Midland States Bancorp, Inc. (Nasdaq: MSBI) (the “Company”) today
reported net income available to common shareholders of $16.2
million, or $0.74 per diluted share, for the third quarter of 2024,
compared to $4.5 million, or $0.20 per diluted share, for the
second quarter of 2024. This also compares to net income available
to common shareholders of $9.2 million, or $0.41 per diluted share,
for the third quarter of 2023.
Provision expense was $5.0 million in the third quarter of 2024
compared to $16.8 million and $5.2 million in the second quarter of
2024 and the third quarter of 2023, respectively. The elevated
provision expense in the second quarter of 2024 was primarily due
to credit deterioration and servicing issues involving one of our
fintech partners, LendingPoint, subsequent to their system
conversion in late 2023.
Jeffrey G. Ludwig, President and Chief Executive Officer of the
Company, said, “We executed well in the third quarter and delivered
a higher level of profitability while making continued progress on
our balance sheet management strategies, which resulted in further
increases in all of our capital ratios, an increase in our tangible
book value per share, and an increase in our level of liquidity
with a reduction in our loan-to-deposit ratio. We continue to
utilize the payoffs resulting from the intentional reduction of our
equipment finance and consumer portfolios to fund high quality
loans generated in our community bank and the purchase of
investment securities. We are also seeing good results from the
investments we have made in the business, such as increasing our
presence and business development efforts in the St. Louis market,
where our loan balances increased at an annualized rate of 12%
during the third quarter, and growth in our Wealth Management
revenues due to an increase in assets under administration,
partially driven by the new wealth advisors we have added in recent
quarters.
Improving our credit quality is a priority and we are taking
proactive steps to resolve problem loans in order to reduce our
level of non-performing and classified loans going forward. We
continue to closely monitor the health of our borrowers and be
conservative in downgrading loans where we see the potential for
weakness. We also recently added a new Chief Credit Officer whose
background and experience is consistent with our increased focus on
in-market relationship lending in our community bank, which will
continue to result in a higher quality, lower risk loan
portfolio.
“While we will remain conservative in new loan production while
economic conditions remain uncertain, we are well positioned to
benefit from lower interest rates and we expect positive trends in
our net interest margin and revenue generated from our Wealth
Management business. While maintaining disciplined expense control,
we are continuing to make investments in talent and technology that
will further enhance our ability to increase our market share, add
attractive new client relationships in our community bank, and
generate profitable growth. With the stronger balance sheet we are
building, including a Total Capital Ratio of approximately 14%, we
believe we are well positioned to support the continued growth of
our franchise as economic conditions improve in the future and
create additional value for our shareholders in the process,” said
Mr. Ludwig.
Balance Sheet Highlights
Total assets were $7.75 billion at September 30, 2024, compared
to $7.76 billion at June 30, 2024, and $7.97 billion at September
30, 2023. At September 30, 2024, portfolio loans were $5.75
billion, compared to $5.85 billion at June 30, 2024, and $6.28
billion at September 30, 2023.
Loans
During the third quarter of 2024, outstanding loans declined by
$103.2 million, or 1.8%, from June 30, 2024, as the Company
continued to shrink its equipment financing and consumer loan
portfolios, and focus on commercial loan opportunities in our
community banking regions.
Equipment finance loan and lease balances decreased $30.0
million during the third quarter of 2024 as the Company continued
to reduce its concentration of this product within the overall loan
portfolio. Consumer loans decreased $82.8 million due to loan
payoffs and a cessation in loans originated through GreenSky. Our
Greensky-originated loan balances decreased $63.0 million during
the third quarter to $475.3 million at September 30, 2024. In
addition, as previously disclosed, during the fourth quarter of
2023, the Company ceased originating loans through LendingPoint. As
of September 30, 2024, the Company had $96.5 million in loans that
were originated through and serviced by LendingPoint. Equipment
financing and consumer loans comprised 15.0% and 11.5%,
respectively, of the loan portfolio at September 30, 2024, compared
to 15.2% and 12.7%, respectively, at June 30, 2024.
Increases in commercial FHA warehouse lines and commercial real
estate loans of $50.2 million and $89.0 million, respectively, were
offset by decreases in all other loan categories.
|
|
As of |
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
(in thousands) |
|
2024 |
|
2024 |
|
2024 |
|
2023 |
|
2023 |
Loan
Portfolio |
|
|
|
|
|
|
|
|
|
|
Commercial loans |
|
$ |
863,922 |
|
$ |
939,458 |
|
$ |
913,564 |
|
$ |
951,387 |
|
$ |
943,761 |
Equipment finance loans |
|
|
442,552 |
|
|
461,409 |
|
|
494,068 |
|
|
531,143 |
|
|
578,931 |
Equipment finance leases |
|
|
417,531 |
|
|
428,659 |
|
|
455,879 |
|
|
473,350 |
|
|
485,460 |
Commercial FHA warehouse
lines |
|
|
50,198 |
|
|
— |
|
|
8,035 |
|
|
— |
|
|
48,547 |
Total commercial loans and leases |
|
|
1,774,203 |
|
|
1,829,526 |
|
|
1,871,546 |
|
|
1,955,880 |
|
|
2,056,699 |
Commercial real estate |
|
|
2,510,472 |
|
|
2,421,505 |
|
|
2,397,113 |
|
|
2,406,845 |
|
|
2,412,164 |
Construction and land
development |
|
|
422,253 |
|
|
476,528 |
|
|
474,128 |
|
|
452,593 |
|
|
416,801 |
Residential real estate |
|
|
378,657 |
|
|
378,393 |
|
|
378,583 |
|
|
380,583 |
|
|
375,211 |
Consumer |
|
|
663,234 |
|
|
746,042 |
|
|
837,092 |
|
|
935,178 |
|
|
1,020,008 |
Total loans |
|
$ |
5,748,819 |
|
$ |
5,851,994 |
|
$ |
5,958,462 |
|
$ |
6,131,079 |
|
$ |
6,280,883 |
Loan Quality
Overall, credit quality metrics remained consistent this quarter
compared to the second quarter of 2024, albeit, nonperforming loans
were still at elevated levels. Non-performing loans increased $2.4
million to $114.6 million at September 30, 2024, compared to $112.1
million as of June 30, 2024. Substandard loans increased $32.0
million to $167.5 million at September 30, 2024, as compared to
June 30, 2024, primarily due to two multi-family projects that were
downgraded this past quarter.
