EX-99.1 2 ex99_1.htm EXHIBIT 99.1 ex99_1.htm
The following unaudited pro forma statement of operations data for the nine months ended September 30, 2012, and for the year ended December 31, 2011, give effect to the merger as if it occurred on January 1, 2011. The unaudited pro forma combined balance sheet data was computed as if the merger had been completed on September 30, 2012. This information is based on the historical consolidated balance sheets and related adjusted historical consolidated statements of income of MidSouth and PSB and gives effect to the merger using the purchase method of accounting for business combinations. The pro forma financial information assumes that no adjustments are made to the merger consideration as a result of (1) PSB’s Adjusted Capital being below $26.0 million as of the closing date or (2) the credit losses on the specified loans for purposes of the CVR payment exceeding the threshold that would require adjustment thereto.
 
The companies may have performed differently had they been combined at the date or for the periods presented. You should not rely on the selected unaudited pro forma combined financial data as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that MidSouth will experience after the merger.

The unaudited pro forma combined financial data includes estimated adjustments to record assets and liabilities of PSB at their respective fair values and represents estimates based on available information.  The pro forma adjustments included herein are subject to change as additional information becomes available.  The final allocation of the purchase price will be determined after further analyses with respect to the fair value of tangible and intangible assets as of the date the merger is completed.  The excess of the total purchase price over the net of the amounts assigned to tangible and identifiable intangible assets acquired and liabilities assumed is recognized as goodwill.  The final adjustments may be materially different from the unaudited pro forma adjustments presented herein.
 
 
 
  
MidSouth Bancorp, Inc. and Subsidiaries
  
Unaudited Pro Forma Combined Consolidated Balance Sheet
  
(in thousands)
  
                             
   
September 30, 2012
  
   
MidSouth
     PSB Financial     Pro Forma            
    Bancorp, Inc.    
Corp
     Acquisition        
Combined
  
Assets
  
Historical
    
Historical
     Adjustments        
Pro Forma
  
                             
Cash and due from banks
   $ 57,155     $ 22,348     $ (27,603 ) (1 )   $ 51,900  
Federal funds sold
     2,500       5,800       -           8,300  
Time Deposits in other banks
     709       -       -           709  
Securities available-for-sale
     341,170       162,849       -           504,019  
Securities held-to-maturity
     117,628       -       -           117,628  
Other investments
     5,820       2,489       -           8,309  
Loans
     808,833       269,684       (14,000 ) (2 )     1,064,517  
Allowance for loan losses
     (7,374 )     (3,580 )     3,580   (3 )     (7,374 )
             Loans, net of allowance
     801,459       266,104       (10,420 )         1,057,143  
Bank premises and equipment, net
     48,086       11,834       5,000   (4 )     64,920  
Accrued interest receivable
     5,562       2,055       -           7,617  
Goodwill
     24,824       3,364       8,031   (5 )     36,219  
Other assets
     24,023       16,586       6,248   (6 )     46,857  
                                Total Assets
   $ 1,428,936     $ 493,429     $ (18,744 )       $ 1,903,621  
                                     
Liabilities and Stockholders' Equity
                                    
Liabilities:
                                    
        Deposits
   $ 1,179,012     $ 402,995     $ 385   (7 )   $ 1,582,392  
        Notes payable
     -       27,483       -           27,483  
        Securities sold under repurchase agreements
     55,233       1,085       -           56,318  
        Junior subordinated debenture
     15,465       13,919       -           29,384  
        Other liabilities
     10,891       7,667       151   (8 )     18,709  
                                 Total liabilities
     1,260,601       453,149       536           1,714,286  
Stockholders' Equity:
                                    
     Preferred stock
     32,000       9,603       397   (9 )     42,000  
     Common stock
     1,063       720       (644 ) (10 )     1,139  
     Additional paid-in-capital
     99,066       477       10,447   (11 )     109,990  
     Unearned ESOP shares
     -       (173 )     173   (12 )     -  
     Accumulated other comprehensive income
     9,390       3,245       (3,245 ) (13 )     9,390  
     Treasury stock
     (3,286 )     -       -           (3,286 )
     Retained earnings
     30,102       26,408       (26,408 ) (14 )     30,102  
                                Total stockholders' equity
     168,335       40,280       (19,280 )         189,335  
Total Liabilities and Stockholders' Equity
   $ 1,428,936     $ 493,429     $ (18,744 )       $ 1,903,621  
                                     
