##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2005
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For
the transition period from _____ to _____
 COMMISSION FILE NUMBER 1-11826
 MIDSOUTH BANCORP, INC.
  Louisiana
(State of other jurisdiction of incorporation or organization)
    
    72 -1020809
(I.R.S. Employer Identification No.)
 102 Versailles Boulevard, Lafayette, Louisiana 70501
 (337) 237-8343
 þ o
 o þ
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##### Table of Contents



INDEX TO FORM 10-Q REPORT
 PagePART 1 - FINANCIAL INFORMATIONItem 1. Interim Financial Statements (Unaudited)Consolidated Statements of Condition as of June 30, 2005 and
December 31, 2004
    
    
    3Consolidated Statements of Income for the Three and Six Months
Ended June 30, 2005 and 2004
    
    
    4Consolidated Statement of Stockholders Equity for the
Six Months Ended June 30, 2005
    
    
    6Statements of Cash Flows for the Six Months Ended
June 30, 2005 and 2004
    
    
    7Notes to Consolidated Financial Statements
    
    
    8Item 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations
    
    
    10Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    22Item 4. Controls and Procedures
    
    
    22PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    22Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    23Item 3. Defaults upon Senior Securities
    
    
    23Item 4. Submission of Matters to a Vote of Security Holders
    
    
    23Item 5. Other Information
    
    
    23Item 6. Exhibits and Reports on Form 8-K
    
    
    24Signatures
    
    
    25Computation of earnings per shareCertification pursuant to Exchange Act Rules 13(a)-14(a)Certification pursuant to Exchange Act Rules 13(a)-14(a)Certification pursuant to Section 906Certification pursuant to Section 906
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MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CONDITION (UNAUDITED)
 June 30,
    
    December 31,2005
    
    2004ASSETSCash and due from banks
    
    $
    19,634,501
    
    
    $
    17,394,278Federal funds sold
    
    
    5,900,000Total cash and cash equivalents
    
    
    25,534,501
    
    
    
    17,394,278Interest bearing deposits in banks
    
    
    77,356
    
    
    
    2,572Securities available-for-sale, at fair value (cost of $133,341,288
at June 30, 2005 and $142,682,304 at December 31, 2004)
    
    
    133,259,190
    
    
    
    143,261,605Securities held-to-maturity (estimated fair value of $22,089,591
at June 30, 2005 and $24,170,815 at December 31, 2004)
    
    
    21,180,155
    
    
    
    22,851,772Loans, net of allowance for loan losses of $4,039,642
at June 30, 2005 and $3,850,636 at December 31, 2004
    
    
    405,990,708
    
    
    
    382,620,785Bank premises and equipment, net
    
    
    21,035,696
    
    
    
    19,338,275Other real estate owned, net
    
    
    97,846
    
    
    
    444,527Accrued interest receivable
    
    
    4,180,099
    
    
    
    3,880,475Goodwill
    
    
    9,269,506
    
    
    
    9,175,488Other assets
    
    
    11,268,088
    
    
    
    11,118,095Total assets
    
    $
    631,893,145
    
    
    $
    610,087,872LIABILITIES AND STOCKHOLDERS EQUITYDeposits:Non-interest bearing
    
    $
    130,525,117
    
    
    $
    124,659,052Interest bearing
    
    
    428,197,280
    
    
    
    405,723,740Total deposits
    
    
    558,722,397
    
    
    
    530,382,792Securities sold under repurchase
agreements and federal funds purchased
    
    
    2,353,945
    
    
    
    12,412,224Accrued interest payable
    
    
    790,936
    
    
    
    751,112Junior subordinated debenture
    
    
    15,465,000
    
    
    
    15,465,000Other liabilities
    
    
    3,038,250
    
    
    
    2,503,843Total liabilities
    
    
    580,370,528
    
    
    
    561,514,971Commitments and contingencies
    
    
    
    
    
    
    Stockholders Equity:Common stock, $.10 par value- 10,000,000 shares authorized,
4,509,867 and 4,487,135 issued and 4,466,301 and 4,454,256
outstanding at June 30, 2005 and December 31, 2004, respectively
    
    
    450,987
    
    
    
    448,713Surplus
    
    
    30,463,184
    
    
    
    30,247,142Unearned ESOP shares
    
    
    (56,336
    )
    
    
    (65,314
    )Unrealized (losses)gains on securities available-for-sale,
net of deferred taxes (benefit) of ($27,913) at June 30,
2005 and of $206,900 at December 31, 2004
    
    
    (54,185
    )
    
    
    372,402Treasury stock - 43,566 and 32,879 shares, at cost
    
    
    (1,040,809
    )
    
    
    (759,987
    )Retained earnings
    
    
    21,759,776
    
    
    
