Midland States Bancorp, Inc. · NASDAQ:MSBI
Midland States Bancorp — Q3 2018 Earnings Presentation
15 slides from Midland States Bancorp's earnings presentation, 2018
Slide 1: Midland States Bancorp, Inc. Third Quarter 2018 Earnings Call
Midland States Bancorp, Inc. NASDAQ: MSBI Third Quarter 2018 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 3Q18
Overview of 3Q18 Net income of $8.5 million, or $0.35 diluted EPS 3Q18 Earnings • Integration and acquisition expenses of $9.6 million • Adjusted earnings1 of $0.64 per diluted share Key Operating Trends • Loan growth driven by portfolios providing higher risk-adjusted yields • Relatively stable net
Slide 4: Loan Portfolio
Loan Portfolio • Total loan growth of $60.5 million or 5.9% annualized • Strongest growth in commercial loans and leases, and consumer lending • Equipment loan and lease financings increased $45.9 million, or 17.3%, from June 30, 2018 with YTD growth of $105.7 million, or 51.4% • Remixing of loan po
Slide 5: Total Deposits
Total Deposits • Total deposits decreased $16.7 million to $4.14 billion • Decline in deposits attributable to expected attrition in Alpine deposit base following system conversion and focus on managing deposit costs • $23.4 million increase in interest-bearing checking accounts Deposit Mix Total De
Slide 6: Wealth Management
Wealth Management • Total Wealth Management revenue increased 2.8% from the prior quarter • Year-over-year organic growth in assets under administration was $135.7 million, or 6.8%, excluding Alpine acquisition Assets Under Administration Wealth Management Revenue (in millions) $3,189 $3,218 (in mil
Slide 7: Net Interest Income/Margin
Net Interest Income/Margin • Net interest income and margin decreased due to lower accretion income • Excluding the impact of accretion income, net interest margin declined 2 bps • Expected scheduled accretion income following finalization of purchase accounting for Alpine: $2.0-$2.5 million in 4Q
Slide 8: Noninterest Income
Noninterest Income • Noninterest income increased 15.3% from prior quarter • Commercial FHA revenue returned to more normalized level ($3.1 million) • Decline in residential mortgage banking revenue reflects lower demand • Wealth management remains largest contributor to noninterest income Nonintere
Slide 9: Noninterest Expense and Operating Efficiency
Noninterest Expense and Operating Efficiency Noninterest Expense and Efficiency Ratio1 • Efficiency Ratio1 was 63.0% in (Noninterest expense in millions) 3Q18 vs. 67.8% in 2Q18 • Integration and acquisition $49.5 $50.3 related expenses $48.4 $46.5 $9.6 million in 3Q18 $2.2 $9.8 $2.0 million in 2
Slide 10: Asset Quality
Asset Quality • Increase in nonperforming loans primarily attributable to the downgrade of two commercial loans and one commercial real estate loan • Continued low level of charge-offs • Provision for loan losses of $2.1 million in 3Q18 • ALLL/total loans of 0.47% and credit marks/total loans of 0.5
Slide 11: Outlook
Outlook • Realization of additional operating leverage expected to drive higher level of profitability in 2019 • Continued discipline in balance sheet growth to manage liquidity and protect net interest margin • Loan production will remain focused on areas with most attractive risk- adjusted yields
Slide 12: Appendix
APPENDIX
Slide 13: Adjusted Earnings Reconciliation
MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES Adjusted Earnings Reconciliation For the Quarter Ended September 30, June 30, March 31, December 31, September 30, (dollars in thousands, except per share data) 2018 2018 2018 2017 2017 Income before income taxes - GAAP $ 10
Slide 14: Efficiency Ratio Reconciliation
MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (continued) Efficiency Ratio Reconciliation For the Quarter Ended September 30, June 30, March 31, December 31, September 30, (dollars in thousands) 2018 2018 2018 2017 2017 Noninterest expense - GAAP $ 50,317 $ 46,452 $ 49,
Slide 15: Tangible Common Equity and Tangible Book Value Per Share
MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (continue d) Tangible Common Equity to Tangible Asse ts Ratio and Tangible Book Value Pe r Share As of Se pte mbe r 30, June 30, March 31, De ce mbe r 31, Se pte mbe r 30, (dollars in thousands, except per share data) 2018 2
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