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FALSE000146602600014660262023-07-272023-07-27

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 27, 2023
Midland States Bancorp, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Illinois   001-35272   37-1233196
(State or Other Jurisdiction of Incorporation)   (Commission File Number)   (IRS Employer Identification No.)

1201 Network Centre Drive
Effingham, Illinois 62401
(Address of Principal Executive Offices) (Zip Code)
 
(217) 342-7321
(Registrant’s Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading symbol(s) Name of each exchange on which registered
Common Stock, $0.01 par value MSBI The Nasdaq Market LLC
Depositary Shares, each representing a 1/40th interest in a share of 7.75% fixed rate reset non-cumulative perpetual preferred stock, Series A, $2.00 par value MSBIP The Nasdaq Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02. Results of Operations and Financial Condition.
On July 27, 2023, Midland States Bancorp, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter of 2023. The press release is attached as Exhibit 99.1.
Item 7.01. Regulation FD Disclosure.
On July 27, 2023, the Company made available on its website a slide presentation regarding the Company's second quarter 2023 financial results. The slide presentation is attached as Exhibit 99.2.
The information set forth under Items 2.02 and 7.01 in this Form 8-K and the attached exhibits shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in any such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.  
Exhibit No. Description
Press Release of Midland States Bancorp, Inc., dated July 27, 2023
Slide Presentation of Midland States Bancorp, Inc. regarding second quarter 2023 financial results
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 Date: July 27, 2023
 By: /s/ Eric T. Lemke
    Eric T. Lemke
    Chief Financial Officer


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.
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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) 2023 2023 2022 2022 2022
Loan Portfolio
Commercial loans $ 962,756  $ 937,920  $ 872,794  $ 907,651  $ 821,119 
Equipment finance loans 614,633  632,205  616,751  577,323  546,267 
Equipment finance leases 500,485  510,029  491,744  457,611  439,202 
Commercial FHA warehouse lines 30,522  10,275  25,029  51,309  23,872 
Total commercial loans and leases 2,108,396  2,090,429  2,006,318  1,993,894  1,830,460 
Commercial real estate 2,443,995  2,448,158  2,433,159  2,466,303  2,335,655 
Construction and land development 366,631  326,836  320,882  225,549  203,955 
Residential real estate 371,486  369,910  366,094  356,225  340,103 
Consumer 1,076,836  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.
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As of and for the Three Months Ended
(in thousands) June 30, March 31, December 31, September 30, June 30,
2023 2023 2022 2022 2022
Asset Quality
Loans 30-89 days past due $ 44,161  $ 30,895  $ 32,372  $ 28,275  $ 16,212 
Nonperforming loans 54,844  50,713  49,423  46,882  56,883 
Nonperforming assets 57,688  58,806  57,824  59,524  69,344 
Substandard loans 130,707  99,819  101,044  98,517  114,820 
Net charge-offs 2,996  2,119  538  3,233  2,781 
Loans 30-89 days past due to total loans 0.69  % 0.49  % 0.51  % 0.46  % 0.28  %
Nonperforming loans to total loans 0.86  % 0.80  % 0.78  % 0.76  % 0.98  %
Nonperforming assets to total assets 0.72  % 0.74  % 0.74  % 0.76  % 0.93  %
Allowance for credit losses to total loans 1.02  % 0.98  % 0.97  % 0.95  % 0.95  %
Allowance for credit losses to nonperforming loans 118.43  % 122.39  % 123.53  % 125.08  % 96.51  %
Net charge-offs to average loans 0.19  % 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) 2023 2023 2022 2022 2022
Deposit Portfolio
Noninterest-bearing demand $ 1,162,909  $ 1,215,758  $ 1,362,158  $ 1,362,481  $ 1,403,386 
Interest-bearing:
Checking 2,499,693  2,502,827  2,494,073  2,568,195  2,377,760 
Money market 1,226,470  1,263,813  1,184,101  1,125,333  1,027,547 
Savings 624,005  636,832  661,932  704,245  740,364 
Time 840,734  766,884  649,552  620,960  620,363 
Brokered time 72,737  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) 2023 2023 2022
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 $ 67,377  $ 852  5.07  % $ 85,123  $ 980  4.67  % $ 226,517  $ 468  0.83  %
Investment securities 861,409  7,286  3.39  % 809,848  5,995  3.00  % 818,927  4,931  2.41  %
Loans 6,356,012  91,890  5.80  % 6,320,402  87,997  5.65  % 5,677,791  63,594  4.49  %
Loans held for sale 4,067  59  5.79  % 1,506  16  4.41  % 9,865  77  3.15  %
Nonmarketable equity securities 45,028  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 assets 612,238  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 borrowings 22,018  14  0.26  % 38,655  25  0.26  % 59,301  22  0.15  %
FHLB advances & other borrowings 471,989  5,396  4.59  % 540,278  6,006  4.51  % 307,611  1,435  1.87  %
Subordinated debt 97,278  1,335  5.51  % 99,812  1,370  5.57  % 139,232  2,011  5.78  %
Trust preferred debentures 50,218  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 deposits 1,187,584  1,250,899  1,401,268 
Other noninterest-bearing liabilities 81,065  74,691  66,009 
Shareholders’ equity 776,791  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 Deposits 2.09  % 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 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.
5

