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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 25, 2018  

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

Illinois001-3527237-1233196
(State or Other Jurisdiction of Incorporation)(Commission File Number)(I.R.S. Employer Identification Number)

 

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

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

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:

 [ ]  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))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company [ X ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ X ]

 
 

Item 2.02. Results of Operations and Financial Condition.

On October 25, 2018, Midland States Bancorp, Inc. (the “Company”) issued a press release announcing its financial results for the third quarter of 2018. The press release is attached as Exhibit 99.1.

Item 7.01. Regulation FD Disclosure.

On October 25, 2018, the Company made available on its website a slide presentation regarding the Company's third quarter 2018 financial results, which will be used as part of a publicly accessible conference call on October 26, 2018. 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 25, 2018   
99.2 Slide Presentation of Midland States Bancorp, Inc. regarding third quarter 2018 financial results

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 Midland States Bancorp, Inc.
   
  
Date: October 25, 2018By: /s/ Douglas J. Tucker        
  Douglas J. Tucker
  Senior Vice President and Corporate Counsel
  

EXHIBIT INDEX

 

Exhibit No. Description
   
99.1 Press Release of Midland States Bancorp, Inc., dated October 25, 2018   
99.2 Slide Presentation of Midland States Bancorp, Inc. regarding third quarter 2018 financial results

EdgarFiling

EXHIBIT 99.1

Midland States Bancorp, Inc. Announces 2018 Third Quarter Results

Highlights

EFFINGHAM, Ill., Oct. 25, 2018 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (Nasdaq: MSBI) (the “Company”) today reported net income of $8.5 million, or $0.35 diluted earnings per share, for the third quarter of 2018, which included $9.6 million of integration and acquisition expenses.  This compares to net income of $12.8 million, or $0.52 diluted earnings per share, for the second quarter of 2018, which included $2.0 million of integration and acquisition expenses, and net income of $2.0 million, or $0.10 diluted earnings per share, for the third quarter of 2017, which included $8.3 million of integration and acquisition expenses and a $3.6 million loss on mortgage servicing rights held for sale.

“We executed well in the third quarter and delivered a strong increase in our adjusted earnings per share compared to the prior quarter,” said Leon J. Holschbach, Chief Executive Officer of the Company.  “We have substantially completed the integration of Alpine Bancorporation, and we are seeing improvement in our efficiency ratio as we realize the synergies from this acquisition.  We continue to effectively execute on our balance sheet management strategy by focusing our new loan production on areas with the most attractive risk-adjusted yields.  As a result, we have been able to generate solid loan growth while maintaining a relatively stable net interest margin, excluding accretion income.  We believe that prudently managing our balance sheet and realizing additional operating leverage from our increased scale will enable us to enhance profitability going forward.”

Factors Affecting Comparability

The Company acquired Alpine Bancorporation, Inc. (“Alpine”) in February 2018. The financial position and results of operations of Alpine prior to its acquisition date are not included in the Company’s financial results.

Adjusted Earnings

Adjusted earnings were $15.6 million, or $0.64 diluted earnings per share, for the third quarter of 2018, which primarily reflects the exclusion of $9.6 million in integration and acquisition expenses.  This compares to adjusted earnings of $14.5 million, or $0.59 diluted earnings per share, for the second quarter of 2018, which primarily reflects the exclusion of $2.0 million in integration and acquisition expenses.

The increase in adjusted earnings per share was attributable to higher noninterest income and lower noninterest expense.

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 Income

Net interest income for the third quarter of 2018 was $45.1 million, a decrease of 6.6% from $48.3 million for the second quarter of 2018.  The decrease in net interest income was primarily attributable to a decline in accretion income on purchased loan portfolios.

Accretion income associated with purchased loan portfolios totaled $1.7 million for the third quarter of 2018, compared with $5.5 million for the second quarter of 2018.  Excluding accretion income, net interest income increased $600,000, which is a 5.6% annualized increase from the prior quarter.

Relative to the third quarter of 2017, net interest income increased $8.3 million, or 22.6%.  Accretion income for the third quarter of 2017 was $3.0 million.  The increase in net interest income resulted from a $13.7 million increase in interest income on interest-earning assets, offset in part by a $5.4 million increase in interest expense.  These increases were due to the impact of the acquisition of Alpine, as well as organic growth.

Net Interest Margin

Net interest margin for the third quarter of 2018 was 3.59%, compared to 3.91% for the second quarter of 2018.  The Company’s net interest margin benefits from accretion income on purchased loan portfolios, which contributed 10 and 40 basis points to net interest margin in the third quarter of 2018 and second quarter of 2018, respectively.  Excluding the impact of accretion income, net interest margin decreased two basis points from the second quarter of 2018, primarily due to an increase in the cost of interest-bearing liabilities.

Relative to the third quarter of 2017, net interest margin decreased from 3.78%.  Accretion income on purchased loan portfolios contributed 27 basis points to net interest margin in the third quarter of 2017.  Excluding the impact of accretion income, net interest margin declined two basis points from the third quarter of 2017 due to funding costs increasing faster than the yield on earning assets. 

Noninterest Income

Noninterest income for the third quarter of 2018 was $18.3 million, an increase of 15.3% from $15.8 million for the second quarter of 2018.  The increase was primarily attributable to an increase in commercial FHA revenue, which was partially offset by a decrease in residential mortgage banking revenue.

