Summary
- Net income of $23.1 million, or $1.02 diluted earnings per share
- Total loans increased 25.2% annualized
- Total deposits increased 9.1% from end of prior quarter
- Non-performing loans declined 22.0% from end of prior quarter
- Net interest income increased 5.7% from prior quarter to $54.3 million
- Efficiency ratio improved to 52.61% from 58.78% in prior quarter
- Book value and tangible book value per share increased 1.6% and 2.3%, respectively
EFFINGHAM, Ill., Jan. 27, 2022 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (Nasdaq: MSBI) (the “Company”) today reported net income of $23.1 million, or $1.02 diluted earnings per share, for the fourth quarter of 2021, which included a $4.9 million FHLB advance prepayment fee and a $1.9 million gain on the termination of an interest rate swap. This compares to net income of $19.5 million, or $0.86 diluted earnings per share, for the third quarter of 2021. This also compares to net income of $8.3 million, or $0.36 diluted earnings per share, for the fourth quarter of 2020, which included $4.9 million in FHLB advance prepayment fees.
Jeffrey G. Ludwig, President and Chief Executive Officer of the Company, said, “We continue to see an acceleration of our new business development efforts driven by the more productive commercial banking teams we have built over the past year and our increased presence in higher growth markets in Northern Illinois and St. Louis. We had a record quarter of loan production, resulting in 25% annualized growth in total loans, which we were able to fund with strong inflows of noninterest-bearing deposits. The strong balance sheet growth we are seeing is driving higher levels of revenue, increased operating leverage, and an improvement in our level of profitability.
“Based on our current commercial and commercial real estate lending pipelines and improving loan demand, we expect to deliver another year of strong loan growth in 2022. We also expect to keep expense levels relatively flat compared to 2021, despite continuing to increase our technology investment in order to further improve our revenue generation capabilities and enhance client service. In 2022, we will be focused on continuing to build relationship-based commercial and commercial real estate loans funded by low-cost deposits, which we combine with a growing wealth management business that provides a large, consistent source of non-interest income. We believe the improvements we have made to our business model and operations will enable us to generate a higher level of returns and consistently increase the value of our franchise in the years ahead,” said Mr. Ludwig.
Adjusted Earnings
Financial results for the fourth quarter of 2021 were impacted by $4.9 million FHLB advance prepayment fees and a $1.9 million gain on the termination of an interest rate swap. Excluding these amounts and certain other income and expenses, adjusted earnings were $25.4 million, or $1.12 per diluted share, for the fourth quarter of 2021, up from $19.6 million, or $0.86 per diluted share, for the prior quarter.
Financial results for the fourth quarter of 2020 were impacted by $4.9 million FHLB advance prepayment fees, a $0.6 million loss on residential mortgage servicing rights (“MSRs”) held-for sale, and $0.2 million in integration and acquisition expenses. Excluding these amounts and certain income items, adjusted earnings were $12.5 million, or $0.54 per diluted share, for the fourth quarter of 2020.
A reconciliation of adjusted earnings to net income according to accounting principles generally accepted in the United States (“GAAP”) is provided in the financial tables at the end of this press release.
Net Interest Margin
Net interest margin for the fourth quarter of 2021 was 3.25%, compared to 3.34% for the third quarter of 2021. The Company’s net interest margin benefits from accretion income on purchased loan portfolios, which contributed 4 and 7 basis points to net interest margin in the fourth and third quarters of 2021, respectively. Excluding the impact of accretion income, net interest margin decreased 6 basis points from the third quarter of 2021, due primarily to an increase in liquidity largely resulting from a significant increase in commercial FHA servicing deposits.
Relative to the fourth quarter of 2020, net interest margin decreased from 3.47%. Accretion income on purchased loan portfolios contributed 10 basis points to net interest margin in the fourth quarter of 2020. Excluding the impact of accretion income, net interest margin decreased 16 basis points from the fourth quarter of 2020, primarily due to an unfavorable shift in the mix of earning assets.
Net Interest Income
Net interest income for the fourth quarter of 2021 was $54.3 million, an increase of 5.7% from $51.4 million for the third quarter of 2021. Excluding accretion income, net interest income increased $3.1 million from the prior quarter, which was primarily due to a higher average balance of interest-earning assets coupled with a decrease in funding costs. Accretion income associated with purchased loan portfolios totaled $0.8 million for the fourth quarter of 2021, compared to $1.0 million for the third quarter of 2021. PPP loan income totaled $1.6 million, including net loan origination fees of $1.4 million, in the fourth quarter of 2021, compared to $2.4 million, including net loan origination fees of $2.1 million, in the third quarter of 2021.
Relative to the fourth quarter of 2020, net interest income increased $0.8 million, or 1.5%. Accretion income for the fourth quarter of 2020 was $1.6 million. Excluding the impact of accretion income, net interest income increased primarily due to a decrease in funding costs.
Noninterest Income
Noninterest income for the fourth quarter of 2021 was $22.5 million, an increase of 48.7% from $15.1 million for the third quarter of 2021. Noninterest income for the fourth quarter of 2021 was positively impacted by $3.9 million in unrealized income on equity investments, a $1.9 million gain on the termination of an FHLB interest rate swap, and a $1.0 million gain on company-owned life insurance. Impairment on commercial MSRs negatively impacted noninterest income by $2.1 million and $3.0 million in the fourth quarter of 2021 and third quarter of 2021, respectively. Excluding the impairments, noninterest income increased 35.3% from the prior quarter.
Relative to the fourth quarter of 2020, noninterest income increased 57.1% from $14.3 million. The increase was attributable to higher levels of wealth management and interchange revenue, as well as the items mentioned above for the fourth quarter of 2021.
Wealth management revenue for the fourth quarter of 2021 was $7.2 million, unchanged from the third quarter of 2021. Compared to the fourth quarter of 2020, wealth management revenue increased 22.3%, primarily due to the increase in assets under administration over the past year and the acquisition of ATG Trust Company.
