Press Release

Midland States Bancorp, Inc. Announces 2016 Second Quarter Results

Second Quarter 2016 Summary

  • Successful initial public offering raises net proceeds of $71.7 million

  • Net income of $6.8 million, or $0.50 diluted earnings per share

  • Total loans increased $145 million, or 28.8% on an annualized basis

  • Non-interest income of $14.0 million, or 33.4% of total revenue

  • Return on average assets of 0.89%; Return on average equity of 10.18%

EFFINGHAM, Ill., July 28, 2016 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (NASDAQ:MSBI) (the “Company”) today reported net income of $6.8 million, or $0.50 diluted earnings per share, for the second quarter of 2016, compared with net income of $5.1 million, or $0.42 diluted earnings per share, for the first quarter of 2016, and net income of $6.7 million, or $0.55 diluted earnings per share, for the second quarter of 2015.  Net income for the second quarter of 2016 included a $3.0 million charge for the impairment of residential mortgage servicing rights (MSR), compared to $2.0 million in the first quarter of 2016 and a reversal of impairment of $1.0 million in the second quarter of 2015.  The effect of changes in residential MSR valuation negatively impacted diluted earnings per share by $0.14 and $0.10 for the second quarter of 2016 and first quarter of 2016, respectively, and positively impacted diluted earnings per share by $0.06 in the second quarter of 2015.

“We were very pleased to complete our initial public offering during the second quarter of 2016,” said Leon J. Holschbach, President and Chief Executive Officer of the Company.  “The capital raised through the IPO will support the continued implementation of our organic and acquisitive growth strategies, which we believe will create additional value for our shareholders in the years ahead.

“We had an outstanding quarter of business development and through the first half of 2016 our total loan portfolio increased at an annualized rate of 16%.  Our loan production was very well balanced in the second quarter and underscores the diverse business model we have built.  We had strong growth in our consumer, equipment leasing, construction, commercial real estate and residential real estate portfolios, and also had a robust quarter of loan production in our commercial FHA lending business.

“We also had a significant increase in our residential mortgage loan production and the net gain on loan sales generated from this business.  However, with the continued decline in interest rates, we recorded a $3.0 million impairment of our residential mortgage servicing rights, which offset much of the residential mortgage banking revenue generated this quarter.

“Looking ahead to the remainder of 2016, we believe that our markets are fundamentally healthy and we are seeing positive trends in loan demand and credit quality.  We continue to have a robust loan pipeline, which should support continued quality balance sheet growth during the second half of the year,” said Mr. Holschbach.

Net Interest Income

Net interest income for the second quarter of 2016 was $28.0 million, an increase of 16.4% from $24.0 million for the first quarter of 2016.  The Company’s net interest income benefits from accretion income associated with purchased loan portfolios.  Accretion income totaled $4.9 million for the second quarter of 2016, compared with $1.9 million for the first quarter of 2016.  In addition to higher accretion income, the increase in net interest income was primarily attributable to an increase in average loan balances. 

Accretion income for the second quarter of 2016 was positively impacted by the payoff of purchased credit impaired loans (PCI) totaling $5.9 million.  One of the PCI loans was an FDIC loss share loan, which resulted in the Company recording $1.8 million in net interest income, a $1.5 million expense for the amount payable to the FDIC within noninterest income, and an $808,000 reduction of provision for loan losses.

Relative to the second quarter of 2015, net interest income declined $328,000 due to a decline in accretion income, which totaled $5.9 million for the second quarter of 2015.  The decline in accretion income was offset by an increase in average loan balances.

Net Interest Margin

Net interest margin for the second quarter of 2016 was 4.20%, compared to 3.80% for the first quarter of 2016.  The Company’s net interest margin benefits from accretion income on purchased loan portfolios.  Excluding accretion income, net interest margin was 3.52% for the second quarter of 2016, compared with 3.55% for the first quarter of 2016.  The decrease in net interest margin excluding accretion income was primarily attributable to a decline in the average yield on loans.

