Company Quick10K Filing
Mid-Southern Bancorp
Price13.20 EPS0
Shares4 P/E36
MCap47 P/FCF39
Net Debt-20 EBIT2
TEV27 TEV/EBIT12
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-09-30 Filed 2020-11-13
10-Q 2020-06-30 Filed 2020-08-13
10-Q 2020-03-31 Filed 2020-05-12
10-K 2019-12-31 Filed 2020-03-26
10-Q 2019-09-30 Filed 2019-11-14
10-Q 2019-06-30 Filed 2019-08-13
10-Q 2019-03-31 Filed 2019-05-13
10-K 2018-12-31 Filed 2019-03-22
10-Q 2018-09-30 Filed 2018-11-14
10-Q 2018-06-30 Filed 2018-08-14
10-Q 2018-03-31 Filed 2018-06-28
S-1 2018-03-23 Public Filing
8-K 2020-10-26
8-K 2020-07-20
8-K 2020-05-27
8-K 2020-04-22
8-K 2020-02-11
8-K 2020-02-05
8-K 2019-10-22
8-K 2019-09-25
8-K 2019-07-24
8-K 2019-04-26
8-K 2019-04-19
8-K 2019-02-06
8-K 2019-01-23
8-K 2019-01-23
8-K 2018-11-02
8-K 2018-07-31
8-K 2018-07-10
8-K 2018-06-28
8-K 2018-05-14

MSVB 10Q Quarterly Report

Item 1. Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II
Item 1. Legal Proceedings
Item 1A. Risk Factors
Part II
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Part II
Item 6. Exhibits
EX-31.1 msvb-20200930ex3118909be.htm
EX-31.2 msvb-20200930ex3127f4822.htm
EX-32.1 msvb-20200930ex32119b53b.htm

Mid-Southern Bancorp Earnings 2020-09-30

Balance SheetIncome StatementCash Flow

10-Q 1 msvb-20200930x10q.htm 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020

OR

  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                                      to                                   

Commission File No. 001-38491

Mid-Southern Bancorp, Inc.

(Exact name of registrant as specified in its charter)

Indiana

82-4821705

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification Number)

300 North Water Street, Salem, Indiana 47167                 812-883-2639

(Address of principal executive offices, zip code, telephone number)

Not applicable

(Former name, former address and former fiscal year, if changed since last report) 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

    

Trading Symbol(s)

    

Name of each exchange on which registered

Common Stock, par value $.01 per share

MSVB

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes   No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes   No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer,” "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

Accelerated Filer 

Non-Accelerated Filer

Smaller Reporting Company

Emerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes    No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:  As of November 5, 2020, there were 3,174,657 shares of the registrant’s common stock outstanding.


MID-SOUTHERN BANCORP, INC.

INDEX

    

Page

Part I

Financial Information

Item 1. Consolidated Financial Statements

Consolidated Balance Sheets (unaudited)

3

Consolidated Statements of Income (unaudited)

4

Consolidated Statements of Comprehensive Income (unaudited)

5

Consolidated Statements of Changes in Stockholders’ Equity (unaudited)

6

Consolidated Statements of Cash Flows (unaudited)

7

Notes to Consolidated Financial Statements (unaudited)

8-37

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

38-48

Item 3. Quantitative and Qualitative Disclosures About Market Risk

49

Item 4. Controls and Procedures

49

Part II

Other Information

Item 1. Legal Proceedings

50

Item 1A. Risk Factors

50

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

52

Item 3. Defaults Upon Senior Securities

52

Item 4. Mine Safety Disclosures

52

Item 5. Other Information

52

Item 6. Exhibits

53

Signatures

54

-2-


Item 1. Consolidated Financial Statements

MID-SOUTHERN BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share information) (Unaudited)

    

September 30, 

    

December 31, 

2020

2019

ASSETS

 

  

 

  

Cash and due from banks

$

1,944

$

1,577

Interest-bearing deposits with banks

 

13,520

 

17,240

Cash and cash equivalents

 

15,464

 

18,817

Securities available for sale, at fair value

 

