3rd QUARTER 2004 HIGHLIGHTS:
-- EPS of $0.54: Improved From Third Quarter 2003
-- Commercial Loan Growth: 9.9% Y.T.D. Annualized
-- Nonperforming Loans Improved: 10% Decrease From 2Q04
-- Efficiency Ratio Solid: 49.6%
ITASCA, Ill., Oct. 20 /PRNewswire-FirstCall/ -- First Midwest Bancorp,
Inc. ("First Midwest") (Nasdaq: FMBI) today reported that its net income for
third quarter ended September 30, 2004 was $25.2 million, or $0.54 per diluted
share. This represented an increase of 20% on a per diluted share basis as
compared to 2003's third quarter earnings of $21.2 million and $0.45 per
diluted share. First Midwest's 2004 third quarter diluted earnings per share
improved 6.0% from third quarter 2003 after excluding from both periods the
impact on performance of net security gains and losses and debt extinguishment
losses. First Midwest's annualized return on average assets was 1.45% for
third quarter 2004, as compared to 1.33% for third quarter 2003, and
annualized return on average equity was 19.03% for third quarter 2004, as
compared to 16.73% for third quarter 2003.
For the first nine months of 2004, net income increased 8.2% on a per
diluted share basis to $1.58 per diluted share, or $73.9 million, as compared
to the same period in 2003 of $1.46 per diluted share, or $68.6 million.
"We are pleased to report another solid quarter of performance, which
reflects both demand deposit account growth and continued progress in booking
new commercial and retail home equity loans," said First Midwest President and
Chief Executive Officer John O'Meara. "This momentum demonstrates the
effectiveness of our unique relationship-based sales focus, which we believe
drives our long-term success."
"We currently anticipate diluted earnings per share in fourth quarter 2004
to be $0.53 to $0.55, up from $0.52 in fourth quarter 2003. This would result
in full year 2004 earnings of $2.11 to $2.13, an improvement of 7% to 8% over
2003. Fourth quarter performance expectations assume a stable net interest
margin, as higher short-term rates are expected to produce enhanced loan
yields partially offset by higher amortization expenses from accelerated
mortgage backed securities prepayments. The fourth quarter should also see
somewhat higher credit costs relating to the remediation of certain CoVest
loans as well as higher costs associated with corporate and regulatory
compliance mandates."
Net Interest Margin
First Midwest's net interest income increased 10.6% to $57.5 million in
third quarter 2004 as compared to $52.0 million in 2003's third quarter. This
improvement resulted from the $534.9 million increase in average interest-
earning assets from third quarter 2003, primarily the result of the
acquisition of CoVest on December 31, 2003. Net interest margin for third
quarter 2004 was 3.90%, unchanged from third quarter 2003 and up from 3.81% on
a linked-quarter basis. The margin improvement from second quarter 2004 to
third quarter 2004 resulted from earning assets repricing more quickly than
paying liabilities as the targeted Federal Funds rate increased 75 basis
points beginning on June 30, 2004 and mortgage prepayments slowed.
Loan and Deposit Growth
First Midwest's total loans of $4.2 billion at September 30, 2004
increased 20.5% from September 30, 2003, primarily due to the acquisition of
$531 million in loans from CoVest on December 31, 2003. Since year-end 2003,
First Midwest's total loans increased 3.6% as commercial, agricultural,
commercial real estate, and home equity consumer loan categories grew.
Commercial loan growth trends remain favorable, and commercial loans
outstanding as of September 30, 2004 have increased by 7.4%, or 9.9%
annualized, compared to December 31, 2003.
Consumer home equity loans increased 3.4% on a linked-quarter basis and
7.9% from December 31, 2003, reflecting continued sales success. Indirect
consumer loans outstanding totaled $332.0 million as of September 30, 2004,
down 5.0% from June 30, 2004, reflecting First Midwest's decision to de-
emphasize its indirect auto lending activities.
Total average deposits for the third quarter of 2004 were $4.9 billion as
compared to $4.5 billion for third quarter 2003. The increase largely
reflects the acquisition of $465.7 million in deposits from CoVest on December
31, 2003.
Although essentially unchanged from second quarter 2004, total average
transactional deposits for third quarter 2004 reflects improved demand deposit
growth. In comparison to second quarter 2004, demand deposits for the third
quarter of 2004 increased 2.4% as the result of seasonal business account
growth and targeted sales focus.
