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EFFINGHAM, Ill. - Midland States Bancorp, Inc. (NASDAQ:MSBI), a community-based financial holding company with a market capitalization of $352 million, announced preliminary financial results for the first quarter of 2025. The company is currently completing the evaluation of its accounting for third-party lending and servicing arrangements and expects to file its restated financial statements for the year ended December 31, 2024, in its Annual Report on Form 10-K.
The preliminary results for Q1 2025 show a net income available to common shareholders of $12.6 million or $0.57 per diluted share, and pre-tax, pre-provision earnings of $27.0 million, or $1.12 per diluted share. According to InvestingPro data, analysts expect the company to remain profitable throughout 2025, though 2 analysts have recently revised their earnings expectations downward. These figures already reflect the updated accounting methodology for the third-party lending and servicing arrangements, which are not material to the company’s tangible equity.
Midland States Bancorp’s President & CEO, Jeffrey G. Ludwig, indicated that the delay in audited financials is being addressed diligently and assured that the company does not anticipate a material impact on tangible equity or regulatory capital levels for the first quarter. He also highlighted the company’s strategic priority of improving credit quality, noting no significant new substandard or nonperforming loans identified in the quarter.
The company also disclosed the sale of approximately $330 million of its GreenSky loans in April 2025 and the implementation of tighter underwriting standards in its equipment finance portfolio, which are expected to reduce exposure to higher-risk portfolios. These strategic moves come as InvestingPro analysis shows the stock has experienced a significant 31.8% decline over the past six months, with the company currently maintaining a weak overall financial health score.
The preliminary data indicates a strong net interest margin of 3.48%, solid loan growth in the Community Bank, and continued contributions from the wealth management revenue platform. The company is optimistic about stronger profitability and growing capital ratios for the remainder of 2025.
Key points from the preliminary results include a decrease in substandard accruing loans and nonperforming loans to $75.7 million and $140.0 million, respectively, as of March 31, 2025. Net charge-offs for the quarter were $16.9 million, with $11.1 million fully reimbursed charge-offs related to third-party lending programs.
Total loans as of March 31, 2025, were $5.02 billion, with a decrease in the Specialty Finance loan portfolio due to tightened credit standards. Total deposits stood at $5.94 billion, reflecting increases in noninterest-bearing and retail deposits. Despite recent challenges, the bank maintains a strong dividend profile, with InvestingPro data showing a significant 7.5% dividend yield and a 9-year streak of consecutive dividend increases. Get access to more detailed financial metrics and 8 additional ProTips by subscribing to InvestingPro.
The company also reported a decrease in the cost of funding, with the cost of deposits falling to 2.29% in the first quarter of 2025, attributed to Federal Reserve rate cuts in late 2024.
Midland States Bancorp and Midland States Bank exceeded all regulatory capital requirements under Basel III, with the bank qualifying as a "well-capitalized" financial institution.
This press release statement serves as the source of information for these preliminary results, which are subject to adjustment upon completion of the company’s audit and other developments.
In other recent news, Midland States Bancorp has disclosed a compliance issue with Nasdaq due to a delay in filing its annual report. The company received a deficiency notification from Nasdaq for not meeting the requirement for timely submission of its Form 10-K for the year ending December 31, 2024. This notice, dated April 3, 2025, does not immediately affect the trading of Midland States Bancorp’s common stock or depositary shares on the Nasdaq Global Select Market. The company has been given 60 days to present a plan to regain compliance and may be granted up to 180 days, until September 29, 2025, to fulfill the filing requirements. Midland States Bancorp is addressing issues related to a third-party lending and servicing arrangement’s accounting and financial reporting, which has delayed the filing. The company plans to submit the overdue Form 10-K as soon as possible and is working to resolve the issues that caused the delay. Investors are encouraged to monitor the company’s filings and announcements for further updates on its compliance status with Nasdaq listing requirements.
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