MidSouth Bancorp, Inc. (“MidSouth”) (NYSE:MSL) today reported a quarterly net loss available to common shareholders of $23.1 million for the fourth quarter of 2018, compared to net loss available to common shareholders of $11.3 million reported for the fourth quarter of 2017 and $5.7 million in net loss available to common shareholders for the third quarter of 2018. The fourth quarter of 2018 included an after-tax charge of $3.9 million for regulatory remediation costs, a $11.4 million tax-related charge for the establishment of a valuation allowance to fully reserve against net deferred tax assets given the company’s cumulative pretax loss position. For comparison purposes, the third quarter of 2018 included a non-recurring after-tax expense of $4.3 million for regulatory remediation costs. Excluding these non-operating expenses, a loss of $0.66 per diluted share was reported for the fourth quarter of 2018, compared to diluted loss per common share of $0.08 for the third quarter of 2018 and $0.15 for the fourth quarter of 2017.

Jim McLemore, President and CEO, remarked, “This quarter, we took important actions to accelerate MidSouth's improvement in asset quality and to set the stage for an expected return to operating profitability for the full year 2019. We also concluded some very extensive remediation projects that contribute to a renewed culture of prudent risk management in our organization. Combined with strong capital, ample liquidity, and experienced banking professionals, MidSouth will continue our tradition of valuable service to our communities and clients.”

Asset Quality Improvements

Mr. McLemore continued, “The quarter’s improvement in asset quality was remarkable as classified assets as a percentage of capital at the bank was reduced to 29% from 45% last quarter, primarily as the result of the payoff of two of our largest non-performing loans. We also anticipate selling approximately $20 million of other classified loans and have marked these loans accordingly. On a pro-forma basis, after reflecting the completion of this sale, classified assets as a percentage of capital would be 17%.”

Strong Liquidity and Capital

“At the same time as we’ve significantly reduced risk and improved processes in the credit, operational and compliance areas of the bank, we’ve also built very strong liquidity levels and have maintained strong capital levels. Basic surplus, our primary measure of liquidity, stood at 23% at year-end 2018, which is almost double the level of 12% at year-end 2017. Tangible common equity as a percent of tangible assets was roughly 8.0% at year end.”

Corporate Governance

“In 2018, we made a very focused effort to improve our corporate governance through the addition of talented and experienced new board members as well as through improving our other governance processes. This quarter we took steps to significantly enhance out board, including the addition of Bill Grant as a new director and also seeking regulatory approval for John Heffern and Ryan Medo to join our board.”

Remediation Efforts

Mr. McLemore concluded, “At the end of the fourth quarter, we completed the last of the remediation projects and associated spend we identified in our second quarter 2018 earnings release. The spend for 2018 was $19.7 million, within our range of guidance at mid-year. We do not expect any significant remediation spend in 2019. Through the process of 2018’s significant remediation efforts and leadership changes, we have reduced risk and significantly improved all major processes of the bank. These include corporate governance, loan portfolio management, problem asset management, loan and deposit operations, technology platforms, risk management and compliance.”

Balance Sheet

Consolidated assets decreased 7.3% to $1.7 billion at December 31, 2018 from $1.9 billion at December 31, 2017 and 3.9% from $1.8 billion at September 30, 2018. Our stable core deposit base, which excludes time deposits, totaled $1.3 billion at December 31, 2018 and September 30, 2018 and accounted for 87.6% and 87.7% of deposits at December 31, 2018 and September 30, 2018, respectively. Net loans totaled $882 million at December 31, 2018, compared to $938 million at September 30, 2018 and $1.2 billion at December 31, 2017. In an effort to further reduce classified assets, classified loans totaling $20.4 million were transferred to held for sale during the fourth quarter of 2018.

MidSouth’s Tier 1 leverage capital ratio was 11.45% at December 31, 2018, compared to 12.53% at September 30, 2018. Tier 1 risk-based capital and total risk-based capital ratios were 17.79% and 19.04% at December 31, 2018, respectively, compared to 19.09% and 20.35% at September 30, 2018, respectively. Tier 1 common equity to total risk-weighted assets at December 31, 2018 was 12.20%, compared to 13.78% at September 30, 2018. Tangible common equity totaled $135.6 million at December 31, 2018, compared to $155.6 million at September 30, 2018. Tangible book value per share at December 31, 2018 was $8.20 compared to $9.35 at September 30, 2018.

Asset Quality

Nonperforming assets totaled $30.5 million at December 31, 2018, including $20.4 million of loans transferred to held for sale, a decrease of $22.0 million compared to $52.5 million reported at September 30, 2018. The decrease is primarily attributable to the payoffs/paydowns of $9.8 million of non-accrual loans and the charge-off of $14.5 million of non-accrual loans. Allowance coverage for nonperforming loans increased to 195.40% at December 31, 2018, compared to 47.49% at September 30, 2018. The ALLL/total loans ratio was 1.94% at December 31, 2018 and 2.54% at September 30, 2018. The ratio of annualized net charge-offs to total loans increased to 8.45% for the three months ended December 31, 2018 compared to 1.40% for the three months ended September 30, 2018 due to the payoffs of two large credits and anticipated loan sale.

Total nonperforming assets to total loans plus ORE and other assets repossessed was 3.39% at December 31, 2018 compared to 5.45% at September 30, 2018. Loans classified as troubled debt restructurings, accruing (“TDRs, accruing”) totaled $1.3 million at December 31, 2018 compared to $896,000 at September 30, 2018. Also included in nonperforming assets at December 31, 2018 was $20.4 million of classified loans transferred to held for sale. Total classified assets, including ORE, were $51.2 million at December 31, 2018 compared to $91.6 million at September 30, 2018. The balance of classified loans decreased as a result of principal reductions through payoffs and/or pay-downs in the amount $11.8 million in addition to charge-offs of $19.2 million at December 31, 2018. As a part of the anticipated loan sale, there were classified loans transferred to loans held for sale at fair value, resulting in $11.9 million in charge-offs which also contributed to the decline in classified assets. These decreases were partially offset by downgrades to classified loans of $4.5 million during the quarter. The classified to capital ratio at MidSouth Bank was 29% at December 31, 2018 versus 45% at September 30, 2018.

