Attached files
| file | filename |
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| 8-K - MIDSOUTH BANCORP FORM 8-K - MIDSOUTH BANCORP INC | form8-kxjuly27.htm |
| EX-99.2 - 2Q15 SUPPLEMENTAL MATERIALS - MIDSOUTH BANCORP INC | supplementalmaterialsr10.htm |
Investor Contacts: Rusty Cloutier President & CEO or Jim McLemore, CFA Sr. EVP & CFO 337.237.8343 |
MidSouth Bancorp, Inc. Reports Second Quarter 2015 Results and Declares Quarterly Dividends
Quarterly Highlights
• | Diluted operating EPS $0.35 versus $0.11 for 1Q2015 and $0.34 for 2Q2014 |
• | Linked quarter loans declined at 5% annualized rate on increased paydowns |
• | Loan loss reserve to total loans of 1.24% with $1.1 million provision |
• | Limited energy related credit downgrades in 2Q2015; one moved to TDR status |
• | Operating noninterest expenses flat at $17.0 million versus 2Q2014 and decreasing $1.2 million versus YTD 2014 |
LAFAYETTE, LA., July 27, 2015/PRNewswire-FirstCall/ -- MidSouth Bancorp, Inc. (“MidSouth”) (NYSE:MSL) today reported quarterly net earnings available to common shareholders of $4.9 million for the second quarter of 2015, compared to net earnings available to common shareholders of $3.9 million reported for the second quarter of 2014 and $1.3 million in net earnings available to common shareholders for the first quarter of 2015. Diluted earnings for the second quarter of 2015 were $0.42 per common share, compared to $0.34 per common share reported for the second quarter of 2014 and $0.12 per common share reported for the first quarter of 2015. MidSouth also announced today that its Board of Directors approved the renewal of its $75 million Universal Shelf Registration which was set to expire in August 2015.
The second quarter of 2015 included a gain on sale of securities of $1.1 million and $160,000 of income recognized from a death benefit on bank owned life insurance. The first quarter of 2015 and the second quarter of 2014 included net gains on sales of securities of $115,000 and $128,000, respectively. The second quarter of 2014 also included efficiency consultant expenses of $107,000. Excluding these non-operating income and expenses, operating earnings per share for the second quarter of 2015, the first quarter of 2015 and the second quarter of 2014 was $0.35, $0.11 and $0.34, respectively.
First quarter 2015 net earnings were impacted by a loan loss provision of $6.0 million, of which approximately $4.0 million was reserved for energy related credit downgrades on five relationships and $500,000 was added to the reserve for potential yet unidentified losses in the energy related portfolio. One energy related relationship totaling $21.4 million was classified as a troubled debt restructuring during the second quarter of 2015 by conversion of the loans to interest only for a limited amount of time.
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C. R. Cloutier, President and CEO, commenting on second quarter earnings remarked, “We continue to be proactive in working the energy related credit relationships downgraded in the first quarter of 2015 and identified two new energy related credits in the second quarter of 2015 requiring downgrading.
"As part of our ongoing active management of the entire loan portfolio, we also identified weaknesses in three commercial real estate credit relationships acquired through the merger with PSB Financial Corporation in 2012. We continue to work closely with our loan customers through these challenging market conditions."
Balance Sheet
Total consolidated assets at June 30, 2015 were $1.9 billion, compared to $2.0 billion at March 31, 2015 and $1.9 billion at June 30, 2014. Our stable core deposit base, which excludes time deposits, totaled $1.3 billion at June 30, 2015 and $1.4 billion at March 31, 2015 and accounted for 84.8% of deposits compared to 84.5% of deposits, respectively. Net loans totaled $1.3 billion at June 30, 2015 and March 31, 2015, compared to $1.2 billion at June 30, 2014. Total loans on a linked quarter basis decreased $16.5 million, or 1.3% for the quarter ended June 30, 2015. The second quarter of 2015 included a decrease of $21.2 million in outstanding energy related loans and $3.7 million of paydowns on the indirect auto loan program, which the Bank exited at the end of 2014. Net of the decreases in the energy related loan portfolio and the indirect auto loan portfolio, net loans increased $8.4 million, or 2.6% annualized, for the quarter ended June 30, 2015.
MidSouth’s Tier 1 leverage capital ratio was 9.79% at June 30, 2015 compared to 9.63% at March 31, 2015. Tier 1 risk-based capital and total risk-based capital ratios were 12.68% and 13.77% at June 30, 2015, compared to 12.30% and 13.38% at March 31, 2015, respectively. Tier 1 common equity to total risk-weighted assets at June 30, 2015 was 8.47%. Tangible common equity totaled $122.4 million at June 30, 2015, compared to $120.6 million at March 31, 2015. Tangible book value per share at June 30, 2015 was $10.78 versus $10.63 at March 31, 2015.
Asset Quality
Nonperforming assets totaled $29.1 million at June 30, 2015, an increase of $11.5 million compared to $17.6 million reported at March 31, 2015. The increase resulted primarily from the addition of a $10.1 million commercial real estate (CRE) relationship unrelated to energy that was placed on nonaccrual status during the quarter. Allowance coverage for nonperforming loans decreased to 65.55% at June 30, 2015, compared to 124.17% at March 31, 2015. The ALLL/total loans ratio was 1.24 % at June 30, 2015 and 1.23% at March 31, 2015. Including valuation accounting adjustments on acquired loans, the total valuation accounting adjustment plus ALLL was 1.59% of loans at June 30, 2015. The ratio of annualized net charge-offs to total loans was 0.34% for the three months ended June 30, 2015 compared to 0.36% for the three months ended March 31, 2015.
Total nonperforming assets to total loans plus ORE and other assets repossessed was 2.24% at June 30, 2015 compared to 1.34% at March 31, 2015. Loans classified as troubled debt restructurings (“TDRs”) totaled $21.8 million at June 30, 2015 compared to $407,000 at March
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31, 2015. The $21.4 million of loans restructured during the second quarter of 2015 represented a single, energy-related relationship. The relationship was identified as a TDR by conversion of the loans to interest only for a limited amount of time and was still accruing interest at June 30, 2015. Classified assets, including ORE, increased $0.9 million, or 1.2%, to $75.6 million at June 30, 2015 compared to $74.7 million at March 31, 2015.
MidSouth’s energy related loan portfolio at June 30, 2015 totaled $266 million, or 20.6% of total loans, including a $20 million CD secured loan, down from $288 million at March 31, 2015. The majority of MidSouth’s energy lending is focused on oil field service companies. Of the 441 total relationships in our energy related loan portfolio, 14 relationships totaling $30.5 million were classified, with $0.7 million on nonaccrual status at June 30, 2015. A total of $1.15 million is reserved for potential yet unidentified losses in the energy related portfolio.
More information on our energy loan portfolio can be found on our website at MidSouthBank.com under Investor Relations/Presentations.
