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 April 28, 2022, Midland States Bancorp, Inc. (the “Company”) issued a press release announcing its financial results for the first quarter of 2022. The press release is attached as Exhibit 99.1.
On April 28, 2022, the Company made available on its website a slide presentation regarding the Company's first quarter 2022 financial results, which will be used as part of a publicly accessible conference call on April 29, 2022. 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 April 28, 2022 | |
| 99.2 | Slide Presentation of Midland States Bancorp, Inc. regarding first quarter 2022 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: April 28, 2022 | By: | /s/ Douglas J. Tucker |
| Douglas J. Tucker | ||
| Senior Vice President and Corporate Counsel | ||
EXHIBIT 99.1
Midland States Bancorp, Inc. Announces 2022 First Quarter Results
Summary
- Net income of $20.7 million, or $0.92 diluted earnings per share
- Total loans increased 24.1% annualized
- Net interest income increased 4.7% from prior quarter to $56.8 million
- Net interest margin increased 25 basis points from prior quarter to 3.50%
- Efficiency ratio improved to 55.73% from 57.14% in the first quarter of 2021
EFFINGHAM, Ill., April 28, 2022 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (Nasdaq: MSBI) (the “Company”) today reported net income of $20.7 million, or $0.92 diluted earnings per share, for the first quarter of 2022. This compares to net income of $23.1 million, or $1.02 diluted earnings per share, for the fourth quarter of 2021, which included a $4.9 million FHLB advance prepayment fee and a $1.8 million gain on the termination of an interest rate swap. This also compares to net income of $18.5 million, or $0.81 diluted earnings per share, for the first quarter of 2021.
Jeffrey G. Ludwig, President and Chief Executive Officer of the Company, said, “We executed very well in the first quarter, continuing to generate strong loan production while effectively managing expenses. Our banking teams are generating high quality lending opportunities across all asset classes, which resulted in 24% annualized growth in total loans. The strong loan production enabled us to redeploy our excess liquidity into the loan portfolio, drive a favorable shift in our mix of earning assets, and generate significant expansion in our net interest margin.
“Our loan pipeline remains very strong, which should enable us to continue to generate a high level of loan growth, drive additional expansion in our net interest margin, and further improve our earnings and level of profitability as we move through the year. While we continue to see good results from the efforts we have made to enhance our new business development capabilities, we are also making steady progress on our long-term initiatives to further enhance the value of the Midland franchise. Through consistent investment in our technology platform and the development of additional fintech partnerships, we are steadily expanding our Banking-as-a-Service capabilities, which we believe will become a meaningful contributor to further balance sheet and earnings growth in the years to come,” said Mr. Ludwig.
Adjusted Earnings
Financial results for the fourth quarter of 2021 were impacted by $4.9 million in FHLB advance prepayment fees and a $1.8 million gain on the termination of an interest rate swap. Excluding these amounts and certain other income and expenses, adjusted earnings were $25.4 million, or $1.12 per diluted share, for the fourth quarter of 2021.
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 first quarter of 2022 was 3.50%, compared to 3.25% for the fourth quarter of 2021. The Company’s net interest margin benefits from accretion income on purchased loan portfolios, which contributed 3 and 4 basis points to net interest margin in the first quarter of 2022 and fourth quarter of 2021, respectively. Excluding the impact of accretion income, net interest margin increased 26 basis points from the fourth quarter of 2021, due primarily to a favorable shift in the mix of earning assets.
Relative to the first quarter of 2021, net interest margin increased from 3.45%. Accretion income on purchased loan portfolios contributed 8 basis points to net interest margin in the first quarter of 2021. Excluding the impact of accretion income, net interest margin increased 10 basis points from the first quarter of 2021, primarily due to a decrease in the cost of deposits.
Net Interest Income
Net interest income for the first quarter of 2022 was $56.8 million, an increase of 4.7% from $54.3 million for the fourth quarter of 2021. Accretion income associated with purchased loan portfolios totaled $0.6 million for the first quarter of 2022, compared to $0.8 million for the fourth quarter of 2021. Excluding accretion income, net interest income increased $2.7 million from the prior quarter, which was primarily due to higher average loan balances and an increase in net interest margin. PPP loan income totaled $1.2 million, including net loan origination fees of $1.1 million, in the first quarter of 2022, compared to $1.6 million, including net loan origination fees of $1.4 million, in the fourth quarter of 2021.
Relative to the first quarter of 2021, net interest income increased $5.0 million, or 9.6%. Accretion income for the first quarter of 2021 was $1.2 million. Excluding the impact of accretion income, net interest income increased due to higher average earning assets and a decrease in the cost of deposits. PPP loan income totaled $2.6 million, including net loan origination fees of $2.1 million, in the first quarter of 2021.
Noninterest Income
Noninterest income for the first quarter of 2022 was $15.6 million, a decrease of 30.7% from $22.5 million for the fourth quarter of 2021. Noninterest income for the fourth quarter of 2021 was positively impacted by $3.9 million in unrealized income on equity investments, a $1.8 million gain on the termination of an FHLB interest rate swap, and a $1.0 million gain on company-owned life insurance. Impairment on commercial MSRs negatively impacted noninterest income by $0.4 million and $2.1 million in the first quarter of 2022 and fourth quarter of 2021, respectively.
Relative to the first quarter of 2021, noninterest income increased 5.4% from $14.8 million. The increase was primarily attributable to higher levels of wealth management revenue, partially offset by a decline in residential mortgage banking revenue.
Wealth management revenue for the first quarter of 2022 was $7.1 million, which was consistent with the fourth quarter of 2021. Compared to the first quarter of 2021, wealth management revenue increased 20.4%, primarily due to the increase in assets under administration over the past year, including the acquisition of ATG Trust Company.
Noninterest Expense
Noninterest expense for the first quarter of 2022 was $40.9 million, compared with $45.8 million in the fourth quarter of 2021. Noninterest expense for the fourth quarter of 2021 included $4.9 million in FHLB advance prepayment fees and $0.2 million in integration and acquisition expenses. Excluding the FHLB advance prepayment fees and integration and acquisition expenses, noninterest expense was consistent with the fourth quarter of 2021.
Relative to the first quarter of 2021, noninterest expense increased 4.6% from $39.1 million, primarily due to higher salaries and employee benefits expense consistent with the overall growth of the Company.
Loan Portfolio
Total loans outstanding were $5.54 billion at March 31, 2022, compared with $5.22 billion at December 31, 2021, and $4.91 billion at March 31, 2021. The increase in total loans from December 31, 2021 was primarily attributable to higher balances of commercial real estate loans, partially offset by continued forgiveness of PPP loans.
Equipment finance balances increased $12.3 million from December 31, 2021 to $957.6 million at March 31, 2022.
Compared to loan balances at March 31, 2021, growth in equipment finance balances, other commercial loans, commercial real estate loans, and consumer loans was partially offset by declines in commercial FHA warehouse lines, PPP loans and residential real estate loans.
Deposits
Total deposits were $6.06 billion at March 31, 2022, compared with $6.11 billion at December 31, 2021, and $5.34 billion at March 31, 2021. The decrease in total deposits from the end of the prior quarter was primarily attributable to period-end fluctuations in commercial FHA servicing deposits.
Asset Quality
Nonperforming loans totaled $52.9 million, or 0.95% of total loans, at March 31, 2022, compared with $42.6 million, or 0.81% of total loans, at December 31, 2021. The increase in nonperforming loans was attributable to one commercial real estate loan where no loss is currently expected. At March 31, 2021, nonperforming loans totaled $52.8 million, or 1.08% of total loans.
