EX-99.1 2 msbi-20230630exx991.htm EX-99.1 Document


EXHIBIT 99.1

Midland States Bancorp, Inc. Announces 2023 Second Quarter Results

Second Quarter 2023 Highlights:
•Net income available to common shareholders of $19.3 million, or $0.86 per diluted share
•Efficiency ratio improved to 55.0% from prior quarter
•Total loan growth of $13.1 million, or 0.8% annualized
•Total deposit growth of $1.3 million or 0.1% annualized
•Common equity tier 1 capital ratio improved to 8.03%
•Tangible book value per share of $22.24, an increase of 1.7% from prior quarter
Effingham, IL, July 27, 2023 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (Nasdaq: MSBI) (the “Company”) today reported net income available to common shareholders of $19.3 million, or $0.86 per diluted share, for the second quarter of 2023, compared to $19.5 million, or $0.86 per diluted share, for the first quarter of 2023. This also compares to net income available to common shareholders of $21.9 million, or $0.97 per diluted share, for the second quarter of 2022.
Jeffrey G. Ludwig, President and Chief Executive Officer of the Company, said, “We executed well in the second quarter and continued to deliver strong financial performance while prioritizing prudent risk management given the challenging operating environment, which resulted in an 8% increase in our pre-tax, pre-provision income compared to the prior quarter. Due to our strong financial performance and prudent balance sheet management, we saw an increase in our capital ratios and tangible book value per share, while also taking advantage of the opportunity to repurchase our common stock at below tangible book value and redeeming some of our higher cost subordinated debt.
“We continue to have success in developing full banking relationships with high quality businesses, which resulted in continued growth in our commercial loan portfolio. As planned, we are funding the new commercial loans and additional securities purchases with the runoff in our GreenSky portfolio, which is contributing to our strong financial performance and increase in capital ratios.
“While economic conditions remain uncertain, we will continue to prioritize prudent risk management and be conservative in our new loan production to build capital and liquidity. We continue to see good opportunities to add core deposit relationships in our markets with both retail and commercial customers, and during the second half of the year, we expect to begin seeing a contribution to deposit gathering from our Banking-as-a-Service initiative, which we believe will further strengthen our deposit base, support profitable growth in the future, and create additional franchise value,” said Mr. Ludwig.
Balance Sheet Highlights
Total assets were $8.03 billion at June 30, 2023, compared to $7.93 billion at March 31, 2023, and $7.44 billion at June 30, 2022. At June 30, 2023, portfolio loans were $6.37 billion, compared to $6.35 billion as of March 31, 2023, and $5.80 billion as of June 30, 2022.
1


Loans

During the second quarter of 2023, outstanding loans increased at a slower rate as the Company originated loans in a more selective and deliberate approach to balance liquidity and funding costs. Commercial loan and lease balances and construction and land development loans increased $18.0 million and $39.8 million, respectively, offsetting the decline in consumer loan balances due to a decrease in loans originated through GreenSky.


As of
June 30,March 31,December 31,September 30,June 30,
(in thousands)20232023202220222022
Loan Portfolio
Commercial loans$962,756 $937,920 $872,794 $907,651 $821,119 
Equipment finance loans614,633 632,205 616,751 577,323 546,267 
Equipment finance leases500,485 510,029 491,744 457,611 439,202 
Commercial FHA warehouse lines30,522 10,275 25,029 51,309 23,872 
Total commercial loans and leases2,108,396 2,090,429 2,006,318 1,993,894 1,830,460 
Commercial real estate2,443,995 2,448,158 2,433,159 2,466,303 2,335,655 
Construction and land development366,631 326,836 320,882 225,549 203,955 
Residential real estate371,486 369,910 366,094 356,225 340,103 
Consumer1,076,836 1,118,938 1,180,014 1,156,480 1,085,371 
Total loans$6,367,344 $6,354,271 $6,306,467 $6,198,451 $5,795,544 
Loan Quality
Credit quality metrics declined during the second quarter of 2023. Loans 30-89 days past due totaled $44.2 million as of June 30, 2023, compared to $30.9 million as of March 31, 2023, and $16.2 million as of June 30, 2022. The increase in delinquencies during the most recent quarter was due to a single commercial loan, which has since been brought current, and an increase in delinquencies in equipment finance loans and leases.
Non-performing loans were $54.8 million at June 30, 2023, compared to $50.7 million as of March 31, 2023, and $56.9 million as of June 30, 2022. The increase at June 30, 2023 was related to one commercial real estate loan moving to non-performing at the end of the quarter. Non-performing loans as a percentage of portfolio loans was 0.86% at June 30, 2023, compared with 0.80% at March 31, 2023, and 0.98% at June 30, 2022.
Non-performing assets were 0.72% of total assets at the end of the second quarter of 2023, compared to 0.74% at March 31, 2023 and 0.93% at June 30, 2022. Two other real estate owned (“OREO”) properties were sold during the second quarter of 2023 at a gain of $0.8 million resulting in the decrease in non-performing assets.
2

