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, 2003
______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 1-11826
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 May 14, 2003
Common stock, $.10 par value 2,901,142
Transitional Small Business Disclosure Format:
Yes _______ No____X____
Page 1
Page 2
PART 1 - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (Unaudited) Page
Financial Highlights 3
Consolidated Statements of Condition -
March 31, 2003 and December 31, 2002 4
Consolidated Statements of Income -
Three Months Ended March 31, 2003 and
2002 and Year Ended December 31, 2002 5
Consolidated Statement of Stockholders'
Equity - Three Months Ended
March 31, 2003 6
Consolidated Statements of Cash Flows -
Three Months Ended March 31, 2003
and 2002 7
Notes to Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis or
Plan of Operation 9
PART II - OTHER INFORMATION
Item 4. Controls and Procedures 15
Item 6. Exhibits and Reports on Form 8-K 16
Signatures 18
Certifications 19
MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS (UNAUDITED)
Three Months Ended Year-ended
March 31, December 31,
EARNINGS DATA 2003 2002 2002
_______________________________________
Total interest income $5,852,912 $5,809,935 $24,125,789
Total interest expense 1,265,709 1,805,448 6,709,231
Net interest income 4,587,203 4,004,487 17,416,558
Provision for loan losses 200,000 358,000 1,398,250
Non-interest income 1,713,099 1,502,609 6,921,388
Non-interest expense 4,311,874 4,078,000 17,082,360
Provision for income tax 478,876 252,965 1,428,253
Net income 1,309,552 818,131 4,429,083
__________________________________________________________________________
PER COMMON SHARE DATA
Basic earnings per share $0.45 $0.28 $1.53
Diluted earnings per share $0.44 $0.28 $1.50
Book value at end of period $9.71 $7.94 $9.35
Market price at end of period $17.10 $11.90 $17.30
Weighted average shares outstanding
Basic 2,889,142 2,883,142 2,887,989
Diluted 2,979,205 2,939,555 2,953,706
__________________________________________________________________________
AVERAGE BALANCE SHEET DATA
Total assets $378,574,292 $355,743,048 $368,234,598
Earning assets 346,439,780 325,985,186 337,650,965
Loans and leases 231,263,468 213,187,233 223,703,672
Interest-bearing deposits 250,313,951 242,063,616 248,504,311
Total deposits 337,453,063 321,858,228 330,129,368
Total stockholders' equity 28,307,038 23,256,480 25,177,500
___________________________________________________________________________
SELECTED RATIOS
Return on average assets(annualized) 1.40% 0.93% 1.20%
Return on average total equity(annualized)18.76% 14.27% 17.59%
Leverage capital ratio 8.78% 8.29% 8.45%
Tier 1 risk-based capital ratio 12.62% 12.26% 12.57%
Total risk-based capital ratio 13.75% 13.39% 13.71%
Allowance for loan losses as a %
of total loans 1.25% 1.24% 1.27%
___________________________________________________________________________
PERIOD ENDING BALANCE SHEET DATA 3/31/03 3/31/02 Net Change
Total assets $390,955,447 $360,607,994 $30,347,453
Earning assets 357,955,561 331,472,869 $26,482,692
Loans and leases, net 233,673,994 214,558,603 $19,115,391
Interest-bearing deposits 258,437,566 242,446,422 $15,991,144
Total deposits 349,267,711 324,896,158 $24,371,553
Total stockholders' equity 28,169,793 23,040,539 $5,129,254
___________________________________________________________________________
Financial highlights for December 31, 2002 are taken from the
audited financials on that date.
MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION
March 31, December 31,
2003 2002*
ASSETS (unaudited)
___________ ___________
Cash and due from banks $18,372,145 $18,066,035
Federal funds sold 9,000,000 9,400,000
___________ ___________
Total cash and cash equivalents 27,372,145 27,466,035
Interest bearing deposits in banks 165,336 1,694
Securities available-for-sale, at fair
value (cost of $87,061,405 in
March 2003 and $87,755,456 in
December 2002) 88,764,236 89,575,706
Securities held-to-maturity
(estimated market value of $25,451,935
in March 2003 and $25,660,511 in
December 2002) 23,397,760 23,398,282
Loans, net of allowance for loan losses
of $2,954,235 in March 2003 and
$2,891,380 in December 2002 233,673,994 224,160,846
Bank premises and equipment, net 12,175,339 12,321,510
Other real estate owned, net 212,448 174,800
Accrued interest receivable 2,330,833 2,502,684
Goodwill 431,987 431,987
Other assets 2,431,369 2,653,449
____________ ____________
Total assets $390,955,447 $382,686,993
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing $90,830,145 $94,452,378
Interest bearing 258,437,566 249,022,468
____________ ____________
Total deposits 349,267,711 343,474,846
Securities sold under repurchase
agreements and federal funds purchased 4,379,895 2,978,860
Accrued interest payable 493,112 705,106
Notes payable 486,000 568,030
Junior subordinated debenture 7,000,000 7,000,000
Other liabilities 1,158,936 841,592
____________ ____________
Total liabilities 362,785,654 355,568,434
____________ ____________
Commitments and contingencies - -
Stockholders' Equity:
Common stock, $.10 par value- 5,000,000
shares authorized, 2,901,142 issued and
outstanding on March 31, 2003 and
December 31, 2002 290,114 290,114
Surplus 12,997,762 12,997,762
Unearned ESOP shares (98,382) (108,975)
Unrealized gains on securities
available-for-sale, net of deferred taxes
of $588,822 in March 2003 and $628,750 in
December 2002 1,114,008 1,191,500
Treasury stock - 2,800 shares, at cost (46,362) -
Retained earnings 13,912,653 12,748,158
____________ ____________
Total stockholders' equity 28,169,793 27,118,559
____________ ____________
Total liabilities and stockholders' equity $390,955,447 $382,686,993
============ ============
* The consolidated statement of condition at December 31, 2002
is taken from the audited balance sheet on that date.
See notes to unaudited consolidated financial statements.
INTEREST INCOME:
Loans, including fees $4,733,805 $4,580,130 $19,145,655
Securities
Taxable 640,595 755,595 3,090,212
Nontaxable 467,911 422,468 1,750,885
Federal funds sold 10,601 51,742 139,037
__________ __________ ___________
TOTAL 5,852,912 5,809,935 24,125,789
__________ __________ ___________
INTEREST EXPENSE:
Deposits 1,072,949 1,612,041 5,880,034
Securities sold under repurchase
agreements, federal funds
purchased and advances 13,370 3,260 62,270
Long term debt 179,390 190,147 766,927
__________ __________ ___________
TOTAL 1,265,709 1,805,448 6,709,231
__________ __________ ___________
NET INTEREST INCOME 4,587,203 4,004,487 17,416,558
PROVISION FOR LOAN LOSSES 200,000 358,000 1,398,250
__________ __________ ___________
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 4,387,203 3,646,487 16,018,308
__________ __________ ___________
OTHER OPERATING INCOME:
Service charges on deposits 1,207,553 1,075,313 4,707,468
(Losses)/gains on securities, net (5,303) - 156,259
Credit life insurance 51,462 53,825 270,737
Other charges and fees 459,387 373,471 1,786,924
__________ __________ ___________
TOTAL OTHER INCOME 1,713,099 1,502,609 6,921,388
__________ __________ ___________
OTHER EXPENSES:
Salaries and employee benefits 2,077,728 1,935,465 8,103,370
Occupancy expense 906,345 846,340 3,708,995
Other 1,327,801 1,296,195 5,269,995
__________ __________ ___________
TOTAL OTHER EXPENSES 4,311,874 4,078,000 17,082,360
__________ __________ ___________
INCOME BEFORE INCOME TAXES 1,788,428 1,071,096 5,857,336
PROVISION FOR INCOME TAXES 478,876 252,965 1,428,253
__________ __________ ___________
NET INCOME $1,309,552 $818,131 $4,429,083
========== ========== ===========
BASIC EARNINGS PER COMMON SHARE $0.45 $0.28 $1.53
========== ========== ===========
DILUTED EARNINGS PER COMMON SHARE $0.44 $0.28 $1.50
========== ========== ===========
* The consolidated statement of income at December 31, 2002 is taken from the
audited income statement of that date.
