Midland States Bancorp, Inc. Announces 2025 Third Quarter Results

Financial Performance - The company reported net income available to common shareholders of $5.3 million, or $0.24 per diluted share, for Q3 2025, a decrease from $9.8 million, or $0.44 per diluted share, in Q2 2025, and down from $18.2 million, or $0.83 per diluted share, in Q3 2024 [1][7][18] - Pre-provision net revenue was $31.3 million, or $1.43 per diluted share, compared to $32.2 million, or $1.48 per diluted share, in the previous quarter [7][18] - Noninterest income for Q3 2025 was $20.0 million, down from $23.5 million in Q2 2025, with a notable loss on credit enhancement income of $0.2 million compared to a gain of $3.8 million in the prior quarter [19] Credit Quality and Risk Management - The company recorded a provision for credit losses on loans of $20.5 million for Q3 2025, primarily due to increased loss given default assumptions in the equipment finance portfolio [8][19] - Nonperforming assets decreased to $70 million, or 1.02% of total assets, down from 2.10% at the end of 2024, indicating improved asset quality [4][7] - The company ceased originations in the equipment finance portfolio effective September 30, 2025, as part of its strategy to reduce exposure to higher-risk asset classes [4][8] Capital Position - The common equity tier 1 capital ratio improved to 9.4%, with a target of 10.0% [5][21] - The company redeemed $50.75 million in subordinated notes, utilizing existing liquidity [5][21] - Total capital to risk-weighted assets was reported at 14.29%, exceeding regulatory requirements [21] Revenue and Growth Trends - The net interest margin increased to 3.79%, up from 3.56% in the prior quarter, driven by a decline in the cost of funding [13][18] - Wealth management revenue reached a record $8 million in Q3 2025, contributing positively to overall revenue trends [6][11] - Total loans decreased to $4.87 billion, a reduction of $167.7 million from the previous quarter, with a focus on reducing specialty finance and equipment finance portfolios [11][18] Operational Efficiency - The efficiency ratio was reported at 61.25%, slightly higher than 60.60% in the previous quarter [18] - Noninterest expense was $49.8 million for Q3 2025, including $1.0 million in severance expenses related to the cessation of equipment finance originations [19]