LAFAYETTE, La., July 25 /PRNewswire-FirstCall/ -- MidSouth Bancorp, Inc. today reported earnings of $2,495,000 for the second quarter ended June 30, 2007, an increase of 11.6% over net income of $2,236,000 reported for the second quarter of 2006 and an increase of 28.2% over net income of $1,946,000 reported for the first quarter of 2007. Diluted earnings per share for the second quarter of 2007 were $0.38, an increase of 11.8% over the $0.34 per share for the second quarter of 2006 and 31.0% above the $0.29 per share for the first quarter of 2007. These amounts reflect a five percent (5%) stock dividend recently announced to holders of record as of September 21, 2007 payable October 23, 2007. Additionally, the Company announced an increase in the quarterly cash dividend from $.06 per quarter to $.07 per quarter.
For the six months ended June 30, 2007, earnings totaled $4,441,000, a 9.5% increase in earnings of $4,054,000 for the first six months of 2006. Diluted earnings per share were $.67 for the first six months of 2007, compared to $.61 for the first six months of 2006.
Quarterly revenues for the Company, defined as net interest income and non-interest income, increased $1,561,000, or 13.7%, for the second quarter of 2007 compared to the second quarter of 2006. The improvement in revenues resulted primarily from an increase of $947,000 in net interest income, driven by a 13.1% increase in average loan volume in quarterly comparison. Non- interest income increased $614,000, primarily due to an increase in service charges on deposit accounts, including non-sufficient funds fees. A $1,176,000 increase in non-interest expense attributed to the investment in franchise expansion offset the improvement in revenues.
Rusty Cloutier, President and Chief Executive Officer of MidSouth Bancorp, Inc., commented, "Our shareholders have realized a 16.03% return on equity and an 11.6% increase in earnings for the second quarter of 2007," said Cloutier. "Posting a strong return in such a challenging economic and competitive environment reflects the commitment of the MidSouth team to the execution of our strategic plan."
The Company's total assets ended the second quarter of 2007 at $824.0 million, a 5.7% increase over the $779.8 million in total assets recorded at June 30, 2006. Deposits were $716.9 million as of June 30, 2007, compared to $704.1 million on June 30, 2006, an increase of $12.8 million, or 1.8%. Total loans were $545.5 million, an increase of $56.0 million, or 11.4%, from $489.5 million as of June 30, 2006. Credit quality remained strong, as nonperforming assets to total assets were 0.21% for the second quarter of 2007, compared to 0.35% for the second quarter of 2006 and 0.28% in linked-quarter comparison.
"We are pleased to report a strong second quarter of loan production in both Louisiana and Texas," said Cloutier. "In linked-quarter comparison loans grew $34.9 million. We're optimistic about the opportunities to add quality loans and core deposits throughout the second half of 2007 as new branches come on line, starting with the recent opening of our Siegen Lane branch in the Baton Rouge market."
Earnings Analysis
Net Interest Income. Net interest income totaled $9,242,000 for the second quarter of 2007, an increase of 11.4%, or $947,000, from the $8,295,000 reported for the second quarter of 2006. The improvement in net interest income resulted primarily from an increase of $51.7 million in average earning assets. Total interest income from earning assets increased $1.6 million for the second quarter of 2007 compared to 2006. The volume increase in earning assets was supported by a 24 basis point increase in the yield on loans, from 8.88% to 9.12%, and a 26 basis point increase in the taxable-equivalent yield on investment securities, from 4.81% to 5.06%, in quarterly comparison. Yields on loans improved as Prime rate loans adjusted to a 25 basis point increase at the end of the second quarter of 2006, adjusting the rates earned on the portion of MidSouth Bancorp's loan portfolio that floats with changes in Prime.
The impact of increased interest income on earnings was partially offset by the increased volume and cost of interest-bearing liabilities realized in quarterly comparison. A $42.0 million increase in average volume and a 22 basis point increase in the average rate paid on interest-bearing liabilities resulted in a $664,000 increase in interest expense for the second quarter of 2007 compared to the second quarter 2006. The average rate paid on interest- bearing liabilities increased to 3.56% from 3.34%, respectively. Growth in interest-bearing liabilities was primarily in deposit products earning rates tied to market rates of interest. Net interest income increased $1,904,000, or 12.1% for the six months ended June 30, 2007 compared to the six months ended June 30, 2006. The Company's taxable-equivalent net interest margin improved 14 basis points, from 4.90% at June 30, 2006 to 5.04% at June 30, 2007.
