View:
Download DOC
Download PDF
Download XLS
Download XBRL
msbi-20230630
0001466026false--12-312023Q2http://fasb.org/us-gaap/2023#PropertyPlantAndEquipmentNethttp://fasb.org/us-gaap/2023#PropertyPlantAndEquipmentNethttp://fasb.org/us-gaap/2023#AccruedLiabilitiesAndOtherLiabilitieshttp://fasb.org/us-gaap/2023#AccruedLiabilitiesAndOtherLiabilitieshttp://fasb.org/us-gaap/2023#OtherAssets00014660262023-01-012023-06-300001466026us-gaap:CommonStockMember2023-01-012023-06-300001466026msbi:DepositorySharesMember2023-01-012023-06-3000014660262023-07-21xbrli:shares00014660262023-06-30iso4217:USD00014660262022-12-31iso4217:USDxbrli:shares00014660262023-04-012023-06-3000014660262022-04-012022-06-3000014660262022-01-012022-06-300001466026us-gaap:PreferredStockMember2023-03-310001466026us-gaap:CommonStockMember2023-03-310001466026us-gaap:AdditionalPaidInCapitalMember2023-03-310001466026us-gaap:RetainedEarningsMember2023-03-310001466026us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-3100014660262023-03-310001466026us-gaap:RetainedEarningsMember2023-04-012023-06-300001466026us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-012023-06-300001466026us-gaap:CommonStockMember2023-04-012023-06-300001466026us-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-300001466026us-gaap:PreferredStockMember2023-06-300001466026us-gaap:CommonStockMember2023-06-300001466026us-gaap:AdditionalPaidInCapitalMember2023-06-300001466026us-gaap:RetainedEarningsMember2023-06-300001466026us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-300001466026us-gaap:PreferredStockMember2022-12-310001466026us-gaap:CommonStockMember2022-12-310001466026us-gaap:AdditionalPaidInCapitalMember2022-12-310001466026us-gaap:RetainedEarningsMember2022-12-310001466026us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001466026us-gaap:RetainedEarningsMember2023-01-012023-06-300001466026us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-06-300001466026us-gaap:CommonStockMember2023-01-012023-06-300001466026us-gaap:AdditionalPaidInCapitalMember2023-01-012023-06-300001466026us-gaap:PreferredStockMember2022-03-310001466026us-gaap:CommonStockMember2022-03-310001466026us-gaap:AdditionalPaidInCapitalMember2022-03-310001466026us-gaap:RetainedEarningsMember2022-03-310001466026us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-3100014660262022-03-310001466026us-gaap:RetainedEarningsMember2022-04-012022-06-300001466026us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-012022-06-300001466026us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300001466026us-gaap:CommonStockMember2022-04-012022-06-300001466026us-gaap:PreferredStockMember2022-06-300001466026us-gaap:CommonStockMember2022-06-300001466026us-gaap:AdditionalPaidInCapitalMember2022-06-300001466026us-gaap:RetainedEarningsMember2022-06-300001466026us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-3000014660262022-06-300001466026us-gaap:PreferredStockMember2021-12-310001466026us-gaap:CommonStockMember2021-12-310001466026us-gaap:AdditionalPaidInCapitalMember2021-12-310001466026us-gaap:RetainedEarningsMember2021-12-310001466026us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-3100014660262021-12-310001466026us-gaap:RetainedEarningsMember2022-01-012022-06-300001466026us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-06-300001466026us-gaap:CommonStockMember2022-01-012022-06-300001466026us-gaap:AdditionalPaidInCapitalMember2022-01-012022-06-300001466026us-gaap:USTreasurySecuritiesMember2023-06-300001466026us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember2023-06-300001466026msbi:AgencyMortgageBackedSecuritiesMember2023-06-300001466026msbi:NonagencyMortgageBackedSecuritiesMember2023-06-300001466026us-gaap:USStatesAndPoliticalSubdivisionsMember2023-06-300001466026us-gaap:CollateralizedLoanObligationsMember2023-06-300001466026msbi:CorporateDebtAndEquitySecuritiesMember2023-06-300001466026us-gaap:USTreasurySecuritiesMember2022-12-310001466026us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember2022-12-310001466026msbi:AgencyMortgageBackedSecuritiesMember2022-12-310001466026msbi:NonagencyMortgageBackedSecuritiesMember2022-12-310001466026us-gaap:USStatesAndPoliticalSubdivisionsMember2022-12-310001466026msbi:CorporateDebtAndEquitySecuritiesMember2022-12-31msbi:securityxbrli:pure0001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMember2023-06-300001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialOtherLoansMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialOtherLoansMember2022-12-310001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMember2023-06-300001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMember2022-12-310001466026msbi:CommercialRealEstateOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMember2023-06-300001466026msbi:CommercialRealEstateOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMember2022-12-310001466026srt:MultifamilyMemberus-gaap:CommercialPortfolioSegmentMember2023-06-300001466026srt:MultifamilyMemberus-gaap:CommercialPortfolioSegmentMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:FarmlandLoansMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:FarmlandLoansMember2022-12-310001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMember2023-06-300001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMember2022-12-310001466026us-gaap:ResidentialPortfolioSegmentMemberus-gaap:RealEstateLoanMember2023-06-300001466026us-gaap:ResidentialPortfolioSegmentMemberus-gaap:RealEstateLoanMember2022-12-310001466026msbi:OtherResidentialLoansMemberus-gaap:ResidentialPortfolioSegmentMember2023-06-300001466026msbi:OtherResidentialLoansMemberus-gaap:ResidentialPortfolioSegmentMember2022-12-310001466026us-gaap:ConsumerLoanMemberus-gaap:ConsumerPortfolioSegmentMember2023-06-300001466026us-gaap:ConsumerLoanMemberus-gaap:ConsumerPortfolioSegmentMember2022-12-310001466026msbi:OtherConsumerLoansMemberus-gaap:ConsumerPortfolioSegmentMember2023-06-300001466026msbi:OtherConsumerLoansMemberus-gaap:ConsumerPortfolioSegmentMember2022-12-310001466026us-gaap:FinanceLeasesPortfolioSegmentMember2023-06-300001466026us-gaap:FinanceLeasesPortfolioSegmentMember2022-12-310001466026msbi:ConsumerLoansAndCommercialLeasesMember2023-04-012023-06-300001466026msbi:ConsumerLoansAndCommercialLeasesMember2023-01-012023-06-300001466026msbi:ConsumerLoansAndCommercialLeasesMember2022-04-012022-06-300001466026msbi:ConsumerLoansAndCommercialLeasesMember2022-01-012022-06-300001466026msbi:CommercialFHAWarehouseLinesMemberus-gaap:CommercialPortfolioSegmentMember2023-06-300001466026msbi:CommercialFHAWarehouseLinesMemberus-gaap:CommercialPortfolioSegmentMember2022-12-310001466026msbi:DirectorsExecutiveOfficersPrincipalShareholdersAndAffiliatesMember2023-06-300001466026msbi:DirectorsExecutiveOfficersPrincipalShareholdersAndAffiliatesMember2022-12-310001466026msbi:DirectorsExecutiveOfficersPrincipalShareholdersAndAffiliatesMember2023-03-310001466026msbi:DirectorsExecutiveOfficersPrincipalShareholdersAndAffiliatesMember2022-03-310001466026msbi:DirectorsExecutiveOfficersPrincipalShareholdersAndAffiliatesMember2021-12-310001466026msbi:DirectorsExecutiveOfficersPrincipalShareholdersAndAffiliatesMember2023-04-012023-06-300001466026msbi:DirectorsExecutiveOfficersPrincipalShareholdersAndAffiliatesMember2022-04-012022-06-300001466026msbi:DirectorsExecutiveOfficersPrincipalShareholdersAndAffiliatesMember2023-01-012023-06-300001466026msbi:DirectorsExecutiveOfficersPrincipalShareholdersAndAffiliatesMember2022-01-012022-06-300001466026msbi:DirectorsExecutiveOfficersPrincipalShareholdersAndAffiliatesMember2022-06-300001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMember2023-03-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateLoansMember2023-03-310001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMember2023-03-310001466026us-gaap:ResidentialPortfolioSegmentMembermsbi:ResidentialRealEstateLoanMember2023-03-310001466026us-gaap:ConsumerLoanMemberus-gaap:ConsumerPortfolioSegmentMember2023-03-310001466026us-gaap:FinanceLeasesPortfolioSegmentMember2023-03-310001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMember2023-04-012023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateLoansMember2023-04-012023-06-300001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMember2023-04-012023-06-300001466026us-gaap:ResidentialPortfolioSegmentMembermsbi:ResidentialRealEstateLoanMember2023-04-012023-06-300001466026us-gaap:ConsumerLoanMemberus-gaap:ConsumerPortfolioSegmentMember2023-04-012023-06-300001466026us-gaap:FinanceLeasesPortfolioSegmentMember2023-04-012023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateLoansMember2023-06-300001466026us-gaap:ResidentialPortfolioSegmentMembermsbi:ResidentialRealEstateLoanMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateLoansMember2022-12-310001466026us-gaap:ResidentialPortfolioSegmentMembermsbi:ResidentialRealEstateLoanMember2022-12-310001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMember2023-01-012023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateLoansMember2023-01-012023-06-300001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMember2023-01-012023-06-300001466026us-gaap:ResidentialPortfolioSegmentMembermsbi:ResidentialRealEstateLoanMember2023-01-012023-06-300001466026us-gaap:ConsumerLoanMemberus-gaap:ConsumerPortfolioSegmentMember2023-01-012023-06-300001466026us-gaap:FinanceLeasesPortfolioSegmentMember2023-01-012023-06-300001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMember2022-03-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateLoansMember2022-03-310001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMember2022-03-310001466026us-gaap:ResidentialPortfolioSegmentMembermsbi:ResidentialRealEstateLoanMember2022-03-310001466026us-gaap:ConsumerLoanMemberus-gaap:ConsumerPortfolioSegmentMember2022-03-310001466026us-gaap:FinanceLeasesPortfolioSegmentMember2022-03-310001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMember2022-04-012022-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateLoansMember2022-04-012022-06-300001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMember2022-04-012022-06-300001466026us-gaap:ResidentialPortfolioSegmentMembermsbi:ResidentialRealEstateLoanMember2022-04-012022-06-300001466026us-gaap:ConsumerLoanMemberus-gaap:ConsumerPortfolioSegmentMember2022-04-012022-06-300001466026us-gaap:FinanceLeasesPortfolioSegmentMember2022-04-012022-06-300001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMember2022-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateLoansMember2022-06-300001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMember2022-06-300001466026us-gaap:ResidentialPortfolioSegmentMembermsbi:ResidentialRealEstateLoanMember2022-06-300001466026us-gaap:ConsumerLoanMemberus-gaap:ConsumerPortfolioSegmentMember2022-06-300001466026us-gaap:FinanceLeasesPortfolioSegmentMember2022-06-300001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMember2021-12-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateLoansMember2021-12-310001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMember2021-12-310001466026us-gaap:ResidentialPortfolioSegmentMembermsbi:ResidentialRealEstateLoanMember2021-12-310001466026us-gaap:ConsumerLoanMemberus-gaap:ConsumerPortfolioSegmentMember2021-12-310001466026us-gaap:FinanceLeasesPortfolioSegmentMember2021-12-310001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMember2022-01-012022-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateLoansMember2022-01-012022-06-300001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMember2022-01-012022-06-300001466026us-gaap:ResidentialPortfolioSegmentMembermsbi:ResidentialRealEstateLoanMember2022-01-012022-06-300001466026us-gaap:ConsumerLoanMemberus-gaap:ConsumerPortfolioSegmentMember2022-01-012022-06-300001466026us-gaap:FinanceLeasesPortfolioSegmentMember2022-01-012022-06-300001466026srt:MinimumMembermsbi:CreditRiskStateOneMembermsbi:ConsumerLoansAndEquipmentFinanceLoansAndLeasesMember2023-06-300001466026msbi:CreditRiskStateOneMembermsbi:ConsumerLoansAndEquipmentFinanceLoansAndLeasesMembersrt:MaximumMember2023-06-300001466026srt:MinimumMembermsbi:ConsumerLoansAndEquipmentFinanceLoansAndLeasesMembermsbi:CreditRiskStateTwoMember2023-06-300001466026msbi:ConsumerLoansAndEquipmentFinanceLoansAndLeasesMembermsbi:CreditRiskStateTwoMembersrt:MaximumMember2023-06-300001466026srt:MinimumMembermsbi:ConsumerLoansAndEquipmentFinanceLoansAndLeasesMembermsbi:CreditRiskStateThreeMember2023-06-300001466026msbi:ConsumerLoansAndEquipmentFinanceLoansAndLeasesMembermsbi:CreditRiskStateThreeMembersrt:MaximumMember2023-06-300001466026msbi:CreditRiskStateFourMembersrt:MinimumMembermsbi:ConsumerLoansAndEquipmentFinanceLoansAndLeasesMember2023-06-300001466026msbi:CreditRiskStateFourMembermsbi:ConsumerLoansAndEquipmentFinanceLoansAndLeasesMembersrt:MaximumMember2023-06-300001466026msbi:CreditRiskStateDefaultMembersrt:MinimumMembermsbi:ConsumerLoansAndEquipmentFinanceLoansAndLeasesMember2023-06-300001466026msbi:LeaseFinancingReceivableMemberus-gaap:FinanceLeasesPortfolioSegmentMember2023-06-300001466026msbi:LeaseFinancingReceivableMemberus-gaap:FinanceLeasesPortfolioSegmentMember2022-12-310001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:RealEstateMember2023-06-300001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMembermsbi:BlanketLienMember2023-06-300001466026us-gaap:CommercialLoanMemberus-gaap:EquipmentMemberus-gaap:CommercialPortfolioSegmentMember2023-06-300001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:RealEstateMember2023-06-300001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMembermsbi:BlanketLienMember2023-06-300001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:EquipmentMemberus-gaap:CommercialPortfolioSegmentMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMemberus-gaap:RealEstateMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMembermsbi:BlanketLienMember2023-06-300001466026us-gaap:EquipmentMemberus-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMember2023-06-300001466026srt:MultifamilyMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:RealEstateMember2023-06-300001466026srt:MultifamilyMemberus-gaap:CommercialPortfolioSegmentMembermsbi:BlanketLienMember2023-06-300001466026srt:MultifamilyMemberus-gaap:EquipmentMemberus-gaap:CommercialPortfolioSegmentMember2023-06-300001466026us-gaap:RealEstateMembermsbi:LeaseFinancingReceivableMemberus-gaap:FinanceLeasesPortfolioSegmentMember2023-06-300001466026msbi:LeaseFinancingReceivableMembermsbi:BlanketLienMemberus-gaap:FinanceLeasesPortfolioSegmentMember2023-06-300001466026us-gaap:EquipmentMembermsbi:LeaseFinancingReceivableMemberus-gaap:FinanceLeasesPortfolioSegmentMember2023-06-300001466026us-gaap:RealEstateMember2023-06-300001466026msbi:BlanketLienMember2023-06-300001466026us-gaap:EquipmentMember2023-06-300001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:RealEstateMember2022-12-310001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMembermsbi:BlanketLienMember2022-12-310001466026us-gaap:CommercialLoanMemberus-gaap:EquipmentMemberus-gaap:CommercialPortfolioSegmentMember2022-12-310001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:RealEstateMember2022-12-310001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMembermsbi:BlanketLienMember2022-12-310001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:EquipmentMemberus-gaap:CommercialPortfolioSegmentMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMemberus-gaap:RealEstateMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMembermsbi:BlanketLienMember2022-12-310001466026us-gaap:EquipmentMemberus-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMember2022-12-310001466026srt:MultifamilyMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:RealEstateMember2022-12-310001466026srt:MultifamilyMemberus-gaap:CommercialPortfolioSegmentMembermsbi:BlanketLienMember2022-12-310001466026srt:MultifamilyMemberus-gaap:EquipmentMemberus-gaap:CommercialPortfolioSegmentMember2022-12-310001466026us-gaap:ResidentialPortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:RealEstateMember2022-12-310001466026us-gaap:ResidentialPortfolioSegmentMemberus-gaap:RealEstateLoanMembermsbi:BlanketLienMember2022-12-310001466026us-gaap:EquipmentMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:RealEstateLoanMember2022-12-310001466026us-gaap:RealEstateMember2022-12-310001466026msbi:BlanketLienMember2022-12-310001466026us-gaap:EquipmentMember2022-12-310001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2023-06-300001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:NonperformingFinancingReceivableMember2023-06-300001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMembermsbi:CommercialOtherLoansMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialOtherLoansMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMembermsbi:CommercialOtherLoansMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMembermsbi:CommercialOtherLoansMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:NonperformingFinancingReceivableMembermsbi:CommercialOtherLoansMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMembermsbi:CommercialOtherLoansMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2023-06-300001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:NonperformingFinancingReceivableMember2023-06-300001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMemberus-gaap:FinancialAssetPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMemberus-gaap:NonperformingFinancingReceivableMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026srt:MultifamilyMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026srt:MultifamilyMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2023-06-300001466026srt:MultifamilyMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026srt:MultifamilyMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026srt:MultifamilyMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:NonperformingFinancingReceivableMember2023-06-300001466026srt:MultifamilyMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMembermsbi:FarmlandLoansMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:FarmlandLoansMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMembermsbi:FarmlandLoansMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMembermsbi:FarmlandLoansMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:FarmlandLoansMemberus-gaap:NonperformingFinancingReceivableMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:FarmlandLoansMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2023-06-300001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:NonperformingFinancingReceivableMember2023-06-300001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:NonperformingFinancingReceivableMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:ResidentialPortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:ResidentialPortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2023-06-300001466026us-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:RealEstateLoanMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:ResidentialPortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:FinancialAssetPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:ResidentialPortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:NonperformingFinancingReceivableMember2023-06-300001466026us-gaap:ResidentialPortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026msbi:OtherResidentialLoansMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026msbi:OtherResidentialLoansMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2023-06-300001466026msbi:OtherResidentialLoansMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026msbi:OtherResidentialLoansMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026msbi:OtherResidentialLoansMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:NonperformingFinancingReceivableMember2023-06-300001466026msbi:OtherResidentialLoansMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:ConsumerLoanMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMember2023-06-300001466026us-gaap:ConsumerLoanMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:ConsumerPortfolioSegmentMember2023-06-300001466026us-gaap:ConsumerLoanMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMember2023-06-300001466026us-gaap:ConsumerLoanMemberus-gaap:FinancialAssetPastDueMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMember2023-06-300001466026us-gaap:ConsumerLoanMemberus-gaap:NonperformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMember2023-06-300001466026us-gaap:ConsumerLoanMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMember2023-06-300001466026us-gaap:FinancingReceivables30To59DaysPastDueMembermsbi:OtherConsumerLoansMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMember2023-06-300001466026msbi:OtherConsumerLoansMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:ConsumerPortfolioSegmentMember2023-06-300001466026us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMembermsbi:OtherConsumerLoansMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMember2023-06-300001466026us-gaap:FinancialAssetPastDueMembermsbi:OtherConsumerLoansMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMember2023-06-300001466026us-gaap:NonperformingFinancingReceivableMembermsbi:OtherConsumerLoansMemberus-gaap:ConsumerPortfolioSegmentMember2023-06-300001466026us-gaap:FinancialAssetNotPastDueMembermsbi:OtherConsumerLoansMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMember2023-06-300001466026us-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2023-06-300001466026us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:FinancialAssetPastDueMemberus-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:NonperformingFinancingReceivableMemberus-gaap:FinanceLeasesPortfolioSegmentMember2023-06-300001466026us-gaap:FinancialAssetNotPastDueMemberus-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:PerformingFinancingReceivableMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2023-06-300001466026us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:FinancialAssetPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:NonperformingFinancingReceivableMember2023-06-300001466026us-gaap:FinancialAssetNotPastDueMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2022-12-310001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:NonperformingFinancingReceivableMember2022-12-310001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMembermsbi:CommercialOtherLoansMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialOtherLoansMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMembermsbi:CommercialOtherLoansMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMembermsbi:CommercialOtherLoansMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:NonperformingFinancingReceivableMembermsbi:CommercialOtherLoansMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMembermsbi:CommercialOtherLoansMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2022-12-310001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:NonperformingFinancingReceivableMember2022-12-310001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMemberus-gaap:FinancialAssetPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMemberus-gaap:NonperformingFinancingReceivableMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026srt:MultifamilyMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026srt:MultifamilyMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2022-12-310001466026srt:MultifamilyMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026srt:MultifamilyMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026srt:MultifamilyMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:NonperformingFinancingReceivableMember2022-12-310001466026srt:MultifamilyMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMembermsbi:FarmlandLoansMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:FarmlandLoansMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMembermsbi:FarmlandLoansMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMembermsbi:FarmlandLoansMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:FarmlandLoansMemberus-gaap:NonperformingFinancingReceivableMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:FarmlandLoansMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2022-12-310001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:NonperformingFinancingReceivableMember2022-12-310001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:NonperformingFinancingReceivableMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:ResidentialPortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:ResidentialPortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2022-12-310001466026us-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:RealEstateLoanMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:ResidentialPortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:FinancialAssetPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:ResidentialPortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:NonperformingFinancingReceivableMember2022-12-310001466026us-gaap:ResidentialPortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026msbi:OtherResidentialLoansMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026msbi:OtherResidentialLoansMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2022-12-310001466026msbi:OtherResidentialLoansMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026msbi:OtherResidentialLoansMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026msbi:OtherResidentialLoansMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:NonperformingFinancingReceivableMember2022-12-310001466026msbi:OtherResidentialLoansMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:ConsumerLoanMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMember2022-12-310001466026us-gaap:ConsumerLoanMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:ConsumerPortfolioSegmentMember2022-12-310001466026us-gaap:ConsumerLoanMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMember2022-12-310001466026us-gaap:ConsumerLoanMemberus-gaap:FinancialAssetPastDueMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMember2022-12-310001466026us-gaap:ConsumerLoanMemberus-gaap:NonperformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMember2022-12-310001466026us-gaap:ConsumerLoanMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMember2022-12-310001466026us-gaap:FinancingReceivables30To59DaysPastDueMembermsbi:OtherConsumerLoansMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMember2022-12-310001466026msbi:OtherConsumerLoansMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:ConsumerPortfolioSegmentMember2022-12-310001466026us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMembermsbi:OtherConsumerLoansMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMember2022-12-310001466026us-gaap:FinancialAssetPastDueMembermsbi:OtherConsumerLoansMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMember2022-12-310001466026us-gaap:NonperformingFinancingReceivableMembermsbi:OtherConsumerLoansMemberus-gaap:ConsumerPortfolioSegmentMember2022-12-310001466026us-gaap:FinancialAssetNotPastDueMembermsbi:OtherConsumerLoansMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMember2022-12-310001466026us-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2022-12-310001466026us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:FinancialAssetPastDueMemberus-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:NonperformingFinancingReceivableMemberus-gaap:FinanceLeasesPortfolioSegmentMember2022-12-310001466026us-gaap:FinancialAssetNotPastDueMemberus-gaap:FinanceLeasesPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:PerformingFinancingReceivableMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2022-12-310001466026us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:FinancialAssetPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:NonperformingFinancingReceivableMember2022-12-310001466026us-gaap:FinancialAssetNotPastDueMemberus-gaap:PerformingFinancingReceivableMember2022-12-31msbi:loanmsbi:region0001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:PassMember2023-06-300001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:SpecialMentionMember2023-06-300001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:SubstandardMember2023-06-300001466026us-gaap:CommercialLoanMembermsbi:SubstandardNonaccrualMemberus-gaap:CommercialPortfolioSegmentMember2023-06-300001466026us-gaap:CommercialLoanMemberus-gaap:DoubtfulMemberus-gaap:CommercialPortfolioSegmentMember2023-06-300001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMembermsbi:NotGradedMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialOtherLoansMemberus-gaap:PassMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialOtherLoansMemberus-gaap:SpecialMentionMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:SubstandardMembermsbi:CommercialOtherLoansMember2023-06-300001466026msbi:SubstandardNonaccrualMemberus-gaap:CommercialPortfolioSegmentMembermsbi:CommercialOtherLoansMember2023-06-300001466026us-gaap:DoubtfulMemberus-gaap:CommercialPortfolioSegmentMembermsbi:CommercialOtherLoansMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:NotGradedMembermsbi:CommercialOtherLoansMember2023-06-300001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:PassMember2023-06-300001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:SpecialMentionMember2023-06-300001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:SubstandardMember2023-06-300001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMembermsbi:SubstandardNonaccrualMemberus-gaap:CommercialPortfolioSegmentMember2023-06-300001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:DoubtfulMemberus-gaap:CommercialPortfolioSegmentMember2023-06-300001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMembermsbi:NotGradedMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMemberus-gaap:PassMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMemberus-gaap:SpecialMentionMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMemberus-gaap:SubstandardMember2023-06-300001466026msbi:SubstandardNonaccrualMemberus-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMember2023-06-300001466026us-gaap:DoubtfulMemberus-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMembermsbi:NotGradedMember2023-06-300001466026srt:MultifamilyMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:PassMember2023-06-300001466026srt:MultifamilyMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:SpecialMentionMember2023-06-300001466026srt:MultifamilyMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:SubstandardMember2023-06-300001466026srt:MultifamilyMembermsbi:SubstandardNonaccrualMemberus-gaap:CommercialPortfolioSegmentMember2023-06-300001466026srt:MultifamilyMemberus-gaap:DoubtfulMemberus-gaap:CommercialPortfolioSegmentMember2023-06-300001466026srt:MultifamilyMemberus-gaap:CommercialPortfolioSegmentMembermsbi:NotGradedMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:FarmlandLoansMemberus-gaap:PassMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:FarmlandLoansMemberus-gaap:SpecialMentionMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:SubstandardMembermsbi:FarmlandLoansMember2023-06-300001466026msbi:SubstandardNonaccrualMemberus-gaap:CommercialPortfolioSegmentMembermsbi:FarmlandLoansMember2023-06-300001466026us-gaap:DoubtfulMemberus-gaap:CommercialPortfolioSegmentMembermsbi:FarmlandLoansMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:NotGradedMembermsbi:FarmlandLoansMember