Third Quarter 2023 Highlights:
- Net income available to common shareholders of $15.8 million, or $0.71 per diluted share
- Adjusted earnings per diluted share of $0.78 reflects impact of balance sheet repositioning that is expected to be accretive to earnings prospectively
- Common equity tier 1 capital ratio improved to 8.16%
- Efficiency ratio of 55.8% compared to 55.0% in prior quarter
EFFINGHAM, Ill., Oct. 26, 2023 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (Nasdaq: MSBI) (the “Company”) today reported net income available to common shareholders of $15.8 million, or $0.71 per diluted share, for the third quarter of 2023, compared to $19.3 million, or $0.86 per diluted share, for the second quarter of 2023. This also compares to net income available to common shareholders of $23.5 million, or $1.04 per diluted share, for the third quarter of 2022.
Financial results for the third quarter of 2023 included a one-time enhancement fee of $6.6 million related to the surrender and purchase of company-owned life insurance, a $4.5 million tax charge related to the surrender, and $5.0 million of losses on the sale of investment securities. Excluding these transactions, adjusted earnings available to common shareholders were $17.3 million, or $0.78 per diluted share.
Jeffrey G. Ludwig, President and Chief Executive Officer of the Company, said, “We delivered another quarter of strong financial results highlighted by good stability in our deposit base, net interest margin, and asset quality, as well as disciplined expense control that resulted in a decline in our non-interest expense from the prior quarter. Due to our strong financial performance and prudent balance sheet management, we had increases in all of our regulatory capital ratios, while also continuing to repurchase our common stock at below tangible book value, which we believe is in the best long-term interests of shareholders.
“While continuing to prioritize prudent risk management and maintaining disciplined expense control, we will continue to be active in our new business development efforts with a focus on adding new core deposit relationships with both retail and commercial customers. We also continue to invest in initiatives that we believe will enhance the long-term value of the franchise, including our Banking-as-a-Service platform with two new partnerships launching in the fourth quarter that will contribute low-cost deposits and generate fee income. We expect the Banking-as-a-Service initiative to begin making a meaningful contribution during 2024, which, along with our continued progress on adding new clients in our markets, should support profitable growth in the future, improve our level of returns, and create additional value for our shareholders,” said Mr. Ludwig.
Balance Sheet Highlights
Total assets were $7.98 billion at September 30, 2023, compared to $8.03 billion at June 30, 2023, and $7.82 billion at September 30, 2022. At September 30, 2023, portfolio loans were $6.28 billion, compared to $6.37 billion as of June 30, 2023, and $6.20 billion as of September 30, 2022.
Loans
During the third quarter of 2023, outstanding loans declined slightly as the Company continued to originate loans in a more selective and deliberate approach to balance liquidity and funding costs. Increases in construction and land development loans, commercial FHA warehouse lines, and residential real estate loans of $50.2 million, $18.0 million, and $3.7 million, respectively, were offset by decreases in all other loan categories. Consumer loans decreased $56.8 million due to loan payoffs and a decrease in loans originated through GreenSky.
| As of | |||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||
| (in thousands) | 2023 | 2023 | 2023 | 2022 | 2022 | ||||||||||
| Loan Portfolio | |||||||||||||||
| Commercial loans | $ | 943,761 | $ | 962,756 | $ | 937,920 | $ | 872,794 | $ | 907,651 | |||||
| Equipment finance loans | 578,931 | 614,633 | 632,205 | 616,751 | 577,323 | ||||||||||
| Equipment finance leases | 485,460 | 500,485 | 510,029 | 491,744 | 457,611 | ||||||||||
| Commercial FHA warehouse lines | 48,547 | 30,522 | 10,275 | 25,029 | 51,309 | ||||||||||
| Total commercial loans and leases | 2,056,699 | 2,108,396 | 2,090,429 | 2,006,318 | 1,993,894 | ||||||||||
| Commercial real estate | 2,412,164 | 2,443,995 | 2,448,158 | 2,433,159 | 2,466,303 | ||||||||||
| Construction and land development | 416,801 | 366,631 | 326,836 | 320,882 | 225,549 | ||||||||||
| Residential real estate | 375,211 | 371,486 | 369,910 | 366,094 | 356,225 | ||||||||||
| Consumer | 1,020,008 | 1,076,836 | 1,118,938 | 1,180,014 | 1,156,480 | ||||||||||
| Total loans | $ | 6,280,883 | $ | 6,367,344 | $ | 6,354,271 | $ | 6,306,467 | $ | 6,198,451 | |||||
Loan Quality
Credit quality metrics remained steady during the third quarter of 2023. Loans 30-89 days past due totaled $46.6 million as of September 30, 2023, compared to $44.2 million as of June 30, 2023. Non-performing loans were $56.0 million at September 30, 2023, compared to $54.8 million as of June 30, 2023, and non-performing assets were 0.74% of total assets at the end of the third quarter of 2023, compared to 0.72% at June 30, 2023.
At September 30, 2022, loans 30-89 days past due totaled $28.3 million, non-performing loans were $46.9 million, and non-performing assets as a percentage of total assets were 0.76%.
