Midland States Bancorp, Inc. · NASDAQ:MSBI
Midland States Bancorp — Q1 2022 Earnings Presentation
21 slides from Midland States Bancorp's earnings presentation, Apr 28, 2022
Slide 1: Midland States Bancorp, Inc. First Quarter 2022 Earnings Call
1 Midland States Bancorp, Inc. NASDAQ: MSBI First Quarter 2022 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 1Q22
3 Overview of 1Q22 3 Strong Expense Management 1Q22 Earnings • Efficiency Ratio (1) of 55.7% • Adjusted noninterest expense (1) consistent with prior quarter • More productive commercial banking teams driving strong loan growth without materially impacting expense levels Significant Expansion in Net
Slide 4: Loan Portfolio
4 Loan Portfolio Total Loans and Average Loan Yield • Total loans increased $315.2 million from prior quarter to $5.54 billion • Growth in CRE loans, equipment finance, conventional commercial loans, and consumer loans offset lower end - of - period balances on commercial FHA warehouse credit lines,
Slide 5: Total Deposits
5 Total Deposits Total Deposits and Cost of Deposits • Total deposits decreased $53.1 million from prior quarter to $6.06 billion • Decrease in deposits primarily attributable to fluctuations in end - of - period balances of commercial FHA servicing deposits • Decrease in noninterest - bearing depos
Slide 6: Net Interest Income/Margin
6 • Net interest income increased 4.7% from the prior quarter due primarily to higher average loan balances and an increase in net interest margin • Net interest margin, excluding accretion income, increased 26 bps from prior quarter due primarily to the redeployment of excess liquidity into the loa
Slide 7: Wealth Management
7 • During 1Q22, assets under administration decreased $173.3 million, primarily due to market performance • Wealth Management revenue was consistent with prior quarter, as seasonal tax preparation fees offset the decrease in AUA Wealth Management Wealth Management Revenue Assets Under Administratio
Slide 8: Noninterest Income
8 Noninterest Income • Noninterest income decreased 30.7% from prior quarter, which was positively impacted by a number of one - time items • Impairment on commercial MSRs impacted noninterest income by $0.4 million and $2.1 million in 1Q22 and 4Q21, respectively • Excluding the impact of the one -
Slide 9: Noninterest Expense and Operating Efficiency
9 Noninterest Expense and Operating Efficiency • Efficiency Ratio (1) was 55.7% in 1Q22 vs. 52.6% in 4Q21 • Adjustments to non - interest expense: • Excluding these adjustments, noninterest expense was consistent with the prior quarter • Operating expense run - rate expected to be $41.0 - $42.0 mill
Slide 10: Asset Quality
10 Asset Quality NCO / Average Loans • Nonperforming loans increased $10.3 million due to the addition of one commercial real estate loan where no loss is currently expected • Generally positive trends in the loan portfolio with continued upgrades of watch list loans • Net charge - offs of $2.3 mill
Slide 11: Changes in Allowance for Credit Losses
11 Changes in Allowance for Credit Losses ACL 12/31/21 ACL 3/31/22 ($ in thousands) Specific Reserves Portfolio Changes Economic Factors ▪ Changes to specific reserves ▪ New loans ▪ Changes in credit quality including risk ratings ▪ Changes in portfolio mix ▪ Aging of existing portfolio ▪ Other char
Slide 12: ACL by Portfolio
12 ACL by Portfolio Portfolio Total Loans at 3/31/22 ACL % of Total Loans Total Loans at 12/31/21 ACL % of Total Loans Commercial $ 796,498 $ 5,078 0.64% $ 770,670 $ 5,783 0.75% Warehouse Lines 83,999 - 0.00% 91,927 - 0.00% Commercial Other 641,628 7,543 1.18% 679,518 8,592 1.26% Equipment Finance 5
Slide 13: Outlook
13 Outlook • Loan pipeline remains very healthy and should support continued strong loan growth • Continued loan growth and asset sensitive balance sheet expected to drive further expansion in net interest margin as interest rates increase • Closing of FNBC branch acquisition in 2Q22 will provide ad
Slide 14: Appendix
APPENDIX Midland [=]
Slide 15: Paycheck Protection Program Overview
15 Paycheck Protection Program Overview Paycheck Protection Program (as of 3/31/22) Loans Outstanding $22.9 million Total Fees Earned $15.3 million Fees Recognized in 1Q22 $1.1 million Remaining Fees to be Recognized $0.9 million Impact on 1Q22 Financials At or for the Three Months Ended 3/31/22 Met
Slide 16: Commercial Loans and Leases by Industry
16 Commercial Loans and Leases by Industry RE / Rental & Leasing 25.0% Assisted Living 13.9% All Others 11.7% Construction - General 7.2% Manufacturing 6.5% Finance and Insurance 6.3% Accommodation & Food Svcs 5.8% Trans. / Ground Passenger 4.8% Ag., Forestry, & Fishing 4.0% General Freight Trucking
Slide 17: Commercial Real Estate Portfolio by Collateral Type
17 Commercial Real Estate Portfolio by Collateral Type Skilled Nursing 16.6% Retail 14.9% Multi - Family 12.7% Industrial / Warehouse 8.1% Assisted Living 7.9% Hotel/Motel 7.3% Office 6.4% All Others 5.1% Farmland 3.1% Residential 1 - 4 Family 2.8% C - Store / Gas Station 2.8% Special Purpose 2.8% M
Slide 18: Capital and Liquidity Overview
18 Capital and Liquidity Overview Capital Ratios (as of 3/31/22) Liquidity Sources (as of 3/31/22) 6.43% 7.80% 7.96% 8.82% 11.74% 9.99% 9.03% 9.99% 10.73% 0.00% 5.00% 10.00% 15.00% TCE/TA Tier 1 Common Tier 1 Leverage Tier 1 RBC Total RBC Consolidated Bank Level ($ in millions) Cash and Cash Equival
Slide 19: Adjusted Earnings Reconciliation
19 (dollars in thousands, except per share data) Income before income taxes - GAAP $ 27,389 $ 30,600 $ 25,431 $ 19,041 $ 24,040 Adjustments to noninterest income: Gain on sales of investment securities, net - - 160 377 - Gain on termination of hedged interest rate swap - 1,845 - - 314 Other income -
Slide 20: Adjusted Noninterest Expense and Income Reconciliation
20 (dollars in thousands) Noninterest expense - GAAP $ 40,884 $ 45,757 $ 41,292 $ 48,941 $ 39,079 Loss on mortgage servicing rights held for sale - - (79) (143) - FHLB advances prepayment fees - (4,859) - (3,669) (8) Integration and acquisition expenses (91) (171) (176) (3,771) (238) Adjusted nonint
Slide 21: Shareholders' Equity to Tangible Common Equity
21 (dollars in thousands, except per share data) Shareholders' Equity to Tangible Common Equity Total shareholders' equity—GAAP $ 644,986 $ 663,837 $ 657,844 $ 648,186 $ 635,467 Adjustments: Goodwill (161,904) (161,904) (161,904) (161,904) (161,904) Other intangible assets, net (22,976) (24,374) (26
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