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.

Fourth Quarter 2018 vs. Third Quarter 2018 Earnings Comparison

MidSouth reported a net loss available to common shareholders of $23.1 million for the three months ended December 31, 2018, compared to net loss available to common shareholders of $5.7 million for the three months ended September 30, 2018. Revenues from consolidated operations increased $438,000 in sequential-quarter comparison from $21.6 million to $22.0 million. Net interest income increased $777,000 primarily due to the acceleration of $726,000 in accretion income from the PSB Financial Corporation acquisition after determination that it would be more conservative to remove the nominal discount remaining from these acquired loans that undergo quarterly cash flow re-estimations and instead include these loans with the quarterly allowance for loan losses calculation. Finally, noninterest income decreased $339,000 in sequential-quarter comparison.

The fourth quarter of 2018 included non-operating expenses totaling $5.0 million for regulatory remediation costs. The third quarter of 2018 included a non-recurring charge of $5.5 million of regulatory remediation costs. Excluding these non-operating expenses, noninterest expense increased $1.7 million in sequential-quarter comparison and consisted primarily of a $1.1 million increase in salaries and benefits given continued investment in staffing for compliance and an $800,000 increase in legal and professional fees offset by a $100,000 decline in marketing and FDIC premiums. 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 $7.7 million in sequential-quarter comparison. A $11.4 million tax-related charge was recorded during the fourth quarter of 2018 associated with the establishment of a valuation reserve against the net deferred tax assets. Excluding this adjustment, we recorded an income tax expense of $7.6 million for the fourth quarter of 2018, compared to an income tax benefit of $1.4 million for the third quarter of 2018.

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 2018 based on a dividend rate of 9%, unchanged from $720,000 for the third quarter of 2018. 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, 2018 and September 30, 2018.

Fully taxable-equivalent (“FTE”) net interest income increased $780,000 in sequential-quarter comparison, primarily due to an increase in interest income on investment securities of $801,000. Interest income on loans was flat at $14.6 million despite a $76.3 million decline in average balances as loan yields increased 44 bps from 5.72% to 6.16%. Higher yields reflected increased loan rates in addition to management’s recognition of the remaining PSB accretion discounts into income. Excluding these purchase accounting adjustments, the loan yield increased 13 bps, from 5.72% to 5.85% during the same period. The average yield on investment securities increased 60 basis points, from 2.56% to 3.16% as a result of opportunistic purchases at higher yields which increased average balances by $28.1 million. The average yield on total earning assets increased 48 bps for the same period, from 4.40% to 4.88%, respectively. The FTE net interest margin increased 42 bps in sequential-quarter comparison, from 3.93% for the third quarter of 2018 to 4.35% for the fourth quarter of 2018. Excluding purchase accounting adjustments, the FTE net interest margin increased 11 bps, from 3.93% for the third quarter of 2018 to 4.04% for the fourth quarter of 2018.

Fourth Quarter 2018 vs. Fourth Quarter 2017 Earnings Comparison

MidSouth reported a net loss available to common shareholders of $23.1 million for the three months ended December 31, 2018, compared to net loss available to common shareholders of $11.3 million for the three months ended December 31, 2017. Revenues from consolidated operations decreased $3.5 million in quarterly comparison, from $25.5 million for the three months ended December 31, 2017 to $22.0 million for the three months ended December 31, 2018. Net interest income decreased $2.2 million in quarterly comparison, resulting from a $1.6 million decrease in interest income primarily driven by lower loan levels, in addition to higher interest expense of $0.6 million reflecting the impact of higher interest rates, partially offset by $726,000 acceleration of accretion income from the PSB acquisition. Operating noninterest income decreased $1.3 million in quarterly comparison.

Excluding non-operating expenses of $5.0 million of remediation costs for the fourth quarter of 2018 and $7.8 million for the fourth quarter of 2017, which included $1.8 million of remediation costs, $6.0 million of expenses for loans held for sale, noninterest expenses increased $1.8 million in quarterly comparison and consisted primarily of a $1.2 million increase in salaries and employee benefits costs and a $2.0 million increase in legal and professional fees offset by declines in other noninterest expenses. The provision for loan losses increased $1.4 million in quarterly comparison, from $10.6 million for the three months ended December 31, 2017 to $12.0 million for the three months ended December 31, 2018. Excluding the $11.4 million tax-related charge recorded during the fourth quarter of 2018 associated with the establishment of a valuation reserve against the net deferred tax assets and the $3.6 million tax-related charge recorded in connection with the Tax Act during the fourth quarter of 2017, we recorded an income tax expense of $7.6 million for the fourth quarter of 2018, compared to income tax expense of $4.1 for the fourth quarter of 2017.

Dividends on preferred stock totaled $810,000 for the three months ended December 31, 2018 and for the three months ended December 31, 2017. Dividends on the Series B Preferred Stock were $720,000 for the fourth quarter of 2018, unchanged from $720,000 for the fourth quarter of 2017. Dividends on the Series C Preferred Stock totaled $90,000 for the three months ended December 31, 2018 and December 31, 2017.

FTE net interest income decreased $2.2 million in prior year quarterly comparison. Interest income on loans decreased $3.5 million primarily due to a $294.3 million decline in average loans given ongoing efforts to reduce problem loans and slower loan originations due to efforts to shore up operational issues. Excluding the impact of the purchase accounting adjustment of $726,000, average loan yields increased 8 basis points in prior year quarterly comparison, from 5.77% to 5.85%.

