Midland States Bancorp’s wholly owned subsidiary, Midland States Bank, has sold substantially all of its equipment finance portfolio to an affiliate of North Mill Equipment Finance (NMEF). The transaction closed on Nov. 28, 2025.
NMEF acquired the portfolio for $502 million in cash, subject to adjustment. As of Oct. 31, 2025, the equipment finance portfolio consisted of approximately $599 million in loans and leases outstanding — or $565 million net of the allowance for credit losses — and $21 million of operating leases included in other assets. The transaction excludes approximately $75 million of loans and leases that will be retained by the company, and as such, total loans and leases will be reduced by approximately $545 million as compared to Oct. 31, 2025.
The company expects to recognize a pre-tax loss on sale, including transaction-related expenses, of approximately $20 million in the fourth quarter of 2025. The company intends to use the majority of the proceeds from the sale to pay down approximately $350 million of high-cost wholesale funding.
“This transaction with NMEF represents a prudent step forward in sharpening our focus on community banking and wealth management. The sale of substantially all of the equipment finance portfolio follows other steps we’ve taken over the past year to improve our credit profile and enables us to redeploy capital more effectively,” Jeffrey G. Ludwig, president and CEO of Midland States Bancorp, said. “Altogether, these steps have strengthened our balance sheet, reduced our exposure to higher-risk asset classes, and helped position us well to continue growing the community bank into 2026.”
David C. Lee, chairman and CEO of NMEF, said, “The strength of our long-standing banking, capital markets and equity capital relationships enabled us to execute with the speed and certainty required for this complicated transaction in a compressed timeframe. We’re pleased to welcome several Midland Equipment Finance employees into the NMEF family as we continue to scale our platform. As market volatility creates challenges for holders of non-core portfolios, NMEF remains a reliable partner for those seeking a thoughtful and efficient exit or financial partner.”
Stephens served as exclusive financial adviser to the company in connection with the transaction. Barack Ferrazzano served as legal counsel to the company. Moore & Van Allen served as legal counsel to NMEF.