79,712

 

58,417

Securities held to maturity

 

32

 

42

Loans, net

 

115,267

 

123,272

Federal Home Loan Bank stock, at cost

 

778

 

778

Real estate held for sale

 

99

 

135

Premises and equipment

 

1,822

 

1,874

Accrued interest receivable:

 

 

Loans

 

388

 

410

Securities

 

459

 

455

Cash value of life insurance

 

3,847

 

3,794

Other assets

 

413

 

442

Total Assets

$

218,281

$

208,436

LIABILITIES

 

 

Deposits:

 

 

Noninterest-bearing

$

22,287

$

17,796

Interest-bearing

 

136,221

 

129,173

Total deposits

 

158,508

 

146,969

Advance from Federal Home Loan Bank

10,000

10,000

Accrued interest payable

9

7

Accrued expenses and other liabilities

 

918

 

647

Total Liabilities

 

169,435

 

157,623

STOCKHOLDERS’ EQUITY

 

 

Preferred stock, 1,000,000 shares authorized, $0.01 par value, no shares issued and outstanding

 

 

Common stock, 30,000,000 shares authorized, $0.01 par value, 3,565,430 shares issued and 3,214,168 shares outstanding (3,557,728 in 2019)

 

36

 

36

Additional paid-in-capital

 

30,487

 

30,415

Retained earnings, substantially restricted

 

22,159

 

21,363

Accumulated other comprehensive income

 

2,545

 

1,281

Unearned ESOP shares

 

(1,805)

 

(1,883)

Unearned stock compensation plan

 

(235)

 

(300)

Treasury stock, at cost - 351,262 shares (7,702 in 2019)

 

(4,341)

 

(99)

Total Stockholders’ Equity

 

48,846

 

50,813

Total Liabilities and Stockholders’ Equity

$

218,281

$

208,436

See accompanying Notes to Consolidated Financial Statements.

-3-


MID-SOUTHERN BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share information) (Unaudited)

Three Months Ended

Nine Months Ended

September 30, 

September 30, 

    

2020

    

2019

    

2020

    

2019

INTEREST INCOME

 

  

 

  

 

  

 

  

Loans, including fees

$

1,354

$

1,529

$

4,203

$

4,612

Investment securities:

 

Mortgage-backed securities

 

97

130

306

418

Municipal tax exempt

 

312

174

794

503

Other debt securities

 

62

68

196

206

Federal Home Loan Bank dividends

 

5

11

20

34

Interest-bearing deposits with banks and time deposits

 

3

115

58

205

Total interest income

 

1,833

2,027

5,577

5,978

INTEREST EXPENSE

 

Deposits

 

183

221

607

612

Borrowings

 

43

46

131

46

Total interest expense

 

226

267

738

658

Net interest income

 

1,607

1,760

4,839

5,320

Provision for loan losses

 

30

6

102

6

Net interest income after provision for loan losses

 

1,577

1,754

4,737

5,314

NONINTEREST INCOME

 

Deposit account service charges

 

45

86

127

253

Net gain on sales of securities available for sale

104

7

Increase in cash value of life insurance

 

17

18

51

54

ATM and debit card fee income

 

110

102

312

289

Other income

 

30

9

63

28

Total noninterest income

 

202

215

657

631

NONINTEREST EXPENSE

 

Compensation and benefits

 

882

788

2,478

2,362

Occupancy and equipment

 

124

109

340

308

Data processing

 

80

414

283

1,011

Professional fees

 

145

166

440

487

Impairment loss on real estate held for sale

37

104

37

104

Directors' compensation

 

71

41

223

133

Stockholders' meeting expense

17

45

44

73

Supervisory examinations

 

15

17

47

52

Deposit insurance premiums

 

13

8

13

33

Other expenses

 

142

196

424

534

Total noninterest expense

 

1,526

1,888

4,329

5,097

Income before income taxes

 

253

81

1,065

848

Income tax expense (benefit)

 

(11)

(24)

74

84

Net Income

$

264

$

105

$

991

$

764

Earnings per common share:

 

Basic

$

0.09

$

0.03

$

0.31

$

0.23

Diluted

$

0.09

$

0.03

$

0.31

$

0.23

See accompany Notes to Consolidated Financial Statements.