Securities Portfolio
As of September 30, 2004, First Midwest's securities portfolio totaled
$2.2 billion, down 5.5% as compared to December 31, 2003 and 3.9% as compared
to September 30, 2003. Unrealized security gains as of September 30, 2004
totaled $20.3 million as compared to total unrealized losses of $17.6 million
as of June 30, 2004. The $37.9 million improvement over June 30, 2004
reflects the impact of changing market rates and securities purchases and
sales during the quarter.
Net realized security gains totaled $748,000 for third quarter 2004,
representing realized gains of $6.3 million over realized losses of
$5.5 million. Realized gains resulted from the sale of fixed rate, long-term
municipal securities during the course of the third quarter of 2004 as First
Midwest sought to take advantage of market conditions, reduce its exposure to
rising short-term interest rates and improve liquidity. Realized losses
resulted primarily from the impairment recognized on September 30, 2004 of a
single, FNMA preferred stock investment that was deemed to be "other-than-
temporarily" impaired.
Noninterest Income and Expense
First Midwest's total noninterest income for third quarter 2004 was
$18.8 million, up 19.3% as compared to $15.8 million for third quarter 2003.
Excluding the impact of net security gains and losses and debt extinguishment
losses from both periods, noninterest income decreased 6.9% from third quarter
2003, due in part to the receipt in 2003 of $1.1 million in insurance-related
proceeds.
Total noninterest expense for third quarter 2004 increased $2.8 million to
$40.4 million, an increase of 7.5% from third quarter 2003. This increase
reflects 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 reflects
comparatively higher expenses for incentive-related compensation programs and
increased fees for professional and audit-related services. These increases
were partially offset by lower data processing costs. As a result, First
Midwest's efficiency ratio was 49.6% for third quarter 2004, as compared to
48.7% for third quarter 2003 and 49.9% for second quarter 2004.
Credit Quality
Nonperforming assets totaled $26.8 million as of September 30, 2004, down
from $29.2 million as of June 30, 2004 and down from the $28.9 million as of
December 31, 2003.
At September 30, 2004, nonperforming loans represented 0.53% of total
loans, down from 0.59% as of June 30, 2004 and 0.57% at December 31, 2003.
Loans past due 90 days and still accruing totaled $3.1 million at September
30, 2004, a decrease from $4.2 million as of June 30, 2004 and from
$3.4 million as of December 31, 2003.
Net charge-offs for third quarter 2004 were 0.30% of average loans as
compared to 0.23% for second quarter 2004 and 0.30% for third quarter 2003.
The ratio of the reserve for loan losses to total loans as of September 30,
2004 was 1.35%, while the provision for loan losses exceeded net charge-offs.
The reserve for loan losses at September 30, 2004 represented 255% of
nonperforming loans.
Capital Management
As of September 30, 2004, First Midwest's Total Risk Based Capital ratio
was 11.66%, and its Tier 1 Risk Based Capital ratio was 10.57%. The ratios
were improved from the Total Risk Based Capital and Tier 1 Risk Based Capital
levels of 10.55% and 9.48%, respectively, as of September 30, 2003. First
Midwest's Tier 1 Leverage Ratio of 8.13% as of September 30, 2004 improved
from 7.02% as of September 30, 2003. The improvement in these ratios
primarily reflects the inclusion of $125 million in trust preferred securities
that were issued during the fourth quarter of 2003. These ratios all exceeded
the regulatory minimum levels to be considered a "well capitalized
institution."
