MSBIHIGH SIGNALRISK10-K

MSBI underwent a significant accounting restatement related to third-party loan origination programs, shifting from net to gross accounting treatment for credit enhancements.

The removal of extensive language about accounting errors and restatements suggests these issues have been resolved, but the materiality of requiring restatements for 2022-2023 financials indicates significant internal control weaknesses. The company appears to be emerging from a period of accounting complexity, but investors should monitor whether the new accounting treatment provides more accurate risk assessment going forward.

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

MSBI's financial profile contracted meaningfully with total assets declining 13.2% to $6.5 billion and deposits falling 12.5% to $5.4 billion, indicating either strategic downsizing or competitive pressures. However, the provision for credit losses dropped dramatically from $43.1M to $4.0M, suggesting substantially improved asset quality or the impact of the accounting method changes. The combination of higher share buybacks and lower operating cash flow reflects management's confidence despite the balance sheet contraction.

FINANCIAL STATEMENT CHANGES
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.

Cash & Equivalents
Balance Sheet
+11.4%
$114.8M→$127.8M

Cash grew 11.4% — improving liquidity position supports investment and shareholder returns.

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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