Foresight Financial Group Inc. : Foresight Reports 2012 Operating Results

fG FORESiGHT

NEWS RELEASE financial group, inc.

FORESIGHT FINANCIAL GROUP,lNC.

3 l 06 N. Rockton Ave. Rockford, Illinois 61103

FOR I MMEDIATE RELEASE: January 1 8,201 3
FOR INFORMATION,

CONTACT: Stephen Gaddis President & CEO [phone]

or Brent Myers
Executi ve V ice President
(81 5) 865-5 1 25

FORESIGHT REPORTS OPERATING RESULTS FOR 2012

Foresight Financial Group, !ne., a mu lti-bank holding company with twelve banking offices in Winnebago and Stephenson counties, reported that for the fourth quarter of 2012, net income decl ined to $240,000 from $1 ,289,000 in 20 Il , as over $4 million was expensed for possible future credi t losses in the quarter. Net income for the ful l year of 2012 of $3,446,000 was down 47.5% from $6,568,000 earned in 20 Il. Basic earnings per common share declined to $.60 from $1.53, retlective of the drop in income and the ea rl y redemption ($.07/share) ofTARP securities in full from the U. S. Treasury. Profitability for the year of2012 was about half of internai goals, impacted by continued elevated credit related costs, with over $14 mi lli on pre-tax expensed for the full year, as actual liquidation va lues realized on sales of foreclosed rea! estate collateral were less than previous estimates.

For the year 2012, net interest income decreased 1.4%, whi le operating overhead expense excl uding foreclosed rea! estate costs increased by 3.8%. Non-interest income increased 7.8%, as mortgage ba nk ing revenues reached a record leve!, due to the volume of refinancing activity fostered by the record low mortgage rates during the year, and the expansion of the company's mortgage operation through a merger with Vision Mortgage Group of Rockford in the fourth quarter. The compan y raised $1 O million from local investors from the sale of subordinated capitai debentures, which was used a long with $5.8 million of company cash to fully redeem the TARP securiti es in December.
Foresight President Stephen Gaddis stated: "Th e year of 2012 was very eventful, and strategically important in many ways for future operating performance. Net income contin ued to be challenged by the troubl ed real estate en vironment. Despite the distressed rea l estate market conditions during 201 2, we were pleased that the company redeemed its TARP securities in full, and maintained its strong capitai position, along with over $4 million in cash reser ves. We a re hopeful that the non-performing assets leve!, which decli ned by 15% from $19.9 million to $1 7.0 million in 2012, wi ll decline further i n 2013 as the economy begins to improve. The company's total risk based capitai ratio continues to remain about 40% above the regulatory standard of l 0% for well capitalized institutions."
Foresight's customer base growth for 2012 was modest, and retlective of l oca l economie conditions, wi th total assets of $882 million, total deposits of $761 mi llion, and total loans of $617 million each within $5 mil l ion of the previous year end total respectivel y.. Foresight Financial Group continues to hol d the largest market share of deposits of any financial institution operating in Stephenson County.

Foresight's community banks include, State Bank, Freeport, State Bank of Davis, German-American State Bank, Germa n Valley, Northwest Bank of Rockford, and Lena State Bank. Foresight's common stock is listed on the OTC Bulletin Board under the trading symbol FGFH. Closing price for the common stock was $1 2.25 per share at the close of business on January 17, 2013.

CORPORATE OFFICES:

3106 X Rockton At·e.

Rorlford, !L 61103-2839

Phone: [phone]

Fax: [phone]