Midland States Bancorp, Inc. Announces 2024 Second Quarter Results

Second Quarter 2024 Highlights:

Net income available to common shareholders of $4.5 million, or $0.20 per diluted share
Adjusted pre-tax, pre-provision earnings of $25.2 million
Tangible book value per share decreased to $23.36, compared to $23.44 at March 31, 2024
Common equity tier 1 capital ratio improved to 8.63% from 8.60%
Net interest margin of 3.12%, compared to 3.18% in prior quarter
Efficiency ratio of 65.2%, compared to 58.0% in prior quarter

EFFINGHAM, Ill., July 25, 2024 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (Nasdaq: MSBI) (the “Company”) today reported net income available to common shareholders of $4.5 million, or $0.20 per diluted share, for the second quarter of 2024, compared to $11.7 million, or $0.53 per diluted share, for the first quarter of 2024. This also compares to net income available to common shareholders of $19.3 million, or $0.86 per diluted share, for the second quarter of 2023.

Provision expense was $16.8 million in the second quarter of 2024 compared to $14.0 million and $5.9 million in the first quarter of 2024 and the second quarter of 2023, respectively. The provision expense in the second quarter of 2024 included provision for credit losses on loans of $17.0 million, offset by a $0.2 million benefit related to unfunded commitments. The elevated loan provision 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. The provision expense for the first quarter of 2024 included a specific reserve of $8.0 million on a multi-family construction project.

Jeffrey G. Ludwig, President and Chief Executive Officer of the Company, said, “We continued to execute well on our strategic priorities during the second quarter and our balance sheet management strategies resulted in further increases in our capital ratios. We are continuing to address credit risk in our loan portfolios, including the relationship with Lending Point, by prudently increasing our loan loss reserves with a focus on reducing problem assets. Our emphasis on our community bank and local markets has led to another good quarter of generating high quality, in-market loans with full banking relationships, which are partially funded by the continued intentional reduction of our equipment finance and consumer portfolios. In particular, we are seeing good results from the investments we have made to increase our presence and business development efforts in the St. Louis market, where our loan balances increased at an annualized rate of 31% during the second quarter.

“We continue to benefit from the strength of the franchise we have built to attract high quality banking talent across the organization. We recently added a new market president for our Northern Illinois region and a new Chief Deposit Officer, who we expect to positively impact our treasury management services and our ability to add new commercial deposit relationships. We are also continuing to invest in our Wealth Management business to improve our ability to cross-sell this service to our community bank clients. We believe the banking talent we are adding will further enhance our efforts to expand our market share within our community bank. Our successful efforts in this area are resulting in a favorable shift in the mix of our loan portfolio; moving towards a higher quality portfolio and expanded banking relationships with both loans and deposits. We expect to make continued progress on this strategic priority over the remainder of the year, which we believe will further enhance the value of our franchise,” said Mr. Ludwig.

Balance Sheet Highlights

Total assets were $7.76 billion at June 30, 2024, compared to $7.83 billion at March 31, 2024, and $8.03 billion at June 30, 2023. At June 30, 2024, portfolio loans were $5.85 billion, compared to $5.96 billion at March 31, 2024, and $6.37 billion at June 30, 2023.

Loans

During the second quarter of 2024, outstanding loans declined by $106.5 million, or 1.8%, from March 31, 2024, as the Company continued to shrink its equipment financing and consumer loan portfolios, and focus on commercial loan opportunities in our community bank footprint. Increases in commercial, commercial real estate, and construction and land development loans of $25.9 million, $24.4 million and $2.4 million, respectively, were offset by decreases in all other loan categories.

Equipment finance loan and lease balances decreased $59.9 million during the second quarter of 2024 as the Company continued to reduce its concentration of this product within the overall loan portfolio. Consumer loans decreased $91.1 million due to loan payoffs and a cessation in loans originated through GreenSky. Our Greensky-originated loan balances decreased $67.7 million during the second quarter to $538.3 million at June 30, 2024. In addition, as previously disclosed, during the fourth quarter of 2023, the Company ceased originating loans through LendingPoint. As of June 30, 2024, the Company had $114.2 million in loans that were originated through and serviced by LendingPoint. Equipment financing and consumer loans comprised 15.2% and 12.7%, respectively, of the loan portfolio at June 30, 2024, compared to 15.9% and 14.0%, respectively, at March 31, 2024.

