MidSouth Bancorp Inc. has announced the completion of an underwritten public offering of 4.6 million shares of its common stock at $12 per share. Gross proceeds from the sale were $55 million; net profits were roughly $51.4 million.
According to a release:
Subject to receipt of required regulatory approvals, the Company intends to use approximately $32.0 million of the net proceeds of the offering to redeem all of its outstanding Series B Preferred Stock issued to the U.S. Treasury as a result of its participation in the Small Business Lending Fund and to use the remaining portion of the net proceeds from this offering to enhance its capital structure, to fund future organic growth, for working capital, and other general corporate purposes.
The bank also announced sweeping leadership changes in the wake of the ouster in late April of MidSouth Bank founding President and CEO Rusty Cloutier and his son, Troy, who was promoted to CEO of the bank last November as part of a succession plan. At the time of their firing, Rusty Cloutier was president and CEO of the holding company and Troy was president and CEO of the bank.
MidSouth Bank President and CEO Jim McLemore said the capital infusion is part of the new leadership’s proactive plan to strengthen the bank and address regulators’ concerns about the impact the prolonged downturn in the oil and gas industry has had on the bank’s asset credit quality. The changes include various cost reduction measures, among which is the recent decision to close or sell an undisclosed number of low-performing banking centers in Louisiana and Texas. The bank has also enhanced its risk-management processes, reduced its exposure to the energy sector, improved credit quality and cut its quarterly common dividend from 9 cents per share to a penny per share beginning in the third quarter.
“We remain a well-capitalized bank even before the impact of the capital raise,” McLemore said. “While we are well aware of the challenges ahead of us, and we will address them head-on with this $55 million capital raise, we will move forward and into a new era of stronger relationship banking.”
The turnaround plan was put in place in recent weeks by an executive team led by McLemore, who was named to the top executive post in an interim capacity in late April and assumed the permanent position in May as part of an overall strategy to improve the condition and performance of the bank. He joined the bank in 2009 as Chief Financial Officer, having previously served as Executive Vice President and CFO of Security Bank Corporation from 2002 until July 2009.
Replacing McLemore as CFO is Lorraine Miller, who also was named Executive Vice President. She previously was Senior Vice President, Director of Mergers and Acquisitions since February 2010, and Treasurer since January 2013. Prior to joining the bank, she served as Senior Vice President in Finance and Investor Relations roles with Security Bank Corporation and WestPoint Home and as a Senior Equity Research Analyst at SunTrust Equitable Securities and The Robinson-Humphrey Company Inc. over a span of 23 years.
Other key management promotions:
• Kade Peterson was named Senior Executive Vice President, Chief Operating Officer. He previously served as Chief Information Officer since December 2016 and before that was Executive Vice President – Chief Operating Officer of USAmeriBank in Tampa, Fla. (now Umpqua Bank), for three years and Executive Vice President – Operations and Technology Executive for Sterling Bank in Spokane, Wash., for four years. He also served in various capacities for Zions Bancorporation.
• Jeff Blum was appointed Senior Executive Vice President and Chief Lending Officer, a newly created position with additional oversight in risk management. Blum previously served as Senior Executive Vice President and Chief Credit Officer since August 2014. Prior to joining the bank, he worked for Whitney Bank since 1993, having most recently served as Morgan City area president.
• Erin DeWitt was named Senior Executive Vice President and Chief Risk Officer. She previously served as Chief Risk Officer since April 2017. Prior to joining the bank, she served as Chief Risk Officer for Scottrade Financial Services for two years. DeWitt also served in various risk-related roles at Capital One for seven years and was an examiner with the Federal Reserve System from 2000-2004.
• Clay Abington was appointed Executive Vice President, Corporate Efficiency and oversees human resources. He previously served as First Vice President, Business Process Manager since December 2012. Prior to joining the bank, Abington served in various capacities for PSB Financial Inc., including Senior Vice President and Chief Risk Officer.
“We’re going about the business of banking with a very seasoned, skilled and hard-working management team that is determined to address regulators’ concerns, deliver excellent service to our customers and work hand-in-hand with our clients who are still struggling,” McLemore said. “They also are focused on ensuring that our employees look forward to coming to work every day so that together we are building an enterprise that will return great value to our shareholders.”