FIRST MIDWEST BANCORP INC - FORM 8-K - EX-99.1 - PRESS RELEASE

Attached files

file	filename
8-K - FORM 8-K - FIRST MIDWEST BANCORP INC	d8k.htm
EX-99.2 - FIRST MIDWEST BANCORP, INC. SELECTED FINANCIAL INFORMATION - FIRST MIDWEST BANCORP INC	dex992.htm
EX-99.3 - FOURTH QUARTER 2010 SUPPLEMENTAL SCHEDULES - FIRST MIDWEST BANCORP INC	dex993.htm

Exhibit 99.1


		News Release
First Midwest Bancorp, Inc.		First Midwest Bancorp, Inc. One Pierce Place, Suite 1500 Itasca, Illinois 60143 (630) 875-7450

FOR IMMEDIATE RELEASE	CONTACT:	Paul F. Clemens

		Chief Financial Officer
		(630) 875-7347
TRADED: NASDAQ Global Select Market		www.firstmidwest.com
SYMBOL: FMBI

FIRST MIDWEST BANCORP, INC. ANNOUNCES 2010

FOURTH QUARTER AND FULL YEAR RESULTS

Solid Core Operating Performance - Proactively Addressing Credit, Lower Delinquency Levels -

Strong Capital and Liquidity

Operating Performance

•

Net loss before preferred dividends and accretion on preferred stock of $28.2 million and $9.7 million for fourth quarter and full year 2010 compared to net loss of $37.5 million and $25.8 million for fourth quarter and full year 2009, respectively.

•

Pre-tax, pre-provision core operating earnings of $35.0 million for fourth quarter 2010 and $136.4 million for full year 2010, up 7.2% and 3.8% from fourth quarter and full year 2009, respectively.

•

Average core transactional deposits up $696.8 million, or 17.9%, from fourth quarter 2009.

Capital and Credit

•

Tangible common equity to tangible assets of 7.99% up from 6.29% at December 31, 2009.

•

Non-performing assets, excluding covered assets, of $269.5 million, down 20.0% from December 31, 2009.

•

Allowance for credit losses of $145.1 million represented 2.84% of loans, excluding covered loans, compared to 2.78% at December 31, 2009.

•

Total charge-offs on loans and losses on other real estate owned of $89.3 million, including $47.7 million attributed to shift in disposition strategy for select construction and development problem assets.

•

Loans 30-89 days past due, excluding covered loans, of $23.6 million, down 38% from December 31, 2009 and the lowest level in more than seven years.

ITASCA, IL, January 26, 2011 – Today First Midwest Bancorp, Inc. (the “Company” or “First Midwest”) (NASDAQ NGS: FMBI), the holding company of First Midwest Bank, reported results of operations and financial condition for fourth quarter and full year 2010. Net loss for the quarter was

$28.2 million, before adjustments for preferred dividends and non-vested restricted shares, with a net loss of $30.3 million, or $0.41 per share, available to common shareholders after such adjustments. This compares to net income available to common shareholders of $11 thousand, or $0.00 per share, for third quarter 2010 and a loss of $39.5 million, or $0.73 loss per share, for fourth quarter 2009.

For full year 2010, the Company had a net loss of $9.7 million, before adjustments for preferred dividends and non-vested restricted shares, with a net loss of $19.7 million, or $0.27 per share, available to common shareholders after these adjustments. The current year loss was lower than the full year 2009 net loss available to common shareholders of $35.6 million, or $0.71 loss per share.

Summary Update

“Performance both for the quarter and the year evidenced solid improvement in our core operating business offset by elevated credit costs,” said Michael L. Scudder, President and Chief Executive Officer of First Midwest Bancorp, Inc. “In comparison to last year, pre-tax, pre-provision core operating earnings for the quarter were up 7.2% as we benefited from our consistent focus on relationship-based sales and strategic acquisition activity.”

Mr. Scudder further commented, “We have made notable improvement in non-performing asset and delinquency levels since 2009. However, our credit costs have remained high, largely due to the impact of the lagging market recovery on land and construction related loans and other real estate owned. Year-end assessment of market realities for these asset categories warranted a shift in our planned liquidation strategies and valuations to more aggressively pursue disposition, significantly increasing our fourth quarter credit costs. While painful, these actions should better position the Company to remediate problem assets sooner, lower future remediation costs, and expand and stabilize earnings.” (Refer to the supplemental schedules available on the Company’s website.)

Mr. Scudder concluded, “While signs of economic recovery and stability are emerging, the operating environment remains difficult as we enter 2011. Importantly, while short-term challenges still lay ahead, the strength of our core business, capital foundation, and liquidity position represent a significant competitive advantage as the economy rebounds. These strengths, when combined with the commitment and focus of our 1,800 employees, leave us well positioned to improve our credit and earnings performance, continue the prudent management of capital, and pursue opportunities to invest in our business, all for the benefit of our shareholders.”