Relative to the second quarter of 2015, the net interest margin declined from 4.79%, primarily due to lower accretion income.  Excluding accretion income, net interest margin declined from 3.88%, which was primarily attributable to lower average yields on loans and investment securities and an increase in cost of funds. 

Noninterest Income

Noninterest income for the second quarter of 2016 was $14.0 million, an increase of 11.1% from $12.6 million for the first quarter of 2016.  The increase was primarily attributable to higher commercial FHA revenue and lower other-than-temporary impairment recorded on investment securities.  This was partially offset by higher FDIC loss-sharing expense related to the $1.5 million payable to the FDIC as discussed above.

Commercial FHA revenue for the second quarter of 2016 was $8.5 million, an increase of 30.1% from $6.6 million in the first quarter of 2016.  The Company originated $281.2 million in rate lock commitments during the second quarter of 2016, compared to $227.3 million in the prior quarter.

Residential mortgage banking revenue for the second quarter of 2016 was $1.0 million, a decrease of 6.8% from $1.1 million in the first quarter of 2016.  During the second quarter of 2016, the Company recorded mortgage servicing rights impairment of $3.0 million due to a decline in long-term rates and the impact on prepayment speed assumptions compared to a $2.0 million impairment charge in the first quarter of 2016.

Relative to the second quarter of 2015, noninterest income declined 1.2% from $14.2 million.  The decline was primarily due to lower residential mortgage banking revenue and higher FDIC loss-sharing expense, which was partially offset by higher commercial FHA revenue.

Noninterest Expense

Noninterest expense for the second quarter of 2016 was $30.9 million, an increase of 11.8% from $27.6 million for the first quarter of 2016.  The increase was primarily driven by higher salaries resulting from annual salary increases that took effect in the second quarter, and higher bonus accrual.  During the second quarter of 2016, the Company also recorded a $511,000 write-off of accounting discount related to the early payoff of subordinated debt.

Relative to the second quarter of 2015, noninterest expense was essentially unchanged.  Higher salaries and benefits expense and the write-off of accounting discount related to the payoff of subordinated debt in the second quarter of 2016 were offset by a decline in professional fees. 

Loan Portfolio

Total loans outstanding were $2.16 billion at June 30, 2016, compared with $2.02 billion at March 31, 2016, and $1.91 billion at June 30, 2015.  The $145 million increase in the loan portfolio during the second quarter of 2016 was driven primarily by a $46.1 million increase in consumer loans, a $32.3 million increase in commercial real estate loans, a $22.2 million increase in construction and land development loans, a $21.0 million increase in residential real estate loans, and an $18.9 million increase in equipment lease financing loans.

Purchased Credit Impaired Loans

Purchased credit impaired (PCI) loans totaled $28.6 million at June 30, 2016, compared to $35.3 million at the end of the prior quarter and $42.5 million at June 30, 2015.  The decreases in PCI loans were primarily due to repayments and pay-offs of PCI loans as the Company did not complete any bank acquisitions during 2015 or the first half of 2016.

Deposits

Total deposits were $2.35 billion at June 30, 2016, compared with $2.39 billion at March 31, 2016, and $2.24 billion at June 30, 2015.  The decrease in total deposits from March 31, 2016 was primarily due to declines in non-interest bearing demand deposits and money market accounts, which were partially offset by an increase in NOW accounts.  The decrease in demand deposits was primarily attributable to fluctuations in Commercial FHA servicing deposits caused by the timing of loan payoffs.

Asset Quality

Non-performing loans totaled $18.4 million, or 0.85% of total loans, at June 30, 2016, compared with $18.8 million, or 0.93% of total loans, at March 31, 2016. 

Net charge-offs for the second quarter of 2016 were $448,000, or 0.09% of average loans on an annualized basis.

The Company recorded a provision for loan losses of $629,000 for the second quarter of 2016, primarily to reflect the growth in the loan portfolio.  During the second quarter of 2016, the Company recorded a recovery of $808,000 on a PCI loan, which reduced the level of provision required for the quarter.

