Midland States Bancorp

To be our communities' trusted financial partner by becoming the leading high-performing community bank in the Midwest.

Midland States Bancorp SWOT Analysis

Updated: October 6, 2025 • 2025-Q4 Analysis

How to Use This Analysis

This analysis for Midland States Bancorp was created using Alignment.io™ methodology - a proven strategic planning system trusted in over 75,000 strategic planning projects. We've designed it as a helpful companion for your team's strategic process, leveraging leading AI models to analyze publicly available data.

While this represents what AI sees from public data, you know your company's true reality. That's why we recommend using Alignment.io and The System of Alignment™ to conduct your strategic planning—using these AI-generated insights as inspiration and reference points to blend with your team's invaluable knowledge.

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The Midland States Bancorp SWOT Analysis reveals a classic community banking stalwart at a critical juncture. Its core strengths—a robust wealth management division and a loyal deposit base—provide a stable foundation. However, this is challenged by significant weaknesses in operational efficiency and net interest margin compression, common industry headwinds. The primary opportunity lies in leveraging its wealth division and pursuing strategic M&A to gain necessary scale. The most pressing threat is intense competition on funding costs and the ever-present risk of a recession impacting credit quality. To achieve its vision, Midland must focus relentlessly on defending margins, scaling its fee-based businesses, and driving down its efficiency ratio to fund future growth and technology investments. This strategic pivot is essential for thriving in the consolidating regional banking landscape.

Commerce Bancshares Old National Bancorp Associated Banc-Corp Busey Bank First Busey Corporation

No past cycles

Mission & Vision SWOT Analysis OKR Plan Retrospective AI Strategy Data Acquisition

To be our communities' trusted financial partner by becoming the leading high-performing community bank in the Midwest.

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Strengths

WEALTH: Strong $4.3B+ AUM wealth division provides stable fee income
DEPOSITS: Granular, loyal core deposit base with low historical volatility
CREDIT: Disciplined underwriting results in consistent credit quality
COMMUNITY: Deep roots and brand loyalty in core central Illinois markets
CAPITAL: Solid capital ratios provide stability and capacity for growth

Weaknesses

EFFICIENCY: Ratio near 63% is higher than peer average, pressuring profits
NIM: High sensitivity to funding costs causing Net Interest Margin pressure
SCALE: Lack of scale vs larger rivals limits tech spend and operating leverage
GEOGRAPHY: Revenue heavily concentrated in Illinois and Missouri economies
DIGITAL: Consumer-facing digital tools lag behind national bank offerings

Opportunities

CROSS-SELL: Deepen relationships with wealth clients via banking products
M&A: Acquire smaller banks in adjacent markets to gain scale and deposits
FEE INCOME: Expand treasury management services for commercial clients
RISING RATES: Opportunity to reprice assets higher if funding costs stabilize
SPECIALTY LENDING: Grow niche lending programs with higher risk-adjusted returns

Threats

COMPETITION: Intense pressure on loan/deposit pricing from banks & CUs
RECESSION: Economic slowdown could increase credit losses, especially in CRE
FUNDING: Increased competition for deposits driving up interest expense
REGULATION: Heightened regulatory scrutiny on liquidity and capital planning
FINTECH: Non-bank lenders and deposit platforms are eroding market share

Key Priorities

MARGINS: Defend net interest margin through disciplined pricing and funding
WEALTH: Accelerate wealth management growth as a key non-interest driver
EFFICIENCY: Drive operational efficiency to improve profitability and fund tech
RISK: Proactively manage credit risk in a volatile macroeconomic environment

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Midland States Bancorp OKR

Updated: October 6, 2025 • 2025-Q4 Analysis

This Midland States Bancorp OKR plan is a masterclass in focus and execution. It directly translates the strategic imperatives from the SWOT into clear, measurable actions. The objectives—FORTRESS MARGINS, ACCELERATE WEALTH, DRIVE EFFICIENCY, and BULLETPROOF CREDIT—are not generic goals; they are a battle plan for the precise challenges facing a regional bank today. The key results are sharp, outcome-driven, and rightly prioritize margin defense and operational excellence, which are the financial engines for funding growth in the wealth division. This plan provides the clarity and accountability needed to navigate the competitive landscape and drive shareholder value. It’s a pragmatic yet ambitious roadmap for achieving the vision of becoming a top-performing Midwest bank.

