8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)			July 28, 2014
MidSouth Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Louisiana		1-11826		72-1020809
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)
102 Versailles Boulevard, Lafayette, Louisiana				70501
(Address of principal executive offices)				(Zip Code)
Registrant’s telephone number, including area code    337-237-8343
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On July 28, 2014, MidSouth Bancorp, Inc. (the “Company”) issued a press release regarding the Company’s earnings for the quarter ended June 30, 2014.  The Company’s earnings release, including financial highlights, is attached as Exhibit 99.1.

The preceding information (including Exhibit 99.1) is being furnished pursuant to Item 2.02 of this Form 8-K.  This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth  by specific reference in such filing.

Item 8.01.  OTHER EVENTS

On July 28, 2014, the Board of MidSouth Bancorp, Inc. announced a cash dividend was declared in the amount of nine cents ($.09) per share to be paid on its common stock on November 3, 2014 to shareholders of record on October 15, 2014.  The Board also announced a cash dividend of 1.00% per preferred share was declared on its 4.00% Non-Cumulative Perpetual Convertible Preferred Stock.  The dividend is payable on October 15, 2014 to shareholders of record on October 1, 2014.

Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(d)           Exhibits

99.1 Press Release dated  July 28, 2014.

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		MIDSOUTH BANCORP, INC.
		Registrant
By:	/s/ James R. McLemore
	James R. McLemore
	Chief Financial Officer
Date:	July 28, 2014

EX-99.1

Investor Contacts:  Rusty Cloutier

   President & CEO or

   Jim McLemore, CFA

   Sr. EVP & CFO

   337.237.8343

MidSouth Bancorp, Inc. Reports Second Quarter 2014 Results and Declares Quarterly Dividends

Quarterly Highlights

·   Diluted operating EPS $0.35 versus $0.29 for 2Q 2013

·   Period end loan growth of $40.0 million or 13.5% annualized

·   Average loan growth of $58.9 million or 20.6% annualized

·   Operating noninterest expense declined sequentially by $444,000 or 2.5%

·   Operating return on average tangible common equity of 14.63%

·   Core FTE NIM on linked quarter basis of 4.39% versus 4.33%

LAFAYETTE, LA., July 28, 2014/PRNewswire-FirstCall/ -- MidSouth Bancorp, Inc. (“MidSouth”) (NYSE:MSL) today reported quarterly net earnings available to common shareholders of $3.9 million for the second quarter of 2014, compared to net earnings available to common shareholders of $3.3 million reported for the second quarter of 2013 and $6.7 million in net earnings available to common shareholders for the first quarter of 2014.  Diluted earnings for the second quarter of 2014 were $0.34 per common share, compared to $0.29 per common share reported for the second quarter of 2013 and $0.57 per common share reported for the first quarter of 2014.  The first quarter of 2014 included $3.0 million of executive officer life insurance proceeds recorded in noninterest income following the unexpected passing of former Vice Chairman and Chief Operating Officer Jerry Reaux and after-tax related noninterest expenses of $160,000.  The first and second quarters of 2014 also included efficiency consultant expenses of $53,000 and $107,000, respectively.  Excluding these non-operating income and expenses, operating earnings per share for the first and second quarter of 2014 was $0.33 and $0.35, respectively.

C. R. Cloutier, President and CEO, commenting on second quarter earnings remarked, “We are pleased to report another strong quarter of loan growth and improvements in efficiency and operating earnings in our second quarter results.  I am very proud of our team and the excellent execution of our plan to improve earnings for our shareholders.  We have improved operating diluted earnings per share by 11 cents or 19% in the first six months of this year compared to last year.   This was despite of the loss of over 13 cents per diluted share of income from purchase accounting adjustments over this period and no new merger transactions to replace any of this lost income.  Having to replace this much lost income and still grow operating earnings 19% through old-fashioned organic growth and cost savings has been challenging and I am proud of what our team has accomplished.  However, our work is not done and our focus will continue to be improvement in earnings for our shareholders – every day, every week, every month.”

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During the second quarter, MidSouth suffered a tremendous loss with the passing of Dr. Joe B. Hargroder, a founding board member.  Dr. Hargroder served as Vice Chairman of the Board from 1990 to 2012, having relinquished the role in May 2012 due to declining health.  In recognition of his lifetime of service to Jefferson Davis Parish and the vital role he played in the founding of MidSouth, the Board of Directors established the Dr. Joe Hargroder Scholarship in 2005 through the McNeese Foundation for students from Jefferson Davis Parish.

Balance Sheet

Consolidated assets and total deposits remained constant at $1.9 billion and $1.5 billion for the quarters ended June 30, 2014 and March 31, 2014, respectively.  Our stable core deposit base, which excludes time deposits, declined $14.1 million for the quarter ended June 30, 2014 and accounted for 85.5% of deposits compared to 85.1% of deposits at March 31, 2014.  Net loans totaled $1.2 billion at June 30, 2014 and March 31, 2014, compared to $1.1 billion at December 31, 2013.  Total loans grew $40.0 million, or 3.4% for the quarter and $86.6 million for the six months ended June 30, 2014.  The majority of the loan growth was in the commercial loan portfolio, along with solid growth in the commercial real estate and consumer loan portfolios over the three and six months ended June 30, 2014.

