Midland States Bancorp, Inc. Announces 2026 First Quarter Results

EFFINGHAM, Ill., April 23, 2026 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (Nasdaq: MSBI) (the “Company”) today reported net income available to common shareholders of $16.2 million, or $0.74 per diluted share, for the first quarter of 2026, compared to a net loss available to common shareholders of $5.1 million, or $0.24 per diluted share, for the fourth quarter of 2025. This also compares to a net loss of $143.2 million, or $6.58 per diluted share, for the first quarter of 2025.

Financial results for the first quarter of 2026 included $2.1 million of gains from the sale of the Company’s residential servicing portfolio and a portion of the Company’s commercial servicing portfolio, losses of $1.7 million from the sale of investment securities and a loss of $1.7 million related to our limited partnership investments.

Financial results for the fourth quarter of 2025 included a loss of $21.4 million from the sale of substantially all of the Company’s equipment finance portfolio, in addition to a $1.6 million loss on the sale of a small consumer loan portfolio.

Financial results for the first quarter of 2025 included goodwill impairment expense of $154.0 million.

2026 First Quarter Results

• Net income available to common shareholders of $16.2 million, or $0.74 per diluted share; Adjusted earnings available to common shareholders of $17.2 million, or $0.79 per diluted share

• Adjusted pre-provision net revenue of $30.5 million, or $1.43 per diluted share, compared to $31.6 million, or $1.44 per diluted share, for the fourth quarter of 2025

• Net interest margin of 3.91% compared to 3.74% in the prior quarter

• Community Bank loan portfolio increased $68.8 million, or 8.3% annualized, compared to prior quarter. Total loans decreased $13.4 million, primarily due to anticipated runoff within our specialty finance and non-core portfolios

• Total capital to risk-weighted assets of 15.27% and common equity tier 1 capital of 9.98%

• Ratio of nonperforming assets to total assets of 0.91%, a decrease of 10 basis points from the prior quarter

• Provision for credit losses on loans was $5.4 million for the first quarter of 2026, compared to $11.8 million for the fourth quarter of 2025
  
  

Discussion of Outlook; President & Chief Executive Officer, Jeffrey G. Ludwig:

“We delivered a solid start to 2026, reflecting the actions taken throughout 2025 to strengthen credit quality and reduce portfolio risk. Credit metrics continued to improve, with non-performing assets declining and trending toward our 0.75% target, while profitability returned to normalized levels. As a result, we generated earnings of $0.74 per share and a return on average assets of 1.16%.

“Our capital position continued to strengthen, with the common equity tier 1 ratio increasing to 9.98%, approaching our 10% target. We remained disciplined in our capital allocation, repurchasing $7.8 million of common stock during the quarter while continuing to invest in our core businesses. Net interest margin expanded meaningfully, driven primarily by lower funding costs.

“Growth in our Community Bank remains a key priority for 2026, with loan growth supported by strong client relationships, while non-core portfolios continued to run off as planned. Our wealth management business delivered another solid quarter. We are encouraged by the momentum entering 2026, and we see opportunities to further improve efficiency in the Company as the year progresses.”

Financial Highlights and Key Performance Indicators

Key Points for First Quarter and Outlook

Solid Growth Trends in Community Bank & Wealth Management

• Total loans at March 31, 2026 were $4.34 billion, a decrease of $13.4 million from December 31, 2025. Key changes in the loan portfolio were as follows:
  

  • Community Bank balances increased $68.8 million, or 2.1%. We originated $130 million of new loans during the first quarter of 2026, down from $180 million in the fourth quarter of 2025, primarily reflecting typical seasonal softness at the start of the year. First quarter production benefited from ongoing expansion of full-relationship commercial clients.
    

  • Specialty finance loans decreased $54.7 million to $613.5 million from December 31, 2025.
    

  • Non-core loans, which include our third party lending and servicing programs and remaining equipment finance portfolio, decreased $27.5 million to $328.1 million from December 31, 2025.
    

• Total deposits were $5.44 billion at March 31, 2026, an increase of $15.7 million from December 31, 2025. Key changes in deposits were as follows:
  

  • Retail deposits increased $81.6 million driven primarily by growth in existing consumer and small business customer relationships and growth in new accounts as a result of targeted initiatives.
    

  • Deposits among wealth management clients declined $22.8 million, reflecting normal fluctuations in client cash balances. Servicing deposits decreased $20.0 million due to the sales of the residential servicing portfolio and a portion of the commercial servicing portfolio.
    

  • Higher-cost brokered deposits decreased $17.2 million.
    

• Wealth Management revenue totaled $8.2 million in the first quarter of 2026, which was relatively stable compared to the prior quarter. Assets under administration were $4.47 billion at March 31, 2026, compared to $4.48 billion at December 31, 2025. Market volatility experienced at the end of the first quarter had a limited effect on our results.
  

• Net interest margin was 3.91%, up 17 basis points compared to the fourth quarter of 2025, driven primarily by a continued decline in funding costs. The cost of deposits decreased 14 basis points to 1.81% in the first quarter of 2026, reflecting the ongoing impact of Federal Reserve rate cuts that began in late 2024. Margin expansion also benefited from a modest 2 basis point increase in loan yields and a favorable shift in the investment securities mix.
  
  

The following table presents the Company’s net interest margin for the first quarter of 2026 compared to the fourth quarter of 2025 and the first quarter of 2025.

