Midland States Bancorp, Inc.
For the period ended Sep 30, 2025. Filed Nov 6, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 6, 2025
MSBI$31.72+0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-09-08.
0001466026-25-000038
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0001466026-25-000070
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 155 previous paragraphs and 156 current paragraphs.
88 unchanged; 63 reworded; 5 added; 3 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 24 previous and 24 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
For additional information regarding critical accounting estimates, see the section titled “Critical Accounting Estimates” included in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no material changes in the Company’s application of critical accounting estimates since December 31, 2024.
Current report
Cessation of equipment finance originations. As a continuation of steps taken to address the Company's credit quality issues, including the sales of non-core loan portfolios and tightened underwriting standards in our specialty finance portfolio, we ceased originations in the equipment finance portfolio effective September 30, 2025. As a result of this decision, the Company recognized $1.0 million of severance expense in the third quarter of 2025.
Current report
At its September 2025 meeting, the FOMC cut its benchmark interest rate by 0.25 percentage points, marking the first reduction in 2025. Following the rate cut, the borrowing rate was in a range between 4.00%-4.25%. The post-meeting statement stated "Job gains have slowed, and the unemployment rate has edged up but remains low. Inflation has moved up and remains somewhat elevated. The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment have risen.” In addition, the Federal Reserve cut its benchmark interest rate by an additional 0.25 percentage points at its October 2025 meeting.
Current report
Marketing expense. The $0.4 million and $1.0 million increases in marketing expense for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024, were primarily the result of increased brand marketing and program expenses related to the acquisition of deposit accounts.
Current report
Subordinated Debt. Subordinated debt totaled $27.0 million and $77.7 million as of September 30, 2025 and December 31, 2024, respectively. On September 30, 2025, the Company redeemed the outstanding Fixed-to-Floating Rate Subordinated Notes due September 30, 2029, having an aggregate principal amount of $50.8 million. The interest rate on the subordinated notes was 7.91%, equating to approximately $4.0 million of annual interest expense.
Removed paragraphs (3)
Previous report
At its July 2025 meeting, the FOMC kept its key borrowing rate targeted in a range between 4.25%-4.50%, where it has been since December 2024. The post-meeting statement stated "The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated.” Federal Reserve Chair Jerome Powell said at a news conference that the committee had not yet determined whether it would cut rates at its September meeting. He stated that he believes their obligation is to keep longer term inflation expectations well anchored and to prevent a one time increase in the price level from becoming an ongoing inflation problem. The benchmark federal funds rate began 2024 at a target range between 5.25%-5.50%.
Previous report
Occupancy and equipment expense. For the three and six months ended June 30, 2025, occupancy and equipment expense increased $0.2 million and $0.6 million, respectively, as compared to the same periods in 2024 due primarily to the investments made to upgrade ATM fleet that was completed in the fourth quarter of 2024.
Previous report
Loan expense. The $0.7 million and $0.8 million increase in loan expense for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024, is primarily for loan collection expenses due to the volume of nonperforming loans and assets.
Reworded paragraphs (63)
Previous wording
The following is Management's discussion and analysis of certain significant factors which have affected the financial condition and results of operations of the Company as reflected in the unaudited consolidated balance sheet as of June 30, 2025, as compared to December 31, 2024, and unaudited consolidated operating results for the three and six months ended June 30, 2025 and 2024. This disclosure should be read in conjunction with the Company's unaudited consolidated financial statements and accompanying notes appearing elsewhere herein and the audited financial statements and accompanying notes provided in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on July 1, 2025.
Current wording
The following is Management's discussion and analysis of certain significant factors which have affected the financial condition and results of operations of the Company as reflected in the unaudited consolidated balance sheet as of September 30, 2025, as compared to December 31, 2024, and unaudited consolidated operating results for the three and nine months ended September 30, 2025 and 2024. This disclosure should be read in conjunction with the Company's unaudited consolidated financial statements and accompanying notes appearing elsewhere herein and the audited financial statements and accompanying notes provided in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on July 1, 2025.
