• Midland States Bancorp, Inc. Announces 2024 Fourth Quarter Results

    Источник: Nasdaq GlobeNewswire / 23 янв 2025 16:30:01   America/New_York

    Fourth Quarter 2024 Highlights:

    • Net loss available to common shareholders of $54.8 million, or $2.52 per diluted share
    • Adjusted pre-tax, pre-provision earnings of $21.5 million, compared to $27.5 million in prior quarter
    • Sold $87.1 million LendingPoint consumer loan portfolio, recognizing net charge-offs and provision for credit losses of $17.3 million
    • Committed to a plan to sell $371.7 million Greensky portfolio, recognizing net charge-offs and provision for credit losses of $33.4 million
    • Net charge-offs on loans of $102.7 million and provision for credit losses on loans of $93.5 million to address credit issues in the loan portfolio including credit losses for LendingPoint and Greensky portfolios
    • Net interest margin of 3.19%, compared to 3.10% in prior quarter
    • Wealth management revenue of $7.7 million, compared to $7.1 million in prior quarter
    • Common equity tier 1 capital ratio of 8.37%, compared to 9.00% at September 30, 2024 and 8.40% at December 31, 2023
    • Total risk-based capital ratio of 13.38%, compared to 13.98% at September 30, 2024 and 13.20% at December 31, 2023

    EFFINGHAM, Ill., Jan. 23, 2025 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (Nasdaq: MSBI) (the “Company”) today reported net loss available to common shareholders of $54.8 million, or $2.52 per diluted share, for the fourth quarter of 2024, compared to net income of $16.2 million, or $0.74 per diluted share, for the third quarter of 2024. This also compares to net income available to common shareholders of $18.5 million, or $0.84 per diluted share, for the fourth quarter of 2023.

    During the fourth quarter of 2024, the Company took several actions to address its credit quality issues and exit its non-core consumer loan portfolios. Our deteriorating credit quality issues were primarily within three sectors of our business: non-core consumer loans, Specialty Finance Group, and Midland Equipment Financing.

    In the quarter, the Company decided to accelerate the reduction of our non-core consumer loan portfolio through sales. These loans were originated by our Fintech partners, LendingPoint and Greensky. As a result of LendingPoint’s system conversion in the third quarter of 2023, our portfolio experienced significant credit deterioration and servicing-related deficiencies. In December 2024, we sold our $87.1 million LendingPoint portfolio, recognizing net charge-offs and provision for credit losses of $17.3 million on the sale. We also committed to a plan to sell $371.7 million of our Greensky consumer loan portfolio and recognized net charge-offs and provision for credit losses of $33.4 million when these loans were transferred to held for sale. We expect to provide partial financing on the sale with senior secured loans to a special purpose entity with credit subordination and a 20% risk weighting.

    The Specialty Finance Group provides bridge loan financing for commercial real estate projects, primarily multi-family and healthcare. These projects can include construction and seek short term financing in anticipation of obtaining permanent secondary market financing. The loans are typically outside of the Company’s primary market areas. We completed a strategic review of this portfolio including obtaining updated appraisals on loans that had shown elevated credit risk in the third and fourth quarters. As a result of this review, five loans with balances of $57.8 million were moved from substandard to non-performing with recognized charge-offs of $6.6 million. In addition, updated appraisals were obtained for five non-performing loans with balances of $55.8 million which resulted in charge-offs of $18.8 million recognized in the fourth quarter of 2024. In addition, we recognized impairment expense on an OREO property related to a former assisted living loan of $2.1 million in the fourth quarter of 2024.

    The strategic review also included all criticized loans, construction loans and loans that failed our stress test in all portfolios, including our community bank. This resulted in charge-offs of almost all specific reserves. In addition, the Company tightened credit standards going forward and will not originate new construction loans in the Specialty Finance Group. Our strategic actions around credit administration will better position the Company going forward.

    The equipment finance portfolio includes loans and leases originated to customers throughout the United States. During 2024, we experienced elevated charge-offs primarily within the trucking industry. Charge-offs in this portfolio were $15.3 million in the fourth quarter of 2024 as we evaluated equipment values for nonaccrual assets. Nonaccrual loans and leases in the finance portfolio decreased to $11.3 million from $21.4 million at September 30, 2024. Additionally, based on further deterioration in the industry, we evaluated salvage values of the leases and loans related to this industry, along with the carrying values of repossessed and off-lease equipment, and recognized impairment expense of $7.6 million.

    Jeffrey G. Ludwig, President and Chief Executive Officer of the Company, said, “Improving credit quality is our number one priority and in the fourth quarter we took significant steps to reduce credit risk and address our underlying credit issues. During the quarter we made the difficult decision to exit our non-core consumer portfolio and charge-off deteriorating credits in an effort to better position the Company to grow our core community banking business. Our team also reviewed our credit risk appetite profile and tightened standards going forward. On a positive note, substandard accruing loans decreased significantly in the quarter with minimal downgrades to substandard accruing. Delinquencies decreased during the quarter as well.

    “We are seeing positive trends in new client additions in both our community bank and wealth management, net interest margin expanded in the quarter and with the actions we took in the quarter to reduce credit risk, we believe we are well positioned to deliver solid financial performance in 2025. We will continue to make investments in talent, technology, and marketing to further enhance our ability to generate profitable growth in the coming years,” said Mr. Ludwig.

