Summary

Net income of $23.1 million, or $1.02 diluted earnings per share
Total loans increased 25.2% annualized
Total deposits increased 9.1% from end of prior quarter
Non-performing loans declined 22.0% from end of prior quarter
Net interest income increased 5.7% from prior quarter to $54.3 million
Efficiency ratio improved to 52.61% from 58.78% in prior quarter
Book value and tangible book value per share increased 1.6% and 2.3%, respectively

EFFINGHAM, Ill., Jan. 27, 2022 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (NASDAQ:MSBI) (the "Company") today reported net income of $23.1 million, or $1.02 diluted earnings per share, for the fourth quarter of 2021, which included a $4.9 million FHLB advance prepayment fee and a $1.9 million gain on the termination of an interest rate swap. This compares to net income of $19.5 million, or $0.86 diluted earnings per share, for the third quarter of 2021. This also compares to net income of $8.3 million, or $0.36 diluted earnings per share, for the fourth quarter of 2020, which included $4.9 million in FHLB advance prepayment fees.

Jeffrey G. Ludwig, President and Chief Executive Officer of the Company, said, "We continue to see an acceleration of our new business development efforts driven by the more productive commercial banking teams we have built over the past year and our increased presence in higher growth markets in Northern Illinois and St. Louis. We had a record quarter of loan production, resulting in 25% annualized growth in total loans, which we were able to fund with strong inflows of noninterest-bearing deposits. The strong balance sheet growth we are seeing is driving higher levels of revenue, increased operating leverage, and an improvement in our level of profitability.

"Based on our current commercial and commercial real estate lending pipelines and improving loan demand, we expect to deliver another year of strong loan growth in 2022. We also expect to keep expense levels relatively flat compared to 2021, despite continuing to increase our technology investment in order to further improve our revenue generation capabilities and enhance client service. In 2022, we will be focused on continuing to build relationship-based commercial and commercial real estate loans funded by low-cost deposits, which we combine with a growing wealth management business that provides a large, consistent source of non-interest income. We believe the improvements we have made to our business model and operations will enable us to generate a higher level of returns and consistently increase the value of our franchise in the years ahead," said Mr. Ludwig.

Adjusted Earnings

Financial results for the fourth quarter of 2021 were impacted by $4.9 million FHLB advance prepayment fees and a $1.9 million gain on the termination of an interest rate swap. Excluding these amounts and certain other income and expenses, adjusted earnings were $25.4 million, or $1.12 per diluted share, for the fourth quarter of 2021, up from $19.6 million, or $0.86 per diluted share, for the prior quarter.

Financial results for the fourth quarter of 2020 were impacted by $4.9 million FHLB advance prepayment fees, a $0.6 million loss on residential mortgage servicing rights ("MSRs") held-for sale, and $0.2 million in integration and acquisition expenses. Excluding these amounts and certain income items, adjusted earnings were $12.5 million, or $0.54 per diluted share, for the fourth quarter of 2020.

A reconciliation of adjusted earnings to net income according to accounting principles generally accepted in the United States ("GAAP") is provided in the financial tables at the end of this press release.

Net Interest Margin

Net interest margin for the fourth quarter of 2021 was 3.25%, compared to 3.34% for the third quarter of 2021. The Company's net interest margin benefits from accretion income on purchased loan portfolios, which contributed 4 and 7 basis points to net interest margin in the fourth and third quarters of 2021, respectively. Excluding the impact of accretion income, net interest margin decreased 6 basis points from the third quarter of 2021, due primarily to an increase in liquidity largely resulting from a significant increase in commercial FHA servicing deposits.

Relative to the fourth quarter of 2020, net interest margin decreased from 3.47%. Accretion income on purchased loan portfolios contributed 10 basis points to net interest margin in the fourth quarter of 2020. Excluding the impact of accretion income, net interest margin decreased 16 basis points from the fourth quarter of 2020, primarily due to an unfavorable shift in the mix of earning assets.