Previous wording
The preparation of our consolidated financial statements requires Management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. These estimates are based upon historical experience and on various other assumptions that management believes are reasonable under current circumstances. These estimates form the basis for making judgments about the carrying value of certain assets and liabilities that are not readily available from other sources. Actual results may differ from these estimates under different assumptions or conditions. The estimates and judgments that management believes have the greatest effect on the Company’s reported financial position and results of operations are set forth in “Note 1 – Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements, included in our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no significant changes to the Company's critical accounting policies as disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, except as indicated in "Accounting Standards Adopted in 2025" in Note 1 to the Consolidated Financial Statements in the report.
Current wording
The preparation of our consolidated financial statements requires Management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. These estimates are based upon historical experience and on various other assumptions that management believes are reasonable under current circumstances. These estimates form the basis for making judgments about the carrying value of certain assets and liabilities that are not readily available from other sources. Actual results may differ from these estimates under different assumptions or conditions. The estimates and judgments that management believes have the greatest effect on the Company’s reported financial position and results of operations are set forth in “Note 1 – Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements, included in our Annual Report on Form 10-K for the year ended December 31, 2024.
Previous wording
At June 30, 2025 and December 31, 2024, loans outstanding in this program were $53.7 million and $62.3 million, respectively.
Current wording
At September 30, 2025 and December 31, 2024, loans outstanding in this program were $56.5 million and $62.3 million, respectively.
Previous wording
Overview. The following table sets forth condensed income statement information of the Company for the three and six months ended June 30, 2025 and 2024:
Current wording
Overview. The following table sets forth condensed income statement information of the Company for the three and nine months ended September 30, 2025 and 2024:
Previous wording
During the three months ended June 30, 2025, we generated net income of $12.0 million, or diluted earnings per common share of $0.44, compared to net income of $25.7 million, or diluted earnings per common share of $1.06, in the three months ended June 30, 2024. Earnings for thesecond quarter of 2025 compared to thesecond quarter of 2024 decreased primarily due to a $0.2 million decrease in net interest income, a $9.1 million increase in provision for credit losses, and an $8.4 million decrease in noninterest income. These results were partially offset by a $0.8 million decrease in noninterest expense, and a $3.2 million decrease in income tax expense.
Current wording
During thethree months ended September 30, 2025, we generated net income of $7.6 million, or diluted earnings per common share of $0.24 compared to net income of $20.4 million, or diluted earnings per common share of $0.83, in thethree months ended September 30, 2024. Earnings for the third quarter of 2025 compared to the third quarter of 2024 decreased primarily due to a $2.1 million increase in provision for credit losses, a $13.5 million decrease in noninterest income, and a $0.1 million increase in noninterest expense. These results were partially offset by a $2.0 million increase in net interest income, and a $0.8 million decrease in income tax expense.
Previous wording
During the six months ended June 30, 2025, we generated a net loss of $129.0 million, or diluted loss per common share of$6.13, compared to net income of $48.4 million, or diluted earnings per common share of $1.99, in the six months ended June 30, 2024. Earnings for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, included a $1.7 million decrease in net interest income, a $28.5 million decrease in noninterest income, and a $153.6 million increase in noninterest expense, primarily as a result of $154.0 million of goodwill impairment recognized in the first quarter of 2025. These results were partially offset by a $6.5 million decrease in income tax expense.
Current wording
During the nine months ended September 30, 2025, we generated a net loss of $121.4 million, or diluted loss per common share of$5.88, compared to net income of $68.8 million, or diluted earnings per common share of $2.81, in the nine months ended September 30, 2024. Earnings for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, included a $0.3 million increase in net interest income, a $2.1 million increase in provision for credit losses, a $42.1 million decrease in noninterest income, a $153.7 million increase in noninterest expense, primarily as a result of $154.0 million of goodwill impairment recognized in the first quarter of 2025, and a $7.3 million decrease in income tax expense.
Previous wording
At its September 2024 FOMC meeting, the Federal Reserve cut its benchmark interest rate by 0.50 percentage points, marking the first reduction in four years.
Current wording
The benchmark federal funds rate began 2024 at a target range between 5.25%-5.50%. At its September 2024 FOMC meeting, the Federal Reserve cut its benchmark interest rate by 0.50 percentage points, marking the first reduction in four years.
Previous wording
During the three months ended June 30, 2025, net interest income, on a tax-equivalent basis, totaled $59.0 million compared to $59.1 million for the three months ended June 30, 2024. The tax-equivalent net interest margin increased to 3.56% for the second quarter of 2025 compared to 3.33% in the second quarter of 2024.
