Midland States Bancorp, Inc. · NASDAQ:MSBI
Midland States Bancorp — Q2 2017 Earnings Presentation
17 slides from Midland States Bancorp's earnings presentation, 2017
Slide 1: Midland States Bancorp, Inc. Second Quarter 2017 Earnings Call
Midland States Bancorp, Inc. NASDAQ: MSBI Second Quarter 2017 Earnings Call
Slide 2: Forward-Looking Statements
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
Slide 3: Second Quarter 2017 Summary
Second Quarter 2017 Summary Centrue Acquisition Closed on June 9, 2017 Strong EPS Accretion Centrue expected to be 8-9% accretive to EPS Net income of $3.5 million, or $0.20 diluted EPS 2Q17 Earnings • Integration and acquisition expenses of $7.5 million, or $0.31 per diluted share • MSR impairment
Slide 4: Net Interest Income/Margin
Net Interest Income/Margin • Net interest income increased 7.1% from 1Q17 primarily due to higher interest income on loans due to organic loan growth and partial quarter contribution of Centrue • Net interest margin, excluding accretion income, increased by 5 basis points, due to higher average yiel
Slide 5: Non-Interest Income
Non-Interest Income • Fee generating businesses drive 32% of total revenue in 2Q17 • $1.7 million in MSR impairments • Growth in wealth management offset by lower commercial FHA and residential mortgage banking revenue Non-Interest Income (in millions) $30.5 $14.9 $16.3 $14.0 $13.6 2Q 2016 3Q 2016 4
Slide 6: Non-Interest Expense and Operating Efficiency
Non-Interest Expense and Operating Efficiency Non-Interest Expense and Efficiency Ratio1 • Efficiency Ratio1 increased to (Non-Interest expense in millions) 67% in 2Q17 vs. 66% in 1Q17 • Integration and acquisition $37.6 related expenses $34.1 ➢ $7.5 million in 2Q17 $30.9 $30.8 ➢ $1.3 million in 1Q1
Slide 7: Loan Portfolio
Loan Portfolio • Total loans at quarter end increased by $729 million in 2Q17 vs. 1Q17 • $688 million of the increase was due to Centrue acquisition (preliminary credit mark of 1.6%) • $41 million of organic growth, most notably in residential mortgage portfolio Loan Portfolio Mix Total Loans (in mi
Slide 8: Total Deposits
Total Deposits • Total deposits at quarter end increased by $806 million in 2Q17 vs. 1Q17 • $742 million of increase was due to Centrue acquisition • $253 million increase in noninterest-bearing demand deposits Deposit Mix Total Deposits (in millions, as of quarter-end) (in millions, as of quarter-e
Slide 9: Asset Quality
Asset Quality • Non-performing loans decreased by $1.3 million from 1Q17 • Net charge-offs totaled $0.8 million in 2Q17, or 13 bps of average loans • Provision for loan losses of $0.5 million in 2Q17 • ALL + credit marks/total loans of 0.98% at June 30, 2017 Non-performing Loans / Total Loans NCO /
Slide 10: Business Unit Review - Love Funding
Business Unit Review - Love Funding • Commercial FHA origination and servicing business focused on multifamily and healthcare facilities • Long-term replacement reserve deposits for maintenance/capex of properties and escrow deposits are low-cost sources of funds • Originated $152 million in rate lo
Slide 11: Business Unit Review - Residential Mortgage
Business Unit Review - Residential Mortgage • Residential mortgage loan origination and servicing • Strong quarter of total residential mortgage loan production (portfolio and originated for sale) • $78 million in mortgage rate locks on loans originated for sale • $801 thousand in MSR impairment, la
Slide 12: Business Unit Review - Heartland Business Credit
Business Unit Review - Heartland Business Credit • Equipment leasing sourced from a network of equipment manufacturers and brokers • $23 million in originations • Attractive yields – average rate (ex. accretion) on lease finance portfolio was 5.34% • 14% portfolio growth vs. 2Q16 New Originations Le
Slide 13: Business Unit Review – Wealth Management
Business Unit Review – Wealth Management • Wealth Management group offers Trust and Estate services, Investment Management, Financial Planning and Employer Sponsored Retirement Plans • First full quarter with CedarPoint Investment Advisors • Total revenue increased 19% from the prior quarter • Year-
Slide 14: Outlook
Outlook • Higher state tax rate will increase effective tax rate by 30 bps • Business climate in Illinois remains favorable despite fiscal challenges at state and municipal levels • Continue to expect 8-12% loan growth for full year • Stronger fee income expected in second half of 2017 • Synergies f
Slide 15: Appendix
APPENDIX
Slide 16: Reconciliations of Non-GAAP Financial Measures
MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES For the Quarter Ended June 30, March 31, December 31, September 30, June 30, (in thousands, except per share data) 2017 2017 2016 2016 2016 Adjusted Earnings Reconciliation Income before income taxes - GAAP $ 4,916 $ 11,473
Slide 17: Tangible Common Equity and Tangible Book Value Per Share Reconciliation
MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES Tangible Common Equity to Tangible Assets Ratio and Tangible Book Value Per Share As of June 30, March 31, December 31, September 30, June 30, (dollars in thousands, except per share data) 2017 2017 2016 2016 2016 Shareholde
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