3rd Quarter 2002 Highlights:
-- EPS of $.47 vs. $.42 Last Year & $.47 Consensus
-- ROAA of 1.50% vs. 1.47% Last Year
-- Asset Quality Remains Sound
ITASCA, Ill., Oct. 23 /PRNewswire-FirstCall/ --
First Midwest Bancorp, Inc. (Nasdaq: FMBI) today reported net income for third
quarter ended September 30, 2002 increased to $22.7 million, or $.47 per
diluted share, as compared to 2001's like quarter of $21.2 million, or $.42
per diluted share, representing an increase of 11.9% on a diluted per share
basis. Performance for the current quarter resulted in an annualized return
on average assets of 1.50% as compared to 1.47% for the like quarter of 2001
and an annualized return on average equity of 18.5% as compared to 18.6% for
the 2001 quarter. The current quarter's earnings of $.47 per diluted share
was consistent with both First Midwest's guidance and First Call's recent
consensus earnings estimate.
For the first nine months of 2002, net income increased to a record
$67.7 million, or $1.39 per diluted share, as compared to 2001's
$60.9 million, or $1.20 per diluted share, representing an increase of 15.8%
on a diluted per share basis. Performance for the first nine months of 2002
resulted in an annualized return on average assets of 1.54% as compared to
1.42% for the like period of 2001 and an annualized return on average equity
of 19.1% as compared to 17.8% for the 2001 period.
Net Interest Margin
Net interest income was $55.5 million for third quarter 2002 as compared
to $53.3 million for 2001's like quarter, representing an increase of 4.1%.
Net interest margin for the third quarter was 4.26%, essentially unchanged
from the 2001 like quarter and down from 4.43% in second quarter 2002.
Consistent with First Midwest's expectations, the margin contraction resulted
from the continued low interest rate environment and management's steps taken
during the year to insulate net interest income against the potential for
rising interest rates. In addition, significant increases in refinance
related mortgage prepayments contributed to lower earning asset rates within
the mortgage-backed securities portfolio. The expectation of continued low
interest rates, flattening in the yield curve and acceleration in mortgage
prepayment speeds will maintain pressure on interest margins going forward.
Loan Growth and Funding
Total average loans for third quarter 2002 were essentially unchanged in
comparison to the prior year's like quarter averages with growth in commercial
and industrial loans being offset by a decline in 1-4 family real estate. On
a linked-quarter basis, total average loans remained stable with growth in the
commercial and industrial portfolio continuing to be offset by a decrease in
1-4 family real estate loans. Responsive to the uncertain economy, focus
remains on sound underwriting and profitable pricing at the expense of loan
growth.
Total average deposits for third quarter 2002 increased 2% from the prior
year's like quarter and were up slightly on a linked-quarter basis.
Reflective of customer liquidity preferences and targeted sales promotions,
average balances maintained in demand, savings and now accounts grew 3.7% on a
linked-quarter basis and 21.7% from the prior year's like quarter.
Conversely, more costly time deposit balances declined 1.7% on a linked-
quarter basis and 10.8% on a prior year like quarter basis as pricing
strategies encouraged customers to transfer account balances to either
transactional accounts or longer term maturities.
Noninterest Income and Expense
Total noninterest income for the third quarter and nine months of 2002 was
$16.9 million and $49.4 million, down 2.0% and 3.9%, respectively, from the
like 2001 periods. Improvement in service charges on deposit accounts was
offset by lower trust fees, income from corporate owned life insurance and
other service charge revenues reflective of the decline in debt and equity
market conditions. On a linked-quarter basis, noninterest income increased
3.1% as growth in service charges on deposit accounts continued and trust and
other fee sources stabilized.
Total noninterest expenses for third quarter 2002 grew by 3.3% over 2001's
like quarter while the nine months of 2002 grew by 3.4% over the prior year
period. Salaries and benefits increased by 7.7% in third quarter 2002 over
2001's like quarter primarily due to general salary increases, higher
retirement and healthcare costs, and higher expected incentive program awards.
On a linked-quarter basis, noninterest expense was virtually unchanged.
