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Midland States Bancorp, Inc. Announces 2016 Third Quarter Results

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Third Quarter 2016 Summary

  • Net income of $8.1 million, or $0.51 diluted earnings per share

  • Total loans increased $152 million to $2.31 billion at September 30, 2016

  • Average loans increased $96 million, or 17.7% annualized

  • Non-interest income of $14.9 million, or 35.4% of total revenue

  • Return on average assets of 1.03%; Return on average equity of 10.04%

EFFINGHAM, Ill., Oct. 27, 2016 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (NASDAQ: MSBI) (the "Company") today reported net income of $8.1 million, or $0.51 diluted earnings per share, for the third quarter of 2016, compared with net income of $6.8 million, or $0.50 diluted earnings per share, for the second quarter of 2016, and net income of $3.4 million, or $0.28 diluted earnings per share, for the third quarter of 2015. 

"We delivered a solid quarter driven by well-diversified loan production and improved efficiencies," said Leon J. Holschbach, President and Chief Executive Officer of the Company.  "As a result of this performance, we were able to generate a higher level of earnings and an improvement in our return on average assets.

"We had excellent growth across the loan portfolio with double-digit annualized increases in the commercial real estate, residential real estate, consumer and equipment leasing portfolios.  We also continued to generate a high level of non-interest income with solid contributions from our residential mortgage banking and wealth management businesses.  This offset a light quarter in the commercial FHA business as we had relatively few loans in the latter stages of the pipeline during the third quarter.

"We continue to see strong loan demand throughout our markets.  As we continue to generate quality balance sheet growth and maintain disciplined expense control, we expect to see a continuation of the positive trends in the business going forward," said Mr. Holschbach.

Net Interest Income

Net interest income for the third quarter of 2016 was $27.3 million, a decrease of 2.6% from $28.0 million for the second quarter of 2016.  The Company's net interest income benefits from accretion income associated with purchased loan portfolios.  Accretion income totaled $2.6 million for the third quarter of 2016, compared with $4.9 million for the second quarter of 2016.  The reduction in accretion income offset the impact of higher average loan balances in the third quarter of 2016.

Relative to the third quarter of 2015, net interest income increased $1.8 million due to an increase in average loan balances.

Net Interest Margin

Net interest margin for the third quarter of 2016 was 4.00%, compared to 4.20% for the second quarter of 2016.  The Company's net interest margin benefits from accretion income on purchased loan portfolios.  Excluding accretion income, net interest margin was 3.66% for the third quarter of 2016, compared with 3.52% for the second quarter of 2016.  The increase in net interest margin excluding accretion income was primarily attributable to a favorable shift in the mix of both earning assets and funding liabilities within the balance sheet.  Average cash balances decreased by $77.6 million and was redeployed into higher yielding loans and investments in the third quarter compared to the second quarter, while at the same time interest bearing liabilities decreased and funding shifted to increased levels of both noninterest bearing deposits and equity.

Relative to the third quarter of 2015, the net interest margin declined from 4.17%, primarily due to lower average yields on loans and investment securities.  Excluding accretion income, net interest margin declined from 3.83%, which was primarily attributable to lower average yields on loans and investment securities and an increase in cost of funds.

Noninterest Income

Noninterest income for the third quarter of 2016 was $14.9 million, an increase of 6.6% from $14.0 million for the second quarter of 2016.  The increase was primarily attributable to higher residential mortgage banking revenue and the absence of FDIC loss-sharing expense.  This was partially offset by lower commercial FHA revenue.

Commercial FHA revenue for the third quarter of 2016 was $3.3 million, a decrease of 61.8% from $8.5 million in the second quarter of 2016.  The Company originated $73.4 million in rate lock commitments during the third quarter of 2016, compared to $281.2 million in the prior quarter.  The Company also recorded mortgage servicing rights impairment of $1.1 million in the third quarter of 2016.

