Midland States Bancorp, Inc. Announces 2021 Third Quarter Results

Rhea-AI Summary

Midland States Bancorp (MSBI) reported a net income of $19.5 million, or $0.86 diluted earnings per share, for Q3 2021, a slight decrease from $20.1 million in Q2 2021. Total loans rose by 8.2% annualized, and non-performing loans fell by 11.0%. The net interest margin improved to 3.34%, contributing to a decrease in noninterest expense to $41.3 million. Wealth management revenue grew 29.1% year-over-year. The company repurchased 210,177 shares at $24.93, with $24.9 million remaining in its repurchase program.

Positive

• Net income of $19.5 million for Q3 2021.
• Total loans increased by 8.2% annualized.
• Non-performing loans declined 11.0%.
• Net interest margin increased to 3.34%.
• Wealth management revenue rose 29.1% year-over-year.

Negative

• Net income decreased from $20.1 million in Q2 2021.
• Noninterest income fell 13.1% from the previous quarter.

Summary

• Net income of $19.5 million, or $0.86 diluted earnings per share
• Total loans increased 8.2% annualized, excluding commercial FHA lines and PPP loans
• Non-performing loans declined 11.0% from end of prior quarter
• Net interest margin increased 5 bps from prior quarter to 3.34%
• Efficiency ratio improved to 58.78% from 60.19% in prior quarter
• Book value and tangible book value per share increased 2.3% and 3.4%, respectively

EFFINGHAM, Ill., Oct. 28, 2021 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (Nasdaq: MSBI) (the “Company”) today reported net income of $19.5 million, or $0.86 diluted earnings per share, for the third quarter of 2021, which included a $3.0 million impairment charge on commercial mortgage servicing rights (“MSRs”). This compares to net income of $20.1 million, or $0.88 diluted earnings per share, for the second quarter of 2021, which included a $6.8 million tax benefit related to the settlement of a prior tax issue, $3.6 million in professional fees related to the settlement, and a $3.7 million charge related to the prepayment of a longer-term FHLB advance. This also compares to net income of $86 thousand, or $0.00 diluted earnings per share, for the third quarter of 2020, which included $13.9 million of charges primarily related to the Company’s branch and facilities optimization plan.

Jeffrey G. Ludwig, President and Chief Executive Officer of the Company, said, “We delivered another strong quarter driven by positive trends across most areas of our operations. The contribution of new additions to our commercial banking team and increasing demand helped drive another quarter of solid loan growth. We are also seeing improved asset quality, net interest margin expansion as a result of the elimination of higher cost funding sources, and growth in wealth management revenue following our acquisition of ATG Trust Company earlier this year. The higher level of revenue we are generating is driving further improvement in operating leverage and an increase in pre-provision, pre-tax income.

“We expect to see a continuation of these positive trends in the fourth quarter. We are benefitting from our efforts to increase our presence in higher growth markets in Northern Illinois and St. Louis, which is resulting in the consistent addition of full banking relationships with new commercial clients. Our loan and deposit pipelines remain healthy, which should lead to continued quality balance sheet growth that we expect to result in a higher level of net interest income, additional operating leverage, and further improvement in our level of profitability,” said Mr. Ludwig.

Adjusted Earnings

Financial results for the second quarter of 2021 were impacted by a $6.8 million tax benefit related to the settlement of a prior tax issue, $3.8 million of integration and acquisition expenses inclusive of the $3.6 million in professional fees related to the settlement, and a $3.7 million charge related to the prepayment of a longer-term FHLB advance. Excluding these amounts and certain other income and expense, adjusted earnings were $19.8 million, or $0.86 diluted earnings per share, for the second quarter of 2021.

Financial results for the third quarter of 2020 were impacted by $13.9 million in charges primarily related to the branch and facilities optimization plan (integration and acquisition expenses), $1.7 million in gains on sales of investment securities, and a $0.2 million loss on residential MSRs held-for-sale. Excluding these amounts and certain other income and expenses, adjusted earnings were $12.0 million, or $0.52 diluted earnings per share, for the third 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 third quarter of 2021 was 3.34%, compared to 3.29% for the second quarter of 2021. The Company’s net interest margin benefits from accretion income on purchased loan portfolios, which contributed 7 and 9 basis points to net interest margin in the third and second quarters of 2021, respectively. Excluding the impact of accretion income, net interest margin increased 7 basis points from the second quarter of 2021, due primarily to a reduction in the cost of funds.