Net Interest Income

Net interest income for the fourth quarter of 2021 was $54.3 million, an increase of 5.7% from $51.4 million for the third quarter of 2021. Excluding accretion income, net interest income increased $3.1 million from the prior quarter, which was primarily due to a higher average balance of interest-earning assets coupled with a decrease in funding costs. Accretion income associated with purchased loan portfolios totaled $0.8 million for the fourth quarter of 2021, compared to $1.0 million for the third quarter of 2021. PPP loan income totaled $1.6 million, including net loan origination fees of $1.4 million, in the fourth quarter of 2021, compared to $2.4 million, including net loan origination fees of $2.1 million, in the third quarter of 2021.

Relative to the fourth quarter of 2020, net interest income increased $0.8 million, or 1.5%. Accretion income for the fourth quarter of 2020 was $1.6 million. Excluding the impact of accretion income, net interest income increased primarily due to a decrease in funding costs.

Noninterest Income

Noninterest income for the fourth quarter of 2021 was $22.5 million, an increase of 48.7% from $15.1 million for the third quarter of 2021. Noninterest income for the fourth quarter of 2021 was positively impacted by $3.9 million in unrealized income on equity investments, a $1.9 million gain on the termination of an FHLB interest rate swap, and a $1.0 million gain on company-owned life insurance. Impairment on commercial MSRs negatively impacted noninterest income by $2.1 million and $3.0 million in the fourth quarter of 2021 and third quarter of 2021, respectively. Excluding the impairments, noninterest income increased 35.3% from the prior quarter.

Relative to the fourth quarter of 2020, noninterest income increased 57.1% from $14.3 million. The increase was attributable to higher levels of wealth management and interchange revenue, as well as the items mentioned above for the fourth quarter of 2021.

Wealth management revenue for the fourth quarter of 2021 was $7.2 million, unchanged from the third quarter of 2021. Compared to the fourth quarter of 2020, wealth management revenue increased 22.3%, primarily due to the increase in assets under administration over the past year and the acquisition of ATG Trust Company.

Noninterest Expense

Noninterest expense for the fourth quarter of 2021 was $45.8 million, compared with $41.3 million in the third quarter of 2021. Noninterest expense for the fourth quarter of 2021 included $4.9 million FHLB advance prepayment fees and $0.2 million in integration and acquisition expenses. Excluding the FHLB advance prepayment fees and integration and acquisition expenses, noninterest expense decreased by $0.4 million.

Relative to the fourth quarter of 2020, noninterest expense decreased 2.7% from $47.0 million, which included $4.9 million in FHLB advance prepayment fees and a $0.6 million loss on residential MSRs held-for-sale. Excluding FHLB advance prepayment fees and losses on residential MSRs held-for-sale, noninterest expense decreased $0.6 million, primarily due to lower salaries and employee benefits expense.

Loan Portfolio

Total loans outstanding were $5.22 billion at December 31, 2021, compared with $4.92 billion at September 30, 2021, and $5.10 billion at December 31, 2020. The increase in total loans from September 30, 2021 was primarily attributable to higher balances of commercial real estate and consumer loans, partially offset by declines in commercial FHA warehouse lines and forgiveness of PPP loans.

Equipment finance balances increased $46.2 million from September 30, 2021 to $945.3 million at December 31, 2021.

Compared to loan balances at December 31, 2020, growth in equipment finance balances, commercial real estate, construction, and consumer loans was offset by declines in commercial FHA warehouse lines, PPP loans and residential real estate loans.

Deposits

Total deposits were $6.11 billion at December 31, 2021, compared with $5.60 billion at September 30, 2021, and $5.10 billion at December 31, 2020. The increase in total deposits from the end of the prior quarter was primarily attributable to an increase in commercial FHA servicing deposits and inflows of other commercial deposits.

Asset Quality

Nonperforming loans totaled $42.6 million, or 0.81% of total loans, at December 31, 2021, compared with $54.6 million, or 1.11% of total loans, at September 30, 2021. The decrease in nonperforming loans was primarily attributable to the payoff of two nonaccrual loans totaling $5.6 million and the charge-off of a third nonaccrual loan of $1.8 million. At December 31, 2020, nonperforming loans totaled $54.1 million, or 1.06% of total loans.

Net charge-offs for the fourth quarter of 2021 were $4.6 million, or 0.37% of average loans on an annualized basis, compared to net charge-offs of $3.0 million, or 0.25% of average loans on an annualized basis, for the third quarter of 2021, and $2.3 million, or 0.19% of average loans on an annualized basis, for the fourth quarter of 2020.

