Midland States Bancorp, Inc. Announces 2021 Third Quarter Results

·30 min read

Summary

  • Net income of $19.5 million, or $0.86 diluted earnings per share

  • Total loans increased 8.2% annualized, excluding commercial FHA lines and PPP loans

  • Non-performing loans declined 11.0% from end of prior quarter

  • Net interest margin increased 5 bps from prior quarter to 3.34%

  • Efficiency ratio improved to 58.78% from 60.19% in prior quarter

  • Book value and tangible book value per share increased 2.3% and 3.4%, respectively

EFFINGHAM, Ill., Oct. 28, 2021 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (Nasdaq: MSBI) (the “Company”) today reported net income of $19.5 million, or $0.86 diluted earnings per share, for the third quarter of 2021, which included a $3.0 million impairment charge on commercial mortgage servicing rights (“MSRs”). This compares to net income of $20.1 million, or $0.88 diluted earnings per share, for the second quarter of 2021, which included a $6.8 million tax benefit related to the settlement of a prior tax issue, $3.6 million in professional fees related to the settlement, and a $3.7 million charge related to the prepayment of a longer-term FHLB advance. This also compares to net income of $86 thousand, or $0.00 diluted earnings per share, for the third quarter of 2020, which included $13.9 million of charges primarily related to the Company’s branch and facilities optimization plan.

Jeffrey G. Ludwig, President and Chief Executive Officer of the Company, said, “We delivered another strong quarter driven by positive trends across most areas of our operations. The contribution of new additions to our commercial banking team and increasing demand helped drive another quarter of solid loan growth. We are also seeing improved asset quality, net interest margin expansion as a result of the elimination of higher cost funding sources, and growth in wealth management revenue following our acquisition of ATG Trust Company earlier this year. The higher level of revenue we are generating is driving further improvement in operating leverage and an increase in pre-provision, pre-tax income.

“We expect to see a continuation of these positive trends in the fourth quarter. We are benefitting from our efforts to increase our presence in higher growth markets in Northern Illinois and St. Louis, which is resulting in the consistent addition of full banking relationships with new commercial clients. Our loan and deposit pipelines remain healthy, which should lead to continued quality balance sheet growth that we expect to result in a higher level of net interest income, additional operating leverage, and further improvement in our level of profitability,” said Mr. Ludwig.

Adjusted Earnings

Financial results for the second quarter of 2021 were impacted by a $6.8 million tax benefit related to the settlement of a prior tax issue, $3.8 million of integration and acquisition expenses inclusive of the $3.6 million in professional fees related to the settlement, and a $3.7 million charge related to the prepayment of a longer-term FHLB advance. Excluding these amounts and certain other income and expense, adjusted earnings were $19.8 million, or $0.86 diluted earnings per share, for the second quarter of 2021.

Financial results for the third quarter of 2020 were impacted by $13.9 million in charges primarily related to the branch and facilities optimization plan (integration and acquisition expenses), $1.7 million in gains on sales of investment securities, and a $0.2 million loss on residential MSRs held-for-sale. Excluding these amounts and certain other income and expenses, adjusted earnings were $12.0 million, or $0.52 diluted earnings per share, for the third quarter of 2020.

A reconciliation of adjusted earnings to net income according to accounting principles generally accepted in the United States (“GAAP”) is provided in the financial tables at the end of this press release.

Net Interest Margin

Net interest margin for the third quarter of 2021 was 3.34%, compared to 3.29% for the second quarter of 2021. The Company’s net interest margin benefits from accretion income on purchased loan portfolios, which contributed 7 and 9 basis points to net interest margin in the third and second quarters of 2021, respectively. Excluding the impact of accretion income, net interest margin increased 7 basis points from the second quarter of 2021, due primarily to a reduction in the cost of funds.

Relative to the third quarter of 2020, net interest margin increased from 3.33%. Accretion income on purchased loan portfolios contributed 14 basis points to net interest margin in the third quarter of 2020. Excluding the impact of accretion income, net interest margin increased 8 basis points from the third quarter of 2020, primarily due to a reduction in the cost of funds.

Net Interest Income

Net interest income for the third quarter of 2021 was $51.4 million, an increase of 2.6% from $50.1 million for the second quarter of 2021. Excluding accretion income, net interest income increased $1.6 million from the prior quarter, which was primarily due to a lower cost of funds. Accretion income associated with purchased loan portfolios totaled $1.0 million for the third quarter of 2021, compared with $1.3 million for the second quarter of 2021. PPP loan income totaled $2.4 million, including net loan origination fees of $2.1 million, in the third quarter of 2021, compared to $2.4 million, including net loan origination fees of $1.9 million, in the second quarter of 2021.