    Balance Sheet Highlights

    Total assets were $7.53 billion at December 31, 2024, compared to $7.75 billion at September 30, 2024, and $7.87 billion at December 31, 2023. At December 31, 2024, portfolio loans were $5.17 billion, compared to $5.75 billion at September 30, 2024, and $6.13 billion at December 31, 2023.

    Loans

    During the fourth quarter of 2024, outstanding loans declined by $581.2 million, or 10.1%, from September 30, 2024, primarily as a result of the Company’s decision to sell the Greensky and LendingPoint consumer loan portfolios, and the continuation of the Company’s plan to decrease its equipment financing portfolio to focus on commercial loan opportunities in our community banking regions.

    Consumer loans decreased $506.0 million to $157.2 million at December 31, 2024, primarily due to the loan portfolio sale, transfer to held for sale, and loan paydowns. Equipment finance loan and lease balances decreased $51.7 million during the fourth quarter of 2024 as the Company continued to reduce its concentration of this product within the overall loan portfolio. Equipment financing and consumer loans comprised 15.6% and 3.0%, respectively, of the loan portfolio at December 31, 2024, compared to 15.0% and 11.5%, respectively, at September 30, 2024.

      As of
      December 31, September 30, June 30, March 31, December 31,
    (in thousands) 2024 2024 2024 2024 2023
    Loan Portfolio          
    Commercial loans $921,930 $863,922 $939,458 $913,564 $951,387
    Equipment finance loans  416,969  442,552  461,409  494,068  531,143
    Equipment finance leases  391,390  417,531  428,659  455,879  473,350
    Commercial FHA warehouse lines  8,004  50,198  —  8,035  —
    Total commercial loans and leases  1,738,293  1,774,203  1,829,526  1,871,546  1,955,880
    Commercial real estate  2,591,664  2,510,472  2,421,505  2,397,113  2,406,845
    Construction and land development  299,842  422,253  476,528  474,128  452,593
    Residential real estate  380,557  378,657  378,393  378,583  380,583
    Consumer  157,218  663,234  746,042  837,092  935,178
    Total loans $5,167,574 $5,748,819 $5,851,994 $5,958,462 $6,131,079


    Loan Quality

    Substandard accruing loans decreased $88.7 million to $78.8 million at December 31, 2024, as compared to September 30, 2024. This decrease was the result of a payoff of a $15.4 million relationship and the transfer of $75.1 million of problem loans to nonaccrual status. No significant new substandard loans were identified during the quarter.

    Nonperforming loans increased $25.6 million to $140.1 million at December 31, 2024, as compared to September 30, 2024. Charged off nonperforming loans in the fourth quarter of 2024 totaled $48.9 million, partially offsetting the amount of loans transferred to nonaccrual status in the quarter.

      As of and for the Three Months Ended
    (in thousands)

    		 December 31, September 30, June 30, March 31, December 31,
      2024   2024   2024   2024   2023 
    Asset Quality          
    Loans 30-89 days past due $36,522  $55,329  $54,045  $58,854  $82,778 
    Nonperforming loans  140,138   114,556   112,124   104,979   56,351 
    Nonperforming assets  148,290   126,771   123,774   116,721   67,701 
    Substandard accruing loans  78,800   167,549   135,555   149,049   184,224 
    Net charge-offs  102,660   11,379   2,874   4,445   5,117 
    Loans 30-89 days past due to total loans  0.71%  0.96%  0.92%  0.99%  1.35%
    Nonperforming loans to total loans  2.71%  1.99%  1.92%  1.76%  0.92%
    Nonperforming assets to total assets  1.97%  1.64%  1.60%  1.49%  0.86%
    Allowance for credit losses to total loans  1.46%  1.49%  1.58%  1.31%  1.12%
    Allowance for credit losses to nonperforming loans  53.81%  74.90%  82.22%  74.35%  121.56%
    Net charge-offs to average loans  7.23%  0.78%  0.20%  0.30%  0.33%


    The Company recognized provision expense for credit losses on loans of $93.5 million in the fourth quarter of 2024, and recorded net loan charge-offs of $102.7 million. Provision expense for credit losses on loans was $5.0 million and $7.0 million in the third quarter of 2024 and fourth quarter of 2023, respectively. For the year ended December 31, 2024, the Company recognized provision expense for credit losses of $129.3 million and recorded net charge-offs of $121.4 million.

    The allowance for credit losses on loans totaled $75.4 million at December 31, 2024, compared to $85.8 million at September 30, 2024, and $68.5 million at December 31, 2023. The allowance as a percentage of total loans was 1.46% at December 31, 2024, compared to 1.49% at September 30, 2024, and 1.12% at December 31, 2023.

    Deposits

    Total deposits were $6.20 billion at December 31, 2024, compared with $6.26 billion at September 30, 2024. Noninterest-bearing deposits increased $4.9 million while interest-bearing deposits decreased $64.5 million. Brokered time deposits represented 4.2% of total deposits at December 31, 2024.

