Exhibit 99.1
MIDSOUTH BANCORP, INC. REPORTS ANNUAL AND 4TH QUARTER 2006 EARNINGS
LAFAYETTE, La., Jan. 25 /PRNewswire-FirstCall/ -- MidSouth Bancorp, Inc.
(Amex: MSL) reported that net income for the year ended December 31, 2006, was
$8,220,000, a 13.0% increase over the $7,274,000 reported for the year ended
December 31, 2005. Basic earnings per share for 2006 were $1.32, versus $1.19
per share for 2005. Diluted earnings per share were $1.30 versus $1.15 for 2006
and 2005, respectively. Annual earnings for 2005 included a $631,000 pre-tax
special distribution of proceeds to the Company from the merger of Pulse EFT
Association and Discover Financial Services, Inc. Additionally, 2005 earnings
were reduced by a $102,000 pre-tax write-down of a branch facility. Excluding
the $349,000 after-tax effect of the 2005 non-recurring transactions and the
$164,000 after-tax effect of a 2006 impairment charge, the Company's earnings
for the year-ended December 31, 2006, improved by $1,459,000, or 21.1%, over
2005.
MidSouth's net income was $1,749,000 for the quarter ended December 31,
2006, $73,000 above the $1,676,000 earned in the fourth quarter of 2005, but
$668,000 below the $2,417,000 earned in the third quarter of 2006. Basic
earnings per share were $.28 for the quarter reported, compared to $.27 per
share reported for the fourth quarter of 2005 and $.39 per share for the third
quarter of 2006. Diluted earnings per share were $.28 for the quarter compared
to $.26 per share for the fourth quarter of 2005 and $.38 per share for the
third quarter of 2006. Earnings per share data have been adjusted to reflect a
five-for-four (25%) stock split on the Company's common stock to holders of
record as of September 29, 2006, paid on October 23, 2006.
C. R. "Rusty" Cloutier, President and CEO, stated, "We are pleased to
continue the successful execution of our strategy to grow the Company via our
franchise expansion effort and acquisition of talent. We are proud of our
overall financial performance for the year. Asset quality remained strong and
continues to be a focal point of management. Nonperforming assets were $2.3
million at December 31, 2006, and the allowance coverage for nonperforming
assets was 215.08%."
In linked-quarter comparison, earnings decreased $668,000, or 27.6%, from
$2,417,000 for the quarter-ended September 30, 2006, to $1,749,000 for the
quarter-ended December 31, 2006. Net interest income was flat, and non- interest
income decreased $404,000 in the fourth quarter of 2006 compared to the third
quarter of 2006, primarily due to a decrease in nonsufficient funds ("NSF")
fees. Non-interest expenses increased and were impacted by an impairment charge
of $248,000 incurred in connection with the replacement and upgrade of the
Company's communications network along with other expenses related to growth of
the franchise. Additionally, the provision for loan losses increased $130,000,
from $50,000 for the third quarter of 2006 to $180,000 for the fourth quarter of
2006.
Highlights for the Year and Quarter Ended December 31, 2006
* Net interest income totaled $8,449,000 for the fourth quarter of 2006, up
11.7% from the $7,561,000 reported for the fourth quarter of 2005. Net
interest income increased primarily due to a 17.7% increase in the
average volume of earning assets. Pressure on the net interest margin
from an inverted yield curve and a highly competitive rate environment
resulted in a 22 basis point decrease in the net interest margin in
quarterly comparison, from 5.05% in the fourth quarter of 2005 to 4.83%
in the fourth quarter of 2006.
* Total consolidated assets increased $106.2 million, or 15.2%, from $698.8
million at December 31, 2005, to $805.0 million at December 31, 2006.
