-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, DiZ/dCp5QHKQ0XaTb/K5G/cmYtbR24FKqLHznPdjV48pYmyORxTTw7Pc/bQkJIgh +67tnKeNxWfNwjSJi9oykA== 0000906280-95-000039.txt : 19950530 0000906280-95-000039.hdr.sgml : 19950530 ACCESSION NUMBER: 0000906280-95-000039 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 DATE AS OF CHANGE: 19950515 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: MIDSOUTH BANCORP INC CENTRAL INDEX KEY: 0000745981 STANDARD INDUSTRIAL CLASSIFICATION: 6021 IRS NUMBER: 721020809 STATE OF INCORPORATION: LA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 001-11826 FILM NUMBER: 95539201 BUSINESS ADDRESS: STREET 1: 102 VERSAILLES BLVD CITY: LAFAYETTE STATE: LA ZIP: 70501 BUSINESS PHONE: 3182378343 MAIL ADDRESS: STREET 1: 102 VERSAILLES BLVD CITY: LAFAYETTE STATE: LA ZIP: 70501 10QSB 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10QSB X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended.....................March 31,1995 OR ____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ..... to ..... COMMISSION FILE NUMBER 2-91-000FW MidSouth Bancorp, Inc. LOUISIANA 72 -1020809 102 VERSAILLES BOULEVARD, LAFAYETTE, LOUISIANA 70501 (318) 237-8343 Check whether the issuer (1) has 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 _____ State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. Outstanding as of April 30, 1995 Common stock, $.10 par value 716,889 Transitional Small Business Disclosure Format: Yes ______ No ___X___ PART 1 Item 1. Financial Statements The information called for by this item is included in MidSouth Bancorp, Inc.'s 1995 First Quarter Report to Shareholders on pages 3 through 7 and is incorporated herein. Item 2. Management's Discussion and Analysis or Plan of Operation The information called for by this item is included in MidSouth Bancorp, Inc.'s 1995 First Quarter Report to Shareholders on pages 8 through 14 and is incorporated herein. Item 6. Exhibits and Reports on Form 8-K ___________________ (a) Exhibits Exhibit Number Document Description ______________ _____________________ 3.1 Amended and Restated Articles of Incorporation of MidSouth Bancorp,Inc. is included as Exhibit 3.1 to the Report on Form 10-K for the year ended December 31, 1993, and is incorporated herein by reference. 3.2 Amended and Restated By-Laws of MidSouth Bancorp,Inc. is included as Exhibit 3.2 to the Report of Form 10-K for the year ended December 31, 1993, and is incorporated herein by reference. 10.1 MidSouth National Bank Lease Agreement with Southwest Bank Building Limited Partnership is included as Exhibit 10.7 to the Company's annual report on Form 10-K for the Year Ended December 31, 1992, and is incorporated herein by reference. 10.2 First Amendment to Lease between MBL Life Assurance Corporation, successor in interest to Southwest Bank Building Limited Partnership in Commendam, and MidSouth National Bank is included as Exhibit 10.1 to Report on the Company's annual report on Form 10-KSB for the year ended December 31, 1994, and is incorporated herein by reference. 10.3 Amended and Restated Deferred Compensation Plan and Trust is included as Exhibit 10.3 to the Company's annual report on Form 10-K for the year ended December 31, 1992 and is incorporated herein by reference. 10.4 Employment Agreements with C. R. Cloutier and Karen L. Hail are included as Exhibit 5(c) to MidSouth's Form 1-A and are incorporated herein by reference. 10.5 Description of the Incentive Compensation Plan for Officers of MidSouth National Bank is included as Exhibit 10.5 to the Company's annual report on Form 10-K for the year ended December 31, 1993, and is incorporated herein by reference. 10.6 Agreement and Plan of Merger between MidSouth Bancorp, Inc. and MidSouth National Bank and Sugarland Bancshares, Inc. and Sugarland State Bank is included as Exhibit 10.5 to the Company's annual report on Form 10-KSB for the year ended December 31, 1994, and is incorporated herein by reference. 