-- Fully diluted earnings per share for second quarter 2008 were $0.56 versus $0.52 for first quarter 2008. Return on average assets of 1.33% versus 1.25% and return on average equity of 14.57% versus 13.75% were achieved for the same periods. -- Loan growth in targeted commercial and industrial, agricultural, and commercial real estate categories was 14% annualized for second quarter 2008 versus first quarter 2008. -- Nonperforming assets plus 90 day past due loans increased from first quarter 2008 levels by $10.7 million and stand at 1.35% of loans at quarter end. In the first half of 2008, $4.3 million was added to the reserve for loan losses above and beyond charge offs in anticipation of future developments. Numerous administrative enhancements to the credit remediation process embracing oversight, staffing, and reporting were put in place. -- Long term capital management plans embraced: scheduled payment of regular quarterly dividends, continued deferral of share repurchases, maintenance of "well capitalized" regulatory capital levels, disciplined balance sheet planning.Financial Performance First Midwest Bancorp, Inc. (the "Company" or "First Midwest") (
Minimum "Well- 6/30/08 Capitalized" Level -------- ------------------ Tier 1 Risk Based 9.42% 6.00% Total Risk Based 12.03% 10.00% Tier 1 Leverage 7.56% 5.00%Tangible equity to tangible assets ratio (exclusive of other comprehensive income) stood at 5.90% as of June 30, 2008 and is on pace to exceed 6.00% by December 31, 2008. The Company's dividend policy remained on track paying $0.31 per share on July 15, 2008 and represented the 102nd consecutive quarterly dividend since the founding of the Company in 1983. Contrariwise, the Company's share repurchase program, which has operated episodically in recent years, is anticipated to be informally suspended throughout the balance of 2008. Leverage within the balance sheet is carefully managed through the operations of our Asset Liability Committee. Credit Remediation As anticipated, nonperforming assets plus 90 day past due loans aggregated $70.0 million at June 30, 2008, compared with $59.3 million at March 31, 2008. Such increase is related primarily to loans to home builders and developers, substantially all of whom are in the greater Chicagoland area. In response to this trend, the Company has enhanced its credit remediation staff and accelerated executive management review. The evolution of the trend in these loans from performing to nonperforming and, in some instances, to other real estate owned is evident in the new reporting metrics set forth on page 10 (attached) as are charge offs by subcategory of credit. The subcategory of loans as a percentage of total loans is set forth on new page 9 (attached). Analysis of the potential exposure of the Company's loan portfolios to loss indicates provisioning at the level of the most recent quarters should be sufficient to absorb these losses. The Company is aggressively engaged with each of its builder/developer clients to define the best approach to realize maximum value. Exposures are primarily in projects that are well known to management because of their nearly 100% concentration in our Chicagoland markets. Loan to value guidelines for unimproved and developed land are 65% and 75% respectively which provide an initial cushion to future reappraisal of property values. Fortunately, the Company is only minimally exposed to the direct consumer part of this negative credit cycle because of its modest concentrations and conservative underwriting. Aggregate loan to value ratio in the Company's home equity portfolio ($460.6 million) is approximately 60%. At the same time, the Company's single-family mortgage portfolio ($213.3 million) is leveraged at approximately 50%. About the Company First Midwest