|
|
As of and for the Three Months Ended |
(in thousands) |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
|
2024 |
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2023 |
|
Asset
Quality |
|
|
|
|
|
|
|
|
|
|
Loans 30-89 days past due |
|
$ |
55,329 |
|
|
$ |
54,045 |
|
|
$ |
58,854 |
|
|
$ |
82,778 |
|
|
$ |
46,608 |
|
Nonperforming loans |
|
|
114,556 |
|
|
|
112,124 |
|
|
|
104,979 |
|
|
|
56,351 |
|
|
|
55,981 |
|
Nonperforming assets |
|
|
126,771 |
|
|
|
123,774 |
|
|
|
116,721 |
|
|
|
67,701 |
|
|
|
58,677 |
|
Substandard loans |
|
|
167,549 |
|
|
|
135,555 |
|
|
|
149,049 |
|
|
|
184,224 |
|
|
|
143,793 |
|
Net charge-offs |
|
|
11,379 |
|
|
|
2,874 |
|
|
|
4,445 |
|
|
|
5,117 |
|
|
|
3,449 |
|
Loans 30-89 days past due to
total loans |
|
|
0.96 |
% |
|
|
0.92 |
% |
|
|
0.99 |
% |
|
|
1.35 |
% |
|
|
0.74 |
% |
Nonperforming loans to total
loans |
|
|
1.99 |
% |
|
|
1.92 |
% |
|
|
1.76 |
% |
|
|
0.92 |
% |
|
|
0.89 |
% |
Nonperforming assets to total
assets |
|
|
1.64 |
% |
|
|
1.60 |
% |
|
|
1.49 |
% |
|
|
0.86 |
% |
|
|
0.74 |
% |
Allowance for credit losses to
total loans |
|
|
1.49 |
% |
|
|
1.58 |
% |
|
|
1.31 |
% |
|
|
1.12 |
% |
|
|
1.06 |
% |
Allowance for credit losses to
nonperforming loans |
|
|
74.90 |
% |
|
|
82.22 |
% |
|
|
74.35 |
% |
|
|
121.56 |
% |
|
|
119.09 |
% |
Net charge-offs to average
loans |
|
|
0.78 |
% |
|
|
0.20 |
% |
|
|
0.30 |
% |
|
|
0.33 |
% |
|
|
0.22 |
% |
The allowance for credit losses on loans totaled $85.8 million
at September 30, 2024, compared to $92.2 million at June 30, 2024,
and $66.7 million at September 30, 2023. The allowance as a
percentage of total loans was 1.49% at September 30, 2024, compared
to 1.58% at June 30, 2024, and 1.06% at September 30, 2023.
Notably, the Company recognized provision expense of $14.0
million in the second quarter of 2024 related to the loans
originated and serviced by LendingPoint, increasing the allowance
to $14.6 million on this portfolio. Credit deterioration and
servicing issues following their system conversion have resulted in
increased losses within this portfolio. In the third quarter of
2024, loans totaling $6.2 million were charged off. At September
30, 2024, the Company had an allowance of $8.3 million on the $96.5
million of loans serviced by LendingPoint.
Deposits
Total deposits were $6.26 billion at September 30, 2024,
compared with $6.12 billion at June 30, 2024. Noninterest-bearing
deposits decreased $57.9 million to $1.05 billion at September 30,
2024, while interest-bearing deposits increased $196.7 million to
$5.21 billion at September 30, 2024. Brokered time deposits
increased $138.0 million to $269.4 million, and represented 4.31%
of total deposits at September 30, 2024.
|
|
As of |
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
(in thousands) |
|
2024 |
|
2024 |
|
2024 |
|
2023 |
|
2023 |
Deposit
Portfolio |
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing demand |
|
$ |
1,050,617 |
|
$ |
1,108,521 |
|
$ |
1,212,382 |
|
$ |
1,145,395 |
|
$ |
1,154,515 |
Interest-bearing: |
|
|
|
|
|
|
|
|
|
|
Checking |
|
|
2,389,970 |
|
|
2,343,533 |
|
|
2,394,163 |
|
|
2,511,840 |
|
|
2,572,224 |
Money market |
|
|
1,187,139 |
|
|
1,143,668 |
|
|
1,128,463 |
|
|
1,135,629 |
|
|
1,090,962 |
Savings |
|
|
510,260 |
|
|
538,462 |
|
|
555,552 |
|
|
559,267 |
|
|
582,359 |
Time |
|
|
849,413 |
|
|
852,415 |
|
|
845,190 |
|
|
862,865 |
|
|
885,858 |
Brokered time |
|
|
269,437 |
|
|
131,424 |
|
|
188,234 |
|
|
94,533 |
|
|
119,084 |
Total deposits |
|
$ |
6,256,836 |
|
$ |
6,118,023 |
|
$ |
6,323,984 |
|
$ |
6,309,529 |
|
$ |
6,405,002 |
Results of Operations Highlights
Net Interest Income and Margin
During the third quarter of 2024, net interest income and net
interest margin, on a tax-equivalent basis, were $55.2 million
and 3.10%, respectively, compared to $55.2 million and 3.12%,
respectively, in the second quarter of 2024. Net interest income
and net interest margin, on a tax-equivalent basis, were
$58.8 million and 3.20%, respectively, in the third quarter of
2023.
Average interest-earning assets for the third quarter of 2024
were $7.07 billion, compared to $7.13 billion for the second
quarter of 2024. The yield on interest-earning assets increased 7
basis points to 5.91% compared to the second quarter of 2024.
Interest-earning assets averaged $7.28 billion for the third
quarter of 2023.
Average loans were $5.78 billion for the third quarter of 2024,
compared to $5.92 billion for the second quarter of 2024 and $6.30
billion for the third quarter of 2023. The yield on loans was 6.15%
for the third quarter of 2024, up from 6.03% for the second quarter
of 2024 and 5.93% for the third quarter of 2023.
Investment securities averaged $1.16 billion for the third
quarter of 2024, and yielded 4.71%, compared to an average balance
and yield of $1.10 billion and 4.69%, respectively, for the second
quarter of 2024. The Company purchased additional higher-yielding
investments resulting in the increased average balance and yield.
Investment securities averaged $863.0 million for the third quarter
of 2023.
Average interest-bearing liabilities for the third quarter of
2024 were $5.76 billion, compared to $5.78 billion for the second
quarter of 2024. The cost of funds increased 9 basis points to
3.45% compared to the second quarter of 2024. Interest-bearing
liabilities averaged $5.92 billion for the third quarter of
2023.
Average interest-bearing deposits were $5.13 billion for the
third quarter of 2024, compared to $5.10 billion for the second
quarter of 2024, and $5.35 billion for the third quarter of 2023.
Cost of interest-bearing deposits was 3.25% in the third quarter of
2024, which represented a 14 basis point increase from the second
quarter of 2024, due to increased competition.
