• Midland States Bancorp, Inc. Announces 2020 Fourth Quarter Results

    Source: Nasdaq GlobeNewswire / 28 Jan 2021 16:15:02   America/New_York

    Summary

    • Net income of $8.3 million, or $0.36 diluted earnings per share
    • Adjusted earnings of $12.5 million, or $0.54 diluted earnings per share, primarily reflecting the exclusion of $4.9 million of charges related to the prepayment of FHLB advances
    • Total loans increased $161.9 million, or 3.3%, from September 30, 2020
    • Total deposits increased $72.3 million, or 1.4%, from September 30, 2020
    • Nonperforming loans declined 19.8% from September 30, 2020
    • Allowance for credit losses increased to 1.18% of total loans

    EFFINGHAM, Ill., Jan. 28, 2021 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (Nasdaq: MSBI) (the “Company”) today reported net income of $8.3 million, or $0.36 diluted earnings per share, for the fourth quarter of 2020, which included $4.9 million of charges related to the prepayment of FHLB advances, a $0.6 million loss on mortgage servicing rights (“MSRs”) held-for-sale, and $0.2 million in integration and acquisition expenses. This 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, and net income of $12.8 million, or $0.51 diluted earnings per share, for the fourth quarter of 2019, which included $3.3 million in integration and acquisition expenses and a $1.8 million loss on the repurchase of subordinated debt.

    Jeffrey G. Ludwig, President and Chief Executive Officer of the Company, said, “We delivered another strong quarter driven by significant growth in net interest income resulting from continued loan growth and a higher net interest margin. We saw good demand for commercial real estate loans, equipment financing, and warehouse lines to commercial FHA lenders, which drove a 13% annualized increase in our total loan balances. The strong loan growth enabled us to redeploy some of our excess liquidity into higher yielding earning assets. Combined with the continued reduction in our cost of deposits, the favorable shift in earning assets resulted in an increase in our net interest margin.

    “Although economic conditions remain challenging, we saw notable improvement in our asset quality during the fourth quarter. Our nonperforming loans declined by nearly 20% as we successfully resolved a number of longer-term problem loans, while more borrowers who received loan deferrals related to COVID-19 were able to resume making full or partial scheduled payments. While we are encouraged by the improvement in asset quality, we further increased our level of reserves to reflect the continued uncertainty around the timing of a stronger economic recovery.

    “Despite the challenges of the pandemic, we believe we had an incredibly productive year in making progress on our strategies to better position the Company for profitable growth in the future. We eliminated expenses through our branch consolidations and sale of the commercial FHA origination platform, restructured our FHLB advances to reduce interest expense, and continued building a robust digital platform that will enhance efficiencies and improve our loan production and deposit gathering capabilities. As we begin 2021, we believe we are in a much stronger position to realize more operating leverage, continue to grow our balance sheet, and deliver higher earnings and improved returns for our shareholders in the future,” said Mr. Ludwig.

    Factors Affecting Comparability

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

    Adjusted Earnings and Prepayments of FHLB Advances

    Financial results for the fourth quarter of 2020 were impacted by $4.9 million of charges related to the prepayment of FHLB advances, a $0.6 million loss on residential MSRs held-for sale, and $0.2 million in integration and acquisition expenses. Excluding these amounts and certain income, adjusted earnings were $12.5 million, or $0.54 diluted earnings per share, for the fourth quarter of 2020.

    During the fourth quarter of 2020, the Company prepaid $114.2 million of longer-term FHLB advances with a weighted average interest rate of 2.10%. The prepayment of the FHLB advances is expected to reduce the Company’s interest expense by $2.3 million in 2021 and positively impact its net interest margin by 2-3 basis points.

    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 income, adjusted earnings were $12.0 million, or $0.52 diluted earnings per share, for the third quarter of 2020.

    Financial results for the fourth quarter of 2019 included $3.3 million in integration and acquisition expenses, a $1.8 million loss on the repurchase of subordinated debt, and a $0.6 million gain on the sale of investment securities. Excluding these amounts and certain other income and expenses, adjusted earnings were $16.1 million, or $0.64 diluted earnings per share, for the fourth quarter of 2019.

    A reconciliation of adjusted earnings to net income according to accounting principles generally accepted in the United States (“GAAP”) is provided in the financial tables at the end of this press release.