MidSouth’s Tier 1 leverage capital ratio was 9.81% at June 30, 2014 compared to 9.71% at March 31, 2014.  Tier 1 risk-based capital and total risk-based capital ratios were 13.34% and 14.03% at June 30, 2014, compared to 13.49% and 14.18% at March 31, 2014, respectively.  Tier 1 common equity to total risk-weighted assets at June 30, 2014 was 8.12%.  Tangible common equity totaled $111.4 million at June 30, 2014, compared to $107.3 million at March 31, 2014.  Tangible book value per share at June 30, 2014 was $9.86 versus $9.51 at March 31, 2014.

 Asset Quality

Nonperforming assets totaled $13.5 million at June 30, 2014, an increase of $654,000 over the $12.9 million reported at March 31, 2014.  The increase resulted from an $888,000 increase in nonaccrual loans.  Allowance coverage for nonperforming loans decreased to 127.53% at June 30, 2014 compared to 139.66% at March 31, 2014.  The ALL/total loans ratio was 0.74% at June 30, 2014 and March 31, 2014.  Including valuation accounting adjustments on acquired loans, the total valuation accounting adjustment plus ALL was 1.29% of loans at June 30, 2014.  The ratio of annualized net charge-offs to total loans was 0.29% for the three months ended June 30, 2014 compared to 0.19% for the three months ended March 31, 2014.

Total nonperforming assets to total loans plus ORE and other assets repossessed was 1.10% at June 30, 2014 compared to 1.08% at March 31, 2014.  Loans classified as troubled debt restructurings (“TDRs”) totaled $417,000 at June 30, 2014, a decrease of $1.2 million from the $1.6 million reported at March 31, 2014.  The decrease in TDRs resulted from the payoff of a loan relationship totaling $1.2 million that was previously placed on TDR status during the first quarter of 2014.  Classified assets, including ORE, increased $1.6 million, or 5.1%, to $33.1 million compared to $31.5 million at March 31, 2014.

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Second Quarter 2014 vs. Second Quarter 2013 Earnings Comparison

Second quarter 2014 net earnings available to common shareholders totaled $3.9 million compared to $3.3 million for the second quarter of 2013.  Revenues from consolidated operations decreased $372,000 in quarterly comparison.  Interest income decreased $761,000 in quarterly comparison, as a $1.2 million decrease in loan valuation income was partially offset by an increase in interest income earned on a higher volume of loans.  Noninterest income increased $257,000 in quarterly comparison, from $5.0 million for the three months ended June 30, 2013 to $5.3 million for the three months ended June 30, 2014.  Increases in noninterest income consisted primarily of $177,000 in service charges on deposit accounts, $128,000 in gain on sales of securities and $215,000 in ATM/debit card income, which were partially offset by decreases of $145,000 in fees earned from credit-related products and $89,000 in mortgage banking fees.

Excluding the $107,000 of efficiency consultant expenses recorded in the second quarter of 2014, noninterest expenses decreased $1.3 million for the second quarter 2014 compared to second quarter 2013 and consisted primarily of decreases of $351,000 in expenses on ORE and other repossessed assets, $155,000 in marketing expenses, $209,000 in legal and professional fees, $122,000 in corporate development expense, $124,000 in courier expense and $155,000 in the cost of printing and supplies.  The decreased costs were partially offset by a $119,000 increase in salaries and benefits costs and a $110,000 increase in ATM/debit card expense.  The increase in salaries and benefits costs was driven by an increase in group health insurance expense of $248,000 due to a higher volume of claims.  Net of the increase in group health insurance, salary and benefit costs declined $129,000.  The provision for loan losses decreased $50,000, and income tax expense increased $369,000 in quarterly comparison.

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 second 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 $90,000 for the three months ended June 30, 2014.

Fully taxable-equivalent (“FTE”) net interest income totaled $19.5 million and $20.1 million for the quarters ended June 30, 2014 and 2013, respectively.  The FTE net interest income decreased $620,000 in prior year quarterly comparison primarily due to a reduction in purchase accounting adjustments on acquired loans.  The average volume of loans increased $125.6 million in quarterly comparison, and the average yield on loans decreased 85 basis points, from 6.76% to 5.91%.  The purchase accounting adjustments added 23 basis points to the average yield on loans for the second quarter of 2014 and 75 basis points to the average yield on loans for the second quarter of 2013.  Net of the impact of the purchase accounting adjustments, average loan yields declined 33 basis points in prior year quarterly comparison, from 6.01% to 5.68%.  Loan yields have declined primarily as the result of a sustained low interest rate environment.

