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): October 27, 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 October 27, 2016, Midland States Bancorp, Inc. (the “Company”) issued a press release announcing its earnings results for the third quarter of 2016. The press release is attached as Exhibit 99.1.
Item 7.01. Regulation FD Disclosure
On October 27, 2016, the Company made available on its website a slide presentation regarding the Company's third quarter 2016 financial results, which will be used as part of a publicly accessible conference call on October 28, 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 October 27, 2016 |
| 99.2 | Slide Presentation of Midland States Bancorp, Inc. regarding third 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: October 27, 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 October 27, 2016 |
| 99.2 | Slide Presentation of Midland States Bancorp, Inc. regarding third quarter 2016 financial results |
EXHIBIT 99.1
Midland States Bancorp, Inc. Announces 2016 Third Quarter Results
Third Quarter 2016 Summary
- Net income of $8.1 million, or $0.51 diluted earnings per share
- Total loans increased $152 million to $2.31 billion at September 30, 2016
- Average loans increased $96 million, or 17.7% annualized
- Non-interest income of $14.9 million, or 35.4% of total revenue
- Return on average assets of 1.03%; Return on average equity of 10.04%
EFFINGHAM, Ill., Oct. 27, 2016 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (NASDAQ:MSBI) (the “Company”) today reported net income of $8.1 million, or $0.51 diluted earnings per share, for the third quarter of 2016, compared with net income of $6.8 million, or $0.50 diluted earnings per share, for the second quarter of 2016, and net income of $3.4 million, or $0.28 diluted earnings per share, for the third quarter of 2015.
“We delivered a solid quarter driven by well-diversified loan production and improved efficiencies,” said Leon J. Holschbach, President and Chief Executive Officer of the Company. “As a result of this performance, we were able to generate a higher level of earnings and an improvement in our return on average assets.
“We had excellent growth across the loan portfolio with double-digit annualized increases in the commercial real estate, residential real estate, consumer and equipment leasing portfolios. We also continued to generate a high level of non-interest income with solid contributions from our residential mortgage banking and wealth management businesses. This offset a light quarter in the commercial FHA business as we had relatively few loans in the latter stages of the pipeline during the third quarter.
“We continue to see strong loan demand throughout our markets. As we continue to generate quality balance sheet growth and maintain disciplined expense control, we expect to see a continuation of the positive trends in the business going forward,” said Mr. Holschbach.
Net Interest Income
Net interest income for the third quarter of 2016 was $27.3 million, a decrease of 2.6% from $28.0 million for the second quarter of 2016. The Company’s net interest income benefits from accretion income associated with purchased loan portfolios. Accretion income totaled $2.6 million for the third quarter of 2016, compared with $4.9 million for the second quarter of 2016. The reduction in accretion income offset the impact of higher average loan balances in the third quarter of 2016.
Relative to the third quarter of 2015, net interest income increased $1.8 million due to an increase in average loan balances.
Net Interest Margin
Net interest margin for the third quarter of 2016 was 4.00%, compared to 4.20% for the second quarter of 2016. The Company’s net interest margin benefits from accretion income on purchased loan portfolios. Excluding accretion income, net interest margin was 3.66% for the third quarter of 2016, compared with 3.52% for the second quarter of 2016. The increase in net interest margin excluding accretion income was primarily attributable to a favorable shift in the mix of both earning assets and funding liabilities within the balance sheet. Average cash balances decreased by $77.6 million and was redeployed into higher yielding loans and investments in the third quarter compared to the second quarter, while at the same time interest bearing liabilities decreased and funding shifted to increased levels of both noninterest bearing deposits and equity.
Relative to the third quarter of 2015, the net interest margin declined from 4.17%, primarily due to lower average yields on loans and investment securities. Excluding accretion income, net interest margin declined from 3.83%, which was primarily attributable to lower average yields on loans and investment securities and an increase in cost of funds.
Noninterest Income
Noninterest income for the third quarter of 2016 was $14.9 million, an increase of 6.6% from $14.0 million for the second quarter of 2016. The increase was primarily attributable to higher residential mortgage banking revenue and the absence of FDIC loss-sharing expense. This was partially offset by lower commercial FHA revenue.
Commercial FHA revenue for the third quarter of 2016 was $3.3 million, a decrease of 61.8% from $8.5 million in the second quarter of 2016. The Company originated $73.4 million in rate lock commitments during the third quarter of 2016, compared to $281.2 million in the prior quarter. The Company also recorded mortgage servicing rights impairment of $1.1 million in the third quarter of 2016.
Residential mortgage banking revenue for the third quarter of 2016 was $5.0 million, an increase from $1.0 million in the second quarter of 2016. During the second quarter of 2016, the Company recorded mortgage servicing rights impairment of $3.0 million, which substantially reduced the residential mortgage banking revenue recognized in that quarter.
Relative to the third quarter of 2015, noninterest income increased 3.3% from $14.5 million. The increase was primarily due to higher residential mortgage banking and wealth management revenue, which was partially offset by lower commercial FHA revenue.
Noninterest Expense
Noninterest expense for the third quarter of 2016 was $28.7 million, a decrease of 7.2% from $30.9 million for the second quarter of 2016. The decrease was primarily driven by lower salaries and benefits expense. Non-interest expense in the second quarter of 2016 also included a $511,000 write-off of accounting discount related to the early payoff of subordinated debt, while no similar write-off occurred in the third quarter of 2016.
