-----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, AlIrCaFdMTP0xvPS//YadsBO4y7WdStUWeDnC6EGvxtV9cpe4vcoEgaTdpDGArql TBGCYVppNLTPFenX11NGIA== 0000948688-99-000015.txt : 19990514 0000948688-99-000015.hdr.sgml : 19990514 ACCESSION NUMBER: 0000948688-99-000015 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990513 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: SEC FILE NUMBER: 001-11826 FILM NUMBER: 99620354 BUSINESS ADDRESS: STREET 1: 102 VERSAILLES BLVD STREET 2: VERSAILLES CENTRE 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.....................March 31, 1999 _____ 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 March 31, 1999 Common stock, $.10 par value 2,444,306 Preferred stock, no par value, $14.25 stated value 156,177 Transitional Small Business Disclosure Format: Yes _______ No ___X___ Page 1 Page 2 PART 1 - FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Page Financial Highlights 3 Statements of Condition - March 31, 1999 and December 31, 1998 4 Statements of Income - Three Months Ended March 31, 1999 and 1998 and Year Ended December 31, 1998 5 Statement of Stockholders' Equity - Three Months Ended March 31, 1999 6 Statements of Cash Flows - Three Months Ended March 31, 1999 and 1998 7 Notes to Financial Statements 8 Item 2. Management's Discussion and Analysis or Plan of Operation 9 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 16 Signatures 17
MIDSOUTH BANCORP, INC. AND SUBSIDIARIES FINANCIAL HIGHLIGHTS (UNAUDITED) Three Months Ended Year-ended March 31, December 31, EARNINGS DATA 1999 1998 1998 ________________________________________ Net interest income $3,022,140 $2,691,722 $11,824,208 Provision for loan losses 266,950 258,000 999,950 Non-interest income 909,140 778,840 3,486,937 Non-interest expense 2,903,093 2,507,256 11,023,245 Provision for income tax 164,387 152,798 842,167 Net income 596,850 552,508 2,445,783 Preferred dividend requirement 33,383 37,520 148,971 Income available to common sharehol $563,467 $514,988 $2,296,812 ============================================================================= PER COMMON SHARE DATA Basic earnings per share $0.23 $0.21 $0.95 Diluted earnings per share $0.20 $0.19 $0.83 Book value at end of period $5.69 $4.76 $5.53 Market price at end of period $11.06 $14.50 $11.13 Market price of preferred stock at $33.00 $46.25 $32.50 Weighted average shares outstanding Basic 2,439,256 2,381,511 2,410,926 Diluted 2,965,203 2,935,610 2,958,381 ============================================================================= AVERAGE BALANCE SHEET DATA Total assets $259,152,871 $222,213,579 $235,766,986 Earning assets 235,583,534 201,167,815 214,572,581 Loans and leases 155,183,050 131,792,227 144,455,710 Interest-bearing deposits 180,383,947 151,749,614 162,504,644 Total deposits 239,070,515 204,842,701 217,105,614 Common stockholders' equity 13,532,186 10,986,163 11,988,753 Total stockholders' equity 15,762,518 13,265,037 14,246,948 ============================================================================= SELECTED RATIOS Return on average assets (annualize 0.93% 1.01% 1.04% Return on average common equity (an 16.89% 19.01% 19.16% Return on average total equity ( an 15.36% 16.89% 17.17% Leverage capital ratio 6.09% 6.04% 6.06% Tier 1 risk-based capital ratio 9.25% 9.38% 9.13% Total risk-based capital ratio 10.35% 10.46% 10.25% Allowance for loan losses as a % of total loans 1.21% 1.15% 1.20% ============================================================================= PERIOD ENDING BALANCE SHEET DATA 3/31/99 3/31/98 Net Change Total assets $270,432,493 $231,017,564 $39,414,929 Earning assets 247,726,379 208,467,198 $39,259,181 Loans and leases, net 153,914,963 132,621,978 $21,292,985 Interest-bearing deposits 191,352,663 158,797,089 $32,555,574 Total deposits 250,018,682 213,303,319 $36,715,363 Common stockholders' equity 13,910,065 11,371,014 $2,539,051 Total stockholders' equity 16,135,587 13,636,992 $2,498,595 =============================================================================
