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)			January 27, 2015
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 January 27, 2015, MidSouth Bancorp, Inc. (the “Company”) issued a press release regarding the Company’s earnings for the quarter ended December 31, 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 January 27, 2015, 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 April 1, 2015 to shareholders of record as of the close of business on March 13, 2015.  The Board also announced a quarterly cash dividend of 1.00% per preferred share on its 4.00% Non-Cumulative Perpetual Convertible Preferred Stock, Series C was declared payable on April 15, 2015 to shareholders of record as of the close of business on April 1, 2015.

Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(d)           Exhibits

99.1 Press Release dated January 27, 2015.

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:	January 27, 2015

EX-99.1

Investor Contacts:  Rusty Cloutier

   President & CEO or

   Jim McLemore, CFA

   Sr. EVP & CFO

   337.237.8343

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

Quarterly Highlights

·   Diluted operating EPS $0.31 versus $0.29 for 4Q 2013

·   Operating noninterest expenses $17.1 million versus $18.4 million for 4Q2013

·   Sequential period end loan growth of $36.1 million or 11.6% annualized

·   Core FTE NIM on linked quarter improved to 4.44% versus 4.42%

·   Special loan loss reserve established for potential energy loan losses

LAFAYETTE, LA., January 27, 2015/PRNewswire-FirstCall/ -- MidSouth Bancorp, Inc. (“MidSouth”) (NYSE:MSL) today reported quarterly net earnings available to common shareholders of $3.5 million for the fourth quarter of 2014, compared to net earnings available to common shareholders of $3.4 million reported for the fourth quarter of 2013 and $4.3 million in net earnings available to common shareholders for the third quarter of 2014.  Diluted earnings for the fourth quarter of 2014 were $0.30 per common share, compared to $0.29 per common share reported for the fourth quarter of 2013 and $0.37 per common share reported for the third quarter of 2014.  Third quarter 2014 net earnings included $700,000 of an after-tax gain on the sale of a commercial property held as other real estate (“ORE”), an after-tax charge of $168,000 on the redemption of the Company’s Statutory Trust 1 and Capital Securities (TRUPS), and an after-tax charge of $256,000 for losses on disposal of fixed assets incurred in the quarter.  Net earnings for the fourth and third quarters of 2014 also included after-tax charges for efficiency consultant expenses of $101,000 and $130,000, respectively.  Excluding these non-operating income and expenses, operating earnings per share for the fourth and third quarters of 2014 was $0.31 and $0.36, respectively.  In addition, a special loan loss reserve for potential yet unidentified energy loan losses in the amount of $650,000, or approximately $0.04 per share after-tax, was established in the fourth quarter of 2014.

C. R. Cloutier, President and CEO, commenting on fourth quarter earnings remarked, “Excluding an increased provision for loan losses, the fourth quarter represents a continued improvement in the operating performance of the company.  On a sequential basis, we saw period-end annualized loan growth of over 11%, core net interest margin improvement and flat operating expenses.

“Obviously we are closely monitoring the effects of the recent sharp decline in oil prices.   We continue to communicate with our customers who provide valuable insight on the present energy cycle.  Our loan review function continues to stress test our oil and gas loan portfolio and review for potential downgrades.  We have not yet identified any specific loan impairments resulting from the recent downturn in oil prices.  However, in light of recent developments, we established this quarter a special reserve for potential future energy loan losses that have not yet been identified.  The amount of the special reserve was $650,000 or approximately 25 basis points of energy related loans.  We believe establishing this reserve is a prudent action at this time.

“MidSouth Bank began as an energy lender during the oil downturn of the 80’s and we have a strong thirty year track record of lending to this industry. We have seen many ups and downs in the oil and gas industry over the years, and we don’t bet on energy prices in our lending practices.”

-1-

Balance Sheet

Consolidated assets remained constant at $1.9 billion for the quarters ended December 31, 2014 and September 30, 2014.  Our stable core deposit base, which excludes time deposits, totaled $1.3 billion at December 31, 2014 and September 30, 2014 and accounted for 84.1% of deposits compared to 85.7% of deposits, respectively.  Net loans totaled $1.3 billion at December 31, 2014, compared to $1.2 billion at September 30, 2014 and $1.1 billion at December 31, 2013.  Total loans grew $36.1 million, or 2.9% for the quarter and $146.9 million for the year ended December 31, 2014.  The majority of the loan growth during the fourth quarter was in the CRE and C&I portfolios, which was offset by a decline in the construction real estate loans.

MidSouth’s Tier 1 leverage capital ratio was 9.52% at December 31, 2014 compared to 9.56% at September 30, 2014.  Tier 1 risk-based capital and total risk-based capital ratios were 12.90% and 13.73% at December 31, 2014, compared to 12.93% and 13.63% at September 30, 2014, respectively.  Tier 1 common equity to total risk-weighted assets at December 31, 2014 was 8.36%.  Tangible common equity totaled $118.6 million at December 31, 2014, compared to $115.3 million at September 30, 2014.  Tangible book value per share at December 31, 2014 was $10.46 versus $10.17 at September 30, 2014.