| As of and for the Three Months Ended | ||||||||||||||||||||
| (in thousands) | September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| 2023 | 2023 | 2023 | 2022 | 2022 | ||||||||||||||||
| Asset Quality | ||||||||||||||||||||
| Loans 30-89 days past due | $ | 46,608 | $ | 44,161 | $ | 30,895 | $ | 32,372 | $ | 28,275 | ||||||||||
| Nonperforming loans | 55,981 | 54,844 | 50,713 | 49,423 | 46,882 | |||||||||||||||
| Nonperforming assets | 58,677 | 57,688 | 58,806 | 57,824 | 59,524 | |||||||||||||||
| Substandard loans | 143,793 | 130,707 | 99,819 | 101,044 | 98,517 | |||||||||||||||
| Net charge-offs | 3,449 | 2,996 | 2,119 | 538 | 3,233 | |||||||||||||||
| Loans 30-89 days past due to total loans | 0.74 | % | 0.69 | % | 0.49 | % | 0.51 | % | 0.46 | % | ||||||||||
| Nonperforming loans to total loans | 0.89 | % | 0.86 | % | 0.80 | % | 0.78 | % | 0.76 | % | ||||||||||
| Nonperforming assets to total assets | 0.74 | % | 0.72 | % | 0.74 | % | 0.74 | % | 0.76 | % | ||||||||||
| Allowance for credit losses to total loans | 1.06 | % | 1.02 | % | 0.98 | % | 0.97 | % | 0.95 | % | ||||||||||
| Allowance for credit losses to nonperforming loans | 119.09 | % | 118.43 | % | 122.39 | % | 123.53 | % | 125.08 | % | ||||||||||
| Net charge-offs to average loans | 0.22 | % | 0.19 | % | 0.14 | % | 0.03 | % | 0.21 | % | ||||||||||
The Company continued to increase its allowance for credit losses on loans due to increased delinquencies and losses within our equipment finance portfolio. The allowance totaled $66.7 million at September 30, 2023, compared to $65.0 million at June 30, 2023, and $58.6 million at September 30, 2022. The allowance as a percentage of portfolio loans was 1.06% at September 30, 2023, compared to 1.02% at June 30, 2023, and 0.95% at September 30, 2022.
Deposits
Total deposits were $6.41 billion at September 30, 2023, compared with $6.43 billion at June 30, 2023 and $6.40 billion at September 30, 2022. The deposit mix continues to shift from noninterest-bearing deposits to interest-bearing deposits due to the recent rate increases announced by the Federal Reserve and the expectation that rates will remain high for a longer period.
| As of | |||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||
| (in thousands) | 2023 | 2023 | 2023 | 2022 | 2022 | ||||||||||
| Deposit Portfolio | |||||||||||||||
| Noninterest-bearing demand | $ | 1,154,515 | $ | 1,162,909 | $ | 1,215,758 | $ | 1,362,158 | $ | 1,362,481 | |||||
| Interest-bearing: | |||||||||||||||
| Checking | 2,572,224 | 2,499,693 | 2,502,827 | 2,494,073 | 2,568,195 | ||||||||||
| Money market | 1,090,962 | 1,226,470 | 1,263,813 | 1,184,101 | 1,125,333 | ||||||||||
| Savings | 582,359 | 624,005 | 636,832 | 661,932 | 704,245 | ||||||||||
| Time | 885,858 | 840,734 | 766,884 | 649,552 | 620,960 | ||||||||||
| Brokered time | 119,084 | 72,737 | 39,087 | 12,836 | 14,038 | ||||||||||
| Total deposits | $ | 6,405,002 | $ | 6,426,548 | $ | 6,425,201 | $ | 6,364,652 | $ | 6,395,252 | |||||
The Company estimates that uninsured deposits(1) totaled $1.28 billion, or 20% of total deposits, at September 30, 2023 compared to $1.21 billion, or 19%, at June 30, 2023.
(1) Uninsured deposits include the Call Report estimate of uninsured deposits less affiliate deposits, estimated insured portion of servicing deposits, additional structured FDIC coverage and collateralized deposits.
Results of Operations Highlights
Net Interest Income and Margin
During the third quarter of 2023, net interest income, on a tax-equivalent basis, totaled $58.8 million, a decrease of $0.2 million, or 0.4%, compared to $59.0 million for the second quarter of 2023. The tax-equivalent net interest margin for the third quarter of 2023 was 3.20%, compared with 3.23% in the second quarter of 2023. Net interest income and related margin, on a tax-equivalent basis, was $64.3 million and 3.63%, respectively, in the third quarter of 2022. The decline in the net interest income and margin was largely attributable to increased market interest rates resulting in the cost of funding liabilities increasing at a faster rate than the yield on earning assets.
Average interest-earning assets for the third quarter of 2023 were $7.28 billion, compared to $7.33 billion for the second quarter of 2023. The yield increased 14 basis points to 5.65% compared to the second quarter of 2023. Interest-earning assets averaged $7.03 billion for the third quarter of 2022.
Average loans were $6.30 billion for the third quarter of 2023, compared to $6.36 billion for the second quarter of 2023 and $6.04 billion for the third quarter of 2022. The yield on loans was 5.93% and 5.80% for the third and second quarters of 2023, respectively.
Investment securities averaged $863.0 million for the third quarter of 2023, and yielded 3.60%, compared to an average balance and yield of $861.4 million and 3.39%, respectively, for the second quarter of 2023. The Company purchased additional investments and repositioned out of lower-yielding securities in favor of higher-yielding instruments resulting in the increased average balance and yield. The Company incurred net losses on sales of $5.0 million in the third quarter of 2023. The repositioning is expected to improve the overall margin, liquidity, and capital allocations. Investment securities averaged $749.0 million for the third quarter of 2022.
Average interest-bearing deposits were $5.35 billion for the third quarter of 2023, compared to $5.26 billion for the second quarter of 2023, and $4.92 billion for the third quarter of 2022. Cost of interest-bearing deposits was 2.80% in the third quarter of 2023, which represents a 24 basis point increase from the second quarter of 2023. A competitive market, driven by rising interest rates and increased competition, were contributing factors to the increase in deposit costs.
