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Investor Contacts: Jim McLemore, CFA President & CEO 337.237.8343 Lorraine Miller, CFA EVP & CFO 337.593.3143
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MidSouth Bancorp, Inc. Reports First Quarter 2019 Results
Quarterly Highlights
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| • | Reported EPS for the first quarter of 2019 was a loss of $0.40 versus a loss of $0.03 for the first quarter of 2018 primarily due to the impact of a $6.6 million impairment charge for a shared national healthcare credit. |
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| • | Bank level classified assets to capital declined from 29% for the fourth quarter 2018 to 25% for the first quarter of 2019 due to the successful execution of a $16.9 million loan sale partially offset by the $6.6 million impairment mentioned above. |
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| • | FTE net interest margin of 3.89% decreased 46 basis points from fourth quarter 2018 which included 18 basis points of accelerated loan accretion, and 13 basis points impact due to the reversal of accrued interest in the first quarter of 2019 for a shared national healthcare credit. |
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| • | Funding costs of 55 basis points remain below market averages with core deposits comprising a strong 88% of Total Deposits. |
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| • | Tangible common equity to tangible assets at March 31, 2019 was 8.0%. |
LAFAYETTE, LA., April 30, 2019/BusinessWire/ -- MidSouth Bancorp, Inc. (“MidSouth”) (NYSE:MSL) today reported a quarterly net loss available to common shareholders of $6.64 million for the three months ended March 31, 2019, compared to net loss available to common shareholders of $450,000 reported for the three months ended March 31, 2018 and $23.1 million in net loss available to common shareholders for the fourth quarter of 2018. The first quarter loss is primarily due to the $6.6 million impairment charge for a shared national healthcare credit. MidSouth has one additional pass rated shared national credit for $10.3 million with a company headquartered in the Acadiana market. The first quarter of 2018 included after-tax
charges of $691,000 resulting from the transfer of loans to held for sale, $3.1 million for regulatory remediation costs, $115,000 related to branch closures during the quarter and $70,000 for legal fees related to a bulk loan sale. The fourth quarter of 2018 included an after-tax charge of $3.9 million for regulatory remediation costs, a $11.4 million tax-related charge for the establishment of a valuation allowance to fully reserve against net deferred tax assets given the company’s cumulative pretax loss position. Excluding 2018 non-operating expenses, a loss of $0.40 per diluted share was reported for the first quarter of 2019, compared to diluted loss per common share of $0.73 for the fourth quarter of 2018 and diluted income per share of $0.21 for the first quarter of 2018.
Balance Sheet
Consolidated assets decreased $112.4 million to $1.7 billion at March 31, 2019 from $1.9 billion at March 31, 2018 and essentially unchanged from $1.7 billion at December 31, 2018. Our stable core deposit base, which excludes time deposits, totaled $1.3 billion at March 31, 2019 and December 31, 2018 and accounted for 87.5% and 87.6% of deposits at March 31, 2019 and December 31, 2018, respectively. Net loans totaled $868.9 million at March 31, 2019, compared to $882.4 million at December 31, 2018 and $1.1 billion at March 31, 2018. Loans held for sale of $1.5 million at March 31, 2019 declined from $23.9 million at December 31, 2018, due to the successful execution of a $16.9 million loan sale in the first quarter of 2019.
MidSouth’s Tier 1 leverage capital ratio was 11.60% at March 31, 2019, compared to 11.45% at December 31, 2018. Tier 1 risk-based capital and total risk-based capital ratios were 18.22% and 19.49% at March 31, 2019, respectively, compared to 17.79% and 19.04% at December 31, 2018, respectively. Tier 1 common equity to total risk-weighted assets at March 31, 2019 was 12.48%, compared to 12.20% at December 31, 2018. Tangible common equity totaled $135.9 million at March 31, 2019, compared to $136.4 million at December 31, 2018. Tangible book value per share at March 31, 2019 was $8.13 compared to $8.20 at December 31, 2018.
Asset Quality
Nonperforming assets totaled $23.9 million at March 31, 2019, a decrease of $6.6 million compared to $30.5 million reported at December 31, 2018. The decrease is primarily attributable to the sale of $16.9 million of nonperforming loans offset by a $13.2 million increase in non-
accrual loans due primarily to a $11.4 million shared national healthcare credit. Allowance coverage for nonperforming loans decreased to 106.85% at March 31, 2019, compared to 195.40% at December 31, 2018. The ALLL/total loans ratio was 2.77% at March 31, 2019 and 1.94% at December 31, 2018. The ratio of annualized net charge-offs to total loans decreased to 0.11% for the three months ended March 31, 2019 compared to 8.45% for the three months ended December 31, 2018, primarily as a result of the charge-offs taken in the fourth quarter due to the impending bulk loan sale.
Total nonperforming assets, excluding nonperforming loans held for sale to total loans plus ORE and other assets repossessed was 2.68% at March 31, 2019 compared to 3.39% at December 31, 2018. Loans classified as troubled debt restructurings, accruing (“TDRs, accruing”) totaled $713,000 at March 31, 2019 compared to $1.3 million at December 31, 2018. Total classified assets, including ORE, were $44.4 million at March 31, 2019 compared to $51.2 million at December 31, 2018. The balance of classified loans decreased as a result of principal reductions through payoffs and/or pay-downs and settlements and the completion of problem asset sales of $18.3 million offset by the downgrade of a shared national credit in the healthcare industry in the amount of $11.4 million. The classified assets to capital ratio at MidSouth Bank was 25% at March 31, 2019 versus 29% at December 31, 2018.
More information on our energy loan portfolio and other information on quarterly results can be found on our website at MidSouthBank.com under Investor Relations/Presentations.
First Quarter 2019 vs. Fourth Quarter 2018 Earnings Comparison
MidSouth reported a net loss available to common shareholders of $6.6 million for the three months ended March 31, 2019, compared to net loss available to common shareholders of $23.1 million for the three months ended December 31, 2018. Revenues from consolidated operations decreased $324,000 from $24.0 million in the fourth quarter of 2018 to $23.7 million in the first quarter 2019, primarily as a result of the gain on sale of loans of $1.3 million and gain on sale of securities of $373,000 offset by a decrease in loan income of $1.5 million.
The first quarter of 2019 did not include any remediation costs. The fourth quarter of 2018 included a non-recurring charge of $5.0 million of regulatory remediation costs. Excluding these non-operating expenses, noninterest expense increased $212,000 and consisted primarily of a
continued investment in compliance staffing and an $805,000 offset due to lower professional fees.
The provision for loan losses decreased $4.4 million from the fourth quarter 2018 to the first quarter 2019. A $11.4 million tax-related charge was recorded during the fourth quarter of 2018 associated with the establishment of a valuation reserve against the net deferred tax assets. Excluding this adjustment, we recorded income tax expense of $7.6 million for the fourth quarter of 2018, compared to no income tax expense for the first quarter of 2019.
Dividends on the Series B Preferred Stock issued to the U.S. Treasury as a result of our participation in the Small Business Lending Fund totaled $720,000 for the first quarter of 2019 and the fourth quarter of 2018 based on a dividend rate of 9%. Dividends on the Series C Preferred Stock issued with the December 28, 2012 acquisition of PSB Financial Corporation totaled $90,000 for the three months ended March 31, 2019 and December 31, 2018.
