MIDSOUTH BANCORP INC - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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EX-99.2 - EXHIBIT 99.2 - MIDSOUTH BANCORP INC	a4q17earningsreleaseener.htm
8-K - MIDSOUTH BANCORP FORM 8-K - MIDSOUTH BANCORP INC	form8-kxxjanuary302018.htm



Investor Contacts: Jim McLemore, CFA President & CEO 337.237.8343 Lorraine Miller, CFA EVP & CFO 337.593.3143

MidSouth Bancorp, Inc. Reports Fourth Quarter

and Full Year 2017 Results

Quarterly Highlights


•	Net loss of $11.3 million for the fourth quarter which includes approximately $5.2 million of one-time, non-operating charges, plus a charge of approximately $3.6 million for the write-down of net deferred assets due to recent tax reform legislation


•	Pre-tax, pre-provision operating income of $7.6 million declined 5% versus 3Q17


•	The classified assets to capital ratio for MidSouth Bank declined to 56%, down from 67%


•	Core deposits are 88% of $1.3 billion total deposits and funding costs are low at 34 bps. Cost of deposits increased only 1 basis point sequentially


•	Tangible common equity to tangible assets declined 38 bps to 9.12% sequentially


•	Announced 6 branches closing in 1Q18, resulting in additional operating efficiencies

LAFAYETTE, LA., January 30, 2018/BusinessWire/ -- MidSouth Bancorp, Inc. (“MidSouth”) (NYSE:MSL) today reported a quarterly net loss available to common shareholders of $11.3 million for the fourth quarter of 2017, compared to net earnings available to common shareholders of $1.4 million reported for the fourth quarter of 2016 and $856,000 in net earnings available to common shareholders for the third quarter of 2017. The fourth quarter of 2017 included an after tax charge of $3.9 million resulting from the transfer of loans to held for sale, a $3.6 million charge for the write-down of net deferred tax assets as a result of the Tax Cuts and Jobs Act, an after-tax charge of $1.2 million for regulatory remediation costs, an after-tax charge of $512,000 resulting from the write-down of assets held for sale, an after-tax gain on sale of branches of $484,000 and an after-tax charge of $111,000 for severance and retention accruals. The third quarter of 2017 included a non-recurring after-tax expense of $587,000 related to the branch closures during the quarter, an after-tax charge of $556,000 for regulatory remediation costs and an after-tax gain on sales of securities of $220,000. Excluding these non-operating income and expenses, a loss of $0.15 per diluted share was reported for the fourth quarter of 2017, compared to diluted earnings per common share of $0.10 for the third quarter of 2017 and $0.12 for the fourth quarter of 2016.

Jim McLemore, President and CEO, remarked, "We took decisive action to accelerate the turnaround of MidSouth this quarter to reduce our risk profile and build a foundation for long term growth with the completion of a comprehensive three-year Strategic Plan, our continued focus to reduce problem credits through our investments in talent and changes to our strategies relative to problem asset resolution, the announcement of additional branch closures to enhance

our operational efficiencies and our expansion of resources and scope of regulatory and other remediation efforts. This turnaround is supported by our strong capital base, enhanced liquidity, a very high level of core deposits and long-term commitment to reduce our risk profile and improve the efficiency and effective execution of our Strategic Plan through enhanced corporate governance, strengthening management talent, investing in technology to reduce operating costs and significantly reducing problem assets. To accomplish these goals, we expect to invest $10-$12 million in 2018, with a significant drop-off of these costs in 2019 and 2020.”

"We are especially pleased to welcome Mike Kramer as an advisor to our Board of Directors, pending final regulatory approval for his joining as a full director. Mike brings meaningful turnaround and corporate governance experience which will be invaluable to us."

Balance Sheet

Consolidated assets remained constant at $1.9 billion for the quarters ended December 31, 2017 and 2016 and September 30, 2017. Our stable core deposit base, which excludes time deposits, totaled $1.3 billion at December 31, 2017 and $1.4 billion at September 30, 2017 and accounted for 87.7% and 87.5% of deposits at December 31, 2017 and September 30, 2017, respectively. Net loans totaled $1.2 billion at December 31, 2017, compared to $1.2 billion at September 30, 2017 and $1.3 billion at December 31, 2016. In an effort to further reduce classified assets, loans totaling $15.7 million were transferred to held for sale during the fourth quarter of 2017, and the sale of these loans is expected to close during the first quarter of 2018. A loss on transfer of loans to held for sale of $6.0 million was recorded during the fourth quarter of 2017 to write the loans down to fair value.

MidSouth’s Tier 1 leverage capital ratio was 12.53% at December 31, 2017, compared to 12.84% at September 30, 2017. Tier 1 risk-based capital and total risk-based capital ratios were 16.51% and 17.77% at December 31, 2017, compared to 17.01% and 18.27% at September 30, 2017, respectively. Tier 1 common equity to total risk-weighted assets at December 31, 2017 was 12.10%, compared to 12.68% at September 30, 2017. Tangible common equity totaled $167.3 million at December 31, 2017, compared to $180.7 million at September 30, 2017. Tangible book value per share at December 31, 2017 was $10.11 versus $10.92 at September 30, 2017.

Asset Quality

Nonperforming assets totaled $57.3 million at December 31, 2017, an increase of $3.4 million compared to $53.9 million reported at September 30, 2017. The increase is primarily attributable to the $20.7 million of loans placed on non-accrual during the quarter and $2.8 million of loans transferred to held for sale that were identified as nonperforming during the fourth quarter of 2017. These decreases were partially offset by the payoffs/paydowns of $12.4 million of non-accrual loans and the charge-off of $7.4 million of non-accrual loans. Allowance coverage for nonperforming loans increased to 53.77% at December 31, 2017, compared to 48.47% at September 30, 2017. The ALLL/total loans ratio was 2.27% at December 31, 2017 and 2.03% at September 30, 2017. Including valuation accounting adjustments on acquired loans, the total valuation accounting adjustment plus ALLL was 2.36% of loans at December 31, 2017. The

ratio of annualized net charge-offs to total loans increased to 2.94% for the three months ended December 31, 2017 compared to 1.26% for the three months ended September 30, 2017.

Total nonperforming assets to total loans plus ORE and other assets repossessed was 4.83% at December 31, 2017 compared to 4.35% at September 30, 2017. Loans classified as troubled debt restructurings, accruing (“TDRs, accruing”) totaled $1.4 million at December 31, 2017 compared to $1.6 million at September 30, 2017. Also included in nonperforming assets at December 31, 2017 was $5.1 million of nonperforming loans transferred to held for sale. Total classified assets, including ORE, were $118.2 million at December 31, 2017 compared to $139.7 million at September 30, 2017. Payoffs/paydowns of $25.8 million and charge-offs of $8.1 million of loans rated as classified at September 30, 2017 as well as a $5.2 million charge to write down classified loans to fair value when they were transferred to held for sale contributed to the decrease in classified assets. These decreases were partially offset by downgrades to classified loans of $16.2 million during the quarter. The classified to capital ratio at MidSouth Bank was 56.1% at December 31, 2017 versus 66.8% at September 30, 2017.

