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United States

Securities And Exchange Commission
Washington, DC 20549

 

FORM 8-K

 

Current Report Pursuant to
Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported): July 28, 2016

 

Midland States Bancorp, Inc.
(Exact Name of Registrant as Specified in Charter)

 

Illinois 001-35272 37-1233196
(State or Other Jurisdiction of Incorporation) (Commission File Number) (IRS Employer Identification No.)

 

1201 Network Centre Drive
Effingham, Illinois 62401
(Address of Principal Executive Offices) (Zip Code)

 

Registrant’s telephone number, including area code: (217) 342-7321

 

N/A
(Former Name or Former Address, if Changed Since Last Report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On July 28, 2016, Midland States Bancorp, Inc. (the “Company”) issued a press release announcing its earnings results for the second quarter of 2016. The press release is attached as Exhibit 99.1.

 

Item 7.01. Regulation FD Disclosure

 

On July 28, 2016, the Company made available on its website a slide presentation regarding the Company's second quarter 2016 financial results, which will be used as part of a publicly accessible conference call on July 29, 2016. 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.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit
No.		   Description
     
99.1   Press Release of Midland States Bancorp, Inc., dated July 28, 2016
     
99.2   Slide Presentation of Midland States Bancorp, Inc. regarding second quarter 2016 financial results

 

 

 

 

SignatureS

 

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.

 

Date:  July 28, 2016 Midland States Bancorp, Inc.
       
       
  By: /s/ Douglas J. Tucker  
  Name: Douglas J. Tucker  
  Title: Senior Vice President and Corporate Counsel

 

 

 

  

 

 

 

 

 

 

 

 

 

EXHIBIT INDEX

 

Exhibit
No.		   Description
     
99.1   Press Release of Midland States Bancorp, Inc., dated July 28, 2016
     
99.2   Slide Presentation of Midland States Bancorp, Inc. regarding second quarter 2016 financial results

 

EdgarFiling

EXHIBIT 99.1

Midland States Bancorp, Inc. Announces 2016 Second Quarter Results

Second Quarter 2016 Summary

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

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

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

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

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

Net Interest Income

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

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

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

Net Interest Margin

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

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

Noninterest Income

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

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

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

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

Noninterest Expense

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

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

Loan Portfolio

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

Purchased Credit Impaired Loans

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

Deposits

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

Asset Quality

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

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

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

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

Capital

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

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

Conference Call, Webcast and Slide Presentation

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

A slide presentation relating to the second quarter results will be accessible prior to the scheduled conference call.  The slide presentation and webcast of the conference call can be accessed on the Webcasts and Presentations page of the Company’s investor relations website.

About Midland States Bancorp, Inc.

Midland States Bancorp, Inc. is a community-based financial holding company headquartered in Effingham, Illinois, and is the sole shareholder of Midland States Bank. Midland had assets of approximately $3.0 billion, and its Midland Wealth Management Group had assets under administration of approximately $1.2 billion as of June 30, 2016.  Midland provides a full range of commercial and consumer banking products and services, merchant credit card services, trust and investment management, and insurance and financial planning services. In addition, commercial equipment leasing services are provided through Heartland Business Credit, and multi-family and healthcare facility FHA financing is provided through Love Funding, Midland's non-bank subsidiaries. Midland has more than 80 locations across the United States. For additional information, visit www.midlandsb.com or follow Midland on LinkedIn at https://www.linkedin.com/company/midland-states-bank.

Non-GAAP Financial Measures

Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with accounting principles generally accepted in the United States (“GAAP”).   These non-GAAP financial measures include “Adjusted Earnings,” “Adjusted Diluted Earnings Per Share,” “Adjusted Return on Average Assets,” “Adjusted Return on Average Shareholders’ Equity,”  “Adjusted Return on Average Tangible Common Equity,” “Yields on Loans Excluding Accretion Income, ” “Net Interest Margin Excluding Accretion Income,” “Tangible Common Equity to Tangible Assets,” “Tangible Book Value Per Share” and “Return on Average Tangible Common Equity.” The Company believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the Company’s funding profile and profitability. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures.

Forward-Looking Statements

Readers should note that in addition to the historical information contained herein, this press release includes "forward-looking statements," including but not limited to statements about the Company’s expected loan production and future earnings levels.  These statements are subject to many risks and uncertainties, including changes in interest rates and other general economic, business and political conditions, including changes in the financial markets; changes in business plans as circumstances warrant; and other risks detailed from time to time in filings made by the Company with the Securities and Exchange Commission. Readers should note that the forward-looking statements included in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "will," "propose," "may," "plan," "seek," "expect," "intend," "estimate," "anticipate," "believe" or "continue," or similar terminology. Any forward-looking statements presented herein are made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.


 

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

 




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

 




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

 




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

 




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

 




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

 




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

 




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

 

 

 

CONTACTS:

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

EXHIBIT 99.2