Midland States hits near 5-year low as bad loan provisions drive Q3 profit miss
Community lender Midland States Bancorp's MSBI.O shares fall as much as 10.5%, hitting a near five-year low
Late Thursday, MSBI reported quarterly profit below expectations for the second consecutive quarter as bad loan provisions weighed
Provision for credit losses was $20.5 million in Q3, well above estimates of $8.3 million due to an increase in MSBI's loss given default assumptions on equipment finance portfolio
Bank has also ceased equipment finance production effective September 30
"We are encouraged by management's decision to cease equipment finance production that should support lower future credit costs. We anticipate shares will underperform tomorrow given the credit-driven EPS miss," brokerage Piper Sandler said
All five brokerages covering the stock rate it "hold"; median PT $20.50 - data compiled by LSEG
MSBI stock down 40% YTD
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