Key Highlights

  • Net income to common was USD 20.6 million, or USD 0.95 per share.
  • Return on average tangible common Equity was 18.50%.
  • Net interest Margin was 4.03% including a USD 1.6 million recovery.
  • Nonperforming Assets fell five basis points to 0.86% of assets.

Earnings and Returns

Midland States Bancorp (NASDAQ:MSBI) reported third-quarter 2026 results on Thursday. Net Income available to common shareholders was USD 20.6 million, or USD 0.95 per diluted share, against USD 17.7 million, or USD 0.82, in the second quarter and USD 5.3 million, or USD 0.24, a year earlier. Return on average assets was 1.35% against 1.22% and 0.43%, and return on average tangible common equity was 18.50% against 16.27% and 4.72%.

The efficiency ratio was 61.34% against 60.61%. Adjusted pre-provision net Revenue to average assets was 1.96% against 2.01%. Noninterest expense to average assets was 3.13%.

Margin and Funding

The net interest margin rose five basis points to 4.03% from 3.98%, helped by a USD 1.6 million interest recovery on the payoff of a nonaccrual Loan and by Balance Sheet and Interest Rate risk management, partly offset by higher funding costs. The cost of deposits rose four basis points to 1.82%.

Total deposits were USD 5.62 billion, down USD 89.8 million. Retail deposits fell USD 112.7 million, including USD 115.7 million of reductions from actions to manage Liquidity and deposit pricing. Commercial deposits rose USD 35.7 million and public funds rose USD 33.7 million, while servicing deposits fell USD 26.5 million and higher cost brokered deposits fell USD 7.9 million.

Loans and Wealth

Total loans rose USD 39.1 million to USD 4.28 billion. Community Bank balances rose USD 23.7 million, or 2.8% annualized. Specialty finance loans rose USD 28.0 million to USD 560.1 million, and non-core loans, which include third-party lending and servicing programs and the remaining equipment finance portfolio, fell USD 12.7 million to USD 295.7 million, consistent with a planned runoff.

Wealth Management revenue was USD 8.7 million. Trust assets under administration were USD 4.77 billion against USD 4.78 billion in June and USD 4.36 billion a year earlier.

Credit and Capital

Net charge-offs were 0.50% of average loans annualized, against 1.17% in the second quarter, 0.99% a year earlier and 3.69% in the fourth quarter of 2025. Nonperforming assets were 0.86% of total assets, down five basis points. Chief Executive Officer Jeffrey Ludwig said past-due, substandard and nonperforming loans declined and that the company remains disciplined in addressing the remaining legacy credits.

Total Capital to risk-weighted assets was 15.60% and common equity tier 1 capital was 10.36%. Tangible Book Value per share was USD 19.52 against USD 21.41 in June, while tangible book value per share excluding accumulated other comprehensive income rose to USD 25.39 from USD 24.69. Shares outstanding were 20,801,859 against 21,543,557 a year earlier, a 3.4% reduction, although shares outstanding rose by 76,045 from the 20,725,814 at June 30. The second-quarter charge-off ratio of 1.17% compares with 0.50% in the third.

Figures to Follow

Earnings per share rose from USD 0.24 to USD 0.95 in a year, with net charge-offs falling from 0.99% to 0.50% of loans. The USD 1.6 million recovery lifted the reported margin of 4.03%, so the recovery is worth separating when comparing quarters. Reference points include Community Bank loan growth at 2.8% annualized, the efficiency ratio at 61.34%, retail deposit balances, and the tangible book value per share gap of USD 5.87 between the reported and ex-AOCI measures.