Midland States Bancorp, Inc. (Nasdaq: MSBI) (the “Company”) today reported net income available to common shareholders of $11.7 million, or $0.53 per diluted share, for the first quarter of 2024, compared to $18.5 million, or $0.84 per diluted share, for the fourth quarter of 2023. This also compares to net income available to common shareholders of $19.5 million, or $0.86 per diluted share, for the first quarter of 2023.

Provision expense was $14.0 million in the first quarter of 2024 compared to $7.0 million and $3.1 million in the fourth and first quarters of 2023, respectively. The increase in provision expense was the result of a specific reserve of $8.0 million on a multi-family construction project.

Financial results for the fourth quarter of 2023 included a $1.1 million gain on the sale of shares of VISA B stock, offset by $2.9 million of losses on the sale of investment securities. Results for the first quarter of 2023 included $0.6 million of losses on the sale of investment securities. There were no adjustments to the financial results for the first quarter of 2024.

Excluding these transactions, adjusted earnings available to common shareholders were $19.8 million and $20.0 million, or $0.89 and $0.88 per diluted share, for the fourth and first quarters of 2023, respectively.

Jeffrey G. Ludwig, President and Chief Executive Officer of the Company, said, “Our first quarter reflects strong pre-tax, pre-provision results and our ongoing ability to deliver increased fee income and strong expense control. While our pre-tax pre-provision results generate solid profitability we did increase our reserves to reflect an increase in nonperforming loans. Our continued success in executing on our balance sheet management strategies resulted in the improvement in our loan-to-deposit ratio, tangible book value per share, and all of our capital ratios improved in the first quarter, even after the additional provision for credit losses.

“We continue to focus on high quality commercial relationships and our conservative approach to new loan production, including through the intentional runoff of equipment finance and consumer loans. We also continue to have success in growing our wealth management business, which contributed to the increase we had in non-interest income in the first quarter.

“As always, we continue to operate with a long-term perspective, and while we will maintain disciplined expense control, we will continue to invest in areas such as banking and wealth talent and technology that we believe will further strengthen our franchise and enhance our ability to continue creating long-term value for our shareholders,” said Mr. Ludwig.

Balance Sheet Highlights

Total assets were $7.83 billion at March 31, 2024, compared to $7.87 billion at December 31, 2023, and $7.93 billion at March 31, 2023. At March 31, 2024, portfolio loans were $5.96 billion, compared to $6.13 billion at December 31, 2023, and $6.35 billion at March 31, 2023.

Loans

During the first quarter of 2024, outstanding loans declined by $172.6 million, or 2.8%, from December 31, 2023, as the Company continued to originate loans in a more selective and deliberate approach to balance liquidity and funding costs. Increases in commercial FHA warehouse lines and construction and land development loans of $8.0 million and $21.5 million, respectively, were offset by decreases in all other loan categories. Equipment finance loan and lease balances decreased $54.5 million during the first quarter of 2024 as the Company continued to reduce its concentration of this product within the overall loan portfolio. Consumer loans decreased $98.1 million due to loan payoffs and a cessation in loans originated through GreenSky. Our Greensky-originated loan balances decreased $77.7 million during the first quarter to $606.0 million at March 31, 2024. In addition, as previously disclosed, during the fourth quarter of 2023, the Company ceased originating loans through LendingPoint. As of March 31, 2024, the Company had $112.7 million in loans that were originated through LendingPoint, which will continue to be serviced by LendingPoint.

  As of
  March 31,   December 31,   September 30,   June 30,   March 31,
(in thousands) 2024   2023   2023   2023   2023
Loan Portfolio                  
Commercial loans $ 913,564   $ 951,387   $ 943,761   $ 962,756   $ 937,920
Equipment finance loans   494,068     531,143     578,931     614,633     632,205
Equipment finance leases   455,879     473,350     485,460     500,485     510,029
Commercial FHA warehouse lines   8,035         48,547     30,522     10,275
Total commercial loans and leases   1,871,546     1,955,880     2,056,699     2,108,396     2,090,429
Commercial real estate   2,397,113     2,406,845     2,412,164     2,443,995     2,448,158
Construction and land development   474,128     452,593     416,801     366,631     326,836
Residential real estate   378,583     380,583     375,211     371,486     369,910
Consumer   837,092     935,178     1,020,008     1,076,836     1,118,938
Total loans $ 5,958,462   $ 6,131,079   $ 6,280,883   $ 6,367,344   $ 6,354,271
                             

