UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM
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CURRENT REPORT
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On October 28, 2021, Midland States Bancorp, Inc. (the “Company”) issued a press release announcing its financial results for the third quarter of 2021. The press release is attached as Exhibit 99.1.
On October 28, 2021, the Company made available on its website a slide presentation regarding the Company's third quarter 2021 financial results, which will be used as part of a publicly accessible conference call on October 29, 2021. The slide presentation is attached as Exhibit 99.2.
The information in this Form 8-K and the attached exhibits shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in any such filing.
(d) Exhibits.
| Exhibit No. | Description | |||
| 99.1 | Press Release of Midland States Bancorp, Inc., dated October 28, 2021 | |||
| 99.1 | Slide Presentation of Midland States Bancorp, Inc. regarding third quarter 2021 financial results | |||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Midland States Bancorp, Inc. | ||
| Date: October 28, 2021 | By: | /s/ Douglas J. Tucker |
| Douglas J. Tucker | ||
| Senior Vice President and Corporate Counsel | ||
EXHIBIT 99.1
Midland States Bancorp, Inc. Announces 2021 Third Quarter Results
Summary
- Net income of $19.5 million, or $0.86 diluted earnings per share
- Total loans increased 8.2% annualized, excluding commercial FHA lines and PPP loans
- Non-performing loans declined 11.0% from end of prior quarter
- Net interest margin increased 5 bps from prior quarter to 3.34%
- Efficiency ratio improved to 58.78% from 60.19% in prior quarter
- Book value and tangible book value per share increased 2.3% and 3.4%, respectively
EFFINGHAM, Ill., Oct. 28, 2021 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (Nasdaq: MSBI) (the “Company”) today reported net income of $19.5 million, or $0.86 diluted earnings per share, for the third quarter of 2021, which included a $3.0 million impairment charge on commercial mortgage servicing rights (“MSRs”). This compares to net income of $20.1 million, or $0.88 diluted earnings per share, for the second quarter of 2021, which included a $6.8 million tax benefit related to the settlement of a prior tax issue, $3.6 million in professional fees related to the settlement, and a $3.7 million charge related to the prepayment of a longer-term FHLB advance. This also compares to net income of $86 thousand, or $0.00 diluted earnings per share, for the third quarter of 2020, which included $13.9 million of charges primarily related to the Company’s branch and facilities optimization plan.
Jeffrey G. Ludwig, President and Chief Executive Officer of the Company, said, “We delivered another strong quarter driven by positive trends across most areas of our operations. The contribution of new additions to our commercial banking team and increasing demand helped drive another quarter of solid loan growth. We are also seeing improved asset quality, net interest margin expansion as a result of the elimination of higher cost funding sources, and growth in wealth management revenue following our acquisition of ATG Trust Company earlier this year. The higher level of revenue we are generating is driving further improvement in operating leverage and an increase in pre-provision, pre-tax income.
“We expect to see a continuation of these positive trends in the fourth quarter. We are benefitting from our efforts to increase our presence in higher growth markets in Northern Illinois and St. Louis, which is resulting in the consistent addition of full banking relationships with new commercial clients. Our loan and deposit pipelines remain healthy, which should lead to continued quality balance sheet growth that we expect to result in a higher level of net interest income, additional operating leverage, and further improvement in our level of profitability,” said Mr. Ludwig.
Adjusted Earnings
Financial results for the second quarter of 2021 were impacted by a $6.8 million tax benefit related to the settlement of a prior tax issue, $3.8 million of integration and acquisition expenses inclusive of the $3.6 million in professional fees related to the settlement, and a $3.7 million charge related to the prepayment of a longer-term FHLB advance. Excluding these amounts and certain other income and expense, adjusted earnings were $19.8 million, or $0.86 diluted earnings per share, for the second quarter of 2021.
Financial results for the third quarter of 2020 were impacted by $13.9 million in charges primarily related to the branch and facilities optimization plan (integration and acquisition expenses), $1.7 million in gains on sales of investment securities, and a $0.2 million loss on residential MSRs held-for-sale. Excluding these amounts and certain other income and expenses, adjusted earnings were $12.0 million, or $0.52 diluted earnings per share, for the third quarter of 2020.
A reconciliation of adjusted earnings to net income according to accounting principles generally accepted in the United States (“GAAP”) is provided in the financial tables at the end of this press release.
Net Interest Margin
Net interest margin for the third quarter of 2021 was 3.34%, compared to 3.29% for the second quarter of 2021. The Company’s net interest margin benefits from accretion income on purchased loan portfolios, which contributed 7 and 9 basis points to net interest margin in the third and second quarters of 2021, respectively. Excluding the impact of accretion income, net interest margin increased 7 basis points from the second quarter of 2021, due primarily to a reduction in the cost of funds.
Relative to the third quarter of 2020, net interest margin increased from 3.33%. Accretion income on purchased loan portfolios contributed 14 basis points to net interest margin in the third quarter of 2020. Excluding the impact of accretion income, net interest margin increased 8 basis points from the third quarter of 2020, primarily due to a reduction in the cost of funds.
Net Interest Income
Net interest income for the third quarter of 2021 was $51.4 million, an increase of 2.6% from $50.1 million for the second quarter of 2021. Excluding accretion income, net interest income increased $1.6 million from the prior quarter, which was primarily due to a lower cost of funds. Accretion income associated with purchased loan portfolios totaled $1.0 million for the third quarter of 2021, compared with $1.3 million for the second quarter of 2021. PPP loan income totaled $2.4 million, including net loan origination fees of $2.1 million, in the third quarter of 2021, compared to $2.4 million, including net loan origination fees of $1.9 million, in the second quarter of 2021.
Relative to the third quarter of 2020, net interest income increased $1.4 million, or 2.8%. Accretion income for the third quarter of 2020 was $2.1 million. Excluding the impact of accretion income, net interest income increased primarily due to a higher average balance of interest-earning assets and a significant decline in the cost of funds.
Noninterest Income
Noninterest income for the third quarter of 2021 was $15.1 million, a decrease of 13.1% from $17.4 million for the second quarter of 2021. Impairment on commercial MSRs impacted noninterest income by $3.0 million and $1.1 million in the third quarter of 2021 and second quarter of 2021, respectively. Excluding the impairments, noninterest income decreased 2.1% primarily due to gains on the sale of other real estate owned that were recognized in the prior quarter.
Relative to the third quarter of 2020, noninterest income decreased 20.0% from $18.9 million. The decrease was primarily attributable to a larger impairment on commercial MSRs, lower residential mortgage banking revenue, and lower gains on sales of investment securities, partially offset by higher wealth management revenue.
Wealth management revenue for the third quarter of 2021 was $7.2 million, an increase of 9.9% from the second quarter of 2021, primarily due to the full quarter contribution of ATG Trust Company following its acquisition at the beginning of June. Compared to the third quarter of 2020, wealth management revenue increased 29.1%, primarily due to the increase in assets under administration over the past year and the acquisition of ATG Trust Company.
Noninterest Expense
Noninterest expense for the third quarter of 2021 was $41.3 million, compared with $48.9 million in the second quarter of 2021, which included $3.6 million in professional fees related to the settlement of the prior tax issue and $3.7 million in FHLB advance prepayment fees. Excluding the professional fees related to the settlement of the prior tax issue, FHLB advance prepayment fees, integration and acquisition expenses, and losses on residential MSRs held-for-sale, noninterest expense decreased by $0.3 million.
Relative to the third quarter of 2020, noninterest expense decreased 23.4% from $53.9 million, which included $13.9 million in charges primarily related to the branch and facilities optimization plan (integration and acquisition expenses), and a $0.2 million loss on residential MSRs held-for-sale. Excluding the integration and acquisition expenses and losses on residential MSRs held-for-sale, noninterest expense increased $1.2 million, primarily due to higher salaries and employee benefits expense.
Loan Portfolio
Total loans outstanding were $4.92 billion at September 30, 2021, compared with $4.84 billion at June 30, 2021 and $4.94 billion at September 30, 2020. The increase in total loans from June 30, 2021 was primarily attributable to higher balances of commercial, commercial real estate, and consumer loans, partially offset by forgiveness of PPP loans and runoff in the residential real estate portfolio resulting from refinancings.
Equipment finance balances increased $27.5 million from June 30, 2021 to $899.1 million at September 30, 2021, which are booked within the commercial loans and leases portfolio.
Compared to loan balances at September 30, 2020, growth in equipment finance balances, commercial real estate, and consumer loans was offset by declines in residential real estate loans and PPP loans held in the commercial portfolio.
Deposits
Total deposits were $5.60 billion at September 30, 2021, compared with $5.20 billion at June 30, 2021, and $5.03 billion at September 30, 2020. The increase in total deposits from the end of the prior quarter was primarily attributable to an increase in commercial FHA servicing deposits and inflows of other commercial deposits.
Asset Quality
Nonperforming loans totaled $54.6 million, or 1.11% of total loans, at September 30, 2021, compared with $61.4 million, or 1.27% of total loans, at June 30, 2021. The decrease in nonperforming loans was primarily attributable to the disposition of certain loans combined with minimal inflow during the third quarter of 2021. At September 30, 2020, nonperforming loans totaled $67.4 million, or 1.36% of total loans.