Current wording
During the three months ended September 30, 2025, net interest income, on a tax-equivalent basis, totaled $61.3 million compared to $59.3 million for the three months ended September 30, 2024. The tax-equivalent net interest margin increased to 3.79% for the third quarter of 2025 compared to 3.34% in the third quarter of 2024.
Previous wording
During thesix months ended June 30, 2025, net interest income, on a tax-equivalent basis, decreased to $117.5 million with a tax-equivalent net interest margin of 3.52% compared to net interest income, on a tax-equivalent basis, of $119.1 million with a tax-equivalent net interest margin of 3.36% for thesix months ended June 30, 2024.
Current wording
During thenine months ended September 30, 2025, net interest income, on a tax-equivalent basis, increased to $178.8 million with a tax-equivalent net interest margin of 3.61% compared to net interest income, on a tax-equivalent basis, of $178.4 million with a tax-equivalent net interest margin of 3.35% for thenine months ended September 30, 2024.
Previous wording
Average Balance Sheet, Interest and Yield/Rate Analysis. The following tables present the average balance sheets, interest income, interest expense and the corresponding average yields earned and rates paid for the three and six months ended June 30, 2025 and 2024. The average balances are principally daily averages and, for loans, include both performing and nonperforming balances. Interest income on loans includes the effects of discount accretion and net deferred loan origination costs accounted for as yield adjustments.
Current wording
Average Balance Sheet, Interest and Yield/Rate Analysis. The following tables present the average balance sheets, interest income, interest expense and the corresponding average yields earned and rates paid for the three and nine months ended September 30, 2025 and 2024. The average balances are principally daily averages and, for loans, include both performing and nonperforming balances. Interest income on loans includes the effects of discount accretion and net deferred loan origination costs accounted for as yield adjustments.
Previous wording
(1)Interest income and average rates for tax-exempt loans and securities are presented on a tax-equivalent basis, assuming a federal income tax rate of 21%. Tax-equivalent adjustments totaled $0.3 million and $0.2 million for the three months ended June 30, 2025 and 2024, respectively.
Current wording
(1)Interest income and average rates for tax-exempt loans and securities are presented on a tax-equivalent basis, assuming a federal income tax rate of 21%. Tax-equivalent adjustments totaled $0.2 million for both the three months ended September 30, 2025 and 2024.
Previous wording
(1)Interest income and average rates for tax-exempt loans and securities are presented on a tax-equivalent basis, assuming a federal income tax rate of 21%. Tax-equivalent adjustments totaled $0.5 million and $0.4 million for the six months ended June 30, 2025 and 2024, respectively.
Current wording
(1)Interest income and average rates for tax-exempt loans and securities are presented on a tax-equivalent basis, assuming a federal income tax rate of 21%. Tax-equivalent adjustments totaled $0.7 million and $0.6 million for the nine months ended September 30, 2025 and 2024, respectively.
Previous wording
Interest Income. Interest income, on a tax-equivalent basis, decreased $9.1 million to $98.2 million in the three months ended June 30, 2025 as compared to the same quarter in 2024, primarily due to a decline in earning assets. The yield on earning assets decreased 12 basis points to 5.93% from 6.05%.
Current wording
Interest Income. Interest income, on a tax-equivalent basis, decreased $10.5 million to $98.7 million in the three months ended September 30, 2025 as compared to the same quarter in 2024, primarily due to a decline in earning assets. The yield on earning assets decreased three basis points to 6.11% from 6.14%.
Previous wording
Average earning assets decreased to $6.64 billion in the second quarter of 2025 from $7.13 billion in the same quarter in 2024. A decrease in average loans of $792.0 million was partially offset by an increase in investment securities of $268.7 million.
Current wording
Average earning assets decreased to $6.41 billion in the third quarter of 2025 from $7.07 billion in the same quarter in 2024. A decrease in average loans of $835.7 million was partially offset by an increase in investment securities of $176.2 million.