Loan Quality

Overall, credit quality metrics declined this quarter compared to the fourth quarter of 2023. Non-performing loans increased $48.6 million to $105.0 million at March 31, 2024, compared to $56.4 million as of December 31, 2023. Four loans totaling $47.4 million account for the increase. Of these, three loans totaling $40.8 million are multi-family construction or multi-family projects. Loans 30-89 days past due decreased $23.9 million to $58.9 million as of March 31, 2024, compared to prior quarter end, as loans totaling $25.1 million were transferred to nonperforming status.

At March 31, 2023, loans 30-89 days past due totaled $30.9 million, non-performing loans were $50.7 million, and non-performing assets as a percentage of total assets were 0.74%.

  As of and for the Three Months Ended
(in thousands) March 31,   December 31,   September 30,   June 30,   March 31,
2024   2023   2023   2023   2023
Asset Quality                  
Loans 30-89 days past due $ 58,854     $ 82,778     $ 46,608     $ 44,161     $ 30,895  
Nonperforming loans   104,979       56,351       55,981       54,844       50,713  
Nonperforming assets   116,721       67,701       58,677       57,688       58,806  
Substandard loans   149,049       184,224       143,793       130,707       99,819  
Net charge-offs   4,445       5,117       3,449       2,996       2,119  
Loans 30-89 days past due to total loans   0.99 %     1.35 %     0.74 %     0.69 %     0.49 %
Nonperforming loans to total loans   1.76 %     0.92 %     0.89 %     0.86 %     0.80 %
Nonperforming assets to total assets   1.49 %     0.86 %     0.74 %     0.72 %     0.74 %
Allowance for credit losses to total loans   1.31 %     1.12 %     1.06 %     1.02 %     0.98 %
Allowance for credit losses to nonperforming loans   74.35 %     121.56 %     119.09 %     118.43 %     122.39 %
Net charge-offs to average loans   0.30 %     0.33 %     0.22 %     0.19 %     0.14 %
                                       

The Company continued to increase its allowance for credit losses on loans during the first quarter of 2024. Notably, the Company recorded a specific reserve of $8.0 million on one large construction and land development loan. The allowance totaled $78.1 million at March 31, 2024, compared to $68.5 million at December 31, 2023, and $62.1 million at March 31, 2023. The allowance as a percentage of portfolio loans was 1.31% at March 31, 2024, compared to 1.12% at December 31, 2023, and 0.98% at March 31, 2023.

Deposits

Total deposits were $6.32 billion at March 31, 2024, compared with $6.31 billion at December 31, 2023, representing an increase of $14.5 million, primarily due to increases in noninterest bearing demand deposits and brokered time deposits, which were partially offset by seasonal outflows of servicing and public fund deposits. Noninterest-bearing deposits increased $67.0 million to $1.21 billion at March 31, 2024, while interest-bearing deposits decreased $52.5 million to $5.11 billion at March 31, 2024. Brokered time deposits increased $93.7 million to offset seasonal outflows of the servicing and public fund deposits.

  As of
  March 31,   December 31,   September 30,   June 30,   March 31,
(in thousands) 2024   2023   2023   2023   2023
Deposit Portfolio                  
Noninterest-bearing demand $ 1,212,382   $ 1,145,395   $ 1,154,515   $ 1,162,909   $ 1,215,758
Interest-bearing:                  
Checking   2,394,163     2,511,840     2,572,224     2,499,693     2,502,827
Money market   1,128,463     1,135,629     1,090,962     1,226,470     1,263,813
Savings   555,552     559,267     582,359     624,005     636,832
Time   845,190     862,865     885,858     840,734     766,884
Brokered time   188,234     94,533     119,084     72,737     39,087
Total deposits $ 6,323,984   $ 6,309,529   $ 6,405,002   $ 6,426,548   $ 6,425,201
                             