More information on our energy loan portfolio and other information on quarterly results can be found on our website at MidSouthBank.com under Investor Relations/Presentations.

Mr. McLemore noted “Reducing our criticized asset levels continues to remain a top priority. We made great progress this quarter by reducing our classified asset ratio to 56%, which is down from a high of 79% earlier this year and reducing our energy exposure by $18.1 million. Our capital strength with a Tangible Common Equity ratio above 9% allows greater flexibility to manage problem assets from a position of strength, but we also remain committed to being as judicious as possible from a capital preservation standpoint."

Fourth Quarter 2017 vs. Third Quarter 2017 Earnings Comparison

MidSouth reported a net loss available to common shareholders of $11.3 million for the three months ended December 31, 2017, compared to net earnings available to common shareholders of $856,000 for the three months ended September 30, 2017. The fourth quarter of 2017 included a $744,000 gain on the sale of branches, and the third quarter of 2017 included $338,000 in gain on sales of securities. Excluding these non-operating revenues, revenues from consolidated operations increased $795,000 in sequential-quarter comparison. Net interest income increased $659,000 and noninterest income increased $136,000 in sequential-quarter comparison.

The fourth quarter of 2017 included non-operating expenses totaling $8.8 million which consisted of $171,000 of severance and retention accruals, a $789,000 write-down on assets held for sale, $1.8 million of remediation costs and a $6.0 million loss on the transfer of loans to held for sale. The third quarter of 2017 included a non-recurring charge of $903,000 related to branch closures and $856,000 of remediation costs. Excluding these non-operating expenses, noninterest expense increased $1.2 million in sequential-quarter comparison and consisted primarily of a $901,000 increase in legal and professional fees and a $316,000 increase in expenses on ORE. The increase in legal and professional fees is primarily due to increased outsourcing expenses to enhance risk management as well as increased legal fees to resolve credit quality issues. The provision for loan losses increased $6.3 million in sequential-quarter comparison. In connection

with the Tax Cuts and Jobs Act, a $3.6 million tax-related charge was recorded during the fourth quarter of 2017 associated with the revaluation of our net deferred tax assets. Excluding this adjustment, we recorded an income tax benefit of $4.1 million for the fourth quarter of 2017, compared to income tax expense of $574,000 for the third quarter of 2017.

Dividends on the Series B Preferred Stock issued to the U.S. Treasury as a result of our participation in the Small Business Lending Fund totaled $720,000 for the fourth quarter of 2017 based on a dividend rate of 9%, unchanged from $720,000 for the third quarter of 2017. Dividends on the Series C Preferred Stock issued with the December 28, 2012 acquisition of PSB Financial Corporation totaled $90,000 for the three months ended December 31, 2017 and September 30, 2017.

Fully taxable-equivalent (“FTE”) net interest income increased $655,000 in sequential-quarter comparison, primarily due to an increase in interest income on loans of $697,000 and a decrease of $83,000 in interest expense on securities sold under agreements to repurchase. These changes were partially offset by a $128,000 decrease in FTE interest income on investment securities. Interest income on loans increased in sequential-quarter comparison due to an increase in the average yield on loans of 29 basis points, from 5.48% to 5.77%. Excluding purchase accounting adjustments, the loan yield increased 28 basis points, from 5.39% to 5.67% during the same period. The average yield on investment securities increased 4 basis points, from 2.65% to 2.69%, and the average balance of investment securities decreased $25.5 million. The average yield on total earning assets increased 24 basis points for the same period, from 4.55% to 4.79%, respectively. The FTE net interest margin increased 25 basis points in sequential-quarter comparison, from 4.20% for the third quarter of 2017 to 4.45% for the fourth quarter of 2017. Excluding purchase accounting adjustments, the FTE net interest margin increased 24 basis points, from 4.12% for the third quarter of 2017 to 4.36% for the fourth quarter of 2017.

Fourth Quarter 2017 vs. Fourth Quarter 2016 Earnings Comparison

MidSouth reported a net loss available to common shareholders of $11.3 million for the three months ended December 31, 2017, compared to net earnings available to common shareholders of $1.4 million for the three months ended December 31, 2016. The fourth quarter of 2017 included a $744,000 gain on the sale of branches. Excluding this non-operating revenue, revenues from consolidated operations increased $1.5 million in quarterly comparison, from $23.3 million for the three months ended December 31, 2016 to $24.8 million for the three months ended December 31, 2017. Net interest income increased $1.2 million in quarterly comparison, resulting from a $1.3 million increase in interest income, which was partially offset by a $24,000 increase in interest expense. Operating noninterest income increased $213,000 in quarterly comparison.

Excluding non-operating expenses of $8.8 million for the fourth quarter of 2017, noninterest expenses decreased $454,000 in quarterly comparison and consisted primarily of a $997,000 decrease in salaries and employee benefits costs and a $374,000 decrease in occupancy expense, which were partially offset by a $929,000 increase in legal and professional fees. The provision for loan losses increased $8.0 million in quarterly comparison, from $2.6 million for the three months ended December 31, 2016 to $10.6 million for the three months ended December 31, 2017. Excluding the $3.6 million charge recorded in connection with the Tax Act during the

fourth quarter of 2016, we recorded an income tax benefit of $4.1 million for the fourth quarter of 2017, compared to income tax expense of $871,000 for the fourth quarter of 2016.

Dividends on preferred stock totaled $810,000 for the three months ended December 31, 2017 and $812,000 for the three months ended December 31, 2016. Dividends on the Series B Preferred Stock were $720,000 for the fourth quarter of 2017, unchanged from $720,000 for the fourth quarter of 2016. Dividends on the Series C Preferred Stock totaled $90,000 for the three months ended December 31, 2017 and $92,000 for the three months ended December 31, 2016.

FTE net interest income increased $1.2 million in prior year quarterly comparison. Interest income on loans increased $967,000 due to an increase in the average yield on loans of 46 basis points. The average balance of loans decreased $38.7 million in prior year quarterly comparison. Purchase accounting adjustments added 10 basis points to the average yield on loans for the fourth quarter of 2017 and 12 basis points to the average yield on loans for the fourth quarter of 2016. Excluding the impact of the purchase accounting adjustments, average loan yields increased 48 basis points in prior year quarterly comparison, from 5.19% to 5.67%.

Investment securities totaled $390.2 million, or 20.7% of total assets at December 31, 2017, versus $440.1 million, or 22.6% of total assets at December 31, 2016. The investment portfolio had an effective duration of 3.2 years and a net unrealized loss of $3.5 million at December 31, 2017. FTE interest income on investments increased $31,000 in prior year quarterly comparison. The average volume of investment securities decreased $13.0 million in prior year quarterly comparison, and the average tax equivalent yield on investment securities increased 12 basis points, from 2.57% to 2.69%.

The average yield on all earning assets increased 38 basis points in prior year quarterly comparison, from 4.41% for the fourth quarter of 2016 to 4.79% for the fourth quarter of 2017. Excluding the impact of purchase accounting adjustments, the average yield on total earning assets increased 39 basis points, from 4.33% to 4.72% for the three-month periods ended December 31, 2016 and 2017, respectively.