19 1995 First Quarter Report to Shareholders (b) Reports Filed on Form 8-K None Signatures In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MidSouth Bancorp, Inc. (Registrant) Date: May 12, 1995 /s/ C. R. Cloutier ________________________________ C. R. Cloutier, President & CEO /s/ Karen L. Hail ________________________________ Karen L. Hail, Executive Vice President & CFO /s/ Teri S. Stelly __________________________________ Teri S. Stelly, Vice President & Controller Exhibit 19 MIDSOUTH BANCORP, INC. AND SUBSIDIARY Corporate Information ______________________________________________________________________________ CORPORATE OFFICES Versailles Centre 102 Versailles Boulevad Lafayette, Louisiana 70501 (318) 237-8343 TRANSFER AGENT Inquiries relating to stockholder records, stock transfers, changes of ownership and changes of address should be sent to the transfer agent at the following address: Mellon Securities Transfer Services 85 Challenger Road Overpeck Centre Ridgefield Park, New Jersey 07660 1-800-526-0801 TDD 1-800-231-5469 (for hearing impaired) STOCK TRADING INFORMATION MidSouth's common stock is traded on the American Stock Exchange, inc./Emerging Company Marketplace ("ECM") under the symbol MSL.EC. Information on the price and volume of transactions on the ECM appears in the Wall Street Journal under the caption "Emerging Companies" under the heading "American Stock Exchange Composite Transactions." Analysts, investors, and others seeking the current market value of the stock and additional information about MidSouth should contact Sally Gary, Investor Relations, 102 Versailles Boulevard, Lafayette, Louisiana 70501 (318) 237-8343 or 1-800-213-BANK. ______________________________________________________________________________ MidSouth is a Lafayette, Louisiana-based one-bank holding company with total assets of $107.7 million as of March 31, 1995. The Company offers complete banking services to commercial and retail customers through its wholly-owned subsidiary, MidSouth National Bank (the "Bank"). Opened in 1985, the Bank has nine banking offices, five in Lafayette Parish, two in St. Martin Parish, one in Jefferson Davis Parish and one in St. Landry Parish.
MIDSOUTH BANCORP, INC. FINANCIAL HIGHLIGHTS (UNAUDITED) ________________________________________________________________________________________________ Three Months Ended Year Ended March 31, December 31, EARNINGS DATA 1995 1994 1994 1993 ________________________________________________________ Net interest income $1,432,125 $1,234,104 $5,412,377 $4,565,113 Provision for loan losses 55,000 80,000 210,000 306,500 Other income 357,780 357,391 1,422,894 1,371,124 Other expense 1,275,563 1,173,284 4,882,130 4,653,303 Income tax expense 161,257 114,817 601,500 331,500 Net income before cumulative effect of accounting change 298,085 223,394 1,141,641 644,934 Cumulative effect of accounting change - - - 600,000 Net income $298,085 $223,394 $1,141,641 $1,244,934 ________________________________________________________________________________________________ PER COMMON SHARE DATA Income before cumulative effect of accounting change $0.42 $0.32 $1.61 $1.00 Cumulative effect of accounting change - - - $0.93 Net income $0.42 $0.32 $1.61 $1.93 Book value at end of period $8.62 $7.37 $7.53 $8.15 Market price at end of period $10.88 $8.88 $11.50 $8.81 Average shares outstanding 715,078 705,587 709,552 646,413 ________________________________________________________________________________________________ AVERAGE BALANCE SHEET DATA Total assets $103,018,703 $98,458,933 $101,547,146 $86,482,082 Earning assets 94,759,974 89,739,101 93,047,145 78,751,062 Loans and leases 60,352,447 50,599,945 55,601,496 45,124,270 Interest-bearing deposits 66,229,411 64,862,255 66,163,847 58,350,452 Total Deposits 94,332,404 91,372,785 94,164,045 80,466,161 Total Stockholders' Equity 6,004,349 5,362,305 5,442,693 4,267,226 ________________________________________________________________________________________________ SELECTED RATIOS Return on average assets (annualized) 1.16% 0.92% 1.12% 1.13% Return on average equity (annualized) 19.86% 16.85% 20.98% 22.88% Leverage capital ratio 6.72% 5.78% 6.45% 5.94% Tier 1 risk-based capital ratio 11.04% 10.40% 10.95% 10.56% Total risk-based capital ratio 12.30% 11.65% 12.20% 11.81% Allowance for loan losses as a % of total loans 1.47% 1.60% 1.45% 1.66% ________________________________________________________________________________________________
