On this page of StockholderLetter.com we present the 3/24/2023 shareholder letter from Midland States Bancorp, Inc. — ticker symbol MSBI. Reading current and past MSBI letters to shareholders can bring important insights into the investment thesis.
![In last year s Annual Report I reported that our efforts
to focus on improving operating performance
i i` iV ` i i i > ` w ] L
more importantly that those improvements would
continue to drive shareholder value for years to
come. That has proven true for 2022, in which we
>}> iV `i` iV ` i i i > ` w }
> ` Li `] i i > i i
remain somewhat higher than in the recent past and
posing challenges to retaining lower-cost deposits,
i > } ivwV i V i Li i i i >
> > } } w >L i >
V w`i > i i i i > i >`i
our customer experience, streamlined operations
and better use of data and analytics will continue to
serve us well in this higher rate environment.
The Company s 2022 Annual Report to Shareholders is available on the Company s website, and
printed copies are available by request. Please contact Ms. Dacia Albin, Assistant Secretary of the
Company, at 217-342-7321 or dalbin@midlandsb.com for access/delivery information.](/msbi/msbi-shareholder-letter-20230324-page-2.png)
![Letter to
Shareholders
i> - > i `i \
> i i> i` i > > > i i wV i>
for the Company. As with 2021, we saw record net revenue and
record earnings per share for the year.
/ i > ` i v i v > Vi i i\
Jeffrey G. Ludwig
President and
iv iV i "vwVi
Midland States Bancorp, Inc.
Our model of customer-centric service and relationship
L> } > i` } > > ` `i ] >
growing by $1.08 billion, or 20.7%, and total deposits growing
to $6.4 billion, an increase of 4.2% year-over-year;
A continued focus on reducing costs and increasing operating
ivwV i V i > `
Increased use of technology across our business sectors.
The investments we made in prior years to improving customer
experience while more effectively controlling expenses continue
to pay off. I cannot emphasize enough the contribution our team
has made in implementing these changes while maintaining our
strong culture that focuses on technology, training, personal
development and pride in serving our customers better than
ever before.
7i > i L> > Vi ii v v i
growth, principally through our issuance of $115 million of Adjusted Diluted Earnings Per Share
ivi i` V L > L Li} } > i v
consumer debt assets into U.S. treasury and agency securities.
$4.00
$3.65
We also redeemed $40.0 million of our subordinated debt and
iV i` fx v i V> > i > ] > v V
$3.50
contributed to stronger capital ratios.
In June 2022 we completed the acquisition of two branches
v
> E / ] i > ` } i i Vi i } i> i
V>} > ` > i / i >V L } f
in loans and $79.8 million in deposits. In 2022 we also planned
for improving our presence in Sterling, Illinois by building a new
branch facility. The new facility opened last month.
Our record results for the year came in the face of strong macro
headwinds, including a 450-basis point increase in short-term
i i > i i` L i i`i > ,i i i > ivv
i y> / > ` > i V i> i >` > >` i i ivviV
i i i > }>}i L> } > ` 7i> > >}i i
2
$3.79
$3.00
$2.54
$2.50
$2.39
$2.00
$1.50
$1.70
2018
2019
2020
2021
2022
` i` i` > } *i - > i > * w > V > i> i
See page 11 for a reconciliation of this measure to its most comparable
GAAP measure.](/msbi/msbi-shareholder-letter-20230324-page-4.png)
![businesses as a result of slower home sales and a material drop in Tangible Book Value Per Share
V > ` L ` Vi
Financial Results
Net income available to common shareholders was $95.9 million,
or $4.23 per fully diluted share in 2022 compared to net income
of $81.3 million, or $3.57 per fully diluted share in 2021. Net
V i Li iw i` v > f x }> i i > v
an interest rate swap, which was partially offset by $3.3 million of
impairment of commercial servicing rights held for sale and a $4.3
million OREO impairment. Our adjusted pre-tax, pre-provision
earnings increased by 14.2% on a year-over-year basis, to $137.5
million as compared to $120.4 million for 2021.
