GlobeNewswire Inc | Apr 20, 2021 05:35PM EDT

April 20, 2021

CHICAGO, April 20, 2021 (GLOBE NEWSWIRE) -- 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 first quarter of 2021. Net income applicable to common shares for the first quarter of 2021 was $41 million, or $0.36 per diluted common share, compared to $37million, or $0.33 per diluted common share, for the fourth quarter of 2020, and $19 million, or $0.18 per diluted common share, for the first quarter of 2020.

Comparative results for the first quarter of 2021 and the fourth and first quarters of 2020 were, in certain cases, impacted by the timing of costs related to bank acquisition and branch consolidation, as well as the recognition of certain income tax benefits. Such results were also impacted by the Companys response to the COVID-19 pandemic (the "pandemic"), as well as governments' responses to the pandemic. The Company's responses included repositioning its balance sheet which impacted its performance. To facilitate comparison 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 FIRST QUARTER HIGHLIGHTS

-- Improved diluted EPS to $0.36, up 9% and 100% from the fourth and first quarters of 2020, respectively. Diluted EPS, adjusted(1) of $0.37, declined 14% from the fourth quarter of 2020, impacted by lower income from the Paycheck Protection Program ("PPP"), partly offset by lower provisioning for loan losses. The increase from a year ago largely reflects the initial increase in provision for loan losses responsive to the pandemic. -- Increased fee-based revenues to $44 million, up 5% and 17% from the fourth and first quarters of 2020, respectively, reflective of record wealth management fees and mortgage banking income. -- Produced net interest income of $141 million at a net margin of 3.03%, down 11 basis points ("bps") linked quarter due to lower PPP loan income and down 51 bps from a year ago, reflective of lower interest rates. -- Increased total loans to $14 billion, up 3% annualized from December 31, 2020, excluding PPP. -- Maintained robust credit and capital reserves as economic recovery continues: Held the allowance for credit losses ("ACL") at 1.73% of total loans, excluding PPP loans, in-line with 1.77% linked quarter and up from 1.62% a year ago. Incurred net loan charge-offs ("NCOs") of $8 million, compared to $4 million and $10 million in the fourth and first quarters of 2020, excluding purchased credit deteriorated ("PCD") loans.Decreased performing loans classified as substandard and special mention by 9% linked quarter while loans past due 30-89 days declined by 24%.Increased Tier 1 capital to 11.7% of risk-weighted assets, up 12 bps linked quarter and 203 bps from a year ago. Repurchased 715,000 shares of our common stock at a cost of $15 million.

"We had a solid start to the year as our overall performance improved as the economic recovery gains traction," said Michael L. Scudder, Chairman of the Board and Chief Executive Officer of the Company. "Operating performance for the quarter once again benefited from strong production from our fee-based businesses and continued focus on managing our costs. As expected, quarterly comparisons were affected by both normal seasonality and the impact of federal stimulus programs on both client liquidity and transactional volumes. Importantly, our underlying business momentum is strengthening as both production volumes and sales pipelines normalize and improve."

Mr. Scudder concluded, "As the economic recovery builds momentum, we are well positioned for continued growth and expansion. Our balance sheet is strong, preparing us to benefit from an improving credit outlook and growing business demand, as well as from anticipated higher interest rates. As always, our response and collective focus remain on helping our clients achieve financial success, delivering on our strategic priorities and creating long term value for our shareholders."

(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 March 31, 2021 December 31, 2020 March 31, 2020 Average Yield/ Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate (%) (%) (%)Assets Other interest-earning $ 760,302 $ 680 0.36 $ 1,244,999 $ 930 0.30 $ 164,351 $ 816 2.00 assetsSecurities^(1) 3,131,096 16,264 2.08 3,164,310 17,051 2.16 3,066,574 20,757 2.71 Federal Home Loan Bank("FHLB") and Federal 107,595 989 3.68 123,287 1,342 4.35 126,643 1,387 4.38 Reserve Bank ("FRB")stockLoans, excluding PPP 13,993,303 125,308 3.63 13,335,154 126,474 3.77 13,073,752 148,420 4.57 loans^(1)PPP loans^(1) 1,014,798 8,892 3.55 1,013,511 15,195 5.96 ? ? ? Total loans^(1) 15,008,101 134,200 3.63 14,348,665 141,669 3.93 13,073,752 148,420 4.57 Total interest-earning 19,007,094 152,133 3.24 18,881,261 160,992 3.39 16,431,320 171,380 4.19 assets^(1)Cash and due from banks 236,944 252,268 261,336 Allowance for loan (239,802 ) (246,278 ) (179,392 ) lossesOther assets 1,914,804 1,995,074 1,891,557 Total assets $ 20,919,040 $ 20,882,325 $ 18,404,821 Liabilities and Stockholders' EquitySavings deposits $ 2,573,495 113 0.02 $ 2,436,930 109 0.02 $ 2,069,163 164 0.03 NOW accounts 2,802,568 251 0.04 2,774,989 277 0.04 2,273,156 1,630 0.29 Money market deposits 3,008,597 634 0.09 2,923,881 694 0.09 2,227,707 3,099 0.56 Time deposits 1,978,986 2,459 0.50 2,047,260 3,131 0.61 2,932,466 12,224 1.68 Borrowed funds 1,329,394 3,107 0.95 1,661,731 4,158 1.00 2,007,700 5,841 1.17 Senior and subordinated 234,873 3,471 5.99 234,669 3,482 5.90 234,053 3,694 6.35 debtTotal interest-bearing 11,927,913 10,035 0.34 12,079,460 11,851 0.39 11,744,245 26,652 0.91 liabilitiesDemand deposits 5,917,978 5,753,600 3,884,015 Total funding sources 17,845,891 0.23 17,833,060 0.26 15,628,260 0.69 Other liabilities 389,396 373,854 361,404 Stockholders' equity 2,683,753 2,675,411 2,415,157 Total liabilities and $ 20,919,040 $ 20,882,325 $ 18,404,821 stockholders' equityTax-equivalent netinterest income/margin^ 142,098 3.03 149,141 3.14 144,728 3.54 (1)Tax-equivalent (983 ) (1,030 ) (1,153 ) adjustmentNet interest income $ 141,115 $ 148,111 $ 143,575 (GAAP)^(1)Impact of acquired loan $ 7,165 0.15 $ 7,603 0.16 $ 6,946 0.17 accretion^(1)Tax-equivalent netinterest income/margin, $ 134,933 2.88 $ 141,538 2.98 $ 137,782 3.37 adjusted^(1)

(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 first quarter of 2021 was down 4.7% from the fourth quarter of 2020 and 1.7% from the first quarter of 2020. The decrease in net interest income compared to the fourth quarter of 2020 resulted primarily from lower fees on PPP loans and fewer days in the quarter, partially offset by growth in loans and lower costs of funds. Compared to the first quarter of 2020, net interest income was impacted by lower interest rates, partially offset by growth in loans and an increase in interest income and fees on PPP loans, as well as the acquisition of interest-earning assets from the Park Bank transaction that closed in the first quarter of 2020.

Acquired loan accretion contributed $7.2 million, $7.6 million, and $6.9 million to net interest income for the first quarter of 2021, fourth quarter of 2020, and first quarter of 2020, respectively.

