MSBI - Earnings call transcript Q4 2020 | Midland States Bancorp, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by and welcome to the Midland States Bancorp's Fourth Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]. Please be advised that today's call is being recorded. Instructions]. [Operator like call now speaker to hand Mr. today, to would over the your I Financial Profiles. of Rossi Tony Thank you. Please ahead. go

Tony Rossi

Thank you, Bancorp Brandi. for earnings joining Good morning, everyone, today call. the and for Midland States fourth XXXX us quarter thank you

us President Chief Ludwig, Chief Officer. Executive are, Lemke, and Eric from Midland’s and Joining team Financial Jeff management Officer;

this will a presentation slide We as part morning. be using of our discussion

a and copy so Presentations not the you done already, website please to the Relations have download of page Webcast of Midland’s presentation. Investor If visit

Before be The I this like to disclaims materially cause could are remind conference These statements. COVID-XX those from financial Bancorp during which are to call the performance including to different such respect statements uncertainties States condition forward-looking related results available company’s filings, future the any the to we factors by pandemic. with implied made call. that expressed the SEC would Various company results on actual begin, any website. and to obligation or of you involve of update Midland factors contains forward-looking that any forward-looking the discussed the risks and in statements future impact company’s

discussed for be over intended And the as The call to well information Jeff? to comparable directly the reconciliation GAAP management as turn quantitative I that, on with contains measures. which today, would to financial release Additionally, not Jeff. the the other non-GAAP substitute may to like and to the of to available non-GAAP measures. measures, the press supplement, refer are most but GAAP IR website

Jeff Ludwig

the of on earnings call. slide the Midland fourth everyone. morning, three going I'm States Good to to quarter. the start highlights with Welcome

reflected the FHLB charges one-time prepayment Our of to results reported advances. related

per delivered the pandemic. $X.XX those another continuing $XX.X which presented impairment of servicing quarter had challenges performance rights. included by mortgage the commercial million, million We adjusted ongoing or of share, $X.X strong charges, this earnings despite we Excluding

are adjusted reflects prepaying X.XX%, level We've advances had profitability had prepayments This prepaid pretax, weighted These strong one-time will $XX.X we pretax, of which rate million. pre-provision adjusted income X.X%. charge, three resulted back return charge expense represents impairment our approximately million $XXX of which near also overall that an interest restructuring our the assets our these in expense. The needs our years. this in earn Excluding advances pre-provision of margin of net a to three average of longer match we that million of XXXX, term on that by term prepayments our a should positively part reduce two of $X.X we expect were reduce that funding of now we our better impact advances, to interest By interest $X.X to and million over in by producing. points. did we FHLB FHLB basis average

During in advances. term FHLB the added also quarter, we short about $XXX million

clients. our trends driven growth loan higher of was helped quarter level notably most we an number The despite credit term prepayments, the FHLB commercial provide FHA an the strong lines overall are that this continuation drive by quarters, a short fund of performance over a of low increase we to borrowings several lending These increase being expansion to seeing So we past borrowings. interest showing utilized positive the of a cost in income. are our are in net

going in FHA to the group our some these saw warehouse finance the we'll greater increased of forward. XX.X% in equipment continues at and to the as provided annualized Due loans commercial quarter, to lines nature see utilization lines, we perform well, total of lenders. an of Our rate fluctuation balances warehouse

in commercial demand us balances to the enabled grow our first and improved real time we addition, for estate CRE a which In pricing saw on loans, while. quite

sheet, increases balance annualized continue core by the mix, continued liability improvement we of of deposits. largely deposits. reduction at and rate increased see the an driven our side an in a total X.X%, to our cost of deposit This deposits in On in of further resulted

