Press Release

Midland States Bancorp, Inc. Announces 2016 Third Quarter Results

Third Quarter 2016 Summary

  • Net income of $8.1 million, or $0.51 diluted earnings per share

  • Total loans increased $152 million to $2.31 billion at September 30, 2016

  • Average loans increased $96 million, or 17.7% annualized

  • Non-interest income of $14.9 million, or 35.4% of total revenue

  • Return on average assets of 1.03%; Return on average equity of 10.04%

EFFINGHAM, Ill., Oct. 27, 2016 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (NASDAQ:MSBI) (the “Company”) today reported net income of $8.1 million, or $0.51 diluted earnings per share, for the third quarter of 2016, compared with net income of $6.8 million, or $0.50 diluted earnings per share, for the second quarter of 2016, and net income of $3.4 million, or $0.28 diluted earnings per share, for the third quarter of 2015. 

“We delivered a solid quarter driven by well-diversified loan production and improved efficiencies,” said Leon J. Holschbach, President and Chief Executive Officer of the Company.  “As a result of this performance, we were able to generate a higher level of earnings and an improvement in our return on average assets.

“We had excellent growth across the loan portfolio with double-digit annualized increases in the commercial real estate, residential real estate, consumer and equipment leasing portfolios.  We also continued to generate a high level of non-interest income with solid contributions from our residential mortgage banking and wealth management businesses.  This offset a light quarter in the commercial FHA business as we had relatively few loans in the latter stages of the pipeline during the third quarter.

“We continue to see strong loan demand throughout our markets.  As we continue to generate quality balance sheet growth and maintain disciplined expense control, we expect to see a continuation of the positive trends in the business going forward,” said Mr. Holschbach.

Net Interest Income

Net interest income for the third quarter of 2016 was $27.3 million, a decrease of 2.6% from $28.0 million for the second quarter of 2016.  The Company’s net interest income benefits from accretion income associated with purchased loan portfolios.  Accretion income totaled $2.6 million for the third quarter of 2016, compared with $4.9 million for the second quarter of 2016.  The reduction in accretion income offset the impact of higher average loan balances in the third quarter of 2016.

Relative to the third quarter of 2015, net interest income increased $1.8 million due to an increase in average loan balances.

Net Interest Margin

Net interest margin for the third quarter of 2016 was 4.00%, compared to 4.20% for the second quarter of 2016.  The Company’s net interest margin benefits from accretion income on purchased loan portfolios.  Excluding accretion income, net interest margin was 3.66% for the third quarter of 2016, compared with 3.52% for the second quarter of 2016.  The increase in net interest margin excluding accretion income was primarily attributable to a favorable shift in the mix of both earning assets and funding liabilities within the balance sheet.  Average cash balances decreased by $77.6 million and was redeployed into higher yielding loans and investments in the third quarter compared to the second quarter, while at the same time interest bearing liabilities decreased and funding shifted to increased levels of both noninterest bearing deposits and equity.

Relative to the third quarter of 2015, the net interest margin declined from 4.17%, primarily due to lower average yields on loans and investment securities.  Excluding accretion income, net interest margin declined from 3.83%, 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 third quarter of 2016 was $14.9 million, an increase of 6.6% from $14.0 million for the second quarter of 2016.  The increase was primarily attributable to higher residential mortgage banking revenue and the absence of FDIC loss-sharing expense.  This was partially offset by lower commercial FHA revenue.

Commercial FHA revenue for the third quarter of 2016 was $3.3 million, a decrease of 61.8% from $8.5 million in the second quarter of 2016.  The Company originated $73.4 million in rate lock commitments during the third quarter of 2016, compared to $281.2 million in the prior quarter.  The Company also recorded mortgage servicing rights impairment of $1.1 million in the third quarter of 2016.

Residential mortgage banking revenue for the third quarter of 2016 was $5.0 million, an increase from $1.0 million in the second quarter of 2016.  During the second quarter of 2016, the Company recorded mortgage servicing rights impairment of $3.0 million, which substantially reduced the residential mortgage banking revenue recognized in that quarter.

