• Midland States Bancorp, Inc. Announces 2022 Third Quarter Results

    المصدر: Nasdaq GlobeNewswire / 20 أكتوبر 2022 15:10:01   America/Chicago

    Summary

    • Net income of $23.5 million, or $1.04 diluted earnings per share
    • ROAA of 1.22%, ROAE of 13.34% and ROATCE of 20.24%
    • Total loans increased 27.8% annualized from prior quarter
    • Continued growth in noninterest-bearing and total deposits
    • Nonperforming assets declined 14.2% from end of prior quarter
    • Total capital ratio strengthened with the recent preferred stock offering

    EFFINGHAM, Ill., Oct. 20, 2022 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (Nasdaq: MSBI) (the “Company”) today reported net income of $23.5 million, or $1.04 diluted earnings per share, for the third quarter of 2022. This compares to net income of $21.9 million, or $0.97 diluted earnings per share, for the second quarter of 2022. This also compares to net income of $19.5 million, or $0.86 diluted earnings per share, for the third quarter of 2021.

    Jeffrey G. Ludwig, President and Chief Executive Officer of the Company, said, “We continue to see healthy economic conditions throughout our markets and strong loan demand. Our commercial banking teams are effectively capitalizing on the loan demand across all areas of our lending, resulting in well balanced loan production and 28% annualized growth in total loans during the third quarter. The strong loan growth helped us to generate further improvement in earnings and our level of returns.

    “Following the capital raised through our preferred stock offering in the third quarter, we are well positioned to support continued balance sheet growth, although we expect our level of loan growth to moderate as higher interest rates and economic uncertainty have a greater impact on loan demand. Even with a lower level of loan growth, given our higher net interest margin and increased efficiencies, we believe we can continue to generate strong financial results for our shareholders, which will help us to further increase our capital ratios and support the continued growth of our franchise,” said Mr. Ludwig.

    Net Interest Margin

    Net interest margin for the third quarter of 2022 was 3.63%, a slight decline from 3.65% for the second quarter of 2022 as an increase in the cost of deposits more than offset the increase in the average yield on earning assets. The Company’s net interest margin benefits from accretion income on purchased loan portfolios, which contributed 3 basis points to net interest margin in both the second and third quarters of 2022.

    Relative to the third quarter of 2021, net interest margin increased 29 basis points from 3.34%, primarily due to an increase in the average yield on earning assets. Accretion income on purchased loan portfolios contributed 7 basis points to net interest margin in the third quarter of 2021. Excluding the impact of accretion income, net interest margin increased 33 basis points from the third quarter of 2021.  

    Net Interest Income

    Net interest income for the third quarter of 2022 was $64.0 million, an increase of 4.4% from $61.3 million for the second quarter of 2022, which was primarily due to higher average loan balances. Accretion income associated with purchased loan portfolios totaled $0.5 million for the third quarter of 2022, compared with $0.6 million for the second quarter of 2022.

    Relative to the third quarter of 2021, net interest income increased $12.6 million, or 24.6%, due to higher average earning assets and an increase in net interest margin. Accretion income for the third quarter of 2021 was $1.0 million.

    Noninterest Income

    Noninterest income for the third quarter of 2022 was $15.8 million, an increase of 8.3% from $14.6 million for the second quarter of 2022. The increase in noninterest income was primarily attributable to impairment on commercial mortgage servicing rights of approximately $0.9 million that negatively impacted noninterest income in the second quarter of 2022.

    Relative to the third quarter of 2021, noninterest income increased 4.5% from $15.1 million. The increase was primarily attributable to impairment on commercial mortgage servicing rights that negatively impacted noninterest income in the third quarter of 2021.

    Wealth management revenue for the third quarter of 2022 was $6.2 million, an increase of 0.9% from $6.1 million in the second quarter of 2022. Compared to the third quarter of 2021, wealth management revenue decreased 13.6%, primarily due to a decline in assets under administration resulting from market performance.

    Noninterest Expense

    Noninterest expense for the third quarter of 2022 was $43.5 million, an increase of 5.2% from $41.3 million in the second quarter of 2022. The increase was attributable to small increases across most expense items consistent with the growth of the Company including the full quarter impact of the branch purchase completed in June 2022.

    Relative to the third quarter of 2021, noninterest expense increased 5.3% from $41.3 million, primarily due to higher marketing, loan, and other expense.