Net charge-offs for the first quarter of 2022 were $2.3 million, or 0.17% of average loans on an annualized basis, compared to net charge-offs of $4.6 million, or 0.37% of average loans on an annualized basis, for the fourth quarter of 2021, and $1.7 million, or 0.14% of average loans on an annualized basis, for the first quarter of 2021.
The Company recorded a provision for credit losses on loans of $4.1 million for the first quarter of 2022, which was primarily related to the growth in total loans.
The Company’s allowance for credit losses on loans was 0.96% of total loans and 100.0% of nonperforming loans at March 31, 2022, compared with 0.98% of total loans and 119.9% of nonperforming loans at December 31, 2021.
Capital
At March 31, 2022, 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 Mar. 31, 2022 | Consolidated Ratios as of Mar. 31, 2022 | Minimum Regulatory Requirements (2) | |
| Total capital to risk-weighted assets | 10.73% | 11.74% | 10.50% |
| Tier 1 capital to risk-weighted assets | 9.99% | 8.82% | 8.50% |
| Tier 1 leverage ratio | 9.03% | 7.96% | 4.00% |
| Common equity Tier 1 capital | 9.99% | 7.80% | 7.00% |
| Tangible common equity to tangible assets (1) | NA | 6.43% | 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 first quarter of 2022, the Company repurchased 43,010 shares of its common stock at a weighted average price of $25.77 under its stock repurchase program. As of March 31, 2022, the Company had $18.6 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, April 29, 2022, to discuss its financial results. The call can be accessed via telephone at (877) 516-3531; conference ID: 1638388. A recorded replay can be accessed through May 6, 2022, by dialing (855) 859-2056; conference ID: 1638388.
A slide presentation relating to the first quarter 2022 financial results will be accessible prior to the scheduled conference call. This earnings release should be read together with the slide presentation. 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 March 31, 2022, the Company had total assets of approximately $7.34 billion, and its Wealth Management Group had assets under administration of approximately $4.04 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 | |||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||||
| (dollars in thousands, except per share data) | 2022 | 2021 | 2021 | 2021 | 2021 | ||||||||||||||||
| Earnings Summary | |||||||||||||||||||||
| Net interest income | $ | 56,827 | $ | 54,301 | $ | 51,396 | $ | 50,110 | $ | 51,868 | |||||||||||
| Provision for credit losses | 4,167 | 467 | (184 | ) | (455 | ) | 3,565 | ||||||||||||||
| Noninterest income | 15,613 | 22,523 | 15,143 | 17,417 | 14,816 | ||||||||||||||||
| Noninterest expense | 40,884 | 45,757 | 41,292 | 48,941 | 39,079 | ||||||||||||||||
| Income before income taxes | 27,389 | 30,600 | 25,431 | 19,041 | 24,040 | ||||||||||||||||
| Income taxes | 6,640 | 7,493 | 5,883 | (1,083 | ) | 5,502 | |||||||||||||||
| Net income | $ | 20,749 | $ | 23,107 | $ | 19,548 | $ | 20,124 | $ | 18,538 | |||||||||||
| Diluted earnings per common share | $ | 0.92 | $ | 1.02 | $ | 0.86 | $ | 0.88 | $ | 0.81 | |||||||||||
| Weighted average shares outstanding - diluted | 22,350,307 | 22,350,771 | 22,577,880 | 22,677,515 | 22,578,553 | ||||||||||||||||
| Return on average assets | 1.16 | % | 1.26 | % | 1.15 | % | 1.20 | % | 1.11 | % | |||||||||||
| Return on average shareholders' equity | 12.80 | % | 14.04 | % | 11.90 | % | 12.59 | % | 12.04 | % | |||||||||||
| Return on average tangible common equity (1) | 17.84 | % | 19.69 | % | 16.76 | % | 17.85 | % | 17.28 | % | |||||||||||
| Net interest margin | 3.50 | % | 3.25 | % | 3.34 | % | 3.29 | % | 3.45 | % | |||||||||||
| Efficiency ratio (1) | 55.73 | % | 52.61 | % | 58.78 | % | 60.19 | % | 57.14 | % | |||||||||||
| Adjusted Earnings Performance Summary (1) | |||||||||||||||||||||
| Adjusted earnings | $ | 20,815 | $ | 25,416 | $ | 19,616 | $ | 19,755 | $ | 18,434 | |||||||||||
| Adjusted diluted earnings per common share | $ | 0.92 | $ | 1.12 | $ | 0.86 | $ | 0.86 | $ | 0.81 | |||||||||||
| Adjusted return on average assets | 1.16 | % | 1.39 | % | 1.15 | % | 1.17 | % | 1.11 | % | |||||||||||
| Adjusted return on average shareholders' equity | 12.84 | % | 15.44 | % | 11.94 | % | 12.36 | % | 11.97 | % | |||||||||||
| Adjusted return on average tangible common equity | 17.89 | % | 21.65 | % | 16.82 | % | 17.52 | % | 17.18 | % | |||||||||||
| Adjusted pre-tax, pre-provision earnings | $ | 32,041 | $ | 36,324 | $ | 28,379 | $ | 26,967 | $ | 28,737 | |||||||||||
| Adjusted pre-tax, pre-provision return on average assets | 1.79 | % | 1.98 | % | 1.67 | % | 1.60 | % | 1.73 | % | |||||||||||
| (1) Non-GAAP financial measures. Refer to pages 12 - 14 for a reconciliation to the comparable GAAP financial measures. | |||||||||||||||||||||
| MIDLAND STATES BANCORP, INC. | |||||||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) | |||||||||||||||||||
| For the Quarter Ended | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| (in thousands, except per share data) | 2022 | 2021 | 2021 | 2021 | 2021 | ||||||||||||||
| Net interest income: | |||||||||||||||||||
| Interest income | $ | 62,748 | $ | 60,427 | $ | 58,490 | $ | 58,397 | $ | 60,503 | |||||||||
| Interest expense | 5,921 | 6,126 | 7,094 | 8,287 | 8,635 | ||||||||||||||
| Net interest income | 56,827 | 54,301 | 51,396 | 50,110 | 51,868 | ||||||||||||||
| Provision for credit losses: | |||||||||||||||||||
| Provision for credit losses on loans | 4,132 | - | - | - | 3,950 | ||||||||||||||
| Provision for credit losses on unfunded commitments | 256 | 388 | - | (265 | ) | (535 | ) | ||||||||||||
| Provision for other credit losses | (221 | ) | 79 | (184 | ) | (190 | ) | 150 | |||||||||||
| Total provision for credit losses | 4,167 | 467 | (184 | ) | (455 | ) | 3,565 | ||||||||||||
| Net interest income after provision for credit losses | 52,660 | 53,834 | 51,580 | 50,565 | 48,303 | ||||||||||||||
| Noninterest income: | |||||||||||||||||||
| Wealth management revenue | 7,139 | 7,176 | 7,175 | 6,529 | 5,931 | ||||||||||||||
| Residential mortgage banking revenue | 599 | 1,103 | 1,287 | 1,562 | 1,574 | ||||||||||||||
