MSBIHIGH SIGNALFINANCIAL10-K

MSBI swung from $38M profit to $124M loss due to accounting corrections for third-party loan programs, while experiencing significant balance sheet contraction.

The company corrected its accounting methodology for third-party loan origination programs, moving from net to gross accounting which dramatically impacted reported financials. This accounting change, combined with substantial asset and deposit declines, suggests potential operational challenges and raises questions about the reliability of previous financial reporting.

Comparing 2026-03-02 vs 2025-07-01View on EDGAR →
FINANCIAL ANALYSIS

MSBI experienced severe financial deterioration with net income plummeting 427% from $38M profit to $124M loss, driven primarily by a 200% surge in interest expense to $168M. The balance sheet contracted significantly with total assets declining 13% to $6.5B and deposits falling 13% to $5.4B, while stockholders' equity dropped 20% to $566M. These changes reflect both accounting corrections and underlying business challenges, creating a concerning picture of financial instability and potential asset quality issues.

FINANCIAL STATEMENT CHANGES
Net Income
P&L
-426.7%
$38.0M→-$124.3M

Net income declined 426.7% — review whether driven by operations, interest costs, or non-recurring items.

Interest Expense
P&L
+200.4%
$56.0M→$168.3M

Interest expense surged 200.4% — significant debt increase or rising rates materially impacting earnings.

Provision for Credit Losses
P&L
-90.8%
$43.1M→$4.0M

Provisions reduced 90.8% — improving credit quality or reserve release boosting reported earnings.

Share Buybacks
Cash Flow
+76.4%
$5.5M→$9.7M

Share repurchases increased 76.4% — management returning capital, signals confidence in intrinsic value.

Operating Cash Flow
Cash Flow
-28.8%
$176.5M→$125.7M

Operating cash flow softened — monitor whether temporary working capital timing or structural deterioration.

Capital Expenditure
Cash Flow
-22.5%
$6.9M→$5.3M

Capex reduced 22.5% — investment cycle winding down or capital discipline; may improve near-term free cash flow.

Stockholders Equity
Balance Sheet
-20.4%
$710.8M→$565.5M

Equity decreased 20.4% — buybacks or losses reducing book value, monitor solvency ratios.

Total Assets
Balance Sheet
-13.2%
$7.5B→$6.5B

Total assets contracted 13.2% — asset sales, write-downs, or balance sheet optimization underway.

Total Liabilities
Balance Sheet
-12.5%
$6.8B→$5.9B

Liabilities reduced 12.5% — deleveraging improves balance sheet strength and financial flexibility.

Total Deposits
Balance Sheet
-12.5%
$6.2B→$5.4B

Deposit base contracted 12.5% — monitor funding costs and liquidity position carefully.

LANGUAGE CHANGES
NEW — 2026-03-02
PRIOR — 2025-07-01
ADDED
As of February 13, 2026, the Registrant had 20,989,589 shares of outstanding common stock, $0.01 par value.
Form 10-K Summary 127 Signatures 128 1 Table of C ontents GLOSSARY OF ABBREVIATIONS AND ACRONYMS As used in this report, references to the "Company," "we," "our," "us," and similar terms refer to the consolidated entity consisting of Midland States Bancorp, Inc.
Department of the Treasury 2 Table of C ontents Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 This Annual Report on Form 10-K contains certain forward-looking statements within the meaning of, and are intended to be covered by the safe harbor provisions of, the Private Securities Litigation Reform Act of 1995.
As of December 31, 2025, the Company had total assets of $6.51 billion, and our wealth management group had assets under administration of approximately $4.48 billion.
These loans are typically short-term loans extended to farmers and other agricultural producers to purchase seed, fertilizer and equipment.
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REMOVED
As of June 13, 2025, the Registrant had 21,515,138 shares of outstanding common stock, $0.01 par value.
The errors relate to the Company s accounting for loans originated pursuant to third-party loan origination programs.
As part of these programs, the third-party providers offered various credit enhancements with respect to loans originated under the programs, including contributions to reserve accounts, yield maintenance and certain other payments.
Historically, the Company accounted for all borrower payments and credit enhancement payments under these programs on a single unit, or net basis, with all such payments presented as interest income representing the Company s effective yield on the portfolios.
The Company has determined that these payments should instead be accounted for on a separate unit of account, or gross basis, with loan yields and interest income recorded at the gross borrower loan rate, credit losses and associated provisions for credit losses recorded on a gross basis over the life of the loans, and with all credit enhancement payments recorded separately as a credit enhancement derivative.
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