Midland States in Ill. posts loss due to purge of LendingPoint, Greensky loans
Midland States Bancorp in Effingham, Ill., reported a quarterly loss after stepping up efforts to distance itself from two lending arrangements.
The $7.5 billion-asset company said in a press release that it lost $54.8 million in the fourth quarter. The loss included a $50.7 million loan-loss provision tied to the sale of its LendingPoint consumer loan portfolio and a plan to sell its Greensky portfolio.
The company sold $87.1 million of LendingPoint loans, with proceeds used to reduce wholesale funding. It aims to shed $371.7 million of Greensky loans, or roughly 89% of the portfolio, in the first quarter.
Midland States stopped working with LendingPoint in 2023 and it had recently stopped making loans through point-of-sale lender Greensky.
Overall, the company had $102.7 million in net charge-offs and a $93.5 million loan-loss provision in the fourth quarter.
“Improving credit quality is our number one priority and in the fourth quarter we took significant steps to reduce credit risk and address our underlying credit issues,” Jeffrey Ludwig, the company’s president and CEO, said in the release.
“During the quarter we made the difficult decision to exit our noncore consumer portfolio and charge off deteriorating credits … to better position the company to grow our core community banking business,” he added. “Our team also reviewed our credit risk appetite profile and tightened standards going forward.”