MSBI Midland States Bancorp Inc

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 assets	13.34%		13.98%		10.50%
Tier 1 capital to risk-weighted assets	12.09%		11.65%		8.50%
Common equity Tier 1 capital to risk-weighted assets	12.09%		9.00%		7.00%
Tier 1 leverage ratio	10.47%		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) 342-7321Eric T. Lemke, Chief Financial Officer, at elemke@midlandsb.com or (217) 342-7321Douglas 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 andfor 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