Midland States Bancorp Terminates CFO Amidst Turnaround Efforts
Midland States Bancorp, a $6.5 billion-asset bank based in Effingham, Illinois, has recently made the surprising announcement of the termination of its Chief Financial Officer (CFO), Eric Lemke. The company has appointed Claire Stack as the interim CFO while the bank continues its search for a permanent successor. This news comes as the bank’s turnaround program seems to be increasingly taking hold, following a challenging period of accounting issues and credit quality difficulties.
About Eric Lemke and His Dismissal
Eric Lemke had been with Midland States Bancorp since 2018, initially serving as the director of assurance and audit before his promotion to the role of CFO in November 2019. The bank did not disclose specific reasons for Lemke’s dismissal. His departure comes at a time when Midland States is in the midst of significant strategic changes, and as the community-banking loan portfolio at the bank saw growth in 2025 upon exiting several national lending businesses.
Interim CFO: Claire Stack
Replacing Lemke, at least temporarily, is Claire Stack, who joined Midland States five months prior from Steelcase, a furniture maker where she served as corporate controller. Stack’s appointment was confirmed in a securities filing released by the company. The impact of her leadership on the bank’s future direction and success will be watched with interest by investors and industry insiders alike.
Midland States Bancorp’s Struggles and Turnaround
In 2025, Midland States Bancorp faced a series of accounting challenges after its auditing firm identified errors in the bank’s accounting for loans originated by third-party lending partners. This led to a delay in the filing of its 2024 annual report and the required interim financial report for the three months ending June 30, 2025. As part of the remediation process, the bank had to restate its year-end financial statements for 2022 and 2023, as well as several quarterly reports from 2023 and 2024.
According to Nathan Race, a Piper Sandler analyst who closely follows Midland States, the bank’s decision to part ways with Lemke may stem from the desire to forge ahead with new CFO leadership as the bank appears to be leaving the bulk of its previous challenges behind. Race noted, “While this is a surprising announcement and undoubtedly a difficult decision, we can understand the reasoning behind seeking new CFO leadership given Midland States’ challenging last few years.”
Midland States Bancorp’s Strategic Changes
Since 2024, Midland States has been undergoing significant strategic changes, which include the sale of two national consumer lending portfolios and an exit from the equipment finance space. These decisions were driven largely by deteriorating credit quality. The bank reported net charge-offs totaling $102.5 million in 2025, along with a net loss of $124.3 million.
However, as the bank withdrew from these noncore national business lines, it has been refocusing its efforts on its community banking franchise. This strategy seems to be producing positive results, with community bank loans totaling $3.3 billion on Dec, 31, 2025, reflecting a 4% increase from the previous year.
Looking Forward
The financial outlook for Midland States Bancorp appears to be improving. Excluding losses related to the discontinued business lines, the bank stated it would have earned $11.9 million in the fourth quarter, instead of the reported loss of $5.3 million. A further indication of the bank’s potential turnaround came in February, when Patriot Financial Partners, a well-known private equity firm specializing in community banks, acquired a stake in Midland States.
Despite the rarity of banks dismissing their CFOs, Midland States Bancorp’s decision to let go of its CFO at this time reflects the bank’s need for a fresh start and its commitment to overcoming past challenges. As the company continues its strategic makeover, it will be interesting to see how its new leadership guides the bank towards future success.
Source: Here
