2nd Quarter 2002 Highlights:
-- Record EPS of $.47 vs. $.40 Last Year & $.46 Consensus
-- Record ROAA of 1.57% vs. 1.41% Last Year
-- Record ROAE of 19.6% vs. 17.7% Last Year
-- Net Interest Margin of 4.43% vs. 4.04% Last Year
-- Efficiency Ratio of 49.2% vs. 50.5% Last Year
-- Nonperforming Loans Down 22% Linked-Quarter and at Record Low of .35%
of Gross Loans
ITASCA, Ill., July 17 /PRNewswire-FirstCall/ -- First Midwest Bancorp,
Inc. (Nasdaq: FMBI) today reported net income for second quarter ended
June 30, 2002 increased to a record $22.9 million, or $.47 per diluted share,
as compared to 2001's like quarter of $20.3 million, or $.40 per diluted
share, representing an increase of 17.5% on a diluted share basis.
Performance for the current quarter resulted in a record annualized return on
average assets of 1.57% as compared to 1.41% for the like quarter of 2001 and
a record annualized return on average equity of 19.6% as compared to 17.7% for
the 2001 quarter. The elimination of goodwill amortization expense resulting
from implementation of Financial Accounting Standard No. 142 (effective
January 1, 2002) added $.5 million (after tax), or $.01 per share, to second
quarter 2002 net income and diluted earnings per share, respectively, when
compared to the same quarter in 2001.
For the first six months of 2002, net income increased to a record
$45.0 million, or $.92 per diluted share, as compared to 2001's $39.6 million,
or $.77 per diluted share, representing an increase of 19.5% on a diluted per
share basis. Performance for the first six months of 2002 resulted in a
record annualized return on average assets of 1.56% as compared to 1.39% for
the like period of 2001 and an annualized return on average equity of 19.5% as
compared to 17.4% for the 2001 period.
Continued Strong Net Interest Margin
Net interest margin for second quarter 2002 was 4.43%, a 39 basis point
improvement over the 4.04% for 2001's like quarter. Stable interest rates,
growth in lower cost core transactional deposits, and continued re-pricing of
time deposits contributed to an 11 basis point improvement in second quarter
net interest margin as compared to the first quarter 2002. Concurrent with
this improvement, the Company continued to take steps during the quarter to
insulate net interest income against the potential for rising interest rates.
These steps included a reduction in liability sensitivity of the balance sheet
through the lengthening of liabilities (primarily time deposits and borrowed
funds), sales emphasis on variable rate loan products, and the move to a more
neutral balance sheet position through the reinvestment of investment
securities into shorter maturities. Although these strategies may dampen
somewhat the momentum of improvement in net interest margin experienced over
the last 4 quarters, the Company believes they will help stabilize future
performance in this key component of the income statement.
Loan Growth and Funding
Total average loans for second quarter 2002 were 1.7% higher than the
prior year's like quarter averages with all loan categories except 1-4 family
real estate and indirect consumer experiencing growth. Excluding 1-4 family
real estate, average loans for second quarter grew 3.8% from the prior year's
like quarter. On a linked-quarter basis, total average loans were stable with
increases in the commercial and real estate construction portfolios being
offset by decreases in 1-4 family real estate and indirect consumer loans.
While maintaining a strong focus on credit quality, loan growth continues to
improve.
Total average deposits for second quarter 2002 increased 1.4% from the
prior year's like quarter and 1.2% on a linked-quarter basis. Strategies to
optimize funding sources were successfully executed during the second quarter.
Thus, average balances maintained in lower cost demand, savings and now
accounts grew 4.2% on a linked-quarter basis and 15.7% from the prior year's
like quarter. Conversely, more costly time deposit balances remained stable
on a linked-quarter basis and declined by 11.3% on a prior year like quarter
basis as pricing strategies encouraged customers to accept longer term
maturities.
Noninterest Income and Expense
Total noninterest income for both second quarter 2002 and the first six
months of 2002, declined by approximately 5% as compared to the prior year's
like quarter and six month period.
For second quarter 2002 continued improvement in service charges on
deposit accounts was offset by declining trust fees, corporate owned life
insurance and other service charges, which are influenced by market
conditions. Other income for second quarter 2002 declined by approximately
26% as compared to the prior year's like quarter due to a one-time gain being
realized in 2001 from the sale of excess property. Corporate owned life
insurance income decreased by approximately 14% in second quarter 2002 as
compared to the prior year's like quarter and remained relatively stable on a
linked-quarter basis. The decrease in the 2002 second quarter was related to
the short duration of the assets underlying the insurance contracts being
negatively impacted by the decrease in market interest rates that occurred
during the third and fourth quarters of 2001, resulting in a lower level of
income being credited on the life insurance assets.