For the Six Months Ended
June 30, June 30,
(dollars in thousands) 2023 2022
Interest-earning assets Average Balance Interest & Fees Yield/Rate Average Balance Interest & Fees Yield/Rate
Cash and cash equivalents $ 76,201  $ 1,832  4.85  % $ 304,938  $ 639  0.42  %
Investment securities 835,771  13,281  3.18  % 856,571  9,894  2.31  %
Loans 6,338,305  179,887  5.72  % 5,477,037  120,873  4.45  %
Loans held for sale 2,794  75  5.42  % 20,501  297  2.93  %
Nonmarketable equity securities 46,416  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 assets 611,528  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 borrowings 30,291  39  0.26  % 64,642  45  0.14  %
FHLB advances & other borrowings 505,945  11,402  4.54  % 309,436  2,647  1.72  %
Subordinated debt 98,538  2,705  5.54  % 139,186  4,022  5.78  %
Trust preferred debentures 50,133  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 deposits 1,219,050  1,418,083 
Other noninterest-bearing liabilities 77,895  73,878 
Shareholders’ equity 772,015  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 Deposits 1.90  % 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 investment securities.
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Excluding these transactions, noninterest income for the second quarter of 2022 was $15.6 million.
For the Three Months Ended For the Six Months Ended
June 30, March 31, June 30, June 30, June 30,
(in thousands) 2023 2023 2022 2023 2022
Noninterest income
Wealth management revenue $ 6,269  $ 6,411  $ 6,143  $ 12,680  $ 13,282 
Residential mortgage banking revenue 540  405  384  945  983 
Service charges on deposit accounts 2,677  2,568  2,304  5,245  4,372 
Interchange revenue 3,696  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, net 676  —  —  676  — 
Gain (loss) on sales of other real estate owned, net 819  —  (162) 819  (121)
Impairment on commercial mortgage servicing rights —  —  (869) —  (1,263)
Company-owned life insurance 891  876  840  1,767  1,859 
Other income 4,054  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 Ended For the Six Months Ended
June 30, March 31, June 30, June 30, June 30,
(in thousands) 2023 2023 2022 2023 2022
Noninterest expense
Salaries and employee benefits $ 22,857  $ 24,243  $ 22,645  $ 47,100  $ 44,515 
Occupancy and equipment 3,879  4,443  3,489  8,322  7,244 
Data processing 6,544  6,311  6,082  12,855  11,955 
Professional 1,663  1,760  1,516  3,423  3,488 
Amortization of intangible assets 1,208  1,291  1,318  2,499  2,716 
FDIC insurance 1,196  1,329  826  2,525  1,656 
Other expense 5,547  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 Bank Midland States Bancorp, Inc.
Minimum Regulatory Requirements (2)
Total capital to risk-weighted assets 11.89% 12.65% 10.50%
Tier 1 capital to risk-weighted assets 11.01% 10.47% 8.50%
Tier 1 leverage ratio 10.07% 9.57% 4.00%
Common equity Tier 1 capital 11.01% 8.03% 7.00%
Tangible common equity to tangible assets (1)
 N/A 6.19% 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.
9

Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.
CONTACTS:
Jeffrey G. Ludwig, President and CEO, at jludwig@midlandsb.com or (217) 342-7321
Eric T. Lemke, Chief Financial Officer, at elemke@midlandsb.com or (217) 342-7321
Douglas J. Tucker, SVP and Corporate Counsel, at dtucker@midlandsb.com or (217) 342-7321
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) 2023 2023 2022 2023 2022
Earnings Summary
Net interest income $ 58,840  $ 60,504  $ 61,334  $ 119,344  $ 118,161 
Provision for credit losses 5,879  3,135  5,441  9,014  9,608 
Noninterest income 18,753  15,779  14,613  34,532  30,226 
Noninterest expense 42,894  44,482  41,339  87,376  82,223 
Income before income taxes 28,820  28,666  29,167  57,486  56,556 
Income taxes 7,245  6,894  7,284  14,139  13,924 
Net income 21,575  21,772  21,883  43,347  42,632 
Preferred dividends 2,228  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 - diluted 22,205,079  22,501,970  22,360,819  22,348,981  22,355,936 
Return on average assets 1.09  % 1.12  % 1.19  % 1.10  % 1.17  %
Return on average shareholders' equity 11.14  % 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 margin 3.23  % 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 assets 1.10  % 1.15  % 1.21  % 1.12  % 1.18  %
Adjusted return on average shareholders' equity 11.21  % 11.76  % 13.84  % 11.48  % 13.34  %
Adjusted return on average tangible common equity 16.10  % 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 assets 1.76  % 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 end 21,854,800  22,111,454  22,060,255 
Capital
Total capital to risk-weighted assets 12.65  % 12.46  % 11.44  %
Tier 1 capital to risk-weighted assets 10.47  % 10.25  % 8.63  %
Tier 1 common capital to risk-weighted assets 8.03  % 7.84  % 7.66  %
Tier 1 leverage ratio 9.57  % 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) 2023 2023 2022 2022 2022
Assets
Cash and cash equivalents $ 160,695  $ 138,310  $ 160,631  $ 313,188  $ 270,117 
Investment securities 887,003  821,005  776,860  690,504  769,278 
Loans 6,367,344  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, net 6,302,394  6,292,204  6,245,416  6,139,812  5,740,646 
Loans held for sale 5,632  2,747  1,286  4,338  5,298 
Premises and equipment, net 81,006  80,582  78,293  77,519  77,668 
Other real estate owned 202  6,729  6,729  11,141  11,131 
Loan servicing rights, at lower of cost or fair value 21,611  1,117  1,205  1,297  25,879 
Commercial FHA mortgage loan servicing rights held for sale —  20,745  20,745  23,995  — 
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 
Company-owned life insurance 152,210  151,319  150,443  149,648  148,900 
Other assets 243,697  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 deposits 5,263,639  5,209,443  5,002,494  5,032,771  4,781,052 
Total deposits 6,426,548  6,425,201  6,364,652  6,395,252  6,184,438 
Short-term borrowings 21,783  31,173  42,311  58,518  67,689 
FHLB advances and other borrowings 575,000  482,000  460,000  360,000  285,000 
Subordinated debt 93,404  99,849  99,772  139,370  139,277 
Trust preferred debentures 50,296  50,135  49,975  49,824  49,674 
Other liabilities 90,869  66,173  80,217  79,634  73,546 
Total liabilities 7,257,900  7,154,531  7,096,927  7,082,598  6,799,624 
Total shareholders’ equity 776,821  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 Ended For the Six Months Ended
June 30, March 31, June 30, June 30, June 30,
(in thousands, except per share data) 2023 2023 2022 2023 2022
Net interest income:
Interest income $ 100,491  $ 95,539  $ 69,236  $ 196,030  $ 131,984 
Interest expense 41,651  35,035  7,902  76,686  13,823 
Net interest income 58,840  60,504  61,334  119,344  118,161 
Provision for credit losses:
Provision for credit losses on loans 5,879  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 losses 5,879  3,135  5,441  9,014  9,608 
Net interest income after provision for credit losses 52,961  57,369  55,893  110,330  108,553 
Noninterest income:
Wealth management revenue 6,269  6,411  6,143  12,680  13,282 
Residential mortgage banking revenue 540  405  384  945  983 
Service charges on deposit accounts 2,677  2,568  2,304  5,245  4,372 
Interchange revenue 3,696  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, net 676  —  —  676  — 
Gain (loss) on sales of other real estate owned, net 819  —  (162) 819  (121)
Impairment on commercial mortgage servicing rights —  —  (869) —  (1,263)
Company-owned life insurance 891  876  840  1,767  1,859 
Other income 4,054  2,755  2,484  6,809  4,345 
Total noninterest income 18,753  15,779  14,613  34,532  30,226 
Noninterest expense:
Salaries and employee benefits 22,857  24,243  22,645  47,100  44,515 
Occupancy and equipment 3,879  4,443  3,489  8,322  7,244 
Data processing 6,544  6,311  6,082  12,855  11,955 
Professional 1,663  1,760  1,516  3,423  3,488 
Amortization of intangible assets 1,208  1,291  1,318  2,499  2,716 
FDIC insurance 1,196  1,329  826  2,525  1,656 
Other expense 5,547  5,105  5,463  10,652  10,649 
Total noninterest expense 42,894  44,482  41,339  87,376  82,223 
Income before income taxes 28,820  28,666  29,167  57,486  56,556 
Income taxes 7,245  6,894  7,284  14,139  13,924 
Net income 21,575  21,772  21,883  43,347  42,632 
Preferred stock dividends 2,228  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 Ended For the Six Months Ended
June 30, March 31, June 30, June 30, June 30,
(dollars in thousands, except per share data) 2023 2023 2022 2023 2022
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, net 869  648  101  1,517  101 
(Gain) on repurchase of subordinated debt (676) —  —  (676) — 
Total adjustments to noninterest income 193  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-GAAP 29,013  29,314  29,592  58,327  57,072 
Adjusted earnings tax 7,297  7,069  7,401  14,366  14,066 
Adjusted earnings - non-GAAP 21,716  22,245  22,191  43,961  43,006 
Preferred stock dividends 2,228  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 assets 1.10  % 1.15  % 1.21  % 1.12  % 1.18  %
Adjusted return on average shareholders' equity 11.21  % 11.76  % 13.84  % 11.48  % 13.34  %
Adjusted return on average tangible common equity 16.10  % 17.11  % 19.41  % 16.60  % 18.65  %
Adjusted Pre-Tax, Pre-Provision Earnings Reconciliation
For the Three Months Ended For the Six Months Ended
June 30, March 31, June 30, June 30, June 30,
(dollars in thousands) 2023 2023 2022 2023 2022
Adjusted earnings pre tax - non-GAAP $ 29,013  $ 29,314  $ 29,592  $ 58,327  $ 57,072 
Provision for credit losses 5,879  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 assets 1.76  % 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 Ended For the Six Months Ended
June 30, March 31, June 30, June 30, June 30,
(dollars in thousands) 2023 2023 2022 2023 2022
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 income 195  244  321  439  690 
Adjusted net interest income 59,035  60,748  61,655  119,783  118,851 
Noninterest income - GAAP 18,753  15,779  14,613  34,532  30,226 
Impairment on commercial mortgage servicing rights —  —  869  —  1,263 
Loss on sales of investment securities, net 869  648  101  1,517  101 
(Gain) on repurchase of subordinated debt (676) —  —  (676) — 
Adjusted noninterest income 18,946  16,427  15,583  35,373  31,590 
Adjusted total revenue $ 77,980  $ 77,175  $ 77,238  $ 155,156  $ 150,441 
Efficiency ratio 55.01  % 57.64  % 53.10  % 56.32  % 54.38  %
Return on Average Tangible Common Equity (ROATCE)
For the Three Months Ended For the Six Months Ended
June 30, March 31, June 30, June 30, June 30,
(dollars in thousands) 2023 2023 2022 2023 2022
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 
ROATCE 15.99  % 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) 2023 2023 2022 2022 2022
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 AOCI 570,721  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 Outstanding 21,854,800  22,111,454  22,214,913  22,074,740  22,060,255 
Tangible Common Equity to Tangible Assets 6.19  % 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
EX-99.2 3 msbi20230630ex992.htm EX-99.2 msbi20230630ex992
1 Midland States Bancorp, Inc. NASDAQ: MSBI Second Quarter 2023 Earnings Presentation

 
22 Forward-Looking Statements. This presentation may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements expressing management’s current expectations, forecasts of future events or long-term goals may be based upon beliefs, expectations and assumptions of the Company’s management, and are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” or other similar expressions. All statements in this presentation speak only as of the date they are made, and the Company undertakes no obligation to update any statement. A number of factors, many of which are beyond the ability of the Company to control or predict, could cause actual results to differ materially from those in its forward-looking statements 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. These risks and uncertainties should be considered in evaluating forward-looking statements, and undue reliance should not be placed on such statements. Additional information concerning the Company and its businesses, including additional factors that could materially affect the Company’s financial results, are included in the Company’s filings with the Securities and Exchange Commission. Use of Non-GAAP Financial Measures. This presentation may contain certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States (“GAAP”). These non-GAAP financial measures include “Adjusted Earnings,” "Adjusted Earnings Available to Common Shareholders," “Adjusted Diluted Earnings Per Share,” “Adjusted Return on Average Assets,” “Adjusted Return on Average Shareholders’ Equity,” “Adjusted Return on Average Tangible Common Equity,” “Adjusted Pre-Tax, Pre-Provision Income,” “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 that 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. Reconciliations of these non-GAAP measures are provided in the Appendix section of this presentation.

