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..................... June 30, 2000
______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
(337) 237-8343
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the
past 90 days. YES __X__ NO _____
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 July 31, 2000
Common stock, $.10 par value 2,515,166
Preferred stock, no par value, $14.25 stated value 141,620
Transitional Small Business Disclosure Format:
Yes _______ No X
Page 1
<PAGE>
Page 2
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) Page
Financial Highlights 3
Statements of Condition - June 30, 2000 and
December 31, 1999 4
Statements of Income - Three and Six Months Ended
June 30, 2000 and 1999 5
Statement of Stockholders' Equity - Six Months
Ended June 30, 2000 6
Statements of Cash Flows - Six Months Ended
June 30, 2000 and 1999 7
Notes to Financial Statements 8
Item 2. Management's Discussion and Analysis or
Plan of Operation 9
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 16
Item 6. Exhibits and Reports on Form 8-K 17
Signatures 18
<PAGE>
<TABLE>
<CAPTION>
MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS (UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
EARNINGS DATA 2000 1999 2000 1999
_______________________________________________________________
<S> <C> <C> <C> <C>
Net interest income $3,631,617 $3,296,977 $7,104,344 $6,319,117
Provision for loan losses 177,391 238,000 394,353 504,950
Non-interest income 1,157,794 979,195 2,195,064 1,888,335
Non-interest expense 3,510,911 3,125,265 7,099,702 6,028,358
Provision for income tax 309,550 245,050 465,526 409,437
Net income 791,559 667,857 1,339,827 1,264,707
Preferred dividend requirement 35,405 32,903 73,464 66,286
Income available to common
shareholders $756,154 $634,954 $1,266,363 $1,198,421
====================================================================================================
PER COMMON SHARE DATA
Basic earnings per share $0.30 $0.26 $0.51 $0.49
Diluted earnings per share $0.27 $0.23 $0.45 $0.43
Book value at end of period $6.31 $5.69 $6.31 $5.69
Market price at end of period $8.06 $10.88 $8.06 $10.88
Market price of preferred stock
at end of period $25.50 $31.00 $25.50 $31.00
Weighted average shares outstanding
Basic 2,500,019 2,450,164 2,485,285 2,444,740
Diluted 2,968,851 2,967,755 2,964,430 2,968,195
====================================================================================================
AVERAGE BALANCE SHEET DATA
Total assets $286,226,612 $280,657,061 $283,262,166 $269,966,798
Earning assets 259,193,740 254,546,089 256,023,672 245,118,332
Loans and leases 177,420,427 158,432,030 174,468,558 156,817,654
Interest-bearing deposits 195,972,355 199,047,941 195,862,109 189,767,500
Total deposits 258,855,188 259,606,028 257,994,626 249,391,744
Common stockholders' equity 15,020,942 14,078,482 14,822,693 13,814,301
Total stockholders' equity 17,078,628 16,293,605 16,931,294 16,036,629
====================================================================================================
SELECTED RATIOS
Return on average assets
(annualized) 1.10% 0.95% 0.95% 0.94%
Return on average common equity
(annualized) 19.97% 18.09% 17.13% 17.49%
Return on average total equity
(annualized) 18.39% 16.44% 15.87% 15.90%
Leverage capital ratio 6.34% 5.70% 6.34% 5.70%
Tier 1 risk-based capital ratio 9.20% 9.01% 9.20% 9.01%
Total risk-based capital ratio 10.25% 10.08% 10.25% 10.08%
Allowance for loan losses as a %
of total loans 1.13% 1.17% 1.13% 1.17%
=====================================================================================================
PERIOD ENDING BALANCE SHEET DATA 6/30/00 6/30/99 Net Change % Change
Total assets $290,655,749 $282,503,279 $8,152,470 2.89%
Earning assets 261,394,994 257,675,940 $3,719,054 1.44%
Loans and leases, net 180,998,954 160,787,191 $20,211,763 12.57%
Interest-bearing deposits 195,136,541 201,570,300 ($6,433,759) -3.19%
Total deposits 259,557,897 261,272,545 ($1,714,648) -0.66%
Common stockholders' equity 15,863,166 13,991,819 $1,871,347 13.37%
Total stockholders' equity 17,881,251 16,185,079 $1,696,172 10.48%
=====================================================================================================
</TABLE>
3
<PAGE>
[CAPTION]
<TABLE>
MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION
__________________________________________________________________________________
June 30, December 31,
2000 1999 *
ASSETS (unaudited)
___________ ___________
<S> <C> <C>