Factoring out the 2001 goodwill amortization expense referred to
previously, total noninterest expense for second quarter 2002 was 6.7% above
the prior year's like quarter with the first six months of 2002 being 5.0%
higher as compared to 2001. Salaries and benefits increased by approximately
6% in second quarter 2002 over 2001's like quarter due primarily to general
salary increases and higher healthcare insurance costs. Other expenses
increased by 9.8% in second quarter 2002 over 2001's like quarter due to
nonrecurring expenses related to foreclosed asset remediation, consulting fees
relative to customer retention initiatives, and the timing of various seasonal
and sundry expenses with the same being offset by decreases in occupancy
costs.
As a result of top line revenue growth from net interest income, the
efficiency ratio for the second quarter 2002 was 49.2% as compared to 50.5%
for 2001's like quarter and 49.7% for full year 2001.
Credit Quality
Reflective of a significant Company focus on credit quality and
underwriting standards, nonperforming assets (nonperforming loans plus
foreclosed assets) declined for the third consecutive quarter. In second
quarter 2002, nonperforming loans dropped 22% on a linked-quarter basis and
42% as compared to the prior year like quarter. Nonperforming loans declined
at June 30, 2002 to .35% of loans from .50% at year-end 2001 and to .61% at
the end of second quarter 2001. Reflecting further credit quality
improvement, loans 90 days or more past due and still accruing decreased by
$1.2 million or 24.8% on a linked-quarter basis.
Net charge-offs for second quarter 2002 were .36% of average loans as
compared to .34% for the 2001 like quarter and improved from .61% on a linked-
quarter basis. Provisions for loan losses fully covered net charge-offs for
second quarter 2002, resulting in the ratio of the reserve for loan losses to
total loans at quarter-end being maintained at 1.41% as compared to 1.38% for
the prior year like quarter.
As a consequence of the significant improvement in credit quality, the
reserve for loan losses at June 30, 2002 represented 403% of nonperforming
loans as compared to 228% at the end of 2001's second quarter and 283% at
year-end 2001.
Dividends, Share Repurchases and Capital Management
During second quarter 2002 First Midwest paid a dividend of $.17 per share
representing the 78th consecutive quarterly dividend paid by the Company since
its formation in 1983. Based on the July 15, 2002 closing price of $26.83 per
share, the current dividend rate represents an annual yield of 2.53%.
Dividends paid by First Midwest in 2001 and each of the four preceding years
have been determined to be exempt from Illinois income tax. Subject to change
in current Illinois law, it is anticipated that dividends paid by First
Midwest in 2002 will likewise be determined to be exempt from Illinois income
tax.
The Company continued to repurchase its common stock during second quarter
2002 with approximately 500,000 shares being repurchased at an average price
of approximately $28.86 per share; for the six months of 2002 approximately
900,000 shares have been repurchased at an average price of $28.66 per share.
All such share repurchases were made utilizing excess cash on hand, and at
such date the Parent Company continued to have no short or long-term debt. As
of June 30, 2002 approximately 1.1 million shares remained under the Company's
current 3.1 million share repurchase authorization.
As of June 30, 2002 the Company's Total Risk Based Capital and Tier 1 Risk
Based Capital ratios were 11.10% and 9.99%, respectively, compared with the
minimum "well capitalized" levels for regulatory purposes of 10% and 6%,
respectively. The Company's Tier 1 Leverage Ratio as of such date was 7.44%
and exceeded the regulatory minimum range of 3% - 5% required to be considered
a "well capitalized" institution. As of June 30, 2002 First Midwest had
capital of approximately $47.5 million in excess of the most restrictive
regulatory minimum capital level required to be considered a "well
capitalized" institution.
Outlook for Balance of 2002
The Company remains optimistic about its 2002 prospects even as
significant economic uncertainties continue and the market turmoil of recent
weeks unfolds. Given the strong earnings performance of the first and second
quarters, the Company is comfortable with diluted earnings per share consensus
estimates of $.47 for both third and fourth quarter 2002 resulting in diluted
earnings per share of $1.86 for full year 2002. The $1.86 guidance would
result in diluted earnings per share growth of 14% over 2001 and would exceed
the full year 2002 consensus estimate of $1.83 and its implied growth of 12%.
