MSBI Midland States Bancorp Inc

Midland States Bancorp, Inc. (Nasdaq: MSBI) (the “Company”) today reported net income available to common shareholders of $11.7 million, or $0.53 per diluted share, for the first quarter of 2024, compared to $18.5 million, or $0.84 per diluted share, for the fourth quarter of 2023. This also compares to net income available to common shareholders of $19.5 million, or $0.86 per diluted share, for the first quarter of 2023.

Provision expense was $14.0 million in the first quarter of 2024 compared to $7.0 million and $3.1 million in the fourth and first quarters of 2023, respectively. The increase in provision expense was the result of a specific reserve of $8.0 million on a multi-family construction project.

Financial results for the fourth quarter of 2023 included a $1.1 million gain on the sale of shares of VISA B stock, offset by $2.9 million of losses on the sale of investment securities. Results for the first quarter of 2023 included $0.6 million of losses on the sale of investment securities. There were no adjustments to the financial results for the first quarter of 2024.

Excluding these transactions, adjusted earnings available to common shareholders were $19.8 million and $20.0 million, or $0.89 and $0.88 per diluted share, for the fourth and first quarters of 2023, respectively.

Jeffrey G. Ludwig, President and Chief Executive Officer of the Company, said, “Our first quarter reflects strong pre-tax, pre-provision results and our ongoing ability to deliver increased fee income and strong expense control. While our pre-tax pre-provision results generate solid profitability we did increase our reserves to reflect an increase in nonperforming loans. Our continued success in executing on our balance sheet management strategies resulted in the improvement in our loan-to-deposit ratio, tangible book value per share, and all of our capital ratios improved in the first quarter, even after the additional provision for credit losses.

“We continue to focus on high quality commercial relationships and our conservative approach to new loan production, including through the intentional runoff of equipment finance and consumer loans. We also continue to have success in growing our wealth management business, which contributed to the increase we had in non-interest income in the first quarter.

“As always, we continue to operate with a long-term perspective, and while we will maintain disciplined expense control, we will continue to invest in areas such as banking and wealth talent and technology that we believe will further strengthen our franchise and enhance our ability to continue creating long-term value for our shareholders,” said Mr. Ludwig.

Balance Sheet Highlights

Total assets were $7.83 billion at March 31, 2024, compared to $7.87 billion at December 31, 2023, and $7.93 billion at March 31, 2023. At March 31, 2024, portfolio loans were $5.96 billion, compared to $6.13 billion at December 31, 2023, and $6.35 billion at March 31, 2023.

Loans

During the first quarter of 2024, outstanding loans declined by $172.6 million, or 2.8%, from December 31, 2023, as the Company continued to originate loans in a more selective and deliberate approach to balance liquidity and funding costs. Increases in commercial FHA warehouse lines and construction and land development loans of $8.0 million and $21.5 million, respectively, were offset by decreases in all other loan categories. Equipment finance loan and lease balances decreased $54.5 million during the first quarter of 2024 as the Company continued to reduce its concentration of this product within the overall loan portfolio. Consumer loans decreased $98.1 million due to loan payoffs and a cessation in loans originated through GreenSky. Our Greensky-originated loan balances decreased $77.7 million during the first quarter to $606.0 million at March 31, 2024. In addition, as previously disclosed, during the fourth quarter of 2023, the Company ceased originating loans through LendingPoint. As of March 31, 2024, the Company had $112.7 million in loans that were originated through LendingPoint, which will continue to be serviced by LendingPoint.

	As of
	March 31,			December 31,			September 30,			June 30,			March 31,
(in thousands)	2024			2023			2023			2023			2023
Loan Portfolio
Commercial loans	$	913,564		$	951,387		$	943,761		$	962,756		$	937,920
Equipment finance loans		494,068			531,143			578,931			614,633			632,205
Equipment finance leases		455,879			473,350			485,460			500,485			510,029
Commercial FHA warehouse lines		8,035			—			48,547			30,522			10,275
Total commercial loans and leases		1,871,546			1,955,880			2,056,699			2,108,396			2,090,429
Commercial real estate		2,397,113			2,406,845			2,412,164			2,443,995			2,448,158
Construction and land development		474,128			452,593			416,801			366,631			326,836
Residential real estate		378,583			380,583			375,211			371,486			369,910
Consumer		837,092			935,178			1,020,008			1,076,836			1,118,938
Total loans	$	5,958,462		$	6,131,079		$	6,280,883		$	6,367,344		$	6,354,271

