Midland States Bancorp, Inc. Announces 2024 First Quarter Results
- Net income of $11.7 million in Q1 2024
- Pre-tax, pre-provision earnings of $32.2 million
- Efficiency ratio of 58.0%
- Improvement in common equity tier 1 capital ratio to 8.60%
- Increased loan-to-deposit ratio and tangible book value per share
- Increase in provision expense due to a specific reserve of $8.0 million on a multi-family construction project
- Decline in net interest income by 3.6%
- Increase in non-performing loans by $48.6 million
- Efficiency ratio increased to 58.03%
- Increase in allowance for credit losses on loans
Insights
The financial results released by Midland States Bancorp, Inc. for the first quarter of 2024 reveal a discernible decline in net income available to common shareholders, which dropped from $18.5 million in the previous quarter to $11.7 million. Adjusting for non-recurring transactions, the adjusted earnings for the fourth and first quarters of 2023 were notably higher.
Interestingly, although the net interest margin has marginally decreased from 3.21% to 3.18%, the Common Equity Tier 1 (CET1) ratio, a key measure of a bank's financial strength from a regulator's point of view, has shown some improvement. However, the increase in provisions for credit losses, particularly the specific reserve for a construction loan, suggests a strategic response to potential credit risks in the bank’s loan portfolio.
From an investor's perspective, the increase in non-performing loans and the efficiency ratio, which has risen from 55.2% to 58.0%, might raise concerns about asset quality and operating efficiency. Nevertheless, the bank's total capital exceeds regulatory requirements, indicating a solid overall capital position which could reassure stakeholders about the bank’s resilience to potential financial stress.
Examining the operational stance of Midland States Bancorp, the bank's approach to loan origination emphasizes quality over quantity, evident from the deliberate reduction in certain loan categories such as equipment finance and consumer loans. This cautious approach could be interpreted as a protective measure against an unstable economic environment, yet it has led to a decrease in the total loan portfolio.
The uptick in wealth management revenue is a positive signal, as it suggests an expanding service that could be less sensitive to interest rate fluctuations than traditional banking services. However, given the current economic landscape, marked by volatile interest rates, investors should be aware of the challenges that the banking sector faces, especially in maintaining net interest margins and managing credit risks.
The first quarter report of Midland States Bancorp shows an elevated provision for credit losses, primarily due to a specific reserve for a multi-family construction project, which has significantly increased. This move reflects a cautious approach by the bank towards its credit exposure, perhaps in anticipation of a challenging economic environment ahead.
Moreover, the rise in non-performing loans could be indicative of underlying strains in the credit portfolio, which warrants close monitoring. While the bank's capital ratios have improved, it is paramount for potential investors to consider the risk of an uptick in default rates and its subsequent impact on the bank's financial health.
Furthermore, the reported increase in the allowance for loan losses, both in absolute terms and as a percentage of portfolio loans, signals a proactive stance in risk management. This strategic buffer could be seen as a move to reassure investors of the bank’s preparedness for potential future loan defaults.
First Quarter 2024 Highlights:
- Net income available to common shareholders of
$11.7 million , or$0.53 per diluted share - Pre-tax, pre-provision earnings of
$32.2 million - Tangible book value per share increased
0.4% from prior quarter to$23.44 - Common equity tier 1 capital ratio improved to
8.60% from8.40% - Net interest margin of
3.18% , compared to3.21% in prior quarter - Efficiency ratio of
58.0% , compared to55.2% in prior quarter
EFFINGHAM, Ill., April 25, 2024 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (Nasdaq: MSBI) (the “Company”) today reported net income available to common shareholders of
Provision expense was
Financial results for the fourth quarter of 2023 included a
Excluding these transactions, adjusted earnings available to common shareholders were
Jeffrey G. Ludwig, President and Chief Executive Officer of the Company, said, “Our first quarter reflects strong pre-tax, pre-provision results and our ongoing ability to deliver increased fee income and strong expense control. While our pre-tax pre-provision results generate solid profitability we did increase our reserves to reflect an increase in nonperforming loans. Our continued success in executing on our balance sheet management strategies resulted in the improvement in our loan-to-deposit ratio, tangible book value per share, and all of our capital ratios improved in the first quarter, even after the additional provision for credit losses.
