| Exhibit 99 |
| News Release |
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First Midwest Bancorp, Inc.
| First Midwest Bancorp
One Pierce Place, Suite 1500
Itasca, Illinois 60143-9768
(630) 875-7450
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| FOR IMMEDIATE RELEASE | CONTACT: | Paul F. Clemens |
| | | EVP, Chief Financial Officer |
| TRADED: | Nasdaq | | (630) 875-7347 |
| SYMBOL: | FMBI | | www.firstmidwest.com |
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FIRST MIDWEST REPORTS SOLID SECOND QUARTER RESULTS
AMID CONTINUED MIXED LOAN GROWTH
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| 2nd QUARTER HIGHLIGHTS: |
| * | EPS: $0.59, up 3.5% vs. 2Q06 |
| * | Strong Profitability: ROA of 1.44% |
| * | Improved Net Interest Margin: 3.61% vs. 3.53% in 1Q07 |
| * | Lower Net Charge-offs: 0.14% vs. 0.24% in 1Q07 |
| * | Broad Based Fee Growth: Up 15.4% vs. 1Q07 |
ITASCA, IL, JULY 25, 2007-First Midwest Bancorp, Inc. ("First Midwest")(NASDAQ NGS: FMBI) today reported net income for the second quarter ended June 30, 2007 of $29.3 million, or $0.59 per diluted share, as compared to 2006's second quarter earnings of $28.7 million, or $0.57 per diluted share. Second quarter 2007 performance resulted in an annualized return on average assets of 1.44% as compared to 1.33% for second quarter 2006 and an annualized return on average equity of 15.5% as compared to 16.5% for second quarter 2006.
"I am proud that First Midwest continues to deliver positive results measured by a wide range of critical operating factors," said First Midwest Chairman and Chief Executive Officer, John M. O'Meara. "We believe that the drivers of second quarter performance also place us in a strong competitive position for the balance of the year and into 2008. Specifically, our performance benefited from expanded fee based revenue, controlled noninterest expense, tightly managed credit costs, and improved net interest margins. These trends offset counter balancing dynamics in our loan portfolios."
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Earnings Guidance
"The second half of the year holds a mix of economic uncertainties and competitive opportunities. It is First Midwest's judgment that the strength of our Chicagoland marketplace and the vitality of the national economy should continue to present sound opportunities to reestablish more robust growth in profitable asset formation. We believe the competitive environment within the local marketplace will be advantageous to First Midwest as major competitors either exit the marketplace or become preoccupied with acquisition and integration issues. We are prepared to capitalize on these opportunities," he added.
O'Meara concluded, "Importantly, our calling and business referral programs continue to produce a strong pipeline of potential client relationships. These ongoing sales efforts are presently being augmented through the recruitment of experienced in-market commercial bankers. Not withstanding those activities, competition for loans that meet the Company's credit and margin contribution criteria has been somewhat stronger than anticipated. As such, we are revising our current earnings guidance for full year 2007 to be $2.38 to $2.43, with our performance in this range largely influenced by the pace of loan bookings, asset quality, and funding availability."
Loans and Funding
Outstanding loans totaled $4.9 billion at June 30, 2007 and $5.0 billion at December 31, 2006. Over the same period, corporate loans remained unchanged at $4.1 billion, as increases in commercial and industrial and real estate construction loan categories were offset by lower commercial real estate balances. The decline in commercial real estate loans reflects the combined impact of participation loan payoffs and rapid prepayment of multifamily loan portfolios originally purchased as part of the 2004 CoVest acquisition. On a linked-quarter basis, total loans declined $83.8 million from March 31, 2007. This approximate annualized 8% decline was attributable to the commercial customer base in the amount of $50 million with the remainder in the consumer lending business.
Average deposits totaled $5.9 billion for the quarter ended June 30, 2007 and $6.2 billion for the quarter ended June 30, 2006, a decline of $295.0 million. The majority of the decline was due to a planned reduction in higher-costing wholesale deposits. In comparison to the second quarter of 2006, quarter to date average demand deposits remained constant at $1.1 billion, while money market and
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NOW account balances reflected a shift to higher-costing savings and time deposit categories. On a linked-quarter basis, average core transactional deposits increased $78.1 million from first quarter 2007, largely due to the seasonal inflow of public deposit monies.