Relative to the third quarter of 2020, net interest income increased $1.4 million, or 2.8%. Accretion income for the third quarter of 2020 was $2.1 million. Excluding the impact of accretion income, net interest income increased primarily due to a higher average balance of interest-earning assets and a significant decline in the cost of funds.

Noninterest Income

Noninterest income for the third quarter of 2021 was $15.1 million, a decrease of 13.1% from $17.4 million for the second quarter of 2021. Impairment on commercial MSRs impacted noninterest income by $3.0 million and $1.1 million in the third quarter of 2021 and second quarter of 2021, respectively. Excluding the impairments, noninterest income decreased 2.1% primarily due to gains on the sale of other real estate owned that were recognized in the prior quarter.

Relative to the third quarter of 2020, noninterest income decreased 20.0% from $18.9 million. The decrease was primarily attributable to a larger impairment on commercial MSRs, lower residential mortgage banking revenue, and lower gains on sales of investment securities, partially offset by higher wealth management revenue.

Wealth management revenue for the third quarter of 2021 was $7.2 million, an increase of 9.9% from the second quarter of 2021, primarily due to the full quarter contribution of ATG Trust Company following its acquisition at the beginning of June. Compared to the third quarter of 2020, wealth management revenue increased 29.1%, primarily due to the increase in assets under administration over the past year and the acquisition of ATG Trust Company.

Noninterest Expense

Noninterest expense for the third quarter of 2021 was $41.3 million, compared with $48.9 million in the second quarter of 2021, which included $3.6 million in professional fees related to the settlement of the prior tax issue and $3.7 million in FHLB advance prepayment fees. Excluding the professional fees related to the settlement of the prior tax issue, FHLB advance prepayment fees, integration and acquisition expenses, and losses on residential MSRs held-for-sale, noninterest expense decreased by $0.3 million.

Relative to the third quarter of 2020, noninterest expense decreased 23.4% from $53.9 million, which included $13.9 million in charges primarily related to the branch and facilities optimization plan (integration and acquisition expenses), and a $0.2 million loss on residential MSRs held-for-sale. Excluding the integration and acquisition expenses and losses on residential MSRs held-for-sale, noninterest expense increased $1.2 million, primarily due to higher salaries and employee benefits expense.

Loan Portfolio

Total loans outstanding were $4.92 billion at September 30, 2021, compared with $4.84 billion at June 30, 2021 and $4.94 billion at September 30, 2020. The increase in total loans from June 30, 2021 was primarily attributable to higher balances of commercial, commercial real estate, and consumer loans, partially offset by forgiveness of PPP loans and runoff in the residential real estate portfolio resulting from refinancings.

Equipment finance balances increased $27.5 million from June 30, 2021 to $899.1 million at September 30, 2021, which are booked within the commercial loans and leases portfolio.

Compared to loan balances at September 30, 2020, growth in equipment finance balances, commercial real estate, and consumer loans was offset by declines in residential real estate loans and PPP loans held in the commercial portfolio.

Deposits

Total deposits were $5.60 billion at September 30, 2021, compared with $5.20 billion at June 30, 2021, and $5.03 billion at September 30, 2020. The increase in total deposits from the end of the prior quarter was primarily attributable to an increase in commercial FHA servicing deposits and inflows of other commercial deposits.

Asset Quality

Nonperforming loans totaled $54.6 million, or 1.11% of total loans, at September 30, 2021, compared with $61.4 million, or 1.27% of total loans, at June 30, 2021. The decrease in nonperforming loans was primarily attributable to the disposition of certain loans combined with minimal inflow during the third quarter of 2021. At September 30, 2020, nonperforming loans totaled $67.4 million, or 1.36% of total loans.

Net charge-offs for the third quarter of 2021 were $3.0 million, or 0.25% of average loans on an annualized basis, compared to net charge-offs of $4.0 million, or 0.33% of average loans on an annualized basis, for the second quarter of 2021 and $5.3 million, or 0.44% of average loans on an annualized basis, for the third quarter of 2020.

The Company recorded a negative provision for credit losses of $0.2 million for the third quarter of 2021. No provision for credit losses on loans was recorded due to general improvement in asset quality and economic forecasts, while a negative provision of $0.2 million was recorded for credit losses on available-for-sale securities.

