• Net income of $12.7 million, or $0.51 diluted earnings per share, which included $5.3 million, or $0.15 per diluted share, of integration and acquisition expenses

  • Acquisition of HomeStar Financial Group, Inc. completed on July 17, 2019

  • Total assets surpassed $6 billion at September 30, 2019

  • Efficiency ratio improved to 60.6% from 61.6% in prior quarter

EFFINGHAM, Ill., Oct. 24, 2019 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (Nasdaq: MSBI) (the “Company”) today reported net income of $12.7 million, or $0.51 diluted earnings per share, for the third quarter of 2019, which included $5.3 million, or $0.15 per diluted share, in integration and acquisition expenses. This compares to net income of $16.4 million, or $0.67 diluted earnings per share, for the second quarter of 2019, which included $0.3 million in integration and acquisition expenses, and net income of $8.5 million, or $0.35 diluted earnings per share, for the third quarter of 2018, which included $9.6 million in integration and acquisition expenses.

Jeffrey G. Ludwig, President and Chief Executive Officer of the Company, said, “Our third quarter results reflect the initial benefits of our acquisition of HomeStar Financial Group, Inc., which has provided us a leading position in the Kankakee, Illinois market and improved our deposit base. We continued to execute well on our strategic priorities in the quarter, which resulted in strong inflows of core deposits, further improvement in our operational efficiencies, and maintaining a relatively stable net interest margin, excluding accretion income. During the third quarter, we also issued $100 million of subordinated notes that will put us in a position to reduce our cost of borrowings over the next year and authorized a $25 million stock repurchase program. We believe these capital management actions, along with our history of increasing our quarterly dividend by at least 10% each year, will contribute in our efforts to efficiently manage our capital and deliver a strong total return for our shareholders.”

Factors Affecting Comparability

The Company acquired HomeStar Financial Group, Inc. (“HomeStar”) in July 2019. The financial position and results of operations of HomeStar prior to its acquisition date are not included in the Company’s financial results.

Adjusted Earnings

Financial results for the third quarter of 2019 included $5.3 million in integration and acquisition expenses. Excluding these and other expenses and certain income, adjusted earnings were $16.4 million, or $0.66 diluted earnings per share, for the third quarter of 2019. 

Financial results for the third quarter of 2018 included $9.6 million in integration and acquisition expenses. Excluding these and other expenses and certain income, adjusted earnings were $15.6 million, or $0.64 diluted earnings per share, for the third quarter of 2018. 

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 Income

Net interest income for the third quarter of 2019 was $49.5 million, an increase of 7.3% from $46.1 million for the second quarter of 2019. Excluding accretion income, net interest income increased $3.7 million from the prior quarter. Accretion income associated with purchased loan portfolios totaled $3.1 million for the third quarter of 2019, compared with $3.4 million for the second quarter of 2019. The increase in net interest income excluding accretion income was primarily attributable to the contribution from HomeStar.

Relative to the third quarter of 2018, net interest income increased $4.4 million, or 9.7%. Accretion income for the third quarter of 2018 was $1.7 million. Excluding the impact of accretion income, net interest income increased primarily due to the contribution of HomeStar.

Net Interest Margin

Net interest margin for the third quarter of 2019 was 3.70%, compared to 3.76% for the second quarter of 2019. The Company’s net interest margin benefits from accretion income on purchased loan portfolios, which contributed 20 and 25 basis points to net interest margin in the third quarter of 2019 and second quarter of 2019, respectively. Excluding the impact of accretion income, net interest margin decreased one basis point from the second quarter of 2019.

Relative to the third quarter of 2018, net interest margin increased from 3.59%. Accretion income on purchased loan portfolios contributed 10 basis points to net interest margin in the third quarter of 2018. Excluding the impact of accretion income, net interest margin increased one basis point compared to the third quarter of 2018. 

Noninterest Income

Noninterest income for the third quarter of 2019 was $19.6 million, unchanged from $19.6 million for the second quarter of 2019. 

