Q3 2021 Midland States Bancorp Inc Earnings Conference Call

Midland States Bancorp, Inc.

NASDAQ: MSBI

Third Quarter 2021 Earnings Call

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Forward-LookingStatements. This presentation may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements expressing management's current expectations, forecasts of future events or long-term goals may be based upon beliefs, expectations and assumptions of Midland's management, and are generally identifiable by the use of words such as "believe," "expect," "anticipate," "plan," "intend," "estimate," "may," "will," "would," "could," "should" or other similar expressions. All statements in this presentation speak only as of the date they are made, and Midland undertakes no obligation to update any statement. A number of factors, many of which are beyond the ability of Midland to control or predict, could cause actual results to differ materially from those in its forward-looking statements including the effects of the Coronavirus Disease 2019 ("COVID-19") pandemic, including its potential effects on the economic environment, our customers and our operations, as well as any changes to federal, state or local government laws, regulations or orders in connection with the pandemic. These risks and uncertainties should be considered in evaluating forward-looking statements, and undue reliance should not be placed on such statements. Additional information concerning Midland and its businesses, including additional factors that could materially affect Midland's financial results, are included in Midland's filings with the Securities and Exchange Commission.

Use of Non-GAAPFinancial Measures. This presentation may contain certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States ("GAAP"). These non-GAAP financial measures include "Adjusted Earnings," "Adjusted Pre-Tax,Pre-Provision Income," "Adjusted Diluted Earnings Per Share," "Adjusted Return on Average Assets," "Adjusted Return on Average Shareholders' Equity," "Adjusted Return on Average Tangible Common Equity," "Adjusted Pre-Tax, Provision Return on Average Assets," "Efficiency Ratio," "Tangible Common Equity to Tangible Assets," "Tangible Book Value Per Share," and "Return on Average Tangible Common Equity." The Company believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the Company's funding profile and profitability. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures. Not all companies use the same calculation of these measures; therefore this presentation may not be comparable to other similarly titled measures as presented by other companies. Reconciliations of these non-GAAP measures are provided in the Appendix section of this presentation.

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Overview of 3Q21

3Q21 Earnings	• Net income of $19.5 million, or $0.86 diluted EPS
• 3Q21 results included a $3.0 million commercial MSR impairment
	• Adjusted pre-tax,pre-provision earnings(1) of $28.4 million, up from $27.0 million in prior quarter
	• Total loans increased 8.2% annualized, excluding commercial FHA warehouse and PPP loans
Strong
• Well balanced loan growth with increases in commercial, CRE and consumer loans offsetting declines
Balance Sheet	in PPP loans and residential real estate loans
Growth	• Total deposits increased 7.8% from end of prior quarter, primarily driven by higher servicing
	deposits and other commercial deposits
	• Elimination of higher cost funding sources in 2Q21 resulted in 11 bp decline in cost of average
Reduced Cost of Funds
interest-bearing liabilities
Drives NIM Expansion
• Lower cost of funds resulted in 5 bp increase in net interest margin
	• Net interest income and recurring fee income increasing while operating expenses remain
Improving
relatively stable
Operating Leverage
• Efficiency ratio(1) improved to 58.78% from 60.19% in prior quarter

		Positive Trends	•	Nonperforming loans declined 11.0% from the end of the prior quarter
		•	Net charge-offs declined 25.7% from the prior quarter
		in Asset Quality
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Notes:
	(1) Represents a non-GAAP financial measure. See "Non-GAAP Reconciliation" in the appendix.

Paycheck Protection Program Overview

Paycheck Protection Program

(as of 9/30/21)

Loans Outstanding	$82.4 million
Round 1	$12.4 million
Round 2	$70.0 million
Total Fees Earned	$15.3 million
Fees Recognized in 3Q21	$2.2 million
Remaining Fees to be Recognized	$3.5 million

Paycheck Protection Program

Loan Forgiveness

	As of 6/30/21	As of 9/30/21
Loans Submitted to SBA	$263.8 million	$313.9 million
Loans Forgiven by SBA	$238.3 million	$300.8 million
Percentage of Total Round 1	83.7%	95.8%
PPP Loans Forgiven
Percentage of Total Round 1	62.9%	79.1%
and 2 PPP Loans Forgiven

Impact on 3Q21 Financials

	At or for the	Metrics Excluding
	Three Months Ended 9/30/21	PPP Impact
Total Loans	$4.92 billion	$4.84 billion
Average Loans	$4.80 billion	$4.69 billion
Net Interest Income FTE(1)	$51.8 million	$49.3 million
Net Interest Margin(1)	3.34%	3.24%
ACL/Total Loans	1.13%	1.15%

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1. Loan fees and deferred loan origination costs being amortized over an estimated 24 to 60 month life of PPP loans

Loan Deferral Overview

Total Loan Deferrals

	As of	As of	As of
	Mar. 31, 2021	Jun. 30, 2021	Sep. 30, 2021
Total Loans Deferred	$219.1 million	$107.3 million	$34.3 million
% of Total Loans	4.5%	2.2%	0.7%

Deferrals by Industry

Deferral Type

(as of September 30, 2021)

Full Payment Deferral	$3.2 million
Deferred Loans Making	$31.1 million
I/O or Other Payments

(as of September 30, 2021)

($ in millions)

Hotels/Motels

$7.1

All Others <4%21% $12.4 36%

Transit & Ground

Passenger

$6.8 20%

Assisted Living

$8.0 23%

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