The combination of top line revenue performance and continued cost control
resulted in efficiency ratios of 49.08% for the third quarter of 2002 and
48.51% for the nine month period of 2002 and continued the strong level of
performance in this key ratio.
Credit Quality
Nonperforming assets (nonperforming loans plus foreclosed real estate)
totaled $13 million, representing a decline in such assets for the 4th
consecutive quarter. Similarly, nonperforming loans declined 15.9% as
compared to June 30, 2002 and 53.4% as compared to the year ago level.
Nonperforming loans at September 30, 2002 represented .29% of loans, down from
.50% at year-end 2001 and .62% a year ago.
Loans past due 90 days and still accruing increased to $9.8 million at
September 30, 2002 from $3.6 million at June 30, 2002. This increase was
primarily related to two credits that are the subject of rigorous remediation
efforts. Such efforts may result in a portion of these loans transitioning to
nonperforming status in the fourth quarter of 2002.
First Midwest continues to have virtually no credit exposure in such high
profile sectors as energy, cable and telecommunications nor shared national
credit or syndicated loans.
Net charge-offs for third quarter 2002 were .34% of average loans as
compared to .36% in second quarter 2002 and .49% for third quarter 2001.
Provisions for loan losses for the current quarter fully covered the quarter's
net charge-offs resulting in the ratio of the reserve for loan losses to total
loans at September 30, 2002 being maintained at 1.41% and approximating the
level of the last eight quarters.
The reserve for loan losses at September 30, 2002 represented 480% of
nonperforming loans as compared to 283% at year-end 2001 and 223% at the end
of third quarter 2001.
Dividends, Share Repurchases and Capital Management
During third quarter 2002 First Midwest paid a dividend of $.17 per share
representing the 79th consecutive quarterly dividend paid by First Midwest
since its formation in 1983. Based on the October 11, 2002 closing price of
$26.00 per share, the current dividend rate represents an annual yield of
2.62%. First Midwest continued to repurchase its common stock during third
quarter 2002 with approximately 564,000 shares being repurchased at an average
price of approximately $27.15 per share; for the nine months of 2002
approximately 1,449,000 shares have been repurchased at an average price of
$28.07 per share. All such share repurchases were effected utilizing cash on
hand, and as of September 30, 2002 the Parent Company continued to have no
short or long-term debt. As of September 30, 2002, approximately 2.8 million
shares remained under First Midwest's current 3.0 million share repurchase
authorization.
As of September 30, 2002 First Midwest's Total Risk Based Capital and Tier
1 Risk Based Capital ratios were 10.92% and 9.83%, respectively, compared with
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 7.28%
and exceeded the regulatory minimum range of 3% - 5% required to be considered
a "well capitalized" institution. As of September 30, 2002, First Midwest had
capital of approximately $40.6 million in excess of the most restrictive
regulatory minimum capital level required to be considered a "well
capitalized" institution.
Outlook for Balance of 2002
First Midwest remains comfortable with First Call's current fourth quarter
and full year consensus earnings estimate of $.47 and $1.86 per diluted share,
respectively. The $1.86 guidance would result in full year 2002 diluted
earnings per share growth of 14% over 2001. 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 October 23, 2002
Operating Highlights Quarters Ended Nine Months Ended
Unaudited September 30, September 30,
(Amounts in thousands except per
share data) 2002 2001 2002 2001
Net income $22,679 $21,249 $67,684 $60,864
Diluted earnings per share $0.47 $0.42 $1.39 $1.20
Return on average equity 18.46% 18.57% 19.14% 17.76%
Return on average assets 1.50% 1.47% 1.54% 1.42%
Net interest margin 4.26% 4.27% 4.34% 4.03%
Efficiency ratio 49.08% 48.92% 48.51% 50.20%
Balance Sheet Highlights
Unaudited
(Amounts in thousands except per
share data) Sept. 30. 2002 Sept. 30. 2001
Total assets $6,073,530 $5,819,571
Total loans 3,398,393 3,448,248
Total deposits 4,259,762 4,179,494
Stockholders' equity 497,336 457,297
Book value per share $10.44 $9.31
Period end shares outstanding 47,616 49,109
Stock Performance Data Quarters Ended Nine Months Ended
Unaudited September 30, September 30,
2002 2001 2002 2001
Market Price:
Quarter End $26.86 $27.02 $26.86 $27.02
High $30.13 $28.00 $32.16 $28.00
Low $23.34 $23.04 $23.34 $20.65
Quarter end price to book value 2.6 x 2.9 x 2.6 x 2.9 x
Quarter end price to consensus
Consensus estimated 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 $0.17 $0.16 $0.51 $0.48
First Midwest Bancorp, Inc.
