Midland States Bancorp, Inc. Announces 2017 First Quarter Results


Highlights

  • Net income of $8.5 million for first quarter of 2017
  • Earnings per share of $0.52, an increase of 24% over prior year period
  • Total loans increased $135 million, or 23.3% annualized
  • Return on average assets of 1.05%; Return on average tangible equity of 12.78%
  • Acquisition of CedarPoint Investment Advisors added $180 million in assets under administration

EFFINGHAM, Ill., April 27, 2017 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (NASDAQ:MSBI) (the “Company”) today reported net income of $8.5 million, or $0.52 diluted earnings per share, for the first quarter of 2017, compared with net income of $11.6 million, or $0.72 diluted earnings per share, for the fourth quarter of 2016, and net income of $5.1 million, or $0.42 diluted earnings per share, for the first quarter of 2016.  Financial results for the fourth quarter of 2016 included a $14.3 million gain on sale of a portfolio of private label collateralized mortgage obligations (“CMOs”), $2.1 million in charges related to the Company’s branch network optimization actions, and $1.6 million in other integration and acquisition-related expenses.

“We had strong performances across all of our major business lines in the first quarter, resulting in 24% earnings per share growth over the prior year,” said Leon J. Holschbach, President and Chief Executive Officer of the Company.  “We are seeing positive trends in all of our key metrics including well diversified loan growth, an expanding net interest margin, higher non-interest income and strong credit quality.  We are also executing well on our Operational Excellence initiative, which is delivering the cost savings and efficiency improvements that we are targeting.  Collectively, these positive trends helped us to more than offset the loss of the interest income previously generated from the portfolio of private label CMOs that we sold during the fourth quarter of 2016.

“We are seeing good opportunities to continue driving organic growth going forward.  Combined with the strategic and financial benefits projected for our pending acquisition of Centrue Financial Corporation, we believe that Midland is well positioned to continue increasing our level of profitability and enhancing the value of our franchise,” said Mr. Holschbach.

Net Interest Income

Net interest income for the first quarter of 2017 was $27.5 million, an increase of 5.8% from $26.0 million for the fourth quarter of 2016.  The increase in net interest income was primarily attributable to higher interest income on loans due to a 2.1% increase in the average balance of loans and an increase in net interest margin.

The Company’s net interest income benefits from accretion income associated with purchased loan portfolios.  Accretion income totaled $2.7 million for the first quarter of 2017, compared with $2.2 million for the fourth quarter of 2016. 

Relative to the first quarter of 2016, net interest income increased 14.2%.  Excluding the impact of a $0.8 million increase in accretion income, net interest income increased $2.6 million.  This increase resulted from a $4.5 million increase in interest income on loans (excluding the effect of accretion income) due to growth in the average balance of loans, partially offset by a $1.5 million decline in interest income on investment securities due to the sale of the portfolio of CMOs.

Net Interest Margin

Net interest margin for the first quarter of 2017 was 3.87%, compared to 3.70% for the fourth quarter of 2016.  The Company’s net interest margin benefits from accretion income on purchased loan portfolios.  Excluding accretion income, net interest margin was 3.52% for the first quarter of 2017, compared with 3.42% for the fourth quarter of 2016.  The increase in net interest margin excluding accretion income was primarily attributable to an increase in average loan yields.

Relative to the first quarter of 2016, the net interest margin increased from 3.80%, primarily due to an increase in accretion income.  Excluding accretion income, the net interest margin declined slightly from 3.55%, which was primarily attributable to lower average yields on investment securities following the sale of the portfolio of CMOs.

Noninterest Income

Noninterest income for the first quarter of 2017 was $16.3 million, a decrease of 46.4% from $30.5 million for the fourth quarter of 2016.  Excluding the $14.3 million gain on sale of the CMOs recognized in the fourth quarter of 2016, non-interest income was essentially unchanged from the prior quarter.

Commercial FHA revenue for the first quarter of 2017 was $6.7 million, an increase of 80.8% from $3.7 million in the fourth quarter of 2016.  The Company originated $216.9 million in rate lock commitments during the first quarter of 2017, compared to $159.0 million in the prior quarter.  Compared to the first quarter of 2016, commercial FHA revenue increased 2.0%.

