Midland States Bancorp, Inc. · NASDAQ:MSBI
Midland States Bancorp — Q3 2024 Earnings Presentation
27 slides from Midland States Bancorp's earnings presentation, Oct 24, 2024
Slide 1: Midland States Bancorp, Inc. Third Quarter 2024 Earnings Presentation
1 Midland States Bancorp, Inc. NASDAQ: MSBI Third 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 September 30, 2024 $7.8 Billion Total Assets $5.7 Billion Total Loans $6.3 Billion Total Deposits $4.3 Billion Assets Under Administration YTD Adjusted ROAA(1): 0.67% YTD Adjusted Return on TCE(1): 8.61% TCE/TA: 7.03% YTD PTPP(1) ROAA: 1.46% Dividend Yi
Slide 4: Overview of 3Q24 Financial Performance
4 Overview of 3Q24 Financial Performance Continued Success in Balance Sheet Management Strategies Successfully Growing Community Bank Continued Investments in Talent and Technology 4 • Net income available to common shareholders of $16.2 million, or $0.74 diluted EPS • Pre-tax, pre-provision earning
Slide 5: Loan Portfolio
5 Loan Portfolio 5 • Total loans decreased $103.2 million from prior quarter to $5.75 billion • Decrease primarily driven by decline in equipment finance portfolio of $30.0 million and continued runoff of GreenSky portfolio of $63.0 million • Decrease in non-core portfolios partially offset by new l
Slide 6: Loan Segments
6 Loan Segments 6 • Total loans in our Community Bank increased $45 million from prior quarter to $3.18 billion • Loans in St. Louis region increased $25 million or 12% annualized in 3Q24 • Focused on core, in-market loan relationships • Continuing to add talent in faster growing markets to drive qu
Slide 7: Total Deposits
7 Total Deposits 7 • Total deposits increased $138.8 million from end of prior quarter, primarily due to increases in brokered time • Average balances of non-interest bearing demand deposits declined $57 million compared to prior quarter primarily due to seasonal outflows and lower average balances
Slide 8: Deposit Summary
8 Deposit Summary 8 Deposits by Channel (in millions, as of quarter-end) 3Q 2024 2Q 2024 3Q 2023 Retail $ 2,695 $ 2,742 $ 2,756 Commercial 1,219 1,217 1,231 Public Funds 574 569 615 Wealth & Trust 332 299 318 Servicing 959 932 1,020 Brokered Deposits 391 239 228 Other 87 120 237 Total Deposits $ 6,2
Slide 9: Investment Portfolio
9 3.5% 68.9% 7.1% 5.8% 7.3% 7.4% US GSE & US Agency MBS - agency MBS - non agency State & Muni Corporate Other Investment Portfolio As of September 30, 2024 9 Fair Value of Investments by Type • All Investments are classified as Available for Sale • Average T/E Yield is 4.71% for 3Q24 • Average Dura
Slide 10: Net Interest Income/Margin
10 3.20% 3.21% 3.18% 3.12% 3.10% 3Q 2023 4Q 2023 1Q 2024 2Q 2024 3Q 2024 $58.6 $58.1 $55.9 $55.1 $55.0 3Q 2023 4Q 2023 1Q 2024 2Q 2024 3Q 2024 Net Interest Income/Margin 10 • Net interest income down slightly from prior quarter due to higher interest-bearing deposit rates and average short-term borr
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 September 30, 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 Com
Slide 12: Wealth Management
12 Wealth Management 12 • Assets under administration increased $273 million mainly due to $178 million in new assets and market performance • Wealth Management fees increased due to higher AUA and net new accounts • New technology that integrates Wealth Management data into mobile banking app that
Slide 13: Noninterest Income
13 $11.5 $20.5 $21.2 $17.7 $19.3 Wealth Management Interchange Service Charges on Deposits Residential Mortgage All Other 3Q 2023 4Q 2023 1Q 2024 2Q 2024 3Q 2024 Noninterest Income 13 • Noninterest income increased from prior quarter primarily due to higher Wealth Management revenue resulting from i
Slide 14: Noninterest Expense and Operating Efficiency
14 $42.0 $44.5 $44.9 $47.5 $46.7 55.8% 55.2% 58.0% 65.2% 62.8% Total Noninterest Expense Efficiency Ratio 3Q 2023 4Q 2023 1Q 2024 2Q 2024 3Q 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 from prior quarter • Net charge-offs to average loans was 0.78% driven by equipment finance and $6.2 million of charge offs in the Lending Point portfolio • General stability in asset quality resulted in lower provision for credit losses than prior
Slide 16: Changes in Allowance for Credit Losses
16 $92,183 $(1,120) $(4,320) $(938) $85,804 ACL June 30, 2024 Specific Reserves Portfolio Changes Economic Factors ACL September 30, 2024 Changes in Allowance for Credit Losses 16 ($ in thousands) ▪ Changes to specific reserves ▪ Changes in Loans ▪ Changes in Credit quality including risk rating ▪ C
Slide 17: ACL by Portfolio
17 ACL by Portfolio 17 ($ in thousands) September 30, 2024 June 30, 2024 Portfolio Loans ACL % of Total Loans Loans ACL % of Total Loans Commercial $ 797,318 $ 9,263 1.16 % $ 829,888 $ 8,821 1.06 % Commercial Other 559,354 14,844 2.65 % 570,979 15,426 2.70 % Equipment Finance Loans 442,552 11,236 2.
Slide 18: 2024 Outlook and Priorities
18 2024 Outlook and Priorities 18 • Well positioned with increased levels of capital, liquidity, and reserves • Continuing to focus on improving credit quality through core relationship lending and tightened credit • Prudent risk management will remain top priority while economic uncertainty remains
Slide 19: Appendix
APPENDIX Midland [=]
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 $4.71 billion as of September 30, 2024 ($s in millions) RE/Rental & Leasing $1,708.9 36.3% All Others $569.1 12.1% Skilled Nursing $394.2 8.4% Construction - General $293.2 6.2% Man
Slide 21: Commercial Real Estate Portfolio by Collateral Type
21 Commercial Real Estate Portfolio by Collateral Type 21 CRE Concentration (as of September 30, 2024) CRE as a % of Total Loans 51.0% CRE as a % of Total Risk-Based Capital (1) 267.2% Notes: (1) Represents non-owner occupied CRE loans only Collateral type as a percentage of the Commercial Real Esta
Slide 22: Capital Ratios and Strategy
22 Capital Ratios and Strategy 22 • Capital initiatives increased CET1 to 9.00% from 7.77% at December 31, 2022 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 • Capit
Slide 23: Reconciliations of Non-GAAP Financial Measures: Tangible Book Value Per Share
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: Reconciliations of Non-GAAP Financial Measures: Adjusted Earnings (Annual)
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: Reconciliations of Non-GAAP Financial Measures: Adjusted Earnings (Quarterly)
2525 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) 2024 2024 2024 2023 2023 Income before income
Slide 26: Reconciliations of Non-GAAP Financial Measures: Efficiency Ratio
2626 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, 2024 2024 2024 2023 2023 (dollars in thousands) Noninterest expense - GAAP $ 46,7
Slide 27: Reconciliations of Non-GAAP Financial Measures: TCE to Tangible Assets
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 September 30, June 30, March 31, December 31, September 30, (dollars in thousands, except per share data) 2
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