Relative to the third quarter of 2018, noninterest income increased 7.3% from $18.3 million. The increase was attributable to higher wealth management revenue, interchange revenue and other income, partially offset by a decline in commercial FHA and residential mortgage banking revenue.

Wealth management revenue for the third quarter of 2019 was $6.0 million, an increase of 9.0% from $5.5 million in the second quarter of 2019, primarily due to an increase in estate fees. Compared to the third quarter of 2018, wealth management revenue increased 9.7%.

Commercial FHA revenue for the third quarter of 2019 was $2.9 million, compared to $4.9 million in the second quarter of 2019. Commercial FHA revenue in the third quarter of 2019 included a $1.1 million mortgage servicing rights (“MSR”) impairment, while the second quarter of 2019 included a $0.6 million recapture of MSR impairment. The Company originated $112.8 million in rate lock commitments during the third quarter of 2019, compared to $42.2 million in the prior quarter. Compared to the third quarter of 2018, commercial FHA revenue decreased $0.2 million.

Noninterest Expense

Noninterest expense for the third quarter of 2019 was $48.0 million, which included $5.3 million in integration and acquisition expenses and a $0.1 million gain on MSR held for sale, compared with $40.2 million for the second quarter of 2019, which included $0.3 million in integration and acquisition expenses and a $0.5 million gain on MSR held for sale. Excluding integration and acquisition expenses and gain on MSR held for sale, the increase in noninterest expense primarily reflects the addition of HomeStar’s operations.

Relative to the third quarter of 2018, noninterest expense decreased 4.6% from $50.3 million, which included $9.6 million in integration and acquisition expenses and a $0.3 million loss on MSR held for sale. Excluding these items, noninterest expense increased 5.7% from $40.5 million, primarily due to the addition of HomeStar’s operations.

Loan Portfolio

Total loans outstanding were $4.33 billion at September 30, 2019, compared with $4.07 billion at June 30, 2019 and $4.16 billion at September 30, 2018. The increase in total loans from June 30, 2019 was primarily due to the addition of HomeStar’s loan portfolio. Excluding the impact of HomeStar’s loan portfolio, total loans increased $44.1 million, or 1.1%, from June 30, 2019, primarily due to growth in the commercial loan portfolio. Equipment finance balances increased $57.1 million from June 30, 2019, which are booked within the commercial loans and leases portfolio, reflecting management’s efforts to grow the equipment finance business. The increase in total loans from September 30, 2018 was primarily attributable to the addition of HomeStar’s loan portfolio.

Deposits

Total deposits were $4.45 billion at September 30, 2019, compared with $4.01 billion at June 30, 2019, and $4.14 billion at September 30, 2018. The increases in total deposits from June 30, 2019 and September 30, 2018 were primarily attributable to the addition of HomeStar’s deposits. Excluding the impact of HomeStar’s deposits, total deposits increased $112.2 million, or 2.8%, from June 30, 2019. 

Asset Quality

Nonperforming loans totaled $45.2 million, or 1.04% of total loans, at September 30, 2019, compared with $50.7 million, or 1.24% of total loans, at June 30, 2019, and $38.6 million, or 0.93% of total loans, at September 30, 2018.  

Net charge-offs for the third quarter of 2019 were $5.4 million, or 0.49% of average loans on an annualized basis. 

The Company recorded a provision for loan losses of $4.4 million for the third quarter of 2019, which included an increase of $2.3 million to the specific reserve established for an existing nonperforming loan. The Company’s allowance for loan losses was 0.58% of total loans and 55.3% of nonperforming loans at September 30, 2019, compared with 0.64% of total loans and 51.2% of nonperforming loans at June 30, 2019. Fair market value discounts recorded in connection with acquired loan portfolios represented 0.51% of total loans at September 30, 2019, compared with 0.39% of total loans at June 30, 2019.