|
|
For the Three Months Ended |
(dollars in thousands) |
|
September 30, 2024 |
|
June 30, 2024 |
|
September 30, 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 |
|
$ |
75,255 |
|
$ |
1,031 |
|
5.45 |
% |
|
$ |
65,250 |
|
$ |
875 |
|
5.40 |
% |
|
$ |
78,391 |
|
$ |
1,036 |
|
5.24 |
% |
Investment securities(1) |
|
|
1,162,751 |
|
|
13,752 |
|
4.71 |
|
|
|
1,098,452 |
|
|
12,805 |
|
4.69 |
|
|
|
862,998 |
|
|
7,822 |
|
3.60 |
|
Loans(1)(2) |
|
|
5,783,408 |
|
|
89,344 |
|
6.15 |
|
|
|
5,915,523 |
|
|
88,738 |
|
6.03 |
|
|
|
6,297,568 |
|
|
94,118 |
|
5.93 |
|
Loans held for sale |
|
|
7,505 |
|
|
124 |
|
6.57 |
|
|
|
4,910 |
|
|
84 |
|
6.84 |
|
|
|
6,078 |
|
|
104 |
|
6.80 |
|
Nonmarketable equity
securities |
|
|
41,137 |
|
|
788 |
|
7.62 |
|
|
|
44,216 |
|
|
963 |
|
8.76 |
|
|
|
39,347 |
|
|
710 |
|
7.16 |
|
Total interest-earning assets |
|
|
7,070,056 |
|
|
105,039 |
|
5.91 |
|
|
|
7,128,351 |
|
|
103,465 |
|
5.84 |
|
|
|
7,284,382 |
|
|
103,790 |
|
5.65 |
|
Noninterest-earning
assets |
|
|
653,279 |
|
|
|
|
|
|
669,370 |
|
|
|
|
|
|
622,969 |
|
|
|
|
Total assets |
|
$ |
7,723,335 |
|
|
|
|
|
$ |
7,797,721 |
|
|
|
|
|
$ |
7,907,351 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-Bearing
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
|
$ |
5,132,640 |
|
$ |
41,970 |
|
3.25 |
% |
|
$ |
5,101,365 |
|
$ |
39,476 |
|
3.11 |
% |
|
$ |
5,354,356 |
|
$ |
37,769 |
|
2.80 |
% |
Short-term borrowings |
|
|
53,577 |
|
|
602 |
|
4.47 |
|
|
|
30,449 |
|
|
308 |
|
4.07 |
|
|
|
20,127 |
|
|
14 |
|
0.28 |
|
FHLB advances & other
borrowings |
|
|
428,739 |
|
|
4,743 |
|
4.40 |
|
|
|
500,758 |
|
|
5,836 |
|
4.69 |
|
|
|
402,500 |
|
|
4,557 |
|
4.49 |
|
Subordinated debt |
|
|
89,120 |
|
|
1,228 |
|
5.48 |
|
|
|
93,090 |
|
|
1,265 |
|
5.47 |
|
|
|
93,441 |
|
|
1,280 |
|
5.43 |
|
Trust preferred
debentures |
|
|
50,990 |
|
|
1,341 |
|
10.46 |
|
|
|
50,921 |
|
|
1,358 |
|
10.73 |
|
|
|
50,379 |
|
|
1,369 |
|
10.78 |
|
Total interest-bearing liabilities |
|
|
5,755,066 |
|
|
49,884 |
|
3.45 |
|
|
|
5,776,583 |
|
|
48,243 |
|
3.36 |
|
|
|
5,920,803 |
|
|
44,989 |
|
3.01 |
|
Noninterest-bearing
deposits |
|
|
1,075,712 |
|
|
|
|
|
|
1,132,451 |
|
|
|
|
|
|
1,116,988 |
|
|
|
|
Other noninterest-bearing
liabilities |
|
|
97,235 |
|
|
|
|
|
|
104,841 |
|
|
|
|
|
|
97,935 |
|
|
|
|
Shareholders’ equity |
|
|
795,322 |
|
|
|
|
|
|
783,846 |
|
|
|
|
|
|
771,625 |
|
|
|
|
Total liabilities and shareholder’s equity |
|
$ |
7,723,335 |
|
|
|
|
|
$ |
7,797,721 |
|
|
|
|
|
$ |
7,907,351 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest
Margin |
|
|
|
$ |
55,155 |
|
3.10 |
% |
|
|
|
$ |
55,222 |
|
3.12 |
% |
|
|
|
$ |
58,801 |
|
3.20 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Deposits |
|
|
|
|
|
2.69 |
% |
|
|
|
|
|
2.55 |
% |
|
|
|
|
|
2.32 |
% |
(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
September 30, 2024, June 30, 2024 and September 30, 2023,
respectively.(2) Average loan balances include nonaccrual loans.
Interest income on loans includes amortization of deferred loan
fees, net of deferred loan costs.
For the nine months ended September 30, 2024, net interest
income, on a tax-equivalent basis, decreased to $166.5 million,
with a tax-equivalent net interest margin of 3.13%, compared to net
interest income, on a tax-equivalent basis, of $178.6 million, and
a tax-equivalent net interest margin of 3.27% for the nine months
ended September 30, 2023.
The yield on earning assets increased 34 basis points to 5.84%
for the nine months ended September 30, 2024 compared to the prior
year. However, the cost of interest-bearing liabilities increased
at a faster rate during this period, increasing 57 basis points to
3.34% for the nine months ended September 30, 2024.
|
|
For the Nine Months Ended |
(dollars in thousands) |
|
September 30, 2024 |
|
September 30, 2023 |
Interest-earning
assets |
|
Average Balance |
|
Interest & Fees |
|
Yield/Rate |
|
Average Balance |
|
Interest & Fees |
|
Yield/Rate |
Cash and cash equivalents |
|
$ |
69,960 |
|
$ |
2,857 |
|
5.45 |
% |
|
$ |
76,939 |
|
$ |
2,868 |
|
4.98 |
% |
Investment securities(1) |
|
|
1,083,597 |
|
|
37,265 |
|
4.59 |
|
|
|
844,946 |
|
|
21,103 |
|
3.33 |
|
Loans(1)(2) |
|
|
5,903,216 |
|
|
267,570 |
|
6.05 |
|
|
|
6,324,578 |
|
|
274,005 |
|
5.79 |
|
Loans held for sale |
|
|
5,281 |
|
|
263 |
|
6.65 |
|
|
|
3,900 |
|
|
179 |
|
6.14 |
|
Nonmarketable equity
securities |
|
|
40,429 |
|
|
2,438 |
|
8.06 |
|
|
|
44,034 |
|
|
2,104 |
|
6.39 |
|
Total interest-earning assets |
|
|
7,102,483 |
|
|
310,393 |
|
5.84 |
|
|
|
7,294,397 |
|
|
300,259 |
|
5.50 |
|
Noninterest-earning
assets |
|
|
663,967 |
|
|
|
|
|
|
615,383 |
|
|
|
|
Total assets |
|
$ |
7,766,450 |
|
|
|
|
|
$ |
7,909,780 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-Bearing
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
|
$ |
5,142,979 |
|
$ |
120,660 |
|
3.13 |
% |
|
$ |
5,223,852 |
|
$ |
97,791 |
|
2.50 |
% |
Short-term borrowings |
|
|
49,750 |
|
|
1,746 |
|
4.69 |
|
|
|
26,865 |
|
|
53 |
|
0.26 |
|
FHLB advances & other
borrowings |
|
|
414,259 |
|
|
13,615 |
|
4.39 |
|
|
|
471,084 |
|
|
15,959 |
|
4.53 |
|
Subordinated debt |
|
|
91,921 |
|
|
3,773 |
|
5.48 |
|
|
|
96,820 |
|
|
3,985 |
|
5.49 |
|
Trust preferred
debentures |
|
|
50,873 |
|
|
4,088 |
|
10.73 |
|
|
|
50,216 |
|
|
3,887 |
|
10.35 |
|
Total interest-bearing liabilities |
|
|
5,749,782 |
|
|
143,882 |
|
3.34 |
|
|
|
5,868,837 |
|
|
121,675 |
|
2.77 |
|
Noninterest-bearing
deposits |
|
|
1,119,764 |
|
|
|
|
|
|
1,184,410 |
|
|
|
|
Other noninterest-bearing
liabilities |
|
|
107,192 |
|
|
|
|
|
|
84,650 |
|
|
|
|
Shareholders’ equity |
|
|
789,712 |
|
|
|
|
|
|
771,883 |
|
|
|
|
Total liabilities and shareholders’ equity |
|
$ |
7,766,450 |
|
|
|
|
|
$ |
7,909,780 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest
Margin |
|
|
|
$ |
166,511 |
|
3.13 |
% |
|
|
|
$ |
178,584 |
|
3.27 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Deposits |
|
|
|
|
|
2.57 |
% |
|
|
|
|
|
2.04 |
% |
(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 $0.6 million for each of the nine months ended
September 30, 2024 and 2023, respectively.(2) Average loan balances
include nonaccrual loans. Interest income on loans includes
amortization of deferred loan fees, net of deferred loan costs.
