EFFINGHAM, Ill., Oct. 09, 2025 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (NASDAQ: MSBI) announced today that it will issue its third quarter 2025 financial results after market close on Thursday, October 30, 2025. Along with the press release announcing the financial results, the Company will publish an investor presentation that will be available on the Webcasts and Presentations page of its investor relations website. About Midland States Bancorp, Inc. Midland States Bancorp, Inc. is a community-ba ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to _______________ Commission File Number 001-35272 MIDLAND STATES BANCORP, INC. (Exact name of registrant as specified in its charter) (State of other jurisdic ...

[PART I. FINANCIAL INFORMATION](index=2&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part provides the unaudited consolidated financial statements and management's discussion and analysis for the quarter ended March 31, 2025 [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Midland States Bancorp, Inc., including balance sheets, income statements, comprehensive income, shareholders' equity, and cash flows for the periods ended March 31, 2025, and December 31, 2024 (or March 31, 2024 for income/cash flow statements). It also includes detailed notes explaining significant accounting policies, investment securities, loans, goodwill impairment, derivatives, deposits, borrowings, and segment information [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) This section details the company's financial position, including assets, liabilities, and equity, as of March 31, 2025, and December 31, 2024 Consolidated Balance Sheet Highlights (March 31, 2025 vs. December 31, 2024) ($ in thousands) | Metric | March 31, 2025 (Unaudited) | December 31, 2024 | | :--------------------------------- | :-------------------------- | :------------------ | | Total assets | $7,284,804 | $7,506,809 | | Total loans, net | $4,912,877 | $5,056,370 | | Investment securities available for sale, at fair value | $1,364,201 | $1,207,574 | | Goodwill | $7,927 | $161,904 | | Total deposits | $5,936,434 | $6,197,243 | | Federal Home Loan Bank advances and other borrowings | $498,000 | $258,000 | | Total liabilities | $6,713,367 | $6,795,962 | | Total shareholders' equity | $571,437 | $710,847 | - Total assets decreased by **$222.0 million** from December 31, 2024, to March 31, 2025, primarily due to a significant reduction in goodwill and net loans, partially offset by an increase in investment securities[12](index=12&type=chunk) - Goodwill saw a substantial decrease from **$161.9 million** to **$7.9 million**, reflecting an impairment charge[12](index=12&type=chunk) [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) This section presents the company's revenues, expenses, and net income (loss) for the three months ended March 31, 2025, and March 31, 2024 Consolidated Statements of Income Highlights (Three Months Ended March 31, 2025 vs. 2024) ($ in thousands) | Metric | March 31, 2025 (Unaudited) | March 31, 2024 (Unaudited) | Change (YoY) | | :--------------------------------- | :-------------------------- | :-------------------------- | :------------- | | Total interest income | $99,355 | $105,526 | $(6,171) | | Total interest expense | $41,065 | $45,755 | $(4,690) | | Net interest income | $58,290 | $59,771 | $(1,481) | | Provision for credit losses | $10,850 | $19,942 | $(9,092) | | Total noninterest income | $17,763 | $37,841 | $(20,078) | | Total noninterest expense | $203,005 | $48,608 | $154,397 | | Net (loss) income | $(140,974) | $22,663 | $(163,637) | | Basic (loss) earnings per common share | $(6.58) | $0.92 | $(7.50) | | Diluted (loss) earnings per common share | $(6.58) | $0.92 | $(7.50) | - The company reported a net loss of **$140.97 million** in Q1 2025, a significant decline from a net income of **$22.66 million** in Q1 2024, primarily driven by a **$154.0 million** goodwill impairment charge[14](index=14&type=chunk) - Noninterest expense surged by **$154.4 million** year-over-year, largely due to the goodwill impairment[14](index=14&type=chunk) [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This section reports the company's comprehensive income (loss), including net income and other comprehensive income (loss), for the three months ended March 31, 2025, and March 31, 2024 Consolidated Statements of Comprehensive Income Highlights (Three Months Ended March 31, 2025 vs. 2024) ($ in thousands) | Metric | March 31, 2025 (Unaudited) | March 31, 2024 (Unaudited) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Net (loss) income | $(140,974) | $22,663 | | Other comprehensive income (loss), net of tax | $9,621 | $(4,666) | | Total comprehensive (loss) income | $(131,353) | $17,997 | - Total comprehensive loss for Q1 2025 was **$(131.35) million**, a substantial decrease from comprehensive income of **$17.99 million** in Q1 2024, primarily due to the net loss[16](index=16&type=chunk) - Other comprehensive income, net of tax, improved significantly to **$9.62 million** in Q1 2025 from a loss of $(4.67) million in Q1 2024, driven by unrealized gains on investment securities available for sale[16](index=16&type=chunk) [Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity) This section outlines changes in shareholders' equity, including net loss, other comprehensive income, and dividends, between December 31, 2024, and March 31, 2025 Consolidated Statements of Shareholders' Equity Highlights (March 31, 2025 vs. December 31, 2024) ($ in thousands) | Metric | December 31, 2024 | March 31, 2025 | | :--------------------------------- | :------------------ | :-------------------------- | | Total shareholders' equity | $710,847 | $571,437 | | Net loss | — | $(140,974) | | Other comprehensive income | — | $9,621 | | Common dividends declared | — | $(6,782) | | Preferred dividends declared | — | $(2,228) | - Total shareholders' equity decreased by **$139.41 million** from December 31, 2024, to March 31, 2025, primarily due to the net loss of **$140.97 million** and dividend payments, partially offset by other comprehensive income[18](index=18&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section details the company's cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2025, and March 31, 2024 Consolidated Statements of Cash Flows Highlights (Three Months Ended March 31, 2025 vs. 2024) ($ in thousands) | Cash Flow Activity | March 31, 2025 (Unaudited) | March 31, 2024 (Unaudited) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Net cash provided by operating activities | $24,700 | $43,072 | | Net cash provided by investing activities | $39,465 | $26,914 | | Net cash used in financing activities | $(76,925) | $(37,731) | | Net (decrease) increase in cash and cash equivalents | $(12,760) | $32,255 | | Cash and cash equivalents, end of period | $102,006 | $167,316 | - Net cash provided by operating activities decreased to **$24.70 million** in Q1 2025 from **$43.07 million** in Q1 2024, despite a significant goodwill impairment adjustment[21](index=21&type=chunk) - Net cash used in financing activities increased to **$(76.93) million** in Q1 2025 from **$(37.73) million** in Q1 2024, primarily due to a net decrease in deposits and an increase in FHLB borrowings[21](index=21&type=chunk) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures for the consolidated financial statements, covering accounting policies, specific financial instruments, and segment information [Note 1: Summary of Significant Accounting Policies](index=9&type=section&id=Note%201:%20Summary%20of%20Significant%20Accounting%20Policies) This note describes the company's business operations and significant accounting policies, including recent accounting pronouncements - Midland States Bancorp, Inc. is a diversified financial holding company offering commercial and consumer banking, equipment financing, merchant services, trust, investment management, and insurance/financial planning services[23](index=23&type=chunk) - The company's primary income sources are interest on loans and investment securities, supplemented by noninterest income from various services[24](index=24&type=chunk) - New accounting guidance (ASU No. 2023-09) on income tax disclosures is effective for fiscal years beginning after December 15, 2024, with no material impact beyond additional disclosures[28](index=28&type=chunk) - FASB ASU No. 2024-03, requiring disaggregation of income statement expenses, is effective for annual periods beginning after December 15, 2026, with early adoption permitted[29](index=29&type=chunk) [Note 2: Investment Securities](index=11&type=section&id=Note%202:%20Investment%20Securities) This note provides details on the company's investment securities portfolio, including fair values and unrealized gains or losses Investment Securities Available for Sale (March 31, 2025 vs. December 31, 2024) ($ in thousands) | Category | March 31, 2025 Fair Value | December 31, 2024 Fair Value | | :--------------------------------- | :-------------------------- | :-------------------------- | | U.S. Treasury securities | $1,000 | $0 | | U.S. government sponsored entities and U.S. agency securities | $25,100 | $20,141 | | Mortgage-backed securities - agency | $1,006,339 | $847,056 | | Mortgage-backed securities - non-agency | $95,188 | $101,012 | | Asset-backed student loans | $47,401 | $49,973 | | State and municipal securities | $69,111 | $69,061 | | Collateralized loan obligations | $39,212 | $40,450 | | Corporate securities | $80,850 | $79,881 | | Total available for sale securities | $1,364,201 | $1,207,574 | Unrealized Losses on Investment Securities Available for Sale (March 31, 2025 vs. December 31, 2024) ($ in thousands) | Metric | March 31, 2025 Unrealized Loss | December 31, 2024 Unrealized Loss | | :--------------------------------- | :-------------------------- | :-------------------------- | | Total available for sale securities (Gross unrealized losses) | $(99,944) | $(112,358) | | Aggregate depreciation from amortized cost basis | 10.68% | N/A | - At March 31, 2025, 263 investment securities had unrealized losses, with aggregate depreciation of **10.68%** from their amortized cost, primarily due to changes in interest rates. These losses are considered temporary as the company does not intend to sell and is not required to sell prior to anticipated recovery[36](index=36&type=chunk) [Note 3: Loans](index=13&type=section&id=Note%203:%20Loans) This note presents a detailed breakdown of the loan portfolio, allowance for credit losses, and nonaccrual loans Total Loans Outstanding by Portfolio Class (March 31, 2025 vs. December 31, 2024) ($ in thousands) | Portfolio Class | March 31, 2025 | December 31, 2024 | | :--------------------------------- | :-------------------------- | :-------------------------- | | Commercial | $772,876 | $818,496 | | Commercial other | $496,686 | $541,324 | | Commercial real estate non-owner occupied | $1,597,251 | $1,628,961 | | Commercial real estate owner occupied | $441,910 | $440,806 | | Multi-family | $486,141 | $454,249 | | Farmland | $67,023 | $67,648 | | Construction and land development | $264,966 | $299,842 | | Residential first lien | $312,367 | $315,775 | | Other residential | $60,728 | $64,782 | | Consumer | $91,371 | $96,202 | | Consumer other | $53,566 | $48,099 | | Lease financing | $373,168 | $391,390 | | Total loans | $5,018,053 | $5,167,574 | Allowance for Credit Losses on Loans (Three Months Ended March 31, 2025 vs. 2024) ($ in thousands) | Metric | March 31, 2025 | March 31, 2024 | | :--------------------------------- | :-------------------------- | :-------------------------- | | Balance, beginning of period | $111,204 | $159,319 | | Provision for credit losses on loans | $10,850 | $19,942 | | Charge-offs | $(17,996) | $(19,008) | | Recoveries | $1,118 | $591 | | Balance, end of period | $105,176 | $160,844 | - The allowance for credit losses on loans decreased to **$105.18 million** at March 31, 2025, from **$111.20 million** at December 31, 2024, with a provision for credit losses of **$10.85 million** in Q1 2025[46](index=46&type=chunk) - Total nonaccrual loans were **$139.49 million** at March 31, 2025, slightly down from **$140.14 million** at December 31, 2024[57](index=57&type=chunk) - Loan restructurings totaled **$1.44 million** in Q1 2025, primarily involving term extensions and interest rate reductions for borrowers experiencing financial difficulties[64](index=64&type=chunk) [Note 4: Premises, Equipment and Leases](index=26&type=section&id=Note%204:%20Premises,%20Equipment%20and%20Leases) This note details the company's premises, equipment, and operating lease assets and liabilities Premises, Equipment and Leases (March 31, 2025 vs. December 31, 2024) ($ in thousands) | Category | March 31, 2025 | December 31, 2024 | | :--------------------------------- | :-------------------------- | :-------------------------- | | Premises and equipment, net | $86,719 | $85,710 | | Operating lease right-of-use assets | $9,246 | $8,830 | | Operating lease liabilities | $10,519 | $10,100 | | Depreciation expense (Q1) | $1,200 | $1,200 | - Net premises and equipment increased slightly to **$86.72 million** at March 31, 2025, from **$85.71 million** at December 31, 2024[80](index=80&type=chunk) - Operating lease right-of-use assets and liabilities also saw minor increases, reflecting ongoing lease arrangements for banking offices and facilities[81](index=81&type=chunk) [Note 5: Operating Leases - Lessor](index=27&type=section&id=Note%205:%20Operating%20Leases%20-%20Lessor) This note provides information on the company's role as a lessor in operating lease arrangements, including leased equipment and related income Operating Leases - Lessor Highlights (Three Months Ended March 31, 2025 vs. 2024) ($ in thousands) | Metric | March 31, 2025 | March 31, 2024 | | :--------------------------------- | :-------------------------- | :-------------------------- | | Equipment leased to others, net (period end) | $26,800 | N/A | | Lease income | $3,100 | $4,500 | | Depreciation expense related to leased equipment | $2,300 | $3,600 | - The company's equipment leased to others (net) was **$26.8 million** at March 31, 2025, down from **$30.7 million** at December 31, 2024[83](index=83&type=chunk) - Lease income from operating leases decreased to **$3.1 million** in Q1 2025 from **$4.5 million** in Q1 2024[83](index=83&type=chunk) [Note 6: Goodwill](index=28&type=section&id=Note%206:%20Goodwill) This note explains the company's goodwill balance, including the significant impairment charge recognized in the current quarter Goodwill by Segment (March 31, 2025 vs. December 31, 2024) ($ in thousands) | Segment | March 31, 2025 | December 31, 2024 | | :--------------------------------- | :-------------------------- | :-------------------------- | | Banking | $3,181 | $157,158 | | Wealth management | $4,746 | $4,746 | | Total goodwill | $7,927 | $161,904 | - The company recognized a **$154.0 million** goodwill impairment expense in Q1 2025 for its Banking reporting unit[86](index=86&type=chunk) - The impairment was triggered by deteriorated credit quality and trends in the company's stock price, leading to the carrying amount exceeding the fair value of the Banking unit[86](index=86&type=chunk) - The impairment did not affect regulatory capital ratios, tangible common equity ratio, or liquidity position[86](index=86&type=chunk) [Note 7: Derivative Instruments](index=28&type=section&id=Note%207:%20Derivative%20Instruments) This note describes the company's use of derivative instruments for risk management and their fair value - The company uses derivative instruments, including interest rate swaps and options, to manage interest rate risk, converting fixed-rate instruments to variable-rate and vice versa[90](index=90&type=chunk)[91](index=91&type=chunk) Fair Value of Derivative Instruments (March 31, 2025 vs. December 31, 2024) ($ in thousands) | Category | March 31, 2025 Fair Value Assets | March 31, 2025 Fair Value Liabilities | December 31, 2024 Fair Value Assets | December 31, 2024 Fair Value Liabilities | | :--------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total derivatives designated as accounting hedges | $5,184 | $6,222 | $3,516 | $5,437 | | Total derivatives not designated as accounting hedges | $376 | $203 | $321 | $218 | - Credit enhancement derivatives, associated with third-party loan programs, had a fair value of **$5.6 million** at March 31, 2025, down from **$16.8 million** at December 31, 2024[105](index=105&type=chunk) - The decrease in credit enhancement derivative value was due to **$11.1 million** in charge-offs on a third-party loan origination program, which were fully reimbursed by the partner[227](index=227&type=chunk) [Note 8: Deposits](index=31&type=section&id=Note%208:%20Deposits) This note provides a detailed classification of the company's deposit accounts Classification of Deposits (March 31, 2025 vs. December 31, 2024) ($ in thousands) | Deposit Type | March 31, 2025 | December 31, 2024 | | :--------------------------------- | :-------------------------- | :-------------------------- | | Noninterest-bearing demand | $1,090,707 | $1,055,564 | | Interest-bearing checking | $2,161,282 | $2,378,256 | | Money market | $1,154,403 | $1,173,630 | | Savings | $522,663 | $507,305 | | Time | $1,007,379 | $1,082,488 | | Total deposits | $5,936,434 | $6,197,243 | - Total deposits decreased by **$260.81 million** to **$5.94 billion** at March 31, 2025, compared to December 31, 2024[229](index=229&type=chunk) - Interest-bearing checking, money market, and time deposits decreased, while noninterest-bearing demand and savings accounts increased[229](index=229&type=chunk) [Note 9: FHLB Advances and Other Borrowings](index=31&type=section&id=Note%209:%20FHLB%20Advances%20and%20Other%20Borrowings) This note details the company's Federal Home Loan Bank advances and other borrowing arrangements FHLB Advances and Other Borrowings (March 31, 2025 vs. December 31, 2024) ($ in thousands) | Borrowing Type | March 31, 2025 | December 31, 2024 | | :--------------------------------- | :-------------------------- | :-------------------------- | | FHLB advances – fixed rate, fixed term | $133,000 | $133,000 | | FHLB advances – putable fixed rate | $125,000 | $125,000 | | FHLB advances – Short term fixed rate | $240,000 | $0 | | Total FHLB advances and other borrowings | $498,000 | $258,000 | - Total FHLB advances and other borrowings increased significantly to **$498.0 million** at March 31, 2025, from **$258.0 million** at December 31, 2024, primarily due to **$240.0 million** in short-term fixed-rate FHLB advances[108](index=108&type=chunk) - These advances are collateralized by qualifying mortgage, home equity, and commercial real estate loans, totaling approximately **$3.10 billion** at March 31, 2025[108](index=108&type=chunk) [Note 10: Subordinated Debt](index=32&type=section&id=Note%2010:%20Subordinated%20Debt) This note provides information on the company's subordinated debt, including outstanding amounts and interest rates Subordinated Debt (March 31, 2025 vs. December 31, 2024) ($ in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--------------------------------- | :-------------------------- | :-------------------------- | | Outstanding amount | $78,000 | $78,000 | | Carrying amount | $77,754 | $77,749 | | Current rate (Fixed to Float, Issued Sept 2019) | 7.91% | 7.94% | | Current rate (Fixed to Float, Issued Sept 2019) | 5.50% | 5.50% | - The company's subordinated debt remained stable at an outstanding amount of **$78.0 million**, with a carrying amount of **$77.75 million** at March 31, 2025[109](index=109&type=chunk) - These debentures may be included in Tier 2 capital under current regulatory guidelines[109](index=109&type=chunk) [Note 11: Accumulated Other Comprehensive Income (Loss)](index=33&type=section&id=Note%2011:%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) This note details the changes in accumulated other comprehensive income (loss) and its components Changes in AOCI (Three Months Ended March 31, 2025 vs. 2024) ($ in thousands) | Metric | March 31, 2025 | March 31, 2024 | | :--------------------------------- | :-------------------------- | :-------------------------- | | Balance, beginning of period | $(81,960) | $(76,753) | | Other comprehensive income (loss) before reclassifications | $9,004 | $(5,653) | | Amounts reclassified from AOCI to income | $617 | $987 | | Balance, end of period | $(72,339) | $(81,419) | - AOCI improved to a loss of **$(72.34) million** at March 31, 2025, from **$(81.96) million** at December 31, 2024, primarily due to other comprehensive income before reclassifications of **$9.00 million**[111](index=111&type=chunk) - Gains and losses on cash flow hedges were reclassified from AOCI to income, impacting interest income/expense[112](index=112&type=chunk) [Note 12: Earnings per Common Share](index=34&type=section&id=Note%2012:%20Earnings%20per%20Common%20Share) This note presents the calculation of basic and diluted earnings (loss) per common share Earnings Per Common Share (Three Months Ended March 31, 2025 vs. 2024) ($ in thousands) | Metric | March 31, 2025 | March 31, 2024 | | :--------------------------------- | :-------------------------- | :-------------------------- | | Net (loss) income available to common shareholders | $(143,202) | $20,435 | | Basic (loss) earnings per common share | $(6.58) | $0.92 | | Diluted (loss) earnings per common share | $(6.58) | $0.92 | | Weighted average common shares outstanding, basic | 21,795,570 | 