2022 also represented the 22nd consecutive year we increased
V ` `i ` 7 i > } i > i i V > i > `
common share dividends paid in 2022 together, we distributed
$27.0 million to our common shareholders.
$24
$22
$20
$18
1RGTCVKPI 'H EKGPE[
" v V } ivwV i V > i `i` } i
] ivwV i V > `iV i` xx { v x ]
representing very strong year-over-year improvement. Given that
ivwV i V > > n] i i i > v i>
improvement of 1,070 basis points.
$20.94
2021
2022
$19.31
$18.64
$17.00
$16
$14
$12
2018
2019
2020
/> } L i 6> i *i - > i > * w > V > i> i -ii
page 12 for a reconciliation of this measure to its most comparable
GAAP measure.
/> } L i L > i i > i > iVi Li ] > f {]
> `iV i> i v f > > i /> } L i L > i
i > i > i}> i >V i` L > } wV> `iV i> i i
Common Dividends Per Share
fair value of our securities portfolio. This resulted principally from
unrealized losses on investment securities, which losses we do not
$1.20
:9
expect to actually realize.
GR
Total loans increased by $1.08 billion or 20.7%, to $6.31 billion.
Total deposits, which include servicing deposits and wholesale
deposits, increased by $254.0 million, or 4.2%, to $6.36 billion.
$21.66
CA
$1.00
$1.07
$1.12
$1.16
$0.97
$0.88
$0.80
$0.80
$0.60
$0.48
$0.53
$0.59
$0.65
$0.72
$0.40
$0.20
$0.00
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Our Business Units
Community Banking. > > } L i
increased to approximately $4.0 billion, an increase of $747.3 'H EKGPE[ 4CVKQ
million or 22.6% over 2021. Included in the loan activity during the
70.0%
year was the payoff of $50.6 million of PPP loans and a decrease in
66.08%
67.5%
our commercial FHA warehouse lending activity of $66.9 million.
Excluding these two products, loans increased $864.8 million or
65.0%
26.1% during 2022. Core deposits grew to $4.8 billion, an increase
62.5%
of 5.5% year-over-year.
While our consumer program has largely been through our
} > ` } i > ii - ] i > i ii }
` i v V i v ] > > > i v ii -
having been acquired by Goldman Sachs in the second quarter of
> > i v i` ii - > i ` i `
to originate new loans through their program starting later this
i> " i i }>}i i > } > } w iV
> > i ` wi` i L i `i > ` V > Vi i} i
over the past years and can meet our requirements in those areas.
] i i } > } >`` > ii - > > i
61.53%
59.42%
60.0%
57.05%
57.5%
55.35%
55.0%
52.5%
50.0%
2018
2019
2020
2021
2022
vwV i V > > * w > V > i> i -ii >}i
for a reconciliation of this measure to its most comparable GAAP
measure.
3](/msbi/msbi-shareholder-letter-20230324-page-5.png)
• 
3/24/2023 Letter Continued (Full PDF)
•
3/25/2024 MSBI Stockholder Letter
• 7/8/2025 MSBI Stockholder Letter
• 4/3/2026 MSBI Stockholder Letter
• More "Banking & Savings" Category Stockholder Letters
•
MSBI Benford's Law Stock Score = 100
3/24/2023 Letter Continued (Full PDF)
•
3/25/2024 MSBI Stockholder Letter•
7/8/2025 MSBI Stockholder Letter•
4/3/2026 MSBI Stockholder Letter•
More "Banking & Savings" Category Stockholder Letters•
MSBI Benford's Law Stock Score = 100MSBI 3/24/2023 Shareholder/Stockholder Letter Transcript:
ANNUAL
REPORT
2022
In last year s Annual Report I reported that our efforts
to focus on improving operating performance
i i` iV ` i i i > ` w ] L
more importantly that those improvements would
continue to drive shareholder value for years to
come. That has proven true for 2022, in which we
>}> iV `i` iV ` i i i > ` w }
> ` Li `] i i > i i
remain somewhat higher than in the recent past and
posing challenges to retaining lower-cost deposits,
i > } ivwV i V i Li i i i >
> > } } w >L i >
V w`i > i i i i > i >`i
our customer experience, streamlined operations
and better use of data and analytics will continue to
serve us well in this higher rate environment.