| For the Three Months Ended | |||||||||||||||||||||||||||
| September 30, | June 30, | September 30, | |||||||||||||||||||||||||
| (dollars in thousands) | 2023 | 2023 | 2022 | ||||||||||||||||||||||||
| Interest-earning assets | Average Balance | Interest & Fees | Yield/ Rate | Average Balance | Interest & Fees | Yield/ Rate | Average Balance | Interest & Fees | Yield/ Rate | ||||||||||||||||||
| Cash and cash equivalents | $ | 78,391 | $ | 1,036 | 5.24 | % | $ | 67,377 | $ | 852 | 5.07 | % | $ | 195,657 | $ | 1,125 | 2.28 | % | |||||||||
| Investment securities | 862,998 | 7,822 | 3.60 | 861,409 | 7,286 | 3.39 | 749,022 | 4,560 | 2.44 | ||||||||||||||||||
| Loans | 6,297,568 | 94,118 | 5.93 | 6,356,012 | 91,890 | 5.80 | 6,040,358 | 73,568 | 4.83 | ||||||||||||||||||
| Loans held for sale | 6,078 | 104 | 6.80 | 4,067 | 59 | 5.79 | 6,044 | 60 | 3.87 | ||||||||||||||||||
| Nonmarketable equity securities | 39,347 | 710 | 7.16 | 45,028 | 599 | 5.33 | 37,765 | 550 | 5.78 | ||||||||||||||||||
| Total interest-earning assets | $ | 7,284,382 | $ | 103,790 | 5.65 | % | $ | 7,333,893 | $ | 100,686 | 5.51 | % | $ | 7,028,846 | $ | 79,863 | 4.51 | % | |||||||||
| Noninterest-earning assets | 622,969 | 612,238 | 618,138 | ||||||||||||||||||||||||
| Total assets | $ | 7,907,351 | $ | 7,946,131 | $ | 7,646,984 | |||||||||||||||||||||
| Interest-Bearing Liabilities | |||||||||||||||||||||||||||
| Interest-bearing deposits | $ | 5,354,356 | $ | 37,769 | 2.80 | % | $ | 5,259,188 | $ | 33,617 | 2.56 | % | $ | 4,922,345 | $ | 10,249 | 0.83 | % | |||||||||
| Short-term borrowings | 20,127 | 14 | 0.28 | 22,018 | 14 | 0.26 | 58,271 | 28 | 0.19 | ||||||||||||||||||
| FHLB advances & other borrowings | 402,500 | 4,557 | 4.49 | 471,989 | 5,396 | 4.59 | 340,163 | 2,424 | 2.83 | ||||||||||||||||||
| Subordinated debt | 93,441 | 1,280 | 5.43 | 97,278 | 1,335 | 5.51 | 139,324 | 2,010 | 5.77 | ||||||||||||||||||
| Trust preferred debentures | 50,379 | 1,369 | 10.78 | 50,218 | 1,289 | 10.29 | 49,751 | 821 | 6.54 | ||||||||||||||||||
| Total interest-bearing liabilities | $ | 5,920,803 | $ | 44,989 | 3.01 | % | $ | 5,900,691 | $ | 41,651 | 2.83 | % | $ | 5,509,854 | $ | 15,532 | 1.12 | % | |||||||||
| Noninterest-bearing deposits | 1,116,988 | 1,187,584 | 1,372,626 | ||||||||||||||||||||||||
| Other noninterest-bearing liabilities | 97,935 | 81,065 | 63,638 | ||||||||||||||||||||||||
| Shareholders’ equity | 771,625 | 776,791 | 700,866 | ||||||||||||||||||||||||
| Total liabilities and shareholder’s equity | $ | 7,907,351 | $ | 7,946,131 | $ | 7,646,984 | |||||||||||||||||||||
| Net Interest Margin | $ | 58,801 | 3.20 | % | $ | 59,035 | 3.23 | % | $ | 64,331 | 3.63 | % | |||||||||||||||
| Cost of Deposits | 2.32 | % | 2.09 | % | 0.65 | % | |||||||||||||||||||||
(1) Interest income and average rates for tax-exempt loans and securities are presented on a tax-equivalent basis, assuming a federal income tax rate of 21%. Tax-equivalent adjustments totaled $0.2 million, $0.2 million and $0.3 million for the three months ended September 30, 2023, June 30, 2023 and September 30, 2022, respectively.
During the nine months ended September 30, 2023, net interest income, on a tax-equivalent basis, decreased to $178.6 million, with a tax-equivalent net interest margin of 3.27%, compared to net interest income, on a tax-equivalent basis, of $183.2 million, and a tax-equivalent net interest margin of 3.60% for the nine months ended September 30, 2022.
The yield on earning assets increased 133 basis points to 5.50% for the nine months ended September 30, 2023 compared to the same period one year prior. However, the cost of interest-bearing liabilities increased at a faster rate during this period, increasing 203 basis points to 2.77% for the nine months ended September 30, 2023.
| For the Nine Months Ended | ||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||
| (dollars in thousands) | 2023 | 2022 | ||||||||||||||||
| Interest-earning assets | Average Balance | Interest & Fees | Yield/ Rate | Average Balance | Interest & Fees | Yield/ Rate | ||||||||||||
| Cash and cash equivalents | $ | 76,939 | $ | 2,868 | 4.98 | % | $ | 268,111 | $ | 1,764 | 0.88 | % | ||||||
| Investment securities | 844,946 | 21,103 | 3.33 | 820,328 | 14,453 | 2.35 | ||||||||||||
| Loans | 6,324,578 | 274,005 | 5.79 | 5,666,874 | 194,442 | 4.59 | ||||||||||||
| Loans held for sale | 3,900 | 179 | 6.14 | 15,629 | 357 | 3.05 | ||||||||||||
| Nonmarketable equity securities | 44,034 | 2,104 | 6.39 | 36,832 | 1,521 | 5.52 | ||||||||||||
| Total interest-earning assets | $ | 7,294,397 | $ | 300,259 | 5.50 | % | $ | 6,807,774 | $ | 212,537 | 4.17 | % | ||||||
| Noninterest-earning assets | 615,383 | 621,510 | ||||||||||||||||
| Total assets | $ | 7,909,780 | $ | 7,429,284 | ||||||||||||||
| Interest-Bearing Liabilities | ||||||||||||||||||
| Interest-bearing deposits | $ | 5,223,852 | $ | 97,791 | 2.50 | % | $ | 4,717,610 | $ | 16,220 | 0.46 | % | ||||||
| Short-term borrowings | 26,865 | 53 | 0.26 | 62,495 | 73 | 0.16 | ||||||||||||
| FHLB advances & other borrowings | 471,084 | 15,959 | 4.53 | 319,791 | 5,071 | 2.12 | ||||||||||||
| Subordinated debt | 96,820 | 3,985 | 5.49 | 139,233 | 6,032 | 5.78 | ||||||||||||
| Trust preferred debentures | 50,216 | 3,887 | 10.35 | 49,603 | 1,959 | 5.28 | ||||||||||||
| Total interest-bearing liabilities | $ | 5,868,837 | $ | 121,675 | 2.77 | % | $ | 5,288,732 | $ | 29,355 | 0.74 | % | ||||||
| Noninterest-bearing deposits | 1,184,410 | 1,402,900 | ||||||||||||||||
| Other noninterest-bearing liabilities | 84,650 | 70,427 | ||||||||||||||||
| Shareholders’ equity | 771,883 | 667,225 | ||||||||||||||||
| Total liabilities and shareholder’s equity | $ | 7,909,780 | $ | 7,429,284 | ||||||||||||||
| Net Interest Margin | $ | 178,584 | 3.27 | % | $ | 183,182 | 3.60 | % | ||||||||||
| Cost of Deposits | 2.04 | % | 0.35 | % | ||||||||||||||
(1) Interest income and average rates for tax-exempt loans and securities are presented on a tax-equivalent basis, assuming a federal income tax rate of 21%. Tax-equivalent adjustments totaled $0.6 million and $1.0 million for the nine months ended September 30, 2023 and 2022, respectively.