2023-06-300001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:PassMember2023-06-300001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:SpecialMentionMember2023-06-300001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:SubstandardMember2023-06-300001466026msbi:SubstandardNonaccrualMembermsbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMember2023-06-300001466026us-gaap:DoubtfulMembermsbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMember2023-06-300001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMembermsbi:NotGradedMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:PassMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:SpecialMentionMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:SubstandardMember2023-06-300001466026msbi:SubstandardNonaccrualMemberus-gaap:CommercialPortfolioSegmentMember2023-06-300001466026us-gaap:DoubtfulMemberus-gaap:CommercialPortfolioSegmentMember2023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:NotGradedMember2023-06-300001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:PassMember2022-12-310001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:SpecialMentionMember2022-12-310001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:SubstandardMember2022-12-310001466026us-gaap:CommercialLoanMembermsbi:SubstandardNonaccrualMemberus-gaap:CommercialPortfolioSegmentMember2022-12-310001466026us-gaap:CommercialLoanMemberus-gaap:DoubtfulMemberus-gaap:CommercialPortfolioSegmentMember2022-12-310001466026us-gaap:CommercialLoanMemberus-gaap:CommercialPortfolioSegmentMembermsbi:NotGradedMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialOtherLoansMemberus-gaap:PassMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialOtherLoansMemberus-gaap:SpecialMentionMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:SubstandardMembermsbi:CommercialOtherLoansMember2022-12-310001466026msbi:SubstandardNonaccrualMemberus-gaap:CommercialPortfolioSegmentMembermsbi:CommercialOtherLoansMember2022-12-310001466026us-gaap:DoubtfulMemberus-gaap:CommercialPortfolioSegmentMembermsbi:CommercialOtherLoansMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:NotGradedMembermsbi:CommercialOtherLoansMember2022-12-310001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:PassMember2022-12-310001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:SpecialMentionMember2022-12-310001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:SubstandardMember2022-12-310001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMembermsbi:SubstandardNonaccrualMemberus-gaap:CommercialPortfolioSegmentMember2022-12-310001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:DoubtfulMemberus-gaap:CommercialPortfolioSegmentMember2022-12-310001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMembermsbi:NotGradedMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMemberus-gaap:PassMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMemberus-gaap:SpecialMentionMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMemberus-gaap:SubstandardMember2022-12-310001466026msbi:SubstandardNonaccrualMemberus-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMember2022-12-310001466026us-gaap:DoubtfulMemberus-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialRealEstateOwnerOccupiedLoansMembermsbi:NotGradedMember2022-12-310001466026srt:MultifamilyMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:PassMember2022-12-310001466026srt:MultifamilyMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:SpecialMentionMember2022-12-310001466026srt:MultifamilyMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:SubstandardMember2022-12-310001466026srt:MultifamilyMembermsbi:SubstandardNonaccrualMemberus-gaap:CommercialPortfolioSegmentMember2022-12-310001466026srt:MultifamilyMemberus-gaap:DoubtfulMemberus-gaap:CommercialPortfolioSegmentMember2022-12-310001466026srt:MultifamilyMemberus-gaap:CommercialPortfolioSegmentMembermsbi:NotGradedMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:FarmlandLoansMemberus-gaap:PassMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:FarmlandLoansMemberus-gaap:SpecialMentionMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:SubstandardMembermsbi:FarmlandLoansMember2022-12-310001466026msbi:SubstandardNonaccrualMemberus-gaap:CommercialPortfolioSegmentMembermsbi:FarmlandLoansMember2022-12-310001466026us-gaap:DoubtfulMemberus-gaap:CommercialPortfolioSegmentMembermsbi:FarmlandLoansMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:NotGradedMembermsbi:FarmlandLoansMember2022-12-310001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:PassMember2022-12-310001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:SpecialMentionMember2022-12-310001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:SubstandardMember2022-12-310001466026msbi:SubstandardNonaccrualMembermsbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMember2022-12-310001466026us-gaap:DoubtfulMembermsbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMember2022-12-310001466026msbi:ConstructionAndLandDevelopmentLoanMemberus-gaap:CommercialPortfolioSegmentMembermsbi:NotGradedMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:PassMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:SpecialMentionMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMemberus-gaap:SubstandardMember2022-12-310001466026msbi:SubstandardNonaccrualMemberus-gaap:CommercialPortfolioSegmentMember2022-12-310001466026us-gaap:DoubtfulMemberus-gaap:CommercialPortfolioSegmentMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:NotGradedMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialLoansExcludingOtherMember2023-04-012023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialOtherLoansMember2023-04-012023-06-300001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMember2023-04-012023-06-300001466026msbi:CommercialRealEstateOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMember2023-04-012023-06-300001466026srt:MultifamilyMemberus-gaap:CommercialPortfolioSegmentMember2023-04-012023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:FarmlandLoansMember2023-04-012023-06-300001466026us-gaap:CommercialPortfolioSegmentMember2023-04-012023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialLoansExcludingOtherMember2023-01-012023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:CommercialOtherLoansMember2023-01-012023-06-300001466026msbi:CommercialRealEstateNonOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMember2023-01-012023-06-300001466026msbi:CommercialRealEstateOwnerOccupiedLoansMemberus-gaap:CommercialPortfolioSegmentMember2023-01-012023-06-300001466026srt:MultifamilyMemberus-gaap:CommercialPortfolioSegmentMember2023-01-012023-06-300001466026us-gaap:CommercialPortfolioSegmentMembermsbi:FarmlandLoansMember2023-01-012023-06-300001466026us-gaap:CommercialPortfolioSegmentMember2023-01-012023-06-300001466026us-gaap:ResidentialPortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026msbi:OtherResidentialLoansMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026us-gaap:ConsumerLoanMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMember2023-06-300001466026msbi:OtherConsumerLoansMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMember2023-06-300001466026us-gaap:PerformingFinancingReceivableMemberus-gaap:FinanceLeasesPortfolioSegmentMember2023-06-300001466026msbi:LoanPortfoliosExcludingCommercialMemberus-gaap:PerformingFinancingReceivableMember2023-06-300001466026msbi:LoanPortfoliosExcludingCommercialMemberus-gaap:NonperformingFinancingReceivableMember2023-06-300001466026msbi:LoanPortfoliosExcludingCommercialMember2023-06-300001466026us-gaap:ResidentialPortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026msbi:OtherResidentialLoansMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026us-gaap:ConsumerLoanMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMember2022-12-310001466026msbi:OtherConsumerLoansMemberus-gaap:PerformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMember2022-12-310001466026us-gaap:PerformingFinancingReceivableMemberus-gaap:FinanceLeasesPortfolioSegmentMember2022-12-310001466026msbi:LoanPortfoliosExcludingCommercialMemberus-gaap:PerformingFinancingReceivableMember2022-12-310001466026msbi:LoanPortfoliosExcludingCommercialMemberus-gaap:NonperformingFinancingReceivableMember2022-12-310001466026msbi:LoanPortfoliosExcludingCommercialMember2022-12-310001466026us-gaap:ResidentialPortfolioSegmentMemberus-gaap:RealEstateLoanMember2023-04-012023-06-300001466026msbi:OtherResidentialLoansMemberus-gaap:ResidentialPortfolioSegmentMember2023-04-012023-06-300001466026msbi:ConsumerLoansExcludingOtherMemberus-gaap:ConsumerPortfolioSegmentMember2023-04-012023-06-300001466026msbi:OtherConsumerLoansMemberus-gaap:ConsumerPortfolioSegmentMember2023-04-012023-06-300001466026msbi:LoanPortfoliosExcludingCommercialMember2023-04-012023-06-300001466026us-gaap:ResidentialPortfolioSegmentMemberus-gaap:RealEstateLoanMember2023-01-012023-06-300001466026msbi:OtherResidentialLoansMemberus-gaap:ResidentialPortfolioSegmentMember2023-01-012023-06-300001466026msbi:ConsumerLoansExcludingOtherMemberus-gaap:ConsumerPortfolioSegmentMember2023-01-012023-06-300001466026msbi:OtherConsumerLoansMemberus-gaap:ConsumerPortfolioSegmentMember2023-01-012023-06-300001466026msbi:LoanPortfoliosExcludingCommercialMember2023-01-012023-06-300001466026us-gaap:LandMember2023-06-300001466026us-gaap:LandMember2022-12-310001466026us-gaap:BuildingAndBuildingImprovementsMember2023-06-300001466026us-gaap:BuildingAndBuildingImprovementsMember2022-12-310001466026us-gaap:EquipmentMember2023-06-300001466026us-gaap:EquipmentMember2022-12-310001466026srt:MinimumMember2023-06-300001466026srt:MaximumMember2023-06-300001466026msbi:CommercialFhaMortgageLoansMember2023-06-300001466026msbi:CommercialFhaMortgageLoansMember2022-06-300001466026msbi:UnitedStatesSmallBusinessAdministrationSbaLoanServicingRightsMember2023-06-300001466026msbi:UnitedStatesSmallBusinessAdministrationSbaLoanServicingRightsMember2022-12-310001466026us-gaap:ResidentialMortgageMember2023-06-300001466026us-gaap:ResidentialMortgageMember2022-12-310001466026msbi:CommercialFhaMortgageLoansHeldForSaleMember2023-06-300001466026msbi:CommercialFhaMortgageLoansHeldForSaleMember2022-12-310001466026msbi:CommercialFhaMortgageLoansMember2022-07-012022-09-300001466026us-gaap:InterestRateLockCommitmentsMemberus-gaap:OtherAssetsMember2023-06-300001466026us-gaap:InterestRateLockCommitmentsMemberus-gaap:OtherAssetsMember2022-12-310001466026us-gaap:ForwardContractsMemberus-gaap:OtherAssetsMember2023-06-300001466026us-gaap:ForwardContractsMemberus-gaap:OtherAssetsMember2022-12-310001466026us-gaap:OtherAssetsMember2023-06-300001466026us-gaap:OtherAssetsMember2022-12-310001466026us-gaap:OtherLiabilitiesMemberus-gaap:InterestRateLockCommitmentsMember2023-06-300001466026us-gaap:OtherLiabilitiesMemberus-gaap:InterestRateLockCommitmentsMember2022-12-310001466026us-gaap:ForwardContractsMemberus-gaap:OtherLiabilitiesMember2023-06-300001466026us-gaap:ForwardContractsMemberus-gaap:OtherLiabilitiesMember2022-12-310001466026us-gaap:OtherLiabilitiesMember2023-06-300001466026us-gaap:OtherLiabilitiesMember2022-12-310001466026msbi:CommercialFhaMortgageLoansMember2023-04-012023-06-300001466026msbi:CommercialFhaMortgageLoansMember2023-01-012023-06-300001466026msbi:CommercialFhaMortgageLoansMember2022-04-012022-06-300001466026msbi:CommercialFhaMortgageLoansMember2022-01-012022-06-300001466026msbi:ReceiveFixedPayVariableInterestRateSwapsMemberus-gaap:CashFlowHedgingMember2023-06-300001466026msbi:ReceiveFixedPayVariableInterestRateSwapsMemberus-gaap:CashFlowHedgingMember2022-12-310001466026msbi:ReceiveFixedPayVariableInterestRateSwapsMemberus-gaap:CashFlowHedgingMember2023-01-012023-06-300001466026msbi:ReceiveFixedPayVariableInterestRateSwapsMemberus-gaap:CashFlowHedgingMember2022-01-012022-12-310001466026us-gaap:LongMembermsbi:ReceiveFixedPayVariableInterestRateSwapsMemberus-gaap:CashFlowHedgingMember2023-06-300001466026us-gaap:LongMembermsbi:ReceiveFixedPayVariableInterestRateSwapsMemberus-gaap:CashFlowHedgingMember2022-12-310001466026us-gaap:ShortMembermsbi:ReceiveFixedPayVariableInterestRateSwapsMemberus-gaap:CashFlowHedgingMember2023-06-300001466026us-gaap:ShortMembermsbi:ReceiveFixedPayVariableInterestRateSwapsMemberus-gaap:CashFlowHedgingMember2022-12-310001466026us-gaap:InterestRateSwapMember2023-06-300001466026us-gaap:InterestRateSwapMember2022-12-310001466026us-gaap:OtherLiabilitiesMemberus-gaap:InterestRateSwapMember2023-06-300001466026us-gaap:OtherLiabilitiesMemberus-gaap:InterestRateSwapMember2022-12-3100014660262022-01-012022-12-310001466026us-gaap:FederalReserveBankAdvancesMember2023-06-300001466026us-gaap:FederalReserveBankAdvancesMember2022-12-310001466026us-gaap:AssetPledgedAsCollateralMemberus-gaap:CommercialRealEstateMember2023-06-300001466026us-gaap:AssetPledgedAsCollateralMemberus-gaap:CommercialRealEstateMember2022-12-310001466026msbi:FixedRateFixedTermLoanMaturingFebruary2028Membermsbi:MidlandStatesBankMember2023-06-300001466026msbi:FixedRateFixedTermLoanMaturingFebruary2028Membermsbi:MidlandStatesBankMember2022-12-310001466026msbi:PutableFixedRateMaturingThroughFebruary2028Membermsbi:MidlandStatesBankMember2023-06-300001466026msbi:PutableFixedRateMaturingThroughFebruary2028Membermsbi:MidlandStatesBankMember2022-12-310001466026msbi:FloaterRateMaturingOctober2023Memberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMembermsbi:MidlandStatesBankMember2023-06-300001466026msbi:FloaterRateMaturingOctober2023Memberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMembermsbi:MidlandStatesBankMember2022-12-310001466026msbi:FloaterRateMaturingOctober2023Membermsbi:MidlandStatesBankMember2023-06-300001466026msbi:FloaterRateMaturingOctober2023Membermsbi:MidlandStatesBankMember2022-12-310001466026msbi:ShortTermFixedRateMaturingJuly2023Membermsbi:MidlandStatesBankMember2023-06-300001466026msbi:ShortTermFixedRateMaturingJuly2023Membermsbi:MidlandStatesBankMember2022-12-310001466026msbi:A500SubordinatedDebtMember2023-06-300001466026msbi:A550SubordinatedDebtMember2023-06-300001466026msbi:A650SubordinatedDebtMember2023-06-300001466026msbi:A500SubordinatedDebtMember2022-12-310001466026msbi:A550SubordinatedDebtMember2022-12-310001466026msbi:A650SubordinatedDebtMember2022-12-310001466026msbi:A500SubordinatedDebtMembermsbi:ThreeMonthSecuredOvernightFinancingRateMember2023-01-012023-06-300001466026msbi:A550SubordinatedDebtMembermsbi:ThreeMonthSecuredOvernightFinancingRateMember2023-01-012023-06-300001466026msbi:A500SubordinatedDebtMember2023-04-012023-06-300001466026msbi:A650SubordinatedDebtMember2023-04-012023-06-300001466026us-gaap:EmployeeStockOptionMember2023-01-012023-06-300001466026us-gaap:EmployeeStockOptionMember2023-04-012023-06-300001466026us-gaap:EmployeeStockOptionMember2022-01-012022-06-300001466026us-gaap:EmployeeStockOptionMember2022-04-012022-06-300001466026us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2023-06-300001466026us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2023-06-300001466026us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMember2023-06-300001466026us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2023-06-300001466026us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-06-300001466026us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-06-300001466026us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2023-06-300001466026us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-06-300001466026us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2023-06-300001466026us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2023-06-300001466026us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMemberus-gaap:FairValueInputsLevel2Member2023-06-300001466026us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2023-06-300001466026msbi:NonagencyMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-06-300001466026us-gaap:FairValueInputsLevel1Membermsbi:NonagencyMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-06-300001466026msbi:NonagencyMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2023-06-300001466026msbi:NonagencyMortgageBackedSecuritiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-06-300001466026us-gaap:USStatesAndPoliticalSubdivisionsMemberus-gaap:FairValueMeasurementsRecurringMember2023-06-300001466026us-gaap:FairValueInputsLevel1Memberus-gaap:USStatesAndPoliticalSubdivisionsMemberus-gaap:FairValueMeasurementsRecurringMember2023-06-300001466026us-gaap:USStatesAndPoliticalSubdivisionsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2023-06-300001466026us-gaap:USStatesAndPoliticalSubdivisionsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-06-300001466026us-gaap:CollateralizedLoanObligationsMemberus-gaap:FairValueMeasurementsRecurringMember2023-06-300001466026us-gaap:FairValueInputsLevel1Memberus-gaap:CollateralizedLoanObligationsMemberus-gaap:FairValueMeasurementsRecurringMember2023-06-300001466026us-gaap:CollateralizedLoanObligationsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2023-06-300001466026us-gaap:CollateralizedLoanObligationsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-06-300001466026msbi:CorporateDebtAndEquitySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-06-300001466026us-gaap:FairValueInputsLevel1Membermsbi:CorporateDebtAndEquitySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-06-300001466026msbi:CorporateDebtAndEquitySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2023-06-300001466026msbi:CorporateDebtAndEquitySecuritiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-06-300001466026msbi:EquitySecurityMemberus-gaap:FairValueMeasurementsRecurringMember2023-06-300001466026us-gaap:FairValueInputsLevel1Membermsbi:EquitySecurityMemberus-gaap:FairValueMeasurementsRecurringMember2023-06-300001466026msbi:EquitySecurityMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2023-06-300001466026msbi:EquitySecurityMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-06-300001466026us-gaap:FairValueMeasurementsRecurringMember2023-06-300001466026us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-06-300001466026us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2023-06-300001466026us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-06-300001466026us-gaap:FairValueMeasurementsNonrecurringMember2023-06-300001466026us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsNonrecurringMember2023-06-300001466026us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel2Member2023-06-300001466026us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Member2023-06-300001466026us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2022-12-310001466026us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2022-12-310001466026us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMember2022-12-310001466026us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2022-12-310001466026us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001466026us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001466026us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-12-310001466026us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001466026us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2022-12-310001466026us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2022-12-310001466026us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMemberus-gaap:FairValueInputsLevel2Member2022-12-310001466026us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2022-12-310001466026msbi:NonagencyMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001466026us-gaap:FairValueInputsLevel1Membermsbi:NonagencyMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001466026msbi:NonagencyMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-12-310001466026msbi:NonagencyMortgageBackedSecuritiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001466026us-gaap:USStatesAndPoliticalSubdivisionsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001466026us-gaap:FairValueInputsLevel1Memberus-gaap:USStatesAndPoliticalSubdivisionsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001466026us-gaap:USStatesAndPoliticalSubdivisionsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-12-310001466026us-gaap:USStatesAndPoliticalSubdivisionsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001466026msbi:CorporateDebtAndEquitySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001466026us-gaap:FairValueInputsLevel1Membermsbi:CorporateDebtAndEquitySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001466026msbi:CorporateDebtAndEquitySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-12-310001466026msbi:CorporateDebtAndEquitySecuritiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001466026msbi:EquitySecurityMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001466026us-gaap:FairValueInputsLevel1Membermsbi:EquitySecurityMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001466026msbi:EquitySecurityMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-12-310001466026msbi:EquitySecurityMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001466026us-gaap:FairValueMeasurementsRecurringMember2022-12-310001466026us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001466026us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-12-310001466026us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001466026us-gaap:FairValueMeasurementsNonrecurringMember2022-12-310001466026us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsNonrecurringMember2022-12-310001466026us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel2Member2022-12-310001466026us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Member2022-12-310001466026us-gaap:FairValueMeasurementsNonrecurringMember2023-04-012023-06-300001466026us-gaap:FairValueMeasurementsNonrecurringMember2022-04-012022-06-300001466026us-gaap:FairValueMeasurementsNonrecurringMember2023-01-012023-06-300001466026us-gaap:FairValueMeasurementsNonrecurringMember2022-01-012022-06-300001466026us-gaap:ValuationTechniqueDiscountedCashFlowMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Membermsbi:UnitedStatesSmallBusinessAdministrationSbaLoanServicingRightsMember2023-06-300001466026us-gaap:ValuationTechniqueDiscountedCashFlowMembersrt:MinimumMemberus-gaap:MeasurementInputPrepaymentRateMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Membermsbi:UnitedStatesSmallBusinessAdministrationSbaLoanServicingRightsMember2023-06-300001466026us-gaap:ValuationTechniqueDiscountedCashFlowMemberus-gaap:MeasurementInputPrepaymentRateMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Membermsbi:UnitedStatesSmallBusinessAdministrationSbaLoanServicingRightsMembersrt:MaximumMember2023-06-300001466026us-gaap:ValuationTechniqueDiscountedCashFlowMemberus-gaap:MeasurementInputPrepaymentRateMembersrt:WeightedAverageMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Membermsbi:UnitedStatesSmallBusinessAdministrationSbaLoanServicingRightsMember2023-06-300001466026us-gaap:ValuationTechniqueDiscountedCashFlowMembersrt:WeightedAverageMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMembermsbi:UnitedStatesSmallBusinessAdministrationSbaLoanServicingRightsMember2023-06-300001466026us-gaap:ValuationTechniqueDiscountedCashFlowMembermsbi:MortgageServicingRightsHeldForSaleMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Member2023-06-300001466026us-gaap:ValuationTechniqueDiscountedCashFlowMembersrt:MinimumMemberus-gaap:MeasurementInputPrepaymentRateMembermsbi:MortgageServicingRightsHeldForSaleMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Member2023-06-300001466026us-gaap:ValuationTechniqueDiscountedCashFlowMemberus-gaap:MeasurementInputPrepaymentRateMembermsbi:MortgageServicingRightsHeldForSaleMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Membersrt:MaximumMember2023-06-300001466026us-gaap:ValuationTechniqueDiscountedCashFlowMemberus-gaap:MeasurementInputPrepaymentRateMembersrt:WeightedAverageMembermsbi:MortgageServicingRightsHeldForSaleMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Member2023-06-300001466026us-gaap:ValuationTechniqueDiscountedCashFlowMembersrt:MinimumMembermsbi:MortgageServicingRightsHeldForSaleMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMember2023-06-300001466026us-gaap:ValuationTechniqueDiscountedCashFlowMembermsbi:MortgageServicingRightsHeldForSaleMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMembersrt:MaximumMember2023-06-300001466026us-gaap:ValuationTechniqueDiscountedCashFlowMembersrt:WeightedAverageMembermsbi:MortgageServicingRightsHeldForSaleMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMember2023-06-300001466026us-gaap:ValuationTechniqueDiscountedCashFlowMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Membermsbi:UnitedStatesSmallBusinessAdministrationSbaLoanServicingRightsMember2022-12-310001466026us-gaap:ValuationTechniqueDiscountedCashFlowMembersrt:MinimumMemberus-gaap:MeasurementInputPrepaymentRateMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Membermsbi:UnitedStatesSmallBusinessAdministrationSbaLoanServicingRightsMember2022-12-310001466026us-gaap:ValuationTechniqueDiscountedCashFlowMemberus-gaap:MeasurementInputPrepaymentRateMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Membermsbi:UnitedStatesSmallBusinessAdministrationSbaLoanServicingRightsMembersrt:MaximumMember2022-12-310001466026us-gaap:ValuationTechniqueDiscountedCashFlowMemberus-gaap:MeasurementInputPrepaymentRateMembersrt:WeightedAverageMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Membermsbi:UnitedStatesSmallBusinessAdministrationSbaLoanServicingRightsMember2022-12-310001466026us-gaap:ValuationTechniqueDiscountedCashFlowMembersrt:WeightedAverageMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMembermsbi:UnitedStatesSmallBusinessAdministrationSbaLoanServicingRightsMember2022-12-310001466026us-gaap:ValuationTechniqueDiscountedCashFlowMembermsbi:MortgageServicingRightsHeldForSaleMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Member2022-12-310001466026us-gaap:ValuationTechniqueDiscountedCashFlowMembersrt:MinimumMemberus-gaap:MeasurementInputPrepaymentRateMembermsbi:MortgageServicingRightsHeldForSaleMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Member2022-12-310001466026us-gaap:ValuationTechniqueDiscountedCashFlowMemberus-gaap:MeasurementInputPrepaymentRateMembermsbi:MortgageServicingRightsHeldForSaleMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Membersrt:MaximumMember2022-12-310001466026us-gaap:ValuationTechniqueDiscountedCashFlowMemberus-gaap:MeasurementInputPrepaymentRateMembersrt:WeightedAverageMembermsbi:MortgageServicingRightsHeldForSaleMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Member2022-12-310001466026us-gaap:ValuationTechniqueDiscountedCashFlowMembersrt:MinimumMembermsbi:MortgageServicingRightsHeldForSaleMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMember2022-12-310001466026us-gaap:ValuationTechniqueDiscountedCashFlowMembermsbi:MortgageServicingRightsHeldForSaleMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMembersrt:MaximumMember2022-12-310001466026us-gaap:ValuationTechniqueDiscountedCashFlowMembersrt:WeightedAverageMembermsbi:MortgageServicingRightsHeldForSaleMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMember2022-12-310001466026us-gaap:ResidentialPortfolioSegmentMember2023-06-300001466026us-gaap:ResidentialPortfolioSegmentMember2022-12-310001466026us-gaap:CommercialPortfolioSegmentMember2022-04-012022-06-300001466026us-gaap:CommercialPortfolioSegmentMember2022-01-012022-06-300001466026us-gaap:ResidentialPortfolioSegmentMember2023-04-012023-06-300001466026us-gaap:ResidentialPortfolioSegmentMember2022-04-012022-06-300001466026us-gaap:ResidentialPortfolioSegmentMember2023-01-012023-06-300001466026us-gaap:ResidentialPortfolioSegmentMember2022-01-012022-06-300001466026us-gaap:CarryingReportedAmountFairValueDisclosureMember2023-06-300001466026us-gaap:EstimateOfFairValueFairValueDisclosureMember2023-06-300001466026us-gaap:FairValueInputsLevel1Member2023-06-300001466026us-gaap:FairValueInputsLevel2Member2023-06-300001466026us-gaap:FairValueInputsLevel3Member2023-06-300001466026us-gaap:CarryingReportedAmountFairValueDisclosureMember2022-12-310001466026us-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310001466026us-gaap:FairValueInputsLevel1Member2022-12-310001466026us-gaap:FairValueInputsLevel2Member2022-12-310001466026us-gaap:FairValueInputsLevel3Member2022-12-310001466026us-gaap:CommitmentsToExtendCreditMember2023-06-300001466026us-gaap:CommitmentsToExtendCreditMember2022-12-310001466026us-gaap:FinancialStandbyLetterOfCreditMember2023-06-300001466026us-gaap:FinancialStandbyLetterOfCreditMember2022-12-310001466026msbi:BankingSegmentMember2023-04-012023-06-300001466026msbi:WealthManagementMember2023-04-012023-06-300001466026us-gaap:AllOtherSegmentsMember2023-04-012023-06-300001466026msbi:BankingSegmentMember2023-06-300001466026msbi:WealthManagementMember2023-06-300001466026us-gaap:AllOtherSegmentsMember2023-06-300001466026msbi:BankingSegmentMember2023-01-012023-06-300001466026msbi:WealthManagementMember2023-01-012023-06-300001466026us-gaap:AllOtherSegmentsMember2023-01-012023-06-300001466026msbi:BankingSegmentMember2022-04-012022-06-300001466026msbi:WealthManagementMember2022-04-012022-06-300001466026us-gaap:AllOtherSegmentsMember2022-04-012022-06-300001466026msbi:BankingSegmentMember2022-06-300001466026msbi:WealthManagementMember2022-06-300001466026us-gaap:AllOtherSegmentsMember2022-06-300001466026msbi:BankingSegmentMember2022-01-012022-06-300001466026msbi:WealthManagementMember2022-01-012022-06-300001466026us-gaap:AllOtherSegmentsMember2022-01-012022-06-300001466026msbi:AssetManagementMember2023-04-012023-06-300001466026msbi:AssetManagementMember2022-04-012022-06-300001466026msbi:AssetManagementMember2023-01-012023-06-300001466026msbi:AssetManagementMember2022-01-012022-06-300001466026us-gaap:InvestmentPerformanceMember2023-04-012023-06-300001466026us-gaap:InvestmentPerformanceMember2022-04-012022-06-300001466026us-gaap:InvestmentPerformanceMember2023-01-012023-06-300001466026us-gaap:InvestmentPerformanceMember2022-01-012022-06-300001466026msbi:OtherWealthManagementRevenueMember2023-04-012023-06-300001466026msbi:OtherWealthManagementRevenueMember2022-04-012022-06-300001466026msbi:OtherWealthManagementRevenueMember2023-01-012023-06-300001466026msbi:OtherWealthManagementRevenueMember2022-01-012022-06-300001466026msbi:NonsufficientFundFeesMember2023-04-012023-06-300001466026msbi:NonsufficientFundFeesMember2022-04-012022-06-300001466026msbi:NonsufficientFundFeesMember2023-01-012023-06-300001466026msbi:NonsufficientFundFeesMember2022-01-012022-06-300001466026msbi:OtherDepositAccountMember2023-04-012023-06-300001466026msbi:OtherDepositAccountMember2022-04-012022-06-300001466026msbi:OtherDepositAccountMember2023-01-012023-06-300001466026msbi:OtherDepositAccountMember2022-01-012022-06-300001466026msbi:InterchangeRevenuesMember2023-04-012023-06-300001466026msbi:InterchangeRevenuesMember2022-04-012022-06-300001466026msbi:InterchangeRevenuesMember2023-01-012023-06-300001466026msbi:InterchangeRevenuesMember2022-01-012022-06-300001466026us-gaap:CreditCardMerchantDiscountMember2023-04-012023-06-300001466026us-gaap:CreditCardMerchantDiscountMember2022-04-012022-06-300001466026us-gaap:CreditCardMerchantDiscountMember2023-01-012023-06-300001466026us-gaap:CreditCardMerchantDiscountMember2022-01-012022-06-300001466026us-gaap:ServiceOtherMember2023-04-012023-06-300001466026us-gaap:ServiceOtherMember2022-04-012022-06-300001466026us-gaap:ServiceOtherMember2023-01-012023-06-300001466026us-gaap:ServiceOtherMember2022-01-012022-06-30