See notes to unaudited consolidated financial statements.
MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2003 (UNAUDITED)
_____________________________________________________________________________________________________
UNREALIZED
GAINS (LOSSES)
COMMON STOCK ESOP ON SECURITIES TREASURY RETAINED
SHARES AMOUNT SURPLUS OBLIGATION AFS, NET STOCK EARNINGS TOTAL
___________________ ___________ _________ ______________ ___________ _________ __________
BALANCE,
JANUARY 1, 2003
2,901,142 $290,114 $12,997,762 ($108,975) $1,191,500 $ $12,748,158 $27,118,559
Dividends on
common stock (145,057) (145,057)
Purchase of treasury stock (46,362) (46,362)
Net income 1,309,552 1,309,552
Increase in ESOP obligation,
net of repayments 10,593 10,593
Net change in unrealized
gain/loss on securities
available-for-sale, net of
income taxes (77,492) (77,492)
_________ ________ ___________ _______ __________ ________ ___________ ___________
BALANCE,
MARCH 31, 2003 2,901,142 $290,114 $12,997,762 ($98,382) $1,114,008 ($46,362) $13,912,653 $28,169,793
========= ======== =========== ======== ========== ======== ========== ===========
See notes to unaudited consolidated financial statements.
MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
March 31, 2003 March 31,2002
_________________ ________________
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,309,552 $818,131
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 371,335 305,329
Provision for loan losses 200,000 358,000
Provision for deferred taxes (80,566) (16,418)
Amortization of premiums on securities, net 230,838 112,602
Net loss on sale of securities 5,303 -
(Gain)/loss on sale of premises and equipment (12,834) 40,625
Loss on sale of other real estate owned - 25,571
Change in accrued interest receivable 171,851 8,616
Change in accrued interest payable (211,994) (247,040)
Other, net 643,498 257,236
_________________ _______________
NET CASH PROVIDED BY OPERATING ACTIVITIES 2,626,983 1,662,652
_________________ _______________
CASH FLOWS FROM INVESTING ACTIVITIES:
Net increase in interest-bearing deposits in banks (163,642) (171,246)
Proceeds from sales of securities available-for-sale 1,296,875 -
Proceeds from maturities and calls of securities availab 8,187,235 12,056,708
Purchases of securities available-for-sale (9,025,679) (15,941,876)
Loan originations, net of repayments (9,740,203) (3,292,806)
Purchases of premises and equipment (233,520) (615,625)
Proceeds from sales of premises and equipment 37,610 350
Proceeds from sales of other real estate owned - 225,013
_________________ _______________
NET CASH USED IN INVESTING ACTIVITIES (9,641,324) (7,739,482)
_________________ _______________
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits 5,792,865 (5,681,300)
Net increase in securities sold under repurchase
agreements and federal funds purchased 1,401,035 2,460,433
Repayments of notes payable (82,030) (332,000)
Purchase of treasury stock (46,362) -
Payment of dividends (145,057) (145,058)
_________________ _______________
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 6,920,451 (3,697,925)
_________________ _______________
NET DECREASE IN CASH & CASH EQUIVALENTS (93,890) (9,774,755)
CASH & CASH EQUIVALENTS AT BEGINNING OF PERIOD 27,466,035 35,847,278
_________________ _______________
CASH & CASH EQUIVALENTS AT END OF PERIOD $27,372,145 $26,072,523
================= ===============
See notes to unaudited consolidated financial statements.
MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED 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,
in accordance with accounting principles generally accepted
in the United States of America, the financial position of
MidSouth Bancorp, Inc. ("MidSouth") and its subsidiaries as of
March 31, 2003 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 2002 annual report and
Form 10KSB.
The results of operations for the three month period ended
March 31, 2003 are not necessarily indicative of the results
to be expected for the entire year.