Fully taxable-equivalent (“FTE”) net interest income decreased $1.9 million from the fourth quarter 2018 to the first quarter 2019, primarily due to a decrease in interest income on loans and interest bearing deposits with other banks of $1.5 million and $360,000, respectively. Higher loan yields for the fourth quarter 2018 are reflective of management’s recognition of the remaining PSB loan accretion discounts into income. Excluding these purchase accounting adjustments, the loan yield decreased 11 bps, from 5.85% to 5.74% during the same period. The average yield on investment securities decreased 30 basis points, from 3.16% to 2.86%, due to a repositioning of the bond portfolio through the sale of higher yielding municipal and corporate bonds and the timing impact of the sales and reinvestments on average balances. The average yield on total earning assets decreased 54 bps for the same period, from 4.87% to 4.41%, respectively. The FTE net interest margin decreased 53 bps from 4.35% for the fourth quarter 2018 to 3.89% for the first quarter of 2019. Excluding purchase accounting adjustments, the FTE net interest margin decreased 22 bps, from 4.04% for the fourth quarter of 2018 to 3.89% for the first quarter of 2019.
First Quarter 2019 vs. First Quarter 2018 Earnings Comparison
MidSouth reported a net loss available to common shareholders of $6.6 million for the three months ended March 31, 2019, compared to net loss available to common shareholders of
$450,000 for the three months ended March 31, 2018. Revenues from consolidated operations decreased $108,000 in quarterly comparison, from $23.8 million for the three months ended March 31, 2018 to $23.7 million for the three months ended March 31, 2019. Net interest income decreased $2.0 million in quarterly comparison, resulting from a $1.6 million decrease in interest income primarily driven by lower loan levels, in addition to a higher interest expense of $435,000 reflecting the impact of higher interest rates. Operating noninterest income decreased $203,000 which excludes $1.6 million gains on assets sales including loans and investments.
Excluding remediation expenses of $3.9 million for the first quarter of 2018, noninterest expenses increased $1.9 million in quarterly comparison and consisted primarily of a $2.0 million increase in salaries and employee benefits costs. The provision for loan losses increased $7.6 million in quarterly comparison, from $0 for the three months ended March 31, 2018 to $7.6 million the three months ended March 31, 2019. We recorded an income tax benefit of $34,000 for the first quarter of 2018 versus no benefit for the first quarter of 2019.
Dividends on preferred stock totaled $810,000 for the three months ended March 31, 2019 and 2018. Dividends on the Series B Preferred Stock were $720,000 for the three months ended March 31, 2019 and 2018. Dividends on the Series C Preferred Stock totaled $90,000 for the three months ended March 31, 2019 and 2018.
Interest income on loans decreased $3.0 million primarily due to a $255.4 million decline in average loans given ongoing efforts to reduce problem loans and slower loan originations due to an internal focus on improving loan portfolio management and loan operations.
Investment securities totaled $469.8 million, or 26.9% of total assets at March 31, 2019, versus $367.2 million, or 19.8% of total assets at March 31, 2018. The investment portfolio had an effective duration of 2.6 years and a net unrealized loss of $70,000 at March 31, 2019. FTE interest income on investments increased $947,000 in prior year quarterly comparison. The average volume of investment securities increased $90.0 million in prior year quarterly comparison, and the average tax equivalent yield on investment securities increased 32 basis points, from 2.54% to 2.86%.
The average yield on all earning assets decreased 15 basis points in prior year quarterly comparison, from 4.56% for the first quarter of 2018 to 4.41% for the first quarter of 2019, due to a less favorable mix of earning assets given the decline in loans on a year-over-year basis.
Interest expense increased $435,000 in prior year quarterly comparison primarily due to a $442,000 increase in interest expense on deposits and a $67,000 increase in interest expense on junior subordinated debt, which were partially offset by a $74,000 decrease in interest expense on repurchase agreements and FHLB borrowings.
As a result of these changes in volume and yield on earning assets and interest-bearing liabilities, the FTE net interest margin decreased 23 basis points, from 4.12% for the first quarter of 2018 to 3.89% for the first quarter of 2019.
About MidSouth Bancorp, Inc.
MidSouth Bancorp, Inc. is a bank holding company headquartered in Lafayette, Louisiana, with assets of $1.7 billion as of March 31, 2019. MidSouth Bancorp, Inc. trades on the NYSE under the symbol “MSL.” Through its wholly owned subsidiary, MidSouth Bank, N.A., MidSouth offers a full range of banking services to commercial and retail customers in Louisiana and Texas. MidSouth Bank currently has 42 locations in Louisiana and Texas and is connected to a worldwide ATM network that provides customers with access to more than 55,000 surcharge-free ATMs. Additional corporate information is available at MidSouthBank.com.
Non-GAAP Financial Measures
This press release, including the accompanying financial statement tables, contains financial information determined by methods other than in accordance with generally accepted accounting principles, or GAAP. This financial information includes certain operating performance measures, which exclude charges that are not considered part of recurring operations. Non-GAAP measures in this press release include, but are not limited to, descriptions such as “operating noninterest income,” “operating (loss) earnings per share,” “tangible common equity”, “tangible book value per share,” “operating return on average common equity,” “operating return on average assets,” and “operating efficiency ratio.” In addition, this press release, consistent with SEC Industry Guide 3, presents total revenue, net interest income, net interest margin, "non-operating expenses" and efficiency ratios on a fully taxable equivalent (“FTE”) basis, and ratios on an annualized basis. The FTE basis adjusts for the tax-favored status of net interest income from certain loans and investments using a federal tax rate of 21% for all periods beginning on or after January 1, 2018, as well as state income taxes, where applicable, to increase tax-exempt interest income to a taxable-equivalent basis. MidSouth believes this measure to be the preferred industry measurement of net interest income and it enhances comparability of net interest income arising from taxable and tax-exempt sources.
We use non-GAAP measures because we believe they are useful for evaluating our financial condition and performance over periods of time, as well as in managing and evaluating our business and in discussions about our performance. We also believe these non-GAAP financial measures provide users of our financial information with a meaningful measure for assessing our financial condition as well as comparison to financial results for prior periods. These measures
should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP, and are not necessarily comparable to non-GAAP measures that may be presented by other companies. To the extent applicable, reconciliations of these non-GAAP measures to the most directly comparable measures as reported in accordance with GAAP are included with the accompanying financial statement tables.
Forward-Looking Statements
Certain statements contained herein are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties. These statements include, among others, statements regarding expected future performance and shareholder value. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “will,” “would,” “could,” “should,” “guidance,” “potential,” “continue,” “project,” “forecast,” “confident,” and similar expressions are typically used to identify forward-looking statements.