 
33 Company Snapshot • Illinois state-chartered community bank founded in 1881 • $8.0 billion in assets • $3.6 Wealth Management business • Commercial bank focused on in-market relationships with national diversification in equipment finance • 53 branches in Illinois and Missouri • 16 successful acquisitions since 2008 Financial Highlights as of 6/30/2023 $8.0 Billion Total Assets $6.4 Billion Total Loans $6.4 Billion Total Deposits $3.6 Billion Assets Under Administration YTD ROAA: 1.10 % YTD Return on TCE(1): 16.34 % TCE/TA: 6.19 % YTD PTPP(1) ROAA: 1.72 % Dividend Yield: 6.03 % Price/Tangible Book: 0.90x Price/LTM EPS: 4.9x Notes: (1) Represents a non-GAAP financial measure. See “Non-GAAP Reconciliation” in the appendix.

 
4 Business and Corporate Strategy 4 Customer-Centric Culture Drive organic growth by focusing on customer service and accountability to our clients and colleagues; seek to develop bankers who create dynamic relationships; pursue continual investment in people; maintain a core set of institutional values, and build a robust technology platform that provides customers with a superior banking experience Operational Excellence A corporate-wide focus on driving improvements in people, processes and technology in order to generate further improvement in Midland's operating efficiency and financial performance Enterprise-Wide Risk Management Maintain a program designed to integrate controls, monitoring and risk-assessment at all key levels and stages of our operations and growth; ensure that all employees are fully engaged Accretive Acquisitions Maintain experienced acquisition team capable of identifying and executing transactions that build shareholder value through a disciplined approach to pricing; take advantage of relative strength in periods of market disruption Revenue Diversification Generate a diversified revenue mix and focus on growing businesses that generate strong recurring revenues such as wealth management

 
5 Successful Execution of Strategic Plan... 5 Total Assets (at period-end in billions) $1.1 $1.6 $1.5 $1.6 $1.7 $2.7 $2.9 $3.2 $4.4 $5.6 $6.1 $6.9 $7.4 $7.9 $8.0 Selected Acquisitions 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2Q 2023 CAG R si nce 201 6 IP O: 1 5% CAGR: 16% Selected Acquisitions: Total Assets at Time of Acquisition (in millions) 2009: Strategic Capital Bank ($540) 2010: AMCORE Bank ($500) 2014: Love Savings/Heartland Bank ($889) 2017: Centrue Financial ($990) 2018: Alpine Bancorp ($1,243) 2019: HomeStar Financial Group ($366)

 
6 ...Leads to Creation of Shareholder Value 6 Tangible Book Value Per Share(1) 22 Consecutive Years of Dividend Increases $17.31 $17.00 $18.64 $19.31 $21.66 $20.94 $22.24 $17.22 $17.09 $18.34 $18.80 $21.42 $24.72 $26.11 Tangible Book Value Per Share TBV/Share ex. AOCI 2017 2018 2019 2020 2021 2022 2Q 2023 TBV/Share ex. AOCI CAGR: 7.9% Dividends Declared Per Share $0.80 $0.88 $0.97 $1.07 $1.12 $1.16 $1.20 2017 2018 2019 2020 2021 2022 2Q 2023 (annualized) CAGR: 7.0% Notes: (1) Represents a non-GAAP financial measure. See “Non-GAAP Reconciliation” in the appendix.

 
7 ...And Increased Profitability 7 Adjusted Diluted EPS(1) CAGR: 14.9% Adjusted ROATCE(1) 11.32% 15.00% 14.44% 9.24% 18.33% 18.59% 16.60% 2017 2018 2019 2020 2021 2022 YTD 2023 Notes: (1) Represents a non-GAAP financial measure. See “Non-GAAP Reconciliation” in the appendix. $1.89 $2.39 $2.54 $1.70 $3.65 $3.79 2017 2018 2019 2020 2021 2022 Adjusted Diluted EPS data and CAGR through 2022

 
8 Overview of 2Q23 Strong Financial Performance Stable Deposit Base Continued Shift of Portfolio Towards Commercial Loans Increase in TBV and Capital Ratios 8 • Net income available to common shareholders of $19.3 million, or $0.86 diluted EPS • Pre-tax, pre-provision earnings(1) increased 8% from prior quarter to $34.9 million • ROAA of 1.09% and ROTCE of 15.99% • Total deposits up slightly from end of prior quarter • Uninsured deposits comprise 19% of total deposits • Deposit mix reflects continued trend of customers shifting a portion of deposit balances into higher yielding accounts • New loan production focused on full banking relationships with commercial clients that provide both loans and deposits • Total loans up slightly from end of prior quarter, reflecting the more selective approach to new loan production • Growth in commercial loans offset decline in consumer loans resulting from decline in loans originated through GreenSky partnership • Tangible book value per share increased 2% from end of prior quarter • Strong financial performance and prudent balance sheet management resulted in increase in most capital ratios • CET1 ratio increased 19bps to 8.03% at the end of the current quarter Notes: (1) Represents a non-GAAP financial measure. See “Non-GAAP Reconciliation” in the appendix.

