Exhibit 99
News Release | ||||||
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| First Midwest Bancorp | ||||
FOR IMMEDIATE RELEASE | CONTACT: | Michael L. Scudder | ||||
EVP, CFO | ||||||
(630) 875-7283 | ||||||
TRADED: | Nasdaq | James M. Roolf | ||||
SYMBOL: | FMBI | Investor Relations | ||||
(630) 875-7463 | ||||||
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* | EPS Increased 9.3% to $.47 vs. $.43 Last Year | |||||
* | ROAA of 1.49% vs. 1.47% Last Year | |||||
* | Continued Sound Asset Quality | |||||
* | Record Efficiency Ratio of 47.2% | |||||
* | Quarterly Cash Dividend Increased 11.8% | |||||
ITASCA, IL, JANUARY 22, 2003 -First Midwest Bancorp, Inc.(Nasdaq: FMBI) today reported net income for fourth quarter ended December 31, 2002 increased to $22.5 million, or $.47 per diluted share, as compared to 2001's like quarter of $21.3 million, or $.43 per diluted share, representing an increase of 9.3% on a per diluted share basis. Performance for fourth quarter 2002 resulted in an annualized return on average assets of 1.49% as compared to 1.47% for fourth quarter 2001 and an annualized return on average equity of 17.9% as compared to 18.2% for fourth quarter 2002. The quarter's earnings of $.47 per diluted share was consistent with both First Midwest's guidance and First Call's consensus earnings estimate.
For 2002, net income increased to a record $90.2 million, or $1.86 per diluted share, as compared to 2001's $82.1 million, or $1.63 per diluted share, representing an increase of 14.1% on a
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per diluted share basis. Performance for 2002 resulted in an annualized return on average assets of 1.53% as compared to 1.43% for 2001 and an annualized return on average equity of 18.8% as compared to 2001's 17.9%.
Net Interest Margin
Net interest income was $52.8 million for fourth quarter 2002 as compared to $53.8 million for 2001's fourth quarter or a decrease of 2.0%. Net interest margin for fourth quarter 2002 was 4.10%, down from 4.33% for fourth quarter 2001 and 4.26% for third quarter 2002. Consistent with First Midwest's expectations, the margin contraction from third quarter 2002 resulted primarily from lower earning asset rates due to the continued low interest rate environment, management's steps taken during the year to insulate net interest income against the potential for rising interest rates, and the impact of refinance related prepayments on mortgage-backed securities. This was partially offset by the Federal Reserve lowering the federal funds rate by 50 basis points on November 6, 2002, which positively impacted margin as interest bearing liabilities were able to be repriced more quickly than interest bearing assets. The expectation of continued low interest rates is likely to maintain pressure on interest margins g oing forward in 2003.
Loan Growth and Funding
Total loans at December 31, 2002 were 1% higher than December 31, 2001 with all loan categories experiencing growth except for 1-4 family real estate and indirect lending. On a linked-quarter basis, total loans remained stable as growth in commercial real estate and construction lending offset decreases in 1-4 family real estate, direct consumer and indirect lending. Mindful of the uncertain economy, First Midwest has remained steadfast in its focus on both sound underwriting and profitable pricing.
Total average deposits for fourth quarter 2002 were essentially unchanged from the prior year's like quarter and were down 1.3% on a linked-quarter basis. Reflective of customer liquidity preferences and targeted sales promotions, average balances maintained in demand, savings and Now accounts were relatively stable on a linked-quarter basis while growing $266 million, or 15.5%, from the prior year's like quarter. As compared to fourth quarter 2001, money market and time deposits decreased by $68
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million and $175 million, respectively, as pricing strategies encouraged customers desiring shorter-term maturities to transfer balances to the targeted transactional accounts (demand, savings and Now) just described.
Noninterest Income and Expense
Excluding net securities gains, total noninterest income for fourth quarter 2002 decreased by 1.4% from 2001's like quarter while full year 2002 decreased by 2.3% from 2001. On a linked-quarter basis, noninterest income increased by 1.6% evidencing continued improvement in service charges on deposit accounts and stabilizing trust income while offsetting lower income from corporate owned life insurance.
