FMBI First Midwest Bancorp Inc

First Midwest Bancorp, Inc. (the "Company" or "First Midwest"), the holding company of First Midwest Bank (the "Bank"), today reported results of operations and financial condition for the third quarter of 2021. Net income applicable to common shares for the third quarter of 2021 was $50 million, or $0.44 per diluted common share, compared to $47 million, or $0.41 per diluted common share, for the second quarter of 2021, and $23 million, or $0.21 per diluted common share, for the third quarter of 2020.

Comparative results for the third and second quarters of 2021 and the third quarter of 2020 were, in certain cases, impacted by the timing of costs related to acquisitions, retail and balance sheet optimization strategies, and securities gains. Such results were also impacted by the Company’s response to the COVID-19 pandemic (the "pandemic"), as well as federal, state, and local responses to the pandemic. To facilitate comparisons between periods, adjustments to reported results have been made to reflect these impacts. For additional detail on these adjustments, see the "Non-GAAP Financial Information" section presented later in this release.

SELECT THIRD QUARTER HIGHLIGHTS

• Improved diluted EPS to $0.44, up 7% and 110% from the second quarter of 2021 and third quarter of 2020, respectively.
  • Generated total revenue of $190 million, consistent with the linked quarter and up 14% over the prior year.
    • Net interest income totaled $145 million at a net margin of 2.91%, down approximately 5 basis points ("bps") from both prior periods, largely due to elevated liquidity.
    • Fee-based revenues increased to $42 million, up 1% and 11% from the second quarter of 2021 and third quarter of 2020, respectively, with record wealth management fees.
  • Controlled noninterest expense, adjusted, to average assets, excluding PPP loans, to 2.10%, down 12 and 9 bps from the second quarter of 2021 and third quarter of 2020, respectively.
• Grew total loans to $15 billion, up 2% annualized from June 30, 2021 and 7% from September 30, 2020, excluding PPP loans, largely on the strength of 4% annualized commercial lending growth.
• Increased total average deposits to $17.3 billion, up 2% from the prior quarter and 9% from the prior year quarter.
• Established the allowance for credit losses ("ACL") at $215 million, or 1.49% of total loans, excluding PPP loans, compared to 1.56% at June 30, 2021 and 1.83% at September 30, 2020.
  • Lowered non-performing assets to total loans plus foreclosed assets to 0.78% compared to 1.01% and 1.11% as of June 30, 2021 and September 30, 2020, respectively.
  • Reduced net loan charge-offs ("NCOs") to $7 million, compared to $16 million and $9 million in the second quarter of 2021 and third quarter of 2020, respectively, excluding purchased credit deteriorated ("PCD") loans.
• Increased Tier 1 capital to 12.0% of risk-weighted assets, up 28 bps from the linked quarter and 51 bps from a year ago as a result of higher retained earnings and the ongoing suspension of the Company's stock repurchase program.

"We were very pleased with our performance for the quarter," said Michael L. Scudder, Chairman of the Board and Chief Executive Officer of the Company. "Operating performance once again profited from increasing business momentum, sales production and tight control of our operating costs. The quarter was further aided by no provision for loan losses, reflective of both the strengthening economy and improving credit metrics."

Mr. Scudder concluded, "We remain very encouraged and excited about what lies ahead for our Company. Our teams are highly engaged as we see continuing economic recovery and growing opportunities for business expansion. As we look to our future, our ongoing integration efforts relative to our announced business combination with Old National Bank are on pace and in line with our expectations. This combination will see us grow to become one of the Midwest’s largest commercial banks and position us well for continued growth, investment, and innovation in talent, capabilities, and services – all to the benefit of our clients, colleagues, communities and stockholders."

PENDING MERGER

First Midwest and Old National Bancorp

On June 1, 2021, the Company and Old National Bancorp ("Old National"), the holding company for Old National Bank, jointly announced that they entered into a definitive merger agreement to combine in an all-stock merger of equals transaction to create a premier Midwestern bank with approximately $45 billion of combined assets. The merger agreement provides for a fixed exchange ratio whereby holders of First Midwest common stock will receive 1.1336 shares of Old National common stock for each share of First Midwest common stock they own. The merger agreement has been unanimously approved by the boards of directors, and has also been approved by approximately 99% of the votes cast at the shareholder meetings, of both companies.

As of the date of announcement, the overall transaction was valued at approximately $6.5 billion. On August 19, 2021, the Office of the Comptroller of the Currency approved the application for the merger of First Midwest Bank and Old National Bank. Completion of the merger remains subject to regulatory approval by the Board of Governors of the Federal Reserve System and certain other customary closing conditions set forth in the merger agreement.

(1) This metric is a non-GAAP financial measure. For details on the calculation of this metric, see the sections titled "Non-GAAP Financial Information" and "Non-GAAP Reconciliations" presented later in this release.

OPERATING PERFORMANCE

Net Interest Income and Margin Analysis(Dollar amounts in thousands)

	Quarters Ended
	September 30, 2021												June 30, 2021												September 30, 2020
	Average Balance				Interest				Yield/Rate(%)				AverageBalance				Interest				Yield/Rate(%)				AverageBalance				Interest				Yield/Rate(%)
Assets
Other interest-earning assets	$	1,672,005			$	1,222			0.29				$	1,185,187			$	745			0.25				$	1,234,948			$	799			0.26
Securities(1)	3,265,812				16,189				1.98				3,226,974				16,752				2.08				3,291,724				19,721				2.40
Federal Home Loan Bank ("FHLB") and         Federal Reserve Bank ("FRB") stock	106,759				852				3.19				106,330				934				3.51				150,033				976				2.60
Loans, excluding PPP loans(1)	14,364,785				127,631				3.53				14,095,989				125,264				3.56				13,558,857				131,680				3.86
PPP loans(1)	549,380				9,772				7.06				1,035,386				11,258				4.36				1,194,808				7,001				2.33
Total loans(1)	14,914,165				137,403				3.66				15,131,375				136,522				3.62				14,753,665				138,681				3.74
Total interest-earning assets(1)	19,958,741				155,666				3.10				19,649,866				154,953				3.16				19,430,370				160,177				3.28
Cash and due from banks	277,720												268,450												284,730
Allowance for loan losses	(215,395		)										(235,770		)										(243,667		)
Other assets	1,878,494												1,850,663												2,055,262
Total assets	$	21,899,560											$	21,533,209											$	21,526,695
Liabilities and Stockholders' Equity
Savings deposits	$	2,785,816			124				0.02				$	2,740,893			121				0.02				$	2,342,355			104				0.02
NOW accounts	3,213,637				275				0.03				3,048,990				261				0.03				2,744,034				307				0.04
Money market deposits	3,211,355				549				0.07				3,055,420				559				0.07				2,781,666				724				0.10
Time deposits	1,800,493				1,915				0.42				1,876,216				2,190				0.47				2,302,019				5,702				0.99
Borrowed funds	1,281,968				3,146				0.97				1,288,107				3,112				0.97				2,436,922				6,021				0.98
Senior and subordinated debt	235,284				3,467				5.85				235,080				3,469				5.92				234,464				3,498				5.94
Total interest-bearing liabilities	12,528,553				9,476				0.30				12,244,706				9,712				0.32				12,841,460				16,356				0.51
Demand deposits	6,272,903												6,254,791												5,631,355
Total funding sources	18,801,456								0.20				18,499,497								0.21				18,472,815								0.35
Other liabilities	364,576												347,178												378,786
Stockholders' equity	2,733,528												2,686,534												2,675,094
Total liabilities and         stockholders' equity	$	21,899,560											$	21,533,209											$	21,526,695
Tax-equivalent net interest          income/margin(1)					146,190				2.91								145,241				2.96								143,821				2.95
Tax-equivalent adjustment					(994		)										(953		)										(1,092		)
Net interest income (GAAP)(1)					$	145,196											$	144,288											$	142,729
Impact of acquired loan accretion(1)					$	6,231			0.12								$	5,975			0.12								$	7,960			0.16
Tax-equivalent net interest income/         margin, adjusted(1)					$	139,959			2.79								$	139,266			2.84								$	135,861			2.79

(1) Interest income and yields on tax-exempt securities and loans are presented on a tax-equivalent basis, assuming a federal income tax rate of 21%. The corresponding income tax impact related to tax-exempt items is recorded in income tax expense. These adjustments have no impact on net income. See the "Non-GAAP Financial Information" section presented later in this release for a discussion of this non-GAAP financial measure.

Net interest income for the third quarter of 2021 was up 0.6% from the second quarter of 2021 and 1.7% from the third quarter of 2020. The increase in net interest income compared to the second quarter of 2021 resulted primarily from growth in loans, excluding PPP loans, an increase in the number of days, partially offset by lower fees on PPP loans. Compared to the third quarter of 2020, net interest income was impacted by loan growth, lower cost of funds, and an increase in interest income and fees on PPP loans, partially offset by lower interest rates and acquired loan accretion.

Acquired loan accretion contributed $6.2 million, $6.0 million, and $8.0 million to net interest income for the third quarter of 2021, second quarter of 2021, and third quarter of 2020, respectively.