Second Quarter 2015 vs. Second Quarter 2014 Earnings Comparison
Second quarter 2015 net earnings available to common shareholders totaled $4.9 million compared to $3.9 million for the second quarter of 2014. The second quarter of 2015 included $1.1 million of gain on sales of securities and $160,000 of income from a death benefit on bank owned life insurance, and the second quarter of 2014 included $128,000 of gain on sales of securities. Excluding these non-operating revenues, revenues from consolidated operations totaled $24.3 million for the second quarter of 2015, unchanged from the $24.2 million reported for the second quarter of 2014. Net interest income increased $268,000 in quarterly comparison primarily due to a $499,000 increase in interest income earned on a higher volume of loans which was partially offset by a $313,000 decrease in interest income on investment securities which declined in volume. Additionally, a $169,000 decrease in interest expense on junior subordinated debentures was partially offset by a $106,000 increase in interest expense on deposits and repurchase agreements. Excluding non-operating income of $1.3 million and $128,000 for the second quarters of 2015 and 2014, respectively, noninterest income decreased $255,000 in quarterly comparison, from $5.1 million for the three months ended June 30, 2014 to $4.9 million for the three months ended June 30, 2015. The decrease in noninterest income resulted primarily from a $311,000 reduction in service charges on deposit accounts, including NSF fees.
Excluding the $107,000 of efficiency consultant expenses in the second quarter of 2014, noninterest expenses totaled $17.0 million for both three month periods ending June 30, 2015 and 2014. A decrease of $291,000 in salaries and benefits costs was offset by an increase of $176,000 in occupancy expenses as well as smaller increases in several other noninterest expense categories. The provision for loan losses decreased $100,000 in quarterly comparison. Income tax expense increased $408,000 in quarterly comparison.
Dividends paid on the Series B Preferred Stock issued to the Treasury as a result of our participation in the Small Business Lending Fund (“SBLF”) totaled $80,000 for the second quarter of 2015 based on a dividend rate of 1.00%. The dividend rate is set at 1.00% through February 25, 2016. The Series C Preferred Stock issued with the December 28, 2012 acquisition
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of PSB Financial Corporation (“PSB”) paid dividends totaling $92,000 for the three months ended June 30, 2015.
Fully taxable-equivalent (“FTE”) net interest income totaled $19.7 million and $19.5 million for the quarters ended June 30, 2015 and 2014, respectively. The FTE net interest income increased $217,000 in prior year quarterly comparison primarily due to a $499,000 increase in interest income on loans. The increased interest income on loans resulted from a $106.4 million increase in the average volume of loans in quarterly comparison. The average yield on loans decreased 33 basis points, from 5.91% to 5.58%. The purchase accounting adjustments added 19 basis points to the average yield on loans for the second quarter of 2015 and 23 basis points to the average yield on loans for the second quarter of 2014. Net of the impact of the purchase accounting adjustments, average loan yields declined 29 basis points in prior year quarterly comparison, from 5.68% to 5.39%. Loan yields have declined primarily as the result of a sustained low interest rate environment.
Investment securities totaled $426.9 million, or 21.9% of total assets at June 30, 2015, versus $450.0 million, or 23.7% of total assets at June 30, 2014. The investment portfolio had an effective duration of 3.9 years and a net unrealized gain of $1.9 million at June 30, 2015. The average volume of investment securities decreased $45.5 million in prior year quarterly comparison. The average tax equivalent yield on investment securities decreased 6 basis points, from 2.63% to 2.57%. The $45.5 million decrease in the average volume of investment securities was used to fund loan growth during the same period.
The average yield on all earning assets decreased 24 basis points in prior year quarterly comparison, from 4.93% for the second quarter of 2014 to 4.69% for the second quarter of 2015. Net of the impact of purchase accounting adjustments, the average yield on total earning assets decreased 22 basis points, from 4.77% to 4.55% for the three month periods ended June 30, 2014 and 2015, respectively, due to a decline in the average rate earned on loans.
The impact to interest expense of a $43.5 million increase in the average volume of interest- bearing liabilities was offset by a 4 basis point decrease in the average rate paid on interest- bearing liabilities, from 0.46% at June 30, 2014 to 0.42% at June 30, 2015. Net of purchase accounting adjustments on acquired certificates of deposit and FHLB borrowings, the average rate paid on interest-bearing liabilities was 0.51% for the second quarter of 2014 and declined to 0.46% for the second quarter of 2015.
As a result of these changes in volume and yield on earning assets and interest-bearing liabilities, the FTE net interest margin decreased 20 basis points, from 4.58% for the second quarter of 2014 to 4.38% for the second quarter of 2015. Net of purchase accounting adjustments on loans, deposits and FHLB borrowings, the FTE margin decreased 18 basis points, from 4.39% for the second quarter of 2014 to 4.21% for the second quarter of 2015.
Second Quarter 2015 vs. First Quarter 2015 Earnings Comparison
In sequential-quarter comparison, net earnings available to common shareholders increased $3.6 million primarily due to a $4.9 million decrease in the provision for loan losses. Net interest income increased $124,000 in sequential-quarter comparison. Second quarter noninterest
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income included gain on sale of securities of $1.1 million and income from a death benefit on bank owned life insurance of $160,000. First quarter included gain on sales of securities of $115,000. Excluding these non-operating revenues, noninterest income totaled $4.9 million for the three month periods ended June 30, 2015 and March 31, 2015.
Noninterest expense increased $718,000 in sequential-quarter comparison and consisted primarily of increases of $255,000 in salaries and benefits costs (including a $237,000 increase in group health costs), $130,000 in marketing expenses, $180,000 in occupancy expenses and $67,000 in corporate development expense.
FTE net interest income increased $111,000 in sequential-quarter comparison primarily due to a $214,000 increase in interest income on loans, which included a $223,000 increase in purchase accounting adjustments on acquired loans. The average yield on loans decreased 6 basis points, from 5.64% for the first quarter of 2015 to 5.58% for the second quarter of 2015. Net of purchase accounting adjustments, the loan yield declined 12 basis points, from 5.51% to 5.39% during the same period. The average yield on total earning assets decreased 8 basis points for the same period, from 4.77% to 4.69%, respectively. As a result of these changes in volume and yield on earning assets, the FTE net interest margin decreased 6 basis points, from 4.44% to 4.38%. Net of purchase accounting adjustments, the FTE net interest margin decreased 11 basis points, from 4.32% for the first quarter of 2015 to 4.21% for the second quarter of 2015.
Year-Over-Year Earnings Comparison
In year-over-year comparison, net earnings available to common shareholders decreased $4.4 million, from $10.6 million at June 30, 2014 to $6.2 million at June 30, 2015. The decrease resulted primarily from the $3.0 million of life insurance proceeds recorded as noninterest income in the first quarter of 2014. The first six months of 2014 also included $128,000 in gain on sales of securities, $160,000 of efficiency consultant expenses and $189,000 of expenses related to the loss of an executive officer. The first six months of 2015 included $1.2 million in gain on sales of securities and $160,000 of income from a death benefit on bank owned life insurance. Excluding these non-operating revenues and expenses, net earnings available to common shareholders decreased $2.5 million in year-over-year comparison. The $2.5 million decrease in operating earnings in year-over-year comparison resulted primarily from a $5.4 million increase in the provision for loan losses. A decrease of $320,000 in noninterest income also contributed to the decrease in operating earnings. The increase in the provision for loan losses and the decrease in noninterest income were partially offset by a $630,000 increase in net interest income, a $1.2 million decrease in noninterest expenses and a $1.3 million decrease in income tax expense.