Residential mortgage banking revenue for the first quarter of 2017 was $2.9 million, a decrease of 53.3% from $6.2 million in the fourth quarter of 2016.  The decrease was attributable to the recapture of previously recorded mortgage servicing rights (“MSR”) impairment totaling $3.6 million that positively impacted residential mortgage banking revenue in the fourth quarter of 2016.  Compared to the first quarter of 2016, residential mortgage banking revenue increased 160.1%, primarily due to MSR impairment charges recorded in the prior year period.

Wealth management revenue for the first quarter of 2017 was $2.9 million, an increase of 15.1% from $2.5 million in the fourth quarter of 2016.  The increase was attributable to the full quarter impact of the increase in assets under administration resulting from the acquisition of Sterling Trust in November 2016.  Compared to the first quarter of 2016, wealth management revenue increased 60.9%, which was attributable to 9% organic growth in assets under management and the acquisition of Sterling Trust.

Relative to the first quarter of 2016, noninterest income increased 29.4% from $12.6 million.  The increase was primarily due to higher residential mortgage banking and wealth management revenue, while commercial FHA revenue was consistent with the prior year period.

Noninterest Expense

Noninterest expense for the first quarter of 2017 was $30.8 million, compared with $34.1 million for the fourth quarter of 2016.  Noninterest expense for the first quarter of 2017 included $1.3 million of integration and acquisition-related expenses, while noninterest expense for the fourth quarter of 2016 included $2.1 million in charges related to the Company’s branch network optimization actions and $1.6 million in other integration and acquisition-related expenses.  Excluding these expenses, noninterest expense decreased $0.9 million or 3.0% from the prior quarter.  The decrease was attributable to minor declines across most of the Company’s major expense line items.

Relative to the first quarter of 2016, noninterest expense excluding integration and acquisition-related expenses increased 8.1% from $27.3 million.  The increase was primarily due to higher salaries and benefits expense, as well as higher professional fees. 

Income Tax Expense

Income tax expense was $3.0 million for the first quarter of 2017, compared to $8.3 million for the fourth quarter of 2016.  The effective tax rate for the first quarter of 2017 was 26.0%, compared to 41.8% in the prior quarter.  The 26.0% effective tax rate used for the first quarter of 2017 reflects the recognition of tax benefits related to the exercise of employee stock options and the recent establishment of a captive insurance subsidiary.

Loan Portfolio

Total loans outstanding were $2.45 billion at March 31, 2017, compared with $2.32 billion at December 31, 2016, representing an annualized increase of 23.3%.  Over the prior 12 month period, total loans increased 21.8% from $2.02 billion at March 31, 2016.  The $135.0 million increase in the loan portfolio from December 31, 2016 was primarily driven by a $67.1 million increase in consumer loans, a $27.6 million increase in commercial real estate loans, a $23.7 million increase in residential real estate loans, and a $17.6 million increase in commercial loans.

Deposits

Total deposits were $2.53 billion at March 31, 2017, compared with $2.40 billion at December 31, 2016, and $2.39 billion at March 31, 2016.  The increase was primarily driven by growth in checking accounts, money market accounts and brokered deposits.

Asset Quality

Non-performing loans totaled $28.9 million, or 1.18% of total loans, at March 31, 2017, compared with $31.6 million, or 1.36% of total loans, at December 31, 2016, and $18.8 million, or 0.93% of total loans, at March 31, 2016.  

Net charge-offs for the first quarter of 2017 were $0.6 million, or 0.10% of average loans on an annualized basis. 

The Company recorded a provision for loan losses of $1.5 million for the first quarter of 2017, primarily reflecting the growth in the loan portfolio.

The Company’s allowance for loan losses was 0.64% of total loans and 54.6% of non-performing loans at March 31, 2017, compared with 0.64% and 47.0%, respectively, at December 31, 2016.  Including the fair market value discounts recorded in connection with acquired loan portfolios, the allowance for loan losses to total loans ratio was 0.92% at March 31, 2017, compared with 1.02% at December 31, 2016.