    18,329,945Total stockholders equity
    
    
    51,522,617
    
    
    
    48,572,901Total liabilities and stockholders equity
    
    $
    631,893,145
    
    
    $
    610,087,872
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MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
 
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004INTEREST INCOME:Loans, including fees
    
    $
    7,822,002
    
    
    $
    5,067,144
    
    
    $
    14,989,363
    
    
    $
    10,011,076SecuritiesTaxable
    
    
    798,944
    
    
    
    668,780
    
    
    
    1,546,971
    
    
    
    1,284,703Nontaxable
    
    
    651,690
    
    
    
    572,860
    
    
    
    1,308,171
    
    
    
    1,111,367Federal funds sold
    
    
    41,383
    
    
    
    31,326
    
    
    
    92,783
    
    
    
    51,584Other Interest Income
    
    
    18,507
    
    
    
    9,550
    
    
    
    32,887
    
    
    
    21,171TOTAL
    
    
    9,332,526
    
    
    
    6,349,660
    
    
    
    17,970,175
    
    
    
    12,479,901INTEREST EXPENSE:Deposits
    
    
    2,137,430
    
    
    
    1,077,513
    
    
    
    4,014,668
    
    
    
    1,972,712Securities sold under repurchase agreements,
federal funds purchased and advances
    
    
    40,880
    
    
    
    14,131
    
    
    
    101,531
    
    
    
    42,767Long term debt
    
    
    297,224
    
    
    
    184,033
    
    
    
    571,717
    
    
    
    357,000TOTAL
    
    
    2,475,534
    
    
    
    1,275,677
    
    
    
    4,687,916
    
    
    
    2,372,479NET INTEREST INCOME
    
    
    6,856,992
    
    
    
    5,073,983
    
    
    
    13,282,259
    
    
    
    10,107,422PROVISION FOR LOAN LOSSES
    
    
    65,737
    
    
    
    190,000
    
    
    
    379,737
    
    
    
    420,000NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES
    
    
    6,791,255
    
    
    
    4,883,983
    
    
    
    12,902,522
    
    
    
    9,687,422OTHER OPERATING INCOME:Service charges on deposits
    
    
    2,198,366
    
    
    
    1,523,232
    
    
    
    4,326,080
    
    
    
    2,926,218Gains on securities, net
    
    
    
    
    
    
    2,350
    
    
    
    385
    
    
    
    2,350Credit life insurance
    
    
    40,417
    
    
    
    24,248
    
    
    
    80,966
    
    
    
    44,421Other charges and fees
    
    
    931,558
    
    
    
    503,931
    
    
    
    2,185,452
    
    
    
    942,144TOTAL OTHER INCOME
    
    
    3,170,341
    
    
    
    2,053,761
    
    
    
    6,592,883
    
    
    
    3,915,133OTHER EXPENSES:Salaries and employee benefits
    
    
    3,304,873
    
    
    
    2,258,612
    
    
    
    6,507,625
    
    
    
    4,409,912Occupancy expense
    
    
    1,329,118
    
    
    
    990,987
    
    
    
    2,584,610
    
    
    
    1,971,580Other
    
    
    2,552,806
    
    
    
    1,319,603
    
    
    
    5,047,845
    
    
    
    2,585,290
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Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004TOTAL OTHER EXPENSES
    
    
    7,186,797
    
    
    
    4,569,202
    
    
    
    14,140,080
    
    
    
    8,966,782INCOME BEFORE INCOME TAXES
    
    
    2,774,799
    
    
    
    2,368,542
    
    
    
    5,355,325
    
    
    
    4,635,773PROVISION FOR INCOME TAXES
    
    
    734,546
    
    
    
    623,175
    
    
    
    1,391,649
    
    
    
    1,229,458NET INCOME
    
    $
    2,040,253
    
    
    $
    1,745,367
    
    
    $
    3,963,676
    
    
    $
    3,406,315EARNINGS PER SHAREBasic
    
    $
    0.42
    
    
    $
    0.40
    
    
    $
    0.81
    
    
    $
    0.77Diluted
    
    $
    0.40
    
    
    $
    0.38
    
    
    $
    0.78
    
    
    $
    0.74
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MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
 FOR THE SIX MONTHS ENDED JUNE 30, 2005 (UNAUDITED)
 UNREALIZEDGAINS (LOSSES)COMMON STOCK
    
    
    
    
    

    ESOP
    
    ON SECURITIES
    
    TREASURY
    
    RETAINEDSHARES
    
    AMOUNT
    
    SURPLUS
    
    OBLIGATION
    
    AFS, NET
    
    STOCK
    
    EARNINGS
    
    TOTALBalance  January 1, 2005
    
    
    4,487,135
    
    
    $
    448,713
    
    
    $
    30,247,142
    
    
    ($
    65,314
    )
    
