-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CUkvAfwKXL//8qS3dY3hMZuZBK/d7ZxHGlQr4tBSLlC1oRSVC5DPrLmzJp+Xl/WU CQCTbeimx60L5cVgK122jw== 0000948688-96-000020.txt : 19960814 0000948688-96-000020.hdr.sgml : 19960814 ACCESSION NUMBER: 0000948688-96-000020 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960813 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: MIDSOUTH BANCORP INC CENTRAL INDEX KEY: 0000745981 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 721020809 STATE OF INCORPORATION: LA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 001-11826 FILM NUMBER: 96610823 BUSINESS ADDRESS: STREET 1: 102 VERSAILLES BLVD CITY: LAFAYETTE STATE: LA ZIP: 70501 BUSINESS PHONE: 3182378343 MAIL ADDRESS: STREET 1: 102 VERSAILLES BLVD CITY: LAFAYETTE STATE: LA ZIP: 70501 10QSB 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10QSB __X___QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended..............June 30, 1996 _____TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ..... to ..... COMMISSION FILE NUMBER 2-91-000FW MIDSOUTH BANCORP, INC. Louisiana 72 -1020809 102 Versailles Boulevard, Lafayette, Louisiana 70501 (318) 237-8343 Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.YES __X__NO _____ State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. Outstanding as of June 30, 1996 Common stock, $.10 par value 993,190 Preferred stock, no par value, $14.25 stated value 179,756 Transitional Small Business Disclosure Format: Yes _______ No ___ X___ Page 1 Page 2 PART 1 - FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Page Statements of Condition - June 30, 1996 and 3 December 31, 1995 Statements of Income - Three and Six Months Ended June 30, 1996 and 1995 4 Statement of Stockholders' Equity - Six Months Ended June 30, 1996 5 Statements of Cash Flows - Six Months Ended June 30, 1996 and 1995 6 Notes to Financial Statements 7 Item 2. Management's Discussion and Analysis or Plan of Operation 8 PART II - OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders 15 Item 6. Exhibits and Reports on Form 8-K 16 Signatures 17
MIDSOUTH BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CONDITION (UNAUDITED) _____________________________________________________________________________________________ June 30 December 31, ASSETS 1996 1995 __________ ___________ Cash and due from banks $8,820,087 $10,298,209 Federal funds sold 14,600,000 15,800,000 __________ ___________ Total cash and cash equivalents 23,420,087 26,098,209 Interest bearing deposits in banks 294,493 26,349 Securities available-for-sale, at fair value (cost of $46,423,734 in June 1996 and $35,868,018 in December 1995) 45,642,534 36,058,587 Securities held-to-maturity (estimated market value of $7,476,434 in June 1996 and $4,735,344 in December 1995) 7,550,201 4,545,849 Loans, net of allowance for loan and lease losses of $1,063,074 in June 1996 and $1,051,898 in December 1995) 84,378,677 77,826,707 Bank premises and equipment, net 4,920,904 4,532,610 Other real estate owned, net 180,270 180,270 Accrued interest receivable 1,315,310 1,107,820 Goodwill, net 294,292 311,352 Other assets 1,343,775 495,488 __________ ___________ Total assets $169,340,543 $151,183,241 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Non-interest bearing $42,139,944 $40,471,206 Interest bearing 115,308,059 98,558,357 __________ ___________ Total deposits 157,448,003 139,029,563 Securities sold under repurchase agreements 67,362 175,904 Accrued interest payable 397,736 322,891 Notes payable 891,059 972,617 Other liabilities 149,609 268,702 __________ ___________ Total liabilities 158,953,769 140,769,677 __________ ___________ Commitments and contingencies - - Stockholders' Equity: Preferred Stock, no par value, $14.25 stated value - 5,000,000 authorized, 179,756 and 187,286 issued and outstanding on June 30, 1996 and December 31, 1995, respectively 2,561,523 2,668,826 Common stock, $.10 par value- 5,000,000 shares authorized, 993,190 and 967,940 issued and outstanding on June 30, 1996 and December 31, 1995, respectively 99,320 96,794 Surplus 6,445,856 6,164,443 Unearned ESOP shares (42,709) (54,157) Unrealized gains/losses on securities available- for-sale, net of deferred taxes of $236,400 in June 1996 and $91,619 in Decembember 1995 (544,800) 98,950 Retained earnings 1,867,584 1,438,708 __________ ___________ Total stockholders' equity 10,386,774 10,413,564 __________ ___________ Total liabilities and stockholders' equity $169,340,543 $151,183,241 =========== =========== _____________________________________________________________________________________________
