MSBI Midland States Bancorp

Midland States Bancorp, Inc. Announces 2024 First Quarter Results

Midland States Bancorp, Inc. Announces 2024 First Quarter Results

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% from 8.40%
  • Net interest margin of 3.18%, compared to 3.21% in prior quarter
  • Efficiency ratio of 58.0%, compared to 55.2% 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 $11.7 million, or $0.53 per diluted share, for the first quarter of 2024, compared to $18.5 million, or $0.84 per diluted share, for the fourth quarter of 2023. This also compares to net income available to common shareholders of $19.5 million, or $0.86 per diluted share, for the first quarter of 2023.

Provision expense was $14.0 million in the first quarter of 2024 compared to $7.0 million and $3.1 million in the fourth and first quarters of 2023, respectively. The increase in provision expense was the result of a specific reserve of $8.0 million on a multi-family construction project.

Financial results for the fourth quarter of 2023 included a $1.1 million gain on the sale of shares of VISA B stock, offset by $2.9 million of losses on the sale of investment securities. Results for the first quarter of 2023 included $0.6 million of losses on the sale of investment securities. There were no adjustments to the financial results for the first quarter of 2024.

Excluding these transactions, adjusted earnings available to common shareholders were $19.8 million and $20.0 million, or $0.89 and $0.88 per diluted share, for the fourth and first quarters of 2023, respectively.

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 $7.83 billion at March 31, 2024, compared to $7.87 billion at December 31, 2023, and $7.93 billion at March 31, 2023. At March 31, 2024, portfolio loans were $5.96 billion, compared to $6.13 billion at December 31, 2023, and $6.35 billion at March 31, 2023.

Loans

During the first quarter of 2024, outstanding loans declined by $172.6 million, or 2.8%, from December 31, 2023, as the Company continued to originate loans in a more selective and deliberate approach to balance liquidity and funding costs. Increases in commercial FHA warehouse lines and construction and land development loans of $8.0 million and $21.5 million, respectively, were offset by decreases in all other loan categories. Equipment finance loan and lease balances decreased $54.5 million during the first quarter of 2024 as the Company continued to reduce its concentration of this product within the overall loan portfolio. Consumer loans decreased $98.1 million due to loan payoffs and a cessation in loans originated through GreenSky. Our Greensky-originated loan balances decreased $77.7 million during the first quarter to $606.0 million at March 31, 2024. In addition, as previously disclosed, during the fourth quarter of 2023, the Company ceased originating loans through LendingPoint. As of March 31, 2024, the Company had $112.7 million in loans that were originated through LendingPoint, which will continue to be serviced by LendingPoint.

 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 $48.6 million to $105.0 million at March 31, 2024, compared to $56.4 million as of December 31, 2023. Four loans totaling $47.4 million account for the increase. Of these, three loans totaling $40.8 million are multi-family construction or multi-family projects. Loans 30-89 days past due decreased $23.9 million to $58.9 million as of March 31, 2024, compared to prior quarter end, as loans totaling $25.1 million were transferred to nonperforming status.

At March 31, 2023, loans 30-89 days past due totaled $30.9 million, non-performing loans were $50.7 million, and non-performing assets as a percentage of total assets were 0.74%.

 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 $8.0 million on one large construction and land development loan. The allowance totaled $78.1 million at March 31, 2024, compared to $68.5 million at December 31, 2023, and $62.1 million at March 31, 2023. The allowance as a percentage of portfolio loans was 1.31% at March 31, 2024, compared to 1.12% at December 31, 2023, and 0.98% at March 31, 2023.

Deposits

Total deposits were $6.32 billion at March 31, 2024, compared with $6.31 billion at December 31, 2023, representing an increase of $14.5 million, primarily due to increases in noninterest bearing demand deposits and brokered time deposits, which were partially offset by seasonal outflows of servicing and public fund deposits. Noninterest-bearing deposits increased $67.0 million to $1.21 billion at March 31, 2024, while interest-bearing deposits decreased $52.5 million to $5.11 billion at March 31, 2024. Brokered time deposits increased $93.7 million to offset seasonal outflows of the servicing and public fund deposits.

 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 $56.1 million, a decrease of $2.1 million, or 3.6%, compared to $58.3 million for the fourth quarter of 2023. The tax-equivalent net interest margin for the first quarter of 2024 was 3.18%, compared with 3.21% in the fourth quarter of 2023. Net interest income and net interest margin, on a tax-equivalent basis, were $60.7 million and 3.39%, respectively, in the first quarter of 2023. The declines in the net interest income and margin were largely attributable to increased market interest rates resulting in the cost of funding liabilities increasing at a faster rate than the yield on earning assets, as well as the impact of interest reversals on loans placed on non-accrual.