Loan Quality

Overall, credit quality metrics declined this quarter compared to the fourth quarter of 2023. Non-performing loans increased $48.6 million to $105.0 million at March 31, 2024, compared to $56.4 million as of December 31, 2023. Four loans totaling $47.4 million account for the increase. Of these, three loans totaling $40.8 million are multi-family construction or multi-family projects. Loans 30-89 days past due decreased $23.9 million to $58.9 million as of March 31, 2024, compared to prior quarter end, as loans totaling $25.1 million were transferred to nonperforming status.

At March 31, 2023, loans 30-89 days past due totaled $30.9 million, non-performing loans were $50.7 million, and non-performing assets as a percentage of total assets were 0.74%.

	As of and for the Three Months Ended
(in thousands)	March 31,				December 31,				September 30,				June 30,				March 31,
	2024				2023				2023				2023				2023
Asset Quality
Loans 30-89 days past due	$	58,854			$	82,778			$	46,608			$	44,161			$	30,895
Nonperforming loans		104,979				56,351				55,981				54,844				50,713
Nonperforming assets		116,721				67,701				58,677				57,688				58,806
Substandard loans		149,049				184,224				143,793				130,707				99,819
Net charge-offs		4,445				5,117				3,449				2,996				2,119
Loans 30-89 days past due to total loans		0.99	%			1.35	%			0.74	%			0.69	%			0.49	%
Nonperforming loans to total loans		1.76	%			0.92	%			0.89	%			0.86	%			0.80	%
Nonperforming assets to total assets		1.49	%			0.86	%			0.74	%			0.72	%			0.74	%
Allowance for credit losses to total loans		1.31	%			1.12	%			1.06	%			1.02	%			0.98	%
Allowance for credit losses to nonperforming loans		74.35	%			121.56	%			119.09	%			118.43	%			122.39	%
Net charge-offs to average loans		0.30	%			0.33	%			0.22	%			0.19	%			0.14	%

The Company continued to increase its allowance for credit losses on loans during the first quarter of 2024. Notably, the Company recorded a specific reserve of $8.0 million on one large construction and land development loan. The allowance totaled $78.1 million at March 31, 2024, compared to $68.5 million at December 31, 2023, and $62.1 million at March 31, 2023. The allowance as a percentage of portfolio loans was 1.31% at March 31, 2024, compared to 1.12% at December 31, 2023, and 0.98% at March 31, 2023.

Deposits

Total deposits were $6.32 billion at March 31, 2024, compared with $6.31 billion at December 31, 2023, representing an increase of $14.5 million, primarily due to increases in noninterest bearing demand deposits and brokered time deposits, which were partially offset by seasonal outflows of servicing and public fund deposits. Noninterest-bearing deposits increased $67.0 million to $1.21 billion at March 31, 2024, while interest-bearing deposits decreased $52.5 million to $5.11 billion at March 31, 2024. Brokered time deposits increased $93.7 million to offset seasonal outflows of the servicing and public fund deposits.

	As of
	March 31,			December 31,			September 30,			June 30,			March 31,
(in thousands)	2024			2023			2023			2023			2023
Deposit Portfolio
Noninterest-bearing demand	$	1,212,382		$	1,145,395		$	1,154,515		$	1,162,909		$	1,215,758
Interest-bearing:
Checking		2,394,163			2,511,840			2,572,224			2,499,693			2,502,827
Money market		1,128,463			1,135,629			1,090,962			1,226,470			1,263,813
Savings		555,552			559,267			582,359			624,005			636,832
Time		845,190			862,865			885,858			840,734			766,884
Brokered time		188,234			94,533			119,084			72,737			39,087
Total deposits	$	6,323,984		$	6,309,529		$	6,405,002		$	6,426,548		$	6,425,201