    Net Interest Margin

    Net interest margin for the fourth quarter of 2020 was 3.47%, compared to 3.33% for the third quarter of 2020. The Company’s net interest margin benefits from accretion income on purchased loan portfolios, which contributed 10 and 14 basis points to net interest margin in the fourth quarter of 2020 and third quarter of 2020, respectively. Excluding the impact of accretion income, net interest margin increased 18 basis points from the third quarter of 2020, primarily due to the accelerated recognition of Paycheck Protection Program (“PPP”) loan income upon forgiveness, a shift in cash balances to higher yielding earnings assets, a reduction in the average cost of deposits, and a decrease in the average rate of FHLB borrowings following the prepayment of longer-term advances.

    Relative to the fourth quarter of 2019, net interest margin decreased from 3.56%. Accretion income on purchased loan portfolios contributed 23 basis points to net interest margin in the fourth quarter of 2019. Excluding the impact of accretion income, net interest margin increased 4 basis points compared to the fourth quarter of 2019, primarily due to the accelerated recognition of PPP loan income upon forgiveness and a reduction in the average cost of deposits.  

    Net Interest Income

    Net interest income for the fourth quarter of 2020 was $53.5 million, an increase of 7.1% from $50.0 million for the third quarter of 2020. Excluding accretion income, net interest income increased $4.1 million from the prior quarter.   Accretion income associated with purchased loan portfolios totaled $1.6 million for the fourth quarter of 2020, compared with $2.1 million for the third quarter of 2020. PPP loan income totaled $3.7 million in the fourth quarter of 2020, compared to $1.9 million in the third quarter of 2020.

    Relative to the fourth quarter of 2019, net interest income increased $4.8 million, or 9.9%. Accretion income for the fourth quarter of 2019 was $3.6 million. Excluding the impact of accretion income, net interest income increased primarily due to organic loan growth and a significant decline in the cost of funds.

    Noninterest Income

    Noninterest income for the fourth quarter of 2020 was $14.3 million, a decrease of 24.2% from $18.9 million for the third quarter of 2020.   Impairment on commercial MSRs impacted noninterest income by $2.3 million and $1.4 million in the fourth quarter of 2020 and third quarter of 2020, respectively. Noninterest income for the third quarter of 2020 also included a $1.7 million gain on sale of investment securities, with no similar income being recorded in the fourth quarter of 2020. Excluding the impairment and the gain on sale of investment securities, noninterest income decreased 10.4% due to lower levels of residential mortgage banking revenue and other income, as well as lower commercial FHA revenue following the sale of the FHA origination platform during the third quarter of 2020.

    Relative to the fourth quarter of 2019, noninterest income decreased 24.6% from $19.0 million. The decrease was primarily attributable to lower commercial FHA revenue following the sale of the FHA origination platform during the third quarter of 2020 and lower other income, partially offset by higher residential mortgage banking revenue.

    Wealth management revenue for the fourth quarter of 2020 was $5.9 million, an increase of 5.6% from the third quarter of 2020.   Compared to the fourth quarter of 2019, wealth management revenue increased 9.1%.

    Noninterest Expense

    Noninterest expense for the fourth quarter of 2020 was $47.0 million, which included $4.9 million of charges related to the prepayment of FHLB advances, a $0.6 million loss on residential MSRs held-for sale, and $0.2 million in integration and acquisition expenses, compared with $53.9 million in the third quarter of 2020, 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 FHLB prepayment charges, losses on MSRs held-for sale, and integration and acquisition expenses, noninterest expense increased primarily due to an accrual for a one-time rollover of vacation time in light of the COVID-19 pandemic, higher incentive compensation, and an increase in charitable contributions.

    Relative to the fourth quarter of 2019, noninterest expense increased 1.6% from $46.3 million, which included $3.3 million in integration and acquisition expenses, a $1.8 million loss on the repurchase of subordinated debt, and a $0.1 million loss on MSR held for sale. Excluding the FHLB prepayment charges, losses on MSRs held-for sale, integration and acquisition expenses, and the loss on the repurchase of subordinated debt, noninterest expense was essentially unchanged from the fourth quarter of 2019.

    Loan Portfolio

    Total loans outstanding were $5.10 billion at December 31, 2020, compared with $4.94 billion at September 30, 2020 and $4.40 billion at December 31, 2019. The increase in total loans from September 30, 2020 was primarily attributable to an increase in equipment finance loans and leases, commercial FHA warehouse lines of credit, and commercial real estate loans.

    Equipment finance balances increased $46.0 million from September 30, 2020 to $861.5 million, which are booked within the commercial loans and leases portfolio, reflecting management’s efforts to grow the equipment finance business.  

