November 12, 2009
First Midwest Bancorp, Inc.
Sandler O’Neill
2009 East Coast Financial Services
Investment Conference
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Forward Looking Statements
This presentation may contain, and during this presentation our management may
make statements that may constitute “forward-looking statements” within the
meaning of the safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements are not historical facts but instead represent
only our beliefs regarding future events, many of which, by their nature, are
inherently uncertain and outside our control. Forward-looking statements include,
among other things, statements regarding our financial performance, business
prospects, future growth and operating strategies, objectives and results. Actual
results, performance or developments could differ materially from those expressed
or implied by these forward-looking statements. Important factors that could cause
actual results to differ from those in the forward-looking statements include, among
others, those discussed in our Annual Report on Form 10-K and other reports filed
with the Securities and Exchange Commission, copies of which will be made
available upon request. With the exception of fiscal year end information previously
included in our Annual Report on Form 10-K, the information contained herein is
unaudited. Except as required by law, we undertake no duty to update the contents
of this presentation after the date of this presentation.
make statements that may constitute “forward-looking statements” within the
meaning of the safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements are not historical facts but instead represent
only our beliefs regarding future events, many of which, by their nature, are
inherently uncertain and outside our control. Forward-looking statements include,
among other things, statements regarding our financial performance, business
prospects, future growth and operating strategies, objectives and results. Actual
results, performance or developments could differ materially from those expressed
or implied by these forward-looking statements. Important factors that could cause
actual results to differ from those in the forward-looking statements include, among
others, those discussed in our Annual Report on Form 10-K and other reports filed
with the Securities and Exchange Commission, copies of which will be made
available upon request. With the exception of fiscal year end information previously
included in our Annual Report on Form 10-K, the information contained herein is
unaudited. Except as required by law, we undertake no duty to update the contents
of this presentation after the date of this presentation.
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First Midwest Presentation Index
Who We Are
Credit Quality
Capital Position
Core Profitability
Why First Midwest
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Who We Are
A Premier Community Bank
A Premier Bank | Premier Bank For Commercial | Premier Bank For Retail |
$7.7 billion assets $5.8 billion deposits -67% core transactional -90% Suburban Chicago $5.3 billion loans $3.9 billion trust/investment aum | Seven business lines 25,000 commercial 1,600 trust relationships 200 relationship managers Tenured sales force and market presence | 225,000 retail relationships 1,000 bankers 94 offices 11th largest distribution network in MSA 13th in Chicago MSA Market Share |
Source: Commercial and retail relationships obtained from Harte Hanks Marketing Customer Information System as of 3/31/09
90% Suburban Chicago
First DuPage filling in footprint
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Credit Quality
(1) As of 3Q09
Total Consumer - 13%
Home Equity Dominated
No Subprime Loans
No Credit Card
Conservative Underwriting
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Construction And Development (1)
Performing Commercial Construction Portfolio
Residential Down 20% Since 2008
Impacted By Market Illiquidity
Valued For Orderly Liquidation
As of 3Q09
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Office, Retail, And Industrial (1)
Granular In Size
In Market, First Mortgage Debt
Performing, Supported By Cash Flows
As of 3Q09
4Q08 | 1Q08 | 2Q09 | 3Q09 | |
Loan Loss Reserve / Loans | 1.75% | 2.15% | 2.39% | 2.53% |
LLR / (Non Accrual + 90 Day) | 57% | 45% | 48% | 51% |
Non Accrual + 90 Day / Total Loans | 3.07% | 4.78% | 4.93% | 4.95% |
(Non Accrual + 90 Day) / Total Loans
Loan Loss Reserve & Net Charge-offs
(1) Includes only accruing Troubled Debt Restructures (TDRs)
(1)
Improved Delinquencies
Better Positioned To Reduce Problem Debts
Migration To Ownership And Liquidation
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Credit Focus
Environment Remains Challenging
Markets Improving But Illiquid
Commercial Real Estate Expected To Be Under Strain
Expanded Resources
Focus On
Early Identification And Remediation
Varied Problem Resolution Strategies
Varied Liquidation Strategies
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Capital Position
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Substantially Exceed “Well Capitalized” (1)
