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

    المصدر: Nasdaq GlobeNewswire / 24 أكتوبر 2024 15:47:09   America/Chicago

    Third Quarter 2024 Highlights:

    • Net income available to common shareholders of $16.2 million, or $0.74 per diluted share
    • Adjusted pre-tax, pre-provision earnings of $27.5 million
    • Tangible book value per share increased to $24.90, compared to $23.36 at June 30, 2024
    • Common equity tier 1 capital ratio improved to 9.00%, compared to 8.64% at June 30, 2024
    • Net interest margin of 3.10%, compared to 3.12% in prior quarter
    • Efficiency ratio of 62.8%, compared to 65.2% in prior quarter

    EFFINGHAM, Ill., Oct. 24, 2024 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (Nasdaq: MSBI) (the “Company”) today reported net income available to common shareholders of $16.2 million, or $0.74 per diluted share, for the third quarter of 2024, compared to $4.5 million, or $0.20 per diluted share, for the second quarter of 2024. This also compares to net income available to common shareholders of $9.2 million, or $0.41 per diluted share, for the third quarter of 2023.

    Provision expense was $5.0 million in the third quarter of 2024 compared to $16.8 million and $5.2 million in the second quarter of 2024 and the third quarter of 2023, respectively. The elevated provision expense in the second quarter of 2024 was primarily due to credit deterioration and servicing issues involving one of our fintech partners, LendingPoint, subsequent to their system conversion in late 2023.

    Jeffrey G. Ludwig, President and Chief Executive Officer of the Company, said, “We executed well in the third quarter and delivered a higher level of profitability while making continued progress on our balance sheet management strategies, which resulted in further increases in all of our capital ratios, an increase in our tangible book value per share, and an increase in our level of liquidity with a reduction in our loan-to-deposit ratio. We continue to utilize the payoffs resulting from the intentional reduction of our equipment finance and consumer portfolios to fund high quality loans generated in our community bank and the purchase of investment securities. We are also seeing good results from the investments we have made in the business, such as increasing our presence and business development efforts in the St. Louis market, where our loan balances increased at an annualized rate of 12% during the third quarter, and growth in our Wealth Management revenues due to an increase in assets under administration, partially driven by the new wealth advisors we have added in recent quarters.

    Improving our credit quality is a priority and we are taking proactive steps to resolve problem loans in order to reduce our level of non-performing and classified loans going forward. We continue to closely monitor the health of our borrowers and be conservative in downgrading loans where we see the potential for weakness. We also recently added a new Chief Credit Officer whose background and experience is consistent with our increased focus on in-market relationship lending in our community bank, which will continue to result in a higher quality, lower risk loan portfolio.

    “While we will remain conservative in new loan production while economic conditions remain uncertain, we are well positioned to benefit from lower interest rates and we expect positive trends in our net interest margin and revenue generated from our Wealth Management business. While maintaining disciplined expense control, we are continuing to make investments in talent and technology that will further enhance our ability to increase our market share, add attractive new client relationships in our community bank, and generate profitable growth. With the stronger balance sheet we are building, including a Total Capital Ratio of approximately 14%, we believe we are well positioned to support the continued growth of our franchise as economic conditions improve in the future and create additional value for our shareholders in the process,” said Mr. Ludwig.

    Balance Sheet Highlights

    Total assets were $7.75 billion at September 30, 2024, compared to $7.76 billion at June 30, 2024, and $7.97 billion at September 30, 2023. At September 30, 2024, portfolio loans were $5.75 billion, compared to $5.85 billion at June 30, 2024, and $6.28 billion at September 30, 2023.

    Loans

    During the third quarter of 2024, outstanding loans declined by $103.2 million, or 1.8%, from June 30, 2024, as the Company continued to shrink its equipment financing and consumer loan portfolios, and focus on commercial loan opportunities in our community banking regions.

    Equipment finance loan and lease balances decreased $30.0 million during the third quarter of 2024 as the Company continued to reduce its concentration of this product within the overall loan portfolio. Consumer loans decreased $82.8 million due to loan payoffs and a cessation in loans originated through GreenSky. Our Greensky-originated loan balances decreased $63.0 million during the third quarter to $475.3 million at September 30, 2024. In addition, as previously disclosed, during the fourth quarter of 2023, the Company ceased originating loans through LendingPoint. As of September 30, 2024, the Company had $96.5 million in loans that were originated through and serviced by LendingPoint. Equipment financing and consumer loans comprised 15.0% and 11.5%, respectively, of the loan portfolio at September 30, 2024, compared to 15.2% and 12.7%, respectively, at June 30, 2024.

    Increases in commercial FHA warehouse lines and commercial real estate loans of $50.2 million and $89.0 million, respectively, were offset by decreases in all other loan categories.

