Midland States Bancorp, Inc. · NASDAQ:MSBI
Midland States Bancorp — Q2 2018 Earnings Presentation
16 slides from Midland States Bancorp's earnings presentation, Jul 26, 2018
Slide 1: Midland States Bancorp, Inc. Second Quarter 2018 Earnings Call
Midland States Bancorp, Inc. NASDAQ: MSBI Second 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 2Q18
Overview of 2Q18 3 Improving Revenue Mix 2Q18 Earnings Key Operating Trends Addition of Alpine shifts business mix toward more stable sources of revenue • Increase in loan growth • Stable net interest margin (excluding accretion income) • Solid expense management and improving efficiency ratio Posit
Slide 4: Loan Portfolio
Loan Portfolio Total Loans 4 • Organic loan growth of $67 million or 6.6% annualized • Strongest growth in equipment financing, consumer lending and residential real estate • Equipment financing balances increased $38.1 million from March 31, 2018 » Production booked within either commercial or leas
Slide 5: Total Deposits
Total Deposits Total Deposits 5 • Total deposits decreased $74 million to $4.16 billion • Decline in DDA primarily attributable to normal fluctuations in servicing deposits • Decline in interest - bearing deposits primarily attributable to reduction in time and brokered deposits Deposit Mix (in mill
Slide 6: Wealth Management
$3.41 $3.48 $3.59 $4.18 $5.42 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 $1,930 $2,001 $2,051 $3,125 $3,189 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 • Wealth Management group offers Trust and Estate services, Investment Management, Financial Planning and Employer Sponsored Retirement Plans • Full quarte
Slide 7: Love Funding – Commercial FHA Review
Love Funding – Commercial FHA Review 7 • Change in leadership » Jon Camps, Senior Vice President, promoted to President of Love Funding » Reporting to Jeff Mefford, President of Midland States Bank • Expense levels adjusted for new revenue expectations » Approximately $2.0 million in annualized cost
Slide 8: Net Interest Income/Margin
0.13% 0.27% 0.26% 0.16% 0.40% 3.70% 3.78% 3.73% 3.69% 3.91% 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 NIM Accretion Income • Net interest income increased due to full quarter contribution of Alpine • Net interest margin increased due to higher accretion income • Excluding the impact of accretion incom
Slide 9: Non-Interest Income
Non - Interest Income 9 • Non - interest income declined 4.0% due to drop in commercial FHA revenue • All other major fee generating areas increased primarily due to full quarter contribution of Alpine • Increase in residential mortgage banking revenue driven by seasonal strength Non - Interest Inco
Slide 10: Non-Interest Expense and Operating Efficiency
Non - Interest Expense and Operating Efficiency 10 • Efficiency Ratio 1 was 67.8% in 2Q18 vs. 68.5% in 1Q18 • Integration and acquisition related expenses » $2.0 million in 2Q18 » $11.9 million in 1Q18 • Excluding these items, non - interest expense increased 18.1% on a linked - quarter basis due to
Slide 11: Asset Quality
Asset Quality NCO / Average Loans 11 • Stable asset quality in 2Q18 and modest net charge - offs • Slight increase in non - performing loans • Provision for loan losses of $1.9 million in 2Q18 • ALLL/total loans of 0.45% and credit marks/total loans of 0.81% at June 30, 2018 Non - Performing Loans /
Slide 12: Outlook
Outlook • Continued discipline in balance sheet growth to manage liquidity and protect net interest margin • Alpine system conversion completed in mid - July • Completion of Alpine integration expected to drive additional cost savings and improved efficiencies • Well positioned to deliver additional
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 $ 15,827 $ 3,182 $ 7,766 $ 2,316 $ 4,916 Adjustments to noninterest income: (Loss) gain on sales of investment securities, net (70) 65 2 98 55 Other (48) 150 37 45 (91) Total adjustmen
Slide 15: Efficiency Ratio Reconciliation
15 Efficiency Ratio Reconciliation (dollars in thousands) Noninterest expense - GAAP $ 46,553 $ 49,602 $ 36,192 $ 48,363 $ 37,645 Loss on mortgage servicing rights held for sale (188) - (442) (3,617) - Integration and acquisition expenses (2,019) (11,884) (2,686) (8,303) (7,450) Adjusted noninterest
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 $ 592,535 $ 585,385 $ 449,545 $ 450,689 $ 451,952 Adjustments: Preferred stock (2,876) (2,
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