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Midland States Bancorp, Inc. Announces 2020 Second Quarter Results

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Midland States Bancorp reported a net income of $12.6 million, or $0.53 diluted earnings per share, for Q2 2020, a notable increase from $1.5 million, or $0.06 per share, in Q1 2020. Total loans rose 10.6% to $4.84 billion, while deposits increased 6.3% to $4.94 billion. The efficiency ratio improved to 58.5%. A key highlight was a provision for credit losses of $11.6 million due to an uncertain economic outlook. The bank's capital ratios exceeded regulatory requirements, and a stock repurchase program is ongoing with $18.3 million remaining.

Positive
  • Net income increased to $12.6 million in Q2 2020, from $1.5 million in Q1 2020.
  • Total loans rose by 10.6% to $4.84 billion.
  • Total deposits increased by 6.3% to $4.94 billion.
  • Efficiency ratio improved to 58.5%.
  • Strong capital ratios exceeding regulatory requirements.
  • Ongoing stock repurchase program with $18.3 million remaining.
Negative
  • Provision for credit losses of $11.6 million due to economic uncertainty.
  • Net interest margin decreased to 3.32%, down from 3.48% in Q1 2020.

Summary

  • Net income of $12.6 million, or $0.53 diluted earnings per share
  • Total loans increased $463.2 million, or 10.6%, from the end of the prior quarter
  • Total deposits increased $292.5 million, or 6.3%, from the end of the prior quarter
  • Efficiency ratio of 58.5%
  • Allowance for credit losses strengthened to 0.97% of total loans
  • $276.0 million in Paycheck Protection Program loans as of June 30, 2020

EFFINGHAM, Ill., July 23, 2020 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (Nasdaq: MSBI) (the “Company”) today reported net income of $12.6 million, or $0.53 diluted earnings per share, for the second quarter of 2020.  This compares to net income of $1.5 million, or $0.06 diluted earnings per share, for the first quarter of 2020, which was impacted by an $8.5 million impairment on commercial mortgage servicing rights (“MSR”) and $1.0 million in integration and acquisition expenses, and net income of $16.4 million, or $0.67 diluted earnings per share, for the second quarter of 2019.

Jeffrey G. Ludwig, President and Chief Executive Officer of the Company, said, “Despite the ongoing impact of the COVID-19 pandemic, we saw a number of positive trends in the quarter including significant balance sheet growth, higher revenue, and lower expense levels, which combined to produce a strong quarter of earnings and an increase in our tangible book value per share.

“While a great deal of uncertainty remains regarding the duration of the pandemic, we are seeing some encouraging signs across our markets and customers.  Overall asset quality remained relatively stable during the second quarter while requests for loan deferrals have slowed considerably in June and July.  Approximately 60% to 65% of the loans we granted deferrals to in April and May are expected to resume making their scheduled payments once their deferral period ends. 

“Our participation in the Small Business Administration’s Paycheck Protection Program (“PPP”) has continued to be a valuable source of support to our communities.  Through the end of June, we had more than 2,300 applications approved by the SBA totaling $276.0 million in loans for our customers, which will help support more than 28,000 employees in our markets.

“We continue to increase our allowance for credit losses and maintain strong capital and liquidity positions.  We believe our strong balance sheet will enable us to continue supporting our clients through the duration of this crisis, while we focus on building upon the positive trends we are seeing in revenue generation and operating efficiencies,” said Mr. Ludwig.

Factors Affecting Comparability

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

In addition, effective January 1, 2020, the Company adopted the new current expected credit loss (“CECL”) accounting standard, which replaces the incurred loss methodology with an estimated life of loan credit loss methodology.

Adjusted Earnings

Financial results for the second quarter of 2020 were impacted by a $0.4 million loss on residential mortgage servicing rights held-for-sale and $0.1 million in integration and acquisition expenses.  Excluding these amounts and certain income, adjusted earnings were $12.9 million, or $0.55 diluted earnings per share, for the second quarter of 2020. 

