MidSouth Bancorp, Inc. Reports First Quarter 2007 Earnings
LAFAYETTE, La., April 26 /PRNewswire-FirstCall/ -- MidSouth Bancorp, Inc.
(Amex: MSL) today reported earnings of $1,946,000 for the first quarter ended
March 31, 2007, an increase of 7.0% over net income of $1,819,000 reported for
the first quarter of 2006 and an increase of 11.3% over net income of $1,749,000
reported for the fourth quarter of 2006. A decrease in the provision for loan
losses of $320,000 was responsible for the positive change in earnings in
quarterly comparison. Diluted earnings per share for the first quarter of 2007
were $0.31, an increase of 7.6% over the $0.29 per share for the first quarter
of 2006 and 10.7% above the $0.28 per share for the fourth quarter of 2006.
These amounts reflect a five-for-four (25%) stock dividend distributed on
October 23, 2006.
Revenues for the Company, defined as net interest income and non-interest
income, increased $1,361,000 for the first quarter of 2007 compared to the first
quarter of 2006. A $1,583,000 increase in non-interest expenses attributed to
franchise expansion offset the improvement in revenues.
Rusty Cloutier, President and Chief Executive Officer of MidSouth Bancorp,
Inc., commented, "We are pleased to report a 13.07% return on equity and a 7.0%
increase in earnings for our shareholders in the first quarter of 2007, despite
a market environment of shrinking net interest margins and intense competition
for loans and deposits. The execution of our growth plan, adding 7 branches in
existing and new markets over the next 12 months, will continue to impact
earnings in the short-term, but is the key to building long-term shareholder
value."
The Company's total assets ended the first quarter of 2007 at $814.7
million, an 8.8% increase over the $748.6 in total assets recorded at March 31,
2006. Deposits were $728.8 million as of March 31, 2007, compared to $674.4
million on March 31, 2006, an increase of $54.4 million, or 8.1%. Total loans
were $510.6 million, an increase of $59.4 million, or 13.2%, from $451.2 million
as of March 31, 2006. Credit quality remained strong, as nonperforming assets to
total assets were 0.28% for the first quarter of 2007, compared to 0.29% for the
fourth quarter of 2006 and 0.26% for the first quarter of 2006.
"Asset quality is always top priority," said Cloutier. "We have worked hard
to continue double-digit loan growth in year-over-year comparison, while
maintaining sound underwriting practices that enhance credit quality."
In linked-quarter comparison loans grew $11.5 million, most of which was
added late in the quarter. Loan growth slowed in the fourth quarter 2006 and for
most of the first quarter 2007 as a result of higher levels of prepayments due
to sales of customers' businesses, higher levels of liquidity and cash flow
reported by customers, and highly competitive pricing.
Addressing expectations for loan growth for the remainder of 2007, Cloutier
added, "We are optimistic about the pipeline at the end of the first quarter
2007 and the positive demographic and economic data recently reported in the
markets we serve."
Earnings Analysis
Net Interest Income. Net interest income totaled $8,354,000 for the first
quarter of 2007, an increase of 12.9%, or $957,000, from the $7,397,000 reported
for the first quarter of 2006. The improvement in net interest income resulted
primarily from an increase of $81.3 million in average earning assets. Total
interest income from earning assets increased $2.4 million for the first quarter
of 2007 compared to 2006. The volume increase in earning assets was supported by
a 71 basis points increase in the yield on loans, from 8.20% to 8.91%, and a 30
basis point increase in the taxable-equivalent yield on investment securities,
from 4.63% to 4.93%, in quarterly comparison. Yields on loans improved as the
Prime rate increased 50 basis points over the past twelve months and adjusted
rates on a portion of MidSouth Bancorp's loan portfolio that floats with changes
in Prime.
