Summary
- Net income of $23.5 million, or $1.04 diluted earnings per share
- ROAA of 1.22%, ROAE of 13.34% and ROATCE of 20.24%
- Total loans increased 27.8% annualized from prior quarter
- Continued growth in noninterest-bearing and total deposits
- Nonperforming assets declined 14.2% from end of prior quarter
- Total capital ratio strengthened with the recent preferred stock offering
EFFINGHAM, Ill., Oct. 20, 2022 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (Nasdaq: MSBI) (the "Company") today reported net income of $23.5 million, or $1.04 diluted earnings per share, for the third quarter of 2022. This compares to net income of $21.9 million, or $0.97 diluted earnings per share, for the second quarter of 2022. This also compares to net income of $19.5 million, or $0.86 diluted earnings per share, for the third quarter of 2021.
Jeffrey G. Ludwig, President and Chief Executive Officer of the Company, said, "We continue to see healthy economic conditions throughout our markets and strong loan demand. Our commercial banking teams are effectively capitalizing on the loan demand across all areas of our lending, resulting in well balanced loan production and 28% annualized growth in total loans during the third quarter. The strong loan growth helped us to generate further improvement in earnings and our level of returns.
"Following the capital raised through our preferred stock offering in the third quarter, we are well positioned to support continued balance sheet growth, although we expect our level of loan growth to moderate as higher interest rates and economic uncertainty have a greater impact on loan demand. Even with a lower level of loan growth, given our higher net interest margin and increased efficiencies, we believe we can continue to generate strong financial results for our shareholders, which will help us to further increase our capital ratios and support the continued growth of our franchise," said Mr. Ludwig.
Net Interest Margin
Net interest margin for the third quarter of 2022 was 3.63%, a slight decline from 3.65% for the second quarter of 2022 as an increase in the cost of deposits more than offset the increase in the average yield on earning assets. The Company's net interest margin benefits from accretion income on purchased loan portfolios, which contributed 3 basis points to net interest margin in both the second and third quarters of 2022.
Relative to the third quarter of 2021, net interest margin increased 29 basis points from 3.34%, primarily due to an increase in the average yield on earning assets. Accretion income on purchased loan portfolios contributed 7 basis points to net interest margin in the third quarter of 2021. Excluding the impact of accretion income, net interest margin increased 33 basis points from the third quarter of 2021.
Net Interest Income
Net interest income for the third quarter of 2022 was $64.0 million, an increase of 4.4% from $61.3 million for the second quarter of 2022, which was primarily due to higher average loan balances. Accretion income associated with purchased loan portfolios totaled $0.5 million for the third quarter of 2022, compared with $0.6 million for the second quarter of 2022.
Relative to the third quarter of 2021, net interest income increased $12.6 million, or 24.6%, due to higher average earning assets and an increase in net interest margin. Accretion income for the third quarter of 2021 was $1.0 million.
Noninterest Income
Noninterest income for the third quarter of 2022 was $15.8 million, an increase of 8.3% from $14.6 million for the second quarter of 2022. The increase in noninterest income was primarily attributable to impairment on commercial mortgage servicing rights of approximately $0.9 million that negatively impacted noninterest income in the second quarter of 2022.
Relative to the third quarter of 2021, noninterest income increased 4.5% from $15.1 million. The increase was primarily attributable to impairment on commercial mortgage servicing rights that negatively impacted noninterest income in the third quarter of 2021.
Wealth management revenue for the third quarter of 2022 was $6.2 million, an increase of 0.9% from $6.1 million in the second quarter of 2022. Compared to the third quarter of 2021, wealth management revenue decreased 13.6%, primarily due to a decline in assets under administration resulting from market performance.
Noninterest Expense
Noninterest expense for the third quarter of 2022 was $43.5 million, an increase of 5.2% from $41.3 million in the second quarter of 2022. The increase was attributable to small increases across most expense items consistent with the growth of the Company including the full quarter impact of the branch purchase completed in June 2022.
Relative to the third quarter of 2021, noninterest expense increased 5.3% from $41.3 million, primarily due to higher marketing, loan, and other expense.
Loan Portfolio
Total loans outstanding were $6.20 billion at September 30, 2022, compared with $5.80 billion at June 30, 2022, and $4.92 billion at September 30, 2021. The increase in total loans from June 30, 2022 was attributable to growth in all portfolios with the exception of the SBA PPP loan portfolio, which continues to decline as loans are forgiven.
Equipment finance balances increased $49.4 million from June 30, 2022 to $1.03 billion at September 30, 2022.
Compared to loan balances at September 30, 2021, growth in equipment finance balances, other commercial loans, commercial real estate loans, and consumer loans was partially offset by declines in commercial FHA warehouse lines and PPP loans.
Deposits
Total deposits were $6.40 billion at September 30, 2022, compared with $6.18 billion at June 30, 2022, and $5.60 billion at September 30, 2021. The increase in total deposits from the end of the prior quarter was primarily attributable to growth in noninterest-bearing and lower-cost interest-bearing deposits.