Relative to the third quarter of 2015, noninterest income increased 3.3% from $14.5 million.  The increase was primarily due to higher residential mortgage banking and wealth management revenue, which was partially offset by lower commercial FHA revenue.

Noninterest Expense

Noninterest expense for the third quarter of 2016 was $28.7 million, a decrease of 7.2% from $30.9 million for the second quarter of 2016.  The decrease was primarily driven by lower salaries and benefits expense.  Non-interest expense in the second quarter of 2016 also included a $511,000 write-off of accounting discount related to the early payoff of subordinated debt, while no similar write-off occurred in the third quarter of 2016.

Relative to the third quarter of 2015, noninterest expense increased 3.0% from $27.8 million.  The increase was primarily due to higher salaries and benefits expense resulting from an increase in FTEs over the past 12 months. 

Loan Portfolio

Total loans outstanding were $2.31 billion at September 30, 2016, compared with $2.16 billion at June 30, 2016, and $1.97 billion at September 30, 2015.  The $151.7 million increase in the loan portfolio from June 30, 2016 was driven primarily by a $55.8 million increase in commercial loans, a $26.9 million increase in commercial real estate loans, a $37.8 million increase in residential real estate loans, a $43.1 million increase in consumer loans, and a $5.9 million increase in equipment lease financing loans.  These increases were partially offset by a $17.8 million decrease in construction and land development loans, most of which migrated to permanent financing in the commercial real estate portfolio.

Approximately $73 million of the increase in total loans outstanding at September 30, 2016 compared to June 30, 2016 was related to advances on a warehouse line of credit to a customer that originates government-guaranteed commercial FHA loans.  The advances on this warehouse line of credit are short-term in nature. 

Deposits

Total deposits were $2.42 billion at September 30, 2016, compared with $2.35 billion at June 30, 2016, and $2.30 billion at September 30, 2015.  The increase in total deposits from June 30, 2016 was primarily due to an increase in demand deposits, partially offset by a decrease in time and brokered deposits.  Approximately $101.4 million of the increase in demand deposits during the third quarter of 2016 was attributable to commercial and residential mortgage servicing accounts.  Of this increase, approximately $82.3 million represents new loan origination and modification payments received in the commercial FHA banking business that were remitted to GNMA in October 2016.

Asset Quality

Non-performing loans totaled $29.9 million, or 1.29% of total loans, at September 30, 2016, compared with $18.4 million, or 0.85% of total loans, at June 30, 2016.  The increase in non-performing loans is primarily due to one commercial real estate loan that was classified as a troubled debt restructuring (“TDR”) during the quarter. 

Net charge-offs for the third quarter of 2016 were $585,000, or 0.11% of average loans on an annualized basis.

The Company recorded a provision for loan losses of $1.4 million for the third quarter of 2016, primarily to reflect the growth in the loan portfolio.

The Company’s allowance for loan losses was 0.67% of total loans and 52.0% of non-performing loans at September 30, 2016, compared with 0.68% and 80.0%, respectively, at June 30, 2016.  Including the fair market value discounts recorded in connection with acquired loan portfolios, the allowance for loan losses to total loans ratio was 1.06% at September 30, 2016, compared with 1.13% at June 30, 2016.

Capital

At September 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:

  September 30,
2016
Well Capitalized
Regulatory Requirements
Total capital to risk-weighted assets   13.53 %   10.00 %
Tier 1 capital to risk-weighted assets   10.94 %   8.00 %
Tier 1 leverage ratio   9.82 %   5.00 %
Tier 1 common capital to risk-weighted assets   9.03 %   6.50 %
Tangible common equity to tangible assets   8.44 %   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, October 28, 2016.  During the call, management will review the third quarter results and operational highlights. The call can be accessed via telephone at (877) 516-3531 (passcode: 85446301).  A recorded replay can be accessed through November 3, 2016 by dialing (855) 859-2056; passcode: 85446301.

