EFFINGHAM, Ill., April 23, 2026 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (Nasdaq: MSBI) (the “Company”) today reported net income available to common shareholders of $16.2 million, or $0.74 per diluted share, for the first quarter of 2026, compared to a net loss available to common shareholders of $5.1 million, or $0.24 per diluted share, for the fourth quarter of 2025. This also compares to a net loss of $143.2 million, or $6.58 per diluted share, for the first quarter of 2025.
Financial results for the first quarter of 2026 included $2.1 million of gains from the sale of the Company’s residential servicing portfolio and a portion of the Company’s commercial servicing portfolio, losses of $1.7 million from the sale of investment securities and a loss of $1.7 million related to our limited partnership investments.
Financial results for the fourth quarter of 2025 included a loss of $21.4 million from the sale of substantially all of the Company’s equipment finance portfolio, in addition to a $1.6 million loss on the sale of a small consumer loan portfolio.
Financial results for the first quarter of 2025 included goodwill impairment expense of $154.0 million.
2026 First Quarter Results
- Net income available to common shareholders of $16.2 million, or $0.74 per diluted share; Adjusted earnings available to common shareholders of $17.2 million, or $0.79 per diluted share
- Adjusted pre-provision net revenue of $30.5 million, or $1.43 per diluted share, compared to $31.6 million, or $1.44 per diluted share, for the fourth quarter of 2025
- Net interest margin of 3.91% compared to 3.74% in the prior quarter
- Community Bank loan portfolio increased $68.8 million, or 8.3% annualized, compared to prior quarter. Total loans decreased $13.4 million, primarily due to anticipated runoff within our specialty finance and non-core portfolios
- Total capital to risk-weighted assets of 15.27% and common equity tier 1 capital of 9.98%
- Ratio of nonperforming assets to total assets of 0.91%, a decrease of 10 basis points from the prior quarter
- Provision for credit losses on loans was $5.4 million for the first quarter of 2026, compared to $11.8 million for the fourth quarter of 2025
Discussion of Outlook; President & Chief Executive Officer, Jeffrey G. Ludwig:
“We delivered a solid start to 2026, reflecting the actions taken throughout 2025 to strengthen credit quality and reduce portfolio risk. Credit metrics continued to improve, with non-performing assets declining and trending toward our 0.75% target, while profitability returned to normalized levels. As a result, we generated earnings of $0.74 per share and a return on average assets of 1.16%.
“Our capital position continued to strengthen, with the common equity tier 1 ratio increasing to 9.98%, approaching our 10% target. We remained disciplined in our capital allocation, repurchasing $7.8 million of common stock during the quarter while continuing to invest in our core businesses. Net interest margin expanded meaningfully, driven primarily by lower funding costs.
“Growth in our Community Bank remains a key priority for 2026, with loan growth supported by strong client relationships, while non-core portfolios continued to run off as planned. Our wealth management business delivered another solid quarter. We are encouraged by the momentum entering 2026, and we see opportunities to further improve efficiency in the Company as the year progresses.”
Financial Highlights and Key Performance Indicators
As of and for the Three Months Ended March 31, December 31, September 30, June 30, March 31, 2026 2025 2025 2025 2025 Return on average assets (annualized) 1.16% (0.17)% 0.43% 0.67% (7.66)%Adjusted pre-provision net revenue to average assets (1) 1.91% 1.86% 1.81% 1.86% 1.50%Net interest margin (annualized) 3.91% 3.74% 3.79% 3.56% 3.49%Efficiency ratio (1) 62.17% 63.01% 61.01% 59.85% 63.77%Noninterest expense to average assets 3.16% 4.54% 2.86% 2.80% 11.02%Net charge-offs to average loans (annualized) 0.64% 3.69% 0.99% 2.34% 1.35%Tangible book value per share at period end (1) $20.77 $20.70 $21.16 $20.68 $20.54 Diluted earnings (loss) per common share $0.74 $(0.24) $0.24 $0.44 $(6.58)Common shares outstanding at period end 20,813,975 21,169,854 21,543,557 21,515,138 21,503,036 Trust assets under administration $4,474,234 $4,478,999 $4,363,756 $4,181,180 $4,101,414(1) Non-GAAP financial measures. Refer to pages 11-12 for a reconciliation to the comparable GAAP financial measures.