Results of Operations Highlights

Net Interest Income and Margin

During the first quarter of 2024, net interest income, on a tax-equivalent basis, totaled $56.1 million, a decrease of $2.1 million, or 3.6%, compared to $58.3 million for the fourth quarter of 2023. The tax-equivalent net interest margin for the first quarter of 2024 was 3.18%, compared with 3.21% in the fourth quarter of 2023. Net interest income and net interest margin, on a tax-equivalent basis, were $60.7 million and 3.39%, respectively, in the first quarter of 2023. The declines in the net interest income and margin were largely attributable to increased market interest rates resulting in the cost of funding liabilities increasing at a faster rate than the yield on earning assets, as well as the impact of interest reversals on loans placed on non-accrual.

Average interest-earning assets for the first quarter of 2024 were $7.11 billion, compared to $7.20 billion for the fourth quarter of 2023. The yield decreased 2 basis points to 5.76% compared to the fourth quarter of 2023. Interest-earning assets averaged $7.26 billion for the first quarter of 2023.

Average loans were $6.01 billion for the first quarter of 2024, compared to $6.20 billion for the fourth quarter of 2023 and $6.32 billion for the first quarter of 2023. The yield on loans was 5.99% and 6.00% for the first quarter of 2024 and the fourth quarter of 2023, respectively.

Investment securities averaged $988.7 million for the first quarter of 2024, and yielded 4.36%, compared to an average balance and yield of $883.2 million and 4.16%, respectively, for the fourth quarter of 2023. The Company purchased additional higher-yielding investments resulting in the increased average balance and yield. Investment securities averaged $809.8 million for the first quarter of 2023.

Average interest-bearing deposits were $5.20 billion for the first quarter of 2024, compared to $5.30 billion for the fourth quarter of 2023, and $5.05 billion for the first quarter of 2023. Cost of interest-bearing deposits was 3.04% in the first quarter of 2024, which represented an 11 basis point increase from the fourth quarter of 2023. A competitive market, driven by rising interest rates and increased competition, contributed to the increase in deposit costs.

  For the Three Months Ended
  March 31,   December 31,   March 31,
(dollars in thousands)  2024     2023    2023 
Interest-earning assets Average Balance   Interest & Fees   Yield/Rate   Average Balance   Interest & Fees   Yield/Rate   Average Balance   Interest & Fees   Yield/Rate
Cash and cash equivalents $ 69,316   $ 951   5.52 %   $ 77,363   $ 1,054   5.41 %   $ 85,123   $ 980   4.67 %
Investment securities   988,716     10,708   4.36       883,153     9,257   4.16       809,848     5,995   3.00  
Loans   6,012,032     89,489   5.99       6,196,362     93,757   6.00       6,320,402     87,997   5.65  
Loans held for sale   3,405     55   6.56       4,429     81   7.26       1,506     16   4.41  
Nonmarketable equity securities   35,927     687   7.69       41,192     715   6.89       47,819     795   6.75  
Total interest-earning assets $ 7,109,396   $ 101,890   5.76 %   $ 7,202,499   $ 104,864   5.78 %   $ 7,264,698   $ 95,783   5.35 %
Noninterest-earning assets   671,671             695,293             610,811        
Total assets $ 7,781,067           $ 7,897,792           $ 7,875,509        
                                   
Interest-Bearing Liabilities                                  
Interest-bearing deposits $ 5,195,118   $ 39,214   3.04 %   $ 5,295,296   $ 39,156   2.93 %   $ 5,053,941   $ 26,405   2.12 %
Short-term borrowings   65,182     836   5.16       13,139     15   0.47       38,655     25   0.26  
FHLB advances & other borrowings   313,121     3,036   3.90       430,207     4,750   4.38       540,278     6,006   4.51  
Subordinated debt   93,583     1,280   5.50       93,512     1,281   5.43       99,812     1,370   5.57  
Trust preferred debentures   50,707     1,389   11.02       50,541     1,402   11.00       50,047     1,229   9.96  
Total interest-bearing liabilities $ 5,717,711   $ 45,755   3.22 %   $ 5,882,695   $ 46,604   3.14 %   $ 5,782,733   $ 35,035   2.46 %
Noninterest-bearing deposits   1,151,542             1,142,062             1,250,899        
Other noninterest-bearing liabilities   121,908             108,245             74,691        
Shareholders’ equity   789,906             764,790             767,186        
Total liabilities and shareholder’s equity $ 7,781,067           $ 7,897,792           $ 7,875,509        
                                   