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MIDSOUTH BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CONDITION ___________________________________________________________________________________ March 31, December 31, 1999 1998 * ASSETS (unaudited) ___________ ___________ Cash and due from banks $11,705,160 $14,003,536 Federal funds sold 18,600,000 6,600,000 ___________ ___________ Total cash and cash equivalents 30,305,160 20,603,536 Interest bearing deposits in banks 16,237 16,125 Securities available-for-sale, at fair value (cost of $53,791,536 in March 1999 and $43,503,268 in December 1998) 54,065,885 43,938,965 Securities held-to-maturity (estimated market value of $20,297,153 in March 1999 and $20,421,920 in December 1998) 19,245,741 19,246,559 Loans, net of allowance for loan losses of $1,883,553 in March 1999 and $1,860,490 in December 1998 153,914,963 153,616,773 Bank premises and equipment, net 9,614,097 9,054,201 Other real estate owned, net 39,100 48,100 Accrued interest receivable 1,771,447 1,740,514 Goodwill, net 198,625 207,281 Other assets 1,261,238 1,346,214 ___________ ___________ Total assets $270,432,493 $249,818,268 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Non-interest bearing $58,666,019 $60,361,205 Interest bearing 191,352,663 169,563,097 ___________ ___________ Total deposits 250,018,682 229,924,302 Securities sold under repurchase agreements - - Accrued interest payable 608,558 565,896 Notes payable 3,392,993 3,503,668 Other liabilities 276,673 138,280 ___________ ___________ Total liabilities 254,296,906 234,132,146 ___________ ___________ Commitments and contingencies - - Stockholders' Equity: Preferred Stock, no par value, $14.25 stated value - 5,000,000 shares authorized, 156,177 and 156,927 issued and outstanding on March 31, 1999 and December 31, 1998, respectively 2,225,522 2,236,210 Common stock, $.10 par value- 5,000,000 shares authorized, 2,444,306 and 2,432,016 issued and outstanding on March 31, 1999 and December 31, 1998, respectively 244,431 243,201 Surplus 10,639,529 10,521,020 Unearned ESOP shares (114,468) (119,051) Unrealized gains/losses on securities available-for-sale, net of deferred taxes of $103,140 in March 1999 and $159,000 in December 1998 171,210 276,700 Retained earnings 2,969,363 2,528,042 ___________ ___________ Total stockholders' equity 16,135,587 15,686,122 ___________ ___________ Total liabilities and stockholders' equity $270,432,493 $249,818,268 =========== =========== * The consolidated statement of condition at December 31, 1998 is taken from the audited balance sheet on that date.
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MIDSOUTH BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME _______________________________________________________________________________ Three Months Ended Year Ended March 31, December 31, 1999 1998 1998 * (unaudited) __________________________ ___________ INTEREST INCOME: Loans, including fees $3,757,538 $3,321,732 $14,803,065 Securities Taxable 684,979 588,511 2,460,266 Nontaxable 260,682 220,076 924,669 Federal funds sold 158,633 180,037 567,764 __________ __________ ___________ TOTAL 4,861,832 4,310,356 18,755,764 __________ __________ ___________ INTEREST EXPENSE: Interest on deposits 1,775,266 1,554,300 6,666,682 Interest on note payable 64,426 64,334 264,876 __________ __________ ___________ TOTAL 1,839,692 1,618,634 6,931,558 __________ __________ ___________ NET INTEREST INCOME 3,022,140 2,691,722 11,824,206 PROVISION FOR LOAN LOSSES 266,950 258,000 999,950 __________ __________ ___________ NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 2,755,190 2,433,722 10,824,256 __________ __________ ___________ OTHER OPERATING INCOME: Service charges on deposits 705,997 584,921 2,606,903 Gains on securities, net - - - Credit life insurance 16,167 27,118 133,217 Other charges and fees 186,976 166,801 746,817 __________ __________ ___________ TOTAL OTHER INCOME 909,140 778,840 3,486,937 __________ __________ ___________ OTHER EXPENSES: Salaries and employee benefits 1,381,608 1,250,293 5,274,992 Occupancy expense 650,758 548,138 2,360,664 Other 870,727 708,825 3,387,588 __________ __________ ___________ TOTAL OTHER EXPENSES 2,903,093 2,507,256 11,023,244 __________ __________ ___________ INCOME BEFORE INCOME TAXES 761,237 705,306 3,287,949 PROVISION FOR INCOME TAXES 164,387 152,798 842,167 __________ __________ ___________ NET INCOME $596,850 $552,508 $2,445,782 PREFERRED DIVIDEND REQUIREMENT 33,383 37,520 148,971 __________ __________ ___________ INCOME AVAILABLE TO COMMON SHAREHOLDERS $563,467 $514,988 $2,296,811 ========== ========== =========== BASIC EARNINGS PER COMMON SHARE $0.23 $0.21 $0.95 ========== ========== =========== DILUTED EARNINGS PER COMMON SHARE $0.20 $0.19 $0.83 ========== ========== =========== * The consolidated statement of income at December 31, 1998 is taken from the audited income statement of that date.
