Midland States Bancorp, Inc. · NASDAQ:MSBI
Midland States Bancorp — Q1 2018 Earnings Presentation
16 slides from Midland States Bancorp's earnings presentation, Apr 26, 2018
Slide 1: Midland States Bancorp, Inc. First Quarter 2018 Earnings Call
Midland States Bancorp, Inc. NASDAQ: MSBI First Quarter 2018 Earnings Call
Slide 2: Forward-Looking Statements
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, expect
Slide 3: Overview of 1Q18
Overview of 1Q18 3 Key Operating Trends Alpine Acquisition Succession Planning Closed on February 28, 2018 • Shifts business mix more towards community banking and wealth management • Expansion in net interest margin (excluding accretion income) • Higher average loan yields (excluding accretion inco
Slide 4: Loan Portfolio
Loan Portfolio Total Loans 4 • Total loans surpassed $4 billion due to addition of $ 791 million in loans from Alpine • Organic loan growth of $12 million or 1.5% annualized • Equipment lease portfolio increased $19 million • Pipeline for equipment financing has tripled since hiring of new team Loan
Slide 5: Total Deposits
Total Deposits Total Deposits 5 • Total deposits increased to $4.23 billion due to addition of $1.1 billion in deposits from Alpine • Noninterest - bearing demand deposits increased to 24.5% of total deposits from 23.1% • With the acquisition of Alpine, retail deposits represent 54% of deposits in 1
Slide 6: Wealth Management
$2.87 $3.41 $3.48 $3.59 $4.18 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 $1,869 $1,930 $2,001 $2,051 $3,125 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 • Wealth Management group offers Trust and Estate services, Investment Management, Financial Planning and Employer Sponsored Retirement Plans • Alpine adde
Slide 7: Love Funding – Commercial FHA
$6.4 $4.5 $3.4 $3.0 $3.0 $0.3 $6.7 $4.2 $3.8 $3.1 $3.3 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q2018 Gain Servicing $0.4 $0.1 $217 $152 $113 $99 $80 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 Loan Rate Locks Business Overview • Commercial FHA origination and servicing business for multifamily and healthcare f
Slide 8: Net Interest Income/Margin
0.35% 0.13% 0.27% 0.26% 0.16% 3.87% 3.70% 3.78% 3.73% 3.69% 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 NIM Accretion Income • Net interest income increased due to one month contribution of Alpine • Net interest margin declined due to lower accretion income • Excluding the impact of accretion income, NI
Slide 9: Non-Interest Income
Non - Interest Income 9 • Fee generating businesses accounted for 30% of total revenue in 1Q18 • Non - interest income increased 19% due to the one month contribution of Alpine • Continued increase in wealth management revenue • Decline in residential mortgage banking revenue due to lower servicing
Slide 10: Non-Interest Expense and Operating Efficiency
Non - Interest Expense and Operating Efficiency 10 • Efficiency Ratio 1 was 68.5% in 1Q18 vs. 64.6% in 4Q17 • Integration and acquisition related expenses » $11.9 million in 1Q18 » $2.7 million in 4Q17 • Loss on MSRs held - for - sale » $0.4 million in 4Q17 • Excluding these charges, noninterest exp
Slide 11: Asset Quality
Asset Quality NCO / Average Loans 11 • Stable asset quality in 1Q18 and modest net charge - offs • NPLs decline to 0.66% of total loans due to addition of Alpine portfolio • Provision for loan losses of $2.0 million in 1Q18 • ALL/total loans of 0.44% and credit marks/total loans of 0.65% at March 31
Slide 12: Outlook
Outlook • Integration of Alpine expected to drive cost savings and improved efficiencies • Alpine system conversion scheduled for mid - July • Focus on liquidity and NIM will impact organic loan growth • Higher revenue and improved efficiencies expected to drive increased profitability • Revenue mix
Slide 13: Appendix
APPENDIX
Slide 14: Adjusted Earnings Reconciliation
14 Adjusted Earnings Reconciliation (dollars in thousands, except per share data) Income before income taxes - GAAP $ 3,182 $ 7,766 $ 2,316 $ 4,916 $ 11,473 Adjustments to noninterest income: Gain on sales of investment securities, net 65 2 98 55 67 Gain (loss) on sale of other assets 150 37 45 (91)
Slide 15: Efficiency Ratio Reconciliation
15 Efficiency Ratio Reconciliation (dollars in thousands) Noninterest expense - GAAP $ 49,602 $ 36,192 $ 48,364 $ 37,644 $ 30,798 Loss on mortgage servicing rights held for sale - (442) (3,617) - - Integration and acquisition expenses (11,884) (2,686) (8,303) (7,450) (1,251) Adjusted noninterest exp
Slide 16: Tangible Common Equity to Tangible Assets Ratio and Tangible Book Value Per Share
16 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 $ 585,385 $ 449,545 $ 450,689 $ 451,952 $ 334,333 Adjustments: Preferred Stock (2,923) (2
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