-4-


MID-SOUTHERN BANCORP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands) (Unaudited)

Three Months Ended

Nine Months Ended

September 30, 

September 30, 

    

2020

    

2019

    

2020

    

2019

Net Income

$

264

$

105

$

991

$

764

Other Comprehensive Income (Loss), net of tax

 

 

 

 

Unrealized gains (losses) on securities available for sale:

 

 

 

 

Net unrealized holding gains (losses) arising during the period

 

(12)

 

426

 

1,786

 

2,259

Income tax benefit (expense)

 

3

 

(106)

 

(444)

 

(561)

Net of tax amount

(9)

320

1,342

 

1,698

 

 

Reclassification adjustment for realized gains included in net income during the period

 

104

 

7

Income tax expense

 

(26)

 

(2)

Net of tax amount

 

 

 

78

 

5

 

 

Other Comprehensive Income (Loss), net of tax

 

(9)

 

320

 

1,264

 

1,693

 

 

Total Comprehensive Income

$

255

$

425

$

2,255

$

2,457

See accompany Notes to Consolidated Financial Statements.

-5-


MID-SOUTHERN BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands, except share information) (Unaudited)

    

    

    

    

    

Accumulated

Additional

Other

Unearned

Unearned

Common

Paid-in

Retained

Comprehensive

ESOP

Stock

Treasury

    

Stock

    

Capital

    

Earnings

    

Income (Loss)

    

Shares

    

Compensation

    

Stock

    

Total

Balances at January 1, 2019

$

36

$

30,302

$

20,672

$

(166)

$

(1,997)

$

(1)

$

(3)

$

48,843

Net income

 

362

362

Other comprehensive income

 

441

441

Cash dividends ($0.02 per share)

(67)

(67)

ESOP shares committed to be released

7

26

33

Balances at March 31, 2019

$

36

$

30,309

$

20,967

$

275

$

(1,971)

$

(1)

$

(3)

$

49,612

Net income

 

297

297

Other comprehensive income

932

932

Cash dividends ($0.02 per share)

(67)

(67)

ESOP shares committed to be released

6

26

32

Balances at June 30, 2019

$

36

$

30,315

$

21,197

$

1,207

$

(1,945)

$

(1)

$

(3)

$

50,806

Net income

105

105

Other comprehensive income

320

320

Cash dividends ($0.02 per share)

(68)

(68)

ESOP shares committed to be released

7

26

33

Purchase of 24,100 treasury shares

(307)

(307)

Balances at September 30, 2019

$

36

$

30,322

$

21,234

$

1,527

$

(1,919)

$

(1)

$

(310)

$

50,889

Balances at January 1, 2020

$

36

$

30,415

$

21,363

$

1,281

$

(1,883)

$

(300)

$

(99)

$

50,813

Net income

 

385

385

Other comprehensive loss

 

(1,487)

(1,487)

Cash dividends ($0.02 per share)

 

(67)

(67)

ESOP shares committed to be released

7

26

33

Purchase of 17,900 treasury shares

 

(206)

(206)

Stock compensation expense

18

22

40

Balances at March 31, 2020

$

36

$

30,440

$

21,681

$

(206)

$

(1,857)

$

(278)

$

(305)

$

49,511

Net income

342

342

Other comprehensive income

2,760

2,760

Cash dividends ($0.02 per share)

(66)

(66)

ESOP shares committed to be released

7

26

33

Purchase of 137,630 treasury shares

(1,677)

(1,677)

Stock compensation expense

16

22

38

Balances at June 30, 2020

$

36

$

30,463

$

21,957

$

2,554

$

(1,831)

$

(256)

$

(1,982)

$

50,941

Net income

264

264

Other comprehensive loss

(9)

(9)

Cash dividends ($0.02 per share)

(62)

(62)

ESOP shares committed to be released

6

26

32

Purchase of 188,030 treasury shares

(2,359)

(2,359)

Stock compensation expense

18

21

39

Balances at September 30, 2020

$

36

$

30,487

$

22,159

$

2,545

$

(1,805)

$

(235)

$

(4,341)

$

48,846

See accompanying Notes to Consolidated Financial Statements.