Relative to the third quarter of 2017, noninterest income increased 18.6% from $15.4 million.  The increase was primarily due to greater wealth management revenue and core banking fees, partially offset by lower commercial FHA and residential mortgage banking revenue.

Wealth management revenue for the third quarter of 2018 was $5.5 million, an increase of 2.8% from $5.3 million in the second quarter of 2018.  Compared to the third quarter of 2017, wealth management revenue increased 57.3%, which was attributable to 6.8% organic growth in assets under administration and the addition of Alpine’s wealth management business.

Commercial FHA revenue for the third quarter of 2018 was $3.1 million, compared to $0.3 million in the second quarter of 2018.  The Company originated $82.8 million in rate lock commitments during the third quarter of 2018, compared to $11.1 million in the prior quarter.  Compared to the third quarter of 2017, commercial FHA revenue decreased 17.1%.

Noninterest Expense

Noninterest expense for the third quarter of 2018 was $50.3 million, which included $9.6 million in integration and acquisition expense, compared with $46.5 million for the second quarter of 2018, which included $2.0 million in integration and acquisition expense.  Excluding integration and acquisition expense and loss on mortgage servicing rights held for sale, noninterest expense decreased $3.8 million, or 8.5%, from the prior quarter.  The decrease was primarily due to the realization of additional cost savings from the Alpine acquisition, the impact of efficiency enhancements in certain business areas, lower variable compensation and lower professional fees.

Relative to the third quarter of 2017, noninterest expense increased 4.0% from $48.4 million.  Excluding integration and acquisition expenses and loss on mortgage servicing rights held for sale, noninterest expense increased 11.1% from $36.4 million.  The increase was primarily due to the addition of personnel and facilities from Alpine. 

Loan Portfolio

Total loans outstanding were $4.16 billion at September 30, 2018, compared with $4.10 billion at June 30, 2018 and $3.16 billion at September 30, 2017.  The increase in total loans from June 30, 2018, was primarily attributable to organic growth in commercial loans and leases, and consumer lending.  Equipment financing balances increased $45.9 million from June 30, 2018, which are booked within the commercial loans and leases portfolio.  The increase in total loans from September 30, 2017 was primarily attributable to the addition of Alpine’s loans.

Deposits

Total deposits were $4.14 billion at September 30, 2018, compared with $4.16 billion at June 30, 2018, and $3.11 billion at September 30, 2017.  The decrease in total deposits from June 30, 2018 was primarily attributable to expected attrition in the Alpine deposit base following the system conversion, as well as the Company’s focus on managing deposit costs.  The increase in total deposits from September 30, 2017 was primarily attributable to the addition of Alpine’s deposits.

Asset Quality

Nonperforming loans totaled $38.6 million, or 0.93% of total loans, at September 30, 2018, compared with $28.3 million, or 0.69% of total loans, at June 30, 2018, and $33.4 million, or 1.06% of total loans, at September 30, 2017.  The increase in nonperforming loans during the third quarter of 2018 was primarily attributable to the downgrade of two commercial loans and one commercial real estate loan.

Net charge-offs for the third quarter of 2018 were $0.7 million, or 0.07% of average loans on an annualized basis. 

The Company recorded a provision for loan losses of $2.1 million for the third quarter of 2018.  The Company’s allowance for loan losses was 0.47% of total loans and 50.9% of non-performing loans at September 30, 2018, compared with 0.45% of total loans and 64.4% of non-performing loans at June 30, 2018.  Fair market value discounts recorded in connection with acquired loan portfolios represented 0.59% of total loans at September 30, 2018, compared with 0.62% of total loans at June 30, 2018.

Capital

At September 30, 2018, 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, 2018Well Capitalized
Regulatory Requirements
Total capital to risk-weighted assets12.35%10.00%
Tier 1 capital to risk-weighted assets9.85%8.00%
Tier 1 leverage ratio8.24%5.00%
Common equity Tier 1 capital8.37%6.50%
Tangible common equity to tangible assets (1)7.03%NA

(1)  A non-GAAP financial measure. Refer to page 14 for a reconciliation to the comparable GAAP financial measures.

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 26, 2018 to discuss its financial results.  The call can be accessed via telephone at (877) 516-3531; passcode: 4447968.  A recorded replay can be accessed through November 2, 2018 by dialing (855) 859-2056; passcode: 4447968.

A slide presentation relating to the third quarter 2018 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.  As of September 30, 2018, the Company had total assets of approximately $5.7 billion, and its Wealth Management Group had assets under administration of approximately $3.2 billion.  Midland provides a full range of commercial and consumer banking products and services, business equipment financing, merchant credit card services, trust and investment management, and insurance and financial planning services.  In addition, multi-family and healthcare facility FHA financing is provided through Love Funding, Midland’s non-bank subsidiary.  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 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,” “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 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 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, at jludwig@midlandsb.com or (217) 342-7321
Stephen A. Erickson, Chief Financial Officer, at serickson@midlandsb.com or (217) 540-1712
Douglas J. Tucker, Sr. V.P., Corporate Counsel, at dtucker@midlandsb.com or (217) 342-7321


                      
MIDLAND STATES BANCORP, INC.  
CONSOLIDATED FINANCIAL SUMMARY (unaudited)  
                      