In linked-quarter comparison, average earning assets increased $13.0 million as a $26.5 million increase in average loan volume was partially offset by a decrease in the average volume of federal funds sold. With a higher volume of loans to total earning assets, net interest income increased $888,000. Additionally, the taxable equivalent net yield on earning assets improved 35 basis points, from 4.86% for the first quarter of 2007 to 5.21% for the second quarter of 2007.
Non-interest income. Non-interest income for the second quarter of 2007 totaled $3.7 million, or 20.0% above the $3.1 million earned in the second quarter of 2006 and 13.5% above the $3.2 million earned in the first quarter of 2007. For the six months ended June 30, 2007, non-interest income increased $1.0 million, or 17.2% above non-interest income earned for the six months ended June 30, 2006. The increases in prior year and linked-quarter comparisons resulted primarily from increases in fee income from service charges on deposit accounts, including non-sufficient funds ("NSF") fees. The total number of demand deposit accounts increased approximately 2,150, or 4.7%, from 45,400 accounts at June 30, 2006 to 47,550 at June 30, 2007, with the majority of the increase in consumer checking accounts.
Operating Expenses. Non-interest expense increased $1.2 million in prior year quarterly comparison and $2.8 million in year-to-date comparison, primarily due to increased salaries and benefits costs. The number of full-time equivalent employees increased from 349 at June 30, 2006 to 398 at June 30, 2007 as a result of franchise expansion and recruitment of talented leaders to support corporate growth initiatives. Additional increases were recorded in occupancy and data processing expenses, professional fees, education and travel costs and other growth-related expenses. In linked-quarter comparison, non-interest expenses increased $166,000, as increases in the same growth-related expense categories, were mostly offset by decreases in benefits costs, marketing expenses and expenses on other real estate owned.
Included in professional fees recorded for the Company, are premiums associated with FDIC insurance assessments. For several years, as a well-capitalized financial institution, the Company has not paid FDIC insurance premiums, but has been required to pay FICO (the Financing Corporation) assessments that currently total approximately $21,000 a quarter, or $84,000 annually. FICO has assessment authority to collect funds from FDIC-insured institutions sufficient to pay interest on non-callable thrift bonds issued between 1987 and 1989, which expire with the bonds in 2019. Beginning this year, the FDIC resumed deposit insurance assessments and also issued one-time credits against the assessments to qualifying institutions. The Company qualified for a one-time credit totaling approximately $240,000, which offsets the new FDIC assessment through the third quarter of 2007. Beginning in the fourth quarter of 2007, the Company expects to record approximately $86,000 in FDIC assessments, in addition to the $21,000 in FICO assessments. FDIC and FICO assessments for 2008, based on current deposit growth projections, will average approximately $127,000 per quarter, or $508,000 for the year.
Asset Quality. At June 30, 2007, nonperforming assets totaled $1,763,000 or 0.21% of total assets, as compared to the $2,704,000, or 0.35%, recorded at June 30, 2006. Nonperforming assets decreased $508,000 in linked-quarter comparison, primarily due to a $734,000 reduction in nonaccrual loans. Allowance coverage for nonperforming assets was 293.93% at June 30, 2007. Net year-to-date charge-offs were 0.03% of total loans for the second quarter of 2007, compared to 0.02% at June 30, 2006 and at March 31, 2007.
Continued strong credit quality ratios, supported by management's most recent analysis of the Allowance for Loan and Lease Losses ("ALLL"), indicated that the ALLL/total loans ratio of .95% was appropriate at June 30, 2007. Due to the increase in loans, provision expense for loan losses of $350,000 was recorded in the second quarter 2007, compared to $300,000 in provision expense recorded in the second quarter of 2007. No provision expense was recorded in the first quarter of 2007.
About MidSouth Bancorp
One of the fastest-growing bank holding companies in the South, MidSouth Bancorp, Inc. has 30 locations in Louisiana and Texas and more than 120 ATMs. Through its wholly owned subsidiaries -- MidSouth Bank, N.A. and MidSouth Bank, Texas -- MidSouth Bancorp offers complete banking services to commercial and retail customers in south Louisiana and southeast Texas. The group is community oriented and focuses primarily on offering commercial and consumer loan and deposit services to individuals, small, and middle market businesses.
Founded in 1985, MidSouth Bank has 24 offices extending along the Interstate 10 corridor in south Louisiana: nine in Lafayette Parish, two in St. Martin Parish, one in Jefferson Davis Parish, one in St. Landry Parish, four in Iberia Parish, one in St. Mary Parish, two in Calcasieu Parish, one in Lafourche Parish, one in Terrebonne Parish and two in East Baton Rouge Parish. In addition, a new banking facility is under way in the Baton Rouge market and is scheduled to open in November. Also, a new retail location in Lake Charles is tentatively set to open in October, and the bank is expanding to Cut Off (south of Houma) in mid-August.
