When Hurricane Gustav slammed into the Louisiana coastline on Labor Day weekend, MidSouth Bancorp was ready. Before the category two storm barreled out of the Gulf, MidSouth had to make sure its ATMs were sufficiently stocked to handle fleeing residents' huge demand for cash. While some banks fell short, MidSouth succeeded in meeting customers' needs.

"You can't live down here and not know how to do it," Karen Lee Hail says of the bank's preparations, which included moving its call center out of the storm's path to a location in Texas; putting the IT, facilities and electronic banking teams on 24-hour rotations; and situating special response teams in Shreveport, Dallas, Beaumont and Houston.

MidSouth wasn't always this spread out. The community bank has grown to 27 locations in Louisiana and nine in Texas. It opened seven new facilities over the past year. Total assets of $937.9 million at the end of June marked a 13.8 percent increase over the same period in 2007. But non-interest expenses due to franchise growth and increased loan loss provisions have weighed heavily on the balance sheet. Earnings declined to $2.6 million or 41 percent in the first two quarters of this year compared to the year earlier.

This year, earnings are projected to be flat or slightly below those in 2007 and 2006, but there are some bright spots. Quarterly revenues (net interest and non-interest income) increased 5.5 percent for the second quarter of 2008 compared to the second quarter of 2007 and net interest income increased 6.5 percent.

The bank is riding a roller coaster of expansion in a region critical to the nation's delivery of oil and gas supplies and economically invigorated by renewed interest in domestic gas and oil drilling. The bank's growth demands a "total re-examination of the way we do things," Hail says. "My focus has been back to the strategic end, the processes, the business plan, the service standards, making sure everything is structured better for moving to the next level." (c) 2008 U.S. Banker and SourceMedia, Inc. All Rights Reserved. http://www.americanbanker.com/usb.html/ http://www.sourcemedia.com/

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