Highlights

  • Net income of $14.0 million, or $0.57 diluted earnings per share
  • Book value per share increased 2.3% to $26.08
  • Tangible book value per share increased 4.0% to $17.68
  • Definitive agreement to acquire HomeStar Financial Group, Inc. announced on April 2, 2019

EFFINGHAM, Ill., April 25, 2019 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (Nasdaq: MSBI) (the “Company”) today reported net income of $14.0 million, or $0.57 diluted earnings per share, for the first quarter of 2019.  This compares to net income of $16.3 million, or $0.67 diluted earnings per share, for the fourth quarter of 2018, and net income of $1.8 million, or $0.08 diluted earnings per share, for the first quarter of 2018, which included $11.9 million in integration and acquisition expenses.

Jeffrey G. Ludwig, President and Chief Executive Officer of the Company, said, “Our first quarter performance reflects our focus on prudently managing our balance sheet to protect our net interest margin, growing our equipment financing business, and improving efficiencies through disciplined expense management.  We also continue to add value to our franchise through our acquisition strategy.  Our pending acquisition of HomeStar Financial Group, Inc. will enable us to add a community bank that shares our strong commitment to customer service and provides a leadership position in the Kankakee market.  HomeStar’s attractive deposit base will also provide liquidity to support our organic loan growth.  While being a relatively small transaction, we expect the acquisition of HomeStar to be highly accretive to earnings and create strong value for shareholders.”

Factors Affecting Comparability

The Company acquired Alpine Bancorporation, Inc. (“Alpine”) in February 2018. The financial position and results of operations of Alpine prior to its acquisition date are not included in the Company’s financial results.

Net Interest Income

Net interest income for the first quarter of 2019 was $45.6 million, a decrease of 6.0% from $48.5 million for the fourth quarter of 2018.  Excluding accretion income, net interest income decreased $1.2 million from the prior quarter.  Accretion income associated with purchased loan portfolios totaled $2.5 million for the first quarter of 2019, compared with $4.3 million for the fourth quarter of 2018. 

Relative to the first quarter of 2018, net interest income increased $7.4 million, or 19.4%.  Accretion income for the first quarter of 2018 was $2.0 million.  The increase in net interest income resulted from a $12.9 million increase in interest income on interest-earning assets, offset in part by a $5.5 million increase in interest expense.  These increases were due to the impact of the acquisition of Alpine, as well as organic growth.

Net Interest Margin

Net interest margin for the first quarter of 2019 was 3.73%, compared to 3.85% for the fourth quarter of 2018.  The Company’s net interest margin benefits from accretion income on purchased loan portfolios, which contributed 17 and 31 basis points to net interest margin in the first quarter of 2019 and fourth quarter of 2018, respectively.  Excluding the impact of accretion income, net interest margin increased two basis points from the fourth quarter of 2018, primarily due to the impact of higher average loan yields.

Relative to the first quarter of 2018, net interest margin increased from 3.69%.  Accretion income on purchased loan portfolios contributed 16 basis points to net interest margin in the first quarter of 2018.  Excluding the impact of accretion income, net interest margin increased three basis points from the first quarter of 2018, primarily due to the impact of higher average loan yields. 

Noninterest Income

Noninterest income for the first quarter of 2019 was $17.1 million, a decrease of 19.3% from $21.2 million for the fourth quarter of 2018.  The decrease was attributable to declines in most major noninterest income items. 

Relative to the first quarter of 2018, noninterest income increased 3.5% from $16.5 million.  The increase was attributable to growth in wealth management and community banking fees, partially due to the impact of the acquisition of Alpine.

Wealth management revenue for the first quarter of 2019 was $5.0 million, a decrease of 12.4% from $5.7 million in the fourth quarter of 2018, primarily due to lower estate fees and other one-time revenue items recorded in the prior quarter.  Compared to the first quarter of 2018, wealth management revenue increased 21.4%, which was primarily attributable to the addition of Alpine’s wealth management business.