Tax-equivalent net interest margin for the current quarter was 2.91%, decreasing 5 and 4 basis points from the second quarter of 2021 and third quarter of 2020, respectively. Excluding the impact of acquired loan accretion, tax-equivalent net interest margin was 2.79%, down 5 basis points from the second quarter of 2021 and consistent with the third quarter of 2020. Compared to the second quarter of 2021, tax-equivalent net interest margin decreased due primarily to a higher balance of other interest-earning assets from seasonal municipal deposits and higher demand deposits as a result of PPP loan funds and other government stimuli. Tax-equivalent net interest margin compared to the third quarter of 2020 was impacted positively by PPP loan income and lower cost of funds, offset by lower interest rates on loans and securities, as well as a higher balance of other interest-earning assets due to higher demand deposits as a result of PPP loan funds and other government stimuli.

For the third quarter of 2021, total average interest-earning assets rose by $308.9 million and $528.4 million from the second quarter of 2021 and third quarter of 2020, respectively. The increase compared to both prior periods resulted primarily from a higher balance of other interest-earning assets due to higher demand deposits as a result of PPP loan funds and other government stimuli, as well as loan growth. In addition, the rise in other interest-earning assets was impacted by the normal seasonal increase in municipal deposits compared to the second quarter of 2021.

Total average funding sources for the third quarter of 2021 increased by $302.0 million from the second quarter of 2021 and $328.6 million from the third quarter of 2020. The increase compared to the second quarter of 2021 was impacted by seasonal municipal deposits whereas compared to the third quarter of 2020 the increase was driven primarily by deposit growth due to higher customer balances resulting from PPP funds and other government stimuli. In addition, average funding sources compared to the third quarter of 2020 were impacted by a decrease in FHLB advances.

Noninterest Income Analysis(Dollar amounts in thousands)

		Quarters Ended												September 30, 2021Percent Change From
		September 30,2021				June 30,  2021				September 30,2020				June 30,  2021			September 30,2020
Wealth management fees		$	14,820			$	14,555			$	12,837			1.8			15.4
Service charges on deposit accounts		11,496				10,778				10,342				6.7			11.2
Mortgage banking income		6,664				6,749				6,659				(1.3	)		0.1
Card-based fees, net		4,992				4,764				4,472				4.8			11.6
Capital market products income		1,333				1,954				886				(31.8	)		50.5
Other service charges, commissions, and fees		2,832				2,823				2,823				0.3			0.3
Total fee-based revenues		42,137				41,623				38,019				1.2			10.8
Other income		3,043				4,647				2,523				(34.5	)		20.6
Swap termination costs		—				—				(14,285		)		N/M			N/M
Net securities gains		—				—				14,328				N/M			N/M
Total noninterest income		$	45,180			$	46,270			$	40,585			(2.4	)		11.3

N/M – Not meaningful.

Total noninterest income of $45.2 million was down 2.4% from the second quarter of 2021 and up 11.3% from the third quarter of 2020. Record wealth management fees resulted from continued sales of fiduciary and investment advisory services to new and existing customers compared to both prior periods. The increase in service charges on deposit accounts and net card-based fees compared to the second quarter of 2021 was due primarily to seasonality, whereas the increase from the third quarter of 2020 resulted from the impact of higher transaction volumes due to economic recovery since the onset of the pandemic. Capital market products income resulted from levels of sales to corporate clients in light of market conditions that were lower than the second quarter of 2021 and higher than the third quarter of 2020.

Mortgage banking income for the third quarter of 2021 resulted from sales of $199.9 million of 1-4 family mortgage loans in the secondary market compared to $207.8 million in the second quarter of 2021 and $251.8 million in the third quarter of 2020. Compared to the third quarter of 2020, mortgage banking income was impacted by an increase in market pricing on sales of 1-4 family mortgage loans.

Other income increased compared to the third quarter of 2020 due to net gains from the disposition of branch properties and other miscellaneous items. Other income for the second quarter of 2021 was elevated as a result of positive fair value adjustments on equity securities.

During the third quarter of 2020, the Company terminated longer term interest rate swaps with notional amounts of $1.1 billion due to excess liquidity and in response to market conditions. At the same time, the Company liquidated $160 million of securities. As a result of these transactions, $14.3 million of pre-tax securities gains was fully offset by $14.3 million of pre-tax loss on swap terminations.

Noninterest Expense Analysis(Dollar amounts in thousands)

		Quarters Ended												September 30, 2021Percent Change From
		September 30,2021				June 30,  2021				September 30,2020				June 30,  2021			September 30,2020
Salaries and employee benefits:
Salaries and wages		$	51,503			$	51,887			$	53,385			(0.7	)		(3.5	)
Retirement and other employee benefits		10,924				12,324				11,349				(11.4	)		(3.7	)
Total salaries and employee benefits		62,427				64,211				64,734				(2.8	)		(3.6	)
Net occupancy and equipment expense		14,198				13,654				13,736				4.0			3.4
Technology and related costs		10,742				10,453				10,416				2.8			3.1
Professional services		6,991				7,568				7,325				(7.6	)		(4.6	)
Advertising and promotions		3,168				2,899				2,688				9.3			17.9
Net other real estate owned ("OREO") expense		(4		)		160				544				(102.5	)		(100.7	)
Other expenses		15,616				14,670				12,374				6.4			26.2
Acquisition and integration related expenses		2,916				7,773				881				(62.5	)		231.0
Optimization costs		—				31				18,376				N/M			N/M
Total noninterest expense		$	116,054			$	121,419			$	131,074			(4.4	)		(11.5	)
Acquisition and integration related expenses		(2,916		)		(7,773		)		(881		)		(62.5	)		231.0
Optimization costs		—				(31		)		(18,376		)		N/M			N/M
Total noninterest expense, adjusted(1)		$	113,138			$	113,615			$	111,817			(0.4	)		1.2

N/M – Not meaningful.

(1) See the "Non-GAAP Financial Information" section presented later in this release for a discussion of this non-GAAP financial measure.

Total noninterest expense was down 4.4% and 11.5% from the second quarter of 2021 and third quarter of 2020, respectively. Noninterest expense for all periods presented was impacted by acquisition and integration related expenses. In addition, the second quarter of 2021 and third quarter of 2020 were impacted by optimization costs. Excluding these items, noninterest expense for the third quarter of 2021 was $113.1 million, consistent with the second quarter of 2021 and up 1.2% from the third quarter of 2020. Overall, noninterest expense, adjusted, to average assets, excluding PPP loans, was 2.10% for the second quarter of 2021, down 12 and 9 basis points from the second quarter of 2021 and third quarter of 2020, respectively.

Salaries and employee benefits decreased compared to the second quarter of 2021 driven primarily by lower pension plan lump-sum payments to retired employees and lower commissions resulting from sales of 1-4 family mortgage loans in the secondary market. Compared to the third quarter of 2020, salaries and employee benefits decreased due mainly to ongoing benefits of optimization strategies, partially offset by higher compensation accruals and merit increases. Other expenses increased compared to both prior periods due to higher servicing fees from purchases of consumer loans and other miscellaneous expenses.

Optimization costs primarily include valuation adjustments related to locations identified for closure, modernization of our ATM network, advisory fees, employee severance, and other expenses associated with locations identified for closure.

Acquisition and integration related expenses for the third and second quarters of 2021 resulted primarily from the pending merger with Old National and for the third quarter of 2020 resulted from the acquisition of Park Bank.

LOAN PORTFOLIO AND ASSET QUALITY

Loan Portfolio Composition(Dollar amounts in thousands)

		As of												September 30, 2021Percent Change From
		September 30,  2021				June 30,  2021				September 30,  2020				June 30,  2021			September 30,  2020
Commercial and industrial		$	4,705,458			$	4,608,148			$	4,635,571			2.1			1.5
Agricultural		349,159				342,834				377,466				1.8			(7.5	)
Commercial real estate:
Office, retail, and industrial		1,765,592				1,807,428				1,950,406				(2.3	)		(9.5	)
Multi-family		1,082,941				1,012,722				868,293				6.9			24.7
Construction		595,204				577,338				631,607				3.1			(5.8	)
Other commercial real estate		1,408,955				1,461,370				1,452,994				(3.6	)		(3.0	)
Total commercial real estate		4,852,692				4,858,858				4,903,300				(0.1	)		(1.0	)
Total corporate loans, excluding PPP         loans		9,907,309				9,809,840				9,916,337				1.0			(0.1	)
PPP loans		384,100				705,915				1,196,538				(45.6	)		(67.9	)
Total corporate loans		10,291,409				10,515,755				11,112,875				(2.1	)		(7.4	)
Home equity		591,126				629,367				827,746				(6.1	)		(28.6	)
1-4 family mortgages		3,332,732				3,287,773				2,287,555				1.4			45.7
Installment		573,465				602,324				425,012				(4.8	)		34.9
Total consumer loans		4,497,323				4,519,464				3,540,313				(0.5	)		27.0
Total loans		$	14,788,732			$	15,035,219			$	14,653,188			(1.6	)		0.9

Total loans includes loans originated under the PPP loan programs, which totaled $384.1 million, $705.9 million, and $1.2 billion as of September 30, 2021, June 30, 2021, and September 30, 2020, respectively. Excluding these loans, total loans were up 2% annualized from June 30, 2021 and 7% from September 30, 2020. Strong production and line usage within our sector-based lending businesses drove the 3.9% annualized total corporate loan growth, excluding PPP loans, compared to the second quarter of 2021. Compared to the third quarter of 2020, strong production and line usage in corporate loans, excluding PPP loans, was offset by higher paydowns.