MIDSOUTH BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CONDITION (UNAUDITED) ______________________________________________________________________________________________________________________ March 31, December 31, ASSETS 1995 1994 _____________ _____________ Cash and due from banks $6,261,908 $6,941,989 Federal funds sold 7,100,000 1,700,000 _____________ _____________ Total cash and cash equivalents 13,361,908 8,641,989 Interest bearing deposits in banks 98,385 48,422 Securities available-for-sale, at fair value (cost of $29,719,136 in March 1995 and $32,909,276 in December 1994) 28,875,336 31,369,476 Securities held-to-maturity (estimated market value of $945,955 in March 1995 and $372,274 in December 1994) 931,404 370,946 Loans, net of allowance for loan and lease losses of $905,175 in March 1995 and $873,934 in December 1994 60,535,205 59,558,341 Bank premises and equipment, net 2,203,510 2,117,512 Other real estate owned, net 193,350 198,350 Accrued interest receivable 684,192 695,604 Goodwill, net 185,508 191,691 Other assets 625,104 773,629 _______________ ______________ Total assets $107,693,902 $103,965,960 =============== ============== LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Non-interest bearing $30,085,357 $31,035,865 Interest bearing 68,621,837 65,454,490 _______________ ______________ Total deposits 98,707,194 96,490,355 Securities sold under repurchase agreements 315,479 301,730 Accrued interest payable 234,055 191,366 Notes payable 2,154,366 1,195,917 Other liabilities 112,752 413,246 _______________ _______________ Total liabilities 101,523,846 98,592,614 _______________ _______________ Commitments and contingencies - - Stockholders' Equity: Preferred Stock, no par value- 5,000,000 authorized, none issued and outstanding - - Common stock, $.10 par value- 5,000,000 shares authorized, 715,963 and 713,988 issued and outstanding on March 31, 1995 and December 31, 1994, respectively 71,596 71,399 Surplus 6,167,103 6,144,070 Unearned ESOP shares (67,926) (73,021) Unrealized gains/losses on securities available-for-sale, net of deferred taxes of $251,300 in March 1995 and $477,000 in December 1994 (592,500) (1,062,800) Retained earnings 591,783 293,698 ________________ _______________ Total stockholders' equity 6,170,056 5,373,346 ________________ _______________ Total liabilities and stockholders' equity $107,693,902 $103,965,960 ================ ===============
MIDSOUTH BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) __________________________________________________________________________________________________ Three Months Ended Year Ended March 31, December 31, 1995 1994 1994 ______________ ________________ _________________ INTEREST INCOME: Loans, including fees $1,546,455 $1,218,168 $5,463,501 Securities 439,900 445,144 1,782,504 Federal funds sold 43,782 35,656 142,473 ______________ ________________ _________________ TOTAL 2,030,137 1,698,968 7,388,478 INTEREST EXPENSE: Interest on deposits 568,873 450,781 1,924,906 Interest on note payable 29,139 14,083 51,195 ______________ ________________ _________________ TOTAL 598,012 464,864 1,976,101 ______________ ________________ _________________ NET INTEREST INCOME 1,432,125 1,234,104 5,412,377 PROVISION FOR LOAN LOSSES 55,000 80,000 210,000 _______________ ________________ _________________ NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 1,377,125 1,154,104 5,202,377 _______________ ________________ _________________ OTHER OPERATING INCOME: Service charges on deposits 249,211 233,135 1,015,529 Gains (losses) on securities, net - - 1,178 Other charges and fees 108,569 124,256 406,187 ________________ ________________ _________________ TOTAL OTHER INCOME 357,780 357,391 1,422,894 ________________ ________________ _________________ OTHER EXPENSES: Salaries and employee benefits 587,802 543,529 2,242,892 Occupancy expense 218,935 197,530 822,615 Professional fees 42,962 45,647 218,287 FDIC assessments 51,939 52,730 209,508 Marketing expenses 52,818 43,537 207,295 General and bond insurance 27,327 28,086 109,674 Data processing expenses 24,927 31,020 108,572 Postage 28,178 26,792 104,365 Director fees 22,409 23,771 95,509 Education and travel 22,152 20,015 91,896 Printing and supplies 31,135 19,753 113,526 Telephone 22,758 22,319 94,985 Expenses on other real estate owned, net 16,006 11,052 22,500 Other 126,215 107,503 440,506 ________________ _______________ ________________ TOTAL OTHER EXPENSES 1,275,563 1,173,284 4,882,130 ________________ _______________ ________________ NET INCOME BEFORE INCOME TAXES 459,342 338,211 1,743,141 PROVISION FOR INCOME TAXES 161,257 114,817 601,500 ________________ _______________ ________________ NET INCOME $298,085 $223,394 $1,141,641 ================ =============== ================ Net income per common share $0.42 $0.32 $1.61 ================ =============== ================ Average number of shares outstanding 715,078 705,587 709,552 ================ ============== ================