Noninterest Expense
Noninterest expense for the fourth quarter of 2021 was $45.8 million, compared with $41.3 million in the third quarter of 2021. Noninterest expense for the fourth quarter of 2021 included $4.9 million FHLB advance prepayment fees and $0.2 million in integration and acquisition expenses. Excluding the FHLB advance prepayment fees and integration and acquisition expenses, noninterest expense decreased by $0.4 million.
Relative to the fourth quarter of 2020, noninterest expense decreased 2.7% from $47.0 million, which included $4.9 million in FHLB advance prepayment fees and a $0.6 million loss on residential MSRs held-for-sale. Excluding FHLB advance prepayment fees and losses on residential MSRs held-for-sale, noninterest expense decreased $0.6 million, primarily due to lower salaries and employee benefits expense.
Loan Portfolio
Total loans outstanding were $5.22 billion at December 31, 2021, compared with $4.92 billion at September 30, 2021, and $5.10 billion at December 31, 2020. The increase in total loans from September 30, 2021 was primarily attributable to higher balances of commercial real estate and consumer loans, partially offset by declines in commercial FHA warehouse lines and forgiveness of PPP loans.
Equipment finance balances increased $46.2 million from September 30, 2021 to $945.3 million at December 31, 2021.
Compared to loan balances at December 31, 2020, growth in equipment finance balances, commercial real estate, construction, and consumer loans was offset by declines in commercial FHA warehouse lines, PPP loans and residential real estate loans.
Deposits
Total deposits were $6.11 billion at December 31, 2021, compared with $5.60 billion at September 30, 2021, and $5.10 billion at December 31, 2020. The increase in total deposits from the end of the prior quarter was primarily attributable to an increase in commercial FHA servicing deposits and inflows of other commercial deposits.
Asset Quality
Nonperforming loans totaled $42.6 million, or 0.81% of total loans, at December 31, 2021, compared with $54.6 million, or 1.11% of total loans, at September 30, 2021. The decrease in nonperforming loans was primarily attributable to the payoff of two nonaccrual loans totaling $5.6 million and the charge-off of a third nonaccrual loan of $1.8 million. At December 31, 2020, nonperforming loans totaled $54.1 million, or 1.06% of total loans.
Net charge-offs for the fourth quarter of 2021 were $4.6 million, or 0.37% of average loans on an annualized basis, compared to net charge-offs of $3.0 million, or 0.25% of average loans on an annualized basis, for the third quarter of 2021, and $2.3 million, or 0.19% of average loans on an annualized basis, for the fourth quarter of 2020.
The Company recorded a provision for credit losses of $0.5 million for the fourth quarter of 2021. No provision for credit losses on loans was recorded, due to improvements in asset quality and economic forecasts. Provisions of $0.4 million and $0.1 million were recorded for credit losses on unfunded commitments and available-for-sale securities, respectively.
The Company’s allowance for credit losses on loans was 0.98% of total loans and 119.9% of nonperforming loans at December 31, 2021, compared with 1.13% of total loans and 101.9% of nonperforming loans at September 30, 2021. Approximately 94% of the allowance for credit losses on loans at December 31, 2021 was allocated to general reserves.
Capital
At December 31, 2021, Midland States Bank and the Company exceeded all regulatory capital requirements under Basel III, and Midland States Bank met the qualifications to be a ‘‘well-capitalized’’ financial institution, as summarized in the following table:
| Bank Level Ratios as of Dec. 31, 2021 | Consolidated Ratios as of Dec. 31, 2021 | Minimum Regulatory Requirements (2) | |
| Total capital to risk-weighted assets | 11.21% | 12.19% | 10.50% |
| Tier 1 capital to risk-weighted assets | 10.49% | 9.16% | 8.50% |
| Tier 1 leverage ratio | 8.89% | 7.75% | 4.00% |
| Common equity Tier 1 capital | 10.49% | 8.08% | 7.00% |
| Tangible common equity to tangible assets (1) | NA | 6.58% | NA |
(1) A non-GAAP financial measure. Refer to page 15 for a reconciliation to the comparable GAAP financial measure.
(2) Includes the capital conservation buffer of 2.5%.
Stock Repurchase Program
During the fourth quarter of 2021, the Company repurchased 205,015 shares of its common stock at a weighted average price of $25.58 under its stock repurchase program. As of December 31, 2021, the Company had $19.7 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, January 28, 2022, to discuss its financial results. The call can be accessed via telephone at (877) 516-3531; conference ID: 8339225. A recorded replay can be accessed through February 4, 2022, by dialing (855) 859-2056; conference ID: 8339225.
A slide presentation relating to the fourth quarter 2021 financial results will be accessible prior to the scheduled conference call. This earnings release should be read together with the slide presentation, which contains important information related to the impact of COVID-19. The slide presentation and webcast of the conference call can be accessed on the Webcasts and Presentations page of the Company’s investor relations website at investors.midlandsb.com under the “News and Events” tab.
About Midland States Bancorp, Inc.
Midland States Bancorp, Inc. is a community-based financial holding company headquartered in Effingham, Illinois, and is the sole shareholder of Midland States Bank. As of December 31, 2021, the Company had total assets of approximately $7.44 billion, and its Wealth Management Group had assets under administration of approximately $4.22 billion. Midland provides a full range of commercial and consumer banking products and services and business equipment financing, merchant credit card services, trust and investment management, insurance and financial planning services. For additional information, visit https://www.midlandsb.com/ or https://www.linkedin.com/company/midland-states-bank.
