# Midland States Bancorp, Inc.

> Clarifo company profile — qualitative business description generated from
> the company's filings. Financial statements, charts and ratios are
> available on Clarifo (https://www.clarifo.com/fi/companies/Midland States Bancorp, Inc.).

## Overview

Midland States Bancorp, Inc. is a diversified financial holding company headquartered in Effingham, Illinois, with banking operations through Midland States Bank. It provides community banking, consumer installment lending, merchant card services, and wealth management, serving individuals, businesses, municipalities, and other entities primarily in Illinois and the St. Louis metro area.

## Products & services

• Commercial and retail lending
• Deposit products and sweep accounts
• Consumer installment loans
• Wealth management and trust services
• Merchant credit card services
• Insurance and financial planning

- **Community Banking** (55%) — Commercial and retail lending, deposit taking, and related banking services for local customers.
- **Wealth Management** (15%) — Trust, investment management, estate planning, brokerage, and retirement consulting services.
- **Consumer Installment Lending** (15%) — Auto, boat, recreational vehicle, appliance, and home improvement loans.
- **Fee-Based Banking Services** (10%) — Merchant card processing, deposit service fees, and other noninterest income services.
- **Insurance and Financial Planning** (5%) — Insurance placement and financial planning services offered through the bank and wealth platform.

- Commercial and retail lending
- Deposit products and sweep accounts
- Consumer installment loans
- Wealth management and trust services
- Merchant credit card services
- Insurance and financial planning

## Customers

The company serves retail customers, small and mid-sized businesses, municipalities, and other local entities in its core markets. It also sells wealth and trust services to individuals, families, business owners, and retirement plan sponsors seeking advice, custody, and investment management. Consumer installment lending is supported by retail and vendor channels for auto, recreational vehicle, appliance, and home-improvement financing.

- **Retail banking customers** (primary) — Individuals buying checking, savings, CDs, consumer loans, and everyday banking services.
- **Commercial and municipal clients** (primary) — Businesses and municipalities using commercial loans, deposits, and treasury-style services.
- **Wealth management clients** (secondary) — Individuals, families, and business owners buying trust, investment, and estate planning services.
- **Consumer installment borrowers** (secondary) — Borrowers financing autos, boats, RVs, appliances, and home-improvement projects.
- **Merchant and retail partners** (emerging) — Retailers and vendors that originate or process loans and card transactions through the bank.

- Individuals and households needing deposits, loans, and planning
- Small and mid-sized businesses using lending and cash management
- Municipalities and public entities seeking deposits and banking services
- Wealth clients needing trust, estate, and investment management
- Retail and vendor partners originating consumer installment loans

## Geography

Midland States Bancorp is concentrated in Illinois, with additional branch presence in Missouri and a core footprint around the St. Louis metropolitan area. Its business is tied to local economic conditions, deposit competition, and credit performance in these regional markets rather than broad national diversification.

- Headquartered in Effingham, Illinois
- Branches across Illinois and in Missouri
- Core market includes the St. Louis metropolitan area
- Local economy drives loan demand and credit quality
- Regional footprint supports relationship banking and deposits

## Strategy

The company is focused on a high-tech, high-touch community banking model that combines digital convenience with relationship-based service. Management is also emphasizing core deposit gathering, regional franchise strength, and enterprise risk management after portfolio actions and credit-related pressure.

- **Deepen core community banking relationships** (short-term) — Relationship banking supports deposits, loan cross-sell, and customer retention in a competitive local market.
- **Expand wealth management and fee income** (medium-term) — Noninterest income helps diversify earnings away from spread-based banking and credit cycles.
- **Strengthen risk management and credit discipline** (short-term) — Credit quality and portfolio cleanup are central after recent loan sales and goodwill impairment.
- **Preserve regional franchise efficiency** (medium-term) — A concentrated branch network must remain efficient to compete against larger banks and online lenders.

- Improve customer experience through high-tech, high-touch service
- Strengthen core community banking and relationship lending
- Grow deposits, especially core deposits, to support funding stability
- Maintain regional franchise focus in Illinois and St. Louis markets
- Use enterprise risk management to control credit and operational risk

## Risks

The company is exposed to regional economic weakness, especially in Illinois and the St. Louis area, because its lending and deposit base is concentrated there. Credit losses, vendor dependence, cyber risk, and competition from larger banks, nonbanks, and fintechs can all pressure margins, funding, and customer retention.

- **Regional economic slowdown** [high] — Loan performance and deposit growth depend heavily on Illinois and St. Louis market conditions.
- **Credit deterioration and loan losses** [high] — The business is lending-heavy, so weaker borrower performance directly affects earnings and capital.
- **Goodwill impairment** [high] — Management already recorded a large impairment tied to deteriorated credit quality and stock price trends.
- **Third-party vendor dependence** [medium] — Core banking and information services rely on outside providers that may be costly or hard to replace.
- **Cybersecurity and operational disruption** [high] — The bank processes transactions continuously and any outage or breach could impair service and reputation.
- **Competitive pressure from nonbanks and fintechs** [medium] — Alternative lenders and digital platforms can take deposits, loans, and fee business at lower cost.

- Regional recession or local real estate weakness could raise delinquencies
- Credit quality deterioration can increase provisions and impair goodwill
- Heavy reliance on third-party vendors creates operational and service risk
- Cyber incidents could disrupt transactions and damage customer trust
- Competition from banks, credit unions, and fintechs can compress spreads

## Accounting

The most important accounting judgments are the allowance for credit losses and goodwill impairment testing, both of which can materially change reported earnings. Fair value estimates for securities, derivatives, and equity investments also matter because market moves can flow through income or equity, while loan sales and participation transactions affect timing of gains, losses, and balance sheet size.

- **Allowance for credit losses on loans** — Affects provision expense, earnings volatility, and reserve levels
- **Goodwill impairment** — Can materially reduce net income without cash outflow
- **Fair value measurements** — Can affect OCI, earnings, and capital ratios
- **Loan sales and participation interests** — Changes loan balances, interest income, and realized gains or losses

- Allowance for credit losses depends on macro assumptions and borrower quality
- Goodwill impairment can create large non-cash charges in weak periods
- Fair value marks affect securities, derivatives, and equity investments
- Loan sales and participations change balance sheet size and gain/loss timing
- Deposit and funding costs affect net interest income and margin

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*Last updated: 2026-04-28T20:27:14.646563+00:00*