Exhibit 99.1
First Midwest Bancorp, Inc. and Heritage Financial Services, Inc.
Unaudited Pro Forma Statement of Condition
as of March 31, 1998
and
Unaudited Pro Forma Statements of Income
for the quarters ended,
March 31, 1998 and 1997
(Amounts in thousands except per share data)
**********
The accompanying financial information presents the statement of condition and
statements of income of First Midwest and Heritage on a pro forma basis as if
the transaction had been consummated on January 1, 1997, with all prior periods
being restated.
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Pro Forma Condensed Statement of Condition (Unaudited)
As of March 31, 1998
--------------------------------------------------------------
First Pro Forma
Midwest Heritage Pro Forma Consolidated
---------- ---------- --------- ------------
Assets
Cash and due from banks $ 133,498 $ 35,088 $ --- $ 168,586
Funds sold and other short-term investments 7,666 43,255 --- 50,921
Mortgages held for sale 44,365 --- --- 44,365
Securities available for sale 1,072,764 380,516 --- 1,453,280
Securities held to maturity 26,720 111,393 --- 138,113
Trading account securities --- 471 --- 471
Loans 2,282,947 718,533 --- 3,001,480
Reserve for loan losses (35,822) (9,801) --- (45,623)
---------- ---------- --------- ------------
Net loans 2,247,125 708,732 --- 2,955,857
---------- ---------- --------- ------------
Premises, furniture and equipment 58,807 19,352 --- 78,159
Accrued interest receivable and other assets 138,002 26,286 --- 164,288
---------- ---------- --------- ------------
Total Assets $3,728,947 $1,325,093 $ --- $ 5,054,040
========== ========== ========= ============
Liabilities
Deposits $2,800,167 $1,134,409 $ --- $ 3,934,576
Short-term borrowings 548,345 52,442 --- 600,787
Accrued interest payable and other liabilities 41,180 12,364 11,550/(1)/ 65,094
---------- ---------- --------- ------------
Total liabilities 3,389,692 1,199,215 11,550 4,600,457
---------- ---------- --------- ------------
Stockholders' Equity
Common Stock 201 --- 93/(2)/ 294
Additional paid-in capital 62,901 24,260 (93)/(2)/ 87,068
Retained earnings 288,675 96,130 (11,550)/(1)/ 373,255
Accumulated other comprehensive income 1,191 5,579 --- 6,770
Less: Treasury stock (13,713) (91) --- (13,804)
---------- ---------- --------- ------------
Total stockholders' equity 339,255 125,878 (11,550) 453,583
---------- ---------- --------- ------------
Total Liabilities and Stockholders' Equity $3,728,947 $1,325,093 $ --- $ 5,054,040
========== ========== ========= ============
See Footnotes on Page 11.
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Pro Forma Condensed Statement of Income (Unaudited)
Three Months Ended
March 31, 1998
----------------------------------------
First Pro Forma
Midwest Heritage Consolidated
------------ ---------- ---------------
Interest Income
Interest and fees on loans................................................... $ 51,957 $ 14,913 $ 66,870
Interest on securities....................................................... 15,694 8,133 23,827
Interest on funds sold and other short-term investments...................... 856 303 1,159
-------- -------- ---------
Total interest income.................................................... 68,507 23,349 91,856
-------- -------- ---------
Interest Expense
Interest on deposits......................................................... 25,565 10,454 36,019
Interest on short-term borrowings............................................ 6,353 478 6,831
-------- -------- ---------
Total interest expense................................................... 31,918 10,932 42,850
-------- -------- ---------
Net interest income...................................................... 36,589 12,417 49,006
Provision for Loan Losses.................................................... 1,118 150 1,268
-------- -------- ---------
Net interest income after provision for loan losses...................... 35,471 12,267 47,738
Noninterest Income........................................................... 9,771 2,621 12,392
Noninterest Expense.......................................................... 28,444 8,016 36,460
-------- -------- ---------
Income before income tax expense......................................... 16,798 6,872 23,670
Income Tax Expense........................................................... 5,356 2,127 7,483
-------- -------- ---------
Net Income................................................................ $ 11,442 $ 4,745 $ 16,187
======== ======== =========
Basic Earnings Per Share/(3)/............................................. $ 0.57 $ 0.55
======== =========
Diluted Earnings Per Share/(4)/........................................... $ 0.56 $ 0.54
======== =========
Average Shares Outstanding /(3)/.......................................... 20,077 29,409
======== =========
Average Diluted Shares Outstanding/(4)/................................... 20,345 29,981
======== =========
- -------------------------------------------
See Footnotes on Page 11.