 
9 Loan Portfolio 9 • Total loans increased $13.1 million from prior quarter to $6.37 billion • Growth primarily driven by increases in commercial loans and leases and construction and land development loans, partially offset by decline in consumer loans resulting from planned reduction of loans originated through GreenSky partnership • Growth in construction portfolio driven by fundings on existing lines, primarily for multifamily projects • Equipment finance balances decreased $27.1 million, or 2% from end of prior quarter • Expect continued decreases in the consumer portfolio as GreenSky originations slow and program officially ends in October 2023 Loan Portfolio Mix (in millions, as of quarter-end) 2Q 2023 1Q 2023 2Q 2022 Commercial loans and leases $ 2,108 $ 2,090 $ 1,830 Commercial real estate 2,444 2,448 2,336 Construction and land development 367 327 204 Residential real estate 371 370 340 Consumer 1,077 1,119 1,085 Total Loans $ 6,367 $ 6,354 $ 5,796 Total Loans ex. Commercial FHA Lines and PPP $ 6,337 $ 6,344 $ 5,765 $5,796 $6,198 $6,306 $6,354 $6,367 4.49% 4.83% 5.26% 5.65% 5.80% Total Loans Average Loan Yield 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 Total Loans and Average Loan Yield (in millions, as of quarter-end)

 
10 Total Deposits 10 • Total deposits increased $1.3 million from end of prior quarter • Noninterest-bearing deposits decline primarily attributable to commercial depositors moving excess liquidity into interest-bearing accounts and other seasonal outflows • Managing rates on deposits in order to continue growing our deposit base through new and expanded relationships with retail and commercial clients • Increase in brokered CDs replaced other higher cost fundings Deposit Mix (in millions, as of quarter-end) 2Q 2023 1Q 2023 2Q 2022 Noninterest-bearing demand $ 1,163 $ 1,216 $ 1,403 Interest-bearing: Checking $ 2,500 $ 2,503 $ 2,378 Money market $ 1,226 $ 1,264 $ 1,028 Savings $ 624 $ 637 $ 740 Time $ 841 $ 767 $ 620 Brokered time $ 73 $ 39 $ 15 Total Deposits $ 6,427 $ 6,425 $ 6,184 $6,184 $6,395 $6,365 $6,425 $6,427 0.25% 0.65% 1.23% 1.70% 2.09% Total Deposits Cost of Deposits 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 Total Deposits and Cost of Deposits (in millions, as of quarter-end)

 
11 Deposit Type Trend 11 Deposits by Type Trend (in millions) $4,074 $4,544 $5,101 $6,111 $6,365 $6,427 Non Int Bearing Demand Interest Bearing Checking Money Market Savings Time Brokered Time 2018 2019 2020 2021 2022 2Q 2023 11% CAG R

 
12 Deposit Summary as of June 30, 2023 12 Deposits by Channel (in millions) Commercial Deposits by NAICS Code (in millions) 8.1% 14.0% 5.2% 10.1% 1.3% 7.9% 1.3%4.4%4.6% 3.5% 4.2% 1.3% 3.0% 18.8% 9.4% 2.9% Finance & Insurance RE, Rental & Leasing Manufacturing Other Services Skilled/Memory Care Construction Admin, Support, Waste Mgmt & Remediation Retail Trade Agriculture, Forestry, Fishing & Hunting Wholesale Trade Professional, Scientific & Tech Services Gasoline Station & C Stores Accom & Food NAICS code unavailable All Other Health Care All Other category made up of over 155 NAICS with Golf Courses being the largest at $4 million $6.43 billion $0.95 billion $2,780 43.3% $950 14.8% $1,029 16.0% $317 4.9% $270 4.2% $600 9.3% $481 7.5% Retail Deposits Commercial Deposits Servicing Deposits Public Funds Brokered Deposits ICS Reciprocal Other

 
13 Uninsured Deposits 13 Average Deposit Balance per Account = $33,000 *Excludes $569 million and $645 million, respectively, of fully insured funds in Insured Cash Sweep (ICS) accounts Uninsured Deposits (in millions) June 30, 2023 March 31, 2023 Call Report Uninsured Estimate* $ 1,654 $ 1,793 Call Report Estimated Uninsured Deposits to Total Deposits 26 % 28 % Less: Affiliate Deposits (MSB owned funds) (30) (32) Less: Additional structured FDIC coverage (50) (56) Less: Collateralized Deposits (363) (384) Estimated uninsured deposits excluding items above $ 1,211 $ 1,321 Estimated Uninsured Deposits to Total Deposits 19 % 21 % Total Deposits $ 6,427 $ 6,425

 
14 Investment Portfolio As of June 30, 2023 14 Fair Value of Investments by Type 4.8% 8.3% 61.0% 7.5% 6.5% 2.6% 9.3% Treasuries US GSE & US Agency MBS - agency MBS - non agency State & Muni CLOs Corporate • All Investments are classified as Available for Sale • Average T/E Yield is 3.39% • Average Duration is 5.46 years • Purchased $109 million with T/E Yield of 5.53%, Sold $15.5 million with T/E Yield of 1.71% in 2Q23 Investments by Yield and DurationInvestment Mix & Unrealized Gain (Loss) (in millions) Fair Value Book Value Unrealized Gain (Loss) Treasuries $ 43 $ 47 $ (4) US GSE & US Agency 73 78 (5) MBS - agency 539 612 (73) MBS - non agency 66 70 (4) State & Municipal 57 64 (7) CLOs 23 23 — Corporate 82 95 (13) Total Investments $ 883 $ 989 $ (106) Duration Yi el d 0 1 2 3 4 5 6 7 8 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% $883 million

 
15 Liquidity Overview 15 Liquidity Sources (in millions) June 30, 2023 March 31, 2023 Cash and Cash Equivalents $ 160.7 $ 138.3 Unpledged Securities 343.5 310.3 FHLB Committed Liquidity 857.2 932.8 FRB Discount Window Availability 184.1 207.7 Total Estimated Liquidity $ 1,545.5 $ 1,589.1 Conditional Funding Based on Market Conditions Additional Credit Facility $ 330.0 $ 250.0 Brokered CDs (additional capacity) $ 400.0 $ 500.0

