Midland States Bancorp, Inc. Announces 2023 First Quarter Results
First Quarter 2023 Highlights:
- Net income available to common shareholders of
$19.5 million , or$0.86 per diluted share - Total loan growth of
$47.8 million , or3.0% annualized from prior quarter - Total deposits increased
$60.5 million , or3.8% annualized from prior quarter, with uninsured deposits of21% - Tangible book value per share of
$21.87 , an increase of4.4% from prior quarter
EFFINGHAM, Ill., April 27, 2023 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (Nasdaq: MSBI) (the “Company”) today reported net income available to common shareholders of
Jeffrey G. Ludwig, President and Chief Executive Officer of the Company, said, “The strength of the franchise we have built has enabled us to effectively manage through the recent troubles in the banking industry and continue delivering strong financial performance. Due to the strong relationships we have with our clients, our deposit base has been exceptionally stable, and we have not needed to take any extraordinary measures to prevent deposit outflows or increase our level of liquidity beyond the usual prudent level that we maintain.
“While becoming more selective in our new loan production given the uncertain economic conditions, we still grew our total loans at a
“We will continue to prioritize prudent risk management and be conservative in our new loan production to build capital and liquidity. We expect to see continued reductions in our consumer portfolio that will be used to add to our security portfolio and pay off higher cost funding sources, with the net impact likely being earnings neutral, but capital accretive. We have a strong balance sheet with healthy asset quality, and we believe we can capitalize on the current environment to add new commercial and retail deposit relationships. Our focus on continuing to grow and strengthen our core deposit base will help us to generate long-term profitable growth and continue enhancing the value of our franchise,” said Mr. Ludwig.
Balance Sheet Highlights
Total assets were
Loans
| As of | |||||||||
| March 31, | December 31, | March 31, | |||||||
| (in thousands) | 2023 | 2022 | 2022 | ||||||
| Loan Portfolio | |||||||||
| Commercial loans | $ | 937,920 | $ | 872,794 | $ | 825,554 | |||
| Equipment finance loans | 632,205 | 616,751 | 528,572 | ||||||
| Equipment finance leases | 510,029 | 491,744 | 429,000 | ||||||
| Commercial FHA warehouse lines | 10,275 | 25,029 | 83,999 | ||||||
| Total commercial loans and leases | 2,090,429 | 2,006,318 | 1,867,125 | ||||||
| Commercial real estate | 2,448,158 | 2,433,159 | 2,114,041 | ||||||
| Construction and land development | 326,836 | 320,882 | 188,668 | ||||||
| Residential real estate | 369,910 | 366,094 | 329,331 | ||||||
| Consumer | 1,118,938 | 1,180,014 | 1,040,796 | ||||||
| Total loans | $ | 6,354,271 | $ | 6,306,467 | $ | 5,539,961 | |||
Loan Quality
Credit quality remained steady during the first quarter of 2023. Loans 30-89 days past due totaled
| As of and for the Quarter Ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| (dollars in thousands, except per share data) | 2023 | 2022 | 2022 | |||||||||
| Asset Quality | ||||||||||||
| Loans 30-89 days past due | $ | 30,895 | $ | 32,372 | $ | 29,044 | ||||||
| Nonperforming loans | 50,713 | 49,423 | 52,900 | |||||||||
| Nonperforming assets | 58,806 | 57,824 | 66,164 | |||||||||
| Substandard loans | 99,819 | 101,044 | 120,837 | |||||||||
| Net charge-offs | 2,119 | 538 | 2,256 | |||||||||
