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].

Financial Results Announcement - Midland States Bancorp, Inc. will issue its second quarter 2025 financial results after market close on July 24, 2025 [1] - An investor presentation will accompany the financial results and will be available on the company's investor relations website [1] Company Overview - Midland States Bancorp, Inc. is a community-based financial holding company headquartered in Effingham, Illinois [2] - The company is the sole shareholder of Midland States Bank and had total assets of approximately $7.28 billion as of March 31, 2025 [2] - The Wealth Management Group of the company had assets under administration of approximately $4.10 billion [2] - 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 [2]

Financial Position - As of December 31, 2024, the company had total assets of $7.51 billion and wealth management assets under administration of approximately $4.15 billion[26] - The commercial real estate and construction loan portfolio totaled $2.89 billion as of December 31, 2024, with a diversified composition across various property types[35] - The company reported a market share of 37.66% in Effingham County, IL, with total deposits of $1.06 billion as of June 30, 2024[42] - The multi-family property loans represented 18.9% of the commercial real estate loan portfolio, increasing from 18.1% in 2023[35] - The company had 896 employees as of December 31, 2024, with a focus on competitive salaries and employee development[43] Regulatory Environment - The Company is subject to extensive regulation under federal and state law, which affects its growth and earnings performance[48] - The Company has regulatory capital in excess of the Federal Reserve's requirements and meets the Basel III Rule requirements to be well-capitalized as of December 31, 2024[66] - The Basel III Rule increased the required minimum capital ratios, including a Common Equity Tier 1 Capital ratio of 4.5% of risk-weighted assets[63] - The Company is not subject to a directive from the Federal Reserve or the DFPR to increase its capital as of December 31, 2024[66] - The Regulatory Relief Act enacted in May 2018 provided regulatory relief for community banks, eliminating certain Dodd-Frank Act requirements[49] - The Basel III Rule requires banking organizations to maintain a capital conservation buffer of 2.5% in Common Equity Tier 1 Capital for capital distributions[60] - The Company believes that the reforms from the Regulatory Relief Act are favorable to its operations[49] - The supervisory framework for U.S. banking organizations subjects banks to regular examination, impacting their business conduct and growth[50] - The Basel III Endgame Proposal, proposed in July 2023, is not expected to significantly impact the Company or the Bank[61] - The Company has not yet elected to comply with the Community Bank Leverage Ratio (CBLR) framework, which requires a CBLR greater than 9% for eligibility[68] - The Company is subject to capital requirements including a Common Equity Tier 1 Capital ratio of 6.5% or more and a Total Capital ratio of 10% or more[71] - The FDIC's special assessment for banking organizations with assets of $5 billion or more is set at an annual rate of 13.4 basis points, effective from the first quarterly assessment period of 2024[90] - The Bank paid approximately $0.5 million in supervisory assessments to the DFPR during the year ended December 31, 2024[91] - The Dodd-Frank Act increased the minimum reserve ratio for the Deposit Insurance Fund (DIF) from 1.15% to 1.35% of estimated insured deposits[89] - The Company is required to maintain sufficient liquidity to withstand a range of stress events, as highlighted by recent banking failures[93] - The Federal Reserve has indicated that bank holding companies should eliminate or significantly reduce dividends if net