A slide presentation relating to the third 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 $3.2 billion, and its Midland Wealth Management Group had assets under administration of approximately $1.2 billion as of September 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,” “Yield 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  
    September 30,    June 30,    March 31,    December 31,    September 30, 
(in thousands, except per share data)   2016   2016   2016   2015   2015
Earnings Summary                                        
Net interest income   $   27,265       $ 27,989     $   24,041       $ 26,452     $ 25,437  
Provision for loan losses       1,392         629         1,125         1,052       6,699  
Noninterest income       14,937         14,016         12,618         12,799       14,464  
Noninterest expense       28,663         30,903         27,639         27,692       27,823  
Income before income taxes       12,147         10,473         7,895         10,507       5,379  
Income taxes       4,102         3,683         2,777         2,811       1,928  
Net income       8,045         6,790         5,118         7,696       3,451  
Net income (loss) attributable to noncontrolling interest in subsidiaries       (6 )       1         (1 )       1       6  
Net income attributable to Midland States Bancorp, Inc.   $   8,051       $ 6,789     $   5,119       $ 7,695     $ 3,445  
                                         
Diluted earnings per common share   $   0.51       $ 0.50     $   0.42       $ 0.63     $ 0.28  
Weighted average shares outstanding - diluted       15,858,273         13,635,074         12,229,293         12,181,664       12,130,529  
Return on average assets       1.03   %     0.89 %       0.70   %     1.06 %     0.49 %
Return on average shareholders' equity       10.04   %     10.18 %       8.69   %     13.19 %     5.88 %
Return on average tangible common shareholders' equity       12.01   %     12.67 %       11.22   %     17.26 %     7.72 %
Net interest margin       4.00   %     4.20 %       3.80   %     4.19 %     4.17 %
Efficiency ratio       64.56   %     67.09 %       67.73   %     68.83 %     64.32 %
                                         
Adjusted Earnings Performance Summary                                        
Adjusted earnings   $   8,269       $ 7,107     $   5,767       $ 7,525     $ 4,638  
Adjusted diluted earnings per common share   $   0.52       $ 0.52     $   0.47       $ 0.61     $ 0.38  
Adjusted return on average assets       1.06   %     0.93 %       0.79   %     1.04 %     0.66 %
Adjusted return on average shareholders' equity       10.32   %     10.66 %       9.79   %     12.90 %     7.92 %
Adjusted return on average tangible common shareholders' equity       12.34   %     13.27 %       12.64   %     16.77 %     10.39 %
Net interest margin excluding accretion income       3.66   %     3.52 %       3.55   %     3.56 %     3.83 %
                                         

 

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
 
    For the Quarter Ended
    September 30,    June 30,    March 31,    December 31,    September 30, 
(in thousands, except per share data)   2016   2016   2016   2015   2015
Net interest income:                                      
Total interest income   $   31,186       $   32,115       $   27,967       $   30,300       $   28,949  
Total interest expense       3,921           4,126           3,926           3,848           3,512  
Net interest income       27,265           27,989           24,041           26,452           25,437  
Provision for loan losses       1,392           629           1,125           1,052           6,699  
Net interest income after provision for loan losses       25,873           27,360           22,916           25,400           18,738  
Noninterest income:                                      
Commercial FHA revenue       3,260           8,538           6,562           3,045           5,914  
Residential mortgage banking revenue       4,990           1,037           1,121           3,328           3,490  
Wealth management revenue       1,941           1,870           1,785           1,831           1,808  
Service charges on deposit accounts       1,044           965           907           979           1,022  
Interchange revenue       920           945           964           858           895  
FDIC loss sharing expense       -           (1,608 )         (53 )         (212 )         (57 )
Gain on sales of investment securities, net       39           72           204           33           1  
Other-than-temporary impairment on investment securities       -           -           (824 )         -           (299 )
Other income       2,743           2,197           1,952           2,937           1,690  
Total noninterest income       14,937           14,016           12,618           12,799           14,464  
Noninterest expense:                                      
Salaries and employee benefits       16,568           17,012           15,387           13,725           14,932  
Occupancy and equipment       3,271           3,233           3,310           3,424           3,114  
Data processing       2,586           2,624           2,620           2,546           2,541  
Professional       1,877           1,573           1,701           2,079           2,075  
Amortization of intangible assets       514           519           580           598           597  
Other       3,847           5,942           4,041           5,320           4,564  
Total noninterest expense       28,663           30,903           27,639           27,692           27,823  
Income before income taxes       12,147           10,473           7,895           10,507           5,379  
Income taxes       4,102           3,683           2,777           2,811           1,928  
Net income       8,045           6,790           5,118           7,696           3,451  
Net (loss) income attributable to noncontrolling interest in subsidiaries       (6 )         1           (1 )         1           6  
Net income attributable to Midland States Bancorp, Inc.   $   8,051       $   6,789       $   5,119       $   7,695       $   3,445  
                                       