Capital

At March 31, 2017, the Company exceeded all regulatory capital requirements under Basel III and was considered to be a ‘‘well-capitalized’’ financial institution, as summarized in the following table:

  March 31, 2017 Well Capitalized
 Regulatory Requirements 
 Total capital to risk-weighted assets13.48%10.00%  
 Tier 1 capital to risk-weighted assets10.97%8.00%  
 Tier 1 leverage ratio9.61%5.00%  
 Common equity Tier 1 capital9.10%6.50%  
 Tangible common equity to tangible assets  8.29NA   
    

Conference Call, Webcast and Slide Presentation

The Company will host a conference call and webcast at 7:30 a.m. Central Time on Friday, April 28, 2017 to discuss its financial results.  The call can be accessed via telephone at (877) 516-3531 (passcode: 3106625).  A recorded replay can be accessed through May 5, 2017 by dialing (855) 859-2056; passcode: 3106625.

A slide presentation relating to the first quarter 2017 results will be accessible prior to the scheduled conference call.  The slide presentation and webcast of the conference call can be accessed on the Webcasts and Presentations page of the Company’s investor relations website.

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. Midland had assets of approximately $3.4 billion, and its Midland Wealth Management Group had assets under administration of approximately $1.9 billion as of March 31, 2017.  Midland provides a full range of commercial and consumer banking products and services, merchant credit card services, trust and investment management, and insurance and financial planning services. In addition, commercial equipment leasing services are provided through Heartland Business Credit, and multi-family and healthcare facility FHA financing is provided through Love Funding, Midland's non-bank subsidiaries. Midland has more than 70 locations across the United States. For additional information, visit www.midlandsb.com or follow Midland on LinkedIn at 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 accounting principles generally accepted in the United States (“GAAP”).   These non-GAAP financial measures include “Adjusted Earnings,” “Adjusted Diluted Earnings Per Share,” “Adjusted Return on Average Assets,” “Adjusted Return on Average Shareholders’ Equity,”  “Adjusted Return on Average Tangible Common Equity,” “Yield on Loans Excluding Accretion Income,” “Net Interest Margin Excluding Accretion Income,” “Tangible Common Equity to Tangible Assets,” “Tangible Book Value Per Share” and “Return on Average Tangible Common Equity.” The Company believes that 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.

Forward-Looking Statements

Readers should note that in addition to the historical information contained herein, this press release includes "forward-looking statements," including but not limited to statements about the Company’s expected loan production, operating expenses and future earnings levels including with respect to the planned acquisition of Centrue Financial Corporation.  These statements are subject to many risks and uncertainties, including changes in interest rates and other general economic, business and political conditions, including changes in the financial markets; changes in business plans as circumstances warrant; 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" or "continue," or similar terminology. Any forward-looking statements presented herein are made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

  
  
MIDLAND STATES BANCORP, INC. 
CONSOLIDATED FINANCIAL SUMMARY (unaudited) 
                     
  For the Quarter Ended
  March 31,  December 31,  September 30,  June 30,  March 31, 
(dollars in thousands, except per share data) 2017  2016  2016  2016  2016
Earnings Summary                    
Net interest income $27,461  $25,959  $27,265  $27,989  $24,041 
Provision for loan losses  1,533   2,445   1,392   629   1,125 
Noninterest income  16,330   30,486   14,937   14,016   12,618 
Noninterest expense  30,785   34,090   28,657   30,904   27,638 
Income before income taxes  11,473   19,910   12,153   10,472   7,896 
Income taxes  2,983   8,327   4,102   3,683   2,777 
Net income $8,490  $11,583  $8,051  $6,789  $5,119 
                     
Diluted earnings per common share $0.52  $0.72  $0.51  $0.50  $0.42 
Weighted average shares outstanding - diluted  16,351,637   16,032,016   15,858,273   13,635,074   12,229,293 
Return on average assets  1.05%  1.44%  1.03%  0.89%  0.70%
Return on average shareholders' equity  10.58%  14.05%  10.04%  10.18%  8.70%
Return on average tangible common shareholders' equity  12.78%  16.84%  12.01%  12.67%  11.22%
Net interest margin  3.87%  3.70%  4.00%  4.20%  3.80%
Efficiency ratio  66.26%  76.64%  64.56%  66.46%  67.72%
                     