Non-GAAP Financial Measures
Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with GAAP. These non-GAAP financial measures include “Adjusted Earnings,” “Adjusted Diluted Earnings Per Common Share,” “Adjusted Pre-Tax, Pre-Provision Earnings,” “Adjusted Return on Average Assets,” “Adjusted Return on Average Shareholders’ Equity,” “Adjusted Return on Average Tangible Common Equity,” “Adjusted Pre-Tax, Pre-Provision Return on Average Assets,” “Efficiency Ratio,” “Tangible Common Equity to Tangible Assets,” “Tangible Book Value Per Share” and “Return on Average Tangible Common Equity.” The Company believes these non-GAAP financial measures provide both management and investors a more complete understanding of the Company’s funding profile and profitability. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures. Not all companies use the same calculation of these measures; therefore, this presentation may not be comparable to other similarly titled measures as presented by other companies.
Forward-Looking Statements
Readers should note that in addition to the historical information contained herein, this press release includes "forward-looking statements" within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including but not limited to statements about the Company’s plans, objectives, future performance, goals and future earnings levels. These statements are subject to many risks and uncertainties, including changes in interest rates and other general economic, business and political conditions, including the effects of the COVID-19 pandemic and its potential effects on the economic environment, our customers and our operations, as well as any changes to federal, state and local government laws, regulations and orders in connection with the pandemic; changes in the financial markets; changes in business plans as circumstances warrant; risks relating to acquisitions; developments and uncertainty related to the future use and availability of some reference rates, such as the London Inter-Bank Offered Rate, as well as other alternative reference rates, and the adoption of a substitute; changes to U.S. tax laws, regulations and guidance; and other risks detailed from time to time in filings made by the Company with the Securities and Exchange Commission. Readers should note that the forward-looking statements included in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "will," "propose," "may," "plan," "seek," "expect," "intend," "estimate," "anticipate," "believe," "continue," or similar terminology. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.
CONTACTS:
Jeffrey G. Ludwig, President and CEO, at jludwig@midlandsb.com or (217) 342-7321
Eric T. Lemke, Chief Financial Officer, at elemke@midlandsb.com or (217) 342-7321
Douglas J. Tucker, SVP and Corporate Counsel, at dtucker@midlandsb.com or (217) 342-7321
| MIDLAND STATES BANCORP, INC. | ||||||||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) | ||||||||||||||||||||
| For the Quarter Ended | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| (dollars in thousands, except per share data) | 2021 | 2021 | 2021 | 2021 | 2020 | |||||||||||||||
| Earnings Summary | ||||||||||||||||||||
| Net interest income | $ | 54,301 | $ | 51,396 | $ | 50,110 | $ | 51,868 | $ | 53,516 | ||||||||||
| Provision for credit losses | 467 | (184 | ) | (455 | ) | 3,565 | 10,058 | |||||||||||||
| Noninterest income | 22,523 | 15,143 | 17,417 | 14,816 | 14,336 | |||||||||||||||
| Noninterest expense | 45,757 | 41,292 | 48,941 | 39,079 | 47,048 | |||||||||||||||
| Income before income taxes | 30,600 | 25,431 | 19,041 | 24,040 | 10,746 | |||||||||||||||
| Income taxes | 7,493 | 5,883 | (1,083 | ) | 5,502 | 2,413 | ||||||||||||||
| Net income | $ | 23,107 | $ | 19,548 | $ | 20,124 | $ | 18,538 | $ | 8,333 | ||||||||||
| Diluted earnings per common share | $ | 1.02 | $ | 0.86 | $ | 0.88 | $ | 0.81 | $ | 0.36 | ||||||||||
| Weighted average shares outstanding - diluted | 22,350,771 | 22,577,880 | 22,677,515 | 22,578,553 | 22,656,343 | |||||||||||||||
| Return on average assets | 1.26 | % | 1.15 | % | 1.20 | % | 1.11 | % | 0.49 | % | ||||||||||
| Return on average shareholders' equity | 14.04 | % | 11.90 | % | 12.59 | % | 12.04 | % | 5.32 | % | ||||||||||
| Return on average tangible common equity (1) | 19.69 | % | 16.76 | % | 17.85 | % | 17.28 | % | 7.68 | % | ||||||||||
| Net interest margin | 3.25 | % | 3.34 | % | 3.29 | % | 3.45 | % | 3.47 | % | ||||||||||
| Efficiency ratio (1) | 52.61 | % | 58.78 | % | 60.19 | % | 57.14 | % | 58.55 | % | ||||||||||
| Adjusted Earnings Performance Summary (1) | ||||||||||||||||||||
