Fourth Quarter 2024 Highlights:

Net loss available to common shareholders of $54.8 million, or $2.52 per diluted share
Adjusted pre-tax, pre-provision earnings of $21.5 million, compared to $27.5 million in prior quarter
Sold $87.1 million LendingPoint consumer loan portfolio, recognizing net charge-offs and provision for credit losses of $17.3 million
Committed to a plan to sell $371.7 million Greensky portfolio, recognizing net charge-offs and provision for credit losses of $33.4 million
Net charge-offs on loans of $102.7 million and provision for credit losses on loans of $93.5 million to address credit issues in the loan portfolio including credit losses for LendingPoint and Greensky portfolios
Net interest margin of 3.19%, compared to 3.10% in prior quarter
Wealth management revenue of $7.7 million, compared to $7.1 million in prior quarter
Common equity tier 1 capital ratio of 8.37%, compared to 9.00% at September 30, 2024 and 8.40% at December 31, 2023
Total risk-based capital ratio of 13.38%, compared to 13.98% at September 30, 2024 and 13.20% at December 31, 2023

EFFINGHAM, Ill., Jan. 23, 2025 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (NASDAQ:MSBI) (the "Company") today reported net loss available to common shareholders of $54.8 million, or $2.52 per diluted share, for the fourth quarter of 2024, compared to net income of $16.2 million, or $0.74 per diluted share, for the third quarter of 2024. This also compares to net income available to common shareholders of $18.5 million, or $0.84 per diluted share, for the fourth quarter of 2023.

During the fourth quarter of 2024, the Company took several actions to address its credit quality issues and exit its non-core consumer loan portfolios. Our deteriorating credit quality issues were primarily within three sectors of our business: non-core consumer loans, Specialty Finance Group, and Midland Equipment Financing.

In the quarter, the Company decided to accelerate the reduction of our non-core consumer loan portfolio through sales. These loans were originated by our Fintech partners, LendingPoint and Greensky. As a result of LendingPoint's system conversion in the third quarter of 2023, our portfolio experienced significant credit deterioration and servicing-related deficiencies. In December 2024, we sold our $87.1 million LendingPoint portfolio, recognizing net charge-offs and provision for credit losses of $17.3 million on the sale. We also committed to a plan to sell $371.7 million of our Greensky consumer loan portfolio and recognized net charge-offs and provision for credit losses of $33.4 million when these loans were transferred to held for sale. We expect to provide partial financing on the sale with senior secured loans to a special purpose entity with credit subordination and a 20% risk weighting.

The Specialty Finance Group provides bridge loan financing for commercial real estate projects, primarily multi-family and healthcare. These projects can include construction and seek short term financing in anticipation of obtaining permanent secondary market financing. The loans are typically outside of the Company's primary market areas. We completed a strategic review of this portfolio including obtaining updated appraisals on loans that had shown elevated credit risk in the third and fourth quarters. As a result of this review, five loans with balances of $57.8 million were moved from substandard to non-performing with recognized charge-offs of $6.6 million. In addition, updated appraisals were obtained for five non-performing loans with balances of $55.8 million which resulted in charge-offs of $18.8 million recognized in the fourth quarter of 2024. In addition, we recognized impairment expense on an OREO property related to a former assisted living loan of $2.1 million in the fourth quarter of 2024.

The strategic review also included all criticized loans, construction loans and loans that failed our stress test in all portfolios, including our community bank. This resulted in charge-offs of almost all specific reserves. In addition, the Company tightened credit standards going forward and will not originate new construction loans in the Specialty Finance Group. Our strategic actions around credit administration will better position the Company going forward.

The equipment finance portfolio includes loans and leases originated to customers throughout the United States. During 2024, we experienced elevated charge-offs primarily within the trucking industry. Charge-offs in this portfolio were $15.3 million in the fourth quarter of 2024 as we evaluated equipment values for nonaccrual assets. Nonaccrual loans and leases in the finance portfolio decreased to $11.3 million from $21.4 million at September 30, 2024. Additionally, based on further deterioration in the industry, we evaluated salvage values of the leases and loans related to this industry, along with the carrying values of repossessed and off-lease equipment, and recognized impairment expense of $7.6 million.

Jeffrey G. Ludwig, President and Chief Executive Officer of the Company, said, "Improving credit quality is our number one priority and in the fourth quarter we took significant steps to reduce credit risk and address our underlying credit issues. During the quarter we made the difficult decision to exit our non-core consumer portfolio and charge-off deteriorating credits in an effort to better position the Company to grow our core community banking business. Our team also reviewed our credit risk appetite profile and tightened standards going forward. On a positive note, substandard accruing loans decreased significantly in the quarter with minimal downgrades to substandard accruing. Delinquencies decreased during the quarter as well.

"We are seeing positive trends in new client additions in both our community bank and wealth management, net interest margin expanded in the quarter and with the actions we took in the quarter to reduce credit risk, we believe we are well positioned to deliver solid financial performance in 2025. We will continue to make investments in talent, technology, and marketing to further enhance our ability to generate profitable growth in the coming years," said Mr. Ludwig.

Balance Sheet Highlights

Total assets were $7.53 billion at December 31, 2024, compared to $7.75 billion at September 30, 2024, and $7.87 billion at December 31, 2023. At December 31, 2024, portfolio loans were $5.17 billion, compared to $5.75 billion at September 30, 2024, and $6.13 billion at December 31, 2023.