Net Interest Margin     $ 56,135   3.18 %       $ 58,260   3.21 %       $ 60,748   3.39 %
                                   
Cost of Deposits         2.49 %           2.41 %           1.70 %
                                         

(1)   Interest income and average rates for tax-exempt loans and investment securities are presented on a tax-equivalent basis, assuming a federal income tax rate of 21%. Tax-equivalent adjustments totaled $0.2 million for each of the three months ended March 31, 2024, December 31, 2023 and March 31, 2023, respectively.

Noninterest Income

Noninterest income was $21.2 million for the first quarter of 2024, compared to $20.5 million for the fourth quarter of 2023. Noninterest income for the first quarter of 2024 included incremental servicing revenues of $3.7 million related to the Greensky portfolio. Noninterest income for the fourth quarter of 2023 included incremental servicing revenues of $2.2 million and $1.6 million related to our commercial FHA servicing portfolio and the Greensky portfolio, respectively. Also included was a $1.1 million one-time gain from the sale of Visa B stock, offset by $2.9 million of losses on the sale of investment securities. The first quarter of 2023 included $0.6 million of losses on the sale of investment securities. Excluding these transactions, noninterest income for the first quarter of 2024, the fourth quarter of 2023, and the first quarter of 2023 was $17.5 million, $18.5 million, and $16.4 million, respectively.

  For the Three Months Ended
  March 31,   December 31,   March 31,
(in thousands) 2024   2023   2023
Noninterest income          
Wealth management revenue $ 7,132   $ 6,604     $ 6,411  
Service charges on deposit accounts   3,116     3,246       2,745  
Interchange revenue   3,358     3,585       3,412  
Residential mortgage banking revenue   527     451       405  
Income on company-owned life insurance   1,801     1,753       876  
Loss on sales of investment securities, net       (2,894 )     (648 )
Other income   5,253     7,768       2,578  
Total noninterest income $ 21,187   $ 20,513     $ 15,779  
                     

Wealth management revenue totaled $7.1 million in the first quarter of 2024, an increase of $0.5 million, or 8.0%, as compared to the fourth quarter of 2023. Assets under administration increased to $3.89 billion at March 31, 2024 from $3.73 billion at December 31, 2023, primarily due to improved market performance, resulting in an increase in revenue. In addition, the first quarter fees included seasonal tax preparation fees. Assets under administration totaled $3.50 billion at March 31, 2023.

Noninterest Expense

Noninterest expense was $44.9 million in the first quarter of 2024, compared to $44.5 million in both the fourth quarter of 2023, and the first quarter of 2023. The efficiency ratio increased to 58.03% for the quarter ended March 31, 2024, compared to 55.22% for the quarter ended December 31, 2023, and 57.64% for the quarter ended March 31, 2023.

  For the Three Months Ended
  March 31,   December 31,   March 31,
(in thousands) 2024   2023   2023
Noninterest expense          
Salaries and employee benefits $ 24,102   $ 24,031   $ 24,243
Occupancy and equipment   4,142     3,934     4,443
Data processing   6,722     6,963     6,311
Professional services   2,255     2,072     1,760
Amortization of intangible assets   1,089     1,130     1,291
FDIC insurance   1,274     1,147     1,329
Other expense   5,283     5,211     5,105
Total noninterest expense $ 44,867   $ 44,488   $ 44,482
                 

Income Tax Expense

Income tax expense was $4.4 million for the first quarter of 2024, as compared to $6.4 million for the fourth quarter of 2023 and $6.9 million for the first quarter of 2023. The resulting effective tax rates were 23.9%, 23.7% and 24.0%, respectively.

