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FALSE000146602600014660262024-01-252024-01-25

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): January 25, 2024
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 January 25, 2024, Midland States Bancorp, Inc. (the “Company”) issued a press release announcing its financial results for the fourth quarter of 2023. The press release is attached as Exhibit 99.1.
Item 7.01. Regulation FD Disclosure.
On January 25, 2024, the Company made available on its website a slide presentation regarding the Company's fourth 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 January 25, 2024
Slide Presentation of Midland States Bancorp, Inc. regarding fourth 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: January 25, 2024
 By: /s/ Eric T. Lemke
    Eric T. Lemke
    Chief Financial Officer


EX-99.1 2 msbi-20231231exx991.htm EX-99.1 Document


EXHIBIT 99.1

Midland States Bancorp, Inc. Announces 2023 Fourth Quarter Results

Fourth Quarter 2023 Highlights:
•Net income available to common shareholders of $18.5 million, or $0.84 per diluted share
•Adjusted earnings available to common shareholders of $19.8 million, or $0.89 per diluted share
•Tangible book value per share increased 7.8% from prior quarter to $23.35
•Common equity tier 1 capital ratio improved to 8.40% from 8.07%
•Net interest margin of 3.21%, compared to 3.20% in prior quarter
•Efficiency ratio of 55.2% compared to 55.8% in prior quarter
Effingham, IL, January 25, 2024 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (Nasdaq: MSBI) (the “Company”) today reported net income available to common shareholders of $18.5 million, or $0.84 per diluted share, for the fourth quarter of 2023, compared to $9.2 million, or $0.41 per diluted share, for the third quarter of 2023. This also compares to net income available to common shareholders of $29.7 million, or $1.30 per diluted share, for the fourth quarter of 2022.
Financial results for the fourth quarter of 2023 included a $1.1 million gain on the sale of shares of VISA B stock, offset by $2.9 million of losses on the sale of investment securities. Results for the third quarter of 2023 included a $4.5 million tax charge related to the surrender of certain company-owned life insurance policies, and $5.0 million of losses on the sale of investment securities. Results for the fourth quarter of 2022 included a $17.5 million gain on the termination of forward starting interest rate swaps and a $3.3 million loss on commercial mortgage servicing rights held for sale.
Excluding these transactions, adjusted earnings available to common shareholders were $19.8 million and $17.3 million, or $0.89 and $0.78 per diluted share, for the fourth and third quarters of 2023, respectively. Adjusted earnings available to common shareholders for the fourth quarter of 2022 was $19.3 million or $0.85 per diluted share.
The Company revised its accounting for the one-time enhancement fee related to the surrender and purchase of company-owned life insurance policies acquired in the third quarter of 2023. As a result, the $6.6 million enhancement fee on the replacement policies that was previously recorded in income on company-owned life insurance in the third quarter of 2023 has been reversed. The revision did not have an impact on adjusted earnings (a non-GAAP financial measure) for that period. The Company reflected this revision in its September 30, 2023 quarter to date and December 31, 2023 year to date income on company-owned life insurance. Additionally, the revision impacts the company-owned life insurance asset for the applicable period.
Jeffrey G. Ludwig, President and Chief Executive Officer of the Company, said, “While continuing to prioritize prudent risk management, we delivered another quarter of strong financial results with a higher level of earnings and returns than the prior quarter, as well as a slight increase in our net interest margin and improvement in our efficiency ratio.
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Our strong financial performance and prudent balance sheet management helped us to achieve our objective to further increase our capital ratios, while we also had a 7.8% increase in tangible book value per share during the quarter.
“Our business development focus remains on high quality commercial relationships in our markets, and the new clients we are adding in our targeted areas helped to offset the intentional runoff of equipment finance and consumer loans. The new and expanded client relationships are also resulting in inflows of commercial deposits, which has enabled us to improve our overall deposit mix by running off higher cost time deposits.
“While we will remain conservative in our new loan production until economic conditions improve, we believe that we can continue to deliver strong financial performance for our shareholders, particularly given our relatively neutral interest rate sensitivity that positions us well for whatever rate environment we see going forward. We will remain disciplined in our expense management while also investing in areas that we believe will enhance the long-term value of our franchise. One area is our Wealth Management business, where we have made improvements to our technology platform that we believe will enhance our business development capabilities. A second area is expanding our presence in the higher growth St. Louis market where we recently added a new market president that we believe will help accelerate our efforts to add new commercial, retail and wealth management clients. And a third area is our Banking-as-a-Service initiative, which we expect to begin making a meaningful contribution to our deposit gathering and fee income during 2024 . Given the strength of the franchise we have built, we believe we are well positioned to continue delivering strong financial results in the near-term while continuing to operate with a long-term approach and executing on the strategies that we believe will further enhance shareholder value in the coming years,” said Mr. Ludwig.
Balance Sheet Highlights
Total assets were $7.87 billion at December 31, 2023, compared to $7.97 billion at September 30, 2023, and $7.86 billion at December 31, 2022. At December 31, 2023, portfolio loans were $6.13 billion, compared to $6.28 billion at September 30, 2023, and $6.31 billion at December 31, 2022.

Loans

During the fourth quarter of 2023, outstanding loans declined by $149.8 million, or 2.4%, from September 30, 2023, as the Company continued to originate loans in a more selective and deliberate approach to balance liquidity and funding costs. Increases in construction and land development loans, and residential real estate loans of $35.8 million and $5.4 million, respectively, were offset by decreases in all other loan categories. Equipment finance loan and lease balances decreased $59.9 million during the fourth quarter of 2023 as the Company continued to reduce its concentration of this product within the overall loan portfolio. Consumer loans decreased $84.8 million due to loan payoffs and a cessation in loans originated through GreenSky. Our Greensky-originated loan balances decreased $70.4 million during the fourth quarter to $688.0 million at December 31, 2023. In addition, during the fourth quarter, the Company ceased originating loans through LendingPoint. As of December 31, 2023, the Company had $121.0 million in loans that were originated through LendingPoint, which will continue to be serviced by LendingPoint.