“We continue to focus on high quality commercial relationships and our conservative approach to new loan production, including through the intentional runoff of equipment finance and consumer loans. We also continue to have success in growing our wealth management business, which contributed to the increase we had in non-interest income in the first quarter.
“As always, we continue to operate with a long-term perspective, and while we will maintain disciplined expense control, we will continue to invest in areas such as banking and wealth talent and technology that we believe will further strengthen our franchise and enhance our ability to continue creating long-term value for our shareholders,” said Mr. Ludwig.
Balance Sheet Highlights
Total assets were
Loans
During the first quarter of 2024, outstanding loans declined by
| As of | ||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||
| (in thousands) | 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||
| Loan Portfolio | ||||||||||||||
| Commercial loans | $ | 913,564 | $ | 951,387 | $ | 943,761 | $ | 962,756 | $ | 937,920 | ||||
| Equipment finance loans | 494,068 | 531,143 | 578,931 | 614,633 | 632,205 | |||||||||
| Equipment finance leases | 455,879 | 473,350 | 485,460 | 500,485 | 510,029 | |||||||||
| Commercial FHA warehouse lines | 8,035 | — | 48,547 | 30,522 | 10,275 | |||||||||
| Total commercial loans and leases | 1,871,546 | 1,955,880 | 2,056,699 | 2,108,396 | 2,090,429 | |||||||||
| Commercial real estate | 2,397,113 | 2,406,845 | 2,412,164 | 2,443,995 | 2,448,158 | |||||||||
| Construction and land development | 474,128 | 452,593 | 416,801 | 366,631 | 326,836 | |||||||||
| Residential real estate | 378,583 | 380,583 | 375,211 | 371,486 | 369,910 | |||||||||
| Consumer | 837,092 | 935,178 | 1,020,008 | 1,076,836 | 1,118,938 | |||||||||
| Total loans | $ | 5,958,462 | $ | 6,131,079 | $ | 6,280,883 | $ | 6,367,344 | $ | 6,354,271 | ||||
Loan Quality
Overall, credit quality metrics declined this quarter compared to the fourth quarter of 2023. Non-performing loans increased
At March 31, 2023, loans 30-89 days past due totaled
| As of and for the Three Months Ended | |||||||||||||||||||
| (in thousands) | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||
| 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||||||
| Asset Quality | |||||||||||||||||||
| Loans 30-89 days past due | $ | 58,854 | $ | 82,778 | $ | 46,608 | $ | 44,161 | $ | 30,895 | |||||||||
| Nonperforming loans | 104,979 | 56,351 | 55,981 | 54,844 | 50,713 | ||||||||||||||
| Nonperforming assets | 116,721 | 67,701 | 58,677 | 57,688 | 58,806 | ||||||||||||||
| Substandard loans | 149,049 | 184,224 | 143,793 | 130,707 | 99,819 | ||||||||||||||
| Net charge-offs | 4,445 | 5,117 | 3,449 | 2,996 | 2,119 | ||||||||||||||
| Loans 30-89 days past due to total loans | 0.99 | % | 1.35 | % | 0.74 | % | 0.69 | % | 0.49 | % | |||||||||
| Nonperforming loans to total loans | 1.76 | % | 0.92 | % | 0.89 | % | 0.86 | % | 0.80 | % | |||||||||
| Nonperforming assets to total assets | 1.49 | % | 0.86 | % | 0.74 | % | 0.72 | % | 0.74 | % | |||||||||
| Allowance for credit losses to total loans | 1.31 | % | 1.12 | % | 1.06 | % | 1.02 | % | 0.98 | % | |||||||||
| Allowance for credit losses to nonperforming loans | 74.35 | % | 121.56 | % | 119.09 | % | 118.43 | % | 122.39 | % | |||||||||
| Net charge-offs to average loans | 0.30 | % | 0.33 | % | 0.22 | % | 0.19 | % | 0.14 | % | |||||||||