      As of
      September 30, June 30, March 31, December 31, September 30,
    (in thousands) 2024 2024 2024 2023 2023
    Loan Portfolio          
    Commercial loans $863,922 $939,458 $913,564 $951,387 $943,761
    Equipment finance loans  442,552  461,409  494,068  531,143  578,931
    Equipment finance leases  417,531  428,659  455,879  473,350  485,460
    Commercial FHA warehouse lines  50,198  —  8,035  —  48,547
    Total commercial loans and leases  1,774,203  1,829,526  1,871,546  1,955,880  2,056,699
    Commercial real estate  2,510,472  2,421,505  2,397,113  2,406,845  2,412,164
    Construction and land development  422,253  476,528  474,128  452,593  416,801
    Residential real estate  378,657  378,393  378,583  380,583  375,211
    Consumer  663,234  746,042  837,092  935,178  1,020,008
    Total loans $5,748,819 $5,851,994 $5,958,462 $6,131,079 $6,280,883


    Loan Quality

    Overall, credit quality metrics remained consistent this quarter compared to the second quarter of 2024, albeit, nonperforming loans were still at elevated levels. Non-performing loans increased $2.4 million to $114.6 million at September 30, 2024, compared to $112.1 million as of June 30, 2024. Substandard loans increased $32.0 million to $167.5 million at September 30, 2024, as compared to June 30, 2024, primarily due to two multi-family projects that were downgraded this past quarter.

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

    		 September 30, June 30, March 31, December 31, September 30,
      2024   2024   2024   2023   2023 
    Asset Quality          
    Loans 30-89 days past due $55,329  $54,045  $58,854  $82,778  $46,608 
    Nonperforming loans  114,556   112,124   104,979   56,351   55,981 
    Nonperforming assets  126,771   123,774   116,721   67,701   58,677 
    Substandard loans  167,549   135,555   149,049   184,224   143,793 
    Net charge-offs  11,379   2,874   4,445   5,117   3,449 
    Loans 30-89 days past due to total loans  0.96%  0.92%  0.99%  1.35%  0.74%
    Nonperforming loans to total loans  1.99%  1.92%  1.76%  0.92%  0.89%
    Nonperforming assets to total assets  1.64%  1.60%  1.49%  0.86%  0.74%
    Allowance for credit losses to total loans  1.49%  1.58%  1.31%  1.12%  1.06%
    Allowance for credit losses to nonperforming loans  74.90%  82.22%  74.35%  121.56%  119.09%
    Net charge-offs to average loans  0.78%  0.20%  0.30%  0.33%  0.22%


    The allowance for credit losses on loans totaled $85.8 million at September 30, 2024, compared to $92.2 million at June 30, 2024, and $66.7 million at September 30, 2023. The allowance as a percentage of total loans was 1.49% at September 30, 2024, compared to 1.58% at June 30, 2024, and 1.06% at September 30, 2023.

    Notably, the Company recognized provision expense of $14.0 million in the second quarter of 2024 related to the loans originated and serviced by LendingPoint, increasing the allowance to $14.6 million on this portfolio. Credit deterioration and servicing issues following their system conversion have resulted in increased losses within this portfolio. In the third quarter of 2024, loans totaling $6.2 million were charged off. At September 30, 2024, the Company had an allowance of $8.3 million on the $96.5 million of loans serviced by LendingPoint.

    Deposits

    Total deposits were $6.26 billion at September 30, 2024, compared with $6.12 billion at June 30, 2024. Noninterest-bearing deposits decreased $57.9 million to $1.05 billion at September 30, 2024, while interest-bearing deposits increased $196.7 million to $5.21 billion at September 30, 2024. Brokered time deposits increased $138.0 million to $269.4 million, and represented 4.31% of total deposits at September 30, 2024.

      As of
      September 30, June 30, March 31, December 31, September 30,
    (in thousands) 2024 2024 2024 2023 2023
    Deposit Portfolio          
    Noninterest-bearing demand $1,050,617 $1,108,521 $1,212,382 $1,145,395 $1,154,515
    Interest-bearing:          
    Checking  2,389,970  2,343,533  2,394,163  2,511,840  2,572,224
    Money market  1,187,139  1,143,668  1,128,463  1,135,629  1,090,962
    Savings  510,260  538,462  555,552  559,267  582,359
    Time  849,413  852,415  845,190  862,865  885,858
    Brokered time  269,437  131,424  188,234  94,533  119,084
    Total deposits $6,256,836 $6,118,023 $6,323,984 $6,309,529 $6,405,002


    Results of Operations Highlights

    Net Interest Income and Margin

    During the third quarter of 2024, net interest income and net interest margin, on a tax-equivalent basis, were $55.2 million and 3.10%, respectively, compared to $55.2 million and 3.12%, respectively, in the second quarter of 2024. Net interest income and net interest margin, on a tax-equivalent basis, were $58.8 million and 3.20%, respectively, in the third quarter of 2023.

    Average interest-earning assets for the third quarter of 2024 were $7.07 billion, compared to $7.13 billion for the second quarter of 2024. The yield on interest-earning assets increased 7 basis points to 5.91% compared to the second quarter of 2024. Interest-earning assets averaged $7.28 billion for the third quarter of 2023.

    Average loans were $5.78 billion for the third quarter of 2024, compared to $5.92 billion for the second quarter of 2024 and $6.30 billion for the third quarter of 2023. The yield on loans was 6.15% for the third quarter of 2024, up from 6.03% for the second quarter of 2024 and 5.93% for the third quarter of 2023.