      As of
      December 31, September 30, June 30, March 31, December 31,
    (in thousands) 2024 2024 2024 2024 2023
    Deposit Portfolio          
    Noninterest-bearing demand $1,055,564 $1,050,617 $1,108,521 $1,212,382 $1,145,395
    Interest-bearing:          
    Checking  2,378,256  2,389,970  2,343,533  2,394,163  2,511,840
    Money market  1,173,630  1,187,139  1,143,668  1,128,463  1,135,629
    Savings  507,305  510,260  538,462  555,552  559,267
    Time  822,981  849,413  852,415  845,190  862,865
    Brokered time  259,507  269,437  131,424  188,234  94,533
    Total deposits $6,197,243 $6,256,836 $6,118,023 $6,323,984 $6,309,529


    Results of Operations Highlights

    Net Interest Income and Margin

    During the fourth quarter of 2024, net interest income and net interest margin, on a tax-equivalent basis, increased to $56.3 million and 3.19%, respectively, compared to $55.2 million and 3.10%, respectively, in the third quarter of 2024. The actions taken by the Federal Reserve Bank to lower short term interest rates resulted in lower funding costs for the Company. Net interest income and net interest margin, on a tax-equivalent basis, were $58.3 million and 3.21%, respectively, in the fourth quarter of 2023.

    Average interest-earning assets for the fourth quarter of 2024 were $7.01 billion, compared to $7.07 billion for the third quarter of 2024. The yield on interest-earning assets decreased 11 basis points to 5.80% compared to the third quarter of 2024, due in part to interest reversals of $1.5 million on substandard loans transferred to nonaccrual status in the fourth quarter and the impact of interest rate cuts enacted by the Federal Reserve Bank. Interest-earning assets averaged $7.20 billion for the fourth quarter of 2023.

    Average loans were $5.65 billion for the fourth quarter of 2024, compared to $5.78 billion for the third quarter of 2024 and $6.20 billion for the fourth quarter of 2023. The yield on loans was 6.04% for the fourth quarter of 2024, compared to 6.15% for the third quarter of 2024 and 6.00% for the fourth quarter of 2023.

    Investment securities averaged $1.21 billion for the fourth quarter of 2024, and yielded 4.73%, compared to an average balance and yield of $1.16 billion and 4.71%, respectively, for the third quarter of 2024. Investment securities averaged $883.2 million and yielded 4.16% for the fourth quarter of 2023. The Company purchased additional higher-yielding investments during 2024, resulting in the increased average balance and yield.

    Average interest-bearing liabilities for the fourth quarter of 2024 were $5.69 billion, compared to $5.76 billion for the third quarter of 2024. The cost of funds decreased 24 basis points to 3.21% compared to the third quarter of 2024. Interest-bearing liabilities averaged $5.88 billion for the fourth quarter of 2023.

    Average interest-bearing deposits were $5.24 billion for the fourth quarter of 2024, compared to $5.13 billion for the third quarter of 2024, and $5.30 billion for the fourth quarter of 2023. Cost of interest-bearing deposits was 3.04% in the fourth quarter of 2024, which represented a 21 basis point decrease from the third quarter of 2024, due to the recent rate cuts enacted by the Federal Reserve Bank.

      For the Three Months Ended
    (dollars in thousands) December 31, 2024 September 30, 2024 December 31, 2023
    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 $96,676 $1,101 4.53% $75,255 $1,031 5.45% $77,363 $1,054 5.41%
    Investment securities(1)  1,213,248  14,417 4.73   1,162,751  13,752 4.71   883,153  9,257 4.16 
    Loans(1)(2)  5,652,586  85,877 6.04   5,783,408  89,344 6.15   6,196,362  93,757 6.00 
    Loans held for sale  12,854  129 4.00   7,505  124 6.57   4,429  81 7.26 
    Nonmarketable equity securities  35,171  632 7.15   41,137  788 7.62   41,192  715 6.89 
    Total interest-earning assets  7,010,535  102,156 5.80   7,070,056  105,039 5.91   7,202,499  104,864 5.78 
    Noninterest-earning assets  669,300      653,279      695,293    
    Total assets $7,679,835     $7,723,335     $7,897,792    
                       
    Interest-Bearing Liabilities                  
    Interest-bearing deposits $5,241,702 $40,016 3.04% $5,132,640 $41,970 3.25% $5,295,296 $39,156 2.93%
    Short-term borrowings  31,853  214 2.68   53,577  602 4.47   13,139  15 0.47 
    FHLB advances & other borrowings  284,033  2,880 4.03   428,739  4,743 4.40   430,207  4,750 4.38 
    Subordinated debt  80,410  1,498 7.41   89,120  1,228 5.48   93,512  1,281 5.43 
    Trust preferred debentures  51,132  1,292 10.05   50,990  1,341 10.46   50,541  1,402 11.00 
    Total interest-bearing liabilities  5,689,130  45,900 3.21   5,755,066  49,884 3.45   5,882,695  46,604 3.14 
    Noninterest-bearing deposits  1,066,520      1,075,712      1,142,062    
    Other noninterest-bearing liabilities  117,478      97,235      108,245    
    Shareholders’ equity  806,707      795,322      764,790    
    Total liabilities and shareholder’s equity $7,679,835     $7,723,335     $7,897,792    
                       
    Net Interest Margin   $56,256 3.19%   $55,155 3.10%   $58,260 3.21%
                       
    Cost of Deposits     2.52%     2.69%     2.41%

    (1) Interest income and average rates for tax-exempt loans and investment securities are presented on a tax-equivalent basis, assuming a federal income tax rate of 21%. Tax-equivalent adjustments totaled $0.2 million for each of the three months ended December 31, 2024, September 30, 2024 and December 31, 2023, respectively.
    (2) Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.

