Exhibit 99
| News Release |
[LOGO]
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First Midwest Bancorp, Inc.
| First Midwest Bancorp
300 Park Blvd., Suite 400
P.O. Box 459
Itasca, Illinois 60143-9768
(630) 875-7450
|
FOR IMMEDIATE RELEASE
| CONTACT: | Michael L. Scudder |
EVP, Chief Financial Officer |
(630) 875-7283 |
| TRADED: | Nasdaq | Steven H. Shapiro |
| SYMBOL: | FMBI | EVP, Corporate Secretary |
| | (630) 875-7345 |
| | www.firstmidwest.com |
FIRST MIDWEST REPORTS SECOND QUARTER RESULTS
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| | 2nd QUARTER 2004 HIGHLIGHTS: |
| * | EPS of $.53, up 3.9% as compared to 1st quarter 2004 |
| * | ROE of 19.2% vs. 19.4% in 2nd Quarter 2003 |
| * | Efficiency Ratio of 49.9%, Improved as Compared to 50.5% in 1st Quarter 2004 |
| * | Total Assets Up 5.9% Compared to 2nd Quarter 2003 |
| * | Commercial Loan Demand Strengthening |
ITASCA, IL, JULY 21, 2004 -First Midwest Bancorp, Inc. ("First Midwest")(Nasdaq: FMBI) today reported net income for second quarter ended June 30, 2004 of $24.7 million, or $0.53 per diluted share. This represented an increase of 3.9% per diluted share as compared to 2004's first quarter of $24.0 million, or $0.51 per diluted share, and approximated 2003's second quarter earnings of $24.6 million and $0.53 per diluted share. First Midwest's 2004 second quarter performance improved 6.25% as compared to second quarter 2003 after excluding from both periods, the impact of security gains and debt extinguishment losses on performance. This second quarter 2004 performance resulted in an annualized return on average assets of 1.44%, as compared to 1.59% for second quarter 2003, and an annualized return on average equity of 19.17%, as compared to 19.40% for second quarter 2003.
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For the first six months of 2004, net income increased 3.0% on a per diluted share basis to $48.7 million, or $1.04 per diluted share, as compared to 2003's like period of $47.4 million, or $1.01 per diluted share. Diluted earnings per share for the first six months of 2004 increased 6.25% from the same period in 2003 after excluding security gains and debt extinguishment losses in 2004 and 2003, and CoVest integration costs in 2004.
"We are pleased with our performance in the second quarter, as our balance sheet is positioned to take advantage of the transition to a higher rate environment," First Midwest President and Chief Executive Officer John O'Meara said. "We should be able to capitalize on opportunities presented by the changing environment, including rising interest rates and their implications for our securities portfolio and net interest margin. We are also encouraged by favorable trends in corporate loan growth, trust revenues and expense control, and we remain optimistic about continued, low charge-off levels."
As a result, First Midwest expects full year 2004 diluted earnings per share in the range of $2.14 to $2.18, representing growth over full year 2003 in the range of 9% to 11%.
Net Interest Margin
First Midwest's net interest income increased 6.5% to $56.0 million for second quarter 2004 as compared to $52.6 million for 2003's second quarter. This increase resulted from earning assets growth of $666.9 million from second quarter 2003, primarily due to the acquisition of CoVest on December 31, 2003. Net interest margin for second quarter 2004 was 3.81%, down from 4.01% for second quarter 2003 and 3.97% on a linked-quarter basis. The margin contraction from first quarter 2004 to second quarter 2004 resulted from the continued repricing o f earning assets in the low rate environment and the impact of increased prepayments on mortgage-backed securities.
Loan Growth and Funding
First Midwest's total loans of $4.2 billion at June 30, 2004 were 19.3% higher than at June 30, 2003 and 2.8% higher than at December 31, 2003. The growth from second quarter 2003 was due primarily to the acquisition of $531 million in loans from CoVest on December 31, 2003. On a linked-quarter basis, total
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loans increased 1.4% as commercial, agricultural, real estate construction and indirect consumer loan categories experienced growth. Commercial loan growth remained favorable, as commercial loans outstanding as of June 30, 2004 increased by 4.4%, or 17.6% annualized, compared to March 31, 2004.
First Midwest remains optimistic about the prospects for commercial and commercial real estate loan growth for 2004. The pipeline of loan proposals under review by First Midwest continues to be up significantly compared with 2003.