Commercial FHA revenue for the first quarter of 2019 was $3.3 million, compared to $4.2 million in the fourth quarter of 2018.  Commercial FHA revenue in the fourth quarter of 2018 included a $1.4 million recapture of mortgage servicing rights impairment.  The Company originated $64.5 million in rate lock commitments during the first quarter of 2019, compared to $62.3 million in the prior quarter.  Compared to the first quarter of 2018, commercial FHA revenue declined 1.8%.

Other income for the first quarter of 2019 was $2.8 million, compared to $3.9 million in the fourth quarter of 2018.  The decrease was primarily attributable to a gain on proceeds from the Company’s bank-owned life insurance program recorded in the fourth quarter of 2018. Compared to the first quarter of 2018, other income decreased 21.7%.

Noninterest Expense

Noninterest expense for the first quarter of 2019 was $41.1 million, which included $0.2 million in integration and acquisition expenses, compared with $45.4 million for the fourth quarter of 2018, which included $0.6 million in integration and acquisition expenses.  The decrease was attributable to declines in most of the major noninterest expense items, as management has focused on controlling expenses.

Relative to the first quarter of 2018, noninterest expense decreased 17.0% from $49.5 million.  Excluding integration and acquisition expenses, noninterest expense increased 8.8% from $37.6 million.  The increase was primarily due to the addition of personnel and facilities from Alpine. 

Loan Portfolio

Total loans outstanding were $4.09 billion at March 31, 2019, compared with $4.14 billion at December 31, 2018 and $4.03 billion at March 31, 2018.  The decrease in total loans from December 31, 2018 was primarily attributable to a decline in the commercial real estate portfolio, which was partially offset by organic growth in commercial loans and leases.  Equipment financing balances increased $57.5 million from December 31, 2018, which are booked within the commercial loans and leases portfolio, reflecting management’s efforts to grow the equipment financing business.  The increase in total loans from March 31, 2018 was primarily attributable to organic growth in commercial loans and leases and consumer loans.

Deposits

Total deposits were $4.04 billion at March 31, 2019, compared with $4.07 billion at December 31, 2018, and $4.23 billion at March 31, 2018.  The decrease in total deposits from December 31, 2018 was primarily related to outflows of commercial deposits and a decrease in public funds.  

Asset Quality

Nonperforming loans totaled $49.3 million, or 1.20% of total loans, at March 31, 2019, compared with $42.9 million, or 1.04% of total loans, at December 31, 2018, and $26.5 million, or 0.66% of total loans, at March 31, 2018.  The increase in nonperforming loans from the end of the prior quarter was primarily attributable to the downgrade of one commercial real estate loan and one residential real estate loan during the first quarter of 2019.

Net charge-offs for the first quarter of 2019 were $1.1 million, or 0.10% of average loans on an annualized basis. 

The Company recorded a provision for loan losses of $3.2 million for the first quarter of 2019.  The Company’s allowance for loan losses was 0.56% of total loans and 46.9% of nonperforming loans at March 31, 2019, compared with 0.51% of total loans and 48.7% of nonperforming loans at December 31, 2018.  Fair market value discounts recorded in connection with acquired loan portfolios represented 0.47% of total loans at March 31, 2019, compared with 0.53% of total loans at December 31, 2018.

Capital

At March 31, 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:

 March 31, 2019Well Capitalized
Regulatory Requirements
Total capital to risk-weighted assets13.25%10.00%
Tier 1 capital to risk-weighted assets10.65%8.00%
Tier 1 leverage ratio8.92%5.00%
Common equity Tier 1 capital9.16%6.50%
Tangible common equity to tangible assets (1)7.74%NA
   

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

Conference Call, Webcast and Slide Presentation

The Company will host a conference call and webcast at 7:30 a.m. Central Time on Friday, April 26, 2019 to discuss its financial results.  The call can be accessed via telephone at (877) 516-3531; conference ID: 2075024.  A recorded replay can be accessed through May 3, 2019 by dialing (855) 859-2056; conference ID: 2075024.