21,774,647 | | Weighted average common shares outstanding, diluted | 21,795,570 | 21,787,691 | - Basic and diluted loss per common share was **$(6.58)** in Q1 2025, a significant decrease from earnings of **$0.92** in Q1 2024, reflecting the net loss available to common shareholders[113](index=113&type=chunk) [Note 13: Fair Value of Financial Instruments](index=34&type=section&id=Note%2013:%20Fair%20Value%20of%20Financial%20Instruments) This note outlines the fair value measurements of financial instruments, categorized by input levels - The company categorizes fair value measurements into Level 1 (quoted prices in active markets), Level 2 (significant other observable inputs), and Level 3 (significant unobservable inputs)[114](index=114&type=chunk)[115](index=115&type=chunk) Assets Measured at Fair Value on a Recurring Basis (March 31, 2025) ($ in thousands) | Asset Category | Carrying Amount | Level 1 | Level 2 | Level 3 | | :--------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Investment securities available for sale | $1,364,201 | $1,000 | $1,363,201 | $0 | | Equity securities | $4,204 | $4,204 | $0 | $0 | | Residential loans held for sale | $7,510 | $0 | $7,510 | $0 | | Credit enhancement asset | $5,615 | $0 | $0 | $5,615 | | Derivative assets | $5,260 | $0 | $5,260 | $0 | | Total | $1,386,790 | $5,204 | $1,375,971 | $5,615 | Assets Measured at Fair Value on a Non-Recurring Basis (March 31, 2025) ($ in thousands) | Asset Category | Carrying Amount | Level 1 | Level 2 | Level 3 | | :--------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Nonperforming loans | $106,354 | $0 | $0 | $106,354 | | Consumer loans held for sale | $280,311 | $0 | $0 | $280,311 | | Other real estate owned | $4,183 | $0 | $0 | $4,183 | - Nonperforming loans, consumer loans held for sale, and other real estate owned are measured at fair value on a non-recurring basis, primarily using Level 3 unobservable inputs[118](index=118&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk)[122](index=122&type=chunk) [Note 14: Commitments, Contingencies and Credit Risk](index=39&type=section&id=Note%2014:%20Commitments,%20Contingencies%20and%20Credit%20Risk) This note discloses the company's outstanding commitments, contingent liabilities, and credit risk exposures - The company has outstanding contingent liabilities from claims and legal actions, but no other material losses are anticipated[130](index=130&type=chunk) Loan Commitments (March 31, 2025 vs. December 31, 2024) ($ in thousands) | Commitment Type | March 31, 2025 | December 31, 2024 | | :--------------------------------- | :-------------------------- | :-------------------------- | | Commitments to extend credit | $782,808 | $754,202 | | Financial guarantees – standby letters of credit | $19,139 | $22,298 | - Commitments to extend credit increased to **$782.81 million** at March 31, 2025, from **$754.20 million** at December 31, 2024[133](index=133&type=chunk) [Note 15: Segment Information](index=40&type=section&id=Note%2015:%20Segment%20Information) This note provides financial information by the company's operating segments: Banking, Wealth Management, and Corporate - The company operates through three reportable segments: Banking, Wealth Management, and Corporate[134](index=134&type=chunk) - The Banking segment provides commercial, real estate, mortgage, and consumer loan products, equipment financing, deposit products, and treasury management services[135](index=135&type=chunk) - The Wealth Management segment offers trust and fiduciary services, brokerage, and retirement planning[136](index=136&type=chunk) Net Income (Loss) by Segment (Three Months Ended March 31, 2025 vs. 2024) ($ in thousands) | Segment | March 31, 2025 Net Income (Loss) | March 31, 2024 Net Income (Loss) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Banking | $(140,281) | $22,926 | | Wealth Management | $1,078 | $1,022 | | Corporate | $(1,771) | $(1,285) | | Total | $(140,974) | $22,663 | [Note 16: Revenue from Contracts with Customers](index=42&type=section&id=Note%2016:%20Revenue%20from%20Contracts%20with%20Customers) This note details noninterest income streams derived from contracts with customers, categorized under Topic 606 Noninterest Income - In-Scope of Topic 606 (Three Months Ended March 31, 2025 vs. 2024) ($ in thousands) | Revenue Stream | March 31, 2025 | March 31, 2024 | | :--------------------------------- | :-------------------------- | :-------------------------- | | Trust management/administration fees | $6,444 | $6,267 | | Investment advisory and brokerage fees | $483 | $423 | | Nonsufficient fund fees | $1,953 | $1,822 | | Interchange revenues | $3,151 | $3,358 | | Merchant services revenue | $338 | $344 | | Total noninterest income - in-scope | $13,781 | $12,212 | - Wealth management revenue, service charges on deposit accounts, and interchange revenue are key noninterest income streams within the scope of Topic 606[142](index=142&type=chunk) - Wealth management revenue is primarily from fees for managing trusts and customer assets, recognized monthly based on market value[143](index=143&type=chunk) - Service charges on deposit accounts include non-sufficient fund fees and other account-related charges, recognized over time or at the point of service[144](index=144&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance and condition, highlighting key factors that influenced results for the three months ended March 31, 2025, compared to December 31, 2024, and March 31, 2024. It covers critical accounting policies, factors affecting comparability (like goodwill impairment and loan portfolio sales), detailed results of operations, and an analysis of financial condition including assets, liabilities, capital, and liquidity [Critical Accounting Policies and Estimates](index=44&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section discusses key accounting policies and estimates, particularly those related to allowance for credit losses and goodwill impairment - Management's evaluation of the allowance for credit losses on loans (ACL) involves significant estimates, assumptions, and judgments, considering historical losses, economic forecasts, and collateral values[151](index=151&type=chunk) - Goodwill is subject to impairment testing at least annually or upon a triggering event, with a quantitative test performed if impairment is more likely than not[152](index=152&type=chunk)[153](index=153&type=chunk) - A **$154.0 million** goodwill impairment expense was recognized in Q1 2025 for the Banking reporting unit due to deteriorated credit quality and stock price trends, using a discounted cash flow analysis with a higher discount rate (**15.9%** vs. **13.4%** at Dec 31, 2024)[158](index=158&type=chunk) [Factors Affecting Comparability](index=46&type=section&id=Factors%20Affecting%20Comparability) This section highlights significant events, such as goodwill impairment and loan portfolio sales, that impact the comparability of financial results - A **$154.0 million** goodwill impairment expense was recognized in Q1 2025 for the Banking reporting unit, which did not impact regulatory capital ratios, tangible common equity, or liquidity[162](index=162&type=chunk) - The company sold its LendingPoint portfolio in Q4 2024, recognizing **$17.3 million** in net charge-offs, and committed to sell its GreenSky consumer loan portfolio, resulting in **$35.0 million** in net charge-offs when transferred to held for sale[163](index=163&type=chunk) - As of March 31, 2025, the company operates only one third-party loan origination and servicing program, down from three previously[160](index=160&type=chunk) [Results of Operations](index=47&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the company's financial performance, including net interest income, noninterest income, and expenses [Overview](index=47&type=section&id=Overview) This overview summarizes the company's key financial performance metrics for the three months ended March 31, 2025, compared to the prior year Key Performance Metrics (Three Months Ended March 31, 2025 vs. 2024) ($ in thousands) | Metric | March 31, 2025 | March 31, 2024 | | :--------------------------------- | :-------------------------- | :-------------------------- | | Net (loss) income | $(140,974) | $22,663 | | Diluted (loss) earnings per common share | $(6.58) | $0.92 | | Return on average assets | (7.66)% | 1.17% | | Return on average shareholders' equity | (79.89)% | 11.54% | - The company reported a net loss of **$141.0 million** in Q1 2025, a significant decrease from net income of **$22.7 million** in Q1 2024, primarily due to a **$154.4 million** increase in noninterest expense (goodwill impairment), a **$1.5 million** decrease in net interest income, and a **$20.1 million** decrease in noninterest income[165](index=165&type=chunk) [Net Interest Income and Margin](index=47&type=section&id=Net%20Interest%20Income%20and%20Margin) This section analyzes the company's net interest income and margin, including factors affecting interest income and expense Net Interest Income and Margin (Three Months Ended March 31, 2025 vs. 2024) ($ in thousands) | Metric | March 31, 2025 | March 31, 2024 | | :--------------------------------- | :-------------------------- | :-------------------------- | | Net interest income (tax-equivalent) | $58,498 | $59,986 | | Tax-equivalent net interest margin | 3.49% | 3.39% | | Total interest income | $99,563 | $105,741 | | Total interest expense | $41,065 | $45,755 | - Net interest income (tax-equivalent basis) decreased by **$1.5 million** to **$58.5 million** in Q1 2025, while the tax-equivalent net interest margin increased to **3.49%** from **3.39%**[169](index=169&type=chunk) - Average earning assets decreased by **$309.48 million**, primarily due to a **$954.6 million** decrease in average loans, partially offset by increases in investment securities and loans held for sale[176](index=176&type=chunk)[177](index=177&type=chunk) - Interest expense decreased by **$4.7 million**, driven by a decrease in deposit costs due to Federal Reserve rate decreases, despite a **$121.1 million** decrease in average interest-bearing deposit accounts[179](index=179&type=chunk)[180](index=180&type=chunk) [Provision for Credit Losses](index=51&type=section&id=Provision%20for%20Credit%20Losses) This section discusses the provision for credit losses, reflecting management's assessment of the allowance for credit losses Provision for Credit Losses (Three Months Ended March 31, 2025 vs. 2024) ($ in thousands) | Metric | March 31, 2025 | March 31, 2024 | | :--------------------------------- | :-------------------------- | :-------------------------- | | Provision for credit losses | $10,850 | $19,942 | - The provision for credit losses decreased to **$10.9 million** in Q1 2025 from **$19.9 