These statements are based on assumptions and assessments made by management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. Any forward-looking statements are not guarantees of our future performance and are subject to risks and uncertainties and may be affected by various factors that may cause actual results, developments and business decisions to differ materially from those in the forward-looking statements. Factors that might cause such a difference include, among other matters, changes in interest rates and market prices that could affect the net interest margin, asset valuation, and expense levels; changes in local economic and business conditions in the markets we serve, including, without limitation, changes related to the oil and gas industries that could adversely affect customers and their ability to repay borrowings under agreed upon terms, adversely affect the value of the underlying collateral related to their borrowings, and reduce demand for loans; increases in competitive pressure in the banking and financial services industries; increased competition for deposits and loans which could affect compositions, rates and terms; changes in the levels of prepayments received on loans and investment securities that adversely affect the yield and value of the earning assets; our ability to successfully implement and manage our strategic initiatives; costs and expenses associated with our strategic initiatives and regulatory remediation efforts and possible changes in the size and components of the expected costs and charges associated with our strategic initiatives and regulatory remediation efforts; our ability to realize the anticipated benefits and cost savings from our strategic initiatives within the anticipated time frame, if at all; the ability of the Company to comply with the terms of the formal agreement and the consent order with the Office of the Comptroller of the Currency; risk of noncompliance with and further enforcement actions regarding the Bank Secrecy Act and other anti-money laundering statues and regulations; credit losses due to loan concentration, particularly our energy lending and commercial real estate portfolios; a deviation in actual experience from the underlying assumptions used to determine and establish our allowance for loan and lease losses (“ALLL”), which could result in greater than expected loan losses; the adequacy of the level of our ALLL and the amount of loan loss provisions required in future periods including the impact of implementation of the new CECL (current expected credit loss) methodology; future examinations by our regulatory authorities, including the possibility that the regulatory authorities may, among other things, impose additional enforcement actions or conditions on our operations, require additional regulatory remediation efforts or require us to increase our allowance for loan losses or write-down assets; changes in the availability of funds resulting from reduced liquidity or increased costs; the timing and impact of future acquisitions or divestitures, the success or failure of integrating acquired operations, and the ability to capitalize on growth opportunities upon entering new markets; the ability to acquire, operate, and maintain effective and efficient operating systems; the identified material weaknesses in our internal control over financial reporting; increased asset levels and changes in the composition of assets that would impact capital levels and regulatory capital ratios; loss of critical personnel and the challenge of hiring qualified personnel at reasonable compensation levels; legislative and regulatory changes, including the impact of regulations under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and other changes in banking, securities and tax laws and regulations and their application by our regulators, changes in the scope and cost of FDIC insurance and other coverage; regulations and restrictions resulting from our participation in government-sponsored programs such as the U.S. Treasury’s Small Business Lending Fund, including potential retroactive changes in such programs; changes in accounting principles, policies, and guidelines applicable to financial holding companies and banking; increases in cybersecurity risk, including potential business disruptions or financial losses; acts of war, terrorism, cyber intrusion, weather, or other catastrophic events beyond our control; and other factors discussed under the heading “Risk Factors” in MidSouth’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on March 18, 2019 and in its other filings with the SEC.
MidSouth does not undertake any obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information, future events or otherwise, except as required by law.
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| MIDSOUTH BANCORP, INC. and SUBSIDIARIES |
| Condensed Consolidated Financial Information (unaudited) |
| (in thousands except per share data) |
| | | | | | |
| | | Quarter | | Quarter | | Quarter | | Quarter | | Quarter |
| | | Ended | | Ended | | Ended | | Ended | | Ended |
| EARNINGS DATA | | March 31 | | December 31 | | September 30 | | June 30 | | March 31 |
| Total interest income | | $ | 17,445 |
| | $ | 19,340 |
| | $ | 18,436 |
