2nd Quarter 2004 Highlights:
-- EPS of $.53, up 3.9% as compared to 1st quarter 2004
-- ROE of 19.2% vs. 19.4% in 2nd Quarter 2003
-- Efficiency Ratio of 49.9%, Improved as Compared to 50.5% in 1st Quarter
2004
-- Total Assets Up 5.9% Compared to 2nd Quarter 2003
-- Commercial Loan Demand Strengthening
ITASCA, Ill., July 21 /PRNewswire-FirstCall/ -- First Midwest Bancorp,
Inc. ("First Midwest") (Nasdaq: FMBI) today reported net income for second
quarter ended June 30, 2004 of $24.7 million, or $0.53 per diluted share.
This represented an increase of 3.9% per diluted share as compared to 2004's
first quarter of $24.0 million, or $0.51 per diluted share, and approximated
2003's second quarter earnings of $24.6 million and $0.53 per diluted share.
First Midwest's 2004 second quarter performance improved 6.25% as compared to
second quarter 2003 after excluding from both periods, the impact of security
gains and debt extinguishment losses on performance. This second quarter 2004
performance resulted in an annualized return on average assets of 1.44%, as
compared to 1.59% for second quarter 2003, and an annualized return on average
equity of 19.17%, as compared to 19.40% for second quarter 2003.
For the first six months of 2004, net income increased 3.0% on a per
diluted share basis to $48.7 million, or $1.04 per diluted share, as compared
to 2003's like period of $47.4 million, or $1.01 per diluted share. Diluted
earnings per share for the first six months of 2004 increased 6.25% from the
same period in 2003 after excluding security gains and debt extinguishment
losses in 2004 and 2003, and CoVest integration costs in 2004.
"We are pleased with our performance in the second quarter, as our balance
sheet is positioned to take advantage of the transition to a higher rate
environment," First Midwest President and Chief Executive Officer John O'Meara
said. "We should be able to capitalize on opportunities presented by the
changing environment, including rising interest rates and their implications
for our securities portfolio and net interest margin. We are also encouraged
by favorable trends in corporate loan growth, trust revenues and expense
control, and we remain optimistic about continued, low charge-off levels."
As a result, First Midwest expects full year 2004 diluted earnings per
share in the range of $2.14 to $2.18, representing growth over full year 2003
in the range of 9% to 11%.
Net Interest Margin
First Midwest's net interest income increased 6.5% to $56.0 million for
second quarter 2004 as compared to $52.6 million for 2003's second quarter.
This increase resulted from earning assets growth of $666.9 million from
second quarter 2003, primarily due to the acquisition of CoVest on December
31, 2003. Net interest margin for second quarter 2004 was 3.81%, down from
4.01% for second quarter 2003 and 3.97% on a linked-quarter basis. The margin
contraction from first quarter 2004 to second quarter 2004 resulted from the
continued repricing of earning assets in the low rate environment and the
impact of increased prepayments on mortgage-backed securities.
Loan Growth and Funding
First Midwest's total loans of $4.2 billion at June 30, 2004 were 19.3%
higher than at June 30, 2003 and 2.8% higher than at December 31, 2003. The
growth from second quarter 2003 was due primarily to the acquisition of
$531 million in loans from CoVest on December 31, 2003. On a linked-quarter
basis, total loans increased 1.4% as commercial, agricultural, real estate
construction and indirect consumer loan categories experienced growth.
Commercial loan growth remained favorable, as commercial loans outstanding as
of June 30, 2004 increased by 4.4%, or 17.6% annualized, compared to March 31,
2004.
First Midwest remains optimistic about the prospects for commercial and
commercial real estate loan growth for 2004. The pipeline of loan proposals
under review by First Midwest continues to be up significantly compared with
2003.
Total average deposits for second quarter 2004 increased 14.5% from second
quarter 2003 and 3.0% on a linked-quarter basis. The increase from second
quarter 2003 is primarily attributed to deposits obtained through the
acquisition of CoVest while increase from first quarter 2004 reflects the
seasonal impact of higher public fund deposit levels.