Basic earnings per common share   $   0.51       $   0.51       $   0.43       $   0.64       $   0.29  
Diluted earnings per common share   $   0.51       $   0.50       $   0.42       $   0.63       $   0.28  
                                       

 

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                                       
    As of
    September 30,    June 30,    March 31,    December 31,    September 30, 
(in thousands)   2016   2016   2016   2015   2015
Assets                                      
Cash and cash equivalents   $   228,030       $   123,366       $   162,416       $   212,475       $   206,664  
Investment securities available-for-sale at fair value       252,212           238,781           232,074           236,627           211,359  
Investment securities held to maturity at amortized cost       82,941           84,756           88,085           87,521           92,011  
Loans       2,312,778           2,161,041           2,016,034           1,995,589           1,972,844  
Allowance for loan losses       (15,559 )         (14,752 )         (14,571 )         (15,988 )         (15,157 )
Total loans, net       2,297,219           2,146,289           2,001,463           1,979,601           1,957,687  
Loans held for sale at fair value       61,363           101,782           103,365           54,413           53,032  
Premises and equipment, net       70,727           72,147           72,421           73,133           73,362  
Other real estate owned       4,828           3,540           4,740           5,472           6,471  
Mortgage servicing rights at lower of cost or market       64,689           62,808           65,486           66,651           65,417  
Intangible assets       5,391           5,905           6,424           7,004           7,601  
Goodwill       46,519           46,519           46,519           46,519           47,102  
Cash surrender value of life insurance policies       74,276           73,665           53,173           52,729           52,271  
Other assets       59,532           62,226           61,914           62,679           59,331  
Total assets   $   3,247,727       $   3,021,784       $   2,898,080       $   2,884,824       $   2,832,308  
                                       
Liabilities and Shareholders' Equity                                      
Noninterest bearing deposits   $   629,113       $   528,966       $   546,664       $   543,401       $   512,632  
Interest bearing deposits       1,790,919           1,825,586           1,843,046           1,824,247           1,791,846  
Total deposits       2,420,032           2,354,552           2,389,710           2,367,648           2,304,478  
Short-term borrowings       138,289           125,014           101,649           107,538           108,823  
FHLB advances and other borrowings       237,543           97,588           40,133           40,178           50,225  
Subordinated debt       54,484           54,459           61,903           61,859           61,814  
Trust preferred debentures       37,316           37,229           37,142           37,057           36,973  
Other liabilities       38,273           36,627           28,982           37,488           38,370  
Total liabilities       2,925,937           2,705,469           2,659,519           2,651,768           2,600,683  
Midland States Bancorp, Inc. shareholders’ equity       321,749           316,268           238,386           232,880           231,415  
Noncontrolling interest in subsidiaries       41           47           175           176           210  
Total shareholders’ equity       321,790           316,315           238,561           233,056           231,625  
Total liabilities and shareholders’ equity   $   3,247,727       $   3,021,784       $   2,898,080       $   2,884,824       $   2,832,308  
                                       

 

