MidSouth Bancorp in Lafayette, La., reported a quarterly loss as it begins an aggressive restructuring process.
The $1.9 billion-asset company said in a press release Tuesday that it lost $6.2 million in the second quarter, a reversal from the $1.7 billion it earned a year earlier.
MidSouth also disclosed that it had reached a formal written agreement with the Office of the Comptroller of the Currency on July 19.
The company, which fired founder and CEO Rusty Cloutier earlier this year, attributed the quarterly loss largely to a higher loan-loss provision, charges tied to branch sales and severance benefits “resulting from the termination of an executive.”
The provision jumped to $12 million in the second quarter from only $2.3 million a year earlier.
Overall, the quarter included $2.4 million in restructuring expenses, including $872,000 for severance and retention accruals, $371,000 tied to the writedown of assets held for sale and $302,000 for discontinued branch projects.
"The operating loss … is consistent with our disclosures during our June capital raise,” Jim McLemore, MidSouth’s president and CEO, said in the release. “Despite the quarterly loss, capital and liquidity levels increased significantly over the prior quarter and our balance sheet is stronger than it has been in many years.”
Net interest income rose by 2.8% to $18.2 million. Total loans fell by 2%, to $1.2 billion, while the net interest margin expanded by 7 basis points to 4.18%. MidSouth noted that its energy portfolio shrank by 10% during the second quarter; such credits made up 17% of total loans at June 30.
Nonperforming assets fell by 10% from a year earlier to $56.4 million, reflecting $15.3 million of payoffs on nonaccrual loans and $9.1 million in chargeoffs.
Noninterest expenses rose by 14% to $19.6 million, including the one-time charges. Legal and professional fees doubled to nearly $1 million, while costs tied to salaries and occupancy fell.
MidSouth announced during the second quarter that it had raised $55 million to bolster capital levels. The company also plans to close seven branches and sell two others.