Investment securities totaled $475.5 million, or 27.2% of total assets at December 31, 2018, versus $390.2 million, or 20.8% of total assets at December 31, 2017. The investment portfolio had an effective duration of 3.0 years and a net unrealized loss of $6.2 million at December 31, 2018. FTE interest income on investments increased $696,000 in prior year quarterly comparison. The average volume of investment securities increased $16.2 million in prior year quarterly comparison, and the average tax equivalent yield on investment securities increased 47 basis points, from 2.69% to 3.16%.

The average yield on all earning assets increased 9 basis points in prior year quarterly comparison, from 4.79% for the fourth quarter of 2017 to 4.88% for the fourth quarter of 2018. Excluding the impact of purchase accounting adjustments, the average yield on total earning assets decreased 69 basis points, from 4.72% to 4.17% for the three-month periods ended December 31, 2017 and 2018, respectively, primarily due to the $294.3 million decline in average loans.

Interest expense increased $614,000 in prior year quarterly comparison primarily due to a $573,000 increase in interest expense on deposits and a $77,000 increase in interest expense on junior subordinated debt, which were partially offset by a $49,000 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, 2018 and 0.47% for the three months ended December 31, 2017.

As a result of these changes in volume and yield on earning assets and interest-bearing liabilities, the FTE net interest margin decreased 12 basis points, from 4.47% for the fourth quarter of 2017 to 4.35% for the fourth quarter of 2018.

2018 vs 2017 Earnings Comparison

MidSouth reported a net loss available to common shareholders of $30.8 million for the year ended December 31, 2018, compared to net loss available to common shareholders of $15.0 million for the year ended December 31, 2017. 2017 net earnings included $347,000 of gain on sales of securities and $744,000 of gain on sale of branches. Excluding these non-operating revenues, revenues from consolidated operations decreased $7.7 million in year-over-year comparison, from $95.3 million for the year ended December 31, 2017 to $87.6 million for the year ended December 31, 2018. Net interest income decreased $6.6 million in year-over-year comparison, resulting from a $5.1 million decrease in interest income, in addition to a $1.5 million increase in interest expense. Operating noninterest income decreased $1.1 million in year-over-year comparison primarily due to a $1.9 million decrease in service charges partially offset by $1.2 million in increases for ATM/debit card income.

Excluding non-operating expenses of $21.4 million for the year ended December 31, 2018 and $11.5 million for the year ended December 31, 2017, noninterest expenses increased $2.0 million in year-over-year comparison primarily due to increases in legal and professional fees associated with working down our problem assets. The provision for loan losses decreased $13.5 million in year-over-year comparison, from $30.2 million for the year ended December 31, 2017 to $16.7 million for the year ended December 31, 2018 . Excluding the $3.6 million charge recorded in connection with the Tax Act during the fourth quarter of 2017, and the $11.4 million charge recorded in conjunction with the establishment of a valuation reserve against the net deferred tax asset in 2018, a $6.2 million income tax benefit was reported for the year ended December 31, 2017, compared to income tax benefit of $5.4 million for the year ended December 31, 2018.

In year-to-date comparison, FTE net interest income decreased $7.1 million primarily due to a $8.2 million decrease in interest income on loans and a $1.5 million increase in interest expense, offset by increased income from interest bearing deposits at other banks. The average volume of investment securities decreased $30.0 million in year-over-year comparison, and the average yield on investment securities increased 1 bps for the same period. The average volume of loans decreased $197 million in year-over-year comparison, and the average yield on loans increased 25 bps, from 5.47% to 5.72%, including 7 bps of yield due to the acceleration of loan accretion income. The average yield on earning assets decreased 7 basis points in year-over-year comparison, from 4.59% at December 31, 2017 to 4.52% at December 31, 2018.

Interest expense increased $1.5 million in year-over-year comparison. Increases in interest expense included a $1.8 million increase in interest expense on deposits and a $195,000 increase in interest expense on junior subordinated debentures. These increases were partially offset by an $587,000 decrease in interest expense on repurchase agreements. The average rate paid on interest-bearing liabilities was 0.65% for the year ended December 31, 2018, compared to 0.48% for the year ended December 31, 2017. The FTE net interest margin decreased 17 basis points, from 4.25% for the year ended December 31, 2017 to 4.08% for the year ended December 31, 2018.

About MidSouth Bancorp, Inc.

MidSouth Bancorp, Inc. is a bank holding company headquartered in Lafayette, Louisiana, with assets of $1.7 billion as of December 31, 2018. 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.

Non-GAAP Financial Measures

This press release, including the accompanying financial statement tables, contains financial information determined by methods other than in accordance with generally accepted accounting principles, or GAAP. This financial information includes certain operating performance measures, which exclude charges that are not considered part of recurring operations. Non-GAAP measures in this press release include, but are not limited to, descriptions such as “operating net income,” “operating earnings (loss) per share,” “tangible book value per common share,” “operating return on average common equity,” “operating return on average assets,” and “operating efficiency ratio.” In addition, this press release, consistent with SEC Industry Guide 3, presents total revenue, net interest income, net interest margin, and efficiency ratios on a fully taxable equivalent (“FTE”) basis, and ratios on an annualized basis. The FTE basis adjusts for the tax-favored status of net interest income from certain loans and investments using a federal tax rate of 21% for all periods beginning on or after January 1, 2018 and 35% for all periods prior to January 1, 2018, as well as state income taxes, where applicable, to increase tax-exempt interest income to a taxable-equivalent basis. MidSouth believes this measure to be the preferred industry measurement of net interest income and it enhances comparability of net interest income arising from taxable and tax-exempt sources.

