-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, b8CPIWu73qRgEl6y5GiZj3pee3dcyZeo8aMFnuRIJU2k4GPwzHVL2BSThoCzRHEq dnktbQ3mx+xvrn352QWjvA== 0000948688-95-000010.txt : 19950823 0000948688-95-000010.hdr.sgml : 19950823 ACCESSION NUMBER: 0000948688-95-000010 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950822 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/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-11826 FILM NUMBER: 95565986 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/A 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10QSB AMENDMENT X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended.............. June 30, 1995 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 July 31, 1995 Common stock, $.10 par value 719,650 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, 1995 and 3 December 31, 1994 Statements of Income - Three and Six Months Ended June 30, 1995 and 1994 4 Statement of Stockholders' Equity - Six Months Ended June 30, 1995 5 Statements of Cash Flows - Six Months Ended June 30, 1995 and 1994 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 1995 1994 -------------- -------------- Cash and due from banks $6,010,821 $6,941,989 Federal funds sold 5,550,000 1,700,000 -------------- -------------- Total cash and cash equivalents 11,560,821 8,641,989 Interest bearing deposits in banks 70,427 48,422 Securities available-for-sale, at fair value (cost of $28,318,892 in June 1995 and $32,909,276 in December 1994) $28,027,042 31,369,476 Securities held-to-maturity (estimated market value of $3,255,322 in June 1995 and $372,274 in December 1994) 3,194,728 370,946 Loans, net of allowance for loan and lease losses of $920,116 in June 1995 and $873,934 in December 1994 65,950,076 59,558,341 Bank premises and equipment, net 2,797,534 2,117,512 Other real estate owned, net 180,270 198,350 Accrued interest receivable 608,281 695,604 Goodwill, net 179,324 191,691 Other assets 703,563 773,629 -------------- -------------- Total assets $113,272,066 $103,965,960 ============== ============== LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Non-interest bearing $30,207,714 $31,035,865 Interest bearing 74,416,093 65,454,490 -------------- -------------- Total deposits 104,623,807 96,490,355 Securities sold under repurchase agreements 319,369 301,730 Accrued interest payable 279,192 191,366 Notes payable 1,114,107 1,195,917 Other liabilities 63,256 413,246 -------------- -------------- Total liabilities 106,399,731 98,592,614 -------------- -------------- Commitments and contingencies - - Stockholders' Equity: Preferred Stock, no par value- 5,000,000 authorized, none issued and outstanding - - Common stock, $.10 par value- 5,000,000 shares authorized, 718,695 and 713,988 issued and outstanding on June 30, 1995 and December 31, 1994, respectively 71,869 71,399 Surplus 6,197,796 6,144,070 Unearned ESOP shares (64,611) (73,021) Unrealized gains/losses on securities available-for-sale, net of deferred taxes of $133,000 in June 1995 and $477,000 in December 1994 (223,850) (1,062,800) Retained earnings 891,131 293,698 -------------- -------------- Total stockholders' equity 6,872,335 5,373,346 -------------- -------------- Total liabilities and stockholders' equity $113,272,066 $103,965,960 ============== ============== See notes to consolidated financial statements. - -----------------------------------------------------------------------------------------
3 MIDSOUTH BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