Loans

During the fourth quarter of 2024, outstanding loans declined by $581.2 million, or 10.1%, from September 30, 2024, primarily as a result of the Company's decision to sell the Greensky and LendingPoint consumer loan portfolios, and the continuation of the Company's plan to decrease its equipment financing portfolio to focus on commercial loan opportunities in our community banking regions.

Consumer loans decreased $506.0 million to $157.2 million at December 31, 2024, primarily due to the loan portfolio sale, transfer to held for sale, and loan paydowns. Equipment finance loan and lease balances decreased $51.7 million during the fourth quarter of 2024 as the Company continued to reduce its concentration of this product within the overall loan portfolio. Equipment financing and consumer loans comprised 15.6% and 3.0%, respectively, of the loan portfolio at December 31, 2024, compared to 15.0% and 11.5%, respectively, at September 30, 2024.

	As of
	December 31,		September 30,		June 30,		March 31,		December 31,
(in thousands)	2024		2024		2024		2024		2023
Loan Portfolio
Commercial loans	$	921,930	$	863,922	$	939,458	$	913,564	$	951,387
Equipment finance loans		416,969		442,552		461,409		494,068		531,143
Equipment finance leases		391,390		417,531		428,659		455,879		473,350
Commercial FHA warehouse lines		8,004		50,198		—		8,035		—
Total commercial loans and leases		1,738,293		1,774,203		1,829,526		1,871,546		1,955,880
Commercial real estate		2,591,664		2,510,472		2,421,505		2,397,113		2,406,845
Construction and land development		299,842		422,253		476,528		474,128		452,593
Residential real estate		380,557		378,657		378,393		378,583		380,583
Consumer		157,218		663,234		746,042		837,092		935,178
Total loans	$	5,167,574	$	5,748,819	$	5,851,994	$	5,958,462	$	6,131,079

Loan Quality

Substandard accruing loans decreased $88.7 million to $78.8 million at December 31, 2024, as compared to September 30, 2024. This decrease was the result of a payoff of a $15.4 million relationship and the transfer of $75.1 million of problem loans to nonaccrual status. No significant new substandard loans were identified during the quarter.

Nonperforming loans increased $25.6 million to $140.1 million at December 31, 2024, as compared to September 30, 2024. Charged off nonperforming loans in the fourth quarter of 2024 totaled $48.9 million, partially offsetting the amount of loans transferred to nonaccrual status in the quarter.

	As of and for the Three Months Ended
(in thousands)	December 31,			September 30,			June 30,			March 31,			December 31,
(in thousands)		2024			2024			2024			2024			2023
Asset Quality
Loans 30-89 days past due	$	36,522		$	55,329		$	54,045		$	58,854		$	82,778
Nonperforming loans		140,138			114,556			112,124			104,979			56,351
Nonperforming assets		148,290			126,771			123,774			116,721			67,701
Substandard accruing loans		78,800			167,549			135,555			149,049			184,224
Net charge-offs		102,660			11,379			2,874			4,445			5,117
Loans 30-89 days past due to total loans		0.71	%		0.96	%		0.92	%		0.99	%		1.35	%
Nonperforming loans to total loans		2.71	%		1.99	%		1.92	%		1.76	%		0.92	%
Nonperforming assets to total assets		1.97	%		1.64	%		1.60	%		1.49	%		0.86	%
Allowance for credit losses to total loans		1.46	%		1.49	%		1.58	%		1.31	%		1.12	%
Allowance for credit losses to nonperforming loans		53.81	%		74.90	%		82.22	%		74.35	%		121.56	%
Net charge-offs to average loans		7.23	%		0.78	%		0.20	%		0.30	%		0.33	%

The Company recognized provision expense for credit losses on loans of $93.5 million in the fourth quarter of 2024, and recorded net loan charge-offs of $102.7 million. Provision expense for credit losses on loans was $5.0 million and $7.0 million in the third quarter of 2024 and fourth quarter of 2023, respectively. For the year ended December 31, 2024, the Company recognized provision expense for credit losses of $129.3 million and recorded net charge-offs of $121.4 million.

The allowance for credit losses on loans totaled $75.4 million at December 31, 2024, compared to $85.8 million at September 30, 2024, and $68.5 million at December 31, 2023. The allowance as a percentage of total loans was 1.46% at December 31, 2024, compared to 1.49% at September 30, 2024, and 1.12% at December 31, 2023.

Deposits

Total deposits were $6.20 billion at December 31, 2024, compared with $6.26 billion at September 30, 2024. Noninterest-bearing deposits increased $4.9 million while interest-bearing deposits decreased $64.5 million. Brokered time deposits represented 4.2% of total deposits at December 31, 2024.

