Midland States Bancorp, Inc. · NASDAQ:MSBI
Midland States Bancorp — Q3 2022 Earnings Presentation
21 slides from Midland States Bancorp's earnings presentation, 2022
Slide 1: Third Quarter 2022 Earnings Call
Midland States Bancorp, Inc. NASDAQ: MSBI Third 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 3Q22
Overview of 3Q22 • Net income of $23.5 million, or $1.04 diluted EPS, up from $0.97 in prior quarter Higher Earnings and • Pre-tax, pre-provision earnings(1) of $36.4 million, up from $35.9 million in prior quarter Improved Returns • ROAA of 1.22% and ROATCE(1) of 20.20%, both increased from prior q
Slide 4: Loan Portfolio
Loan Portfolio • Total loans increased $402.9 million from prior quarter to $6.20 billion • Growth in all portfolios with the exception of SBA PPP loans • Largest increases came in commercial and CRE loans, which increased at 36% annualized and 22% annualized, respectively • Equipment finance balanc
Slide 5: Total Deposits
Total Deposits • Total deposits increased $210.8 million from prior quarter to $6.40 billion • Increase driven by higher balances of noninterest-bearing and lower-cost interest-bearing deposits • Continued improvement in deposit mix with noninterest-bearing deposits increasing to 31.7% of total depo
Slide 6: Net Interest Income/Margin
Net Interest Income/Margin • Net interest income increased 4.4% from the prior quarter due primarily to higher average loan balances • Net interest margin decreased 2 bps from prior quarter as increase in cost of deposits exceeded the increase in the average yield on earning assets • Planned redempt
Slide 7: Wealth Management
Wealth Management • During 3Q22, assets under administration decreased $152.7 million, primarily due to market performance • Wealth Management revenue relatively consistent with prior quarter Assets Under Administration Wealth Management Revenue (in millions) (in millions) $4,217 $7.18 $7.18 $7.14 $
Slide 8: Noninterest Income
Noninterest Income • Noninterest income increased 8.3% from prior quarter, primarily due to impairment on commercial MSRs that negatively impacted noninterest income in 2Q22 • Most fee generating areas were relatively consistent with prior quarter • Commercial MSR portfolio in the process of being s
Slide 9: Noninterest Expense and Operating Efficiency
Noninterest Expense and Operating Efficiency Noninterest Expense and Efficiency Ratio (1) • Efficiency Ratio (1) was 54.3% in 3Q22 vs. 53.1% in 2Q22 (Noninterest expense in millions) • Adjustments to non-interest expense: $50.0 70.0% $45.8 ($ in millions) 3Q22 2Q22 $45.0 $43.5 Integration and acquis
Slide 10: Asset Quality
Asset Quality • Nonperforming loans decreased $10.0 million due to a combination of payoffs, note sale, and a charge-off on a previously reserved loan relationship • Generally positive trends in the loan portfolio with continued upgrades of watch list loans • Delinquencies in consumer portfolio rema
Slide 11: Changes in Allowance for Credit Losses
Changes in Allowance for Credit Losses ($ in thousands) Specific Portfolio Economic Reserves Changes Factors Changes to macro- economic variables and forecasts Changes to other economic qualitative factors Changes to specific New loans reserves Changes in credit quality including risk rati
Slide 12: ACL by Portfolio
ACL by Portfolio ($ in thousands) September 30, 2022 June 30, 2022 % of % of Portfolio Loans ACL Loans ACL Total Loans Total Loans Commercial $ 852,930 $ 5,745 0.67% $ 747,782 $ 5,412 0.72% Warehouse Lines 51,309 - 0.00% 23,872 - 0.00% Commercial Other 683,353 8,620 1.26% 643,477 7,336 1.14% Equipme
Slide 13: Outlook
Outlook • Strengthened capital ratios will support continued balance sheet growth • Loan pipeline remains strong, but loan growth expected to moderate as higher rates and uncertain economic conditions have a greater impact on loan demand • Continued loan growth, higher net interest margin, and impro
Slide 14: Appendix
APPENDIX Midland [=] States Bancorp, Inc.
Slide 15: Commercial Loans and Leases by Industry
Commercial Loans and Leases by Industry Industries as a percentage of Commercial, Retail Trade Wholesale Trade Other Services Health Care CRE and Equipment Finance Loans and Leases ($s in millions) $170 $100 $100 $77 with outstanding balances Ag., Forestry, & Fishing 3.6% 2.1% 2.1% 1.6% of $4.69 bil
Slide 16: Commercial Real Estate Portfolio by Collateral Type
Commercial Real Estate Portfolio by Collateral Type Collateral type as a percentage of the Assisted Living All Others Commercial Real Estate and Construction $185 $176 Hotel/Motel ($s in millions) Portfolio with outstanding balances of 6.9% 6.5% $160 $2.69 billion as of 9/30/22 5.9% Industrial / War
Slide 17: Capital Ratios and Strategy
Capital Ratios and Strategy Capital Strategy Capital Ratios (as of 9/30/22) 15.00% Strengthened capital ratios with issuance of 12.79% $115 million of non-cumulative preferred stock in August 2022 11.19% 10.43% 10.43% 10.05% Included as Tier 1 Regulatory Capital 10.00% 9.40%9.75% 7.75% with re
Slide 18: Liquidity Overview
Liquidity Overview Liquidity Sources (as of 9/30/22) ($ in millions) Cash and Cash Equivalents $ 313.2 Unpledged Securities 153.5 FHLB Committed Liquidity 1,148.9 FRB Discount Window Availability 13.5 Total Estimated Liquidity $ 1,629.1 Conditional Funding Based on Market Conditions Additional Credi
Slide 19: Adjusted Earnings Reconciliation
MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) Adjusted Earnings Reconciliation For the Quarter Ended September 30, June 30, March 31, December 31, September 30, (dollars in thousands, except per share data) 2022 2022 2022 2021 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 September 30, June 30, March 31, December 31, September 30, (dollars in thousands) 2022 2022 2022 2021 2021 Noninterest expense - GAAP $ 43,496 $
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 September 30, June 30, March 31, December 31, September 30, (dollars in thousands, except per share data) 2022 2
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