Relative to the third quarter of 2020, net interest margin increased from 3.33%. Accretion income on purchased loan portfolios contributed 14 basis points to net interest margin in the third quarter of 2020. Excluding the impact of accretion income, net interest margin increased 8 basis points from the third quarter of 2020, primarily due to a reduction in the cost of funds.  

Net Interest Income

Net interest income for the third quarter of 2021 was $51.4 million, an increase of 2.6% from $50.1 million for the second quarter of 2021. Excluding accretion income, net interest income increased $1.6 million from the prior quarter, which was primarily due to a lower cost of funds. Accretion income associated with purchased loan portfolios totaled $1.0 million for the third quarter of 2021, compared with $1.3 million for the second quarter of 2021. PPP loan income totaled $2.4 million, including net loan origination fees of $2.1 million, in the third quarter of 2021, compared to $2.4 million, including net loan origination fees of $1.9 million, in the second quarter of 2021.

Relative to the third quarter of 2020, net interest income increased $1.4 million, or 2.8%. Accretion income for the third quarter of 2020 was $2.1 million. Excluding the impact of accretion income, net interest income increased primarily due to a higher average balance of interest-earning assets and a significant decline in the cost of funds.

Noninterest Income

Noninterest income for the third quarter of 2021 was $15.1 million, a decrease of 13.1% from $17.4 million for the second quarter of 2021. Impairment on commercial MSRs impacted noninterest income by $3.0 million and $1.1 million in the third quarter of 2021 and second quarter of 2021, respectively. Excluding the impairments, noninterest income decreased 2.1% primarily due to gains on the sale of other real estate owned that were recognized in the prior quarter.

Relative to the third quarter of 2020, noninterest income decreased 20.0% from $18.9 million. The decrease was primarily attributable to a larger impairment on commercial MSRs, lower residential mortgage banking revenue, and lower gains on sales of investment securities, partially offset by higher wealth management revenue.

Wealth management revenue for the third quarter of 2021 was $7.2 million, an increase of 9.9% from the second quarter of 2021, primarily due to the full quarter contribution of ATG Trust Company following its acquisition at the beginning of June. Compared to the third quarter of 2020, wealth management revenue increased 29.1%, 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 third quarter of 2021 was $41.3 million, compared with $48.9 million in the second quarter of 2021, which included $3.6 million in professional fees related to the settlement of the prior tax issue and $3.7 million in FHLB advance prepayment fees. Excluding the professional fees related to the settlement of the prior tax issue, FHLB advance prepayment fees, integration and acquisition expenses, and losses on residential MSRs held-for-sale, noninterest expense decreased by $0.3 million.

Relative to the third quarter of 2020, noninterest expense decreased 23.4% from $53.9 million, which included $13.9 million in charges primarily related to the branch and facilities optimization plan (integration and acquisition expenses), and a $0.2 million loss on residential MSRs held-for-sale. Excluding the integration and acquisition expenses and losses on residential MSRs held-for-sale, noninterest expense increased $1.2 million, primarily due to higher salaries and employee benefits expense.

Loan Portfolio

Total loans outstanding were $4.92 billion at September 30, 2021, compared with $4.84 billion at June 30, 2021 and $4.94 billion at September 30, 2020. The increase in total loans from June 30, 2021 was primarily attributable to higher balances of commercial, commercial real estate, and consumer loans, partially offset by forgiveness of PPP loans and runoff in the residential real estate portfolio resulting from refinancings.

Equipment finance balances increased $27.5 million from June 30, 2021 to $899.1 million at September 30, 2021, which are booked within the commercial loans and leases portfolio.  

Compared to loan balances at September 30, 2020, growth in equipment finance balances, commercial real estate, and consumer loans was offset by declines in residential real estate loans and PPP loans held in the commercial portfolio.