As of and for the Three Months Ended
(in thousands)June 30,March 31,December 31,September 30,June 30,
20232023202220222022
Asset Quality
Loans 30-89 days past due$44,161 $30,895 $32,372 $28,275 $16,212 
Nonperforming loans54,844 50,713 49,423 46,882 56,883 
Nonperforming assets57,688 58,806 57,824 59,524 69,344 
Substandard loans130,707 99,819 101,044 98,517 114,820 
Net charge-offs2,996 2,119 538 3,233 2,781 
Loans 30-89 days past due to total loans0.69 %0.49 %0.51 %0.46 %0.28 %
Nonperforming loans to total loans0.86 %0.80 %0.78 %0.76 %0.98 %
Nonperforming assets to total assets0.72 %0.74 %0.74 %0.76 %0.93 %
Allowance for credit losses to total loans1.02 %0.98 %0.97 %0.95 %0.95 %
Allowance for credit losses to nonperforming loans118.43 %122.39 %123.53 %125.08 %96.51 %
Net charge-offs to average loans0.19 %0.14 %0.03 %0.21 %0.20 %
The Company’s allowance for credit losses totaled $65.0 million at June 30, 2023, compared to $62.1 million at March 31, 2023, and $54.9 million at June 30, 2022. The allowance as a percentage of portfolio loans was 1.02% at June 30, 2023, compared to 0.98% at March 31, 2023, and 0.95% at June 30, 2022.
Deposits
Total deposits were $6.43 billion at both June 30, 2023 and March 31, 2023, compared with $6.18 billion at June 30, 2022. The deposit mix continues to shift from noninterest-bearing deposits to interest-bearing deposits due to the continued rate increases announced by the Federal Reserve. Interest rate promotions offered during the second quarter of 2023 on time deposit products contributed to an increase in balances of $73.9 million at June 30, 2023, compared to March 31, 2023.
As of
June 30,March 31,December 31,September 30,June 30,
(in thousands)20232023202220222022
Deposit Portfolio
Noninterest-bearing demand$1,162,909 $1,215,758 $1,362,158 $1,362,481 $1,403,386 
Interest-bearing:
Checking2,499,693 2,502,827 2,494,073 2,568,195 2,377,760 
Money market1,226,470 1,263,813 1,184,101 1,125,333 1,027,547 
Savings624,005 636,832 661,932 704,245 740,364 
Time840,734 766,884 649,552 620,960 620,363 
Brokered time72,737 39,087 12,836 14,038 15,018 
Total deposits$6,426,548 $6,425,201 $6,364,652 $6,395,252 $6,184,438 
The Company estimates that uninsured deposits(1) totaled $1.21 billion, or 19% of total deposits, at June 30, 2023 compared to $1.32 billion, or 21%, at March 31, 2023.
(1)    Uninsured deposits include the Call Report estimate of uninsured deposits less affiliate deposits, estimated insured portion of servicing deposits, additional structured FDIC coverage and collateralized deposits.
3

Results of Operations Highlights
Net Interest Income and Margin
During the second quarter of 2023, net interest income, on a tax-equivalent basis, totaled $59.0 million, a decrease of $1.7 million, or 2.8%, compared to $60.7 million for the first quarter of 2023. The tax-equivalent net interest margin for the second quarter of 2023 was 3.23%, compared with 3.39% in the first quarter of 2023. Net interest income and related margin, on a tax-equivalent basis, was $61.7 million and 3.65%, respectively, in the second quarter of 2022. The decline in the net interest income and margin was largely attributable to increased market interest rates resulting in the cost of funding liabilities increasing at a faster rate than the yields on earning assets.
Average interest-earning assets for the second quarter of 2023 were $7.33 billion, compared to $7.26 billion for the first quarter of 2023. The yield increased 16 basis points to 5.51% compared to the first quarter of 2023. Interest-earning assets averaged $6.77 billion for the second quarter of 2022.
Average loans were $6.36 billion for the second quarter of 2023, compared to $6.32 billion for the first quarter of 2023 and $5.68 billion for the second quarter of 2022. The yield on loans was 5.80% and 5.65% for the second and first quarters of 2023, respectively.
4