Excluding non-operating income, decreases in noninterest income consisted primarily of $571,000 in service charges on deposit accounts (primarily NSF fees) and $72,000 in income on ORE, which was partially offset by a $139,000 increase in ATM and debit card income and a $200,000 increase in mortgage banking fees. Excluding the non-operating expenses in 2014, decreases in noninterest expense primarily included $1.0 million in salaries and benefits costs, $115,000 in expenses on ORE and other repossessed assets and $120,000 in postage and freight. The decreased expenses were partially offset by a $114,000 increase in legal and professional fees.
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In year-to-date comparison, FTE net interest income increased $521,000 primarily due to a $376,000 decrease in interest income. Interest income on loans increased $1.1 million despite a $778,000 reduction in purchase accounting adjustments on acquired loans. The average volume of loans increased $128.7 million in year-over-year comparison, and the average yield on loans decreased 43 basis points, from 6.04% to 5.61%. The increase in interest income on loans was offset by a $742,000 reduction in interest income on investment securities. The average volume of investment securities decreased $60.0 million in year-over-year comparison. The average yield on earning assets decreased in year-over-year comparison, from 4.98% at June 30, 2014 to 4.73% at June 30, 2015. The purchase accounting adjustments added 32 basis points to the average yield on loans for the six months ended June 30, 2014 and 16 basis points for the six months ended June 30, 2015. Net of purchase accounting adjustments, the average yield on earning assets decreased 14 basis points, from 4.75% at June 30, 2014 to 4.61% at June 30, 2015.
Interest expense decreased $145,000 in year-over-year comparison primarily due to a 4 basis point decrease in the average rate paid on interest-bearing liabilities, from 0.47% at June 30, 2014 to 0.43% at June 30, 2015. Net of purchase accounting adjustments, the average rate paid on interest-bearing liabilities decreased 6 basis points, from 0.52% at June 30, 2014 to 0.46% at June 30, 2015. The FTE net interest margin decreased 21 basis points, from 4.62% for the six months ended June 30, 2014 to 4.41% for the six months ended June 30, 2015. Net of purchase accounting adjustments, the FTE net interest margin decreased 9 basis points, from 4.36% to 4.27% for the six months ended June 30, 2014 and 2015, respectively, primarily due to a decline in the average rate earned on loans.
Dividends
MidSouth’s Board of Directors announced a cash dividend was declared in the amount of $0.09 per share to be paid on its common stock on October 1, 2015 to shareholders of record as of the close of business on September 15, 2015. Additionally, a quarterly cash dividend of 1.00% per preferred share on its 4.00% Non-Cumulative Perpetual Convertible Preferred Stock, Series C was declared payable on October 15, 2015 to shareholders of record as of the close of business on October 1, 2015. MidSouth’s Series C Preferred Stock is quoted on the OTC Bulletin Board (“OTCBB”) under the ticker symbol MSLXP.
About MidSouth Bancorp, Inc.
MidSouth Bancorp, Inc. is a financial holding company headquartered in Lafayette, Louisiana, with assets of $1.9 billion as of June 30, 2015. 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 58 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.
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
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Securities Litigation Reform Act of 1995, which involve risks and uncertainties. These statements include, among others, the expected loan loss provision and future operating results. Actual results may differ materially from the results anticipated in these 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, 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; the timing and ability to reach any agreement to restructure nonaccrual loans; increased competition for deposits and loans which could affect compositions, rates and terms; 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; loss of critical personnel and the challenge of hiring qualified personnel at reasonable compensation levels; legislative and regulatory changes, including 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; and other factors discussed under the heading “Risk Factors” in MidSouth’s Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC on March 13, 2015 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 | 6/30/2015 | 3/31/2015 | 12/31/2014 | 9/30/2014 | 6/30/2014 | |||||||||||||||
Total interest income | $ | 20,798 | $ | 20,681 | $ | 21,477 | $ | 21,016 | $ | 20,595 | ||||||||||
Total interest expense | 1,417 | 1,424 | 1,317 | 1,504 | 1,482 | |||||||||||||||
Net interest income | 19,381 | 19,257 | 20,160 | 19,512 | 19,113 | |||||||||||||||
FTE net interest income | 19,676 | 19,565 | 20,496 | 19,856 | 19,459 | |||||||||||||||
Provision for loan losses | 1,100 | 6,000 | 2,700 | 1,175 | 1,200 | |||||||||||||||
Non-interest income | 6,166 | 4,967 | 5,050 | 6,194 | 5,261 | |||||||||||||||
Non-interest expense | 17,005 | 16,287 | 17,327 | 17,857 | 17,123 | |||||||||||||||
Earnings before income taxes | 7,442 | 1,937 | 5,183 | 6,674 | 6,051 | |||||||||||||||
Income tax expense | 2,343 | 446 | 1,519 | 2,202 | 1,935 | |||||||||||||||
Net earnings | 5,099 | 1,491 | 3,664 | 4,472 | 4,116 | |||||||||||||||
Dividends on preferred stock | 172 | 173 | 174 | 174 | 170 | |||||||||||||||
Net earnings available to common shareholders | $ | 4,927 | $ | 1,318 | $ | 3,490 | $ | 4,298 | $ | 3,946 | ||||||||||