(A June 2002 research note of a leading brokerage specializing in bank stocks
reported that First Midwest has met or exceeded consensus earnings estimates
19 of the last 20 quarters (95% of the time) through March 31, 2002.) This
guidance 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 69 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, and diluted earnings per
share growth rates for 2002, and (ii) statements preceded by, followed by or
that include the words "may", "would", "could", "should", "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, legislation or regulatory requirements, conditions of the
securities markets, 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, 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 July 17, 2002
Operating Highlights Quarters Ended Six Months Ended
Unaudited June 30, June 30,
(Amounts in thousands except per
share data) 2002 2001 2002 2001
Net income $22,934 $20,291 $45,005 $39,615
Diluted earnings per share $0.47 $0.40 $0.92 $0.77
Return on average equity 19.60% 17.65% 19.50% 17.36%
Return on average assets 1.57% 1.41% 1.56% 1.39%
Net interest margin 4.43% 4.04% 4.38% 3.91%
Efficiency ratio 49.15% 50.46% 48.22% 50.89%
Balance Sheet Highlights
Unaudited
(Amounts in thousands except per
share data) June 30, 2002 June 30, 2001
Total assets $5,910,959 $5,773,049
Total loans 3,392,481 3,372,754
Total deposits 4,224,840 4,162,607
Stockholders' equity 477,162 452,713
Book value per share $9.91 $9.03
Period end shares outstanding 48,165 50,112
Stock Performance Data Quarters Ended Six Months Ended
Unaudited June 30, June 30,
2002 2001 2002 2001
Market Price:
Quarter End $27.78 $24.68 $27.78 $24.68
High $32.16 $24.68 $32.16 $24.68
Low $26.24 $22.01 $26.24 $20.65
Quarter end price to book value 2.8 x 2.7 x 2.8 x 2.7 x
Quarter end price to consensus
estimated 2002 earnings 15.2 x N/A 15.2 x N/A
Dividends declared per share $0.17 $0.16 $0.34 $0.32
First Midwest Bancorp, Inc. Press Release Dated July 17, 2002
Condensed Consolidated Statements of Condition
Unaudited(A) June 30,
(Amounts in thousands) 2002 2001
Assets
Cash and due from banks $184,792 $181,709
Funds sold and other short-term
investments 14,529 23,623
Securities available for sale 1,968,647 1,843,645
Securities held to maturity, at
amortized cost 95,138 96,810
Loans 3,392,481 3,372,754
Reserve for loan losses (47,818) (46,705)
Net loans 3,344,663 3,326,049
Premises, furniture and equipment 80,652 79,923
Investment in corporate owned life
insurance 138,287 131,576
Accrued interest receivable and
other assets 84,251 89,714
Total assets $5,910,959 $5,773,049
Liabilities and Stockholders' Equity
Deposits $4,224,840 $4,162,607
Borrowed funds 1,145,351 1,103,410
Accrued interest payable and other
liabilities 63,606 54,319
Total liabilities 5,433,797 5,320,336
Common stock 569 569
Additional paid-in capital 71,441 77,381
Retained earnings 566,133 511,312
Accumulated other comprehensive
income 26,087 (1,405)
Treasury stock, at cost (187,068) (135,144)
Total stockholders' equity 477,162 452,713
Total liabilities and
stockholders' equity $5,910,959 $5,773,049
(A) While unaudited, the Condensed Consolidated Statements of Condition
have been prepared in accordance with accounting principles generally
accepted in the United States and, as of June 30, 2001, are derived
from quarterly financial statements and footnote information upon
which Ernst & Young, LLP, First Midwest's independent external
auditors, has rendered a Quarterly Review Report; Ernst & Young is
currently in the process of completing their quarterly review report
for the quarter ended June 30, 2002.
First Midwest Bancorp, Inc. Press Release Dated July 17, 2002
Condensed Consolidated Statements
of Income Quarters Ended Six Months Ended
Unaudited(A) June 30, June 30,
(Amounts in thousands except per
share data) 2002 2001 2002 2001
Interest Income
Loans $56,719 $67,850 $113,656 $137,062
Securities 27,353 31,033 54,197 64,269
Other 169 279 331 472
Total interest income 84,241 99,162 168,184 201,803
Interest Expense
Deposits 21,241 36,234 43,857 76,351
Borrowed funds 6,704 12,563 13,784 28,199
Total interest expense 27,945 48,797 57,641 104,550
Net interest income 56,296 50,365 110,543 97,253
Provision for Loan Losses 3,100 4,065 8,155 7,523
Net interest income after
provision for loan losses 53,196 46,300 102,388 89,730
Noninterest Income
Service charges on deposit
accounts 6,219 6,089 11,975 11,581
Trust and investment management
fees 2,551 2,648 5,259 5,321
Other service charges, commissions,
and fees 4,458 4,628 8,751 8,895
Corporate owned life insurance
income 1,739 2,019 3,437 4,287
Securities gains (losses), net 24 (2) 24 702
Other 1,391 1,887 3,078 3,409
Total noninterest income 16,382 17,269 32,524 34,195
Noninterest Expense
Salaries and employee benefits 20,217 19,097 39,776 37,535
Occupancy expenses 3,598 3,819 7,113 7,933
Equipment expenses 1,972 1,889 3,854 3,843
Technology and related costs 2,551 2,558 5,017 5,099
Other 10,276 9,356 18,490 17,402
Total noninterest expense 38,614 36,719 74,250 71,812
Income before taxes 30,964 26,850 60,662 52,113
Income tax expense 8,030 6,559 15,657 12,498
Net Income $22,934 $20,291 $45,005 $39,615
Diluted Earnings Per Share $0.47 $0.40 $0.92 $0.77
Dividends Declared Per Share $0.17 $0.16 $0.34 $0.32
Weighted Average Diluted Shares
Outstanding 48,774 50,921 48,909 51,138
(A) While unaudited, the Condensed Consolidated Statements of Income have
been prepared in accordance with accounting principles generally
accepted in the United States and, for the quarter and six months
ended June 30, 2001 and the quarter ended March 31, 2002, are derived
from quarterly financial statements and footnote information upon
which Ernst & Young, LLP, First Midwest's independent external
auditors, has rendered a Quarterly Review Report; Ernst &
Young is currently in the process of completing their quarterly review
report for the quarter ended June 30, 2002.
