Full Year Earnings Guidance Revised Upward
1st QUARTER 2005 HIGHLIGHTS:
-- Strong Profitability: ROE of 19.1%; ROA 1.49%
-- Improved Earnings: EPS Up 7.8%
-- Continuing Commercial Loan Demand: Up 8.7% Year To Year
-- Solid Deposit Growth: Demand Up 6.3%; Time Up 9.1% Year To Year
-- Strong Credit Quality: 2 1/2 Year Low in Nonperforming Asset Levels
-- Continued Strong Efficiency: 49.9%
ITASCA, Ill., April 20 /PRNewswire-FirstCall/ -- First Midwest Bancorp,
Inc. ("First Midwest") (Nasdaq: FMBI), the premier relationship-based banking
franchise in the wealthy and growing suburbs of Chicago, today reported that
its net income for first quarter ended March 31, 2005 increased by 7.8% on a
per diluted share basis to $25.2 million, or $0.55 per diluted share, from
2004's first quarter of $24.0 million, or $0.51 per diluted share. Solid
first quarter 2005 performance resulted in an annualized return on average
assets of 1.49%, as compared to 1.42% for first quarter 2004, and an
annualized return on average equity of 19.1%, as compared to 18.0% for first
quarter 2004.
"We are off to a great start to 2005," stated First Midwest President and
Chief Executive Officer John O'Meara. "Sales fundamentals are strong and
momentum is building across all of our businesses. We are particularly
pleased with loan demand and deposit sales, which continue to show strength.
We believe these solid results are the product of our continued focus on the
customer and the execution of our relationship-based selling approach."
Earnings Guidance Revised Upward
"After a thorough review of alternate interest rate scenarios, we expect
net interest margin expansion compared with our budgeted expectations,"
O'Meara said. "This is largely the result of higher yields on the securities
portfolio, improved returns on floating rate assets and a lag in repricing
transactional and time deposits. Improvement in fee revenues stemming from
new initiatives coupled with ongoing expense controls should also be a
positive factor. Finally, credit costs should be lower than initially
budgeted providing additional earnings lift. These three combined factors
have driven our decision to increase our guidance of per share diluted
earnings for full year performance to $2.26 to $2.36."
Net Interest Margin
First Midwest's net interest income was $57.1 million for first quarter
2005, up slightly from $56.9 million for 2004's first quarter. Net interest
margin for first quarter 2005 was 3.87%, down from 3.97% for first quarter
2004 and 3.94% for fourth quarter 2004, reflecting the negative impact of
comparatively higher short-term interest rates and relatively stable longer-
term rates. The 7 basis point decline from fourth quarter 2004, reflected in
large part the delayed benefit of higher longer-term interest rates on
security portfolio yields, as these increases occurred late in first quarter
2005. Given the expectation for continued, measured Federal Reserve
tightening and the factors previously mentioned, full year margins for 2005
are anticipated to vary within the range of 3.85% to 3.95%.
Loan Growth and Funding
Outstanding loans as of March 31, 2005 totaled $4.2 billion, in contrast
to $4.1 billion at March 31, 2004 and at December 31, 2004. These period-to-
period loan comparisons are influenced by First Midwest's decision in 2004 to
cease its indirect automobile lending and to securitize certain 1-4 family
real estate loans. Excluding these loan categories, total loans as of March
31, 2005 increased $178.8 million, or 4.9%, as compared to 2004's first
quarter. As of March 31, 2005, commercial loans totaled $1.2 billion,
increasing 8.7% in comparison to first quarter 2004. Commercial loans
continued their trend of the past 5 quarters, increasing 4.4% on an annualized
basis from December 31, 2004. Based upon robust deal flow and strong
pipelines, First Midwest remains optimistic about the prospects for
commercial, commercial real estate, and real estate construction loan growth
for the balance of 2005.
Average deposits for first quarter 2005 totaled $4.9 billion, reflecting
growth in both demand and time deposit balances. In comparison to first
quarter 2004, average demand balances increased 6.3% and time deposit balances
grew 9.1%.
Noninterest Income and Expense
First Midwest's total noninterest income for first quarter 2005 was
$20.1 million, up 15.9% as compared to $17.4 million in first quarter 2004.
Excluding security gains and debt extinguishment losses, noninterest income
increased 5.4% in comparison to first quarter 2004. This improvement reflects
improved performance in all revenue categories, except corporate owned life
insurance and other income, which were down slightly. In first quarter 2005,
security gains totaled $2.6 million, while first quarter 2004 performance
included $1.9 million in security gains and $1.2 million in losses on the
early extinguishment of debt.