    For the year ended December 31, 2024, net interest income, on a tax-equivalent basis, decreased to $222.8 million, with a tax-equivalent net interest margin of 3.15%, compared to net interest income, on a tax-equivalent basis, of $236.8 million, and a tax-equivalent net interest margin of 3.26% for the year ended December 31, 2023.

    The yield on earning assets increased 26 basis points to 5.83% for the year ended December 31, 2024 compared to the prior year. However, the cost of interest-bearing liabilities increased at a faster rate during this period, increasing 44 basis points to 3.31% for the year ended December 31, 2024.

      For the Years Ended
    (dollars in thousands) December 31, 2024 December 31, 2023
    Interest-earning assets Average
    Balance    		 Interest &
    Fees    		 Yield/Rate Average
    Balance    		 Interest &
    Fees    		 Yield/Rate
    Cash and cash equivalents $76,675 $3,958 5.16% $77,046 $3,922 5.09%
    Investment securities(1)  1,116,186  51,682 4.63   854,576  30,361 3.55 
    Loans(1)(2)  5,840,216  353,447 6.05   6,292,260  367,762 5.84 
    Loans held for sale  7,185  392 5.45   4,034  260 6.45 
    Nonmarketable equity securities  39,108  3,070 7.85   43,318  2,819 6.51 
    Total interest-earning assets  7,079,370  412,549 5.83   7,271,234  405,124 5.57 
    Noninterest-earning assets  665,308      635,490    
    Total assets $7,744,678     $7,906,724    
                 
    Interest-Bearing Liabilities            
    Interest-bearing deposits $5,167,787 $160,676 3.11% $5,241,723 $136,947 2.61%
    Short-term borrowings  45,251  1,960 4.33   23,406  68 0.29 
    FHLB advances & other borrowings  381,525  16,495 4.32   460,781  20,709 4.49 
    Subordinated debt  89,028  5,271 5.92   95,986  5,266 5.49 
    Trust preferred debentures  50,938  5,380 10.56   50,298  5,289 10.52 
    Total interest-bearing liabilities  5,734,529  189,782 3.31   5,872,194  168,279 2.87 
    Noninterest-bearing deposits  1,106,388      1,173,873    
    Other noninterest-bearing liabilities  109,777      90,562    
    Shareholders’ equity  793,984      770,095    
    Total liabilities and shareholders’ equity $7,744,678     $7,906,724    
                 
    Net Interest Margin   $222,767 3.15%   $236,845 3.26%
                 
    Cost of Deposits     2.56%     2.13%

    (1) Interest income and average rates for tax-exempt loans and investment securities are presented on a tax-equivalent basis, assuming a federal income tax rate of 21%. Tax-equivalent adjustments totaled $0.8 million for each of the years ended December 31, 2024 and 2023, respectively.
    (2) Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.

    Noninterest Income

    Noninterest income was $19.6 million for the fourth quarter of 2024, compared to $19.3 million for the third quarter of 2024. Noninterest income for the fourth quarter of 2023 was $20.5 million, and included incremental servicing revenues of $2.2 million and $1.6 million related to our commercial FHA servicing portfolio and the Greensky portfolio, respectively. Also included was a $1.1 million one-time gain from the sale of Visa B stock, offset by $2.9 million of losses on the sale of investment securities. Excluding these transactions, noninterest income for the fourth quarter of 2024, the third quarter of 2024, and the fourth quarter of 2023 was $19.6 million, $19.3 million, and $18.5 million, respectively.

      For the Three Months Ended For the Years Ended
      December 31, September 30, December 31, December 31, December 31,
    (in thousands)  2024   2024   2023   2024   2023 
    Noninterest income          
    Wealth management revenue $7,660  $7,104  $6,604  $28,697  $25,572 
    Service charges on deposit accounts  3,506   3,411   3,246   13,154   11,990 
    Interchange revenue  3,528   3,506   3,585   13,955   14,302 
    Residential mortgage banking revenue  637   697   451   2,418   1,903 
    Income on company-owned life insurance  1,975   1,982   1,753   7,683   4,439 
    Loss on sales of investment securities, net  (34)  (44)  (2,894)  (230)  (9,372)
    Other income  2,289   2,683   7,768   12,066   17,756 
    Total noninterest income $19,561  $19,339  $20,513  $77,743  $66,590 


    Wealth management revenue totaled $7.7 million in the fourth quarter of 2024, an increase of $0.6 million, or 7.8%, as compared to the third quarter of 2024, due to increases in trust and estate fees. Assets under administration were $4.15 billion at December 31, 2024 compared to $4.27 billion and $3.73 billion at September 30, 2024 and December 31, 2023, respectively.