PER COMMON SHARE DATA | ||||||||||||||||||||
Basic earnings per share | 0.43 | 0.12 | 0.31 | 0.38 | 0.35 | |||||||||||||||
Diluted earnings per share | 0.42 | 0.12 | 0.30 | 0.37 | 0.34 | |||||||||||||||
Diluted earnings per share, operating (Non-GAAP)(*) | 0.35 | 0.11 | 0.31 | 0.36 | 0.34 | |||||||||||||||
Quarterly dividends per share | 0.09 | 0.09 | 0.09 | 0.09 | 0.09 | |||||||||||||||
Book value at end of period | 15.04 | 14.92 | 14.78 | 14.52 | 14.25 | |||||||||||||||
Tangible book value at period end (Non-GAAP)(*) | 10.78 | 10.63 | 10.46 | 10.17 | 9.86 | |||||||||||||||
Market price at end of period | 15.26 | 14.75 | 17.34 | 18.70 | 19.89 | |||||||||||||||
Shares outstanding at period end | 11,359,396 | 11,349,285 | 11,340,736 | 11,336,594 | 11,296,147 | |||||||||||||||
Weighted average shares outstanding | ||||||||||||||||||||
Basic | 11,323,506 | 11,317,667 | 11,314,690 | 11,313,879 | 11,288,045 | |||||||||||||||
Diluted | 11,849,683 | 11,351,239 | 11,933,388 | 11,954,811 | 11,922,525 | |||||||||||||||
AVERAGE BALANCE SHEET DATA | ||||||||||||||||||||
Total assets | $ | 1,976,574 | $ | 1,966,752 | $ | 1,929,750 | $ | 1,892,609 | $ | 1,887,726 | ||||||||||
Loans and leases | 1,312,359 | 1,298,317 | 1,264,011 | 1,232,196 | 1,205,930 | |||||||||||||||
Total deposits | 1,593,318 | 1,592,153 | 1,563,006 | 1,525,059 | 1,532,910 | |||||||||||||||
Total common equity | 170,885 | 170,638 | 167,430 | 163,855 | 159,766 | |||||||||||||||
Total tangible common equity (Non-GAAP)(*) | 122,299 | 121,778 | 118,291 | 114,438 | 110,075 | |||||||||||||||
Total equity | 212,112 | 211,985 | 208,816 | 205,291 | 201,257 | |||||||||||||||
SELECTED RATIOS | ||||||||||||||||||||
Annualized return on average assets, operating (Non-GAAP)(*) | 0.82 | % | 0.26 | % | 0.74 | % | 0.87 | % | 0.84 | % | ||||||||||
Annualized return on average common equity, operating (Non-GAAP)(*) | 9.47 | % | 2.95 | % | 8.51 | % | 10.05 | % | 9.87 | % | ||||||||||
Annualized return on average tangible common equity, operating (Non-GAAP)(*) | 13.23 | % | 4.14 | % | 12.04 | % | 14.39 | % | 14.33 | % | ||||||||||
Pre-tax, pre-provision annualized return on average assets, operating (Non-GAAP)(*) | 1.47 | % | 1.61 | % | 1.65 | % | 1.6 | % | 1.54 | % | ||||||||||
Efficiency ratio, operating (Non-GAAP)(*) | 70.08 | % | 67.48 | % | 67.81 | % | 69.05 | % | 70.19 | % | ||||||||||
Average loans to average deposits | 82.37 | % | 81.54 | % | 80.87 | % | 80.8 | % | 78.67 | % | ||||||||||
Taxable-equivalent net interest margin | 4.38 | % | 4.44 | % | 4.65 | % | 4.61 | % | 4.58 | % | ||||||||||
Tier 1 leverage capital ratio | 9.79 | % | 9.63 | % | 9.52 | % | 9.56 | % | 9.81 | % | ||||||||||
CREDIT QUALITY | ||||||||||||||||||||
Allowance for loan and lease losses (ALLL) as a % of total loans | 1.24 | % | 1.23 | % | 0.87 | % | 0.75 | % | 0.74 | % | ||||||||||
Nonperforming assets to tangible equity + ALLL | 16.18 | % | 9.87 | % | 8.83 | % | 7.5 | % | 8.34 | % | ||||||||||
Nonperforming assets to total loans, other real estate owned and other repossessed assets | 2.24 | % | 1.34 | % | 1.17 | % | 0.99 | % | 1.1 | % | ||||||||||
Annualized QTD net charge-offs to total loans | 0.34 | % | 0.36 | % | 0.28 | % | 0.26 | % | 0.29 | % | ||||||||||
(*) See reconciliation of Non-GAAP financial measures on pages 13-15. | ||||||||||||||||||||
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MIDSOUTH BANCORP, INC. and SUBSIDIARIES | ||||||||||||||||||||
Condensed Consolidated Financial Information (unaudited) | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
BALANCE SHEET | June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||||
2015 | 2015 | 2014 | 2014 | 2014 | ||||||||||||||||
Assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 82,636 | $ | 104,402 | $ | 86,872 | $ | 54,215 | $ | 63,935 | ||||||||||
Securities available-for-sale | 300,335 | 299,690 | 276,984 | 288,397 | 301,028 | |||||||||||||||
Securities held-to-maturity | 126,529 | 137,592 | 141,201 | 145,030 | 148,927 | |||||||||||||||
Total investment securities | 426,864 | 437,282 | 418,185 | 433,427 | 449,955 | |||||||||||||||
Other investments | 10,598 | 9,644 | 9,990 | 12,091 | 12,090 | |||||||||||||||
Total loans | 1,294,392 | 1,310,929 | 1,284,431 | 1,248,373 | 1,224,182 | |||||||||||||||
Allowance for loan losses | (16,048 | ) | (16,060 | ) | (11,226 | ) | (9,425 | ) | (9,075 | ) | ||||||||||
Loans, net | 1,278,344 | 1,294,869 | 1,273,205 | 1,238,948 | 1,215,107 | |||||||||||||||
Premises and equipment | 69,263 | 69,762 | 69,958 | 71,115 | 71,787 | |||||||||||||||
Goodwill and other intangibles | 48,452 | 48,729 | 49,005 | 49,282 | 49,559 | |||||||||||||||
Other assets | 32,627 | 30,570 | 29,525 | 32,682 | 33,845 | |||||||||||||||
Total assets | $ | 1,948,784 | $ | 1,995,258 | $ | 1,936,740 | $ | 1,891,760 | $ | 1,896,278 | ||||||||||
Liabilities and Shareholders' Equity | ||||||||||||||||||||
Non-interest bearing deposits | $ | 408,742 | $ | 421,897 | $ | 390,863 | $ | 396,263 | $ | 389,734 | ||||||||||
Interest-bearing deposits | 1,149,508 | 1,194,201 | 1,194,371 | 1,124,581 | 1,135,688 | |||||||||||||||
Total deposits | 1,558,250 | 1,616,098 | 1,585,234 | 1,520,844 | 1,525,422 | |||||||||||||||
Securities sold under agreements to repurchase | 84,547 | 87,346 | 62,098 | 70,964 | 67,574 | |||||||||||||||
Short-term FHLB advances | 40,000 | 25,000 | 25,000 | 35,000 | 35,000 | |||||||||||||||
Other borrowings | 26,064 | 26,171 | 26,277 | 26,384 | 26,990 | |||||||||||||||
Junior subordinated debentures | 22,167 | 22,167 | 22,167 | 22,167 | 29,384 | |||||||||||||||
Other liabilities | 5,720 | 7,820 | 6,952 | 10,387 | 9,492 | |||||||||||||||