- ----------------------------------------------------------------------------------------------- Three Months Ended Six Months Ended June 30, June 30, 1995 1994 1995 1994 ----------------------------- ----------------------------- INTEREST INCOME: Loans, including fees $1,702,958 $1,350,438 $3,249,413 $2,566,614 Securities and interest-bearing 451,261 436,872 893,133 882,016 Federal funds sold 58,589 50,341 100,399 85,997 ------------ ------------ ------------ ------------ TOTAL 2,212,808 1,837,651 4,242,945 3,534,627 ------------ ------------ ------------ ------------ INTEREST EXPENSE: Interest on deposits 679,544 469,060 1,248,417 920,529 Interest on notes payable 28,250 14,047 57,389 27,442 ------------ ------------ ------------ ------------ TOTAL 707,794 483,107 1,305,806 947,971 ------------ ------------ ------------ ------------ NET INTEREST INCOME 1,505,014 1,354,544 2,937,139 2,586,656 PROVISION FOR LOAN LOSSES 35,000 60,000 90,000 140,000 ------------ ------------ ------------ ------------ NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 1,470,014 1,294,544 2,847,139 2,446,656 ------------ ------------ ------------ ------------ OTHER OPERATING INCOME: Service charges on deposits 256,792 260,548 506,003 493,683 Gains (losses) on securities, net - - - - Other charges and fees 132,191 106,311 240,760 232,559 ------------ ------------ ------------ ------------ TOTAL OTHER INCOME 388,983 366,859 746,763 726,242 ------------ ------------ ------------ ------------ OTHER EXPENSES: Salaries and employee benefits 643,328 557,049 1,231,130 1,100,578 Occupancy expense 244,329 229,582 463,264 427,112 Professional fees 69,527 58,323 112,489 103,970 FDIC assessments 51,940 52,731 103,879 105,461 Marketing expenses 69,518 48,447 122,336 91,984 General and bond insurance 27,010 27,107 54,337 55,193 Data processing expenses 23,687 30,275 48,614 61,295 Postage 28,822 23,801 57,000 50,593 Director fees 25,698 25,984 48,107 49,755 Education and travel 26,223 25,211 48,375 42,924 Printing and supplies 42,808 27,276 73,943 47,029 Telephone 33,470 23,990 56,228 46,309 Expenses on other real estate owned, net 11,976 942 27,982 11,994 Other 119,727 88,620 245,942 198,425 ------------ ------------ ------------ ------------ TOTAL OTHER EXPENSES 1,418,063 1,219,338 2,693,626 2,392,622 ------------ ------------ ------------ ------------ NET INCOME BEFORE INCOME TAXES 440,934 442,065 900,276 780,276 PROVISION FOR INCOME TAXES 141,586 150,415 302,843 265,232 ------------ ------------ ------------ ------------ NET INCOME $299,348 $291,650 $597,433 $515,044 ============ ============ ============ ============ Net income per common share $0.42 $0.41 $0.83 $0.73 ============ ============ ============ ============ Average number of shares outstanding 717,290 708,568 716,190 707,086 ============ ============ ============ ============ See notes to consolidated financial statements.
4 MIDSOUTH BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE SIX MONTHS ENDED JUNE 30, 1995 (UNAUDITED)
- ---------------------------------------------------------------------------------------------------------------------------- UNREALIZED COMMON STOCK ESOP (GAINS) LOSSES ON RETAINED SHARES AMOUNT SURPLUS OBLIGATION SECURITIES AFS EARNINGS TOTAL ---------------------- ----------- ------------ --------------- ------------ ----------- BALANCE, DECEMBER 31, 1994 713,988 $71,399 $6,144,070 ($73,021) ($1,062,800) $293,698 $5,373,346 Issuance of common stock 1,975 197 23,033 23,230 Net income 298,085 298,085 ESOP obligation repayments 5,095 5,095 Net change in unrealized gain/loss on securities available-for-sale, net of tax 470,300 470,300 --------- ---------- ----------- ------------ ---------- ------------ ----------- BALANCE, MARCH 31, 1995 715,963 $71,596 $6,167,103 ($67,926) ($592,500) $591,783 $6,170,056 Issuance of common stock 2,732 273 30,693 30,966 Net income 299,348 299,348 ESOP obligation repayments 3,315 3,315 Net change in unrealized gain/loss on securities available-for-sale, net of tax 368,650 368,650 --------- ---------- ----------- ------------ ---------- ------------ ----------- BALANCE, JUNE 30, 1995 718,695 $71,869 $6,197,796 ($64,611) ($223,850) $891,131 $6,872,335 ========= ========== =========== ============ ========== ============ =========== See notes to consolidated financial statements.