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As of
December 31, September 30, June 30, March 31, December 31,
(in thousands) 2023 2023 2023 2023 2022
Loan Portfolio
Commercial loans $ 951,387  $ 943,761  $ 962,756  $ 937,920  $ 872,794 
Equipment finance loans 531,143  578,931  614,633  632,205  616,751 
Equipment finance leases 473,350  485,460  500,485  510,029  491,744 
Commercial FHA warehouse lines —  48,547  30,522  10,275  25,029 
Total commercial loans and leases 1,955,880  2,056,699  2,108,396  2,090,429  2,006,318 
Commercial real estate 2,406,845  2,412,164  2,443,995  2,448,158  2,433,159 
Construction and land development 452,593  416,801  366,631  326,836  320,882 
Residential real estate 380,583  375,211  371,486  369,910  366,094 
Consumer 935,178  1,020,008  1,076,836  1,118,938  1,180,014 
Total loans $ 6,131,079  $ 6,280,883  $ 6,367,344  $ 6,354,271  $ 6,306,467 
Loan Quality
Credit quality metrics declined this quarter compared the third quarter of 2023. Loans 30-89 days past due increased $36.2 million to $82.8 million as of December 31, 2023, compared to prior quarter end. Four commercial loans totaling $42.0 million accounted for this increase, of which $16.9 million was brought current in early January. Non-performing loans remained flat at $56.4 million at December 31, 2023, compared to $56.0 million as of September 30, 2023, and non-performing assets were 0.86% of total assets at the end of the fourth quarter of 2023, compared to 0.74% at September 30, 2023. An $8.7 million non-performing loan was transferred to OREO, and three commercial real estate loans totaling $9.0 million were placed on non-accrual in the fourth quarter of 2023.
At December 31, 2022, loans 30-89 days past due totaled $32.4 million, non-performing loans were $49.4 million, and non-performing assets as a percentage of total assets were 0.74%.
As of and for the Three Months Ended
(in thousands) December 31, September 30, June 30, March 31, December 31,
2023 2023 2023 2023 2022
Asset Quality
Loans 30-89 days past due $ 82,778  $ 46,608  $ 44,161  $ 30,895  $ 32,372 
Nonperforming loans 56,351  55,981  54,844  50,713  49,423 
Nonperforming assets 67,701  58,677  57,688  58,806  57,824 
Substandard loans 184,224  143,793  130,707  99,819  101,044 
Net charge-offs 5,117  3,449  2,996  2,119  538 
Loans 30-89 days past due to total loans 1.35  % 0.74  % 0.69  % 0.49  % 0.51  %
Nonperforming loans to total loans 0.92  % 0.89  % 0.86  % 0.80  % 0.78  %
Nonperforming assets to total assets 0.86  % 0.74  % 0.72  % 0.74  % 0.74  %
Allowance for credit losses to total loans 1.12  % 1.06  % 1.02  % 0.98  % 0.97  %
Allowance for credit losses to nonperforming loans 121.56  % 119.09  % 118.43  % 122.39  % 123.53  %
Net charge-offs to average loans 0.33  % 0.22  % 0.19  % 0.14  % 0.03  %
The Company continued to increase its allowance for credit losses on loans due to increased delinquencies and losses within our equipment finance portfolio. The allowance totaled $68.5 million at December 31, 2023, compared to $66.7 million at September 30, 2023, and $61.1 million at December 31, 2022.
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The allowance as a percentage of portfolio loans was 1.12% at December 31, 2023, compared to 1.06% at September 30, 2023, and 0.97% at December 31, 2022.
Deposits
Total deposits were $6.31 billion at December 31, 2023, compared with $6.41 billion at September 30, 2023 and $6.36 billion at December 31, 2022. The deposit mix continues to shift from noninterest-bearing deposits to interest-bearing deposits due to the rate increases announced by the Federal Reserve in 2023 and the expectation that rates will remain high for a longer period. Interest rate promotions offered during the fourth quarter of 2023 on money market deposit products contributed to the increase in balances of $44.7 million at December 31, 2023, compared to September 30, 2023.
As of
December 31, September 30, June 30, March 31, December 31,
(in thousands) 2023 2023 2023 2023 2022
Deposit Portfolio
Noninterest-bearing demand $ 1,145,395  $ 1,154,515  $ 1,162,909  $ 1,215,758  $ 1,362,158 
Interest-bearing:
Checking 2,511,840  2,572,224  2,499,693  2,502,827  2,494,073 
Money market 1,135,629  1,090,962  1,226,470  1,263,813  1,184,101 
Savings 559,267  582,359  624,005  636,832  661,932 
Time 862,865  885,858  840,734  766,884  649,552 
Brokered time 94,533  119,084  72,737  39,087  12,836 
Total deposits $ 6,309,529  $ 6,405,002  $ 6,426,548  $ 6,425,201  $ 6,364,652 
The Company estimates that uninsured deposits(1) totaled $1.22 billion, or 19% of total deposits, at December 31, 2023 compared to $1.28 billion, or 20% of total deposits, at September 30, 2023.
(1)    Uninsured deposits include the Call Report estimate of uninsured deposits less affiliate company deposits, estimated insured portion of servicing deposits, additional structured FDIC coverage and collateralized deposits.
Results of Operations Highlights
Net Interest Income and Margin
During the fourth quarter of 2023, net interest income, on a tax-equivalent basis, totaled $58.3 million, a decrease of $0.5 million, or 0.9%, compared to $58.8 million for the third quarter of 2023. The tax-equivalent net interest margin for the fourth quarter of 2023 was 3.21%, compared with 3.20% in the third quarter of 2023. Net interest income and related margin, on a tax-equivalent basis, was $63.8 million and 3.50%, respectively, in the fourth 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 yield on earning assets.
Average interest-earning assets for the fourth quarter of 2023 were $7.20 billion, compared to $7.28 billion for the third quarter of 2023. The yield increased 13 basis points to 5.78% compared to the third quarter of 2023. Interest-earning assets averaged $7.25 billion for the fourth quarter of 2022.
Average loans were $6.20 billion for the fourth quarter of 2023, compared to $6.30 billion for the third quarter of 2023 and $6.24 billion for the fourth quarter of 2022. The yield on loans was 6.00% and 5.93% for the fourth and third quarters of 2023, respectively.
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Investment securities averaged $883.2 million for the fourth quarter of 2023, and yielded 4.16%, compared to an average balance and yield of $863.0 million and 3.60%, respectively, for the third quarter of 2023. The Company purchased additional investments and repositioned out of lower-yielding securities in favor of higher-yielding instruments resulting in the increased average balance and yield. The Company incurred net losses on sales of investments of $2.9 million and $5.0 million in the fourth and third quarters of 2023, respectively. The repositioning is expected to improve the overall margin, liquidity, and capital allocations. Investment securities averaged $736.6 million for the fourth quarter of 2022.
Average interest-bearing deposits were $5.30 billion for the fourth quarter of 2023, compared to $5.35 billion for the third quarter of 2023, and $5.05 billion for the fourth quarter of 2022. Cost of interest-bearing deposits was 2.93% in the fourth quarter of 2023, which represented a 13 basis point increase from the third quarter of 2023. A competitive market, driven by rising interest rates and increased competition, contributed to the increase in deposit costs.
For the Three Months Ended
December 31, September 30, December 31,
(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 $ 77,363  $ 1,054  5.41  % $ 78,391  $ 1,036  5.24  % $ 220,938  $ 2,143  3.85  %
Investment securities 883,153  9,257  4.16  862,998  7,822  3.60  736,579  4,824  2.62 
Loans 6,196,362  93,757  6.00  6,297,568  94,118  5.93  6,240,277  82,810  5.26 
Loans held for sale 4,429  81  7.26  6,078  104  6.80  3,883  47  4.86 
Nonmarketable equity securities 41,192  715  6.89  39,347  710  7.16  43,618  677  6.16 
Total interest-earning assets $ 7,202,499  $ 104,864  5.78  % $ 7,284,382  $ 103,790  5.65  % $ 7,245,295  $ 90,501  4.96  %
Noninterest-earning assets 695,293  622,969  609,866 
Total assets $ 7,897,792  $ 7,907,351  $ 7,855,161 
Interest-Bearing Liabilities
Interest-bearing deposits $ 5,295,296  $ 39,156  2.93  % $ 5,354,356  $ 37,769  2.80  % $ 5,053,158  $ 19,841  1.56  %
Short-term borrowings 13,139  15  0.47  20,127  14  0.28  47,391  31  0.26 
FHLB advances & other borrowings 430,207  4,750  4.38  402,500  4,557  4.49  460,598  4,264  3.67 
Subordinated debt 93,512  1,281  5.43  93,441  1,280  5.43  107,374  1,463  5.45 
Trust preferred debentures 50,541  1,402  11.00  50,379  1,369  10.78  49,902  1,066  8.47 
Total interest-bearing liabilities $ 5,882,695  $ 46,604  3.14  % $ 5,920,803  $ 44,989  3.01  % $ 5,718,423  $ 26,665  1.85  %
Noninterest-bearing deposits 1,142,062  1,116,988  1,336,620 
Other noninterest-bearing liabilities 108,245  97,935  50,935 
Shareholders’ equity 764,790  771,625  749,183 
Total liabilities and shareholder’s equity $ 7,897,792  $ 7,907,351  $ 7,855,161 
Net Interest Margin $ 58,260  3.21  % $ 58,801  3.20  % $ 63,836  3.50  %
Cost of Deposits 2.41  % 2.32  % 1.23  %

(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, $0.2 million and $0.3 million for the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, respectively.

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For the year ended December 31, 2023, net interest income, on a tax-equivalent basis, decreased to $236.8 million, with a tax-equivalent net interest margin of 3.26%, compared to net interest income, on a tax-equivalent basis, of $247.0 million, and a tax-equivalent net interest margin of 3.57% for the year ended December 31, 2022.
The yield on earning assets increased 119 basis points to 5.57% for the year ended December 31, 2023 compared to prior year. However, the cost of interest-bearing liabilities increased at a faster rate during this period, increasing 183 basis points to 2.87% for the year ended December 31, 2023.
For the Years Ended
December 31, December 31,
(dollars in thousands) 2023 2022
Interest-earning assets Average Balance Interest & Fees Yield/Rate Average Balance Interest & Fees Yield/Rate
Cash and cash equivalents $ 77,046  $ 3,922  5.09  % $ 256,221  $ 3,907  1.52  %
Investment securities 854,576  30,361  3.55  799,218  19,277  2.41 
Loans 6,292,260  367,762  5.84  5,811,403  277,252  4.77 
Loans held for sale 4,034  260  6.45  12,669  404  3.19 
Nonmarketable equity securities 43,318  2,819  6.51  38,543  2,198  5.70 
Total interest-earning assets $ 7,271,234  $ 405,124  5.57  % $ 6,918,054  $ 303,038  4.38  %
Noninterest-earning assets 635,490  618,593 
Total assets $ 7,906,724  $ 7,536,647 
Interest-Bearing Liabilities
Interest-bearing deposits $ 5,241,723  $ 136,947  2.61  % $ 4,802,130  $ 36,061  0.75  %
Short-term borrowings 23,406  68  0.29  58,688  104  0.18 
FHLB advances & other borrowings 460,781  20,709  4.49  355,282  9,335  2.63 
Subordinated debt 95,986  5,266  5.49  131,203  7,495  5.71 
Trust preferred debentures 50,298  5,289  10.52  49,678  3,025  6.09 
Total interest-bearing liabilities $ 5,872,194  $ 168,279  2.87  % $ 5,396,981  $ 56,020  1.04  %
Noninterest-bearing deposits 1,173,873  1,386,251 
Other noninterest-bearing liabilities 90,562  65,539 
Shareholders’ equity 770,095  687,876 
Total liabilities and shareholders’ equity $ 7,906,724  $ 7,536,647 
Net Interest Margin $ 236,845  3.26  % $ 247,018  3.57  %
Cost of Deposits 2.13  % 0.58  %

