Exhibit 99 | ||||||
NewsRelease | ||||||
|
| First Midwest Bancorp | ||||
FOR IMMEDIATE RELEASE | CONTACT: | Michael L. Scudder | ||||
(630) 875-7283 | ||||||
TRADED: | Nasdaq | James M. Roolf | ||||
SYMBOL: | FMBI | (630) 875-7463 | ||||
| ||||||
| ||||||
* | EPS of $.47 vs. $.42 Last Year & $.47 Consensus | |||||
* | ROAA of 1.50% vs. 1.47% Last Year | |||||
* | Asset Quality Remains Sound | |||||
ITASCA, IL, OCTOBER 23, 2002 -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
1
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.
2
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.
3
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.
4
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.
5
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, regula tory 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: |
|
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. |
6
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 | ||||||||||
Stockholder's 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 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 | ||||
7
First Midwest Bancorp, Inc. | Press Release Dated October 23, 2002 | |||||||
Condensed Consolidated Statements of Condition | ||||||||
Unaudited(1) | 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 | ||||
(1) 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.
8
First Midwest Bancorp, Inc. | Press Release Dated October 23, 2002 | ||||||||||||
Condensed Consolidated Statements of Income | Quarters Ended | Nine Months Ended | |||||||||||
Unaudited(1) | 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 | |||||||||
(1) 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.
9
First Midwest Bancorp, Inc. | Press Release Dated October 23, 2002 | ||||||||||||||||||||||||
Selected Quarterly Data | |||||||||||||||||||||||||
Unaudited | Year to Date | Quarters Ended | |||||||||||||||||||||||
(Amounts in thousands except per share data) | 2002 | 2001 | 9/30/02 | 6/30/02 | 3/31/02 | 12/31/01 | 9/30/01 | ||||||||||||||||||
Net interest income | $ | 166,001 | $ | 150,532 | $ | 55,458 | $ | 56,296 | $ | 54,247 | $ | 53,848 | $ | 53,279 | |||||||||||
Provision for loan losses | 11,175 | 12,771 | 3,020 | 3,100 | 5,055 | 6,313 | 5,248 | ||||||||||||||||||
Noninterest income | 49,413 | 51,433 | 16,889 | 16,382 | 16,142 | 17,433 | 17,238 | ||||||||||||||||||
Noninterest expense | 112,356 | 108,696 | 38,106 | 38,614 | 35,636 | 36,660 | 36,884 | ||||||||||||||||||
Net income | 67,684 | 60,864 | 22,679 | 22,934 | 22,071 | 21,274 | 21,249 | ||||||||||||||||||
Diluted earnings per share | $ | 1.39 | $ | 1.20 | $ | 0.47 | $ | 0.47 | $ | 0.45 | $ | 0.43 | $ | 0.42 | |||||||||||
Return on average equity | 19.14% | 17.76% | 18.46% | 19.60% | 19.39% | 18.24% | 18.57% | ||||||||||||||||||
Return on average assets | 1.54% | 1.42% | 1.50% | 1.57% | 1.55% | 1.47% | 1.47% | ||||||||||||||||||
Net interest margin | 4.34% | 4.03% | 4.26% | 4.43% | 4.32% | 4.33% | 4.27% | ||||||||||||||||||
Efficiency ratio | 48.51% | 50.20% | 49.08% | 49.15% | 47.26% | 48.08% | 48.92% | ||||||||||||||||||
Period end shares outstanding | 47,616 | 49,109 | 47,616 | 48,165 | 48,534 | 48,725 | 49,109 | ||||||||||||||||||
Book value per share | $ | 10.44 | $ | 9.31 | $ | 10.44 | $ | 9.91 | $ | 9.21 | $ | 9.18 | $ | 9.31 | |||||||||||
Dividends declared per share | $ | 0.51 | $ | 0.48 | $ | 0.17 | $ | 0.17 | $ | 0.17 | $ | 0.17 | $ | 0.16 | |||||||||||
Asset Quality | |||||||||||||||||||||||||
Unaudited | Year to Date | Quarters Ended | |||||||||||||||||||||||
(Amounts in thousands) | 9/30/02 | 9/30/01 | 9/30/02 | 6/30/02 | 3/31/02 | 12/31/01 | 9/30/01 | ||||||||||||||||||
Nonperforming loans | $ | 9,988 | $ | 21,425 | $ | 9,988 | $ | 11,879 | $ | 15,277 | $ | 16,847 | $ | 21,425 | |||||||||||
Foreclosed real estate | 2,972 | 3,651 | 2,972 | 4,582 | 4,289 | 3,630 | 3,651 | ||||||||||||||||||
Loans past due 90 days and still accruing | 9,820 | 6,117 | 9,820 | 3,564 | 4,739 | 5,783 | 6,117 | ||||||||||||||||||
Nonperforming loans to loans | 0.29% | 0.62% | 0.29% | 0.35% | 0.45% | 0.50% | 0.62% | ||||||||||||||||||
Nonperforming assets to loans plus foreclosed real estate | 0.38% | 0.73% | 0.38% | 0.48% | 0.58% | 0.61% | 0.73% | ||||||||||||||||||
Reserve for loan losses to loans | 1.41% | 1.38% | 1.41% | 1.41% | 1.42% | 1.42% | 1.38% | ||||||||||||||||||
Reserve for loan losses to nonperforming loans | 480% | 223% | 480% | 403% | 313% | 283% | 223% | ||||||||||||||||||
Provision for loan losses | $ | 11,175 | $ | 12,771 | $ | 3,020 | $ | 3,100 | $ | 5,055 | $ | 6,313 | $ | 5,248 | |||||||||||
Net loan charge-offs | 11,001 | 10,119 | 2,919 | 3,056 | 5,026 | 6,313 | 4,208 | ||||||||||||||||||
Net loan charge-offs to average loans | 0.44% | 0.41% | 0.34% | 0.36% | 0.61% | 0.73% | 0.49% | ||||||||||||||||||
10
