Midland States Bancorp, Inc. receives expected notification of deficiency from Nasdaq related to delayed filing of Quarterly Report on Form 10-Q
- None.
- Failure to file timely Annual Report (10-K) for 2024
- Failure to file timely Q1 2025 Quarterly Report (10-Q)
- Potential goodwill impairment issues under evaluation
- Risk of delisting if compliance plan is not accepted or executed
- Ongoing accounting issues with third-party lending arrangements
Insights
MSBI faces Nasdaq compliance issues due to delayed financial filings, suggesting potential accounting problems while working toward resolution.
Midland States Bancorp (MSBI) has received a deficiency notification from Nasdaq for failing to file both its annual 10-K report and quarterly 10-Q report on time. This non-compliance with Nasdaq Listing Rule 5250(c)(1) doesn't immediately affect MSBI's listing status, but starts a remediation clock ticking.
The company has until June 2, 2025 to submit a compliance plan to Nasdaq, which could grant an extension of up to 180 days (until September 29) to fully resolve the issue. The underlying cause appears two-fold: (1) ongoing evaluation of accounting and financial reporting related to third-party lending and servicing arrangements, and (2) assessment of potential goodwill impairment requiring third-party valuations.
These delays raise several red flags. The need to review third-party lending arrangements suggests potential issues with how these transactions were previously accounted for or disclosed. Similarly, goodwill impairment evaluations typically occur when there's reason to believe an acquisition's value has deteriorated significantly below its carrying value on the balance sheet.
While MSBI states its intention to regain compliance "as soon as practicable," the complexity of both accounting issues – requiring external documentation and third-party valuations – indicates this won't be quickly resolved. Nasdaq delisting remains a worst-case scenario but appears unlikely if MSBI maintains communication with regulators and makes progress toward resolution. However, potential restatements or goodwill write-downs could materially impact previously reported financial results.
EFFINGHAM, Ill., May 23, 2025 (GLOBE NEWSWIRE) -- Midland States Bancorp, Inc. (NASDAQ: MSBI) (the “Company”) today announced that it received an expected deficiency notification letter from the Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) on May 19, 2025 (the “Notice”). The Notice indicated that the Company was not in compliance with Nasdaq Listing Rule 5250(c)(1) (the “Listing Rule”) as a result of its failure to timely file its Annual Report on Form 10-K for the year ended December 31, 2024 (the “Form 10-K”) and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 (the “Form 10-Q”), as described more fully in the Company's Form 12b-25 Notification of Late Filing (the “Form 12b-25”) filed with the Securities and Exchange Commission (the “SEC”) on May 9, 2025. The Listing Rule requires Nasdaq-listed companies to timely file all required periodic reports with the SEC.
The Notice has no immediate effect on the listing or trading of the Company’s common stock or depositary shares on the Nasdaq Global Select Market.
In accordance with Nasdaq’s listing rules, the Company has until June 2, 2025 to submit to Nasdaq a plan to regain compliance with the Listing Rule. Pursuant to the Notice, Nasdaq has the discretion to grant the Company up to 180 calendar days from the due date of the Form 10-K, or until September 29, 2025, to regain compliance. The Company intends to take the necessary steps to regain compliance with Nasdaq’s listing rules as soon as practicable.
As discussed in the Company’s Form 12b-25, filed with the Commission on May 9, 2025, the Company is completing its evaluation of the accounting and financial reporting of third-party lending and servicing arrangements, including the collection and analysis of third-party documentation. In addition, the Company is completing an evaluation of whether there is an impairment to its goodwill, including obtaining valuation information from third parties.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, which are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements regarding the Company’s expectations as to the anticipated timing of filing the Form 10-K and Form 10-Q, completion of the Company’s audit for the year ended December 31, 2024, any impact on the Company’s previously reported financial results for the year ended December 31, 2024, and statements relating to the Company’s plan to regain compliance with Nasdaq’s listing rules, as well as all statements that are not historical facts. These forward-looking statements are subject to change, and actual results may materially differ from those set forth in this press release due to certain risks and uncertainties. Factors that could cause or contribute to changes in such forward-looking statements include, but are not limited to, the expected timing and results of the Company’s audit for the year ended December 31, 2024; the risk that the completion and filing of the Form 10-K or Form 10-Q will take longer than expected; the timing of the Company’s submission of a compliance plan; Nasdaq’s acceptance of any such plan; the duration of any exception period that may be granted by Nasdaq; and the risk that the Company will be unable to meet Nasdaq’s continued listing requirements. The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements set forth in reports filed with the SEC. Undue reliance should not be placed on any forward-looking statement contained herein. These statements reflect the Company’s position as of the date of this press release. The Company expressly disclaims any undertaking to release publicly any updates or revisions to any statements to reflect any change in the Company’s expectations or any change of events, conditions, or circumstances on which any such statement is based.
About Midland States Bancorp, Inc.
Midland States Bancorp, Inc. is a community-based financial holding company headquartered in Effingham, Illinois, and is the sole shareholder of Midland States Bank. As of March 31, 2025, the Company had total assets of approximately
CONTACTS:
Jeffrey G. Ludwig, President and CEO, at jludwig@midlandsb.com or (217) 342-7321
Eric T. Lemke, Chief Financial Officer, at elemke@midlandsb.com or (217) 342-7321
FAQ
Why did MSBI receive a Nasdaq deficiency notice in May 2025?
Will MSBI be delisted from Nasdaq due to the deficiency notice?
What are the main issues causing MSBI's delayed financial filings?
How long does MSBI have to resolve the Nasdaq compliance issues?
What is the current status of MSBI stock trading on Nasdaq?
