##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 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
    
    72 1020809(State of other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 102 Versailles Boulevard, Lafayette, Louisiana 70501
 (337) 237-8343
 þ o
 o þ




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INDEX TO FORM 10-Q REPORT
 PagePART 1
 FINANCIAL INFORMATIONItem 1. Interim Financial Statements (Unaudited)Consolidated Statements of Condition as of September 30, 2005 and
December 31, 2004 (audited)
    
    
    3Consolidated Statements of Income for the Three and Nine Months
Ended September 30, 2005 and 2004
    
    
    4Consolidated Statement of Stockholders Equity for the
Nine Months Ended September 30, 2005
    
    
    5Statements of Cash Flows for the Nine Months Ended
September 30, 2005 and 2004
    
    
    6Notes to Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations
    
    
    9Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    23Item 4. Controls and Procedures
    
    
    23PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    24Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    24Item 3. Defaults upon Senior Securities
    
    
    24Item 4. Submission of Matters to a Vote of Security Holders
    
    
    24Item 5. Other Information
    
    
    24Item 6. Exhibits and Reports on Form 8-K
    
    
    24Signatures
    
    
    26Computation of earnings per shareCertification pursuant to Exchange Act Rules 13a-14aCertification pursuant to Exchange Act Rules 13a-14aCertification pursuant to Section 906Certification pursuant to Section 906
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MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CONDITION
 September 30,
    
    
    December 31,2005
    
    
    2004(unaudited)
    
    
    (audited)ASSETSCash and due from banks
    
    $
    18,073,145
    
    
    $
    17,394,278Federal funds sold
    
    
    9,625,000
    
    
    
    Total cash and cash equivalents
    
    
    27,698,145
    
    
    
    17,394,278Interest bearing deposits in banks
    
    
    34,591
    
    
    
    2,572Securities available-for-sale, at fair value (cost of $134,719,280
at September 30, 2005 and $142,682,304 at December 31, 2004)
    
    
    133,917,557
    
    
    
    143,261,605Securities held-to-maturity (estimated fair value of $20,820,938
at September 30, 2005 and $24,170,815 at December 31, 2004)
    
    
    20,085,604
    
    
    
    22,851,772Loans, net of allowance for loan losses of $4,211,053
at September 30, 2005 and $3,850,636 at December 31, 2004
    
    
    430,267,192
    
    
    
    382,620,785Bank premises and equipment, net
    
    
    21,680,008
    
    
    
    19,338,275Other real estate owned, net
    
    
    111,079
    
    
    
    444,527Accrued interest receivable
    
    
    4,777,422
    
    
    
    3,880,475Goodwill
    
    
    9,386,649
    
    
    
    9,175,488Intangibles
    
    
    1,067,570
    
    
    
    1,468,370Other assets
    
    
    10,454,921
    
    
    
    9,649,725Total assets
    
    $
    659,480,738
    
    
    $
    610,087,872LIABILITIES AND STOCKHOLDERS EQUITYDeposits:Non-interest bearing
    
    $
    148,895,347
    
    
    $
    124,659,052Interest bearing
    
    
    437,508,892
    
    
    
    405,723,740Total deposits
    
    
    586,404,239
    
    
    
    530,382,792Securities sold under repurchase
agreements and federal funds purchased
    
    
    2,190,832
    
    
    
    12,412,224Accrued interest payable
    
    
    595,287
    
    
    
    751,112Junior subordinated debenture
    
    
    15,465,000
    
    
    
    15,465,000Other liabilities
    
    
    2,448,995
    
    
    
    2,503,843Total liabilities
    
    
    607,104,353
    
    
    
    561,514,971Commitments and contingencies
    
    
    
    
    
    
    Stockholders Equity:Common
stock, $.10 par value 10,000,000 shares authorized,
4,960,999 and 4,487,135 issued and 4,912,613 and 4,454,256
outstanding at Sept 30, 2005 and December 31, 2004,
respectively
    
    
    496,100
    
    
    
    448,713Surplus
    
    
    41,512,397
    
    
    
    30,247,142Unearned ESOP shares
    
    
    (51,797
    )
    
    
    (65,314
    )Accumulated other comprehensive income
    
    
    (529,137
    )
    
    
    372,402Treasury
stock  48,386 and 32,879 shares, at cost
    
    
    (1,055,379
    )
    
    
    (759,987
    )Retained earnings
    
    
    12,004,201
    
    
    