Relative to the third quarter of 2015, noninterest expense increased 3.0% from $27.8 million. The increase was primarily due to higher salaries and benefits expense resulting from an increase in FTEs over the past 12 months.
Loan Portfolio
Total loans outstanding were $2.31 billion at September 30, 2016, compared with $2.16 billion at June 30, 2016, and $1.97 billion at September 30, 2015. The $151.7 million increase in the loan portfolio from June 30, 2016 was driven primarily by a $55.8 million increase in commercial loans, a $26.9 million increase in commercial real estate loans, a $37.8 million increase in residential real estate loans, a $43.1 million increase in consumer loans, and a $5.9 million increase in equipment lease financing loans. These increases were partially offset by a $17.8 million decrease in construction and land development loans, most of which migrated to permanent financing in the commercial real estate portfolio.
Approximately $73 million of the increase in total loans outstanding at September 30, 2016 compared to June 30, 2016 was related to advances on a warehouse line of credit to a customer that originates government-guaranteed commercial FHA loans. The advances on this warehouse line of credit are short-term in nature.
Deposits
Total deposits were $2.42 billion at September 30, 2016, compared with $2.35 billion at June 30, 2016, and $2.30 billion at September 30, 2015. The increase in total deposits from June 30, 2016 was primarily due to an increase in demand deposits, partially offset by a decrease in time and brokered deposits. Approximately $101.4 million of the increase in demand deposits during the third quarter of 2016 was attributable to commercial and residential mortgage servicing accounts. Of this increase, approximately $82.3 million represents new loan origination and modification payments received in the commercial FHA banking business that were remitted to GNMA in October 2016.
Asset Quality
Non-performing loans totaled $29.9 million, or 1.29% of total loans, at September 30, 2016, compared with $18.4 million, or 0.85% of total loans, at June 30, 2016. The increase in non-performing loans is primarily due to one commercial real estate loan that was classified as a troubled debt restructuring (“TDR”) during the quarter.
Net charge-offs for the third quarter of 2016 were $585,000, or 0.11% of average loans on an annualized basis.
The Company recorded a provision for loan losses of $1.4 million for the third quarter of 2016, primarily to reflect the growth in the loan portfolio.
The Company’s allowance for loan losses was 0.67% of total loans and 52.0% of non-performing loans at September 30, 2016, compared with 0.68% and 80.0%, respectively, at June 30, 2016. Including the fair market value discounts recorded in connection with acquired loan portfolios, the allowance for loan losses to total loans ratio was 1.06% at September 30, 2016, compared with 1.13% at June 30, 2016.
Capital
At September 30, 2016, the Company exceeded all regulatory capital requirements under Basel III and was considered to be a ‘‘well-capitalized’’ financial institution, as summarized in the following table:
| September 30, 2016 | Well Capitalized Regulatory Requirements | |||||
| Total capital to risk-weighted assets | 13.53 | % | 10.00 | % | ||
| Tier 1 capital to risk-weighted assets | 10.94 | % | 8.00 | % | ||
| Tier 1 leverage ratio | 9.82 | % | 5.00 | % | ||
| Tier 1 common capital to risk-weighted assets | 9.03 | % | 6.50 | % | ||
| Tangible common equity to tangible assets | 8.44 | % | NA | |||
Conference Call, Webcast and Slide Presentation
The Company will host a conference call and webcast at 7:30 a.m. Central Time on Friday, October 28, 2016. During the call, management will review the third quarter results and operational highlights. The call can be accessed via telephone at (877) 516-3531 (passcode: 85446301). A recorded replay can be accessed through November 3, 2016 by dialing (855) 859-2056; passcode: 85446301.
A slide presentation relating to the third quarter results will be accessible prior to the scheduled conference call. The slide presentation and webcast of the conference call can be accessed on the Webcasts and Presentations page of the Company’s investor relations website.
About Midland States Bancorp, Inc.
Midland States Bancorp, Inc. is a community-based financial holding company headquartered in Effingham, Illinois, and is the sole shareholder of Midland States Bank. Midland had assets of approximately $3.2 billion, and its Midland Wealth Management Group had assets under administration of approximately $1.2 billion as of September 30, 2016. Midland provides a full range of commercial and consumer banking products and services, merchant credit card services, trust and investment management, and insurance and financial planning services. In addition, commercial equipment leasing services are provided through Heartland Business Credit, and multi-family and healthcare facility FHA financing is provided through Love Funding, Midland's non-bank subsidiaries. Midland has more than 80 locations across the United States. For additional information, visit www.midlandsb.com or follow Midland on LinkedIn at https://www.linkedin.com/company/midland-states-bank.
Non-GAAP Financial Measures
Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with accounting principles generally accepted in the United States (“GAAP”). These non-GAAP financial measures include “Adjusted Earnings,” “Adjusted Diluted Earnings Per Share,” “Adjusted Return on Average Assets,” “Adjusted Return on Average Shareholders’ Equity,” “Adjusted Return on Average Tangible Common Equity,” “Yield on Loans Excluding Accretion Income, ” “Net Interest Margin Excluding Accretion Income,” “Tangible Common Equity to Tangible Assets,” “Tangible Book Value Per Share” and “Return on Average Tangible Common Equity.” The Company believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the Company’s funding profile and profitability. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures.