Credit Quality
First Midwest's overall credit quality continues to reflect the Company's conservative lending discipline. The Company has no direct exposure to subprime mortgage lending products. At June 30, 2007, nonperforming assets represented 0.38% of loans plus foreclosed real estate, compared to 0.42% at March 31, 2007. As of June 30, 2007, nonperforming assets totaled $18.6 million compared to $20.8 million as of March 31, 2007. Ninety day past due loans increased by $4.0 million from March 31, 2007. The $4.0 million increase is comprised of four secured credits that are in the process of collection. Net charge-offs for second quarter 2007 improved to 0.14% of average loans, down from 0.24% for the first quarter 2007. As of June 30, 2007, the reserve for loan losses stood at 1.27% of total loans compared to 1.25% at March 31, 2007. Nonperforming loans were covered by the reserve 4.18 times.
Net Interest Margin
On a linked-quarter basis, net interest margin of 3.61% improved 8 basis points from the first quarter and reflects the benefit of a decline in the Company's funding costs, coupled with continued improvement in asset yields. Asset yields reflect the benefits of the Company's strategy to reduce the size of its securities portfolio and the benefit of higher short term rates on our floating rate loan portfolios. For the balance of the year, we expect margins to be maintained at approximate current levels.
Noninterest Income and Expense
For the second quarter of 2007, noninterest income was up 6.7% as compared to first quarter 2007, primarily due to a 15.4% increase in fee-based revenues. The increase in fee-based revenues from the first quarter of 2007 was broad based, reflecting solid growth in deposit service charges, asset management, mortgage, and payment processing fee categories. In addition, second quarter 2007 results reflected an increase of $509,000, related to changes in the value of nonqualified retirement plan assets, for which an offsetting increase is reflected in salaries and benefit expense.
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For the second quarter 2007, noninterest expense was up 5.4% from first quarter 2007. The increase reflected higher merchant and card processing, advertising and product promotion, and the above-mentioned employee related expenses. The Company's efficiency ratio for the second quarter of 2007 was 52.13%, improved slightly from first quarter 2007.
Security Transactions
At June 30, 2007, the securities portfolio totaled $2.29 billion, down $422.9 million from June 30, 2006. The Company continued to execute on its strategy, initiated in 2006, of using securities sales proceeds and cash flows to reduce higher-cost borrowings rather than reinvesting in like securities. In second quarter 2007, the Company took advantage of market conditions to sell $46.5 million of municipal securities, resulting in a realized gain of $961,000.
Capital Management
First Midwest's capital position continues to exceed all of the regulatory minimum levels to be considered a "well capitalized institution" by the Federal Reserve System. As of June 30, 2007, First Midwest's Total Risk Based Capital ratio was 12.5%, compared to 12.4% as of March 31, 2007. Its Tier 1 Risk Based Capital ratio was 9.9%, compared to 9.8% as of March 31, 2007. First Midwest's tangible capital ratio, which represents the ratio of stockholders' equity to total assets excluding intangible assets, stood at 5.8%, unchanged from March 31, 2007. Excluding other comprehensive losses, the tangible capital ratio stood at 6.3%, up from 6.0% as of March 31, 2007.
During the second quarter of 2007, First Midwest paid dividends of $0.295 per share. In addition, during the second quarter of 2007, First Midwest repurchased 338,190 shares of its common stock at an average price of $36.78 per share. As of June 30, 2007, approximately 1.377 million shares remained under First Midwest's existing repurchase authorization. This program will continue to operate throughout the second half of the year.
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About the Company
First Midwest is the premier relationship-based banking franchise in the growing Chicagoland banking market. As one of the Chicago metropolitan area's largest independent bank holding companies, First Midwest provides the full range of both business and retail banking and trust and investment management services through 103 offices located in 63 communities, primarily in metropolitan Chicago. First Midwest was recently recognized by the Alfred P. Sloan Awards for Business Excellence in Workforce Flexibility in the greater Chicago area.
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Safe Harbor StatementThis press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are not historical facts but instead represent only the Company's beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of the Company's control. It is possible that actual results and the Company's financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. For a discussion of some of the risks and important factors that could affect the Company's future results, see "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 30, 2006 and other reports filed with the Securities and Exchange Commission. Forward-looking statements represent management's best judgment as of the date hereof based on currently available information. Except as required by law, the Company undertakes no duty to update the contents of this press release after the date hereof.
Conference Call
A conference call to discuss the Company's results, outlook and related matters will be held on Wednesday July 25th at 10:00 am (ET). Members of the public who would like to listen to the conference call should dial 1-866-362-5158 (U.S. domestic) or 1-617-597-5397 (international) passcode number 91678672. The number should be dialed at least 10 minutes prior to the start of the conference call. The conference call will also be accessible as an audio webcast through the Investor Relations section of the Company's web site,www.firstmidwest.com/aboutinvestor_overview.asp. There is no charge to access the call. For those unable to listen to the live broadcast, a replay will be available on the Company's web site or by dialing 1-888-286-8010 (U.S. domestic) or 1-617-801-6888 (international) passcode number 26576503, beginning approximately one hour after the event through 11:59 pm (ET) on August 1, 2007. Please direct any questions regar ding obtaining access to the conference call to First Midwest Bancorp, Inc. Investor Relations, via e-mail, atinvestor.relations@firstmidwest.com.
