Midland States Bancorp, Inc. · NASDAQ:MSBI
Midland States Bancorp — Q4 2017 Earnings Presentation
16 slides from Midland States Bancorp's earnings presentation, 2018
Slide 1: Fourth Quarter 2017 Earnings Call
Midland States Bancorp, Inc. NASDAQ: MSBI Fourth Quarter 2017 Earnings Call
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 express management’s current expectations, forecasts of future events or long-term goals, and may be based upon beliefs, expectations and
Slide 3: Overview of 4Q17
Overview of 4Q17 Net income of $2.0 million, or $0.10 diluted EPS • Two charge-offs drive $4.6 million increase in provision expense from 3Q17, 4Q17 Earnings impacting EPS by $0.14 per diluted share • Adjusted pre-tax pre-provision earnings1 increase 8.7% from 3Q17 Significant items: Significant Ite
Slide 4: Net Interest Income/Margin
Net Interest Income/Margin • Net interest income decreased due to lower net interest margin • Net interest margin declined due to $40 million of subordinated debt added in preparation for acquisition of Alpine Bancorporation Net Interest Income Net Interest Margin (in millions) $36.8 $36.0 $3.0 $2.7
Slide 5: Non-Interest Income
Non-Interest Income • Fee generating businesses accounted for 28% of total revenue in 4Q17 • Continued increase in wealth management revenue • Soft quarters in commercial FHA and residential mortgage banking Non-Interest Income (in millions) $30.5 $16.3 $15.4 $13.6 $14.0 4Q 2016 1Q 2017 2Q 2017 3Q 2
Slide 6: Wealth Management
Wealth Management • Wealth Management group offers Trust and Estate services, Investment Management, Financial Planning and Employer Sponsored Retirement Plans • Total revenue increased 3% from the prior quarter • Year-over-year organic growth in assets under administration was $191 million, or 12%,
Slide 7: Love Funding – Commercial FHA Revenue
Love Funding – Commercial FHA Revenue Business Overview 4Q17 Highlights • Commercial FHA origination and servicing business • $99 million in rate locks for multifamily and healthcare facilities • Average servicing deposits of $295 million, up 9% • $18-$20 million in annual revenue from gain on loan
Slide 8: Non-Interest Expense and Operating Efficiency
Non-Interest Expense and Operating Efficiency Non-Interest Expense and Efficiency Ratio1 • Efficiency Ratio1 was 64.6% (Non-Interest expense in millions) in 4Q17 vs. 69.0% in 3Q17 • Integration and acquisition related expenses $48.4 $2.7 million in 4Q17 $8.3 million in 3Q17 • Loss on MSRs held-f
Slide 9: Loan Portfolio
Loan Portfolio • Total loans increased $69 million, or 9% annualized, during 4Q17 • Increases in all major lending areas except commercial real estate • Strongest growth in commercial, construction and consumer portfolios Loan Portfolio Mix Total Loans (in millions, as of quarter-end) (in millions,
Slide 10: Total Deposits
Total Deposits • Total deposits increased $17 million in 4Q17 • Strong inflows of core deposits partially offset by continued reduction of brokered CDs • Excluding brokered CDs, total deposits increased by $60 million in 4Q17 Deposit Mix Total Deposits (in millions, as of quarter-end) (in millions,
Slide 11: Asset Quality
Asset Quality • Net charge-offs primarily comprised of two retail CRE properties • NCOs drive reduction in NPLs to 0.83% of total loans • Provision for loan losses of $6.1 million in 4Q17 reflects growth in loan portfolio and NCOs • ALL/total loans of 0.51% and credit marks/total loans of 0.51% at D
Slide 12: Outlook
Outlook • Alpine acquisition expected to close by end of February 2018 • 2018 will see a significant shift in Midland’s business mix Core community banking and wealth management becoming larger percentage of revenue mix Commercial FHA and residential mortgage businesses becoming lower percentage
Slide 13: Appendix
APPENDIX
Slide 14: Adjusted Earnings Reconciliation
MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES Adjusted Earnings Reconciliation For the Quarter Ended December 31, September 30, June 30, March 31, December 31, (in thousands, except per share data) 2017 2017 2017 2017 2016 Income before income taxes - GAAP $ 7,766 $ 2,3
Slide 15: Efficiency Ratio Reconciliation
MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES Efficiency Ratio Reconciliation For the Quarter Ended December 31, September 30, June 30, March 31, December 31, (in thousands) 2017 2017 2017 2017 2016 Noninterest expense - GAAP $ 36,192 $ 48,364 $ 37,644 $ 30,798 $ 34,090
Slide 16: Tangible Common Equity to Tangible Assets Ratio and Tangible Book Value Per Share
MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES Tangible Common Equity to Tangible Assets Ratio and Tangible Book Value Per Share As of December 31, September 30, June 30, March 31, December 31, (dollars in thousands, except per share data) 2017 2017 2017 2017 2016 Shareh
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