| Service charges on deposit accounts | 2,068 | 2,338 | 2,268 | 1,916 | 1,826 | ||||||||||||||
| Interchange revenue | 3,280 | 3,677 | 3,651 | 3,797 | 3,375 | ||||||||||||||
| Gain on sales of investment securities, net | - | - | 160 | 377 | - | ||||||||||||||
| Gain on termination of hedged interest swap | - | 1,845 | - | - | 314 | ||||||||||||||
| Impairment on commercial mortgage servicing rights | (394 | ) | (2,072 | ) | (3,037 | ) | (1,148 | ) | (1,275 | ) | |||||||||
| Company-owned life insurance | 1,019 | 1,904 | 869 | 863 | 860 | ||||||||||||||
| Other income | 1,902 | 6,552 | 2,770 | 3,521 | 2,211 | ||||||||||||||
| Total noninterest income | 15,613 | 22,523 | 15,143 | 17,417 | 14,816 | ||||||||||||||
| Noninterest expense: | |||||||||||||||||||
| Salaries and employee benefits | 21,870 | 22,109 | 22,175 | 22,071 | 20,528 | ||||||||||||||
| Occupancy and equipment | 3,755 | 3,429 | 3,701 | 3,796 | 3,940 | ||||||||||||||
| Data processing | 5,873 | 5,819 | 6,495 | 6,288 | 5,993 | ||||||||||||||
| Professional | 1,972 | 1,499 | 1,738 | 5,549 | 2,185 | ||||||||||||||
| Amortization of intangible assets | 1,398 | 1,425 | 1,445 | 1,470 | 1,515 | ||||||||||||||
| Loss on mortgage servicing rights held for sale | - | - | 79 | 143 | - | ||||||||||||||
| FHLB advances prepayment fees | - | 4,859 | - | 3,669 | 8 | ||||||||||||||
| Other expense | 6,016 | 6,617 | 5,659 | 5,955 | 4,910 | ||||||||||||||
| Total noninterest expense | 40,884 | 45,757 | 41,292 | 48,941 | 39,079 | ||||||||||||||
| Income before income taxes | 27,389 | 30,600 | 25,431 | 19,041 | 24,040 | ||||||||||||||
| Income taxes | 6,640 | 7,493 | 5,883 | (1,083 | ) | 5,502 | |||||||||||||
| Net income | $ | 20,749 | $ | 23,107 | $ | 19,548 | $ | 20,124 | $ | 18,538 | |||||||||
| Basic earnings per common share | $ | 0.92 | $ | 1.03 | $ | 0.86 | $ | 0.88 | $ | 0.81 | |||||||||
| Diluted earnings per common share | $ | 0.92 | $ | 1.02 | $ | 0.86 | $ | 0.88 | $ | 0.81 | |||||||||
| MIDLAND STATES BANCORP, INC. | |||||||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) | |||||||||||||||||||
| As of | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| (in thousands) | 2022 | 2021 | 2021 | 2021 | 2021 | ||||||||||||||
| Assets | |||||||||||||||||||
| Cash and cash equivalents | $ | 332,264 | $ | 680,371 | $ | 662,643 | $ | 425,100 | $ | 631,219 | |||||||||
| Investment securities | 858,246 | 916,132 | 900,319 | 756,831 | 690,390 | ||||||||||||||
| Loans | 5,539,961 | 5,224,801 | 4,915,554 | 4,835,866 | 4,910,806 | ||||||||||||||
| Allowance for credit losses on loans | (52,938 | ) | (51,062 | ) | (55,675 | ) | (58,664 | ) | (62,687 | ) | |||||||||
| Total loans, net | 5,487,023 | 5,173,739 | 4,859,879 | 4,777,202 | 4,848,119 | ||||||||||||||
| Loans held for sale | 8,931 | 32,045 | 26,621 | 12,187 | 55,174 | ||||||||||||||
| Premises and equipment, net | 69,746 | 70,792 | 71,241 | 71,803 | 73,255 | ||||||||||||||
| Other real estate owned | 11,537 | 12,059 | 11,931 | 12,768 | 20,304 | ||||||||||||||
| Loan servicing rights, at lower of cost or fair value | 27,484 | 28,865 | 30,916 | 34,577 | 36,876 | ||||||||||||||
| Goodwill | 161,904 | 161,904 | 161,904 | 161,904 | 161,904 | ||||||||||||||
| Other intangible assets, net | 22,976 | 24,374 | 26,065 | 27,900 | 26,867 | ||||||||||||||
| Cash surrender value of life insurance policies | 148,060 | 148,378 | 149,146 | 148,277 | 146,864 | ||||||||||||||
| Other assets | 210,544 | 195,146 | 193,294 | 201,461 | 193,814 | ||||||||||||||
| Total assets | $ | 7,338,715 | $ | 7,443,805 | $ | 7,093,959 | $ | 6,630,010 | $ | 6,884,786 | |||||||||
| Liabilities and Shareholders' Equity | |||||||||||||||||||
| Noninterest-bearing deposits | $ | 1,965,032 | $ | 2,245,701 | $ | 1,672,901 | $ | 1,366,453 | $ | 1,522,433 | |||||||||
| Interest-bearing deposits | 4,092,507 | 3,864,947 | 3,928,475 | 3,829,898 | 3,818,080 | ||||||||||||||
| Total deposits | 6,057,539 | 6,110,648 | 5,601,376 | 5,196,351 | 5,340,513 | ||||||||||||||
| Short-term borrowings | 60,352 | 76,803 | 66,666 | 75,985 | 71,728 | ||||||||||||||
| FHLB advances and other borrowings | 310,171 | 310,171 | 440,171 | 440,171 | 529,171 | ||||||||||||||
| Subordinated debt | 139,184 | 139,091 | 138,998 | 138,906 | 169,888 | ||||||||||||||
| Trust preferred debentures | 49,524 | 49,374 | 49,235 | 49,094 | 48,954 | ||||||||||||||
| Other liabilities | 76,959 | 93,881 | 139,669 | 81,317 | 89,065 | ||||||||||||||
| Total liabilities | 6,693,729 | 6,779,968 | 6,436,115 | 5,981,824 | 6,249,319 | ||||||||||||||
| Total shareholders’ equity | 644,986 | 663,837 | 657,844 | 648,186 | 635,467 | ||||||||||||||
| Total liabilities and shareholders’ equity | $ | 7,338,715 | $ | 7,443,805 | $ | 7,093,959 | $ | 6,630,010 | $ | 6,884,786 | |||||||||
| MIDLAND STATES BANCORP, INC. | ||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) | ||||||||||||||
| As of | ||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||
| (in thousands) | 2022 | 2021 | 2021 | 2021 | 2021 | |||||||||
| Loan Portfolio | ||||||||||||||
| Equipment finance loans | $ | 528,572 | $ | 521,973 | $ | 486,623 | $ | 464,380 | $ | 456,059 | ||||
| Equipment finance leases | 429,000 | 423,280 | 412,430 | 407,161 | 402,546 | |||||||||
| Commercial FHA warehouse lines | 83,999 | 91,927 | 180,248 | 129,607 | 205,115 | |||||||||
| SBA PPP loans | 22,862 | 52,477 | 82,410 | 146,728 | 211,564 | |||||||||
| Other commercial loans | 802,692 | 783,811 | 718,054 | 683,365 | 702,156 | |||||||||
| Total commercial loans and leases | 1,867,125 | 1,873,468 | 1,879,765 | 1,831,241 | 1,977,440 | |||||||||
| Commercial real estate | 2,114,041 | 1,816,828 | 1,562,013 | 1,540,489 | 1,494,031 | |||||||||
| Construction and land development | 188,668 | 193,749 | 200,792 | 212,508 | 191,870 | |||||||||
| Residential real estate | 329,331 | 338,151 | 344,414 | 366,612 | 398,501 | |||||||||
| Consumer | 1,040,796 | 1,002,605 | 928,570 | 885,016 | 848,964 | |||||||||
| Total loans | $ | 5,539,961 | $ | 5,224,801 | $ | 4,915,554 | $ | 4,835,866 | $ | 4,910,806 | ||||
| Deposit Portfolio | ||||||||||||||
| Noninterest-bearing demand | $ | 1,965,032 | $ | 2,245,701 | $ | 1,672,901 | $ | 1,366,453 | $ | 1,522,433 | ||||
| Interest-bearing: | ||||||||||||||
| Checking | 1,779,018 | 1,663,021 | 1,697,326 | 1,619,436 | 1,601,449 | |||||||||