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                                       
    As of
    September 30,    June 30,    March 31,    December 31,    September 30, 
(in thousands)   2016   2016   2016   2015   2015
Loan Portfolio                                      
Commercial loans   $ 545,069     $ 489,228     $ 484,618     $ 499,573     $ 521,983
Commercial real estate loans     956,298       929,399       897,099       876,784       866,027
Construction and land development loans     163,900       181,667       159,507       150,266       131,083
Residential real estate loans     216,935       179,184       158,221       163,224       168,129
Consumer loans     248,131       205,060       158,938       161,512       157,521
Lease financing loans     182,445       176,503       157,651       144,230       128,101
Total loans   $ 2,312,778     $ 2,161,041     $ 2,016,034     $ 1,995,589     $ 1,972,844
                                       
                                       
Deposit Portfolio                                      
Noninterest-bearing demand deposits   $ 629,113     $ 528,966     $ 546,664     $ 543,401     $ 512,632
NOW accounts     658,021       627,003       612,475       621,925       623,494
Money market accounts     366,193       374,537       415,130       377,654       350,398
Savings accounts     162,742       164,792       163,163       155,778       154,632
Time deposits     420,779       431,173       433,386       446,621       426,762
Brokered deposits     183,184       228,081       218,892       222,269       236,560
Total deposits   $ 2,420,032     $ 2,354,552     $ 2,389,710     $ 2,367,648     $ 2,304,478
                                       

 

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                                         
    For the Quarter Ended  
    September 30,    June 30,    March 31,    December 31,    September 30, 
(in thousands)   2016   2016   2016   2015   2015
Average Balance Sheets                                        
Cash and cash equivalents   $ 154,764     $ 232,362     $ 223,951     $ 184,072     $ 131,272  
Investment securities     348,265       338,224       327,267       345,114       317,886  
Loans     2,268,178       2,171,814       2,063,568       2,039,046       2,032,122  
Total interest-earning assets     2,771,207       2,742,400       2,614,786       2,568,232       2,481,280  
Non-earning assets     329,504       324,880       317,648       312,154       314,959  
Total assets   $ 3,100,711     $ 3,067,280     $ 2,932,434     $ 2,880,386     $ 2,796,239  
Interest-bearing deposits   $ 1,803,189     $ 1,844,493     $ 1,832,599     $ 1,813,974     $ 1,733,899  
Short-term borrowings     134,052       114,651       120,753       118,118       121,453  
FHLB advances and other borrowings     165,774       185,195       99,499       48,583       54,056  
Subordinated debt     54,470       61,677       61,878       61,835       62,830  
Trust preferred debentures     37,266       37,182       37,094       37,013       37,083  
Total interest-bearing liabilities     2,194,751       2,243,198       2,151,823       2,079,523       2,009,321  
Noninterest-bearing deposits     550,816       522,632       511,019       529,196       509,259  
Other noninterest-bearing liabilities     36,235       33,188       32,671       40,247       45,379  
Shareholders' equity     318,909       268,262       236,921       231,420       232,280  
Total liabilities and shareholders' equity   $ 3,100,711     $ 3,067,280     $ 2,932,434     $ 2,880,386     $ 2,796,239  
                                         
Yields                                        
Cash and cash equivalents     0.50 %     0.50 %     0.50 %     0.27 %     0.24 %
Investment securities     4.93 %     5.12 %     5.31 %     5.02 %     5.33 %
Loans     4.79 %     5.22 %     4.68 %     5.15 %     4.94 %
Total interest-earning assets     4.57 %     4.81 %     4.40 %     4.79 %     4.73 %
Interest-bearing deposits     0.48 %     0.50 %     0.49 %     0.48 %     0.44 %
Short-term borrowings     0.24 %     0.24 %     0.23 %     0.20 %     0.18 %
FHLB advances and other borrowings     0.73 %     0.56 %     0.55 %     0.87 %     0.81 %
Subordinated debt     6.38 %     6.87 %     6.87 %     6.79 %     6.76 %
Trust preferred debentures     5.03 %     4.95 %     4.80 %     4.60 %     3.97 %
Total interest-bearing liabilities     0.71 %     0.74 %     0.73 %     0.73 %     0.69 %
Net interest margin     4.00 %     4.20 %     3.80 %     4.19 %     4.17 %
                                         