MIDSOUTH BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 1995 (UNAUDITED) ____________________________________________________________________________________________________________________________ UNREALIZED COMMON STOCK ESOP (GAINS) LOSSES ON RETAINED SHARES AMOUNT SURPLUS OBLIGATION SECURITIES AFS EARNINGS TOTAL _______________________ _____________ ______________ __________________ ______________ _____________ BALANCE, DECEMBER 31, 1994 713,988 $71,399 $6,144,070 ($73,021) ($1,062,800) $293,698 $5,373,346 Issuance of common stock 1,975 197 23,033 23,230 Net income 298,085 298,085 ESOP obligation repayments 5,095 5,095 Net change in unrealized gain/loss on securities available-for-sale, net of tax 470,300 470,300 ____________ ___________ ______________ ____________ __________________ ______________ ______________ BALANCE, MARCH 31, 1995 715,963 $71,596 $6,167,103 ($67,926) ($592,500) $591,783 $6,170,056 ============ =========== ============== ============ ================== ============== ==============
MIDSOUTH BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994 ____________________________________________________________________________________________ March 31, 1995 1994 _______________ ________________ CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $298,085 $223,394 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 71,562 68,906 Provision for loan losses 55,000 80,000 Provision for deferred taxes - 114,817 Premium amortization, net 37,301 49,979 Write-down of other real estate owned 5,000 5,548 Change in accrued interest receivable 11,412 (71,750) Change in accrued interest payable 42,689 3,326 Change in other liabilities (300,494) (119,192) Change in other assets (77,175) (242,240) ________________ _______________ NET CASH PROVIDED BY OPERATING ACTIVITIES 143,380 112,788 ________________ _______________ CASH FLOWS FROM INVESTING ACTIVITIES: Net increase (decrease) in interest-bearing deposits (49,963) 622 Proceeds from sales of securities available-for-sale - 601,236 Proceeds from maturities and calls of securities available-for-sale 3,315,366 220,838 Purchases of securities held-to-maturity (728,864) - Purchases of securities available-for-sale - (2,098,035) Loan originations, net of repayments (1,025,985) (3,033,503) Purchases of premises and equipment (151,377) (43,880) ________________ _______________ NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 1,359,177 (4,352,722) ________________ _______________ CASH FLOWS FROM FINANCING ACTIVITIES: Net increase in deposits 2,216,839 4,357,303 Net increase (decrease) in repurchase agreements 13,749 (766) Issuance of notes payable 1,000,000 165,000 Repayments of notes payable (36,456) (31,826) Proceeds from issuance of common stock 23,230 26,802 Payment of fractional shares resulting from stock dividend - (643) _________________ _______________ NET CASH PROVIDED BY FINANCING ACTIVITIES 3,217,362 4,515,870 _________________ _______________ NET INCREASE IN CASH & CASH EQUIVALENTS 4,719,919 275,936 CASH & CASH EQUIVALENTS, BEGINNING OF YEAR 8,641,989 10,464,078 _________________ _______________ CASH & CASH EQUIVALENTS, END OF QUARTER $13,361,908 $10,740,014 ================= ===============
MIDSOUTH BANCORP, INC. AND SUBSIDIARY Notes to Consolidated Financial Statements _____________________________________________________________________________ 1. STATEMENT BY MANAGEMENT CONCERNING THE REVIEW OF 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 the financial position of MidSouth and its subsidiary as of March 31, 1995 and the results of their operations and their cash flows for the periods presented. The consolidated financial statements should be read in conjunction with the annual consolidated financial statements and the notes thereto included in MidSouth's 1994 annual report and Form 10-KSB. 2. ALLOWANCE FOR LOAN AND LEASE LOSSES An analysis of the activity in the allowance for loan and lease losses is as follows: Three months Ended March 31, 1995 1994 ____________ _____________ Balance at beginning of year $874 $824 Provision for loan losses 55 80 Recoveries 25 48 Loans charged off (50) (113) ____________ _____________ Balance at end of quarter $905 $839 ============ ============= 3. LOAN IMPAIRMENT Effective January 1, 1995, Midsouth adopted Statement of Financial