ITASCA, IL--(Marketwired - Jan 21, 2014) - Today, First Midwest Bancorp, Inc. (the "Company" or "First Midwest") (NASDAQ: FMBI), the holding company of First Midwest Bank (the "Bank"), reported results of operations and financial condition for the fourth quarter of 2013. Net income applicable to common shares for the fourth quarter of 2013 was $18.9 million, or $0.26 per share, compared to net income applicable to common shares of $28.9 million, or $0.39 per share, for the third quarter of 2013 and $13.0 million, or $0.18 per share, for the fourth quarter of 2012.

For the full year of 2013, the Company reported net income applicable to common shares of $78.2 million, or $1.06 per share, compared to a net loss applicable to common shares of $20.7 million, or $0.28 per share, for the year ended December 31, 2012.

"First Midwest had a strong 2013, evidenced by significantly improved earnings, robust loan and fee growth as well as a dramatically enhanced credit profile," said Michael L. Scudder, President and Chief Executive Officer of First Midwest Bancorp, Inc. "Our lending and fee-based businesses performed extremely well throughout the year. Targeted investment in these businesses helped diversify our revenues and, when combined with substantially lower credit costs and tight expense control, offset the challenges of a difficult rate environment."

Mr. Scudder went on to say, "Loans outstanding increased by 8% over 2012, led by double digit growth in both commercial and agricultural lending. Notably, our fee-based revenues grew by some 10% on the strength of wealth management, mortgage, and commercial sales performance. As we closed 2013, both our agricultural lending and trust platforms now rank among the largest of Illinois-based financial institutions."

Mr. Scudder concluded, "Our business momentum remains solid and, when combined with our strong capital foundation and an improving economic outlook, leaves us well placed to grow and enhance shareholder value."

SELECT HIGHLIGHTS

Business Momentum

• Increased earnings per share by 44% compared to the fourth quarter of 2012 and almost 500% compared to the year ended December 31, 2012.
  
  
• Grew total loans, excluding covered loans, by 10% annualized from September 30, 2013 and 8% from December 31, 2012.
  
  
• Maintained noninterest expense consistent with the third quarter and decreased by 12% from the fourth quarter of 2012.
  
  
• Maintained net interest margin of 3.62% achieved in the third quarter.
  
  
• Increased dividends per share to $0.07, up 75% from the third quarter and 600% from the fourth quarter of 2012.
  
  

Improving Credit and Strengthening Capital

• Recorded 21% lower net loan charge-offs, excluding net covered loan charge-offs, compared to the third quarter, representing one of the lowest levels in over five years.
  
  
• Decreased non-performing loans by $10 million, or 14%, from September 30, 2013 and $30 million, or 32%, from December 31, 2012.
  
  
• Reduced performing potential problem loans by $31 million, or 17%, from September 30, 2013 and $63 million, or 29%, from December 31, 2012.
  
  
• Grew Tier 1 common capital to risk-weighted assets to 10.37%, a 14 basis point improvement from September 30, 2013 and 104 basis point improvement from December 31, 2012.
  
  
• Retired $23.3 million of 6.95% junior subordinated debentures at a premium of 4%, resulting in a pre-tax loss of $1.0 million, while lowering future annual interest expense by nearly $2 million.
  
  

OPERATING PERFORMANCE

Pre-Tax, Pre-Provision Operating Earnings (1)
(Dollar amounts in thousands)
			Quarters Ended												Years Ended
			December 31, 2013				September 30, 2013				December 31, 2012				December 31, 2013				December 31, 2012
Income (loss) before income tax expense			$	28,673			$	54,282			$	19,410			$	128,021			$	(49,936	)
Provision for loan and covered loan losses				-				4,770				5,593				16,257				158,052
	Pre-tax, pre-provision earnings			28,673				59,052				25,003				144,278				108,116
Adjustments to Pre-Tax, Pre-Provision Earnings
Net securities (gains) losses				(147	)			(33,801	)			(88	)			(34,164	)			921
Net losses on sales and valuation adjustments of OREO, excess properties, asset held-for sale, and other				1,763				1,652				1,864				3,908				7,974
Losses on early extinguishment of debt				1,034				-				814				1,034				558
Severance-related costs				483				233				-				2,207				1,155
BOLI modification loss				-				13,312				-				13,312				-
Gain on termination of FHLB forward commitments				-				(7,829	)			-				(7,829	)			-
Gain, less related expenses, on bulk loan sales				-				-				(2,639	)			-				(2,639	)
Adjusted amortization of FDIC indemnification asset				-				-				2,705				1,500				6,705
Gains on acquisitions, net of integration costs				-				-				588				-				(2,486	)
	Total adjustments			3,133				(26,433	)			3,244				(20,032	)			12,188
	Pre-tax, pre-provision operating earnings		$	31,806			$	32,619			$	28,247			$	124,246			$	120,304