	As of
	December 31,		September 30,		June 30,		March 31,		December 31,
(in thousands)	2024		2024		2024		2024		2023
Deposit Portfolio
Noninterest-bearing demand	$	1,055,564	$	1,050,617	$	1,108,521	$	1,212,382	$	1,145,395
Interest-bearing:
Checking		2,378,256		2,389,970		2,343,533		2,394,163		2,511,840
Money market		1,173,630		1,187,139		1,143,668		1,128,463		1,135,629
Savings		507,305		510,260		538,462		555,552		559,267
Time		822,981		849,413		852,415		845,190		862,865
Brokered time		259,507		269,437		131,424		188,234		94,533
Total deposits	$	6,197,243	$	6,256,836	$	6,118,023	$	6,323,984	$	6,309,529

Results of Operations Highlights

Net Interest Income and Margin

During the fourth quarter of 2024, net interest income and net interest margin, on a tax-equivalent basis, increased to $56.3 million and 3.19%, respectively, compared to $55.2 million and 3.10%, respectively, in the third quarter of 2024. The actions taken by the Federal Reserve Bank to lower short term interest rates resulted in lower funding costs for the Company. Net interest income and net interest margin, on a tax-equivalent basis, were $58.3 million and 3.21%, respectively, in the fourth quarter of 2023.

Average interest-earning assets for the fourth quarter of 2024 were $7.01 billion, compared to $7.07 billion for the third quarter of 2024. The yield on interest-earning assets decreased 11 basis points to 5.80% compared to the third quarter of 2024, due in part to interest reversals of $1.5 million on substandard loans transferred to nonaccrual status in the fourth quarter and the impact of interest rate cuts enacted by the Federal Reserve Bank. Interest-earning assets averaged $7.20 billion for the fourth quarter of 2023.

Average loans were $5.65 billion for the fourth quarter of 2024, compared to $5.78 billion for the third quarter of 2024 and $6.20 billion for the fourth quarter of 2023. The yield on loans was 6.04% for the fourth quarter of 2024, compared to 6.15% for the third quarter of 2024 and 6.00% for the fourth quarter of 2023.

Investment securities averaged $1.21 billion for the fourth quarter of 2024, and yielded 4.73%, compared to an average balance and yield of $1.16 billion and 4.71%, respectively, for the third quarter of 2024. Investment securities averaged $883.2 million and yielded 4.16% for the fourth quarter of 2023. The Company purchased additional higher-yielding investments during 2024, resulting in the increased average balance and yield.

Average interest-bearing liabilities for the fourth quarter of 2024 were $5.69 billion, compared to $5.76 billion for the third quarter of 2024. The cost of funds decreased 24 basis points to 3.21% compared to the third quarter of 2024. Interest-bearing liabilities averaged $5.88 billion for the fourth quarter of 2023.

Average interest-bearing deposits were $5.24 billion for the fourth quarter of 2024, compared to $5.13 billion for the third quarter of 2024, and $5.30 billion for the fourth quarter of 2023. Cost of interest-bearing deposits was 3.04% in the fourth quarter of 2024, which represented a 21 basis point decrease from the third quarter of 2024, due to the recent rate cuts enacted by the Federal Reserve Bank.

	For the Three Months Ended
(dollars in thousands)	December 31, 2024						September 30, 2024						December 31, 2023
Interest-earning assets	Average Balance		Interest & Fees		Yield/ Rate		Average Balance		Interest & Fees		Yield/ Rate		Average Balance		Interest & Fees		Yield/ Rate
Cash and cash equivalents	$	96,676	$	1,101	4.53	%	$	75,255	$	1,031	5.45	%	$	77,363	$	1,054	5.41	%
Investment securities⁽¹⁾		1,213,248		14,417	4.73			1,162,751		13,752	4.71			883,153		9,257	4.16
Loans⁽¹⁾⁽²⁾		5,652,586		85,877	6.04			5,783,408		89,344	6.15			6,196,362		93,757	6.00
Loans held for sale		12,854		129	4.00			7,505		124	6.57			4,429		81	7.26
Nonmarketable equity securities		35,171		632	7.15			41,137		788	7.62			41,192		715	6.89
Total interest-earning assets		7,010,535		102,156	5.80			7,070,056		105,039	5.91			7,202,499		104,864	5.78
Noninterest-earning assets		669,300						653,279						695,293
Total assets	$	7,679,835					$	7,723,335					$	7,897,792

Interest-Bearing Liabilities
Interest-bearing deposits	$	5,241,702	$	40,016	3.04	%	$	5,132,640	$	41,970	3.25	%	$	5,295,296	$	39,156	2.93	%
Short-term borrowings		31,853		214	2.68			53,577		602	4.47			13,139		15	0.47
FHLB advances & other borrowings		284,033		2,880	4.03			428,739		4,743	4.40			430,207		4,750	4.38
Subordinated debt		80,410		1,498	7.41			89,120		1,228	5.48			93,512		1,281	5.43
Trust preferred debentures		51,132		1,292	10.05			50,990		1,341	10.46			50,541		1,402	11.00
Total interest-bearing liabilities		5,689,130		45,900	3.21			5,755,066		49,884	3.45			5,882,695		46,604	3.14
Noninterest-bearing deposits		1,066,520						1,075,712						1,142,062
Other noninterest-bearing liabilities		117,478						97,235						108,245
Shareholders' equity		806,707						795,322						764,790
Total liabilities and shareholder's equity	$	7,679,835					$	7,723,335					$	7,897,792

Net Interest Margin			$	56,256	3.19	%			$	55,155	3.10	%			$	58,260	3.21	%

Cost of Deposits					2.52	%					2.69	%					2.41	%

(1) Interest income and average rates for tax-exempt loans and investment securities are presented on a tax-equivalent basis, assuming a federal income tax rate of 21%. Tax-equivalent adjustments totaled $0.2 million for each of the three months ended December 31, 2024, September 30, 2024 and December 31, 2023, respectively.