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2023
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to _______________
Commission File Number 001-35272
MIDLAND STATES BANCORP, INC.
(Exact name of registrant as specified in its charter)
Illinois37-1233196
(State of other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
1201 Network Centre Drive62401
Effingham, IL
(Zip Code)
(Address of principal executive offices)
(217) 342-7321
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common stock, $0.01 par valueMSBI
The Nasdaq Stock Market LLC
Depositary Shares, each representing a 1/40th interest in a share of 7.75% fixed rate reset non-cumulative perpetual preferred stock, Series AMSBIP
The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☐Accelerated filer ☒Non-accelerated filer ☐Smaller reporting company ☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No
As of July 21, 2023, the Registrant had 21,796,334 shares of outstanding common stock, $0.01 par value.

Table of Contents
MIDLAND STATES BANCORP, INC.
TABLE OF CONTENTS
Page
Consolidated Balance Sheets at June 30, 2023 (Unaudited) and December 31, 2022
Consolidated Statements of Income (Unaudited) for the three and six months ended June 30, 2023 and 2022
Consolidated Statements of Comprehensive Income (Unaudited) for the three and six months ended June 30, 2023 and 2022
Consolidated Statements of Shareholders’ Equity (Unaudited) for the three and six months ended June 30, 2023 and 2022
Consolidated Statements of Cash Flows (Unaudited) for the six months ended June 30, 2023 and 2022
1
Table of Contents
PART I – FINANCIAL INFORMATION

2
Table of Contents
ITEM 1 – FINANCIAL STATEMENTS
MIDLAND STATES BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share data)
June 30,
2023		December 31,
2022
(unaudited)
Assets
Cash and due from banks$159,637 $153,345 
Federal funds sold1,058 7,286 
Cash and cash equivalents160,695 160,631 
Investment securities available for sale, at fair value882,715 768,234 
Equity securities, at fair value4,288 8,626 
Loans6,367,344 6,306,467 
Allowance for credit losses on loans(64,950)(61,051)
Total loans, net6,302,394 6,245,416 
Loans held for sale5,632 1,286 
Premises and equipment, net81,006 78,293 
Other real estate owned202 6,729 
Nonmarketable equity securities46,876 46,201 
Accrued interest receivable21,000 20,313 
Loan servicing rights, at lower of cost or fair value21,611 1,205 
Commercial FHA mortgage loan servicing rights held for sale— 20,745 
Goodwill161,904 161,904 
Other intangible assets, net18,367 20,866 
Company-owned life insurance152,210 150,443 
Other assets175,821 164,609 
Total assets$8,034,721 $7,855,501 
Liabilities and Shareholders’ Equity
Liabilities:
Deposits:
Noninterest-bearing demand deposits$1,162,909 $1,362,158 
Interest-bearing deposits5,263,639 5,002,494 
Total deposits6,426,548 6,364,652 
Short-term borrowings21,783 42,311 
Federal Home Loan Bank advances and other borrowings575,000 460,000 
Subordinated debt93,404 99,772 
Trust preferred debentures50,296 49,975 
Accrued interest payable and other liabilities90,869 80,217 
Total liabilities7,257,900 7,096,927 
Shareholders’ Equity:
Preferred stock, $2.00 par value; 4,000,000 shares authorized; 115,000 Series A shares, $1,000 per share liquidation preference, issued and outstanding at June 30, 2023 and December 31, 2022, respectively
110,548 110,548 
Common stock, $0.01 par value; 40,000,000 shares authorized; 21,854,800 and 22,214,913 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively
218 222 
Capital surplus442,886 449,196 
Retained earnings307,888 282,405 
Accumulated other comprehensive loss, net of tax(84,719)(83,797)
Total shareholders’ equity776,821 758,574 
Total liabilities and shareholders’ equity$8,034,721 $7,855,501 
The accompanying notes are an integral part of the consolidated financial statements.
3
Table of Contents
MIDLAND STATES BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME — (UNAUDITED)
(dollars in thousands, except per share data)
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Interest income:
Loans including fees:
Taxable$91,350 $62,943 $178,809 $119,529 
Tax exempt427 514 852 1,062 
Loans held for sale59 77 75 297 
Investment securities:
Taxable6,899 4,055 12,269 7,952 
Tax exempt305 692 799 1,534 
Nonmarketable equity securities599 487 1,394 971 
Federal funds sold and cash investments852 468 1,832 639 
Total interest income100,491 69,236 196,030 131,984 
Interest expense:
Deposits33,617 3,810 60,022 5,971 
Short-term borrowings14 22 39 45 
Federal Home Loan Bank advances and other borrowings5,396 1,435 11,402 2,647 
Subordinated debt1,335 2,011 2,705 4,022 
Trust preferred debentures1,289 624 2,518 1,138 
Total interest expense41,651 7,902 76,686 13,823 
Net interest income58,840 61,334 119,344 118,161 
Provision for credit losses:
Provision for credit losses on loans5,879 4,741 9,014 8,873 
Provision for credit losses on unfunded commitments— 700 — 956 
Recapture of other credit losses— — — (221)
Total provision for credit losses5,879 5,441 9,014 9,608 
Net interest income after provision for credit losses52,961 55,893 110,330 108,553 
Noninterest income:
Wealth management revenue6,269 6,143 12,680 13,282 
Residential mortgage banking revenue540 384 945 983 
Service charges on deposit accounts2,677 2,304 5,245 4,372 
Interchange revenue3,696 3,590 7,108 6,870 
Loss on sales of investment securities, net(869)(101)(1,517)(101)
Impairment on commercial mortgage servicing rights— (869)— (1,263)
Company-owned life insurance891 840 1,767 1,859 
Other income5,549 2,322 8,304 4,224 
Total noninterest income18,753 14,613 34,532 30,226 
Noninterest expense:
Salaries and employee benefits22,857 22,645 47,100 44,515 
Occupancy and equipment3,879 3,489 8,322 7,244 
Data processing6,544 6,082 12,855 11,955 
FDIC insurance1,196 826 2,525 1,656 
Professional1,663 1,516 3,423 3,488 
Marketing670 733 1,373 1,421 
Communications496 635 1,007 1,347 
Loan expense1,420 1,137 2,238 2,080 
Amortization of intangible assets1,208 1,318 2,499 2,716 
Other expense2,961 2,958 6,034 5,801 
Total noninterest expense42,894 41,339 87,376 82,223 
Income before income taxes28,820 29,167 57,486 56,556 
Income taxes7,245 7,284 14,139 13,924 
Net income21,575 21,883 43,347 42,632 
Preferred dividends2,228 — 4,456 — 
Net income available to common shareholders$19,347 $21,883 $38,891 $42,632 
Per common share data:
Basic earnings per common share$0.86 $0.97 $1.72 $1.89 
Diluted earnings per common share$0.86 $0.97 $1.72 $1.89 
Weighted average common shares outstanding22,200,917 22,305,590 22,338,627 22,290,486 
Weighted average diluted common shares outstanding22,205,079 22,360,819 22,348,981 22,355,936 
The accompanying notes are an integral part of the consolidated financial statements.
4
Table of Contents
MIDLAND STATES BANCORP, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME — (UNAUDITED)
(dollars in thousands)
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Net income$21,575 $21,883 $43,347 $42,632 
Other comprehensive loss:
Investment securities available for sale:
Unrealized losses that occurred during the period(8,020)(32,659)(2,656)(83,435)
Recapture of credit loss expense— — — (221)
Reclassification adjustment for realized net losses on sales of investment securities included in net income
869 101 1,517 101 
Income tax effect1,930 8,953 308 22,977 
Change in investment securities available for sale, net of tax(5,221)(23,605)(831)(60,578)
Cash flow hedges:
Net unrealized derivative (losses) gains on cash flow hedges(2,331)(2,010)(125)3,095 
Income tax effect630 553 34 (851)
Change in cash flow hedges, net of tax(1,701)(1,457)(91)2,244 
Other comprehensive loss, net of tax(6,922)(25,062)(922)(58,334)
Total comprehensive income (loss)$14,653 $(3,179)$42,425 $(15,702)
The accompanying notes are an integral part of the consolidated financial statements.
5
Table of Contents
MIDLAND STATES BANCORP, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY — (UNAUDITED)
(dollars in thousands, except per share data)
Preferred stockCommon
stock		Capital
surplus		Retained
earnings		Accumulated
other
comprehensive
(loss) income 		Total
shareholders'
equity
Balances, March 31, 2023$110,548 $221 $447,471 $295,200 $(77,797)$775,643 
Net income— — — 21,575 — 21,575 
Other comprehensive loss— — — — (6,922)(6,922)
Common dividends declared ($0.30 per share)
— — — (6,659)— (6,659)
Preferred dividends declared ($19.375 per share)
— — — (2,228)— (2,228)
Common stock repurchased— (3)(6,163)— — (6,166)
Share-based compensation expense— — 567 — — 567 
Issuance of common stock under employee benefit plans— 1,011 — — 1,011 
Balances, June 30, 2023$110,548 $218 $442,886 $307,888 $(84,719)$776,821 
Balances, December 31, 2022$110,548 $222 $449,196 $282,405 $(83,797)$758,574 
Net income— — — 43,347 — 43,347 
Other comprehensive loss— — — — (922)(922)
Common dividends declared ($0.60 per share)
— — — (13,408)— (13,408)
Preferred dividends declared ($38.750 per share)
— — — (4,456)— (4,456)
Common stock repurchased— (4)(8,963)— — (8,967)
Share-based compensation expense— — 1,192 — — 1,192 
Issuance of common stock under employee benefit plans— — 1,461 — — 1,461 
Balances, June 30, 2023$110,548 $218 $442,886 $307,888 $(84,719)$776,821 
Balances, March 31, 2022$— $220 $446,044 $226,757 $(28,035)$644,986 
Net income— — — 21,883 — 21,883 
Other comprehensive loss— — — — (25,062)(25,062)
Common dividends declared ($0.29 per share)
— — — (6,470)— (6,470)
Share-based compensation expense— — 519 — — 519 
Issuance of common stock under employee benefit plans— 1 331 — — 332 
Balances, June 30, 2022$— $221 $446,894 $242,170 $(53,097)$636,188 
Balances, December 31, 2021$— $221 $445,907 $212,472 $5,237 $663,837 
Net income— — — 42,632 — 42,632 
Other comprehensive loss— — — — (58,334)(58,334)
Common dividends declared ($0.58 per share)
— — — (12,934)— (12,934)
Common stock repurchased— (1)(1,108)— — (1,109)
Share-based compensation expense— — 1,046 — — 1,046 
Issuance of common stock under employee benefit plans— 1 1,049 — — 1,050 
Balances, June 30, 2022$— $221 $446,894 $242,170 $(53,097)$636,188 
The accompanying notes are an integral part of the consolidated financial statements.
6
Table of Contents
MIDLAND STATES BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS — (UNAUDITED)
(dollars in thousands)
Six Months Ended June 30,
20232022
Cash flows from operating activities:
Net income$43,347 $42,632 
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses9,014 9,608 
Depreciation on premises and equipment2,419 2,445 
Amortization of intangible assets2,499 2,716 
Amortization of operating lease right-of-use asset844 904 
Amortization of loan servicing rights172 1,507 
Share-based compensation expense1,192 1,046 
Increase in cash surrender value of life insurance(1,767)(1,671)
Gain on proceeds from company-owned life insurance— (188)
Investment securities (accretion) amortization, net(808)1,440 
Loss on sales of investment securities, net1,517 101 
Gain on repurchase of subordinated debt(676)— 
Gain on sales of other real estate owned(819)120 
Impairment on other real estate owned— 404 
Origination of loans held for sale(27,259)(100,806)
Proceeds from sales of loans held for sale34,344 203,545 
Gain on sale of loans held for sale(1,144)(799)
Impairment on commercial mortgage servicing rights— 1,263 
Net change in operating assets and liabilities:
Accrued interest receivable(687)2,954 
Other assets(11,430)(17,039)
Accrued expenses and other liabilities9,995 4,295 
Net cash provided by operating activities60,753 154,477 
Cash flows from investing activities:
Purchases of investment securities available for sale(245,744)(99,882)
Proceeds from sales of investment securities available for sale99,960 107,740 
Maturities and payments on investment securities available for sale29,455 53,329 
Purchases of equity securities(192)(379)
Proceeds from sales of equity securities5,148 — 
Net increase in loans(76,502)(634,229)
Purchases of premises and equipment(4,688)(928)
Proceeds from sale of premises and equipment50 143 
Purchases of nonmarketable equity securities(66,572)(1,860)
Proceeds from redemptions of nonmarketable equity securities65,897 2,500 
Proceeds from sales of other real estate owned7,346 505 
Proceeds from settlements of company-owned life insurance— 1,337 
Net cash acquired in acquisitions— 60,275 
Net cash used in investing activities(185,842)(511,449)
Cash flows from financing activities:
Net increase (decrease) in deposits61,896 (6,004)
Net decrease in short-term borrowings(20,528)(9,114)
Proceeds from FHLB borrowings11,246,000 700,000 
Payments made on FHLB borrowings and other borrowings(11,131,000)(725,000)
Payments made on subordinated debt(5,845)— 
Cash dividends paid on preferred stock(4,456)— 
Cash dividends paid on common stock(13,408)(12,934)
Redemption of Series G preferred stock— (171)
Common stock repurchased(8,967)(1,109)
Proceeds from issuance of common stock under employee benefit plans1,461 1,050 
Net cash provided by (used in) financing activities125,153 (53,282)
Net increase (decrease) in cash and cash equivalents64 (410,254)
Cash and cash equivalents:
Beginning of period160,631 680,371 
End of period$160,695 $270,117 
Supplemental disclosures of cash flow information:
Cash payments for:
Interest paid on deposits and borrowed funds$69,828 $13,746 
Income tax paid (net of refunds)11,024 16,606 
Supplemental disclosures of noncash investing and financing activities:
Transfer of loans to loans held for sale— 74,997 
Transfer of loans to other real estate owned— 102 
Right of use assets obtained in exchange for lease obligations1,348 121 
Transfer of loan servicing rights held for sale to loan servicing rights, at lower of cost or market20,745 — 
The accompanying notes are an integral part of the consolidated financial statements.
7
Table of Contents
MIDLAND STATES BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (UNAUDITED)
NOTE 1 – BUSINESS DESCRIPTION
Midland States Bancorp, Inc. (the “Company,” “we,” “our,” or “us”) is a diversified financial holding company headquartered in Effingham, Illinois. Our wholly owned banking subsidiary, Midland States Bank (the “Bank”), has branches across Illinois and in Missouri, and provides a full range of commercial and consumer banking products and services, business equipment financing, merchant credit card services, trust and investment management services, and insurance and financial planning services.
Our principal business activity has been lending to and accepting deposits from individuals, businesses, municipalities and other entities. We have derived income principally from interest charged on loans and, to a lesser extent, from interest and dividends earned on investment securities. We have also derived income from noninterest sources, such as: fees received in connection with various lending and deposit services; wealth management services; commercial Federal Housing Administration ("FHA") mortgage loan servicing; residential mortgage loan originations, sales and servicing; and, from time to time, gains on sales of assets. Our principal expenses include interest expense on deposits and borrowings, operating expenses, such as salaries and employee benefits, occupancy and equipment expenses, data processing costs, professional fees and other noninterest expenses, provisions for credit losses and income tax expense.
NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and conform to predominant practices within the banking industry. Management of the Company has made a number of estimates and assumptions related to the reporting of assets and liabilities to prepare the consolidated financial statements in conformity with GAAP. Actual results may differ from those estimates. In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation of the results of operations for annual periods presented herein, have been included. Certain reclassifications of 2022 amounts have been made to conform to the 2023 presentation but do not have an effect on net income or shareholders’ equity.
Principles of Consolidation
The consolidated financial statements include the accounts of the parent company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. Assets held for customers in a fiduciary or agency capacity, other than trust cash on deposit with the Bank, are not assets of the Company and, accordingly, are not included in the accompanying consolidated financial statements.
Accounting Guidance Adopted in 2023
FASB ASU No. 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures – In March 2022, the FASB issued ASU No. 2022-02, which 1) eliminates the accounting guidance for troubled debt restructurings ("TDRs") by creditors while enhancing the disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty; and 2) requires that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases. ASU 2022-02 is effective for fiscal years beginning after December 15, 2022 and the amendments should be applied prospectively, although the entity has the option to apply a modified retrospective transition method for the recognition and measurement of TDRs, resulting in a cumulative-effect adjustment to retained earnings in the period of adoption. The Company adopted this guidance on January 1, 2023 and elected to apply on a prospective basis. The adoption of this accounting pronouncement did not have an impact on the consolidated financial statements aside from additional and revised disclosures.
Accounting Guidance Issued But Not Yet Adopted
FASB ASU No. 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting – In March 2020, the FASB issued ASU No. 2020-04, allowing for optional expedients and exceptions for accounting related to contracts, hedging relationships and other transactions, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The objective of the guidance in Topic 848 is to provide relief during the temporary transition period, so the FASB included a sunset provision based on the expectations of when LIBOR would cease being published. In 2021, the UK Financial Conduct Authority delayed the intended cessation date of certain tenors of LIBOR to June 30, 2023.
8
Table of Contents
In December 2022, to ensure the relief in Topic 848 covers the period of time during which a significant number of modifications may take place, the FASB issued ASU No. 2022-06, which defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848.
The Company has been monitoring its volume of commercial loans tied to LIBOR. In 2021, the Company began prioritizing SOFR as the preferred alternative reference rate with plans to cease booking LIBOR based commitments after the end of 2021. Loans with a maturity after June 2023 are being reviewed and monitored to ensure there is appropriate fallback language in place when LIBOR is no longer published. Loans with a maturity date before that time should naturally mature and be re-underwritten with the alternative index rate.
The Company believes the adoption of this guidance will not have a material impact on the consolidated financial statements.
NOTE 3 – INVESTMENT SECURITIES
Investment Securities Available for Sale
Investment securities available for sale at June 30, 2023 and December 31, 2022 were as follows:
June 30, 2023
(dollars in thousands)Amortized
cost		Gross
unrealized
gains		Gross
unrealized
losses		Fair
value
Investment securities available for sale
U.S. Treasury securities$46,636 $— $3,890 $42,746 
U.S. government sponsored entities and U.S. agency securities
77,510 — 4,052 73,458 
Mortgage-backed securities - agency612,214 640 74,220 538,634 
Mortgage-backed securities - non-agency69,921 — 4,010 65,911 
State and municipal securities64,481 8 6,995 57,494 
Collateralized loan obligations22,709 — — 22,709 
Corporate securities95,172 — 13,409 81,763 
Total available for sale securities$988,643 $648 $106,576 $882,715 

December 31, 2022
(dollars in thousands)Amortized
cost		Gross
unrealized
gains		Gross
unrealized
losses		Fair
value
Investment securities available for sale
U.S. Treasury securities$86,313 $113 $5,196 $81,230 
U.S. government sponsored entities and U.S. agency securities41,775 71 4,337 37,509 
Mortgage-backed securities - agency522,028 268 74,146 448,150 
Mortgage-backed securities - non-agency24,922 — 4,168 20,754 
State and municipal securities102,719 149 8,232 94,636 
Corporate securities95,266 — 9,311 85,955 
Total available for sale securities$873,023 $601 $105,390 $768,234 
The following is a summary of the amortized cost and fair value of the investment securities available for sale, by maturity, at June 30, 2023. Expected maturities may differ from contractual maturities in mortgage-backed securities because
9
Table of Contents
the mortgages underlying the securities may be prepaid without penalties. The maturities of all other investment securities available for sale are based on final contractual maturity.
(dollars in thousands)Amortized
cost		Fair
value
Investment securities available for sale
Within one year$23,829 $23,763 
After one year through five years144,513 136,304 
After five years through ten years48,352 42,895 
After ten years89,814 75,208 
Mortgage-backed securities682,135 604,545 
Total available for sale securities$988,643 $882,715 
    
Proceeds and gross realized gains and losses on sales of investment securities available for sale for the three and six months ended June 30, 2023 and 2022 are summarized as follows:
Three Months Ended June 30,Six Months Ended June 30,
(dollars in thousands)2023202220232022
Investment securities available for sale
Proceeds from sales$15,467 $107,740 $99,960 $107,740 
Gross realized gains on sales— 716 338 716 
Gross realized losses on sales(869)(817)(1,855)(817)
Unrealized losses and fair values for investment securities available for sale as of June 30, 2023 and December 31, 2022, for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are summarized as follows:
June 30, 2023
Less than 12 Months12 Months or moreTotal
(dollars in thousands)Fair
value		Unrealized
loss		Fair
value		Unrealized
loss		Fair
value		Unrealized
loss
Investment securities available for sale
U.S. Treasury securities$970 $11 $41,776 $3,879 $42,746 $3,890 
U.S. government sponsored entities and U.S. agency securities49,365 171 24,093 3,881 73,458 4,052 
Mortgage-backed securities - agency124,341 2,251 363,472 71,969 487,813 74,220 
Mortgage-backed securities - non-agency21,926 141 20,147 3,869 42,073 4,010 
State and municipal securities8,905 201 46,959 6,794 55,864 6,995 
Corporate securities3,164 336 78,599 13,073 81,763 13,409 
Total available for sale securities$208,671 $3,111 $575,046 $103,465 $783,717 $106,576 
10
Table of Contents
December 31, 2022
Less than 12 Months12 Months or moreTotal
(dollars in thousands)Fair
value		Unrealized
loss		Fair
value		Unrealized
loss		Fair
value		Unrealized
loss
Investment securities available for sale
U.S. Treasury securities$1,839 $24 $59,865 $5,172 $61,704 $5,196 
U.S. government sponsored entities and U.S. agency securities10,288 40 23,453 4,297 33,741 4,337 
Mortgage-backed securities - agency152,657 9,736 273,353 64,410 426,010 74,146 
Mortgage-backed securities - non-agency1,924 270 18,830 3,898 20,754 4,168 
State and municipal securities35,603 1,662 41,538 6,570 77,141 8,232 
Corporate securities39,595 3,400 46,360 5,911 85,955 9,311 
Total available for sale securities$241,906 $15,132 $463,399 $90,258 $705,305 $105,390 
    At June 30, 2023, 320 investment securities available for sale had unrealized losses with aggregate depreciation of 11.93% from their amortized cost basis. For all of the above investment securities, the unrealized losses were generally due to changes in interest rates, and unrealized losses were considered to be temporary as the fair value is expected to recover as the securities approach their respective maturity dates. The issuers are of high credit quality and all principal amounts are expected to be paid when securities mature. The Company does not intend to sell and it is likely that the Company will not be required to sell the securities prior to their anticipated recovery.
NOTE 4 – LOANS
The following table presents total loans outstanding by portfolio class, as of June 30, 2023 and December 31, 2022:
(dollars in thousands)June 30,
2023		December 31,
2022
Commercial:
Commercial$875,295 $786,877 
Commercial other732,616 727,697 
Commercial real estate:
Commercial real estate non-owner occupied1,647,680 1,591,399 
Commercial real estate owner occupied453,514 496,786 
Multi-family273,939 277,889 
Farmland68,862 67,085 
Construction and land development366,631 320,882 
Total commercial loans4,418,537 4,268,615 
Residential real estate:
Residential first lien311,796 304,243 
Other residential59,690 61,851 
Consumer:
Consumer108,619 105,880 
Consumer other968,217 1,074,134 
Lease financing500,485 491,744 
Total loans$6,367,344 $6,306,467 
Total loans include net deferred loan costs of $5.7 million and $4.4 million at June 30, 2023 and December 31, 2022, respectively, and unearned discounts of $67.5 million and $62.6 million within the lease financing portfolio at June 30, 2023 and December 31, 2022, respectively.
At June 30, 2023, the Company had residential real estate loans held for sale totaling $5.6 million, compared to $1.3 million at December 31, 2022. The Company sold loans and leases with proceeds totaling $28.0 million and $34.3 million during the three and six months ended June 30, 2023, respectively, and $100.4 million and $203.5 million during the three and six months ended June 30, 2022, respectively.
11
Table of Contents
Classifications of Loan Portfolio
The Company monitors and assesses the credit risk of its loan portfolio using the classes set forth below. These classes also represent the segments by which the Company monitors the performance of its loan portfolio and estimates its allowance for credit losses on loans.
Commercial—Loans to varying types of businesses, including municipalities, school districts and nonprofit organizations, for the purpose of supporting working capital, operational needs and term financing of equipment. Repayment of such loans is generally provided through operating cash flows of the business. Commercial loans are predominately secured by equipment, inventory, accounts receivable, and other sources of repayment. Commercial FHA warehouse lines of $30.5 million and $25.0 million as of June 30, 2023 and December 31, 2022, respectively, were included in this classification.
Commercial real estate—Loans secured by real estate occupied by the borrower for ongoing operations, including loans to borrowers engaged in agricultural production, and non-owner occupied real estate leased to one or more tenants, including commercial office, industrial, special purpose, retail and multi-family residential real estate loans.
Construction and land development—Secured loans for the construction of business and residential properties. Real estate construction loans often convert to a real estate commercial loan at the completion of the construction period. Secured development loans are made to borrowers for the purpose of infrastructure improvements to vacant land to create finished marketable residential and commercial lots/land. Most land development loans are originated with the intention that the loans will be paid through the sale of developed lots/land by the developers within twelve months of the completion date. Interest reserves may be established on real estate construction loans.
Residential real estate—Loans secured by residential properties that generally do not qualify for secondary market sale; however, the risk to return and/or overall relationship are considered acceptable to the Company. This category also includes loans whereby consumers utilize equity in their personal residence, generally through a second mortgage, as collateral to secure the loan.
Consumer—Loans to consumers primarily for the purpose of home improvements or acquiring automobiles, recreational vehicles and boats. Consumer loans consist of relatively small amounts that are spread across many individual borrowers.
Lease financing—Our equipment leasing business provides financing leases to varying types of businesses, nationwide, for purchases of business equipment and software. The financing is secured by a first priority interest in the financed assets and generally requires monthly payments.
Commercial, commercial real estate, and construction and land development loans are collectively referred to as the Company’s commercial loan portfolio, while residential real estate, consumer loans and lease financing receivables are collectively referred to as the Company’s other loan portfolio.
We have extended loans to certain of our directors, executive officers, principal shareholders and their affiliates. These loans were made in the ordinary course of business upon substantially the same terms, including collateralization and interest rates prevailing at the time. The aggregate loans outstanding to the Company's directors, executive officers, principal shareholders and their affiliates totaled $21.6 million and $19.8 million at June 30, 2023 and December 31, 2022, respectively. The new loans, other additions, repayments and other reductions for the three and six months ended June 30, 2023 and 2022, are summarized as follows:
Three Months Ended June 30,Six Months Ended June 30,
(dollars in thousands)2023202220232022
Beginning balance$19,519 $23,374 $19,776 $13,869 
New loans and other additions2,367 — 2,367 9,805 
Repayments and other reductions(317)(277)(574)(577)
Ending balance$21,569 $23,097 $21,569 $23,097 

