The case for & against
Bull & Bear analysis
Midland States Bancorp (NASDAQ: MSBI) is a full-service financial institution focused primarily on commercial banking, wealth management, and mortgage banking. It operates predominantly in the Midwest region, gaining a strategic foothold in urban markets such as Northern Illinois and St. Louis. The firm is actively enhancing its commercial banking capabilities and exploring innovative financial technology partnerships, positioning itself to capitalize on growth opportunities in a competitive banking environment. The current market trends, including potential economic fluctuations and rising interest rates, shape its strategic initiatives and growth strategies.
Bull says
- ↑Q4 net income $29.7M; EPS rose to $1.30 from $0.97.
- ↑Total loans +$108M (7% annualized), driven by St. Louis and E. Illinois.
- ↑Quarterly dividend $0.33 (4% yield) boosts shareholder returns.
- ↑FinTech BaaS expansion with LendingPoint enhances deposits and fee income.
- ↑High earnings yield and momentum factors support price upside.
- ↑ROAA 1.31% and ROATE 20.8% YoY gains signal efficiency improvements.
Bear says
- ↓Profitability under scrutiny: ROAA at 1.31% trails peers.
- ↓Negative growth factor amid expected loan demand slowdown.
- ↓Elevated short interest and low 13F ownership signal weak conviction.
- ↓Deposit competition forces higher rates, squeezing net interest margin.
- ↓BaaS regulatory uncertainty heightens execution and compliance risk.
- ↓Small size and volatility factors imply greater price swings.
Investment themes with MSBI
Earnings Call · Q4 2021 · Mgmt. Guidance
Transcript signals
Bull points
- Our total loans increased $309 million from the end of the prior quarter.
- Excluding PPP loans, commercial warehouse credit lines, and consumer loans added through the Green Sky Partnership, our total loans increased at an annualized rate of more than 40%, which reflects our improved ability to generate growth in commercial and commercial real estate loans.
- we had just $4 million of deferrals remaining, with nearly all of the deferrals making some form of partial payment.
Bear points
- Excluding accretion income, our net interest margin declined six basis points due to that excess liquidity and unfavorable shift in our mix of earning assets.
- With interest rates increasing and refinancing volumes declining, it's likely that we will see lower levels of impairment on commercial mortgage servicing rights in 2022.
- Our non-performing loans decreased $12 million from the end of the prior quarter, primarily due to the payoff of two non-accrual loans and the charge-off of a third loan.