Financial results for the first quarter of 2020 were impacted by $1.0 million in integration and acquisition expenses, a $0.5 million loss on residential mortgage servicing rights held-for-sale, and a $0.2 million loss on the repurchase of subordinated debt.  Excluding these amounts and certain income, adjusted earnings were $2.8 million, or $0.11 diluted earnings per share, for the first 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 second quarter of 2020 was 3.32%, compared to 3.48% for the first quarter of 2020.  The Company’s net interest margin benefits from accretion income on purchased loan portfolios, which contributed 12 and 16 basis points to net interest margin in the second quarter of 2020 and first quarter of 2020, respectively.  Excluding the impact of accretion income, net interest margin decreased 12 basis points from the first quarter of 2020, which was primarily attributable to excess liquidity invested in lower-yielding earning assets and the addition of low-yielding loans originated through the PPP program.

Relative to the second quarter of 2019, net interest margin decreased from 3.76%.  Accretion income on purchased loan portfolios contributed 25 basis points to net interest margin in the second quarter of 2019.  Excluding the impact of accretion income, net interest margin decreased 31 basis points compared to the second quarter of 2019, primarily due to the impact of new subordinated debt issued in September 2019 and a decline in the yield on earning assets. 

Net Interest Income

Net interest income for the second quarter of 2020 was $49.0 million, an increase of 5.0% from $46.7 million for the first quarter of 2020.  Excluding accretion income, net interest income increased $2.8 million from the prior quarter.  Accretion income associated with purchased loan portfolios totaled $1.8 million for the second quarter of 2020, compared with $2.2 million for the first quarter of 2020. 

Relative to the second quarter of 2019, net interest income increased $2.9 million, or 6.3%.  Accretion income for the second quarter of 2019 was $3.4 million.  Excluding the impact of accretion income, net interest income increased primarily due to the acquisition of HomeStar’s loans and securities and organic loan growth.

Noninterest Income

Noninterest income for the second quarter of 2020 was $19.4 million, an increase of 125.6% from $8.6 million for the first quarter of 2020, which included an $8.5 million impairment on commercial MSRs.  Excluding the impairment, the increase was primarily attributable to higher commercial FHA and residential mortgage banking revenue.

Relative to the second quarter of 2019, noninterest income decreased 1.0% from $19.6 million.  The decrease was primarily attributable to lower commercial FHA revenue and service charges on deposit accounts, partially offset by higher residential mortgage banking revenue.

Wealth management revenue for the second quarter of 2020 was $5.7 million, unchanged from the first quarter of 2020.  Compared to the second quarter of 2019, wealth management revenue increased 3.5%.

Commercial FHA revenue for the second quarter of 2020 was $3.4 million, compared to $1.3 million in the first quarter of 2020.  During the second quarter of 2020, the Company recorded a $0.1 million commercial MSR impairment, compared to a $8.5 million impairment recorded in the first quarter of 2020.  The Company originated $134.8 million in rate lock commitments during the second quarter of 2020, compared to $13.3 million in the prior quarter.  Compared to the second quarter of 2019, commercial FHA revenue decreased $0.9 million.

Noninterest Expense

Noninterest expense for the second quarter of 2020 was $40.8 million, which included a $0.4 million loss on residential MSRs held for sale and $0.1 million in integration and acquisition expenses, compared with $42.7 million for the first quarter of 2020, which included $1.0 million in integration and acquisition expenses, a $0.5 million loss on residential MSRs held for sale, and a $0.2 million loss on the repurchase of subordinated debt.  Excluding losses on residential MSRs held for sale, integration and acquisition expenses, and the loss on the repurchase of subordinated debt, the $0.6 million decrease in noninterest expense primarily reflects lower salaries and employee benefits expense resulting from the staffing level adjustments made during the first quarter of 2020.

Relative to the second quarter of 2019, noninterest expense increased 1.5% from $40.2 million, which included $0.3 million in integration and acquisition expenses and a $0.5 million gain on residential MSRs held for sale.  Excluding integration and acquisition expenses and gains/losses on MSRs held for sale, noninterest expense was essentially unchanged from the prior year period.

Loan Portfolio

Total loans outstanding were $4.84 billion at June 30, 2020, compared with $4.38 billion at March 31, 2020 and $4.07 billion at June 30, 2019.  The increase in total loans from March 31, 2020 was primarily attributable to loans originated under the PPP program and an increase in consumer loans and equipment finance loans and leases.