income is insufficient to fund them[78] - The Company is legally obligated to act as a source of financial and managerial strength to the Bank under the Bank Holding Company Act (BHCA)[69] - The Company must maintain its status as a financial holding company by being well-capitalized and well-managed[74] - The Federal Reserve requires prior approval for any merger or acquisition involving the Company[70] - The Bank exceeded its capital requirements under applicable guidelines as of December 31, 2024[98] Risk Management - The liquidity coverage ratio (LCR) requires large financial firms to hold sufficient liquid assets to protect against funding constraints during financial turmoil[95] - The net stable funding ratio (NSFR) promotes more medium- and long-term funding of assets and activities over a one-year horizon[95] - The Bank is subject to restrictions on dividend payments, which cannot exceed the bank's calendar year-to-date net income plus retained income for the two preceding calendar years without Federal Reserve approval[97] - The Bank's CRA ratings can significantly impact its ability to engage in certain activities, including acquisitions[110] - As of December 31, 2024, the Bank did not exceed the guidelines for commercial real estate loan concentrations[116] - The Bank must maintain 2.5% in Common Equity Tier 1 Capital attributable to the capital conservation buffer to pay unrestricted dividends[98] - The federal banking agencies have identified elevated operational risk and strategic risks from non-depository financial institutions as key risk themes for 2024[106] - The Bank is required to implement a comprehensive information security program to protect customer records and information[107] - The Bank must comply with stringent economic and trade sanctions regimes administered by the Office of Foreign Assets Control[115] Financial Performance - The fair value of the Company's Banking reporting unit exceeded its carrying amount by approximately 7% as of December 31, 2024, indicating no impairment loss[332] - The Company expects to recognize goodwill impairment expense between $135.0 million and $154.0 million in the first quarter of 2025 due to deteriorated credit quality and stock price trends[337] - The Company has a net interest income sensitivity (NII at Risk) of $2,395 thousand for a -200 basis point shock and -$5,596 thousand for a +200 basis point shock as of December 31, 2024[323] - The Company reported a 1.1% increase in net interest income sensitivity for a -200 basis point change in rates as of December 31, 2024[323] - The Company is actively managing interest rate risk through monitoring loan and deposit flows, investment, funding, and hedging activities[318] Loan Programs - The Company operates three significant programs for unsecured commercial and consumer loans, with terms ranging from five months to 25 years[338] - As of December 31, 2024, loans outstanding in the programs were $110.4 million, a decrease from $853.4 million in 2023[341] - $336.7 million is included in loans held for sale at lower of cost or market due to the decision to pursue a sale of that portion of the portfolio[341] - The servicer guarantees a targeted return paid first by customer payments, supplemented if necessary[340] - Excess yield on the portfolio after realized charge-offs is paid to the servicer as a "performance fee" if above the agreed target rate[340] - Charge-offs exceeding the performance fee amount roll over to future periods to offset potential performance fees[340] - The program sponsor also guarantees a targeted return, similarly structured to the servicer's arrangement[340] - Excess yield after charge-offs is paid to the program sponsor as a "performance fee" if above the agreed target rate[340] - The program sponsor reimburses the Company for all excess charge-offs if they exceed the performance fee amount[340]