(1)	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 provided this non-GAAP performance result, which the Company believes is useful because it assists investors in assessing the Company's operating performance. This non-GAAP financial measure should not be considered an alternative to GAAP.

Pre-tax, pre-provision operating earnings of $31.8 million for the fourth quarter of 2013 decreased 2.5% from the third quarter of 2013 driven mainly by comparatively lower fee-based revenues. Compared to the fourth quarter of 2012, pre-tax, pre-provision operating earnings increased $3.6 million, or 12.6%, resulting primarily from lower noninterest expense, which was partially offset by a decrease in net interest income and noninterest income.

For the full year of 2013, pre-tax, pre-provision operating earnings rose $3.9 million compared to 2012 as a result of higher levels of wealth management fees, gains on mortgage loan sales, and fees from sales of capital market products to commercial clients, which more than offset a decrease in net interest income.

Further discussion of net interest income and noninterest income and expense is presented in later sections of this release.

Net Interest Income and Margin Analysis
(Dollar amounts in thousands)
			Quarters Ended
			December 31, 2013									September 30, 2013									December 31, 2012
			Average Balance				Interest Earned/ Paid			Yield/ Rate (%)		Average Balance				Interest Earned/ Paid			Yield/ Rate (%)		Average Balance				Interest Earned/ Paid			Yield/ Rate (%)
Assets:
Other interest-earning assets			$	610,792			$	448		0.29		$	661,779			$	469		0.28		$	562,288			$	345		0.24
Trading securities				16,569				72		1.74			15,543				29		0.75			15,597				94		2.41
Investment securities (1)				1,211,868				10,582		3.49			1,250,158				10,199		3.26			1,144,997				10,154		3.55
Federal Home Loan Bank and Federal Reserve Bank stock				35,161				332		3.78			35,162				333		3.79			47,232				349		2.96
Loans (1)(2)				5,675,293				63,728		4.45			5,559,932				64,326		4.59			5,463,355				66,490		4.84
	Total interest-earning assets (1)			7,549,683				75,162		3.95			7,522,574				75,356		3.98			7,233,469				77,432		4.26
Cash and due from banks				123,128									127,847									122,328
Allowance for loan and covered loan losses				(91,860	)								(93,940	)								(103,302	)
Other assets				793,359									847,304									886,748
Total assets			$	8,374,310								$	8,403,785								$	8,139,243
Liabilities and Stockholders' Equity:
Interest-bearing transaction deposits			$	3,678,591				788		0.08		$	3,647,159				765		0.08		$	3,468,397				903		0.10
Time deposits				1,234,517				1,953		0.63			1,288,746				2,072		0.64			1,447,918				2,832		0.78
Borrowed funds				213,761				390		0.72			203,613				390		0.76			185,390				497		1.07
Senior and subordinated debt				207,162				3,301		6.32			214,860				3,436		6.34			214,764				3,445		6.38
Total interest-bearing liabilities				5,334,031				6,432		0.48			5,354,378				6,663		0.49			5,316,469				7,677		0.57
Demand deposits				1,956,570									1,975,797									1,808,522
Total funding sources				7,290,601									7,330,175									7,124,991
Other liabilities				87,250									90,154									73,077
Stockholders' equity - common				996,459									983,456									941,175
	Total liabilities and stockholders' equity		$	8,374,310								$	8,403,785								$	8,139,243
Net interest income/margin (1)							$	68,730		3.62						$	68,693		3.63						$	69,755		3.84

(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 35%. This non-GAAP financial measure assists management in comparing revenue from both taxable and tax-exempt sources. The corresponding income tax impact related to tax-exempt items is recorded within income tax expense. These adjustments have no impact on net income.
(2)	This item includes covered interest-earning assets consisting of loans acquired through the Company's Federal Deposit Insurance Corporation ("FDIC")-assisted transactions subject to loss sharing agreements and the related FDIC indemnification asset.