Forward-Looking Statements
Readers should note that in addition to the historical information contained herein, this press release includes "forward-looking statements," including but not limited to statements about the Company’s expected loan production and future earnings levels. These statements are subject to many risks and uncertainties, including changes in interest rates and other general economic, business and political conditions, including changes in the financial markets; changes in business plans as circumstances warrant; and other risks detailed from time to time in filings made by the Company with the Securities and Exchange Commission. Readers should note that the forward-looking statements included in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "will," "propose," "may," "plan," "seek," "expect," "intend," "estimate," "anticipate," "believe" or "continue," or similar terminology. Any forward-looking statements presented herein are made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.
| MIDLAND STATES BANCORP, INC. | ||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) | ||||||||||||||||||||||||
| For the Quarter Ended | ||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||||
| (in thousands, except per share data) | 2016 | 2016 | 2016 | 2015 | 2015 | |||||||||||||||||||
| Earnings Summary | ||||||||||||||||||||||||
| Net interest income | $ | 27,265 | $ | 27,989 | $ | 24,041 | $ | 26,452 | $ | 25,437 | ||||||||||||||
| Provision for loan losses | 1,392 | 629 | 1,125 | 1,052 | 6,699 | |||||||||||||||||||
| Noninterest income | 14,937 | 14,016 | 12,618 | 12,799 | 14,464 | |||||||||||||||||||
| Noninterest expense | 28,663 | 30,903 | 27,639 | 27,692 | 27,823 | |||||||||||||||||||
| Income before income taxes | 12,147 | 10,473 | 7,895 | 10,507 | 5,379 | |||||||||||||||||||
| Income taxes | 4,102 | 3,683 | 2,777 | 2,811 | 1,928 | |||||||||||||||||||
| Net income | 8,045 | 6,790 | 5,118 | 7,696 | 3,451 | |||||||||||||||||||
| Net income (loss) attributable to noncontrolling interest in subsidiaries | (6 | ) | 1 | (1 | ) | 1 | 6 | |||||||||||||||||
| Net income attributable to Midland States Bancorp, Inc. | $ | 8,051 | $ | 6,789 | $ | 5,119 | $ | 7,695 | $ | 3,445 | ||||||||||||||
| Diluted earnings per common share | $ | 0.51 | $ | 0.50 | $ | 0.42 | $ | 0.63 | $ | 0.28 | ||||||||||||||
| Weighted average shares outstanding - diluted | 15,858,273 | 13,635,074 | 12,229,293 | 12,181,664 | 12,130,529 | |||||||||||||||||||
| Return on average assets | 1.03 | % | 0.89 | % | 0.70 | % | 1.06 | % | 0.49 | % | ||||||||||||||
| Return on average shareholders' equity | 10.04 | % | 10.18 | % | 8.69 | % | 13.19 | % | 5.88 | % | ||||||||||||||
| Return on average tangible common shareholders' equity | 12.01 | % | 12.67 | % | 11.22 | % | 17.26 | % | 7.72 | % | ||||||||||||||
| Net interest margin | 4.00 | % | 4.20 | % | 3.80 | % | 4.19 | % | 4.17 | % | ||||||||||||||
| Efficiency ratio | 64.56 | % | 67.09 | % | 67.73 | % | 68.83 | % | 64.32 | % | ||||||||||||||
| Adjusted Earnings Performance Summary | ||||||||||||||||||||||||
| Adjusted earnings | $ | 8,269 | $ | 7,107 | $ | 5,767 | $ | 7,525 | $ | 4,638 | ||||||||||||||
| Adjusted diluted earnings per common share | $ | 0.52 | $ | 0.52 | $ | 0.47 | $ | 0.61 | $ | 0.38 | ||||||||||||||
| Adjusted return on average assets | 1.06 | % | 0.93 | % | 0.79 | % | 1.04 | % | 0.66 | % | ||||||||||||||
| Adjusted return on average shareholders' equity | 10.32 | % | 10.66 | % | 9.79 | % | 12.90 | % | 7.92 | % | ||||||||||||||
| Adjusted return on average tangible common shareholders' equity | 12.34 | % | 13.27 | % | 12.64 | % | 16.77 | % | 10.39 | % | ||||||||||||||
| Net interest margin excluding accretion income | 3.66 | % | 3.52 | % | 3.55 | % | 3.56 | % | 3.83 | % | ||||||||||||||
| MIDLAND STATES BANCORP, INC. | |||||||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) | |||||||||||||||||||||||||||||
| For the Quarter Ended | |||||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||||||
| (in thousands, except per share data) | 2016 | 2016 | 2016 | 2015 | 2015 | ||||||||||||||||||||||||