Investment securities totaled $450.0 million, or 23.7% of total assets at June 30, 2014, versus $530.9 million, or 28.5% of total assets at June 30, 2013.  The investment portfolio had an effective duration of 3.9 years and an unrealized gain of $4.2 million at June 30, 2014.  The average volume of investment securities decreased $72.4 million in prior year quarterly comparison.  The average tax equivalent yield on investment securities increased 11 basis points, from 2.52% to 2.63%.  The $72.4 million decrease in investment securities combined with a $23.7 million increase in short-term FHLB advances over the past twelve months primarily funded the increase in loans during the same period.

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The average yield on all earning assets decreased 33 basis points in prior year quarterly comparison, from 5.26% for the second quarter of 2013 to 4.93% for the second quarter of 2014.  Net of the impact of purchase accounting adjustments, the average yield on total earning assets decreased 1 basis point, from 4.78% to 4.77% for the three month periods ended June 30, 2013 and 2014, respectively.

The impact to interest expense of a $43.3 million increase in the average volume of interest bearing liabilities was offset by a 5 basis point decrease in the average rate paid on interest bearing liabilities, from 0.51% at June 30, 2013 to 0.46% at June 30, 2014.  Net of purchase accounting adjustments on acquired certificates of deposit and FHLB borrowings, the average rate paid on interest bearing liabilities was 0.60% for the second quarter of 2013 and declined to 0.51% for the second 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 29 basis points, from 4.87% for the second quarter of 2013 to 4.58% for the second quarter of 2014.  Net of purchase accounting adjustments on loans, deposits and FHLB borrowings, the FTE margin increased 6 basis points, from 4.33% for the second quarter of 2013 to 4.39% for the second quarter of 2014.

Second Quarter 2014 vs. First Quarter 2014 Earnings Comparison

In sequential-quarter comparison, net earnings available to common shareholders decreased $2.7 million primarily due to the $3.0 million of life insurance proceeds recorded as noninterest income in the first quarter of 2014.  Additionally, the decrease in net earnings available to common shareholders resulted from a $650,000 increase in the provision for loan losses and a $233,000 increase in income tax expense, which were offset by an increase of $218,000 in net interest income and a decrease of $579,000 in noninterest expense.  Excluding the $3.0 million of life insurance income recorded in the first quarter of 2014, noninterest income increased $344,000 in sequential-quarter comparison.  The increase resulted primarily from a $128,000 gain on sale of securities, a $139,000 increase in ATM/debit card income and a $68,000 increase in service charge income on deposits.

Noninterest expenses in the first and second quarter of 2014 included efficiency consultant expenses of $53,000 and $107,000, respectively.  Additionally, noninterest expenses in the first quarter of 2014 included $189,000 of non-operating expenses primarily associated with incentive compensation plans for Mr. Reaux.  Excluding these non-operating expenses, noninterest expense decreased $444,000 and primarily included decreases of $186,000 in salaries and benefits costs, $102,000 in occupancy expenses and $72,000 in courier expense.

FTE net interest income increased $198,000 in sequential-quarter comparison primarily due to an increase of $58.9 million in the average volume of loans.  The average yield on loans decreased 27 basis points, from 6.18% for the first quarter of 2014 to 5.91% for the second quarter of 2014, primarily due to a reduction in purchase accounting adjustments on acquired loans.  The average yield on total earning assets decreased 9 basis points for the same period, from 5.02% to 4.93%, respectively.  An average increase of $15.8 million in interest bearing liabilities was primarily due to an average increase of $13.9 million in overnight repurchase agreements.  As a result of these changes in volume and yield on earning assets and interest bearing liabilities, the FTE net interest margin decreased 8 basis points, from 4.66% to 4.58%.  Net of purchase accounting adjustments, the FTE net interest margin increased 6 basis points, from 4.33% for the quarter ended March 31, 2014 to 4.39% for the quarter ended June 30, 2014.

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Year-Over-Year Earnings Comparison

In year-over-year comparison, net earnings available to common shareholders increased $4.2 million and included $3.0 million of executive life insurance proceeds recorded in noninterest income and related noninterest expenses of $189,000 in the first quarter of 2014.  The first quarter of 2013 included $214,000 of net merger and conversion related expenses associated with the PSB acquisition, and the first six months of 2014 included efficiency consultant expenses of $160,000.  Excluding these non-operating income and expenses, operating earnings increased $1.4 million in year-to-date comparison and included a $743,000 increase in noninterest income and a $1.0 million decrease in non-interest expense.

Excluding the $3.0 million of life insurance income, increases in noninterest income consisted primarily of $386,000 in service charges on deposit accounts and $573,000 in ATM and debit card income.  Excluding the non-operating expenses in 2014 and 2013, decreases in noninterest expense included $321,000 in marketing expenses, $303,000 in legal and professional fees, $250,000 in the cost of printing and supplies, $159,000 in courier expense, $112,000 in fraud losses and $312,000 in expenses on ORE and repossessed assets.  The decrease was partially offset by a $401,000 increase in salaries and benefits costs (primarily increased group health insurance costs) and a $366,000 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 $334,000 decrease in dividends on preferred stock in year-over-year comparison.