Cash and due from banks $14,028,769 $13,587,690
Federal funds sold - 900,000
___________ ___________
Total cash and cash equivalents 14,028,769 14,487,690
Interest bearing deposits in banks 128,619 356,124
Securities available-for-sale, at fair value
(cost of $56,215,922 in June 2000 and
$57,106,793 in December 1999) 54,881,822 55,689,863
Securities held-to-maturity (estimated market
value of $23,112,774 in June 2000 and
$20,776,767 in December 1999) 23,317,417 21,287,597
Loans, net of allowance for loan losses of
$2,068,182 in June 2000 and $1,967,326
in December 1999 180,998,954 168,501,407
Bank premises and equipment, net 12,056,724 11,367,815
Other real estate owned, net 462,268 569,963
Accrued interest receivable 2,179,637 1,919,182
Goodwill, net 523,612 554,153
Other assets 2,077,927 1,990,047
___________ ___________
Total assets $290,655,749 $276,723,841
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing $64,421,356 $63,668,676
Interest bearing 195,136,541 188,021,530
___________ ___________
Total deposits 259,557,897 251,690,206
Securities sold under
repurchase agreements 1,474,471 606,601
FHLB advances 7,000,000 3,000,000
Accrued interest payable 677,053 715,171
Long-term notes payable 3,565,448 3,459,097
Other liabilities 499,629 327,605
___________ ___________
Total liabilities 272,774,498 259,798,680
___________ ___________
Commitments and contingencies - -
Stockholders' Equity:
Preferred Stock, no par value, $14.25
stated value - 5,000,000 shares
authorized, 141,620 and 152,736
issued and outstanding on
June 30, 2000 and December 31, 1999,
respectively 2,018,085 2,176,488
Common stock, $.10 par value- 5,000,000
shares authorized, 2,515,166 and
2,481,843 issued and outstanding on
June 30, 2000 and December 31, 1999,
respectively 251,517 248,184
Surplus 11,138,784 10,983,714
Unearned ESOP shares (201,671) (89,044)
Unrealized losses on securities
available-for-sale, net of deferred taxes
of ($437,950) in June 2000 and ($468,500)
in December 1999 (896,150) (948,430)
Retained earnings 5,570,686 4,554,249
___________ ___________
Total stockholders' equity 17,881,251 16,925,161
___________ ___________
Total liabilities and stockholders' equity $290,655,749 $276,723,841
=========== ===========
</TABLE>
* The consolidated statement of condition at December 31, 1999 is taken
from the audited balance sheet on that date.
See notes to consolidated financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
_______________________________________________________________________________________________
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
___________________________ ___________________________
<S> <C> <C> <C> <C>
INTEREST INCOME:
Loans, including fees $4,654,319 $4,000,706 $9,047,119 $7,758,244
Securities
Taxable 910,005 832,024 1,768,858 1,517,003
Nontaxable 305,964 277,107 594,098 537,789
Federal funds sold 15,048 213,666 67,286 372,299
__________ __________ __________ __________
TOTAL 5,885,336 5,323,503 11,477,361 10,185,335
__________ __________ __________ __________
INTEREST EXPENSE:
Deposits 2,088,645 1,959,050 4,110,632 3,734,316
Securities sold under
repurchase agreements,
federal funds purchased
and advances 83,893 3,039 107,991 3,039
Long term debt 81,181 64,437 154,394 128,863
__________ __________ __________ __________
TOTAL 2,253,719 2,026,526 4,373,017 3,866,218
__________ __________ __________ __________
NET INTEREST INCOME 3,631,617 3,296,977 7,104,344 6,319,117
PROVISION FOR LOAN LOSSES 177,391 238,000 394,353 504,950
__________ __________ __________ __________
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 3,454,226 3,058,977 6,709,991 5,814,167
__________ __________ __________ __________
OTHER OPERATING INCOME:
Service charges on deposits 832,610 724,369 1,573,495 1,430,366
Gains on securities, net - - 1,770 -
Credit life insurance 68,435 25,172 125,729 41,340
Other charges and fees 256,749 229,654 494,070 416,629
__________ __________ __________ __________
TOTAL OTHER INCOME 1,157,794 979,195 2,195,064 1,888,335
__________ __________ __________ __________
OTHER EXPENSES:
Salaries and employee benefits 1,670,078 1,479,320 3,324,315 2,860,928
Occupancy expense 790,133 674,631 1,570,665 1,325,389
Other 1,050,700 971,314 2,204,722 1,842,041
__________ __________ __________ __________
TOTAL OTHER EXPENSES 3,510,911 3,125,265 7,099,702 6,028,358
__________ __________ __________ __________
INCOME BEFORE INCOME TAXES 1,101,109 912,907 1,805,353 1,674,144
PROVISION FOR INCOME TAXES 309,550 245,050 465,526 409,437