Noninterest Income
Noninterest income was $18.2 million for the third quarter of 2023, compared to $18.8 million for the second quarter of 2023. Noninterest income for the third quarter of 2023 included a one-time enhancement fee of $6.6 million related to the surrender and purchase of company-owned life insurance, partially offset by $5.0 million of losses on the sale of investment securities. The second quarter of 2023 included an $0.8 million gain on the sale of OREO and a $0.7 million gain on the repurchase of subordinated debt, partially offset by $0.9 million of losses on the sale of investment securities. Excluding these transactions, noninterest income for the third quarter of 2023 and the second quarter of 2023 was $16.5 million and $18.2 million, respectively. Noninterest income for the third quarter of 2022 was $15.8 million and included $0.1 million loss on the sale of investment securities.
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||||
| (in thousands) | 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
| Noninterest income | ||||||||||||||||||||
| Wealth management revenue | $ | 6,288 | $ | 6,269 | $ | 6,199 | $ | 18,968 | $ | 19,481 | ||||||||||
| Residential mortgage banking revenue | 507 | 540 | 210 | 1,452 | 1,193 | |||||||||||||||
| Service charges on deposit accounts | 3,149 | 2,849 | 2,783 | 8,744 | 7,544 | |||||||||||||||
| Interchange revenue | 3,609 | 3,696 | 3,531 | 10,717 | 10,401 | |||||||||||||||
| Loss on sales of investment securities, net | (4,961 | ) | (869 | ) | (129 | ) | (6,478 | ) | (230 | ) | ||||||||||
| Gain on repurchase of subordinated debt, net | — | 676 | — | 676 | — | |||||||||||||||
| Gain (loss) on sales of other real estate owned, net | — | 819 | — | 819 | (131 | ) | ||||||||||||||
| Impairment on commercial mortgage servicing rights | — | — | — | — | (1,263 | ) | ||||||||||||||
| Company-owned life insurance | 7,558 | 891 | 929 | 9,325 | 2,788 | |||||||||||||||
| Other income | 2,035 | 3,882 | 2,303 | 8,494 | 6,269 | |||||||||||||||
| Total noninterest income | $ | 18,185 | $ | 18,753 | $ | 15,826 | $ | 52,717 | $ | 46,052 | ||||||||||
Noninterest Expense
Noninterest expense was $42.0 million in the third quarter of 2023, compared to $42.9 million in the second quarter of 2023, and $43.5 million in the third quarter of 2022. The efficiency ratio was 55.82% for the quarter ended September 30, 2023, compared to 55.01% for the quarter ended June 30, 2023, and 54.26% for the quarter ended September 30, 2022.
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||
| (in thousands) | 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||
| Noninterest expense | |||||||||||||||
| Salaries and employee benefits | $ | 22,307 | $ | 22,857 | $ | 22,889 | $ | 69,407 | $ | 67,404 | |||||
| Occupancy and equipment | 3,730 | 3,879 | 3,850 | 12,052 | 11,094 | ||||||||||
| Data processing | 6,468 | 6,544 | 6,093 | 19,323 | 18,048 | ||||||||||
| Professional | 1,554 | 1,663 | 1,693 | 4,977 | 5,181 | ||||||||||
| Amortization of intangible assets | 1,129 | 1,208 | 1,361 | 3,628 | 4,077 | ||||||||||
| FDIC insurance | 1,107 | 1,196 | 977 | 3,632 | 2,633 | ||||||||||
| Other expense | 5,743 | 5,547 | 6,633 | 16,395 | 17,282 | ||||||||||
| Total noninterest expense | $ | 42,038 | $ | 42,894 | $ | 43,496 | $ | 129,414 | $ | 125,719 | |||||
Salaries and employee benefits expenses were $22.3 million in the third quarter of 2023, compared to $22.9 million in both the second quarter of 2023 and the third quarter of 2022. Employees numbered 911 at September 30, 2023, compared to 915 at June 30, 2023, and 930 at September 30, 2022. The third quarter of 2023 included a decline in medical insurance expense of $0.7 million.
Income Tax Expense
Income tax expense was $11.5 million for the third quarter of 2023, as compared to $7.2 million for the second quarter of 2023 and $5.9 million for the third quarter of 2022. The resulting effective tax rates were 39.0%, 25.1% and 19.9% respectively. The third quarter of 2023 included tax charges of $4.5 million associated with the surrender of company-owned life insurance and $1.4 million related to the finalization of the 2022 federal and state tax returns. Exclusive of these items our effective tax rate is 25.1% for the third quarter of 2023.
Capital
At September 30, 2023, 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:
| As of September 30, 2023 | |||||
| Midland States Bank | Midland States Bancorp, Inc. | Minimum Regulatory Requirements (2) | |||
| Total capital to risk-weighted assets | 12.13% | 12.84% | 10.50% | ||
| Tier 1 capital to risk-weighted assets | 11.21% | 10.62% | 8.50% | ||
| Tier 1 leverage ratio | 10.21% | 9.67% | 4.00% | ||
| Common equity Tier 1 capital | 11.21% | 8.16% | 7.00% | ||
| Tangible common equity to tangible assets (1) | N/A | 6.09% | N/A | ||
(1) A non-GAAP financial measure. Refer to page 16 for a reconciliation to the comparable GAAP financial measure.