| | $ | 18,739 |
| | $ | 18,997 |
|
| Total interest expense | | 2,062 |
| | 2,097 |
| | 1,970 |
| | 1,814 |
| | 1,627 |
|
| Net interest income | | 15,383 |
| | 17,243 |
| | 16,466 |
| | 16,925 |
| | 17,370 |
|
| Provision for loan losses | | 7,600 |
| | 12,000 |
| | 4,300 |
| | 440 |
| | — |
|
| Non-interest income | | 6,273 |
| | 4,702 |
| | 5,090 |
| | 4,882 |
| | 4,829 |
|
| Non-interest expense | | 19,886 |
| | 24,644 |
| | 23,527 |
| | 22,273 |
| | 21,873 |
|
| (Loss) earnings before income taxes | | (5,830 | ) | | (14,699 | ) | | (6,271 | ) | | (906 | ) | | 326 |
|
| Income tax (benefit) expense | | — |
| | 7,610 |
| | (1,373 | ) | | (237 | ) | | (34 | ) |
| Net (loss) earnings | | (5,830 | ) | | (22,309 | ) | | (4,898 | ) | | (669 | ) | | 360 |
|
| Dividends on preferred stock | | 810 |
| | 809 |
| | 810 |
| | 810 |
| | 810 |
|
| Net loss available to common shareholders | | $ | (6,640 | ) | | $ | (23,118 | ) | | $ | (5,708 | ) | | $ | (1,479 | ) | | $ | (450 | ) |
| | | | | | | | | | | |
| PER COMMON SHARE DATA | | | | | | | | | | |
| Basic loss per share | | (0.40 | ) | | (1.39 | ) | | (0.34 | ) | | (0.09 | ) | | (0.03 | ) |
| Diluted loss per share | | (0.40 | ) | | (1.39 | ) | | (0.34 | ) | | (0.09 | ) | | — |
|
| Diluted (loss) earnings per share, operating (Non-GAAP)(*) | | (0.40 | ) | | (0.66 | ) | | (0.08 | ) | | 0.17 |
| | 0.21 |
|
| Quarterly dividends per share | | 0.01 |
| | 0.01 |
| | 0.01 |
| | 0.01 |
| | 0.01 |
|
| Book value per share at end of period | | 10.78 |
| | 10.88 |
| | 12.05 |
| | 12.50 |
| | 12.62 |
|
| Tangible book value per share at period end (Non-GAAP)(*) | | 8.13 |
| | 8.20 |
| | 9.35 |
| | 9.78 |
| | 9.89 |
|
| Market price per share at end of period | | 11.41 |
| | 10.60 |
| | 15.40 |
| | 13.25 |
| | 12.65 |
|
| Shares outstanding at period end | | 16,715,671 |
| | 16,641,017 |
| | 16,641,105 |
| | 16,619,894 |
| | 16,621,811 |
|
| Weighted average shares outstanding: | | | | | | | | | | |
| Basic | | 16,673,818 |
| | 16,640,174 |
| | 16,557,664 |
| | 16,525,571 |
| | 16,495,438 |
|
| Diluted | | 16,673,818 |
| | 16,640,174 |
| | 16,557,664 |
| | 16,525,571 |
| | 16,495,438 |
|
| AVERAGE BALANCE SHEET DATA | | | | | | | | | | |
| Total assets | | $ | 1,742,686 |
| | $ | 1,791,990 |
| | $ | 1,830,834 |
| | $ | 1,860,906 |
| | $ | 1,860,070 |
|
| Loans and leases | | 904,293 |
| | 944,545 |
| | 1,020,834 |
| | 1,109,371 |
| | 1,159,671 |
|
| Total deposits | | 1,440,961 |
| | 1,476,211 |
| | 1,503,528 |
| | 1,514,321 |
| | 1,495,907 |
|
| Total common equity | | 182,231 |
| | 202,796 |
| | 209,010 |
| | 210,291 |
| | 214,183 |
|
| Total tangible common equity(*) | | 137,793 |
| | 158,083 |
| | 164,020 |
| | 165,024 |
| | 168,629 |
|
| Total equity | | 223,203 |
| | 243,768 |
| | 249,997 |
| | 251,278 |
| | 255,170 |
|
| SELECTED RATIOS | | | | | | | | | | |
| Return on average assets, operating(*)(**) | | (1.52 | )% | | (2.70 | )% | | (0.30 | )% | | 0.59 | % | | 0.76 | % |
| Return on average common equity, operating(*)(**) | | (14.57 | )% | | (23.83 | )% | | (2.60 | )% | | 5.22 | % | | 6.59 | % |
| Return on average tangible common equity, operating(*)(**) | | (19.28 | )% | | (30.57 | )% | | (3.31 | )% | | 6.65 | % | | 8.37 | % |
| Efficiency ratio, operating(*) | | 91.83 | % | | 89.35 | % | | 83.36 | % | | 77.38 | % | | 75.57 | % |
| Average loans to average deposits | | 62.76 | % | | 63.98 | % | | 67.90 | % | | 73.26 | % | | 77.52 | % |
| Tier 1 leverage capital ratio | | 11.60 | % | | 11.45 | % | | 12.53 | % | | 12.71 | % | | 12.80 | % |
| CREDIT QUALITY | | | | | | | | | | |
| Allowance for loan and lease losses (ALLL) as a % of total loans | | 2.77 | % | | 1.94 | % | | 2.54 | % | | 2.22 | % | | 2.23 | % |
| Nonperforming assets to tangible equity + ALLL | | 14.89 | % | | 6.44 | % | | 23.75 | % | | 32.99 | % | | 36.86 | % |
| Nonperforming assets to total loans, other real estate owned and other repossessed assets | | 2.67 | % | | 1.12 | % | | 5.45 | % | | 7.07 | % | | 7.47 | % |
| QTD net charge-offs to total loans (**) | | 0.11 | % | | 8.45 | % | | 1.40 | % | | 0.87 | % | | 0.54 | % |
| (**) Annualized | | | | | | | | | | |
| (*) See reconciliation of Non-GAAP financial measures on pages 18-20. |
|
| | | | | | | | | | | | | | | | | | | | |
| MIDSOUTH BANCORP, INC. and SUBSIDIARIES |
| Consolidated Balance Sheets (unaudited) |
| (in thousands) |
| | | | | | | |
| | | March 31, | | December 31, | | September 30, | | June 30, | | March 31, |
| | | 2019 | | 2018 | | 2018 | | 2018 | | 2018 |
| Assets | | | | | | | | | | |
| Cash and cash equivalents | | $ | 243,430 |
| | $ | 205,371 |
| | $ | 302,888 |
| | $ | 278,776 |
| | $ | 211,486 |
|
| Securities available-for-sale | | 434,679 |
| | 437,754 |
| | 352,606 |
| | 308,937 |
| | 293,970 |
|
| Securities held-to-maturity | | 35,107 |
| | 37,759 |
| | 64,893 |
| | 67,777 |
| | 73,255 |
|
| Total investment securities | | 469,786 |
| | 475,513 |
| | 417,499 |
| | 376,714 |
| | 367,225 |
|
| Other investments | | 17,083 |
| | 16,614 |
| | 16,508 |
| | 14,927 |
| | 12,896 |
|
| Loans held for sale | | 1,511 |
| | 23,876 |
| | — |
| | — |
| | 1,117 |
|
| Total loans | | 893,650 |
| | 899,785 |
| | 962,743 |
| | 1,057,963 |
| | 1,137,255 |
|
| Allowance for loan losses | | (24,779 | ) | | (17,430 | ) | | (24,450 | ) | | (23,514 | ) | | (25,371 | ) |