    The increase in total loans from December 31, 2019 was primarily attributable to the growth in equipment finance balances, consumer loans, and PPP loans.

    Deposits

    Total deposits were $5.10 billion at December 31, 2020, compared with $5.03 billion at September 30, 2020, and $4.54 billion at December 31, 2019. The increase in total deposits from the end of the prior quarter was primarily attributable to an increase in retail and commercial FHA servicing deposits, offset by declines in commercial customer and money market accounts.  

    Asset Quality

    Nonperforming loans totaled $54.1 million, or 1.06% of total loans, at December 31, 2020, compared with $67.4 million, or 1.36% of total loans, at September 30, 2020. The decrease in nonperforming loans was primarily attributable to the resolution of long-term problem loans, loans transferred to other real estate owned, and a reduction in the inflow of new loans to nonperforming status. At December 31, 2019, nonperforming loans totaled $42.1 million, or 0.96% of total loans.

    Net charge-offs for the fourth quarter of 2020 were $2.3 million, or 0.19% of average loans on an annualized basis.  

    The Company recorded a provision for credit losses on loans of $10.0 million for the fourth quarter of 2020, which was primarily driven by loan growth and additional reserves allocated to the equipment finance and commercial real estate portfolios.

    The Company’s allowance for credit losses on loans was 1.18% of total loans and 111.8% of nonperforming loans at December 31, 2020, compared with 1.07% of total loans and 78.3% of nonperforming loans at September 30, 2020.   Approximately 95.5% of the allowance for credit losses on loans at December 31, 2020 was allocated to general reserves.

    Capital

    At December 31, 2020, Midland States Bank and the Company exceeded all regulatory capital requirements under Basel III, and Midland States Bank met the qualifications to be a ‘‘well-capitalized’’ financial institution, as summarized in the following table:

     Bank Level
    Ratios as of
    December 31,
    2020    		Consolidated
    Ratios as of
    December 31,
    2020    		Minimum
    Regulatory
    Requirements (2)
    Total capital to risk-weighted assets11.77%13.24%10.50%
    Tier 1 capital to risk-weighted assets10.78%9.20%8.50%
    Tier 1 leverage ratio8.78%7.50%4.00%
    Common equity Tier 1 capital10.78%7.99%7.00%
    Tangible common equity to tangible assets (1)NA6.46%NA

          (1)   A non-GAAP financial measure. Refer to page 15 for a reconciliation to the comparable GAAP financial measure.
          (2)   Includes the capital conservation buffer of 2.5%.

    Stock Repurchase Program

    During the fourth quarter of 2020, the Company repurchased 430,185 shares of its common stock at a weighted average price of $16.01 under its stock repurchase program, which authorized the repurchase of up to $50 million of its common stock. As of December 31, 2020, the Company had $6.4 million remaining under the current stock repurchase authorization.

    Conference Call, Webcast and Slide Presentation

    The Company will host a conference call and webcast at 7:30 a.m. Central Time on Friday, January 29, 2021, to discuss its financial results. The call can be accessed via telephone at (877) 516-3531; conference ID: 3179613. A recorded replay can be accessed through February 5, 2021, by dialing (855) 859-2056; conference ID: 3179613.

    A slide presentation relating to the fourth quarter 2020 results will be accessible prior to the scheduled conference call. This earnings release should be read together with the slide presentation, which contains important information related to the impact of COVID-19. The slide presentation and webcast of the conference call can be accessed on the Webcasts and Presentations page of the Company’s investor relations website at investors.midlandsb.com under the “News and Events” tab.

    About Midland States Bancorp, Inc.

    Midland States Bancorp, Inc. is a community-based financial holding company headquartered in Effingham, Illinois, and is the sole shareholder of Midland States Bank. As of December 31, 2020, the Company had total assets of approximately $6.87 billion, and its Wealth Management Group had assets under administration of approximately $3.48 billion. Midland provides a full range of commercial and consumer banking products and services, business equipment financing, merchant credit card services, trust and investment management, 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; and other risks detailed from time to time in filings made by the Company with the Securities and Exchange Commission. Readers should note that the forward-looking statements included in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "will," "propose," "may," "plan," "seek," "expect," "intend," "estimate," "anticipate," "believe," "continue," or similar terminology. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

    CONTACTS:
    Jeffrey G. Ludwig, President and CEO, at jludwig@midlandsb.com or (217) 342-7321
    Eric T. Lemke, Chief Financial Officer, at elemke@midlandsb.com or (217) 342-7321
    Douglas J. Tucker, SVP and Corporate Counsel, at dtucker@midlandsb.com or (217) 342-7321