Deposits

Total deposits were $5.60 billion at September 30, 2021, compared with $5.20 billion at June 30, 2021, and $5.03 billion at September 30, 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 $54.6 million, or 1.11% of total loans, at September 30, 2021, compared with $61.4 million, or 1.27% of total loans, at June 30, 2021. The decrease in nonperforming loans was primarily attributable to the disposition of certain loans combined with minimal inflow during the third quarter of 2021. At September 30, 2020, nonperforming loans totaled $67.4 million, or 1.36% of total loans.

Net charge-offs for the third quarter of 2021 were $3.0 million, or 0.25% of average loans on an annualized basis, compared to net charge-offs of $4.0 million, or 0.33% of average loans on an annualized basis, for the second quarter of 2021 and $5.3 million, or 0.44% of average loans on an annualized basis, for the third quarter of 2020.  

The Company recorded a negative provision for credit losses of $0.2 million for the third quarter of 2021. No provision for credit losses on loans was recorded due to general improvement in asset quality and economic forecasts, while a negative provision of $0.2 million was recorded for credit losses on available-for-sale securities.  

The Company’s allowance for credit losses on loans was 1.13% of total loans and 101.9% of nonperforming loans at September 30, 2021, compared with 1.21% of total loans and 95.6% of nonperforming loans at June 30, 2021. Approximately 96% of the allowance for credit losses on loans at September 30, 2021 was allocated to general reserves.

Capital

At September 30, 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 Sep. 30, 2021		Consolidated Ratios as of Sep. 30, 2021		Minimum Regulatory Requirements (2)
Total capital to risk-weighted assets	12.03%		13.10%		10.50%
Tier 1 capital to risk-weighted assets	11.17%		9.73%		8.50%
Tier 1 leverage ratio	9.38%		8.16%		4.00%
Common equity Tier 1 capital	11.17%		8.55%		7.00%
Tangible common equity to tangible assets (1)	NA		6.80%		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 third quarter of 2021, the Company repurchased 210,177 shares of its common stock at a weighted average price of $24.93 under its stock repurchase program. On September 7, 2021, the Company announced that its Board of Directors approved modifications to the previously announced stock repurchase program, which increased the aggregate repurchase authority to $75 million from $50 million and extended the expiration date of the program to December 31, 2022. As of September 30, 2021, the Company had $24.9 million remaining under the current stock repurchase authorization.

Conference Call, Webcast and Slide Presentation

The Company will host a conference call and webcast at 7:30 a.m. Central Time on Friday, October 29, 2021, to discuss its financial results. The call can be accessed via telephone at (877) 516-3531; conference ID: 6697900. A recorded replay can be accessed through November 5, 2021, by dialing (855) 859-2056; conference ID: 6697900.