  For the Quarter Ended  
  September 30,  June 30,  March 31,   December 31,    September 30,   
(dollars in thousands, except per share data) 2018  2018  2018  2017  2017  
Earnings Summary                     
Net interest income $  45,081  $  48,286  $  38,185  $  36,036  $  36,765  
Provision for loan losses    2,103     1,854     2,006     6,076     1,489  
Noninterest income    18,272     15,847     16,502     13,998     15,403  
Noninterest expense    50,317     46,452     49,499     36,192     48,363  
Income before income taxes    10,933     15,827     3,182     7,766     2,316  
Income taxes    2,436     3,045     1,376     5,775     280  
Net income     8,497     12,782     1,806     1,991     2,036  
Preferred stock dividends, net    35     36     36     37     27  
Net income available to common shareholders $  8,462  $  12,746  $  1,770  $  1,954  $  2,009  
                      
Diluted earnings per common share $  0.35  $  0.52  $  0.08  $  0.10  $  0.10  
Weighted average shares outstanding - diluted    24,325,743     24,268,111     21,351,511     19,741,833     19,704,217  
Return on average assets    0.59%    0.91%    0.15%    0.18%    0.18% 
Return on average shareholders' equity    5.68%    8.77%    1.47%    1.74%    1.78% 
Return on average tangible common equity (1)    8.69%    13.48%    2.05%    2.31%    2.38% 
Net interest margin    3.59%    3.91%    3.69%    3.73%    3.78% 
Efficiency ratio (1)    63.02%    67.76%    68.39%    64.64%    69.00% 
                      
Adjusted Earnings Performance Summary                     
Adjusted earnings (1) $15,632  $14,469  $10,265  $8,403  $9,173  
Adjusted diluted earnings per common share (1) $0.64  $0.59  $0.48  $0.42  $0.46  
Adjusted return on average assets (1)  1.09%  1.03%  0.87%  0.76%  0.82% 
Adjusted return on average shareholders' equity (1)  10.45%  9.93%  8.34%  7.34%  8.03% 
Adjusted return on average tangible common equity (1)  16.02%  15.27%  11.86%  9.88%  10.83% 
                      
(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  
  September 30,  June 30,  March 31,  December 31,  September 30,  
(in thousands, except per share data) 2018  2018  2018  2017  2017  
Net interest income:                     
Total interest income $  56,987  $58,283   $46,505  $43,500  $43,246  
Total interest expense    11,906   9,997    8,320   7,464   6,481  
Net interest income    45,081     48,286      38,185     36,036     36,765  
Provision for loan losses    2,103   1,854    2,006   6,076   1,489  
Net interest income after provision for loan losses    42,978     46,432      36,179     29,960     35,276  
Noninterest income:                     
Commercial FHA revenue    3,130   326    3,330   3,127   3,777  
Residential mortgage banking revenue    1,154   2,116    1,418   1,556   2,317  
Wealth management revenue    5,467   5,316    4,079   3,587   3,475  
Service charges on deposit accounts    2,804   2,693    1,967   1,828   2,133  
Interchange revenue    2,759   2,929    2,045   1,538   1,724  
(Loss) gain on sales of investment securities, net    -   (70)   65   2   98  
Other income    2,958   2,537    3,598   2,360   1,879  
Total noninterest income    18,272     15,847      16,502     13,998     15,403  
Noninterest expense:                     
Salaries and employee benefits    22,528   23,467    28,395   17,344   22,411  
Occupancy and equipment    5,040   4,708    4,252   3,859   4,144  
Data processing    10,817   5,106    4,479   3,640   5,786  
Professional    2,632   3,178    3,749   3,611   4,151  
Amortization of intangible assets    1,853   1,576    1,675   1,035   1,187  
Loss on mortgage servicing rights held for sale    270     188      -   442   3,617  
Other expense    7,177   8,229    6,949   6,261   7,067  
Total noninterest expense    50,317     46,452      49,499     36,192     48,363  
Income before income taxes    10,933     15,827      3,182     7,766     2,316  
Income taxes    2,436   3,045    1,376   5,775   280  
Net income    8,497     12,782      1,806     1,991     2,036  
Preferred stock dividends, net    35   36    36   37   27  
Net income available to common shareholders $  8,462  $  12,746   $  1,770  $  1,954  $  2,009  
                      
Basic earnings per common share $0.35  $0.53   $0.08  $0.10  $0.10  
Diluted earnings per common share $0.35  $0.52   $0.08  $0.10  $0.10  
                      

 

                     
MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                     
  As of 
  September 30,  June 30,  March 31,  December 31,  September 30, 
(in thousands) 2018  2018  2018  2017  2017
Assets                    
Cash and cash equivalents $242,433   $276,331   $331,183   $215,202   $183,572  
Investment securities   685,753    708,001    738,172    450,525    467,852  
Loans  4,156,282    4,095,811    4,029,150    3,226,678    3,157,972  
Allowance for loan losses  (19,631)   (18,246)   (17,704)   (16,431)   (16,861) 
Total loans, net  4,136,651    4,077,565    4,011,446    3,210,247    3,141,111  
Loans held for sale, at fair value  35,246    41,449    25,267    50,089    35,874  
Premises and equipment, net  95,062    94,783    95,332    76,162    80,941  
Other real estate owned  3,684    3,911    5,059    5,708    6,379  
Mortgage servicing rights, at lower of cost or fair value  51,626    52,381    56,427    56,352    56,299  
Mortgage servicing rights held for sale  4,419    4,806    3,962    10,176    10,618  
Intangible assets  39,228    41,081    46,473    16,932    17,966  
Goodwill  164,044    164,044    155,674    98,624    97,351  
Cash surrender value of life insurance policies  138,600    137,681    136,766    113,366    112,591  
Other assets  127,866    128,567    117,611    109,318    137,207  
Total assets $5,724,612   $5,730,600   $5,723,372   $4,412,701   $4,347,761  
                     
