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MidSouth Bancorp Reports Operating Results (10-Q)

May 08, 2009 | About:

MidSouth Bancorp (MSL) filed Quarterly Report for the period ended 2009-03-31.

MIDSOUTH BANCORP INC. is a bank holding company engaged in general banking business. MidSouth Bancorp has a market cap of $79.3 million; its shares were traded at around $12 with a P/E ratio of 15.1 and P/S ratio of 1. The dividend yield of MidSouth Bancorp stocks is 2.4%. MidSouth Bancorp had an annual average earning growth of 24.9% over the past 5 years.

Highlight of Business Operations:

Net income available to common shareholders totaled $956,000 for the first quarter ended March 31, 2009, a decrease of 20.3% from net income of $1,199,000 reported for the first quarter of 2008 and 10.2% below net income of $1,064,000 reported for the fourth quarter of 2008. Diluted earnings per share for the first quarter of 2009 were $0.14 per share, a decrease of 22.2% from the $0.18 per share for the first quarter of 2008 and 12.5% below the $0.16 per share for the fourth quarter of 2008. In the first quarter of 2009, the Company recorded $277,000 in dividends on its Series A Preferred Stock issued to the Treasury on January 9, 2009 under the Capital Purchase Plan.

Net interest income for the first quarter of 2009 increased $852,000 in comparison to the first quarter of 2008 due to a $2.4 million decrease in interest expense which was partially offset by a $1.5 million decrease in interest income. The improvement in net interest income was offset by a $973,000 increase in non-interest expenses, primarily in occupancy expenses, group health insurance costs and increased FDIC deposit insurance premiums. Non-interest income decreased $57,000 in prior year quarterly comparison primarily due to a one-time payment of $131,000 received from VISA during the first quarter of 2008. The payment was related to VISA s redemption of a portion of its Class B shares outstanding in connection with its initial public offering. A $200,000 decrease in provision for loan losses in quarterly comparison, contributed to the $34,000 improvement to net earnings before dividends on preferred stock for the first quarter of 2009.

First quarter 2009 earnings were impacted by a $1.0 million provision for loan losses as a result of net charge-offs totaling $785,000 for the quarter, combined with credit downgrades and increased risk factors. During the first quarter of 2009, $6.4 million in loans were placed on nonaccrual status, $5.7 million of which is attributable to one shared national participation credit in the Company s Baton Rouge market. The $5.7 million credit was identified as a potential problem loan in the fourth quarter of 2008 and was a contributing factor in the $2.0 million recorded as provision expense in that quarter. Of the total $15.7 million in nonaccrual loans reported at March 31, 2009, $13.9 million, or 88.5%, are real estate credits in the Baton Rouge market and are continually monitored by the Company s risk management officers.

The Company s total assets for the first quarter ended March 31, 2009 were $923.1 million, a $13.7 million, or 1.5%, decrease from the $936.8 million in total assets recorded at December 31, 2008. Deposits were $769.4 million as of March 31, 2009, an increase of $2.7 million, or .35%, from the $766.7 million as of December 31, 2008. Money market and NOW deposits increased $16.4 million during the first quarter of 2009, offsetting a $12.9 million decrease

in certificates of deposit. Total loans were $597.2 million, a decrease of $11.7 million, or 1.92%, from $608.9 million as of December 31, 2008. Nonperforming assets to total assets were 1.96% as of March 31, 2009, compared to 1.17 % for the fourth quarter of 2008.

Taxable-equivalent net interest income totaled $10,599,000 for the first quarter of 2009, an increase of 9.2%, or $892,000, from the $9,707,000 reported for the first quarter of 2008. The improvement in taxable-equivalent net interest income resulted primarily from a decrease of $2.4 million in interest expense which offset a decrease of $1.5 million in interest income. The impact to interest income of a $31.6 million increase in the average volume of loans, from $569.2 million at March 31, 2008 to $600.8 million at March 31, 2009, was offset by a 146 basis point reduction in the average yield on loans in quarterly comparison. The average yields on loans declined from 8.48% in the first quarter of 2008 to 7.02% in the first quarter of 2009 as New York Prime (“Prime”) fell 200 basis points, from 5.25% to 3.25% during the same period. The average volume of investment securities, including federal funds sold and other interest earning assets, increased $5.8 million in quarterly comparison, while the taxable-equivalent yield increased 16 basis points, from 4.76% to 4.92%.

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