Capital

At September 30, 2019, the Company exceeded all regulatory capital requirements under Basel III and was considered to be a ‘‘well-capitalized’’ financial institution, as summarized in the following table:

 September 30,
2019
Well Capitalized
Regulatory Requirements
Total capital to risk-weighted assets14.82%10.00%
Tier 1 capital to risk-weighted assets10.35%8.00%
Tier 1 leverage ratio8.77%5.00%
Common equity Tier 1 capital9.02%6.50%
Tangible common equity to tangible assets (1)7.58%NA

(1) A non-GAAP financial measure. Refer to page 14 for a reconciliation to the comparable GAAP financial measure.

Stock Repurchase Program

During the third quarter of 2019, the Company repurchased 71,603 shares of its common stock at a weighted average price of $25.58 under its stock repurchase program, which authorized the repurchase of up to $25 million of its common stock. As of September 30, 2019, the Company had $23.2 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 25, 2019 to discuss its financial results. The call can be accessed via telephone at (877) 516-3531; conference ID: 3089402. A recorded replay can be accessed through November 2, 2019 by dialing (855) 859-2056; conference ID: 3089402.

A slide presentation relating to the third quarter 2019 results will be accessible prior to the scheduled conference call. 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, 2019, the Company had total assets of approximately $6.11 billion and its Wealth Management Group had assets under administration of approximately $3.28 billion. Midland provides a full range of commercial and consumer banking products and services, business equipment financing, merchant credit card services, trust and investment management, and insurance and financial planning services. In addition, multi-family and healthcare facility FHA financing is provided through Love Funding, Midland’s non-bank subsidiary. For additional information, visit https://www.midlandsb.com/ or follow Midland on LinkedIn at 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,” “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 changes in the financial markets; changes in business plans as circumstances warrant; risks relating to acquisitions; 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" or "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
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) 2019 2019 2019 2018 2018 
Earnings Summary                     
Net interest income $49,450  $46,077  $45,601  $48,535  $45,081  
Provision for loan losses  4,361   4,076   3,243   3,467   2,103  
Noninterest income  19,606   19,587   17,075   21,170   18,272  
Noninterest expense  48,025   40,194   41,097   45,375   50,317  
Income before income taxes  16,670   21,394   18,336   20,863   10,933  
Income taxes  4,015   5,039   4,354   4,527   2,436  
Net income  12,655   16,355   13,982   16,336   8,497  
Preferred stock dividends, net  (22)   34   34   34   35  
Net income available to common shareholders $12,677  $16,321  $13,948  $16,302  $8,462  
                      
Diluted earnings per common share $0.51  $0.67  $0.57  $0.67  $0.35  
Weighted average shares outstanding - diluted  24,684,529   24,303,211   24,204,661   24,200,346   24,325,743  
Return on average assets  0.84%  1.17%  1.01%  1.14%  0.59% 
Return on average shareholders' equity  7.71%  10.43%  9.23%  10.81%  5.68% 
Return on average tangible common equity (1)  11.19%  15.34%  13.79%  16.40%  8.69% 
Net interest margin  3.70%  3.76%  3.73%  3.85%  3.59% 
Efficiency ratio (1)  60.63%  61.58%  64.73%  65.50%  63.02% 
                      
Adjusted Earnings Performance Summary                     
Adjusted earnings (1) $16,422  $16,196  $14,098  $16,397  $15,632  
Adjusted diluted earnings per common share (1) $0.66  $0.66  $0.58  $0.67  $0.64  
Adjusted return on average assets (1)  1.09%  1.16%  1.02%  1.14%  1.09% 
Adjusted return on average shareholders' equity (1)  10.01%  10.33%  9.31%  10.85%  10.45% 
Adjusted return on average tangible common equity (1)  14.52%  15.19%  13.90%  16.46%  16.02% 
                      
