Midland States Bancorp (MSBI) Q3 2025 earnings summary

Executive summary

• Net income for Q3 2025 was $7.6M, down from $20.4M in Q3 2024, with a nine-month net loss of $121.4M due to a $154M goodwill impairment and lower noninterest income.

• Assets totaled $6.91B at September 30, 2025, down from $7.51B at year-end 2024, reflecting strategic reductions in non-core portfolios.

• Ceased originations in equipment finance and reduced specialty finance exposure to under 10% of loans.

• 53 branch locations in Illinois and Missouri, with a growth focus in St. Louis and Chicago.

• Strategic initiatives included tightening underwriting standards and focusing on tech-forward community banking.

Financial highlights

• Net interest income for Q3 2025 was $61.1M, with net interest margin at 3.79% (3.69% excluding $1.6M interest recovery).

• Noninterest income was $20.0M, down from $33.5M in Q3 2024, mainly due to lower credit enhancement income.

• Noninterest expense for the nine months ended September 30, 2025 was $302.8M, up $153.7M year-over-year, driven by goodwill impairment.

• Tangible book value per share increased to $21.16 at period end.

• Loan balances decreased $168M sequentially, mainly from reductions in specialty and equipment finance portfolios.

Outlook and guidance

• Management expects lower credit costs in 2026 and further improvement in funding costs due to Federal Reserve rate cuts.

• Continued focus on growing the Community Bank, building regulatory capital, and expanding fee income.

• Capital ratios are on track to meet or exceed targets, with a focus on strengthening the balance sheet.