In year-to-date comparison, FTE net interest income decreased $132,000 primarily due to a decrease in purchase accounting adjustments that resulted in a decrease in the average yield on loans, from 6.70% at June 30, 2013 to 6.04% at June 30, 2014.  The average yield on earning assets decreased in year-to-date comparison, from 5.14% at June 30, 2013 to 4.98% at June 30, 2014.  The purchase accounting adjustments added 77 basis points to the average yield on loans for the first six months of 2013 and 32 basis points for the first six months of 2014.  Net of purchase accounting adjustments, the average yield on earning assets increased 9 basis points, from 4.66% at June 30, 2013 to 4.75% at June 30, 2014.

Interest expense decreased in year-over-year comparison primarily due to a decrease in the average rate paid on interest bearing liabilities.  The average rate paid on interest-bearing liabilities decreased 7 basis points, from 0.54% at June 30, 2013 to 0.47% at June 30, 2014.  Net of purchase accounting adjustments, the average rate paid on interest-bearing liabilities decreased 11 basis points, from 0.63% at June 30, 2013 to 0.52% at June 30, 2014.  The FTE net interest margin decreased 12 basis points, from 4.74% for the six months ended June 30, 2013 to 4.62% for the six months ended June 30, 2014.  Net of purchase accounting adjustments, the FTE net interest margin increased 18 basis points, from 4.18% to 4.36% for the six months ended June 30, 2013 and 2014, respectively.

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Third Quarter Events

MidSouth is reporting today a number of earnings impacts that have occurred or are expected to occur in the third quarter of 2014.

In July 2014, MidSouth closed on the sale of commercial property held as ORE which resulted in a $1.1 million gain on sale of ORE and reduced ORE owned from the $6.3 million held at June 30, 2014 to $4.9 million, or 22.2%.  The $1.1 million gain recorded will have an estimated after tax effect on diluted earnings per share of $0.06 for the third quarter of 2014.

On August 22, 2014, MidSouth will redeem in full its $7.2 million Statutory Trust 1 and Capital Securities (TRUPS) at a redemption price of 103.57% to par.  The redemption has been approved by federal banking regulators and will result in an after tax charge to third quarter earnings of approximately $167,000, or $0.01 on diluted earnings per share.  The resulting improvement in earnings from the reduction in interest expense on the TRUPS, net of the impact of the cost of funds used to pay off the TRUPS and the reduction in dividend income earned on the Capital Securities is estimated to be approximately $113,000 per quarter after tax or $0.01.  As of June 30, 2014, proforma ratios reflecting the payoff of the Statutory Trust 1 result in a 40 basis point decrease in the Tier 1 leverage ratio, from 9.81% to 9.41%.  Proforma Tier 1 risk-based capital ratio and total risk based capital ratios decrease 52 basis points, to 12.82% and 13.51%, respectively.

Third quarter 2014 earnings will also be impacted by approximately $200,000 in FIS consulting costs associated with a process improvement initiative and $330,000 in costs associated with the demolition and rebuilding of a banking center.  The process improvement initiative began in the second quarter of 2014 and will be on-going through year-end.  The current banking center in Sulphur, Louisiana will be demolished and a new banking center constructed to service expected growth in that market from multiple oilfield related expansion projects slated in the area.  The after tax effect of the $550,000 in nonoperating costs expected in the third quarter is estimated to be $0.03 on diluted earnings per share.

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 November 3, 2014 to shareholders of record as of the close of business on October 15, 2014.  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 October 15, 2014 to shareholders of record as of the close of business on October 1, 2014.  MidSouth’s Series C Preferred Stock is quoted on the OTC Bulletin Board (“OTCBB”) under the ticker symbol MSLXP.

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About MidSouth Bancorp, Inc.

MidSouth Bancorp, Inc. is a financial holding company headquartered in Lafayette, Louisiana, with assets of $1.9 billion as of June 30, 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 60 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 www.midsouthbank.com.

Forward-Looking Statements

Certain statements contained herein are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties.  These statements include, among others, the expected impacts of 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.