Equipment finance balances increased $78.2 million from March 31, 2020, which are booked within the commercial loans and leases portfolio, reflecting management’s efforts to grow the equipment finance business. 

The increase in total loans from June 30, 2019 was primarily attributable to the addition of HomeStar’s loan portfolio, the growth in equipment finance balances, and loans originated under the PPP program.

Deposits

Total deposits were $4.94 billion at June 30, 2020, compared with $4.65 billion at March 31, 2020, and $4.01 billion at June 30, 2019.  The increase in total deposits from both prior periods was attributable to an increase in core deposits, primarily from commercial customers, partially driven by inflows of PPP-related funds, while the addition of HomeStar’s deposits also contributed to the increase from June 30, 2019. 

Asset Quality

Nonperforming loans totaled $60.5 million, or 1.25% of total loans, at June 30, 2020, compared with $58.2 million, or 1.33% of total loans, at March 31, 2020. The increase in non-performing loans was primarily attributable to the addition of one large relationship partially reduced by charge-offs and transfers to other real estate owned. At June 30, 2019, nonperforming loans totaled $50.7 million, or 1.24% of total loans.  

Net charge-offs for the second quarter of 2020 were $3.1 million, or 0.26% of average loans on an annualized basis. 

The Company recorded a provision for credit losses on loans of $11.6 million for the second quarter of 2020, which reflects the weakened economic outlook due to the impact of the COVID-19 pandemic. 

The Company’s allowance for credit losses on loans was 0.97% of total loans and 77.8% of nonperforming loans at June 30, 2020, compared with 0.88% of total loans and 66.3% of nonperforming loans at March 31, 2020.  Approximately 96% of the allowance for credit losses on loans at June 30, 2020 was allocated to general reserves.

Capital

At June 30, 2020, 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:

100%; border-collapse:collapse !important;">
55%; width:55%; min-width:55%;"> 15%; width:15%; min-width:15%;"> Bank Level
Ratios as of
June 30, 2020		15%; width:15%; min-width:15%;">Consolidated
Ratios as of
June 30, 2020		15%; width:15%; min-width:15%;"> 
Minimum Regulatory
Requirements (2)
Total capital to risk-weighted assets12.05%13.67%10.50%
Tier 1 capital to risk-weighted assets11.28%9.71%8.50%
Tier 1 leverage ratio9.01%7.75%4.00%
Common equity Tier 1 capital11.28%8.44%7.00%
Tangible common equity to tangible assets (1)NA6.67%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 second quarter of 2020, the Company repurchased 470,278 shares of its common stock at a weighted average price of $15.22 under its stock repurchase program, which authorized the repurchase of up to $50 million of its common stock.  As of June 30, 2020, the Company had $18.3 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, July 24, 2020, to discuss its financial results.  The call can be accessed via telephone at (877) 516-3531; conference ID: 1477734.  A recorded replay can be accessed through July 31, 2020, by dialing (855) 859-2056; conference ID: 1477734.

A slide presentation relating to the second quarter 2020 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 June 30, 2020, the Company had total assets of approximately $6.64 billion, and its Wealth Management Group had assets under administration of approximately $3.25 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 the effects of the COVID-19 pandemic including 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; 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

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MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited)
                    
 For the Quarter Ended 
 June 30, March 31, December 31,  September 30,  June 30, 
(dollars in thousands, except per share data)2020 2020 2019 2019 2019
Earnings Summary                   
50%; width:50%; min-width:50%;">Net interest income1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">48,9891%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">46,6511%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">48,6871%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">49,4501%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">46,0771%; width:1%; min-width:1%;"> 
Provision for credit losses on loans 11,610   10,569   5,305   4,361    4,076 
Noninterest income 19,396   8,598   19,014   19,606    19,587 
Noninterest expense 40,782   42,675   46,325   48,025    40,194 
Income before income taxes 15,993   2,005   16,071   16,670    21,394 
Income taxes 3,424   456   3,279   4,015    5,039 
Net income 12,569   1,549   12,792   12,655    16,355 
Preferred stock dividends, net -   -   -   (22)   34 
Net income available to common shareholders$12,569  $1,549  $12,792  $12,677   $16,321 
                    