| Loans 30-89 days past due to total loans | 0.49 | % | 0.51 | % | 0.52 | % | ||||||
| Nonperforming loans to total loans | 0.80 | % | 0.78 | % | 0.95 | % | ||||||
| Nonperforming assets to total assets | 0.74 | % | 0.74 | % | 0.90 | % | ||||||
| Allowance for credit losses to total loans | 0.98 | % | 0.97 | % | 0.96 | % | ||||||
| Allowance for credit losses to nonperforming loans | 122.39 | % | 123.53 | % | 100.07 | % | ||||||
| Net charge-offs to average loans | 0.14 | % | 0.03 | % | 0.17 | % | ||||||
The Company’s allowance for credit losses totaled
Deposits
Total deposits were
| As of | |||||||||
| March 31, | December 31, | March 31, | |||||||
| (in thousands) | 2023 | 2022 | 2022 | ||||||
| Deposit Portfolio | |||||||||
| Noninterest-bearing demand | $ | 1,215,758 | $ | 1,362,158 | $ | 1,393,825 | |||
| Interest-bearing: | |||||||||
| Checking | 2,502,827 | 2,494,073 | 2,350,225 | ||||||
| Money market | 1,263,813 | 1,184,101 | 964,352 | ||||||
| Savings | 636,832 | 661,932 | 710,955 | ||||||
| Time | 766,884 | 649,552 | 619,386 | ||||||
| Brokered time | 39,087 | 12,836 | 18,796 | ||||||
| Total deposits | $ | 6,425,201 | $ | 6,364,652 | $ | 6,057,539 | |||
The Company estimates that uninsured deposits(1) totaled
(1) Uninsured deposits include the Call Report estimate of uninsured deposits less affiliate deposits, estimated insured portion of servicing deposits, additional structured FDIC coverage and collateralized deposits.
Results of Operations Highlights
During the first quarter of 2023, net interest income, on a tax-equivalent basis, totaled
Net Interest Income and Margin
The tax equivalent net interest margin for the first quarter of 2023 was
| For the Quarter Ended | |||||||||||||||||||||||||||
| March 31, | December 31, | March 31, | |||||||||||||||||||||||||
| (dollars in thousands) | 2023 | 2022 | 2022 | ||||||||||||||||||||||||
| Interest-earning assets | Average Balance | Interest & Fees | Yield/Rate | Average Balance | Interest & Fees | Yield/Rate | Average Balance | Interest & Fees | Yield/Rate | ||||||||||||||||||
| Cash and cash equivalents | $ | 85,123 | $ | 980 | 4.67 | % | $ | 220,938 | $ | 2,143 | 3.85 | % | $ | 384,231 | $ | 171 | 0.18 | % | |||||||||
| Investment securities | 809,848 | 5,995 | 3.00 | % | 736,579 | 4,824 | 2.62 | % | 894,634 | 4,962 | 2.22 | % | |||||||||||||||
| Loans | 6,320,402 | 87,997 | 5.65 | % | 6,240,277 | 82,810 | 5.26 | % | 5,274,051 | 57,280 | 4.40 | % | |||||||||||||||
| Loans held for sale | 1,506 | 16 | 4.41 | % | 3,883 | 47 | 4.86 | % | 31,256 | 220 | 2.86 | % | |||||||||||||||
| Nonmarketable equity securities | 47,819 | 795 | 6.75 | % | 43,618 | 677 | 6.16 | % | 36,378 | 484 | 5.40 | % | |||||||||||||||
| Total interest-earning assets | $ | 7,264,698 | $ | 95,783 | 5.35 | % | $ | 7,245,295 | $ | 90,501 | 4.96 | % | $ | 6,620,550 | $ | 63,117 | 3.87 | % | |||||||||
| Interest-Bearing Liabilities | |||||||||||||||||||||||||||
| Interest-bearing deposits | $ | 5,053,941 | $ | 26,405 | 2.12 | % | $ | 5,053,158 | $ | 19,841 | 1.56 | % | $ | 4,507,642 | $ | 2,161 | 0.19 | % | |||||||||
| Short-term borrowings | 38,655 | 25 | 0.26 | % | 47,391 | 31 | 0.26 | % | 70,043 | 23 | 0.14 | % | |||||||||||||||
| FHLB advances & other borrowings | 540,278 | 6,006 | 4.51 | % | 460,598 | 4,264 | 3.67 | % | 311,282 | 1,212 | 1.58 | % | |||||||||||||||
| Subordinated debt | 99,812 | 1,370 | 5.57 | % | 107,374 | 1,463 | 5.45 | % | 139,139 | 2,011 | 5.78 | % | |||||||||||||||
| Trust preferred debentures | 50,047 | 1,229 | 9.96 | % | 49,902 | 1,066 | 8.47 | % | 49,451 | 514 | 4.21 | % | |||||||||||||||