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MIDSOUTH BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE QUARTER ENDED MARCH 31, 1999 (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, 1998 156,927 $2,236,210 2,432,016 $243,201 $10,521,020 ($119,051) $276,700 $2,528,042 $15,686,122 Issuance of common stock 10,043 1,005 108,046 109,051 Dividends paid on common stock (122,146) (122,146) Dividends paid on preferred stock (33,383) (33,383) Preferred stock conversion (750) (10,688) 2,247 225 10,463 0 Net income 596,850 596,850 ESOP obligation, net of repayments 4,583 4,583 Net change in unrealized gain/loss on securities available-for-sale, net of tax (105,490) (105,490) _______ _________ _________ _______ __________ ________ _______ _________ __________ BALANCE, March 31, 1999 156,177 $2,225,522 2,444,306 $244,431 $10,639,529 ($114,468) $171,210 $2,969,363 $16,135,587 ======= ========= ========= ======= ========== ======== ======= ========= ==========
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MIDSOUTH BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, 1999 and 1998 __________________________________________________________________________________________ March 31, 1999 March 31, 1998 ______________ ______________ CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $596,850 $552,508 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 268,220 227,282 Provision for loan losses 266,950 258,000 Provision for deferred income taxes 12,228 49,330 Discount accretion (premium amortization), net (4,737) (4,575) Gain on sale of premises and equipment - (750) Loss on sale of other real estate owned - 1,000 Change in accrued interest receivable (30,933) 6,995 Change in accrued interest payable 42,662 22,985 Change in other liabilities 138,393 (51,740) Change in other assets 128,608 30,256 ______________ ______________ NET CASH PROVIDED BY OPERATING ACTIVITIES 1,418,241 1,091,291 ______________ ______________ CASH FLOWS FROM INVESTING ACTIVITIES: Net decrease in interest-bearing deposits in banks (112) (82,868) Proceeds from maturities and calls of securities available-for-sale 2,775,453 1,950,899 Purchases of securities available-for-sale (13,058,167) (5,963,716) Loan originations, net of repayments (571,181) (3,416,020) Purchases of premises and equipment (819,460) (608,736) Proceeds from sales of premises and equipment - 20,651 Proceeds from sales of other real estate owned 19,624 5,000 ______________ ______________ NET CASH USED IN INVESTING ACTIVITIES (11,653,843) (8,094,790) ______________ ______________ CASH FLOWS FROM FINANCING ACTIVITIES: Net increase in deposits 20,094,380 13,235,568 Net (decrease) increase in securities sold under repurchase agreements and federal funds purchased - 676 Issuance of notes payable 75,000 - Repayments of notes payable (185,676) (78,961) Proceeds from issuance of common stock 109,051 190,602 Payment of dividends (155,529) (133,069) Payment of fractional shares resulting from conversion of preferred stock and stock dividends - (70) ______________ ______________ NET CASH PROVIDED BY FINANCING ACTIVITIES 19,937,226 13,214,746 ______________ ______________ NET DECREASE IN CASH & CASH EQUIVALENTS 9,701,624 6,211,247 CASH & CASH EQUIVALENTS AT BEGINNING OF PERIOD 20,603,536 23,834,024 ______________ ______________ CASH & CASH EQUIVALENTS AT END OF PERIOD $30,305,160 $30,045,271 ============== ==============
7 MIDSOUTH BANCORP, INC. AND SUBSIDIARIES 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 subsidiaries as of March 31, 1999 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 1998 annual consolidated report and Form 10-KSB. The results of operations for the three month period ended March 31, 1999 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:
Three Months Ended March 31, (in thousands) 1999 1998 _______ ______ Balance at beginning of year $1,860 $1,415 Provision for loan losses 267 258 Recoveries 40 36 Loans charged off (284) (170) ______ ______ Balance at end of quarter $1,883 $1,539 ====== ======
3. COMPREHENSIVE INCOME MidSouth adopted Statement of Financial Accounting Standards No. 130 "Reporting Comprehensive Income" ("SFAS 130") effective January 1, 1998. SFAS 130 establishes standards for reporting and display of comprehensive income and its components. Comprehensive income includes net income and other comprehensive income which, in the case of MidSouth, only includes unrealized gains and losses on securities available-for-sale. Following is a summary of MidSouth's comprehensive income for the three months ended March 31, 1999 and 1998.