	As of
	June 30,		March 31,		December 31,		September 30,		June 30,
(in thousands)	2024		2024		2023		2023		2023
Loan Portfolio
Commercial loans	$	939,458	$	913,564	$	951,387	$	943,761	$	962,756
Equipment finance loans		461,409		494,068		531,143		578,931		614,633
Equipment finance leases		428,659		455,879		473,350		485,460		500,485
Commercial FHA warehouse lines		—		8,035		—		48,547		30,522
Total commercial loans and leases		1,829,526		1,871,546		1,955,880		2,056,699		2,108,396
Commercial real estate		2,421,505		2,397,113		2,406,845		2,412,164		2,443,995
Construction and land development		476,528		474,128		452,593		416,801		366,631
Residential real estate		378,393		378,583		380,583		375,211		371,486
Consumer		746,042		837,092		935,178		1,020,008		1,076,836
Total loans	$	5,851,994	$	5,958,462	$	6,131,079	$	6,280,883	$	6,367,344

Loan Quality

Overall, credit quality metrics declined this quarter compared to the first quarter of 2024. Non-performing loans increased $7.1 million to $112.1 million at June 30, 2024, compared to $105.0 million as of March 31, 2024. A $3.6 million commercial loan and $4.7 million of equipment financing loans account for the increase.

	As of and for the Three Months Ended
(in thousands)	June 30,			March 31,			December 31,			September 30,			June 30,
(in thousands)		2024			2024			2023			2023			2023
Asset Quality
Loans 30-89 days past due	$	54,045		$	58,854		$	82,778		$	46,608		$	44,161
Nonperforming loans		112,124			104,979			56,351			55,981			54,844
Nonperforming assets		123,774			116,721			67,701			58,677			57,688
Substandard loans		135,555			149,049			184,224			143,793			130,707
Net charge-offs		2,874			4,445			5,117			3,449			2,996
Loans 30-89 days past due to total loans		0.92	%		0.99	%		1.35	%		0.74	%		0.69	%
Nonperforming loans to total loans		1.92	%		1.76	%		0.92	%		0.89	%		0.86	%
Nonperforming assets to total assets		1.60	%		1.49	%		0.86	%		0.74	%		0.72	%
Allowance for credit losses to total loans		1.58	%		1.31	%		1.12	%		1.06	%		1.02	%
Allowance for credit losses to nonperforming loans		82.22	%		74.35	%		121.56	%		119.09	%		118.43	%
Net charge-offs to average loans		0.20	%		0.30	%		0.33	%		0.22	%		0.19	%

The Company continued to increase its allowance for credit losses on loans during the second quarter of 2024. Notably, the Company recognized provision expense of $14.0 million this quarter 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. At June 30, 2024, loans serviced by LendingPoint totaled $114.2 million.

The allowance for credit losses on loans totaled $92.2 million at June 30, 2024, compared to $78.1 million at March 31, 2024, and $65.0 million at June 30, 2023. The allowance as a percentage of portfolio loans was 1.58% at June 30, 2024, compared to 1.31% at March 31, 2024, and 1.02% at June 30, 2023.

Deposits

Total deposits were $6.12 billion at June 30, 2024, compared with $6.32 billion at March 31, 2024. Noninterest-bearing deposits decreased $103.9 million to $1.11 billion at June 30, 2024, while interest-bearing deposits decreased $102.1 million to $5.01 billion at June 30, 2024. Brokered time deposits decreased $56.8 million to $131.4 million, and represented 2.15% of total deposits at June 30, 2024.

	As of
	June 30,		March 31,		December 31,		September 30,		June 30,
(in thousands)	2024		2024		2023		2023		2023
Deposit Portfolio
Noninterest-bearing demand	$	1,108,521	$	1,212,382	$	1,145,395	$	1,154,515	$	1,162,909
Interest-bearing:
Checking		2,343,533		2,394,163		2,511,840		2,572,224		2,499,693
Money market		1,143,668		1,128,463		1,135,629		1,090,962		1,226,470
Savings		538,462		555,552		559,267		582,359		624,005
Time		852,415		845,190		862,865		885,858		840,734
Brokered time		131,424		188,234		94,533		119,084		72,737
Total deposits	$	6,118,023	$	6,323,984	$	6,309,529	$	6,405,002	$	6,426,548

