4TH QUARTER 2002 HIGHLIGHTS:
-- EPS Increased 9.3% to $.47 vs. $.43 Last Year
-- ROAA of 1.49% vs. 1.47% Last Year
-- Continued Sound Asset Quality
-- Record Efficiency Ratio of 47.2%
-- Quarterly Cash Dividend Increased 11.8%
ITASCA, Ill., Jan. 22 /PRNewswire-FirstCall/ --
First Midwest Bancorp, Inc. (Nasdaq: FMBI) today reported net income for
fourth quarter ended December 31, 2002 increased to $22.5 million, or $.47 per
diluted share, as compared to 2001's like quarter of $21.3 million, or $.43
per diluted share, representing an increase of 9.3% on a per diluted share
basis. Performance for fourth quarter 2002 resulted in an annualized return
on average assets of 1.49% as compared to 1.47% for fourth quarter 2001 and an
annualized return on average equity of 17.9% as compared to 18.2% for fourth
quarter 2002. The quarter's earnings of $.47 per diluted share was consistent
with both First Midwest's guidance and First Call's consensus earnings
estimate.
For 2002, net income increased to a record $90.2 million, or $1.86 per
diluted share, as compared to 2001's $82.1 million, or $1.63 per diluted
share, representing an increase of 14.1% on a per diluted share basis.
Performance for 2002 resulted in an annualized return on average assets of
1.53% as compared to 1.43% for 2001 and an annualized return on average equity
of 18.8% as compared to 2001's 17.9%.
Net Interest Margin
Net interest income was $52.8 million for fourth quarter 2002 as compared
to $53.8 million for 2001's fourth quarter or a decrease of 2.0%. Net
interest margin for fourth quarter 2002 was 4.10%, down from 4.33% for fourth
quarter 2001 and 4.26% for third quarter 2002. Consistent with First
Midwest's expectations, the margin contraction from third quarter 2002
resulted primarily from lower earning asset rates due to the continued low
interest rate environment, management's steps taken during the year to
insulate net interest income against the potential for rising interest rates,
and the impact of refinance related prepayments on mortgage-backed securities.
This was partially offset by the Federal Reserve lowering the federal funds
rate by 50 basis points on November 6, 2002, which positively impacted margin
as interest bearing liabilities were able to be repriced more quickly than
interest bearing assets. The expectation of continued low interest rates is
likely to maintain pressure on interest margins going forward in 2003.
Loan Growth and Funding
Total loans at December 31, 2002 were 1% higher than December 31, 2001
with all loan categories experiencing growth except for 1-4 family real estate
and indirect lending. On a linked-quarter basis, total loans remained stable
as growth in commercial real estate and construction lending offset decreases
in 1-4 family real estate, direct consumer and indirect lending. Mindful of
the uncertain economy, First Midwest has remained steadfast in its focus on
both sound underwriting and profitable pricing.
Total average deposits for fourth quarter 2002 were essentially unchanged
from the prior year's like quarter and were down 1.3% on a linked-quarter
basis. Reflective of customer liquidity preferences and targeted sales
promotions, average balances maintained in demand, savings and Now accounts
were relatively stable on a linked-quarter basis while growing $266 million,
or 15.5%, from the prior year's like quarter. As compared to fourth quarter
2001, money market and time deposits decreased by $68 million and
$175 million, respectively, as pricing strategies encouraged customers
desiring shorter-term maturities to transfer balances to the targeted
transactional accounts (demand, savings and Now) just described.
Noninterest Income and Expense
Excluding net securities gains, total noninterest income for fourth
quarter 2002 decreased by 1.4% from 2001's like quarter while full year 2002
decreased by 2.3% from 2001. On a linked-quarter basis, noninterest income
increased by 1.6% evidencing continued improvement in service charges on
deposit accounts and stabilizing trust income while offsetting lower income
from corporate owned life insurance.
Total noninterest expenses for fourth quarter 2002 decreased 2.6% from
2001's fourth quarter while such expenses for full year 2002 increased 1.9%
over 2001. The elimination of goodwill amortization expense (resulting from
the implementation of Financial Accounting Standard No. 142 effective January
1, 2002) reduced noninterest expense for fourth quarter 2002 and full year
2002 by $.5 million and $2.2 million, respectively. Factoring out the
elimination of goodwill amortization expense, total noninterest expense for
fourth quarter 2002 decreased by 1.2% from 2001's like period while such
expenses for full year 2002 increased 3.4% over 2001.