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 measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP, and are not necessarily comparable to non-GAAP measures that may be presented by other companies. To the extent applicable, reconciliations of these non-GAAP measures to the most directly comparable measures as reported in accordance with GAAP are included with the accompanying financial statement tables.

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 expected future financial results, and remediation expenses, expected completion of regulatory remediation projects, our ability toreturn to profitability, expected loan sales and the strength of the Company's balance sheet and its positioning to address problem assets and achieve operating efficiencies and measured growth.The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “will,” “would,” “could,” “should,” “guidance,” “potential,” “continue,” “project,” “forecast,” “confident,” and similar expressions are typically used to identify forward-looking statements.

These statements are based on assumptions and assessments made by management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate.Any forward-looking statements are not guarantees of our future performance and are subject to risks and uncertainties and may be affected by various factors that may cause actual results, developments and business decisions to differ materially from those in the 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 ourstrategic initiatives and regulatory remediation efforts; 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 and regulatory remediation efforts; 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 the Company to comply with the terms of the formal agreement and the consent order with the Office of the Comptroller of the Currency; risk of noncompliance with and further enforcement actions regarding the Bank Secrecy Act and other anti-money laundering statues and regulations; credit losses due to loan concentration, particularly our energy lending and 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 additional enforcement actions or conditions on our operations, required additional regulatory remediation effortsor 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’sAnnual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on March 16, 2018 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   12/31/2018   9/30/2018 6/30/2018 3/31/2018 12/31/2017
Total interest income $ 19,340 $ 18,436 $ 18,739 $ 18,997 $ 20,955
Total interest expense   2,097     1,970   1,814   1,627   1,483  
Net interest income   17,243     16,466   16,925   17,370   19,472  
FTE net interest income   17,318     16,538   16,998   17,454   19,566  
Provision for loan losses   12,000     4,300   440   —   10,600  
Non-interest income 4,751 5,090 4,882 4,829 6,028
Non-interest expense   24,693     23,527   22,273   21,873   25,944  
(Loss) earnings before income taxes (14,699 ) (6,271 ) (906 ) 326 (11,044 )
Income tax (benefit) expense   7,610     (1,373 ) (237 ) (34 ) (540 )
Net (loss) earnings (22,309 ) (4,898 ) (669 ) 360 (10,504 )
Dividends on preferred stock   810     810   810   810   810  
Net (loss) earnings available to common shareholders   $ (23,119 )   $ (5,708 ) $ (1,479 ) $ (450 ) $ (11,314 )
 
PER COMMON SHARE DATA
Basic (loss) earnings per share (1.39 ) (0.34 ) (0.09 ) (0.03 ) (0.69 )
Diluted (loss) earnings per share (1.39 ) (0.34 ) (0.09 ) (0.03 ) (0.69 )
Diluted (loss) earnings per share, operating (Non-GAAP)(*) (0.66 ) (0.08 ) 0.17 0.21 (0.15 )
Quarterly dividends per share 0.01 0.01 0.01 0.01 0.01
Book value at end of period 10.83 12.05 12.50 12.62 12.87
Tangible book value at period end (Non-GAAP)(*)

8.20

9.35 9.78 9.89 10.11
Market price at end of period 10.60 15.40 13.25 12.65 13.25
Shares outstanding at period end 16,641,017 16,641,105 16,619,894 16,621,811 16,548,829
Weighted average shares outstanding:
Basic 16,640,174 16,557,664 16,525,571 16,495,438 16,460,124
Diluted 16,640,174 16,557,664 16,525,571 16,495,438 16,460,124
AVERAGE BALANCE SHEET DATA
Total assets $ 1,791,990 $ 1,830,834 $ 1,860,906 $ 1,860,070 $ 1,907,735
Loans and leases 944,545 1,020,834 1,109,371 1,159,671 1,238,846
Total deposits 1,476,211 1,503,528 1,514,321 1,495,907 1,513,156
Total common equity 202,796 209,010 210,291 214,183 228,386
Total tangible common equity(*) 158,083 164,020 165,024 168,629 182,568
Total equity 243,768 249,997 251,278 255,170 269,373
SELECTED RATIOS
Annualized return on average assets, operating(*) (1.70 )% (0.30 )% 0.59 % 0.76 % (0.17 )%
Annualized return on average common equity, operating(*) (15.06 )% (2.60 )% 5.22 % 6.59 % (1.40 )%
Annualized return on average tangible common equity, operating(*) (19.34 )% (3.31 )% 6.65 % 8.37 % (1.75 )%
Efficiency ratio, operating(*) 89.37 % 83.36 % 77.38 % 75.57 % 69.14 %
Average loans to average deposits 63.98 % 67.90 % 73.26 % 77.52 % 81.87 %
Tier 1 leverage capital ratio 11.45 % 12.53 % 12.71 % 12.80 % 12.53 %
CREDIT QUALITY
Allowance for loan and lease losses (ALLL) as a % of total loans 1.94 % 2.54 % 2.22 % 2.23 % 2.27 %
Nonperforming assets to tangible equity + ALLL 6.44 % 23.75 % 32.99 % 36.86 % 24.35 %
Nonperforming assets to total loans, other real estate owned and other repossessed assets 1.12 % 5.45 % 7.07 % 7.47 % 4.83 %
Annualized QTD net charge-offs to total loans 8.45 % 1.40 % 0.87 % 0.54 % 2.94 %
(*) See reconciliation of Non-GAAP financial measures on pages 16-18.
 