Results of Operations Highlights

Net Interest Income and Margin

During the second quarter of 2024, net interest income, on a tax-equivalent basis, totaled $55.2 million, a decrease of $0.9 million, or 1.6%, compared to $56.1 million for the first quarter of 2024. The tax-equivalent net interest margin for the second quarter of 2024 was 3.12%, compared with 3.18% in the first quarter of 2024. Net interest income and net interest margin, on a tax-equivalent basis, were $59.0 million and 3.23%, respectively, in the second quarter of 2023. The decline in both the net interest income and margin were largely attributable to increased market interest rates resulting in a faster increase in the cost of funding liabilities than the yield on earning assets, as well as the impact of interest reversals on loans placed on non-accrual.

Average interest-earning assets for the second quarter of 2024 were $7.13 billion, compared to $7.11 billion for the first quarter of 2024. The yield increased 8 basis points to 5.84% compared to the first quarter of 2024. Interest-earning assets averaged $7.33 billion for the second quarter of 2023.

Average loans were $5.92 billion for the second quarter of 2024, compared to $6.01 billion for the first quarter of 2024 and $6.36 billion for the second quarter of 2023. The yield on loans was 6.03% for the second quarter of 2024, up from 5.99% for the first quarter of 2024 and 5.80% for the second quarter of 2023.

Investment securities averaged $1.10 billion for the second quarter of 2024, and yielded 4.69%, compared to an average balance and yield of $988.7 million and 4.36%, respectively, for the first quarter of 2024. The Company purchased additional higher-yielding investments resulting in the increased average balance and yield. Investment securities averaged $861.4 million for the second quarter of 2023.

Average interest-bearing deposits were $5.10 billion for the second quarter of 2024, compared to $5.20 billion for the first quarter of 2024, and $5.26 billion for the second quarter of 2023. Cost of interest-bearing deposits was 3.11% in the second quarter of 2024, which represented a 7 basis point increase from the first quarter of 2024. A competitive market, driven by rising interest rates and increased competition, contributed to the increase in deposit costs.

	For the Three Months Ended
(dollars in thousands)	June 30, 2024						March 31, 2024						June 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	$	65,250	$	875	5.40	%	$	69,316	$	951	5.52	%	$	67,377	$	852	5.07	%
Investment securities⁽¹⁾		1,098,452		12,805	4.69			988,716		10,708	4.36			861,409		7,286	3.39
Loans⁽¹⁾⁽²⁾		5,915,523		88,738	6.03			6,012,032		89,489	5.99			6,356,012		91,890	5.80
Loans held for sale		4,910		84	6.84			3,405		55	6.56			4,067		59	5.79
Nonmarketable equity securities		44,216		963	8.76			35,927		687	7.69			45,028		599	5.33
Total interest-earning assets		7,128,351		103,465	5.84			7,109,396		101,890	5.76			7,333,893		100,686	5.51
Noninterest-earning assets		669,370						671,671						612,238
Total assets	$	7,797,721					$	7,781,067					$	7,946,131

Interest-Bearing Liabilities
Interest-bearing deposits	$	5,101,365	$	39,476	3.11	%	$	5,195,118	$	39,214	3.04	%	$	5,259,188	$	33,617	2.56	%
Short-term borrowings		30,449		308	4.07			65,182		836	5.16			22,018		14	0.26
FHLB advances & other borrowings		500,758		5,836	4.69			313,121		3,036	3.90			471,989		5,396	4.59
Subordinated debt		93,090		1,265	5.47			93,583		1,280	5.50			97,278		1,335	5.51
Trust preferred debentures		50,921		1,358	10.73			50,707		1,389	11.02			50,218		1,289	10.29
Total interest-bearing liabilities		5,776,583		48,243	3.36			5,717,711		45,755	3.22			5,900,691		41,651	2.83
Noninterest-bearing deposits		1,132,451						1,151,542						1,187,584
Other noninterest-bearing liabilities		104,841						121,908						81,065
Shareholders’ equity		783,846						789,906						776,791
Total liabilities and shareholder’s equity	$	7,797,721					$	7,781,067					$	7,946,131

Net Interest Margin			$	55,222	3.12	%			$	56,135	3.18	%			$	59,035	3.23	%

Cost of Deposits					2.55	%					2.49	%					2.09	%

(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 June 30, 2024, March 31, 2024 and June 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 six months ended June 30, 2024, net interest income, on a tax-equivalent basis, decreased to $111.4 million, with a tax-equivalent net interest margin of 3.15%, compared to net interest income, on a tax-equivalent basis, of $119.8 million, and a tax-equivalent net interest margin of 3.31% for the six months ended June 30, 2023.