The impact of increased interest income on earnings was partially offset by
the increased volume and cost of interest-bearing liabilities realized in
quarterly comparison. A $77.0 million increase in average volume and a 63 basis
point increase in the average rate paid on interest-bearing liabilities resulted
in a $1.5 million increase in interest expense for the first quarter of 2007
compared to the first quarter 2006. The average rate paid on interest-bearing
liabilities increased to 3.66% from 3.03%, respectively. Growth in
interest-bearing liabilities was primarily in money market and NOW checking
deposit products paying competitive market rates of interest.
In linked-quarter comparison, the increase in average earning assets was
held to $6.2 million as a result of the slowed loan growth for most of the first
quarter of 2007. The average yield on earning assets improved 14 basis points.
The average volume of interest-bearing liabilities increased $11.5 million in
linked-quarter comparison and the average yield on interest- bearing liabilities
increased 9 basis points. As a result, net interest income decreased $96,000
despite a 3 basis point improvement in the taxable equivalent net yield on
earning assets, from 4.83% for the fourth quarter of 2006 to 4.86% for the first
quarter of 2007.
Non-interest income. Non-interest income for the first quarter of 2007
totaled $3.2 million, or 14.2% above the $2.8 million earned in the first
quarter of 2006 and 7.9% above the $3.0 million earned in the fourth quarter of
2006. The increases from prior year and linked-quarter comparisons resulted
primarily from increases in fee income from service charges on deposit accounts,
including non-sufficient funds ("NSF") fees, due to increased activity on the
accounts.
Operating Expenses. Non-interest expenses increased $1.6 million in the
first quarter 2007 compared to the first quarter 2006 primarily due to increased
salaries and benefits costs. The number of full-time equivalent employees
increased from 339 at March 31, 2006 to 387 at March 31, 2007 as a result of
franchise expansion and recruitment of talented leaders to support the
expansion. Additional increases were recorded in occupancy and data processing
expenses, professional fees, marketing costs, and other growth- related
expenses.
In linked-quarter comparison non-interest expenses remained relatively
unchanged, as increased salaries and benefits costs were offset by decreases
primarily in occupancy expense, marketing costs, and education and travel
expenses. The decrease in occupancy expense is due to an impairment loss of
$248,000 recorded in the fourth quarter of 2006. An impairment charge was taken
on existing network and phone assets as the company began upgrading its
communications equipment and network capabilities to support business growth and
additional locations. The total cost of the initiative approximates $2,200,000.
The network will tie all locations together for voice and data communications
and is expected to be completed in the second quarter of 2007.
Asset Quality. At March 31, 2007, nonperforming assets totaled $2,271,000 or
0.28% of total assets, as compared to $1,921,000, or 0.26% of total assets,
recorded at March 31, 2006. Nonperforming assets decreased $43,000 in linked-
quarter comparison. Allowance coverage for nonperforming assets was 215.76% at
March 31, 2007. Net year-to-date charge-offs were 0.02% of total loans for the
first quarter of 2007, compared to 0.01% at March 31, 2006, and 0.05% at
December 31, 2006.
Continued strong credit quality ratios, supported by management's most
recent analysis of the ALLL, indicated that the ALLL/total loans ratio of .96%
was appropriate at March 31, 2007. Accordingly, no provision expense for loan
losses was recorded in the first quarter 2007, compared to $320,000 in provision
expense recorded for the first quarter of 2006 and $180,000 recorded for the
fourth quarter of 2006.
Franchise Growth. In 2007, the Company plans to continue its expansion in
southern Louisiana as well as solidifying and expanding its banking presence and
commercial lending base throughout Houston and southeast Texas. Cloutier
commented, "We are continually receptive to new growth opportunities in both our
existing markets and locations that are in accordance with our long-term
strategic goal of building shareholder wealth. Over the next twelve months, we
will add several branches to service our customers throughout south Louisiana
and southeast Texas."
Two branches are planned to open in the Baton Rouge market in late May 2007
and January of 2008. A new branch in Cutoff and a second branch in Lake Charles
are scheduled to open in July and November 2007, respectively. In the existing
Texas markets, new locations in both Conroe and College Station are scheduled to
open in August and November, respectively. Expansion into the Houston market
will be anchored with a new branch on the Sam Houston Parkway anticipated to
open in May 2007.