The combination of top line revenue performance and continued cost control
resulted in record efficiency ratios for both fourth quarter 2002 and full
year 2002 of 47.2% and 48.2%, respectively, continuing the strong performance
of this key ratio.
Credit Quality
By most credit measures, the level of overall credit quality as of year-
end 2002 equaled or exceeded that of the last five years despite the
continuing economic slowdown and the well-publicized credit problems within
the industry. Nonperforming loans at December 31, 2002 represented .37% of
loans, improved from .50% at year-end 2001 and stood at the lowest year-end
level in the last five years. Further, nonperforming assets totaled
$18 million at December 31, 2002 as compared to $20 million at year end 2001
and also represented the lowest such year-end level in the last five years.
Additionally, loans past due 90 days and still accruing totaled $3.3 million
at December 31, 2002 as compared to $5.8 million at year-end 2001,
representing the lowest quarter-end level in the last eight years.
Net charge-offs for fourth quarter and full year 2002 were .49% and .45%
of average loans, respectively, as compared to .73% and .49% for fourth
quarter and full year 2001, respectively. Provisions for loan losses for both
fourth quarter and year 2002 fully covered net charge-offs resulting in the
ratio of the reserve for loan losses to total loans at December 31, 2002 being
maintained at 1.41% and approximating the level of the last nine quarters.
Importantly, the reserve for loan losses at December 31, 2002 represented 383%
of nonperforming loans as compared to 283% at year-end 2001, again,
representing the highest year-end level in the last five years.
First Midwest continues to have virtually no credit exposure to such high
profile sectors as energy, cable, telecommunication and airlines nor
participation in shared national credits or syndicated loans.
Capital Management
First Midwest continued to repurchase its common stock during fourth
quarter 2002 with approximately 417,000 shares being repurchased at an average
price of approximately $27.43 per share. For the year 2002 approximately
1,866,000 shares were repurchased at an average price of $27.93 per share. As
with all such share repurchases to date, the repurchases of 2002 were effected
utilizing cash on hand. As of December 31, 2002, approximately 2.4 million
shares remained under First Midwest's existing repurchase authorization.
As of December 31, 2002 First Midwest's Total Risk Based Capital and Tier
1 Risk Based Capital ratios were 11.03% and 9.93%, respectively, exceeding the
minimum "well capitalized" levels for regulatory purposes of 10% and 6%,
respectively. First Midwest's Tier 1 Leverage Ratio as of such date was 7.32%
again exceeding the regulatory minimum range of 3% - 5% required to be
considered a "well capitalized" institution. As of December 31, 2002, First
Midwest had capital of approximately $45.1 million greater than the most
restrictive regulatory minimum capital level required to be considered a "well
capitalized" institution.
Dividend Increase
On November 20, 2002, First Midwest increased the quarterly cash dividend
from $.17 to $.19 per share, an increase of 11.8%. This action represented
the eleventh dividend increase of the last ten years and the 81st consecutive
quarterly dividend distribution since First Midwest's formation in 1983.
Based on the December 31, 2002 closing price of $26.71 per share, the current
dividend rate represents an annual yield of 2.85%.
Outlook for 2003
First Midwest expects that the year 2003 will prove to be challenging
given the low absolute level of interest rates, uncertain economic and market
conditions and investor concerns regarding the pace and timing of economic
recovery. Nonetheless, First Midwest is guardedly optimistic about its 2003
prospects and is comfortable with the mid to high single digit growth in
earnings per diluted share implicit in the current 2003 analyst consensus
estimate. This guidance is based upon First Midwest's current assessment of
general economic and market conditions and is qualified by existent
uncertainties, consequences and unfolding events as well as unknown factors
that could negatively affect performance.
About the Company
With assets of approximately $6 billion, First Midwest is the largest
independent and one of the overall largest banking companies in the highly
attractive suburban Chicago banking market. As the premier independent
suburban Chicago banking company, First Midwest provides commercial banking,
trust, investment management and related financial services to a broad array
of customers through some 70 offices located in more than 40 communities
primarily in northern Illinois.
