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....... September 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 October 31, 2000
Common stock, $.10 par value 2,515,166
Transitional Small Business Disclosure Format:
Yes _______ No ____ X _____
Page 1
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Page 2
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) Page
Financial Highlights 3
Statements of Condition - September 30, 2000
and December 31, 1999 4
Statements of Income - Three and Nine Months
Ended September 30, 2000 and 1999 5
Statement of Stockholders' Equity - Nine Months
Ended September 30, 2000 6
Statements of Cash Flows - Nine Months Ended
September 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 6. Exhibits and Reports on Form 8-K 15
Signatures 16
<PAGE>
<TABLE>
<CAPTION>
MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS (UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
EARNINGS DATA 2000 1999 2000 1999
_________________________________________________
<S> <C> <C> <C> <C>
Net interest income $3,710,140 $3,490,818 $10,814,484 $9,859,688
Provision for loan losses 200,727 173,100 595,080 678,050
Non-interest income 1,144,698 1,048,458 3,339,762 2,936,793
Non-interest expense 3,582,430 3,390,025 10,682,132 9,468,136
Provision for income tax 276,150 263,175 741,676 672,612
Net income 795,531 712,976 2,135,358 1,977,683
Preferred dividend requirement <FN1> 139,905 32,648 213,369 98,934
Income available to common shareholders $655,626 $680,328 $1,921,989 $1,878,749
=========================================================================================
PER COMMON SHARE DATA
Basic earnings per share $0.26 $0.28 $0.77 $0.77
Diluted earnings per share $0.24 $0.24 $0.70 $0.67
Book value at end of period $6.67 $5.94 $6.67 $5.94
Market price at end of period $8.25 $9.69 $8.25 $9.69
Market price of preferred stock at end
of period $24.00 $32.25 $24.00 $32.25
Weighted average shares outstanding
Basic 2,489,829 2,448,731 2,484,202 2,435,075
Diluted 2,901,198 2,957,899 2,916,018 2,953,762
=========================================================================================
AVERAGE BALANCE SHEET DATA
Total assets $294,150,115 $272,931,156 $286,946,682 $270,967,649
Earning assets 267,852,903 247,978,295 260,948,866 246,082,219
Loans and leases 188,899,108 164,582,595 179,316,245 159,434,500
Interest-bearing deposits 200,080,042 183,787,961 197,278,349 187,751,988
Total deposits 263,390,523 243,919,986 259,816,194 247,546,397
Common stockholders' equity 15,708,534 14,690,259 15,123,417 14,109,208
Total stockholders' equity 17,687,432 16,870,940 17,189,188 16,317,784
=========================================================================================
SELECTED RATIOS
Return on average assets
(annualized) 1.07% 1.04% 0.99% 0.98%
Return on average common equity
(annualized) <FN2> 19.27% 18.37% 17.87% 17.80%
Return on average total equity
(annualized) 17.84% 16.77% 16.55% 16.20%
Leverage capital ratio 6.31% 6.10% 6.31% 6.10%
Tier 1 risk-based capital ratio 8.97% 9.18% 8.97% 9.18%
Total risk-based capital ratio 10.02% 10.25% 10.02% 10.25%
Allowance for loan losses as a %
of total loans 1.13% 1.14% 1.13% 1.14%
==========================================================================================
PERIOD ENDING BALANCE SHEET DATA 9/30/00 9/30/99 Net Change % Change
Total assets $303,226,581 $275,777,727 $27,448,854 9.95%
Earning assets 275,127,836 250,673,950 $24,453,886 9.76%
Loans and leases, net 191,634,652 168,186,278 $23,448,374 13.94%
Interest-bearing deposits 208,887,685 180,445,483 $28,442,202 15.76%
Total deposits 274,543,111 240,213,936 $34,329,175 14.29%
Common stockholders' equity 16,773,407 14,662,603 $2,110,804 14.40%
Total stockholders' equity 18,634,742 16,839,091 $1,795,651 10.66%
==========================================================================================
<FN1> - A $107,250 charge resulting from the retirement of 11,000
shares of MidSouth Bancorp, Inc. Series A Preferred Stock
is included in the amount recorded as preferred dividends
for the three and nine month periods ended 9/30/00.