MidSouth Bancorp, Inc. is a two-bank holding company headquartered in
Lafayette, Louisiana whose wholly-owned active subsidiaries are MidSouth Bank,
N.A., also headquartered in Lafayette, and MidSouth Bank, headquartered in
Beaumont, Texas. The MidSouth franchise consists of 29 branches throughout south
Louisiana and southeast Texas. MidSouth's common stock is traded on the American
Stock Exchange under the symbol MSL.
The Private Securities Litigation Act of 1995 provides a safe harbor for
disclosure of information about a company's anticipated future financial
performance. This act protects a company from unwarranted litigation if actual
results differ from management expectations. This press release reflects
management's current views and estimates of future economic circumstances,
industry conditions, MidSouth's performance and financial results. A number of
factors and uncertainties could cause actual results to differ from anticipated
results and expectations.
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands except per share data)
For the Quarter Ended
March 31, % Dec. 31, %
EARNINGS DATA 2007 2006 Chg 2006 Chg
Total interest income $13,442 $11,035 21.8% $13,405 0.3%
Total interest expense 5,088 3,638 39.9% 4,955 2.7%
Net interest income 8,354 7,397 12.9% 8,450 -1.1%
Provision for loan
losses - 320 -100.0% 180 -100.0%
Non-interest income 3,247 2,843 14.2% 3,010 7.9%
Non-interest expense 9,079 7,496 21.1% 9,070 0.1%
Provision for income
tax 576 605 -4.8% 461 24.9%
Net income $1,946 $1,819 7.0% $1,749 11.3%
PER COMMON SHARE DATA
Basic earnings per
share $0.31 $0.30 3.3% $0.28 10.7%
Diluted earnings per
share $0.31 $0.29 7.6% $0.28 10.7%
Book value at end of
period $9.83 $8.67 13.4% $9.58 2.6%
Market price at end of
period $27.02 $22.92 17.9% $31.16 -13.3%
Weighted avg shares
outstanding
Basic 6,240,259 6,176,613 1.0% 6,230,314 0.2%
Diluted 6,329,813 6,349,699 -0.3% 6,351,208 -0.3%
AVERAGE BALANCE SHEET
DATA
Total assets $803,458 $717,159 12.0% $796,305 0.9%
Earning assets 731,564 650,252 12.5% 725,384 0.9%
Loans and leases 500,271 443,610 12.8% 498,681 0.3%
Interest-bearing
deposits 541,808 468,757 15.6% 529,741 2.3%
Total deposits 717,808 642,368 11.7% 709,703 1.1%
Total stockholders'
equity 60,372 53,706 12.4% 59,369 1.7%
SELECTED RATIOS 3/31/2007 3/31/2006 12/31/2006
Return on average
assets 0.98% 1.03% -4.5% 0.87% 12.7%
Return on average total
equity 13.07% 13.74% -4.8% 11.69% 11.8%
Return on average
realized equity (1) 12.82% 13.46% -4.8% 11.49% 11.6%
Average equity to
average assets 7.51% 7.49% 0.3% 7.46% 0.8%
Leverage capital ratio 8.50% 8.48% 0.2% 8.34% 1.9%
Taxable-equivalent net
interest margin 4.86% 4.80% 1.2% 4.83% 0.6%
CREDIT QUALITY
Allowance for loan
losses as a %
of total loans 0.96% 1.03% -6.8% 1.00% -4.0%
Nonperforming assets to
total assets 0.28% 0.26% 7.7% 0.29% -3.4%
Net YTD charge-offs to
total loans 0.02% 0.01% 100.0% 0.05% -60.0%
(1) Excluding net unrealized gain (loss) on securities available for sale.