__________ __________ __________ __________
NET INCOME $791,559 $667,857 $1,339,827 $1,264,707
PREFERRED DIVIDEND REQUIREMENT 35,405 32,903 73,464 66,286
__________ __________ __________ __________
INCOME AVAILABLE TO COMMON
SHAREHOLDERS $756,154 $634,954 $1,266,363 $1,198,421
========== ========== ========== ==========
BASIC EARNINGS PER COMMON SHARE $0.30 $0.26 $0.51 $0.49
========== ========== ========== ==========
DILUTED EARNINGS PER COMMON SHARE $0.27 $0.23 $0.45 $0.43
========== ========== ========== ==========
</TABLE>
* The consolidated statement of income at December 31, 1999 is taken from
the audited income statement of that date.
See notes to consolidated financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2000 (UNAUDITED)
___________________________________________________________________________________________________________________________________
UNREALIZED
LOSSES
ON SECURITIES
PREFERRED STOCK COMMON STOCK ESOP AVAILABLE RETAINED
SHARES AMOUNT SHARES AMOUNT SURPLUS OBLIGATION FOR-SALE EARNINGS TOTAL
___________________ ___________________ ___________ __________________________________ __________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE,
DECEMBER 31, 1999 152,736 $2,176,488 2,481,843 $248,184 $10,983,714 ($89,044) ($948,430) $4,554,249 $16,925,161
Dividends on
common stock (249,926) (249,926)
Dividends on
preferred stock (73,464) (73,464)
Preferred stock
conversion (11,116) (158,403) 33,323 3,333 155,070
Net income 1,339,827 1,339,827
Increase in ESOP
obligation,
net of repayments (112,627) (112,627)
Net change in unrealized
gain/loss on securities
available-for-sale,
net of tax 52,280 52,280
________ __________ _________ ________ ___________ _________ _________ __________ ___________
BALANCE,
JUNE 30, 2000 141,620 $2,018,085 2,515,166 $251,517 $11,138,784 ($201,671) ($896,150) $5,570,686 $17,881,251
======== ========== ========= ======== =========== ========= ========= ========== ===========
</TABLE>
See notes to consolidated financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2000 and 1999
__________________________________________________________________________________________
June 30, 2000 June 30, 1999
_____________ _____________
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $1,339,827 $1,264,707
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 671,201 571,616
Provision for loan losses 394,353 504,950
Provision for deferred income taxes 4,548 12,228
Discount accretion (premium amortization), net 45,370 13,660
Gain on sale of premises and equipment (5,338) (1,925)
Gain on sale of securities (1,770) -
Change in accrued interest receivable (260,455) (171,653)
Change in accrued interest payable (38,118) 81,256
Write-down of other real estate owned 93,000 -
Other, net 49,046 (46,651)
_________________________________
NET CASH PROVIDED BY OPERATING ACTIVITIES 2,291,664 2,228,188
_____________ _____________
CASH FLOWS FROM INVESTING ACTIVITIES:
Net decrease in interest-bearing deposits in banks 227,505 4,917
Proceeds from maturities and calls of securities ava 6,463,539 6,313,566
Proceeds from sales of securities available-for-sale 1,027,765 -
Purchases of securities available-for-sale (6,642,548) (27,027,658)
Purchases of securities held-to-maturity (2,031,305) (2,092,845)
Loan originations, net of repayments (13,066,444) (5,000,180)
Purchases of premises and equipment (1,330,481) (1,851,017)
Proceeds from sales of premises and equipment 6,250 24,000
Proceeds from sales of other real estate owned 76,612 58,724
Purchase of insurance premium financing company - (3,503,497)
_____________ _____________
NET CASH USED IN INVESTING ACTIVITIES (15,269,107) (33,073,990)
_____________ _____________
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits 7,867,691 31,348,243
Net increase in securities sold under repurchase
agreements and FHLB borrowings 4,867,870 752,946
Issuance of notes payable 415,000 75,000
Repayments of notes payable (308,649) (196,774)
Proceeds from issuance of common stock - 198,097
Payment of dividends (323,390) (311,325)
_________________________________
NET CASH PROVIDED BY FINANCING ACTIVITIES 12,518,522 31,866,187
NET (DECREASE) INCREASE IN CASH & CASH EQUIVALENTS (458,921) 1,020,385
CASH & CASH EQUIVALENTS AT BEGINNING OF PERIOD 14,487,690 20,603,536
_____________ _____________
CASH & CASH EQUIVALENTS AT END OF PERIOD $14,028,769 $21,623,921
============= =============
</TABLE>
See notes to consolidated financial statements.