12
Table of Contents
The following table represents, by loan portfolio segment, a summary of changes in the allowance for credit losses on loans for the three and six months ended June 30, 2023 and 2022:
Commercial Loan PortfolioOther Loan Portfolio
(dollars in thousands)CommercialCommercial
real
estate		Construction
and land
development		Residential
real
estate		ConsumerLease
financing		Total
Changes in allowance for credit losses on loans for the three months ended June 30, 2023:
Balance, beginning of period$15,762 $28,216 $2,442 $4,350 $4,129 $7,168 $62,067 
Provision for credit losses on loans196 2,427 1,049 1,207 4 996 5,879 
Charge-offs(1,071)(1,544)(334)(54)(260)(771)(4,034)
Recoveries403 326 32 48 80 149 1,038 
Balance, end of period$15,290 $29,425 $3,189 $5,551 $3,953 $7,542 $64,950 
Changes in allowance for credit losses on loans for the six months ended June 30, 2023:
Balance, beginning of period$14,639 $29,290 $2,435 $4,301 $3,599 $6,787 $61,051 
Provision for credit losses on loans2,194 2,097 1,056 1,270 704 1,693 9,014 
Charge-offs(2,040)(2,290)(334)(85)(523)(1,161)(6,433)
Recoveries497 328 32 65 173 223 1,318 
Balance, end of period$15,290 $29,425 $3,189 $5,551 $3,953 $7,542 $64,950 
Changes in allowance for credit losses on loans for the three months ended June 30, 2022:
Balance, beginning of period$12,621 $26,277 $816 $3,288 $2,672 $7,264 $52,938 
Provision for credit losses on loans(111)4,284 279 133 415 (259)4,741 
Charge-offs(60)(2,625)— (46)(191)(499)(3,421)
Recoveries298 (62)6 41 98 259 640 
Balance, end of period$12,748 $27,874 $1,101 $3,416 $2,994 $6,765 $54,898 
Changes in allowance for credit losses on loans for the six months ended June 30, 2022:
Balance, beginning of period$14,375 $22,993 $972 $2,695 $2,558 $7,469 $51,062 
Provision for credit losses on loans278 7,728 123 717 672 (645)8,873 
Charge-offs(2,214)(2,852)(6)(150)(496)(705)(6,423)
Recoveries309 5 12 154 260 646 1,386 
Balance, end of period$12,748 $27,874 $1,101 $3,416 $2,994 $6,765 $54,898 
The Company utilizes a combination of models which measure probability of default and loss given default methodology in determining expected future credit losses.
The probability of default is the risk that the borrower will be unable or unwilling to repay its debt in full or on time. The risk of default is derived by analyzing the obligor’s capacity to repay the debt in accordance with contractual terms. Probability of default is generally associated with financial characteristics such as inadequate cash flow to service debt, declining revenues or operating margins, high leverage, declining or marginal liquidity, and the inability to successfully implement a business plan. In addition to these quantifiable factors, the borrower’s willingness to repay also must be evaluated.
The probability of default is forecasted, for most commercial and retail loans, using a regression model that determines the likelihood of default within the twelve month time horizon. The regression model uses forward-looking economic forecasts including variables such as gross domestic product, housing price index, and real disposable income to predict default rates. The forecasting method for the equipment financing portfolio assumes a rolling twelve-month average of the through-the-cycle default rate, to predict default rates for the twelve month time horizon.
The loss given default component is the percentage of defaulted loan balance that is ultimately charged off. As a method for estimating the allowance, a form of migration analysis is used that combines the estimated probability of loans experiencing default events and the losses ultimately associated with the loans experiencing those defaults. Multiplying one by
13
Table of Contents
the other gives the Company its loss rate, which is then applied to the loan portfolio balance to determine expected future losses.
Within the model, the loss given default approach produces segmented loss given default estimates using a loss curve methodology, which is based on historical net losses from charge-off and recovery information. The main principle of a loss curve model is that the loss follows a steady timing schedule based on how long the defaulted loan has been on the books.
The Company’s expected loss estimate is anchored in historical credit loss experience, with an emphasis on all available portfolio data. The Company’s historical look-back period includes January 2012 through the current period on a monthly basis. When historical credit loss experience is not sufficient for a specific portfolio, the Company may supplement its own portfolio data with external models or data.
Historical data is evaluated in multiple components of the expected credit loss, including the reasonable and supportable forecast and the post-reversion period of each loan segment. The historical experience is used to infer probability of default and loss given default in the reasonable and supportable forecast period. In the post-reversion period, long-term average loss rates are segmented by loan pool.
Qualitative reserves reflect management’s overall estimate of the extent to which current expected credit losses on collectively evaluated loans will differ from historical loss experience. The analysis takes into consideration other analytics performed within the organization, such as enterprise and concentration management, along with other credit-related analytics as deemed appropriate. Management attempts to quantify qualitative reserves whenever possible.
The Company segments the loan portfolio into pools based on the following risk characteristics: financial asset type, collateral type, loan characteristics, credit characteristics, outstanding loan balances, contractual terms and prepayment assumptions, industry of borrower and concentrations, historical or expected credit loss patterns, and reasonable and supportable forecast periods.
Within the probability of default segmentation, credit metrics are identified to further segment the financial assets. The Company utilizes risk ratings for the commercial portfolios and days past due for the consumer and the lease financing portfolios.
The Company has defined five transitioning risk states for each asset pool within the expected credit loss model. The below table illustrates the transition matrix:
Risk stateCommercial loans
risk rating		Consumer loans and
equipment finance loans and leases
days past due
10-5
0-14
26
15-29
37
30-59
48
60-89
Default9+ and nonaccrual
90+ and nonaccrual
Expected Credit Losses
In calculating expected credit losses, the Company individually evaluates loans on nonaccrual status with a balance greater than $500,000, loans past due 90 days or more and still accruing interest, and loans that do not share risk characteristics
14
Table of Contents
with other loans in the pool. The following table presents amortized cost basis of individually evaluated loans on nonaccrual status as of June 30, 2023 and December 31, 2022:
June 30, 2023December 31, 2022
(dollars in thousands)Nonaccrual with allowanceNonaccrual with no allowanceTotal nonaccrualNonaccrual with allowanceNonaccrual with no allowanceTotal nonaccrual
Commercial:
Commercial$1,604 $969 $2,573 $1,910 $1,111 $3,021 
Commercial other3,537 — 3,537 3,169 — 3,169 
Commercial real estate:
Commercial real estate non-owner occupied12,016 9,092 21,108 1,345 11,899 13,244 
Commercial real estate owner occupied2,741 11,647 14,388 7,118 — 7,118 
Multi-family269 2,673 2,942 154 8,949 9,103 
Farmland172 — 172 25 — 25 
Construction and land development2,234 — 2,234 202 — 202 
Total commercial loans22,573 24,381 46,954 13,923 21,959 35,882 
Residential real estate:
Residential first lien2,865 559 3,424 2,925 572 3,497 
Other residential495 — 495 871 — 871 
Consumer:
Consumer97 — 97 120 — 120 
Lease financing3,413 — 3,413 1,606 — 1,606 
Total loans$29,443 $24,940 $54,383 $19,445 $22,531 $41,976 
    There was no interest income recognized on nonaccrual loans during the three and six months ended June 30, 2023 and 2022 while the loans were in nonaccrual status. Additional interest income that would have been recorded on nonaccrual loans had they been current in accordance with their original terms was $0.8 million and $1.6 million for the three and six months ended June 30, 2023 and $0.5 million and $1.3 million for the three and six months ended June 30, 2022, respectively.
Collateral Dependent Financial Assets
A collateral dependent financial loan relies solely on the operation or sale of the collateral for repayment. In evaluating the overall risk associated with a loan, the Company considers character, overall financial condition and resources, and payment record of the borrower; the prospects for support from any financially responsible guarantors; and the nature and degree of
15
Table of Contents
protection provided by the cash flow and value of any underlying collateral. However, as other sources of repayment become inadequate over time, the significance of the collateral’s value increases and the loan may become collateral dependent.
The table below presents the value of individually evaluated, collateral dependent loans by loan class, for borrowers experiencing financial difficulty, as of June 30, 2023 and December 31, 2022:
Type of Collateral
(dollars in thousands)Real EstateBlanket LienEquipmentTotal
June 30, 2023
Commercial:
Commercial$2,053 $969 $— $3,022 
Commercial real estate:
Non-owner occupied19,401 — — 19,401 
Owner occupied11,637 — — 11,637 
Multi-family2,674 — — 2,674 
Lease financing— — 955 955 
Total collateral dependent loans$35,765 $969 $955 $37,689 
December 31, 2022
Commercial:
Commercial$— $1,604 $— $1,604 
Commercial real estate:
Non-owner occupied13,033 — — 13,033 
Owner occupied3,874 — — 3,874 
Multi-family8,950 — — 8,950 
Residential real estate
Residential first lien220 — — 220 
Total collateral dependent loans$26,077 $1,604 $— $27,681 

16
Table of Contents
The aging status of the recorded investment in loans by portfolio as of June 30, 2023 was as follows:
Accruing loans
(dollars in thousands)30-59
days
past due		60-89 days past duePast due
90 days
or more		Total
past due		NonaccrualCurrentTotal
Commercial:
Commercial$5,880 $5,554 $— $11,434 $2,573 $861,288 $875,295 
Commercial other8,921 3,503 71 12,495 3,537 716,584 732,616 
Commercial real estate:
Commercial real estate non-owner occupied
5 23 — 28 21,108 1,626,544 1,647,680 
Commercial real estate owner occupied107 — — 107 14,388 439,019 453,514 
Multi-family— — — — 2,942 270,997 273,939 
Farmland152 — — 152 172 68,538 68,862 
Construction and land development200 — — 200 2,234 364,197 366,631 
Total commercial loans15,265 9,080 71 24,416 46,954 4,347,167 4,418,537 
Residential real estate:
Residential first lien6 115 36 157 3,424 308,215 311,796 
Other residential39 33 — 72 495 59,123 59,690 
Consumer:
Consumer405 31 — 436 97 108,086 108,619 
Consumer other5,717 3,844 — 9,561 — 958,656 968,217 
Lease financing5,161 4,465 354 9,980 3,413 487,092 500,485 
Total loans$26,593 $17,568 $461 $44,622 $54,383 $6,268,339 $6,367,344 
The aging status of the recorded investment in loans by portfolio as of December 31, 2022 was as follows:
Accruing loans
(dollars in thousands)30-59
days
past due		60-89
days
past due		Past due
90 days
or more		Total
past due		NonaccrualCurrentTotal
Commercial:
Commercial$7 $112 $— $119 $3,021 $783,737 $786,877 
Commercial other6,035 2,365 — 8,400 3,169 716,128 727,697 
Commercial real estate:
Commercial real estate non-owner occupied1,008 999 — 2,007 13,244 1,576,148 1,591,399 
Commercial real estate owner occupied73 — — 73 7,118 489,595 496,786 
Multi-family— — — — 9,103 268,786 277,889 
Farmland— — — — 25 67,060 67,085 
Construction and land development— 6,000 — 6,000 202 314,680 320,882 
Total commercial loans7,123 9,476 — 16,599 35,882 4,216,134 4,268,615 
Residential real estate:
Residential first lien82 456 428 966 3,497 299,780 304,243 
Other residential188 13 — 201 871 60,779 61,851 
Consumer:
Consumer139 18 12 169 120 105,591 105,880 
Consumer other5,381 3,559 733 9,673 — 1,064,461 1,074,134 
Lease financing4,415 1,522 — 5,937 1,606 484,201 491,744 
Total loans$17,328 $15,044 $1,173 $33,545 $41,976 $6,230,946 $6,306,467 
17
Table of Contents
Loan Restructurings
The Company adopted the accounting guidance in ASU No. 2022-02, effective as of January 1, 2023, which eliminates the recognition and measurement of a troubled debt restructuring ("TDR"). Due to the removal of the TDR designation, the Company evaluates all loan restructurings according to the accounting guidance for loan modifications to determine if the restructuring results in a new loan or a continuation of the existing loan. Loan modifications to borrowers experiencing financial difficulties that result in a direct change in the timing or amount of contractual cash flows include situations where there is principal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions, and combinations of the listed modifications. Therefore, the disclosures related to loan restructurings are for modifications which have a direct impact on cash flows.
The Company may offer various types of concessions when modifying a loan. Commercial and industrial loans modified in a loan restructuring often involve temporary interest-only payments, term extensions, and converting revolving credit lines to term loans. Additional collateral, a co-borrower, or a guarantor is often requested.
Loans modified in a loan restructuring for the Company may have the financial effect of increasing the specific allowance associated with the loan. An allowance for loans that have been modified in a loan restructuring is measured based on the probability of default and loss given default model, the loan's observable market price, or the estimated fair value of the collateral, less any selling costs, if the loan is collateral dependent. Management exercises significant judgment in developing these estimates.
Commercial and consumer loans modified in a loan restructuring are closely monitored for delinquency as an early indicator of possible future default. If loans modified in a loan restructuring subsequently default, the Company evaluates the loan for possible further loss. The allowance may be increased, adjustments may be made in the allocation of the allowance, or partial charge-offs may be taken to further write-down the carrying value of the loan.
In some cases, the Company will modify a loan by providing multiple types of concessions. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession such as an interest rate reduction or principal forgiveness, may be granted. During the three months ended June 30, 2023 the Company restructured three loans for borrowers experiencing financial difficulties with principal balances totaling $0.5 million. Two of the restructured loans were provided a term extension with the other receiving an interest rate reduction and a term extension. During the six months ended June 30, 2023 the Company restructured five loans for borrowers experiencing financial difficulties with principal balances totaling $0.6 million. Three of the restructured loans were provided a term extension with the other two receiving an interest rate reduction and a term extension.
Credit Quality Monitoring
The Company maintains loan policies and credit underwriting standards as part of the process of managing credit risk. These standards include making loans generally within the Company’s four main regions, which include eastern, northern and southern Illinois and the St. Louis metropolitan area. In addition, our specialty finance division does nationwide bridge lending for FHA and HUD developments and originates loans for multifamily, assisted and senior living and multi-use properties. Our equipment leasing business provides financing to business customers across the country.
The Company has a loan approval process involving underwriting and individual and group loan approval authorities to consider credit quality and loss exposure at loan origination. The loans in the Company’s commercial loan portfolio are risk rated at origination based on the grading system set forth below. All loan authority is based on the aggregate credit to a borrower and its related entities.
The Company’s consumer loan portfolio is primarily comprised of both secured and unsecured loans that are relatively small and are evaluated at origination on a centralized basis against standardized underwriting criteria. The ongoing measurement of credit quality of the consumer loan portfolio is largely done on an exception basis. If payments are made on schedule, as agreed, then no further monitoring is performed. However, if delinquency occurs, the delinquent loans are turned over to the Company’s Consumer Collections Group for resolution. Credit quality for the entire consumer loan portfolio is measured by the periodic delinquency rate, nonaccrual amounts and actual losses incurred.
Loans in the commercial loan portfolio tend to be larger and more complex than those in the other loan portfolio, and therefore, are subject to more intensive monitoring. All loans in the commercial loan portfolio have an assigned relationship manager, and most borrowers provide periodic financial and operating information that allows the relationship managers to stay abreast of credit quality during the life of the loans. The risk ratings of loans in the commercial loan portfolio are reassessed at
18
Table of Contents
least annually, with loans below an acceptable risk rating reassessed more frequently and reviewed by various individuals within the Company at least quarterly.
The Company maintains a centralized independent loan review function that monitors the approval process and ongoing asset quality of the loan portfolio, including the accuracy of loan grades. The Company also maintains an independent appraisal review function that participates in the review of all appraisals obtained by the Company.
Credit Quality Indicators
The Company uses a ten grade risk rating system to monitor the ongoing credit quality of its commercial loan portfolio. These loan grades rank the credit quality of a borrower by measuring liquidity, debt capacity, and coverage and payment behavior as shown in the borrower’s financial statements. The risk grades also measure the quality of the borrower’s management and the repayment support offered by any guarantors.
The Company considers all loans with Risk Grades 1 - 6 as acceptable credit risks and structures and manages such relationships accordingly. Periodic financial and operating data combined with regular loan officer interactions are deemed adequate to monitor borrower performance. Loans with Risk Grades of 7 are considered "watch credits" categorized as special mention and the frequency of loan officer contact and receipt of financial data is increased to stay abreast of borrower performance. Loans with Risk Grades of 8 - 10 are considered problematic and require special care. Risk Grade 8 is categorized as substandard, 9 as substandard - nonaccrual and 10 as doubtful. Further, loans with Risk Grades of 7 - 10 are managed regularly through a number of processes, procedures and committees, including oversight by a loan administration committee comprised of executive and senior management of the Company, which includes highly structured reporting of financial and operating data, intensive loan officer intervention and strategies to exit, as well as potential management by the Company's Special Assets Group. Loans not graded in the commercial loan portfolio are monitored by aging status and payment activity.

19
Table of Contents
The following tables present the recorded investment of the commercial loan portfolio by risk category as of June 30, 2023 and December 31, 2022:
June 30, 2023
Term Loans
Amortized Cost Basis by Origination Year
(dollars in thousands)20232022202120202019PriorRevolving loansTotal
CommercialCommercialAcceptable credit quality$123,578 $115,893 $92,140 $51,929 $17,118 $51,141 $383,336 $835,135 
Special mention— 500 8,030 — 296 176 332 9,334 
Substandard4,063 13,294 999 — 171 5,238 4,488 28,253 
Substandard – nonaccrual— — 332 — 84 457 1,700 2,573 
Doubtful— — — — — — — — 
Not graded— — — — — — — — 
Subtotal127,641 129,687 101,501 51,929 17,669 57,012 389,856 875,295 
Commercial otherAcceptable credit quality157,807 227,700 125,632 81,135 47,722 9,229 76,954 726,179 
Special mention— 543 135 278 192 13 50 1,211 
Substandard40 250 — — — — 893 1,183 
Substandard – nonaccrual326 977 837 710 579 108 — 3,537 
Doubtful— — — — — — — — 
Not graded— 506 — — — — — 506 
Subtotal158,173 229,976 126,604 82,123 48,493 9,350 77,897 732,616 
Commercial real estateNon-owner occupiedAcceptable credit quality103,887 681,398 382,913 138,251 84,869 144,947 7,196 1,543,461 
Special mention— — 183 467 162 12,408 — 13,220 
Substandard— 2,272 — — 35,314 32,305 — 69,891 
Substandard – nonaccrual— — 676 999 7,602 11,831 — 21,108 
Doubtful— — — — — — — — 
Not graded— — — — — — — — 
Subtotal103,887 683,670 383,772 139,717 127,947 201,491 7,196 1,647,680 
Owner occupiedAcceptable credit quality27,962 104,832 115,917 53,849 24,524 89,082 1,108 417,274 
Special mention— — 131 — 81 276 15 503 
Substandard— 7,729 268 72 740 12,540 — 21,349 
Substandard – nonaccrual159 9,663 2,436 197 143 1,486 304 14,388 
Doubtful— — — — — — — — 
Not graded— — — — — — — — 
Subtotal28,121 122,224 118,752 54,118 25,488 103,384 1,427 453,514 
Multi-familyAcceptable credit quality663 165,156 26,223 28,464 10,318 21,882 171 252,877 
Special mention— — — — — 14,621 — 14,621 
Substandard— — — — — 3,499 — 3,499 
Substandard – nonaccrual— — 899 — 107 1,936 — 2,942 
Doubtful— — — — — — — — 
Not graded— — — — — — — — 
Subtotal663 165,156 27,122 28,464 10,425 41,938 171 273,939 
FarmlandAcceptable credit quality8,743 6,042 15,432 12,891 3,888 19,614 1,452 68,062 
Special mention— — — — — 96 — 96 
Substandard— — 14 — 22 344 152 532 
Substandard – nonaccrual— — — — — 124 48 172 
Doubtful— — — — — — — — 
Not graded— — — — — — — — 
Subtotal8,743 6,042 15,446 12,891 3,910 20,178 1,652 68,862 
Construction and land developmentAcceptable credit quality28,311 189,923 100,265 1,236 674 1,232 34,325 355,966 
Special mention— — — — — 60 — 60 
Substandard— — 6,000 — — — — 6,000 
Substandard – nonaccrual— — — — 176 2,058 — 2,234 
Doubtful— — — — — — — — 
Not graded453 1,512 372 7 — 27 — 2,371 
Subtotal28,764 191,435 106,637 1,243 850 3,377 34,325 366,631 
TotalAcceptable credit quality450,951 1,490,944 858,522 367,755 189,113 337,127 504,542 4,198,954 
Special mention— 1,043 8,479 745 731 27,650 397 39,045 
Substandard4,103 23,545 7,281 72 36,247 53,926 5,533 130,707 
Substandard – nonaccrual485 10,640 5,180 1,906 8,691 18,000 2,052 46,954 
Doubtful— — — — — — — — 
Not graded453 2,018 372 7 — 27 — 2,877 
Total commercial loans$455,992 $1,528,190 $879,834 $370,485 $234,782 $436,730 $512,524 $4,418,537 
20
Table of Contents
December 31, 2022
Term Loans
Amortized Cost Basis by Origination Year
(dollars in thousands)20222021202020192018PriorRevolving loansTotal
CommercialCommercialAcceptable credit quality$111,087 $102,966 $61,751 $28,063 $12,547 $45,168 $404,100 $765,682 
Special mention3,559 2,106 — 227 551 3,154 159 9,756 
Substandard— — — 206 1,722 3,915 2,575 8,418 
Substandard – nonaccrual— 340 — 132 83 246 2,220 3,021 
Doubtful— — — — — — — — 
Not graded— — — — — — — — 
Subtotal114,646 105,412 61,751 28,628 14,903 52,483 409,054 786,877 
Commercial otherAcceptable credit quality283,465 153,788 105,980 64,218 15,459 163 96,509 719,582 
Special mention— — 754 2,331 455 — 55 3,595 
Substandard250 — — 12 80 — 848 1,190 
Substandard – nonaccrual524 1,247 444 463 491 — — 3,169 
Doubtful— — — — — — — — 
Not graded161 — — — — — — 161 
Subtotal284,400 155,035 107,178 67,024 16,485 163 97,412 727,697 
Commercial real estateNon-owner occupiedAcceptable credit quality679,040 403,952 145,235 72,504 18,249 160,992 4,833 1,484,805 
Special mention1,407 186 477 10,633 195 8,452 — 21,350 
Substandard569 — 7,458 32,731 1,587 29,655 — 72,000 
Substandard – nonaccrual— 701 — 48 10,246 2,249 — 13,244 
Doubtful— — — — — — — — 
Not graded— — — — — — — — 
Subtotal681,016 404,839 153,170 115,916 30,277 201,348 4,833 1,591,399 
Owner occupiedAcceptable credit quality120,141 122,321 64,720 31,916 29,454 88,928 4,305 461,785 
Special mention— 1,161 — 7,917 — 12,161 22 21,261 
Substandard141 272 79 1,984 — 3,771 375 6,622 
Substandard – nonaccrual155 4,165 225 146 333 1,790 304 7,118 
Doubtful— — — — — — — — 
Not graded— — — — — — — — 
Subtotal120,437 127,919 65,024 41,963 29,787 106,650 5,006 496,786 
Multi-familyAcceptable credit quality163,647 31,605 29,458 208 24,490 14,574 1,101 265,083 
Special mention— — — — — — — — 
Substandard— — — — — 3,703 — 3,703 
Substandard – nonaccrual— 927 — 113 — 8,063 — 9,103 
Doubtful— — — — — — — — 
Not graded— — — — — — — — 
Subtotal163,647 32,532 29,458 321 24,490 26,340 1,101 277,889 
FarmlandAcceptable credit quality8,659 16,138 13,467 4,117 3,129 19,102 1,593 66,205 
Special mention— — — — — 159 — 159 
Substandard— 14 — 23 113 347 199 696 
Substandard – nonaccrual— — — — — 25 — 25 
Doubtful— — — — — — — — 
Not graded— — — — — — — — 
Subtotal8,659 16,152 13,467 4,140 3,242 19,633 1,792 67,085 
Construction and land developmentAcceptable credit quality171,243 79,747 10,676 8,388 98 1,420 37,997 309,569 
Special mention— — — — — 210 — 210 
Substandard— 6,000 — — 2,415 — — 8,415 
Substandard – nonaccrual— — — 202 — — — 202 
Doubtful— — — — — — — — 
Not graded2,112 337 8 — — 29 — 2,486 
Subtotal173,355 86,084 10,684 8,590 2,513 1,659 37,997 320,882 
TotalAcceptable credit quality1,537,282 910,517 431,287 209,414 103,426 330,347 550,438 4,072,711 
Special mention4,966 3,453 1,231 21,108 1,201 24,136 236 56,331 
Substandard960 6,286 7,537 34,956 5,917 41,391 3,997 101,044 
Substandard – nonaccrual679 7,380 669 1,104 11,153 12,373 2,524 35,882 
Doubtful— — — — — — — — 
Not graded2,273 337 8 — — 29 — 2,647 
Total commercial loans$1,546,160 $927,973 $440,732 $266,582 $121,697 $408,276 $557,195 $4,268,615 