Total liabilities | 1,736,748 | 1,784,602 | 1,727,728 | 1,685,746 | 1,693,862 | |||||||||||||||
Total shareholders' equity | 212,036 | 210,656 | 209,012 | 206,014 | 202,416 | |||||||||||||||
Total liabilities and shareholders' equity | $ | 1,948,784 | $ | 1,995,258 | $ | 1,936,740 | $ | 1,891,760 | $ | 1,896,278 | ||||||||||
9
MIDSOUTH BANCORP, INC. and SUBSIDIARIES | ||||||||||||||||||||
Condensed Consolidated Financial Information (unaudited) | ||||||||||||||||||||
(in thousands except per share data) | ||||||||||||||||||||
EARNINGS STATEMENT | Three Months Ended | |||||||||||||||||||
6/30/2015 | 3/31/2015 | 12/31/2014 | 9/30/2014 | 6/30/2014 | ||||||||||||||||
Interest income: | ||||||||||||||||||||
Loans, including fees | $ | 17,709 | $ | 17,717 | $ | 18,045 | $ | 17,670 | $ | 17,183 | ||||||||||
Investment securities | 2,412 | 2,509 | 2,566 | 2,617 | 2,725 | |||||||||||||||
Accretion of purchase accounting adjustments | 559 | 337 | 757 | 603 | 586 | |||||||||||||||
Other interest income | 118 | 118 | 109 | 126 | 101 | |||||||||||||||
Total interest income | 20,798 | 20,681 | 21,477 | 21,016 | 20,595 | |||||||||||||||
Interest expense: | ||||||||||||||||||||
Deposits | 949 | 984 | 973 | 915 | 926 | |||||||||||||||
Borrowings | 436 | 418 | 401 | 409 | 395 | |||||||||||||||
Junior subordinated debentures | 151 | 150 | 80 | 327 | 320 | |||||||||||||||
Accretion of purchase accounting adjustments | (119 | ) | (128 | ) | (137 | ) | (147 | ) | (159 | ) | ||||||||||
Total interest expense | 1,417 | 1,424 | 1,317 | 1,504 | 1,482 | |||||||||||||||
Net interest income | 19,381 | 19,257 | 20,160 | 19,512 | 19,113 | |||||||||||||||
Provision for loan losses | 1,100 | 6,000 | 2,700 | 1,175 | 1,200 | |||||||||||||||
Net interest income after provision for loan losses | 18,281 | 13,257 | 17,460 | 18,337 | 17,913 | |||||||||||||||
Noninterest income: | ||||||||||||||||||||
Service charges on deposit accounts | 2,137 | 2,120 | 2,395 | 2,556 | 2,448 | |||||||||||||||
ATM and debit card income | 1,865 | 1,841 | 1,834 | 1,808 | 1,853 | |||||||||||||||
Gain on securities, net (non-operating)(*) | 1,128 | 115 | — | — | 128 | |||||||||||||||
Gain on sale of ORE (non-operating)(*) | — | — | — | 1,079 | — | |||||||||||||||
Mortgage lending | 145 | 153 | 151 | 161 | 49 | |||||||||||||||
Income from death benefit on bank owned life insurance (non-operating)(*) | 160 | — | — | — | — | |||||||||||||||
Other charges and fees | 731 | 738 | 670 | 590 | 783 | |||||||||||||||
Total non-interest income | 6,166 | 4,967 | 5,050 | 6,194 | 5,261 | |||||||||||||||
Noninterest expense: | ||||||||||||||||||||
Salaries and employee benefits | 8,197 | 7,942 | 8,259 | 8,287 | 8,488 | |||||||||||||||
Occupancy expense | 3,865 | 3,685 | 3,750 | 3,834 | 3,689 | |||||||||||||||
ATM and debit card | 693 | 663 | 699 | 793 | 707 | |||||||||||||||
Legal and professional fees | 382 | 345 | 330 | 342 | 326 | |||||||||||||||
FDIC premiums | 331 | 281 | 268 | 269 | 251 | |||||||||||||||
Marketing | 417 | 287 | 543 | 396 | 366 | |||||||||||||||
Corporate development | 387 | 320 | 381 | 342 | 331 | |||||||||||||||
Data processing | 467 | 457 | 462 | 503 | 483 | |||||||||||||||
Printing and supplies | 255 | 225 | 280 | 279 | 275 | |||||||||||||||
Expenses on ORE and other assets repossessed | 133 | 153 | 169 | 122 | 172 | |||||||||||||||
Amortization of core deposit intangibles | 276 | 277 | 276 | 277 | 276 | |||||||||||||||
Loss on disposal of fixed assets (non-operating)(*) | — | — | — | 394 | — | |||||||||||||||
Loss on redemption of Trust Preferred Securities (non-operating)(*) | — | — | — | 258 | — | |||||||||||||||
Efficiency consultant expenses (non-operating)(*) | — | — | 156 | 200 | 107 | |||||||||||||||
Other non-interest expense | 1,602 | 1,652 | 1,754 | 1,561 | 1,652 | |||||||||||||||
Total non-interest expense | 17,005 | 16,287 | 17,327 | 17,857 | 17,123 | |||||||||||||||
Earnings before income taxes | 7,442 | 1,937 | 5,183 | 6,674 | 6,051 | |||||||||||||||
Income tax expense | 2,343 | 446 | 1,519 | 2,202 | 1,935 | |||||||||||||||
Net earnings | 5,099 | 1,491 | 3,664 | 4,472 | 4,116 | |||||||||||||||
Dividends on preferred stock | 172 | 173 | 174 | 174 | 170 | |||||||||||||||
Net earnings available to common shareholders | $ | 4,927 | $ | 1,318 | $ | 3,490 | $ | 4,298 | $ | 3,946 | ||||||||||
Earnings per common share, diluted | $ | 0.42 | $ | 0.12 | $ | 0.30 | $ | 0.37 | $ | 0.34 | ||||||||||
Operating earnings per common share, diluted (Non-GAAP)(*) | $ | 0.35 | $ | 0.11 | $ | 0.31 | $ | 0.36 | $ | 0.34 | ||||||||||
(*) See reconciliation of Non-GAAP financial measures on pages 13-15. | ||||||||||||||||||||
10
MIDSOUTH BANCORP, INC. and SUBSIDIARIES | ||||||||||||||||||||||||||
Condensed Consolidated Financial Information (unaudited) | ||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
COMPOSITION OF LOANS | June 30, | Percent | March 31, | December 31, | September 30, | June 30, | Percent | |||||||||||||||||||
2015 | of Total | 2015 | 2014 | 2014 | 2014 | of Total | ||||||||||||||||||||
Commercial, financial, and agricultural | $ | 471,397 | 36.42 | % | $ | 484,508 | $ | 467,147 | $ | 452,065 | $ | 454,310 | 37.11 | % | ||||||||||||
Lease financing receivable | 5,561 | 0.43 | % | 6,350 | 4,857 | 5,285 | 4,750 | 0.39 | % | |||||||||||||||||
Real estate - construction | 79,176 | 6.12 | % | 76,964 | 68,577 | 86,315 | 86,238 | 7.04 | % | |||||||||||||||||
Real estate - commercial | 469,022 | 36.23 | % | 471,737 | 467,172 | 430,930 | 413,565 | 33.78 | % | |||||||||||||||||
Real estate - residential | 153,820 | 11.88 | % | 153,647 | 154,602 | 153,915 | 153,082 | 12.50 | % | |||||||||||||||||
Installment loans to individuals | 113,626 | 8.78 | % | 115,284 | 119,328 | 116,340 | 108,581 | 8.87 | % | |||||||||||||||||