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands except per share data)
Period Ended % Period Ended %
BALANCE SHEET Mar. 31, Mar. 31, Chg Dec. 31, Chg
Assets 2007 2006 2006
Cash and cash equivalents $ 55,027 $ 66,750 -17.6% $ 57,404 4.3%
Securities available-for-
sale 182,285 165,411 10.2% 180,674 -0.9%
Securities held-to-maturity 13,404 18,368 -27.0% 15,901 18.6%
Total investment
securities 195,689 183,779 6.5% 196,575 0.5%
Total loans 510,561 451,162 13.2% 499,046 -2.3%
Allowance for loan losses (4,900) (4,652) 5.3% (4,977 ) 1.6%
Loans, net 505,661 446,510 13.2% 494,069 -2.3%
Premises and equipment 31,488 27,003 16.6% 30,609 -2.8%
Goodwill and other
intangibles 9,905 10,174 -2.6% 9,957 0.5%
Other assets 16,890 14,344 17.7% 16,408 -2.9%
Total assets $814,660 $748,560 8.8% $805,022 -1.2%
Liabilities and
Stockholders' Equity
Non-interest bearing
deposits $180,435 $182,324 -1.0% $182,596 1.2%
Interest bearing deposits 548,404 492,055 11.5% 533,584 -2.7%
Total deposits 728,839 674,379 8.1% 716,180 -1.7%
Securities sold under
agreements to repurchase
and FHLB borrowings 4,791 2,911 64.6% 10,125 111.3%
Junior subordinated
debentures 15,465 15,465 0.0% 15,465 0.0%
Other liabilities 3,889 2,159 80.1% 3,509 -9.8%
Total liabilities 752,984 694,914 8.4% 745,279 -1.0%
Total shareholders' equity 61,676 53,646 15.0% 59,743 -3.1%
Total liabilities and
shareholders' equity $814,660 $748,560 8.8% $805,022 -1.2%
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands except per share data)
Three Months Ended
INCOME STATEMENT March 31, % Dec. 31, %
2007 2006 Chg 2006 Chg
Interest income $13,442 $11,035 21.8% $13,405 0.28%
Interest expense 5,088 3,638 39.9% 4,956 2.66%
Net interest income 8,354 7,397 12.9% 8,449 -1.12%
Provision for loan losses -- 320 -100.0% 180 -100.00%
Service charges on
deposit accounts 2,306 1,927 19.7% 2,197 4.96%
Gains on securities,net -- -- --
Other charges and fees 941 916 2.7% 813 15.74%
Total non-interest
income 3,247 2,843 14.2% 3,010 7.87%
Salaries and employee
benefits 4,787 3,786 26.4% 4,357 9.87%
Occupancy expense 1,715 1,486 15.4% 1,655 3.63%
Intangible amortization 52 82 -36.6% 52 0.00%
Other non-interest expense 2,525 2,142 17.9% 3,006 -16.00%
Total non-interest
expense 9,079 7,496 21.1% 9,070 0.10%
Income before income taxes 2,522 2,424 4.0% 2,209 14.17%
Provision for income taxes 576 605 -4.8% 460 25.22%
Net income $ 1,946 $ 1,819 7.0% $ 1,749 11.26%
Earnings per share, diluted $0.31 $0.29 6.9% $0.28 10.71%
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands except per share data)
INCOME STATEMENT First Fourth Third Second First
Quarterly Trends Quarter Quarter Quarter Quarter Quarter
2007 2006 2006 2006 2006
Interest income $13,442 $13,405 $13,104 $12,691 $11,035
Interest expense 5,088 4,955 4,662 4,396 3,638
Net interest income 8,354 8,450 8,442 8,295 7,397
Provision for loan losses - 180 50 300 320
Net interest income after
provision for loan losses 8,354 8,270 8,392 7,995 7,077