Interest expense increased $24,000 in prior year quarterly comparison. Increases in interest expense included a $168,000 increase in interest expense on deposits and a $30,000 increase in interest expense on FHLB advances, which were partially offset by a $175,000 decrease in interest expense on repurchase agreements. Excluding purchase accounting adjustments on acquired certificates of deposit and FHLB borrowings, the average rate paid on interest-bearing liabilities was 0.52% for the three months ended December 31, 2017 and 0.47% for the three months ended December 31, 2016.

As a result of these changes in volume and yield on earning assets and interest-bearing liabilities, the FTE net interest margin increased 36 basis points, from 4.09% for the fourth quarter of 2016 to 4.45% for the fourth quarter of 2017. Excluding purchase accounting adjustments on loans, deposits and FHLB borrowings, the FTE margin increased 38 basis points, from 3.98% for the fourth quarter of 2016 to 4.36% for the fourth quarter of 2017.

2017 vs 2016 Earnings Comparison

MidSouth reported a net loss available to common shareholders of $16.4 million for the year ended December 31, 2017, compared to net earnings available to common shareholders of $6.6 million for the year ended December 31, 2016. 2017 net earnings included $347,000 of gain on sales of securities and $744,000 of gain on sale of branches. 2016 net earnings included $20,000 of gain on sales of securities. Excluding these non-operating revenues, revenues from consolidated operations increased $3.0 million in year-over-year comparison, from $92.4 million for the year ended December 31, 2016 to $95.3 million for the year ended December 31, 2017. Net interest income increased $2.3 million in year-over-year comparison, resulting from a $2.6 million increase in interest income, which was partially offset by a $336,000 increase in interest expense. Operating noninterest income increased $604,000 in year-over-year comparison and consisted primarily of a $333,000 increase in ATM/debit card income and a $178,000 increase in check cashing income.

Excluding non-operating expenses of $12.9 million for the year ended December 31, 2017, noninterest expenses decreased $910,000 in year-over-year comparison and consisted primarily of decreases of $555,000 in salaries and employee benefits costs, $779,000 in occupancy expense, $326,000 in marketing costs, $556,000 in corporate development, $518,000 in ATM/debit card expense and $251,000 in printing and supplies, which were partially offset by increases of $1.5 million in legal and professional fees and $677,000 in data processing costs. A reclass of certain hosted services subscriptions from corporate development into data processing at the beginning of 2017 caused the fluctuations in those two expense categories. The provision for loan losses increased $19.6 million in year-over-year comparison, from $10.6 million for the year ended December 31, 2016 to $30.2 million for the year ended December 31, 2017, primarily due to the high level of charge-offs and additional impairment charges on nonperforming loans in 2017. Excluding the $3.6 million charge recorded in connection with the Tax Act during the fourth quarter of 2016, a $6.2 million income tax benefit was reported for the year ended December 31, 2017, compared to income tax expense of $3.9 million for the year ended December 31, 2016.

In year-to-date comparison, FTE net interest income increased $2.1 million primarily due to a $1.1 million increase in interest income on loans and an $860,000 increase in FTE interest income from investment securities. The average volume of investment securities increased $13.0 million in year-over-year comparison, and the average yield on investment securities increased 12 basis points for the same period. The average volume of loans decreased $8.2 million in year-over-year comparison, and the average yield on loans increased 12 basis points, from 5.35% to 5.47%. The average yield on earning assets increased 13 basis points in year-over-year comparison, from 4.46% at December 31, 2016 to 4.59% at December 31, 2017. The purchase accounting adjustments added 9 basis points to the average yield on loans for the year ended December 31, 2017 and 13 basis points for the year ended December 31, 2016. Net of purchase accounting adjustments, the average yield on earning assets increased 16 basis points, from 4.37% at December 31, 2016 to 4.53% at December 31, 2017.

Interest expense increased $336,000 in year-over-year comparison. Increases in interest expense included a $445,000 increase in interest expense on deposits and a $126,000 increase in interest expense on junior subordinated debentures. These increases were partially offset by an $258,000 decrease in interest expense on repurchase agreements. The average rate paid on interest-bearing liabilities was 0.48% for the year ended December 31, 2017, compared to 0.43% for the year

ended December 31, 2016. Net of purchase accounting adjustments, the average rate paid on interest-bearing liabilities increased 5 basis points, from 0.46% for the year ended December 31, 2016 to 0.51% for the year ended December 31, 2017. The FTE net interest margin increased 11 basis points, from 4.14% for the year ended December 31, 2016 to 4.25% for the year ended December 31, 2017. Net of purchase accounting adjustments, the FTE net interest margin increased 14 basis points, from 4.03% to 4.17% for the years ended December 31, 2016 and 2017, respectively.

"In closing, 2017 represented a challenging but strategically important year for MidSouth" McLemore stated. "The Bank's capital position is strong; we have increased our overall liquidity position and continue to benefit from a strong deposit franchise with 88% of our deposits as core; asset quality and risk management continues to improve; our management team has been further enhanced; and we have strengthened MidSouth's leadership at the board level as well as instituting various initiatives that have resulted in more effective corporate governance. Our future growth prospects are solid with our dominant presence in Lafayette, complimented by a presence in markets such as Baton Rouge, Lake Charles, Dallas and Houston/Beaumont and with the eventual recovery of the other South Louisiana markets. We are looking forward to further improvements in 2018 and beyond. Our goal is to attain peer average levels of profitability at a lower level of risk for 2020.”

About MidSouth Bancorp, Inc.

MidSouth Bancorp, Inc. is a bank holding company headquartered in Lafayette, Louisiana, with assets of $1.9 billion as of December 31, 2017. MidSouth Bancorp, Inc. trades on the NYSE under the symbol “MSL.” Through its wholly owned subsidiary, MidSouth Bank, N.A., MidSouth offers a full range of banking services to commercial and retail customers in Louisiana and Texas. MidSouth Bank currently has 48 locations in Louisiana and Texas and is connected to a worldwide ATM network that provides customers with access to more than 55,000 surcharge-free ATMs. Additional corporate information is available at MidSouthBank.com.

Forward-Looking Statements

Certain statements contained herein are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties. These statements include, among others, statements regarding the strength of the Company's balance sheet and its positioning to address problem assets and achieve operating efficiencies and the implementation of the provisions of the formal agreement with the OCC.