With margin offset assets. loan of we into cost of liquidity keep to PPP the our helped earning our the net the able yields us deposits, income. our redeploy during quarter, some with higher yielding Combined related impact were excess this to demand, strong and on lower excluding earning lower to assets interest stable

are quarter by the larger asset into XX% about with loans declined our at We're some to of Looking end our Combined accrual, loans successfully prior during write-downs we term additional with meaningful continue we the inflow no seeing. of to total minimal required. able overall quality, quarter. encouraged loans of non from by the long be the trends resolve problem new non-accrual

see partial deferred borrowers continue to payments. in our a more to level full or scheduled as loans, We either as decline of returning well

in as their terms We while new are that we these updates financial conditions closer payments. scheduled while business closely And their monitoring full support their put these and and recovers, continually business them moving resuming borrowers to performance. borrowers on will place improve, also trends receive

great and While which performing the we of loans. of regarding to reserve our of trends, stronger total timing non represents of we seeing build loans, are XXX% a encouraging economic now continue recovery. of light coverage, this, there's deal still a In uncertainty X.XX%

our to had PPP in received an end the amount January number Moving forgiveness, loans of our had year. to year, our is that loans we down loans about impact PPP PPP now we'll quarter. update XX the million. at $XXX of of and up the million on to total fourth million these brought $XXX end through slide the of This the the and Through that line efforts provide $XX various on four, items

accelerating prior from million $X.X million program. recognition our fees recognized during fee in PPP the first be remaining loans, With up the forgiveness $X.X the $X.X in recognized This loan fees we fourth left the quarter. from million PPP to quarter, on in

for in loans. PPP new started XX had we've taking program, approximately applications received January million the through of terms $XX and In applications we

Turning which of decline an to quarter. provide on XX% deferrals. in end had At from update the December five, prior a we our loan represented XX, we'll of loan the $XXX million slide deferrals,

Our loan loans. of X% just about represent our total deferrals now

As moving partial borrowers I mentioned, loan. a deferred to at least of payment more we are their

contributor on area Eric? only our living $XX deferral that continues quarter of the result, we As going one $XXX fourth end million, provide additional dropped our amount represent some a deferrals. now to quarter. this to while assisted last do increased full million improvement million $XXX be is from The loans the interest which the to payment the million deferrals in at $XXX point, loans the with Eric of I'm loan details last hotel/motel turn while largest over facilities, sector, to to At from a quarter not seen have call to portion of our performance. total significant to around meaningful deferrals

Eric Lemke

look slide I'm six, take a at we'll and our Jeff. starting portfolio. Thanks, on loan

$XXX Our increased or total the loans from X.X% the to prior million, quarter. end of

impact four increase of run driven the related loans exclude had was our and loans we to quarter. total the or then you by off, primarily the areas. increased prior This forgiveness PPP X.X% million If from $XXX

with increase in Dwight originators, of of FHA of warehouse our First, relationship includes $XXX platform. commercial new the part the which million as entered credit origination sale into Capital to that we lines

finance are real to residential continues $XX commercial Next, a portfolio estate have of loans experience an real has not the areas decline which to million looking a we're slide in estate After provided our manufacturing. effort loans helped increase our On existing the loans. commercial equipment portfolio. resulted that And The strong a equipment in approximately seven, offset of update growth making two on refinance. that, both $XX an in in finance increase increase retain million portfolio, demand these expansion as we relationships an to in in construction to million. finally, and in $XX

XX% portfolio the in And stimulus. some provided deferrals from another borrowers now XX, more the of of temporary of quarter. As PPP all down these round the have million we've now December kind. end our a of funding bridge the an industry, of travel. portfolio, portfolio. decline continuing of evaluating slide end the the tour from programs the have transit an December many in been decline on On deferrals ground to than of borrowers since eight, overview the our XX, At payment work making buses potential payment of the to we of of by We're which partial million other impacted also or in last deferrals, who until represents travel. rebound are quarter. are of prior a we with represent is transportation this which gap deferrals $XX half borrowers in which in temporarily receive this of in this $XX portfolio of hotel/motel eventual loan We're to had operators and Almost XX%

rates at least which positive many and resume occupancy flows cash partial is see to continue payments. We trends in to enabling in them borrowers,

of approximately form loans As end XX, from the of prior interest this some XX% payment, December we of at our other quarter. had portfolio of XX% making the or only, in up deferred

to portfolio on consumer deferred in of continues has We point perform in delinquency and loan slide Looking of million portfolio provided portfolio quarters, past GreenSky. which December the few over X% basis an represents we total relationship half through of stayed the The $X this less well have just as at nine, had have loans we update than the that the loans. XX, to rate of range. XX XX our with the

million In year. to is under stood any $XX The escrow Midlands deficiency escrow end of at at cover addition the in performance, available the strong the account to balances. account the just principal