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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 unauditedSelected 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 25, 2007 | |
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Operating Highlights | | | | | | |
Unaudited | | Quarters Ended | | | Six Months Ended | |
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(Amounts in thousands except per share data) | | Jun. 30, 2007 | | Mar. 31, 2007 | | Jun. 30, 2006 | | | Jun. 30, 2007 | | Jun. 30, 2006 | |
| | | | | | | | | | | | | | | | | |
Net income | | $ | 29,311 | | $ | 29,029 | | $ | 28,735 | | | $ | 58,340 | | $ | 54,503 | |
Diluted earnings per share | | $ | 0.59 | | $ | 0.58 | | $ | 0.57 | | | $ | 1.16 | | $ | 1.12 | |
Return on average equity | | | 15.47% | | | 15.48% | | | 16.50% | | | | 15.48% | | | 17.02% | |
Return on average assets | | | 1.44% | | | 1.42% | | | 1.33% | | | | 1.43% | | | 1.35% | |
Net interest margin | | | 3.61% | | | 3.53% | | | 3.70% | | | | 3.57% | | | 3.73% | |
Efficiency ratio | | | 52.13% | | | 52.19% | | | 52.12% | | | | 52.16% | | | 51.84% | |
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Balance Sheet Highlights | |
Unaudited | | Period Ending Balances As Of | |
| | | | | | | | | | |
(Amounts in thousands except per share data) | Jun. 30, 2007 | | | Mar. 31, 2007 | | Jun. 30, 2006 | |
| | | | | | | | | | |
Total assets | | $ | 8,055,358 | | | $ | 8,235,110 | | $ | 8,692,828 | |
Total loans | | | 4,909,858 | | | | 4,993,620 | | | 5,041,345 | |
Total deposits | | | 5,814,744 | | | | 5,907,442 | | | 6,258,185 | |
Stockholders' equity | | | 741,060 | | | | 753,988 | | | 694,938 | |
Book value per share | | $ | 14.97 | | | $ | 15.16 | | $ | 13.92 | |
Period end shares outstanding | | | 49,494 | | | | 49,747 | | | 49,925 | |
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Stock Performance Data | | |
Unaudited | | Quarters Ended | |
| | | |
| | | | | | | | | |
| | Jun. 30, 2007 | | Mar. 31, 2007 | | Jun. 30, 2006 | |
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Market Price: | | | | | | | |
| Quarter End | | $ | 35.51 | | | $ | 36.75 | | $ | 37.08 | | |
| High | | $ | 38.17 | | | $ | 39.31 | | $ | 37.52 | | |
| Low | | $ | 34.82 | | | $ | 36.00 | | $ | 34.64 | | |
Quarter end price to book value | | | 2.4 | x | | | 2.4 | x | | 2.7 | x | |
Quarter end price to consensus estimated 2007 earnings | | | 14.9 | x | | | N/A | | | N/A | | |
Dividends declared per share | | $ | 0.295 | | | $ | 0.295 | | $ | 0.275 | | |
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First Midwest Bancorp, Inc. | Press Release Dated July 25, 2007 |
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Condensed Consolidated Statements of Condition |
Unaudited(1) | June 30, |
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(Amounts in thousands) | 2007 | | 2006 | |
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Assets |
Cash and due from banks | $ | 156,305 | $ | 236,848 | |
Funds sold and other short-term investments | 8,996 | | 7,399 | |
Trading account securities | 17,403 | | 14,051 | |
Securities available for sale | 2,183,450 | | 2,593,715 | |
Securities held to maturity, at amortized cost | 104,152 | | 116,707 | |
Loans | 4,909,858 | | 5,041,345 | |
Reserve for loan losses | (62,391) | | (62,359) | |
| | | | |
| Net loans | 4,847,467 | | 4,978,986 | |
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Premises, furniture, and equipment | 128,448 | | 121,796 | |
Investment in corporate owned life insurance | 199,396 | | 193,048 | |
Goodwill and other intangible assets | 290,447 | | 298,803 | |
Accrued interest receivable and other assets | 119,294 | | 131,475 | |
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| Total assets | $ | 8,055,358 | $ | 8,692,828 | |
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Liabilities and Stockholders' Equity |
Deposits | $ | 5,814,744 | $ | 6,258,185 | |
Borrowed funds | 1,172,190 | | 1,412,553 | |
Subordinated debt | 226,118 | | 226,128 | |
Accrued interest payable and other liabilities | 101,246 | | 101,024 | |
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| Total liabilities | 7,314,298 | | 7,997,890 | |
| | | | | |
Common stock | 613 | | 613 | |
Additional paid-in capital | 205,836 | | 204,519 | |
Retained earnings | 852,598 | | 789,593 | |
Accumulated other comprehensive (loss) | (35,148) | | (33,175) | |
Treasury stock, at cost | (282,839) | | (266,612) | |
| | | | |
| Total stockholders' equity | 741,060 | | 694,938 | |
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| Total liabilities and stockholders' equity | $ | 8,055,358 | $ | 8,692,828 | |
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- While unaudited, the Condensed Consolidated Statements of Condition have been prepared in accordance with U.S. generally accepted accounting principles and, as of June 30, 2006, are derived from quarterly financial statements on which Ernst & Young LLP, First Midwest's independent registered public accounting firm, 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, 2007.