Total average deposits for second quarter 2004 increased 14.5% from second quarter 2003 and 3.0% on a linked-quarter basis. The increase from second quarter 2003 is primarily attributed to deposits obtained through the acquisition of CoVest while increase from first quarter 2004 reflects the seasonal impact of higher public fund deposit levels.
Noninterest Income and Expense
First Midwest's total noninterest income for second quarter 2004 was $19.1 million as compared to $21.2 million for second quarter 2003. Excluding certain transactions, noninterest income levels were relatively unchanged in comparison to 2003. In second quarter 2004, these transactions included security gains totaling $2.7 million and offsetting losses of $1.4 million from the early retirement of Federal Home Loan Bank advances, while in second quarter 2003, these transactions included $3.3 million in security gains. In comparison to second quarter 2003 noninterest income in second quarter 2004 reflected improved trust income, card-based revenues and loan-related fees, which were offset by the impact of lower investment product and mortgage-related commission revenue.
Total noninterest expense for second quarter 2004 increased $2.0 million to $40.0 million, an increase of 5.3% from second quarter 2003. This increase was largely the result of additional expenses associated with operating the CoVest franchise, including employee-related expense and net occupancy and equipment costs as well as $491,000 of CoVest core deposit intangible amortization. The integration of CoVest into First Midwest's operation and data processing systems has been fully completed, with all cost reductions being fully realized. First Midwest's efficiency ratio was 49.9% for second quarter 2004, unchanged from second quarter 2003 and improved from 50.5% for first quarter 2004.
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Credit Quality
Nonperforming assets totaled $29.2 million as of June 30, 2004, up from $23.5 million as of March 31, 2004 and approximating the $28.9 million as of December 31, 2003. The increase in nonperforming assets from first to second quarter 2004 primarily represents two commercial credits transferred to nonaccruing status. Approximately one third of the total nonperforming assets as of June 30, 2004, originated from the $531 million CoVest loan portfolio purchased on December 31, 2003.
At June 30, 2004, nonperforming loans represented 0.59% of loans, compared with 0.45% at March 31, 2004 and 0.57% at December 31, 2003. Loans past due 90 days and still accruing totaled $4.2 million at June 30, 2004, down from $7.0 million as of March 31, 2004 and up from $3.4 million as of December 31, 2003. As of June 30, 2004, loans acquired from CoVest represented nearly 45% of the total loans past due 90 days.
Net charge-offs for second quarter 2004 were 0.23% of average loans as compared to 0.17% for second quarter 2003. Consumer credit costs continue to show improvement, which First Midwest expects to stabilize for the balance of the year. The ratio of the reserve for loan losses to total loans as of June 30, 2004 was 1.36%, while the provision for loan losses exceeded net charge-offs. The reserve for loan losses at June 30, 2004 represented 230% of nonperforming loans.
Capital Management
As of June 30, 2004, First Midwest's Total Risk Based Capital and Tier 1 Risk Based Capital ratios were 11.45% and 10.37%, respectively. The ratios were improved from the Total Risk Based Capital and Tier 1 Risk Based Capital levels of 10.38% and 9.31%, respectively, existent as of June 30, 2003. First Midwest's Tier 1 Leverage Ratio of 7.97% as of June 30, 2004 improved from 6.99% as of June 30, 2003. The improvement in these ratios is largely due to the issuance of $125 million in trust-preferred securities during the fourth quarter of 2003. These ratios all exceeded the regulatory minimum levels to be considered a "well capitalized institution."
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During the second quarter of 2004, First Midwest returned to its shareholders $0.22 per share in the form of dividends, up 15.8% from 2003's second quarter dividend of $0.19 per share. In addition, during the first six months of 2004, First Midwest repurchased 162,100 shares of its common stock at an average price of approximately $32.95 per share funded by cash on hand, with no shares being repurchased during the second quarter of 2004. As of June 30, 2004, approximately 1.4 million shares remained under First Midwest's existing repurchase authorization.
About the Company
First Midwest is the premier relationship-based banking franchise in the wealthy and growing suburban Chicago banking markets. 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 67 offices located in 49 communities, primarily in northeastern Illinois.
