Midland States Bancorp, Inc. · NASDAQ:MSBI
Midland States Bancorp — Q2 2024 Earnings Presentation
28 slides from Midland States Bancorp's earnings presentation, Jul 25, 2024
Slide 1: Midland States Bancorp, Inc. Second Quarter 2024 Earnings Presentation
1 Midland States Bancorp, Inc. NASDAQ: MSBI Second Quarter 2024 Earnings Presentation
Slide 2: Forward-Looking Statements
22 Forward-Looking Statements. This presentation may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements expressing management’s current expectations, forecasts of future events or long-term goals may be based upon beliefs, expectations an
Slide 3: Company Snapshot
33 Company Snapshot Financial Highlights as of June 30, 2024 $7.8 Billion Total Assets $5.9 Billion Total Loans $6.1 Billion Total Deposits $4.0 Billion Assets Under Administration YTD Adjusted ROAA(1): 0.53% YTD Adjusted Return on TCE(1): 6.51% TCE/TA: 6.59% YTD PTPP(1) ROAA: 1.48% Dividend Yield:
Slide 4: Overview of 2Q24 Financial Performance
4 Overview of 2Q24 Financial Performance Continued Success in Balance Sheet Management Strategies Successfully Growing Community Bank Continued Investments in Talent and Technology 4 • Net income available to common shareholders of $4.5 million, or $0.20 diluted EPS • Pre-tax, pre-provision earnings
Slide 5: Loan Portfolio
5 Loan Portfolio 5 • Total loans decreased $106.5 million from prior quarter to $5.85 billion • Decrease primarily driven by decline in equipment finance portfolio of $59.9 million and continued runoff of GreenSky portfolio of $67.7 million • Decrease in non-core portfolios partially offset by new l
Slide 6: Loan Segments
6 Loan Segments 6 • Total loans in our Community Bank increased $91 million from prior quarter to $3.13 billion • Loans in St. Louis region increased $59 million or 31% annualized in 2Q24 • Focused on core, in-market loan relationships • Continuing to add talent in faster growing markets to drive qu
Slide 7: Total Deposits
7 Total Deposits 7 • Total deposits decreased $206.0 million from end of prior quarter, primarily due to decreases in noninterest-bearing demand and brokered time • Deposit outflows primarily related to some larger commercial depositors moving funds into higher interest account including Midland's W
Slide 8: Deposit Summary as of June 30, 2024
8 Deposit Summary as of June 30, 2024 8 Deposits by Channel (in millions, as of quarter-end) 2Q 2024 1Q 2024 2Q 2023 Retail $ 2,742 $ 2,768 $ 2,780 Commercial 1,217 1,388 1,298 Public Funds 569 516 578 Wealth & Trust 299 324 329 Servicing 932 901 1,018 Brokered Deposits 239 309 270 Other 120 118 154
Slide 9: Investment Portfolio as of June 30, 2024
9 0.3% 4.6% 64.3% 7.9% 6.0% 7.8% 9.1% Treasuries US GSE & US Agency MBS - agency MBS - non agency State & Muni Corporate Other Investment Portfolio As of June 30, 2024 9 Fair Value of Investments by Type • All Investments are classified as Available for Sale • Average T/E Yield is 4.69% for 2Q24 • A
Slide 10: Liquidity Overview
10 Liquidity Overview 10 Liquidity Sources (in millions) June 30, 2024 March 31, 2024 Cash and Cash Equivalents $ 124.6 $ 167.3 Unpledged Securities 527.3 506.2 FHLB Committed Liquidity 797.1 1,167.4 FRB Discount Window Availability 610.3 613.3 Total Estimated Liquidity $ 2,059.4 $ 2,454.1 Condition
Slide 11: Net Interest Income/Margin
11 3.23% 3.20% 3.21% 3.18% 3.12% 2Q 2023 3Q 2023 4Q 2023 1Q 2024 2Q 2024 $58.8 $58.6 $58.1 $55.9 $55.1 2Q 2023 3Q 2023 4Q 2023 1Q 2024 2Q 2024 Net Interest Income/Margin 11 • Net interest income down slightly from prior quarter due to higher average FHLB borrowings • Net interest margin decreased 6b
Slide 12: Loans & Securities - Repricing and Maturity
12 Loans & Securities - Repricing and Maturity 12 Total Loans and Leases (net of unearned income)(1) (in millions) As of June 30, 2024 Repricing Term Rate Structure 3 mos or less 3-12 mos 1-3 years 3-5 years 5-10 years 10-15 years Over 15 years Total Floating Rate Adjustable Rate Fixed Rate Commerci
Slide 13: Wealth Management
13 Wealth Management 13 • Assets under administration increased $212 million mainly due to new accounts • New accounts include commercial customers moving funds of approximately $88 million to Wealth for higher rate and other options • Wealth Management fees decreased from prior quarter due to seaso
Slide 14: Noninterest Income
14 $18.8 $11.5 $20.5 $21.2 $17.7 Wealth Management Interchange Service Charges on Deposits Residential Mortgage All Other 2Q 2023 3Q 2023 4Q 2023 1Q 2024 2Q 2024 Noninterest Income 14 • Noninterest income decreased from prior quarter primarily due to 1Q24 incremental servicing revenues of $3.7 milli