1998 1997 __________ __________ Net income $ 596,850 $ 552,580 Other comprehensive income, net of tax (105,490) 91,034 __________ __________ Total comprehensive income $ 491,360 $ 643,614 ========== ==========
8 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 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 1998 annual consolidated financial statements, the notes thereto and the related Management's Discussion and Analysis. MidSouth Bancorp, Inc. announced net income of $596,850 for the first quarter of 1999, an increase of 8% over net income of $552,508 reported for the first quarter of 1998. Income available to common shareholders totaled $563,467 for the first quarter of 1999, compared to $514,988 for the first quarter of 1998. Basic earnings per share were $.23 and $.21 for the quarters ended March 31, 1999 and 1998, respectively. Diluted earnings per share were $.20 for the first quarter of 1999 compared to $.19 for the first quarter of 1998. The increase in earnings resulted primarily from a $34.4 million or 17% increase in the average volume of earning assets between the two quarters ended March 31, 1998 and 1999. Loan growth contributed $23.4 million to the increase in average earning assets. Accordingly, net interest income increased $330,418 in quarterly comparison. Non- interest income, exclusive of net gains on sales of investment securities, added $130,300 to income during the same period. Increases in total service charges and fees on deposit accounts, due to an increased volume of accounts, contributed most of the increase to non-interest income. MidSouth enjoyed substantial deposit and loan growth during the past twelve months. Deposits grew $36.7 million or 17.2%, from $213.3 million at March 31, 1998 to $250.0 million at March 31, 1999. Of the $36.7 million increase, $32.6 million represented interest-bearing deposits. The deposit growth results primarily from deposits associated with new loan relationships and from marketing efforts directed to customers affected by merger activity within MidSouth's market. In addition, a deposit promotion designed to increase MidSouth's market share began March 1, 1999 and resulted in an increase of $6.6 million in deposits for the month of March 1999. Loans, net of Allowance for Loan Losses ("ALL"), increased $21.3 million or 16.1%, from $132.6 million in the first quarter of 1998 to $153.9 million in the first quarter of 1999. The majority of the loan growth occurred in the second and third quarters of 1998 and resulted primarily from loan relationships developed by two new commercial lenders hired in January 1998. Provisions for loan and lease losses totaled $266,950 in March 1999 compared to $258,000 in March 1998. Nonperforming loans as a percentage of total loans increased from .15% in March of 1998 to .41% in March of 1999. Nonaccrual loans increased $441,442 in quarterly comparison, from $195,501 at March 31, 1998 to $636,943 9 at March 31, 1999. The increase resulted from the addition of a large real estate credit totaling approximately $360,000 in the first quarter of 1999. In addition, approximately $110,000 of another commercial credit added to nonaccrual loans in the second half of 1998 remained in the nonperforming total as of March 31, 1999. The ALL represented 296% of nonperforming loans as of March 31, 1999, as compared to 787% as of March 31, 1998. MidSouth's leverage ratio was 6.09% at March 31, 1999. Return on average common equity was 16.89% and return on average assets was .93%. Earnings Analysis Net Interest Income Average earning assets increased 17%, or $34.4 million, from $201.2 million for the three months ended March 31, 1998 to $235.6 million for the three months ended March 31, 1999. The mix of average earning assets remained relatively constant as loans represented 65.8% of average earning assets in the first quarter of 1999 compared to 65.5% in the first quarter of 1998. Average loan volume increased $23.4 million, from $131.8 million in the first quarter of 1998 to $155.2 million in the first quarter of 1999. The average yield on loans fell 40 basis points, from 10.22% to 9.82% at March 31, 1999. The decrease in loan yields resulted from a 50 basis point decrease in the prime lending rate (both New York prime and MidSouth's