| Total interest-bearing liabilities | $ | 5,782,733 | $ | 35,035 | 2.46 | % | $ | 5,718,423 | $ | 26,665 | 1.85 | % | $ | 5,077,557 | $ | 5,921 | 0.47 | % | |||||||||
| Net Interest Margin | $ | 60,748 | 3.39 | % | $ | 63,836 | 3.50 | % | $ | 57,196 | 3.50 | % | |||||||||||||||
| Cost of Deposits | 1.70 | % | 1.23 | % | 0.15 | % | |||||||||||||||||||||
Average interest-earning assets for the first quarter of 2023 were
Average investment securities for the first quarter of 2023 were
Average interest-bearing deposits were
Noninterest Income
Noninterest income was
| For the Quarter Ended | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
| (in thousands) | 2023 | 2022 | 2022 | ||||||||
| Noninterest income | |||||||||||
| Wealth management revenue | $ | 6,411 | $ | 6,227 | $ | 7,139 | |||||
| Residential mortgage banking revenue | 405 | 316 | 599 | ||||||||
| Service charges on deposit accounts | 2,568 | 2,511 | 2,068 | ||||||||
| Interchange revenue | 3,412 | 3,478 | 3,280 | ||||||||
| Loss on sales of investment securities, net | (648 | ) | — | — | |||||||
| Gain on termination of hedged interest rate swaps | — | 17,531 | — | ||||||||
| Impairment on commercial mortgage servicing rights | — | — | (394 | ) | |||||||
| Company-owned life insurance | 876 | 796 | 1,019 | ||||||||
| Other income | 2,755 | 2,980 | 1,902 | ||||||||
| Total noninterest income | $ | 15,779 | $ | 33,839 | $ | 15,613 | |||||
Noninterest Expense
Noninterest expense was
| For the Quarter Ended | |||||||||
| March 31, | December 31, | March 31, | |||||||
| (in thousands) | 2023 | 2022 | 2022 | ||||||
| Noninterest expense | |||||||||
| Salaries and employee benefits | $ | 24,243 | $ | 22,901 | $ | 21,870 | |||
| Occupancy and equipment | 4,443 | 3,748 | 3,755 | ||||||
| Data processing | 6,311 | 6,302 | 5,873 | ||||||
| Professional | 1,760 | 1,726 | 1,972 | ||||||
| Amortization of intangible assets | 1,291 | 1,333 | 1,398 | ||||||
| Other real estate owned | — | 3,779 | — | ||||||
| Loss on mortgage servicing rights held for sale | — | 3,250 | — | ||||||
| FDIC insurance | 1,329 | 703 | 830 | ||||||
| Other expense | 5,105 | 6,201 | 5,186 | ||||||
| Total noninterest expense | $ | 44,482 | $ | 49,943 | $ | 40,884 | |||
Noteworthy components of noninterest expense are as follows:
- Salaries and employee benefits expenses were
$24.2 million in the first quarter of 2023, compared to$22.9 million in the fourth quarter of 2022, and$21.9 million in the first quarter of 2022. Employees numbered 931 at March 31, 2023, compared to 935 at December 31, 2022, and 920 at March 31, 2022. Increased payroll taxes and medical insurance of$0.6 million and$0.5 million , respectively, contributed to increased expense in the first quarter of 2023 compared to the fourth quarter of 2022. Annual salary increases and the modest increase in staffing levels contributed to increased salaries and benefits expenses from the first quarter of 2022, along with a$0.7 million increase in medical insurance. - Occupancy and equipment increased
$0.7 million in the first quarter of 2023 compared to the fourth quarter of 2022, primarily due to seasonal related expenses, including snow removal and utilities expenses. - FDIC insurance expense was
$1.3 million in the first quarter of 2023, compared to$0.7 million in the fourth quarter of 2022, and$0.8 million in the first quarter of 2022. The increase is primarily related to the FDIC’s 2 basis point increase to the initial base deposit insurance assessment rate schedules effective January 1, 2023.