    18,329,945Total stockholders equity
    
    
    52,376,385
    
    
    
    48,572,901Total liabilities and stockholders equity
    
    $
    659,480,738
    
    
    $
    610,087,872
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MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004INTEREST INCOME:Loans, including fees
    
    $
    8,342,155
    
    
    $
    5,436,767
    
    
    $
    23,331,518
    
    
    $
    15,447,843SecuritiesTaxable
    
    
    759,500
    
    
    
    686,611
    
    
    
    2,306,471
    
    
    
    1,971,314Nontaxable
    
    
    706,266
    
    
    
    630,328
    
    
    
    2,014,437
    
    
    
    1,741,695Federal funds sold
    
    
    49,057
    
    
    
    47,034
    
    
    
    141,840
    
    
    
    98,618Other Interest Income
    
    
    25,433
    
    
    
    14,418
    
    
    
    58,320
    
    
    
    35,589TOTAL
    
    
    9,882,411
    
    
    
    6,815,158
    
    
    
    27,852,586
    
    
    
    19,295,059INTEREST EXPENSE:Deposits
    
    
    2,634,764
    
    
    
    1,230,361
    
    
    
    6,649,432
    
    
    
    3,203,073Securities sold under repurchase
agreements,
federal funds purchased and advances
    
    
    27,688
    
    
    
    17,015
    
    
    
    129,219
    
    
    
    59,782Long term debt
    
    
    295,362
    
    
    
    183,980
    
    
    
    867,079
    
    
    
    540,980TOTAL
    
    
    2,957,814
    
    
    
    1,431,356
    
    
    
    7,645,730
    
    
    
    3,803,835NET INTEREST INCOME
    
    
    6,924,597
    
    
    
    5,383,802
    
    
    
    20,206,856
    
    
    
    15,491,224PROVISION FOR LOAN LOSSES
    
    
    300,000
    
    
    
    250,000
    
    
    
    679,737
    
    
    
    670,000NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES
    
    
    6,624,597
    
    
    
    5,133,802
    
    
    
    19,527,119
    
    
    
    14,821,224OTHER OPERATING INCOME:Service charges on deposits
    
    
    2,088,513
    
    
    
    1,738,591
    
    
    
    6,414,593
    
    
    
    4,664,809Gains on securities, net
    
    
    
    
    
    
    130,100
    
    
    
    385
    
    
    
    132,450Credit life insurance
    
    
    40,602
    
    
    
    34,309
    
    
    
    121,568
    
    
    
    78,730Other charges and fees
    
    
    711,373
    
    
    
    473,310
    
    
    
    2,896,825
    
    
    
    1,415,454TOTAL OTHER INCOME
    
    
    2,840,488
    
    
    
    2,376,310
    
    
    
    9,433,371
    
    
    
    6,291,443OTHER EXPENSES:Salaries and employee benefits
    
    
    3,653,280
    
    
    
    2,419,190
    
    
    
    10,160,905
    
    
    
    6,829,102Occupancy expense
    
    
    1,462,505
    
    
    
    1,030,877
    
    
    
    4,047,115
    
    
    
    3,002,457Other
    
    
    2,203,097
    
    
    
    1,483,944
    
    
    
    7,250,942
    
    
    
    4,069,234TOTAL OTHER EXPENSES
    
    
    7,318,882
    
    
    
    4,934,011
    
    
    
    21,458,962
    
    
    
    13,900,793INCOME BEFORE INCOME TAXES
    
    
    2,146,203
    
    
    
    2,576,101
    
    
    
    7,501,528
    
    
    
    7,211,874PROVISION FOR INCOME TAXES
    
    
    512,315
    
    
    
    621,985
    
    
    
    1,903,964
    
    
    
    1,851,443NET INCOME
    
    $
    1,633,888
    
    
    $
    1,954,116
    
    
    $
    5,597,564
    
    
    $
    5,360,431EARNINGS PER SHAREBasic
    
    $
    0.33
    
    
    $
    0.45
    
    
    $
    1.14
    
    
    $
    1.22Diluted
    
    $
    0.32
    
    
    $
    0.43
    
    
    $
    1.10
    
    
    $
    1.17
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MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (828,722
    )
    
    
    (828,722
    )Issuance of common stock
    
    
    23,297
    
    
    
    2,330
    
    
    
    118,302
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    120,632Stock dividend 10%
    
    
    450,567
    
    
    
    45,057
    
    
    