Tax-equivalent net interest margin for the current quarter was 3.03%, decreasing 11 and 51 basis points from the fourth and first quarters of 2020, respectively. Excluding the impact of acquired loan accretion, tax-equivalent net interest margin was 2.88%, down 10 and 49 basis points from the fourth and first quarters of 2020, respectively. Compared to the fourth quarter of 2020, tax-equivalent net interest margin decreased due primarily to lower accelerated income on the forgiveness of PPP loans. Tax-equivalent net interest margin decreased compared to the first quarter of 2020 as a result of 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, partially offset by lower cost of funds, loan growth, and higher yields on PPP loans.

For the first quarter of 2021, total average interest-earning assets rose by $125.8 million and $2.6 billion from the fourth and first quarters of 2020, respectively. The increase compared to the fourth quarter of 2020 resulted primarily from loan growth, partially offset by a lower balance of other interest-earning assets. Compared to the first quarter of 2020, the increase in average interest-earning assets was due primarily to assets acquired in the Park Bank transaction, loan growth, and a higher balance of other interest-earning assets due to higher demand deposits as a result of PPP loan funds and other government stimuli.

Total average funding sources for the first quarter of 2021 were consistent with the fourth quarter of 2020 and increased by $2.2billion from first quarter of 2020. The increase compared to the first quarter of 2020 was driven primarily by deposit growth due to higher customer balances resulting from PPP funds and other government stimuli, as well as deposits assumed in the Park Bank transaction, partially offset by a decrease in FHLB advances.

Noninterest Income Analysis(Dollar amounts in thousands) March 31, 2021 Quarters Ended Percent Change From March 31, December March 31, December March 2021 31, 2020 31, 31, 2020 2020 2020Wealth management $ 14,149 $ 13,548 $ 12,361 4.4 14.5 feesMortgage banking 10,187 9,191 1,788 10.8 469.7 incomeService charges on 9,980 10,811 11,781 (7.7 ) (15.3 )deposit accountsCard-based fees, 4,556 4,530 3,968 0.6 14.8 netCapital market 2,089 659 4,722 217.0 (55.8 )products incomeOther servicecharges, 2,761 2,993 2,682 (7.8 ) 2.9 commissions, andfeesTotal fee-based 43,722 41,732 37,302 4.8 17.2 revenuesOther income 2,081 3,550 3,065 (41.4 ) (32.1 )Swap termination ? (17,567 ) ? N/M N/M costsNet securities ? ? (1,005 ) N/M N/M lossesTotal noninterest $ 45,803 $ 27,715 $ 39,362 65.3 16.4 income

N/M Not meaningful.

Total noninterest income of $45.8 million was up 65.3% from the fourth quarter of 2020 and 16.4% from the first quarter of 2020. Excluding the impact of swap termination costs in the fourth quarter of 2020, total noninterest income increased 1.2%. Record wealth management fees resulted from a higher market environment and continued sales of fiduciary and investment advisory services to new and existing customers compared to both prior periods. The decrease in service charges on deposit accounts compared to the fourth quarter of 2020 was due primarily to seasonality, whereas the decrease from the first quarter of 2020 resulted from the impact of lower transaction volumes due to the pandemic. Capital market products income resulted from levels of sales to corporate clients in light of market conditions that were higher than the fourth quarter of 2020 and lower than the first quarter of 2020.

Record mortgage banking income for the first quarter of 2021 resulted from sales of $283.9 million of 1-4 family mortgage loans in the secondary market compared to $275.6 million and $116.6 million in the fourth and first quarters of 2020, respectively. In addition, mortgage banking income for the first quarter of 2021 increased compared to both prior periods due to increases in the fair value of mortgage servicing rights.

Other income decreased compared to both prior periods as a result of fair value adjustments on equity securities.

During the fourth quarter of 2020, the Company terminated longer term interest rate swaps with a notional amount of $510million as a result of excess liquidity and in response to market conditions. As a result, $17.6 of pre-tax losses on swap terminations were recorded.

Net securities losses of $1.0 million were recognized during the first quarter of 2020 as a result of repositioning of the Company's securities portfolio due to market conditions.

Noninterest Expense Analysis(Dollar amounts in thousands) Quarters Ended March 31, 2021 Percent Change From March 31, December March 31, December March 2021 31, 2020 31, 31, 2020 2020 2020Salaries andemployee benefits:Salaries and $ 53,693 $ 55,950 $ 49,990 (4.0 ) 7.4 wagesRetirement andother employee 12,708 10,430 12,869 21.8 (1.3 )benefitsTotal salariesand employee 66,401 66,380 62,859 ? 5.6 benefitsNet occupancyand equipment 14,752 14,002 14,227 5.4 3.7 expenseTechnology and 10,284 11,005 8,548 (6.6 ) 20.3 related costsProfessional 8,059 8,424 10,390 (4.3 ) (22.4 )servicesAdvertising and 1,835 1,850 2,761 (0.8 ) (33.5 )promotionsNet other realestate owned 589 106 420 455.7 40.2 ("OREO")expenseOther expenses 14,735 12,851 12,654 14.7 16.4 Optimization 1,525 1,493 ? 2.1 100.0 costsAcquisition andintegration 245 1,860 5,472 (86.8 ) (95.5 )relatedexpensesTotalnoninterest $ 118,425 $ 117,971 $ 117,331 0.4 0.9 expenseOptimization (1,525 ) (1,493 ) ? 2.1 (100.0 )costsAcquisition andintegration (245 ) (1,860 ) (5,472 ) (86.8 ) (95.5 )relatedexpensesTotalnoninterest $ 116,655 $ 114,618 $ 111,859 1.8 4.3 expense,adjusted^(^1^)

(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 stable compared to both prior periods. Noninterest expense for all periods presented was impacted by acquisition and integration related expenses. In addition, the first quarter of 2021 and fourth quarter of 2020 were impacted by optimization costs. Excluding these items, noninterest expense for the first quarter of 2021 was $116.7million, up 1.8% from the fourth quarter of 2020 reflective of seasonality, and up 4.3% from the first quarter of 2020. Overall, noninterest expense, adjusted, to average assets, excluding PPP loans, was 2.38% for the first quarter of 2021, up 9 basis points and down 6 basis points from the fourth and first quarters of 2020, respectively.

Operating costs associated with the Park Bank transaction contributed to the increase in noninterest expense compared to the first quarter of 2020. These costs primarily occurred in salaries and employee benefits, net occupancy and equipment expense, technology and related costs, and other expenses.

Salaries and employee benefits compared to the fourth quarter of 2020 were impacted by merit increases, payroll tax timing, and higher equity compensation valuations, offset by ongoing benefits of optimization strategies and lower compensation accruals. Compared to the first quarter of 2020, salaries and employee benefits increased primarily due to higher equity compensation valuations, compensation accruals, commissions, and merit increases, partially offset by ongoing benefits of optimization strategies. Higher costs related to winter weather conditions contributed to the increase in net occupancy and equipment costs compared to the fourth quarter of 2020. Compared to the first quarter of 2020, technology and related costs was impacted by investments in technology, including the origination of PPP loans. Professional services expenses were elevated for the first quarter of 2020 due to process enhancements and expenses associated with higher capital market products income. Advertising and promotions expense decreased compared to the first quarter of 2020 due to the timing of certain costs related to marketing campaigns. Other expenses for the first quarter of 2021 was impacted by a valuation adjustment on a foreclosed asset.