Noninterest Income and Expense
First Midwest's total noninterest income for second quarter 2004 was
$19.1 million as compared to $21.2 million for second quarter 2003. Excluding
certain transactions, noninterest income levels were relatively unchanged in
comparison to 2003. In second quarter 2004, these transactions included
security gains totaling $2.7 million and offsetting losses of $1.4 million
from the early retirement of Federal Home Loan Bank advances, while in second
quarter 2003, these transactions included $3.3 million in security gains. In
comparison to second quarter 2003 noninterest income in second quarter 2004
reflected improved trust income, card-based revenues and loan-related fees,
which were offset by the impact of lower investment product and mortgage-
related commission revenue.
Total noninterest expense for second quarter 2004 increased $2.0 million
to $40.0 million, an increase of 5.3% from second quarter 2003. This increase
was largely the result of additional expenses associated with operating the
CoVest franchise, including employee-related expense and net occupancy and
equipment costs as well as $491,000 of CoVest core deposit intangible
amortization. The integration of CoVest into First Midwest's operation and
data processing systems has been fully completed, with all cost reductions
being fully realized. First Midwest's efficiency ratio was 49.9% for second
quarter 2004, unchanged from second quarter 2003 and improved from 50.5% for
first quarter 2004.
Credit Quality
Nonperforming assets totaled $29.2 million as of June 30, 2004, up from
$23.5 million as of March 31, 2004 and approximating the $28.9 million as of
December 31, 2003. The increase in nonperforming assets from first to second
quarter 2004 primarily represents two commercial credits transferred to
nonaccruing status. Approximately one third of the total nonperforming assets
as of June 30, 2004, originated from the $531 million CoVest loan portfolio
purchased on December 31, 2003.
At June 30, 2004, nonperforming loans represented 0.59% of loans, compared
with 0.45% at March 31, 2004 and 0.57% at December 31, 2003. Loans past due
90 days and still accruing totaled $4.2 million at June 30, 2004, down from
$7.0 million as of March 31, 2004 and up from $3.4 million as of December 31,
2003. As of June 30, 2004, loans acquired from CoVest represented nearly 45%
of the total loans past due 90 days.
Net charge-offs for second quarter 2004 were 0.23% of average loans as
compared to 0.17% for second quarter 2003. Consumer credit costs continue to
show improvement, which First Midwest expects to stabilize for the balance of
the year. The ratio of the reserve for loan losses to total loans as of June
30, 2004 was 1.36%, while the provision for loan losses exceeded net charge-
offs. The reserve for loan losses at June 30, 2004 represented 230% of
nonperforming loans.
Capital Management
As of June 30, 2004, First Midwest's Total Risk Based Capital and Tier 1
Risk Based Capital ratios were 11.45% and 10.37%, respectively. The ratios
were improved from the Total Risk Based Capital and Tier 1 Risk Based Capital
levels of 10.38% and 9.31%, respectively, existent as of June 30, 2003. First
Midwest's Tier 1 Leverage Ratio of 7.97% as of June 30, 2004 improved from
6.99% as of June 30, 2003. The improvement in these ratios is largely due to
the issuance of $125 million in trust-preferred securities during the fourth
quarter of 2003. These ratios all exceeded the regulatory minimum levels to
be considered a "well capitalized institution."
During the second quarter of 2004, First Midwest returned to its
shareholders $0.22 per share in the form of dividends, up 15.8% from 2003's
second quarter dividend of $0.19 per share. In addition, during the first six
months of 2004, First Midwest repurchased 162,100 shares of its common stock
at an average price of approximately $32.95 per share funded by cash on hand,
with no shares being repurchased during the second quarter of 2004. As of
June 30, 2004, approximately 1.4 million shares remained under First Midwest's
existing repurchase authorization.
About the Company
First Midwest is the premier relationship-based banking franchise in the
wealthy and growing suburban Chicago banking markets. 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.
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.