    Loan Portfolio

    Total loans outstanding were $6.20 billion at September 30, 2022, compared with $5.80 billion at June 30, 2022, and $4.92 billion at September 30, 2021. The increase in total loans from June 30, 2022 was attributable to growth in all portfolios with the exception of the SBA PPP loan portfolio, which continues to decline as loans are forgiven.

    Equipment finance balances increased $49.4 million from June 30, 2022 to $1.03 billion at September 30, 2022.  

    Compared to loan balances at September 30, 2021, growth in equipment finance balances, other commercial loans, commercial real estate loans, and consumer loans was partially offset by declines in commercial FHA warehouse lines and PPP loans.

    Deposits

    Total deposits were $6.40 billion at September 30, 2022, compared with $6.18 billion at June 30, 2022, and $5.60 billion at September 30, 2021. The increase in total deposits from the end of the prior quarter was primarily attributable to growth in noninterest-bearing and lower-cost interest-bearing deposits.

    Asset Quality

    Nonperforming loans totaled $46.9 million, or 0.76% of total loans, at September 30, 2022, compared with $56.9 million, or 0.98% of total loans, at June 30, 2022. The decrease in nonperforming loans was attributable to a combination of paydowns, note sale, and a charge off of a previously resolved loan relationship. At September 30, 2021, nonperforming loans totaled $54.6 million, or 1.11% of total loans.

    Net charge-offs for the third quarter of 2022 were $3.2 million, or 0.21% of average loans on an annualized basis, compared to net charge-offs of $2.8 million, or 0.20% of average loans on an annualized basis, for the second quarter of 2022, and $3.0 million, or 0.25% of average loans on an annualized basis, for the third quarter of 2021.  

    The Company recorded a provision for credit losses on loans of $7.0 million for the third quarter of 2022, which was primarily related to the growth in total loans and negative economic forecasts.

    The Company’s allowance for credit losses on loans was 0.95% of total loans and 125.1% of nonperforming loans at September 30, 2022, compared with 0.95% of total loans and 96.5% of nonperforming loans at June 30, 2022.

    Capital

    During the third quarter of 2022, the Company raised $115 million of capital through a preferred stock offering, which increased its total capital, tier 1 capital, and tier 1 leverage ratios. At September 30, 2022, 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:

     Bank Level
    Ratios as of
    Sept. 30, 2022    		Consolidated
    Ratios as of
    Sept. 30, 2022    		Minimum
    Regulatory
    Requirements (2)
    Total capital to risk-weighted assets11.19%12.79%10.50%
    Tier 1 capital to risk-weighted assets10.43%10.05%8.50%
    Tier 1 leverage ratio9.75%9.40%4.00%
    Common equity Tier 1 capital10.43%7.56%7.00%
    Tangible common equity to tangible assets (1)NA5.82%NA

    (1)   A non-GAAP financial measure. Refer to page 14 for a reconciliation to the comparable GAAP financial measure.
    (2)   Includes the capital conservation buffer of 2.5%.

    Since the beginning of 2022, the impact of rising interest rates on the Company’s investment portfolio has resulted in a $83.6 million decline in accumulated other comprehensive income (AOCI), which has negatively impacted tangible book value per share by $3.55, and the tangible common equity to tangible assets ratio by 103 basis points.

    Stock Repurchase Program

    During the third quarter of 2022, the Company did not repurchase any shares under its stock repurchase program. As of September 30, 2022, the Company had $18.6 million remaining under the current stock repurchase authorization.

    Conference Call, Webcast and Slide Presentation

    The Company will host a conference call and webcast at 7:30 a.m. Central Time on Friday, October 21, 2022, to discuss its financial results.

    Telephone Access: https://register.vevent.com/register/BIe092c94fe0b7469db1a7031df0e48485

    A slide presentation relating to the third quarter 2022 financial results will be accessible prior to the scheduled conference call. This earnings release should be read together with the slide presentation. 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 at investors.midlandsb.com under the “News and Events” tab.