Residential mortgage banking revenue for the third quarter of 2016 was $5.0 million, an increase from $1.0 million in the second quarter of 2016.  During the second quarter of 2016, the Company recorded mortgage servicing rights impairment of $3.0 million, which substantially reduced the residential mortgage banking revenue recognized in that quarter.

Relative to the third quarter of 2015, noninterest income increased 3.3% from $14.5 million.  The increase was primarily due to higher residential mortgage banking and wealth management revenue, which was partially offset by lower commercial FHA revenue.

Noninterest Expense

Noninterest expense for the third quarter of 2016 was $28.7 million, a decrease of 7.2% from $30.9 million for the second quarter of 2016.  The decrease was primarily driven by lower salaries and benefits expense.  Non-interest expense in the second quarter of 2016 also included a $511,000 write-off of accounting discount related to the early payoff of subordinated debt, while no similar write-off occurred in the third quarter of 2016.

Relative to the third quarter of 2015, noninterest expense increased 3.0% from $27.8 million.  The increase was primarily due to higher salaries and benefits expense resulting from an increase in FTEs over the past 12 months. 

Loan Portfolio

Total loans outstanding were $2.31 billion at September 30, 2016, compared with $2.16 billion at June 30, 2016, and $1.97 billion at September 30, 2015.  The $151.7 million increase in the loan portfolio from June 30, 2016 was driven primarily by a $55.8 million increase in commercial loans, a $26.9 million increase in commercial real estate loans, a $37.8 million increase in residential real estate loans, a $43.1 million increase in consumer loans, and a $5.9 million increase in equipment lease financing loans.  These increases were partially offset by a $17.8 million decrease in construction and land development loans, most of which migrated to permanent financing in the commercial real estate portfolio.

Approximately $73 million of the increase in total loans outstanding at September 30, 2016 compared to June 30, 2016 was related to advances on a warehouse line of credit to a customer that originates government-guaranteed commercial FHA loans.  The advances on this warehouse line of credit are short-term in nature. 

Deposits

Total deposits were $2.42 billion at September 30, 2016, compared with $2.35 billion at June 30, 2016, and $2.30 billion at September 30, 2015.  The increase in total deposits from June 30, 2016 was primarily due to an increase in demand deposits, partially offset by a decrease in time and brokered deposits.  Approximately $101.4 million of the increase in demand deposits during the third quarter of 2016 was attributable to commercial and residential mortgage servicing accounts.  Of this increase, approximately $82.3 million represents new loan origination and modification payments received in the commercial FHA banking business that were remitted to GNMA in October 2016.

Asset Quality

Non-performing loans totaled $29.9 million, or 1.29% of total loans, at September 30, 2016, compared with $18.4 million, or 0.85% of total loans, at June 30, 2016.  The increase in non-performing loans is primarily due to one commercial real estate loan that was classified as a troubled debt restructuring ("TDR") during the quarter. 

Net charge-offs for the third quarter of 2016 were $585,000, or 0.11% of average loans on an annualized basis.

The Company recorded a provision for loan losses of $1.4 million for the third quarter of 2016, primarily to reflect the growth in the loan portfolio.

The Company's allowance for loan losses was 0.67% of total loans and 52.0% of non-performing loans at September 30, 2016, compared with 0.68% and 80.0%, respectively, at June 30, 2016.  Including the fair market value discounts recorded in connection with acquired loan portfolios, the allowance for loan losses to total loans ratio was 1.06% at September 30, 2016, compared with 1.13% at June 30, 2016.

Capital

At September 30, 2016, 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:

 September 30,
2016
Well Capitalized
Regulatory Requirements
Total capital to risk-weighted assets 13.53% 10.00%
Tier 1 capital to risk-weighted assets 10.94% 8.00%
Tier 1 leverage ratio 9.82% 5.00%
Tier 1 common capital to risk-weighted assets 9.03% 6.50%
Tangible common equity to tangible assets 8.44% NA 

Conference Call, Webcast and Slide Presentation

The Company will host a conference call and webcast at 7:30 a.m. Central Time on Friday, October 28, 2016.  During the call, management will review the third quarter results and operational highlights. The call can be accessed via telephone at (877) 516-3531 (passcode: 85446301).  A recorded replay can be accessed through November 3, 2016 by dialing (855) 859-2056; passcode: 85446301.