Liabilities and Shareholders' Equity                    
Noninterest-bearing deposits $991,311   $1,001,802   $1,037,710   $724,443   $674,118  
Interest-bearing deposits  3,151,895    3,158,055    3,196,105    2,406,646    2,440,349  
Total deposits  4,143,206    4,159,857    4,233,815    3,131,089    3,114,467  
Short-term borrowings  145,450    114,536    130,693    156,126    153,443  
FHLB advances and other borrowings  652,253    678,873    587,493    496,436    488,870  
Subordinated debt  94,093    94,053    94,013    93,972    54,581  
Trust preferred debentures  47,676    47,559    47,443    47,330    47,218  
Other liabilities  47,788    43,187    44,530    38,203    38,493  
Total liabilities  5,130,466    5,138,065    5,137,987    3,963,156    3,897,072  
Total shareholders’ equity  594,146    592,535    585,385    449,545    450,689  
Total liabilities and shareholders’ equity $5,724,612   $5,730,600   $5,723,372   $4,412,701   $4,347,761  

 

                      
MIDLAND STATES BANCORP, INC. 
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) 
                      
  As of  
  September 30,  June 30,  March 31,  December 31,  September 30,  
(in thousands) 2018  2018  2018  2017  2017  
Loan Portfolio                     
Commercial loans and leases $1,034,546  $991,164  $1,026,253  $761,073  $714,390  
Commercial real estate loans  1,711,926   1,711,296   1,773,510   1,440,011   1,472,284  
Construction and land development loans  239,480   247,889   234,837   200,587   182,513  
Residential real estate loans  586,134   601,808   570,321   453,552   445,747  
Consumer loans  584,196   543,654   424,229   371,455   343,038  
Total loans $4,156,282  $4,095,811  $4,029,150  $3,226,678  $3,157,972  
                      
Deposit Portfolio                     
Noninterest-bearing demand deposits $991,311  $1,001,802  $1,037,710  $724,443  $674,118  
Interest-bearing:                     
Checking accounts  1,047,914   1,024,506   993,253   785,934   800,649  
Money market accounts  836,151   843,984   840,415   646,426   633,844  
Savings accounts  445,640   460,560   466,887   281,212   278,977  
Time deposits  633,654   638,215   672,034   502,810   493,777  
Brokered deposits  188,536   190,790   223,516   190,264   233,102  
Total deposits $4,143,206  $4,159,857  $4,233,815  $3,131,089  $3,114,467  

 

                     
MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                     
  For the Quarter Ended 
  September 30,  June 30,  March 31,  December 31,  September 30, 
(dollars in thousands) 2018  2018  2018  2017  2017
Average Balance Sheets                    
Cash and cash equivalents $154,526  $227,499  $138,275  $173,540  $202,407 
Investment securities  700,018   731,017   548,168   461,475   474,216 
Loans  4,106,367   3,982,958   3,477,917   3,198,036   3,173,027 
Loans held for sale  48,715   31,220   40,841   40,615   46,441 
Nonmarketable equity securities  42,770   38,872   34,890   33,703   31,224 
Total interest-earning assets  5,052,396   5,011,566   4,240,091   3,907,369   3,927,315 
Non-earning assets  639,323   639,864   536,750   497,502   498,364 
Total assets $5,691,719  $5,651,430  $4,776,841  $4,404,871  $4,425,679 
                     
Interest-bearing deposits $3,172,422  $3,158,816  $2,675,339  $2,433,461  $2,527,490 
Short-term borrowings  139,215   120,794   148,703   181,480   182,015 
FHLB advances and other borrowings  608,153   573,107   489,567   472,709   434,860 
Subordinated debt  94,075   94,035   93,993   88,832   54,570 
Trust preferred debentures  47,601   47,488   47,373   47,263   47,152 
Total interest-bearing liabilities  4,061,466   3,994,240   3,454,975   3,223,745   3,246,087 
Noninterest-bearing deposits  989,142   1,025,308   782,164   684,907   688,986 
Other noninterest-bearing liabilities  47,654   47,229   40,761   42,251   37,289 
Shareholders' equity  593,457   584,653   498,941   453,968   453,317 
Total liabilities and shareholders' equity $5,691,719  $5,651,430  $4,776,841  $4,404,871  $4,425,679 
                     
Yields                    
Cash and cash equivalents  1.96%  1.79%  1.53%  1.28%  1.19%
Investment securities  3.01%  2.91%  2.87%  3.01%  2.86%
Loans  4.88%  5.21%  4.85%  4.88%  4.90%
Loans held for sale  4.17%  3.79%  4.25%  3.62%  3.74%
Nonmarketable equity securities  5.01%  4.97%  4.64%  4.78%  4.20%
Total interest-earning assets  4.52%  4.71%  4.49%  4.48%  4.44%
Interest-bearing deposits  0.77%  0.64%  0.62%  0.58%  0.53%
Short-term borrowings  0.61%  0.38%  0.34%  0.26%  0.22%
FHLB advances and other borrowings  2.09%  1.81%  1.55%  1.42%  1.36%
Subordinated debt  6.44%  6.44%  6.44%  6.46%  6.40%
Trust preferred debentures  6.81%  6.59%  5.94%  5.51%  5.37%
Total interest-bearing liabilities  1.16%  1.00%  0.98%  0.92%  0.79%
Net interest margin  3.59%  3.91%  3.69%  3.73%  3.78%
                     