Previous wording
Average loans decreased $792.0 million in the second quarter of 2025 compared to the same quarter of 2024. Average consumer loans decreased $665.8 million. In the fourth quarter of 2024, the Company accelerated the reduction of our non-core consumer loan portfolio through sales. In December 2024, we sold our LendingPoint portfolio and committed to a plan to sell the majority of our GreenSky consumer loan portfolio, transferring these loans to held for sale. In the second quarter of 2024, the average balances of the LendingPoint and GreenSky portfolios were $100.0 million and $534.1 million, respectively. Average equipment finance loan and lease balances decreased $184.9 million to $732.7 million as the Company continued to reduce its concentration of this product within the overall loan portfolio.
Current wording
Average loans decreased $835.7 million in the third quarter of 2025 compared to the same quarter of 2024. Average consumer loans decreased $588.0 million. In the fourth quarter of 2024, the Company accelerated the reduction of our non-core consumer loan portfolio through sales. In December 2024, we sold our LendingPoint portfolio and committed to a plan to sell the majority of our GreenSky consumer loan portfolio, transferring these loans to held for sale. In the third quarter of 2024, the average balances of the LendingPoint and GreenSky portfolios were $92.0 million and $504.6 million, respectively. Average equipment finance loan and lease balances decreased $192.7 million to $675.5 million as the Company continued to reduce its concentration of this product within the overall loan portfolio.
Previous wording
For the six months ended June 30, 2025, interest income, on a tax-equivalent basis, decreased $15.3 million to $197.8 million as compared to the same period in 2024, primarily due to a decline in earning assets. The yield on earning assets decreased nine basis points to 5.93% from 6.02%.
Current wording
For the nine months ended September 30, 2025, interest income, on a tax-equivalent basis, decreased $25.8 million to $296.5 million as compared to the same period in 2024, primarily due to a decline in earning assets. The yield on earning assets decreased seven basis points to 5.99% from 6.06%.
Previous wording
Average earning assets decreased to $6.72 billion in the first six months of 2025 from $7.12 billion in the same period in 2024. Average loans decreased $873.1 million. This decrease was partially offset by increases in investment securities and loans held for sale of $296.1 million and $180.6 million, respectively.
Current wording
Average earning assets decreased to $6.62 billion in the first nine months of 2025 from $7.10 billion in the same period in 2024. Average loans decreased $860.9 million. This decrease was partially offset by increases in investment securities and loans held for sale of $255.9 million and $120.4 million, respectively.
Previous wording
Average loans decreased $873.1 million in the first half of 2025 compared to the same period of 2024. Average consumer loans decreased $724.8 million due to the sale of our non-core consumer loan portfolios. Average equipment finance loan and lease balances decreased $187.9 million to $758.3 million.
Current wording
Average loans decreased $860.9 million in the first three quarters of 2025 compared to the same period of 2024. Average consumer loans decreased $678.9 million due to the sale of our non-core consumer loan portfolios. Average equipment finance loan and lease balances decreased $189.6 million to $730.3 million.
Previous wording
Average loans held for sale for the first half of 2025 primarily reflected the GreenSky consumer loans which were transferred to held for sale in December 2024. The Company completed the sale of this portfolio in April 2025.
Current wording
Average loans held for sale for the first three quarters of 2025 primarily reflected the GreenSky consumer loans which were transferred to held for sale in December 2024. The Company completed the sale of this portfolio in April 2025.
Previous wording
Interest Expense. Interest expense decreased$9.0 million to$39.2 million for thethree months ended June 30, 2025 from the comparable period in 2024. The cost of interest-bearing liabilities decreased to 2.91% for the second quarter of 2025, compared to 3.36% for the second quarter of 2024, due to the decrease in deposit costs as a result of the rate decreases announced by the Federal Reserve in late 2024.
Current wording
Interest Expense. Interest expense decreased$12.5 million to$37.4 million for thethree months ended September 30, 2025 from the comparable period in 2024. The cost of interest-bearing liabilities decreased to 2.84% for the third quarter of 2025, compared to 3.45% for the third quarter of 2024, due to the decrease in deposit costs as a result of the rate decreases announced by the Federal Reserve in late 2024.
Previous wording
Interest expense on deposits decreased $7.2 million to $32.3 million for thethree months ended June 30, 2025 from the comparable period in 2024. The decrease was primarily due to a decrease in rates paid on deposits. Average balances of interest-bearing deposit accounts decreased $255.8 million, or 5.0%, to$4.85 billion for thethree months ended June 30, 2025 compared to the same period one year earlier. Decreases in interest-bearing checking account, savings account, and time account balances of $213.6 million, $28.9 million, and $25.2 million, respectively, were partially offset by an increase in brokered time deposits of $11.9 million.