    11,038,889
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,083,946
    )Cash in lieu resulting from stock div
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,640
    )
    
    
    (10,640
    )Tax benefit resulting from
exercise of stock options
    
    
    
    
    
    
    
    
    
    
    140,564
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    140,564Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (295,392
    )
    
    
    
    
    
    
    (295,392
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,597,564
    
    
    
    5,597,564Excess of market value over
book value of ESOP shares
released, net adjustment
    
    
    
    
    
    
    
    
    
    
    (32,500
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (32,500
    )ESOP obligation repayments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,517
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,517Net change in unrealized
gain/loss on securities
available-for-sale, net of
income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (901,539
    )
    
    
    
    
    
    
    
    
    
    
    (901,539
    )Balance  September 30, 2005
    
    
    4,960,999
    
    
    $
    496,100
    
    
    $
    41,512,397
    
    
    ($
    51,797
    )
    
    ($
    529,137
    )
    
    ($
    1,055,379
    )
    
    $
    12,004,201
    
    
    $
    52,376,385
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MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
 
 
 September 30,
    
    
    September 30,2005
    
    
    2004CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    5,597,564
    
    
    $
    5,360,431Adjustments to reconcile net income
to net cash provided by operating activities:Depreciation and amortization
    
    
    1,573,702
    
    
    
    1,132,575Provision for loan losses
    
    
    679,737
    
    
    
    670,000Deferred income taxes
    
    
    56,699
    
    
    
    55,720Amortization of premiums on securities, net
    
    
    669,026
    
    
    
    774,959Gain on sale of securities, net
    
    
    (385
    )
    
    
    (132,450
    )Loss/(gain) on sale of other real estate owned
    
    
    65,950
    
    
    
    (45,823
    )Change in accrued interest receivable
    
    
    (896,947
    )
    
    
    (341,337
    )Change in accrued interest payable
    
    
    (155,825
    )
    
    
    (152,602
    )Other, net
    
    
    287,816
    
    
    
    76,643NET CASH PROVIDED BY OPERATING ACTIVITIES
    
    
    7,877,337
    
    
    
    7,398,116CASH FLOWS FROM INVESTING ACTIVITIES:Net increase in interest-bearing deposits in banks
    
    
    (32,019
    )
    
    
    (4,012
    )Proceeds from sales of securities available-for-sale
    
    
    9,099,585
    
    
    
    403,600Proceeds from maturities and calls of securities held-to-maturity
    
    
    1,973,244
    
    
    
    Proceeds from maturities and calls of securities available-for-sale
    
    
    26,958,865
    
    
    
    29,618,961Purchases of securities available-for-sale
    
    
    (27,971,143
    )
    
    
    (47,469,321
    )Loan originations, net of repayments
    
    
    (48,501,118
    )
    
    
    (33,160,442
    )Purchases of premises and equipment
    
    
    (4,102,047
    )
    
    
    (1,651,966
    )Proceeds from sales of other real estate owned
    
    
    455,726
    
    
    
    651,246NET CASH USED IN INVESTING ACTIVITIES
    
    
    (42,118,907
    )
    
    
    (51,611,934
    )CASH FLOWS FROM FINANCING ACTIVITIES:Net increase in deposits
    
    
    56,021,447
    
    
    
    69,361,391Net decrease in securities sold under repurchase
agreements, federal funds purchased, and FHLB borrowings
    
    
    (10,221,392
    )
    
    
    (12,354,541
    )Issuance of junior subordinated debentures
    
    
    
    
    
    
    8,000,000Purchase/transfer of treasury stock
    
    
    (295,392
    )
    
    
    (639,790
    )Payment of dividends
    
    
    (1,069,218
    )
    
    
    (894,442
    )Exercise of stock options
    
    
    120,632
    
    
    
    122,779Cash for fractional shares
    
    
    (10,640
    )
    
    
    NET CASH PROVIDED BY FINANCING ACTIVITIES
    
    
    44,545,437
    
    
    
    63,595,397NET INCREASE IN CASH & CASH EQUIVALENTS
    
    
    10,303,867
    
    
    
    19,381,579CASH & CASH EQUIVALENTS AT BEGINNING OF PERIOD
    
    
    17,394,278
    
    
    