Net charge-offs for the third quarter of 2021 were $3.0 million, or 0.25% of average loans on an annualized basis, compared to net charge-offs of $4.0 million, or 0.33% of average loans on an annualized basis, for the second quarter of 2021 and $5.3 million, or 0.44% of average loans on an annualized basis, for the third quarter of 2020.
The Company recorded a negative provision for credit losses of $0.2 million for the third quarter of 2021. No provision for credit losses on loans was recorded due to general improvement in asset quality and economic forecasts, while a negative provision of $0.2 million was recorded for credit losses on available-for-sale securities.
The Company’s allowance for credit losses on loans was 1.13% of total loans and 101.9% of nonperforming loans at September 30, 2021, compared with 1.21% of total loans and 95.6% of nonperforming loans at June 30, 2021. Approximately 96% of the allowance for credit losses on loans at September 30, 2021 was allocated to general reserves.
Capital
At September 30, 2021, Midland States Bank and the Company exceeded all regulatory capital requirements under Basel III, and Midland States Bank met the qualifications to be a ‘‘well-capitalized’’ financial institution, as summarized in the following table:
| Bank Level Ratios as of Sep. 30, 2021 | Consolidated Ratios as of Sep. 30, 2021 | Minimum Regulatory Requirements (2) | ||||
| Total capital to risk-weighted assets | 12.03% | 13.10% | 10.50% | |||
| Tier 1 capital to risk-weighted assets | 11.17% | 9.73% | 8.50% | |||
| Tier 1 leverage ratio | 9.38% | 8.16% | 4.00% | |||
| Common equity Tier 1 capital | 11.17% | 8.55% | 7.00% | |||
| Tangible common equity to tangible assets (1) | NA | 6.80% | NA | |||
(1) A non-GAAP financial measure. Refer to page 15 for a reconciliation to the comparable GAAP financial measure.
(2) Includes the capital conservation buffer of 2.5%.
Stock Repurchase Program
During the third quarter of 2021, the Company repurchased 210,177 shares of its common stock at a weighted average price of $24.93 under its stock repurchase program. On September 7, 2021, the Company announced that its Board of Directors approved modifications to the previously announced stock repurchase program, which increased the aggregate repurchase authority to $75 million from $50 million and extended the expiration date of the program to December 31, 2022. As of September 30, 2021, the Company had $24.9 million remaining under the current stock repurchase authorization.
Conference Call, Webcast and Slide Presentation
The Company will host a conference call and webcast at 7:30 a.m. Central Time on Friday, October 29, 2021, to discuss its financial results. The call can be accessed via telephone at (877) 516-3531; conference ID: 6697900. A recorded replay can be accessed through November 5, 2021, by dialing (855) 859-2056; conference ID: 6697900.
A slide presentation relating to the third quarter 2021 financial results will be accessible prior to the scheduled conference call. This earnings release should be read together with the slide presentation, which contains important information related to the impact of COVID-19. The slide presentation and webcast of the conference call can be accessed on the Webcasts and Presentations page of the Company’s investor relations website at investors.midlandsb.com under the “News and Events” tab.
About Midland States Bancorp, Inc.
Midland States Bancorp, Inc. is a community-based financial holding company headquartered in Effingham, Illinois, and is the sole shareholder of Midland States Bank. As of September 30, 2021, the Company had total assets of approximately $7.09 billion, and its Wealth Management Group had assets under administration of approximately $4.06 billion. Midland 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 https://www.midlandsb.com/ or https://www.linkedin.com/company/midland-states-bank.
Non-GAAP Financial Measures
Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with GAAP. These non-GAAP financial measures include “Adjusted Earnings,” “Adjusted Diluted Earnings Per Common Share,” “Adjusted Pre-Tax, Pre-Provision Earnings,” “Adjusted Return on Average Assets,” “Adjusted Return on Average Shareholders’ Equity,” “Adjusted Return on Average Tangible Common Equity,” “Adjusted Pre-Tax, Pre-Provision Return on Average Assets,” “Efficiency Ratio,” “Tangible Common Equity to Tangible Assets,” “Tangible Book Value Per Share” and “Return on Average Tangible Common Equity.” The Company believes these non-GAAP financial measures provide both management and investors a more complete understanding of the Company’s funding profile and profitability. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures. Not all companies use the same calculation of these measures; therefore, this presentation may not be comparable to other similarly titled measures as presented by other companies.
Forward-Looking Statements
Readers should note that in addition to the historical information contained herein, this press release includes "forward-looking statements" within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including but not limited to statements about the Company’s plans, objectives, future performance, goals and future earnings levels. These statements are subject to many risks and uncertainties, including changes in interest rates and other general economic, business and political conditions, including the effects of the COVID-19 pandemic and its potential effects on the economic environment, our customers and our operations, as well as any changes to federal, state and local government laws, regulations and orders in connection with the pandemic; changes in the financial markets; changes in business plans as circumstances warrant; risks relating to acquisitions; developments and uncertainty related to the future use and availability of some reference rates, such as the London Inter-Bank Offered Rate, as well as other alternative reference rates, and the adoption of a substitute; changes to U.S. tax laws, regulations and guidance; and other risks detailed from time to time in filings made by the Company with the Securities and Exchange Commission. Readers should note that the forward-looking statements included in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "will," "propose," "may," "plan," "seek," "expect," "intend," "estimate," "anticipate," "believe," "continue," or similar terminology. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.
CONTACTS:
Jeffrey G. Ludwig, President and CEO, at jludwig@midlandsb.com or (217) 342-7321
Eric T. Lemke, Chief Financial Officer, at elemke@midlandsb.com or (217) 342-7321
Douglas J. Tucker, SVP and Corporate Counsel, at dtucker@midlandsb.com or (217) 342-7321
| MIDLAND STATES BANCORP, INC. | |||||||||||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) | |||||||||||||||||||||||
| For the Quarter Ended | |||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||
| (dollars in thousands, except per share data) | 2021 | 2021 | 2021 | 2020 | 2020 | ||||||||||||||||||
| Earnings Summary | |||||||||||||||||||||||
| Net interest income | $ | 51,396 | $ | 50,110 | $ | 51,868 | $ | 53,516 | $ | 49,980 | |||||||||||||
| Provision for credit losses | (184 | ) | (455 | ) | 3,565 | 10,058 | 11,728 | ||||||||||||||||
| Noninterest income | 15,143 | 17,417 | 14,816 | 14,336 | 18,919 | ||||||||||||||||||
| Noninterest expense | 41,292 | 48,941 | 39,079 | 47,048 | 53,901 | ||||||||||||||||||
| Income before income taxes | 25,431 | 19,041 | 24,040 | 10,746 | 3,270 | ||||||||||||||||||
| Income taxes | 5,883 | (1,083 | ) | 5,502 | 2,413 | 3,184 | |||||||||||||||||
| Net income | $ | 19,548 | $ | 20,124 | $ | 18,538 | $ | 8,333 | $ | 86 | |||||||||||||
| Diluted earnings per common share | $ | 0.86 | $ | 0.88 | $ | 0.81 | $ | 0.36 | $ | - | |||||||||||||