(2) Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.

For the year ended December 31, 2024, net interest income, on a tax-equivalent basis, decreased to $222.8 million, with a tax-equivalent net interest margin of 3.15%, compared to net interest income, on a tax-equivalent basis, of $236.8 million, and a tax-equivalent net interest margin of 3.26% for the year ended December 31, 2023.

The yield on earning assets increased 26 basis points to 5.83% for the year ended December 31, 2024 compared to the prior year. However, the cost of interest-bearing liabilities increased at a faster rate during this period, increasing 44 basis points to 3.31% for the year ended December 31, 2024.

	For the Years Ended
(dollars in thousands)	December 31, 2024						December 31, 2023
Interest-earning assets	Average Balance		Interest & Fees		Yield/Rate		Average Balance		Interest & Fees		Yield/Rate
Cash and cash equivalents	$	76,675	$	3,958	5.16	%	$	77,046	$	3,922	5.09	%
Investment securities⁽¹⁾		1,116,186		51,682	4.63			854,576		30,361	3.55
Loans⁽¹⁾⁽²⁾		5,840,216		353,447	6.05			6,292,260		367,762	5.84
Loans held for sale		7,185		392	5.45			4,034		260	6.45
Nonmarketable equity securities		39,108		3,070	7.85			43,318		2,819	6.51
Total interest-earning assets		7,079,370		412,549	5.83			7,271,234		405,124	5.57
Noninterest-earning assets		665,308						635,490
Total assets	$	7,744,678					$	7,906,724

Interest-Bearing Liabilities
Interest-bearing deposits	$	5,167,787	$	160,676	3.11	%	$	5,241,723	$	136,947	2.61	%
Short-term borrowings		45,251		1,960	4.33			23,406		68	0.29
FHLB advances & other borrowings		381,525		16,495	4.32			460,781		20,709	4.49
Subordinated debt		89,028		5,271	5.92			95,986		5,266	5.49
Trust preferred debentures		50,938		5,380	10.56			50,298		5,289	10.52
Total interest-bearing liabilities		5,734,529		189,782	3.31			5,872,194		168,279	2.87
Noninterest-bearing deposits		1,106,388						1,173,873
Other noninterest-bearing liabilities		109,777						90,562
Shareholders' equity		793,984						770,095
Total liabilities and shareholders' equity	$	7,744,678					$	7,906,724

Net Interest Margin			$	222,767	3.15	%			$	236,845	3.26	%

Cost of Deposits					2.56	%					2.13	%

(1) Interest income and average rates for tax-exempt loans and investment securities are presented on a tax-equivalent basis, assuming a federal income tax rate of 21%. Tax-equivalent adjustments totaled $0.8 million for each of the years ended December 31, 2024 and 2023, respectively.

(2) Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.

Noninterest Income

Noninterest income was $19.6 million for the fourth quarter of 2024, compared to $19.3 million for the third quarter of 2024. Noninterest income for the fourth quarter of 2023 was $20.5 million, and included incremental servicing revenues of $2.2 million and $1.6 million related to our commercial FHA servicing portfolio and the Greensky portfolio, respectively. Also included was a $1.1 million one-time gain from the sale of Visa B stock, offset by $2.9 million of losses on the sale of investment securities. Excluding these transactions, noninterest income for the fourth quarter of 2024, the third quarter of 2024, and the fourth quarter of 2023 was $19.6 million, $19.3 million, and $18.5 million, respectively.

	For the Three Months Ended									For the Years Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
(in thousands)		2024			2024			2023			2024			2023
Noninterest income
Wealth management revenue	$	7,660		$	7,104		$	6,604		$	28,697		$	25,572
Service charges on deposit accounts		3,506			3,411			3,246			13,154			11,990
Interchange revenue		3,528			3,506			3,585			13,955			14,302
Residential mortgage banking revenue		637			697			451			2,418			1,903
Income on company-owned life insurance		1,975			1,982			1,753			7,683			4,439
Loss on sales of investment securities, net		(34	)		(44	)		(2,894	)		(230	)		(9,372	)
Other income		2,289			2,683			7,768			12,066			17,756
Total noninterest income	$	19,561		$	19,339		$	20,513		$	77,743		$	66,590

Wealth management revenue totaled $7.7 million in the fourth quarter of 2024, an increase of $0.6 million, or 7.8%, as compared to the third quarter of 2024, due to increases in trust and estate fees. Assets under administration were $4.15 billion at December 31, 2024 compared to $4.27 billion and $3.73 billion at September 30, 2024 and December 31, 2023, respectively.

Income on company-owned life insurance income totaled $2.0 million, $2.0 million and $1.8 million for the fourth quarter of 2024, the third quarter of 2024, and the fourth quarter of 2023, respectively.