A slide presentation relating to the third quarter 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 $3.2 billion, and its Midland Wealth Management Group had assets under administration of approximately $1.2 billion as of September 30, 2016.  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 80 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 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, 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 
  September 30,  June 30,  March 31,  December 31,  September 30, 
(in thousands, except per share data) 2016  2016  2016  2015  2015
Earnings Summary                    
Net interest income $ 27,265   $27,989  $ 24,041   $26,452  $25,437 
Provision for loan losses   1,392    629    1,125    1,052   6,699 
Noninterest income   14,937    14,016    12,618    12,799   14,464 
Noninterest expense   28,663    30,903    27,639    27,692   27,823 
Income before income taxes   12,147    10,473    7,895    10,507   5,379 
Income taxes   4,102    3,683    2,777    2,811   1,928 
Net income   8,045    6,790    5,118    7,696   3,451 
Net income (loss) attributable to noncontrolling interest in subsidiaries   (6)   1    (1)   1   6 
Net income attributable to Midland States Bancorp, Inc. $ 8,051   $6,789  $ 5,119   $7,695  $3,445 
                     
Diluted earnings per common share $ 0.51   $0.50  $ 0.42   $0.63  $0.28 
Weighted average shares outstanding - diluted   15,858,273    13,635,074    12,229,293    12,181,664   12,130,529 
Return on average assets   1.03 %  0.89%   0.70 %  1.06%  0.49%
Return on average shareholders' equity   10.04 %  10.18%   8.69 %  13.19%  5.88%
Return on average tangible common shareholders' equity   12.01 %  12.67%   11.22 %  17.26%  7.72%
Net interest margin   4.00 %  4.20%   3.80 %  4.19%  4.17%
Efficiency ratio   64.56 %  67.09%   67.73 %  68.83%  64.32%
                     
Adjusted Earnings Performance Summary                    
Adjusted earnings $ 8,269   $7,107  $ 5,767   $7,525  $4,638 
Adjusted diluted earnings per common share $ 0.52   $0.52  $ 0.47   $0.61  $0.38 
Adjusted return on average assets   1.06 %  0.93%   0.79 %  1.04%  0.66%
Adjusted return on average shareholders' equity   10.32 %  10.66%   9.79 %  12.90%  7.92%
Adjusted return on average tangible common shareholders' equity   12.34 %  13.27%   12.64 %  16.77%  10.39%
Net interest margin excluding accretion income   3.66 %  3.52%   3.55 %  3.56%  3.83%
                     

 

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
 
  For the Quarter Ended
  September 30,  June 30,  March 31,  December 31,  September 30, 
(in thousands, except per share data) 2016  2016  2016  2015  2015
Net interest income:                   
Total interest income $ 31,186   $ 32,115   $ 27,967   $ 30,300   $ 28,949 
Total interest expense   3,921     4,126     3,926     3,848     3,512 
Net interest income   27,265     27,989     24,041     26,452     25,437 
Provision for loan losses   1,392     629     1,125     1,052     6,699 
Net interest income after provision for loan losses   25,873     27,360     22,916     25,400     18,738 
Noninterest income:                   
Commercial FHA revenue   3,260     8,538     6,562     3,045     5,914 
Residential mortgage banking revenue   4,990     1,037     1,121     3,328     3,490 
Wealth management revenue   1,941     1,870     1,785     1,831     1,808 
Service charges on deposit accounts   1,044     965     907     979     1,022 
Interchange revenue   920     945     964     858     895 
FDIC loss sharing expense   -     (1,608)    (53)    (212)    (57)
Gain on sales of investment securities, net   39     72     204     33     1 
Other-than-temporary impairment on investment securities   -     -     (824)    -     (299)
Other income   2,743     2,197     1,952     2,937     1,690 
Total noninterest income   14,937     14,016     12,618     12,799     14,464 
Noninterest expense:                   
Salaries and employee benefits   16,568     17,012     15,387     13,725     14,932 
Occupancy and equipment   3,271     3,233     3,310     3,424     3,114 
Data processing   2,586     2,624     2,620     2,546     2,541 
Professional   1,877     1,573     1,701     2,079     2,075 
Amortization of intangible assets   514     519     580     598     597 
Other   3,847     5,942     4,041     5,320     4,564 
Total noninterest expense   28,663     30,903     27,639     27,692     27,823 
Income before income taxes   12,147     10,473     7,895     10,507     5,379 
Income taxes   4,102     3,683     2,777     2,811     1,928 
Net income   8,045     6,790     5,118     7,696     3,451 
Net (loss) income attributable to noncontrolling interest in subsidiaries   (6)    1     (1)    1     6 
Net income attributable to Midland States Bancorp, Inc. $ 8,051   $ 6,789   $ 5,119   $ 7,695   $ 3,445 
                    
