MSBI - Taking A Pass On Midland States Bancorp

2025-04-14 12:55:20 ET

Summary

• Midland States Bancorp's shrinking balance sheet, declining revenue, and profits, despite its cheap valuation, make it unappealing for investment.
• The company's increased reliance on brokered deposits and significant loan contractions highlight its financial instability.
• Despite some growth in non-interest income activities, overall non-interest income has dipped, leading to a net loss in 2024.
• Given the negative return on assets and equity, I rate Midland States Bancorp a solid 'sell' with the potential for a 'strong sell'.

In my search for interesting banks, one company that I came across that, I thought, was worth digging deeper into is Midland States Bancorp ( MSBI ). With a market capitalization as of this writing of $342.2 million, the enterprise is certainly on the small side of the spectrum. These kinds of opportunities have a tendency to go overlooked by investors. The hope here is that these firms have the chance to deliver market-beating returns because the market is not paying attention to them. I have had the opportunity to find businesses like this in the past that have gone on to do very well for themselves and their investors. Unfortunately, I don't think that Midland States Bancorp will join those ranks....

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