Current wording
Interest expense on deposits decreased $11.8 million to $30.2 million for thethree months ended September 30, 2025 from the comparable period in 2024. The decrease was primarily due to a decrease in rates paid on deposits. Average balances of interest-bearing deposit accounts decreased $488.2 million, or 9.5%, to$4.64 billion for thethree months ended September 30, 2025 compared to the same period one year earlier. Servicing deposits decreased $286.7 million to $498.9 million due to the loss of a customer in July 2025. In addition, brokered time deposits decreased $117.7 million.
Previous wording
For the six month period ended June 30, 2025, interest expense decreased$13.7 million to$80.3 million compared to the six months ended June 30, 2024. The cost of interest-bearing liabilities increased to 2.95% for the first six months of 2025 compared to 3.29% for the same period of 2024. Interest expense on deposits decreased to $66.9 million from $78.7 million for the comparable period in 2024, primarily due to decreases in interest rates on deposits.
Current wording
For the nine month period ended September 30, 2025, interest expense decreased$26.2 million to$117.7 million compared to the nine months ended September 30, 2024. The cost of interest-bearing liabilities decreased to 2.92% for the first nine months of 2025 compared to 3.34% for the same period of 2024. Interest expense on deposits decreased to $97.1 million from $120.7 million for the comparable period in 2024, primarily due to decreases in interest rates on deposits.
Previous wording
Interest expense on FHLB advances and other borrowings decreased $1.9 million for thesix months ended June 30, 2025, from the comparable period in 2024. Average balances decreased $75.2 million for thesix months ended June 30, 2025, from the comparable period in 2024 as the reduction in earning assets allowed the Company to reduce its reliance on this higher-costing funding source.
Current wording
Interest expense on FHLB advances and other borrowings decreased $2.6 million for thenine months ended September 30, 2025, from the comparable period in 2024. Average balances decreased $64.0 million for thenine months ended September 30, 2025, from the comparable period in 2024 as the reduction in earning assets allowed the Company to reduce its reliance on this higher-costing funding source.
Previous wording
Provision for Credit Losses. The Company's provision for credit losses totaled $17.4 million for the three months ended June 30, 2025, compared to $8.3 million for thethree months ended June 30, 2024. Net charge-offs in the second quarter of 2025 totaled $29.9 million, $22.5 million which were related to commercial real estate loans. Three relationships totaling $8.4 million were not previously reserved for, resulting in the increase in provision expense. For thesix months ended June 30, 2025 and 2024, the provision for credit losses was $28.2 million for both periods, respectively.
Current wording
Provision for Credit Losses. The Company's provision for credit losses on loans totaled $20.5 million for the three months ended September 30, 2025, compared to $17.9 million for thethree months ended September 30, 2024. In addition, the Company recognized $0.5 million recapture of credit losses related to unfunded commitments in the third quarter of 2025. For thenine months ended September 30, 2025, the provision for credit losses was $48.2 million compared to $46.1 million for the nine months ended September 30, 2024.
Previous wording
The provision for credit losses on loans recognized during the three and six months ended June 30, 2025 was made at a level deemed necessary by management to absorb estimated losses in the loan portfolio. A detailed evaluation of the adequacy of the allowance for credit losses is completed quarterly by management, the results of which are used to determine provision for credit losses. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions and reasonable and supportable forecasts along with other qualitative and quantitative factors.
Current wording
The provision for credit losses on loans recognized during the three and nine months ended September 30, 2025 was made at a level deemed necessary by Management to absorb estimated losses in the loan portfolio. A detailed evaluation of the adequacy of the allowance for credit losses is completed quarterly by Management, the results of which are used to determine provision for credit losses. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions and reasonable and supportable forecasts along with other qualitative and quantitative factors.
Previous wording
Noninterest Income. The following table sets forth the major components of our noninterest income for the three and six months ended June 30, 2025 and 2024:
Current wording
Noninterest Income. The following table sets forth the major components of our noninterest income for the three and nine months ended September 30, 2025 and 2024:
Previous wording
Wealth management revenue. Wealth management revenue increased $0.6 million and $0.8 million for the three and six months ended June 30, 2025 respectively, as compared to the same periods in 2024. Assets under administration increased to $4.18 billion at June 30, 2025 from $4.00 billion at June 30, 2024.