Commerce Bancshares Old National Bancorp Associated Banc-Corp Busey Bank First Busey Corporation

No past cycles

Mission & Vision SWOT Analysis OKR Plan Retrospective AI Strategy Data Acquisition

To be our communities' trusted financial partner by becoming the leading high-performing community bank in the Midwest.

FORTRESS MARGINS

Master our profitability by defending net interest margin.

PRICING: Implement a new deposit pricing model to reduce interest expense by 5 basis points vs. plan
FUNDING: Grow non-interest-bearing demand deposits to represent 32% of total deposits by year-end
LOANS: Increase yield on new loan originations by 25 basis points over the portfolio average
ANALYSIS: Launch a granular funds transfer pricing dashboard to optimize branch-level profitability

ACCELERATE WEALTH

Make wealth management our primary growth engine.

AUM: Achieve $550 million in net new Asset Under Management growth from new and existing clients
REFERRALS: Generate 200 qualified referrals from commercial/retail bankers yielding a 25% conversion rate
REVENUE: Increase wealth management revenue to constitute 25% of the bank's total non-interest income
INTEGRATION: Launch a unified client portal showing a holistic view of banking and investment accounts

DRIVE EFFICIENCY

Achieve top-quartile operational excellence.

RATIO: Reduce the non-GAAP efficiency ratio from 63% to a sustainable sub-59% level by Q4
AUTOMATION: Automate 5 key back-office processes, reducing manual processing time by 40% for those tasks
VENDORS: Consolidate 3 major vendor contracts to achieve a 10% annualized cost savings on those services
FOOTPRINT: Optimize 10% of our branch network based on a new profitability and traffic analysis

BULLETPROOF CREDIT

Maintain pristine credit quality through uncertainty.

NPAs: Keep the ratio of non-performing assets to total assets below 0.50% for the full year
STRESS TEST: Conduct portfolio-level stress tests on the CRE office portfolio and present findings to the board
MONITORING: Reduce the average time to identify and report covenant breaches on large loans by 30%
REVIEWS: Complete annual credit reviews for 100% of commercial relationships over the $1 million threshold

METRICS

Efficiency Ratio: < 59%
Return on Average Assets (ROAA): > 1.10%
Net Interest Margin (NIM): > 3.25%

VALUES

Community Focus
Unquestionable Integrity
Relationship-Based Service
Accountability & Performance

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Midland States Bancorp Retrospective

AI-Powered Insights

Claude

Gemini

GPT

Midland States Bancorp Q1 2024 Earnings Release and Investor Presentation
Midland States Bancorp 2023 Form 10-K SEC Filing
Company Investor Relations Website (midlandsb.com)
Public financial data from Yahoo Finance for MSBI
Analysis of US regional banking industry reports and trends

Commerce Bancshares Old National Bancorp Associated Banc-Corp Busey Bank First Busey Corporation

No past cycles

Mission & Vision SWOT Analysis OKR Plan Retrospective AI Strategy Data Acquisition

To be our communities' trusted financial partner by becoming the leading high-performing community bank in the Midwest.

Toggle Theme

What Went Well

LOANS: Solid loan growth in core commercial and industrial portfolios
WEALTH: Continued positive net flows and revenue growth in wealth management
CREDIT: Nonperforming assets remained stable and below peer averages
CAPITAL: Maintained strong regulatory capital ratios, providing flexibility
DEPOSITS: Grew core deposits, demonstrating franchise strength

Not So Well

NIM: Net interest margin compressed due to rapidly rising funding costs
EXPENSE: Non-interest expenses increased, pushing efficiency ratio higher
MORTGAGE: Mortgage banking income declined significantly in rising rate environment
STOCK: Share price underperformed banking indices due to margin concerns
FEE INCOME: Service charge income was flat, showing need for diversification