The yield on earning assets increased 37 basis points to 5.80% for the six months ended June 30, 2024 compared to the prior year. However, the cost of interest-bearing liabilities increased at a faster rate during this period, increasing 64 basis points to 3.29% for the six months ended June 30, 2024.

	For the Six Months Ended
(dollars in thousands)	June 30, 2024						June 30, 2023
Interest-earning assets	Average Balance		Interest & Fees		Yield/Rate		Average Balance		Interest & Fees		Yield/Rate
Cash and cash equivalents	$	67,283	$	1,826	5.46	%	$	76,201	$	1,832	4.85	%
Investment securities⁽¹⁾		1,043,585		23,513	4.53			835,771		13,281	3.18
Loans⁽¹⁾⁽²⁾		5,963,777		178,226	6.01			6,338,305		179,887	5.72
Loans held for sale		4,157		139	6.72			2,794		75	5.42
Nonmarketable equity securities		40,072		1,650	8.28			46,416		1,394	6.05
Total interest-earning assets		7,118,874		205,354	5.80			7,299,487		196,469	5.43
Noninterest-earning assets		669,370						611,528
Total assets	$	7,788,244					$	7,911,015

Interest-Bearing Liabilities
Interest-bearing deposits	$	5,148,242	$	78,690	3.07	%	$	5,157,148	$	60,022	2.35	%
Short-term borrowings		47,815		1,144	4.81			30,291		39	0.26
FHLB advances & other borrowings		406,940		8,872	4.38			505,945		11,402	4.54
Subordinated debt		93,337		2,545	5.45			98,538		2,705	5.54
Trust preferred debentures		50,814		2,747	10.87			50,133		2,518	10.13
Total interest-bearing liabilities		5,747,148		93,998	3.29			5,842,055		76,686	2.65
Noninterest-bearing deposits		1,141,996						1,219,050
Other noninterest-bearing liabilities		112,223						77,895
Shareholders’ equity		786,877						772,015
Total liabilities and shareholders’ equity	$	7,788,244					$	7,911,015

Net Interest Margin			$	111,356	3.15	%			$	119,783	3.31	%

Cost of Deposits					2.52	%					1.90	%

(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 $0.4 million for each of the six months ended June 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 $17.7 million for the second quarter of 2024, compared to $21.2 million for the first 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. Noninterest income for the first quarter of 2024 included incremental servicing revenues of $3.7 million related to the Greensky portfolio. The second quarter of 2023 included an $0.8 million gain on the sale of OREO and a $0.7 million gain on the repurchase of subordinated debt, partially offset by $0.9 million of net losses on the sale of investment securities. Excluding these transactions, noninterest income for the second quarter of 2024, the first quarter of 2024, and the second quarter of 2023 was $17.6 million, $17.5 million, and $18.1 million, respectively.

	For the Three Months Ended								For the Six Months Ended
	June 30,			March 31,		June 30,			June 30,			June 30,
(in thousands)		2024			2024		2023			2024			2023
Noninterest income
Wealth management revenue	$	6,801		$	7,132	$	6,269		$	13,933		$	12,680
Service charges on deposit accounts		3,121			3,116		2,677			6,237			5,245
Interchange revenue		3,563			3,358		3,696			6,921			7,108
Residential mortgage banking revenue		557			527		540			1,084			945
Income on company-owned life insurance		1,925			1,801		891			3,726			1,767
Loss on sales of investment securities, net		(152	)		—		(869	)		(152	)		(1,517	)
Other income		1,841			5,253		5,549			7,094			8,304
Total noninterest income	$	17,656		$	21,187	$	18,753		$	38,843		$	34,532

Wealth management revenue totaled $6.8 million in the second quarter of 2024, a decrease of $0.3 million, or 4.6%, as compared to the first quarter of 2024, due to the seasonal impact of tax planning fees in the first quarter. Assets under administration increased to $4.00 billion at June 30, 2024 from $3.89 billion at March 31, 2024, primarily due to improved sales activity. Assets under administration totaled $3.59 billion at June 30, 2023.