(1) To record $18 million of cash paid to PSB common stockholders (including the CVR threshold amount of $2 million) and $9.603 million paid to PSB preferred stockholders for redemption of shares
  
(2) To record estimated fair value adjustment of PSB's loans
                            
(3) To eliminate preacquisition allowance for loan losses on PSB's financial statements
              
(4) To record estimated fair value adjustment of PSB's premises and equipment
              
(5) To eliminate preacquisition goodwill on PSB's financial statements and record goodwill on acquisition
  
(6) To record estimated fair value of the core deposit intangible of PSB
                      
(7) To record estimated fair value adjustment of PSB's time deposits
                      
(8) To record the estimated deferred income taxes of PSB
                              
(9) To record the redemption of PSB preferred stock and the issuance of MidSouth preferred stock to be issued to PSB's stockholders
  
(10) To eliminate the par value of PSB common stock and to record the par value of MidSouth stock to be issued to PSB's stockholders
  
(11) To eliminate the the additional paid-in-capital on PSB's financial statements and record the excess of fair value over par value of MidSouth common stock to be issued to PSB's stockholders
  
(12) To eliminate value of preacquisition unearned ESOP shares on PSB's financial statements
  
(13) To eliminate preacquisition accumulated other comprehensive income on PSB's financial statements
  
(14) To eliminate preacquisition retained earnings on PSB's financial statements
              

 
The following table provides the calculation of the purchase price used in the pro forma financial statements.
  
 
  
MidSouth Bancorp, Inc. and Subsidiaries
  
Purchase Price Allocation
  
(in thousands)
  
       
       
Allocation of purchase price:
      
Common stock (756,534 shares at $14.54 per share)
   $ 11,000  
    Preferred stock (100,000 shares at $100.00 per share)
     10,000  
 Cash
     18,000  
  Net assets acquired (book value)
     (30,677 )
      8,323  
         
Allocated to:
        
   Loans, net of allowance
     (10,420 )
  Bank premises and equipment, net
     5,000  
   Core deposit intangible
     6,248  
   Deferred income tax liability
     (151 )
 Deposits
     (385 )
  Write-off of goodwill on PSB's books
     (3,364 )
Total allocations
     (3,072 )
         
         
      Purchase price less allocation to identifiable assets and liabilities (goodwill)
   $ 11,395  
 
 

MidSouth Bancorp, Inc. and Subsidiaries
  
Unaudited Pro Forma Combined Consolidated Statement of Operations
  
(in thousands)
  
       
   
For the Nine Months Ended September 30, 2012
  
   
MidSouth
    
PSB Financial
    
Pro Forma
            
   
Bancorp, Inc.
    
Corp
    
Acquisition
        
Combined
  
   
Historical
    
Historical
          Adjustments        
Pro Forma
  
Interest income:
                            
Loans, including fees
   $ 37,298     $ 11,003     $ 1,650   (1 )   $ 49,951  
Investments
     8,609       3,208       (675 ) (2 )     11,022  
                      (120 ) (3 )        
Federal funds sold
     6       13       -           19  
Interest bearing deposits in other banks
     73       37       -           110  
     Total interest income
     45,986       14,261       855           61,102  
                                     
Interest expense:
                                    
Deposits
     3,189       1,675       (86 ) (4 )     4,778  
Other borrowings
     564       559       -           1,123  
Junior subordinated debentures
     733       401       -           1,134  
     Total interest expense
     4,486       2,635       (86 )         7,035  
                                     
Net interest income
     41,500       11,626       941           54,067  
Provision for loan losses
     1,550       154       -           1,704  
Net interest income after provision for loan losses
     39,950       11,472       941           52,363  
                                     
Non-interest income:
                                    
Service charges on deposits
     5,590       1,492       -           7,082  
Gain or loss on securities, net
     204       (194 )     -           10  
Other charges and fees
     5,453       1,072       -           6,525  
     Total non-interest income
     11,247       2,370       -           13,617  
                                     
Non-interest expenses:
                                    
Salaries and employee benefits
     18,511       5,425       (1,485 ) (5 )     22,451  
Occupancy expense
     8,283       1,449       -           9,732  
FDIC Insurance
     695       229       -           924  
Other
     12,599       3,870       (521 ) (6 )     15,948  
     Total non-interest expenses
     40,088       10,973       (2,007 )         49,055  
                                     