million** in Q1 2024, with Q1 2024 including an **$8.0 million** specific reserve on a large construction loan[181](index=181&type=chunk) - The provision is determined quarterly based on management's evaluation of the allowance for credit losses, considering past loss experience, portfolio characteristics, economic conditions, and forecasts[182](index=182&type=chunk) [Noninterest Income](index=51&type=section&id=Noninterest%20Income) This section details the components of noninterest income and significant year-over-year changes Noninterest Income Components (Three Months Ended March 31, 2025 vs. 2024) ($ in thousands) | Noninterest Income Category | March 31, 2025 | March 31, 2024 | Change (YoY) | | :--------------------------------- | :-------------------------- | :-------------------------- | :------------- | | Wealth management revenue | $7,350 | $7,132 | $218 | | Service charges on deposit accounts | $3,305 | $3,116 | $189 | | Interchange revenue | $3,151 | $3,358 | $(207) | | Residential mortgage banking revenue | $676 | $527 | $149 | | Income on company-owned life insurance | $2,334 | $1,801 | $533 | | Credit enhancement (loss) income | $(578) | $16,654 | $(17,232) | | Other income | $1,525 | $5,253 | $(3,728) | | Total noninterest income | $17,763 | $37,841 | $(20,078) | - Total noninterest income decreased by **53.1%** (**$20.08 million**) in Q1 2025 compared to Q1 2024, primarily due to a **$17.23 million** decline in credit enhancement income[183](index=183&type=chunk)[186](index=186&type=chunk) - Credit enhancement income declined due to loan payoffs and the cessation of loan originations through the GreenSky and LendingPoint programs[186](index=186&type=chunk) - Wealth management revenue increased by **3.1%** to **$7.35 million**, and income on company-owned life insurance increased by **$0.5 million**, partly due to death benefits[184](index=184&type=chunk)[185](index=185&type=chunk) [Noninterest Expense](index=52&type=section&id=Noninterest%20Expense) This section analyzes the company's noninterest expenses, highlighting the impact of goodwill impairment and other operational costs Noninterest Expense Components (Three Months Ended March 31, 2025 vs. 2024) ($ in thousands) | Noninterest Expense Category | March 31, 2025 | March 31, 2024 | Increase (decrease) | | :--------------------------------- | :-------------------------- | :-------------------------- | :------------------ | | Salaries and employee benefits | $26,416 | $24,102 | $2,314 | | Occupancy and equipment | $4,498 | $4,142 | $356 | | Professional services | $2,741 | $2,255 | $486 | | Loan servicing fees | $750 | $3,741 | $(2,991) | | Impairment on goodwill | $153,977 | $0 | $153,977 | | Total noninterest expense | $203,005 | $48,608 | $154,397 | - Total noninterest expense increased by **$154.4 million** to **$203.0 million** in Q1 2025, primarily due to a **$154.0 million** goodwill impairment charge[187](index=187&type=chunk) - Salaries and employee benefits increased by **$2.3 million**, including **$1.4 million** in severance expense from a 25-employee headcount reduction[187](index=187&type=chunk) - Loan servicing fees decreased by **$3.0 million** due to loan payoffs and the cessation of third-party lending programs[191](index=191&type=chunk) [Income Tax Expense](index=53&type=section&id=Income%20Tax%20Expense) This section discusses the company's income tax expense and the tax implications of the goodwill impairment Income Tax Expense (Three Months Ended March 31, 2025 vs. 2024) ($ in thousands) | Metric | March 31, 2025 | March 31, 2024 | | :--------------------------------- | :-------------------------- | :-------------------------- | | Income tax expense | $3,172 | $6,399 | - Income tax expense decreased to **$3.2 million** in Q1 2025 from **$6.4 million** in Q1 2024[192](index=192&type=chunk) - The goodwill impairment recognized in Q1 2025 was not deductible for tax purposes[192](index=192&type=chunk) [Financial Condition](index=53&type=section&id=Financial%20Condition) This section provides an in-depth analysis of the company's balance sheet, including assets, liabilities, and capital resources [Assets](index=53&type=section&id=Assets) This section details the composition and changes in the company's asset base, including loans and investment securities - Total assets decreased to **$7.28 billion** at March 31, 2025, from **$7.51 billion** at December 31, 2024[193](index=193&type=chunk) [Loans](index=53&type=section&id=Loans) This section provides a detailed breakdown of the loan portfolio by class and an analysis of nonperforming loans Loan Portfolio Composition (March 31, 2025 vs. December 31, 2024) ($ in thousands) | Loan Category | March 31, 2025 Balance | March 31, 2025 Percent | December 31, 2024 Balance | December 31, 2024 Percent | | :--------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Commercial | $1,269,562 | 25.3% | $1,359,820 | 26.3% | | Commercial other | $496,686 | 9.9% | $541,324 | 10.5% | | Commercial real estate non-owner occupied | $1,597,251 | 31.8% | $1,628,961 | 31.5% | | Commercial real estate owner occupied | $441,910 | 8.8% | $440,806 | 8.5% | | Multi-family | $486,141 | 9.7% | $454,249 | 8.8% | | Farmland | $67,023 | 1.3% | $67,648 | 1.3% | | Construction and land development | $264,966 | 5.3% | $299,842 | 5.8% | | Residential first lien | $312,367 | 6.2% | $315,775 | 6.1% | | Other residential | $60,728 | 1.2% | $64,782 | 1.3% | | Consumer | $91,371 | 1.8% | $96,202 | 1.9% | | Consumer other | $53,566 | 1.1% | $48,099 | 0.9% | | Lease financing | $373,168 | 7.4% | $391,390 | 7.6% | | Total loans, gross | $5,018,053 | 100.0% | $5,167,574 | 100.0% | - Total loans decreased by **$149.5 million** (**2.9%**) to **$5.02 billion** at March 31, 2025, compared to December 31, 2024[198](index=198&type=chunk) - Community bank portfolio grew by **$69.9 million**, offsetting strategic declines in Specialty finance (**$158.5 million**) and Equipment finance (**$44.9 million**) portfolios[198](index=198&type=chunk) Nonperforming Assets (March 31, 2025 vs. December 31, 2024) ($ in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--------------------------------- | :-------------------------- | :-------------------------- | | Total nonperforming loans | $145,690 | $150,907 | | Other real estate owned and other repossessed assets | $5,574 | $6,502 | | Nonperforming assets | $151,264 | $157,409 | | Nonperforming loans to total loans | 2.90% | 2.92% | | Allowance for credit losses to nonperforming loans | 72.19% | 73.69% | - Nonperforming loans decreased to **$145.7 million** at March 31, 2025, from **$150.9 million** at December 31, 2024, as the company focuses on improving credit quality[216](index=216&type=chunk) [Investment Securities](index=60&type=section&id=Investment%20Securities) This section details the composition and changes in the company's investment securities portfolio Investment Securities Available for Sale (March 31, 2025 vs. December 31, 2024) ($ in thousands) | Category | March 31, 2025 Balance | March 31, 2025 Percent | December 31, 2024 Balance | December 31, 2024 Percent | | :--------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Mortgage-backed securities - agency | $1,006,339 | 73.7% | $847,056 | 70.1% | | Corporate securities | $80,850 | 5.9% | $79,881 | 6.6% | | State and municipal securities | $69,111 | 5.1% | $69,061 | 5.7% | | Total investment securities | $1,364,201 | 100.0% | $1,207,574 | 100.0% | - Total investment securities available for sale increased to **$1.36 billion** at March 31, 2025, from **$1.21 billion** at December 31, 2024[221](index=221&type=chunk) - The portfolio is primarily composed of mortgage-backed securities (**73.7%**) and has an average credit rating of AAA for a significant portion[221](index=221&type=chunk)[225](index=225&type=chunk) [Credit enhancement asset](index=62&type=section&id=Credit%20enhancement%20asset) This section discusses the fair value and changes in the company's credit enhancement derivative asset Credit Enhancement Asset Fair Value (March 31, 2025 vs. December 31, 2024) ($ in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--------------------------------- | :-------------------------- | :-------------------------- | | Fair value of derivative | $5,600 | $16,800 | | Charge-offs recognized on third-party loan program (Q1 2025) | $11,100 | N/A | | Decrease in credit enhancement derivative (Q1 2025) | $11,200 | N/A | - The fair value of credit enhancement derivatives decreased to **$5.6 million** at March 31, 2025, from **$16.8 million** at December 31, 2024[227](index=227&type=chunk) - This decrease was primarily due to **$11.1 million** in charge-offs on a third-party loan origination program, which were fully recovered from the third-party partner[227](index=227&type=chunk) [Liabilities](index=62&type=section&id=Liabilities) This section details the composition and changes in the company's liabilities, primarily focusing on deposits - Total liabilities decreased to **$6.71 billion** at March 31, 2025, from **$6.80 billion** at December 31, 2024[228](index=228&type=chunk) [Deposits](index=62&type=section&id=Deposits) This section provides a detailed breakdown of the company's deposit composition and changes over the period Deposit Composition (March 31, 2025 vs. December 31, 2024) ($ in thousands) | Deposit Type | March 31, 2025 Balance | March 31, 2025 Percent | December 31, 2024 Balance | December 31, 2024 Percent | | :--------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Noninterest-bearing demand | $1,090,707 | 18.4% | $1,055,564 | 17.0% | | Interest-bearing checking | $2,161,282 | 36.4% | $2,378,256 | 38.4% | | Money market | $1,154,403 | 19.4% | $1,173,630 | 18.9% | | Savings | $522,663 | 8.8% | $507,305 | 8.2% | | Time | $1,007,379 | 17.0% | $1,082,488 | 17.5% | | Total deposits | $5,936,434 | 100.0% | $6,197,243 | 100.0% | - Total deposits decreased by **$260.8 million** to **$5.94 billion** at March 31, 2025, compared to December 31, 2024[229](index=229&type=chunk) - Decreases in interest-bearing checking, money market, and time deposit accounts were partially offset by increases in noninterest-bearing demand and savings accounts[229](index=229&type=chunk) [Capital Resources and Liquidity Management](index=62&type=section&id=Capital%20Resources%20and%20Liquidity%20Management) This section analyzes the company's capital adequacy, liquidity position, and regulatory capital ratios [Capital Resources](index=62&type=section&id=Capital%20Resources) This section details the changes in shareholders' equity and factors affecting the company's capital base Shareholders' Equity (March 31, 2025 vs. December 31, 2024) ($ in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--------------------------------- | :-------------------------- | :-------------------------- | | Shareholders' equity | $571,437 | $710,847 | | Net loss | $(140,974) | N/A | | Dividends to common shareholders | $(6,782) | N/A | | Dividends to preferred shareholders | $(2,228) | N/A | | Decrease in accumulated other comprehensive losses | $9,621 | N/A | - Shareholders' equity decreased by **$139.4 million** to **$571.4 million** at March 31, 2025, primarily due to the net loss and dividend payments, partially offset by a decrease in accumulated other comprehensive losses (**$9.6 million**)[232](index=232&type=chunk) [Liquidity Management](index=63&type=section&id=Liquidity%20Management) This section outlines the company's liquidity sources and management strategies to meet financial obligations Sources of Liquidity (March 31, 2025 vs. December 31, 2024) ($ in thousands) | Source | March 31, 2025 | December 31, 2024 | | :--------------------------------- | :-------------------------- | :-------------------------- | | Cash and cash equivalents | $102,006 | $114,766 | | Unpledged securities | $880,920 | $672,399 | | FHLB committed liquidity | $1,015,704 | $1,290,246 | | FRB discount window availability | $504,205 | $538,835 | | Total Estimated Liquidity | $2,502,835 | $2,616,246 | | Additional credit facility | $392,000 | $360,000 | | Brokered CDs (additional capacity) | $400,000 | $350,000 | | ICS One Way Buy (additional capacity) | $350,000 | $0 | - Total estimated liquidity decreased to **$2.50 billion** at March 31, 2025, from **$2.62 billion** at December 31, 2024, primarily due to a decrease in FHLB committed liquidity[236](index=236&type=chunk) - The company maintains various liquidity sources, including cash, unpledged securities, FHLB committed liquidity, and FRB discount window availability[236](index=236&type=chunk) [Regulatory Capital Requirements](index=63&type=section&id=Regulatory%20Capital%20Requirements) This section presents the company's regulatory capital ratios and compliance with 'well-capitalized' requirements Regulatory Capital Ratios (March 31, 2025) | Ratio | Actual (Midland States Bancorp, Inc.) | Minimum Regulatory Requirements | Well Capitalized | | :--------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total risk-based capital ratio | 13.51% | 10.50% | N/A | | Tier 1 risk-based capital ratio | 11.16% | 8.50% | N/A | | Common equity tier 1 risk-based capital ratio | 8.32% | 7.00% | N/A | | Tier 1 leverage ratio | 9.11% | 4.00% | N/A | - At March 31, 2025, both the Company and Midland States Bank exceeded all regulatory minimum capital requirements and met the regulatory definition of 'well-capitalized'[238](index=238&type=chunk) - The capital conservation buffer of 2.5% is included in the total risk-based, Tier 1 risk-based, and Common equity tier 1 risk-based capital ratios[239](index=239&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=64&type=section&id=Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section provides disclosures on the company's exposure to market risks, primarily interest rate risk and price risk [Market Risk](index=64&type=section&id=Market%20Risk) This section identifies the primary market risks the company is exposed to, including interest rate and price risk - The company is primarily exposed to interest rate risk and secondarily to price risk from investments in securities[240](index=240&type=chunk) [Interest Rate Risk](index=64&type=section&id=Interest%20Rate%20Risk) This section details the company's interest rate risk exposure and its assessment using Net Interest Income at Risk modeling - Interest rate risk arises from timing differences in repricings and maturities of assets/liabilities, embedded options, yield curve changes, and spread relationships[241](index=241&type=chunk) - The company uses Net Interest Income (NII) at Risk modeling to assess interest rate sensitivity under various scenarios, including parallel shifts in market interest rates[246](index=246&type=chunk)[247](index=247&type=chunk) Net Interest Income Sensitivity (Shocks) (March 31, 2025 vs. December 31, 2024) ($ in thousands) | Immediate Change in Rates | March 31, 2025 Dollar Change | March 31, 2025 Percent Change | December 31, 2024 Dollar Change | December 31, 2024 Percent Change | | :--------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | -200 bps | $8,078 | 3.6% | $2,395 | 1.1% | | -100 bps | $3,490 | 1.6% | $1,395 | 0.6% | | +100 bps | $(1,619) | (0.7)% | $(2,727) | (1.2)% | | +200 bps | $(3,430) | (1.5)% | $(5,596) | (2.5)% | - NII at Risk results for March 31, 2025, project increasing profitability in a declining rate environment, consistent with December 31, 2024, and within board policy limits[249](index=249&type=chunk) [Price Risk](index=65&type=section&id=Price%20Risk) This section describes the company's exposure to price risk from adverse movements in the fair values of financial instruments - Price risk is the risk of loss from adverse movements in the fair values of financial instruments, including investment securities, derivative instruments, and equity investments[250](index=250&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=65&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section refers to the market risk disclosures provided in Item 2, 'Management's Discussion and Analysis of Financial Condition and Results of Operations – Quantitative and Qualitative Disclosures about Market Risk' - The quantitative and qualitative disclosures about market risk are incorporated by reference from Item 2 of this report[251](index=251&type=chunk) [Item 4. Controls and Procedures](index=66&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were not effective as of March 31, 2025, due to ongoing remediation of previously identified material weaknesses in internal controls over financial reporting. Despite this, the consolidated financial statements fairly present the company's financial condition, results of operations, and cash flows - The company's disclosure controls and procedures were deemed not effective as of March 31, 2025, due to un-remediated material weaknesses in internal controls over financial reporting[254](index=254&type=chunk) - Despite the material weaknesses, management concluded that the consolidated financial statements in this Form 10-Q fairly present the company's financial condition, results of operations, and cash flows[255](index=255&type=chunk) - No changes in internal control over financial reporting materially affected or are reasonably likely to materially affect the company's internal control over financial reporting during the quarter[256](index=256&type=chunk) [PART II. OTHER INFORMATION](index=66&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part includes information on legal proceedings, risk factors, equity sales, other disclosures, and exhibits [Item 1. Legal Proceedings](index=66&type=section&id=Item%201.%20Legal%20Proceedings) The company is not a party to any material pending legal proceedings other than ordinary routine litigation incidental to its business. No other material losses are anticipated from these actions or claims - There are no material pending legal proceedings, other than ordinary routine litigation incidental to the business[258](index=258&type=chunk) - No other material losses are anticipated as a result of these actions or claims[130](index=130&type=chunk) [Item 1A. Risk Factors](index=66&type=page&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes from the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[260](index=260&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=67&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company had no unregistered sales of equity securities during the period. It repurchased 543 shares of common stock in February 2025 at an average price of $21.42 per share, primarily under employee stock purchase programs and for tax withholding obligations - No unregistered sales of equity securities occurred during the first quarter of 2025[262](index=262&type=chunk) Issuer Purchases of Equity Securities (Q1 2025) | Period | Total number of shares purchased | Average price paid per share | | :--------------------------------- | :-------------------------- | :-------------------------- | | February 1 - 28, 2025 | 543 | $21.42 | | Total | 543 | $21.42 | - Shares repurchased were under the employee stock purchase program and for tax withholding obligations upon vesting of restricted stock awards[264](index=264&type=chunk) [Item 5. Other Information](index=67&type=section&id=Item%205.%20Other%20Information) During the three months ended March 31, 2025, no director or officer of the company adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' - No director or officer adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during Q1 2025[266](index=266&type=chunk) [Item 6. Exhibits](index=68&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications (Rule 13(a)-14(a) and 18 U.S.C. Section 1350), and financial information formatted in iXBRL - Includes CEO and CFO certifications required by Rule 13(a)-14(a) and 18 U.S.C. Section 1350[269](index=269&type=chunk) - Financial information from the Quarterly Report on Form 10-Q is formatted in iXBRL[269](index=269&type=chunk) [SIGNATURES](index=69&type=section&id=SIGNATURES) This section contains the official signatures of the company's President, Chief Executive Officer, and Chief Financial Officer, certifying the report - The report is duly signed on August 8, 2025, by Jeffrey G. Ludwig, President and Chief Executive Officer, and Eric T. Lemke, Chief Financial Officer[274](index=274&type=chunk)

Group 1 - Midland States Bancorp, Inc. declared a quarterly cash dividend of $0.32 per share, marking a 3.2% increase from the previous dividend of $0.31 per share [1] - The dividend is payable on August 22, 2025, to shareholders of record as of August 15, 2025 [1] - The Board also declared a cash dividend of $0.4844 per depository share on its 7.75% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A, payable on September 30, 2025 [2] Group 2 - This dividend declaration represents the 25th consecutive year of increased quarterly cash dividends for Midland States Bancorp [3] - The company's capital ratios are strong, with significant improvements in earnings and asset quality noted in the second quarter [3] - The increase in the quarterly dividend is part of the company's capital return strategy to shareholders while retaining sufficient capital for growth [3] Group 3 - As of June 30, 2025, Midland States Bancorp had total assets of approximately $7.11 billion, with its Wealth Management Group managing about $4.18 billion in assets [4] - The company offers a comprehensive range of commercial and consumer banking products and services, including business equipment financing and trust and investment management [4]