    $
    372,402
    
    
    ($
    759,987
    )
    
    $
    18,329,945
    
    
    $
    48,572,901Dividends on
common stock, $.06 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (533,845
    )
    
    
    (533,845
    )Issuance of common stock
    
    
    22,732
    
    
    
    2,274
    
    
    
    107,978
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    110,252Tax benefit resulting from
exercise of stock options
    
    
    
    
    
    
    
    
    
    
    140,564
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    140,564Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (280,822
    )
    
    
    
    
    
    
    (280,822
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,963,676
    
    
    
    3,963,676Excess of market value over
book value of ESOP shares
released, net adjustment
    
    
    
    
    
    
    
    
    
    
    (32,500
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (32,500
    )ESOP obligation repayments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,978
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,978Net change in unrealized
gain/loss on securities
available-for-sale, net of
income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (426,587
    )
    
    
    
    
    
    
    
    
    
    
    (426,587
    )Balance  June 30, 2005
    
    
    4,509,867
    
    
    $
    450,987
    
    
    $
    30,463,184
    
    
    ($
    56,336
    )
    
    ($
    54,185
    )
    
    ($
    1,040,809
    )
    
    $
    21,759,776
    
    
    $
    51,522,617
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MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
 
 
 June 30,
    
    June 30,2005
    
    2004CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    3,963,676
    
    
    $
    3,406,315Adjustments to reconcile net income
to net cash provided by operating activities:Depreciation and amortization
    
    
    1,089,562
    
    
    
    754,153Provision for loan losses
    
    
    379,737
    
    
    
    420,000Deferred income taxes
    
    
    137,868
    
    
    
    57,899Amortization of premiums on securities, net
    
    
    489,389
    
    
    
    510,966Change in accrued interest receivable
    
    
    (299,624
    )
    
    
    (281,845
    )Change in accrued interest payable
    
    
    39,824
    
    
    
    45,942Other, net
    
    
    785,096
    
    
    
    (214,344
    )NET CASH PROVIDED BY OPERATING ACTIVITIES
    
    
    6,585,528
    
    
    
    4,699,086CASH FLOWS FROM INVESTING ACTIVITIES:Net (increase) decrease in interest-bearing deposits in banks
    
    
    (74,784
    )
    
    
    4,346Proceeds from sales of securities available-for-sale
    
    
    9,099,585Proceeds from maturities and calls of securities held-to-maturity
    
    
    920,000Proceeds from maturities and calls of securities available-for-sale
    
    
    18,284,749
    
    
    
    14,532,891Purchases of securities available-for-sale
    
    
    (17,780,705
    )
    
    
    (31,391,606
    )Loan originations, net of repayments
    
    
    (23,915,940
    )
    
    
    (17,817,065
    )Purchases of premises and equipment
    
    
    (2,743,467
    )
    
    
    (775,778
    )Proceeds from sales of other real estate owned
    
    
    455,726
    
    
    
    160,000NET CASH USED IN INVESTING ACTIVITIES
    
    
    (15,754,836
    )
    
    
    (35,287,212
    )CASH FLOWS FROM FINANCING ACTIVITIES:Net increase in deposits
    
    
    28,339,605
    
    
    
    56,791,901Net decrease in securities sold under repurchase
agreements, federal funds purchased, and FHLB borrowings
    
    
    (10,058,279
    )
    
    
    (13,408,833
    )Purchase/transfer of treasury stock
    
    
    (280,822
    )
    
    
    (335,726
    )Payment of dividends
    
    
    (801,225
    )
    
    
    (702,399
    )Issuance of common stock
    
    
    110,252
    
    
    
    104,599NET CASH PROVIDED BY FINANCING ACTIVITIES
    
    
    17,309,531
    
    
    
    42,449,542NET INCREASE IN CASH & CASH EQUIVALENTS
    
    
    8,140,223
    
    
    
    11,861,416CASH & CASH EQUIVALENTS AT BEGINNING OF PERIOD
    
    
    17,394,278
    
    
    
    13,833,857CASH & CASH EQUIVALENTS AT END OF PERIOD
    
    $
    25,534,501
    
    
    $
    25,695,273
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MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
 
  1.
    