Basic earnings per common share $ 0.51   $ 0.51   $ 0.43   $ 0.64   $ 0.29 
Diluted earnings per common share $ 0.51   $ 0.50   $ 0.42   $ 0.63   $ 0.28 
                    

 

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                    
  As of
  September 30,  June 30,  March 31,  December 31,  September 30, 
(in thousands) 2016  2016  2016  2015  2015
Assets                   
Cash and cash equivalents $ 228,030   $ 123,366   $ 162,416   $ 212,475   $ 206,664 
Investment securities available-for-sale at fair value   252,212     238,781     232,074     236,627     211,359 
Investment securities held to maturity at amortized cost   82,941     84,756     88,085     87,521     92,011 
Loans   2,312,778     2,161,041     2,016,034     1,995,589     1,972,844 
Allowance for loan losses   (15,559)    (14,752)    (14,571)    (15,988)    (15,157)
Total loans, net   2,297,219     2,146,289     2,001,463     1,979,601     1,957,687 
Loans held for sale at fair value   61,363     101,782     103,365     54,413     53,032 
Premises and equipment, net   70,727     72,147     72,421     73,133     73,362 
Other real estate owned   4,828     3,540     4,740     5,472     6,471 
Mortgage servicing rights at lower of cost or market   64,689     62,808     65,486     66,651     65,417 
Intangible assets   5,391     5,905     6,424     7,004     7,601 
Goodwill   46,519     46,519     46,519     46,519     47,102 
Cash surrender value of life insurance policies   74,276     73,665     53,173     52,729     52,271 
Other assets   59,532     62,226     61,914     62,679     59,331 
Total assets $ 3,247,727   $ 3,021,784   $ 2,898,080   $ 2,884,824   $ 2,832,308 
                    
Liabilities and Shareholders' Equity                   
Noninterest bearing deposits $ 629,113   $ 528,966   $ 546,664   $ 543,401   $ 512,632 
Interest bearing deposits   1,790,919     1,825,586     1,843,046     1,824,247     1,791,846 
Total deposits   2,420,032     2,354,552     2,389,710     2,367,648     2,304,478 
Short-term borrowings   138,289     125,014     101,649     107,538     108,823 
FHLB advances and other borrowings   237,543     97,588     40,133     40,178     50,225 
Subordinated debt   54,484     54,459     61,903     61,859     61,814 
Trust preferred debentures   37,316     37,229     37,142     37,057     36,973 
Other liabilities   38,273     36,627     28,982     37,488     38,370 
Total liabilities   2,925,937     2,705,469     2,659,519     2,651,768     2,600,683 
Midland States Bancorp, Inc. shareholders' equity   321,749     316,268     238,386     232,880     231,415 
Noncontrolling interest in subsidiaries   41     47     175     176     210 
Total shareholders' equity   321,790     316,315     238,561     233,056     231,625 
Total liabilities and shareholders' equity $ 3,247,727   $ 3,021,784   $ 2,898,080   $ 2,884,824   $ 2,832,308 
                    