A slide presentation relating to the first 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.

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 March 31, 2019, the Company had total assets of approximately $5.64 billion and its Wealth Management Group had assets under administration of approximately $3.10 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 pending 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
Stephen A. Erickson, Chief Financial Officer, at serickson@midlandsb.com or (217) 540-1712
Douglas J. Tucker, Sr. V.P., Corporate Counsel, at dtucker@midlandsb.com or (217) 342-7321

                     
MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited)
                     
  For the Quarter Ended 
  March 31,  December 31,  September 30,  June 30,  March 31, 
(dollars in thousands, except per share data) 2019  2018  2018  2018  2018
Earnings Summary                    
Net interest income $45,601  $48,535  $45,081  $48,286  $38,185 
Provision for loan losses  3,243   3,467   2,103   1,854   2,006 
Noninterest income  17,075   21,170   18,272   15,847   16,502 
Noninterest expense  41,097   45,375   50,317   46,452   49,499 
Income before income taxes  18,336   20,863   10,933   15,827   3,182 
Income taxes  4,354   4,527   2,436   3,045   1,376 
Net income  13,982   16,336   8,497   12,782   1,806 
Preferred stock dividends, net  34   34   35   36   36 
Net income available to common shareholders $13,948  $16,302  $8,462  $12,746  $1,770 
                     
Diluted earnings per common share $0.57  $0.67  $0.35  $0.52  $0.08 
Weighted average shares outstanding - diluted  24,204,661   24,200,346   24,325,743   24,268,111   21,351,511 
Return on average assets  1.01%  1.14%  0.59%  0.91%  0.15%
Return on average shareholders' equity  9.23%  10.81%  5.68%  8.77%  1.47%
Return on average tangible common equity (1)  13.79%  16.40%  8.69%  13.48%  2.05%
Net interest margin  3.73%  3.85%  3.59%  3.91%  3.69%
Efficiency ratio (1)  64.73%  65.50%  63.02%  67.76%  68.39%
                     
Adjusted Earnings Performance Summary                    
Adjusted earnings (1) $14,098  $16,397  $15,632  $14,469  $10,265 
Adjusted diluted earnings per common share (1) $0.58  $0.67  $0.64  $0.59  $0.48 
Adjusted return on average assets (1)  1.02%  1.14%  1.09%  1.03%  0.87%
Adjusted return on average shareholders' equity (1)  9.31%  10.85%  10.45%  9.93%  8.34%
Adjusted return on average tangible common equity (1)  13.90%  16.46%  16.02%  15.27%  11.86%
                     
(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 
  March 31,  December 31,  September 30,  June 30,  March 31, 
(in thousands, except per share data) 2019  2018  2018  2018  2018
Net interest income:                   
Total interest income $59,432  $61,592  $56,987  $58,283  $46,505 
Total interest expense  13,831   13,057   11,906   9,997   8,320 
Net interest income  45,601   48,535   45,081   48,286   38,185 
Provision for loan losses  3,243   3,467   2,103   1,854   2,006 
Net interest income after provision for loan losses  42,358   45,068   42,978   46,432   36,179 
Noninterest income:                   
Wealth management revenue  4,953   5,651   5,467   5,316   4,079 
Commercial FHA revenue  3,270   4,194   3,130   326   3,330 
Residential mortgage banking revenue  834   1,041   1,154   2,116   1,418 
Service charges on deposit accounts  2,520   2,976   2,804   2,693   1,967 
Interchange revenue  2,680   2,941   2,759   2,929   2,045 
Gain (loss) on sales of investment securities, net  -   469   -   (70)  65 
Other income  2,818   3,898   2,958   2,537   3,598 
Total noninterest income  17,075   21,170   18,272   15,847   16,502 
Noninterest expense:                   
Salaries and employee benefits  22,039   23,020   22,528   23,467   28,395 
Occupancy and equipment  4,832   4,914   5,040   4,708   4,252 
Data processing  4,891   5,660   10,817   5,106   4,479 
Professional  2,073   2,752   3,087   3,185   3,758 
Amortization of intangible assets  1,810   1,852   1,853   1,576   1,675 
Loss on mortgage servicing rights held for sale  -   -   270   188   - 
Other expense  5,452   7,177   6,722   8,222   6,940 
Total noninterest expense  41,097   45,375   50,317   46,452   49,499 
Income before income taxes  18,336   20,863   10,933   15,827   3,182 
Income taxes  4,354   4,527   2,436   3,045   1,376 
Net income  13,982   16,336   8,497   12,782   1,806 
Preferred stock dividends, net  34   34   35   36   36 
Net income available to common shareholders $13,948  $16,302  $8,462  $12,746  $1,770 
                    