| Weighted average shares outstanding - diluted | 22,577,880 | 22,677,515 | 22,578,553 | 22,656,343 | 22,937,837 | ||||||||||||||||||
| Return on average assets | 1.15 | % | 1.20 | % | 1.11 | % | 0.49 | % | 0.01 | % | |||||||||||||
| Return on average shareholders' equity | 11.90 | % | 12.59 | % | 12.04 | % | 5.32 | % | 0.05 | % | |||||||||||||
| Return on average tangible common equity (1) | 16.76 | % | 17.85 | % | 17.28 | % | 7.68 | % | 0.08 | % | |||||||||||||
| Net interest margin | 3.34 | % | 3.29 | % | 3.45 | % | 3.47 | % | 3.33 | % | |||||||||||||
| Efficiency ratio (1) | 58.78 | % | 60.19 | % | 56.88 | % | 58.55 | % | 57.74 | % | |||||||||||||
| Adjusted Earnings Performance Summary (1) | |||||||||||||||||||||||
| Adjusted earnings | $ | 19,616 | $ | 19,755 | $ | 18,662 | $ | 12,471 | $ | 12,023 | |||||||||||||
| Adjusted diluted earnings per common share | $ | 0.86 | $ | 0.86 | $ | 0.82 | $ | 0.54 | $ | 0.52 | |||||||||||||
| Adjusted return on average assets | 1.15 | % | 1.17 | % | 1.12 | % | 0.73 | % | 0.72 | % | |||||||||||||
| Adjusted return on average shareholders' equity | 11.94 | % | 12.36 | % | 12.12 | % | 7.97 | % | 7.56 | % | |||||||||||||
| Adjusted return on average tangible common equity | 16.82 | % | 17.52 | % | 17.39 | % | 11.50 | % | 11.04 | % | |||||||||||||
| Adjusted pre-tax, pre-provision earnings | $ | 28,379 | $ | 26,967 | $ | 29,051 | $ | 28,855 | $ | 28,751 | |||||||||||||
| Adjusted pre-tax, pre-provision return on average assets | 1.67 | % | 1.60 | % | 1.75 | % | 1.69 | % | 1.72 | % | |||||||||||||
| (1) Non-GAAP financial measures. Refer to pages 13 - 15 for a reconciliation to the comparable GAAP financial measures. | |||||||||||||||||||||||
| MIDLAND STATES BANCORP, INC. | |||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) | |||||||||||||||||||||||||
| For the Quarter Ended | |||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||
| (in thousands, except per share data) | 2021 | 2021 | 2021 | 2020 | 2020 | ||||||||||||||||||||
| Net interest income: | |||||||||||||||||||||||||
| Interest income | $ | 58,490 | $ | 58,397 | $ | 60,503 | $ | 62,712 | $ | 60,314 | |||||||||||||||
| Interest expense | 7,094 | 8,287 | 8,635 | 9,196 | 10,334 | ||||||||||||||||||||
| Net interest income | 51,396 | 50,110 | 51,868 | 53,516 | 49,980 | ||||||||||||||||||||
| Provision for credit losses: | |||||||||||||||||||||||||
| Provision for credit losses on loans | - | - | 3,950 | 10,000 | 10,970 | ||||||||||||||||||||
| Provision for credit losses on unfunded commitments | - | (265 | ) | (535 | ) | - | 577 | ||||||||||||||||||
| Provision for other credit losses | (184 | ) | (190 | ) | 150 | 58 | 181 | ||||||||||||||||||
| Total provision for credit losses | (184 | ) | (455 | ) | 3,565 | 10,058 | 11,728 | ||||||||||||||||||
| Net interest income after provision for credit losses | 51,580 | 50,565 | 48,303 | 43,458 | 38,252 | ||||||||||||||||||||
| Noninterest income: | |||||||||||||||||||||||||
| Wealth management revenue | 7,175 | 6,529 | 5,931 | 5,868 | 5,559 | ||||||||||||||||||||
| Commercial FHA revenue | 411 | 342 | 292 | 400 | 926 | ||||||||||||||||||||
| Residential mortgage banking revenue | 1,287 | 1,562 | 1,574 | 2,285 | 3,049 | ||||||||||||||||||||
| Service charges on deposit accounts | 2,268 | 1,916 | 1,826 | 2,149 | 2,092 | ||||||||||||||||||||
| Interchange revenue | 3,651 | 3,797 | 3,375 | 3,137 | 3,283 | ||||||||||||||||||||
| Gain on sales of investment securities, net | 160 | 377 | - | - | 1,721 | ||||||||||||||||||||
| Impairment on commercial mortgage servicing rights | (3,037 | ) | (1,148 | ) | (1,275 | ) | (2,344 | ) | (1,418 | ) | |||||||||||||||
| Company-owned life insurance | 869 | 863 | 860 | 893 | 897 | ||||||||||||||||||||
| Other income | 2,359 | 3,179 | 2,233 | 1,948 | 2,810 | ||||||||||||||||||||
| Total noninterest income | 15,143 | 17,417 | 14,816 | 14,336 | 18,919 | ||||||||||||||||||||
| Noninterest expense: | |||||||||||||||||||||||||
| Salaries and employee benefits | 22,175 | 22,071 | 20,528 | 22,636 | 21,118 | ||||||||||||||||||||
| Occupancy and equipment | 3,701 | 3,796 | 3,940 | 3,531 | 4,866 | ||||||||||||||||||||
| Data processing | 6,495 | 6,288 | 5,993 | 5,987 | 5,721 | ||||||||||||||||||||
| Professional | 1,738 | 5,549 | 2,185 | 1,912 | 1,861 | ||||||||||||||||||||
| Amortization of intangible assets | 1,445 | 1,470 | 1,515 | 1,556 | 1,557 | ||||||||||||||||||||
| Loss on mortgage servicing rights held for sale | 79 | 143 | - | 617 | 188 | ||||||||||||||||||||
| Impairment related to facilities optimization | - | - | - | (10 | ) | 12,651 | |||||||||||||||||||
| FHLB advances prepayment fees | - | 3,669 | 8 | 4,872 | - | ||||||||||||||||||||
| Other expense | 5,659 | 5,955 | 4,910 | 5,947 | 5,939 | ||||||||||||||||||||
| Total noninterest expense | 41,292 | 48,941 | 39,079 | 47,048 | 53,901 | ||||||||||||||||||||
| Income before income taxes | 25,431 | 19,041 | 24,040 | 10,746 | 3,270 | ||||||||||||||||||||
| Income taxes | 5,883 | (1,083 | ) | 5,502 | 2,413 | 3,184 | |||||||||||||||||||
| Net income | $ | 19,548 | $ | 20,124 | $ | 18,538 | $ | 8,333 | $ | 86 | |||||||||||||||
| Basic earnings per common share | $ | 0.86 | $ | 0.88 | $ | 0.81 | $ | 0.36 | $ | 0.00 | |||||||||||||||
| Diluted earnings per common share | $ | 0.86 | $ | 0.88 | $ | 0.81 | $ | 0.36 | $ | 0.00 | |||||||||||||||
| MIDLAND STATES BANCORP, INC. | |||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) | |||||||||||||||||||||||||
| As of | |||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||
| (in thousands) | 2021 | 2021 | 2021 | 2020 | 2020 | ||||||||||||||||||||
| Assets | |||||||||||||||||||||||||
| Cash and cash equivalents | $ | 662,643 | $ | 425,100 | $ | 631,219 | $ | 341,640 | $ | 461,196 | |||||||||||||||
| Investment securities | 900,319 | 756,831 | 690,390 | 686,135 | 618,974 | ||||||||||||||||||||
| Loans | 4,915,554 | 4,835,866 | 4,910,806 | 5,103,331 | 4,941,466 | ||||||||||||||||||||
| Allowance for credit losses on loans | (55,675 | ) | (58,664 | ) | (62,687 | ) | (60,443 | ) | (52,771 | ) | |||||||||||||||
| Total loans, net | 4,859,879 | 4,777,202 | 4,848,119 | 5,042,888 | 4,888,695 | ||||||||||||||||||||
| Loans held for sale | 26,621 | 12,187 | 55,174 | 138,090 | 62,500 | ||||||||||||||||||||
| Premises and equipment, net | 71,241 | 71,803 | 73,255 | 74,124 | 74,967 | ||||||||||||||||||||
| Other real estate owned | 11,931 | 12,768 | 20,304 | 20,247 | 15,961 | ||||||||||||||||||||
| Loan servicing rights, at lower of cost or fair value | 30,916 | 34,577 | 36,876 | 39,276 | 42,465 | ||||||||||||||||||||
| Goodwill | 161,904 | 161,904 | 161,904 | 161,904 | 161,904 | ||||||||||||||||||||
| Other intangible assets, net | 26,065 | 27,900 | 26,867 | 28,382 | 29,938 | ||||||||||||||||||||
| Cash surrender value of life insurance policies | 149,146 | 148,277 | 146,864 | 146,004 | 145,112 | ||||||||||||||||||||
| Other assets | 193,294 | 201,461 | 193,814 | 189,850 | 198,333 | ||||||||||||||||||||
| Total assets | $ | 7,093,959 | $ | 6,630,010 | $ | 6,884,786 | $ | 6,868,540 | $ | 6,700,045 | |||||||||||||||
| Liabilities and Shareholders' Equity | |||||||||||||||||||||||||
| Noninterest-bearing deposits | $ | 1,672,901 | $ | 1,366,453 | $ | 1,522,433 | $ | 1,469,579 | $ | 1,355,188 | |||||||||||||||
| Interest-bearing deposits | 3,928,475 | 3,829,898 | 3,818,080 | 3,631,437 | 3,673,548 | ||||||||||||||||||||
| Total deposits | 5,601,376 | 5,196,351 | 5,340,513 | 5,101,016 | 5,028,736 | ||||||||||||||||||||
| Short-term borrowings | 66,666 | 75,985 | 71,728 | 68,957 | 58,625 | ||||||||||||||||||||
| FHLB advances and other borrowings | 440,171 | 440,171 | 529,171 | 779,171 | 693,640 | ||||||||||||||||||||
| Subordinated debt | 138,998 | 138,906 | 169,888 | 169,795 | 169,702 | ||||||||||||||||||||
| Trust preferred debentures | 49,235 | 49,094 | 48,954 | 48,814 | 48,682 | ||||||||||||||||||||