Actual results may differ materially from the results anticipated in these forward-looking statements. Factors that might cause such a difference include, among other matters, changes in interest rates and market prices that could affect the net interest margin, asset valuation, and expense levels; changes in local economic and business conditions in the markets we serve, including, without limitation, changes related to the oil and gas industries that could adversely affect customers and their ability to repay borrowings under agreed upon terms, adversely affect the value of the underlying collateral related to their borrowings, and reduce demand for loans; increases in competitive pressure in the banking and financial services industries; increased competition for deposits and loans which could affect compositions, rates and terms; changes in the levels of prepayments received on loans and investment securities that adversely affect the yield and value of the earning assets; our ability to successfully implement and manage our recently announced strategic initiatives; costs and expenses associated with our strategic initiatives and possible changes in the size and components of the expected costs and charges associated with our strategic initiatives; our ability to realize the anticipated benefits and cost savings from our strategic initiatives within the anticipated time frame, if at all; the ability of our strategic initiatives to adequately address the anticipated concerns of the Office of the Comptroller of the Currency (the “OCC”) in its current examination of us and the ability of the Company to comply with the terms of the formal agreement with the OCC; credit losses due to loan concentration, particularly our energy lending and legacy commercial real estate portfolios;

a deviation in actual experience from the underlying assumptions used to determine and establish our allowance for loan losses (“ALLL”), which could result in greater than expected loan losses; the adequacy of the level of our ALLL and the amount of loan loss provisions required in future periods including the impact of implementation of the new CECL (current expected credit loss) methodology; future examinations by our regulatory authorities, including the possibility that the regulatory authorities may, among other things, impose conditions on our operations or require us to increase our allowance for loan losses or write-down assets; changes in the availability of funds resulting from reduced liquidity or increased costs; the timing and impact of future acquisitions or divestitures, the success or failure of integrating acquired operations, and the ability to capitalize on growth opportunities upon entering new markets; the ability to acquire, operate, and maintain effective and efficient operating systems; increased asset levels and changes in the composition of assets that would impact capital levels and regulatory capital ratios; loss of critical personnel and the challenge of hiring qualified personnel at reasonable compensation levels; legislative and regulatory changes, including the impact of regulations under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and other changes in banking, securities and tax laws and regulations and their application by our regulators, changes in the scope and cost of FDIC insurance and other coverage; regulations and restrictions resulting from our participation in government-sponsored programs such as the U.S. Treasury’s Small Business Lending Fund, including potential retroactive changes in such programs; changes in accounting principles, policies, and guidelines applicable to financial holding companies and banking; increases in cybersecurity risk, including potential business disruptions or financial losses; acts of war, terrorism, cyber intrusion, weather, or other catastrophic events beyond our control; and other factors discussed under the heading “Risk Factors” in MidSouth’s Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on March 16, 2017 and in its other filings with the SEC.

MidSouth does not undertake any obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information, future events or otherwise, except as required by law.



MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Financial Information (unaudited)
(in thousands except per share data)

	Quarter			Quarter			Quarter			Quarter			Quarter
	Ended			Ended			Ended			Ended			Ended
EARNINGS DATA	12/31/2017			9/30/2017			6/30/2017			3/31/2017			12/31/2016
Total interest income	$	20,955		$	20,379		$	19,758		$	19,531		$	19,694
Total interest expense	1,483			1,566			1,512			1,465			1,459
Net interest income	19,472			18,813			18,246			18,066			18,235
FTE net interest income	19,658			19,003			18,442			18,279			18,478
Provision for loan losses	10,600			4,300			12,500			2,800			2,600
Non-interest income	6,028			5,486			5,223			5,044			5,071
Non-interest expense	25,944			17,759			19,604			17,230			17,636
(Loss) earnings before income taxes	(11,044		)	2,240			(8,635		)	3,080			3,070
Income tax (benefit) expense	(540		)	574			(3,221		)	589			871
Net (loss) earnings	(10,504		)	1,666			(5,414		)	2,491			2,199
Dividends on preferred stock	810			810			811			811			812
Net (loss) earnings available to common shareholders	$	(11,314	)	$	856		$	(6,225	)	$	1,680		$	1,387

PER COMMON SHARE DATA
Basic (loss) earnings per share	(0.69		)	0.05			(0.51		)	0.15			0.12
Diluted (loss) earnings per share	(0.69		)	0.05			(0.51		)	0.15			0.12
Diluted (loss) earnings per share, operating (Non-GAAP)(*)	(0.15		)	0.10			(0.38		)	0.15			0.12
Quarterly dividends per share	0.01			0.01			0.09			0.09			0.09
Book value at end of period	12.87			13.70			13.76			15.37			15.25
Tangible book value at period end (Non-GAAP)(*)	10.11			10.92			10.87			11.28			11.13
Market price at end of period	13.25			12.05			11.75			15.30			13.60
Shares outstanding at period end	16,548,829			16,548,829			16,026,355			11,383,914			11,362,716
Weighted average shares outstanding
Basic	16,460,124			16,395,317			12,227,456			11,264,394			11,271,948
Diluted	16,462,550			16,395,740			12,237,299			11,282,491			11,273,302

AVERAGE BALANCE SHEET DATA
Total assets	$	1,907,735		$	1,954,343		$	1,926,408		$	1,932,818		$	1,960,436
Loans and leases	1,238,846			1,254,885			1,254,402			1,274,213			1,277,555
Total deposits	1,513,156			1,546,837			1,551,498			1,569,188			1,591,814
Total common equity	228,385			227,948			187,762			174,785			176,747
Total tangible common equity (Non-GAAP)(*)	182,567			181,851			141,389			128,124			129,821
Total equity	269,373			269,035			228,871			215,895			217,857

SELECTED RATIOS
Annualized return on average assets, operating (Non-GAAP)(*)	(0.52		)%	0.36		%	(0.97		)%	0.35		%	0.28		%
Annualized return on average common equity, operating (Non-GAAP)(*)	(4.36		)%	3.10		%	(10.00		)%	3.89		%	3.12		%
Annualized return on average tangible common equity, operating (Non-GAAP)(*)	(5.45		)%	3.88		%	(13.28		)%	5.31		%	4.25		%
Pre-tax, pre-provision annualized return on average assets, operating (Non-GAAP)(*)	1.58		%	1.62		%	1.30		%	1.23		%	1.15		%
Efficiency ratio, operating (Non-GAAP)(*)	68.05		%	66.85		%	73.11		%	74.51		%	75.67		%
Average loans to average deposits	81.87		%	81.13		%	80.85		%	81.20		%	80.26		%
Taxable-equivalent net interest margin	4.45		%	4.20		%	4.18		%	4.18		%	4.09		%
Tier 1 leverage capital ratio	12.53		%	12.84		%	12.66		%	10.27		%	10.11		%

CREDIT QUALITY
Allowance for loan and lease losses (ALLL) as a % of total loans	2.27		%	2.03		%	1.99		%	1.93		%	1.90		%
Nonperforming assets to tangible equity + ALLL	24.35		%	21.83		%	23.50		%	30.34		%	33.88		%
Nonperforming assets to total loans, other real estate owned and other repossessed assets	4.83		%	4.35		%	4.54		%	4.62		%	5.06		%
Annualized QTD net charge-offs to total loans	2.94		%	1.26		%	4.01		%	0.83		%	0.46		%

(*) See reconciliation of Non-GAAP financial measures on pages 16-18.



MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Balance Sheets (unaudited)
(in thousands)


BALANCE SHEET	December 31,			September 30,			June 30,			March 31,			December 31,
	2017			2017			2017			2017			2016
Assets
Cash and cash equivalents	$	152,964		$	163,123		$	131,437		$	78,471		$	82,228
Securities available-for-sale	309,191			326,222			348,580			357,803			341,873
Securities held-to-maturity	81,052			83,739			87,462			91,242			98,211
Total investment securities	390,243			409,961			436,042			449,045			440,084
Other investments	12,214			12,200			11,666			11,362			11,355
Loans held for sale	15,737			—			—			—			—
Total loans	1,183,426			1,235,969			1,240,253			1,272,000			1,284,082
Allowance for loan losses	(26,888		)	(25,053		)	(24,674		)	(24,578		)	(24,372		)
Loans, net	1,156,538			1,210,916			1,215,579			1,247,422			1,259,710
Premises and equipment	59,057			64,969			65,739			68,216			68,954
Goodwill and other intangibles	45,686			45,963			46,239			46,516			46,792
Other assets	48,713			39,934			38,867			33,907			34,217
Total assets	$	1,881,152		$	1,947,066		$	1,945,569		$	1,934,939		$	1,943,340


Liabilities and Shareholders' Equity
Non-interest bearing deposits	$	416,547		$	428,183		$	428,419		$	426,998		$	414,921
Interest-bearing deposits	1,063,142			1,127,752			1,107,801			1,145,946			1,164,509
Total deposits	1,479,689			1,555,935			1,536,220			1,572,944			1,579,430
Securities sold under agreements to repurchase	67,133			54,875			90,799			89,807			94,461
Short-term FHLB advances	40,000			12,500			—			—			—
Long-term FHLB advances	10,021			25,110			25,211			25,318			25,424
Junior subordinated debentures	22,167			22,167			22,167			22,167			22,167
Other liabilities	8,127			8,836			9,602			8,641			7,482
Total liabilities	1,627,137			1,679,423			1,683,999			1,718,877			1,728,964
Total shareholders' equity	254,015			267,643			261,570			216,062			214,376
Total liabilities and shareholders' equity	$	1,881,152		$	1,947,066		$	1,945,569		$	1,934,939		$	1,943,340



MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Condensed Consolidated Income Statements (unaudited)
(in thousands except per share data)

										Percent Change
EARNINGS STATEMENT	Three Months Ended									4Q17 vs. 3Q17		4Q17 vs. 4Q16		Twelve Months Ended						Percent
	12/31/2017			9/30/2017			12/31/2016			4Q17 vs. 3Q17		4Q17 vs. 4Q16		12/31/2017			12/31/2016			Change

Interest income:
Loans, including fees	$	17,731		$	17,064		$	16,697		3.9	%	6.2	%	$	67,672		$	66,121		2.3	%
Investment securities	2,515			2,639			2,427			(4.7	)%	3.6	%	10,678			9,680			10.3	%
Accretion of purchase accounting adjustments	295			265			362			11.3	%	(18.5	)%	1,036			1,463			(29.2	)%
Other interest income	414			411			208			0.7	%	99.0	%	1,237			766			61.5	%
Total interest income	20,955			20,379			19,694			2.8	%	6.4	%	80,623			78,030			3.3	%

Interest expense:
Deposits	1,097			1,094			936			0.3	%	17.2	%	4,099			3,689			11.1	%
Borrowings	277			350			422			(20.9	)%	(34.4	)%	1,454			1,691			(14.0	)%
Junior subordinated debentures	198			212			197			(6.6	)%	0.5	%	830			704			17.9	%
Accretion of purchase accounting adjustments	(89		)	(90		)	(96		)	(1.1	)%	(7.3	)%	(357		)	(394		)	(9.4	)%
Total interest expense	1,483			1,566			1,459			(5.3	)%	1.6	%	6,026			5,690			5.9	%

Net interest income	19,472			18,813			18,235			3.5	%	6.8	%	74,597			72,340			3.1	%
Provision for loan losses	10,600			4,300			2,600			146.5	%	307.7	%	30,200			10,600			184.9	%
Net interest income after provision for loan losses	8,872			14,513			15,635			(38.9	)%	(43.3	)%	44,397			61,740			(28.1	)%

Noninterest income:
Service charges on deposit accounts	2,385			2,463			2,479			(3.2	)%	(3.8	)%	9,724			9,883			(1.6	)%
ATM and debit card income	1,756			1,687			1,682			4.1	%	4.4	%	6,912			6,579			5.1	%
Gain on securities, net (non-operating)(*)	—			338			—			(100.0	)%	-		347			20			1,635.0	%
Gain on sale of branches (non-operating)(*)	744			—			—			-		-		744			—			-
Mortgage lending	162			155			164			4.5	%	(1.2	)%	627			586			7.0	%
Other charges and fees	981			843			746			16.4	%	31.5	%	3,427			3,038			12.8	%
Total non-interest income	6,028			5,486			5,071			9.9	%	18.9	%	21,781			20,106			8.3	%

Noninterest expense:
Salaries and employee benefits	7,729			7,849			8,726			(1.5	)%	(11.4	)%	32,377			32,932			(1.7	)%
Occupancy expense	3,357			3,443			3,731			(2.5	)%	(10.0	)%	13,851			14,630			(5.3	)%
ATM and debit card	633			654			829			(3.2	)%	(23.6	)%	2,721			3,239			(16.0	)%
Legal and professional fees	1,449			548			520			164.4	%	178.7	%	3,319			1,855			78.9	%
FDIC premiums	297			448			387			(33.7	)%	(23.3	)%	1,572			1,601			(1.8	)%
Marketing	353			302			349			16.9	%	1.1	%	1,197			1,523			(21.4	)%
Corporate development	258			189			423			36.5	%	(39.0	)%	1,016			1,572			(35.4	)%
Data processing	712			640			500			11.3	%	42.4	%	2,640			1,963			34.5	%
Printing and supplies	110			81			158			35.8	%	(30.4	)%	509			760			(33.0	)%
Expenses on ORE, net	331			15			59			2,106.7	%	461.0	%	517			389			32.9	%
Amortization of core deposit intangibles	276			277			277			(0.4	)%	(0.4	)%	1,106			1,107			(0.1	)%
Severance and retention accruals (non-operating)(*)	171			—			—			—	%	—	%	1,512			—			—	%
One-time charge related to discontinued branch projects (non-operating)(*)	—			—			—			—	%	—	%	465			—			—	%
One-time charge related to closure of branches (non-operating)(*)	—			903			—			(100.0	)%	—	%	903			—			—	%
Write-down of assets held for sale (non-operating) (*)	789			—			—			—	%	—	%	1,359			—			—	%
Loss on transfer of loans to held for sale (non-operating)(*)	6,030			—			—			—	%	—	%	6,030			—			—	%
Regulatory remediation costs (non-operating)(*)	1,772			856			—			107.0	%	—	%	2,628			—			—	%
Other non-interest expense	1,677			1,554			1,677			7.9	%	—	%	6,815			6,979			(2.3	)%
Total non-interest expense	25,944			17,759			17,636			46.1	%	47.1	%	80,537			68,550			17.5	%
(Loss) earnings before income taxes	(11,044		)	2,240			3,070			(593.0	)%	(459.7	)%	(14,359		)	13,296			(208.0	)%
Income tax (benefit) expense	(540		)	574			871			(194.1	)%	(162.0	)%	(2,598		)	3,857			(167.4	)%
Net (loss) earnings	(10,504		)	1,666			2,199			(730.5	)%	(577.7	)%	(11,761		)	9,439			(224.6	)%
Dividends on preferred stock	810			810			812			—	%	(0.2	)%	3,242			2,861			13.3	%
Net (loss) earnings available to common shareholders	$	(11,314	)	$	856		$	1,387		(1,421.7	)%	(915.7	)%	$	(15,003	)	$	6,578		(328.1	)%