Optimization costs of $1.5 million for the first quarter of 2021 primarily include advisory fees, employee severance, and other expenses associated with locations identified for closure.

Acquisition and integration related expenses for all periods presented resulted primarily from the acquisition of Park Bank.

INCOME TAXES

The Company's effective tax rate for the first quarter of 2021 was 27.8% up from 12.1% and 24.8% for the fourth and first quarters of 2020, respectively. The increase compared to both prior periods was driven primarily by a $1.1 million increase in income tax expense related to share-based payments and a decrease in federal and state tax exempt income. In addition, the effective tax rate for the fourth quarter of 2020 was impacted by $3.6 million of income tax benefits resulting from deferred tax asset adjustments, as well as the finalization of the prior year returns and the expiration of the statute of limitations on uncertain tax positions.

LOAN PORTFOLIO AND ASSET QUALITY

Loan Portfolio Composition(Dollar amounts in thousands) March 31, 2021 As of Percent Change From March 31, December 31, March 31, December March 2021 2020 2020 31, 31, 2020 2020Commercialand $ 4,546,317 $ 4,578,254 $ 5,064,295 (0.7 ) (10.2 )industrialAgricultural 355,883 364,038 393,063 (2.2 ) (9.5 )Commercial real estate:Office,retail, and 1,827,116 1,861,768 2,092,097 (1.9 ) (12.7 )industrialMulti-family 906,124 872,813 918,944 3.8 (1.4 )Construction 614,021 612,611 661,363 0.2 (7.2 )Othercommercial 1,463,582 1,481,976 1,415,892 (1.2 ) 3.4 real estateTotalcommercial 4,810,843 4,829,168 5,088,296 (0.4 ) (5.5 )real estateTotalcorporateloans, 9,713,043 9,771,460 10,545,654 (0.6 ) (7.9 )excludingPPP loansPPP loans 1,109,442 785,563 ? 41.2 N/M Totalcorporate 10,822,485 10,557,023 10,545,654 2.5 2.6 loansHome equity 690,030 761,725 973,658 (9.4 ) (29.1 )1-4 family 3,187,066 3,022,413 1,957,037 5.4 62.9 mortgagesInstallment 483,945 410,071 488,668 18.0 (1.0 )Totalconsumer 4,361,041 4,194,209 3,419,363 4.0 27.5 loansTotal loans $ 15,183,526 $ 14,751,232 $ 13,965,017 2.9 8.7

N/M Not meaningful.

Total loans includes loans originated under the PPP loan programs beginning in the second quarter of 2020, which totaled $1.1billion and $785.6 million as of March 31, 2021 and December 31, 2020, respectively. Excluding these loans, total loans were up 3% annualized from December 31, 2020 and 1% from March 31, 2020. Compared to both prior periods, corporate loans, excluding PPP loans, were impacted by lower line usage and higher paydowns due to current economic conditions as a result of the ongoing pandemic. Production increased in the first quarter of 2021 compared to the fourth quarter of 2020; however, this continued to be more than offset by excess borrower liquidity and paydowns as a result of the pandemic and below pre-pandemic production levels.

Growth in consumer loans compared to both prior periods resulted primarily from purchases of 1-4family mortgages and installment loans, as well as strong production in the 1-4 family mortgages portfolio, which more than offset higher prepayments.

Allowance for Credit Losses(Dollar amounts in thousands) As of or for the Quarters Ended March 31, 2021 Percent Change From March 31, December March 31, December March 2021 31, 2020 31, 31, 2020 2020 2020ACL,excluding $ 215,305 $ 215,915 $ 176,478 (0.3 ) 22.0 PCD loansPCD loan 28,079 31,127 50,223 (9.8 ) (44.1 )ACLTotal ACL $ 243,384 $ 247,042 $ 226,701 (1.5 ) 7.4 Provisionfor credit $ 6,098 $ 10,507 $ 39,532 (42.0 ) (84.6 )lossesACL to 1.60 % 1.67 % 1.62 % total loansACL tototalloans, 1.73 % 1.77 % 1.62 % excludingPPP loans^(1)ACL tonon-accrual 153.67 % 173.33 % 154.64 % loans

(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 $243.4 million or 1.60% of total loans as of March 31, 2021, decreasing $3.7 million from December 31, 2020 and increasing $16.7million compared to March 31, 2020. Excluding the impact of PPP loans, ACL to total loans was 1.73% as of March 31, 2021, compared to 1.77% and 1.62% as of December 31, 2020 and March 31, 2020, respectively. The decrease from December 31, 2020 reflects net charge-offs on PCD loans that previously had an ACL established upon acquisition and the increase compared to March 31, 2020 is due to additional ACL established as a result of the pandemic during 2020.

Asset Quality(Dollar amounts in thousands) As of March 31, 2021 Percent Change From March 31, December March 31, December March 2021 31, 2020 31, 31, 2020 2020 2020Non-accrualloans, $ 128,650 $ 109,957 $ 97,649 17.0 31.7 excluding PCDloans^(1)Non-accrual 29,734 32,568 48,950 (8.7 ) (39.3 )PCD loansTotalnon-accrual 158,384 142,525 146,599 11.1 8.0 loans90 days ormore past dueloans, still 5,354 4,395 5,052 21.8 6.0 accruinginterest^(1)Totalnon-performing 163,738 146,920 151,651 11.4 8.0 loans,("NPLs")Accruingtroubled debt 798 813 1,216 (1.8 ) (34.4 )restructurings("TDRs")Foreclosed 13,228 16,671 21,027 (20.7 ) (37.1 )assets^(^2^)Totalnon-performing $ 177,764 $ 164,404 $ 173,894 8.1 2.2 assets("NPAs")30-89 days $ 30,973 $ 40,656 $ 81,127 (23.8 ) (61.8 )past due loansSpecialmention loans^ $ 355,563 $ 409,083 $ 240,826 (13.1 ) 47.6 (^3^)Substandard 342,600 357,219 196,923 (4.1 ) 74.0 loans^(^3^)Totalperformingloansclassified as $ 698,163 $ 766,302 $ 437,749 (8.9 ) 59.5 substandardand specialmention^(^3^)Non-accrualloans to total loans:Non-accrualloans to total 1.04 % 0.97 % 1.05 % loansNon-accrualloans to totalloans, 1.13 % 1.02 % 1.05 % excluding PPPloans^(1)(^4^)Non-accrualloans to totalloans, 0.93 % 0.80 % 0.71 % excluding PCDand PPP loans^(1)(^4^)Non-performingloans to total loans:NPLs to total 1.08 % 1.00 % 1.09 % loansNPLs to totalloans, 1.16 % 1.05 % 1.09 % excluding PPPloans^(1)(^4^)NPLs to totalloans,excluding PCD 0.97 % 0.83 % 0.75 % and PPP loans^(1)(^4^)Non-performing assets to total loans plus foreclosed assets:NPAs to totalloans plus 1.17 % 1.11 % 1.24 % foreclosedassetsNPAs to totalloans plusforeclosed 1.26 % 1.18 % 1.24 % assets,excluding PPPloans^(1)(^4^)NPAs to totalloans plusforeclosedassets, 1.07 % 0.96 % 0.91 % excluding PCDand PPP loans^(1)(^4^)Performing loans classified as substandard and special mention to corporate loans:Performingloansclassified assubstandard 6.45 % 7.26 % 4.15 % and specialmention tocorporateloans^(^3^)Performingloansclassified assubstandardand special 7.19 % 7.84 % 4.15 % mention tocorporateloans,excluding PPPloans^(^3^)

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.(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 1.17% of total loans and foreclosed assets at March 31, 2021 compared to 1.11% and 1.24% at December31, 2020 and March 31, 2020, respectively. Excluding the impact of PCD and PPP loans, NPAs to total loans plus foreclosed assets was 1.07% at March 31, 2021, compared to 0.96% at December 31, 2020 and 0.91% at March 31, 2020, reflective of normal fluctuations that occur on a quarterly basis.