Adjusted Earnings Performance Summary                    
Adjusted earnings $9,436  $6,302  $8,277  $7,106  $5,768 
Adjusted diluted earnings per common share $0.57  $0.39  $0.52  $0.52  $0.47 
Adjusted return on average assets  1.17%  0.78%  1.06%  0.93%  0.79%
Adjusted return on average shareholders' equity  11.76%  7.64%  10.33%  10.66%  9.80%
Adjusted return on average tangible common shareholders' equity  14.20%  9.16%  12.35%  13.27%  12.64%
Net interest margin excluding accretion income  3.52%  3.42%  3.66%  3.52%  3.55%

 

                    
MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
 
  For the Quarter Ended
  March 31,  December 31,  September 30,  June 30,  March 31, 
(in thousands, except per share data) 2017  2016  2016  2016  2016
Net interest income:                   
Total interest income $31,839  $29,981  $31,186  $32,115   $27,967 
Total interest expense  4,378   4,022   3,921   4,126    3,926 
Net interest income  27,461   25,959   27,265   27,989    24,041 
Provision for loan losses  1,533   2,445   1,392   629    1,125 
Net interest income after provision for loan losses  25,928   23,514   25,873   27,360    22,916 
Noninterest income:                   
Commercial FHA revenue  6,695   3,704   3,260   8,538    6,562 
Residential mortgage banking revenue  2,916   6,241   4,990   1,037    1,121 
Wealth management revenue  2,872   2,495   1,941   1,870    1,785 
Service charges on deposit accounts  892   988   1,044   965    907 
Interchange revenue  977   921   920   945    964 
FDIC loss sharing expense  -   -   -   (1,608)   (53)
Gain on sales of investment securities, net  67   14,387   39   72    204 
Other-than-temporary impairment on investment securities  -   -   -   -    (824)
Other income  1,911   1,750   2,743   2,197    1,952 
Total noninterest income  16,330   30,486   14,937   14,016    12,618 
Noninterest expense:                   
Salaries and employee benefits  17,115   17,326   16,568   17,012    15,387 
Occupancy and equipment  3,184   3,266   3,271   3,233    3,310 
Data processing  2,796   2,828   2,586   2,624    2,620 
Professional  2,992   2,898   1,877   1,573    1,701 
Amortization of intangible assets  525   534   514   519    580 
Other  4,173   7,238   3,841   5,943    4,040 
Total noninterest expense  30,785   34,090   28,657   30,904    27,638 
Income before income taxes  11,473   19,910   12,153   10,472    7,896 
Income taxes  2,983   8,327   4,102   3,683    2,777 
Net income  $8,490  $11,583  $8,051  $6,789   $5,119 
                    
Basic earnings per common share $0.54  $0.74  $0.51  $0.51   $0.43 
Diluted earnings per common share $0.52  $0.72  $0.51  $0.50   $0.42 

 

                     
MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                     
  At Quarter Ended
  March 31,  December 31,  September 30,  June 30,  March 31, 
(in thousands) 2017  2016  2016  2016  2016
Assets                    
Cash and cash equivalents $218,096   $190,716   $228,030   $123,366   $162,416  
Investment securities available-for-sale at fair value  259,332    246,339    252,212    238,781    232,074  
Investment securities held to maturity at amortized cost  76,276    78,672    82,941    84,756    88,085  
Loans  2,454,950    2,319,976    2,312,778    2,161,041    2,016,034  
Allowance for loan losses  (15,805)   (14,862)   (15,559)   (14,752)   (14,571) 
Total loans, net  2,439,145    2,305,114    2,297,219    2,146,289    2,001,463  
Loans held for sale at fair value  39,900    70,565    61,363    101,782    103,365  
Premises and equipment, net  66,914    66,692    70,727    72,147    72,421  
Other real estate owned  3,680    3,560    4,828    3,540    4,740  
Mortgage servicing rights at lower of cost or market  68,557    68,008    64,689    62,808    65,486  
Intangible assets  8,633    7,187    5,391    5,905    6,424  
Goodwill  50,807    48,836    46,519    46,519    46,519  
Cash surrender value of life insurance policies  74,806    74,226    74,276    73,665    53,173  
Other assets  67,431    73,808    59,532    62,226    61,914  
Total assets $3,373,577   $3,233,723   $3,247,727   $3,021,784   $2,898,080  
                     