(1)Interest income and average rates for tax-exempt loans and investment securities are presented on a tax-equivalent basis, assuming a federal income tax rate of 21%. Tax-equivalent adjustments totaled $0.8 million and $1.3 million for the years ended December 31, 2023 and 2022, respectively.
Noninterest Income
Noninterest income was $20.5 million for the fourth quarter of 2023, compared to $11.5 million for the third quarter of 2023. Noninterest income for the fourth quarter of 2023 included incremental servicing revenues of $2.2 million and $1.6 million related to our commercial FHA servicing portfolio and the Greensky portfolio, respectively. Also included was a $1.1 million one-time gain from the sale of Visa B stock, offset by $2.9 million of losses on the sale of investment securities. The third quarter of 2023 included $5.0 million of losses on the sale of investment securities. Excluding these transactions, noninterest income for the fourth quarter of 2023 and the third quarter of 2023 was $18.5 million and $16.5 million, respectively.
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Noninterest income for the fourth quarter of 2022 was $33.8 million and included $17.5 million gain on the termination of hedged interest rate swaps.
For the Three Months Ended For the Years Ended
December 31, September 30, December 31, December 31, December 31,
(in thousands) 2023
2023(1)
 2022 2023 2022
Noninterest income
Wealth management revenue $ 6,604  $ 6,288  $ 6,227  $ 25,572  $ 25,708 
Residential mortgage banking revenue 451  507  316  1,903  1,509 
Service charges on deposit accounts 3,246  3,149  2,879  11,990  10,237 
Interchange revenue 3,585  3,609  3,478  14,302  13,879 
Income on company-owned life insurance 1,753  918  796  4,439  3,584 
Loss on sales of investment securities, net (2,894) (4,961) —  (9,372) (230)
Gain (loss) on sales of other real estate owned, net 6  —  —  825  (118)
Gain on termination of hedged interest rate swaps —  —  17,531  —  17,531 
Gain on repurchase of subordinated debt, net —  —  —  676  — 
Impairment on commercial mortgage servicing rights —  —  —  —  (1,263)
Other income 7,762  2,035  2,612  16,255  9,054 
Total noninterest income $ 20,513  $ 11,545  $ 33,839  $ 66,590  $ 79,891 
(1) September 30, 2023 amounts include the impact of the revision previously mentioned in this earnings release.
Noninterest Expense
Noninterest expense was $44.5 million in the fourth quarter of 2023, compared to $42.0 million in the third quarter of 2023, and $49.9 million in the fourth quarter of 2022. The efficiency ratio improved to 55.22% for the quarter ended December 31, 2023, compared to 55.82% for the quarter ended September 30, 2023, and 58.26% for the quarter ended December 31, 2022.
For the Three Months Ended For the Years Ended
December 31, September 30, December 31, December 31, December 31,
(in thousands) 2023 2023 2022 2023 2022
Noninterest expense
Salaries and employee benefits $ 24,031  $ 22,307  $ 22,901  $ 93,438  $ 90,305 
Occupancy and equipment 3,934  3,730  3,748  15,986  14,842 
Data processing 6,963  6,468  6,302  26,286  24,350 
Professional 2,072  1,554  1,726  7,049  6,907 
Amortization of intangible assets 1,130  1,129  1,333  4,758  5,410 
Other real estate owned 8  —  3,779  333  5,188 
Loss on mortgage servicing rights held for sale
 —  —  3,250  —  3,250 
FDIC insurance 1,147  1,107  703  4,779  3,336 
Other expense 5,203  5,743  6,201  21,273  22,074 
Total noninterest expense $ 44,488  $ 42,038  $ 49,943  $ 173,902  $ 175,662 
Salaries and employee benefits expenses were $24.0 million in the fourth quarter of 2023, compared to $22.3 million in the third quarter of 2023 and $22.9 million in the fourth quarter of 2022. The Company recognized a $1.1 million benefit related to claiming the Employees Retention Tax Credit in the fourth quarter of 2023. This was offset by increased incentive and performance-based expense accruals and increased medical costs of $1.7 million and $0.6 million, respectively.
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Employees numbered 914 at December 31, 2023, compared to 911 at September 30, 2023, and 935 at December 31, 2022.
Income Tax Expense
Income tax expense was $6.4 million for the fourth quarter of 2023, as compared to $11.5 million for the third quarter of 2023 and $11.0 million for the fourth quarter of 2022. The resulting effective tax rates were 23.7%, 50.3% and 25.1% respectively. The third quarter of 2023 included tax charges of $4.5 million associated with the surrender of certain company-owned life insurance policies and $1.4 million related to the finalization of the 2022 federal and state tax returns. Exclusive of these items our effective tax rate was 24.6% for the third quarter of 2023.
Capital
At December 31, 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 December 31, 2023
Midland States Bank Midland States Bancorp, Inc.
Minimum Regulatory Requirements (2)
Total capital to risk-weighted assets 12.40% 13.20% 10.50%
Tier 1 capital to risk-weighted assets 11.44% 10.91% 8.50%
Tier 1 leverage ratio 10.18% 9.71% 4.00%
Common equity Tier 1 capital 11.44% 8.40% 7.00%
Tangible common equity to tangible assets (1)
 N/A 6.55% N/A
(1) A non-GAAP financial measure. Refer to page 15 for a reconciliation to the comparable GAAP financial measure.
(2) Includes the capital conservation buffer of 2.5%.
The impact of rising interest rates on the Company’s investment portfolio and cash flow hedges resulted in a $76.8 million accumulated other comprehensive loss at December 31, 2023, which reduces tangible book value by $3.56 per share.
Stock Repurchase Program
On December 5, 2023, the Company’s board of directors authorized a new share repurchase program, pursuant to which the Company is authorized to repurchase up to $25.0 million of common stock through December 31, 2024. The new stock repurchase program became effective on January 1, 2024. The Company’s previous stock repurchase program expired on December 31, 2023. During the fourth quarter of 2023, the Company repurchased 135,685 shares of its common stock at a weighted average price of $21.11 under its stock repurchase program.
About Midland States Bancorp, Inc.
Midland States Bancorp, Inc. is a community-based financial holding company headquartered in Effingham, Illinois, and is the sole shareholder of Midland States Bank. As of December 31, 2023, the Company had total assets of approximately $7.87 billion, and its Wealth Management Group had assets under administration of approximately $3.73 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.
8

Non-GAAP Financial Measures
Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with GAAP.
These non-GAAP financial measures include “Adjusted Earnings,” “Adjusted Earnings Available to Common Shareholders,” “Adjusted Diluted Earnings Per Common Share,” “Adjusted Return on Average Assets,” “Adjusted Return on Average Shareholders’ Equity,” “Adjusted Return on Average Tangible Common Equity,” “Adjusted Pre-Tax, Pre-Provision Earnings,” “Adjusted Pre-Tax, Pre-Provision Return on Average Assets,” “Efficiency Ratio,” “Tangible Common Equity to Tangible Assets,” “Tangible Book Value Per Share,” “Tangible Book Value Per Share excluding Accumulated Other Comprehensive Income,” and “Return on Average Tangible Common Equity.” The Company believes these non-GAAP financial measures provide both management and investors a more complete understanding of the Company’s funding profile and profitability. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures. Not all companies use the same calculation of these measures; therefore, the measures in this press release may not be comparable to other similarly titled measures as presented by other companies.
Forward-Looking Statements
Readers should note that in addition to the historical information contained herein, this press release includes "forward-looking statements" within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including but not limited to statements about the Company’s plans, objectives, future performance, goals and future earnings levels. These statements are subject to many risks and uncertainties, including changes in interest rates and other general economic, business and political conditions, the impact of inflation, continuing effects of the failures of Silicon Valley Bank and Signature Bank, increased deposit volatility and potential regulatory developments; changes in the financial markets; changes in business plans as circumstances warrant; risks relating to acquisitions; changes to U.S. tax laws, regulations and guidance; and other risks detailed from time to time in filings made by the Company with the Securities and Exchange Commission. Readers should note that the forward-looking statements included in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "will," "propose," "may," "plan," "seek," "expect," "intend," "estimate," "anticipate," "believe," "continue," or similar terminology. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.
CONTACTS:
Jeffrey G. Ludwig, President and CEO, at jludwig@midlandsb.com or (217) 342-7321
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
9