| Money market | 964,352 | 869,067 | 852,836 | 787,688 | 819,455 | |||||||||
| Savings | 710,955 | 679,115 | 665,710 | 669,277 | 653,256 | |||||||||
| Time | 619,386 | 630,583 | 688,693 | 721,502 | 718,788 | |||||||||
| Brokered time | 18,796 | 23,161 | 23,910 | 31,995 | 25,132 | |||||||||
| Total deposits | $ | 6,057,539 | $ | 6,110,648 | $ | 5,601,376 | $ | 5,196,351 | $ | 5,340,513 | ||||
| MIDLAND STATES BANCORP, INC. | |||||||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) | |||||||||||||||||||
| For the Quarter Ended | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| (dollars in thousands) | 2022 | 2021 | 2021 | 2021 | 2021 | ||||||||||||||
| Average Balance Sheets | |||||||||||||||||||
| Cash and cash equivalents | $ | 384,231 | $ | 685,655 | $ | 525,848 | $ | 509,886 | $ | 350,061 | |||||||||
| Investment securities | 894,634 | 915,707 | 773,372 | 734,462 | 680,202 | ||||||||||||||
| Loans | 5,274,051 | 4,995,794 | 4,800,063 | 4,826,234 | 4,992,802 | ||||||||||||||
| Loans held for sale | 31,256 | 34,272 | 15,204 | 36,299 | 65,365 | ||||||||||||||
| Nonmarketable equity securities | 36,378 | 39,203 | 43,873 | 49,388 | 55,935 | ||||||||||||||
| Total interest-earning assets | 6,620,550 | 6,670,631 | 6,158,360 | 6,156,269 | 6,144,365 | ||||||||||||||
| Non-earning assets | 631,187 | 605,060 | 597,153 | 589,336 | 602,017 | ||||||||||||||
| Total assets | $ | 7,251,737 | $ | 7,275,691 | $ | 6,755,513 | $ | 6,745,605 | $ | 6,746,382 | |||||||||
| Interest-bearing deposits | $ | 3,953,249 | $ | 3,913,475 | $ | 3,895,970 | $ | 3,815,179 | $ | 3,757,108 | |||||||||
| Short-term borrowings | 70,044 | 66,677 | 68,103 | 65,727 | 75,544 | ||||||||||||||
| FHLB advances and other borrowings | 311,282 | 319,954 | 440,171 | 519,490 | 617,504 | ||||||||||||||
| Subordinated debt | 139,139 | 139,046 | 138,954 | 165,155 | 169,844 | ||||||||||||||
| Trust preferred debentures | 49,451 | 49,307 | 49,167 | 49,026 | 48,887 | ||||||||||||||
| Total interest-bearing liabilities | 4,523,165 | 4,488,459 | 4,592,365 | 4,614,577 | 4,668,887 | ||||||||||||||
| Noninterest-bearing deposits | 1,989,413 | 2,049,802 | 1,434,193 | 1,411,428 | 1,370,604 | ||||||||||||||
| Other noninterest-bearing liabilities | 81,832 | 84,538 | 77,204 | 78,521 | 82,230 | ||||||||||||||
| Shareholders' equity | 657,327 | 652,892 | 651,751 | 641,079 | 624,661 | ||||||||||||||
| Total liabilities and shareholders' equity | $ | 7,251,737 | $ | 7,275,691 | $ | 6,755,513 | $ | 6,745,605 | $ | 6,746,382 | |||||||||
| Yields | |||||||||||||||||||
| Earning Assets | |||||||||||||||||||
| Cash and cash equivalents | 0.18 | % | 0.16 | % | 0.16 | % | 0.11 | % | 0.11 | % | |||||||||
| Investment securities | 2.22 | % | 2.12 | % | 2.34 | % | 2.43 | % | 2.51 | % | |||||||||
| Loans | 4.40 | % | 4.36 | % | 4.42 | % | 4.43 | % | 4.50 | % | |||||||||
| Loans held for sale | 2.86 | % | 3.53 | % | 2.79 | % | 2.88 | % | 2.74 | % | |||||||||
| Nonmarketable equity securities | 5.40 | % | 5.07 | % | 5.05 | % | 4.94 | % | 4.93 | % | |||||||||
| Total interest-earning assets | 3.87 | % | 3.62 | % | 3.79 | % | 3.83 | % | 4.02 | % | |||||||||
| Interest-Bearing Liabilities | |||||||||||||||||||
| Interest-bearing deposits | 0.22 | % | 0.22 | % | 0.26 | % | 0.31 | % | 0.34 | % | |||||||||
| Short-term borrowings | 0.14 | % | 0.12 | % | 0.12 | % | 0.12 | % | 0.13 | % | |||||||||
| FHLB advances and other borrowings | 1.58 | % | 1.75 | % | 1.80 | % | 1.91 | % | 1.69 | % | |||||||||
| Subordinated debt | 5.78 | % | 5.78 | % | 5.79 | % | 5.61 | % | 5.57 | % | |||||||||
| Trust preferred debentures | 4.21 | % | 3.90 | % | 3.92 | % | 4.00 | % | 4.08 | % | |||||||||
| Total interest-bearing liabilities | 0.53 | % | 0.54 | % | 0.61 | % | 0.72 | % | 0.75 | % | |||||||||
| Cost of Deposits | 0.15 | % | 0.15 | % | 0.19 | % | 0.23 | % | 0.25 | % | |||||||||
| Net Interest Margin | 3.50 | % | 3.25 | % | 3.34 | % | 3.29 | % | 3.45 | % | |||||||||
| MIDLAND STATES BANCORP, INC. | |||||||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) | |||||||||||||||||||
| As of and for the Quarter Ended | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| (dollars in thousands, except per share data) | 2022 | 2021 | 2021 | 2021 | 2021 | ||||||||||||||
| Asset Quality | |||||||||||||||||||
| Loans 30-89 days past due | $ | 29,044 | $ | 17,514 | $ | 16,772 | $ | 20,224 | $ | 24,819 | |||||||||
| Nonperforming loans | 52,900 | 42,580 | 54,620 | 61,363 | 52,826 | ||||||||||||||
| Nonperforming assets | 66,164 | 57,068 | 69,261 | 76,926 | 75,004 | ||||||||||||||
| Net charge-offs | 2,255 | 4,613 | 2,989 | 4,023 | 1,706 | ||||||||||||||
| Loans 30-89 days past due to total loans | 0.52 | % | 0.34 | % | 0.34 | % | 0.42 | % | 0.51 | % | |||||||||
| Nonperforming loans to total loans | 0.95 | % | 0.81 | % | 1.11 | % | 1.27 | % | 1.08 | % | |||||||||
| Nonperforming assets to total assets | 0.90 | % | 0.77 | % | 0.98 | % | 1.16 | % | 1.09 | % | |||||||||
| Allowance for credit losses to total loans | 0.96 | % | 0.98 | % | 1.13 | % | 1.21 | % | 1.28 | % | |||||||||
| Allowance for credit losses to nonperforming loans | 100.07 | % | 119.92 | % | 101.93 | % | 95.60 | % | 118.67 | % | |||||||||
| Net charge-offs to average loans | 0.17 | % | 0.37 | % | 0.25 | % | 0.33 | % | 0.14 | % | |||||||||
| Wealth Management | |||||||||||||||||||
| Trust assets under administration | $ | 4,044,138 | $ | 4,217,412 | $ | 4,058,168 | $ | 4,077,581 | $ | 3,560,427 | |||||||||
| Market Data | |||||||||||||||||||
| Book value per share at period end | $ | 29.26 | $ | 30.11 | $ | 29.64 | $ | 28.96 | $ | 28.43 | |||||||||
| Tangible book value per share at period end (1) | $ | 20.87 | $ | 21.66 | $ | 21.17 | $ | 20.48 | $ | 19.98 | |||||||||
| Market price at period end | $ | 28.86 | $ | 24.79 | $ | 24.73 | $ | 26.27 | $ | 27.74 | |||||||||
| Shares outstanding at period end | 22,044,626 | 22,050,537 | 22,193,141 | 22,380,492 | 22,351,740 | ||||||||||||||
| Capital | |||||||||||||||||||
| Total capital to risk-weighted assets | 11.74 | % | 12.19 | % | 13.10 | % | 13.11 | % | 13.73 | % | |||||||||
| Tier 1 capital to risk-weighted assets | 8.82 | % | 9.16 | % | 9.73 | % | 9.64 | % | 9.62 | % | |||||||||