                        
                        
                        
    MIDLAND STATES BANCORP, INC.
    CONSOLIDATED FINANCIAL SUMMARY (unaudited)
                        
     For the Quarter Ended 
     December 31,  September 30,  June 30, March 31, December 31, 
    (dollars in thousands, except per share data)2020 2020 2020 2020 2019
    Earnings Summary                   
    Net interest income$53,516  $49,980  $48,989  $46,651  $48,687 
    Provision for credit losses 10,058   11,728   10,997   11,578   5,305 
    Noninterest income 14,336   18,919   19,396   8,598   19,014 
    Noninterest expense 47,048   53,901   41,395   41,666   46,325 
    Income before income taxes 10,746   3,270   15,993   2,005   16,071 
    Income taxes 2,413   3,184   3,424   456   3,279 
    Net income$8,333  $86  $12,569  $1,549  $12,792 
                        
    Diluted earnings per common share$0.36  $-  $0.53  $0.06  $0.51 
    Weighted average shares outstanding - diluted 22,656,343   22,937,837   23,339,964   24,538,002   24,761,960 
    Return on average assets 0.49%  0.01%  0.77%  0.10%  0.83%
    Return on average shareholders' equity 5.32%  0.05%  8.00%  0.96%  7.71%
    Return on average tangible common equity (1) 7.68%  0.08%  11.84%  1.39%  11.24%
    Net interest margin 3.47%  3.33%  3.32%  3.48%  3.56%
    Efficiency ratio (1) 58.55%  57.74%  59.42%  62.21%  59.46%
                        
    Adjusted Earnings Performance Summary (1)                   
    Adjusted earnings$12,471  $12,023  $12,884  $2,806  $16,110 
    Adjusted diluted earnings per common share$0.54  $0.52  $0.55  $0.11  $0.64 
    Adjusted return on average assets 0.73%  0.72%  0.78%  0.19%  1.04%
    Adjusted return on average shareholders' equity 7.97%  7.56%  8.20%  1.73%  9.71%
    Adjusted return on average tangible common equity 11.50%  11.04%  12.14%  2.53%  14.15%
    Adjusted pre-tax, pre-provision earnings$28,855  $28,751  $27,531  $23,785  $27,566 
    Adjusted pre-tax, pre-provision return on average assets 1.69%  1.72%  1.68%  1.58%  1.79%
                        
    (1) Non-GAAP financial measures. Refer to pages 13 - 15 for a reconciliation to the comparable GAAP financial measures.                
                        



                        
                        
                        
    MIDLAND STATES BANCORP, INC.
    CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
      
     For the Quarter Ended 
     December 31,  September 30,  June 30, March 31, December 31, 
    (in thousands, except per share data)2020 2020 2020 2020 2019
    Net interest income:                   
    Interest income$62,712   $60,314   $60,548   $61,314   $64,444  
    Interest expense 9,196    10,334    11,559    14,663    15,757  
    Net interest income 53,516    49,980    48,989    46,651    48,687  
    Provision for credit losses:                   
    Provision for credit losses on loans 10,000    10,970    11,610    10,569    5,305  
    Provision for credit losses on unfunded commitments -    577    (665)   934    -  
    Provision for other credit losses 58    181    52    75    -  
    Total provision for credit losses 10,058    11,728    10,997    11,578    5,305  
    Net interest income after provision for credit losses 43,458    38,252    37,992    35,073    43,382  
    Noninterest income:                   
    Wealth management revenue 5,868    5,559    5,698    5,677    5,377  
    Commercial FHA revenue 400    926    3,414    1,267    3,702  
    Residential mortgage banking revenue 2,285    3,049    2,723    1,755    763  
    Service charges on deposit accounts 2,149    2,092    1,706    2,656    2,860  
    Interchange revenue 3,137    3,283    3,013    2,833    3,053  
    Gain on sales of investment securities, net -    1,721    -    -    635  
    Impairment on commercial mortgage servicing rights (2,344)   (1,418)   (107)   (8,468)   (1,613) 
    Bank owned life insurance 893    897    892    900    913  
    Other income 1,948    2,810    2,057    1,978    3,324  
    Total noninterest income 14,336    18,919    19,396    8,598    19,014  
    Noninterest expense:                   
    Salaries and employee benefits 22,636    21,118    20,740    21,063    23,650  
    Occupancy and equipment 3,531    4,866    4,286    4,869    4,654  
    Data processing 5,987    5,721    5,458    5,477    6,217  
    Professional 1,912    1,861    1,606    1,855    1,952  
    Amortization of intangible assets 1,556    1,557    1,629    1,762    1,804  
    Loss on mortgage servicing rights held for sale 617    188    391    496    95  
    Impairment related to facilities optimization (10)   12,651    60    146    -  
    FHLB advances prepayment fees 4,872    -    -    -    -  
    Other expense 5,947    5,939    7,225    5,998    7,953  
    Total noninterest expense 47,048    53,901    41,395    41,666    46,325  
    Income before income taxes 10,746    3,270    15,993    2,005    16,071  
    Income taxes 2,413    3,184    3,424    456    3,279  
    Net income$8,333   $86   $12,569   $1,549   $12,792  
                        