For the Three Months Ended
June 30,March 31,June 30,
(dollars in thousands)202320232022
Interest-earning assetsAverage BalanceInterest & FeesYield/RateAverage BalanceInterest & FeesYield/RateAverage BalanceInterest & FeesYield/Rate
Cash and cash equivalents$67,377 $852 5.07 %$85,123 $980 4.67 %$226,517 $468 0.83 %
Investment securities861,409 7,286 3.39 %809,848 5,995 3.00 %818,927 4,931 2.41 %
Loans6,356,012 91,890 5.80 %6,320,402 87,997 5.65 %5,677,791 63,594 4.49 %
Loans held for sale4,067 59 5.79 %1,506 16 4.41 %9,865 77 3.15 %
Nonmarketable equity securities45,028 599 5.33 %47,819 795 6.75 %36,338 487 5.38 %
Total interest-earning assets$7,333,893 $100,686 5.51 %$7,264,698 $95,783 5.35 %$6,769,438 $69,557 4.12 %
Noninterest-earning assets612,238 610,811 615,348 
Total assets$7,946,131 $7,875,509 $7,384,786 
Interest-Bearing Liabilities
Interest-bearing deposits$5,259,188 $33,617 2.56 %$5,053,941 $26,405 2.12 %$4,718,759 $3,810 0.32 %
Short-term borrowings22,018 14 0.26 %38,655 25 0.26 %59,301 22 0.15 %
FHLB advances & other borrowings471,989 5,396 4.59 %540,278 6,006 4.51 %307,611 1,435 1.87 %
Subordinated debt97,278 1,335 5.51 %99,812 1,370 5.57 %139,232 2,011 5.78 %
Trust preferred debentures50,218 1,289 10.29 %50,047 1,229 9.96 %49,602 624 5.05 %
Total interest-bearing liabilities$5,900,691 $41,651 2.83 %$5,782,733 $35,035 2.46 %$5,274,505 $7,902 0.60 %
Noninterest-bearing deposits1,187,584 1,250,899 1,401,268 
Other noninterest-bearing liabilities81,065 74,691 66,009 
Shareholders’ equity776,791 767,186 643,004 
Total liabilities and shareholder’s equity$7,946,131 $7,875,509 $7,384,786 
Net Interest Margin$59,035 3.23 %$60,748 3.39 %$61,655 3.65 %
Cost of Deposits2.09 %1.70 %0.25 %
(1)Interest income and average rates for tax-exempt loans and securities are presented on a tax-equivalent basis, assuming a federal income tax rate of 21%. Tax-equivalent adjustments totaled $0.2 million, $0.2 million and $0.3 million for the three months ended June 30, 2023, March 31, 2023 and 2022, respectively.
Investment securities averaged $861.4 million for the second quarter of 2023, compared to $809.8 million for the first quarter of 2023. The Company purchased additional investments and repositioned out of lower-yielding securities in favor of higher-yielding instruments resulting in increased average balances of $51.6 million and a higher yield. These changes are expected to improve overall margin, liquidity, and capital allocations. The Company incurred net losses on sales of $0.9 million in the second quarter of 2023. Investment securities averaged $818.9 million for the second quarter of 2022.
Average interest-bearing deposits were $5.26 billion for the second quarter of 2023, compared to $5.05 billion for the first quarter of 2023, and $4.72 billion for the second quarter of 2022. Cost of interest-bearing deposits was 2.56% in the second quarter of 2023, which represents a 44 basis point increase from the first quarter of 2023. A competitive market driven by rising interest rates was a contributing factor to the increase in deposit costs.
The Company redeemed $6.6 million of subordinated debt during the second quarter of 2023. The debentures were redeemed at a discount, resulting in a gain of $0.7 million.
During the six months ended June 30, 2023, net interest income, on a tax-equivalent basis, increased to $119.8 million, with a tax-equivalent net interest margin of 3.31%, compared to net interest income, on a
5