Operating Performance

The Company generated pre-tax, pre-provision core operating earnings of $35.0 million for fourth quarter 2010, consistent with third quarter 2010 and up from $32.7 million for fourth quarter 2009. The

improvement compared to the prior year resulted from higher net interest income, which more than offset higher non-interest expense, excluding losses recognized on other real estate owned (“OREO”). A reconciliation of earnings in accordance with U.S. generally accepted accounting principles (“GAAP”) to the non-GAAP financial measures of pre-tax, pre-provision core operating earnings is presented on page 11 of this earnings release.

Average earning assets were $7.4 billion for fourth quarter 2010, an increase of $166.5 million, or 2.3%, from third quarter 2010 and $520.1 million, or 7.5%, from fourth quarter 2009. The increases from both prior periods were due primarily to increases in covered assets acquired in Federal Deposit Insurance Corporation (“FDIC”)-assisted transactions and short-term investments. These increases were partially offset by reductions in loans resulting from net charge-offs of $73.8 million and $147.1 million for fourth quarter and full year 2010, respectively. The Company continues to maintain an elevated level of short-term investments as it manages its liquidity within the current low-yield environment.

Average sources of funding were $7.1 billion for fourth quarter 2010, an increase of $105.7 million, or 1.5%, from third quarter 2010 and $370.5 million, or 5.5%, from fourth quarter 2009. The growth from third quarter resulted from a 2.6% increase in average core transactional deposits, led by an 8.5% increase in demand deposits. Compared to fourth quarter 2009, 20% increases in average demand and money market balances, which were offset by a decline in more expensive short-term borrowings, drove the 5.5% increase. The increase in core transactional deposits reflects industry trends as well as the impact of deposits acquired through FDIC-assisted transactions.

The growth in earning assets from both prior periods generated $1.4 million and $5.6 million of higher net interest income than third quarter 2010 and fourth quarter 2009, respectively.

Fee-based revenues of $22.4 million for fourth quarter 2010 were relatively unchanged compared to third quarter 2010, with the growth in trust and investment advisory fees and card-based fees offsetting declines in service charges on deposits, other service charges, commissions, and fees.

Fee-based revenues increased 1.9% compared to fourth quarter 2009 with the 7.8% decline in service charges on deposits more than offset by increases of 16.0% in card-based fees, 9.1% in trust and investment advisory fees, and 5.3% in other service charges, commissions, and fees (primarily merchant fee income).

Total noninterest income declined 14.9% from third quarter 2010 and 17.6% from fourth quarter 2009 due primarily to lower net securities gains and a $13.1 million gain on an FDIC-assisted transaction in fourth quarter 2009.

Total noninterest expense for fourth quarter 2010 increased $8.3 million from third quarter 2010 primarily as a result of a $7.1 million increase in losses recognized on OREO (discussed below). The majority of the $1.1 million increase in salaries and employee benefits represents the full quarter expense of additional staff hired through the acquisition of Palos Bank and Trust (“Palos”) in third quarter 2010.

Other professional fees fell $1.2 million from third quarter 2010, primarily reflecting third quarter’s higher acquisition and integration expenses. The majority of the $893 thousand increase in other non-interest expense from third quarter 2010 reflected higher technology and network costs, which included a one-time conversion fee related to Palos in fourth quarter 2010, as well as additional costs for servicing larger volumes of transactions relating to the branches added through our FDIC-assisted acquisitions and higher monthly fees for improved network access.

The $1.1 million increase in OREO expenses, net from third quarter 2010 was due to higher costs and commissions related to disposition of properties and seasonal maintenance.

Total noninterest expense rose by $6.6 million, or 9.3%, in fourth quarter 2010 compared to fourth quarter 2009 and $44.0 million, or 18.7%, for full year 2010 compared to full year 2009. The Company recorded integration expenses associated with its FDIC-assisted acquisitions of $576 thousand for fourth quarter 2010 and $3.3 million for full year 2010.

The fourth quarter 2010 increase from fourth quarter 2009 was due to $3.4 million in higher salaries and benefits primarily attributed to the increase in salaries and benefits from fourth quarter 2009 resulting from the addition of retail and commercial sales employees from the Company’s three FDIC-assisted acquisitions and $1.4 million of higher losses and write-downs on OREO.

Asset Quality

Non-performing assets, excluding covered assets, were $269.5 million at December 31, 2010, decreasing $14.1 million, or 5.0%, from September 30, 2010 and $66.5 million, or 20.0%, from December 31, 2009. The reductions were substantially due to charge-offs taken in fourth quarter and full year 2010 offset by loans downgraded to non-accrual status. Non-performing assets, excluding covered assets, represented 5.25% of total loans plus OREO at December 31, 2010 compared to 5.44% at September 30, 2010 and 6.39% at December 31, 2009. Loans 30-89 days delinquent, excluding covered assets, stood at $23.6 million, down $17.9 million, or 43.1% from the September 30, 2010 level.