Condensed Consolidated Statements of Condition
Unaudited(a) September 30,
(Amounts in thousands) 2002 2001
Assets
Cash and due from banks $179,391 $184,120
Funds sold and other short-term
investments 20,706 14,728
Securities available for sale 2,123,412 1,830,378
Securities held to maturity, at
amortized cost 94,533 87,014
Loans 3,398,393 3,448,248
Reserve for loan losses (47,919) (47,745)
Net loans 3,350,474 3,400,503
Premises, furniture and equipment 80,636 77,698
Investment in corporate owned life
insurance 139,902 133,412
Accrued interest receivable and
other assets 84,476 91,718
Total assets $6,073,530 $5,819,571
Liabilities and Stockholders' Equity
Deposits $4,259,762 $4,179,494
Borrowed funds 1,238,846 1,117,013
Accrued interest payable and other
liabilities 77,586 65,767
Total liabilities 5,576,194 5,362,274
Common stock 569 569
Additional paid-in capital 71,124 76,301
Retained earnings 580,707 524,662
Accumulated other comprehensive
income 46,887 16,695
Treasury stock, at cost (201,951) (160,930)
Total stockholders' equity 497,336 457,297
Total liabilities and
stockholders' equity $6,073,530 $5,819,571
(a) While unaudited, the Condensed Consolidated Statements of Condition
have been prepared in accordance with accounting principles generally
accepted in the United States and are derived from quarterly financial
statements and footnote information upon which Ernst & Young LLP,
First Midwest's independent external auditor, has rendered a Quarterly
Review Report.
First Midwest Bancorp, Inc.
Condensed Consolidated Statements
of Income Quarters Ended Nine Months Ended
Unaudited (a) September 30, September 30,
(Amounts in thousands except per
share data) 2002 2001 2002 2001
Interest Income
Loans $56,209 $66,722 $169,865 $203,784
Securities 26,830 28,352 81,027 92,621
Other 220 277 551 749
Total interest income 83,259 95,351 251,443 297,154
Interest Expense
Deposits 20,074 31,762 63,931 108,113
Borrowed funds 7,727 10,310 21,511 38,509
Total interest expense 27,801 42,072 85,442 146,622
Net interest income 55,458 53,279 166,001 150,532
Provision for Loan Losses 3,020 5,248 11,175 12,771
Net interest income after
provision for loan losses 52,438 48,031 154,826 137,761
Noninterest Income
Service charges on deposit accounts 6,439 6,062 18,414 17,643
Trust and investment management
fees 2,543 2,589 7,802 7,910
Other service charges, commissions,
and fees 4,501 4,924 13,252 13,819
Corporate owned life insurance
income 1,831 1,935 5,268 6,222
Securities gains, net 9 55 33 757
Other 1,566 1,673 4,644 5,082
Total noninterest income 16,889 17,238 49,413 51,433
Noninterest Expense
Salaries and employee benefits 21,017 19,519 60,793 57,054
Occupancy expenses 3,682 3,459 10,795 11,392
Equipment expenses 1,956 1,872 5,810 5,715
Technology and related costs 2,448 2,594 7,465 7,693
Other 9,003 9,440 27,493 26,842
Total noninterest expense 38,106 36,884 112,356 108,696
Income before taxes 31,221 28,385 91,883 80,498
Income tax expense 8,542 7,136 24,199 19,634
Net Income $22,679 $21,249 $67,684 $60,864
Diluted Earnings Per Share $0.47 $0.42 $1.39 $1.20
Dividends Declared Per Share $0.17 $0.16 $0.51 $0.48
Weighted Average Diluted Shares
Outstanding 48,146 50,119 48,652 50,794
(a) While unaudited, the Condensed Consolidated Statements of Income have
been prepared in accordance with accounting principles generally
accepted in the United States and are derived from quarterly financial
statements and footnote information upon which Ernst & Young LLP,
First Midwest's independent external auditor, has rendered a Quarterly
Review Report.