21
Table of Contents
The following table presents the gross charge-offs by class of loan and year of origination on the commercial loan portfolio for the three and six months ended June 30, 2023:
Term Loans by Origination Year
(dollars in thousands)20232022202120202019PriorRevolving LoansTotal
For the three months ended June 30, 2023
CommercialCommercial$10 $— $— $22 $18 $60 $— $110 
Commercial Other36 649 102 105 69 — — 961 
Commercial Real EstateNon-owner occupied— — — — — — — — 
Owner occupied— — — — — 1,481 — 1,481 
Multi-family— — — — — 63 — 63 
Farmland— — — — — — — — 
Construction and land development
— — — — — 334 — 334 
Total gross commercial charge-offs$46 $649 $102 $127 $87 $1,938 $— $2,949 
For the six months ended June 30, 2023
CommercialCommercial$10 $— $— $22 $27 $71 $— $130 
Commercial Other36 1,208 166 105 69 326 — 1,910 
Commercial Real EstateNon-owner occupied— — — — — — — — 
Owner occupied— — — — — 1,481 — 1,481 
Multi-family— — — — — 809 — 809 
Farmland— — — — — — — — 
Construction and land development
— — — — — 334 — 334 
Total gross commercial charge-offs$46 $1,208 $166 $127 $96 $3,021 $— $4,664 
The Company evaluates the credit quality of its other loan portfolios, which includes residential real estate, consumer and lease financing loans, based primarily on the aging status of the loan and payment activity. Accordingly, loans on nonaccrual status and loans past due 90 days or more and still accruing interest are considered to be nonperforming for purposes
22
Table of Contents
of credit quality evaluation. The following tables present the recorded investment of our other loan portfolio based on the credit risk profile of loans that are performing and loans that are nonperforming as of June 30, 2023 and December 31, 2022:
June 30, 2023
Term Loans
Amortized Cost Basis by Origination Year
(dollars in thousands)20232022202120202019PriorRevolving LoansTotal
Residential real estateResidential first lienPerforming$22,642 $75,091 $38,105 $30,465 $20,236 $121,760 $36 $308,335 
Nonperforming35 50 — 33 356 2,987 — 3,461 
Subtotal22,677 75,141 38,105 30,498 20,592 124,747 36 311,796 
Other residentialPerforming1,241 1,269 443 481 962 2,422 52,378 59,196 
Nonperforming— — — — — 184 310 494 
Subtotal1,241 1,269 443 481 962 2,606 52,688 59,690 
ConsumerConsumerPerforming17,417 28,154 36,165 7,561 2,813 13,851 2,561 108,522 
Nonperforming— 25 3 7 — 59 3 97 
Subtotal17,417 28,179 36,168 7,568 2,813 13,910 2,564 108,619 
Consumer otherPerforming206,635 468,600 185,590 70,858 26,877 6,846 2,811 968,217 
Nonperforming— — — — — — — — 
Subtotal206,635 468,600 185,590 70,858 26,877 6,846 2,811 968,217 
Leases financingPerforming96,561 184,332 92,293 67,347 41,983 14,202 — 496,718 
Nonperforming214 1,723 387 313 633 497 — 3,767 
Subtotal96,775 186,055 92,680 67,660 42,616 14,699 — 500,485 
TotalPerforming344,496 757,446 352,596 176,712 92,871 159,081 57,786 1,940,988 
Nonperforming249 1,798 390 353 989 3,727 313 7,819 
Total other loans$344,745 $759,244 $352,986 $177,065 $93,860 $162,808 $58,099 $1,948,807 
23
Table of Contents
December 31, 2022
Term Loans
Amortized Cost Basis by Origination Year
(dollars in thousands)20222021202020192018PriorRevolving loansTotal
Residential real estateResidential first lienPerforming$75,449 $38,774 $31,566 $20,780 $21,691 $109,067 $336 $297,663 
Nonperforming101 — 104 414 987 4,974 — 6,580 
Subtotal75,550 38,774 31,670 21,194 22,678 114,041 336 304,243 
Other residentialPerforming1,722 496 534 1,060 1,496 1,515 53,159 59,982 
Nonperforming17 — — 7 18 208 1,619 1,869 
Subtotal1,739 496 534 1,067 1,514 1,723 54,778 61,851 
ConsumerConsumerPerforming32,561 40,374 9,411 3,476 2,768 14,756 2,346 105,692 
Nonperforming33 50 7 1 13 79 5 188 
Subtotal32,594 40,424 9,418 3,477 2,781 14,835 2,351 105,880 
Consumer otherPerforming669,015 260,360 92,148 34,501 6,637 5,430 5,310 1,073,401 
Nonperforming733 — — — — — — 733 
Subtotal669,748 260,360 92,148 34,501 6,637 5,430 5,310 1,074,134 
Leases financingPerforming215,084 110,294 84,458 54,684 21,767 3,088 — 489,375 
Nonperforming— 522 736 818 254 39 — 2,369 
Subtotal215,084 110,816 85,194 55,502 22,021 3,127 — 491,744 
Total
Performing993,831 450,298 218,117 114,501 54,359 133,856 61,151 2,026,113 
Nonperforming884 572 847 1,240 1,272 5,300 1,624 11,739 
Total other loans$994,715 $450,870 $218,964 $115,741 $55,631 $139,156 $62,775 $2,037,852 

The following table presents the gross charge-offs by class of loan and year of origination on the other loan portfolio for the three and six months ended June 30, 2023:
Term Loans by Origination Year
(dollars in thousands)20232022202120202019PriorRevolving LoansTotal
For the three months ended June 30, 2023
Residential real estateResidential first lien$— $— $— $3 $7 $— $— $10 
Other residential— — — — — — 44 44 
ConsumerConsumer— — 4 11 26 13 — 54 
Consumer other18 30 7 2 1 148 — 206 
Lease financing— 336 343 52 — 40 — 771 
Total gross other charge-offs$18 $366 $354 $68 $34 $201 $44 $1,085 
For the six months ended June 30, 2023
Residential real estateResidential first lien$— $— $9 $3 $7 $— $— $19 
Other residential— — — — — 9 57 66 
ConsumerConsumer— 1 9 11 31 33 — 85 
Consumer other18 83 39 16 32 250 — 438 
Lease financing— 393 535 135 22 76 — 1,161 
Total gross other charge-offs$18 $477 $592 $165 $92 $368 $57 $1,769 
24
Table of Contents
NOTE 5 – PREMISES, EQUIPMENT AND LEASES
A summary of premises and equipment at June 30, 2023 and December 31, 2022 is as follows:
June 30,December 31,
(dollars in thousands)20232022
Land$16,004 $16,004 
Buildings and improvements75,469 71,837 
Furniture and equipment34,629 34,081 
Lease right-of-use assets7,505 7,001 
Total133,607 128,923 
Accumulated depreciation(52,601)(50,630)
Premises and equipment, net$81,006 $78,293 
    Depreciation expense for the three and six months ended June 30, 2023 was $1.2 million and $2.4 million, respectively, and $1.2 million and $2.4 million for the three and six months ended June 30, 2022, respectively.
The Company has entered into operating leases, primarily for banking offices and operating facilities, which have remaining lease terms of 8 months to 15 years, some of which may include options to extend the lease terms for up to an additional 10 years. The options to extend are included if they are reasonably certain to be exercised. The Company had operating lease right-of-use assets of $7.5 million and $7.0 million as of June 30, 2023 and December 31, 2022, respectively, included in premises and equipment on our consolidated balance sheets. The operating lease liabilities of the Company were $9.3 million and $8.9 million as of June 30, 2023 and December 31, 2022, respectively, and are included in accrued interest payable and other liabilities on our consolidated balance sheets.
Information related to operating leases for the three and six months ended June 30, 2023 and 2022 was as follows:
Three Months Ended June 30,Six Months Ended June 30,
(dollars in thousands)2023202220232022
Operating lease cost$493 $532 $977 $1,040 
Operating cash flows from leases590 630 1,180 1,236 
Right-of-use assets obtained in exchange for lease obligations218 — 1,348 121 
Weighted average remaining lease term8.0 years7.4 years8.0 years7.4 years
Weighted average discount rate3.29 %2.89 %3.29 %2.89 %
The projected minimum rental payments under the terms of the leases as of June 30, 2023 were as follows:
(dollars in thousands)Amount
Year ending December 31:
2023 remaining$947 
20242,020 
20251,103 
2026975 
2027875 
Thereafter4,704 
Total future minimum lease payments10,624 
Less imputed interest(1,357)
Total operating lease liabilities$9,267 

25
Table of Contents
NOTE 6 – LOAN SERVICING RIGHTS
A summary of loan servicing rights at June 30, 2023 and December 31, 2022 is as follows:
June 30, 2023December 31, 2022
(dollars in thousands)Serviced LoansCarrying ValueServiced LoansCarrying Value
Commercial FHA$2,165,150 $20,473 $— $— 
SBA$46,279 $649 $46,081 $656 
Residential240,230 489 255,298 549 
Commercial FHA held for sale— — 2,255,617 20,745 
Total$2,451,659 $21,611 $2,556,996 $21,950 
Commercial FHA Mortgage Loan Servicing
During the third quarter of 2022, the Company committed to a plan to sell our commercial FHA servicing portfolio and, therefore, transferred $24.0 million to commercial FHA servicing rights held for sale. At June 30, 2023, the Company abandoned its plans to sell this servicing asset and removed this asset from held for sale at lower of cost or fair value with no gain or loss recognized.
NOTE 7 – DERIVATIVE INSTRUMENTS
As part of the Company’s overall management of interest rate sensitivity, the Company utilizes derivative instruments to minimize significant, unanticipated earnings fluctuations caused by interest rate volatility, including interest rate lock commitments, forward commitments to sell mortgage-backed securities, cash flow hedges and interest rate swap contracts.
Interest Rate Lock Commitments / Forward Commitments to Sell Mortgage-Backed Securities
The Company issues interest rate lock commitments on originated fixed-rate commercial and residential real estate loans to be sold. The interest rate lock commitments and loans held for sale are hedged with forward contracts to sell mortgage-backed securities. The fair value of the interest rate lock commitments and forward contracts to sell mortgage-backed securities are included in other assets or other liabilities in the consolidated balance sheets. Changes in the fair value of derivative financial instruments are recognized in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income.
The following table summarizes the interest rate lock commitments and forward commitments to sell mortgage-backed securities held by the Company, their notional amount and estimated fair values at June 30, 2023 and December 31, 2022:
Notional amountFair value gain
(dollars in thousands)June 30,
2023		December 31,
2022		June 30,
2023		December 31,
2022
Derivative instruments (included in other assets):
Interest rate lock commitments$6,127 $2,078 $119 $49 
Forward commitments to sell mortgage-backed securities8,831 — 55 — 
Total$14,958 $2,078 $174 $49 
Notional amountFair value loss
(dollars in thousands)June 30,
2023		December 31,
2022		June 30,
2023		December 31,
2022
Derivative instruments (included in other liabilities):
Interest rate lock commitments$— $4,419 $— $15 
Forward commitments to sell mortgage-backed securities— 6,669 — — 
Total$— $11,088 $— $15 
26
Table of Contents
    During both the three and six months ended June 30, 2023, the Company recognized net gains of $0.1 million on derivative instruments in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income.
During the three and six months ended June 30, 2022, the Company recognized net losses of $0.4 million and $0.3 million, respectively, on derivative instruments in commercial FHA revenue and residential mortgage banking revenue in the consolidated statements of income.
Cash Flow Hedges
In the first quarter of 2022, the Company entered into interest rate swap agreements, which qualify as cash flow hedges, to manage the risk of changes in future cash flows due to interest rate fluctuations. The following table summarizes the Company's receive-fixed, pay-variable interest rate swaps on certain pools of loans indexed to prime at June 30, 2023 and December 31, 2022:
(dollars in thousands)June 30,
2023		December 31,
2022
Notional Amount$225,000 $200,000 
Fair value loss included in other liabilities(10,124)(9,999)
Tax effected amount included in accumulated other comprehensive (loss) income(7,391)(7,300)
Average remaining life3.093.37
Weighted average pay rate7.71 %7.23 %
Weighted average receive rate5.43 %5.48 %
Interest Rate Swap Contracts Not Designated as Hedges
The Company entered into interest rate swap contracts sold to commercial customers who wish to modify their interest rate sensitivity. These swaps are offset by contracts simultaneously purchased by the Company from other financial dealer institutions with mirror-image terms. Because of the mirror-image terms of the offsetting contracts, in addition to collateral provisions which mitigate the impact of non-performance risk, changes in the fair value subsequent to initial recognition have a minimal effect on earnings. These derivative contracts do not qualify for hedge accounting.
The notional amounts of the customer derivative instruments and the offsetting counterparty derivative instruments were $7.2 million and $7.4 million at June 30, 2023 and December 31, 2022, respectively. The fair value of the customer derivative instruments and the offsetting counterparty derivative instruments was $0.5 million at both June 30, 2023 and December 31, 2022, which are included in other assets and other liabilities, respectively, on the consolidated balance sheets.
NOTE 8 – DEPOSITS
The following table summarizes the classification of deposits as of June 30, 2023 and December 31, 2022:
(dollars in thousands)June 30, 2023December 31, 2022
Noninterest-bearing demand$1,162,909 $1,362,158 
Interest-bearing:
Checking2,499,693 2,494,073 
Money market1,226,470 1,184,101 
Savings624,005 661,932 
Time913,471 662,388 
Total deposits$6,426,548 $6,364,652 