Operating Highlights Quarters Ended Six Months Ended
Unaudited June 30, June 30,
(Amounts in thousands except per
share data) 2004 2003 2004 2003
Net income $24,712 $24,647 $48,744 $47,377
Diluted earnings per share $0.53 $0.53 $1.04 $1.01
Return on average equity 19.17% 19.40% 18.56% 18.90%
Return on average assets 1.44% 1.59% 1.43% 1.56%
Net interest margin 3.81% 4.01% 3.89% 4.03%
Efficiency ratio 49.89% 49.92% 50.21% 49.54%
Balance Sheet Highlights
Unaudited
(Amounts in thousands except per
share data) June 30, 2004 June 30, 2003
Total assets $6,834,285 $6,455,651
Total loans 4,173,229 3,498,992
Total deposits 4,892,602 4,527,403
Stockholders' equity 506,901 508,004
Book value per share $10.87 $10.92
Period end shares outstanding 46,632 46,534
Stock Performance Data Quarters Ended Six Months Ended
Unaudited June 30, June 30,
2004 2003 2004 2003
Market Price:
Quarter End $35.21 $28.81 $35.21 $28.81
High $36.03 $29.87 $36.03 $29.87
Low $32.33 $25.55 $31.13 $24.89
Quarter end price to book value 3.2 x 2.6 x 3.2 x 2.6 x
Quarter end price to consensus
estimated 2004 earnings 16.2 x N/A 16.2 x N/A
Dividends declared per share $0.22 $0.19 $0.44 $0.38
First Midwest Bancorp, Inc.
Condensed Consolidated Statements of Condition
Unaudited(1) June 30,
(Amounts in thousands) 2004 2003
Assets
Cash and due from banks $160,501 $194,792
Funds sold and other short-term
investments 9,375 20,988
Securities available for sale 2,062,707 2,371,459
Securities held to maturity, at
amortized cost 61,679 89,955
Loans 4,173,229 3,498,992
Reserve for loan losses (56,686) (49,124)
Net loans 4,116,543 3,449,868
Premises, furniture and equipment 91,477 81,632
Investment in corporate owned life
insurance 148,932 143,884
Goodwill and other intangible assets 97,658 35,698
Accrued interest receivable and
other assets 85,413 67,375
Total assets $6,834,285 $6,455,651
Liabilities and Stockholders' Equity
Deposits $4,892,602 $4,527,403
Borrowed funds 1,250,753 1,312,510
Subordinated debt - trust preferred
securities 127,547 -
Accrued interest payable and other
liabilities 56,482 107,734
Total liabilities 6,327,384 5,947,647
Common stock 569 569
Additional paid-in capital 66,760 69,924
Retained earnings 678,342 623,848
Accumulated other comprehensive
income (10,543) 44,566
Treasury stock, at cost (228,227) (230,903)
Total stockholders' equity 506,901 508,004
Total liabilities and
stockholders' equity $6,834,285 $6,455,651
(1) 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, 2003, 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 June 30, 2004.
First Midwest Bancorp, Inc.
Condensed Consolidated Statements of Income
Quarters Ended Six Months Ended
Unaudited(1) June 30, June 30,
(Amounts in thousands except per
share data) 2004 2003 2004 2003
Interest Income
Loans $54,503 $50,719 $109,148 $101,915
Securities 21,844 22,529 44,488 45,649
Other 198 277 298 526
Total interest income 76,545 73,525 153,934 148,090
Interest Expense
Deposits 13,556 14,208 27,225 29,377
Borrowed funds 4,949 6,673 9,766 13,928
Subordinated debt - trust preferred
securities 1,992 - 4,006 -
Total interest expense 20,497 20,881 40,997 43,305
Net interest income 56,048 52,644 112,937 104,785
Provision for Loan Losses 2,405 2,540 4,333 5,070
Net interest income after
provision for loan losses 53,643 50,104 108,604 99,715
Noninterest Income
Service charges on deposit accounts 7,041 7,078 13,282 13,359
Trust and investment management
fees 3,038 2,768 6,000 5,321
Other service charges, commissions,
and fees 3,834 4,265 7,466 7,733
Card-based fees 2,349 2,196 4,495 4,277
Corporate owned life insurance
income 1,244 1,226 2,511 2,522
Security gains, net 2,663 3,335 4,602 3,401
(Losses) on early extinguishment of
debt (1,413) - (2,653) -
Other 351 347 789 2,366
Total noninterest income 19,107 21,215 36,492 38,979
Noninterest Expense
Salaries and employee benefits 21,755 21,413 43,871 41,425
Net occupancy expense 3,772 3,633 7,875 7,312
Equipment expenses 2,258 1,893 4,500 3,805
Technology and related costs 2,007 2,514 4,042 4,845
Other 10,185 8,501 19,894 17,405
Total noninterest expense 39,977 37,954 80,182 74,792
Income before taxes 32,773 33,365 64,914 63,902
Income tax expense 8,061 8,718 16,170 16,525
Net Income $24,712 $24,647 $48,744 $47,377
Diluted Earnings Per Share $0.53 $0.53 $1.04 $1.01
Dividends Declared Per Share $0.22 $0.19 $0.44 $0.38
Weighted Average Diluted Shares
Outstanding 46,976 46,871 46,964 47,049
(1) 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, 2003, 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 and six months ended June 30, 2004.