The Company’s allowance for loan losses was 0.68% of total loans and 80.0% of non-performing loans at June 30, 2016, compared with 0.72% and 77.6%, respectively, at March 31, 2016.  Including the fair market value discounts recorded in connection with acquired loan portfolios, the allowance for loan losses to total loans ratio was 1.13% at June 30, 2016, compared with 1.18% at March 31, 2016.

Capital

At June 30, 2016, the Company exceeded all regulatory capital requirements under Basel III and was considered to be a ‘‘well-capitalized’’ financial institution, as summarized in the following table:

  June 30, 2016 Well Capitalized
Regulatory Requirements
Total capital to risk-weighted assets   13.91 %   10.00 %
Tier 1 capital to risk-weighted assets   11.23 %   8.00 %
Tier 1 leverage ratio   9.77 %   5.00 %
Tier 1 common capital to risk-weighted assets   9.24 %   6.50 %
Tangible common equity to tangible assets   8.89 %   NA  
 

Conference Call, Webcast and Slide Presentation

The Company will host a conference call and webcast at 7:30 a.m. Central Time on Friday, July 29, 2016.  During the call, management will review the second quarter results and operational highlights. The call can be accessed via telephone at (877) 516-3531 (passcode: 49066877).  A recorded replay can be accessed through August 5, 2016 by dialing (855) 859-2056 (passcode: 49066877). 

A slide presentation relating to the second quarter results will be accessible prior to the scheduled conference call.  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.

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. Midland had assets of approximately $3.0 billion, and its Midland Wealth Management Group had assets under administration of approximately $1.2 billion as of June 30, 2016.  Midland provides a full range of commercial and consumer banking products and services, merchant credit card services, trust and investment management, and insurance and financial planning services. In addition, commercial equipment leasing services are provided through Heartland Business Credit, and multi-family and healthcare facility FHA financing is provided through Love Funding, Midland's non-bank subsidiaries. Midland has more than 80 locations across the United States. For additional information, visit www.midlandsb.com or follow Midland on LinkedIn at 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 accounting principles generally accepted in the United States (“GAAP”).   These non-GAAP financial measures include “Adjusted Earnings,” “Adjusted Diluted Earnings Per Share,” “Adjusted Return on Average Assets,” “Adjusted Return on Average Shareholders’ Equity,”  “Adjusted Return on Average Tangible Common Equity,” “Yields on Loans Excluding Accretion Income, ” “Net Interest Margin Excluding Accretion Income,” “Tangible Common Equity to Tangible Assets,” “Tangible Book Value Per Share” and “Return on Average Tangible Common Equity.” The Company believes that 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.

Forward-Looking Statements

Readers should note that in addition to the historical information contained herein, this press release includes "forward-looking statements," including but not limited to statements about the Company’s expected loan production 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 changes in the financial markets; changes in business plans as circumstances warrant; 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" or "continue," or similar terminology. Any forward-looking statements presented herein are made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.


 

                                           
MIDLAND STATES BANCORP, INC.    
CONSOLIDATED FINANCIAL SUMMARY (unaudited)    
                                           
    For the Quarter Ended    
    June 30,    March 31,    December 31,    September 30,    June 30,   
(in thousands, except per share data)   2016   2016   2015   2015   2015  
Earnings Summary                                          
Net interest income   $ 27,989     $     24,041        $    26,452      $    25,437      $    28,317    
Provision for loan losses     629           1,125           1,052         6,699         2,379    
Noninterest income     14,024           12,618           12,799         14,464         14,197    
Noninterest expense     30,911           27,639           27,692         27,823         30,703    
Income before income taxes     10,473           7,895           10,507         5,379         9,432    
Income taxes     3,683           2,777           2,811         1,928         2,762    
Net income     6,790           5,118           7,696         3,451         6,670    
Net income (loss) attributable to noncontrolling                                          
  interest in subsidiaries     1           (1 )         1         6         17    
Net income attributable to Midland                                           
  States Bancorp, Inc.   $   6,789     $     5,119        $    7,695      $    3,445      $    6,653    
                                           