The allowance for credit losses represented 2.84% of total loans, excluding covered loans, at December 31, 2010 compared to 2.81% at September 30, 2010 and 2.78% at December 31, 2009. The allowance for credit losses as a percentage of non-performing loans, excluding covered loans, was 67% at December 31, 2010 compared to 66% at September 30, 2010 and 58% at December 31, 2009.

Net charge-offs, excluding covered loans, for fourth quarter 2010 were $72.9 million compared to $34.0 million for third quarter 2010 and $82.5 million for fourth quarter 2009. The Company sold $19.8 million of OREO (including $4.7 million of covered OREO) at a loss of $3.5 million during the quarter and recorded OREO write-downs of $11.9 million in noninterest expense. Following year-end assessment of market conditions for construction and development related asset classes, management shifted its strategy to more aggressively pursue disposition of selected problem assets within these classes and adjusted values accordingly. Included in total charge-offs and losses on OREO of $89.3 million for fourth quarter 2010 was an additional $47.7 million attributable to further reductions of carrying value of these selected non-performing assets. The supplemental schedules available on the Company’s website provide a summary of the earnings impact of these actions, as well as additional detail regarding the charge-offs and OREO write-downs by asset class.

Securities Portfolio

Approximately 95% of the Company’s $1.1 billion available-for-sale portfolio is comprised of municipals, collateralized mortgage obligations (“CMOs”), and other mortgage-backed securities. The remainder consists of trust-preferred collateralized debt obligation pools (“CDOs”) with a fair value of $14.9 million and an aggregate unrealized loss of $34.8 million, and miscellaneous other securities totaling $35.0 million. Net securities gains were $1.7 million for fourth quarter 2010 and were net of other-than-temporary impairment charges of $56 thousand on an equity security. Net unrealized losses at December 31, 2010 were $32.5 million, up from $5.8 million at September 30, 2010 and $21.3 million at December 31, 2009 and reflect the impact of the higher interest rate environment on the Company’s portfolio.

Capital Management

As reflected in the table on page 8, all regulatory mandated ratios for characterization as “well-capitalized” were exceeded as of December 31, 2010. The Board of Directors reviews the Company’s capital plan each quarter, giving consideration to the current and expected operating environment, as well as an evaluation of various capital alternatives.

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 98 offices located in 65 communities, primarily in metropolitan Chicago. First Midwest was recently recognized by the Chicago Tribune as one of the top 20 best places to work in Chicago among large employers.

Safe Harbor Statement

This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are not historical facts but instead represent only the Company’s beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of the Company’s control. It is possible that actual results and the Company’s financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. For a discussion of some of the risks and important factors that could affect the Company’s future results, see “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009 and other reports filed with the Securities and Exchange Commission. Forward-looking statements represent management’s best judgment as of the date hereof based on currently available information. Except as required by law, the Company undertakes no duty to update the contents of this press release after the date hereof.

Conference Call

A conference call to discuss the Company’s results, outlook and related matters will be held on Wednesday, January 26, 2011 at 10:00 A.M. (ET). Members of the public who would like to listen to the conference call should dial (877) 317-6789 (U.S. domestic) or (412) 317-6789 (international) and ask for the First Midwest Bancorp, Inc. Earnings Conference Call. The number should be dialed 10 to 15 minutes prior to the start of the conference call. There is no charge to access the call. The conference call will also be accessible as an audio webcast through the Investor Relations section of the Company’s website, www.firstmidwest.com/investorrelations. For those unable to listen to the live broadcast, a replay will be available on the Company’s website or by dialing (877) 344-7529 (U.S. domestic) or (412) 317-0088 (international) conference I.D. 447286 beginning one hour after completion of the live call until 8:00 A.M. (ET) on February 2, 2011. Please direct any questions regarding obtaining access to the conference call to First Midwest Bancorp, Inc. Investor Relations, via e-mail, at investor.relations@firstmidwest.com.

Accompanying Financial Statements and Tables

Accompanying this press release is the following unaudited financial information:

•

Operating Highlights, Balance Sheet Highlights, and Capital Ratios

•

Condensed Consolidated Statements of Financial Condition

•

Condensed Consolidated Statements of Income

•

Pre-Tax, Pre-Provision Core Operating Earnings

•

Loan Portfolio Composition

•

Asset Quality and Asset Quality Ratios, Excluding Covered Assets

•

Covered Assets

•

Non-performing Assets and Past Due Loans

•

Charge-off Data

•

Securities Available-For-Sale

Press Release and Additional Information Available on Website

This press release, the accompanying financial statements and tables, and certain additional unaudited Selected Financial Information are available through the “Investor Relations” section of First Midwest’s website at www.firstmidwest.com.