<FN2> - Return on average common equity is calculated before the
effect of the $107,250 charge related to the retirement of
11,000 shares of preferred stock for the three and nine
month periods ended 9/30/00.
</TABLE>
3
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<TABLE>
<CAPTION>
MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION
=================================================================================
September 30, December 31,
2000 1999 *
ASSETS (unaudited)
___________ ___________
<S> <C> <C>
Cash and due from banks $13,054,019 $13,587,690
Federal funds sold 5,700,000 900,000
___________ ___________
Total cash and cash equivalents 18,754,019 14,487,690
Interest bearing deposits in banks 103,022 356,124
Securities available-for-sale, at fair value
(cost of $52,964,558 in September 2000
and $57,106,793 in December 1999) 52,192,858 55,689,863
Securities held-to-maturity (estimated market
value of $23,557,063 in September 2000 and
$20,776,767 in December 1999) 23,316,587 21,287,597
Loans, net of allowance for loan losses of
$2,180,717 in September 2000 and $1,967,326
in December 1999 191,634,652 168,501,407
Bank premises and equipment, net 11,951,432 11,367,815
Other real estate owned, net 456,774 569,963
Accrued interest receivable 2,445,520 1,919,182
Goodwill, net 508,341 554,153
Other assets 1,863,376 1,990,047
___________ ___________
Total assets $303,226,581 $276,723,841
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing $65,655,426 $63,668,676
Interest bearing 208,887,685 188,021,530
___________ ___________
Total deposits 274,543,111 251,690,206
Securities sold under
repurchase agreements 1,290,455 606,601
FHLB advances 3,000,000 3,000,000
Accrued interest payable 784,621 715,171
Long-term notes payable 4,478,317 3,459,097
Other liabilities 495,335 327,605
___________ ___________
Total liabilities 284,591,839 259,798,680
___________ ___________
Commitments and contingencies - -
Stockholders' Equity:
Preferred Stock, no par value,
$14.25 stated value - 5,000,000
shares authorized, 130,620 and
152,736 issued and outstanding on
September 30, 2000 and
December 31, 1999, respectively 1,861,335 2,176,488
Common stock, $.10 par value- 5,000,000
shares authorized, 2,515,166 and
2,481,843 issued and outstanding on
September 30, 2000 and December 31, 1999,
respectively 251,517 248,184
Surplus 11,138,784 10,983,714
Unearned ESOP shares (193,498) (89,044)
Unrealized losses on securities available-
for-sale, net of deferred taxes
of ($247,750) in September 2000
and ($468,500) in December 1999 (523,950) (948,430)
Retained earnings 6,100,554 4,554,249
___________ ___________
Total stockholders' equity 18,634,742 16,925,161
___________ ___________
Total liabilities and stockholders' equity $303,226,581 $276,723,841
=========== ===========
* 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.
</TABLE>
4
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<TABLE>
<CAPTION>
MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
========================================================================================
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
_________________________ __________________________
<S> <C> <C> <C> <C>
INTEREST INCOME:
Loans, including fees $5,044,852 $4,246,928 $14,091,971 $12,030,667
Securities
Taxable 864,189 916,359 2,633,047 2,457,620
Nontaxable 310,482 283,383 904,580 821,172
Federal funds sold 18,795 10,633 86,081 382,932
_________ _________ __________ __________
TOTAL 6,238,318 5,457,303 17,715,679 15,692,391
_________ _________ __________ __________
INTEREST EXPENSE:
Deposits 2,310,882 1,797,777 6,421,514 5,535,132
Securities sold under repurchase
agreements, federal funds
purchased and advances 129,218 99,320 237,209 102,359
Long term debt 88,078 69,388 242,472 195,212
_________ _________ __________ __________
TOTAL 2,528,178 1,966,485 6,901,195 5,832,703
_________ _________ __________ __________
NET INTEREST INCOME 3,710,140 3,490,818 10,814,484 9,859,688
PROVISION FOR LOAN LOSSES 200,727 173,100 595,080 678,050
_________ _________ __________ __________
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 3,509,413 3,317,718 10,219,404 9,181,638
_________ _________ __________ __________
OTHER OPERATING INCOME:
Service charges on deposits 826,335 759,445 2,399,830 2,189,811
Gains on securities, net 14,356 - 16,126 -
Credit life insurance 61,294 66,271 187,023 107,611
Other charges and fees 242,713 222,742 736,783 639,371
_________ _________ __________ __________
TOTAL OTHER INCOME 1,144,698 1,048,458 3,339,762 2,936,793
_________ _________ __________ __________
OTHER EXPENSES:
Salaries and employee benefits 1,716,730 1,635,085 5,041,045 4,496,013
Occupancy expense 828,804 691,414 2,399,469 2,016,803
Other 1,036,896 1,063,526 3,241,618 2,955,320
_________ _________ __________ __________
TOTAL OTHER EXPENSES 3,582,430 3,390,025 10,682,132 9,468,136