Performing loans classified as substandard and special mention were $698 million for the first quarter of 2021 compared to $766 million and $438 million at December 31, 2020 and March 31, 2020, respectively. The decrease from the fourth quarter of 2020 was due primarily to the payoff of certain corporate credits in addition to upgrade and downgrade activity. The increase from the first quarter of 2020, is a result of the pandemic's impact on certain borrowers primarily focused in elevated risk sectors that the Company has determined require additional monitoring. These loans exhibit potential or well-defined weaknesses but continue to accrue interest because they are well secured, and collection of principal and interest is expected.

Charge-Off Data(Dollar amounts in thousands) Quarters Ended March 31, % of December % of March 31, % of 2021 Total 31, Total 2020 Total 2020Net loancharge-offs^ (1)Commercialand $ 1,740 17.8 $ 3,536 33.6 $ 4,680 38.7 industrialAgricultural 363 3.7 1,779 16.9 1,227 10.1 Commercial real estate:Office,retail, and 4,377 44.9 1,701 16.1 329 2.7 industrialMulti-family (5 ) (0.1 ) 19 0.2 5 ? Construction ? ? 140 1.3 1,808 14.9 Othercommercial 371 3.9 916 8.7 164 1.4 real estateConsumer 2,910 29.8 2,448 23.2 3,901 32.2 Total NCOs $ 9,756 100.0 $ 10,539 100.0 $ 12,114 100.0 Less: NCOson PCD loans (2,107 ) 21.6 (6,488 ) 61.6 (1,720 ) 14.2 ^(2)Total NCOs,excluding $ 7,649 $ 4,051 $ 10,394 PCD loans^(2)Recoveriesincluded $ 1,561 $ 2,588 $ 1,816 aboveNet loancharge-offsto average loans^(1)(^3^)Quarter to 0.26 % 0.29 % 0.37 % dateQuarter todate,excluding 0.28 % 0.31 % 0.37 % PPP loans^(^2^)(^4^)Quarter todate,excluding 0.22 % 0.12 % 0.32 % PCD and PPPloans^(^2^)(^4^)

N/A Not applicable.(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 0.26%, down from 0.29% and 0.37% for the fourth and first quarters of 2020, respectively. Excluding charge-offs on PCD loans and the impact of PPP loans, NCOs to average loans was 0.22% for the first quarter of 2021, compared to 0.12% and 0.32% for the fourth and first quarters of 2020, respectively.

DEPOSIT PORTFOLIO

Deposit Composition(Dollar amounts in thousands) Average for the Quarters Ended March 31, 2021 Percent Change From March 31, December 31, March 31, December March 2021 2020 2020 31, 31, 2020 2020Demand $ 5,917,978 $ 5,753,600 $ 3,884,015 2.9 52.4 depositsSavings 2,573,495 2,436,930 2,069,163 5.6 24.4 depositsNOW 2,802,568 2,774,989 2,273,156 1.0 23.3 accountsMoneymarket 3,008,597 2,923,881 2,227,707 2.9 35.1 accountsCore 14,302,638 13,889,400 10,454,041 3.0 36.8 depositsTime 1,978,986 2,047,260 2,932,466 (3.3 ) (32.5 )depositsTotal $ 16,281,624 $ 15,936,660 $ 13,386,507 2.2 21.6 deposits

Total average deposits were $16.3 billion for the first quarter of 2021, up 2.2% from the fourth quarter of 2020 and 21.6% from the first quarter of 2020. The increase in total average deposits compared to both prior periods was impacted by higher customer balances resulting from PPP funds and other government stimuli. Compared to the fourth quarter of 2020, the increase in total average deposits was partially offset by the normal seasonal decline in commercial and municipal deposits. In addition, the increase in total average deposits compared to the first quarter of 2020 was also driven by deposits assumed in the Park Bank transaction in March 2020.

CAPITAL MANAGEMENT

Capital Ratios As of March December March 31, 31, 31, 2021 2020 2020Company regulatory capital ratios: Total capital to risk-weighted assets 14.26 % 14.14 % 12.00 %Tier 1 capital to risk-weighted assets 11.67 % 11.55 % 9.64 %Common equity Tier 1 ("CET1") to 10.17 % 10.06 % 9.64 %risk-weighted assetsTier 1 capital to average assets 8.96 % 8.91 % 8.60 %Company tangible common equity ratios^(1)(2): Tangible common equity to tangible assets 7.37 % 7.67 % 7.97 %Tangible common equity to tangible assets, 7.79 % 7.98 % 7.97 %excluding PPP loansTangible common equity, excluding accumulatedother comprehensive income ("AOCI"), to 7.48 % 7.54 % 7.79 %tangible assetsTangible common equity, excluding AOCI, to 7.91 % 7.85 % 7.79 %tangible assets, excluding PPP loansTangible common equity to risk-weighted 9.73 % 9.93 % 9.63 %assets

(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.

Regulatory capital ratios increased compared to all prior periods as a result of retained earnings and the mix of risk-weighted assets, partially offset by the approximately 10 basis point impact of stock repurchases. Compared to March 31, 2020 total and Tier 1 capital ratios also benefited from the issuance of preferred stock. 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 March31, 2021.

During the first quarter of 2021, the Company announced that it would restart repurchases of its outstanding shares of common stock under its stock repurchase program after suspending repurchases in March 2020 as it shifted its capital deployment strategy in response to the COVID-19 pandemic. The Company repurchased approximately 715,000 shares of its common stock at a total cost of $14.9 million during the first quarter of 2021.

The Board of Directors approved a quarterly cash dividend of $0.14 per common share during the first quarter of 2021, which is consistent with the fourth and first quarters of 2020. This dividend represents the 153rd consecutive cash dividend paid by the Company since its inception in 1983.

Conference Call

A conference call to discuss the Company's results, outlook, and related matters will be held on Wednesday, April 21, 2021 at 11A.M. (ET). Members of the public who would like to listen to the conference call should dial (877) 507-0639 (U.S. domestic) or (412) 317-6003 (International) and ask for the First Midwest Bancorp, Inc. Earnings Conference Call. The number should be dialed 10 to 15 minutes prior to the start of the conference call. There is no charge to access the call. The conference call will also be accessible as an audio webcast through the Investor Relations section of the Company's website, investor.firstmidwest.com. For those unable to listen to the live broadcast, a replay will be available on the Company's website or by dialing (877) 344-7529 (U.S. domestic) or (412) 317-0088 (International) conference I.D. 10154308 beginning one hour after completion of the live call until 8:00 A.M. (ET) on July 20, 2021. Please direct any questions regarding obtaining access to the conference call to First Midwest Bancorp, Inc. Investor Relations, via e-mail, at investor.relations@firstmidwest.com.