MidSouth Bank, Texas currently has six full-service offices in the southeast region of Texas, including Beaumont, Vidor, College Station and Conroe. It also has a commercial loan production office in the greater Houston market that will be replaced by a full-service banking facility in the fall of 2007. MidSouth Bank, Texas has three retail offices in Jefferson County, one in Orange County, one in Brazos County, and one in Montgomery County. A new facility in Conroe is scheduled to open in September.
MidSouth Bancorp's common stock is traded on the American Stock Exchange under the symbol MSL.
Forward Looking Statements
The Private Securities Litigation Act of 1995 provides a safe harbor for disclosure of information about a company's anticipated future financial performance. This act protects a company from unwarranted litigation if actual results differ from management expectations. This press release reflects management's current views and estimates of future economic circumstances, industry conditions, MidSouth's performance and financial results. A number of factors and uncertainties could cause actual results to differ from anticipated results and expectations. These factors include, but are not limited to, factors identified in Management's Discussion and Analysis under the caption "Forward Looking Statements" contained in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission.
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands except per share data)
For the
For the Quarter Quarter
Ended Ended
June 30, % March 31, %
EARNINGS DATA 2007 2006 Change 2007 Change
Total interest income $14,302 $12,691 12.7% $13,442 6.4%
Total interest expense 5,060 4,396 15.1% 5,088 -0.6%
Net interest income 9,242 8,295 11.4% 8,354 10.6%
Provision for loan losses 350 300 16.7% - -
Non-interest income 3,685 3,071 20.0% 3,247 13.5%
Non-interest expense 9,245 8,069 14.6% 9,079 1.8%
Provision for income tax 837 762 9.8% 576 45.3%
Net income $2,495 $2,235 11.6% $1,946 28.2%
PER COMMON SHARE DATA
Basic earnings per share (2) $0.38 $0.34 11.8% $0.30 26.7%
Diluted earnings per
share (2) $0.38 $0.34 11.8% $0.29 31.0%
Book value at end of
period (2) $9.53 $8.36 14.0% $9.36 1.8%
Market price at end of
period (2) $24.39 $23.01 6.0% $25.76 -5.3%
Weighted avg shares
outstanding
Basic (2) 6,570,697 6,508,437 1.0% 6,552,272 0.3%
Diluted (2) 6,647,146 6,635,395 0.2% 6,646,364 0.0%
AVERAGE BALANCE SHEET DATA
Total assets $816,542 $761,294 7.3% $803,458 1.6%
Earning assets 744,537 692,869 7.5% 731,564 1.8%
Loans and leases 526,814 465,954 13.1% 500,271 5.3%
Interest-bearing deposits 545,084 509,732 6.9% 541,808 0.6%
Total deposits 725,075 684,896 5.9% 717,808 1.0%
Total stockholders' equity 62,438 54,408 14.8% 60,372 3.4%
SELECTED RATIOS 6/30/2007 6/30/2006 3/31/2007
Return on average assets 1.23% 1.18% 3.9% 0.98% 24.8%
Return on average total
equity 16.03% 16.48% -2.7% 13.07% 22.6%
Return on average
realized equity (1) 15.76% 15.91% -0.9% 12.82% 22.9%
Average equity to average
assets 7.65% 7.15% 7.0% 7.51% 1.8%
Leverage capital ratio 8.63% 8.32% 3.7% 8.50% 1.5%
Taxable-equivalent net
interest margin 5.21% 5.00% 4.2% 4.86% 7.2%
CREDIT QUALITY
Allowance for loan losses
as a % of total loans 0.95% 1.00% -5.0% 0.96% -1.0%
Nonperforming assets to
total assets 0.21% 0.35% -39.1% 0.28% -23.9%
Net YTD charge-offs to
total loans 0.03% 0.02% 32.5% 0.02% 32.5%
(1) Excluding net unrealized gain (loss) on securities available for sale.
(2) On July 18, 2007, the Company announced a 5% stock dividend on its
common stock to holders on record as of September 21, 2007 to be paid
on October 23, 2007. Per common share data has been adjusted
accordingly.