| Adjusted earnings | $ | 25,416 | $ | 19,616 | $ | 19,755 | $ | 18,434 | $ | 12,471 | ||||||||||
| Adjusted diluted earnings per common share | $ | 1.12 | $ | 0.86 | $ | 0.86 | $ | 0.81 | $ | 0.54 | ||||||||||
| Adjusted return on average assets | 1.39 | % | 1.15 | % | 1.17 | % | 1.11 | % | 0.73 | % | ||||||||||
| Adjusted return on average shareholders' equity | 15.44 | % | 11.94 | % | 12.36 | % | 11.97 | % | 7.97 | % | ||||||||||
| Adjusted return on average tangible common equity | 21.65 | % | 16.82 | % | 17.52 | % | 17.18 | % | 11.50 | % | ||||||||||
| Adjusted pre-tax, pre-provision earnings | $ | 36,324 | $ | 28,379 | $ | 26,967 | $ | 28,737 | $ | 28,855 | ||||||||||
| Adjusted pre-tax, pre-provision return on average assets | 1.98 | % | 1.67 | % | 1.60 | % | 1.73 | % | 1.69 | % | ||||||||||
| (1) Non-GAAP financial measures. Refer to pages 13 - 15 for a reconciliation to the comparable GAAP financial measures. | ||||||||||||||||||||
| MIDLAND STATES BANCORP, INC. | ||||||||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) | ||||||||||||||||||||
| For the Quarter Ended | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| (in thousands, except per share data) | 2021 | 2021 | 2021 | 2021 | 2020 | |||||||||||||||
| Net interest income: | ||||||||||||||||||||
| Interest income | $ | 60,427 | $ | 58,490 | $ | 58,397 | $ | 60,503 | $ | 62,712 | ||||||||||
| Interest expense | 6,126 | 7,094 | 8,287 | 8,635 | 9,196 | |||||||||||||||
| Net interest income | 54,301 | 51,396 | 50,110 | 51,868 | 53,516 | |||||||||||||||
| Provision for credit losses: | ||||||||||||||||||||
| Provision for credit losses on loans | - | - | - | 3,950 | 10,000 | |||||||||||||||
| Provision for credit losses on unfunded commitments | 388 | - | (265 | ) | (535 | ) | - | |||||||||||||
| Provision for other credit losses | 79 | (184 | ) | (190 | ) | 150 | 58 | |||||||||||||
| Total provision for credit losses | 467 | (184 | ) | (455 | ) | 3,565 | 10,058 | |||||||||||||
| Net interest income after provision for credit losses | 53,834 | 51,580 | 50,565 | 48,303 | 43,458 | |||||||||||||||
| Noninterest income: | ||||||||||||||||||||
| Wealth management revenue | 7,176 | 7,175 | 6,529 | 5,931 | 5,868 | |||||||||||||||
| Commercial FHA revenue | 369 | 411 | 342 | 292 | 400 | |||||||||||||||
| Residential mortgage banking revenue | 1,103 | 1,287 | 1,562 | 1,574 | 2,285 | |||||||||||||||
| Service charges on deposit accounts | 2,338 | 2,268 | 1,916 | 1,826 | 2,149 | |||||||||||||||
| Interchange revenue | 3,677 | 3,651 | 3,797 | 3,375 | 3,137 | |||||||||||||||
| Gain on sales of investment securities, net | - | 160 | 377 | - | - | |||||||||||||||
| Gain on termination of hedged interest swap | 1,845 | - | - | 314 | - | |||||||||||||||
| Impairment on commercial mortgage servicing rights | (2,072 | ) | (3,037 | ) | (1,148 | ) | (1,275 | ) | (2,344 | ) | ||||||||||
| Company-owned life insurance | 1,904 | 869 | 863 | 860 | 893 | |||||||||||||||
| Other income | 6,183 | 2,359 | 3,179 | 1,919 | 1,948 | |||||||||||||||
| Total noninterest income | 22,523 | 15,143 | 17,417 | 14,816 | 14,336 | |||||||||||||||
| Noninterest expense: | ||||||||||||||||||||
| Salaries and employee benefits | 22,109 | 22,175 | 22,071 | 20,528 | 22,636 | |||||||||||||||
| Occupancy and equipment | 3,429 | 3,701 | 3,796 | 3,940 | 3,531 | |||||||||||||||
| Data processing | 5,819 | 6,495 | 6,288 | 5,993 | 5,987 | |||||||||||||||
| Professional | 1,499 | 1,738 | 5,549 | 2,185 | 1,912 | |||||||||||||||
| Amortization of intangible assets | 1,425 | 1,445 | 1,470 | 1,515 | 1,556 | |||||||||||||||
| Loss on mortgage servicing rights held for sale | - | 79 | 143 | - | 617 | |||||||||||||||
| Impairment related to facilities optimization | - | - | - | - | (10 | ) | ||||||||||||||
| FHLB advances prepayment fees | 4,859 | - | 3,669 | 8 | 4,872 | |||||||||||||||
| Other expense | 6,617 | 5,659 | 5,955 | 4,910 | 5,947 | |||||||||||||||
| Total noninterest expense | 45,757 | 41,292 | 48,941 | 39,079 | 47,048 | |||||||||||||||
| Income before income taxes | 30,600 | 25,431 | 19,041 | 24,040 | 10,746 | |||||||||||||||
| Income taxes | 7,493 | 5,883 | (1,083 | ) | 5,502 | 2,413 | ||||||||||||||
| Net income | $ | 23,107 | $ | 19,548 | $ | 20,124 | $ | 18,538 | $ | 8,333 | ||||||||||
| Basic earnings per common share | $ | 1.03 | $ | 0.86 | $ | 0.88 | $ | 0.81 | $ | 0.36 | ||||||||||
| Diluted earnings per common share | $ | 1.02 | $ | 0.86 | $ | 0.88 | $ | 0.81 | $ | 0.36 | ||||||||||
| MIDLAND STATES BANCORP, INC. | ||||||||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) | ||||||||||||||||||||