Results of Operations Highlights

Net Interest Income and Margin

During the first quarter of 2024, net interest income, on a tax-equivalent basis, totaled $56.1 million, a decrease of $2.1 million, or 3.6%, compared to $58.3 million for the fourth quarter of 2023. The tax-equivalent net interest margin for the first quarter of 2024 was 3.18%, compared with 3.21% in the fourth quarter of 2023. Net interest income and net interest margin, on a tax-equivalent basis, were $60.7 million and 3.39%, respectively, in the first quarter of 2023. The declines in the net interest income and margin were largely attributable to increased market interest rates resulting in the cost of funding liabilities increasing at a faster rate than the yield on earning assets, as well as the impact of interest reversals on loans placed on non-accrual.

Average interest-earning assets for the first quarter of 2024 were $7.11 billion, compared to $7.20 billion for the fourth quarter of 2023. The yield decreased 2 basis points to 5.76% compared to the fourth quarter of 2023. Interest-earning assets averaged $7.26 billion for the first quarter of 2023.

Average loans were $6.01 billion for the first quarter of 2024, compared to $6.20 billion for the fourth quarter of 2023 and $6.32 billion for the first quarter of 2023. The yield on loans was 5.99% and 6.00% for the first quarter of 2024 and the fourth quarter of 2023, respectively.

Investment securities averaged $988.7 million for the first quarter of 2024, and yielded 4.36%, compared to an average balance and yield of $883.2 million and 4.16%, respectively, for the fourth quarter of 2023. The Company purchased additional higher-yielding investments resulting in the increased average balance and yield. Investment securities averaged $809.8 million for the first quarter of 2023.

Average interest-bearing deposits were $5.20 billion for the first quarter of 2024, compared to $5.30 billion for the fourth quarter of 2023, and $5.05 billion for the first quarter of 2023. Cost of interest-bearing deposits was 3.04% in the first quarter of 2024, which represented an 11 basis point increase from the fourth quarter of 2023. A competitive market, driven by rising interest rates and increased competition, contributed to the increase in deposit costs.

	For the Three Months Ended
	March 31,									December 31,									March 31,
(dollars in thousands)	2024									2023									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	$	69,316		$	951		5.52	%		$	77,363		$	1,054		5.41	%		$	85,123		$	980		4.67	%
Investment securities		988,716			10,708		4.36				883,153			9,257		4.16				809,848			5,995		3.00
Loans		6,012,032			89,489		5.99				6,196,362			93,757		6.00				6,320,402			87,997		5.65
Loans held for sale		3,405			55		6.56				4,429			81		7.26				1,506			16		4.41
Nonmarketable equity securities		35,927			687		7.69				41,192			715		6.89				47,819			795		6.75
Total interest-earning assets	$	7,109,396		$	101,890		5.76	%		$	7,202,499		$	104,864		5.78	%		$	7,264,698		$	95,783		5.35	%
Noninterest-earning assets		671,671									695,293									610,811
Total assets	$	7,781,067								$	7,897,792								$	7,875,509
Interest-Bearing Liabilities
Interest-bearing deposits	$	5,195,118		$	39,214		3.04	%		$	5,295,296		$	39,156		2.93	%		$	5,053,941		$	26,405		2.12	%
Short-term borrowings		65,182			836		5.16				13,139			15		0.47				38,655			25		0.26
FHLB advances & other borrowings		313,121			3,036		3.90				430,207			4,750		4.38				540,278			6,006		4.51
Subordinated debt		93,583			1,280		5.50				93,512			1,281		5.43				99,812			1,370		5.57
Trust preferred debentures		50,707			1,389		11.02				50,541			1,402		11.00				50,047			1,229		9.96
Total interest-bearing liabilities	$	5,717,711		$	45,755		3.22	%		$	5,882,695		$	46,604		3.14	%		$	5,782,733		$	35,035		2.46	%
Noninterest-bearing deposits		1,151,542									1,142,062									1,250,899
Other noninterest-bearing liabilities		121,908									108,245									74,691
Shareholders’ equity		789,906									764,790									767,186
Total liabilities and shareholder’s equity	$	7,781,067								$	7,897,792								$	7,875,509
Net Interest Margin				$	56,135		3.18	%					$	58,260		3.21	%					$	60,748		3.39	%
Cost of Deposits							2.49	%								2.41	%								1.70	%

(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 March 31, 2024, December 31, 2023 and March 31, 2023, respectively.