On a full year basis, noninterest income increased $11.2 million, or 16.7%. Wealth management revenue increased $3.1 million due to increases in assets under administration and estate fees. Income on company-owned life insurance increased $3.2 million. The Company surrendered certain low-yielding life insurance policies and purchased additional policies in the third quarter of 2023, resulting in the increase in revenue. In 2024, we recognized net losses on the sales of investment securities of $0.2 million compared to $9.4 million in 2023, as we took advantage of certain market conditions last year to reposition out of lower yielding securities into other structures, which resulted in improved overall margin, liquidity and capital allocations. Several one-time transactions were recognized in other noninterest income in 2023, including incremental servicing revenues of $2.2 million and $1.6 million related to our commercial FHA servicing portfolio and the Greensky portfolio, respectively. In addition, the Company recognized a $1.1 million one-time gain from the sale of Visa B stock, a gain of $0.7 million on the redemption of subordinated debt and a gain of $0.8 million on the sale of OREO.

Noninterest Expense

Noninterest expense was $54.2 million in the fourth quarter of 2024, compared to $46.7 million in the third quarter of 2024 and $44.5 million in the fourth quarter of 2023. Noninterest expense for the fourth quarter of 2024 included $7.6 million of impairment on equipment financing operating lease collateral and surrendered equipment, and $2.1 million of impairment on an OREO property. Excluding these items, noninterest expense for the fourth quarter of 2024, the third quarter of 2024, and the fourth quarter of 2023 was $44.5 million, $46.7 million, and $44.5 million, respectively.

On a full year basis, in addition to the fourth quarter expenses previously described, costs related to upgrades to our ATM fleet, loan collection expenses, and settlement of various lawsuits drove the increase in noninterest expense as compared to the prior year.

The efficiency ratio for the quarter ended December 31, 2024 was 71.42% compared to 62.76% for the quarter ended September 30, 2024, and 55.22% for the fourth quarter of 2023.

	For the Three Months Ended						For the Years Ended
	December 31,		September 30,		December 31,		December 31,		December 31,
(in thousands)	2024		2024		2023		2024		2023
Noninterest expense
Salaries and employee benefits	$	22,283	$	24,382	$	24,031	$	93,639	$	93,438
Occupancy and equipment		4,286		4,393		3,934		16,785		15,986
Data processing		7,278		6,955		6,963		28,160		26,286
Professional services		1,580		1,744		2,072		7,822		7,049
Amortization of intangible assets		952		951		1,130		4,008		4,758
Impairment on leased assets and surrendered assets		7,601		—		—		7,601		—
FDIC insurance		1,383		1,402		1,147		5,278		4,779
Other expense		8,820		6,906		5,211		29,969		21,606
Total noninterest expense	$	54,183	$	46,733	$	44,488	$	193,262	$	173,902

Income Tax Expense

Income tax benefit was $19.6 million for the fourth quarter of 2024, compared to expenses of $4.1 million for the third quarter of 2024 and $6.4 million for the fourth quarter of 2023. The resulting effective tax rates were 27.2%, 18.1% and 23.7%, respectively.

Capital

At December 31, 2024, Midland States Bank and the Company exceeded all regulatory capital requirements under Basel III, and Midland States Bank met the qualifications to be a ‘‘well-capitalized'' financial institution, as summarized in the following table:

	As of December 31, 2024
	Midland States Bank	Midland States Bancorp, Inc.	Minimum Regulatory Requirements⁽²⁾
Total capital to risk-weighted assets	12.75%	13.38%	10.50%
Tier 1 capital to risk-weighted assets	11.54%	11.11%	8.50%
Common equity Tier 1 capital to risk-weighted assets	11.54%	8.37%	7.00%
Tier 1 leverage ratio	9.71%	9.36%	4.00%
Tangible common equity to tangible assets⁽¹⁾	N/A	6.14%	N/A

(1) A non-GAAP financial measure. Refer to page 17 for a reconciliation to the comparable GAAP financial measure.

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

The impact of rising interest rates on the Company's investment portfolio and cash flow hedges resulted in an accumulated other comprehensive loss of $82.0 million at December 31, 2024, which reduced tangible book value by $3.81 per share.

Stock Repurchase Program

As previously disclosed, on December 5, 2023, the Company's board of directors authorized a new share repurchase program, pursuant to which the Company was authorized to repurchase up to $25.0 million of common stock through December 31, 2024. During the fourth quarter of 2024, the Company did not repurchased any shares of its common stock. The program terminated effective December 31, 2024.

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, 2024, the Company had total assets of approximately $7.53 billion, and its Wealth Management Group had assets under administration of approximately $4.15 billion. The Company provides a full range of commercial and consumer banking products and services and business equipment financing, merchant credit card services, trust and investment management, insurance and financial planning services. For additional information, visit https://www.midlandsb.com/ or https://www.linkedin.com/company/midland-states-bank.