    Investment securities averaged $1.16 billion for the third quarter of 2024, and yielded 4.71%, compared to an average balance and yield of $1.10 billion and 4.69%, respectively, for the second quarter of 2024. The Company purchased additional higher-yielding investments resulting in the increased average balance and yield. Investment securities averaged $863.0 million for the third quarter of 2023.

    Average interest-bearing liabilities for the third quarter of 2024 were $5.76 billion, compared to $5.78 billion for the second quarter of 2024. The cost of funds increased 9 basis points to 3.45% compared to the second quarter of 2024. Interest-bearing liabilities averaged $5.92 billion for the third quarter of 2023.

    Average interest-bearing deposits were $5.13 billion for the third quarter of 2024, compared to $5.10 billion for the second quarter of 2024, and $5.35 billion for the third quarter of 2023. Cost of interest-bearing deposits was 3.25% in the third quarter of 2024, which represented a 14 basis point increase from the second quarter of 2024, due to increased competition.

      For the Three Months Ended
    (dollars in thousands) September 30, 2024 June 30, 2024 September 30, 2023
    Interest-earning assets Average Balance Interest & Fees Yield/Rate Average Balance Interest & Fees Yield/Rate Average Balance Interest & Fees Yield/Rate
    Cash and cash equivalents $75,255 $1,031 5.45% $65,250 $875 5.40% $78,391 $1,036 5.24%
    Investment securities(1)  1,162,751  13,752 4.71   1,098,452  12,805 4.69   862,998  7,822 3.60 
    Loans(1)(2)  5,783,408  89,344 6.15   5,915,523  88,738 6.03   6,297,568  94,118 5.93 
    Loans held for sale  7,505  124 6.57   4,910  84 6.84   6,078  104 6.80 
    Nonmarketable equity securities  41,137  788 7.62   44,216  963 8.76   39,347  710 7.16 
    Total interest-earning assets  7,070,056  105,039 5.91   7,128,351  103,465 5.84   7,284,382  103,790 5.65 
    Noninterest-earning assets  653,279      669,370      622,969    
    Total assets $7,723,335     $7,797,721     $7,907,351    
                       
    Interest-Bearing Liabilities                  
    Interest-bearing deposits $5,132,640 $41,970 3.25% $5,101,365 $39,476 3.11% $5,354,356 $37,769 2.80%
    Short-term borrowings  53,577  602 4.47   30,449  308 4.07   20,127  14 0.28 
    FHLB advances & other borrowings  428,739  4,743 4.40   500,758  5,836 4.69   402,500  4,557 4.49 
    Subordinated debt  89,120  1,228 5.48   93,090  1,265 5.47   93,441  1,280 5.43 
    Trust preferred debentures  50,990  1,341 10.46   50,921  1,358 10.73   50,379  1,369 10.78 
    Total interest-bearing liabilities  5,755,066  49,884 3.45   5,776,583  48,243 3.36   5,920,803  44,989 3.01 
    Noninterest-bearing deposits  1,075,712      1,132,451      1,116,988    
    Other noninterest-bearing liabilities  97,235      104,841      97,935    
    Shareholders’ equity  795,322      783,846      771,625    
    Total liabilities and shareholder’s equity $7,723,335     $7,797,721     $7,907,351    
                       
    Net Interest Margin   $55,155 3.10%   $55,222 3.12%   $58,801 3.20%
                       
    Cost of Deposits     2.69%     2.55%     2.32%

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

    For the nine months ended September 30, 2024, net interest income, on a tax-equivalent basis, decreased to $166.5 million, with a tax-equivalent net interest margin of 3.13%, compared to net interest income, on a tax-equivalent basis, of $178.6 million, and a tax-equivalent net interest margin of 3.27% for the nine months ended September 30, 2023.

    The yield on earning assets increased 34 basis points to 5.84% for the nine months ended September 30, 2024 compared to the prior year. However, the cost of interest-bearing liabilities increased at a faster rate during this period, increasing 57 basis points to 3.34% for the nine months ended September 30, 2024.

      For the Nine Months Ended
    (dollars in thousands) September 30, 2024 September 30, 2023
    Interest-earning assets Average Balance Interest & Fees Yield/Rate Average Balance Interest & Fees Yield/Rate
    Cash and cash equivalents $69,960 $2,857 5.45% $76,939 $2,868 4.98%
    Investment securities(1)  1,083,597  37,265 4.59   844,946  21,103 3.33 
    Loans(1)(2)  5,903,216  267,570 6.05   6,324,578  274,005 5.79 
    Loans held for sale  5,281  263 6.65   3,900  179 6.14 
    Nonmarketable equity securities  40,429  2,438 8.06   44,034  2,104 6.39 
    Total interest-earning assets  7,102,483  310,393 5.84   7,294,397  300,259 5.50 
    Noninterest-earning assets  663,967      615,383    
    Total assets $7,766,450     $7,909,780    
                 