GreenSky the remained in it this throughout we total XXXX. remain portfolio Our the quarter, relatively during expect in to and balances range flat fourth

Turning non-interest declines and or by was of the deposit deposits take were $XX partially prior at servicing XX, drove an of in and XX.X% to The growth look quarter. deposit improvement bearing flows increases attributable deposits, increased in at deposits accounts. commercial million quarter customer our our in the with The increasing this which to total offset from deposits. from money retail XX.X% we'll mix end Total a to X.X% commercial the market deposits prior quarter. FHA slide deposits

to first costs ahead we to will Looking run quarter, off higher opportunities additional the deposits. have time

a a We have CDs X.XX%. weighted average maturing rate more $XXX of at of little than million

deposit deposits at rates, As we see our renew these positive a current impact on costs. should

our of walk Looking net trends the interest at through we'll margin. XX, and income slide

income to in the increased interest our net margin. due well as X.X% interest higher the net prior balances, from average Our loan as expansion quarter,

quarter, the Aside cost the PPP of of into our income mix some deposits. basis the redeployed yielding our assets, assets an of our higher favorable holdings we margin point as in from cash from with eight a higher benefited recognized along in in earning decline shift

margin income quarter was Our net of the interest PPP for the impact X.XX%. excluding

of be impact of a noted the forward, net bearing expect excluding declines in Going shift income earnings with flat in we our to income. quarter, increases in combined offset interest remain fourth liabilities cost potential will the our from continued PPP margin in by reductions accretion margin interest as additional assets in

slide the fourth in Turning slide a a On quarter. during our increase our without XX, administration. at to the This With full business. first quarter, resulted X.X% we administration in revenue under non-interest increase take XX, origination FHA prior $XXX in the management to rebounding assets commercial assets look platform. was million we'll income. in the at trends we'll our quarter compared under The a markets look higher wealth saw

banking. we of rights, slowdown comparison the We the end a prior Compounding saw at the recorded the servicing to quarter factors and year prior on activity created $X.X Both seasonal see commercial a refinancing a difficult fourth of million in some results quarters. impairment and we in gains mortgage was this also the quarter. mortgage securities decline in normally

just prior in and All largely compared impairment a and was excluded commercial attributable FHA lower XX% to of gains the XX%, resulted are this decline mortgage in the was banking, securities quarter. to the revenue. When decline which non-interest income

non-interest Turning we'll to our XX, review slide expense.

primarily residual mortgage When items charges prepayment were sale a expenses consolidation. small held these by this branch servicing a number a up for are on three expense loss the from FHLB the was excluded, quarter, related including corporate facilities residential a items. to amount Our non-interest fees, and our to bit total and rights quarter, prior impacted due our of of items

to in compensation in the had ability XXXX, made more second communities First, year. of that order one-time to to vacation half the a the rollover in take in of light decision light an of incentive provide We assistance allow employees we an the had to reflect and that recorded accrual increased of time Midland our serve. also foundation the vacation on in And the COVID-XX stronger the the in that we increase to our for rollover. impact performance contribution to COVID-XX impact we

full from XXXX, put of our range the realize As consolidations, expense $XX the to cost in the will per we quarter. quarterly $XX should we start million which savings operating million