Non-GAAP Financial Measures

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

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

Forward-Looking Statements

Readers should note that in addition to the historical information contained herein, this press release includes "forward-looking statements" within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including but not limited to statements about the Company's plans, objectives, future performance, goals and future earnings levels. These statements are subject to many risks and uncertainties, including changes in interest rates and other general economic, business and political conditions, the impact of inflation, increased deposit volatility and potential regulatory developments; changes in the financial markets; changes in business plans as circumstances warrant; risks relating to acquisitions; changes to U.S. tax laws, regulations and guidance; and other risks detailed from time to time in filings made by the Company with the Securities and Exchange Commission. Readers should note that the forward-looking statements included in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "will," "propose," "may," "plan," "seek," "expect," "intend," "estimate," "anticipate," "believe," "continue," or similar terminology. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

CONTACTS:

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

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

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

	As of and for the Three Months Ended									As of and for the Years Ended
(dollars in thousands, except per share data)	December 31, 2024			September 30, 2024			December 31, 2023			December 31, 2024			December 31, 2023
Earnings Summary
Net interest income	$	56,035		$	54,950		$	58,077		$	221,957		$	236,017
Provision for credit losses		93,540			5,000			6,950			129,340			21,132
Noninterest income		19,561			19,339			20,513			77,743			66,590
Noninterest expense		54,183			46,733			44,488			193,262			173,902
(Loss) income before income taxes		(72,127	)		22,556			27,152			(22,902	)		107,573
Income tax (benefit) expense		(19,586	)		4,080			6,441			(9,472	)		32,113
Net (loss) income		(52,541	)		18,476			20,711			(13,430	)		75,460
Preferred dividends		2,228			2,229			2,228			8,913			8,913
Net (loss) income available to common shareholders	$	(54,769	)	$	16,247		$	18,483		$	(22,343	)	$	66,547

Diluted (loss) earnings per common share	$	(2.52	)	$	0.74		$	0.84		$	(1.05	)	$	2.97
Weighted average common shares outstanding - diluted		21,753,711			21,678,242			21,822,328			21,737,958			22,124,402
(Loss) return on average assets	(2.72		)%		0.95	%		1.04	%	(0.17		)%		0.95	%
(Loss) return on average shareholders' equity	(25.91		)%		9.24	%		10.74	%	(1.69		)%		9.80	%
(Loss) return on average tangible common equity⁽¹⁾	(41.76		)%		12.69	%		15.41	%	(4.40		)%		13.89	%
Net interest margin		3.19	%		3.10	%		3.21	%		3.15	%		3.26	%
Efficiency ratio⁽¹⁾		71.42	%		62.76	%		55.22	%		64.31	%		55.91	%

Adjusted Earnings Performance Summary⁽¹⁾
Adjusted (loss) earnings available to common shareholders	$	(54,735	)	$	16,223		$	19,793		$	(22,344	)	$	76,576
Adjusted diluted (loss) earnings per common share	$	(2.52	)	$	0.74		$	0.89		$	(1.05	)	$	3.42
Adjusted (loss) return on average assets	(2.72		)%		0.95	%		1.11	%	(0.17		)%		1.08	%
Adjusted (loss) return on average shareholders' equity	(25.89		)%		9.23	%		11.42	%	(1.69		)%		11.10	%
Adjusted (loss) return on average tangible common equity	(41.74		)%		12.67	%		16.51	%	(4.40		)%		15.98	%
Adjusted pre-tax, pre-provision earnings	$	21,460		$	27,523		$	35,898		$	106,437		$	136,303
Adjusted pre-tax, pre-provision return on average assets		1.11	%		1.42	%		1.80	%		1.37	%		1.72	%

Market Data
Book value per share at period end	$	29.10		$	33.08		$	31.61
Tangible book value per share at period end⁽¹⁾	$	21.01		$	24.90		$	23.35
Tangible book value per share excluding accumulated other comprehensive income at period end⁽¹⁾	$	24.82		$	27.74		$	26.91
Market price at period end	$	24.40		$	22.38		$	27.56
Common shares outstanding at period end		21,494,485			21,393,905			21,551,402

Capital
Total capital to risk-weighted assets		13.38	%		13.98	%		13.20	%
Tier 1 capital to risk-weighted assets		11.11	%		11.65	%		10.91	%
Common equity tier 1capital to risk-weighted assets		8.37	%		9.00	%		8.40	%
Tier 1 leverage ratio		9.36	%		10.10	%		9.71	%
Tangible common equity to tangible assets⁽¹⁾		6.14	%		7.03	%		6.55	%

Wealth Management
Trust assets under administration	$	4,153,080		$	4,268,539		$	3,733,355

(1) Non-GAAP financial measures. Refer to pages 15 - 17 for a reconciliation to the comparable GAAP financial measures.

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

	As of
	December 31,			September 30,			June 30,			March 31,			December 31,
(in thousands)		2024			2024			2024			2024			2023
Assets
Cash and cash equivalents	$	114,766		$	121,873		$	124,646		$	167,316		$	135,061
Investment securities		1,212,366			1,216,795			1,099,654			1,044,900			920,396
Loans		5,167,574			5,748,819			5,851,994			5,958,462			6,131,079
Allowance for credit losses on loans		(75,414	)		(85,804	)		(92,183	)		(78,057	)		(68,502	)
Total loans, net		5,092,160			5,663,015			5,759,811			5,880,405			6,062,577
Loans held for sale		346,565			8,001			5,555			5,043			3,811
Premises and equipment, net		85,710			84,672			83,040			81,831			82,814
Other real estate owned		6,413			8,646			8,304			8,920			9,112
Loan servicing rights, at lower of cost or fair value		17,842			18,400			18,902			19,577			20,253
Goodwill		161,904			161,904			161,904			161,904			161,904
Other intangible assets, net		12,100			13,052			14,003			15,019			16,108
Company-owned life insurance		211,168			209,193			207,211			205,286			203,485
Other assets		268,061			245,932			274,244			241,608			251,347
Total assets	$	7,529,055		$	7,751,483		$	7,757,274		$	7,831,809		$	7,866,868

