Summary

Net income available to common shareholders of $29.7 million, or $1.30 per diluted share
$17.5 million gain on the termination of forward starting interest rate swaps, $3.3 million loss on commercial mortgage servicing rights held for sale and $3.5 million impairment on other real estate owned
Total loans increased 7.0% annualized from prior quarter
Tangible book value per share increased 4.0% from end of prior quarter
Tangible common equity to tangible assets increased 24 basis points from end of prior quarter

EFFINGHAM, Ill., Jan. 26, 2023 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (NASDAQ:MSBI) (the "Company") today reported net income available to common shareholders of $29.7 million, or $1.30 per diluted share, for the fourth quarter of 2022 compared to $23.5 million, or $1.04, respectively, for the third quarter of 2022. This also compares to net income available to common shareholders of $23.1 million, or $1.02 per diluted share, for the fourth quarter of 2021.

Jeffrey G. Ludwig, President and Chief Executive Officer of the Company, said, "Our fourth quarter performance completed a very successful year in which we generated a record level of earnings. For the full year, we generated return on assets of 1.31%, up from 1.18% in 2021, and return on tangible common equity of 20.8%, up from 17.9% in 2021. In the fourth quarter, our solid financial performance resulted in significant growth in both book value and tangible book value per share, as well as increases in most of our capital ratios.

"As we begin 2023, we are maintaining our conservative approach to new loan production and expect a relatively low level of loan growth until economic conditions improve. Even with a lower level of loan growth, we believe that we are well positioned to continue generating strong financial performance as we get additional leverage from the investments in talent and technology that we have made over the past few years. While we expect the macro environment to be challenging, particularly in the first half of the year, we believe that we will deliver strong results for our shareholders as we continue executing on our long-term strategies to enhance the value of the Midland franchise," said Mr. Ludwig.

Net Interest Income and Net Interest Margin

Net interest income for the fourth quarter of 2022 was $63.6 million, a decrease of $0.5 million, or 0.7%, from $64.0 million for the third quarter of 2022, which was primarily due to increased deposit costs. Accretion income associated with purchased loan portfolios totaled $0.3 million for the fourth quarter of 2022, compared to $0.5 million for the third quarter of 2022.

Relative to the fourth quarter of 2021, net interest income increased 17.0%, from $54.3 million. The increase was primarily attributable to higher average balances of interest-earning assets, a more favorable asset mix, and higher yields on interest-earning assets. Paycheck Protection Program ("PPP") loan fees recognized as loan interest income totaled $1.5 million during the fourth quarter of 2021. Accretion income associated with purchased loan portfolios for the fourth quarter of 2021 was $0.8 million.

Net interest margin for the fourth quarter of 2022 was 3.50%, compared to 3.63% for the third quarter of 2022 as an increase in the cost of deposits more than offset the increase in the average yield on earning assets. The contribution of PPP loan fees to net interest margin was 1 basis point during the third quarter of 2022, while the fourth quarter of 2022 had no PPP loan fee impact. Additionally, the contribution of acquired loan discount accretion to net interest margin was 2 basis points during the fourth quarter of 2022 and 3 basis points during the third quarter of 2022.

Relative to the fourth quarter of 2021, net interest margin increased from 3.25%. This increase was primarily attributable to higher yields on interest-earning assets and a more favorable mix of interest-earning assets. PPP loan fees recognized as loan interest income contributed 9 basis points to net interest margin and acquired loan discount accretion contributed 4 basis points to net interest margin during the fourth quarter of 2021.

Noninterest Income

Noninterest income for the fourth quarter of 2022 was $33.8 million and was positively impacted by a $17.5 million gain on the termination of forward starting interest rate swaps. Excluding this transaction, noninterest income for the fourth quarter of 2022 was $16.3 million compared to $15.8 million for the third quarter of 2022.