Other | 1,790 | 0.14 | % | 2,439 | 2,748 | 3,523 | 3,656 | 0.30 | % | |||||||||||||||||
Total loans | $ | 1,294,392 | $ | 1,310,929 | $ | 1,284,431 | $ | 1,248,373 | $ | 1,224,182 | ||||||||||||||||
COMPOSITION OF DEPOSITS | ||||||||||||||||||||||||||
June 30, | Percent | March 31, | December 31, | September 30, | June 30, | Percent | ||||||||||||||||||||
2015 | of Total | 2015 | 2014 | 2014 | 2014 | of Total | ||||||||||||||||||||
Noninterest bearing | $ | 408,742 | 26.23 | % | $ | 421,897 | $ | 390,863 | $ | 396,263 | $ | 389,734 | 25.55 | % | ||||||||||||
NOW & Other | 458,338 | 29.41 | % | 480,454 | 469,627 | 447,403 | 443,287 | 29.06 | % | |||||||||||||||||
Money Market/Savings | 453,902 | 29.13 | % | 463,625 | 473,290 | 460,100 | 470,731 | 30.86 | % | |||||||||||||||||
Time Deposits of less than $100,000 | 90,348 | 5.80 | % | 94,730 | 96,577 | 101,373 | 104,423 | 6.85 | % | |||||||||||||||||
Time Deposits of $100,000 or more | 146,920 | 9.43 | % | 155,392 | 154,877 | 115,705 | 117,247 | 7.69 | % | |||||||||||||||||
Total deposits | $ | 1,558,250 | $ | 1,616,098 | $ | 1,585,234 | $ | 1,520,844 | $ | 1,525,422 | ||||||||||||||||
ASSET QUALITY DATA | ||||||||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||||||||
2015 | 2015 | 2014 | 2014 | 2014 | ||||||||||||||||||||||
Nonaccrual loans | $ | 23,873 | $ | 12,894 | $ | 10,701 | $ | 7,750 | $ | 6,913 | ||||||||||||||||
Loans past due 90 days and over | 609 | 40 | 187 | 23 | 203 | |||||||||||||||||||||
Total nonperforming loans | 24,482 | 12,934 | 10,888 | 7,773 | 7,116 | |||||||||||||||||||||
Other real estate | 4,542 | 4,589 | 4,234 | 4,663 | 6,314 | |||||||||||||||||||||
Other repossessed assets | 38 | 43 | — | 19 | 81 | |||||||||||||||||||||
Total nonperforming assets | $ | 29,062 | $ | 17,566 | $ | 15,122 | $ | 12,455 | $ | 13,511 | ||||||||||||||||
Troubled debt restructurings | $ | 21,763 | $ | 407 | $ | 410 | $ | 416 | $ | 417 | ||||||||||||||||
Nonperforming assets to total assets | 1.49 | % | 0.88 | % | 0.78 | % | 0.66 | % | 0.71 | % | ||||||||||||||||
Nonperforming assets to total loans + ORE + other repossessed assets | 2.24 | % | 1.34 | % | 1.17 | % | 0.99 | % | 1.10 | % | ||||||||||||||||
ALLL to nonperforming loans | 65.55 | % | 124.17 | % | 103.10 | % | 121.25 | % | 127.53 | % | ||||||||||||||||
ALLL to total loans | 1.24 | % | 1.23 | % | 0.87 | % | 0.75 | % | 0.74 | % | ||||||||||||||||
Quarter-to-date charge-offs | $ | 1,151 | $ | 1,332 | $ | 985 | $ | 1,253 | $ | 990 | ||||||||||||||||
Quarter-to-date recoveries | 39 | 166 | 86 | 428 | 100 | |||||||||||||||||||||
Quarter-to-date net charge-offs | $ | 1,112 | $ | 1,166 | $ | 899 | $ | 825 | $ | 890 | ||||||||||||||||
Annualized QTD net charge-offs to total loans | 0.34 | % | 0.36 | % | 0.28 | % | 0.26 | % | 0.29 | % | ||||||||||||||||
11
MIDSOUTH BANCORP, INC. and SUBSIDIARIES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidated Financial Information (unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
YIELD ANALYSIS | Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2015 | March 31, 2015 | December 31, 2014 | September 30, 2014 | June 30, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | 345,108 | $ | 1,853 | 2.15 | % | $ | 336,337 | $ | 1,925 | 2.29 | % | $ | 339,536 | $ | 1,936 | 2.28 | % | $ | 351,645 | $ | 1,965 | 2.24 | % | $ | 379,124 | $ | 2,064 | 2.18 | % | |||||||||||||||||||||||||
Tax-exempt securities | 76,433 | 854 | 4.47 | % | 78,948 | 892 | 4.52 | % | 83,612 | 966 | 4.62 | % | 86,528 | 996 | 4.60 | % | 87,964 | 1,007 | 4.58 | % | |||||||||||||||||||||||||||||||||||
Total investment securities | 421,541 | 2,707 | 2.57 | % | 415,285 | 2,817 | 2.71 | % | 423,148 | 2,902 | 2.74 | % | 438,173 | 2,961 | 2.70 | % | 467,088 | 3,071 | 2.63 | % | |||||||||||||||||||||||||||||||||||
Federal funds sold | 3,228 | 2 | 0.25 | % | 3,816 | 2 | 0.21 | % | 3,792 | 2 | 0.21 | % | 3,143 | 2 | 0.25 | % | 2,260 | 1 | 0.18 | % | |||||||||||||||||||||||||||||||||||
Time and interest bearing deposits in other banks | 56,110 | 35 | 0.25 | % | 59,225 | 37 | 0.25 | % | 44,841 | 28 | 0.24 | % | 22,922 | 15 | 0.26 | % | 16,789 | 11 | 0.26 | % | |||||||||||||||||||||||||||||||||||
Other investments | 10,057 | 81 | 3.22 | % | 9,754 | 79 | 3.24 | % | 11,063 | 79 | 2.86 | % | 12,090 | 109 | 3.61 | % | 11,679 | 89 | 3.05 | % | |||||||||||||||||||||||||||||||||||
Loans | 1,312,359 | 18,268 | 5.58 | % | 1,298,317 | 18,054 | 5.64 | % | 1,264,011 | 18,802 | 5.90 | % | 1,232,196 | 18,273 | 5.88 | % | 1,205,930 | 17,769 | 5.91 | % | |||||||||||||||||||||||||||||||||||
Total interest earning assets | 1,803,295 | 21,093 | 4.69 | % | 1,786,397 | 20,989 | 4.77 | % | 1,746,855 | 21,813 | 4.95 | % | 1,708,524 | 21,360 | 4.96 | % | 1,703,746 | 20,941 | 4.93 | % | |||||||||||||||||||||||||||||||||||
Non-interest earning assets | 173,279 | 180,355 | 182,895 | 184,085 | 183,980 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 1,976,574 | $ | 1,966,752 | $ | 1,929,750 | $ | 1,892,609 | $ | 1,887,726 | |||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits | $ | 1,181,381 | $ | 921 | 0.31 | % | $ | 1,192,086 | $ | 947 | 0.32 | % | $ | 1,158,317 | $ | 927 | 0.32 | % | $ | 1,132,132 | $ | 859 | 0.30 | % | $ | 1,156,638 | $ | 858 | 0.30 | % | |||||||||||||||||||||||||
Repurchase agreements | 84,545 | 242 | 1.15 | % | 79,630 | 230 | 1.17 | % | 69,735 | 207 | 1.18 | % | 70,587 | 210 | 1.18 | % | 62,322 | 199 | 1.28 | % | |||||||||||||||||||||||||||||||||||
Federal funds purchased | — | — | — | % | — | — | — | % | — | — | — | % | 70 | — | — | % | 679 | 1 | 0.58 | % | |||||||||||||||||||||||||||||||||||
