-- Record Net Income: $99.1 Million for Full Year 2004
-- EPS of $2.12 for 2004: Up 7.6% from 2003
-- Strong Profitability: Full Year ROAA of 1.45% and ROAE of 18.7% for
2004
-- Solid Commercial Loan Growth: Up 8.9% from 2003
-- Nonperforming Asset Ratio at 0.55%: 22.5% Decrease from 2003
-- Stable Efficiency Ratio: 50.4% For 4Q03 and 50.1% for Full Year
ITASCA, Ill., Jan. 19 /PRNewswire-FirstCall/ -- First Midwest Bancorp,
Inc. ("First Midwest") (Nasdaq: FMBI) today reported net income for the fourth
quarter ended December 31, 2004 of $25.2 million, or $0.54 per diluted share,
an increase of 3.8% on a per diluted share basis from 2003's fourth quarter
earnings of $24.2 million, or $0.52 per diluted share. First Midwest's
annualized return on average assets was 1.46% for fourth quarter 2004, as
compared to 1.54% for fourth quarter 2003, and annualized return on average
equity was 18.6% for both fourth quarter 2004 and fourth quarter 2003.
First Midwest's net income for 2004 increased 7.6% on a per diluted share
basis to a record $99.1 million, or $2.12 per diluted share, from net income
of $92.8 million, or $1.97 per diluted share, in 2003. In 2004, First
Midwest's return on average assets was 1.45% as compared to 1.50% in 2003.
First Midwest's return on average equity in 2004 was 18.7% as compared to
18.3% in 2003.
"We are once again pleased to report a year of record performance, the
result of our continued sales success in both commercial and retail home
equity lending and the growth of demand deposit accounts," said First Midwest
President and Chief Executive Officer John O'Meara. "We also completed the
successful integration of CoVest into First Midwest in 2004, which increased
our assets by over $600 million while requiring only a minimal increase in
back-office support."
2005 Outlook
"First Midwest begins 2005 well-positioned in strong markets with solid
fundamentals," O'Meara said. "I am encouraged by the favorable trends
experienced in commercial and home equity loan outstandings and fee growth as
well as our efforts to position ourselves to take advantage of a strengthening
economy. In 2005, we will work to balance our exciting opportunities with the
inherent uncertainties arising from interest rate changes and a highly
competitive marketplace, and we will continue to focus on the relationship-
based sales approach that drives our long-term success. We expect diluted
earnings per share to be $2.23 to $2.33 in 2005."
Net Interest Margin
First Midwest's net interest income increased 10.3% to $58.4 million in
fourth quarter 2004 as compared to $53.0 million in 2003's fourth quarter.
This improvement was driven by a $567.8 million increase in average interest-
earning assets from fourth quarter 2003, primarily the result of the
acquisition of CoVest on December 31, 2003. Net interest margin for fourth
quarter 2004 was 3.94%, down from 4.01% in fourth quarter 2003, but up from
3.90% on a linked-quarter basis. This sequential quarter margin improvement
was largely the result of earning assets repricing more quickly than paying
liabilities as the targeted Federal Funds rate increased 50 basis points
during fourth quarter 2004.
Loan and Deposit Growth
First Midwest's total loans of $4.1 billion at December 31, 2004 increased
1.9% from December 31, 2003, reflecting two distinct decisions. First,
$74.2 million of certain 1-4 family residential mortgages was converted into
an investment security during the fourth quarter of 2004, and second, First
Midwest exited its marginally profitable indirect consumer lending business
resulting in a year-over-year shrinkage of outstandings of $60.7 million from
December 31, 2003. Excluding both residential 1-4 family residential loans
and indirect consumer loans, First Midwest's total loans increased 6.0% as
commercial, agricultural, commercial real estate, and home equity consumer
loan categories all grew. Commercial loan growth trends remain favorable, and
commercial loans outstanding as of December 31, 2004 increased by 8.9%
compared to December 31, 2003. Consumer home equity loans increased 2.8% on a
linked-quarter basis and 10.9% from December 31, 2003, reflecting continued
sales success.