Accounting Standards ("SFAS") No. 114, "Accounting by Creditors for Impairment of a Loan," which was subsequently amended by SFAS No. 118, "Accounting by Creditors for Impairment of a Loan- Income Recognition and Disclosures." SFAS No. 114 requires the measurement of impaired loans be based on the present value of expected future cash flows discounted at the loan's effective interest rate, or at the loan's observable market price or the fair market value of its collateral. SFAAS No. 114 does not apply to large groups of smaller balance homogeneous loans that are collectively evaluated for impairment. Therefore, MidSouth's smaller balance substandard loans were grouped as homogeneous loans, consisting of residential mortgage loans, consumer loans, and performing commercial and real estate loans under a certain dollar amount. The adoption of SFAS No. 114 did not result in additional provisions for loan losses for the first quarter of 1995 due to MidSouth's existing policy of measuring loan impairment, which meets the requirements set forth in SFAS No. 114. SFAS No. 118 allows a creditor to use existing methods for recognizing interest income on impaired loans. The adoption of SFAS No. 118 did not affect the amount of interet income reported for the three months ending March 31, 1995. At March 31, 1995, the recorded investment in loans that are considered to be impaired under Statement 114 was $483,230. Included in this amount is $345,537 of impaired loans for which the related allowance for credit losses in $70,000 and $137,693 of impaired loans that do not have an allowance for credit losses. There was no significant change in these amounts during the three months ended March 31, 1995, and no interest income was recognized on a cash basis on impaired loans during the same period. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview 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 1994 financial statements, the notes thereto and the related Management's Discussion and Analysis. MidSouth reported earnings for the first quarter of 1995 of $298,085, representing a 33.4% increase over net income for the first quarter of 1994 of $223,394. Earnings per share for the first quarter of 1995 were $.42 based on 715,078 average shares outstanding as compared to $.32 on 705,587 average shares outstanding for the first quarter of 1994. The reported increase in earnings for the first quarter of 1995 was attributable primarily to an increase of $198,021 in net interest income due to growth in the loan portfolio and to a decrease of $25,000 in the provision for loan and lease losses. The increase in earnings was partially offset by an increase in expenses attributable to salaries and employee benefits, occupancy, marketing, printing and supplies, and other miscellaneous expenses. At March 31, 1995, MidSouth's total assets were $107,693,902, an increase of 3.6% over the $103,965,960 reported at year-end 1994 and an increase of 5.8% over the $101,808,710 at the end of the first quarter of 1994. Total deposits grew from $94,932,110 at March 31, 1994 to $96,490,355 at December 31, 1994 and to $98,707,194 at March 31, 1995. Loans, net of the Allowance for Loan and Lease Losses ("ALLL"), at the current quarter-end were $60,535,205 compared to $59,558,341 at December 31, 1994 and $51,915,297 at March 31, 1994. Provisions to the ALLL totaled $55,000 as compared to $80,000 for the three month period ending March 31, 1994. The provisions increased MidSouth's total reserves to $905,175 at the end of the first quarter of 1995. Non-performing loans increased $56,724 from December 31, 1994 to a total of $306,417 or .50% of total loans. There was no material change in other non-performing assets during the first quarter of 1995, but loans past due 90 days or more increased by $163,316 from March 31, 1994 to a total of $230,861 as of March 31, 1995. As of March 31, 1995, MidSouth's annualized return on average equity was 19.86% and annualized return on average assets was 1.16%. The leverage capital ratio was 6.72% at the current quarter-end. Earnings Analysis Net Interest Income Average earning assets increased $5.0 million from $89.7 million for the three months ending March 31, 1994 to $94.7 million for the three months ending March 31, 1995. The $5.0 million increase is the net result of a $9.7 million increase in the loan portfolio and a $4.7 million decrease in the volume of securities and federal funds