Key Points for First Quarter and Outlook
Solid Growth Trends in Community Bank & Wealth Management
- Total loans at March 31, 2026 were $4.34 billion, a decrease of $13.4 million from December 31, 2025. Key changes in the loan portfolio were as follows:
- Community Bank balances increased $68.8 million, or 2.1%. We originated $130 million of new loans during the first quarter of 2026, down from $180 million in the fourth quarter of 2025, primarily reflecting typical seasonal softness at the start of the year. First quarter production benefited from ongoing expansion of full-relationship commercial clients.
- Specialty finance loans decreased $54.7 million to $613.5 million from December 31, 2025.
- Non-core loans, which include our third party lending and servicing programs and remaining equipment finance portfolio, decreased $27.5 million to $328.1 million from December 31, 2025.
- Community Bank balances increased $68.8 million, or 2.1%. We originated $130 million of new loans during the first quarter of 2026, down from $180 million in the fourth quarter of 2025, primarily reflecting typical seasonal softness at the start of the year. First quarter production benefited from ongoing expansion of full-relationship commercial clients.
- Total deposits were $5.44 billion at March 31, 2026, an increase of $15.7 million from December 31, 2025. Key changes in deposits were as follows:
- Retail deposits increased $81.6 million driven primarily by growth in existing consumer and small business customer relationships and growth in new accounts as a result of targeted initiatives.
- Deposits among wealth management clients declined $22.8 million, reflecting normal fluctuations in client cash balances. Servicing deposits decreased $20.0 million due to the sales of the residential servicing portfolio and a portion of the commercial servicing portfolio.
- Higher-cost brokered deposits decreased $17.2 million.
- Retail deposits increased $81.6 million driven primarily by growth in existing consumer and small business customer relationships and growth in new accounts as a result of targeted initiatives.
- Wealth Management revenue totaled $8.2 million in the first quarter of 2026, which was relatively stable compared to the prior quarter. Assets under administration were $4.47 billion at March 31, 2026, compared to $4.48 billion at December 31, 2025. Market volatility experienced at the end of the first quarter had a limited effect on our results.
- Net interest margin was 3.91%, up 17 basis points compared to the fourth quarter of 2025, driven primarily by a continued decline in funding costs. The cost of deposits decreased 14 basis points to 1.81% in the first quarter of 2026, reflecting the ongoing impact of Federal Reserve rate cuts that began in late 2024. Margin expansion also benefited from a modest 2 basis point increase in loan yields and a favorable shift in the investment securities mix.
The following table presents the Company’s net interest margin for the first quarter of 2026 compared to the fourth quarter of 2025 and the first quarter of 2025.
For the Three Months Ended(dollars in thousands) March 31, 2026 December 31, 2025 March 31, 2025Interest-earning assets Average Balance Interest & Fees Yield/Rate Average Balance Interest & Fees Yield/Rate Average Balance Interest & Fees Yield/RateCash and cash equivalents $89,412 $809 3.67% $81,080 $802 3.92% $68,671 $718 4.24%Investment securities (1) 1,592,433 18,702 4.76 1,457,778 16,807 4.57 1,311,887 15,517 4.80 Loans (1)(2) 4,254,321 66,044 6.30 4,671,538 73,889 6.28 5,057,394 78,118 6.26 Loans held for sale 6,892 102 6.01 11,035 145 5.21 326,348 4,563 5.67 Nonmarketable equity securities 31,547 583 7.50 36,053 673 7.41 35,614 647 7.37 Total interest-earning assets 5,974,605 86,240 5.85 6,257,484 92,316 5.85 6,799,914 99,563 5.94 Noninterest-earning assets 496,233 486,216 667,940 Total assets $6,470,838 $6,743,700 $7,467,854 Interest-Bearing Liabilities Interest-bearing deposits $4,430,873 $24,203 2.22% $4,501,366 $27,147 2.39% $5,074,007 $34,615 2.77%Short-term borrowings 33,236 231 2.82 110,069 1,035 3.73 73,767 700 3.85 FHLB advances & other borrowings 273,444 2,670 3.96 359,380 3,648 4.03 299,578 3,163 4.28 Subordinated debt 27,022 380 5.70 27,017 380 5.58 77,752 1,387 7.23 Trust preferred debentures 51,948 1,121 8.75 51,771 1,183 9.07 51,283 1,200 9.49 Total interest-bearing liabilities 4,816,523 28,605 2.41 5,049,603 33,393 2.62 5,576,387 41,065 2.99 Noninterest-bearing deposits 996,926 1,015,629 1,052,181 Other noninterest-bearing liabilities 87,907 95,770 123,613 Shareholders’ equity 569,482 582,698 715,673 Total liabilities and shareholders’ equity $6,470,838 $6,743,700 $7,467,854 Net Interest Margin $57,635 3.91% $58,923 3.74% $58,498 3.49% Cost of Deposits 1.81% 1.95% 2.29%(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, 2026, December 31, 2025 and March 31, 2025.