First Midwest Bancorp, Inc.		Press Release Dated January 26, 2011

Operating Highlights

Unaudited


(Dollar amounts in thousands except per share data)	Quarters Ended									Years Ended
	December 31, 2010			September 30, 2010			December 31, 2009			December 31, 2010			December 31, 2009
Net (loss) income	$	(28,159	)	$	2,585		$	(37,491	)	$	(9,684	)	$	(25,750	)
Net (loss) income applicable to common shares		(30,327	)		11			(39,542	)		(19,717	)		(35,551	)
Diluted (loss) earnings per common share	$	(0.41	)	$	0.00		$	(0.73	)	$	(0.27	)	$	(0.71	)
Return on average common equity		(12.49	%)		0.00	%		(19.84	%)		(2.06	%)		(4.84	%)
Return on average assets		(1.34	%)		0.13	%		(1.92	%)		(0.12	%)		(0.32	%)
Net interest margin		4.02	%		4.05	%		4.04	%		4.13	%		3.72	%
Efficiency ratio		59.08	%		59.91	%		58.48	%		58.84	%		57.86	%

Balance Sheet Highlights

Unaudited


(Dollar amounts in thousands except per share data)	As Of
	December 31, 2010		September 30, 2010		December 31, 2009
Total assets	$	8,146,973	$	8,376,494	$	7,710,672
Total loans, excluding covered loans		5,100,560		5,164,666		5,203,246
Covered assets ⁽¹⁾		493,319		519,305		223,245
Total deposits		6,511,476		6,677,259		5,885,279
Total stockholders’ equity		1,112,045		1,160,059		941,521
Common stockholders’ equity		919,045		967,059		748,521
Book value per common share	$	12.40	$	13.06	$	13.66
Period end common shares outstanding		74,096		74,057		54,793

⁽¹⁾	Covered assets were obtained through the FDIC-assisted transactions related to First DuPage Bank on October 23, 2009, Peotone Bank and Trust Company on April 23, 2010, and Palos Bank and Trust Company on August 13, 2010. Refer to table on page 14.

Capital Ratios

Unaudited


	As Of
	December 31, 2010			September 30, 2010			December 31, 2009
Regulatory capital ratios:
Total capital to risk-weighted assets		16.18	%		16.82	%		13.94	%
Tier 1 capital to risk-weighted assets		14.12	%		14.77	%		11.88	%
Tier 1 leverage to average assets		11.10	%		11.99	%		10.18	%

Regulatory capital ratios, excluding preferred stock:
Total capital to risk-weighted assets		13.13	%		13.81	%		10.93	%
Tier 1 capital to risk-weighted assets		11.06	%		11.76	%		8.88	%
Tier 1 leverage to average assets		8.70	%		9.55	%		7.61	%

Tier 1 common capital to risk-weighted assets		9.72	%		10.44	%		7.56	%

Tangible common equity ratios:
Tangible common equity to tangible assets		7.99	%		8.34	%		6.29	%
Tangible common equity, excluding accumulated other comprehensive loss, to tangible assets		8.34	%		8.46	%		6.54	%
Tangible common equity to risk-weighted assets		9.93	%		10.51	%		7.27	%


First Midwest Bancorp, Inc.		Press Release Dated January 26, 2011

Condensed Consolidated Statements of Financial Condition


Unaudited	December 31,
(Amounts in thousands)	2010			2009
*Assets*
Cash and due from banks	$	102,495		$	101,177
Federal funds sold and other short-term investments		483,281			26,202
Trading account securities, at fair value		15,282			14,236
Securities available-for-sale, at fair value		1,057,802			1,266,760
Securities held-to-maturity, at amortized cost		81,320			84,182
Federal Home Loan Bank and Federal Reserve Bank stock, at cost		61,338			56,428
Loans, excluding covered loans		5,100,560			5,203,246
Covered loans		374,640			146,319
Allowance for loan losses		(142,572	)		(144,808	)


Net loans		5,332,628			5,204,757

Other real estate owned (“OREO”), excluding covered OREO		31,069			57,137
Covered OREO		29,698			8,981
Federal Deposit Insurance Corporation (“FDIC”) indemnification asset		88,981			67,945
Premises, furniture, and equipment		140,907			120,642
Investment in bank owned life insurance		197,644			197,962
Goodwill and other intangible assets		291,383			281,479
Accrued interest receivable and other assets		233,145			222,784


Total assets	$	8,146,973		$	7,710,672


*Liabilities and Stockholders’ Equity*
Deposits
Transactional deposits	$	4,519,492		$	3,885,885
Time deposits		1,991,984			1,999,394


Total deposits		6,511,476			5,885,279
Borrowed funds		303,974			691,176
Subordinated debt		137,744			137,735
Accrued interest payable and other liabilities		81,734			54,961


Total liabilities		7,034,928			6,769,151

Preferred stock		190,882			190,233
Common stock		858			670
Additional paid-in capital		437,550			252,322
Retained earnings		787,678			810,626
Accumulated other comprehensive loss, net of tax		(27,739	)		(18,666	)
Treasury stock, at cost		(277,184	)		(293,664	)


