Midland States Bancorp delivered a solid year-over-year revenue expansion in Q2 2024, with revenue of $120.9 million representing a 58.7% YoY increase. Despite top-line growth, net income declined sharply year over year to $6.75 million (EPS $0.20), as the company incurred higher expense and funding costs that compressed profitability. The quarterly results underscore a business with substantial asset and investment depth, a large stock of cash and marketable securities, and meaningful non-operating items influencing reported margins. On a QoQ basis, revenue dipped marginally by about 1.6%, while operating metrics showed continued but uneven earnings power as the company navigates a higher-cost funding and asset mix environment.
Key takeaways for investors:
- Revenue growth substantially outpaced prior year, but profitability did not keep pace due to elevated interest expense and funding dynamics.
- Balance sheet remains high in assets with meaningful long-term investments and a sizable equity base; however, ROE remains subdued (approximately 0.86%) relative to peers, reflecting funding structure and asset mix.
- The stock trades at a price-to-earnings around 20x and price-to-book near 0.69x, signaling equity market expectations for ongoing profitability improvements and a potential margin recovery if NIM and cost of funds stabilize.