5 MIDSOUTH BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
- ----------------------------------------------------------------------------------------- June 30, 1995 1994 ------------ ------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $597,433 $515,044 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 148,688 138,025 Provision for loan losses 90,000 140,000 Provision for deferred taxes - 270,682 Premium amortization, net 71,002 106,315 Net loss (gain) on sale of other real estate owned 2,135 (2,691) Write-down of other real estate owned 12,400 9,548 Change in accrued interest receivable 87,323 (1,611) Change in accrued interest payable 87,826 15,235 Change in other liabilities (365,116) (58,636) Change in other assets (323,808) (138,238) ------------ ------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 407,883 993,673 ------------ ------------- CASH FLOWS FROM INVESTING ACTIVITIES: Net increase in interest-bearing deposits (22,005) (790) Proceeds from sales of securities available-for-sale - 220,838 Proceeds from maturities and calls of securities available-for-sale 4,692,408 1,319,479 Purchases of securities held-to-maturity (3,002,563) - Purchases of securities available-for-sale - (2,099,202) Loan originations, net of repayments (6,493,980) (5,964,040) Purchases of premises and equipment (816,343) (99,844) Proceeds from sales of other real estate owned 21,545 79,491 ------------ ------------- NET CASH USED IN INVESTING ACTIVITIES (5,620,938) (6,544,068) ------------ ------------- CASH FLOWS FROM FINANCING ACTIVITIES: Net increase in deposits 8,133,452 6,577,108 Net increase (decrease) in repurchase agreements 17,639 (20,967) Issuance of notes payable 1,000,000 563,000 Repayments of notes payable (1,073,400) (60,045) Proceeds from issuance of common stock 54,196 52,684 Payment of fractional shares resulting from stock dividend - (641) ------------ ------------- NET CASH PROVIDED BY FINANCING ACTIVITIES 8,131,887 7,111,139 ------------ ------------- NET INCREASE IN CASH & CASH EQUIVALENTS 2,918,832 1,560,744 CASH & CASH EQUIVALENTS, BEGINNING OF YEAR 8,641,989 10,464,078 ------------ ------------- CASH & CASH EQUIVALENTS, END OF QUARTER $11,560,821 $12,024,822 ============ ============= See notes to consolidated financial statements.
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 and its subsidiary as of June 30, 1995 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 1994 annual report and Form 10-KSB. 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, 1995 1994 ---------- ----------- Balance at beginning of year $874 $824 Provision for loan losses 90 140 Recoveries 43 74 Loans charged off (87) (216) ---------- ----------- Balance at end of quarter $920 $822 ========== =========== 3. LOAN IMPAIRMENT Effective January 1, 1995, MidSouth adopted Statement of Financial Accounting Standards ("SFAS") No. 114, "Accounting by Creditors for Impairment of a Loan," which was subsequently amended by SFAS No. 118, "Accounting by Creditors for Impairment of a Loan - Income Recognition and Disclosures." SFAS No. 114 requires the measurement of impaired loans be based on the present value of expected future cash flows discounted at the loan's effective interest rate, or at the loan's observable market price or the fair market value of its collateral. SFAS No. 114 does not apply to large groups of smaller balance homogeneous loans that are collectively evaluated for impairment. Therefore, MidSouth's smaller balance substandard loans were grouped as homogeneous loans, consisting of residential mortgage loans, consumer loans, and performing commercial and real estate loans under a certain dollar amount. The adoption of SFAS No. 114 did not result in additional provisions for loan losses for the first six months of 1995 due to MidSouth's existing policy of measuring loan impairment, which meets the requirements set forth in SFAS No. 114. SFAS No. 118 allows a creditor to use existing methods for recognizing interest income on impaired loans. The adoption of SFAS No. 118 did not affect the amount of interest income reported for the three months ending June 30, 1995. At June 30, 1995, the recorded investment in loans that are considered to be impaired under Statement 114 was $605,431. Included in this amount is $287,621 of impaired loans for which the related allowance for credit losses is $60,000 and $317,810 of impaired loans that do not have an allowance for credit losses. Two credits were added to total loans considered impaired during the second quarter of 1995 due to management's doubts as to ability of the borrowers to meet principal and interest obligations in full. 