Investor Relations

Dear Shareholder:

We are pleased to report another good year in 2022. While we were not able to top our record breaking 2021, it was a solid year and we were able to replace most of the income from the one-time PPP loan fees. This is attributable to our much larger balance sheet and a slight improvement in margin. The rapid increase in interest rates has been difficult for all financial institutions to manage, including us, and we expect more pressure on our margins in 2023.

During the fourth quarter we recorded earnings of $1,409,068, compared to $1,526,124 last quarter and $1,489,740 for the fourth quarter of 2021. Earnings per share were $1.06 for the period versus $1.15 for last quarter and $1.12 for the same quarter last year. Year- to-date earnings are $5,346,494 versus $5,844,450 for 2021. Earnings per share were at $4.02, versus $4.40 a year ago.

Year-to-date the bank had a ROA of 0.93%, compared to our local peer group of 0.98%. Our net interest margin (NIM) was at 3.06% versus, 3.27% for our peers. Our Leverage (Capital) Ratio was at 9.21%, versus 10.03% for the group.

Average loans were up for the quarter and stood at $341.6 million, versus $331.2 million for the prior quarter and $332.3 for the same period last year. We had an excellent quarter for loan growth, which will also have a positive impact as we begin the new year.

Investments were down significantly with an average of $230.1 million, versus $247.5 million for the prior quarter and $251.2 million last year. The decrease is primarily due to the unrealized loss on the portfolio. We continue our strategy to use the future cashflows from our portfolio to fund loan growth if possible.

Average deposits were up at $534.0 million, compared to $518.4 million last quarter and $505.7 million for the same period last year. Deposit balances remain high and while we do expect some roll-off, our retail staff is working hard to retain a high percentage. The high competition for deposits will lead to higher funding costs.

Credit quality remains strong and our metrics are now in line with our goals. Non-accrual Loans to Loans were at 0.36%, and below peer of 0.55%. Charge-offs to Loans were at 0.09% for the quarter, versus peer of 0.02%. Loan loss reserve balance was at 1.17% of total loans, compared with our peers at 1.32%.

The most recent stock transaction was a block of 3,500 shares that traded at $37.50 per share. If you have an interest in selling or buying, please contact Brooke Robinson (309- 457-6284 / brooke.robinson@mbwi.com) or Chris (309-457-6227 / cgavin@mbwi.com) with the number of shares and the selling or offering price.

Please save the date for our annual shareholder meeting and reception on April 26th in Monmouth. We look forward to interacting with all of you and sharing what's on the horizon for 2023. Invitations, including additional details and proxies, will be sent out early April. We hope to see many of you there!

Best Regards,
Chris Gavin & Gus Hart