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

This press release, the presentation materials to be discussed during the conference call, 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 press release, as well as any oral statements made by or on behalf of First Midwest, may contain certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. 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," "predict," "project," "probable," "potential," "possible," "target," "continue," "look forward," or "assume" and words of similar import. 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, including the related outlook for 2021, the performance of First Midwest's loan or securities portfolio, the expected amount of future credit allowances or charge-offs, corporate strategies or objectives, including the impact of certain actions and initiatives, anticipated trends in First Midwest's business, regulatory developments, acquisition transactions, estimated synergies, cost savings and financial benefits of completed transactions, growth strategies, including possible future acquisitions, and the continued or potential effects of the pandemic on our 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 pandemic, including the continued effects on our business, operations and employees, as well as on our 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 December31, 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 optimization costs (first quarter 2021 and fourth and third quarter of 2020), acquisition and integration related expenses associated with completed and pending acquisitions (all periods), swap termination costs (fourth and third quarters of 2020), income tax benefits (fourth quarter of 2020), and net securities gains (losses) (third and first quarters 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 Companys 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 January1, 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 $21 billion of assets and an additional $14 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:

Investors MediaPatrick S. Barrett Maurissa KanterEVP, Chief Financial Officer SVP, Director of Corporate Communications(708) 831-7231 (708) 831-7345pat.barrett@firstmidwest.com maurissa.kanter@firstmidwest.com

Accompanying Unaudited Selected Financial Information

First Midwest Bancorp, Inc.Consolidated Statements of Financial Condition (Unaudited)(Dollar amounts in thousands) As of March 31, December 31, September 30, June 30, March 31, 2021 2020 2020 2020 2020Period-End Balance SheetAssets Cash and due from $ 223,713 $ 196,364 $ 254,212 $ 304,445 $ 252,138 banksInterest-bearingdeposits in other 786,814 920,880 936,528 637,856 229,474 banksEquity securities, 96,983 76,404 55,021 43,954 40,098 at fair valueSecuritiesavailable-for-sale, 3,195,405 3,096,408 3,279,884 3,435,862 3,382,865 at fair valueSecuritiesheld-to-maturity, 11,711 12,071 22,193 19,628 19,825 at amortized costFHLB and FRB stock 106,170 117,420 138,120 148,512 154,357 Loans: Commercial and 4,546,317 4,578,254 4,635,571 4,789,556 5,064,295 industrialAgricultural 355,883 364,038 377,466 381,124 393,063 Commercial real estate:Office, retail, and 1,827,116 1,861,768 1,950,406 2,020,318 2,092,097 industrialMulti-family 906,124 872,813 868,293 874,861 918,944 Construction 614,021 612,611 631,607 687,063 661,363 Other commercial 1,463,582 1,481,976 1,452,994 1,475,937 1,415,892 real estatePPP loans 1,109,442 785,563 1,196,538 1,179,403 ? Home equity 690,030 761,725 827,746 892,867 973,658 1-4 family 3,187,066 3,022,413 2,287,555 2,175,322 1,957,037 mortgagesInstallment 483,945 410,071 425,012 457,207 488,668 Total loans 15,183,526 14,751,232 14,653,188 14,933,658 13,965,017 Allowance for loan (235,359 ) (239,017 ) (239,048 ) (240,052 ) (219,948 )lossesNet loans 14,948,167 14,512,215 14,414,140 14,693,606 13,745,069 OREO 6,273 8,253 6,552 9,947 9,814 Premises,furniture, and 129,514 132,045 132,267 143,001 145,844 equipment, netInvestment inbank-owned life 301,365 301,101 300,429 299,649 298,827 insurance ("BOLI")Goodwill and other 928,974 932,764 935,801 940,182 935,241 intangible assetsAccrued interestreceivable and 473,502 532,753 612,996 568,239 539,748 other assetsTotal assets $ 21,208,591 $ 20,838,678 $ 21,088,143 $ 21,244,881 $ 19,753,300 Liabilities andStockholders' EquityNoninterest-bearing $ 6,156,145 $ 5,797,899 $ 5,555,735 $ 5,602,016 $ 4,222,523 depositsInterest-bearing 10,455,309 10,214,565 10,215,838 10,055,640 9,876,427 depositsTotal deposits 16,611,454 16,012,464 15,771,573 15,657,656 14,098,950 Borrowed funds 1,295,737 1,546,414 1,957,180 2,305,195 2,648,210 Senior and 234,973 234,768 234,563 234,358 234,153 subordinated debtAccrued interestpayable and other 413,112 355,026 460,656 391,461 336,280 liabilitiesStockholders' 2,653,315 2,690,006 2,664,171 2,656,211 2,435,707 equityTotal liabilitiesand stockholders' $ 21,208,591 $ 20,838,678 $ 21,088,143 $ 21,244,881 $ 19,753,300 equityStockholders'equity, excluding $ 2,675,411 $ 2,663,627 $ 2,638,422 $ 2,627,484 $ 2,400,384 AOCIStockholders' 2,422,815 2,459,506 2,433,671 2,425,711 2,435,707 equity, common

First Midwest Bancorp, Inc.Condensed Consolidated Statements of Income (Unaudited)(Dollar amounts in thousands) Quarters Ended March 31, December September June 30, March 31, 31, 30, 2021 2020 2020 2020 2020Income StatementInterest $ 151,150 $ 159,962 $ 159,085 $ 162,044 $ 170,227 incomeInterest 10,035 11,851 16,356 16,810 26,652 expenseNet interest 141,115 148,111 142,729 145,234 143,575 incomeProvisionfor loan 6,098 10,507 15,927 32,649 39,532 lossesNet interestincome afterprovision 135,017 137,604 126,802 112,585 104,043 for loanlossesNoninterest IncomeWealthmanagement 14,149 13,548 12,837 11,942 12,361 feesMortgagebanking 10,187 9,191 6,659 3,477 1,788 incomeServicecharges on 9,980 10,811 10,342 9,125 11,781 depositaccountsCard-based 4,556 4,530 4,472 3,180 3,968 fees, netCapitalmarket 2,089 659 886 694 4,722 productsincomeOtherservicecharges, 2,761 2,993 2,823 2,078 2,682 commissions,and feesTotalfee-based 43,722 41,732 38,019 30,496 37,302 revenuesOther income 2,081 3,550 2,523 2,495 3,065 Swaptermination ? (17,567 ) (14,285 ) ? ? costsNetsecurities ? ? 14,328 ? (1,005 )gains(losses)Totalnoninterest 45,803 27,715 40,585 32,991 39,362 incomeNoninterest ExpenseSalaries and employee benefits:Salaries and 53,693 55,950 53,385 52,592 49,990 wagesRetirementand other 12,708 10,430 11,349 11,080 12,869 employeebenefitsTotalsalaries and 66,401 66,380 64,734 63,672 62,859 employeebenefitsNetoccupancyand 14,752 14,002 13,736 15,116 14,227 equipmentexpenseTechnologyand related 10,284 11,005 10,416 9,853 8,548 costsProfessional 8,059 8,424 7,325 8,880 10,390 servicesAdvertisingand 1,835 1,850 2,688 2,810 2,761 promotionsNet OREO 589 106 544 126 420 expenseOther 14,735 12,851 12,374 14,624 12,654 expensesOptimization 1,525 1,493 18,376 ? ? costsAcquisitionandintegration 245 1,860 881 5,249 5,472 relatedexpensesTotalnoninterest 118,425 117,971 131,074 120,330 117,331 expenseIncomebefore 62,395 47,348 36,313 25,246 26,074 income taxexpenseIncome tax 17,372 5,743 8,690 6,182 6,468 expenseNet income $ 45,023 $ 41,605 $ 27,623 $ 19,064 $ 19,606 Preferred (4,034 ) (4,049 ) (4,033 ) (1,037 ) ? dividendsNet incomeapplicableto (486 ) (369 ) (236 ) (187 ) (192 )non-vestedrestrictedsharesNet incomeapplicable $ 40,503 $ 37,187 $ 23,354 $ 17,840 $ 19,414 to commonsharesNet incomeapplicableto common 41,831 49,238 37,765 21,777 24,272 shares,adjusted^(1)

