Midland States Bancorp, Inc. · NASDAQ:MSBI
Midland States Bancorp — Q1 2024 Earnings Presentation
27 slides from Midland States Bancorp's earnings presentation, Apr 25, 2024
Slide 1: First Quarter 2024 Earnings Presentation
1 Midland States Bancorp, Inc. NASDAQ: MSBI First Quarter 2024 Earnings Presentation
Slide 2: Forward-Looking Statements
22 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 an
Slide 3: Company Snapshot
33 Company Snapshot Financial Highlights as of March 31, 2024 $7.8 Billion Total Assets $6.0 Billion Total Loans $6.3 Billion Total Deposits $3.9 Billion Assets Under Administration YTD Adjusted ROAA(1): 0.72% YTD Adjusted Return on TCE(1): 9.34% TCE/TA: 6.58% YTD PTPP(1) ROAA: 1.67% Dividend Yield:
Slide 4: Overview of 1Q24
4 Overview of 1Q24 Solid Financial Performance Continued Success in Balance Sheet Management Strategies Positive Trends Across Key Metrics Prudent Increase in ACL and Decline in Net Charge-Offs 4 • Net income available to common shareholders of $11.7 million, or $0.53 diluted EPS • Pre-tax, pre-prov
Slide 5: Loan Portfolio
5 Loan Portfolio 5 • Total loans decreased $172.6 million from prior quarter to $5.96 billion • Decrease primarily driven by decline in equipment finance portfolio of $54.5 million, continued runoff of GreenSky portfolio of $77.7 million, and lower C&I line utilization • Decrease in non-core portfol
Slide 6: Total Deposits
6 Total Deposits 6 • Total deposits increased $14.5 million from end of prior quarter, primarily due to increases in noninterest-bearing demand and brokered time, partially offset by seasonal outflows of servicing and public funds deposits • Noninterest-bearing deposits increased due to new and expa
Slide 7: Deposit Summary as of March 31, 2024
7 Deposit Summary as of March 31, 2024 7 Deposits by Channel (in millions, as of quarter-end) 1Q 2024 4Q 2023 1Q 2023 Retail $ 2,768 $ 2,758 $ 2,829 Commercial 1,388 1,392 1,286 Public Funds 516 569 578 Wealth & Trust 324 322 327 Servicing 901 952 1,009 Brokered Deposits 309 210 141 Other 118 107 25
Slide 8: Investment Portfolio
8 6.5% 65.5% 8.6% 5.8% 3.3% 10.3% US GSE & US Agency MBS - agency MBS - non agency State & Muni CLOs Corporate Investment Portfolio As of March 31, 2024 8 Fair Value of Investments by Type • All Investments are classified as Available for Sale • Average T/E Yield is 4.36% for 1Q24 • Average Duration
Slide 9: Liquidity Overview
9 Liquidity Overview 9 Liquidity Sources (in millions) March 31, 2024 December 31, 2023 Cash and Cash Equivalents $ 167.3 $ 135.1 Unpledged Securities 506.2 346.8 FHLB Committed Liquidity 1,167.4 936.0 FRB Discount Window Availability 613.3 699.9 Total Estimated Liquidity $ 2,454.1 $ 2,117.8 Conditi
Slide 10: Net Interest Income/Margin
10 3.39% 3.23% 3.20% 3.21% 3.18% 1Q 2023 2Q 2023 3Q 2023 4Q 2023 1Q 2024 $60.5 $58.8 $58.6 $58.1 $55.9 1Q 2023 2Q 2023 3Q 2023 4Q 2023 1Q 2024 Net Interest Income/Margin 10 • Net interest income down slightly from prior quarter due to lower average earning assets • Net interest margin decreased 3bp
Slide 11: Loans & Securities - Repricing and Maturity
11 Loans & Securities - Repricing and Maturity 11 Total Loans and Leases (net of unearned income)(1) (in millions) As of March 31, 2024 Repricing Term Rate Structure 3 mos or less 3-12 mos 1-3 years 3-5 years 5-10 years 10-15 years Over 15 years Total Floating Rate Adjustable Rate Fixed Rate Commerc
Slide 12: Wealth Management
12 Wealth Management 12 • Assets under administration increased mainly due to $97 million of new accounts and positive market performance • Wealth Management fees increased from prior quarter due to increases in estate and tax planning fees from new business development efforts • New technology plan
Slide 13: Noninterest Income
13 $15.8 $18.8 $11.5 $20.5 $21.2 Wealth Management Interchange Service Charges on Deposits Residential Mortgage All Other 1Q 2023 2Q 2023 3Q 2023 4Q 2023 1Q 2024 Noninterest Income 13 • Noninterest income increased from prior quarter primarily due to higher wealth management revenue • 1Q24 nonintere
Slide 14: Noninterest Expense and Operating Efficiency