7
<PAGE>
MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
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 Bancorp, Inc. ("MidSouth") and
its subsidiaries as of June 30, 2000 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 1999 annual consolidated report
and Form 10-KSB.
The results of operations for the three and six month periods
ended June 30, 2000 are not necessarily indicative of the
results to be expected for the entire year.
2. ALLOWANCE FOR LOAN AND LEASE LOSSES
An analysis of the activity in the allowance for loan and lease
losses is as follows:
<TABLE>
<CAPTION>
Six Months Ended
June 30,
2000 1999
__________ __________
<S> <C> <C>
Balance at beginning of period $1,967,326 $1,860,490
Provision for loan losses 394,353 504,950
Recoveries 76,871 65,122
Loans charged off (370,368) (526,873)
__________ __________
Balance at end of period $2,068,182 $1,903,689
========== ==========
</TABLE>
3. COMPREHENSIVE INCOME
MidSouth adopted Statement of Financial Accounting Standards
No. 130 "Reporting Comprehensive Income" ("SFAS 130")
effective January 1, 1998. SFAS 130 establishes standards
for reporting and display of comprehensive income and its
components. Comprehensive income includes net income and
other comprehensive income (losses) which, in the case of
MidSouth, only includes unrealized gains and losses on
securities available-for-sale.
Following is a summary of MidSouth's comprehensive income
for the six months ended June 30, 2000 and 1999.
<TABLE>
<CAPTION>
2000 1999
___________ ___________
<S> <C> <C>
Net income $1,339,827 $1,264,707
Other comprehensive income
(losses), net of tax 52,280 (664,650)
___________ ___________
Total comprehensive income $1,392,107 $600,057
=========== ===========
</TABLE>
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION
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 1999 annual consolidated
financial statements, the notes thereto and the related
Management's Discussion and Analysis.
MidSouth Bancorp, Inc. announced net income of $791,559
for the second quarter of 2000, a 19% increase over net
income of $667,857 reported for the second quarter of
1999. Income available to common shareholders totaled
$756,154 for the second quarter of 2000, compared to
$634,954 for the second quarter of 1999. Basic earnings
per share were $.30 and $.26 for the quarters ended June
30, 2000 and 1999, respectively. Diluted earnings per
share were $.27 for the second quarter of 2000 compared to
$.23 for the second quarter of 1999.
Net income for the six months ended June 30, 2000 totaled
$1,339,827 compared to $1,264,707 for the six months
ended June 30, 1999. Basic earnings per share were $.51
and $.49 for the two six month periods, respectively.
Diluted earnings per share were $.45 for the six months
ended June 30, 2000 compared to $.43 for the six months
ended June 30, 1999.
The increase in earnings resulted from increased net interest
income primarily due to a higher volume of loans as a
percentage of earning assets combined with an increase in
the net yield on earning assets. An increase in non-interest
income from service charges on deposit accounts and sales
of credit life insurance contributed to the increase in
earnings for the three and six month periods ending June
30, 2000. Net income was also favorably affected by
decreases in provisions for loan losses of $60,609 and
$110,587, respectively for the quarter and six months.
The increased net interest income and non-interest income
were partially offset by increases in non-interest expense,
primarily salaries and benefits and occupancy expenses.
These increases reflect the opening of three additional
offices in the past twelve months and expenses associated
with the development and introduction of MidSouth's
internet banking product, NetBanking. Launched on May
1, 2000, by June 30th 6% of MidSouth's demand deposit
customer base was using NetBanking for on-line account
access, bill paying, or cash management services.