    STATEMENT BY MANAGEMENT CONCERNING UNAUDITED FINANCIAL INFORMATIONThe accompanying unaudited consolidated financial statements and notes thereto contain all
adjustments, consisting only of normal recurring adjustments, necessary to present fairly, in
accordance with accounting principles generally accepted in the United States of America,
the financial position of MidSouth Bancorp, Inc. (MidSouth) and its subsidiaries as of
June 30, 2005 and the results of their operations and their cash flows for the periods
presented. These consolidated financial statements should be read in conjunction with the
annual consolidated financial statements and the notes thereto included in MidSouths 2004
annual report and Form 10K.The results of operations for the three and six month periods ended June 30, 2005 are not
necessarily indicative of the results to be expected for the entire year.MidSouth applies Accounting Practices Board (APB) Opinion No. 25 and related
interpretations in accounting for its stock options. Accordingly, no compensation cost
has been recognized. MidSouth has adopted the disclosure-only option under SFAS
No. 123. Had compensation costs for MidSouths stock options been determined
based on the fair value at the grant date, consistent with the method under SFAS No. 123,
MidSouths net income and earnings per share would have been as indicated below:
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,(in thousands):
    
    2005
    
    2004
    
    2005
    
    2004Net earnings available to
common stockholders
(in thousands):As reported
    
    $
    2,040
    
    
    $
    1,745
    
    
    $
    3,964
    
    
    $
    3,406Deduct total stock based
compensation determined
under fair value method
    
    
    (15
    )
    
    
    (20
    )
    
    
    (30
    )
    
    
    (33
    )Pro forma
    
    $
    2,025
    
    
    $
    1,725
    
    
    $
    3,934
    
    
    $
    3,373Basic earnings per share:As reported
    
    $
    0.42
    
    
    $
    0.40
    
    
    $
    0.81
    
    
    $
    0.77Pro forma
    
    $
    0.41
    
    
    $
    0.39
    
    
    $
    0.80
    
    
    $
    0.77Diluted earnings per share:As reported
    
    $
    0.40
    
    
    $
    0.38
    
    
    $
    0.78
    
    
    $
    0.74Pro forma
    
    $
    0.40
    
    
    $
    0.38
    
    
    $
    0.77
    
    
    $
    0.73
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2.
    
    ALLOWANCE FOR LOAN AND LOSSESAn analysis of the activity in the allowance for loan losses is as follows:
 Six Months EndedJune 30,(in thousands)
    
    2005
    
    2004Balance at beginning of period
    
    $
    3,851
    
    
    $
    2,790Provision for loan losses
    
    
    380
    
    
    
    420Recoveries
    
    
    119
    
    
    
    100Loans charged off
    
    
    (310
    )
    
    
    (336
    )Balance at end of period
    
    $
    4,040
    
    
    $
    2,974
 3.
    
    COMPREHENSIVE INCOMEComprehensive income includes net income and other comprehensive income (losses) which,
in the case of MidSouth, only includes unrealized gains and losses on securities available-for-sale.
Following is a summary of MidSouths comprehensive income for the three and six month
periods ended June 30, 2005 and 2004.
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,(in thousands)
    
    2005
    
    2004
    
    2005
    
    2004Net income
    
    $
    2,040
    
    
    $
    1,745
    
    
    $
    3,964
    
    
    $
    3,406Other comprehensive income (loss)Unrealized gains (losses) on securities
available-for-sale, net:Unrealized holding gains (losses)
arising during the period
    
    
    638
    
    
    
    (1,580
    )
    
    
    (427
    )
    
    
    (1,230
    )Less reclassification adjustment for
gains (losses) included in net
income
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    1Total other comprehensive gain (loss)
income
    
    
    638
    
    
    
    (1,581
    )
    
    
    (427
    )
    
    
    (1,231
    )Total comprehensive income
    
    $
    2,678
    
    
    $
    164
    
    
    $
    3,537
    
    
    $
    2,175
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Part 1. Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS
   Forward Looking Statements
  
 
 
 
 
 
 
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
 
 
 
 
 Critical Accounting Policies
  Results of Operations
    11




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Earnings Analysis
Net Interest Income
    12




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13




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Consolidated Average Balances, Interest and Rates
Taxable-equivalent basis (2)
(in thousands)
 Three Months Ended
    
    
    Three Months EndedJune 30, 2005
    
    
    June 30, 2004Average
    
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    AverageVolume
    
    
    Interest
    
    
    Yield/Rate
    
    
    Volume
    
    
    Interest
    
    
    Yield/RateASSETSInvestment Securities
    
    
    (1
    )Taxable
    
    
    
    
    
    $
    81,813
    
    
    $
    798
    
    
    
    3.92
    %
    
    $
    83,048
    
    
    $
    668
    
    
    
    3.24
    %Tax Exempt
    
    
    (2
    )
    
    
    74,786
    
    
    
    917
    
    
    
    4.90
    %
    
    
    64,629
    
    
    
    807
    
    
    
    5.01
    %Equity Securities
    
    
    
    
    
    
    2,592
    
    
    
    19
    
    
    
    2.86
    %
    
    
    1,717
    
    
    
    10
    
    
    