    13,833,857CASH & CASH EQUIVALENTS AT END OF PERIOD
    
    $
    27,698,145
    
    
    $
    33,215,436
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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. (the Company) and its subsidiaries as of
September 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 the Companys 2004
annual report and Form 10K.The results of operations for the three and nine month period
ended September 30, 2005
are not necessarily indicative of the results to be expected for the entire year.The Company applies Accounting Practices Board (APB) Opinion No. 25 and related
interpretations in accounting for its stock options. Accordingly, no compensation cost
has been recognized. The Company has adopted the disclosure-only option under SFAS
No. 123. Had compensation costs for the Companys stock options been determined
based on the fair value at the grant date, consistent with the method under SFAS No. 123,
the Companys net income and earnings per share would have been as indicated below:
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004(in thousands):Net earnings available to
common stockholders
(in thousands):As reported
    
    $
    1,634
    
    
    $
    1,954
    
    
    $
    5,598
    
    
    $
    5,360Deduct total stock based
compensation determined
under fair value method
    
    
    15
    
    
    
    20
    
    
    
    45
    
    
    
    53Pro forma
    
    $
    1,619
    
    
    $
    1,934
    
    
    $
    5,553
    
    
    $
    5,307Basic earnings per share:As reported
    
    $
    0.33
    
    
    $
    0.45
    
    
    $
    1.14
    
    
    $
    1.22Pro forma
    
    $
    0.33
    
    
    $
    0.45
    
    
    $
    1.13
    
    
    $
    1.21Diluted earnings per share:As reported
    
    $
    0.32
    
    
    $
    0.43
    
    
    $
    1.10
    
    
    $
    1.17Pro forma
    
    $
    0.32
    
    
    $
    0.42
    
    
    $
    1.09
    
    
    $
    1.16
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2.
    
    ALLOWANCE FOR LOAN AND LOSSESAn analysis of the activity in the allowance for loan losses is as follows:
 Nine Months EndedSeptember 30,2005
    
    
    2004(in thousands)Balance at beginning of period
    
    $
    3,851
    
    
    $
    2,790Provision for loan losses
    
    
    680
    
    
    
    670Recoveries
    
    
    162
    
    
    
    133Loans charged off
    
    
    (482
    )
    
    
    (644
    )Balance at end of period
    
    $
    4,211
    
    
    $
    2,949
 3.
    
    COMPREHENSIVE INCOMEComprehensive income includes net income and other comprehensive income (losses) which,
in the case of the Company, only includes unrealized gains and losses on securities
available-for-sale.
Following is a summary of the Companys comprehensive income for the three and nine month
periods ended September 30, 2005 and 2004.
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(in thousands)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Net income
    
    $
    1,634
    
    
    $
    1,954
    
    
    $
    5,598
    
    
    $
    5,360Other comprehensive income, net of tax:Unrealized gains (losses) on securities
available-for-sale:Unrealized holding gains (losses) arising during the period, net of
income tax (benefit) of $264, $589, $(465), and $(45),
respectively
    
    
    512
    
    
    
    1,230
    
    
    
    (902
    )
    
    
    (1
    )Reclassification adjustment for gains included in net income, net of
income tax (benefit) of $0, $45, $0, and $45, respectively
    
    
    
    
    
    
    (86
    )
    
    
    
    
    
    
    (87
    )Other comprehensive income (loss)
    
    
    512
    
    
    
    1,144
    
    
    
    (902
    )
    
    
    (88
    )Total comprehensive income
    
    $
    2,146
    
    
    $
    3,098
    
    
    $
    4,696
    
    
    $
    5,272
 In December 2004, the FASB issued Statement 123R, Share-Based Payment, an Amendment
of FASB
Statement No. 123, which will require all companies to measure compensation cost for all
share-based
payments (including employee stock options) at fair value, and will be effective for public
companies for
annual periods beginning after June 15, 2005. This Statement will eliminate the ability to
account for
stock-based compensation transactions using APB 25 and, generally, will require instead that
such
transactions be accounted for using a fair-value based method. Had the Company adopted SFAS
No. 123R
in prior periods, the impact of the standard would have approximated the impact of SFAS No.
123 as
described in the disclosure of pro-forma net income and earnings per share as set forth above.
The Company
will be required to begin expensing stock options in the first quarter of the year ended
December 31, 2006.4.
    