Asset Quality

Nonperforming assets totaled $15.1 million at December 31, 2014, an increase of $2.6 million compared to $12.5 million reported at September 30, 2014.  The increase resulted primarily from the addition of a commercial real estate (CRE) loan unrelated to energy that was placed on nonaccrual status during the quarter.  The increase in nonaccrual loans in the fourth quarter of 2014 resulted in a lower allowance coverage for nonperforming loans of 103.10% at December 31, 2014, compared to 121.25% at September 30, 2014.  The ALLL/total loans ratio was 0.87% at December 31, 2014 and 0.75% at September 30, 2014.  Including valuation accounting adjustments on acquired loans, the total valuation accounting adjustment plus ALLL was 1.29% of loans at December 31, 2014.  The ratio of annualized net charge-offs to total loans was 0.28% for the three months ended December 31, 2014 compared to 0.26% for the three months ended September 30, 2014.

Total nonperforming assets to total loans plus ORE and other assets repossessed was 1.17% at December 31, 2014 compared to 0.99% at September 30, 2014.  Loans classified as troubled debt restructurings (“TDRs”) totaled $410,000 at December 31, 2014 compared to $416,000 at September 30, 2014.  Classified assets, including ORE, decreased $0.8 million, or 2.3%, to $33.6 million at December 31, 2014 compared to $34.4 million at September 30, 2014.

-2-

Fourth Quarter 2014 vs. Fourth Quarter 2013 Earnings Comparison

Fourth quarter 2014 net earnings available to common shareholders totaled $3.5 million compared to $3.4 million for the fourth quarter of 2013.  Revenues from consolidated operations increased $875,000 in quarterly comparison.  Net interest income increased $721,000 in quarterly comparison, as decreases of $566,000 in loan valuation income and $310,000 in interest income on investment securities were offset primarily by a $1.3 million increase in interest income earned on a higher volume of loans and a $259,000 decrease in interest expense on junior subordinated debentures.  Noninterest income increased $154,000 in quarterly comparison, from $4.9 million for the three months ended December 31, 2013 to $5.1 million for the three months ended December 31, 2014.  The increase in noninterest income resulted primarily from a $147,000 increase in ATM/debit card income.

Excluding non-operating expenses of $156,000, fourth quarter 2014 noninterest expenses decreased $1.3 million compared to fourth quarter 2013 and primarily consisted of decreases of $522,000 in salaries and benefits costs, $166,000 in occupancy expenses, $176,000 in legal and professional fees, and $119,000 in courier expense, combined with smaller decreases in several other noninterest expense categories. The provision for loan losses increased $1.9 million in quarterly comparison, primarily due to establishing the aforementioned special reserve in the amount of $650,000 and an impairment of approximately $575,000 related to a CRE loan unrelated to energy being placed on a non-accrual status.

Dividends paid on the Series B Preferred Stock issued to the Treasury as a result of our participation in the Small Business Lending Fund (“SBLF”) totaled $80,000 for the fourth quarter of 2014 based on a dividend rate of 1.00%.  The dividend rate is set at 1.00% through February 25, 2016.  The Series C Preferred Stock issued with the December 28, 2012 acquisition of PSB Financial Corporation (“PSB”) paid dividends totaling $94,000 for the three months ended December 31, 2014.

Fully taxable-equivalent (“FTE”) net interest income totaled $20.5 million and $19.8 million for the quarters ended December 31, 2014 and 2013, respectively.  The FTE net interest income increased $662,000 in prior year quarterly comparison primarily due to a $752,000 increase in interest income on loans despite a $566,000 reduction in purchase accounting adjustments on acquired loans.  The increased interest income on loans resulted from a $122.2 million increase in the average volume of loans in quarterly comparison. The average yield on loans decreased 37 basis points, from 6.27% to 5.90%.  The purchase accounting adjustments added 26 basis points to the average yield on loans for the fourth quarter of 2014 and 51 basis points to the average yield on loans for the fourth quarter of 2013.  Net of the impact of the purchase accounting adjustments, average loan yields declined 12 basis points in prior year quarterly comparison, from 5.76% to 5.64%.  Loan yields have declined primarily as the result of a sustained low interest rate environment.

Investment securities totaled $418.2 million, or 21.6% of total assets at December 31, 2014, versus $497.2 million, or 26.9% of total assets at December 31, 2013.  The investment portfolio had an effective duration of 3.2 years and a net unrealized gain of $4.4 million at December 31, 2014.  The average volume of investment securities decreased $85.1 million in prior year quarterly comparison.  The average tax equivalent yield on investment securities increased 17 basis points, from 2.57% to 2.74%.  The $85.1 million decrease in the average volume of investment securities was used to fund loan growth during the same period.

-3-

The average yield on all earning assets decreased 11 basis points in prior year quarterly comparison, from 5.06% for the fourth quarter of 2013 to 4.95% for the fourth quarter of 2014.  Net of the impact of purchase accounting adjustments, the average yield on total earning assets increased 5 basis points, from 4.72% to 4.77% for the three month periods ended December 31, 2013 and 2014, respectively, due to a favorable shift in earning assets from investment securities to loans.

The impact to interest expense of a $29.5 million increase in the average volume of interest- bearing liabilities was offset by a 9 basis point decrease in the average rate paid on interest- bearing liabilities, from 0.49% at December 31, 2013 to 0.40% at December 31, 2014.  Net of purchase accounting adjustments on acquired certificates of deposit and FHLB borrowings, the average rate paid on interest-bearing liabilities was 0.55% for the fourth quarter of 2013 and declined to 0.44% for the fourth quarter of 2014.