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION Overview 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 1994 financial statements, the notes thereto and the related Management's Discussion and Analysis. On July 31, 1995, Sugarland Bancshares, Inc. and its wholly-owned subsidiary, Sugarland State Bank, merged into registrant MidSouth and MidSouth National Bank, respectively, and MidSouth issued 187,286 shares of its cumulative convertible preferred stock to former shareholders of Sugarland Bancshares, Inc. The financial information in this report does not include the results of such transaction, which will be accounted for as a purchase. MidSouth reported earnings for the second quarter of 1995 of $299,348 as compared to the second quarter of 1994 of $291,650. Earnings per share for the second quarter of 1995 were $.42 based on 717,290 average shares outstanding as compared to $.41 on 708,568 average shares outstanding for the second quarter of 1994. Earnings for the six months ending June 30, 1995 totaled $597,433 ($.83 per share) as compared to $515,044 ($.73 per share) for the six months ending June 30, 1994. The improvement in earnings resulted from increased net interest income due primarily to increases in volume and yield on loans. Additionally, a $50,000 decrease in provisions to the Allowance for Loan and Lease Losses ("ALLL") in year-to-date comparison also contributed to the increase in income. Net interest income increased $150,470 and non-interest income increased $22,124 in quarterly comparisons; however, increased expenses resulting from a new branch in Opleousas partially offset the increased income. At June 30, 1995, MidSouth's total assets were $113,272,066, an increase of 8.95% over the $103,965,960 reported at year-end 1994 and an increase of 8.37% over the $104,527,294 at the end of the second quarter of 1994. Total deposits grew from $96,427,304 at June 30, 1994 to $96,490,355 at December 31, 1994 and to $104,623,807 at June 30, 1995. Loans, net of the ALLL, at the current quarter-end were $65,950,076 compared to $59,558,341 at December 31, 1994 and $54,785,834 at June 30, 1994. Provisions to the ALLL in the current quarter totaled $35,000 as compared to $60,000 for quarter ending June 30, 1994. The provisions increased MidSouth's total reserves to $920,116 at the end of the second quarter of 1995. Non-performing loans increased $159,575 from December 31, 1994 to a total of $409,268 or .61% of total loans. The increase results from the addition of two loans about which management has doubts as to the full collectibility of principal and interest. However, management does not anticipate a full loss on either loan. There was no material change in other non- performing assets during the first six months of 1995. 8 MidSouth's annualized return on average equity was 19.69% and annualized return on average assets was 1.11% for the three month period ending June 30, 1995. The leverage capital ratio was 6.74% at the current quarter-end. Earnings Analysis Net Interest Income Average earning assets increased $3.4 million from $92.4 million for the six months ending June 30, 1994 to $95.8 million for the six months ending June 30, 1995. The $3.4 million increase is the net result of a $9.6 million increase in the loan portfolio and a $6.2 million decrease in the volume of securities and federal funds sold. Of the cash flows derived from federal funds sold, maturing securities and principal payments on mortgage- backed securities, $2.8 million was reinvested in non-taxable municipal securities. In addition, a $3.4 million increase in the average volume of deposits provided additional funding for loan growth. Of the $3.4 million increase in the average volume of deposits, $2.5 million represents growth in interest-bearing deposits. Increases in the average loan volume and the average yield on loans more than offset increases in the average volume of interest-bearing liabilities and the average rate paid on interest-bearing liabilities to result in increased net interest income of $350,483 in year-to-date comparison. Average loan volume increased from $52.9 million at June 30, 1994 to $62.5 million at June 30, 1995. This volume increase, combined with a 70 basis point increase in the average yield on loans (from 9.78% to 10.48%) for the same period, contributed $682,799 to the increase in interest income from earning assets. Volume decreases in the securities portfolio and federal funds sold were offset by increases in the average yields on these investments to net a minimal contribution to the increase in income from