| As of | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| (in thousands) | 2021 | 2021 | 2021 | 2021 | 2020 | |||||||||||||||
| Assets | ||||||||||||||||||||
| Cash and cash equivalents | $ | 680,371 | $ | 662,643 | $ | 425,100 | $ | 631,219 | $ | 341,640 | ||||||||||
| Investment securities | 916,132 | 900,319 | 756,831 | 690,390 | 686,135 | |||||||||||||||
| Loans | 5,224,801 | 4,915,554 | 4,835,866 | 4,910,806 | 5,103,331 | |||||||||||||||
| Allowance for credit losses on loans | (51,062 | ) | (55,675 | ) | (58,664 | ) | (62,687 | ) | (60,443 | ) | ||||||||||
| Total loans, net | 5,173,739 | 4,859,879 | 4,777,202 | 4,848,119 | 5,042,888 | |||||||||||||||
| Loans held for sale | 32,045 | 26,621 | 12,187 | 55,174 | 138,090 | |||||||||||||||
| Premises and equipment, net | 70,792 | 71,241 | 71,803 | 73,255 | 74,124 | |||||||||||||||
| Other real estate owned | 12,059 | 11,931 | 12,768 | 20,304 | 20,247 | |||||||||||||||
| Loan servicing rights, at lower of cost or fair value | 28,865 | 30,916 | 34,577 | 36,876 | 39,276 | |||||||||||||||
| Goodwill | 161,904 | 161,904 | 161,904 | 161,904 | 161,904 | |||||||||||||||
| Other intangible assets, net | 24,374 | 26,065 | 27,900 | 26,867 | 28,382 | |||||||||||||||
| Cash surrender value of life insurance policies | 148,378 | 149,146 | 148,277 | 146,864 | 146,004 | |||||||||||||||
| Other assets | 195,146 | 193,294 | 201,461 | 193,814 | 189,850 | |||||||||||||||
| Total assets | $ | 7,443,805 | $ | 7,093,959 | $ | 6,630,010 | $ | 6,884,786 | $ | 6,868,540 | ||||||||||
| Liabilities and Shareholders' Equity | ||||||||||||||||||||
| Noninterest-bearing deposits | $ | 2,245,701 | $ | 1,672,901 | $ | 1,366,453 | $ | 1,522,433 | $ | 1,469,579 | ||||||||||
| Interest-bearing deposits | 3,864,947 | 3,928,475 | 3,829,898 | 3,818,080 | 3,631,437 | |||||||||||||||
| Total deposits | 6,110,648 | 5,601,376 | 5,196,351 | 5,340,513 | 5,101,016 | |||||||||||||||
| Short-term borrowings | 76,803 | 66,666 | 75,985 | 71,728 | 68,957 | |||||||||||||||
| FHLB advances and other borrowings | 310,171 | 440,171 | 440,171 | 529,171 | 779,171 | |||||||||||||||
| Subordinated debt | 139,091 | 138,998 | 138,906 | 169,888 | 169,795 | |||||||||||||||
| Trust preferred debentures | 49,374 | 49,235 | 49,094 | 48,954 | 48,814 | |||||||||||||||
| Other liabilities | 93,881 | 139,669 | 81,317 | 89,065 | 79,396 | |||||||||||||||
| Total liabilities | 6,779,968 | 6,436,115 | 5,981,824 | 6,249,319 | 6,247,149 | |||||||||||||||
| Total shareholders’ equity | 663,837 | 657,844 | 648,186 | 635,467 | 621,391 | |||||||||||||||
| Total liabilities and shareholders’ equity | $ | 7,443,805 | $ | 7,093,959 | $ | 6,630,010 | $ | 6,884,786 | $ | 6,868,540 | ||||||||||
| MIDLAND STATES BANCORP, INC. | ||||||||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) | ||||||||||||||||||||
| As of | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| (in thousands) | 2021 | 2021 | 2021 | 2021 | 2020 | |||||||||||||||
| Loan Portfolio | ||||||||||||||||||||
| Equipment finance loans | $ | 521,973 | $ | 486,623 | $ | 464,380 | $ | 456,059 | $ | 451,437 | ||||||||||
| Equipment finance leases | 423,280 | 412,430 | 407,161 | 402,546 | 410,064 | |||||||||||||||
| Commercial FHA warehouse lines | 91,927 | 180,248 | 129,607 | 205,115 | 273,298 | |||||||||||||||
| SBA PPP loans | 52,477 | 82,410 | 146,728 | 211,564 | 184,401 | |||||||||||||||
| Other commercial loans | 783,811 | 718,054 | 683,365 | 702,156 | 776,439 | |||||||||||||||
| Total commercial loans and leases | 1,873,468 | 1,879,765 | 1,831,241 | 1,977,440 | 2,095,639 | |||||||||||||||
| Commercial real estate | 1,816,828 | 1,562,013 | 1,540,489 | 1,494,031 | 1,525,973 | |||||||||||||||
| Construction and land development | 193,749 | 200,792 | 212,508 | 191,870 | 172,737 | |||||||||||||||
| Residential real estate | 338,151 | 344,414 | 366,612 | 398,501 | 442,880 | |||||||||||||||
| Consumer | 1,002,605 | 928,570 | 885,016 | 848,964 | 866,102 | |||||||||||||||
| Total loans | $ | 5,224,801 | $ | 4,915,554 | $ | 4,835,866 | $ | 4,910,806 | $ | 5,103,331 | ||||||||||
| Deposit Portfolio | ||||||||||||||||||||
| Noninterest-bearing demand | $ | 2,245,701 | $ | 1,672,901 | $ | 1,366,453 | $ | 1,522,433 | $ | 1,469,579 | ||||||||||
| Interest-bearing: | ||||||||||||||||||||
| Checking | 1,663,021 | 1,697,326 | 1,619,436 | 1,601,449 | 1,568,888 | |||||||||||||||
| Money market | 869,067 | 852,836 | 787,688 | 819,455 | 785,871 | |||||||||||||||
| Savings | 679,115 | 665,710 | 669,277 | 653,256 | 597,966 | |||||||||||||||
| Time | 630,583 | 688,693 | 721,502 | 718,788 | 655,620 | |||||||||||||||
| Brokered time | 23,161 | 23,910 | 31,995 | 25,132 | 23,092 | |||||||||||||||