Income Tax Expense
Income tax expense was
Capital
At March 31, 2023, Midland States Bank and the Company exceeded all regulatory capital requirements under Basel III, and Midland States Bank met the qualifications to be a ‘‘well-capitalized’’ financial institution, as summarized in the following table:
| As of March 31, 2023 | |||||
| Midland States Bank | Midland States Bancorp, Inc. | Minimum Regulatory Requirements (2) | |||
| Total capital to risk-weighted assets | |||||
| Tier 1 capital to risk-weighted assets | |||||
| Tier 1 leverage ratio | |||||
| Common equity Tier 1 capital | |||||
| Tangible common equity to tangible assets (1) | N/A | N/A | |||
(1) A non-GAAP financial measure. Refer to page 13 for a reconciliation to the comparable GAAP financial measure.
(2) Includes the capital conservation buffer of
Since the beginning of 2022, the impact of rising interest rates on the Company’s investment portfolio has resulted in an
Stock Repurchase Program
On December 6, 2022, the Company’s board of directors authorized a new share repurchase program, pursuant to which the Company is authorized to repurchase up to
About Midland States Bancorp, Inc.
Midland States Bancorp, Inc. is a community-based financial holding company headquartered in Effingham, Illinois, and is the sole shareholder of Midland States Bank. As of March 31, 2023, the Company had total assets of approximately
Non-GAAP Financial Measures
Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with GAAP.
These non-GAAP financial measures include “Adjusted Earnings,” “Adjusted Earnings Available to Common Shareholders,” “Adjusted Diluted Earnings Per Common Share,” “Adjusted Return on Average Assets,” “Adjusted Return on Average Shareholders’ Equity,” “Adjusted Return on Average Tangible Common Equity,” “Adjusted Pre-Tax, Pre-Provision Earnings,” “Adjusted Pre-Tax, Pre-Provision Return on Average Assets,” “Efficiency Ratio,” “Tangible Common Equity to Tangible Assets,” “Tangible Book Value Per Share,” “Tangible Book Value Per Share excluding Accumulated Other Comprehensive Income,” and “Return on Average Tangible Common Equity.” The Company believes these non-GAAP financial measures provide both management and investors a more complete understanding of the Company’s funding profile and profitability. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures. Not all companies use the same calculation of these measures; therefore, 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, the impact of inflation, continuing effects of the recent failures of Silicon Valley Bank and Signature Bank, including anticipated effects on FDIC premiums, increased deposit volatility and potential regulatory developments; 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) | ||||||||||||
| As of and for the Quarter Ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| (dollars in thousands, except per share data) | 2023 | 2022 | 2022 | |||||||||
| Earnings Summary | ||||||||||||
| Net interest income | $ | 60,504 | $ | 63,550 | $ | 56,827 | ||||||
| Provision for credit losses | 3,135 | 3,544 | 4,167 | |||||||||
| Noninterest income | 15,779 | 33,839 | 15,613 | |||||||||
| Noninterest expense | 44,482 | 49,943 | 40,884 | |||||||||
| Income before income taxes | 28,666 | 43,902 | 27,389 | |||||||||
| Income taxes | 6,894 | 11,030 | 6,640 | |||||||||