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited)
As of and for the Three Months Ended
As of and
for the Years Ended
December 31, September 30, December 31, December 31, December 31,
(dollars in thousands, except per share data) 2023
2023(2)
 2022 2023 2022
Earnings Summary
Net interest income $ 58,077  $ 58,596  $ 63,550  $ 236,017  $ 245,735 
Provision for credit losses 6,950  5,168  3,544  21,132  20,126 
Noninterest income 20,513  11,545  33,839  66,590  79,891 
Noninterest expense 44,488  42,038  49,943  173,902  175,662 
Income before income taxes 27,152  22,935  43,902  107,573  129,838 
Income taxes 6,441  11,533  11,030  32,113  30,813 
Net income 20,711  11,402  32,872  75,460  99,025 
Preferred dividends 2,228  2,229  3,169  8,913  3,169 
Net income available to common shareholders $ 18,483  $ 9,173  $ 29,703  $ 66,547  $ 95,856 
Diluted earnings per common share $ 0.84  $ 0.41  $ 1.30  $ 2.97  $ 4.23 
Weighted average common shares outstanding - diluted 21,822,328  21,977,196  22,503,611  22,124,402  22,395,698 
Return on average assets 1.04  % 0.57  % 1.66  % 0.95  % 1.31  %
Return on average shareholders' equity 10.74  % 5.86  % 17.41  % 9.80  % 14.40  %
Return on average tangible common equity (1)
 15.41  % 7.56  % 25.89  % 13.89  % 20.76  %
Net interest margin 3.21  % 3.20  % 3.50  % 3.26  % 3.57  %
Efficiency ratio (1)
 55.22  % 55.82  % 58.26  % 55.91  % 55.35  %
Adjusted Earnings Performance Summary (1)
Adjusted earnings available to common shareholders $ 19,793  $ 17,278  $ 19,278  $ 76,576  $ 85,852 
Adjusted diluted earnings per common share $ 0.89  $ 0.78  $ 0.85  $ 3.42  $ 3.79 
Adjusted return on average assets 1.11  % 0.98  % 1.13  % 1.08  % 1.18  %
Adjusted return on average shareholders' equity 11.42  % 10.03  % 11.89  % 11.10  % 12.94  %
Adjusted return on average tangible common equity 16.51  % 14.24  % 16.80  % 15.98  % 18.59  %
Adjusted pre-tax, pre-provision earnings $ 35,898  $ 33,064  $ 33,165  $ 136,303  $ 137,523 
Adjusted pre-tax, pre-provision return on average assets 1.80  % 1.66  % 1.68  % 1.72  % 1.82  %
Market Data
Book value per share at period end $ 31.61  $ 29.96  $ 29.17 
Tangible book value per share at period end (1)
 $ 23.35  $ 21.67  $ 20.94 
Tangible book value per share excluding accumulated other comprehensive income at period end (1)
 $ 26.91  $ 26.35  $ 24.72 
Market price at period end $ 27.56  $ 20.54  $ 26.62 
Common shares outstanding at period end 21,551,402  21,594,546  22,214,913 
Capital
Total capital to risk-weighted assets 13.20  % 12.76  % 12.38  %
Tier 1 capital to risk-weighted assets 10.91  % 10.53  % 10.21  %
Tier 1 common capital to risk-weighted assets 8.40  % 8.07  % 7.77  %
Tier 1 leverage ratio 9.71  % 9.59  % 9.43  %
Tangible common equity to tangible assets (1)
 6.55  % 6.01  % 6.06  %
Wealth Management
Trust assets under administration $ 3,733,355  $ 3,501,225  $ 3,505,372 
(1) Non-GAAP financial measures. Refer to pages 13 - 15 for a reconciliation to the comparable GAAP financial measures.
(2) September 30, 2023 amounts include the impact of the revision previously mentioned in this earnings release.
10

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
As of
December 31, September 30, June 30, March 31, December 31,
(in thousands) 2023
2023(1)
 2023 2023 2022
Assets
Cash and cash equivalents $ 135,061  $ 132,132  $ 160,695  $ 138,310  $ 160,631 
Investment securities 920,396  839,344  887,003  821,005  776,860 
Loans 6,131,079  6,280,883  6,367,344  6,354,271  6,306,467 
Allowance for credit losses on loans (68,502) (66,669) (64,950) (62,067) (61,051)
Total loans, net 6,062,577  6,214,214  6,302,394  6,292,204  6,245,416 
Loans held for sale 3,811  6,089  5,632  2,747  1,286 
Premises and equipment, net 82,814  82,741  81,006  80,582  78,293 
Other real estate owned 9,112  480  202  6,729  6,729 
Loan servicing rights, at lower of cost or fair value 20,253  20,933  21,611  1,117  1,205 
Commercial FHA mortgage loan servicing rights held for sale —  —  —  20,745  20,745 
Goodwill 161,904  161,904  161,904  161,904  161,904 
Other intangible assets, net 16,108  17,238  18,367  19,575  20,866 
Company-owned life insurance 203,485  201,750  152,210  151,319  150,443 
Other assets 251,347  292,460  243,697  233,937  231,123 
Total assets $ 7,866,868  $ 7,969,285  $ 8,034,721  $ 7,930,174  $ 7,855,501 
Liabilities and Shareholders' Equity
Noninterest-bearing demand deposits $ 1,145,395  $ 1,154,515  $ 1,162,909  $ 1,215,758  $ 1,362,158 
Interest-bearing deposits 5,164,134  5,250,487  5,263,639  5,209,443  5,002,494 
Total deposits 6,309,529  6,405,002  6,426,548  6,425,201  6,364,652 
Short-term borrowings 34,865  17,998  21,783  31,173  42,311 
FHLB advances and other borrowings 476,000  538,000  575,000  482,000  460,000 
Subordinated debt 93,546  93,475  93,404  99,849  99,772 
Trust preferred debentures 50,616  50,457  50,296  50,135  49,975 
Other liabilities 110,459  106,743  90,869  66,173  80,217 
Total liabilities 7,075,015  7,211,675  7,257,900  7,154,531  7,096,927 
Total shareholders’ equity 791,853  757,610  776,821  775,643  758,574 
Total liabilities and shareholders’ equity $ 7,866,868  $ 7,969,285  $ 8,034,721  $ 7,930,174  $ 7,855,501 
(1) September 30, 2023 amounts include the impact of the revision previously mentioned in this earnings release.
11

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
For the Three Months Ended For the Years Ended
December 31, September 30, December 31, December 31, December 31,
(in thousands, except per share data) 2023
2023(1)
 2022 2023 2022
Net interest income:
Interest income $ 104,681  $ 103,585  $ 90,215  $ 404,296  $ 301,755 
Interest expense 46,604  44,989  26,665  168,279  56,020 
Net interest income 58,077  58,596  63,550  236,017  245,735 
Provision for credit losses:
Provision for credit losses on loans 6,950  5,168  2,950  21,132  18,797 
Provision for credit losses on unfunded commitments —  —  594  —  1,550 
Provision for other credit losses —  —  —  —  (221)
Total provision for credit losses 6,950  5,168  3,544  21,132  20,126 
Net interest income after provision for credit losses 51,127  53,428  60,006  214,885  225,609 
Noninterest income:
Wealth management revenue 6,604  6,288  6,227  25,572  25,708 
Residential mortgage banking revenue 451  507  316  1,903  1,509 
Service charges on deposit accounts 3,246  3,149  2,879  11,990  10,237 
Interchange revenue 3,585  3,609  3,478  14,302  13,879 
Income on company-owned life insurance 1,753  918  796  4,439  3,584 
Loss on sales of investment securities, net (2,894) (4,961) —  (9,372) (230)
Gain (loss) on sales of other real estate owned, net 6  —  —  825  (118)
Gain on termination of hedged interest rate swaps —  —  17,531  —  17,531 
Gain on repurchase of subordinated debt, net —  —  —  676  — 
Impairment on commercial mortgage servicing rights —  —  —  —  (1,263)
Other income 7,762  2,035  2,612  16,255  9,054 
Total noninterest income 20,513  11,545  33,839  66,590  79,891 
Noninterest expense:
Salaries and employee benefits 24,031  22,307  22,901  93,438  90,305 
Occupancy and equipment 3,934  3,730  3,748  15,986  14,842 
Data processing 6,963  6,468  6,302  26,286  24,350 
Professional 2,072  1,554  1,726  7,049  6,907 
Amortization of intangible assets 1,130  1,129  1,333  4,758  5,410 
Other real estate owned 8  —  3,779  333  5,188 
Loss on mortgage servicing rights held for sale —  —  3,250  —  3,250 
FDIC insurance 1,147  1,107  703  4,779  3,336 
Other expense 5,203  5,743  6,201  21,273  22,074 
Total noninterest expense 44,488  42,038  49,943  173,902  175,662 
Income before income taxes 27,152  22,935  43,902  107,573  129,838 
Income taxes 6,441  11,533  11,030  32,113  30,813 
Net income 20,711  11,402  32,872  75,460  99,025 
Preferred stock dividends 2,228  2,229  3,169  8,913  3,169 
Net income available to common shareholders $ 18,483  $ 9,173  $ 29,703  $ 66,547  $ 95,856 
Basic earnings per common share $ 0.84  $ 0.41  $ 1.31  $ 2.97  $ 4.24 
Diluted earnings per common share $ 0.84  $ 0.41  $ 1.30  $ 2.97  $ 4.23 
(1) September 30, 2023 amounts include the impact of the revision previously mentioned in this earnings release.
12