Safe Harbor StatementSafe Harbor Statement under the Private Securities Act of 1995: Statements in this news release that are forward-looking statements are subject to various risks and uncertainties concerning specific factors described in First Midwest Bancorp's 2003 Form 10-K and other filings with the U.S. Securities and Exchange Commission. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. First Midwest does not intend to update this information and disclaims any legal obligation to the contrary. Historical information is not necessarily indicative of future performance.
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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 21, 2004 |
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Operating Highlights | Quarters Ended | Six Months Ended | |
Unaudited | June 30, | June 30, | |
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(Amounts in thousands except per share data) | 2004 | | 2003 | | 2004 | | 2003 | |
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Net income | $ | 24,712 | | $ | 24,647 | | $ | 48,744 | | $ | 47,377 | |
Diluted earnings per share | $ | 0.53 | | $ | 0.53 | | $ | 1.04 | | $ | 1.01 | |
Return on average equity | 19.17% | | 19.40% | | 18.56% | | 18.90% | |
Return on average assets | 1.44% | | 1.59% | | 1.43% | | 1.56% | |
Net interest margin | 3.81% | | 4.01% | | 3.89% | | 4.03% | |
Efficiency ratio | 49.89% | | 49.92% | | 50.21% | | 49.54% | |
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Balance Sheet Highlights | |
Unaudited | |
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(Amounts in thousands except per share data) | Jun. 30, 2004 | | Jun. 30, 2003 | |
| | | | |
Total assets | $ | 6,834,285 | | $ | 6,455,651 | |
Total loans | 4,173,229 | | 3,498,992 | |
Total deposits | 4,892,602 | | 4,527,403 | |
Stockholders' equity | 506,901 | | 508,004 | |
Book value per share | $ | 10.87 | | $ | 10.92 | |
Period end shares outstanding | 46,632 | | 46,534 | |
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Stock Performance Data | Quarters Ended | | Six Months Ended | |
Unaudited | June 30, | | June 30, | |
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| 2004 | | 2003 | | 2004 | | 2003 | |
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Market Price: | | | | | | | | |
Quarter End | $ | 35.21 | | $ | 28.81 | | $ | 35.21 | | $ | 28.81 | |
High | $ | 36.03 | | $ | 29.87 | | $ | 36.03 | | $ | 29.87 | |
Low | $ | 32.33 | | $ | 25.55 | | $ | 31.13 | | $ | 24.89 | |
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Quarter end price to book value | | 3.2 | x | | 2.6 | x | 3.2 | x | 2.6 | x |
Quarter end price to consensus estimated 2004 earnings | | 16.2 | x | | N/A | | | 16.2 | x | | N/A | |
Dividends declared per share | $ | 0.22 | | $ | 0.19 | | $ | 0.44 | | $ | 0.38 | |
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First Midwest Bancorp, Inc. | Press Release Dated July 21, 2004 |
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Condensed Consolidated Statements of Condition |
Unaudited(1) | June 30, |
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(Amounts in thousands) | 2004 | | 2003 | |
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Assets |
Cash and due from banks | $ | 160,501 | $ | 194,792 | |
Funds sold and other short-term investments | 9,375 | | 20,988 | |
Securities available for sale | 2,062,707 | | 2,371,459 | |
Securities held to maturity, at amortized cost | 61,679 | | 89,955 | |
Loans | 4,173,229 | | 3,498,992 | |
Reserve for loan losses | (56,686) | | (49,124) | |
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| Net loans | 4,116,543 | | 3,449,868 | |
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Premises, furniture and equipment | 91,477 | | 81,632 | |
Investment in corporate owned life insurance | 148,932 | | 143,884 | |
Goodwill and other intangible assets | 97,658 | | 35,698 | |
Accrued interest receivable and other assets | 85,413 | | 67,375 | |
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| Total assets | $ | 6,834,285 | $ | 6,455,651 | |
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Liabilities and Stockholders' Equity |
Deposits | $ | 4,892,602 | $ | 4,527,403 | |
Borrowed funds | 1,250,753 | 1,312,510 | |
Subordinated debt - trust preferred securities | 127,547 | - | |
Accrued interest payable and other liabilities | 56,482 | 107,734 | |
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| Total liabilities | 6,327,384 | 5,947,647 | |
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Common stock | 569 | 569 | |
Additional paid-in capital | 66,760 | 69,924 | |
Retained earnings | 678,342 | 623,848 | |
Accumulated other comprehensive income | (10,543) | 44,566 | |
Treasury stock, at cost | (228,227) | (230,903) | |
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| Total stockholders' equity | 506,901 | 508,004 | |
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| Total liabilities and stockholders' equity | $ | 6,834,285 | $ | 6,455,651 | |
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(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, 2003, are derived from quarterly financial statements on which Ernst & Young LLP, First Midwest's independent external auditor, 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, 2004.