Safe Harbor Statement
Statements made in this Press Release which are not purely historical are
forward-looking statements with respect to the goals, plan objectives,
intentions, expectations, financial condition, results of operations, future
performance and business of First Midwest, including, without limitation, (i)
loan and deposit growth, net interest income and margin, wholesale funding
sources, provision and reserve for loan losses, nonperforming loan levels and
net charge-offs, noninterest income and expenses, diluted earnings per share
growth rates for 2002, and dividends to shareholders, and (ii) statements
preceded by, followed by or that include the words "may", "would", "could",
"should", "can", "will", "expects", "projects", "anticipates", "believes",
"estimates", "plans", "intends", "targets" or similar expressions.
Forward-looking statements involve inherent risks and uncertainties, and
important factors (many of which are beyond First Midwest's control) that
could cause actual results to differ materially from those set forth in the
forward-looking statements, including the following, in addition to those
contained in First Midwest's reports on file with the Securities and Exchange
Commission: general economic or industry conditions, nationally and/or in the
communities in which First Midwest conducts business, changes in the interest
rate environment, conditions of the securities markets, prepayment speeds,
deposit flows, cost of funds, demand for loan products, demand for financial
services, competition, changes in the quality or composition of First
Midwest's loan and investment portfolios, legislation or regulatory
requirements, changes in accounting principals, policies or guidelines,
financial or political instability, acts of war or terrorism, other economic,
competitive, governmental, regulatory and technical factors affecting First
Midwest's operations, products, services and prices.
Accordingly, results actually achieved may differ materially from expected
results in these statements. Forward-looking statements speak only as of the
date they are made. First Midwest does not undertake, and specifically
disclaims, any obligation to update any forward-looking statements to reflect
events or circumstances occurring after the date of such statements.
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 22, 2003
Operating Highlights Quarters Ended Years Ended
Unaudited December 31, December 31,
(Amounts in thousands except per
share data) 2002 2001 2002 2001
Net income . . . . . . . . . . . . . $22,466 $21,274 $90,150 $82,138
Diluted earnings per share . . . . . $0.47 $0.43 $1.86 $1.63
Return on average equity . . . . . . 17.92% 18.24% 18.82% 17.89%
Return on average assets . . . . . . 1.49% 1.47% 1.53% 1.43%
Net interest margin . . . . . . . . 4.10% 4.33% 4.28% 4.10%
Efficiency ratio . . . . . . . . . . 47.24% 48.08% 48.20% 49.65%
Balance Sheet Highlights
Unaudited
(Amounts in thousands except per
share data) Dec. 31, 2002 Dec. 31, 2001
Total assets . . . . . . . . . . . $5,980,533 $5,667,919
Total loans . . . . . . . . . . . 3,406,846 3,372,306
Total deposits . . . . . . . . . 4,172,954 4,193,921
Stockholders' equity . . . . . . 491,953 447,267
Book value per share . . . . . . $10.42 $9.18
Period end shares outstanding . . 47,206 48,725
Stock Performance Data Quarters Ended Years Ended
Unaudited December 31, December 31,
2002 2001 2002 2001
Market Price:
Quarter End . . . . . . . . . $26.71 $29.19 $26.71 $29.19
High . . . . . . . . . . . . $28.79 $29.81 $32.16 $29.81
Low . . . . . . . . . . . . .. . $23.80 $24.54 $23.34 $20.65
Period end price to book value . 2.6 x 3.2 x 2.6 x 3.2 x
Period end price to:
2002 earnings . . . . . . . . . 14.4 x N/A 14.4 x N/A
Consensus estimated 2003 earnings
. . . . . . . . . . . . . . . . 13.2 x N/A 13.2 x N/A
Dividends declared per share . . . $0.19 $0.17 $0.70 $0.65
First Midwest Bancorp, Inc. Press Release Dated January 22, 2003
Condensed Consolidated Statements of Condition
December 31,
(Amounts in thousands) 2002 2001
Assets Unaudited(A) Audited
Cash and due from banks . . . . . . $195,153 $155,822
Funds sold and other short-term