Total loans grew $56.3 million, or 12.7%, from $442.8 million at December
31, 2005, to $499.0 million at December 31, 2006, primarily in commercial
and real estate credits. Total deposits grew $91.2 million, or 14.6%,
from $624.9 million at December 31, 2005, to $716.1 million at December
31, 2006. Of the $91.2 million growth in deposits, $14.2 million was in
non-interest bearing deposits. The $77.0 million growth in
interest-bearing deposits was primarily in the Company's Platinum
Checking and Money Market accounts that pay competitive market rates.
* Nonperforming assets, including loans 90 days or more past due, decreased
$1.1 million, from $3.4 million at December 31, 2005, to $2.3 million at
December 31, 2006. The decrease resulted primarily from a $2.4 million
decrease in loans past due 90 days or more, which included payoffs
received in the fourth quarter of 2006 on approximately $1.2 million in
government-guaranteed loans.
* Nonaccrual loans increased $1.1 million in quarterly comparison,
primarily due to the addition of one agricultural loan totaling $684,000
related to sugar cane production and one construction credit totaling
$457,000. As a percentage of total assets, nonperforming assets decreased
to .29% at December 31, 2006, down from .49% at December 31, 2005.
Charge-off volume decreased with net charge-offs to total loans at .05%
compared to .11% for the same periods, respectively.
* The provision for loan losses totaled $180,000 for the fourth quarter of
2006, a decrease of $120,000 from the $300,000 recorded for the fourth
quarter of 2005. A provision totaling $300,000 was added to the Allowance
for Loan Losses ("ALL") in the fourth quarter of 2005, primarily to cover
probable losses in agricultural credits as a result of Hurricanes Katrina
and Rita.
* Return on average equity was 11.69% for the fourth quarter of 2006
compared to 12.62% for the fourth quarter of 2005. The leverage capital
ratio was 8.34% at December 31, 2006 compared to 8.75% at December 31,
2005.
Net Interest Income
Net interest income for the fourth quarter of 2006 increased $888,000, or
11.7%, compared to the fourth quarter of 2005. Total interest income from loans
and investment securities increased $2.7 million for the same period, primarily
due to a 17.7% increase in the average volume of earning assets between the two
quarters reviewed. The increase in interest income was partially offset by a
$1.8 million increase in interest expense resulting from higher rates paid on
interest-bearing liabilities and a 19.2% increase in the average volume of
interest-bearing deposits between the two quarters reviewed.
In year-to-date comparison, total net interest income increased $4,816,000,
or 17.3%, primarily due to a volume increase in average earning assets. The
taxable-equivalent net interest margin decreased only 5 basis points, from 4.96%
December 31, 2005, to 4.91% at December 31, 2006.
In linked-quarter comparison, net interest income remained flat, and the
taxable- equivalent net interest margin declined 14 basis points. The lower
margin resulted primarily from a 12 basis point increase in the cost of
interest-bearing liabilities and a $16.2 million increase in the average volume
of interest-bearing liabilities.
Non-Interest Income
Non-interest income for the fourth quarter of 2006 increased $194,000, or
6.9%, in comparison to the fourth quarter of 2005. The impact of a $329,000
increase in service charges on deposit accounts, including insufficient funds
fees, was partially offset by $177,000 decrease in other non-interest income
categories, including a $63,000 decrease in mortgage processing fees and a
decrease of $106,000 in miscellaneous income associated with a one-time
liquidation payment received by MidSouth Bank, Texas in the fourth quarter of
2005.
In linked-quarter comparison, non-interest income decreased $404,000,
primarily in service charges on deposit accounts ($263,000), letter of credit
fees ($80,000) and mortgage processing fees ($61,000). The $263,000 decrease in
service charges on deposit accounts resulted from a lower volume of NSF
transactions processed and a higher amount of charge-offs on uncollectible NSF
accounts in the fourth quarter of 2006.