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First Midwest Bancorp, Inc. | Press Release Dated July 21, 2004 |
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Condensed Consolidated Statements of Income | Quarters Ended | | Six Months Ended | |
Unaudited(1) | June 30, | | June 30, | |
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(Amounts in thousands except per share data) | 2004 | | 2003 | | 2004 | | 2003 | |
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Interest Income | |
Loans | $ | 54,503 | | $ | 50,719 | | $ | 109,148 | | $ | 101,915 | |
Securities | 21,844 | | 22,529 | | 44,488 | | 45,649 | |
Other | 198 | | 277 | | 298 | | 526 | |
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| Total interest income | 76,545 | | 73,525 | | 153,934 | | 148,090 | |
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Interest Expense | |
Deposits | 13,556 | | 14,208 | | 27,225 | | 29,377 | |
Borrowed funds | 4,949 | | 6,673 | | 9,766 | | 13,928 | |
Subordinated debt - trust preferred securities | 1,992 | | - | | 4,006 | | - | |
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| Total interest expense | 20,497 | | 20,881 | | 40,997 | | 43,305 | |
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| Net interest income | 56,048 | | 52,644 | | 112,937 | | 104,785 | |
Provision for Loan Losses | 2,405 | | 2,540 | | 4,333 | | 5,070 | |
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| Net interest income after provision for loan losses | 53,643 | | 50,104 | | 108,604 | | 99,715 | |
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Noninterest Income | |
Service charges on deposit accounts | 7,041 | | 7,078 | | 13,282 | | 13,359 | |
Trust and investment management fees | 3,038 | | 2,768 | | 6,000 | | 5,321 | |
Other service charges, commissions, and fees | 3,834 | | 4,265 | | 7,466 | | 7,733 | |
Card-based fees | 2,349 | | 2,196 | | 4,495 | | 4,277 | |
Corporate owned life insurance income | 1,244 | | 1,226 | | 2,511 | | 2,522 | |
Security gains, net | 2,663 | | 3,335 | | 4,602 | | 3,401 | |
(Losses) on early extinguishments of debt | (1,413) | | - | | (2,653) | | - | |
Other | 351 | | 347 | | 789 | | 2,366 | |
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| Total noninterest income | 19,107 | | 21,215 | | 36,492 | | 38,979 | |
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Noninterest Expense | | | | |
Salaries and employee benefits | 21,755 | | 21,413 | | 43,871 | | 41,425 | |
Net occupancy expense | 3,772 | | 3,633 | | 7,875 | | 7,312 | |
Equipment expenses | 2,258 | | 1,893 | | 4,500 | | 3,805 | |
Technology and related costs | 2,007 | | 2,514 | | 4,042 | | 4,845 | |
Other | 10,185 | | 8,501 | | 19,894 | | 17,405 | |
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| Total noninterest expense | 39,977 | | 37,954 | | 80,182 | | 74,792 | |
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Income before taxes | 32,773 | | 33,365 | | 64,914 | | 63,902 | |
Income tax expense | 8,061 | | 8,718 | | 16,170 | | 16,525 | |
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| Net Income | $ | 24,712 | | $ | 24,647 | | $ | 48,744 | | $ | 47,377 | |
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| Diluted Earnings Per Share | $ | 0.53 | | $ | 0.53 | | $ | 1.04 | | $ | 1.01 | |
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| Dividends Declared Per Share | $ | 0.22 | | $ | 0.19 | | $ | 0.44 | | $ | 0.38 | |
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| Weighted Average Diluted Shares Outstanding | 46,976 | | 46,871 | | 46,964 | | 47,049 | |
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- 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, 2003, are derived from quarterly financial statements on which Ernst & Young LLP, First Midwest's independent external auditor, has rendered a Quarterly Review Report; Ernst & Young is currently in the process of completing their Quarterly Review Report for the quarter and six months ended June 30, 2004.