Noninterest income for the fourth quarter of 2021 was $22.5 million and was positively impacted by $3.9 million in unrealized income on equity investments, a $1.8 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 mortgage servicing rights negatively impacted noninterest income by $2.1 million in the fourth quarter of 2021. Excluding these transactions, noninterest income decreased from the fourth quarter of 2021 to the fourth quarter of 2022, primarily due to declines in wealth management and residential mortgage banking revenue.

Wealth management revenue was $6.2 million for both the third and fourth quarters of 2022. Compared to the fourth quarter of 2021, wealth management revenue decreased 13.2%, primarily due to a decline in assets under administration resulting from market performance.

Noninterest Expense

Noninterest expense for the fourth quarter of 2022 was $49.9 million, an increase of 14.8% from $43.5 million in the third quarter of 2022. The increase was primarily due to a $3.3 million loss on commercial mortgage servicing rights held for sale and OREO impairment charges of $3.5 million recognized in the fourth quarter of 2022.

Relative to the fourth quarter of 2021, noninterest expense increased 9.1% from $45.8 million. 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 these adjustments, noninterest expense for the fourth quarter of 2022 increased $2.4 million, primarily due to a modest increase in staffing levels and increases across most expense items consistent with the growth of the Company including the full quarter impact of the branch purchase completed in June 2022.

Loan Portfolio

Total loans outstanding were $6.31 billion at December 31, 2022, compared with $6.20 billion at September 30, 2022, and $5.22 billion at December 31, 2021. The growth in total loans from September 30, 2022 was primarily attributable to higher balances of consumer and construction and land development loans.

Equipment finance balances increased from $1.03 billion at September 30, 2022 to $1.11 billion at December 31, 2022.

Compared to loan balances at December 31, 2021, the Company experienced growth in all loan portfolios with the exception of commercial FHA warehouse lines and PPP loans.

Deposits

Total deposits were $6.36 billion at December 31, 2022, compared with $6.40 billion at September 30, 2022, and $6.11 billion at December 31, 2021. The decrease in total deposits from the end of the prior quarter was primarily attributable to a decline in noninterest-bearing demand partially offset by a small increase in interest-bearing deposits.

Asset Quality

Nonperforming loans totaled $49.4 million, or 0.78% of total loans, at December 31, 2022 compared with $46.9 million, or 0.76% of total loans, at September 30, 2022. At December 31, 2021, nonperforming loans totaled $42.6 million, or 0.81% of total loans.

Net charge-offs for the fourth quarter of 2022 were $0.5 million, or 0.03% of average loans on an annualized basis, compared to net charge-offs of $3.2 million, or 0.21% of average loans on an annualized basis, for the third quarter of 2022, and $4.6 million, or 0.37% of average loans on an annualized basis, for the fourth quarter of 2021.

The Company recorded a provision for credit losses of $3.5 million for the fourth quarter of 2022. Provision for credit losses on loans totaled $3.0 million for the fourth quarter of 2022, which was primarily related to the growth in total loans and negative economic forecasts. Provision for credit losses on unfunded commitments of $0.6 million was also recorded during the quarter.

The Company's allowance for credit losses on loans was 0.97% of total loans and 123.53% of nonperforming loans at December 31, 2022, compared with 0.95% of total loans and 125.08% of nonperforming loans at September 30, 2022.

Capital

At December 31, 2022, Midland States Bank and the Company exceeded all regulatory capital requirements under Basel III, and Midland States Bank met the qualifications to be a ‘‘well-capitalized'' financial institution, as summarized in the following table:

	As of December 31, 2022
	Midland States Bank	Midland States Bancorp, Inc.	Minimum Regulatory Requirements⁽²⁾
Total capital to risk-weighted assets	11.51%	12.38%	10.50%
Tier 1 capital to risk-weighted assets	10.71%	10.21%	8.50%
Tier 1 leverage ratio	9.90%	9.43%	4.00%
Common equity Tier 1 capital	10.71%	7.77%	7.00%
Tangible common equity to tangible assets⁽¹⁾	N/A	6.06%	N/A

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

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

Since the beginning of 2022, the impact of rising interest rates on the Company's investment portfolio has resulted in an $89.0 million decline in accumulated other comprehensive income, which has negatively impacted tangible book value per share by $4.02, and the tangible common equity to tangible assets ratio by 117 basis points.

