Midland States Bancorp, Inc. · NASDAQ:MSBI
Midland States Bancorp — Q2 2021 Earnings Presentation
25 slides from Midland States Bancorp's earnings presentation, 2021
Slide 1: Second Quarter 2021 Earnings Call
Midland States Bancorp, Inc. NASDAQ: MSBI Second Quarter 2021 Earnings Call 1
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 expressing management’s current expectations, forecasts of future events or long-term goals may be based upon beliefs, expectations and a
Slide 3: Overview of 2Q21
Overview of 2Q21 • Net income of $20.1 million, or $0.88 diluted EPS • Adjusted earnings(1) of $19.8 million, or $0.86 diluted EPS, excludes impact of: 2Q21 Earnings $6.8 million tax benefit related to settlement of prior tax issue $3.6 million in professional fees related to settlement $3.7 m
Slide 4: Paycheck Protection Program Overview
Paycheck Protection Program Overview Paycheck Protection Program Paycheck Protection Program (as of 6/30/21) Loan Forgiveness Loans Outstanding $146.7 million As of 3/31/21 As of 6/30/21 Round 1 $50.1 million Loans Submitted to SBA $196.5 million $263.8 million Round 2 $96.6 million Loans Forgiven b
Slide 5: Loan Deferral Overview
Loan Deferral Overview Total Loan Deferrals Deferral Type (as of June 30, 2021) As of As of As of Dec. 31, 2020 Mar. 31, 2021 Jun. 30, 2021 Full Payment Deferral $22.3 million Total Loans Deferred $209.1 million $219.1 million $107.3 million Deferred Loans Making $85.0 million % of Total Loans 4.1%
Slide 6: Loan Portfolio
Loan Portfolio • Total loans decreased $74.9 million from prior quarter to $4.84 billion • Decline due to lower end of period balances on commercial FHA warehouse credit lines, lower PPP loans and continued runoff in residential real estate portfolio driven by refinancing activity • Increase in loan
Slide 7: Midland Equipment Finance Portfolio Overview
Midland Equipment Finance Portfolio Overview Portfolio Characteristics Total Deferred (as of 6/30/21) Loans and Leases Nationwide portfolio providing financing solutions As of As of As of to equipment vendors and end-users 12/31/20 3/31/21 6/30/21 Total Outstanding $871.5 million Loans and Leases (1
Slide 8: Hotel/Motel Portfolio Overview
Hotel/Motel Portfolio Overview Portfolio Characteristics (CRE & C&I) (as of 6/30/21) Total Outstanding $180.4 million (3.7% of total loans) Number of Loans 64 Average Loan Size $2.8 million Largest Loan $11.3 million Average LTV 52% Total Deferred Loans as of 3/31/21 $117.4 million (70.3% of portfol
Slide 9: GreenSky Consumer Loan Portfolio Overview
GreenSky Consumer Loan Portfolio Overview Portfolio Characteristics Prime Credit (as of 6/30/21) Average FICO score of 772 $796.5 million Total Outstanding (16.5% of total loans) No losses to MSBI in 10 year history of portfolio Number of Loans 371,110 Portfolio can be sold to provide liquidit
Slide 10: Total Deposits
Total Deposits • Total deposits decreased $144.2 million, or 2.7% from prior quarter, to $5.20 billion • Decline in deposits largely attributable to decrease in commercial FHA servicing deposits and outflow of retail deposits as consumers spend stimulus payments • $163 million of CDs maturing in 3Q2
Slide 11: Net Interest Income/Margin
Net Interest Income/Margin • Net interest income decreased 3.4% from the prior quarter due to lower prepayment fees, an unfavorable shift in the mix of earning assets, and the recovery of interest on a previously charged-off loan in 1Q21 • Net interest margin, excluding accretion income, declined 17
Slide 12: Wealth Management
Wealth Management • During 2Q21, assets under administration increased $517.2 million, primarily due to acquisition of ATG Trust Company in June • Wealth Management revenue increased 10.1% from prior quarter, primarily due to one month contribution of ATG Trust Company Assets Under Administration We
