FMBI First Midwest Bancorp, Inc. (Illinois)

Management Discussion

• Net income for 2018 was $157.9 million, or $1.52 per share, compared to net income of $98.4 million, or $0.96 per share, for 2017. Performance for 2018 was impacted by Delivering Excellence implementation costs and income tax benefits. Both 2018 and 2017 were impacted by acquisition and integration related expenses associated with completed and pending acquisitions. In addition, performance for 2017 was impacted by various actions taken by the Company in light of tax reform which include the revaluation of DTAs, certain actions resulting in securities losses and gains, a special bonus to colleagues, and a charitable contribution to the First Midwest Charitable Foundation. Excluding these adjustments, earnings per share was $1.67 for 2018 and $1.35 for 2017. For additional detail on these adjustments, see the section of this Item 7 titled "Non-GAAP Financial Information and Reconciliations." The increase in net income, adjusted, and earnings per share, adjusted, compared to 2017 reflects higher net interest income, controlled noninterest expense, and a lower effective income tax rate, partially offset by higher provision for loan losses and lower noninterest income.