Asset Quality
Nonperforming loans totaled $46.9 million, or 0.76% of total loans, at September 30, 2022, compared with $56.9 million, or 0.98% of total loans, at June 30, 2022. The decrease in nonperforming loans was attributable to a combination of paydowns, note sale, and a charge off of a previously resolved loan relationship. At September 30, 2021, nonperforming loans totaled $54.6 million, or 1.11% of total loans.
Net charge-offs for the third quarter of 2022 were $3.2 million, or 0.21% of average loans on an annualized basis, compared to net charge-offs of $2.8 million, or 0.20% of average loans on an annualized basis, for the second quarter of 2022, and $3.0 million, or 0.25% of average loans on an annualized basis, for the third quarter of 2021.
The Company recorded a provision for credit losses on loans of $7.0 million for the third quarter of 2022, which was primarily related to the growth in total loans and negative economic forecasts.
The Company's allowance for credit losses on loans was 0.95% of total loans and 125.1% of nonperforming loans at September 30, 2022, compared with 0.95% of total loans and 96.5% of nonperforming loans at June 30, 2022.
Capital
During the third quarter of 2022, the Company raised $115 million of capital through a preferred stock offering, which increased its total capital, tier 1 capital, and tier 1 leverage ratios. At September 30, 2022, 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 Sept. 30, 2022 | Consolidated Ratios as of Sept. 30, 2022 | Minimum Regulatory Requirements (2) | |
| Total capital to risk-weighted assets | 11.19% | 12.79% | 10.50% |
| Tier 1 capital to risk-weighted assets | 10.43% | 10.05% | 8.50% |
| Tier 1 leverage ratio | 9.75% | 9.40% | 4.00% |
| Common equity Tier 1 capital | 10.43% | 7.56% | 7.00% |
| Tangible common equity to tangible assets (1) | NA | 5.82% | NA |
(1) A non-GAAP financial measure. Refer to page 14 for a reconciliation to the comparable GAAP financial measure.
(2) Includes the capital conservation buffer of 2.5%.
Since the beginning of 2022, the impact of rising interest rates on the Company's investment portfolio has resulted in a $83.6 million decline in accumulated other comprehensive income (AOCI), which has negatively impacted tangible book value per share by $3.55, and the tangible common equity to tangible assets ratio by 103 basis points.
Stock Repurchase Program
During the third quarter of 2022, the Company did not repurchase any shares under its stock repurchase program. As of September 30, 2022, the Company had $18.6 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 21, 2022, to discuss its financial results.
Telephone Access: https://register.vevent.com/register/BIe092c94fe0b7469db1a7031df0e48485
A slide presentation relating to the third quarter 2022 financial results will be accessible prior to the scheduled conference call. This earnings release should be read together with the slide presentation. 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, 2022, the Company had total assets of approximately $7.81 billion, and its Wealth Management Group had assets under administration of approximately $3.45 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 Return on Average Assets," "Adjusted Return on Average Shareholders' Equity," "Adjusted Return on Average Tangible Common Equity," "Adjusted Pre-Tax, Pre-Provision Earnings," "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, the impact of inflation, the effects of the COVID-19 pandemic and its potential effects on the economic environment; 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) | 2022 | 2022 | 2022 | 2021 | 2021 | |||||||||||||||
| Earnings Summary | ||||||||||||||||||||
| Net interest income | $ | 64,024 | $ | 61,334 | $ | 56,827 | $ | 54,301 | $ | 51,396 | ||||||||||