Diluted earnings per common share   $ 0.50     $   0.42       $ 0.63     $ 0.28     $ 0.55    
Weighted average shares outstanding - diluted     13,635,074         12,229,293         12,181,664       12,130,529       12,098,476    
Return on average assets     0.89 %       0.70   %     1.06 %     0.49 %     0.97 %  
Return on average shareholders' equity     10.18 %       8.69   %     13.19 %     5.88 %     11.74 %  
Return on average tangible common                                           
  shareholders' equity     12.67 %       11.22   %     17.26 %     7.72 %     15.56 %  
Net interest margin     4.20 %       3.80   %     4.19 %     4.18 %     4.79 %  
Efficiency ratio     67.09 %       67.72   %     68.83 %     64.32 %     67.61 %  
                                           
Adjusted Earnings Performance Summary                                          
Adjusted earnings   $ 7,107     $   5,767       $ 7,525     $ 4,638     $ 8,026    
Adjusted diluted earnings per common share   $ 0.52     $   0.47       $ 0.61     $ 0.38     $ 0.66    
Adjusted return on average assets     0.93 %       0.79   %     1.04 %     0.66 %     1.17 %  
Adjusted return on average shareholders' equity     10.66 %       9.79   %     12.90 %     7.92 %     14.16 %  
Adjusted return on average tangible common                                          
  shareholders' equity     13.27 %       12.64   %     16.77 %     10.39 %     18.77 %  
Net interest margin excluding  accretion income     3.52 %       3.55   %     3.56 %     3.83 %     3.88 %  
                                           

 




                                           
MIDLAND STATES BANCORP, INC.  
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)  
     
    For the Quarter Ended    
    June 30,    March 31,    December 31,    September 30,    June 30,   
(in thousands, except per share data)   2016   2016   2015   2015   2015  
Net interest income:                                          
Total interest income   $   32,115       $   27,967       $   30,300       $   28,949       $   31,242      
Total interest expense       4,126           3,926           3,848           3,512           2,925      
Net interest income       27,989           24,041           26,452           25,437           28,317      
Provision for loan losses       629           1,125           1,052           6,699           2,379      
Net interest income after provision                                          
        for loan losses       27,360           22,916           25,400           18,738           25,938      
Noninterest income:                                          
Commercial FHA revenue       8,538           6,562           3,045           5,914           4,101      
Residential mortgage banking revenue       1,045           1,121           3,328           3,490           4,832      
Wealth management revenue       1,870           1,785           1,831           1,808           1,857      
Service charges on deposit accounts       965           907           979           1,022           950      
Interchange revenue       945           964           858           895           863      
FDIC loss sharing expense       (1,608 )         (53 )         (212 )         (57 )         (204 )    
Gain on sales of investment securities, net       72           204           33           1             -      
Other than temporary impairment on                                          
      investment securities         -           (824 )           -           (299 )           -      
Other income       2,197           1,952           2,937           1,690           1,798      
Total noninterest income       14,024           12,618           12,799           14,464           14,197      
Noninterest expense:                                          
Salaries and employee benefits       17,020           15,387           13,725           14,932           16,437      
Occupancy and equipment       3,233           3,310           3,424           3,114           3,317      
Data processing       2,624           2,620           2,546           2,541           2,626      
Professional       1,573           1,701           2,079           2,075           2,183      
Intangible assets amortization       519           580           598           597           602      
Other       5,942           4,041           5,320           4,564           5,538      
Total noninterest expense       30,911           27,639           27,692           27,823           30,703      
Income before income taxes       10,473           7,895           10,507           5,379           9,432      
Income taxes       3,683           2,777           2,811           1,928           2,762      
Net income       6,790           5,118           7,696           3,451           6,670      
Net income (loss) attributable to                                           
   noncontrolling  interest in subsidiaries       1           (1 )         1           6           17      
Net income attributable to Midland                                           
  States Bancorp, Inc.   $   6,789       $   5,119       $   7,695       $   3,445       $   6,653      
                                           
Basic earnings per common share   $   0.51       $   0.43       $   0.64       $   0.29       $   0.56      
Diluted earnings per common share   $   0.50       $   0.42       $   0.63       $   0.28       $   0.55      
                                           