Core Points - Midland States Bancorp, Inc. declared a quarterly cash dividend of $0.32 per share, marking a 3.2% increase from the previous dividend of $0.31 per share [1] - The company has increased its quarterly cash dividend for 25 consecutive years, indicating a strong commitment to returning capital to shareholders [3] - The bank's capital ratios are strong, with significant improvements in earnings and asset quality noted in the second quarter [3] Dividend Details - The cash dividend of $0.32 per share is payable on August 22, 2025, to shareholders of record as of August 15, 2025 [1] - Additionally, a cash dividend of $0.4844 per depository share on its 7.75% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A, will be payable on September 30, 2025, to stockholders of record as of September 15, 2025 [2] Company Overview - Midland States Bancorp, Inc. is a community-based financial holding company headquartered in Effingham, Illinois, and is the sole shareholder of Midland States Bank [4] - As of June 30, 2025, the company had total assets of approximately $7.11 billion, with its Wealth Management Group managing approximately $4.18 billion in assets [4] - The company offers a full range of commercial and consumer banking products and services, including business equipment financing, merchant credit card services, trust and investment management, insurance, and financial planning services [4]

Core Insights - Midland States Bancorp (MSBI) reported revenue of $82.23 million for the quarter ended June 2025, marking a year-over-year increase of 13.1% and a surprise of +6.24% over the Zacks Consensus Estimate of $77.4 million [1] - The earnings per share (EPS) for the same period was $0.44, compared to $0.20 a year ago, although it fell short of the consensus EPS estimate of $0.63, resulting in an EPS surprise of -30.16% [1] Financial Performance Metrics - Net Interest Margin was reported at 3.6%, slightly above the two-analyst average estimate of 3.5% [4] - Net charge-offs to average loans stood at 2.3%, significantly higher than the 0.6% average estimate [4] - Efficiency Ratio was 60.6%, better than the estimated 63.3% [4] - Average Balance of Total interest-earning assets was $6.64 billion, below the estimated $6.86 billion [4] - Residential mortgage banking revenue was $0.76 million, lower than the $0.85 million average estimate [4] - Wealth management revenue reached $7.38 million, slightly above the $7.23 million average estimate [4] - Net Interest Income (FTE)/Adjusted net interest income was $58.96 million, below the estimated $60.26 million [4] - Total Noninterest Income was $23.53 million, exceeding the two-analyst average estimate of $17.26 million [4] - Service charges on deposit accounts were $3.35 million, above the $3.09 million estimate [4] - Interchange revenue was reported at $3.46 million, compared to the $3.09 million average estimate [4] Stock Performance - Shares of Midland States Bancorp have returned +8.4% over the past month, outperforming the Zacks S&P 500 composite's +5.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - Midland States Bancorp (MSBI) reported quarterly earnings of $0.44 per share, missing the Zacks Consensus Estimate of $0.63 per share, representing a -30.16% earnings surprise [1] - The company posted revenues of $82.23 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 6.24% [2] Financial Performance - Earnings per share (EPS) for the same quarter last year was $0.20, indicating a significant year-over-year increase [1] - The company has surpassed consensus revenue estimates four times over the last four quarters [2] - The current consensus EPS estimate for the upcoming quarter is $0.69 on revenues of $77.8 million, and for the current fiscal year, it is $2.51 on revenues of $309.25 million [7] Market Performance - Midland States Bancorp shares have declined approximately 24% since the beginning of the year, contrasting with the S&P 500's gain of 8.1% [3] - The company's Zacks Rank is currently 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Outlook - The Banks - Northeast industry, to which Midland States Bancorp belongs, is currently in the top 23% of over 250 Zacks industries, suggesting a favorable industry outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5]

Core Viewpoint - Midland States Bancorp, Inc. reported a significant decrease in net income for the second quarter of 2025, reflecting a recovery from a substantial loss in the previous quarter, with ongoing improvements in credit quality and profitability expected for the remainder of the year [1][2][4]. Financial Performance - Net income available to common shareholders for Q2 2025 was $9.8 million, or $0.44 per diluted share, down from $23.5 million, or $1.06 per diluted share in Q2 2024 [1][7]. - Compared to Q1 2025, which had a net loss of $143.2 million due to goodwill impairment, the company showed a recovery in profitability [2][19]. - Pre-provision net revenue increased to $32.2 million in Q2 2025 from $27.0 million in Q1 2025 [7]. - The net interest margin expanded by 7 basis points to 3.56% in Q2 2025, compared to 3.49% in Q1 2025 [7][15]. Credit Quality - Non-performing assets decreased to $111 million, or 1.56% of total assets, down from $151 million, or 2.08% in Q1 2025 [5][7]. - The company reported limited new substandard or non-performing loans during the quarter, with substandard accruing loans and non-performing loans decreasing to $58.5 million and $109.5 million, respectively [8][19]. - Net charge-offs for the quarter were $29.9 million, with significant charge-offs in the specialty finance portfolio [8][21]. Capital and Liquidity - Capital levels increased quarter-over-quarter, with a common equity tier 1 capital ratio of 9.02% and total capital to risk-weighted assets at 14.50% [7][20]. - The company successfully exited two larger non-performing relationships totaling $29 million after the quarter-end, which is expected to further improve the non-performing asset ratio [5][19]. Loan Portfolio and Deposits - Total loans as of June 30, 2025, were $5.06 billion, reflecting an increase of $46.6 million from March 31, 2025 [14]. - Total deposits were $5.95 billion, a slight increase of $10.5 million from the previous quarter, with notable increases in commercial and public fund deposits [14][29]. Wealth Management - Wealth management revenue totaled $7.4 million in Q2 2025, with assets under administration reaching $4.18 billion [14][21].

[Executive Summary & Second Quarter 2025 Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Second%20Quarter%202025%20Highlights) This chapter provides an overview of Midland States Bancorp, Inc.'s financial performance and strategic outlook for Q2 2025, highlighting key financial results and management's perspective on future direction [Second Quarter 2025 Financial Performance](index=1&type=section&id=2.1%20Second%20Quarter%202025%20Financial%20Performance) Midland States Bancorp, Inc. reported net income available to common shareholders of $9.8 million, or $0.44 per diluted share, for Q2 2025, a significant recovery from a net loss in Q1 2025 but a decrease from Q2 2024 Net Income and Diluted EPS | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--------------------------------- | :------ | :-------- | :------ | | Net Income Available to Common Shareholders | $9.8M | ($143.2M) | $23.5M | | Diluted EPS | $0.44 | ($6.58) | $1.06 | - Adjusted earnings for Q2 2025 were **$9.8 million**, or **$0.44** per diluted share, compared to **$10.8 million**, or **$0.49** per diluted share, in the prior quarter[7](index=7&type=chunk) - Pre-provision net revenue (PPNR) increased to **$32.2 million**, or **$1.48** per diluted share, in Q2 2025, up from **$27.0 million**, or **$1.24** per diluted share, in Q1 2025[7](index=7&type=chunk) [President & CEO's Discussion of Outlook](index=1&type=section&id=2.2%20President%20%26%20CEO's%20Discussion%20of%20Outlook) President & CEO Jeffrey G. Ludwig highlighted Q2 2025 as a step towards a more normalized operating environment, with progress in community banking growth and credit quality improvement - Non-performing assets decreased to **$111 million** (**1.56%** of total assets) in Q2 2025, down from **$151 million** (**2.08%** of total assets) in Q1 2025[6](index=6&type=chunk)[7](index=7&type=chunk) - Post-quarter-end, the bank exited two larger non-performing relationships totaling **$29 million** in July, which would further reduce the non-performing asset ratio by **41 basis points**[6](index=6&type=chunk) - The company continues to target growing its common equity tier 1 capital ratio to **10.0%**, with current levels at **9.02%**[5](index=5&type=chunk)[7](index=7&type=chunk) - Profitability trends were favorable, with net interest margin expanding **7 basis points** to **3.56%** and strong contribution from wealth management, with further improvement expected over the balance of 2025[8](index=8&type=chunk) [Asset Quality and Loan Portfolio Management](index=2&type=section&id=Asset%20Quality%20and%20Loan%20Portfolio%20Management) This section details the company's credit quality trends, including changes in nonperforming assets and net charge-offs, along with strategic adjustments to its loan portfolio composition [Credit Quality Trends](index=2&type=section&id=3.1%20Credit%20Quality%20Trends) Midland States Bancorp demonstrated an acceleration of credit clean-up in Q2 2025, with significant reductions in nonperforming assets and loans, though net charge-offs increased primarily from specialty and equipment finance portfolios Credit Quality Metrics (in thousands) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :---------------------------------- | :------------ | :------------- | :------------ | | Loans 30-89 days past due | $40,959 | $48,221 | $54,045 | | Nonperforming loans | $109,512 | $145,690 | $112,124 | | Nonperforming assets | $111,174 | $151,264 | $123,774 | | Substandard accruing loans | $58,478 | $77,620 | $135,555 | | Net charge-offs | $29,854 | $16,878 | $13,883 | | Nonperforming assets to total assets | 1.56% | 2.08% | 1.61% | - Net charge-offs for the quarter totaled **$29.9 million**, including **$13.9 million** in specialty finance (with **$10.2 million** previously reserved) and **$3.9 million** in equipment finance, mainly from the trucking industry[12](index=12&type=chunk) - Provision for credit losses on loans was **$17.4 million**, primarily due to continued trends in the equipment finance portfolio[12](index=12&type=chunk) [Loan Portfolio Changes](index=2&type=section&id=3.2%20Loan%20Portfolio%20Changes) Total loans increased slightly to $5.06 billion at June 30, 2025, driven by Community Bank and non-core loan growth, offset by intentional reductions in higher-risk portfolios Loan Segment (in millions) | Loan Segment | June 30, 2025 (in millions) | Change