(2) Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.
Trends in Noninterest Income and Expense
- Noninterest income was $22.1 million for the first quarter of 2026 compared to $26.9 million for the fourth quarter of 2025. Noninterest income for the first quarter of 2026 included $2.1 million of gains from the sale of the Company’s residential servicing portfolio and a portion of the Company’s commercial servicing portfolio, losses of $1.7 million from the sale of investment securities, and a $1.7 million loss related to our limited partnership investments. Additionally, the first quarter of 2026 included credit enhancement income of $3.4 million while the fourth quarter of 2025 included $6.6 million of additional credit enhancement income driven by contractual changes in our third-party lending and servicing arrangement.
- Noninterest expense was $50.4 million for the first quarter of 2026 compared to $77.2 million for the fourth quarter of 2025, which included $23.0 million of losses on the sale of loans.
- Income tax expense was $5.6 million for the first quarter of 2026, compared to an income tax benefit of $0.4 million for the fourth quarter of 2025 and income tax expense of $3.2 million for the first quarter of 2025. The resulting effective tax rates were 23.4%, 11.1% and 19.6%, respectively. The lower effective tax rate for the fourth quarter of 2025 reflected the loss on the sale of substantially all of our equipment finance portfolio; the effective tax rate for the first quarter of 2025 was not affected by the goodwill impairment, which was not deductible for tax purposes. We currently expect our effective tax rate to be approximately 22% - 23% for the full year, subject to changes in earnings mix, state tax legislation and other factors.
Improving Credit Quality
- Nonperforming loans decreased to $58.8 million, or 1.36% of total loans, at March 31, 2026, compared to $65.5 million, or 1.50% of total loans, at December 31, 2025, while loans 30-89 days past due increased to $20.3 million, or 0.47% of total loans, at March 31, 2026.
- Provision for credit losses on loans was $5.4 million for the first quarter of 2026.
- Net charge-offs were $6.7 million for the first quarter of 2026, which included a $2.6 million charge-off related to a nonperforming commercial real estate loan that moved to held for sale during the quarter and $2.1 million of fully reimbursed charge-offs related to our third-party lending portfolio.
- Allowance for credit losses on loans was $67.9 million, or 1.56% of total loans, at March 31, 2026, compared to an allowance of $69.2 million, or 1.59% of total loans, at December 31, 2025.
The table below summarizes certain information regarding the Company’s loan portfolio asset quality for the periods presented.
As of and for the Three Months Ended(dollars in thousands)March 31, December 31, September 30, June 30, March 31, 2026 2025 2025 2025 2025 Asset Quality Loans 30-89 days past due $20,266 $17,079 $26,019 $40,959 $48,221 Nonperforming loans 58,791 65,483 68,703 80,112 145,690 Nonperforming assets 59,305 66,089 70,369 81,775 151,264 Substandard accruing loans 91,963 76,000 78,901 58,478 77,620 Net charge-offs 6,747 43,492 12,309 29,855 16,878 Loans 30-89 days past due to total loans 0.47% 0.39% 0.53% 0.81% 0.96%Nonperforming loans to total loans 1.36% 1.50% 1.41% 1.59% 2.90%Nonperforming assets to total assets 0.91% 1.01% 1.02% 1.15% 2.08%Allowance for credit losses to total loans 1.56% 1.59% 2.07% 1.84% 2.10%Allowance for credit losses to nonperforming loans 115.45% 105.71% 146.84% 115.70% 72.19%Net charge-offs to average loans (annualized) 0.64% 3.69% 0.99% 2.34% 1.35%
Capital
As previously announced, 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 its common stock through November 2, 2026. During the first quarter of 2026, the Company repurchased $7.8 million of its common stock (365,507 shares of its common stock at a weighted average price of $21.47), resulting in approximately $7.6 million in remaining repurchase authority under the program.
