Second Quarter 2023 Highlights:
- Net income available to common shareholders of $19.3 million, or $0.86 per diluted share
- Efficiency ratio improved to 55.0% from prior quarter
- Total loan growth of $13.1 million, or 0.8% annualized
- Total deposit growth of $1.3 million or 0.1% annualized
- Common equity tier 1 capital ratio improved to 8.03%
- Tangible book value per share of $22.24, an increase of 1.7% from prior quarter
EFFINGHAM, Ill., July 27, 2023 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (Nasdaq: MSBI) (the “Company”) today reported net income available to common shareholders of $19.3 million, or $0.86 per diluted share, for the second quarter of 2023, compared to $19.5 million, or $0.86 per diluted share, for the first quarter of 2023. This also compares to net income available to common shareholders of $21.9 million, or $0.97 per diluted share, for the second quarter of 2022.
Jeffrey G. Ludwig, President and Chief Executive Officer of the Company, said, “We executed well in the second quarter and continued to deliver strong financial performance while prioritizing prudent risk management given the challenging operating environment, which resulted in an 8% increase in our pre-tax, pre-provision income compared to the prior quarter. Due to our strong financial performance and prudent balance sheet management, we saw an increase in our capital ratios and tangible book value per share, while also taking advantage of the opportunity to repurchase our common stock at below tangible book value and redeeming some of our higher cost subordinated debt.
“We continue to have success in developing full banking relationships with high quality businesses, which resulted in continued growth in our commercial loan portfolio. As planned, we are funding the new commercial loans and additional securities purchases with the runoff in our GreenSky portfolio, which is contributing to our strong financial performance and increase in capital ratios.
“While economic conditions remain uncertain, we will continue to prioritize prudent risk management and be conservative in our new loan production to build capital and liquidity. We continue to see good opportunities to add core deposit relationships in our markets with both retail and commercial customers, and during the second half of the year, we expect to begin seeing a contribution to deposit gathering from our Banking-as-a-Service initiative, which we believe will further strengthen our deposit base, support profitable growth in the future, and create additional franchise value,” said Mr. Ludwig.
Balance Sheet Highlights
Total assets were $8.03 billion at June 30, 2023, compared to $7.93 billion at March 31, 2023, and $7.44 billion at June 30, 2022. At June 30, 2023, portfolio loans were $6.37 billion, compared to $6.35 billion as of March 31, 2023, and $5.80 billion as of June 30, 2022.
Loans
During the second quarter of 2023, outstanding loans increased at a slower rate as the Company originated loans in a more selective and deliberate approach to balance liquidity and funding costs. Commercial loan and lease balances and construction and land development loans increased $18.0 million and $39.8 million, respectively, offsetting the decline in consumer loan balances due to a decrease in loans originated through GreenSky.
| As of | ||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||
| (in thousands) | 2023 | 2023 | 2022 | 2022 | 2022 | |||||||||
| Loan Portfolio | ||||||||||||||
| Commercial loans | $ | 962,756 | $ | 937,920 | $ | 872,794 | $ | 907,651 | $ | 821,119 | ||||
| Equipment finance loans | 614,633 | 632,205 | 616,751 | 577,323 | 546,267 | |||||||||
| Equipment finance leases | 500,485 | 510,029 | 491,744 | 457,611 | 439,202 | |||||||||
| Commercial FHA warehouse lines | 30,522 | 10,275 | 25,029 | 51,309 | 23,872 | |||||||||
| Total commercial loans and leases | 2,108,396 | 2,090,429 | 2,006,318 | 1,993,894 | 1,830,460 | |||||||||
| Commercial real estate | 2,443,995 | 2,448,158 | 2,433,159 | 2,466,303 | 2,335,655 | |||||||||
| Construction and land development | 366,631 | 326,836 | 320,882 | 225,549 | 203,955 | |||||||||
| Residential real estate | 371,486 | 369,910 | 366,094 | 356,225 | 340,103 | |||||||||
| Consumer | 1,076,836 | 1,118,938 | 1,180,014 | 1,156,480 | 1,085,371 | |||||||||
| Total loans | $ | 6,367,344 | $ | 6,354,271 | $ | 6,306,467 | $ | 6,198,451 | $ | 5,795,544 | ||||
Loan Quality
Credit quality metrics declined during the second quarter of 2023. Loans 30-89 days past due totaled $44.2 million as of June 30, 2023, compared to $30.9 million as of March 31, 2023, and $16.2 million as of June 30, 2022. The increase in delinquencies during the most recent quarter was due to a single commercial loan, which has since been brought current, and an increase in delinquencies in equipment finance loans and leases.
Non-performing loans were $54.8 million at June 30, 2023, compared to $50.7 million as of March 31, 2023, and $56.9 million as of June 30, 2022. The increase at June 30, 2023 was related to one commercial real estate loan moving to non-performing at the end of the quarter. Non-performing loans as a percentage of portfolio loans was 0.86% at June 30, 2023, compared with 0.80% at March 31, 2023, and 0.98% at June 30, 2022.
Non-performing assets were 0.72% of total assets at the end of the second quarter of 2023, compared to 0.74% at March 31, 2023 and 0.93% at June 30, 2022. Two other real estate owned (“OREO”) properties were sold during the second quarter of 2023 at a gain of $0.8 million resulting in the decrease in non-performing assets.
| As of and for the Three Months Ended | |||||||||||||||||||
| (in thousands) | June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||
| 2023 | 2023 | 2022 | 2022 | 2022 | |||||||||||||||
| Asset Quality | |||||||||||||||||||
| Loans 30-89 days past due | $ | 44,161 | $ | 30,895 | $ | 32,372 | $ | 28,275 | $ | 16,212 | |||||||||
| Nonperforming loans | 54,844 | 50,713 | 49,423 | 46,882 | 56,883 | ||||||||||||||
| Nonperforming assets | 57,688 | 58,806 | 57,824 | 59,524 | 69,344 | ||||||||||||||
| Substandard loans | 130,707 | 99,819 | 101,044 | 98,517 | 114,820 | ||||||||||||||
| Net charge-offs | 2,996 | 2,119 | 538 | 3,233 | 2,781 | ||||||||||||||
| Loans 30-89 days past due to total loans | 0.69 | % | 0.49 | % | 0.51 | % | 0.46 | % | 0.28 | % | |||||||||
| Nonperforming loans to total loans | 0.86 | % | 0.80 | % | 0.78 | % | 0.76 | % | 0.98 | % | |||||||||
| Nonperforming assets to total assets | 0.72 | % | 0.74 | % | 0.74 | % | 0.76 | % | 0.93 | % | |||||||||
| Allowance for credit losses to total loans | 1.02 | % | 0.98 | % | 0.97 | % | 0.95 | % | 0.95 | % | |||||||||
| Allowance for credit losses to nonperforming loans | 118.43 | % | 122.39 | % | 123.53 | % | 125.08 | % | 96.51 | % | |||||||||
| Net charge-offs to average loans | 0.19 | % | 0.14 | % | 0.03 | % | 0.21 | % | 0.20 | % | |||||||||
The Company’s allowance for credit losses totaled $65.0 million at June 30, 2023, compared to $62.1 million at March 31, 2023, and $54.9 million at June 30, 2022. The allowance as a percentage of portfolio loans was 1.02% at June 30, 2023, compared to 0.98% at March 31, 2023, and 0.95% at June 30, 2022.