| Net income | 21,772 | 32,872 | 20,749 | |||||||||
| Preferred dividends | 2,228 | 3,169 | — | |||||||||
| Net income available to common shareholders | $ | 19,544 | $ | 29,703 | $ | 20,749 | ||||||
| Diluted earnings per common share | $ | 0.86 | $ | 1.30 | $ | 0.92 | ||||||
| Weighted average common shares outstanding - diluted | 22,501,970 | 22,503,611 | 22,350,307 | |||||||||
| Return on average assets | 1.12 | % | 1.66 | % | 1.16 | % | ||||||
| Return on average shareholders' equity | 11.51 | % | 17.41 | % | 12.80 | % | ||||||
| Return on average tangible common equity (1) | 16.70 | % | 25.89 | % | 17.84 | % | ||||||
| Net interest margin | 3.39 | % | 3.50 | % | 3.50 | % | ||||||
| Efficiency ratio (1) | 57.64 | % | 58.26 | % | 55.73 | % | ||||||
| Adjusted Earnings Performance Summary (1) | ||||||||||||
| Adjusted earnings available to common shareholders | $ | 20,017 | $ | 19,278 | $ | 20,815 | ||||||
| Adjusted diluted earnings per common share | $ | 0.88 | $ | 0.85 | $ | 0.92 | ||||||
| Adjusted return on average assets | 1.15 | % | 1.13 | % | 1.16 | % | ||||||
| Adjusted return on average shareholders' equity | 11.76 | % | 11.89 | % | 12.84 | % | ||||||
| Adjusted return on average tangible common equity | 17.11 | % | 16.80 | % | 17.89 | % | ||||||
| Adjusted pre-tax, pre-provision earnings | $ | 32,449 | $ | 33,165 | $ | 32,041 | ||||||
| Adjusted pre-tax, pre-provision return on average assets | 1.67 | % | 1.68 | % | 1.79 | % | ||||||
| Wealth Management | ||||||||||||
| Trust assets under administration | $ | 3,502,635 | $ | 3,505,372 | $ | 3,934,140 | ||||||
| Market Data | ||||||||||||
| Book value per share at period end | $ | 30.08 | $ | 29.17 | $ | 29.26 | ||||||
| Tangible book value per share at period end (1) | $ | 21.87 | $ | 20.94 | $ | 20.87 | ||||||
| Tangible book value per share excluding accumulated other comprehensive income at period end (1) | $ | 25.39 | $ | 24.72 | $ | 22.14 | ||||||
| Market price at period end | $ | 21.42 | $ | 26.62 | $ | 28.86 | ||||||
| Common shares outstanding at period end | 22,111,454 | 22,214,913 | 22,044,626 | |||||||||
| Capital | ||||||||||||
| Total capital to risk-weighted assets | 12.46 | % | 12.38 | % | 11.74 | % | ||||||
| Tier 1 capital to risk-weighted assets | 10.25 | % | 10.21 | % | 8.82 | % | ||||||
| Tier 1 common capital to risk-weighted assets | 7.84 | % | 7.77 | % | 7.80 | % | ||||||
| Tier 1 leverage ratio | 9.54 | % | 9.43 | % | 7.96 | % | ||||||
| Tangible common equity to tangible assets (1) | 6.24 | % | 6.06 | % | 6.43 | % | ||||||
(1) Non-GAAP financial measures. Refer to pages 11 - 13 for a reconciliation to the comparable GAAP financial measures.
| MIDLAND STATES BANCORP, INC. | ||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) | ||||||||||||
| As of | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| (in thousands) | 2023 | 2022 | 2022 | |||||||||
| Assets | ||||||||||||
| Cash and cash equivalents | $ | 138,310 | $ | 160,631 | $ | 332,264 | ||||||
| Investment securities | 821,005 | 776,860 | 858,246 | |||||||||
| Loans | 6,354,271 | 6,306,467 | 5,539,961 | |||||||||
| Allowance for credit losses on loans | (62,067 | ) | (61,051 | ) | (52,938 | ) | ||||||
| Total loans, net | 6,292,204 | 6,245,416 | 5,487,023 | |||||||||
| Loans held for sale | 2,747 | 1,286 | 8,931 | |||||||||
| Premises and equipment, net | 80,582 | 78,293 | 77,857 | |||||||||