 

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                                         
    As of and for the Quarter Ended  
    September 30,    June 30,    March 31,    December 31,    September 30, 
(in thousands, except per share data)   2016   2016   2016   2015   2015
Asset Quality                                        
Loans 30-89 days past due   $ 10,318     $ 10,453     $ 6,616     $ 10,120     $ 11,079  
Nonperforming loans     29,926       18,430       18,787       24,891       24,223  
Nonperforming assets     34,304       21,469       22,312       29,206       30,118  
Net charge-offs     585       448       2,542       220       7,748  
Loans 30-89 days past due to total loans     0.45 %     0.48 %     0.33 %     0.51 %     0.56 %
Nonperforming loans to total loans     1.29 %     0.85 %     0.93 %     1.25 %     1.23 %
Nonperforming assets to total assets     1.06 %     0.71 %     0.77 %     1.01 %     1.06 %
Allowance for loan losses to total loans     0.67 %     0.68 %     0.72 %     0.80 %     0.77 %
Allowance for loan losses to nonperforming loans     51.99 %     80.04 %     77.56 %     64.23 %     62.57 %
Net charge-offs to average loans     0.11 %     0.09 %     0.51 %     0.04 %     1.57 %
                                         
Wealth Management                                        
Trust assets under administration   $ 1,235,132     $ 1,198,044     $ 1,189,693     $ 1,181,128     $ 1,145,056  
                                         
Market Data                                        
Book value per share at period end   $ 20.89     $ 20.53     $ 20.19     $ 19.74     $ 19.68  
Tangible book value per share at period end   $ 17.52     $ 17.13     $ 15.71     $ 15.20     $ 15.03  
Market price at period end   $ 25.34     $ 21.69     $ N/A     $ N/A     $ N/A  
Shares outstanding at period end     15,404,423       15,402,946       11,804,779       11,797,404       11,760,589  
Weighted average shares outstanding:                                        
Basic     15,578,703       13,358,289       11,957,381       11,924,072       11,911,414  
Diluted     15,858,273       13,635,074       12,229,293       12,181,664       12,130,529  
                                         
Capital                                        
Total capital to risk-weighted assets     13.53 %     13.91 %     11.67 %     11.82 %     11.43 %
Tier 1 capital to risk-weighted assets     10.94 %     11.23 %     8.48 %     8.62 %     8.19 %
Tier 1 leverage ratio     9.82 %     9.77 %     7.25 %     7.49 %     7.41 %
Tier 1 common capital to risk-weighted assets     9.03 %     9.24 %     6.40 %     6.50 %     6.16 %
Tangible common equity to tangible assets     8.44 %     8.89 %     6.52 %     6.33 %     6.36 %
                                         

 

MIDLAND STATES BANCORP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
                                         
    For the Quarter Ended  
    September 30,    June 30,    March 31,    December 31,    September 30, 
(in thousands, except per share data)   2016   2016   2016   2015   2015
Adjusted Earnings Reconciliation                                        
Income before income taxes - GAAP   $   12,147       $   10,473       $   7,895       $   10,507       $   5,379    
Adjustments to other income:                                        
Gain on sales of investment securities, net     39           72           204           33           1    
Other than-temporary-impairment on investment securities     -           -           (824 )         -           (299 )  
FDIC loss-sharing expense     -           -           -           (212 )         (57 )  
Amortization of FDIC indemnification asset, net     -           -           -           (39 )         (121 )  
Reversal of contingent consideration accrual     -           350           -           -           -    
Other income       -           -           -           -           12    
Total adjusted other income       39           422           (620 )         (218 )         (464 )  
Adjustments to other expense:                                        
Expenses associated with payoff of subordinated debt     -           511           -           -           -    
Integration and acquisition expenses       352           406           385           214           898    
Total adjusted other expense       352           917           385           214           898    
Adjusted earnings pre tax     12,460           10,968           8,900           10,939           6,741    
Adjusted earnings tax     4,191           3,861           3,133           3,414           2,103    
Adjusted earnings - non-GAAP   $   8,269       $   7,107       $   5,767       $   7,525       $   4,638    
Adjusted diluted EPS   $   0.52       $   0.52       $   0.47       $   0.61       $   0.38    
Adjusted return on average assets       1.06   %       0.93   %       0.79   %       1.04   %       0.66   %
Adjusted return on average shareholders' equity       10.32   %       10.66   %       9.79   %       12.90   %       7.92   %
Adjusted return on average tangible common equity       12.34   %       13.27   %       12.64   %       16.77   %       10.39   %
                                         
