Midland States Bancorp, Inc. · NASDAQ:MSBI
Midland States Bancorp — Q2 2022 Earnings Presentation
21 slides from Midland States Bancorp's earnings presentation, 2022
Slide 1: Second Quarter 2022 Earnings Call
Midland States Bancorp, Inc. NASDAQ: MSBI Second Quarter 2022 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 2Q22
Overview of 2Q22 • Net income of $21.9 million, or $0.97 diluted EPS, up from $0.92 in prior quarter Higher Earnings and • Pre-tax, pre-provision earnings(1) of $35.9 million, up from $32.0 million in prior quarter Improved Returns • ROAA of 1.19%, ROATCE(1) of 19.14%, and Adjusted PTPP ROAA(1) of 1
Slide 4: Loan Portfolio
Loan Portfolio • Total loans increased $255.6 million from prior quarter to $5.80 billion • Growth in CRE loans, equipment finance, conventional commercial loans, and consumer loans offset lower end-of-period balances on commercial FHA warehouse credit lines and lower PPP loans • Equipment finance b
Slide 5: Total Deposits
Total Deposits • Total deposits increased $126.9 million from prior quarter to $6.18 billion • Increase driven by higher balances of noninterest-bearing and lower-cost interest-bearing deposits • Strengthened commercial banking and treasury management teams consistently generating new relationships
Slide 6: Net Interest Income/Margin
Net Interest Income/Margin • Net interest income increased 7.9% from the prior quarter due primarily to higher average loan balances and an increase in net interest margin • Net interest margin increased 15 bps from prior quarter due to the redeployment of excess liquidity into the loan portfolio an
Slide 7: Wealth Management
Wealth Management • During 2Q22, assets under administration decreased $446.2 million, primarily due to market performance • Wealth Management revenue declined due to lower AUA Assets Under Administration Wealth Management Revenue (in millions) (in millions) $4,217 $7.18 $7.18 $4,078 $7.14 $4,058 $4
Slide 8: Noninterest Income
Noninterest Income • Noninterest income decreased 6.4% from prior quarter, primarily due to lower wealth management revenue • Impairment on commercial MSRs impacted noninterest income by $0.9 million and $0.4 million in 2Q22 and 1Q22, respectively • Decline in wealth management and larger commercial
Slide 9: Noninterest Expense and Operating Efficiency
Noninterest Expense and Operating Efficiency Noninterest Expense and Efficiency Ratio (1) • Efficiency Ratio (1) was 53.1% in 2Q22 vs. 55.7% in 1Q22 (Noninterest expense in millions) • Adjustments to non-interest expense: $55.0 70.0% ($ in millions) 2Q22 1Q22 $50.0 $48.9 Integration and $45.8 acquis
Slide 10: Asset Quality
Asset Quality • Nonperforming loans increased $4.0 million due to one CRE loan where no loss is expected • Generally positive trends in the loan portfolio with continued upgrades of watch list loans • Delinquencies in consumer portfolio remain exceptionally low • Net charge-offs of $2.8 million, or
Slide 11: Changes in Allowance for Credit Losses
Changes in Allowance for Credit Losses ($ in thousands) Specific Portfolio Economic Reserves Changes Factors Changes to specific New loans Changes to macro- reserves economic variables Changes in credit and forecasts quality including risk ratings Changes to other economic Changes in qua
Slide 12: ACL by Portfolio
ACL by Portfolio ($ in thousands) June 30, 2022 March 31, 2022 % of % of Portfolio Loans ACL Loans ACL Total Loans Total Loans Commercial $ 747,782 $ 5,412 0.72% $ 796,498 $ 5,078 0.64% Warehouse Lines 23,872 - 0.00% 83,999 - 0.00% Commercial Other 643,477 7,336 1.14% 641,628 7,543 1.18% Equipment F
Slide 13: Outlook
Outlook • Loan pipeline remains strong, but loan growth expected to moderate in second half of 2022 as higher rates and uncertain economic conditions are likely to have a greater impact on loan demand • Continued loan growth, NIM expansion, and expense control should drive further increases in earni
Slide 14: Appendix
APPENDIX Midland [=] States Bancorp, Inc.
Slide 15: Paycheck Protection Program Overview
Paycheck Protection Program Overview Paycheck Protection Program Paycheck Protection Program (as of 6/30/22) Loan Forgiveness Loans Outstanding $6.4 million As of 3/31/22 As of 6/30/22 Total Fees Earned $15.1 million Loans Submitted to SBA $362.7 million $378.2 million Fees Recognized in 2Q22 $0.7 m
Slide 16: Commercial Loans and Leases by Industry
Commercial Loans and Leases by Industry Industries as a percentage of Commercial, ($s in millions) Retail Trade Wholesale Trade Other Services Health Care CRE and Equipment Finance Loans and Leases $159 $115 $103 $100 with outstanding balances 3.6% 2.6% 2.4% 2.3% of $4.37 billion as of 6/30/22 Gener
Slide 17: Commercial Real Estate Portfolio by Collateral Type
Commercial Real Estate Portfolio by Collateral Type Collateral type as a percentage of the Hotel/Motel All Others Commercial Real Estate and Construction Assisted Living $167 $160 ($s in millions) Portfolio with outstanding balances of $180 6.6% 6.3% $2.54 billion as of 6/30/22 7.1% Office $149 5.9%
Slide 18: Capital and Liquidity Overview
Capital and Liquidity Overview Capital Ratios Liquidity Sources (as of 6/30/22) (as of 6/30/22) 15.00% ($ in millions) Cash and Cash Equivalents $ 270.1 11.44% Unpledged Securities 261.5 10.60% FHLB Committed Liquidity 1,159.5 9.85% 9.85% FRB Discount Window Availability 22.7 10.00% 9.12% 8.63% Tota
Slide 19: Adjusted Earnings Reconciliation
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) 2022 2022 2021 2021 2021 Income before income taxes - GA
Slide 20: Efficiency Ratio Reconciliation
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) 2022 2022 2021 2021 2021 Noninterest expense - GAAP $ 41,339 $ 40,88
Slide 21: Tangible Common Equity and Tangible Book Value Reconciliation
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) 2022 2022 2
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