 
16 Net Interest Income/Margin 16 • Net interest income down slightly from prior quarter as higher average balance of interest-earning assets was offset by an increase in cost of interest-bearing liabilities • Net interest margin decreased 16 bps from prior quarter as the increase in cost of deposits exceeded the increase in the average yield on earning assets • Average rate on new and renewed loan originations increased 57 bps to 8.01% in June 2023 from 7.44% in March 2023 • Net interest margin expected to stabilize as the pace of Fed rate increases slow, loan portfolio continues to reprice, and the impact of repositioning in the investment portfolio is realized Net Interest Income (in millions) Net Interest Margin $61.3 $64.0 $63.6 $60.5 $58.8$0.6 $0.5 $0.3 $0.3 $0.4 NII Accretion Income 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 3.65% 3.63% 3.50% 3.39% 3.23% 0.03% 0.03% 0.02% 0.02% 0.02% NIM Accretion Income 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023

 
17 Wealth Management 17 • Assets under administration up slightly in 2Q23 • 1Q23 increase in Wealth Management fees included seasonal tax preparation fees • Increase in AUA resulted in slight increase in Wealth Management revenue compared to the prior quarter excluding the seasonal tax preparation fees Assets Under Administration (in millions) Wealth Management Revenue (in millions) $3,503 $3,355 $3,505 $3,503 $3,595 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 $6.14 $6.20 $6.23 $6.41 $6.27 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023

 
18 Noninterest Income 18 • Noninterest income increased $3.0 million from prior quarter primarily due to gains on the redemption of subordinated debt and sales of other real estate owned • 2Q23 noninterest income included $0.9 million loss on sale of investment securities as part of repositioning of portfolio that will positively impact net interest margin, liquidity, and capital allocations • Projecting $0.6 million of commercial MSR amortization per quarter going forward Noninterest Income (in millions) $14.6 $15.8 $33.8 $15.8 $18.8 Wealth Management Interchange Service Charges on Deposits Residential Mortgage All Other 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023

 
19 Noninterest Expense and Operating Efficiency 19 Noninterest Expense and Efficiency Ratio (1) (Noninterest expense in millions) $43.5 $44.5 $42.9 $41.3 $49.9 $0.3 $3.3 53.1% 54.3% 58.3% 57.6% 55.0% Total Noninterest Expense Adjustments to Noninterest Expense Efficiency Ratio 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 • Efficiency Ratio (1) was 55.0% in 2Q 2023 vs. 57.6% in 1Q 2023 • Noninterest expense decreased primarily due to: ◦ Decreased commissions and incentive compensation expenses partially offset by annual salary increases ◦ Decreased occupancy and equipment primarily due to elevated seasonal related expenses incurred in 1Q23 • Near-term operating expense run- rate expected to be $43.5 - $44.5 million Notes: (1) Represents a non-GAAP financial measure. See “Non-GAAP Reconciliation” in the appendix.

 
20 Asset Quality 20 • Nonperforming loans increased $4.1 million primarily due to one commercial loan as well as increases in the equipment finance portfolio • Delinquencies in consumer portfolio remain low • Net charge-offs to average loans was 0.19% • Provision for credit losses on loans of $5.9 million, primarily related to changes in the portfolio mix and increases to specific reserves • Sale of two OREO properties resulted in decrease of nonperforming assets Nonperforming Loans / Total Loans (Total Loans as of quarter-end) NCO / Average Loans 0.98% 0.76% 0.78% 0.80% 0.86% 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 0.20% 0.21% 0.03% 0.14% 0.19% 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023

 
21 Changes in Allowance for Credit Losses 21 ($ in thousands) ▪ Changes to specific reserves ▪ New Loans ▪ Changes in Credit quality including risk rating ▪ Changes in portfolio mix ▪ Aging of existing portfolio ▪ Other charge-offs and recoveries ▪ Change to macro- economic variables and forecasts ▪ Changes to other economic qualitative factors$62,067 $1,720 $810 $353 $64,950 ACL March 31, 2023 Specific Reserves Portfolio Changes Economic Factors ACL June 30, 2023

 
22 ACL by Portfolio 22 ($ in thousands) June 30, 2023 March 31, 2023 Portfolio Loans ACL % of Total Loans Loans ACL % of Total Loans Commercial $ 875,295 $ 5,180 0.59 % $ 823,847 $ 5,365 0.65 % Warehouse Lines 30,522 — — % 10,275 — — % Commercial Other 732,616 10,110 1.38 % 756,553 10,397 1.37 % Equipment Finance Loans 614,633 9,743 1.59 % 632,205 9,997 1.58 % Equipment Finance Leases 500,485 7,542 1.51 % 510,029 7,168 1.41 % CRE non-owner occupied 1,647,680 20,544 1.25 % 1,636,316 18,049 1.10 % CRE owner occupied 453,514 5,711 1.26 % 460,133 6,945 1.51 % Multi-family 273,939 2,676 0.98 % 281,559 2,730 0.97 % Farmland 68,862 494 0.72 % 70,150 492 0.70 % Construction and Land Development 366,631 3,189 0.87 % 326,836 2,442 0.75 % Residential RE First Lien 311,796 4,952 1.59 % 309,637 3,773 1.22 % Other Residential 59,690 599 1.00 % 60,273 577 0.96 % Consumer 108,619 804 0.74 % 112,882 1,074 0.95 % Consumer Other(1) 968,217 3,149 0.33 % 1,006,056 3,055 0.30 % Total Loans 6,367,344 64,950 1.02 % 6,354,271 62,067 0.98 % Loans (excluding BaaS portfolio(1) and warehouse lines) 5,276,170 61,436 1.16 % 5,228,172 58,643 1.12 % Notes: (1) Primarily consists of loans originated through GreenSky relationship

