Midland States Bancorp, Inc. · NASDAQ:MSBI
Midland States Bancorp — Q3 2017 Earnings Presentation
15 slides from Midland States Bancorp's earnings presentation, Oct 26, 2017
Slide 1: 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 express management’s current expectations, forecasts of future events or long-term goals, and may be based upon beliefs, expectations a
Slide 2: Overview of 3Q17 and Recent Developments
Overview of 3Q17 and Recent Developments 3 Enhancing Business Mix Alpine Acquisition 3Q17 Earnings Announced on October 16, 2017 Leading market share in Rockford, IL MSA $1.3 billion in total assets $1.0 billion wealth management business Centrue and Alpine acquisitions focused on core community ban
Slide 3: Net Interest Income/Margin
Net interest income increased 25% from 2Q17, primarily due to the full quarter impact of Centrue Net interest margin, excluding accretion income, declined 6 bps, due to full quarter impact of Centrue’s lower yielding assets Average rate on new and renewed loans increased 48 bps to 4.72% in 3Q17 Net
Slide 4: Non-Interest Income
Non-Interest Income 5 Fee generating businesses accounted for 30% of total revenue in 3Q17 Fee income increased 13.1% from 2Q17 due to full quarter impact of Centrue Strong growth in deposit service charges and interchange revenue Non-Interest Income (in millions) $14.9 $30.5 $16.3 $13.6 $15.4 3Q 20
Slide 5: Wealth Management
Wealth Management group offers Trust and Estate services, Investment Management, Financial Planning and Employer Sponsored Retirement Plans Surpassed $2 billion in assets under administration Total revenue increased 2% from the prior quarter Year-over-year organic growth in assets under administrati
Slide 6: Commercial FHA
Commercial FHA origination and servicing business for multifamily and healthcare facilities Long-term replacement reserve deposits for maintenance/capex of properties and escrow deposits are low-cost sources of funds Annual revenue expected to be $18-$20 million (excluding MSR impairment) Average de
Slide 7: Non-Interest Expense and Operating Efficiency
Non-Interest Expense and Operating Efficiency 8 Efficiency Ratio1 was 69.0% in 3Q17 vs. 66.5% in 2Q17 Integration and acquisition related expenses $8.3 million in 3Q17 $7.5 million in 2Q17 3Q17 expenses include $3.6 million loss on MSRs held-for-sale Excluding these charges, noninterest expense incr
Slide 8: Loan Portfolio
Loan Portfolio Total Loans 9 Total loans declined $26 million during 3Q17 Elevated payoffs in commercial portfolio largely from companies or properties that were sold, as well as lower rated credits exiting the bank Continued growth in residential real estate, consumer and construction portfolios Lo
Slide 9: Total Deposits
Total Deposits Total Deposits 10 Average community banking deposits trended higher throughout 3Q17 Repositioning of non-core funding sources as brokered CDs replaced with lower-cost FHLB advances $108 million fluctuation in end-of-period servicing deposits Total deposits declined $219 million in 3Q1
Slide 10: Asset Quality
Asset Quality NCO / Average Loans 11 Non-performing loans increased due to downgrade of one commercial real estate loan Net charge-offs totaled $0.1 million in 3Q17, or 1 bp of average loans Provision for loan losses of $1.5 million in 3Q17 ALL + credit marks/total loans of 0.99% at September 30, 20
Slide 11: Outlook
Outlook Accretive acquisitions continue to drive shareholder value Significant increase in scale and deeper presence throughout Illinois Recurring revenue of wealth management becoming larger percentage of revenue mix Expanded base of low-cost deposits Midland positioned to be a higher performing ba
Slide 12: Outlook
Outlook + Accretive acquisitions continue to drive shareholder value + Significant increase in scale and deeper presence throughout Illinois Recurring revenue of wealth management becoming larger percentage of revenue mix + Expanded base of low-cost deposits + Midland positioned to be a higher perfo
Slide 13: Adjusted Earnings Reconciliation
14 (in thousands, except per share data) Adjusted Earnings Reconciliation Income before income taxes - GAAP $ 2,316 $ 4,916 $ 11,473 $ 19,910 $ 12,153 Adjustments to other income: Gain on sales of investment securities, net 98 55 67 14,387 39 Gain (loss) on sale of other assets 45 (91) (58) - - Tota
Slide 14: Tangible Common Equity to Tangible Assets Ratio and Tangible Book Value Per Share
15 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 $ 450,689 $ 451,952 $ 334,333 $ 321,770 $ 321,749 Adjustments: Preferred stock (3,015) (3,
Slide 15: Reconciliations of Non-GAAP Financial Measures
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES ‘Tangible Common Equly to Tangible Assets Ratlo and Tangible Book Value Per Share ‘Sepiember 30, Fane 30, Marchi, December 31, September 30, Shareholder’ Equity to Tangible Common Equity Total sharebollen’ ety GAAP S406 S$ asigs2 SASS Sms Acjosment: Pre
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