Noninterest Income
Noninterest income was $19.3 million for the third quarter of
2024, compared to $17.7 million for the second quarter of 2024.
Noninterest income for the second quarter of 2024 included a $0.2
million gain on the repurchase of subordinated debt, offset by $0.2
million of net losses on the sale of investment securities. The
third quarter of 2023 included $5.0 million of losses on the sale
of investment securities. Excluding these transactions, noninterest
income for the third quarter of 2024, the second quarter of 2024,
and the third quarter of 2023 was $19.3 million, $17.6 million, and
$16.5 million, respectively.
|
|
For the Three Months Ended |
|
For the Nine Months Ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
(in thousands) |
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Noninterest
income |
|
|
|
|
|
|
|
|
|
|
Wealth management revenue |
|
$ |
7,104 |
|
|
$ |
6,801 |
|
|
$ |
6,288 |
|
|
$ |
21,037 |
|
|
$ |
18,968 |
|
Service charges on deposit accounts |
|
|
3,411 |
|
|
|
3,121 |
|
|
|
3,149 |
|
|
|
9,648 |
|
|
|
8,744 |
|
Interchange revenue |
|
|
3,506 |
|
|
|
3,563 |
|
|
|
3,609 |
|
|
|
10,427 |
|
|
|
10,717 |
|
Residential mortgage banking revenue |
|
|
697 |
|
|
|
557 |
|
|
|
507 |
|
|
|
1,781 |
|
|
|
1,452 |
|
Income on company-owned life insurance |
|
|
1,982 |
|
|
|
1,925 |
|
|
|
918 |
|
|
|
5,708 |
|
|
|
2,685 |
|
Loss on sales of investment securities, net |
|
|
(44 |
) |
|
|
(152 |
) |
|
|
(4,961 |
) |
|
|
(196 |
) |
|
|
(6,478 |
) |
Other income |
|
|
2,683 |
|
|
|
1,841 |
|
|
|
2,035 |
|
|
|
9,777 |
|
|
|
9,989 |
|
Total noninterest income |
|
$ |
19,339 |
|
|
$ |
17,656 |
|
|
$ |
11,545 |
|
|
$ |
58,182 |
|
|
$ |
46,077 |
|
Wealth management revenue totaled $7.1 million in the third
quarter of 2024, an increase of $0.3 million, or 4.5%, as compared
to the second quarter of 2024, due to increases in assets under
administration and estate fees. Assets under administration
increased to $4.27 billion at September 30, 2024 from $4.00 billion
at June 30, 2024, primarily due to improved sales activity. Assets
under administration totaled $3.50 billion at September 30,
2023.
Income on company-owned life insurance income totaled $2.0
million, $1.9 million and $0.9 million for the third quarter of
2024, the second quarter of 2024, and the third quarter of 2023,
respectively. The Company surrendered certain low-yielding life
insurance policies and purchased additional policies in the third
quarter of 2023, resulting in the increase in revenue.
Other income totaled $2.7 million in the third quarter of 2024
compared to $1.8 million in the second quarter of 2024. Income from
the sale of SBA loans in the third quarter of 2024 of $0.2 million
and losses from the disposition of repossessed leased assets in the
second quarter of 2024 of $0.6 million resulted in the quarter over
quarter increase in other income.
Noninterest Expense
Noninterest expense was $46.7 million in the third quarter of
2024, compared to $47.5 million in the second quarter of 2024 and
$42.0 million in the third quarter of 2023. Noninterest expense for
the second quarter of 2024 included $4.1 million of aggregate
expenses related to OREO impairment and property taxes, and
accruals related to various legal proceedings. Excluding these
items, noninterest expense for the third quarter of 2024, the
second quarter of 2024, and the third quarter of 2023 was $46.7
million, $43.4 million, and $42.0 million, respectively. Costs
related to increased staffing levels, upgrades to our ATM fleet,
and loan collection and OREO expenses drove the increase in
noninterest expense in the third quarter of 2024 compared to the
prior quarter.
The efficiency ratio improved to 62.76% for the quarter ended
September 30, 2024, compared to 65.16% for the quarter ended June
30, 2024. The efficiency ratio for the third quarter of 2023 was
55.82%.
|
|
For the Three Months Ended |
|
For the Nine Months Ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
(in thousands) |
|
2024 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Noninterest
expense |
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
$ |
24,382 |
|
$ |
22,872 |
|
$ |
22,307 |
|
$ |
71,356 |
|
$ |
69,407 |
Occupancy and equipment |
|
|
4,393 |
|
|
3,964 |
|
|
3,730 |
|
|
12,499 |
|
|
12,052 |
Data processing |
|
|
6,955 |
|
|
7,205 |
|
|
6,468 |
|
|
20,882 |
|
|
19,323 |
Professional services |
|
|
1,744 |
|
|
2,243 |
|
|
1,554 |
|
|
6,242 |
|
|
4,977 |
Amortization of intangible assets |
|
|
951 |
|
|
1,016 |
|
|
1,129 |
|
|
3,056 |
|
|
3,628 |
FDIC insurance |
|
|
1,402 |
|
|
1,219 |
|
|
1,107 |
|
|
3,895 |
|
|
3,632 |
Other expense |
|
|
6,906 |
|
|
8,960 |
|
|
5,743 |
|
|
21,149 |
|
|
16,395 |
Total noninterest expense |
|
$ |
46,733 |
|
$ |
47,479 |
|
$ |
42,038 |
|
$ |
139,079 |
|
$ |
129,414 |
Income Tax Expense
Income tax expense was $4.1 million for the third quarter of
2024, compared to $1.7 million for the second quarter of 2024 and
$11.5 million for the third quarter of 2023. The resulting
effective tax rates were 18.1%, 19.9% and 50.3%, respectively. Tax
expense for the third quarter of 2023 included a $1.4 million
return to provision adjustment and $4.5 million associated with the
surrender of company-owned life insurance policies, as previously
discussed.