is the premier relationship-based banking franchise in the growing Chicagoland banking market. As one of the Chicago metropolitan area's largest independent bank holding companies, First Midwest provides the full range of both business and retail banking and trust and investment management services through 101 offices located in 63 communities, primarily in metropolitan Chicago. First Midwest was recently recognized by the Alfred P. Sloan awards for Business Excellence in Workforce Flexibility in the greater Chicago Area. Safe Harbor Statement This press release contains "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 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 some 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, 2007 and other reports filed with the Securities and Exchange Commission. Forward-looking statements represent management's best judgment as of the date hereof based on currently available information. Except as required by law, the Company undertakes no duty to update the contents of 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, July 16th, at 10:00 am (ET). Members of the public who would like to listen to the conference call should dial 1-866-713-8310. (U.S. domestic) or 1-617-597-5308 (international) and enter passcode number 129-50-118. The number should be dialed at least 10 minutes prior to the start of the conference call. The conference call will also be accessible as an audio webcast through the Investor Relations section of the Company's web site, www.firstmidwest.com/aboutinvestor_overview.asp. There is no charge to access the call. For those unable to listen to the live broadcast, a replay will be available on the Company's web site or by dialing 1-888-286-8010 (U.S. domestic) or 1-617-801-6888 (international) passcode number 734-83-254, beginning approximately one hour after the event through 11:59 pm (ET) on July 23, 2008. 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:
-- Operating Highlights, Balance Sheet Highlights, Stock Performance Data, and Capital Ratios (1 page) -- Condensed Consolidated Statements of Condition (1 page) -- Condensed Consolidated Statements of Income (1 page) -- Loan Portfolio Composition (1 page) -- Asset Quality (1 page)Press Release and Additional Information Available on Website This press release, the accompanying financial statements and tables, and certain additional unaudited Selected Financial Information (http://www.firstmidwest.com/aboutinvestor_selected.asp) (totaling 3 pages) are available through the "Investor Relations" section of First Midwest's website at www.firstmidwest.com.
First Midwest Bancorp, Inc. Press Release Dated July 16, 2008 Operating Highlights Unaudited Quarters Ended --------------------------------------- (Dollar amounts in thousands June 30, March 31, June 30, except per share data) 2008 2008 2007 ----------- ----------- ----------- Net income $ 26,997 $ 25,038 $ 29,311 Diluted earnings per share $ 0.56 $ 0.52 $ 0.59 Return on average equity 14.57% 13.75% 15.47% Return on average assets 1.33% 1.25% 1.44% Net interest margin 3.58% 3.53% 3.61% Efficiency ratio 51.67% 54.02% 52.13% Balance Sheet Highlights Unaudited As Of --------------------------------------- (Dollar amounts in thousands June 30, March 31, June 30, except per share data) 2008 2008 2007 ----------- ----------- ----------- Total assets $ 8,311,025 $ 8,315,368 $ 8,055,358 Total loans 5,182,355 5,045,765 4,909,858 Total deposits 5,785,163 5,721,562 5,814,744 Stockholders' equity 724,034 737,927 741,060 Book value per share $ 14.90 $ 15.20 $ 14.97 Period end shares outstanding 48,584 48,561 49,494 Stock Performance Data Unaudited Quarters Ended --------------------------------------- (Dollar amounts in thousands June 30, March 31, June 30, except per share data) 