MIDLAND STATES BANCORP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited)
Adjusted Earnings Reconciliation
For the Three Months Ended For the Years Ended
December 31, September 30, December 31, December 31, December 31,
(dollars in thousands, except per share data) 2023
2023(1)
 2022 2023 2022
Income before income taxes - GAAP $ 27,152  $ 22,935  $ 43,902  $ 107,573  $ 129,838 
Adjustments to noninterest income:
Loss on sales of investment securities, net 2,894  4,961  —  9,372  230 
(Gain) on termination of hedged interest rate swaps —  —  (17,531) —  (17,531)
(Gain) on sale of Visa B shares (1,098) —  —  (1,098) — 
(Gain) on repurchase of subordinated debt —  —  —  (676) — 
Total adjustments to noninterest income 1,796  4,961  (17,531) 7,598  (17,301)
Adjustments to noninterest expense:
(Loss) on mortgage servicing rights held for sale —  —  (3,250) —  (3,250)
Integration and acquisition expenses —  —  —  —  (347)
Total adjustments to noninterest expense —  —  (3,250) —  (3,597)
Adjusted earnings pre tax - non-GAAP 28,948  27,896  29,621  115,171  116,134 
Adjusted earnings tax 6,927  8,389  7,174  29,682  27,113 
Adjusted earnings - non-GAAP 22,021  19,507  22,447  85,489  89,021 
Preferred stock dividends 2,228  2,229  3,169  8,913  3,169 
Adjusted earnings available to common shareholders $ 19,793  $ 17,278  $ 19,278  $ 76,576  $ 85,852 
Adjusted diluted earnings per common share $ 0.89  $ 0.78  $ 0.85  $ 3.42  $ 3.79 
Adjusted return on average assets 1.11  % 0.98  % 1.13  % 1.08  % 1.18  %
Adjusted return on average shareholders' equity 11.42  % 10.03  % 11.89  % 11.10  % 12.94  %
Adjusted return on average tangible common equity 16.51  % 14.24  % 16.80  % 15.98  % 18.59  %
(1) September 30, 2023 amounts include the impact of the revision previously mentioned in this earnings release.
Adjusted Pre-Tax, Pre-Provision Earnings Reconciliation
For the Three Months Ended For the Years Ended
December 31, September 30, December 31, December 31, December 31,
(dollars in thousands) 2023 2023 2022 2023 2022
Adjusted earnings pre tax - non-GAAP $ 28,948  $ 27,896  $ 29,621  $ 115,171  $ 116,134 
Provision for credit losses 6,950  5,168  3,544  21,132  20,126 
Impairment on commercial mortgage servicing rights —  —  —  —  1,263 
Adjusted pre-tax, pre-provision earnings - non-GAAP $ 35,898  $ 33,064  $ 33,165  $ 136,303  $ 137,523 
Adjusted pre-tax, pre-provision return on average assets 1.80  % 1.66  % 1.68  % 1.72  % 1.82  %

13

MIDLAND STATES BANCORP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued)
Efficiency Ratio Reconciliation
For the Three Months Ended For the Years Ended
December 31, September 30, December 31, December 31, December 31,
(dollars in thousands) 2023
2023(1)
 2022 2023 2022
Noninterest expense - GAAP $ 44,488  $ 42,038  $ 49,943  $ 173,902  $ 175,662 
Loss on mortgage servicing rights held for sale —  —  (3,250) —  (3,250)
Integration and acquisition expenses —  —  —  —  (347)
Adjusted noninterest expense $ 44,488  $ 42,038  $ 46,693  $ 173,902  $ 172,065 
Net interest income - GAAP $ 58,077  $ 58,596  $ 63,550  $ 236,017  $ 245,735 
Effect of tax-exempt income 183  205  286  828  1,283 
Adjusted net interest income 58,260  58,801  63,836  236,845  247,018 
Noninterest income - GAAP 20,513  11,545  33,839  66,590  79,891 
Impairment on commercial mortgage servicing rights —  —  —  —  1,263 
Loss on sales of investment securities, net 2,894  4,961  —  9,372  230 
(Gain) on termination of hedged interest rate swaps —  —  (17,531) —  (17,531)
(Gain) on repurchase of subordinated debt —  —  —  (676) — 
(Gain) on sale of Visa B shares (1,098) —  —  (1,098) — 
Adjusted noninterest income 22,309  16,506  16,308  74,188  63,853 
Adjusted total revenue $ 80,569  $ 75,307  $ 80,144  $ 311,033  $ 310,871 
Efficiency ratio 55.22  % 55.82  % 58.26  % 55.91  % 55.35  %
Return on Average Tangible Common Equity (ROATCE)
For the Three Months Ended For the Years Ended
December 31, September 30, December 31, December 31, December 31,
(dollars in thousands) 2023
2023(1)
 2022 2023 2022
Net income available to common shareholders $ 18,483  $ 9,173  $ 29,703  $ 66,547  $ 95,856 
Average total shareholders' equity—GAAP $ 764,790  $ 771,625  $ 749,183  $ 770,095  $ 687,876 
Adjustments:
Preferred Stock (110,548) (110,548) (110,548) (110,548) (41,493)
Goodwill (161,904) (161,904) (161,904) (161,904) (161,904)
Other intangible assets, net (16,644) (17,782) (22,859) (18,376) (22,637)
Average tangible common equity $ 475,694  $ 481,391  $ 453,872  $ 479,267  $ 461,842 
ROATCE 15.41  % 7.56  % 25.89  % 13.89  % 20.76  %
(1) September 30, 2023 amounts include the impact of the revision previously mentioned in this earnings release.
14

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
December 31, September 30, June 30, March 31, December 31,
(dollars in thousands, except per share data) 2023
2023(1)
 2023 2023 2022
Shareholders' Equity to Tangible Common Equity
Total shareholders' equity—GAAP $ 791,853  $ 757,610  $ 776,821  $ 775,643  $ 758,574 
Adjustments:
Preferred Stock (110,548) (110,548) (110,548) (110,548) (110,548)
Goodwill (161,904) (161,904) (161,904) (161,904) (161,904)
Other intangible assets, net (16,108) (17,238) (18,367) (19,575) (20,866)
Tangible common equity 503,293  467,920  486,002  483,616  465,256 
Less: Accumulated other comprehensive income (AOCI) (76,753) (101,181) (84,719) (77,797) (83,797)
Tangible common equity excluding AOCI $ 580,046  $ 569,101  $ 570,721  $ 561,413  $ 549,053 
Total Assets to Tangible Assets:
Total assets—GAAP $ 7,866,868  $ 7,969,285  $ 8,034,721  $ 7,930,174  $ 7,855,501 
Adjustments:
Goodwill (161,904) (161,904) (161,904) (161,904) (161,904)
Other intangible assets, net (16,108) (17,238) (18,367) (19,575) (20,866)
Tangible assets $ 7,688,856  $ 7,790,143  $ 7,854,450  $ 7,748,695  $ 7,672,731 
Common Shares Outstanding 21,551,402  21,594,546  21,854,800  22,111,454  22,214,913 
Tangible Common Equity to Tangible Assets 6.55  % 6.01  % 6.19  % 6.24  % 6.06  %
Tangible Book Value Per Share $ 23.35  $ 21.67  $ 22.24  $ 21.87  $ 20.94 
Tangible Book Value Per Share, excluding AOCI $ 26.91  $ 26.35  $ 26.11  $ 25.39  $ 24.72 
(1) September 30, 2023 amounts include the impact of the revision previously mentioned in this earnings release.
15
EX-99.2 3 msbi20231231ex992.htm EX-99.2 msbi20231231ex992
1 Midland States Bancorp, Inc. NASDAQ: MSBI Fourth 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 failures of Silicon Valley Bank and Signature Bank, 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 • $7.9 billion in assets • $3.7 billion 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 December 31, 2023 $7.9 Billion Total Assets $6.1 Billion Total Loans $6.3 Billion Total Deposits $3.7 Billion Assets Under Administration YTD Adjusted ROAA(1): 1.08% YTD Adjusted Return on TCE(1): 15.98% TCE/TA: 6.55% YTD PTPP(1) ROAA: 1.72% Dividend Yield: 4.35 % Price/Tangible Book: 1.18x Price/LTM EPS: 9.3x 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 $7.9 Selected Acquisitions 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 CAG R si nce 201 6 IP O: 1 4% CAGR: 15% 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 $23.35 $17.22 $17.09 $18.34 $18.80 $21.42 $24.72 $26.91 Tangible Book Value Per Share TBV/Share ex. AOCI 2017 2018 2019 2020 2021 2022 2023 TBV/Share ex. AOCI CAGR: 7.7% Dividends Declared Per Share $0.80 $0.88 $0.97 $1.07 $1.12 $1.16 $1.20 2017 2018 2019 2020 2021 2022 2023 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: 10.4% Adjusted ROATCE(1) 11.32% 15.00% 14.44% 9.24% 18.33% 18.59% 15.98% 2017 2018 2019 2020 2021 2022 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 $3.42 2017 2018 2019 2020 2021 2022 2023