In year-to-date comparison, non-interest income for 2006 increased only
$88,000 due to the $631,000 pre-tax special distribution of proceeds to the
Company from the merger of Pulse EFT Association and Discover Financial
Services, Inc. included in non-interest income for the year ended December 31,
2005. Net of the distribution, non-interest income increased $719,000, from
$11,617,000 at December 31, 2005, to $12,338,000 at December 31, 2006. Service
charges on deposit accounts contributed $474,000 to the increase in non-interest
income. ATM and debit card fees contributed approximately $424,000 in additional
non-interest income for the year. However, costs associated with ATM and debit
card processing increased non-interest expenses in the same period by $238,000.
These increases in non-interest income were partially offset by a decrease of
$181,000 in mortgage processing fees in year-to-date comparison.
Non-Interest Expense
During the fourth quarter of 2006, the Company invested in an initiative to
replace and upgrade its communications equipment and network capabilities to
support business growth and additional locations. The total investment in the
initiative will approximate $2.2 million. This action resulted in an impairment
charge of approximately $248,000 pursuant to SFAS No. 144, Impairment or
Disposal of Long-lived Assets, related to the existing network and phone assets.
The impairment charge is included in the total increase of $1,203,000 in
non-interest expenses for the fourth quarter of 2006 compared to the fourth
quarter of 2005. Salaries and benefits costs increased $695,000 in prior quarter
comparison, primarily due to the addition of 38 full-time equivalent employees
to support new retail stores and franchise growth. Accounting and professional
fees increased approximately $189,000 in prior quarter comparison due to costs
associated with various corporate initiatives and compliance with Section 404 of
the Sarbanes-Oxley Act of 2002.
In year-to-date comparison, non-interest expenses increased $3,798,000, or
12.95%, from $29,326,000 to $33,124,000, primarily due to increases of
$2,506,000 in salary and benefit costs, $737,000 in occupancy expenses
(including the $248,000 impairment loss), $193,000 in data processing costs,
$153,000 in professional and accounting fees, and $141,000 in marketing costs.
Linked-quarter comparison reflects non-interest expense increases of $108,000 in
salary and benefit costs, $195,000 in occupancy expenses, $129,000 in marketing
costs, and $83,000 in professional and accounting fees. The increases reflect
the impact of market development, staff development and system upgrades over the
past 18 months and include the costs associated with six new retail stores and
pre-opening costs associated with seven more stores slated to open in 2007.
Commenting on the costs associated with investing in new markets and stores,
Cloutier said, "We will continue to feel the impact on 2007 earnings of growing
the franchise, but expect the investment to add value and continue the Company's
history of strong shareholder returns."
Franchise Growth
The Company's investment in growing the franchise was reflected in its
recent announcement of hiring a team of four experienced Houston area bankers to
lead expansion into the Greater Houston market. "The team will build a strong
banking presence and commercial lending base in northwest Houston and eventually
expand the franchise throughout Houston, which works well with our location
under construction in Conroe and our plans to move into the Woodlands," said
Cloutier. "We are focusing at least 40% of management's time on the growth
opportunities in the Texas market." The Houston office is scheduled to open in
March 2007. Construction is expected to be completed in July on the Conroe
store, and new store plans are under way for the Woodlands and College Station.
In the Louisiana market, 2007 expansion plans include two new stores in Baton
Rouge, one in Lake Charles and one in Cut Off (south of Houma).