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First Midwest Bancorp, Inc. | Press Release Dated July 25, 2007 |
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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) | 2007 | | 2006 | | 2007 | | 2006 | |
| | | | | | | | |
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Interest Income | |
Loans | $ | 92,273 | | $ | 90,512 | | $ | 184,352 | | $ | 164,827 | |
Securities | 28,169 | | 32,408 | | 57,469 | | 59,459 | |
Other | 229 | | 130 | | 439 | | 289 | |
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| Total interest income | 120,671 | | 123,050 | | 242,260 | | 224,575 | |
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Interest Expense | | |
Deposits | 41,593 | | 36,546 | | 83,720 | | 65,014 | |
Borrowed funds | 14,363 | | 16,842 | | 29,712 | | 30,070 | |
Subordinated debt | 3,751 | | 3,704 | | 7,494 | | 6,068 | |
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| Total interest expense | 59,707 | | 57,092 | | 120,926 | | 101,152 | |
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| Net interest income | 60,964 | | 65,958 | | 121,334 | | 123,423 | |
Provision for loan losses | 1,761 | | 2,059 | | 4,721 | | 3,649 | |
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| Net interest income after provision for loan losses | 59,203 | | 63,899 | | 116,613 | | 119,774 | |
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Noninterest Income | | |
Service charges on deposit accounts | 11,483 | | 10,847 | | 21,070 | | 18,471 | |
Trust and investment management fees | 3,916 | | 3,695 | | 7,706 | | 6,867 | |
Other service charges, commissions, and fees | 6,099 | | 4,837 | | 11,258 | | 9,302 | |
Card-based fees | 4,181 | | 3,762 | | 7,892 | | 6,331 | |
| | | | | | | | |
| Subtotal, fee-based revenues | 25,679 | | 23,141 | | 47,926 | | 40,971 | |
| | | | | | | | |
Corporate owned life insurance income | 1,982 | | 1,940 | | 3,893 | | 3,444 | |
Security gains, net | 961 | | 20 | | 4,405 | | 389 | |
Other | 2,001 | | 166 | | 3,099 | | 1,835 | |
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| Total noninterest income | 30,623 | | 25,267 | | 59,323 | | 46,639 | |
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Noninterest Expense | | | | | |
Salaries and employee benefits | 29,008 | | 27,039 | | 56,558 | | 52,671 | |
Net occupancy expense | 5,386 | | 5,206 | | 10,888 | | 9,664 | |
Equipment expense | 2,590 | | 2,705 | | 5,216 | | 4,836 | |
Technology and related costs | 1,849 | | 1,838 | | 3,557 | | 3,282 | |
Other | 11,904 | | 15,202 | | 22,673 | | 25,249 | |
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| Total noninterest expense | 50,737 | | 51,990 | | 98,892 | | 95,702 | |
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Income before taxes | 39,089 | | 37,176 | | 77,044 | | 70,711 | |
Income tax expense | 9,778 | | 8,441 | | 18,704 | | 16,208 | |
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| Net Income | $ | 29,311 | | $ | 28,735 | | $ | 58,340 | | $ | 54,503 | |
| | | | | | | |
| Diluted Earnings Per Share | $ | 0.59 | | $ | 0.57 | | $ | 1.16 | | $ | 1.12 | |
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| Dividends Declared Per Share | $ | 0.295 | | $ | 0.275 | | $ | 0.590 | | $ | 0.550 | |
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| Weighted Average Diluted Shares Outstanding | 49,984 | | 50,244 | | 50,152 | | 48,571 | |
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- While unaudited, the Condensed Consolidated Statements of Income have been prepared in accordance with U.S. generally accepted accounting principles and, for the quarter ended June 30, 2006, are derived from quarterly financial statements on which Ernst & Young LLP, First Midwest's independent registered public accounting firm, 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, 2007.