 

                      
MIDLAND STATES BANCORP, INC. 
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) 
                      
  As of and for the Quarter Ended  
  September 30,  June 30,  March 31,  December 31,  September 30,  
(dollars in thousands, except per share data) 2018  2018  2018  2017  2017  
Asset Quality                     
Loans 30-89 days past due $22,678  $19,362  $20,138  $15,405  $13,526  
Nonperforming loans  38,561   28,342   26,499   26,760   33,431  
Nonperforming assets  41,638   31,542   29,938   30,894   38,109  
Net charge-offs   718   1,312   732   6,506   52  
Loans 30-89 days past due to total loans  0.55%  0.47%  0.50%  0.48%  0.43% 
Nonperforming loans to total loans  0.93%  0.69%  0.66%  0.83%  1.06% 
Nonperforming assets to total assets  0.73%  0.55%  0.52%  0.70%  0.88% 
Allowance for loan losses to total loans  0.47%  0.45%  0.44%  0.51%  0.53% 
Allowance for loan losses to nonperforming loans  50.91%  64.38%  66.81%  61.40%  50.43% 
Net charge-offs to average loans  0.07%  0.13%  0.09%  0.81%  0.01% 
                      
Wealth Management                     
Trust assets under administration $3,218,013  $3,188,909  $3,125,051  $2,051,249  $2,001,106  
                      
Market Data                     
Book value per share at period end $24.96  $24.92  $24.67  $23.35  $23.45  
Tangible book value per share at period end (1) $16.38  $16.25  $16.11  $17.31  $17.41  
Market price at period end $32.10  $34.26  $31.56  $32.48  $31.68  
Shares outstanding at period end  23,694,637   23,664,596   23,612,430   19,122,049   19,093,153  
                      
Capital                     
Total capital to risk-weighted assets  12.35%  12.27%  12.37%  13.26%  12.21% 
Tier 1 capital to risk-weighted assets  9.85%  9.78%  9.84%  10.19%  10.20% 
Tier 1 leverage ratio  8.24%  8.16%  9.55%  8.63%  8.54% 
Tier 1 common capital to risk-weighted assets  8.37%  8.28%  8.30%  8.45%  8.50% 
Tangible common equity to tangible assets (1)  7.03%  6.96%  6.89%  7.70%  7.85% 
                      
(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
                     
Adjusted Earnings Reconciliation                     
                     
  For the Quarter Ended 
  September 30,  June 30,  March 31,  December 31,  September 30, 
(dollars in thousands, except per share data) 2018  2018  2018  2017  2017
Income before income taxes - GAAP $  10,933   $  15,827   $  3,182  $  7,766   $  2,316 
Adjustments to noninterest income:                    
(Loss) gain on sales of investment securities, net   -      (70)     65     2      98 
Other    (12)     (48)     150     37      45 
 Total adjustments to noninterest income    (12)     (118)     215     39      143 
Adjustments to noninterest expense:                    
Loss on mortgage servicing rights held for sale    270      188      -     442      3,617 
Integration and acquisition expenses    9,559      2,019      11,884     2,686      8,303 
 Total adjustments to noninterest expense    9,829      2,207      11,884     3,128      11,920 
Adjusted earnings pre tax   20,774      18,152      14,851     10,855      14,093 
Adjusted earnings tax     5,142      3,683      4,586     6,992      4,920 
Revaluation of net deferred tax assets    -      -      -     (4,540)     - 
Adjusted earnings - non-GAAP   15,632      14,469      10,265     8,403      9,173 
Preferred stock dividends, net    35      36      36     37      27 
Adjusted earnings available to common shareholders - non-GAAP $  15,597   $  14,433   $  10,229  $  8,366   $  9,146 
Adjusted diluted earnings per common share $  0.64   $  0.59   $  0.48  $  0.42   $  0.46 
Adjusted return on average assets    1.09%      1.03%      0.87%    0.76%      0.82%
Adjusted return on average shareholders' equity    10.45%      9.93%      8.34%    7.34%     8.03%
Adjusted return on average tangible common equity    16.02%      15.27%      11.86%    9.88%     10.83%

 

MIDLAND STATES BANCORP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (continued)
                     
                     
Efficiency Ratio Reconciliation                    
  For the Quarter Ended 
  September 30,  June 30,  March 31,  December 31,  September 30, 
(dollars in thousands) 2018  2018  2018  2017  2017
Noninterest expense - GAAP $  50,317   $  46,452   $  49,499   $  36,192   $  48,363  
Loss on mortgage servicing rights held for sale    (270)     (188)     -      (442)     (3,617) 
Integration and acquisition expenses    (9,559)     (2,019)     (11,884)     (2,686)     (8,303) 
Adjusted noninterest expense $  40,488   $  44,245   $  37,615   $  33,064   $  36,443  
                     
Net interest income - GAAP $  45,081   $  48,286   $  38,185   $  36,036   $  36,765  
Effect of tax-exempt income   585      541      394      659      687  
Adjusted net interest income    45,666      48,827      38,579      36,695      37,452  
                     