| Other liabilities | 139,669 | 81,317 | 89,065 | 79,396 | 78,780 | ||||||||||||||||||||
| Total liabilities | 6,436,115 | 5,981,824 | 6,249,319 | 6,247,149 | 6,078,165 | ||||||||||||||||||||
| Total shareholders’ equity | 657,844 | 648,186 | 635,467 | 621,391 | 621,880 | ||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 7,093,959 | $ | 6,630,010 | $ | 6,884,786 | $ | 6,868,540 | $ | 6,700,045 | |||||||||||||||
| MIDLAND STATES BANCORP, INC. | ||||||||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) | ||||||||||||||||||||
| As of | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| (in thousands) | 2021 | 2021 | 2021 | 2020 | 2020 | |||||||||||||||
| Loan Portfolio | ||||||||||||||||||||
| Commercial loans and leases | $ | 1,879,765 | $ | 1,831,241 | $ | 1,977,440 | $ | 2,095,639 | $ | 1,938,691 | ||||||||||
| Commercial real estate | 1,562,013 | 1,540,489 | 1,494,031 | 1,525,973 | 1,496,758 | |||||||||||||||
| Construction and land development | 200,792 | 212,508 | 191,870 | 172,737 | 177,894 | |||||||||||||||
| Residential real estate | 344,414 | 366,612 | 398,501 | 442,880 | 470,829 | |||||||||||||||
| Consumer | 928,570 | 885,016 | 848,964 | 866,102 | 857,294 | |||||||||||||||
| Total loans | $ | 4,915,554 | $ | 4,835,866 | $ | 4,910,806 | $ | 5,103,331 | $ | 4,941,466 | ||||||||||
| Deposit Portfolio | ||||||||||||||||||||
| Noninterest-bearing demand | $ | 1,672,901 | $ | 1,366,453 | $ | 1,522,433 | $ | 1,469,579 | $ | 1,355,188 | ||||||||||
| Interest-bearing: | ||||||||||||||||||||
| Checking | 1,697,326 | 1,619,436 | 1,601,449 | 1,568,888 | 1,581,216 | |||||||||||||||
| Money market | 852,836 | 787,688 | 819,455 | 785,871 | 826,454 | |||||||||||||||
| Savings | 665,710 | 669,277 | 653,256 | 597,966 | 580,748 | |||||||||||||||
| Time | 688,693 | 721,502 | 718,788 | 655,620 | 661,872 | |||||||||||||||
| Brokered time | 23,910 | 31,995 | 25,132 | 23,092 | 23,258 | |||||||||||||||
| Total deposits | $ | 5,601,376 | $ | 5,196,351 | $ | 5,340,513 | $ | 5,101,016 | $ | 5,028,736 | ||||||||||
| MIDLAND STATES BANCORP, INC. | ||||||||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) | ||||||||||||||||||||
| For the Quarter Ended | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| (dollars in thousands) | 2021 | 2021 | 2021 | 2020 | 2020 | |||||||||||||||
| Average Balance Sheets | ||||||||||||||||||||
| Cash and cash equivalents | $ | 525,848 | $ | 509,886 | $ | 350,061 | $ | 415,686 | $ | 491,728 | ||||||||||
| Investment securities | 773,372 | 734,462 | 680,202 | 672,937 | 628,705 | |||||||||||||||
| Loans | 4,800,063 | 4,826,234 | 4,992,802 | 4,998,912 | 4,803,940 | |||||||||||||||
| Loans held for sale | 15,204 | 36,299 | 65,365 | 45,196 | 44,880 | |||||||||||||||
| Nonmarketable equity securities | 43,873 | 49,388 | 55,935 | 51,906 | 50,765 | |||||||||||||||
| Total interest-earning assets | 6,158,360 | 6,156,269 | 6,144,365 | 6,184,637 | 6,020,018 | |||||||||||||||
| Non-earning assets | 597,153 | 589,336 | 602,017 | 602,716 | 625,522 | |||||||||||||||
| Total assets | $ | 6,755,513 | $ | 6,745,605 | $ | 6,746,382 | $ | 6,787,353 | $ | 6,645,540 | ||||||||||
| Interest-bearing deposits | $ | 3,895,970 | $ | 3,815,179 | $ | 3,757,108 | $ | 3,680,645 | $ | 3,656,833 | ||||||||||
| Short-term borrowings | 68,103 | 65,727 | 75,544 | 62,432 | 64,010 | |||||||||||||||
| FHLB advances and other borrowings | 440,171 | 519,490 | 617,504 | 682,981 | 693,721 | |||||||||||||||
| Subordinated debt | 138,954 | 165,155 | 169,844 | 169,751 | 169,657 | |||||||||||||||
| Trust preferred debentures | 49,167 | 49,026 | 48,887 | 48,751 | 48,618 | |||||||||||||||
| Total interest-bearing liabilities | 4,592,365 | 4,614,577 | 4,668,887 | 4,644,560 | 4,632,839 | |||||||||||||||
| Noninterest-bearing deposits | 1,434,193 | 1,411,428 | 1,370,604 | 1,446,359 | 1,303,963 | |||||||||||||||
| Other noninterest-bearing liabilities | 77,204 | 78,521 | 82,230 | 73,840 | 75,859 | |||||||||||||||
| Shareholders' equity | 651,751 | 641,079 | 624,661 | 622,594 | 632,879 | |||||||||||||||
| Total liabilities and shareholders' equity | $ | 6,755,513 | $ | 6,745,605 | $ | 6,746,382 | $ | 6,787,353 | $ | 6,645,540 | ||||||||||
| Yields | ||||||||||||||||||||
| Earning Assets | ||||||||||||||||||||
| Cash and cash equivalents | 0.16 | % | 0.11 | % | 0.11 | % | 0.12 | % | 0.10 | % | ||||||||||
| Investment securities | 2.34 | % | 2.43 | % | 2.51 | % | 2.65 | % | 2.86 | % | ||||||||||
| Loans | 4.42 | % | 4.43 | % | 4.50 | % | 4.58 | % | 4.57 | % | ||||||||||
| Loans held for sale | 2.79 | % | 2.88 | % | 2.74 | % | 3.14 | % | 2.92 | % | ||||||||||
| Nonmarketable equity securities | 5.05 | % | 4.94 | % | 4.93 | % | 5.22 | % | 5.26 | % | ||||||||||
| Total interest-earning assets | 3.79 | % | 3.83 | % | 4.02 | % | 4.06 | % | 4.01 | % | ||||||||||
| Interest-Bearing Liabilities | ||||||||||||||||||||
| Interest-bearing deposits | 0.26 | % | 0.31 | % | 0.34 | % | 0.36 | % | 0.46 | % | ||||||||||
| Short-term borrowings | 0.12 | % | 0.12 | % | 0.13 | % | 0.14 | % | 0.17 | % | ||||||||||
| FHLB advances and other borrowings | 1.80 | % | 1.91 | % | 1.69 | % | 1.71 | % | 1.85 | % | ||||||||||
| Subordinated debt | 5.79 | % | 5.61 | % | 5.57 | % | 5.60 | % | 5.58 | % | ||||||||||
| Trust preferred debentures | 3.92 | % | 4.00 | % | 4.08 | % | 4.03 | % | 4.16 | % | ||||||||||
| Total interest-bearing liabilities | 0.61 | % | 0.72 | % | 0.75 | % | 0.79 | % | 0.89 | % | ||||||||||
| Cost of Deposits | 0.19 | % | 0.23 | % | 0.25 | % | 0.26 | % | 0.34 | % | ||||||||||
| Net Interest Margin | 3.34 | % | 3.29 | % | 3.45 | % | 3.47 | % | 3.33 | % | ||||||||||
| 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, | |||||||||||||||||
| (dollars in thousands, except per share data) | 2021 | 2021 | 2021 | 2020 | 2020 | ||||||||||||||||
| Asset Quality | |||||||||||||||||||||
| Loans 30-89 days past due | $ | 16,772 | $ | 20,224 | $ | 24,819 | $ | 31,460 | $ | 28,188 | |||||||||||
| Nonperforming loans | 54,620 | 61,363 | 52,826 | 54,070 | 67,443 | ||||||||||||||||
| Nonperforming assets | 69,261 | 76,926 | 75,004 | 75,432 | 84,795 | ||||||||||||||||
| Net charge-offs | 2,989 | 4,023 | 1,706 | 2,328 | 5,292 | ||||||||||||||||
| Loans 30-89 days past due to total loans | 0.34 | % | 0.42 | % | 0.51 | % | 0.62 | % | 0.57 | % | |||||||||||
| Nonperforming loans to total loans | 1.11 | % | 1.27 | % | 1.08 | % | 1.06 | % | 1.36 | % | |||||||||||
| Nonperforming assets to total assets | 0.98 | % | 1.16 | % | 1.09 | % | 1.10 | % | 1.27 | % | |||||||||||
| Allowance for credit losses to total loans | 1.13 | % | 1.21 | % | 1.28 | % | 1.18 | % | 1.07 | % | |||||||||||
| Allowance for credit losses to nonperforming loans | 101.93 | % | 95.60 | % | 118.67 | % | 111.79 | % | 78.25 | % | |||||||||||
| Net charge-offs to average loans | 0.25 | % | 0.33 | % | 0.14 | % | 0.19 | % | 0.44 | % | |||||||||||
| Wealth Management | |||||||||||||||||||||
| Trust assets under administration | $ | 4,058,168 | $ | 4,077,581 | $ | 3,560,427 | $ | 3,480,759 | $ | 3,260,893 | |||||||||||
| Market Data | |||||||||||||||||||||
| Book value per share at period end | $ | 29.64 | $ | 28.96 | $ | 28.43 | $ | 27.83 | $ | 27.51 | |||||||||||
| Tangible book value per share at period end (1) | $ | 21.17 | $ | 20.48 | $ | 19.98 | $ | 19.31 | $ | 19.03 | |||||||||||
| Market price at period end | $ | 24.73 | $ | 26.27 | $ | 27.74 | $ | 17.87 | $ | 12.85 | |||||||||||
| Shares outstanding at period end | 22,193,141 | 22,380,492 | 22,351,740 | 22,325,471 | 22,602,844 | ||||||||||||||||
| Capital | |||||||||||||||||||||
| Total capital to risk-weighted assets | 13.10 | % | 13.11 | % | 13.73 | % | 13.24 | % | 13.34 | % | |||||||||||
| Tier 1 capital to risk-weighted assets | 9.73 | % | 9.64 | % | 9.62 | % | 9.20 | % | 9.40 | % | |||||||||||