| Net interest income: | |||||||||||||||||||||||||||||
| Total interest income | $ | 31,186 | $ | 32,115 | $ | 27,967 | $ | 30,300 | $ | 28,949 | |||||||||||||||||||
| Total interest expense | 3,921 | 4,126 | 3,926 | 3,848 | 3,512 | ||||||||||||||||||||||||
| Net interest income | 27,265 | 27,989 | 24,041 | 26,452 | 25,437 | ||||||||||||||||||||||||
| Provision for loan losses | 1,392 | 629 | 1,125 | 1,052 | 6,699 | ||||||||||||||||||||||||
| Net interest income after provision for loan losses | 25,873 | 27,360 | 22,916 | 25,400 | 18,738 | ||||||||||||||||||||||||
| Noninterest income: | |||||||||||||||||||||||||||||
| Commercial FHA revenue | 3,260 | 8,538 | 6,562 | 3,045 | 5,914 | ||||||||||||||||||||||||
| Residential mortgage banking revenue | 4,990 | 1,037 | 1,121 | 3,328 | 3,490 | ||||||||||||||||||||||||
| Wealth management revenue | 1,941 | 1,870 | 1,785 | 1,831 | 1,808 | ||||||||||||||||||||||||
| Service charges on deposit accounts | 1,044 | 965 | 907 | 979 | 1,022 | ||||||||||||||||||||||||
| Interchange revenue | 920 | 945 | 964 | 858 | 895 | ||||||||||||||||||||||||
| FDIC loss sharing expense | - | (1,608 | ) | (53 | ) | (212 | ) | (57 | ) | ||||||||||||||||||||
| Gain on sales of investment securities, net | 39 | 72 | 204 | 33 | 1 | ||||||||||||||||||||||||
| Other-than-temporary impairment on investment securities | - | - | (824 | ) | - | (299 | ) | ||||||||||||||||||||||
| Other income | 2,743 | 2,197 | 1,952 | 2,937 | 1,690 | ||||||||||||||||||||||||
| Total noninterest income | 14,937 | 14,016 | 12,618 | 12,799 | 14,464 | ||||||||||||||||||||||||
| Noninterest expense: | |||||||||||||||||||||||||||||
| Salaries and employee benefits | 16,568 | 17,012 | 15,387 | 13,725 | 14,932 | ||||||||||||||||||||||||
| Occupancy and equipment | 3,271 | 3,233 | 3,310 | 3,424 | 3,114 | ||||||||||||||||||||||||
| Data processing | 2,586 | 2,624 | 2,620 | 2,546 | 2,541 | ||||||||||||||||||||||||
| Professional | 1,877 | 1,573 | 1,701 | 2,079 | 2,075 | ||||||||||||||||||||||||
| Amortization of intangible assets | 514 | 519 | 580 | 598 | 597 | ||||||||||||||||||||||||
| Other | 3,847 | 5,942 | 4,041 | 5,320 | 4,564 | ||||||||||||||||||||||||
| Total noninterest expense | 28,663 | 30,903 | 27,639 | 27,692 | 27,823 | ||||||||||||||||||||||||
| Income before income taxes | 12,147 | 10,473 | 7,895 | 10,507 | 5,379 | ||||||||||||||||||||||||
| Income taxes | 4,102 | 3,683 | 2,777 | 2,811 | 1,928 | ||||||||||||||||||||||||
| Net income | 8,045 | 6,790 | 5,118 | 7,696 | 3,451 | ||||||||||||||||||||||||
| Net (loss) income attributable to noncontrolling interest in subsidiaries | (6 | ) | 1 | (1 | ) | 1 | 6 | ||||||||||||||||||||||
| Net income attributable to Midland States Bancorp, Inc. | $ | 8,051 | $ | 6,789 | $ | 5,119 | $ | 7,695 | $ | 3,445 | |||||||||||||||||||
| Basic earnings per common share | $ | 0.51 | $ | 0.51 | $ | 0.43 | $ | 0.64 | $ | 0.29 | |||||||||||||||||||
| Diluted earnings per common share | $ | 0.51 | $ | 0.50 | $ | 0.42 | $ | 0.63 | $ | 0.28 | |||||||||||||||||||
| MIDLAND STATES BANCORP, INC. | |||||||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) | |||||||||||||||||||||||||||||
| As of | |||||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||||||
| (in thousands) | 2016 | 2016 | 2016 | 2015 | 2015 | ||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 228,030 | $ | 123,366 | $ | 162,416 | $ | 212,475 | $ | 206,664 | |||||||||||||||||||
| Investment securities available-for-sale at fair value | 252,212 | 238,781 | 232,074 | 236,627 | 211,359 | ||||||||||||||||||||||||
| Investment securities held to maturity at amortized cost | 82,941 | 84,756 | 88,085 | 87,521 | 92,011 | ||||||||||||||||||||||||
| Loans | 2,312,778 | 2,161,041 | 2,016,034 | 1,995,589 | 1,972,844 | ||||||||||||||||||||||||
| Allowance for loan losses | (15,559 | ) | (14,752 | ) | (14,571 | ) | (15,988 | ) | (15,157 | ) | |||||||||||||||||||
| Total loans, net | 2,297,219 | 2,146,289 | 2,001,463 | 1,979,601 | 1,957,687 | ||||||||||||||||||||||||
| Loans held for sale at fair value | 61,363 | 101,782 | 103,365 | 54,413 | 53,032 | ||||||||||||||||||||||||