Noninterest income - GAAP $  18,272   $  15,847   $  16,502   $  13,998   $  15,403  
Mortgage servicing rights impairment     297      500      133      494      104  
Loss (gain) on sales of investment securities, net   -      70      (65)     (2)     (98) 
Other    12      48      (150)     (37)     (45) 
Adjusted noninterest income    18,581      16,465      16,420      14,453      15,364  
                     
Adjusted total revenue $  64,247   $  65,292   $  54,999   $  51,148   $  52,816  
                     
Efficiency ratio    63.02%     67.76%     68.39%     64.64%      69.00% 
                     

 

                     
MIDLAND STATES BANCORP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (continued) 
                     
Tangible Common Equity to Tangible Assets Ratio and Tangible Book Value Per Share             
                     
  As of 
  September 30,  June 30,  March 31,  December 31,  September 30, 
(dollars in thousands, except per share data) 2018  2018  2018  2017  2017
Shareholders' Equity to Tangible Common Equity                    
Total shareholders' equity—GAAP $  594,146   $  592,535   $  585,385   $  449,545   $  450,689  
Adjustments:                    
  Preferred stock    (2,829)     (2,876)     (2,923)     (2,970)     (3,015) 
  Goodwill    (164,044)     (164,044)     (155,674)     (98,624)     (97,351) 
  Other intangibles    (39,228)     (41,081)     (46,473)     (16,932)     (17,966) 
Tangible common equity $  388,045   $  384,534   $  380,315   $  331,019   $  332,357  
                     
Total Assets to Tangible Assets:                    
Total assets—GAAP $  5,724,612   $  5,730,600   $  5,723,372   $  4,412,701   $  4,347,761  
Adjustments:                    
  Goodwill    (164,044)     (164,044)     (155,674)     (98,624)     (97,351) 
  Other intangibles    (39,228)     (41,081)     (46,473)     (16,932)     (17,966) 
Tangible assets $  5,521,340   $  5,525,475   $  5,521,225   $  4,297,145   $  4,232,444  
                     
Common Shares Outstanding    23,694,637      23,664,596      23,612,430      19,122,049      19,093,153  
                     
Tangible Common Equity to Tangible Assets    7.03%      6.96%     6.89%
     7.70%      7.85% 
Tangible Book Value Per Share $  16.38   $  16.25   $  16.11   $  17.31   $  17.41  
                     
Return on Average Tangible Common Equity (ROATCE)                 
                     
 For the Quarter Ended
  September 30,  June 30,  March 31,  December 31,  September 30, 
(dollars in thousands) 2018  2018  2018  2017  2017
Net income available to common shareholders $  8,462   $  12,746   $  1,770   $  1,954   $  2,009  
                     
Average total shareholders' equity—GAAP $  593,457   $  584,653   $  498,941   $  453,968   $  453,317  
Adjustments:                    
  Preferred stock     (2,859)     (2,905)     (2,952)     (2,997)     (3,126) 
  Goodwill    (164,044)     (158,461)     (118,996)     (97,406)     (97,129) 
  Other intangibles    (40,228)     (44,098)     (27,156)     (17,495)     (18,153) 
Average tangible common equity $  386,326   $  379,189   $  349,837   $  336,070   $  334,909  
ROATCE    8.69%     13.48%     2.05%     2.31%     2.38% 
                     

 

EdgarFiling

EXHIBIT 99.2

 

Midland States Bancorp, Inc. NASDAQ: MSBI Third Quarter 2018 Earnings Call

 
 

2 Forward - Looking Statements. This presentation may contain forward - looking statements within the meaning of the federal securities laws. Forward - looking statements express management’s current expectations, forecasts of future events or long - term goals, and may be based upon beliefs, expectations and assumptions of Midland’s management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “shoul d” or other 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. These risks and uncertainties sho uld be considered in evaluating forward - looking statements and undue reliance should not be placed on such statements. Additional information concerning Midland and its respective businesses, including additional factors that could materially affect Midla nd’ s financial results, are included in Midland’s filings with the Securities and Exchange Commission. Use of Non - GAAP Financial Measures. This presentation contains certain financial information determined by methods other than 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,” “Efficiency Ratio,” “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. 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. 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.

 
 

Overview of 3Q18 3 Improving Efficiencies 3Q18 Earnings Stronger Contribution from Love Funding • Alpine conversion completed • Efficiency ratio improved to 63.0% from 67.8% in prior quarter • Rate lock commitments increased to $82.8 million from $11.1 million in prior quarter • Commercial FHA revenue increased to $3.1 million from $0.3 million in prior quarter Key Operating Trends • Loan growth driven by portfolios providing higher risk - adjusted yields • Relatively stable net interest margin (excluding accretion income) (1) Represents a non - GAAP financial measure. See “Non - GAAP Reconciliation” in the appendix. Net income of $8.5 million, or $0.35 diluted EPS • Integration and acquisition expenses of $9.6 million • Adjusted earnings 1 of $0.64 per diluted share

 
 