Noninterest Expense

Noninterest expense was $47.5 million in the second quarter of 2024, compared to $44.9 million in the first quarter of 2024 and $42.9 million in the second 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 actions. Excluding these transactions, noninterest expense for the second quarter of 2024, the first quarter of 2024, and the second quarter of 2023 was $43.4 million, $44.9 million, and $42.9 million, respectively. The efficiency ratio increased to 65.16% for the quarter ended June 30, 2024, compared to 58.03% for the quarter ended March 31, 2024, and 55.01% for the quarter ended June 30, 2023.

	For the Three Months Ended						For the Six Months Ended
	June 30,		March 31,		June 30,		June 30,		June 30,
(in thousands)	2024		2024		2023		2024		2023
Noninterest expense
Salaries and employee benefits	$	22,872	$	24,102	$	22,857	$	46,974	$	47,100
Occupancy and equipment		3,964		4,142		3,879		8,106		8,322
Data processing		7,205		6,722		6,544		13,927		12,855
Professional services		2,243		2,255		1,663		4,498		3,423
Amortization of intangible assets		1,016		1,089		1,208		2,105		2,499
FDIC insurance		1,219		1,274		1,196		2,493		2,525
Other expense		8,960		5,283		5,547		14,243		10,652
Total noninterest expense	$	47,479	$	44,867	$	42,894	$	92,346	$	87,376

Income Tax Expense

Income tax expense was $1.7 million for the second quarter of 2024, compared to $4.4 million for the first quarter of 2024 and $7.2 million for the second quarter of 2023. The resulting effective tax rates were 19.9%, 23.9% and 25.1%, respectively.

Capital

At June 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 June 30, 2024
	Midland States Bank		Midland States Bancorp, Inc.		Minimum Regulatory Requirements ⁽²⁾
Total capital to risk-weighted assets	13.06	%	13.94	%	10.50	%
Tier 1 capital to risk-weighted assets	11.69	%	11.21	%	8.50	%
Tier 1 leverage ratio	10.26	%	9.84	%	4.00	%
Common equity Tier 1 capital	11.69	%	8.63	%	7.00	%
Tangible common equity to tangible assets ⁽¹⁾	N/A		6.59	%	N/A

(1) A non-GAAP financial measure. Refer to page 15 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 $82.6 million accumulated other comprehensive loss at June 30, 2024, which reduced tangible book value by $3.86 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 second quarter of 2024, the Company repurchased 131,372 shares of its common stock at a weighted average price of $22.84 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 June 30, 2024, the Company had total assets of approximately $7.76 billion, and its Wealth Management Group had assets under administration of approximately $4.00 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 Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,
(dollars in thousands, except per share data)		2024			2024			2023			2024			2023
Earnings Summary
Net interest income	$	55,052		$	55,920		$	58,840		$	110,972		$	119,344
Provision for credit losses		16,800			14,000			5,879			30,800			9,014
Noninterest income		17,656			21,187			18,753			38,843			34,532
Noninterest expense		47,479			44,867			42,894			92,346			87,376
Income before income taxes		8,429			18,240			28,820			26,669			57,486
Income taxes		1,679			4,355			7,245			6,034			14,139
Net income		6,750			13,885			21,575			20,635			43,347
Preferred dividends		2,228			2,228			2,228			4,456			4,456
Net income available to common shareholders	$	4,522		$	11,657		$	19,347		$	16,179		$	38,891

Diluted earnings per common share	$	0.20		$	0.53		$	0.86		$	0.73		$	1.72
Weighted average common shares outstanding - diluted		21,734,849			21,787,691			22,205,079			21,761,492			22,348,981
Return on average assets		0.35	%		0.72	%		1.09	%		0.53	%		1.10	%
Return on average shareholders' equity		3.46	%		7.07	%		11.14	%		5.27	%		11.32	%
Return on average tangible common equity ⁽¹⁾		3.66	%		9.34	%		15.99	%		6.51	%		16.34	%
Net interest margin		3.12	%		3.18	%		3.23	%		3.15	%		3.31	%
Efficiency ratio⁽¹⁾		65.16	%		58.03	%		55.01	%		61.49	%		56.31	%