The Company recorded a provision for credit losses of $0.5 million for the fourth quarter of 2021. No provision for credit losses on loans was recorded, due to improvements in asset quality and economic forecasts. Provisions of $0.4 million and $0.1 million were recorded for credit losses on unfunded commitments and available-for-sale securities, respectively.

The Company's allowance for credit losses on loans was 0.98% of total loans and 119.9% of nonperforming loans at December 31, 2021, compared with 1.13% of total loans and 101.9% of nonperforming loans at September 30, 2021. Approximately 94% of the allowance for credit losses on loans at December 31, 2021 was allocated to general reserves.

Capital

At December 31, 2021, Midland States Bank and the Company exceeded all regulatory capital requirements under Basel III, and Midland States Bank met the qualifications to be a ‘‘well-capitalized'' financial institution, as summarized in the following table:

	Bank Level Ratios as of Dec. 31, 2021	Consolidated Ratios as of Dec. 31, 2021	Minimum Regulatory Requirements ⁽²⁾
Total capital to risk-weighted assets	11.21%	12.19%	10.50%
Tier 1 capital to risk-weighted assets	10.49%	9.16%	8.50%
Tier 1 leverage ratio	8.89%	7.75%	4.00%
Common equity Tier 1 capital	10.49%	8.08%	7.00%
Tangible common equity to tangible assets ⁽¹⁾	NA	6.58%	NA

(1) A non-GAAP financial measure. Refer to page 15 for a reconciliation to the comparable GAAP financial measure.

(2) Includes the capital conservation buffer of 2.5%.

Stock Repurchase Program

During the fourth quarter of 2021, the Company repurchased 205,015 shares of its common stock at a weighted average price of $25.58 under its stock repurchase program. As of December 31, 2021, the Company had $19.7 million remaining under the current stock repurchase authorization.

Conference Call, Webcast and Slide Presentation

The Company will host a conference call and webcast at 7:30 a.m. Central Time on Friday, January 28, 2022, to discuss its financial results. The call can be accessed via telephone at (877) 516-3531; conference ID: 8339225. A recorded replay can be accessed through February 4, 2022, by dialing (855) 859-2056; conference ID: 8339225.

A slide presentation relating to the fourth quarter 2021 financial results will be accessible prior to the scheduled conference call. This earnings release should be read together with the slide presentation, which contains important information related to the impact of COVID-19. The slide presentation and webcast of the conference call can be accessed on the Webcasts and Presentations page of the Company's investor relations website at investors.midlandsb.com under the "News and Events" tab.

About Midland States Bancorp, Inc.

Midland States Bancorp, Inc. is a community-based financial holding company headquartered in Effingham, Illinois, and is the sole shareholder of Midland States Bank. As of December 31, 2021, the Company had total assets of approximately $7.44 billion, and its Wealth Management Group had assets under administration of approximately $4.22 billion. Midland provides a full range of commercial and consumer banking products and services and business equipment financing, merchant credit card services, trust and investment management, insurance and financial planning services. For additional information, visit https://www.midlandsb.com/ or https://www.linkedin.com/company/midland-states-bank.

Non-GAAP Financial Measures

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

Forward-Looking Statements

Readers should note that in addition to the historical information contained herein, this press release includes "forward-looking statements" within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including but not limited to statements about the Company's plans, objectives, future performance, goals and future earnings levels. These statements are subject to many risks and uncertainties, including changes in interest rates and other general economic, business and political conditions, including the effects of the COVID-19 pandemic and its potential effects on the economic environment, our customers and our operations, as well as any changes to federal, state and local government laws, regulations and orders in connection with the pandemic; changes in the financial markets; changes in business plans as circumstances warrant; risks relating to acquisitions; developments and uncertainty related to the future use and availability of some reference rates, such as the London Inter-Bank Offered Rate, as well as other alternative reference rates, and the adoption of a substitute; changes to U.S. tax laws, regulations and guidance; and other risks detailed from time to time in filings made by the Company with the Securities and Exchange Commission. Readers should note that the forward-looking statements included in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "will," "propose," "may," "plan," "seek," "expect," "intend," "estimate," "anticipate," "believe," "continue," or similar terminology. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

CONTACTS:

Jeffrey G. Ludwig, President and CEO, at jludwig@midlandsb.com or (217) 342-7321

Eric T. Lemke, Chief Financial Officer, at elemke@midlandsb.com or (217) 342-7321

Douglas J. Tucker, SVP and Corporate Counsel, at dtucker@midlandsb.com or (217) 342-7321


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

	For the Quarter Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
(dollars in thousands, except per share data)	2021			2021			2021			2021			2020
Earnings Summary
Net interest income	$	54,301		$	51,396		$	50,110		$	51,868		$	53,516
Provision for credit losses		467			(184	)		(455	)		3,565			10,058
Noninterest income		22,523			15,143			17,417			14,816			14,336
Noninterest expense		45,757			41,292			48,941			39,079			47,048
Income before income taxes		30,600			25,431			19,041			24,040			10,746
Income taxes		7,493			5,883			(1,083	)		5,502			2,413
Net income	$	23,107		$	19,548		$	20,124		$	18,538		$	8,333

Diluted earnings per common share	$	1.02		$	0.86		$	0.88		$	0.81		$	0.36
Weighted average shares outstanding - diluted		22,350,771			22,577,880			22,677,515			22,578,553			22,656,343
Return on average assets		1.26	%		1.15	%		1.20	%		1.11	%		0.49	%
Return on average shareholders' equity		14.04	%		11.90	%		12.59	%		12.04	%		5.32	%
Return on average tangible common equity⁽¹⁾		19.69	%		16.76	%		17.85	%		17.28	%		7.68	%
Net interest margin		3.25	%		3.34	%		3.29	%		3.45	%		3.47	%
Efficiency ratio ⁽¹⁾		52.61	%		58.78	%		60.19	%		57.14	%		58.55	%

Adjusted Earnings Performance Summary ⁽¹⁾
Adjusted earnings	$	25,416		$	19,616		$	19,755		$	18,434		$	12,471
Adjusted diluted earnings per common share	$	1.12		$	0.86		$	0.86		$	0.81		$	0.54
Adjusted return on average assets		1.39	%		1.15	%		1.17	%		1.11	%		0.73	%
Adjusted return on average shareholders' equity		15.44	%		11.94	%		12.36	%		11.97	%		7.97	%
Adjusted return on average tangible common equity		21.65	%		16.82	%		17.52	%		17.18	%		11.50	%
Adjusted pre-tax, pre-provision earnings	$	36,324		$	28,379		$	26,967		$	28,737		$	28,855
Adjusted pre-tax, pre-provision return on average assets		1.98	%		1.67	%		1.60	%		1.73	%		1.69	%

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


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

	For the Quarter Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
(in thousands, except per share data)	2021			2021			2021			2021			2020
Net interest income:
Interest income	$	60,427		$	58,490		$	58,397		$	60,503		$	62,712
Interest expense		6,126			7,094			8,287			8,635			9,196
Net interest income		54,301			51,396			50,110			51,868			53,516
Provision for credit losses:
Provision for credit losses on loans		-			-			-			3,950			10,000
Provision for credit losses on unfunded commitments		388			-			(265	)		(535	)		-
Provision for other credit losses		79			(184	)		(190	)		150			58
Total provision for credit losses		467			(184	)		(455	)		3,565			10,058
Net interest income after provision for credit losses		53,834			51,580			50,565			48,303			43,458
Noninterest income:
Wealth management revenue		7,176			7,175			6,529			5,931			5,868
Commercial FHA revenue		369			411			342			292			400
Residential mortgage banking revenue		1,103			1,287			1,562			1,574			2,285
Service charges on deposit accounts		2,338			2,268			1,916			1,826			2,149
Interchange revenue		3,677			3,651			3,797			3,375			3,137
Gain on sales of investment securities, net		-			160			377			-			-
Gain on termination of hedged interest swap		1,845			-			-			314			-
Impairment on commercial mortgage servicing rights		(2,072	)		(3,037	)		(1,148	)		(1,275	)		(2,344	)
Company-owned life insurance		1,904			869			863			860			893
Other income		6,183			2,359			3,179			1,919			1,948
Total noninterest income		22,523			15,143			17,417			14,816			14,336
Noninterest expense:
Salaries and employee benefits		22,109			22,175			22,071			20,528			22,636
Occupancy and equipment		3,429			3,701			3,796			3,940			3,531
Data processing		5,819			6,495			6,288			5,993			5,987
Professional		1,499			1,738			5,549			2,185			1,912
Amortization of intangible assets		1,425			1,445			1,470			1,515			1,556
Loss on mortgage servicing rights held for sale		-			79			143			-			617
Impairment related to facilities optimization		-			-			-			-			(10	)
FHLB advances prepayment fees		4,859			-			3,669			8			4,872
Other expense		6,617			5,659			5,955			4,910			5,947
Total noninterest expense		45,757			41,292			48,941			39,079			47,048
Income before income taxes		30,600			25,431			19,041			24,040			10,746
Income taxes		7,493			5,883			(1,083	)		5,502			2,413
Net income	$	23,107		$	19,548		$	20,124		$	18,538		$	8,333