    STOCK DIVIDENDDuring the third quarter of 2005, the Company declared a 10%
stock dividend on common stock
to holders of record on July 29, 2005 and payable on August 19, 2005.
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Part 1. Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS
   Forward Looking Statements
         9




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Critical Accounting Policies
  Results of Operations
    10




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Earnings Analysis
Net Interest Income
  11




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Consolidated Average Balances, Interest and Rates
Taxable-equivalent basis (2)
(in thousands)
 Three Months Ended
    
    
    Three Months EndedSeptember 30, 2005
    
    
    September 30, 2004Average
    
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    AverageVolume
    
    
    Interest
    
    
    Yield/Rate
    
    
    Volume
    
    
    Interest
    
    
    Yield/RateASSETSInvestment Securities
    
    
    (1
    )Taxable
    
    
    
    
    
    $
    77,891
    
    
    $
    766
    
    
    
    3.93
    %
    
    $
    81,118
    
    
    $
    687
    
    
    
    3.39
    %Tax Exempt
    
    
    (2
    )
    
    
    78,697
    
    
    
    987
    
    
    
    5.02
    %
    
    
    72,134
    
    
    
    887
    
    
    
    4.92
    %Equity Securities
    
    
    
    
    
    
    2,686
    
    
    
    25
    
    
    
    3.79
    %
    
    
    1,595
    
    
    
    14
    
    
    
    3.62
    %Total Investments
    
    
    
    
    
    
    159,274
    
    
    
    1,778
    
    
    
    4.46
    %
    
    
    154,847
    
    
    
    1,588
    
    
    
    4.10
    %Federal Funds Sold and Securities
Purchased Under Agreements to Resell
    
    
    
    
    
    
    5,926
    
    
    
    49
    
    
    
    3.28
    %
    
    
    14,071
    
    
    
    47
    
    
    
    1.33
    %Loans
    
    
    (3
    )Commercial and Real Estate
    
    
    
    
    
    
    327,941
    
    
    
    6,418
    
    
    
    7.77
    %
    
    
    239,762
    
    
    
    4,305
    
    
    
    7.14
    %Installment
    
    
    
    
    
    
    94,646
    
    
    
    1,924
    
    
    
    8.06
    %
    
    
    45,078
    
    
    
    1,132
    
    
    
    9.96
    %Total Loans
    
    
    
    
    
    
    422,587
    
    
    
    8,342
    
    
    
    7.83
    %
    
    
    284,840
    
    
    
    5,437
    
    
    
    7.59
    %Total Earning Assets
    
    
    
    
    
    
    587,787
    
    
    
    10,169
    
    
    
    6.86
    %
    
    
    453,758
    
    
    
    7,072
    
    
    
    6.20
    %Allowance for Loan Losses
    
    
    
    
    
    
    (4,073
    )
    
    
    
    
    
    
    
    
    
    
    (2,847
    )Nonearning Assets
    
    
    
    
    
    
    66,505
    
    
    
    
    
    
    
    
    
    
    
    33,106Total Assets
    
    
    
    
    
    $
    650,219
    
    
    
    
    
    
    
    
    
    
    $
    484,017LIABILITIES AND STOCKHOLDERS EQUITYNOW, Money Market, and Savings
    
    
    
    
    
    $
    320,864
    
    
    $
    1,811
    
    
    
    2.24
    %
    
    $
    231,592
    
    
    $
    711
    
    
    
    1.22
    %Certificates of Deposits
    
    
    
    
    
    
    117,194
    
    
    
    824
    
    
    
    2.79
    %
    
    
    103,494
    
    
    
    520
    
    
    
    2.00
    %Total Interest Bearing Deposits
    
    
    
    
    
    
    438,058
    
    
    
    2,635
    
    
    
    2.39
    %
    
    
    335,086
    
    
    
    1,231
    
    
    
    1.46
    %Federal Funds Purchased, Securities Sold
Under Agreements to Repurchase
    
    
    
    
    
    
    2,895
    
    
    
    24
    
    
    
    3.28
    %
    
    
    4,935
    
    
    
    17
    
    
    
    1.37
    %Junior Subordinated Debentures
    
    
    
    
    
    
    15,465
    
    
    
    295
    
    
    
    7.58
    %
    
    
    9,279
    
    
    
    184
    
    
    
    7.89
    %Federal Home Loan Bank Advances
    
    
    
    
    
    
    389
    
    
    
    4
    
    
    
    3.83
    %Total Interest Bearing Liabilities
    
    
    
    
    
    
    456,807
    
    
    
    2,958
    
    
    
    2.57
    %
    
    
    349,300
    
    
    
    1,432
    
    
    
    1.63
    %Demand Deposits
    
    
    
    
    
    
    136,696
    
    
    
    
    