| Loans, net | | 868,871 |
| | 882,355 |
| | 938,293 |
| | 1,034,449 |
| | 1,111,884 |
|
| Premises and equipment | | 55,097 |
| | 55,382 |
| | 56,006 |
| | 56,834 |
| | 57,848 |
|
| Lease right of use asset | | 8,263 |
| | — |
| | — |
| | — |
| | — |
|
| Goodwill and other intangibles | | 44,303 |
| | 44,580 |
| | 44,856 |
| | 45,133 |
| | 45,409 |
|
| Deferred Tax Asset | | 11,207 |
| | 11,373 |
| | 8,452 |
| | 6,659 |
| | 4,854 |
|
| Deferred Tax Asset Valuation Allowance | | (11,207 | ) | | (11,373 | ) | | — |
| | — |
| | — |
|
| Other assets | | 36,991 |
| | 39,707 |
| | 41,752 |
| | 45,425 |
| | 45,036 |
|
| Total assets | | $ | 1,745,335 |
| | $ | 1,743,398 |
| | $ | 1,826,254 |
| | $ | 1,858,917 |
| | $ | 1,857,755 |
|
| | | | | | | | | | | |
| Liabilities and Shareholders' Equity | | | | | | | | | | |
| Non-interest bearing deposits | | $ | 418,321 |
| | $ | 383,167 |
| | $ | 425,696 |
| | $ | 419,517 |
| | $ | 427,504 |
|
| Interest-bearing deposits | | 1,027,314 |
| | 1,068,904 |
| | 1,083,433 |
| | 1,103,503 |
| | 1,076,433 |
|
| Total deposits | | 1,445,635 |
| | 1,452,071 |
| | 1,509,129 |
| | 1,523,020 |
| | 1,503,937 |
|
| Securities sold under agreements to repurchase | | 11,968 |
| | 11,220 |
| | 13,676 |
| | 14,886 |
| | 33,026 |
|
| Lease liability | | 8,203 |
| | — |
| | — |
| | — |
| | — |
|
| FHLB advances | | 27,500 |
| | 27,500 |
| | 27,506 |
| | 37,511 |
| | 37,516 |
|
| Junior subordinated debentures | | 22,167 |
| | 22,167 |
| | 22,167 |
| | 22,167 |
| | 22,167 |
|
| Other liabilities | | 8,696 |
| | 8,450 |
| | 12,325 |
| | 12,661 |
| | 10,272 |
|
| Total liabilities | | 1,524,169 |
| | 1,521,408 |
| | 1,584,803 |
| | 1,610,245 |
| | 1,606,918 |
|
| Total shareholders' equity | | 221,166 |
| | 221,990 |
| | 241,451 |
| | 248,672 |
| | 250,837 |
|
| Total liabilities and shareholders' equity | | $ | 1,745,335 |
| | $ | 1,743,398 |
| | $ | 1,826,254 |
| | $ | 1,858,917 |
| | $ | 1,857,755 |
|
|
| | | | | | | | | | | | | | | | | | | | |
| MIDSOUTH BANCORP, INC. and SUBSIDIARIES | | | | | |
| Consolidated Statements of Operation (unaudited) | | | | |
| (in thousands except per share data) | | | | |
| | | | | | | | | | | |
| | | Three Months Ended |
| | | 3/31/2019 | | 12/31/2018 | | 9/30/2018 | | 6/30/2018 | | 3/31/2018 |
| Interest income: | | | | | | | | | | |
| Loans, including fees | | $ | 12,987 |
| | $ | 14,536 |
| | $ | 14,590 |
| | $ | 15,344 |
| | $ | 16,015 |
|
| Investment securities | | 3,326 |
| | 3,230 |
| | 2,429 |
| | 2,370 |
| | 2,363 |
|
| Other interest income | | 1,132 |
| | 1,574 |
| | 1,417 |
| | 1,025 |
| | 619 |
|
| Total interest income | | 17,445 |
| | 19,340 |
| | 18,436 |
| | 18,739 |
| | 18,997 |
|
| Interest expense: | | | | | | | | | | |
| Deposits | | 1,680 |
| | 1,669 |
| | 1,602 |
| | 1,410 |
| | 1,238 |
|
| Securities sold under agreement to repurchase | | 14 |
| | 17 |
| | 16 |
| | 25 |
| | 40 |
|
| FHLB borrowings | | 81 |
| | 136 |
| | 81 |
| | 120 |
| | 129 |
|
| Other borrowings | | 287 |
| | 275 |
| | 271 |
| | 259 |
| | 220 |
|
| Total interest expense | | 2,062 |
| | 2,097 |
| | 1,970 |
| | 1,814 |
| | 1,627 |
|
| Net interest income | | 15,383 |
| | 17,243 |
| | 16,466 |
| | 16,925 |
| | 17,370 |
|
| Provision for loan losses | | 7,600 |
| | 12,000 |
| | 4,300 |
| | 440 |
| | — |
|
| Net interest income after provision for loan losses | | 7,783 |
| | 5,243 |
| | 12,166 |
| | 16,485 |
| | 17,370 |
|
| Noninterest income: | | | | | | | | | | |
| Service charges on deposit accounts | | 1,793 |
| | 1,414 |
| | 2,159 |
| | 2,065 |
| | 2,206 |
|
| Gain (loss) on securities, net | | 373 |
| | (49 | ) | | — |
| | — |
| | — |
|
| Gain on sale of loans, net | | 1,274 |
| | — |
| | — |
| | — |
| | — |
|
| ATM and debit card income | | 1,925 |
| | 2,624 |
| | 1,796 |
| | 1,877 |
| | 1,784 |
|
| Other charges and fees | | 908 |
| | 713 |
| | 1,135 |
| | 940 |
| | 839 |
|
| Total noninterest income | | 6,273 |
| | 4,702 |
| | 5,090 |
| | 4,882 |
| | 4,829 |
|
| Noninterest expense: | | | | | | | | | | |
| Salaries and employee benefits | | 9,700 |
| | 8,895 |
| | 7,762 |
| | 7,916 |
| | 7,719 |
|
| Occupancy expense | | 3,307 |
| | 3,186 |
| | 3,077 |
| | 3,193 |
| | 3,045 |
|
| ATM and debit card | | 624 |
| | 678 |
| | 653 |
| | 648 |
| | 576 |
|
| Legal and professional fees | | 1,883 |
| | 3,457 |
| | 2,543 |
| | 1,100 |
| | 1,689 |
|
| Remediation expense | | — |
| | 4,970 |
| | 5,502 |
| | 5,323 |
| | 3,926 |
|
| Other non-interest expense | | 4,372 |
| | 3,458 |
| | 3,990 |
| | 4,093 |
| | 4,918 |
|
| Total noninterest expense | | 19,886 |
| | 24,644 |
| | 23,527 |
| | 22,273 |
| | 21,873 |
|
| Earnings (loss) before income taxes | | (5,830 | ) | | (14,699 | ) | | (6,271 | ) | | (906 | ) | | 326 |
|
| Income tax (benefit)/expense | | — |
| | 7,610 |
| | (1,373 | ) | | (237 | ) | | (34 | ) |
| Net (loss) earnings | | (5,830 | ) | | (22,309 | ) | | (4,898 | ) | | (669 | ) | | 360 |
|
| Dividends on preferred stock | | 810 |
| | 809 |
| | 810 |
| | 810 |
| | 810 |
|
| Net (loss) earnings available to common shareholders | | $ | (6,640 | ) | | $ | (23,118 | ) | | $ | (5,708 | ) | | $ | (1,479 | ) | | $ | (450 | ) |
| (Loss) earnings per common share, diluted | | $ | (0.40 | ) | | $ | (1.39 | ) | | $ | (0.34 | ) | | $ | (0.09 | ) | | $ | (0.03 | ) |