Short-term borrowings | 30,604 | 13 | 0.17 | % | 25,000 | 8 | 0.13 | % | 28,696 | 12 | 0.16 | % | 28,913 | 13 | 0.18 | % | 25,110 | 9 | 0.14 | % | |||||||||||||||||||||||||||||||||||
Notes payable | 26,114 | 90 | 1.36 | % | 26,219 | 89 | 1.36 | % | 26,326 | 91 | 1.35 | % | 26,640 | 95 | 1.40 | % | 27,218 | 95 | 1.38 | % | |||||||||||||||||||||||||||||||||||
Junior subordinated debentures | 22,167 | 151 | 2.69 | % | 22,167 | 150 | 2.71 | % | 22,167 | 80 | 1.41 | % | 26,247 | 327 | 4.88 | % | 29,384 | 320 | 4.31 | % | |||||||||||||||||||||||||||||||||||
Total interest bearing liabilities | 1,344,811 | 1,417 | 0.42 | % | 1,345,102 | 1,424 | 0.43 | % | 1,305,241 | 1,317 | 0.40 | % | 1,284,589 | 1,504 | 0.46 | % | 1,301,351 | 1,482 | 0.46 | % | |||||||||||||||||||||||||||||||||||
Non-interest bearing liabilities | 419,651 | 409,665 | 415,693 | 402,729 | 385,118 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' equity | 212,112 | 211,985 | 208,816 | 205,291 | 201,257 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,976,574 | $ | 1,966,752 | $ | 1,929,750 | $ | 1,892,609 | $ | 1,887,726 | |||||||||||||||||||||||||||||||||||||||||||||
Net interest income (TE) and spread | $ | 19,676 | 4.27 | % | $ | 19,565 | 4.34 | % | $ | 20,496 | 4.55 | % | $ | 19,856 | 4.50 | % | $ | 19,459 | 4.47 | % | |||||||||||||||||||||||||||||||||||
Net interest margin | 4.38 | % | 4.44 | % | 4.65 | % | 4.61 | % | 4.58 | % | |||||||||||||||||||||||||||||||||||||||||||||
Core net interest margin (Non-GAAP)(*) | 4.21 | % | 4.32 | % | 4.44 | % | 4.42 | % | 4.39 | % | |||||||||||||||||||||||||||||||||||||||||||||
(*) See reconciliation of Non-GAAP financial measures on pages 13-15. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
12
MIDSOUTH BANCORP, INC. and SUBSIDIARIES | ||||||||||||||||||||
Reconciliation of Non-GAAP Financial Measures (unaudited) | ||||||||||||||||||||
(in thousands except per share data) | ||||||||||||||||||||
Certain financial information included in the earnings release and the associated Condensed Consolidated Financial Information (unaudited) is determined by methods other than in accordance with GAAP. We are providing disclosure of the reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures. "Tangible common equity" is defined as total common equity reduced by intangible assets. "Core net interest margin" is defined as reported net interest margin less purchase accounting adjustments. "Annualized return on average assets, operating" is defined as net earnings available to common shareholders adjusted for specified one-time items divided by average assets. "Annualized return on average common equity, operating" is defined as net earnings available to common shareholders adjusted for specified one-time items divided by average common equity. "Annualized return on average tangible common equity, operating" is defined as net earnings available to common shareholders adjusted for specified one-time items divided by average tangible common equity. "Pre-tax, pre-provision annualized return on average assets, operating" is defined as pre-tax, pre-provision earnings adjusted for specified one-time items divided by average assets. "Tangible book value per common share" is defined as tangible common equity divided by total common shares outstanding. "Diluted earnings per share, operating" is defined as net earnings available to common shareholders adjusted for specified one-time items divided by diluted weighted-average shares. The GAAP-based efficiency ratio is measured as noninterest expense as a percentage of net interest income plus noninterest income. The non-GAAP efficiency ratio excludes specified one-time items in addition to securities gains and losses and gains and losses on the sale/valuation of other real estate owned and other assets repossessed. | ||||||||||||||||||||
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 results should not be viewed as a substitute for results determined in accordance with GAAP, and are not necessarily comparable to non-GAAP performance measures that other companies may use. | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
2015 | 2015 | 2014 | 2014 | 2014 | ||||||||||||||||
Average Balance Sheet Data | ||||||||||||||||||||
Total average assets | A | $ | 1,976,574 | $ | 1,966,752 | $ | 1,929,750 | $ | 1,892,609 | $ | 1,887,726 | |||||||||
Total equity | $ | 212,112 | $ | 211,985 | $ | 208,816 | $ | 205,291 | $ | 201,257 | ||||||||||
Less preferred equity | 41,226 | 41,347 | 41,386 | 41,436 | 41,491 | |||||||||||||||
Total common equity | B | $ | 170,886 | $ | 170,638 | $ | 167,430 | $ | 163,855 | $ | 159,766 | |||||||||
Less intangible assets | 48,587 | 48,860 | 49,139 | 49,417 | 49,691 | |||||||||||||||
Tangible common equity | C | $ | 122,299 | $ | 121,778 | $ | 118,291 | $ | 114,438 | $ | 110,075 | |||||||||
13
MIDSOUTH BANCORP, INC. and SUBSIDIARIES | ||||||||||||||||||||
Reconciliation of Non-GAAP Financial Measures (unaudited) (continued) | ||||||||||||||||||||
(in thousands except per share data) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
Core Net Interest Margin | 2015 | 2015 | 2014 | 2014 | 2014 | |||||||||||||||
Net interest income (TE) | $ | 19,676 | $ | 19,565 | $ | 20,496 | $ | 19,856 | $ | 19,459 | ||||||||||
Less purchase accounting adjustments | (678 | ) | (465 | ) | (894 | ) | (750 | ) | (745 | ) | ||||||||||
Net interest income, net of purchase accounting adjustments | D | $ | 18,998 | $ | 19,100 | $ | 19,602 | $ | 19,106 | $ | 18,714 | |||||||||
Total average earnings assets | $ | 1,803,295 | $ | 1,786,397 | $ | 1,746,855 | $ | 1,708,524 | $ | 1,703,746 | ||||||||||
Add average balance of loan valuation discount | 4,888 | 5,179 | 5,764 | 6,498 | 7,013 | |||||||||||||||