Total noninterest expense for first quarter 2005 was $39.8 million, down
slightly from $40.2 million in first quarter 2004. The quarter's performance
reflects comparatively lower equipment, technology-related and other costs
offset by higher employee benefits, professional services and occupancy
expenses. First Midwest's efficiency ratio was 49.9% for first quarter 2005,
improved from 50.5% for first quarter 2004.
Credit Quality
First Midwest's level of overall credit quality improved during first
quarter 2005, with nonperforming assets decreasing by 14.2% to $19.7 million
from $22.9 million at year-end 2004. At March 31, 2005, nonperforming assets
represented 0.47% of loans plus foreclosed real estate, the lowest such level
in the last 2 1/2 years. Net charge-offs for first quarter 2005 improved to
0.36% of average loans, a 29.4% reduction from 0.51% for fourth quarter 2004.
As of March 31, 2005, the reserve for loan losses stood at 343% of
nonperforming loans, reflecting the highest coverage ratio of the past eight
quarters.
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 March 31, 2005, First Midwest's Total Risk Based
Capital was 11.53%, compared to 11.52% as of December 31, 2004. Its Tier 1
Risk Based Capital ratio was 10.47%, up from 10.45% as of December 31, 2004.
First Midwest's tangible capital ratio, which represents the ratio of
stockholders' equity to total assets excluding intangible assets, stood at
6.21%, down from 6.43% as of December 31, 2004, partly reflecting the combined
impact of asset growth and changes in the unrealized market value of
securities. First Midwest continued to repurchase its common stock during
first quarter 2005, acquiring 365,473 shares at an average price of
approximately $34.20 per share funded by cash on hand. As of March 31, 2005,
approximately 296,000 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 was honored by Chicago magazine in its
September, 2004 issue as one of the 25 best places to work in Chicago.
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 2004 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 April 20, 2005
Operating Highlights Quarters Ended
Unaudited March 31,
(Amounts in thousands except per share data) 2005 2004
Net income $25,207 $24,032
Diluted earnings per share $0.55 $0.51
Return on average equity 19.14% 17.97%
Return on average assets 1.49% 1.42%
Net interest margin 3.87% 3.97%
Efficiency ratio 49.88% 50.53%
Balance Sheet Highlights
Unaudited
(Amounts in thousands except per
share data) Mar. 31, 2005 Mar. 31, 2004
Total assets $6,910,482 $6,848,701
Total loans 4,153,728 4,114,667
Total deposits 4,962,859 4,788,812
Stockholders' equity 519,163 524,129
Book value per share $11.35 $11.26
Period end shares outstanding 45,732 46,537
Stock Performance Data Quarters Ended
Unaudited March 31,
2005 2004
Market Price:
Quarter End $32.48 $34.22
High $36.75 $34.29
Low $31.92 $31.13
Quarter end price to book value 2.9 x 3.0 x
Quarter end price to consensus
estimated 2005 earnings 14.2 x N/A
Dividends declared per share $0.24 $0.22
First Midwest Bancorp, Inc. Press Release Dated April 20, 2005
Condensed Consolidated Statements of Condition
Unaudited(1) March 31,
(Amounts in thousands) 2005 2004
Assets
Cash and due from banks $125,150 $159,339
Funds sold and other short-term investments 6,083 13,190
Securities available for sale 2,170,720 2,139,140
Securities held to maturity, at
amortized cost 73,725 66,208
Loans 4,153,728 4,114,667
Reserve for loan losses (56,244) (56,628)
Net loans 4,097,484 4,058,039
Premises, furniture and equipment 88,695 92,021
Investment in corporate owned life
insurance 152,554 147,688
Goodwill and other intangible assets 96,180 98,190
Accrued interest receivable and
other assets 99,891 74,886
Total assets $6,910,482 $6,848,701
Liabilities and Stockholders' Equity
Deposits $4,962,859 $4,788,812
Borrowed funds 1,179,753 1,323,532
Subordinated debt - trust preferred
securities 129,042 129,785
Accrued interest payable and other
liabilities 119,665 82,443
Total liabilities 6,391,319 6,324,572
Common stock 569 569
Additional paid-in capital 61,757 67,812
Retained earnings 721,645 663,906
Accumulated other comprehensive
income (5,327) 22,909
Treasury stock, at cost (259,481) (231,067)
Total stockholders' equity 519,163 524,129
Total liabilities and
stockholders' equity $6,910,482 $6,848,701
(1) While unaudited, the Condensed Consolidated Statements of Condition
have been prepared in accordance with U.S. generally accepted
accounting principles and, as of March 31, 2004, are derived from
quarterly financial statements on which Ernst & Young LLP, First
Midwest's independent external auditor, has rendered a Quarterly
Review Report; Ernst & Young is currently in the process of completing
their Quarterly Review Report for the quarter ended March 31, 2005.