| Operating (loss) earnings per common share, diluted on pages 18-20 (Non-GAAP)(*) | | $ | (0.40 | ) | | $ | (0.73 | ) | | $ | (0.08 | ) | | $ | 0.17 |
| | $ | 0.21 |
|
| (*) See reconciliation of Non-GAAP financial measures. |
|
| | | | | | | | | | | | | | | | | | | | |
| MIDSOUTH BANCORP, INC. and SUBSIDIARIES | | | | | |
| Loans, Deposits and Asset Quality (unaudited) | | | | |
| (in thousands) | | | | |
| COMPOSITION OF LOANS | | March 31, 2019 | | December 31, 2018 | | September 30, 2018 | | June 30, 2018 | | March 31, 2018 |
| Commercial, financial, and agricultural | | $ | 255,410 |
| | $ | 267,340 |
| | $ | 294,971 |
| | $ | 354,944 |
| | $ | 401,048 |
|
| Real estate - construction | | 89,723 |
| | 89,621 |
| | 90,444 |
| | 98,108 |
| | 94,679 |
|
| Real estate - commercial | | 376,523 |
| | 368,449 |
| | 394,416 |
| | 414,526 |
| | 438,779 |
|
| Real estate - residential | | 130,700 |
| | 130,320 |
| | 136,151 |
| | 141,104 |
| | 145,671 |
|
| Consumer and other | | 40,784 |
| | 43,506 |
| | 46,169 |
| | 48,649 |
| | 56,386 |
|
| Lease financing receivable | | 510 |
| | 549 |
| | 592 |
| | 632 |
| | 692 |
|
| Total loans | | $ | 893,650 |
| | $ | 899,785 |
| | $ | 962,743 |
| | $ | 1,057,963 |
| | $ | 1,137,255 |
|
| | | | | | | | | | | |
| COMPOSITION OF DEPOSITS | | March 31, 2019 | | December 31, 2018 | | September 30, 2018 | | June 30, 2018 | | March 31, 2018 |
| Noninterest bearing | | 418,321 |
| | $ | 383,167 |
| | $ | 425,696 |
| | $ | 419,517 |
| | $ | 427,504 |
|
| NOW & other | | 410,792 |
| | 400,625 |
| | 442,487 |
| | 461,726 |
| | 459,394 |
|
| Money market/savings | | 436,317 |
| | 488,181 |
| | 454,867 |
| | 466,711 |
| | 441,801 |
|
| Time deposits of less than $100,000 | | 121,460 |
| | 121,703 |
| | 125,363 |
| | 111,758 |
| | 113,665 |
|
| Time deposits of $100,000 or more | | 58,745 |
| | 58,395 |
| | 60,716 |
| | 63,308 |
| | 61,573 |
|
| Total deposits | | $ | 1,445,635 |
| | $ | 1,452,071 |
| | $ | 1,509,129 |
| | $ | 1,523,020 |
| | $ | 1,503,937 |
|
| | | | | | | | | | | |
| ASSET QUALITY DATA | | March 31, 2019 | | December 31, 2018 | | September 30, 2018 | | June 30, 2018 | | March 31, 2018 |
| Nonaccrual loans | | $ | 23,191 |
| | $ | 8,920 |
| | $ | 51,476 |
| | $ | 73,538 |
| | $ | 82,275 |
|
| Loans past due 90 days and over and accruing | | — |
| | — |
| | 7 |
| | 3 |
| | 1 |
|
| Total nonperforming loans | | 23,191 |
| | 8,920 |
| | 51,483 |
| | 73,541 |
| | 82,276 |
|
| Nonperforming loans held for sale | | — |
| | 20,441 |
| | — |
| | — |
| | 808 |
|
| Other real estate | | 664 |
| | 1,067 |
| | 1,022 |
| | 1,365 |
| | 1,803 |
|
| Other repossessed assets | | 66 |
| | 55 |
| | — |
| | — |
| | 194 |
|
| Total nonperforming assets | | $ | 23,921 |
| | $ | 30,483 |
| | $ | 52,505 |
| | $ | 74,906 |
| | $ | 85,081 |
|
| Troubled debt restructurings, accruing | | $ | 713 |
| | $ | 1,334 |
| | $ | 896 |
| | $ | 1,010 |
| | $ | 1,153 |
|
| Nonperforming assets to total assets | | 1.37 | % | | 1.75 | % | | 2.88 | % | | 4.03 | % | | 4.58 | % |
| Nonperforming assets to total loans | | 2.68 | % | | 3.39 | % | | 5.45 | % | | 7.07 | % |
| 7.47 | % |
| ALLL to nonperforming loans | | 106.85 | % | | 195.4 | % | | 47.49 | % | | 31.97 | % | | 30.84 | % |
| ALLL to total loans | | 2.77 | % | | 1.94 | % | | 2.54 | % | | 2.22 | % | | 2.23 | % |
| Quarter-to-date charge-offs | | 384 |
| | 19,277 |
| | 4,339 |
| | 2,801 |
| | 1,836 |
|
| Quarter-to-date recoveries | | 133 |
| | 258 |
| | 974 |
| | 505 |
|
| 319 |
|
| Quarter-to-date net charge-offs | | 251 |
| | 19,019 |
| | 3,365 |
| | 2,296 |
| | 1,517 |
|
| Annualized QTD net charge-offs to total loans | | 0.11 | % | | 8.45 | % | | 1.40 | % | | 0.87 | % |
| 0.54 | % |
|
| | | | | | | | |
| MIDSOUTH BANCORP, INC. and SUBSIDIARIES | | | | |
| Tangible Common Equity to Tangible Assets and Regulatory Ratios (unaudited) | | | | |
| (in thousands) | | | | |
| | | | | |
| COMPUTATION OF TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS | | March 31, 2019 | | December 31, 2018 |
| | | | | |
| Total equity | | $ | 221,166 |
| | $ | 221,990 |
|
| Less preferred equity | | 40,972 |
| | 40,972 |
|
| Total common equity | | 180,194 |
| | 181,018 |
|
| Less goodwill | | 42,171 |
| | 42,171 |
|
| Less intangibles | | 2,132 |
| | 2,409 |
|
| Tangible common equity | | $ | 135,891 |
| | $ | 136,438 |
|
| | | | | |
| Total assets | | $ | 1,745,335 |
| | $ | 1,743,398 |
|
| Less goodwill | | 42,171 |
| | 42,171 |
|
| Less intangibles | | 2,132 |
| | 2,409 |
|
| Tangible assets | | $ | 1,701,032 |
| | $ | 1,698,818 |
|
| | | | | |
| Tangible common equity to tangible assets | | 7.99 | % | | 8.03 | % |
| | | | | |
| REGULATORY CAPITAL | | | | |
| | | | | |
| Common equity tier 1 capital | | $ | 135,696 |
| | $ | 137,991 |
|
| Tier 1 capital | | 198,167 |
| | 201,130 |
|
| Total capital | | 211,905 |
| | 215,310 |
|
| | | | | |
| Regulatory capital ratios: | | | | |
| Common equity tier 1 capital ratio | | 12.48 | % | | 12.20 | % |
| Tier 1 risk-based capital ratio | | 18.22 | % | | 17.79 | % |
| Total risk-based capital ratio | | 19.49 | % | | 19.04 | % |