Built Through Operating Performance, De-leveraging
Securities, Debt Exchange, And Issue Of Preferred Stock
Securities, Debt Exchange, And Issue Of Preferred Stock
(1) “Well Capitalized” minimum ratios (- - -) are currently 6% for Tier 1, 10% for Total Capital, and 4% for Tier 1 Common (applied to Supervisory Capital Assessment Program
tests on top 19 US banks)
tests on top 19 US banks)
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Excess Regulatory Capital
“Well Capitalized” minimum ratios are currently 6% for Tier 1, 10% for Total Capital, and 4% for Tier 1 Common (applied to Supervisory Capital Assessment Program tests on top 19 US
banks)
banks)
Excess over “Well Capitalized” grossed up using 39% marginal tax rate
Represents the Pre-tax equivalent, excluding the $193 million in regulatory capital received by FMBI through the sale of preferred shares to the US Treasury as part of its Capital Purchase
Plan
Plan
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Debt Exchange
Exchanged Debt At Discount
$39.3 Million Trust Preferred (Tier 1 Capital)
$29.5 Million Subordinated Debt (Tier 2 Capital)
Enhanced Composition Of Capital
Improved Tier 1 and Tangible Capital Ratios ~ 100 bps
Recognized Pre-Tax Gain of $14.0 Million
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Core Profitability
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Operating Leverage - Third Quarter ’09 (4)
Well Above Peers
Well Above Peers
First Midwest | Metro Peers(1) | Chicago Peers(2) | |
PTPP Return on Average Assets(3) | 1.44% | 1.56% | 1.08% |
Core Drivers: | |||
Net Interest Margin | 3.66% | 3.59% | 2.91% |
Efficiency | 59% | 61% | 67% |
Data represents the peer median core performance as reported by SNL Financial
The Metro Peers consist of AMFI, BOKF, CBSH, CFR, FCF, FULT, MBFI, ONB, SUSQ, VLY, WTNY, and WTFC
The Chicago Peers consist of AMFI, MBFI, MBHI, OSBC, TAYC, and WTFC
Pre-tax, Pre-provision Operating Income (PTPP) excludes taxes, provision for loan losses, gains on early extinguishment of debt, and market related security gains
(losses) from reported quarter; PTPP is computed on a fully tax equivalent basis
(losses) from reported quarter; PTPP is computed on a fully tax equivalent basis
As of 3Q09
Greater Ability To Organically Generate Capital
Substantial Advantage
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Consistently Outperform Peers (2) (3)
Net Interest Margin
Efficiency
Data represents the peer median net interest margin and efficiency as reported by SNL Financial
Excludes special FDIC assessment and market value adjustment on deferred compensation for 2Q09
The Metro Peers consist of AMFI, BOKF, CBSH, CFR, FCF, FULT, MBFI, ONB, SUSQ, VLY, WTNY, and WTFC
The Chicago Peers consist of AMFI, MBFI, MBHI, OSBC, TAYC, and WTFC
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3rd Quarter Performance
Pre-Tax, Pre-Provision Earnings excludes taxes, provision for loan losses, and market related security gains (losses) from the reported quarter and the debt extinguishment gain in the
third quarter 2009
third quarter 2009
The Efficiency Ratio for third quarter 2009 excludes the impact of gains on early extinguishment of debt
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Excess Regulatory Capital + Operating
Leverage
Leverage
“Well Capitalized” minimum ratios are currently 6% for Tier 1, 10% for Total Capital, and 4% for Tier 1 Common (applied to Supervisory Capital Assessment Program tests on top 19 US
banks)
banks)
Excess over “Well Capitalized” grossed up using 39% marginal tax rate
Represents the pre-tax equivalent, excluding the $193 million in regulatory capital received by FMBI through the sale of preferred shares to the US Treasury as part of its Capital Purchase
Plan
Plan
Annualized 3Q09 Pre-Tax, Pre-Provision Operating Income (PTPP) excludes taxes, provision for loan losses, gains on early extinguishment of debt, and market related security gains
(losses)
(losses)
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Why First Midwest
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Why First Midwest
Strong Franchise
Navigating Reality Of Cycle
Proactive Remediation Of Credit
Solid Capital
Leveraging Operating Performance
Strengthening Core Business
Relationship-Based Lending
Core Deposit Expansion
Able To Benefit From Market Disruption
Well Positioned For Recovery
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First DuPage
FDIC-Assisted Transaction
Single Branch Entity
$230 Million Of Loans With Loss Share
$240 million Of Deposits
Strategically Accretive
Positive Earnings Contribution
Expands Existing Market
Provides FDIC Transactional Experience
“Texas Ratio” is the ratio of a bank’s nonperforming assets + loans 90 days past due divided by tangible common equity + loan loss reserve
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Prospective Acquisition Opportunities
More FDIC Opportunities Expected
Approximately 50 Banks In Chicago MSA Under $10B In
Assets With Texas Ratios > 100% (1)
Assets With Texas Ratios > 100% (1)
Market Disruption And Better Pricing
Positioned To Take Advantage
Experienced Acquirer
Resource Capacity
Criteria: Strategically Accretive