Liabilities and Shareholders' Equity
Noninterest-bearing demand deposits	$	1,055,564		$	1,050,617		$	1,108,521		$	1,212,382		$	1,145,395
Interest-bearing deposits		5,141,679			5,206,219			5,009,502			5,111,602			5,164,134
Total deposits		6,197,243			6,256,836			6,118,023			6,323,984			6,309,529
Short-term borrowings		87,499			13,849			7,208			214,446			34,865
FHLB advances and other borrowings		258,000			425,000			600,000			255,000			476,000
Subordinated debt		77,749			82,744			91,656			93,617			93,546
Trust preferred debentures		51,205			51,058			50,921			50,790			50,616
Other liabilities		121,246			103,737			103,694			102,966			110,459
Total liabilities		6,792,942			6,933,224			6,971,502			7,040,803			7,075,015
Total shareholders' equity		736,113			818,259			785,772			791,006			791,853
Total liabilities and shareholders' equity	$	7,529,055		$	7,751,483		$	7,757,274		$	7,831,809		$	7,866,868

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

	For the Three Months Ended									For the Years Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
(in thousands, except per share data)		2024			2024			2023			2024			2023
Net interest income:
Interest income	$	101,935		$	104,834		$	104,681		$	411,739		$	404,296
Interest expense		45,900			49,884			46,604			189,782			168,279
Net interest income		56,035			54,950			58,077			221,957			236,017
Provision for credit losses on loans		92,270			5,000			6,950			128,270			21,132
Provision for credit losses on unfunded commitments		1,270			—			—			1,070			—
Total provision for credit losses		93,540			5,000			6,950			129,340			21,132
Net interest income after provision for credit losses		(37,505	)		49,950			51,127			92,617			214,885
Noninterest income:
Wealth management revenue		7,660			7,104			6,604			28,697			25,572
Service charges on deposit accounts		3,506			3,411			3,246			13,154			11,990
Interchange revenue		3,528			3,506			3,585			13,955			14,302
Residential mortgage banking revenue		637			697			451			2,418			1,903
Income on company-owned life insurance		1,975			1,982			1,753			7,683			4,439
Loss on sales of investment securities, net		(34	)		(44	)		(2,894	)		(230	)		(9,372	)
Other income		2,289			2,683			7,768			12,066			17,756
Total noninterest income		19,561			19,339			20,513			77,743			66,590
Noninterest expense:
Salaries and employee benefits		22,283			24,382			24,031			93,639			93,438
Occupancy and equipment		4,286			4,393			3,934			16,785			15,986
Data processing		7,278			6,955			6,963			28,160			26,286
Professional services		1,580			1,744			2,072			7,822			7,049
Amortization of intangible assets		952			951			1,130			4,008			4,758
Impairment on leased assets and surrendered assets		7,601			—			—			7,601			—
FDIC insurance		1,383			1,402			1,147			5,278			4,779
Other expense		8,820			6,906			5,211			29,969			21,606
Total noninterest expense		54,183			46,733			44,488			193,262			173,902
(Loss) income before income taxes		(72,127	)		22,556			27,152			(22,902	)		107,573
Income tax (benefit) expense		(19,586	)		4,080			6,441			(9,472	)		32,113
Net (loss) income		(52,541	)		18,476			20,711			(13,430	)		75,460
Preferred stock dividends		2,228			2,229			2,228			8,913			8,913
Net (loss) income available to common shareholders	$	(54,769	)	$	16,247		$	18,483		$	(22,343	)	$	66,547

Basic (loss) earnings per common share	$	(2.52	)	$	0.74		$	0.84		$	(1.05	)	$	2.97
Diluted (loss) earnings per common share	$	(2.52	)	$	0.74		$	0.84		$	(1.05	)	$	2.97

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

Adjusted Earnings Reconciliation

	For the Three Months Ended									For the Years Ended
(dollars in thousands, except per share data)	December 31, 2024			September 30, 2024			December 31, 2023			December 31, 2024			December 31, 2023
(Loss) income before income tax (benefit) expense - GAAP	$	(72,127	)	$	22,556		$	27,152		$	(22,902	)	$	107,573
Adjustments to noninterest income:
Loss on sales of investment securities, net		34			44			2,894			230			9,372
(Gain) on sale of Visa B shares		—			—			(1,098	)		—			(1,098	)
Loss (gain) on repurchase of subordinated debt		13			(77	)		—			(231	)		(676	)
Total adjustments to noninterest income		47			(33	)		1,796			(1	)		7,598
Adjusted (loss) earnings pre tax - non-GAAP		(72,080	)		22,523			28,948			(22,903	)		115,171
Adjusted (loss) earnings tax (benefit) expense		(19,573	)		4,071			6,927			(9,472	)		29,682
Adjusted (loss) earnings - non-GAAP		(52,507	)		18,452			22,021			(13,431	)		85,489
Preferred stock dividends		2,228			2,229			2,228			8,913			8,913
Adjusted (loss) earnings available to common shareholders	$	(54,735	)	$	16,223		$	19,793		$	(22,344	)	$	76,576
Adjusted diluted (loss) earnings per common share	$	(2.52	)	$	0.74		$	0.89		$	(1.05	)	$	3.42
Adjusted (loss) return on average assets	(2.72		)%		0.95	%		1.11	%	(0.17		)%		1.08	%
Adjusted (loss) return on average shareholders' equity	(25.89		)%		9.23	%		11.42	%	(1.69		)%		11.10	%
Adjusted (loss) return on average tangible common equity	(41.74		)%		12.67	%		16.51	%	(4.40		)%		15.98	%