The Company and Midland States Bank 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, 2026 Midland States Bank Midland States Bancorp, Inc. Minimum Regulatory Requirements (2)Total capital to risk-weighted assets 14.42% 15.27% 10.50%Tier 1 capital to risk-weighted assets 13.17% 13.48% 8.50%Common equity Tier 1 capital to risk-weighted assets 13.17% 9.98% 7.00%Tier 1 leverage ratio 10.10% 10.35% 4.00%Tangible common equity to tangible assets (1) N/A 6.62% N/A(1) A non-GAAP financial measure. Refer to pages 11-12 for a reconciliation to the comparable GAAP financial measure.
(2) Includes the capital conservation buffer of 2.5%, as applicable.
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, 2026, the Company had total assets of approximately $6.55 billion, and its Wealth Management Group had assets under administration of approximately $4.47 billion. The Company provides a full range of commercial and consumer banking products and services, 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 pre-provision net revenue,” “Adjusted pre-provision net revenue per diluted share,” “Adjusted pre-provision net revenue to average assets,” “Adjusted earnings,” “Adjusted earnings available to common shareholders,” “Adjusted diluted earnings per common share,” “Efficiency ratio,” “Tangible common equity to tangible assets,” and “Tangible book value per share.” 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, including currently anticipated levels of noninterest income and operating expenses. 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 federal trade policy, inflation, deposit volatility and potential regulatory developments; the performance of our loan portfolio and our ability to manage credit risk; changes in the financial markets; the effects of armed conflict, including the scope and duration of disruptions in global energy markets relating to war in Iran; changes in the business environment resulting from the adoption of artificial intelligence, including fraud and cybersecurity risk; operational risks, including with respect to fraud and information technology; changes in business plans as circumstances warrant; changes to U.S. and state 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, including the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025, which are incorporated herein by reference. 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," “should,” "propose," "may," "plan," "seek," "expect," "intend," "estimate," "anticipate," "believe," "continue," “outlook,” “trends,” 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 [email protected] or (217) 342-7321
Claire A. Stack, Interim Chief Financial Officer, at [email protected] or (217) 342-7321
March 31,(dollars in thousands, except per share data) 2026 2025 2025 2025 2025 Net interest income: Interest income $86,022 $92,095 $98,493 $97,924 $99,355 Interest expense 28,605 33,393 37,376 39,229 41,065 Net interest income 57,417 58,702 61,117 58,695 58,290 Provision for credit losses: Provision for credit losses on loans 5,403 11,825 20,505 17,369 10,850 Recapture of credit losses on unfunded commitments (400) (200) (500) — — Total provision for credit losses 5,003 11,625 20,005 17,369 10,850 Net interest income after provision for credit losses 52,414 47,077 41,112 41,326 47,440 Noninterest income: Wealth management revenue 8,248 8,272 8,018 7,379 7,350 Service charges on deposit accounts 3,355 3,573 3,598 3,351 3,305 Interchange revenue 3,528 3,437 3,445 3,463 3,151 Residential mortgage banking revenue 626 690 735 756 676 Income on company-owned life insurance 2,076 2,060 2,102 2,068 2,334 Gain (loss) on sales of investment securities, net (1,731) — 14 — — Credit enhancement income (loss) 3,360 6,876 (242) 3,848 (578)Other income 2,660 