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MIDSOUTH BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) Three Months Ended Six Months Ended June 30, June 30, 1996 1995 1996 1995 ______________________________ _____________________________ INTEREST INCOME: Loans, including fees $2,129,466 $1,702,958 $4,166,894 $3,249,413 Securities and interest-bearing deposit 782,181 451,261 1,458,409 893,133 Federal funds sold 149,300 58,589 346,343 100,399 _________ _________ _________ _________ TOTAL 3,060,947 2,212,808 5,971,646 4,242,945 _________ _________ _________ _________ INTEREST EXPENSE: Interest on deposits 1,087,514 679,544 2,098,029 1,248,417 Interest on notes payable 20,384 28,250 39,504 57,389 _________ _________ _________ _________ TOTAL 1,107,898 707,794 2,137,533 1,305,806 _________ _________ _________ _________ NET INTEREST INCOME 1,953,049 1,505,014 3,834,113 2,937,139 PROVISION FOR LOAN LOSSES 190,000 35,000 310,000 90,000 _________ _________ _________ _________ NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 1,763,049 1,470,014 3,524,113 2,847,139 _________ _________ _________ _________ OTHER OPERATING INCOME: Service charges on deposits 347,326 256,792 659,742 506,003 Other charges and fees 215,949 132,191 345,098 240,760 _________ _________ _________ _________ TOTAL OTHER INCOME 563,275 388,983 1,004,840 746,763 _________ _________ _________ _________ OTHER EXPENSES: Salaries and employee benefits 879,388 643,328 1,741,859 1,231,130 Occupancy expense 335,496 244,329 647,430 463,264 Professional fees 75,158 69,527 139,602 112,489 FDIC assessments 1,000 51,940 1,500 103,879 Marketing expenses 78,821 69,518 159,438 122,336 General and bond insurance 32,515 27,010 65,587 54,337 Data processing expenses 91,685 23,687 173,258 48,614 Postage 35,832 28,822 70,169 57,000 Director fees 22,732 25,698 49,005 48,107 Education and travel 44,128 26,223 77,490 48,375 Printing and supplies 56,165 42,808 107,896 73,943 Telephone 44,970 33,470 85,060 56,228 Expenses on other real estate owned, ne 1,640 11,976 1,813 27,982 Other 156,891 119,727 316,705 245,942 _________ _________ _________ _________ TOTAL OTHER EXPENSES 1,856,421 1,418,063 3,636,812 2,693,626 _________ _________ _________ _________ NET INCOME BEFORE INCOME TAXES 469,903 440,934 892,141 900,276 PROVISION FOR INCOME TAXES 133,490 141,586 267,481 302,843 _________ _________ _________ _________ NET INCOME $336,413 $299,348 $624,660 $597,433 _________ _________ _________ _________ PREFERRED DIVIDEND REQUIREMENT 39,133 - 78,853 - _________ _________ _________ _________ INCOME AVAILABLE TO COMMON SHAREHOLDERS $297,280 $299,348 $545,807 $597,433 ========= ========= ========= ========= EARNINGS PER COMMON SHARE: PRIMARY $0.30 $0.31 $0.55 $0.62 ========= ========= ========= ========= FULLY DILUTED $0.27 $0.31 $0.51 $0.62 ========= ========= ========= =========
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MIDSOUTH BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED) UNREALIZED (GAINS) LOSSES ON SECURITIES PREFERRED STOCK COMMON STOCK ESOP AVAILABLE RETAINED SHARES AMOUNT SHARES AMOUNT SURPLUS OBLIGATION FOR SALE EARNINGS TOTAL ___________________ _______________ _________ _____________________ __________ ___________ BALANCE, DECEMBER 31, 1995 $187,286 $2,668,826 967,940 $96,794 $6,164,443 ($54,157) $98,950 $1,438,708 $10,413,564 Issuance of common stock 2,639 264 40,224 40,488 Dividends paid on common stock (58,074) (58,074) Dividends accrued on preferred stock (39,720) (39,720) Stock options exercised 3,000 300 29,265 29,565 Preferred stock conversion (5,530) (78,803) 7,371 737 78,066 Net income 288,247 288,247 ESOP obligation repayments 5,642 5,642 Net change in unrealized gain/loss on securities available-for-sale, net of tax (264,150) (264,150) _______ __________ _______ _______ __________ ________ ________ __________ ___________ BALANCE, MARCH 31, 1996 181,756 $2,590,023 980,950 $98,095 $6,311,998 ($48,515) ($165,200) $1,629,161 $10,415,562 _______ __________ _______ _______ __________ _________ ________ __________ ___________ Issuance of common stock 2,574 258 38,233 38,491 Dividends paid on common stock (58,857) (58,857) Dividends accrued on preferred stock (39,133) (39,133) Stock options exercised 7,000 700 67,392 68,092 Preferred stock conversion (2,000) (28,500) 2,666 267 28,233 Net income 336,413 336,413 ESOP obligation repayments 5,806 5,806 Net change in unrealized gain/loss on securities available-for-sale, net of tax (379,600) (379,600) _______ __________ _______ _______ __________ ________ ________ __________ ___________ BALANCE, JUNE 30, 1996 179,756 $2,561,523 993,190 $99,320 $6,445,856 ($42,709) ($544,800) $1,867,584 $10,386,774 ======= ========== ======= ======= ========== ======== ======== ========== =========== 5
MIDSOUTH BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995 _________________________________________________________________________________________________ June 30, 1996 1995 _________ _________ CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $624,660 $597,433 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 300,871 148,688 Provision for loan losses 310,000 90,000 Provision for deferred taxes (83,733) - Premium amortization, net 81,747 71,002 Net (gain) loss on sale of fixed assets (22,650) Net (gain) loss on sale of other real estate owned (163) 2,135 Write-down of other real estate owned - 12,400 Change in accrued interest receivable (207,490) 87,323 Change in accrued interest payable 74,845 87,826 Change in other liabilities 131,464 (365,116) Change in other assets (743,050) (323,808) _____________ _____________ NET CASH PROVIDED BY OPERATING ACTIVITIES 466,501 407,883 _____________ _____________ CASH FLOWS FROM INVESTING ACTIVITIES: Net decrease in interest-bearing deposits (268,144) (22,005) Proceeds from maturities and calls of securities available-for-sale 1,790,367 4,692,408 Purchases of securities held-to-maturity (3,006,069) (3,002,563) Purchases of securities available-for-sale (12,426,113) - Loan originations, net of repayments (6,876,754) (6,493,980) Purchases of premises and equipment (799,213) (816,343) Proceeds from sales of other real estate owned 3,500 21,545 Proceeds from sales of fixed assets 149,758 - _____________ _____________ NET CASH USED IN INVESTING ACTIVITIES (21,432,668) (5,620,938) _____________ _____________ CASH FLOWS FROM FINANCING ACTIVITIES: Net increase in deposits 18,418,440 8,133,452 Net (decrease) increase in repurchase agreements (108,542) 17,639 Issuance of notes payable - 1,000,000 Repayments of notes payable (81,558) (1,073,400) Proceeds from issuance of common stock 78,979 54,196 Payment of common stock dividends (116,931) - Proceeds from exercise of stock options 97,657 - _____________ _____________ NET CASH PROVIDED BY FINANCING ACTIVITIES 18,288,045 8,131,887 _____________ _____________ NET (DECREASE) INCREASE IN CASH & CASH EQUIVALENTS (2,678,122) 2,918,832 CASH & CASH EQUIVALENTS AT BEGINNING OF YEAR 26,098,209 8,641,989 _____________ _____________ CASH & CASH EQUIVALENTS AT END OF QUARTER $23,420,087 $11,560,821 ============= ============== 6
MIDSOUTH BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. STATEMENT BY MANAGEMENT CONCERNING THE REVIEW OF UNAUDITED FINANCIAL INFORMATION The accompanying unaudited consolidated financial statements and notes thereto contain all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position of MidSouth Bancorp, Inc. ("MidSouth") and its subsidiary as of June 30, 1996 and the results of their operations and their cash flows for the periods presented. The consolidated financial statements should be read in conjunction with the annual consolidated financial statements and the notes thereto included in MidSouth's 1995 annual report and Form 10-KSB. The results of operations for the three and six month periods ended June 30, 1996 are not necessarily indicative of the results to be expected for the entire year. 2. ALLOWANCE FOR LOAN AND LEASE LOSSES An analysis of the activity in the allowance for loan and lease losses is as follows:
Six Months Ended June 30, 1996 1995 ______ ______ Balance at beginning of year $1,052 $874 Provision for loan losses 310 90 Recoveries 80 43 Loans charged off (379) (87) ______ ______ Balance at end of quarter $1,063 $920 ====== ======