Basic earnings per common share $0.58  $0.68  $0.35  $0.53  $0.08 
Diluted earnings per common share $0.57  $0.67  $0.35  $0.52  $0.08 
                    

 

                
MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                
  As of
  March 31,  December 31,  September 30,  June 30,  March 31, 
(in thousands) 2019  2018  2018  2018  2018
Assets               
Cash and cash equivalents $276,480  $213,700  $242,433  $276,331  $331,183 
Investment securities  656,152   660,785   685,753   708,001   738,172 
Loans  4,092,106   4,137,551   4,156,282   4,095,811   4,029,150 
Allowance for loan losses  (23,091)  (20,903)  (19,631)  (18,246)  (17,704)
Total loans, net  4,069,015   4,116,648   4,136,651   4,077,565   4,011,446 
Loans held for sale, at fair value  16,851   30,401   35,246   41,449   25,267 
Premises and equipment, net  94,514   94,840   95,062   94,783   95,332 
Other real estate owned  2,020   3,483   3,684   3,911   5,059 
Mortgage servicing rights, at lower of cost or fair value  52,957   53,447   51,626   52,381   56,427 
Mortgage servicing rights held for sale  257   3,545   4,419   4,806   3,962 
Intangible assets  35,566   37,376   39,228   41,081   46,473 
Goodwill  164,673   164,673   164,044   164,044   155,674 
Cash surrender value of life insurance policies  139,686   138,783   138,600   137,681   136,766 
Other assets  133,609   119,992   127,866   128,567   117,611 
Total assets $5,641,780  $5,637,673  $5,724,612  $5,730,600  $5,723,372 
                
Liabilities and Shareholders' Equity               
Noninterest-bearing deposits $941,344  $972,164  $991,311  $1,001,802  $1,037,710 
Interest-bearing deposits  3,094,944   3,102,006   3,151,895   3,158,055   3,196,105 
Total deposits  4,036,288   4,074,170   4,143,206   4,159,857   4,233,815 
Short-term borrowings  115,832   124,235   145,450   114,536   130,693 
FHLB advances and other borrowings  669,009   640,631   652,253   678,873   587,493 
Subordinated debt  94,174   94,134   94,093   94,053   94,013 
Trust preferred debentures  47,918   47,794   47,676   47,559   47,443 
Other liabilities  54,391   48,184   47,788   43,187   44,530 
Total liabilities  5,017,612   5,029,148   5,130,466   5,138,065   5,137,987 
Total shareholders’ equity  624,168   608,525   594,146   592,535   585,385 
Total liabilities and shareholders’ equity $5,641,780  $5,637,673  $5,724,612  $5,730,600  $5,723,372 
                

 