As a result of these changes in volume and yield on earning assets and interest bearing liabilities, the FTE net interest margin decreased 4 basis points, from 4.69% for the fourth quarter of 2013 to 4.65% for the fourth quarter of 2014.  Net of purchase accounting adjustments on loans, deposits and FHLB borrowings, the FTE margin increased 13 basis points, from 4.31% for the fourth quarter of 2013 to 4.44% for the fourth quarter of 2014.

Fourth Quarter 2014 vs. Third Quarter 2014 Earnings Comparison

In sequential-quarter comparison, net earnings available to common shareholders decreased $808,000 primarily due to a $1.5 million increase in the provision for loan losses.  The increase in provision for loan losses in the fourth quarter was primarily due to the aforementioned special reserve in the amount of $650,000 and an impairment in the amount of approximately $575,000 on a CRE loan unrelated to energy being placed on non-accrual.   Additionally, the decrease in net earnings available to common shareholders resulted from a $1.1 million decrease in non-interest income.  Excluding the $1.1 million gain on the sale of a commercial property held as ORE included in third quarter 2014, noninterest income decreased $67,000 in sequential-quarter comparison as a $161,000 decrease in service charges on deposit accounts was partially offset by a $96,000 increase in the cash surrender value of life insurance.

Third quarter noninterest expenses included a charge of $258,000 on the redemption of the Company’s Statutory Trust 1 and Capital Securities (TRUPS) and a charge of $394,000 for losses on disposal of fixed assets incurred in the quarter.  Additionally, noninterest expenses in the fourth and third quarters of 2014 included efficiency consultant expenses of $156,000 and $200,000, respectively.  Excluding these non-operating expenses, noninterest expense increased $166,000 in sequential-quarter comparison and consisted primarily of an increase of $147,000 in marketing expenses.

-4-

FTE net interest income increased $640,000 in sequential-quarter comparison primarily due to an increase of $31.8 million in the average volume of loans.  The average yield on loans increased 2 basis points, from 5.88% for the third quarter of 2014 to 5.90% for the fourth quarter of 2014.  Net of purchase accounting adjustments, the loan yield declined 2 basis points, from 5.66% to 5.64% during the same period.  The average yield on total earning assets decreased 1 basis point for the same period, from 4.96% to 4.95%, respectively.  Average interest bearing liabilities increased $20.7 million, as a $26.2 million increase in the average volume of interest bearing deposits was partially offset by a $4.1 million average decrease in junior subordinated debentures.  As a result of these changes in volume and yield on earning assets and interest bearing liabilities, the FTE net interest margin increased 4 basis points, from 4.61% to 4.65%.  Net of purchase accounting adjustments, the FTE net interest margin increased 2 basis points, from 4.42% for the third quarter of 2014 to 4.44% for the fourth quarter of 2014.

Year-Over-Year Earnings Comparison

In year-over-year comparison, net earnings available to common shareholders totaled $18.4 million at December 31, 2014, an increase of $5.6 million compared to $12.8 million at December 31, 2013.  The $5.6 million included $3.0 million of executive life insurance proceeds and a $1.1 million gain on sale of ORE recorded in noninterest income for the year ended December 31, 2014.  Excluding these non-operating income items and non-operating expenses of $394,000 in losses on disposal of fixed assets, a $258,000 loss on redemption of Trust Preferred Securities, $516,000 in efficiency consultant expenses, and $189,000 of expenses related to the loss of an executive officer, operating earnings totaled $15.6 million at December 31, 2014.  Net of $214,000 of net merger and conversion related expenses associated with the PSB acquisition in the first quarter of 2013, operating earnings totaled $13.0 million at December 31, 2013.  The net increase of $2.6 million in operating earnings in year-over-year comparison resulted primarily from a $3.7 million decrease in noninterest expense and a $1.0 million increase in noninterest income.  Net interest income also increased $1.0 million which included a $732,000 decrease in interest expense.  The increase in revenues was partially offset by a $2.6 million increase in the provision for loan losses and a $1.2 million increase in income tax expense.

Excluding non-operating income, increases in noninterest income consisted primarily of $555,000 in service charges on deposit accounts and $809,000 in ATM and debit card income.  Excluding the non-operating expenses in 2014 and 2013, decreases in noninterest expense primarily included $666,000 in marketing expenses, $474,000 in salaries and benefits costs, $440,000 in legal and professional fees, $510,000 in expenses on ORE and other repossessed assets, $397,000 in courier expense and $316,000 in printing and supplies.  The decreased expenses were partially offset by a $510,000 increase in ATM/debit card expense.

A reduction in the dividend rate paid on the Series B preferred stock issued in connection with SBLF resulted in a $634,000 decrease in dividends on preferred stock in year-over-year comparison.

In year-to-date comparison, FTE net interest income increased $658,000 primarily due to a $732,000 decrease in interest expense.  Interest income remained relatively flat in year-over-year comparison, as a $1.1 million decrease in interest income on investments was offset by a $1.3 million increase in interest income on loans.  Interest income on loans increased $1.3 million despite a $2.9 million reduction in purchase accounting adjustments on acquired loans.  The average volume of loans increased $115.1 million in year-over-year comparison, and the average yield on loans decreased 51 basis points, from 6.47% to 5.96%.  The average yield on earning assets decreased in year-over-year comparison, from 5.10% at December 31, 2013 to 4.97% at December 31, 2014.  The purchase accounting adjustments added 60 basis points to the average yield on loans for the year ended December 31, 2013 and 28 basis points for the year ended December 31, 2014.  Net of purchase accounting adjustments, the average yield on earning assets increased 6 basis points, from 4.71% at December 31, 2013 to 4.77% at December 31, 2014.

