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Community bank earnings: MidSouth Bancorp details energy loan issues

In this feature, S&P Global Market Intelligencetakes a look at a handful of community banks from around the country. Those on today'slist reported on July 27 their earnings results for the three months ended June30.


Lafayette,La.-based MidSouth Bancorp Inc.posted net earnings available to common shareholders of $1.7 million, or per share, down from theyear-ago period's $4.9 million, or 42 cents per share. The second quarter of 2015included significantly higher gains on the sale of securities, plus income froma death benefit on bank-owned life insurance. The S&P Capital IQ consensus normalizedEPS estimate for the recent quarter was 13 cents.

Nonperformingassets amounted to $62.9 million, up from the linked quarter's $58.1 million,largely due to a nonaccruing energy-relatedcredit. Total criticized energy-related loans rose sequentially to $92.9 million,or 37.2% of energy loans. However, no new energy-related impairments were identifiedduring the quarter. Provision for loan losses amounted to $2.3 million — steadilydecreasing since the $3.8 million of 2015's third quarter, but still higher thanthe $1.1 million of that year's second quarter.

AmericanFork, Utah-based People's Utah Bancorp,which went public in June2015, reported net income of $5.6 million, or 31 cents per share, up from $4.7 million, or 30 cents pershare, a year ago. Its efficiency ratio for the quarter was 57.4%, down sequentiallyand year over year from 59.3% and 60.29%, respectively.


Bend,Ore.-based Cascade Bancorpposted net income of $4.8 million, or 7cents per share, roughly flat from a year ago. No provision for loanlosses was recorded, and CEO Terry Zink reiterated on the earnings call that no provision is likely to be added forthe rest of 2016.

The company noted it was able to retain 97.8% of deposits from the 15-branch deal with It also saidit expects to close the Prime PacificFinancial Services acquisitionin August and convert customer systems in the fourth quarter. A one-time merger-relatedcost of $3.5 million will be recorded in the third quarter.

The companyintends to continue being acquisitive, looking for smaller banks particularly inSeattle and Portland. It also has plans for "branch rightsizing."