Consumer loans compared to both prior periods were impacted by purchases of 1-4 family mortgages, as well as strong production in the 1-4 family mortgages portfolio, which offset higher prepayments. In addition, consumer loans compared to the third quarter of 2020 were impacted by purchases of installment loans.

Allowance for Credit Losses(Dollar amounts in thousands)

		As of or for the Quarters Ended												September 30, 2021Percent Change From
		September 30,2021				June 30,  2021				September 30,2020				June 30,  2021			September 30,2020
ACL, excluding PCD loans		$	195,903			$	200,640			$	209,988			(2.4	)		(6.7	)
PCD loan ACL		18,963				22,586				36,885				(16.0	)		(48.6	)
Total ACL		$	214,866			$	223,226			$	246,873			(3.7	)		(13.0	)
Provision for credit losses		$	—			$	—			$	15,927			N/M			N/M
ACL to total loans		1.45		%		1.48		%		1.68		%
ACL to total loans, excluding PPP loans(1)		1.49		%		1.56		%		1.83		%
ACL to non-accrual loans		243.94		%		179.32		%		171.95		%

N/M – Not meaningful.

(1) This ratio excludes PPP loans that are fully guaranteed by the Small Business Administration ("SBA"). As a result, no allowance for credit losses is associated with these loans. See the "Non-GAAP Financial Information" section presented later in this release for a discussion of this non-GAAP financial measure.

The ACL was $214.9 million or 1.45% of total loans as of September 30, 2021, decreasing $8.4 million from June 30, 2021 and $32.0 million compared to September 30, 2020. Excluding the impact of PPP loans, ACL to total loans was 1.49% as of September 30, 2021, compared to 1.56% and 1.83% as of June 30, 2021 and September 30, 2020, respectively. The decrease from both prior periods reflects net charge-offs on PCD loans that previously had an ACL established upon acquisition, net charge-offs on loans that previously had specific allowances for loan losses established, and an improving credit environment.

Asset Quality(Dollar amounts in thousands)

		As of												September 30, 2021Percent Change From
		September 30,2021				June 30,  2021				September 30,2020				June 30,  2021			September 30,2020
Non-accrual loans, excluding PCD loans(1)		$	64,166			$	101,381			$	103,582			(36.7	)		(38.1	)
Non-accrual PCD loans		23,917				23,101				39,990				3.5			(40.2	)
Total non-accrual loans		88,083				124,482				143,572				(29.2	)		(38.6	)
90 days or more past due loans, still accruing         interest(1)		1,293				878				3,781				47.3			(65.8	)
Total non-performing loans, ("NPLs")		89,376				125,360				147,353				(28.7	)		(39.3	)
Accruing troubled debt restructurings         ("TDRs")		539				782				841				(31.1	)		(35.9	)
Foreclosed assets(2)		26,375				26,732				15,299				(1.3	)		72.4
Total non-performing assets ("NPAs")		$	116,290			$	152,874			$	163,493			(23.9	)		(28.9	)
30-89 days past due loans		$	30,718			$	21,051			$	21,551			45.9			42.5
Special mention loans(3)		$	330,218			$	343,547			$	395,295			(3.9	)		(16.5	)
Substandard loans(3)		351,192				325,727				311,430				7.8			12.8
Total performing loans classified as         substandard and special mention(3)		$	681,410			$	669,274			$	706,725			1.8			(3.6	)
Non-accrual loans to total loans:
Non-accrual loans to total loans		0.60		%		0.83		%		0.98		%
Non-accrual loans to total loans, excluding         PPP loans(1)(4)		0.61		%		0.87		%		1.07		%
Non-accrual loans to total loans, excluding         PCD and PPP loans(1)(4)		0.45		%		0.72		%		0.78		%
Non-performing loans to total loans:
NPLs to total loans		0.60		%		0.83		%		1.01		%
NPLs to total loans, excluding PPP loans(1)(4)		0.62		%		0.87		%		1.10		%
NPLs to total loans, excluding PCD and PPP          loans(1)(4)		0.46		%		0.72		%		0.81		%
Non-performing assets to total loans plus foreclosed assets:
NPAs to total loans plus foreclosed assets		0.78		%		1.01		%		1.11		%
NPAs to total loans plus foreclosed assets,          excluding PPP loans(1)(4)		0.81		%		1.06		%		1.21		%
NPAs to total loans plus foreclosed assets,          excluding PCD and PPP loans(1)(4)		0.65		%		0.92		%		0.93		%
Performing loans classified as substandard and special mention to corporate loans:
Performing loans classified as substandard and         special mention to corporate loans(3)		6.62		%		6.36		%		6.36		%
Performing loans classified as substandard and         special mention to corporate loans, excluding         PPP loans(3)		6.88		%		6.82		%		7.13		%

(1) See the "Non-GAAP Financial Information" section presented later in this release for a discussion of this non-GAAP financial measure.

(2) Foreclosed assets consists of OREO and other foreclosed assets acquired in partial or total satisfaction of defaulted loans. Other foreclosed assets are included in other assets in the Consolidated Statements of Financial Condition.

(3) Performing loans classified as substandard and special mention excludes accruing TDRs.

(4) This ratio excludes PPP loans that are fully guaranteed by the SBA. As a result, no allowance for credit losses is associated with these loans.

NPAs represented 0.78% of total loans and foreclosed assets at September 30, 2021 compared to 1.01% and 1.11% at June 30, 2021 and September 30, 2020, respectively. Excluding the impact of PCD and PPP loans, NPAs to total loans plus foreclosed assets was 0.65% at September 30, 2021, compared to 0.92% at June 30, 2021 and 0.93% at September 30, 2020, reflective of the final resolution of certain corporate credits and normal fluctuations that occur on a quarterly basis. In addition, one corporate loan relationship was transferred from non-accrual loans to foreclosed assets during the first nine months of 2021.

Performing loans classified as substandard and special mention were $681 million for the third quarter of 2021 compared to $669 million and $707 million at June 30, 2021 and September 30, 2020, respectively. The increase from the second quarter of 2021 resulted from normal fluctuations that occur on a quarterly basis. The decrease from the third quarter of 2020 was due primarily to the payoff of certain corporate credits in addition to upgrade and downgrade activity.

Charge-Off Data (Dollar amounts in thousands)

		Quarters Ended
		September 30,2021				% ofTotal			June 30,  2021				% ofTotal			September 30,2020				% ofTotal
Net loan charge-offs(1)
Commercial and industrial		$	5,002			59.8			$	14,733			71.0			$	5,470			34.7
Agricultural		(37		)		(0.4	)		—				—			265				1.7
Commercial real estate:
Office, retail, and industrial		556				6.7			3,878				18.7			1,339				8.5
Multi-family		1				—			2				—			—				—
Construction		986				11.8			208				1.0			4,889				31.1
Other commercial real estate		829				9.9			459				2.2			1,753				11.1
Consumer		1,023				12.2			1,478				7.1			2,027				12.9
Total NCOs		$	8,360			100.0			$	20,758			100.0			$	15,743			100.0
Less: NCOs on PCD loans(2)		(1,757		)		21.0			(4,337		)		20.9			(6,923		)		44.0
Total NCOs, excluding PCD loans(2)		$	6,603						$	16,421						$	8,820
Recoveries included above		$	3,397						$	2,869						$	1,795
Quarter-to-date(1)(3):
Net loan charge-offs to average loans		0.22		%					0.55		%					0.42		%
Net loan charge-offs to average loans,         excluding PPP loans(2)(4)		0.23		%					0.59		%					0.46		%
Net loan charge-offs to average loans,         excluding PCD and PPP loans(2)(4)		0.18		%					0.47		%					0.26		%
Year-to-date(1)(3):
Net loan charge-offs to average loans		0.35		%					0.41		%					0.38		%
Net loan charge-offs to average loans,         excluding PPP loans(2)(4)		0.37		%					0.44		%					0.40		%
Net loan charge-offs to average loans,         excluding PCD and PPP loans(2)(4)		0.29		%					0.35		%					0.29		%

(1) Amounts represent charge-offs, net of recoveries.

(2) See the "Non-GAAP Financial Information" section presented later in this release for a discussion of this non-GAAP financial measure.

(3) Annualized based on the actual number of days for each period presented.

(4) This ratio excludes PPP loans that are fully guaranteed by the SBA. As a result, no allowance for credit losses is associated with these loans.

NCOs to average loans, annualized was 0.22%, down from 0.55% and 0.42% for the second quarter of 2021 and third quarter of 2020, respectively. Excluding charge-offs on PCD loans and the impact of PPP loans, NCOs to average loans was 0.18% for the third quarter of 2021, compared to 0.47% and 0.26% for the second quarter of 2021 and third quarter of 2020, respectively. Net loan charge-offs for the second quarter of 2021 were elevated, largely as a result of expected losses for which specific allowances for loan losses were established on certain corporate relationships based upon circumstances unique to those borrowers.