 




                                         
MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                                         
    As of  
    June 30,    March 31,    December 31,    September 30,    June 30, 
(in thousands)   2016   2016   2015   2015   2015
Assets                                        
Cash and cash equivalents   $   123,366       $   162,416       $   212,475       $   206,664       $   172,230    
Investment securities available-for-sale at fair value       238,781           232,074           236,627           211,359           207,848    
Investment securities held to maturity at amortized cost       84,756           88,085           87,521           92,011           94,637    
Loans       2,161,041           2,016,034           1,995,589           1,972,844           1,909,943    
Allowance for loan losses       (14,752 )         (14,571 )         (15,988 )         (15,157 )         (16,206 )  
Total loans, net       2,146,289           2,001,463           1,979,601           1,957,687           1,893,737    
Loans held for sale, at fair value       101,782           103,365           54,413           53,032           75,480    
Premises and equipment, net       72,147           72,421           73,133           73,362           73,263    
Other real estate owned       3,540           4,740           5,472           6,471           5,926    
Mortgage servicing rights at lower of cost or market       62,808           65,486           66,651           65,417           64,921    
Intangible assets       5,905           6,424           7,004           7,601           8,199    
Goodwill       46,519           46,519           46,519           47,102           47,102    
Cash surrender value of life insurance policies       73,665           53,173           52,729           52,271           51,814    
Other assets       62,226           61,914           62,679           59,331           58,424    
Total assets   $   3,021,784       $   2,898,080       $   2,884,824       $   2,832,308       $   2,753,581    
                                         
Liabilities and Shareholders' Equity                                        
Noninterest-bearing deposits   $   528,966       $   546,664       $   543,401       $   512,632       $   566,966    
Interest-bearing deposits       1,825,586           1,843,046           1,824,247           1,791,846           1,668,944    
Total deposits       2,354,552           2,389,710           2,367,648           2,304,478           2,235,910    
Short-term borrowings       125,014           101,649           107,538           108,823           117,314    
FHLB advances and other borrowings       97,588           40,133           40,178           50,225           50,264    
Subordinated debt       54,459           61,903           61,859           61,814           61,853    
Trust preferred debentures       37,229           37,142           37,057           36,973           37,142    
Other liabilities       36,627           28,982           37,488           38,370           22,523    
Total liabilities       2,705,469           2,659,519           2,651,768           2,600,683           2,525,006    
Midland States Bancorp, Inc. shareholders’ equity       316,268           238,386           232,880           231,415           228,371    
Noncontrolling interest in subsidiaries       47           175           176           210           204    
Total shareholders’ equity       316,315           238,561           233,056           231,625           228,575    
Total liabilities and shareholders’ equity   $   3,021,784       $   2,898,080       $   2,884,824       $   2,832,308       $   2,753,581    
                                         

 




                                           
MIDLAND STATES BANCORP, INC.  
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)  
                                           
    As of     
    June 30,    March 31,    December 31,    September 30,    June 30,   
(in thousands)   2016   2016   2015   2015   2015  
Loan Portfolio                                          
Commercial loans   $ 489,228     $ 484,618     $ 499,573     $ 521,983     $ 544,014    
Commercial real estate loans     929,399       897,099       876,784       866,027       842,907    
Construction and land development loans     181,667       159,507       150,266       131,083       121,314    
Residential real estate loans     179,184       158,221       163,224       168,129       158,798    
Consumer loans     205,060       158,938       161,512       157,521       122,116    
Lease financing loans     176,503       157,651       144,230       128,101       120,794    
Total loans   $ 2,161,041     $ 2,016,034     $ 1,995,589     $ 1,972,844     $ 1,909,943    
                                           
Purchase credit impaired loans   $ 28,642     $ 35,262     $ 38,477     $ 39,992     $ 42,454    
                                           