tax-equivalent basis, of $118.9 million, and a tax-equivalent net interest margin of 3.58% for the six months ended June 30, 2022.
For the Six Months Ended
June 30,June 30,
(dollars in thousands)20232022
Interest-earning assetsAverage BalanceInterest & FeesYield/RateAverage BalanceInterest & FeesYield/Rate
Cash and cash equivalents$76,201 $1,832 4.85 %$304,938 $639 0.42 %
Investment securities835,771 13,281 3.18 %856,571 9,894 2.31 %
Loans6,338,305 179,887 5.72 %5,477,037 120,873 4.45 %
Loans held for sale2,794 75 5.42 %20,501 297 2.93 %
Nonmarketable equity securities46,416 1,394 6.05 %36,358 971 5.39 %
Total interest-earning assets$7,299,487 $196,469 5.43 %$6,695,405 $132,674 4.00 %
Noninterest-earning assets611,528 623,224 
Total assets$7,911,015 $7,318,629 
Interest-Bearing Liabilities
Interest-bearing deposits$5,157,148 $60,022 2.35 %$4,613,751 $5,971 0.26 %
Short-term borrowings30,291 39 0.26 %64,642 45 0.14 %
FHLB advances & other borrowings505,945 11,402 4.54 %309,436 2,647 1.72 %
Subordinated debt98,538 2,705 5.54 %139,186 4,022 5.78 %
Trust preferred debentures50,133 2,518 10.13 %49,527 1,138 4.64 %
Total interest-bearing liabilities$5,842,055 $76,686 2.65 %$5,176,542 $13,823 0.54 %
Noninterest-bearing deposits1,219,050 1,418,083 
Other noninterest-bearing liabilities77,895 73,878 
Shareholders’ equity772,015 650,126 
Total liabilities and shareholder’s equity$7,911,015 $7,318,629 
Net Interest Margin$119,783 3.31 %$118,851 3.58 %
Cost of Deposits1.90 %0.20 %
(1)Interest income and average rates for tax-exempt loans and securities are presented on a tax-equivalent basis, assuming a federal income tax rate of 21%. Tax-equivalent adjustments totaled $0.4 million and $0.7 million for the six months ended June 30, 2023 and 2022, respectively.
The yield on earning assets increased 143 basis points to 5.43% for the six months ended June 30, 2023 compared to the same period one year prior. However, the cost of interest bearing liabilities increased at a faster rate during this period, increasing 211 basis points to 2.65% for the six months ended June 30, 2023.
Noninterest Income
Noninterest income was $18.8 million for the second quarter of 2023, compared to $15.8 million for the first quarter of 2023. Noninterest income for the second quarter of 2023 included an $0.8 million gain on the sale of OREO and a $0.7 million gain on the repurchase of subordinated debt, partially offset by $0.9 million of losses on the sale of investment securities. The first quarter of 2023 was negatively impacted by $0.6 million of losses on the sale of investment securities. Excluding these transactions, noninterest income for the second quarter of 2023 and the first quarter of 2023 was $18.2 million and $16.4 million, respectively. Noninterest income for the second quarter of 2022 was $14.6 million and included $0.9 million impairment charge on commercial servicing rights and a $0.1 million loss on the sale of
6

investment securities. Excluding these transactions, noninterest income for the second quarter of 2022 was $15.6 million.
For the Three Months EndedFor the Six Months Ended
June 30,March 31,June 30,June 30,June 30,
(in thousands)20232023202220232022
Noninterest income
Wealth management revenue$6,269 $6,411 $6,143 $12,680 $13,282 
Residential mortgage banking revenue540 405 384 945 983 
Service charges on deposit accounts2,677 2,568 2,304 5,245 4,372 
Interchange revenue3,696 3,412 3,590 7,108 6,870 
Loss on sales of investment securities, net(869)(648)(101)(1,517)(101)
Gain on repurchase of subordinated debt, net676 — — 676 — 
Gain (loss) on sales of other real estate owned, net819 — (162)819 (121)
Impairment on commercial mortgage servicing rights— — (869)— (1,263)
Company-owned life insurance891 876 840 1,767 1,859 
Other income4,054 2,755 2,484 6,809 4,345 
Total noninterest income$18,753 $15,779 $14,613 $34,532 $30,226 
Noninterest Expense
Noninterest expense was $42.9 million in the second quarter of 2023, compared to $44.5 million in the first quarter of 2023, and $41.3 million in the second quarter of 2022. The efficiency ratio was 55.01% for the quarter ended June 30, 2023, compared to 57.64% for the quarter ended March 31, 2023, and 53.10% for the quarter ended June 30, 2022.
For the Three Months EndedFor the Six Months Ended
June 30,March 31,June 30,June 30,June 30,
(in thousands)20232023202220232022
Noninterest expense
Salaries and employee benefits$22,857 $24,243 $22,645 $47,100 $44,515 
Occupancy and equipment3,879 4,443 3,489 8,322 7,244 
Data processing6,544 6,311 6,082 12,855 11,955 
Professional1,663 1,760 1,516 3,423 3,488 
Amortization of intangible assets1,208 1,291 1,318 2,499 2,716 
FDIC insurance1,196 1,329 826 2,525 1,656 
Other expense5,547 5,105 5,463 10,652 10,649 
Total noninterest expense$42,894 $44,482 $41,339 $87,376 $82,223 
Noteworthy components of noninterest expense are as follows:
•Salaries and employee benefits expenses were $22.9 million in the second quarter of 2023, compared to $24.2 million in the first quarter of 2023, and $22.6 million in the second quarter of 2022. Employees numbered 915 at June 30, 2023, compared to 931 at March 31, 2023, and 932 at June 30, 2022. Annual salary increases, effective in the second quarter of 2023, were offset by decreased commissions and incentive compensation expense.
7