    
    
    
    
    
    
    98,890Other Liabilities
    
    
    
    
    
    
    4,903
    
    
    
    
    
    
    
    
    
    
    
    1,214Stockholders Equity
    
    
    
    
    
    
    51,813
    
    
    
    
    
    
    
    
    
    
    
    34,613Total Liabilites and Stockholders Equity
    
    
    
    
    
    $
    650,219
    
    
    
    
    
    
    
    
    
    
    $
    484,017NET TAXABLE-EQUIVALENT
INTEREST INCOME AND SPREAD
    
    
    
    
    
    
    
    
    
    $
    7,211
    
    
    
    4.29
    %
    
    
    
    
    
    $
    5,640
    
    
    
    4.57
    %NET TAXABLE-EQUIVALENT YIELD ON EARNING ASSETS
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4.87
    %
    
    
    
    
    
    
    
    
    
    
    4.94
    %
 
 (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 $286,350 for 2005 and $256,405 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 $752,394 for 2005 and $532,840 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 EndedSept 30, 2005 compared to Sept 30, 2004Total
    
    
    ChangeIncrease
    
    
    Attributable to(Decrease)
    
    
    Volume
    
    
    RatesTaxable-equivalent interest earned on:Investment SecuritiesTaxable
    
    $
    79
    
    
    ($
    28
    )
    
    $
    107Tax Exempt
    
    
    100
    
    
    
    82
    
    
    
    18Equity Securities
    
    
    11
    
    
    
    10
    
    
    
    1Federal Funds Sold and SecuritiesPurchased Under Agreement to Resell
    
    
    2
    
    
    
    (1
    )
    
    
    3Loans, including fees
    
    
    2,905
    
    
    
    2,714
    
    
    
    191TOTAL
    
    
    3,097
    
    
    
    2,777
    
    
    
    320Interest Paid On:Interest Bearing Deposits
    
    
    1,404
    
    
    
    456
    
    
    
    948Federal Funds Purchased and SecuritiesSold Under Agreement to Repurchase
    
    
    7
    
    
    
    (3
    )
    
    
    10Federal Home Loan Bank Advances
    
    
    4
    
    
    
    4
    
    
    
    0Junior Subordinated Debentures
    
    
    111
    
    
    
    118
    
    
    
    (7
    )TOTAL
    
    
    1,526
    
    
    
    575
    
    
    
    951Taxable-equivalent net interest income
    
    $
    1,571
    
    
    $
    2,202
    
    
    ($
    631
    )
 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




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##### Table of Contents



Consolidated Average Balances, Interest and Rates
Taxable-equivalent basis (2)
(in thousands)
 Nine Months Ended
    
    
    Nine Months EndedSeptember 30, 2005
    
    
    September 30, 2004Average
    
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    AverageVolume
    
    
    Interest
    
    
    Yield/Rate
    
    
    Volume
    
    
    Interest
    
    
    Yield/RateASSETSInvestment Securities
    
    
    (1
    )Taxable
    
    
    
    
    
    $
    79,718
    
    
    $
    2,306
    
    
    
    3.86
    %
    
    $
    80,633
    
    
    $
    1,971
    
    
    
    3.26
    %Tax Exempt
    
    
    (2
    )
    
    
    76,583
    
    
    
    2,835
    
    
    
    4.94
    %
    
    
    65,085
    
    
    
    2,454
    
    
    
    5.03
    %Equity Securities
    
    
    
    
    
    
    2,631
    
    
    
    58
    
    
    
    2.96
    %
    
    
    1,809
    
    
    
    36
    
    
    
    2.62
    %Total Investments
    
    
    
    
    
    
    158,932
    
    
    
    5,199
    
    
    
    4.36
    %
    
    
    147,527
    
    
    
    4,461
    
    
    
    4.03
    %Federal Funds Sold and Securities
Purchased Under Agreements to Resell
    
    
    
    
    
    
    6,801
    
    
    
    142
    
    
    
    2.79
    %
    
    
    12,577
    
    
    
    99
    
    
    
    1.05
    %Loans
    
    
    (3
    )Commercial and Real Estate
    
    
    
    
    
    
    316,447
    
    
    
    17,958
    
    
    
    7.59
    %
    
    
    228,641
    
    
    
    12,173
    
    
    
    7.11
    %Installment
    
    
    
    
    
    
    88,428
    
    
    
    5,374
    
    
    
    8.13
    %
    
    
    43,960
    
    
    
