Midland States Bancorp, Inc. · NASDAQ:MSBI
Midland States Bancorp — Q4 2022 Earnings Presentation
21 slides from Midland States Bancorp's earnings presentation, 2023
Slide 1: Fourth Quarter 2022 Earnings Call
Midland States Bancorp, Inc. NASDAQ: MSBI Fourth 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 4Q22
Overview of 4Q22 • Net income available to common shareholders of $29.7 million, or $1.30 diluted EPS • Results include $17.5 million gain on the termination of forward starting swaps, Strong Financial $3.3 million loss on commercial mortgage servicing rights held for sale and $3.5 million impairmen
Slide 4: Loan Portfolio
Loan Portfolio • Total loans increased $108.0 million from prior quarter to $6.31 billion • Growth primarily driven by increases in commercial and construction loans • Equipment finance balances increased $73.6 million, or 7% from end of prior quarter Loan Portfolio Mix Total Loans and Average Loan
Slide 5: Total Deposits
Total Deposits • Small decline in total deposits • Decline in noninterest-bearing deposits attributable to lower period-end balances of commercial FHA servicing deposits and commercial depositors moving excess liquidity into interest-bearing accounts • Selectively raising rates on deposits in order
Slide 6: Net Interest Income/Margin
Net Interest Income/Margin • Net interest income down slightly from prior quarter as higher average balance of interest-earning assets was offset by an increase in cost of interest-bearing liabilities • Net interest margin decreased 13 bps from prior quarter as the increase in cost of deposits excee
Slide 7: Wealth Management
Wealth Management • During 4Q22, assets under administration increased $150.4 million, primarily due to increased business generation and improved market performance • Increase in AUA resulted in slight increase in Wealth Management revenue compared to the prior quarter Assets Under Administration W
Slide 8: Noninterest Income
Noninterest Income • Noninterest income positively impacted by $17.5 million gain on termination of forward starting interest rate swaps • Excluding gain, most fee generating areas were relatively consistent with prior quarter • Planned sale of commercial MSR portfolio with transaction expected to c
Slide 9: Noninterest Expense and Operating Efficiency
Noninterest Expense and Operating Efficiency (1) • Efficiency Ratio (1) was 58.3% in 4Q22 Noninterest Expense and Efficiency Ratio vs. 54.3% in 3Q22 (Noninterest expense in millions) • Adjustments to non-interest expense: ($ in millions) 4Q 2022 3Q 2022 $49.9 Loss on mortgage servicing rights held $
Slide 10: Asset Quality
Asset Quality • Nonperforming loans increased $2.5 million primarily due to one commercial real estate loan • Delinquencies in consumer portfolio remain low • Net charge-offs to average loans was 0.03% • Provision for credit losses on loans of $3.0 million primarily related to the growth in total lo
Slide 11: Changes in Allowance for Credit Losses
Changes in Allowance for Credit Losses ($ in thousands) Specific Portfolio Economic Reserves Changes Factors $517 ▪ Change to macro- economic variables and forecasts ▪ Changes to other $1,733 economic qualitative factors $61,051 $162 ▪ New Loans $58,639 ▪ Changes to ▪ Changes in Credit specific rese
Slide 12: ACL by Portfolio
ACL by Portfolio ($ in thousands) December 31, 2022 September 30, 2022 % of Total % of Total Portfolio Loans ACL Loans ACL Loans Loans Commercial $ 786,877 $ 4,706 0.60 % $ 852,930 $ 5,745 0.67 % Warehouse Lines 25,029 — —% 51,309 — —% Commercial Other 727,697 9,933 1.36 % 683,353 8,620 1.26 % Equip
Slide 13: 2023 Outlook and Priorities
2023 Outlook and Priorities • Continue generating strong financial performance and higher level of profitability while maintaining conservative approach to new loan production • Loan growth will continue to be driven by a more productive commercial banking team, greater exposure to higher growth mar
Slide 14: Appendix
APPENDIX Midland [=] States Bancorp, Inc.
Slide 15: Commercial Loans and Leases by Industry
Commercial Loans and Leases by Industry Other Services Health Care Retail Trade Wholesale Trade $102 $77 Industries as a percentage of Commercial, ($s in millions) $168 $101 2.1% 1.6% CRE and Equipment Finance Loans and Leases 3.5% 2.1% with outstanding balances of $4.76 billion as of 12/31/2022 Gen
Slide 16: Commercial Real Estate Portfolio by Collateral Type
Commercial Real Estate Portfolio by Collateral Type ($s in millions) Mixed Use/Other Restaurant Medical Building Raw Land $56 $35 Collateral type as a percentage of the $108 $18 C-Store/Gas Station 2.1% 1.3% Commercial Real Estate and Construction 3.9% 0.6% $67 Portfolio with outstanding balances of
Slide 17: Capital Ratios and Strategy
Capital Ratios and Strategy Capital Ratios Capital Strategy (as of 12/31/2022) • Strengthened capital ratios with issuance of $115 million of non-cumulative preferred 12.38% stock in August 2022 11.51% 10.71% 10.71% ◦ Included in Tier 1 Regulatory Capital 9.90% 10.21% 9.43% ◦ 7.75% with reset at 5 y
Slide 18: Liquidity Overview
Liquidity Overview Liquidity Sources (as of 12/31/2022) ($ in millions) Cash and Cash Equivalents $ 150.3 Unpledged Securities 209.2 FHLB Committed Liquidity 997.4 FRB Discount Window Availability 12.2 Total Estimated Liquidity $ 1,369.1 Conditional Funding Based on Market Conditions Additional Cred
Slide 19: 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) 2022 2022 2022 2022 2021 Income before income taxes
Slide 20: 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, 2022 2022 2022 2022 2021 (dollars in thousands) Noninterest expense - GAAP $ 49,943 $ 4
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 December 31, September 30, June 30, March 31, December 31, (dollars in thousands, except per share data) 2022 20
Midland States Bancorp — Q4 2022 Earnings Presentation on 6ix