these earning assets of $25,519. With the rise in interest rates and a subsequent increase in the volume of interest-bearing deposits, interest expense increased $357,835 for the first six months of 1995 as compared to the first six months of 1994. The average rate paid on all interest-bearing liabilities increased 92 basis points (from 2.81% to 3.73%). The average volume of interest-bearing liabilities increased $2.7 million, from $67.9 million to $70.6 million. The increase in volume results primarily from the $2.5 million increase in interest-bearing deposits. Additionally, a $1 million borrowing from the Federal Home Loan Bank ("FHLB") during the first quarter of 1995 contributed to a higher average volume of interest-bearing liabilities for the six months ended June 30, 1995. The $1 million FHLB borrowing was paid in full in April 1995. As a result of these changes in average volumes and average yields on earning assets and interest-bearing liabilities, the net yield on average earning assets increased 54 basis points, from 5.64% as of June 30, 1994 to 6.18% as of June 30, 1995. 9 Non-interest Income MidSouth's primary source of non-interest income, service charges and insufficient funds fees on deposit accounts, increased $12,320 for the six months ended June 30, 1995 as compared to the same period of 1994, primarily due to an increase in the volume of transaction accounts. MidSouth's transaction accounts totaled 8,343 as of June 30, 1995 compared to 7,195 accounts as of June 30, 1994. In quarterly comparisons, income from deposit account charges decreased $3,756 due to a decrease in insufficient funds fees. Other non-interest income increased $25,880 and $8,201 in quarterly and year-to-date comparisons, respectively, primarily due to increases in fees earned through check order income, ATM fees and early withdrawal penalties on certificates of deposit. Fees from early withdrawals of certificates of deposits increased during the first six months of 1995 as customers took advantage of rising short term rates. Non-interest Expense Non-interest expense increased 16.30% and 12.58%for the three and six months ended June 30, 1995, respectively, as compared to the three and six months ended June 30, 1994. The increases result primarily from increases in salaries and employee benefits, occupancy expenses, printing and supplies, and marketing expenses. Additionally, quarterly and year-to-date increases were recorded in the "Other" expenses category, but no significant change was reported for any individual component of that category. Salaries and employee benefits increased $86,279 in quarterly comparisons due primarily to the addition of the Opelousas branch staff in April of 1995. The number of full time equivalent employees increased during the second quarter of 1995 to 89 from 80 as of March 31, 1995 and as compared to 78 as of June 30, 1994. Occupancy expense increased in the three and six month period ending June 30, 1995 as compared to the same period of 1994 due to increases in building lease expense, utilities, and advalorem taxes. Building lease expense and utilities increased primarily due to the lease expense on the Opelousas branch, an increase provided for in the lease agreement on the corporate office location and the leasing of additional space in November of 1994. The additional leased space provided MidSouth with a training facility and additional offices. Advalorem taxes increased due to increases in real property and capital stock values reported. Marketing and promotional expenses increased due to expenses related to community service programs, public relations programs and dues to civic organizations. Printing and office supplies expenses increased due to costs associated with the addition of the Opelousas Branch opened on April 10, 1995. 10 FDIC assessment fees were slightly lower for the three and six months ended June 30, 1995 as compared to the three and six months ended June 30, 1994 due to a lower premium rate and an improvement in risk classification in December 1994. Through review of FDIC correspondence and discussions with its representatives, management anticipates possible significant reductions in FDIC premiums beginning in the fourth quarter of 1995. Balance Sheet Analysis MidSouth ended the second quarter of 1995 with consolidated assets of $113,272,066, an increase of $9.3 million from December 31, 1994 consolidated assets of $103,965,960. The increase in consolidated assets was funded primarily from an increase in interest-bearing deposits which includes $2.3 million in a public funds contract obtained on January 1, 1995. As of June 