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 perpetual preferred stock, Series A, par value $2.00 per share (the "Series A preferred stock"), with a liquidation preference of $25 per depositary share (equivalent to $1,000 per share of Series A Preferred Stock). The Series A preferred stock qualifies as Tier 1 capital for purposes of regulatory capital calculations. The gross proceeds were $115.0 million while net proceeds from the issuance of the Series A preferred stock, after deducting $4.5 million of offering costs, including the underwriting discount and other expenses, were $110.5 million. The Company declared and paid $3.2 million of preferred dividends during the fourth quarter of 2022.

Stock Repurchase Program

During the fourth quarter of 2022, the Company did not repurchase any shares under its stock repurchase program. On December 6, 2022, the Company's board of directors authorized a new share repurchase program, pursuant to which the Company is authorized to repurchase up to $25.0 million of common stock through December 31, 2023. The previous repurchase plan terminated on December 31, 2022.

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 27, 2023, to discuss its financial results.

Telephone Access: https://register.vevent.com/register/BIc01dcecf8df0417783e5b208a72ec906

A slide presentation relating to the fourth quarter 2022 financial results will be accessible prior to the scheduled conference call. This earnings release should be read together with the slide presentation. 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, 2022, the Company had total assets of approximately $7.86 billion, and its Wealth Management Group had assets under administration of approximately $3.60 billion. The Company provides a full range of commercial and consumer banking products and services and business equipment financing, merchant credit card services, trust and investment management, insurance and financial planning services. For additional information, visit https://www.midlandsb.com/ or https://www.linkedin.com/company/midland-states-bank.

Non-GAAP Financial Measures

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

These non-GAAP financial measures include "Adjusted Earnings," "Adjusted Earnings Available to Common Shareholders," "Adjusted Diluted Earnings Per Common Share," "Adjusted Return on Average Assets," "Adjusted Return on Average Shareholders' Equity," "Adjusted Return on Average Tangible Common Equity," "Adjusted Pre-Tax, Pre-Provision Earnings," "Adjusted Pre-Tax, Pre-Provision Return on Average Assets," "Efficiency Ratio," "Tangible Common Equity to Tangible Assets," "Tangible Book Value Per Share" 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, the impact of inflation, the effects of the Coronavirus Disease 2019 pandemic and its potential effects on the economic environment; 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)		2022			2022			2022			2022			2021
Earnings Summary
Net interest income	$	63,550		$	64,024		$	61,334		$	56,827		$	54,301
Provision for credit losses		3,544			6,974			5,441			4,167			467
Noninterest income		33,839			15,826			14,613			15,613			22,523
Noninterest expense		49,943			43,496			41,339			40,884			45,757
Income before income taxes		43,902			29,380			29,167			27,389			30,600
Income taxes		11,030			5,859			7,284			6,640			7,493
Net income		32,872			23,521			21,883			20,749			23,107
Preferred dividends		3,169			—			—			—			—
Net income available to common shareholders	$	29,703		$	23,521		$	21,883		$	20,749		$	23,107

Diluted earnings per common share	$	1.30		$	1.04		$	0.97		$	0.92		$	1.02
Weighted average common shares outstanding - diluted		22,503,611			22,390,438			22,360,819			22,350,307			22,350,771
Return on average assets		1.66	%		1.22	%		1.19	%		1.16	%		1.26	%
Return on average shareholders' equity		17.41	%		13.31	%		13.65	%		12.80	%		14.04	%
Return on average tangible common equity⁽¹⁾		25.89	%		20.20	%		19.14	%		17.84	%		19.69	%
Net interest margin		3.50	%		3.63	%		3.65	%		3.50	%		3.25	%
Efficiency ratio⁽¹⁾		58.26	%		54.26	%		53.10	%		55.73	%		52.61	%