Income before income taxes
     11,109       2,869       2,948           16,926  
Provision for income taxes
     3,096       703       1,032           4,831  
     Net earnings
   $ 8,013     $ 2,166     $ 1,916         $ 12,095  
                                     
Dividends on preferred stock
     1,180       146       300   (7 )     1,626  
Net earnings available to common shareholders
   $ 6,833     $ 2,020     $ 1,616         $ 10,469  
                                     
Weighted average common shares outstanding:
                              
  Basic
     10,471       73                   11,228  
  Diluted
     10,499       73                   11,256  
Earnings per share:
                                    
  Basic
   $ 0.65     $ 27.75                 $ 0.93  
  Diluted
   $ 0.65     $ 27.75                 $ 0.93  
                                     
(1) To record the accretion of the fair value adjustments to loans
                      
(2) To record the increase in bond amortization as a result of the acquisition
              
(3) To record the opportunity cost of cash paid out to PSB shareholders
                      
(4) To record the amortization of the fair value adjustments to deposits
                      
(5) To record the estimated cost savings resulting from the acquisition
                      
(6) To record the estimated cost savings resulting from the acquisition, net of the core deposit intangible amortization
  
(7) To record the dividend on preferred stock issued to PSB shareholders
                      

MidSouth Bancorp, Inc. and Subsidiaries
  
Unaudited Pro Forma Combined Consolidated Statement of Operations
  
(in thousands)
  
       
   
For the Twelve Months Ended December 31, 2011
  
   
MidSouth
    
PSB Financial
    
Pro Forma
            
   
Bancorp, Inc.
    
Corp
             Acquisition      
Combined
  
   
Historical
    
Historical
            Adjustments      
Pro Forma
  
Interest income:
                            
Loans, including fees
   $ 41,887     $ 14,001     $ 2,800   (1 )   $ 58,688  
Investments
     8,910       4,971       (1,000 ) (2 )     12,721  
                      (160 ) (3 )        
Federal funds sold
     14       17       -           31  
Interest bearing deposits in other banks
     196       19       -           215  
     Total interest income
     51,007       19,008       1,640           71,655  
                                     
Interest expense:
                                    
Deposits
     4,023       3,074       (231 ) (4 )     6,866  
Other borrowings
     808       1,392       -           2,200  
Junior subordinated debentures
     971       778       -           1,749  
     Total interest expense
     5,802       5,244       (231 )         10,815  
                                     
Net interest income
     45,205       13,764       1,871           60,840  
Provision for loan losses
     3,925       729       -           4,654  
Net interest income after provision for loan losses
     41,280       13,035       1,871           56,186  
                                     
Non-interest income:
                                    
Service charges on deposits
     6,921       3,076       -           9,997  
Gain or loss on securities, net
     99       1,816       -           1,915  
Other charges and fees
     6,041       139       -           6,180  
     Total non-interest income
     13,061       5,031       -           18,092  
                                     
Non-interest expenses:
                                    
Salaries and employee benefits
     21,763       7,867       (1,237 ) (5 )     28,393  
Occupancy expense
     9,281       1,129       -           10,410  
Other
     18,260       5,756       (200 ) (6 )     23,816  
     Total non-interest expenses
     49,304       14,752       (1,437 )         62,619  
                                     
Income before income taxes
     5,037       3,314       3,308           11,659  
Provision for income taxes
     564       854       1,158           2,576  
     Net earnings
   $ 4,473     $ 2,460     $ 2,150         $ 9,083  
                                     
Dividends on preferred stock
     1,802       195       400   (7 )     2,397  
Net earnings available to common shareholders
   $ 2,671     $ 2,265     $ 1,750         $ 6,686  
                                     
Weighted average common shares outstanding:
                              
  Basic
     9,787       73                   10,544  
  Diluted
     9,799       73                   10,556  
Earnings per share:
                                    
  Basic
   $ 0.27     $ 31.02                 $ 0.63  
  Diluted
   $ 0.27     $ 31.02                 $ 0.63  
                                     
(1) To record the accretion of the fair value adjustments to loans
                      
(2) To record the increase in bond amortization as a result of the acquisition
              
(3) To record the opportunity cost of cash paid out to PSB shareholders
              
(4) To record the amortization of the fair value adjustments to deposits
              
(5) To record the estimated cost savings resulting from the acquisition
              
(6) To record the estimated cost savings resulting from the acquisition, net of the core deposit intangible amortization
  
(7) To record the dividend on preferred stock issued to PSB shareholders