Midwest Banc — Shareholder Meeting (May 2008)
47 slides from Midwest Banc's shareholder meeting presentation, May 7, 2008
Slide 1: 2008 Shareholders' Meeting - Jim Giancola, CEO
2008 Shareholders' Meeting Jim Giancola - CEO 2008 Shareholders' Meeting Be Free
Slide 2: Forward Looking Statements
Any oral statements made by representatives of the Company or any written statements contained in any written documents provided at this presentation concerning financial and other projections constitute forward looking statements within the meaning of the Securities Exchange Act of 1934 and are sub
Slide 3: Economic Environment
Economic Environment Net Interest Margin at 20-year low Credit Costs Rising Liquidity Issues Impacting Pricing M&A Business Dormant Major Market Disruption
Slide 4: Pre-Management Change & Clean-up
Pre-Management Change & Clean-up 1 2 3 4 12/31/02 - 9/28/04 MBHI -1% Chicago Banks 51% NASDAQ Bank 32% 1 3/8/03 Regulators ask MBHI to restate FY02; Covest transaction on hold. 2 7/1/03 Covest deal terminated 3 11/4/03 Announced Q3 EPS of $0.12; took a $7.7mm provision and $5.4mm charge-off; noted t
Slide 5: New Management / Royal / Pre-LPC
New Management / Royal / Pre-LPC 2 5 9/28/04 - 7/20/06 MBHI 17% Chicago Banks 4% NASDAQ Bank 8% 3 4 6 7 1 1 9/28/04 Giancola appointed President & CEO 2 3/1/05 Revised Q4 Earnings for Impairment; FYE EPS of $0.13 3 5/10/05 Announced Q1 EPS of $0.22 4 8/11/05 Priced 3mm share offering at $21.00/share
Slide 6: Post-LPC Announcement
Post-LPC Announcement 1 4 2 3 5 7/20/06 - 5/2/08 MBHI -55% Chicago Banks -26% NASDAQ Bank -18% 1 7/21/06 Announced $5mm provision; $16mm loans to classified due to LPC 2 1/19/07 Announced $7.5mm charge-off and increase of $5.5mm provision for LPC 3 3/23/07 Announced $140mm acquisition of Northwest S
Slide 7: Chicago Peers - Core EPS
Chicago Peers - Core EPS* * Per SNL Financial, core income, on a diluted per-share basis. Core income is net income before extraordinary items less the after-tax portion of income from investment (non-trading) securities and nonrecurring items. The assumed tax rate is 35%. Peer Data Source: SNL
Slide 8: Chicago Peers - Core EPS
Chicago Peers - Core EPS* * Per SNL Financial, core income, on a diluted per-share basis. Core income is net income before extraordinary items less the after-tax portion of income from investment (non-trading) securities and nonrecurring items. The assumed tax rate is 35%. Peer Data Source: SNL
Slide 9: Chicago Peers - Core EPS
Chicago Peers - Core EPS* * Per SNL Financial, core income, on a diluted per-share basis. Core income is net income before extraordinary items less the after-tax portion of income from investment (non-trading) securities and nonrecurring items. The assumed tax rate is 35%. Peer Data Source: SNL
Slide 10: Chicago Peers - Core EPS
Chicago Peers - Core EPS* * Per SNL Financial, core income, on a diluted per-share basis. Core income is net income before extraordinary items less the after-tax portion of income from investment (non-trading) securities and nonrecurring items. The assumed tax rate is 35%. Peer Data Source: SNL
Slide 11: Chicago Peers - Core EPS
Chicago Peers - Core EPS* * Per SNL Financial, core income, on a diluted per-share basis. Core income is net income before extraordinary items less the after-tax portion of income from investment (non-trading) securities and nonrecurring items. The assumed tax rate is 35%. Peer Data Source: SNL
Slide 12: Chicago Peers - Core EPS
Chicago Peers - Core EPS* * Per SNL Financial, core income, on a diluted per-share basis. Core income is net income before extraordinary items less the after-tax portion of income from investment (non-trading) securities and nonrecurring items. The assumed tax rate is 35%. Peer Data Source: SNL
Slide 13: Chicago Peers - Asset Quality
Chicago Peers - Asset Quality * Excludes the LPC NPAs / Loan Related Assets Peer Data Source: SNL
Slide 14: Chicago Peers - Asset Quality
Chicago Peers - Asset Quality NPAs / Loan Related Assets Peer Data Source: SNL
Slide 15: Stock Price Performance - Year
Stock Price Performance - 1 Year Source: SNL
Slide 16: Stock Price Performance - Months
Stock Price Performance - 6 Months Source: SNL
Slide 17: Stock Price Performance - Months
Stock Price Performance - 3 Months Source: SNL
Slide 18: 2008 Shareholders' Meeting - JoAnn Lilek, CFO
2008 Shareholders' Meeting JoAnn Lilek - CFO 2008 Shareholders' Meeting
Slide 19: 1Q08 Earnings - Not Comparable
1Q08 Earnings - Not Comparable
Slide 20: "Run Rate" Income - The Numbers Behind the Numbers
"Run Rate" Income - - The Numbers Behind the Numbers Run Rate Income - excludes non-recurring transactions. Other-than-temporary Impairment (OTTI) 11,033 Net Income before OTTI $ 5,617 Branch Sale Gain (9,157) Additional Provision 1,808 FHLB Prepayment Expense 4,291 Other 747 Run Rate Income $ 3,306
Slide 21: Total Revenue Trend
Total Revenue Trend $26.4 $22.8 $27.4 Note: Excludes OTTI and branch sale.