2. ALLOWANCE FOR LOAN AND LOSSES
An analysis of the activity in the allowance for loan losses
is as follows:
Three Months Ended
March 31,
2003 2002
___________ ___________
Balance at beginning of period $2,891,380 $2,705,058
Provision for loan losses 200,000 358,000
Recoveries 41,085 33,745
Loans charged off (178,230) (391,508)
___________ ___________
Balance at end of period $2,954,235 $2,705,295
=========== ===========
3. COMPREHENSIVE INCOME
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 three months ended March 31, 2003 and 2002.
Three Months Ended
March 31,
2003 2002
__________ ________
Net income $1,309,552 $818,131
Other comprehensive income
Unrealized gains (losses) on securities
available-for-sale, net:
Unrealized holding (losses)
arising during the period (80,992) (269,812)
Less reclassification adjustment for
losses included in net in (3,500) -
__________ ________
Total other comprehensive loss (77,492) (269,812)
__________ ________
Total comprehensive income $1,232,060 $548,319
========== ========
Item 2.
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 2002 annual consolidated financial
statements, the notes thereto and the related Management's
Discussion and Analysis.
MidSouth Bancorp, Inc. announced net income of
$1,309,552 for the first quarter of 2003, a 60% increase
over net income of $818,131 reported for the first quarter
of 2002. Basic earnings per share were $.45 for the quarter
ending March 31, 2003 compared to $.28 for the quarter
ending March 31, 2002. Diluted earnings per share were
$.44 for the first quarter of 2003 and $.28 for the first
quarter of 2002.
Earnings improved in quarterly comparison primarily due
to an increase of $582,716 or 15% in net interest income,
attributed primarily to a decline in interest expense
combined with an increase in the volume of earning assets.
Non-interest income increased $210,490 or 14%, primarily
from services charges on deposit accounts, fee income from
third party mortgage loan originations, and income from
Visa debit card and ATM processing fees. In addition, the
provision for loan losses decreased $158,000, from
$358,000 in the first quarter of 2002 to $200,000 in the first
quarter of 2003. The increases in net interest and non-
interest income for the quarter combined with the decrease
in the provision for loan losses were partially offset by a
$233,874 or 6% increase in non-interest expenses,
primarily salaries and employee benefits, occupancy and
data processing expenses.
Total consolidated assets increased $30.3 million or 8%,
from $360.6 million at March 31, 2002 to $390.9 million at
March 31, 2003. Deposits grew $24.4 million or 8%, from
$324.9 million at March 31, 2003 to $349.3 million at
March 31, 2003.
Loans, net of the Allowance for Loan Losses ("ALL"),
increased $19.1 million or 9%, from $214.6 million in the
first quarter of 2002 to $233.7 million in the first quarter of
2003. Provisions for loan and lease losses decreased to
$200,000 in March 2003 compared to $358,000 in March
2002. Nonperforming loans as a percentage of total loans
decreased from .45% in March of 2002 to .30% in March of
2003. The ALL represented 320% of nonperforming assets
as of March 31, 2003 compared to 247% as of March 31,
2002. Loans past due ninety days and over also decreased
in quarterly comparison, from $760,518 at March 31, 2002
to $534,556 at March 31, 2003.
MidSouth's leverage ratio was 8.78% at March 31, 2003
compared to 8.29% at March 31, 2002. Return on average
equity for the first quarter of 2003 was 18.76% compared to
14.27% for the first quarter of 2002.
1
Earnings Analysis
Net Interest Income
Average earning assets increased 6%, or $20.5 million from
$326.0 million for the three months ended March 31, 2002
to $346.4 million for the three months ended March 31,
2003. The mix of average earning assets improved slightly,
as loans represented 67% of average earning assets in the
first quarter of 2003 compared to 65% in the first quarter of
2002. Average loans increased $18.1 million, from $213.2
million in the first quarter of 2002 to $231.3 million in the
first quarter of 2003. The average yield on loans decreased
41 basis points in quarterly comparison, from 8.71% to
8.30% at March 31, 2003. Loan yields declined primarily
due to a 50 basis point decrease in New York prime in
November of 2002, combined with rate adjustments on
other credits with scheduled repricing dates. The impact of
the decline in yield was offset by the $18.1 million average
volume increase in the loan portfolio, resulting in a
$153,675 increase in interest income on loans.