The Company’s allowance for credit losses on loans was 1.13% of total loans and 101.9% of nonperforming loans at September 30, 2021, compared with 1.21% of total loans and 95.6% of nonperforming loans at June 30, 2021. Approximately 96% of the allowance for credit losses on loans at September 30, 2021 was allocated to general reserves.

Capital

At September 30, 2021, Midland States Bank and the Company exceeded all regulatory capital requirements under Basel III, and Midland States Bank met the qualifications to be a ‘‘well-capitalized’’ financial institution, as summarized in the following table:

Bank Level
Ratios as of
Sep. 30, 2021

Consolidated
Ratios as of
Sep. 30, 2021

Minimum
Regulatory
Requirements (2)

Total capital to risk-weighted assets

12.03%

13.10%

10.50%

Tier 1 capital to risk-weighted assets

11.17%

9.73%

8.50%

Tier 1 leverage ratio

9.38%

8.16%

4.00%

Common equity Tier 1 capital

11.17%

8.55%

7.00%

Tangible common equity to tangible assets (1)

NA

6.80%

NA

(1) A non-GAAP financial measure. Refer to page 15 for a reconciliation to the comparable GAAP financial measure.
(2) Includes the capital conservation buffer of 2.5%.

Stock Repurchase Program

During the third quarter of 2021, the Company repurchased 210,177 shares of its common stock at a weighted average price of $24.93 under its stock repurchase program. On September 7, 2021, the Company announced that its Board of Directors approved modifications to the previously announced stock repurchase program, which increased the aggregate repurchase authority to $75 million from $50 million and extended the expiration date of the program to December 31, 2022. As of September 30, 2021, the Company had $24.9 million remaining under the current stock repurchase authorization.

Conference Call, Webcast and Slide Presentation

The Company will host a conference call and webcast at 7:30 a.m. Central Time on Friday, October 29, 2021, to discuss its financial results. The call can be accessed via telephone at (877) 516-3531; conference ID: 6697900. A recorded replay can be accessed through November 5, 2021, by dialing (855) 859-2056; conference ID: 6697900.

A slide presentation relating to the third quarter 2021 financial results will be accessible prior to the scheduled conference call. This earnings release should be read together with the slide presentation, which contains important information related to the impact of COVID-19. The slide presentation and webcast of the conference call can be accessed on the Webcasts and Presentations page of the Company’s investor relations website at investors.midlandsb.com under the “News and Events” tab.

About Midland States Bancorp, Inc.

Midland States Bancorp, Inc. is a community-based financial holding company headquartered in Effingham, Illinois, and is the sole shareholder of Midland States Bank. As of September 30, 2021, the Company had total assets of approximately $7.09 billion, and its Wealth Management Group had assets under administration of approximately $4.06 billion. Midland provides a full range of commercial and consumer banking products and services and business equipment financing, merchant credit card services, trust and investment management, insurance and financial planning services. For additional information, visit https://www.midlandsb.com/ or https://www.linkedin.com/company/midland-states-bank.

Non-GAAP Financial Measures

Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with GAAP. These non-GAAP financial measures include “Adjusted Earnings,” “Adjusted Diluted Earnings Per Common Share,” “Adjusted Pre-Tax, Pre-Provision Earnings,” “Adjusted Return on Average Assets,” “Adjusted Return on Average Shareholders’ Equity,” “Adjusted Return on Average Tangible Common Equity,” “Adjusted Pre-Tax, Pre-Provision Return on Average Assets,” “Efficiency Ratio,” “Tangible Common Equity to Tangible Assets,” “Tangible Book Value Per Share” and “Return on Average Tangible Common Equity.” The Company believes these non-GAAP financial measures provide both management and investors a more complete understanding of the Company’s funding profile and profitability. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures. Not all companies use the same calculation of these measures; therefore, this presentation may not be comparable to other similarly titled measures as presented by other companies.