Diluted earnings per common share$0.53  $0.06  $0.51  $0.51   $0.67 
Weighted average shares outstanding - diluted 23,339,964   24,538,002   24,761,960   24,684,529    24,303,211 
Return on average assets 0.77%  0.10%  0.83%  0.84 %  1.17%
Return on average shareholders' equity 8.00%  0.96%  7.71%  7.71 %  10.43%
Return on average tangible common equity (1) 11.84%  1.39%  11.24%  11.19 %  15.34%
Net interest margin 3.32%  3.48%  3.56%  3.70 %  3.76%
Efficiency ratio (1) 58.53%  63.78%  59.46%  60.63 %  61.58%
                    
Adjusted Earnings Performance Summary                   
Adjusted earnings (1)$12,884  $2,806  $16,110  $16,422   $16,196 
Adjusted diluted earnings per common share (1)$0.55  $0.11  $0.64  $0.66   $0.66 
Adjusted return on average assets (1) 0.78%  0.19%  1.04%  1.09 %  1.16%
Adjusted return on average shareholders' equity (1) 8.20%  1.73%  9.71%  10.01 %  10.33%
Adjusted return on average tangible common equity (1) 12.14%  2.53%  14.15%  14.52 %  15.19%
                    
(1) Non-GAAP financial measures. Refer to pages 13 - 15 for a reconciliation to the comparable GAAP financial measures.
 


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MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
  
 For the Quarter Ended 
 June 30, March 31, December 31,  September 30,  June 30, 
(in thousands, except per share data)2020 2020 2019 2019 2019
Net interest income:                   
46%; width:46%; min-width:46%;">Interest income1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">60,5481%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">61,3141%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">64,4441%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">65,0061%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">60,6361%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 
Interest expense 11,559    14,663    15,757    15,556    14,559  
Net interest income 48,989    46,651    48,687    49,450    46,077  
Provision for credit losses on loans 11,610    10,569    5,305    4,361    4,076  
Net interest income after provision for credit losses on loans 37,379    36,082    43,382    45,089    42,001  
Noninterest income:                   
Wealth management revenue 5,698    5,677    5,377    5,998    5,504  
Commercial FHA revenue 3,414    1,267    3,702    3,954    4,358  
Residential mortgage banking revenue 2,723    1,755    763    720    611  
Service charges on deposit accounts 1,706    2,656    2,860    3,008    2,639  
Interchange revenue 3,013    2,833    3,053    3,249    3,010  
Gain on sales of investment securities, net -    -    635    25    14  
(Impairment) recapture on commercial mortgage servicing rights (107)   (8,468)   (1,613)   (1,060)   559  
Other income 2,949    2,878    4,237    3,712    2,892  
Total noninterest income 19,396    8,598    19,014    19,606    19,587  
Noninterest expense:                   
Salaries and employee benefits 20,740    21,063    23,650    25,083    21,134  
Occupancy and equipment 4,286    4,869    4,654    4,793    4,511  
Data processing 5,300    5,334    6,074    5,271    4,821  
Professional 1,606    1,855    1,952    2,348    2,410  
Amortization of intangible assets 1,629    1,762    1,804    1,803    1,673  
Loss (gain) on mortgage servicing rights held for sale 391    496    95    (70)   (515) 
Other expense 6,830    7,296    8,096    8,797    6,160  
Total noninterest expense 40,782    42,675    46,325    48,025    40,194  
Income before income taxes 15,993    2,005    16,071    16,670    21,394  
Income taxes 3,424    456    3,279    4,015    5,039  
Net income 12,569    1,549    12,792    12,655    16,355  
Preferred stock dividends, net -    -    -    (22)   34  
Net income available to common shareholders$12,569   $1,549   $12,792   $12,677   $16,321  
                    
Basic earnings per common share$0.53   $0.06   $0.52   $0.51   $0.67  
Diluted earnings per common share$0.53   $0.06   $0.51   $0.51   $0.67  
                    


