Midland States Bancorp, Inc. · NASDAQ:MSBI
Midland States Bancorp — Q3 2021 Earnings Presentation
25 slides from Midland States Bancorp's earnings presentation, 2021
Slide 1: Third Quarter 2021 Earnings Call
Midland States Bancorp, Inc. NASDAQ: MSBI Third Quarter 2021 Earnings Call 1
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 expressing management’s current expectations, forecasts of future events or long-term goals may be based upon beliefs, expectations and a
Slide 3: Overview of 3Q21
Overview of 3Q21 • Net income of $19.5 million, or $0.86 diluted EPS 3Q21 Earnings • 3Q21 results included a $3.0 million commercial MSR impairment • Adjusted pre-tax, pre-provision earnings(1) of $28.4 million, up from $27.0 million in prior quarter • Total loans increased 8.2% annualized, excludin
Slide 4: Paycheck Protection Program Overview
Paycheck Protection Program Overview Paycheck Protection Program Paycheck Protection Program (as of 9/30/21) Loan Forgiveness Loans Outstanding $82.4 million As of 6/30/21 As of 9/30/21 Round 1 $12.4 million Loans Submitted to SBA $263.8 million $313.9 million Round 2 $70.0 million Loans Forgiven by
Slide 5: Loan Deferral Overview
Loan Deferral Overview Total Loan Deferrals Deferral Type (as of September 30, 2021) As of As of As of Mar. 31, 2021 Jun. 30, 2021 Sep. 30, 2021 Full Payment Deferral $3.2 million Total Loans Deferred $219.1 million $107.3 million $34.3 million Deferred Loans Making $31.1 million % of Total Loans 4.
Slide 6: Loan Portfolio
Loan Portfolio • Total loans increased $79.7 million from prior quarter to $4.92 billion • Increased commercial and CRE loan production, higher end of period balances on commercial FHA warehouse credit lines, and growth in consumer portfolio offset lower PPP loans and continued runoff in residential
Slide 7: Midland Equipment Finance Portfolio Overview
Midland Equipment Finance Portfolio Overview Portfolio Characteristics Total Deferred (as of 9/30/21) Loans and Leases Nationwide portfolio providing financing solutions As of As of As of to equipment vendors and end-users 3/31/21 6/30/21 9/30/21 Total Outstanding $899.1 million Loans and Leases (18
Slide 8: Hotel/Motel Portfolio Overview
Hotel/Motel Portfolio Overview Portfolio Characteristics (CRE & C&I) (as of 9/30/21) Total Outstanding $177.1 million (3.6% of total loans) Number of Loans 69 Average Loan Size $2.6 million Largest Loan $11.2 million Average LTV 56% Total Deferred Loans as of 6/30/21 $39.4 million (21.8% of portfoli
Slide 9: GreenSky Consumer Loan Portfolio Overview
GreenSky Consumer Loan Portfolio Overview Portfolio Characteristics Prime Credit (as of 9/30/21) Average FICO score of 772 $834.3 million Total Outstanding (17.0% of total loans) No losses to MSBI in 10 year history of portfolio Number of Loans 389,705 Average Loan Size $2,141 Credit Enhancement
Slide 10: Total Deposits
Total Deposits • Total deposits increased $405.0 million, or 7.8% from prior quarter, to $5.60 billion • Increase in deposits largely attributable to increase in commercial FHA servicing deposits and other commercial deposits • $184 million of CDs maturing in 4Q21 with a weighted average rate of 1.6
Slide 11: Net Interest Income/Margin
Net Interest Income/Margin • Net interest income increased 2.6% from the prior quarter due primarily to an increase in net interest margin • Net interest margin, excluding accretion income, increased 7 bps from prior quarter due primarily to a reduction in the cost of funds • Excess liquidity expect
Slide 12: Wealth Management
Wealth Management • During 3Q21, assets under administration decreased $19.4 million, primarily due to market performance • Wealth Management revenue increased 9.9% from prior quarter, primarily due to full quarter contribution of ATG Trust Company Assets Under Administration Wealth Management Reven
Slide 13: Noninterest Income