Loan Portfolio Total Loans 4 • Total loan growth of $60.5 million or 5.9% annualized • Strongest growth in commercial loans and leases, and consumer lending • Equipment loan and lease financings increased $45.9 million, or 17.3%, from June 30, 2018 with YTD growth of $105.7 million, or 51.4% • Remixing of loan portfolio resulting in lower residential real estate loan balances Loan Portfolio Mix (in millions, as of quarter - end) (in millions, as of quarter - end) 3Q 2018 2Q 2018 3Q 2017 Commercial loans and leases $ 1,035 $ 991 $ 714 Commercial real estate 1,712 1,711 1,472 Construction and land development 239 248 183 Residential real estate 586 602 446 Consumer 584 544 343 Total $ 4,156 $ 4,096 $ 3,158 $3,158 $3,227 $4,029 $4,096 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 $4,156

 
 

Total Deposits Total Deposits 5 • Total deposits decreased $16.7 million to $4.14 billion • Decline in deposits attributable to expected attrition in Alpine deposit base following system conversion and focus on managing deposit costs • $ 23.4 million increase in interest - bearing checking accounts Deposit Mix (in millions, as of quarter - end) (in millions, as of quarter - end) 3Q 2018 2Q 2018 3Q 2017 Noninterest - bearing demand $ 991 $ 1,002 $ 674 Interest - bearing: Checking 1,048 1,025 801 Money market 836 844 634 Savings 446 461 279 Time 634 638 494 Brokered 189 191 233 Total deposits $ 4,143 $ 4,160 $ 3,114 $3,114 $3,131 $4,234 $4,160 $4,143 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018

 
 

$3.48 $3.59 $4.08 $5.32 $5.47 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 $2,001 $2,051 $3,125 $3,189 $3,218 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 • Total Wealth Management revenue increased 2.8% from the prior quarter • Year - over - year organic growth in assets under administration was $135.7 million, or 6.8%, excluding Alpine acquisition Wealth Management Wealth Management Revenue 6 Assets Under Administration (in millions) (in millions)

 
 

0.27% 0.26% 0.16% 0.40% 0.10% 3.78% 3.73% 3.69% 3.91% 3.59% 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 NIM Accretion Income • Net interest income and margin decreased due to lower accretion income • Excluding the impact of accretion income, net interest margin declined 2 bps • Expected scheduled accretion income following finalization of purchase accounting for Alpine: » $2.0 - $2.5 million in 4Q18; $7.0 - $7.5 million in FY 2019 Net Interest Income/Margin Net Interest Margin 7 Net Interest Income (in millions) $5.9 $2.6 $4.4 $1.9 $4.9 $3.0 $2.7 $2.0 $5.5 $1.7 $36.8 $36.0 $38.2 $48.3 $45.1 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 NII Accretion Income

 
 

Noninterest Income 8 • Noninterest income increased 15.3% from prior quarter • Commercial FHA revenue returned to more normalized level ($3.1 million) • Decline in residential mortgage banking revenue reflects lower demand • Wealth management remains largest contributor to noninterest income Noninterest Income (in millions) $ 15.4 $14.0 $16.5 $15.8 $18.3 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 All Other Community Banking Revenue Wealth Management Residential Mortgage Commercial FHA (1) Represents service charges, interchange revenue, net gain (loss) on sale of investment securities, and other income (1)

 
 

Noninterest Expense and Operating Efficiency 9 • Efficiency Ratio 1 was 63.0% in 3Q18 vs. 67.8% in 2Q18 • Integration and acquisition related expenses » $9.6 million in 3Q18 » $2.0 million in 2Q18 • Loss on mortgage servicing rights held for sale » $0.3 million in 3Q18 » $0.2 million in 2Q18 • Excluding these items, noninterest expense decreased 8.5% on a linked - quarter basis • 2019 quarterly run - rate for noninterest expense projected to be approximately $43 million Noninterest Expense and Efficiency Ratio 1 (Noninterest expense in millions) $50.3 $48.4 $36.2 $49.5 $46.5 $11.9 $3.1 $11.9 $2.2 $9.8 69.0% 64.6% 68.4% 67.8% 63.0% 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 Total Noninterest Expense Adjustments to Noninterest Expense Efficiency Ratio (1) Represents a non - GAAP financial measure. See “Non - GAAP Reconciliation” in the appendix.

 
 

Asset Quality NCO / Average Loans 10 • Increase in nonperforming loans primarily attributable to the downgrade of two commercial loans and one commercial real estate loan • Continued low level of charge - offs • Provision for loan losses of $2.1 million in 3Q18 • ALLL/total loans of 0.47% and credit marks/total loans of 0.59% at September 30, 2018 Nonperforming Loans / Total Loans (Total Loans as of quarter - end) 1.06% 0.83% 0.66% 0.69% 0.93% 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 0.01% 0.81% 0.09% 0.13% 0.07% 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018

 
 

Outlook • Realization of additional operating leverage expected to drive higher level of profitability in 2019 • Continued discipline in balance sheet growth to manage liquidity and protect net interest margin • Loan production will remain focused on areas with most attractive risk - adjusted yields • CEO succession plan » Leon Holschbach to retire from CEO position on December 31, 2018 » Jeffrey Ludwig to assume role of CEO of Midland States Bancorp 11

 
 

APPENDIX

 
 