    Basic earnings per common share$0.36   $0.00   $0.53   $0.06   $0.52  
    Diluted earnings per common share$0.36   $0.00   $0.53   $0.06   $0.51  
                        


                        
                        
                        
    MIDLAND STATES BANCORP, INC.
    CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                        
     As of 
     December 31,  September 30,  June 30, March 31, December 31, 
    (in thousands)2020 2020 2020 2020 2019
    Assets                   
    Cash and cash equivalents$341,640   $461,196   $519,868   $449,396   $394,505  
    Investment securities 686,135    618,974    639,693    661,894    655,054  
    Loans 5,103,331    4,941,466    4,839,423    4,376,204    4,401,410  
    Allowance for credit losses on loans (60,443)   (52,771)   (47,093)   (38,545)   (28,028) 
    Total loans, net 5,042,888    4,888,695    4,792,330    4,337,659    4,373,382  
    Loans held for sale, at fair value 138,090    62,500    32,403    113,852    16,431  
    Premises and equipment, net 74,124    74,967    89,046    90,118    91,055  
    Other real estate owned 20,247    15,961    12,728    7,892    6,745  
    Loan servicing rights, at lower of cost or fair value 39,276    42,465    44,239    44,566    53,824  
    Goodwill 161,904    161,904    172,796    172,796    171,758  
    Other intangible assets, net 28,382    29,938    31,495    33,124    34,886  
    Cash surrender value of life insurance policies 146,004    145,112    144,215    143,323    142,423  
    Other assets 189,850    198,333    165,685    153,610    146,954  
    Total assets$6,868,540   $6,700,045   $6,644,498   $6,208,230   $6,087,017  
                        
    Liabilities and Shareholders' Equity                   
    Noninterest-bearing deposits$1,469,579   $1,355,188   $1,273,267   $1,052,726   $1,019,472  
    Interest-bearing deposits 3,631,437    3,673,548    3,669,840    3,597,914    3,524,782  
    Total deposits 5,101,016    5,028,736    4,943,107    4,650,640    4,544,254  
    Short-term borrowings 68,957    58,625    77,136    43,578    82,029  
    FHLB advances and other borrowings 779,171    693,640    693,865    593,089    493,311  
    Subordinated debt 169,795    169,702    169,610    169,505    176,653  
    Trust preferred debentures 48,814    48,682    48,551    48,420    48,288  
    Other liabilities 79,396    78,780    78,640    71,838    80,571  
    Total liabilities 6,247,149    6,078,165    6,010,909    5,577,070    5,425,106  
    Total shareholders’ equity 621,391    621,880    633,589    631,160    661,911  
    Total liabilities and shareholders’ equity$6,868,540   $6,700,045   $6,644,498   $6,208,230   $6,087,017  
                        


                         
                         
                         
    MIDLAND STATES BANCORP, INC. 
    CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) 
                         
     As of  
     December 31,  September 30,  June 30, March 31, December 31,  
    (in thousands)2020 2020 2020 2020 2019 
    Loan Portfolio                    
    Commercial loans and leases$2,095,639  $1,938,691  $1,856,435  $1,439,145  $1,387,766  
    Commercial real estate 1,525,973   1,496,758   1,495,183   1,507,280   1,526,504  
    Construction and land development 172,737   177,894   207,593   208,361   208,733  
    Residential real estate 442,880   470,829   509,453   548,014   568,291  
    Consumer 866,102   857,294   770,759   673,404   710,116  
    Total loans$5,103,331  $4,941,466  $4,839,423  $4,376,204  $4,401,410  
                         