Noninterest Income • Noninterest income decreased 13.1% from prior quarter • Impairment on commercial MSRs impacted noninterest income by $3.0 million and $1.1 million in 3Q21 and 2Q21, respectively • Excluding the impact of the impairment of commercial MSRs, noninterest income decreased 2.1% primar
Slide 14: Noninterest Expense and Operating Efficiency
Noninterest Expense and Operating Efficiency Noninterest Expense and Efficiency Ratio (1) • Efficiency Ratio (1) was 58.8% in 3Q21 vs. 60.2% in 2Q21 (Noninterest expense in millions) • Adjustments to non-interest expense: $60.0 64.0% ($ in millions) 3Q21 2Q21 $55.0 $53.9 63.0% Integration and ($0.1)
Slide 15: Asset Quality
Asset Quality • Nonperforming loans decreased $6.7 million due to upgrades, disposition of certain loans, and minimal new inflow into nonperforming category • Net charge-offs of $3.0 million, or 0.25% of average loans • $1.5 million specific reserve charged-off on one of the three hotel loans put in
Slide 16: Changes in Allowance for Credit Losses
Changes in Allowance for Credit Losses ($ in thousands) Specific Portfolio Economic Reserves Changes Factors Changes to specific reserves New loans Changes to macro- economic variables Changes in credit quality including and forecasts risk downgrades Changes to other and deferrals economic
Slide 17: ACL by Portfolio
ACL by Portfolio ($ in thousands) Total Loans at % of Total Loans at % of Portfolio ACL ACL 9/30/21 Total Loans 6/30/21 Total Loans Commercial $ 799,189 $ 6,360 0.80% $ 719,642 $ 5,825 0.81% Warehouse Lines 180,248 - 0.00% 129,607 - 0.00% Commercial Other 668,146 8,231 1.23% 704,438 9,024 1.28% Equi
Slide 18: Outlook
Outlook • GreenSky relationship to gradually wind down over next two years Loan originations expected to continue through mid-2022 and keep balances relatively stable After loan originations end, GreenSky portfolio expected to decline by $400-$450 million over the following year Runoff expecte
Slide 19: Appendix
APPENDIX Midland [=] States Bancorp, Inc.
Slide 20: Commercial Loans and Leases by Industry
Commercial Loans and Leases by Industry Industries as a percentage of Commercial, Other Services Wholesale Trade CRE and Equipment Finance Loans and Leases Health Care as of 9/30/21 2.8% 2.6% 2.8% General Freight Trucking RE / Rental & Leasing 4.2% 20.5% Trans. / Ground Passenger 4.7% Ag., Forestry,
Slide 21: Commercial Real Estate Portfolio by Collateral Type
Commercial Real Estate Portfolio by Collateral Type Collateral type as a percentage of the All Others Commercial Real Estate and Construction Industrial / Warehouse 8.5% Portfolio as of 9/30/21 8.9% Office 6.3% Residential 1-4 Family 4.3% Hotel/Motel 9.4% Farmland 3.9% C-Store / Gas Station 3.9% Mix
Slide 22: Capital and Liquidity Overview
Capital and Liquidity Overview Capital Ratios Liquidity Sources (as of 9/30/21) (as of 9/30/21) 15.00% ($ in millions) 13.10% Cash and Cash Equivalents $ 662.6 Unpledged Securities 291.6 12.03% FHLB Committed Liquidity 730.0 11.17% 11.17% FRB Discount Window Availability 53.5 9.73% Primary Liquidity
Slide 23: Adjusted Earnings Reconciliation
MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) Adjusted Earnings Reconciliation For the Quarter Ended September 30, June 30, March 31, December 31, September 30, (dollars in thousands, except per share data) 2021 2021 2021 2020 2020 Income before income taxes
Slide 24: Efficiency Ratio Reconciliation
MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued) Efficiency Ratio Reconciliation For the Quarter Ended September 30, June 30, March 31, December 31, September 30, (dollars in thousands) 2021 2021 2021 2020 2020 Noninterest expense - GAAP $ 41,292 $
Slide 25: Tangible Common Equity and Tangible Book Value Reconciliation
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 September 30, June 30, March 31, December 31, September 30, (dollars in thousands, except per share data) 2021 2
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