Illinois community bank terminates its chief financial officer

Midland States Bancorp Makes Leadership Change Amid Ongoing Transformation

• Key Point: Midland States has removed long-serving CFO Eric Lemke at a time when its restructuring efforts are beginning to show positive results.
• Supporting Information: As the bank withdrew from several national lending sectors, its portfolio of community banking loans saw growth in 2025.
• Analyst Perspective: “Although this move is unexpected and likely challenging, it is understandable that Midland States would seek new financial leadership after several difficult years,” commented Nathan Race, an analyst at Piper Sandler.

Based in Effingham, Illinois, Midland States Bancorp has dismissed its chief financial officer and named its controller as the interim replacement.

The bank, which manages $6.5 billion in assets, did not provide a reason for the departure of Eric Lemke, who had been CFO since late 2019 and joined the company in 2018 as director of assurance and audit.

Claire Stack, who joined Midland States five months ago from Steelcase where she was corporate controller, has been appointed interim CFO, according to a recent securities filing.

In 2025, Midland States encountered accounting challenges after its auditor identified mistakes in how the bank recorded loans from third-party lenders. This led to delays in submitting its 2024 annual report and the required interim financial statement for the quarter ending June 30, 2025.

To address these issues, the bank revised its financial statements for the end of 2022 and 2023, as well as several quarterly filings from 2023 and 2024.

Piper Sandler analyst Nathan Race attributed the leadership change to a desire for a fresh start, noting that the bank is entering the new year with most of its previous obstacles behind it.

Race wrote to clients, “This announcement is surprising and certainly a tough call, but the rationale for bringing in new CFO leadership is clear, given the company’s recent history of restating financial results and facing credit quality problems.”

Neither Lemke nor Ludwig provided comments regarding the change.

Lemke’s exit comes as Midland States is undergoing a significant strategic overhaul. Since 2024, the bank has sold off two national consumer lending portfolios and left the equipment finance sector, citing worsening credit conditions as the main reason. In 2025, the bank reported $102.5 million in net charge-offs and a net loss of $124.3 million.

Refocusing on Core Banking

By stepping away from non-core national business lines, Midland States has sharpened its focus on community banking. As of December 31, 2025, the company reported $3.3 billion in community bank loans, a 4% increase from the previous year.

The restructuring appears to be yielding results. Excluding losses from discontinued operations, Midland States indicated it would have posted a profit of $11.9 million in the fourth quarter, instead of the reported $5.3 million loss.

In February, the bank announced that Patriot Financial Partners, a private equity firm specializing in community banks, had acquired a stake through open-market purchases. James Deutsch, a senior partner at Patriot and former community bank CEO, was appointed to the board of directors.

Industry Context

It is uncommon for banks to dismiss their chief financial officers. One notable recent case involved Royal Bank of Canada, which terminated CFO Nadine Ahn in April 2024 due to allegations of an inappropriate relationship with a colleague.