Total noninterest expenses for fourth quarter 2002 decreased 2.6% from 2001's fourth quarter while such expenses for full year 2002 increased 1.9% over 2001. The elimination of goodwill amortization expense (resulting from the implementation of Financial Accounting Standard No. 142 effective January 1, 2002) reduced noninterest expense for fourth quarter 2002 and full year 2002 by $.5 million and $2.2 million, respectively. Factoring out the elimination of goodwill amortization expense, total noninterest expense for fourth quarter 2002 decreased by 1.2% from 2001's like period while such expenses for full year 2002 increased 3.4% over 2001.
The combination of top line revenue performance and continued cost control resulted in record efficiency ratios for both fourth quarter 2002 and full year 2002 of 47.2% and 48.2%, respectively, continuing the strong performance of this key ratio.
Credit Quality
By most credit measures, the level of overall credit quality as of year-end 2002 equaled or exceeded that of the last five years despite the continuing economic slowdown and the well-publicized credit problems within the industry. Nonperforming loans at December 31, 2002 represented .37% of loans, improved from .50% at year-end 2001 and stood at the lowest year-end level in the last five years. Further, nonperforming assets totaled $18 million at December 31, 2002 as compared to $20 million at year end 2001 and also represented the lowest such year-end level in the last five years. Additionally, loans past due 90 days and still accruing totaled $3.3 million at December 31, 2002 as compared to $5.8 million at year-end 2001, representing the lowest quarter-end level in the last eight years.
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Net charge-offs for fourth quarter and full year 2002 were .49% and .45% of average loans, respectively, as compared to.73% and .49% for fourth quarter and full year 2001, respectively. Provisions for loan losses for both fourth quarter and year 2002 fully covered net charge-offs resulting in the ratio of the reserve for loan losses to total loans at December 31, 2002 being maintained at 1.41% and approximating the level of the last nine quarters. Importantly, the reserve for loan losses at December 31, 2002 represented 383% of nonperforming loans as compared to 283% at year-end 2001, again, representing the highest year-end level in the last five years.
First Midwest continues to have virtually no credit exposure to such high profile sectors as energy, cable, telecommunication and airlines nor participation in shared national credits or syndicated loans.
Capital Management
First Midwest continued to repurchase its common stock during fourth quarter 2002 with approximately 417,000 shares being repurchased at an average price of approximately $27.43 per share. For the year 2002 approximately 1,866,000 shares were repurchased at an average price of $27.93 per share. As with all such share repurchases to date, the repurchases of 2002 were effected utilizing cash on hand. As of December 31, 2002, approximately 2.4 million shares remained under First Midwest's existing repurchase authorization.
As of December 31, 2002 First Midwest's Total Risk Based Capital and Tier 1 Risk Based Capital ratios were 11.03% and 9.93%, respectively, exceeding 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 7.32% again exceeding the regulatory minimum range of 3% - 5% required to be considered a "well capitalized" institution. As of December 31, 2002, First Midwest had capital of approximately $45.1 million greater than the most restrictive regulatory minimum capital level required to be considered a "well capitalized" institution.
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Dividend Increase
On November 20, 2002, First Midwest increased the quarterly cash dividend from $.17 to $.19 per share, an increase of 11.8%. This action represented the eleventh dividend increase of the last ten years and the 81st consecutive quarterly dividend distribution since First Midwest's formation in 1983. Based on the December 31, 2002 closing price of $26.71 per share, the current dividend rate represents an annual yield of 2.85%.
Outlook for 2003
First Midwest expects that the year 2003 will prove to be challenging given the low absolute level of interest rates, uncertain economic and market conditions and investor concerns regarding the pace and timing of economic recovery. Nonetheless, First Midwest is guardedly optimistic about its 2003 prospects and is comfortable with the mid to high single digit growth in earnings per diluted share implicit in the current 2003 analyst consensus estimate. 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.