    2.24
    %Total Investments
    
    
    
    
    
    
    159,191
    
    
    
    1,734
    
    
    
    4.37
    %
    
    
    149,394
    
    
    
    1,485
    
    
    
    4.00
    %Federal Funds Sold and Securities
Purchased Under Agreements to Resell
    
    
    
    
    
    
    5,733
    
    
    
    41
    
    
    
    2.90
    %
    
    
    14,277
    
    
    
    31
    
    
    
    0.88
    %Loans
    
    
    (3
    )Commercial and Real Estate
    
    
    
    
    
    
    313,102
    
    
    
    6,009
    
    
    
    7.70
    %
    
    
    228,548
    
    
    
    3,990
    
    
    
    7.02
    %Installment
    
    
    
    
    
    
    88,479
    
    
    
    1,813
    
    
    
    8.22
    %
    
    
    43,718
    
    
    
    1,078
    
    
    
    10.03
    %Total Loans
    
    
    
    
    
    
    401,581
    
    
    
    7,822
    
    
    
    7.81
    %
    
    
    272,266
    
    
    
    5,068
    
    
    
    7.49
    %Total Earning Assets
    
    
    
    
    
    
    566,505
    
    
    
    9,597
    
    
    
    6.80
    %
    
    
    435,937
    
    
    
    6,584
    
    
    
    6.07
    %Allowance for Loan Losses
    
    
    
    
    
    
    (4,042
    )
    
    
    
    
    
    
    
    
    
    
    (2,839
    )Nonearning Assets
    
    
    
    
    
    
    60,632
    
    
    
    
    
    
    
    
    
    
    
    34,502Total Assets
    
    
    
    
    
    $
    623,095
    
    
    
    
    
    
    
    
    
    
    $
    467,600LIABILITIES AND STOCKHOLDERS EQUITYNOW, Money Market, and Savings
    
    
    
    
    
    $
    302,249
    
    
    $
    1,464
    
    
    
    1.94
    %
    
    $
    214,162
    
    
    $
    535
    
    
    
    1.00
    %Certificates of Deposits
    
    
    
    
    
    
    112,785
    
    
    
    673
    
    
    
    2.39
    %
    
    
    107,846
    
    
    
    543
    
    
    
    2.03
    %Total Interest Bearing Deposits
    
    
    
    
    
    
    415,034
    
    
    
    2,137
    
    
    
    2.07
    %
    
    
    322,008
    
    
    
    1,078
    
    
    
    1.35
    %Federal Funds Purchased, Securities Sold
Under Agreements to Repurchase
    
    
    
    
    
    
    5,040
    
    
    
    34
    
    
    
    2.73
    %
    
    
    4,937
    
    
    
    14
    
    
    
    1.15
    %Junior Subordinated Debentures
    
    
    
    
    
    
    15,465
    
    
    
    297
    
    
    
    7.71
    %
    
    
    7,217
    
    
    
    184
    
    
    
    10.23
    %Federal Home Loan Bank Advances
    
    
    
    
    
    
    915
    
    
    
    7
    
    
    
    2.87
    %
    
    
    0
    
    
    
    0
    
    
    
    0.00
    %Total Interest Bearing Liabilities
    
    
    
    
    
    
    436,454
    
    
    
    2,475
    
    
    
    2.28
    %
    
    
    334,162
    
    
    
    1,276
    
    
    
    1.53
    %Demand Deposits
    
    
    
    
    
    
    132,313
    
    
    
    
    
    
    
    
    
    
    
    96,727Other Liabilities
    
    
    
    
    
    
    4,014
    
    
    
    
    
    
    
    
    
    
    
    1,226Stockholders Equity
    
    
    
    
    
    
    50,314
    
    
    
    
    
    
    
    
    
    
    
    35,485Total Liabilities and Stockholders Equity
    
    
    
    
    
    $
    623,095
    
    
    
    
    
    
    
    
    
    
    $
    467,600NET TAXABLE-EQUIVALENTINTEREST INCOME AND SPREAD
    
    
    
    
    
    
    
    
    
    $
    7,122
    
    
    
    4.52
    %
    
    
    
    
    
    $
    5,308
    
    
    
    4.54
    %NET TAXABLE-EQUIVALENT YIELD ON EARNING ASSETS
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5.04
    %
    
    
    
    
    
    
    
    
    
    
    4.90
    %
 
 (1)
    
    Securities classified as available-for-sale are included in average balances
and interest income figures reflect interest earned on such securities.(2)
    
    Interest income of $264,925 for 2005 and $234,242 for 2004 is added to interest
earned on tax-exempt obligations to reflect tax equivalent yields using a 34% tax rate.(3)
    