2008 2008 2007 ----------- ----------- ----------- Market Price: Quarter End $ 18.65 $ 27.77 $ 35.51 High $ 29.36 $ 31.98 $ 38.17 Low $ 18.65 $ 24.38 $ 34.82 Quarter end price to book value 1.3 x 1.8 x 2.4 x Quarter end price to consensus estimated 2008 earnings 9.3 x N/A N/A Dividends declared per share $ 0.310 $ 0.310 $ 0.295 Common dividends paid $ 15,084 $ 15,079 $ 14,622 Capital Ratios Unaudited As Of --------------------------------------- June 30, March 31, June 30, 2008 2008 2007 ----------- ----------- ----------- Regulatory capital ratios: Total capital to risk-weighted assets 12.03% 11.78% 12.49% Tier 1 capital to risk-weighted assets 9.42% 9.19% 9.87% Tier 1 leverage to average assets 7.56% 7.51% 7.75% Tangible equity ratios: Tangible equity to tangible assets 5.45% 5.62% 5.80% Tangible equity, excluding other comprehensive loss, to tangible assets 5.90% 5.73% 6.26% Tangible equity to risk- weighted assets 6.88% 7.08% 7.28% First Midwest Bancorp, Inc. Press Release Dated July 16, 2008 Condensed Consolidated Statements of Condition Unaudited June 30, ------------------------ (Amounts in thousands) 2008 2007 ----------- ----------- Assets Cash and due from banks $ 174,122 $ 156,305 Funds sold and other short-term investments 692 8,996 Trading account securities 17,368 17,403 Securities available-for-sale 2,106,461 2,128,683 Securities held to maturity, at amortized cost 94,580 104,152 Federal Home Loan Bank and Federal Reserve Bank stock, at cost 54,767 54,767 Loans 5,182,355 4,909,858 Reserve for loan losses (66,104) (62,391) ----------- ----------- Net loans 5,116,251 4,847,467 ----------- ----------- Premises, furniture, and equipment 121,215 128,448 Investment in corporate owned life insurance 206,132 199,396 Goodwill and other intangible assets 286,737 290,447 Accrued interest receivable and other assets 132,700 119,294 ----------- ----------- Total assets $ 8,311,025 $ 8,055,358 ----------- ----------- Liabilities and Stockholders' Equity Deposits $ 5,785,163 $ 5,814,744 Borrowed funds 1,489,908 1,172,190 Subordinated debt 232,476 226,118 Accrued interest payable and other liabilities 79,444 101,246 ----------- ----------- Total liabilities 7,586,991 7,314,298 ----------- ----------- Common stock 613 613 Additional paid-in capital 206,113 205,836 Retained earnings 866,844 852,598 Accumulated other comprehensive (loss) (35,949) (35,148) Treasury stock, at cost (313,587) (282,839) ----------- ----------- Total stockholders' equity 724,034 741,060 ----------- ----------- Total liabilities and stockholders' equity $ 8,311,025 $ 8,055,358 ----------- ----------- First Midwest Bancorp, Inc. Press Release Dated July 16, 2008 Condensed Consolidated Statements of Income Unaudited Quarters Ended -------------------------------- (Amounts in thousands except per share June 30, March 31, June 30, data) 2008 2008 2007 --------- --------- ---------- Interest Income Loans $ 74,819 $ 81,334 $ 92,273 Securities 26,391 27,120 28,169 Other 103 21 229 --------- --------- ---------- Total interest income 101,313 108,475 120,671 --------- --------- ---------- Interest Expense Deposits 28,036 34,210 41,593 Borrowed funds 9,249 12,076 14,363 Subordinated debt 3,702 3,689 3,751 Total interest expense 40,987 49,975 59,707 Net interest income 60,326 58,500 60,964 Provision for loan losses 5,780 9,060 1,761 --------- --------- ---------- Net interest income after provision for loan losses 54,546 49,440 59,203 --------- --------- ---------- Noninterest Income Service charges on deposit accounts 11,385 10,422 11,483 Trust and investment management fees 3,945 3,947 3,916 Other service charges, commissions, and fees 4,456 5,002 6,099 Card-based fees 4,236 3,898 4,181 --------- --------- ---------- Subtotal, fee-based revenues 24,022 23,269 25,679 --------- --------- ---------- Corporate owned life insurance income 2,145 2,462 1,982 Security (losses) gains, net (4,618) 4,968 961 Other 874 (680) 2,001 --------- --------- ---------- Total noninterest income 22,423 30,019 30,623 --------- --------- ---------- Noninterest Expense Salaries and employee benefits 26,368 26,190 29,008 Net occupancy expense 5,528 6,151 5,386 Equipment expense 2,451 2,567 2,590 Technology and related costs 1,820 1,771 1,849 Other 13,778 12,664 11,904 --------- --------- ---------- Total noninterest expense 49,945 49,343 50,737 --------- --------- ---------- Income before taxes 27,024 30,116 39,089 Income tax expense 27 5,078 9,778 --------- --------- ---------- Net Income $ 26,997 $ 25,038 $ 29,311 --------- --------- ---------- Diluted Earnings Per Share $ 0.56 $ 0.52 $ 0.59 --------- --------- ---------- Dividends Declared Per Share $ 0.310 $ 0.310 $ 0.295 --------- --------- ---------- Weighted Average Diluted Shares Outstanding 48,576 48,589 49,984 --------- --------- ---------- First Midwest Bancorp, Inc. Press Release Dated July 16, 2008 6/30/08 % Unaudited As Of Change From --------------------------------------- ---------------- (Dollar amounts % of in thousands) 6/30/08 total 3/31/08 6/30/07 3/31/08 6/30/07 ---------- ----- ---------- ---------- ------- ------- Loan Portfolio Composition Loan portfolio composition: Commercial, industrial, and agricultural $1,656,161 32.0% $1,597,279 $1,558,876 14.7% 6.2% Commercial real estate: Office, retail, and industrial 1,048,547 20.2% 1,020,403 905,483 11.0% 15.8% Residential land and development 418,455 8.1% 413,531 431,635 4.8% (3.1%) Multifamily 195,815 3.8% 188,474 205,821 15.6% (4.9%) Other commercial real estate 1,107,122 21.3% 1,054,143 1,011,265 20.1% 9.5% ---------- ----- ---------- ---------- ------- ------- Total commercial real estate (1) 2,769,939 53.4% 2,676,551 2,554,204 14.0% 8.4% ---------- ----- ---------- ---------- ------- ------- Consumer: Home equity 460,581 8.9% 459,068 467,471 1.3% (1.5%) Real estate 1-4 family 213,295 4.1% 224,895 206,506 (20.6%) 3.3% Other consumer 82,379 1.6% 87,972 122,801 (25.4%) (32.9%) ---------- ----- ---------- ---------- ------- ------- Total consumer 756,255 14.6% 771,935 796,778 (8.1%) (5.1%) ---------- ----- ---------- ---------- ------- ------- Total loans(2) $5,182,355 100.0% $5,045,765 $4,909,858 10.8% 5.5% ---------- ----- ---------- ---------- ------- ------- Commercial Real Estate Detail Office, Retail, and Industrial Loans by product type (2): Office $ 337,424 32.2% $ 326,107 $ 270,029 13.9% 25.0% Retail 281,942 26.9% 279,612 232,988 3.3% 21.0% Industrial 429,181 40.9% 414,684 402,466 14.0% 6.6% ---------- ----- ---------- ---------- ------- ------- Total office, retail, and industrial $1,048,547 100.0% $1,020,403 $ 905,483 11.0% 15.8% ---------- ----- ---------- ---------- ------- ------- Residential Land and Development Loans by product type: Structures $ 220,680 52.7% $ 212,369 $ 255,388 15.6% (13.8%) Land 197,775 47.3% 201,162 176,247 (6.7%) 12.2% ---------- ----- ---------- ---------- ------- ------- Total residential land and development $ 418,455 100.0% $ 413,531 $ 431,635 4.8% (3.1%) ---------- ----- ---------- ---------- ------- ------- Other Commercial Real Estate Loans by product type: Commercial land $ 381,013 34.4% $ 365,246 $ 273,615 17.3% 39.3% 1-5 family investors 165,445 14.9% 166,684 153,032 (3.0%) 8.1% Service stations and truck stops 120,670 10.9% 117,592 72,532 10.5% 66.4% Warehouses and storage 79,580 7.2% 71,421 54,385 45.7% 46.3% Hotels 67,574 6.1% 59,082 66,012 57.5% 2.4% Restaurants 47,313 4.3% 48,147 41,750 (6.9%) 13.3% Medical 43,347 3.9% 42,912 13,841 4.1% 213.2% Automobile dealers 37,562 3.4% 30,934 27,784 85.7% 35.2% Mobile home parks 25,217 2.3% 23,481 24,526 29.6% 2.8% Recreational 15,106 1.4% 