8-K: Midland States Bancorp Receives Nasdaq Delisting Warning Due to Delayed Financial Filings

Midland States Bancorp, Inc. has received an expected notice from Nasdaq regarding non-compliance with listing rules due to the delayed filing of its 2024 Annual Report and Q1 2025 Quarterly Report, with a plan to regain compliance due by June 2, 2025.

Summary

• Midland States Bancorp, Inc. (MSBI) received an expected notice from The Nasdaq Stock Market LLC on May 19, 2025, indicating non-compliance with Nasdaq Listing Rule 5250(c)(1).
• The non-compliance stems from the company's failure to timely file its Annual Report on Form 10-K for the period ended December 31, 2024, and its Quarterly Report on Form 10-Q for the period ended March 31, 2025.
• This 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.
• Midland States Bancorp has until June 2, 2025, to submit a plan to Nasdaq to regain compliance with the Listing Rule.
• Nasdaq has the discretion to grant the company up to 180 calendar days from the Form 10-K's due date, or until September 29, 2025, to regain compliance.
• The company attributes the delays to ongoing evaluations of accounting and financial reporting for third-party lending and servicing arrangements, including documentation collection and analysis.
• Additionally, the company is completing an evaluation of potential goodwill impairment, which involves obtaining third-party valuation information.
• Midland States Bancorp intends to take necessary steps to regain compliance as soon as practicable.

Sentiment

Score: 4

Explanation: The document conveys a negative sentiment due to the company's non-compliance with Nasdaq listing rules and delayed financial filings, which are serious regulatory issues. However, the 'expected' nature of the notice and the company's stated intent to regain compliance, along with no immediate trading halt, slightly mitigate the severity, preventing a lower score.

Positives

• The notice from Nasdaq was 'expected' by the company, suggesting management was aware of the impending non-compliance and is prepared to address it.
• 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, preventing immediate disruption to investors.

Negatives

• Midland States Bancorp is not in compliance with Nasdaq Listing Rule 5250(c)(1) due to delayed financial filings.
• The company failed to file its Annual Report on Form 10-K for the period ended December 31, 2024, and its Quarterly Report on Form 10-Q for the period ended March 31, 2025, by their respective due dates.
• The delays are attributed to complex evaluations of third-party lending and servicing arrangements and potential goodwill impairment, indicating ongoing accounting and financial reporting challenges.

Risks

• There is a risk that the completion and filing of the Form 10-K or Form 10-Q will take longer than expected, potentially extending the period of non-compliance.
• Nasdaq may not accept the company's submitted compliance plan, or the duration of any granted exception period may be insufficient.
• The company faces the risk of being unable to meet Nasdaq's continued listing requirements, which could lead to delisting of its securities.
• The ongoing evaluations of accounting and financial reporting, including goodwill impairment, could potentially impact the company's previously reported financial results for the year ended December 31, 2024.

Future Outlook

Midland States Bancorp intends to take all necessary steps to regain compliance with Nasdaq's listing rules as soon as practicable. The company is actively working to complete its evaluation of third-party lending and servicing arrangements and goodwill impairment, which are critical to filing the delayed Form 10-K and Form 10-Q. The company anticipates filing these reports and completing its audit for the year ended December 31, 2024, though the exact timing and potential impact on previously reported financial results remain subject to the ongoing evaluations.

Management Comments

• "The Company intends to take the necessary steps to regain compliance with Nasdaq's listing rules as soon as practicable."

Industry Context

This announcement highlights a common regulatory challenge faced by publicly traded companies, particularly in the financial sector, where timely and accurate financial reporting is paramount. Delays in filing annual and quarterly reports can signal underlying issues in internal controls, accounting processes, or significant financial evaluations, which are closely scrutinized by regulators and investors. For a community-based financial holding company like Midland States Bancorp, maintaining regulatory compliance and investor confidence is crucial for its operations and market standing.

Stakeholder Impact

• Shareholders: Face increased uncertainty regarding the company's financial health and operational stability due to delayed financial disclosures and the risk of potential delisting if compliance is not regained.
• Investors: May view the company with caution due to regulatory non-compliance and the lack of up-to-date financial information, potentially impacting stock price and trading volume.
• Regulatory Authorities: Nasdaq and the SEC will closely monitor the company's progress in regaining compliance and addressing the underlying accounting issues.

Next Steps

• Submit a plan to Nasdaq by June 2, 2025, to regain compliance with the Listing Rule.
• Complete the evaluation of accounting and financial reporting of third-party lending and servicing arrangements.
• Complete the evaluation of potential goodwill impairment, including obtaining third-party valuation information.
• File the delayed Annual Report on Form 10-K for the period ended December 31, 2024.
• File the delayed Quarterly Report on Form 10-Q for the period ended March 31, 2025.

Key Dates

Recommendation

Keywords

Midland States Bancorp, MSBI, Nasdaq, delisting notice, Form 10-K, Form 10-Q, late filing, financial reporting, accounting issues, goodwill impairment, banking, financial services, regulatory compliance