                     
MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                     
  As of 
  March 31,  December 31,  September 30,  June 30,  March 31, 
(in thousands) 2019  2018  2018  2018  2018
Loan Portfolio                    
Commercial loans and leases $1,122,621  $1,074,935  $1,034,546  $991,164  $1,026,253 
Commercial real estate loans  1,560,427   1,639,155   1,711,926   1,711,296   1,773,510 
Construction and land development loans  239,376   232,229   239,480   247,889   234,837 
Residential real estate loans  569,051   578,048   586,134   601,808   570,321 
Consumer loans  600,631   613,184   584,196   543,654   424,229 
Total loans $4,092,106  $4,137,551  $4,156,282  $4,095,811  $4,029,150 
                     
Deposit Portfolio                    
Noninterest-bearing demand deposits $941,344  $972,164  $991,311  $1,001,802  $1,037,710 
Interest-bearing:                    
Checking accounts  968,844   1,002,275   1,047,914   1,024,506   993,253 
Money market accounts  802,036   862,171   836,151   843,984   840,415 
Savings accounts  457,176   442,132   445,640   460,560   466,887 
Time deposits  685,700   633,787   633,654   638,215   672,034 
Brokered deposits  181,188   161,641   188,536   190,790   223,516 
Total deposits $4,036,288  $4,074,170  $4,143,206  $4,159,857  $4,233,815 
                     

 

                     
MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                     
  For the Quarter Ended 
  March 31,  December 31,  September 30,  June 30,  March 31, 
(dollars in thousands) 2019  2018  2018  2018  2018
Average Balance Sheets                    
Cash and cash equivalents $152,078  $155,280  $154,526  $227,499  $138,275 
Investment securities  654,764   676,483   700,018   731,017   548,168 
Loans  4,128,893   4,139,831   4,106,367   3,982,958   3,477,917 
Loans held for sale  30,793   51,981   48,715   31,220   40,841 
Nonmarketable equity securities  44,279   42,708   42,770   38,872   34,890 
Total interest-earning assets  5,010,807   5,066,283   5,052,396   5,011,566   4,240,091 
Non-earning assets  618,996   624,378   639,323   639,864   536,750 
Total assets $5,629,803  $5,690,661  $5,691,719  $5,651,430  $4,776,841 
                     
Interest-bearing deposits $3,093,979  $3,123,134  $3,172,422  $3,158,816  $2,675,339 
Short-term borrowings  135,337   143,869   139,215   120,794   148,703 
FHLB advances and other borrowings  673,250   645,642   608,153   573,107   489,567 
Subordinated debt  94,156   94,115   94,075   94,035   93,993 
Trust preferred debentures  47,848   47,737   47,601   47,488   47,373 
Total interest-bearing liabilities  4,044,570   4,054,497   4,061,466   3,994,240   3,454,975 
Noninterest-bearing deposits  919,185   989,954   989,142   1,025,308   782,164 
Other noninterest-bearing liabilities  51,838   46,487   47,654   47,229   40,761 
Shareholders' equity  614,210   599,723   593,457   584,653   498,941 
Total liabilities and shareholders' equity $5,629,803  $5,690,661  $5,691,719  $5,651,430  $4,776,841 
                     
Yields                    
Cash and cash equivalents  2.42%  2.24%  1.96%  1.79%  1.53%
Investment securities  3.07%  3.04%  3.01%  2.91%  2.87%
Loans  5.22%  5.28%  4.88%  5.21%  4.85%
Loans held for sale  3.94%  3.92%  4.17%  3.79%  4.25%
Nonmarketable equity securities  5.69%  5.20%  5.01%  4.97%  4.64%
Total interest-earning assets  4.85%  4.87%  4.52%  4.71%  4.49%
Interest-bearing deposits  0.97%  0.86%  0.77%  0.64%  0.62%
Short-term borrowings  0.71%  0.67%  0.61%  0.38%  0.34%
FHLB advances and other borrowings  2.32%  2.26%  2.09%  1.81%  1.55%
Subordinated debt  6.43%  6.43%  6.44%  6.44%  6.44%
Trust preferred debentures  7.38%  6.93%  6.81%  6.59%  5.94%
Total interest-bearing liabilities  1.39%  1.28%  1.16%  1.00%  0.98%
Net interest margin  3.73%  3.85%  3.59%  3.91%  3.69%
                     