•Occupancy and equipment expense decreased $0.6 million in the second quarter of 2023 compared to the first quarter of 2023, primarily due to elevated seasonal related expenses incurred in the first quarter, including snow removal and utilities expenses.
•Increases in FDIC insurance expense on a year to date basis is primarily related to the FDIC’s 2 basis point increase to the initial base deposit insurance assessment rate schedules effective January 1, 2023.
Income Tax Expense
Income tax expense was $7.2 million for the second quarter of 2023, as compared to $6.9 million for the first quarter of 2023 and $7.3 million for the second quarter of 2022. The resulting effective tax rates were 25.1%, 24.0% and 25.0% respectively.
Capital
At June 30, 2023, Midland States Bank and the Company exceeded all regulatory capital requirements under Basel III, and Midland States Bank met the qualifications to be a ‘‘well-capitalized’’ financial institution, as summarized in the following table:
As of June 30, 2023
Midland States BankMidland States Bancorp, Inc.
Minimum Regulatory Requirements (2)
Total capital to risk-weighted assets11.89%12.65%10.50%
Tier 1 capital to risk-weighted assets11.01%10.47%8.50%
Tier 1 leverage ratio10.07%9.57%4.00%
Common equity Tier 1 capital11.01%8.03%7.00%
Tangible common equity to tangible assets (1)
N/A6.19%N/A
(1) A non-GAAP financial measure. Refer to page 16 for a reconciliation to the comparable GAAP financial measure.
(2) Includes the capital conservation buffer of 2.5%.
The impact of rising interest rates on the Company’s investment portfolio and cash flow hedges has resulted in an $84.7 million accumulated other comprehensive loss at June 30, 2023, which impacts tangible book value by $3.87.
Stock Repurchase Program
As previously disclosed, 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. During the second quarter of 2023, the Company repurchased 308,543 shares of its common stock at a weighted average price of $19.78 under its stock repurchase program. As of June 30, 2023, the Company had $16.1 million remaining under the current stock repurchase authorization.

8

About Midland States Bancorp, Inc.
Midland States Bancorp, Inc. is a community-based financial holding company headquartered in Effingham, Illinois, and is the sole shareholder of Midland States Bank. As of June 30, 2023, the Company had total assets of approximately $8.03 billion, and its Wealth Management Group had assets under administration of approximately $3.59 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, 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, continuing effects of the recent failures of Silicon Valley Bank and Signature Bank, including anticipated effects on FDIC premiums, increased deposit volatility and potential regulatory developments; changes in the financial markets; changes in business plans as circumstances warrant; risks 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-
9