Interest expense decreased $732,000 in year-over-year comparison primarily due to a 7 basis point decrease in the average rate paid on interest-bearing liabilities, from 0.52% at December 31, 2013 to 0.45% at December 31, 2014.  Net of purchase accounting adjustments, the average rate paid on interest-bearing liabilities decreased 10 basis points, from 0.60% at December 31, 2013 to 0.50% at December 31, 2014.  The FTE net interest margin decreased 8 basis points, from 4.71% for the year ended December 31, 2013 to 4.63% for the year ended December 31, 2014.  Net of purchase accounting adjustments, the FTE net interest margin increased 13 basis points, from 4.26% to 4.39% for the years ended December 31, 2013 and 2014, respectively, due to a favorable shift in earning assets from investment securities to loans.

-5-

Dividends

MidSouth’s Board of Directors announced a cash dividend was declared in the amount of $0.09 per share to be paid on its common stock on April 1, 2015 to shareholders of record as of the close of business on March 13, 2015.  Additionally, a quarterly cash dividend of 1.00% per preferred share on its 4.00% Non-Cumulative Perpetual Convertible Preferred Stock, Series C was declared payable on April 15, 2015 to shareholders of record as of the close of business on April 1, 2015.  MidSouth’s Series C Preferred Stock is quoted on the OTC Bulletin Board (“OTCBB”) under the ticker symbol MSLXP.

About MidSouth Bancorp, Inc.

MidSouth Bancorp, Inc. is a financial holding company headquartered in Lafayette, Louisiana, with assets of $1.9 billion as of December 31, 2014. MidSouth Bancorp, Inc. trades on the NYSE under the symbol “MSL.” MidSouth’s Series C Preferred Stock is quoted on the OTC Bulletin Board ("OTCBB") under the ticker symbol MSLXP.  Through its wholly owned subsidiary, MidSouth Bank, N.A., MidSouth offers a full range of banking services to commercial and retail customers in Louisiana and Texas. MidSouth Bank currently has 58 locations in Louisiana and Texas and is connected to a worldwide ATM network that provides customers with access to more than 55,000 surcharge-free ATMs. Additional corporate information is available at MidSouthBank.com.

Forward-Looking Statements

Certain statements contained herein are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties.  These statements include, among others, the expected impacts of future expansion plans and future operating results.  Actual results may differ materially from the results anticipated in these forward-looking statements.  Factors that might cause such a difference include, among other matters, changes in interest rates and market prices that could affect the net interest margin, asset valuation, and expense levels; changes in local economic and business conditions, including, without limitation, changes related to the oil and gas industries, that could adversely affect customers and their ability to repay borrowings under agreed upon terms, adversely affect the value of the underlying collateral related to their borrowings, and reduce demand for loans; the timing and ability to reach any agreement to restructure nonaccrual loans;  increased competition for deposits and loans which could affect compositions, rates and terms; the timing and impact of future acquisitions, the success or failure of integrating operations, and the ability to capitalize on growth opportunities upon entering new markets; loss of critical personnel and the challenge of hiring qualified personnel at reasonable compensation levels; legislative and regulatory changes, including changes in banking, securities and tax laws and regulations and their application by our regulators, changes in the scope and cost of FDIC insurance and other coverage; and other factors discussed under the heading “Risk Factors” in MidSouth’s Annual Report on Form 10-K for the year ended December 31, 2013 filed with the SEC on March 14, 2014 and in its other filings with the SEC.  MidSouth does not undertake any obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information, future events or otherwise, except as required by law.