30, 1995, total deposits increased $8.1 million to $104,623,807 as compared to $96,490,355 at December 31, 1994, primarily due to $5.8 million growth in certificates of deposit and the $2.3 million in public funds. Of the $5.8 million growth in certificates of deposit, approximately $1.8 million represents time deposits from one commercial customer. The remaining $4 million in growth reflects an increase in consumer deposits in the two, three and five year maturity categories. During the first six months of 1995, MidSouth offered competitive rates in the two, three and five year certificates in an effort to retain deposits and to compete with high short term rates being offered by competitors. Total loans increased $6,437,917 during the first six months of 1995 from $60,432,275 reported at December 31, 1994. The majority of the loan growth has been in the consumer loan portfolio which has grown by $4.8 million since year-end. Two million dollars of this growth occurred in the first quarter of 1995 as a result of a loan promotion. The commercial loan portfolio has remained constant as growth in commercial loans secured by real estate has been offset by unexpected payouts of a few larger commercial credits. Competition for quality commercial loans has intensified in the Lafayette area in the past several months, and as a result the magnitude of loan growth in future periods could slow. Activity has increased, however, in other commercial credit programs, including MidSouth's Business Manager accounts receivable program and commercial lease financing. Securities available-for-sale decreased $3.3 million, from $31.3 million at December 31, 1994 to $28.0 million at June 30, 1995. The decrease represents a net result of maturities of securities available-for-sale partially offset by an improvement of $1,247,950 in the market value of the securities available-for- sale. Unrealized losses in the securities available-for-sale portfolio, net of unrealized gains and tax effect, were $223,850 at June 30, 1995, compared to $1,062,800 at December 31, 1994 . 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. 11 Approximately $4.7 million in cash flows resulted from maturities of securities available-for-sale and payments received on mortgage-backed securities during the first six months of 1995. Of the $4.7 million, $3.0 was used to purchase tax-exempt municipal securities and $1.7 million was used to fund loans. Management anticipates additional purchases of tax-exempt municipal securities throughout 1995 as quality offerings become available. Capital Ratios As of June 30, 1995, MidSouth's leverage ratio was 6.74% as compared to 6.45% at December 31, 1994. Tier 1 capital to risk- weighted assets was 10.61% and total capital to risk-weighted assets was 11.87% at the end of the second quarter of 1995. At year-end 1994, Tier 1 capital to risk-weighted assets was 10.95% and total capital to risk-weighted assets was 12.20%. The Tier 1 capital to risk-weighted assets and total capital to risk-weighted assets ratios have decreased due primarily to loan growth in the 100% risk-weight category. Effective December 31, 1994, regulatory agencies announced that the net unrealized gains or losses on securities available-for-sale would not be included in calculations of regulatory capital ratios. Therefore, the value of available-for-sale securities is based on historical cost rather than on market value for purposes of calculating risk- based and leverage capital ratios. 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 Emerging Company Marketplace (the "ECM") for the past five quarters. Effective August 1, 1995, MidSouth's common stock is listed for trading on the regular American Stock Exchange ("AMEX"). 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 1995 1994 ____ ____ 2ND 1ST 4TH 3RD 2ND QTR QTR QTR QTR QTR ___ ___ ___ ___ ___ High Price $12.13 $12.38 $12.50 $11.88 $11.25 Low Price $11.00 $10.88 $11.25 $10.00 $ 8.75 Closing Price $11.75 $10.88 $11.50 $11.13 $10.25 12 Nonperforming Assets and Past Due Loans Table 2 on page 14 summarizes MidSouth's nonaccrual, past due and restructured loans and nonperforming assets. Nonperforming assets were $592,988 as of June 30, 1995, an increase of $144,945 from the $448,043 reported for December 31, 1994 and a increase of $132,460 from the $460,528 reported for June 30, 1994. The increase in the first six months of 1995 results from the addition of two loans placed on nonaccrual. Although management has doubts as to collection of the full amount of principal and interest on the two loans added, a full loss on either loan is not expected. The