sold. Cash flows from federal funds sold, maturing securities and principal payments on mortgage-backed securities were reinvested in the loan portfolio. In addition, a $3.0 million increase in the average volume of deposits and a short-term borrowing of $1.0 million from the Federal Home Loan Bank provided additional funding for the loan growth. Of the $3.0 million increase in the average volume of deposits, $1.6 million represents growth in non-interest bearing deposits. Increases in the average loan volume and the average yield on loans more than offset increases in the average volume of interest-bearing liabilities and the average rate paid on interest-bearing liabilities to result in increased net interest income of $198,021 in quarterly comparison. Average loan volume increased from $50.6 million at March 31, 1994 to $60.3 million at March 31, 1995. This volume increase, combined with a 64 basis point increase in the average yield on loans (from 9.75% to 10.39%) for the same period, contributed $328,287 to the increase in interest income from earning assets. Volume decreases in the securities portfolio and federal funds sold were offset by increases in the average yields on these investments to net a minimal contribution to the increase in income from these earning assets of $2,882. With the rise in interest rates, interest expense increased $133,148 for the first quarter of 1995 as compared to the first quarter of 1994 due to a 71 basis point increase in the average rate paid on interest-bearing liabilities (from 2.84% to 3.55%). In addition, the average volume of interest-bearing liabilities increased $2.0 million, from $66.3 million to $68.3 million. The increase in volume is due to additional borrowing from the Federal Home Loan Bank and from an increase in interest-bearing public funds deposits. As a result of these changes in average volumes and average yields on earning assets and interest-bearing liabilities, the net yield on average earning assets increased 56 basis points, from 5.57% as of March 31, 1994 to 6.13% as of March 31, 1995. Non-interest Income MidSouth's primary source of non-interest income, service charges on deposit accounts, increased $16,076 for the first quarter of 1995 as compared to the first quarter of 1994, primarily due to an increase in insufficient funds fees. Other non-interest income decreased $15,687 in quarterly comparisons primarily due to a decrease of $26,880 in fees earned through a real estate mortgage program that was partially offset by increases in check order income, ATM fees and fee income earned from early withdrawal of certificates of deposit. Rising interest rates slowed activity in the real estate mortgage program after the first quarter of 1994, which resulted in the decrease in fees earned from the program. Fees from early withdrawals of certificates of deposits increased during the first quarter of 1995 as customers took advantage of rising short term rates. Non-interest Expense Non-interest expense increased 8.7% for the three months ended March 31, 1995 as compared to the three months ended March 31, 1994. The increase resulted primarily from increases in salaries and employee benefits, occupancy expenses, printing and supplies, and marketing expenses. Additionally, an increase of $18,712 was recorded in the "Other" expenses category, but, no significant change was reported for any individual component of that category. Salaries and employee benefits increased $44,273 in quarterly comparisons due to an increase in the number of full time equivalent employees from 72 to 80. Throughout 1994, additional staff was added at branch locations to handle peak transaction periods and insure quality customer service. In addition, two employees were added to a staff that provides replacement personnel as needed during absences and vacation periods, and a consumer lender was added at the Ambassador Caffery Branch during the first quarter of 1995. Occupancy expense increased in the three month period ending March 31, 1995 as compared to the same period of 1994 due to increases in building lease expense, utilities, and advalorem taxes. Building lease expense and utilities increased primarily due to an increase provided for in the lease agreement on the corporate office location and the leasing of additional space in November of 1994. The additional leased space provided MidSouth with a training facility and additional offices. Advalorem