Total non-interest income 3,247 3,010 3,414 3,071 2,843
Total non-interest expense 9,079 9,070 8,489 8,069 7,496
Income before income taxes 2,522 2,210 3,317 2,997 2,424
Income taxes 576 461 900 762 605
Net income $ 1,946 $ 1,749 $ 2,417 $ 2,235 $ 1,819
Earnings per share, basic $0.31 $0.28 $0.39 $0.36 $0.30
Earnings per share, diluted $0.31 $0.28 $0.38 $0.35 $0.29
Book value per share $9.83 $9.58 $9.41 $8.78 $8.67
Return on Average Equity 13.07% 11.69% 16.98% 16.48% 13.74%
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands except per share data)
Asset Quality Data Period Ended % Period Ended
Mar. 31, Mar. 31, Chg Dec. 31, Sept. 30,
2007 2006 2006 2006
Nonaccrual loans $ 1,574 $ 672 134.2% $ 1,793 $ 501
Loans past due 90
days and over 481 1,127 -57.3% 98 1,789
Total nonperforming loans 2,055 1,799 14.2% 1,891 2,290
Other real estate owned 158 68 132.4% 368 24
Other foreclosed assets 58 54 7.4% 55 58
Total nonperforming assets $ 2,271 $ 1,921 18.2% $ 2,314 $ 2,372
Nonperforming assets to
total assets 0.28% 0.26% 7.7% 0.29% 0.31%
Nonperforming assets to
total loans + OREO + other
foreclosed assets 0.44% 0.43% 2.3% 0.46% 0.48%
ALL to nonperforming assets 215.76% 242.16% -10.9% 215.08% 207.00%
ALL to nonperforming loans 238.44% 258.59% -7.8% 263.19% 214.41%
ALL to total loans 0.96% 1.03% -6.9% 1.00% 0.99%
Year-to-date charge-offs $ 95 $ 132 -28.0% $ 542 $ 381
Year-to-date recoveries 18 109 -83.5% 314 266
Year-to-date net charge-offs $ 77 $ 23 234.8% $ 228 $ 115
Net YTD charge-offs to total
loans 0.02% 0.01% 300.0% 0.05% 0.02%
MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
YIELD ANALYSIS (UNAUDITED)
(in thousands) Three Months Ended Three Months Ended
31-Mar-07 31-Mar-06
Tax Tax
Average Equivalent Yield/ Average Equivalent Yield/
Balance Interest Rate Balance Interest Rate
Taxable securities 85,373 981 4.60% 85,638 917 4.28%
Tax-exempt securities 109,859 1,435 5.22% 81,630 1,020 5.00%
Equity securities 2,511 22 3.50% 2,025 24 4.74%
Federal Funds Sold 33,550 430 5.20% 37,349 406 4.41%
Loans and leases 500,271 10,993 8.91% 443,610 8,964 8.20%
Total interest earning
assets 731,564 13,861 7.68% 650,252 11,331 7.07%
Noninterest earning
assets 71,894 66,907
Total assets $ 803,458 $ 717,159
Interest bearing
liabilities:
Deposits $ 541,808 $ 4,682 3.50% $ 468,757 $ 3,304 2.86%
Repurchase agreements
and federal
funds purchased 4,346 49 4.57% 2,038 20 3.98%
Short term borrowings 1,593 27 6.87% -- -- 0.00%
Junior subordinated
debentures 15,465 330 8.65% 15,465 314 8.23%
Total interest bearing
liabilities 563,212 5,088 3.66% 486,260 3,638 3.03%
Noninterest bearing
liabilities 179,874 177,193
Shareholders' equity 60,372 53,706
Total interest bearing
liabilities and
shareholders' equity $ 803,458 $ 717,159
Net interest income (TE)
and margin $ 8,773 4.86% $ 7,693 4.80%
SOURCE MidSouth Bancorp, Inc.
-0- 04/26/2007
/CONTACT: C. R. Rusty Cloutier, President & CEO, or J. Eustis Corrigan,
Jr., Chief Financial Officer, both of MidSouth Bancorp, Inc., +1-337-237-8343/
(MSL)