    3,275
    
    
    
    9.95
    %Total Loans
    
    
    
    
    
    
    404,875
    
    
    
    23,332
    
    
    
    7.70
    %
    
    
    272,601
    
    
    
    15,448
    
    
    
    7.57
    %Total Earning Assets
    
    
    
    
    
    
    570,608
    
    
    
    28,673
    
    
    
    6.72
    %
    
    
    432,705
    
    
    
    20,008
    
    
    
    6.18
    %Allowance for Loan Losses
    
    
    
    
    
    
    (3,979
    )
    
    
    
    
    
    
    
    
    
    
    (2,818
    )Nonearning Assets
    
    
    
    
    
    
    63,202
    
    
    
    
    
    
    
    
    
    
    
    34,170Total Assets
    
    
    
    
    
    $
    629,831
    
    
    
    
    
    
    
    
    
    
    $
    464,057LIABILITIES AND STOCKHOLDERS EQUITYNOW, Money Market, and Savings
    
    
    
    
    
    $
    303,893
    
    
    $
    4,502
    
    
    
    1.98
    %
    
    $
    212,472
    
    
    $
    1,626
    
    
    
    1.02
    %Certificates of Deposits
    
    
    
    
    
    
    117,271
    
    
    
    2,147
    
    
    
    2.45
    %
    
    
    104,542
    
    
    
    1,577
    
    
    
    2.02
    %Total Interest Bearing Deposits
    
    
    
    
    
    
    421,164
    
    
    
    6,649
    
    
    
    2.11
    %
    
    
    317,014
    
    
    
    3,203
    
    
    
    1.35
    %Federal Funds Purchased, Securities Sold
Under Agreements to Repurchase
    
    
    
    
    
    
    5,091
    
    
    
    102
    
    
    
    2.67
    %
    
    
    5,479
    
    
    
    49
    
    
    
    1.20
    %Federal Home Loan Bank Advances
    
    
    
    
    
    
    1,310
    
    
    
    28
    
    
    
    2.81
    %
    
    
    1,314
    
    
    
    11
    
    
    
    1.09
    %Notes PayableJunior Subordinated Debentures
    
    
    
    
    
    
    15,465
    
    
    
    867
    
    
    
    7.50
    %
    
    
    8,041
    
    
    
    541
    
    
    
    8.99
    %Total Interest Bearing Liabilities
    
    
    
    
    
    
    443,030
    
    
    
    7,646
    
    
    
    2.31
    %
    
    
    331,848
    
    
    
    3,804
    
    
    
    1.53
    %Demand Deposits
    
    
    
    
    
    
    131,923
    
    
    
    
    
    
    
    
    
    
    
    96,476Other Liabilities
    
    
    
    
    
    
    4,354
    
    
    
    
    
    
    
    
    
    
    
    1,181Stockholders Equity
    
    
    
    
    
    
    50,524
    
    
    
    
    
    
    
    
    
    
    
    34,552Total Liabilites and Stockholders Equity
    
    
    
    
    
    $
    629,831
    
    
    
    
    
    
    
    
    
    
    $
    464,057NET TAXABLE-EQUIVALENT
INTEREST INCOME AND SPREAD
    
    
    
    
    
    
    
    
    
    $
    21,027
    
    
    
    4.41
    %
    
    
    
    
    
    $
    16,204
    
    
    
    4.65
    %NET TAXABLE-EQUIVALENT YIELD ON EARNING ASSETS
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4.93
    %
    
    
    
    
    
    
    
    
    
    
    5.00
    %
 
 (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 $820,322 for 2005 and $712,336 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 $2,270,575 for 2005 and $1,466,509 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)
 Nine Months EndedSept 30, 2005 compared to Sept 30, 2004Total
    
    
    ChangeIncrease
    
    
    Attributable to(Decrease)
    
    
    Volume
    
    
    RatesTaxable-equivalent interest earned on:Investment SecuritiesTaxable
    
    $
    335
    
    
    
    ($22
    )
    
    $
    357Tax Exempt
    
    
    381
    
    
    
    423
    
    
    
    (42
    )Equity Securities
    
    
    22
    
    
    
    18
    
    
    
    4Federal Funds Sold and SecuritiesPurchased Under Agreement to Resell
    
    
    43
    
    
    
    (16
    )
    
    
    59Loans, including fees
    
    
    7,884
    
    
    
    7,627
    
    
    
    257TOTAL
    
    
    8,665
    
    
    