Financial Performance - Total assets reached $7.5 billion[7] - Net loss available to common shareholders was ($54.8 million), resulting in ($2.52) diluted EPS[9] - Pre-tax, pre-provision earnings amounted to $21.5 million[9] - Noninterest income was strong at $19.6 million[9] Loan Portfolio & Credit Quality - Total loans decreased by $581.2 million from the prior quarter, reaching $5.17 billion[19] - Net charge-offs to average loans was 7.23%[57] - Sold 100% of $87.1 million LendingPoint portfolio at a loss of $17.3 million[10] - Committed to sell 89% of $371.7 million GreenSky portfolio at a loss of $33.4 million, expected to close in Q1'25[10] Deposits & Liquidity - Total deposits decreased by $59.6 million from the prior quarter to $6.197 billion[26] - Loan-to-deposit ratio decreased to 83.4% from 91.9% at the end of the prior quarter[9] - Total estimated liquidity was $2.6162 billion as of December 31, 2024[15] Capital & Ratios - YTD Adjusted Return on Average Assets (ROAA) was (0.17)%[7] - YTD Adjusted Return on Tangible Common Equity (TCE) was (4.40)%[7] - Tangible Common Equity to Tangible Assets (TCE/TA) ratio was 6.14%[7]

Core Viewpoint - Midland States Bancorp (MSBI) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system emphasizes the importance of earnings estimate revisions, which are strongly correlated with near-term stock price movements [4][6]. - For the fiscal year ending December 2025, Midland States Bancorp is projected to earn $2.60 per share, reflecting a substantial increase of 347.6% from the previous year's reported figure [8]. Analyst Sentiment and Market Implications - Analysts have been consistently raising their earnings estimates for Midland States Bancorp, with a 3% increase in the Zacks Consensus Estimate over the past three months [8]. - The upgrade to Zacks Rank 2 places Midland States Bancorp in the top 20% of Zacks-covered stocks, suggesting potential for higher stock prices in the near term [10]. Zacks Rank System Overview - The Zacks Rank system categorizes stocks based on earnings estimates into five groups, with a proven track record of performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7]. - The Zacks rating system maintains a balanced distribution of 'buy' and 'sell' ratings, ensuring that only the top 20% of stocks are recognized for their superior earnings estimate revisions [9][10].

Core Viewpoint - Midland States Bancorp, Inc. received a deficiency notification from Nasdaq due to the late filing of its Annual Report on Form 10-K and Quarterly Report on Form 10-Q, indicating non-compliance with Nasdaq Listing Rule 5250(c)(1) [1][3]. Company Compliance Status - The notification does not have an immediate effect on the listing or trading of the Company's common stock on the Nasdaq Global Select Market [2]. - The Company has until June 2, 2025, to submit a plan to regain compliance with the Listing Rule, with a potential extension until September 29, 2025 [3]. Financial Reporting Evaluation - The Company is currently evaluating its accounting and financial reporting related to third-party lending and servicing arrangements, including assessing goodwill impairment [4]. Company Overview - Midland States Bancorp, Inc. is a community-based financial holding company with total assets of approximately $7.46 billion as of March 31, 2025, and its Wealth Management Group manages assets of about $4.10 billion [6].

Group 1 - Midland States Bancorp reported revenue of $75.95 million for the quarter ended March 2025, a year-over-year decline of 1.5% [1] - The company's EPS for the same period was $0.57, compared to $0.53 a year ago, indicating an increase [1] - The reported revenue exceeded the Zacks Consensus Estimate of $72.75 million by 4.40%, and the EPS also surpassed the consensus estimate of $0.52 by 9.62% [1] Group 2 - Key metrics for Midland States Bancorp include an efficiency ratio of 64.2%, better than the estimated 67.7% [4] - Average interest-earning assets were reported at $6.80 billion, slightly above the estimated $6.77 billion [4] - Net charge-offs to average loans were 1.4%, significantly higher than the estimated 0.4% [4] Group 3 - The net interest margin was reported at 3.5%, exceeding the average estimate of 3.2% [4] - Wealth management revenue was $7.35 million, slightly above the estimated $7.30 million [4] - Total noninterest income was $17.76 million, below the average estimate of $19 million [4] Group 4 - Shares of Midland States Bancorp have returned -4.2% over the past month, underperforming the Zacks S&P 500 composite's -0.2% change [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance in the near term [3]

Core Viewpoint - Midland States Bancorp (MSBI) reported quarterly earnings of $0.57 per share, exceeding the Zacks Consensus Estimate of $0.52 per share, and showing an increase from $0.53 per share a year ago, representing an earnings surprise of 9.62% [1][2] Financial Performance - The company posted revenues of $75.95 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 4.40%, although this is a decrease from $77.11 million in the same quarter last year [2] - Over the last four quarters, Midland States Bancorp has exceeded consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - Midland States Bancorp shares have declined approximately 32.5% since the beginning of the year, compared to a decline of 5.5% for the S&P 500 [3] - The current Zacks Rank for the stock is 5 (Strong Sell), indicating expectations of underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.64 on revenues of $73.95 million, and for the current fiscal year, it is $2.52 on revenues of $296.8 million [7] - The trend of estimate revisions for Midland States Bancorp has been unfavorable ahead of the earnings release [6] Industry Context - The Zacks Industry Rank for Banks - Northeast, to which Midland States Bancorp belongs, is currently in the top 25% of over 250 Zacks industries, suggesting a favorable industry outlook [8]