Deposit Portfolio                                          
Noninterest-bearing demand deposits   $ 528,966     $ 546,664     $ 543,401     $ 512,632     $ 566,966    
NOW accounts     627,003       612,475       621,925       623,494       557,197    
Money market accounts     374,537       415,130       377,654       350,398       360,303    
Savings accounts     164,792       163,163       155,778       154,632       160,504    
Time deposits     431,173       433,386       446,621       426,762       404,361    
Brokered deposits     228,081       218,892       222,269       236,560       186,579    
Total deposits   $ 2,354,552     $ 2,389,710     $ 2,367,648     $ 2,304,478     $ 2,235,910    

 




                                         
MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                                         
    For the Quarter Ended  
    June 30,    March 31,    December 31,    September 30,    June 30, 
(in thousands)   2016   2016   2015   2015   2015
Average Balance Sheets                                        
Cash and cash equivalents   $ 232,362     $ 223,951     $ 184,072     $ 131,272     $ 170,046  
Investment securities     338,224       327,267       345,114       317,886       319,294  
Loans     2,171,814       2,063,568       2,039,046       2,032,122       1,940,698  
Total interest-earning assets     2,742,400       2,614,786       2,568,232       2,481,280       2,430,038  
Non-earning assets     324,880       317,648       312,154       314,959       314,518  
Total assets   $ 3,067,280     $ 2,932,434     $ 2,880,386     $ 2,796,239     $ 2,744,556  
Interest-bearing deposits   $ 1,844,493     $ 1,832,599     $ 1,813,974     $ 1,733,899     $ 1,680,728  
Short-term borrowings     114,651       120,753       118,118       121,453       111,237  
FHLB advances and other borrowings     185,195       99,499       48,583       54,056       73,517  
Subordinated debt     61,677       61,878       61,835       62,830       22,785  
Trust preferred debentures     37,182       37,094       37,013       37,083       37,075  
Total interest-bearing liabilities     2,243,198       2,151,823       2,079,523       2,009,321       1,925,342  
Noninterest-bearing deposits     522,632       511,019       529,196       509,259       555,287  
Other noninterest-bearing liabilities     33,188       32,671       40,247       45,379       36,591  
Shareholders' equity     268,262       236,921       231,420       232,280       227,336  
Total liabilities and shareholders' equity   $ 3,067,280     $ 2,932,434     $ 2,880,386     $ 2,796,239     $ 2,744,556  
                                         
Yields                                        
Cash and cash equivalents     0.50 %     0.50 %     0.27 %     0.25 %     0.22 %
Investment securities     5.12 %     5.31 %     5.02 %     5.33 %     5.37 %
Loans     5.22 %     4.68 %     5.15 %     4.94 %     5.70 %
Total interest-earning assets     4.81 %     4.40 %     4.79 %     4.74 %     5.27 %
Interest-bearing deposits     0.50 %     0.49 %     0.48 %     0.44 %     0.42 %
Short-term borrowings     0.24 %     0.23 %     0.20 %     0.18 %     0.21 %
FHLB advances and other borrowings     0.56 %     0.55 %     0.87 %     0.81 %     1.27 %
Subordinated debt     6.87 %     6.87 %     6.79 %     6.66 %     7.68 %
Trust preferred debentures     4.95 %     4.80 %     4.60 %     3.96 %     4.83 %
Total interest-bearing liabilities     0.74 %     0.73 %     0.73 %     0.69 %     0.61 %
Net interest margin     4.20 %     3.80 %     4.19 %     4.18 %     4.79 %
                                         

 




                                                   
MIDLAND STATES BANCORP, INC.  
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)  
                                                   