Adjusted Earnings Performance Summary⁽¹⁾
Adjusted earnings available to common shareholders	$	19,278		$	23,568		$	22,191		$	20,815		$	25,416
Adjusted diluted earnings per common share	$	0.85		$	1.04		$	0.98		$	0.92		$	1.12
Adjusted return on average assets		1.13	%		1.22	%		1.21	%		1.16	%		1.39	%
Adjusted return on average shareholders' equity		11.89	%		13.34	%		13.84	%		12.84	%		15.44	%
Adjusted return on average tangible common equity		16.80	%		20.24	%		19.41	%		17.89	%		21.65	%
Adjusted pre-tax, pre-provision earnings	$	33,165		$	36,415		$	35,902		$	32,041		$	36,324
Adjusted pre-tax, pre-provision return on average assets		1.68	%		1.89	%		1.95	%		1.79	%		1.98	%

(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)		2022		2022			2022			2022			2021
Net interest income:
Interest income	$	90,215	$	79,556		$	69,236		$	62,748		$	60,427
Interest expense		26,665		15,532			7,902			5,921			6,126
Net interest income		63,550		64,024			61,334			56,827			54,301
Provision for credit losses:
Provision for credit losses on loans		2,950		6,974			4,741			4,132			—
Provision for credit losses on unfunded commitments		594		—			700			256			388
Provision for other credit losses		—		—			—			(221	)		79
Total provision for credit losses		3,544		6,974			5,441			4,167			467
Net interest income after provision for credit losses		60,006		57,050			55,893			52,660			53,834
Noninterest income:
Wealth management revenue		6,227		6,199			6,143			7,139			7,176
Residential mortgage banking revenue		316		210			384			599			1,103
Service charges on deposit accounts		2,511		2,597			2,304			2,068			2,338
Interchange revenue		3,478		3,531			3,590			3,280			3,677
(Loss) gain on sales of investment securities, net		—		(129	)		(101	)		—			—
Gain on termination of hedged interest rate swaps		17,531		—			—			—			1,845
Impairment on commercial mortgage servicing rights		—		—			(869	)		(394	)		(2,072	)
Company-owned life insurance		796		929			840			1,019			1,904
Other income		2,980		2,489			2,322			1,902			6,552
Total noninterest income		33,839		15,826			14,613			15,613			22,523
Noninterest expense:
Salaries and employee benefits		22,901		22,889			22,645			21,870			22,109
Occupancy and equipment		3,748		3,850			3,489			3,755			3,429
Data processing		6,302		6,093			6,082			5,873			5,819
Professional		1,726		1,693			1,516			1,972			1,499
Amortization of intangible assets		1,333		1,361			1,318			1,398			1,425
Other real estate owned		3,779		582			309			518			243
Loss on mortgage servicing rights held for sale		3,250		—			—			—			—
FHLB advances prepayment fees		—		—			—			—			4,859
Other expense		6,904		7,028			5,980			5,498			6,374
Total noninterest expense		49,943		43,496			41,339			40,884			45,757
Income before income taxes		43,902		29,380			29,167			27,389			30,600
Income taxes		11,030		5,859			7,284			6,640			7,493
Net income		32,872		23,521			21,883			20,749			23,107
Preferred stock dividends		3,169		—			—			—			—
Net income available to common shareholders	$	29,703	$	23,521		$	21,883		$	20,749		$	23,107

Basic earnings per common share	$	1.31	$	1.04		$	0.97		$	0.92		$	1.03
Diluted earnings per common share	$	1.30	$	1.04		$	0.97		$	0.92		$	1.02