| Tier 1 common capital to risk-weighted assets | 7.80 | % | 8.08 | % | 8.55 | % | 8.44 | % | 8.39 | % | |||||||||
| Tier 1 leverage ratio | 7.96 | % | 7.75 | % | 8.16 | % | 8.00 | % | 7.79 | % | |||||||||
| Tangible common equity to tangible assets (1) | 6.43 | % | 6.58 | % | 6.80 | % | 7.12 | % | 6.67 | % | |||||||||
| (1) Non-GAAP financial measures. Refer to pages 12 - 14 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 | |||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||||
| (dollars in thousands, except per share data) | 2022 | 2021 | 2021 | 2021 | 2021 | ||||||||||||||||
| Income before income taxes - GAAP | $ | 27,389 | $ | 30,600 | $ | 25,431 | $ | 19,041 | $ | 24,040 | |||||||||||
| Adjustments to noninterest income: | |||||||||||||||||||||
| Gain on sales of investment securities, net | - | - | 160 | 377 | - | ||||||||||||||||
| Gain on termination of hedged interest rate swap | - | 1,845 | - | - | 314 | ||||||||||||||||
| Other income | - | - | - | (27 | ) | 75 | |||||||||||||||
| Total adjustments to noninterest income | - | 1,845 | 160 | 350 | 389 | ||||||||||||||||
| Adjustments to noninterest expense: | |||||||||||||||||||||
| Loss on mortgage servicing rights held for sale | - | - | 79 | 143 | - | ||||||||||||||||
| FHLB advances prepayment fees | - | 4,859 | - | 3,669 | 8 | ||||||||||||||||
| Integration and acquisition expenses | 91 | 171 | 176 | 3,771 | 238 | ||||||||||||||||
| Total adjustments to noninterest expense | 91 | 5,030 | 255 | 7,583 | 246 | ||||||||||||||||
| Adjusted earnings pre tax | 27,480 | 33,785 | 25,526 | 26,274 | 23,897 | ||||||||||||||||
| Adjusted earnings tax | 6,665 | 8,369 | 5,910 | 6,519 | 5,463 | ||||||||||||||||
| Adjusted earnings - non-GAAP | $ | 20,815 | $ | 25,416 | $ | 19,616 | $ | 19,755 | $ | 18,434 | |||||||||||
| Adjusted diluted earnings per common share | $ | 0.92 | $ | 1.12 | $ | 0.86 | $ | 0.86 | $ | 0.81 | |||||||||||
| Adjusted return on average assets | 1.16 | % | 1.39 | % | 1.15 | % | 1.17 | % | 1.11 | % | |||||||||||
| Adjusted return on average shareholders' equity | 12.84 | % | 15.44 | % | 11.94 | % | 12.36 | % | 11.97 | % | |||||||||||
| Adjusted return on average tangible common equity | 17.89 | % | 21.65 | % | 16.82 | % | 17.52 | % | 17.18 | % | |||||||||||
| Adjusted Pre-Tax, Pre-Provision Earnings Reconciliation | |||||||||||||||||||||
| For the Quarter Ended | |||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||||
| (dollars in thousands) | 2022 | 2021 | 2021 | 2021 | 2021 | ||||||||||||||||
| Adjusted earnings pre tax - non-GAAP | $ | 27,480 | $ | 33,785 | $ | 25,526 | $ | 26,274 | $ | 23,897 | |||||||||||
| Provision for credit losses | 4,167 | 467 | (184 | ) | (455 | ) | 3,565 | ||||||||||||||
| Impairment on commercial mortgage servicing rights | 394 | 2,072 | 3,037 | 1,148 | 1,275 | ||||||||||||||||
| Adjusted pre-tax, pre-provision earnings - non-GAAP | $ | 32,041 | $ | 36,324 | $ | 28,379 | $ | 26,967 | $ | 28,737 | |||||||||||
| Adjusted pre-tax, pre-provision return on average assets | 1.79 | % | 1.98 | % | 1.67 | % | 1.60 | % | 1.73 | % | |||||||||||
| MIDLAND STATES BANCORP, INC. | ||||||||||||||||||||||||
| RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued) | ||||||||||||||||||||||||
| Efficiency Ratio Reconciliation | ||||||||||||||||||||||||
| For the Quarter Ended | ||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||
| (dollars in thousands) | 2022 | 2021 | 2021 | 2021 | 2021 | |||||||||||||||||||
| Noninterest expense - GAAP | $ | 40,884 | $ | 45,757 | $ | 41,292 | $ | 48,941 | $ | 39,079 | ||||||||||||||
| Loss on mortgage servicing rights held for sale | - | - | (79 | ) | (143 | ) | - | |||||||||||||||||
| FHLB advances prepayment fees | - | (4,859 | ) | - | (3,669 | ) | (8 | ) | ||||||||||||||||
| Integration and acquisition expenses | (91 | ) | (171 | ) | (176 | ) | (3,771 | ) | (238 | ) | ||||||||||||||
| Adjusted noninterest expense | $ | 40,793 | $ | 40,727 | $ | 41,037 | $ | 41,358 | $ | 38,833 | ||||||||||||||
| Net interest income - GAAP | $ | 56,827 | $ | 54,301 | $ | 51,396 | $ | 50,110 | $ | 51,868 | ||||||||||||||
| Effect of tax-exempt income | 369 | 372 | 402 | 383 | 386 | |||||||||||||||||||
| Adjusted net interest income | 57,196 | 54,673 | 51,798 | 50,493 | 52,254 | |||||||||||||||||||
| Noninterest income - GAAP | 15,613 | 22,523 | 15,143 | 17,417 | 14,816 | |||||||||||||||||||
| Impairment on commercial mortgage servicing rights | 394 | 2,072 | 3,037 | 1,148 | 1,275 | |||||||||||||||||||
| Gain on sales of investment securities, net | - | - | (160 | ) | (377 | ) | - | |||||||||||||||||
| Gain on termination of hedged interest rate swap | - | (1,845 | ) | - | - | (314 | ) | |||||||||||||||||
| Other | - | - | - | 27 | (75 | ) | ||||||||||||||||||
| Adjusted noninterest income | 16,007 | 22,750 | 18,020 | 18,215 | 15,702 | |||||||||||||||||||
| Adjusted total revenue | $ | 73,203 | $ | 77,423 | $ | 69,818 | $ | 68,708 | $ | 67,956 | ||||||||||||||
| Efficiency ratio | 55.73 | % | 52.61 | % | 58.78 | % | 60.19 | % | 57.14 | % | ||||||||||||||
| MIDLAND STATES BANCORP, INC. | ||||||||||||||||||||||||
| RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued) | ||||||||||||||||||||||||
| Tangible Common Equity to Tangible Assets Ratio and Tangible Book Value Per Share | ||||||||||||||||||||||||
| As of | ||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||
| (dollars in thousands, except per share data) | 2022 | 2021 | 2021 | 2021 | 2021 | |||||||||||||||||||
| Shareholders' Equity to Tangible Common Equity | ||||||||||||||||||||||||
| Total shareholders' equity—GAAP | $ | 644,986 | $ | 663,837 | $ | 657,844 | $ | 648,186 | $ | 635,467 | ||||||||||||||
| Adjustments: | ||||||||||||||||||||||||
| Goodwill | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | ||||||||||||||
| Other intangible assets, net | (22,976 | ) | (24,374 | ) | (26,065 | ) | (27,900 | ) | (26,867 | ) | ||||||||||||||
| Tangible common equity | $ | 460,106 | $ | 477,558 | $ | 469,875 | $ | 458,382 | $ | 446,696 | ||||||||||||||
| Total Assets to Tangible Assets: | ||||||||||||||||||||||||
| Total assets—GAAP | $ | 7,338,715 | $ | 7,443,805 | $ | 7,093,959 | $ | 6,630,010 | $ | 6,884,786 | ||||||||||||||
| Adjustments: | ||||||||||||||||||||||||