XX, trends. slide at our asset to look Turning we'll quality

as non-performing of loans prior million the quarter $XX.X without able problem our longer losses. additional we decreased term some Our material were of the to from resolve loans end any

other which in accounted loans non minimal also real We estate the and new also transferred had decline inflow, to performing some for loans. down

for as net charge Our basis had which of for loan quarter, to recorded prior portfolios. declined general allowance a We credit slide we reserves the reflects XX, from points change and estate quarter, XXst, real growth million for the loans. provision the show $X.X XX% the XX credit as our On At well reserves. in loan allowance was just the of from of December equipment losses the offs and the of components the end average to of $XX were our additional allocated quarter. losses Prior losses or approximately in million, allocated finance commercial we

strengthened to basis an the forecasts reserve loans XXX is having quarter. Our our end of by the on points from at reserve million the of prior bill. less total basis $X.X of economic component XXX ACL increased With this stabilizing impact and points

increase or On As credit last resulting commercial estate on by The out equipment adjustments portfolio. plans. our for it quarter losses an finance this from ratings, real payment COVID through loans, coverage for primarily quarter this contributor, new downgrades changes show broken risk biggest portfolio, was largely impacted XX, deferrals and slide loans was bill by reserve our the in allowance on driven portfolios. we other in our and

In loans, portfolio, with ratio also loans, total PPP portfolios addition our government to commercial when excluding GreenSky guarantees, coverage the track loan credit the the FHA enhancements or ACL we including and over our certain to Jeff? warehouse lines. end And increases coverage of back When these I'll compared ACL Jeff. the to to X.XX%, quarter. the turn the excluded, at prior loans that, are to with call X.XX%,

Jeff Ludwig

We'll few Eric. XXXX. a for and slide on up comments our Thanks, Alright. outlook with priorities wrap on XX,

strong are focus duration maintaining capital and First we continue and will we our liquidity, to continue to through foremost, of the clients communities on and well-positioned so supporting pandemic. that the

demand on those continue where areas see in environment. the also will current capitalize we loan We to

contributor commercial a to FHA at finance will be equipment loan the expect overall grow We continue to to warehouse lines strong rate, mix. larger a and

community balances Although areas. be loan to our there will increase I fluctuations in looking traditional those as mentioned commercial banking earlier. We're in also and production

also niche production. to new over be growth portfolio trends Given have runoff the an opportunities recent in not our agribusiness recent don't grow and meaningful non-interest to in balances. few of a of the believe better it's to real revenue we hires the lending look commercial are but could source growth income we warehouse We have source we if off we increasing we FHA those loan stem seeing especially this guaranteed on and in And some that seen time, areas; expect sell intend a years, expand. estate. the have in SBA, made we commercial and eye commercial in production SBA expected real the estate, a with to But equipment lines, year, portion finance. finance, We of the it

excluding be took last the revenue line. following in more we of interest place, We activity growth leverage the This and lead increase in see low fall cost the single our bottom higher have to in operating should are with to and portfolio. to able lower to the should mid actions targeting loan growth income PPP digits the structure net our year, we we

to manage our Our continue improve goal expenses, tightly operations. although technology we will is to to continue in invest to

successful and the focused recently Over and this platforms be on few years, for loan older digital resources been and opening digital mortgage adding will reduce these peer-to-peer portal our and digital business lending. have last the applications. account in and year, later a retail technology And improved very costs that small primarily building robust origination for portfolio was platform. We spend we of systems, adding payments, efforts consumer online And upgrading foundation new efficiencies. launched

existing shift revenue forward from us to will these capture that impact gathering, offer enable that and new positively appropriate our good share will more already most use Going And to the data and loan services include platform generation. of technology analytics analytics seen generation. and continue fee confident we're These determine investments We've will us more wallet we results our an deposit to marketing to investments both many existing help products towards from enhance our our create of to spend will clients investments customers. based automated production that initiatives. and

a will acquisition and we as With expecting significant the a are not continuing, pandemic internally focused remain we year. result, this

opportunities evaluating for wealth business niche and lines are we However, such smaller management. acquisition as add-on

have successful increase like past employ approach deployment. to we revenue. a finally, had of the the and acquisitions in management And number area further As intend balanced source in the to would wealth capital a of to reoccurring we