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
10

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited)
As of and for the Three Months Ended
As of and
for the Six Months Ended
June 30,March 31,June 30,June 30,June 30,
(dollars in thousands, except per share data)20232023202220232022
Earnings Summary
Net interest income$58,840 $60,504 $61,334 $119,344 $118,161 
Provision for credit losses5,879 3,135 5,441 9,014 9,608 
Noninterest income18,753 15,779 14,613 34,532 30,226 
Noninterest expense42,894 44,482 41,339 87,376 82,223 
Income before income taxes28,820 28,666 29,167 57,486 56,556 
Income taxes7,245 6,894 7,284 14,139 13,924 
Net income21,575 21,772 21,883 43,347 42,632 
Preferred dividends2,228 2,228 — 4,456 — 
Net income available to common shareholders$19,347 $19,544 $21,883 $38,891 $42,632 
Diluted earnings per common share$0.86 $0.86 $0.97 $1.72 $1.89 
Weighted average common shares outstanding - diluted22,205,079 22,501,970 22,360,819 22,348,981 22,355,936 
Return on average assets1.09 %1.12 %1.19 %1.10 %1.17 %
Return on average shareholders' equity11.14 %11.51 %13.65 %11.32 %13.22 %
Return on average tangible common equity (1)
15.99 %16.70 %19.14 %16.34 %18.48 %
Net interest margin3.23 %3.39 %3.65 %3.31 %3.58 %
Efficiency ratio (1)
55.01 %57.64 %53.10 %56.32 %54.38 %
Adjusted Earnings Performance Summary (1)
Adjusted earnings available to common shareholders$19,488 $20,017 $22,191 $39,505 $43,006 
Adjusted diluted earnings per common share$0.87 $0.88 $0.98 $1.75 $1.90 
Adjusted return on average assets1.10 %1.15 %1.21 %1.12 %1.18 %
Adjusted return on average shareholders' equity11.21 %11.76 %13.84 %11.48 %13.34 %
Adjusted return on average tangible common equity16.10 %17.11 %19.41 %16.60 %18.65 %
Adjusted pre-tax, pre-provision earnings$34,892 $32,449 $35,902 $67,341 $67,943 
Adjusted pre-tax, pre-provision return on average assets1.76 %1.67 %1.95 %1.72 %1.87 %
Market Data
Book value per share at period end$30.49 $30.08 $28.84 
Tangible book value per share at period end (1)
$22.24 $21.87 $20.43 
Tangible book value per share excluding accumulated other comprehensive income at period end (1)
$26.11 $25.39 $22.84 
Market price at period end$19.91 $21.42 $24.04 
Common shares outstanding at period end21,854,800 22,111,454 22,060,255 
Capital
Total capital to risk-weighted assets12.65 %12.46 %11.44 %
Tier 1 capital to risk-weighted assets10.47 %10.25 %8.63 %
Tier 1 common capital to risk-weighted assets8.03 %7.84 %7.66 %
Tier 1 leverage ratio9.57 %9.54 %7.98 %
Tangible common equity to tangible assets (1)
6.19 %6.24 %6.22 %
Wealth Management
Trust assets under administration$3,594,727 $3,502,635 $3,503,227 

(1) Non-GAAP financial measures. Refer to pages 14 - 16 for a reconciliation to the comparable GAAP financial measures.
11

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
As of
June 30,March 31,December 31,September 30,June 30,
(in thousands)20232023202220222022
Assets
Cash and cash equivalents$160,695 $138,310 $160,631 $313,188 $270,117 
Investment securities887,003 821,005 776,860 690,504 769,278 
Loans6,367,344 6,354,271 6,306,467 6,198,451 5,795,544 
Allowance for credit losses on loans(64,950)(62,067)(61,051)(58,639)(54,898)
Total loans, net6,302,394 6,292,204 6,245,416 6,139,812 5,740,646 
Loans held for sale5,632 2,747 1,286 4,338 5,298 
Premises and equipment, net81,006 80,582 78,293 77,519 77,668 
Other real estate owned202 6,729 6,729 11,141 11,131 
Loan servicing rights, at lower of cost or fair value21,611 1,117 1,205 1,297 25,879 
Commercial FHA mortgage loan servicing rights held for sale— 20,745 20,745 23,995 — 
Goodwill161,904 161,904 161,904 161,904 161,904 
Other intangible assets, net18,367 19,575 20,866 22,198 23,559 
Company-owned life insurance152,210 151,319 150,443 149,648 148,900 
Other assets243,697 233,937 231,123 226,333 201,432 
Total assets$8,034,721 $7,930,174 $7,855,501 $7,821,877 $7,435,812 
Liabilities and Shareholders' Equity
Noninterest-bearing demand deposits$1,162,909 $1,215,758 $1,362,158 $1,362,481 $1,403,386 
Interest-bearing deposits5,263,639 5,209,443 5,002,494 5,032,771 4,781,052 
Total deposits6,426,548 6,425,201 6,364,652 6,395,252 6,184,438 
Short-term borrowings21,783 31,173 42,311 58,518 67,689 
FHLB advances and other borrowings575,000 482,000 460,000 360,000 285,000 
Subordinated debt93,404 99,849 99,772 139,370 139,277 
Trust preferred debentures50,296 50,135 49,975 49,824 49,674 
Other liabilities90,869 66,173 80,217 79,634 73,546 
Total liabilities7,257,900 7,154,531 7,096,927 7,082,598 6,799,624 
Total shareholders’ equity776,821 775,643 758,574 739,279 636,188 
Total liabilities and shareholders’ equity$8,034,721 $7,930,174 $7,855,501 $7,821,877 $7,435,812 
12