DEPOSIT PORTFOLIO

Deposit Composition(Dollar amounts in thousands)

		Average for the Quarters Ended												September 30, 2021Percent Change From
		September 30,2021				June 30,  2021				September 30,2020				June 30,  2021			September 30,2020
Demand deposits		$	6,272,903			$	6,254,791			$	5,631,355			0.3			11.4
Savings deposits		2,785,816				2,740,893				2,342,355				1.6			18.9
NOW accounts		3,213,637				3,048,990				2,744,034				5.4			17.1
Money market accounts		3,211,355				3,055,420				2,781,666				5.1			15.4
Core deposits		15,483,711				15,100,094				13,499,410				2.5			14.7
Time deposits		1,800,493				1,876,216				2,302,019				(4.0	)		(21.8	)
Total deposits		$	17,284,204			$	16,976,310			$	15,801,429			1.8			9.4

Total average deposits were $17.3 billion for the third quarter of 2021, up 1.8% from the second quarter of 2021 and 9.4% from the third quarter of 2020. The increase in total average deposits compared to the second quarter of 2021 was impacted by the normal seasonal increase in municipal deposits. Compared to the third quarter of 2020, the increase in total average deposits was due to higher customer balances resulting from PPP funds and other government stimuli.

CAPITAL MANAGEMENT

Capital Ratios

		As of
		September 30,2021			June 30,  2021			December 31,2020			September 30,2020
Company regulatory capital ratios:
Total capital to risk-weighted assets		14.26	%		14.19	%		14.14	%		14.06	%
Tier 1 capital to risk-weighted assets		11.99	%		11.71	%		11.55	%		11.48	%
Common equity Tier 1 ("CET1") to risk-weighted assets		10.51	%		10.23	%		10.06	%		9.97	%
Tier 1 capital to average assets		8.89	%		8.85	%		8.91	%		8.50	%
Company tangible common equity ratios(1)(2):
Tangible common equity to tangible assets		7.53	%		7.48	%		7.67	%		7.43	%
Tangible common equity to tangible assets, excluding PPP loans		7.67	%		7.74	%		7.98	%		7.90	%
Tangible common equity, excluding accumulated other comprehensive         income ("AOCI"), to tangible assets		7.65	%		7.50	%		7.54	%		7.30	%
Tangible common equity, excluding AOCI, to tangible assets,         excluding PPP loans		7.79	%		7.77	%		7.85	%		7.77	%
Tangible common equity to risk-weighted assets		10.08	%		9.92	%		9.93	%		9.84	%

(1) These ratios are not subject to formal Federal Reserve regulatory guidance.

(2) Tangible common equity ("TCE") is a non-GAAP measure that represents common stockholders' equity less goodwill and identifiable intangible assets. For details of the calculation of these ratios, see the sections titled, "Non-GAAP Financial Information" and "Non-GAAP Reconciliations" presented later in this release.

Risk-weighted regulatory capital ratios compared to all prior periods were impacted by retained earnings and the mix of risk-weighted assets. Total capital to risk-weighted assets was impacted by the beginning of the five-year phase-out of Tier 2 treatment of the Company's subordinated debt. The Company elected the five-year current expected credit losses ("CECL") transition relief for regulatory capital, which retained approximately 30 basis points of CET1 and Tier 1 capital at September 30, 2021.

The Board of Directors approved a quarterly cash dividend of $0.14 per common share during the third quarter of 2021, which is consistent with the second quarter of 2021 and third quarter of 2020. This dividend represents the 155th consecutive cash dividend paid by the Company since its inception in 1983.

Press Release, Presentation Materials, and Additional Information Available on Website

This press release, the presentation materials, and the accompanying unaudited Selected Financial Information are available through the Investor Relations section of First Midwest's website at investor.firstmidwest.com.

Forward-Looking Statements

This communication may contain certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the financial condition, results of operations, business plans and future performance of First Midwest. In some cases, forward-looking statements can be identified by the use of words such as "may," "might," "will," "would," "should," "could," "expect," "plan," "intend," "anticipate," "believe," "estimate," "outlook," "forecast," "predict," "project," "probable," "potential," "possible," "target," "continue," "look forward," or "assume" and words of similar import. Because forward-looking statements relate to future results and occurrences, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Forward-looking statements are not historical facts or guarantees of future performance but instead express only management's beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside of management's control. It is possible that actual results and events may differ, possibly materially, from the anticipated results or events indicated in these forward-looking statements. First Midwest cautions you not to place undue reliance on these statements. Forward-looking statements speak only as of the date made, and First Midwest undertakes no obligation to update any forward-looking statements.

Forward-looking statements may be deemed to include, among other things, statements relating to First Midwest's future financial performance, the performance of First Midwest's loan or securities portfolio, the expected amount of future credit allowances or charge-offs, delays in completing the pending merger of First Midwest and Old National, the failure to obtain necessary regulatory approvals or to satisfy any of the other conditions to the merger on a timely basis or at all, the possibility that the anticipated benefits of the merger are not realized when expected or at all, corporate strategies or objectives, including the impact of certain actions and initiatives, anticipated trends in First Midwest's business, regulatory developments, estimated synergies, cost savings and financial benefits of completed transactions, growth strategies, the inability to realize cost savings or improved revenues or to implement integration plans and other consequences associated with the proposed merger and the continued or potential effects of the COVID-19 pandemic and related variants and mutations on First Midwest's business, financial condition, liquidity, loans, asset quality and results of operations. These statements are subject to certain risks, uncertainties and assumptions, including the duration, extent and severity of the COVID-19 pandemic and related variants and mutations, including the continued effects on First Midwest's business, operations and employees, as well as on First Midwest's customers and service providers, and on economies and markets more generally and other risks, uncertainties and assumptions that are discussed under the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in First Midwest's Annual Report on Form 10-K for the year ended December 31, 2020, and in First Midwest's subsequent filings made with the Securities and Exchange Commission ("SEC"). These risks and uncertainties are not exhaustive, and other sections of these reports describe additional factors that could adversely impact First Midwest's business and financial performance.

Non-GAAP Financial Information

The Company's accounting and reporting policies conform to U.S. generally accepted accounting principles ("GAAP") and general practices within the banking industry. As a supplement to GAAP, the Company provides non-GAAP performance results, which the Company believes are useful because they assist investors in assessing the Company's operating performance. These non-GAAP financial measures include EPS, adjusted, the efficiency ratio, return on average assets, adjusted, tax-equivalent net interest income (including its individual components), tax-equivalent net interest margin, tax-equivalent net interest margin, adjusted, noninterest expense, adjusted, tangible common equity to tangible assets, tangible common equity, excluding AOCI, to tangible assets, tangible common equity to risk-weighted assets, return on average common equity, adjusted, return on average tangible common equity, return on average tangible common equity, adjusted, non-accrual loans, excluding PCD loans, non-accrual loans to total loans, excluding PPP loans, non-accrual loans to total loans, excluding PCD and PPP loans, NPLs to total loans, excluding PPP loans, NPLs to total loans, excluding PCD and PPP loans, NPAs to total loans plus foreclosed assets, excluding PPP loans, NPAs to total loans plus foreclosed assets, excluding PCD and PPP loans, performing loans classified as substandard and special mention to corporate loans, excluding PPP loans, NCOs, excluding PCD loans, NCOs to average loans, excluding PPP loans, NCOs to average loans, excluding PCD and PPP loans, and pre-tax, pre-provision earnings, adjusted.

The Company presents EPS, the efficiency ratio, return on average assets, return on average common equity, and return on average tangible common equity, all adjusted for certain significant transactions. These transactions include acquisition and integration related expenses associated with completed and pending acquisitions (all periods), optimization costs (second and first quarters of 2021 and fourth and third quarters of 2020), swap termination costs (fourth and third quarters of 2020), income tax benefits (fourth quarter of 2020), and net securities gains (third quarter of 2020). In addition, net OREO expense is excluded from the calculation of the efficiency ratio. Management believes excluding these transactions from EPS, the efficiency ratio, return on average assets, return on average common equity, and return on average tangible common equity may be useful in assessing the Company's underlying operational performance since these transactions do not pertain to its core business operations and their exclusion may facilitate better comparability between periods. Management believes that excluding acquisition and integration related expenses from these metrics may be useful to the Company, as well as analysts and investors, since these expenses can vary significantly based on the size, type, and structure of each acquisition. Additionally, management believes excluding these transactions from these metrics may enhance comparability for peer comparison purposes.

Income tax expense, provision for loan losses, and the certain significant transactions listed above are excluded from the calculation of pre-tax, pre-provision earnings, adjusted due to the fluctuation in income before income tax and the level of provision for loan losses required based on the estimated impact of the pandemic on the ACL. Management believes pre-tax, pre-provision earnings, adjusted may be useful in assessing the Company's underlying operational performance and their exclusion may facilitate better comparability between periods and for peer comparison purposes.

The Company presents noninterest expense, adjusted, which excludes optimization costs and acquisition and integration related expenses. Management believes that excluding these items from noninterest expense may be useful in assessing the Company’s underlying operational performance as these items either do not pertain to its core business operations or their exclusion may facilitate better comparability between periods and for peer comparison purposes.