For the fourth quarter of 2013, average interest-earning assets rose $27.1 million from the third quarter of 2013 driven by growth in the loan portfolio, which was funded through other interest-earning assets and cash flows from maturing investment securities. Compared to December 31, 2012, average interest-earning assets grew $316.2 million from an increase in loans, investment securities, and other interest-earning assets.

Average funding sources for the fourth quarter of 2013 were $39.6 million lower than the third quarter of 2013 and $165.6 million higher than the fourth quarter of 2012. A reduction in time deposits and seasonal declines in public fund deposits, partially offset by higher levels of interest-bearing transaction deposits, accounted for the decrease in average funding sources from the third quarter of 2013. Compared to the fourth quarter of 2012, a 6.8% increase in average demand and interest-bearing transaction deposits more than offset lower levels of time deposits.

Tax-equivalent net interest margin for the current quarter was 3.62%, remaining stable compared to the third quarter of 2013 and declining 22 basis points compared to the fourth quarter of 2012. Loan yields declined on new and renewing loans compared to both prior periods presented as a result of greater customer preference for floating rate loans given the current low interest rate environment. The decrease in the loan yield during the fourth quarter was mitigated by a higher rate earned on certain investment securities. Additionally, an improved funding mix and lower rates paid on time deposits offset the decline in the loan yield compared to both prior periods presented.

Noninterest Income Analysis
(Dollar amounts in thousands)
			Quarters Ended												December 31, 2013 Percent Change From
			December 31, 2013				September 30, 2013				December 31, 2012				September 30, 2013			December 31, 2012
Service charges on deposit accounts			$	9,259			$	9,472			$	9,689			(2.2	)		(4.4	)
Card-based fees				5,517				5,509				5,274			0.1			4.6
Wealth management fees				6,202				6,018				5,590			3.1			10.9
Mortgage banking income				1,055				1,273				2,329			(17.1	)		(54.7	)
Merchant servicing fees				2,585				2,915				2,727			(11.3	)		(5.2	)
Other service charges, commissions, and fees				2,094				2,617				1,121			(20.0	)		86.8
	Total fee-based revenues			26,712				27,804				26,730			(3.9	)		(0.1	)
Net securities gains				147				33,801				88			(99.6	)		67.0
BOLI income (loss)				584				(13,028	)			355			N/M			64.5
Net trading gains (1)				1,057				882				116			19.8			N/M
Losses on early extinguishment of debt				(1,034	)			-				(814	)		N/M			27.0
Other income				313				800				460			(60.9	)		(32.0	)
Gain on termination of FHLB forward commitments				-				7,829				-			N/M			-
Gain on bulk loan sales				-				-				5,153			N/M			N/M
	Total noninterest income		$	27,779			$	58,088			$	32,088			(52.2	)		(13.4	)

N/M - Not meaningful.

(1)	Net trading gains result from changes in the fair value of diversified investment securities held in a grantor trust under deferred compensation agreements and are substantially offset by nonqualified plan expense for each period presented.

Total fee-based revenues declined 3.9% from the third quarter of 2013 primarily from decreases in fee income generated by sales of capital market products to commercial clients, gains on sales of mortgage loans, and merchant servicing fees. The reduction in merchant servicing fees was substantially offset by lower merchant card expense, reflecting the high volume, low margin nature of this service. These declines were partially mitigated by continued growth in wealth management fees.

Compared to the fourth quarter of 2012, total fee-based revenues remained stable. Growth in fee income generated by sales of capital market products to commercial clients and wealth management fees resulting from new customer relationships and improved market performance were offset by lower levels of mortgage banking income.

Total noninterest income comparisons to the prior quarter and fourth quarter of 2012 are impacted by significant nonrecurring transactions during these periods. During the third quarter of 2013, the Company recognized a $34.0 million gain on the sale of an equity investment, a $7.8 million gain on the termination of two FHLB forward commitments, and a $13.3 million charge related to an adjustment of the cash surrender values of certain BOLI policies. A $5.2 million gain on bulk loan sales was recognized in the fourth quarter of 2012.

