Midland States Bancorp, Inc. · NASDAQ:MSBI
Midland States Bancorp — Q1 2021 Earnings Presentation
25 slides from Midland States Bancorp's earnings presentation, Apr 22, 2021
Slide 1: Midland States Bancorp, Inc. First Quarter 2021 Earnings Call
1 Midland States Bancorp, Inc. NASDAQ: MSBI First Quarter 2021 Earnings Call
Slide 2: Forward-Looking Statements
2 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 - te rm goals may be based upon beliefs, expecta
Slide 3: Overview of 1Q21
3 Overview of 1Q21 3 Loan and Deposit Trends 1Q21 Earnings Announced Acquisition of ATG Trust Company • Total loan balances declined $192.5 million due to elevated payoffs/paydowns • Stable asset quality resulted in decline in provision for credit losses • Total deposits increased $239.5 million dri
Slide 4: Paycheck Protection Program Overview
4 Paycheck Protection Program Overview Paycheck Protection Program (as of 3/31/21) Loans Outstanding $211.6 million Round 1 $132.2 million Round 2 $79.3 million Total Fees Earned $13.7 million Fees Recognized in 1Q21 $2.1 million Remaining Fees to be Recognized $6.0 million Impact on 1Q21 Financials
Slide 5: Loan Deferral Overview
5 Loan Deferral Overview Total Loan Deferrals As of Sept. 30, 2020 As of Dec. 31, 2020 As of Mar. 31, 2021 Total Loans Deferred $279.3 million $209.1 million $219.1 million % of Total Loans 5.7% 4.1% 4.5% Deferrals by Industry (as of March 31, 2021) Hotels/Motels $117.4 54% Transit & Ground Passenge
Slide 6: Loan Portfolio
6 1Q 2021 4Q 2020 1Q 2020 Commercial loans and leases $ 1,977 $ 2,096 $ 1,439 Commercial real estate 1,494 1,526 1,507 Construction and land development 192 173 208 Residential real estate 399 443 548 Consumer 849 866 673 Total Loans $4,911 $5,103 $4,376 Loan Portfolio Total Loans and Average Loan Y
Slide 7: Midland Equipment Finance Portfolio Overview
7 Midland Equipment Finance Portfolio Overview ($ in millions) Portfolio Characteristics (as of 3/31/21) Nationwide portfolio providing financing solutions to equipment vendors and end - users Total Outstanding Loans and Leases $858.6 million (17.5% of total loans) Number of Loans and Leases 6,904 A
Slide 8: Hotel/Motel Portfolio Overview
8 Hotel/Motel Portfolio Overview Deferrals by Chain Scale ($ in millions) Upper Midscale Chain $96.0 82% Upscale Chain $11.7 10% Midscale Chain $8.7 7% Other $1.0 1% Portfolio Characteristics (CRE & C&I) (as of 3/31/21) Total Outstanding $167.0 million (3.4% of total loans) Number of Loans 46 Averag
Slide 9: GreenSky Consumer Loan Portfolio Overview
9 GreenSky Consumer Loan Portfolio Overview Delinquency Rate (greater than 60 days) Portfolio Characteristics (as of 3/31/21) Total Outstanding $754.6 million (15.4% of total loans) Number of Loans 351,417 Average Loan Size $2,147 Average FICO Score 771 Total Deferred Loans (as of December 31, 2020)
Slide 10: Total Deposits and Cost of Deposits
10 1Q 2021 4Q 2020 1Q 2020 Noninterest - bearing demand $ 1,522 $ 1,470 $ 1,053 Interest - bearing: Checking 1,601 1,569 1,425 Money market 819 786 850 Savings 653 598 534 Time 719 656 766 Brokered time 25 23 23 Total Deposits $5,341 $5,101 $4,651 Total Deposits Total Deposits and Cost of Deposits •
Slide 11: Net Interest Income/Margin
11 $2.2 $1.8 $2.1 $1.6 $1.2 $46.7 $49.0 $50.0 $53.5 $51.9 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 NII Accretion Income 0.16% 0.12% 0.14% 0.10% 0.08% 3.48% 3.32% 3.33% 3.47% 3.45% 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 NIM Accretion Income • Net interest income decreased 3.1% from the prior quarter
Slide 12: Wealth Management
12 $5.68 $5.70 $5.56 $5.87 $5.93 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 $2,968 $3,254 $3,261 $3,481 $3,560 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 • During 1Q21, assets under administration increased $79.7 million, primarily due to market performance • Wealth Management revenue increased 1.1% from
Slide 13: Noninterest Income