| Goodwill | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | ||||||||||||||
| Other intangible assets, net | (22,976 | ) | (24,374 | ) | (26,065 | ) | (27,900 | ) | (26,867 | ) | ||||||||||||||
| Tangible assets | $ | 7,153,835 | $ | 7,257,527 | $ | 6,905,990 | $ | 6,440,206 | $ | 6,696,015 | ||||||||||||||
| Common Shares Outstanding | 22,044,626 | 22,050,537 | 22,193,141 | 22,380,492 | 22,351,740 | |||||||||||||||||||
| Tangible Common Equity to Tangible Assets | 6.43 | % | 6.58 | % | 6.80 | % | 7.12 | % | 6.67 | % | ||||||||||||||
| Tangible Book Value Per Share | $ | 20.87 | $ | 21.66 | $ | 21.17 | $ | 20.48 | $ | 19.98 | ||||||||||||||
| Return on Average Tangible Common Equity (ROATCE) | ||||||||||||||||||||||||
| For the Quarter Ended | ||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||
| (dollars in thousands) | 2022 | 2021 | 2021 | 2021 | 2021 | |||||||||||||||||||
| Net income available to common shareholders | $ | 20,749 | $ | 23,107 | $ | 19,548 | $ | 20,124 | $ | 18,538 | ||||||||||||||
| Average total shareholders' equity—GAAP | $ | 657,327 | $ | 652,892 | $ | 651,751 | $ | 641,079 | $ | 624,661 | ||||||||||||||
| Adjustments: | ||||||||||||||||||||||||
| Goodwill | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | ||||||||||||||
| Other intangible assets, net | (23,638 | ) | (25,311 | ) | (27,132 | ) | (26,931 | ) | (27,578 | ) | ||||||||||||||
| Average tangible common equity | $ | 471,785 | $ | 465,677 | $ | 462,715 | $ | 452,244 | $ | 435,179 | ||||||||||||||
| ROATCE | 17.84 | % | 19.69 | % | 16.76 | % | 17.85 | % | 17.28 | % | ||||||||||||||
Exhibit 99.2
1 Midland States Bancorp, Inc. NASDAQ: MSBI First Quarter 2022 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 1Q22 3 Strong Expense Management 1Q22 Earnings • Efficiency Ratio (1) of 55.7% • Adjusted noninterest expense (1) consistent with prior quarter • More productive commercial banking teams driving strong loan growth without materially impacting expense levels Significant Expansion in Net Interest Margin • NIM increased 25 basis points to 3.50% • Strong loan production enabled redeployment of excess liquidity into loan portfolio • Higher interest rates leading to improved loan pricing on new originations • Net income of $20.7 million, or $0.92 diluted EPS • Pre - tax, pre - provision earnings (1) of $32.0 million • ROAA of 1.16%, ROATCE (1) of 17.84%, and Adjusted PTPP ROAA (1) of 1.79% all increased from prior year Notes: (1) Represents a non - GAAP financial measure. See “Non - GAAP Reconciliation” in the appendix. Another Strong Quarter of Loan Production • Total commercial and CRE loan production increased 115% compared to first quarter of 2021 • Total loans increased 24.1% annualized • CRE loans, including multifamily, increased $297 million from the end of the prior quarter
4 Loan Portfolio Total Loans and Average Loan Yield • Total loans increased $315.2 million from prior quarter to $5.54 billion • Growth in CRE loans, equipment finance, conventional commercial loans, and consumer loans offset lower end - of - period balances on commercial FHA warehouse credit lines, residential real estate loans, and lower PPP loans • Equipment finance balances increased $12.3 million, or 1.3% from end of prior quarter • Excluding PPP loans and commercial FHA warehouse credit lines, total loans increased at an annualized rate of 27.8% during 1Q22 • PPP loans were $22.9 million at Mar. 31, 2022, a decrease of $29.6 million from Dec. 31, 2021 Loan Portfolio Mix (in millions, as of quarter - end) (in millions, as of quarter - end) $4,911 $4,836 $4,916 $5,225 $5,540 4.50% 4.43% 4.42% 4.36% 4.40% 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022 Total Loans Average Loan Yield 1Q 2022 4Q 2021 1Q 2021 Commercial loans and leases $ 1,867 $ 1,873 $ 1,977 Commercial real estate 2,114 1,817 1,494 Construction and land development 189 194 192 Residential real estate 329 338 399 Consumer 1,041 1,003 849 Total Loans $5,540 $5,225 $4,911 Total Loans ex. Commercial FHA Lines and PPP $5,433 $5,080 $4,494
5 Total Deposits Total Deposits and Cost of Deposits • Total deposits decreased $53.1 million from prior quarter to $6.06 billion • Decrease in deposits primarily attributable to fluctuations in end - of - period balances of commercial FHA servicing deposits • Decrease in noninterest - bearing deposits partially offset by increases in lower - cost interest - bearing deposits • Strong business development momentum in St. Louis resulted in $120 million increase in commercial deposit balances in that market during 1Q22 Deposit Mix (in millions, as of quarter - end) (in millions, as of quarter - end) $5,341 $5,196 $5,601 $6,111 $6,057 0.25% 0.23% 0.19% 0.15% 0.15% 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022 Total Deposits Cost of Deposits 1Q 2022 4Q 2021 1Q 2021 Noninterest - bearing demand $ 1,965 $ 2,246 $ 1,522 Interest - bearing: Checking 1,779 1,663 1,601 Money market 964 869 819 Savings 711 679 653 Time 619 631 719 Brokered time 19 23 25 Total Deposits $6,057 $6,111 $5,341
6 • Net interest income increased 4.7% from the prior quarter due primarily to higher average loan balances and an increase in net interest margin • Net interest margin, excluding accretion income, increased 26 bps from prior quarter due primarily to the redeployment of excess liquidity into the loan portfolio • Cash and cash equivalents declined by $348.1 million from end of prior quarter • Average rate on new and renewed loan originations increased 17 bps to 4.10% in March 2022 from 3.93% in December 2021 » Midland Equipment Finance yields increased 76 bps, while other commercial loan yields increased 7 bps Net Interest Income/Margin Net Interest Margin Net Interest Income (in millions) $1.2 $1.3 $1.0 $0.8 $0.6 $51.9 $50.1 $51.4 $54.3 $56.8 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022 NII Accretion Income 0.08% 0.09% 0.07% 0.04% 0.03% 3.45% 3.29% 3.34% 3.25% 3.50% 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022 NIM Accretion Income