During the fourth quarter of 2013, the Company repurchased and retired $23.3 million of 6.95% junior subordinated debentures, which resulted in a pre-tax loss of $1.0 million. This action will reduce future annual interest expense by $1.6 million.

Noninterest Expense Analysis
(Dollar amounts in thousands)
			Quarters Ended									December 31, 2013 Percent Change From
			December 31, 2013			September 30, 2013			December 31, 2012			September 30, 2013			December 31, 2012
Salaries and wages			$	27,286		$	27,254		$	27,036		0.1			0.9
Nonqualified plan expense (1)				1,305			1,003			205		30.1			N/M
Retirement and other employee benefits				6,399			6,013			6,787		6.4			(5.7	)
	Total compensation expense			34,990			34,270			34,028		2.1			2.8
Net OREO expense				2,815			2,849			1,325		(1.2	)		N/M
Professional services				5,592			5,517			10,415		1.4			(46.3	)
Net occupancy and equipment expense				7,910			7,982			8,747		(0.9	)		(9.6	)
Technology and related costs				2,984			2,984			3,231		-			(7.6	)
FDIC premiums				1,258			1,734			1,763		(27.5	)		(28.6	)
Advertising and promotions				2,144			2,167			1,744		(1.1	)		22.9
Merchant card expense				2,076			2,339			2,192		(11.2	)		(5.3	)
Cardholder expenses				1,019			1,030			935		(1.1	)		9.0
Other expenses				4,006			3,830			6,522		4.6			(38.6	)
Adjusted amortization of FDIC indemnification asset				-			-			2,705		N/M			N/M
	Total noninterest expense		$	64,794		$	64,702		$	73,607		0.1			(12.0	)

N/M - Not meaningful.

(1)	Nonqualified plan expense results from changes in the Company's obligation to participants under deferred compensation agreements and is substantially offset by earnings on related assets included in noninterest income.

Total noninterest expense for the fourth quarter of 2013 was consistent with the third quarter of 2013 and decreased 12.0% compared to the fourth quarter of 2012.

The increase in retirement and other employee benefits from the quarter ended September 30, 2013 was driven by the timing of certain pension expense accruals. Compared to the fourth quarter of 2012, the decrease in retirement and other employee benefits resulted primarily from changes to the Company's defined benefit pension plan and a decrease in other employee benefit accruals.

The fourth quarter of 2012 reflects higher gains on sales of OREO properties compared to the fourth quarter of 2013, driving higher net OREO expense.

During the fourth quarter of 2012, professional services were elevated due primarily to expenses related to the completion of the bulk loan sales, higher personnel recruitment expenses, and the accelerated recognition of certain capitalized consulting costs.

The decline in net occupancy and equipment expense resulted from a decrease in real estate taxes compared to the fourth quarter of 2012.

FDIC premiums decreased compared to both prior periods presented from a lower assessment rate.

The increase in advertising and promotions expense from the fourth quarter of 2012 was driven by the launch of our "Bank with Momentum" branding campaign during the second quarter of 2013, and reflects the return to a more normalized level of expense.

The decline in other expenses from the fourth quarter of 2012 reflects a $770,000 reduction in the reserve for unfunded commitments in the fourth quarter of 2013. In addition, the fourth quarter of 2012 was elevated as a result of a $1.3 million valuation adjustment on a former banking office.

Based on management's current estimates of future cash flows on covered loans and OREO and expected reimbursements from the FDIC for covered losses, no adjusted amortization of the FDIC indemnification asset was required for the third and fourth quarters of 2013.