| Premises and equipment, net | 70,727 | 72,147 | 72,421 | 73,133 | 73,362 | ||||||||||||||||||||||||
| Other real estate owned | 4,828 | 3,540 | 4,740 | 5,472 | 6,471 | ||||||||||||||||||||||||
| Mortgage servicing rights at lower of cost or market | 64,689 | 62,808 | 65,486 | 66,651 | 65,417 | ||||||||||||||||||||||||
| Intangible assets | 5,391 | 5,905 | 6,424 | 7,004 | 7,601 | ||||||||||||||||||||||||
| Goodwill | 46,519 | 46,519 | 46,519 | 46,519 | 47,102 | ||||||||||||||||||||||||
| Cash surrender value of life insurance policies | 74,276 | 73,665 | 53,173 | 52,729 | 52,271 | ||||||||||||||||||||||||
| Other assets | 59,532 | 62,226 | 61,914 | 62,679 | 59,331 | ||||||||||||||||||||||||
| Total assets | $ | 3,247,727 | $ | 3,021,784 | $ | 2,898,080 | $ | 2,884,824 | $ | 2,832,308 | |||||||||||||||||||
| Liabilities and Shareholders' Equity | |||||||||||||||||||||||||||||
| Noninterest bearing deposits | $ | 629,113 | $ | 528,966 | $ | 546,664 | $ | 543,401 | $ | 512,632 | |||||||||||||||||||
| Interest bearing deposits | 1,790,919 | 1,825,586 | 1,843,046 | 1,824,247 | 1,791,846 | ||||||||||||||||||||||||
| Total deposits | 2,420,032 | 2,354,552 | 2,389,710 | 2,367,648 | 2,304,478 | ||||||||||||||||||||||||
| Short-term borrowings | 138,289 | 125,014 | 101,649 | 107,538 | 108,823 | ||||||||||||||||||||||||
| FHLB advances and other borrowings | 237,543 | 97,588 | 40,133 | 40,178 | 50,225 | ||||||||||||||||||||||||
| Subordinated debt | 54,484 | 54,459 | 61,903 | 61,859 | 61,814 | ||||||||||||||||||||||||
| Trust preferred debentures | 37,316 | 37,229 | 37,142 | 37,057 | 36,973 | ||||||||||||||||||||||||
| Other liabilities | 38,273 | 36,627 | 28,982 | 37,488 | 38,370 | ||||||||||||||||||||||||
| Total liabilities | 2,925,937 | 2,705,469 | 2,659,519 | 2,651,768 | 2,600,683 | ||||||||||||||||||||||||
| Midland States Bancorp, Inc. shareholders’ equity | 321,749 | 316,268 | 238,386 | 232,880 | 231,415 | ||||||||||||||||||||||||
| Noncontrolling interest in subsidiaries | 41 | 47 | 175 | 176 | 210 | ||||||||||||||||||||||||
| Total shareholders’ equity | 321,790 | 316,315 | 238,561 | 233,056 | 231,625 | ||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 3,247,727 | $ | 3,021,784 | $ | 2,898,080 | $ | 2,884,824 | $ | 2,832,308 | |||||||||||||||||||
| MIDLAND STATES BANCORP, INC. | |||||||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) | |||||||||||||||||||
| As of | |||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| (in thousands) | 2016 | 2016 | 2016 | 2015 | 2015 | ||||||||||||||
| Loan Portfolio | |||||||||||||||||||
| Commercial loans | $ | 545,069 | $ | 489,228 | $ | 484,618 | $ | 499,573 | $ | 521,983 | |||||||||
| Commercial real estate loans | 956,298 | 929,399 | 897,099 | 876,784 | 866,027 | ||||||||||||||
| Construction and land development loans | 163,900 | 181,667 | 159,507 | 150,266 | 131,083 | ||||||||||||||
| Residential real estate loans | 216,935 | 179,184 | 158,221 | 163,224 | 168,129 | ||||||||||||||
| Consumer loans | 248,131 | 205,060 | 158,938 | 161,512 | 157,521 | ||||||||||||||
| Lease financing loans | 182,445 | 176,503 | 157,651 | 144,230 | 128,101 | ||||||||||||||
| Total loans | $ | 2,312,778 | $ | 2,161,041 | $ | 2,016,034 | $ | 1,995,589 | $ | 1,972,844 | |||||||||
| Deposit Portfolio | |||||||||||||||||||
| Noninterest-bearing demand deposits | $ | 629,113 | $ | 528,966 | $ | 546,664 | $ | 543,401 | $ | 512,632 | |||||||||
| NOW accounts | 658,021 | 627,003 | 612,475 | 621,925 | 623,494 | ||||||||||||||
| Money market accounts | 366,193 | 374,537 | 415,130 | 377,654 | 350,398 | ||||||||||||||
| Savings accounts | 162,742 | 164,792 | 163,163 | 155,778 | 154,632 | ||||||||||||||
| Time deposits | 420,779 | 431,173 | 433,386 | 446,621 | 426,762 | ||||||||||||||
| Brokered deposits | 183,184 | 228,081 | 218,892 | 222,269 | 236,560 | ||||||||||||||
| Total deposits | $ | 2,420,032 | $ | 2,354,552 | $ | 2,389,710 | $ | 2,367,648 | $ | 2,304,478 | |||||||||
| MIDLAND STATES BANCORP, INC. | ||||||||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) | ||||||||||||||||||||