 

                     
MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                     
  As of and for the Quarter Ended 
  March 31,  December 31,  September 30,  June 30,  March 31, 
(dollars in thousands, except per share data) 2019  2018  2018  2018  2018
Asset Quality                    
Loans 30-89 days past due $23,999  $25,213  $22,678  $19,362  $20,138 
Nonperforming loans  49,262   42,899   38,561   28,342   26,499 
Nonperforming assets  51,282   45,899   41,638   31,542   29,938 
Net charge-offs  1,055   2,195   718   1,312   733 
Loans 30-89 days past due to total loans  0.59%  0.61%  0.55%  0.47%  0.50%
Nonperforming loans to total loans  1.20%  1.04%  0.93%  0.69%  0.66%
Nonperforming assets to total assets  0.91%  0.81%  0.73%  0.55%  0.52%
Allowance for loan losses to total loans  0.56%  0.51%  0.47%  0.45%  0.44%
Allowance for loan losses to nonperforming loans  46.87%  48.73%  50.91%  64.38%  66.81%
Net charge-offs to average loans  0.10%  0.21%  0.07%  0.13%  0.09%
                     
Wealth Management                    
Trust assets under administration $3,097,091  $2,945,084  $3,218,013  $3,188,909  $3,125,051 
                     
Market Data                    
Book value per share at period end $26.08  $25.50  $24.96  $24.92  $24.67 
Tangible book value per share at period end (1) $17.68  $17.00  $16.38  $16.25  $16.11 
Market price at period end $24.06  $22.34  $32.10  $34.26  $31.56 
Shares outstanding at period end  23,827,438   23,751,798   23,694,637   23,664,596   23,612,430 
                     
Capital                    
Total capital to risk-weighted assets  13.25%  12.79%  12.35%  12.27%  12.37%
Tier 1 capital to risk-weighted assets  10.65%  10.25%  9.85%  9.78%  9.84%
Tier 1 leverage ratio  8.92%  8.53%  8.24%  8.16%  9.55%
Tier 1 common capital to risk-weighted assets  9.16%  8.76%  8.37%  8.28%  8.30%
Tangible common equity to tangible assets (1)  7.74%  7.43%  7.03%  6.96%  6.89%
                     
(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 
  March 31,  December 31,  September 30,  June 30,  March 31, 
(dollars in thousands, except per share data) 2019  2018  2018  2018  2018
Income before income taxes - GAAP $18,336  $20,863   $10,933   $15,827   $3,182 
Adjustments to noninterest income:                    
Gain (loss) on sales of investment securities, net  -   469    -    (70)   65 
Other  -   (1)   (12)   (48)   150 
Total adjustments to noninterest income  -   468    (12)   (118)   215 
Adjustments to noninterest expense:                    
Loss on mortgage servicing rights held for sale  -   -    270    188    - 
Integration and acquisition expenses  160   553    9,559    2,019    11,884 
Total adjustments to noninterest expense  160   553    9,829    2,207    11,884 
Adjusted earnings pre tax  18,496   20,948    20,774    18,152    14,851 
Adjusted earnings tax  4,398   4,551    5,142    3,683    4,586 
Adjusted earnings - non-GAAP  14,098   16,397    15,632    14,469    10,265 
Preferred stock dividends, net  34   34    35    36    36 
Adjusted earnings available to common shareholders - non-GAAP $14,064  $16,363   $15,597   $14,433   $10,229 
Adjusted diluted earnings per common share $0.58  $0.67   $0.64   $0.59   $0.48 
Adjusted return on average assets  1.02%  1.14 %  1.09 %  1.03 %  0.87%
Adjusted return on average shareholders' equity  9.31%  10.85 %  10.45 %  9.93 %  8.34%
Adjusted return on average tangible common equity  13.90%  16.46 %  16.02 %  15.27 %  11.86%
                     

 