(2) Includes the capital conservation buffer of 2.5%.
The impact of rising interest rates on the Company’s investment portfolio and cash flow hedges has resulted in a $101.2 million accumulated other comprehensive loss at September 30, 2023, which impacts tangible book value by $4.68 per share.
Stock Repurchase Program
As previously disclosed, on December 6, 2022, the Company’s board of directors authorized a new share repurchase program, pursuant to which the Company is authorized to repurchase up to $25.0 million of common stock through December 31, 2023. During the third quarter of 2023, the Company repurchased 271,059 shares of its common stock at a weighted average price of $22.14 under its stock repurchase program. As of September 30, 2023, the Company had $10.1 million remaining under the current stock repurchase authorization.
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, 2023, the Company had total assets of approximately $7.98 billion, and its Wealth Management Group had assets under administration of approximately $3.50 billion. The Company 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 Earnings Available to Common Shareholders,” “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,” “Tangible Book Value Per Share excluding Accumulated Other Comprehensive Income,” 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, the measures in this press release 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, continuing effects of the failures of Silicon Valley Bank and Signature Bank, increased deposit volatility and potential regulatory developments; changes in the financial markets; changes in business plans as circumstances warrant; risks relating to acquisitions; 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) | ||||||||||||||||||||
| (dollars in thousands, except per share data) | As of and for the Three Months Ended | As of and for the Nine Months Ended | ||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||
| Earnings Summary | ||||||||||||||||||||
| Net interest income | $ | 58,596 | $ | 58,840 | $ | 64,024 | $ | 177,940 | $ | 182,185 | ||||||||||
| Provision for credit losses | 5,168 | 5,879 | 6,974 | 14,182 | 16,582 | |||||||||||||||
| Noninterest income | 18,185 | 18,753 | 15,826 | 52,717 | 46,052 | |||||||||||||||
| Noninterest expense | 42,038 | 42,894 | 43,496 | 129,414 | 125,719 | |||||||||||||||
| Income before income taxes | 29,575 | 28,820 | 29,380 | 87,061 | 85,936 | |||||||||||||||
| Income taxes | 11,533 | 7,245 | 5,859 | 25,672 | 19,783 | |||||||||||||||
| Net income | 18,042 | 21,575 | 23,521 | 61,389 | 66,153 | |||||||||||||||
| Preferred dividends | 2,229 | 2,228 | — | 6,685 | — | |||||||||||||||
| Net income available to common shareholders | $ | 15,813 | $ | 19,347 | $ | 23,521 | $ | 54,704 | $ | 66,153 | ||||||||||
| Diluted earnings per common share | $ | 0.71 | $ | 0.86 | $ | 1.04 | $ | 2.43 | $ | 2.92 | ||||||||||
| Weighted average common shares outstanding - diluted | 21,977,196 | 22,205,079 | 22,390,438 | 22,223,986 | 22,367,095 | |||||||||||||||
| Return on average assets | 0.91 | % | 1.09 | % | 1.22 | % | 1.04 | % | 1.19 | % | ||||||||||
| Return on average shareholders' equity | 9.28 | % | 11.14 | % | 13.31 | % | 10.63 | % | 13.26 | % | ||||||||||
| Return on average tangible common equity (1) | 13.03 | % | 15.99 | % | 20.20 | % | 15.22 | % | 19.06 | % | ||||||||||
| Net interest margin | 3.20 | % | 3.23 | % | 3.63 | % | 3.27 | % | 3.60 | % | ||||||||||
| Efficiency ratio (1) | 55.82 | % | 55.01 | % | 54.26 | % | 56.15 | % | 54.34 | % | ||||||||||
| Adjusted Earnings Performance Summary (1) | ||||||||||||||||||||
| Adjusted earnings available to common shareholders | $ | 17,278 | $ | 19,488 | $ | 23,568 | $ | 56,783 | $ | 66,574 | ||||||||||
| Adjusted diluted earnings per common share | $ | 0.78 | $ | 0.87 | $ | 1.04 | $ | 2.53 | $ | 2.94 | ||||||||||
| Adjusted return on average assets | 0.98 | % | 1.10 | % | 1.22 | % | 1.07 | % | 1.20 | % | ||||||||||
| Adjusted return on average shareholders' equity | 10.03 | % | 11.21 | % | 13.34 | % | 10.99 | % | 13.34 | % | ||||||||||
| Adjusted return on average tangible common equity | 14.24 | % | 16.10 | % | 20.24 | % | 15.80 | % | 19.18 | % | ||||||||||
| Adjusted pre-tax, pre-provision earnings | $ | 33,064 | $ | 34,892 | $ | 36,415 | $ | 100,405 | $ | 104,358 | ||||||||||
| Adjusted pre-tax, pre-provision return on average assets | 1.66 | % | 1.76 | % | 1.89 | % | 1.70 | % | 1.88 | % | ||||||||||
| Market Data | ||||||||||||||||||||
| Book value per share at period end | $ | 30.27 | $ | 30.49 | $ | 28.48 | ||||||||||||||
| Tangible book value per share at period end (1) | $ | 21.98 | $ | 22.24 | $ | 20.14 | ||||||||||||||
| Tangible book value per share excluding accumulated other comprehensive income at period end (1) | $ | 26.66 | $ | 26.11 | $ | 23.69 | ||||||||||||||
| Market price at period end | $ | 20.54 | $ | 19.91 | $ | 23.57 | ||||||||||||||
| Common shares outstanding at period end | 21,594,546 | 21,854,800 | 22,074,740 | |||||||||||||||||
| Capital | ||||||||||||||||||||
| Total capital to risk-weighted assets | 12.84 | % | 12.65 | % | 12.79 | % | ||||||||||||||
| Tier 1 capital to risk-weighted assets | 10.62 | % | 10.47 | % | 10.05 | % | ||||||||||||||
| Tier 1 common capital to risk-weighted assets | 8.16 | % | 8.03 | % | 7.56 | % | ||||||||||||||
| Tier 1 leverage ratio | 9.67 | % | 9.57 | % | 9.40 | % | ||||||||||||||
| Tangible common equity to tangible assets (1) | 6.09 | % | 6.19 | % | 5.82 | % | ||||||||||||||
| Wealth Management | ||||||||||||||||||||
| Trust assets under administration | $ | 3,501,225 | $ | 3,594,727 | $ | 3,355,019 | ||||||||||||||
(1) Non-GAAP financial measures. Refer to pages 14 - 16 for a reconciliation to the comparable GAAP financial measures.