Deposits
Total deposits were $6.43 billion at both June 30, 2023 and March 31, 2023, compared with $6.18 billion at June 30, 2022. The deposit mix continues to shift from noninterest-bearing deposits to interest-bearing deposits due to the continued rate increases announced by the Federal Reserve. Interest rate promotions offered during the second quarter of 2023 on time deposit products contributed to an increase in balances of $73.9 million at June 30, 2023, compared to March 31, 2023.
| As of | ||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||
| (in thousands) | 2023 | 2023 | 2022 | 2022 | 2022 | |||||||||
| Deposit Portfolio | ||||||||||||||
| Noninterest-bearing demand | $ | 1,162,909 | $ | 1,215,758 | $ | 1,362,158 | $ | 1,362,481 | $ | 1,403,386 | ||||
| Interest-bearing: | ||||||||||||||
| Checking | 2,499,693 | 2,502,827 | 2,494,073 | 2,568,195 | 2,377,760 | |||||||||
| Money market | 1,226,470 | 1,263,813 | 1,184,101 | 1,125,333 | 1,027,547 | |||||||||
| Savings | 624,005 | 636,832 | 661,932 | 704,245 | 740,364 | |||||||||
| Time | 840,734 | 766,884 | 649,552 | 620,960 | 620,363 | |||||||||
| Brokered time | 72,737 | 39,087 | 12,836 | 14,038 | 15,018 | |||||||||
| Total deposits | $ | 6,426,548 | $ | 6,425,201 | $ | 6,364,652 | $ | 6,395,252 | $ | 6,184,438 | ||||
The Company estimates that uninsured deposits(1) totaled $1.21 billion, or 19% of total deposits, at June 30, 2023 compared to $1.32 billion, or 21%, at March 31, 2023.
| (1) | Uninsured deposits include the Call Report estimate of uninsured deposits less affiliate deposits, estimated insured portion of servicing deposits, additional structured FDIC coverage and collateralized deposits. |
Results of Operations Highlights
Net Interest Income and Margin
During the second quarter of 2023, net interest income, on a tax-equivalent basis, totaled $59.0 million, a decrease of $1.7 million, or 2.8%, compared to $60.7 million for the first quarter of 2023. The tax-equivalent net interest margin for the second quarter of 2023 was 3.23%, compared with 3.39% in the first quarter of 2023. Net interest income and related margin, on a tax-equivalent basis, was $61.7 million and 3.65%, respectively, in the second quarter of 2022. The decline in the net interest income and margin was largely attributable to increased market interest rates resulting in the cost of funding liabilities increasing at a faster rate than the yields on earning assets.
Average interest-earning assets for the second quarter of 2023 were $7.33 billion, compared to $7.26 billion for the first quarter of 2023. The yield increased 16 basis points to 5.51% compared to the first quarter of 2023. Interest-earning assets averaged $6.77 billion for the second quarter of 2022.
Average loans were $6.36 billion for the second quarter of 2023, compared to $6.32 billion for the first quarter of 2023 and $5.68 billion for the second quarter of 2022. The yield on loans was 5.80% and 5.65% for the second and first quarters of 2023, respectively.
| For the Three Months Ended | ||||||||||||||||||||||||||
| June 30, | March 31, | June 30, | ||||||||||||||||||||||||
| (dollars in thousands) | 2023 | 2023 | 2022 | |||||||||||||||||||||||
| Interest-earning assets | Average Balance | Interest & Fees | Yield/Rate | Average Balance | Interest & Fees | Yield/Rate | Average Balance | Interest & Fees | Yield/Rate | |||||||||||||||||
| Cash and cash equivalents | $ | 67,377 | $ | 852 | 5.07 | % | $ | 85,123 | $ | 980 | 4.67 | % | $ | 226,517 | $ | 468 | 0.83 | % | ||||||||
| Investment securities | 861,409 | 7,286 | 3.39 | % | 809,848 | 5,995 | 3.00 | % | 818,927 | 4,931 | 2.41 | % | ||||||||||||||
| Loans | 6,356,012 | 91,890 | 5.80 | % | 6,320,402 | 87,997 | 5.65 | % | 5,677,791 | 63,594 | 4.49 | % | ||||||||||||||
| Loans held for sale | 4,067 | 59 | 5.79 | % | 1,506 | 16 | 4.41 | % | 9,865 | 77 | 3.15 | % | ||||||||||||||
| Nonmarketable equity securities | 45,028 | 599 | 5.33 | % | 47,819 | 795 | 6.75 | % | 36,338 | 487 | 5.38 | % | ||||||||||||||
| Total interest-earning assets | $ | 7,333,893 | $ | 100,686 | 5.51 | % | $ | 7,264,698 | $ | 95,783 | 5.35 | % | $ | 6,769,438 | $ | 69,557 | 4.12 | % | ||||||||
| Noninterest-earning assets | 612,238 | 610,811 | 615,348 | |||||||||||||||||||||||
| Total assets | $ | 7,946,131 | $ | 7,875,509 | $ | 7,384,786 | ||||||||||||||||||||
| Interest-Bearing Liabilities | ||||||||||||||||||||||||||
| Interest-bearing deposits | $ | 5,259,188 | $ | 33,617 | 2.56 | % | $ | 5,053,941 | $ | 26,405 | 2.12 | % | $ | 4,718,759 | $ | 3,810 | 0.32 | % | ||||||||
| Short-term borrowings | 22,018 | 14 | 0.26 | % | 38,655 | 25 | 0.26 | % | 59,301 | 22 | 0.15 | % | ||||||||||||||
| FHLB advances & other borrowings | 471,989 | 5,396 | 4.59 | % | 540,278 | 6,006 | 4.51 | % | 307,611 | 1,435 | 1.87 | % | ||||||||||||||
| Subordinated debt | 97,278 | 1,335 | 5.51 | % | 99,812 | 1,370 | 5.57 | % | 139,232 | 2,011 | 5.78 | % | ||||||||||||||
| Trust preferred debentures | 50,218 | 1,289 | 10.29 | % | 50,047 | 1,229 | 9.96 | % | 49,602 | 624 | 5.05 | % | ||||||||||||||
| Total interest-bearing liabilities | $ | 5,900,691 | $ | 41,651 | 2.83 | % | $ | 5,782,733 | $ | 35,035 | 2.46 | % | $ | 5,274,505 | $ | 7,902 | 0.60 | % | ||||||||