internal prime rate) in the fourth quarter of 1998. Investment volume, including federal funds sold, increased $11.0 million, from $69.4 million at March 31, 1998 to $80.4 million at March 31, 1999 due to decreased loan demand. The average taxable-equivalent yield on investments declined by 13 basis points for the same period, from 6.61% to 6.48%. Additionally, federal funds sold yields decreased 74 basis points, from 5.32% to 4.58%. Lower yields resulted in a decrease in the taxable- equivalent yield on average earning assets of 32 basis points, from 8.89% in the first quarter of 1998 to 8.57% in the first quarter of 1999. Volume increases in average earning assets resulted in increased interest income of $551,476 in quarterly comparison despite falling yields. An average volume increase of $28.6 million in interest- bearing liabilities resulted in a $220,966 increase in interest expense for the quarter ended March 31, 1999 compared to the quarter ended March 31, 1998. The percentage of average interest-bearing deposits to average total deposits increased from 74.1% in the first quarter of 1998 to 75.5% in the first quarter of 1999. The average rate paid on interest-bearing deposits decreased 16 basis points, from 4.15% at March 31, 1998 to 3.99% at March 31, 1999. The average volume of notes payable increased $260,459 in quarterly comparison as MidSouth and its subsidiary, Financial Services of the South, Inc. (the "Finance Company") had minimal borrowings against their lines of credit during the twelve months ended March 31, 1999. The net effect of changes in the yields and volume of earning assets and interest-bearing liabilities increased net interest income $330,418 in quarterly comparison. The net taxable-equivalent yield on average earning assets decreased 22 basis points, from 5.62% for the quarter ended 10 March 31, 1998, to 5.40% for the quarter ended March 31, 1999. Non-interest Income MidSouth's primary source of non-interest income, service charges on deposit accounts, increased $121,076 for the three months ended March 31, 1999 as compared to the same period in 1998. The increase resulted primarily from additional insufficient funds fees and an increase in the volume of accounts serviced. Other non-interest income increased $20,175 in quarterly comparison. A new mortgage origination program with a third party processor contributed $11,023 to the increase in other non-interest income. Visa debit card and merchant income increased $16,912; however, Visa program expenses increased $10,713, partially offsetting the benefit to income. Decreases were recorded in income from the sale of credit life insurance ($10,951) and lease income from a third party investment firm ($10,662). Non-interest Expense Non-interest expense increased $395,837 or 16% for the three months ended March 31, 1999 compared to the three months ended March 31, 1998. Increases were recorded primarily in the categories of salaries and employee benefits, occupancy expenses, marketing expenses, and data processing expenses. Salaries and employee benefits increased primarily due to the addition of the Lake Charles Office staff and administrative staff, including a Training Director and Internal Auditor. The number of full-time equivalent ("FTE") employees increased by 11, from 140 in March 1998 to 151 in March 1999. Occupancy expense increased in the three month period ended March 31, 1999 compared to the same period of 1998 due to increases in depreciation and maintenance expenses associated with buildings, furniture and equipment, utilities and ad valorem taxes. The increase in depreciation expense and utilities resulted primarily from the addition of the Lake Charles office in June 1998. Marketing expenses increased $82,169 due to production costs and media costs associated with a promotional campaign designed to appeal to customers impacted by bank merger activity in the market. Data processing expenses increased $24,729 primarily due to increased software maintenance charges and increases data processing training, support and supplies. Balance Sheet Analysis MidSouth ended the first quarter of 1999 with consolidated assets of $270,432,493, an increase of $20.6 million or 8% from the $249,818,268 reported for December 31, 1998. Deposits increased