Forward-Looking Statements

Readers should note that in addition to the historical information contained herein, this press release includes "forward-looking statements" within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including but not limited to statements about the Company’s plans, objectives, future performance, goals and future earnings levels. These statements are subject to many risks and uncertainties, including changes in interest rates and other general economic, business and political conditions, including the effects of the COVID-19 pandemic and its potential effects on the economic environment, our customers and our operations, as well as any changes to federal, state and local government laws, regulations and orders in connection with the pandemic; changes in the financial markets; changes in business plans as circumstances warrant; risks relating to acquisitions; developments and uncertainty related to the future use and availability of some reference rates, such as the London Inter-Bank Offered Rate, as well as other alternative reference rates, and the adoption of a substitute; changes to U.S. tax laws, regulations and guidance; and other risks detailed from time to time in filings made by the Company with the Securities and Exchange Commission. Readers should note that the forward-looking statements included in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "will," "propose," "may," "plan," "seek," "expect," "intend," "estimate," "anticipate," "believe," "continue," or similar terminology. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

CONTACTS:
Jeffrey G. Ludwig, President and CEO, at jludwig@midlandsb.com or (217) 342-7321
Eric T. Lemke, Chief Financial Officer, at elemke@midlandsb.com or (217) 342-7321
Douglas J. Tucker, SVP and Corporate Counsel, at dtucker@midlandsb.com or (217) 342-7321

MIDLAND STATES BANCORP, INC.

CONSOLIDATED FINANCIAL SUMMARY (unaudited)

For the Quarter Ended

September 30,

June 30,

March 31,

December 31,

September 30,

(dollars in thousands, except per share data)

2021

2021

2021

2020

2020

Earnings Summary

Net interest income

$

51,396

$

50,110

$

51,868

$

53,516

$

49,980

Provision for credit losses

(184

)

(455

)

3,565

10,058

11,728

Noninterest income

15,143

17,417

14,816

14,336

18,919

Noninterest expense

41,292

48,941

39,079

47,048

53,901

Income before income taxes

25,431

19,041

24,040

10,746

3,270

Income taxes

5,883

(1,083

)

5,502

2,413

3,184

Net income

$

19,548

$

20,124

$

18,538

$

8,333

$

86

Diluted earnings per common share

$

0.86

$

0.88

$

0.81

$

0.36

$

-

Weighted average shares outstanding - diluted

22,577,880

22,677,515

22,578,553

22,656,343

22,937,837

Return on average assets

1.15

%

1.20

%

1.11

%

0.49

%

0.01

%

Return on average shareholders' equity

11.90

%

12.59

%

12.04

%

5.32

%

0.05

%

Return on average tangible common equity (1)

16.76

%

17.85

%

17.28

%

7.68

%

0.08

%

Net interest margin

3.34

%

3.29

%

3.45

%

3.47

%

3.33

%

Efficiency ratio (1)

58.78

%

60.19

%

56.88

%

58.55

%

57.74

%

Adjusted Earnings Performance Summary (1)

Adjusted earnings

$

19,616

$

19,755

$

18,662

$

12,471

$

12,023

Adjusted diluted earnings per common share

$

0.86

$

0.86

$

0.82

$

0.54

$

0.52

Adjusted return on average assets

1.15

%

1.17

%

1.12

%

0.73

%

0.72

%

Adjusted return on average shareholders' equity

11.94

%

12.36

%

12.12

%

7.97

%

7.56

%

Adjusted return on average tangible common equity

16.82

%

17.52

%

17.39

%

11.50

%

11.04

%

Adjusted pre-tax, pre-provision earnings

$

28,379

$

26,967

$

29,051

$

28,855

$

28,751

Adjusted pre-tax, pre-provision return on average assets

1.67

%

1.60

%

1.75

%

1.69

%

1.72

%

(1) Non-GAAP financial measures. Refer to pages 13 - 15 for a reconciliation to the comparable GAAP financial measures.


MIDLAND STATES BANCORP, INC.

CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)

For the Quarter Ended

September 30,

June 30,

March 31,

December 31,

September 30,

(in thousands, except per share data)

2021

2021

2021

2020

2020

Net interest income:

Interest income

$

58,490

$

58,397

$

60,503

$

62,712

$

60,314

Interest expense

7,094

8,287

8,635

9,196

10,334

Net interest income

51,396

50,110

51,868

53,516

49,980

Provision for credit losses:

Provision for credit losses on loans

-

-

3,950

10,000

10,970

Provision for credit losses on unfunded commitments

-

(265

)

(535

)

-

577

Provision for other credit losses

(184

)

(190

)

150

58

181

Total provision for credit losses

(184

)

(455

)

3,565

10,058

11,728

Net interest income after provision for credit losses

51,580

50,565

48,303

43,458

38,252

Noninterest income:

Wealth management revenue

7,175

6,529

5,931

5,868

5,559

Commercial FHA revenue

411

342

292

400

926

Residential mortgage banking revenue

1,287

1,562

1,574

2,285

3,049

Service charges on deposit accounts

2,268

1,916

1,826

2,149

2,092

Interchange revenue

3,651

3,797

3,375

3,137

3,283

Gain on sales of investment securities, net

160

377

-

-

1,721

Impairment on commercial mortgage servicing rights

(3,037

)