    Deposit Portfolio                    
    Noninterest-bearing demand$1,469,579  $1,355,188  $1,273,267  $1,052,726  $1,019,472  
    Interest-bearing:                    
    Checking 1,568,888   1,581,216   1,484,728   1,425,022   1,342,788  
    Money market 785,871   826,454   877,675   849,642   787,662  
    Savings 597,966   580,748   594,685   534,457   522,456  
    Time 655,620   661,872   689,841   765,870   822,160  
    Brokered time 23,092   23,258   22,911   22,923   49,716  
    Total deposits$5,101,016  $5,028,736  $4,943,107  $4,650,640  $4,544,254  



                         
                         
                         
    MIDLAND STATES BANCORP, INC. 
    CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) 
                         
     For the Quarter Ended  
     December 31,  September 30,  June 30, March 31, December 31,  
    (dollars in thousands)2020 2020 2020 2020 2019 
    Average Balance Sheets                    
    Cash and cash equivalents$415,686  $491,728  $489,941  $337,851  $406,526  
    Investment securities 672,937   628,705   650,356   662,450   631,294  
    Loans 4,998,912   4,803,940   4,696,288   4,384,206   4,359,144  
    Loans held for sale 45,196   44,880   99,169   19,844   36,974  
    Nonmarketable equity securities 51,906   50,765   50,661   45,124   43,745  
    Total interest-earning assets 6,184,637   6,020,018   5,986,415   5,449,475   5,477,683  
    Non-earning assets 602,716   625,522   619,411   624,594   649,169  
    Total assets$6,787,353  $6,645,540  $6,605,826  $6,074,069  $6,126,852  
                         
    Interest-bearing deposits$3,680,645  $3,656,833  $3,651,406  $3,549,515  $3,490,165  
    Short-term borrowings 62,432   64,010   59,103   55,616   104,598  
    FHLB advances and other borrowings 682,981   693,721   692,470   532,733   531,419  
    Subordinated debt 169,751   169,657   169,560   170,026   182,149  
    Trust preferred debentures 48,751   48,618   48,487   48,357   48,229  
    Total interest-bearing liabilities 4,644,560   4,632,839   4,621,026   4,356,247   4,356,560  
    Noninterest-bearing deposits 1,446,359   1,303,963   1,280,983   986,178   1,028,670  
    Other noninterest-bearing liabilities 73,840   75,859   71,853   78,943   83,125  
    Shareholders' equity 622,594   632,879   631,964   652,701   658,497  
    Total liabilities and shareholders' equity$6,787,353  $6,645,540  $6,605,826  $6,074,069  $6,126,852  
                         
    Yields                    
    Earning Assets                    
    Cash and cash equivalents 0.12%  0.10%  0.14%  1.26%  1.62% 
    Investment securities 2.65%  2.86%  3.05%  3.23%  3.10% 
    Loans 4.58%  4.57%  4.64%  5.01%  5.22% 
    Loans held for sale 3.14%  2.92%  4.07%  3.87%  4.12% 
    Nonmarketable equity securities 5.22%  5.26%  5.40%  5.39%  5.31% 
    Total interest-earning assets 4.06%  4.01%  4.10%  4.56%  4.70% 
                         
    Interest-Bearing Liabilities                    
    Interest-bearing deposits 0.36%  0.46%  0.61%  0.95%  1.03% 
    Short-term borrowings 0.14%  0.17%  0.19%  0.73%  0.67% 
    FHLB advances and other borrowings 1.71%  1.85%  1.69%  2.24%  2.26% 
    Subordinated debt 5.60%  5.58%  5.85%  5.90%  5.94% 
    Trust preferred debentures 4.03%  4.16%  4.86%  6.02%  6.41% 
    Total interest-bearing liabilities 0.79%  0.89%  1.01%  1.35%  1.43% 
                         
    Cost of Deposits 0.26%  0.34%  0.45%  0.74%  0.80% 
                         
    Net Interest Margin 3.47%  3.33%  3.32%  3.48%  3.56% 
                         


                         
                         
                         
    MIDLAND STATES BANCORP, INC. 
    CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) 
                         