 
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Consolidated Balance Sheets (unaudited)
(in thousands)
     
December 31,   September 30, June 30, March 31,   December 31,
2018 2018 2018 2018 2017
Assets
Cash and cash equivalents $ 205,371 $ 302,888 $ 278,776 $ 211,486 $ 152,964
Securities available-for-sale 437,754 352,606 308,937 293,970 309,191
Securities held-to-maturity 37,759   64,893   67,777   73,255   81,052  
Total investment securities 475,513   417,499   376,714   367,225   390,243  
Other investments 16,614 16,508 14,927 12,896 12,214
Loans held for sale 23,876 — — 1,117 15,737
Total loans 899,785 962,743 1,057,963 1,137,255 1,183,426
Allowance for loan losses (17,430 ) (24,450 ) (23,514 ) (25,371 ) (26,888 )
Loans, net 882,355   938,293   1,034,449   1,111,884   1,156,538  
Premises and equipment 55,382 56,006 56,834 57,848 59,057
Goodwill and other intangibles 44,580 44,856 45,133 45,409 45,686
Deferred Tax Asset 11,373 8,452 6,659 4,854 5,932
Deferred Tax Asset Valuation Allowance (11,373 ) — — — —
Other assets 39,707   41,752   45,425   45,036   42,781  
Total assets $ 1,743,398   $ 1,826,254   $ 1,858,917   $ 1,857,755   $ 1,881,152  
 
Liabilities and Shareholders' Equity
Non-interest bearing deposits $ 383,167 $ 425,696 $ 419,517 $ 427,504 $ 416,547
Interest-bearing deposits 1,068,904   1,083,433   1,103,503   1,076,433   1,063,142  
Total deposits 1,452,071 1,509,129 1,523,020 1,503,937 1,479,689
Securities sold under agreements to repurchase 11,220 13,676 14,886 33,026 67,133
Short-term FHLB advances 27,500 27,500 27,500 27,500 40,000
Long-term FHLB advances — 6 10,011 10,016 10,021
Junior subordinated debentures 22,167 22,167 22,167 22,167 22,167
Other liabilities 8,450   12,325   12,661   10,272   8,127  
Total liabilities 1,521,408   1,584,803   1,610,245   1,606,918   1,627,137  
Total shareholders' equity 221,990   241,451   248,672   250,837   254,015  
Total liabilities and shareholders' equity $ 1,743,398   $ 1,826,254   $ 1,858,917   $ 1,857,755   $ 1,881,152  
 
 
MIDSOUTH BANCORP, INC. and SUBSIDIARIES        
Consolidated Statements of Operation (unaudited)
(in thousands except per share data)                
   
Three Months Ended   Twelve Months
12/31/2018 9/30/2018 6/30/2018 3/31/2018 12/31/2017 12/31/2018 12/31/2017
Interest income:
Loans, including fees $ 14,536 $ 14,590 $ 15,344 $ 16,015 $ 18,026 $ 60,485 $ 68,708
Investment securities 3,230 2,429 2,370 2,363 2,515 10,392 10,678
Other interest income 1,574   1,417   1,025   619   414   4,635   1,237  
Total interest income 19,340   18,436   18,739   18,997   20,955   75,512   80,623  
Interest expense:
Deposits 1,670 1,602 1,410 1,238 $ 1,097 5,920 4,099
Securities sold under agreement to repurchase 17 16 25 40 65 98 685
FHLB borrowings 135 81 120 129 122 465 412
Other borrowings 275   271   259   220   198   1,025   830  
Total interest expense 2,097   1,970   1,814   1,627   1,482   7,508   6,026  
Net interest income 17,243 16,466 16,925 17,370 19,472 68,004 74,597
Provision for loan losses 12,000   4,300   440   —   10,600   16,740   30,200  
Net interest income after provision for loan losses 5,243   12,166   16,485   17,370   8,872   51,264   44,397  
Noninterest income:
Service charges on deposit accounts 1,414 2,159 2,065 2,206 2,385 7,844 9,724
Gain (loss) on securities, net — — — — — — 347
Gain (Loss) on equity Securities, other investments 20 (16 ) (51 ) — — (47 ) —
ATM and debit card income 2,624 1,796 1,877 1,784 1,756 8,081 6,912
Other charges and fees 693   1,151   991   839   1,887   3,674   4,798  
Total noninterest income 4,751   5,090   4,882   4,829   6,028   19,552   21,781  
Noninterest expense:
Salaries and employee benefits 8,895 7,762 7,916 7,719 7,729 32,292 32,377
Occupancy expense 3,186 3,077 3,193 3,045 3,357 12,501 13,851
ATM and debit card 678 653 648 576 633 2,555 2,721
Legal and professional fees 3,457 2,543 1,100 1,689 1,448 8,789 3,319
FDIC premiums 302 360 507 430 297 1,599 1,572
Marketing 285 344 281 195 353 1,105 1,197
Corporate development 347 274 248 237 258 1,106 1,016
Data processing 828 730 666 665 712 2,889 2,640
Amortization of core deposit intangibles 276 277 276 277 276 1,106 1,106
Remediation expense 4,970 5,502 5,323 3,926 1,772 19,721 2,628
Other non-interest expense 1,469   2,005   2,115   3,114   9,109   8,703   18,110  
Total noninterest expense 24,693   23,527   22,273   21,873   25,944   92,366   80,537  
Earnings (loss) before income taxes (14,699 ) (6,271 ) (906 ) 326 (11,044 ) (21,550 ) (14,359 )
Income tax (benefit)/expense 7,610   (1,373 ) (237 ) (34 ) (540 ) 5,966   (2,598 )
Net (loss) earnings (22,309 ) (4,898 ) (669 ) 360 (10,504 ) (27,516 ) (11,761 )
Dividends on preferred stock 810   810   810   810   810   3,240   3,242  
Net (loss) earnings available to common shareholders $ (23,119 ) $ (5,708 ) $ (1,479 ) $ (450 ) $ (11,314 ) $ (30,756 ) $ (15,003 )
(Loss) earnings per common share, diluted $ (1.39 ) $ (0.34 ) $ (0.09 ) $ (0.03 ) $ (0.69 ) $ (1.85 ) $ (1.06 )
Operating (loss) earnings per common share, diluted (Non-GAAP)(*) $ (0.66 ) $ (0.08 ) $ 0.17   $ 0.21   $ (0.15 ) $ (0.37 )   $ (0.27 )
(*) See reconciliation of Non-GAAP financial measures.
 