Trends in Noninterest Income and Expense

• Noninterest income was $22.1 million for the first quarter of 2026 compared to $26.9 million for the fourth quarter of 2025. Noninterest income for the first quarter of 2026 included $2.1 million of gains from the sale of the Company’s residential servicing portfolio and a portion of the Company’s commercial servicing portfolio, losses of $1.7 million from the sale of investment securities, and a $1.7 million loss related to our limited partnership investments. Additionally, the first quarter of 2026 included credit enhancement income of $3.4 million while the fourth quarter of 2025 included $6.6 million of additional credit enhancement income driven by contractual changes in our third-party lending and servicing arrangement.
  

• Noninterest expense was $50.4 million for the first quarter of 2026 compared to $77.2 million for the fourth quarter of 2025, which included $23.0 million of losses on the sale of loans.
  

• Income tax expense was $5.6 million for the first quarter of 2026, compared to an income tax benefit of $0.4 million for the fourth quarter of 2025 and income tax expense of $3.2 million for the first quarter of 2025. The resulting effective tax rates were 23.4%, 11.1% and 19.6%, respectively. The lower effective tax rate for the fourth quarter of 2025 reflected the loss on the sale of substantially all of our equipment finance portfolio; the effective tax rate for the first quarter of 2025 was not affected by the goodwill impairment, which was not deductible for tax purposes. We currently expect our effective tax rate to be approximately 22% - 23% for the full year, subject to changes in earnings mix, state tax legislation and other factors.
  
  

Improving Credit Quality

• Nonperforming loans decreased to $58.8 million, or 1.36% of total loans, at March 31, 2026, compared to $65.5 million, or 1.50% of total loans, at December 31, 2025, while loans 30-89 days past due increased to $20.3 million, or 0.47% of total loans, at March 31, 2026.
  

• Provision for credit losses on loans was $5.4 million for the first quarter of 2026.
  

• Net charge-offs were $6.7 million for the first quarter of 2026, which included a $2.6 million charge-off related to a nonperforming commercial real estate loan that moved to held for sale during the quarter and $2.1 million of fully reimbursed charge-offs related to our third-party lending portfolio.
  

• Allowance for credit losses on loans was $67.9 million, or 1.56% of total loans, at March 31, 2026, compared to an allowance of $69.2 million, or 1.59% of total loans, at December 31, 2025.
  
  

The table below summarizes certain information regarding the Company’s loan portfolio asset quality for the periods presented.

Capital

As previously announced, the Company’s board of directors authorized a new share repurchase program, pursuant to which the Company is authorized to repurchase up to $25.0 million of its common stock through November 2, 2026. During the first quarter of 2026, the Company repurchased $7.8 million of its common stock (365,507 shares of its common stock at a weighted average price of $21.47), resulting in approximately $7.6 million in remaining repurchase authority under the program.

The Company and Midland States Bank exceeded all regulatory capital requirements under Basel III, and Midland States Bank met the qualifications to be a ‘‘well-capitalized’’ financial institution, as summarized in the following table:

About Midland States Bancorp, Inc.

Midland States Bancorp, Inc. is a community-based financial holding company headquartered in Effingham, Illinois, and is the sole shareholder of Midland States Bank. As of March 31, 2026, the Company had total assets of approximately $6.55 billion, and its Wealth Management Group had assets under administration of approximately $4.47 billion. The Company provides a full range of commercial and consumer banking products and services, merchant credit card services, trust and investment management, insurance and financial planning services. For additional information, visit https://www.midlandsb.com/ or https://www.linkedin.com/company/midland-states-bank.

Non-GAAP Financial Measures

Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with GAAP.

These non-GAAP financial measures include “Adjusted pre-provision net revenue,” “Adjusted pre-provision net revenue per diluted share,” “Adjusted pre-provision net revenue to average assets,” “Adjusted earnings,” “Adjusted earnings available to common shareholders,” “Adjusted diluted earnings per common share,” “Efficiency ratio,” “Tangible common equity to tangible assets,” and “Tangible book value per share.” The Company believes these non-GAAP financial measures provide both management and investors a more complete understanding of the Company’s funding profile and profitability. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures. Not all companies use the same calculation of these measures; therefore, the measures in this press release may not be comparable to other similarly titled measures as presented by other companies.

Forward-Looking Statements

Readers should note that in addition to the historical information contained herein, this press release includes "forward-looking statements" within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including but not limited to statements about the Company’s plans, objectives, future performance, goals and future earnings levels, including currently anticipated levels of noninterest income and operating expenses. These statements are subject to many risks and uncertainties, including changes in interest rates and other general economic, business and political conditions; the impact of federal trade policy, inflation, deposit volatility and potential regulatory developments; the performance of our loan portfolio and our ability to manage credit risk; changes in the financial markets; the effects of armed conflict, including the scope and duration of disruptions in global energy markets relating to war in Iran; changes in the business environment resulting from the adoption of artificial intelligence, including fraud and cybersecurity risk; operational risks, including with respect to fraud and information technology; changes in business plans as circumstances warrant; changes to U.S. and state tax laws, regulations and guidance; and other risks detailed from time to time in filings made by the Company with the Securities and Exchange Commission, including the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025, which are incorporated herein by reference. Readers should note that the forward-looking statements included in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "will," “should,” "propose," "may," "plan," "seek," "expect," "intend," "estimate," "anticipate," "believe," "continue," “outlook,” “trends,” or similar terminology. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

CONTACTS:
Jeffrey G. Ludwig, President and CEO, at [email protected] or (217) 342-7321
Claire A. Stack, Interim Chief Financial Officer, at [email protected] or (217) 342-7321