investments . . . . . . . . . . . 30,266 19,574
Securities available for sale . . . 1,986,186 1,771,607
Securities held to maturity, at
amortized cost . . . . . . . . . . 105,413 89,227
Loans . . . . . . . . . . . . . . . 3,406,846 3,372,306
Reserve for loan losses . . . . . . (47,929) (47,745)
Net loans . . . . . . . . . . . . 3,358,917 3,324,561
Premises, furniture and equipment . 81,627 77,172
Investment in corporate owned life
insurance . . . . . . . . . . . . 141,362 135,280
Accrued interest receivable and
other assets . . . . . . . . . . . 81,609 94,676
Total assets . . . . . . . . . . $5,980,533 $5,667,919
Liabilities and Stockholders' Equity
Deposits . . . . . . . . . . . . . . $4,172,954 $4,193,921
Borrowed funds . . . . . . . . . . . 1,237,408 971,851
Accrued interest payable and other
liabilities . . . . . . . . . . . . 78,218 54,880
Total liabilities . . . . . . . . 5,488,580 5,220,652
Common stock . . . . . . . . . . . . 569 569
Additional paid-in capital . . . . . 71,020 74,961
Retained earnings . . . . . . . . . 594,192 537,600
Accumulated other comprehensive
income . . . . . . . . . . . . . . 39,365 5,265
Treasury stock, at cost . . . . . . (213,193) (171,128)
Total stockholders' equity . . . . 491,953 447,267
Total liabilities and
stockholders' equity . . . . . . $5,980,533 $5,667,919
(A) While unaudited, the 2002 Condensed Consolidated Statement of
Condition has been prepared in accordance with accounting principles
generally accepted in the United States and is derived from the 2002
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 22, 2003
Condensed Consolidated Statements
of Income Quarters Ended Years Ended
December 31, December 31,
(Amounts in thousands except per
share data) 2002 2001 2002 2001
Interest Income Unaudited Unaudited Unaudited Audited
(A) (A) (B)
Loans . . . . . . . . . . . . . . $53,528 $61,407 $223,393 $265,191
Securities . . . . . . . . . . . 24,427 26,388 105,454 119,009
Other . . . . . . . . . . . . . . 266 269 817 1,018
Total interest income . . . . . 78,221 88,064 329,664 385,218
Interest Expense
Deposits . . . . . . . . . . . . 17,685 26,384 81,616 134,497
Borrowed funds . . . . . . . . . 7,783 7,832 29,294 46,341
Total interest expense . . . . 25,468 34,216 110,910 180,838
Net interest income . . . . . . 52,753 53,848 218,754 204,380
Provision for Loan Losses . . . . 4,235 6,313 15,410 19,084
Net interest income after
provision for loan losses . . 48,518 47,535 203,344 185,296
Noninterest Income
Service charges on deposit accounts 6,948 6,505 25,362 24,148
Trust and investment management
fees . . . . . . . . . . . . . . 2,507 2,535 10,309 10,445
Other service charges, commissions,
and fees . . . . . . . . . . . . 4,767 4,652 18,019 18,471
Corporate owned life insurance
income . . . . . . . . . . . . . 1,460 1,968 6,728 8,190
Securities gains (losses), net . 427 33 460 790
Other . . . . . . . . . . . . . 1,469 1,740 6,113 6,822
Total noninterest income . . . 17,578 17,433 66,991 68,866
Noninterest Expense
Salaries and employee benefits . 19,833 19,726 80,626 76,780
Occupancy expenses . . . . . . . 3,503 2,961 14,298 14,353
Equipment expenses . . . . . . . 1,959 1,929 7,769 7,644
Technology and related costs . . 2,331 2,493 9,796 10,186
Other . . . . . . . . . . . . . . 8,070 9,551 35,563 36,393
Total noninterest expense . . . 35,696 36,660 148,052 145,356
Income before taxes . . . . . . . 30,400 28,308 122,283 108,806
Income tax expense . . . . . . . 7,934 7,034 32,133 26,668
Net Income . . . . . . . . . . $22,466 $21,274 $90,150 $82,138
Diluted Earnings Per Share . . $0.47 $0.43 $1.86 $1.63
Dividends Declared Per Share . $0.19 $0.17 $0.70 $0.65
Weighted Average Diluted Shares
Outstanding . . . . . . . . . 47,714 49,233 48,415 50,401
(A) While unaudited, the Condensed Consolidated Statements of Income for
the quarters ended December 31, 2002 and 2001 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 Statement of Income for
the year ended December 31, 2002 has been prepared in accordance with
accounting principles generally accepted in the United States and is
derived from the 2002 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.