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

	As of
	December 31,			September 30,			June 30,			March 31,			December 31,
(in thousands)		2022			2022			2022			2022			2021
Assets
Cash and cash equivalents	$	150,321		$	313,188		$	270,117		$	332,264		$	680,371
Investment securities		776,860			690,504			769,278			858,246			916,132
Loans		6,306,467			6,198,451			5,795,544			5,539,961			5,224,801
Allowance for credit losses on loans		(61,051	)		(58,639	)		(54,898	)		(52,938	)		(51,062	)
Total loans, net		6,245,416			6,139,812			5,740,646			5,487,023			5,173,739
Loans held for sale		1,286			4,338			5,298			8,931			32,045
Premises and equipment, net		78,293			77,519			77,668			77,857			79,220
Other real estate owned		6,729			11,141			11,131			11,537			12,059
Loan servicing rights, at lower of cost or fair value		1,205			1,297			25,879			27,484			28,865
Commercial FHA mortgage loan servicing rights held for sale		20,745			23,995			—			—			—
Goodwill		161,904			161,904			161,904			161,904			161,904
Other intangible assets, net		20,866			22,198			23,559			22,976			24,374
Company-owned life insurance		150,443			149,648			148,900			148,060			148,378
Other assets		241,433			226,333			201,432			202,433			186,718
Total assets	$	7,855,501		$	7,821,877		$	7,435,812		$	7,338,715		$	7,443,805

Liabilities and Shareholders' Equity
Noninterest-bearing demand deposits	$	1,935,773		$	2,025,237		$	1,972,261		$	1,965,032		$	2,245,701
Interest-bearing deposits		4,428,879			4,370,015			4,212,177			4,092,507			3,864,947
Total deposits		6,364,652			6,395,252			6,184,438			6,057,539			6,110,648
Short-term borrowings		42,311			58,518			67,689			60,352			76,803
FHLB advances and other borrowings		460,000			360,000			285,000			310,171			310,171
Subordinated debt		99,772			139,370			139,277			139,184			139,091
Trust preferred debentures		49,975			49,824			49,674			49,524			49,374
Other liabilities		80,217			79,634			73,546			76,959			93,881
Total liabilities		7,096,927			7,082,598			6,799,624			6,693,729			6,779,968
Total shareholders' equity		758,574			739,279			636,188			644,986			663,837
Total liabilities and shareholders' equity	$	7,855,501		$	7,821,877		$	7,435,812		$	7,338,715		$	7,443,805

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

	As of
	December 31,		September 30,		June 30,		March 31,		December 31,
(in thousands)		2022		2022		2022		2022		2021
Loan Portfolio
Equipment finance loans	$	616,751	$	577,323	$	546,267	$	528,572	$	521,973
Equipment finance leases		491,744		457,611		439,202		429,000		423,280
Commercial FHA warehouse lines		25,029		51,309		23,872		83,999		91,927
SBA PPP loans		1,916		2,810		6,409		22,862		52,477
Other commercial loans		870,878		904,841		814,710		802,692		783,811
Total commercial loans and leases		2,006,318		1,993,894		1,830,460		1,867,125		1,873,468
Commercial real estate		2,433,159		2,466,303		2,335,655		2,114,041		1,816,828
Construction and land development		320,882		225,549		203,955		188,668		193,749
Residential real estate		366,094		356,225		340,103		329,331		338,151
Consumer		1,180,014		1,156,480		1,085,371		1,040,796		1,002,605
Total loans	$	6,306,467	$	6,198,451	$	5,795,544	$	5,539,961	$	5,224,801

Deposit Portfolio
Noninterest-bearing demand	$	1,935,773	$	2,025,237	$	1,972,261	$	1,965,032	$	2,245,701
Interest-bearing:
Checking		1,920,458		1,905,439		1,808,885		1,779,018		1,663,021
Money market		1,184,101		1,125,333		1,027,547		964,352		869,067
Savings		661,932		704,245		740,364		710,955		679,115
Time		649,552		620,960		620,363		619,386		630,583
Brokered time		12,836		14,038		15,018		18,796		23,161
Total deposits	$	6,364,652	$	6,395,252	$	6,184,438	$	6,057,539	$	6,110,648