Capital
At September 30, 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 September 30,
2024 |
|
Midland States Bank |
|
Midland States Bancorp, Inc. |
|
Minimum Regulatory
Requirements(2) |
Total capital to risk-weighted
assets |
13.34% |
|
13.98% |
|
10.50% |
Tier 1 capital to
risk-weighted assets |
12.09% |
|
11.65% |
|
8.50% |
Common equity Tier 1 capital
to risk-weighted assets |
12.09% |
|
9.00% |
|
7.00% |
Tier 1 leverage ratio |
10.47% |
|
10.10% |
|
4.00% |
Tangible common equity to
tangible assets(1) |
N/A |
|
7.03% |
|
N/A |
(1) A non-GAAP financial measure. Refer to page 16 for a
reconciliation to the comparable GAAP financial measure.(2)
Includes the capital conservation buffer of 2.5%, as
applicable.
The impact of rising interest rates on the Company’s investment
portfolio and cash flow hedges resulted in an accumulated other
comprehensive loss of $60.6 million at September 30, 2024, which
reduced tangible book value by $2.84 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
third quarter of 2024, the Company repurchased 23,113 shares of its
common stock at a weighted average price of $22.54 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 September 30, 2024,
the Company had total assets of approximately $7.75 billion, and
its Wealth Management Group had assets under administration of
approximately $4.27 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, 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 |
|
As of andfor the Nine Months
Ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
(dollars in thousands, except per share data) |
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Earnings
Summary |
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
54,950 |
|
|
$ |
55,052 |
|
|
$ |
58,596 |
|
|
$ |
165,922 |
|
|
$ |
177,940 |
|
Provision for credit
losses |
|
|
5,000 |
|
|
|
16,800 |
|
|
|
5,168 |
|
|
|
35,800 |
|
|
|
14,182 |
|
Noninterest income |
|
|
19,339 |
|
|
|
17,656 |
|
|
|
11,545 |
|
|
|
58,182 |
|
|
|
46,077 |
|
Noninterest expense |
|
|
46,733 |
|
|
|
47,479 |
|
|
|
42,038 |
|
|
|
139,079 |
|
|
|
129,414 |
|
Income before income
taxes |
|
|
22,556 |
|
|
|
8,429 |
|
|
|
22,935 |
|
|
|
49,225 |
|
|
|
80,421 |
|
Income taxes |
|
|
4,080 |
|
|
|
1,679 |
|
|
|
11,533 |
|
|
|
10,114 |
|
|
|
25,672 |
|
Net income |
|
|
18,476 |
|
|
|
6,750 |
|
|
|
11,402 |
|
|
|
39,111 |
|
|
|
54,749 |
|
Preferred dividends |
|
|
2,229 |
|
|
|
2,228 |
|
|
|
2,229 |
|
|
|
6,685 |
|
|
|
6,685 |
|
Net income available to common
shareholders |
|
$ |
16,247 |
|
|
$ |
4,522 |
|
|
$ |
9,173 |
|
|
$ |
32,426 |
|
|
$ |
48,064 |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common
share |
|
$ |
0.74 |
|
|
$ |
0.20 |
|
|
$ |
0.41 |
|
|
$ |
1.47 |
|
|
$ |
2.14 |
|
Weighted average common shares
outstanding - diluted |
|
|
21,678,242 |
|
|
|
21,734,849 |
|
|
|
21,977,196 |
|
|
|
21,732,093 |
|
|
|
22,223,986 |
|
Return on average assets |
|
|
0.95 |
% |
|
|
0.35 |
% |
|
|
0.57 |
% |
|
|
0.67 |
% |
|
|
0.93 |
% |
Return on average
shareholders' equity |
|
|
9.24 |
% |
|
|
3.46 |
% |
|
|
5.86 |
% |
|
|
6.62 |
% |
|
|
9.48 |
% |
Return on average tangible
common equity(1) |
|
|
12.69 |
% |
|
|
3.66 |
% |
|
|
7.56 |
% |
|
|
8.62 |
% |
|
|
13.37 |
% |
Net interest margin |
|
|
3.10 |
% |
|
|
3.12 |
% |
|
|
3.20 |
% |
|
|
3.13 |
% |
|
|
3.27 |
% |
Efficiency ratio(1) |
|
|
62.76 |
% |
|
|
65.16 |
% |
|
|
55.82 |
% |
|
|
61.91 |
% |
|
|
56.15 |
% |
|
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings
Performance Summary(1) |
|
|
|
|
|
|
|
|
|
|
Adjusted earnings available to
common shareholders |
|
$ |
16,223 |
|
|
$ |
4,511 |
|
|
$ |
17,278 |
|
|
$ |
32,391 |
|
|
$ |
56,783 |
|
Adjusted diluted earnings per
common share |
|
$ |
0.74 |
|
|
$ |
0.20 |
|
|
$ |
0.78 |
|
|
$ |
1.47 |
|
|
$ |
2.53 |
|
Adjusted return on average
assets |
|
|
0.95 |
% |
|
|
0.35 |
% |
|
|
0.98 |
% |
|
|
0.67 |
% |
|
|
1.07 |
% |
Adjusted return on average
shareholders' equity |
|
|
9.23 |
% |
|
|
3.46 |
% |
|
|
10.03 |
% |
|
|
6.61 |
% |
|
|
10.99 |
% |
Adjusted return on average
tangible common equity |
|
|
12.67 |
% |
|
|
3.65 |
% |
|
|
14.24 |
% |
|
|
8.61 |
% |
|
|
15.80 |
% |
Adjusted pre-tax,
pre-provision earnings |
|
$ |
27,523 |
|
|
$ |
25,214 |
|
|
$ |
33,064 |
|
|
$ |
84,977 |
|
|
$ |
100,405 |
|
Adjusted pre-tax,
pre-provision return on average assets |
|
|
1.42 |
% |
|
|
1.30 |
% |
|
|
1.66 |
% |
|
|
1.46 |
% |
|
|
1.70 |
% |
|
|
|
|
|
|
|
|
|
|
|
Market
Data |
|
|
|
|
|
|
|
|
|
|
Book value per share at period
end |
|
$ |
33.08 |
|
|
$ |
31.59 |
|
|
$ |
29.96 |
|
|
|
|
|
Tangible book value per share
at period end(1) |
|
$ |
24.90 |
|
|
$ |
23.36 |
|
|
$ |
21.67 |
|
|
|
|
|
Tangible book value per share
excluding accumulated other comprehensive income at period
end(1) |
|
$ |
27.74 |
|
|
$ |
27.22 |
|
|
$ |
26.35 |
|
|
|
|
|
Market price at period
end |
|
$ |
22.38 |
|
|
$ |
22.65 |
|
|
$ |
20.54 |
|
|
|
|
|
Common shares outstanding at
period end |
|
|
21,393,905 |
|
|
|
21,377,215 |
|
|
|
21,594,546 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital |
|
|
|
|
|
|
|
|
|
|
Total capital to risk-weighted
assets |
|
|
13.98 |
% |
|
|
13.83 |
% |
|
|
12.76 |
% |
|
|
|
|
Tier 1 capital to
risk-weighted assets |
|
|
11.65 |
% |
|
|
11.23 |
% |
|
|
10.53 |
% |
|
|
|
|
Common equity tier 1capital to
risk-weighted assets |
|
|
9.00 |
% |
|
|
8.64 |
% |
|
|
8.07 |
% |
|
|
|
|
Tier 1 leverage ratio |
|
|
10.10 |
% |
|
|
9.84 |
% |
|
|
9.59 |
% |
|
|
|
|
Tangible common equity to
tangible assets(1) |
|
|
7.03 |
% |
|
|
6.59 |
% |
|
|
6.01 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wealth
Management |
|
|
|
|
|
|
|
|
|
|
Trust assets under
administration |
|
$ |
4,268,539 |
|
|
$ |
3,996,175 |
|
|
$ |
3,501,225 |
|
|
|
|
|
(1) Non-GAAP financial measures. Refer to pages 14 - 16 for a
reconciliation to the comparable GAAP financial measures.