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MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                   
 As of
 June 30, March 31,  December 31,  September 30,  June 30, 
(in thousands)2020 2020 2019 2019 2019
Assets                  
47%; width:47%; min-width:47%;">Cash and cash equivalents1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">519,8681%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">449,3961%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">394,5051%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">409,3461%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">245,4151%; width:1%; min-width:1%;"> 
Investment securities 639,693    661,894    655,054    668,630    613,026 
Loans 4,839,423    4,376,204    4,401,410    4,328,835    4,073,527 
Allowance for credit losses on loans (47,093)   (38,545)   (28,028)   (24,917)   (25,925)
Total loans, net 4,792,330    4,337,659    4,373,382    4,303,918    4,047,602 
Loans held for sale 32,403    113,852    16,431    88,322    22,143 
Premises and equipment, net 89,046    90,118    91,055    93,896    94,824 
Other real estate owned 12,728    7,892    6,745    4,890    3,797 
Loan servicing rights, at lower of cost or fair value 44,239    44,566    53,824    54,124    54,191 
Mortgage servicing rights held for sale 1,244    1,460    1,972    1,860    159 
Goodwill 172,796    172,796    171,758    171,074    164,673 
Other intangible assets, net 31,495    33,124    34,886    36,690    33,893 
Cash surrender value of life insurance policies 144,215    143,323    142,423    141,510    140,593 
Other assets 164,441    152,150    144,982    139,644    125,739 
Total assets$6,644,498   $6,208,230   $6,087,017   $6,113,904   $5,546,055 
                   
Liabilities and Shareholders' Equity                  
Noninterest-bearing deposits$1,273,267   $1,052,726   $1,019,472   $1,015,081   $902,286 
Interest-bearing deposits 3,669,840    3,597,914    3,524,782    3,430,090    3,108,921 
Total deposits 4,943,107    4,650,640    4,544,254    4,445,171    4,011,207 
Short-term borrowings 77,136    43,578    82,029    122,294    113,844 
FHLB advances and other borrowings 693,865    593,089    493,311    559,932    582,387 
Subordinated debt 169,610    169,505    176,653    192,689    94,215 
Trust preferred debentures 48,551    48,420    48,288    48,165    48,041 
Other liabilities 78,640    71,838    80,571    90,131    56,473 
Total liabilities 6,010,909    5,577,070    5,425,106    5,458,382    4,906,167 
Total shareholders’ equity 633,589    631,160    661,911    655,522    639,888 
Total liabilities and shareholders’ equity$6,644,498   $6,208,230   $6,087,017   $6,113,904   $5,546,055 
                   


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MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                    
 As of 
 June 30, March 31, December 31,  September 30,  June 30, 
(in thousands)2020 2020 2019 2019 2019
Loan Portfolio                   
Commercial loans and leases$1,856,435  $1,439,145  $1,387,766  $1,292,511  $1,149,370 
Commercial real estate 1,495,183   1,507,280   1,526,504   1,622,363   1,524,369 
Construction and land development 207,593   208,361   208,733   215,978   250,414 
Residential real estate 509,453   548,014   568,291   587,984   552,406 
Consumer 770,759   673,404   710,116   609,999   596,968 
Total loans$4,839,423  $4,376,204  $4,401,410  $4,328,835  $4,073,527 
                    
Deposit Portfolio                   
Noninterest-bearing demand$1,273,267  $1,052,726  $1,019,472  $1,015,081  $902,286 
Interest-bearing:                   
Checking 1,484,728   1,425,022   1,342,788   1,222,599   1,009,023 
Money market 877,675   849,642   787,662   753,869   732,573 
Savings 594,685   534,457   522,456   526,938   442,017 
Time 689,841   765,870   822,160   833,038   785,337 
Brokered time 22,911   22,923   49,716   93,646   139,971 
Total deposits$4,943,107  $4,650,640  $4,544,254  $4,445,171  $4,011,207 
                    


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MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                    
 For the Quarter Ended 
 June 30, March 31, December 31,  September 30,  June 30, 
(dollars in thousands)2020 2020 2019 2019 2019
Average Balance Sheets                   
Cash and cash equivalents$489,941  $337,851  $406,526  $259,427  $162,110 
Investment securities 650,356   662,450   631,294   666,157   636,946 
Loans 4,696,288   4,384,206   4,359,144   4,352,635   4,086,720 
Loans held for sale 99,169   19,844   36,974   31,664   40,177 
Nonmarketable equity securities 50,661   45,124   43,745   44,010   44,217 
Total interest-earning assets 5,986,415   5,449,475   5,477,683   5,353,893   4,970,170 
Non-earning assets 619,411   624,594   649,169   636,028   618,023 
Total assets$6,605,826  $6,074,069  $6,126,852  $5,989,921  $5,588,193 
                    