The Company s 2022 Annual Report to Shareholders is available on the Company s website, and
printed copies are available by request. Please contact Ms. Dacia Albin, Assistant Secretary of the
Company, at 217-342-7321 or dalbin@midlandsb.com for access/delivery information.
Our Strategic Plan
7i V i v V i i w i > i \
Customer Centric Culture
Operational Excellence
Accretive Acquisitions
U ,i i i i wV>
U i i 7 `i , > >}i i
Total Assets
($ in Billions)
$7.9
$8
CAGR: 16%
$7
$6
CA
$5
inc
e2
6%
:1
$6.9
$6.1
$5.6
$4.4
$4
$2.7
$3
$2
s
GR
PO
6I
01
$7.4
$1.6
$1.5
$1.6
$1.7
2010
2011
2012
2013
$2.9
$3.2
$1.1
$1
$0
2009
2014
2015
2016
2017
2018
2019
2020
2021
2022
Selected Acquisitions (16 in Total)
Selected Acquisitions: Total Assets at Time of Acquisition (in millions)
2009: Strategic Capital Bank ($540)
2014: Love Savings/Heartland Bank ($889)
2018: Alpine Bancorp. ($1,243)
2010: AMCORE Bank ($500)
2017: Centrue Financial ($990)
2019: HomeStar Financial Group ($366)
Table of Contents
Our Strategic Plan ................................ 1
i i - > i `i ........................ 2
Financial Highlights.............................. 6
Summary Financial Information ........... 8
Our Environmental, Social and
Governance Program (ESG) ............... 15
Board of Directors ............................. 16
Management Team .............................17
1
Letter to
Shareholders
i> - > i `i \
> i i> i` i > > > i i wV i>
for the Company. As with 2021, we saw record net revenue and
record earnings per share for the year.
/ i > ` i v i v > Vi i i\
Jeffrey G. Ludwig
President and
iv iV i "vwVi
Midland States Bancorp, Inc.
Our model of customer-centric service and relationship
L> } > i` } > > ` `i ] >
growing by $1.08 billion, or 20.7%, and total deposits growing
to $6.4 billion, an increase of 4.2% year-over-year;
A continued focus on reducing costs and increasing operating
ivwV i V i > `
Increased use of technology across our business sectors.
The investments we made in prior years to improving customer
experience while more effectively controlling expenses continue
to pay off. I cannot emphasize enough the contribution our team
has made in implementing these changes while maintaining our
strong culture that focuses on technology, training, personal
development and pride in serving our customers better than
ever before.
7i > i L> > Vi ii v v i
growth, principally through our issuance of $115 million of Adjusted Diluted Earnings Per Share
ivi i` V L > L Li} } > i v
consumer debt assets into U.S. treasury and agency securities.
$4.00
$3.65
We also redeemed $40.0 million of our subordinated debt and
iV i` fx v i V> > i > ] > v V
$3.50
contributed to stronger capital ratios.
In June 2022 we completed the acquisition of two branches
v
> E / ] i > ` } i i Vi i } i> i
V>} > ` > i / i >V L } f
in loans and $79.8 million in deposits. In 2022 we also planned
for improving our presence in Sterling, Illinois by building a new
branch facility. The new facility opened last month.