(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) 2019 2019 2019 2018 2018 
Net interest income:                     
Total interest income $65,006   $60,636   $59,432  $61,592  $56,987  
Total interest expense  15,556    14,559    13,831   13,057   11,906  
Net interest income  49,450    46,077    45,601   48,535   45,081  
Provision for loan losses  4,361    4,076    3,243   3,467   2,103  
Net interest income after provision for loan losses  45,089    42,001    42,358   45,068   42,978  
Noninterest income:                     
Wealth management revenue  5,998    5,504    4,953   5,651   5,467  
Commercial FHA revenue  2,894    4,917    3,270   4,194   3,130  
Residential mortgage banking revenue  720    611    834   1,041   1,154  
Service charges on deposit accounts  3,008    2,639    2,520   2,976   2,804  
Interchange revenue  3,249    3,010    2,680   2,941   2,759  
Gain on sales of investment securities, net  25    14    -   469   -  
Other income  3,712    2,892    2,818   3,898   2,958  
Total noninterest income  19,606    19,587    17,075   21,170   18,272  
Noninterest expense:                     
Salaries and employee benefits  25,083    21,134    22,039   23,020   22,528  
Occupancy and equipment  4,793    4,500    4,832   4,914   5,040  
Data processing  5,443    4,987    4,891   5,660   10,817  
Professional  2,348    2,410    2,073   2,752   3,087  
Amortization of intangible assets  1,803    1,673    1,810   1,852   1,853  
(Gain) loss on mortgage servicing rights held for sale  (70)   (515)   -   -   270  
Other expense  8,625    6,005    5,452   7,177   6,722  
Total noninterest expense  48,025    40,194    41,097   45,375   50,317  
Income before income taxes  16,670    21,394    18,336   20,863   10,933  
Income taxes  4,015    5,039    4,354   4,527   2,436  
Net income  12,655    16,355    13,982   16,336   8,497  
Preferred stock dividends, net  (22)   34    34   34   35  
Net income available to common shareholders $12,677   $16,321   $13,948  $16,302  $8,462  
                      
Basic earnings per common share $0.51   $0.67   $0.58  $0.68  $0.35  
Diluted earnings per common share $0.51   $0.67   $0.57  $0.67  $0.35  
                      

 

                     
                     
MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                     
  As of 
  September 30,  June 30,  March 31,  December 31,  September 30, 
(in thousands) 2019 2019 2019 2018 2018
Assets                    
Cash and cash equivalents $409,346   $245,415   $276,480   $213,700   $242,433  
Investment securities  668,630    613,026    656,152    660,785    685,753  
Loans  4,328,835    4,073,527    4,092,106    4,137,551    4,156,282  
Allowance for loan losses  (24,917)   (25,925)   (23,091)   (20,903)   (19,631) 
Total loans, net  4,303,918    4,047,602    4,069,015    4,116,648    4,136,651  
Loans held for sale, at fair value  88,322    22,143    16,851    30,401    35,246  
Premises and equipment, net  93,896    94,824    94,514    94,840    95,062  
Other real estate owned  4,890    3,797    2,020    3,483    3,684  
Loan servicing rights, at lower of cost or fair value  54,124    54,191    52,957    53,447    51,626  
Mortgage servicing rights held for sale  1,860    159    257    3,545    4,419  
Intangible assets  36,690    33,893    35,566    37,376    39,228  
Goodwill  171,074    164,673    164,673    164,673    164,044  
Cash surrender value of life insurance policies  141,510    140,593    139,686    138,783    138,600  
Other assets  139,644    125,739    133,609    119,992    127,866  
Total assets $6,113,904   $5,546,055   $5,641,780   $5,637,673   $5,724,612  
                     
Liabilities and Shareholders' Equity 
Noninterest-bearing deposits $1,015,081   $902,286   $941,344   $972,164   $991,311  
Interest-bearing deposits  3,430,090    3,108,921    3,094,944    3,102,006    3,151,895  
Total deposits  4,445,171    4,011,207    4,036,288    4,074,170    4,143,206  
Short-term borrowings  122,294    113,844    115,832    124,235    145,450  
FHLB advances and other borrowings  559,932    582,387    669,009    640,631    652,253  
Subordinated debt  192,689    94,215    94,174    94,134    94,093  
Trust preferred debentures  48,165    48,041    47,918    47,794    47,676  
Other liabilities  90,131    56,473    54,391    48,184    47,788  
Total liabilities  5,458,382    4,906,167    5,017,612    5,029,148    5,130,466  
Total shareholders’ equity  655,522    639,888    624,168    608,525    594,146  
Total liabilities and shareholders’ equity $6,113,904   $5,546,055   $5,641,780   $5,637,673   $5,724,612  
                     