7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This review should be read in conjunction with MidSouth Bancorp Inc.'s ("MidSouth") consolidated financial statements and accompanying notes contained herein, as well as with MidSouth's 1995 consolidated financial statements, the notes thereto and the related Management's Discussion and Analysis. MidSouth reported net income for the second quarter of 1996 of $336,413, representing a 12.4% increase over net income for the second quarter of 1995 of $299,348. Income available to common shareholders totaled $297,280 for the second quarter of 1996 compared to $299,348 for the second quarter of 1995. Primary earnings per share for the second quarter of 1996 were $.30 compared to $.31 for the second quarter of 1995. Fully diluted earnings per share were $.27 and $.31 for the same period, respectively. Net income available to common shareholders for the six months ended June 30, 1996 totaled $545,807 or $.55 primary earnings per share, compared to $597,433 or $.62 primary earnings per share for the six months ended June 30, 1995. Net income increased in the second quarter of 1996 despite start- up and operational costs associated with new branch facilities and increased provisions to the Allowance for Loan and Lease Losses ("ALLL"). Increases were recorded in net interest income, service charges on deposit accounts, and on income earned through sales of credit life insurance, mortgage loan originations, ATM processing, check order processing and a third party brokerage service. As of June 30, 1996, the ALLL totaled $1,063,074, or 1.24% of total loans. Nonperforming loans totaled $363,390 for the same period, representing .43% of total loans. MidSouth expensed $190,000 in provisions for loan and lease losses during the second quarter of 1996, $155,000 more than the $35,000 expensed for the second quarter of 1995, primarily due to $298,693 in chargeoffs of certain loans within a leasing program. Of the $1.2 million remaining in the program, $310,058 in lease loans are over 30 days past due but have not been classified as nonperforming. Management is continuing negotiations with the lease program participants and anticipates partial recoveries of the $298,693 charged off in the first six months of 1996. At the current quarter-end, recoveries of lease loan losses totaled $37,426. All other loans charged off in the first six months of 1996 totaled $80,517. MidSouth ended the second quarter of 1996 with total assets of $169,340,543, an increase of 12.0% over the $151,183,241 reported at year-end 1995 and an increase of 49.5% over the $113,272,066 reported at the end of the second quarter of 1995. Assets acquired through the merger with Sugarland Bancshares, Inc. and Sugarland State Bank on July 31, 1995 represent 30.6% of the growth experienced over the past twelve months. As of June 30, 1996, MidSouth's annualized return on average common equity was 14.64% and annualized return on average assets was .73% The leverage capital ratio was 6.64% at the current quarter-end. 8 Earnings Analysis Net Interest Income Average earning assets increased 49.55%, from $96.0 million for the six months ending June 30, 1995 to $143.5 million for the six months ending June 30, 1996. An increase in interest income resulting from the increase in earning assets was partially offset by a 56 basis point decline in the average yield on earning assets was partially offset by a 56 basis point decline in the average yield on earning assets in addition to a $37.9 million volume increase and 22 basis point rate increase associated with interest-bearing liabilities. Net interest income increased $896,974 over the comparable 1995 period. Despite increased net interest earnings, the net interest margin decreased 81 basis points, from 6.17% for the six months ended June 30, 1995 to 5.36% for the six months ended June 30, 1996. The decrease in the net interest margin resulted primarily from a change in the mix of earning assets. For the first six months of 1995, loans represented 65% of average earning assets. As of June 30, 1996, the percentage of loans to average earning assets fell to 57%. The change in mix occurred as