Digestion Plan After Expansion at Midland States in Ill.

Midland States Bancorp in Effingham, Ill., has launched an efficiency push after a period of expansion that reached another milestone Thursday.

The $3.2 billion-asset parent of Midland States Bank on Thursday completed its acquisition of the trust department of Sterling Bancorp in Yonkers, N.Y., including 12 trust professionals and $400 million in managed assets. It brings Midland's total wealth management assets under administration to $1.6 billion.

The deal, announced in February, "continues the growth of our wealth management business and further increases our noninterest income," Leon Holschbach, Midland's chief executive, said in a news release.

Overall, Midland has made five bank acquisitions since 2009 and has nearly 10 times as many assets as it had in 2007.

Midland went public in May, raising $80 million. It said at the time that it expected to use the proceeds from the offering to contribute to its banking unit, complete the Sterling deal, make more acquisitions and to do other things.

However, Midland appears to be making an effort to properly absorb all that growth, announcing earlier this week that it was starting a program called "Operational Excellence" to focus on operating efficiency, financial performance, technological processes and staffing improvements. That includes using tech and data to more thoroughly understand and meet its customers' needs.

"We believe there are a number of opportunities to increase operational efficiencies" after the big growth since 2007, Holschbach said in a separate release on Tuesday, though he said M&A efforts would continue. "Our goal is to always deploy our people, branch network, and online and mobile banking capabilities in an efficient manner and provide a superior customer experience."

Additionally, Midland this week announced that it had sold a $72.1 million portfolio of private label collateralized mortgage obligations as part of its credit and interest rate risk management strategies, recording a $14.3 million fourth-quarter gain tied to the sale. The CMOs were obtained in a failed-bank acquisition in 2009.

The company expects to primarily redeploy the proceeds from the sale of the CMOs into higher-quality, lower-yielding investments. That move will reduce its net interest income in the fourth quarter and in 2017, but the reduction is expected to be fully offset by cost savings in 2017 from Operational Excellence, the company said.