EXHIBIT 99.1
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 assets | 13.48 | % | 10.00 | % | ||
Tier 1 capital to risk-weighted assets | 10.97 | % | 8.00 | % | ||
Tier 1 leverage ratio | 9.61 | % | 5.00 | % | ||
Common equity Tier 1 capital | 9.10 | % | 6.50 | % | ||
Tangible common equity to tangible assets | 8.29 | % | 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, 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 | % | |||||||||||||||
CONTACTS:
Jeffrey G. Ludwig, Exec. V.P., at jludwig@midlandsb.com or (217) 342-7321
Kevin L. Thompson, Chief Financial Officer, at kthompson@midlandsb.com or (217) 342-7321
Douglas J. Tucker, Sr. V.P., Corporate Counsel, at dtucker@midlandsb.com or (217) 342-7321