| Tier 1 common capital to risk-weighted assets | 8.55 | % | 8.44 | % | 8.39 | % | 7.99 | % | 8.18 | % | |||||||||||
| Tier 1 leverage ratio | 8.16 | % | 8.00 | % | 7.79 | % | 7.50 | % | 7.72 | % | |||||||||||
| Tangible common equity to tangible assets (1) | 6.80 | % | 7.12 | % | 6.67 | % | 6.46 | % | 6.61 | % | |||||||||||
| (1) Non-GAAP financial measures. Refer to pages 13 - 15 for a reconciliation to the comparable GAAP financial measures. | |||||||||||||||||||||
| MIDLAND STATES BANCORP, INC. | ||||||||||||||||||||||||
| RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) | ||||||||||||||||||||||||
| Adjusted Earnings Reconciliation | ||||||||||||||||||||||||
| For the Quarter Ended | ||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||||
| (dollars in thousands, except per share data) | 2021 | 2021 | 2021 | 2020 | 2020 | |||||||||||||||||||
| Income before income taxes - GAAP | $ | 25,431 | $ | 19,041 | $ | 24,040 | $ | 10,746 | $ | 3,270 | ||||||||||||||
| Adjustments to noninterest income: | ||||||||||||||||||||||||
| Gain on sales of investment securities, net | 160 | 377 | - | - | 1,721 | |||||||||||||||||||
| Other income | - | (27 | ) | 75 | 3 | (17 | ) | |||||||||||||||||
| Total adjustments to noninterest income | 160 | 350 | 75 | 3 | 1,704 | |||||||||||||||||||
| Adjustments to noninterest expense: | ||||||||||||||||||||||||
| Loss on mortgage servicing rights held for sale | 79 | 143 | - | 617 | 188 | |||||||||||||||||||
| Impairment related to facilities optimization | - | - | - | (10 | ) | 12,651 | ||||||||||||||||||
| FHLB advances prepayment fees | - | 3,669 | 8 | 4,872 | - | |||||||||||||||||||
| Integration and acquisition expenses | 176 | 3,771 | 238 | 231 | 1,200 | |||||||||||||||||||
| Total adjustments to noninterest expense | 255 | 7,583 | 246 | 5,710 | 14,039 | |||||||||||||||||||
| Adjusted earnings pre tax | 25,526 | 26,274 | 24,211 | 16,453 | 15,605 | |||||||||||||||||||
| Adjusted earnings tax | 5,910 | 6,519 | 5,549 | 3,982 | 3,582 | |||||||||||||||||||
| Adjusted earnings - non-GAAP | $ | 19,616 | $ | 19,755 | $ | 18,662 | $ | 12,471 | $ | 12,023 | ||||||||||||||
| Adjusted diluted earnings per common share | $ | 0.86 | $ | 0.86 | $ | 0.82 | $ | 0.54 | $ | 0.52 | ||||||||||||||
| Adjusted return on average assets | 1.15 | % | 1.17 | % | 1.12 | % | 0.73 | % | 0.72 | % | ||||||||||||||
| Adjusted return on average shareholders' equity | 11.94 | % | 12.36 | % | 12.12 | % | 7.97 | % | 7.56 | % | ||||||||||||||
| Adjusted return on average tangible common equity | 16.82 | % | 17.52 | % | 17.39 | % | 11.50 | % | 11.04 | % | ||||||||||||||
| Adjusted Pre-Tax, Pre-Provision Earnings Reconciliation | ||||||||||||||||||||||||
| For the Quarter Ended | ||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||||
| (dollars in thousands) | 2021 | 2021 | 2021 | 2020 | 2020 | |||||||||||||||||||
| Adjusted earnings pre tax - non- GAAP | $ | 25,526 | $ | 26,274 | $ | 24,211 | $ | 16,453 | $ | 15,605 | ||||||||||||||
| Provision for credit losses | (184 | ) | (455 | ) | 3,565 | 10,058 | 11,728 | |||||||||||||||||
| Impairment on commercial mortgage servicing rights | 3,037 | 1,148 | 1,275 | 2,344 | 1,418 | |||||||||||||||||||
| Adjusted pre-tax, pre-provision earnings - non-GAAP | $ | 28,379 | $ | 26,967 | $ | 29,051 | $ | 28,855 | $ | 28,751 | ||||||||||||||
| Adjusted pre-tax, pre-provision return on average assets | 1.67 | % | 1.60 | % | 1.75 | % | 1.69 | % | 1.72 | % | ||||||||||||||
| MIDLAND STATES BANCORP, INC. | |||||||||||||||||||||||||
| RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued) | |||||||||||||||||||||||||
| Efficiency Ratio Reconciliation | |||||||||||||||||||||||||
| For the Quarter Ended | |||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||
| (dollars in thousands) | 2021 | 2021 | 2021 | 2020 | 2020 | ||||||||||||||||||||
| Noninterest expense - GAAP | $ | 41,292 | $ | 48,941 | $ | 39,079 | $ | 47,048 | $ | 53,901 | |||||||||||||||
| Loss on mortgage servicing rights held for sale | (79 | ) | (143 | ) | - | (617 | ) | (188 | ) | ||||||||||||||||
| Impairment related to facilities optimization | - | - | - | 10 | (12,651 | ) | |||||||||||||||||||
| FHLB advances prepayment fees | - | (3,669 | ) | (8 | ) | (4,872 | ) | - | |||||||||||||||||
| Integration and acquisition expenses | (176 | ) | (3,771 | ) | (238 | ) | (231 | ) | (1,200 | ) | |||||||||||||||
| Adjusted noninterest expense | $ | 41,037 | $ | 41,358 | $ | 38,833 | $ | 41,338 | $ | 39,862 | |||||||||||||||
| Net interest income - GAAP | $ | 51,396 | $ | 50,110 | $ | 51,868 | $ | 53,516 | $ | 49,980 | |||||||||||||||
| Effect of tax-exempt income | 402 | 383 | 386 | 413 | 430 | ||||||||||||||||||||
| Adjusted net interest income | 51,798 | 50,493 | 52,254 | 53,929 | 50,410 | ||||||||||||||||||||
| Noninterest income - GAAP | 15,143 | 17,417 | 14,816 | 14,336 | 18,919 | ||||||||||||||||||||
| Impairment on commercial mortgage servicing rights | 3,037 | 1,148 | 1,275 | 2,344 | 1,418 | ||||||||||||||||||||
| Gain on sales of investment securities, net | (160 | ) | (377 | ) | - | - | (1,721 | ) | |||||||||||||||||
| Other | - | 27 | (75 | ) | (3 | ) | 17 | ||||||||||||||||||
| Adjusted noninterest income | 18,020 | 18,215 | 16,016 | 16,677 | 18,633 | ||||||||||||||||||||
| Adjusted total revenue | $ | 69,818 | $ | 68,709 | $ | 68,270 | $ | 70,607 | $ | 69,043 | |||||||||||||||
| Efficiency ratio | 58.78 | % | 60.19 | % | 56.88 | % | 58.55 | % | 57.74 | % | |||||||||||||||
| 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 | ||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||||||
| (dollars in thousands, except per share data) | 2021 | 2021 | 2021 | 2020 | 2020 | |||||||||||||||||||||
| Shareholders' Equity to Tangible Common Equity | ||||||||||||||||||||||||||
| Total shareholders' equity—GAAP | $ | 657,844 | $ | 648,186 | $ | 635,467 | $ | 621,391 | $ | 621,880 | ||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||
| Goodwill | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | ||||||||||||||||
| Other intangible assets, net | (26,065 | ) | (27,900 | ) | (26,867 | ) | (28,382 | ) | (29,938 | ) | ||||||||||||||||
| Tangible common equity | $ | 469,875 | $ | 458,382 | $ | 446,696 | $ | 431,105 | $ | 430,038 | ||||||||||||||||
| Total Assets to Tangible Assets: | ||||||||||||||||||||||||||
| Total assets—GAAP | $ | 7,093,959 | $ | 6,630,010 | $ | 6,884,786 | $ | 6,868,540 | $ | 6,700,045 | ||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||
| Goodwill | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | ||||||||||||||||
| Other intangible assets, net | (26,065 | ) | (27,900 | ) | (26,867 | ) | (28,382 | ) | (29,938 | ) | ||||||||||||||||
| Tangible assets | $ | 6,905,990 | $ | 6,440,206 | $ | 6,696,015 | $ | 6,678,254 | $ | 6,508,203 | ||||||||||||||||
| Common Shares Outstanding | 22,193,141 | 22,380,492 | 22,351,740 | 22,325,471 | 22,602,844 | |||||||||||||||||||||
| Tangible Common Equity to Tangible Assets | 6.80 | % | 7.12 | % | 6.67 | % | 6.46 | % | 6.61 | % | ||||||||||||||||
| Tangible Book Value Per Share | $ | 21.17 | $ | 20.48 | $ | 19.98 | $ | 19.31 | $ | 19.03 | ||||||||||||||||
| Return on Average Tangible Common Equity (ROATCE) | ||||||||||||||||||||||||||
| For the Quarter Ended | ||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||||||
| (dollars in thousands) | 2021 | 2021 | 2021 | 2020 | 2020 | |||||||||||||||||||||
| Net income available to common shareholders | $ | 19,548 | $ | 20,124 | $ | 18,538 | $ | 8,333 | $ | 86 | ||||||||||||||||
| Average total shareholders' equity—GAAP | $ | 651,751 | $ | 641,079 | $ | 624,661 | $ | 622,594 | $ | 632,879 | ||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||
| Goodwill | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | (168,771 | ) | ||||||||||||||||
| Other intangible assets, net | (27,132 | ) | (26,931 | ) | (27,578 | ) | (29,123 | ) | (30,690 | ) | ||||||||||||||||