| Noninterest-bearing deposits | 1,187,584 | 1,250,899 | 1,401,268 | |||||||||||||||||||||||
| Other noninterest-bearing liabilities | 81,065 | 74,691 | 66,009 | |||||||||||||||||||||||
| Shareholders’ equity | 776,791 | 767,186 | 643,004 | |||||||||||||||||||||||
| Total liabilities and shareholder’s equity | $ | 7,946,131 | $ | 7,875,509 | $ | 7,384,786 | ||||||||||||||||||||
| Net Interest Margin | $ | 59,035 | 3.23 | % | $ | 60,748 | 3.39 | % | $ | 61,655 | 3.65 | % | ||||||||||||||
| Cost of Deposits | 2.09 | % | 1.70 | % | 0.25 | % | ||||||||||||||||||||
| (1) | Interest income and average rates for tax-exempt loans and securities are presented on a tax-equivalent basis, assuming a federal income tax rate of 21%. Tax-equivalent adjustments totaled $0.2 million, $0.2 million and $0.3 million for the three months ended June 30, 2023, March 31, 2023 and 2022, respectively. |
Investment securities averaged $861.4 million for the second quarter of 2023, compared to $809.8 million for the first quarter of 2023. The Company purchased additional investments and repositioned out of lower-yielding securities in favor of higher-yielding instruments resulting in increased average balances of $51.6 million and a higher yield. These changes are expected to improve overall margin, liquidity, and capital allocations. The Company incurred net losses on sales of $0.9 million in the second quarter of 2023. Investment securities averaged $818.9 million for the second quarter of 2022.
Average interest-bearing deposits were $5.26 billion for the second quarter of 2023, compared to $5.05 billion for the first quarter of 2023, and $4.72 billion for the second quarter of 2022. Cost of interest-bearing deposits was 2.56% in the second quarter of 2023, which represents a 44 basis point increase from the first quarter of 2023. A competitive market driven by rising interest rates was a contributing factor to the increase in deposit costs.
The Company redeemed $6.6 million of subordinated debt during the second quarter of 2023. The debentures were redeemed at a discount, resulting in a gain of $0.7 million.
During the six months ended June 30, 2023, net interest income, on a tax-equivalent basis, increased to $119.8 million, with a tax-equivalent net interest margin of 3.31%, compared to net interest income, on a tax-equivalent basis, of $118.9 million, and a tax-equivalent net interest margin of 3.58% for the six months ended June 30, 2022.
| For the Six Months Ended | |||||||||||||||||
| June 30, | June 30, | ||||||||||||||||
| (dollars in thousands) | 2023 | 2022 | |||||||||||||||
| Interest-earning assets | Average Balance | Interest & Fees | Yield/Rate | Average Balance | Interest & Fees | Yield/Rate | |||||||||||
| Cash and cash equivalents | $ | 76,201 | $ | 1,832 | 4.85 | % | $ | 304,938 | $ | 639 | 0.42 | % | |||||
| Investment securities | 835,771 | 13,281 | 3.18 | % | 856,571 | 9,894 | 2.31 | % | |||||||||
| Loans | 6,338,305 | 179,887 | 5.72 | % | 5,477,037 | 120,873 | 4.45 | % | |||||||||
| Loans held for sale | 2,794 | 75 | 5.42 | % | 20,501 | 297 | 2.93 | % | |||||||||
| Nonmarketable equity securities | 46,416 | 1,394 | 6.05 | % | 36,358 | 971 | 5.39 | % | |||||||||
| Total interest-earning assets | $ | 7,299,487 | $ | 196,469 | 5.43 | % | $ | 6,695,405 | $ | 132,674 | 4.00 | % | |||||
| Noninterest-earning assets | 611,528 | 623,224 | |||||||||||||||
| Total assets | $ | 7,911,015 | $ | 7,318,629 | |||||||||||||
| Interest-Bearing Liabilities | |||||||||||||||||
| Interest-bearing deposits | $ | 5,157,148 | $ | 60,022 | 2.35 | % | $ | 4,613,751 | $ | 5,971 | 0.26 | % | |||||
| Short-term borrowings | 30,291 | 39 | 0.26 | % | 64,642 | 45 | 0.14 | % | |||||||||
| FHLB advances & other borrowings | 505,945 | 11,402 | 4.54 | % | 309,436 | 2,647 | 1.72 | % | |||||||||
| Subordinated debt | 98,538 | 2,705 | 5.54 | % | 139,186 | 4,022 | 5.78 | % | |||||||||
| Trust preferred debentures | 50,133 | 2,518 | 10.13 | % | 49,527 | 1,138 | 4.64 | % | |||||||||
| Total interest-bearing liabilities | $ | 5,842,055 | $ | 76,686 | 2.65 | % | $ | 5,176,542 | $ | 13,823 | 0.54 | % | |||||
| Noninterest-bearing deposits | 1,219,050 | 1,418,083 | |||||||||||||||
| Other noninterest-bearing liabilities | 77,895 | 73,878 | |||||||||||||||
| Shareholders’ equity | 772,015 | 650,126 | |||||||||||||||
| Total liabilities and shareholder’s equity | $ | 7,911,015 | $ | 7,318,629 | |||||||||||||
| Net Interest Margin | $ | 119,783 | 3.31 | % | $ | 118,851 | 3.58 | % | |||||||||
| Cost of Deposits | 1.90 | % | 0.20 | % | |||||||||||||
| (1) | Interest income and average rates for tax-exempt loans and securities are presented on a tax-equivalent basis, assuming a federal income tax rate of 21%. Tax-equivalent adjustments totaled $0.4 million and $0.7 million for the six months ended June 30, 2023 and 2022, respectively. |
The yield on earning assets increased 143 basis points to 5.43% for the six months ended June 30, 2023 compared to the same period one year prior. However, the cost of interest bearing liabilities increased at a faster rate during this period, increasing 211 basis points to 2.65% for the six months ended June 30, 2023.