    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 September 30, 2022, the Company had total assets of approximately $7.81 billion, and its Wealth Management Group had assets under administration of approximately $3.45 billion. Midland 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 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” 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, the effects of the COVID-19 pandemic and its potential effects on the economic environment; 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 jludwig@midlandsb.com or (217) 342-7321
    Eric T. Lemke, Chief Financial Officer, at elemke@midlandsb.com or (217) 342-7321
    Douglas J. Tucker, SVP and Corporate Counsel, at dtucker@midlandsb.com or (217) 342-7321

                         
    MIDLAND STATES BANCORP, INC.
    CONSOLIDATED FINANCIAL SUMMARY (unaudited)
                         
      For the Quarter Ended
      September 30, June 30, March 31, December 31, September 30,
    (dollars in thousands, except per share data) 2022 2022 2022 2021 2021
    Earnings Summary                    
    Net interest income $64,024  $61,334  $56,827  $54,301  $51,396 
    Provision for credit losses  6,974   5,441   4,167   467   (184)
    Noninterest income  15,826   14,613   15,613   22,523   15,143 
    Noninterest expense  43,496   41,339   40,884   45,757   41,292 
    Income before income taxes  29,380   29,167   27,389   30,600   25,431 
    Income taxes  5,859   7,284   6,640   7,493   5,883 
    Net income $23,521  $21,883  $20,749  $23,107  $19,548 
                         
    Diluted earnings per common share $1.04  $0.97  $0.92  $1.02  $0.86 
    Weighted average shares outstanding - diluted  22,390,438   22,360,819   22,350,307   22,350,771   22,577,880 
    Return on average assets  1.22%  1.19%  1.16%  1.26%  1.15%
    Return on average shareholders' equity  13.31%  13.65%  12.80%  14.04%  11.90%
    Return on average tangible common equity (1)  20.20%  19.14%  17.84%  19.69%  16.76%
    Net interest margin  3.63%  3.65%  3.50%  3.25%  3.34%
    Efficiency ratio (1)  54.26%  53.10%  55.73%  52.61%  58.78%
                         
    Adjusted Earnings Performance Summary (1)                    
    Adjusted earnings $23,568  $22,191  $20,815  $25,416  $19,616 
    Adjusted diluted earnings per common share $1.04  $0.98  $0.92  $1.12  $0.86 
    Adjusted return on average assets  1.22%  1.21%  1.16%  1.39%  1.15%
    Adjusted return on average shareholders' equity  13.34%  13.84%  12.84%  15.44%  11.94%
    Adjusted return on average tangible common equity  20.24%  19.41%  17.89%  21.65%  16.82%
    Adjusted pre-tax, pre-provision earnings $36,415  $35,902  $32,041  $36,324  $28,379 
    Adjusted pre-tax, pre-provision return on average assets  1.89%  1.95%  1.79%  1.98%  1.67%
                         
    (1) Non-GAAP financial measures. Refer to pages 12 - 14 for a reconciliation to the comparable GAAP financial measures. 
                         


                    
    MIDLAND STATES BANCORP, INC.
    CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                    
      For the Quarter Ended
      September 30, June 30, March 31, December 31, September 30,
    (in thousands, except per share data) 2022 2022 2022 2021 2021
    Net interest income:               
    Interest income $79,556  $69,236  $62,748  $60,427  $58,490 
    Interest expense  15,532   7,902   5,921   6,126   7,094 
    Net interest income  64,024   61,334   56,827   54,301   51,396 
    Provision for credit losses:               
    Provision for credit losses on loans  6,974   4,741   4,132   —   — 
    Provision for credit losses on unfunded commitments  —   700   256   388   — 
    Provision for other credit losses  —   —   (221)  79   (184)
    Total provision for credit losses  6,974   5,441   4,167   467   (184)
    Net interest income after provision for credit losses  57,050   55,893   52,660   53,834   51,580 
    Noninterest income:               
    Wealth management revenue  6,199   6,143   7,139   7,176   7,175 
    Residential mortgage banking revenue  210   384   599   1,103   1,287 
    Service charges on deposit accounts  2,597   2,304   2,068   2,338   2,268 
    Interchange revenue  3,531   3,590   3,280   3,677   3,651 
    (Loss) gain on sales of investment securities, net  (129)  (101)  —   —   160 
    Gain on termination of hedged interest swap  —   —   —   1,845   — 
    Impairment on commercial mortgage servicing rights  —   (869)  (394)  (2,072)  (3,037)
    Company-owned life insurance  929   840   1,019   1,904   869 
    Other income  2,489   2,322   1,902   6,552   2,770 
    Total noninterest income  15,826   14,613   15,613   22,523   15,143 
    Noninterest expense:               
    Salaries and employee benefits  22,889   22,645   21,870   22,109   22,175 
    Occupancy and equipment  3,850   3,489   3,755   3,429   3,701 
    Data processing  6,093   6,082   5,873   5,819   6,495 
    Professional  1,693   1,516   1,972   1,499   1,738 
    Amortization of intangible assets  1,361   1,318   1,398   1,425   1,445 
    Loss on mortgage servicing rights held for sale  —   —   —   —   79 
    FHLB advances prepayment fees  —   —   —   4,859   — 
    Other expense  7,610   6,289   6,016   6,617   5,659 
    Total noninterest expense  43,496   41,339   40,884   45,757   41,292 
    Income before income taxes  29,380   29,167   27,389   30,600   25,431 
    Income taxes  5,859   7,284   6,640   7,493   5,883 
    Net income $23,521  $21,883  $20,749  $23,107  $19,548 
                    