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Pro Forma Condensed Statement of Income (Unaudited)
Three Months Ended
March 31, 1997
------------------------------------------
First Pro Forma
Midwest Heritage Consolidated
------------ ------------ ------------
Interest Income
Interest and fees on loans....................................... $ 51,022 $ 13,811 $ 64,833
Interest on securities........................................... 14,383 8,217 22,600
Interest on funds sold and other short-term investments.......... 391 13 404
------------ ------------ ------------
Total interest income........................................ 65,796 22,041 87,837
------------ ------------ ------------
Interest Expense
Interest on deposits............................................. 25,858 9,480 35,338
Interest on short-term borrowings................................ 4,569 577 5,146
------------ ------------ ------------
Total interest expense....................................... 30,427 10,057 40,484
------------ ------------ ------------
Net interest income.......................................... 35,369 11,984 47,353
Provision for Loan Losses........................................ 2,108 150 2,258
------------ ------------ ------------
Net interest income after provision for loan losses.......... 33,261 11,834 45,095
Noninterest Income............................................... 9,334 2,301 11,635
Noninterest Expense.............................................. 26,438 7,774 34,212
------------ ------------ ------------
Income before income tax expense............................. 16,157 6,361 22,518
Income Tax Expense............................................... 5,748 2,030 7,778
------------ ------------ ------------
Net Income................................................... $ 10,409 $ 4,331 $ 14,740
============ ============ ============
Basic Earnings Per Share/ (3)/............................... $ 0.52 $ $0.50
============ ============
Diluted Earnings Per Share/(4)/.............................. $ 0.52 $ $0.49
============ ============
Average Shares Outstanding /(3)/............................. 19,998 29,300
============ ============
Average Diluted Shares Outstanding /(4)/..................... 20,181 29,785
============ ============
- ------------------------------------
Footnotes to Pro Forma Combining Financial Statements:
(1) Reflects the estimated acquisition charge ($15,400) and related tax
benefits ($3,850) to be recorded upon the consummation of the Merger. Such
estimated charge includes costs related to severance and related
obligations, investment banker fees and expenses, professional and filing
fees, contract termination fees, and other costs necessary to consummate
the acquisition. The estimates include assumptions about the timing of the
consummation of the Merger and the number of employees whose employment
will terminate as a result of the Merger. Changes in such assumptions could
result in a change in the estimated total charge. These costs result
directly from the Merger and are expected to be incurred within 12 months
of the consummation date. The unaudited financial information does not
reflect the effect of any cost savings or revenue enhancements which are
expected to result from the consolidation of operations of First Midwest
and Heritage.
(2) Reflects the increase in First Midwest Common Stock, $.01 par value and
related reduction in additional paid-in capital for the issuance of
approximately 9,342 shares in the exchange for 12,141 shares of Heritage
Common Stock outstanding at March 31, 1998.
(3) The pro forma consolidated basic earnings per share and average shares
outstanding are based upon net income for First Midwest and Heritage
divided by the total pro forma average shares of the combined entity
assuming conversion of the Heritage Common Stock at the 0.7695 exchange
ratio.
(4) The pro forma consolidated diluted earnings per share and average diluted
shares outstanding are based upon net income of First Midwest and Heritage
divided by the total pro forma average shares of the combined entity,
adjusted for the potential dilutive effect of shares issuable under the
entities' stock option plans, assuming conversion of the Heritage Common
Stock at the 0.7695 exchange ratio.
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