Liabilities and Shareholders' Equity                    
Noninterest bearing deposits $528,021   $562,333   $629,113   $528,966   $546,664  
Interest bearing deposits  1,999,455    1,842,033    1,790,919    1,825,586    1,843,046  
Total deposits  2,527,476    2,404,366    2,420,032    2,354,552    2,389,710  
Short-term borrowings  124,035    131,557    138,289    125,014    101,649  
FHLB advances and other borrowings  250,353    237,518    237,543    97,588    40,133  
Subordinated debt  54,532    54,508    54,484    54,459    61,903  
Trust preferred debentures  37,496    37,405    37,316    37,229    37,142  
Other liabilities  45,352    46,599    38,314    36,674    29,157  
Total liabilities  3,039,244    2,911,953    2,925,978    2,705,516    2,659,694  
Total shareholders’ equity  334,333    321,770    321,749    316,268    238,386  
Total liabilities and shareholders’ equity $3,373,577   $3,233,723   $3,247,727   $3,021,784   $2,898,080  

 

 
MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                     
  As of
  March 31,  December 31,  September 30,  June 30,  March 31, 
(in thousands) 2017  2016  2016  2016  2016
Loan Portfolio                    
Commercial loans $475,408  $457,827  $545,069  $489,228  $484,618 
Commercial real estate loans  997,200   969,615   956,298   929,399   897,099 
Construction and land development loans  171,047   177,325   163,900   181,667   159,507 
Residential real estate loans  277,402   253,713   216,935   179,184   158,221 
Consumer loans  337,081   270,017   248,131   205,060   158,938 
Lease financing loans  196,812   191,479   182,445   176,503   157,651 
Total loans $2,454,950  $2,319,976  $2,312,778  $2,161,041  $2,016,034 
                     
                     
Deposit Portfolio                    
Noninterest-bearing demand deposits $528,021  $562,333  $629,113  $528,966  $546,664 
Checking accounts  751,193   656,248   658,021   627,003   612,475 
Money market accounts  415,322   399,851   366,193   374,537   415,130 
Savings accounts  169,715   166,910   162,742   164,792   163,163 
Time deposits  394,508   400,304   420,779   431,173   433,386 
Brokered deposits  268,717   218,720   183,184   228,081   218,892 
Total deposits $2,527,476  $2,404,366  $2,420,032  $2,354,552  $2,389,710 

 

 
MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                     
  For the Quarter Ended
  March 31,  December 31,  September 30,  June 30,  March 31, 
(in thousands) 2017  2016  2016  2016  2016
Average Balance Sheets                    
Cash and cash equivalents $163,595  $140,439  $154,764  $232,362  $223,951 
Investment securities  328,880   315,511   329,900   321,424   311,806 
Loans  2,361,380   2,299,115   2,177,517   2,092,248   2,004,191 
Loans held for sale  73,914   86,665   90,661   79,566   59,377 
Nonmarketable equity securities  20,047   18,927   18,365   16,800   15,461 
Total interest-earning assets  2,947,816   2,860,657   2,771,207   2,742,400   2,614,786 
Non-earning assets  336,761   337,566   329,504   324,880   317,728 
Total assets $3,284,577  $3,198,223  $3,100,711  $3,067,280  $2,932,514 
Interest-bearing deposits $1,896,569  $1,838,760  $1,803,189  $1,844,493  $1,832,599 
Short-term borrowings  143,583   151,191   134,052   114,651   120,753 
FHLB advances and other borrowings  248,045   183,614   165,774   185,195   99,499 
Subordinated debt  54,518   54,495   54,470   61,677   61,878 
Trust preferred debentures  37,443   37,357   37,266   37,182   37,094 
Total interest-bearing liabilities  2,380,158   2,265,417   2,194,751   2,243,198   2,151,823 
Noninterest-bearing deposits  525,868   562,958   550,816   522,632   511,019 
Other noninterest-bearing liabilities  53,109   41,962   36,284   33,309   32,935 
Shareholders' equity  325,442   327,886   318,860   268,141   236,737 
Total liabilities and shareholders' equity $3,284,577  $3,198,223  $3,100,711  $3,067,280  $2,932,514 
                     