Average earnings assets, excluding loan valuation discount | E | $ | 1,808,183 | $ | 1,791,576 | $ | 1,752,619 | $ | 1,715,022 | $ | 1,710,759 | |||||||||
Core net interest margin | D/E | 4.21 | % | 4.32 | % | 4.44 | % | 4.42 | % | 4.39 | % | |||||||||
Three Months Ended | ||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
Return Ratios | 2015 | 2015 | 2014 | 2014 | 2014 | |||||||||||||||
Net earnings available to common shareholders | $ | 4,927 | $ | 1,318 | $ | 3,490 | $ | 4,298 | $ | 3,946 | ||||||||||
Gain on sales of securities, after-tax | (733 | ) | (75 | ) | — | — | (83 | ) | ||||||||||||
Efficiency consultant expenses, after-tax | — | — | 101 | 130 | 70 | |||||||||||||||
Loss on disposal of fixed assets, after-tax | — | — | — | 256 | — | |||||||||||||||
Loss on redemption of Trust Preferred Securities, after-tax | — | — | — | 168 | — | |||||||||||||||
Gain on sale of other real estate owned, after-tax | — | — | — | (700 | ) | — | ||||||||||||||
Income from death benefit on bank owned life insurance | (160 | ) | — | — | — | — | ||||||||||||||
Net earnings available to common shareholders, operating | F | $ | 4,034 | $ | 1,243 | $ | 3,591 | $ | 4,152 | $ | 3,933 | |||||||||
Earnings before income taxes | $ | 7,442 | $ | 1,937 | $ | 5,183 | $ | 6,674 | $ | 6,051 | ||||||||||
Gain on sales of securities | (1,128 | ) | (115 | ) | — | — | (128 | ) | ||||||||||||
Efficiency consultant expenses | — | — | 156 | 200 | 107 | |||||||||||||||
Loss on disposal of fixed assets | — | — | — | 394 | — | |||||||||||||||
Loss on redemption of Trust Preferred Securities | — | — | — | 258 | — | |||||||||||||||
Gain on sale of other real estate owned | — | — | — | (1,079 | ) | — | ||||||||||||||
Income from death benefit on bank owned life insurance | (160 | ) | — | — | — | — | ||||||||||||||
Provision for loan losses | 1,100 | 6,000 | 2,700 | 1,175 | 1,200 | |||||||||||||||
Pre-tax, pre-provision earnings, operating | G | $ | 7,254 | $ | 7,822 | $ | 8,039 | $ | 7,622 | $ | 7,230 | |||||||||
Annualized return on average assets, operating | F/A | 0.82 | % | 0.26 | % | 0.74 | % | 0.87 | % | 0.84 | % | |||||||||
Annualized return on average common equity, operating | F/B | 9.47 | % | 2.95 | % | 8.51 | % | 10.05 | % | 9.87 | % | |||||||||
Annualized return on average tangible common equity, operating | F/C | 13.23 | % | 4.14 | % | 12.04 | % | 14.39 | % | 14.33 | % | |||||||||
Pre-tax, pre-provision annualized return on average assets, operating | G/A | 1.47 | % | 1.61 | % | 1.65 | % | 1.60 | % | 1.54 | % | |||||||||
14
MIDSOUTH BANCORP, INC. and SUBSIDIARIES | ||||||||||||||||||||
Reconciliation of Non-GAAP Financial Measures (unaudited) (continued) | ||||||||||||||||||||
(in thousands except per share data) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
Per Common Share Data | 2015 | 2015 | 2014 | 2014 | 2014 | |||||||||||||||
Book value per common share | $ | 15.04 | $ | 14.92 | $ | 14.78 | $ | 14.52 | $ | 14.25 | ||||||||||
Effect of intangible assets per share | 4.26 | 4.29 | 4.32 | 4.35 | 4.39 | |||||||||||||||
Tangible book value per common share | $ | 10.78 | $ | 10.63 | $ | 10.46 | $ | 10.17 | $ | 9.86 | ||||||||||
Diluted earnings per share | $ | 0.42 | $ | 0.12 | $ | 0.30 | $ | 0.37 | $ | 0.34 | ||||||||||
Effect of gain on sales of securities, after-tax | (0.06 | ) | (0.01 | ) | — | — | (0.01 | ) | ||||||||||||
Effect of efficiency consultant expenses, after-tax | — | — | 0.01 | 0.01 | 0.01 | |||||||||||||||
Effect of loss on disposal of fixed assets, after-tax | — | — | — | 0.02 | — | |||||||||||||||
Effect of loss on redemption of Trust Preferred Securities, after-tax | — | — | — | 0.02 | — | |||||||||||||||
Effect of gain on sale of other real estate, after-tax | — | — | — | (0.06 | ) | — | ||||||||||||||
Effect of income from death benefit on bank owned life insurance | (0.01 | ) | — | — | — | — | ||||||||||||||
Diluted earnings per share, operating | $ | 0.35 | $ | 0.11 | $ | 0.31 | $ | 0.36 | $ | 0.34 | ||||||||||
Three Months Ended | ||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
Efficiency Ratio | 2015 | 2015 | 2014 | 2014 | 2014 | |||||||||||||||
Net interest income | $ | 19,381 | $ | 19,257 | $ | 20,160 | $ | 19,512 | $ | 19,113 | ||||||||||
Noninterest income | $ | 6,166 | $ | 4,967 | $ | 5,050 | $ | 6,194 | $ | 5,261 | ||||||||||
Income from death benefit on bank owned life insurance | (160 | ) | — | — | — | — | ||||||||||||||
Gain on sales of securities | (1,128 | ) | (115 | ) | — | — | (128 | ) | ||||||||||||
Net gain on sale/valuation of other real estate owned and other assets repossessed | — | (19 | ) | — | (1,079 | ) | (3 | ) | ||||||||||||
Noninterest income (non-GAAP) | $ | 4,878 | $ | 4,833 | $ | 5,050 | $ | 5,115 | $ | 5,130 | ||||||||||
Total revenue | H | $ | 25,547 | $ | 24,224 | $ | 25,210 | $ | 25,706 | $ | 24,374 | |||||||||
Total revenue (non-GAAP) | I | $ | 24,259 | $ | 24,090 | $ | 25,210 | $ | 24,627 | $ | 24,243 | |||||||||
Noninterest expense | J | $ | 17,005 | $ | 16,287 | $ | 17,327 | $ | 17,857 | $ | 17,123 | |||||||||
Efficiency consultant expenses | — | — | (156 | ) | (200 | ) | (107 | ) | ||||||||||||
Loss on disposal of fixed assets | — | — | — | (394 | ) | — | ||||||||||||||
Loss on redemption of Trust Preferred Securities | — | — | — | (258 | ) | — | ||||||||||||||
Net loss on sale/valuation of other real estate owned | (5 | ) | (31 | ) | (77 | ) | — | — | ||||||||||||
Noninterest expense (non-GAAP) | K | $ | 17,000 | $ | 16,256 | $ | 17,094 | $ | 17,005 | $ | 17,016 | |||||||||
Efficiency ratio (GAAP) | J/H | 66.56 | % | 67.23 | % | 68.73 | % | 69.47 | % | 70.25 | % | |||||||||
Efficiency ratio (non-GAAP) | K/I | 70.08 | % | 67.48 | % | 67.81 | % | 69.05 | % | 70.19 | % | |||||||||
15