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
For the Three Months EndedFor the Six Months Ended
June 30,March 31,June 30,June 30,June 30,
(in thousands, except per share data)20232023202220232022
Net interest income:
Interest income$100,491 $95,539 $69,236 $196,030 $131,984 
Interest expense41,651 35,035 7,902 76,686 13,823 
Net interest income58,840 60,504 61,334 119,344 118,161 
Provision for credit losses:
Provision for credit losses on loans5,879 3,135 4,741 9,014 8,873 
Provision for credit losses on unfunded commitments— — 700 — 956 
Provision for other credit losses— — — — (221)
Total provision for credit losses5,879 3,135 5,441 9,014 9,608 
Net interest income after provision for credit losses52,961 57,369 55,893 110,330 108,553 
Noninterest income:
Wealth management revenue6,269 6,411 6,143 12,680 13,282 
Residential mortgage banking revenue540 405 384 945 983 
Service charges on deposit accounts2,677 2,568 2,304 5,245 4,372 
Interchange revenue3,696 3,412 3,590 7,108 6,870 
Loss on sales of investment securities, net(869)(648)(101)(1,517)(101)
Gain on repurchase of subordinated debt, net676 — — 676 — 
Gain (loss) on sales of other real estate owned, net819 — (162)819 (121)
Impairment on commercial mortgage servicing rights— — (869)— (1,263)
Company-owned life insurance891 876 840 1,767 1,859 
Other income4,054 2,755 2,484 6,809 4,345 
Total noninterest income18,753 15,779 14,613 34,532 30,226 
Noninterest expense:
Salaries and employee benefits22,857 24,243 22,645 47,100 44,515 
Occupancy and equipment3,879 4,443 3,489 8,322 7,244 
Data processing6,544 6,311 6,082 12,855 11,955 
Professional1,663 1,760 1,516 3,423 3,488 
Amortization of intangible assets1,208 1,291 1,318 2,499 2,716 
FDIC insurance1,196 1,329 826 2,525 1,656 
Other expense5,547 5,105 5,463 10,652 10,649 
Total noninterest expense42,894 44,482 41,339 87,376 82,223 
Income before income taxes28,820 28,666 29,167 57,486 56,556 
Income taxes7,245 6,894 7,284 14,139 13,924 
Net income21,575 21,772 21,883 43,347 42,632 
Preferred stock dividends2,228 2,228 — 4,456 — 
Net income available to common shareholders$19,347 $19,544 $21,883 $38,891 $42,632 
Basic earnings per common share$0.86 $0.86 $0.97 $1.72 $1.89 
Diluted earnings per common share$0.86 $0.86 $0.97 $1.72 $1.89 
13

MIDLAND STATES BANCORP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited)
Adjusted Earnings Reconciliation
For the Three Months EndedFor the Six Months Ended
June 30,March 31,June 30,June 30,June 30,
(dollars in thousands, except per share data)20232023202220232022
Income before income taxes - GAAP$28,820 $28,666 $29,167 $57,486 $56,556 
Adjustments to noninterest income:
Loss on sales of investment securities, net869 648 101 1,517 101 
(Gain) on repurchase of subordinated debt(676)— — (676)— 
Total adjustments to noninterest income193 648 101 841 101 
Adjustments to noninterest expense:
Integration and acquisition expenses— — (324)— (415)
Total adjustments to noninterest expense— — (324)— (415)
Adjusted earnings pre tax - non-GAAP29,013 29,314 29,592 58,327 57,072 
Adjusted earnings tax7,297 7,069 7,401 14,366 14,066 
Adjusted earnings - non-GAAP21,716 22,245 22,191 43,961 43,006 
Preferred stock dividends2,228 2,228 — 4,456 — 
Adjusted earnings available to common shareholders$19,488 $20,017 $22,191 $39,505 $43,006 
Adjusted diluted earnings per common share$0.87 $0.88 $0.98 $1.75 $1.90 
Adjusted return on average assets1.10 %1.15 %1.21 %1.12 %1.18 %
Adjusted return on average shareholders' equity11.21 %11.76 %13.84 %11.48 %13.34 %
Adjusted return on average tangible common equity16.10 %17.11 %19.41 %16.60 %18.65 %
Adjusted Pre-Tax, Pre-Provision Earnings Reconciliation
For the Three Months EndedFor the Six Months Ended
June 30,March 31,June 30,June 30,June 30,
(dollars in thousands)20232023202220232022
Adjusted earnings pre tax - non-GAAP$29,013 $29,314 $29,592 $58,327 $57,072 
Provision for credit losses5,879 3,135 5,441 9,014 9,608 
Impairment on commercial mortgage servicing rights— — 869 — 1,263 
Adjusted pre-tax, pre-provision earnings - non-GAAP$34,892 $32,449 $35,902 $67,341 $67,943 
Adjusted pre-tax, pre-provision return on average assets1.76 %1.67 %1.95 %1.72 %1.87 %
14