Financial Performance - Net income available to common shareholders for Q1 2025 was $12.6 million, or $0.57 per diluted share[6] - Pre-tax, pre-provision earnings for Q1 2025 were $27.0 million, or $1.12 per diluted share[6] - Net income available to common shareholders for the same period was $12,571,000, resulting in basic and diluted earnings per share of $0.57[29] - The company reported pre-tax, pre-provision earnings of $27,024,000 for the three months ended March 31, 2025[33] Loan and Asset Management - Total loans as of March 31, 2025, were $5.02 billion, a decrease of $149.5 million from December 31, 2024[12] - Nonperforming loans were $140.0 million, representing 2.79% of total loans as of March 31, 2025[10] - Net charge-offs for Q1 2025 were $16.9 million, with $11.1 million fully reimbursed related to third-party lending programs[11] - Total loans as of March 31, 2025, were $5,018,053,000, with a provision for credit losses on loans of $8,250,000[29] - The loan portfolio mix included $2,592,325,000 in commercial real estate loans as of March 31, 2025[31] Deposits and Interest - Total deposits were $5.94 billion as of March 31, 2025, a decrease of $260.8 million from December 31, 2024[12] - Total deposits as of March 31, 2025, were $5,936,434,000, with noninterest-bearing demand deposits of $1,090,707,000[31] - Net interest income for the three months ended March 31, 2025, was $58,186,000, with interest income of $99,251,000 and interest expense of $41,065,000[29] - Net interest margin was 3.48%, with the cost of deposits declining to 2.29%[13] Wealth Management - Wealth Management revenue totaled $7.4 million in Q1 2025, with assets under administration of $4.10 billion[12] - Wealth management revenue for the three months ended March 31, 2025, was $7,350,000[29] Regulatory Compliance and Capital - The Company exceeded all regulatory capital requirements under Basel III as of March 31, 2025[18] - Tangible common equity to tangible assets ratio was 6.32% as of March 31, 2025[35] Efficiency Metrics - The efficiency ratio for the three months ended March 31, 2025, was 64.24%[34] Future Projections - The Company expects noninterest income in the near term to be approximately $17.0 million to $17.5 million[20] Total Assets - Total assets as of March 31, 2025, amounted to $7,457,753,000[27]

Core Viewpoint - Midland States Bancorp, Inc. reported preliminary results for the first quarter of 2025, indicating ongoing evaluations of accounting and financial reporting related to third-party lending and servicing arrangements, which may lead to restated financial statements for 2024 [1][2]. Preliminary Financial Results - The preliminary results reflect updated accounting methodologies for third-party lending and servicing arrangements, with actual results potentially differing materially from these preliminary figures [2]. - Net income available to common shareholders for Q1 2025 was $12.6 million, or $0.57 per diluted share, with pre-tax, pre-provision earnings of $27.0 million, or $1.12 per diluted share [7][17]. Asset Quality and Credit Trends - As of March 31, 2025, nonperforming loans totaled $140.0 million, with net charge-offs of $16.9 million, including $11.1 million from fully reimbursed charge-offs related to third-party lending programs [11][12]. - The company reported no significant new substandard or nonperforming loans during the quarter, and substandard accruing loans decreased slightly to $75.7 million [11][12]. Loan and Deposit Portfolio - Total loans decreased to $5.02 billion, with a notable decrease in the Specialty Finance loan portfolio by $159.3 million due to tightened credit standards [12]. - Total deposits were $5.94 billion, reflecting a decrease of $260.8 million from the previous quarter, with retail deposits increasing by $96.8 million [12]. Profitability and Capital Ratios - The net interest margin for Q1 2025 was reported at 3.48%, with a continued decline in the cost of funding to 2.29% [14]. - The company exceeded all regulatory capital requirements under Basel III, with total capital to risk-weighted assets at 13.77% [18]. Wealth Management and Noninterest Income - Wealth management revenue totaled $7.4 million for Q1 2025, with assets under administration at $4.10 billion [12]. - Noninterest income for the quarter was $17.8 million, impacted by losses on limited partnership investments and credit enhancements [16][21].