Adjusted Earnings Performance Summary ⁽¹⁾
Adjusted earnings available to common shareholders	$	4,511		$	11,657		$	19,488		$	16,168		$	39,505
Adjusted diluted earnings per common share	$	0.20		$	0.53		$	0.87		$	0.73		$	1.75
Adjusted return on average assets		0.35	%		0.72	%		1.10	%		0.53	%		1.12	%
Adjusted return on average shareholders' equity		3.46	%		7.07	%		11.21	%		5.27	%		11.48	%
Adjusted return on average tangible common equity		3.65	%		9.34	%		16.10	%		6.51	%		16.60	%
Adjusted pre-tax, pre-provision earnings	$	25,214		$	32,240		$	34,892		$	57,454		$	67,341
Adjusted pre-tax, pre-provision return on average assets		1.30	%		1.67	%		1.76	%		1.48	%		1.72	%

Market Data
Book value per share at period end	$	31.59		$	31.67		$	30.49
Tangible book value per share at period end⁽¹⁾	$	23.36		$	23.44		$	22.24
Tangible book value per share excluding accumulated other comprehensive income at period end⁽¹⁾	$	27.22		$	27.23		$	26.11
Market price at period end	$	22.65		$	25.13		$	19.91
Common shares outstanding at period end		21,377,215			21,485,231			21,854,800

Capital
Total capital to risk-weighted assets		13.94	%		13.68	%		12.65	%
Tier 1 capital to risk-weighted assets		11.21	%		11.16	%		10.47	%
Tier 1 common capital to risk-weighted assets		8.63	%		8.60	%		8.03	%
Tier 1 leverage ratio		9.84	%		9.92	%		9.57	%
Tangible common equity to tangible assets⁽¹⁾		6.59	%		6.58	%		6.19	%

Wealth Management
Trust assets under administration	$	3,996,175		$	3,888,219		$	3,594,727

(1) Non-GAAP financial measures. Refer to pages 13 - 15 for a reconciliation to the comparable GAAP financial measures.

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)

	As of
	June 30,			March 31,			December 31,			September 30,			June 30,
(in thousands)		2024			2024			2023			2023			2023
Assets
Cash and cash equivalents	$	124,646		$	167,316		$	135,061		$	132,132		$	160,695
Investment securities		1,099,654			1,044,900			920,396			839,344			887,003
Loans		5,851,994			5,958,462			6,131,079			6,280,883			6,367,344
Allowance for credit losses on loans		(92,183	)		(78,057	)		(68,502	)		(66,669	)		(64,950	)
Total loans, net		5,759,811			5,880,405			6,062,577			6,214,214			6,302,394
Loans held for sale		5,555			5,043			3,811			6,089			5,632
Premises and equipment, net		83,040			81,831			82,814			82,741			81,006
Other real estate owned		8,304			8,920			9,112			480			202
Loan servicing rights, at lower of cost or fair value		18,902			19,577			20,253			20,933			21,611
Goodwill		161,904			161,904			161,904			161,904			161,904
Other intangible assets, net		14,003			15,019			16,108			17,238			18,367
Company-owned life insurance		207,211			205,286			203,485			201,750			152,210
Other assets		274,244			241,608			251,347			292,460			243,697
Total assets	$	7,757,274		$	7,831,809		$	7,866,868		$	7,969,285		$	8,034,721

Liabilities and Shareholders' Equity
Noninterest-bearing demand deposits	$	1,108,521		$	1,212,382		$	1,145,395		$	1,154,515		$	1,162,909
Interest-bearing deposits		5,009,502			5,111,602			5,164,134			5,250,487			5,263,639
Total deposits		6,118,023			6,323,984			6,309,529			6,405,002			6,426,548
Short-term borrowings		7,208			214,446			34,865			17,998			21,783
FHLB advances and other borrowings		600,000			255,000			476,000			538,000			575,000
Subordinated debt		91,656			93,617			93,546			93,475			93,404
Trust preferred debentures		50,921			50,790			50,616			50,457			50,296
Other liabilities		103,694			102,966			110,459			106,743			90,869
Total liabilities		6,971,502			7,040,803			7,075,015			7,211,675			7,257,900
Total shareholders’ equity		785,772			791,006			791,853			757,610			776,821
Total liabilities and shareholders’ equity	$	7,757,274		$	7,831,809		$	7,866,868		$	7,969,285		$	8,034,721