| For the Quarter Ended | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| (in thousands) | 2016 | 2016 | 2016 | 2015 | 2015 | |||||||||||||||
| Average Balance Sheets | ||||||||||||||||||||
| Cash and cash equivalents | $ | 154,764 | $ | 232,362 | $ | 223,951 | $ | 184,072 | $ | 131,272 | ||||||||||
| Investment securities | 348,265 | 338,224 | 327,267 | 345,114 | 317,886 | |||||||||||||||
| Loans | 2,268,178 | 2,171,814 | 2,063,568 | 2,039,046 | 2,032,122 | |||||||||||||||
| Total interest-earning assets | 2,771,207 | 2,742,400 | 2,614,786 | 2,568,232 | 2,481,280 | |||||||||||||||
| Non-earning assets | 329,504 | 324,880 | 317,648 | 312,154 | 314,959 | |||||||||||||||
| Total assets | $ | 3,100,711 | $ | 3,067,280 | $ | 2,932,434 | $ | 2,880,386 | $ | 2,796,239 | ||||||||||
| Interest-bearing deposits | $ | 1,803,189 | $ | 1,844,493 | $ | 1,832,599 | $ | 1,813,974 | $ | 1,733,899 | ||||||||||
| Short-term borrowings | 134,052 | 114,651 | 120,753 | 118,118 | 121,453 | |||||||||||||||
| FHLB advances and other borrowings | 165,774 | 185,195 | 99,499 | 48,583 | 54,056 | |||||||||||||||
| Subordinated debt | 54,470 | 61,677 | 61,878 | 61,835 | 62,830 | |||||||||||||||
| Trust preferred debentures | 37,266 | 37,182 | 37,094 | 37,013 | 37,083 | |||||||||||||||
| Total interest-bearing liabilities | 2,194,751 | 2,243,198 | 2,151,823 | 2,079,523 | 2,009,321 | |||||||||||||||
| Noninterest-bearing deposits | 550,816 | 522,632 | 511,019 | 529,196 | 509,259 | |||||||||||||||
| Other noninterest-bearing liabilities | 36,235 | 33,188 | 32,671 | 40,247 | 45,379 | |||||||||||||||
| Shareholders' equity | 318,909 | 268,262 | 236,921 | 231,420 | 232,280 | |||||||||||||||
| Total liabilities and shareholders' equity | $ | 3,100,711 | $ | 3,067,280 | $ | 2,932,434 | $ | 2,880,386 | $ | 2,796,239 | ||||||||||
| Yields | ||||||||||||||||||||
| Cash and cash equivalents | 0.50 | % | 0.50 | % | 0.50 | % | 0.27 | % | 0.24 | % | ||||||||||
| Investment securities | 4.93 | % | 5.12 | % | 5.31 | % | 5.02 | % | 5.33 | % | ||||||||||
| Loans | 4.79 | % | 5.22 | % | 4.68 | % | 5.15 | % | 4.94 | % | ||||||||||
| Total interest-earning assets | 4.57 | % | 4.81 | % | 4.40 | % | 4.79 | % | 4.73 | % | ||||||||||
| Interest-bearing deposits | 0.48 | % | 0.50 | % | 0.49 | % | 0.48 | % | 0.44 | % | ||||||||||
| Short-term borrowings | 0.24 | % | 0.24 | % | 0.23 | % | 0.20 | % | 0.18 | % | ||||||||||
| FHLB advances and other borrowings | 0.73 | % | 0.56 | % | 0.55 | % | 0.87 | % | 0.81 | % | ||||||||||
| Subordinated debt | 6.38 | % | 6.87 | % | 6.87 | % | 6.79 | % | 6.76 | % | ||||||||||
| Trust preferred debentures | 5.03 | % | 4.95 | % | 4.80 | % | 4.60 | % | 3.97 | % | ||||||||||
| Total interest-bearing liabilities | 0.71 | % | 0.74 | % | 0.73 | % | 0.73 | % | 0.69 | % | ||||||||||
| Net interest margin | 4.00 | % | 4.20 | % | 3.80 | % | 4.19 | % | 4.17 | % | ||||||||||
| MIDLAND STATES BANCORP, INC. | ||||||||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) | ||||||||||||||||||||
| As of and for the Quarter Ended | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| (in thousands, except per share data) | 2016 | 2016 | 2016 | 2015 | 2015 | |||||||||||||||
| Asset Quality | ||||||||||||||||||||
| Loans 30-89 days past due | $ | 10,318 | $ | 10,453 | $ | 6,616 | $ | 10,120 | $ | 11,079 | ||||||||||
| Nonperforming loans | 29,926 | 18,430 | 18,787 | 24,891 | 24,223 | |||||||||||||||
| Nonperforming assets | 34,304 | 21,469 | 22,312 | 29,206 | 30,118 | |||||||||||||||
| Net charge-offs | 585 | 448 | 2,542 | 220 | 7,748 | |||||||||||||||
| Loans 30-89 days past due to total loans | 0.45 | % | 0.48 | % | 0.33 | % | 0.51 | % | 0.56 | % | ||||||||||
| Nonperforming loans to total loans | 1.29 | % | 0.85 | % | 0.93 | % | 1.25 | % | 1.23 | % | ||||||||||
| Nonperforming assets to total assets | 1.06 | % | 0.71 | % | 0.77 | % | 1.01 | % | 1.06 | % | ||||||||||
| Allowance for loan losses to total loans | 0.67 | % | 0.68 | % | 0.72 | % | 0.80 | % | 0.77 | % | ||||||||||