our operations of we to down we our share in are expect about It balanced M&A efficiency it's our had decision opportunities. we increases ratio efficient, over a reduce to support that how and profitable that was the eliminated efficiencies institution. expense, does restructuring will more on in FHLB net to by generation. improve revenue we In to amount have of expenses quarterly characterize and the the better pandemic. brought activity, through to it investing accurately sale and FHA middle the we XX.X%. continued of organic and and that restructure return branch growth our our through so interest continue say to the continued increase years the XX.X%. optimistic levels, alone, more objective create feel be and while with XXXX, current in In our XXXX, And progress the closing, to shareholders, the year margin, to consolidations, of last our While hard our a above end commercial amount the raise of positioned technology support eventually last advances enhance are increase the to in our to we we we've repurchase our In made dividends capital platform, interest two capital ratios

these actions, in As Operator, all continue higher we the to you and as grow realize and a come. of the begin to take questions. drive operating call. balance any earnings leverage we strong to better years result position With we much are in XXXX, improve open our be to that, can happy we'll profitability sheet

Operator

Thank Perito [Operator first from Michael Instructions] Your KBW. of you. question comes

Michael Perito

morning, Thanks everyone. Hey, my good questions. for taking

Jeff Ludwig

morning, Good Mike.

Michael Perito

I it commercial New slide is you're well? if Maybe focused? finance a I or on agribusiness that about was the you Jeff to Year. XX minute start new Happy banking of want X(a) on spend maybe example expanding is SBA into. specialty you're Is some here. lending doing. ditto these verticals a wondering as that traditional Or and little color the on national? bit regionally then more could it

Jeff Ludwig

Yes.

we've business. SBA done So some X(a) always

of in sort dabbled we've So it.

of Community not line, Bank product I national be some we're additional starting this and a It's dedicated sales so good think to line group. the point, sort folks a on put at for that think, footprint. in I market, it'll

within the opportunities markets there's think start some to So we we're with and going there.

country. of On Ag side, in the middle we're agribusiness the

we all there's agribusiness, believe. us that space we've opportunity a some there's And a we lot. help we And to lender corn us. in As you pursue some hired for ag, an us, the not ring do around know, there of But not geography. operations, our on of sort operations opportunity next there's there, finance, farm term agribusiness. And out the And necessarily we some on internally. think the specialty a farm then, sort use it's given but of

lender of deals maybe complex We some you have our another And group, that a type we've growth group. estate finance out do more will. specialty call of sort what that if good we real are little tax team. credit commercial and we're of they rehab projects And adding that and seen

can encouraged to forward. going continue And so loan some as with we're build those we growth hires

Michael Perito

Jeff. those activity you balances the seems the some to equipment consumer success kick have really and Thanks. off, That's then lines, helpful. yes, like seems CRE And unit and elevated. it got two connects continues

do low guys is I XXXX, maybe your really So when curious, some I'm be mid portfolios like just just growth a for Maybe follow see and/or of is I then yielding shifting I to And higher it like the we single de purposeful you would loan over some think that? guys about would target? is how up should emphasizing. guess, that to that mean, presumably. potentially to And get months? some are to be, PPP there at about off just running to next make you you mix other XX how digit Are there true? kind stuff? the might And point, loans Or XX the think it seem then a effort trying

Jeff Ludwig

side, would of year portfolio I this say the I the on sort planning think consumer to Yes. hold consumer flat. we're for

So fair remix. maybe in of seen that estate. be sort commercial a We've runoff of real amount the

think, low not in its lower capital them quite is peer And over percent been our a to our fairly real bit deals. and group. disciplined a chase maybe regards some commercial estate last years as than the few I of

we think books. on I real some capacity some have an to we So put commercial estate ability -- the have

secondary manufacturing, construction are industries. Midland and market, real commercial, probably in Finance maybe, so trying then Consumer, not to Equipment continues change our Group being the are flat, type on the residential less mostly estate to relatively mean, refinance some mortgages. the mostly going see I to consumer we're think of the not market. Those commercial to we're good we're in around there, putting the we're side, I demand And hold payoff and try any mix

Michael Perito

how's us. appetite just guys types I the you for a frame comment then done you you for? the those like? wealth help, could and the have the of few competition That's more And look for What's out for this me Curious past. marketplace? acquisitions. kind helpful. if guys it. the of lastly there know, that about at on What Got that bit in different a And pricing point deals looking ways the are in little

Jeff Ludwig

Yes.

