-- 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