Total deposits as of December 31, 2004 totaled $4.9 billion, up 1.9% in
comparison to December 31, 2003. Demand and time deposit balances outstanding
as of December 31, 2004 increased 7.4% and 3.5%, respectively, in comparison
to 2003.
Noninterest Income and Expense
First Midwest's total noninterest income for fourth quarter 2004 increased
24.0% to $24.1 million, as compared to $19.4 million for fourth quarter 2003.
Total noninterest income for fourth quarter 2004 increased 5.6% as compared to
fourth quarter 2003, excluding from both periods net security gains, losses
from the early extinguishment of debt, and other income, which primarily
reflects the impact of gains realized from the sale of assets. For full year
2004, total noninterest income totaled $79.4 million, an increase of 7.0% over
2003. Increased revenue was driven by a 10.0% increase in trust revenues and
an 11.0% increase in card-based revenues.
Total noninterest expense for fourth quarter 2004 increased $5.7 million
to $42.8 million, an increase of 15.3% from fourth quarter 2003. This
increase reflected additional expenses associated with operating the CoVest
franchise, including employee-related expense, net occupancy and equipment
costs, and core deposit intangible amortization. In addition, this increase
also reflected comparatively higher expenses for incentive-related
compensation programs, employee insurance and increased fees for professional
and audit-related services. These increases were partially offset by lower
data processing costs. For the full year of 2004, total noninterest expense
totaled $163.3 million, an increase of 9.3% over 2003.
Increased revenue and continued cost controls resulted in solid efficiency
ratios of 50.43% for fourth quarter 2004 and 50.11% for full year 2004.
Credit Quality
First Midwest's already strong credit quality improved during the fourth
quarter of 2004 on both a linked-quarter and a year-over-year basis.
Nonperforming assets totaled $22.9 million as of December 31, 2004, down 14.4%
from $26.8 million as of September 30, 2004 and down 20.6% from $28.9 million
as of December 31, 2003. As of December 31, 2004, the ratio of nonperforming
assets to total loans plus foreclosed real estate was 0.55%, down 22.5% from
0.71% as of December 31, 2003.
At December 31, 2004, nonperforming loans were 0.46% of total loans.
Nonperforming loans decreased from 0.53% as of September 30, 2004 and 0.57% at
December 31, 2003. Loans past due 90 days and still accruing totaled
$2.7 million at December 31, 2004, a decrease of 14.5% from $3.1 million as of
September 30, 2004 and a decrease of 21.5% from $3.4 million as of December
31, 2003.
Net charge-offs for the fourth quarter and full year of 2004 were 0.51%
and 0.30% of average loans as compared to 0.35% and 0.28% for fourth quarter
and full year of 2003, respectively. Higher charge-offs in the fourth quarter
of 2004 were largely the result of previously disclosed remediation efforts in
the loan portfolio acquired from CoVest. The ratio of the reserve for loan
losses to total loans at the close of 2004 was 1.37% as compared to 1.39% at
the end of 2003, as provisions for loan losses for both the fourth quarter and
full year of 2004 fully covered net charge-offs. The reserve for loan losses
at December 31, 2004 represented 295% of nonperforming loans as compared to
245% at year-end 2003.
Capital Management
First Midwest's capital position continues to exceed all of the regulatory
minimum levels to be considered a "well capitalized institution" by the
Federal Reserve. As of December 31, 2004, First Midwest's Total Risk Based
Capital ratio was 11.55%, and its Tier 1 Risk Based Capital ratio was 10.47%.
These improved ratios compare to the Total Risk Based Capital of 11.41% and
Tier 1 Risk Based Capital of 10.29%, as of December 31, 2003. First Midwest's
Tier 1 Leverage Ratio of 8.16% as of December 31, 2004 decreased from 8.49% as
of December 31, 2003, primarily due to the increase in average total assets as
a result of the acquisition of CoVest. First Midwest's tangible capital
ratio, which represents the ratio of stockholders' equity to total assets
excluding intangible assets, improved from 6.22% as of December 31, 2003 to
6.43% as of December 31, 2004.