Current wording
Wealth management revenue. Wealth management revenue increased $0.9 million and $1.7 million for the three and nine months ended September 30, 2025 respectively, as compared to the same periods in 2024. Assets under administration increased to $4.36 billion at September 30, 2025 from $4.27 billion at September 30, 2024.
Previous wording
Income on company-owned life insurance. Income on company-owned life insurance increased $0.7 million for the six months ended June 30, 2025, as compared to the same period in 2024 primarily due to death benefits of $0.3 million received in the first quarter of 2025.
Current wording
Income on company-owned life insurance. Income on company-owned life insurance increased $0.8 million for the nine months ended September 30, 2025, as compared to the same period in 2024 due in part to death benefits of $0.3 million received in the first quarter of 2025.
Previous wording
Credit enhancement income. The Company is party to third-party loan origination programs. As part of these programs, the third-party providers offer various credit enhancements with respect to loans originated under the programs, including contributions to reserve accounts, yield maintenance and certain other payments. Credit enhancement income declined $10.5 million and $27.7 million for the three and six months ended June 30, 2025 compared to the same periods of 2024 as a result of loan payoffs and a cessation in loans originated through the GreenSky and LendingPoint programs.
Current wording
Credit enhancement income. The Company is party to third-party loan origination programs. As part of these programs, the third-party providers offer various credit enhancements with respect to loans originated under the programs, including contributions to reserve accounts, yield maintenance and certain other payments. Credit enhancement income declined $14.4 million and $42.2 million for the three and nine months ended September 30, 2025 compared to the same periods of 2024 as a result of loan payoffs and a cessation in loans originated through the LendingPoint and GreenSky programs. The Company is currently operating only one such program due to the sale of the LendingPoint portfolio and GreenSky portfolio, in the fourth quarter of 2024 and the second quarter of 2025, respectively.
Previous wording
Other noninterest income. Other income decreased $2.9 million for the six months ended June 30, 2025, as compared to the same period in 2024. The Company recognized incremental servicing revenues related to the GreenSky portfolio of $0.3 million in the first quarter of 2025 compared to $3.7 million in the same period of 2024.
Current wording
Other noninterest income. Other income decreased $3.2 million for the nine months ended September 30, 2025, as compared to the same period in 2024. The Company recognized incremental servicing revenues related to the GreenSky portfolio of $0.3 million in the first quarter of 2025 compared to $3.7 million in the same period of 2024.
Previous wording
Noninterest Expense. The following table sets forth the major components of noninterest expense for the three and six months ended June 30, 2025 and 2024:
Current wording
Noninterest Expense. The following table sets forth the major components of noninterest expense for the three and nine months ended September 30, 2025 and 2024:
Previous wording
Salaries and employee benefits. For the three months ended June 30, 2025, salaries and employee benefits expense increased $2.8 million, as compared to the same period in 2024, primarily due to annual salary increases, severance expense of $0.8 million, and increased variable compensation expense, including commissions and annual bonuses. Severance expense accounts for $2.4 million of the $5.1 million increase in salaries and employee benefits expense for the six months ended June 30, 2025, compared to the same period of 2024. The Company employed 880 employees at June 30, 2025 compared to 895 employees at June 30, 2024.
Current wording
Salaries and employee benefits. For the three months ended September 30, 2025, salaries and employee benefits expense increased $2.0 million, as compared to the same period in 2024, primarily due to annual salary increases, severance expense of $0.8 million, and increased variable compensation expense, including commissions and annual bonuses. Severance expense accounts for $2.9 million of the $7.1 million increase in salaries and employee benefits expense for the nine months ended September 30, 2025, compared to the same period of 2024. The Company employed 869 employees at September 30, 2025 compared to 907 employees at September 30, 2024.
Previous wording
Professional services expense. The $0.5 million and $1.0 million increases in professional services expense for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024, were primarily the result of increased audit and consulting fees related to the evaluation of the accounting and reporting of the Company's third-party lending and servicing programs.
Current wording
Professional services expense. The $0.3 million and $1.3 million increases in professional services expense for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024, were primarily the result of increased audit and consulting fees related to the evaluation of the accounting and reporting of the Company's third-party lending and servicing programs.