Capital

At March 31, 2024, Midland States Bank and the Company exceeded all regulatory capital requirements under Basel III, and Midland States Bank met the qualifications to be a ‘‘well-capitalized’’ financial institution, as summarized in the following table:

  As of March 31, 2024
  Midland States Bank   Midland States Bancorp, Inc.   Minimum Regulatory Requirements(2)
Total capital to risk-weighted assets 12.77%   13.68%   10.50%
Tier 1 capital to risk-weighted assets 11.62%   11.16%   8.50%
Tier 1 leverage ratio 10.33%   9.92%   4.00%
Common equity Tier 1 capital 11.62%   8.60%   7.00%
Tangible common equity to tangible assets(1) N/A   6.58%   N/A
           

(1) A non-GAAP financial measure. Refer to page 15 for a reconciliation to the comparable GAAP financial measure.(2) Includes the capital conservation buffer of 2.5%.

The impact of rising interest rates on the Company’s investment portfolio and cash flow hedges resulted in an $81.4 million accumulated other comprehensive loss at March 31, 2024, which reduces tangible book value by $3.79 per share.

Stock Repurchase Program

As previously disclosed, on December 5, 2023, the Company’s board of directors authorized a new share repurchase program, pursuant to which the Company is authorized to repurchase up to $25.0 million of common stock through December 31, 2024. During the first quarter of 2024, the Company repurchased 73,781 shares of its common stock at a weighted average price of $26.31 under its stock repurchase program.

About Midland States Bancorp, Inc.

Midland States Bancorp, Inc. is a community-based financial holding company headquartered in Effingham, Illinois, and is the sole shareholder of Midland States Bank. As of March 31, 2024, the Company had total assets of approximately $7.83 billion, and its Wealth Management Group had assets under administration of approximately $3.89 billion. The Company provides a full range of commercial and consumer banking products and services and business equipment financing, merchant credit card services, trust and investment management, insurance and financial planning services. For additional information, visit https://www.midlandsb.com/ or https://www.linkedin.com/company/midland-states-bank.

Non-GAAP Financial Measures

Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with GAAP.

These non-GAAP financial measures include “Adjusted Earnings,” “Adjusted Earnings Available to Common Shareholders,” “Adjusted Diluted Earnings Per Common Share,” “Adjusted Return on Average Assets,” “Adjusted Return on Average Shareholders’ Equity,” “Adjusted Return on Average Tangible Common Equity,” “Adjusted Pre-Tax, Pre-Provision Earnings,” “Adjusted Pre-Tax, Pre-Provision Return on Average Assets,” “Efficiency Ratio,” “Tangible Common Equity to Tangible Assets,” “Tangible Book Value Per Share,” “Tangible Book Value Per Share excluding Accumulated Other Comprehensive Income,” and “Return on Average Tangible Common Equity.” The Company believes these non-GAAP financial measures provide both management and investors a more complete understanding of the Company’s funding profile and profitability. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures. Not all companies use the same calculation of these measures; therefore, the measures in this press release may not be comparable to other similarly titled measures as presented by other companies.

Forward-Looking Statements

Readers should note that in addition to the historical information contained herein, this press release includes "forward-looking statements" within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including but not limited to statements about the Company’s plans, objectives, future performance, goals and future earnings levels. These statements are subject to many risks and uncertainties, including changes in interest rates and other general economic, business and political conditions, the impact of inflation, continuing effects of the failures of Silicon Valley Bank and Signature Bank, increased deposit volatility and potential regulatory developments; changes in the financial markets; changes in business plans as circumstances warrant; risks relating to acquisitions; changes to U.S. tax laws, regulations and guidance; and other risks detailed from time to time in filings made by the Company with the Securities and Exchange Commission. Readers should note that the forward-looking statements included in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "will," "propose," "may," "plan," "seek," "expect," "intend," "estimate," "anticipate," "believe," "continue," or similar terminology. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

CONTACTS:Jeffrey G. Ludwig, President and CEO, at jludwig@midlandsb.com or (217) 342-7321Eric T. Lemke, Chief Financial Officer, at elemke@midlandsb.com or (217) 342-7321Douglas J. Tucker, SVP and Corporate Counsel, at dtucker@midlandsb.com or (217) 342-7321

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited)
           