Total end of period consolidated assets increased $8.2
million, from $282.5 million at June 30, 1999 to $290.7
million at June 30, 2000. Interest-bearing deposits
decreased $6.4 million and total deposits decreased $1.7
million, from $201.6 million and $261.3 million,
respectively at June 30, 1999 to $195.1 million and $259.6
million at June 30, 2000. The decrease results primarily
from the loss of a large public fund contract in the third
quarter of 1999, offset by a $4.7 million increase in demand
deposits.
Loans, net of Allowance for Loan Losses ("ALL"),
increased $20.2 million or 13%, from $160.8 million in the
second quarter of 1999 to $181.0 million in the second
9
<PAGE>
quarter of 2000. Provisions for loan and lease losses totaled
$177,391 in the second quarter of 2000 compared to
$238,000 in the second quarter of 1999, and $394,353 in
the first six months of 2000 compared to $504,950 in the
comparable 1999 period.
Nonperforming loans as a percentage of total loans
decreased slightly from .10% in June of 1999 to .08% in
June of 2000. Loans past due ninety days and over
decreased, from $550,516 at June 30, 1999 to $491,871 at
June 30, 2000. Other real estate owned increased $104,661
for the same period. The ALL represented 339% of
nonperforming assets as of June 30, 2000 compared to
364% as of June 30, 1999.
MidSouth's leverage ratio was 6.34% at June 30, 2000, up
from 5.70% at June 30, 1999. Return on average common
equity for the quarter was 19.97% and return on average
assets was 1.10%.
Earnings Analysis
Net Interest Income
Average earning assets increased 2%, or $6.1 million, from
$254.5 million for the three months ended June 30, 1999 to
$260.6 million for the three months ended June 30, 2000.
The mix of earning assets shifted significantly, from 62%
of average earning assets in loans for the second quarter of
1999 up to 68% in the second quarter of 2000. The average
yield on loans increased 28 basis points, from 10.13% to
10.41% for the six months ended June 30, 2000.
Market competition for quality credits held commercial and
real estate loan yields to a 4 basis point increase in
quarterly comparison. Consumer loan yields increased 124
basis points primarily due to insurance premium financing
loans acquired with the purchase of TMC Financial
Services, Inc. ("TMC") on May 15,1999. For the quarter
ending June 30, 2000, TMC's portfolio averaged $3.3
million with an average yield of approximately 22%. In the
second quarter of 1999, TMC's portfolio had a lesser
impact on consumer yields due to a fewer number of days
held in the Bank's loan portfolio. Also included in
calculating consumer loan yields, the Finance Company's
portfolio averaged $1.7 million in consumer finance loans
yielding an average of 28% for the second quarter of 2000.
Additionally, credit card loans at the Bank averaged $1.3
million and yielded an average of 19% for the same period.
Investment volume increased by $4.3 million, from $77.9
million at June 30, 1999 to $82.2 million at June 30, 2000.
The volume of federal funds sold decreased $17.1 million
in quarterly comparison due to the anticipated withdrawal
of significant public fund deposits in the third quarter of
1999. The average taxable-equivalent yield on investments
increased 18 basis points, from 6.34% at June 30, 1999 to
6.52% at June 30, 2000. The change in the mix of earning
assets combined with higher yields increased the taxable-
equivalent yield on quarterly average earning assets 58
10
<PAGE>
basis points, from 8.58% for the second quarter of 1999 to
9.16% for the second quarter of 2000.
Average interest-bearing deposits decreased $3.1 million in
quarterly comparison, from $199.0 million at June 30, 1999
to $195.9 million at June 30, 2000, primarily due to the
withdrawal of public fund deposits in the third quarter of
1999. The rate paid on interest-bearing deposits increased
28 basis points for the same period and resulted in
increased interest expense for the quarter ended June 30,
2000 despite the decrease in volume. An increase in
overnight borrowings with the Federal Home Loan Bank of
Dallas resulted in an increase in total interest-bearing
liabilities of $2.3 million in quarterly comparison. The
average rate paid on total interest-bearing liabilities
increased 35 basis points, from 4.01% for the quarter ended
June 30, 1999 to 4.36% for the quarter ended June 30,
2000.