Selected Quarterly Data
Unaudited Years Ended
(Amounts in thousands except per
share data) 2002 2001
Net interest income . . . . . . . . $218,754 $204,380
Provision for loan losses . . . . . 15,410 19,084
Noninterest income . . . . . . . . 66,991 68,866
Noninterest expense . . . . . . . . 148,052 145,356
Net income . . . . . . . . . . . . 90,150 82,138
Diluted earnings per share . . . . $1.86 $1.63
Return on average equity . . . . . 18.82% 17.89%
Return on average assets . . . . . 1.53% 1.43%
Net interest margin . . . . . . . . 4.28% 4.10%
Efficiency ratio . . . . . . . . . 48.20% 49.65%
Period end shares outstanding . . . 47,206 48,725
Book value per share . . . . . . . $10.42 $9.18
Dividends per share . . . . . . . . $0.70 $0.65
First Midwest Bancorp, Inc. Press Release Dated January 22, 2003
Selected Quarterly Data
Unaudited Quarters Ended
(Amounts in thousands
except per share data) 12/31/02 09/30/02 06/30/02 03/31/02 12/31/01
Net interest income . . . $52,753 $55,458 $56,296 $54,247 $53,848
Provision for loan losses 4,235 3,020 3,100 5,055 6,313
Noninterest income . . . . 17,578 16,889 16,382 16,142 17,433
Noninterest expense . . . 35,696 38,106 38,614 35,636 36,660
Net income . . . . . . . . 22,466 22,679 22,934 22,071 21,274
Diluted earnings per share $0.47 $0.47 $0.47 $0.45 $0.43
Return on average equity . 17.92% 18.46% 19.60% 19.39% 18.24%
Return on average assets . 1.49% 1.50% 1.57% 1.55% 1.47%
Net interest margin . . . 4.10% 4.26% 4.43% 4.32% 4.33%
Efficiency ratio . . . . . 47.24% 49.08% 49.15% 47.26% 48.08%
Period end shares
outstanding . . . . . . . 47,206 47,616 48,165 48,534 48,725
Book value per share . . . $10.42 $10.44 $9.91 $9.21 $9.18
Dividends per share . . . $0.19 $0.17 $0.17 $0.17 $0.17
Asset Quality
Unaudited Years Ended
(Amounts in thousands) 2002 2001
Nonperforming loans . . . . . . . . . . . . $12,525 $16,847
Foreclosed real estate . . . . . . . . . . . 5,496 3,630
Loans past due 90 days and still accruing . 3,307 5,783
Nonperforming loans to loans . . . . . . . . 0.37% 0.50%
Nonperforming assets to loans
plus foreclosed real estate . . . . . . . . . 0.53% 0.61%
Reserve for loan losses to loans . . . . . . . 1.41% 1.42%
Reserve for loan losses to nonperforming loans . 383% 283%
Provision for loan losses . . . . . . . . . . . $15,410 $19,084
Net loan charge-offs . . . . . . . . . . . . . 15,226 16,432
Net loan charge-offs to average loans . . . . . 0.45% 0.49%
Asset Quality
Unaudited Quarters Ended
(Amounts in
thousands) 12/31/02 09/30/02 06/30/02 03/31/02 12/31/01
Nonperforming loans . $12,525 $9,988 $11,879 $15,277 $16,847
Foreclosed real estate 5,496 2,972 4,582 4,289 3,630
Loans past due 90 days
and still accruing . 3,307 9,820 3,564 4,739 5,783
Nonperforming loans
to loans . . . . . . 0.37% 0.29% 0.35% 0.45% 0.50%
Nonperforming assets
to loans plus
foreclosed real estate 0.53% 0.38% 0.48% 0.58% 0.61%
Reserve for loan losses
to loans . . . . . . . 1.41% 1.41% 1.41% 1.42% 1.42%
Reserve for loan losses
to nonperforming loans . 383% 480% 403% 313% 283%
Provision for loan
losses $4,235 $3,020 $3,100 $5,055 $6,313
Net loan charge-offs . 4,225 2,919 3,056 5,026 6,313
Net loan charge-offs
to average loans . . 0.49% 0.34% 0.36% 0.61% 0.73%
SOURCE First Midwest Bancorp, Inc.
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Related links:
http://www.firstmidwest.com
Company News On-Call:
http://www.prnewswire.com/comp/122621.html
CONTACT:
Michael L. Scudder, EVP, CFO,
+1-630-875-7283, or James M. Roolf, Investor Relations,
+1-630-875-7463, both of First Midwest Bancorp, Inc.
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