| Tier 1 leverage ratio | | 11.60 | % | | 11.45 | % |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| MIDSOUTH BANCORP, INC. and SUBSIDIARIES | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Quarterly Yield Analysis (unaudited) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| YIELD ANALYSIS | | Three Months Ended | | Three Months Ended | | Three Months Ended | | Three Months Ended | | Three Months Ended | |
| | March 31, 2019 | | December 31, 2018 | | September 30, 2018 | | June 30, 2018 | | March 31, 2018 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Tax | | | | | | Tax | | | | | | Tax | | | | | | Tax | | | | | | Tax | | | |
| | | Average | | Equivalent | | Yield/ | | Average | | Equivalent | | Yield/ | | Average | | Equivalent | | Yield/ | | Average | | Equivalent | | Yield/ | | Average | | Equivalent | | Yield/ | |
| | | Balance | | Interest | | Rate | | Balance | | Interest | | Rate | | Balance | | Interest | | Rate | | Balance | | Interest | | Rate | | Balance | | Interest | | Rate | |
| Taxable securities | | $ | 436,549 |
| | $ | 3,071 |
| | 2.81 | % | | $ | 375,467 |
| | $ | 2,950 |
| | 3.14 | % | | $ | 347,205 |
| | $ | 2,156 |
| | 2.48 | % | | $ | 340,080 |
| | $ | 2,093 |
| | 2.46 | % | | $ | 334,419 |
| | $ | 2,047 |
| | 2.45 | % | |
| Tax-exempt securities (*) | | 38,424 |
| | 323 |
| | 3.36 | % | | 43,010 |
| | 355 |
| | 3.30 | % | | 43,151 |
| | 345 |
| | 3.20 | % | | 43,858 |
| | 351 |
| | 3.20 | % | | 50,550 |
| | 400 |
| | 3.17 | % | |
| Total investment securities | | 474,973 |
| | 3,394 |
| | 2.86 | % | | 418,477 |
| | 3,305 |
| | 3.16 | % | | 390,356 |
| | 2,501 |
| | 2.56 | % | | 383,938 |
| | 2,444 |
| | 2.54 | % | | 384,969 |
| | 2,447 |
| | 2.54 | % | |
| Federal funds sold | | 5,493 |
| | 32 |
| | 2.33 | % | | 5,878 |
| | 33 |
| | 2.25 | % | | 7,250 |
| | 32 |
| | 1.77 | % | | 5,008 |
| | 21 |
| | 1.63 | % | | 4,978 |
| | 18 |
| | 1.45 | % | |
| Interest bearing deposits in other banks | | 185,418 |
| | 1,004 |
| | 2.17 | % | | 208,001 |
| | 1,364 |
| | 2.62 | % | | 250,349 |
| | 1,279 |
| | 2.04 | % | | 201,281 |
| | 912 |
| | 1.79 | % | | 132,940 |
| | 514 |
| | 1.55 | % | |
| Other investments | | 16,936 |
| | 95 |
| | 2.24 | % | | 16,573 |
| | 177 |
| | 4.27 | % | | 15,640 |
| | 106 |
| | 2.71 | % | | 14,924 |
| | 91 |
| | 2.45 | % | | 12,721 |
| | 87 |
| | 2.74 | % | |
| Loans | | 904,293 |
| | 12,987 |
| | 5.74 | % | | 944,546 |
| | 14,536 |
| | 6.16 | % | | 1,020,834 |
| | 14,590 |
| | 5.72 | % | | 1,109,371 |
| | 15,344 |
| | 5.55 | % | | 1,159,671 |
| | 16,015 |
| | 5.60 | % | |
| Total interest earning assets | | 1,587,113 |
| | 17,512 |
| | 4.41 | % | | 1,593,475 |
| | 19,415 |
| | 4.87 | % | | 1,684,429 |
| | 18,508 |
| | 4.40 | % | | 1,714,522 |
| | 18,812 |
| | 4.39 | % | | 1,695,279 |
| | 19,081 |
| | 4.56 | % | |
| Non-interest earning assets | | 155,573 |
| | | | | | 198,515 |
| | | | | | 146,405 |
| | | | | | 146,384 |
| | | | | | 164,791 |
| | | | | |
| Total assets | | $ | 1,742,686 |
| | | | | | $ | 1,791,990 |
| | | | | | $ | 1,830,834 |
| | | | | | $ | 1,860,906 |
| | | | | | $ | 1,860,070 |
| | | | | |
| Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Deposits | | $ | 1,042,918 |
| | $ | 1,680 |
| | 0.64 | % | | $ | 1,066,322 |
| | $ | 1,670 |
| | 0.63 | % | | $ | 1,083,404 |
| | $ | 1,602 |
| | 0.59 | % | | $ | 1,087,746 |
| | $ | 1,409 |
| | 0.52 | % | | $ | 1,056,417 |
| | $ | 1,238 |
| | 0.47 | % | |
| Repurchase agreements | | 12,069 |
| | 14 |
| | 0.46 | % | | 13,031 |
| | 17 |
| | 0.52 | % | | 14,641 |
| | 16 |
| | 0.44 | % | | 26,230 |
| | 25 |
| | 0.39 | % | | 40,115 |
| | 40 |
| | 0.40 | % | |
| FHLB advances | | 27,500 |
| | 81 |
| | 1.18 | % | | 27,500 |
| | 135 |
| | 1.96 | % | | 29,139 |
| | 81 |
| | 1.11 | % | | 37,514 |
| | 120 |
| | 1.28 | % | | 38,741 |
| | 129 |
| | 1.33 | % | |
| Junior subordinated debentures | | 22,167 |
| | 287 |
| | 5.18 | % | | 22,167 |
| | 275 |
| | 4.96 | % | | 22,167 |
| | 271 |
| | 4.89 | % | | 22,167 |
| | 260 |
| | 4.63 | % | | 22,167 |
| | 220 |
| | 3.97 | % | |
| Total interest bearing liabilities | | 1,104,654 |
| | 2,062 |
| | 0.75 | % | | 1,129,020 |
| | 2,097 |
| | 0.74 | % | | 1,149,351 |
| | 1,970 |
| | 0.69 | % | | 1,173,657 |
| | 1,814 |
| | 0.62 | % | | 1,157,440 |
| | 1,627 |
| | 0.57 | % | |
| Non-interest bearing liabilities | | 414,829 |
| | | | | | 419,202 |
| | | | | | 431,486 |
| | | | | | 435,971 |
| | | | | | 447,460 |
| | | | | |
| Shareholders' equity | | 223,203 |
| | | | | | 243,768 |
| | | | | | 249,997 |
| | | | | | 251,278 |
| | | | | | 255,170 |
| | | | | |
| Total liabilities and shareholders' equity | | 1,742,686 |
| | | | | | 1,791,990 |
| | | | | | 1,830,834 |
| | | | | | 1,860,906 |
| | | | | | 1,860,070 |
| | | | | |
| Net interest income (TE) and spread | | | | $ | 15,450 |
| | 3.66 | % | | | | $ | 17,318 |
| | 4.13 | % | | | | $ | 16,538 |
| | 3.71 | % | | | | $ | 16,998 |
| | 3.77 | % | | | | $ | 17,454 |
| | 3.99 | % | |
| Net interest margin | | | | | | 3.89 | % | | | | | | 4.35 | % | | | | | | 3.93 | % | | | | | | 3.97 | % | | | | | | 4.12 | % | |
(*) Reflects taxable equivalent adjustments using the federal statutory tax rate of 21% in adjusting interest on tax-exempt securities to a fully taxable basis. The taxable equivalent adjustments included above amount to $68,000 for 1Q19, $75,000 for 4Q18 $72,000 for 3Q18, $74,000 for 2Q18, and $84,000 for 1Q18.