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, Texas, headquartered
in Beaumont, Texas. The MidSouth franchise consists of 29 banking offices
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
FINANCIAL HIGHLIGHTS (UNAUDITED)
(in thousands except per share data)
For The Quarter For The
Ended Dec. 31, Qtr Ended
--------------------------- % Sept. 30, %
EARNINGS DATA 2006 2005 Chg 2006 Chg
- ------------------------------ ------------ ------------ ------------ ------------ ------------
Total interest income $ 13,405 $ 10,703 25.2% $ 13,104 2.3%
Total interest expense 4,956 3,142 57.7% 4,662 6.3%
Net interest income 8,449 7,561 11.7% 8,442 0.1%
Provision for loan losses 180 300 -40.0% 50 260.0%
Non-interest income 3,010 2,816 6.9% 3,414 -11.8%
Non-interest expense 9,070 7,867 15.3% 8,489 6.8%
Provision for income tax 460 534 -13.9% 900 -48.9%
Net income $ 1,749 $ 1,676 4.4% $ 2,417 -27.6%
PER COMMON SHARE DATA
Basic earnings per share $ 0.28 $ 0.27 2.9% $ 0.39 -28.2%
Diluted earnings per
share $ 0.28 $ 0.26 6.1% $ 0.38 -26.3%
Book value at end of
period $ 9.58 $ 8.59 11.5% $ 9.41 1.8%
Market price at end of
period $ 31.16 $ 21.59 44.3% $ 26.78 16.3%
Weighted avg shares
outstanding
Basic 6,230,314 6,157,359 1.2% 6,235,994 -0.1%
Diluted 6,351,208 6,340,790 0.2% 6,346,270 0.1%
AVERAGE BALANCE SHEET
DATA
Total assets $ 796,305 $ 683,183 16.6% $ 771,891 3.2%
Earning assets 725,384 616,347 17.7% 704,115 3.0%
Loans and leases 498,681 438,002 13.9% 489,069 2.0%
Interest-bearing
deposits 529,741 444,310 19.2% 515,358 2.8%
Total deposits 709,703 608,063 16.7% 691,640 2.6%
Total stockholders'
equity 59,369 52,695 12.7% 56,485 5.1%
SELECTED RATIOS 12/31/2006 12/31/2005 09/30/2006
- ------------------------------ ------------ ------------ ------------
Return on average
assets 0.87% 0.97% -10.5% 1.24% -29.9%
Return on average
total equity 11.69% 12.62% -7.4% 16.98% -31.2%
Return on average
realized equity (A) 11.49% 12.41% -7.4% 16.34% -29.7%
Average equity to
average assets 7.46% 7.71% -3.3% 7.32% 1.9%
Leverage capital ratio 8.34% 8.75% -4.7% 8.50% -1.9%
CREDIT QUALITY
Allowance for loan losses
as a % of total loans 1.00% 0.98% 2.0% 0.99% 1.0%
Nonperforming assets to
total assets 0.29% 0.49% -40.8% 0.31% -6.5%
Net YTD charge-offs to
total loans 0.05% 0.11% -54.5% 0.02% 150.0%
(A) 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
--------------------------- ---------------------------
Dec. 31, Dec. 31, % Sept. 30, Jun. 30,
BALANCE SHEET 2006 2005 Chg 2006 2006
- ------------------------------ ------------ ------------ ------------ ------------ ------------
Assets
Cash and cash equivalents $ 57,404 $ 52,437 9.5% $ 26,203 $ 34,070
Securities available-for-
sale 180,674 139,429 29.6% 184,536 188,344
Securities held-to-
maturity 15,901 19,611 -18.9% 16,400 17,519
Total investment
securities 196,575 159,040 23.6% 200,936 205,863
Total loans 499,046 442,794 12.7% 495,385 489,475
Allowance for loan losses (4,977) (4,355) 14.3% (4,910) (4,887)
Loans, net 494,069 438,439 12.7% 490,475 484,588
Premises and equipment 30,609 23,606 29.7% 29,113 28,572
Goodwill and other
intangibles 9,957 10,257 -2.9% 10,010 10,092
Other assets 16,408 15,036 9.1% 16,356 16,663
Total assets $ 805,022 $ 698,815 15.2% $ 773,093 $ 779,848
Liabilities and