 
MIDSOUTH BANCORP, INC. and SUBSIDIARIES      
Loans, Deposits and Asset Quality (unaudited)
(in thousands)                  
  December 30,   September 30,   June 30, March 31, December 30,
COMPOSITION OF LOANS 2018 2018 2018 2018 2017
Commercial, financial, and agricultural $ 267,340 $ 294,971 $ 354,944 $ 401,048 $ 435,207
Real estate - construction 89,621 90,444 98,108 94,679 90,287
Real estate - commercial 368,449 394,416 414,526 438,779 448,406
Real estate - residential 130,320 136,151 141,104 145,671 146,751
Consumer and other 43,506 46,169 48,649 56,386 62,043
Lease financing receivable 549   592   632   692   732  
Total loans $ 899,785   $ 962,743   $ 1,057,963   $ 1,137,255   $ 1,183,426  
 
December 30, September 30, June 31, March 31, December 31,
COMPOSITION OF DEPOSITS 2018 2018 2018 2018 2017
Noninterest bearing $ 383,167 $ 425,696 $ 419,517 $ 427,504 $ 416,547
NOW & other 400,625 442,487 461,726 459,394 434,646
Money market/savings 488,181 454,867 466,711 441,801 446,215
Time deposits of less than $100,000 121,703 125,363 111,758 113,665 116,309
Time deposits of $100,000 or more 58,395   60,716   63,308   61,573   65,972  
Total deposits $ 1,452,071   $ 1,509,129   $ 1,523,020   $ 1,503,937   $ 1,479,689  
 
December 30, September 30, June 30, March 31, December 31,
ASSET QUALITY DATA 2018 2018 2018 2018 2017
Nonaccrual loans $ 8,920 $ 51,476 $ 73,538 $ 82,275 $ 49,278
Loans past due 90 days and over and accruing —   7   3   1   728  
Total nonperforming loans 8,920 51,483 73,541 82,276 50,006
Nonperforming loans held for sale 20,441 — — 808 5,067
Other real estate 1,067 1,022 1,365 1,803 2,001
Other repossessed assets 55   —   —   194   192  
Total nonperforming assets $ 30,483 $ 52,505 $ 74,906 $ 85,081 $ 57,266
Troubled debt restructurings, accruing $ 1,334   $ 896   $ 1,010   $ 1,153   $ 1,360  
Nonperforming assets to total assets 1.75 % 2.88 % 4.03 % 4.58 % 3.04 %
Nonperforming assets to total loans 3.39 % 5.45 % 7.07 % 7.47 % 4.83 %
ALLL to nonperforming loans 195.40 % 47.49 % 31.97 % 30.84 % 53.77 %
ALLL to total loans 1.94 % 2.54 % 2.22 % 2.23 % 2.27 %
Quarter-to-date charge-offs 19,277 4,339 2,801 1,836 8,931
Quarter-to-date recoveries 258   974   505   319   166  
Quarter-to-date net charge-offs 19,019   3,365   2,296   1,517   8,765  
Annualized QTD net charge-offs to total loans 8.45 % 1.40 % 0.87 % 0.54 % 2.94 %
 
 
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,
2018

December 31,
2017

 
Total equity $ 221,990 $ 254,015
Less preferred equity 40,972   40,988  
Total common equity 181,018 213,027
Less goodwill 42,171 42,171
Less intangibles 2,409   3,515  
Tangible common equity $ 136,438   $ 167,341  
 
Total assets $ 1,743,398 $ 1,881,152
Less goodwill 42,171 42,171
Less intangibles 2,409   3,515  
Tangible assets $ 1,698,818   $ 1,835,466  
 
Tangible common equity to tangible assets 8.03 % 9.12 %
 
REGULATORY CAPITAL
 
Common equity tier 1 capital $ 137,991 $ 171,161
Tier 1 capital 201,130 233,648
Total capital 215,310 251,456
 
Regulatory capital ratios:
Common equity tier 1 capital ratio 12.20 % 12.10 %
Tier 1 risk-based capital ratio 17.79 % 16.51 %
Total risk-based capital ratio 19.04 % 17.77 %
Tier 1 leverage ratio 11.45 % 12.53 %
 
     
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, 2018 September 30, 2018 June 30, 2018 March 31, 2018 December 31, 2017
                   