    Interest-Bearing Liabilities            
    Interest-bearing deposits $5,142,979 $120,660 3.13% $5,223,852 $97,791 2.50%
    Short-term borrowings  49,750  1,746 4.69   26,865  53 0.26 
    FHLB advances & other borrowings  414,259  13,615 4.39   471,084  15,959 4.53 
    Subordinated debt  91,921  3,773 5.48   96,820  3,985 5.49 
    Trust preferred debentures  50,873  4,088 10.73   50,216  3,887 10.35 
    Total interest-bearing liabilities  5,749,782  143,882 3.34   5,868,837  121,675 2.77 
    Noninterest-bearing deposits  1,119,764      1,184,410    
    Other noninterest-bearing liabilities  107,192      84,650    
    Shareholders’ equity  789,712      771,883    
    Total liabilities and shareholders’ equity $7,766,450     $7,909,780    
                 
    Net Interest Margin   $166,511 3.13%   $178,584 3.27%
                 
    Cost of Deposits     2.57%     2.04%

    (1) Interest income and average rates for tax-exempt loans and investment securities are presented on a tax-equivalent basis, assuming a federal income tax rate of 21%. Tax-equivalent adjustments totaled $0.6 million for each of the nine months ended September 30, 2024 and 2023, respectively.
    (2) Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.

    Noninterest Income

    Noninterest income was $19.3 million for the third quarter of 2024, compared to $17.7 million for the second quarter of 2024. Noninterest income for the second quarter of 2024 included a $0.2 million gain on the repurchase of subordinated debt, offset by $0.2 million of net losses on the sale of investment securities. The third quarter of 2023 included $5.0 million of losses on the sale of investment securities. Excluding these transactions, noninterest income for the third quarter of 2024, the second quarter of 2024, and the third quarter of 2023 was $19.3 million, $17.6 million, and $16.5 million, respectively.

      For the Three Months Ended For the Nine Months Ended
      September 30, June 30, September 30, September 30, September 30,
    (in thousands)  2024   2024   2023   2024   2023 
    Noninterest income          
    Wealth management revenue $7,104  $6,801  $6,288  $21,037  $18,968 
    Service charges on deposit accounts  3,411   3,121   3,149   9,648   8,744 
    Interchange revenue  3,506   3,563   3,609   10,427   10,717 
    Residential mortgage banking revenue  697   557   507   1,781   1,452 
    Income on company-owned life insurance  1,982   1,925   918   5,708   2,685 
    Loss on sales of investment securities, net  (44)  (152)  (4,961)  (196)  (6,478)
    Other income  2,683   1,841   2,035   9,777   9,989 
    Total noninterest income $19,339  $17,656  $11,545  $58,182  $46,077 


    Wealth management revenue totaled $7.1 million in the third quarter of 2024, an increase of $0.3 million, or 4.5%, as compared to the second quarter of 2024, due to increases in assets under administration and estate fees. Assets under administration increased to $4.27 billion at September 30, 2024 from $4.00 billion at June 30, 2024, primarily due to improved sales activity. Assets under administration totaled $3.50 billion at September 30, 2023.

    Income on company-owned life insurance income totaled $2.0 million, $1.9 million and $0.9 million for the third quarter of 2024, the second quarter of 2024, and the third quarter of 2023, respectively. The Company surrendered certain low-yielding life insurance policies and purchased additional policies in the third quarter of 2023, resulting in the increase in revenue.

    Other income totaled $2.7 million in the third quarter of 2024 compared to $1.8 million in the second quarter of 2024. Income from the sale of SBA loans in the third quarter of 2024 of $0.2 million and losses from the disposition of repossessed leased assets in the second quarter of 2024 of $0.6 million resulted in the quarter over quarter increase in other income.

    Noninterest Expense

    Noninterest expense was $46.7 million in the third quarter of 2024, compared to $47.5 million in the second quarter of 2024 and $42.0 million in the third quarter of 2023. Noninterest expense for the second quarter of 2024 included $4.1 million of aggregate expenses related to OREO impairment and property taxes, and accruals related to various legal proceedings. Excluding these items, noninterest expense for the third quarter of 2024, the second quarter of 2024, and the third quarter of 2023 was $46.7 million, $43.4 million, and $42.0 million, respectively. Costs related to increased staffing levels, upgrades to our ATM fleet, and loan collection and OREO expenses drove the increase in noninterest expense in the third quarter of 2024 compared to the prior quarter.

    The efficiency ratio improved to 62.76% for the quarter ended September 30, 2024, compared to 65.16% for the quarter ended June 30, 2024. The efficiency ratio for the third quarter of 2023 was 55.82%.