    As of and for the Quarter Ended    
    June 30,    March 31,    December 31,    September 30,    June 30,   
(in thousands, except per share data)   2016   2016   2015   2015   2015  
Asset Quality                                                  
Loans 30-89 days past due   $ 10,453       $ 6,616       $ 10,120       $ 11,079       $   7,143      
Nonperforming loans     18,430         18,787         24,891         24,223           36,048      
Nonperforming assets     21,469         22,312         29,206         30,118           41,388      
Net charge-offs (recoveries)     448         2,542         220         7,748           (578 )    
Loans 30-89 days past due to total loans     0.48   %     0.33   %     0.51   %     0.56   %       0.37   %  
Nonperforming loans to total loans     0.85   %     0.93   %     1.25   %     1.23   %       1.89   %  
Nonperforming assets to total assets     0.71   %     0.77   %     1.01   %     1.06   %       1.50   %  
Allowance for loan losses to total loans     0.68   %     0.72   %     0.80   %     0.77   %       0.85   %  
Allowance for loan losses to                                                   
    nonperforming loans     80.04   %     77.56   %     64.23   %     62.57   %       44.96   %  
Net charge-offs to average loans     0.09   %     0.51   %     0.04   %     1.57   %       (0.14 ) %  
                                                   
Wealth Management                                                  
Trust assets under administration   $ 1,198,044       $ 1,189,693       $ 1,181,128       $ 1,145,056       $   1,183,807      
                                                   
Market Data                                                  
Book value per share   $ 20.53       $ 20.19       $ 19.74       $ 19.68       $   19.42      
Tangible book value per share   $ 17.13       $ 15.71       $ 15.20       $ 15.03       $   14.72      
Shares outstanding at period end     15,402,946         11,804,779         11,797,404         11,760,589           11,759,138      
Weighted average shares outstanding:                                                  
Basic     13,358,289         11,957,381         11,924,072         11,911,414           11,899,919      
Diluted     13,635,074         12,229,293         12,181,664         12,130,529           12,098,476      
                                                   
Capital                                                  
Total capital to risk-weighted assets     13.91   %     11.67   %     11.82   %     11.43   %       11.71   %  
Tier 1 capital to risk-weighted assets     11.23   %     8.48   %     8.62   %     8.19   %       8.32   %  
Tier 1 leverage ratio     9.77   %     7.25   %     7.49   %     7.41   %       7.52   %  
Tier 1 common capital to                                                   
    risk-weighted assets     9.24   %     6.40   %     6.50   %     6.16   %       6.27   %  
Tangible common equity to tangible assets     8.89   %     6.52   %     6.33   %     6.36   %       6.41   %  
                                                   

 




 
MIDLAND STATES BANCORP, INC.  
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES  
                                           
    For the Quarter Ended    
    June 30,    March 31,    December 31,    September 30,    June 30,   
(in thousands, except per share data)   2016   2016   2015   2015   2015  
Adjusted Earnings Reconciliation                                          
Income before income taxes - GAAP   $     10,473       $     7,895       $     10,507       $     5,379       $     9,432      
Adjustments to other income:                                          
Gain on sales of investment securities, net       72             204             33             1             -      
Other-than-temporary impairment                                          
       on investment securities       -             (824 )           -             (299 )           -      
FDIC loss-sharing expense       -             -             (212 )           (57 )           (204 )    
Amortization of FDIC indemnification asset, net       -             -             (39 )           (121 )           (120 )    
Reversal of contingent consideration accrual       350             -             -             -             -      
Other income         -             -             -             12             -      
 Total adjusted other income         422             (620 )           (218 )           (464 )           (324 )    
Adjustments to other expense:                                          
Expenses associated with payoff                                           
       of subordinated debt       511             -             -             -             -      
Integration and acquisition expenses         406             385             214             898             1,910      
 Total adjusted other expense         917             385             214             898             1,910      
Adjusted earnings pre tax       10,968             8,900             10,939             6,741             11,666      
Adjusted earnings tax       3,861             3,133             3,414             2,103             3,640      
Adjusted earnings - non-GAAP   $     7,107       $     5,767       $     7,525       $     4,638       $     8,026      
Adjusted diluted EPS   $     0.52       $     0.47       $     0.61       $     0.38       $     0.66      
Adjusted return on average assets         0.93   %         0.79   %         1.04   %         0.66   %         1.17   %  
Adjusted return on average                                           
  shareholders' equity         10.66   %         9.79   %         12.90   %         7.92   %         14.16   %  
Adjusted return on average                                           
  tangible common equity         13.27   %         12.64   %         16.77   %         10.39   %         18.77   %  
                                           