Basic earnings per common share	$	1.03		$	0.86		$	0.88		$	0.81		$	0.36
Diluted earnings per common share	$	1.02		$	0.86		$	0.88		$	0.81		$	0.36


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

	As of
	December 31,			September 30,			June 30,			March 31,			December 31,
(in thousands)	2021			2021			2021			2021			2020
Assets
Cash and cash equivalents	$	680,371		$	662,643		$	425,100		$	631,219		$	341,640
Investment securities		916,132			900,319			756,831			690,390			686,135
Loans		5,224,801			4,915,554			4,835,866			4,910,806			5,103,331
Allowance for credit losses on loans		(51,062	)		(55,675	)		(58,664	)		(62,687	)		(60,443	)
Total loans, net		5,173,739			4,859,879			4,777,202			4,848,119			5,042,888
Loans held for sale		32,045			26,621			12,187			55,174			138,090
Premises and equipment, net		70,792			71,241			71,803			73,255			74,124
Other real estate owned		12,059			11,931			12,768			20,304			20,247
Loan servicing rights, at lower of cost or fair value		28,865			30,916			34,577			36,876			39,276
Goodwill		161,904			161,904			161,904			161,904			161,904
Other intangible assets, net		24,374			26,065			27,900			26,867			28,382
Cash surrender value of life insurance policies		148,378			149,146			148,277			146,864			146,004
Other assets		195,146			193,294			201,461			193,814			189,850
Total assets	$	7,443,805		$	7,093,959		$	6,630,010		$	6,884,786		$	6,868,540

Liabilities and Shareholders' Equity
Noninterest-bearing deposits	$	2,245,701		$	1,672,901		$	1,366,453		$	1,522,433		$	1,469,579
Interest-bearing deposits		3,864,947			3,928,475			3,829,898			3,818,080			3,631,437
Total deposits		6,110,648			5,601,376			5,196,351			5,340,513			5,101,016
Short-term borrowings		76,803			66,666			75,985			71,728			68,957
FHLB advances and other borrowings		310,171			440,171			440,171			529,171			779,171
Subordinated debt		139,091			138,998			138,906			169,888			169,795
Trust preferred debentures		49,374			49,235			49,094			48,954			48,814
Other liabilities		93,881			139,669			81,317			89,065			79,396
Total liabilities		6,779,968			6,436,115			5,981,824			6,249,319			6,247,149
Total shareholders' equity		663,837			657,844			648,186			635,467			621,391
Total liabilities and shareholders' equity	$	7,443,805		$	7,093,959		$	6,630,010		$	6,884,786		$	6,868,540


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

	As of
	December 31,		September 30,		June 30,		March 31,		December 31,
(in thousands)	2021		2021		2021		2021		2020
Loan Portfolio
Equipment finance loans	$	521,973	$	486,623	$	464,380	$	456,059	$	451,437
Equipment finance leases		423,280		412,430		407,161		402,546		410,064
Commercial FHA warehouse lines		91,927		180,248		129,607		205,115		273,298
SBA PPP loans		52,477		82,410		146,728		211,564		184,401
Other commercial loans		783,811		718,054		683,365		702,156		776,439
Total commercial loans and leases		1,873,468		1,879,765		1,831,241		1,977,440		2,095,639
Commercial real estate		1,816,828		1,562,013		1,540,489		1,494,031		1,525,973
Construction and land development		193,749		200,792		212,508		191,870		172,737
Residential real estate		338,151		344,414		366,612		398,501		442,880
Consumer		1,002,605		928,570		885,016		848,964		866,102
Total loans	$	5,224,801	$	4,915,554	$	4,835,866	$	4,910,806	$	5,103,331