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 $ 375,467 $ 2,950 3.14 % $ 347,205 $ 2,156 2.48 % $ 340,080 $ 2,093 2.46 % $ 334,419 $ 2,047 2.45 % $ 348,267 $ 2,161 2.48 %
Tax-exempt securities (*) 43,010   355   3.30 % 43,151   345   3.20 % 43,858   351   3.20 % 50,550   400   3.17 % 53,998   448   3.32 %
Total investment securities 418,477 3,305   3.16 % 390,356 2,501   2.56 % 383,938 2,444   2.54 % 384,969 2,447   2.54 % 402,265 2,609   2.59 %
Federal funds sold 5,878 33 2.25 % 7,250 32 1.77 % 5,008 21 1.63 % 4,978 18 1.45 % 4,441 15 1.32 %
Interest bearing deposits in other banks 208,001 1,364 2.62 % 250,349 1,279 2.04 % 201,281 912 1.79 % 132,940 514 1.55 % 94,394 314 1.30 %
Other investments 16,573 177 4.27 % 15,640 106 2.71 % 14,924 91 2.45 % 12,721 87 2.74 % 12,201 85 2.79 %
Loans 944,546   14,536   6.16 % 1,020,834   14,590   5.72 % 1,109,371   15,344   5.55 % 1,159,671   16,015   5.60 % 1,238,846   18,026   5.77 %
Total interest earning assets 1,593,475 19,415   4.87 % 1,684,429 18,508   4.40 % 1,714,522 18,812   4.39 % 1,695,279 19,081   4.56 % 1,752,147 21,049   4.81 %
Non-interest earning assets 198,515   146,405   146,384   164,791   155,588  
Total assets $ 1,791,990   $ 1,830,834   $ 1,860,906   $ 1,860,070   $ 1,907,735  
Interest-bearing liabilities:
Deposits $ 1,066,322 $ 1,670 0.63 % $ 1,083,404 $ 1,602 0.59 % $ 1,087,746 $ 1,409 0.52 % $ 1,071,484 $ 1,238 0.47 % $ 1,085,349 $ 1,097 0.40 %
Repurchase agreements 13,031 17 0.52 % 14,641 16 0.44 % 26,230 25 0.39 % 40,115 40 0.40 % 54,799 66 0.48 %
FHLB advances 27,500 135 1.96 % 29,139 81 1.11 % 37,514 120 1.28 % 38,741 129 1.33 % 40,281 122 1.21 %
Junior subordinated debentures 22,167   275   4.96 % 22,167 271   4.89 % 22,167 260   4.63 % 22,167 220   3.97 % 22,167   198   3.50 %
Total interest bearing liabilities 1,129,020   2,097   0.74 % 1,149,351 1,970   0.69 % 1,173,657 1,814   0.62 % 1,172,507 1,627   0.57 % 1,202,596 1,483   0.49 %
Non-interest bearing liabilities 419,202 431,486 435,971 447,460 435,766
Shareholders' equity 243,768   249,997   251,278   255,170   269,373
Total liabilities and shareholders' equity 1,791,990   1,830,834   1,860,906   1,875,137   1,907,735  
Net interest income (TE) and spread $ 17,318   4.13 % $ 16,538   3.71 % $ 16,998   3.77 % $ 17,454   3.99 % $ 19,566   4.32 %
Net interest margin 4.35 % 3.93 % 3.97 % 4.12 % 4.47 %

(*) Reflects taxable equivalent adjustments using the federal statutory tax rate of 21% and 35% (4Q17) in adjusting interest on tax-exempt securities to a fully taxable basis. The taxable equivalent adjustments included above amount to $75,000 for 4Q18 $72,000 for 3Q18, $74,000 for 2Q18, $84,000 for 1Q18, and $94,000 for 4Q17.

 
     
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Yearly Yield Analysis (unaudited)
(in thousands)
   
YIELD ANALYSIS Year Ended Year Ended
December 31, 2018 December 31, 2017
       
Tax Tax
Average Equivalent Yield/ Average Equivalent Yield/
Balance   Interest   Rate Balance   Interest   Rate
Taxable securities $ 354,153 $ 9,246 2.61 % $ 372,523 $ 9,180 2.46 %
Tax-exempt securities (*) 45,117   1,451   3.22 % 56,569   2,283   4.04 %
Total investment securities 399,270 10,697 2.68 % 429,092 11,463 2.67 %
Federal funds sold 5,785 104 1.80 % 3,979 43 1.08 %
Time and interest bearing deposits in other banks 197,329 4,069 2.06 % 71,754 854 1.19 %
Other investments 15,466 461 2.98 % 11,790 340 2.88 %
Loans 1,058,379   60,485   5.71 % 1,255,488   68,708   5.47 %
Total interest earning assets 1,676,229   75,816   4.52 % 1,772,103   81,408   4.59 %
Non-interest earning assets 159,409   157,435  
Total assets $ 1,835,638   $ 1,929,538  
Interest-bearing liabilities:
Deposits $ 1,075,302 $ 5,919 0.55 % $ 1,121,004 $ 4,099 0.37 %
Repurchase agreements 23,406 98 0.42 % 78,347 685 0.87 %
FHLB advances 33,182 466 1.40 % 30,691 412 1.34 %
Junior subordinated debentures 22,167   1,025   4.62 % 22,167   830   3.74 %
Total interest bearing liabilities 1,154,057   7,508   0.65 % 1,252,209   6,026   0.48 %
Non-interest bearing liabilities 431,559 431,326
Shareholders' equity 250,022   246,003  
Total liabilities and shareholders' equity 1,835,638   1,929,538  
Net interest income (TE) and spread $ 68,308   3.87 % $ 75,382   4.11 %
Net interest margin 4.08 % 4.25 %

(*) Reflects taxable equivalent adjustments using the federal statutory tax rate of 21% and 35% (2017) in adjusting interest on tax-exempt securities to a fully taxable basis. The taxable equivalent adjustments included above amount to $305,000 for 2018 $785,000 for 2017.