The Company continued to increase its allowance for credit losses on loans during the first quarter of 2024. Notably, the Company recorded a specific reserve of
Deposits
Total deposits were
| As of | ||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||
| (in thousands) | 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||
| Deposit Portfolio | ||||||||||||||
| Noninterest-bearing demand | $ | 1,212,382 | $ | 1,145,395 | $ | 1,154,515 | $ | 1,162,909 | $ | 1,215,758 | ||||
| Interest-bearing: | ||||||||||||||
| Checking | 2,394,163 | 2,511,840 | 2,572,224 | 2,499,693 | 2,502,827 | |||||||||
| Money market | 1,128,463 | 1,135,629 | 1,090,962 | 1,226,470 | 1,263,813 | |||||||||
| Savings | 555,552 | 559,267 | 582,359 | 624,005 | 636,832 | |||||||||
| Time | 845,190 | 862,865 | 885,858 | 840,734 | 766,884 | |||||||||
| Brokered time | 188,234 | 94,533 | 119,084 | 72,737 | 39,087 | |||||||||
| Total deposits | $ | 6,323,984 | $ | 6,309,529 | $ | 6,405,002 | $ | 6,426,548 | $ | 6,425,201 | ||||
Results of Operations Highlights
Net Interest Income and Margin
During the first quarter of 2024, net interest income, on a tax-equivalent basis, totaled
Average interest-earning assets for the first quarter of 2024 were
Average loans were
Investment securities averaged
Average interest-bearing deposits were
| For the Three Months Ended | ||||||||||||||||||||||||||
| March 31, | December 31, | March 31, | ||||||||||||||||||||||||
| (dollars in thousands) | 2024 | 2023 | 2023 | |||||||||||||||||||||||
| 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 | $ | 69,316 | $ | 951 | 5.52 | % | $ | 77,363 | $ | 1,054 | 5.41 | % | $ | 85,123 | $ | 980 | 4.67 | % | ||||||||
| Investment securities | 988,716 | 10,708 | 4.36 | 883,153 | 9,257 | 4.16 | 809,848 | 5,995 | 3.00 | |||||||||||||||||
| Loans | 6,012,032 | 89,489 | 5.99 | 6,196,362 | 93,757 | 6.00 | 6,320,402 | 87,997 | 5.65 | |||||||||||||||||
| Loans held for sale | 3,405 | 55 | 6.56 | 4,429 | 81 | 7.26 | 1,506 | 16 | 4.41 | |||||||||||||||||
| Nonmarketable equity securities | 35,927 | 687 | 7.69 | 41,192 | 715 | 6.89 | 47,819 | 795 | 6.75 | |||||||||||||||||
| Total interest-earning assets | $ | 7,109,396 | $ | 101,890 | 5.76 | % | $ | 7,202,499 | $ | 104,864 | 5.78 | % | $ | 7,264,698 | $ | 95,783 | 5.35 | % | ||||||||
| Noninterest-earning assets | 671,671 | 695,293 | 610,811 | |||||||||||||||||||||||
| Total assets | $ | 7,781,067 | $ | 7,897,792 | $ | 7,875,509 | ||||||||||||||||||||
| Interest-Bearing Liabilities | ||||||||||||||||||||||||||
| Interest-bearing deposits | $ | 5,195,118 | $ | 39,214 | 3.04 | % | $ | 5,295,296 | $ | 39,156 | 2.93 | % | $ | 5,053,941 | $ | 26,405 | 2.12 | % | ||||||||
| Short-term borrowings | 65,182 | 836 | 5.16 | 13,139 | 15 | 0.47 | 38,655 | 25 | 0.26 | |||||||||||||||||
| FHLB advances & other borrowings | 313,121 | 3,036 | 3.90 | 430,207 | 4,750 | 4.38 | 540,278 | 6,006 | 4.51 | |||||||||||||||||
| Subordinated debt | 93,583 | 1,280 | 5.50 | 93,512 | 1,281 | 5.43 | 99,812 | 1,370 | 5.57 | |||||||||||||||||
| Trust preferred debentures | 50,707 | 1,389 | 11.02 | 50,541 | 1,402 | 11.00 | 50,047 | 1,229 | 9.96 | |||||||||||||||||
| Total interest-bearing liabilities | $ | 5,717,711 | $ | 45,755 | 3.22 | % | $ | 5,882,695 | $ | 46,604 | 3.14 | % | $ | 5,782,733 | $ | 35,035 | 2.46 | % | ||||||||
| Noninterest-bearing deposits | 1,151,542 | 1,142,062 | 1,250,899 | |||||||||||||||||||||||