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)		2022			2022			2022			2022			2021
Average Balance Sheets
Cash and cash equivalents	$	220,938		$	195,657		$	226,517		$	384,231		$	685,655
Investment securities		736,579			749,022			818,927			894,634			915,707
Loans		6,240,277			6,040,358			5,677,791			5,274,051			4,995,794
Loans held for sale		3,883			6,044			9,865			31,256			34,272
Nonmarketable equity securities		43,618			37,765			36,338			36,378			39,203
Total interest-earning assets		7,245,295			7,028,846			6,769,438			6,620,550			6,670,631
Non-earning assets		609,866			618,138			615,348			631,187			605,060
Total assets	$	7,855,161		$	7,646,984		$	7,384,786		$	7,251,737		$	7,275,691

Interest-bearing deposits	$	4,452,801		$	4,325,098		$	4,152,764		$	3,953,249		$	3,913,475
Short-term borrowings		47,391			58,271			59,301			70,044			66,677
FHLB advances and other borrowings		460,598			340,163			307,611			311,282			319,954
Subordinated debt		107,374			139,324			139,232			139,139			139,046
Trust preferred debentures		49,902			49,751			49,602			49,451			49,307
Total interest-bearing liabilities		5,118,066			4,912,607			4,708,510			4,523,165			4,488,459
Noninterest-bearing deposits		1,936,977			1,969,873			1,967,263			1,989,413			2,049,802
Other noninterest-bearing liabilities		50,935			63,638			66,009			81,832			84,538
Shareholders' equity		749,183			700,866			643,004			657,327			652,892
Total liabilities and shareholders' equity	$	7,855,161		$	7,646,984		$	7,384,786		$	7,251,737		$	7,275,691

Yields
Earning Assets
Cash and cash equivalents		3.85	%		2.28	%		0.83	%		0.18	%		0.16	%
Investment securities		2.62	%		2.44	%		2.41	%		2.22	%		2.12	%
Loans		5.26	%		4.83	%		4.49	%		4.40	%		4.36	%
Loans held for sale		4.86	%		3.87	%		3.15	%		2.86	%		3.53	%
Nonmarketable equity securities		6.16	%		5.78	%		5.38	%		5.40	%		5.07	%
Total interest-earning assets		4.96	%		4.51	%		4.12	%		3.87	%		3.62	%

Interest-Bearing Liabilities
Interest-bearing deposits		1.77	%		0.94	%		0.37	%		0.22	%		0.22	%
Short-term borrowings		0.26	%		0.19	%		0.15	%		0.14	%		0.12	%
FHLB advances and other borrowings		3.67	%		2.83	%		1.87	%		1.58	%		1.75	%
Subordinated debt		5.45	%		5.77	%		5.78	%		5.78	%		5.78	%
Trust preferred debentures		8.47	%		6.54	%		5.05	%		4.21	%		3.90	%
Total interest-bearing liabilities		2.07	%		1.25	%		0.67	%		0.53	%		0.54	%

Cost of Deposits		1.23	%		0.65	%		0.25	%		0.15	%		0.15	%

Net Interest Margin		3.50	%		3.63	%		3.65	%		3.50	%		3.25	%

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)		2022			2022			2022			2022			2021
Asset Quality
Loans 30-89 days past due	$	32,372		$	28,275		$	16,212		$	29,044		$	17,514
Nonperforming loans		49,423			46,882			56,883			52,900			42,580
Nonperforming assets		57,824			59,524			69,344			66,164			57,068
Net charge-offs		538			3,233			2,781			2,256			4,613
Loans 30-89 days past due to total loans		0.51	%		0.46	%		0.28	%		0.52	%		0.34	%
Nonperforming loans to total loans		0.78	%		0.76	%		0.98	%		0.95	%		0.81	%
Nonperforming assets to total assets		0.74	%		0.76	%		0.93	%		0.90	%		0.77	%
Allowance for credit losses to total loans		0.97	%		0.95	%		0.95	%		0.96	%		0.98	%
Allowance for credit losses to nonperforming loans		123.53	%		125.08	%		96.51	%		100.07	%		119.92	%
Net charge-offs to average loans		0.03	%		0.21	%		0.20	%		0.17	%		0.37	%