First Midwest declared a dividend of $0.24 per share in the fourth quarter
of 2004, a 9.1% increase from 2003's fourth quarter dividend of $0.22 per
share. During the fourth quarter of 2004, First Midwest also repurchased
450,708 shares of its common stock at an average price of $36.22 per share.
For the full year 2004, First Midwest repurchased 897,085 shares of common
stock. At year-end, 661,119 shares remained under First Midwest's existing
repurchase authorization.
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 67 offices located in 49 communities, primarily in
northeastern Illinois. First Midwest is the 2004 recipient of the Illinois
Bank Community Service Award and has been honored by Chicago magazine in its
September 2004 issue as one of the 25 best places to work in Chicagoland, the
only bank to receive that distinction.
Safe Harbor Statement
Safe Harbor Statement under the Private Securities Act of 1995: Statements
in this news release that are forward-looking statements are subject to
various risks and uncertainties concerning specific factors described in First
Midwest Bancorp's 2003 Form 10-K and other filings with the U.S. Securities
and Exchange Commission. Such information contained herein represents
management's best judgment as of the date hereof based on information
currently available. First Midwest does not intend to update this information
and disclaims any legal obligation to the contrary. Historical information is
not necessarily indicative of future performance.
Accompanying Financial Statements and Tables
Accompanying this press release is the following unaudited financial
information:
-- Operating Highlights, Balance Sheet Highlights and Stock Performance
Data (1 page)
-- Condensed Consolidated Statements of Condition (1 page)
-- Condensed Consolidated Statements of Income (1 page)
-- Selected Quarterly Data and 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 (totaling 3 pages)
are available through the "Investor Relations" section of First Midwest's
website at http://www.firstmidwest.com .
First Midwest Bancorp, Inc. Press Release Dated January 19, 2005
Operating Highlights Quarters Ended Years Ended
Unaudited December 31, December 31,
(Amounts in thousands except
per share data) 2004 2003 2004 2003
Net income $25,220 $24,199 $99,136 $92,778
Diluted earnings per share $0.54 $0.52 $2.12 $1.97
Return on average equity 18.57% 18.59% 18.68% 18.28%
Return on average assets 1.46% 1.54% 1.45% 1.50%
Net interest margin 3.94% 4.01% 3.91% 3.99%
Efficiency ratio 50.43% 45.66% 50.11% 48.32%
Balance Sheet Highlights
Unaudited
(Amounts in thousands except Dec. 31, Dec. 31,
per share data) 2004 2003
Total assets $6,863,381 $6,906,658
Total loans 4,135,278 4,059,782
Total deposits 4,905,378 4,815,108
Stockholders' equity 532,038 522,540
Book value per share $11.55 $11.22
Period end shares outstanding 46,065 46,581
Stock Performance Data Quarters Ended Years Ended
Unaudited December 31, December 31,
2004 2003 2004 2003
Market Price:
Quarter End $36.29 $32.43 $36.29 $32.43
High $38.30 $32.80 $38.30 $32.80
Low $33.70 $29.61 $31.13 $24.89
Quarter end price to
book value 3.1x 2.9x 3.1x 2.9x
Quarter end price to consensus
estimated 2004 earnings 17.1x N/A 17.1x N/A
Dividends declared per share $0.24 $0.22 $0.90 $0.79
First Midwest Bancorp, Inc. Press Release Dated January 19, 2005
Condensed Consolidated Statements of Condition
Unaudited(1) December 31,
(Amounts in thousands) 2004 2003
Assets
Cash and due from banks $119,880 $186,900
Funds sold and other short-term
investments 4,581 15,409
Securities available for sale 2,179,438 2,229,650