the increase in deposits during the past twelve months exceeded loan fundings and excess funds were used to purchase securities or federal funds sold. Although installment loan demand has remained constant for MidSouth, competition for quality commercial loans has resulted in slowed groth for the commercial and real estate loan portfolios. The influx of deposits resulted from the Sugarland acquisition, a public funds contract, deposit promotions an d increased commercial deposits. An increase in the average rate paid on interest-bearing deposits and a change in the mix of deposits also contributed to the decline in the net interest margin. The deposit mix reflects a greater percentage of interest-bearing deposits for the six months ending June 30, 1996 as compared to the same period of 1995, primarily due to a public funds contract and increased commercial deposits. Interest-bearing deposits averaged 73.3% of total deposits at June 30, 1996 as compared to 70.8% at June 30, 1995. The average rate paid on interest-bearing deposits increased 29 basis points, from 3.63% to 3.92% for the same period. Non-interest Income MidSouth's primary source of non-interest income, service charges on deposit accounts, increased $90,534 for the quarter and $153,739 for the six months ending June 30, 1996 as compared to the same periods in 1995. The increases result primarily from additional insufficient funds fees and fees earned on 5,996 additional deposit accounts added in the past twelve months. However, as a percentage of total transaction account deposits, service charge income decreased from 1.56% in June 1995 to 1.34% in June 1996. Other non-interest income increased $83,758 and $104,338 in quarterly and year-to-date comparisons, respectively, primarily due to increases in income earned on the sale of credit life insurance, mortgage loan originations, ATM transaction processing, check order processing and a third party brokerage service. Additionally, in quarterly comparison, a gain on sale of property was recorded in other non-interest income totaling $22,650. The gain was realized in May 1996 on the sale of a portion of the Ambassador Caffery Branch property owned by MidSouth's subsidiary MidSouth National Bank (the "Bank"). 9 Non-interest Expense Non-interest expense increased 30.91% for the three months and 35.02% for the six months ended June 30, 1996 as compared to the same periods ended June 30, 1995. The increase resulted primarily from start up and operational costs associated with five new branch facilities, two of which were former Sugarland banking offices, and a loan processing office which produced significant increases in salaries and employee benefits, occupancy expenses, data processing expenses, printing and supplies, and marketing expenses. Additionally, an increase was recorded in the "Other" expenses category primarily due to increased services charges on correspondent bank accounts and auto expenses. Salaries and employee benefits increased due the addition of 45 full-time equivalent ("FTE") employees from 80 in June 1995 to 125 in June 1996. Of the 45 FTE employees added in the past twelve months, 26 were employees of the former Sugarland State Bank. Additional employees hired during 1995 included six to staff the Opelousas branch, seven for the Super 1 - New Iberia branch and seven in May 1996 to staff the Super 1 - Lafayette branch. Occupancy expense increased in the three and six month periods ending June 30, 1996 as compared to the same periods of 1995 due to increases in building lease expense, depreciation and maintenance expenses associated with furniture and equipment, utilities, insurance and ad valorem taxes. Building lease expense increased due to the addition of leased branch facilities in Opelousas, New Iberia, Morgan City and Lafayette. Depreciation and maintenance expenses, in addition to utilities, insurance and ad valorem taxes, increased due to these four leased branch facilities and the two former Sugarland locations. Marketing and promotional expenses increased in quarterly comparisons due to expenses related to quality service programs and special loan and deposit promotions. Service charges on correspondent bank accounts increased due primarily to a higher volume of items being