 

 
 
MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
 
  As of  
  September 30,  June 30,  March 31,  December 31,  September 30,  
(in thousands) 2019 2019 2019 2018 2018 
Loan Portfolio                     
Commercial loans and leases $1,292,511  $1,149,370  $1,122,621  $1,074,935  $1,034,546  
Commercial real estate loans  1,622,363   1,524,369   1,560,427   1,639,155   1,711,926  
Construction and land development loans 215,978   250,414   239,376   232,229   239,480  
Residential real estate loans  587,984   552,406   569,051   578,048   586,134  
Consumer loans  609,999   596,968   600,631   613,184   584,196  
Total loans $4,328,835  $4,073,527  $4,092,106  $4,137,551  $4,156,282  
                      
Deposit Portfolio                     
Noninterest-bearing demand deposits $1,015,081  $902,286  $941,344  $972,164  $991,311  
Interest-bearing:                     
Checking accounts  1,222,599   1,009,023   968,844   1,002,275   1,047,914  
Money market accounts  753,869   732,573   802,036   862,171   836,151  
Savings accounts  526,938   442,017   457,176   442,132   445,640  
Time deposits  833,038   785,337   685,700   633,787   633,654  
Brokered time deposits  93,646   139,971   181,188   161,641   188,536  
Total deposits $4,445,171  $4,011,207  $4,036,288  $4,074,170  $4,143,206  

 

                      
                      
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) 2019 2019 2019 2018 2018 
Average Balance Sheets                     
Cash and cash equivalents $259,427  $162,110  $152,078  $155,280  $154,526  
Investment securities  666,157   636,946   654,764   676,483   700,018  
Loans  4,352,635   4,086,720   4,128,893   4,139,831   4,106,367  
Loans held for sale  31,664   40,177   30,793   51,981   48,715  
Nonmarketable equity securities  44,010   44,217   44,279   42,708   42,770  
Total interest-earning assets  5,353,893   4,970,170   5,010,807   5,066,283   5,052,396  
Non-earning assets  636,028   618,023   618,996   624,378   639,323  
Total assets $5,989,921  $5,588,193  $5,629,803  $5,690,661  $5,691,719  
                      
Interest-bearing deposits $3,429,063  $3,107,660  $3,093,979  $3,123,134  $3,172,422  
Short-term borrowings  124,183   120,859   135,337   143,869   139,215  
FHLB advances and other borrowings  591,516   607,288   673,250   645,642   608,153  
Subordinated debt  106,090   94,196   94,156   94,115   94,075  
Trust preferred debentures  48,105   47,982   47,848   47,737   47,601  
Total interest-bearing liabilities  4,298,957   3,977,985   4,044,570   4,054,497   4,061,466  
Noninterest-bearing deposits  967,192   921,115   919,185   989,954   989,142  
Other noninterest-bearing liabilities  72,610   60,363   51,838   46,487   47,654  
Shareholders' equity  651,162   628,730   614,210   599,723   593,457  
Total liabilities and shareholders' equity $5,989,921  $5,588,193  $5,629,803  $5,690,661  $5,691,719  
                      
Yields   
Cash and cash equivalents  2.14%  2.43%  2.42%  2.24%  1.96% 
Investment securities  3.00%  3.11%  3.07%  3.04%  3.01% 
Loans  5.31%  5.32%  5.22%  5.28%  4.88% 
Loans held for sale  3.02%  4.50%  3.94%  3.92%  4.17% 
Nonmarketable equity securities  5.33%  5.42%  5.69%  5.20%  5.01% 
Total interest-earning assets  4.85%  4.94%  4.85%  4.87%  4.52% 
Interest-bearing deposits  1.08%  1.09%  0.97%  0.86%  0.77% 
Short-term borrowings  0.68%  0.70%  0.71%  0.67%  0.61% 
FHLB advances and other borrowings  2.36%  2.34%  2.32%  2.26%  2.09% 
Subordinated debt  6.30%  6.43%  6.43%  6.43%  6.44% 
Trust preferred debentures  6.83%  7.17%  7.38%  6.93%  6.81% 
Total interest-bearing liabilities  1.44%  1.47%  1.39%  1.28%  1.16% 
Net interest margin  3.70%  3.76%  3.73%  3.85%  3.59% 
                      