| Average tangible common equity | $ | 462,715 | $ | 452,244 | $ | 435,179 | $ | 431,567 | $ | 433,418 | ||||||||||||||||
| ROATCE | 16.76 | % | 17.85 | % | 17.28 | % | 7.68 | % | 0.08 | % | ||||||||||||||||
Exhibit 99.2
1 Midland States Bancorp, Inc. NASDAQ: MSBI Third Quarter 2021 Earnings Call
2 Forward - Looking Statements. This presentation may contain forward - looking statements within the meaning of the federal securities laws. Forward - looking statements expressing management’s current expectations, forecasts of future events or long - te rm goals may be based upon beliefs, expectations and assumptions of Midland’s management, and are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” o r o ther similar expressions. All statements in this presentation speak only as of the date they are made, and Midland undertakes no obligation to update any statement. A number of factors, many of which are beyond the ability of Midland to control or predic t, could cause actual results to differ materially from those in its forward - looking statements including the effects of the Corona virus Disease 2019 (“COVID - 19”) pandemic, including its potential effects on the economic environment, our customers and our operations, as well as any changes to federal, state or local government laws, regulations or orders in connection with the pandemic. These risks and uncertainties should be considered in evaluating forward - looking statements, and undue reliance shoul d not be placed on such statements. Additional information concerning Midland and its businesses, including additional factors tha t could materially affect Midland’s financial results, are included in Midland’s filings with the Securities and Exchange Commi ssi on. Use of Non - GAAP Financial Measures. This presentation may contain certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States (“GAAP”). These non - GAAP financial measure s include “Adjusted Earnings,” “Adjusted Pre - Tax, Pre - Provision Income,” “Adjusted Diluted Earnings Per Share,” “Adjusted Return o n Average Assets,” “Adjusted Return on Average Shareholders’ Equity,” “Adjusted Return on Average Tangible Common Equity,” “Adjusted Pre - Tax, Provision Return on Average Assets,” “Efficiency Ratio,” “Tangible Common Equity to Tangible Assets,” “Tangib le 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 financ ial measures. Not all companies use the same calculation of these measures; therefore this presentation may not be comparable to other similarly titled measures as presented by other companies. Reconciliations of these non - GAAP measures are provided in the Appendix section of this presentation.
3 Overview of 3Q21 3 Improving Operating Leverage 3Q21 Earnings Positive Trends in Asset Quality • Net interest income and recurring fee income increasing while operating expenses remain relatively stable • Efficiency ratio (1) improved to 58.78% from 60.19% in prior quarter • Nonperforming loans declined 11.0% from the end of the prior quarter • Net charge - offs declined 25.7% from the prior quarter Reduced Cost of Funds Drives NIM Expansion • Elimination of higher cost funding sources in 2Q21 resulted in 11 bp decline in cost of average interest - bearing liabilities • Lower cost of funds resulted in 5 bp increase in net interest margin • Net income of $19.5 million, or $0.86 diluted EPS • 3Q21 results included a $3.0 million commercial MSR impairment • Adjusted pre - tax, pre - provision earnings (1) of $28.4 million, up from $27.0 million in prior quarter Notes: (1) Represents a non - GAAP financial measure. See “Non - GAAP Reconciliation” in the appendix. Strong Balance Sheet Growth • Total loans increased 8.2% annualized, excluding commercial FHA warehouse and PPP loans • Well balanced loan growth with increases in commercial, CRE and consumer loans offsetting declines in PPP loans and residential real estate loans • Total deposits increased 7.8% from end of prior quarter, primarily driven by higher servicing deposits and other commercial deposits
4 Paycheck Protection Program Overview Paycheck Protection Program (as of 9/30/21) Loans Outstanding $82.4 million Round 1 $12.4 million Round 2 $70.0 million Total Fees Earned $15.3 million Fees Recognized in 3Q21 $2.2 million Remaining Fees to be Recognized $3.5 million Impact on 3Q21 Financials At or for the Three Months Ended 9/30/21 Metrics Excluding PPP Impact Total Loans $4.92 billion $4.84 billion Average Loans $4.80 billion $4.69 billion Net Interest Income FTE (1) $51.8 million $49.3 million Net Interest Margin (1) 3.34% 3.24% ACL/Total Loans 1.13% 1.15% 1. Loan fees and deferred loan origination costs being amortized over an estimated 24 to 60 month life of PPP loans Paycheck Protection Program Loan Forgiveness As of 6/30/21 As of 9/30/21 Loans Submitted to SBA $263.8 million $313.9 million Loans Forgiven by SBA $238.3 million $300.8 million Percentage of Total Round 1 PPP Loans Forgiven 83.7% 95.8% Percentage of Total Round 1 and 2 PPP Loans Forgiven 62.9% 79.1%
5 Loan Deferral Overview Total Loan Deferrals As of Mar. 31, 2021 As of Jun. 30, 2021 As of Sep. 30, 2021 Total Loans Deferred $219.1 million $107.3 million $34.3 million % of Total Loans 4.5% 2.2% 0.7% Deferrals by Industry (as of September 30, 2021) Hotels/Motels $7.1 21% Transit & Ground Passenger $6.8 20% Assisted Living $8.0 23% All Others <4% $12.4 36% ($ in millions) Deferral Type (as of September 30, 2021) Full Payment Deferral $3.2 million Deferred Loans Making I/O or Other Payments $31.1 million
6 Loan Portfolio Total Loans and Average Loan Yield • Total loans increased $79.7 million from prior quarter to $4.92 billion • Increased commercial and CRE loan production, higher end of period balances on commercial FHA warehouse credit lines, and growth in consumer portfolio offset lower PPP loans and continued runoff in residential real estate portfolio driven by refinancing activity • Equipment finance balances increased $27.6 million, or 3.2% from end of prior quarter • Excluding PPP loans, commercial FHA warehouse credit lines, and GreenSky loans, total loans increased at an annualized rate of 6.0% during 3Q21 • PPP loans were $82.4 million at Sep. 30, 2021, a decrease of $64.3 million from June 30, 2021 Loan Portfolio Mix (in millions, as of quarter - end) (in millions, as of quarter - end) $4,941 $5,103 $4,911 $4,836 $4,916 4.57% 4.58% 4.50% 4.43% 4.43% 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021 Total Loans Average Loan Yield 3Q 2021 2Q 2021 3Q 2020 Commercial loans and leases $ 1,880 $ 1,831 $ 1,939 Commercial real estate 1,562 1,540 1,497 Construction and land development 201 213 178 Residential real estate 344 367 471 Consumer 929 885 857 Total Loans $4,916 $4,836 $4,941 Total Loans ex. Commercial FHA Lines and PPP $4,653 $4,560 $4,527
7 Midland Equipment Finance Portfolio Overview ($ in millions) Portfolio Characteristics (as of 9/30/21) Nationwide portfolio providing financing solutions to equipment vendors and end - users Total Outstanding Loans and Leases $899.1 million (18.3% of total loans) Number of Loans and Leases 7,471 Average Loan/Lease Size $120,339 Largest Loan/Lease $1.3 million Weighted Average Rate 4.69% Avg. FICO Score 604 Transit and Ground Passenger $6.8 75% All Others <6% of Total $2.3 25% Total Deferred Loans and Leases As of 3/31/21 As of 6/30/21 As of 9/30/21 Total Deferrals $46.1 million $35.6 million $9.1 million Percentage of Portfolio 5.4% 4.1% 1.0% Deferred Loans Making I/O or Other Payments $35.8 million $32.6 million $8.0 million Equipment Finance Deferrals by Industry (as of September 30, 2021)
