIDSOUTH BANCORP, INC. and SUBSIDIARIES             

Reconciliation of Non-GAAP Financial Measures (unaudited) (continued)

(in thousands except per share data)    














Three Months Ended



March 31,


December 31,


September 30,


June 30,


March 31,

CORE NET INTEREST MARGIN


2017


2016


2016


2016


2016












Net interest income (FTE)


$      18,279


$         18,478


$          18,472


$      17,946


$      18,368

Less purchase accounting adjustments


(274)


(458)


(493)


(341)


(565)

Core net interest income, net of purchase accounting adjustments

D

$      18,005


$         18,020


$          17,979


$      17,605


$      17,803












Total average earnings assets


$ 1,773,647


$    1,797,907


$     1,761,984


$ 1,757,467


$ 1,765,639

Add average balance of loan valuation discount


1,964


2,316


2,634


2,931


3,323

Average earnings assets, excluding loan valuation discount

E

$ 1,775,611


$    1,800,223


$     1,764,618


$ 1,760,398


$ 1,768,962












Core net interest margin

D/E

4.11%


3.98%


4.05%


4.02%


4.05%














Three Months Ended



March 31,


December 31,


September 30,


June 30,


March 31,

RETURN RATIOS


2017


2016


2016


2016


2016












Net earnings available to common shareholders


$        1,680


$           1,387


$            1,587


$        1,682


$        1,922

Net gain on sale of securities, after-tax


(4)


-


-


(13)


-

   Net earnings available to common shareholders, operating

F

$        1,676


$           1,387


$            1,587


$        1,669


$        1,922












Earnings before income taxes


$        3,080


$           3,070


$            3,391


$        3,523


$        3,312

Net gain on sale of securities


(6)


-


-


(20)


-

Provision for loan losses


2,800


2,600


2,900


2,300


2,800

   Pre-tax, pre-provision earnings, operating

G

$        5,874


$           5,670


$            6,291


$        5,803


$        6,112












Annualized return on average assets, operating

F/A

0.35%


0.28%


0.33%


0.35%


0.40%

Annualized return on average common equity, operating

F/B

3.89%


3.12%


3.55%


3.81%


4.41%

Annualized return on average tangible common equity, operating

F/C

5.31%


4.25%


4.83%


5.22%


6.05%

Pre-tax, pre-provision annualized return on average assets, operating

G/A

1.23%


1.15%


1.30%


1.21%


1.27%

 

MIDSOUTH BANCORP, INC. and SUBSIDIARIES             

Reconciliation of Non-GAAP Financial Measures (unaudited) (continued)

(in thousands except per share data)    














Three Months Ended



March 31,


December 31,


September 30,


June 30,


March 31,

PER COMMON SHARE DATA


2017


2016


2016


2016


2016












Book value per common share


$    15.37


$           15.25


$            15.58


$   15.56


$    15.38

Effect of intangible assets per share


4.09


4.12


4.14


4.16


4.19

Tangible book value per common share


$    11.28


$           11.13


$            11.44


$   11.40


$    11.19














Three Months Ended



March 31,


December 31,


September 30,


June 30,


March 31,

EFFICIENCY RATIO


2017


2016


2016


2016


2016












Net interest income


$  18,066


$         18,235


$          18,253


$ 17,725


$  18,127












Noninterest income


5,044


5,071


5,152


5,139


4,744

Net gain on sale of securities


(6)


-


-


(20)


-

   Noninterest income (non-GAAP)


$    5,038


$           5,071


$            5,152


$   5,119


$    4,744












Total revenue

H

$  23,110


$         23,306


$          23,405


$ 22,864


$  22,871

Total revenue (non-GAAP)

I

$  23,104


$         23,306


$          23,405


$ 22,844


$  22,871












Noninterest expense

J

$  17,230


$         17,636


$          17,114


$ 17,041


$  16,759

Net loss on sale/valuation of other real estate owned


(15)


-


(19)


(24)


(144)

   Noninterest expense (non-GAAP)

K

$  17,215


$         17,636


$          17,095


$ 17,017


$  16,615












Efficiency ratio (GAAP)

J/H

74.56%


75.67%


73.12%


74.53%


73.28%












Efficiency ratio (non-GAAP)

K/I

74.51%


75.67%


73.04%


74.49%


72.65%

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/midsouth-bancorp-inc-reports-first-quarter-2017-results-and-declares-quarterly-dividends-300447170.html

SOURCE MidSouth Bancorp, Inc.

Copyright 2017 PR Newswire

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