13 Noninterest Income • Noninterest income increased 3.3% from prior quarter • Impairment on commercial MSRs impacted noninterest income by $1.3 million and $2.3 million in 1Q21 and 4Q20, respectively • Excluding the impact of the impairment of commercial MSRs, noninterest income decreased primarily
Slide 14: Noninterest Expense and Operating Efficiency
14 Noninterest Expense and Operating Efficiency • Efficiency Ratio (1) was 56.9% in 1Q21 vs. 58.6% in 4Q20 • Adjustments to non - interest expense: • Excluding these adjustments, noninterest expense decreased primarily due to: » Lower salaries and benefits expense resulting from branch network and f
Slide 15: Asset Quality
15 Asset Quality NCO / Average Loans • Nonperforming loans declined $1.2 million due to resolution of long - term problem loans • NPLs/total loans increased to 1.08% from 1.06% at the end of the prior quarter due to the decline in total loan balances • Net charge - offs of $1.7 million, or 0.14% of
Slide 16: Changes in Allowance for Credit Losses
16 Changes in Allowance for Credit Losses ACL 12/31/20 ACL 3/31/21 ($ in thousands) Specific Reserves Portfolio Changes Economic Factors ▪ Changes to specific reserves ▪ New loans ▪ Changes in credit quality including risk downgrades and deferrals ▪ Changes in allocations to COVID - 19 impacted segm
Slide 17: ACL by Portfolio
17 ACL by Portfolio Portfolio Total Loans at 3/31/21 ACL % of Total Loans Total Loans at 12/31/20 ACL % of Total Loans Commercial $ 808,262 $ 8,214 1.02% $ 937,382 $ 8,537 0.90% Warehouse Lines 205,115 - 0.00% 273,298 - 0.00% Commercial Other 766,632 9,125 1.19% 748,193 11,314 1.51% Equipment Financ
Slide 18: Outlook
18 Outlook • Improving economic conditions and stronger financial performance among borrowers impacted by the pandemic should lead to continued reductions in deferrals over next two quarters and relatively stable ACL/total loans • Growing loan pipeline should lead to stronger loan production and loa
Slide 19: Appendix
APPENDIX Midland [=]
Slide 20: Commercial Loans and Leases by Industry
20 Commercial Loans and Leases by Industry 20 RE / Rental & Leasing 19.5% All Others 12.3% Finance and Insurance 8.9% Assisted Living 8.1% Manufacturing 7.7% Construction - General 7.4% Accommodation & Food Svcs 6.9% Retail Trade 6.1% Ag., Forestry, & Fishing 5.0% General Freight Trucking 4.6% Trans
Slide 21: Commercial Real Estate Portfolio by Collateral Type
21 Commercial Real Estate Portfolio by Collateral Type 21 Assisted Living 15.3% Retail 15.1% All Others 9.7% Multi - Family 9.4% Hotel/Motel 9.3% Industrial / Warehouse 9.1% Office 7.1% Residential 1 - 4 Family 5.1% Farmland 4.2% C - Store / Gas Station 3.7% Mixed Use / Other 2.9% Medical Building 2
Slide 22: Capital and Liquidity Overview
22 Capital and Liquidity Overview Capital Ratios (as of 3/31/21) Liquidity Sources (as of 3/31/21) 6.67% 8.39% 7.79% 9.62% 13.73% 11.15% 9.03% 11.15% 12.18% 0.00% 5.00% 10.00% 15.00% TCE/TA Tier 1 Common Tier 1 Leverage Tier 1 RBC Total RBC Consolidated Bank Level ($ in millions) Cash and Cash Equiv
Slide 23: Adjusted Earnings Reconciliation
23 Adjusted Earnings Reconciliation (dollars in thousands, except per share data) Income before income taxes - GAAP $ 24,040 $ 10,746 $ 3,270 $ 15,993 $ 2,005 Adjustments to noninterest income: Gain on sales of investment securities, net - - 1,721 - - Other 75 3 (17) 11 (13) Total adjustments to non
Slide 24: Efficiency Ratio Reconciliation
24 Efficiency Ratio Reconciliation (dollars in thousands) Noninterest expense - GAAP $ 39,079 $ 47,048 $ 53,901 $ 41,395 $ 41,666 Loss on mortgage servicing rights held for sale - (617) (188) (391) (496) Loss on repurchase of subordinated debt - - - - (193) Impairment related to facilities optimizat
Slide 25: Tangible Common Equity to Tangible Assets Ratio and Tangible Book Value Per Share
25 Tangible Common Equity to Tangible Assets Ratio and Tangible Book Value Per Share (dollars in thousands, except per share data) Shareholders' Equity to Tangible Common Equity Total shareholders' equity—GAAP $ 635,467 $ 621,391 $ 621,880 $ 633,589 $ 631,160 Adjustments: Goodwill (161,904) (161,904
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