_________ _________ __________ __________
INCOME BEFORE INCOME TAXES 1,071,681 976,151 2,877,034 2,650,295
PROVISION FOR INCOME TAXES 276,150 263,175 741,676 672,612
_________ _________ __________ __________
NET INCOME 795,531 712,976 2,135,358 1,977,683
PREFERRED DIVIDEND REQUIREMENT 139,905 32,648 213,369 98,934
_________ _________ __________ __________
INCOME AVAILABLE TO COMMON
SHAREHOLDERS $655,626 $680,328 $1,921,989 $1,878,749
========= ========= ========== ==========
BASIC EARNINGS PER COMMON SHARE $0.26 $0.28 $0.77 $0.77
========= ========= ========== ==========
DILUTED EARNINGS PER COMMON SHARE $0.24 $0.24 $0.70 $0.67
========= ========= ========== ==========
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 (UNAUDITED)
UNREALIZED
(GAINS)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 (375,684) (375,684)
Dividends on
preferred stock (106,119) (106,119)
Preferred stock
conversion (11,116) (158,403) 33,323 3,333 155,070
Retirement of
preferred stock (11,000) (156,750) (107,250) (264,000)
Net income 2,135,358 2,135,358
Increase in ESOP
obligation,
net of repayments (104,454) (104,454)
Net change in unrealized
gain/loss on securities
available-for-sale,
net of tax 424,480 424,480
________ __________ _________ ________ ___________ _________ _________ __________ ___________
BALANCE,
SEPTEMBER 30, 2000 130,620 $1,861,335 2,515,166 $251,517 $11,138,784 ($193,498) ($523,950) $6,100,554 $18,634,742
======== ========== ========= ======== =========== ========= ========= ========== ===========
See notes to consolidated financial statements.
</TABLE>
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<TABLE>
<CAPTION>
MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 and 1999
September 30, 2000 September 30, 1999
__________________ __________________
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $2,135,358 $1,977,683
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 1,021,680 878,710
Provision for loan losses 595,080 678,050
Provision for deferred income taxes 4,548 12,228
Discount accretion, net 64,031 39,887
Gains on sale of securities, net (16,126) -
Gain on sale of premises and equipment (3,720) (2,926)
Loss on sale of other real estate owned 1,639 -
Write-down of other real estate owned 93,000 -
Change in accrued interest receivable (526,338) (275,781)
Change in accrued interest payable 69,450 103,440
Change in other liabilities 167,730 258,972
Change in other assets (98,627) (119,595)
_____________ ____________
NET CASH PROVIDED BY OPERATING ACTIVITIES 3,507,705 3,550,668
_____________ ____________
CASH FLOWS FROM INVESTING ACTIVITIES:
Net decrease in interest-bearing deposits in banks 253,102 2,787
Proceeds from sales of securities available-for-sale 2,064,519
Proceeds from maturities and calls of securities
held-to-maturity - 25,000
Proceeds from maturities and calls of securities
available-for-sale 9,715,737 10,704,344
Purchases of securities available-for-sale (7,683,611) (27,037,460)
Purchases of securities held-to-maturity (2,031,305) (2,092,845)
Loan originations, net of repayments (23,945,440) (12,516,626)
Purchases of premises and equipment (1,566,015) (2,524,357)
Proceeds from sales of premises and equipment 10,250 25,000
Proceeds from sales of other real estate owned 131,211 58,724
Purchase of insurance premium financing company - (3,503,497)
_____________ ____________
NET CASH USED IN INVESTING ACTIVITIES (23,051,552) (36,858,930)
_____________ ____________
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits 22,852,905 10,289,634
Net (decrease) increase in securities sold under repurchase
agreements and federal funds purchased 683,854 2,302,514
Increase in other borrowings - 12,000,000
Issuance of notes payable 1,340,000 75,000
Repayments of notes payable (320,780) (223,071)
Proceeds from issuance of common stock - 279,480
Payment of dividends (481,803) (467,333)
Returned of preferred stock (264,000) 17,500
_____________ ____________
NET CASH PROVIDED BY FINANCING ACTIVITIES 23,810,176 24,273,724
NET DECREASE IN CASH & CASH EQUIVALENTS 4,266,329 (9,034,538)
CASH & CASH EQUIVALENTS AT BEGINNING OF PERIOD 14,487,690 20,603,536
_____________ ____________
CASH & CASH EQUIVALENTS AT END OF PERIOD $18,754,019 $11,568,998
============= ============
</TABLE>
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 September 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 nine month periods
ended September 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
losses is as follows:
Nine Months Ended
September 30,
2000 1999
__________ __________
Balance at beginning of period $1,967,327 $1,860,490
Provision for loan losses 595,080 678,050
Recoveries 99,788 109,387
Loans charged off (481,478) (700,542)
__________ __________
Balance at end of period $2,180,717 $1,947,385
========== ==========
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
nine months ended September 30, 2000 and 1999.