| Allowance for loan losses to nonperforming loans | 51.99 | % | 80.04 | % | 77.56 | % | 64.23 | % | 62.57 | % | ||||||||||
| Net charge-offs to average loans | 0.11 | % | 0.09 | % | 0.51 | % | 0.04 | % | 1.57 | % | ||||||||||
| Wealth Management | ||||||||||||||||||||
| Trust assets under administration | $ | 1,235,132 | $ | 1,198,044 | $ | 1,189,693 | $ | 1,181,128 | $ | 1,145,056 | ||||||||||
| Market Data | ||||||||||||||||||||
| Book value per share at period end | $ | 20.89 | $ | 20.53 | $ | 20.19 | $ | 19.74 | $ | 19.68 | ||||||||||
| Tangible book value per share at period end | $ | 17.52 | $ | 17.13 | $ | 15.71 | $ | 15.20 | $ | 15.03 | ||||||||||
| Market price at period end | $ | 25.34 | $ | 21.69 | $ | N/A | $ | N/A | $ | N/A | ||||||||||
| Shares outstanding at period end | 15,404,423 | 15,402,946 | 11,804,779 | 11,797,404 | 11,760,589 | |||||||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||
| Basic | 15,578,703 | 13,358,289 | 11,957,381 | 11,924,072 | 11,911,414 | |||||||||||||||
| Diluted | 15,858,273 | 13,635,074 | 12,229,293 | 12,181,664 | 12,130,529 | |||||||||||||||
| Capital | ||||||||||||||||||||
| Total capital to risk-weighted assets | 13.53 | % | 13.91 | % | 11.67 | % | 11.82 | % | 11.43 | % | ||||||||||
| Tier 1 capital to risk-weighted assets | 10.94 | % | 11.23 | % | 8.48 | % | 8.62 | % | 8.19 | % | ||||||||||
| Tier 1 leverage ratio | 9.82 | % | 9.77 | % | 7.25 | % | 7.49 | % | 7.41 | % | ||||||||||
| Tier 1 common capital to risk-weighted assets | 9.03 | % | 9.24 | % | 6.40 | % | 6.50 | % | 6.16 | % | ||||||||||
| Tangible common equity to tangible assets | 8.44 | % | 8.89 | % | 6.52 | % | 6.33 | % | 6.36 | % | ||||||||||
| MIDLAND STATES BANCORP, INC. | ||||||||||||||||||||||||||||||
| RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||||||||||||
| For the Quarter Ended | ||||||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||||||||||
| (in thousands, except per share data) | 2016 | 2016 | 2016 | 2015 | 2015 | |||||||||||||||||||||||||
| Adjusted Earnings Reconciliation | ||||||||||||||||||||||||||||||
| Income before income taxes - GAAP | $ | 12,147 | $ | 10,473 | $ | 7,895 | $ | 10,507 | $ | 5,379 | ||||||||||||||||||||
| Adjustments to other income: | ||||||||||||||||||||||||||||||
| Gain on sales of investment securities, net | 39 | 72 | 204 | 33 | 1 | |||||||||||||||||||||||||
| Other than-temporary-impairment on investment securities | - | - | (824 | ) | - | (299 | ) | |||||||||||||||||||||||
| FDIC loss-sharing expense | - | - | - | (212 | ) | (57 | ) | |||||||||||||||||||||||
| Amortization of FDIC indemnification asset, net | - | - | - | (39 | ) | (121 | ) | |||||||||||||||||||||||
| Reversal of contingent consideration accrual | - | 350 | - | - | - | |||||||||||||||||||||||||
| Other income | - | - | - | - | 12 | |||||||||||||||||||||||||
| Total adjusted other income | 39 | 422 | (620 | ) | (218 | ) | (464 | ) | ||||||||||||||||||||||
| Adjustments to other expense: | ||||||||||||||||||||||||||||||
| Expenses associated with payoff of subordinated debt | - | 511 | - | - | - | |||||||||||||||||||||||||
| Integration and acquisition expenses | 352 | 406 | 385 | 214 | 898 | |||||||||||||||||||||||||
| Total adjusted other expense | 352 | 917 | 385 | 214 | 898 | |||||||||||||||||||||||||
| Adjusted earnings pre tax | 12,460 | 10,968 | 8,900 | 10,939 | 6,741 | |||||||||||||||||||||||||
| Adjusted earnings tax | 4,191 | 3,861 | 3,133 | 3,414 | 2,103 | |||||||||||||||||||||||||
| Adjusted earnings - non-GAAP | $ | 8,269 | $ | 7,107 | $ | 5,767 | $ | 7,525 | $ | 4,638 | ||||||||||||||||||||
| Adjusted diluted EPS | $ | 0.52 | $ | 0.52 | $ | 0.47 | $ | 0.61 | $ | 0.38 | ||||||||||||||||||||
| Adjusted return on average assets | 1.06 | % | 0.93 | % | 0.79 | % | 1.04 | % | 0.66 | % | ||||||||||||||||||||
| Adjusted return on average shareholders' equity | 10.32 | % | 10.66 | % | 9.79 | % | 12.90 | % | 7.92 | % | ||||||||||||||||||||
| Adjusted return on average tangible common equity | 12.34 | % | 13.27 | % | 12.64 | % | 16.77 | % | 10.39 | % | ||||||||||||||||||||
| Yield on Loans | ||||||||||||||||||||||||||||||