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First Midwest Bancorp, Inc. | Press Release Dated July 25, 2007 |
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Selected Quarterly Data | | | | | | | | | |
Unaudited | Year to Date | | | | Quarters Ended | |
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(Amounts in thousands except per share data) | 6/30/07 | 6/30/06 | | | 6/30/07 | 3/31/07 | 12/31/06 | 9/30/06 | 6/30/06 |
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Net interest income | $ | 121,334 | $ | 123,423 | | | $ | 60,964 | $ | 60,370 | $ | 62,763 | $ | 65,673 | $ | 65,958 |
Provision for loan losses | 4,721 | 3,649 | | | 1,761 | 2,960 | 3,865 | 2,715 | 2,059 |
Noninterest income | 59,323 | 46,639 | | | 30,623 | 28,700 | 29,653 | 26,991 | 25,267 |
Noninterest expense | 98,892 | 95,702 | | | 50,737 | 48,155 | 47,795 | 49,118 | 51,990 |
Net income | 58,340 | 54,503 | | | 29,311 | 29,029 | 31,528 | 31,215 | 28,735 |
Diluted earnings per share | $ | 1.16 | $ | 1.12 | | | $ | 0.59 | $ | 0.58 | $ | 0.63 | $ | 0.62 | $ | 0.57 |
Return on average equity | 15.48% | 17.02% | | | 15.47% | 15.48% | 16.40% | 17.09% | 16.50% |
Return on average assets | 1.43% | 1.38% | | | 1.44% | 1.42% | 1.47% | 1.44% | 1.33% |
Net interest margin | 3.57% | 3.73% | | | 3.61% | 3.53% | 3.57% | 3.69% | 3.70% |
Efficiency ratio | 52.16% | 51.84% | | | 52.13% | 52.19% | 49.56% | 49.06% | 52.12% |
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Period end shares outstanding | 49,494 | 49,925 | | | 49,494 | 49,747 | 50,025 | 50,001 | 49,925 |
Book value per share | $ | 14.97 | $ | 13.92 | | | $ | 14.97 | $ | 15.16 | $ | 15.01 | $ | 14.92 | $ | 13.92 |
Dividends declared per share | $ | 0.590 | $ | 0.550 | | | $ | 0.295 | $ | 0.295 | $ | 0.295 | $ | 0.275 | $ | 0.275 |
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Asset Quality | | | | | | | | | |
Unaudited | Year to Date | | | Quarters Ended |
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(Amounts in thousands) | 6/30/07 | 6/30/06 | | | 6/30/07 | 3/31/07 | 12/31/06 | 9/30/06 | 6/30/06 |
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Nonaccrual loans | $ | 14,927 | $ | 15,447 | | | $ | 14,927 | $ | 17,582 | $ | 16,209 | $ | 17,459 | $ | 15,447 |
Foreclosed real estate | 3,683 | 4,195 | | | 3,683 | 3,195 | 2,727 | 4,088 | 4,195 |
Loans past due 90 days and still accruing | 19,633 | 14,185 | | | 19,633 | 15,603 | 12,810 | 11,296 | 14,185 |
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Nonperforming loans to loans | 0.30% | 0.31% | | | 0.30% | 0.35% | 0.32% | 0.34% | 0.31% |
Nonperforming assets to loans
plus foreclosed real estate | 0.38% | 0.39% | | | 0.38% | 0.42% | 0.38% | 0.42% | 0.39% |
Nonperforming assets plus loans past due 90 days to loans plus foreclosed real estate | 0.78% | 0.67% | | | 0.78% | 0.73% | 0.63% | 0.65% | 0.67% |
Reserve for loan losses to loans | 1.27% | 1.24% | | | 1.27% | 1.25% | 1.25% | 1.23% | 1.24% |
Reserve for loan losses to nonperforming loans | 418% | 404% | | | 418% | 355% | 385% | 357% | 404% |
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Provision for loan losses | $ | 4,721 | $ | 3,649 | | | $ | 1,761 | $ | 2,960 | $ | 3,865 | $ | 2,715 | $ | 2,059 |
Net loan charge-offs | 4,700 | 3,618 | | | 1,770 | 2,930 | 3,865 | 2,704 | 2,053 |
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Net loan charge-offs to average loans | 0.19% | 0.16% | | | 0.14% | 0.24% | 0.30% | 0.21% | 0.16% |
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