| Provision for credit losses | 6,974 | 5,441 | 4,167 | 467 | (184 | ) | ||||||||||||||
| Noninterest income | 15,826 | 14,613 | 15,613 | 22,523 | 15,143 | |||||||||||||||
| Noninterest expense | 43,496 | 41,339 | 40,884 | 45,757 | 41,292 | |||||||||||||||
| Income before income taxes | 29,380 | 29,167 | 27,389 | 30,600 | 25,431 | |||||||||||||||
| Income taxes | 5,859 | 7,284 | 6,640 | 7,493 | 5,883 | |||||||||||||||
| Net income | $ | 23,521 | $ | 21,883 | $ | 20,749 | $ | 23,107 | $ | 19,548 | ||||||||||
| Diluted earnings per common share | $ | 1.04 | $ | 0.97 | $ | 0.92 | $ | 1.02 | $ | 0.86 | ||||||||||
| Weighted average shares outstanding - diluted | 22,390,438 | 22,360,819 | 22,350,307 | 22,350,771 | 22,577,880 | |||||||||||||||
| Return on average assets | 1.22 | % | 1.19 | % | 1.16 | % | 1.26 | % | 1.15 | % | ||||||||||
| Return on average shareholders' equity | 13.31 | % | 13.65 | % | 12.80 | % | 14.04 | % | 11.90 | % | ||||||||||
| Return on average tangible common equity (1) | 20.20 | % | 19.14 | % | 17.84 | % | 19.69 | % | 16.76 | % | ||||||||||
| Net interest margin | 3.63 | % | 3.65 | % | 3.50 | % | 3.25 | % | 3.34 | % | ||||||||||
| Efficiency ratio (1) | 54.26 | % | 53.10 | % | 55.73 | % | 52.61 | % | 58.78 | % | ||||||||||
| Adjusted Earnings Performance Summary (1) | ||||||||||||||||||||
| Adjusted earnings | $ | 23,568 | $ | 22,191 | $ | 20,815 | $ | 25,416 | $ | 19,616 | ||||||||||
| Adjusted diluted earnings per common share | $ | 1.04 | $ | 0.98 | $ | 0.92 | $ | 1.12 | $ | 0.86 | ||||||||||
| Adjusted return on average assets | 1.22 | % | 1.21 | % | 1.16 | % | 1.39 | % | 1.15 | % | ||||||||||
| Adjusted return on average shareholders' equity | 13.34 | % | 13.84 | % | 12.84 | % | 15.44 | % | 11.94 | % | ||||||||||
| Adjusted return on average tangible common equity | 20.24 | % | 19.41 | % | 17.89 | % | 21.65 | % | 16.82 | % | ||||||||||
| Adjusted pre-tax, pre-provision earnings | $ | 36,415 | $ | 35,902 | $ | 32,041 | $ | 36,324 | $ | 28,379 | ||||||||||
| Adjusted pre-tax, pre-provision return on average assets | 1.89 | % | 1.95 | % | 1.79 | % | 1.98 | % | 1.67 | % | ||||||||||
| (1) Non-GAAP financial measures. Refer to pages 12 - 14 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) | 2022 | 2022 | 2022 | 2021 | 2021 | |||||||||||||||
| Net interest income: | ||||||||||||||||||||
| Interest income | $ | 79,556 | $ | 69,236 | $ | 62,748 | $ | 60,427 | $ | 58,490 | ||||||||||
| Interest expense | 15,532 | 7,902 | 5,921 | 6,126 | 7,094 | |||||||||||||||
| Net interest income | 64,024 | 61,334 | 56,827 | 54,301 | 51,396 | |||||||||||||||
| Provision for credit losses: | ||||||||||||||||||||
| Provision for credit losses on loans | 6,974 | 4,741 | 4,132 | - | - | |||||||||||||||
| Provision for credit losses on unfunded commitments | - | 700 | 256 | 388 | - | |||||||||||||||
| Provision for other credit losses | - | - | (221 | ) | 79 | (184 | ) | |||||||||||||
| Total provision for credit losses | 6,974 | 5,441 | 4,167 | 467 | (184 | ) | ||||||||||||||
| Net interest income after provision for credit losses | 57,050 | 55,893 | 52,660 | 53,834 | 51,580 | |||||||||||||||
| Noninterest income: | ||||||||||||||||||||
| Wealth management revenue | 6,199 | 6,143 | 7,139 | 7,176 | 7,175 | |||||||||||||||
| Residential mortgage banking revenue | 210 | 384 | 599 | 1,103 | 1,287 | |||||||||||||||
| Service charges on deposit accounts | 2,597 | 2,304 | 2,068 | 2,338 | 2,268 | |||||||||||||||
| Interchange revenue | 3,531 | 3,590 | 3,280 | 3,677 | 3,651 | |||||||||||||||
| (Loss) gain on sales of investment securities, net | (129 | ) | (101 | ) | - | - | 160 | |||||||||||||
| Gain on termination of hedged interest swap | - | - | - | 1,845 | - | |||||||||||||||
| Impairment on commercial mortgage servicing rights | - | (869 | ) | (394 | ) | (2,072 | ) | (3,037 | ) | |||||||||||