-6-

MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands except per share data)
	Quarter			Quarter			Quarter			Quarter			Quarter
	Ended			Ended			Ended			Ended			Ended
EARNINGS DATA	12/31/2014			9/30/2014			6/30/2014			3/31/2014			12/31/2013
Total interest income	$	21,477		$	21,016		$	20,595		$	20,399		$	21,014
Total interest expense		1,317			1,504			1,482			1,504			1,575
Net interest income		20,160			19,512			19,113			18,895			19,439
FTE net interest income		20,496			19,856			19,459			19,261			19,834
Provision for loan losses		2,700			1,175			1,200			550			800
Non-interest income		5,050			6,194			5,261			7,917			4,896
Non-interest expense		17,327			17,857			17,123			17,702			18,427
Earnings before income taxes		5,183			6,674			6,051			8,560			5,108
Income tax expense		1,519			2,202			1,935			1,702			1,563
Net earnings		3,664			4,472			4,116			6,858			3,545
Dividends on preferred stock		174			174			170			180			180
Net earnings available to common shareholders	$	3,490		$	4,298		$	3,946		$	6,678		$	3,365
PER COMMON SHARE DATA
Basic earnings per share	$	0.31		$	0.38		$	0.35		$	0.59		$	0.30
Diluted earnings per share		0.30			0.37			0.34			0.57			0.29
Diluted earnings per share, operating (Non-GAAP)(*)		0.31			0.36			0.35			0.33			0.29
Quarterly dividends per share		0.09			0.09			0.09			0.08			0.08
Book value at end of period		14.78			14.52			14.25			13.92			13.21
Tangible book value at period end (Non-GAAP)(*)		10.46			10.17			9.86			9.51			8.76
Market price at end of period		17.34			18.70			19.89			16.83			17.86
Shares outstanding at period end		11,340,735			11,336,594			11,296,147			11,281,647			11,256,712
Weighted average shares outstanding
Basic		11,314,690			11,313,879			11,288,045			11,258,374			11,255,670
Diluted		11,933,388			11,954,811			11,922,525			11,878,660			11,886,433
AVERAGE BALANCE SHEET DATA
Total assets	$	1,929,750		$	1,892,609		$	1,887,726		$	1,859,212		$	1,862,962
Loans and leases		1,264,011			1,232,196			1,205,930			1,147,010			1,141,829
Total deposits		1,563,006			1,525,059			1,532,910			1,527,353			1,515,673
Total common equity		167,430			163,855			159,766			153,012			149,489
Total tangible common equity (Non-GAAP)(*)		118,291			114,438			110,075			103,036			98,941
Total equity		208,816			205,291			201,257			194,980			191,486
SELECTED RATIOS
Annualized return on average assets, operating (Non-GAAP)(*)		0.74	%		0.87	%		0.85	%		0.84	%		0.72	%
Annualized return on average common equity, operating (Non-GAAP)(*)		8.51	%		10.05	%		10.08	%		10.26	%		8.93	%
Annualized return on average tangible common equity, operating (Non-GAAP)(*)		12.04	%		14.39	%		14.63	%		15.24	%		13.49	%
Average loans to average deposits		80.87	%		80.80	%		78.67	%		75.10	%		75.33	%
Taxable-equivalent net interest margin		4.65	%		4.61	%		4.58	%		4.66	%		4.69	%
Tier 1 leverage capital ratio		9.52	%		9.56	%		9.81	%		9.71	%		9.35	%
CREDIT QUALITY
Allowance for loan losses (ALLL) as a % of total loans		0.87	%		0.75	%		0.74	%		0.74	%		0.77	%
Nonperforming assets to tangible equity + ALLL		8.83	%		7.50	%		8.34	%		8.16	%		8.02	%
Nonperforming assets to total loans, other real estate
owned and other repossessed assets		1.17	%		0.99	%		1.10	%		1.08	%		1.05	%
Annualized QTD net charge-offs to total loans		0.28	%		0.26	%		0.29	%		0.19	%		0.24	%
(*) See reconciliation of Non-GAAP financial measures on page 6.

-7-

MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands)
BALANCE SHEET	December 31,			September 30,			June 30,			March 31,			December 31,
	2014			2014			2014			2014			2013
Assets
Cash and cash equivalents	$	86,872		$	54,215		$	63,935		$	64,503		$	59,731
Securities available-for-sale		276,984			288,397			301,028			331,488			341,665
Securities held-to-maturity		141,201			145,030			148,927			152,162			155,523
Total investment securities		418,185			433,427			449,955			483,650			497,188
Other investments		9,990			12,091			12,090			11,530			11,526
Total loans		1,284,431			1,248,373			1,224,182			1,184,189			1,137,554
Allowance for loan losses		(11,226	)		(9,425	)		(9,075	)		(8,765	)		(8,779	)
Loans, net		1,273,205			1,238,948			1,215,107			1,175,424			1,128,775
Premises and equipment		69,958			71,115			71,787			72,500			72,343
Goodwill and other intangibles		49,005			49,282			49,559			49,835			50,112
Other assets		29,525			32,682			33,845			31,483			31,485
Total assets	$	1,936,740		$	1,891,760		$	1,896,278		$	1,888,925		$	1,851,160
Liabilities and Shareholders' Equity
Non-interest bearing deposits	$	390,863		$	396,263		$	389,734		$	379,576		$	383,257
Interest-bearing deposits		1,194,371			1,124,581			1,135,688			1,168,354			1,135,546
Total deposits		1,585,234			1,520,844			1,525,422			1,547,930			1,518,803
Securities sold under agreements to
repurchase and other short term
borrowings		62,098			70,964			67,574			51,995			53,916
Short-term FHLB advances		25,000			35,000			35,000			25,000			25,000
Other borrowings		26,277			26,384			26,990			27,347			27,703
Junior subordinated debentures		22,167			22,167			29,384			29,384			29,384
Other liabilities		6,952			10,387			9,492			8,632			5,605
Total liabilities		1,727,728			1,685,746			1,693,862			1,690,288			1,660,411
Total shareholders' equity		209,012			206,014			202,416			198,637			190,749
Total liabilities and shareholders' equity	$	1,936,740		$	1,891,760		$	1,896,278		$	1,888,925		$	1,851,160