    Basic earnings per common share $1.04  $0.97  $0.92  $1.03  $0.86 
    Diluted earnings per common share $1.04  $0.97  $0.92  $1.02  $0.86 
                    


                    
    MIDLAND STATES BANCORP, INC.
    CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                    
      As of
      September 30, June 30, March 31, December 31, September 30,
    (in thousands) 2022 2022 2022 2021 2021
    Assets               
    Cash and cash equivalents $313,188  $270,117  $332,264  $680,371  $662,643 
    Investment securities  690,504   769,278   858,246   916,132   900,319 
    Loans  6,198,451   5,795,544   5,539,961   5,224,801   4,915,554 
    Allowance for credit losses on loans  (58,639)  (54,898)  (52,938)  (51,062)  (55,675)
    Total loans, net  6,139,812   5,740,646   5,487,023   5,173,739   4,859,879 
    Loans held for sale  4,338   5,298   8,931   32,045   26,621 
    Premises and equipment, net  77,519   77,668   77,857   79,220   79,701 
    Other real estate owned  11,141   11,131   11,537   12,059   11,931 
    Loan servicing rights, at lower of cost or fair value  1,297   25,879   27,484   28,865   30,916 
    Commercial FHA mortgage loan servicing rights held for sale  23,995   —   —   —   — 
    Goodwill  161,904   161,904   161,904   161,904   161,904 
    Other intangible assets, net  22,198   23,559   22,976   24,374   26,065 
    Company-owned life insurance  149,648   148,900   148,060   148,378   149,146 
    Other assets  226,333   201,432   202,433   186,718   184,834 
    Total assets $7,821,877  $7,435,812  $7,338,715  $7,443,805  $7,093,959 
                    
    Liabilities and Shareholders' Equity               
    Noninterest-bearing demand deposits $2,025,237  $1,972,261  $1,965,032  $2,245,701  $1,672,901 
    Interest-bearing deposits  4,370,015   4,212,177   4,092,507   3,864,947   3,928,475 
    Total deposits  6,395,252   6,184,438   6,057,539   6,110,648   5,601,376 
    Short-term borrowings  58,518   67,689   60,352   76,803   66,666 
    FHLB advances and other borrowings  360,000   285,000   310,171   310,171   440,171 
    Subordinated debt  139,370   139,277   139,184   139,091   138,998 
    Trust preferred debentures  49,824   49,674   49,524   49,374   49,235 
    Other liabilities  79,634   73,546   76,959   93,881   139,669 
    Total liabilities  7,082,598   6,799,624   6,693,729   6,779,968   6,436,115 
    Total shareholders’ equity  739,279   636,188   644,986   663,837   657,844 
    Total liabilities and shareholders’ equity $7,821,877  $7,435,812  $7,338,715  $7,443,805  $7,093,959 
                    


                         
    MIDLAND STATES BANCORP, INC.
    CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                         
      As of
      September 30, June 30, March 31, December 31, September 30,
    (in thousands) 2022 2022 2022 2021 2021
    Loan Portfolio                    
    Equipment finance loans $577,323  $546,267  $528,572  $521,973  $486,623 
    Equipment finance leases  457,611   439,202   429,000   423,280   412,430 
    Commercial FHA warehouse lines  51,309   23,872   83,999   91,927   180,248 
    SBA PPP loans  2,810   6,409   22,862   52,477   82,410 
    Other commercial loans  904,840   814,710   802,692   783,811   718,054 
    Total commercial loans and leases  1,993,893   1,830,460   1,867,125   1,873,468   1,879,765 
    Commercial real estate  2,466,303   2,335,655   2,114,041   1,816,828   1,562,013 
    Construction and land development  225,550   203,955   188,668   193,749   200,792 
    Residential real estate  356,225   340,103   329,331   338,151   344,414 
    Consumer  1,156,480   1,085,371   1,040,796   1,002,605   928,570 
    Total loans $6,198,451  $5,795,544  $5,539,961  $5,224,801  $4,915,554 
                         