Our record results for the year came in the face of strong macro
headwinds, including a 450-basis point increase in short-term
i i > i i` L i i`i > ,i i i > ivv
i y> / > ` > i V i> i >` > >` i i ivviV
i i i > }>}i L> } > ` 7i> > >}i i
2
$3.79
$3.00
$2.54
$2.50
$2.39
$2.00
$1.50
$1.70
2018
2019
2020
2021
2022
` i` i` > } *i - > i > * w > V > i> i
See page 11 for a reconciliation of this measure to its most comparable
GAAP measure.
businesses as a result of slower home sales and a material drop in Tangible Book Value Per Share
V > ` L ` Vi
Financial Results
Net income available to common shareholders was $95.9 million,
or $4.23 per fully diluted share in 2022 compared to net income
of $81.3 million, or $3.57 per fully diluted share in 2021. Net
V i Li iw i` v > f x }> i i > v
an interest rate swap, which was partially offset by $3.3 million of
impairment of commercial servicing rights held for sale and a $4.3
million OREO impairment. Our adjusted pre-tax, pre-provision
earnings increased by 14.2% on a year-over-year basis, to $137.5
million as compared to $120.4 million for 2021.
2022 also represented the 22nd consecutive year we increased
V ` `i ` 7 i > } i > i i V > i > `
common share dividends paid in 2022 together, we distributed
$27.0 million to our common shareholders.
$24
$22
$20
$18
1RGTCVKPI 'H EKGPE[
" v V } ivwV i V > i `i` } i
] ivwV i V > `iV i` xx { v x ]
representing very strong year-over-year improvement. Given that
ivwV i V > > n] i i i > v i>
improvement of 1,070 basis points.
$20.94
2021
2022
$19.31
$18.64
$17.00
$16
$14
$12
2018
2019
2020
/> } L i 6> i *i - > i > * w > V > i> i -ii
page 12 for a reconciliation of this measure to its most comparable
GAAP measure.
/> } L i L > i i > i > iVi Li ] > f {]
> `iV i> i v f > > i /> } L i L > i
i > i > i}> i >V i` L > } wV> `iV i> i i
Common Dividends Per Share
fair value of our securities portfolio. This resulted principally from
unrealized losses on investment securities, which losses we do not
$1.20
:9
expect to actually realize.
GR
Total loans increased by $1.08 billion or 20.7%, to $6.31 billion.
Total deposits, which include servicing deposits and wholesale
deposits, increased by $254.0 million, or 4.2%, to $6.36 billion.
$21.66
CA
$1.00
$1.07
$1.12
$1.16
$0.97
$0.88
$0.80
$0.80
$0.60
$0.48
$0.53
$0.59
$0.65
$0.72
$0.40
$0.20
$0.00
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Our Business Units
Community Banking. > > } L i
increased to approximately $4.0 billion, an increase of $747.3 'H EKGPE[ 4CVKQ
million or 22.6% over 2021. Included in the loan activity during the
70.0%
year was the payoff of $50.6 million of PPP loans and a decrease in
66.08%
67.5%
our commercial FHA warehouse lending activity of $66.9 million.
Excluding these two products, loans increased $864.8 million or
65.0%
26.1% during 2022. Core deposits grew to $4.8 billion, an increase
62.5%
of 5.5% year-over-year.
While our consumer program has largely been through our
} > ` } i > ii - ] i > i ii }
` i v V i v ] > > > i v ii -
having been acquired by Goldman Sachs in the second quarter of
> > i v i` ii - > i ` i `
to originate new loans through their program starting later this
i> " i i }>}i i > } > } w iV
> > i ` wi` i L i `i > ` V > Vi i} i
over the past years and can meet our requirements in those areas.
] i i } > } >`` > ii - > > i
61.53%
59.42%
60.0%
57.05%
57.5%
55.35%
55.0%
52.5%
50.0%
2018
2019
2020
2021
2022
vwV i V > > * w > V > i> i -ii >}i
for a reconciliation of this measure to its most comparable GAAP
measure.
3
3/24/2023 Letter Continued (Full PDF)
MSBI Stockholder/Shareholder Letter (Midland States Bancorp, Inc.) 3/24/2023 | www.StockholderLetter.com
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