2000 1999
__________ __________
Net income $2,135,358 $1,977,683
Other comprehensive income
(losses), net of tax 424,480 (675,350)
__________ __________
Total comprehensive income $2,559,838 $1,302,333
========== ==========
8
<PAGE>
4. IMPACT OF NEW ACCOUNTING STANDARD
In June 1998, the Financial Accounting Standards Board issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging
Activities" which establishes accounting and reporting standards
for derivative instruments, including certain derivative instruments
embedded in other contracts and for hedging activites. Under this
Statement, a company that elects to apply hedge accounting is
required to establish at the inception of the hedge the method it
will use for assessing the effectiveness of the hedging derivative
and the measurement approach for determining the ineffective aspect
of the hedge. At the date of initial application, a company may
transfer any held-to-maturity security into the available-for-sale
category or the trading category. A company will then be able in
the future to designate a security transferred into the available-
for-sale category as the hedged item. The unrealized holding gain
or loss on a held-to-maturity security transferred to another category
at the date of the initial application will be reported in net income
or accumulated other comprehensive income consistent with the re-
quirements of SFAS 115. Such transfers from the held-to-maturity
category at the date of initial adoption will not call into question
a company's intent to hold other debt securities to maturity in the
future.
SFAS No. 133 applies to all entities and is effective for all fiscal
quarters of fiscal years beginning after June 15, 2000. Earlier
adoption of the Statement is permitted. MidSouth expects to adopt
this accounting standard on January 1, 2001 and does not expect the
adoption of SFAS 133 will have a material impact upon its financial
condition, results of operations or cash flows.
<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's third quarter 2000 net income increased 12%
over the third quarter of 1999. Net income totaled
$795,531 for the third quarter of 2000, compared to
$712,976 for the third quarter of 1999. Income available to
common shareholders for the third quarter of 2000 before a
reduction of $107,250 resulting from the repurchase of
11,000 shares of preferred stock, was $762,878 as
compared to $680,328 for the third quarter of 1999. The
$107,250 reduction reflected the excess over book value of
the purchase price of the preferred stock. Before the effect
of the $107,250 charge, basic and diluted earnings per
common share for the quarter ended September 30, 2000
were $.31 and $.27 per common share, respectively, and for
the nine months ended September 30, 2000, basic earnings
per common share were $.82 and diluted earnings per
common share were $.72. Net income for the nine months
ended September 30, 2000 was $2,135,358, compared to
$1,977,683 reported for the nine months ended September
30, 1999.
In both quarterly and year-to date comparisons, net interest
income increased due to a higher volume of earning assets.
Non-interest income increased 9% in quarterly comparison
and 14% in year-to-date comparison, primarily due to
service charges on deposit accounts and mortgage loan
processing fees. The increased net interest and non-interest
income was substantially offset by increases in non-interest
expense for the three and nine month periods ended
September 30, 2000 as compared to the same periods ended
September 30, 1999. Increases were recorded primarily in
salaries and benefits, occupancy, and data processing
expenses. These increases reflect the addition of three
banking offices to MidSouth's extensive branch network in
the past twelve months, and the addition of the NetBanking
product in the second quarter of 2000. NetBanking offers
MidSouth's customers online access to their accounts and
bill paying services 7 days a week, 24 hours a day.