    Interest income includes loan fees of $900,210 for 2005 and $478,905
for 2004. Nonaccrual loans are included in average balances
and income on such loans is recognized on a cash basis. 14




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##### Table of Contents



Changes in Taxable-Equivalent Net Interest Income
(in thousands)


Three Months EndedJune 30, 2005 compared to June 30, 2004Total
    
    ChangeIncrease
    
    Attributable to(Decrease)
    
    Volume
    
    RatesTaxable-equivalent interest earned on:Investment Securities
Taxable
    
    $
    130
    
    
    
    ($10
    )
    
    $
    140Tax Exempt
    
    
    110
    
    
    
    127
    
    
    
    (17
    )Equity Securities
    
    
    9
    
    
    
    6
    
    
    
    3Federal Funds Sold and Securities
Purchased Under Agreement to Resell
    
    
    10
    
    
    
    (4
    )
    
    
    14Loans, including fees
    
    
    2,754
    
    
    
    2,457
    
    
    
    297TOTAL
    
    
    3,013
    
    
    
    2,576
    
    
    
    437Interest Paid On:Interest Bearing Deposits
    
    
    1,059
    
    
    
    370
    
    
    
    689Federal Funds Purchased and Securities
Sold Under Agreement to Repurchase
    
    
    20
    
    
    
    
    
    
    
    20Federal Home Loan Bank Advances
    
    
    7
    
    
    
    7Junior Subordinated Debentures
    
    
    113
    
    
    
    144
    
    
    
    (31
    )TOTAL
    
    
    1,199
    
    
    
    521
    
    
    
    678Taxable-equivalent net interest income
    
    $
    1,814
    
    
    $
    2,055
    
    
    
    ($241
    )


NOTE:
    
    Changes due to both volume and rate has generally been allocated to volume
and rate changes in proportion to the relationship of the absolute dollar amounts
to the changes in each.


15



---



##### Table of Contents



Consolidated Average Balances, Interest and Rates
Taxable-equivalent basis (2)
(in thousands)
 Six Months Ended
    
    
    Six Months EndedJune 30, 2005
    
    
    June 30, 2004Average
    
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    AverageVolume
    
    
    Interest
    
    
    Yield/Rate
    
    
    Volume
    
    
    Interest
    
    
    Yield/RateASSETSInvestment Securities
    
    
    (1
    )Taxable
    
    
    
    
    
    $
    80,990
    
    
    $
    1,547
    
    
    
    3.85
    %
    
    $
    80,388
    
    
    $
    1,284
    
    
    
    3.21
    %Tax Exempt
    
    
    (2
    )
    
    
    75,165
    
    
    
    1,840
    
    
    
    4.90
    %
    
    
    61,522
    
    
    
    1,568
    
    
    
    5.13
    %Equity Securities
    
    
    
    
    
    
    2,603
    
    
    
    33
    
    
    
    2.55
    %
    
    
    1,917
    
    
    
    21
    
    
    
    2.22
    %Total Investments
    
    
    
    
    
    
    158,758
    
    
    
    3,420
    
    
    
    4.34
    %
    
    
    143,827
    
    
    
    2,873
    
    
    
    4.02
    %Federal Funds Sold and Securities
Purchased Under Agreements to Resell
    
    
    
    
    
    
    7,235
    
    
    
    93
    
    
    
    2.59
    %
    
    
    11,821
    
    
    
    52
    
    
    
    0.88
    %Loans
    
    
    (3
    )Commercial and Real Estate
    
    
    
    
    
    
    310,605
    
    
    
    11,539
    
    
    
    7.49
    %
    
    
    223,019
    
    
    
    7,868
    
    
    
    7.09
    %Installment
    
    
    
    
    
    
    85,267
    
    
    
    3,450
    
    
    
    8.16
    %
    
    
    43,396
    
    
    
    2,143
    
    
    
    9.93
    %Total Loans
    
    
    
    
    
    
    395,872
    
    
    
    14,989
    
    
    
    7.64
    %
    
    
    266,415
    
    
    
    10,011
    
    
    
    7.56
    %Total Earning Assets
    
    
    
    
    
    
    561,865
    
    
    
    18,502
    
    
    
    6.64
    %
    
    
    422,063
    
    
    
    12,936
    
    
    
    6.16
    %Allowance for Loan Losses
    
    
    
    
    
    
    (3,931
    )
    
    
    
    
    
    
    
    
    
    
    (2,802
    )Nonearning Assets
    
    
    
    
    
    
    61,527
    
    
    
    
    
    
    
    
    
    
    
    34,701Total Assets
    
    
    
    
    
    $
    619,461
    
    
    
    
    
    
    
    
    
    
    $
    453,962LIABILITIES AND STOCKHOLDERS EQUITYNOW, Money Market, and Savings
    
    
    