    Income on company-owned life insurance income totaled $2.0 million, $2.0 million and $1.8 million for the fourth quarter of 2024, the third quarter of 2024, and the fourth quarter of 2023, respectively.

    On a full year basis, noninterest income increased $11.2 million, or 16.7%. Wealth management revenue increased $3.1 million due to increases in assets under administration and estate fees. Income on company-owned life insurance increased $3.2 million. The Company surrendered certain low-yielding life insurance policies and purchased additional policies in the third quarter of 2023, resulting in the increase in revenue. In 2024, we recognized net losses on the sales of investment securities of $0.2 million compared to $9.4 million in 2023, as we took advantage of certain market conditions last year to reposition out of lower yielding securities into other structures, which resulted in improved overall margin, liquidity and capital allocations. Several one-time transactions were recognized in other noninterest income in 2023, including incremental servicing revenues of $2.2 million and $1.6 million related to our commercial FHA servicing portfolio and the Greensky portfolio, respectively. In addition, the Company recognized a $1.1 million one-time gain from the sale of Visa B stock, a gain of $0.7 million on the redemption of subordinated debt and a gain of $0.8 million on the sale of OREO.

    Noninterest Expense

    Noninterest expense was $54.2 million in the fourth quarter of 2024, compared to $46.7 million in the third quarter of 2024 and $44.5 million in the fourth quarter of 2023. Noninterest expense for the fourth quarter of 2024 included $7.6 million of impairment on equipment financing operating lease collateral and surrendered equipment, and $2.1 million of impairment on an OREO property. Excluding these items, noninterest expense for the fourth quarter of 2024, the third quarter of 2024, and the fourth quarter of 2023 was $44.5 million, $46.7 million, and $44.5 million, respectively.

    On a full year basis, in addition to the fourth quarter expenses previously described, costs related to upgrades to our ATM fleet, loan collection expenses, and settlement of various lawsuits drove the increase in noninterest expense as compared to the prior year.

    The efficiency ratio for the quarter ended December 31, 2024 was 71.42% compared to 62.76% for the quarter ended September 30, 2024, and 55.22% for the fourth quarter of 2023.

      For the Three Months Ended For the Years Ended
      December 31, September 30, December 31, December 31, December 31,
    (in thousands) 2024 2024 2023 2024 2023
    Noninterest expense          
    Salaries and employee benefits $22,283 $24,382 $24,031 $93,639 $93,438
    Occupancy and equipment  4,286  4,393  3,934  16,785  15,986
    Data processing  7,278  6,955  6,963  28,160  26,286
    Professional services  1,580  1,744  2,072  7,822  7,049
    Amortization of intangible assets  952  951  1,130  4,008  4,758
    Impairment on leased assets and surrendered assets  7,601  —  —  7,601  —
    FDIC insurance  1,383  1,402  1,147  5,278  4,779
    Other expense  8,820  6,906  5,211  29,969  21,606
    Total noninterest expense $54,183 $46,733 $44,488 $193,262 $173,902


    Income Tax Expense

    Income tax benefit was $19.6 million for the fourth quarter of 2024, compared to expenses of $4.1 million for the third quarter of 2024 and $6.4 million for the fourth quarter of 2023. The resulting effective tax rates were 27.2%, 18.1% and 23.7%, respectively.

    Capital

    At December 31, 2024, 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 December 31, 2024
     Midland States Bank Midland States Bancorp, Inc. Minimum Regulatory Requirements(2)
    Total capital to risk-weighted assets12.75% 13.38% 10.50%
    Tier 1 capital to risk-weighted assets11.54% 11.11% 8.50%
    Common equity Tier 1 capital to risk-weighted assets11.54% 8.37% 7.00%
    Tier 1 leverage ratio9.71% 9.36% 4.00%
    Tangible common equity to tangible assets(1)N/A 6.14% N/A

    (1) A non-GAAP financial measure. Refer to page 17 for a reconciliation to the comparable GAAP financial measure.
    (2) Includes the capital conservation buffer of 2.5%, as applicable.

    The impact of rising interest rates on the Company’s investment portfolio and cash flow hedges resulted in an accumulated other comprehensive loss of $82.0 million at December 31, 2024, which reduced tangible book value by $3.81 per share.

    Stock Repurchase Program

    As previously disclosed, on December 5, 2023, the Company’s board of directors authorized a new share repurchase program, pursuant to which the Company was authorized to repurchase up to $25.0 million of common stock through December 31, 2024. During the fourth quarter of 2024, the Company did not repurchased any shares of its common stock. The program terminated effective December 31, 2024.