Average investments increased $11.4 million, from $99.9
million at March 31, 2002 to $111.4 million at March 31,
2003. The average taxable-equivalent yield on investments
decreased 77 basis points, from 5.53% in the first quarter of
2002 to 4.76% in the first quarter of 2003, primarily due to
the low rate environment and high prepayment speeds on
mortgage-backed securities. Additionally, federal funds
sold volume decreased $9.0 million and yields declined 45
basis points, from 1.58% to 1.13%. Decreased yields offset
the volume increase in investments and resulted in
decreased interest income on securities and federal funds
sold of $110,698 in quarterly comparison.
A 96 basis point decrease in the average rate paid on
interest-bearing deposits, partially offset by an average
volume increase of $8.2 million, contributed to a $539,092
decrease in interest expense for the quarter ended March
31, 2003 compared to the quarter ended March 31, 2002.
The average rate paid on interest-bearing deposits
decreased from 2.70% at March 31, 2002 to 1.74% at
March 31, 2003. The percentage of average noninterest-
bearing deposits to average total deposits increased slightly
from 25% to 26% in quarterly comparison. The impact of
these changes in the yields and volume of interest-bearing
liabilities significantly contributed to the $582,716
quarterly increase in net interest income. The net taxable-
equivalent yield on average earning assets increased 39
basis points, from 5.21% for the quarter ended March 31,
2002 to 5.60% for the quarter ended March 31, 2003.
Non-interest Income
MidSouth's primary source of non-interest income, service
charges on deposit accounts, increased $132,240 or 12% for
the three months ended March 31, 2003 as compared to the
same period in 2002. The increase resulted primarily from
an increase in insufficient funds ("NSF") fees due to an
2
increase in the number of checking accounts from 27,125 at
March 31, 2002 to 29,485 at March 31, 2003. In addition,
the average NSF income per deposit account increased 6%,
from $28.47 to $30.15 due to an increase in the volume of
NSF items processed. The NSF per item processing fee did
not increase and is on the lower end of fees charged by
competitors in MidSouth's markets.
Other non-interest income increased $85,916 in quarterly
comparison, primarily due to increased third-party
mortgage processing fees ($45,000) and VISA debit card
and ATM processing fees ($42,000). Third-party mortgage
processing fees increased primarily due to continued
refinancing activity. The improvement in electronic
processing fees resulted from the elimination of a third
party processor and establishing a direct connection to a
regional switch. Bringing the processing in-house enabled
MidSouth to reduce processing the cost per transaction and
to retain a larger share of the interchange revenue.
Non-interest Expense
Non-interest expense increased $233,874 or 6% for the
three months ended March 31, 2003 compared to the three
months ended March 31, 2002. Increases were recorded
primarily in the categories of salaries and employee
benefits and occupancy expenses.
Salaries increased $110,593 in quarterly comparison
primarily due to the addition of a senior level credit
administrator and an information services analyst. The
number of full-time equivalent ("FTE") employees
increased by 7 from 210 in March 2002 to 217 in March
2003. In addition, group health insurance and other
benefits costs increased $37,418 in quarterly comparison.
Occupancy expenses increased $60,005 primarily due
increases in depreciation of data processing hardware and
software ($40,000) and ad valorem taxes ($24,000).
Additional increases in land lease and fixed asset
depreciation expenses were offset by decreases in
maintenance costs associated with fixed assets and data
processing hardware and software.
Balance Sheet Analysis
MidSouth ended the first quarter of 2003 with consolidated
assets of $391.0 million, an increase of $8.3 million from
the $382.7 million reported for December 31, 2002.
Deposits increased $5.8 million, from $343.5 million at
December 31, 2002 to $349.3 million at March 31, 2003.
The increase in deposits resulted primarily from
fluctuations in commercial deposit account balances.
Net loans increased $9.5 million from $224.2 million at
December 31, 2002 to $233.7 at March 31, 2003. The
majority of the $9.5 million growth in net loans resulted
from commercial real estate participations. Securities
available-for-sale decreased $811,470 in the first quarter of
3
2003, as purchases of $9.0 million in securities available-
for-sale were offset by maturities and calls totaling $8.2
million and sales of $1.3 million. Continued refinancing
activity in mortgages resulted in increased paydowns on
mortgage-backed securities. Unrealized gains in the
securities available-for-sale portfolio, net of unrealized
losses and tax effect, were $1,114,008 at March 31, 2003,
compared to a net unrealized gain of $1,191,500 at
December 31, 2002. These amounts result from interest
rate fluctuations and do not represent permanent
adjustments of value. Moreover, classification of securities
as available-for-sale does not necessarily indicate that the
securities will be sold prior to maturity.
Capital
MidSouth's leverage ratio was 8.78% at March 31, 2003
compared to 8.45% at December 31, 2002. Tier 1 capital to
risk-weighted assets was 12.62% and total capital to risk-
weighted assets was 13.75% at the end of the first quarter
of 2003. At year-end 2002, Tier 1 capital to risk-weighted
assets was 12.57% and total capital to risk-weighted assets
was 13.71%. During the first quarter of 2003, MidSouth
repurchased 2,800 shares of its common stock at a total cost
of $46,362.
4
Nonperforming Assets and Past Due Loans
Table 1 summarizes MidSouth's nonaccrual, past due and
restructured loans and
nonperforming assets.
TABLE 1
Nonperforming Assets and
Loans Past Due 90 Days
____________________________________________________________________
March December March
31, 31, 31,
2003 2002 2002
____________________________________________________________________
Nonperforming loans $710,527 $710,546 $984,680
Other real estate owned, net 212,448 174,800 108,752
Other assets repossessed - 45,062 -
_________________________________
Total nonperforming assets $922,975 $930,408 $1,093,432
_________________________________
Loans past due 90 days
or more and still accruing $543,556 $818,727 $760,518
Nonperforming loans as a
% of total loans 0.30% 0.31% 0.45%
Nonperforming assets as a
% of total loans, other real
estate owned and other assets
repossessed 0.39% 0.41% 0.50%
Allowance for loan losses as a
% of nonperforming assets 320.08% 310.76% 247.41%
_________________________________
5
Nonperforming assets were $922,975 as of March 31, 2003,
a decrease of $7,433 from the $930,408 reported for
December 31, 2002 and a decrease of $170,457 from the
$1,093,432 reported for March 31, 2002. Loans past due
90 days or more increased slightly from $760,518 in March
2002 to $818,727 in December 2002 and decreased to
$543,556 as of March 31, 2003. Of the $543,556 in loans
past due 90 days or more at March 31, 2003, $154,351
were past due loans reported by the Finance Company.
Specific reserves have been established in the ALL to cover
probable losses on nonperforming assets. The ALL is
analyzed quarterly and additional reserves, if needed, are
allocated at that time. Management believes the
$2,954,235 in the allowance as of March 31, 2003 is
sufficient to cover probable 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.
6
Page 15
Item 4. Controls and Procedures
MidSouth's Chief Executive Officer and Chief Financial Officer
have evaluated the effectiveness of the disclosure controls and
procedures (as such term is defined in Rules 13a-14(c) and 15d-
14(c) under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date").
Based on such evaluation, such officers have concluded that, as
of the Evaluation Date, MidSouth's disclosure controls and
procedures are effective in alerting them on a timely basis to
material information relating to MidSouth (including its
consolidated subsidiaries) required to be included in MidSouth's
periodic filings under the Exchange Act.
Since the Evaluation Date, there have not been any significant
changes in MidSouth's internal controls or in other factors that
could significantly affect such controls.
Item 6. Exhibits and Reports on Form 8-K Page 16
(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.
4.1 MidSouth agrees to furnish to the Commission
on request a copy of the instruments defining
the rights of the holder of its long-term
debt, which debt does not exceed 10% of the
total consolidated assets of MidSouth.