During the third quarter of 2004, First Midwest returned to its
shareholders $0.22 per share in the form of dividends, up 15.8% from 2003's
third quarter dividend of $0.19 per share. In addition, during the third
quarter of 2004, First Midwest repurchased 284,277 shares of its common stock
at an average price of $33.68 per share. For the first nine months of 2004,
First Midwest repurchased 446,377 shares of its common stock. As of September
30, 2004, approximately 1.1 million 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 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. 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 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 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 October 20, 2004
Operating Highlights Quarters Ended Nine Months Ended
Unaudited September 30, September 30,
(Amounts in thousands except per
share data) 2004 2003 2004 2003
Net income $25,172 $21,202 $73,916 $68,579
Diluted earnings per share $0.54 $0.45 $1.58 $1.46
Return on average equity 19.03% 16.73% 18.72% 18.17%
Return on average assets 1.45% 1.33% 1.44% 1.48%
Net interest margin 3.90% 3.90% 3.89% 3.99%
Efficiency ratio 49.60% 48.72% 50.00% 49.26%
Balance Sheet Highlights
Unaudited
(Amounts in thousands except per
share data) Sept. 30, 2004 Sept. 30, 2003
Total assets $6,931,563 $6,299,237
Total loans 4,204,026 3,488,212
Total deposits 4,955,322 4,466,519
Stockholders' equity 535,855 509,153
Book value per share $11.56 $10.94
Period end shares outstanding 46,370 46,551
Stock Performance Data Quarters Ended Nine Months Ended
Unaudited September 30, September 30,
2004 2003 2004 2003
Market Price:
Quarter End $34.56 $29.71 $34.56 $29.71
High $35.62 $31.45 $36.03 $31.45
Low $32.25 $28.53 $31.13 $24.89
Quarter end price to book value 3.0 x 2.7 x 3.0 x 2.7 x
Quarter end price to consensus
estimated 2004 earnings 16.0 x N/A 16.0 x N/A
Dividends declared per share $0.22 $0.19 $0.66 $0.57
First Midwest Bancorp, Inc. Press Release Dated October 20, 2004
Condensed Consolidated Statements of Condition
Unaudited(1) September 30,
(Amounts in thousands) 2004 2003
Assets
Cash and due from banks $183,472 $185,387
Funds sold and other short-term
investments 8,613 19,314
Securities available for sale 2,115,492 2,195,138
Securities held to maturity, at
amortized cost 54,743 62,469
Loans 4,204,026 3,488,212
Reserve for loan losses (56,707) (49,164)
Net loans 4,147,319 3,439,048
Premises, furniture and equipment 90,173 83,298
Investment in corporate owned life
insurance 150,165 145,067
Goodwill and other intangible assets 97,125 35,680
Accrued interest receivable and
other assets 84,461 133,836
Total assets $6,931,563 $6,299,237
Liabilities and Stockholders' Equity
Deposits $4,955,322 $4,466,519
Borrowed funds 1,252,338 1,169,921
Subordinated debt - trust preferred
securities 129,250 -
Accrued interest payable and other
liabilities 58,798 153,644
Total liabilities 6,395,708 5,790,084
Common stock 569 569
Additional paid-in capital 66,454 69,045
Retained earnings 693,297 636,192
Accumulated other comprehensive income 12,520 33,757
Treasury stock, at cost (236,985) (230,410)
Total stockholders' equity 535,855 509,153
Total liabilities and
stockholders' equity $6,931,563 $6,299,237
(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 September 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
September 30, 2004.
First Midwest Bancorp, Inc. Press Release Dated October 20, 2004
Condensed Consolidated Statements
of Income Quarters Ended Nine Months Ended
Unaudited(1) September 30, September 30,
(Amounts in thousands except per
share data) 2004 2003 2004 2003
Interest Income
Loans $56,918 $49,659 $166,066 $151,574
Securities 22,542 21,238 67,030 66,887
Other 183 412 481 938
Total interest income 79,643 71,309 233,577 219,399
Interest Expense
Deposits 14,668 13,713 41,893 43,090
Borrowed funds 5,434 5,589 15,200 19,517
Subordinated debt - trust preferred
securities 2,007 - 6,013 -
Total interest expense 22,109 19,302 63,106 62,607
Net interest income 57,534 52,007 170,471 156,792
Provision for loan losses 3,240 2,660 7,573 7,730
Net interest income after
provision for loan losses 54,294 49,347 162,898 149,062
Noninterest Income
Service charges on deposit accounts 7,873 7,296 21,155 20,655
Trust and investment management
fees 2,883 2,762 8,883 8,083
Other service charges, commissions,
and fees 3,942 4,702 11,408 12,435
Card-based fees 2,344 2,088 6,839 6,365
Corporate owned life insurance
income 1,233 1,183 3,744 3,705
Security gains (losses), net 748 (615) 5,350 2,786
(Losses) on early extinguishment of
debt - (3,007) (2,653) (3,007)
Other (210) 1,363 579 3,729
Total noninterest income 18,813 15,772 55,305 54,751
Noninterest Expense
Salaries and employee benefits 23,009 21,618 66,880 63,043
Net occupancy expense 3,964 3,652 11,839 10,964
Equipment expense 2,105 2,068 6,605 5,873
Technology and related costs 1,335 2,169 5,377 7,014
Other 9,946 8,044 29,840 25,449
Total noninterest expense 40,359 37,551 120,541 112,343
Income before taxes 32,748 27,568 97,662 91,470
Income tax expense 7,576 6,366 23,746 22,891
Net Income $25,172 $21,202 $73,916 $68,579
Diluted Earnings Per Share $0.54 $0.45 $1.58 $1.46
Dividends Declared Per Share $0.22 $0.19 $0.66 $0.57
Weighted Average Diluted Shares
Outstanding 46,851 46,890 46,926 46,995
(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 nine months
ended September 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 nine months ended September 30,
2004.