8 Hotel/Motel Portfolio Overview ($ in millions) Portfolio Characteristics (CRE & C&I) (as of 9/30/21) Total Outstanding $177.1 million (3.6% of total loans) Number of Loans 69 Average Loan Size $2.6 million Largest Loan $11.2 million Average LTV 56% Total Deferred Loans as of 6/30/21 $39.4 million (21.8% of portfolio) Total Deferred Loans as of 9/30/21 $7.1 million (4.0% of portfolio)* Average LTV of Deferred Loans as of 9/30/21 53% Deferred Loans Making I/O or Other Payments $7.1 million (100% of deferrals) Portfolio by State IL $95.8 54% MO $33.5 19% MI $15.6 9% CO $11.2 6% WI $9.5 5% Other $11.5 7% * All remaining loan deferrals are Upper Midscale chains
9 GreenSky Consumer Loan Portfolio Overview Delinquency Rate (greater than 60 days) Portfolio Characteristics (as of 9/30/21) Total Outstanding $834.3 million (17.0% of total loans) Number of Loans 389,705 Average Loan Size $2,141 Average FICO Score 772 Total Deferred Loans (as of June 30, 2021) $0.6 million (0.1% of portfolio) Total Deferred Loans (as of September 30, 2021) $0.7 million (0.1% of portfolio) ▪ Average FICO score of 772 ▪ No losses to MSBI in 10 year history of portfolio Prime Credit 0.42% 0.36% 0.35% 0.23% 0.25% Sep 2020 Dec 2020 Mar 2021 Jun 2021 Sep 2021 ▪ Cash flow waterfall structure » Cash flow from portfolio covers servicing fee, credit losses and our target margin » Excess cash flow is an incentive fee to GreenSky that is available to cover additional losses » GreenSky received incentive fees in 32 of past 33 months including every month in 2020 and 2021 ▪ Escrow deposits » Escrow deposits absorb losses in excess of cash flow waterfall » Escrow account totaled $34.6 million at 9/30/21 or 4.1% of the portfolio Credit Enhancement
10 Total Deposits Total Deposits and Cost of Deposits • Total deposits increased $405.0 million, or 7.8% from prior quarter, to $5.60 billion • Increase in deposits largely attributable to increase in commercial FHA servicing deposits and other commercial deposits • $184 million of CDs maturing in 4Q21 with a weighted average rate of 1.66% Deposit Mix (in millions, as of quarter - end) (in millions, as of quarter - end) $5,029 $5,101 $5,341 $5,196 $5,601 0.34% 0.26% 0.25% 0.23% 0.19% 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021 Total Deposits Cost of Deposits 3Q 2021 2Q 2021 3Q 2020 Noninterest - bearing demand $ 1,673 $ 1,366 $ 1,355 Interest - bearing: Checking 1,697 1,619 1,581 Money market 853 788 826 Savings 666 669 581 Time 689 722 662 Brokered time 24 32 23 Total Deposits $5,601 $5,196 $5,029
11 • Net interest income increased 2.6% from the prior quarter due primarily to an increase in net interest margin • Net interest margin, excluding accretion income, increased 7 bps from prior quarter due primarily to a reduction in the cost of funds • Excess liquidity expected to result in a lower net interest margin in 4Q21 Net Interest Income/Margin Net Interest Margin Net Interest Income (in millions) $2.1 $1.6 $1.2 $1.3 $1.0 $50.0 $53.5 $51.9 $50.1 $51.4 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021 NII Accretion Income 0.14% 0.10% 0.08% 0.09% 0.07% 3.33% 3.47% 3.45% 3.29% 3.34% 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021 NIM Accretion Income
12 • During 3Q21, assets under administration decreased $19.4 million, primarily due to market performance • Wealth Management revenue increased 9.9% from prior quarter, primarily due to full quarter contribution of ATG Trust Company Wealth Management Wealth Management Revenue Assets Under Administration (in millions) (in millions ) $3,261 $3,481 $3,560 $4,078 $4,058 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021 $5.56 $5.87 $5.93 $6.53 $7.18 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021
13 Noninterest Income • Noninterest income decreased 13.1% from prior quarter • Impairment on commercial MSRs impacted noninterest income by $3.0 million and $1.1 million in 3Q21 and 2Q21, respectively • Excluding the impact of the impairment of commercial MSRs, noninterest income decreased 2.1% primarily due to the sale of other real estate owned recognized in 2Q21, partially offset by higher wealth management revenue Noninterest Income (in millions) $18.9 $14.3 $14.8 $17.4 $15.1 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021 All Other Residential Mortgage Wealth Management
14 Noninterest Expense and Operating Efficiency • Efficiency Ratio (1) was 58.8% in 3Q21 vs. 60.2% in 2Q21 • Adjustments to non - interest expense: • Excluding these adjustments, noninterest expense decreased $0.2 million • Operating expense run - rate expected to be $40.0 - $42.0 million in 4Q21 Noninterest Expense and Efficiency Ratio (1) (Noninterest expense in millions) Notes: (1) Represents a non - GAAP financial measure. See “Non - GAAP Reconciliation” in the appendix. ($ in millions) 3Q21 2Q21 Integration and acquisition related expenses » Professional fees related to tax settlement » Other expenses ($0.1) -- ($0.1) ($3.8) ($3.6) ($0.2) FHLB advance prepayment fee -- ($3.7) Loss on MSRs held for sale ($0.1) ($0.1) $14.0 $5.7 $0.2 $7.6 $0.2 $53.9 $47.0 $39.1 $48.9 $41.3 57.7% 58.6% 56.9% 60.2% 58.8% 56.0% 57.0% 58.0% 59.0% 60.0% 61.0% 62.0% 63.0% 64.0% $20.0 $25.0 $30.0 $35.0 $40.0 $45.0 $50.0 $55.0 $60.0 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021 Total Noninterest Expense Adjustments to Noninterest Expense Efficiency Ratio
15 Asset Quality NCO / Average Loans • Nonperforming loans decreased $6.7 million due to upgrades, disposition of certain loans, and minimal new inflow into nonperforming category • Net charge - offs of $3.0 million, or 0.25% of average loans • $1.5 million specific reserve charged - off on one of the three hotel loans put into NPL in 2Q21 prior to expected note sale in 4Q21; no additional deterioration in other two loans • No provision for credit losses on loans due to improving asset quality; Negative provision for credit losses of $0.2 million on available - for - sale securities Nonperforming Loans / Total Loans (Total Loans as of quarter - end) 1.36% 1.06% 1.08% 1.27% 1.11% 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021 0.44% 0.19% 0.14% 0.33% 0.25% 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021
16 Changes in Allowance for Credit Losses ACL 6/30/21 ACL 9/30/21 ($ in thousands) Specific Reserves Portfolio Changes Economic Factors ▪ Changes to specific reserves ▪ New loans ▪ Changes in credit quality including risk downgrades and deferrals ▪ Changes in allocations to COVID - 19 impacted segments ▪ Aging of existing portfolio ▪ Other charge - offs and recoveries ▪ Changes to macro - economic variables and forecasts ▪ Changes to other economic qualitative factors
17 ACL by Portfolio Portfolio Total Loans at 9/30/21 ACL % of Total Loans Total Loans at 6/30/21 ACL % of Total Loans Commercial $ 799,189 $ 6,360 0.80% $ 719,642 $ 5,825 0.81% Warehouse Lines 180,248 - 0.00% 129,607 - 0.00% Commercial Other 668,146 8,231 1.23% 704,438 9,024 1.28% Equipment Finance 486,623 7,856 1.61% 464,380 8,635 1.86% Paycheck Protection Program 82,410 124 0.15% 146,728 220 0.15% Lease Financing 412,430 7,586 1.84% 407,161 5,389 1.32% CRE non - owner occupied 921,344 17,943 1.95% 908,787 21,168 2.33% CRE owner occupied 437,140 6,855 1.57% 440,722 7,153 1.62% Multi - family 128,961 1,591 1.23% 116,176 1,754 1.51% Farmland 74,568 564 0.76% 74,804 643 0.86% Construction and Land Development 200,792 1,131 0.56% 212,508 1,733 0.82% Residential RE First Lien 277,819 2,551 0.92% 296,256 3,028 1.02% Other Residential 66,595 466 0.70% 70,356 655 0.93% Consumer 77,132 268 0.35% 74,627 266 0.36% Consumer Other (1) 851,438 2,129 0.25% 810,389 2,026 0.25% Total Loans 4,915,554 55,675 1.13% 4,835,866 58,664 1.21% Loans (excluding GreenSky, PPP and warehouse lines) 3,745,257 53,253 1.42% 3,695,247 56,259 1.52% ($ in thousands) Notes: (1) Primarily consists of loans originated through GreenSky relationship