 
 
MIDSOUTH BANCORP, INC. and SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures (unaudited)
(in thousands except per share data)
         
 
 
Three Months Ended
December 31, September 30, June 30, March 31, December 31,
2018 2018 2018 2018 2017
TANGIBLE BOOK VALUE PER COMMON SHARE
 
Total shareholders' equity $

221,990

$ 241,451 $ 248,672 $ 250,837 $ 254,015
Less:
Preferred common shareholders' equity $ 40,972   $ 40,972   $ 40,987   $ 40,987   $ 40,987
Total common shareholders' equity

181,018

  200,479   207,685   209,850   213,028
 
Less:
Goodwill $ 42,171 $ 42,171 $ 42,171 $ 42,171 $ 42,171
Other intangible assets $ 2,409   $ 2,685   $ 2,962   $ 3,238   $ 3,515
Total tangible common shareholders' equity $

136,438

 

 

$ 155,623   $ 162,552   $ 164,441   $ 167,342
 
Period end number of shares $ 16,641,017 $ 16,641,105 $ 16,619,894 $ 16,621,811 $ 16,548,829
Book value per share (period end) $

10.88

$ 12.05 $ 12.50 $ 12.62 $ 12.87
Tangible book value per share (period end) $

8.20

$ 9.35 $ 9.78 $ 9.89 $ 10.11
 
 
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,
Adjusted Net Income 2018 2018 2018 2017 2017 2018 2017
Net (loss) income available to common shareholders' $ (23,119 ) $ (5,708 ) $ (1,479 ) $ (450 ) $ (11,314 ) $ (30,756 ) $ (15,003 )
Adjustment items:
Regulatory remediation costs 4,970 5,502 5,323 3,926 1,772 19,721 2,628
Loans held for sale expense — 4 20 963 6,030 987 6,030
Severance and retention expenses — — — — 171 — 1,512
Branch closure expenses — — — 145 — — 1,368
Discount accretion acceleration 726 — — — — 726 —
Tax effect of adjustments (1,196 )   (1,156 )   (1,122 )   (1,057 )   (2,762 )   (4,531 )   (4,038 )
After tax adjustment items 4,500 4,350 4,221 3,977 5,211 16,903 7,500
Tax expense adjustment items:
Attributable to valuation allowance on deferred tax 7,685 — — — — 7,685 —
Attributable to remeasurement of deferred taxes at reduced federal corporate tax rate —   —   —   —   3,595   —   — 3,595  
Adjusted net (loss) income $ (10,934 )   $ (1,358 )   $ 2,742     $ 3,527     $ (2,508 )   $ (6,168 )   $ (3,908 )
 
Weighted average number of shares - diluted 16,640,174 16,557,664 16,525,571 16,495,438 16,460,124 16,617,820 14,107,373
Net income (loss) per diluted share $ (1.39 ) $ (0.34 ) $ (0.09 ) $ (0.03 ) $ (0.69 ) $ (1.85 ) $ (1.06 )
Adjusted net income (loss) per diluted share $ (0.66 ) $ (0.08 ) $ 0.17 $ 0.21 $ (0.15 ) $ (0.37 ) $ (0.28 )
 
Average assets $ 1,791,990 $ 1,830,834 $ 1,860,906 $ 1,860,070 $ 1,907,735 $ 1,835,638 $ 1,929,538
Return on average assets (5.16 )% (1.25 )% (0.32 )% (0.10 )% (2.37 )% (1.68 )% (0.78 )%
Adjusted return on average assets (2.44 )% (0.30 )% 0.59 % 0.76 % (0.17 )% (0.34 )% (0.20 )%
 
Average common equity $ 202,796 $ 209,010 $ 210,291 $ 214,183 $ 228,386 $ 206,825 $ 246,003
Average tangible common equity $ 158,083 $ 164,020 $ 165,024 $ 168,629 $ 182,568 $ 161,697 $ 147,998
Adjusted return on average common equity (21.57 )% (2.60 )% 5.22 % 6.59 % (1.40 )% (2.98 )% (1.59 )%
Adjusted return on average tangible common equity (27.67 )% (3.31 )% 6.65 % 8.37 % (1.75 )% (3.81 )% (2.64 )%
 
 
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 September 30, June 30, March 31, December 31, December 31, December 31,
ADJUSTED EFFICIENCY RATIO (TE) 2018 2018 2018 2018 2017 2018 2017
 
Adjusted Noninterest Expense
Total Noninterest Expense $ 24,693 $ 23,527 $ 22,273 $ 21,873 $ 25,944 $ 92,366 $ 80,537
Adjustment items:

 

Regulatory remediation costs $ (4,970 ) $ (5,502 ) $ (5,323 ) $ (3,926 ) $ (1,772 ) $ (19,721 ) $ (2,628 )
Loans held for sale expense 4 (20 ) (963 ) (6,819 ) (979 ) (6,030 )
Severance and retention expenses — — — — (171 ) — (1,512 )
Discontinued Branch project expenses — — — — — — (465 )
Branch closure expenses —   —   —   (145 ) —   (145 ) (903 )
Adjusted noninterest expense $ 19,723   $ 18,029   $ 16,930   $ 16,839   $ 17,182   $ 71,521   $ 68,999  
 
Total Revenue
Net interest income $ 17,243 $ 16,466 $ 16,925 $ 17,370 $ 19,472 $ 68,003 $ 74,597
Noninterest income $ 4,751   $ 5,090   $ 4,882   $ 4,829   $ 6,028   $ 19,552   $ 21,781  
Total Revenue 21,994   21,556   21,807   22,199   25,500   87,555  

 

96,378  
 
Adjusted Total Revenue
Net interest income (TE) 17,318 16,538 16,998 17,454 19,566 68,308 75,382
Noninterest income 4,751   5,090   4,882   4,829   6,028   19,552   21,781  
Total Revenue (TE) 22,069   21,628   21,880   22,283   25,594   87,860   97,163  
Adjustment items
Gain on sale of securities — — — — — — (347 )
Gain on sale of branches —   —   —   —   (744 ) —   (744 )
Adjusted total revenue (TE) 22,069   21,628   21,880   22,283   24,850   87,860   96,072  
 
Efficiency ratio (GAAP) 112.27 % 109.14 % 102.14 % 98.53 % 101.74 % 105.49 % 83.56 %
 
Efficiency ratio (non-GAAP) 89.37 % 83.36 % 77.38 % 75.57 % 69.14 % 81.40 % 71.82 %