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)

	For the Three Months Ended								For the Six Months Ended
	June 30,			March 31,		June 30,			June 30,			June 30,
(in thousands, except per share data)	2024			2024		2023			2024			2023
Net interest income:
Interest income	$	103,295		$	101,675	$	100,491		$	204,970		$	196,030
Interest expense		48,243			45,755		41,651			93,998			76,686
Net interest income		55,052			55,920		58,840			110,972			119,344
Provision for credit losses on loans		17,000			14,000		5,879			31,000			9,014
Provision for credit losses on unfunded commitments		(200	)		—		—			(200	)		—
Total provision for credit losses		16,800			14,000		5,879			30,800			9,014
Net interest income after provision for credit losses		38,252			41,920		52,961			80,172			110,330
Noninterest income:
Wealth management revenue		6,801			7,132		6,269			13,933			12,680
Service charges on deposit accounts		3,121			3,116		2,677			6,237			5,245
Interchange revenue		3,563			3,358		3,696			6,921			7,108
Residential mortgage banking revenue		557			527		540			1,084			945
Income on company-owned life insurance		1,925			1,801		891			3,726			1,767
Loss on sales of investment securities, net		(152	)		—		(869	)		(152	)		(1,517	)
Other income		1,841			5,253		5,549			7,094			8,304
Total noninterest income		17,656			21,187		18,753			38,843			34,532
Noninterest expense:
Salaries and employee benefits		22,872			24,102		22,857			46,974			47,100
Occupancy and equipment		3,964			4,142		3,879			8,106			8,322
Data processing		7,205			6,722		6,544			13,927			12,855
Professional services		2,243			2,255		1,663			4,498			3,423
Amortization of intangible assets		1,016			1,089		1,208			2,105			2,499
FDIC insurance		1,219			1,274		1,196			2,493			2,525
Other expense		8,960			5,283		5,547			14,243			10,652
Total noninterest expense		47,479			44,867		42,894			92,346			87,376
Income before income taxes		8,429			18,240		28,820			26,669			57,486
Income taxes		1,679			4,355		7,245			6,034			14,139
Net income		6,750			13,885		21,575			20,635			43,347
Preferred stock dividends		2,228			2,228		2,228			4,456			4,456
Net income available to common shareholders	$	4,522		$	11,657	$	19,347		$	16,179		$	38,891

Basic earnings per common share	$	0.20		$	0.53	$	0.86		$	0.73		$	1.72
Diluted earnings per common share	$	0.20		$	0.53	$	0.86		$	0.73		$	1.72

MIDLAND STATES BANCORP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited)

Adjusted Earnings Reconciliation

	For the Three Months Ended									For the Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,
(dollars in thousands, except per share data)		2024			2024			2023			2024			2023
Income before income taxes - GAAP	$	8,429		$	18,240		$	28,820		$	26,669		$	57,486
Adjustments to noninterest income:
Loss on sales of investment securities, net		152			—			869			152			1,517
(Gain) on repurchase of subordinated debt		(167	)		—			(676	)		(167	)		(676	)
Total adjustments to noninterest income		(15	)		—			193			(15	)		841
Adjusted earnings pre tax - non-GAAP		8,414			18,240			29,013			26,654			58,327
Adjusted earnings tax		1,675			4,355			7,297			6,030			14,366
Adjusted earnings - non-GAAP		6,739			13,885			21,716			20,624			43,961
Preferred stock dividends		2,228			2,228			2,228			4,456			4,456
Adjusted earnings available to common shareholders	$	4,511		$	11,657		$	19,488		$	16,168		$	39,505
Adjusted diluted earnings per common share	$	0.20		$	0.53		$	0.87		$	0.73		$	1.75
Adjusted return on average assets		0.35	%		0.72	%		1.10	%		0.53	%		1.12	%
Adjusted return on average shareholders' equity		3.46	%		7.07	%		11.21	%		5.27	%		11.48	%
Adjusted return on average tangible common equity		3.65	%		9.34	%		16.10	%		6.51	%		16.60	%