27
Table of Contents
NOTE 9 – SHORT-TERM BORROWINGS
The following table presents the distribution of short-term borrowings and related weighted average interest rates as of June 30, 2023 and December 31, 2022:
Repurchase agreements
(dollars in thousands)As of and for the six months ended June 30, 2023As of and for the Year Ended December 31,2022
Outstanding at period-end$21,783 $42,311 
Average amount outstanding30,291 58,688 
Maximum amount outstanding at any month end43,718 76,807 
Weighted average interest rate:
During period0.26 %0.18 %
End of period0.25 %0.26 %
Securities sold under agreements to repurchase, which are classified as secured borrowings, generally mature within one to four days from the transaction date. Securities sold under agreements to repurchase are reflected at the amount of cash received in connection with the transaction, which represents the amount of the Bank’s obligation. The Bank may be required to provide additional collateral based on the fair value of the underlying securities. Investment securities with a carrying amount of $28.8 million and $46.1 million at June 30, 2023 and December 31, 2022, respectively, were pledged for securities sold under agreements to repurchase.
The Company had available lines of credit of $184.1 million and $12.2 million at June 30, 2023 and December 31, 2022, respectively, from the Federal Reserve Discount Window. The lines are collateralized by a collateral agreement with respect to a pool of commercial loans and investment securities totaling $211.2 million and $14.3 million at June 30, 2023 and December 31, 2022, respectively. There were no outstanding borrowings under these lines at June 30, 2023 and 2022.
At June 30, 2023, the Company had available federal funds lines of credit totaling $339.0 million. These lines of credit were unused at June 30, 2023.
NOTE 10 – FHLB ADVANCES AND OTHER BORROWINGS
The following table summarizes our FHLB advances and other borrowings as of June 30, 2023 and December 31, 2022:
(dollars in thousands)June 30, 2023December 31, 2022
FHLB advances – fixed rate, fixed term at rates averaging 4.18% at June 30, 2023 - maturing in February 2028
$55,000 $— 
FHLB advances – putable fixed rate at rates averaging 2.70% and 2.35% at June 30, 2023 and December 31, 2022, respectively – maturing through February 2028 with call provisions through February 2024
160,000 110,000 
FHLB advances –SOFR floater at rates averaging 6.68% and 5.92% at June 30, 2023 and December 31, 2022, respectively – maturing in October 2023
100,000 100,000 
FHLB advances – Short term fixed rate at rates averaging 5.18% and 4.31% at June 30, 2023 and December 31, 2022, respectively– maturing in July 2023
260,000 250,000 
Total FHLB advances and other borrowings$575,000 $460,000 
    The Company’s advances from the FHLB are collateralized by a blanket collateral agreement of qualifying mortgage and home equity line of credit loans and certain commercial real estate loans totaling approximately $2.97 billion and $2.90 billion at June 30, 2023 and December 31, 2022, respectively.
28
Table of Contents
NOTE 11 – SUBORDINATED DEBT
The following table summarizes the Company’s subordinated debt at June 30, 2023 and December 31, 2022:
Subordinated debt
Fixed to FloatFixed
(dollars in thousands)Issued September 2019Issued September 2019Issued June 2015Total
At June 30, 2023
Outstanding amount$66,750 $27,250 $— $94,000 
Carrying amount66,455 26,949 — 93,404 
Current rate5.00 %5.50 %N/A
At December 31, 2022
Outstanding amount$72,750 $27,250 $550 $100,550 
Carrying amount72,300 26,925 547 99,772 
Current rate5.00 %5.50 %6.50 %
Maturity date9/30/20299/30/20346/18/2025
Optional redemption date9/30/20249/30/2029N/A
Fixed to variable conversion date9/30/20249/30/2029N/A
Variable rate
3-month SOFR plus 3.61%
3-month SOFR plus 4.05%
N/A
Interest payment termsSemiannuallySemiannuallySemiannually
During the second quarter of 2023, the Company repurchased $6.0 million of the outstanding Fixed to Float Subordinated Notes due September 30, 2029. The Company recognized a gain of $0.7 million which included the discount realized on the repurchase, offset by the remaining unamortized debt issuance costs on the repurchase.
The Company also repurchased the outstanding Fixed Rate Subordinated Notes due June 18, 2025, having an aggregate principal amount of $0.6 million, during the second quarter of 2023. The aggregate repurchase price was 100% of the aggregate principal amount of the subordinated notes, plus accrued and unpaid interest.
The value of subordinated debentures have been reduced by the debt issuance costs, which are being amortized on a straight line basis through the earlier of the redemption option or maturity date. All of the subordinated debentures above may be included in Tier 2 capital (with certain limitations applicable) under current regulatory guidelines and interpretations.
NOTE 12 – EARNINGS PER COMMON SHARE
Earnings per common share is calculated utilizing the two-class method. Basic earnings per common share is calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding. Diluted earnings per common share is calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of shares adjusted for the dilutive effect of common stock awards. The diluted earnings per common share computation for the three and six months ended June 30, 2023 and 2022 excluded antidilutive stock options of 375,912 and 60,698, respectively, because the exercise prices of these stock options exceeded the average market
29
Table of Contents
prices of the Company’s common shares for those respective periods. Presented below are the calculations for basic and diluted earnings per common share for the three and six months ended June 30, 2023 and 2022:
Three Months Ended June 30,Six Months Ended June 30,
(dollars in thousands, except per share data)2023202220232022
Net income$21,575 $21,883 $43,347 $42,632 
Preferred dividends declared(2,228)— (4,456)— 
Net income available to common shareholders19,347 21,883 38,891 42,632 
Common shareholder dividends(6,579)(6,397)(13,248)(12,786)
Unvested restricted stock award dividends(80)(73)(160)(148)
Undistributed earnings to unvested restricted stock awards(149)(171)(300)(334)
Undistributed earnings to common shareholders$12,539 $15,242 $25,183 $29,364 
Basic
Distributed earnings to common shareholders$6,579 $6,397 $13,248 $12,786 
Undistributed earnings to common shareholders12,539 15,242 25,183 29,364 
Total common shareholders earnings, basic$19,118 $21,639 $38,431 $42,150 
Diluted
Distributed earnings to common shareholders$6,579 $6,397 $13,248 $12,786 
Undistributed earnings to common shareholders12,539 15,242 25,183 29,364 
Total common shareholders earnings19,118 21,639 38,431 42,150 
Add back:
Undistributed earnings reallocated from unvested restricted stock awards— 1 — 1 
Total common shareholders earnings, diluted$19,118 $21,640 $38,431 $42,151 
Weighted average common shares outstanding, basic22,200,917 22,305,590 22,338,627 22,290,486 
Options4,162 55,229 10,354 65,450 
Weighted average common shares outstanding, diluted22,205,079 22,360,819 22,348,981 22,355,936 
Basic earnings per common share$0.86 $0.97 $1.72 $1.89 
Diluted earnings per common share0.86 0.97 1.72 1.89 
NOTE 13 – FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date reflecting assumptions that a market participant would use when pricing an asset or liability. The hierarchy uses three levels of inputs to measure the fair value of assets and liabilities as follows:
•Level 1: Unadjusted quoted prices for identical assets or liabilities traded in active markets.
•Level 2: Significant other observable inputs other than Level 1, including quoted prices for similar assets and liabilities in active markets, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data.
•Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.
The Company used the following methods and significant assumptions to estimate the fair value of each type of financial instrument:
Investment securities. The fair value of investment securities available for sale are determined by quoted market prices, if available (Level 1). For investment securities available for sale where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). For investment securities available for sale where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). Securities classified as Level 3 are not actively traded, and as a result, fair value is determined utilizing third-party valuation services through consensus pricing. There were no transfers between Levels 1, 2 or 3 during the
30
Table of Contents
three and six months ended June 30, 2023 or December 31, 2022 for assets measured at fair value on a recurring basis. The fair value of equity securities is determined using quoted prices or market prices for similar securities (Level 2).
Loans held for sale. The fair value of loans held for sale is determined using quoted prices for a similar asset, adjusted for specific attributes of that loan (Level 2).
Derivative instruments. The fair value of derivative instruments are determined based on derivative valuation models using observable market data as of the measurement date (Level 2).
Loan servicing rights. In accordance with GAAP, the Company records impairment charges on loan servicing rights on a non-recurring basis when the carrying value exceeds the estimated fair value. The fair value of our servicing rights is estimated by using a cash flow valuation model which calculates the present value of estimated future net servicing cash flows, taking into consideration expected mortgage loan prepayment rates, discount rates, servicing costs, replacement reserves and other economic factors which are estimated based on current market conditions (Level 3).
Mortgage servicing rights held for sale. Mortgage servicing rights held for sale consist of commercial FHA mortgage servicing rights that management has committed to a plan to sell and has the ability to sell them to a buyer in their present condition. Mortgage servicing rights held for sale are carried at the lower of their carrying value or fair value less estimated costs to sell (Level 2).
Nonperforming loans. Nonperforming loans are measured and recorded at fair value on a non-recurring basis. All of our nonaccrual loans and restructured loans are considered nonperforming and are reviewed individually for the amount of impairment, if any. Most of our loans are collateral dependent and, accordingly, we measure nonperforming loans based on the estimated fair value of such collateral. In cases where the Company has an agreed upon selling price for the collateral, the fair value is set at the selling price (Level 1). The fair value of each loan’s collateral is generally based on estimated market prices from an independently prepared appraisal, which is then adjusted for the cost related to liquidating such collateral (Level 2). When adjustments are made to an appraised value to reflect various factors such as the age of the appraisal or known changes in the market or the collateral, such valuation inputs are considered unobservable (Level 3). The nonperforming loans categorized as Level 3 also include unsecured loans and other secured loans whose fair values are based significantly on unobservable inputs such as the strength of a guarantor, cash flows discounted at the effective loan rate, and management’s judgment.
Other Real Estate Owned. OREO is initially recorded at fair value at the date of foreclosure less estimated costs of disposal, which establishes a new cost basis. After foreclosure, OREO is held for sale and is carried at the lower of cost or fair value less estimated costs of disposal. Fair value for OREO is based on an appraisal performed upon foreclosure. Property is evaluated regularly to ensure the recorded amount is supported by its fair value less estimated costs to dispose. After the initial foreclosure appraisal, fair value is generally determined by an annual appraisal unless known events warrant adjustments to the recorded value.
Assets held for sale. Assets held for sale represent the fair value of the banking facilities that are expected to be sold. The fair value of the assets held for sale was based on estimated market prices from independently prepared current appraisals (Level 2).
31
Table of Contents
Assets and liabilities measured and recorded at fair value, including financial assets for which the Company has elected the fair value option, on a recurring and nonrecurring basis at June 30, 2023 and December 31, 2022, are summarized below:
June 30, 2023
(dollars in thousands)Carrying
amount		Quoted prices
in active
markets
for identical
assets
(Level 1)		Significant
other
observable
inputs
(Level 2)		Significant unobservable
inputs
(Level 3)
Assets and liabilities measured at fair value on a recurring basis:
Assets
Investment securities available for sale:
U.S. Treasury securities$42,746 $42,746 $— $— 
U.S. government sponsored entities and U.S. agency securities73,458 — 73,458 — 
Mortgage-backed securities - agency538,634 — 538,634 — 
Mortgage-backed securities - non-agency65,911 — 65,911 — 
State and municipal securities57,494 — 57,494 — 
Collateralized loan obligations22,709 — 22,709 — 
Corporate securities81,763 — 81,763 — 
Equity securities4,288 4,288 — — 
Loans held for sale5,632 — 5,632 — 
Derivative assets630 — 630 — 
Total$893,265 $47,034 $846,231 $— 
Liabilities
Derivative liabilities$10,580 $— $10,580 $— 
Total$10,580 $— $10,580 $— 
Assets measured at fair value on a non-recurring basis:
Loan servicing rights$21,611 $— $— $21,611 
Nonperforming loans54,844 3,116 42,652 9,076 
Other real estate owned202 — 202 — 
Assets held for sale187 — 187 — 
32
Table of Contents
December 31, 2022
(dollars in thousands)Carrying
amount		Quoted prices
in active
markets
for identical
assets
(Level 1)		Significant
other
observable
inputs
(Level 2)		Significant unobservable
inputs
(Level 3)
Assets and liabilities measured at fair value on a recurring basis:
Assets
Investment securities available for sale:
U.S. Treasury securities$81,230 $81,230 $— $— 
U.S. government sponsored entities and U.S. agency securities37,509 — 37,509 — 
Mortgage-backed securities - agency448,150 — 448,150 — 
Mortgage-backed securities - non-agency20,754 — 20,754 — 
State and municipal securities94,636 — 94,636 — 
Corporate securities85,955 — 85,955 — 
Equity securities8,626 8,626 — — 
Loans held for sale1,286 — 1,286 — 
Derivative assets481 — 481 — 
Total$778,627 $89,856 $688,771 $— 
Liabilities
Derivative liabilities$10,446 $— $10,446 $— 
Total$10,446 $— $10,446 $— 
Assets measured at fair value on a non-recurring basis:
Loan servicing rights$1,205 $— $— $1,205 
Mortgage servicing rights held for sale20,745 — 20,745 — 
Nonperforming loans49,423 5,478 34,406 9,539 
Other real estate owned6,729 — 6,729 — 
Assets held for sale356 — 356 — 
    There were no assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2023 and 2022.
The following table presents losses recognized on assets measured on a nonrecurring basis for the three and six months ended June 30, 2023 and 2022:
Three Months Ended June 30,Six Months Ended June 30,
(dollars in thousands)2023202220232022
Commercial mortgage servicing rights$— $869 $— $1,263 
Nonperforming loans3,573 10,779 4,676 11,366 
Other real estate owned— 67 — 404 
Total losses on assets measured on a nonrecurring basis$3,573 $11,715 $4,676 $13,033 
    The following tables present quantitative information about significant unobservable inputs used in fair value measurements of Level 3 assets measured on a nonrecurring basis at June 30, 2023 and December 31, 2022:
33
Table of Contents
(dollars in thousands)Fair valueValuation
technique		Unobservable
input / assumptions
Range (weighted average)(1)
June 30, 2023
Loan servicing rights:
SBA servicing rights$838 Discounted cash flowPrepayment speed
15.62% - 16.02% (15.87%)
Discount rate
No range (14.25%)
Residential servicing rights 2,575 Discounted cash flowPrepayment speed
7.20% -26.28% (7.50%)
Discount rate
9.25% - 11.75% (10.38%)
December 31, 2022
Loan servicing rights:
SBA servicing rights876 Discounted cash flowPrepayment speed
14.49% - 15.44% (15.00%)
Discount rate
No range (13.00%)
Residential servicing rights2,770 Discounted cash flowPrepayment speed
7.56% - 26.28% (7.92%)
Discount rate
9.00% - 11.50% (10.13%)
(1)Unobservable inputs were weighted by the relative fair value of the instruments.
ASC Topic 825, Financial Instruments, requires disclosure of the estimated fair value of certain financial instruments and the methods and significant assumptions used to estimate such fair values. Additionally, certain financial instruments and all nonfinancial instruments are excluded from the applicable disclosure requirements.
The Company has elected the fair value option for newly originated residential loans held for sale. These loans are intended for sale and are hedged with derivative instruments. We have elected the fair value option
to mitigate accounting mismatches in cases where hedge accounting is complex and to achieve operational simplification.
The following table presents the difference between the aggregate fair value and the aggregate remaining principal balance for loans for which the fair value option has been elected as of June 30, 2023 and December 31, 2022:
June 30, 2023December 31, 2022
(dollars in thousands)Aggregate
fair value		DifferenceContractual
principal		Aggregate
fair value		DifferenceContractual
principal
Residential loans held for sale$5,632 $212 $5,421 $1,286 $42 $1,244 
The following table presents the amount of gains (losses) from fair value changes included in income before income taxes for financial assets carried at fair value for the three and six months ended June 30, 2023 and 2022:
Three Months Ended June 30,Six Months Ended June 30,
(dollars in thousands)2023202220232022
Commercial loans held for sale$— $(18)$— $— 
Residential loans held for sale50 104 149 (277)
Total loans held for sale$50 $86 $149 $(277)
34
Table of Contents
    The carrying values and estimated fair value of certain financial instruments not carried at fair value at June 30, 2023 and December 31, 2022 were as follows:
June 30, 2023
(dollars in thousands)Carrying
amount		Fair valueQuoted prices
in active
markets
for identical
assets
(Level 1)		Significant
other
observable
inputs
(Level 2)		Significant
unobservable
inputs
(Level 3)
Assets
Cash and due from banks$159,637 $159,637 $159,637 $— $— 
Federal funds sold1,058 1,058 1,058 — — 
Loans6,367,344 6,153,641 — — 6,153,641 
Accrued interest receivable21,000 21,000 — 21,000 — 
Liabilities
Deposits$6,426,548 $6,413,857 $— $6,413,857 $— 
Short-term borrowings21,783 21,783 — 21,783 — 
FHLB and other borrowings575,000 571,334 — 571,334 — 
Subordinated debt93,404 89,232 — 89,232 — 
Trust preferred debentures50,296 51,700 — 51,700 — 
December 31, 2022
(dollars in thousands)Carrying
amount		Fair valueQuoted prices
in active
markets
for identical
assets
(Level 1)		Significant
other
observable
inputs
(Level 2)		Significant
unobservable
inputs
(Level 3)
Assets
Cash and due from banks$143,035 $143,035 $143,035 $— $— 
Federal funds sold7,286 7,286 7,286 — — 
Loans6,306,467 6,121,026 — — 6,121,026 
Accrued interest receivable20,313 20,313 — 20,313 — 
Liabilities
Deposits$6,364,652 $6,344,534 $— $6,344,534 $— 
Short-term borrowings42,311 42,311 — 42,311 — 
FHLB and other borrowings460,000 457,998 — 457,998 — 
Subordinated debt99,772 95,301 — 95,301 — 
Trust preferred debentures49,975 54,668 — 54,668 — 
The methods utilized to measure fair value of financial instruments at June 30, 2023 and December 31, 2022 represent an approximation of exit price; however, an actual exit price may differ.
NOTE 14 – COMMITMENTS, CONTINGENCIES AND CREDIT RISK
In the normal course of business, there are outstanding various contingent liabilities such as claims and legal actions, which are not reflected in the consolidated financial statements. No material losses are anticipated as a result of these actions or claims.
We are a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of our customers. These financial instruments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the balance
35
Table of Contents
sheet. The contract amounts of those instruments reflect the extent of involvement we have in particular classes of financial instruments.
Our exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Bank used the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. The commitments are principally tied to variable rates. Loan commitments as of June 30, 2023 and December 31, 2022 were as follows:
(dollars in thousands)June 30, 2023December 31, 2022
Commitments to extend credit$1,083,981 $1,276,263 
Financial guarantees – standby letters of credit22,884 23,748 
The Company establishes a mortgage repurchase liability to reflect management’s estimate of losses on loans for which the Company could have a repurchase obligation based on the volume of loans sold in 2023 and years prior, borrower default expectations, historical investor repurchase demand and appeals success rates, and estimated loss severity. Loans repurchased from investors are initially recorded at fair value, which becomes the Company’s new accounting basis. Any difference between the loan’s fair value and the outstanding principal amount is charged or credited to the mortgage repurchase liability, as appropriate. Subsequent to repurchase, such loans are carried in loans receivable. There were no losses as a result of make-whole requests and loan repurchases for the three and six months ended June 30, 2023 and 2022. The liability for unresolved repurchase demands totaled $0.2 million at June 30, 2023 and December 31, 2022.
NOTE 15 – SEGMENT INFORMATION
Our business segments are defined as Banking, Wealth Management, and Other. The reportable business segments are consistent with the internal reporting and evaluation of the principle lines of business of the Company. The Banking segment provides a wide range of financial products and services to consumers and businesses, including commercial, commercial real estate, mortgage and other consumer loan products; commercial equipment financing; mortgage loan sales and servicing; letters of credit; various types of deposit products, including checking, savings and time deposit accounts; merchant services; and corporate treasury management services. The Wealth Management segment consists of trust and fiduciary services, brokerage and retirement planning services. The Other segment includes the operating results of the parent company, our captive insurance business unit, and the elimination of intercompany transactions.
36
Table of Contents
Selected business segment financial information for the three and six months ended June 30, 2023 and 2022 were as follows:
(dollars in thousands)BankingWealth
Management		OtherTotal
Three Months Ended June 30, 2023
Net interest income (expense)$61,035 $— $(2,195)$58,840 
Provision for credit losses5,879 — — 5,879 
Noninterest income11,874 6,269 610 18,753 
Noninterest expense38,550 4,675 (331)42,894 
Income (loss) before income taxes (benefit)28,480 1,594 (1,254)28,820 
Income taxes (benefit)7,326 445 (526)7,245 
Net income (loss)$21,154 $1,149 $(728)$21,575 
Total assets$8,025,617 $30,249 $(21,145)$8,034,721 
Six Months Ended June 30, 2023
Net interest income (expense)$123,643 $— $(4,299)$119,344 
Provision for credit losses9,014 — — 9,014 
Noninterest income21,495 12,680 357 34,532 
Noninterest expense78,397 9,516 (537)87,376 
Income (loss) before income taxes (benefit)57,727 3,164 (3,405)57,486 
Income taxes (benefit)14,532 884 (1,277)14,139 
Net income (loss)$43,195 $2,280 $(2,128)$43,347 
Total assets$8,025,617 $30,249 $(21,145)$8,034,721 
Three Months Ended June 30, 2022
Net interest income (expense)$63,963 $— $(2,629)$61,334 
Provision for credit losses5,441 — — 5,441 
Noninterest income8,495 6,143 (25)14,613 
Noninterest expense37,362 4,091 (114)41,339 
Income (loss) before income taxes (benefit)29,655 2,052 (2,540)29,167 
Income taxes (benefit)7,545 573 (834)7,284 
Net income (loss)$22,110 $1,479 $(1,706)$21,883 
Total assets$7,422,518 $29,042 $(15,748)$7,435,812 
Six Months Ended June 30, 2022
Net interest income (expense)$123,316 $— $(5,155)$118,161 
Provision for credit losses9,608 — — 9,608 
Noninterest income16,901 13,282 43 30,226 
Noninterest expense73,609 8,766 (152)82,223 
Income (loss) before income taxes (benefit)57,000 4,516 (4,960)56,556 
Income taxes (benefit)14,260 1,263 (1,599)13,924 
Net income (loss)$42,740 $3,253 $(3,361)$42,632 
Total assets$7,422,518 $29,042 $(15,748)$7,435,812 
37
Table of Contents
NOTE 16 – REVENUE FROM CONTRACTS WITH CUSTOMERS
The Company’s revenue from contracts with customers in the scope of Topic 606 is recognized within noninterest income in the consolidated statements of income. The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the three and six months ended June 30, 2023 and 2022.
Three Months Ended June 30,Six Months Ended June 30,
(dollars in thousands)2023202220232022
Noninterest income - in-scope of Topic 606
Wealth management revenue:
Trust management/administration fees$5,356 $5,139 $10,992 $11,121 
Investment brokerage fees430 543 861 1,141 
Other483 461 827 1,020 
Service charges on deposit accounts:
Nonsufficient fund fees1,741 1,524 3,439 2,856 
Other936 780 1,806 1,516 
Interchange revenues3,696 3,590 7,108 6,870 
Other income:
Merchant services revenue398 399 756 755 
Other1,403 671 2,033 1,439 
Noninterest income - out-of-scope of Topic 6064,310 1,506 6,710 3,508 
Total noninterest income$18,753 $14,613 $34,532 $30,226 
    Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and investment securities. In addition, certain noninterest income streams such as commercial FHA revenue, residential mortgage banking revenue and gain on sales of investment securities, net, are also not in scope of Topic 606. Topic 606 is applicable to noninterest income streams such as wealth management revenue, service charges on deposit accounts, interchange revenue, gain on sales of other real estate owned, and certain other noninterest income streams. The noninterest income streams considered in-scope by Topic 606 are discussed below.
Wealth Management Revenue
Wealth management revenue is primarily comprised of fees earned from the management and administration of trusts and other customer assets. Previously, the Company also earned investment advisory fees through its SEC registered investment advisory subsidiary. The Company’s performance obligation in both of these instances is generally satisfied over time and the resulting fees are recognized monthly, based upon the month-end market value of the assets under management and contractually determined fee schedules. Payment is generally received a few days after month end through a direct charge to each customer’s account. The Company does not earn performance-based incentives. Optional services such as real estate sales and tax return preparation services are also available to existing trust and asset management customers. The Company’s performance obligation for these transactional-based services is generally satisfied, and related revenue recognized, at a point in time (i.e., as incurred). Payment is received shortly after services are rendered. Fees generated from transactions executed by the Company’s third party broker dealer are remitted to the Company on a monthly basis for that month’s transactional activity.
Service Charges on Deposit Accounts
Service charges on deposit accounts consist of fees received under depository agreements with customers to provide access to deposited funds, serve as custodian of deposited funds, and when applicable, pay interest on deposits. These service charges primarily include non-sufficient fund fees and other account related service charges. Non-sufficient fund fees are earned when a depositor presents an item for payment in excess of available funds, and the Company, at its discretion, provides the necessary funds to complete the transaction. The Company generates other account related service charge revenue by providing depositors proper safeguard and remittance of funds as well as by delivering optional services for depositors, such as check imaging or treasury management, that are performed upon the depositor’s request. The Company’s performance obligation for the proper safeguard and remittance of funds, monthly account analysis and any other monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Payment for service charges on deposit accounts is typically received immediately or in the following month through a direct charge to a customer’s account.
38
Table of Contents
Interchange Revenue
Interchange revenue includes debit / credit card income and ATM user fees. Card income is primarily comprised of interchange fees earned for standing ready to authorize and providing settlement on card transactions processed through the MasterCard interchange network. The levels and structure of interchange rates are set by MasterCard and can vary based on cardholder purchase volumes. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with completion of the Company’s performance obligation, the transaction processing services provided to the cardholder. Payment is typically received immediately or in the following month. ATM fees are primarily generated when a Company cardholder withdraws funds from a non-Company ATM or a non-Company cardholder withdraws funds from a Company ATM. The Company satisfies its performance obligation for each transaction at the point in time when the ATM withdrawal is processed.
Other Noninterest Income
The other noninterest income revenue streams within the scope of Topic 606 consist of merchant services revenue, safe deposit box rentals, wire transfer fees, paper statement fees, check printing commissions, gain on sales of other real estate owned, and other noninterest related fees. Revenue from the Company’s merchant services business consists principally of transaction and account management fees charged to merchants for the electronic processing of transactions. These fees are net of interchange fees paid to the credit card issuing bank, card company assessments, and revenue sharing amounts. Account management fees are considered earned at the time the merchant’s transactions are processed or other services are performed. Fees related to the other components of other noninterest income within the scope of Topic 606 are largely transactional based, and therefore, the Company’s performance obligation is satisfied and related revenue recognized, at the point in time the customer uses the selected service to execute a transaction.
39
Table of Contents
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain significant factors which have affected the financial condition and results of operations of the Company as reflected in the unaudited consolidated balance sheet as of June 30, 2023, as compared to December 31, 2022, and operating results for the three and six months ended June 30, 2023 and 2022. These comments should be read in conjunction with the Company's unaudited consolidated financial statements and accompanying notes appearing elsewhere herein and our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 24, 2023.
In addition to the historical information contained herein, this Form 10-Q includes “forward-looking statements” within the meaning of such term under the Private Securities Litigation Reform Act of 1995. These statements are subject to many risks and uncertainties, including changes in interest rates and other general economic, business and political conditions, including prevailing interest rates and the rate of inflation; the continuing effects of the recent failures of Silicon Valley Bank and Signature Bank, including anticipated effects on FDIC premiums, increased deposit volatility and potential regulatory developments; changes in the financial markets; changes in business plans as circumstances warrant; risks related to mergers and acquisitions and the integration of acquired businesses; 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 SEC. Readers should note that the forward-looking statements included herein 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,” or “continue,” or similar terminology. Any forward-looking statements presented herein are made only as of the date of this document, and we do not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.
Critical Accounting Policies
The preparation of our consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. These estimates are based upon historical experience and on various other assumptions that management believes are reasonable under current circumstances. These estimates form the basis for making judgments about the carrying value of certain assets and liabilities that are not readily available from other sources. Actual results may differ from these estimates under different assumptions or conditions. The estimates and judgments that management believes have the most effect on the Company’s reported financial position and results of operations are set forth in “Note 2 – Basis of Presentation and Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements, included in our Annual Report on Form 10-K for the year ended December 31, 2022. There have been no significant changes in critical accounting policies or the assumptions and judgments utilized in applying these policies since December 31, 2022.
Significant Developments and Transactions
Each item listed below affects the comparability of our results of operations for the three and six months ended June 30, 2023 and 2022, and our financial condition as of June 30, 2023 and December 31, 2022, and may affect the comparability of financial information we report in future fiscal periods.
Redemption of Subordinated Notes. In the second quarter of 2023, the Company redeemed $6.6 million of outstanding subordinated notes. The weighted average redemption price was 89.2% of the aggregate principal amount of the subordinated notes, plus accrued and unpaid interest. The Company recorded gains totaling $0.7 million on these redemptions.
On October 15, 2022, the Company redeemed the outstanding Fixed-to-Floating Rate Subordinated Notes due October 15, 2027, having an aggregate principal amount of $40.0 million, in accordance with the terms of the notes. The aggregate redemption price was 100% of the aggregate principal amount of the subordinated notes, plus accrued and unpaid interest.
Preferred Stock Issuance. On August 24, 2022, the Company issued and sold 4,600,000 depositary shares, each representing a 1/40th ownership interest in a share of the Company’s 7.75% fixed rate reset non-cumulative, non-convertible, perpetual preferred stock, Series A. The net proceeds were $110.5 million.
Commercial FHA Mortgage Loan Servicing Rights. During the third quarter of 2022, we committed to a plan to sell the commercial servicing rights asset and transferred $24.0 million of commercial FHA loan servicing rights to held for sale. At June 30, 2023, the Company abandoned its plans to sell this servicing asset and removed this asset from held for sale at lower of cost or fair value with no gain or loss recognized.
40
Table of Contents
Recent Acquisitions. On June 17, 2022, the Company completed its acquisition of the deposits and certain loans and other assets associated with FNBC's branches in Mokena and Yorkville, Illinois. The Company acquired $79.8 million in assets, including $60.3 million in cash and $16.6 million in loans, and assumed $79.8 million in deposits.
Results of Operations
Overview. The following table sets forth condensed income statement information of the Company for the three and six months ended June 30, 2023 and 2022:
Three Months Ended June 30,Six Months Ended June 30,
(dollars in thousands, except per share data)2023202220232022
Income Statement Data:
Interest income$100,491 $69,236 $196,030 $131,984 
Interest expense41,651 7,902 76,686 13,823 
Net interest income58,840 61,334 119,344 118,161 
Provision for credit losses5,879 5,441 9,014 9,608 
Noninterest income18,753 14,613 34,532 30,226 
Noninterest expense42,894 41,339 87,376 82,223 
Income before income taxes28,820 29,167 57,486 56,556 
Income taxes7,245 7,284 14,139 13,924 
Net income21,575 21,883 43,347 42,632 
Preferred dividends2,228 — 4,456 — 
Net income available to common shareholders$19,347 $21,883 $38,891 $42,632 
Per Share Data:
Basic earnings per common share$0.86 $0.97 $1.72 $1.89 
Diluted earnings per common share$0.86 $0.97 1.72 1.89 
Performance Metrics:
Return on average assets1.09 %1.19 %1.10 %1.17 %
Return on average shareholders' equity11.14 %13.65 %11.32 %13.22 %
During the three months ended June 30, 2023, we generated net income of $21.6 million, or diluted earnings per common share of $0.86, compared to net income of $21.9 million, or diluted earnings per common share of $0.97, in the three months ended June 30, 2022. Earnings for the second quarter of 2023 compared to the second quarter of 2022 decreased slightly primarily due to a $2.5 million decrease in net interest income, a $0.4 million increase in provision for credit losses and a $1.6 million increase in noninterest expense. These results were partially offset by a $4.1 million increase in noninterest income.
During the six months ended June 30, 2023, we generated net income of $43.3 million, or diluted earnings per common share of $1.72, compared to net income of $42.6 million, or diluted earnings per common share of $1.89, in the six months ended June 30, 2022. Earnings for the six months ended June 30, 2023 compared to six months ended June 30, 2022 increased primarily due to a $1.2 million increase in net interest income, a $0.6 million decrease in provision for credit losses, and a $4.3 million increase in noninterest income. These results were partially offset by a $5.2 million increase in noninterest expense and a $0.2 million increase in income tax expense.
Net Interest Income and Margin. Our primary source of revenue is net interest income, which is the difference between interest income from interest-earning assets (primarily loans and securities) and interest expense of funding sources (primarily interest-bearing deposits and borrowings). Net interest income is influenced by many factors, primarily the volume and mix of interest-earning assets, funding sources, and interest rate fluctuations. Noninterest-bearing sources of funds, such as demand deposits and shareholders’ equity, also support earning assets. Net interest margin is calculated as net interest income divided by average interest-earning assets. Net interest margin is presented on a tax-equivalent basis, which means that tax-free interest income has been adjusted to a pretax-equivalent income, assuming a federal income tax rate of 21% for three and six months ended June 30, 2023 and 2022.
On May 3, 2023, the Federal Reserve approved its 10th interest rate increase in just a little over a year. The increase takes the federal funds rate to a target range of 5.00%-5.25%, the highest since August 2007. At its June meeting, the Federal
41
Table of Contents
Reserve decided to leave interest rates unchanged. The Federal Reserve indicated they will take another six weeks to see the impacts of policy moves as they continue to fight an inflation battle. The benchmark federal funds rate remains at a target range between 5.00%-5.25%, compared to a target rate of 0.00%-0.25% at the beginning of 2022.
During the three months ended June 30, 2023, net interest income, on a tax-equivalent basis, decreased to $59.0 million compared to $61.7 million for the three months ended June 30, 2022. The tax-equivalent net interest margin decreased to 3.23% for the second quarter of 2023 compared to 3.65% in the second quarter of 2022.
During the six months ended June 30, 2023, net interest income, on a tax-equivalent basis, increased to $119.8 million with a tax-equivalent net interest margin of 3.31% compared to net interest income, on a tax-equivalent basis, of $118.9 million and a tax-equivalent net interest margin of 3.58% for the six months ended June 30, 2022.
Average Balance Sheet, Interest and Yield/Rate Analysis. The following tables present the average balance sheets, interest income, interest expense and the corresponding average yields earned and rates paid for the three and six months ended June 30, 2023 and 2022. The average balances are principally daily averages and, for loans, include both performing and nonperforming balances. Interest income on loans includes the effects of discount accretion and net deferred loan origination costs accounted for as yield adjustments.
42
Table of Contents
Three Months Ended June 30,
20232022
(tax-equivalent basis, dollars in thousands)Average
balance		Interest
& fees		Yield/
Rate		Average
balance		Interest
& fees		Yield/
Rate
Interest-earning assets:
Federal funds sold and cash investments$67,377 $852 5.07 %$226,517 $468 0.83 %
Investment securities:
Taxable investment securities809,299 6,899 3.42 714,611 4,055 2.27 
Investment securities exempt from federal income tax (1)
52,110 387 2.98 104,316 876 3.36 
Total securities861,409 7,286 3.39 818,927 4,931 2.41 
Loans:
Loans (2)
6,301,723 91,350 5.81 5,609,232 62,943 4.50 
Loans exempt from federal income tax (1)
54,289 540 3.99 68,559 651 3.81 
Total loans6,356,012 91,890 5.80 5,677,791 63,594 4.49 
Loans held for sale4,067 59 5.79 9,865 77 3.15 
Nonmarketable equity securities45,028 599 5.33 36,338 487 5.38 
Total interest-earning assets7,333,893 100,686 5.51 6,769,438 69,557 4.12 
Noninterest-earning assets612,238 615,348 
Total assets$7,946,131 $7,384,786 
Interest-bearing liabilities:
Deposits:
Checking and money market deposits$3,771,823 $27,502 2.92 %$3,366,774 $2,903 0.35 %
Savings deposits626,818 396 0.25 719,204 87 0.05 
Time deposits804,580 5,132 2.56 615,614 770 0.50 
Brokered time deposits55,967 587 4.21 17,167 50 1.16 
Total interest-bearing deposits5,259,188 33,617 2.56 4,718,759 3,810 0.32 
Short-term borrowings22,018 14 0.26 59,301 22 0.15 
FHLB advances and other borrowings471,989 5,396 4.59 307,611 1,435 1.87 
Subordinated debt97,278 1,335 5.51 139,232 2,011 5.78 
Trust preferred debentures50,218 1,289 10.29 49,602 624 5.05 
Total interest-bearing liabilities5,900,691 41,651 2.83 5,274,505 7,902 0.60 
Noninterest-bearing liabilities:
Noninterest-bearing deposits1,187,584 1,401,268 
Other noninterest-bearing liabilities81,065 66,009 
Total noninterest-bearing liabilities1,268,649 1,467,277 
Shareholders’ equity776,791 643,004 
Total liabilities and shareholders’ equity$7,946,131 $7,384,786 
Net interest income / net interest margin (3)
$59,035 3.23 %$61,655 3.65 %
(1)Interest income and average rates for tax-exempt loans and securities are presented on a tax-equivalent basis, assuming a federal income tax rate of 21%. Tax-equivalent adjustments totaled $0.2 million and $0.3 million for the three months ended June 30, 2023 and 2022, respectively.
(2)Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.
(3)Net interest margin during the periods presented represents: (i) the difference between interest income on interest-earning assets and the interest expense on interest-bearing liabilities, divided by (ii) average interest-earning assets for the period.
43
Table of Contents
Six Months Ended June 30,
20232022
(tax-equivalent basis, dollars in thousands)Average
balance		Interest
& fees		Yield/
Rate		Average
balance		Interest
& fees		Yield/
Rate
Interest-earning assets:
Federal funds sold and cash investments$76,201 $1,832 4.85 %$304,938 $639 0.42 %
Investment securities:
Taxable investment securities770,403 12,269 3.19 737,569 7,952 2.16 
Investment securities exempt from federal income tax (1)
65,368 1,012 3.10 119,002 1,942 3.26 
Total securities835,771 13,281 3.18 856,571 9,894 2.31 
Loans:
Loans (2)
6,283,259 178,809 5.74 5,406,467 119,529 4.46 
Loans exempt from federal income tax (1)
55,046 1,078 3.95 70,570 1,344 3.84 
Total loans6,338,305 179,887 5.72 5,477,037 120,873 4.45 
Loans held for sale2,794 75 5.42 20,501 297 2.93 
Nonmarketable equity securities46,416 1,394 6.05 36,358 971 5.39 
Total interest-earning assets7,299,487 196,469 5.43 6,695,405 132,674 4.00 
Noninterest-earning assets611,528 623,224 
Total assets$7,911,015 $7,318,629 
Interest-bearing liabilities:
Deposits:
Checking and money market deposits$3,729,261 $50,457 2.73 %$3,266,076 $4,156 0.26 %
Savings deposits638,413 639 0.20 707,111 137 0.04 
Time deposits754,090 8,253 2.21 621,274 1,570 0.51 
Brokered time deposits35,384 673 3.84 19,290 108 1.13 
Total interest-bearing deposits5,157,148 60,022 2.35 4,613,751 5,971 0.26 
Short-term borrowings30,291 39 0.26 64,642 45 0.14 
FHLB advances and other borrowings505,945 11,402 4.54 309,436 2,647 1.72 
Subordinated debt98,538 2,705 5.54 139,186 4,022 5.78 
Trust preferred debentures50,133 2,518 10.13 49,527 1,138 4.64 
Total interest-bearing liabilities5,842,055 76,686 2.65 5,176,542 13,823 0.54 
Noninterest-bearing liabilities:
Noninterest-bearing deposits1,219,050 1,418,083 
Other noninterest-bearing liabilities77,895 73,878 
Total noninterest-bearing liabilities1,296,945 1,491,961 
Shareholders’ equity772,015 650,126 
Total liabilities and shareholders’ equity$7,911,015 $7,318,629 
Net interest income / net interest margin (3)
$119,783 3.31 %$118,851 3.58 %
(1)Interest income and average rates for tax-exempt loans and securities are presented on a tax-equivalent basis, assuming a federal income tax rate of 21%. Tax-equivalent adjustments totaled $0.4 million and $0.7 million for the six months ended June 30, 2023 and 2022, respectively.
(2)Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.
(3)Net interest margin during the periods presented represents: (i) the difference between interest income on interest-earning assets and the interest expense on interest-bearing liabilities, divided by (ii) average interest-earning assets for the period.
44
Table of Contents
Interest Rates and Operating Interest Differential. Increases and decreases in interest income and interest expense result from changes in average balances (volume) of interest-earning assets and interest-bearing liabilities, as well as changes in average interest rates. The following table shows the effect that these factors had on the interest earned on our interest-earning assets and the interest incurred on our interest-bearing liabilities. The effect of changes in volume is determined by multiplying the change in volume by the previous period’s average rate. Similarly, the effect of rate changes is calculated by multiplying the change in average rate by the previous period’s volume. Changes which are not due solely to volume or rate have been allocated proportionally to the change due to volume and the change due to rate.
Three Months Ended June 30, 2023 compared with Three Months Ended June 30, 2022Six Months Ended June 30, 2023 compared with Six Months Ended June 30, 2022
Change due to:Interest
Variance		Change due to:Interest
Variance
(tax-equivalent basis, dollars in thousands)VolumeRateVolumeRate
EARNING ASSETS:
Federal funds sold and cash investments$(1,171)$1,555 $384 $(2,989)$4,182 $1,193 
Investment securities:
Taxable investment securities670 2,174 2,844 438 3,879 4,317 
Investment securities exempt from federal income tax(414)(75)(489)(853)(77)(930)
Total securities256 2,099 2,355 (415)3,802 3,387 
Loans:
Loans8,904 19,503 28,407 22,168 37,112 59,280 
Loans exempt from federal income tax(139)28 (111)(300)34 (266)
Total loans8,765 19,531 28,296 21,868 37,146 59,014 
Loans held for sale(64)46 (18)(366)144 (222)
Nonmarketable equity securities116 (4)112 286 137 423 
Total earning assets$7,902 $23,227 $31,129 $18,384 $45,411 $63,795 
INTEREST-BEARING LIABILITIES:
Checking and money market deposits$1,651 $22,948 $24,599 $3,428 $42,873 $46,301 
Savings deposits(35)344 309 (41)543 502 
Time deposits721 3,641 4,362 894 5,789 6,683 
Brokered deposits260 277 537 198 367 565 
Total interest-bearing deposits2,597 27,210 29,807 4,479 49,572 54,051 
Short-term borrowings(19)11 (8)(34)28 (6)
FHLB advances and other borrowings1,323 2,638 3,961 3,055 5,700 8,755 
Subordinated debt(594)(82)(676)(1,141)(176)(1,317)
Trust preferred debentures12 653 665 22 1,358 1,380 
Total interest-bearing liabilities$3,319 $30,430 $33,749 6,381 56,482 62,863 
Net interest income$4,583 $(7,203)$(2,620)$12,003 $(11,071)$932 
Interest Income. Interest income, on a tax-equivalent basis, increased $31.1 million to $100.7 million in the three months ended June 30, 2023 as compared to the same quarter in 2022, primarily due to improved yields on earning assets. The yield on earning assets increased 139 basis points to 5.51% from 4.12% primarily due to the impact of increasing market interest rates.
Average earning assets increased to $7.33 billion in the second quarter of 2023 from $6.77 billion in the same quarter in 2022. Increases in average loans and investment securities of $678.2 million and $42.5 million, respectively, were partially offset by a decrease in federal funds sold and cash investments of $159.1 million.
Average loans increased $678.2 million in the second quarter of 2023 compared to the same quarter of 2022. Average commercial loans increased $115.5 million. Included in this category are commercial FHA warehouse lines. Average commercial FHA warehouse lines decreased $93.2 million to $13.4 million in the second quarter of 2023. Excluding the changes in the commercial FHA warehouse line portfolio, average commercial loans increased $208.7 million in the second quarter of 2023 compared to the same period one year prior.
45
Table of Contents
Average commercial real estate loans increased this quarter by $229.7 million, compared to the prior year's second quarter. Average balances in our construction loans, consumer loans and lease portfolios also increased this quarter by $154.0 million, $68.0 million and $70.6 million, respectively, compared to the prior year second quarter.
For the six months ended June 30, 2023, interest income, on a tax-equivalent basis, increased $63.8 million to $196.5 million as compared to the same period in 2022, primarily due to improved yields on earning assets. The yield on earning assets increased 143 points to 5.43% from 4.00%, primarily due to the impact of increasing market interest rates.
Average earning assets increased to $7.30 billion in the first six months of 2023 from $6.70 billion in the same period in 2022. An increase in average loans of $861.3 million was partially offset by a $228.7 million decrease in federal funds sold and cash investments.
Average commercial loans increased $129.9 million for the six months ended June 30, 2023 compared to the same period of 2022. Commercial FHA warehouse lines decreased $63.4 million to $13.4 million in the first half of 2023. Excluding the changes in the commercial FHA warehouse line portfolio, average commercial loans increased $193.3 million for the six months ended June 30, 2023 compared to the same period one year prior.
Average balances in our commercial real estate loan portfolio increased by $369.7 million for the six months ended June 30, 2023 compared to the same period of 2022. Average construction loans, consumer loans and lease portfolios also increased $141.8 million, $108.8 million and $73.3 million, respectively, for the six months ended June 30, 2023 compared to the same period of 2022.
Interest Expense. Interest expense increased $33.7 million to $41.7 million for the three months ended June 30, 2023 compared to the three months ended June 30, 2022. The cost of interest-bearing liabilities increased to 2.83% for the second quarter of 2023 compared to 0.60% for the second quarter of 2022 due to the increase in deposit costs as a result of the rate increases announced by the Federal Reserve.
Interest expense on deposits increased $29.8 million to $33.6 million for the three months ended June 30, 2023 from the comparable period in 2022. The increase was primarily due to an increase in rates paid on deposits. Average balances of interest-bearing deposit accounts increased $540.4 million, or 11.45%, to $5.26 billion for the three months ended June 30, 2023 compared to the same period one year earlier. The increase in volume was attributable to increases of retail deposits, servicing deposits and brokered deposits of $148.5 million, $41.3 million, and $58.4 million, respectively. In addition, our Insured Cash Sweep product average balances increased $351.7 million.
For the six month period ended June 30, 2023, interest expense increased $62.9 million to $76.7 million compared to the six months ended June 30, 2022. The cost of interest-bearing liabilities increased to 2.65% for the first six months of 2023 compared to 0.54% for the same period of 2022. Interest expense on deposits increased to $60.0 million from $6.0 million for the comparable period in 2022, primarily due to increases in interest rates on deposits.