Securities held to maturity, at
amortized cost 64,576 67,446
Loans 4,135,278 4,059,782
Reserve for loan losses (56,718) (56,404)
Net loans 4,078,560 4,003,378
Premises, furniture and equipment 89,003 91,535
Investment in corporate owned life
insurance 151,359 146,421
Goodwill and other intangible assets 96,712 99,268
Accrued interest receivable and
other assets 79,272 66,651
Total assets $6,863,381 $6,906,658
Liabilities and Stockholders' Equity
Deposits $4,905,378 $4,815,108
Borrowed funds 1,218,332 1,371,672
Subordinated debt - trust preferred
securities 129,294 128,716
Accrued interest payable and other
liabilities 78,339 68,622
Total liabilities 6,331,343 6,384,118
Common stock 569 569
Additional paid-in capital 61,918 68,755
Retained earnings 707,435 650,128
Accumulated other comprehensive income 10,115 32,656
Treasury stock, at cost (247,999) (229,568)
Total stockholders' equity 532,038 522,540
Total liabilities and
stockholders' equity $6,863,381 $6,906,658
(1) While unaudited, the 2004 Condensed Consolidated Statements of
Condition has been prepared in accordance with accounting principles
generally accepted in the United States and is derived from the 2004
financial statements on which Ernst & Young LLP, First Midwest's
independent external auditor, will issue an audit opinion upon
completion of their audit procedures.
First Midwest Bancorp, Inc. Press Release Dated January 19, 2005
Condensed Consolidated Statements of Income
Unaudited(1)
(Amounts in thousands Quarters Ended Years Ended
except per December 31, December 31,
share data) 2004 2003 2004 2003
Interest Income Unaudited(1) Unaudited(1) Unaudited(2) Unaudited(2)
Loans $59,033 $48,439 $225,099 $200,013
Securities 22,580 23,085 89,610 89,972
Other 152 144 633 1,082
Total interest income 81,765 71,668 315,342 291,067
Interest Expense
Deposits 15,539 13,182 57,432 56,272
Borrowed funds 5,780 4,445 20,980 23,962
Subordinated debt - trust
preferred securities 2,053 1,079 8,066 1,079
Total interest expense 23,372 18,706 86,478 81,313
Net interest income 58,393 52,962 228,864 209,754
Provision for loan
losses 5,350 3,075 12,923 10,805
Net interest income
after provision for
loan losses 53,043 49,887 215,941 198,949
Noninterest Income
Service charges on
deposit accounts 7,682 7,269 28,837 27,924
Trust and investment
management fees 3,005 2,727 11,888 10,810
Other service charges,
commissions, and fees 3,739 3,752 15,147 16,187
Card-based fees 2,413 1,971 9,252 8,336
Corporate owned life
insurance income 1,195 1,354 4,939 5,059
Security gains (losses),
net 2,872 202 8,222 2,988
(Losses) on early
extinguishment of
debt - (3,018) (2,653) (6,025)
Other 3,170 5,162 3,749 8,891
Total noninterest
income 24,076 19,419 79,381 74,170
Noninterest Expense
Salaries and employee
benefits 25,291 21,241 92,171 84,284
Net occupancy expense 4,176 3,544 16,015 14,508
Equipment expense 2,242 2,106 8,847 7,979
Technology and
related costs 1,304 1,899 6,681 8,913
Other 9,784 8,319 39,624 33,768
Total noninterest
expense 42,797 37,109 163,338 149,452
Income before taxes 34,322 32,197 131,984 123,667
Income tax expense 9,102 7,998 32,848 30,889
Net Income $25,220 $24,199 $99,136 $92,778
Diluted Earnings
Per Share $0.54 $0.52 $2.12 $1.97
Dividends Declared
Per Share $0.24 $0.22 $0.90 $0.79
Weighted Average
Diluted Shares
Outstanding 46,664 46,944 46,860 46,982
(1) While unaudited, the Condensed Consolidated Statements of Income for
the quarters ended December 31, 2004 and 2003 have been prepared in
accordance with accounting principles generally accepted in the
United States and are derived from quarterly financial statements.