Noninterest Income

Noninterest income was $21.2 million for the first quarter of 2024, compared to $20.5 million for the fourth quarter of 2023. Noninterest income for the first quarter of 2024 included incremental servicing revenues of $3.7 million related to the Greensky portfolio. Noninterest income for the fourth quarter of 2023 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. The first quarter of 2023 included $0.6 million of losses on the sale of investment securities. Excluding these transactions, noninterest income for the first quarter of 2024, the fourth quarter of 2023, and the first quarter of 2023 was $17.5 million, $18.5 million, and $16.4 million, respectively.

	For the Three Months Ended
	March 31,			December 31,				March 31,
(in thousands)	2024			2023				2023
Noninterest income
Wealth management revenue	$	7,132		$	6,604			$	6,411
Service charges on deposit accounts		3,116			3,246				2,745
Interchange revenue		3,358			3,585				3,412
Residential mortgage banking revenue		527			451				405
Income on company-owned life insurance		1,801			1,753				876
Loss on sales of investment securities, net		—			(2,894	)			(648	)
Other income		5,253			7,768				2,578
Total noninterest income	$	21,187		$	20,513			$	15,779

Wealth management revenue totaled $7.1 million in the first quarter of 2024, an increase of $0.5 million, or 8.0%, as compared to the fourth quarter of 2023. Assets under administration increased to $3.89 billion at March 31, 2024 from $3.73 billion at December 31, 2023, primarily due to improved market performance, resulting in an increase in revenue. In addition, the first quarter fees included seasonal tax preparation fees. Assets under administration totaled $3.50 billion at March 31, 2023.

Noninterest Expense

Noninterest expense was $44.9 million in the first quarter of 2024, compared to $44.5 million in both the fourth quarter of 2023, and the first quarter of 2023. The efficiency ratio increased to 58.03% for the quarter ended March 31, 2024, compared to 55.22% for the quarter ended December 31, 2023, and 57.64% for the quarter ended March 31, 2023.

	For the Three Months Ended
	March 31,			December 31,			March 31,
(in thousands)	2024			2023			2023
Noninterest expense
Salaries and employee benefits	$	24,102		$	24,031		$	24,243
Occupancy and equipment		4,142			3,934			4,443
Data processing		6,722			6,963			6,311
Professional services		2,255			2,072			1,760
Amortization of intangible assets		1,089			1,130			1,291
FDIC insurance		1,274			1,147			1,329
Other expense		5,283			5,211			5,105
Total noninterest expense	$	44,867		$	44,488		$	44,482

Income Tax Expense

Income tax expense was $4.4 million for the first quarter of 2024, as compared to $6.4 million for the fourth quarter of 2023 and $6.9 million for the first quarter of 2023. The resulting effective tax rates were 23.9%, 23.7% and 24.0%, respectively.

Capital

At March 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 March 31, 2024
	Midland States Bank		Midland States Bancorp, Inc.		Minimum Regulatory Requirements(2)
Total capital to risk-weighted assets	12.77%		13.68%		10.50%
Tier 1 capital to risk-weighted assets	11.62%		11.16%		8.50%
Tier 1 leverage ratio	10.33%		9.92%		4.00%
Common equity Tier 1 capital	11.62%		8.60%		7.00%
Tangible common equity to tangible assets(1)	N/A		6.58%		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%.

The impact of rising interest rates on the Company’s investment portfolio and cash flow hedges resulted in an $81.4 million accumulated other comprehensive loss at March 31, 2024, which reduces tangible book value by $3.79 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 is authorized to repurchase up to $25.0 million of common stock through December 31, 2024. During the first quarter of 2024, the Company repurchased 73,781 shares of its common stock at a weighted average price of $26.31 under its stock repurchase program.