    
    
    $
    295,267
    
    
    $
    2,692
    
    
    
    1.84
    %
    
    $
    202,965
    
    
    $
    916
    
    
    
    0.91
    %Certificates of Deposits
    
    
    
    
    
    
    117,311
    
    
    
    1,323
    
    
    
    2.27
    %
    
    
    105,071
    
    
    
    1,057
    
    
    
    2.02
    %Total Interest Bearing Deposits
    
    
    
    
    
    
    412,578
    
    
    
    4,015
    
    
    
    1.96
    %
    
    
    308,036
    
    
    
    1,973
    
    
    
    1.29
    %Federal Funds Purchased, Securities Sold
Under Agreements to Repurchase
    
    
    
    
    
    
    6,105
    
    
    
    76
    
    
    
    2.51
    %
    
    
    5,755
    
    
    
    32
    
    
    
    1.12
    %Federal Home Loan Bank Advances
    
    
    
    
    
    
    1,869
    
    
    
    26
    
    
    
    2.76
    %
    
    
    1,978
    
    
    
    10
    
    
    
    1.09
    %Notes
Payable
Junior Subordinated Debentures
    
    
    
    
    
    
    15,465
    
    
    
    571
    
    
    
    7.45
    %
    
    
    7,217
    
    
    
    357
    
    
    
    9.95
    %Total Interest Bearing Liabilities
    
    
    
    
    
    
    436,017
    
    
    
    4,688
    
    
    
    2.17
    %
    
    
    322,986
    
    
    
    2,372
    
    
    
    1.48
    %Demand Deposits
    
    
    
    
    
    
    129,498
    
    
    
    
    
    
    
    
    
    
    
    95,254Other Liabilities
    
    
    
    
    
    
    4,077
    
    
    
    
    
    
    
    
    
    
    
    1,184Stockholders Equity
    
    
    
    
    
    
    49,869
    
    
    
    
    
    
    
    
    
    
    
    34,538Total Liabilities and Stockholders Equity
    
    
    
    
    
    $
    619,461
    
    
    
    
    
    
    
    
    
    
    $
    453,962NET TAXABLE-EQUIVALENTINTEREST INCOME AND SPREAD
    
    
    
    
    
    
    
    
    
    $
    13,814
    
    
    
    4.47
    %
    
    
    
    
    
    $
    10,564
    
    
    
    4.68
    %NET TAXABLE-EQUIVALENT YIELD ON EARNING ASSETS
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4.96
    %
    
    
    
    
    
    
    
    
    
    
    5.03
    %
 
 (1)
    
    Securities classified as available-for-sale are included in average balances
and interest income figures reflect interest earned on such securities.(2)
    
    Interest income of $531,574 for 2005 and $456,641 for 2004 is added to interest
earned on tax-exempt obligations to reflect tax equivalent yields using a 34% tax rate.(3)
    
    Interest income includes loan fees of $1,518,180 for 2005 and $931,314
for 2004. Nonaccrual loans are included in average balances
and income on such loans is recognized on a cash basis. 16




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##### Table of Contents



Changes in Taxable-Equivalent Net Interest Income
(in thousands)


Six Months EndedJune 30, 2005 compared to June 30, 2004Total
    
    ChangeIncrease
    
    Attributable to(Decrease)
    
    Volume
    
    RatesTaxable-equivalent interest earned on:Investment SecuritiesTaxable
    
    $
    263
    
    
    $
    10
    
    
    $
    253Tax Exempt
    
    
    272
    
    
    
    344
    
    
    
    (72
    )Equity Securities
    
    
    12
    
    
    
    9
    
    
    
    3Federal Funds Sold and Securities
Purchased Under Agreement to Resell
    
    
    41
    
    
    
    (10
    )
    
    
    51Loans, including fees
    
    
    4,978
    
    
    
    4,895
    
    
    
    83TOTAL
    
    
    5,566
    
    
    
    5,248
    
    
    
    318Interest Paid On:Interest Bearing Deposits
    
    
    2,042
    
    
    
    808
    
    
    
    1,234Federal Funds Purchased and Securities
Sold Under Agreement to Repurchase
    
    
    44
    
    
    
    2
    
    
    
    42Federal Home Loan Bank Advances
    
    
    16
    
    
    
    (1
    )
    
    
    17Notes Payable
Junior Subordinated Debentures
    
    
    214
    
    
    
    275
    
    
    
    (61
    )TOTAL
    
    
    2,316
    
    
    
    1,084
    
    
    
    1,232Taxable-equivalent net interest income
    
    $
    3,250
    
    
    $
    4,164
    
    
    
    ($914
    )


NOTE:
    
    Changes due to both volume and rate has generally been allocated to volume
and rate changes in proportion to the relationship of the absolute dollar amounts
to the changes in each.