| Other real estate owned | 6,729 | 6,729 | 11,537 | |||||||||
| Loan servicing rights, at lower of cost or fair value | 1,117 | 1,205 | 27,484 | |||||||||
| Commercial FHA mortgage loan servicing rights held for sale | 20,745 | 20,745 | — | |||||||||
| Goodwill | 161,904 | 161,904 | 161,904 | |||||||||
| Other intangible assets, net | 19,575 | 20,866 | 22,976 | |||||||||
| Company-owned life insurance | 151,319 | 150,443 | 148,060 | |||||||||
| Other assets | 233,937 | 231,123 | 202,433 | |||||||||
| Total assets | $ | 7,930,174 | $ | 7,855,501 | $ | 7,338,715 | ||||||
| Liabilities and Shareholders' Equity | ||||||||||||
| Noninterest-bearing demand deposits | $ | 1,215,758 | $ | 1,362,158 | $ | 1,393,825 | ||||||
| Interest-bearing deposits | 5,209,443 | 5,002,494 | 4,663,714 | |||||||||
| Total deposits | 6,425,201 | 6,364,652 | 6,057,539 | |||||||||
| Short-term borrowings | 31,173 | 42,311 | 60,352 | |||||||||
| FHLB advances and other borrowings | 482,000 | 460,000 | 310,171 | |||||||||
| Subordinated debt | 99,849 | 99,772 | 139,184 | |||||||||
| Trust preferred debentures | 50,135 | 49,975 | 49,524 | |||||||||
| Other liabilities | 66,173 | 80,217 | 76,959 | |||||||||
| Total liabilities | 7,154,531 | 7,096,927 | 6,693,729 | |||||||||
| Total shareholders’ equity | 775,643 | 758,574 | 644,986 | |||||||||
| Total liabilities and shareholders’ equity | $ | 7,930,174 | $ | 7,855,501 | $ | 7,338,715 | ||||||
| MIDLAND STATES BANCORP, INC. | |||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) | |||||||||||
| For the Quarter Ended | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
| (in thousands, except per share data) | 2023 | 2022 | 2022 | ||||||||
| Net interest income: | |||||||||||
| Interest income | $ | 95,539 | $ | 90,215 | $ | 62,748 | |||||
| Interest expense | 35,035 | 26,665 | 5,921 | ||||||||
| Net interest income | 60,504 | 63,550 | 56,827 | ||||||||
| Provision for credit losses: | |||||||||||
| Provision for credit losses on loans | 3,135 | 2,950 | 4,132 | ||||||||
| Provision for credit losses on unfunded commitments | — | 594 | 256 | ||||||||
| Provision for other credit losses | — | — | (221 | ) | |||||||
| Total provision for credit losses | 3,135 | 3,544 | 4,167 | ||||||||
| Net interest income after provision for credit losses | 57,369 | 60,006 | 52,660 | ||||||||
| Noninterest income: | |||||||||||
| Wealth management revenue | 6,411 | 6,227 | 7,139 | ||||||||
| Residential mortgage banking revenue | 405 | 316 | 599 | ||||||||
| Service charges on deposit accounts | 2,568 | 2,511 | 2,068 | ||||||||
| Interchange revenue | 3,412 | 3,478 | 3,280 | ||||||||
| Loss on sales of investment securities, net | (648 | ) | — | — | |||||||
| Gain on termination of hedged interest rate swaps | — | 17,531 | — | ||||||||
| Impairment on commercial mortgage servicing rights | — | — | (394 | ) | |||||||
| Company-owned life insurance | 876 | 796 | 1,019 | ||||||||
| Other income | 2,755 | 2,980 | 1,902 | ||||||||
| Total noninterest income | 15,779 | 33,839 | 15,613 | ||||||||
| Noninterest expense: | |||||||||||
| Salaries and employee benefits | 24,243 | 22,901 | 21,870 | ||||||||
| Occupancy and equipment | 4,443 | 3,748 | 3,755 | ||||||||
| Data processing | 6,311 | 6,302 | 5,873 | ||||||||
| Professional | 1,760 | 1,726 | 1,972 | ||||||||