taxes increased due to increases in real property and capital stock values reported. Marketing and promotional expenses increased due to expenses related to community service programs, public relations programs and dues to civic organizations. Printing and office supplies expenses increased due to costs associated with the addition of the Opelousas Branch opened on April 10, 1995. FDIC assessment fees were slightly lower for the three months ended March 31, 1995 as compared to the three months ended March 31, 1994 due to a lower premium rate and an improvement in risk classification in December 1994. Through review of FDIC correspondence and discussions with its representatives, management anticipates possible significant reductions in FDIC premiums beginning in the fourth quarter of 1995. Balance Sheet Analysis MidSouth ended the first quarter of 1995 with consolidated assets of $107,693,902, an increase of $3.7 million from December 31, 1994 consolidated assets of $103,965,960. The increase in consolidated assets was funded primarily from additional funds deposited through a public funds contract obtained on January 1, 1995 and from a $1.0 million short term borrowing from the Federal Home Loan Bank. As of March 31, 1995, total deposits increased $2.2 million to $98,707,194 as compared to $96,490,355 at December 31, 1994, primarily due to the addition of $2.4 million in deposits from the above mentioned public funds contract. Fluctuations in commercial deposits resulted in a decrease of $1.6 million in total deposits held in commercial accounts, including certificates of deposit. The decrease resulted in part from the withdrawal of commerical deposits associated with a few large commercial loans that were paid out unexpectedly during the first quarter of 1995. Total consumer (individual) deposits increased $1.4 million, primarily due to deposits that accompanied loan relationships established as a result of an installment loan promotion held during the month of March 1995. Total loans increased $1,008,105 during the first quarter of 1995 from $60,432,275 reported at December 31, 1994. The installment loan promotion held in March 1995 resulted in an increase of $2.0 million in the consumer loan portfolio. A decrease of $1.0 million in the commercial loan portfolio resulted from the unexpected payout of a few larger commercial loans. Competition for quality commercial loans has intensified in the Lafayette area in the past several months, and as a result, the magnitude of loan growth in future periods could slow. Activity has increased, however, in other commercial credit programs, including MidSouth's Business Manager accounts receivable program and commercial lease financing. Securities available-for-sale decreased $2.5 million, from $31.4 million at December 31, 1994 to $28.9 million at March 31, 1995. The decrease represents a net result of maturities of securities available-for-sale partially offset by an improvement of $696,000 in the market value of the securities available-for-sale. Unrealized losses in the securities available-for-sale portfolio, net of unrealized gains and tax effect, were $592,500 at March 31, 1995, compared to $1,062,800 at December 31, 1994 . These amounts result from interest rate fluctuations and do not represent permanent impairment of value. Moreover, classification of securities as available-for-sale does not necessarily indicate that the securities will be sold prior to maturity. Approximately $3.3 million in cash flows resulted from maturities of securities available-for-sale and payments received on mortgage-backed securities during the first quarter of 1995. Of the $3.3 million, $728,864 was used to purchased tax-exempt municipal securities and $1.0 million was used to fund loans. Management anticipates additional purchases of tax-exempt municipal securities throughout 1995 as quality offerings become available. Capital Ratios As of March 31, 1995, MidSouth's leverage ratio was 6.72% as compared to 6.45% at December 31, 1994. Tier 1 capital to risk- weighted assets was 11.04% and total capital to risk-weighted assets was 12.30% at the end of the first quarter of 1995. At year-end 1994, Tier 1 capital to risk-weighted assets was 10.95% and total capital to risk-weighted assets was 12.20%. Effective December 31, 1994, regulatory agencies announced that the net unrealized gains or losses on securities available-for-sale would not be included