Slide 15: Noninterest Expense and Operating Efficiency
15 $42.9 $42.0 $44.5 $44.9 $47.5 55.0% 55.8% 55.2% 58.0% 65.2% Total Noninterest Expense Efficiency Ratio 2Q 2023 3Q 2023 4Q 2023 1Q 2024 2Q 2024 Noninterest Expense and Operating Efficiency 15 Noninterest Expense and Efficiency Ratio (1) (Noninterest expense in millions) • Efficiency Ratio (1) was
Slide 16: Asset Quality
16 Asset Quality 16 • Nonperforming loans increased due to equipment financing loans and one $3.5 million commercial loan placed on non-accrual • Past due loans and substandard loans declined during the second quarter • Net charge-offs to average loans was 0.20% primarily driven by equipment finance
Slide 17: Changes in Allowance for Credit Losses
17 $78,057 $193 $15,264 $(1,331) $92,183 ACL March 31, 2024 Specific Reserves Portfolio Changes Economic Factors ACL June 30, 2024 Changes in Allowance for Credit Losses 17 ($ in thousands) ▪ Changes to specific reserves ▪ Changes in Loans ▪ Changes in Credit quality including risk rating ▪ Changes
Slide 18: ACL by Portfolio
18 ACL by Portfolio 18 ($ in thousands) June 30, 2024 March 31, 2024 Portfolio Loans ACL % of Total Loans Loans ACL % of Total Loans Commercial $ 829,888 $ 8,821 1.06 % $ 813,963 $ 9,135 1.12 % Commercial Other 570,979 15,426 2.70 % 601,704 12,194 2.03 % Equipment Finance Loans 461,409 11,839 2.57 %
Slide 19: 2024 Outlook and Priorities
19 2024 Outlook and Priorities 19 • Well positioned with increased levels of capital, liquidity, and reserves • Prudent risk management will remain top priority while economic uncertainty remains with business development efforts focused on adding new commercial and retail deposit relationships thro
Slide 20: Appendix
APPENDIX Midland [=] States Bancorp, ne.
Slide 21: Commercial Loans and Leases by Industry
2121 Industries as a percentage of Commercial, CRE and Equipment Finance Loans and Leases with outstanding balances of $4.73 billion as of 6/30/2024 ($s in millions) RE/Rental & Leasing $1,692.4 35.8% All Others $568.2 12.0% Skilled Nursing $403.1 8.5% Construction - General $303.1 6.4% Manufacturin
Slide 22: Commercial Real Estate Portfolio by Collateral Type
22 Commercial Real Estate Portfolio by Collateral Type 22 CRE Concentration (as of June 30, 2024) CRE as a % of Total Loans 49.5% CRE as a % of Total Risk-Based Capital (1) 264.4% Notes: (1) Represents non-owner occupied CRE loans only Collateral type as a percentage of the Commercial Real Estate an
Slide 23: Capital Ratios and Strategy
23 Capital Ratios and Strategy 23 • Capital initiatives increased CET1 to 8.63% from 7.77% at December 31, 2022 with limited buybacks below TBV • Internal capital generated from strong profitability and slower balance sheet growth expected to raise TCE ratio to 7.00%-7.75% by the end of 2024 • Capit
Slide 24: Reconciliations of Non-GAAP Financial Measures: Tangible Book Value Per Share
2424 MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) Tangible Book Value Per Share For the Year Ended (dollars in thousands, except per share data) 2018 2019 2020 2021 2022 2023 Shareholders' Equity to Tangible Common Equity Total shareholders' equity—GAAP $ 6
Slide 25: Reconciliations of Non-GAAP Financial Measures: Adjusted Earnings (Annual)
2525 MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) Adjusted Earnings Reconciliation For The Year Ended (dollars in thousands, except per share data) 2018 2019 2020 2021 2022 2023 Income before income taxes - GAAP $ 50,805 $ 72,471 $ 32,014 $ 99,112 $ 129,838
Slide 26: Reconciliations of Non-GAAP Financial Measures: Adjusted Earnings (Quarterly)
2626 MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) Adjusted Earnings Reconciliation For The Quarter Ended June 30, March 31, December 31, September 30, June 30, (dollars in thousands, except per share data) 2024 2024 2023 2023 2023 Income before income taxes
Slide 27: Reconciliations of Non-GAAP Financial Measures: Efficiency Ratio
2727 MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued) Efficiency Ratio Reconciliation For the Quarter Ended June 30, March 31, December 31, September 30, June 30, 2024 2024 2023 2023 2023 (dollars in thousands) Noninterest expense - GAAP $ 47,479 $
Slide 28: Reconciliations of Non-GAAP Financial Measures: Tangible Common Equity Ratio
2828 MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued) Tangible Common Equity to Tangible Assets Ratio and Tangible Book Value Per Share As of June 30, March 31, December 31, September 30, June 30, (dollars in thousands, except per share data) 2024 2
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