| Total deposits | $ | 6,110,648 | $ | 5,601,376 | $ | 5,196,351 | $ | 5,340,513 | $ | 5,101,016 | ||||||||||
| MIDLAND STATES BANCORP, INC. | ||||||||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) | ||||||||||||||||||||
| For the Quarter Ended | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| (dollars in thousands) | 2021 | 2021 | 2021 | 2021 | 2020 | |||||||||||||||
| Average Balance Sheets | ||||||||||||||||||||
| Cash and cash equivalents | $ | 685,655 | $ | 525,848 | $ | 509,886 | $ | 350,061 | $ | 415,686 | ||||||||||
| Investment securities | 915,707 | 773,372 | 734,462 | 680,202 | 672,937 | |||||||||||||||
| Loans | 4,995,794 | 4,800,063 | 4,826,234 | 4,992,802 | 4,998,912 | |||||||||||||||
| Loans held for sale | 34,272 | 15,204 | 36,299 | 65,365 | 45,196 | |||||||||||||||
| Nonmarketable equity securities | 39,203 | 43,873 | 49,388 | 55,935 | 51,906 | |||||||||||||||
| Total interest-earning assets | 6,670,631 | 6,158,360 | 6,156,269 | 6,144,365 | 6,184,637 | |||||||||||||||
| Non-earning assets | 605,060 | 597,153 | 589,336 | 602,017 | 602,716 | |||||||||||||||
| Total assets | $ | 7,275,691 | $ | 6,755,513 | $ | 6,745,605 | $ | 6,746,382 | $ | 6,787,353 | ||||||||||
| Interest-bearing deposits | $ | 3,913,475 | $ | 3,895,970 | $ | 3,815,179 | $ | 3,757,108 | $ | 3,680,645 | ||||||||||
| Short-term borrowings | 66,677 | 68,103 | 65,727 | 75,544 | 62,432 | |||||||||||||||
| FHLB advances and other borrowings | 319,954 | 440,171 | 519,490 | 617,504 | 682,981 | |||||||||||||||
| Subordinated debt | 139,046 | 138,954 | 165,155 | 169,844 | 169,751 | |||||||||||||||
| Trust preferred debentures | 49,307 | 49,167 | 49,026 | 48,887 | 48,751 | |||||||||||||||
| Total interest-bearing liabilities | 4,488,459 | 4,592,365 | 4,614,577 | 4,668,887 | 4,644,560 | |||||||||||||||
| Noninterest-bearing deposits | 2,049,802 | 1,434,193 | 1,411,428 | 1,370,604 | 1,446,359 | |||||||||||||||
| Other noninterest-bearing liabilities | 84,538 | 77,204 | 78,521 | 82,230 | 73,840 | |||||||||||||||
| Shareholders' equity | 652,892 | 651,751 | 641,079 | 624,661 | 622,594 | |||||||||||||||
| Total liabilities and shareholders' equity | $ | 7,275,691 | $ | 6,755,513 | $ | 6,745,605 | $ | 6,746,382 | $ | 6,787,353 | ||||||||||
| Yields | ||||||||||||||||||||
| Earning Assets | ||||||||||||||||||||
| Cash and cash equivalents | 0.16 | % | 0.16 | % | 0.11 | % | 0.11 | % | 0.12 | % | ||||||||||
| Investment securities | 2.12 | % | 2.34 | % | 2.43 | % | 2.51 | % | 2.65 | % | ||||||||||
| Loans | 4.36 | % | 4.42 | % | 4.43 | % | 4.50 | % | 4.58 | % | ||||||||||
| Loans held for sale | 3.53 | % | 2.79 | % | 2.88 | % | 2.74 | % | 3.14 | % | ||||||||||
| Nonmarketable equity securities | 5.07 | % | 5.05 | % | 4.94 | % | 4.93 | % | 5.22 | % | ||||||||||
| Total interest-earning assets | 3.62 | % | 3.79 | % | 3.83 | % | 4.02 | % | 4.06 | % | ||||||||||
| Interest-Bearing Liabilities | ||||||||||||||||||||
| Interest-bearing deposits | 0.22 | % | 0.26 | % | 0.31 | % | 0.34 | % | 0.36 | % | ||||||||||
| Short-term borrowings | 0.12 | % | 0.12 | % | 0.12 | % | 0.13 | % | 0.14 | % | ||||||||||
| FHLB advances and other borrowings | 1.75 | % | 1.80 | % | 1.91 | % | 1.69 | % | 1.71 | % | ||||||||||
| Subordinated debt | 5.78 | % | 5.79 | % | 5.61 | % | 5.57 | % | 5.60 | % | ||||||||||
| Trust preferred debentures | 3.90 | % | 3.92 | % | 4.00 | % | 4.08 | % | 4.03 | % | ||||||||||
| Total interest-bearing liabilities | 0.54 | % | 0.61 | % | 0.72 | % | 0.75 | % | 0.79 | % | ||||||||||
| Cost of Deposits | 0.15 | % | 0.19 | % | 0.23 | % | 0.25 | % | 0.26 | % | ||||||||||
| Net Interest Margin | 3.25 | % | 3.34 | % | 3.29 | % | 3.45 | % | 3.47 | % | ||||||||||
| MIDLAND STATES BANCORP, INC. | ||||||||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) | ||||||||||||||||||||
| As of and for the Quarter Ended | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| (dollars in thousands, except per share data) | 2021 | 2021 | 2021 | 2021 | 2020 | |||||||||||||||
| Asset Quality | ||||||||||||||||||||
| Loans 30-89 days past due | $ | 17,514 | $ | 16,772 | $ | 20,224 | $ | 24,819 | $ | 31,460 | ||||||||||
| Nonperforming loans | 42,580 | 54,620 | 61,363 | 52,826 | 54,070 | |||||||||||||||
| Nonperforming assets | 57,069 | 69,261 | 76,926 | 75,004 | 75,432 | |||||||||||||||
| Net charge-offs | 4,613 | 2,989 | 4,023 | 1,706 | 2,328 | |||||||||||||||
| Loans 30-89 days past due to total loans | 0.34 | % | 0.34 | % | 0.42 | % | 0.51 | % | 0.62 | % | ||||||||||
| Nonperforming loans to total loans | 0.81 | % | 1.11 | % | 1.27 | % | 1.08 | % | 1.06 | % | ||||||||||