| Amortization of intangible assets | 1,291 | 1,333 | 1,398 | ||||||||
| Other real estate owned | — | 3,779 | — | ||||||||
| Loss on mortgage servicing rights held for sale | — | 3,250 | — | ||||||||
| FDIC insurance | 1,329 | 703 | 830 | ||||||||
| Other expense | 5,105 | 6,201 | 5,186 | ||||||||
| Total noninterest expense | 44,482 | 49,943 | 40,884 | ||||||||
| Income before income taxes | 28,666 | 43,902 | 27,389 | ||||||||
| Income taxes | 6,894 | 11,030 | 6,640 | ||||||||
| Net income | 21,772 | 32,872 | 20,749 | ||||||||
| Preferred stock dividends | 2,228 | 3,169 | — | ||||||||
| Net income available to common shareholders | $ | 19,544 | $ | 29,703 | $ | 20,749 | |||||
| Basic earnings per common share | $ | 0.86 | $ | 1.31 | $ | 0.92 | |||||
| Diluted earnings per common share | $ | 0.86 | $ | 1.30 | $ | 0.92 | |||||
| MIDLAND STATES BANCORP, INC. | ||||||||||||
| RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) | ||||||||||||
| Adjusted Earnings Reconciliation | ||||||||||||
| For the Quarter Ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| (dollars in thousands, except per share data) | 2023 | 2022 | 2022 | |||||||||
| Income before income taxes - GAAP | $ | 28,666 | $ | 43,902 | $ | 27,389 | ||||||
| Adjustments to noninterest income: | ||||||||||||
| Loss on sales of investment securities, net | 648 | — | — | |||||||||
| (Gain) on termination of hedged interest rate swaps | — | (17,531 | ) | — | ||||||||
| Total adjustments to noninterest income | 648 | (17,531 | ) | — | ||||||||
| Adjustments to noninterest expense: | ||||||||||||
| (Loss) on mortgage servicing rights held for sale | — | (3,250 | ) | — | ||||||||
| Integration and acquisition expenses | — | — | (91 | ) | ||||||||
| Total adjustments to noninterest expense | — | (3,250 | ) | (91 | ) | |||||||
| Adjusted earnings pre tax | 29,314 | 29,621 | 27,480 | |||||||||
| Adjusted earnings tax | 7,069 | 7,174 | 6,665 | |||||||||
| Adjusted earnings - non-GAAP | 22,245 | 22,447 | 20,815 | |||||||||
| Preferred stock dividends | 2,228 | 3,169 | — | |||||||||
| Adjusted earnings available to common shareholders | $ | 20,017 | $ | 19,278 | $ | 20,815 | ||||||
| Adjusted diluted earnings per common share | $ | 0.88 | $ | 0.85 | $ | 0.92 | ||||||
| Adjusted return on average assets | 1.15 | % | 1.13 | % | 1.16 | % | ||||||
| Adjusted return on average shareholders' equity | 11.76 | % | 11.89 | % | 12.84 | % | ||||||
| Adjusted return on average tangible common equity | 17.11 | % | 16.80 | % | 17.89 | % | ||||||
| Adjusted Pre-Tax, Pre-Provision Earnings Reconciliation | ||||||||||||
| For the Quarter Ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| (dollars in thousands) | 2023 | 2022 | 2022 | |||||||||
| Adjusted earnings pre tax - non-GAAP | $ | 29,314 | $ | 29,621 | $ | 27,480 | ||||||
| Provision for credit losses | 3,135 | 3,544 | 4,167 | |||||||||
| Impairment on commercial mortgage servicing rights | — | — | 394 | |||||||||
| Adjusted pre-tax, pre-provision earnings - non-GAAP | $ | 32,449 | $ | 33,165 | $ | 32,041 | ||||||
| Adjusted pre-tax, pre-provision return on average assets | 1.67 | % | 1.68 | % | 1.79 | % | ||||||
| MIDLAND STATES BANCORP, INC. | ||||||||||||
| RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued) | ||||||||||||
| Efficiency Ratio Reconciliation | ||||||||||||
