Midland States Bancorp, Inc. · NASDAQ:MSBI
Midland States Bancorp — Q4 2020 Earnings Presentation
25 slides from Midland States Bancorp's earnings presentation, January 2021
Slide 1: Fourth Quarter 2020 Earnings Call
Midland States Bancorp, Inc. NASDAQ: MSBI Fourth 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: Overview of 4Q20
Overview of 4Q20 • Net income of $8.3 million, or $0.36 diluted EPS, includes $4.9 million in charges related to prepayment of FHLB advances • Adjusted earnings(1) of $12.5 million, or $0.54 diluted EPS, excluding charges primarily related to 4Q20 Earnings prepayments of FHLB advances • Adjusted Pre
Slide 4: Paycheck Protection Program Overview
Paycheck Protection Program Overview Paycheck Protection Program Paycheck Protection Program (as of 12/31/20) Loan Forgiveness Loans Outstanding $184.4 million As of 12/31/20 As of 1/25/21 Number of Loans 1,541 Loans Submitted to SBA $155.6 million $171.2 million Average Loan Size $119,663 Total Fee
Slide 5: Loan Deferral Overview
Loan Deferral Overview Total Loan Deferrals Deferral Type (as of December 31, 2020) As of As of Percentage September 30, 2020 December 31, 2020 Change Full Payment Deferral $106.1 million Total Loans Deferred $279.3 million $209.1 million (25.1%) Deferred Loans Making $103.0 million % of Total Loans
Slide 6: Loan Portfolio
Loan Portfolio • Total loans increased $161.9 million, or 3.3% from prior quarter, to $5.10 billion • Increase primarily attributable to growth in commercial and commercial real estate portfolios, partially offset by decrease in residential real estate loans • Commercial loans increased due to an ex
Slide 7: Midland Equipment Finance Portfolio Overview
Midland Equipment Finance Portfolio Overview Portfolio Characteristics Total Deferred (as of 12/31/20) Loans and Leases Nationwide portfolio providing financing solutions As of As of As of to equipment vendors and end-users 6/30/20 9/30/20 12/31/20 Total Outstanding $861.5 million Loans and Leases (
Slide 8: Hotel/Motel Portfolio Overview
Hotel/Motel Portfolio Overview Portfolio Characteristics (CRE & C&I) (as of 12/31/20) Total Outstanding $180.2 million (3.5% of total loans) Number of Loans 53 Average Loan Size $2.4 million Largest Loan $11.3 million Average LTV 52% Total Deferred Loans as of 9/30/20 $105.6 million (56.3% of portfo
Slide 9: GreenSky Consumer Loan Portfolio Overview
GreenSky Consumer Loan Portfolio Overview Portfolio Characteristics Prime Credit (as of 12/31/20) Average FICO score of 770 $767.2 million Total Outstanding (15.0% of total loans) No losses to MSBI in 9 year history of the portfolio Number of Loans 335,449 Portfolio can be sold to provide liqu
Slide 10: Total Deposits
Total Deposits • Total deposits increased $72.3 million, or 1.4% from prior quarter, to $5.10 billion • Growth in deposits attributable to increase in retail and commercial FHA servicing deposits, offset by declines in commercial customer and money market accounts • Noninterest-bearing demand deposi
Slide 11: Net Interest Income/Margin
Net Interest Income/Margin • Net interest income increased 7.1% from the prior quarter due to higher average loan balances and increased net interest margin • Net interest margin, excluding PPP income, was unchanged from prior quarter as lower earning asset yields were offset by favorable shift in m
Slide 12: Wealth Management
Wealth Management • During 4Q20, assets under administration increased $219.9 million, primarily due to market performance • Wealth Management revenue increased 5.6% from prior quarter, primarily due to higher assets under administration Assets Under Administration Wealth Management Revenue (in mill
Slide 13: Noninterest Income
Noninterest Income • Noninterest income reduced 24.2% from prior quarter, partially due to a $2.3 million impairment of commercial mortgage servicing rights (“MSRs”) and gains on sales of securities recorded in the prior quarter • Excluding the impact of the impairment of commercial MSRs and gains o
Slide 14: Noninterest Expense and Operating Efficiency
Noninterest Expense and Operating Efficiency Noninterest Expense and Efficiency Ratio (1) • Efficiency Ratio (1) was 58.6% in 4Q20 vs. 57.7% in 3Q20 (Noninterest expense in millions) • Adjustments to non-interest expense: ($ in millions) 4Q20 3Q20 Integration and $53.9 62.2% acquisition related ($0.
