MSBIP

• 2022 was a successful year with record earnings, ROA 1.31% up from 1.18% in 2021 and ROTE 20.8% up from 17.9% in 2021.
• Fourth quarter net income $29.7 million, core earnings adjusted pre-tax pre-provision earnings $33.2 million.
• Loan growth with commercial portfolio and Equipment Finance over $1.1 billion, growth in Eastern Illinois and St. Louis loan portfolios.
• Wealth Management assets under administration increased, non-interest income included swap gain.
• Focus on disciplined expense management,推进BaaS平台, exit GreenSky partnership, strong commercial banking team, investment in wealth management.

• Difficult to forecast loan growth but commercial and equipment business to offset GreenSky exit.
• GreenSky balances could come down $100 million - $300 million this year.
• Wealth management revenue expected to grow.
• Focus on keeping expense growth below revenue growth.
• Credit quality expected to remain good.
• Open to strategic M&A opportunities.

For the fourth quarter, total loans increased to $108 million from the prior quarter, with most growth in commercial and construction portfolios, Equipment Finance contributing to commercial loan growth surpassing $1.1 billion. Total deposits had a small decrease due to declines in non-interest bearing and savings deposits. Net interest income was slightly down as net interest margin decreased 13 basis points. Assets under administration in Wealth Management increased by $150 million. Non-interest income was $33.8 million including $17.5 million gain from termination of forward-starting interest rate swaps. Non-interest expense was up due to MSR loss and other real estate impairment. Non-performing loans increased but net charge-offs were 3 basis points of average loans, provision for credit losses was $3 million.

• Economic recession impact on loan growth and asset quality.
• Uncertainty in GreenSky partnership exit.
• Risk in BaaS platform partnerships.
• Deposit cost increase risk.
• Interest rate change impact on net interest margin.
• Uncertainty in MSR sale.

Q: Regarding loan growth and GreenSky, A: GreenSky balances could come down $100 - $300 million this year with commercial and equipment business offsetting.

Q: Fee income outlook, A: Wealth management revenue expected to grow offsetting MSR sale impact.

Q: Margin outlook, A: Near-term margin pressure but stable later with Fed rate moves.

Q: Loan loss provision, A: Expect more provision than current quarter but not dramatic.

Q: BaaS partnerships, A: Focus on deposit-driven partnerships, slow and right approach.

Q:存贷比, A: Loan-to-deposit ratio near 100%, aiming for closer to 90%.

Q: Tax rate, A: Tax rate likely stable as in fourth quarter.