| MIDLAND STATES BANCORP, INC. | ||||||||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) | ||||||||||||||||||||
| As of | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| (in thousands) | 2023 | 2023 | 2023 | 2022 | 2022 | |||||||||||||||
| Assets | ||||||||||||||||||||
| Cash and cash equivalents | $ | 132,132 | $ | 160,695 | $ | 138,310 | $ | 160,631 | $ | 313,188 | ||||||||||
| Investment securities | 839,344 | 887,003 | 821,005 | 776,860 | 690,504 | |||||||||||||||
| Loans | 6,280,883 | 6,367,344 | 6,354,271 | 6,306,467 | 6,198,451 | |||||||||||||||
| Allowance for credit losses on loans | (66,669 | ) | (64,950 | ) | (62,067 | ) | (61,051 | ) | (58,639 | ) | ||||||||||
| Total loans, net | 6,214,214 | 6,302,394 | 6,292,204 | 6,245,416 | 6,139,812 | |||||||||||||||
| Loans held for sale | 6,089 | 5,632 | 2,747 | 1,286 | 4,338 | |||||||||||||||
| Premises and equipment, net | 82,741 | 81,006 | 80,582 | 78,293 | 77,519 | |||||||||||||||
| Other real estate owned | 480 | 202 | 6,729 | 6,729 | 11,141 | |||||||||||||||
| Loan servicing rights, at lower of cost or fair value | 20,933 | 21,611 | 1,117 | 1,205 | 1,297 | |||||||||||||||
| Commercial FHA mortgage loan servicing rights held for sale | — | — | 20,745 | 20,745 | 23,995 | |||||||||||||||
| Goodwill | 161,904 | 161,904 | 161,904 | 161,904 | 161,904 | |||||||||||||||
| Other intangible assets, net | 17,238 | 18,367 | 19,575 | 20,866 | 22,198 | |||||||||||||||
| Company-owned life insurance | 208,390 | 152,210 | 151,319 | 150,443 | 149,648 | |||||||||||||||
| Other assets | 292,460 | 243,697 | 233,937 | 231,123 | 226,333 | |||||||||||||||
| Total assets | $ | 7,975,925 | $ | 8,034,721 | $ | 7,930,174 | $ | 7,855,501 | $ | 7,821,877 | ||||||||||
| Liabilities and Shareholders' Equity | ||||||||||||||||||||
| Noninterest-bearing demand deposits | $ | 1,154,515 | $ | 1,162,909 | $ | 1,215,758 | $ | 1,362,158 | $ | 1,362,481 | ||||||||||
| Interest-bearing deposits | 5,250,487 | 5,263,639 | 5,209,443 | 5,002,494 | 5,032,771 | |||||||||||||||
| Total deposits | 6,405,002 | 6,426,548 | 6,425,201 | 6,364,652 | 6,395,252 | |||||||||||||||
| Short-term borrowings | 17,998 | 21,783 | 31,173 | 42,311 | 58,518 | |||||||||||||||
| FHLB advances and other borrowings | 538,000 | 575,000 | 482,000 | 460,000 | 360,000 | |||||||||||||||
| Subordinated debt | 93,475 | 93,404 | 99,849 | 99,772 | 139,370 | |||||||||||||||
| Trust preferred debentures | 50,457 | 50,296 | 50,135 | 49,975 | 49,824 | |||||||||||||||
| Other liabilities | 106,743 | 90,869 | 66,173 | 80,217 | 79,634 | |||||||||||||||
| Total liabilities | 7,211,675 | 7,257,900 | 7,154,531 | 7,096,927 | 7,082,598 | |||||||||||||||
| Total shareholders’ equity | 764,250 | 776,821 | 775,643 | 758,574 | 739,279 | |||||||||||||||
| Total liabilities and shareholders’ equity | $ | 7,975,925 | $ | 8,034,721 | $ | 7,930,174 | $ | 7,855,501 | $ | 7,821,877 | ||||||||||
| MIDLAND STATES BANCORP, INC. | ||||||||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) | ||||||||||||||||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||||
| (in thousands, except per share data) | 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
| Net interest income: | ||||||||||||||||||||
| Interest income | $ | 103,585 | $ | 100,491 | $ | 79,556 | $ | 299,615 | $ | 211,540 | ||||||||||
| Interest expense | 44,989 | 41,651 | 15,532 | 121,675 | 29,355 | |||||||||||||||
| Net interest income | 58,596 | 58,840 | 64,024 | 177,940 | 182,185 | |||||||||||||||
| Provision for credit losses: | ||||||||||||||||||||
| Provision for credit losses on loans | 5,168 | 5,879 | 6,974 | 14,182 | 15,847 | |||||||||||||||
| Provision for credit losses on unfunded commitments | — | — | — | — | 956 | |||||||||||||||
| Provision for other credit losses | — | — | — | — | (221 | ) | ||||||||||||||
| Total provision for credit losses | 5,168 | 5,879 | 6,974 | 14,182 | 16,582 | |||||||||||||||
| Net interest income after provision for credit losses | 53,428 | 52,961 | 57,050 | 163,758 | 165,603 | |||||||||||||||
| Noninterest income: | ||||||||||||||||||||
| Wealth management revenue | 6,288 | 6,269 | 6,199 | 18,968 | 19,481 | |||||||||||||||
| Residential mortgage banking revenue | 507 | 540 | 210 | 1,452 | 1,193 | |||||||||||||||
| Service charges on deposit accounts | 3,149 | 2,849 | 2,783 | 8,744 | 7,544 | |||||||||||||||
| Interchange revenue | 3,609 | 3,696 | 3,531 | 10,717 | 10,401 | |||||||||||||||
| Loss on sales of investment securities, net | (4,961 | ) | (869 | ) | (129 | ) | (6,478 | ) | (230 | ) | ||||||||||
| Gain on repurchase of subordinated debt, net | — | 676 | — | 676 | — | |||||||||||||||