     As of and for the Quarter Ended  
     December 31,  September 30,  June 30, March 31, December 31,  
    (dollars in thousands, except per share data)2020 2020 2020 2020 2019 
    Asset Quality                    
    Loans 30-89 days past due$31,460  $28,188  $36,551  $40,392  $29,876  
    Nonperforming loans 54,070   67,443   60,513   58,166   42,082  
    Nonperforming assets 75,432   84,795   74,707   67,158   50,027  
    Net charge-offs 2,328   5,292   3,062   12,835   2,194  
    Loans 30-89 days past due to total loans 0.62%  0.57%  0.76%  0.92%  0.68% 
    Nonperforming loans to total loans 1.06%  1.36%  1.25%  1.33%  0.96% 
    Nonperforming assets to total assets 1.10%  1.27%  1.12%  1.08%  0.82% 
    Allowance for credit losses to total loans 1.18%  1.07%  0.97%  0.88%  0.64% 
    Allowance for credit losses to nonperforming loans 111.79%  78.25%  77.82%  66.27%  66.60% 
    Net charge-offs to average loans 0.19%  0.44%  0.26%  1.18%  0.20% 
                         
    Wealth Management                    
    Trust assets under administration$3,480,759  $3,260,893  $3,253,784  $2,967,536  $3,409,959  
                         
    Market Data                    
    Book value per share at period end$27.83  $27.51  $27.62  $26.99  $27.10  
    Tangible book value per share at period end (1)$19.31  $19.03  $18.72  $18.19  $18.64  
    Market price at period end$17.87  $12.85  $14.95  $17.49  $28.96  
    Shares outstanding at period end 22,325,471   22,602,844   22,937,296   23,381,496   24,420,345  
                         
    Capital                    
    Total capital to risk-weighted assets 13.24%  13.34%  13.67%  13.73%  14.72% 
    Tier 1 capital to risk-weighted assets 9.20%  9.40%  9.71%  9.76%  10.52% 
    Tier 1 leverage ratio 7.50%  7.72%  7.75%  8.39%  8.74% 
    Tier 1 common capital to risk-weighted assets 7.99%  8.18%  8.44%  8.47%  9.20% 
    Tangible common equity to tangible assets (1) 6.46%  6.61%  6.67%  7.08%  7.74% 
                         
    (1) Non-GAAP financial measures. Refer to pages 13 - 15 for a reconciliation to the comparable GAAP financial measures.              
                         


                         
                         
     
    MIDLAND STATES BANCORP, INC. 
    RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) 
                         
    Adjusted Earnings Reconciliation                     
                         
     For the Quarter Ended  
     December 31,  September 30,  June 30, March 31, December 31,  
    (dollars in thousands, except per share data)2020 2020 2020 2020 2019 
    Income before income taxes - GAAP$10,746   $3,270   $15,993   $2,005   $16,071   
    Adjustments to noninterest income:                    
    Gain on sales of investment securities, net -    1,721    -    -    635   
    Other 3    (17)   11    (13)   (6)  
     Total adjustments to noninterest income 3    1,704    11    (13)   629   
    Adjustments to noninterest expense:                    
    Loss on mortgage servicing rights held for sale 617    188    391    496    95   
    Loss on repurchase of subordinated debt -    -    -    193    1,778   
    Impairment related to facilities optimization (10)   12,651    60    146    -   
    FHLB advances prepayment fees 4,872    -    -    -    -   
    Integration and acquisition expenses 231    1,200    (6)   886    3,333   
     Total adjustments to noninterest expense 5,710    14,039    445    1,721    5,206   
    Adjusted earnings pre tax 16,453    15,605    16,427    3,739    20,648   
    Adjusted earnings tax 3,982    3,582    3,543    933    4,538   
    Adjusted earnings - non-GAAP$12,471   $12,023   $12,884   $2,806   $16,110   
    Adjusted diluted earnings per common share$0.54   $0.52   $0.55   $0.11   $0.64   
    Adjusted return on average assets 0.73 %  0.72 %  0.78 %  0.19 %  1.04 % 
    Adjusted return on average shareholders' equity 7.97 %  7.56 %  8.20 %  1.73 %  9.71 % 
    Adjusted return on average tangible common equity 11.50 %  11.04 %  12.14 %  2.53 %  14.15 % 
                         
                         
    Adjusted Pre-Tax, Pre-Provision Earnings Reconciliation                     
                         
     For the Quarter Ended 
     December 31,  September 30,  June 30, March 31, December 31,  
    (dollars in thousands)2020 2020 2020 2020 2019 
    Adjusted earnings pre tax - non- GAAP$16,453   $15,605   $16,427   $3,739   $20,648   
    Provision for credit losses 10,058    11,728    10,997    11,578    5,305   
    Impairment on commercial mortgage servicing rights 2,344    1,418    107    8,468    1,613   
    Adjusted pre-tax, pre-provision earnings - non-GAAP$28,855   $28,751   $27,531   $23,785   $27,566   
    Adjusted pre-tax, pre-provision return on average assets 1.69 %  1.72 %  1.68 %  1.58 %  1.79 % 
                         


