Executive Summary

Q4 2024 delivered a headline net loss to common of $54.8M ($2.52) driven by accelerated credit clean-up: $93.5M provision, $102.7M net charge-offs, a full exit of LendingPoint ($87.1M sold) and commitment to sell $371.7M of GreenSky loans; core profitability (adjusted PTPP) was $21.5M and NIM expanded 9 bps to 3.19% .
Management tightened underwriting (no new Specialty Finance construction) and charged down problem credits in Specialty Finance and equipment finance (trucking), including $7.6M impairment on operating lease collateral; substandard accruing loans fell by $88.7M Q/Q; NPLs rose with transfers to nonaccrual .
Balance sheet de-risked: loans fell 10% Q/Q to $5.17B on consumer exits; deposits held at $6.20B with lower cost of deposits (2.52% vs 2.69%); CET1 ended at 8.37% (company plan to reach 9.25–9.50% by YE25) .
Positive 2025 setup: management expects NIM tailwinds from lower rates, stable to improving asset quality, and continued community bank growth; near-term OpEx run-rate ~ $48.5–$49.0M; fee income guide $19.0–$19.5M per quarter; dividend maintained ($0.31 declared Feb 4, 2025) .
Street estimates: S&P Global consensus for Q4 2024 EPS/Revenue could not be retrieved (SPGI daily limit) and comparisons to consensus are therefore unavailable; analysts are likely to recalibrate credit cost trajectories and 2025 earnings path given the de-risking actions (management provided no EPS guidance) [SPGI error noted].

What Went Well and What Went Wrong

What Went Well

NIM expanded 9 bps to 3.19% as funding costs declined with Fed cuts; cost of deposits fell 17 bps to 2.52%; net interest income improved Q/Q to $56.0M .
Wealth management momentum: revenue rose to $7.7M (AUA $4.15B); management cites new advisor adds and cross-sell progress .
Credit administration reset: substandard accruing loans declined by $88.7M; proactive appraisals and charge-offs taken in Specialty Finance should improve forward risk profile; management halted new Specialty Finance construction lending and tightened standards .
Quote: “Improving credit quality is our number one priority…we took significant steps to reduce credit risk and address our underlying credit issues…we believe we are well positioned to deliver solid financial performance in 2025.” — CEO Jeffrey G. Ludwig .

What Went Wrong

Loss to common of $54.8M: $93.5M provision and $102.7M net charge-offs reflecting LendingPoint sale, planned GreenSky sale, Specialty Finance downgrades/charge-offs, and equipment lease impairments ($7.6M) drove results .
Asset quality metrics deteriorated on certain concentrations: NPLs/loans rose to 2.71% (from 1.99%); net charge-offs/avg loans spiked to 7.23% on consumer/equipment/SFG actions; ACL/loans modestly down to 1.46% after charge-offs .
Capital and book value pressure: CET1 8.37% (down from 9.00% Q3); tangible book per share fell to $21.01 owing to credit costs and AOCI impact (AOCI loss of $82.0M reduced TBV by $3.81/share) .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Net Interest Income ($MM)	$58.08	$54.95	$56.04
Noninterest Income ($MM)	$20.51	$19.34	$19.56
Adjusted Total Revenue (non-GAAP) ($MM)	$80.57	$74.46	$75.86
Provision for Credit Losses ($MM)	$6.95	$5.00	$93.54
Net Income (Loss) to Common ($MM)	$18.48	$16.25	$(54.77)
Diluted EPS ($)	$0.84	$0.74	$(2.52)
Net Interest Margin (%)	3.21%	3.10%	3.19%
Efficiency Ratio (%)	55.22%	62.76%	71.42%

Segment/Loan Mix (Period-End)

Loan Category ($B)	Q4 2023	Q3 2024	Q4 2024
Commercial Loans	$0.95B	$0.86B	$0.92B
Equipment Finance Loans	$0.53B	$0.44B	$0.42B
Equipment Finance Leases	$0.47B	$0.42B	$0.39B
Commercial FHA Warehouse	$0.00B	$0.05B	$0.01B
Commercial Real Estate	$2.41B	$2.51B	$2.59B
Construction & Land Dev.	$0.45B	$0.42B	$0.30B
Residential Real Estate	$0.38B	$0.38B	$0.38B
Consumer	$0.94B	$0.66B	$0.16B
Total Loans	$6.13B	$5.75B	$5.17B

Key KPIs

KPI	Q4 2023	Q3 2024	Q4 2024
Total Deposits ($B)	$6.31B	$6.26B	$6.20B
Cost of Deposits (%)	2.41%	2.69%	2.52%
Nonperforming Loans ($MM)	$56.35	$114.56	$140.14
NPLs / Total Loans (%)	0.92%	1.99%	2.71%
ACL / Total Loans (%)	1.12%	1.49%	1.46%
Net Charge-offs / Avg Loans (%)	0.33%	0.78%	7.23%
CET1 (Company) (%)	8.40%	9.00%	8.37%
TCE / TA (%)	6.55%	7.03%	6.14%
Tangible Book Value / Share ($)	$23.35	$24.90	$21.01