(1,148

)

(1,275

)

(2,344

)

(1,418

)

Company-owned life insurance

869

863

860

893

897

Other income

2,359

3,179

2,233

1,948

2,810

Total noninterest income

15,143

17,417

14,816

14,336

18,919

Noninterest expense:

Salaries and employee benefits

22,175

22,071

20,528

22,636

21,118

Occupancy and equipment

3,701

3,796

3,940

3,531

4,866

Data processing

6,495

6,288

5,993

5,987

5,721

Professional

1,738

5,549

2,185

1,912

1,861

Amortization of intangible assets

1,445

1,470

1,515

1,556

1,557

Loss on mortgage servicing rights held for sale

79

143

-

617

188

Impairment related to facilities optimization

-

-

-

(10

)

12,651

FHLB advances prepayment fees

-

3,669

8

4,872

-

Other expense

5,659

5,955

4,910

5,947

5,939

Total noninterest expense

41,292

48,941

39,079

47,048

53,901

Income before income taxes

25,431

19,041

24,040

10,746

3,270

Income taxes

5,883

(1,083

)

5,502

2,413

3,184

Net income

$

19,548

$

20,124

$

18,538

$

8,333

$

86

Basic earnings per common share

$

0.86

$

0.88

$

0.81

$

0.36

$

0.00

Diluted earnings per common share

$

0.86

$

0.88

$

0.81

$

0.36

$

0.00


MIDLAND STATES BANCORP, INC.

CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)

As of

September 30,

June 30,

March 31,

December 31,

September 30,

(in thousands)

2021

2021

2021

2020

2020

Assets

Cash and cash equivalents

$

662,643

$

425,100

$

631,219

$

341,640

$

461,196

Investment securities

900,319

756,831

690,390

686,135

618,974

Loans

4,915,554

4,835,866

4,910,806

5,103,331

4,941,466

Allowance for credit losses on loans

(55,675

)

(58,664

)

(62,687

)

(60,443

)

(52,771

)

Total loans, net

4,859,879

4,777,202

4,848,119

5,042,888

4,888,695

Loans held for sale

26,621

12,187

55,174

138,090

62,500

Premises and equipment, net

71,241

71,803

73,255

74,124

74,967

Other real estate owned

11,931

12,768

20,304

20,247

15,961

Loan servicing rights, at lower of cost or fair value

30,916

34,577

36,876

39,276

42,465

Goodwill

161,904

161,904

161,904

161,904

161,904

Other intangible assets, net

26,065

27,900

26,867

28,382

29,938

Cash surrender value of life insurance policies

149,146

148,277

146,864

146,004

145,112

Other assets

193,294

201,461

193,814

189,850

198,333

Total assets

$

7,093,959

$

6,630,010

$

6,884,786

$

6,868,540

$

6,700,045

Liabilities and Shareholders' Equity

Noninterest-bearing deposits

$

1,672,901

$

1,366,453

$

1,522,433

$

1,469,579

$

1,355,188

Interest-bearing deposits

3,928,475

3,829,898

3,818,080

3,631,437

3,673,548

Total deposits

5,601,376

5,196,351

5,340,513

5,101,016

5,028,736

Short-term borrowings

66,666

75,985

71,728

68,957

58,625

FHLB advances and other borrowings

440,171

440,171

529,171

779,171

693,640

Subordinated debt

138,998

138,906

169,888

169,795

169,702

Trust preferred debentures

49,235

49,094

48,954

48,814

48,682

Other liabilities

139,669

81,317

89,065

79,396

78,780

Total liabilities

6,436,115

5,981,824

6,249,319

6,247,149

6,078,165

Total shareholders’ equity

657,844

648,186

635,467

621,391

621,880

Total liabilities and shareholders’ equity

$

7,093,959

$

6,630,010

$

6,884,786

$

6,868,540

$

6,700,045


MIDLAND STATES BANCORP, INC.

CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)

As of

September 30,

June 30,

March 31,

December 31,

September 30,

(in thousands)

2021

2021

2021

2020

2020

Loan Portfolio

Commercial loans and leases

$

1,879,765

$

1,831,241

$

1,977,440

$

2,095,639

$

1,938,691

Commercial real estate

1,562,013

1,540,489

1,494,031

1,525,973

1,496,758

Construction and land development

200,792

212,508

191,870

172,737

177,894

Residential real estate

344,414

366,612

398,501

442,880

470,829

Consumer

928,570

885,016

848,964

866,102

857,294

Total loans

$

4,915,554

$

4,835,866

$

4,910,806

$

5,103,331

$

4,941,466

Deposit Portfolio

Noninterest-bearing demand

$

1,672,901

$

1,366,453

$

1,522,433

$

1,469,579

$

1,355,188

Interest-bearing:

Checking

1,697,326

1,619,436

1,601,449

1,568,888

1,581,216

Money market

852,836

787,688

819,455

785,871

826,454

Savings

665,710

669,277

653,256

597,966

580,748

Time

688,693

721,502

718,788

655,620

661,872

Brokered time

23,910

31,995

25,132

23,092

23,258

Total deposits

$

5,601,376

$

5,196,351

$

5,340,513

$

5,101,016

$

5,028,736


MIDLAND STATES BANCORP, INC.

CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)

For the Quarter Ended

September 30,

June 30,

March 31,

December 31,

September 30,

(dollars in thousands)

2021

2021

2021

2020

2020

Average Balance Sheets

Cash and cash equivalents

$

525,848

$

509,886

$

350,061

$

415,686

$

491,728

Investment securities

773,372

734,462

680,202

672,937

628,705

Loans

4,800,063

4,826,234

4,992,802

4,998,912

4,803,940

Loans held for sale

15,204

36,299

65,365

45,196

44,880

Nonmarketable equity securities

43,873

49,388

55,935

51,906

50,765

Total interest-earning assets

6,158,360

6,156,269

6,144,365

6,184,637

6,020,018

Non-earning assets

597,153

589,336

602,017

602,716

625,522

Total assets

$

6,755,513

$

6,745,605

$

6,746,382

$

6,787,353

$

6,645,540

Interest-bearing deposits

$

3,895,970

$

3,815,179

$

3,757,108

$

3,680,645

$

3,656,833

Short-term borrowings

68,103

65,727

75,544

62,432

64,010

FHLB advances and other borrowings

440,171

519,490

617,504

682,981

693,721

Subordinated debt

138,954

165,155

169,844

169,751

169,657

Trust preferred debentures

49,167

49,026

48,887

48,751

48,618

Total interest-bearing liabilities

4,592,365

4,614,577

4,668,887

4,644,560

4,632,839

Noninterest-bearing deposits

1,434,193

1,411,428

1,370,604

1,446,359

1,303,963

Other noninterest-bearing liabilities

77,204

78,521

82,230

73,840

75,859

Shareholders' equity

651,751

641,079

624,661

622,594

632,879

Total liabilities and shareholders' equity

$

6,755,513

$

6,745,605

$

6,746,382

$

6,787,353

$

6,645,540

Yields

Earning Assets

Cash and cash equivalents

0.16

%

0.11

%

0.11

%

0.12

%

0.10

%

Investment securities

2.34

%

2.43

%

2.51

%

2.65

%

2.86

%

Loans

4.42

%

4.43

%

4.50

%

4.58

%

4.57

%

Loans held for sale

2.79

%

2.88

%

2.74

%

3.14

%

2.92

%

Nonmarketable equity securities

5.05

%

4.94

%

4.93

%

5.22

%

5.26

%

Total interest-earning assets

3.79

%

3.83

%

4.02

%

4.06

%

4.01

%

Interest-Bearing Liabilities

Interest-bearing deposits

0.26

%

0.31

%

0.34

%

0.36

%

0.46

%

Short-term borrowings

0.12

%

0.12

%

0.13

%

0.14

%

0.17

%

FHLB advances and other borrowings

1.80

%

1.91

%

1.69

%

1.71

%

1.85

%

Subordinated debt

5.79

%

5.61

%

5.57

%

5.60

%

5.58

%

Trust preferred debentures

3.92

%

4.00

%

4.08

%

4.03

%

4.16

%

Total interest-bearing liabilities

0.61

%

0.72

%

0.75

%

0.79

%

0.89

%

Cost of Deposits

0.19

%

0.23

%

0.25

%

0.26

%

0.34

%

Net Interest Margin

3.34

%

3.29

%

3.45

%

3.47

%

3.33

%


MIDLAND STATES BANCORP, INC.

CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)

As of and for the Quarter Ended

September 30,

June 30,

March 31,

December 31,

September 30,

(dollars in thousands, except per share data)

2021

2021

2021

2020

2020

Asset Quality

Loans 30-89 days past due

$

16,772

$

20,224

$

24,819

$

31,460

$

28,188

Nonperforming loans

54,620

61,363

52,826

54,070

67,443

Nonperforming assets

69,261

76,926

75,004

75,432

84,795

Net charge-offs

2,989

4,023

1,706

2,328

5,292

Loans 30-89 days past due to total loans

0.34

%

0.42

%

0.51

%

0.62

%

0.57

%

Nonperforming loans to total loans

1.11

%

1.27

%

1.08

%

1.06

%

1.36

%

Nonperforming assets to total assets

0.98

%

1.16

%

1.09

%

1.10

%

1.27

%

Allowance for credit losses to total loans

1.13

%

1.21

%

1.28

%

1.18

%

1.07

%

Allowance for credit losses to nonperforming loans

101.93

%

95.60

%

118.67

%

111.79

%

78.25

%

Net charge-offs to average loans

0.25

%

0.33

%

0.14

%

0.19

%

0.44

%

Wealth Management

Trust assets under administration

$

4,058,168

$

4,077,581

$

3,560,427

$

3,480,759

$

3,260,893

Market Data

Book value per share at period end

$

29.64

$

28.96

$

28.43

$

27.83

$

27.51

Tangible book value per share at period end (1)

$

21.17

$

20.48

$

19.98

$

19.31

$

19.03

Market price at period end

$

24.73

$

26.27

$

27.74

$

17.87

$

12.85

Shares outstanding at period end

22,193,141

22,380,492

22,351,740

22,325,471

22,602,844

Capital

Total capital to risk-weighted assets

13.10

%

13.11

%

13.73

%

13.24

%

13.34

%

Tier 1 capital to risk-weighted assets

9.73

%

9.64

%

9.62

%

9.20

%

9.40

%

Tier 1 common capital to risk-weighted assets

8.55

%

8.44

%

8.39

%

7.99

%

8.18

%

Tier 1 leverage ratio

8.16

%

8.00

%

7.79

%

7.50

%

7.72

%

Tangible common equity to tangible assets (1)

6.80

%

7.12

%

6.67

%

6.46

%

6.61

%

(1) Non-GAAP financial measures. Refer to pages 13 - 15 for a reconciliation to the comparable GAAP financial measures.


MIDLAND STATES BANCORP, INC.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited)

Adjusted Earnings Reconciliation

For the Quarter Ended

September 30,

June 30,

March 31,

December 31,

September 30,

(dollars in thousands, except per share data)

2021

2021

2021

2020

2020

Income before income taxes - GAAP

$

25,431

$

19,041

$

24,040

$

10,746

$

3,270

Adjustments to noninterest income:

Gain on sales of investment securities, net

160

377

-

-

1,721

Other income

-

(27

)

75

3

(17

)

Total adjustments to noninterest income

160

350

75

3

1,704

Adjustments to noninterest expense:

Loss on mortgage servicing rights held for sale

79

143

-

617

188

Impairment related to facilities optimization

-

-

-

(10

)

12,651

FHLB advances prepayment fees

-

3,669

8

4,872

-

Integration and acquisition expenses

176

3,771

238

231

1,200

Total adjustments to noninterest expense

255

7,583

246

5,710

14,039

Adjusted earnings pre tax

25,526

26,274

24,211

16,453

15,605

Adjusted earnings tax

5,910

6,519

5,549

3,982

3,582

Adjusted earnings - non-GAAP

$

19,616

$

19,755

$

18,662

$

12,471

$

12,023

Adjusted diluted earnings per common share

$

0.86

$

0.86

$

0.82

$

0.54

$

0.52

Adjusted return on average assets

1.15

%

1.17

%

1.12

%

0.73

%

0.72

%

Adjusted return on average shareholders' equity

11.94

%

12.36

%

12.12

%

7.97

%

7.56

%

Adjusted return on average tangible common equity

16.82

%

17.52

%

17.39

%

11.50

%

11.04

%

Adjusted Pre-Tax, Pre-Provision Earnings Reconciliation

For the Quarter Ended

September 30,

June 30,

March 31,

December 31,

September 30,

(dollars in thousands)

2021

2021

2021

2020

2020

Adjusted earnings pre tax - non- GAAP

$

25,526

$

26,274

$

24,211

$

16,453

$

15,605

Provision for credit losses

(184

)

(455

)