 
8 Overview of 4Q23 Strong Financial Performance Increase in Capital Ratios and TBV Continued Success in Developing Full Banking Relationships with Attractive Commercial Clients Positive Trends in Key Metrics 8 • Net income and level of returns increased from the prior quarter • Net income available to common shareholders of $18.5 million, or $0.84 diluted EPS • Pre-tax, pre-provision earnings(1) of $35.9 million • ROAA of 1.04% and ROTCE of 15.41% • Strong financial performance and prudent balance sheet management resulted in increases in all capital ratios • CET1 ratio increased 33bps to 8.40% • Tangible book value per share increased 7.8% during fourth quarter • Selective approach to new loan production in current environment with focus on clients that provide full banking relationships • New commercial loans partially offset continued runoff in GreenSky portfolio and the intentional reduction in equipment finance loans • New and expanded client relationships resulting in inflows of commercial deposits and improving overall deposit mix as balances of higher cost time deposits are reduced • Net interest margin increased to 3.21% • Efficiency ratio improved from the prior quarter • Wealth management AUA and fees increased from prior quarter Notes: (1) Represents a non-GAAP financial measure. See “Non-GAAP Reconciliation” in the appendix.

 
9 Loan Portfolio 9 • Total loans decreased $149.8 million from prior quarter to $6.13 billion • Decrease primarily driven by decline in equipment finance portfolio of $59.9 million, continued runoff of GreenSky portfolio of $70.4 million, and lower balances on commercial FHA warehouse lines • Decrease in non-core portfolios partially offset by new loan production from high quality commercial clients that provide full banking relationships • Consumer loan originations through LendingPoint partnership have been terminated as new loan production is focused on in-market commercial relationships Loan Portfolio Mix (in millions, as of quarter-end) 4Q 2023 3Q 2023 4Q 2022 Commercial loans and leases $ 1,956 $ 2,057 $ 2,006 Commercial real estate 2,407 2,412 2,433 Construction and land development 453 417 321 Residential real estate 380 375 366 Consumer 935 1,020 1,180 Total Loans $ 6,131 $ 6,281 $ 6,306 Total Loans ex. Commercial FHA Lines $ 6,131 $ 6,232 $ 6,280 $6,306 $6,354 $6,367 $6,281 $6,131 5.26% 5.65% 5.80% 5.93% 6.00% Total Loans Average Loan Yield 4Q 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023 Total Loans and Average Loan Yield (in millions, as of quarter-end)

 
10 Total Deposits 10 • Total deposits decreased $95.5 million from end of prior quarter, primarily due to seasonal outflows from public funds and servicing deposits • Noninterest-bearing deposits relatively stable as continued movement of funds into interest-bearing accounts was offset by new commercial and small business relationships • New and expanded client relationships resulting in inflows of commercial deposits that enabled the reduction of higher cost time deposits, resulting in an improvement in the overall deposit mix Deposit Mix (in millions, as of quarter-end) 4Q 2023 3Q 2023 4Q 2022 Noninterest-bearing demand $ 1,145 $ 1,155 $ 1,362 Interest-bearing: Checking $ 2,512 $ 2,572 $ 2,494 Money market $ 1,136 $ 1,091 $ 1,184 Savings $ 559 $ 582 $ 662 Time $ 863 $ 886 $ 650 Brokered time $ 95 $ 119 $ 13 Total Deposits $ 6,310 $ 6,405 $ 6,365 $6,365 $6,425 $6,427 $6,405 $6,310 1.23% 1.70% 2.09% 2.32% 2.41% Total Deposits Cost of Deposits 4Q 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023 Total Deposits and Cost of Deposits (in millions, as of quarter-end)

 
11 Deposit Summary as of December 31, 2023 11 Deposits by Channel (in millions) Commercial Deposits by NAICS Code (in millions) 20.4% 11.8% 7.3% 8.3% 1.3%8.5% 1.1% 3.6% 3.8% 2.0% 3.0% 1.9% 3.0% 12.3% 2.2% 9.5% 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 Health Care All Other All Other category made up of over 100 NAICS with Amusement and Theme Parks being the largest at $8 million $6.31 billion $1.05 billion $2,743 43.5% $1,050 16.6% $952 15.1% $279 4.4% $210 3.3% $780 12.4% $296 4.7% Retail Deposits Commercial Deposits Servicing Deposits Public Funds Brokered Deposits ICS Reciprocal Other

 
12 Uninsured Deposits 12 Average Deposit Balance per Account = $34,000 Uninsured Deposits (in millions) December 31, 2023 September 30, 2023 Call Report Uninsured Estimate $ 1,642 $ 1,737 Call Report Estimated Uninsured Deposits to Total Deposits 26 % 27 % Less: Affiliate Deposits (MSB owned funds) (38) (44) Less: Additional structured FDIC coverage (30) (49) Less: Collateralized Deposits (358) (367) Estimated uninsured deposits excluding items above $ 1,216 $ 1,277 Estimated Uninsured Deposits to Total Deposits 19 % 20 % Total Deposits $ 6,310 $ 6,405

 
13 Investment Portfolio As of December 31, 2023 13 Fair Value of Investments by Type 0.1% 7.9% 62.7% 9.1% 6.3% 3.0% 10.9% 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 4.16% for 4Q23 • Average Duration is 4.97 years • Purchased $93.8 million with T/E Yield of 7.04%, Sold $24.5 million with T/E Yield of 1.76% in 4Q23 Investments by Yield and DurationInvestment Mix & Unrealized Gain (Loss) (in millions) Fair Value Book Value Unrealized Gain (Loss) Treasuries $ 1 $ 1 $ — US GSE & US Agency 73 74 (1) MBS - agency 575 650 (75) MBS - non agency 84 87 (3) State & Municipal 57 63 (6) CLOs 28 28 — Corporate 99 110 (11) Total Investments $ 916 $ 1,013 $ (97) 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% $916 million

 
14 Liquidity Overview 14 Liquidity Sources (in millions) December 31, 2023 September 30, 2023 Cash and Cash Equivalents $ 135.1 $ 132.1 Unpledged Securities 346.8 258.1 FHLB Committed Liquidity 936.0 883.9 FRB Discount Window Availability 699.9 759.8 Total Estimated Liquidity $ 2,117.8 $ 2,033.9 Conditional Funding Based on Market Conditions Additional Credit Facility $ 419.0 $ 364.0 Brokered CDs (additional capacity) $ 500.0 $ 500.0

 
15 Net Interest Income/Margin 15 • Net interest income down slightly from prior quarter due to lower average earning assets • Net interest margin increased 1bp to 3.21% as the increase in the average yield on earning assets exceeded the increase in the cost of deposits • Average rate on new and renewed loan originations increased 66bps to 8.22% in 4Q23 from 7.56% in 3Q23 • Net interest margin expected to continue to be relatively stable as loan portfolio continues to reprice and the impact of continued repositioning in the investment portfolio is realized Net Interest Income (in millions) Net Interest Margin $63.6 $60.5 $58.8 $58.6 $58.1 $0.3 $0.4 $0.4 $0.2 $0.3 NII Accretion Income 4Q 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023 3.50% 3.39% 3.23% 3.20% 3.21% 0.02% 0.02% 0.02% 0.01% 0.02% NIM Accretion Income 4Q 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023

 
16 Loans & Securities - Repricing and Maturity 16 Total Loans and Leases (net of unearned income)(1) (in millions) As of December 31, 2023 Repricing Term Rate Structure 3 mos or less 3-12 mos 1-3 years 3-5 years 5-10 years 10-15 years Over 15 years Total Floating Rate Adjustable Rate Fixed Rate Commercial loans and leases $ 717 $ 310 $ 571 $ 295 $ 41 $ 4 $ 18 $ 1,956 $ 501 $ 79 $ 1,376 Commercial real estate 773 334 678 400 172 15 35 2,407 597 243 1,567 Construction and land development 281 72 70 29 1 — — 453 251 25 177 Residential real estate 70 57 78 65 84 20 7 381 52 121 208 Consumer 215 228 469 16 7 — — 935 122 — 813 Total $ 2,056 $ 1,001 $ 1,866 $ 804 $ 305 $ 39 $ 60 $ 6,131 $ 1,522 $ 468 $ 4,141 % of Total 34 % 16 % 30 % 13 % 5 % 1 % 1 % 100 % 25 % 8 % 68 % Weighted Average Rate 7.75 % 5.56 % 5.22 % 5.19 % 4.52 % 4.01 % 0.32 % (2) 6.03 % 8.23 % 4.73 % 5.36 % Investment Securities Available for Sale(3) (in millions) As of December 31, 2023 Maturity & Projected Cash Flow Distribution 1 year or less 1-3 years 3-5 years 5-10 years Over 10 years Total Amortized Cost $ 164 $ 258 $ 186 $ 289 $ 116 $ 1,013 % of Total 16 % 25 % 18 % 29 % 11 % 100 % Notes: (1) Based on projected principal payments for all loans plus the next reset for floating and adjustable rate loans and the maturity date of fixed rate loans. (2) Over 15 years category includes all nonaccrual loans and leases. (3) Projected principal cash flows for securities. Differences between amortized cost and total principal are included in Over 10 years.