Noninterest Income
Noninterest income was $18.8 million for the second quarter of 2023, compared to $15.8 million for the first quarter of 2023. Noninterest income for the second quarter of 2023 included an $0.8 million gain on the sale of OREO and a $0.7 million gain on the repurchase of subordinated debt, partially offset by $0.9 million of losses on the sale of investment securities. The first quarter of 2023 was negatively impacted by $0.6 million of losses on the sale of investment securities. Excluding these transactions, noninterest income for the second quarter of 2023 and the first quarter of 2023 was $18.2 million and $16.4 million, respectively. Noninterest income for the second quarter of 2022 was $14.6 million and included $0.9 million impairment charge on commercial servicing rights and a $0.1 million loss on the sale of investment securities. Excluding these transactions, noninterest income for the second quarter of 2022 was $15.6 million.
| For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
| (in thousands) | 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||
| Noninterest income | |||||||||||||||||||
| Wealth management revenue | $ | 6,269 | $ | 6,411 | $ | 6,143 | $ | 12,680 | $ | 13,282 | |||||||||
| Residential mortgage banking revenue | 540 | 405 | 384 | 945 | 983 | ||||||||||||||
| Service charges on deposit accounts | 2,677 | 2,568 | 2,304 | 5,245 | 4,372 | ||||||||||||||
| Interchange revenue | 3,696 | 3,412 | 3,590 | 7,108 | 6,870 | ||||||||||||||
| Loss on sales of investment securities, net | (869 | ) | (648 | ) | (101 | ) | (1,517 | ) | (101 | ) | |||||||||
| Gain on repurchase of subordinated debt, net | 676 | — | — | 676 | — | ||||||||||||||
| Gain (loss) on sales of other real estate owned, net | 819 | — | (162 | ) | 819 | (121 | ) | ||||||||||||
| Impairment on commercial mortgage servicing rights | — | — | (869 | ) | — | (1,263 | ) | ||||||||||||
| Company-owned life insurance | 891 | 876 | 840 | 1,767 | 1,859 | ||||||||||||||
| Other income | 4,054 | 2,755 | 2,484 | 6,809 | 4,345 | ||||||||||||||
| Total noninterest income | $ | 18,753 | $ | 15,779 | $ | 14,613 | $ | 34,532 | $ | 30,226 | |||||||||
Noninterest Expense
Noninterest expense was $42.9 million in the second quarter of 2023, compared to $44.5 million in the first quarter of 2023, and $41.3 million in the second quarter of 2022. The efficiency ratio was 55.01% for the quarter ended June 30, 2023, compared to 57.64% for the quarter ended March 31, 2023, and 53.10% for the quarter ended June 30, 2022.
| For the Three Months Ended | For the Six Months Ended | |||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||
| (in thousands) | 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||
| Noninterest expense | ||||||||||||||
| Salaries and employee benefits | $ | 22,857 | $ | 24,243 | $ | 22,645 | $ | 47,100 | $ | 44,515 | ||||
| Occupancy and equipment | 3,879 | 4,443 | 3,489 | 8,322 | 7,244 | |||||||||
| Data processing | 6,544 | 6,311 | 6,082 | 12,855 | 11,955 | |||||||||
| Professional | 1,663 | 1,760 | 1,516 | 3,423 | 3,488 | |||||||||
| Amortization of intangible assets | 1,208 | 1,291 | 1,318 | 2,499 | 2,716 | |||||||||
| FDIC insurance | 1,196 | 1,329 | 826 | 2,525 | 1,656 | |||||||||
| Other expense | 5,547 | 5,105 | 5,463 | 10,652 | 10,649 | |||||||||
| Total noninterest expense | $ | 42,894 | $ | 44,482 | $ | 41,339 | $ | 87,376 | $ | 82,223 | ||||
Noteworthy components of noninterest expense are as follows:
- Salaries and employee benefits expenses were $22.9 million in the second quarter of 2023, compared to $24.2 million in the first quarter of 2023, and $22.6 million in the second quarter of 2022. Employees numbered 915 at June 30, 2023, compared to 931 at March 31, 2023, and 932 at June 30, 2022. Annual salary increases, effective in the second quarter of 2023, were offset by decreased commissions and incentive compensation expense.
- Occupancy and equipment expense decreased $0.6 million in the second quarter of 2023 compared to the first quarter of 2023, primarily due to elevated seasonal related expenses incurred in the first quarter, including snow removal and utilities expenses.
- Increases in FDIC insurance expense on a year to date basis is primarily related to the FDIC’s 2 basis point increase to the initial base deposit insurance assessment rate schedules effective January 1, 2023.
Income Tax Expense
Income tax expense was $7.2 million for the second quarter of 2023, as compared to $6.9 million for the first quarter of 2023 and $7.3 million for the second quarter of 2022. The resulting effective tax rates were 25.1%, 24.0% and 25.0% respectively.
Capital
At June 30, 2023, Midland States Bank and the Company exceeded all regulatory capital requirements under Basel III, and Midland States Bank met the qualifications to be a ‘‘well-capitalized’’ financial institution, as summarized in the following table:
| As of June 30, 2023 | |||||
| Midland States Bank | Midland States Bancorp, Inc. | Minimum Regulatory Requirements (2) | |||
| Total capital to risk-weighted assets | 11.89% | 12.65% | 10.50% | ||
| Tier 1 capital to risk-weighted assets | 11.01% | 10.47% | 8.50% | ||
| Tier 1 leverage ratio | 10.07% | 9.57% | 4.00% | ||
| Common equity Tier 1 capital | 11.01% | 8.03% | 7.00% | ||
| Tangible common equity to tangible assets (1) | N/A | 6.19% | N/A | ||
| (1) | A non-GAAP financial measure. Refer to page 13 for a reconciliation to the comparable GAAP financial measure. |
| (2) | Includes the capital conservation buffer of 2.5%. |
The impact of rising interest rates on the Company’s investment portfolio and cash flow hedges has resulted in an $84.7 million accumulated other comprehensive loss at June 30, 2023, which impacts tangible book value by $3.87.