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 March 31, 2024, the Company had total assets of approximately $7.83 billion, and its Wealth Management Group had assets under administration of approximately $3.89 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, continuing effects of the failures of Silicon Valley Bank and Signature Bank, 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) 342-7321Eric T. Lemke, Chief Financial Officer, at elemke@midlandsb.com or (217) 342-7321Douglas J. Tucker, SVP and Corporate Counsel, at dtucker@midlandsb.com or (217) 342-7321

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited)
	As of and for the Three Months Ended
	March 31,				December 31,				March 31,
(dollars in thousands, except per share data)	2024				2023				2023
Earnings Summary
Net interest income	$	55,920			$	58,077			$	60,504
Provision for credit losses		14,000				6,950				3,135
Noninterest income		21,187				20,513				15,779
Noninterest expense		44,867				44,488				44,482
Income before income taxes		18,240				27,152				28,666
Income taxes		4,355				6,441				6,894
Net income		13,885				20,711				21,772
Preferred dividends		2,228				2,228				2,228
Net income available to common shareholders	$	11,657			$	18,483			$	19,544
Diluted earnings per common share	$	0.53			$	0.84			$	0.86
Weighted average common shares outstanding - diluted		21,787,691				21,822,328				22,501,970
Return on average assets		0.72	%			1.04	%			1.12	%
Return on average shareholders' equity		7.07	%			10.74	%			11.51	%
Return on average tangible common equity(1)		9.34	%			15.41	%			16.70	%
Net interest margin		3.18	%			3.21	%			3.39	%
Efficiency ratio(1)		58.03	%			55.22	%			57.64	%
Adjusted Earnings Performance Summary(1)
Adjusted earnings available to common shareholders	$	11,657			$	19,793			$	20,017
Adjusted diluted earnings per common share	$	0.53			$	0.89			$	0.88
Adjusted return on average assets		0.72	%			1.11	%			1.15	%
Adjusted return on average shareholders' equity		7.07	%			11.42	%			11.76	%
Adjusted return on average tangible common equity		9.34	%			16.51	%			17.11	%
Adjusted pre-tax, pre-provision earnings	$	32,240			$	35,898			$	32,449
Adjusted pre-tax, pre-provision return on average assets		1.67	%			1.80	%			1.67	%
Market Data
Book value per share at period end	$	31.67			$	31.61			$	30.08
Tangible book value per share at period end(1)	$	23.44			$	23.35			$	21.87
Tangible book value per share excluding accumulated other comprehensive income at period end(1)	$	27.23			$	26.91			$	25.39
Market price at period end	$	25.13			$	27.56			$	21.42
Common shares outstanding at period end		21,485,231				21,551,402				22,111,454
Capital
Total capital to risk-weighted assets		13.68	%			13.20	%			12.46	%
Tier 1 capital to risk-weighted assets		11.16	%			10.91	%			10.25	%
Tier 1 common capital to risk-weighted assets		8.60	%			8.40	%			7.84	%
Tier 1 leverage ratio		9.92	%			9.71	%			9.54	%
Tangible common equity to tangible assets(1)		6.58	%			6.55	%			6.24	%
Wealth Management
Trust assets under administration	$	3,888,219			$	3,733,355			$	3,502,635