-6-


MID-SOUTHERN BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)

Nine Months Ended

September 30, 

    

2020

    

2019

CASH FLOWS FROM OPERATING ACTIVITIES

 

  

 

  

Net income

$

991

$

764

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

Amortization of premiums and accretion of discounts on securities, net

 

175

 

143

Provision for loan losses

102

6

Stock compensation expense

117

Depreciation expense

 

117

 

81

ESOP compensation expense

 

98

 

98

Impairment loss on real estate held for sale

37

104

Deferred income taxes

 

(40)

 

(18)

Increase in cash value of life insurance

 

(51)

 

(54)

Net gain on sales of securities available for sale

 

(104)

 

(7)

Decrease in accrued interest receivable

 

18

 

92

Increase in accrued interest payable

2

Net change in other assets and liabilities

 

(127)

 

(7)

Net Cash Provided By Operating Activities

 

1,335

 

1,202

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

Purchases of securities available for sale

(30,593)

(8,636)

Principal collected on mortgage-backed securities available for sale

 

4,881

 

5,685

Proceeds from maturities of securities available for sale

 

1,505

 

506

Proceeds from sales of securities available for sale

4,525

278

Principal collected on mortgage-backed securities held to maturity

 

10

 

11

Proceeds from maturities of securities held to maturity

 

 

45

Net decrease in loans receivable

 

7,903

 

2,082

Purchase of premises and equipment

 

(19)

 

(31)

Investment in cash value of life insurance

 

(2)

 

(3)

Net Cash Used In Investing Activities

 

(11,790)

 

(63)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

Net increase (decrease) in deposits

 

11,539

 

(3,452)

Advances from Federal Home Loan Bank

 

 

10,000

Purchase of treasury stock

(4,242)

(307)

Cash dividends paid

 

(195)

 

(202)

Net Cash Provided By Financing Activities

 

7,102

 

6,039

Net Increase (Decrease) in Cash and Cash Equivalents

 

(3,353)

 

7,178

Cash and cash equivalents at beginning of year

 

18,817

 

12,700

Cash and Cash Equivalents at End of Period

$

15,464

$

19,878

Supplemental Disclosures of Cash Flow Information

Cash payments for:

Interest

$

736

$

658

Net tax payments (refunds)

74

(43)

See accompanying Notes to Consolidated Financial Statements.

-7-


Table of Contents

MID-SOUTHERN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.           Presentation of Interim Information

Mid-Southern Bancorp, Inc., (the "Company") was incorporated in January 2018 and became the holding company for Mid-Southern Savings Bank, FSB (the "Bank"), on July 11, 2018, upon the completion of the Bank’s conversion from the mutual holding company ownership structure and the Company’s related public stock offering. Please see Note 2 – Conversion and Stock Issuance for more information.

The accompanying unaudited consolidated financial statements and notes have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). Accordingly, they do not include all of the information and footnotes required by U.S. Generally Accepted Accounting Principles ("GAAP") for complete financial statements. These unaudited interim consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K filed with the SEC on March 26, 2020 ("2019 Form 10-K").

In the opinion of management, the unaudited consolidated financial statements include all adjustments considered necessary for a fair presentation of the unaudited interim consolidated financial statements in accordance with GAAP. All of these adjustments are of a normal, recurring nature. Such adjustments are the only adjustments included in the unaudited consolidated financial statements. Interim results are not necessarily indicative of results for a full year or any other period.

The unaudited consolidated financial statements include the accounts of the Company and its subsidiary. All material intercompany balances and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform with the current period presentation. The reclassifications had no effect on net income or stockholders’ equity. In preparing the unaudited consolidated financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change relate to the allowance for loan losses, the valuation of foreclosed real estate and the underlying collateral of impaired loans, deferred tax assets, and the fair value of financial instruments.