A slide presentation relating to the third 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 September 30, 2021, the Company had total assets of approximately $7.09 billion, and its Wealth Management Group had assets under administration of approximately $4.06 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
		September 30,					June 30,					March 31,				December 31,				September 30,
(dollars in thousands, except per share data)		2021					2021					2021				2020				2020
Earnings Summary
Net interest income		$	51,396				$	50,110				$	51,868			$	53,516			$	49,980
Provision for credit losses			(184	)				(455	)				3,565				10,058				11,728
Noninterest income			15,143					17,417					14,816				14,336				18,919
Noninterest expense			41,292					48,941					39,079				47,048				53,901
Income before income taxes			25,431					19,041					24,040				10,746				3,270
Income taxes			5,883					(1,083	)				5,502				2,413				3,184
Net income		$	19,548				$	20,124				$	18,538			$	8,333			$	86
Diluted earnings per common share		$	0.86				$	0.88				$	0.81			$	0.36			$	-
Weighted average shares outstanding - diluted			22,577,880					22,677,515					22,578,553				22,656,343				22,937,837
Return on average assets			1.15		%			1.20		%			1.11	%			0.49	%			0.01	%
Return on average shareholders' equity			11.90		%			12.59		%			12.04	%			5.32	%			0.05	%
Return on average tangible common equity (1)			16.76		%			17.85		%			17.28	%			7.68	%			0.08	%
Net interest margin			3.34		%			3.29		%			3.45	%			3.47	%			3.33	%
Efficiency ratio (1)			58.78		%			60.19		%			56.88	%			58.55	%			57.74	%
Adjusted Earnings Performance Summary (1)
Adjusted earnings		$	19,616				$	19,755				$	18,662			$	12,471			$	12,023
Adjusted diluted earnings per common share		$	0.86				$	0.86				$	0.82			$	0.54			$	0.52
Adjusted return on average assets			1.15		%			1.17		%			1.12	%			0.73	%			0.72	%
Adjusted return on average shareholders' equity			11.94		%			12.36		%			12.12	%			7.97	%			7.56	%
Adjusted return on average tangible common equity			16.82		%			17.52		%			17.39	%			11.50	%			11.04	%
Adjusted pre-tax, pre-provision earnings		$	28,379				$	26,967				$	29,051			$	28,855			$	28,751
Adjusted pre-tax, pre-provision return on average assets			1.67		%			1.60		%			1.75	%			1.69	%			1.72	%
(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
		September 30,					June 30,					March 31,					December 31,					September 30,
(in thousands, except per share data)		2021					2021					2021					2020					2020
Net interest income:
Interest income		$	58,490				$	58,397				$	60,503				$	62,712				$	60,314
Interest expense			7,094					8,287					8,635					9,196					10,334
Net interest income			51,396					50,110					51,868					53,516					49,980
Provision for credit losses:
Provision for credit losses on loans			-					-					3,950					10,000					10,970
Provision for credit losses on unfunded commitments			-					(265	)				(535	)				-					577
Provision for other credit losses			(184	)				(190	)				150					58					181
Total provision for credit losses			(184	)				(455	)				3,565					10,058					11,728
Net interest income after provision for credit losses			51,580					50,565					48,303					43,458					38,252
Noninterest income:
Wealth management revenue			7,175					6,529					5,931					5,868					5,559
Commercial FHA revenue			411					342					292					400					926
Residential mortgage banking revenue			1,287					1,562					1,574					2,285					3,049
Service charges on deposit accounts			2,268					1,916					1,826					2,149					2,092
Interchange revenue			3,651					3,797					3,375					3,137					3,283
Gain on sales of investment securities, net			160					377					-					-					1,721
Impairment on commercial mortgage servicing rights			(3,037	)				(1,148	)				(1,275	)				(2,344	)				(1,418	)
Company-owned life insurance			869					863					860					893					897
Other income			2,359					3,179					2,233					1,948					2,810
Total noninterest income			15,143					17,417					14,816					14,336					18,919
Noninterest expense:
Salaries and employee benefits			22,175					22,071					20,528					22,636					21,118
Occupancy and equipment			3,701					3,796					3,940					3,531					4,866
Data processing			6,495					6,288					5,993					5,987					5,721
Professional			1,738					5,549					2,185					1,912					1,861
Amortization of intangible assets			1,445					1,470					1,515					1,556					1,557
Loss on mortgage servicing rights held for sale			79					143					-					617					188
Impairment related to facilities optimization			-					-					-					(10	)				12,651
FHLB advances prepayment fees			-					3,669					8					4,872					-
Other expense			5,659					5,955					4,910					5,947					5,939
Total noninterest expense			41,292					48,941					39,079					47,048					53,901
Income before income taxes			25,431					19,041					24,040					10,746					3,270
Income taxes			5,883					(1,083	)				5,502					2,413					3,184
Net income		$	19,548				$	20,124				$	18,538				$	8,333				$	86
Basic earnings per common share		$	0.86				$	0.88				$	0.81				$	0.36				$	0.00
Diluted earnings per common share		$	0.86				$	0.88				$	0.81				$	0.36				$	0.00