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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	6/30/2014			3/31/2014			12/31/2013			9/30/2013			6/30/2013
Total interest income	$	20,595		$	20,399		$	21,014		$	20,704		$	21,356
Total interest expense		1,482			1,504			1,575			1,633			1,614
Net interest income		19,113			18,895			19,439			19,071			19,742
FTE net interest income		19,459			19,261			19,834			19,486			20,079
Provision for loan losses		1,200			550			800			450			1,250
Non-interest income		5,261			7,917			4,896			4,988			5,004
Non-interest expense		17,123			17,702			18,427			18,481			18,267
Earnings before income taxes		6,051			8,560			5,108			5,128			5,229
Income tax expense		1,935			1,702			1,563			1,588			1,566
Net earnings		4,116			6,858			3,545			3,540			3,663
Dividends on preferred stock		170			180			180			468			392
Net earnings available to common shareholders	$	3,946		$	6,678		$	3,365		$	3,072		$	3,271
PER COMMON SHARE DATA
Basic earnings per share	$	0.35		$	0.59		$	0.30		$	0.27		$	0.29
Diluted earnings per share		0.34			0.57			0.29			0.27			0.29
Diluted earnings per share, operating (Non-GAAP)(*)		0.35			0.33			0.29			0.27			0.29
Quarterly dividends per share		0.09			0.08			0.08			0.08			0.08
Book value at end of period		14.25			13.92			13.21			13.12			12.92
Tangible book value at period end (Non-GAAP)(*)		9.86			9.51			8.76			8.61			8.39
Market price at end of period		19.89			16.83			17.86			15.50			15.53
Shares outstanding at period end		11,296,147			11,281,647			11,256,712			11,253,216			11,253,216
Weighted average shares outstanding
Basic		11,288,045			11,258,374			11,255,670			11,253,216			11,238,945
Diluted		11,922,525			11,878,660			11,886,433			11,868,851			11,838,862
AVERAGE BALANCE SHEET DATA
Total assets	$	1,887,726		$	1,859,212		$	1,862,962		$	1,863,090		$	1,850,483
Loans and leases		1,205,930			1,147,010			1,141,829			1,123,086			1,080,295
Total deposits		1,532,910			1,527,353			1,515,673			1,521,146			1,538,320
Total common equity		159,766			153,012			149,489			146,182			150,287
Total tangible common equity (Non-GAAP)(*)		110,075			103,036			98,941			95,363			98,996
Total equity		201,257			194,980			191,486			188,179			192,284
SELECTED RATIOS
Annualized return on average assets, operating (Non-GAAP)(*)		0.85	%		0.84	%		0.72	%		0.65	%		0.71	%
Annualized return on average common equity, operating (Non-GAAP)(*)		10.08	%		10.26	%		8.93	%		8.34	%		8.73	%
Annualized return on average tangible common equity, operating (Non-GAAP)(*)		14.63	%		15.24	%		13.49	%		12.78	%		13.25	%
Average loans to average deposits		78.67	%		75.10	%		75.33	%		73.83	%		70.23	%
Taxable-equivalent net interest margin		4.58	%		4.66	%		4.69	%		4.60	%		4.87	%
Tier 1 leverage capital ratio		9.81	%		9.71	%		9.35	%		9.17	%		9.14	%
CREDIT QUALITY
Allowance for loan losses (ALLL) as a % of total loans		0.74	%		0.74	%		0.77	%		0.76	%		0.76	%
Nonperforming assets to tangible equity + ALLL		8.34	%		8.16	%		8.02	%		8.94	%		9.51	%
Nonperforming assets to total loans, other real estate
owned and other repossessed assets		1.10	%		1.08	%		1.05	%		1.15	%		1.23	%
Annualized QTD net charge-offs to total loans		0.29	%		0.19	%		0.24	%		0.11	%		0.06	%
(*) See reconciliation of Non-GAAP financial measures on page 13.

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MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands)
BALANCE SHEET	June 30,			March 31,			December 31,			September 30,			June 30,
	2014			2014			2013			2013			2013
Assets
Cash and cash equivalents	$	63,935		$	64,503		$	59,731		$	43,434		$	59,578
Securities available-for-sale		301,028			331,488			341,665			358,675			367,299
Securities held-to-maturity		148,927			152,162			155,523			159,141			163,610
Total investment securities		449,955			483,650			497,188			517,816			530,909
Other investments		12,090			11,530			11,526			10,951			10,951
Total loans		1,224,182			1,184,189			1,137,554			1,145,023			1,118,572
Allowance for loan losses		(9,075	)		(8,765	)		(8,779	)		(8,667	)		(8,531	)
Loans, net		1,215,107			1,175,424			1,128,775			1,136,356			1,110,041
Premises and equipment		71,787			72,500			72,343			70,147			67,881
Goodwill and other intangibles		49,559			49,835			50,112			50,703			50,980
Other assets		33,845			31,483			31,485			33,400			33,436
Total assets	$	1,896,278		$	1,888,925		$	1,851,160		$	1,862,807		$	1,863,776
Liabilities and Shareholders' Equity
Non-interest bearing deposits	$	389,734		$	379,576		$	383,257		$	380,048		$	395,341
Interest-bearing deposits		1,135,688			1,168,354			1,135,546			1,126,078			1,140,453
Total deposits		1,525,422			1,547,930			1,518,803			1,506,126			1,535,794
Securities sold under agreements to repurchase and other short term borrowings		67,574			51,995			53,916			77,809			51,710
Short-term FHLB advances		35,000			25,000			25,000			25,000			25,000
Other borrowings		26,990			27,347			27,703			28,059			28,416
Junior subordinated debentures		29,384			29,384			29,384			29,384			29,384
Other liabilities		9,492			8,632			5,605			6,800			6,039
Total liabilities		1,693,862			1,690,288			1,660,411			1,673,178			1,676,343
Total shareholders' equity		202,416			198,637			190,749			189,629			187,433
Total liabilities and shareholders' equity	$	1,896,278		$	1,888,925		$	1,851,160		$	1,862,807		$	1,863,776