Total stockholders’ equity		1,112,045			941,521


Total liabilities and stockholders’ equity	$	8,146,973		$	7,710,672


First Midwest Bancorp, Inc.		Press Release Dated January 26, 2011

Condensed Consolidated Statements of Income


Unaudited	Quarters Ended									Years Ended
(Amounts in thousands, except per share data)	December 31, 2010			September 30, 2010			December 31, 2009			December 31, 2010			December 31, 2009
*Interest Income*
Loans	$	63,983		$	65,416		$	65,668		$	259,318		$	261,221
Securities		10,230			11,920			14,848			49,801			77,486
Covered loans		7,431			4,294			1,419			17,285			1,419
Federal funds sold and other short-term investments		832			708			435			2,463			1,625

Total interest income		82,476			82,338			82,370			328,867			341,751

*Interest Expense*
Deposits		7,907			9,049			12,774			37,127			64,177
Borrowed funds		711			797			1,276			3,267			12,569
Subordinated debt		2,279			2,279			2,379			9,124			13,473

Total interest expense		10,897			12,125			16,429			49,518			90,219

Net interest income		71,579			70,213			65,941			279,349			251,532
Provision for loan losses		73,897			33,576			93,000			147,349			215,672

Net interest income (loss) after provision for loan losses		(2,318	)		36,637			(27,059	)		132,000			35,860

*Noninterest Income*
Service charges on deposit accounts		9,202			9,249			9,977			35,884			38,754
Trust and investment advisory fees		4,040			3,728			3,704			15,063			14,059
Other service charges, commissions, and fees		4,506			4,932			4,280			18,238			16,529
Card-based fees		4,640			4,547			4,000			17,577			15,826

Total fee-based revenues		22,388			22,456			21,961			86,762			85,168
Bank owned life insurance income		696			267			281			1,560			2,263
Securities gains (losses), net		1,662			6,376			(5,772	)		12,216			2,110
Gains on FDIC-assisted transactions		—			—			13,071			4,303			13,071
Gains on early extinguishment of debt		—			—			1,267			—			15,258
Other		1,421			1,654			939			3,710			5,132

Total noninterest income		26,167			30,753			31,747			108,551			123,002

*Noninterest Expense*
Salaries and employee benefits		31,028			29,926			27,592			114,378			106,548
Losses realized on OREO		15,412			8,265			14,051			40,480			18,554
OREO expense, net		2,408			1,312			1,642			9,554			4,905
FDIC insurance		2,967			2,835			2,720			10,880			13,673
Net occupancy and equipment expense		7,916			8,326			7,661			32,218			31,724
Loan remediation expense		2,330			2,817			2,890			11,020			7,458
Other professional fees		2,194			3,370			2,478			11,883			8,338
Other		12,819			11,926			11,487			48,366			43,588

Total noninterest expense		77,074			68,777			70,521			278,779			234,788

Loss before income tax benefit		(53,225	)		(1,387	)		(65,833	)		(38,228	)		(75,926	)
Income tax benefit		(25,066	)		(3,972	)		(28,342	)		(28,544	)		(50,176	)

Net (loss) income		(28,159	)		2,585			(37,491	)		(9,684	)		(25,750	)
Preferred dividends		(2,579	)		(2,575	)		(2,569	)		(10,299	)		(10,265	)
Net loss (income) applicable to non-vested restricted shares		411			1			518			266			464

Net (Loss) Income Applicable to Common Shares	$	(30,327	)	$	11		$	(39,542	)	$	(19,717	)	$	(35,551	)

Diluted Loss Per Common Share	$	(0.41	)	$	—		$	(0.73	)	$	(0.27	)	$	(0.71	)
Dividends Declared Per Common Share	$	0.01		$	0.01		$	0.01		$	0.04		$	0.04
Weighted Average Diluted Common Shares Outstanding		73,085			73,072			54,152			72,422			50,034


First Midwest Bancorp, Inc.		Press Release Dated January 26, 2011

Pre-Tax, Pre-Provision Core Operating Earnings ⁽¹⁾



Unaudited

(Dollar amounts in thousands)

	Quarters Ended									Years Ended
	December 31, 2010			September 30, 2010			December 31, 2009			December 31, 2010			December 31, 2009
Loss before income tax benefit (benefit) expense	$	(53,225	)	$	(1,387	)	$	(65,833	)	$	(38,228	)	$	(75,926	)
Provision for loan losses		73,897			33,576			93,000			147,349			215,672

Pre-tax, pre-provision earnings		20,672			32,189			27,167			109,121			139,746


*Non-Operating Items*

Securities gains (losses), net		1,662			6,376			(5,772	)		12,216			2,110
Gains on FDIC-assisted transactions		—			—			13,071			4,303			13,071
Gains on early extinguishment of debt		—			—			1,267			—			15,258