Slide 15: Asset Quality
Asset Quality • Nonperforming loans/total loans decreased to 1.06% from 1.36% at the end of the prior quarter, due to the resolution of long-term problem loans, the transfer of loans to Other Real Estate Owned, and minimal new inflow • Net charge-offs of $2.3 million, or 0.19% of average loans • Pro
Slide 16: Changes in Allowance for Credit Losses
Changes in Allowance for Credit Losses ($ in thousands) Specific Portfolio Economic Reserves Changes Factors Changes to macro- economic variables and forecasts Changes to other New loans economic Changes to specific qualitative factors reserves Changes in credit quality including risk down
Slide 17: ACL by Portfolio
ACL by Portfolio ($ in thousands) Total Loans at % of Total Loans at % of Portfolio ACL ACL 12/31/20 Total Loans 9/30/20 Total Loans Commercial $ 937,382 $ 8,537 0.90% $ 729,745 $ 7,846 1.08% Warehouse Lines 273,298 - 0.00% 136,761 - 0.00% Commercial Other 748,193 11,314 1.51% 813,412 10,014 1.23% E
Slide 18: 2021 Outlook and Priorities
2021 Outlook and Priorities • Maintain strong capital and liquidity positions to continue supporting clients and communities through the duration of the COVID-19 pandemic • Targeting low- to mid-single-digit loan growth (excluding PPP loans) resulting from continued growth in equipment finance, comm
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 Trans. / Ground Passenger 3.3% 2.3% as of 12/31/20 3.7% Health Care RE / Rental & Leasing 3.9% 20.3% General Freight Trucking 4.6% 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 Hotel/Motel Commercial Real Estate and Construction Office 9.1% Portfolio as of 12/31/20 7.0% Residential 1-4 Family Industrial / Warehouse 6.0% 9.2% Farmland 4.3% C-Store / Gas Station All Others 3.7% 9.3% Me
Slide 22: Capital and Liquidity Overview
Capital and Liquidity Overview Capital Ratios Liquidity Sources (as of 12/31/20) (as of 12/31/20) 15.00% ($ in millions) 13.24% Cash and Cash Equivalents $ 341.6 Unpledged Securities 261.7 11.77% FHLB Committed Liquidity 334.0 10.78% 10.78% FRB Discount Window Availability 54.4 Primary Liquidity 991
Slide 23: Adjusted Earnings Reconciliation
MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) Adjusted Earnings Reconciliation For the Quarter Ended December 31, September 30, June 30, March 31, December 31, (dollars in thousands, except per share data) 2020 2020 2020 2020 2019 Income before income taxes
Slide 24: Efficiency Ratio Reconciliation
MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued) Efficiency Ratio Reconciliation For the Quarter Ended December 31, September 30, June 30, March 31, December 31, (dollars in thousands) 2020 2020 2020 2020 2019 Noninterest expense - GAAP $ 47,048 $ 5
Slide 25: Tangible Common Equity and Tangible Book Value Reconciliation
MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudite d) (continue d) Tangible Common Equity to Tangible Asse ts Ratio and Tangible Book Value Pe r Share As of De ce mbe r 31, Se pte mbe r 30, June 30, March 31, De ce mbe r 31, (dollars in thousands, except per share
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