Stock Repurchase Program
As previously disclosed, on December 6, 2022, the Company’s board of directors authorized a new share repurchase program, pursuant to which the Company is authorized to repurchase up to $25.0 million of common stock through December 31, 2023. During the second quarter of 2023, the Company repurchased 308,543 shares of its common stock at a weighted average price of $19.78 under its stock repurchase program. As of June 30, 2023, the Company had $16.1 million remaining under the current stock repurchase authorization.
About Midland States Bancorp, Inc.
Midland States Bancorp, Inc. is a community-based financial holding company headquartered in Effingham, Illinois, and is the sole shareholder of Midland States Bank. As of June 30, 2023, the Company had total assets of approximately $8.03 billion, and its Wealth Management Group had assets under administration of approximately $3.59 billion. The Company provides a full range of commercial and consumer banking products and services and business equipment financing, merchant credit card services, trust and investment management, insurance and financial planning services. For additional information, visit https://www.midlandsb.com/ or https://www.linkedin.com/company/midland-states-bank.
Non-GAAP Financial Measures
Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with GAAP.
These non-GAAP financial measures include “Adjusted Earnings,” “Adjusted Earnings Available to Common Shareholders,” “Adjusted Diluted Earnings Per Common Share,” “Adjusted Return on Average Assets,” “Adjusted Return on Average Shareholders’ Equity,” “Adjusted Return on Average Tangible Common Equity,” “Adjusted Pre-Tax, Pre-Provision Earnings,” “Adjusted Pre-Tax, Pre-Provision Return on Average Assets,” “Efficiency Ratio,” “Tangible Common Equity to Tangible Assets,” “Tangible Book Value Per Share,” “Tangible Book Value Per Share excluding Accumulated Other Comprehensive Income,” and “Return on Average Tangible Common Equity.” The Company believes these non-GAAP financial measures provide both management and investors a more complete understanding of the Company’s funding profile and profitability. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures. Not all companies use the same calculation of these measures; therefore, this presentation may not be comparable to other similarly titled measures as presented by other companies.
Forward-Looking Statements
Readers should note that in addition to the historical information contained herein, this press release includes "forward-looking statements" within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including but not limited to statements about the Company’s plans, objectives, future performance, goals and future earnings levels. These statements are subject to many risks and uncertainties, including changes in interest rates and other general economic, business and political conditions, the impact of inflation, continuing effects of the recent failures of Silicon Valley Bank and Signature Bank, including anticipated effects on FDIC premiums, increased deposit volatility and potential regulatory developments; changes in the financial markets; changes in business plans as circumstances warrant; risks relating to acquisitions; developments and uncertainty related to the future use and availability of some reference rates, such as the London Inter-Bank Offered Rate, as well as other alternative reference rates, and the adoption of a substitute; changes to U.S. tax laws, regulations and guidance; and other risks detailed from time to time in filings made by the Company with the Securities and Exchange Commission. Readers should note that the forward-looking statements included in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "will," "propose," "may," "plan," "seek," "expect," "intend," "estimate," "anticipate," "believe," "continue," or similar terminology. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.
CONTACTS:Jeffrey G. Ludwig, President and CEO, at [email protected] or (217) 342-7321Eric T. Lemke, Chief Financial Officer, at [email protected] or (217) 342-7321Douglas J. Tucker, SVP and Corporate Counsel, at [email protected] or (217) 342-7321
| MIDLAND STATES BANCORP, INC. | |||||||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) | |||||||||||||||||||
| As of and for the Three Months Ended | As of andfor the Six Months Ended | ||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
| (dollars in thousands, except per share data) | 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||
| Earnings Summary | |||||||||||||||||||
| Net interest income | $ | 58,840 | $ | 60,504 | $ | 61,334 | $ | 119,344 | $ | 118,161 | |||||||||
| Provision for credit losses | 5,879 | 3,135 | 5,441 | 9,014 | 9,608 | ||||||||||||||
| Noninterest income | 18,753 | 15,779 | 14,613 | 34,532 | 30,226 | ||||||||||||||
| Noninterest expense | 42,894 | 44,482 | 41,339 | 87,376 | 82,223 | ||||||||||||||
| Income before income taxes | 28,820 | 28,666 | 29,167 | 57,486 | 56,556 | ||||||||||||||
| Income taxes | 7,245 | 6,894 | 7,284 | 14,139 | 13,924 | ||||||||||||||
| Net income | 21,575 | 21,772 | 21,883 | 43,347 | 42,632 | ||||||||||||||
| Preferred dividends | 2,228 | 2,228 | — | 4,456 | — | ||||||||||||||
| Net income available to common shareholders | $ | 19,347 | $ | 19,544 | $ | 21,883 | $ | 38,891 | $ | 42,632 | |||||||||
| Diluted earnings per common share | $ | 0.86 | $ | 0.86 | $ | 0.97 | $ | 1.72 | $ | 1.89 | |||||||||