Losses realized on OREO		(15,412	)		(8,265	)		(14,051	)		(40,480	)		(18,554	)
Integration costs associated with FDIC-assisted acquisitions		(576	)		(847	)		—			(3,324	)		—
FDIC special deposit insurance assessment		—			—			—			—			(3,500	)

Total non-operating items		(14,326	)		(2,736	)		(5,485	)		(27,285	)		8,385

Pre-tax, pre-provision core operating earnings	$	34,998		$	34,925		$	32,652		$	136,406		$	131,361

Pre-tax, pre-provision core operating earnings to risk- weighted assets		2.21	%		2.18	%		2.03	%		2.16	%		2.04	%

⁽¹⁾

The Company’s accounting and reporting policies conform to U.S. generally accepted accounting principles (“GAAP”) and general practice within the banking industry. As a supplement to GAAP, the Company has provided this non-GAAP performance result. The Company believes that this non-GAAP financial measure is useful because it allows investors to assess the Company’s operating performance. Although this non-GAAP financial measure is intended to enhance investors’ understanding of the Company’s business and performance, this non-GAAP financial measure should not be considered an alternative to GAAP.


First Midwest Bancorp, Inc.		Press Release Dated January 26, 2011

Loan Portfolio Composition


Unaudited

(Dollar amounts in thousands)
	As Of									Percent Change From
	12/31/10		% of Total			9/30/10		12/31/09		9/30/10			12/31/09
Corporate:
Commercial and industrial	$	1,465,903		28.7	%	$	1,472,439	$	1,438,063		(0.4	%)		1.9	%
Agricultural and farmland		227,756		4.5	%		212,800		209,945		7.0	%		8.5	%
Commercial real estate:
Office		396,836		7.8	%		402,947		394,228		(1.5	%)		0.7	%
Retail		328,751		6.4	%		329,153		331,803		(0.1	%)		(0.9	%)
Industrial		478,026		9.4	%		483,549		486,934		(1.1	%)		(1.8	%)

Total office, retail, and industrial		1,203,613		23.6	%		1,215,649		1,212,965		(1.0	%)		(0.8	%)

Construction:
Residential construction		174,690		3.4	%		226,126		313,919		(22.7	%)		(44.4	%)
Commercial construction and land		164,472		3.2	%		193,041		231,518		(14.8	%)		(29.0	%)

Total construction		339,162		6.6	%		419,167		545,437		(19.1	%)		(37.8	%)

Multi-family		349,862		6.9	%		350,458		333,961		(0.2	%)		4.8	%
Investor-owned rental property		124,671		2.4	%		119,974		119,132		3.9	%		4.6	%
Other commercial real estate		731,686		14.4	%		717,903		679,851		1.9	%		7.6	%

Total commercial real estate		2,748,994		53.9	%		2,823,151		2,891,346		(2.6	%)		(4.9	%)

Total corporate loans		4,442,653		87.1	%		4,508,390		4,539,354		(1.5	%)		(2.1	%)

Consumer:
Home equity		445,243		8.7	%		457,981		470,523		(2.8	%)		(5.4	%)
Real estate 1-4 family		160,890		3.2	%		150,110		139,983		7.2	%		14.9	%
Other consumer		51,774		1.0	%		48,185		53,386		7.4	%		(3.0	%)

Total consumer loans		657,907		12.9	%		656,276		663,892		0.2	%		(0.9	%)

Total loans, excluding covered loans		5,100,560		100.0	%		5,164,666		5,203,246		(1.2	%)		(2.0	%)

Covered loans		374,640					399,032		146,319

Total loans	$	5,475,200				$	5,563,698	$	5,349,565


First Midwest Bancorp, Inc.		Press Release Dated January 26, 2011

Asset Quality, Excluding Covered Assets


Unaudited

(Dollar amounts in thousands)	As Of
	12/31/10			% of Loan Category			% of Total			9/30/10			12/31/09
Non-accrual loans:
Commercial and industrial	$	50,088			3.42	%		23.7	%	$	40,955		$	28,193
Agricultural and farmland		2,497			1.10	%		1.2	%		3,495			2,673
Office, retail, and industrial		19,573			1.63	%		9.2	%		21,721			21,396
Residential construction		52,122			29.84	%		24.6	%		61,050			112,798
Commercial construction and land		28,685			17.44	%		13.5	%		21,471			20,864
Multi-family		6,203			1.77	%		2.9	%		6,813			12,486
Investor-owned rental property		6,039			4.84	%		2.9	%		4,107			4,351
Other commercial real estate		34,566			4.72	%		16.3	%		40,409			28,006
Consumer		12,009			1.83	%		5.7	%		11,345			13,448