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

First Midwest Bancorp, Inc.Selected Financial Information (Unaudited)(Amounts in thousands, except per share data) As of or for the Quarters Ended March 31, December September June 30, March 31, 31, 30, 2021 2020 2020 2020 2020EPS Basic EPS $ 0.36 $ 0.33 $ 0.21 $ 0.16 $ 0.18 Diluted EPS $ 0.36 $ 0.33 $ 0.21 $ 0.16 $ 0.18 Diluted EPS, $ 0.37 $ 0.43 $ 0.33 $ 0.19 $ 0.22 adjusted^(1)Common Stock and Related Per Common Share DataBook value $ 21.22 $ 21.52 $ 21.29 $ 21.23 $ 21.33 Tangible book $ 13.08 $ 13.36 $ 13.11 $ 13.00 $ 13.14 valueDividendsdeclared per $ 0.14 $ 0.14 $ 0.14 $ 0.14 $ 0.14 shareClosing price at $ 21.91 $ 15.92 $ 10.78 $ 13.35 $ 13.24 period endClosing price to 1.0 0.7 0.5 0.6 0.6 book valuePeriod endshares 114,196 114,296 114,293 114,276 114,213 outstandingPeriod end 11,176 11,071 11,067 11,079 11,136 treasury sharesCommon dividends $ 15,997 $ 16,017 $ 16,011 $ 16,015 $ 16,002 Dividend payout 38.89 % 42.42 % 66.67 % 87.50 % 77.78 %ratioDividend payoutratio, adjusted^ 37.84 % 32.56 % 42.42 % 73.68 % 63.64 %(1)Key Ratios/Data Return onaverage common 6.70 % 6.05 % 3.80 % 2.94 % 3.23 %equity^(2)Return onaverage common 6.92 % 8.01 % 6.15 % 3.58 % 4.04 %equity, adjusted^(1)(2)Return onaverage tangible 11.35 % 10.35 % 6.73 % 5.32 % 5.66 %common equity^(2)Return onaverage tangible 11.71 % 13.53 % 10.53 % 6.37 % 6.94 %common equity,adjusted^(1)(2)Return onaverage assets^ 0.87 % 0.79 % 0.51 % 0.37 % 0.43 %(2)Return onaverage assets, 0.90 % 1.02 % 0.78 % 0.44 % 0.53 %adjusted^(1)(2)Loans to 91.40 % 92.12 % 92.91 % 95.38 % 99.05 %depositsEfficiency ratio 61.77 % 58.90 % 60.36 % 64.08 % 60.21 %^(1)Net interest 3.03 % 3.14 % 2.95 % 3.13 % 3.54 %margin^(2)(3)Yield on averageinterest-earning 3.24 % 3.39 % 3.28 % 3.49 % 4.19 %assets^(2)(3)Cost of funds^ 0.23 % 0.26 % 0.35 % 0.38 % 0.69 %(2)(4)Noninterestexpense to 2.30 % 2.25 % 2.42 % 2.32 % 2.56 %average assets^(2)Noninterestexpense,adjusted to 2.38 % 2.29 % 2.19 % 2.32 % 2.44 %average assets,excluding PPPloans^(1)(2)Effective income 27.84 % 12.13 % 23.93 % 24.49 % 24.81 %tax rateCapital Ratios Total capital torisk-weighted 14.26 % 14.14 % 14.06 % 13.70 % 12.00 %assets^(1)Tier 1 capitalto risk-weighted 11.67 % 11.55 % 11.48 % 11.19 % 9.64 %assets^(1)CET1 torisk-weighted 10.17 % 10.06 % 9.97 % 9.70 % 9.64 %assets^(1)Tier 1 capitalto average 8.96 % 8.91 % 8.50 % 8.70 % 8.60 %assets^(1)Tangible commonequity to 7.37 % 7.67 % 7.43 % 7.32 % 7.97 %tangible assets^(1)Tangible commonequity,excluding AOCI, 7.48 % 7.54 % 7.30 % 7.17 % 7.79 %to tangibleassets^(1)Tangible commonequity to 9.73 % 9.93 % 9.84 % 9.61 % 9.63 %risk-weightedassets^(1)Note: Selected Financial Information footnotes are located at the end of thissection.

First Midwest Bancorp, Inc.Selected Financial Information (Unaudited)(Amounts in thousands, except per share data) As of or for the Quarters Ended March 31, December September June 30, March 31, 31, 30, 2021 2020 2020 2020 2020Asset Quality Performance DataNon-performing assetsCommercial and $ 59,723 $ 38,314 $ 40,781 $ 19,475 $ 24,944 industrialAgricultural 8,684 10,719 13,293 8,494 5,823 Commercial real estate:Office,retail, and 23,339 27,382 26,406 26,342 26,107 industrialMulti-family 3,701 1,670 1,547 2,132 2,688 Construction 1,154 1,155 2,977 18,640 18,764 Othercommercial 15,406 15,219 4,690 5,304 4,562 real estateConsumer 16,643 15,498 13,888 13,657 14,761 Non-accrual,excluding PCD 128,650 109,957 103,582 94,044 97,649 loansNon-accrual 29,734 32,568 39,990 45,116 48,950 PCD loansTotalnon-accrual 158,384 142,525 143,572 139,160 146,599 loans90 days ormore past dueloans, still 5,354 4,395 3,781 3,241 5,052 accruinginterestTotal NPLs 163,738 146,920 147,353 142,401 151,651 Accruing TDRs 798 813 841 1,201 1,216 Foreclosed 13,228 16,671 15,299 19,024 21,027 assets^(5)Total NPAs $ 177,764 $ 164,404 $ 163,493 $ 162,626 $ 173,894 30-89 days $ 30,973 $ 40,656 $ 21,551 $ 36,342 $ 81,127 past due loansAllowance for credit lossesAllowance for $ 235,359 $ 239,017 $ 239,048 $ 240,052 $ 219,948 loan lossesAllowance forunfunded 8,025 8,025 7,825 7,625 6,753 commitmentsTotal ACL $ 243,384 $ 247,042 $ 246,873 $ 247,677 $ 226,701 Provision for $ 6,098 $ 10,507 $ 15,927 $ 32,649 $ 39,532 loan lossesNetcharge-offs by categoryCommercial and $ 1,740 $ 3,536 $ 5,470 $ 4,735 $ 4,680 industrialAgricultural 363 1,779 265 118 1,227 Commercial real estate:Office,retail, and 4,377 1,701 1,339 3,086 329 industrialMulti-family (5 ) 19 ? 9 5 Construction ? 140 4,889 798 1,808 Othercommercial 371 916 1,753 19 164 real estateConsumer 2,910 2,448 2,027 4,158 3,901 Total NCOs $ 9,756 $ 10,539 $ 15,743 $ 12,923 $ 12,114 Less: NCOs on (2,107 ) (6,488 ) (6,923 ) (3,833 ) (1,720 )PCD loansTotal NCOs,excluding PCD $ 7,649 $ 4,051 $ 8,820 $ 9,090 $ 10,394 loansTotalrecoveries $ 1,561 $ 2,588 $ 1,795 $ 1,311 $ 1,816 included aboveNote: Selected Financial Information footnotes are located at the end of thissection.