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
CET1 ratio (Company)	FY2025 YE	N/A	9.25%–9.50% target by YE25	New
Fee Income (quarterly)	Near-term quarters	$18.0–$18.5M (Q3 deck)	$19.0–$19.5M (Q4 deck)	Raised
Operating Expense Run-rate (quarterly)	Near-term	$45.5–$46.5M (Q3 deck)	~$48.5–$49.0M (Q4 deck)	Raised
NIM Outlook	2025	Expect tailwinds from lower funding costs (directional)	Expect expanded NIM with lower rates (directional)	Maintained (direction)
Dividend	Ongoing	Regular quarterly dividend	$0.31 declared Feb 21, 2025 pay date	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024, Q3 2024)	Current Period (Q4 2024)	Trend
Credit clean-up / Consumer FinTech portfolios	Highlighted LendingPoint deterioration post-2023 conversion; GreenSky runoff; reserve build; NCOs modest; plan to reduce non-core	Sold $87.1M LendingPoint (loss $17.3M); committed to sell $371.7M GreenSky (loss $33.4M); large provision and NCOs to reset portfolio	Accelerated de-risking
Specialty Finance (CRE bridge)	Elevated risk discussed; downgrades; tighter posture	Moved $57.8M to NPL with $6.6M NCOs; additional $18.8M NCOs from updated appraisals; no new construction originations	Proactive tightening
Equipment Finance (trucking)	Noted deterioration; NCOs modest; losses on repossessed equipment	$15.3M charge-offs; $7.6M operating lease collateral impairment; nonaccruals down Q/Q	Addressed losses; stabilizing nonaccruals
Net Interest Margin / Funding costs	NIM 3.12% in Q2, 3.10% in Q3; deposit costs rising then peaking; Fed cuts to help	NIM 3.19%; deposit cost fell to 2.52%; Fed cuts reduced funding costs	Improving
Deposits / Liquidity	Mixed deposit trends; added brokered to reduce FHLB; liquidity up	Deposits stable at $6.20B; cost down; liquidity sources $2.62B; brokered time 4.2% of deposits	Stable mix; improved capacity
Wealth Management	Building AUA and revenue; advisor adds; tech upgrades	Revenue up to $7.7M; AUA $4.15B; continued hiring	Positive momentum
Capital ratios	CET1 8.63% (Q2), 9.00% (Q3) with balance sheet actions	CET1 8.37% post clean-up; plan to 9.25–9.50% by YE25	Near-term dip; medium-term build

Management Commentary

Strategic focus: “Exit our non-core consumer portfolio and charge-off deteriorating credits…to better position the Company to grow our core community banking business…tightened standards going forward.” — CEO Jeffrey G. Ludwig .
2025 outlook: “We are seeing positive trends…net interest margin expanded…we believe we are well positioned to deliver solid financial performance in 2025.” — CEO .
Credit posture: Stopped new Specialty Finance construction; charged off specific reserves; equipment lease collateral impairment recognized to reset values .

Q&A Highlights

A public Q4 2024 earnings call transcript was not available via our sources; as a result, Q&A themes and any clarifications provided during the call cannot be included without risking inaccuracy (we relied on the 8-K and the investor presentation) .

Estimates Context

S&P Global (Capital IQ) consensus estimates for Q4 2024 EPS and revenue were unavailable due to a daily request limit error; therefore, we do not present versus-consensus comparisons for this quarter (SPGI error observed). Analysts will likely recalibrate models for: materially higher 4Q credit costs tied to consumer exits and Specialty Finance write-downs; NIM expansion potential in 2025; and operating expense run-rate changes, per management’s deck .

Key Takeaways for Investors

The quarter was a deliberate “clean-up”: large provision/NCOs and portfolio sales compressed capital and TBV but removed significant credit tail risk in non-core consumer and higher-risk CRE bridge credits .
Core earnings power held up: adjusted PTPP of $21.5M and a 9 bps NIM expansion signal underlying profitability when excluding credit clean-up effects .
2025 setup: company-specific catalysts include NIM tailwinds from lower rates, higher fee run-rate ($19.0–$19.5M/qt), and community bank growth; watch for execution on capital build to 9.25–9.50% CET1 by YE25 .
Asset quality watch items: monitor progress on closing the GreenSky sale (partial bank financing), reducing NPLs, and stabilizing equipment finance losses; substandard accruals already down sharply Q/Q .
Expense discipline vs growth: near-term OpEx guide lifted to ~$48.5–$49.0M; ensure revenue and credit normalization offset higher run-rate .
Dividend sustained ($0.31 declared), signaling confidence in forward cash flows despite the Q4 clean-up .
Without consensus benchmarks this quarter, trading likely keys off de-risking narrative, forward NIM trajectory, capital build path, and tangible progress reducing criticized assets .

Sources: Q4 2024 8-K and exhibits (EX-99.1 press release and EX-99.2 presentation) ; Company press releases Jan 6, 2025 (pre-announcement) and Feb 4, 2025 (dividend) ; Prior quarters Q2 and Q3 2024 8-Ks for trend analysis – –; Company IR presentations page ; GlobeNewswire distribution of Q4 release .

Midland States Bancorp, Inc. (MSBI)·Q4 2024 Earnings Summary