So could nothing good could But add good if add XX% on. sort pricing But we something to trajectory times do can two XX%, opportunity going trying that of that's we're there challenging. materially on, hopeful at the of would find businesses good find see pricing. a we to that And get smaller add-on, change business. that be out the an or at

Michael Perito

But it would be kind of regional.

Jeff Ludwig

Yes. Build sort of building out current wealth geographies. current management business lines in within

Michael Perito

Got much. it. Awesome. Very helpful, guys. Thank you very

Jeff Ludwig

Thanks, Mike.

Operator

comes line of Terry next question McEvoy of Your from Stephens.

Terry McEvoy

Morning, guys.

Jeff Ludwig

morning. Good

Terry McEvoy

Jeff, Along the on are the about there? kind the ran side. also some opportunities on footprint expenses of there's branch hires the lending whether first I to talk lines Appreciate kind you year, invest full you about guess think XX of the as through quarters outlook couple of to about and just new think a could for to reduce in same XX. there need technology? the the you network

Jeff Ludwig

think is I that the whole it's year, expenses about is to it's of guidance we the how but sort predict way me The hard year. Yes. of think and for whole of sort out

XX to least about every how So in that of is XX at I XXXX. quarter think sort

been we've now. technology think for spend, that spending the in area -- many we've I years

how shifting in revenue. we do technology we're money generate sort technology those I foundational spending foundational see money. that use us we're I of we've don't I to some think, the where that moving getting spending to from, more invested in plays see play to and now spending

this necessarily lines. a the in me dollars, resources into then how to other -- of a a And spending a of on shift more it's dollars. of spending is reallocation some So sales side, not we're the sort

Terry McEvoy

just lines and commentary between were and is When given did I Thanks. capital. And come reading buyback I build need on loans the guess a active the growth you to Jeff, capital stock? repurchasing down last on quarter then, at the back bit hold the look

Jeff Ludwig

Yes.

we're value, be left probably $X tangible if what in under small to ratios. the the stock below a plan. there's trading quarter value, some So roughly that. do would player back But will we now is buybacks. trying say we'll to build But opportunity you I what capital book book at have an $X our in million if And the guess in I million, tangible buy stocks is do

Terry McEvoy

& at Thanks. Last transit it's $XX million I then non-accrual just follow past quarter. another question deferrals that million. move $XX to And then, And in bank this up. ground look ACL about passenger portfolio. the of equipment And here. a finance, for there's the

So, could you potential help some equipment there? with given portfolio, me comfortable elevated loss of specific for be And just the get reserve additional deferrals? stress and just could finance of kind the level what that

Jeff Ludwig

that. think So, pieces X.X% a the I'll But piece to equipment. -- loan There's pick or the in. beginning X.X% and of I of the two there, there's in X% right? piece a There's lease balance. About

portfolio a I on we're, customers now think by as only we're lot a that it's I that really interest basis, are that So think making a partial payment. the of it's you payment, But you whether Eric. fact regular can payment, imagine, maybe more than stressing -- up, those can encouraged look we're a that contact

through decisions non-accrual, us relates think begin we as quarter. for encouraging. those I is And accrual, else, first will it get into Anything clear to get think Eric? the second the that as So I to and

Eric Lemke

follow on Yes. Terry, up to kind of that.

are. that So, We're understanding entire million portfolio, $XX at they of reaching testing and those split in portfolio into leases. and general in transportation you million, borrowers look is and out where kind when $XX against reserves to have stress about constantly And that we portfolio loans our it.