Average interest-earning assets for the first quarter of 2024 were $7.11 billion, compared to $7.20 billion for the fourth quarter of 2023. The yield decreased 2 basis points to 5.76% compared to the fourth quarter of 2023. Interest-earning assets averaged $7.26 billion for the first quarter of 2023.

Average loans were $6.01 billion for the first quarter of 2024, compared to $6.20 billion for the fourth quarter of 2023 and $6.32 billion for the first quarter of 2023. The yield on loans was 5.99% and 6.00% for the first quarter of 2024 and the fourth quarter of 2023, respectively.

Investment securities averaged $988.7 million for the first quarter of 2024, and yielded 4.36%, compared to an average balance and yield of $883.2 million and 4.16%, respectively, for the fourth quarter of 2023. The Company purchased additional higher-yielding investments resulting in the increased average balance and yield. Investment securities averaged $809.8 million for the first quarter of 2023.

Average interest-bearing deposits were $5.20 billion for the first quarter of 2024, compared to $5.30 billion for the fourth quarter of 2023, and $5.05 billion for the first quarter of 2023. Cost of interest-bearing deposits was 3.04% in the first quarter of 2024, which represented an 11 basis point increase from the fourth quarter of 2023. A competitive market, driven by rising interest rates and increased competition, contributed to the increase in deposit costs.

 For the Three Months Ended
 March 31, December 31, March 31,
(dollars in thousands) 2024   2023

  2023 
Interest-earning assetsAverage

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 21%. Tax-equivalent adjustments totaled $0.2 million for each of the three months ended March 31, 2024, December 31, 2023 and March 31, 2023, respectively.

Noninterest Income

Noninterest income was $21.2 million for the first quarter of 2024, compared to $20.5 million for the fourth quarter of 2023. Noninterest income for the first quarter of 2024 included incremental servicing revenues of $3.7 million related to the Greensky portfolio. Noninterest income for the fourth quarter of 2023 included incremental servicing revenues of $2.2 million and $1.6 million related to our commercial FHA servicing portfolio and the Greensky portfolio, respectively. Also included was a $1.1 million one-time gain from the sale of Visa B stock, offset by $2.9 million of losses on the sale of investment securities. The first quarter of 2023 included $0.6 million of losses on the sale of investment securities. Excluding these transactions, noninterest income for the first quarter of 2024, the fourth quarter of 2023, and the first quarter of 2023 was $17.5 million, $18.5 million, and $16.4 million, respectively.

 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 $7.1 million in the first quarter of 2024, an increase of $0.5 million, or 8.0%, as compared to the fourth quarter of 2023. Assets under administration increased to $3.89 billion at March 31, 2024 from $3.73 billion at December 31, 2023, primarily due to improved market performance, resulting in an increase in revenue. In addition, the first quarter fees included seasonal tax preparation fees. Assets under administration totaled $3.50 billion at March 31, 2023.

Noninterest Expense

Noninterest expense was $44.9 million in the first quarter of 2024, compared to $44.5 million in both the fourth quarter of 2023, and the first quarter of 2023. The efficiency ratio increased to 58.03% for the quarter ended March 31, 2024, compared to 55.22% for the quarter ended December 31, 2023, and 57.64% for the quarter ended March 31, 2023.

 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 $4.4 million for the first quarter of 2024, as compared to $6.4 million for the fourth quarter of 2023 and $6.9 million for the first quarter of 2023. The resulting effective tax rates were 23.9%, 23.7% and 24.0%, respectively.

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 assets12.77% 13.68% 10.50%
Tier 1 capital to risk-weighted assets11.62% 11.16% 8.50%
Tier 1 leverage ratio10.33% 9.92% 4.00%
Common equity Tier 1 capital11.62% 8.60% 7.00%
Tangible common equity to tangible assets(1)N/A 6.58% 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 2.5%.

The impact of rising interest rates on the Company’s investment portfolio and cash flow hedges resulted in an $81.4 million accumulated other comprehensive loss at March 31, 2024, which reduces tangible book value by $3.79 per share.

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 $25.0 million of common stock through December 31, 2024. During the first quarter of 2024, the Company repurchased 73,781 shares of its common stock at a weighted average price of $26.31 under its stock repurchase program.

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 $7.83 billion, and its Wealth Management Group had assets under administration of approximately $3.89 billion. The Company provides a full range of commercial and consumer banking products and services and business equipment financing, merchant credit card services, trust and investment management, insurance and financial planning services. For additional information, visit / or /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 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 or (217) 342-7321

Eric T. Lemke, Chief Financial Officer, at or (217) 342-7321

Douglas J. Tucker, SVP and Corporate Counsel, at 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 


EN
25/04/2024

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