Midland States Bancorp, Inc. · NASDAQ:MSBI
Midland States Bancorp — Q1 2020 Earnings Presentation
23 slides from Midland States Bancorp's earnings presentation, 2020
Slide 1: Midland States Bancorp, Inc. First Quarter 2020 Earnings Call
Midland States Bancorp, Inc. NASDAQ: MSBI First Quarter 2020 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: COVID-19 Response Overview
COVID-19 RESPONSE OVERVIEW 3
Slide 4: Our COVID-19 Response: Employees
Our COVID-19 Response: Employees • Regular meetings of Pandemic Response Team • Employee awareness campaign initiated based on CDC guidelines • All non-essential business travel suspended • Free COVID-19 testing added to health care plans and sick time benefits expanded • 9 temporary branch closures
Slide 5: Our COVID-19 Response: Clients
Our COVID-19 Response: Clients • $263 million in PPP loans approved through April 16, 2020 • $665 million in loan payment deferral requests received, including equipment finance loans and leases • Credit line utilization rates remained steady at 66-68% throughout March • New consumer deposit and com
Slide 6: Loan Portfolio Overview
Loan Portfolio Overview Loan Portfolio Mix Broadly diversified loan portfolio by type of customer and loan type Residential Real Estate $548M 13% 67% of portfolio is fixed; 33% is floating Non-Owner Occupied CRE $810M Portfolio is 72% Commercial Loans and 28% Consumer 18% Consumer Loans as of
Slide 7: Commercial Loans and Leases by Industry
Commercial Loans and Leases by Industry Other Services Wholesale Trade Industries as a percentage of Commercial, Trans. / Warehousing CRE and Equipment Finance Loans and Leases 3% 2% 3% as of 3/31/20 Finance and Insurance 4% RE / Rental & Leasing 25% Trucking 5% Ag., Forestry, & Fishing 5% Health Ca
Slide 8: Commercial Real Estate Portfolio by Collateral Type
Commercial Real Estate Portfolio by Collateral Type Collateral type as a percentage of the Multi-Family Commercial Real Estate Portfolio as of 9% Office 3/31/20 7% Industrial / Warehouse Residential 1-4 Family 10% 6% Farmland 5% Hotel / Restaurant Medical Building 10% 4% C-Store / Gas Station 4% Car
Slide 9: CECL Adoption – Drivers of Change from ALLL
CECL Adoption – Drivers of Change from ALLL ($ in thousands) Day 1 Specific Portfolio Economic Adjustment Reserves Changes Factors Changes to macro- economic variables Changes to specific New loans and forecasts reserves from Changes in credit 12/31/19 Changes to other quality CECL Day 1
Slide 10: Net Interest Margin
Net Interest Margin • Normalized net interest margin was stable from prior quarter, down 1 bp • Overall cost of deposits decreased 6 bps in 1Q20 • Average rate on new and renewed loans in 1Q20 declined to 4.59% from 4.86% in 4Q19 • $193.8 million in time deposits scheduled to mature in 2Q20 with wei
Slide 11: Capital and Liquidity Overview
Capital and Liquidity Overview Capital Ratios Liquidity Sources (as of 3/31/20) (as of 3/31/20) 15.00% ($ in millions) 13.73% Cash and Cash Equivalents $ 449.4 12.38% Unpledged Securities 309.0 11.76% 11.76% FHLB Committed Liquidity 436.6 FRB Discount Window Availability 17.7 10.12% Primary Liquidit
Slide 12: First Quarter 2020 Financial Review
FIRST QUARTER 2020 FINANCIAL REVIEW 12
Slide 13: Loan Portfolio
Loan Portfolio • Total loans decreased $25.2 million to $4.38 billion • Decrease primarily attributable to declines in consumer, residential real estate and commercial real estate portfolios; partially offset by growth in the commercial loans and leases portfolio • Decline in consumer portfolio due
Slide 14: Total Deposits
Total Deposits • Total deposits increased $106.4 million to $4.65 billion, or 9.4% on an annualized basis • Growth in deposits attributable to increase in core deposits, primarily from commercial customers • Continued intentional run-off of higher-cost time deposits, replaced with lower-cost core de
Slide 15: Net Interest Income/Margin
Net Interest Income/Margin • Net interest income decreased 4.2% • Excluding the impact of accretion income, net interest margin declined 1 basis point • Accretion income declined primarily due to adoption of CECL • Decline in earning asset yields largely offset by decline in cost of deposits • Decli
Slide 16: Wealth Management
Wealth Management • During 1Q20, assets under administration decreased $442.5 million, primarily due to market performance • Total Wealth Management revenue increased 5.6% from the prior quarter • Increase primarily attributable to higher trust fees related to tax preparation and higher estate fees
Slide 17: Noninterest Income
Noninterest Income • Noninterest income decreased 54.8% from prior quarter • Decline primarily related to $8.5 million impairment of commercial mortgage servicing rights and lower commercial FHA revenue • Wealth management and residential mortgage banking revenue increased from the prior quarter Non
Slide 18: Noninterest Expense and Operating Efficiency
Noninterest Expense and Operating Efficiency Noninterest Expense and Efficiency Ratio (1) • Efficiency Ratio (1) was 63.8% in 1Q20 vs. 59.5% in 4Q19 (Noninterest expense in millions) • Adjustments to non-interest expense: $48.0 $46.3 ($ in millions) 1Q20 4Q19 $5.2 $42.7 Integration and acquisition $
Slide 19: Asset Quality
Asset Quality • Adoption of new CECL accounting standard resulted in approximately $12.8 million increase in ACL, relative to ALLL as of 12/31/19 • $12.8 million in net charge-offs in 1Q20, of which approximately $10.2 million related to three NPLs with specific reserves established against them for
Slide 20: Appendix
APPENDIX Midland [=] States Bancorp, Inc.
Slide 21: Reconciliations of Non-GAAP Financial Measures: Adjusted Earnings
MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES Adjusted Earnings Reconciliation For the Quarter Ended March 31, December 31, September 30, June 30, March 31, (dollars in thousands, except per share data) 2020 2019 2019 2019 2019 Income before income taxes - GAAP $ 2,005
Slide 22: Reconciliations of Non-GAAP Financial Measures: Efficiency Ratio
MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (continued) Efficiency Ratio Reconciliation For the Quarter Ended March 31, December 31, September 30, June 30, March 31, (dollars in thousands) 2020 2019 2019 2019 2019 Noninterest expense - GAAP $ 42,675 $ 46,325 $ 48,025
Slide 23: Reconciliations of Non-GAAP Financial Measures: Tangible Common Equity
MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (continue d) Tangible Common Equity to Tangible Asse ts Ratio and Tangible Book Value Pe r Share As of March 31, De ce mbe r 31, Se pte mbe r 30, June 30, March 31, (dollars in thousands, except per share data) 2020 2019 201
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