| Other noninterest-bearing liabilities | 121,908 | 108,245 | 74,691 | |||||||||||||||||||||||
| Shareholders’ equity | 789,906 | 764,790 | 767,186 | |||||||||||||||||||||||
| Total liabilities and shareholder’s equity | $ | 7,781,067 | $ | 7,897,792 | $ | 7,875,509 | ||||||||||||||||||||
| Net Interest Margin | $ | 56,135 | 3.18 | % | $ | 58,260 | 3.21 | % | $ | 60,748 | 3.39 | % | ||||||||||||||
| Cost of Deposits | 2.49 | % | 2.41 | % | 1.70 | % | ||||||||||||||||||||
(1) Interest income and average rates for tax-exempt loans and investment securities are presented on a tax-equivalent basis, assuming a federal income tax rate of
Noninterest Income
Noninterest income was
| For the Three Months Ended | ||||||||||
| March 31, | December 31, | March 31, | ||||||||
| (in thousands) | 2024 | 2023 | 2023 | |||||||
| Noninterest income | ||||||||||
| Wealth management revenue | $ | 7,132 | $ | 6,604 | $ | 6,411 | ||||
| Service charges on deposit accounts | 3,116 | 3,246 | 2,745 | |||||||
| Interchange revenue | 3,358 | 3,585 | 3,412 | |||||||
| Residential mortgage banking revenue | 527 | 451 | 405 | |||||||
| Income on company-owned life insurance | 1,801 | 1,753 | 876 | |||||||
| Loss on sales of investment securities, net | — | (2,894 | ) | (648 | ) | |||||
| Other income | 5,253 | 7,768 | 2,578 | |||||||
| Total noninterest income | $ | 21,187 | $ | 20,513 | $ | 15,779 | ||||
Wealth management revenue totaled
Noninterest Expense
Noninterest expense was
| For the Three Months Ended | ||||||||
| March 31, | December 31, | March 31, | ||||||
| (in thousands) | 2024 | 2023 | 2023 | |||||
| Noninterest expense | ||||||||
| Salaries and employee benefits | $ | 24,102 | $ | 24,031 | $ | 24,243 | ||
| Occupancy and equipment | 4,142 | 3,934 | 4,443 | |||||
| Data processing | 6,722 | 6,963 | 6,311 | |||||
| Professional services | 2,255 | 2,072 | 1,760 | |||||
| Amortization of intangible assets | 1,089 | 1,130 | 1,291 | |||||
| FDIC insurance | 1,274 | 1,147 | 1,329 | |||||
| Other expense | 5,283 | 5,211 | 5,105 | |||||
| Total noninterest expense | $ | 44,867 | $ | 44,488 | $ | 44,482 | ||
Income Tax Expense
Income tax expense was
Capital
At March 31, 2024, 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, 2024 | |||||
| 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 15 for a reconciliation to the comparable GAAP financial measure.
(2) Includes the capital conservation buffer of
The impact of rising interest rates on the Company’s investment portfolio and cash flow hedges resulted in an
Stock Repurchase Program
As previously disclosed, on December 5, 2023, 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, 2024, 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, the measures in this press release 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 failures of Silicon Valley Bank and Signature Bank, increased deposit volatility and potential regulatory developments; changes in the financial markets; changes in business plans as circumstances warrant; risks relating to acquisitions; 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 Three Months Ended | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
| (dollars in thousands, except per share data) | 2024 | 2023 | 2023 | ||||||||
| Earnings Summary | |||||||||||
| Net interest income | $ | 55,920 | $ | 58,077 | $ | 60,504 | |||||
| Provision for credit losses | 14,000 | 6,950 | 3,135 | ||||||||
| Noninterest income | 21,187 | 20,513 | 15,779 | ||||||||