Slide 22: Balance Sheet Trends
Balance Sheet Trends $4,000 $3,000 $2,000 $1,000 $- 1Q07 4Q07 1Q08 Assets $2,981 $3,693 $3,730 Loans $1,951 $2,474 $2,468 D Investments $684 $748 $770
Slide 23: Net Interest Margins Shrinking Industry Wide
Net Interest Margins Shrinking Industry Wide Peer Data Source: SNL
Slide 24: Core Deposits / Total Deposits (Avg Balance)
Core Deposits / Total Deposits (Avg Balance)
Slide 25: Expense to Average Assets
Expense to Average Assets Note: Excludes FHLB prepayment penalty and merger related expense. Peer Data Source: SNL
Slide 26: Asset Quality - Non Performing Assets / Loan Related Assets
Asset Quality - - Non Performing Assets / Loan Related Assets TO BE UPDATED BY SHAN LIU Peer Data Source: SNL
Slide 27: Capital
Capital Total Capital Ratio Tier | Leverage Ratio Tier I Risk-Based Capital Ratio Total Risk-Based Capital Ratio Well Capitalized 4Q07 1008 Guidelines 10.2% 10.2% NA 13% 75% 5.0% 9.2% 9.3% 6.0% 10.2% 10.6% 10.0%
Slide 28: Margin, Loan and Deposit Growth - Revenue Potential
Margin, Loan and Deposit Growth - - Revenue Potential
Slide 29: Conclusion
Solid platform for growth Asset quality stable Capital Strong Conclusion
Slide 30: 2008 Shareholders' Meeting - Jay Fritz, President, Midwest Bank & Trust
2008 Shareholders' Meeting Jay Fritz - President - Midwest Bank & Trust 2008 Shareholders' Meeting
Slide 31: 2004 - 2008 Loan Portfolio Transformation
2004 - 2008 Loan Portfolio Transformation from "thrift-like" to traditional bank. 2004 $1.1 Billion * $576 million, or 53%, of the CRE portfolio is owner-occupied. The Bank did not monitor the owner-occupied portion of CRE in 2004, but it was estimated to be a small portion of the total in 2004. The
Slide 32: 2004 - 2008 Average Core Deposit Mix
2004 - 2008 Average Core Deposit Mix 2004 $662 Million Q1 2008 $945 Million Compound annual growth rate of 11.5% "Free Balances" the most coveted core account * Average core deposits are 39% of average total deposits as of Q1 2008 versus 46% of as of FYE 2004 due to efficient use of wholesale fundin
Slide 33: Foundations for Success
Foundations for Success FOCUS ON CUSTOMER RELATIONSHIPS PEOPLE TECHNOLOGY PRODUCTS
Slide 34: Foundations for Success - People
Foundations for Success - People Continuing Assimilation/Strengthening Team 113 Officers (57%) in three years Add drivers of Revenue Build on our Customer Service Culture Blue Book Focus on Strong Credit Culture Weekly lender meetings Centralized construction loan monitoring Credit Remediation Actio
Slide 35: Foundations for Success - Technology
Foundations for Success - Technology Allpoint ATM Network 32,000 Nationwide E-statements Cash Management Enhancements Expanded Call Center Imaging Project Better Information/Timely Customer Service Encore Branch P/L
Slide 36: Foundations for Success - Products
Foundations for Success - Products Risk-based Pricing for Credit Relationship Savings Reward loyalty Strengthen ties Streamline Product Offerings 59 retail deposit products to 27 Easier to sell Easier to use
Slide 37: 2008 Shareholders' Meeting - John Eilering, Area President - Northwest
2008 Shareholders' Meeting John Eilering - Area President - Northwest 2008 Shareholders' Meeting
Slide 38: Fee Income
Fee Income Issues Margin compression Fees lower than peers Opportunities Northwest Suburban on board Automated teller network Cash management services Credit card merchant services Employee awareness
Slide 39: Cash Management Services
Cash Management Services Internet Banking Automated Clearing House (ACH) Wire Initiation Account Reconciliation Investment Sweeps Credit Sweeps Zero Balance Accounts Lockbox Services Positive Pay
Slide 40: Bill Payment - Quick Payment
Bill Payment — Quick Payment = Midwest Bank iE BANK WHERE YOU BELONG” yy"
Slide 41: Bill Payment - Repetitive Payment
Bill Payment - Repetitive Payment
Slide 42: Think Fast. Think Rapid Deposit.
Think Fast. Think Rapid Deposit. How does it work? Why Rapid Deposit? Improve Cash Collection Improve Internal Control and Security Saves Time Information Reporting
Slide 43: 2008 Shareholders' Meeting - Jim Giancola, CEO
2008 Shareholders' Meeting Jim Giancola - CEO 2008 Shareholders' Meeting Be Free
Slide 44: 2008 - 2010 Key Initiatives
2008 - 2010 Key Initiatives Exit Commodity Businesses Residential Mortgage Credit Card Anything bought from a loan broker Manage Expenses Aggressively Branch Banking Strategy 2004-2007 Approximately 500 new branches added in Chicago 2008 Approximately 100 branches closing in Chicago Add locations VE
Slide 45: Credit Quality is KING
Credit Quality is KING Serving two masters - loan growth in a recession Margin Management 85% of our revenue Capital Management Dividend Regulatory requirements Financial Reporting Board reporting Financial analysis and management Site, product and business line profitability Management talent 2008
Slide 46: M&A - 2008 - 2010 Key Initiatives
M&A Manage interest Nontraditional inquiries Large regionals Foreign interest Evaluate opportunities Enhance fee businesses Wealth Management Acquisition(s) 2008 - 2010 Key Initiatives
Slide 47: Thank You! Questions?
THANK YOU! QUESTIONS? 2008 Shareholders' Meeting Be Free
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