-9-

MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands except per share data)
EARNINGS STATEMENT	Three Months Ended
	6/30/2014			3/31/2014			12/31/2013			9/30/2013			6/30/2013
Interest income:
Loans, including fees	$	17,183		$	16,395		$	16,727		$	16,707		$	16,370
Investment securities		2,725			2,829			2,876			2,956			3,063
Accretion of purchase accounting adjustments		586			1,088			1,323			945			1,827
Other interest income		101			87			88			96			96
Total interest income		20,595			20,399			21,014			20,704			21,356
Interest expense:
Deposits		926			950			1,017			1,114			1,166
Borrowings		395			377			411			414			380
Junior subordinated debentures		320			347			339			335			336
Accretion of purchase accounting adjustments		(159	)		(170	)		(192	)		(230	)		(268	)
Total interest expense		1,482			1,504			1,575			1,633			1,614
Net interest income		19,113			18,895			19,439			19,071			19,742
Provision for loan losses		1,200			550			800			450			1,250
Net interest income after provision for loan losses		17,913			18,345			18,639			18,621			18,492
Noninterest income:
Service charges on deposit accounts		2,448			2,380			2,431			2,352			2,271
ATM and debit card income		1,853			1,714			1,687			1,719			1,638
Gain on securities, net		128			-			5			25			-
Mortgage lending		49			49			82			109			138
Executive officer life insurance proceeds (non-operating)(*)		-			3,000			-			-			-
Other charges and fees		783			774			691			783			957
Total non-interest income		5,261			7,917			4,896			4,988			5,004
Noninterest expense:
Salaries and employee benefits		8,488			8,674			8,781			8,640			8,369
Occupancy expense		3,689			3,791			3,916			3,874			3,725
ATM and debit card		707			690			707			661			597
Legal and professional fees		326			288			506			303			535
FDIC premiums		251			262			282			265			244
Marketing		366			303			545			739			521
Corporate development		331			366			347			349			453
Data processing		483			492			473			482			409
Printing and supplies		275			280			304			321			430
Expenses on ORE and other assets repossessed		172			228			201			288			523
Amortization of core deposit intangibles		276			277			276			277			276
Efficiency consultant expenses (non-operating)(*)		107			53			-			-			-
Expenses related to death of executive officer (non-operating)(*)		-			189			-			-			-
Other non-interest expense		1,652			1,809			2,089			2,282			2,185
Total non-interest expense		17,123			17,702			18,427			18,481			18,267
Earnings before income taxes		6,051			8,560			5,108			5,128			5,229
Income tax expense		1,935			1,702			1,563			1,588			1,566
Net earnings		4,116			6,858			3,545			3,540			3,663
Dividends on preferred stock		170			180			180			468			392
Net earnings available to common shareholders	$	3,946		$	6,678		$	3,365		$	3,072		$	3,271
Earnings per common share, diluted	$	0.34		$	0.57		$	0.29		$	0.27		$	0.29
Operating earnings per common share, diluted (Non-GAAP)(*)	$	0.35		$	0.33		$	0.29		$	0.27		$	0.29
(*) See reconciliation of Non-GAAP financial measures on page 13.