| Noninterest expense | 44,867 | 44,488 | 44,482 | ||||||||
| Income before income taxes | 18,240 | 27,152 | 28,666 | ||||||||
| Income taxes | 4,355 | 6,441 | 6,894 | ||||||||
| Net income | 13,885 | 20,711 | 21,772 | ||||||||
| Preferred dividends | 2,228 | 2,228 | 2,228 | ||||||||
| Net income available to common shareholders | $ | 11,657 | $ | 18,483 | $ | 19,544 | |||||
| Diluted earnings per common share | $ | 0.53 | $ | 0.84 | $ | 0.86 | |||||
| Weighted average common shares outstanding - diluted | 21,787,691 | 21,822,328 | 22,501,970 | ||||||||
| Return on average assets | 0.72 | % | 1.04 | % | 1.12 | % | |||||
| Return on average shareholders' equity | 7.07 | % | 10.74 | % | 11.51 | % | |||||
| Return on average tangible common equity(1) | 9.34 | % | 15.41 | % | 16.70 | % | |||||
| Net interest margin | 3.18 | % | 3.21 | % | 3.39 | % | |||||
| Efficiency ratio(1) | 58.03 | % | 55.22 | % | 57.64 | % | |||||
| Adjusted Earnings Performance Summary(1) | |||||||||||
| Adjusted earnings available to common shareholders | $ | 11,657 | $ | 19,793 | $ | 20,017 | |||||
| Adjusted diluted earnings per common share | $ | 0.53 | $ | 0.89 | $ | 0.88 | |||||
| Adjusted return on average assets | 0.72 | % | 1.11 | % | 1.15 | % | |||||
| Adjusted return on average shareholders' equity | 7.07 | % | 11.42 | % | 11.76 | % | |||||
| Adjusted return on average tangible common equity | 9.34 | % | 16.51 | % | 17.11 | % | |||||
| Adjusted pre-tax, pre-provision earnings | $ | 32,240 | $ | 35,898 | $ | 32,449 | |||||
| Adjusted pre-tax, pre-provision return on average assets | 1.67 | % | 1.80 | % | 1.67 | % | |||||
| Market Data | |||||||||||
| Book value per share at period end | $ | 31.67 | $ | 31.61 | $ | 30.08 | |||||
| Tangible book value per share at period end(1) | $ | 23.44 | $ | 23.35 | $ | 21.87 | |||||
| Tangible book value per share excluding accumulated other comprehensive income at period end(1) | $ | 27.23 | $ | 26.91 | $ | 25.39 | |||||
| Market price at period end | $ | 25.13 | $ | 27.56 | $ | 21.42 | |||||
| Common shares outstanding at period end | 21,485,231 | 21,551,402 | 22,111,454 | ||||||||
| Capital | |||||||||||
| Total capital to risk-weighted assets | 13.68 | % | 13.20 | % | 12.46 | % | |||||
| Tier 1 capital to risk-weighted assets | 11.16 | % | 10.91 | % | 10.25 | % | |||||
| Tier 1 common capital to risk-weighted assets | 8.60 | % | 8.40 | % | 7.84 | % | |||||
| Tier 1 leverage ratio | 9.92 | % | 9.71 | % | 9.54 | % | |||||
| Tangible common equity to tangible assets(1) | 6.58 | % | 6.55 | % | 6.24 | % | |||||
| Wealth Management | |||||||||||
| Trust assets under administration | $ | 3,888,219 | $ | 3,733,355 | $ | 3,502,635 | |||||
(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) | |||||||||||||||||||
| As of | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| (in thousands) | 2024 | 2023 | 2023 | 2023 | 2023 | ||||||||||||||
| Assets | |||||||||||||||||||
| Cash and cash equivalents | $ | 167,316 | $ | 135,061 | $ | 132,132 | $ | 160,695 | $ | 138,310 | |||||||||
| Investment securities | 1,044,900 | 920,396 | 839,344 | 887,003 | 821,005 | ||||||||||||||
| Loans | 5,958,462 | 6,131,079 | 6,280,883 | 6,367,344 | 6,354,271 | ||||||||||||||
| Allowance for credit losses on loans | (78,057 | ) | (68,502 | ) | (66,669 | ) | (64,950 | ) | (62,067 | ) | |||||||||
| Total loans, net | 5,880,405 | 6,062,577 | 6,214,214 | 6,302,394 | 6,292,204 | ||||||||||||||