| Gain (loss) on sales of other real estate owned, net | — | 819 | — | 819 | (131 | ) | ||||||||||||||
| Impairment on commercial mortgage servicing rights | — | — | — | — | (1,263 | ) | ||||||||||||||
| Company-owned life insurance | 7,558 | 891 | 929 | 9,325 | 2,788 | |||||||||||||||
| Other income | 2,035 | 3,882 | 2,303 | 8,494 | 6,269 | |||||||||||||||
| Total noninterest income | 18,185 | 18,753 | 15,826 | 52,717 | 46,052 | |||||||||||||||
| Noninterest expense: | ||||||||||||||||||||
| Salaries and employee benefits | 22,307 | 22,857 | 22,889 | 69,407 | 67,404 | |||||||||||||||
| Occupancy and equipment | 3,730 | 3,879 | 3,850 | 12,052 | 11,094 | |||||||||||||||
| Data processing | 6,468 | 6,544 | 6,093 | 19,323 | 18,048 | |||||||||||||||
| Professional | 1,554 | 1,663 | 1,693 | 4,977 | 5,181 | |||||||||||||||
| Amortization of intangible assets | 1,129 | 1,208 | 1,361 | 3,628 | 4,077 | |||||||||||||||
| FDIC insurance | 1,107 | 1,196 | 977 | 3,632 | 2,633 | |||||||||||||||
| Other expense | 5,743 | 5,547 | 6,633 | 16,395 | 17,282 | |||||||||||||||
| Total noninterest expense | 42,038 | 42,894 | 43,496 | 129,414 | 125,719 | |||||||||||||||
| Income before income taxes | 29,575 | 28,820 | 29,380 | 87,061 | 85,936 | |||||||||||||||
| Income taxes | 11,533 | 7,245 | 5,859 | 25,672 | 19,783 | |||||||||||||||
| Net income | 18,042 | 21,575 | 23,521 | 61,389 | 66,153 | |||||||||||||||
| Preferred stock dividends | 2,229 | 2,228 | — | 6,685 | — | |||||||||||||||
| Net income available to common shareholders | $ | 15,813 | $ | 19,347 | $ | 23,521 | $ | 54,704 | $ | 66,153 | ||||||||||
| Basic earnings per common share | $ | 0.71 | $ | 0.86 | $ | 1.04 | $ | 2.43 | $ | 2.93 | ||||||||||
| Diluted earnings per common share | $ | 0.71 | $ | 0.86 | $ | 1.04 | $ | 2.43 | $ | 2.92 | ||||||||||
| MIDLAND STATES BANCORP, INC. | ||||||||||||||||||||
| RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) | ||||||||||||||||||||
| Adjusted Earnings Reconciliation | ||||||||||||||||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||||
| (dollars in thousands, except per share data) | 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
| Income before income taxes - GAAP | $ | 29,575 | $ | 28,820 | $ | 29,380 | $ | 87,061 | $ | 85,936 | ||||||||||
| Adjustments to noninterest income: | ||||||||||||||||||||
| Loss on sales of investment securities, net | 4,961 | 869 | 129 | 6,478 | 230 | |||||||||||||||
| (Gain) on repurchase of subordinated debt | — | (676 | ) | — | (676 | ) | — | |||||||||||||
| Company-owned life insurance enhancement fee | (6,640 | ) | — | — | (6,640 | ) | — | |||||||||||||
| Total adjustments to noninterest income | (1,679 | ) | 193 | 129 | (838 | ) | 230 | |||||||||||||
| Adjustments to noninterest expense: | ||||||||||||||||||||
| Integration and acquisition expenses | — | — | 68 | — | (347 | ) | ||||||||||||||
| Total adjustments to noninterest expense | — | — | 68 | — | (347 | ) | ||||||||||||||
| Adjusted earnings pre tax - non-GAAP | 27,896 | 29,013 | 29,441 | 86,223 | 86,513 | |||||||||||||||
| Adjusted earnings tax | 8,389 | 7,297 | 5,873 | 22,755 | 19,939 | |||||||||||||||
| Adjusted earnings - non-GAAP | 19,507 | 21,716 | 23,568 | 63,468 | 66,574 | |||||||||||||||
| Preferred stock dividends | 2,229 | 2,228 | — | 6,685 | — | |||||||||||||||
| Adjusted earnings available to common shareholders | $ | 17,278 | $ | 19,488 | $ | 23,568 | $ | 56,783 | $ | 66,574 | ||||||||||
| Adjusted diluted earnings per common share | $ | 0.78 | $ | 0.87 | $ | 1.04 | $ | 2.53 | $ | 2.94 | ||||||||||
| Adjusted return on average assets | 0.98 | % | 1.10 | % | 1.22 | % | 1.07 | % | 1.20 | % | ||||||||||
| Adjusted return on average shareholders' equity | 10.03 | % | 11.21 | % | 13.34 | % | 10.99 | % | 13.34 | % | ||||||||||
| Adjusted return on average tangible common equity | 14.24 | % | 16.10 | % | 20.24 | % | 15.80 | % | 19.18 | % | ||||||||||
| Adjusted Pre-Tax, Pre-Provision Earnings Reconciliation | ||||||||||||||||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||||
| (dollars in thousands) | 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
| Adjusted earnings pre tax - non-GAAP | $ | 27,896 | $ | 29,013 | $ | 29,441 | $ | 86,223 | $ | 86,513 | ||||||||||
| Provision for credit losses | 5,168 | 5,879 | 6,974 | 14,182 | 16,582 | |||||||||||||||
| Impairment on commercial mortgage servicing rights | — | — | — | — | 1,263 | |||||||||||||||
| Adjusted pre-tax, pre-provision earnings - non-GAAP | $ | 33,064 | $ | 34,892 | $ | 36,415 | $ | 100,405 | $ | 104,358 | ||||||||||
| Adjusted pre-tax, pre-provision return on average assets | 1.66 | % | 1.76 | % | 1.89 | % | 1.70 | % | 1.88 | % | ||||||||||