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands)
BALANCE SHEET June 30, June 30, % Mar. 31, Dec. 31,
2007 2006 Change 2007 2006
Assets
Cash and cash equivalents $25,241 $34,070 -25.9% $55,027 $57,404
Securities available-for-
sale 185,626 188,344 -1.4% 182,285 180,674
Securities held-to-
maturity 12,132 17,519 -30.7% 13,404 15,901
Total investment
securities 197,758 205,863 -3.9% 195,689 196,575
Total loans 545,447 489,475 11.4% 510,561 499,046
Allowance for loan losses (5,182) (4,887) 6.0% (4,900) (4,977)
Loans, net 540,265 484,588 11.5% 505,661 494,069
Premises and equipment 33,477 28,572 17.2% 31,488 30,609
Goodwill and other
intangibles 9,852 10,092 -2.4% 9,905 9,957
Other assets 17,433 16,663 4.6% 16,890 16,408
Total assets $824,026 $779,848 5.7% $814,660 $805,022
Liabilities and Stockholders'
Equity
Non-interest bearing
deposits $176,526 $186,292 -5.2% $180,435 $182,596
Interest bearing deposits 540,366 517,812 4.4% 548,404 533,584
Total deposits 716,892 704,104 1.8% 728,839 716,180
Securities sold under
agreements to repurchase
and FHLB borrowings 25,737 2,797 820.2% 4,791 10,125
Junior subordinated
debentures 15,465 15,465 0.0% 15,465 15,465
Other liabilities 3,235 2,664 21.4% 3,889 3,509
Total liabilities 761,329 725,030 5.0% 752,984 745,279
Total shareholders'
equity 62,697 54,818 14.4% 61,676 59,743
Total liabilities and
shareholders' equity $824,026 $779,848 5.7% $814,660 $805,022
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands except per share data)
Three Months Ended Six Months Ended
INCOME STATEMENT June 30, June 30, % June 30, June 30, %
2007 2006 Change 2007 2006 Change
Interest income $14,302 $12,691 12.7% $27,744 $23,726 16.9%
Interest expense 5,060 4,396 15.1% 10,148 8,034 26.3%
Net interest income 9,242 8,295 11.4% 17,596 15,692 12.1%
Provision for loan
losses 350 300 16.7% 350 620 -43.5%
Service charges on
deposit accounts 2,489 2,174 14.5% 4,796 4,100 17.0%
Other charges and fees 1,196 897 33.3% 2,136 1,814 17.8%
Total non-interest
income 3,685 3,071 20.0% 6,932 5,914 17.2%
Salaries and employee
benefits 4,714 3,937 19.7% 9,501 7,723 23.0%
Occupancy expense 1,616 1,499 7.8% 3,187 2,860 11.4%
Intangible amortization 52 83 37.3% 105 165 -36.4%
Other non-interest
expense 2,863 2,550 12.3% 5,531 4,817 14.8%
Total non-interest
expense 9,245 8,069 14.6% 18,324 15,565 17.7%
Income before income
taxes 3,332 2,997 11.2% 5,854 5,421 8.0%
Provision for income
taxes 837 762 9.8% 1,413 1,367 3.4%
Net income $2,495 $2,235 11.6% $4,441 $4,054 9.5%
Earnings per share,
diluted (1) $0.38 $0.34 13.4% $0.67 $0.61 9.8%
.
(1) On July 18, 2007, the Company announced a 5% stock dividend on its
common stock to holders on record as of September 21, 2007 to be paid
on October 23, 2007. Per common share data has been adjusted
accordingly.
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands except per share data)
INCOME STATEMENT Second First Fourth Third Second
Quarterly Trends Quarter Quarter Quarter Quarter Quarter
2007 2007 2006 2006 2006
Interest income $14,302 $13,442 $13,405 $13,104 $12,691
Interest expense 5,060 5,088 4,955 4,662 4,396
Net interest income 9,242 8,354 8,450 8,442 8,295
Provision for loan losses 350 - 180 50 300
Net interest income after
provision for loan losses 8,892 8,354 8,270 8,392 7,995
Total non-interest income 3,685 3,247 3,010 3,414 3,071
Total non-interest expense 9,245 9,079 9,070 8,489 8,069
Income before income taxes 3,332 2,522 2,210 3,317 2,997
Income taxes 837 576 461 900 762
Net income $2,495 $1,946 $1,749 $2,417 $2,235
Earnings per share, basic (1) $0.38 $0.30 $0.27 $0.37 $0.34
Earnings per share,
diluted (1) $0.38 $0.29 $0.27 $0.36 $0.34
Book value per share (1) $9.53 $9.36 $9.12 $8.96 $8.36
Return on Average Equity 16.03% 13.07% 11.69% 16.98% 16.48%
(1) On July 18, 2007, the Company announced a 5% stock dividend on its
common stock to holders on record as of September 21, 2007 to be paid
on October 23, 2007. Per common share data has been adjusted
accordingly.