Learnings

FUNDING: Our balance sheet is more asset-sensitive than initially modeled
EFFICIENCY: Organic revenue growth alone cannot outpace expense inflation
DIVERSIFICATION: Non-interest income from wealth is crucial for earnings stability
COMMUNICATION: Market is highly sensitive to commentary on future NIM trajectory
INTEGRATION: Must accelerate realizing cost saves from prior acquisitions

Action Items

PRICING: Implement more dynamic deposit pricing strategies to manage costs
COSTS: Launch a formal expense reduction initiative across the enterprise
WEALTH: Increase referral targets from commercial bankers to wealth advisors
TECHNOLOGY: Evaluate tech investments for clear ROI on efficiency improvement
HIRING: Freeze hiring for non-revenue generating roles until efficiency improves

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Organization	SWOT Analysis	OKR Plan	Top 6	Retrospective

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Midland States Bancorp Market

AI-Powered Insights

Claude

Gemini

GPT

Midland States Bancorp Q1 2024 Earnings Release and Investor Presentation
Midland States Bancorp 2023 Form 10-K SEC Filing
Company Investor Relations Website (midlandsb.com)
Public financial data from Yahoo Finance for MSBI
Analysis of US regional banking industry reports and trends

Founded: 1881
Market Share: Significant share in central Illinois; smaller share in St. Louis MSA.
Customer Base: Small-to-medium businesses, high-net-worth individuals, retail customers.
Category:
Regional Banking
SIC Code: 6021 National Commercial Banks
NAICS Code: 522110 Commercial Banking
Location: Effingham, Illinois
Zip Code: 62401
Congressional District: IL-12 CARBONDALE
Employees: 1100

Competitors

Commerce Bancshares View Analysis

Old National Bancorp View Analysis

Associated Banc-Corp Request Analysis

Busey Bank Request Analysis

First Busey Corporation Request Analysis

Products & Services

No products or services data available

Distribution Channels

Midland States Bancorp Business Model Analysis

AI-Powered Insights

Claude

Gemini

GPT

Midland States Bancorp Q1 2024 Earnings Release and Investor Presentation
Midland States Bancorp 2023 Form 10-K SEC Filing
Company Investor Relations Website (midlandsb.com)
Public financial data from Yahoo Finance for MSBI
Analysis of US regional banking industry reports and trends

Problem

SMBs need capital and responsive service
HNWIs require sophisticated wealth planning
Communities need a committed local bank

Solution

Tailored commercial loans and treasury svcs
Integrated trust, investment & planning
Personalized retail banking & mortgages

Key Metrics

Net Interest Margin (NIM) & Efficiency Ratio
Loan Growth & Credit Quality (NPAs)
Wealth Management AUM & Revenue Growth

Unique

Deep local market expertise since 1881
Integrated banking & wealth management model
Direct access to local decision makers

Advantage

Sticky, low-cost core deposit franchise
Strong brand reputation and community trust
Experienced team of relationship managers

Channels

Branch Network & Commercial Bankers
Digital Banking (Web/Mobile) Platforms
Wealth Advisors & Community Events

Customer Segments

Small-to-Medium Sized Businesses (SMBs)
High-Net-Worth Individuals & Families
Retail Consumers in core geographic markets

Costs

Interest expense on deposits and borrowings
Salaries, benefits, and incentive comp
Technology, occupancy, and marketing spend

Midland States Bancorp Product Market Fit Analysis

Updated: October 6, 2025

Midland States Bancorp provides integrated financial solutions for Midwest businesses and families. It combines the sophisticated capabilities of a larger institution, like robust wealth management, with the high-touch, responsive service of a true community bank. This unique blend allows clients to achieve their financial goals faster with a trusted, local partner who is invested in their success.

We provide integrated financial solutions tailored to your unique goals.

Our local expertise and relationships help you navigate and win.

You get direct access to decision-makers for fast, responsive service.