in the calculations of regulatory capital ratios. Therefore, the value of available-for-sale securities is based on historical cost rather than on market value for purposes of calculating risk-based and leverage capital ratios. Common Stock Information Table 1 below lists the high, low and period-end closing sales prices of MidSouth's common stock on the American Stock Exchange Emerging Company Marketplace (the "ECM") for the past five quarters. Additional information on the price and volume of transactions on the ECM currently appears in the Wall Street Journal under the caption "Emerging Companies" under the heading "American Stock Exchange Composite Transactions." TABLE 1 - COMMON STOCK INFORMATION 1995 1994 1ST 4TH 3RD 2ND 1ST QTR QTR QTR QTR QTR High Price $12.38 $12.50 $11.88 $11.25 $9.38 Low Price $10.88 $11.25 $10.00 $8.75 $8.88 Closing Price $10.88 $11.50 $11.13 $10.25 $8.88 Nonperforming Assets and Past Due Loans Table 2 on page 14 below summarizes MidSouth's nonaccrual, past due and restructured loans and nonperforming assets. Nonperforming assets were $499,767 as of March 31, 1995, an increase of $51,724 from the $448,043 reported for December 31, 1994 and a decrease of $115,806 from the $615,573 reported for March 31, 1994. The increase in the first quarter of 1995 results from the addition of one loan placed on nonaccrual. No significant changes occurred in other nonperforming assets during the first quarter of 1995. The decrease in Other Real Estate Owned ("OREO") for the twelve months ended March 31, 1995 resulted from the sale of three parcels of OREO in 1994. Loans past due 90 days or more increased from $67,545 in March 1994 to $104,060 in December 1994 and to $230,861 as of March 31, 1995. The increase results primarily from two commercial loans totaling $135,000, one of which is an Small Business Administration ("SBA") guaranteed loan in the process of settlement with the SBA, and the other of which in management's opinion will be brought current without the need for restructing. Management has no serious doubts as to the borrowers' abilities to comply with loan repayment terms. Specific reserves have been established in the ALLL to cover potential losses on nonperforming assets. The ALLL is analyzed quarterly and additional reserves, if needed, are allocated at that time. Management believes the $905,175 in the reserve as of March 31, 1995 is sufficient to cover potential losses in nonperforming assets and in the loan portfolio. Loans classified for regulatory purposes but not included in Table 1 do not represent material credits about which management has serious doubts as to the ability of the borrower to comply with loan repayment terms.
TABLE 2 Nonpreforming Assets and Loans Past Due 90 Days ______________________________________________________________________________________________ March 31, December 31, March 31, 1995 1994 1994 ______________________________________________________________________________________________ Nonperforming loans Nonaccrual loans $301,749 $244,800 $317,149 Restructured loans 4,668 4,893 5,901 ________________ _______________ _______________ Total nonperforming loans 306,417 249,693 323,050 Other real estate owned, net 193,350 198,350 291,523 Other assets repossessed - - 1,000 _________________ _______________ ______________ Total nonperforming assets $499,767 $448,043 $615,573 ================= =============== ============== Loans past due 90 days or more and still accruing 230,861 104,060 67,545 Nonperforming loans as a % of total loans 0.50% 0.41% 0.61% Nonperforming assets as a % of total loans, other real estate owned and other assets repossessed 0.81% 0.74% 1.16% ALLL as a % of nonperforming loans 295.41% 350.00% 259.74% _______________________________________________________________________________________________
EX-27 2
9 THIS SCHEDULE CONTAINS SUMMARY FINANICAL INFORMATION EXTRACTED FROM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDING MARCH 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS DEC-31-1994 MAR-31-1995 6,261,908 98,385 7,100,000 0 28,875,336 931,404 0 61,440,380 905,175 107,693,902 98,707,194 1,536,274 112,752 618,092 71,596 0 0 6,098,460 6,170,056 1,546,455 439,900 43,782 2,030,137 568,873 598,012 1,432,125 55,000 0 1,275,563 459,342 298,085 0 0 298,085 .42 0 6.13 301,749 230,861 4,668 0 873,934 49,588 25,829 905,175 179,613 0 725,562
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