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