UNITED STATES SECURITIES AND EXCHANGE COMMISSION

FORM 10Q

COMMISSION FILE NUMBER 1-11826

MIDSOUTH BANCORP, INC.

102 Versailles Boulevard, Lafayette, Louisiana
70501
(337) 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 [  ]

Check whether the issuer is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act.) YES [  ]   NO [X]

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.

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INDEX TO FORM 10-Q REPORT

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MIDSOUTH BANCORP, INC. AND SUBSIDIARIES

See notes to unaudited consolidated financial statements.

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MIDSOUTH BANCORP, INC. AND SUBSIDIARIES

See notes to unaudited consolidated financial statements.

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MIDSOUTH BANCORP, INC. AND SUBSIDIARIES

See notes to unaudited consolidated financial statements.

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MIDSOUTH BANCORP, INC. AND SUBSIDIARIES

See notes to unaudited consolidated financial statements.

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MIDSOUTH BANCORP, INC. AND SUBSIDIARIES

1.		STATEMENT BY MANAGEMENT CONCERNING 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, in accordance with accounting principles generally accepted in the United States of America, the financial position of MidSouth Bancorp, Inc. (“MidSouth”) and its subsidiaries as of September 30, 2004 and the results of their operations and their cash flows for the periods presented. These consolidated financial statements should be read in conjunction with the annual consolidated financial statements and the notes thereto included in MidSouth’s 2003 annual report and Form 10KSB.
		The results of operations for the three and nine month periods ended September 30, 2004 are not necessarily indicative of the results to be expected for the entire year.
		MidSouth applies Accounting Practices Board (APB) Opinion No. 25 and related interpretations in accounting for its stock options. Accordingly, no compensation cost has been recognized. MidSouth has adopted the disclosure-only option under SFAS No. 123. Had compensation costs for MidSouth’s stock options been determined based on the fair value at the grant date, consistent with the method under SFAS No. 123, MidSouth’s net income and earnings per share would have been as indicated below:

2.		ALLOWANCE FOR LOAN AND LOSSES
		An analysis of the activity in the allowance for loan losses is as follows:

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3.		COMPREHENSIVE INCOME
		Comprehensive income includes net income and other comprehensive income (losses) which, in the case of MidSouth, only includes unrealized gains and losses on securities available-for-sale. Following is a summary of MidSouth’s comprehensive income for the three and nine month periods ended September 30, 2004 and 2003.

4.		ACQUISITION
		On October 1, 2004, MidSouth completed a merger with, and acquired all of the outstanding common stock of, Lamar Bancshares, Inc. in a transaction to be accounted under the purchase accounting method in accordance with accounting principles generally accepted by the United States of America. MidSouth paid $10.8 million in cash and issued 369,304 shares (based on a market value of MidSouth stock of $30.91 per share) of its stock valued at $11.4 million. MidSouth also incurred approximately $171,000 in acquisition costs. In connection with the merger, MidSouth issued $8 million of junior subordinated preferred stock on September 20, 2004 in order to fund a portion of the acquisition.
		The following table summarizes the estimated fair values, in thousands, of the assets acquired and liabilities assumed on October 1, 2004:

Cash and cash equivalents		$	5,417
Securities			21,149
Loans			80,800
Premises and equipment			5,857
Core deposit intangible			2,250
Goodwill			7,945
Other assets			4,296
Total assets acquired			127,714
Deposits			96,731
Other liabilities			8,709
Total liabilities assumed			105,440
Net assets acquired		$	22,274

MidSouth is in the process of obtaining third party valuations of the premises and equipment, core deposit intangibles and certain other assets. Therefore, the purchase price and its allocation are subject to adjustment.

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Item 2.

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 2003 annual consolidated financial statements, the notes thereto and the related Management’s Discussion and Analysis contained in MidSouth’s Annual Report on Form 10KSB for the year ended December 31, 2003.

Forward Looking Statements

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 management’s discussion and analysis reflects management’s current views and estimates of future economic circumstances, industry conditions, MidSouth’s performance and financial results based on reasonable assumptions. A number of factors and uncertainties could cause actual results to differ from the anticipated results and expectations expressed in the discussion. These factors and uncertainties include, but are not limited to:

• 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 that could adversely affect customers and their ability to repay borrowings under agreed upon terms and/or adversely affect the value of the underlying collateral related to the borrowings;

• increased competition for deposits and loans which could affect 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;

• a deviation in actual experience from the underlying assumptions used to determine and establish the Allowance for Loan Losses (“ALL”);

• changes in the availability of funds resulting from reduced liquidity or increased costs;

• the timing and impact of future acquisitions, the success or failure of integrating 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;

• increased asset levels and changes in the composition of assets which would impact capital levels and regulatory capital ratios;

• loss of critical personnel and the challenge of hiring qualified personnel at reasonable compensation levels;

• changes in government regulations applicable to financial holding companies and banking;

• and acts of terrorism , weather, or other events beyond MidSouth’s control.

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Recent Developments

On October 1, 2004, MidSouth completed a merger with Lamar Bancshares of Beaumont, Texas to merge the two holding companies. The Company’s banks, MidSouth Bank and Lamar Bank will continue to operate as separate subsidiaries under MidSouth Bancorp, Inc. At closing, Lamar Bank had assets of approximately $115 million and six banking offices serving southwest Texas. Lafayette-based MidSouth Bank, with assets of approximately $506 million, will continue to serve the Louisiana market.

On October 14, 2004, MidSouth announced a five-for-four (25%) stock split on its common stock to holders of record as of October 29, 2004 payable on November 30, 2004. The Board of Directors also announced that it would continue its quarterly dividend at $.06 per share and awarded an additional $.06 Special Dividend to be paid on its common stock on January 4, 2005 to holders of record as of December 15, 2004. This will result in a total of $.12 per share to be paid to shareholders on January 4, 2005.

Overview

Third quarter 2004 net income totaled $1,954,000, a 12.6% increase over the $1,735,000 for the third quarter of 2003 and up 12% over second quarter 2004 net income of $1,745,000. Basic earnings per share were $.61 for the quarter ended September 30, 2004, up from the $.55 per share for the third quarter of 2003, and the $.55 per share in the second quarter of 2004. Diluted earnings per share were $.59 for the third quarter of 2004 compared to $.52 per share for the third quarter of 2003 and $.52 per share for the second quarter of 2004.

Earnings for the nine months ended September 30, 2004 were $5,360,000, which is a $692,000 or 14.8% increase over the $4,668,000 in earnings for the nine months ended September 30, 2003. Basic earnings per share were $1.68 for the first nine months of 2004 versus $1.47 for the first nine months of 2003. Diluted earnings per share were $1.61 and $1.41, respectively.

Net income increased $219,000 in the third quarter of 2004 compared to the third quarter of 2003, primarily due to increases in both net interest income of $271,000 and non-interest income of $386,000, including $120,000 in gains on sales of securities. These increases were partially offset by a $430,000 increase in non-interest expenses. The increased net interest income resulted from a $546,000 or 9% increase in interest income, partially offset by a $275,000 or 24% increase in interest expense on deposits. The improvement in interest income resulted from a 15% increase in average earning assets for the third quarter of 2004 compared to the third quarter of 2003. Interest expense increased due to a $43.1 million or 15% increase in the average volume of interest-bearing deposits, resulting primarily from the addition of approximately $45 million in interest-bearing deposits added through a deposit campaign from March 2004 through May 2004. Non-interest income, excluding gains on sales of securities, increased primarily due to a $396,000 increase in fees and service charges resulting from a higher volume of demand deposit accounts. Non-interest expense increased in quarterly comparison primarily due to a

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