MIDLAND STATES BANCORP, INC. |
CONSOLIDATED FINANCIAL SUMMARY (unaudited)
(continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
As of |
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
(in thousands) |
|
|
2024 |
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2023 |
|
Assets |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
121,873 |
|
|
$ |
124,646 |
|
|
$ |
167,316 |
|
|
$ |
135,061 |
|
|
$ |
132,132 |
|
Investment securities |
|
|
1,216,795 |
|
|
|
1,099,654 |
|
|
|
1,044,900 |
|
|
|
920,396 |
|
|
|
839,344 |
|
Loans |
|
|
5,748,819 |
|
|
|
5,851,994 |
|
|
|
5,958,462 |
|
|
|
6,131,079 |
|
|
|
6,280,883 |
|
Allowance for credit losses on
loans |
|
|
(85,804 |
) |
|
|
(92,183 |
) |
|
|
(78,057 |
) |
|
|
(68,502 |
) |
|
|
(66,669 |
) |
Total loans, net |
|
|
5,663,015 |
|
|
|
5,759,811 |
|
|
|
5,880,405 |
|
|
|
6,062,577 |
|
|
|
6,214,214 |
|
Loans held for sale |
|
|
8,001 |
|
|
|
5,555 |
|
|
|
5,043 |
|
|
|
3,811 |
|
|
|
6,089 |
|
Premises and equipment,
net |
|
|
84,672 |
|
|
|
83,040 |
|
|
|
81,831 |
|
|
|
82,814 |
|
|
|
82,741 |
|
Other real estate owned |
|
|
8,646 |
|
|
|
8,304 |
|
|
|
8,920 |
|
|
|
9,112 |
|
|
|
480 |
|
Loan servicing rights, at
lower of cost or fair value |
|
|
18,400 |
|
|
|
18,902 |
|
|
|
19,577 |
|
|
|
20,253 |
|
|
|
20,933 |
|
Goodwill |
|
|
161,904 |
|
|
|
161,904 |
|
|
|
161,904 |
|
|
|
161,904 |
|
|
|
161,904 |
|
Other intangible assets,
net |
|
|
13,052 |
|
|
|
14,003 |
|
|
|
15,019 |
|
|
|
16,108 |
|
|
|
17,238 |
|
Company-owned life
insurance |
|
|
209,193 |
|
|
|
207,211 |
|
|
|
205,286 |
|
|
|
203,485 |
|
|
|
201,750 |
|
Other assets |
|
|
245,932 |
|
|
|
274,244 |
|
|
|
241,608 |
|
|
|
251,347 |
|
|
|
292,460 |
|
Total assets |
|
$ |
7,751,483 |
|
|
$ |
7,757,274 |
|
|
$ |
7,831,809 |
|
|
$ |
7,866,868 |
|
|
$ |
7,969,285 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity |
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing demand
deposits |
|
$ |
1,050,617 |
|
|
$ |
1,108,521 |
|
|
$ |
1,212,382 |
|
|
$ |
1,145,395 |
|
|
$ |
1,154,515 |
|
Interest-bearing deposits |
|
|
5,206,219 |
|
|
|
5,009,502 |
|
|
|
5,111,602 |
|
|
|
5,164,134 |
|
|
|
5,250,487 |
|
Total deposits |
|
|
6,256,836 |
|
|
|
6,118,023 |
|
|
|
6,323,984 |
|
|
|
6,309,529 |
|
|
|
6,405,002 |
|
Short-term borrowings |
|
|
13,849 |
|
|
|
7,208 |
|
|
|
214,446 |
|
|
|
34,865 |
|
|
|
17,998 |
|
FHLB advances and other
borrowings |
|
|
425,000 |
|
|
|
600,000 |
|
|
|
255,000 |
|
|
|
476,000 |
|
|
|
538,000 |
|
Subordinated debt |
|
|
82,744 |
|
|
|
91,656 |
|
|
|
93,617 |
|
|
|
93,546 |
|
|
|
93,475 |
|
Trust preferred
debentures |
|
|
51,058 |
|
|
|
50,921 |
|
|
|
50,790 |
|
|
|
50,616 |
|
|
|
50,457 |
|
Other liabilities |
|
|
103,737 |
|
|
|
103,694 |
|
|
|
102,966 |
|
|
|
110,459 |
|
|
|
106,743 |
|
Total liabilities |
|
|
6,933,224 |
|
|
|
6,971,502 |
|
|
|
7,040,803 |
|
|
|
7,075,015 |
|
|
|
7,211,675 |
|
Total shareholders’ equity |
|
|
818,259 |
|
|
|
785,772 |
|
|
|
791,006 |
|
|
|
791,853 |
|
|
|
757,610 |
|
Total liabilities and shareholders’ equity |
|
$ |
7,751,483 |
|
|
$ |
7,757,274 |
|
|
$ |
7,831,809 |
|
|
$ |
7,866,868 |
|
|
$ |
7,969,285 |
|
MIDLAND STATES BANCORP, INC. |
CONSOLIDATED FINANCIAL SUMMARY (unaudited)
(continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
For the Nine Months Ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
(in thousands, except per share data) |
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net interest income: |
|
|
|
|
|
|
|
|
|
|
Interest income |
|
$ |
104,834 |
|
|
$ |
103,295 |
|
|
$ |
103,585 |
|
|
$ |
309,804 |
|
|
$ |
299,615 |
|
Interest expense |
|
|
49,884 |
|
|
|
48,243 |
|
|
|
44,989 |
|
|
|
143,882 |
|
|
|
121,675 |
|
Net interest income |
|
|
54,950 |
|
|
|
55,052 |
|
|
|
58,596 |
|
|
|
165,922 |
|
|
|
177,940 |
|
Provision for credit losses on
loans |
|
|
5,000 |
|
|
|
17,000 |
|
|
|
5,168 |
|
|
|
36,000 |
|
|
|
14,182 |
|
Provision for credit losses on
unfunded commitments |
|
|
— |
|
|
|
(200 |
) |
|
|
— |
|
|
|
(200 |
) |
|
|
— |
|
Total provision for credit losses |
|
|
5,000 |
|
|
|
16,800 |
|
|
|
5,168 |
|
|
|
35,800 |
|
|
|
14,182 |
|
Net interest income after provision for credit losses |
|
|
49,950 |
|
|
|
38,252 |
|
|
|
53,428 |
|
|
|
130,122 |
|
|
|
163,758 |
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
Wealth management revenue |
|
|
7,104 |
|
|
|
6,801 |
|
|
|
6,288 |
|
|
|
21,037 |
|
|
|
18,968 |
|
Service charges on deposit accounts |
|
|
3,411 |
|
|
|
3,121 |
|
|
|
3,149 |
|
|
|
9,648 |
|
|
|
8,744 |
|
Interchange revenue |
|
|
3,506 |
|
|
|
3,563 |
|
|
|
3,609 |
|
|
|
10,427 |
|
|
|
10,717 |
|
Residential mortgage banking revenue |