Yields                    
Cash and cash equivalents  0.77%  0.53%  0.50%  0.50%  0.50%
Investment securities  3.21%  3.10%  5.02%  5.15%  5.34%
Loans  4.91%  4.65%  4.83%  5.24%  4.70%
Loans held for sale  4.22%  4.22%  3.77%  4.65%  4.22%
Nonmarketable equity securities  4.41%  3.85%  3.77%  4.16%  4.06%
Total interest-earning assets  4.47%  4.26%  4.57%  4.81%  4.40%
Interest-bearing deposits  0.51%  0.48%  0.48%  0.50%  0.49%
Short-term borrowings  0.23%  0.22%  0.24%  0.24%  0.23%
FHLB advances and other borrowings  0.93%  0.78%  0.73%  0.56%  0.55%
Subordinated debt  6.40%  6.41%  6.41%  6.84%  6.84%
Trust preferred debentures  5.12%  4.99%  5.03%  4.95%  4.80%
Total interest-bearing liabilities  0.75%  0.71%  0.71%  0.74%  0.73%
Net interest margin  3.87%  3.70%  4.00%  4.20%  3.80%


  
MIDLAND STATES BANCORP, INC. 
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) 
                      
  As of and for the Quarter Ended 
  March 31,  December 31,  September 30,  June 30,  March 31,  
(dollars in thousands, except per share data) 2017  2016  2016  2016  2016  
Asset Quality                     
Loans 30-89 days past due $14,075  $10,767  $10,318  $10,453  $6,616  
Nonperforming loans  28,933   31,603   29,926   18,430   18,787  
Nonperforming assets  31,684   34,550   34,304   21,469   22,312  
Net charge-offs   590   3,142   585   448   2,542  
Loans 30-89 days past due to total loans  0.57%  0.46%  0.45%  0.48%  0.33% 
Nonperforming loans to total loans  1.18%  1.36%  1.29%  0.85%  0.93% 
Nonperforming assets to total assets  0.94%  1.07%  1.06%  0.71%  0.77% 
Allowance for loan losses to total loans  0.64%  0.64%  0.67%  0.68%  0.72% 
Allowance for loan losses to nonperforming loans  54.62%  47.03%  51.99%  80.04%  77.56% 
Net charge-offs to average loans  0.10%  0.54%  0.11%  0.09%  0.51% 
                      
Wealth Management                     
Trust assets under administration $1,869,314  $1,658,235  $1,235,132  $1,198,044  $1,189,693  
                      
Market Data                     
Book value per share at period end $21.19  $20.78  $20.89  $20.53  $20.19  
Tangible book value per share at period end $17.42  $17.16  $17.52  $17.13  $15.71  
Market price at period end $34.39  $36.18  $25.34  $21.69  $N/A  
Shares outstanding at period end  15,780,651   15,483,499   15,404,423   15,402,946   11,804,779  
                      
Capital                     
Total capital to risk-weighted assets  13.48%  13.85%  13.53%  13.91%  11.67% 
Tier 1 capital to risk-weighted assets  10.97%  11.27%  10.94%  11.23%  8.48% 
Tier 1 leverage ratio  9.61%  9.76%  9.82%  9.77%  7.25% 
Tier 1 common capital to risk-weighted assets  9.10%  9.35%  9.03%  9.24%  6.40% 
Tangible common equity to tangible assets  8.29%  8.36%  8.44%  8.89%  6.52% 

 