First Midwest Bancorp, Inc.
Selected Quarterly Data
Unaudited Year to Date
(Amounts in thousands except per
share data) 6/30/04 6/30/03
Net interest income $112,937 $104,785
Provision for loan losses 4,333 5,070
Noninterest income 36,492 38,979
Noninterest expense 80,182 74,792
Net income 48,744 47,377
Diluted earnings per share $1.04 $1.01
Return on average equity 18.56% 18.90%
Return on average assets 1.43% 1.56%
Net interest margin 3.89% 4.03%
Efficiency ratio 50.21% 49.54%
Period end shares outstanding 46,632 46,534
Book value per share $10.87 $10.92
Dividends declared per share $0.44 $0.38
Selected Quarterly Data
Unaudited
(Amounts in thousands except per
share data) Quarters Ended
6/30/04 3/31/04 12/31/03 9/30/03 6/30/03
Net interest income $56,048 $56,889 $52,962 $52,007 $52,644
Provision for loan losses 2,405 1,928 3,075 2,660 2,540
Noninterest income 19,107 17,385 19,419 15,772 21,215
Noninterest expense 39,977 40,205 37,109 37,551 37,954
Net income 24,712 24,032 24,199 21,202 24,647
Diluted earnings per share $0.53 $0.51 $0.52 $0.45 $0.53
Return on average equity 19.17% 17.97% 18.59% 16.73% 19.40%
Return on average assets 1.44% 1.42% 1.54% 1.33% 1.59%
Net interest margin 3.81% 3.97% 4.01% 3.90% 4.01%
Efficiency ratio 49.89% 50.53% 45.66% 48.72% 49.92%
Period end shares outstanding 46,632 46,537 46,581 46,551 46,534
Book value per share $10.87 $11.26 $11.22 $10.94 $10.92
Dividends declared per share $0.22 $0.22 $0.22 $0.19 $0.19
Asset Quality
Unaudited Year to Date
(Amounts in thousands) 6/30/04 6/30/03
Nonaccrual loans $24,621 $9,423
Restructured loans - 7,328
Total Nonperforming loans $24,621 $16,751
Foreclosed real estate 4,602 4,576
Loans past due 90 days and still
accruing 4,160 5,723
Nonperforming loans to loans 0.59% 0.48%
Nonperforming assets to loans
plus foreclosed real estate 0.70% 0.61%
Reserve for loan losses to loans 1.36% 1.40%
Reserve for loan losses to
nonperforming loans 230% 293%
Provision for loan losses $4,333 $5,070
Net loan charge-offs 4,051 3,875
Net loan charge-offs to average loans 0.20% 0.23%
Asset Quality
Unaudited Quarters Ended
(Amounts in thousands) 6/30/04 3/31/04 12/31/03 9/30/03 6/30/03
Nonaccrual loans $24,621 $18,704 $15,930 $11,442 $9,423
Restructured loans - - 7,137 7,219 7,328
Total Nonperforming loans $24,621 $18,704 $23,067 $18,661 $16,751
Foreclosed real estate 4,602 4,779 5,812 3,842 4,576
Loans past due 90 days and
still accruing 4,160 6,977 3,384 4,806 5,723
Nonperforming loans to loans 0.59% 0.45% 0.57% 0.53% 0.48%
Nonperforming assets to loans
plus foreclosed real estate 0.70% 0.57% 0.71% 0.64% 0.61%
Reserve for loan losses to
loans 1.36% 1.38% 1.39% 1.41% 1.40%
Reserve for loan losses to
nonperforming loans 230% 303% 245% 263% 293%
Provision for loan losses $2,405 $1,928 $3,075 $2,660 $2,540
Net loan charge-offs 2,347 1,704 3,055 2,620 1,436
Net loan charge-offs to
average loans 0.23% 0.17% 0.35% 0.30% 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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