over the three months ended March 31, 11 1999 by $20.1 million, from $229,924,302 at December 31, 1998 to $250,018,682. Non-interest bearing deposits declined $1.7 million and interest-bearing deposits increased $21.8 million during the three month period. Of the $20.1 million increase, $12.5 million was in savings and money market deposits and $8.3 million in certificates of deposit. A total of $6.6 million of the growth in deposits resulted from a deposit promotion that began on March 1, 1999. Loans remained relatively constant as new loan fundings were offset by payoffs on existing credits. Loan growth slowed in the past six months due to a decrease in demand and competitive pricing for loan dollars in MidSouth's market. Due to the decrease in loan fundings, excess funds were used to purchase additional securities and federal funds sold. Securities available-for-sale increased $10.1 million, from $43.9 million at December 31, 1998 to $54.0 million at March 31, 1999. The increase reflects purchases of $13.1 million and maturities and principal paydowns of $2.8 million. Unrealized gains in the securities available- for-sale portfolio, net of unrealized losses and tax effect, were $171,210 at March 31, 1999, compared to a net unrealized gain of $276,700 at December 31, 1998. These amounts result from interest rate fluctuations and do not represent permanent adjustments of value. Moreover, classification of securities as available-for-sale does not necessarily indicate that the securities will be sold prior to maturity. Capital As of March 31, 1999, MidSouth's leverage ratio was 6.09% as compared to 6.06% at December 31, 1998. Tier 1 capital to risk-weighted assets was 9.25% and total capital to risk-weighted assets was 10.35% at the end of the first quarter of 1999. At year-end 1998, Tier 1 capital to risk- weighted assets was 9.13% and total capital to risk- weighted assets was 10.25%. MidSouth's dividend reinvestment and direct stock purchase plan yielded common stock purchases of $78,479 in the first quarter of 1999. The Year 2000 Issue The Year 2000 issue arises from the storage of data within computer systems using a two digit field rather than a four digit field to define the year. Consequently, computer programs may recognize a date using "00" as the year 1900 instead of 2000. All companies and organizations that use computer systems are affected by this issue. To maintain safe and sound banking practices, financial institutions are required to take appropriate measures to insure efficient operations of computer systems beyond the year 2000. MidSouth's Board of Directors established a Year 2000 compliance committee in June 1997. The committee inventoried MidSouth's hardware and software programs, identified mission critical systems and forwarded letters to the providers regarding Year 2000 compliance. As of March 31, 1999, testing and updating has been performed on approximately 98% of MidSouth's mission critical systems, including the core data processing hardware and software. In addition, MidSouth has received a warranty from the software provider as to the completion of internal testing and readiness of their programs. 12 To further reduce the risks associated with the Year 2000, MidSouth held seminars for commercial customers and community businesses in May 1998. MidSouth provided seminar participants with software designed to help them identify Year 2000 issues within their organizations. The software guides the user through the vendor identification and tracking process and provides assistance in other issues such as contingency planning. As part of its own contingency planning, MidSouth has agreements with and has tested the capabilities of two vendors to provide short- term and long-term processing. In compliance with Year 2000 disclosure requirements, the committee has analyzed the impact that compliance with the Year 2000 may have on earnings. Costs totaling approximately $82,000 have been identified or incurred for testing and other expenses. Additional costs are expected, but it is management's opinion that the costs will not be material to MidSouth's earnings. 13 Nonperforming Assets and Past Due Loans Table 1 summarizes MidSouth's nonaccrual, past due and restructured loans and nonperforming assets.