LOAN PORTFOLIO AND ASSET QUALITY

Loan Portfolio Composition
(Dollar amounts in thousands)
				As Of									December 31, 2013 Percent Change From
				December 31, 2013			September 30, 2013			December 31, 2012			September 30, 2013			December 31, 2012
Corporate
Commercial and industrial				$	1,830,638		$	1,792,561		$	1,631,474		2.1			12.2
Agricultural					321,702			318,659			268,618		1.0			19.8
Commercial real estate:
	Office				459,202			449,067			474,717		2.3			(3.3	)
	Retail				392,576			384,787			368,796		2.0			6.4
	Industrial				501,907			503,010			489,678		(0.2	)		2.5
	Multi-family				332,873			332,749			285,481		-			16.6
	Construction				186,197			175,172			186,416		6.3			(0.1	)
	Other commercial real estate				807,071			790,114			773,121		2.1			4.4
		Total commercial real estate			2,679,826			2,634,899			2,578,209		1.7			3.9
		Total corporate loans			4,832,166			4,746,119			4,478,301		1.8			7.9
Consumer
Home equity					427,020			377,015			390,033		13.3			9.5
1-4 family mortgages					275,992			286,333			282,948		(3.6	)		(2.5	)
Installment					44,827			39,462			38,394		13.6			16.8
	Total consumer loans				747,839			702,810			711,375		6.4			5.1
	Total loans, excluding covered loans				5,580,005			5,448,929			5,189,676		2.4			7.5
Covered loans					134,355			153,305			197,894		(12.4	)		(32.1	)
	Total loans			$	5,714,360		$	5,602,234		$	5,387,570		2.0			6.1

Total loans, excluding covered loans, of $5.6 billion grew by $131.1 million from September 30, 2013. During the fourth quarter of 2013, the Company experienced strong annualized growth of nearly 10% across most corporate categories. In response to market conditions, the Company purchased $51.9 million of high-quality, shorter duration home equity loans and elected to sell $29.3 million of longer-term 1-4 family mortgages.

Compared to December 31, 2012, total loans, excluding covered loans, increased significantly by 7.5%, or $390.3 million. Year-over-year, the loan portfolio benefited from well-balanced growth reflecting credits of varying size and diverse geographic locations within our markets. The Company experienced strong growth in the commercial and industrial and agricultural loan categories, reflecting the impact of greater resource investments and expansion into specialized lending areas.

Asset Quality
(Dollar amounts in thousands)
			As Of												December 31, 2013 Percent Change From
			December 31, 2013				September 30, 2013				December 31, 2012				September 30, 2013			December 31, 2012
Asset quality, excluding covered loans and covered OREO
Non-accrual loans			$	59,798			$	68,170			$	84,534			(12.3	)		(29.3	)
90 days or more past due loans				3,708				5,642				8,689			(34.3	)		(57.3	)
	Total non-performing loans			63,506				73,812				93,223			(14.0	)		(31.9	)
Accruing troubled debt restructurings ("TDRs")				23,770				24,329				6,867			(2.3	)		N/M
OREO				32,473				35,616				39,953			(8.8	)		(18.7	)
	Total non-performing assets		$	119,749			$	133,757			$	140,043			(10.5	)		(14.5	)
30-89 days past due loans			$	20,742			$	15,111			$	22,666			37.3			(8.5	)
Performing potential problem loans:
	Special mention		$	77,564			$	114,788			$	137,622			(32.4	)		(43.6	)
	Substandard			78,390				72,439				80,977			8.2			(3.2	)
	Total performing potential problem loans (1)		$	155,954			$	187,227			$	218,599			(16.7	)		(28.7	)
Non-accrual loans to total loans				1.07	%			1.25	%			1.63	%
Non-performing loans to total loans				1.14	%			1.35	%			1.80	%
Non-performing assets to loans plus OREO				2.13	%			2.44	%			2.68	%
Performing potential problem loans to total loans (1)				2.79	%			3.44	%			4.22	%
Allowance for Credit Losses
Allowance for loan losses			$	72,946			$	77,772			$	87,384			(6.2	)		(16.5	)
Allowance for covered loan losses				12,559				13,056				12,062			(3.8	)		4.1
	Total allowance for loan and covered loan losses			85,505				90,828				99,446			(5.9	)		(14.0	)
Reserve for unfunded commitments				1,616				2,386				3,366			(32.3	)		(52.0	)
	Total allowance for credit losses		$	87,121			$	93,214			$	102,812			(6.5	)		(15.3	)
Allowance for credit losses to loans, including covered loans				1.52	%			1.66	%			1.91	%
Allowance for credit losses to non-accrual loans, excluding covered loans				124.69	%			117.59	%			107.35	%

N/M - Not meaningful.