First Midwest Bancorp, Inc. Press Release Dated October 20, 2004
Selected Quarterly Data
Unaudited Year to Date Quarters Ended
(Amounts in
thousands
except per
share
data) 9/30/ 09/30/ 9/30/ 6/30/ 3/31/ 12/31/ 09/30/
2004 03 2004 2004 2004 2003 03
Net interest
income $170,471 $156,792 $57,534 $56,048 $56,889 $52,962 $52,007
Provision for
loan losses 7,573 7,730 3,240 2,405 1,928 3,075 2,660
Noninterest
income 55,305 54,751 18,813 19,107 17,385 19,419 15,772
Noninterest
expense 120,541 112,343 40,359 39,977 40,205 37,109 37,551
Net income 73,916 68,579 25,172 24,712 24,032 24,199 21,202
Diluted
earnings
per share $1.58 $1.46 $0.54 $0.53 $0.51 $0.52 $0.45
Return on
average
equity 18.72% 18.17% 19.03% 19.17% 17.97% 18.59% 16.73%
Return on
average
assets 1.44% 1.48% 1.45% 1.44% 1.42% 1.54% 1.33%
Net interest
margin 3.89% 3.99% 3.90% 3.81% 3.97% 4.01% 3.90%
Efficiency
ratio 50.00% 49.26% 49.60% 49.89% 50.53% 45.66% 48.72%
Period end
shares
outstanding 46,370 46,551 46,370 46,632 46,537 46,581 46,551
Book value
per share $11.56 $10.94 $11.56 $10.87 $11.26 $11.22 $10.94
Dividends
declared per
share $0.66 $0.57 $0.22 $0.22 $0.22 $0.22 $0.19
Asset Quality
Unaudited Year to Date Quarters Ended
(Amounts in
thousands) 9/30/ 9/30/ 9/30/ 6/30/ 3/31/ 12/31/ 09/30/
2004 2003 2004 2004 2004 2003 03
Nonaccrual
loans $22,267 $11,442 $22,267 $24,621 $18,704 $15,930 $11,442
Restructured
loans - 7,219 - - - 7,137 7,219
Total
Nonperforming
loans $22,267 $18,661 $22,267 $24,621 $18,704 $23,067 $18,661
Foreclosed
real estate 4,528 3,842 4,528 4,602 4,779 5,812 3,842
Loans past due
90 days and
still
accruing 3,108 4,806 3,108 4,160 6,977 3,384 4,806
Nonperforming
loans to
loans 0.53% 0.53% 0.53% 0.59% 0.45% 0.57% 0.53%
Nonperforming
assets to
loans plus
foreclosed
real estate 0.64% 0.64% 0.64% 0.70% 0.57% 0.71% 0.64%
Reserve for
loan losses
to loans 1.35% 1.41% 1.35% 1.36% 1.38% 1.39% 1.41%
Reserve for
loan losses to
nonperforming
loans 255% 263% 255% 230% 303% 245% 263%
Provision for
loan losses $7,573 $7,730 $3,240 $2,405 $1,928 $3,075 $2,660
Net loan
charge-offs 7,270 6,495 3,219 2,347 1,704 3,055 2,620
Net loan
charge-offs
to average
loans 0.23% 0.25% 0.30% 0.23% 0.17% 0.35% 0.30%
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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