Total non-accrual loans		211,782			4.15	%		100.0	%		211,366			244,215

90 days past due loans (still accruing interest):
Commercial and industrial		1,552			0.11	%		36.6	%		2,909			1,964
Agricultural and farmland		187			0.08	%		4.4	%		2			—
Office, retail, and industrial		—			0.00	%		0.0	%		460			330
Residential construction		200			0.11	%		4.7	%		408			86
Commercial construction and land		—			0.00	%		0.0	%		—			—
Multi-family		—			0.00	%		0.0	%		—			55
Investor-owned rental property		135			0.11	%		3.2	%		562			225
Other commercial real estate		210			0.03	%		4.9	%		2,858			130
Consumer		1,960			0.30	%		46.2	%		1,937			1,289

Total 90 days past due loans		4,244			0.08	%		100.0	%		9,136			4,079

Total non-performing loans		216,026									220,502			248,294
Restructured loans, still accruing interest		22,371									11,002			30,553
OREO, excluding covered OREO		31,069									52,044			57,137

Total non-performing assets	$	269,466								$	283,548		$	335,984

30-89 days past due loans	$	23,646			0.46	%				$	41,590		$	37,912
Allowance for credit losses ⁽¹⁾	$	145,072								$	145,019		$	144,808

*Asset Quality Ratios, Excluding Covered Assets*
Non-accrual loans to loans		4.15	%								4.09	%		4.69	%
Non-performing loans to loans		4.24	%								4.27	%		4.77	%
Non-performing assets to loans plus OREO		5.25	%								5.44	%		6.39	%
Allowance for credit losses to loans		2.84	%								2.81	%		2.78	%
Allowance for credit losses to non-accrual loans		69	%								69	%		59	%
Allowance for credit losses to non-performing loans		67	%								66	%		58	%

⁽¹⁾	The allowance for credit losses includes a liability for unfunded commitments of $2.5 million as of December 31, 2010 and $450 thousand as of September 30, 2010.


First Midwest Bancorp, Inc.		Press Release Dated January 26, 2011

Covered Assets ⁽¹⁾


Unaudited

(Dollar amounts in thousands)	As Of
	December 31, 2010		September 30, 2010			December 31, 2009

Loans⁽²⁾	$	374,640	$	399,032		$	146,319

FDIC indemnification asset		88,981		88,723			67,945

Other real estate owned ⁽²⁾		29,698		31,550			8,981


Total covered assets	$	493,319	$	519,305		$	223,245


90 days or more past due loans ⁽³⁾	$	86,910	$	74,777		$	30,286

30-89 days past due loans ⁽³⁾	$	18,445	$	24,005		$	22,988

Net charge-offs (recoveries) – quarter to date	$	935	$	(11	)	$	—

⁽¹⁾	Covered assets were obtained through the FDIC-assisted transactions related to First DuPage Bank on October 23, 2009, Peotone Bank and Trust Company on April 23, 2010, and Palos Bank and Trust Company on August 13, 2010.

⁽²⁾	Covered loans and other real estate owned are subject to loss sharing agreements with the FDIC whereby the Company is indemnified against the majority of any losses incurred related to these assets.

⁽³⁾	These loans are past due based on contractual terms, but are performing according to the Company’s expectations of cash flows.


First Midwest Bancorp, Inc.		Press Release Dated January 26, 2011

Non-performing Assets and Past Due Loans


Unaudited

(Dollar amounts in thousands)	As Of
	2 010												2009
	December 31			September 30			June 30			March 31			December 31
*Non-performing assets, excluding covered assets*
Non-accrual loans	$	211,782		$	211,366		$	193,689		$	216,073		$	244,215
90 days or more past due loans		4,244			9,136			6,280			7,995			4,079

Total non-performing loans		216,026			220,502			199,969			224,068			248,294
Restructured loans (still accruing interest)		22,371			11,002			9,030			5,168			30,553
Other real estate owned		31,069			52,044			57,023			62,565			57,137

Total non-performing assets	$	269,466		$	283,548		$	266,022		$	291,801		$	335,984

30-89 days past due loans	$	23,646		$	41,590		$	32,012		$	28,018		$	37,912

Non-accrual loans to total loans		4.15	%		4.09	%		3.72	%		4.16	%		4.69	%
Non-performing loans to total loans		4.24	%		4.27	%		3.84	%		4.31	%		4.77	%
Non-performing assets to loans plus OREO		5.25	%		5.44	%		5.05	%		5.55	%		6.39	%
*Covered assets ⁽¹⁾*
Non-accrual loans	$	—		$	—		$	—		$	—		$	—
90 days or more past due loans ⁽²⁾		86,910			74,777			47,912			52,464			30,286

Total non-performing loans		86,910			74,777			47,912			52,464			30,286
Restructured loans (still accruing interest)		—			—			—			—			—
Other real estate owned		29,698			31,550			10,657			8,649			8,981

Total non-performing assets	$	116,608		$	106,327		$	58,569		$	61,113		$	39,267

30-89 days past due loans	$	18,445		$	24,005		$	13,725		$	10,175		$	22,988
*Non-performing assets, including covered assets*
Non-accrual loans	$	211,782		$	211,366		$	193,689		$	216,073		$	244,215
90 days or more past due loans		91,154			83,913			54,192			60,459			34,365