Deposit Portfolio
Noninterest-bearing demand	$	2,245,701	$	1,672,901	$	1,366,453	$	1,522,433	$	1,469,579
Interest-bearing:
Checking		1,663,021		1,697,326		1,619,436		1,601,449		1,568,888
Money market		869,067		852,836		787,688		819,455		785,871
Savings		679,115		665,710		669,277		653,256		597,966
Time		630,583		688,693		721,502		718,788		655,620
Brokered time		23,161		23,910		31,995		25,132		23,092
Total deposits	$	6,110,648	$	5,601,376	$	5,196,351	$	5,340,513	$	5,101,016


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

	For the Quarter Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
(dollars in thousands)	2021			2021			2021			2021			2020
Average Balance Sheets
Cash and cash equivalents	$	685,655		$	525,848		$	509,886		$	350,061		$	415,686
Investment securities		915,707			773,372			734,462			680,202			672,937
Loans		4,995,794			4,800,063			4,826,234			4,992,802			4,998,912
Loans held for sale		34,272			15,204			36,299			65,365			45,196
Nonmarketable equity securities		39,203			43,873			49,388			55,935			51,906
Total interest-earning assets		6,670,631			6,158,360			6,156,269			6,144,365			6,184,637
Non-earning assets		605,060			597,153			589,336			602,017			602,716
Total assets	$	7,275,691		$	6,755,513		$	6,745,605		$	6,746,382		$	6,787,353

Interest-bearing deposits	$	3,913,475		$	3,895,970		$	3,815,179		$	3,757,108		$	3,680,645
Short-term borrowings		66,677			68,103			65,727			75,544			62,432
FHLB advances and other borrowings		319,954			440,171			519,490			617,504			682,981
Subordinated debt		139,046			138,954			165,155			169,844			169,751
Trust preferred debentures		49,307			49,167			49,026			48,887			48,751
Total interest-bearing liabilities		4,488,459			4,592,365			4,614,577			4,668,887			4,644,560
Noninterest-bearing deposits		2,049,802			1,434,193			1,411,428			1,370,604			1,446,359
Other noninterest-bearing liabilities		84,538			77,204			78,521			82,230			73,840
Shareholders' equity		652,892			651,751			641,079			624,661			622,594
Total liabilities and shareholders' equity	$	7,275,691		$	6,755,513		$	6,745,605		$	6,746,382		$	6,787,353

Yields
Earning Assets
Cash and cash equivalents		0.16	%		0.16	%		0.11	%		0.11	%		0.12	%
Investment securities		2.12	%		2.34	%		2.43	%		2.51	%		2.65	%
Loans		4.36	%		4.42	%		4.43	%		4.50	%		4.58	%
Loans held for sale		3.53	%		2.79	%		2.88	%		2.74	%		3.14	%
Nonmarketable equity securities		5.07	%		5.05	%		4.94	%		4.93	%		5.22	%
Total interest-earning assets		3.62	%		3.79	%		3.83	%		4.02	%		4.06	%

Interest-Bearing Liabilities
Interest-bearing deposits		0.22	%		0.26	%		0.31	%		0.34	%		0.36	%
Short-term borrowings		0.12	%		0.12	%		0.12	%		0.13	%		0.14	%
FHLB advances and other borrowings		1.75	%		1.80	%		1.91	%		1.69	%		1.71	%
Subordinated debt		5.78	%		5.79	%		5.61	%		5.57	%		5.60	%
Trust preferred debentures		3.90	%		3.92	%		4.00	%		4.08	%		4.03	%
Total interest-bearing liabilities		0.54	%		0.61	%		0.72	%		0.75	%		0.79	%