 
17 Wealth Management 17 • Assets under administration increased mainly due to $106 million of new accounts won and positive market performance • Wealth Management fees increased from prior quarter due to increases in estate and trust fees from new business development efforts • New technology planned to launch in 2Q24 • Two new wealth advisors positively impacting new business development Assets Under Administration (in millions) Wealth Management Revenue (in millions) $3,505 $3,503 $3,595 $3,501 $3,733 4Q 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023 $6.23 $6.41 $6.27 $6.29 $6.60 4Q 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023

 
18 Noninterest Income 18 • Noninterest income increased from prior quarter • 4Q23 noninterest income included one-time servicing revenues of $3.8 million and $1.1 million gain from the sale of Visa B stock • One-time increases were offset by $2.9 million of losses on the sale of investment securities as part of additional repositioning in the investment portfolio that will be accretive to earnings going forward • Noninterest income expected to be in the range of $18.0 - $18.5 million in 1Q24 Noninterest Income (in millions) $33.8 $15.8 $18.8 $11.5 $20.5 Wealth Management Interchange Service Charges on Deposits Residential Mortgage All Other 4Q 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023(1) Notes: (1) September 30, 2023 amounts include the impact of the revision stated in the Fourth Quarter 2023 Earnings Release

 
19 Noninterest Expense and Operating Efficiency 19 Noninterest Expense and Efficiency Ratio (1) (Noninterest expense in millions) $49.9 $44.5 $42.9 $42.0 $44.5 $3.3 58.3% 57.6% 55.0% 55.8% 55.2% Total Noninterest Expense Adjustments to Noninterest Expense Efficiency Ratio 4Q 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023 • Efficiency Ratio (1) was 55.2% in 4Q 2023 vs. 55.8% in 3Q 2023 • Noninterest expense increased from prior quarter primarily due to increased incentive and performance based expense accruals and increased medical costs, partially offset by $1.1 million benefit recognized from Employees Retention Tax Credit • Near-term operating expense run-rate expected to be approximately $45.5 - $46.5 million Notes: (1) Represents a non-GAAP financial measure. See “Non-GAAP Reconciliation” in the appendix.

 
20 Asset Quality 20 • Nonperforming loans relatively flat with small increase of $0.4 million, of which equipment finance increased $2.1 million in the current quarter • Net charge-offs to average loans was 0.33% primarily driven by equipment finance • Provision for credit losses on loans of $7.0 million, primarily related to the equipment finance portfolio, changes in forecasts and other Q factors, and increases to specific reserves Nonperforming Loans / Total Loans (Total Loans as of quarter-end) NCO / Average Loans 0.78% 0.80% 0.86% 0.89% 0.92% 4Q 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023 0.03% 0.14% 0.19% 0.22% 0.33% 4Q 2022 1Q 2023 2Q 2023 3Q 2023 4Q 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 $66,669 $670 $715 $448 $68,502 ACL September 30, 2023 Specific Reserves Portfolio Changes Economic Factors ACL December 31, 2023

 
22 ACL by Portfolio 22 ($ in thousands) December 31, 2023 September 30, 2023 Portfolio Loans ACL % of Total Loans Loans ACL % of Total Loans Commercial $ 825,938 $ 8,897 1.08 % $ 874,004 $ 7,563 0.87 % Warehouse Lines — — — % 48,547 — — % Commercial Other 656,592 12,950 1.97 % 697,235 11,847 1.70 % Equipment Finance Loans 531,143 12,496 2.35 % 578,931 11,361 1.96 % Equipment Finance Leases 473,350 12,940 2.73 % 485,460 9,436 1.94 % CRE non-owner occupied 1,622,668 12,716 0.78 % 1,636,168 16,253 0.99 % CRE owner occupied 436,857 4,742 1.09 % 439,642 5,265 1.20 % Multi-family 279,904 2,398 0.86 % 269,708 2,583 0.96 % Farmland 67,416 373 0.55 % 66,646 510 0.77 % Construction and Land Development 452,593 4,163 0.92 % 416,801 3,530 0.85 % Residential RE First Lien 317,388 4,906 1.55 % 313,638 5,038 1.61 % Other Residential 63,195 647 1.02 % 61,573 660 1.07 % Consumer 107,743 711 0.66 % 111,432 847 0.76 % Consumer Other(1) 827,435 3,059 0.37 % 908,576 3,137 0.35 % Total Loans 6,131,079 68,502 1.12 % 6,280,883 66,669 1.06 % Loans (excluding BaaS portfolio(1) and warehouse lines) 5,215,645 65,003 1.25 % 5,235,383 63,090 1.21 % Notes: (1) Primarily consists of loans originated through GreenSky relationship

 
23 2024 Outlook and Priorities 23 • Well positioned to start 2024 with increased levels of capital, liquidity, and reserves • Prudent risk management will remain top priority while economic uncertainty remains with business development efforts focused on adding new commercial and retail deposit relationships throughout our markets • Strong financial performance and prudent balance sheet management should lead to further increases in capital ratios • New loan production focused on high quality commercial relationships will be partially funded with runoff from GreenSky portfolio and continued intentional reduction of the equipment finance portfolio • Neutral interest rate sensitivity positions Midland well for managing future changes in interest rates • Maintain disciplined expense management while also investing in areas that will enhance the long-term value of the franchise * Improvements in technology platform and additional advisors expected to positively impact business development in Wealth Management * Expanded presence in higher growth St. Louis market including the addition of a new market president expected to accelerate efforts to add new commercial, retail and wealth management clients * Banking-as-a-Service initiative expected to start making meaningful contribution to deposit gathering and fee income during 2024 * New mortgage originators added to capitalize on anticipated decline in interest rates with a focus on adding core client relationships that will utilize multiple products and services

 
24 APPENDIX 24

 
2525 Industries as a percentage of Commercial, CRE and Equipment Finance Loans and Leases with outstanding balances of $4.82 billion as of 12/31/2023 ($s in millions) RE/Rental & Leasing $1,616.6 33.6% All Others $586.4 12.2% Skilled Nursing $469.3 9.7% Construction - General $333.9 6.9% Manufacturing $237.3 4.9% Finance and Insurance $261.6 5.4% Accommodation & Food Svcs $222.8 4.6% Trans./Ground Passenger $198.7 4.1% Assisted Living $112.4 2.3% Ag., Forestry, & Fishing $151.5 3.1% General Freight Trucking $204.2 4.2% Retail Trade $180.6 3.8% Wholesale Trade $67.0 1.4% Other Services $102.6 2.1% Commercial Loans and Leases by Industry Health Care $70.5 1.5%

 
26 Commercial Real Estate Portfolio by Collateral Type 26 CRE Concentration (as of December 31, 2023) CRE as a % of Total Loans 46.6% CRE as a % of Total Risk-Based Capital (1) 265.2% 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 $2.86 billion as of December 31, 2023 ($s in millions) Skilled Nursing $469.1 16.4% Retail $454.6 15.9% Multi-Family $516.3 18.1% Industrial/Warehouse $218.0 7.6% Assisted Living $138.7 4.9% Hotel/Motel $159.7 5.6% All Other $174.1 6.1% Office $153.8 5.4% Farmland $66.3 2.3% Residential 1-4 Family $85.5 3.0% Raw Land $16.0 0.6% Restaurant $30.8 1.1% Mixed Use/Other $93.6 3.3% Medical Building $103.8 3.6% Special Purpose $102.4 3.6% C-Store/Gas Station $76.7 2.7%

 
27 Capital Ratios and Strategy 27 • Capital initiatives increased CET1 to 8.40% 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 December 31, 2023) 6.55% 8.40% 9.71% 10.91% 13.20% 11.44% 10.18% 11.44% 12.40% 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 2023 Shareholders' Equity to Tangible Common Equity Total shareholders' equity—GAAP $ 449,545 $ 608,525 $ 661,911 $ 621,391 $ 663,837 $ 758,574 $ 791,853 Adjustments: Preferred Stock (2,970) (2,781) — — — (110,548) (110,548) Goodwill (98,624) (164,673) (171,758) (161,904) (161,904) (161,904) (161,904) Other intangible assets, net (16,932) (37,376) (34,886) (28,382) (24,374) (20,866) (16,108) Tangible common equity 331,019 403,695 455,267 431,105 477,559 465,256 503,293 Less: Accumulated other comprehensive income (AOCI) 1,758 (2,108) 7,442 11,431 5,237 (83,797) (76,753) Tangible common equity excluding AOCI $ 329,261 $ 405,803 $ 447,825 $ 419,674 $ 472,322 $ 549,053 $ 580,046 Common Shares Outstanding 19,122,049 23,751,798 24,420,345 22,325,471 22,050,537 22,214,913 21,551,402 Tangible Book Value Per Share $ 17.31 $ 17.00 $ 18.64 $ 19.31 $ 21.66 $ 20.94 $ 23.35 Tangible Book Value Per Share excluding AOCI $ 17.22 $ 17.09 $ 18.34 $ 18.80 $ 21.42 $ 24.72 $ 26.91

