Midland States Bancorp reported a solid top-line improvement for QQ1 2024 with revenue of $122.862 million, up 62.8% year over year and 3.6% quarter over quarter, driven by a broader net interest income base and growing fee income. Gross profit totaled $21.187 million, translating to a gross margin of 17.24%. Operating income was $20.603 million, and reported net income came in at $13.885 million (EPS of $0.63 to $0.64 on a diluted basis), implying a net margin of 11.3% for the quarter. EBITDA stood at $21.638 million with an EBITDARatio of 17.6%, indicating a meaningful level of earnings power at the operating line despite a complex balance sheet backdrop.
Despite the positive revenue trajectory, year-over-year profitability weakened in several metrics due to higher interest expenses and the evolving mix of revenue sources. Net income declined 36.23% YoY, even as revenue surged, resulting in a muted bottom-line relative to the top-line gain. The diluted earnings per share rose by 16.7% QoQ but remained down on a YoY basis, consistent with the bank’s higher funding costs and a dated liability structure.
From a balance sheet perspective, total assets reached $7.832 billion, with significant liquidity in the form of short-term investments totaling roughly $1.041 billion and cash and cash equivalents of $166.5 million. However, liquidity risk is reflected in a depressed current ratio of 0.0791 and quick ratio of 0.155, underscoring potential near-term funding fragility if deposit flight or market conditions tighten. The company carries total liabilities of $7.0408 billion against total stockholders’ equity of $791.0 million, yielding a debt/asset framework that is conservative on a relative basis but translates to a modest ROE of ~1.76% and ROA of ~0.18%. The stock trades at a price-to-book value of approximately 0.69 and a price-to-earnings multiple around 9.85x, with a dividend yield of about 1.64%, placing MSBIP in the lower end of the regional bank peer group on several valuation metrics while bearing notable liquidity risks that warrant careful monitoring.
In summary, QQ1 2024 demonstrates a resilient revenue trajectory and meaningful operating earnings ability, but profitability margins face headwinds from funding costs and a fragile liquidity position. Investors should focus on balance sheet normalization, deposit growth, and cost discipline as catalysts for a more favorable risk/reward profile going forward.