Total non-performing loans		302,936			295,279			247,881			276,532			278,580
Restructured loans (still accruing interest)		22,371			11,002			9,030			5,168			30,553
Other real estate owned		60,767			83,594			67,680			71,214			66,118

Total non-performing assets	$	386,074		$	389,875		$	324,591		$	352,914		$	375,251

30-89 days past due loans	$	42,091		$	65,595		$	45,737		$	38,193		$	60,900

Non-accrual loans to total loans		3.87	%		3.80	%		3.60	%		4.05	%		4.57	%
Non-performing loans to total loans		5.53	%		5.31	%		4.61	%		5.18	%		5.21	%
Non-performing assets to loans plus OREO		6.97	%		6.90	%		5.97	%		6.52	%		6.93	%

⁽¹⁾	Covered assets were recorded at their estimated fair values at the time of acquisition. These assets are covered by loss sharing agreements with the FDIC that substantially mitigate the risk of loss.

⁽²⁾	These loans are past due based on contractual terms, but are performing according to the Company’s expectations of cash flows.


First Midwest Bancorp, Inc.		Press Release Dated January 26, 2011

Charge-off Data


Unaudited

(Dollar amounts in thousands)

	Quarters Ended
	12/31/10			% of Loan Category			% of Total			9/30/10			12/31/09
Net loans charged-off:
Commercial and industrial	$	10,198			0.70	%		14.0	%	$	13,262		$	23,320
Agricultural and farmland		125			0.05	%		0.2	%		489			180
Office, retail, and industrial		2,888			0.24	%		4.0	%		2,825			3,265
Residential construction		35,935			20.57	%		49.3	%		4,460			38,315
Commercial construction and land		7,743			4.71	%		10.6	%		228			2,714
Multi-family		1,206			0.34	%		1.6	%		222			2,325
Investor-owned rental property		799			0.64	%		1.1	%		748			1,229
Other commercial real estate		11,403			1.56	%		15.6	%		9,469			7,908
Consumer		2,612			0.40	%		3.6	%		2,342			3,205

Total net loans charged-off, excluding covered assets		72,909			1.43	%		100.0	%		34,045			82,461

Net charge-offs (recoveries) on covered loans		935									(11	)		—

Total net charge-offs	$	73,844								$	34,034		$	82,461


Net loan charge-offs, excluding covered charge-offs, to average loans, annualized:
Quarter-to-date		5.61	%								2.59	%		6.17	%
Year-to-date		2.80	%								1.87	%		3.08	%


First Midwest Bancorp, Inc.		Press Release Dated January 26, 2011

Securities Available-For-Sale


Unaudited

(Dollar amounts in thousands)

	U.S. Agency			Collateralized Mortgage Obligations			Other Mortgage Backed			State and Municipal			Collateralized Debt Obligations			Other			Total
*As of December 31, 2010*
Amortized cost	$	18,000		$	377,692		$	100,780		$	512,063		$	49,695		$	32,070		$	1,090,300
Gross unrealized gains (losses):
Gross unrealized gains		7			4,261			5,732			4,728			—			2,957			17,685
Gross unrealized losses		(121	)		(2,364	)		(61	)		(12,800	)		(34,837	)		—			(50,183	)

Net unrealized gains (losses)		(114	)		1,897			5,671			(8,072	)		(34,837	)		2,957			(32,498	)

Fair value	$	17,886		$	379,589		$	106,451		$	503,991		$	14,858		$	35,027		$	1,057,802


*As of September 30, 2010*
Amortized cost	$	24,088		$	297,935		$	107,966		$	549,505		$	49,695		$	35,270		$	1,064,459
Gross unrealized gains (losses):
Gross unrealized gains		68			4,702			6,070			19,834			—			2,368			33,042
Gross unrealized losses		(21	)		(1,639	)		(28	)		(805	)		(36,271	)		(128	)		(38,892	)

Net unrealized gains (losses)		47			3,063			6,042			19,029			(36,271	)		2,240			(5,850	)

Fair value	$	24,135		$	300,998		$	114,008		$	568,534		$	13,424		$	37,510		$	1,058,609


*As of December 31, 2009*
Amortized cost	$	756		$	299,920		$	239,567		$	649,269		$	54,359		$	44,238		$	1,288,109
Gross unrealized gains (losses):
Gross unrealized gains		—			10,060			9,897			8,462			—			2,376			30,795
Gross unrealized losses		—			(2,059	)		(182	)		(6,051	)		(42,631	)		(1,221	)		(52,144	)

Net unrealized gains (losses)		—			8,001			9,715			2,411			(42,631	)		1,155			(21,349	)

Fair value	$	756		$	307,921		$	249,282		$	651,680		$	11,728		$	45,393		$	1,266,760

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FIRST MIDWEST BANCORP INC Reports