The tax-equivalent adjustment to net interest income and net interest margin recognizes the income tax savings when comparing taxable and tax-exempt assets. Interest income and yields on tax-exempt securities and loans are presented using the current federal income tax rate of 21%. Management believes that it is standard practice in the banking industry to present net interest income and net interest margin on a fully tax-equivalent basis and that it may enhance comparability for peer comparison purposes. In addition, management believes that presenting tax-equivalent net interest margin, adjusted, may enhance comparability for peer comparison purposes and is useful to the Company, as well as analysts and investors, since acquired loan accretion income may fluctuate based on the size of each acquisition, as well as from period to period.

In management's view, tangible common equity measures are capital adequacy metrics that may be meaningful to the Company, as well as analysts and investors, in assessing the Company's use of equity and in facilitating comparisons with peers. These non-GAAP measures are valuable indicators of a financial institution's capital strength since they eliminate intangible assets from stockholders' equity and retain the effect of accumulated other comprehensive loss in stockholders' equity.

The Company presents non-accrual loans, non-accrual loans to total loans, NPLs to total loans, NPAs to total loans plus foreclosed assets, performing loans classified as substandard and special mention to corporate loans, excluding PPP loans, NCOs, and NCOs to average loans, all excluding PCD and/or PPP loans. Management believes excluding PCD and PPP loans is useful as it facilitates better comparability between periods. Prior to the adoption of CECL on January 1, 2020, PCI loans with an accretable yield were considered current and were not included in past due and non-accrual loan totals and the portion of PCI loans deemed to be uncollectible was recorded as a reduction of the credit-related acquisition adjustment, which was netted within loans. Subsequent to adoption, PCD loans, including those previously classified as PCI, are included in past due and non-accrual loan totals and an ACL on PCD loans is established as of the acquisition date and the PCD loans are no longer recorded net of a credit-related acquisition adjustment. PCD loans deemed to be uncollectible are recorded as a charge-off through the ACL. The Company began originating PPP loans during the second quarter of 2020 and the loans are fully guaranteed by the SBA and are expected to be forgiven if the applicable criteria are met. Additionally, management believes excluding PCD and PPP loans from these metrics may enhance comparability for peer comparison purposes.

Although intended to enhance investors' understanding of the Company's business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP. In addition, these non-GAAP financial measures may differ from those used by other financial institutions to assess their business and performance. See the previously provided tables and the following reconciliations in the "Non-GAAP Reconciliations" section for details on the calculation of these measures to the extent presented herein.

About First Midwest

First Midwest (NASDAQ: FMBI) is a relationship-focused financial institution and one of the largest independent publicly traded bank holding companies based on assets headquartered in Chicago and the Midwest, with approximately $22 billion of assets and an additional $15 billion of assets under management. First Midwest Bank and First Midwest's other affiliates provide a full range of commercial, treasury management, equipment leasing, consumer, wealth management, trust and private banking products and services. The primary footprint of First Midwest's branch network and other locations is in metropolitan Chicago, southeast Wisconsin, northwest Indiana, central and western Illinois, and eastern Iowa. Visit First Midwest at www.firstmidwest.com.

CONTACTS:

InvestorsPatrick S. BarrettEVP, Chief Financial Officer(708) 831-7231pat.barrett@firstmidwest.com

MediaMaurissa KanterSVP, Director of Corporate Communications(708) 831-7345maurissa.kanter@firstmidwest.com

Accompanying Unaudited Selected Financial Information

Consolidated Statements of Financial Condition (Unaudited)(Dollar amounts in thousands)
	As of
	September 30,				June 30,				March 31,				December 31,				September 30,
	2021				2021				2021				2020				2020
Period-End Balance Sheet
Assets
Cash and due from banks	$	270,020			$	232,989			$	223,713			$	196,364			$	254,212
Interest-bearing deposits in other banks	1,654,917				1,312,412				786,814				920,880				936,528
Equity securities, at fair value	114,848				112,977				96,983				76,404				55,021
Securities available-for-sale, at fair value	3,212,908				3,156,194				3,195,405				3,096,408				3,279,884
Securities held-to-maturity, at amortized cost	10,853				11,593				11,711				12,071				22,193
FHLB and FRB stock	106,090				106,890				106,170				117,420				138,120
Loans:
Commercial and industrial	4,705,458				4,608,148				4,546,317				4,578,254				4,635,571
Agricultural	349,159				342,834				355,883				364,038				377,466
Commercial real estate:
Office, retail, and industrial	1,765,592				1,807,428				1,827,116				1,861,768				1,950,406
Multi-family	1,082,941				1,012,722				906,124				872,813				868,293
Construction	595,204				577,338				614,021				612,611				631,607
Other commercial real estate	1,408,955				1,461,370				1,463,582				1,481,976				1,452,994
PPP loans	384,100				705,915				1,109,442				785,563				1,196,538
Home equity	591,126				629,367				690,030				761,725				827,746
1-4 family mortgages	3,332,732				3,287,773				3,187,066				3,022,413				2,287,555
Installment	573,465				602,324				483,945				410,071				425,012
Total loans	14,788,732				15,035,219				15,183,526				14,751,232				14,653,188
Allowance for loan losses	(206,241		)		(214,601		)		(235,359		)		(239,017		)		(239,048		)
Net loans	14,582,491				14,820,618				14,948,167				14,512,215				14,414,140
OREO	5,106				5,289				6,273				8,253				6,552
Premises, furniture, and equipment, net	123,413				125,837				129,514				132,045				132,267
Investment in bank-owned life insurance ("BOLI")	300,387				300,537				301,365				301,101				300,429
Goodwill and other intangible assets	923,383				926,176				928,974				932,764				935,801
Accrued interest receivable and other assets	473,764				513,912				473,502				532,753				612,996
Total assets	$	21,778,180			$	21,625,424			$	21,208,591			$	20,838,678			$	21,088,143
Liabilities and Stockholders' Equity
Noninterest-bearing deposits	$	6,097,698			$	6,187,478			$	6,156,145			$	5,797,899			$	5,555,735
Interest-bearing deposits	11,100,704				10,845,405				10,455,309				10,214,565				10,215,838
Total deposits	17,198,402				17,032,883				16,611,454				16,012,464				15,771,573
Borrowed funds	1,274,572				1,299,424				1,295,737				1,546,414				1,957,180
Senior and subordinated debt	235,383				235,178				234,973				234,768				234,563
Accrued interest payable and other liabilities	346,600				353,791				413,112				355,026				460,656
Stockholders' equity	2,723,223				2,704,148				2,653,315				2,690,006				2,664,171
Total liabilities and stockholders' equity	$	21,778,180			$	21,625,424			$	21,208,591			$	20,838,678			$	21,088,143
Stockholders' equity, excluding AOCI	$	2,748,604			$	2,710,089			$	2,675,411			$	2,663,627			$	2,638,422
Stockholders' equity, common	2,492,723				2,473,648				2,422,815				2,459,506				2,433,671

Condensed Consolidated Statements of Income (Unaudited)(Dollar amounts in thousands)
	Quarters Ended																					Nine Months Ended
	September 30,				June 30,				March 31,				December 31,				September 30,					September 30,				September 30,
	2021				2021				2021				2020				2020					2021				2020
Income Statement
Interest income	$	154,672			$	154,000			$	151,150			$	159,962			$	159,085				$	459,822			$	491,356
Interest expense	9,476				9,712				10,035				11,851				16,356					29,223				59,818
Net interest income	145,196				144,288				141,115				148,111				142,729					430,599				431,538
Provision for loan losses	—				—				6,098				10,507				15,927					6,098				88,108
Net interest income after         provision for loan losses	145,196				144,288				135,017				137,604				126,802					424,501				343,430
Noninterest Income
Wealth management fees	14,820				14,555				14,149				13,548				12,837					43,524				37,140
Service charges on deposit         accounts	11,496				10,778				9,980				10,811				10,342					32,254				31,248
Mortgage banking income	6,664				6,749				10,187				9,191				6,659					23,600				11,924
Card-based fees, net	4,992				4,764				4,556				4,530				4,472					14,312				11,620
Capital market products         income	1,333				1,954				2,089				659				886					5,376				6,302
Other service charges,         commissions, and fees	2,832				2,823				2,761				2,993				2,823					8,416				7,583
Total fee-based revenues	42,137				41,623				43,722				41,732				38,019					127,482				105,817
Other income	3,043				4,647				2,081				3,550				2,523					9,771				8,083
Swap termination costs	—				—				—				(17,567		)		(14,285		)			—				(14,285		)
Net securities gains (losses)	—				—				—				—				14,328					—				13,323
Total noninterest         income	45,180				46,270				45,803				27,715				40,585					137,253				112,938
Noninterest Expense
Salaries and employee benefits:
Salaries and wages	51,503				51,887				53,693				55,950				53,385					157,083				155,967
Retirement and other         employee benefits	10,924				12,324				12,708				10,430				11,349					35,956				35,298
Total salaries and         employee benefits	62,427				64,211				66,401				66,380				64,734					193,039				191,265
Net occupancy and         equipment expense	14,198				13,654				14,752				14,002				13,736					42,604				43,079
Technology and related costs	10,742				10,453				10,284				11,005				10,416					31,479				28,817
Professional services	6,991				7,568				8,059				8,424				7,325					22,618				26,595
Advertising and promotions	3,168				2,899				1,835				1,850				2,688					7,902				8,259
Net OREO expense	(4		)		160				589				106				544					745				1,090
Other expenses	15,616				14,670				14,735				12,851				12,374					45,021				39,652
Acquisition and integration         related expenses	2,916				7,773				245				1,860				881					10,934				11,602
Optimization costs	—				31				1,525				1,493				18,376					1,556				18,376
Total noninterest expense	116,054				121,419				118,425				117,971				131,074					355,898				368,735
Income before income tax         expense	74,322				69,139				62,395				47,348				36,313					205,856				87,633
Income tax expense	19,459				18,018				17,372				5,743				8,690					54,849				21,340
Net income	$	54,863			$	51,121			$	45,023			$	41,605			$	27,623				$	151,007			$	66,293
Preferred dividends	(4,033		)		(4,034		)		(4,034		)		(4,049		)		(4,033		)			(12,101		)		(5,070		)
Net income applicable to         non-vested restricted shares	(517		)		(521		)		(486		)		(369		)		(236		)			(1,524		)		(615		)
Net income applicable         to common shares	$	50,313			$	46,566			$	40,503			$	37,187			$	23,354				$	137,382			$	60,608
Net income applicable to         common shares, adjusted(1)	52,500				52,419				41,831				49,238				37,765					146,749				83,814