decrease in Other Real Estate Owned ("OREO") for the twelve months ended June 30, 1995 resulted from the sale of three parcels of OREO in 1994 and two in 1995. During the second quarter of 1995, one parcel valued at $18,000 was added to OREO and the book value of another parcel was decreased by $7,400 due to market valuation. Loans past due 90 days or more increased from $131,416 in June 1994 to $104,060 in December 1994 and to $182,350 as of June 30, 1995. The increase in the first six months of 1995 results primarily from the addition of two commercial loans totaling $65,000 and a $20,000 consumer loan. Management has no serious doubts as to the borrowers' abilities to comply with the loan repayment terms. 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 $920,116 in the reserve as of June 30, 1995 is sufficient to cover potential losses in nonperforming assets and in the loan portfolio. 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. 13 Page 14 TABLE 2 Nonperforming Assets and Loans Past Due 90 Days
- -------------------------------------------------------------------------- June 30 December 31, June 30 1995 1994 1994 - -------------------------------------------------------------------------- Nonperforming loans Nonaccrual loans $404,675 $244,800 $243,736 Restructured loans 4,593 4,893 5,519 ------------ ------------ ------------ Total nonperforming loans 409,268 249,693 249,255 Other real estate owned, net 180,270 198,350 210,723 Other assets repossessed 3,450 - 550 ------------ ------------ ------------ Total nonperforming assets $592,988 $448,043 $460,528 ============ ============ ============ Loans past due 90 days or more and still accruing 182,350 104,060 131,416 Nonperforming loans as a % of total loans 0.61% 0.41% 0.45% Nonperforming assets as a % of total loans, other real estate owned and other assets repossessed 0.88% 0.74% 0.83% ALLL as a % of nonperforming loans 224.82% 350.00% 329.61% - --------------------------------------------------------------------------
Page 15 PART II. OTHER INFORMATION Item 4. Submission of Matters to Vote of Security Holders At the annual meeting of shareholders of MidSouth Bancorp, Inc. held July 19, 1995 at 2:00 p.m., the following directors were elected: Will G. Charbonnet, Sr. Votes cast For 563,304 Withheld 2,248 Clayton Paul Hilliard Votes cast For 560,931 Withheld 4,621 Other directors whose term of office continued after the meeting are as follows: James R. Davis, Jr.; Karen L. Hail; Milton B. Kidd, Jr.; C.R. Cloutier; J. B. Hargroder, M.D. and William M. Simmons Shareholders also approved the issuance of up to 187,286 shares of MidSouth Series A Cumulative, Convertible Preferred Stock in connection with an Agreement and Plan of Merger (collectively, the "Plan") and related merger agreement pursuant to which, on July 31, 1995, among other things: (a) Sugarland State Bank, subsidiary of Sugarland Bancshares, Inc., was merged into MidSouth National Bank, the wholly-owned subsidiary of MidSouth, (b) Sugarland Bancshares, Inc. was merged into MidSouth Bancorp, Inc. and (c) on the effective date of the merger, each outstanding share of common stock of Sugarland Bancshares, Inc. was converted into one share of Preferred Stock. Votes Cast For 467,754 Against 1,995 Abstentions 735 Broker Nonvotes 95,068 No other matters were brought before the meeting on July 19, 1995. 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 Report on Form 10-K for the year ended December 31, 1993, and is incorporated herein by reference. 3.2 Amended and Restated By-Laws of MidSouth Bancorp, Inc. is included as Exhibit 3.2 to the Report of Form 10-K for the year ended December 31, 1993, and is incorporated herein by reference. 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. 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. Page 17 (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 11, 1995 _______________ /s/ C. R. Cloutier _______________________________ C. R. Cloutier, President & CEO /s/ Karen L. Hail _______________________________ Karen L. Hail, Executive Vice President & CFO /s/ Teri s. Stelly _______________________________ Teri S. Stelly, Vice President & Controller EX-27 2
9 3-MOS DEC-31-1994 JUN-30-1995 6,010,821 70,427 5,550,000 0 28,027,042 3,194,728 3,255,322 66,870,192 920,116 113,272,066 104,623,807 319,369 342,448 1,114,107 71,869 0 0 6,800,466 6,872,335 1,702,958 451,261 58,589 2,212,808 679,544 707,794 1,505,014 35,000 0 1,418,063 440,934 299,348 0 0 299,348 .42 .42 5.71 404,675 182,350 4,593 0 873,934 87,168 43,350 920,116 266,222 0 653,894
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