 

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                    
  As of
  September 30,  June 30,  March 31,  December 31,  September 30, 
(in thousands) 2016  2016  2016  2015  2015
Loan Portfolio                   
Commercial loans $545,069  $489,228  $484,618  $499,573  $521,983
Commercial real estate loans  956,298   929,399   897,099   876,784   866,027
Construction and land development loans  163,900   181,667   159,507   150,266   131,083
Residential real estate loans  216,935   179,184   158,221   163,224   168,129
Consumer loans  248,131   205,060   158,938   161,512   157,521
Lease financing loans  182,445   176,503   157,651   144,230   128,101
Total loans $2,312,778  $2,161,041  $2,016,034  $1,995,589  $1,972,844
                    
                    
Deposit Portfolio                   
Noninterest-bearing demand deposits $629,113  $528,966  $546,664  $543,401  $512,632
NOW accounts  658,021   627,003   612,475   621,925   623,494
Money market accounts  366,193   374,537   415,130   377,654   350,398
Savings accounts  162,742   164,792   163,163   155,778   154,632
Time deposits  420,779   431,173   433,386   446,621   426,762
Brokered deposits  183,184   228,081   218,892   222,269   236,560
Total deposits $2,420,032  $2,354,552  $2,389,710  $2,367,648  $2,304,478
                    

 

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                     
  For the Quarter Ended 
  September 30,  June 30,  March 31,  December 31,  September 30, 
(in thousands) 2016  2016  2016  2015  2015
Average Balance Sheets                    
Cash and cash equivalents $154,764  $232,362  $223,951  $184,072  $131,272 
Investment securities  348,265   338,224   327,267   345,114   317,886 
Loans  2,268,178   2,171,814   2,063,568   2,039,046   2,032,122 
Total interest-earning assets  2,771,207   2,742,400   2,614,786   2,568,232   2,481,280 
Non-earning assets  329,504   324,880   317,648   312,154   314,959 
Total assets $3,100,711  $3,067,280  $2,932,434  $2,880,386  $2,796,239 
Interest-bearing deposits $1,803,189  $1,844,493  $1,832,599  $1,813,974  $1,733,899 
Short-term borrowings  134,052   114,651   120,753   118,118   121,453 
FHLB advances and other borrowings  165,774   185,195   99,499   48,583   54,056 
Subordinated debt  54,470   61,677   61,878   61,835   62,830 
Trust preferred debentures  37,266   37,182   37,094   37,013   37,083 
Total interest-bearing liabilities  2,194,751   2,243,198   2,151,823   2,079,523   2,009,321 
Noninterest-bearing deposits  550,816   522,632   511,019   529,196   509,259 
Other noninterest-bearing liabilities  36,235   33,188   32,671   40,247   45,379 
Shareholders' equity  318,909   268,262   236,921   231,420   232,280 
Total liabilities and shareholders' equity $3,100,711  $3,067,280  $2,932,434  $2,880,386  $2,796,239 
                     
Yields                    
Cash and cash equivalents  0.50%  0.50%  0.50%  0.27%  0.24%
Investment securities  4.93%  5.12%  5.31%  5.02%  5.33%
Loans  4.79%  5.22%  4.68%  5.15%  4.94%
Total interest-earning assets  4.57%  4.81%  4.40%  4.79%  4.73%
Interest-bearing deposits  0.48%  0.50%  0.49%  0.48%  0.44%
Short-term borrowings  0.24%  0.24%  0.23%  0.20%  0.18%
FHLB advances and other borrowings  0.73%  0.56%  0.55%  0.87%  0.81%
Subordinated debt  6.38%  6.87%  6.87%  6.79%  6.76%
Trust preferred debentures  5.03%  4.95%  4.80%  4.60%  3.97%
Total interest-bearing liabilities  0.71%  0.74%  0.73%  0.73%  0.69%
Net interest margin  4.00%  4.20%  3.80%  4.19%  4.17%
                     