                         
    MIDLAND STATES BANCORP, INC. 
    RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued) 
                         
                         
    Efficiency Ratio Reconciliation                    
     For the Quarter Ended  
     December 31,  September 30,  June 30, March 31, December 31,  
    (dollars in thousands)2020 2020 2020 2020 2019 
    Noninterest expense - GAAP$47,048   $53,901   $41,395   $41,666   $46,325   
    Loss on mortgage servicing rights held for sale (617)   (188)   (391)   (496)   (95)  
    Loss on repurchase of subordinated debt -    -    -    (193)   (1,778)  
    Impairment related to facilities optimization 10    (12,651)   (60)   (146)   -   
    FHLB advances prepayment fees (4,872)   -    -    -    -   
    Integration and acquisition expenses (231)   (1,199)   6    (885)   (3,332)  
    Adjusted noninterest expense$41,338   $39,863   $40,950   $39,946   $41,120   
                         
    Net interest income - GAAP$53,516   $49,980   $48,989   $46,651   $48,687   
    Effect of tax-exempt income 413    430    438    485    474   
    Adjusted net interest income 53,929    50,410    49,427    47,136    49,161   
                         
    Noninterest income - GAAP 14,336    18,919    19,396    8,598    19,014   
    Impairment on commercial mortgage servicing rights 2,344    1,418    107    8,468    1,613   
    Gain on sales of investment securities, net -    (1,721)   -    -    (635)  
    Other (3)   17    (11)   13    6   
    Adjusted noninterest income 16,677    18,633    19,492    17,079    19,998   
                         
    Adjusted total revenue$70,606   $69,043   $68,919   $64,215   $69,159   
                         
    Efficiency ratio 58.55 %  57.74 %  59.42 %  62.21 %  59.46 % 
                         



                         
                         
                         
    MIDLAND STATES BANCORP, INC. 
    RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued) 
                         
    Tangible Common Equity to Tangible Assets Ratio and Tangible Book Value Per Share              
                         
     As of  
     December 31,  September 30,  June 30, March 31, December 31,  
    (dollars in thousands, except per share data)2020 2020 2020 2020 2019 
    Shareholders' Equity to Tangible Common Equity                    
    Total shareholders' equity—GAAP$621,391   $621,880   $633,589   $631,160   $661,911   
    Adjustments:                    
    Goodwill (161,904)   (161,904)   (172,796)   (172,796)   (171,758)  
    Other intangibles, net (28,382)   (29,938)   (31,495)   (33,124)   (34,886)  
    Tangible common equity$431,105   $430,038   $429,298   $425,240   $455,267   
                         
    Total Assets to Tangible Assets:                    
    Total assets—GAAP$6,868,540   $6,700,045   $6,644,498   $6,208,230   $6,087,017   
    Adjustments:                    
    Goodwill (161,904)   (161,904)   (172,796)   (172,796)   (171,758)  
    Other intangibles, net (28,382)   (29,938)   (31,495)   (33,124)   (34,886)  
    Tangible assets$6,678,254   $6,508,203   $6,440,207   $6,002,310   $5,880,373   
                         
    Common Shares Outstanding 22,325,471    22,602,844    22,937,296    23,381,496    24,420,345   
                         
    Tangible Common Equity to Tangible Assets 6.46 %  6.61 %  6.67 %  7.08 %  7.74 % 
    Tangible Book Value Per Share$19.31   $19.03   $18.72   $18.19   $18.64   
                         
    Return on Average Tangible Common Equity (ROATCE)                  
                         
     For the Quarter Ended 
     December 31,  September 30,  June 30, March 31, December 31,  
    (dollars in thousands)2020 2020 2020 2020 2019 
    Net income available to common shareholders$8,333   $86   $12,569   $1,549   $12,792   
                         
    Average total shareholders' equity—GAAP$622,594   $632,879   $631,964   $652,701   $658,497   
    Adjustments:                    
    Goodwill (161,904)   (168,771)   (172,796)   (171,890)   (171,082)  
    Other intangibles, net (29,123)   (30,690)   (32,275)   (33,951)   (35,745)  
    Average tangible common equity$431,567   $433,418   $426,893   $446,860   $451,670   
    ROATCE 7.68 %  0.08 %  11.84 %  1.39 %  11.24 % 
                         

     

     


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