| Company-owned life insurance | 929 | 840 | 1,019 | 1,904 | 869 | |||||||||||||||
| Other income | 2,489 | 2,322 | 1,902 | 6,552 | 2,770 | |||||||||||||||
| Total noninterest income | 15,826 | 14,613 | 15,613 | 22,523 | 15,143 | |||||||||||||||
| Noninterest expense: | ||||||||||||||||||||
| Salaries and employee benefits | 22,889 | 22,645 | 21,870 | 22,109 | 22,175 | |||||||||||||||
| Occupancy and equipment | 3,850 | 3,489 | 3,755 | 3,429 | 3,701 | |||||||||||||||
| Data processing | 6,093 | 6,082 | 5,873 | 5,819 | 6,495 | |||||||||||||||
| Professional | 1,693 | 1,516 | 1,972 | 1,499 | 1,738 | |||||||||||||||
| Amortization of intangible assets | 1,361 | 1,318 | 1,398 | 1,425 | 1,445 | |||||||||||||||
| Loss on mortgage servicing rights held for sale | - | - | - | - | 79 | |||||||||||||||
| FHLB advances prepayment fees | - | - | - | 4,859 | - | |||||||||||||||
| Other expense | 7,610 | 6,289 | 6,016 | 6,617 | 5,659 | |||||||||||||||
| Total noninterest expense | 43,496 | 41,339 | 40,884 | 45,757 | 41,292 | |||||||||||||||
| Income before income taxes | 29,380 | 29,167 | 27,389 | 30,600 | 25,431 | |||||||||||||||
| Income taxes | 5,859 | 7,284 | 6,640 | 7,493 | 5,883 | |||||||||||||||
| Net income | $ | 23,521 | $ | 21,883 | $ | 20,749 | $ | 23,107 | $ | 19,548 | ||||||||||
| Basic earnings per common share | $ | 1.04 | $ | 0.97 | $ | 0.92 | $ | 1.03 | $ | 0.86 | ||||||||||
| Diluted earnings per common share | $ | 1.04 | $ | 0.97 | $ | 0.92 | $ | 1.02 | $ | 0.86 | ||||||||||
| MIDLAND STATES BANCORP, INC. | ||||||||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) | ||||||||||||||||||||
| As of | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| (in thousands) | 2022 | 2022 | 2022 | 2021 | 2021 | |||||||||||||||
| Assets | ||||||||||||||||||||
| Cash and cash equivalents | $ | 313,188 | $ | 270,117 | $ | 332,264 | $ | 680,371 | $ | 662,643 | ||||||||||
| Investment securities | 690,504 | 769,278 | 858,246 | 916,132 | 900,319 | |||||||||||||||
| Loans | 6,198,451 | 5,795,544 | 5,539,961 | 5,224,801 | 4,915,554 | |||||||||||||||
| Allowance for credit losses on loans | (58,639 | ) | (54,898 | ) | (52,938 | ) | (51,062 | ) | (55,675 | ) | ||||||||||
| Total loans, net | 6,139,812 | 5,740,646 | 5,487,023 | 5,173,739 | 4,859,879 | |||||||||||||||
| Loans held for sale | 4,338 | 5,298 | 8,931 | 32,045 | 26,621 | |||||||||||||||
| Premises and equipment, net | 77,519 | 77,668 | 77,857 | 79,220 | 79,701 | |||||||||||||||
| Other real estate owned | 11,141 | 11,131 | 11,537 | 12,059 | 11,931 | |||||||||||||||
| Loan servicing rights, at lower of cost or fair value | 1,297 | 25,879 | 27,484 | 28,865 | 30,916 | |||||||||||||||
| Commercial FHA mortgage loan servicing rights held for sale | 23,995 | - | - | - | - | |||||||||||||||
| Goodwill | 161,904 | 161,904 | 161,904 | 161,904 | 161,904 | |||||||||||||||
| Other intangible assets, net | 22,198 | 23,559 | 22,976 | 24,374 | 26,065 | |||||||||||||||
| Company-owned life insurance | 149,648 | 148,900 | 148,060 | 148,378 | 149,146 | |||||||||||||||
| Other assets | 226,333 | 201,432 | 202,433 | 186,718 | 184,834 | |||||||||||||||
| Total assets | $ | 7,821,877 | $ | 7,435,812 | $ | 7,338,715 | $ | 7,443,805 | $ | 7,093,959 | ||||||||||
| Liabilities and Shareholders' Equity | ||||||||||||||||||||
| Noninterest-bearing demand deposits | $ | 2,025,237 | $ | 1,972,261 | $ | 1,965,032 | $ | 2,245,701 | $ | 1,672,901 | ||||||||||
| Interest-bearing deposits | 4,370,015 | 4,212,177 | 4,092,507 | 3,864,947 | 3,928,475 | |||||||||||||||
| Total deposits | 6,395,252 | 6,184,438 | 6,057,539 | 6,110,648 | 5,601,376 | |||||||||||||||
| Short-term borrowings | 58,518 | 67,689 | 60,352 | 76,803 | 66,666 | |||||||||||||||