 

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                     
  As of and for the Quarter Ended 
  September 30,  June 30,  March 31,  December 31,  September 30, 
(in thousands, except per share data) 2016  2016  2016  2015  2015
Asset Quality                    
Loans 30-89 days past due $10,318  $10,453  $6,616  $10,120  $11,079 
Nonperforming loans  29,926   18,430   18,787   24,891   24,223 
Nonperforming assets  34,304   21,469   22,312   29,206   30,118 
Net charge-offs  585   448   2,542   220   7,748 
Loans 30-89 days past due to total loans  0.45%  0.48%  0.33%  0.51%  0.56%
Nonperforming loans to total loans  1.29%  0.85%  0.93%  1.25%  1.23%
Nonperforming assets to total assets  1.06%  0.71%  0.77%  1.01%  1.06%
Allowance for loan losses to total loans  0.67%  0.68%  0.72%  0.80%  0.77%
Allowance for loan losses to nonperforming loans  51.99%  80.04%  77.56%  64.23%  62.57%
Net charge-offs to average loans  0.11%  0.09%  0.51%  0.04%  1.57%
                     
Wealth Management                    
Trust assets under administration $1,235,132  $1,198,044  $1,189,693  $1,181,128  $1,145,056 
                     
Market Data                    
Book value per share at period end $20.89  $20.53  $20.19  $19.74  $19.68 
Tangible book value per share at period end $17.52  $17.13  $15.71  $15.20  $15.03 
Market price at period end $25.34  $21.69  $N/A  $N/A  $N/A 
Shares outstanding at period end  15,404,423   15,402,946   11,804,779   11,797,404   11,760,589 
Weighted average shares outstanding:                    
Basic  15,578,703   13,358,289   11,957,381   11,924,072   11,911,414 
Diluted  15,858,273   13,635,074   12,229,293   12,181,664   12,130,529 
                     
Capital                    
Total capital to risk-weighted assets  13.53%  13.91%  11.67%  11.82%  11.43%
Tier 1 capital to risk-weighted assets  10.94%  11.23%  8.48%  8.62%  8.19%
Tier 1 leverage ratio  9.82%  9.77%  7.25%  7.49%  7.41%
Tier 1 common capital to risk-weighted assets  9.03%  9.24%  6.40%  6.50%  6.16%
Tangible common equity to tangible assets  8.44%  8.89%  6.52%  6.33%  6.36%
                     

 

MIDLAND STATES BANCORP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
                     
  For the Quarter Ended 
  September 30,  June 30,  March 31,  December 31,  September 30, 
(in thousands, except per share data) 2016  2016  2016  2015  2015
Adjusted Earnings Reconciliation                    
Income before income taxes - GAAP $ 12,147   $ 10,473   $ 7,895   $ 10,507   $ 5,379  
Adjustments to other income:                    
Gain on sales of investment securities, net  39     72     204     33     1  
Other than-temporary-impairment on investment securities  -     -     (824)    -     (299) 
FDIC loss-sharing expense  -     -     -     (212)    (57) 
Amortization of FDIC indemnification asset, net  -     -     -     (39)    (121) 
Reversal of contingent consideration accrual  -     350     -     -     -  
Other income   -     -     -     -     12  
Total adjusted other income   39     422     (620)    (218)    (464) 
Adjustments to other expense:                    
Expenses associated with payoff of subordinated debt  -     511     -     -     -  
Integration and acquisition expenses   352     406     385     214     898  
Total adjusted other expense   352     917     385     214     898  
Adjusted earnings pre tax  12,460     10,968     8,900     10,939     6,741  
Adjusted earnings tax  4,191     3,861     3,133     3,414     2,103  
Adjusted earnings - non-GAAP $ 8,269   $ 7,107   $ 5,767   $ 7,525   $ 4,638  
Adjusted diluted EPS $ 0.52   $ 0.52   $ 0.47   $ 0.61   $ 0.38  
Adjusted return on average assets   1.06 %   0.93 %   0.79 %   1.04 %   0.66 %
Adjusted return on average shareholders' equity   10.32 %   10.66 %   9.79 %   12.90 %   7.92 %
Adjusted return on average tangible common equity   12.34 %   13.27 %   12.64 %   16.77 %   10.39 %
                     