                                         
Yield on Loans                                        
Reported yield on loans       4.79   %       5.22   %       4.68   %       5.15   %       4.94   %
Effect of accretion income on acquired loans       (0.41 ) %       (0.85 ) %       (0.30 ) %       (0.78 ) %       (0.41 ) %
Yield on loans excluding accretion income       4.38   %       4.37   %       4.38   %       4.37   %       4.53   %
                                         
Net Interest Margin                                        
Reported net interest margin       4.00   %       4.20   %       3.80   %       4.19   %       4.17   %
Effect of accretion income on acquired loans       (0.34 ) %       (0.68 ) %       (0.25 ) %       (0.63 ) %       (0.34 ) %
Net interest margin excluding accretion income       3.66   %       3.52   %       3.55   %       3.56   %       3.83   %
                                         

 

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   
    September 30,    June 30,    March 31,    December 31,    September 30, 
(in thousands, except per share data)   2016   2016   2016   2015   2015
                                         
Shareholders' Equity to Tangible Common Equity                                        
Total shareholders' equity—GAAP   $   321,790       $   316,315       $   238,561       $   233,056       $   231,625    
Adjustments:                                        
Noncontrolling interest in subsidiaries       (41 )         (47 )         (175 )         (176 )         (210 )  
Goodwill       (46,519 )         (46,519 )         (46,519 )         (46,519 )         (47,102 )  
Other intangibles       (5,391 )         (5,905 )         (6,424 )         (7,004 )         (7,601 )  
Tangible common equity   $   269,839       $   263,844       $   185,443       $   179,357       $   176,712    
                                         
Total Assets to Tangible Assets:                                        
Total assets—GAAP       3,247,727           3,021,784           2,898,080           2,884,824           2,832,308    
Adjustments:                                        
Goodwill       (46,519 )         (46,519 )         (46,519 )         (46,519 )         (47,102 )  
Other intangibles       (5,391 )         (5,905 )         (6,424 )         (7,004 )         (7,601 )  
Tangible assets   $   3,195,817       $   2,969,360       $   2,845,137       $   2,831,301       $   2,777,605    
                                         
Common Shares Outstanding       15,404,423           15,402,946           11,804,779           11,797,404           11,760,589    
                                         
Tangible Common Equity to Tangible Assets       8.44   %       8.89   %       6.52   %       6.33   %       6.36   %
Tangible Book Value Per Share   $   17.52       $   17.13       $   15.71       $   15.20       $   15.03    
                                         
                                         
Return on Average Tangible Common Equity (ROATCE)                                  
       
    As of   
    September 30,    June 30,    March 31,    December 31,    September 30, 
(in thousands)   2016   2016   2016   2015   2015
                                         
Net Income   $   8,051       $   6,789       $   5,119       $   7,695       $   3,445    
                                         
Average total shareholders' equity—GAAP   $   318,909       $   268,262       $   236,921       $   231,420       $   232,287    
Adjustments:                                        
Noncontrolling interest in subsidiaries       (49 )         (121 )         (184 )         (204 )         (207 )  
Goodwill       (46,519 )         (46,519 )         (46,519 )         (46,997 )         (47,102 )  
Other intangibles       (5,656 )         (6,184 )         (6,740 )         (7,324 )         (7,917 )  
Average tangible common equity   $   266,685       $   215,438       $   183,478       $   176,895       $   177,061    
ROATCE       12.01   %       12.67   %       11.22   %       17.26   %       7.72   %
                                         


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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