| MIDLAND STATES BANCORP, INC. | ||||||||||||||||||||
| RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued) | ||||||||||||||||||||
| Efficiency Ratio Reconciliation | ||||||||||||||||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||||
| (dollars in thousands) | 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
| Noninterest expense - GAAP | $ | 42,038 | $ | 42,894 | $ | 43,496 | $ | 129,414 | $ | 125,719 | ||||||||||
| Integration and acquisition expenses | — | — | 68 | — | (347 | ) | ||||||||||||||
| Adjusted noninterest expense | $ | 42,038 | $ | 42,894 | $ | 43,564 | $ | 129,414 | $ | 125,372 | ||||||||||
| Net interest income - GAAP | $ | 58,596 | $ | 58,840 | $ | 64,024 | $ | 177,940 | $ | 182,185 | ||||||||||
| Effect of tax-exempt income | 205 | 195 | 307 | 644 | 997 | |||||||||||||||
| Adjusted net interest income | 58,801 | 59,035 | 64,331 | 178,584 | 183,182 | |||||||||||||||
| Noninterest income - GAAP | 18,185 | 18,753 | 15,826 | 52,717 | 46,052 | |||||||||||||||
| Impairment on commercial mortgage servicing rights | — | — | — | — | 1,263 | |||||||||||||||
| Loss on sales of investment securities, net | 4,961 | 869 | 129 | 6,478 | 230 | |||||||||||||||
| (Gain) on repurchase of subordinated debt | — | (676 | ) | — | (676 | ) | — | |||||||||||||
| Company-owned life insurance enhancement fee | (6,640 | ) | — | — | (6,640 | ) | — | |||||||||||||
| Adjusted noninterest income | 16,506 | 18,946 | 15,955 | 51,879 | 47,545 | |||||||||||||||
| Adjusted total revenue | $ | 75,307 | $ | 77,981 | $ | 80,286 | $ | 230,463 | $ | 230,727 | ||||||||||
| Efficiency ratio | 55.82 | % | 55.01 | % | 54.26 | % | 56.15 | % | 54.34 | % | ||||||||||
| Return on Average Tangible Common Equity (ROATCE) | ||||||||||||||||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||||
| (dollars in thousands) | 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
| Net income available to common shareholders | $ | 15,813 | $ | 19,347 | $ | 23,521 | $ | 54,704 | $ | 66,153 | ||||||||||
| Average total shareholders' equity—GAAP | $ | 771,625 | $ | 776,791 | $ | 700,866 | $ | 771,883 | $ | 667,225 | ||||||||||
| Adjustments: | ||||||||||||||||||||
| Preferred Stock | (110,548 | ) | (110,548 | ) | (54,072 | ) | (110,548 | ) | — | |||||||||||
| Goodwill | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | ||||||||||
| Other intangible assets, net | (17,782 | ) | (18,937 | ) | (22,859 | ) | (18,959 | ) | (23,019 | ) | ||||||||||
| Average tangible common equity | $ | 481,391 | $ | 485,402 | $ | 462,031 | $ | 480,472 | $ | 482,302 | ||||||||||
| ROATCE | 13.03 | % | 15.99 | % | 20.20 | % | 15.22 | % | 19.06 | % | ||||||||||
| 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) | 2023 | 2023 | 2023 | 2022 | 2022 | |||||||||||||||
| Shareholders' Equity to Tangible Common Equity | ||||||||||||||||||||
| Total shareholders' equity—GAAP | $ | 764,250 | $ | 776,821 | $ | 775,643 | $ | 758,574 | $ | 739,279 | ||||||||||
| Adjustments: | ||||||||||||||||||||
| Preferred Stock | (110,548 | ) | (110,548 | ) | (110,548 | ) | (110,548 | ) | (110,548 | ) | ||||||||||
| Goodwill | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | ||||||||||
| Other intangible assets, net | (17,238 | ) | (18,367 | ) | (19,575 | ) | (20,866 | ) | (22,198 | ) | ||||||||||
| Tangible common equity | $ | 474,560 | $ | 486,002 | $ | 483,616 | $ | 465,256 | $ | 444,629 | ||||||||||
| Less: Accumulated other comprehensive income (AOCI) | (101,181 | ) | (84,719 | ) | (77,797 | ) | (83,797 | ) | (78,383 | ) | ||||||||||
| Tangible common equity excluding AOCI | 575,741 | 570,721 | 561,413 | 549,053 | 523,012 | |||||||||||||||
| Total Assets to Tangible Assets: | ||||||||||||||||||||
| Total assets—GAAP | $ | 7,975,925 | $ | 8,034,721 | $ | 7,930,174 | $ | 7,855,501 | $ | 7,821,877 | ||||||||||
| Adjustments: | ||||||||||||||||||||
| Goodwill | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | ||||||||||
| Other intangible assets, net | (17,238 | ) | (18,367 | ) | (19,575 | ) | (20,866 | ) | (22,198 | ) | ||||||||||
| Tangible assets | $ | 7,796,783 | $ | 7,854,450 | $ | 7,748,695 | $ | 7,672,731 | $ | 7,637,775 | ||||||||||
| Common Shares Outstanding | 21,594,546 | 21,854,800 | 22,111,454 | 22,214,913 | 22,074,740 | |||||||||||||||
| Tangible Common Equity to Tangible Assets | 6.09 | % | 6.19 | % | 6.24 | % | 6.06 | % | 5.82 | % | ||||||||||
| Tangible Book Value Per Share | $ | 21.98 | $ | 22.24 | $ | 21.87 | $ | 20.94 | $ | 20.14 | ||||||||||
| Tangible Book Value Per Share excluding AOCI | $ | 26.66 | $ | 26.11 | $ | 25.39 | $ | 24.72 | $ | 23.69 | ||||||||||