 
23 Outlook 23 • Prudent risk management will remain top priority while economic uncertainty remains • Continue generating strong financial performance while maintaining conservative approach to new loan production to build capital and liquidity • Planned reduction in the consumer portfolio will continue to be utilized to fund new commercial loan production, add to the securities portfolio and pay off higher cost funding sources with net impact likely being earnings neutral, but capital accretive • Planned sale of commercial MSR portfolio has been terminated and this business will continue to provide a low-cost source of deposits • Maintain disciplined expense management while getting further leverage from investments in talent and technology made over the past few years • Business development efforts focused on adding new commercial and retail deposit relationships, supplemented with new Banking-as-a-Service partnerships focused on deposit generation that are expected to start making a contribution during the second half of 2023 • Strength of balance sheet expected to provide opportunities to capitalize on current environment to add new clients that will contribute to continued long-term profitable growth and increase in franchise value

 
24 APPENDIX 24

 
2525 Industries as a percentage of Commercial, CRE and Equipment Finance Loans and Leases with outstanding balances of $4.92 billion as of 6/30/2023 ($s in millions) RE/Rental & Leasing $1,497.8 30.4% All Others $627.4 12.8% Skilled Nursing $485.0 9.9% Construction - General $345.2 7.0% Manufacturing $253.6 5.2% Finance and Insurance $290.9 5.9% Accommodation & Food Svcs $233.0 4.7% Trans./Ground Passenger $218.6 4.4% Assisted Living $133.1 2.7% Ag., Forestry, & Fishing $148.6 3.0% General Freight Trucking $240.6 4.9% Retail Trade $172.6 3.5% Wholesale Trade $98.3 2.0% Other Services $100.3 2.0% Commercial Loans and Leases by Industry Health Care $74.0 1.5%

 
26 Commercial Real Estate Portfolio by Collateral Type 26 CRE Concentration (as of June 30, 2023) CRE as a % of Total Loans 38.4% CRE as a % of Total Risk-Based Capital (1) 262.7% Notes: (1) Represents non-owner occupied CRE loans only Collateral type as a percentage of the Commercial Real Estate and Construction Portfolio with outstanding balances of $2.81 billion as of June 30, 2023 ($s in millions) Skilled Nursing $498.2 17.7% Retail $438.5 15.6% Multi-Family $451.7 16.1% Industrial/Warehouse $213.9 7.6% Assisted Living $161.4 5.7% Hotel/Motel $166.3 5.9% All Other $185.0 6.6% Office $153.2 5.5% Farmland $67.8 2.4% Residential 1-4 Family $85.9 3.1% Raw Land $17.1 0.6% Restaurant $38.7 1.4% Mixed Use/Other $70.6 2.5% Medical Building $110.3 3.9% Special Purpose $83.5 3.0% C-Store/Gas Station $68.5 2.4%

 
27 Capital Ratios and Strategy 27 • Capital initiatives increased CET1 to 8.03% from 7.77% at 12/31/22 with limited buybacks below TBV • Internal capital generated from strong profitability and slower balance sheet growth expected to raise TCE ratio to 7.00%-7.75% by the end of 2024 • Capital actions and strong profitability expected to enable MSBI to raise capital ratios while maintaining current dividend payout Capital Strategy Capital Ratios (as of June 30, 2023) 6.19% 8.03% 9.57% 10.47% 12.65% 11.01% 10.07% 11.01% 11.89% Consolidated Bank Level TCE/TA Common Eq. Tier 1 Tier 1 Leverage Tier 1 RBC Total RBC

 
2828 MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) Tangible Book Value Per Share For the Year Ended (dollars in thousands, except per share data) 2017 2018 2019 2020 2021 2022 Shareholders' Equity to Tangible Common Equity Total shareholders' equity—GAAP $ 449,545 $ 608,525 $ 661,911 $ 621,391 $ 663,837 $ 758,574 Adjustments: Preferred Stock (2,970) (2,781) — — — (110,548) Goodwill (98,624) (164,673) (171,758) (161,904) (161,904) (161,904) Other intangible assets, net (16,932) (37,376) (34,886) (28,382) (24,374) (20,866) Tangible common equity 331,019 403,695 455,267 431,105 477,559 465,256 Less: Accumulated other comprehensive income (AOCI) 1,758 (2,108) 7,442 11,431 5,237 (83,797) Tangible common equity excluding AOCI $ 329,261 $ 405,803 $ 447,825 $ 419,674 $ 472,322 $ 549,053 Common Shares Outstanding 19,122,049 23,751,798 24,420,345 22,325,471 22,050,537 22,214,913 Tangible Book Value Per Share $ 17.31 $ 17.00 $ 18.64 $ 19.31 $ 21.66 $ 20.94 Tangible Book Value Per Share excluding AOCI $ 17.22 $ 17.09 $ 18.34 $ 18.80 $ 21.42 $ 24.72

 
2929 MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) Adjusted Earnings Reconciliation For The Year Ended (dollars in thousands, except per share data) 2017 2018 2019 2020 2021 2022 Income before income taxes - GAAP $ 26,471 $ 50,805 $ 72,471 $ 32,014 $ 99,112 $ 129,838 Adjustments to noninterest income: (Gain) on sales of investment securities, net (222) (464) (674) (1,721) (537) 230 (Gain) on termination of hedged interest rate swaps — — — — (2,159) (17,531) Other income 67 (89) 29 17 (48) — Total adjustments to noninterest income (155) (553) (645) (1,704) (2,744) (17,301) Adjustments to noninterest expense: Impairment related to facilities optimization (1,952) — (3,577) (12,847) — — (Loss) gain on mortgage servicing rights held for sale (4,059) (458) 490 (1,692) (222) (3,250) FHLB advances prepayment fees — — — (4,872) (8,536) — Loss on repurchase of subordinated debt — — (1,778) (193) — — Integration and acquisition expenses (17,738) (24,015) (5,493) (2,309) (4,356) (347) Total adjustments to noninterest expense (23,749) (24,473) (10,358) (21,913) (13,114) (3,597) Adjusted earnings pre tax - non-GAAP 50,065 74,725 82,184 52,223 109,482 116,134 Adjusted earnings tax 15,170 17,962 19,358 12,040 26,261 27,113 Adjusted earnings - non-GAAP 34,895 56,763 62,826 40,183 83,221 89,021 Preferred stock dividends, net 83 141 46 — — 3,169 Adjusted earnings available to common shareholders $ 34,812 $ 56,622 $ 62,780 $ 40,183 $ 83,221 $ 85,852 Adjusted diluted earnings per common share $ 1.89 $ 2.39 $ 2.54 $ 1.70 $ 3.65 $ 3.79 Adjusted return on average tangible common equity 11.32 % 15.00 % 14.44 % 9.24 % 18.33 % 18.59 %