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
		As of
		September 30,					June 30,					March 31,					December 31,					September 30,
(in thousands)		2021					2021					2021					2020					2020
Assets
Cash and cash equivalents		$	662,643				$	425,100				$	631,219				$	341,640				$	461,196
Investment securities			900,319					756,831					690,390					686,135					618,974
Loans			4,915,554					4,835,866					4,910,806					5,103,331					4,941,466
Allowance for credit losses on loans			(55,675	)				(58,664	)				(62,687	)				(60,443	)				(52,771	)
Total loans, net			4,859,879					4,777,202					4,848,119					5,042,888					4,888,695
Loans held for sale			26,621					12,187					55,174					138,090					62,500
Premises and equipment, net			71,241					71,803					73,255					74,124					74,967
Other real estate owned			11,931					12,768					20,304					20,247					15,961
Loan servicing rights, at lower of cost or fair value			30,916					34,577					36,876					39,276					42,465
Goodwill			161,904					161,904					161,904					161,904					161,904
Other intangible assets, net			26,065					27,900					26,867					28,382					29,938
Cash surrender value of life insurance policies			149,146					148,277					146,864					146,004					145,112
Other assets			193,294					201,461					193,814					189,850					198,333
Total assets		$	7,093,959				$	6,630,010				$	6,884,786				$	6,868,540				$	6,700,045
Liabilities and Shareholders' Equity
Noninterest-bearing deposits		$	1,672,901				$	1,366,453				$	1,522,433				$	1,469,579				$	1,355,188
Interest-bearing deposits			3,928,475					3,829,898					3,818,080					3,631,437					3,673,548
Total deposits			5,601,376					5,196,351					5,340,513					5,101,016					5,028,736
Short-term borrowings			66,666					75,985					71,728					68,957					58,625
FHLB advances and other borrowings			440,171					440,171					529,171					779,171					693,640
Subordinated debt			138,998					138,906					169,888					169,795					169,702
Trust preferred debentures			49,235					49,094					48,954					48,814					48,682
Other liabilities			139,669					81,317					89,065					79,396					78,780
Total liabilities			6,436,115					5,981,824					6,249,319					6,247,149					6,078,165
Total shareholders’ equity			657,844					648,186					635,467					621,391					621,880
Total liabilities and shareholders’ equity		$	7,093,959				$	6,630,010				$	6,884,786				$	6,868,540				$	6,700,045

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
		As of
		September 30,				June 30,				March 31,				December 31,				September 30,
(in thousands)		2021				2021				2021				2020				2020
Loan Portfolio
Commercial loans and leases		$	1,879,765			$	1,831,241			$	1,977,440			$	2,095,639			$	1,938,691
Commercial real estate			1,562,013				1,540,489				1,494,031				1,525,973				1,496,758
Construction and land development			200,792				212,508				191,870				172,737				177,894
Residential real estate			344,414				366,612				398,501				442,880				470,829
Consumer			928,570				885,016				848,964				866,102				857,294
Total loans		$	4,915,554			$	4,835,866			$	4,910,806			$	5,103,331			$	4,941,466
Deposit Portfolio
Noninterest-bearing demand		$	1,672,901			$	1,366,453			$	1,522,433			$	1,469,579			$	1,355,188
Interest-bearing:
Checking			1,697,326				1,619,436				1,601,449				1,568,888				1,581,216
Money market			852,836				787,688				819,455				785,871				826,454
Savings			665,710				669,277				653,256				597,966				580,748
Time			688,693				721,502				718,788				655,620				661,872
Brokered time			23,910				31,995				25,132				23,092				23,258
Total deposits		$	5,601,376			$	5,196,351			$	5,340,513			$	5,101,016			$	5,028,736