 

                      
                      
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) 2019 2019 2019 2018 2018 
Asset Quality                     
Loans 30-89 days past due $23,118  $21,554  $23,999  $25,213  $22,678  
Nonperforming loans  45,168   50,676   49,262   42,899   38,561  
Nonperforming assets  50,058   54,473   51,282   45,899   41,638  
Net charge-offs  5,369   1,242   1,055   2,195   718  
Loans 30-89 days past due to total loans  0.53%  0.53%  0.59%  0.61%  0.55% 
Nonperforming loans to total loans  1.04%  1.24%  1.20%  1.04%  0.93% 
Nonperforming assets to total assets  0.82%  0.98%  0.91%  0.81%  0.73% 
Allowance for loan losses to total loans  0.58%  0.64%  0.56%  0.51%  0.47% 
Allowance for loan losses to nonperforming loans 55.29%  51.16%  46.87%  48.73%  50.91% 
Net charge-offs to average loans  0.49%  0.12%  0.10%  0.21%  0.07% 
                      
Wealth Management                     
Trust assets under administration $3,281,260  $3,125,869  $3,097,091  $2,945,084  $3,218,013  
                      
Market Data                     
Book value per share at period end $26.93  $26.66  $26.08  $25.50  $24.96  
Tangible book value per share at period end (1) $18.40  $18.36  $17.68  $17.00  $16.38  
Market price at period end $26.05  $26.72  $24.06  $22.34  $32.10  
Shares outstanding at period end  24,338,748   23,897,038   23,827,438   23,751,798   23,694,637  
                      
Capital                     
Total capital to risk-weighted assets  14.82%  13.49%  13.25%  12.79%  12.35% 
Tier 1 capital to risk-weighted assets  10.35%  10.85%  10.65%  10.25%  9.85% 
Tier 1 leverage ratio  8.77%  9.27%  8.92%  8.53%  8.24% 
Tier 1 common capital to risk-weighted assets  9.02%  9.38%  9.16%  8.76%  8.37% 
Tangible common equity to tangible assets (1)  7.58%  8.20%  7.74%  7.43%  7.03% 
                      
(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 
                     
Adjusted Earnings Reconciliation                     
                     
 For the Quarter Ended  
 September 30,  June 30,  March 31,  December 31,  September 30,  
(dollars in thousands, except per share data)2019 2019 2019 2018 2018 
Income before income taxes - GAAP$16,670   $21,394   $18,336  $20,863   $10,933   
Adjustments to noninterest income:                    
Gain on sales of investment securities, net 25    14    -   469    -   
Other -    (23)   -   (1)   (12)  
 Total adjustments to noninterest income 25    (9)   -   468    (12)  
Adjustments to noninterest expense:                    
(Gain) loss on mortgage servicing rights held for sale (70)   (515)   -   -    270   
Integration and acquisition expenses 5,292    286    160   553    9,559   
 Total adjustments to noninterest expense 5,222    (229)   160   553    9,829   
Adjusted earnings pre tax 21,867    21,174    18,496   20,948    20,774   
Adjusted earnings tax 5,445    4,978    4,398   4,551    5,142   
Adjusted earnings - non-GAAP 16,422    16,196    14,098   16,397    15,632   
Preferred stock dividends, net (22)   34    34   34    35   
Adjusted earnings available to common shareholders - non-GAAP$16,444   $16,162   $14,064  $16,363   $15,597   
Adjusted diluted earnings per common share$0.66   $0.66   $0.58  $0.67   $0.64   
Adjusted return on average assets 1.09 %  1.16 %  1.02%  1.14 %  1.09 % 
Adjusted return on average shareholders' equity 10.01 %  10.33 %  9.31%  10.85 %  10.45 % 
Adjusted return on average tangible common equity 14.52 %  15.19 %  13.90%  16.46 %  16.02 % 
                     