The net effect of changes in the volume and mix of average
earning assets and interest-bearing liabilities increased net
interest income $334,640 in quarterly comparison. The net
taxable-equivalent yield on average earning assets
increased 34 basis points, from 5.39% for the quarter ended
June 30, 1999 to 5.73% for the quarter ended June 30,
2000. Review of the changes in the volume and yields of
average earning assets and interest-bearing liabilities
between the two six month periods ended June 30, 2000
and 1999 reflected results similar to the quarterly
comparison. The net taxable-equivalent yield on average
earning assets for the six months ended June 30, 2000
increased 35 basis points from 5.39% at June 30, 1999 to
5.74% at June 30, 2000. As a result, net interest income
increased $785,227 between the two six month periods
reviewed.
Non-interest Income
MidSouth's primary source of non-interest income, service
charges on deposit accounts, increased $108,241 for the
three months and $143,129 for the six months ended June
30, 2000 as compared to the same periods for 1999. The
increases resulted primarily from an increase in service
charge income due to a higher volume of accounts serviced
and additional insufficient funds fees.
Other non-interest income, net of gains on sales of
investment securities, increased $27,095 in quarterly
comparison and $77,441 in year-to-date comparison. A
mortgage origination program with a third party processor
contributed $11,531 to the increase for the quarter and
$14,365 for the six months ended June 30, 2000. Lease
income from a third party investment firm contributed
$13,625 to the quarterly increase and $26,686 to the year-
to-date increase. VISA merchant, debit card and ATM fee
income increased in 2000, however, expenses associated
with these programs have also increased, offsetting the
income. Income from the sale of credit life insurance
increased $43,263 for the quarter and $84,389 for the six
months period ended June 30, 2000 as compared to the
same periods ended June 30, 1999.
11
<PAGE>
Non-interest Expense
Non-interest expense increased $385,646 for the three
months and $1,017,344 for the six months ended June 30,
2000 compared to the three and six months ended June 30,
1999. Increases were recorded primarily in the categories
of salaries and employee benefits and occupancy expenses
due primarily to the three new offices opened in the past
twelve months. In addition, increases were recorded in
credit reporting expenses, VISA programs and ATM
processing fees. These increases reflect MidSouth's long
term investment in staff development, system upgrades and
market penetration.
Salaries and employee benefits increased primarily due to
additional staff and an increase in the cost of group health
insurance. The number of full-time equivalent ("FTE")
employees increased by 14, from 169 in June 1999 to 183
in June 2000. The increase results primarily from staffing
three new locations and an electronic banking department
responsible for MidSouth's NetBanking product introduced
during the second quarter of 2000.
Occupancy expense increased in the three and six month
periods ended June 30, 2000 compared to the same period
of 1999 due to increases in depreciation of building,
furniture, and equipment, maintenance expenses incurred
on fixed assets and property taxes.
Balance Sheet Analysis
MidSouth ended the second quarter of 2000 with
consolidated assets of $290,655,749, an increase of $13.9
million or 5% from the $276,723,841 reported for
December 31, 1999. Deposits increased over the six
months ended June 30, 1999 by $7.9 million, from
$251,690,206 at December 31, 1999 to $259,557,897,
primarily in commercial and individual money market
accounts.
Loans experienced growth of $12.6 million in the first six
months of 2000, primarily during the second quarter, with
the majority of the increase in commercial and real estate
loans. Securities available-for-sale decreased $808,041
from $55,689,863 at December 31, 1999 to $54,881,822
at June 30, 2000. The decrease reflects sales, maturities
and principal paydowns of $7.5 million, offset by purchases
of $6.7 million. Purchases of securities held-to-maturity
totaled $2.0 million for the same period. Unrealized losses
in the securities available-for-sale portfolio, net of
unrealized gains and tax effect, were $896,150 at June 30,
2000, compared to a net unrealized loss of $948,430 at
December 31, 1999. These amounts result from interest
rate fluctuations and do not represent permanent adjustment
of value. Moreover, classification of securities as
available-for-sale does not necessarily indicate that the
securities will be sold prior to maturity.
12
<PAGE>
Capital
As of June 30, 2000, MidSouth's leverage ratio was 6.34%
as compared to 6.23% at December 31, 1999. Tier 1 capital
to risk-weighted assets was 9.20% and total capital to risk-
weighted assets was 10.25% at the end of the second
quarter of 2000. At year-end 1999, Tier 1 capital to risk-
weighted assets was 9.47% and total capital to risk-
weighted assets was 10.55%.