Interest-bearing deposits$3,651,406  $3,549,515  $3,490,165  $3,429,063  $3,107,660 
Short-term borrowings 59,103   55,616   104,598   124,183   120,859 
FHLB advances and other borrowings 692,470   532,733   531,419   591,516   607,288 
Subordinated debt 169,560   170,026   182,149   106,090   94,196 
Trust preferred debentures 48,487   48,357   48,229   48,105   47,982 
Total interest-bearing liabilities 4,621,026   4,356,247   4,356,560   4,298,957   3,977,985 
Noninterest-bearing deposits 1,280,983   986,178   1,028,670   967,192   921,115 
Other noninterest-bearing liabilities 71,853   78,943   83,125   72,610   60,363 
Shareholders' equity 631,964   652,701   658,497   651,162   628,730 
Total liabilities and shareholders' equity$6,605,826  $6,074,069  $6,126,852  $5,989,921  $5,588,193 
                    
Yields                   
Earning Assets                   
Cash and cash equivalents 0.14%  1.26%  1.62%  2.14%  2.43%
Investment securities 3.05%  3.23%  3.10%  3.00%  3.11%
Loans 4.64%  5.01%  5.22%  5.31%  5.32%
Loans held for sale 4.07%  3.87%  4.12%  3.02%  4.50%
Nonmarketable equity securities 5.40%  5.39%  5.31%  5.33%  5.42%
Total interest-earning assets 4.10%  4.56%  4.70%  4.85%  4.94%
                    
Interest-Bearing Liabilities                   
Interest-bearing deposits 0.61%  0.95%  1.03%  1.08%  1.09%
Short-term borrowings 0.19%  0.73%  0.67%  0.68%  0.70%
FHLB advances and other borrowings 1.69%  2.24%  2.26%  2.36%  2.34%
Subordinated debt 5.85%  5.90%  5.94%  6.30%  6.43%
Trust preferred debentures 4.86%  6.02%  6.41%  6.83%  7.17%
Total interest-bearing liabilities 1.01%  1.35%  1.43%  1.44%  1.47%
                    
Cost of Deposits 0.45%  0.74%  0.80%  0.84%  0.84%
                    
Net Interest Margin 3.32%  3.48%  3.56%  3.70%  3.76%
                    


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MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                    
 As of and for the Quarter Ended 
 June 30, March 31,  December 31,  September 30,  June 30, 
(dollars in thousands, except per share data)2020 2020 2019 2019 2019
Asset Quality                   
Loans 30-89 days past due$36,551  $40,392  $29,876  $23,118  $21,554 
Nonperforming loans 60,513   58,166   42,082   45,168   50,676 
Nonperforming assets 74,707   67,158   50,027   50,058   54,473 
Net charge-offs 3,062   12,835   2,194   5,369   1,242 
Loans 30-89 days past due to total loans 0.76%  0.92%  0.68%  0.53%  0.53%
Nonperforming loans to total loans 1.25%  1.33%  0.96%  1.04%  1.24%
Nonperforming assets to total assets 1.12%  1.08%  0.82%  0.82%  0.98%
Allowance for credit losses to total loans 0.97%  0.88%  0.64%  0.58%  0.64%
Allowance for credit losses to nonperforming loans 77.82%  66.27%  66.60%  55.29%  51.16%
Net charge-offs to average loans 0.26%  1.18%  0.20%  0.49%  0.12%
                    
Wealth Management                   
Trust assets under administration$3,253,784  $2,967,536  $3,409,959  $3,281,260  $3,125,869 
                    
Market Data                   
Book value per share at period end$27.62  $26.99  $27.10  $26.93  $26.66 
Tangible book value per share at period end (1)$18.72  $18.19  $18.64  $18.40  $18.36 
Market price at period end$14.95  $17.49  $28.96  $26.05  $26.72 
Shares outstanding at period end 22,937,296   23,381,496   24,420,345   24,338,748   23,897,038 
                    