Adjusted Pre-Tax, Pre-Provision Earnings Reconciliation

	For the Three Months Ended									For the Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,
(dollars in thousands)		2024			2024			2023			2024			2023
Adjusted earnings pre tax - non-GAAP	$	8,414		$	18,240		$	29,013		$	26,654		$	58,327
Provision for credit losses		16,800			14,000			5,879			30,800			9,014
Adjusted pre-tax, pre-provision earnings - non-GAAP	$	25,214		$	32,240		$	34,892		$	57,454		$	67,341
Adjusted pre-tax, pre-provision return on average assets		1.30	%		1.67	%		1.76	%		1.48	%		1.72	%

MIDLAND STATES BANCORP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued)

Efficiency Ratio Reconciliation

	For the Three Months Ended									For the Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,
(dollars in thousands)		2024			2024			2023			2024			2023
Noninterest expense - GAAP	$	47,479		$	44,867		$	42,894		$	92,346		$	87,376

Net interest income - GAAP	$	55,052		$	55,920		$	58,840		$	110,972		$	119,344
Effect of tax-exempt income		170			215			195			384			439
Adjusted net interest income		55,222			56,135			59,035			111,356			119,783

Noninterest income - GAAP		17,656			21,187			18,753			38,843			34,532
Loss on sales of investment securities, net		152			—			869			152			1,517
(Gain) on repurchase of subordinated debt		(167	)		—			(676	)		(167	)		(676	)
Adjusted noninterest income		17,641			21,187			18,946			38,828			35,373

Adjusted total revenue	$	72,863		$	77,322		$	77,981		$	150,184		$	155,156

Efficiency ratio		65.16	%		58.03	%		55.01	%		61.49	%		56.31	%

Return on Average Tangible Common Equity (ROATCE)

	For the Three Months Ended									For the Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,
(dollars in thousands)		2024			2024			2023			2024			2023
Net income available to common shareholders	$	4,522		$	11,657		$	19,347		$	16,179		$	38,891

Average total shareholders' equity—GAAP	$	783,846		$	789,906		$	776,791		$	786,877		$	772,015
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		(14,483	)		(15,525	)		(18,937	)		(15,004	)		(19,557	)
Average tangible common equity	$	496,911		$	501,929		$	485,402		$	499,421		$	480,006
ROATCE		3.66	%		9.34	%		15.99	%		6.51	%		16.34	%

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
	June 30,			March 31,			December 31,			September 30,			June 30,
(dollars in thousands, except per share data)		2024			2024			2023			2023			2023
Shareholders' Equity to Tangible Common Equity
Total shareholders' equity—GAAP	$	785,772		$	791,006		$	791,853		$	757,610		$	776,821
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		(14,003	)		(15,019	)		(16,108	)		(17,238	)		(18,367	)
Tangible common equity		499,317			503,535			503,293			467,920			486,002

Less: Accumulated other comprehensive loss (AOCI)		(82,581	)		(81,419	)		(76,753	)		(101,181	)		(84,719	)
Tangible common equity excluding AOCI	$	581,898		$	584,954		$	580,046		$	569,101		$	570,721

Total Assets to Tangible Assets:
Total assets—GAAP	$	7,757,274		$	7,831,809		$	7,866,868		$	7,969,285		$	8,034,721
Adjustments:
Goodwill		(161,904	)		(161,904	)		(161,904	)		(161,904	)		(161,904	)
Other intangible assets, net		(14,003	)		(15,019	)		(16,108	)		(17,238	)		(18,367	)
Tangible assets	$	7,581,367		$	7,654,886		$	7,688,856		$	7,790,143		$	7,854,450

Common Shares Outstanding		21,377,215			21,485,231			21,551,402			21,594,546			21,854,800

Tangible Common Equity to Tangible Assets		6.59	%		6.58	%		6.55	%		6.01	%		6.19	%
Tangible Book Value Per Share	$	23.36		$	23.44		$	23.35		$	21.67		$	22.24
Tangible Book Value Per Share, excluding AOCI	$	27.22		$	27.23		$	26.91		$	26.35		$	26.11

Source: Midland States Bancorp, Inc.

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Press Release

Midland States Bancorp, Inc. Announces 2024 Second Quarter Results