  As of and for the Three Months Ended
  March 31,   December 31,   March 31,
(dollars in thousands, except per share data) 2024   2023   2023
Earnings Summary          
Net interest income $ 55,920     $ 58,077     $ 60,504  
Provision for credit losses   14,000       6,950       3,135  
Noninterest income   21,187       20,513       15,779  
Noninterest expense   44,867       44,488       44,482  
Income before income taxes   18,240       27,152       28,666  
Income taxes   4,355       6,441       6,894  
Net income   13,885       20,711       21,772  
Preferred dividends   2,228       2,228       2,228  
Net income available to common shareholders $ 11,657     $ 18,483     $ 19,544  
           
Diluted earnings per common share $ 0.53     $ 0.84     $ 0.86  
Weighted average common shares outstanding - diluted   21,787,691       21,822,328       22,501,970  
Return on average assets   0.72 %     1.04 %     1.12 %
Return on average shareholders' equity   7.07 %     10.74 %     11.51 %
Return on average tangible common equity(1)   9.34 %     15.41 %     16.70 %
Net interest margin   3.18 %     3.21 %     3.39 %
Efficiency ratio(1)   58.03 %     55.22 %     57.64 %
           
Adjusted Earnings Performance Summary(1)          
Adjusted earnings available to common shareholders $ 11,657     $ 19,793     $ 20,017  
Adjusted diluted earnings per common share $ 0.53     $ 0.89     $ 0.88  
Adjusted return on average assets   0.72 %     1.11 %     1.15 %
Adjusted return on average shareholders' equity   7.07 %     11.42 %     11.76 %
Adjusted return on average tangible common equity   9.34 %     16.51 %     17.11 %
Adjusted pre-tax, pre-provision earnings $ 32,240     $ 35,898     $ 32,449  
Adjusted pre-tax, pre-provision return on average assets   1.67 %     1.80 %     1.67 %
           
Market Data          
Book value per share at period end $ 31.67     $ 31.61     $ 30.08  
Tangible book value per share at period end(1) $ 23.44     $ 23.35     $ 21.87  
Tangible book value per share excluding accumulated other comprehensive income at period end(1) $ 27.23     $ 26.91     $ 25.39  
Market price at period end $ 25.13     $ 27.56     $ 21.42  
Common shares outstanding at period end   21,485,231       21,551,402       22,111,454  
           
Capital          
Total capital to risk-weighted assets   13.68 %     13.20 %     12.46 %
Tier 1 capital to risk-weighted assets   11.16 %     10.91 %     10.25 %
Tier 1 common capital to risk-weighted assets   8.60 %     8.40 %     7.84 %
Tier 1 leverage ratio   9.92 %     9.71 %     9.54 %
Tangible common equity to tangible assets(1)   6.58 %     6.55 %     6.24 %
           
Wealth Management          
Trust assets under administration $ 3,888,219     $ 3,733,355     $ 3,502,635  
                       

(1) Non-GAAP financial measures. Refer to pages 13 - 15 for a reconciliation to the comparable GAAP financial measures.

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                   
  As of
  March 31,   December 31,   September 30,   June 30,   March 31,
(in thousands) 2024   2023   2023   2023   2023
Assets                  
Cash and cash equivalents $ 167,316     $ 135,061     $ 132,132     $ 160,695     $ 138,310  
Investment securities   1,044,900       920,396       839,344       887,003       821,005  
Loans   5,958,462       6,131,079       6,280,883       6,367,344       6,354,271  
Allowance for credit losses on loans   (78,057 )     (68,502 )     (66,669 )     (64,950 )     (62,067 )
Total loans, net   5,880,405       6,062,577       6,214,214       6,302,394       6,292,204  
Loans held for sale   5,043       3,811       6,089       5,632       2,747  
Premises and equipment, net   81,831       82,814       82,741       81,006       80,582  
Other real estate owned   8,920       9,112       480       202       6,729  
Loan servicing rights, at lower of cost or fair value   19,577       20,253       20,933       21,611       1,117  
Commercial FHA mortgage loan servicing rights held for sale                           20,745  
Goodwill   161,904       161,904       161,904       161,904       161,904  
Other intangible assets, net   15,019       16,108       17,238       18,367       19,575  
Company-owned life insurance   205,286       203,485       201,750       152,210       151,319  
Other assets   241,608       251,347       292,460       243,697       233,937  
Total assets $ 7,831,809     $ 7,866,868     $ 7,969,285     $ 8,034,721     $ 7,930,174  
                   