Capital                   
Total capital to risk-weighted assets 13.67%  13.73%  14.72%  14.82%  13.49%
Tier 1 capital to risk-weighted assets 9.71%  9.76%  10.52%  10.35%  10.85%
Tier 1 leverage ratio 7.75%  8.39%  8.74%  8.77%  9.27%
Tier 1 common capital to risk-weighted assets 8.44%  8.47%  9.20%  9.02%  9.38%
Tangible common equity to tangible assets (1) 6.67%  7.08%  7.74%  7.58%  8.20%
                    
(1) Non-GAAP financial measures. Refer to pages 13 - 15 for a reconciliation to the comparable GAAP financial measures.
                    


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MIDLAND STATES BANCORP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
                    
Adjusted Earnings Reconciliation                    
                    
 For the Quarter Ended 
 June 30, March 31, December 31,  September 30,  June 30, 
(dollars in thousands, except per share data)2020 2020 2019 2019 2019
47%; width:47%; min-width:47%;">Income before income taxes - GAAP1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">15,9931%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">2,0051%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">16,0711%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">16,6701%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">21,3941%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 
Adjustments to noninterest income:                   
Gain on sales of investment securities, net -   -    635    25    14  
Other 11   (13)   (6)   -    (23) 
Total adjustments to noninterest income 11   (13)   629    25    (9) 
Adjustments to noninterest expense:                   
Loss (gain) on mortgage servicing rights held for sale 391   496    95    (70)   (515) 
Loss on repurchase of subordinated debt -   193    1,778    -    -  
Integration and acquisition expenses 54   1,031    3,332    5,292    286  
Total adjustments to noninterest expense 445   1,720    5,205    5,222    (229) 
Adjusted earnings pre tax 16,427   3,738    20,647    21,867    21,174  
Adjusted earnings tax 3,543   932    4,537    5,445    4,978  
Adjusted earnings - non-GAAP 12,884   2,806    16,110    16,422    16,196  
Preferred stock dividends, net -   -    -    (22)   34  
Adjusted earnings available to common shareholders - non-GAAP$12,884  $2,806   $16,110   $16,444   $16,162  
Adjusted diluted earnings per common share$0.55  $0.11   $0.64   $0.66   $0.66  
Adjusted return on average assets 0.78%  0.19 %  1.04 %  1.09 %  1.16 %
Adjusted return on average shareholders' equity 8.20%  1.73 %  9.71 %  10.01 %  10.33 %
Adjusted return on average tangible common equity 12.14%  2.53 %  14.15 %  14.52 %  15.19 %
                    


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MIDLAND STATES BANCORP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (continued)
                    
Efficiency Ratio Reconciliation                   
 For the Quarter Ended 
 June 30, March 31, December 31,  September 30,  June 30, 
(dollars in thousands)2020 2020 2019 2019 2019
46%; width:46%; min-width:46%;">Noninterest expense - GAAP1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">40,7821%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">42,6751%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">46,3251%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">48,0251%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">40,1941%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 
(Loss) gain on mortgage servicing rights held for sale (391)   (496)   (95)   70    515  
Loss on repurchase of subordinated debt -    (193)   (1,778)   -    -  
Integration and acquisition expenses (54)   (1,031)   (3,332)   (5,292)   (286) 
Adjusted noninterest expense$40,337   $40,955   $41,120   $42,803   $40,423  
                    
Net interest income - GAAP$48,989   $46,651   $48,687   $49,450   $46,077  
Effect of tax-exempt income 438    485    474    502    526  
Adjusted net interest income 49,427    47,136    49,161    49,952    46,603  
                    
Noninterest income - GAAP$19,396   $8,598   $19,014   $19,606   $19,587  
Loan servicing rights impairment (recapture) 107    8,468    1,613    1,060    (559) 
Gain on sales of investment securities, net -    -    (635)   (25)   (14) 
Other (11)   13    6    -    23  
Adjusted noninterest income 19,492    17,079    19,998    20,641    19,037  
                    