MidSouth ended the third quarter of 2000 with total
consolidated assets of $303.2 million, a $27.4 million or
10% increase over assets of $275.8 million at the end of the
third quarter of 1999. Total deposits increased $34.3
million or 14%, and totaled $274.5 million at September
30, 2000 compared to $240.2 million at September 30,
1999.
Loans, net of Allowance for Loan Loss ("ALL"), increased
$23.4 million or 14%, from $168.2 million at September
30, 1999 to $191.6 million at September 30, 2000.
Provisions for loan losses increased $27,627 in quarterly
comparison, but year-to-date comparison reflected a
decrease of $82,970. Nonperforming loans as a percentage
of total loans decreased from .15% as of September 30,
1999 to .08% as of September 30, 2000. Total
nonperforming assets decreased $48,641, from $662,521 at
September 30, 1999 to $613,880 at September 30, 2000.
9
<PAGE>
The ALL represented 315.71% of nonperforming assets at
September 30, 1999, compared to 355.24% at September
30, 2000.
MidSouth's leverage ratio was 6.31% for the quarter ended
September 30, 2000, compared to 6.10% for the quarter
ended September 30, 1999. Return on average common
equity, before the effect of the $107,250 charge, was
19.27% for the third quarter of 2000 compared to 18.37%
for the third quarter of 1999.
Earnings Analysis
Net Interest Income
Average earning assets increased 8%, or $19.9 million,
from $248.0 million for the three months ended September
30, 1999 to $267.9 million for the three months ended
September 30, 2000. The mix of earning assets shifted
from 66% of average earning assets in loans for the third
quarter of 1999 up to 71% in the third quarter of 2000. The
average yield on loans increased 48 basis points, from
10.12% to 10.60% at September 30, 2000. Yields
increased due to changes in the prime lending rate over the
past twelve months. New York Prime increased 125 basis
points from 8.25% at September 30, 1999 to 9.50% at
September 30, 2000. Market competition for quality
credits held commercial loan yields to a 30 basis point
increase, while consumer loan yields increased 134 basis
points in quarterly comparison.
Average investment volume declined $4.8 million, from
$82.5 million at September 30, 1999 to $77.7 million at
September 30, 2000 as a greater portion of available funds
were used to fund increased loan demand. The average
taxable-equivalent yield on investments increased 40 basis
points from at 6.29% at September 30, 1999 to 6.69% at
September 30, 2000.
The increase in average loan volume as a percentage of
average earning assets combined with improved yields
increased the taxable-equivalent yield on quarterly average
earning assets 61 basis points, from 8.83% for the third
quarter of 1999 to 9.44% for the third quarter of 2000.
An average volume increase of $17.0 million in interest-
bearing liabilities resulted in increased interest expense for
the quarter ended September 30, 2000 compared to the
quarter ended September 30, 1999. In addition, the average
rate paid on interest-bearing liabilities increased 73 basis
points, from 4.01% at September 30, 1999 to 4.74% at
September 30, 2000. The percentage of average interest-
bearing deposits to average total deposits remained stable at
76% at September 30, 2000, up 1% from 75% at September 30, 1999.
The net effect of changes in rate, volume and mix of
average earning assets and interest-bearing liabilities
increased net interest income $219,322 in quarterly
comparison. The net taxable-equivalent yield on average
earning assets remained stable with a 2 basis points
increase, from 5.68% for the quarter ended September 30,
1999 to 5.70% for the quarter ended September 30, 2000.
10
<PAGE>
Review of the changes in the volume and yields of average
earning assets and interest-bearing liabilities between the
two nine month periods ended September 30, 2000 and
1999 reflected results similar to the quarterly comparison.
The net taxable-equivalent yield on average earning assets
for the nine months ended September 30, 2000 increased 23
basis points from 5.49% at September 30, 1999 to 5.72% at
September 30, 2000. The improvement in net yield on
earning assets resulted in increased net interest income of
$954,796 between the two nine month periods reviewed.