| FHLB advances and other borrowings | 360,000 | 285,000 | 310,171 | 310,171 | 440,171 | |||||||||||||||
| Subordinated debt | 139,370 | 139,277 | 139,184 | 139,091 | 138,998 | |||||||||||||||
| Trust preferred debentures | 49,824 | 49,674 | 49,524 | 49,374 | 49,235 | |||||||||||||||
| Other liabilities | 79,634 | 73,546 | 76,959 | 93,881 | 139,669 | |||||||||||||||
| Total liabilities | 7,082,598 | 6,799,624 | 6,693,729 | 6,779,968 | 6,436,115 | |||||||||||||||
| Total shareholders' equity | 739,279 | 636,188 | 644,986 | 663,837 | 657,844 | |||||||||||||||
| Total liabilities and shareholders' equity | $ | 7,821,877 | $ | 7,435,812 | $ | 7,338,715 | $ | 7,443,805 | $ | 7,093,959 | ||||||||||
| MIDLAND STATES BANCORP, INC. | ||||||||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) | ||||||||||||||||||||
| As of | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| (in thousands) | 2022 | 2022 | 2022 | 2021 | 2021 | |||||||||||||||
| Loan Portfolio | ||||||||||||||||||||
| Equipment finance loans | $ | 577,323 | $ | 546,267 | $ | 528,572 | $ | 521,973 | $ | 486,623 | ||||||||||
| Equipment finance leases | 457,611 | 439,202 | 429,000 | 423,280 | 412,430 | |||||||||||||||
| Commercial FHA warehouse lines | 51,309 | 23,872 | 83,999 | 91,927 | 180,248 | |||||||||||||||
| SBA PPP loans | 2,810 | 6,409 | 22,862 | 52,477 | 82,410 | |||||||||||||||
| Other commercial loans | 904,840 | 814,710 | 802,692 | 783,811 | 718,054 | |||||||||||||||
| Total commercial loans and leases | 1,993,893 | 1,830,460 | 1,867,125 | 1,873,468 | 1,879,765 | |||||||||||||||
| Commercial real estate | 2,466,303 | 2,335,655 | 2,114,041 | 1,816,828 | 1,562,013 | |||||||||||||||
| Construction and land development | 225,550 | 203,955 | 188,668 | 193,749 | 200,792 | |||||||||||||||
| Residential real estate | 356,225 | 340,103 | 329,331 | 338,151 | 344,414 | |||||||||||||||
| Consumer | 1,156,480 | 1,085,371 | 1,040,796 | 1,002,605 | 928,570 | |||||||||||||||
| Total loans | $ | 6,198,451 | $ | 5,795,544 | $ | 5,539,961 | $ | 5,224,801 | $ | 4,915,554 | ||||||||||
| Deposit Portfolio | ||||||||||||||||||||
| Noninterest-bearing demand | $ | 2,025,237 | $ | 1,972,261 | $ | 1,965,032 | $ | 2,245,701 | $ | 1,672,901 | ||||||||||
| Interest-bearing: | ||||||||||||||||||||
| Checking | 1,905,439 | 1,808,885 | 1,779,018 | 1,663,021 | 1,697,326 | |||||||||||||||
| Money market | 1,125,333 | 1,027,547 | 964,352 | 869,067 | 852,836 | |||||||||||||||
| Savings | 704,245 | 740,364 | 710,955 | 679,115 | 665,710 | |||||||||||||||
| Time | 620,960 | 620,363 | 619,386 | 630,583 | 688,693 | |||||||||||||||
| Brokered time | 14,038 | 15,018 | 18,796 | 23,161 | 23,910 | |||||||||||||||
| Total deposits | $ | 6,395,252 | $ | 6,184,438 | $ | 6,057,539 | $ | 6,110,648 | $ | 5,601,376 | ||||||||||
| 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) | 2022 | 2022 | 2022 | 2021 | 2021 | |||||||||||||||
| Average Balance Sheets | ||||||||||||||||||||
| Cash and cash equivalents | $ | 195,657 | $ | 226,517 | $ | 384,231 | $ | 685,655 | $ | 525,848 | ||||||||||
| Investment securities | 749,022 | 818,927 | 894,634 | 915,707 | 773,372 | |||||||||||||||
| Loans | 6,040,358 | 5,677,791 | 5,274,051 | 4,995,794 | 4,800,063 | |||||||||||||||
| Loans held for sale | 6,044 | 9,865 | 31,256 | 34,272 | 15,204 | |||||||||||||||
| Nonmarketable equity securities | 37,765 | 36,338 | 36,378 | 39,203 | 43,873 | |||||||||||||||
| Total interest-earning assets | 7,028,846 | 6,769,438 | 6,620,550 | 6,670,631 | 6,158,360 | |||||||||||||||
| Non-earning assets | 618,138 | 615,348 | 631,187 | 605,060 | 597,153 | |||||||||||||||
| Total assets | $ | 7,646,984 | $ | 7,384,786 | $ | 7,251,737 | $ | 7,275,691 | $ | 6,755,513 | ||||||||||
| Interest-bearing deposits | $ | 4,325,098 | $ | 4,152,764 | $ | 3,953,249 | $ | 3,913,475 | $ | 3,895,970 | ||||||||||