Stockholders' Equity
Non-interest bearing
deposits $ 192,126 $ 177,946 8.0% $ 179,920 $ 186,292
Interest bearing deposits 524,054 446,992 17.2% 511,426 517,812
Total deposits 716,180 624,938 14.6% 691,346 704,104
Securities sold under
agreements to repurchase
and FHLB borrowings 10,125 1,732 484.6% 3,913 2,797
Junior subordinated
debentures 15,465 15,465 0.0% 15,465 15,465
Other liabilities 3,509 3,494 0.4% 3,333 2,664
Total liabilities 745,279 645,629 15.4% 714,057 725,030
Total shareholders' equity 59,743 53,186 12.3% 59,036 54,818
Total liabilities and
shareholders'
equity $ 805,022 $ 698,815 15.2% $ 773,093 $ 779,848
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands except per share data)
Three Months Ended Year Ended
December 31, December 31,
----------------------- % ------------------------ %
INCOME STATEMENT 2006 2005 Chg 2006 2005 Change
- ------------------------------ ---------- ---------- ---------- ---------- ---------- ----------
Interest income $ 13,405 $ 10,703 25.2% $ 50,235 $ 38,555 30.3%
Interest expense 4,956 3,142 57.7% 17,651 10,787 63.6%
Net interest income 8,449 7,561 11.7% 32,584 27,768 17.3%
Provision for loan
losses 180 300 -40.0% 850 980 -13.3%
Service charges on
deposit accounts 2,197 1,868 17.6% 8,757 8,283 5.7%
Gains on securities,
net --- --- (7) --- 100.0%
Other charges and fees 813 948 -14.2% 3,588 3,967 -9.6%
Total non-interest
income 3,010 2,816 6.9% 12,338 12,250 0.7%
Salaries and employee
benefits 4,357 3,662 19.0% 16,329 13,823 18.1%
Occupancy expense 1,655 1,568 5.5% 6,488 5,615 15.5%
Intangible amortization 52 82 -36.6% 299 483 -38.1%
Other non-interest
expense 3,006 2,555 17.7% 10,008 9,405 6.4%
Total non-interest
expense 9,070 7,867 15.3% 33,124 29,326 13.0%
Income before income
taxes 2,209 2,210 0.0% 10,948 9,712 12.7%
Provision for income
taxes 460 534 -13.9% 2,728 2,438 11.9%
Net income $ 1,749 $ 1,676 4.4% $ 8,220 $ 7,274 13.0%
Earnings per share,
diluted $ 0.28 $ 0.26 6.1% $ 1.30 $ 1.15 12.8%
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands except per share data)
Fourth Third Second First Fourth
INCOME STATEMENT Quarter Quarter Quarter Quarter Quarter
Quarterly Trends 2006 2006 2006 2006 2005
- ------------------------------ ---------- ---------- ---------- ---------- ----------
Interest income $ 13,405 $ 13,104 $ 12,691 $ 11,035 $ 10,703
Interest expense 4,956 4,662 4,396 3,638 3,142
Net interest income 8,449 8,442 8,295 7,397 7,561
Provision for loan losses 180 50 300 320 300
Net interest income after
provision for loan losses 8,269 8,392 7,995 7,077 7,261
Total non-interest income 3,010 3,414 3,071 2,843 2,816
Total non-interest expense 9,070 8,489 8,069 7,496 7,867
Income before income taxes 2,209 3,317 2,997 2,424 2,210
Income taxes 460 900 762 605 534
Net income $ 1,749 $ 2,417 $ 2,235 $ 1,819 $ 1,676
Earnings per share, basic $ 0.28 $ 0.39 $ 0.36 $ 0.29 $ 0.27
Earnings per share, diluted $ 0.28 $ 0.38 $ 0.35 $ 0.29 $ 0.26
Book value per share $ 9.58 $ 9.41 $ 8.78 $ 8.67 $ 8.59
Return on Average Equity 11.69% 16.98% 16.48% 13.74% 12.62%
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands except per share data)
Period Ended Period Ended
------------------------ -------------------------
Dec. 31, Dec. 31, % Sept. 30, Jun. 30,