3,565

10,058

11,728

Impairment on commercial mortgage servicing rights

3,037

1,148

1,275

2,344

1,418

Adjusted pre-tax, pre-provision earnings - non-GAAP

$

28,379

$

26,967

$

29,051

$

28,855

$

28,751

Adjusted pre-tax, pre-provision return on average assets

1.67

%

1.60

%

1.75

%

1.69

%

1.72

%


MIDLAND STATES BANCORP, INC.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued)

Efficiency Ratio Reconciliation

For the Quarter Ended

September 30,

June 30,

March 31,

December 31,

September 30,

(dollars in thousands)

2021

2021

2021

2020

2020

Noninterest expense - GAAP

$

41,292

$

48,941

$

39,079

$

47,048

$

53,901

Loss on mortgage servicing rights held for sale

(79

)

(143

)

-

(617

)

(188

)

Impairment related to facilities optimization

-

-

-

10

(12,651

)

FHLB advances prepayment fees

-

(3,669

)

(8

)

(4,872

)

-

Integration and acquisition expenses

(176

)

(3,771

)

(238

)

(231

)

(1,200

)

Adjusted noninterest expense

$

41,037

$

41,358

$

38,833

$

41,338

$

39,862

Net interest income - GAAP

$

51,396

$

50,110

$

51,868

$

53,516

$

49,980

Effect of tax-exempt income

402

383

386

413

430

Adjusted net interest income

51,798

50,493

52,254

53,929

50,410

Noninterest income - GAAP

15,143

17,417

14,816

14,336

18,919

Impairment on commercial mortgage servicing rights

3,037

1,148

1,275

2,344

1,418

Gain on sales of investment securities, net

(160

)

(377

)

-

-

(1,721

)

Other

-

27

(75

)

(3

)

17

Adjusted noninterest income

18,020

18,215

16,016

16,677

18,633

Adjusted total revenue

$

69,818

$

68,709

$

68,270

$

70,607

$

69,043

Efficiency ratio

58.78

%

60.19

%

56.88

%

58.55

%

57.74

%


MIDLAND STATES BANCORP, INC.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued)

Tangible Common Equity to Tangible Assets Ratio and Tangible Book Value Per Share

As of

September 30,

June 30,

March 31,

December 31,

September 30,

(dollars in thousands, except per share data)

2021

2021

2021

2020

2020

Shareholders' Equity to Tangible Common Equity

Total shareholders' equity—GAAP

$

657,844

$

648,186

$

635,467

$

621,391

$

621,880

Adjustments:

Goodwill

(161,904

)

(161,904

)

(161,904

)

(161,904

)

(161,904

)

Other intangible assets, net

(26,065

)

(27,900

)

(26,867

)

(28,382

)

(29,938

)

Tangible common equity

$

469,875

$

458,382

$

446,696

$

431,105

$

430,038

Total Assets to Tangible Assets:

Total assets—GAAP

$

7,093,959

$

6,630,010

$

6,884,786

$

6,868,540

$

6,700,045

Adjustments:

Goodwill

(161,904

)

(161,904

)

(161,904

)

(161,904

)

(161,904

)

Other intangible assets, net

(26,065

)

(27,900

)

(26,867

)

(28,382

)

(29,938

)

Tangible assets

$

6,905,990

$

6,440,206

$

6,696,015

$

6,678,254

$

6,508,203

Common Shares Outstanding

22,193,141

22,380,492

22,351,740

22,325,471

22,602,844

Tangible Common Equity to Tangible Assets

6.80

%

7.12

%

6.67

%

6.46

%

6.61

%

Tangible Book Value Per Share

$

21.17

$

20.48

$

19.98

$

19.31

$

19.03

Return on Average Tangible Common Equity (ROATCE)

For the Quarter Ended

September 30,

June 30,

March 31,

December 31,

September 30,

(dollars in thousands)

2021

2021

2021

2020

2020

Net income available to common shareholders

$

19,548

$

20,124

$

18,538

$

8,333

$

86

Average total shareholders' equity—GAAP

$

651,751

$

641,079

$

624,661

$

622,594

$

632,879

Adjustments:

Goodwill

(161,904

)

(161,904

)

(161,904

)

(161,904

)

(168,771

)

Other intangible assets, net

(27,132

)

(26,931

)

(27,578

)

(29,123

)

(30,690

)

Average tangible common equity

$

462,715

$

452,244

$

435,179

$

431,567

$

433,418

ROATCE

16.76

%

17.85

%

17.28

%

7.68

%

0.08

%



Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting