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. 8 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. 9 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. 10 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. 11