7 • During 1Q22, assets under administration decreased $173.3 million, primarily due to market performance • Wealth Management revenue was consistent with prior quarter, as seasonal tax preparation fees offset the decrease in AUA Wealth Management Wealth Management Revenue Assets Under Administration (in millions) (in millions ) $3,560 $4,078 $4,058 $4,217 $4,044 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022 $5.93 $6.53 $7.18 $7.18 $7.14 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022
8 Noninterest Income • Noninterest income decreased 30.7% from prior quarter, which was positively impacted by a number of one - time items • Impairment on commercial MSRs impacted noninterest income by $0.4 million and $2.1 million in 1Q22 and 4Q21, respectively • Excluding the impact of the one - time items and impairment of commercial MSRs, noninterest income was lower than the prior quarter due to slight declines in most areas Noninterest Income (in millions) $14.8 $17.4 $15.3 $22.5 $15.6 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022 Wealth Management Interchange Service Charges on Deposits Residential Mortgage All Other
9 Noninterest Expense and Operating Efficiency • Efficiency Ratio (1) was 55.7% in 1Q22 vs. 52.6% in 4Q21 • Adjustments to non - interest expense: • Excluding these adjustments, noninterest expense was consistent with the prior quarter • Operating expense run - rate expected to be $41.0 - $42.0 million in 2022 Noninterest Expense and Efficiency Ratio (1) (Noninterest expense in millions) Notes: (1) Represents a non - GAAP financial measure. See “Non - GAAP Reconciliation” in the appendix. ($ in millions) 1Q22 4Q21 Integration and acquisition related expenses ($0.1) ($0.2) FHLB advance prepayment fee -- ($4.9) $0.2 $7.6 $0.3 $5.0 $0.1 $39.1 $48.9 $41.3 $45.8 $40.9 57.1% 60.2% 58.8% 52.6% 55.7% 50.0% 55.0% 60.0% 65.0% 70.0% $20.0 $25.0 $30.0 $35.0 $40.0 $45.0 $50.0 $55.0 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022 Total Noninterest Expense Adjustments to Noninterest Expense Efficiency Ratio
10 Asset Quality NCO / Average Loans • Nonperforming loans increased $10.3 million due to the addition of one commercial real estate loan where no loss is currently expected • Generally positive trends in the loan portfolio with continued upgrades of watch list loans • Net charge - offs of $2.3 million, or 0.17% of average loans • Provision for credit losses on loans of $4.1 million primarily related to the growth in total loans Nonperforming Loans / Total Loans (Total Loans as of quarter - end) 1.08% 1.27% 1.11% 0.81% 0.95% 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022 0.14% 0.33% 0.25% 0.37% 0.17% 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022
11 Changes in Allowance for Credit Losses ACL 12/31/21 ACL 3/31/22 ($ in thousands) Specific Reserves Portfolio Changes Economic Factors ▪ Changes to specific reserves ▪ New loans ▪ Changes in credit quality including risk ratings ▪ Changes in portfolio mix ▪ Aging of existing portfolio ▪ Other charge - offs and recoveries ▪ Changes to macro - economic variables and forecasts ▪ Changes to other economic qualitative factors
12 ACL by Portfolio Portfolio Total Loans at 3/31/22 ACL % of Total Loans Total Loans at 12/31/21 ACL % of Total Loans Commercial $ 796,498 $ 5,078 0.64% $ 770,670 $ 5,783 0.75% Warehouse Lines 83,999 - 0.00% 91,927 - 0.00% Commercial Other 641,628 7,543 1.18% 679,518 8,592 1.26% Equipment Finance 528,572 7,288 1.38% 521,973 8,262 1.58% Paycheck Protection Program 22,862 34 0.15% 52,477 79 0.15% Lease Financing 429,000 7,264 1.69% 423,280 7,469 1.76% CRE non - owner occupied 1,291,239 18,132 1.40% 1,105,333 14,771 1.34% CRE owner occupied 499,871 5,646 1.13% 469,658 5,941 1.26% Multi - family 252,507 2,163 0.86% 171,875 1,740 1.01% Farmland 70,424 336 0.48% 69,962 541 0.77% Construction and Land Development 188,668 816 0.43% 193,749 972 0.50% Residential RE First Lien 268,787 2,924 1.09% 274,412 2,314 0.84% Other Residential 60,544 364 0.60% 63,738 381 0.60% Consumer 101,692 310 0.30% 106,008 307 0.29% Consumer Other (1) 939,104 2,362 0.25% 896,598 2,251 0.25% Total Loans 5,539,961 52,938 0.96% 5,224,801 51,062 0.98% Loans (excluding GreenSky, PPP and warehouse lines) 4,452,413 50,401 1.13% 4,148,188 48,608 1.17% ($ in thousands) Notes: (1) Primarily consists of loans originated through GreenSky relationship
13 Outlook • Loan pipeline remains very healthy and should support continued strong loan growth • Continued loan growth and asset sensitive balance sheet expected to drive further expansion in net interest margin as interest rates increase • Closing of FNBC branch acquisition in 2Q22 will provide additional low - cost deposits to fund loan growth • Strong expense management should lead to further operating leverage as loan growth and NIM expansion generate higher levels of revenue • Consistent investment in technology platform and development of additional fintech partnerships building the foundation for growth in Banking - as - a - Service over the coming years • Evaluating best options to strengthen capital ratios to support continued strong loan growth, while optimizing capital stack 13
14 APPENDIX
15 Paycheck Protection Program Overview Paycheck Protection Program (as of 3/31/22) Loans Outstanding $22.9 million Total Fees Earned $15.3 million Fees Recognized in 1Q22 $1.1 million Remaining Fees to be Recognized $0.9 million Impact on 1Q22 Financials At or for the Three Months Ended 3/31/22 Metrics Excluding PPP Impact Total Loans $5.54 billion $5.52 billion Average Loans $5.27 billion $5.24 billion Net Interest Income FTE (1) $57.2 million $56.0 million Net Interest Margin (1) 3.50% 3.45% ACL/Total Loans 0.96% 0.96% 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 12/31/21 As of 3/31/22 Loans Submitted to SBA $342.4 million $362.7 million Loans Forgiven by SBA $333.0 million $357.2 million Percentage of PPP Loans Forgiven 87.5% 93.9%
16 Commercial Loans and Leases by Industry RE / Rental & Leasing 25.0% Assisted Living 13.9% All Others 11.7% Construction - General 7.2% Manufacturing 6.5% Finance and Insurance 6.3% Accommodation & Food Svcs 5.8% Trans. / Ground Passenger 4.8% Ag., Forestry, & Fishing 4.0% General Freight Trucking 3.8% Retail Trade 3.6% Wholesale Trade 3.1% Other Services 2.3% Health Care 2.0% Industries as a percentage of Commercial, CRE and Equipment Finance Loans and Leases with outstanding balances of $4.17 billion as of 3/31/22