|
|
697 |
|
|
|
557 |
|
|
|
507 |
|
|
|
1,781 |
|
|
|
1,452 |
|
Income on company-owned life insurance |
|
|
1,982 |
|
|
|
1,925 |
|
|
|
918 |
|
|
|
5,708 |
|
|
|
2,685 |
|
Loss on sales of investment securities, net |
|
|
(44 |
) |
|
|
(152 |
) |
|
|
(4,961 |
) |
|
|
(196 |
) |
|
|
(6,478 |
) |
Other income |
|
|
2,683 |
|
|
|
1,841 |
|
|
|
2,035 |
|
|
|
9,777 |
|
|
|
9,989 |
|
Total noninterest income |
|
|
19,339 |
|
|
|
17,656 |
|
|
|
11,545 |
|
|
|
58,182 |
|
|
|
46,077 |
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
24,382 |
|
|
|
22,872 |
|
|
|
22,307 |
|
|
|
71,356 |
|
|
|
69,407 |
|
Occupancy and equipment |
|
|
4,393 |
|
|
|
3,964 |
|
|
|
3,730 |
|
|
|
12,499 |
|
|
|
12,052 |
|
Data processing |
|
|
6,955 |
|
|
|
7,205 |
|
|
|
6,468 |
|
|
|
20,882 |
|
|
|
19,323 |
|
Professional services |
|
|
1,744 |
|
|
|
2,243 |
|
|
|
1,554 |
|
|
|
6,242 |
|
|
|
4,977 |
|
Amortization of intangible assets |
|
|
951 |
|
|
|
1,016 |
|
|
|
1,129 |
|
|
|
3,056 |
|
|
|
3,628 |
|
FDIC insurance |
|
|
1,402 |
|
|
|
1,219 |
|
|
|
1,107 |
|
|
|
3,895 |
|
|
|
3,632 |
|
Other expense |
|
|
6,906 |
|
|
|
8,960 |
|
|
|
5,743 |
|
|
|
21,149 |
|
|
|
16,395 |
|
Total noninterest expense |
|
|
46,733 |
|
|
|
47,479 |
|
|
|
42,038 |
|
|
|
139,079 |
|
|
|
129,414 |
|
Income before income
taxes |
|
|
22,556 |
|
|
|
8,429 |
|
|
|
22,935 |
|
|
|
49,225 |
|
|
|
80,421 |
|
Income taxes |
|
|
4,080 |
|
|
|
1,679 |
|
|
|
11,533 |
|
|
|
10,114 |
|
|
|
25,672 |
|
Net income |
|
|
18,476 |
|
|
|
6,750 |
|
|
|
11,402 |
|
|
|
39,111 |
|
|
|
54,749 |
|
Preferred stock dividends |
|
|
2,229 |
|
|
|
2,228 |
|
|
|
2,229 |
|
|
|
6,685 |
|
|
|
6,685 |
|
Net income available to common shareholders |
|
$ |
16,247 |
|
|
$ |
4,522 |
|
|
$ |
9,173 |
|
|
$ |
32,426 |
|
|
$ |
48,064 |
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common
share |
|
$ |
0.74 |
|
|
$ |
0.20 |
|
|
$ |
0.41 |
|
|
$ |
1.47 |
|
|
$ |
2.14 |
|
Diluted earnings per common
share |
|
$ |
0.74 |
|
|
$ |
0.20 |
|
|
$ |
0.41 |
|
|
$ |
1.47 |
|
|
$ |
2.14 |
|
MIDLAND STATES BANCORP, INC. |
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
For the Nine Months Ended |
(dollars in thousands, except per share data) |
|
September 30,2024 |
|
June 30,2024 |
|
September 30,2023 |
|
September 30,2024 |
|
September 30,2023 |
Income before income taxes - GAAP |
|
$ |
22,556 |
|
|
$ |
8,429 |
|
|
$ |
22,935 |
|
|
$ |
49,225 |
|
|
$ |
80,421 |
|
Adjustments to noninterest
income: |
|
|
|
|
|
|
|
|
|
|
Loss on sales of investment securities, net |
|
|
44 |
|
|
|
152 |
|
|
|
4,961 |
|
|
|
196 |
|
|
|
6,478 |
|
(Gain) on repurchase of subordinated debt |
|
|
(77 |
) |
|
|
(167 |
) |
|
|
— |
|
|
|
(244 |
) |
|
|
(676 |
) |
Total adjustments to noninterest income |
|
|
(33 |
) |
|
|
(15 |
) |
|
|
4,961 |
|
|
|
(48 |
) |
|
|
5,802 |
|
Adjusted earnings pre tax -
non-GAAP |
|
|
22,523 |
|
|
|
8,414 |
|
|
|
27,896 |
|
|
|
49,177 |
|
|
|
86,223 |
|
Adjusted earnings tax |
|
|
4,071 |
|
|
|
1,675 |
|
|
|
8,389 |
|
|
|
10,101 |
|
|
|
22,755 |
|
Adjusted earnings -
non-GAAP |
|
|
18,452 |
|
|
|
6,739 |
|
|
|
19,507 |
|
|
|
39,076 |
|
|
|
63,468 |
|
Preferred stock dividends |
|
|
2,229 |
|
|
|
2,228 |
|
|
|
2,229 |
|
|
|
6,685 |
|
|
|
6,685 |
|
Adjusted earnings
available to common shareholders |
|
$ |
16,223 |
|
|
$ |
4,511 |
|
|
$ |
17,278 |
|
|
$ |
32,391 |
|
|
$ |
56,783 |
|
Adjusted diluted earnings per
common share |
|
$ |
0.74 |
|
|
$ |
0.20 |
|
|
$ |
0.78 |
|
|
$ |
1.47 |
|
|
$ |
2.53 |
|
Adjusted return on average
assets |
|
|
0.95 |
% |
|
|
0.35 |
% |
|
|
0.98 |
% |
|
|
0.67 |
% |
|
|
1.07 |
% |
Adjusted return on average
shareholders' equity |
|
|
9.23 |
% |
|
|
3.46 |
% |
|
|
10.03 |
% |
|
|
6.61 |
% |
|
|
10.99 |
% |
Adjusted return on average
tangible common equity |
|
|
12.67 |
% |
|
|
3.65 |
% |
|
|
14.24 |
% |
|
|
8.61 |
% |
|
|
15.80 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Pre-Tax, Pre-Provision Earnings
Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
For the Nine Months Ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
(dollars in thousands) |
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Adjusted earnings pre tax -
non-GAAP |
|
$ |
22,523 |
|
|
$ |
8,414 |
|
|
$ |
27,896 |
|
|
$ |
49,177 |
|
|
$ |
86,223 |
|
Provision for credit losses |
|
|
5,000 |
|
|
|
16,800 |
|
|
|
5,168 |
|
|
|
35,800 |
|
|
|
14,182 |
|
Adjusted pre-tax,
pre-provision earnings - non-GAAP |
|
$ |
27,523 |
|
|
$ |
25,214 |
|
|
$ |
33,064 |
|
|
$ |
84,977 |
|
|
$ |
100,405 |
|
Adjusted pre-tax,
pre-provision return on average assets |
|
|
1.42 |
% |
|
|
1.30 |
% |
|
|
1.66 |
% |
|
|
1.46 |
% |
|
|
1.70 |
% |