      For the Three Months Ended For the Nine Months Ended
      September 30, June 30, September 30, September 30, September 30,
    (in thousands) 2024 2024 2023 2024 2023
    Noninterest expense          
    Salaries and employee benefits $24,382 $22,872 $22,307 $71,356 $69,407
    Occupancy and equipment  4,393  3,964  3,730  12,499  12,052
    Data processing  6,955  7,205  6,468  20,882  19,323
    Professional services  1,744  2,243  1,554  6,242  4,977
    Amortization of intangible assets  951  1,016  1,129  3,056  3,628
    FDIC insurance  1,402  1,219  1,107  3,895  3,632
    Other expense  6,906  8,960  5,743  21,149  16,395
    Total noninterest expense $46,733 $47,479 $42,038 $139,079 $129,414


    Income Tax Expense

    Income tax expense was $4.1 million for the third quarter of 2024, compared to $1.7 million for the second quarter of 2024 and $11.5 million for the third quarter of 2023. The resulting effective tax rates were 18.1%, 19.9% and 50.3%, respectively. Tax expense for the third quarter of 2023 included a $1.4 million return to provision adjustment and $4.5 million associated with the surrender of company-owned life insurance policies, as previously discussed.

    Capital

    At September 30, 2024, Midland States Bank and the Company exceeded all regulatory capital requirements under Basel III, and Midland States Bank met the qualifications to be a ‘‘well-capitalized’’ financial institution, as summarized in the following table:

     As of September 30, 2024
     Midland States Bank Midland States Bancorp, Inc. Minimum Regulatory Requirements(2)
    Total capital to risk-weighted assets13.34% 13.98% 10.50%
    Tier 1 capital to risk-weighted assets12.09% 11.65% 8.50%
    Common equity Tier 1 capital to risk-weighted assets12.09% 9.00% 7.00%
    Tier 1 leverage ratio10.47% 10.10% 4.00%
    Tangible common equity to tangible assets(1)N/A 7.03% N/A

    (1) A non-GAAP financial measure. Refer to page 16 for a reconciliation to the comparable GAAP financial measure.
    (2) Includes the capital conservation buffer of 2.5%, as applicable.

    The impact of rising interest rates on the Company’s investment portfolio and cash flow hedges resulted in an accumulated other comprehensive loss of $60.6 million at September 30, 2024, which reduced tangible book value by $2.84 per share.

    Stock Repurchase Program

    As previously disclosed, on December 5, 2023, the Company’s board of directors authorized a new share repurchase program, pursuant to which the Company is authorized to repurchase up to $25.0 million of common stock through December 31, 2024. During the third quarter of 2024, the Company repurchased 23,113 shares of its common stock at a weighted average price of $22.54 under its stock repurchase program.

    About Midland States Bancorp, Inc.

    Midland States Bancorp, Inc. is a community-based financial holding company headquartered in Effingham, Illinois, and is the sole shareholder of Midland States Bank. As of September 30, 2024, the Company had total assets of approximately $7.75 billion, and its Wealth Management Group had assets under administration of approximately $4.27 billion. The Company provides a full range of commercial and consumer banking products and services and business equipment financing, merchant credit card services, trust and investment management, insurance and financial planning services. For additional information, visit https://www.midlandsb.com/ or https://www.linkedin.com/company/midland-states-bank.

    Non-GAAP Financial Measures

    Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with GAAP.

    These non-GAAP financial measures include “Adjusted Earnings,” “Adjusted Earnings Available to Common Shareholders,” “Adjusted Diluted Earnings Per Common Share,” “Adjusted Return on Average Assets,” “Adjusted Return on Average Shareholders’ Equity,” “Adjusted Return on Average Tangible Common Equity,” “Adjusted Pre-Tax, Pre-Provision Earnings,” “Adjusted Pre-Tax, Pre-Provision Return on Average Assets,” “Efficiency Ratio,” “Tangible Common Equity to Tangible Assets,” “Tangible Book Value Per Share,” “Tangible Book Value Per Share excluding Accumulated Other Comprehensive Income,” and “Return on Average Tangible Common Equity.” The Company believes these non-GAAP financial measures provide both management and investors a more complete understanding of the Company’s funding profile and profitability. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures. Not all companies use the same calculation of these measures; therefore, the measures in this press release may not be comparable to other similarly titled measures as presented by other companies.

    Forward-Looking Statements

    Readers should note that in addition to the historical information contained herein, this press release includes "forward-looking statements" within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including but not limited to statements about the Company’s plans, objectives, future performance, goals and future earnings levels. These statements are subject to many risks and uncertainties, including changes in interest rates and other general economic, business and political conditions, the impact of inflation, increased deposit volatility and potential regulatory developments; changes in the financial markets; changes in business plans as circumstances warrant; risks relating to acquisitions; changes to U.S. tax laws, regulations and guidance; and other risks detailed from time to time in filings made by the Company with the Securities and Exchange Commission. Readers should note that the forward-looking statements included in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "will," "propose," "may," "plan," "seek," "expect," "intend," "estimate," "anticipate," "believe," "continue," or similar terminology. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

    CONTACTS:
    Jeffrey G. Ludwig, President and CEO, at jludwig@midlandsb.com or (217) 342-7321
    Eric T. Lemke, Chief Financial Officer, at elemke@midlandsb.com or (217) 342-7321
    Douglas J. Tucker, SVP and Corporate Counsel, at dtucker@midlandsb.com or (217) 342-7321


    MIDLAND STATES BANCORP, INC.
    CONSOLIDATED FINANCIAL SUMMARY (unaudited)
               