processed through the Federal Reserve Bank. Auto expenses increased with the addition of four new vehicles and three vehicles acquired from Sugarland. MidSouth realized significant savings of $50,940 for the quarter and $102,379 for the six months ended June 30, 1996 in FDIC assessment fees due to its current risk classification. Based on this classification, MidSouth is required to remit minimal quarterly fees. Balance Sheet Analysis MidSouth ended the second quarter of 1996 with consolidated assets of $169,340,543, an increase of 12.0% over the $151,183,241 reported for December 31, 1995. The increase in consolidated assets was funded from increases of $6.1 million in transaction accounts, $1.9 million in money market and savings accounts and $10.4 million in time deposits. 10 As of June 30, 1996, total deposits increased $18.4 million to $157.4 million as compared to $139.0 million at December 31, 1995. Approximately $3.4 million in additional public fund deposits contributed to the increase. Favorable economic conditions and increased business activity resulted in an increase of $2.8 million in commerical transaction and money market accounts and $8.4 million in commercial time deposits during the first six months of 1996. A certificate of deposit promotion in the Jennings market contributed to the $1.7 million increase in individual time deposits for the same period. Total loans increased $6.5 million during the first six months of 1996. The installment loan promotion held during the months of March and April 1996 contributed $5.2 million to the installment loan portfolio. Competition for quality commercial loans has intensified in the Lafayette area in the past several months, and as a result, the commercial, agricultural and real estate portfolios combined grew only $1.3 million during the six months ending June 30, 1996. Securities available-for-sale increased $9.5 million, from $36.1 million at December 31, 1995 to $45.6 million at June 30, 1996. The increase reflects purchases of $12.4 million in U. S. Treasury and mortgage-backed securities partially offset by a net decrease of $971,769 in the market value of the securities available-for-sale. Additionally, $1.8 million in maturities and principal paydowns were received on mortgage-backed securities during the first six months of 1996. Unrealized losses in the securities available-for-sale portfolio, net of unrealized gains and tax effect, were $544,800 at June 30, 1996, compared to a net unrealized gain of $98,950 at December 31, 1995. These amounts result from interest rate fluctuations and do not represent permanent impairment of value. Moreover, classification of securities as available-for-sale does not necessarily indicate that the securities will be sold prior to maturity. Tax-free municipal securities totaling $3.0 million were purchased for the held-to-maturity portfolio during the six months ending June 30, 1996. During the first quarter of 1996, MidSouth's Board of Directors approved the purchase of defined contribution retirement plans for two executive officers and one senior officer. The single premium paid of $575,000 constitutes an earning asset for MidSouth and is included in the "Other Assets" category on the balance sheet. In July 1996, the Bank received approval from the Office of the Comptroller of the Currency to acquire property in Morgan City, Louisiana with plans to open a full service facility in 1996. The Bank currently operates a loan production office in a leased facility in Morgan City. Capital Ratios As of June 30, 1996, MidSouth's leverage ratio was 6.64% as compared to 6.99% at December 31, 1995. Tier 1 capital to risk- weighted assets was 11.83% and total capital to risk-weighted assets was 12.99% at the end of the second quarter of 1996. At year-end 1995, Tier 1 capital to risk-weighted assets was 12.11% and total capital to risk-weighted assets was 13.36%. 11 Common Stock Information Table 1 below lists the high, low and period-end closing sales prices of MidSouth's common stock on the American Stock Exchange (the "AMEX") for the past five quarters. Additional information on the price and volume of transactions currently appears in the Wall Street Journal under the heading "American Stock Exchange Composite Transactions."