    Deposit Portfolio                    
    Noninterest-bearing demand $2,025,237  $1,972,261  $1,965,032  $2,245,701  $1,672,901 
    Interest-bearing:                    
    Checking  1,905,439   1,808,885   1,779,018   1,663,021   1,697,326 
    Money market  1,125,333   1,027,547   964,352   869,067   852,836 
    Savings  704,245   740,364   710,955   679,115   665,710 
    Time  620,960   620,363   619,386   630,583   688,693 
    Brokered time  14,038   15,018   18,796   23,161   23,910 
    Total deposits $6,395,252  $6,184,438  $6,057,539  $6,110,648  $5,601,376 
                         


                         
    MIDLAND STATES BANCORP, INC.
    CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                         
      For the Quarter Ended
      September 30, June 30, March 31, December 31, September 30,
    (dollars in thousands) 2022 2022 2022 2021 2021
    Average Balance Sheets                    
    Cash and cash equivalents $195,657  $226,517  $384,231  $685,655  $525,848 
    Investment securities  749,022   818,927   894,634   915,707   773,372 
    Loans  6,040,358   5,677,791   5,274,051   4,995,794   4,800,063 
    Loans held for sale  6,044   9,865   31,256   34,272   15,204 
    Nonmarketable equity securities  37,765   36,338   36,378   39,203   43,873 
    Total interest-earning assets  7,028,846   6,769,438   6,620,550   6,670,631   6,158,360 
    Non-earning assets  618,138   615,348   631,187   605,060   597,153 
    Total assets $7,646,984  $7,384,786  $7,251,737  $7,275,691  $6,755,513 
                         
    Interest-bearing deposits $4,325,098  $4,152,764  $3,953,249  $3,913,475  $3,895,970 
    Short-term borrowings  58,271   59,301   70,044   66,677   68,103 
    FHLB advances and other borrowings  340,163   307,611   311,282   319,954   440,171 
    Subordinated debt  139,324   139,232   139,139   139,046   138,954 
    Trust preferred debentures  49,751   49,602   49,451   49,307   49,167 
    Total interest-bearing liabilities  4,912,607   4,708,510   4,523,165   4,488,459   4,592,365 
    Noninterest-bearing deposits  1,969,873   1,967,263   1,989,413   2,049,802   1,434,193 
    Other noninterest-bearing liabilities  63,638   66,009   81,832   84,538   77,204 
    Shareholders' equity  700,866   643,004   657,327   652,892   651,751 
    Total liabilities and shareholders' equity $7,646,984  $7,384,786  $7,251,737  $7,275,691  $6,755,513 
                         
    Yields                    
    Earning Assets                    
    Cash and cash equivalents  2.28%  0.83%  0.18%  0.16%  0.16%
    Investment securities  2.44%  2.41%  2.22%  2.12%  2.34%
    Loans  4.83%  4.49%  4.40%  4.36%  4.42%
    Loans held for sale  3.87%  3.15%  2.86%  3.53%  2.79%
    Nonmarketable equity securities  5.78%  5.38%  5.40%  5.07%  5.05%
    Total interest-earning assets  4.51%  4.12%  3.87%  3.62%  3.79%
                         
    Interest-Bearing Liabilities                    
    Interest-bearing deposits  0.94%  0.37%  0.22%  0.22%  0.26%
    Short-term borrowings  0.19%  0.15%  0.14%  0.12%  0.12%
    FHLB advances and other borrowings  2.83%  1.87%  1.58%  1.75%  1.80%
    Subordinated debt  5.77%  5.78%  5.78%  5.78%  5.79%
    Trust preferred debentures  6.54%  5.05%  4.21%  3.90%  3.92%
    Total interest-bearing liabilities  1.25%  0.67%  0.53%  0.54%  0.61%
                         
    Cost of Deposits  0.65%  0.25%  0.15%  0.15%  0.19%
                         
    Net Interest Margin  3.63%  3.65%  3.50%  3.25%  3.34%
                         


                         
    MIDLAND STATES BANCORP, INC.
    CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
                         