(1)	Total performing potential problem loans excludes accruing TDRs of $2.8 million as of December 31, 2013, $18.6 million as of September 30, 2013, and $448,000 as of December 31, 2012.

Non-performing loans, excluding covered loans, were $63.5 million at December 31, 2013, decreasing 14.0% from September 30, 2013 and 31.9% from December 31, 2012. The reclassification of two corporate loan relationships totaling $19.3 million from non-accrual to accruing TDR status accounted for the majority of the year-over-year improvement. These loans continue to perform in accordance with their modified terms, which are at market rates, and are expected to move to the performing loan portfolio by the end of the first quarter of 2014.

Performing potential problem loans decreased 16.7% from September 30, 2013 and 28.7% from December 31, 2012 and are now at pre-recession levels.

Charge-Off Data
(Dollar amounts in thousands)
				Quarters Ended
				December 31, 2013				% of Total			September 30, 2013					% of Total		December 31, 2012				% of Total
Net loan charge-offs (1):
	Commercial and industrial			$	2,528			50.0			$	2,057				32.0		$	1,778			28.4
	Agricultural				(58	)		(1.1	)			141				2.2			(177	)		(2.8	)
	Office, retail, and industrial				882			17.4				956				14.9			95			1.5
	Multi-family				(10	)		(0.2	)			112				1.7			9			0.1
	Construction				(934	)		(18.5	)			410				6.4			234			3.7
	Other commercial real estate				776			15.4				639				10.0			1,786			28.5
	Consumer				1,868			37.0				2,108				32.8			2,536			40.6
		Net loan charge-offs, excluding covered loans			5,052			100.0				6,423				100.0			6,261			100.0
Net covered loan charge-offs (1)					271							1,629							1,465
		Total net loan charge-offs		$	5,323						$	8,052						$	7,726
Net loan charge-offs to average loans, excluding covered loans, annualized:
Quarter-to-date					0.36	%						0.47	%						0.48	%
Year-to-date					0.48	%						0.53	%						3.32	%

(1)	Amounts represent charge-offs, net of recoveries.

Excluding net covered loan charge-offs, net loan charge-offs for the fourth quarter of 2013 decreased 21.3% compared to the third quarter of 2013, representing one of the lowest levels of charge-offs in over five years.

CAPITAL MANAGEMENT

Capital Ratios
(Dollar amounts in thousands)
			December 31, 2013			September 30, 2013			December 31, 2012			September 30, 2012			Regulatory Minimum For "Well- Capitalized"			Excess Over Required Minimums at December 31, 2013
Regulatory capital ratios:
	Total capital to risk-weighted assets		12.39	%		12.60	%		11.90	%		11.65	%		10.00	%		24	%		$	162,321
	Tier 1 capital to risk-weighted assets		10.91	%		11.12	%		10.28	%		9.92	%		6.00	%		82	%		$	333,734
	Tier 1 leverage to average assets		9.18	%		9.21	%		8.40	%		8.13	%		5.00	%		84	%		$	337,620
Tier 1 common capital to risk-weighted assets (1)			10.37	%		10.23	%		9.33	%		8.93	%		N/A			N/A				N/A
Tangible common equity ratios (2):
	Tangible common equity to tangible assets		9.09	%		8.61	%		8.44	%		8.26	%		N/A			N/A				N/A
	Tangible common equity, excluding other comprehensive loss, to tangible assets		9.43	%		8.93	%		8.64	%		8.38	%		N/A			N/A				N/A
	Tangible common equity to risk-weighted assets		10.67	%		10.60	%		10.39	%		10.12	%		N/A			N/A				N/A
Non-performing assets to tangible common equity and allowance for credit losses			14.74	%		16.66	%		18.36	%		20.50	%		N/A			N/A				N/A

N/A - Ratio is not subject to formal Federal Reserve regulatory guidance.

(1)	Excludes the impact of trust-preferred securities.
(2)	Tangible common equity ("TCE") represents common stockholders' equity less goodwill and identifiable intangible assets. In management's view, Tier 1 common and TCE measures are meaningful to the Company, as well as analysts and investors, in assessing the Company's use of equity and in facilitating comparisons with competitors.