MIDLAND STATES BANCORP, INC. |
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited)
(continued) |
|
|
|
|
|
|
|
|
|
|
|
Efficiency Ratio Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
For the Nine Months Ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
(dollars in thousands) |
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Noninterest expense -
GAAP |
|
$ |
46,733 |
|
|
$ |
47,479 |
|
|
$ |
42,038 |
|
|
$ |
139,079 |
|
|
$ |
129,414 |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income -
GAAP |
|
$ |
54,950 |
|
|
$ |
55,052 |
|
|
$ |
58,596 |
|
|
$ |
165,922 |
|
|
$ |
177,940 |
|
Effect of tax-exempt
income |
|
|
205 |
|
|
|
170 |
|
|
|
205 |
|
|
|
589 |
|
|
|
644 |
|
Adjusted net interest income |
|
|
55,155 |
|
|
|
55,222 |
|
|
|
58,801 |
|
|
|
166,511 |
|
|
|
178,584 |
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income - GAAP |
|
|
19,339 |
|
|
|
17,656 |
|
|
|
11,545 |
|
|
|
58,182 |
|
|
|
46,077 |
|
Loss on sales of investment
securities, net |
|
|
44 |
|
|
|
152 |
|
|
|
4,961 |
|
|
|
196 |
|
|
|
6,478 |
|
(Gain) on repurchase of
subordinated debt |
|
|
(77 |
) |
|
|
(167 |
) |
|
|
— |
|
|
|
(244 |
) |
|
|
(676 |
) |
Adjusted noninterest income |
|
|
19,306 |
|
|
|
17,641 |
|
|
|
16,506 |
|
|
|
58,134 |
|
|
|
51,879 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted total revenue |
|
$ |
74,461 |
|
|
$ |
72,863 |
|
|
$ |
75,307 |
|
|
$ |
224,645 |
|
|
$ |
230,463 |
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency
ratio |
|
|
62.76 |
% |
|
|
65.16 |
% |
|
|
55.82 |
% |
|
|
61.91 |
% |
|
|
56.15 |
% |
|
|
|
|
|
|
|
|
|
|
|
Return on Average Tangible Common Equity
(ROATCE) |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
For the Nine Months Ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
(dollars in thousands) |
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net income available to common
shareholders |
|
$ |
16,247 |
|
|
$ |
4,522 |
|
|
$ |
9,173 |
|
|
$ |
32,426 |
|
|
$ |
48,064 |
|
|
|
|
|
|
|
|
|
|
|
|
Average total shareholders'
equity—GAAP |
|
$ |
795,322 |
|
|
$ |
783,846 |
|
|
$ |
771,625 |
|
|
$ |
789,712 |
|
|
$ |
771,883 |
|
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 |
|
|
(13,506 |
) |
|
|
(14,483 |
) |
|
|
(17,782 |
) |
|
|
(14,501 |
) |
|
|
(18,959 |
) |
Average tangible common
equity |
|
$ |
509,364 |
|
|
$ |
496,911 |
|
|
$ |
481,391 |
|
|
$ |
502,759 |
|
|
$ |
480,472 |
|
ROATCE |
|
|
12.69 |
% |
|
|
3.66 |
% |
|
|
7.56 |
% |
|
|
8.62 |
% |
|
|
13.37 |
% |
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 |
(dollars in thousands, except per share data) |
|
September 30,2024 |
|
June 30,2024 |
|
March 31,2024 |
|
December 31,2023 |
|
September 30,2023 |
Shareholders' Equity to Tangible Common
Equity |
|
|
|
|
|
|
|
|
Total shareholders' equity—GAAP |
|
$ |
818,259 |
|
|
$ |
785,772 |
|
|
$ |
791,006 |
|
|
$ |
791,853 |
|
|
$ |
757,610 |
|
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 |
|
|
(13,052 |
) |
|
|
(14,003 |
) |
|
|
(15,019 |
) |
|
|
(16,108 |
) |
|
|
(17,238 |
) |
Tangible common equity |
|
|
532,755 |
|
|
|
499,317 |
|
|
|
503,535 |
|
|
|
503,293 |
|
|
|
467,920 |
|
|
|
|
|
|
|
|
|
|
|
|
Less: Accumulated other comprehensive loss (AOCI) |
|
|
(60,640 |
) |
|
|
(82,581 |
) |
|
|
(81,419 |
) |
|
|
(76,753 |
) |
|
|
(101,181 |
) |
Tangible common equity excluding AOCI |
|
$ |
593,395 |
|
|
$ |
581,898 |
|
|
$ |
584,954 |
|
|
$ |
580,046 |
|
|
$ |
569,101 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets to
Tangible Assets: |
|
|
|
|
|
|
|
|
|
|
Total assets—GAAP |
|
$ |
7,751,483 |
|
|
$ |
7,757,274 |
|
|
$ |
7,831,809 |
|
|
$ |
7,866,868 |
|
|
$ |
7,969,285 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
(161,904 |
) |
|
|
(161,904 |
) |
|
|
(161,904 |
) |
|
|
(161,904 |
) |
|
|
(161,904 |
) |
Other intangible assets,
net |
|
|
(13,052 |
) |
|
|
(14,003 |
) |
|
|
(15,019 |
) |
|
|
(16,108 |
) |
|
|
(17,238 |
) |
Tangible assets |
|
$ |
7,576,527 |
|
|
$ |
7,581,367 |
|
|
$ |
7,654,886 |
|
|
$ |
7,688,856 |
|
|
$ |
7,790,143 |
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares Outstanding |
|
|
21,393,905 |
|
|
|
21,377,215 |
|
|
|
21,485,231 |
|
|
|
21,551,402 |
|
|
|
21,594,546 |
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Common Equity
to Tangible Assets |
|
|
7.03 |
% |
|
|
6.59 |
% |
|
|
6.58 |
% |
|
|
6.55 |
% |
|
|
6.01 |
% |
Tangible Book Value
Per Share |
|
$ |
24.90 |
|
|
$ |
23.36 |
|
|
$ |
23.44 |
|
|
$ |
23.35 |
|
|
$ |
21.67 |
|
Tangible Book Value
Per Share, excluding AOCI |
|
$ |
27.74 |
|
|
$ |
27.22 |
|
|
$ |
27.23 |
|
|
$ |
26.91 |
|
|
$ |
26.35 |
|
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