to or that them April, kind travel there. sort see elevated through reassessed of see losses We Jeff about sustainable when have said, set portfolio. least then travel from small some plans of, we some to But started get and as to back to get transportation somewhat we're hopefully level can from payment trying to at

Terry McEvoy

Great. color. I Thanks. appreciate the additional

Operator

line Nathan from [Operator of next Instructions] Race Sandler. of question Your comes Piper

Nathan Race

Hey, good morning. guys,

Jeff Ludwig

morning. Good

Nathan Race

discussion. credit the continuing Just

generally, quick cycle segments, provision around are a elevating guess, I think should entering But it came still this deferrals losses, to unfold. charge-offs but some expecting the you Just non how are like about guys question Obviously, as we much term or continues seems XXXX. came down. near down, performers

kind terms this of any builds starting of terms we just can just expect off what commentary in ACL year? of in So additional

Jeff Ludwig

Yes. that. answer I'd be to happy

that economic a there's there. and view that portfolio, of ACL reached kind amount is loan discussed of still we mixes or build, peak it forward of uncertainty But growth, So from earlier. we any going out sort at as this we've fair I increases to would point, be think how loan

we expecting going replenish that And kind think would we're And charge-offs late to be any to so quarter. of of maybe see. see will through forward those come provisions we see third because -- I second, some

Nathan Race

charge-off you. of And like imagined early Things can not year. up frame may you those are bit that But last degree. elevated I Eric, a little same to expectations. repeat kind just Got it

So in like XX increase? we charge-offs as talked potentially bps

Eric Lemke

a That's a question, it. shot at but Yes. take I'll difficult

were So charge-offs charge-offs quarter specific in the resolving some the we if first that older some loans elevated, we you Nathan, last remember, reserves year. had old our a and took lot on of books

in so why we're And partially elevated XXXX. that's

and somewhere we're range. on on end that, could loans the Met the lower be and between end with the XX basis of estimate being high that Going an of kind that forward, points XX thinking portfolio range total other what is of being of portfolio

Nathan Race

That's helpful. it. Got then… And Okay.

Jeff Ludwig

Yes.

last year. So be was less provision it than year we think, this will

Nathan Race

Understood. That's gears. helpful. And changing just

those adjustments year. In XXXX, terms for out strip outlook income of some the of the kind in last of we servicing marks core impairment, if

entering growth about of in how offset, generally, think of a the this thoughts just rate Mortgage year? any to terms obviously income Just overall you kind but XXXX? challenge just be on run

Jeff Ludwig

Yes.

starting that's think quarter I for the add fees a back impairment number if bad not is you our point. a the

we to grow our can think good management revenue. I we wealth that feel continue

we some XXXX, be service to look interchange. -- right, back are when there's charges think going as comes to comps, I it they helpful, that and would to

So as little move puts sort revert the when of should those on those the and direction a doesn't continue lines. trends in right pressure out of, comes to of it revenue pandemic some long as the sort back stimulus

may there capacity But expect of refinance a bit some to don't putting You're business -- right. terms much well we going is is XXXX Mortgage offset some headwind in there's as -- to don't of might that we in of we XXXX. sort the be as lose. refinance more we're business little there

then commercial comes current be the and quarter. be book. -- to going There's revenue there. a going servicing look off So not lot to a that then, the servicing It's of FHA is lot like that going to and probably revenue

Nathan Race

Got very appreciate I it. Thank helpful. questions. taking the you That's you.

Operator

At this further management over remarks. questions. would to back any turn closing call no to show time, now I I the like for

Jeff Ludwig

right. Thanks, everybody. All

excited we do XXXX a and I year in think and can XXXX. believe really we what productive we very about had

you for thanks we'll next So And joining. quarter. see

Operator

conference. today's you for participating Thank in

disconnect now may your You lines.

Midland States Bancorp (MSBI) 29 Jan 212020 Q4 Earnings call transcript