      As of and for the Quarter Ended
      September 30, June 30, March 31, December 31, September 30,
    (dollars in thousands, except per share data) 2022 2022 2022 2021 2021
    Asset Quality                    
    Loans 30-89 days past due $28,275  $16,212  $29,044  $17,514  $16,772 
    Nonperforming loans  46,882   56,883   52,900   42,580   54,620 
    Nonperforming assets  59,524   69,344   66,164   57,068   69,261 
    Net charge-offs  3,233   2,781   2,256   4,613   2,989 
    Loans 30-89 days past due to total loans  0.46%  0.28%  0.52%  0.34%  0.34%
    Nonperforming loans to total loans  0.76%  0.98%  0.95%  0.81%  1.11%
    Nonperforming assets to total assets  0.76%  0.93%  0.90%  0.77%  0.98%
    Allowance for credit losses to total loans  0.95%  0.95%  0.96%  0.98%  1.13%
    Allowance for credit losses to nonperforming loans  125.08%  96.51%  100.07%  119.92%  101.93%
    Net charge-offs to average loans  0.21%  0.20%  0.17%  0.37%  0.25%
                         
    Wealth Management                    
    Trust assets under administration $3,445,244  $3,597,944  $4,044,138  $4,217,412  $4,058,168 
                         
    Market Data                    
    Book value per share at period end $28.48  $28.84  $29.26  $30.11  $29.64 
    Tangible book value per share at period end (1) $20.14  $20.43  $20.87  $21.66  $21.17 
    Market price at period end $23.57  $24.04  $28.86  $24.79  $24.73 
    Common shares outstanding at period end  22,074,740   22,060,255   22,044,626   22,050,537   22,193,141 
                         
    Capital                    
    Total capital to risk-weighted assets  12.79%  11.44%  11.74%  12.19%  13.10%
    Tier 1 capital to risk-weighted assets  10.05%  8.63%  8.82%  9.16%  9.73%
    Tier 1 common capital to risk-weighted assets  7.56%  7.66%  7.80%  8.08%  8.55%
    Tier 1 leverage ratio  9.40%  7.98%  7.96%  7.75%  8.16%
    Tangible common equity to tangible assets (1)  5.82%  6.22%  6.43%  6.58%  6.80%
                         
    (1) Non-GAAP financial measures. Refer to pages 12 - 14 for a reconciliation to the comparable GAAP financial measures.         
                         


                     
    MIDLAND STATES BANCORP, INC.
    RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited)
                     
    Adjusted Earnings Reconciliation
                     
      For the Quarter Ended
      September 30, June 30, March 31, December 31, September 30,
    (dollars in thousands, except per share data) 2022 2022 2022 2021 2021
    Income before income taxes - GAAP $29,380  $29,167  $27,389  $30,600  $25,431 
    Adjustments to noninterest income:                    
    Loss (gain) on sales of investment securities, net  129   101   —   —   (160)
    (Gain) on termination of hedged interest rate swap  —   —   —   (1,845)  — 
    Total adjustments to noninterest income  129   101   —   (1,845)  (160)
    Adjustments to noninterest expense:                    
    (Loss) on mortgage servicing rights held for sale  —   —   —   —   (79)
    FHLB advances prepayment fees  —   —   —   (4,859)  — 
    Integration and acquisition expenses  68   (324)  (91)  (171)  (176)
    Total adjustments to noninterest expense  68   (324)  (91)  (5,030)  (255)
    Adjusted earnings pre tax  29,441   29,592   27,480   33,785   25,526 
    Adjusted earnings tax  5,873   7,401   6,665   8,369   5,910 
    Adjusted earnings - non-GAAP $23,568  $22,191  $20,815  $25,416  $19,616 
    Adjusted diluted earnings per common share $1.04  $0.98  $0.92  $1.12  $0.86 
    Adjusted return on average assets  1.22%  1.21%  1.16%  1.39%  1.15%
    Adjusted return on average shareholders' equity  13.34%  13.84%  12.84%  15.44%  11.94%
    Adjusted return on average tangible common equity  20.24%  19.41%  17.89%  21.65%  16.82%
                         