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
		For the Quarter Ended
		September 30,				June 30,				March 31,				December 31,				September 30,
(dollars in thousands)		2021				2021				2021				2020				2020
Average Balance Sheets
Cash and cash equivalents		$	525,848			$	509,886			$	350,061			$	415,686			$	491,728
Investment securities			773,372				734,462				680,202				672,937				628,705
Loans			4,800,063				4,826,234				4,992,802				4,998,912				4,803,940
Loans held for sale			15,204				36,299				65,365				45,196				44,880
Nonmarketable equity securities			43,873				49,388				55,935				51,906				50,765
Total interest-earning assets			6,158,360				6,156,269				6,144,365				6,184,637				6,020,018
Non-earning assets			597,153				589,336				602,017				602,716				625,522
Total assets		$	6,755,513			$	6,745,605			$	6,746,382			$	6,787,353			$	6,645,540
Interest-bearing deposits		$	3,895,970			$	3,815,179			$	3,757,108			$	3,680,645			$	3,656,833
Short-term borrowings			68,103				65,727				75,544				62,432				64,010
FHLB advances and other borrowings			440,171				519,490				617,504				682,981				693,721
Subordinated debt			138,954				165,155				169,844				169,751				169,657
Trust preferred debentures			49,167				49,026				48,887				48,751				48,618
Total interest-bearing liabilities			4,592,365				4,614,577				4,668,887				4,644,560				4,632,839
Noninterest-bearing deposits			1,434,193				1,411,428				1,370,604				1,446,359				1,303,963
Other noninterest-bearing liabilities			77,204				78,521				82,230				73,840				75,859
Shareholders' equity			651,751				641,079				624,661				622,594				632,879
Total liabilities and shareholders' equity		$	6,755,513			$	6,745,605			$	6,746,382			$	6,787,353			$	6,645,540
Yields
Earning Assets
Cash and cash equivalents			0.16	%			0.11	%			0.11	%			0.12	%			0.10	%
Investment securities			2.34	%			2.43	%			2.51	%			2.65	%			2.86	%
Loans			4.42	%			4.43	%			4.50	%			4.58	%			4.57	%
Loans held for sale			2.79	%			2.88	%			2.74	%			3.14	%			2.92	%
Nonmarketable equity securities			5.05	%			4.94	%			4.93	%			5.22	%			5.26	%
Total interest-earning assets			3.79	%			3.83	%			4.02	%			4.06	%			4.01	%
Interest-Bearing Liabilities
Interest-bearing deposits			0.26	%			0.31	%			0.34	%			0.36	%			0.46	%
Short-term borrowings			0.12	%			0.12	%			0.13	%			0.14	%			0.17	%
FHLB advances and other borrowings			1.80	%			1.91	%			1.69	%			1.71	%			1.85	%
Subordinated debt			5.79	%			5.61	%			5.57	%			5.60	%			5.58	%
Trust preferred debentures			3.92	%			4.00	%			4.08	%			4.03	%			4.16	%
Total interest-bearing liabilities			0.61	%			0.72	%			0.75	%			0.79	%			0.89	%
Cost of Deposits			0.19	%			0.23	%			0.25	%			0.26	%			0.34	%
Net Interest Margin			3.34	%			3.29	%			3.45	%			3.47	%			3.33	%