      As of and for the Three Months Ended As of and
    for the Nine Months Ended
      September 30, June 30, September 30, September 30, September 30,
    (dollars in thousands, except per share data)  2024   2024   2023   2024   2023 
    Earnings Summary          
    Net interest income $54,950  $55,052  $58,596  $165,922  $177,940 
    Provision for credit losses  5,000   16,800   5,168   35,800   14,182 
    Noninterest income  19,339   17,656   11,545   58,182   46,077 
    Noninterest expense  46,733   47,479   42,038   139,079   129,414 
    Income before income taxes  22,556   8,429   22,935   49,225   80,421 
    Income taxes  4,080   1,679   11,533   10,114   25,672 
    Net income  18,476   6,750   11,402   39,111   54,749 
    Preferred dividends  2,229   2,228   2,229   6,685   6,685 
    Net income available to common shareholders $16,247  $4,522  $9,173  $32,426  $48,064 
               
    Diluted earnings per common share $0.74  $0.20  $0.41  $1.47  $2.14 
    Weighted average common shares outstanding - diluted  21,678,242   21,734,849   21,977,196   21,732,093   22,223,986 
    Return on average assets  0.95%  0.35%  0.57%  0.67%  0.93%
    Return on average shareholders' equity  9.24%  3.46%  5.86%  6.62%  9.48%
    Return on average tangible common equity(1)  12.69%  3.66%  7.56%  8.62%  13.37%
    Net interest margin  3.10%  3.12%  3.20%  3.13%  3.27%
    Efficiency ratio(1)  62.76%  65.16%  55.82%  61.91%  56.15%
               
    Adjusted Earnings Performance Summary(1)          
    Adjusted earnings available to common shareholders $16,223  $4,511  $17,278  $32,391  $56,783 
    Adjusted diluted earnings per common share $0.74  $0.20  $0.78  $1.47  $2.53 
    Adjusted return on average assets  0.95%  0.35%  0.98%  0.67%  1.07%
    Adjusted return on average shareholders' equity  9.23%  3.46%  10.03%  6.61%  10.99%
    Adjusted return on average tangible common equity  12.67%  3.65%  14.24%  8.61%  15.80%
    Adjusted pre-tax, pre-provision earnings $27,523  $25,214  $33,064  $84,977  $100,405 
    Adjusted pre-tax, pre-provision return on average assets  1.42%  1.30%  1.66%  1.46%  1.70%
               
    Market Data          
    Book value per share at period end $33.08  $31.59  $29.96     
    Tangible book value per share at period end(1) $24.90  $23.36  $21.67     
    Tangible book value per share excluding accumulated other comprehensive income at period end(1) $27.74  $27.22  $26.35     
    Market price at period end $22.38  $22.65  $20.54     
    Common shares outstanding at period end  21,393,905   21,377,215   21,594,546     
               
    Capital          
    Total capital to risk-weighted assets  13.98%  13.83%  12.76%    
    Tier 1 capital to risk-weighted assets  11.65%  11.23%  10.53%    
    Common equity tier 1capital to risk-weighted assets  9.00%  8.64%  8.07%    
    Tier 1 leverage ratio  10.10%  9.84%  9.59%    
    Tangible common equity to tangible assets(1)  7.03%  6.59%  6.01%    
               
    Wealth Management          
    Trust assets under administration $4,268,539  $3,996,175  $3,501,225     

    (1) Non-GAAP financial measures. Refer to pages 14 - 16 for a reconciliation to the comparable GAAP financial measures.

    MIDLAND STATES BANCORP, INC.
    CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
               
      As of
      September 30, June 30, March 31, December 31, September 30,
    (in thousands)  2024   2024   2024   2023   2023 
    Assets          
    Cash and cash equivalents $121,873  $124,646  $167,316  $135,061  $132,132 
    Investment securities  1,216,795   1,099,654   1,044,900   920,396   839,344 
    Loans  5,748,819   5,851,994   5,958,462   6,131,079   6,280,883 
    Allowance for credit losses on loans  (85,804)  (92,183)  (78,057)  (68,502)  (66,669)
    Total loans, net  5,663,015   5,759,811   5,880,405   6,062,577   6,214,214 
    Loans held for sale  8,001   5,555   5,043   3,811   6,089 
    Premises and equipment, net  84,672   83,040   81,831   82,814   82,741 
    Other real estate owned  8,646   8,304   8,920   9,112   480 
    Loan servicing rights, at lower of cost or fair value  18,400   18,902   19,577   20,253   20,933 
    Goodwill  161,904   161,904   161,904   161,904   161,904 
    Other intangible assets, net  13,052   14,003   15,019   16,108   17,238 
    Company-owned life insurance  209,193   207,211   205,286   203,485   201,750 
    Other assets  245,932   274,244   241,608   251,347   292,460 
    Total assets $7,751,483  $7,757,274  $7,831,809  $7,866,868  $7,969,285 
               