Before State

Fragmented financial relationships
Impersonal service from large banks
Limited access to local decision-makers
Generic, non-tailored financial advice

After State

Integrated banking and wealth management
A trusted, single point of contact
Direct access to experienced bankers
Holistic, personalized financial strategy

Negative Impacts

Missed growth opportunities for business
Suboptimal wealth management outcomes
Frustration with slow, bureaucratic process
Feeling like just another account number

Positive Outcomes

Accelerated business and personal growth
Confidence in long-term financial plan
Fast, responsive service for urgent needs
Optimized financial performance and goals

Key Metrics

Customer Retention Rates - High 90s for core deposit customers

Net Promoter Score (NPS) - Estimated 40-50 range, typical for regional banks

User Growth Rate - Low single-digit organic customer growth annually

Customer Feedback/Reviews - Limited public reviews; primarily relationship-based feedback

Repeat Purchase Rates - High cross-sell ratio of deposit, loan, and wealth products

Requirements

Commitment to a relationship-based model
Investment in skilled, local talent
Seamless integration of services/tech
Empowered local leadership and autonomy

Why Midland States Bancorp

Dedicated relationship managers for clients
Joint planning between banking and wealth
Digital tools that supplement, not replace
Active community leadership and involvement

Midland States Bancorp Competitive Advantage

Deep local market knowledge and networks
Culture of personalized, high-touch service
Synergy between commercial banking & wealth
Long-standing trust built over 140+ years

Proof Points

$4.3B+ in wealth management AUM
Consistent recognition as a top local bank
High client retention and referral rates
Numerous testimonials from local businesses

Midland States Bancorp Market Positioning

AI-Powered Insights

Claude

Gemini

GPT

Midland States Bancorp Q1 2024 Earnings Release and Investor Presentation
Midland States Bancorp 2023 Form 10-K SEC Filing
Company Investor Relations Website (midlandsb.com)
Public financial data from Yahoo Finance for MSBI
Analysis of US regional banking industry reports and trends

Strategic pillars derived from our vision-focused SWOT analysis

Deepen penetration in core Illinois/Missouri markets.

Scale wealth management to be a top non-interest income driver.

Blend high-touch service with modern digital capabilities.

Achieve top-quartile efficiency through optimization.

What You Do

Provide comprehensive banking, wealth management, and insurance services.

Target Market

Midwest communities, businesses, and affluent families.

Differentiation

High-touch, relationship-based service model
Integrated wealth management offering
Deep community involvement and local decision-making

Revenue Streams

Net interest income from loans and securities
Fees from wealth management and deposit services

Midland States Bancorp Operations and Technology

AI-Powered Insights

Claude

Gemini

GPT

Midland States Bancorp Q1 2024 Earnings Release and Investor Presentation
Midland States Bancorp 2023 Form 10-K SEC Filing
Company Investor Relations Website (midlandsb.com)
Public financial data from Yahoo Finance for MSBI
Analysis of US regional banking industry reports and trends

Company Operations

Organizational Structure: Bank holding company with bank and wealth management subsidiaries.
Supply Chain: Capital from depositors & wholesale funding; vendors for tech/operations.
Tech Patents: Utilizes third-party core banking software; no significant patents.
Website: https://www.midlandsb.com/

Top Clients

Board Members

Midland States Bancorp Competitive Forces

Threat of New Entry

MODERATE: High regulatory/capital barriers for de novo banks, but low barriers for fintechs to launch specific financial products.

Supplier Power

MODERATE: Depositors (suppliers of capital) have increasing power in a high-rate environment, driving up funding costs.

Buyer Power

MODERATE: Commercial clients have moderate power due to relationship depth, while retail customers have high power with many choices.

Threat of Substitution

HIGH: Fintechs offering high-yield savings, digital lending, and automated investing are significant substitutes for core services.

Competitive Rivalry

VERY HIGH: Intense competition from national banks (Chase), super-regionals (PNC), community banks, and credit unions on price.

Analysis of AI Strategy

Updated: October 6, 2025 • 2025-Q4 Analysis

The Midland States Bancorp AI SWOT Analysis highlights a significant opportunity to enhance its community banking model, not replace it. The company's core strength is its proprietary client data and trusted relationships, which can provide the essential context AI often lacks. However, internal weaknesses in talent and legacy infrastructure are formidable barriers. The most immediate path to value is not moonshot AI development, but targeted deployment for operational efficiency—automating back-office tasks and refining credit models. This pragmatic approach will directly improve the bank's key challenge: its efficiency ratio. The strategic imperative is to partner with specialized fintechs to acquire AI capabilities, mitigating the high cost and talent gap of in-house development. This allows Midland to leverage AI to strengthen its existing advantages in risk management and personalized service, fending off tech-forward competitors.