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
		As of and for the Quarter Ended
		September 30,				June 30,				March 31,				December 31,				September 30,
(dollars in thousands, except per share data)		2021				2021				2021				2020				2020
Asset Quality
Loans 30-89 days past due		$	16,772			$	20,224			$	24,819			$	31,460			$	28,188
Nonperforming loans			54,620				61,363				52,826				54,070				67,443
Nonperforming assets			69,261				76,926				75,004				75,432				84,795
Net charge-offs			2,989				4,023				1,706				2,328				5,292
Loans 30-89 days past due to total loans			0.34	%			0.42	%			0.51	%			0.62	%			0.57	%
Nonperforming loans to total loans			1.11	%			1.27	%			1.08	%			1.06	%			1.36	%
Nonperforming assets to total assets			0.98	%			1.16	%			1.09	%			1.10	%			1.27	%
Allowance for credit losses to total loans			1.13	%			1.21	%			1.28	%			1.18	%			1.07	%
Allowance for credit losses to nonperforming loans			101.93	%			95.60	%			118.67	%			111.79	%			78.25	%
Net charge-offs to average loans			0.25	%			0.33	%			0.14	%			0.19	%			0.44	%
Wealth Management
Trust assets under administration		$	4,058,168			$	4,077,581			$	3,560,427			$	3,480,759			$	3,260,893
Market Data
Book value per share at period end		$	29.64			$	28.96			$	28.43			$	27.83			$	27.51
Tangible book value per share at period end (1)		$	21.17			$	20.48			$	19.98			$	19.31			$	19.03
Market price at period end		$	24.73			$	26.27			$	27.74			$	17.87			$	12.85
Shares outstanding at period end			22,193,141				22,380,492				22,351,740				22,325,471				22,602,844
Capital
Total capital to risk-weighted assets			13.10	%			13.11	%			13.73	%			13.24	%			13.34	%
Tier 1 capital to risk-weighted assets			9.73	%			9.64	%			9.62	%			9.20	%			9.40	%
Tier 1 common capital to risk-weighted assets			8.55	%			8.44	%			8.39	%			7.99	%			8.18	%
Tier 1 leverage ratio			8.16	%			8.00	%			7.79	%			7.50	%			7.72	%
Tangible common equity to tangible assets (1)			6.80	%			7.12	%			6.67	%			6.46	%			6.61	%
(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
		September 30,					June 30,					March 31,				December 31,					September 30,
(dollars in thousands, except per share data)		2021					2021					2021				2020					2020
Income before income taxes - GAAP		$	25,431				$	19,041				$	24,040			$	10,746				$	3,270
Adjustments to noninterest income:
Gain on sales of investment securities, net			160					377					-				-					1,721
Other income			-					(27	)				75				3					(17	)
Total adjustments to noninterest income			160					350					75				3					1,704
Adjustments to noninterest expense:
Loss on mortgage servicing rights held for sale			79					143					-				617					188
Impairment related to facilities optimization			-					-					-				(10	)				12,651
FHLB advances prepayment fees			-					3,669					8				4,872					-
Integration and acquisition expenses			176					3,771					238				231					1,200
Total adjustments to noninterest expense			255					7,583					246				5,710					14,039
Adjusted earnings pre tax			25,526					26,274					24,211				16,453					15,605
Adjusted earnings tax			5,910					6,519					5,549				3,982					3,582
Adjusted earnings - non-GAAP		$	19,616				$	19,755				$	18,662			$	12,471				$	12,023
Adjusted diluted earnings per common share		$	0.86				$	0.86				$	0.82			$	0.54				$	0.52
Adjusted return on average assets			1.15		%			1.17		%			1.12	%			0.73		%			0.72		%
Adjusted return on average shareholders' equity			11.94		%			12.36		%			12.12	%			7.97		%			7.56		%
Adjusted return on average tangible common equity			16.82		%			17.52		%			17.39	%			11.50		%			11.04		%
Adjusted Pre-Tax, Pre-Provision Earnings Reconciliation
		For the Quarter Ended
		September 30,					June 30,					March 31,				December 31,					September 30,
(dollars in thousands)		2021					2021					2021				2020					2020
Adjusted earnings pre tax - non- GAAP		$	25,526				$	26,274				$	24,211			$	16,453				$	15,605
Provision for credit losses			(184	)				(455	)				3,565				10,058					11,728
Impairment on commercial mortgage servicing rights			3,037					1,148					1,275				2,344					1,418
Adjusted pre-tax, pre-provision earnings - non-GAAP		$	28,379				$	26,967				$	29,051			$	28,855				$	28,751
Adjusted pre-tax, pre-provision return on average assets			1.67		%			1.60		%			1.75	%			1.69		%			1.72		%