13
<PAGE>
Nonperforming Assets and Past Due Loans
Table 1 summarizes MidSouth's nonaccrual, past due and
restructured loans and nonperforming assets.
Nonperforming Assets and
Loans Past Due 90 Days
===========================================================
June December June
30, 31, 30,
2000 1999 1999
===========================================================
Nonperforming loans $147,145 $234,962 $165,630
Other real estate
owned, net 462,236 569,963 357,575
Other assets repossessed - 31,755 42,563
__________________________________
Total nonperforming
assets $609,381 $836,680 $565,768
==================================
Loans past due 90 days
or more and still
accruing $491,871 $793,823 $550,516
Nonperforming loans
as a % of total loans .08% 0.14% 0.10%
Nonperforming assets
as a % of total loans,
other real estate
owned and other assets
Repossessed 0.33% 0.49% 0.35%
ALL as a % of
nonperforming assets 339.39% 235.13% 363.85%
14
<PAGE>
Nonperforming assets were $609,381 as of June 30, 2000 a
decrease of $227,299 from the $836,680 reported for
December 31, 1999 and an increase of $43,613 from the
$565,768 reported for June 30, 1999. Loans past due 90
days or more increased from $550,516 in June 1999 to
$793,823 in December 1999 and decreased to $491,871 as
of June 30, 2000. Of the $491,871 in loans past due 90
days or more, $66,058 were funded by the Finance
Company and $15,694 represent past due insurance
premium financing loans at TMC.
Specific reserves have been established in the ALL to cover
potential losses on nonperforming assets. The ALL is
analyzed quarterly and additional reserves, if needed, are
allocated at that time. Management believes the
$2,068,182 in the reserve as of June 30, 2000 is sufficient
to cover potential losses in nonperforming assets and in the
loan and lease portfolios. 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.
15
<PAGE>
Page 16
Item 4. Submission of Matters to a Vote of Security Holders
At the annual meeting of shareholders of MidSouth Bancorp, Inc.
held May 10, 2000 at 2:00 p.m., the Class III Directors were elected.
The following provides information as to the votes:
<TABLE>
<CAPTION>
Election of Directors For Withheld Abstentions Broker Non-Votes
<S> <C> <C> <C> <C>
C. R. Cloutier 1,876,165 9,138
J. B. Hargroder 1,876,544 8,759
William Simmons 1,876,207 9,096
</TABLE>
<PAGE>
Page 17
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exihibit Number Document Description
_______________ ____________________
3.1 Amended and Restated Articles of Incorporation of
MidSouth Bancorp, Inc. is included as Exhibit 3.1
to the MidSouth's Report on Form 10-K for
the year ended December 31, 1993, and is
incorporated herein by reference.
3.2 Articles of Amendment to Amended and Restated
Articles of Incorporation dated July 19, 1995
are included as Exhibit 4.2 to MidSouth's
Registration Statement on Form S-8 filed
September 20, 1995 and is incorporated herein
by reference.
3.3 Amended and Restated By-laws adopted by the Board
of Directors on April 12, 1995 are included as
Exhibit 3.2 to Amendment No. 1 to MidSouth's
Registration Statement on Form S-4 (Reg.
No. 33-58499) filed on June 1, 1995.
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.
10.6 MidSouth Bancorp, Inc.'s 1997 Stock Incentive
Plan is included as Exhibit 4.5 to MidSouth's
definitive Proxy Statement filed April 11, 1997,
and is incorporated herein by reference.
<PAGE>
Page 18
10.7 The MidSouth Bancorp, Inc. Dividend Reinvestment
and Stock Purchase Plan is included as Exhibit 4.6
to MidSouth Bancorp, Inc.'s Form S-3D filed on
July 25, 1997 and is incorporated herein by
reference.
10.8 Loan Agreements and Master Notes for lines of
credit established for MidSouth Bancorp, Inc. and
Financial Services of the South, Inc. are
included as Exhibit 10.7 of MidSouth's Form 10-QSB
filed on August 14, 1997 and is incorporated herein
by reference.
10.9 Modification Agreement to the Loan Agreement and
Master Note for the Line of Credit established for
MidSouth Bancorp, Inc. is included as Exhibit 10.9
of MidSouth's Form 10-QSB filed on August 13, 1999
and is incorporated herein by reference.
11 Computation of earnings per share
27 Financial Data Schedule
(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: August 14, 2000
/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, Senior Vice
President & Controller