| Short-term borrowings | 58,271 | 59,301 | 70,044 | 66,677 | 68,103 | |||||||||||||||
| FHLB advances and other borrowings | 340,163 | 307,611 | 311,282 | 319,954 | 440,171 | |||||||||||||||
| Subordinated debt | 139,324 | 139,232 | 139,139 | 139,046 | 138,954 | |||||||||||||||
| Trust preferred debentures | 49,751 | 49,602 | 49,451 | 49,307 | 49,167 | |||||||||||||||
| Total interest-bearing liabilities | 4,912,607 | 4,708,510 | 4,523,165 | 4,488,459 | 4,592,365 | |||||||||||||||
| Noninterest-bearing deposits | 1,969,873 | 1,967,263 | 1,989,413 | 2,049,802 | 1,434,193 | |||||||||||||||
| Other noninterest-bearing liabilities | 63,638 | 66,009 | 81,832 | 84,538 | 77,204 | |||||||||||||||
| Shareholders' equity | 700,866 | 643,004 | 657,327 | 652,892 | 651,751 | |||||||||||||||
| Total liabilities and shareholders' equity | $ | 7,646,984 | $ | 7,384,786 | $ | 7,251,737 | $ | 7,275,691 | $ | 6,755,513 | ||||||||||
| Yields | ||||||||||||||||||||
| Earning Assets | ||||||||||||||||||||
| Cash and cash equivalents | 2.28 | % | 0.83 | % | 0.18 | % | 0.16 | % | 0.16 | % | ||||||||||
| Investment securities | 2.44 | % | 2.41 | % | 2.22 | % | 2.12 | % | 2.34 | % | ||||||||||
| Loans | 4.83 | % | 4.49 | % | 4.40 | % | 4.36 | % | 4.42 | % | ||||||||||
| Loans held for sale | 3.87 | % | 3.15 | % | 2.86 | % | 3.53 | % | 2.79 | % | ||||||||||
| Nonmarketable equity securities | 5.78 | % | 5.38 | % | 5.40 | % | 5.07 | % | 5.05 | % | ||||||||||
| Total interest-earning assets | 4.51 | % | 4.12 | % | 3.87 | % | 3.62 | % | 3.79 | % | ||||||||||
| Interest-Bearing Liabilities | ||||||||||||||||||||
| Interest-bearing deposits | 0.94 | % | 0.37 | % | 0.22 | % | 0.22 | % | 0.26 | % | ||||||||||
| Short-term borrowings | 0.19 | % | 0.15 | % | 0.14 | % | 0.12 | % | 0.12 | % | ||||||||||
| FHLB advances and other borrowings | 2.83 | % | 1.87 | % | 1.58 | % | 1.75 | % | 1.80 | % | ||||||||||
| Subordinated debt | 5.77 | % | 5.78 | % | 5.78 | % | 5.78 | % | 5.79 | % | ||||||||||
| Trust preferred debentures | 6.54 | % | 5.05 | % | 4.21 | % | 3.90 | % | 3.92 | % | ||||||||||
| Total interest-bearing liabilities | 1.25 | % | 0.67 | % | 0.53 | % | 0.54 | % | 0.61 | % | ||||||||||
| Cost of Deposits | 0.65 | % | 0.25 | % | 0.15 | % | 0.15 | % | 0.19 | % | ||||||||||
| Net Interest Margin | 3.63 | % | 3.65 | % | 3.50 | % | 3.25 | % | 3.34 | % | ||||||||||
| 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) | 2022 | 2022 | 2022 | 2021 | 2021 | |||||||||||||||
| Asset Quality | ||||||||||||||||||||
| Loans 30-89 days past due | $ | 28,275 | $ | 16,212 | $ | 29,044 | $ | 17,514 | $ | 16,772 | ||||||||||
| Nonperforming loans | 46,882 | 56,883 | 52,900 | 42,580 | 54,620 | |||||||||||||||
| Nonperforming assets | 59,524 | 69,344 | 66,164 | 57,068 | 69,261 | |||||||||||||||
| Net charge-offs | 3,233 | 2,781 | 2,256 | 4,613 | 2,989 | |||||||||||||||
| Loans 30-89 days past due to total loans | 0.46 | % | 0.28 | % | 0.52 | % | 0.34 | % | 0.34 | % | ||||||||||
| Nonperforming loans to total loans | 0.76 | % | 0.98 | % | 0.95 | % | 0.81 | % | 1.11 | % | ||||||||||
| Nonperforming assets to total assets | 0.76 | % | 0.93 | % | 0.90 | % | 0.77 | % | 0.98 | % | ||||||||||
| Allowance for credit losses to total loans | 0.95 | % | 0.95 | % | 0.96 | % | 0.98 | % | 1.13 | % | ||||||||||
| Allowance for credit losses to nonperforming loans | 125.08 | % | 96.51 | % | 100.07 | % | 119.92 | % | 101.93 | % | ||||||||||
| Net charge-offs to average loans | 0.21 | % | 0.20 | % | 0.17 | % | 0.37 | % | 0.25 | % | ||||||||||
| Wealth Management | ||||||||||||||||||||
| Trust assets under administration | $ | 3,445,244 | $ | 3,597,944 | $ | 4,044,138 | $ | 4,217,412 | $ | 4,058,168 | ||||||||||
| Market Data | ||||||||||||||||||||
| Book value per share at period end | $ | 28.48 | $ | 28.84 | $ | 29.26 | $ | 30.11 | $ | 29.64 | ||||||||||