13 Adjusted Earnings Reconciliation (dollars in thousands, except per share data) Income before income taxes - GAAP $ 10,933 $ 15,827 $ 3,182 $ 7,766 $ 2,316 Adjustments to noninterest income: (Loss) gain on sales of investment securities, net - (70) 65 2 98 Other (12) (48) 150 37 45 Total adjustments to noninterest income (12) (118) 215 39 143 Adjustments to noninterest expense: Loss on mortgage servicing rights held for sale 270 188 - 442 3,617 Integration and acquisition expenses 9,559 2,019 11,884 2,686 8,303 Total adjustments to noninterest expense 9,829 2,207 11,884 3,128 11,920 Adjusted earnings pre tax 20,774 18,152 14,851 10,855 14,093 Adjusted earnings tax 5,142 3,683 4,586 6,992 4,920 Revaluation of net deferred tax assets - - - (4,540) - Adjusted earnings - non-GAAP 15,632 14,469 10,265 8,403 9,173 Preferred stock dividends, net 35 36 36 37 27 Adjusted earnings available to common shareholders - non-GAAP $ 15,597 $ 14,433 $ 10,229 $ 8,366 $ 9,146 Adjusted diluted earnings per common share $ 0.64 $ 0.59 $ 0.48 $ 0.42 $ 0.46 Adjusted return on average assets 1.09 % 1.03 % 0.87 % 0.76 % 0.82 % Adjusted return on average shareholders' equity 10.45 % 9.93 % 8.34 % 7.34 % 8.03 % Adjusted return on average tangible common equity 16.02 % 15.27 % 11.86 % 9.88 % 10.83 % 2018 2018 2018 2017 2017 September 30,  June 30,  March 31,  December 31,  September 30,  MIDLAND STATES BANCORP, INC.RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES For the Quarter Ended

 
 

14 Efficiency Ratio Reconciliation (dollars in thousands) Noninterest expense - GAAP $ 50,317 $ 46,452 $ 49,499 $ 36,192 $ 48,363 Loss on mortgage servicing rights held for sale (270) (188) - (442) (3,617) Integration and acquisition expenses (9,559) (2,019) (11,884) (2,686) (8,303) Adjusted noninterest expense $ 40,488 $ 44,245 $ 37,615 $ 33,064 $ 36,443 Net interest income - GAAP $ 45,081 $ 48,286 $ 38,185 $ 36,036 $ 36,765 Effect of tax-exempt income 585 541 394 659 687 Adjusted net interest income 45,666 48,827 38,579 36,695 37,452 Noninterest income - GAAP $ 18,272 $ 15,847 $ 16,502 $ 13,998 $ 15,403 Mortgage servicing rights impairment 297 500 133 494 104 Loss (gain) on sales of investment securities, net - 70 (65) (2) (98) Other 12 48 (150) (37) (45) Adjusted noninterest income 18,581 16,465 16,420 14,453 15,364 Adjusted total revenue $ 64,247 $ 65,292 $ 54,999 $ 51,148 $ 52,816 Efficiency ratio 63.02 % 67.76 % 68.39 % 64.64 % 69.00 % 2018 2018 2018 2017 2017 September 30,  June 30,  March 31,  December 31,  September 30,  MIDLAND STATES BANCORP, INC.RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (continued) For the Quarter Ended

 
 

15 Tangible Common Equity to Tangible Assets Ratio and Tangible Book Value Per Share (dollars in thousands, except per share data) Shareholders' Equity to Tangible Common Equity Total shareholders' equity—GAAP $ 594,146 $ 592,535 $ 585,385 $ 449,545 $ 450,689 Adjustments: Preferred stock (2,829) (2,876) (2,923) (2,970) (3,015) Goodwill (164,044) (164,044) (155,674) (98,624) (97,351) Other intangibles (39,228) (41,081) (46,473) (16,932) (17,966) Tangible common equity $ 388,045 $ 384,534 $ 380,315 $ 331,019 $ 332,357 Total Assets to Tangible Assets: Total assets—GAAP $ 5,724,612 $ 5,730,600 $ 5,723,372 $ 4,412,701 $ 4,347,761 Adjustments: Goodwill (164,044) (164,044) (155,674) (98,624) (97,351) Other intangibles (39,228) (41,081) (46,473) (16,932) (17,966) Tangible assets $ 5,521,340 $ 5,525,475 $ 5,521,225 $ 4,297,145 $ 4,232,444 Common Shares Outstanding 23,694,637 23,664,596 23,612,430 19,122,049 19,093,153 Tangible Common Equity to Tangible Assets 7.03 % 6.96 % 6.89 % 7.70 % 7.85 % Tangible Book Value Per Share $ 16.38 $ 16.25 $ 16.11 $ 17.31 $ 17.41 Return on Average Tangible Common Equity (ROATCE) (dollars in thousands) Net income available to common shareholders $ 8,462 $ 12,746 $ 1,770 $ 1,954 $ 2,009 Average total shareholders' equity—GAAP $ 593,457 $ 584,653 $ 498,941 $ 453,968 $ 453,317 Adjustments: Preferred stock (2,859) (2,905) (2,952) (2,997) (3,126) Goodwill (164,044) (158,461) (118,996) (97,406) (97,129) Other intangibles (40,228) (44,098) (27,156) (17,495) (18,153) Average tangible common equity $ 386,326 $ 379,189 $ 349,837 $ 336,070 $ 334,909 ROATCE 8.69 % 13.48 % 2.05 % 2.31 % 2.38 % September 30,  June 30,  March 31,  December 31,  September 30,  2018 2018 2018 2017 2017 For the Quarter Ended MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (continued) As of September 30,  June 30,  March 31,  December 31,  September 30,  2018 2018 2018 2017 2017