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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: |
* 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 January 22, 2003 | |||||||||||
Operating Highlights | Quarters Ended | Years Ended | ||||||||||
Unaudited | December 31, | December 31, | ||||||||||
(Amounts in thousands except per share data) | 2002 | 2001 | 2002 | 2001 | ||||||||
Net income | $ | 22,466 | $ | 21,274 | $ | 90,150 | $ | 82,138 | ||||
Diluted earnings per share | $ | 0.47 | $ | 0.43 | $ | 1.86 | $ | 1.63 | ||||
Return on average equity | 17.92% | 18.24% | 18.82% | 17.89% | ||||||||
Return on average assets | 1.49% | 1.47% | 1.53% | 1.43% | ||||||||
Net interest margin | 4.10% | 4.33% | 4.28% | 4.10% | ||||||||
Efficiency ratio | 47.24% | 48.08% | 48.20% | 49.65% | ||||||||
Balance Sheet Highlights | ||||||||||||
Unaudited | ||||||||||||
(Amounts in thousands except per share data) | Dec. 31, 2002 | Dec. 31, 2001 | ||||||||||
Total assets | $ | 5,980,533 | $ | 5,667,919 | ||||||||
Total loans | 3,406,846 | 3,372,306 | ||||||||||
Total deposits | 4,172,954 | 4,193,921 | ||||||||||
Stockholder's equity | 491,953 | 447,267 | ||||||||||
Book value per share | $10.42 | $9.18 | ||||||||||
Period end shares outstanding | 47,206 | 48,725 | ||||||||||
Stock Performance Data | Quarters Ended | Years Ended | ||||||||||
Unaudited | December 31, | December 31, | ||||||||||
2002 | 2001 | 2002 | 2001 | |||||||||
Market Price: | ||||||||||||
Quarter End | $ | 26.71 | $ | 29.19 | $ | 26.71 | $ | 29.19 | ||||
High | $ | 28.79 | $ | 29.81 | $ | 32.16 | $ | 29.81 | ||||
Low | $ | 23.80 | $ | 24.54 | $ | 23.34 | $ | 20.65 | ||||
Period end price to book value | 2.6 | x | 3.2 | x | 2.6 | x | 3.2 | x | ||||
Period end price to: | ||||||||||||
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 | $ | 0.19 | $ | 0.17 | $ | 0.70 | $ | 0.65 | ||||
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First Midwest Bancorp, Inc. | Press Release Dated January 22, 2003 | |||||||
Condensed Consolidated Statements of Condition | ||||||||
December 31, | ||||||||
(Amounts in thousands) | 2002 | 2001 | ||||||
Unaudited(1) | Audited | |||||||
Assets | ||||||||
Cash and due from banks | $ | 195,153 | $ | 155,822 | ||||
Funds sold and other short-term investments | 30,266 | 19,574 | ||||||
Securities available for sale | 1,986,186 | 1,771,607 | ||||||
Securities held to maturity, at amortized cost | 105,413 | 89,227 | ||||||
Loans | 3,406,846 | 3,372,306 | ||||||
Reserve for loan losses | (47,929) | (47,745) | ||||||
Net loans | 3,358,917 | 3,324,561 | ||||||
Premises, furniture and equipment | 81,627 | 77,172 | ||||||
Investment in corporate owned life insurance | 141,362 | 135,280 | ||||||
Accrued interest receivable and other assets | 81,609 | 94,676 | ||||||
Total assets | $ | 5,980,533 | $ | 5,667,919 | ||||
Liabilities and Stockholders' Equity | ||||||||
Deposits | $ | 4,172,954 | $ | 4,193,921 | ||||
Borrowed funds | 1,237,408 | 971,851 | ||||||
Accrued interest payable and other liabilities | 78,218 | 54,880 | ||||||
Total liabilities | 5,488,580 | 5,220,652 | ||||||
Common stock | 569 | 569 | ||||||
Additional paid-in capital | 71,020 | 74,961 | ||||||
Retained earnings | 594,192 | 537,600 | ||||||
Accumulated other comprehensive income | 39,365 | 5,265 | ||||||
Treasury stock, at cost | (213,193) | (171,128) | ||||||
Total stockholders' equity | 491,953 | 447,267 | ||||||
Total liabilities and stockholders' equity | $ | 5,980,533 | $ | 5,667,919 | ||||
(1) While unaudited, the 2002 Condensed Consolidated Statement of Condition has been prepared in accordance with accounting principles generally accepted in the United States and is derived from the 2002 financial statements on which Ernst & Young LLP, First Midwest's independent external auditor, will issue an audit opinion upon completion of their audit procedures.