| Weighted average common shares outstanding - diluted | 22,205,079 | 22,501,970 | 22,360,819 | 22,348,981 | 22,355,936 | ||||||||||||||
| Return on average assets | 1.09 | % | 1.12 | % | 1.19 | % | 1.10 | % | 1.17 | % | |||||||||
| Return on average shareholders' equity | 11.14 | % | 11.51 | % | 13.65 | % | 11.32 | % | 13.22 | % | |||||||||
| Return on average tangible common equity(1) | 15.99 | % | 16.70 | % | 19.14 | % | 16.34 | % | 18.48 | % | |||||||||
| Net interest margin | 3.23 | % | 3.39 | % | 3.65 | % | 3.31 | % | 3.58 | % | |||||||||
| Efficiency ratio(1) | 55.01 | % | 57.64 | % | 53.10 | % | 56.32 | % | 54.38 | % | |||||||||
| Adjusted Earnings Performance Summary(1) | |||||||||||||||||||
| Adjusted earnings available to common shareholders | $ | 19,487 | $ | 20,017 | $ | 22,191 | $ | 39,505 | $ | 43,006 | |||||||||
| Adjusted diluted earnings per common share | $ | 0.87 | $ | 0.88 | $ | 0.98 | $ | 1.75 | $ | 1.90 | |||||||||
| Adjusted return on average assets | 1.10 | % | 1.15 | % | 1.21 | % | 1.12 | % | 1.18 | % | |||||||||
| Adjusted return on average shareholders' equity | 11.21 | % | 11.76 | % | 13.84 | % | 11.48 | % | 13.34 | % | |||||||||
| Adjusted return on average tangible common equity | 16.10 | % | 17.11 | % | 19.41 | % | 16.60 | % | 18.65 | % | |||||||||
| Adjusted pre-tax, pre-provision earnings | $ | 34,892 | $ | 32,449 | $ | 35,902 | $ | 67,341 | $ | 67,943 | |||||||||
| Adjusted pre-tax, pre-provision return on average assets | 1.76 | % | 1.67 | % | 1.95 | % | 1.72 | % | 1.87 | % | |||||||||
| Market Data | |||||||||||||||||||
| Book value per share at period end | $ | 30.49 | $ | 30.08 | $ | 28.84 | |||||||||||||
| Tangible book value per share at period end(1) | $ | 22.24 | $ | 21.87 | $ | 20.43 | |||||||||||||
| Tangible book value per share excluding accumulated other comprehensive income at period end(1) | $ | 26.11 | $ | 25.39 | $ | 22.84 | |||||||||||||
| Market price at period end | $ | 19.91 | $ | 21.42 | $ | 24.04 | |||||||||||||
| Common shares outstanding at period end | 21,854,800 | 22,111,454 | 22,060,255 | ||||||||||||||||
| Capital | |||||||||||||||||||
| Total capital to risk-weighted assets | 12.65 | % | 12.46 | % | 11.44 | % | |||||||||||||
| Tier 1 capital to risk-weighted assets | 10.47 | % | 10.25 | % | 8.63 | % | |||||||||||||
| Tier 1 common capital to risk-weighted assets | 8.03 | % | 7.84 | % | 7.66 | % | |||||||||||||
| Tier 1 leverage ratio | 9.57 | % | 9.54 | % | 7.98 | % | |||||||||||||
| Tangible common equity to tangible assets(1) | 6.19 | % | 6.24 | % | 6.22 | % | |||||||||||||
| Wealth Management | |||||||||||||||||||
| Trust assets under administration | $ | 3,594,727 | $ | 3,502,635 | $ | 3,503,227 | |||||||||||||
| (1) | Non-GAAP financial measures. Refer to pages 11 - 13 for a reconciliation to the comparable GAAP financial measures. |
| MIDLAND STATES BANCORP, INC. | |||||||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) | |||||||||||||||||||
| As of | |||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||||
| (in thousands) | 2023 | 2023 | 2022 | 2022 | 2022 | ||||||||||||||
| Assets | |||||||||||||||||||
| Cash and cash equivalents | $ | 160,695 | $ | 138,310 | $ | 160,631 | $ | 313,188 | $ | 270,117 | |||||||||
| Investment securities | 887,003 | 821,005 | 776,860 | 690,504 | 769,278 | ||||||||||||||
| Loans | 6,367,344 | 6,354,271 | 6,306,467 | 6,198,451 | 5,795,544 | ||||||||||||||
| Allowance for credit losses on loans | (64,950 | ) | (62,067 | ) | (61,051 | ) | (58,639 | ) | (54,898 | ) | |||||||||
| Total loans, net | 6,302,394 | 6,292,204 | 6,245,416 | 6,139,812 | 5,740,646 | ||||||||||||||
| Loans held for sale | 5,632 | 2,747 | 1,286 | 4,338 | 5,298 | ||||||||||||||
| Premises and equipment, net | 81,006 | 80,582 | 78,293 | 77,519 | 77,668 | ||||||||||||||
| Other real estate owned | 202 | 6,729 | 6,729 | 11,141 | 11,131 | ||||||||||||||
| Loan servicing rights, at lower of cost or fair value | 21,611 | 1,117 | 1,205 | 1,297 | 25,879 | ||||||||||||||
| Commercial FHA mortgage loan servicing rights held for sale | — | 20,745 | 20,745 | 23,995 | — | ||||||||||||||
| Goodwill | 161,904 | 161,904 | 161,904 | 161,904 | 161,904 | ||||||||||||||
| Other intangible assets, net | 18,367 | 19,575 | 20,866 | 22,198 | 23,559 | ||||||||||||||
| Company-owned life insurance | 152,210 | 151,319 | 150,443 | 149,648 | 148,900 | ||||||||||||||
| Other assets | 243,697 | 233,937 | 231,123 | 226,333 | 201,432 | ||||||||||||||
| Total assets | $ | 8,034,721 | $ | 7,930,174 | $ | 7,855,501 | $ | 7,821,877 | $ | 7,435,812 | |||||||||
| Liabilities and Shareholders' Equity | |||||||||||||||||||
| Noninterest-bearing demand deposits | $ | 1,162,909 | $ | 1,215,758 | $ | 1,362,158 | $ | 1,362,481 | $ | 1,403,386 | |||||||||
| Interest-bearing deposits | 5,263,639 | 5,209,443 | 5,002,494 | 5,032,771 | 4,781,052 | ||||||||||||||
| Total deposits | 6,426,548 | 6,425,201 | 6,364,652 | 6,395,252 | 6,184,438 | ||||||||||||||
| Short-term borrowings | 21,783 | 31,173 | 42,311 | 58,518 | 67,689 | ||||||||||||||
| FHLB advances and other borrowings | 575,000 | 482,000 | 460,000 | 360,000 | 285,000 | ||||||||||||||
| Subordinated debt | 93,404 | 99,849 | 99,772 | 139,370 | 139,277 | ||||||||||||||
| Trust preferred debentures | 50,296 | 50,135 | 49,975 | 49,824 | 49,674 | ||||||||||||||
| Other liabilities | 90,869 | 66,173 | 80,217 | 79,634 | 73,546 | ||||||||||||||
| Total liabilities | 7,257,900 | 7,154,531 | 7,096,927 | 7,082,598 | 6,799,624 | ||||||||||||||
| Total shareholders’ equity | 776,821 | 775,643 | 758,574 | 739,279 | 636,188 | ||||||||||||||