 
3030 MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) Adjusted Earnings Reconciliation For The Quarter Ended June 30, March 31, December 31, September 30, June 30, (dollars in thousands, except per share data) 2023 2023 2022 2022 2022 Income before income taxes - GAAP $ 28,820 $ 28,666 $ 43,902 $ 29,380 $ 29,167 Adjustments to noninterest income: Loss on sales of investment securities, net 869 648 — 129 101 (Gain) on termination of hedged interest rate swaps — — (17,531) — — (Gain) on repurchase of subordinated debt (676) — — — — Total adjustments to noninterest income 193 648 (17,531) 129 101 Adjustments to noninterest expense: (Loss) on mortgage servicing rights held for sale — — (3,250) — — Integration and acquisition expenses — — — 68 (324) Total adjustments to noninterest expense — — (3,250) 68 (324) Adjusted earnings pre tax - non-GAAP 29,013 29,314 29,621 29,441 29,592 Adjusted earnings tax 7,297 7,069 7,174 5,873 7,401 Adjusted earnings - non-GAAP 21,716 22,245 22,447 23,568 22,191 Preferred stock dividends 2,228 2,228 — — — Adjusted earnings available to common shareholders $ 19,488 $ 20,017 $ 22,447 $ 23,568 $ 22,191 Adjusted diluted earnings per common share $ 0.87 $ 0.88 $ 0.85 $ 1.04 $ 0.98 Adjusted return on average assets 1.10 % 1.15 % 1.13 % 1.22 % 1.21 % Adjusted return on average shareholders' equity 11.21 % 11.76 % 11.89 % 13.34 % 13.84 % Adjusted return on average tangible common equity 16.10 % 17.11 % 16.80 % 20.24 % 19.41 % Adjusted Pre-Tax, Pre-Provision Earnings Reconciliation For the Quarter Ended June 30, March 31, December 31, September 30, June 30, (dollars in thousands) 2023 2023 2022 2022 2022 Adjusted earnings pre tax - non-GAAP $ 29,013 $ 29,314 $ 29,621 $ 29,441 $ 29,592 Provision for credit losses 5,879 3,135 3,544 6,974 5,441 Impairment on commercial mortgage servicing rights — — — — 869 Adjusted pre-tax, pre-provision earnings - non-GAAP $ 34,892 $ 32,449 $ 33,165 $ 36,415 $ 35,902 Adjusted pre-tax, pre-provision return on average assets 1.76 % 1.67 % 1.68 % 1.89 % 1.95 %

 
3131 MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued) Efficiency Ratio Reconciliation For the Quarter Ended June 30, March 31, December 31, September 30, June 30, 2023 2023 2022 2022 2022 (dollars in thousands) Noninterest expense - GAAP $ 42,894 $ 44,482 $ 49,943 $ 43,496 $ 41,339 Loss on mortgage servicing rights held for sale — — (3,250) — — Integration and acquisition expenses — — — 68 (324) Adjusted noninterest expense $ 42,894 $ 44,482 $ 46,693 $ 43,564 $ 41,015 Net interest income - GAAP $ 58,840 $ 60,504 $ 63,550 $ 64,024 $ 61,334 Effect of tax-exempt income 195 244 286 307 321 Adjusted net interest income 59,035 60,748 63,836 64,331 61,655 Noninterest income - GAAP 18,753 15,779 33,839 15,826 14,613 Impairment on commercial mortgage servicing rights — — — — 869 Loss on sales of investment securities, net 869 648 — 129 101 (Gain) on termination of hedged interest rate swaps — — (17,531) — — (Gain) on repurchase of subordinated debt (676) — — — — Adjusted noninterest income 18,946 16,427 16,308 15,955 15,583 Adjusted total revenue $ 77,980 $ 77,175 $ 80,144 $ 80,286 $ 77,238 Efficiency ratio 55.01 % 57.64 % 58.26 % 54.26 % 53.10 %

 
3232 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) 2023 2023 2022 2022 2022 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) (77,797) (77,797) (83,797) (78,383) (53,097) Tangible common equity excluding AOCI $ 563,799 $ 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 Outstanding 21,854,800 22,111,454 22,214,913 22,074,740 22,060,255 Tangible Common Equity to Tangible Assets 6.19 % 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 Return on Average Tangible Common Equity (ROATCE) For the Quarter Ended June 30, March 31, December 31, September 30, June 30, (dollars in thousands) 2023 2023 2022 2022 2022 Net income available to common shareholders $ 19,347 $ 19,544 $ 29,703 $ 23,521 $ 21,883 Average total shareholders' equity—GAAP $ 776,791 $ 767,186 $ 749,183 $ 700,866 $ 643,004 Adjustments: Preferred Stock (110,548) (110,548) (110,548) (54,072) — Goodwill (161,904) (161,904) (161,904) (161,904) (161,904) Other intangible assets, net (18,937) (20,184) (21,504) (22,589) (22,570) Average tangible common equity $ 485,402 $ 474,550 $ 455,227 $ 462,301 $ 458,530 ROATCE 15.99 % 16.70 % 25.89 % 20.20 % 19.14 %