    Liabilities and Shareholders' Equity          
    Noninterest-bearing demand deposits $1,050,617  $1,108,521  $1,212,382  $1,145,395  $1,154,515 
    Interest-bearing deposits  5,206,219   5,009,502   5,111,602   5,164,134   5,250,487 
    Total deposits  6,256,836   6,118,023   6,323,984   6,309,529   6,405,002 
    Short-term borrowings  13,849   7,208   214,446   34,865   17,998 
    FHLB advances and other borrowings  425,000   600,000   255,000   476,000   538,000 
    Subordinated debt  82,744   91,656   93,617   93,546   93,475 
    Trust preferred debentures  51,058   50,921   50,790   50,616   50,457 
    Other liabilities  103,737   103,694   102,966   110,459   106,743 
    Total liabilities  6,933,224   6,971,502   7,040,803   7,075,015   7,211,675 
    Total shareholders’ equity  818,259   785,772   791,006   791,853   757,610 
    Total liabilities and shareholders’ equity $7,751,483  $7,757,274  $7,831,809  $7,866,868  $7,969,285 


    MIDLAND STATES BANCORP, INC.
    CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
               
      For the Three Months Ended For the Nine Months Ended
      September 30, June 30, September 30, September 30, September 30,
    (in thousands, except per share data)  2024   2024   2023   2024   2023 
    Net interest income:          
    Interest income $104,834  $103,295  $103,585  $309,804  $299,615 
    Interest expense  49,884   48,243   44,989   143,882   121,675 
    Net interest income  54,950   55,052   58,596   165,922   177,940 
    Provision for credit losses on loans  5,000   17,000   5,168   36,000   14,182 
    Provision for credit losses on unfunded commitments  —   (200)  —   (200)  — 
    Total provision for credit losses  5,000   16,800   5,168   35,800   14,182 
    Net interest income after provision for credit losses  49,950   38,252   53,428   130,122   163,758 
    Noninterest income:          
    Wealth management revenue  7,104   6,801   6,288   21,037   18,968 
    Service charges on deposit accounts  3,411   3,121   3,149   9,648   8,744 
    Interchange revenue  3,506   3,563   3,609   10,427   10,717 
    Residential mortgage banking revenue  697   557   507   1,781   1,452 
    Income on company-owned life insurance  1,982   1,925   918   5,708   2,685 
    Loss on sales of investment securities, net  (44)  (152)  (4,961)  (196)  (6,478)
    Other income  2,683   1,841   2,035   9,777   9,989 
    Total noninterest income  19,339   17,656   11,545   58,182   46,077 
    Noninterest expense:          
    Salaries and employee benefits  24,382   22,872   22,307   71,356   69,407 
    Occupancy and equipment  4,393   3,964   3,730   12,499   12,052 
    Data processing  6,955   7,205   6,468   20,882   19,323 
    Professional services  1,744   2,243   1,554   6,242   4,977 
    Amortization of intangible assets  951   1,016   1,129   3,056   3,628 
    FDIC insurance  1,402   1,219   1,107   3,895   3,632 
    Other expense  6,906   8,960   5,743   21,149   16,395 
    Total noninterest expense  46,733   47,479   42,038   139,079   129,414 
    Income before income taxes  22,556   8,429   22,935   49,225   80,421 
    Income taxes  4,080   1,679   11,533   10,114   25,672 
    Net income  18,476   6,750   11,402   39,111   54,749 
    Preferred stock dividends  2,229   2,228   2,229   6,685   6,685 
    Net income available to common shareholders $16,247  $4,522  $9,173  $32,426  $48,064 
               
    Basic earnings per common share $0.74  $0.20  $0.41  $1.47  $2.14 
    Diluted earnings per common share $0.74  $0.20  $0.41  $1.47  $2.14 


    MIDLAND STATES BANCORP, INC.
    RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited)
               
    Adjusted Earnings Reconciliation
               
      For the Three Months Ended For the Nine Months Ended
    (dollars in thousands, except per share data)  September 30,
    2024         		  June 30,
    2024         		  September 30,
    2023         		  September 30,
    2024         		  September 30,
    2023     
    Income before income taxes - GAAP $22,556  $8,429  $22,935  $49,225  $80,421 
    Adjustments to noninterest income:          
    Loss on sales of investment securities, net  44   152   4,961   196   6,478 
    (Gain) on repurchase of subordinated debt  (77)  (167)  —   (244)  (676)
    Total adjustments to noninterest income  (33)  (15)  4,961   (48)  5,802 
    Adjusted earnings pre tax - non-GAAP  22,523   8,414   27,896   49,177   86,223 
    Adjusted earnings tax  4,071   1,675   8,389   10,101   22,755 
    Adjusted earnings - non-GAAP  18,452   6,739   19,507   39,076   63,468 
    Preferred stock dividends  2,229   2,228   2,229   6,685   6,685 
    Adjusted earnings available to common shareholders $16,223  $4,511  $17,278  $32,391  $56,783 
    Adjusted diluted earnings per common share $0.74  $0.20  $0.78  $1.47  $2.53 
    Adjusted return on average assets  0.95%  0.35%  0.98%  0.67%  1.07%
    Adjusted return on average shareholders' equity  9.23%  3.46%  10.03%  6.61%  10.99%
    Adjusted return on average tangible common equity  12.67%  3.65%  14.24%  8.61%  15.80%
     