Cost of Deposits		0.15	%		0.19	%		0.23	%		0.25	%		0.26	%

Net Interest Margin		3.25	%		3.34	%		3.29	%		3.45	%		3.47	%


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

	As of and for the Quarter Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
(dollars in thousands, except per share data)	2021			2021			2021			2021			2020
Asset Quality
Loans 30-89 days past due	$	17,514		$	16,772		$	20,224		$	24,819		$	31,460
Nonperforming loans		42,580			54,620			61,363			52,826			54,070
Nonperforming assets		57,069			69,261			76,926			75,004			75,432
Net charge-offs		4,613			2,989			4,023			1,706			2,328
Loans 30-89 days past due to total loans		0.34	%		0.34	%		0.42	%		0.51	%		0.62	%
Nonperforming loans to total loans		0.81	%		1.11	%		1.27	%		1.08	%		1.06	%
Nonperforming assets to total assets		0.77	%		0.98	%		1.16	%		1.09	%		1.10	%
Allowance for credit losses to total loans		0.98	%		1.13	%		1.21	%		1.28	%		1.18	%
Allowance for credit losses to nonperforming loans		119.92	%		101.93	%		95.60	%		118.67	%		111.79	%
Net charge-offs to average loans		0.37	%		0.25	%		0.33	%		0.14	%		0.19	%

Wealth Management
Trust assets under administration	$	4,217,412		$	4,058,168		$	4,077,581		$	3,560,427		$	3,480,759

Market Data
Book value per share at period end	$	30.11		$	29.64		$	28.96		$	28.43		$	27.83
Tangible book value per share at period end ⁽¹⁾	$	21.66		$	21.17		$	20.48		$	19.98		$	19.31
Market price at period end	$	24.79		$	24.73		$	26.27		$	27.74		$	17.87
Shares outstanding at period end		22,050,537			22,193,141			22,380,492			22,351,740			22,325,471

Capital
Total capital to risk-weighted assets		12.19	%		13.10	%		13.11	%		13.73	%		13.24	%
Tier 1 capital to risk-weighted assets		9.16	%		9.73	%		9.64	%		9.62	%		9.20	%
Tier 1 common capital to risk-weighted assets		8.08	%		8.55	%		8.44	%		8.39	%		7.99	%
Tier 1 leverage ratio		7.75	%		8.16	%		8.00	%		7.79	%		7.50	%
Tangible common equity to tangible assets ⁽¹⁾		6.58	%		6.80	%		7.12	%		6.67	%		6.46	%

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


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

Adjusted Earnings Reconciliation

	For the Quarter Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
(dollars in thousands, except per share data)	2021			2021			2021			2021			2020
Income before income taxes - GAAP	$	30,600		$	25,431		$	19,041		$	24,040		$	10,746
Adjustments to noninterest income:
Gain on sales of investment securities, net		-			160			377			-			-
Gain on termination of hedged interest rate swap		1,845			-			-			314			-
Other income		-			-			(27	)		75			3
Total adjustments to noninterest income		1,845			160			350			389			3
Adjustments to noninterest expense:
Loss on mortgage servicing rights held for sale		-			79			143			-			617
Impairment related to facilities optimization		-			-			-			-			(10	)
FHLB advances prepayment fees		4,859			-			3,669			8			4,872
Integration and acquisition expenses		171			176			3,771			238			231
Total adjustments to noninterest expense		5,030			255			7,583			246			5,710
Adjusted earnings pre tax		33,785			25,526			26,274			23,897			16,453
Adjusted earnings tax		8,369			5,910			6,519			5,463			3,982
Adjusted earnings - non-GAAP	$	25,416		$	19,616		$	19,755		$	18,434		$	12,471
Adjusted diluted earnings per common share	$	1.12		$	0.86		$	0.86		$	0.81		$	0.54
Adjusted return on average assets		1.39	%		1.15	%		1.17	%		1.11	%		0.73	%
Adjusted return on average shareholders' equity		15.44	%		11.94	%		12.36	%		11.97	%		7.97	%
Adjusted return on average tangible common equity		21.65	%		16.82	%		17.52	%		17.18	%		11.50	%


Adjusted Pre-Tax, Pre-Provision Earnings Reconciliation

	For the Quarter Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
(dollars in thousands)	2021			2021			2021			2021			2020
Adjusted earnings pre tax - non- GAAP	$	33,785		$	25,526		$	26,274		$	23,897		$	16,453
Provision for credit losses		467			(184	)		(455	)		3,565			10,058
Impairment on commercial mortgage servicing rights		2,072			3,037			1,148			1,275			2,344
Adjusted pre-tax, pre-provision earnings - non-GAAP	$	36,324		$	28,379		$	26,967		$	28,737		$	28,855
Adjusted pre-tax, pre-provision return on average assets		1.98	%		1.67	%		1.60	%		1.73	%		1.69	%