Slide 13: Noninterest Income
Noninterest Income • Noninterest income increased 17.6% from prior quarter • Impairment on commercial MSRs impacted noninterest income by $1.1 million and $1.3 million in 2Q21 and 1Q21, respectively • Excluding the impact of the impairment of commercial MSRs, noninterest income increased primarily d
Slide 14: Noninterest Expense and Operating Efficiency
Noninterest Expense and Operating Efficiency Noninterest Expense and Efficiency Ratio (1) • Efficiency Ratio (1) was 60.2% in 2Q21 vs. 56.9% in 1Q21 (Noninterest expense in millions) • Adjustments to non-interest expense: $60.0 64.0% ($ in millions) 2Q21 1Q21 $55.0 $53.9 63.0% Integration and ($3.8)
Slide 15: Asset Quality
Asset Quality • Nonperforming loans increased $8.5 million due primarily to addition of three loans in the hotel/motel portfolio • Sale of properties for slight gain resulted in a $7.5 million decline in OREO from 1Q21 • Net charge-offs of $4.0 million, or 0.33% of average loans, approximately half
Slide 16: Changes in Allowance for Credit Losses
Changes in Allowance for Credit Losses ($ in thousands) Specific Portfolio Economic Reserves Changes Factors Changes to specific reserves New loans Changes to macro- Changes in credit economic variables quality including and forecasts risk downgrades and deferrals Changes to other economic
Slide 17: ACL by Portfolio
ACL by Portfolio ($ in thousands) Total Loans at % of Total Loans at % of Portfolio ACL ACL 6/30/21 Total Loans 3/31/21 Total Loans Commercial $ 719,642 $ 5,825 0.81% $ 808,262 $ 8,214 1.02% Warehouse Lines 129,607 - 0.00% 205,115 - 0.00% Commercial Other 704,438 9,024 1.28% 766,632 9,125 1.19% Equi
Slide 18: Outlook
Outlook • Continued improvement in economic conditions should lead to reductions in problem loans and increased loan demand • Loan pipeline in Community Banking group approximately 14% higher than end of 1Q21, which should lead to higher level of loan growth in second half of 2021, favorable shift i
Slide 19: Appendix
APPENDIX Midland [=] States Bancorp, Inc.
Slide 20: Commercial Loans and Leases by Industry
Commercial Loans and Leases by Industry Industries as a percentage of Commercial, Other Services Wholesale Trade CRE and Equipment Finance Loans and Leases Health Care as of 6/30/21 3.0% 2.4% 3.1% Trans. / Ground Passenger RE / Rental & Leasing 4.4% 20.5% General Freight Trucking 4.4% Ag., Forestry,
Slide 21: Commercial Real Estate Portfolio by Collateral Type
Commercial Real Estate Portfolio by Collateral Type Collateral type as a percentage of the Industrial / Warehouse Commercial Real Estate and Construction 8.7% All Others Portfolio as of 6/30/21 Office 9.0% 6.0% Residential 1-4 Family 4.9% Hotel/Motel 9.6% Farmland 4.0% C-Store / Gas Station 3.9% Mix
Slide 22: Capital and Liquidity Overview
Capital and Liquidity Overview Capital Ratios Liquidity Sources (as of 6/30/21) (as of 6/30/21) 15.00% ($ in millions) 13.11% Cash and Cash Equivalents $ 425.1 Unpledged Securities 308.6 11.98% FHLB Committed Liquidity 748.6 11.06% 11.06% FRB Discount Window Availability 60.3 9.64% Primary Liquidity
Slide 23: Reconciliations of Non-GAAP Financial Measures: Adjusted Earnings
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) 2021 2021 2020 2020 2020 Income before income taxes - GA
Slide 24: Reconciliations of Non-GAAP Financial Measures: Efficiency Ratio
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, (dollars in thousands) 2021 2021 2020 2020 2020 Noninterest expense - GAAP $ 48,941 $ 39,07
Slide 25: Reconciliations of Non-GAAP Financial Measures: Tangible Common Equity
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) 2021 2021 2
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