MidSouth Bancorp (MSL, Financial) filed Quarterly Report for the period ended 2010-09-30.
Midsouth Bancorp has a market cap of $138.1 million; its shares were traded at around $14.2 with a P/E ratio of 32.3 and P/S ratio of 2.1. The dividend yield of Midsouth Bancorp stocks is 2%. Midsouth Bancorp had an annual average earning growth of 2.6% over the past 10 years.
Net interest income increased $367,000 in quarterly comparison primarily due to a $745,000 decrease in interest expense on interest-bearing liabilities that offset a $378,000 decrease in interest income from earning assets. The improvement in net interest income was offset by a $500,000 increase in the provision for loan losses and a $236,000 decrease in non-interest income. Provisions totaling $1.5 million were expensed in the third quarter 2010 primarily due to the impairment analysis of a $3.4 million commercial development loan. Non-interest income decreased primarily due to a $309,000 decrease in service charges on deposit accounts, including insufficient funds fees, which was partially offset by a $90,000 increase in ATM/debit card income. Non-interest expense decreased $209,000 in quarterly comparison primarily due to decreases of $387,000 in salary and benefit costs, $110,000 in occupancy expenses and $52,000 in marketing costs. The decrease in salaries and benefit costs resulted primarily from a reduction in full time equivalent employees from 413 at September 30, 2009 to 388 at September 30, 2010. Additionally, group health insurance expense decreased $212,000 as MidSouth s partially self-funded group health insurance plan experienced a lower amount of insurance claims in year-over-year comparison. These decreases were partially offset by a $260,000 increase in data processing costs and an $84,000 increase in expenses related to a customer relationship management (“CRM”) program. The $260,000 increase in data processing costs resulted primarily from a one-time accrual for a data processing contract cancellation.
In year-to-date comparison, the $492,000 increase in net earnings available to common shareholders resulted primarily from a $704,000 reduction in non-interest expense and a $243,000 increase in net interest income. Additionally, non-interest income increased $41,000 year over year, as a $215,000 decrease in service charges on deposit accounts was offset by increases of $179,000 in ATM and debit card income and $77,000 in other non-interest income. The resulting $988,000 improvement in earnings was partially offset by a $423,000 increase in tax expense, a $50,000 increase in the provision for loan losses, and a $23,000 increase in preferred dividends. The $423,000 increase in tax expense for the nine months ended September 30, 2010 resulted primarily from the improvement in earnings before taxes as compared to the nine months ended September 30, 2009.
Fully taxable-equivalent (“FTE”) net interest income totaled $10.7 million for the third quarter of 2010, an increase of 3.2%, or $330,000, from the $10.4 million reported for the third quarter of 2009. The increase in FTE net interest income resulted primarily from a 45 basis point reduction in the average rate paid on interest-bearing liabilities, from 1.56% at September 30, 2009 to 1.11% at September 30, 2010. The $745,000 reduction in interest expense offset a $415,000 decrease in interest income on earning assets for the period. Interest income on loans declined due to a $6.5 million decrease in the average volume and a 14 basis point decrease in the average yield on loans in quarterly comparison, as the loan portfolio continues to rollover into a lower rate environment. Interest income on investments decreased as the impact of a 124 basis point decline in the average yield on investments offset a $75.2 million increase in the average volume. The increase in the average volume of investments resulted primarily from the temporary investment of capital proceeds from our common stock offering in December 2009 and from a shift in federal funds sold balances into interest-bearing deposit balances. Investment yields have been significantly impacted as higher yielding investments have rolled out of the portfolio into much lower yielding bonds and excess liquidity has earned yields of 25 points or less.
The average volume of interest-bearing deposits increased $1.3 million, from $584.9 million at September 30, 2009 to $586.2 million at September 30, 2010. A $21.0 million increase in the volume of NOW, money market and savings deposits, primarily in consumer and commercial Platinum money market accounts, offset a $19.7 million decrease in the average volume of time deposits. We offer competitive market rates of interest on our Platinum money market accounts, and in the current rate environment those rates are comparable to rates earned on time deposits. The average volume of retail repurchase agreements, included in securities sold under agreements to repurchase, increased $1.6 million in quarterly comparison, despite a 49 basis point reduction in rates.
In year-to-date comparison, FTE net interest income increased $108,000, as a $2.0 million reduction in interest expense offset a $1.9 million decrease in interest income. The decrease in interest income on earning assets resulted primarily from a $14.0 million decrease in the average volume of loans, combined with a 13 basis point decline in the average yield on loans, from 6.97% at September 30, 2009 to 6.84% at September 30, 2010. Additionally, interest income on investments decreased as a 137 basis point reduction in the average yield earned on investments offset the impact of a $64.7 million increase in the average volume of investments. Interest expense on interest-bearing liabilities decreased primarily due to a 47 basis point reduction in the average rate paid on interest-bearing deposits, from 1.45% at September 30, 2009 to 0.98% at September 30, 2010. As a result, the taxable-equivalent net interest margin declined 23 basis points, from 4.96% for the nine months ended September 30, 2009 to 4.73% for the nine months ended September 30, 2010.