TABLE 1 - COMMON STOCK INFORMATION 1996 1995 ____ ____ 2ND 1ST 4TH 3RD 2ND QTR QTR QTR QTR QTR ___ ___ ___ ___ ___ High Price $15.50 $15.63 $19.75 $13.00 $9.12 Low Price $14.00 $15.00 $13.25 $ 8.74 $8.27 Closing Price $14.00 $15.25 $15.38 $13.00 $8.83
On July 11, 1996, MidSouth announced a four for three stock split of its common stock for holders of record as of July 31, 1996 payable August 19, 1996. This follows a 5% stock dividend declared in February 1994 and a four for three stock split of September 1995. The annual dividend rate of $.24 per common share will continue to be paid quarterly, resulting in a 33% increase in the dividend payable. The above table has not been adjusted to reflect this split. On June 30, 1996, MidSouth's preferred stock closed at a quarterly low sales price of $19.00 per share. The high sales price for the second quarter of 1996 was $20.25 per share. Nonperforming Assets and Past Due Loans Table 2 summarizes MidSouth's nonaccrual, past due and restructured loans and nonperforming assets. Nonperforming assets were $550,378 as of June 30, 1996, a decrease of $20,463 from the $570,841 reported for December 31, 1995 and an decrease of $42,610 from the $592,988 reported for June 30, 1995. No significant changes occurred during the first six months of 1996. Loans past due 90 days or more increased from $182,350 in June 1995 to $265,682 in December 1995 and to $448,281 as of June 30, 1996. The increase resulted from the addition of $231,568 in lease loans that exhibited decreasing payment streams. MidSouth is the lender in this lease loan program that has been experiencing unfavorable trends. As of June 30, 1996, after charging off $298,693 of these loans, there remains $1.2 million outstanding of which $310,058 are over 30 days past due. Management has focused its attention on resolving these loans and believes it has provided adequately for future losses and recoveries. However, no assurance can be given that these loans will not deteriorate further. 12 Specific reserves have been established in the ALLL to cover potential losses on nonperforming assets. The ALLL is analyzed quarterly and additional reserves, if needed, are allocated at that time. Management believes the $1,063,074 in the reserve as of June 30, 1996 is sufficient to cover potential losses in nonperforming assets and in the loan and lease portfolios. Loans classified for regulatory purposes but not included in Table 2 do not represent material credits about which management has serious doubts as to the ability of the borrower to comply with loan repayment terms. Subsequent Event In July 1996, MidSouth received approval from the Federal Reserve Bank of Atlanta to form a finance company subsidiary, Financial Services of the South, Inc. ("FSS"). FSS began operations on August 1, 1996, offering consumer financing in the Lafayette market. 13
Page 14 TABLE 2 Nonperforming Assets and Loans Past Due 90 Days _____________________________________________________________________________________________ June 30, December 31, June 30, 1996 1995 1995 _____________________________________________________________________________________________ Nonperforming loans Nonaccrual loans $362,537 $386,510 $404,675 Restructured loans 853 943 4,593 _________ _________ _________ Total nonperforming loans 363,390 387,453 409,268 Other real estate owned, net 180,270 180,270 180,270 Other assets repossessed 6,718 3,118 3,450 _________ _________ _________ Total nonperforming assets $550,378 $570,841 $592,988 ========= ========== ========= Loans past due 90 days or more and still accruing $448,281 $265,682 $182,350 Nonperforming loans as a % of total loans 0.43% 0.49% 0.61% Nonperforming assets as a % of total loans, other real estate owned and other assets repossessed 0.64% 0.72% 0.88% ALLL as a % of nonperforming loans 292.50% 271.49% 224.82% _____________________________________________________________________________________________
PAGE 15 Item 4. Submission of Matters to a Vote of Security Holders At the annual meeting of shareholders of MidSouth Bancorp, Inc. held May 15,1996 at 2:00 p.m., the following directors were elected: James R. Davis, Jr. Votes cast for 791,315 Withheld 2,200 Karen L. Hail Votes cast for 791,315 Withheld 2,200 Milton B. Kidd, III, O.D. Votes cast for 791,215 Withheld 2,300 No other matters were brought before the meeting on May 15, 1996. Item 6. Exhibits and Reports on Form 8-K Page 16 (a) Exhibits Exihibit NumberDocument Description 3.1 Amended and Restated Articles of Incorporation of MidSouth Bancorp, Inc. is included as Exhibit 3.1 to the Report on Form 10-K for the year ended December 31, 1993, and is incorporated herein by reference. 3.2 Articles of Amendment to Amended and Restated Articles of Incorporation dated July 19, 1995 are included as Exhibit 4.2 to MidSouth's Registration Statement on Form S-8 filed September 20, 1995 and is incorporated herein by reference. 