TABLE 1 Nonperforming Assets and Loans Past Due 90 Days ========================================================================= March December March 31, 31, 31, 1999 1998 1998 ========================================================================= Nonperforming loans $636,943 $533,107 $195,501 Other real estate owned, net 39,100 48,100 53,137 Other assets repossessed 5,039 26,533 29,788 ______________________________________ Total nonperforming assets $681,082 $607,740 $278,426 ====================================== Loans past due 90 days or more and still accruing $596,072 $329,116 $147,604 Nonperforming loans as a % of total loans .41% 0.34% 0.15% Nonperforming assets as a % of total loans, other real estate owned and other assets repossessed 0.44% 0.39% 0.21% ALLL as a % of nonperforming loans 295.72% 348.99% 787.34% _____________________________________
14 Nonperforming assets were $681,082 as of March 31, 1999, an increase of $73,342 from the $607,740 reported for December 31, 1998 and an increase of $402,656 from the $795,501 reported for March 31, 1998. The increase resulted primarily from the addition of a large real estate credit totaling approximately $360,000 in the first quarter of 1999. In addition, approximately $110,000 of another commercial credit added to nonaccrual loans in the second half of 1998 remained in the nonperforming loan total as of March 31, 1999. Loans past due 90 days or more increased from $147,604 in March 1998 to $329,116 in December 1998 and increased to $596,072 as of March 31, 1999. Of the $596,072 in loans past due 90 days or more at March 31, 1999, $189,819 were past due loans reported by the Finance Company. Specific reserves have been established in the ALL to cover potential losses on nonperforming assets. The ALL is analyzed quarterly and additional reserves, if needed, are allocated at that time. Management believes the $1,883,553 in the reserve as of March 31, 1999 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 1 do not represent material credits about which management has serious doubts as to the ability of the borrower to comply with loan repayment terms. 15 Item 6. Exhibits and Reports on Form 8-K Page 16 (a) Exhibits Exihibit Number Document Description 3.1 Amended and Restated Articles of Incorporation of MidSouth Bancorp, Inc. is included as Exhibit 3.1 to the MidSouth's 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 year ended 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. 10.6 MidSouth Bancorp, Inc.'s 1997 Stock Incentive Plan is included as Exhibit 4.5 to MidSouth's definitive Proxy Statement filed April 11, 1997, and is incorporated herein by reference. Page 17 10.7 The MidSouth Bancorp, Inc. Dividend Reinvestment and Stock Purchase Plan is included as Exhibit 4.6 to MidSouth Bancorp, Inc.'s Form S-3D filed on July 25, 1997 and is incorporated herein by reference. 10.8 Loan Agreements and Master Notes for lines of credit established for MidSouth Bancorp, Inc. and Financial Services of the South, Inc. are included as Exhibit 10.7 of MidSouth's Form 10-QSB filed on August 14, 1997 and is incorporated herein by reference. 11 Computation of earnings per share 27 Financial Data Schedule (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: May 15, 1999 ____________ _______________________________ C. R. Cloutier, President & CEO _______________________________ Karen L. Hail, Executive Vice President & CFO _______________________________ Teri S. Stelly, Senior Vice President & Controller
MIDSOUTH BANCORP, INC. AND SUBSIDIARIES EXHIBIT 11 COMPUTATION OF EARNINGS PER SHARE (Unaudited) FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998 AND FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1998 First Quarter First Quarter Year-to-Date March 31, March 31, December 31, BASIC 1999 1998 1998 _____________ _____________ ____________ Earnings: Income applicable to common stock $563,467 $514,988 $2,296,812 ========= ========= ========= Shares: Weighted average number of common shares outstanding 2,439,256 2,381,511 2,410,926 ========= ========= ========= 16593080 Earnings per common share: Income applicable to common stock $0.23 $0.21 $0.95 ========= ========= ========= DILUTED Earnings: Net income $596,850 $552,508 $2,445,783 ========= ========= ========= Weighted average number of common shares outstanding 2,439,256 2,381,511 2,410,926 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 56,604 77,289 72,317 Assuming conversion of preferred stock at a conversion rate of 1 to 2.998 469,343 476,810 475,138 _________ _________ _________ Weighted average number of common shares outstanding, as adjusted 2,965,203 2,935,610 2,958,381 ========= ========= ========= Fully diluted earnings per common share $0.20 $0.19 $0.83 ========= ========= =========
EX-27 2
9 3-MOS DEC-31-1998 MAR-31-1999 11,705,160 16,237 18,600,000 0 54,065,885 19,245,741 20,297,153 155,798,516 1,883,553 270,432,493 250,018,682 0 885,231 3,392,993 0 2,225,522 244,431 13,665,634 270,432,493 3,757,538 945,661 158,633 4,861,832 1,775,266 1,839,692 3,022,140 266,950 0 2,903,093 761,237 596,850 0 0 596,850 .23 .20 4.95 636,943 596,072 0 0 1,860,490 284,180 40,293 1,883,553 40,000 0 1,843,553
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