(Loss) earnings per common share, diluted	$	(0.69	)	$	0.05		$	0.12		(1,480.0	)%	(675.0	)%	$	(1.06	)	$	0.58		(282.8	)%

Operating (loss) earnings per common share, diluted (Non-GAAP)(*)	$	(0.15	)	$	0.10		$	0.12		(250.0	)%	(225.0	)%	$	(0.27	)	$	0.58		(146.6	)%

(*) See reconciliation of Non-GAAP financial measures on pages 16-18.

Note: Prior period information presented above has been adjusted to reflect a reclass of certain credit card income from interest income to other non-interest income as well as certain wire fee income from other non-interest income into service charges on deposit accounts.



MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Composition of Loans and Deposits and Asset Quality Data (unaudited)
(in thousands)

COMPOSITION OF LOANS	December 31,			September 30,			Dec 17 vs Sept 17		June 30,			March 31,			December 31,			Dec 17 vs Dec 16
COMPOSITION OF LOANS	2017			2017			% Change		2017			2017			2016			% Change
Commercial, financial, and agricultural	$	435,207		$	447,482		(2.7	)%	$	451,767		$	469,815		$	459,574		(5.3	)%
Lease financing receivable	732			760			(3.7	)%	866			969			1,095			(33.2	)%
Real estate - construction	90,287			90,088			0.2	%	98,695			100,248			100,959			(10.6	)%
Real estate - commercial	448,406			473,046			(5.2	)%	461,064			464,859			481,155			(6.8	)%
Real estate - residential	146,751			155,676			(5.7	)%	156,394			159,426			157,872			(7.0	)%
Installment loans to individuals	56,398			63,148			(10.7	)%	70,031			75,258			82,660			(31.8	)%
Other	5,645			5,769			(2.1	)%	1,436			1,425			767			636.0	%

Total loans	$	1,183,426		$	1,235,969		(4.3	)%	$	1,240,253		$	1,272,000		$	1,284,082		(7.8	)%

COMPOSITION OF DEPOSITS
COMPOSITION OF DEPOSITS	December 31,			September 30,			Dec 17 vs Sept 17		June 30,			March 31,			December 31,			Dec 17 vs Dec 16
	2017			2017			% Change		2017			2017			2016			% Change
Noninterest bearing	$	416,547		$	428,183		(2.7	)%	$	428,419		$	426,998		$	414,921		0.4	%
NOW & other	434,646			461,740			(5.9	)%	465,505			489,789			472,484			(8.0	)%
Money market/savings	446,215			473,023			(5.7	)%	493,232			505,669			539,815			(17.3	)%
Time deposits of less than $100,000	116,309			120,685			(3.6	)%	75,196			75,579			75,940			53.2	%
Time deposits of $100,000 or more	65,972			72,304			(8.8	)%	73,868			74,909			76,270			(13.5	)%

Total deposits	$	1,479,689		$	1,555,935		(4.9	)%	$	1,536,220		$	1,572,944		$	1,579,430		(6.3	)%

ASSET QUALITY DATA
ASSET QUALITY DATA	December 31,			September 30,					June 30,			March 31,			December 31,
	2017			2017					2017			2017			2016
Nonaccrual loans	$	49,278		$	51,289				$	54,810		$	56,443		$	62,580
Loans past due 90 days and over	728			402					165			775			268
Total nonperforming loans	50,006			51,691					54,975			57,218			62,848
Nonperforming loans held for sale	5,067			—					—			—			—
Other real estate	2,001			1,931					1,387			1,643			2,175
Other repossessed assets	192			234					36			30			16
Total nonperforming assets	$	57,266		$	53,856				$	56,398		$	58,891		$	65,039

Troubled debt restructurings, accruing	$	1,360		$	1,557				$	1,653		$	1,995		$	152

Nonperforming assets to total assets	3.04		%	2.77		%			2.90		%	3.04		%	3.35		%
Nonperforming assets to total loans + ORE + other repossessed assets	4.83		%	4.35		%			4.54		%	4.62		%	5.06		%
ALLL to nonperforming loans	53.77		%	48.47		%			44.88		%	42.96		%	38.78		%
ALLL to total loans	2.27		%	2.03		%			1.99		%	1.93		%	1.90		%

Quarter-to-date charge-offs	$	8,931		$	4,381				$	12,659		$	2,906		$	1,835
Quarter-to-date recoveries	166			460					255			312			339
Quarter-to-date net charge-offs	$	8,765		$	3,921				$	12,404		$	2,594		$	1,496
Annualized QTD net charge-offs to total loans	2.94		%	1.26		%			4.01		%	0.83		%	0.46		%



MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Loan Portfolio - Quarterly Roll Forward (unaudited)
(in thousands)

	Three Months Ended
	December 31,			September 30,			December 31,
	2017			2017			2016
LOAN ACTIVITY

Loans originated	$	83,434		$	87,377		$	91,332
Repayments	(134,057		)	(91,856		)	(64,528		)
Increases on renewals	15,304			5,773			5,259
Change in lines of credit	6,736			(6,931		)	(19,990		)
Change in allowance for loan losses	(1,835		)	(379		)	(1,104		)
Transfer of loans to held for sale	(21,767		)	—			—
Other	(2,193		)	1,353			(791		)
Net change in loans	$	(54,378	)	$	(4,663	)	$	10,178



MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Tangible Common Equity to Tangible Assets and Regulatory Ratios (unaudited)
(in thousands)

COMPUTATION OF TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS	December 31, 2017			December 31, 2016

Total equity	$	254,015		$	214,376
Less preferred equity	40,988			41,110
Total common equity	213,027			173,266
Less goodwill	42,171			42,171
Less intangibles	3,515			4,621
Tangible common equity	$	167,341		$	126,474

Total assets	$	1,881,152		$	1,943,340
Less goodwill	42,171			42,171
Less intangibles	3,515			4,621
Tangible assets	$	1,835,466		$	1,896,548

Tangible common equity to tangible assets	9.12		%	6.67		%

REGULATORY CAPITAL

Common equity tier 1 capital	$	171,161		$	131,091
Tier 1 capital	233,648			193,700
Total capital	251,456			212,366

Regulatory capital ratios:
Common equity tier 1 capital ratio	12.10		%	8.81		%
Tier 1 risk-based capital ratio	16.51		%	13.02		%
Total risk-based capital ratio	17.77		%	14.28		%
Tier 1 leverage ratio	12.53		%	10.11		%



MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Quarterly Yield Analysis (unaudited)
(in thousands)

YIELD ANALYSIS	Three Months Ended						Three Months Ended						Three Months Ended						Three Months Ended						Three Months Ended
	December 31, 2017						September 30, 2017						June 30, 2017						March 31, 2017						December 31, 2016

			Tax						Tax						Tax						Tax						Tax
	Average		Equivalent		Yield/		Average		Equivalent		Yield/		Average		Equivalent		Yield/		Average		Equivalent		Yield/		Average		Equivalent		Yield/
	Balance		Interest		Rate		Balance		Interest		Rate		Balance		Interest		Rate		Balance		Interest		Rate		Balance		Interest		Rate

Taxable securities	$	348,267	$	2,161	2.48	%	$	372,648	$	2,276	2.44	%	$	387,441	$	2,416	2.49	%	$	382,105	$	2,327	2.44	%	$	348,673	$	1,965	2.25	%
Tax-exempt securities	53,998		540		4.00	%	55,129		553		4.01	%	56,622		570		4.03	%	60,618		620		4.09	%	66,549		705		4.24	%
Total investment securities	402,265		2,701		2.69	%	427,777		2,829		2.65	%	444,063		2,986		2.69	%	442,723		2,947		2.66	%	415,222		2,670		2.57	%
Federal funds sold	4,441		15		1.32	%	4,319		13		1.18	%	3,573		9		1.00	%	3,571		6		0.67	%	3,261		5		0.60	%
Time and interest bearing deposits in other banks	94,394		314		1.30	%	94,675		305		1.26	%	55,331		150		1.07	%	41,785		85		0.81	%	90,527		125		0.54	%
Other investments	12,201		85		2.79	%	12,098		93		3.07	%	11,493		78		2.71	%	11,355		84		2.96	%	11,342		78		2.75	%
Loans	1,238,846		18,026		5.77	%	1,254,885		17,329		5.48	%	1,254,402		16,731		5.35	%	1,274,213		16,622		5.29	%	1,277,555		17,059		5.31	%
Total interest earning assets	1,752,147		21,141		4.79	%	1,793,754		20,569		4.55	%	1,768,862		19,954		4.52	%	1,773,647		19,744		4.51	%	1,797,907		19,937		4.41	%
Non-interest earning assets	155,588						160,589						157,546						159,171						162,529
Total assets	$	1,907,735					$	1,954,343					$	1,926,408					$	1,932,818					$	1,960,436

Interest-bearing liabilities:
Deposits	$	1,085,349	$	1,097	0.40	%	$	1,118,593	$	1,094	0.39	%	$	1,125,482	$	973	0.35	%	$	1,155,407	$	935	0.33	%	$	1,179,174	$	929	0.31	%
Repurchase agreements	54,799		66		0.48	%	75,654		149		0.78	%	90,807		236		1.04	%	92,571		234		1.03	%	94,609		241		1.01	%
Short-term FHLB advances	18,478		58		1.23	%	6,522		19		1.14	%	—		—		—	%	—		—		—	%	—		—		—	%
Long-term FHLB advances	21,803		64		1.15	%	25,155		92		1.43	%	25,260		91		1.43	%	25,370		88		1.39	%	25,474		92		1.41	%
Junior subordinated debentures	22,167		198		3.50	%	22,167		212		3.74	%	22,167		212		3.78	%	22,167		208		3.75	%	22,167		197		3.48	%
Total interest bearing liabilities	1,202,596		1,483		0.49	%	1,248,091		1,566		0.50	%	1,263,716		1,512		0.48	%	1,295,515		1,465		0.46	%	1,321,424		1,459		0.44	%
Non-interest bearing liabilities	435,766						437,217						433,821						421,408						421,155
Shareholders' equity	269,373						269,035						228,871						215,895						217,857
Total liabilities and shareholders' equity	$	1,907,735					$	1,954,343					$	1,926,408					$	1,932,818					$	1,960,436

Net interest income (TE) and spread			$	19,658	4.30	%			$	19,003	4.05	%			$	18,442	4.04	%			$	18,279	4.05	%			$	18,478	3.97	%

Net interest margin					4.45	%					4.20	%					4.18	%					4.18	%					4.09	%

Core net interest margin (Non-GAAP)(*)					4.36	%					4.12	%					4.09	%					4.11	%					3.98	%


(*) See reconciliation of Non-GAAP financial measures on pages 16-18.

Note: Prior period information presented above has been adjusted to reflect a reclass of certain credit card income from interest income to non-interest income.



MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures (unaudited)
(in thousands except per share data)

Certain financial information included in the earnings release and the associated Condensed Consolidated Financial Information (unaudited) is determined by methods other than in accordance with GAAP. We are providing disclosure of the reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures. "Tangible common equity" is defined as total common equity reduced by intangible assets. "Core net interest margin" is defined as reported net interest margin less purchase accounting adjustments. "Annualized return on average assets, operating" is defined as net earnings available to common shareholders adjusted for specified one-time items divided by average assets. "Annualized return on average common equity, operating" is defined as net earnings available to common shareholders adjusted for specified one-time items divided by average common equity. "Annualized return on average tangible common equity, operating" is defined as net earnings available to common shareholders adjusted for specified one-time items divided by average tangible common equity. "Pre-tax, pre-provision annualized return on average assets, operating" is defined as pre-tax, pre-provision earnings adjusted for specified one-time items divided by average assets. "Tangible book value per common share" is defined as tangible common equity divided by total common shares outstanding. "Diluted earnings per share, operating" is defined as net earnings available to common shareholders adjusted for specified one-time items divided by diluted weighted-average shares. The GAAP-based efficiency ratio is measured as noninterest expense as a percentage of net interest income plus noninterest income. The non-GAAP efficiency ratio excludes specified one-time items in addition to securities gains and losses and gains and losses on the sale/valuation of other real estate owned and other assets repossessed.
We use non-GAAP measures because we believe they are useful for evaluating our financial condition and performance over periods of time, as well as in managing and evaluating our business and in discussions about our performance. We also believe these non-GAAP financial measures provide users of our financial information with a meaningful measure for assessing our financial condition as well as comparison to financial results for prior periods. These results should not be viewed as a substitute for results determined in accordance with GAAP, and are not necessarily comparable to non-GAAP performance measures that other companies may use.