Previous wording
Other expense. Total noninterest expense decreased $3.6 million and $3.7 million in the three and six months ended June 30, 2025, as compared to the same period of 2024. Other expense for the second quarter of 2024 included $4.1 million related to OREO impairment, OREO property taxes, and expenses related to various legal actions.
Current wording
Other expense. Total noninterest expense decreased $4.3 million in the nine months ended September 30, 2025, as compared to the same period of 2024, as the 2024 period included expenses of $4.1 million related to OREO impairment, OREO property taxes, and various legal actions.
Previous wording
Income Tax Expense. The Company's effective tax rates were 19.1% and 19.4% for the three and six months ended June 30, 2025, respectively, compared to 19.2% and 20.5% for the three and six months ended June 30, 2024, respectively. The effective tax rate calculation for the six months June 30, 2025, excludes the goodwill impairment charge of $154.0 million, as this item is not deductible for tax purposes.
Current wording
Income Tax Expense. The Company's effective tax rates were 33.2% and 18.2% for the three nine months ended September 30, 2025 and 2024, respectively. The Company recognized a $1.3 million return to provision adjustment in the third quarter of 2025. The effective tax rates were 23.1% and 19.8% for the nine months ended September 30, 2025 and 2024, respectively. The effective tax rate calculation for the nine months ended September 30, 2025, also excludes the goodwill impairment charge of $154.0 million, as this item is not deductible for tax purposes.
Previous wording
Assets. Total assets were $7.11 billion at June 30, 2025, as compared to $7.51 billion at December 31, 2024.
Current wording
Assets. Total assets were $6.91 billion at September 30, 2025, as compared to $7.51 billion at December 31, 2024.
Previous wording
Loans secured by office space totaled $138.3 million and $146.3 million at June 30, 2025 and December 31, 2024, respectively, primarily located in suburban locations in Illinois and Missouri.
Current wording
Loans secured by office space totaled $134.8 million and $146.3 million at September 30, 2025 and December 31, 2024, respectively, primarily located in suburban locations in Illinois and Missouri.
Previous wording
Lease financing. Our equipment leasing business provides financing leases to varying types of businesses nationwide for purchases of business equipment and software. The financing is secured by a first priority interest in the financed asset and generally requires monthly payments.
Current wording
Lease financing. Our equipment leasing business provided financing leases to varying types of businesses nationwide for purchases of business equipment and software. The financing is secured by a first priority interest in the financed asset and generally requires monthly payments.
Previous wording
•Equipment finance portfolio includes loans and leases originated to varying types of businesses throughout the United States for purchases of business equipment and software. As previously disclosed, management has determined to reduce the overall size of the Company's equipment finance portfolio following elevated charge-offs in the portfolio during 2024.
Current wording
•Equipment finance portfolio includes loans and leases originated to varying types of businesses throughout the United States for purchases of business equipment and software. As previously disclosed, management has determined to reduce the overall size of the Company's equipment finance portfolio following elevated charge-offs in the portfolio during 2024, and the Company ceased originating new equipment fiance leases effective September 30, 2025..
Previous wording
Total loans decreased $132.3 million, or 2.6%, to $5.04 billion at June 30, 2025, as compared to December 31, 2024. Community bank portfolio increased $141.0 million, or 4.4%, during the first half of 2025. This growth partially offset the strategic declines in the Specialty finance and Equipment finance portfolios of $355.9 million and $96.7 million, respectively. The increase in our Non-core and other business sector is the due to the financing we provided related to the sale of the GreenSky portfolio.
Current wording
Total loans decreased $300.0 million, or 5.8%, to $4.87 billion at September 30, 2025, as compared to December 31, 2024. Community bank portfolio increased $90.9 million, or 2.9%, during the first nine months of 2025. This growth partially offset the strategic declines in the Specialty finance and Equipment finance portfolios of $384.3 million and $170.5 million, respectively. The increase in our Non-core and other business sector is the due to the financing we provided related to the sale of the GreenSky portfolio.
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Previous report — wording carried elsewhere
The allowance allocated to residential real estate loans totaled $7.1 million, or 1.97% of total residential real estate loans, at June 30, 2025, decreasing $0.9 million, from $8.0 million, or 2.10% of total residential real estate loans, at December