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MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands)
COMPOSITION OF LOANS	June 30,			Percent			March 31,			December 31,			September 30,			June 30,			Percent
	2014			of Total			2014			2013			2013			2013			of Total
Commercial, financial, and
agricultural	$	454,310			37.11	%	$	435,523		$	403,976		$	423,073		$	391,241			34.98	%
Lease financing receivable		4,750			0.39	%		5,102			5,542			5,340			5,656			0.51	%
Real estate - construction		86,238			7.04	%		78,988			82,691			76,213			82,851			7.41	%
Real estate - commercial		413,565			33.78	%		408,546			397,135			401,080			404,543			36.17	%
Real estate - residential		153,082			12.50	%		150,551			146,841			142,431			141,689			12.67	%
Installment loans to individuals		108,581			8.87	%		101,869			97,459			94,722			90,571			8.10	%
Other		3,656			0.30	%		3,610			3,910			2,164			2,021			0.18	%
Total loans	$	1,224,182					$	1,184,189		$	1,137,554		$	1,145,023		$	1,118,572
COMPOSITION OF DEPOSITS
	June 30,			Percent			March 31,			December 31,			September 30,			June 30,			Percent
	2014			of Total			2014			2013			2013			2013			of Total
Noninterest bearing	$	389,734			25.55	%	$	379,576		$	383,257		$	380,048		$	395,341			25.74	%
NOW & Other		443,287			29.06	%		456,127			429,279			412,873			431,596			28.10	%
Money Market/Savings		470,731			30.86	%		482,143			465,748			463,621			453,729			29.54	%
Time Deposits of less than $100,000		104,423			6.85	%		108,306			112,782			116,118			119,299			7.77	%
Time Deposits of $100,000 or more		117,247			7.69	%		121,778			127,737			133,466			135,829			8.84	%
Total deposits	$	1,525,422					$	1,547,930		$	1,518,803		$	1,506,126		$	1,535,794
ASSET QUALITY DATA
	June 30,						March 31,			December 31,			September 30,			June 30,
	2014						2014			2013			2013			2013
Nonaccrual loans	$	6,913					$	6,025		$	5,099		$	5,760		$	6,388
Loans past due 90 days and over		203						251			178			744			117
Total nonperforming loans		7,116						6,276			5,277			6,504			6,505
Other real estate		6,314						6,525			6,687			6,672			6,900
Other repossessed assets		81						56			20			18			-
Total nonperforming assets	$	13,511					$	12,857		$	11,984		$	13,194		$	13,405
Troubled debt restructurings	$	417					$	1,579		$	412		$	419		$	405
Nonperforming assets to total assets		0.71	%					0.68	%		0.65	%		0.71	%		0.72	%
Nonperforming assets to total loans +
ORE + other repossessed assets		1.10	%					1.08	%		1.05	%		1.15	%		1.19	%
ALLL to nonperforming loans		127.53	%					139.66	%		166.36	%		133.26	%		131.15	%
ALLL to total loans		0.74	%					0.74	%		0.77	%		0.76	%		0.76	%
Quarter-to-date charge-offs	$	990					$	688		$	740		$	375		$	267
Quarter-to-date recoveries		100						124			53			61			91
Quarter-to-date net charge-offs	$	890					$	564		$	687		$	314		$	176
Annualized QTD net charge-offs to
total loans		0.29	%					0.19	%		0.24	%		0.11	%		0.06	%

-11-

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
	June 30, 2014							March 31, 2014							December 31, 2013							September 30, 2013							June 30, 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	$	379,124	$	2,064		2.18	%	$	397,642	$	2,136		2.15	%	$	409,561	$	2,128		2.08	%	$	418,964	$	2,171		2.07	%	$	434,730	$	2,251		2.07	%
Tax-exempt securities		87,964		1,007		4.58	%		91,792		1,059		4.61	%		98,648		1,143		4.63	%		101,226		1,200		4.74	%		104,747		1,149		4.39	%
Total investment
securities		467,088		3,071		2.63	%		489,434		3,195		2.61	%		508,209		3,271		2.57	%		520,190		3,371		2.59	%		539,477		3,400		2.52	%
Federal funds sold		2,260		1		0.18	%		2,921		1		0.14	%		2,535		1		0.15	%		2,180		1		0.18	%		1,593		1		0.25	%
Time and interest
bearing deposits in
other banks		16,789		11		0.26	%		25,891		16		0.25	%		14,546		9		0.24	%		22,519		15		0.26	%		23,346		17		0.29	%
Other investments		11,679		89		3.05	%		11,527		70		2.43	%		11,263		78		2.77	%		10,948		80		2.92	%		10,056		78		3.10	%
Loans		1,205,930		17,769		5.91	%		1,147,010		17,483		6.18	%		1,141,829		18,050		6.27	%		1,123,086		17,652		6.24	%		1,080,295		18,197		6.76	%
Total interest
earning assets		1,703,746		20,941		4.93	%		1,676,783		20,765		5.02	%		1,678,382		21,409		5.06	%		1,678,923		21,119		4.99	%		1,654,767		21,693		5.26	%
Non-interest earning
assets		183,980							182,429							184,580							184,167							195,716
Total assets	$	1,887,726						$	1,859,212						$	1,862,962						$	1,863,090						$	1,850,483
Interest-bearing
liabilities:
Deposits	$	1,156,638	$	858		0.30	%	$	1,155,011	$	871		0.31	%	$	1,126,742	$	917		0.32	%	$	1,133,126	$	976		0.34	%	$	1,149,285	$	990		0.35	%
Repurchase
agreements		62,322		199		1.28	%		48,413		180		1.51	%		67,022		207		1.23	%		64,274		204		1.26	%		47,667		182		1.53	%
Federal funds
purchased		679		1		0.58	%		168		-		0.00	%		747		1		0.52	%		354		-		0.00	%		1,466		3		0.81	%
Short-term
borrowings		25,110		9		0.14	%		25,000		10		0.16	%		23,913		9		0.15	%		25,000		11		0.17	%		1,374		-		0.00	%
Notes payable		27,218		95		1.38	%		27,577		96		1.39	%		27,922		101		1.42	%		28,301		107		1.48	%		28,885		103		1.41	%
Junior subordinated
debentures		29,384		320		4.31	%		29,384		347		4.72	%		29,384		339		4.51	%		29,384		335		4.46	%		29,384		336		4.52	%
Total interest
bearing liabilities		1,301,351		1,482		0.46	%		1,285,553		1,504		0.47	%		1,275,730		1,575		0.49	%		1,280,439		1,633		0.51	%		1,258,061		1,614		0.51	%
Non-interest bearing
liabilities		385,118							378,679							395,746							394,472							400,138
Shareholders' equity		201,257							194,980							191,486							188,179							192,284
Total liabilities and
shareholders'
equity	$	1,887,726						$	1,859,212						$	1,862,962						$	1,863,090						$	1,850,483
Net interest income (TE) and spread			$	19,459		4.47	%			$	19,261		4.55	%			$	19,834		4.57	%			$	19,486		4.48	%			$	20,079		4.75	%
Net interest margin						4.58	%						4.66	%						4.69	%						4.60	%						4.87	%
Core net interest margin (Non-GAAP)(*)						4.39	%						4.33	%						4.31	%						4.30	%						4.33	%
(*) See reconciliation of Non-GAAP financial measures on page 13.