(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)
	As of
	March 31,				December 31,				September 30,				June 30,				March 31,
(in thousands)	2024				2023				2023				2023				2023
Assets
Cash and cash equivalents	$	167,316			$	135,061			$	132,132			$	160,695			$	138,310
Investment securities		1,044,900				920,396				839,344				887,003				821,005
Loans		5,958,462				6,131,079				6,280,883				6,367,344				6,354,271
Allowance for credit losses on loans		(78,057	)			(68,502	)			(66,669	)			(64,950	)			(62,067	)
Total loans, net		5,880,405				6,062,577				6,214,214				6,302,394				6,292,204
Loans held for sale		5,043				3,811				6,089				5,632				2,747
Premises and equipment, net		81,831				82,814				82,741				81,006				80,582
Other real estate owned		8,920				9,112				480				202				6,729
Loan servicing rights, at lower of cost or fair value		19,577				20,253				20,933				21,611				1,117
Commercial FHA mortgage loan servicing rights held for sale		—				—				—				—				20,745
Goodwill		161,904				161,904				161,904				161,904				161,904
Other intangible assets, net		15,019				16,108				17,238				18,367				19,575
Company-owned life insurance		205,286				203,485				201,750				152,210				151,319
Other assets		241,608				251,347				292,460				243,697				233,937
Total assets	$	7,831,809			$	7,866,868			$	7,969,285			$	8,034,721			$	7,930,174
Liabilities and Shareholders' Equity
Noninterest-bearing demand deposits	$	1,212,382			$	1,145,395			$	1,154,515			$	1,162,909			$	1,215,758
Interest-bearing deposits		5,111,602				5,164,134				5,250,487				5,263,639				5,209,443
Total deposits		6,323,984				6,309,529				6,405,002				6,426,548				6,425,201
Short-term borrowings		214,446				34,865				17,998				21,783				31,173
FHLB advances and other borrowings		255,000				476,000				538,000				575,000				482,000
Subordinated debt		93,617				93,546				93,475				93,404				99,849
Trust preferred debentures		50,790				50,616				50,457				50,296				50,135
Other liabilities		102,966				110,459				106,743				90,869				66,173
Total liabilities		7,040,803				7,075,015				7,211,675				7,257,900				7,154,531
Total shareholders’ equity		791,006				791,853				757,610				776,821				775,643
Total liabilities and shareholders’ equity	$	7,831,809			$	7,866,868			$	7,969,285			$	8,034,721			$	7,930,174

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
	For the Three Months Ended
	March 31,			December 31,				March 31,
(in thousands, except per share data)	2024			2023				2023
Net interest income:
Interest income	$	101,675		$	104,681			$	95,539
Interest expense		45,755			46,604				35,035
Net interest income		55,920			58,077				60,504
Provision for credit losses on loans		14,000			6,950				3,135
Net interest income after provision for credit losses		41,920			51,127				57,369
Noninterest income:
Wealth management revenue		7,132			6,604				6,411
Service charges on deposit accounts		3,116			3,246				2,745
Interchange revenue		3,358			3,585				3,412
Residential mortgage banking revenue		527			451				405
Income on company-owned life insurance		1,801			1,753				876
Loss on sales of investment securities, net		—			(2,894	)			(648	)
Other income		5,253			7,768				2,578
Total noninterest income		21,187			20,513				15,779
Noninterest expense:
Salaries and employee benefits		24,102			24,031				24,243
Occupancy and equipment		4,142			3,934				4,443
Data processing		6,722			6,963				6,311
Professional services		2,255			2,072				1,760
Amortization of intangible assets		1,089			1,130				1,291
FDIC insurance		1,274			1,147				1,329
Other expense		5,283			5,211				5,105
Total noninterest expense		44,867			44,488				44,482
Income before income taxes		18,240			27,152				28,666
Income taxes		4,355			6,441				6,894
Net income		13,885			20,711				21,772
Preferred stock dividends		2,228			2,228				2,228
Net income available to common shareholders	$	11,657		$	18,483			$	19,544
Basic earnings per common share	$	0.53		$	0.84			$	0.86
Diluted earnings per common share	$	0.53		$	0.84			$	0.86