On April 5, 2012, the Jumpstart Our Business Startups Act ("JOBS Act") was signed into law. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies. As an "emerging growth company" we may delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. We intend to take advantage of the benefits of this extended transition period. Accordingly, our condensed consolidated financial statements may not be comparable to companies that comply with such new or revised accounting standards.

2.           Conversion and Stock Issuance

The Company, an Indiana corporation, was organized by Mid-Southern, M.H.C. (the “MHC") and the Bank in connection with the MHC’s plan of conversion from mutual to stock form of ownership (the "Conversion"). Upon consummation of the Conversion, which occurred on July 11, 2018, the Company became the holding company for the Bank and now owns all of the issued and outstanding shares of the Bank’s common stock.

In connection with the Conversion, the Company sold a total of 2,559,871 shares of common stock in an offering to certain depositors of the Bank and others, including 204,789 shares purchased by the Bank’s employee stock ownership plan ("ESOP") funded by a loan from the Company (see Note 6 of the Notes to Consolidated Financial Statements). All shares were sold at a purchase price of $10.00 per share. Costs to complete the stock offering were deducted from the gross proceeds of the offering.

Proceeds from the offering, net of $1.2 million in expenses, totaled $24.4 million. The Company used $2.0 million of the net proceeds to fund the ESOP and made a $10.2 million capital contribution to the Bank. In addition, concurrent with the offering, each share of Bank common stock owned by public stockholders was exchanged


Table of Contents

MID-SOUTHERN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

for 2.3462 shares of the Company’s common stock, with cash being paid in lieu of issuing any fractional shares. As a result of the offering, exchange and cash in lieu of fractional shares, the Company issued 3,565,430 shares.

The Company has established a liquidation account in an amount equal to the MHC’s ownership interest in the stockholders’ equity of the Bank as reflected in the latest consolidated balance sheet contained in the final prospectus plus the value of the net assets of the MHC as reflected in the latest balance sheet of the MHC prior to the effective date of the conversion (excluding its ownership of Bank common stock). The liquidation account will be maintained for the benefit of eligible account holders who maintain deposit accounts with the Bank after conversion.

The conversion was accounted for as a change in corporate form with the historic basis of the Bank’s assets, liabilities and equity unchanged as a result.

3.           Investment Securities

Investment securities have been classified in the consolidated balance sheets according to management’s intent. Debt securities held by the Company include mortgage-backed securities and other debt securities issued by the Government National Mortgage Association ("GNMA"), a U.S. government agency, and mortgage-backed securities and collateralized mortgage obligations issued by the Federal National Mortgage Association ("FNMA") and the Federal Home Loan Mortgage Corporation ("FHLMC"), which are government-sponsored enterprises. Mortgage-backed securities ("MBS") represent participating interests in pools of long-term first mortgage loans originated and serviced by the issuers of the securities. Collateralized mortgage obligations ("CMO") are complex mortgage-backed securities that restructure the cash flows and risks of the underlying mortgage collateral. The Company also holds debt securities issued by municipalities and political subdivisions of state and local governments.

-9-


Table of Contents

MID-SOUTHERN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Investment securities at September 30, 2020 and December 31, 2019 are summarized as follows:

    

Gross

Gross

(In thousands)

Amortized

Unrealized

Unrealized

Fair

September 30, 2020

    

Cost

    

Gains

    

Losses

    

Value

Securities available for sale:

 

  

 

  

 

  

 

  

Mortgage-backed securities:

 

  

 

  

 

  

 

  

Agency MBS

$

7,250

$

128

$

$

7,378

Agency CMO

 

16,068

228

42

16,254

 

23,318

356

42

23,632

Other debt securities:

 

Municipal obligations

 

53,007

3,143

70

56,080

Total securities available for sale

$

76,325

$

3,499

$

112

$

79,712

Securities held to maturity:

 

Mortgage-backed securities:

 

Agency MBS

$

32

$

$

$

32

Total securities held to maturity

$

32

$

$

$

32