Footnotes to Condensed Consolidated Statements of Income(1)   See the "Non-GAAP Reconciliations" section for the detailed calculation.

Selected Financial Information (Unaudited)(Amounts in thousands, except per share data)
	As of or for the
	Quarters Ended																					Nine Months Ended
	September 30,				June 30,				March 31,				December 31,				September 30,					September 30,				September 30,
	2021				2021				2021				2020				2020					2021				2020
EPS
Basic EPS	$	0.45			$	0.41			$	0.36			$	0.33			$	0.21				$	1.22			$	0.54
Diluted EPS	$	0.44			$	0.41			$	0.36			$	0.33			$	0.21				$	1.21			$	0.54
Diluted EPS, adjusted(1)	$	0.46			$	0.46			$	0.37			$	0.43			$	0.33				$	1.29			$	0.75
Common Stock and Related Per Common Share Data
Book value	$	21.83			$	21.67			$	21.22			$	21.52			$	21.29				$	21.83			$	21.29
Tangible book value	$	13.75			$	13.55			$	13.08			$	13.36			$	13.11				$	13.75			$	13.11
Dividends declared per share	$	0.14			$	0.14			$	0.14			$	0.14			$	0.14				$	0.42			$	0.42
Closing price at period end	$	19.01			$	19.83			$	21.91			$	15.92			$	10.78				$	19.01			$	10.78
Closing price to book value	0.9				0.9				1.0				0.7				0.5					0.9				0.5
Period end shares outstanding	114,167				114,177				114,196				114,296				114,293					114,167				114,293
Period end treasury shares	11,213				11,199				11,176				11,071				11,067					11,213				11,067
Common dividends	$	15,974			$	15,979			$	15,997			$	16,017			$	16,011				$	47,950			$	48,028
Dividend payout ratio	31.11		%		34.15		%		38.89		%		42.42		%		66.67		%			34.43		%		77.78		%
Dividend payout ratio, adjusted(1)	30.43		%		30.43		%		37.84		%		32.56		%		42.42		%			32.56		%		56.00		%
Key Ratios/Data
Return on average common         equity(2)	7.97		%		7.60		%		6.70		%		6.05		%		3.80		%			7.43		%		3.33		%
Return on average common         equity, adjusted(1)(2)	8.32		%		8.56		%		6.92		%		8.01		%		6.15		%			7.94		%		4.60		%
Return on average tangible         common equity(2)	13.17		%		12.77		%		11.35		%		10.35		%		6.73		%			12.45		%		5.90		%
Return on average tangible         common equity, adjusted(1)(2)	13.72		%		14.31		%		11.71		%		13.53		%		10.53		%			13.26		%		7.95		%
Return on average assets(2)	0.99		%		0.95		%		0.87		%		0.79		%		0.51		%			0.94		%		0.44		%
Return on average assets,         adjusted(1)(2)	1.03		%		1.06		%		0.90		%		1.02		%		0.78		%			1.00		%		0.59		%
Loans to deposits	85.99		%		88.27		%		91.40		%		92.12		%		92.91		%			85.99		%		92.91		%
Efficiency ratio(1)	59.12		%		59.24		%		61.77		%		58.90		%		60.36		%			60.03		%		61.52		%
Net interest margin(2)(3)	2.91		%		2.96		%		3.03		%		3.14		%		2.95		%			2.97		%		3.19		%
Yield on average interest-earning         assets(2)(3)	3.10		%		3.16		%		3.24		%		3.39		%		3.28		%			3.17		%		3.63		%
Cost of funds(2)(4)	0.20		%		0.21		%		0.23		%		0.26		%		0.35		%			0.21		%		0.46		%
Noninterest expense to average         assets(2)	2.10		%		2.26		%		2.30		%		2.25		%		2.42		%			2.22		%		2.43		%
Noninterest expense, adjusted to         average assets, excluding PPP         loans(1)(2)	2.10		%		2.22		%		2.38		%		2.29		%		2.19		%			2.23		%		2.31		%
Effective income tax rate	26.18		%		26.06		%		27.84		%		12.13		%		23.93		%			26.64		%		24.35		%
Capital Ratios
Total capital to risk-weighted         assets(1)	14.26		%		14.19		%		14.26		%		14.14		%		14.06		%			14.26		%		14.06		%
Tier 1 capital to risk-weighted         assets(1)	11.99		%		11.71		%		11.67		%		11.55		%		11.48		%			11.99		%		11.48		%
CET1 to risk-weighted assets(1)	10.51		%		10.23		%		10.17		%		10.06		%		9.97		%			10.51		%		9.97		%
Tier 1 capital to average assets(1)	8.89		%		8.85		%		8.96		%		8.91		%		8.50		%			8.89		%		8.50		%
Tangible common equity to         tangible assets(1)	7.53		%		7.48		%		7.37		%		7.67		%		7.43		%			7.53		%		7.43		%
Tangible common equity,         excluding AOCI, to tangible         assets(1)	7.65		%		7.50		%		7.48		%		7.54		%		7.30		%			7.65		%		7.30		%
Tangible common equity to risk-         weighted assets(1)	10.08		%		9.92		%		9.93		%		9.93		%		9.84		%			10.08		%		9.84		%
Note: Selected Financial Information footnotes are located at the end of this section.

Selected Financial Information (Unaudited)(Amounts in thousands, except per share data)
	As of or for the
	Quarters Ended																					Nine Months Ended
	September 30,				June 30,				March 31,				December 31,				September 30,					September 30,				September 30,
	2021				2021				2021				2020				2020					2021				2020
Asset Quality Performance Data
Non-performing assets
Commercial and industrial	$	9,952			$	42,036			$	59,723			$	38,314			$	40,781				$	9,952			$	40,781
Agricultural	6,682				7,135				8,684				10,719				13,293					6,682				13,293
Commercial real estate:
Office, retail, and industrial	13,450				17,367				23,339				27,382				26,406					13,450				26,406
Multi-family	2,672				2,622				3,701				1,670				1,547					2,672				1,547
Construction	1,154				1,154				1,154				1,155				2,977					1,154				2,977
Other commercial real estate	13,083				14,200				15,406				15,219				4,690					13,083				4,690
Consumer	17,173				16,867				16,643				15,498				13,888					17,173				13,888
Non-accrual, excluding PCD         loans	64,166				101,381				128,650				109,957				103,582					64,166				103,582
Non-accrual PCD loans	23,917				23,101				29,734				32,568				39,990					23,917				39,990
Total non-accrual loans	88,083				124,482				158,384				142,525				143,572					88,083				143,572
90 days or more past due loans,         still accruing interest	1,293				878				5,354				4,395				3,781					1,293				3,781
Total NPLs	89,376				125,360				163,738				146,920				147,353					89,376				147,353
Accruing TDRs	539				782				798				813				841					539				841
Foreclosed assets(5)	26,375				26,732				13,228				16,671				15,299					26,375				15,299
Total NPAs	$	116,290			$	152,874			$	177,764			$	164,404			$	163,493				$	116,290			$	163,493
30-89 days past due loans	$	30,718			$	21,051			$	30,973			$	40,656			$	21,551				$	30,718			$	21,551
Allowance for credit losses
Allowance for loan losses	$	206,241			$	214,601			$	235,359			$	239,017			$	239,048				$	206,241			$	239,048
Allowance for unfunded         commitments	8,625				8,625				8,025				8,025				7,825					8,625				7,825
Total ACL	$	214,866			$	223,226			$	243,384			$	247,042			$	246,873				$	214,866			$	246,873
Provision for loan losses	$	—			$	—			$	6,098			$	10,507			$	15,927				$	6,098			$	88,108
Net charge-offs by category
Commercial and industrial	$	5,002			$	14,733			$	1,740			$	3,536			$	5,470				$	21,475			$	14,885
Agricultural	(37		)		—				363				1,779				265					326				1,610
Commercial real estate:
Office, retail, and industrial	556				3,878				4,377				1,701				1,339					8,811				4,754
Multi-family	1				2				(5		)		19				—					(2		)		14
Construction	986				208				—				140				4,889					1,194				7,495
Other commercial real estate	829				459				371				916				1,753					1,659				1,936
Consumer	1,023				1,478				2,910				2,448				2,027					5,411				10,086
Total NCOs	$	8,360			$	20,758			$	9,756			$	10,539			$	15,743				$	38,874			$	40,780
Less: NCOs on PCD loans	(1,757		)		(4,337		)		(2,107		)		(6,488		)		(6,923		)			(8,201		)		(12,476		)
Total NCOs, excluding         PCD loans	$	6,603			$	16,421			$	7,649			$	4,051			$	8,820				$	30,673			$	28,304
Total recoveries included above	$	3,397			$	2,869			$	1,561			$	2,588			$	1,795				$	7,827			$	4,922
Note: Selected Financial Information footnotes are located at the end of this section.