17 Commercial Real Estate Portfolio by Collateral Type Skilled Nursing 16.6% Retail 14.9% Multi - Family 12.7% Industrial / Warehouse 8.1% Assisted Living 7.9% Hotel/Motel 7.3% Office 6.4% All Others 5.1% Farmland 3.1% Residential 1 - 4 Family 2.8% C - Store / Gas Station 2.8% Special Purpose 2.8% Medical Building 2.7% Mixed Use / Other 2.5% Developed Land 1.6% Restaurant 1.4% Raw Land 1.3% Collateral type as a percentage of the Commercial Real Estate and Construction Portfolio with outstanding balances of $2.30 billion as of 3/31/22 CRE Concentration (as of 3/31/22) CRE as a % of Total Loans 38.2% CRE as a % of Total Risk - Based Capital (1) 246.8% Notes: (1) Represents non - owner occupied CRE loans only
18 Capital and Liquidity Overview Capital Ratios (as of 3/31/22) Liquidity Sources (as of 3/31/22) 6.43% 7.80% 7.96% 8.82% 11.74% 9.99% 9.03% 9.99% 10.73% 0.00% 5.00% 10.00% 15.00% TCE/TA Tier 1 Common Tier 1 Leverage Tier 1 RBC Total RBC Consolidated Bank Level ($ in millions) Cash and Cash Equivalents $ 332.3 Unpledged Securities 362.0 FHLB Committed Liquidity 1,007.1 FRB Discount Window Availability 64.8 Total Estimated Liquidity $ 1,766.2 Conditional Funding Based on Market Conditions Additional Credit Facility $ 250.0 Brokered CDs (additional capacity) $ 500.0 Other Liquidity Holding Company Cash Position of $41.2 Million Holding Company Line of Credit of $15.0 Million
19 (dollars in thousands, except per share data) Income before income taxes - GAAP $ 27,389 $ 30,600 $ 25,431 $ 19,041 $ 24,040 Adjustments to noninterest income: Gain on sales of investment securities, net - - 160 377 - Gain on termination of hedged interest rate swap - 1,845 - - 314 Other income - - - (27) 75 Total adjustments to noninterest income - 1,845 160 350 389 Adjustments to noninterest expense: Loss on mortgage servicing rights held for sale - - 79 143 - FHLB advances prepayment fees - 4,859 - 3,669 8 Integration and acquisition expenses 91 171 176 3,771 238 Total adjustments to noninterest expense 91 5,030 255 7,583 246 Adjusted earnings pre tax 27,480 33,785 25,526 26,274 23,897 Adjusted earnings tax 6,665 8,369 5,910 6,519 5,463 Adjusted earnings - non-GAAP $ 20,815 $ 25,416 $ 19,616 $ 19,755 $ 18,434 Adjusted diluted earnings per common share $ 0.92 $ 1.12 $ 0.86 $ 0.86 $ 0.81 Adjusted return on average assets 1.16% 1.39% 1.15% 1.17% 1.11% Adjusted return on average shareholders' equity 12.84% 15.44% 11.94% 12.36% 11.97% Adjusted return on average tangible common equity 17.89% 21.65% 16.82% 17.52% 17.18% (dollars in thousands) Adjusted earnings pre tax - non-GAAP $ 27,480 $ 33,785 $ 25,526 $ 26,274 $ 23,897 Provision for credit losses 4,167 467 (184) (455) 3,565 Impairment on commercial mortgage servicing rights 394 2,072 3,037 1,148 1,275 Adjusted pre-tax, pre-provision earnings - non-GAAP $ 32,041 $ 36,324 $ 28,379 $ 26,967 $ 28,737 Adjusted pre-tax, pre-provision return on average assets 1.79% 1.98% 1.67% 1.60% 1.73% MIDLAND STATES BANCORP, INC. Adjusted Earnings Reconciliation RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) 2021 September 30, For the Quarter Ended June 30, 20212021 December 31, 2022 March 31, 2021 March 31, March 31, 20212021 June 30, Adjusted Pre-Tax, Pre-Provision Earnings Reconciliation For the Quarter Ended September 30, 20212021 December 31,March 31, 2022
20 (dollars in thousands) Noninterest expense - GAAP $ 40,884 $ 45,757 $ 41,292 $ 48,941 $ 39,079 Loss on mortgage servicing rights held for sale - - (79) (143) - FHLB advances prepayment fees - (4,859) - (3,669) (8) Integration and acquisition expenses (91) (171) (176) (3,771) (238) Adjusted noninterest expense $ 40,793 $ 40,727 $ 41,037 $ 41,358 $ 38,833 Net interest income - GAAP $ 56,827 $ 54,301 $ 51,396 $ 50,110 $ 51,868 Effect of tax-exempt income 369 372 402 383 386 Adjusted net interest income 57,196 54,673 51,798 50,493 52,254 Noninterest income - GAAP 15,613 22,523 15,143 17,417 14,816 Impairment on commercial mortgage servicing rights 394 2,072 3,037 1,148 1,275 Gain on sales of investment securities, net - - (160) (377) - Gain on termination of hedged interest rate swap - (1,845) - - (314) Other - - - 27 (75) Adjusted noninterest income 16,007 22,750 18,020 18,215 15,702 Adjusted total revenue $ 73,203 $ 77,423 $ 69,818 $ 68,708 $ 67,956 Efficiency ratio 55.73% 52.61% 58.78% 60.19% 57.14% 2021 March 31, MIDLAND STATES BANCORP, INC. Efficiency Ratio Reconciliation RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued) 2021 September 30, For the Quarter Ended June 30, 20212021 December 31, 2022 March 31,
21 (dollars in thousands, except per share data) Shareholders' Equity to Tangible Common Equity Total shareholders' equity—GAAP $ 644,986 $ 663,837 $ 657,844 $ 648,186 $ 635,467 Adjustments: Goodwill (161,904) (161,904) (161,904) (161,904) (161,904) Other intangible assets, net (22,976) (24,374) (26,065) (27,900) (26,867) Tangible common equity $ 460,106 $ 477,558 $ 469,875 $ 458,382 $ 446,696 Total Assets to Tangible Assets: Total assets—GAAP $ 7,338,715 $ 7,443,805 $ 7,093,959 $ 6,630,010 $ 6,884,786 Adjustments: Goodwill (161,904) (161,904) (161,904) (161,904) (161,904) Other intangible assets, net (22,976) (24,374) (26,065) (27,900) (26,867) Tangible assets $ 7,153,835 $ 7,257,527 $ 6,905,990 $ 6,440,206 $ 6,696,015 Common Shares Outstanding 22,044,626 22,050,537 22,193,141 22,380,492 22,351,740 Tangible Common Equity to Tangible Assets 6.43% 6.58% 6.80% 7.12% 6.67% Tangible Book Value Per Share $ 20.87 $ 21.66 $ 21.17 $ 20.48 $ 19.98 (dollars in thousands) Net income available to common shareholders $ 20,749 $ 23,107 $ 19,548 $ 20,124 $ 18,538 Average total shareholders' equity—GAAP $ 657,327 $ 652,892 $ 651,751 $ 641,079 $ 624,661 Adjustments: Goodwill (161,904) (161,904) (161,904) (161,904) (161,904) Other intangible assets, net (23,638) (25,311) (27,132) (26,931) (27,578) Average tangible common equity $ 471,785 $ 465,677 $ 462,715 $ 452,244 $ 435,179 ROATCE 17.84% 19.69% 16.76% 17.85% 17.28% 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 September 30, As of June 30, 20212021 December 31, 2022 March 31, Return on Average Tangible Common Equity (ROATCE) 2021 March 31, 2021 March 31, 2021 June 30, 2021 September 30, For the Quarter Ended 2021 December 31, 2022 March 31,