| For the Quarter Ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| (dollars in thousands) | 2023 | 2022 | 2022 | |||||||||
| Noninterest expense - GAAP | $ | 44,482 | $ | 49,943 | $ | 40,884 | ||||||
| Loss on mortgage servicing rights held for sale | — | (3,250 | ) | — | ||||||||
| Integration and acquisition expenses | — | — | (91 | ) | ||||||||
| Adjusted noninterest expense | $ | 44,482 | $ | 46,693 | $ | 40,793 | ||||||
| Net interest income - GAAP | $ | 60,504 | $ | 63,550 | $ | 56,827 | ||||||
| Effect of tax-exempt income | 244 | 286 | 369 | |||||||||
| Adjusted net interest income | 60,748 | 63,836 | 57,196 | |||||||||
| Noninterest income - GAAP | 15,779 | 33,839 | 15,613 | |||||||||
| Impairment on commercial mortgage servicing rights | — | — | 394 | |||||||||
| Loss on sales of investment securities, net | 648 | — | — | |||||||||
| (Gain) on termination of hedged interest rate swaps | — | (17,531 | ) | — | ||||||||
| Adjusted noninterest income | 16,427 | 16,308 | 16,007 | |||||||||
| Adjusted total revenue | $ | 77,175 | $ | 80,144 | $ | 73,203 | ||||||
| Efficiency ratio | 57.64 | % | 58.26 | % | 55.73 | % | ||||||
| Return on Average Tangible Common Equity (ROATCE) | ||||||||||||
| For the Quarter Ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| (dollars in thousands) | 2023 | 2022 | 2022 | |||||||||
| Net income | $ | 21,772 | $ | 32,872 | $ | 20,749 | ||||||
| Average total shareholders' equity—GAAP | $ | 767,186 | $ | 749,183 | $ | 657,327 | ||||||
| Adjustments: | ||||||||||||
| Preferred Stock | (110,548 | ) | (110,548 | ) | — | |||||||
| Goodwill | (161,904 | ) | (161,904 | ) | (161,904 | ) | ||||||
| Other intangible assets, net | (20,184 | ) | (22,859 | ) | (23,638 | ) | ||||||
| Average tangible common equity | $ | 474,550 | $ | 453,872 | $ | 471,785 | ||||||
| ROATCE | 16.70 | % | 25.89 | % | 17.84 | % | ||||||
| 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 | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| (dollars in thousands, except per share data) | 2023 | 2022 | 2022 | |||||||||
| Shareholders' Equity to Tangible Common Equity | ||||||||||||
| Total shareholders' equity—GAAP | $ | 775,643 | $ | 758,574 | $ | 644,986 | ||||||
| Adjustments: | ||||||||||||
| Preferred Stock | (110,548 | ) | (110,548 | ) | — | |||||||
| Goodwill | (161,904 | ) | (161,904 | ) | (161,904 | ) | ||||||
| Other intangible assets, net | (19,575 | ) | (20,866 | ) | (22,976 | ) | ||||||
| Tangible common equity | $ | 483,616 | $ | 465,256 | $ | 460,106 | ||||||
| Less: Accumulated other comprehensive income (AOCI) | (77,797 | ) | (83,797 | ) | (28,035 | ) | ||||||
| Tangible common equity excluding AOCI | 561,413 | 549,053 | 488,141 | |||||||||
| Total Assets to Tangible Assets: | ||||||||||||
| Total assets—GAAP | $ | 7,930,174 | $ | 7,855,501 | $ | 7,338,715 | ||||||
| Adjustments: | ||||||||||||
| Goodwill | (161,904 | ) | (161,904 | ) | (161,904 | ) | ||||||
| Other intangible assets, net | (19,575 | ) | (20,866 | ) | (22,976 | ) | ||||||
| Tangible assets | $ | 7,748,695 | $ | 7,672,731 | $ | 7,153,835 | ||||||
| Common Shares Outstanding | 22,111,454 | 22,214,913 | 22,044,626 | |||||||||
| Tangible Common Equity to Tangible Assets | 6.24 | % | 6.06 | % | 6.43 | % | ||||||
| Tangible Book Value Per Share | $ | 21.87 | $ | 20.94 | $ | 20.87 | ||||||
| Tangible Book Value Per Share excluding AOCI | $ | 25.39 | $ | 24.72 | $ | 22.14 | ||||||