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands)
June 30, June 30, % Mar. 30, Dec. 31,
2007 2006 Change 2007 2006
Asset Quality Data
Nonaccrual loans $840 $543 54.7% $1,574 $1,793
Loans past due 90 days and over 596 2,104 -71.7% 481 98
Total nonperforming loans 1,436 2,647 -45.7% 2,055 1,891
Other real estate owned 251 32 684.4% 158 368
Other foreclosed assets 76 25 204.0% 58 55
Total nonperforming assets $1,763 $2,704 -34.8% $2,271 $2,314
Nonperforming assets to
total assets 0.21% 0.35% -39.1% 0.28% 0.29%
Nonperforming assets to
total loans + OREO + other
foreclosed assets 0.32% 0.55% -41.8% 0.44% 0.46%
ALL to nonperforming assets 293.93% 180.73% 62.6% 215.76% 215.08%
ALL to nonperforming loans 360.86% 184.62% 95.5% 238.44% 263.19%
ALL to total loans 0.95% 1.00% -5.0% 0.96% 1.00%
Year-to-date charge-offs $187 $310 -39.7% $95 $542
Year-to-date recoveries 42 223 -81.2% 18 314
Year-to-date net charge-offs $145 $87 66.7% $77 $228
Net YTD charge-offs to total
loans 0.03% 0.02% 32.5% 0.02% 0.05%
MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
Yield Analysis (unaudited)
(in thousands) Three Months Ended Three Months Ended
June 30, 2007 June 30, 2006
Tax Tax
Equi- Equi-
Average valent Yield/ Average valent Yield/
Balance Interest Rate Balance Interest Rate
Taxable securities $88,485 $1,056 4.79% $107,978 $1,220 4.53%
Tax-exempt securities 111,606 1,477 5.31% 92,611 1,190 5.15%
Equity securities 2,544 23 3.63% 2,343 15 2.57%
Federal funds sold 15,088 195 5.18% 23,983 295 4.93%
Loans 526,814 11,984 9.12% 465,954 10,318 8.88%
Total interest earning
assets 744,537 14,735 7.94% 692,869 13,038 7.55%
Noninterest earning
assets 72,005 68,425
Total assets $816,542 $761,294
Interest bearing
liabilities:
Deposits $545,084 $4,600 3.38% $509,732 $4,032 3.17%
Repurchase agreements
and federal funds
purchased 9,228 116 5.04% 2,724 29 4.27%
Short term borrowings 108 1 5.13% - - -
Junior subordinated
debentures 15,465 343 8.90% 15,465 335 8.69%
Total interest
bearing
liabilities 569,885 5,060 3.56% 527,921 4,396 3.34%
Noninterest bearing
liabilities 184,219 178,965
Shareholders' equity 62,438 54,408
Total interest
bearing liabilities
and shareholders'
equity $816,542 $761,294
Net interest income (TE)
and margin $9,675 5.21% $8,642 5.00%
MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
Yield Analysis (unaudited)
(in thousands)
Six Months Ended Six Months Ended
June 30, 2007 June 30, 2006
Tax Tax
Equi- Equi-
Average valent Yield/ Average valent Yield/
Balance Interest Rate Balance Interest Rate
Taxable securities $86,938 $2,036 4.72% $96,870 $2,137 4.45%
Tax-exempt securities 110,736 2,913 5.30% 87,151 2,209 5.11%
Equity securities 2,528 44 3.51% 2,185 39 3.60%
Federal funds sold 24,268 625 5.19% 30,629 701 4.62%
Loans 513,616 22,978 9.02% 454,844 19,283 8.55%
Total interest earning
assets 738,086 28,596 7.81% 671,679 24,369 7.32%
Noninterest earning
assets 71,975 67,669
Total assets $810,061 $739,348
Interest bearing
liabilities:
Deposits $543,455 $9,283 3.44% $489,358 $7,335 3.02%
Repurchase agreements
and federal funds
purchased 6,800 165 4.89% 2,383 49 4.15%
Short term
borrowings 847 28 6.67% - - -
Junior subordinated
debentures 15,465 672 8.76% 15,465 650 8.48%
Total interest
bearing
liabilities 566,567 10,148 3.61% 507,206 8,034 3.19%
Noninterest bearing
liabilities 182,083 178,083
Shareholders' equity 61,411 54,059
Total interest
bearing
liabilities and
shareholders'
equity $810,061 $739,348
Net interest income
(TE) and margin $18,448 5.04% $16,335 4.90%