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MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures (unaudited)
(in thousands except per share data)
		Three Months Ended
		June 30,			March 31,			December 31,			September 30,			June 30,
Per Common Share Data		2014			2014			2013			2013			2013
Book value per common share		$	14.25		$	13.92		$	13.21		$	13.12		$	12.92
Effect of intangible assets per share			4.39			4.41			4.45			4.51			4.53
Tangible book value per common share		$	9.86		$	9.51		$	8.76		$	8.61		$	8.39
Diluted earnings per share		$	0.34		$	0.57		$	0.29		$	0.27		$	0.29
Effect of efficiency consultant expenses, after-tax			0.01			-			-			-			-
Executive officer life insurance proceeds, net of related expenses, after-tax			-			(0.24	)		-			-			-
Diluted earnings per share, operating		$	0.35		$	0.33		$	0.29		$	0.27		$	0.29
		Three Months Ended
		June 30,			March 31,			December 31,			September 30,			June 30,
		2014			2014			2013			2013			2013
Average Balance Sheet Data
Total average assets	A	$	1,887,726		$	1,859,212		$	1,862,962		$	1,863,090		$	1,850,483
Total equity		$	201,257		$	194,980		$	191,486		$	188,179		$	192,284
Less preferred equity			41,491			41,968			41,997			41,997			41,997
Total common equity	B	$	159,766		$	153,012		$	149,489		$	146,182		$	150,287
Less intangible assets			49,691			49,976			50,548			50,819			51,291
Tangible common equity	C	$	110,075		$	103,036		$	98,941		$	95,363		$	98,996
		Three Months Ended
		June 30,			March 31,			December 31,			September 30,			June 30,
Core Net Interest Margin		2014			2014			2013			2013			2013
Net interest income (TE)		$	19,459		$	19,261		$	19,834		$	19,486		$	20,079
Less purchase accounting adjustments			(745	)		(1,258	)		(1,515	)		(1,175	)		(2,095	)
Net interest income, net of purchase accounting adjustments	D	$	18,714		$	18,003		$	18,319		$	18,311		$	17,984
Total average earnings assets		$	1,703,746		$	1,676,783		$	1,678,382		$	1,678,923		$	1,654,767
Add average balance of loan valuation discount			7,013			7,915			9,347			10,323			12,019
Average earnings assets, excluding loan valuation discount	E	$	1,710,759		$	1,684,698		$	1,687,729		$	1,689,246		$	1,666,786
Core net interest margin	D/E		4.39	%		4.33	%		4.31	%		4.30	%		4.33	%
		Three Months Ended
		June 30,			March 31,			December 31,			September 30,			June 30,
Return Ratios		2014			2014			2013			2013			2013
Net earnings available to common shareholders		$	3,946		$	6,678		$	3,365		$	3,072		$	3,271
Efficiency consultant expenses, after-tax			70			34			-			-			-
Executive officer life insurance proceeds, net of related expenses, after-tax			-			(2,840	)		-			-			-
Net earnings available to common shareholders, operating	F	$	4,016		$	3,872		$	3,365		$	3,072		$	3,271
Annualized return on average assets, operating	F/A		0.85	%		0.84	%		0.72	%		0.65	%		0.71	%
Annualized return on average common equity, operating	F/B		10.08	%		10.26	%		8.93	%		8.34	%		8.73	%
Annualized return on average tangible common equity, operating	F/C		14.63	%		15.24	%		13.49	%		12.78	%		13.25	%
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.

-13-