Adjusted total revenue$68,919   $64,215   $69,159   $70,593   $65,640  
                    
Efficiency ratio 58.53 %  63.78 %  59.46 %  60.63 %  61.58 %
                    


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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 
 June 30, March 31, December 31,  September 30, June 30,
(dollars in thousands, except per share data)2020 2020 2019 2019 2019
Shareholders' Equity to Tangible Common Equity                   
46%; width:46%; min-width:46%;">Total shareholders' equity—GAAP1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">633,5891%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">631,1601%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">661,9111%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">655,5221%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;">$7%; width:7%; min-width:7%;">639,8881%; width:1%; min-width:1%;"> 1%; width:1%; min-width:1%;"> 
Adjustments:                   
Preferred stock -    -    -    -    (2,684) 
Goodwill (172,796)   (172,796)   (171,758)   (171,074)   (164,673) 
Other intangibles, net (31,495)   (33,124)   (34,886)   (36,690)   (33,893) 
Tangible common equity$429,298   $425,240   $455,267   $447,758   $438,638  
                    
Total Assets to Tangible Assets:                   
Total assets—GAAP$6,644,498   $6,208,230   $6,087,017   $6,113,904   $5,546,055  
Adjustments:                   
Goodwill (172,796)   (172,796)   (171,758)   (171,074)   (164,673) 
Other intangibles, net (31,495)   (33,124)   (34,886)   (36,690)   (33,893) 
Tangible assets$6,440,207   $6,002,310   $5,880,373   $5,906,140   $5,347,489  
                    
Common Shares Outstanding 22,937,296    23,381,496    24,420,345    24,338,748    23,897,038  
                    
Tangible Common Equity to Tangible Assets 6.67 %  7.08 %  7.74 %  7.58 %  8.20 %
Tangible Book Value Per Share$18.72   $18.19   $18.64   $18.40   $18.36  
                    
Return on Average Tangible Common Equity (ROATCE)                 
                    
 For the Quarter Ended
 June 30, March 31, December 31,  September 30, June 30,
(dollars in thousands)2020 2020 2019 2019 2019
Net income available to common shareholders$12,569   $1,549   $12,792   $12,677   $16,321  
                    
Average total shareholders' equity—GAAP$631,964   $652,701   $658,497   $651,162   $628,730  
Adjustments:                   
Preferred stock -    -    -    (814)   (2,708) 
Goodwill (172,796)   (171,890)   (171,082)   (166,389)   (164,673) 
Other intangibles, net (32,275)   (33,951)   (35,745)   (34,519)   (34,689) 
Average tangible common equity$426,893   $446,860   $451,670   $449,440   $426,660  
ROATCE 11.84 %  1.39 %  11.24 %  11.19 %  15.34 %

FAQ

What was Midland States Bancorp's net income for Q2 2020?

Midland States Bancorp reported a net income of $12.6 million for Q2 2020.

How much did total loans increase in Q2 2020 for MSBI?

Total loans increased by 10.6% to $4.84 billion in Q2 2020.

What is the diluted earnings per share for Midland States Bancorp in Q2 2020?

The diluted earnings per share for Q2 2020 were $0.53.

How did total deposits change for MSBI in Q2 2020?

Total deposits increased by 6.3% to $4.94 billion in Q2 2020.

What is the efficiency ratio for Midland States Bancorp for Q2 2020?

The efficiency ratio for Q2 2020 improved to 58.5%.

What amount is remaining in Midland States Bancorp's stock repurchase program?

As of June 30, 2020, there is $18.3 million remaining in the stock repurchase program.

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Midland States Bancorp, Inc.

NASDAQ:MSBI

MSBI Rankings

#2997 Ranked by Market Cap
#623 Ranked by Dividends

MSBI Latest News

Nov 7, 2024
Midland States Bancorp, Inc. Announces Common Stock and Preferred Stock Dividends
Oct 24, 2024
Midland States Bancorp, Inc. Announces 2024 Third Quarter Results
Oct 4, 2024
Midland States Bancorp, Inc. to Announce Third Quarter 2024 Financial Results on Thursday, October 24
Aug 6, 2024
Midland States Bancorp, Inc. Announces Common Stock and Preferred Stock Dividends
Jul 25, 2024
Midland States Bancorp, Inc. Announces 2024 Second Quarter Results

MSBI Stock Data

567.78M
21.40M
5.17%
63.33%
0.89%
Banks - Regional
State Commercial Banks
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United States of America
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