Liabilities and Shareholders' Equity                  
Noninterest-bearing demand deposits $ 1,212,382     $ 1,145,395     $ 1,154,515     $ 1,162,909     $ 1,215,758  
Interest-bearing deposits   5,111,602       5,164,134       5,250,487       5,263,639       5,209,443  
Total deposits   6,323,984       6,309,529       6,405,002       6,426,548       6,425,201  
Short-term borrowings   214,446       34,865       17,998       21,783       31,173  
FHLB advances and other borrowings   255,000       476,000       538,000       575,000       482,000  
Subordinated debt   93,617       93,546       93,475       93,404       99,849  
Trust preferred debentures   50,790       50,616       50,457       50,296       50,135  
Other liabilities   102,966       110,459       106,743       90,869       66,173  
Total liabilities   7,040,803       7,075,015       7,211,675       7,257,900       7,154,531  
Total shareholders’ equity   791,006       791,853       757,610       776,821       775,643  
Total liabilities and shareholders’ equity $ 7,831,809     $ 7,866,868     $ 7,969,285     $ 8,034,721     $ 7,930,174  
                                       
MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
           
  For the Three Months Ended
  March 31,   December 31,   March 31,
(in thousands, except per share data) 2024   2023   2023
Net interest income:          
Interest income $ 101,675   $ 104,681     $ 95,539  
Interest expense   45,755     46,604       35,035  
Net interest income   55,920     58,077       60,504  
Provision for credit losses on loans   14,000     6,950       3,135  
Net interest income after provision for credit losses   41,920     51,127       57,369  
Noninterest income:          
Wealth management revenue   7,132     6,604       6,411  
Service charges on deposit accounts   3,116     3,246       2,745  
Interchange revenue   3,358     3,585       3,412  
Residential mortgage banking revenue   527     451       405  
Income on company-owned life insurance   1,801     1,753       876  
Loss on sales of investment securities, net       (2,894 )     (648 )
Other income   5,253     7,768       2,578  
Total noninterest income   21,187     20,513       15,779  
Noninterest expense:          
Salaries and employee benefits   24,102     24,031       24,243  
Occupancy and equipment   4,142     3,934       4,443  
Data processing   6,722     6,963       6,311  
Professional services   2,255     2,072       1,760  
Amortization of intangible assets   1,089     1,130       1,291  
FDIC insurance   1,274     1,147       1,329  
Other expense   5,283     5,211       5,105  
Total noninterest expense   44,867     44,488       44,482  
Income before income taxes   18,240     27,152       28,666  
Income taxes   4,355     6,441       6,894  
Net income   13,885     20,711       21,772  
Preferred stock dividends   2,228     2,228       2,228  
Net income available to common shareholders $ 11,657   $ 18,483     $ 19,544  
           
Basic earnings per common share $ 0.53   $ 0.84     $ 0.86  
Diluted earnings per common share $ 0.53   $ 0.84     $ 0.86  
                     
MIDLAND STATES BANCORP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited)
           
Adjusted Earnings Reconciliation
           
  For the Three Months Ended
  March 31,   December 31,   March 31,
(dollars in thousands, except per share data) 2024   2023   2023
Income before income taxes - GAAP $ 18,240     $ 27,152     $ 28,666  
Adjustments to noninterest income:          
Loss on sales of investment securities, net         2,894       648  
(Gain) on sale of Visa B shares         (1,098 )      
Total adjustments to noninterest income         1,796       648  
Adjusted earnings pre tax - non-GAAP   18,240       28,948       29,314  
Adjusted earnings tax   4,355       6,927       7,069  
Adjusted earnings - non-GAAP   13,885       22,021       22,245  
Preferred stock dividends   2,228       2,228       2,228  
Adjusted earnings available to common shareholders $ 11,657     $ 19,793     $ 20,017  
Adjusted diluted earnings per common share $ 0.53     $ 0.89     $ 0.88  
Adjusted return on average assets   0.72 %     1.11 %     1.15 %
Adjusted return on average shareholders' equity   7.07 %     11.42 %     11.76 %
Adjusted return on average tangible common equity   9.34 %     16.51 %     17.11 %
 
           
           