First Midwest Bancorp, Inc.
Selected Quarterly Data
Unaudited Year to Date
(Amounts in thousands except per
share data) 2002 2001
Net interest income $110,543 $97,253
Provision for loan losses 8,155 7,523
Noninterest income 32,524 34,195
Noninterest expense 74,250 71,812
Net income 45,005 39,615
Diluted earnings per share $0.92 $0.77
Return on average equity 19.50% 17.36%
Return on average assets 1.56% 1.39%
Net interest margin 4.38% 3.91%
Efficiency ratio 48.22% 50.89%
Period end shares outstanding 48,165 50,112
Book value per share $9.91 $9.03
Dividends per share $0.34 $0.32
Selected Quarterly Data
Unaudited Quarters Ended
(Amounts in thousands 06/30/02 03/31/02 12/31/01 09/3/01 06/30/01
except per share data)
Net interest income $56,296 $54,247 $53,848 $53,279 $50,365
Provision for loan losses 3,100 5,055 6,313 5,248 4,065
Noninterest income 16,382 16,142 17,433 17,238 17,269
Noninterest expense 38,614 35,636 36,660 36,884 36,719
Net income 22,934 22,071 21,274 21,249 20,291
Diluted earnings per share $0.47 $0.45 $0.43 $0.42 $0.40
Return on average equity 19.60% 19.39% 18.24% 18.57% 17.65%
Return on average assets 1.57% 1.55% 1.47% 1.47% 1.41%
Net interest margin 4.43% 4.32% 4.33% 4.27% 4.04%
Efficiency ratio 49.15% 47.26% 48.08% 48.92% 50.46%
Period end shares
outstanding 48,165 48,534 48,725 49,109 50,112
Book value per share $9.91 $9.21 $9.18 $9.31 $9.03
Dividends per share $0.17 $0.17 $0.17 $0.16 $0.16
Asset Quality
Unaudited Year to Date
(Amounts in thousands) 06/30/02 06/30/01
Nonperforming loans $11,879 $20,518
Foreclosed real estate 4,582 2,425
Loans past due 90 days and still
accruing 3,564 5,187
Nonperforming loans to loans 0.35% 0.61%
Nonperforming assets to loans
plus foreclosed real estate 0.48% 0.68%
Reserve for loan losses to loans 1.41% 1.38%
Reserve for loan losses to
nonperforming loans 403% 228%
Provision for loan losses $8,155 $7,523
Net loan charge-offs 8,082 5,911
Net loan charge-offs to average loans 0.48% 0.36%
Asset Quality
Unaudited Quarters Ended
06/30/02 03/31/02 12/31/01 09/30/01 06/30/01
(Amounts in thousands)
Nonperforming loans $11,879 $15,277 $16,847 $21,425 $20,518
Foreclosed real estate 4,582 4,289 3,630 3,651 2,425
Loans past due 90 days and
still accruing 3,564 4,739 5,783 6,117 5,187
Nonperforming loans to
loans 0.35% 0.45% 0.50% 0.62% 0.61%
Nonperforming assets to
loans plus foreclosed real
estate 0.48% 0.58% 0.61% 0.73% 0.68%
Reserve for loan losses to
loans 1.41% 1.42% 1.42% 1.38% 1.38%
Reserve for loan losses to
nonperforming loans 403% 313% 283% 223% 228%
Provision for loan losses $3,100 $5,055 $6,313 $5,248 $4,065
Net loan charge-offs 3,056 5,026 6,313 4,208 2,781
Net loan charge-offs to
average loans 0.36% 0.61% 0.73% 0.49% 0.34%
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, +1-630-875-7283, or James
M. Roolf, +1-630-875-7463, both of First Midwest Bancorp, Inc.
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