    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 December 31, 2024, the Company had total assets of approximately $7.53 billion, and its Wealth Management Group had assets under administration of approximately $4.15 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, the measures in this press release 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, increased deposit volatility and potential regulatory developments; changes in the financial markets; changes in business plans as circumstances warrant; risks relating to acquisitions; 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

    MIDLAND STATES BANCORP, INC.
    CONSOLIDATED FINANCIAL SUMMARY (unaudited)
               
      As of and for the Three Months Ended As of and
    for the Years Ended
    (dollars in thousands, except per share data)  December 31,
    2024     		 September 30,
     2024     		 December 31,
     2023     		  December 31,
    2024     		  December 31,
    2023 
    Earnings Summary          
    Net interest income $56,035  $54,950  $58,077  $221,957  $236,017 
    Provision for credit losses  93,540   5,000   6,950   129,340   21,132 
    Noninterest income  19,561   19,339   20,513   77,743   66,590 
    Noninterest expense  54,183   46,733   44,488   193,262   173,902 
    (Loss) income before income taxes  (72,127)  22,556   27,152   (22,902)  107,573 
    Income tax (benefit) expense  (19,586)  4,080   6,441   (9,472)  32,113 
    Net (loss) income  (52,541)  18,476   20,711   (13,430)  75,460 
    Preferred dividends  2,228   2,229   2,228   8,913   8,913 
    Net (loss) income available to common shareholders $(54,769) $16,247  $18,483  $(22,343) $66,547 
               
    Diluted (loss) earnings per common share $(2.52) $0.74  $0.84  $(1.05) $2.97 
    Weighted average common shares outstanding - diluted  21,753,711   21,678,242   21,822,328   21,737,958   22,124,402 
    (Loss) return on average assets (2.72)%  0.95%  1.04% (0.17)%  0.95%
    (Loss) return on average shareholders' equity (25.91)%  9.24%  10.74% (1.69)%  9.80%
    (Loss) return on average tangible common equity(1) (41.76)%  12.69%  15.41% (4.40)%  13.89%
    Net interest margin  3.19%  3.10%  3.21%  3.15%  3.26%
    Efficiency ratio(1)  71.42%  62.76%  55.22%  64.31%  55.91%
               
    Adjusted Earnings Performance Summary(1)          
    Adjusted (loss) earnings available to common shareholders $(54,735) $16,223  $19,793  $(22,344) $76,576 
    Adjusted diluted (loss) earnings per common share $(2.52) $0.74  $0.89  $(1.05) $3.42 
    Adjusted (loss) return on average assets (2.72)%  0.95%  1.11% (0.17)%  1.08%
    Adjusted (loss) return on average shareholders' equity (25.89)%  9.23%  11.42% (1.69)%  11.10%
    Adjusted (loss) return on average tangible common equity (41.74)%  12.67%  16.51% (4.40)%  15.98%
    Adjusted pre-tax, pre-provision earnings $21,460  $27,523  $35,898  $106,437  $136,303 
    Adjusted pre-tax, pre-provision return on average assets  1.11%  1.42%  1.80%  1.37%  1.72%
               
    Market Data          
    Book value per share at period end $29.10  $33.08  $31.61     
    Tangible book value per share at period end(1) $21.01  $24.90  $23.35     
    Tangible book value per share excluding accumulated other comprehensive income at period end(1) $24.82  $27.74  $26.91     
    Market price at period end $24.40  $22.38  $27.56     
    Common shares outstanding at period end  21,494,485   21,393,905   21,551,402     
               
    Capital          
    Total capital to risk-weighted assets  13.38%  13.98%  13.20%    
    Tier 1 capital to risk-weighted assets  11.11%  11.65%  10.91%    
    Common equity tier 1capital to risk-weighted assets  8.37%  9.00%  8.40%    
    Tier 1 leverage ratio  9.36%  10.10%  9.71%    
    Tangible common equity to tangible assets(1)  6.14%  7.03%  6.55%    
               
    Wealth Management          
    Trust assets under administration $4,153,080  $4,268,539  $3,733,355     

    (1) Non-GAAP financial measures. Refer to pages 15 - 17 for a reconciliation to the comparable GAAP financial measures.

    MIDLAND STATES BANCORP, INC.
    CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
               
      As of
      December 31, September 30, June 30, March 31, December 31,
    (in thousands)  2024   2024   2024   2024   2023 
    Assets          
    Cash and cash equivalents $114,766  $121,873  $124,646  $167,316  $135,061 
    Investment securities  1,212,366   1,216,795   1,099,654   1,044,900   920,396 
    Loans  5,167,574   5,748,819   5,851,994   5,958,462   6,131,079 
    Allowance for credit losses on loans  (75,414)  (85,804)  (92,183)  (78,057)  (68,502)
    Total loans, net  5,092,160   5,663,015   5,759,811   5,880,405   6,062,577 
    Loans held for sale  346,565   8,001   5,555   5,043   3,811 
    Premises and equipment, net  85,710   84,672   83,040   81,831   82,814 
    Other real estate owned  6,413   8,646   8,304   8,920   9,112 
    Loan servicing rights, at lower of cost or fair value  17,842   18,400   18,902   19,577   20,253 
    Goodwill  161,904   161,904   161,904   161,904   161,904 
    Other intangible assets, net  12,100   13,052   14,003   15,019   16,108 
    Company-owned life insurance  211,168   209,193   207,211   205,286   203,485 
    Other assets  268,061   245,932   274,244   241,608   251,347 
    Total assets $7,529,055  $7,751,483  $7,757,274  $7,831,809  $7,866,868 
               