16,243 17,791 (28.0%) (15.1%) Religious 11,362 1.0% 11,291 11,296 2.5% 0.6% Other (3) 112,933 10.2% 101,110 254,701 46.8% (55.7%) ---------- ----- ---------- ---------- ------- ------- Total other commercial real estate $1,107,122 100.0% $1,054,143 $1,011,265 20.1% 9.5% ---------- ----- ---------- ---------- ------- ------- (1) 24% of total commercial real estate loans are owner occupied as of June 30, 2008. (2) Substantially all loans that are over $1 million are to customers within our market as of June 30, 2008. (3) Certain loans presented here as of June 30, 2007 were subsequently redistributed to more appropriate categories. First Midwest Bancorp, Inc. Press Release Dated July 16, 2008 Unaudited As Of ------------------------------------------------ (Dollar amounts in % of % of thousands) 6/30/08 Category Total 3/31/08 6/30/07 -------- -------- -------- -------- -------- Asset Quality Nonaccrual loans: Commercial, industrial, and agricultural $ 5,222 0.32% 7.4% $ 6,770 $ 8,815 Office, retail, and industrial 1,125 0.11% 1.6% 730 - Residential land and development 11,664 2.79% 16.7% 4,081 540 Multifamily 3,016 1.54% 4.3% 1,361 294 Other commercial real estate 885 0.08% 2.9% 255 2,101 Consumer 3,324 0.44% 4.7% 3,876 3,177 -------- -------- -------- -------- Total nonaccrual loans 25,236 36.0% 17,073 14,927 Restructured loans 259 0.4% 140 - -------- -------- -------- -------- Total nonperforming loans 25,495 36.4% 17,213 14,927 Other real estate owned 7,042 10.1% 8,607 3,683 -------- -------- -------- -------- Total nonperforming assets $ 32,537 46.5% $ 25,820 $ 18,610 -------- -------- -------- -------- 90 days past due loans (still accruing interest): Commercial, industrial, and agricultural $ 4,530 0.27% 6.5% $ 3,926 $ 2,458 Office, retail, and industrial 2,855 0.27% 4.1% 2,182 907 Residential land and development 17,181 4.11% 21.1% 17,438 5,006 Multifamily 2,071 1.06% 2.9% 2,332 6,281 Other commercial real estate 2,925 0.26% 7.6% 2,451 1,457 Consumer 7,948 1.05% 11.3% 5,150 3,524 -------- -------- -------- -------- Total 90 days past due loans 37,510 53.5% 33,479 19,633 -------- -------- -------- -------- Total nonperforming assets plus 90 days past due loans $ 70,047 100.0% $ 59,299 $ 38,243 -------- -------- -------- -------- -------- Asset Quality Ratios Nonperforming loans to loans 0.49% 0.34% 0.30% Nonperforming assets to loans plus foreclosed real estate 0.63% 0.51% 0.38% Nonperforming assets plus loans past due 90 days to loans plus foreclosed real estate 1.35% 1.17% 0.78% Reserve for loan losses $ 66,104 $ 64,780 $ 62,391 Reserve for loan losses to loans 1.28% 1.28% 1.27% Reserve for loan losses to nonperforming loans 259% 376% 418% -------- -------- -------- -------- -------- Quarters Ended ------------------------------------------------ (Dollar amounts in % of % of thousands) 6/30/08 Category Total 3/31/08 6/30/07 -------- -------- -------- -------- -------- Charge-off Data Net loans charged-off: Commercial, industrial, and agricultural $ 2,380 0.14% 53.4% $ 3,188 $ 1,252 Office, retail, and industrial 31 0.00% 0.7% - - Residential land and development 138 0.03% 3.1% 559 18 Multifamily 830 0.42% 18.6% 842 119 Other commercial real estate 116 0.01% 2.6% 673 (78) Consumer 961 0.13% 21.6% 818 459 -------- -------- -------- -------- Total net loans charged-off $ 4,456 100.0% $ 6,080 $ 1,770 -------- -------- -------- -------- Quarter-to-date net loan charge-offs to average loans (annualized) 0.35% 0.49% 0.14% Year-to-date net loan charge-offs to average loans (annualized) 0.42% 0.49% 0.19% -------- -------- -------- -------- --------
Contact Information: CONTACT: Paul F. Clemens EVP, Chief Financial Officer (630) 875-7347 www.firstmidwest.com First Midwest Bancorp, Inc. One Pierce Place, Suite 1500 Itasca, Illinois 60143 (630) 875-7450