Wealth Management
Trust assets under administration	$	3,505,372		$	3,355,019		$	3,503,227		$	3,934,140		$	4,100,179

Market Data
Book value per share at period end	$	29.17		$	28.48		$	28.84		$	29.26		$	30.11
Tangible book value per share at period end⁽¹⁾	$	20.94		$	20.14		$	20.43		$	20.87		$	21.66
Market price at period end	$	26.62		$	23.57		$	24.04		$	28.86		$	24.79
Common shares outstanding at period end		22,214,913			22,074,740			22,060,255			22,044,626			22,050,537

Capital
Total capital to risk-weighted assets		12.38	%		12.79	%		11.44	%		11.74	%		12.19	%
Tier 1 capital to risk-weighted assets		10.21	%		10.05	%		8.63	%		8.82	%		9.16	%
Tier 1 common capital to risk-weighted assets		7.77	%		7.56	%		7.66	%		7.80	%		8.08	%
Tier 1 leverage ratio		9.43	%		9.40	%		7.98	%		7.96	%		7.75	%
Tangible common equity to tangible assets⁽¹⁾		6.06	%		5.82	%		6.22	%		6.43	%		6.58	%

(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)		2022			2022			2022			2022			2021
Income before income taxes - GAAP	$	43,902		$	29,380		$	29,167		$	27,389		$	30,600
Adjustments to noninterest income:
Loss on sales of investment securities, net		—			129			101			—			—
(Gain) on termination of hedged interest rate swaps		(17,531	)		—			—			—			(1,845	)
Total adjustments to noninterest income		(17,531	)		129			101			—			(1,845	)
Adjustments to noninterest expense:
(Loss) on mortgage servicing rights held for sale		(3,250	)		—			—			—			—
FHLB advances prepayment fees		—			—			—			—			(4,859	)
Integration and acquisition expenses		—			68			(324	)		(91	)		(171	)
Total adjustments to noninterest expense		(3,250	)		68			(324	)		(91	)		(5,030	)
Adjusted earnings pre tax		29,621			29,441			29,592			27,480			33,785
Adjusted earnings tax		7,174			5,873			7,401			6,665			8,369
Adjusted earnings - non-GAAP		22,447			23,568			22,191			20,815			25,416
Preferred stock dividends		3,169			—			—			—			—
*Adjusted earnings available to common shareholders*	$	19,278		$	23,568		$	22,191		$	20,815		$	25,416
Adjusted diluted earnings per common share	$	0.85		$	1.04		$	0.98		$	0.92		$	1.12
Adjusted return on average assets		1.13	%		1.22	%		1.21	%		1.16	%		1.39	%
Adjusted return on average shareholders' equity		11.89	%		13.34	%		13.84	%		12.84	%		15.44	%
Adjusted return on average tangible common equity		16.80	%		20.24	%		19.41	%		17.89	%		21.65	%


Adjusted Pre-Tax, Pre-Provision Earnings Reconciliation

	For the Quarter Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
(dollars in thousands)		2022			2022			2022			2022			2021
Adjusted earnings pre tax - non-GAAP	$	29,621		$	29,441		$	29,592		$	27,480		$	33,785
Provision for credit losses		3,544			6,974			5,441			4,167			467
Impairment on commercial mortgage servicing rights		—			—			869			394			2,072
*Adjusted pre-tax, pre-provision earnings - non-GAAP*	$	33,165		$	36,415		$	35,902		$	32,041		$	36,324
Adjusted pre-tax, pre-provision return on average assets		1.68	%		1.89	%		1.95	%		1.79	%		1.98	%