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Midsouth Bancorp has a market cap of $138.1 million; its shares were traded at around $14.2 with a P/E ratio of 32.3 and P/S ratio of 2.1. The dividend yield of Midsouth Bancorp stocks is 2%. Midsouth Bancorp had an annual average earning growth of 2.6% over the past 10 years.
Highlight of Business Operations:
We reported net earnings available to common shareholders of $939,000 for the third quarter of 2010, a decrease of 17.0% compared to net earnings available to common shareholders of $1.1 million reported for the third quarter of 2009. Diluted earnings for the third quarter of 2010 were $0.09 per common share, a decrease of 47.1% from $0.17 per common share reported for the third quarter of 2009.Net interest income increased $367,000 in quarterly comparison primarily due to a $745,000 decrease in interest expense on interest-bearing liabilities that offset a $378,000 decrease in interest income from earning assets. The improvement in net interest income was offset by a $500,000 increase in the provision for loan losses and a $236,000 decrease in non-interest income. Provisions totaling $1.5 million were expensed in the third quarter 2010 primarily due to the impairment analysis of a $3.4 million commercial development loan. Non-interest income decreased primarily due to a $309,000 decrease in service charges on deposit accounts, including insufficient funds fees, which was partially offset by a $90,000 increase in ATM/debit card income. Non-interest expense decreased $209,000 in quarterly comparison primarily due to decreases of $387,000 in salary and benefit costs, $110,000 in occupancy expenses and $52,000 in marketing costs. The decrease in salaries and benefit costs resulted primarily from a reduction in full time equivalent employees from 413 at September 30, 2009 to 388 at September 30, 2010. Additionally, group health insurance expense decreased $212,000 as MidSouth s partially self-funded group health insurance plan experienced a lower amount of insurance claims in year-over-year comparison. These decreases were partially offset by a $260,000 increase in data processing costs and an $84,000 increase in expenses related to a customer relationship management (“CRM”) program. The $260,000 increase in data processing costs resulted primarily from a one-time accrual for a data processing contract cancellation.
In year-to-date comparison, the $492,000 increase in net earnings available to common shareholders resulted primarily from a $704,000 reduction in non-interest expense and a $243,000 increase in net interest income. Additionally, non-interest income increased $41,000 year over year, as a $215,000 decrease in service charges on deposit accounts was offset by increases of $179,000 in ATM and debit card income and $77,000 in other non-interest income. The resulting $988,000 improvement in earnings was partially offset by a $423,000 increase in tax expense, a $50,000 increase in the provision for loan losses, and a $23,000 increase in preferred dividends. The $423,000 increase in tax expense for the nine months ended September 30, 2010 resulted primarily from the improvement in earnings before taxes as compared to the nine months ended September 30, 2009.
Fully taxable-equivalent (“FTE”) net interest income totaled $10.7 million for the third quarter of 2010, an increase of 3.2%, or $330,000, from the $10.4 million reported for the third quarter of 2009. The increase in FTE net interest income resulted primarily from a 45 basis point reduction in the average rate paid on interest-bearing liabilities, from 1.56% at September 30, 2009 to 1.11% at September 30, 2010. The $745,000 reduction in interest expense offset a $415,000 decrease in interest income on earning assets for the period. Interest income on loans declined due to a $6.5 million decrease in the average volume and a 14 basis point decrease in the average yield on loans in quarterly comparison, as the loan portfolio continues to rollover into a lower rate environment. Interest income on investments decreased as the impact of a 124 basis point decline in the average yield on investments offset a $75.2 million increase in the average volume. The increase in the average volume of investments resulted primarily from the temporary investment of capital proceeds from our common stock offering in December 2009 and from a shift in federal funds sold balances into interest-bearing deposit balances. Investment yields have been significantly impacted as higher yielding investments have rolled out of the portfolio into much lower yielding bonds and excess liquidity has earned yields of 25 points or less.
The average volume of interest-bearing deposits increased $1.3 million, from $584.9 million at September 30, 2009 to $586.2 million at September 30, 2010. A $21.0 million increase in the volume of NOW, money market and savings deposits, primarily in consumer and commercial Platinum money market accounts, offset a $19.7 million decrease in the average volume of time deposits. We offer competitive market rates of interest on our Platinum money market accounts, and in the current rate environment those rates are comparable to rates earned on time deposits. The average volume of retail repurchase agreements, included in securities sold under agreements to repurchase, increased $1.6 million in quarterly comparison, despite a 49 basis point reduction in rates.
In year-to-date comparison, FTE net interest income increased $108,000, as a $2.0 million reduction in interest expense offset a $1.9 million decrease in interest income. The decrease in interest income on earning assets resulted primarily from a $14.0 million decrease in the average volume of loans, combined with a 13 basis point decline in the average yield on loans, from 6.97% at September 30, 2009 to 6.84% at September 30, 2010. Additionally, interest income on investments decreased as a 137 basis point reduction in the average yield earned on investments offset the impact of a $64.7 million increase in the average volume of investments. Interest expense on interest-bearing liabilities decreased primarily due to a 47 basis point reduction in the average rate paid on interest-bearing deposits, from 1.45% at September 30, 2009 to 0.98% at September 30, 2010. As a result, the taxable-equivalent net interest margin declined 23 basis points, from 4.96% for the nine months ended September 30, 2009 to 4.73% for the nine months ended September 30, 2010.
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