Adjusted Pre-Tax, Pre-Provision Earnings Reconciliation

	For the Three Months Ended									For the Years Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
(dollars in thousands)		2024			2024			2023			2024			2023
Adjusted (loss) earnings pre tax - non-GAAP	$	(72,080	)	$	22,523		$	28,948		$	(22,903	)	$	115,171
Provision for credit losses		93,540			5,000			6,950			129,340			21,132
Adjusted pre-tax, pre-provision earnings - non-GAAP	$	21,460		$	27,523		$	35,898		$	106,437		$	136,303
Adjusted pre-tax, pre-provision return on average assets		1.11	%		1.42	%		1.80	%		1.37	%		1.72	%

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

Efficiency Ratio Reconciliation

	For the Three Months Ended									For the Years Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
(dollars in thousands)		2024			2024			2023			2024			2023
Noninterest expense - GAAP	$	54,183		$	46,733		$	44,488		$	193,262		$	173,902

Net interest income - GAAP	$	56,035		$	54,950		$	58,077		$	221,957		$	236,017
Effect of tax-exempt income		221			205			183			810			828
Adjusted net interest income		56,256			55,155			58,260			222,767			236,845

Noninterest income - GAAP		19,561			19,339			20,513			77,743			66,590
Loss on sales of investment securities, net		34			44			2,894			230			9,372
(Gain) on sale of Visa B shares		—			—			(1,098	)		—			(1,098	)
Loss (gain) on repurchase of subordinated debt		13			(77	)		—			(231	)		(676	)
Adjusted noninterest income		19,608			19,306			22,309			77,742			74,188

Adjusted total revenue	$	75,864		$	74,461		$	80,569		$	300,509		$	311,033

Efficiency ratio		71.42	%		62.76	%		55.22	%		64.31	%		55.91	%

Return on Average Tangible Common Equity

	For the Three Months Ended									For the Years Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
(dollars in thousands)		2024			2024			2023			2024			2023
Net (loss) income available to common shareholders	$	(54,769	)	$	16,247		$	18,483		$	(22,343	)	$	66,547

Average total shareholders' equity—GAAP	$	806,707		$	795,322		$	764,790		$	793,984		$	770,095
Adjustments:
Preferred Stock		(110,548	)		(110,548	)		(110,548	)		(110,548	)		(110,548	)
Goodwill		(161,904	)		(161,904	)		(161,904	)		(161,904	)		(161,904	)
Other intangible assets, net		(12,551	)		(13,506	)		(16,644	)		(14,011	)		(18,376	)
Average tangible common equity	$	521,704		$	509,364		$	475,694		$	507,521		$	479,267
(Loss) return on average tangible common equity	(41.76) %				12.69	%		15.41	%	(4.40) %				13.89	%

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

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

	As of
(dollars in thousands, except per share data)	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023
Shareholders' Equity to Tangible Common Equity
Total shareholders' equity—GAAP	$	736,113		$	818,259		$	785,772		$	791,006		$	791,853
Adjustments:
Preferred Stock		(110,548	)		(110,548	)		(110,548	)		(110,548	)		(110,548	)
Goodwill		(161,904	)		(161,904	)		(161,904	)		(161,904	)		(161,904	)
Other intangible assets, net		(12,100	)		(13,052	)		(14,003	)		(15,019	)		(16,108	)
Tangible common equity		451,561			532,755			499,317			503,535			503,293

Less: Accumulated other comprehensive loss (AOCI)		(81,960	)		(60,640	)		(82,581	)		(81,419	)		(76,753	)
Tangible common equity excluding AOCI	$	533,521		$	593,395		$	581,898		$	584,954		$	580,046

Total Assets to Tangible Assets:
Total assets—GAAP	$	7,529,055		$	7,751,483		$	7,757,274		$	7,831,809		$	7,866,868
Adjustments:
Goodwill		(161,904	)		(161,904	)		(161,904	)		(161,904	)		(161,904	)
Other intangible assets, net		(12,100	)		(13,052	)		(14,003	)		(15,019	)		(16,108	)
Tangible assets	$	7,355,051		$	7,576,527		$	7,581,367		$	7,654,886		$	7,688,856

Common Shares Outstanding		21,494,485			21,393,905			21,377,215			21,485,231			21,551,402

Tangible Common Equity to Tangible Assets		6.14	%		7.03	%		6.59	%		6.58	%		6.55	%
Tangible Book Value Per Share	$	21.01		$	24.90		$	23.36		$	23.44		$	23.35
Tangible Book Value Per Share, excluding AOCI	$	24.82		$	27.74		$	27.22		$	27.23		$	26.91

Midland States Bancorp, Inc. Announces 2024 Fourth Quarter Results