 

                     
MIDLAND STATES BANCORP, INC. 
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (continued) 
                     
                     
Efficiency Ratio Reconciliation                    
 For the Quarter Ended  
 September 30,  June 30,  March 31,  December 31,  September 30,  
(dollars in thousands)2019 2019 2019 2018 2018 
Noninterest expense - GAAP$48,025   $40,194   $41,097   $45,375   $50,317   
Gain (loss) on mortgage servicing rights held for sale 70    515    -    -    (270)  
Integration and acquisition expenses (5,292)   (286)   (160)   (553)   (9,559)  
Adjusted noninterest expense$42,803   $40,423   $40,937   $44,822   $40,488   
                     
Net interest income - GAAP$49,450   $46,077   $45,601   $48,535   $45,081   
Effect of tax-exempt income 502    526    543    574    585   
Adjusted net interest income 49,952    46,603    46,144    49,109    45,666   
                     
Noninterest income - GAAP$19,606   $19,587   $17,075   $21,170   $18,272   
Loan servicing rights impairment (recapture) 1,060    (559)   25    (1,380)   297   
Gain on sales of investment securities, net (25)   (14)   -    (469)   -   
Other -    23    -    1    12   
Adjusted noninterest income 20,641    19,037    17,100    19,322    18,581   
                     
Adjusted total revenue$70,593   $65,640   $63,244   $68,431   $64,247   
                     
Efficiency ratio 60.63 %  61.58 %  64.73 %  65.50 %  63.02 % 
                     

 

                    
                    
MIDLAND STATES BANCORP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (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)2019 2019 2019 2018 2018
Shareholders' Equity to Tangible Common Equity                   
Total shareholders' equity—GAAP$655,522   $639,888   $624,168   $608,525   $594,146  
Adjustments:                   
Preferred stock -    (2,684)   (2,733)   (2,781)   (2,829) 
Goodwill (171,074)   (164,673)   (164,673)   (164,673)   (164,044) 
Other intangibles (36,690)   (33,893)   (35,566)   (37,376)   (39,228) 
Tangible common equity$447,758   $438,638   $421,196   $403,695   $388,045  
                    
Total Assets to Tangible Assets:                   
Total assets—GAAP$6,113,904   $5,546,055   $5,641,780   $5,637,673   $5,724,612  
Adjustments:                   
Goodwill (171,074)   (164,673)   (164,673)   (164,673)   (164,044) 
Other intangibles (36,690)   (33,893)   (35,566)   (37,376)   (39,228) 
Tangible assets$5,906,140   $5,347,489   $5,441,541   $5,435,624   $5,521,340  
                    
Common Shares Outstanding 24,338,748    23,897,038    23,827,438    23,751,798    23,694,637  
                    
Tangible Common Equity to Tangible Assets 7.58 %  8.20 %  7.74 %  7.43 %  7.03 %
Tangible Book Value Per Share$18.40   $18.36   $17.68   $17.00   $16.38  
                    
Return on Average Tangible Common Equity (ROATCE)                 
                    
 For the Quarter Ended
 September 30, June 30, March 31,  December 31,  September 30, 
(dollars in thousands)2019 2019 2019 2018 2018
Net income available to common shareholders$12,677   $16,321   $13,948   $16,302   $8,462  
                    
Average total shareholders' equity—GAAP$651,162   $628,730   $614,210   $599,723   $593,457  
Adjustments:                   
Preferred stock (814)   (2,708)   (2,759)   (2,812)   (2,859) 
Goodwill (166,389)   (164,673)   (164,673)   (164,051)   (164,044) 
Other intangibles (34,519)   (34,689)   (36,438)   (38,394)   (40,228) 
Average tangible common equity$449,440   $426,660   $410,340   $394,466   $386,326  
ROATCE 11.19 %  15.34 %  13.79 %  16.40 %  8.69 %