| Tangible book value per share at period end (1) | $ | 20.14 | $ | 20.43 | $ | 20.87 | $ | 21.66 | $ | 21.17 | ||||||||||
| Market price at period end | $ | 23.57 | $ | 24.04 | $ | 28.86 | $ | 24.79 | $ | 24.73 | ||||||||||
| Common shares outstanding at period end | 22,074,740 | 22,060,255 | 22,044,626 | 22,050,537 | 22,193,141 | |||||||||||||||
| Capital | ||||||||||||||||||||
| Total capital to risk-weighted assets | 12.79 | % | 11.44 | % | 11.74 | % | 12.19 | % | 13.10 | % | ||||||||||
| Tier 1 capital to risk-weighted assets | 10.05 | % | 8.63 | % | 8.82 | % | 9.16 | % | 9.73 | % | ||||||||||
| Tier 1 common capital to risk-weighted assets | 7.56 | % | 7.66 | % | 7.80 | % | 8.08 | % | 8.55 | % | ||||||||||
| Tier 1 leverage ratio | 9.40 | % | 7.98 | % | 7.96 | % | 7.75 | % | 8.16 | % | ||||||||||
| Tangible common equity to tangible assets (1) | 5.82 | % | 6.22 | % | 6.43 | % | 6.58 | % | 6.80 | % | ||||||||||
| (1) Non-GAAP financial measures. Refer to pages 12 - 14 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) | 2022 | 2022 | 2022 | 2021 | 2021 | |||||||||||||||
| Income before income taxes - GAAP | $ | 29,380 | $ | 29,167 | $ | 27,389 | $ | 30,600 | $ | 25,431 | ||||||||||
| Adjustments to noninterest income: | ||||||||||||||||||||
| Loss (gain) on sales of investment securities, net | 129 | 101 | - | - | (160 | ) | ||||||||||||||
| (Gain) on termination of hedged interest rate swap | - | - | - | (1,845 | ) | - | ||||||||||||||
| Total adjustments to noninterest income | 129 | 101 | - | (1,845 | ) | (160 | ) | |||||||||||||
| Adjustments to noninterest expense: | ||||||||||||||||||||
| (Loss) on mortgage servicing rights held for sale | - | - | - | - | (79 | ) | ||||||||||||||
| FHLB advances prepayment fees | - | - | - | (4,859 | ) | - | ||||||||||||||
| Integration and acquisition expenses | 68 | (324 | ) | (91 | ) | (171 | ) | (176 | ) | |||||||||||
| Total adjustments to noninterest expense | 68 | (324 | ) | (91 | ) | (5,030 | ) | (255 | ) | |||||||||||
| Adjusted earnings pre tax | 29,441 | 29,592 | 27,480 | 33,785 | 25,526 | |||||||||||||||
| Adjusted earnings tax | 5,873 | 7,401 | 6,665 | 8,369 | 5,910 | |||||||||||||||
| Adjusted earnings - non-GAAP | $ | 23,568 | $ | 22,191 | $ | 20,815 | $ | 25,416 | $ | 19,616 | ||||||||||
| Adjusted diluted earnings per common share | $ | 1.04 | $ | 0.98 | $ | 0.92 | $ | 1.12 | $ | 0.86 | ||||||||||
| Adjusted return on average assets | 1.22 | % | 1.21 | % | 1.16 | % | 1.39 | % | 1.15 | % | ||||||||||
| Adjusted return on average shareholders' equity | 13.34 | % | 13.84 | % | 12.84 | % | 15.44 | % | 11.94 | % | ||||||||||
| Adjusted return on average tangible common equity | 20.24 | % | 19.41 | % | 17.89 | % | 21.65 | % | 16.82 | % | ||||||||||
| Adjusted Pre-Tax, Pre-Provision Earnings Reconciliation | ||||||||||||||||||||
| For the Quarter Ended | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| (dollars in thousands) | 2022 | 2022 | 2022 | 2021 | 2021 | |||||||||||||||
| Adjusted earnings pre tax - non-GAAP | $ | 29,441 | $ | 29,592 | $ | 27,480 | $ | 33,785 | $ | 25,526 | ||||||||||
| Provision for credit losses | 6,974 | 5,441 | 4,167 | 467 | (184 | ) | ||||||||||||||
| Impairment on commercial mortgage servicing rights | - | 869 | 394 | 2,072 | 3,037 | |||||||||||||||
| Adjusted pre-tax, pre-provision earnings - non-GAAP | $ | 36,415 | $ | 35,902 | $ | 32,041 | $ | 36,324 | $ | 28,379 | ||||||||||
| Adjusted pre-tax, pre-provision return on average assets | 1.89 | % | 1.95 | % | 1.79 | % | 1.98 | % | 1.67 | % | ||||||||||
| 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) | 2022 | 2022 | 2022 | 2021 | 2021 | |||||||||||||||
| Noninterest expense - GAAP | $ | 43,496 | $ | 41,339 | $ | 40,884 | $ | 45,757 | $ | 41,292 | ||||||||||