| Loans held for sale | 5,043 | 3,811 | 6,089 | 5,632 | 2,747 | ||||||||||||||
| Premises and equipment, net | 81,831 | 82,814 | 82,741 | 81,006 | 80,582 | ||||||||||||||
| Other real estate owned | 8,920 | 9,112 | 480 | 202 | 6,729 | ||||||||||||||
| Loan servicing rights, at lower of cost or fair value | 19,577 | 20,253 | 20,933 | 21,611 | 1,117 | ||||||||||||||
| Commercial FHA mortgage loan servicing rights held for sale | — | — | — | — | 20,745 | ||||||||||||||
| Goodwill | 161,904 | 161,904 | 161,904 | 161,904 | 161,904 | ||||||||||||||
| Other intangible assets, net | 15,019 | 16,108 | 17,238 | 18,367 | 19,575 | ||||||||||||||
| Company-owned life insurance | 205,286 | 203,485 | 201,750 | 152,210 | 151,319 | ||||||||||||||
| Other assets | 241,608 | 251,347 | 292,460 | 243,697 | 233,937 | ||||||||||||||
| Total assets | $ | 7,831,809 | $ | 7,866,868 | $ | 7,969,285 | $ | 8,034,721 | $ | 7,930,174 | |||||||||
| Liabilities and Shareholders' Equity | |||||||||||||||||||
| Noninterest-bearing demand deposits | $ | 1,212,382 | $ | 1,145,395 | $ | 1,154,515 | $ | 1,162,909 | $ | 1,215,758 | |||||||||
| Interest-bearing deposits | 5,111,602 | 5,164,134 | 5,250,487 | 5,263,639 | 5,209,443 | ||||||||||||||
| Total deposits | 6,323,984 | 6,309,529 | 6,405,002 | 6,426,548 | 6,425,201 | ||||||||||||||
| Short-term borrowings | 214,446 | 34,865 | 17,998 | 21,783 | 31,173 | ||||||||||||||
| FHLB advances and other borrowings | 255,000 | 476,000 | 538,000 | 575,000 | 482,000 | ||||||||||||||
| Subordinated debt | 93,617 | 93,546 | 93,475 | 93,404 | 99,849 | ||||||||||||||
| Trust preferred debentures | 50,790 | 50,616 | 50,457 | 50,296 | 50,135 | ||||||||||||||
| Other liabilities | 102,966 | 110,459 | 106,743 | 90,869 | 66,173 | ||||||||||||||
| Total liabilities | 7,040,803 | 7,075,015 | 7,211,675 | 7,257,900 | 7,154,531 | ||||||||||||||
| Total shareholders’ equity | 791,006 | 791,853 | 757,610 | 776,821 | 775,643 | ||||||||||||||
| Total liabilities and shareholders’ equity | $ | 7,831,809 | $ | 7,866,868 | $ | 7,969,285 | $ | 8,034,721 | $ | 7,930,174 | |||||||||
| MIDLAND STATES BANCORP, INC. | ||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) | ||||||||||
| For the Three Months Ended | ||||||||||
| March 31, | December 31, | March 31, | ||||||||
| (in thousands, except per share data) | 2024 | 2023 | 2023 | |||||||
| Net interest income: | ||||||||||
| Interest income | $ | 101,675 | $ | 104,681 | $ | 95,539 | ||||
| Interest expense | 45,755 | 46,604 | 35,035 | |||||||
| Net interest income | 55,920 | 58,077 | 60,504 | |||||||
| Provision for credit losses on loans | 14,000 | 6,950 | 3,135 | |||||||
| Net interest income after provision for credit losses | 41,920 | 51,127 | 57,369 | |||||||
| Noninterest income: | ||||||||||
| Wealth management revenue | 7,132 | 6,604 | 6,411 | |||||||
| Service charges on deposit accounts | 3,116 | 3,246 | 2,745 | |||||||
| Interchange revenue | 3,358 | 3,585 | 3,412 | |||||||
| Residential mortgage banking revenue | 527 | 451 | 405 | |||||||
| Income on company-owned life insurance | 1,801 | 1,753 | 876 | |||||||
| Loss on sales of investment securities, net | — | (2,894 | ) | (648 | ) | |||||
| Other income | 5,253 | 7,768 | 2,578 | |||||||
| Total noninterest income | 21,187 | 20,513 | 15,779 | |||||||
| Noninterest expense: | ||||||||||
| Salaries and employee benefits | 24,102 | 24,031 | 24,243 | |||||||
| Occupancy and equipment | 4,142 | 3,934 | 4,443 | |||||||