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First Midwest Bancorp, Inc. | Press Release Dated July 21, 2004 |
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Selected Quarterly Data | | | | | | | | | |
Unaudited | Year to Date | | | | Quarters Ended | |
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(Amounts in thousands except per share data) | 6/30/04 | 6/30/03 | | | 6/30/04 | 3/31/04 | 12/31/03 | 9/30/03 | 6/30/03 |
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Net interest income | $ | 112,937 | $ | 104,785 | | | $ | 56,048 | $ | 56,889 | $ | 52,962 | $ | 52,007 | $ | 52,644 |
Provision for loan losses | 4,333 | 5,070 | | | 2,405 | 1,928 | 3,075 | 2,660 | 2,540 |
Noninterest income | 36,492 | 38,979 | | | 19,107 | 17,385 | 19,419 | 15,772 | 21,215 |
Noninterest expense | 80,182 | 74,792 | | | 39,977 | 40,205 | 37,109 | 37,551 | 37,954 |
Net income | 48,744 | 47,377 | | | 24,712 | 24,032 | 24,199 | 21,202 | 24,647 |
Diluted earnings per share | $ | 1.04 | $ | 1.01 | | | $ | 0.53 | $ | 0.51 | $ | 0.52 | $ | 0.45 | $ | 0.53 |
Return on average equity | 18.56% | 18.90% | | | 19.17% | 17.97% | 18.59% | 16.73% | 19.40% |
Return on average assets | 1.43% | 1.56% | | | 1.44% | 1.42% | 1.54% | 1.33% | 1.59% |
Net interest margin | 3.89% | 4.03% | | | 3.81% | 3.97% | 4.01% | 3.90% | 4.01% |
Efficiency ratio | 50.21% | 49.54% | | | 49.89% | 50.53% | 45.66% | 48.72% | 49.92% |
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Period end shares outstanding | 46,632 | 46,534 | | | 46,632 | 46,537 | 46,581 | 46,551 | 46,534 |
Book value per share | $ | 10.87 | $ | 10.92 | | | $ | 10.87 | $ | 11.26 | $ | 11.22 | $ | 10.94 | $ | 10.92 |
Dividends declared per share | $ | 0.44 | $ | 0.38 | | | $ | 0.22 | $ | 0.22 | $ | 0.22 | $ | 0.19 | $ | 0.19 |
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Asset Quality | | | | | | | | | |
Unaudited | Year to Date | | | Quarters Ended |
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(Amounts in thousands) | 6/30/04 | 6/30/03 | | | 6/30/04 | 3/31/04 | 12/31/03 | 9/30/03 | 6/30/03 |
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Nonaccrual loans | $ | 24,621 | $ | 9,423 | | | $ | 24,621 | $ | 18,704 | $ | 15,930 | $ | 11,442 | $ | 9,423 |
Restructured loans | - | 7,328 | | | - | - | 7,137 | 7,219 | 7,328 |
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| Total nonperforming loans | $ | 24,621 | $ | 16,751 | | | $ | 24,621 | $ | 18,704 | $ | 23,067 | $ | 18,661 | $ | 16,751 |
Foreclosed real estate | 4,602 | 4,576 | | | 4,602 | 4,779 | 5,812 | 3,842 | 4,576 |
Loans past due 90 days and still accruing | 4,160 | 5,723 | | | 4,160 | 6,977 | 3,384 | 4,806 | 5,723 |
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Nonperforming loans to loans | 0.59% | 0.48% | | | 0.59% | 0.45% | 0.57% | 0.53% | 0.48% |
Nonperforming assets to loans plus foreclosed real estate | 0.70% | 0.61% | | | 0.70% | 0.57% | 0.71% | 0.64% | 0.61% |
Reserve for loan losses to loans | 1.36% | 1.40% | | | 1.36% | 1.38% | 1.39% | 1.41% | 1.40% |
Reserve for loan losses to nonperforming loans | 230% | 293% | | | 230% | 303% | 245% | 263% | 293% |
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Provision for loan losses | $ | 4,333 | $ | 5,070 | | | $ | 2,405 | $ | 1,928 | $ | 3,075 | $ | 2,660 | $ | 2,540 |
Net loan charge-offs | 4,051 | 3,875 | | | 2,347 | 1,704 | 3,055 | 2,620 | 1,436 |
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Net loan charge-offs to average loans | 0.20% | 0.23% | | | 0.23% | 0.17% | 0.35% | 0.30% | 0.17% |
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