| Loss on mortgage servicing rights held for sale | - | - | - | - | (79 | ) | ||||||||||||||
| FHLB advances prepayment fees | - | - | - | (4,859 | ) | - | ||||||||||||||
| Integration and acquisition expenses | 68 | (324 | ) | (91 | ) | (171 | ) | (176 | ) | |||||||||||
| Adjusted noninterest expense | $ | 43,564 | $ | 41,015 | $ | 40,793 | $ | 40,727 | $ | 41,037 | ||||||||||
| Net interest income - GAAP | $ | 64,024 | $ | 61,334 | $ | 56,827 | $ | 54,301 | $ | 51,396 | ||||||||||
| Effect of tax-exempt income | 307 | 321 | 369 | 372 | 402 | |||||||||||||||
| Adjusted net interest income | 64,331 | 61,655 | 57,196 | 54,673 | 51,798 | |||||||||||||||
| Noninterest income - GAAP | 15,826 | 14,613 | 15,613 | 22,523 | 15,143 | |||||||||||||||
| Impairment on commercial mortgage servicing rights | - | 869 | 394 | 2,072 | 3,037 | |||||||||||||||
| Loss (gain) on sales of investment securities, net | 129 | 101 | - | - | (160 | ) | ||||||||||||||
| (Gain) on termination of hedged interest rate swap | - | - | - | (1,845 | ) | - | ||||||||||||||
| Adjusted noninterest income | 15,955 | 15,583 | 16,007 | 22,750 | 18,020 | |||||||||||||||
| Adjusted total revenue | $ | 80,286 | $ | 77,238 | $ | 73,203 | $ | 77,423 | $ | 69,818 | ||||||||||
| Efficiency ratio | 54.26 | % | 53.10 | % | 55.73 | % | 52.61 | % | 58.78 | % | ||||||||||
| 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) | 2022 | 2022 | 2022 | 2021 | 2021 | |||||||||||||||
| Shareholders' Equity to Tangible Common Equity | ||||||||||||||||||||
| Total shareholders' equity-GAAP | $ | 739,279 | $ | 636,188 | $ | 644,986 | $ | 663,837 | $ | 657,844 | ||||||||||
| Adjustments: | ||||||||||||||||||||
| Preferred Stock | (110,548 | ) | - | - | - | - | ||||||||||||||
| Goodwill | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | ||||||||||
| Other intangible assets, net | (22,198 | ) | (23,559 | ) | (22,976 | ) | (24,374 | ) | (26,065 | ) | ||||||||||
| Tangible common equity | $ | 444,629 | $ | 450,725 | $ | 460,106 | $ | 477,558 | $ | 469,875 | ||||||||||
| Total Assets to Tangible Assets: | ||||||||||||||||||||
| Total assets-GAAP | $ | 7,821,877 | $ | 7,435,812 | $ | 7,338,715 | $ | 7,443,805 | $ | 7,093,959 | ||||||||||
| Adjustments: | ||||||||||||||||||||
| Goodwill | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | ||||||||||
| Other intangible assets, net | (22,198 | ) | (23,559 | ) | (22,976 | ) | (24,374 | ) | (26,065 | ) | ||||||||||
| Tangible assets | $ | 7,637,775 | $ | 7,250,349 | $ | 7,153,835 | $ | 7,257,527 | $ | 6,905,990 | ||||||||||
| Common Shares Outstanding | 22,074,740 | 22,060,255 | 22,044,626 | 22,050,537 | 22,193,141 | |||||||||||||||
| Tangible Common Equity to Tangible Assets | 5.82 | % | 6.22 | % | 6.43 | % | 6.58 | % | 6.80 | % | ||||||||||
| Tangible Book Value Per Share | $ | 20.14 | $ | 20.43 | $ | 20.87 | $ | 21.66 | $ | 21.17 | ||||||||||
| Return on Average Tangible Common Equity (ROATCE) | ||||||||||||||||||||
| For the Quarter Ended | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| (dollars in thousands) | 2022 | 2022 | 2022 | 2021 | 2021 | |||||||||||||||
| Net income | $ | 23,521 | $ | 21,883 | $ | 20,749 | $ | 23,107 | $ | 19,548 | ||||||||||
| Average total shareholders' equity-GAAP | $ | 700,866 | $ | 643,004 | $ | 657,327 | $ | 652,892 | $ | 651,751 | ||||||||||
| Adjustments: | ||||||||||||||||||||
| Preferred Stock | (54,072 | ) | - | - | - | - | ||||||||||||||
| Goodwill | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | ||||||||||
| Other intangible assets, net | (22,859 | ) | (22,570 | ) | (23,638 | ) | (25,311 | ) | (27,132 | ) | ||||||||||
| Average tangible common equity | $ | 462,031 | $ | 458,530 | $ | 471,785 | $ | 465,677 | $ | 462,715 | ||||||||||
| ROATCE | 20.20 | % | 19.14 | % | 17.84 | % | 19.69 | % | 16.76 | % | ||||||||||