10.1 MidSouth National Bank Lease Agreement with
Southwest Bank Building Limited Partnership
is included as Exhibit 10.7 to the MidSouth'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
MidSouth's annual report on Form 10-KSB for
the year ended December 31, 1994, and is
incorporated herein by reference.
10.2.1 Seventh Amendment to Lease between S & A
Properties II, Inc., successor in interest
to Southwest Bank Building Limited Partnership
in Commendam, and MidSouth Bank, N.A. effective
July 1, 2002 is included as Exhibit 10.2.1
to MidSouth's Annual Report on Form 10-KSB
for the year ended December 31, 2002 and is
incorporated herein by reference.
Page 17
10.3 Amended and Restated Deferred Compensation
Plan and Trust is included as Exhibit 10.3
to the MidSouth's annual report on Form 10-K
for the year ended December 31, 1992 and is
incorporated herein by reference.
10.3.1 Amended and Restated Deferred Compensation
Plan and Trust effective October 9, 2002 is
included as Exhibit 10.3.1 to MidSouth's
Annual Report on Form 10-KSB for the year
ended December 31, 2002 and is incorporated
herein by reference.
10.5 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.
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.
11 Computation of earnings per share
99.1 Certification pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
99.2 Certification pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
(b) Reports Filed on Form 8-K
(none)
Page 18
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 14, 2003
____________
_______________________________
C. R. Cloutier, President & CEO
_______________________________
Karen L. Hail, Sr. Executive
Vice President & CFO
_______________________________
Teri S. Stelly, Senior
Vice President & Controller
CERTIFICATION
I, Karen L. Hail, Senior Executive Vice President & CFO, certify that:
1. I have reviewed this quarterly report on Form 10-QSB
of MidSouth Bancorp, Inc.;
2. Based on my knowledge, this quarterly report does
not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this
quarterly report;
3. Based on my knowledge, the financial statements,
and other financial information included in this quarterly report,
fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of, and
for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and
15d-14) for the registrant and have:
a) designed such disclosure controls and
procedures to ensure that material
information relating to the registrant,
including its consolidated subsidiaries, is
made known to us by others within those
entities, particularly during the period in
which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a
date within 90 days prior to the filing date of
his quarterly report (the "Evaluation Date");
and
c) presented in this quarterly report our
conclusions about the effectiveness of the
disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the registrant's
auditors and the audit committee of registrant's board of directors
(or persons performing the equivalent functions):
a) all significant deficiencies in the design or
operation of internal controls which could
adversely affect the registrant's ability to
record, process, summarize and report
financial data and have identified for the
registrant's auditors any material weaknesses
in internal controls; and
b) any fraud, whether or not material, that
involves management or other employees
who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have
indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.
Date: May 14, 2003
/s/Karen L. Hail
_______________________
Chief Financial Officer
CERTIFICATION
I, C. R. Cloutier, President and CEO, certify that:
1. I have reviewed this quarterly report on Form 10-
QSB of MidSouth Bancorp, Inc.;
2. Based on my knowledge, this quarterly report does
not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this
quarterly report;
3. Based on my knowledge, the financial statements,
and other financial information included in this quarterly report,
fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of, and
for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and
15d-14) for the registrant and have:
a) designed such disclosure controls and
procedures to ensure that material
information relating to the registrant,
including its consolidated subsidiaries, is
made known to us by others within those
entities, particularly during the period in
which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a
date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date");
and
c) presented in this quarterly report our
conclusions about the effectiveness of the
disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the registrant's
auditors and the audit committee of registrant's board of directors
(or persons performing the equivalent functions):
a) all significant deficiencies in the design or
operation of internal controls which could
adversely affect the registrant's ability to
record, process, summarize and report
financial data and have identified for the
registrant's auditors any material weaknesses
in internal controls; and
b) any fraud, whether or not material, that
involves management or other employees
who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have
indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.
Date: May 14, 2003
/s/ C. R. Cloutier
_______________________
Chief Executive Officer