18 Outlook • GreenSky relationship to gradually wind down over next two years » Loan originations expected to continue through mid - 2022 and keep balances relatively stable » After loan originations end, GreenSky portfolio expected to decline by $400 - $450 million over the following year » Runoff expected to slow after the first year with remaining portfolio paying off over next several years » Well positioned to replace GreenSky portfolio through combination of larger commercial banking team, new direct consumer lending programs, and other Fintech partnership opportunities • Healthy loan and deposit pipelines should drive quality balance sheet growth and a continuation of positive trends in 4Q21 • Dwight Capital relationship expanding in 4Q21 to include approximately $400 million of additional low - cost servicing deposits • Continued focus on expanding presence and adding new banking talent in higher growth markets in Northern Illinois and St. Louis • Growth in balance sheet and recurring fee income expected to continue resulting in higher levels of revenue, increasing operating leverage and improved profitability 18
19 APPENDIX
20 Commercial Loans and Leases by Industry RE / Rental & Leasing 20.5% All Others 10.7% Assisted Living 9.6% Finance and Insurance 9.5% Construction - General 7.8% Manufacturing 7.0% Accommodation & Food Svcs 6.9% Retail Trade 6.0% Ag., Forestry, & Fishing 4.9% Trans. / Ground Passenger 4.7% General Freight Trucking 4.2% Health Care 2.8% Other Services 2.8% Wholesale Trade 2.6% Industries as a percentage of Commercial, CRE and Equipment Finance Loans and Leases as of 9/30/21
21 Commercial Real Estate Portfolio by Collateral Type Assisted Living 18.3% Retail 14.8% Multi - Family 10.6% Hotel/Motel 9.4% Industrial / Warehouse 8.9% All Others 8.5% Office 6.3% Residential 1 - 4 Family 4.3% Farmland 3.9% C - Store / Gas Station 3.9% Mixed Use / Other 3.1% Medical Building 2.3% Developed Land 2.5% Car Dealerships 1.8% Restaurant 1.4% Collateral type as a percentage of the Commercial Real Estate and Construction Portfolio as of 9/30/21 CRE Concentration (as of 9/30/21) CRE as a % of Total Loans 31.8% CRE as a % of Total Risk - Based Capital (1) 185.3% Notes: (1) Represents non - owner occupied CRE loans only
22 Capital and Liquidity Overview Capital Ratios (as of 9/30/21) Liquidity Sources (as of 9/30/21) 6.80% 8.55% 8.16% 9.73% 13.10% 11.17% 9.38% 11.17% 12.03% 0.00% 5.00% 10.00% 15.00% TCE/TA Tier 1 Common Tier 1 Leverage Tier 1 RBC Total RBC Consolidated Bank Level ($ in millions) Cash and Cash Equivalents $ 662.6 Unpledged Securities 291.6 FHLB Committed Liquidity 730.0 FRB Discount Window Availability 53.5 Primary Liquidity 1,737.7 FRB – PPP Liquidity Facility (1) 82.4 Secondary Liquidity 82.4 Total Estimated Liquidity $ 1,820.1 Conditional Funding Based on Market Conditions Additional Credit Facility $ 250.0 Brokered CDs (additional capacity) $ 500.0 (1) Enrolled in PPP facility – loans available to submit Other Liquidity Holding Company Cash Position of $35.3 Million
23 (dollars in thousands, except per share data) Income before income taxes - GAAP $ 25,431 $ 19,041 $ 24,040 $ 10,746 $ 3,270 Adjustments to noninterest income: Gain on sales of investment securities, net 160 377 - - 1,721 Other income - (27) 75 3 (17) Total adjustments to noninterest income 160 350 75 3 1,704 Adjustments to noninterest expense: Loss on mortgage servicing rights held for sale 79 143 - 617 188 Impairment related to facilities optimization - - - (10) 12,651 FHLB advances prepayment fees - 3,669 8 4,872 - Integration and acquisition expenses 176 3,771 238 231 1,200 Total adjustments to noninterest expense 255 7,583 246 5,710 14,039 Adjusted earnings pre tax 25,526 26,274 24,211 16,453 15,605 Adjusted earnings tax 5,910 6,519 5,549 3,982 3,582 Adjusted earnings - non-GAAP $ 19,616 $ 19,755 $ 18,662 $ 12,471 $ 12,023 Adjusted diluted earnings per common share $ 0.86 $ 0.86 $ 0.82 $ 0.54 $ 0.52 Adjusted return on average assets 1.15% 1.17% 1.12% 0.73% 0.72% Adjusted return on average shareholders' equity 11.94% 12.36% 12.12% 7.97% 7.56% Adjusted return on average tangible common equity 16.82% 17.52% 17.39% 11.50% 11.04% (dollars in thousands) Adjusted earnings pre tax - non- GAAP $ 25,526 $ 26,274 $ 24,211 $ 16,453 $ 15,605 Provision for credit losses (184) (455) 3,565 10,058 11,728 Impairment on commercial mortgage servicing rights 3,037 1,148 1,275 2,344 1,418 Adjusted pre-tax, pre-provision earnings - non-GAAP $ 28,379 $ 26,967 $ 29,051 $ 28,855 $ 28,751 Adjusted pre-tax, pre-provision return on average assets 1.67% 1.60% 1.75% 1.69% 1.72% September 30, 20202020 December 31, Adjusted Pre-Tax, Pre-Provision Earnings Reconciliation For the Quarter Ended March 31, 20212021 June 30,September 30, 2021 MIDLAND STATES BANCORP, INC. Adjusted Earnings Reconciliation RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) 2021 March 31, For the Quarter Ended December 31, 20202021 June 30, 2021 September 30, 2020 September 30,
24 (dollars in thousands) Noninterest expense - GAAP $ 41,292 $ 48,941 $ 39,079 $ 47,048 $ 53,901 Loss on mortgage servicing rights held for sale (79) (143) - (617) (188) Impairment related to facilities optimization - - - 10 (12,651) FHLB advances prepayment fees - (3,669) (8) (4,872) - Integration and acquisition expenses (176) (3,771) (238) (231) (1,200) Adjusted noninterest expense $ 41,037 $ 41,358 $ 38,833 $ 41,338 $ 39,862 Net interest income - GAAP $ 51,396 $ 50,110 $ 51,868 $ 53,516 $ 49,980 Effect of tax-exempt income 402 383 386 413 430 Adjusted net interest income 51,798 50,493 52,254 53,929 50,410 Noninterest income - GAAP 15,143 17,417 14,816 14,336 18,919 Impairment on commercial mortgage servicing rights 3,037 1,148 1,275 2,344 1,418 Gain on sales of investment securities, net (160) (377) - - (1,721) Other - 27 (75) (3) 17 Adjusted noninterest income 18,020 18,215 16,016 16,677 18,633 Adjusted total revenue $ 69,818 $ 68,709 $ 68,270 $ 70,607 $ 69,043 Efficiency ratio 58.78% 60.19% 56.88% 58.55% 57.74% 2020 September 30, MIDLAND STATES BANCORP, INC. Efficiency Ratio Reconciliation RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued) 2021 March 31, For the Quarter Ended December 31, 20202021 June 30, 2021 September 30,
25 (dollars in thousands, except per share data) Shareholders' Equity to Tangible Common Equity Total shareholders' equity—GAAP $ 657,844 $ 648,186 $ 635,467 $ 621,391 $ 621,880 Adjustments: Goodwill (161,904) (161,904) (161,904) (161,904) (161,904) Other intangible assets, net (26,065) (27,900) (26,867) (28,382) (29,938) Tangible common equity $ 469,875 $ 458,382 $ 446,696 $ 431,105 $ 430,038 Total Assets to Tangible Assets: Total assets—GAAP $ 7,093,959 $ 6,630,010 $ 6,884,786 $ 6,868,540 $ 6,700,045 Adjustments: Goodwill (161,904) (161,904) (161,904) (161,904) (161,904) Other intangible assets, net (26,065) (27,900) (26,867) (28,382) (29,938) Tangible assets $ 6,905,990 $ 6,440,206 $ 6,696,015 $ 6,678,254 $ 6,508,203 Common Shares Outstanding 22,193,141 22,380,492 22,351,740 22,325,471 22,602,844 Tangible Common Equity to Tangible Assets 6.80% 7.12% 6.67% 6.46% 6.61% Tangible Book Value Per Share $ 21.17 $ 20.48 $ 19.98 $ 19.31 $ 19.03 (dollars in thousands) Net income available to common shareholders $ 19,548 $ 20,124 $ 18,538 $ 8,333 $ 86 Average total shareholders' equity—GAAP $ 651,751 $ 641,079 $ 624,661 $ 622,594 $ 632,879 Adjustments: Goodwill (161,904) (161,904) (161,904) (161,904) (168,771) Other intangible assets, net (27,132) (26,931) (27,578) (29,123) (30,690) Average tangible common equity $ 462,715 $ 452,244 $ 435,179 $ 431,567 $ 433,418 ROATCE 16.76% 17.85% 17.28% 7.68% 0.08% Return on Average Tangible Common Equity (ROATCE) 2020 September 30, 2020 September 30, 2020 December 31, 2021 March 31, For the Quarter Ended 2021 June 30, 2021 September 30, MIDLAND STATES BANCORP, INC. Tangible Common Equity to Tangible Assets Ratio and Tangible Book Value Per Share RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued) 2021 March 31, As of December 31, 20202021 June 30, 2021 September 30,