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First Midwest Bancorp, Inc. | Press Release Dated January 22, 2003 | ||||||||||||
Condensed Consolidated Statements of Income | Quarters Ended | Years Ended | |||||||||||
December 31, | December 31, | ||||||||||||
(Amounts in thousands except per share data) | 2002 | 2001 | 2002 | 2001 | |||||||||
Unaudited(1) | Unaudited(1) | Unaudited(2) | Audited | ||||||||||
Interest Income | |||||||||||||
Loans | $ | 53,528 | $ | 61,407 | $ | 223,393 | $ | 265,191 | |||||
Securities | 24,427 | 26,388 | 105,454 | 119,009 | |||||||||
Other | 266 | 269 | 817 | 1,018 | |||||||||
Total interest income | 78,221 | 88,064 | 329,664 | 385,218 | |||||||||
Interest Expense | |||||||||||||
Deposits | 17,685 | 26,384 | 81,616 | 134,497 | |||||||||
Borrowed funds | 7,783 | 7,832 | 29,294 | 46,341 | |||||||||
Total interest expense | 25,468 | 34,216 | 110,910 | 180,838 | |||||||||
Net interest income | 52,753 | 53,848 | 218,754 | 204,380 | |||||||||
Provision for Loan Losses | 4,235 | 6,313 | 15,410 | 19,084 | |||||||||
Net interest income after provision for loan losses | 48,518 | 47,535 | 203,344 | 185,296 | |||||||||
Noninterest Income | |||||||||||||
Service charges on deposit accounts | 6,948 | 6,505 | 25,362 | 24,148 | |||||||||
Trust and investment management fees | 2,507 | 2,535 | 10,309 | 10,445 | |||||||||
Other service charges, commissions, and fees | 4,767 | 4,652 | 18,019 | 18,471 | |||||||||
Corporate owned life insurance income | 1,460 | 1,968 | 6,728 | 8,190 | |||||||||
Securities gains, net | 427 | 33 | 460 | 790 | |||||||||
Other | 1,469 | 1,740 | 6,113 | 6,822 | |||||||||
Total noninterest income | 17,578 | 17,433 | 66,991 | 68,866 | |||||||||
Noninterest Expense | |||||||||||||
Salaries and employee benefits | 19,833 | 19,726 | 80,626 | 76,780 | |||||||||
Occupancy expenses | 3,503 | 2,961 | 14,298 | 14,353 | |||||||||
Equipment expenses | 1,959 | 1,929 | 7,769 | 7,644 | |||||||||
Technology and related costs | 2,331 | 2,493 | 9,796 | 10,186 | |||||||||
Other | 8,070 | 9,551 | 35,563 | 36,393 | |||||||||
Total noninterest expense | 35,696 | 36,660 | 148,052 | 145,356 | |||||||||
Income before taxes | 30,400 | 28,308 | 122,283 | 108,806 | |||||||||
Income tax expense | 7,934 | 7,034 | 32,133 | 26,668 | |||||||||
Net Income | $ | 22,466 | $ | 21,274 | $ | 90,150 | $ | 82,138 | |||||
Diluted Earnings Per Share | $ | 0.47 | $ | 0.43 | $ | 1.86 | $ | 1.63 | |||||
Dividends Declared Per Share | $ | 0.19 | $ | 0.17 | $ | 0.70 | $ | 0.65 | |||||
Weighted Average Diluted Shares Outstanding | 47,714 | 49,233 | 48,415 | 50,401 | |||||||||
(1) While unaudited, the Condensed Consolidated Statements of Income for the quarters ended December 31, 2002 and 2001 have been prepared in accordance with accounting principles generally accepted in the United States and are derived from quarterly financial statements.
(2) While unaudited, the Condensed Consolidated Statement of Income for the year ended December 31, 2002 has been prepared in accordance with accounting principles generally accepted in the United States and is derived from the 2002 financialstatements on which Ernst & Young LLP, First Midwest's independent external auditor, will issue an audit opinion upon completion of their audit procedures.