Asset Quality Data 2006 2005 Chg 2006 2006
- ------------------------------ ---------- ---------- ---------- ---------- -----------
Nonaccrual loans $ 1,793 $ 660 171.7% $ 501 $ 543
Loans past due 90
days and over 98 2,511 -96.1% 1,789 2,104
Total nonperforming loans 1,891 3,171 -40.4% 2,290 2,647
Other real estate owned 368 98 275.5% 24 32
Other foreclosed assets 55 176 -68.8% 58 25
Total nonperforming assets $ 2,314 $ 3,445 -32.8% $ 2,372 $ 2,704
Nonperforming assets to
total assets 0.29% 0.49% -40.8% 0.31% 0.35%
Nonperforming assets to
total loans + OREO + other
foreclosed assets 0.46% 0.78% -41.0% 0.48% 0.55%
ALL to nonperforming assets 215.08% 126.42% 70.1% 207.00% 180.73%
ALL to nonperforming loans 263.19% 137.34% 91.6% 214.41% 184.62%
ALL to total loans 1.00% 0.98% 2.0% 0.99% 1.00%
Year-to-date charge-offs $ 542 $ 702 -22.8% $ 381 $ 310
Year-to-date recoveries 314 226 38.9% 266 223
Year-to-date net charge-offs $ 228 $ 476 -52.1% $ 115 $ 87
Net YTD charge-offs to total
loans 0.05% 0.11% -54.5% 0.02% 0.02%
Year Ended
Dec. 31, 2006
-------------------------------------
Tax
Average Equivalent Yield/
Balance Interest Rate
---------- ---------- ----------
Interest earning assets:
Interest-bearing deposits in banks
and federal funds sold $ 23,733 $ 1,149 4.84%
Taxable securities 98,173 4,459 4.54%
Tax-exempt securities 93,918 4,804 5.11%
Equity securities 2,377 80 3.38%
Loans and leases 474,520 41,145 8.67%
Total interest earning assets 692,721 51,637 7.45%
Noninterest earning assets 68,882
Total assets $ 761,603
Interest bearing liabilities:
Deposits $ 506,029 $ 16,142 3.19%
Repurchase agreements and
federal funds purchased 3,365 150 4.47%
Short term borrowings 649 33 5.14%
Junior subordinated debentures 15,465 1,330 8.60%
Total interest bearing liabilities 525,508 17,655 3.36%
Noninterest bearing liabilities 180,086
Shareholders' equity 56,009
Total interest bearing liabilities
and shareholders' equity $ 761,603
Net interest income (TE) and margin $ 33,982 4.91%
MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
YIELD ANALYSIS (UNAUDITED)
(in thousands)
Three Months Ended
Dec. 31, 2006
-------------------------------------
Tax
Average Equivalent Yield/
Balance Interest Rate
---------- ---------- ----------
Interest earning assets:
Interest-bearing deposits in banks
and federal funds sold $ 27,969 $ 370 5.25%
Taxable securities 93,604 1,080 4.62%
Tax-exempt securities 102,440 1,324 5.17%
Equity securities 2,690 19 2.80%
Loans and leases 498,681 11,001 8.75%
Total interest earning assets 725,384 13,794 7.54%
Noninterest earning assets 70,921
Total assets $ 796,305
Interest bearing liabilities:
Deposits $ 529,741 $ 4,538 3.40%
Repurchase agreements and federal
funds purchased 3,976 43 4.30%
Short term borrowings 2,576 33 5.14%
Junior subordinated debentures 15,465 345 8.86%
Total interest bearing liabilities 551,758 4,959 3.57%
Noninterest bearing liabilities 185,178
Shareholders' equity 59,369
Total interest bearing liabilities
and shareholders' equity $ 796,305
Net interest income (TE) and margin $ 8,835 4.83%
SOURCE MidSouth Bancorp, Inc.
-0- 01/25/2007
/CONTACT: C. R. Rusty Cloutier, President, +1-337-267-4201, or
+1-337-962-9900, or J. E. Corrigan, Jr., Chief Financial Officer,
+1-337-291-4984, both of MidSouth Bancorp, Inc./
(MSL)