                     
Yield on Loans                    
Reported yield on loans   4.79 %   5.22 %   4.68 %   5.15 %   4.94 %
Effect of accretion income on acquired loans   (0.41)%   (0.85)%   (0.30)%   (0.78)%   (0.41)%
Yield on loans excluding accretion income   4.38 %   4.37 %   4.38 %   4.37 %   4.53 %
                     
Net Interest Margin                    
Reported net interest margin   4.00 %   4.20 %   3.80 %   4.19 %   4.17 %
Effect of accretion income on acquired loans   (0.34)%   (0.68)%   (0.25)%   (0.63)%   (0.34)%
Net interest margin excluding accretion income   3.66 %   3.52 %   3.55 %   3.56 %   3.83 %
                     

 

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  
  September 30,  June 30,  March 31,  December 31,  September 30, 
(in thousands, except per share data) 2016  2016  2016  2015  2015
                     
Shareholders' Equity to Tangible Common Equity                    
Total shareholders' equity—GAAP $ 321,790   $ 316,315   $ 238,561   $ 233,056   $ 231,625  
Adjustments:                    
Noncontrolling interest in subsidiaries   (41)    (47)    (175)    (176)    (210) 
Goodwill   (46,519)    (46,519)    (46,519)    (46,519)    (47,102) 
Other intangibles   (5,391)    (5,905)    (6,424)    (7,004)    (7,601) 
Tangible common equity $ 269,839   $ 263,844   $ 185,443   $ 179,357   $ 176,712  
                     
Total Assets to Tangible Assets:                    
Total assets—GAAP   3,247,727     3,021,784     2,898,080     2,884,824     2,832,308  
Adjustments:                    
Goodwill   (46,519)    (46,519)    (46,519)    (46,519)    (47,102) 
Other intangibles   (5,391)    (5,905)    (6,424)    (7,004)    (7,601) 
Tangible assets $ 3,195,817   $ 2,969,360   $ 2,845,137   $ 2,831,301   $ 2,777,605  
                     
Common Shares Outstanding   15,404,423     15,402,946     11,804,779     11,797,404     11,760,589  
                     
Tangible Common Equity to Tangible Assets   8.44 %   8.89 %   6.52 %   6.33 %   6.36 %
Tangible Book Value Per Share $ 17.52   $ 17.13   $ 15.71   $ 15.20   $ 15.03  
                     
                     
Return on Average Tangible Common Equity (ROATCE)                 
    
  As of  
  September 30,  June 30,  March 31,  December 31,  September 30, 
(in thousands) 2016  2016  2016  2015  2015
                     
Net Income $ 8,051   $ 6,789   $ 5,119   $ 7,695   $ 3,445  
                     
Average total shareholders' equity—GAAP $ 318,909   $ 268,262   $ 236,921   $ 231,420   $ 232,287  
Adjustments:                    
Noncontrolling interest in subsidiaries   (49)    (121)    (184)    (204)    (207) 
Goodwill   (46,519)    (46,519)    (46,519)    (46,997)    (47,102) 
Other intangibles   (5,656)    (6,184)    (6,740)    (7,324)    (7,917) 
Average tangible common equity $ 266,685   $ 215,438   $ 183,478   $ 176,895   $ 177,061  
ROATCE   12.01 %   12.67 %   11.22 %   17.26 %   7.72 %
                     


CONTACTS: Jeffrey G. Ludwig, Exec. V.P., Chief Financial Officer, at jludwig@midlandsb.com or (217) 342-7321 Douglas J. Tucker, Sr. V.P., Corporate Counsel, at dtucker@midlandsb.com or (217) 342-7321

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