First Midwest Bancorp, Inc.Selected Financial Information (Unaudited) As of or for the Quarters Ended March 31, December 31, September June 30, March 31, 30, 2021 2020 2020 2020 2020Performing loansclassified as substandard and specialmentionSpecialmention $ 355,563 $ 409,083 $ 395,295 $ 256,373 $ 240,826 loans^(^7^)Substandard 342,600 357,219 311,430 193,337 196,923 loans^(^7^)Totalperformingloansclassifiedas $ 698,163 $ 766,302 $ 706,725 $ 449,710 $ 437,749 substandardand specialmention^(^7^)Assetquality ratiosNon-accrualloans to 1.04 % 0.97 % 0.98 % 0.93 % 1.05 %total loansNon-accrualloans tototalloans, 1.13 % 1.02 % 1.07 % 1.01 % 1.05 %excludingPPP loans^(6)Non-accrualloans tototalloans, 0.93 % 0.80 % 0.78 % 0.70 % 0.71 %excludingPCD and PPPloans^(6)NPLs to 1.08 % 1.00 % 1.01 % 0.95 % 1.09 %total loansNPLs tototalloans, 1.16 % 1.05 % 1.10 % 1.04 % 1.09 %excludingPPP loans^(6)NPLs tototalloans, 0.97 % 0.83 % 0.81 % 0.72 % 0.75 %excludingPCD and PPPloans^(6)NPAs tototal loansplus 1.17 % 1.11 % 1.11 % 1.09 % 1.24 %foreclosedassetsNPAs tototal loansplusforeclosed 1.26 % 1.18 % 1.21 % 1.18 % 1.24 %assets,excludingPPP loans^(6)NPAs tototal loansplusforeclosed 1.07 % 0.96 % 0.93 % 0.87 % 0.91 %assets,excludingPCD and PPPloans^(6)NPAs totangiblecommon 10.23 % 9.27 % 9.37 % 9.38 % 10.07 %equity plusACLNon-accrualloans to 0.75 % 0.68 % 0.68 % 0.66 % 0.74 %totalassetsPerformingloansclassifiedassubstandard 6.45 % 7.26 % 6.36 % 3.94 % 4.15 %and specialmention tocorporateloans^(^6)(^7^)Performingloansclassifiedassubstandardand special 7.19 % 7.84 % 7.13 % 4.40 % 4.15 %mention tocorporateloans,excludingPPP loans^(^6)(^7^)Allowance for credit losses and net charge-off ratiosACL to 1.60 % 1.67 % 1.68 % 1.66 % 1.62 %total loansACL tonon-accrual 153.67 % 173.33 % 171.95 % 177.98 % 154.64 %loansACL to NPLs 148.64 % 168.15 % 167.54 % 173.93 % 149.49 %NCOs toaverage 0.26 % 0.29 % 0.42 % 0.36 % 0.37 %loans^(2)NCOs toaverageloans, 0.28 % 0.31 % 0.46 % 0.38 % 0.37 %excludingPPP loans^(2)NCOs toaverageloans, 0.22 % 0.12 % 0.26 % 0.27 % 0.32 %excludingPCD and PPPloans^(2)

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.

First Midwest Bancorp, Inc.Non-GAAP Reconciliations (Unaudited)(Amounts in thousands, except per share data) Quarters Ended March 31, December September June 30, March 31, 31, 30, 2021 2020 2020 2020 2020EPS Net income $ 45,023 $ 41,605 $ 27,623 $ 19,064 $ 19,606 Dividends andaccretion on (4,034 ) (4,049 ) (4,033 ) (1,037 ) ? preferred stockNet incomeapplicable tonon-vested (486 ) (369 ) (236 ) (187 ) (192 )restrictedsharesNet incomeapplicable to 40,503 37,187 23,354 17,840 19,414 common sharesAdjustments to net income:Optimization 1,525 1,493 18,376 ? ? costsTax effect ofoptimization (381 ) (373 ) (4,594 ) ? ? costsAcquisition andintegration 245 1,860 881 5,249 5,472 related expensesTax effect ofacquisition and (61 ) (465 ) (220 ) (1,312 ) (1,368 )integrationrelated expensesSwap termination ? 17,567 14,285 ? ? costsTax effect ofswap termination ? (4,392 ) (3,571 ) ? ? costsIncome tax ? (3,639 ) ? ? ? benefitsNet securities ? ? (14,328 ) ? 1,005 (gains) lossesTax effect ofnet securities ? ? 3,582 ? (251 )(gains) lossesTotaladjustments to 1,328 12,051 14,411 3,937 4,858 net income, netof taxNet incomeapplicable to $ 41,831 $ 49,238 $ 37,765 $ 21,777 $ 24,272 common shares,adjusted^(1)Weighted-average common shares outstanding:Weighted-averagecommon shares 113,098 113,174 113,160 113,145 109,922 outstanding(basic)Dilutive effectof common stock 773 430 276 191 443 equivalentsWeighted-averagediluted common 113,871 113,604 113,436 113,336 110,365 sharesoutstandingBasic EPS $ 0.36 $ 0.33 $ 0.21 $ 0.16 $ 0.18 Diluted EPS $ 0.36 $ 0.33 $ 0.21 $ 0.16 $ 0.18 Diluted EPS, $ 0.37 $ 0.43 $ 0.33 $ 0.19 $ 0.22 adjusted^(1)Anti-dilutiveshares notincluded in the ? ? ? ? ? computation ofdiluted EPSDividend Payout RatioDividendsdeclared per $ 0.14 $ 0.14 $ 0.14 $ 0.14 $ 0.14 shareDividend payout 38.89 % 42.42 % 66.67 % 87.50 % 77.78 %ratioDividend payoutratio, adjusted^ 37.84 % 32.56 % 42.42 % 73.68 % 63.64 %(1) Note: Non-GAAP Reconciliations footnotes are located at the end of thissection.