-8-

MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands except per share data)
EARNINGS STATEMENT	Three Months Ended
	12/31/2014			9/30/2014			6/30/2014			3/31/2014			12/31/2013
Interest income:
Loans, including fees	$	18,045		$	17,670		$	17,183		$	16,395		$	16,727
Investment securities		2,566			2,617			2,725			2,829			2,876
Accretion of purchase accounting adjustments		757			603			586			1,088			1,323
Other interest income		109			126			101			87			88
Total interest income		21,477			21,016			20,595			20,399			21,014
Interest expense:
Deposits		973			915			926			950			1,017
Borrowings		401			409			395			377			411
Junior subordinated debentures		80			327			320			347			339
Accretion of purchase accounting adjustments		(137	)		(147	)		(159	)		(170	)		(192	)
Total interest expense		1,317			1,504			1,482			1,504			1,575
Net interest income		20,160			19,512			19,113			18,895			19,439
Provision for loan losses		2,700			1,175			1,200			550			800
Net interest income after provision for loan losses		17,460			18,337			17,913			18,345			18,639
Noninterest income:
Service charges on deposit accounts		2,395			2,556			2,448			2,380			2,431
ATM and debit card income		1,834			1,808			1,853			1,714			1,687
Gain on securities, net		-			-			128			-			5
Gain on sale of ORE (non-operating)(*)		-			1,077			-			-			-
Mortgage lending		151			161			49			49			82
Executive officer life insurance proceeds (non-operating)(*)		-			-			-			3,000			-
Other charges and fees		670			592			783			774			691
Total non-interest income		5,050			6,194			5,261			7,917			4,896
Noninterest expense:
Salaries and employee benefits		8,259			8,287			8,488			8,674			8,781
Occupancy expense		3,750			3,834			3,689			3,791			3,916
ATM and debit card		699			793			707			690			707
Legal and professional fees		330			342			326			288			506
FDIC premiums		268			269			251			262			282
Marketing		543			396			366			303			545
Corporate development		381			342			331			366			347
Data processing		462			503			483			492			473
Printing and supplies		280			279			275			280			304
Expenses on ORE and other assets repossessed		169			122			172			228			201
Amortization of core deposit intangibles		276			277			276			277			276
Loss on disposal of fixed assets (non-operating)(*)		-			394			-			-			-
Loss on redemption of Trust Preferred Securities (non-operating)(*)		-			258			-			-			-
Efficiency consultant expenses (non-operating)(*)		156			200			107			53			-
Expenses related to death of executive officer (non-operating)(*)		-			-			-			189			-
Other non-interest expense		1,754			1,561			1,652			1,809			2,089
Total non-interest expense		17,327			17,857			17,123			17,702			18,427
Earnings before income taxes		5,183			6,674			6,051			8,560			5,108
Income tax expense		1,519			2,202			1,935			1,702			1,563
Net earnings		3,664			4,472			4,116			6,858			3,545
Dividends on preferred stock		174			174			170			180			180
Net earnings available to common shareholders	$	3,490		$	4,298		$	3,946		$	6,678		$	3,365
Earnings per common share, diluted	$	0.30		$	0.37		$	0.34		$	0.57		$	0.29
Operating earnings per common share, diluted (Non-GAAP)(*)	$	0.31		$	0.36		$	0.35		$	0.33		$	0.29
(*) See reconciliation of Non-GAAP financial measures on page 6.

-9-

MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands)
COMPOSITION OF LOANS	December 31,			Percent			September 30,			June 30,			March 31,			December 31,			Percent
	2014			of Total			2014			2014			2014			2013			of Total
Commercial, financial,    and agricultural	$	467,147			36.37	%	$	452,065		$	454,310		$	435,523		$	403,976			35.51	%
Lease financing receivable		4,857			0.38	%		5,285			4,750			5,102			5,542			0.49	%
Real estate - construction		68,577			5.34	%		86,315			86,238			78,988			82,691			7.27	%
Real estate - commercial		467,172			36.37	%		430,930			413,565			408,546			397,135			34.91	%
Real estate - residential		154,602			12.04	%		153,915			153,082			150,551			146,841			12.91	%
Installment loans to individuals		119,328			9.29	%		116,340			108,581			101,869			97,459			8.57	%
Other		2,748			0.21	%		3,523			3,656			3,610			3,910			0.34	%
Total loans	$	1,284,431					$	1,248,373		$	1,224,182		$	1,184,189		$	1,137,554
COMPOSITION OF DEPOSITS
	December 31,			Percent			September 30,			June 30,			March 31,			December 31,			Percent
		2014		of Total				2014			2014			2014			2013		of Total
Noninterest bearing	$	390,863			24.66	%	$	396,263		$	389,734		$	379,576		$	383,257			25.23	%
NOW & Other		469,627			29.63	%		447,403			443,287			456,127			429,279			28.26	%
Money Market/Savings		473,290			29.86	%		460,100			470,731			482,143			465,748			30.67	%
Time Deposits of less than $100,000		96,577			6.09	%		101,373			104,423			108,306			112,782			7.43	%
Time Deposits of $100,000 or more		154,877			9.77	%		115,705			117,247			121,778			127,737			8.41	%
Total deposits	$	1,585,234					$	1,520,844		$	1,525,422		$	1,547,930		$	1,518,803
ASSET QUALITY DATA
	December 31,						September 30,			June 30,			March 31,			December 31,
		2014						2014			2014			2014			2013
Nonaccrual loans	$	10,701					$	7,750		$	6,913		$	6,025		$	5,099
Loans past due 90 days and over		187						23			203			251			178
Total nonperforming loans		10,888						7,773			7,116			6,276			5,277
Other real estate		4,234						4,663			6,314			6,525			6,687
Other repossessed assets		-						19			81			56			20
Total nonperforming assets	$	15,122					$	12,455		$	13,511		$	12,857		$	11,984
Troubled debt restructurings	$	410					$	416		$	417		$	1,579		$	412
Nonperforming assets to total assets		0.78	%					0.66	%		0.71	%		0.68	%		0.65	%
Nonperforming assets to total loans +
ORE + other repossessed assets		1.17	%					0.99	%		1.10	%		1.08	%		1.05	%
ALLL to nonperforming loans		103.10	%					121.25	%		127.53	%		139.66	%		166.36	%
ALLL to total loans		0.87	%					0.75	%		0.74	%		0.74	%		0.77	%
Quarter-to-date charge-offs	$	985					$	1,253		$	990		$	688		$	740
Quarter-to-date recoveries		86						428			100			124			53
Quarter-to-date net charge-offs	$	899					$	825		$	890		$	564		$	687
Annualized QTD net charge-offs to total loans		0.28	%					0.26	%		0.29	%		0.19	%		0.24	%