    Liabilities and Shareholders' Equity          
    Noninterest-bearing demand deposits $1,055,564  $1,050,617  $1,108,521  $1,212,382  $1,145,395 
    Interest-bearing deposits  5,141,679   5,206,219   5,009,502   5,111,602   5,164,134 
    Total deposits  6,197,243   6,256,836   6,118,023   6,323,984   6,309,529 
    Short-term borrowings  87,499   13,849   7,208   214,446   34,865 
    FHLB advances and other borrowings  258,000   425,000   600,000   255,000   476,000 
    Subordinated debt  77,749   82,744   91,656   93,617   93,546 
    Trust preferred debentures  51,205   51,058   50,921   50,790   50,616 
    Other liabilities  121,246   103,737   103,694   102,966   110,459 
    Total liabilities  6,792,942   6,933,224   6,971,502   7,040,803   7,075,015 
    Total shareholders’ equity  736,113   818,259   785,772   791,006   791,853 
    Total liabilities and shareholders’ equity $7,529,055  $7,751,483  $7,757,274  $7,831,809  $7,866,868 


    MIDLAND STATES BANCORP, INC.
    CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
               
      For the Three Months Ended For the Years Ended
      December 31, September 30, December 31, December 31, December 31,
    (in thousands, except per share data)  2024   2024   2023   2024   2023 
    Net interest income:          
    Interest income $101,935  $104,834  $104,681  $411,739  $404,296 
    Interest expense  45,900   49,884   46,604   189,782   168,279 
    Net interest income  56,035   54,950   58,077   221,957   236,017 
    Provision for credit losses on loans  92,270   5,000   6,950   128,270   21,132 
    Provision for credit losses on unfunded commitments  1,270   —   —   1,070   — 
    Total provision for credit losses  93,540   5,000   6,950   129,340   21,132 
    Net interest income after provision for credit losses  (37,505)  49,950   51,127   92,617   214,885 
    Noninterest income:          
    Wealth management revenue  7,660   7,104   6,604   28,697   25,572 
    Service charges on deposit accounts  3,506   3,411   3,246   13,154   11,990 
    Interchange revenue  3,528   3,506   3,585   13,955   14,302 
    Residential mortgage banking revenue  637   697   451   2,418   1,903 
    Income on company-owned life insurance  1,975   1,982   1,753   7,683   4,439 
    Loss on sales of investment securities, net  (34)  (44)  (2,894)  (230)  (9,372)
    Other income  2,289   2,683   7,768   12,066   17,756 
    Total noninterest income  19,561   19,339   20,513   77,743   66,590 
    Noninterest expense:          
    Salaries and employee benefits  22,283   24,382   24,031   93,639   93,438 
    Occupancy and equipment  4,286   4,393   3,934   16,785   15,986 
    Data processing  7,278   6,955   6,963   28,160   26,286 
    Professional services  1,580   1,744   2,072   7,822   7,049 
    Amortization of intangible assets  952   951   1,130   4,008   4,758 
    Impairment on leased assets and surrendered assets  7,601   —   —   7,601   — 
    FDIC insurance  1,383   1,402   1,147   5,278   4,779 
    Other expense  8,820   6,906   5,211   29,969   21,606 
    Total noninterest expense  54,183   46,733   44,488   193,262   173,902 
    (Loss) income before income taxes  (72,127)  22,556   27,152   (22,902)  107,573 
    Income tax (benefit) expense  (19,586)  4,080   6,441   (9,472)  32,113 
    Net (loss) income  (52,541)  18,476   20,711   (13,430)  75,460 
    Preferred stock dividends  2,228   2,229   2,228   8,913   8,913 
    Net (loss) income available to common shareholders $(54,769) $16,247  $18,483  $(22,343) $66,547 
               
    Basic (loss) earnings per common share $(2.52) $0.74  $0.84  $(1.05) $2.97 
    Diluted (loss) earnings per common share $(2.52) $0.74  $0.84  $(1.05) $2.97 


    MIDLAND STATES BANCORP, INC.
    RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited)
               
    Adjusted Earnings Reconciliation
               
      For the Three Months Ended For the Years Ended
    (dollars in thousands, except per share data)  December 31,
    2024     		 September 30,
    2024     		 December 31,
     2023     		 December 31,
     2024     		 December 31,
     2023 
    (Loss) income before income tax (benefit) expense - GAAP $(72,127) $22,556  $27,152  $(22,902) $107,573 
    Adjustments to noninterest income:          
    Loss on sales of investment securities, net  34   44   2,894   230   9,372 
    (Gain) on sale of Visa B shares  —   —   (1,098)  —   (1,098)
    Loss (gain) on repurchase of subordinated debt  13   (77)  —   (231)  (676)
    Total adjustments to noninterest income  47   (33)  1,796   (1)  7,598 
    Adjusted (loss) earnings pre tax - non-GAAP  (72,080)  22,523   28,948   (22,903)  115,171 
    Adjusted (loss) earnings tax (benefit) expense  (19,573)  4,071   6,927   (9,472)  29,682 
    Adjusted (loss) earnings - non-GAAP  (52,507)  18,452   22,021   (13,431)  85,489 
    Preferred stock dividends  2,228   2,229   2,228   8,913   8,913 
    Adjusted (loss) earnings available to common shareholders $(54,735) $16,223  $19,793  $(22,344) $76,576 
    Adjusted diluted (loss) earnings per common share $(2.52) $0.74  $0.89  $(1.05) $3.42 
    Adjusted (loss) return on average assets (2.72)%  0.95%  1.11% (0.17)%  1.08%
    Adjusted (loss) return on average shareholders' equity (25.89)%  9.23%  11.42% (1.69)%  11.10%
    Adjusted (loss) return on average tangible common equity (41.74)%  12.67%  16.51% (4.40)%  15.98%
     