Non-interest Income
MidSouth's primary source of non-interest income, service
charges on deposit accounts, increased $66,890 for the
three months and $210,019 for the nine months ended
September 30, 2000 as compared to the same periods for
1999. The increases resulted primarily from additional
service charge income due to a higher volume of accounts
serviced.
Other non-interest income, excluding gains on sales of
securities and credit life insurance, increased $19,971 in
quarterly comparison and $97,412 in year-to-date comparison. A
mortgage origination program with a third party processor
contributed $17,384 to the increase for the quarter and
$31,750 for the nine months ended September 30, 2000.
VISA merchant and debit card income increased
significantly in 2000, however, expenses associated with
these programs also increased, offsetting the income.
Income from the sale of credit life insurance decreased
$4,977 for the quarter and increased $79,412 for the nine
months period ended September 30, 2000 as compared to
the same periods ended September 30, 1999.
Non-interest Expense
Non-interest expense increased $192,405 for the three
months and $1,213,996 for the nine months ended
September 30, 2000 compared to the three and nine months
ended September 30, 1999. Increases were recorded
primarily in the categories of salaries and employee
benefits, occupancy, and data processing expenses due
to the addition of three new offices over the past twelve
months. These increases reflect MidSouth's long term
investment in staff development, system upgrades and
market penetration.
Balance Sheet Analysis
MidSouth ended the third quarter of 2000 with consolidated
assets of $303,226,581, an increase of $26.5 million or
9.60% from the $276,723,841 reported for December 31,
1999. Deposits increased over the nine months ended
September 30, 2000 by $22.9 million to $274,543,111.
Most of the growth in deposits was in interest-bearing
deposits, primarily money market indexed accounts.
11
<PAGE>
MidSouth's loan portfolio grew $23.3 million in the nine
months ended September 30, 2000, with the majority of the
increase in commercial and real estate loans. Securities
available-for-sale decreased $3.5 million, from $55.7
million at December 31, 1999 to $52.2 million at
September 30, 2000. The decrease reflects sales of $2.1
million, purchases of $ 7.7 million and maturities and principal
paydowns of $9.7 million, partially offset by an improvement
in market valuation. 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 deferred
taxes, were $523,950 at September 30, 2000, compared to net
unrealized losses 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.
Capital
As of September 30, 2000, MidSouth's leverage ratio was
6.31% as compared to 6.23% at December 31, 1999. Tier 1
capital to risk-weighted assets was 8.97% and total capital
to risk-weighted assets was 10.02% at the end of the third
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%.
12
<PAGE>
Nonperforming Assets and Past Due Loans
Table 1 summarizes MidSouth's nonaccrual, past due and
restructured loans and nonperforming assets.
<TABLE>
<CAPTION>
TABLE 1
Nonperforming Assets and
Loans Past Due 90 Days
=======================================================================
September December September
30, 31, 30,
2000 1999 1999
========================================================================
<S> <C> <C> <C>
Nonperforming loans
Nonaccrual loans $ 157,106 $ 234,962 $ 247,777
Other real estate owned,
net 456,774 569,963 369,049
Other assets repossessed - 31,755 45,695
___________________________________________
Total nonperforming
assets $ 613,880 $ 836,680 $ 662,521
===========================================
Loans past due 90 days
Or more and still
accruing $ 606,671 $ 793,823 $ 605,510
Nonperforming loans as a
% of total loans .08% 0.14% 0.15%
Nonperforming assets as a
% of total loans,
other real Estate owned
and other assets
Repossessed 0.32% 0.49% 0.39%
ALL as a % of non-
performing loans and
other real estate
owned 355.24% 235.13% 315.71%
</TABLE>
13
<PAGE>
Nonperforming assets were $613,880 as of September 30,
2000, a decrease of $222,800 from the $836,680 reported
for December 31, 1999 and a decrease of $48,641 from the
$662,521 reported for September 30, 1999. Loans past due
90 days or more increased from $605,510 in September 1999
to $793,823 in December 1999 and then declined again
$606,671 as of September 30, 2000. Of the $606,671 in
loans past due 90 days or more, $115,388 were funded by
the Finance Company.
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
$2,180,717 in the reserve as of September 30, 2000 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.
14
<PAGE>
Item 6. Exhibits and Reports on Form 8-K Page 15
(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 16
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: November 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