1,959 2,346 2,669 1,525 Total noninterest income 22,122 26,867 20,016 23,534 17,763 Noninterest expense: Salaries and employee benefits 26,157 25,906 26,393 25,685 26,416 Occupancy and equipment 4,535 4,353 4,206 4,166 4,498 Data processing 7,065 6,834 7,186 7,035 6,919 Professional services 2,242 2,321 2,017 2,792 2,741 Impairment on goodwill — — — — 153,977 Amortization of intangible assets 717 743 743 827 911 Loss on sale of loan portfolios — 23,051 — — — Impairment on leased assets and surrendered assets — 684 — — — FDIC insurance 529 3,739 1,512 1,422 1,463 Other expense 9,179 9,561 7,757 8,065 6,080 Total noninterest expense 50,424 77,192 49,814 49,992 203,005 Income (loss) before income taxes 24,112 (3,248) 11,314 14,868 (137,802)Income tax expense (benefit) 5,649 (360) 3,757 2,844 3,172 Net income (loss) 18,463 (2,888) 7,557 12,024 (140,974)Preferred stock dividends 2,228 2,228 2,229 2,228 2,228 Net income (loss) available to common shareholders $16,235 $(5,116) $5,328 $9,796 $(143,202) Basic earnings (loss) per common share $0.74 $(0.24) $0.24 $0.44 $(6.58)Diluted earnings (loss) per common share $0.74 $(0.24) $0.24 $0.44 $(6.58)Weighted average common shares outstanding 21,301,246 21,854,033 21,863,911 21,820,190 21,795,570 Weighted average diluted common shares outstanding 21,301,246 21,854,033 21,863,911 21,820,190 21,795,570
CONSOLIDATED FINANCIAL SUMMARY (unaudited)(continued)
As of
March 31,
December 31,
September 30,
June 30,
March 31,
(dollars in thousands) 2026 2025 2025 2025 2025 Loan Portfolio Mix Commercial loans $1,216,511 $1,178,521 $1,476,533 $1,544,386 $1,269,562 Equipment finance leases 43,803 50,981 310,983 347,155 373,168 Total commercial loans and leases 1,260,314 1,229,502 1,787,516 1,891,541 1,642,730 Commercial real estate 2,322,198 2,342,664 2,336,661 2,383,361 2,592,325 Construction and land development 276,469 286,140 260,073 258,729 264,966 Residential real estate 344,511 349,623 353,475 361,261 373,095 Consumer 135,081 144,075 129,862 140,403 144,937 Total loans $4,338,573 $4,352,004 $4,867,587 $5,035,295 $5,018,053 Loan Portfolio Segment Regions Eastern $989,596 $972,031 $927,977 $897,348 $897,792 Northern 758,815 711,702 724,695 753,590 747,028 Southern 713,592 729,368 725,892 778,124 711,787 St. Louis 934,974 915,126 896,005 884,685 902,743 Total Community Bank 3,396,977 3,328,227 3,274,569 3,313,747 3,259,350 Specialty finance 613,514 668,183 642,167 670,566 867,918 Non-core loan program and other (1) 328,082 355,594 950,851 1,050,982 890,785 Total loans $4,338,573 $4,352,004 $4,867,587 $5,035,295 $5,018,053 Deposit Portfolio Mix Noninterest-bearing demand $1,013,808 $1,040,411 $1,015,930 $1,074,212 $1,090,707 Interest-bearing: Checking 1,886,212 1,855,215 1,996,501 2,180,717 2,161,282 Money market 1,295,781 1,248,942 1,240,885 1,216,357 1,154,403 Savings 495,899 487,742 486,953 511,470 522,663 Time 723,055 748,942 804,740 818,813 818,732 Brokered time 25,312 43,127 59,816 145,350 188,647 Total deposits $5,440,067 $5,424,379 $5,604,825 $5,946,919 $5,936,434 Deposit Portfolio by Channel Retail $2,904,695 $2,823,064 $2,791,085 $2,811,838 $2,846,494 Commercial 1,209,210 1,193,637 1,248,445 1,145,369 1,074,837 Public Funds 455,982 473,381 605,474 618,172 490,374 Wealth & Trust 242,977 265,747 263,765 304,626 301,251 Servicing 478,496 498,496 498,892 785,659 842,567 Brokered Deposits 125,949 143,192 167,228 248,707 358,063 Other 22,758 26,862 29,936 32,548 22,848 Total deposits $5,440,067 $5,424,379 $5,604,825 $5,946,919 $5,936,434
(1) Non-core loan programs refer to loan portfolios originated through third parties or capital markets, including loans to finance the sale of the GreenSky portfolio, and equipment financing loans and leases.
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