 
MIDLAND STATES BANCORP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
                     
  For the Quarter Ended
  March 31,  December 31,  September 30,  June 30,  March 31, 
(dollars in thousands, except per share data) 2017  2016  2016  2016  2016
Adjusted Earnings Reconciliation                    
Income before income taxes - GAAP $11,473   $19,910   $12,153   $10,472   $7,896  
Adjustments to other income:                    
Gain on sales of investment securities, net 67    14,387    39    72    204  
Other than-temporary-impairment on investment securities -    -    -    -    (824) 
Reversal of contingent consideration accrual -    -    -    350    -  
 Total adjusted other income  67    14,387    39    422    (620) 
Adjustments to other expense:                    
Expenses associated with payoff of subordinated debt -    -    -    511    -  
Net expense from loss share termination agreement -    351    -    -    -  
Branch network optimization plan charges -    2,099    -    -    -  
Integration and acquisition expenses  1,346    1,200    352    406    385  
 Total adjusted other expense  1,346    3,650    352    917    385  
Adjusted earnings pre tax 12,752    9,173    12,466    10,967    8,901  
Adjusted earnings tax 3,316    2,871    4,189    3,861    3,133  
Adjusted earnings - non-GAAP $9,436   $6,302   $8,277   $7,106   $5,768  
Adjusted diluted EPS $0.57   $0.39   $0.52   $0.52   $0.47  
Adjusted return on average assets  1.17 %  0.78 %  1.06 %  0.93 %  0.79 %
Adjusted return on average shareholders' equity  11.76 %  7.64 %  10.33 %  10.66 %  9.80 %
Adjusted return on average tangible common equity  14.20 %  9.16 %  12.35 %  13.27 %  12.64 %
                     
                     
Yield on Loans                    
Reported yield on loans  4.91 %  4.65 %  4.83 %  5.24 %  4.70 %
Effect of accretion income on acquired loans  (0.43)%  (0.33)%  (0.43)%  (0.88)%  (0.31)%
Yield on loans excluding accretion income  4.48 %  4.32 %  4.40 %  4.36 %  4.39 %
                     
Net Interest Margin                    
Reported net interest margin  3.87 %  3.70 %  4.00 %  4.20 %  3.80 %
Effect of accretion income on acquired loans  (0.35)%  (0.28)%  (0.34)%  (0.68)%  (0.25)%
Net interest margin excluding accretion income  3.52 %  3.42 %  3.66 %  3.52 %  3.55 %

 

 
MIDLAND STATES BANCORP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
                     
                     
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) 2017  2016  2016  2016  2016
                     
Shareholders' Equity to Tangible Common Equity                    
Total shareholders' equity—GAAP $334,333   $321,770   $321,749   $316,268   $238,386  
Adjustments:                    
  Goodwill  (50,807)   (48,836)   (46,519)   (46,519)   (46,519) 
  Other intangibles  (8,633)   (7,187)   (5,391)   (5,905)   (6,424) 
Tangible common equity $274,893   $265,747   $269,839   $263,844   $185,443  
                     
Total Assets to Tangible Assets:                    
Total assets—GAAP  3,373,577    3,233,723    3,247,727    3,021,784    2,898,080  
Adjustments:                    
  Goodwill  (50,807)   (48,836)   (46,519)   (46,519)   (46,519) 
  Other intangibles  (8,633)   (7,187)   (5,391)   (5,905)   (6,424) 
Tangible assets $3,314,137   $3,177,700   $3,195,817   $2,969,360   $2,845,137  
                     
Common Shares Outstanding  15,780,651    15,483,499    15,404,423    15,402,946    11,804,779  
                     
Tangible Common Equity to Tangible Assets  8.29 %  8.36 %  8.44 %  8.89 %  6.52 %
Tangible Book Value Per Share $17.42   $17.16   $17.52   $17.13   $15.71  
                     
                     
Return on Average Tangible Common Equity (ROATCE)                 
  As of 
  March 31,  December 31,  September 30,  June 30,  March 31, 
(in thousands) 2017  2016  2016  2016  2016
                     
Net Income $8,490   $11,583   $8,051   $6,789   $5,119  
                     
Average total shareholders' equity—GAAP $325,442   $327,886   $318,860   $268,141   $236,737  
Adjustments:                    
  Goodwill  (48,836)   (46,594)   (46,519)   (46,519)   (46,519) 
  Other intangibles  (7,144)   (7,718)   (5,656)   (6,184)   (6,740) 
Average tangible common equity $269,462   $273,574   $266,685   $215,438   $183,478  
ROATCE  12.78 %  16.84 %  12.01 %  12.67 %  11.22 %
                     

            

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