-10-

MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands)
YIELD ANALYSIS	Three Months Ended							Three Months Ended							Three Months Ended							Three Months Ended							Three Months Ended
	December 31, 2014							September 30, 2014							June 30, 2014							March 31, 2014							December 31, 2013
			Tax							Tax							Tax							Tax							Tax
	Average		Equivalent		Yield/			Average		Equivalent		Yield/			Average		Equivalent		Yield/			Average		Equivalent		Yield/			Average		Equivalent		Yield/
	Balance		Interest		Rate			Balance		Interest		Rate			Balance		Interest		Rate			Balance		Interest		Rate			Balance		Interest		Rate
Taxable securities	$	339,536	$	1,936		2.28	%	$	351,645	$	1,965		2.24	%	$	379,124	$	2,064		2.18	%	$	397,642	$	2,136		2.15	%	$	409,561	$	2,128		2.08	%
Tax-exempt securities		83,612		966		4.62	%		86,528		996		4.60	%		87,964		1,007		4.58	%		91,792		1,059		4.61	%		98,648		1,143		4.63	%
Total investment securities		423,148		2,902		2.74	%		438,173		2,961		2.70	%		467,088		3,071		2.63	%		489,434		3,195		2.61	%		508,209		3,271		2.57	%
Federal funds sold		3,792		2		0.21	%		3,143		2		0.25	%		2,260		1		0.18	%		2,921		1		0.14	%		2,535		1		0.15	%
Time and interest bearing
deposits in other banks		44,841		28		0.24	%		22,922		15		0.26	%		16,789		11		0.26	%		25,891		16		0.25	%		14,546		9		0.24	%
Other investments		11,063		79		2.86	%		12,090		109		3.61	%		11,679		89		3.05	%		11,527		70		2.43	%		11,263		78		2.77	%
Loans		1,264,011		18,802		5.90	%		1,232,196		18,273		5.88	%		1,205,930		17,769		5.91	%		1,147,010		17,483		6.18	%		1,141,829		18,050		6.27	%
Total interest earning assets		1,746,855		21,813		4.95	%		1,708,524		21,360		4.96	%		1,703,746		20,941		4.93	%		1,676,783		20,765		5.02	%		1,678,382		21,409		5.06	%
Non-interest earning assets		182,895							184,085							183,980							182,429							184,580
Total assets	$	1,929,750						$	1,892,609						$	1,887,726						$	1,859,212						$	1,862,962
Interest-bearing liabilities:
Deposits	$	1,158,317	$	927		0.32	%	$	1,132,132	$	859		0.30	%	$	1,156,638	$	858		0.30	%	$	1,155,011	$	871		0.31	%	$	1,126,742	$	917		0.32	%
Repurchase agreements		69,735		207		1.18	%		70,587		210		1.18	%		62,322		199		1.28	%		48,413		180		1.51	%		67,022		207		1.23	%
Federal funds purchased		-		-		0.00	%		70		-		0.00	%		679		1		0.58	%		168		-		0.00	%		747		1		0.52	%
Short-term borrowings		28,696		12		0.16	%		28,913		13		0.18	%		25,110		9		0.14	%		25,000		10		0.16	%		23,913		9		0.15	%
Notes payable		26,326		91		1.35	%		26,640		95		1.40	%		27,218		95		1.38	%		27,577		96		1.39	%		27,922		101		1.42	%
Junior subordinated debentures		22,167		80		1.41	%		26,247		327		4.88	%		29,384		320		4.31	%		29,384		347		4.72	%		29,384		339		4.51	%
Total interest bearing liabilities		1,305,241		1,317		0.40	%		1,284,589		1,504		0.46	%		1,301,351		1,482		0.46	%		1,285,553		1,504		0.47	%		1,275,730		1,575		0.49	%
Non-interest bearing liabilities		404,689							402,729							385,118							378,679							395,746
Shareholders' equity		219,820							205,291							201,257							194,980							191,486
Total liabilities and
shareholders' equity	$	1,929,750						$	1,892,609						$	1,887,726						$	1,859,212						$	1,862,962
Net interest income (TE) and spread			$	20,496		4.55	%			$	19,856		4.50	%			$	19,459		4.47	%			$	19,261		4.55	%			$	19,834		4.57	%
Net interest margin						4.65	%						4.61	%						4.58	%						4.66	%						4.69	%
Core net interest margin (Non-GAAP)(*)						4.44	%						4.42	%						4.39	%						4.33	%						4.31	%
(*) See reconciliation of Non-GAAP financial measures on page 12.