14 $44.5 $42.9 $42.0 $44.5 $44.9 57.6% 55.0% 55.8% 55.2% 58.0% Total Noninterest Expense Efficiency Ratio 1Q 2023 2Q 2023 3Q 2023 4Q 2023 1Q 2024 Noninterest Expense and Operating Efficiency 14 Noninterest Expense and Efficiency Ratio (1) (Noninterest expense in millions) • Efficiency Ratio (1) was
Slide 15: Asset Quality
15 Asset Quality 15 • Nonperforming loans increased due to placement of 4 loans on non-accrual, totaling $47.4 million, 3 of which were multi-family construction or multi-family projects • Past due loans and substandard loans declined during the first quarter • Net charge-offs to average loans was 0
Slide 16: Changes in Allowance for Credit Losses
16 $68,502 $9,459 $982 $(886) $78,057 ACL December 31, 2023 Specific Reserves Portfolio Changes Economic Factors ACL March 31, 2024 Changes in Allowance for Credit Losses 16 ($ in thousands) ▪ Changes to specific reserves ▪ Changes in Loans ▪ Changes in Credit quality including risk rating ▪ Changes
Slide 17: ACL by Portfolio
17 ACL by Portfolio 17 ($ in thousands) March 31, 2024 December 31, 2023 Portfolio Loans ACL % of Total Loans Loans ACL % of Total Loans Commercial $ 813,963 $ 9,135 1.12 % $ 825,938 $ 8,897 1.08 % Commercial Other 601,704 12,194 2.03 % 656,592 12,950 1.97 % Equipment Finance Loans 494,068 11,806 2.
Slide 18: 2024 Outlook and Priorities
18 2024 Outlook and Priorities 18 • Well positioned with increased levels of capital, liquidity, and reserves • Prudent risk management will remain top priority while economic uncertainty remains with business development efforts focused on adding new commercial and retail deposit relationships thro
Slide 19: Appendix
APPENDIX Midland [=] States Bancorp, ne.
Slide 20: Commercial Loans and Leases by Industry
2020 Industries as a percentage of Commercial, CRE and Equipment Finance Loans and Leases with outstanding balances of $4.74 billion as of 3/31/2024 ($s in millions) RE/Rental & Leasing $1,673.6 35.3% All Others $567.5 12.0% Skilled Nursing $417.0 8.8% Construction - General $314.3 6.6% Manufacturin
Slide 21: Commercial Real Estate Portfolio by Collateral Type
21 Commercial Real Estate Portfolio by Collateral Type 21 CRE Concentration (as of March 31, 2024) CRE as a % of Total Loans 48.2% CRE as a % of Total Risk-Based Capital (1) 263.7% Notes: (1) Represents non-owner occupied CRE loans only Collateral type as a percentage of the Commercial Real Estate a
Slide 22: Capital Ratios and Strategy
22 Capital Ratios and Strategy 22 • Capital initiatives increased CET1 to 8.60% from 7.77% at 12/31/22 with limited buybacks below TBV • Internal capital generated from strong profitability and slower balance sheet growth expected to raise TCE ratio to 7.00%-7.75% by the end of 2024 • Capital action
Slide 23: Reconciliations of Non-GAAP Financial Measures
2323 MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) Tangible Book Value Per Share For the Year Ended (dollars in thousands, except per share data) 2018 2019 2020 2021 2022 2023 Shareholders' Equity to Tangible Common Equity Total shareholders' equity—GAAP $ 6
Slide 24: Adjusted Earnings Reconciliation
2424 MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) Adjusted Earnings Reconciliation For The Year Ended (dollars in thousands, except per share data) 2018 2019 2020 2021 2022 2023 Income before income taxes - GAAP $ 50,805 $ 72,471 $ 32,014 $ 99,112 $ 129,838
Slide 25: Adjusted Earnings Reconciliation (Quarterly)
2525 MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) Adjusted Earnings Reconciliation For The Quarter Ended March 31, December 31, September 30, June 30, March 31, (dollars in thousands, except per share data) 2024 2023 2023 2023 2023 Income before income taxe
Slide 26: Efficiency Ratio Reconciliation
2626 MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued) Efficiency Ratio Reconciliation For the Quarter Ended March 31, December 31, September 30, June 30, March 31, 2024 2023 2023 2023 2023 (dollars in thousands) Noninterest expense - GAAP $ 44,867 $
Slide 27: Tangible Common Equity and Tangible Book Value Reconciliation
2727 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 March 31, December 31, September 30, June 30, March 31, (dollars in thousands, except per share data) 2024
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