MIDLAND STATES BANCORP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited)
Adjusted Earnings Reconciliation
	For the Three Months Ended
	March 31,				December 31,				March 31,
(dollars in thousands, except per share data)	2024				2023				2023
Income before income taxes - GAAP	$	18,240			$	27,152			$	28,666
Adjustments to noninterest income:
Loss on sales of investment securities, net		—				2,894				648
(Gain) on sale of Visa B shares		—				(1,098	)			—
Total adjustments to noninterest income		—				1,796				648
Adjusted earnings pre tax - non-GAAP		18,240				28,948				29,314
Adjusted earnings tax		4,355				6,927				7,069
Adjusted earnings - non-GAAP		13,885				22,021				22,245
Preferred stock dividends		2,228				2,228				2,228
Adjusted earnings available to common shareholders	$	11,657			$	19,793			$	20,017
Adjusted diluted earnings per common share	$	0.53			$	0.89			$	0.88
Adjusted return on average assets		0.72	%			1.11	%			1.15	%
Adjusted return on average shareholders' equity		7.07	%			11.42	%			11.76	%
Adjusted return on average tangible common equity		9.34	%			16.51	%			17.11	%
Adjusted Pre-Tax, Pre-Provision Earnings Reconciliation
	For the Three Months Ended
	March 31,				December 31,				March 31,
(dollars in thousands)	2024				2023				2023
Adjusted earnings pre tax - non-GAAP	$	18,240			$	28,948			$	29,314
Provision for credit losses		14,000				6,950				3,135
Adjusted pre-tax, pre-provision earnings - non-GAAP	$	32,240			$	35,898			$	32,449
Adjusted pre-tax, pre-provision return on average assets		1.67	%			1.80	%			1.67	%

MIDLAND STATES BANCORP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued)
Efficiency Ratio Reconciliation
	For the Three Months Ended
	March 31,				December 31,				March 31,
(dollars in thousands)	2024				2023				2023
Noninterest expense - GAAP	$	44,867			$	44,488			$	44,482
Net interest income - GAAP	$	55,920			$	58,077			$	60,504
Effect of tax-exempt income		215				183				244
Adjusted net interest income		56,135				58,260				60,748
Noninterest income - GAAP		21,187				20,513				15,779
Loss on sales of investment securities, net		—				2,894				648
(Gain) on sale of Visa B shares		—				(1,098	)			—
Adjusted noninterest income		21,187				22,309				16,427
Adjusted total revenue	$	77,322			$	80,569			$	77,175
Efficiency ratio		58.03	%			55.22	%			57.64	%
Return on Average Tangible Common Equity (ROATCE)
	For the Three Months Ended
	March 31,				December 31,				March 31,
(dollars in thousands)	2024				2023				2023
Net income available to common shareholders	$	11,657			$	18,483			$	19,544
Average total shareholders' equity—GAAP	$	789,906			$	764,790			$	767,186
Adjustments:
Preferred Stock		(110,548	)			(110,548	)			(110,548	)
Goodwill		(161,904	)			(161,904	)			(161,904	)
Other intangible assets, net		(15,525	)			(16,644	)			(20,184	)
Average tangible common equity	$	501,929			$	475,694			$	474,550
ROATCE		9.34	%			15.41	%			16.70	%

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
	March 31,				December 31,				September 30,				June 30,				March 31,
(dollars in thousands, except per share data)	2024				2023				2023				2023				2023
Shareholders' Equity to Tangible Common Equity
Total shareholders' equity—GAAP	$	791,006			$	791,853			$	757,610			$	776,821			$	775,643
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		(15,019	)			(16,108	)			(17,238	)			(18,367	)			(19,575	)
Tangible common equity		503,535				503,293				467,920				486,002				483,616
Less: Accumulated other comprehensive loss (AOCI)		(81,419	)			(76,753	)			(101,181	)			(84,719	)			(77,797	)
Tangible common equity excluding AOCI	$	584,954			$	580,046			$	569,101			$	570,721			$	561,413
Total Assets to Tangible Assets:
Total assets—GAAP	$	7,831,809			$	7,866,868			$	7,969,285			$	8,034,721			$	7,930,174
Adjustments:
Goodwill		(161,904	)			(161,904	)			(161,904	)			(161,904	)			(161,904	)
Other intangible assets, net		(15,019	)			(16,108	)			(17,238	)			(18,367	)			(19,575	)
Tangible assets	$	7,654,886			$	7,688,856			$	7,790,143			$	7,854,450			$	7,748,695
Common Shares Outstanding		21,485,231				21,551,402				21,594,546				21,854,800				22,111,454
Tangible Common Equity to Tangible Assets		6.58	%			6.55	%			6.01	%			6.19	%			6.24	%
Tangible Book Value Per Share	$	23.44			$	23.35			$	21.67			$	22.24			$	21.87
Tangible Book Value Per Share, excluding AOCI	$	27.23			$	26.91			$	26.35			$	26.11			$	25.39