Midland States Bancorp in Effingham, Ill., has sold substantially all of its equipment finance portfolio to an affiliate of North Mill Equipment Finance.
The $6.9 billion-asset Midland States said in a press release that NMEF paid $502 million in cash for the portfolio, which included about $599 million in loans and leases and $21 million of operating leases.
The deal excludes about $75 million of loans and leases that Midland States retained.
Midland States expects to recognize a roughly $20 millionn pretax loss on the sale in the fourth quarter. The proceeds will be used to pay down about $350 million of high-cost wholesale funding.
The sale “represents a prudent step forward in sharpening our focus on community banking and wealth management,” Jeffrey Ludwig, Midland States’ president and CEO, said in the release. The sale “follows other steps we’ve taken over the past year to improve our credit profile and enables us to redeploy capital more effectively. “
Stephens and Barack Ferrazzano advised Midland States. Moore & Van Allen advised NMEF.