First Midwest Bancorp, Inc. Press Release Dated April 20, 2005
Condensed Consolidated Statements of Income Quarters Ended
Unaudited(1) March 31,
(Amounts in thousands except per share data) 2005 2004
Interest Income
Loans $59,615 $54,645
Securities 23,484 22,644
Other 56 100
Total interest income 83,155 77,389
Interest Expense
Deposits 17,160 13,669
Borrowed funds 6,823 4,817
Subordinated debt - trust preferred
securities 2,063 2,014
Total interest expense 26,046 20,500
Net interest income 57,109 56,889
Provision for loan losses 3,150 1,928
Net interest income after
provision for loan losses 53,959 54,961
Noninterest Income
Service charges on deposit accounts 6,693 6,241
Trust and investment management fees 3,129 2,962
Other service charges, commissions,
and fees 3,810 3,632
Card-based fees 2,347 2,146
Corporate owned life insurance income 1,195 1,267
Security gains (losses), net 2,561 1,939
(Losses) on early extinguishment of
debt - (1,240)
Other 411 438
Total noninterest income 20,146 17,385
Noninterest Expense
Salaries and employee benefits 22,853 22,116
Net occupancy expense 4,261 4,103
Equipment expense 2,095 2,242
Technology and related costs 1,381 2,035
Other 9,182 9,709
Total noninterest expense 39,772 40,205
Income before taxes 34,333 32,141
Income tax expense 9,126 8,109
Net Income $25,207 $24,032
Diluted Earnings Per Share $0.55 $0.51
Dividends Declared Per Share $0.24 $0.22
Weighted Average Diluted Shares
Outstanding 46,164 46,953
(1) While unaudited, the Condensed Consolidated Statements of Income have
been prepared in accordance with U.S. generally accepted accounting
principles and, for the quarter ended March 31, 2004, are derived
from quarterly financial statements on which Ernst & Young LLP, First
Midwest's independent external auditor, has rendered a Quarterly
Review Report; Ernst & Young is currently in the process of
completing their Quarterly Review Report for the quarter ended
March 31, 2005.
First Midwest Bancorp, Inc. Press Release Dated April 20, 2005
Selected Quarterly Data
Unaudited
(Amounts in thousands except Quarters Ended
per share data) 3/31/05 12/31/04 9/30/04 6/30/04 03/31/04
Net interest income $57,109 $58,393 $57,534 $56,048 $56,889
Provision for loan losses 3,150 5,350 3,240 2,405 1,928
Noninterest income 20,146 24,076 18,813 19,107 17,385
Noninterest expense 39,772 42,797 40,359 39,977 40,205
Net income 25,207 25,220 25,172 24,712 24,032
Diluted earnings per share $0.55 $0.54 $0.54 $0.53 $0.51
Return on average equity 19.14% 18.57% 19.03% 19.17% 17.97%
Return on average assets 1.49% 1.46% 1.45% 1.44% 1.42%
Net interest margin 3.87% 3.94% 3.90% 3.81% 3.97%
Efficiency ratio 49.88% 50.43% 49.60% 49.89% 50.53%
Period end shares outstanding 45,732 46,065 46,370 46,632 46,537
Book value per share $11.35 $11.55 $11.56 $10.87 $11.26
Dividends declared per share $0.24 $0.24 $0.22 $0.22 $0.22
Asset Quality
Unaudited Quarters Ended
(Amounts in thousands) 3/31/05 12/31/04 9/30/04 6/30/04 03/31/04
Nonaccrual loans $16,407 $19,197 $22,267 $24,621 $18,704
Foreclosed real estate 3,270 3,736 4,528 4,602 4,779
Loans past due 90 days and
still accruing 4,625 2,658 3,108 4,160 6,977
Nonperforming loans to loans 0.39% 0.46% 0.53% 0.59% 0.45%
Nonperforming assets to loans
plus foreclosed real estate 0.47% 0.55% 0.64% 0.70% 0.57%
Nonperforming assets plus loans
past due 90 days to loans plus
foreclosed real estate 0.58% 0.62% 0.71% 0.80% 0.74%
Reserve for loan losses
to loans 1.35% 1.37% 1.35% 1.36% 1.38%
Reserve for loan losses to
nonperforming loans 343% 295% 255% 230% 303%
Provision for loan losses $3,150 $5,350 $3,240 $2,405 $1,928
Net loan charge-offs 3,624 5,339 3,219 2,347 1,704
Net loan charge-offs to
average loans 0.36% 0.51% 0.30% 0.23% 0.17%
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, Inc.
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