| Data processing | 6,722 | 6,963 | 6,311 | |||||||
| Professional services | 2,255 | 2,072 | 1,760 | |||||||
| Amortization of intangible assets | 1,089 | 1,130 | 1,291 | |||||||
| FDIC insurance | 1,274 | 1,147 | 1,329 | |||||||
| Other expense | 5,283 | 5,211 | 5,105 | |||||||
| Total noninterest expense | 44,867 | 44,488 | 44,482 | |||||||
| Income before income taxes | 18,240 | 27,152 | 28,666 | |||||||
| Income taxes | 4,355 | 6,441 | 6,894 | |||||||
| Net income | 13,885 | 20,711 | 21,772 | |||||||
| Preferred stock dividends | 2,228 | 2,228 | 2,228 | |||||||
| Net income available to common shareholders | $ | 11,657 | $ | 18,483 | $ | 19,544 | ||||
| Basic earnings per common share | $ | 0.53 | $ | 0.84 | $ | 0.86 | ||||
| Diluted earnings per common share | $ | 0.53 | $ | 0.84 | $ | 0.86 | ||||
| MIDLAND STATES BANCORP, INC. | |||||||||||
| RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) | |||||||||||
| Adjusted Earnings Reconciliation | |||||||||||
| For the Three Months Ended | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
| (dollars in thousands, except per share data) | 2024 | 2023 | 2023 | ||||||||
| Income before income taxes - GAAP | $ | 18,240 | $ | 27,152 | $ | 28,666 | |||||
| Adjustments to noninterest income: | |||||||||||
| Loss on sales of investment securities, net | — | 2,894 | 648 | ||||||||
| (Gain) on sale of Visa B shares | — | (1,098 | ) | — | |||||||
| Total adjustments to noninterest income | — | 1,796 | 648 | ||||||||
| Adjusted earnings pre tax - non-GAAP | 18,240 | 28,948 | 29,314 | ||||||||
| Adjusted earnings tax | 4,355 | 6,927 | 7,069 | ||||||||
| Adjusted earnings - non-GAAP | 13,885 | 22,021 | 22,245 | ||||||||
| Preferred stock dividends | 2,228 | 2,228 | 2,228 | ||||||||
| Adjusted earnings available to common shareholders | $ | 11,657 | $ | 19,793 | $ | 20,017 | |||||
| Adjusted diluted earnings per common share | $ | 0.53 | $ | 0.89 | $ | 0.88 | |||||
| Adjusted return on average assets | 0.72 | % | 1.11 | % | 1.15 | % | |||||
| Adjusted return on average shareholders' equity | 7.07 | % | 11.42 | % | 11.76 | % | |||||
| Adjusted return on average tangible common equity | 9.34 | % | 16.51 | % | 17.11 | % | |||||
| Adjusted Pre-Tax, Pre-Provision Earnings Reconciliation | |||||||||||
| For the Three Months Ended | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
| (dollars in thousands) | 2024 | 2023 | 2023 | ||||||||
| Adjusted earnings pre tax - non-GAAP | $ | 18,240 | $ | 28,948 | $ | 29,314 | |||||
| Provision for credit losses | 14,000 | 6,950 | 3,135 | ||||||||
| Adjusted pre-tax, pre-provision earnings - non-GAAP | $ | 32,240 | $ | 35,898 | $ | 32,449 | |||||
| Adjusted pre-tax, pre-provision return on average assets | 1.67 | % | 1.80 | % | 1.67 | % | |||||
| MIDLAND STATES BANCORP, INC. | |||||||||||
| RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued) | |||||||||||
| Efficiency Ratio Reconciliation | |||||||||||
| For the Three Months Ended | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
| (dollars in thousands) | 2024 | 2023 | 2023 | ||||||||
| Noninterest expense - GAAP | $ | 44,867 | $ | 44,488 | $ | 44,482 | |||||
| Net interest income - GAAP | $ | 55,920 | $ | 58,077 | $ | 60,504 | |||||
| Effect of tax-exempt income | 215 | 183 | 244 | ||||||||
| Adjusted net interest income | 56,135 | 58,260 | 60,748 | ||||||||
| Noninterest income - GAAP | 21,187 | 20,513 | 15,779 | ||||||||
| Loss on sales of investment securities, net | — | 2,894 | 648 | ||||||||