| Total liabilities and shareholders’ equity | $ | 8,034,721 | $ | 7,930,174 | $ | 7,855,501 | $ | 7,821,877 | $ | 7,435,812 | |||||||||
| MIDLAND STATES BANCORP, INC. | |||||||||||||||||||
| CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued) | |||||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
| (in thousands, except per share data) | 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||
| Net interest income: | |||||||||||||||||||
| Interest income | $ | 100,491 | $ | 95,539 | $ | 69,236 | $ | 196,030 | $ | 131,984 | |||||||||
| Interest expense | 41,651 | 35,035 | 7,902 | 76,686 | 13,823 | ||||||||||||||
| Net interest income | 58,840 | 60,504 | 61,334 | 119,344 | 118,161 | ||||||||||||||
| Provision for credit losses: | |||||||||||||||||||
| Provision for credit losses on loans | 5,879 | 3,135 | 4,741 | 9,014 | 8,873 | ||||||||||||||
| Provision for credit losses on unfunded commitments | — | — | 700 | — | 956 | ||||||||||||||
| Provision for other credit losses | — | — | — | — | (221 | ) | |||||||||||||
| Total provision for credit losses | 5,879 | 3,135 | 5,441 | 9,014 | 9,608 | ||||||||||||||
| Net interest income after provision for credit losses | 52,961 | 57,369 | 55,893 | 110,330 | 108,553 | ||||||||||||||
| Noninterest income: | |||||||||||||||||||
| Wealth management revenue | 6,269 | 6,411 | 6,143 | 12,680 | 13,282 | ||||||||||||||
| Residential mortgage banking revenue | 540 | 405 | 384 | 945 | 983 | ||||||||||||||
| Service charges on deposit accounts | 2,677 | 2,568 | 2,304 | 5,245 | 4,372 | ||||||||||||||
| Interchange revenue | 3,696 | 3,412 | 3,590 | 7,108 | 6,870 | ||||||||||||||
| Loss on sales of investment securities, net | (869 | ) | (648 | ) | (101 | ) | (1,517 | ) | (101 | ) | |||||||||
| Gain on repurchase of subordinated debt, net | 676 | — | — | 676 | — | ||||||||||||||
| Gain (loss) on sales of other real estate owned, net | 819 | — | (162 | ) | 819 | (121 | ) | ||||||||||||
| Impairment on commercial mortgage servicing rights | — | — | (869 | ) | — | (1,263 | ) | ||||||||||||
| Company-owned life insurance | 891 | 876 | 840 | 1,767 | 1,859 | ||||||||||||||
| Other income | 4,054 | 2,755 | 2,484 | 6,809 | 4,345 | ||||||||||||||
| Total noninterest income | 18,753 | 15,779 | 14,613 | 34,532 | 30,226 | ||||||||||||||
| Noninterest expense: | |||||||||||||||||||
| Salaries and employee benefits | 22,857 | 24,243 | 22,645 | 47,100 | 44,515 | ||||||||||||||
| Occupancy and equipment | 3,879 | 4,443 | 3,489 | 8,322 | 7,244 | ||||||||||||||
| Data processing | 6,544 | 6,311 | 6,082 | 12,855 | 11,955 | ||||||||||||||
| Professional | 1,663 | 1,760 | 1,516 | 3,423 | 3,488 | ||||||||||||||
| Amortization of intangible assets | 1,208 | 1,291 | 1,318 | 2,499 | 2,716 | ||||||||||||||
| FDIC insurance | 1,196 | 1,329 | 826 | 2,525 | 1,656 | ||||||||||||||
| Other expense | 5,547 | 5,105 | 5,463 | 10,652 | 10,649 | ||||||||||||||
| Total noninterest expense | 42,894 | 44,482 | 41,339 | 87,376 | 82,223 | ||||||||||||||
| Income before income taxes | 28,820 | 28,666 | 29,167 | 57,486 | 56,556 | ||||||||||||||
| Income taxes | 7,245 | 6,894 | 7,284 | 14,139 | 13,924 | ||||||||||||||
| Net income | 21,575 | 21,772 | 21,883 | 43,347 | 42,632 | ||||||||||||||
| Preferred stock dividends | 2,228 | 2,228 | — | 4,456 | — | ||||||||||||||
| Net income available to common shareholders | $ | 19,347 | $ | 19,544 | $ | 21,883 | $ | 38,891 | $ | 42,632 | |||||||||
| Basic earnings per common share | $ | 0.86 | $ | 0.86 | $ | 0.97 | $ | 1.72 | $ | 1.89 | |||||||||
| Diluted earnings per common share | $ | 0.86 | $ | 0.86 | $ | 0.97 | $ | 1.72 | $ | 1.89 | |||||||||
| MIDLAND STATES BANCORP, INC. | |||||||||||||||||||
| RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) | |||||||||||||||||||
| Adjusted Earnings Reconciliation | |||||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
| (dollars in thousands, except per share data) | 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||
| Income before income taxes - GAAP | $ | 28,820 | $ | 28,666 | $ | 29,167 | $ | 57,486 | $ | 56,556 | |||||||||
| Adjustments to noninterest income: | |||||||||||||||||||
| Loss on sales of investment securities, net | 869 | 648 | 101 | 1,517 | 101 | ||||||||||||||
| (Gain) on repurchase of subordinated debt | (676 | ) | — | — | (676 | ) | — | ||||||||||||
| Total adjustments to noninterest income | 193 | 648 | 101 | 841 | 101 | ||||||||||||||
| Adjustments to noninterest expense: | |||||||||||||||||||
| Integration and acquisition expenses | — | — | (324 | ) | — | (415 | ) | ||||||||||||
| Total adjustments to noninterest expense | — | — | (324 | ) | — | (415 | ) | ||||||||||||
| Adjusted earnings pre tax - non-GAAP | 29,013 | 29,314 | 29,592 | 58,327 | 57,072 | ||||||||||||||
| Adjusted earnings tax | 7,297 | 7,069 | 7,401 | 14,366 | 14,066 | ||||||||||||||
| Adjusted earnings - non-GAAP | 21,716 | 22,245 | 22,191 | 43,961 | 43,006 | ||||||||||||||
| Preferred stock dividends | 2,228 | 2,228 | — | 4,456 | — | ||||||||||||||
| Adjusted earnings available to common shareholders | $ | 19,487 | $ | 20,017 | $ | 22,191 | $ | 39,505 | $ | 43,006 | |||||||||
| Adjusted diluted earnings per common share | $ | 0.87 | $ | 0.88 | $ | 0.98 | $ | 1.75 | $ | 1.90 | |||||||||
| Adjusted return on average assets | 1.10 | % | 1.15 | % | 1.21 | % | 1.12 | % | 1.18 | % | |||||||||
| Adjusted return on average shareholders' equity | 11.21 | % | 11.76 | % | 13.84 | % | 11.48 | % | 13.34 | % | |||||||||