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,
		2022			2022			2022			2022			2021
(dollars in thousands)
Noninterest expense - GAAP	$	49,943		$	43,496		$	41,339		$	40,884		$	45,757
Loss on mortgage servicing rights held for sale		(3,250	)		—			—			—			—
FHLB advances prepayment fees		—			—			—			—			(4,859	)
Integration and acquisition expenses		—			68			(324	)		(91	)		(171	)
Adjusted noninterest expense	$	46,693		$	43,564		$	41,015		$	40,793		$	40,727

Net interest income - GAAP	$	63,550		$	64,024		$	61,334		$	56,827		$	54,301
Effect of tax-exempt income		286			307			321			369			372
Adjusted net interest income		63,836			64,331			61,655			57,196			54,673

Noninterest income - GAAP		33,839			15,826			14,613			15,613			22,523
Impairment on commercial mortgage servicing rights		—			—			869			394			2,072
Loss on sales of investment securities, net		—			129			101			—			—
(Gain) on termination of hedged interest rate swaps		(17,531	)		—			—			—			(1,845	)
Adjusted noninterest income		16,308			15,955			15,583			16,007			22,750

Adjusted total revenue	$	80,144		$	80,286		$	77,238		$	73,203		$	77,423

*Efficiency ratio*		58.26	%		54.26	%		53.10	%		55.73	%		52.61	%

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)		2022			2022			2022			2022			2021
Shareholders' Equity to Tangible Common Equity
Total shareholders' equity—GAAP	$	758,574		$	739,279		$	636,188		$	644,986		$	663,837
Adjustments:
Preferred Stock		(110,548	)		(110,548	)		—			—			—
Goodwill		(161,904	)		(161,904	)		(161,904	)		(161,904	)		(161,904	)
Other intangible assets, net		(20,866	)		(22,198	)		(23,559	)		(22,976	)		(24,374	)
Tangible common equity	$	465,256		$	444,629		$	450,725		$	460,106		$	477,558

Total Assets to Tangible Assets:
Total assets—GAAP	$	7,855,501		$	7,821,877		$	7,435,812		$	7,338,715		$	7,443,805
Adjustments:
Goodwill		(161,904	)		(161,904	)		(161,904	)		(161,904	)		(161,904	)
Other intangible assets, net		(20,866	)		(22,198	)		(23,559	)		(22,976	)		(24,374	)
Tangible assets	$	7,672,731		$	7,637,775		$	7,250,349		$	7,153,835		$	7,257,527

Common Shares Outstanding		22,214,913			22,074,740			22,060,255			22,044,626			22,050,537

*Tangible Common Equity to Tangible Assets*		6.06	%		5.82	%		6.22	%		6.43	%		6.58	%
*Tangible Book Value Per Share*	$	20.94		$	20.14		$	20.43		$	20.87		$	21.66

Return on Average Tangible Common Equity (ROATCE)

	For the Quarter Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
(dollars in thousands)		2022			2022			2022			2022			2021
Net income	$	32,872		$	23,521		$	21,883		$	20,749		$	23,107

Average total shareholders' equity—GAAP	$	749,183		$	700,866		$	643,004		$	657,327		$	652,892
Adjustments:
Preferred Stock		(110,548	)		(54,072	)		—			—			—
Goodwill		(161,904	)		(161,904	)		(161,904	)		(161,904	)		(161,904	)
Other intangible assets, net		(22,859	)		(22,589	)		(22,570	)		(23,638	)		(25,311	)
Average tangible common equity	$	453,872		$	462,301		$	458,530		$	471,785		$	465,677
ROATCE		25.89	%		20.20	%		19.14	%		17.84	%		19.69	%

Midland States Bancorp, Inc. Announces 2022 Fourth Quarter Results