               
    Adjusted Pre-Tax, Pre-Provision Earnings Reconciliation
               
      For the Three Months Ended For the Years Ended
      December 31, September 30, December 31, December 31, December 31,
    (dollars in thousands)  2024   2024   2023   2024   2023 
    Adjusted (loss) earnings pre tax - non-GAAP $(72,080) $22,523  $28,948  $(22,903) $115,171 
    Provision for credit losses  93,540   5,000   6,950   129,340   21,132 
    Adjusted pre-tax, pre-provision earnings - non-GAAP $21,460  $27,523  $35,898  $106,437  $136,303 
    Adjusted pre-tax, pre-provision return on average assets  1.11%  1.42%  1.80%  1.37%  1.72%


    MIDLAND STATES BANCORP, INC.
    RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited)
               
    Efficiency Ratio Reconciliation
               
      For the Three Months Ended For the Years Ended
      December 31, September 30, December 31, December 31, December 31,
    (dollars in thousands)  2024   2024   2023   2024   2023 
    Noninterest expense - GAAP $54,183  $46,733  $44,488  $193,262  $173,902 
               
    Net interest income - GAAP $56,035  $54,950  $58,077  $221,957  $236,017 
    Effect of tax-exempt income  221   205   183   810   828 
    Adjusted net interest income  56,256   55,155   58,260   222,767   236,845 
               
    Noninterest income - GAAP  19,561   19,339   20,513   77,743   66,590 
    Loss on sales of investment securities, net  34   44   2,894   230   9,372 
    (Gain) on sale of Visa B shares  —   —   (1,098)  —   (1,098)
    Loss (gain) on repurchase of subordinated debt  13   (77)  —   (231)  (676)
    Adjusted noninterest income  19,608   19,306   22,309   77,742   74,188 
               
    Adjusted total revenue $75,864  $74,461  $80,569  $300,509  $311,033 
               
    Efficiency ratio  71.42%  62.76%  55.22%  64.31%  55.91%
               
    Return on Average Tangible Common Equity
               
      For the Three Months Ended For the Years Ended
      December 31, September 30, December 31, December 31, December 31,
    (dollars in thousands)  2024   2024   2023   2024   2023 
    Net (loss) income available to common shareholders $(54,769) $16,247  $18,483  $(22,343) $66,547 
               
    Average total shareholders' equity—GAAP $806,707  $795,322  $764,790  $793,984  $770,095 
    Adjustments:          
    Preferred Stock  (110,548)  (110,548)  (110,548)  (110,548)  (110,548)
    Goodwill  (161,904)  (161,904)  (161,904)  (161,904)  (161,904)
    Other intangible assets, net  (12,551)  (13,506)  (16,644)  (14,011)  (18,376)
    Average tangible common equity $521,704  $509,364  $475,694  $507,521  $479,267 
    (Loss) return on average tangible common equity (41.76)        %  12.69%  15.41% (4.40)        %  13.89%


    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
    (dollars in thousands, except per share data)  December 31,
    2024     		  September 30,
    2024     		 June 30,
     2024     		 March 31,
     2024     		 December 31,
     2023 
    Shareholders' Equity to Tangible Common Equity        
    Total shareholders' equity—GAAP $736,113  $818,259  $785,772  $791,006  $791,853 
    Adjustments:          
    Preferred Stock  (110,548)  (110,548)  (110,548)  (110,548)  (110,548)
    Goodwill  (161,904)  (161,904)  (161,904)  (161,904)  (161,904)
    Other intangible assets, net  (12,100)  (13,052)  (14,003)  (15,019)  (16,108)
    Tangible common equity  451,561   532,755   499,317   503,535   503,293 
               
    Less: Accumulated other comprehensive loss (AOCI)  (81,960)  (60,640)  (82,581)  (81,419)  (76,753)
    Tangible common equity excluding AOCI $533,521  $593,395  $581,898  $584,954  $580,046 
               
    Total Assets to Tangible Assets:          
    Total assets—GAAP $7,529,055  $7,751,483  $7,757,274  $7,831,809  $7,866,868 
    Adjustments:          
    Goodwill  (161,904)  (161,904)  (161,904)  (161,904)  (161,904)
    Other intangible assets, net  (12,100)  (13,052)  (14,003)  (15,019)  (16,108)
    Tangible assets $7,355,051  $7,576,527  $7,581,367  $7,654,886  $7,688,856 
               
    Common Shares Outstanding  21,494,485   21,393,905   21,377,215   21,485,231   21,551,402 
               
    Tangible Common Equity to Tangible Assets  6.14%  7.03%  6.59%  6.58%  6.55%
    Tangible Book Value Per Share $21.01  $24.90  $23.36  $23.44  $23.35 
    Tangible Book Value Per Share, excluding AOCI $24.82  $27.74  $27.22  $27.23  $26.91 

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