The decline in the Company's regulatory capital ratios compared to the third quarter of 2013 resulted from loan growth and the repurchase and retirement of $23.3 million of 6.95% junior subordinated debentures, which qualify as Tier 1 capital. This decrease was partially mitigated by retained earnings. The Company's regulatory ratios exceeded all regulatory mandated ratios for characterization as "well-capitalized" as of December 31, 2013.

The Board of Directors approved an increase in the quarterly cash dividend from $0.04 to $0.07 per common share during the fourth quarter of 2013, which followed a dividend increase from $0.01 to $0.04 per common share in the second quarter of 2013.

About the Company

First Midwest is the premier relationship-based financial institution in the dynamic Chicagoland banking market. As one of Illinois' largest independent bank holding companies, First Midwest provides a full range of business and retail banking and wealth management services through approximately 90 banking offices located in metropolitan Chicago, northwest Indiana, central and western Illinois, and eastern Iowa. The Company website is www.firstmidwest.com.

Forward-Looking Statements

This press release may contain "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are not historical facts but instead represent only the Company's beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside of the Company's control. It is possible that actual results and the Company's financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. For a discussion of certain of the risks and important factors that could affect the Company's future results, see "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2012 and other reports filed with the Securities and Exchange Commission. Forward-looking statements represent management's judgment as of the date hereof based on currently available information. The Company undertakes no duty to update any forward-looking statements contained in this press release after the date hereof.

Conference Call

A conference call to discuss the Company's results, outlook, and related matters will be held on Wednesday, January 22, 2014 at 10:00 AM (ET). Members of the public who would like to listen to the conference call should dial (888) 317-6016 (U.S. domestic) or (412) 317-6016 (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, www.firstmidwest.com/investorrelations. 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. 10039374 beginning one hour after completion of the live call until 9:00 A.M. (ET) on January 29, 2014. 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.

Accompanying Financial Statements and Tables

Accompanying this press release is the following unaudited financial information:

• Condensed Consolidated Statements of Financial Condition
• Condensed Consolidated Statements of Income

Press Release and Additional Information Available on Website

This press release, the accompanying financial statements and tables, and certain additional unaudited Selected Financial Information are available through the "Investor Relations" section of First Midwest's website at www.firstmidwest.com/investorrelations.

Condensed Consolidated Statements of Financial Condition
Unaudited
(Amounts in thousands)
			December 31, 2013				September 30, 2013				December 31, 2012
Assets
Cash and due from banks			$	110,417			$	155,075			$	149,420
Interest-bearing deposits in other banks				476,824				744,163				566,846
Trading securities, at fair value				17,317				16,443				14,162
Securities available-for-sale, at fair value				1,112,725				1,162,911				1,082,403
Securities held-to-maturity, at amortized cost				44,322				29,847				34,295
Federal Home Loan Bank and Federal Reserve Bank stock, at cost				35,161				35,161				47,232
Loans, excluding covered loans				5,580,005				5,448,929				5,189,676
Covered loans				134,355				153,305				197,894
Allowance for loan and covered loan losses				(85,505	)			(90,828	)			(99,446	)
	Net loans			5,628,855				5,511,406				5,288,124
OREO, excluding covered OREO				32,473				35,616				39,953
Covered OREO				8,863				10,477				13,123
FDIC indemnification asset				16,585				18,078				37,051
Premises, furniture, and equipment				120,204				118,664				121,596
Investment in BOLI				193,167				193,979				206,405
Goodwill and other intangible assets				276,366				277,187				281,059
Accrued interest receivable and other assets				180,128				208,906				218,170
	Total assets		$	8,253,407			$	8,517,913			$	8,099,839
Liabilities and Stockholders' Equity
Noninterest-bearing deposits			$	1,911,602				2,020,956				1,762,903
Interest-bearing deposits				4,854,499				4,982,252				4,909,352
	Total deposits			6,766,101				7,003,208				6,672,255
Borrowed funds				224,342				212,058				185,984
Senior and subordinated debt				190,932				214,876				214,779
Accrued interest payable and other liabilities				70,590				101,046				85,928
	Total liabilities			7,251,965				7,531,188				7,158,946
Common stock				858				858				858
Additional paid-in capital				414,293				412,677				418,318
Retained earnings				853,740				839,835				786,453
Accumulated other comprehensive loss, net of tax				(26,792	)			(26,057	)			(15,660	)
Treasury stock, at cost				(240,657	)			(240,588	)			(249,076	)
	Total stockholders' equity			1,001,442				986,725				940,893
	Total liabilities and stockholders' equity		$	8,253,407			$	8,517,913			$	8,099,839