| Nonperforming assets to total assets | 0.77 | % | 0.98 | % | 1.16 | % | 1.09 | % | 1.10 | % | ||||||||||
| Allowance for credit losses to total loans | 0.98 | % | 1.13 | % | 1.21 | % | 1.28 | % | 1.18 | % | ||||||||||
| Allowance for credit losses to nonperforming loans | 119.92 | % | 101.93 | % | 95.60 | % | 118.67 | % | 111.79 | % | ||||||||||
| Net charge-offs to average loans | 0.37 | % | 0.25 | % | 0.33 | % | 0.14 | % | 0.19 | % | ||||||||||
| Wealth Management | ||||||||||||||||||||
| Trust assets under administration | $ | 4,217,412 | $ | 4,058,168 | $ | 4,077,581 | $ | 3,560,427 | $ | 3,480,759 | ||||||||||
| Market Data | ||||||||||||||||||||
| Book value per share at period end | $ | 30.11 | $ | 29.64 | $ | 28.96 | $ | 28.43 | $ | 27.83 | ||||||||||
| Tangible book value per share at period end (1) | $ | 21.66 | $ | 21.17 | $ | 20.48 | $ | 19.98 | $ | 19.31 | ||||||||||
| Market price at period end | $ | 24.79 | $ | 24.73 | $ | 26.27 | $ | 27.74 | $ | 17.87 | ||||||||||
| Shares outstanding at period end | 22,050,537 | 22,193,141 | 22,380,492 | 22,351,740 | 22,325,471 | |||||||||||||||
| Capital | ||||||||||||||||||||
| Total capital to risk-weighted assets | 12.19 | % | 13.10 | % | 13.11 | % | 13.73 | % | 13.24 | % | ||||||||||
| Tier 1 capital to risk-weighted assets | 9.16 | % | 9.73 | % | 9.64 | % | 9.62 | % | 9.20 | % | ||||||||||
| Tier 1 common capital to risk-weighted assets | 8.08 | % | 8.55 | % | 8.44 | % | 8.39 | % | 7.99 | % | ||||||||||
| Tier 1 leverage ratio | 7.75 | % | 8.16 | % | 8.00 | % | 7.79 | % | 7.50 | % | ||||||||||
| Tangible common equity to tangible assets (1) | 6.58 | % | 6.80 | % | 7.12 | % | 6.67 | % | 6.46 | % | ||||||||||
| (1) Non-GAAP financial measures. Refer to pages 13 - 15 for a reconciliation to the comparable GAAP financial measures. | ||||||||||||||||||||
| MIDLAND STATES BANCORP, INC. | ||||||||||||||||||||
| RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) | ||||||||||||||||||||
| Adjusted Earnings Reconciliation | ||||||||||||||||||||
| For the Quarter Ended | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| (dollars in thousands, except per share data) | 2021 | 2021 | 2021 | 2021 | 2020 | |||||||||||||||
| Income before income taxes - GAAP | $ | 30,600 | $ | 25,431 | $ | 19,041 | $ | 24,040 | $ | 10,746 | ||||||||||
| Adjustments to noninterest income: | ||||||||||||||||||||
| Gain on sales of investment securities, net | - | 160 | 377 | - | - | |||||||||||||||
| Gain on termination of hedged interest rate swap | 1,845 | - | - | 314 | - | |||||||||||||||
| Other income | - | - | (27 | ) | 75 | 3 | ||||||||||||||
| Total adjustments to noninterest income | 1,845 | 160 | 350 | 389 | 3 | |||||||||||||||
| Adjustments to noninterest expense: | ||||||||||||||||||||
| Loss on mortgage servicing rights held for sale | - | 79 | 143 | - | 617 | |||||||||||||||
| Impairment related to facilities optimization | - | - | - | - | (10 | ) | ||||||||||||||
| FHLB advances prepayment fees | 4,859 | - | 3,669 | 8 | 4,872 | |||||||||||||||
| Integration and acquisition expenses | 171 | 176 | 3,771 | 238 | 231 | |||||||||||||||
| Total adjustments to noninterest expense | 5,030 | 255 | 7,583 | 246 | 5,710 | |||||||||||||||
| Adjusted earnings pre tax | 33,785 | 25,526 | 26,274 | 23,897 | 16,453 | |||||||||||||||
| Adjusted earnings tax | 8,369 | 5,910 | 6,519 | 5,463 | 3,982 | |||||||||||||||
| Adjusted earnings - non-GAAP | $ | 25,416 | $ | 19,616 | $ | 19,755 | $ | 18,434 | $ | 12,471 | ||||||||||
| Adjusted diluted earnings per common share | $ | 1.12 | $ | 0.86 | $ | 0.86 | $ | 0.81 | $ | 0.54 | ||||||||||
| Adjusted return on average assets | 1.39 | % | 1.15 | % | 1.17 | % | 1.11 | % | 0.73 | % | ||||||||||
| Adjusted return on average shareholders' equity | 15.44 | % | 11.94 | % | 12.36 | % | 11.97 | % | 7.97 | % | ||||||||||
| Adjusted return on average tangible common equity | 21.65 | % | 16.82 | % | 17.52 | % | 17.18 | % | 11.50 | % | ||||||||||
| Adjusted Pre-Tax, Pre-Provision Earnings Reconciliation | ||||||||||||||||||||
| For the Quarter Ended | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| (dollars in thousands) | 2021 | 2021 | 2021 | 2021 | 2020 | |||||||||||||||
| Adjusted earnings pre tax - non- GAAP | $ | 33,785 | $ | 25,526 | $ | 26,274 | $ | 23,897 | $ | 16,453 | ||||||||||
| Provision for credit losses | 467 | (184 | ) | (455 | ) | 3,565 | 10,058 | |||||||||||||
| Impairment on commercial mortgage servicing rights | 2,072 | 3,037 | 1,148 | 1,275 | 2,344 | |||||||||||||||
| Adjusted pre-tax, pre-provision earnings - non-GAAP | $ | 36,324 | $ | 28,379 | $ | 26,967 | $ | 28,737 | $ | 28,855 | ||||||||||
