MidSouth reports big 4Q loss as it preps return to profitability
MidSouth Bancorp in Lafayette, La., reported a large quarterly loss as it attempts to return to operating profitability in 2019.
The $1.7 billion-asset company said in a press release Thursday that it lost $23.1 million in the fourth quarter, taking into account dividends on preferred stock, or more than double its loss from a year earlier.
The most recent quarter included a $3.9 million charge to address a regulatory matters and a $11.4 million charge associated with its deferred tax asset. MidSouth, which spent nearly $20 million last year to address regulatory issues, said it doesn't expect to record a significant amount of remediation charges in 2019.
Net interest income fell by 11.4%, to $17.2 million. Total loans decreased by 24%, to $900 million, and net interest margin narrowed by 12 basis points, to 4.35%.
Noninterest income decreased by 21.2%, to $4.8 million. An increase in ATM and debit card income partly offset a decline in service charges on deposit accounts.
Noninterest expense fell by 5%, to $25 million. Higher salary and employee benefit costs, and an increase in legal and professional fees, were offset by declines in other operating expenses.
MidSouth accelerated efforts to purge bad loans.
The loan-loss provision rose by 13.2%, to $12 million. Total nonperforming assets fell by 47%, to $30.5 million, following the payoff of two of the company's largest nonperforming loans.
MidSouth said it is planning to sell about $20 million of other classified loans.
"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,” Jim McLemore, the president and CEO, said in the release.
“We also concluded some very extensive remediation projects that contribute to a renewed culture of prudent risk management in our organization," McLemore added. "Combined with strong capital, ample liquidity, and experienced banking professionals, MidSouth will continue our tradition of valuable service to our communities and clients.”