                                           
Yield on Loans                                          
Reported yield on loans         5.22   %         4.68   %         5.15   %         4.94   %         5.70   %  
Effect of accretion income on acquired loans         (0.85 ) %         (0.30 ) %         (0.78 ) %         (0.41 ) %         (1.13 ) %  
Yield on loans excluding accretion income         4.37   %         4.38   %         4.37   %         4.53   %         4.57   %  
                                           
Net Interest Margin                                          
Reported net interest margin         4.20   %         3.80   %         4.19   %         4.18   %         4.79   %  
Effect of accretion income on acquired loans         (0.68 ) %         (0.25 ) %         (0.63 ) %         (0.35 ) %         (0.91 ) %  
Net interest margin excluding accretion income         3.52   %         3.55   %         3.56   %         3.83   %         3.88   %  
                                           

 




                                           
MIDLAND STATES BANCORP, INC.  
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES  
                                           
                                           
Tangible Common Equity to Tangible Assets Ratio and Tangible Book Value Per Share                            
                                           
    As of     
    June 30,    March 31,    December 31,    September 30,    June 30,   
(in thousands, except per share data)   2016   2016   2015   2015   2015  
                                           
Shareholders' Equity to Tangible Common Equity:                                          
Total shareholders' equity—GAAP   $     316,315       $     238,561       $     233,056       $     231,625       $     228,575      
Adjustments:                                          
  Noncontrolling interest in subsidiaries         (47 )           (175 )           (176 )           (210 )           (204 )    
  Goodwill         (46,519 )           (46,519 )           (46,519 )           (47,102 )           (47,102 )    
  Other intangibles         (5,905 )           (6,424 )           (7,004 )           (7,601 )           (8,199 )    
Tangible common equity   $     263,844       $     185,443       $     179,357       $     176,712       $     173,070      
                                           
Total Assets to Tangible Assets:                                          
Total assets—GAAP         3,021,784             2,898,080             2,884,824             2,832,308             2,753,581      
Adjustments:                                          
  Goodwill         (46,519 )           (46,519 )           (46,519 )           (47,102 )           (47,102 )    
  Other intangibles         (5,905 )           (6,424 )           (7,004 )           (7,601 )           (8,199 )    
Tangible assets   $     2,969,360       $     2,845,137       $     2,831,301       $     2,777,605       $     2,698,280      
                                           
Common Shares Outstanding         15,402,946             11,804,779             11,797,404             11,760,589             11,759,138      
                                           
Tangible Common Equity to Tangible Assets         8.89   %         6.52   %         6.33   %         6.36   %         6.41   %  
Tangible Book Value Per Share   $     17.13       $     15.71       $     15.20       $     15.03       $     14.72      
                                           
                                           
Return on Average Tangible Common Equity (ROATCE)                                    
                                           
    For the Quarter Ended    
    June 30,    March 31,    December 31,    September 30,    June 30,   
(in thousands, except per share data)   2016   2016   2015   2015   2015  
     
Net Income   $     6,789       $     5,119       $     7,695       $     3,445       $     6,653      
                                           
Average total shareholders' equity—GAAP   $     268,262       $     236,921       $     231,420       $     232,287       $     227,336      
Adjustments:                                          
  Noncontrolling interest in subsidiaries         (121 )           (184 )           (204 )           (207 )           (175 )    
  Goodwill         (46,519 )           (46,519 )           (46,997 )           (47,102 )           (47,102 )    
  Other intangibles         (6,184 )           (6,740 )           (7,324 )           (7,917 )           (8,553 )    
Average tangible common equity   $     215,438       $     183,478       $     176,895       $     177,061       $     171,506      
ROATCE         12.67   %         11.22   %         17.26   %         7.72   %         15.56   %  
                                           

 

 

 

CONTACTS:

Jeffrey G. Ludwig, Exec. V.P., Chief Financial Officer, at jludwig@midlandsb.com or (217) 342-7321
Douglas J. Tucker, Sr. V.P., Corporate Counsel, at dtucker@midlandsb.com or (217) 342-7321

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