|
|
| | | | | | | | | | | | | | | | | | | | |
| MIDSOUTH BANCORP, INC. and SUBSIDIARIES |
| Reconciliation of Non-GAAP Financial Measures (unaudited) |
| (in thousands except per share data) |
| | | Three Months Ended |
| | | March 31, 2019 | | December 31, 2018 | | September 30, 2018 | | June 30, 2018 | | March 31, 2018 |
| Tangible common equity and tangible book value per share | | | | | | | | | | |
| | | | | | | | | | | |
| Total shareholders' equity | | $ | 221,166 |
| | $ | 221,990 |
| | $ | 241,451 |
| | $ | 248,672 |
| | $ | 250,837 |
|
| Less: | | | | | | | | | | |
| Preferred common shareholders' equity | | 40,972 |
| | 40,972 |
| | 40,972 |
| | 40,987 |
| | 40,987 |
|
| Total common equity | | 180,194 |
| | 181,018 |
| | 200,479 |
| | 207,685 |
| | 209,850 |
|
| | | | | | | | | | | |
| Less: | | | | | | | | | | |
| Goodwill | | $ | 42,171 |
| | $ | 42,171 |
| | $ | 42,171 |
| | $ | 42,171 |
| | $ | 42,171 |
|
| Other intangible assets | | $ | 2,132 |
| | $ | 2,409 |
| | $ | 2,685 |
| | $ | 2,962 |
| | $ | 3,238 |
|
| Total tangible common equity | | $ | 135,891 |
| | $ | 136,438 |
| | $ | 155,623 |
| | $ | 162,552 |
| | $ | 164,441 |
|
| | | | | | | | | | | |
| Period end number of shares | | $ | 16,715,671 |
| | $ | 16,641,017 |
| | $ | 16,641,105 |
| | $ | 16,619,894 |
| | $ | 16,621,811 |
|
| Book value per share (period end) | | $ | 10.78 |
| | $ | 10.88 |
| | $ | 12.05 |
| | $ | 12.50 |
| | $ | 12.62 |
|
| Tangible book value per share (period end) | | $ | 8.13 |
| | $ | 8.20 |
| | $ | 9.35 |
| | $ | 9.78 |
| | $ | 9.89 |
|
|
| | | | | | | | | | | | | | | | | | | | |
| MIDSOUTH BANCORP, INC. and SUBSIDIARIES |
| Reconciliation of Non-GAAP Financial Measures (unaudited) (continued) |
| (in thousands except per share data) |
| | | | | | | | | | | |
| Operating (loss) earnings per share | | March 31, 2019 | | December 31, 2018 | | September 30, 2018 | | June 30, 2018 | | March 31, 2018 |
| Net loss available to common shareholders' | | $ | (6,640 | ) | | $ | (23,118 | ) | | $ | (5,708 | ) | | $ | (1,479 | ) | | $ | (450 | ) |
| Adjustment items: | | | | | | | | | | |
| Regulatory remediation costs | | — |
| | 4,970 |
| | 5,502 |
| | 5,323 |
| | 3,926 |
|
| Loans held for sale expense | | — |
| | — |
| | 4 |
| | 20 |
| | 963 |
|
| Branch closure expenses | | — |
| | — |
| | — |
| | — |
| | 145 |
|
| Discount accretion acceleration | | — |
| | (726 | ) | | — |
| | — |
| | — |
|
| Tax effect of adjustments | | — |
| | (891 | ) | | (1,156 | ) | | (1,122 | ) | | (1,057 | ) |
| After tax adjustment items | | — |
| | 3,353 |
| | 4,350 |
| | 4,221 |
| | 3,977 |
|
| Tax expense adjustment item: | | | | | | | | | | |
| Attributable to valuation allowance on deferred tax | | — |
| | 7,685 |
| | — |
| | — |
| | — |
|
| Adjusted net (loss) income | | $ | (6,640 | ) | | $ | (12,080 | ) | | $ | (1,358 | ) | | $ | 2,742 |
| | $ | 3,527 |
|
| | | | | | | | | | | |
| Weighted average number of shares - diluted | | 16,673,818 |
| | 16,640,174 |
| | 16,557,664 |
| | 16,525,571 |
| | 16,495,438 |
|
| Net (loss) earnings per diluted share | | $ | (0.40 | ) | | $ | (1.39 | ) | | $ | (0.34 | ) | | $ | (0.09 | ) | | $ | (0.03 | ) |
| Operating net (loss) earnings per diluted share | | $ | (0.40 | ) | | $ | (0.73 | ) | | $ | (0.08 | ) | | $ | 0.17 |
| | $ | 0.21 |
|
| | | | | | | | | | | |
| Operating ratios | | | | | | | | | | |
| Return on average assets | | (1.52 | )% | | (5.16 | )% | | (1.25 | )% | | (0.32 | )% | | (0.10 | )% |
| Effect of adjustment items | | — | % | | 2.46 | % | | 0.95 | % | | 0.91 | % | | 0.86 | % |
| Operating return on average assets | | (1.52 | )% | | (2.70 | )% | | (0.30 | )% | | 0.59 | % | | 0.76 | % |
| | | | | | | | | | | |
| Return on average common equity | | (14.57 | )% | | (45.60 | )% | | (10.92 | )% | | (2.81 | )% | | (0.84 | )% |
| Effect of adjustment items | | — | % | | 21.77 | % | | 8.32 | % | | 8.03 | % | | 7.43 | % |
| Operating return on average common equity | | (14.57 | )% | | (23.83 | )% | | (2.60 | )% | | 5.22 | % | | 6.59 | % |
| | | | | | | | | | | |
| Return on average tangible common equity | | (19.28 | )% | | (58.50 | )% | | (13.92 | )% | | (3.58 | )% | | (1.07 | )% |
| Effect of adjustment items | | — | % | | 27.93 | % | | 10.61 | % | | 10.23 | % | | 9.44 | % |
| Operating return on average tangible common equity | | (19.28 | )% | | (30.57 | )% | | (3.31 | )% | | 6.65 | % | | 8.37 | % |
|
| | | | | | | | | | | | | | | | | | | | |
| MIDSOUTH BANCORP, INC. and SUBSIDIARIES |
| Reconciliation of Non-GAAP Financial Measures (unaudited) (continued) |
| (in thousands except per share data) |
| | | | | | | | | | | |
| | | | | Three Months Ended |
| OPERATING EFFICIENCY RATIO (TE) | | March 31, 2019 | | December 31, 2018 | | September 30, 2018 | | June 30, 2018 | | March 31, 2018 |
| Operating noninterest expense | | | | | | | | | | |
| Total Noninterest Expense | | $ | 19,886 |
| | $ | 24,644 |
| | $ | 23,527 |
| | $ | 22,273 |
| | $ | 21,873 |
|
| Adjustment items: | | | | | | | | | | |
| Regulatory remediation costs | | — |
| | $ | (4,970 | ) | | $ | (5,502 | ) | | $ | (5,323 | ) | | $ | (3,926 | ) |
| Loans held for sale expense | | — |
| | — |
| | 4 |
| | (20 | ) | | (963 | ) |
| Branch closure expenses | | — |
| | — |
| | — |
| | — |
| | (145 | ) |
| Operating noninterest expense | | $ | 19,886 |
| | $ | 19,674 |
| | $ | 18,029 |
| | $ | 16,930 |
| | $ | 16,839 |
|
| | | | | | | | | | | |
| Operating efficiency ratio | | | | | | | | | | |
| Net interest income (TE) | | 15,436 |
| | 17,318 |
| | 16,538 |
| | 16,998 |
| | 17,454 |
|
| Noninterest income | | 6,273 |
| | 4,702 |
| | 5,090 |
| | 4,882 |
| | 4,829 |
|
| Total Revenue (TE) | | 21,709 |
| | 22,020 |
| | 21,628 |
| | 21,880 |
| | 22,283 |
|
| Adjustment items | | | | | | | | | | |
| Gain on sale of securities | | 373 |
| | — |
| | — |
| | — |
| | — |
|
| Gain on sale of loans | | 1,274 |
| | — |
| | — |
| | — |
| | — |
|
| Adjusted total revenue (TE) | | 20,062 |
| | 22,020 |
| | 21,628 |
| | 21,880 |
| | 22,283 |
|
| Efficiency ratio | | 91.83 | % | | 112.30 | % | | 109.14 | % | | 102.14 | % | | 98.53 | % |
| Operating efficiency ratio | | 99.12 | % | | 89.35 | % | | 83.36 | % | | 77.38 | % | | 75.57 | % |