First Midwest Bancorp, Inc.
Selected Quarterly Data
Unaudited Year to Date
(Amounts in thousands except per
share data) 2002 2001
Net interest income $166,001 $150,532
Provision for loan losses 11,175 12,771
Noninterest income 49,413 51,433
Noninterest expense 112,356 108,696
Net income 67,684 60,864
Diluted earnings per share $1.39 $1.20
Return on average equity 19.14% 17.76%
Return on average assets 1.54% 1.42%
Net interest margin 4.34% 4.03%
Efficiency ratio 48.51% 50.20%
Period end shares outstanding 47,616 49,109
Book value per share $10.44 $9.31
Dividends per share $0.51 $0.48
Asset Quality
Unaudited Year to Date
(Amounts in thousands) 9/30/02 09/30/01
Nonperforming loans $9,988 $21,425
Foreclosed real estate 2,972 3,651
Loans past due 90 days and still
accruing 9,820 6,117
Nonperforming loans to loans 0.29% 0.62%
Nonperforming assets to loans
plus foreclosed real estate 0.38% 0.73%
Reserve for loan losses to loans 1.41% 1.38%
Reserve for loan losses to
nonperforming loans 480% 223%
Provision for loan losses $11,175 $12,771
Net loan charge-offs 11,001 10,119
Net loan charge-offs to average loans 0.44% 0.41%
First Midwest Bancorp, Inc.
Selected Quarterly Data
Unaudited Quarters Ended
(Amounts in thousands
except per share data) 9/30/02 6/30/02 3/31/02 12/31/01 9/30/01
Net interest income $55,458 $56,296 $54,247 $53,848 $53,279
Provision for loan losses 3,020 3,100 5,055 6,313 5,248
Noninterest income 16,889 16,382 16,142 17,433 17,238
Noninterest expense 38,106 38,614 35,636 36,660 36,884
Net income 22,679 22,934 22,071 21,274 21,249
Diluted earnings per share $0.47 $0.47 $0.45 $0.43 $0.42
Return on average equity 18.46% 19.60% 19.39% 18.24% 18.57%
Return on average assets 1.50% 1.57% 1.55% 1.47% 1.47%
Net interest margin 4.26% 4.43% 4.32% 4.33% 4.27%
Efficiency ratio 49.08% 49.15% 47.26% 48.08% 48.92%
Period end shares
outstanding 47,616 48,165 48,534 48,725 49,109
Book value per share $10.44 $9.91 $9.21 $9.18 $9.31
Dividends per share $0.17 $0.17 $0.17 $0.17 $0.16
Asset Quality
Unaudited Quarters Ended
(Amounts in thousands) 9/30/02 6/30/02 3/31/02 12/31/01 9/30/01
Nonperforming loans $9,988 $11,879 $15,277 $16,847 $21,425
Foreclosed real estate 2,972 4,582 4,289 3,630 3,651
Loans past due 90 days and
still accruing 9,820 3,564 4,739 5,783 6,117
Nonperforming loans to
loans 0.29% 0.35% 0.45% 0.50% 0.62%
Nonperforming assets to
loans plus foreclosed real
estate 0.38% 0.48% 0.58% 0.61% 0.73%
Reserve for loan losses to
loans 1.41% 1.41% 1.42% 1.42% 1.38%
Reserve for loan losses to
nonperforming loans 480% 403% 313% 283% 223%
Provision for loan losses $3,020 $3,100 $5,055 $6,313 $5,248
Net loan charge-offs 2,919 3,056 5,026 6,313 4,208
Net loan charge-offs to
average loans 0.34% 0.36% 0.61% 0.73% 0.49%
SOURCE First Midwest Bancorp, Inc.
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Related links:
http://www.firstmidwest.com
Company News On-Call:
http://www.prnewswire.com/gh/cnoc/comp/122621.html
CONTACT:
Michael L. Scudder, +1-630-875-7283, James M.
Roolf, +1-630-875-7463, both of First Midwest
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