 
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 2023 Income before income taxes - GAAP $ 26,471 $ 50,805 $ 72,471 $ 32,014 $ 99,112 $ 129,838 $ 107,573 Adjustments to noninterest income: (Gain) on sales of investment securities, net (222) (464) (674) (1,721) (537) 230 9,372 (Gain) on termination of hedged interest rate swaps — — — — (2,159) (17,531) — (Gain) on sale of Visa B shares — — — — — — (1,098) (Gain) on repurchase of subordinated debt — — — — — — (676) Other income 67 (89) 29 17 (48) — — Total adjustments to noninterest income (155) (553) (645) (1,704) (2,744) (17,301) 7,598 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 52,223 109,482 116,134 115,171 Adjusted earnings tax 15,170 17,962 19,358 12,040 26,261 27,113 29,682 Adjusted earnings - non-GAAP 34,895 56,763 62,826 40,183 83,221 89,021 85,489 Preferred stock dividends, net 83 141 46 — — 3,169 8,913 Adjusted earnings available to common shareholders $ 34,812 $ 56,622 $ 62,780 $ 40,183 $ 83,221 $ 85,852 $ 76,576 Adjusted diluted earnings per common share $ 1.89 $ 2.39 $ 2.54 $ 1.70 $ 3.65 $ 3.79 $ 3.42 Adjusted return on average tangible common equity 11.32 % 15.00 % 14.44 % 9.24 % 18.33 % 18.59 % 15.98 %

 
3030 MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) Adjusted Earnings Reconciliation For The Quarter Ended December 31, September 30, June 30, March 31, December 31, (dollars in thousands, except per share data) 2023 2023(1) 2023 2023 2022 Income before income taxes - GAAP $ 27,152 $ 22,935 $ 28,820 $ 28,666 $ 43,902 Adjustments to noninterest income: Loss on sales of investment securities, net 2,894 4,961 869 648 — (Gain) on termination of hedged interest rate swaps — — — — (17,531) (Gain) on sale of Visa B shares (1,098) — — — — (Gain) on repurchase of subordinated debt — — (676) — — Total adjustments to noninterest income 1,796 4,961 193 648 (17,531) Adjustments to noninterest expense: (Loss) on mortgage servicing rights held for sale — — — — (3,250) Total adjustments to noninterest expense — — — — (3,250) Adjusted earnings pre tax - non-GAAP 28,948 27,896 29,013 29,314 29,621 Adjusted earnings tax 6,927 8,389 7,297 7,069 7,174 Adjusted earnings - non-GAAP 22,021 19,507 21,716 22,245 22,447 Preferred stock dividends 2,228 2,229 2,228 2,228 3,169 Adjusted earnings available to common shareholders $ 19,793 $ 17,278 $ 19,488 $ 20,017 $ 19,278 Adjusted diluted earnings per common share $ 0.89 $ 0.78 $ 0.87 $ 0.88 $ 0.85 Adjusted return on average assets 1.11 % 0.98 % 1.10 % 1.15 % 1.13 % Adjusted return on average shareholders' equity 11.42 % 10.03 % 11.21 % 11.76 % 11.89 % Adjusted return on average tangible common equity 16.51 % 14.24 % 16.10 % 17.11 % 16.80 % Adjusted Pre-Tax, Pre-Provision Earnings Reconciliation For the Quarter Ended December 31, September 30, June 30, March 31, December 31, (dollars in thousands) 2023 2023(1) 2023 2023 2022 Adjusted earnings pre tax - non-GAAP $ 28,948 $ 27,896 $ 29,013 $ 29,314 $ 29,621 Provision for credit losses 6,950 5,168 5,879 3,135 3,544 Impairment on commercial mortgage servicing rights — — — — — Adjusted pre-tax, pre-provision earnings - non-GAAP $ 35,898 $ 33,064 $ 34,892 $ 32,449 $ 33,165 Adjusted pre-tax, pre-provision return on average assets 1.80 % 1.66 % 1.76 % 1.67 % 1.68 % Notes: (1) September 30, 2023 amounts include the impact of the revision stated in the Fourth Quarter 2023 Earnings Release

 
3131 MIDLAND STATES BANCORP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued) Efficiency Ratio Reconciliation For the Quarter Ended December 31, September 30, June 30, March 31, December 31, 2023 2023(1) 2023 2023 2022 (dollars in thousands) Noninterest expense - GAAP $ 44,488 $ 42,038 $ 42,894 $ 44,482 $ 49,943 Loss on mortgage servicing rights held for sale — — — — (3,250) Adjusted noninterest expense $ 44,488 $ 42,038 $ 42,894 $ 44,482 $ 46,693 Net interest income - GAAP $ 58,077 $ 58,596 $ 58,840 $ 60,504 $ 63,550 Effect of tax-exempt income 183 205 195 244 286 Adjusted net interest income 58,260 58,801 59,035 60,748 63,836 Noninterest income - GAAP 20,513 11,545 18,753 15,779 33,839 Loss on sales of investment securities, net 2,894 4,961 869 648 — (Gain) on termination of hedged interest rate swaps — — — — (17,531) (Gain) on sale of Visa B shares (1,098) — — — — (Gain) on repurchase of subordinated debt — — (676) — — Adjusted noninterest income 22,309 16,506 18,946 16,427 16,308 Adjusted total revenue $ 80,569 $ 75,307 $ 77,981 $ 77,175 $ 80,144 Efficiency ratio 55.22 % 55.82 % 55.01 % 57.64 % 58.26 % Notes: (1) September 30, 2023 amounts include the impact of the revision stated in the Fourth Quarter 2023 Earnings Release

 
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 December 31, September 30, June 30, March 31, December 31, (dollars in thousands, except per share data) 2023 2023(1) 2023 2023 2022 Shareholders' Equity to Tangible Common Equity Total shareholders' equity—GAAP $ 791,853 $ 757,610 $ 776,821 $ 775,643 $ 758,574 Adjustments: Preferred Stock (110,548) (110,548) (110,548) (110,548) (110,548) Goodwill (161,904) (161,904) (161,904) (161,904) (161,904) Other intangible assets, net (16,108) (17,238) (18,367) (19,575) (20,866) Tangible common equity $ 503,293 $ 467,920 $ 486,002 $ 483,616 $ 465,256 Less: Accumulated other comprehensive income (AOCI) (76,753) (101,181) (84,719) (77,797) (83,797) Tangible common equity excluding AOCI $ 580,046 $ 569,101 $ 570,721 $ 561,413 $ 549,053 Total Assets to Tangible Assets: Total assets—GAAP $ 7,866,868 $ 7,969,285 $ 8,034,721 $ 7,930,174 $ 7,855,501 Adjustments: Goodwill (161,904) (161,904) (161,904) (161,904) (161,904) Other intangible assets, net (16,108) (17,238) (18,367) (19,575) (20,866) Tangible assets $ 7,688,856 $ 7,790,143 $ 7,854,450 $ 7,748,695 $ 7,672,731 Common Shares Outstanding 21,551,402 21,594,546 21,854,800 22,111,454 22,214,913 Tangible Common Equity to Tangible Assets 6.55 % 6.01 % 6.19 % 6.24 % 6.06 % Tangible Book Value Per Share $ 23.35 $ 21.67 $ 22.24 $ 21.87 $ 20.94 Tangible Book Value Per Share, excluding AOCI $ 26.91 $ 26.35 $ 26.11 $ 25.39 $ 24.72 Return on Average Tangible Common Equity (ROATCE) For the Quarter Ended December 31, September 30, June 30, March 31, December 31, (dollars in thousands) 2023 2023(1) 2023 2023 2022 Net income available to common shareholders $ 18,483 $ 9,173 $ 19,347 $ 19,544 $ 29,703 Average total shareholders' equity—GAAP $ 764,790 $ 771,625 $ 776,791 $ 767,186 $ 749,183 Adjustments: Preferred Stock (110,548) (110,548) (110,548) (110,548) (110,548) Goodwill (161,904) (161,904) (161,904) (161,904) (161,904) Other intangible assets, net (16,644) (17,782) (18,937) (20,184) (22,859) Average tangible common equity $ 475,694 $ 481,391 $ 485,402 $ 474,550 $ 453,872 ROATCE 15.41 % 7.56 % 15.99 % 16.70 % 25.89 % Notes: (1) September 30, 2023 amounts include the impact of the revision stated in the Fourth Quarter 2023 Earnings Release