    8,030
    
    
    
    635Interest Paid On:Interest Bearing Deposits
    
    
    3,446
    
    
    
    1,271
    
    
    
    2,175Federal Funds Purchased and SecuritiesSold Under Agreement to Repurchase
    
    
    53
    
    
    
    (3
    )
    
    
    56Federal Home Loan Bank Advances
    
    
    17
    
    
    
    
    
    
    
    17Notes Payable
Junior Subordinated Debentures
    
    
    326
    
    
    
    398
    
    
    
    (72
    )TOTAL
    
    
    3,842
    
    
    
    1,666
    
    
    
    2,176Taxable-equivalent net interest income
    
    $
    4,823
    
    
    $
    6,364
    
    
    
    ($1,541
    )
 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




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##### Table of Contents



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




---



##### Table of Contents



Analysis of Statement of Condition
  19




---



##### Table of Contents



Liquidity
   Capital
  20




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##### Table of Contents



Asset Quality
Credit Risk Management
  Nonperforming Assets and Loans Past Due 90 Days and Over
  PeriodAsset Quality Data
    
    Period Ended
    
    
    
    
    
    
    Ended(in thousands)
    
    Sept. 30,
    
    
    %
    
    
    Dec. 31,2005
    
    
    2004
    
    
    Chg
    
    
    2004Nonaccrual loans
    
    $
    2,125
    
    
    $
    482
    
    
    
    340.9
    %
    
    $
    472Loans past due 90
days and over
    
    
    561
    
    
    
    283
    
    
    
    98.2
    %
    
    
    488Total nonperforming loans
    
    
    2,686
    
    
    
    765
    
    
    
    251.1
    %
    
    
    960Other real estate owned
    
    
    111
    
    
    
    86
    
    
    
    29.1
    %
    
    
    445Other foreclosed assets
    
    
    154
    
    
    
    
    
    
    
    
    
    
    
    283Total nonperforming assets
    
    $
    2,951
    
    
    $
    851
    
    
    
    246.8
    %
    
    $
    1,688Nonperforming assets to
total assets
    
    
    0.45
    %
    
    
    0.17
    %
    
    
    164.7
    %
    
    
    0.28
    %Nonperforming assets to
total loans + OREO + other
foreclosed assets
    
    
    0.68
    %
    
    
    0.29
    %
    
    
    134.5
    %
    
    
    0.44
    %ALL to nonperforming assets
    
    
    142.70
    %
    
    
    346.53
    %
    
    
    -58.8
    %
    
    
    228.08
    %ALL to nonperforming loans
    
    
    156.78
    %
    
    
    385.49
    %
    
    
    -59.3
    %
    
    
    401.04
    %ALL to total loans
    
    
    0.97
    %
    
    
    1.00
    %
    
    
    -3.0
    %
    
    
    1.00
    %Year-to-date charge-offs
    
    $
    482
    
    
    $
    644
    
    
    
    -25.2
    %
    
    $
    1,067Year-to-date recoveries
    
    
    162
    
    
    
    133
    
    
    
    21.8
    %
    
    
    182Year-to-date net charge-offs
    
    $
    320
    
    
    $
    511
    
    
    
    -37.4
    %
    
    $
    885Net YTD charge-offs to total loans
    
    
    0.07
    %
    
    
    0.17
    %
    
    
    -58.8
    %
    
    
    0.23
    %
 21




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##### Table of Contents



22




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##### Table of Contents



Impact of Inflation and Changing Prices
  
 Part I. Item 3. Qualitative and Quantitative Disclosures About Market Risk
   
 Part I. Item 4. Controls and Procedures
   23




---



##### Table of Contents



Part II. Other Information
 
 Item 1. Legal Proceedings
  
 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 Plan1July 2005
    
    none
    
    
    
    
    
    
    
    
    
    
    200,100August 2005
    
    none
    
    
    
    
    
    
    
    
    
    
    200,100September 2005
    
    
    464
    
    
    $
    31.40
    
    
    
    464
    
    
    
    199,636
 
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits and Reports on Form 8-K
 (a) Exhibits
 24




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##### Table of Contents



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
  25




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##### Table of Contents



Signatures
  MidSouth Bancorp, Inc.
(Registrant)Date: November 14, 2005
    /s/ Teri S. StellyTeri S. Stelly, SVP/Chief Accounting Officer 26




---



##### Table of Contents



Exhibit Index
 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
 27