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


Efficiency Ratio Reconciliation

	For the Quarter Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
(dollars in thousands)	2021			2021			2021			2021			2020
Noninterest expense - GAAP	$	45,757		$	41,292		$	48,941		$	39,079		$	47,048
Loss on mortgage servicing rights held for sale		-			(79	)		(143	)		-			(617	)
Impairment related to facilities optimization		-			-			-			-			10
FHLB advances prepayment fees		(4,859	)		-			(3,669	)		(8	)		(4,872	)
Integration and acquisition expenses		(171	)		(176	)		(3,771	)		(238	)		(231	)
Adjusted noninterest expense	$	40,727		$	41,037		$	41,358		$	38,833		$	41,338

Net interest income - GAAP	$	54,301		$	51,396		$	50,110		$	51,868		$	53,516
Effect of tax-exempt income		372			402			383			386			413
Adjusted net interest income		54,673			51,798			50,493			52,254			53,929

Noninterest income - GAAP		22,523			15,143			17,417			14,816			14,336
Impairment on commercial mortgage servicing rights		2,072			3,037			1,148			1,275			2,344
Gain on sales of investment securities, net		-			(160	)		(377	)		-			-
Gain on termination of hedged interest rate swap		(1,845	)		-			-			(314	)		-
Other		-			-			27			(75	)		(3	)
Adjusted noninterest income		22,750			18,020			18,215			15,702			16,677

Adjusted total revenue	$	77,423		$	69,818		$	68,708		$	67,956		$	70,606

Efficiency ratio		52.61	%		58.78	%		60.19	%		57.14	%		58.55	%


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

Tangible Common Equity to Tangible Assets Ratio and Tangible Book Value Per Share

	As of
	December 31,			September 30,			June 30,			March 31,			December 31,
(dollars in thousands, except per share data)	2021			2021			2021			2021			2020
Shareholders' Equity to Tangible Common Equity
Total shareholders' equity—GAAP	$	663,837		$	657,844		$	648,186		$	635,467		$	621,391
Adjustments:
Goodwill		(161,904	)		(161,904	)		(161,904	)		(161,904	)		(161,904	)
Other intangible assets, net		(24,374	)		(26,065	)		(27,900	)		(26,867	)		(28,382	)
Tangible common equity	$	477,558		$	469,875		$	458,382		$	446,696		$	431,105

Total Assets to Tangible Assets:
Total assets—GAAP	$	7,443,805		$	7,093,959		$	6,630,010		$	6,884,786		$	6,868,540
Adjustments:
Goodwill		(161,904	)		(161,904	)		(161,904	)		(161,904	)		(161,904	)
Other intangible assets, net		(24,374	)		(26,065	)		(27,900	)		(26,867	)		(28,382	)
Tangible assets	$	7,257,527		$	6,905,990		$	6,440,206		$	6,696,015		$	6,678,254

Common Shares Outstanding		22,050,537			22,193,141			22,380,492			22,351,740			22,325,471

Tangible Common Equity to Tangible Assets		6.58	%		6.80	%		7.12	%		6.67	%		6.46	%
Tangible Book Value Per Share	$	21.66		$	21.17		$	20.48		$	19.98		$	19.31

Return on Average Tangible Common Equity (ROATCE)

	For the Quarter Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
(dollars in thousands)	2021			2021			2021			2021			2020
Net income available to common shareholders	$	23,107		$	19,548		$	20,124		$	18,538		$	8,333

Average total shareholders' equity—GAAP	$	652,892		$	651,751		$	641,079		$	624,661		$	622,594
Adjustments:
Goodwill		(161,904	)		(161,904	)		(161,904	)		(161,904	)		(161,904	)
Other intangible assets, net		(25,311	)		(27,132	)		(26,931	)		(27,578	)		(29,123	)
Average tangible common equity	$	465,677		$	462,715		$	452,244		$	435,179		$	431,567
ROATCE		19.69	%		16.76	%		17.85	%		17.28	%		7.68	%

Midland States Bancorp, Inc. Announces 2021 Fourth Quarter Results