Commerce Bancshares Old National Bancorp Associated Banc-Corp Busey Bank First Busey Corporation

No past cycles

Mission & Vision SWOT Analysis OKR Plan Retrospective AI Strategy Data Acquisition

To be our communities' trusted financial partner by becoming the leading high-performing community bank in the Midwest.

Strengths

DATA: Access to proprietary, long-term transaction data for SMB clients
TRUST: High level of client trust facilitates adoption of AI-driven advice
RELATIONSHIPS: Bankers can validate and contextualize AI-generated insights
INTEGRATION: Potential to link banking and wealth data for a holistic AI view
COMPLIANCE: Existing robust compliance framework can be adapted for AI governance

Weaknesses

TALENT: Lack of in-house AI/ML engineering and data science expertise
INFRASTRUCTURE: Legacy core systems hinder real-time data access and processing
SCALE: Insufficient data volume compared to money-center banks for model training
BUDGET: Limited budget for large-scale AI R&D and platform investments
CULTURE: Risk-averse banking culture may slow adoption of AI experimentation

Opportunities

UNDERWRITING: AI models to improve speed and accuracy of commercial credit risk
AUTOMATION: Use RPA and GenAI to automate routine back-office and compliance tasks
MARKETING: Hyper-personalize product offers based on client spending patterns
FRAUD: Advanced AI-powered fraud detection to reduce losses and false positives
SERVICE: AI chatbots to handle common customer inquiries, freeing up staff

Threats

COMPETITORS: Large banks deploying sophisticated AI to steal market share
FINTECH: AI-native fintechs offering superior, lower-cost niche products
REGULATION: Evolving AI regulations creating new compliance burdens and risks
BIAS: Risk of biased AI models leading to regulatory fines and reputational damage
COST: High cost of third-party AI solutions eroding any efficiency gains

Key Priorities

AUTOMATION: Prioritize AI for back-office automation to improve efficiency ratio
RISK: Deploy AI in credit underwriting and fraud to enhance risk management
PERSONALIZATION: Leverage AI to deliver personalized marketing and product offers
PARTNERSHIP: Partner with vetted fintech vendors for AI capabilities vs building

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Midland States Bancorp Financial Performance

AI-Powered Insights

Claude

Gemini

GPT

Midland States Bancorp Q1 2024 Earnings Release and Investor Presentation
Midland States Bancorp 2023 Form 10-K SEC Filing
Company Investor Relations Website (midlandsb.com)
Public financial data from Yahoo Finance for MSBI
Analysis of US regional banking industry reports and trends

Profit: $67.9 million (Net Income FY 2023)

Market Cap: $485 million (as of late 2024)

Stock Performance

Annual Report: Available on Investor Relations website

Debt: Subordinated debt and FHLB advances

ROI Impact: ROE of 8.24% (FY 2023)

SWOT Index

Composite strategic assessment with 10-year outlook

/ 100

Focused Competitor

ICM Index

STRATEGIC ADVISOR ASSESSMENT

Midland is a solid, focused competitor in a mature industry. Its vision is category-shaping, not world-changing (Ambition=60). The OKRs are well-aligned to solve key weaknesses (Achievability=0.75), but significant margin and efficiency headwinds (Downside > Upside) cap its potential. The strategy is clear but operates in a crowded market. A modest growth multiplier reflects the challenge of achieving breakout growth in the highly competitive regional banking sector without a transformative technological or market advantage.

SWOT Factors

Upside: 66.7 Risk: 76.7

OKR Impact

AI Leverage

Top 3 Strategic Levers

DRIVE EFFICIENCY: Relentless focus on lowering the efficiency ratio

ACCELERATE WEALTH: Scale non-interest income to de-risk the P&L

PURSUE M&A: Use strategic acquisitions to gain scale and leverage

AI Disclosure

This report was created using the Alignment Method—our proprietary process for guiding AI to reveal how it interprets your business and industry. These insights are for informational purposes only and do not constitute financial, legal, tax, or investment advice.

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