First Midwest Bancorp, Inc.Non-GAAP Reconciliations (Unaudited)(Amounts in thousands, except per share data) As of or for the Quarters Ended March 31, December 31, September 30, June 30, March 31, 2021 2020 2020 2020 2020Return on Average Common and Tangible Common EquityNet incomeapplicable to $ 40,503 $ 37,187 $ 23,354 $ 17,840 $ 19,414 common sharesIntangibles 2,807 2,807 2,810 2,820 2,770 amortizationTax effect ofintangibles (702 ) (702 ) (703 ) (705 ) (693 )amortizationNet incomeapplicable tocommonshares, 42,608 39,292 25,461 19,955 21,491 excludingintangiblesamortizationTotaladjustmentsto net 1,328 12,051 14,411 3,937 4,858 income, netof tax^(1)Net incomeapplicable tocommon $ 43,936 $ 51,343 $ 39,872 $ 23,892 $ 26,349 shares,adjusted^(1)Averagestockholders' $ 2,453,253 $ 2,444,911 $ 2,444,594 $ 2,443,212 $ 2,415,157 common equityLess: averageintangible (931,322 ) (934,347 ) (938,712 ) (934,022 ) (887,600 )assetsAveragetangible $ 1,521,931 $ 1,510,564 $ 1,505,882 $ 1,509,190 $ 1,527,557 common equityReturn onaverage 6.70 % 6.05 % 3.80 % 2.94 % 3.23 %common equity^(2)Return onaveragecommon 6.92 % 8.01 % 6.15 % 3.58 % 4.04 %equity,adjusted^(1)(2)Return onaveragetangible 11.35 % 10.35 % 6.73 % 5.32 % 5.66 %common equity^(2)Return onaveragetangiblecommon 11.71 % 13.53 % 10.53 % 6.37 % 6.94 %equity,adjusted^(1)(2)Return on Average Assets Net income $ 45,023 $ 41,605 $ 27,623 $ 19,064 $ 19,606 Totaladjustmentsto net 1,328 12,051 14,411 3,937 4,858 income, netof tax^(1)Net income, $ 46,351 $ 53,656 $ 42,034 $ 23,001 $ 24,464 adjusted^(1)Average $ 20,919,040 $ 20,882,325 $ 21,526,695 $ 20,868,106 $ 18,404,821 assetsReturn onaverage 0.87 % 0.79 % 0.51 % 0.37 % 0.43 %assets^(2)Return onaverageassets, 0.90 % 1.02 % 0.78 % 0.44 % 0.53 %adjusted^(1)(2)Noninterest Expense to Average Assets Noninterest $ 118,425 $ 117,971 $ 131,074 $ 120,330 $ 117,331 expenseLess: Optimization (1,525 ) (1,493 ) (18,376 ) ? ? costsAcquisitionandintegration (245 ) (1,860 ) (881 ) (5,249 ) (5,472 )relatedexpensesTotal $ 116,655 $ 114,618 $ 111,817 $ 115,081 $ 111,859 Average $ 20,919,040 $ 20,882,325 $ 21,526,695 $ 20,868,106 $ 18,404,821 assetsLess: average (1,014,798 ) (1,013,511 ) (1,194,808 ) (887,977 ) ? PPP loansAverageassets, $ 19,904,242 $ 19,868,814 $ 20,331,887 $ 19,980,129 $ 18,404,821 excluding PPPloansNoninterestexpense to 2.30 % 2.25 % 2.42 % 2.32 % 2.56 %averageassets^(2)Noninterestexpense,adjusted toaverage 2.38 % 2.29 % 2.19 % 2.32 % 2.44 %assets,excluding PPPloans^(2) Note: Non-GAAP Reconciliations footnotes are located at the end of thissection.

First Midwest Bancorp, Inc.Non-GAAP Reconciliations (Unaudited)(Amounts in thousands, except per share data) As of or for the Quarters Ended March 31, December September June 30, March 31, 31, 30, 2021 2020 2020 2020 2020 Efficiency Ratio CalculationNoninterest $ 118,425 $ 117,971 $ 131,074 $ 120,330 $ 117,331 expenseLess: Optimization (1,525 ) (1,493 ) (18,376 ) ? ? costsAcquisitionandintegration (245 ) (1,860 ) (881 ) (5,249 ) (5,472 )relatedexpensesNet OREO (589 ) (106 ) (544 ) (126 ) (420 )expenseTotal $ 116,066 $ 114,512 $ 111,273 $ 114,955 $ 111,439 Tax-equivalentnet interest $ 142,098 $ 149,141 $ 143,821 $ 146,389 $ 144,728 income^(3)Noninterest 45,803 27,715 40,585 32,991 39,362 incomeLess: Swaptermination ? 17,567 14,285 ? ? costsNet securities ? ? (14,328 ) ? 1,005 (gains) lossesTotal $ 187,901 $ 194,423 $ 184,363 $ 179,380 $ 185,095 Efficiency 61.77 % 58.90 % 60.36 % 64.08 % 60.21 %ratioPre-Tax, Pre-Provision EarningsNet Income $ 45,023 $ 41,605 $ 27,623 $ 19,064 $ 19,606 Income tax 17,372 5,743 8,690 6,182 6,468 expenseProvision for 6,098 10,507 15,927 32,649 39,532 credit lossesPre-Tax,Pre-Provision $ 68,493 $ 57,855 $ 52,240 $ 57,895 $ 65,606 EarningsAdjustments topre-tax, pre-provisionearnings:Optimization $ 1,525 $ 1,493 $ 18,376 $ ? $ ? costsAcquisitionandintegration 245 1,860 881 5,249 5,472 relatedexpensesSwaptermination ? 17,567 14,285 ? ? costsNet securities ? ? (14,328 ) ? 1,005 (gains) lossesTotal 1,770 20,920 19,214 5,249 6,477 adjustmentsPre-Tax,Pre-Provision $ 70,263 $ 78,775 $ 71,454 $ 63,144 $ 72,083 Earnings,adjusted Note: Non-GAAP Reconciliations footnotes are located at the end of thissection.

First Midwest Bancorp, Inc.Non-GAAP Reconciliations (Unaudited)(Amounts in thousands, except per share data) As of or for the Quarters Ended March 31, December 31, September 30, June 30, March 31, 2021 2020 2020 2020 2020Tangible Common EquityStockholders'equity, $ 2,422,815 $ 2,459,506 $ 2,433,671 $ 2,425,711 $ 2,435,707 commonLess:goodwill andother (928,974 ) (932,764 ) (935,801 ) (940,182 ) (935,241 )intangibleassetsTangible 1,493,841 1,526,742 1,497,870 1,485,529 1,500,466 common equityLess: AOCI 22,096 (26,379 ) (25,749 ) (28,727 ) (35,323 )Tangiblecommonequity, $ 1,515,937 $ 1,500,363 $ 1,472,121 $ 1,456,802 $ 1,465,143 excludingAOCITotal assets $ 21,208,591 $ 20,838,678 $ 21,088,143 $ 21,244,881 $ 19,753,300 Less:goodwill andother (928,974 ) (932,764 ) (935,801 ) (940,182 ) (935,241 )intangibleassetsTangible 20,279,617 19,905,914 20,152,342 20,304,699 18,818,059 assetsLess: PPP (1,109,442 ) (785,563 ) (1,196,538 ) (1,179,403 ) ? loansTangibleassets, $ 19,170,175 $ 19,120,351 $ 18,955,804 $ 19,125,296 $ 18,818,059 excluding PPPloansTangiblecommon equity 7.37 % 7.67 % 7.43 % 7.32 % 7.97 %to tangibleassetsTangiblecommon equityto tangible 7.79 % 7.98 % 7.90 % 7.77 % 7.97 %assets,excluding PPPloansTangiblecommonequity,excluding 7.48 % 7.54 % 7.30 % 7.17 % 7.79 %AOCI, totangibleassetsTangiblecommonequity,excludingAOCI, to 7.91 % 7.85 % 7.77 % 7.62 % 7.79 %tangibleassets,excluding PPPloansTangiblecommon equityto 9.73 % 9.93 % 9.84 % 9.61 % 9.63 %risk-weightedassets

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%.