Adjusted Pre-Tax, Pre-Provision Earnings Reconciliation
           
  For the Three Months Ended
  March 31,   December 31,   March 31,
(dollars in thousands) 2024   2023   2023
Adjusted earnings pre tax - non-GAAP $ 18,240     $ 28,948     $ 29,314  
Provision for credit losses   14,000       6,950       3,135  
Adjusted pre-tax, pre-provision earnings - non-GAAP $ 32,240     $ 35,898     $ 32,449  
Adjusted pre-tax, pre-provision return on average assets   1.67 %     1.80 %     1.67 %
                       
MIDLAND STATES BANCORP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued)
           
Efficiency Ratio Reconciliation
           
  For the Three Months Ended
  March 31,   December 31,   March 31,
(dollars in thousands) 2024   2023   2023
Noninterest expense - GAAP $ 44,867     $ 44,488     $ 44,482  
           
Net interest income - GAAP $ 55,920     $ 58,077     $ 60,504  
Effect of tax-exempt income   215       183       244  
Adjusted net interest income   56,135       58,260       60,748  
           
Noninterest income - GAAP   21,187       20,513       15,779  
Loss on sales of investment securities, net         2,894       648  
(Gain) on sale of Visa B shares         (1,098 )      
Adjusted noninterest income   21,187       22,309       16,427  
           
Adjusted total revenue $ 77,322     $ 80,569     $ 77,175  
           
Efficiency ratio   58.03 %     55.22 %     57.64 %
           
Return on Average Tangible Common Equity (ROATCE)
           
  For the Three Months Ended
  March 31,   December 31,   March 31,
(dollars in thousands) 2024   2023   2023
Net income available to common shareholders $ 11,657     $ 18,483     $ 19,544  
           
Average total shareholders' equity—GAAP $ 789,906     $ 764,790     $ 767,186  
Adjustments:          
Preferred Stock   (110,548 )     (110,548 )     (110,548 )
Goodwill   (161,904 )     (161,904 )     (161,904 )
Other intangible assets, net   (15,525 )     (16,644 )     (20,184 )
Average tangible common equity $ 501,929     $ 475,694     $ 474,550  
ROATCE   9.34 %     15.41 %     16.70 %
                       
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   2023   2023   2023   2023
Shareholders' Equity to Tangible Common Equity                
Total shareholders' equity—GAAP $ 791,006     $ 791,853     $ 757,610     $ 776,821     $ 775,643  
Adjustments:                  
Preferred Stock   (110,548 )     (110,548 )     (110,548 )     (110,548 )     (110,548 )
Goodwill   (161,904 )     (161,904 )     (161,904 )     (161,904 )     (161,904 )
Other intangible assets, net   (15,019 )     (16,108 )     (17,238 )     (18,367 )     (19,575 )
Tangible common equity   503,535       503,293       467,920       486,002       483,616  
                   
Less: Accumulated other comprehensive loss (AOCI)   (81,419 )     (76,753 )     (101,181 )     (84,719 )     (77,797 )
Tangible common equity excluding AOCI $ 584,954     $ 580,046     $ 569,101     $ 570,721     $ 561,413  
                   
Total Assets to Tangible Assets:                  
Total assets—GAAP $ 7,831,809     $ 7,866,868     $ 7,969,285     $ 8,034,721     $ 7,930,174  
Adjustments:                  
Goodwill   (161,904 )     (161,904 )     (161,904 )     (161,904 )     (161,904 )
Other intangible assets, net   (15,019 )     (16,108 )     (17,238 )     (18,367 )     (19,575 )
Tangible assets $ 7,654,886     $ 7,688,856     $ 7,790,143     $ 7,854,450     $ 7,748,695  
                   
Common Shares Outstanding   21,485,231       21,551,402       21,594,546       21,854,800       22,111,454  
                   
Tangible Common Equity to Tangible Assets   6.58 %     6.55 %     6.01 %     6.19 %     6.24 %
Tangible Book Value Per Share $ 23.44     $ 23.35     $ 21.67     $ 22.24     $ 21.87  
Tangible Book Value Per Share, excluding AOCI $ 27.23     $ 26.91     $ 26.35     $ 26.11     $ 25.39  
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