Interest expense on FHLB advances and other borrowings increased $4.0 million and $8.8 million for the three and six months ended June 30, 2023, respectively, from the comparable periods in 2022. Average balances increased $164.4 million and $196.5 million for the three and six months ended June 30, 2023, respectively, from the comparable periods in 2022.

Interest expense on subordinated debt decreased $0.7 million and $1.3 million for the three and six months ended June 30, 2023, respectively, from the comparable periods in 2022. The Company redeemed $6.6 million of subordinated debt in the second quarter of 2023 and $40.0 million of subordinated debt on October 15, 2022.

Interest expense on trust preferred debentures increased $0.7 million and $1.4 million for the three and six months ended June 30, 2023, respectively, from the comparable periods in 2022, due to interest rate increases, as these debt instruments reprice quarterly.
Provision for Credit Losses. The Company's provision for credit losses totaled $5.9 million for the three months ended June 30, 2023, all of which was attributable to loans. Provision for credit losses for the three months ended June 30, 2022 was $5.4 million, with $4.7 million expense attributable to loans and $0.7 million expense related to unfunded loan commitments. For the six months ended June 30, 2023 and 2022, the Company recorded provision expense of $9.0 million and $9.6 million, respectively.
The provision for credit losses on loans recognized during the three and six months ended June 30, 2023 was made at a level deemed necessary by management to absorb estimated losses in the loan portfolio. A detailed evaluation of the adequacy
46
Table of Contents
of the allowance for credit losses is completed quarterly by management, the results of which are used to determine provision for credit losses. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions and reasonable and supportable forecasts along with other qualitative and quantitative factors.
Noninterest Income. Noninterest income increased 28.33% for the three months ended June 30, 2023, compared to the same period one year prior, and increased 14.25% for the six months ended June 30, 2023, compared to the same period one year prior. The following table sets forth the major components of our noninterest income for the three and six months ended June 30, 2023 and 2022:
Three Months Ended June 30,Increase
(decrease)		Six Months Ended June 30,Increase
(decrease)
(dollars in thousands)2023202220232022
Noninterest income:
Wealth management revenue$6,269 $6,143 $126 $12,680 $13,282 $(602)
Residential mortgage banking revenue540 384 156 945 983 (38)
Service charges on deposit accounts2,677 2,304 373 5,245 4,372 873 
Interchange revenue3,696 3,590 106 7,108 6,870 238 
Loss on sales of investment securities, net(869)(101)(768)(1,517)(101)(1,416)
Impairment on commercial mortgage servicing rights— (869)869 — (1,263)1,263 
Company-owned life insurance891 840 51 1,767 1,859 (92)
Other income5,549 2,322 3,227 8,304 4,224 4,080 
Total noninterest income$18,753 $14,613 $4,140 $34,532 $30,226 $4,306 
Wealth management revenue. Wealth management revenue decreased $0.6 million for the six months ended June 30, 2023, as compared to the same period in 2022. Assets under administration increased to $3.59 billion at June 30, 2023 from $3.50 billion at June 30, 2022, primarily due to an increase in market performance in 2023.

Loss on sale of investment securities. The Company took advantage of certain market conditions during the three and six months ended June 30, 2023 to reposition out of lower yielding securities into other structures, which are expected to result in improved overall margin, liquidity and capital allocations. These transactions resulted in losses of $0.9 million and $1.5 million in the three and six months ended June 30, 2023, with expected paybacks to occur within a one year period.

Other noninterest income. Other income increased $3.2 million and $4.1 million for the three and six months ended June 30, 2023, respectively, as compared to the same periods in 2022. As mentioned previously, the Company recognized a gain of $0.7 million on the redemption of subordinated debt in the second quarter of 2023. Also in the second quarter of 2023, we recognized a gain of $0.8 million on the sale of OREO. Net unrealized gains on our equity securities increased $0.6 million and $1.3 million for the three and six months ended June 30, 2023, respectively, compared to the same periods in 2022. As a result of designating our commercial FHA loan servicing rights as held for sale, we did not amortize the servicing asset nor record impairment in 2023. In the three and six months ended June 30, 2022, amortization expense totaled $0.6 million and $1.3 million, respectively.
47
Table of Contents
Noninterest Expense. The following table sets forth the major components of noninterest expense for the three and six months ended June 30, 2023 and 2022:
Three Months Ended June 30,Increase
(decrease)		Six Months Ended June 30,Increase
(decrease)
(dollars in thousands)2023202220232022
Noninterest expense:
Salaries and employee benefits$22,857 $22,645 $212 $47,100 $44,515 $2,585 
Occupancy and equipment3,879 3,489 390 8,322 7,244 1,078 
Data processing6,544 6,082 462 12,855 11,955 900 
FDIC insurance1,196 826 370 2,525 1,656 869 
Professional1,663 1,516 147 3,423 3,488 (65)
Marketing670 733 (63)1,373 1,421 (48)
Communications496 635 (139)1,007 1,347 (340)
Loan expense1,420 1,137 283 2,238 2,080 158 
Amortization of intangible assets1,208 1,318 (110)2,499 2,716 (217)
Other expense2,961 2,958 3 6,034 5,801 233 
Total noninterest expense$42,894 $41,339 $1,555 $87,376 $82,223 $5,153 
    Salaries and employee benefits. For the six months ended June 30, 2023, salaries and employee benefits expense increased $2.6 million as compared to the same period in 2022, primarily due to annual salary increases and increased medical insurance expense. The Company employed 915 employees at June 30, 2023 compared to 932 employees at June 30, 2022.
Occupancy and Equipment Expense. For the six months ended June 30, 2023, occupancy and equipment expense increased $1.1 million as compared to the same period in 2022 primarily as a result of the non-controllable seasonal expenses in the first quarter of 2023, including snow removal. In addition, the Company transitioned to an outsourced facilities management program and incurred increased repair expenses as a result of deferred maintenance.
Data processing fees. The $0.5 million and $0.9 million increases in data processing fees for the three and six months ended June 30, 2023, respectively, as compared to the same periods in 2022 were primarily the result of our continuing investments in technology to better serve our growing customer base and increased transaction volumes.
FDIC Insurance Expense. For the three and six months ended June 30, 2023, FDIC insurance expense increased $0.4 million and $0.9 million, respectively, as compared to the same periods in 2022, primarily as a result of the FDIC increasing the base assessment rate by 2 basis points, effective January 1, 2023.
Income Tax Expense. Income tax expense was $7.2 million for the three months ended June 30, 2023, as compared to $7.3 million for the three months ended June 30, 2022. The resulting effective tax rates were 25.1% and 25.0% for the three months ended June 30, 2023 and 2022, respectively.
Income tax expense was $14.1 million for the six months ended June 30, 2023, as compared to $13.9 million for the six months ended June 30, 2022. The resulting effective tax rates were 24.6% for each of the six months ended June 30, 2023 and 2022.
Financial Condition
Assets. Total assets increased to $8.03 billion at June 30, 2023, as compared to $7.86 billion at December 31, 2022.
48
Table of Contents
Loans. The loan portfolio is the largest category of our assets. At June 30, 2023, total loans were $6.37 billion as compared to $6.31 billion at December 31, 2022. The following table shows loans by category as of June 30, 2023 and December 31, 2022:
June 30, 2023December 31, 2022
(dollars in thousands)Book Value%Book Value%
Loans:
Commercial:
Equipment finance loans$614,633 9.7 %$616,751 9.8 %
Equipment finance leases500,485 7.9 491,744 7.8 
Commercial FHA lines30,522 0.5 25,029 0.4 
Other commercial loans962,756 15.1 872,794 13.8 
Total commercial loans and leases2,108,396 33.2 2,006,318 31.8 
Commercial real estate2,443,995 38.4 2,433,159 38.6 
Construction and land development366,631 5.7 320,882 5.1 
Residential real estate371,486 5.8 366,094 5.8 
Consumer1,076,836 16.9 1,180,014 18.7 
Total loans, gross6,367,344 100.0 %6,306,467 100.0 %
Allowance for credit losses on loans(64,950)(61,051)
Total loans, net$6,302,394 $6,245,416 

Total loans increased $60.9 million to $6.37 billion at June 30, 2023, as compared to December 31, 2022. The loan growth was primarily reflected in our commercial loans and leases, and construction and land development portfolios, which increased $102.1 million and $45.7 million, respectively.
Commercial loans and leases, which includes commercial FHA warehouse lines, increased $102.1 million to $2.11 billion at June 30, 2023, as compared to December 31, 2022. Advances on commercial FHA warehouse lines increased $5.5 million to $30.5 million at June 30, 2023. Excluding the increase in commercial FHA warehouse lines, commercial loans and leases increased $96.6 million.
Consumer loans decreased $103.2 million at June 30, 2023 primarily due to a decrease in loans originated through the program with GreenSky. On January 24, 2023, the Company notified GreenSky that, effective October 21, 2023, the Company would terminate its participation in GreenSky’s loan origination program. Following the termination, GreenSky is expected to continue servicing all loans originated through the program.
The principal segments of our loan portfolio are discussed below:
Commercial loans. We provide a mix of variable and fixed rate commercial loans. The loans are typically made to small- and medium-sized manufacturing, wholesale, retail and service businesses for working capital needs, business expansions and farm operations. Commercial loans generally include lines of credit and loans with maturities of five years or less. The loans are generally made with business operations as the primary source of repayment, but may also include collateralization by inventory, accounts receivable and equipment, and generally include personal guarantees. The commercial loan category also includes loans originated by the equipment financing business that are secured by the underlying equipment.
Commercial real estate loans. Our commercial real estate loans consist of both real estate occupied by the borrower for ongoing operations and non-owner occupied real estate properties. The real estate securing our existing commercial real estate loans includes a wide variety of property types, such as owner occupied offices, warehouses and production facilities, office buildings, hotels, mixed-use residential and commercial facilities, retail centers, multifamily properties and assisted living facilities. Our commercial real estate loan portfolio also includes farmland loans. Farmland loans are generally made to a borrower actively involved in farming rather than to passive investors.
Construction and land development loans. Our construction and land development loans are comprised of residential construction, commercial construction and land acquisition and development loans. Interest reserves are generally established on real estate construction loans.
49
Table of Contents
Residential real estate loans. Our residential real estate loans consist of residential properties that generally do not qualify for secondary market sale.
Consumer loans. Our consumer loans include direct personal loans, indirect automobile loans, lines of credit and installment loans originated through home improvement specialty retailers and contractors. Personal loans are generally secured by automobiles, boats and other types of personal property and are made on an installment basis.
Lease financing. Our equipment leasing business provides financing leases to varying types of businesses nationwide for purchases of business equipment and software. The financing is secured by a first priority interest in the financed asset and generally requires monthly payments.
The following table shows the contractual maturities of our loan portfolio and the distribution between fixed and adjustable interest rate loans at June 30, 2023:
June 30, 2023
Within One YearOne Year to Five YearsFive Years to 15 YearsAfter 15 Years
(dollars in thousands)Fixed RateAdjustable
Rate		Fixed RateAdjustable
Rate		Fixed RateAdjustable
Rate		Fixed RateAdjustable
Rate		Total
Commercial$103,361 $413,526 $667,884 $104,191 $188,877 $93,196 $— $36,876 $1,607,911 
Commercial real estate164,963 308,711 978,946 398,809 377,862 190,462 5,718 18,524 2,443,995 
Construction and land development6,307 69,536 107,084 128,630 20,211 32,063 1,015 1,785 366,631 
Total commercial loans274,631 791,773 1,753,914 631,630 586,950 315,721 6,733 57,185 4,418,537 
Residential real estate1,194 3,385 8,345 18,556 28,221 38,652 155,488 117,645 371,486 
Consumer1,623 3,043 1,042,478 536 29,156 — — — 1,076,836 
Lease financing14,899 — 370,336 — 115,250 — — — 500,485 
Total loans$292,347 $798,201 $3,175,073 $650,722 $759,577 $354,373 $162,221 $174,830 $6,367,344 
Loan Quality
We use what we believe is a comprehensive methodology to monitor credit quality and prudently manage credit concentration within our loan portfolio. Our underwriting policies and practices govern the risk profile, credit and geographic concentration for our loan portfolio. We also have what we believe to be a comprehensive methodology to monitor these credit quality standards, including a risk classification system that identifies potential problem loans based on risk characteristics by loan type as well as the early identification of deterioration at the individual loan level.
Analysis of the Allowance for Credit Losses on Loans. The allowance for credit losses on loans was $65.0 million, or 1.02% of total loans, at June 30, 2023 compared to $61.1 million, or 0.97% of total loans, at December 31, 2022. The following table allocates the allowance for credit losses on loans by loan category:
June 30, 2023December 31, 2022
(dollars in thousands)Allowance
% (1)
Allowance
% (1)
Commercial$15,290 0.95 %$14,639 0.97 %
Commercial real estate29,425 1.20 29,290 1.20 
Construction and land development3,189 0.87 2,435 0.76 
Total commercial loans47,904 1.08 46,364 1.09 
Residential real estate5,551 1.49 4,301 1.17 
Consumer3,953 0.37 3,599 0.30 
Lease financing7,542 1.51 6,787 1.38 
Total allowance for credit losses on loans$64,950 1.02 %$61,051 0.97 %
(1)Represents the percentage of the allowance to total loans in the respective category.
We measure expected credit losses over the life of each loan utilizing a combination of models which measure probability of default and loss given default, among other things. The measurement of expected credit losses is impacted by loan and borrower attributes and certain macroeconomic variables. Models are adjusted to reflect the impact of certain current macroeconomic variables as well as their expected changes over a reasonable and supportable forecast period.
50
Table of Contents
The allowance allocated to commercial loans totaled $15.3 million, or 0.95% of total commercial loans, at June 30, 2023, compared to $14.6 million, or 0.97%, at December 31, 2022. Modeled expected credit losses increased $0.2 million and qualitative factor ("Q-Factor") adjustments related to commercial loans increased $0.5 million.
The allowance allocated to residential real estate loans totaled $5.6 million, or 1.49% of total residential real estate loans at June 30, 2023, compared to $4.3 million, or 1.17%, at December 31, 2022. Modeled expected credit losses increased $0.9 million and Q-Factor adjustments increased $0.3 million.
The allowance allocated to consumer loans totaled $4.0 million, or 0.37% of total consumer loans at June 30, 2023, compared to $3.6 million, or 0.30%, at December 31, 2022. The allowance allocated to the GreenSky portfolio increased to 30 basis points as of June 30, 2023 compared to 25 basis points as of December 31, 2022, due to residual risk as the portfolio starts paying down and credit enhancements shrink. In addition, specific allocations for consumer loans that were evaluated for expected credit losses on an individual basis increased $0.2 million.
The allowance allocated to the lease portfolio totaled $7.5 million, or 1.51% of total commercial leases, at June 30, 2023, increasing $0.7 million from $6.8 million, or 1.38% of total commercial leases at December 31, 2022. Modeled expected credit losses increased $0.5 million and specific allocations for leases that were evaluated for expected credit losses on an individual basis increased $0.2 million.
In estimating expected credit losses as of June 30, 2023, we utilized certain forecasted macroeconomic variables from Oxford Economics in our models. The forecasted projections included, among other things, (i) expectations of a recession to occur in second half of 2023 because of past rate hikes by the Fed and the lagged effect of recent tightening in lending standards; U.S. gross domestic product growth of 1.3% for 2023 and 0.4% for 2024; (ii) Federal Reserve holding the policy rate through year end with a gradual decrease in 2024; and (iii) unemployment rate averaging 3.9% for 2023, increasing to an average of 5.2% for 2024. While these economic metrics indicate an improvement from the prior quarter, they still point to a slowing economy.
We qualitatively adjust the model results based on this scenario for various risk factors that are not considered within our modeling processes but are nonetheless relevant in assessing the expected credit losses within our loan pools. Q-Factor adjustments are based upon management judgment and current assessment as to the impact of risks related to changes in lending policies and procedures; economic and business conditions; loan portfolio attributes and credit concentrations; and external factors, among other things, that are not already captured within the modeling inputs, assumptions and other processes. Management assesses the potential impact of such items within a range of severely negative impact to positive impact and adjusts the modeled expected credit loss by an aggregate adjustment percentage based upon the assessment. As a result of this assessment as of June 30, 2023, modeled expected credit losses were adjusted upwards with a Q-Factor adjustment of approximately 52 basis points of total loans, increasing from 50 basis points at December 31, 2022. The Q-Factor adjustment at June 30, 2023 was based primarily on declining economic conditions, including rising inflation fears.

