Midland States Bancorp : Q1 2021 Midland States Bancorp, Inc. Earnings Call Presentation

Midland States Bancorp, Inc.

NASDAQ: MSBI

First Quarter 2021 Earnings Call

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Forward-LookingStatements. This presentation may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements expressing management's current expectations, forecasts of future events or long-term goals may be based upon beliefs, expectations and assumptions of Midland's management, and are generally identifiable by the use of words such as "believe," "expect," "anticipate," "plan," "intend," "estimate," "may," "will," "would," "could," "should" or other similar expressions. All statements in this presentation speak only as of the date they are made, and Midland undertakes no obligation to update any statement. A number of factors, many of which are beyond the ability of Midland to control or predict, could cause actual results to differ materially from those in its forward-looking statements including the effects of the Coronavirus Disease 2019 ("COVID-19") pandemic, including its potential effects on the economic environment, our customers and our operations, as well as any changes to federal, state or local government laws, regulations or orders in connection with the pandemic. These risks and uncertainties should be considered in evaluating forward-looking statements, and undue reliance should not be placed on such statements. Additional information concerning Midland and its businesses, including additional factors that could materially affect Midland's financial results, are included in Midland's filings with the Securities and Exchange Commission.

Use of Non-GAAPFinancial Measures. This presentation may contain certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States ("GAAP"). These non-GAAP financial measures include "Adjusted Earnings," "Adjusted Pre-Tax,Pre-Provision Income," "Adjusted Diluted Earnings Per Share," "Adjusted Return on Average Assets," "Adjusted Return on Average Shareholders' Equity," "Adjusted Return on Average Tangible Common Equity," "Adjusted Pre-Tax, 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 that these non-GAAP financial measures provide both management and investors a more complete understanding of the Company's funding profile and profitability. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures. 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. Reconciliations of these non-GAAP measures are provided in the Appendix section of this presentation.

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Overview of 1Q21

		1Q21 Earnings	• Net income of $18.5 million, or $0.81 diluted EPS
		• Adjusted Pre-Tax,Pre-Provision (PTPP) Income(1) of $29.1 million
			• Efficiency ratio improves to 56.9% from 58.6% in 4Q20
		Improving
		• Return on average shareholders' equity of 12.04%
		Performance Metrics	• Return on average tangible common equity(1) of 17.28%
			• Adjusted PTPP ROAA(1) of 1.75%
		Increases in	• All capital ratios increased between 21 and 49 basis points from prior quarter
		Capital Ratios and
		• Book value and tangible book value per share(1) increased 2.2% and 3.5%, respectively
		Book Value
			• Total loan balances declined $192.5 million due to elevated payoffs/paydowns
		Loan and
		• Stable asset quality resulted in decline in provision for credit losses
		Deposit Trends
		• Total deposits increased $239.5 million driven by growth in demand deposits
			• Further scales Wealth Management business
		Announced
		• Adds specialized expertise expected to positively impact new business development
		Acquisition of
		ATG Trust Company	• Continues to grow recurring fee income
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Notes:
	(1) Represents a non-GAAP financial measure. See "Non-GAAP Reconciliation" in the appendix.

Paycheck Protection Program Overview

Paycheck Protection Program

(as of 3/31/21)

Loans Outstanding	$211.6 million
Round 1	$132.2 million
Round 2	$79.3 million
Total Fees Earned	$13.7 million
Fees Recognized in 1Q21	$2.1 million
Remaining Fees to be Recognized	$6.0 million

Paycheck Protection Program

Loan Forgiveness

	As of 12/31/20	As of 3/31/21
Loans Submitted to SBA	$155.6 million	$196.5 million
Loans Forgiven by SBA	$93.2 million	$146.0 million
Percentage of Total Round 1	33.6%	52.6%
PPP Loans Forgiven

Impact on 1Q21 Financials

	At or for the	Metrics Excluding
	Three Months Ended 3/31/21	PPP Impact
Total Loans	$4.91 billion	$4.70 billion
Average Loans	$4.99 billion	$4.80 billion
Net Interest Income FTE(1)	$52.3 million	$49.6 million
Net Interest Margin(1)	3.45%	3.38%
ACL/Total Loans	1.28%	1.33%

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1. Loan fees and deferred loan origination costs being amortized over an estimated 24 to 60 month life of PPP loans

Loan Deferral Overview

Total Loan Deferrals

	As of	As of	As of
	Sept. 30, 2020	Dec. 31, 2020	Mar. 31, 2021
Total Loans Deferred	$279.3 million	$209.1 million	$219.1 million
% of Total Loans	5.7%	4.1%	4.5%

Deferrals by Industry

Deferral Type

(as of March 31, 2021)

Full Payment Deferral	$131.9 million
Deferred Loans Making	$87.2 million
I/O or Other Payments

		(as of March 31, 2021)
		($ in millions)
		All Others <4%
RE Rental & Leasing	$35.4
16%
$8.3
4%
		Hotels/Motels
Assisted Living	$117.4
$21.8		54%
10%		Transit & Ground
		Passenger

$36.2 16%

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