| Reported yield on loans | 4.79 | % | 5.22 | % | 4.68 | % | 5.15 | % | 4.94 | % | ||||||||||||||||||||
| Effect of accretion income on acquired loans | (0.41 | ) | % | (0.85 | ) | % | (0.30 | ) | % | (0.78 | ) | % | (0.41 | ) | % | |||||||||||||||
| Yield on loans excluding accretion income | 4.38 | % | 4.37 | % | 4.38 | % | 4.37 | % | 4.53 | % | ||||||||||||||||||||
| Net Interest Margin | ||||||||||||||||||||||||||||||
| Reported net interest margin | 4.00 | % | 4.20 | % | 3.80 | % | 4.19 | % | 4.17 | % | ||||||||||||||||||||
| Effect of accretion income on acquired loans | (0.34 | ) | % | (0.68 | ) | % | (0.25 | ) | % | (0.63 | ) | % | (0.34 | ) | % | |||||||||||||||
| Net interest margin excluding accretion income | 3.66 | % | 3.52 | % | 3.55 | % | 3.56 | % | 3.83 | % | ||||||||||||||||||||
| MIDLAND STATES BANCORP, INC. | ||||||||||||||||||||||||||||||
| RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||||||||||||
| Tangible Common Equity to Tangible Assets Ratio and Tangible Book Value Per Share | ||||||||||||||||||||||||||||||
| As of | ||||||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||||||||||
| (in thousands, except per share data) | 2016 | 2016 | 2016 | 2015 | 2015 | |||||||||||||||||||||||||
| Shareholders' Equity to Tangible Common Equity | ||||||||||||||||||||||||||||||
| Total shareholders' equity—GAAP | $ | 321,790 | $ | 316,315 | $ | 238,561 | $ | 233,056 | $ | 231,625 | ||||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||||||
| Noncontrolling interest in subsidiaries | (41 | ) | (47 | ) | (175 | ) | (176 | ) | (210 | ) | ||||||||||||||||||||
| Goodwill | (46,519 | ) | (46,519 | ) | (46,519 | ) | (46,519 | ) | (47,102 | ) | ||||||||||||||||||||
| Other intangibles | (5,391 | ) | (5,905 | ) | (6,424 | ) | (7,004 | ) | (7,601 | ) | ||||||||||||||||||||
| Tangible common equity | $ | 269,839 | $ | 263,844 | $ | 185,443 | $ | 179,357 | $ | 176,712 | ||||||||||||||||||||
| Total Assets to Tangible Assets: | ||||||||||||||||||||||||||||||
| Total assets—GAAP | 3,247,727 | 3,021,784 | 2,898,080 | 2,884,824 | 2,832,308 | |||||||||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||||||
| Goodwill | (46,519 | ) | (46,519 | ) | (46,519 | ) | (46,519 | ) | (47,102 | ) | ||||||||||||||||||||
| Other intangibles | (5,391 | ) | (5,905 | ) | (6,424 | ) | (7,004 | ) | (7,601 | ) | ||||||||||||||||||||
| Tangible assets | $ | 3,195,817 | $ | 2,969,360 | $ | 2,845,137 | $ | 2,831,301 | $ | 2,777,605 | ||||||||||||||||||||
| Common Shares Outstanding | 15,404,423 | 15,402,946 | 11,804,779 | 11,797,404 | 11,760,589 | |||||||||||||||||||||||||
| Tangible Common Equity to Tangible Assets | 8.44 | % | 8.89 | % | 6.52 | % | 6.33 | % | 6.36 | % | ||||||||||||||||||||
| Tangible Book Value Per Share | $ | 17.52 | $ | 17.13 | $ | 15.71 | $ | 15.20 | $ | 15.03 | ||||||||||||||||||||
| Return on Average Tangible Common Equity (ROATCE) | ||||||||||||||||||||||||||||||
| As of | ||||||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||||||||||
| (in thousands) | 2016 | 2016 | 2016 | 2015 | 2015 | |||||||||||||||||||||||||
| Net Income | $ | 8,051 | $ | 6,789 | $ | 5,119 | $ | 7,695 | $ | 3,445 | ||||||||||||||||||||
| Average total shareholders' equity—GAAP | $ | 318,909 | $ | 268,262 | $ | 236,921 | $ | 231,420 | $ | 232,287 | ||||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||||||
| Noncontrolling interest in subsidiaries | (49 | ) | (121 | ) | (184 | ) | (204 | ) | (207 | ) | ||||||||||||||||||||
| Goodwill | (46,519 | ) | (46,519 | ) | (46,519 | ) | (46,997 | ) | (47,102 | ) | ||||||||||||||||||||
| Other intangibles | (5,656 | ) | (6,184 | ) | (6,740 | ) | (7,324 | ) | (7,917 | ) | ||||||||||||||||||||
| Average tangible common equity | $ | 266,685 | $ | 215,438 | $ | 183,478 | $ | 176,895 | $ | 177,061 | ||||||||||||||||||||
| ROATCE | 12.01 | % | 12.67 | % | 11.22 | % | 17.26 | % | 7.72 | % | ||||||||||||||||||||
CONTACTS:
Jeffrey G. Ludwig, Exec. V.P., Chief Financial Officer, at jludwig@midlandsb.com or (217) 342-7321
Douglas J. Tucker, Sr. V.P., Corporate Counsel, at dtucker@midlandsb.com or (217) 342-7321
EXHIBIT 99.2