MIDLAND STATES BANCORP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued)
Efficiency Ratio Reconciliation
For the Three Months EndedFor the Six Months Ended
June 30,March 31,June 30,June 30,June 30,
(dollars in thousands)20232023202220232022
Noninterest expense - GAAP$42,894 $44,482 $41,339 $87,376 $82,223 
Integration and acquisition expenses— — (324)— (415)
Adjusted noninterest expense$42,894 $44,482 $41,015 $87,376 $81,808 
Net interest income - GAAP$58,840 $60,504 $61,334 $119,344 $118,161 
Effect of tax-exempt income195 244 321 439 690 
Adjusted net interest income59,035 60,748 61,655 119,783 118,851 
Noninterest income - GAAP18,753 15,779 14,613 34,532 30,226 
Impairment on commercial mortgage servicing rights— — 869 — 1,263 
Loss on sales of investment securities, net869 648 101 1,517 101 
(Gain) on repurchase of subordinated debt(676)— — (676)— 
Adjusted noninterest income18,946 16,427 15,583 35,373 31,590 
Adjusted total revenue$77,980 $77,175 $77,238 $155,156 $150,441 
Efficiency ratio55.01 %57.64 %53.10 %56.32 %54.38 %
Return on Average Tangible Common Equity (ROATCE)
For the Three Months EndedFor the Six Months Ended
June 30,March 31,June 30,June 30,June 30,
(dollars in thousands)20232023202220232022
Net income available to common shareholders$19,347 $19,544 $21,883 $38,891 $42,632 
Average total shareholders' equity—GAAP$776,791 $767,186 $643,004 $772,015 $650,126 
Adjustments:
Preferred Stock(110,548)(110,548)— (110,548)— 
Goodwill(161,904)(161,904)(161,904)(161,904)(161,904)
Other intangible assets, net(18,937)(20,184)(22,570)(19,557)(23,101)
Average tangible common equity$485,402 $474,550 $458,530 $480,006 $465,121 
ROATCE15.99 %16.70 %19.14 %16.34 %18.48 %
15

MIDLAND STATES BANCORP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued)
Tangible Common Equity to Tangible Assets Ratio and Tangible Book Value Per Share
As of
June 30,March 31,December 31,September 30,June 30,
(dollars in thousands, except per share data)20232023202220222022
Shareholders' Equity to Tangible Common Equity
Total shareholders' equity—GAAP$776,821 $775,643 $758,574 $739,279 $636,188 
Adjustments:
Preferred Stock(110,548)(110,548)(110,548)(110,548)— 
Goodwill(161,904)(161,904)(161,904)(161,904)(161,904)
Other intangible assets, net(18,367)(19,575)(20,866)(22,198)(23,559)
Tangible common equity$486,002 $483,616 $465,256 $444,629 $450,725 
Less: Accumulated other comprehensive income (AOCI)(84,719)(77,797)(83,797)(78,383)(53,097)
Tangible common equity excluding AOCI570,721 561,413 549,053 523,012 503,822 
Total Assets to Tangible Assets:
Total assets—GAAP$8,034,721 $7,930,174 $7,855,501 $7,821,877 $7,435,812 
Adjustments:
Goodwill(161,904)(161,904)(161,904)(161,904)(161,904)
Other intangible assets, net(18,367)(19,575)(20,866)(22,198)(23,559)
Tangible assets$7,854,450 $7,748,695 $7,672,731 $7,637,775 $7,250,349 
Common Shares Outstanding21,854,800 22,111,454 22,214,913 22,074,740 22,060,255 
Tangible Common Equity to Tangible Assets6.19 %6.24 %6.06 %5.82 %6.22 %
Tangible Book Value Per Share$22.24 $21.87 $20.94 $20.14 $20.43 
Tangible Book Value Per Share excluding AOCI$26.11 $25.39 $24.72 $23.69 $22.84 
16