 
MIDLAND STATES BANCORP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (continued)
                     
                     
Efficiency Ratio Reconciliation                    
  For the Quarter Ended 
  March 31,  December 31,  September 30,  June 30,  March 31, 
(dollars in thousands) 2019  2018  2018  2018  2018
Noninterest expense - GAAP $41,097   $45,375   $50,317   $46,452   $49,499  
Loss on mortgage servicing rights held for sale  -    -    (270)   (188)   -  
Integration and acquisition expenses  (160)   (553)   (9,559)   (2,019)   (11,884) 
Adjusted noninterest expense $40,937   $44,822   $40,488   $44,245   $37,615  
                     
Net interest income - GAAP $45,601   $48,535   $45,081   $48,286   $38,185  
Effect of tax-exempt income  543    574    585    541    394  
Adjusted net interest income  46,144    49,109    45,666    48,827    38,579  
                     
Noninterest income - GAAP $17,075   $21,170   $18,272   $15,847   $16,502  
Mortgage servicing rights impairment (recapture)  25    (1,380)   297    500    133  
(Gain) loss on sales of investment securities, net  -    (469)   -    70    (65) 
Other  -    1    12    48    (150) 
Adjusted noninterest income  17,100    19,322    18,581    16,465    16,420  
                     
Adjusted total revenue $63,244   $68,431   $64,247   $65,292   $54,999  
                     
Efficiency ratio  64.73 %  65.50 %  63.02 %  67.76 %  68.39 %
                     

 

                     
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 
  March 31,  December 31,  September 30,  June 30,  March 31, 
(dollars in thousands, except per share data) 2019  2018  2018  2018  2018
Shareholders' Equity to Tangible Common Equity                    
Total shareholders' equity—GAAP $624,168   $608,525   $594,146   $592,535   $585,385  
Adjustments:                    
Preferred stock  (2,733)   (2,781)   (2,829)   (2,876)   (2,923) 
Goodwill  (164,673)   (164,673)   (164,044)   (164,044)   (155,674) 
Other intangibles  (35,566)   (37,376)   (39,228)   (41,081)   (46,473) 
Tangible common equity $421,196   $403,695   $388,045   $384,534   $380,315  
                     
Total Assets to Tangible Assets:                    
Total assets—GAAP $5,641,780   $5,637,673   $5,724,612   $5,730,600   $5,723,372  
Adjustments:                    
Goodwill  (164,673)   (164,673)   (164,044)   (164,044)   (155,674) 
Other intangibles  (35,566)   (37,376)   (39,228)   (41,081)   (46,473) 
Tangible assets $5,441,541   $5,435,624   $5,521,340   $5,525,475   $5,521,225  
                     
Common Shares Outstanding  23,827,438    23,751,798    23,694,637    23,664,596    23,612,430  
                     
Tangible Common Equity to Tangible Assets  7.74 %  7.43 %  7.03 %  6.96 %  6.89 %
Tangible Book Value Per Share $17.68   $17.00   $16.38   $16.25   $16.11  
                     
Return on Average Tangible Common Equity (ROATCE)
                     
  For the Quarter Ended
  March 31,  December 31,  September 30,  June 30,  March 31, 
(dollars in thousands) 2019  2018  2018  2018  2018
Net income available to common shareholders $13,948   $16,302   $8,462   $12,746   $1,770  
                     
Average total shareholders' equity—GAAP $614,210   $599,723   $593,457   $584,653   $498,941  
Adjustments:                    
Preferred stock  (2,759)   (2,812)   (2,859)   (2,905)   (2,952) 
Goodwill  (164,673)   (164,051)   (164,044)   (158,461)   (118,996) 
Other intangibles  (36,438)   (38,394)   (40,228)   (44,098)   (27,156) 
Average tangible common equity $410,340   $394,466   $386,326   $379,189   $349,837  
ROATCE  13.79 %  16.40 %  8.69 %  13.48 %  2.05 %