from March 31, 2025 (in millions) | | :-------------------------- | :-------------------------- | :--------------------------------------- | | Total Loans | $5,064.7 | +$46.6 | | Community Bank Loans | $3,318.2 | +$58.9 (1.8%) | | Non-core loans (third-party) | $333.5 | +$212.8 | | Specialty Finance | $701.2 | -$173.3 | | Equipment Finance | $711.7 | -$51.8 | - The increase in non-core loans was a result of financing the sale of the GreenSky portfolio[14](index=14&type=chunk) - The company continues to reduce exposure to higher-risk portfolios like Specialty Finance and Equipment Finance through tightened underwriting standards[6](index=6&type=chunk)[14](index=14&type=chunk) [Deposits, Funding, and Net Interest Margin](index=3&type=section&id=Deposits%2C%20Funding%2C%20and%20Net%20Interest%20Margin) This section analyzes the company's deposit growth and mix, funding costs, and the factors influencing the expansion of its net interest margin during the quarter [Deposit Trends and Mix](index=3&type=section&id=4.1%20Deposit%20Trends%20and%20Mix) Total deposits increased modestly to $5.95 billion at June 30, 2025, driven by commercial and public fund growth, partially offset by decreases in other deposit categories, with a significant servicing deposit reduction post-quarter-end Deposit Type (in millions) | Deposit Type | June 30, 2025 (in millions) | Change from March 31, 2025 (in millions) | | :-------------------------- | :-------------------------- | :--------------------------------------- | | Total Deposits | $5,946.9 | +$10.5 | | Commercial Deposits | $1,145.4 | +$70.5 | | Public Fund Deposits | $618.2 | +$127.8 | | Noninterest-bearing Deposits | $1,074.2 | -$16.5 | | Retail Deposits | $2,811.8 | -$34.7 | | Servicing Deposits | $785.7 | -$56.9 | | Brokered Deposits | $248.7 | -$109.4 | - Servicing deposits decreased by **$284.4 million** in July 2025 due to the acquisition of a servicing customer, which is anticipated to positively impact future net interest margin[14](index=14&type=chunk) [Net Interest Margin Performance](index=4&type=section&id=4.2%20Net%20Interest%20Margin%20Performance) The net interest margin expanded by 7 basis points to 3.56% in Q2 2025, primarily due to a continued decline in the cost of funding following Federal Reserve rate cuts Net Interest Margin | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :---------------- | :------ | :------ | :------ | | Net Interest Margin | 3.56% | 3.49% | 3.33% | | Cost of Deposits | 2.19% | 2.29% | 2.55% | - The decline in the cost of deposits to **2.19%** in Q2 2025 was attributed to Federal Reserve rate cuts implemented in late 2024[15](index=15&type=chunk) [Noninterest Income and Expense Trends](index=5&type=section&id=Noninterest%20Income%20and%20Expense%20Trends) This section examines the changes in the company's noninterest income, including specific drivers, and analyzes the significant fluctuations in noninterest expenses, particularly the impact of the prior quarter's goodwill impairment [Noninterest Income](index=5&type=section&id=5.1%20Noninterest%20Income) Noninterest income increased to $23.5 million in Q2 2025, significantly boosted by $3.8 million in credit enhancement income related to fully reimbursed charge-offs Total Noninterest Income (in millions) | Metric | Q2 2025 (in millions) | Q1 2025 (in millions) | | :---------------------- | :-------------------- | :-------------------- | | Total Noninterest Income | $23.5 | $17.8 | | Credit Enhancement Income | $3.8 | ($0.6) | - The credit enhancement income of **$3.8 million** was primarily due to an increase in charge-offs in third-party loan origination and servicing programs, which were fully reimbursed by the program sponsor[22](index=22&type=chunk) [Noninterest Expense](index=5&type=section&id=5.2%20Noninterest%20Expense) Noninterest expense significantly decreased to $50.0 million in Q2 2025, primarily due to the absence of the $154.0 million goodwill impairment charge recorded in Q1 2025 Total Noninterest Expense (in millions) | Metric | Q2 2025 (in millions) | Q1 2025 (in millions) | | :-------------------- | :-------------------- | :-------------------- | | Total Noninterest Expense | $50.0 | $203.0 | | Impairment on Goodwill | $0.0 | $154.0 | - The Q1 2025 noninterest expense included a **$154.0 million** goodwill impairment charge[3](index=3&type=chunk)[22](index=22&type=chunk) - The company is experiencing elevated professional services, legal fees, and other expenses associated with loan collections and the restatement of financial statements[22](index=22&type=chunk) [Capital Adequacy](index=5&type=section&id=Capital%20Adequacy) As of June 30, 2025, Midland States Bank and the Company exceeded all regulatory capital requirements under Basel III, with Midland States Bank qualifying as a 'well-capitalized' financial institution, and the company targeting a 10.0% Common Equity Tier 1 capital ratio Capital Ratios | Capital Ratio | Midland States Bank | Midland States Bancorp, Inc. | Minimum Regulatory Requirements (2) | | :---------------------------------- | :------------------ | :--------------------------- | :---------------------------------- | | Total capital to risk-weighted assets | 13.74% | 14.50% | 10.50% | | Tier 1 capital to risk-weighted assets | 12.49% | 12.07% | 8.50% | | Common equity Tier 1 capital to risk-weighted assets | 12.49% | 9.02% | 7.00% | | Tier 1 leverage ratio | 9.93% | 9.59% | 4.00% | - The company's Common Equity Tier 1 capital ratio was **9.02%**, with a target of **10.0%**[5](index=5&type=chunk)[7](index=7&type=chunk)[20](index=20&type=chunk) [Key Performance Indicators (KPIs)](index=5&type=section&id=Key%20Performance%20Indicators%20%28KPIs%29) The company's key performance indicators for Q2 2025 show a rebound in profitability metrics like Return on Average Assets and Pre-provision Net Revenue to Average Assets, alongside an improved efficiency ratio, reflecting ongoing credit management efforts Key Performance Indicators | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :---------------------------------- | :------------ | :------------- | :------------ | | Return on average assets | 0.67% | (7.66)% | 1.33% | | Pre-provision net revenue to average assets | 1.81% | 1.47% | 2.07% | | Net interest margin | 3.56% | 3.49% | 3.33% | | Efficiency ratio | 60.60% | 64.29% | 55.79% | | Noninterest expense to average assets | 2.80% | 11.02% | 2.62% | | Net charge-offs to average loans | 2.34% | 1.35% | 0.94% | | Tangible book value per share at period end | $20.68 | $20.54 | $21.07 | | Diluted earnings (loss) per common share | $0.44 | ($6.58) | $1.06 | | Trust assets under administration | $4,181,180 | $4,101,414 | $3,996,175 | [Company Overview and Disclosures](index=6&type=section&id=Company%20Overview%20and%20Disclosures) This section provides essential background information about Midland States Bancorp, Inc., clarifies the use of non-GAAP financial measures, and includes important disclaimers regarding forward-looking statements [About Midland States Bancorp, Inc.](index=6&type=section&id=7.1%20About%20Midland%20States%20Bancorp%2C%20Inc.) Midland States Bancorp, Inc. is an Illinois-based community financial holding company with approximately $7.11 billion in total assets and $4.18 billion in assets under administration as of June 30, 2025, offering a comprehensive suite of financial services - Midland States Bancorp, Inc. is headquartered in Effingham, Illinois, and is the sole shareholder of Midland States Bank[23](index=23&type=chunk) - As of June 30, 2025, total assets were approximately **$7.11 billion**, and Wealth Management Group assets under administration were approximately **$4.18 billion**[23](index=23&type=chunk) - The company provides a full range of commercial and consumer banking products, business equipment financing, merchant credit card services, trust and investment management, insurance, and financial planning services[23](index=23&type=chunk) [Non-GAAP Financial Measures](index=6&type=section&id=7.2%20Non-GAAP%20Financial%20Measures) The press release includes several non-GAAP financial measures to offer management and investors a more complete understanding of the company's funding profile and profitability, serving as supplemental information rather than substitutes for GAAP measures - Non-GAAP financial measures include Pre-provision net revenue, Pre-provision net revenue per diluted share, Pre-provision net revenue to average assets, Efficiency ratio, Tangible common equity to tangible assets, and Tangible book value per share[25](index=25&type=chunk) - These measures are considered supplemental and are not substitutes for GAAP financial measures, aiming to provide a more complete understanding of the company's funding profile and profitability[25](index=25&type=chunk) [Forward-Looking Statements](index=6&type=section&id=7.3%20Forward-Looking%20Statements) The report contains forward-looking statements regarding future performance, goals, and earnings, which are subject to various risks and uncertainties, and the company does not undertake to update or revise them - Forward-looking statements include those about the Company's plans, objectives, future performance, goals, and future earnings levels, including anticipated noninterest income and operating expenses[26](index=26&type=chunk) - These statements are subject to risks and uncertainties such as changes in interest rates, economic conditions, financial markets, and regulatory developments[26](index=26&type=chunk) - The company does not undertake any obligation to update or revise any forward-looking statements[26](index=26&type=chunk) [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) This section presents the detailed consolidated balance sheet, income statement, and breakdowns of the loan and deposit portfolios, offering a comprehensive view of the company's financial position and performance [Consolidated Balance Sheet](index=7&type=section&id=8.1%20Consolidated%20Balance%20Sheet) The consolidated balance sheet shows total assets of $7.11 billion at June 30, 2025, a decrease from $7.28 billion at March 31, 2025, with key changes in loans held for sale, cash, and shareholders' equity Consolidated Balance Sheet (dollars in thousands) | (dollars in thousands) | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :---------------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | **Assets** | | | | | | | Cash and cash equivalents | $176,587 | $102,006 | $114,766 | $121,873 | $124,646 | | Investment securities | 1,354,652 | 1,368,405 | 1,212,366 | 1,216,795 | 1,099,654 | | Loans, net | 4,972,005 | 4,912,877 | 5,056,370 | 5,577,170 | 5,673,614 | | Loans held for sale | 7,899 | 287,821 | 344,947 | 8,001 | 5,555 | | Goodwill | 7,927 | 7,927 | 161,904 | 161,904 | 161,904 | | Total assets | $7,107,878 | $7,284,804 | $7,506,809 | $7,704,189 | $7,708,074 | | **Liabilities and Shareholders' Equity** | | | | | | | Total deposits | 5,946,919 | 5,936,434 | 6,197,243 | 6,256,836 | 6,118,023 | | FHLB advances and other borrowings | 345,000 | 498,000 | 258,000 | 425,000 | 600,000 | | Total liabilities | 6,534,173 | 6,713,367 | 6,795,962 | 6,932,968 | 6,971,295 | | Total shareholders' equity | 573,705 | 571,437 | 710,847 | 771,221 | 736,779 | [Consolidated Income Statement](index=8&type=section&id=8.2%20Consolidated%20Income%20Statement) The consolidated income statement for Q2 2025 shows net interest income of $58.7 million, a significant increase in total noninterest income, and a substantial decrease in total noninterest expense due to the absence of the Q1 goodwill impairment, resulting in a net income of $12.0 million Consolidated Income Statement (dollars in thousands, except per share data) | (dollars in thousands, except per share data) | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :-------------------------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Net interest income | $58,695 | $58,290 | $58,570 | $59,110 | $58,895 | | Total provision for credit losses | 17,369 | 10,850 | 74,183 | 17,925 | 8,282 | | Total noninterest income | 23,534 | 17,763 | 35,371 | 33,545 | 31,984 | | Total noninterest expense | 49,992 | 203,005 | 58,699 | 49,764 | 50,784 | | Income (loss) before income taxes | 14,868 | (137,802) | (38,941) | 24,966 | 31,813 | | Net income (loss) | 12,024 | (140,974) | (30,769) | 20,431 | 25,719 | | Net income (loss) available to common shareholders | $9,796 | ($143,202) | ($32,997) | $18,202 | $23,491 | | Diluted earnings (loss) per common share | $0.44 | ($6.58) | ($1.52) | $0.83 | $1.06 | [Loan Portfolio Mix](index=9&type=section&id=8.3%20Loan%20Portfolio%20Mix) The loan portfolio mix at June 30, 2025, shows a slight increase in total loans, with growth in commercial loans and non-core programs, while specialty finance and equipment finance portfolios continued to decline, and commercial real estate remains the largest segment Loan Portfolio Mix (dollars in thousands) | Loan Portfolio Mix (dollars in thousands) | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :---------------------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Commercial loans | $1,178,792 | $879,286 | $934,847 | $879,590 | $955,667 | | Equipment finance loans | 364,526 | 390,276 | 416,970 | 442,552 | 461,409 | | Equipment finance leases | 347,155 | 373,168 | 391,390 | 417,531 | 428,659 | | Total commercial loans and leases | 1,891,541 | 1,642,730 | 1,751,211 | 1,789,871 | 1,845,735 | | Commercial real estate | 2,412,761 | 2,592,325 | 2,591,664 | 2,510,472 | 2,421,505 | | Construction and land development | 258,729 | 264,966 | 299,842 | 422,253 | 476,528 | | Residential real estate | 361,261 | 373,095 | 380,557 | 378,658 | 378,393 | | Consumer | 140,403 | 144,937 | 144,300 | 626,983 | 706,896 | | Total loans | $5,064,695 | $5,018,053 | $5,167,574 | $5,728,237 | $5,829,057 | | **Loan Portfolio Segment** | | | | | | | Total Community Bank | 3,318,247 | 3,259,350 | 3,202,551 | 3,178,882 | 3,134,309 | | Specialty finance | 701,244 | 874,567 | 1,038,238 | 1,018,961 | 1,107,508 | | Equipment finance | 711,681 | 763,444 | 808,359 | 860,083 | 890,068 | | Non-core loan program and other | 333,523 | 120,692 | 118,426 | 670,311 | 697,172 | [Deposit Portfolio Mix](index=9&type=section&id=8.4%20Deposit%20Portfolio%20Mix) The deposit portfolio mix shows a slight increase in total deposits, with growth in interest-bearing checking and money market accounts, while noninterest-bearing demand and brokered deposits declined, and commercial and public funds channels saw increases Deposit Portfolio Mix (dollars in thousands) | Deposit Portfolio Mix (dollars in thousands) | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :------------------------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Noninterest-bearing demand | $1,074,212 | $1,090,707 | $1,055,564 | $1,050,617 | $1,108,521 | | Interest-bearing: Checking | 2,180,717 | 2,161,282 | 2,378,256 | 2,389,970 | 2,343,533 | | Interest-bearing: Money market | 1,216,357 | 1,154,403 | 1,173,630 | 1,187,139 | 1,143,668 | | Interest-bearing: Savings | 511,470 | 522,663 | 507,305 | 510,260 | 538,462 | | Interest-bearing: Time | 818,813 | 818,732 | 822,981 | 849,413 | 852,415 | | Interest-bearing: Brokered time | 145,350 | 188,647 | 259,507 | 269,437 | 131,424 | | Total deposits | $5,946,919 | $5,936,434 | $6,197,243 | $6,256,836 | $6,118,023 | | **Deposit Portfolio by Channel** | | | | | | | Retail | $2,811,838 | $2,846,494 | $2,749,650 | $2,695,077 | $2,742,494 | | Commercial | 1,145,369 | 1,074,837 | 1,209,815 | 1,218,657 | 1,217,068 | | Public Funds | 618,172 | 490,374 | 505,912 | 574,704 | 568,889 | | Servicing | 785,659 | 842,567 | 896,436 | 958,662 | 931,892 | | Brokered Deposits | 248,707 | 358,063 | 473,451 | 390,558 | 238,708 | [Non-GAAP Financial Measure Reconciliations](index=10&type=section&id=Non-GAAP%20Financial%20Measure%20Reconciliations) This section provides detailed reconciliations of non-GAAP financial measures, including adjusted earnings, pre-provision net revenue, efficiency ratio, and tangible common equity, to their most directly comparable GAAP measures [Adjusted Earnings Reconciliation](index=10&type=section&id=9.1%20Adjusted%20Earnings%20Reconciliation) The adjusted earnings reconciliation shows the impact of non-recurring items, primarily the goodwill impairment, on reported earnings, with Q2 2025 adjusted earnings of $9.8 million consistent with GAAP net income due to no significant adjustments Adjusted Earnings Reconciliation (dollars in thousands, except per share data) | (dollars in thousands, except per share data) | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :-------------------------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Income (loss) before income tax (benefit) expense - GAAP | $14,868 | ($137,802) | ($38,941) | $24,966 | $31,813 | | Impairment on goodwill | — | (153,977) | — | — | — | | Adjusted earnings (loss) pre tax - non-GAAP | 14,868 | 16,175 | (38,894) | 24,933 | 31,798 | | Adjusted earnings (loss) available to common shareholders | $9,796 | $10,775 | ($32,963) | $18,178 | $23,480 | | Adjusted diluted earnings (loss) per common share | $0.44 | $0.49 | ($1.52) | $0.82 | $1.06 | [Pre-Provision Net Revenue Reconciliation](index=10&type=section&id=9.2%20Pre-Provision%20Net%20Revenue%20Reconciliation) The reconciliation of Pre-provision Net Revenue (PPNR) highlights the company's profitability before accounting for credit losses and goodwill impairment, with PPNR for Q2 2025 increasing to $32.2 million, reflecting improved operational performance Pre-Provision Net Revenue Reconciliation (dollars in thousands) | (dollars in thousands) | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :--------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Income (loss) before income taxes | $14,868 | ($137,802) | ($38,941) | $24,966 | $31,813 | | Provision for credit losses | 17,369 | 10,850 | 74,183 | 17,925 | 8,282 | | Impairment on goodwill | — | 153,977 | — | — | — | | Pre-provision net revenue | $32,237 | $27,025 | $35,242 | $42,891 | $40,095 | | Pre-provision net revenue per diluted share | $1.48 | $1.24 | $1.62 | $1.98 | $1.84 | | Pre-provision net revenue to average assets | 1.81% | 1.47% | 1.83% | 2.21% | 2.07% | [Efficiency Ratio Reconciliation](index=11&type=section&id=9.3%20Efficiency%20Ratio%20Reconciliation) The efficiency ratio reconciliation adjusts noninterest expense for goodwill impairment and net interest income for tax-exempt income, showing an improved adjusted efficiency ratio of 60.60% in Q2 2025, indicating better cost management Efficiency Ratio Reconciliation (dollars in thousands) | (dollars in thousands) | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :--------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Noninterest expense - GAAP | $49,992 | $203,005 | $58,699 | $49,764 | $50,784 | | Impairment on goodwill | — | (153,977) | — | — | — | | Adjusted noninterest expense | $49,992 | $49,028 | $58,699 | $49,764 | $50,784 | | Adjusted total revenue | $82,496 | $76,261 | $94,208 | $92,827 | $91,034 | | Efficiency ratio | 60.60% | 64.29% | 62.31% | 53.61% | 55.79% | [Tangible Common Equity to Tangible Assets Ratio and Tangible Book Value Per Share](index=11&type=section&id=9.4%20Tangible%20Common%20Equity%20to%20Tangible%20Assets%20Ratio%20and%20Tangible%20Book%20Value%20Per%20Share) The tangible common equity to tangible assets ratio improved to 6.27% at June 30, 2025, from 6.08% at March 31, 2025, and tangible book value per share increased to $20.68, reflecting a stronger capital position excluding intangible assets Tangible Common Equity to Tangible Assets Ratio and Tangible Book Value Per Share (dollars in thousands, except per share data) | (dollars in thousands, except per share data) | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :-------------------------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Total shareholders' equity—GAAP | $573,705 | $571,437 | $710,847 | $771,221 | $736,779 | | Tangible common equity | 444,868 | 441,773 | 426,295 | 485,717 | 450,324 | | Total assets—GAAP | $7,107,878 | $7,284,804 | $7,506,809 | $7,704,189 | $7,708,074 | | Tangible assets | $7,089,589 | $7,265,688 | $7,332,805 | $7,529,233 | $7,532,167 | | Tangible Common Equity to Tangible Assets | 6.27% | 6.08% | 5.81% | 6.45% | 5.98% | | Tangible Book Value Per Share | $20.68 | $20.54 | $19.83 | $22.70 | $21.07 |

Core Viewpoint - The market anticipates Midland States Bancorp (MSBI) will report a year-over-year increase in earnings driven by higher revenues for the quarter ended June 2025, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - The upcoming earnings report is expected on July 24, with a consensus EPS estimate of $0.63, reflecting a year-over-year increase of +215%. Revenues are projected to be $77.4 million, up 6.5% from the previous year [3][2]. Estimate Revisions - The consensus EPS estimate has been revised 1.47% higher in the last 30 days, indicating a collective reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate for Midland States Bancorp is lower than the consensus estimate, resulting in an Earnings ESP of -3.18%, indicating a bearish outlook from analysts [12]. Historical Performance - In the last reported quarter, Midland States Bancorp exceeded the expected EPS of $0.52 by delivering $0.57, resulting in a surprise of +9.62%. Over the last four quarters, the company has beaten consensus EPS estimates twice [13][14]. Conclusion - Despite the potential for an earnings beat, Midland States Bancorp does not appear to be a strong candidate for exceeding earnings expectations based on current estimates and rankings [17].