17



---



##### Table of Contents



Non-interest Income  Excluding Securities Transactions
   Non-interest Expense
    18




---



##### Table of Contents



Analysis of Statement of Condition
  Liquidity
   Capital
  19




---



##### Table of Contents



Asset Quality
Credit Risk Management
  Nonperforming Assets and Loans Past Due 90 Days and Over
  Period Ended
    
    Year EndedJun. 30,
    
    Jun. 30,
    
    Dec. 31,2005
    
    2004
    
    2004Nonaccrual loans
    
    $
    1,892
    
    
    $
    1,003
    
    
    $
    472Loans past due 90
days and over
    
    
    128
    
    
    
    662
    
    
    
    488Total nonperforming loans
    
    
    2,020
    
    
    
    1,665
    
    
    
    960Other real estate owned
    
    
    98
    
    
    
    77
    
    
    
    445Other foreclosed assets
    
    
    156
    
    
    
    
    
    
    
    283Total nonperforming assets
    
    $
    2,274
    
    
    $
    1,742
    
    
    $
    1,688
 20




---



##### Table of Contents



Period Ended
    
    Year EndedJun. 30,
    
    Jun. 30,
    
    Dec. 31,2005
    
    2004
    
    2004Nonperforming assets to
total assets
    
    
    0.36
    %
    
    
    0.36
    %
    
    
    0.28
    %Nonperforming assets to
total loans + OREO + other
foreclosed assets
    
    
    0.55
    %
    
    
    0.62
    %
    
    
    0.44
    %ALL to nonperforming assets
    
    
    177.62
    %
    
    
    170.72
    %
    
    
    228.08
    %ALL to nonperforming loans
    
    
    199.95
    %
    
    
    178.62
    %
    
    
    401.04
    %ALL to total loans
    
    
    .99
    %
    
    
    1.06
    %
    
    
    1.00
    %Year-to-date charge-offs
    
    $
    310
    
    
    $
    336
    
    
    $
    1,067Year-to-date recoveries
    
    
    119
    
    
    
    100
    
    
    
    182Year-to-date net charge-offs
    
    $
    191
    
    
    $
    236
    
    
    $
    885Net YTD charge-offs to total loans
    
    
    0.05
    %
    
    
    0.08
    %
    
    
    0.23
    %
   Impact of Inflation and Changing Prices
  21




---



##### Table of Contents



Part I. Item 3. Qualitative and Quantitative Disclosures About Market Risk
   
 Part I. Item 4. Controls and Procedures
   
 Part II. Other Information
 
 Item 1. Legal Proceedings
  22




---



##### Table of Contents



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  Total Number of
    
    Maximum NumberTotal Number
    
    
    
    
    
    Shares Purchased
    
    of Shares That Mayof Shares
    
    Average Price Paid
    
    as Part of a Publicly
    
    Yet be PurchasedPurchased
    
    per Share
    
    Announced Plan1
    
    Under the Plan1April 2005
    
    
    3,341
    
    
    $
    22.64
    
    
    
    3,341
    
    
    
    194,384May 2005
    
    
    3,718
    
    
    $
    23.08
    
    
    
    3,718
    
    
    
    190,666June 2005
    
    
    275
    
    
    $
    22.45
    
    
    
    275
    
    
    
    190,391
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  23




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##### Table of Contents



Item 6. Exhibits and Reports on Form 8-K
 (a) Exhibits
 Exhibit Number
    
    Document Description3.1
    
    Amended and Restated Articles of Incorporation of MidSouth Bancorp, Inc. is included as
Exhibit 3.1 to MidSouths Report on Form 10-K for the year ended December 31, 1993 and is
incorporated herein by reference.3.2
    
    Articles of Amendment to Amended and Restated Articles of Incorporation dated July 19, 1995
are included as Exhibit 4.2 to MidSouths Registration Statement on Form S-8 filed September 20, 1995 and
are incorporated herein by reference.3.3
    
    Amended and Restated By-laws adopted by the Board of Directors on April 12, 1995 are included as Exhibit 3.2 to Amendment No. 1 to
MidSouths Registration Statement on Form S-4/A (Reg. No. 33-58499) filed
on June 1, 1995.11
    
    Computation of earnings per share31.1
    
    Certification pursuant to Exchange Act Rules 13(a)  14(a)31.2
    
    Certification pursuant to Exchange Act Rules 13(a)  14(a)32.1
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 (b) Reports Filed on Form 8-K
  24




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##### Table of Contents



Signatures
  MidSouth Bancorp, Inc.(Registrant)Date:
August 15, 2005
    

/s/   Teri S. StellyTeri S. Stelly, SVP/Chief Accounting Officer
 25