-11-

MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures (unaudited)
(in thousands except per share data)
		Three Months Ended
		December 31,			September 30,			June 30,			March 31,			December 31,
Per Common Share Data		2014			2014			2014			2014			2013
Book value per common share		$	14.78		$	14.52		$	14.25		$	13.92		$	13.21
Effect of intangible assets per share			4.32			4.35			4.39			4.41			4.45
Tangible book value per common share		$	10.46		$	10.17		$	9.86		$	9.51		$	8.76
Diluted earnings per share		$	0.30		$	0.37		$	0.34		$	0.57		$	0.29
Effect of efficiency consultant expenses, after-tax			0.01			0.01			0.01			-			-
Effect of loss on disposal of fixed assets, after-tax			-			0.02			-			-			-
Effect of loss on redemption of Trust Preferred Securities, after-tax			-			0.02			-			-			-
Effect of gain on sale of other real estate, after-tax			-			(0.06	)		-			-			-
Executive officer life insurance proceeds, net of related expenses, after-tax			-			-			-			(0.24	)		-
Diluted earnings per share, operating		$	0.31		$	0.36		$	0.35		$	0.33		$	0.29
		Three Months Ended
		December 31,			September 30,			June 30,			March 31,			December 31,
		2014				2014			2014			2014			2013
Average Balance Sheet Data
Total average assets	A	$	1,929,750		$	1,892,609		$	1,887,726		$	1,859,212		$	1,862,962
Total equity		$	208,816		$	205,291		$	201,257		$	194,980		$	191,486
Less preferred equity			41,386			41,436			41,491			41,968			41,997
Total common equity	B	$	167,430		$	163,855		$	159,766		$	153,012		$	149,489
Less intangible assets			49,139			49,417			49,691			49,976			50,548
Tangible common equity	C	$	118,291		$	114,438		$	110,075		$	103,036		$	98,941
		Three Months Ended
		December 31,			September 30,			June 30,			March 31,			December 31,
Core Net Interest Margin			2014			2014			2014			2014			2013
Net interest income (TE)		$	20,496		$	19,856		$	19,459		$	19,261		$	19,834
Less purchase accounting adjustments			(894	)		(750	)		(745	)		(1,258	)		(1,515	)
Net interest income, net of purchase accounting adjustments	D	$	19,602		$	19,106		$	18,714		$	18,003		$	18,319
Total average earnings assets		$	1,746,855		$	1,708,524		$	1,703,746		$	1,676,783		$	1,678,382
Add average balance of loan valuation discount			5,764			6,498			7,013			7,915			9,347
Average earnings assets, excluding loan valuation discount	E	$	1,752,619		$	1,715,022		$	1,710,759		$	1,684,698		$	1,687,729
Core net interest margin	D/E		4.44	%		4.42	%		4.39	%		4.33	%		4.31	%
		Three Months Ended
		December 31,			September 30,			June 30,			March 31,			December 31,
Return Ratios			2014			2014			2014			2014			2013
Net earnings available to common shareholders		$	3,490		$	4,298		$	3,946		$	6,678		$	3,365
Efficiency consultant expenses, after-tax			101			130			70			34			-
Loss on disposal of fixed assets, after-tax			-			256			-			-			-
Loss on redemption of Trust Preferred Securities, after-tax			-			168			-			-			-
Gain on sale of other real estate, after-tax			-			(700	)		-			-			-
Executive officer life insurance proceeds, net of related expenses, after-tax			-			-			-			(2,840	)		-
Net earnings available to common shareholders, operating	F	$	3,591		$	4,152		$	4,016		$	3,872		$	3,365
Annualized return on average assets, operating	F/A		0.74	%		0.87	%		0.85	%		0.84	%		0.72	%
Annualized return on average common equity, operating	F/B		8.51	%		10.05	%		10.08	%		10.26	%		8.93	%
Annualized return on average tangible common equity, operating	F/C		12.04	%		14.39	%		14.63	%		15.24	%		13.49	%
Certain financial information included in the earnings release and the associated Condensed Consolidated Financial Information (unaudited) is determined by methods other than in accordance with GAAP. The non-GAAP financial measure above is calculated by using "tangible common equity," which is defined as total common equity reduced by intangible assets. "Tangible book value per common share" is defined as tangible common equity divided by total common shares outstanding. "Diluted earnings per share, operating" is defined as net earnings available to common shareholders adjusted for specified one-time items divided by diluted weighted-average shares. "Core net interest margin" is defined as reported net interest margin less purchase accounting adjustments. "Annualized return on average assets, operating" is defined as net earnings available to common shareholders adjusted for specified one-time items divided by average assets. "Annualized return on average common equity, operating" is defined as net earnings available to common shareholders adjusted for specified one-time items divided by average common equity. "Annualized return on average tangible common equity, operating" is defined as net earnings available to common shareholders adjusted for specified one-time items divided by average tangible common equity.
We use non-GAAP measures because we believe they are useful for evaluating our financial condition and performance over periods of time, as well as in managing and evaluating our business and in discussions about our performance. We also believe these non-GAAP financial measures provide users of our financial information with a meaningful measure for assessing our financial condition as well as comparison to financial results for prior periods. These results should not be viewed as a substitute for results determined in accordance with GAAP, and are not necessarily comparable to non-GAAP performance measures that other companies may use.

-12-