Selected Financial Information (Unaudited)
	As of or for the
	Quarters Ended																					Nine Months Ended
	September 30,				June 30,				March 31,				December 31,				September 30,					September 30,				September 30,
	2021				2021				2021				2020				2020					2021				2020
Performing loans classified as substandard and special mention
Special mention loans(7)	$	330,218			$	343,547			$	355,563			$	409,083			$	395,295				$	330,218			$	395,295
Substandard loans(7)	351,192				325,727				342,600				357,219				311,430					351,192				311,430
Total performing loans         classified as substandard and         special mention(7)	$	681,410			$	669,274			$	698,163			$	766,302			$	706,725				$	681,410			$	706,725
Asset quality ratios
Non-accrual loans to total loans	0.60		%		0.83		%		1.04		%		0.97		%		0.98		%			0.60		%		0.98		%
Non-accrual loans to total loans,         excluding PPP loans(6)	0.61		%		0.87		%		1.13		%		1.02		%		1.07		%			0.61		%		1.07		%
Non-accrual loans to total loans,         excluding PCD and PPP loans(6)	0.45		%		0.72		%		0.93		%		0.80		%		0.78		%			0.45		%		0.78		%
NPLs to total loans	0.60		%		0.83		%		1.08		%		1.00		%		1.01		%			0.60		%		1.01		%
NPLs to total loans, excluding         PPP loans(6)	0.62		%		0.87		%		1.16		%		1.05		%		1.10		%			0.62		%		1.10		%
NPLs to total loans, excluding         PCD and PPP loans(6)	0.46		%		0.72		%		0.97		%		0.83		%		0.81		%			0.46		%		0.81		%
NPAs to total loans plus         foreclosed assets	0.78		%		1.01		%		1.17		%		1.11		%		1.11		%			0.78		%		1.11		%
NPAs to total loans plus         foreclosed assets, excluding         PPP loans(6)	0.81		%		1.06		%		1.26		%		1.18		%		1.21		%			0.81		%		1.21		%
NPAs to total loans plus         foreclosed assets, excluding         PCD and PPP loans(6)	0.65		%		0.92		%		1.07		%		0.96		%		0.93		%			0.65		%		0.93		%
NPAs to tangible common equity         plus ACL	6.52		%		8.63		%		10.23		%		9.27		%		9.37		%			6.52		%		9.37		%
Non-accrual loans to total assets	0.40		%		0.58		%		0.75		%		0.68		%		0.68		%			0.40		%		0.68		%
Performing loans classified as         substandard and special         mention to corporate loans(6)(7)	6.62		%		6.36		%		6.45		%		7.26		%		6.36		%			6.62		%		6.36		%
Performing loans classified as         substandard and special         mention to corporate loans,         excluding PPP loans(6)(7)	6.88		%		6.82		%		7.19		%		7.84		%		7.13		%			6.88		%		7.13		%
Allowance for credit losses and net charge-off ratios
ACL to total loans	1.45		%		1.48		%		1.60		%		1.67		%		1.68		%			1.45		%		1.68		%
ACL to non-accrual loans	243.94		%		179.32		%		153.67		%		173.33		%		171.95		%			243.94		%		171.95		%
ACL to NPLs	240.41		%		178.07		%		148.64		%		168.15		%		167.54		%			240.41		%		167.54		%
NCOs to average loans(2)	0.22		%		0.55		%		0.26		%		0.29		%		0.42		%			0.35		%		0.38		%
NCOs to average loans,         excluding PPP loans(2)	0.23		%		0.59		%		0.28		%		0.31		%		0.46		%			0.37		%		0.40		%
NCOs to average loans,         excluding PCD and PPP loans(2)	0.18		%		0.47		%		0.22		%		0.12		%		0.26		%			0.29		%		0.29		%

Footnotes to Selected Financial Information(1)   See the "Non-GAAP Reconciliations" section for the detailed calculation.(2)   Annualized based on the actual number of days for each period presented.(3)   Presented on a tax-equivalent basis, assuming the applicable federal income tax rate of 21%. (4)   Cost of funds expresses total interest expense as a percentage of total average funding sources.(5)   Foreclosed assets consists of OREO and other foreclosed assets acquired in partial or total satisfaction of defaulted loans. Other foreclosed assets are included in other assets in the Consolidated Statements of Financial Condition.(6)   This ratio excludes PPP loans that are fully guaranteed by the SBA. As a result, no allowance for credit losses is associated with these loans.(7)   Performing loans classified as substandard and special mention excludes accruing TDRs.

Non-GAAP Reconciliations (Unaudited)(Amounts in thousands, except per share data)
	Quarters Ended																					Nine Months Ended
	September 30,				June 30,				March 31,				December 31,				September 30,					September 30,				September 30,
	2021				2021				2021				2020				2020					2021				2020
EPS
Net income	$	54,863			$	51,121			$	45,023			$	41,605			$	27,623				$	151,007			$	66,293
Dividends and accretion on         preferred stock	(4,033		)		(4,034		)		(4,034		)		(4,049		)		(4,033		)			(12,101		)		(5,070
Net income applicable to non-         vested restricted shares	(517		)		(521		)		(486		)		(369		)		(236		)			(1,524		)		(615
Net income applicable to         common shares	50,313				46,566				40,503				37,187				23,354					137,382				60,608
Adjustments to net income:
Acquisition and integration         related expenses	2,916				7,773				245				1,860				881					10,934				11,602
Tax effect of acquisition and         integration related expenses	(729		)		(1,943		)		(61		)		(465		)		(220		)			(2,734		)		(2,900
Optimization costs	—				31				1,525				1,493				18,376					1,556				18,376
Tax effect of optimization         costs	—				(8		)		(381		)		(373		)		(4,594		)			(389		)		(4,594
Swap termination costs	—				—				—				17,567				14,285					—				14,285
Tax effect of swap termination         costs	—				—				—				(4,392		)		(3,571		)			—				(3,571
Income tax benefits	—				—				—				(3,639		)		—					—				—
Net securities gains	—				—				—				—				(14,328		)			—				(13,323
Tax effect of net securities         gains	—				—				—				—				3,582					—				3,331
Total adjustments to net         income, net of tax	2,187				5,853				1,328				12,051				14,411					9,367				23,206
Net income applicable to         common shares,         adjusted(1)	$	52,500			$	52,419			$	41,831			$	49,238			$	37,765				$	146,749			$	83,814
Weighted-average common shares outstanding:
Weighted-average common         shares outstanding (basic)	112,898				112,865				113,098				113,174				113,160					112,953				112,079
Dilutive effect of common         stock equivalents	878				775				773				430				276					789				322
Weighted-average diluted         common shares         outstanding	113,776				113,640				113,871				113,604				113,436					113,742				112,401
Basic EPS	$	0.45			$	0.41			$	0.36			$	0.33			$	0.21				$	1.22			$	0.54
Diluted EPS	$	0.44			$	0.41			$	0.36			$	0.33			$	0.21				$	1.21			$	0.54
Diluted EPS, adjusted(1)	$	0.46			$	0.46			$	0.37			$	0.43			$	0.33				$	1.29			$	0.75
Anti-dilutive shares not included         in the computation of diluted         EPS	—				—				—				—				—					—				—
Dividend Payout Ratio
Dividends declared per share	$	0.14			$	0.14			$	0.14			$	0.14			$	0.14				$	0.42			$	0.42
Dividend payout ratio	31.11		%		34.15		%		38.89		%		42.42		%		66.67		%			34.43		%		77.78		%
Dividend payout ratio, adjusted(1)	30.43		%		30.43		%		37.84		%		32.56		%		42.42		%			32.56		%		56.00		%
Note: Non-GAAP Reconciliations footnotes are located at the end of this section.