                         
    Adjusted Pre-Tax, Pre-Provision Earnings Reconciliation
                     
      For the Quarter Ended
      September 30, June 30, March 31, December 31, September 30,
    (dollars in thousands) 2022 2022 2022 2021 2021
    Adjusted earnings pre tax - non-GAAP $29,441  $29,592  $27,480  $33,785  $25,526 
    Provision for credit losses  6,974   5,441   4,167   467   (184)
    Impairment on commercial mortgage servicing rights  —   869   394   2,072   3,037 
    Adjusted pre-tax, pre-provision earnings - non-GAAP $36,415  $35,902  $32,041  $36,324  $28,379 
    Adjusted pre-tax, pre-provision return on average assets  1.89%  1.95%  1.79%   1.98%  1.67%
                     


                     
    MIDLAND STATES BANCORP, INC.
    RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued)
                     
                     
    Efficiency Ratio Reconciliation
                     
      For the Quarter Ended
      September 30, June 30, March 31, December 31, September 30,
    (dollars in thousands) 2022 2022 2022 2021 2021
    Noninterest expense - GAAP $43,496  $41,339  $40,884  $45,757  $41,292 
    Loss on mortgage servicing rights held for sale  —   —   —   —   (79)
    FHLB advances prepayment fees  —   —   —   (4,859)  — 
    Integration and acquisition expenses  68   (324)  (91)  (171)  (176)
    Adjusted noninterest expense $43,564  $41,015  $40,793  $40,727  $41,037 
                     
    Net interest income - GAAP $64,024  $61,334  $56,827  $54,301  $51,396 
    Effect of tax-exempt income  307   321   369   372   402 
    Adjusted net interest income  64,331   61,655   57,196   54,673   51,798 
                     
    Noninterest income - GAAP  15,826   14,613   15,613   22,523   15,143 
    Impairment on commercial mortgage servicing rights  —   869   394   2,072   3,037 
    Loss (gain) on sales of investment securities, net  129   101   —   —   (160)
    (Gain) on termination of hedged interest rate swap  —   —   —   (1,845)  — 
    Adjusted noninterest income  15,955   15,583   16,007   22,750   18,020 
                     
    Adjusted total revenue $80,286  $77,238  $73,203  $77,423  $69,818 
                     
    Efficiency ratio  54.26%  53.10%  55.73%  52.61%  58.78%
                     


                    
    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
      September 30, June 30, March 31, December 31, September 30,
    (dollars in thousands, except per share data) 2022 2022 2022 2021 2021
    Shareholders' Equity to Tangible Common Equity               
    Total shareholders' equity—GAAP $739,279  $636,188  $644,986  $663,837  $657,844 
    Adjustments:               
    Preferred Stock  (110,548)  —   —   —   — 
    Goodwill  (161,904)  (161,904)  (161,904)  (161,904)  (161,904)
    Other intangible assets, net  (22,198)  (23,559)  (22,976)  (24,374)  (26,065)
    Tangible common equity $444,629  $450,725  $460,106  $477,558  $469,875 
                    
    Total Assets to Tangible Assets:               
    Total assets—GAAP $7,821,877  $7,435,812  $7,338,715  $7,443,805  $7,093,959 
    Adjustments:               
    Goodwill  (161,904)  (161,904)  (161,904)  (161,904)  (161,904)
    Other intangible assets, net  (22,198)  (23,559)  (22,976)  (24,374)  (26,065)
    Tangible assets $7,637,775  $7,250,349  $7,153,835  $7,257,527  $6,905,990 
                    
    Common Shares Outstanding  22,074,740   22,060,255   22,044,626   22,050,537   22,193,141 
                    
    Tangible Common Equity to Tangible Assets  5.82%  6.22%  6.43%  6.58%  6.80%
    Tangible Book Value Per Share $20.14  $20.43  $20.87  $21.66  $21.17 
                    
    Return on Average Tangible Common Equity (ROATCE)
                    
      For the Quarter Ended
      September 30, June 30, March 31, December 31, September 30,
    (dollars in thousands) 2022 2022 2022 2021 2021
    Net income $23,521  $21,883  $20,749  $23,107  $19,548 
                    
    Average total shareholders' equity—GAAP $700,866  $643,004  $657,327  $652,892  $651,751 
    Adjustments:               
    Preferred Stock  (54,072)  —   —   —   — 
    Goodwill  (161,904)  (161,904)  (161,904)  (161,904)  (161,904)
    Other intangible assets, net  (22,859)  (22,570)  (23,638)  (25,311)  (27,132)
    Average tangible common equity $462,031  $458,530  $471,785  $465,677  $462,715 
    ROATCE  20.20%  19.14%  17.84%  19.69%  16.76%



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