(2) While unaudited, the Condensed Consolidated Statements of Income for
the year ended December 31, 2004 has been prepared in accordance with
accounting principles generally accepted in the United States and is
derived from the 2004 financial statements on which Ernst & Young
LLP, First Midwest's independent external auditor, will issue an
audit opinion upon completion of their audit procedure.
First Midwest Bancorp, Inc. Press Release Dated January 19, 2005
Selected Quarterly Data
Unaudited
(Amounts in thousands
except per share
data) Years Ended Quarters Ended
12/31/ 12/31/ 12/31/ 09/30 6/30/ 3/31/ 12/31/
2004 03 2004 2004 2004 2004 03
Net interest
income $228,864 $209,754 $58,393 $57,534 $56,048 $56,889 $52,962
Provision
for loan
losses 12,923 10,805 5,350 3,240 2,405 1,928 3,075
Noninterest
income 79,381 74,170 24,076 18,813 19,107 17,385 19,419
Noninterest
expense 163,338 149,452 42,797 40,359 39,977 40,205 37,109
Net income 99,136 92,778 25,220 25,172 24,712 24,032 24,199
Diluted
earnings
per share $2.12 $1.97 $0.54 $0.54 $0.53 $0.51 $0.52
Return on
average
equity 18.68% 18.28% 18.57% 19.03% 19.17% 17.97% 18.59%
Return on
average
assets 1.45% 1.50% 1.46% 1.45% 1.44% 1.42% 1.54%
Net interest
margin 3.91% 3.99% 3.94% 3.90% 3.81% 3.97% 4.01%
Efficiency
ratio 50.11% 48.32% 50.43% 49.60% 49.89% 50.53% 45.66%
Period end
shares out-
standing 46,065 46,581 46,065 46,370 46,632 46,537 46,581
Book value
per share $11.55 $11.22 $11.55 $11.56 $10.87 $11.26 $11.22
Dividends
declared
per share $0.90 $0.79 $0.24 $0.22 $0.22 $0.22 $0.22
Asset Quality
Unaudited
(Amounts in thousands)
Years Ended Quarters Ended
12/31/ 12/31/ 12/31/ 9/30/ 6/30/ 3/31/ 12/31/
2004 2003 2004 2004 2004 2004 03
Nonaccrual
loans $19,197 $15,930 $19,197 $22,267 $24,621 $18,704 $15,930
Restructured
loans - 7,137 - - - - 7,137
Total Non-
performing
loans $19,197 $23,067 $19,197 $22,267 $24,621 $18,704 $23,067
Foreclosed
real
estate 3,736 5,812 3,736 4,528 4,602 4,779 5,812
Loans past
due 90 days
and still
accruing 2,658 3,384 2,658 3,108 4,160 6,977 3,384
Nonperforming
loans to
loans 0.46% 0.57% 0.46% 0.53% 0.59% 0.45% 0.57%
Nonperforming
assets to
loans plus
foreclosed
real
estate 0.55% 0.71% 0.55% 0.64% 0.70% 0.57% 0.71%
Reserve for
loan losses
to loans 1.37% 1.39% 1.37% 1.35% 1.36% 1.38% 1.39%
Reserve
for loan
losses to
nonperforming
loans 295% 245% 295% 255% 230% 303% 245%
Provision
for loan
losses $12,923 $10,805 $5,350 $3,240 $2,405 $1,928 $3,075
Net loan
charge-
offs 12,610 9,550 5,340 3,219 2,347 1,704 3,055
Net loan
charge-offs
to average
loans 0.30% 0.28% 0.51% 0.30% 0.23% 0.17% 0.35%
SOURCE First Midwest Bancorp, Inc.
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Related links:
http://www.firstmidwest.com
CONTACT:
Steven H. Shapiro, EVP, Corporate Secretary,
+1-630-875-7345, or Michael L. Scudder, EVP, Chief Financial
Officer, +1-630-875-7283, both of First Midwest Bancorp
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