Condensed Consolidated Statements of Income
Unaudited
(Amounts in thousands, except per share data)
			Quarters Ended												Years Ended
			December 31, 2013				September 30, 2013				December 31, 2012				December 31, 2013				December 31, 2012
Interest Income
Loans, excluding covered loans			$	60,068			$	60,614			$	61,596			$	239,224			$	248,752
Covered loans				3,062				3,142				3,975				13,804				15,873
Investment securities				8,138				7,742				7,517				30,893				32,923
Other short-term investments				852				831				1,111				3,326				3,021
	Total interest income			72,120				72,329				74,199				287,247				300,569
Interest Expense
Deposits				2,741				2,837				3,735				11,901				18,052
Borrowed funds				390				390				497				1,607				2,009
Senior and subordinated debt				3,301				3,436				3,445				13,607				14,840
	Total interest expense			6,432				6,663				7,677				27,115				34,901
	Net interest income			65,688				65,666				66,522				260,132				265,668
Provision for loan and covered loan losses				-				4,770				5,593				16,257				158,052
	Net interest income after provision for loan and covered loan losses			65,688				60,896				60,929				243,875				107,616
Noninterest Income
Service charges on deposit accounts				9,259				9,472				9,689				36,526				36,699
Card-based fees				5,517				5,509				5,274				21,649				20,852
Wealth management fees				6,202				6,018				5,590				24,185				21,791
Mortgage banking income				1,055				1,273				2,329				5,306				2,689
Merchant servicing fees				2,585				2,915				2,727				10,953				10,806
Other service charges, commissions, and fees				2,094				2,617				1,121				7,663				4,486
Net securities gains (losses)				147				33,801				88				34,164				(921	)
BOLI income (loss)				584				(13,028	)			355				(11,844	)			1,307
Loss on early extinguishment of debt				(1,034	)			-				(814	)			(1,034	)			(558	)
Other income				1,370				1,682				576				5,486				4,355
Gain on termination of FHLB forward commitments				-				7,829				-				7,829				-
Gain on bulk loan sales				-				-				5,153				-				5,153
Gain on FDIC-assisted acquisition				-				-				-				-				3,289
	Total noninterest income			27,779				58,088				32,088				140,883				109,948
Noninterest Expense
Salaries and employee benefits				34,990				34,270				34,028				138,750				130,755
Net occupancy and equipment expense				7,910				7,982				8,747				31,832				32,699
Technology and related costs				2,984				2,984				3,231				11,335				11,846
Professional services				5,592				5,517				10,415				21,922				29,614
Net OREO expense				2,815				2,849				1,325				8,547				10,521
FDIC premiums				1,258				1,734				1,763				6,438				6,926
Adjusted amortization of FDIC indemnification asset				-				-				2,705				1,500				6,705
Other expenses				9,245				9,366				11,393				36,413				38,434
	Total noninterest expense			64,794				64,702				73,607				256,737				267,500
	Income (loss) before income tax expense			28,673				54,282				19,410				128,021				(49,936	)
	Income tax expense (benefit)			9,508				24,959				6,194				48,715				(28,882	)
	Net income (loss)			19,165				29,323				13,216				79,306				(21,054	)
Net (income) loss applicable to non-vestedrestricted shares				(260	)			(416	)			(194	)			(1,107	)			306
	Net income (loss) applicable to common shares		$	18,905			$	28,907			$	13,022			$	78,199			$	(20,748	)
Diluted earnings (loss) per common share			$	0.26			$	0.39			$	0.18			$	1.06			$	(0.28	)
Dividends declared per common share			$	0.07			$	0.04			$	0.01			$	0.16			$	0.04
Weighted average diluted common shares outstanding				74,042				74,034				73,758				73,994				73,666