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First Midwest Bancorp, Inc. | Press Release Dated January 22, 2003 | ||||||||||||||||||||||||
Selected Quarterly Data | |||||||||||||||||||||||||
Unaudited | Years Ended | Quarters Ended | |||||||||||||||||||||||
(Amounts in thousands except per share data) | 2002 | 2001 | 12/31/02 | 9/30/02 | 6/30/02 | 3/31/02 | 12/31/01 | ||||||||||||||||||
Net interest income | $ | 218,754 | $ | 204,380 | $ | 52,753 | $ | 55,458 | $ | 56,296 | $ | 54,247 | $ | 53,848 | |||||||||||
Provision for loan losses | 15,410 | 19,084 | 4,235 | 3,020 | 3,100 | 5,055 | 6,313 | ||||||||||||||||||
Noninterest income | 66,991 | 68,866 | 17,578 | 16,889 | 16,382 | 16,142 | 17,433 | ||||||||||||||||||
Noninterest expense | 148,052 | 145,356 | 35,696 | 38,106 | 38,614 | 35,636 | 36,660 | ||||||||||||||||||
Net income | 90,150 | 82,138 | 22,466 | 22,679 | 22,934 | 22,071 | 21,274 | ||||||||||||||||||
Diluted earnings per share | $ | 1.86 | $ | 1.63 | $ | 0.47 | $ | 0.47 | $ | 0.47 | $ | 0.45 | $ | 0.43 | |||||||||||
Return on average equity | 18.82% | 17.89% | 17.92% | 18.46% | 19.60% | 19.39% | 18.24% | ||||||||||||||||||
Return on average assets | 1.53% | 1.43% | 1.49% | 1.50% | 1.57% | 1.55% | 1.47% | ||||||||||||||||||
Net interest margin | 4.28% | 4.10% | 4.10% | 4.26% | 4.43% | 4.32% | 4.33% | ||||||||||||||||||
Efficiency ratio | 48.20% | 49.65% | 47.24% | 49.08% | 49.15% | 47.26% | 48.08% | ||||||||||||||||||
Period end shares outstanding | 47,206 | 48,725 | 47,206 | 47,616 | 48,165 | 48,534 | 48,725 | ||||||||||||||||||
Book value per share | $ | 10.42 | $ | 9.18 | $ | 10.42 | $ | 10.44 | $ | 9.91 | $ | 9.21 | $ | 9.18 | |||||||||||
Dividends declared per share | $ | 0.70 | $ | 0.65 | $ | 0.19 | $ | 0.17 | $ | 0.17 | $ | 0.17 | $ | 0.17 | |||||||||||
Asset Quality | |||||||||||||||||||||||||
Unaudited | Years Ended | Quarters Ended | |||||||||||||||||||||||
(Amounts in thousands) | 2002 | 2001 | 12/31/02 | 9/30/02 | 6/30/02 | 3/31/02 | 12/31/01 | ||||||||||||||||||
Nonperforming loans | $ | 12,525 | $ | 16,847 | $ | 12,525 | $ | 9,988 | $ | 11,879 | $ | 15,277 | $ | 16,847 | |||||||||||
Foreclosed real estate | 5,496 | 3,630 | 5,496 | 2,972 | 4,582 | 4,289 | 3,630 | ||||||||||||||||||
Loans past due 90 days and still accruing | 3,307 | 5,783 | 3,307 | 9,820 | 3,564 | 4,739 | 5,783 | ||||||||||||||||||
Nonperforming loans to loans | 0.37% | 0.50% | 0.37% | 0.29% | 0.35% | 0.45% | 0.50% | ||||||||||||||||||
Nonperforming assets to loans plus foreclosed real estate | 0.53% | 0.61% | 0.53% | 0.38% | 0.48% | 0.58% | 0.61% | ||||||||||||||||||
Reserve for loan losses to loans | 1.41% | 1.42% | 1.41% | 1.41% | 1.41% | 1.42% | 1.42% | ||||||||||||||||||
Reserve for loan losses to nonperforming loans | 383% | 283% | 383% | 480% | 403% | 313% | 283% | ||||||||||||||||||
Provision for loan losses | $ | 15,410 | $ | 19,084 | $ | 4,235 | $ | 3,020 | $ | 3,100 | $ | 5,055 | $ | 6,313 | |||||||||||
Net loan charge-offs | 15,226 | 16,432 | 4,225 | 2,919 | 3,056 | 5,026 | 6,313 | ||||||||||||||||||
Net loan charge-offs to average loans | 0.45% | 0.49% | 0.49% | 0.34% | 0.36% | 0.61% | 0.73% | ||||||||||||||||||
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