Midland States Bancorp, Inc. · NASDAQ:MSBI
Midland States Bancorp — Q3 2016 Earnings Presentation
17 slides from Midland States Bancorp's earnings presentation, 2016
Slide 1: Midland States Bancorp, Inc. Third Quarter 2016 Earnings Call
Midland States Bancorp, Inc. NASDAQ: MSBI Third Quarter 2016 Earnings Call
Slide 2: Forward-Looking Statements
Forward-Looking Statements. This presentation contains 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, by their nature, are subject to assumptions, r
Slide 3: Third Quarter 2016 Summary
Third Quarter 2016 Summary Strong Earnings Net income of $8.1 million or $0.51 per diluted share Strong Loan Growth Annualized average loan growth of 17.7% in the quarter Strong Growth in Double digit annualized increases in commercial real estate, residential real estate, Multiple Portfolios consum
Slide 4: Business Unit Review - Love Funding
Business Unit Review - Love Funding • Commercial FHA origination and servicing business focused on multifamily and healthcare facilities • Long-term replacement reserve deposits for maintenance/capex of properties and escrow deposits are low-cost sources of funds • Average deposits related to servic
Slide 5: Business Unit Review - Residential Mortgage
Business Unit Review - Residential Mortgage • Residential mortgage loan origination and servicing • Record quarter of loan production with $181 million in originations • Due to higher production, residential mortgage banking revenue increased to $5.0 million Loan Production, Sales and Net Gain Purch
Slide 6: Business Unit Review - Heartland Business Credit
Business Unit Review - Heartland Business Credit • Equipment leasing sourced from a network of equipment manufacturers and brokers • Strong growth with $22 million in originations • Attractive yields - average rate on lease finance portfolio was 5.62% in the quarter • 40% year-over-year lease financ
Slide 7: Business Unit Review – Wealth Management
Business Unit Review – Wealth Management • Wealth Management group offers Trust and Estate services, Investment Management, Financial Planning and Employer Sponsored Retirement Plans • Assets under administration increased by $37 million or 3% from the end of 2Q16 • Expect to close on Sterling Trust
Slide 8: Net Interest Income/Margin
Net Interest Income/Margin • Net interest income declined 2.6% from 2Q16 primarily due to a $2.3 million decrease in accretion income • Net interest margin, excluding accretion income, increased by 14 basis points, primarily due to a favorable shift in mix of earnings assets Net Interest Income NIM
Slide 9: Non-Interest Income
Non-Interest Income • Non-interest income up 7% in 3Q16 vs. 2Q16 • Strong quarter in residential mortgage banking and wealth management offset a decline in revenue in commercial FHA Non-Interest Income (in millions) $14.9 $14.5 $14.0 $12.8 $12.6 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 Commercial FHA
Slide 10: Non-Interest Expense and Operating Efficiency
Non-Interest Expense and Operating Efficiency Non-Interest Expense and Efficiency Ratio1 • Efficiency Ratio1 declined to (Non-Interest expense in millions) 65% in 3Q16 vs. 67% in 2Q16 • Improvement in efficiency ratio primarily driven by a 7% $31 reduction in operating $29 expenses compared to 2Q16
Slide 11: Loan Portfolio
Loan Portfolio • Total loans at quarter-end increased by $152 million in 3Q16 vs. 2Q16 • Approximately $73 million of the increase was related to advances on a government guaranteed warehouse line of credit to a customer that originates commercial FHA loans • Excluding advances on this line, total l
Slide 12: Total Deposits
Total Deposits • Total deposits increased 3% vs. 2Q16 and 5% vs. 3Q15 • Increase in non-interest bearing and NOW deposits, which enabled the run off of higher cost time and brokered deposits • $82 million of the increase in non-interest bearing deposits is temporary in nature from loan origination a
Slide 13: Asset Quality
Asset Quality • Non-performing loans increased by $11.5 million in 3Q16 vs. 2Q16, primarily related to one CRE credit that was modified to a TDR in the quarter • Net charge-offs totaled $0.6 million in 3Q16 Non-performing Loans / Total Loans NCO / Average Loans (Total Loans as of quarter-end) 1.57%
Slide 14: Outlook
Outlook • Economic conditions in our markets remain healthy • Expecting low- to mid-teen loan growth for the full year • New loan products are contributing to strong pipeline • Continuing to make expense control a high priority • Early termination of FDIC loss-sharing agreements • Expect to see cont
Slide 15: Appendix
APPENDIX
Slide 16: Reconciliations of Non-GAAP Financial Measures
MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES For the Quarter Ended September 30, June 30, March 31, December 31, September 30, (in thousands, except per share data) 2016 2016 2016 2015 2015 Adjusted Earnings Reconciliation Income before income taxes - GAAP $ 12,147 $ 1
Slide 17: Reconciliations of Non-GAAP Financial Measures: Tangible Common Equity
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 September 30, June 30, March 31, December 31, September 30, (in thousands, except per share data) 2016 2016 2016 2015 2015 Shareholders'
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