3.3 Amended and Restated By-laws adopted by the Board of Directors on April 12, 1995 are included as Exhibit 3.2 to Amendment No. 1 to MidSouth's Registration Statement on Form S-4 (Reg. No. 33-58499) filed on June 1, 1995. 10.1 MidSouth National Bank Lease Agreement with Southwest Bank Building Limited Partnership is included as Exhibit 10.7 to the Company's annual report on Form 10-K for the Year Ended December 31, 1992, and is incorporated herein by reference. 10.2 First Amendment to Lease between MBL Life Assurance Corporation, successor in interest to Southwest Bank Building Limited Partnership in Commendam, and MidSouth National Bank is included as Exhibit 10.1 to Report on the Company's annual report on Form 10-KSB for the yearended December 31, 1994, and is incorporated herein by reference. 10.3 Amended and Restated Deferred Compensation Plan and Trust is included as Exhibit 10.3 to the Company's annual report on Form 10-K for the year ended December 31, 1992 and is incorporated herein by reference. 10.4 Employment Agreements with C. R. Cloutier and Karen L. Hail are included as Exhibit 5(c) to MidSouth's Form 1-A and are incorporated herein by reference. 10.5 Description of the Incentive Compensation Plan for Officers of MidSouth National Bank is included as Exhibit 10.5 to the Company's annual report on Form 10-K for the year ended December 31, 1993, and is incorporated herein by reference. Page 17 10.6 Agreement and Plan of Merger between MidSouth Bancorp, Inc. and MidSouth National Bank and Sugarland Bancshares, Inc. and Sugarland State Bank is included as Exhibit 10.5 to the Company's annual report on Form 10-KSB for the year ended December 31, 1994, and is incorporated herein by reference 11 Computation of earnings per share (b) Reports Filed on Form 8-K (none) Signatures In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MidSouth Bancorp, Inc. (Registrant) Date: August 13, 1996 /s/ C. R. Cloutier _______________________________ C. R. Cloutier, President & CEO Karen L. Hail _______________________________ Karen L. Hail, Executive Vice President & CFO Teri S. Stelly __________________________________ Teri S. Stelly, Vice President & Controller EX-11 2
MIDSOUTH BANCORP, INC. AND SUBSIDIARY EXHIBIT 11 COMPUTATION OF EARNINGS PER SHARE (Unaudited) Page 18 For the Three and Six Months Periods Ended June 30, 1996 and 1995 Second Quarter Second Quarter Year to Date Year to Date June 30, June 30, June 30, June 30, PRIMARY 1996 1995 1996 1995 _____________ _____________ _____________ _____________ Earnings: Income applicable to common stock $297,280 $299,348 $545,807 $597,433 ================ ============= ============ ============== Shares: Weighted average number of common shares outstanding 987,660 957,557 980,188 956,457 ================ ============= ============ ============== Earnings per common share: Income applicable to common stock $0.30 $0.31 $0.56 $0.62 ================ ============= ============ ============== Weighted average number of common shares outstanding 987,660 957,557 980,188 956,457 Assuming exercise of options, reduced by the number of shares which could have been purchased with the proceeds from exercise of such options at the average issue price or period end price 7,314 4,480 7,402 4,834 _______________ _____________ ____________ _____________ Weighted average number of common shares outstanding, as adjusted 994,974 962,037 987,590 961,291 ================ ============= ============ ============== Primary earnings per common share $0.30 $0.31 $0.55 $0.62 ================ ============= ============ ============== FULLY DILUTED Earnings: Net income $336,413 $299,348 $624,660 $597,433 ================ ============= ============ ============== Weighted average number of common shares outstanding 987,660 957,557 980,188 956,457 Assuming exercise of options, reduced by the number of shares which could have been purchased with the proceeds from exercise of such options at the higher of the average issue price or period en 7,534 5,308 7,499 5,308 Assuming conversion of 179,756 shares of preferred stock at a conversion rate of 1 to 1.3333 shares 239,669 - 239,669 - _______________ _____________ ____________ _____________ Weighted average number of common shares outstanding, as adjusted 1,234,863 962,865 1,227,356 961,765 ================ ============= ============ ============== Fully diluted earnings per common share $0.27 $0.31 $0.51 $0.62 ================ ============= ============ ==============
EX-27 3
9 3-MOS DEC-31-1995 JUN-30-1996 8,820 294 14,600 0 45,643 7,550 7,476 85,442 1,063 169,341 157,448 67 548 891 99 0 2,562 7,726 169,341 2,130 782 149 3,061 1,088 1,108 1,953 190 0 1,856 470 470 0 0 336 .30 .27 5.36 362 448 1 0 1,052 379 80 1,063 140 0 923
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