               
               
    Adjusted Pre-Tax, Pre-Provision Earnings Reconciliation
               
      For the Three Months Ended For the Nine Months Ended
      September 30, June 30, September 30, September 30, September 30,
    (dollars in thousands)  2024   2024   2023   2024   2023 
    Adjusted earnings pre tax - non-GAAP $22,523  $8,414  $27,896  $49,177  $86,223 
    Provision for credit losses  5,000   16,800   5,168   35,800   14,182 
    Adjusted pre-tax, pre-provision earnings - non-GAAP $27,523  $25,214  $33,064  $84,977  $100,405 
    Adjusted pre-tax, pre-provision return on average assets  1.42%  1.30%  1.66%  1.46%  1.70%


    MIDLAND STATES BANCORP, INC.
    RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued)
               
    Efficiency Ratio Reconciliation
               
      For the Three Months Ended For the Nine Months Ended
      September 30, June 30, September 30, September 30, September 30,
    (dollars in thousands)  2024   2024   2023   2024   2023 
    Noninterest expense - GAAP $46,733  $47,479  $42,038  $139,079  $129,414 
               
    Net interest income - GAAP $54,950  $55,052  $58,596  $165,922  $177,940 
    Effect of tax-exempt income  205   170   205   589   644 
    Adjusted net interest income  55,155   55,222   58,801   166,511   178,584 
               
    Noninterest income - GAAP  19,339   17,656   11,545   58,182   46,077 
    Loss on sales of investment securities, net  44   152   4,961   196   6,478 
    (Gain) on repurchase of subordinated debt  (77)  (167)  —   (244)  (676)
    Adjusted noninterest income  19,306   17,641   16,506   58,134   51,879 
               
    Adjusted total revenue $74,461  $72,863  $75,307  $224,645  $230,463 
               
    Efficiency ratio  62.76%  65.16%  55.82%  61.91%  56.15%
               
    Return on Average Tangible Common Equity (ROATCE)
               
      For the Three Months Ended For the Nine Months Ended
      September 30, June 30, September 30, September 30, September 30,
    (dollars in thousands)  2024   2024   2023   2024   2023 
    Net income available to common shareholders $16,247  $4,522  $9,173  $32,426  $48,064 
               
    Average total shareholders' equity—GAAP $795,322  $783,846  $771,625  $789,712  $771,883 
    Adjustments:          
    Preferred Stock  (110,548)  (110,548)  (110,548)  (110,548)  (110,548)
    Goodwill  (161,904)  (161,904)  (161,904)  (161,904)  (161,904)
    Other intangible assets, net  (13,506)  (14,483)  (17,782)  (14,501)  (18,959)
    Average tangible common equity $509,364  $496,911  $481,391  $502,759  $480,472 
    ROATCE  12.69%  3.66%  7.56%  8.62%  13.37%


    MIDLAND STATES BANCORP, INC.
    RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued)
               
    Tangible Common Equity to Tangible Assets Ratio and Tangible Book Value Per Share
               
      As of
    (dollars in thousands, except per share data)  September 30,
    2024         		  June 30,
    2024         		  March 31,
    2024         		  December 31,
    2023         		  September 30,
    2023     
    Shareholders' Equity to Tangible Common Equity        
    Total shareholders' equity—GAAP $818,259  $785,772  $791,006  $791,853  $757,610 
    Adjustments:          
    Preferred Stock  (110,548)  (110,548)  (110,548)  (110,548)  (110,548)
    Goodwill  (161,904)  (161,904)  (161,904)  (161,904)  (161,904)
    Other intangible assets, net  (13,052)  (14,003)  (15,019)  (16,108)  (17,238)
    Tangible common equity  532,755   499,317   503,535   503,293   467,920 
               
    Less: Accumulated other comprehensive loss (AOCI)  (60,640)  (82,581)  (81,419)  (76,753)  (101,181)
    Tangible common equity excluding AOCI $593,395  $581,898  $584,954  $580,046  $569,101 
               
    Total Assets to Tangible Assets:          
    Total assets—GAAP $7,751,483  $7,757,274  $7,831,809  $7,866,868  $7,969,285 
    Adjustments:          
    Goodwill  (161,904)  (161,904)  (161,904)  (161,904)  (161,904)
    Other intangible assets, net  (13,052)  (14,003)  (15,019)  (16,108)  (17,238)
    Tangible assets $7,576,527  $7,581,367  $7,654,886  $7,688,856  $7,790,143 
               
    Common Shares Outstanding  21,393,905   21,377,215   21,485,231   21,551,402   21,594,546 
               
    Tangible Common Equity to Tangible Assets  7.03%  6.59%  6.58%  6.55%  6.01%
    Tangible Book Value Per Share $24.90  $23.36  $23.44  $23.35  $21.67 
    Tangible Book Value Per Share, excluding AOCI $27.74  $27.22  $27.23  $26.91  $26.35 

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