Non-GAAP Reconciliations (Unaudited)(Amounts in thousands, except per share data)
	As of or for the
	Quarters Ended																					Nine Months Ended
	September 30,				June 30,				March 31,				December 31,				September 30,					September 30,				September 30,
	2021				2021				2021				2020				2020					2021				2020
Return on Average Common and Tangible Common Equity
Net income applicable to         common shares	$	50,313			$	46,566			$	40,503			$	37,187			$	23,354				$	137,382			$	60,608
Intangibles amortization	2,793				2,798				2,807				2,807				2,810					8,398				8,400
Tax effect of intangibles         amortization	(698		)		(700		)		(702		)		(702		)		(703		)			(2,100		)		(2,100		)
Net income applicable to         common shares, excluding         intangibles amortization	52,408				48,664				42,608				39,292				25,461					143,680				66,908
Total adjustments to net income,         net of tax(1)	2,187				5,853				1,328				12,051				14,411					9,367				23,206
Net income applicable to         common shares, adjusted(1)	$	54,595			$	54,517			$	43,936			$	51,343			$	39,872				$	153,047			$	90,114
Average stockholders' common         equity	$	2,503,028			$	2,456,034			$	2,453,253			$	2,444,911			$	2,444,594				$	2,470,955			$	2,434,358
Less: average intangible assets	(924,743		)		(927,522		)		(931,322		)		(934,347		)		(938,712		)			(927,838		)		(920,180		)
Average tangible common         equity	$	1,578,285			$	1,528,512			$	1,521,931			$	1,510,564			$	1,505,882				$	1,543,117			$	1,514,178
Return on average common         equity(2)	7.97		%		7.60		%		6.70		%		6.05		%		3.80		%			7.43		%		3.33		%
Return on average common         equity, adjusted(1)(2)	8.32		%		8.56		%		6.92		%		8.01		%		6.15		%			7.94		%		4.60		%
Return on average tangible common equity(2)	13.17		%		12.77		%		11.35		%		10.35		%		6.73		%			12.45		%		5.90		%
Return on average tangible         common equity, adjusted(1)(2)	13.72		%		14.31		%		11.71		%		13.53		%		10.53		%			13.26		%		7.95		%
Return on Average Assets
Net income	$	54,863			$	51,121			$	45,023			$	41,605			$	27,623				$	151,007			$	66,293
Total adjustments to net income,         net of tax(1)	2,187				5,853				1,328				12,051				14,411					9,367				23,206
Net income, adjusted(1)	$	57,050			$	56,974			$	46,351			$	53,656			$	42,034				$	160,374			$	89,499
Average assets	$	21,899,560			$	21,533,209			$	20,919,040			$	20,882,325			$	21,526,695				$	21,454,195			$	20,271,140
Return on average assets(2)	0.99		%		0.95		%		0.87		%		0.79		%		0.51		%			0.94		%		0.44		%
Return on average assets,         adjusted(1)(2)	1.03		%		1.06		%		0.90		%		1.02		%		0.78		%			1.00		%		0.59		%
Noninterest Expense to Average Assets
Noninterest expense	$	116,054			$	121,419			$	118,425			$	117,971			$	131,074				$	355,898			$	368,735
Less:
Acquisition and integration         related expenses	(2,916		)		(7,773		)		(245		)		(1,860		)		(881		)			(10,934		)		(11,602		)
Optimization costs	—				(31		)		(1,525		)		(1,493		)		(18,376		)			(1,556		)		(18,376		)
Total	$	113,138			$	113,615			$	116,655			$	114,618			$	111,817				$	343,408			$	338,757
Average assets	$	21,899,560			$	21,533,209			$	20,919,040			$	20,882,325			$	21,526,695				$	21,454,195			$	20,271,140
Less: average PPP loans	(549,380		)		(1,035,386		)		(1,014,798		)		(1,013,511		)		(1,194,808		)			(864,816		)		(696,095		)
Average assets, excluding PPP         loans	$	21,350,180			$	20,497,823			$	19,904,242			$	19,868,814			$	20,331,887				$	20,589,379			$	19,575,045
Noninterest expense to average         assets(2)	2.10		%		2.26		%		2.30		%		2.25		%		2.42		%			2.22		%		2.43		%
Noninterest expense, adjusted to         average assets, excluding PPP         loans(2)	2.10		%		2.22		%		2.38		%		2.29		%		2.19		%			2.23		%		2.31		%
Note: Non-GAAP Reconciliations footnotes are located at the end of this section.

Non-GAAP Reconciliations (Unaudited)(Amounts in thousands, except per share data)
	As of or for the
	Quarters Ended																					Nine Months Ended
	September 30,				June 30,				March 31,				December 31,				September 30,					September 30,				September 30,
	2021				2021				2021				2020				2020					2021				2020
Efficiency Ratio Calculation
Noninterest expense	$	116,054			$	121,419			$	118,425			$	117,971			$	131,074				$	355,898			$	368,735
Less:
Acquisition and integration         related expenses	(2,916		)		(7,773		)		(245		)		(1,860		)		(881		)			(10,934		)		(11,602		)
Net OREO expense	4				(160		)		(589		)		(106		)		(544		)			(745		)		(1,090		)
Optimization costs	—				(31		)		(1,525		)		(1,493		)		(18,376		)			(1,556		)		(18,376		)
Total	$	113,142			$	113,455			$	116,066			$	114,512			$	111,273				$	342,663			$	337,667
Tax-equivalent net interest         income(3)	$	146,190			$	145,241			$	142,098			$	149,141			$	143,821				$	433,529			$	434,938
Noninterest income	45,180				46,270				45,803				27,715				40,585					137,253				112,938
Less:
Swap termination costs	—				—				—				17,567				14,285					—				14,285
Net securities gains	—				—				—				—				(14,328		)			—				(13,323		)
Total	$	191,370			$	191,511			$	187,901			$	194,423			$	184,363				$	570,782			$	548,838
Efficiency ratio	59.12		%		59.24		%		61.77		%		58.90		%		60.36		%			60.03		%		61.52		%
Pre-Tax, Pre-Provision Earnings
Net Income	$	54,863			$	51,121			$	45,023			$	41,605			$	27,623				$	151,007			$	66,293
Income tax expense	19,459				18,018				17,372				5,743				8,690					54,849				21,340
Provision for credit losses	—				—				6,098				10,507				15,927					6,098				88,108
Pre-Tax, Pre-Provision         Earnings	$	74,322			$	69,139			$	68,493			$	57,855			$	52,240				$	211,954			$	175,741
Adjustments to pre-tax, pre-provision earnings:
Acquisition and integration         related expenses	$	2,916			$	7,773			$	245			$	1,860			$	881				$	10,934			$	11,602
Optimization costs	—				31				1,525				1,493				18,376					1,556				18,376
Swap termination costs	—				—				—				17,567				14,285					—				14,285
Net securities gains	—				—				—				—				(14,328		)			—				(13,323		)
Total adjustments	2,916				7,804				1,770				20,920				19,214					12,490				30,940
Pre-Tax, Pre-Provision         Earnings, adjusted	$	77,238			$	76,943			$	70,263			$	78,775			$	71,454				$	224,444			$	206,681
Note: Non-GAAP Reconciliations footnotes are located at the end of this section.

Non-GAAP Reconciliations (Unaudited)(Amounts in thousands, except per share data)
	As of or for the
	Quarters Ended
	September 30,				June 30,				March 31,				December 31,				September 30,
	2021				2021				2021				2020				2020
Tangible Common Equity
Stockholders' equity, common	$	2,492,723			$	2,473,648			$	2,422,815			$	2,459,506			$	2,433,671
Less: goodwill and other intangible assets	(923,383		)		(926,176		)		(928,974		)		(932,764		)		(935,801		)
Tangible common equity	1,569,340				1,547,472				1,493,841				1,526,742				1,497,870
Less: AOCI	25,381				5,941				22,096				(26,379		)		(25,749		)
Tangible common equity, excluding AOCI	$	1,594,721			$	1,553,413			$	1,515,937			$	1,500,363			$	1,472,121
Total assets	$	21,778,180			$	21,625,424			$	21,208,591			$	20,838,678			$	21,088,143
Less: goodwill and other intangible assets	(923,383		)		(926,176		)		(928,974		)		(932,764		)		(935,801		)
Tangible assets	20,854,797				20,699,248				20,279,617				19,905,914				20,152,342
Less: PPP loans	(384,100		)		(705,915		)		(1,109,442		)		(785,563		)		(1,196,538		)
Tangible assets, excluding PPP loans	$	20,470,697			$	19,993,333			$	19,170,175			$	19,120,351			$	18,955,804
Tangible common equity to tangible assets	7.53		%		7.48		%		7.37		%		7.67		%		7.43		%
Tangible common equity to tangible assets, excluding PPP loans	7.67		%		7.74		%		7.79		%		7.98		%		7.90		%
Tangible common equity, excluding AOCI, to tangible assets	7.65		%		7.50		%		7.48		%		7.54		%		7.30		%
Tangible common equity, excluding AOCI, to tangible assets,         excluding PPP loans	7.79		%		7.77		%		7.91		%		7.85		%		7.77		%
Tangible common equity to risk-weighted assets	10.08		%		9.92		%		9.73		%		9.93		%		9.84		%

Footnotes to Non-GAAP Reconciliations(1)   Adjustments to net income for each period presented are detailed in the EPS non-GAAP reconciliation above. For additional discussion of adjustments, see the "Non-GAAP Financial Information" section.(2)   Annualized based on the actual number of days for each period presented. (3)   Presented on a tax-equivalent basis, assuming the applicable federal income tax rate of 21%.