MIDLAND STATES BANCORP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued)
Efficiency Ratio Reconciliation
		For the Quarter Ended
		September 30,					June 30,					March 31,					December 31,					September 30,
(dollars in thousands)		2021					2021					2021					2020					2020
Noninterest expense - GAAP		$	41,292				$	48,941				$	39,079				$	47,048				$	53,901
Loss on mortgage servicing rights held for sale			(79	)				(143	)				-					(617	)				(188	)
Impairment related to facilities optimization			-					-					-					10					(12,651	)
FHLB advances prepayment fees			-					(3,669	)				(8	)				(4,872	)				-
Integration and acquisition expenses			(176	)				(3,771	)				(238	)				(231	)				(1,200	)
Adjusted noninterest expense		$	41,037				$	41,358				$	38,833				$	41,338				$	39,862
Net interest income - GAAP		$	51,396				$	50,110				$	51,868				$	53,516				$	49,980
Effect of tax-exempt income			402					383					386					413					430
Adjusted net interest income			51,798					50,493					52,254					53,929					50,410
Noninterest income - GAAP			15,143					17,417					14,816					14,336					18,919
Impairment on commercial mortgage servicing rights			3,037					1,148					1,275					2,344					1,418
Gain on sales of investment securities, net			(160	)				(377	)				-					-					(1,721	)
Other			-					27					(75	)				(3	)				17
Adjusted noninterest income			18,020					18,215					16,016					16,677					18,633
Adjusted total revenue		$	69,818				$	68,709				$	68,270				$	70,607				$	69,043
Efficiency ratio			58.78		%			60.19		%			56.88		%			58.55		%			57.74		%

MIDLAND STATES BANCORP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued)
Tangible Common Equity to Tangible Assets Ratio and Tangible Book Value Per Share
		As of
		September 30,					June 30,					March 31,					December 31,					September 30,
(dollars in thousands, except per share data)		2021					2021					2021					2020					2020
Shareholders' Equity to Tangible Common Equity
Total shareholders' equity—GAAP		$	657,844				$	648,186				$	635,467				$	621,391				$	621,880
Adjustments:
Goodwill			(161,904	)				(161,904	)				(161,904	)				(161,904	)				(161,904	)
Other intangible assets, net			(26,065	)				(27,900	)				(26,867	)				(28,382	)				(29,938	)
Tangible common equity		$	469,875				$	458,382				$	446,696				$	431,105				$	430,038
Total Assets to Tangible Assets:
Total assets—GAAP		$	7,093,959				$	6,630,010				$	6,884,786				$	6,868,540				$	6,700,045
Adjustments:
Goodwill			(161,904	)				(161,904	)				(161,904	)				(161,904	)				(161,904	)
Other intangible assets, net			(26,065	)				(27,900	)				(26,867	)				(28,382	)				(29,938	)
Tangible assets		$	6,905,990				$	6,440,206				$	6,696,015				$	6,678,254				$	6,508,203
Common Shares Outstanding			22,193,141					22,380,492					22,351,740					22,325,471					22,602,844
Tangible Common Equity to Tangible Assets			6.80		%			7.12		%			6.67		%			6.46		%			6.61		%
Tangible Book Value Per Share		$	21.17				$	20.48				$	19.98				$	19.31				$	19.03
Return on Average Tangible Common Equity (ROATCE)
		For the Quarter Ended
		September 30,					June 30,					March 31,					December 31,					September 30,
(dollars in thousands)		2021					2021					2021					2020					2020
Net income available to common shareholders		$	19,548				$	20,124				$	18,538				$	8,333				$	86
Average total shareholders' equity—GAAP		$	651,751				$	641,079				$	624,661				$	622,594				$	632,879
Adjustments:
Goodwill			(161,904	)				(161,904	)				(161,904	)				(161,904	)				(168,771	)
Other intangible assets, net			(27,132	)				(26,931	)				(27,578	)				(29,123	)				(30,690	)
Average tangible common equity		$	462,715				$	452,244				$	435,179				$	431,567				$	433,418
ROATCE			16.76		%			17.85		%			17.28		%			7.68		%			0.08		%

FAQ

What is Midland States Bancorp's (MSBI) net income for Q3 2021?

Midland States Bancorp reported a net income of $19.5 million for Q3 2021.

How much did total loans increase for MSBI in Q3 2021?

Total loans increased by 8.2% annualized in Q3 2021.

What is the current non-performing loans percentage for MSBI?

Non-performing loans totaled 1.11% of total loans as of September 30, 2021.

What is MSBI's net interest margin for Q3 2021?

The net interest margin for MSBI increased to 3.34% in Q3 2021.

How much has MSBI's wealth management revenue grown year-over-year?

Wealth management revenue grew by 29.1% year-over-year in Q3 2021.