| (Gain) on sale of Visa B shares | — | (1,098 | ) | — | |||||||
| Adjusted noninterest income | 21,187 | 22,309 | 16,427 | ||||||||
| Adjusted total revenue | $ | 77,322 | $ | 80,569 | $ | 77,175 | |||||
| Efficiency ratio | 58.03 | % | 55.22 | % | 57.64 | % | |||||
| Return on Average Tangible Common Equity (ROATCE) | |||||||||||
| For the Three Months Ended | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
| (dollars in thousands) | 2024 | 2023 | 2023 | ||||||||
| Net income available to common shareholders | $ | 11,657 | $ | 18,483 | $ | 19,544 | |||||
| Average total shareholders' equity—GAAP | $ | 789,906 | $ | 764,790 | $ | 767,186 | |||||
| Adjustments: | |||||||||||
| Preferred Stock | (110,548 | ) | (110,548 | ) | (110,548 | ) | |||||
| Goodwill | (161,904 | ) | (161,904 | ) | (161,904 | ) | |||||
| Other intangible assets, net | (15,525 | ) | (16,644 | ) | (20,184 | ) | |||||
| Average tangible common equity | $ | 501,929 | $ | 475,694 | $ | 474,550 | |||||
| ROATCE | 9.34 | % | 15.41 | % | 16.70 | % | |||||
| 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, | September 30, | June 30, | March 31, | |||||||||||||||
| (dollars in thousands, except per share data) | 2024 | 2023 | 2023 | 2023 | 2023 | ||||||||||||||
| Shareholders' Equity to Tangible Common Equity | |||||||||||||||||||
| Total shareholders' equity—GAAP | $ | 791,006 | $ | 791,853 | $ | 757,610 | $ | 776,821 | $ | 775,643 | |||||||||
| Adjustments: | |||||||||||||||||||
| Preferred Stock | (110,548 | ) | (110,548 | ) | (110,548 | ) | (110,548 | ) | (110,548 | ) | |||||||||
| Goodwill | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | |||||||||
| Other intangible assets, net | (15,019 | ) | (16,108 | ) | (17,238 | ) | (18,367 | ) | (19,575 | ) | |||||||||
| Tangible common equity | 503,535 | 503,293 | 467,920 | 486,002 | 483,616 | ||||||||||||||
| Less: Accumulated other comprehensive loss (AOCI) | (81,419 | ) | (76,753 | ) | (101,181 | ) | (84,719 | ) | (77,797 | ) | |||||||||
| Tangible common equity excluding AOCI | $ | 584,954 | $ | 580,046 | $ | 569,101 | $ | 570,721 | $ | 561,413 | |||||||||
| Total Assets to Tangible Assets: | |||||||||||||||||||
| Total assets—GAAP | $ | 7,831,809 | $ | 7,866,868 | $ | 7,969,285 | $ | 8,034,721 | $ | 7,930,174 | |||||||||
| Adjustments: | |||||||||||||||||||
| Goodwill | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | |||||||||
| Other intangible assets, net | (15,019 | ) | (16,108 | ) | (17,238 | ) | (18,367 | ) | (19,575 | ) | |||||||||
| Tangible assets | $ | 7,654,886 | $ | 7,688,856 | $ | 7,790,143 | $ | 7,854,450 | $ | 7,748,695 | |||||||||
| Common Shares Outstanding | 21,485,231 | 21,551,402 | 21,594,546 | 21,854,800 | 22,111,454 | ||||||||||||||
| Tangible Common Equity to Tangible Assets | 6.58 | % | 6.55 | % | 6.01 | % | 6.19 | % | 6.24 | % | |||||||||
| Tangible Book Value Per Share | $ | 23.44 | $ | 23.35 | $ | 21.67 | $ | 22.24 | $ | 21.87 | |||||||||
| Tangible Book Value Per Share, excluding AOCI | $ | 27.23 | $ | 26.91 | $ | 26.35 | $ | 26.11 | $ | 25.39 | |||||||||
FAQ
What was Midland States Bancorp, Inc.'s net income in the first quarter of 2024?
What was the pre-tax, pre-provision earnings in the first quarter of 2024?
What was the efficiency ratio in the first quarter of 2024?
What was the common equity tier 1 capital ratio in the first quarter of 2024?
Why was there an increase in provision expense in the first quarter of 2024?