| Adjusted return on average tangible common equity | 16.10 | % | 17.11 | % | 19.41 | % | 16.60 | % | 18.65 | % | |||||||||
| Adjusted Pre-Tax, Pre-Provision Earnings Reconciliation | |||||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
| (dollars in thousands) | 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||
| Adjusted earnings pre tax - non-GAAP | $ | 29,013 | $ | 29,314 | $ | 29,592 | $ | 58,327 | $ | 57,072 | |||||||||
| Provision for credit losses | 5,879 | 3,135 | 5,441 | 9,014 | 9,608 | ||||||||||||||
| Impairment on commercial mortgage servicing rights | — | — | 869 | — | 1,263 | ||||||||||||||
| Adjusted pre-tax, pre-provision earnings - non-GAAP | $ | 34,892 | $ | 32,449 | $ | 35,902 | $ | 67,341 | $ | 67,943 | |||||||||
| Adjusted pre-tax, pre-provision return on average assets | 1.76 | % | 1.67 | % | 1.95 | % | 1.72 | % | 1.87 | % | |||||||||
| MIDLAND STATES BANCORP, INC. | |||||||||||||||||||
| RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued) | |||||||||||||||||||
| Efficiency Ratio Reconciliation | |||||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
| (dollars in thousands) | 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||
| Noninterest expense - GAAP | $ | 42,894 | $ | 44,482 | $ | 41,339 | $ | 87,376 | $ | 82,223 | |||||||||
| Integration and acquisition expenses | — | — | (324 | ) | — | (415 | ) | ||||||||||||
| Adjusted noninterest expense | $ | 42,894 | $ | 44,482 | $ | 41,015 | $ | 87,376 | $ | 81,808 | |||||||||
| Net interest income - GAAP | $ | 58,840 | $ | 60,504 | $ | 61,334 | $ | 119,344 | $ | 118,161 | |||||||||
| Effect of tax-exempt income | 195 | 244 | 321 | 439 | 690 | ||||||||||||||
| Adjusted net interest income | 59,035 | 60,748 | 61,655 | 119,783 | 118,851 | ||||||||||||||
| Noninterest income - GAAP | 18,753 | 15,779 | 14,613 | 34,532 | 30,226 | ||||||||||||||
| Impairment on commercial mortgage servicing rights | — | — | 869 | — | 1,263 | ||||||||||||||
| Loss on sales of investment securities, net | 869 | 648 | 101 | 1,517 | 101 | ||||||||||||||
| (Gain) on repurchase of subordinated debt | (676 | ) | — | — | (676 | ) | — | ||||||||||||
| Adjusted noninterest income | 18,946 | 16,427 | 15,583 | 35,373 | 31,590 | ||||||||||||||
| Adjusted total revenue | $ | 77,980 | $ | 77,175 | $ | 77,238 | $ | 155,156 | $ | 150,441 | |||||||||
| Efficiency ratio | 55.01 | % | 57.64 | % | 53.10 | % | 56.32 | % | 54.38 | % | |||||||||
| Return on Average Tangible Common Equity (ROATCE) | |||||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
| (dollars in thousands) | 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||
| Net income available to common shareholders | $ | 19,347 | $ | 19,544 | $ | 21,883 | $ | 38,891 | $ | 42,632 | |||||||||
| Average total shareholders' equity—GAAP | $ | 776,791 | $ | 767,186 | $ | 643,004 | $ | 772,015 | $ | 650,126 | |||||||||
| Adjustments: | |||||||||||||||||||
| Preferred Stock | (110,548 | ) | (110,548 | ) | — | (110,548 | ) | — | |||||||||||
| Goodwill | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | |||||||||
| Other intangible assets, net | (18,937 | ) | (20,184 | ) | (22,570 | ) | (19,557 | ) | (23,101 | ) | |||||||||
| Average tangible common equity | $ | 485,402 | $ | 474,550 | $ | 458,530 | $ | 480,006 | $ | 465,121 | |||||||||
| ROATCE | 15.99 | % | 16.70 | % | 19.14 | % | 16.34 | % | 18.48 | % | |||||||||
| MIDLAND STATES BANCORP, INC. | |||||||||||||||||||
| RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued) | |||||||||||||||||||
| Tangible Common Equity to Tangible Assets Ratio and Tangible Book Value Per Share | |||||||||||||||||||
| As of | |||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||||
| (dollars in thousands, except per share data) | 2023 | 2023 | 2022 | 2022 | 2022 | ||||||||||||||
| Shareholders' Equity to Tangible Common Equity | |||||||||||||||||||
| Total shareholders' equity—GAAP | $ | 776,821 | $ | 775,643 | $ | 758,574 | $ | 739,279 | $ | 636,188 | |||||||||
| Adjustments: | |||||||||||||||||||
| Preferred Stock | (110,548 | ) | (110,548 | ) | (110,548 | ) | (110,548 | ) | — | ||||||||||
| Goodwill | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | |||||||||
| Other intangible assets, net | (18,367 | ) | (19,575 | ) | (20,866 | ) | (22,198 | ) | (23,559 | ) | |||||||||
| Tangible common equity | $ | 486,002 | $ | 483,616 | $ | 465,256 | $ | 444,629 | $ | 450,725 | |||||||||
| Less: Accumulated other comprehensive income (AOCI) | (84,719 | ) | (77,797 | ) | (83,797 | ) | (78,383 | ) | (53,097 | ) | |||||||||
| Tangible common equity excluding AOCI | 570,721 | 561,413 | 549,053 | 523,012 | 503,822 | ||||||||||||||
| Total Assets to Tangible Assets: | |||||||||||||||||||
| Total assets—GAAP | $ | 8,034,721 | $ | 7,930,174 | $ | 7,855,501 | $ | 7,821,877 | $ | 7,435,812 | |||||||||
| Adjustments: | |||||||||||||||||||
| Goodwill | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | (161,904 | ) | |||||||||
| Other intangible assets, net | (18,367 | ) | (19,575 | ) | (20,866 | ) | (22,198 | ) | (23,559 | ) | |||||||||
| Tangible assets | $ | 7,854,450 | $ | 7,748,695 | $ | 7,672,731 | $ | 7,637,775 | $ | 7,250,349 | |||||||||
| Common Shares Outstanding | 21,854,800 | 22,111,454 | 22,214,913 | 22,074,740 | 22,060,255 | ||||||||||||||
| Tangible Common Equity to Tangible Assets | 6.19 | % | 6.24 | % | 6.06 | % | 5.82 | % | 6.22 | % | |||||||||
| Tangible Book Value Per Share | $ | 22.24 | $ | 21.87 | $ | 20.94 | $ | 20.14 | $ | 20.43 | |||||||||
| Tangible Book Value Per Share excluding AOCI | $ | 26.11 | $ | 25.39 | $ | 24.72 | $ | 23.69 | $ | 22.84 | |||||||||