51
Table of Contents
The following table provides an analysis of the allowance for credit losses on loans, provision for credit losses on loans and net charge-offs for the three and six months ended June 30, 2023 and 2022:
Three Months Ended June 30,Six Months Ended June 30,
(dollars in thousands)2023202220232022
Balance, beginning of period$62,067 $52,938 $61,051 $51,062 
Charge-offs:
Commercial1,071 60 2,040 2,214 
Commercial real estate1,544 2,625 2,290 2,852 
Construction and land development334 — 334 6 
Residential real estate54 46 85 150 
Consumer260 191 523 496 
Lease financing771 499 1,161 705 
Total charge-offs4,034 3,421 6,433 6,423 
Recoveries:
Commercial403 298 497 309 
Commercial real estate326 (62)328 5 
Construction and land development32 6 32 12 
Residential real estate48 41 65 154 
Consumer80 98 173 260 
Lease financing149 259 223 646 
Total recoveries1,038 640 1,318 1,386 
Net charge-offs2,996 2,781 5,115 5,037 
Provision for credit losses on loans5,879 4,741 9,014 8,873 
Balance, end of period$64,950 $54,898 $64,950 $54,898 
Gross loans, end of period$6,367,344 $5,795,544 $6,367,344 $5,795,544 
Average total loans$6,356,012 $5,677,791 $6,338,305 $5,477,037 
Net charge-offs to average loans0.19 %0.20 %0.16 %0.19 %
Allowance for credit losses to total loans1.02 %0.95 %1.02 %0.95 %
Individual loans considered to be uncollectible are charged off against the allowance. Factors used in determining the amount and timing of charge-offs on loans include consideration of the loan type, length of delinquency, sufficiency of collateral value, lien priority and the overall financial condition of the borrower. Collateral value is determined using updated appraisals and/or other market comparable information. Charge-offs are generally taken on loans once the impairment is determined to be other-than-temporary. Recoveries on loans previously charged off are added to the allowance. Net charge-offs for the three months ended June 30, 2023 totaled $3.0 million, compared to $2.8 million for the same period one year ago. For the six months ended June 30, 2023, net charge-offs totaled $5.1 million, compared to $5.0 million for the same period one year ago.
52
Table of Contents
Nonperforming Loans. The following table sets forth our nonperforming assets by asset categories as of the dates indicated. Nonperforming loans include nonaccrual loans and loans past due 90 days or more and still accruing interest. The balances of nonperforming loans reflect the net investment in these assets, including deductions for purchase discounts.
(dollars in thousands)June 30, 2023December 31, 2022
Nonperforming loans:
Commercial$6,181 $7,853 
Commercial real estate38,610 29,602 
Construction and land development2,234 229 
Residential real estate3,955 8,449 
Consumer97 921 
Lease financing3,767 2,369 
Total nonperforming loans54,844 49,423 
Other real estate owned and other repossessed assets2,844 8,401 
Nonperforming assets$57,688 $57,824 
Nonperforming loans to total loans0.86 %0.78 %
Nonperforming assets to total assets0.72 %0.74 %
Allowance for credit losses to nonperforming loans118.43 %123.53 %
We did not recognize interest income on nonaccrual loans during the three months ended June 30, 2023 or 2022 while the loans were in nonaccrual status. Additional interest income that would have been recorded on nonaccrual loans had they been current in accordance with their original terms was $0.8 million and $1.6 million for the three and six months ended June 30, 2023, respectively, and $0.5 million and $1.3 million for the three and six months ended June 30, 2022, respectively.
We utilize an asset risk classification system in compliance with guidelines established by the Federal Reserve as part of our efforts to improve asset quality. In connection with examinations of insured institutions, examiners have the authority to identify problem assets and, if appropriate, classify them. There are three classifications for problem assets: “substandard,” “doubtful,” and “loss.” Substandard assets have one or more defined weaknesses and are characterized by the distinct possibility that the insured institution will sustain some loss if the deficiencies are not corrected. Doubtful assets have the weaknesses of substandard assets with the additional characteristic that the weaknesses make collection or liquidation in full questionable and there is a high probability of loss based on currently existing facts, conditions and values. An asset classified as loss is not considered collectable and is of such little value that continuance of booking the asset is not warranted.
We use a ten grade risk rating system to categorize and determine the credit risk of our loans. Potential problem loans include loans with a risk grade of 7, which are "special mention," and loans with a risk grade of 8, which are "substandard" loans that are not considered to be nonperforming. These loans generally require more frequent loan officer contact and receipt of financial data to closely monitor borrower performance. Potential problem loans are managed and monitored regularly through a number of processes, procedures and committees, including oversight by a loan administration committee comprised of executive officers and other members of the Bank's senior management team.
The following table presents the recorded investment of potential problem commercial loans by loan category at the dates indicated:
CommercialCommercial
real estate		Construction &
land development
Risk categoryRisk categoryRisk category
(dollars in thousands)7
8 (1)
7
8 (1)
7
8 (1)
Total
June 30, 2023$10,545 $29,183 $28,440 $95,203 $60 $6,000 $169,431 
December 31, 202212,693 9,579 42,770 82,949 210 8,415 156,616 
(1)Includes only those 8-rated loans that are not included in nonperforming loans.
    Commercial loans with a risk rating of 7 or 8 increased $17.5 million to $39.7 million as of June 30, 2023, compared to $22.3 million as of December 31, 2022. The increase was due to a single commercial loan that was down graded in the second quarter of 2023. Commercial real estate loans with a risk rating of 7 or 8 decreased $2.1 million to $123.6 million as of June 30, 2023, compared to $125.7 million as of December 31, 2022, primarily due to risk rating upgrades within the portfolio.
53
Table of Contents
Investment Securities. Our investment strategy aims to maximize earnings while maintaining liquidity in securities with minimal credit risk. The types and maturities of securities purchased are primarily based on our current and projected liquidity and interest rate sensitivity positions.
The following table sets forth the book value and percentage of each category of investment securities at June 30, 2023 and December 31, 2022. The book value for investment securities classified as available for sale is equal to fair market value.
June 30, 2023December 31, 2022
(dollars in thousands)Book
Value		% of
Total		Book
Value		% of
Total
Investment securities available for sale:                
U.S. Treasury securities$42,746 4.8 %$81,230 10.6 %
U.S. government sponsored entities and U.S. agency securities73,458 8.3 37,509 4.9 
Mortgage-backed securities - agency538,634 61.0 448,150 58.3 
Mortgage-backed securities - non-agency65,911 7.5 20,754 2.7 
State and municipal securities57,494 6.5 94,636 12.3 
Collateralized loan obligations22,709 2.6 — — 
Corporate securities81,763 9.3 85,955 11.2 
Total investment securities, available for sale, at fair value$882,715 100.0 %$768,234 100.0 %
    
The following table sets forth the book value, maturities and weighted average yields for our investment portfolio at June 30, 2023. The book value for investment securities classified as available for sale is equal to fair market value.
54
Table of Contents
(dollars in thousands)Book value% of totalWeighted average yield
Investment securities available for sale:            
U.S. Treasury securities:
Maturing within one year$1,263 0.1 %3.26 %
Maturing in one to five years41,483 4.8 1.01 
Maturing in five to ten years— — — 
Maturing after ten years— — — 
Total U.S. Treasury securities$42,746 4.9 %1.07 %
U.S. government sponsored entities and U.S. agency securities:
Maturing within one year$9,970 1.1 %4.89 %
Maturing in one to five years55,358 6.3 4.13 
Maturing in five to ten years8,130 0.9 1.00 
Maturing after ten years— — — 
Total U.S. government sponsored entities and U.S. agency securities$73,458 8.3 %3.82 %
Mortgage-backed securities - agency:
Maturing within one year$6,927 0.8 %2.44 %
Maturing in one to five years241,929 27.4 3.60 
Maturing in five to ten years104,984 11.9 3.27 
Maturing after ten years184,794 20.9 2.17 
Total mortgage-backed securities - agency$538,634 61.0 %3.00 %
Mortgage-backed securities - non-agency:
Maturing within one year$14,532 1.6 %5.95 %
Maturing in one to five years31,231 3.5 6.01 
Maturing in five to ten years274 — 3.58 
Maturing after ten years19,874 2.3 2.52 
Total mortgage-backed securities - non-agency$65,911 7.4 %4.80 %
State and municipal securities (1):
Maturing within one year$1,385 0.2 %3.32 %
Maturing in one to five years9,243 1.0 2.92 
Maturing in five to ten years7,788 0.9 2.51 
Maturing after ten years39,078 4.4 2.53 
Total state and municipal securities$57,494 6.5 %2.61 %
Collateralized loan obligations:
Maturing within one year$11,145 1.3 %8.86 %
Maturing in one to five years11,564 1.3 6.47 
Maturing in five to ten years— — — 
Maturing after ten years— — — 
Total collateralized loan obligations$22,709 2.6 %7.64 %
Corporate securities:
Maturing within one year$— — %— %
Maturing in one to five years18,656 2.1 3.07 
Maturing in five to ten years26,977 3.1 4.15 
Maturing after ten years36,130 4.1 3.31 
Total corporate securities$81,763 9.3 %3.52 %
Total investment securities, available for sale$882,715 100.0 %3.23 %
(1)Weighted average yield for tax-exempt securities are presented on a tax-equivalent basis assuming a federal income tax rate of 21%.
55
Table of Contents
The table below presents the credit ratings for our investment securities classified as available for sale, at fair value, at June 30, 2023.
AmortizedEstimatedAverage credit rating
(dollars in thousands)costfair valueAAAAA+/-A+/-BBB+/-<BBB-Not Rated
Investment securities available for sale:
U.S. Treasury securities$46,636 $42,746 $41,195 $1,551 $— $— $— $— 
U.S. government sponsored entities and U.S. agency securities77,510 73,458 63,736 9,722 — — — — 
Mortgage-backed securities - agency612,214 538,634 7 538,627 — — — — 
Mortgage-backed securities - non-agency69,921 65,911 14,604 51,307 — — — — 
State and municipal securities64,481 57,494 649 56,588 — 257 — — 
Collateralized loan obligations22,709 22,709 14,362 8,347 — — — — 
Corporate securities95,172 81,763 — 43,961 16,722 21,080 — — 
Total investment securities, available for sale$988,643 $882,715 $134,553 $710,103 $16,722 $21,337 $— $— 
Liabilities. At June 30, 2023, liabilities totaled $7.26 billion compared to $7.10 billion at December 31, 2022.
Deposits. We emphasize developing total client relationships with our customers in order to increase our retail and commercial core deposit bases, which are our primary funding sources. Our deposits consist of noninterest-bearing and interest-bearing demand, savings and time deposit accounts.
Total deposits increased $61.9 million to $6.43 billion at June 30, 2023, as compared to December 31, 2022. Interest rate promotions offered in 2023 on money market and time deposit products resulted in increases in balances of $42.4 million and $251.1 million, respectively, at June 30, 2023, compared to December 31, 2022. These increases were partially offset by a decrease in noninterest-bearing demand account balances of $199.3 million, as a result of increasing deposit rates in response to the rate increases announced by the Federal Reserve.
(dollars in thousands)June 30, 2023December 31, 2022
Book Value% of TotalBook Value% of Total
Noninterest-bearing demand$1,162,909 18.1 %$1,362,158 21.4 %
Interest-bearing:
Checking2,499,693 38.9 2,494,073 39.2 
Money market1,226,470 19.1 1,184,101 18.6 
Savings624,005 9.7 661,932 10.4 
Time913,471 14.2 662,388 10.4 
Total deposits$6,426,548 100.0 %$6,364,652 100.0 %
56
Table of Contents
The following table summarizes our average deposit balances and weighted average rates for the three months ended June 30, 2023 and 2022:
Three months ended
June 30, 2023		Three months ended
June 30, 2022
(dollars in thousands)Average
Balance		Weighted Average RateAverage
Balance		Weighted Average Rate
Deposits:                
Noninterest-bearing demand$1,187,584 — $1,401,268 — 
Interest-bearing:
Checking2,529,185 2.92 %2,336,630 0.36 %
Money market1,242,638 2.94 1,030,144 0.32 
Savings626,818 0.25 719,204 0.05 
Time, insured651,203 2.42 476,233 0.47 
Time, uninsured153,377 3.14 139,381 0.59 
Time, brokered55,967 4.21 17,167 1.16 
Total interest-bearing5,259,188 2.56 4,718,759 0.32 
Total deposits$6,446,772 2.09 %$6,120,027 0.25 %
    The Company estimates that uninsured deposits(1) totaled $1.21 billion, or 19% of total deposits, at June 30, 2023 compared to $1.55 billion, or 24%, at December 31, 2022. The following table sets forth the maturity of uninsured time deposits as of June 30, 2023:
(dollars in thousands)Amount
Three months or less$11,124 
Three to six months68,088 
Six to 12 months 70,017 
After 12 months25,387 
Total$174,616 
(1) Uninsured deposits include the Call Report estimate of uninsured deposits less affiliate deposits, estimated insured portion of servicing deposits, additional structured FDIC coverage and collateralized deposits.
Capital Resources and Liquidity Management
Capital Resources. Shareholders’ equity is influenced primarily by earnings, dividends, issuances and redemptions of common and preferred stock and changes in accumulated other comprehensive income caused primarily by fluctuations in unrealized holding gains or losses, net of taxes, on available-for-sale investment securities and cash flow hedges.
Shareholders’ equity increased $18.2 million to $776.8 million at June 30, 2023 as compared to December 31, 2022. The Company generated net income of $43.3 million during 2023. Offsetting this increase to shareholders’ equity were dividends to common shareholders of $13.4 million, dividends to preferred shareholders of $4.5 million, repurchases of common stock of $9.0 million and an increase in accumulated other comprehensive losses of $1.0 million.
The Company has a share repurchase program, whereby the Board of Directors authorized the Company to repurchase up to $25.0 million of its common stock. This program terminates December 31, 2023. As of June 30, 2023, $8.9 million, or 432,809 shares of the Company’s common stock, had been repurchased under the program, with approximately $16.1 million of remaining repurchase authority.
Liquidity Management. Liquidity refers to the measure of our ability to meet the cash flow requirements of depositors and borrowers, while at the same time meeting our operating, capital and strategic cash flow needs, all at a reasonable cost. We continuously monitor our liquidity position to ensure that assets and liabilities are managed in a manner that will meet all short-term and long-term cash requirements. We manage our liquidity position to meet the daily cash flow needs of customers, while maintaining an appropriate balance between assets and liabilities to meet the return on investment objectives of our shareholders.
57
Table of Contents
Integral to our liquidity management is the administration of short-term borrowings. To the extent we are unable to obtain sufficient liquidity through core deposits, we seek to meet our liquidity needs through wholesale funding or other borrowings on either a short- or long-term basis.
Securities sold under agreements to repurchase, which are classified as secured borrowings, generally mature within one to four days from the transaction date. Securities sold under agreements to repurchase are reflected at the amount of cash received in connection with the transaction, which represents the amount of the Bank’s obligation. The Bank may be required to provide additional collateral based on the fair value of the underlying securities. Investment securities with a carrying amount of $28.8 million and $46.1 million at June 30, 2023 and December 31, 2022, respectively, were pledged for securities sold under agreements to repurchase.
The table below presents our sources of liquidity as of June 30, 2023 and December 31, 2022:
(dollars in thousands)June 30, 2023December 31, 2022
Cash and cash equivalents$160,695 $160,631 
Unpledged securities343,501 209,184 
FHLB committed liquidity857,207 997,388 
FRB discount window availability184,107 12,201 
Total Estimated Liquidity$1,545,510 $1,379,404 
Conditional Funding Based on Market Conditions
Additional credit facility$330,000 $250,000 
Brokered CDs (additional capacity)$400,000 $500,000 
The Company is a corporation separate and apart from the Bank and, therefore, must provide for its own liquidity. The Company’s main source of funding is dividends declared and paid to it by the Bank. There are statutory, regulatory and debt covenant limitations that affect the ability of the Bank to pay dividends to the Company. Management believed at June 30, 2023, that these limitations will not impact our ability to meet our ongoing short-term cash obligations.
Regulatory Capital Requirements
We are subject to various regulatory capital requirements administered by the federal and state banking regulators. Failure to meet regulatory capital requirements may result in certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our financial statements. Under capital adequacy guidelines and the regulatory framework for “prompt corrective action”, we must meet specific capital guidelines that involve quantitative measures of our assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting policies.
In December 2018, the Office of the Comptroller of the Currency, the Federal Reserve, and the FDIC approved a final rule to address changes to credit loss accounting under GAAP, including banking organizations’ implementation of CECL. The final rule provides banking organizations the option to phase in over a three-year period the day-one adverse effects on regulatory capital that may result from the adoption of the CECL accounting standard. In March 2020, the Office of the Comptroller of the Currency, the Federal Reserve, and the FDIC published an interim final rule to delay the estimated impact on regulatory capital stemming from the implementation of CECL. The interim final rule maintains the three-year transition option in the previous rule and provides banks the option to delay for two years an estimate of CECL’s effect on regulatory capital, relative to the incurred loss methodology’s effect on regulatory capital, followed by a three-year transition period (five-year transition option). The Company is adopting the capital transition relief over the permissible five-year period.
At June 30, 2023, the Company and the Bank exceeded the regulatory minimums and met the regulatory definition of well-capitalized.
58
Table of Contents
The following table presents the Company's and the Bank’s capital ratios and the minimum requirements at June 30, 2023:
RatioActual
Minimum
Regulatory
Requirements (1)
Well
Capitalized
Total risk-based capital ratio
Midland States Bancorp, Inc.12.65 %10.50 %N/A
Midland States Bank11.89 10.50 10.00 %
Tier 1 risk-based capital ratio
Midland States Bancorp, Inc.10.47 8.50 N/A
Midland States Bank11.01 8.50 8.00 
Common equity tier 1 risk-based capital ratio
Midland States Bancorp, Inc.8.03 7.00 N/A
Midland States Bank11.01 7.00 6.50 
Tier 1 leverage ratio
Midland States Bancorp, Inc.9.57 4.00 N/A
Midland States Bank10.07 4.00 5.00 
(1)Total risk-based capital ratio, Tier 1 risk-based capital ratio and Common equity tier 1 risk-based capital ratio include the capital conservation buffer of 2.5%.
Quantitative and Qualitative Disclosures About Market Risk
Market Risk. Market risk represents the risk of loss due to changes in market values of assets and liabilities. We incur market risk in the normal course of business through exposures to market interest rates, equity prices, and credit spreads. We are primarily exposed to interest rate risk as a result of offering a wide array of financial products to our customers and secondarily to price risk from investments in securities backed by mortgage loans.
Interest Rate Risk. Interest rate risk is the risk to earnings arising from changes in market interest rates. Interest rate risk arises from timing differences in the repricings and maturities of interest-earning assets and interest-bearing liabilities (reprice risk), changes in the expected maturities of assets and liabilities arising from embedded options, such as borrowers’ ability to prepay residential mortgage loans at any time and depositors’ ability to redeem certificates of deposit before maturity (option risk), changes in the shape of the yield curve where interest rates increase or decrease in a nonparallel fashion (yield curve risk), and changes in spread relationships between different yield curves, such as U.S. Treasuries and LIBOR (basis risk).
We actively manage interest rate risk, as changes in market interest rates may have a significant impact on reported earnings. Changes in market interest rates may result in changes in the fair market value of our financial instruments, cash flows, and net interest income. We seek to achieve consistent growth in net interest income while managing volatility arising from shifts in market interest rates. Our Board of Directors’ Risk Policy and Compliance Committee oversees interest rate risk, as well as the establishment of risk measures, limits, and policy guidelines for managing the amount of interest rate risk and its effect on net interest income. The Committee meets quarterly to monitor the level of interest rate risk sensitivity to ensure compliance with the board of directors’ approved risk limits.
Interest rate risk management is an active process that encompasses monitoring loan and deposit flows complemented by investment and funding activities. Effective management of interest rate risk begins with understanding the dynamic characteristics of assets and liabilities and determining the appropriate interest rate risk posture given business forecasts, management objectives, market expectations, and policy constraints.
An asset sensitive position refers to a balance sheet position in which an increase in short-term interest rates is expected to generate higher net interest income, as rates earned on our interest-earning assets would reprice upward more quickly than rates paid on our interest-bearing liabilities, thus expanding our net interest margin. Conversely, a liability sensitive position refers to a balance sheet position in which an increase in short-term interest rates is expected to generate lower net interest income, as rates paid on our interest-bearing liabilities would reprice upward more quickly than rates earned on our interest-earning assets, thus compressing our net interest margin.
Interest rate risk measurement is calculated and reported to the Risk Policy and Compliance Committee at least quarterly. The information reported includes period-end results and identifies any policy limits exceeded, along with an assessment of the policy limit breach and the action plan and timeline for resolution, mitigation, or assumption of the risk.
59
Table of Contents
We use Net Interest Income at Risk (“NII at Risk”) to model interest rate risk utilizing various assumptions for assets, liabilities, and derivatives. NII at Risk uses net interest income simulation analysis which involves forecasting net interest earnings under a variety of scenarios including changes in the level of interest rates, the shape of the yield curve, and spreads between market interest rates. The sensitivity of net interest income to changes in interest rates is measured using numerous interest rate scenarios including shocks, gradual ramps, curve flattening, curve steepening as well as forecasts of likely interest rates scenarios. Modeling the sensitivity of net interest earnings to changes in market interest rates is highly dependent on numerous assumptions incorporated into the modeling process. To the extent that actual performance is different than what was assumed, actual net interest earnings sensitivity may be different than projected. We use a data warehouse to study interest rate risk at a transactional level and use various ad-hoc reports to continuously refine assumptions. Assumptions and methodologies regarding administered rate liabilities (e.g., savings accounts, money market accounts and interest-bearing checking accounts), balance trends, and repricing relationships reflect our best estimate of expected behavior and these assumptions are reviewed periodically.
The following table shows NII at Risk at the dates indicated:
Net interest income sensitivity (Shocks)
Immediate change in rates
(dollars in thousands)-100+100+200
June 30, 2023:            
Dollar change$(9,439)$10,748 $20,948 
Percent change(3.4)%3.9 %7.5 %
December 31, 2022:
Dollar change$(12,560)$10,814 $21,357 
Percent change(4.2)%3.6 %7.2 %
We report NII at Risk to isolate the change in income related solely to interest-earning assets and interest-bearing liabilities. The NII at Risk results included in the table above reflect the analysis used quarterly by management. It models −100, +100 and +200 basis point parallel shifts in market interest rates, implied by the forward yield curve over the next twelve months. We were within board policy limits for the -100, +100 and +200 basis point scenarios at June 30, 2023.
Tolerance levels for risk management require the continuing development of remedial plans to maintain residual risk within approved levels as we adjust the balance sheet. NII at Risk reported at June 30, 2023 projects that our earnings exhibit increasing sensitivity to changes in interest rates for both rising rate scenarios compared to December 31, 2022.
Price Risk. Price risk represents the risk of loss arising from adverse movements in the prices of financial instruments that are carried at fair value and are subject to fair value accounting. We have price risk from mortgage-backed securities, derivative instruments, and equity investments.
ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The quantitative and qualitative disclosures about market risk are included under “Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Quantitative and Qualitative Disclosures about Market Risk”.
60
Table of Contents

ITEM 4 – CONTROLS AND PROCEDURES
Evaluation of disclosure controls and procedures. The Company’s management, including our President and
Chief Executive Officer and our Chief Financial Officer, have evaluated the effectiveness of our “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)), as of the end of the period covered by this report. Based on such evaluation, our President and Chief Executive Officer and our Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective as of that date to provide reasonable assurance that the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its President and Chief Executive Officer and its Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in internal control over financial reporting. There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II – OTHER INFORMATION
ITEM 1 – LEGAL PROCEEDINGS
In the normal course of business, we are named or threatened to be named as a defendant in various lawsuits, none of which we expect to have a material effect on the Company. However, given the nature, scope and complexity of the extensive legal and regulatory landscape applicable to our business (including laws and regulations governing consumer protection, fair lending, fair labor, privacy, information security, anti-money laundering and anti-terrorism), we, like all banking organizations, are subject to heightened legal and regulatory compliance and litigation risk. There are no material pending legal proceedings to which the Company or any of its subsidiaries is a party or of which any of their property is the subject.
ITEM 1A– RISK FACTORS
There have been no material changes from the risk factors previously disclosed in the “Risk Factors” section included in our Annual Report on Form 10-K for the year ended December 31, 2022.
61
Table of Contents

ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Unregistered Sales of Equity Securities
None.
Issuer Purchases of Equity Securities
The following table sets forth information regarding the Company’s repurchase of shares of its outstanding common stock during the second quarter of 2023.
Period
Total number of shares purchased(1)
Average price paid per shareTotal number of shares purchased as part of publicly announced plans or programs
Approximate dollar value of shares that may yet be purchased under the plans or programs (2)
April 1 - 30, 202397,089 $20.60 97,089 $20,198,578 
May 1 - 31, 2023208,150 19.39 206,366 16,196,525 
June 1 - 30, 20235,088 19.76 5,088 16,096,010 
Total310,327 $19.78 308,543 $16,096,010 
(1)Represents shares of the Company’s common stock repurchased under the employee stock purchase program and shares withheld to satisfy tax withholding obligations upon the vesting of awards of restricted stock.
(2)As previously disclosed, the board of directors of the Company approved a stock repurchase program on December 6, 2022, pursuant to which the Company is authorized to repurchase up to $25.0 million of common stock through December 31, 2023. Stock repurchases under this programs may be made from time to time on the open market, in privately negotiated transactions, or in any manner that complies with applicable securities laws, at the discretion of the Company. The timing of purchases and the number of shares repurchased under the programs are dependent upon a variety of factors including price, trading volume, corporate and regulatory requirements and market condition. The repurchase program may be suspended or discontinued at any time without notice. As of June 30, 2023, 432,809 shares of the Company’s common stock have been repurchased under the program for an aggregate purchase price of $8.9 million.
ITEM 5 – OTHER INFORMATION
During the three months ended June 30, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

62
Table of Contents
ITEM 6 – EXHIBITS
Exhibit No.Description
31.1
31.2
32.1
32.2
101
Financial information from the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Income; (iii) Consolidated Statements of Comprehensive Income; (iv) Consolidated Statements of Shareholders’ Equity; (v) Consolidated Statements of Cash Flows; and (vi) Notes to Consolidated Financial Statements – filed herewith.
104
The cover page from Midland States Bancorp, Inc.’s Form 10-Q Report for the quarterly period ended June 30, 2023 formatted in inline XBRL and contained in Exhibit 101.
63
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Midland States Bancorp, Inc.
Date: August 3, 2023
By:/s/Jeffrey G. Ludwig
Jeffrey G. Ludwig
President and Chief Executive Officer
(Principal Executive Officer)
Date: August 3, 2023
By:/s/Eric T. Lemke
Eric T. Lemke
Chief Financial Officer
(Principal Financial Officer)

64
Document

Exhibit 31.1
 
CERTIFICATIONS REQUIRED BY
RULE 13a-14(a) OR RULE 15d-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
 
I, Jeffrey G.  Ludwig, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q (the “Report”) of Midland States Bancorp, Inc. (the “Registrant”);
2.Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;
3.Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report;
4.The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and
d)Disclosed in this Report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
5.The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
 
 
 Midland States Bancorp, Inc.
    
Dated as of: August 3, 2023
By:/s/Jeffrey G. Ludwig
   Jeffrey G. Ludwig
   President and Chief Executive Officer
   (Principal Executive Officer)

Document

Exhibit 31.2
 
CERTIFICATIONS REQUIRED BY
RULE 13a-14(a) OR RULE 15d-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
 
I, Eric T. Lemke, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q (the “Report”) of Midland States Bancorp, Inc. (the “Registrant”);
2.Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;
3.Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report;
4.The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: 
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared; 
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 
c)Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and 
d)Disclosed in this Report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and 
5.The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions): 
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
 
 
 Midland States Bancorp, Inc.
    
Dated as of: August 3, 2023
By:/s/Eric T. Lemke
   Eric T. Lemke
   Chief Financial Officer
   (Principal Financial Officer)

Document

Exhibit 32.1
 
CERTIFICATIONS PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
I, Jeffrey G. Ludwig, President and Chief Executive Officer of Midland States Bancorp, Inc. (the “Company”) certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1)The Quarterly Report on Form 10-Q of the Company for the quarterly period ended June 30, 2023 (the “Report”) fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 Midland States Bancorp, Inc.
    
Dated as of: August 3, 2023
By:/s/Jeffrey G. Ludwig
   Jeffrey G. Ludwig
   President and Chief Executive Officer
   (Principal Executive Officer)

Document

Exhibit 32.2
 
CERTIFICATIONS PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
I, Eric T. Lemke, Chief Financial Officer of Midland States Bancorp, Inc. (the “Company”) certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1)The Quarterly Report on Form 10-Q of the Company for the quarterly period ended June 30, 2023 (the “Report”) fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 Midland States Bancorp, Inc.
    
Dated as of: August 3, 2023
By:/s/Eric T. Lemke
   Eric T. Lemke
   Chief Financial Officer
   (Principal Financial Officer)