		Three Months Ended
		December 31,		September 30,		June 30,		March 31,		December 31,
		2017		2017		2017		2017		2016
Average Balance Sheet Data

Total average assets	A	$	1,907,735	$	1,954,343	$	1,926,408	$	1,932,818	$	1,960,436

Total equity		$	269,373	$	269,035	$	228,871	$	215,895	$	217,857
Less preferred equity		40,988		41,087		41,109		41,110		41,110
Total common equity	B	$	228,385	$	227,948	$	187,762	$	174,785	$	176,747
Less intangible assets		45,818		46,097		46,373		46,661		46,926
Tangible common equity	C	$	182,567	$	181,851	$	141,389	$	128,124	$	129,821



MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures (unaudited) (continued)
(in thousands except per share data)

		Three Months Ended
		December 31,			September 30,			June 30,			March 31,			December 31,
Core Net Interest Margin		2017			2017			2017			2017			2016

Net interest income (TE)		$	19,658		$	19,003		$	18,442		$	18,279		$	18,478
Less purchase accounting adjustments		(384		)	(355		)	(380		)	(274		)	(458		)
Core net interest income, net of purchase accounting adjustments	D	$	19,274		$	18,648		$	18,062		$	18,005		$	18,020

Total average earnings assets		$	1,752,147		$	1,793,754		$	1,768,862		$	1,773,647		$	1,797,907
Add average balance of loan valuation discount		1,242			1,504			1,720			1,964			2,316
Average earnings assets, excluding loan valuation discount	E	$	1,753,389		$	1,795,258		$	1,770,582		$	1,775,611		$	1,800,223

Core net interest margin	D/E	4.36		%	4.12		%	4.09		%	4.11		%	3.98		%

		Three Months Ended
		December 31,			September 30,			June 30,			March 31,			December 31,
Return Ratios		2017			2017			2017			2017			2016

Net (loss) earnings available to common shareholders		$	(11,314	)	$	856		$	(6,225	)	$	1,680		$	1,387
Severance and retention accruals, after-tax		111			—			872			—			—
One-time charge related to discontinued branch projects, after-tax		—			—			302			—			—
One-time charge related to closure of branches, after-tax		—			587			—			—			—
Write-down of assets held for sale, after-tax		512			—			371			—			—
Write-down of net deferred tax asset resulting from the Tax Cuts and Jobs Act		3,595			—			—			—			—
Loss on transfer of loans to held for sale, after-tax		3,920			—			—			—			—
Regulatory remediation costs, after-tax		1,152			556			—			—			—
Gain on sale of branches, after-tax		(484		)	—			—			—			—
Net gain on sales of securities, after-tax		—			(220		)	(2		)	(4		)	—
Net (loss) earnings available to common shareholders, operating	F	$	(2,508	)	$	1,779		$	(4,682	)	$	1,676		$	1,387

(Loss) earnings before income taxes		$	(11,044	)	$	2,240		$	(8,635	)	$	3,080		$	3,070
Severance and retention accruals		171			—			1,341			—			—
One-time charge related to discontinued branch projects		—			—			465			—			—
One-time charge related to closure of branches		—			903			—			—			—
Write-down of assets held for sale		789			—			570			—			—
Loss on transfer of loans to held for sale		6,030			—			—			—			—
Regulatory remediation costs		1,772			856			—			—			—
Gain on sale of branches		(744		)	—			—			—			—
Net gain on sales of securities		—			(338		)	(3		)	(6		)	—
Provision for loan losses		10,600			4,300			12,500			2,800			2,600
Pre-tax, pre-provision earnings, operating	G	$	7,574		$	7,961		$	6,238		$	5,874		$	5,670

Annualized return on average assets, operating	F/A	(0.52		)%	0.36		%	(0.97		)%	0.35		%	0.28		%
Annualized return on average common equity, operating	F/B	(4.36		)%	3.10		%	(10.00		)%	3.89		%	3.12		%
Annualized return on average tangible common equity, operating	F/C	(5.45		)%	3.88		%	(13.28		)%	5.31		%	4.25		%
Pre-tax, pre-provision annualized return on average assets, operating	G/A	1.58		%	1.62		%	1.30		%	1.23		%	1.15		%



MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures (unaudited) (continued)
(in thousands except per share data)

		Three Months Ended															Twelve Months Ended
		December 31,			September 30,			June 30,			March 31,			December 31,			December 31,			December 31,
Per Common Share Data		2017			2017			2017			2017			2016			2017			2016

Diluted (loss) earnings per share		$	(0.69	)	$	0.05		$	(0.51	)	$	0.15		$	0.12		$	(1.06	)	$	0.58
Effect of severance and retention accruals		0.01			—			0.08			—			—			0.07			—
Effect of one-time charge related to discontinued branch projects		—			—			0.02			—			—			0.02			—
Effect of one-time charge related to closure of branches		—			0.03			—			—			—			0.04			—
Effect of loss on transfer of loans to held for sale		0.24			—			—			—			—			0.28			—
Effect of regulatory remediation costs		0.07			0.03			—			—			—			0.12
Effect of gain on sale of branches		(0.03		)	—			—			—			—			(0.04		)	—
Effect of write-down of assets held for sale		0.03			—			0.03			—			—			0.06			—
Effect of write-down of net deferred tax asset resulting from the Tax Cuts and Jobs Act		0.22			—			—			—			—			0.25			—
Effect of gain on sales of securities		—			(0.01		)	—			—			—			(0.01		)	—
Diluted (loss) earnings per share, operating		$	(0.15	)	$	0.10		$	(0.38	)	$	0.15		$	0.12		$	(0.27	)	$	0.58

Book value per common share		$	12.87		$	13.70		$	13.76		$	15.37		$	15.25
Effect of intangible assets per share		2.76			2.78			2.89			4.09			4.12
Tangible book value per common share		$	10.11		$	10.92		$	10.87		$	11.28		$	11.13


		Three Months Ended
		December 31,			September 30,			June 30,			March 31,			December 31,
Efficiency Ratio		2017			2017			2017			2017			2016

Net interest income		$	19,472		$	18,813		$	18,246		$	18,066		$	18,235

Noninterest income		$	6,028		$	5,486		$	5,223		$	5,044		$	5,071
Net gain on sale of securities		—			(338		)	(3		)	(6		)	—
Gain on sale of branches		(744		)	—			—			—			—
Noninterest income (non-GAAP)		$	5,284		$	5,148		$	5,220		$	5,038		$	5,071

Total revenue	H	$	25,500		$	24,299		$	23,469		$	23,110		$	23,306
Total revenue (non-GAAP)	I	$	24,756		$	23,961		$	23,466		$	23,104		$	23,306

Noninterest expense	J	$	25,944		$	17,759		$	19,604		$	17,230		$	17,636
Severance and retention accruals		(171		)	—			(1,341		)	—			—
One-time charge related to discontinued branch projects		—			—			(465		)	—			—
One-time charge related to closure of branches		—			(903		)	—			—			—
Write-down of assets held for sale		(789		)	—			(570		)	—			—
Loss on transfer of loans to held for sale		(6,030		)	—			—			—			—
Regulatory remediation costs		(1,772		)	(856		)	—			—			—
Net (loss) gain on sale/valuation of other real estate owned		(335		)	19			(72		)	(15		)	—
Noninterest expense (non-GAAP)	K	$	16,847		$	16,019		$	17,156		$	17,215		$	17,636

Efficiency ratio (GAAP)	J/H	101.74		%	73.09		%	83.53		%	74.56		%	75.67		%

Efficiency ratio (non-GAAP)	K/I	68.05		%	66.85		%	73.11		%	74.51		%	75.67		%

MIDSOUTH BANCORP INC - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - January 30, 2018

Attached files

MIDSOUTH BANCORP INC Reports