| Adjusted pre-tax, pre-provision return on average assets | 1.98 | % | 1.67 | % | 1.60 | % | 1.73 | % | 1.69 | % | ||||||||||
| MIDLAND STATES BANCORP, INC. | ||||||||||||||||||||
| RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued) | ||||||||||||||||||||
| Efficiency Ratio Reconciliation | ||||||||||||||||||||
| For the Quarter Ended | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| (dollars in thousands) | 2021 | 2021 | 2021 | 2021 | 2020 | |||||||||||||||
| Noninterest expense - GAAP | $ | 45,757 | $ | 41,292 | $ | 48,941 | $ | 39,079 | $ | 47,048 | ||||||||||
| Loss on mortgage servicing rights held for sale | - | (79 | ) | (143 | ) | - | (617 | ) | ||||||||||||
| Impairment related to facilities optimization | - | - | - | - | 10 | |||||||||||||||
| FHLB advances prepayment fees | (4,859 | ) | - | (3,669 | ) | (8 | ) | (4,872 | ) | |||||||||||
| Integration and acquisition expenses | (171 | ) | (176 | ) | (3,771 | ) | (238 | ) | (231 | ) | ||||||||||
| Adjusted noninterest expense | $ | 40,727 | $ | 41,037 | $ | 41,358 | $ | 38,833 | $ | 41,338 | ||||||||||
| Net interest income - GAAP | $ | 54,301 | $ | 51,396 | $ | 50,110 | $ | 51,868 | $ | 53,516 | ||||||||||
| Effect of tax-exempt income | 372 | 402 | 383 | 386 | 413 | |||||||||||||||
| Adjusted net interest income | 54,673 | 51,798 | 50,493 | 52,254 | 53,929 | |||||||||||||||
| Noninterest income - GAAP | 22,523 | 15,143 | 17,417 | 14,816 | 14,336 | |||||||||||||||
| Impairment on commercial mortgage servicing rights | 2,072 | 3,037 | 1,148 | 1,275 | 2,344 | |||||||||||||||
| Gain on sales of investment securities, net | - | (160 | ) | (377 | ) | - | - | |||||||||||||
| Gain on termination of hedged interest rate swap | (1,845 | ) | - | - | (314 | ) | - | |||||||||||||
| Other | - | - | 27 | (75 | ) | (3 | ) | |||||||||||||
| Adjusted noninterest income | 22,750 | 18,020 | 18,215 | 15,702 | 16,677 | |||||||||||||||
| Adjusted total revenue | $ | 77,423 | $ | 69,818 | $ | 68,708 | $ | 67,956 | $ | 70,606 | ||||||||||
| Efficiency ratio | 52.61 | % | 58.78 | % | 60.19 | % | 57.14 | % | 58.55 | % | ||||||||||
| 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 | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| (dollars in thousands, except per share data) | 2021 | 2021 | 2021 | 2021 | 2020 | |||||||||||||||
| Shareholders' Equity to Tangible Common Equity | ||||||||||||||||||||
| Total shareholders' equity—GAAP | $ | 663,837 | $ | 657,844 | $ | 648,186 | $ | 635,467 | $ | 621,391 | ||||||||||
| Adjustments: | ||||||||||||||||||||
| Goodwill | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | ||||||||||
| Other intangible assets, net | (24,374 | ) | (26,065 | ) | (27,900 | ) | (26,867 | ) | (28,382 | ) | ||||||||||
| Tangible common equity | $ | 477,558 | $ | 469,875 | $ | 458,382 | $ | 446,696 | $ | 431,105 | ||||||||||
| Total Assets to Tangible Assets: | ||||||||||||||||||||
| Total assets—GAAP | $ | 7,443,805 | $ | 7,093,959 | $ | 6,630,010 | $ | 6,884,786 | $ | 6,868,540 | ||||||||||
| Adjustments: | ||||||||||||||||||||
| Goodwill | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | ||||||||||
| Other intangible assets, net | (24,374 | ) | (26,065 | ) | (27,900 | ) | (26,867 | ) | (28,382 | ) | ||||||||||
| Tangible assets | $ | 7,257,527 | $ | 6,905,990 | $ | 6,440,206 | $ | 6,696,015 | $ | 6,678,254 | ||||||||||
| Common Shares Outstanding | 22,050,537 | 22,193,141 | 22,380,492 | 22,351,740 | 22,325,471 | |||||||||||||||
| Tangible Common Equity to Tangible Assets | 6.58 | % | 6.80 | % | 7.12 | % | 6.67 | % | 6.46 | % | ||||||||||
| Tangible Book Value Per Share | $ | 21.66 | $ | 21.17 | $ | 20.48 | $ | 19.98 | $ | 19.31 | ||||||||||
| Return on Average Tangible Common Equity (ROATCE) | ||||||||||||||||||||
| For the Quarter Ended | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| (dollars in thousands) | 2021 | 2021 | 2021 | 2021 | 2020 | |||||||||||||||
| Net income available to common shareholders | $ | 23,107 | $ | 19,548 | $ | 20,124 | $ | 18,538 | $ | 8,333 | ||||||||||
| Average total shareholders' equity—GAAP | $ | 652,892 | $ | 651,751 | $ | 641,079 | $ | 624,661 | $ | 622,594 | ||||||||||
| Adjustments: | ||||||||||||||||||||
| Goodwill | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | ||||||||||
| Other intangible assets, net | (25,311 | ) | (27,132 | ) | (26,931 | ) | (27,578 | ) | (29,123 | ) | ||||||||||
| Average tangible common equity | $ | 465,677 | $ | 462,715 | $ | 452,244 | $ | 435,179 | $ | 431,567 | ||||||||||
| ROATCE | 19.69 | % | 16.76 | % | 17.85 | % | 17.28 | % | 7.68 | % | ||||||||||
