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First Midwest Bancorp, Inc.: First Midwest Bancorp, Inc. Announces 2008 Fourth Quarter and Full Year Results

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^{Published in Business and Finance on Wednesday, January 28th 2009 at 4:01 GMT, Last Modified on 2009-01-28 04:08:46 by Market Wire}  

ITASCA, IL--(Marketwire - January 28, 2009) - First Midwest Bancorp, Inc. (NASDAQ: [ FMBI ])

Operating Performance

 -- 2008 full year earnings of $49.3 million and diluted EPS of $1.00 as compared to $80.2 million and $1.62 for 2007 -- Fourth quarter 2008 net loss of $26.9 million and diluted net LPS of $0.57 versus $5.4 million and $0.11 for fourth quarter 2007 -- 2008 pre-tax earnings, excluding provision expense and securities- related losses, of $152.3 million, consistent with 2007 -- Net interest margin of 3.71% for fourth quarter 2008 versus 3.53% in 2007 and 3.63% in third quarter 2008 -- Full year 2008 salary and benefit costs down $11.7 million or 10.5% from 2007 

Credit and Market-Related Actions

 -- Loan loss reserve at December 31, 2008 of 1.75% of total loans versus 1.25% at December 31, 2007 and 1.34% at September 30, 2008 -- Noncash securities impairment charges for fourth quarter of $34.5 million -- $10.4 million charge related to reduction in the cash surrender value of bank-owned life insurance 

First Midwest Bancorp, Inc. (the "Company" or "First Midwest") (NASDAQ: [ FMBI ]), the holding company of First Midwest Bank, today reported results of operations and financial condition for fourth quarter and full year 2008. The Company's net income was $49.3 million for full year 2008 and its net loss was $26.9 million for fourth quarter 2008. This compares to net income of $80.2 million for full year 2007 and a net loss of $5.4 million for fourth quarter 2007. The Company reported a loss of $0.57 per diluted share for fourth quarter 2008 and earnings of $1.00 per diluted share for full year 2008, as compared to a loss of $0.11 per diluted share for fourth quarter 2007 and earnings of $1.62 per diluted share for full year 2007. Return on average assets was 0.59% for full year 2008 and a negative 1.31% for fourth quarter 2008 versus 0.99% for full year 2007 and a negative 0.27% for fourth quarter 2007. Return on average common equity was 6.48% for full year 2008 and a negative 13.89% for fourth quarter 2008 versus 10.69% for full year 2007 and a negative 2.91% for fourth quarter 2007.

In announcing these results the Company's President and CEO, Michael L. Scudder, commented, "Performance for the quarter was adversely impacted by higher loan loss provisions and securities-related losses, stemming from continued economic weakness. We are very disappointed in the necessity of these actions, however, these are extremely difficult economic times. Their severity requires that we address the problems of the day head on and our strong capital position and core operating performance provide us the ability to do so. As we end 2008, our tier 1 capital is at 11.62%, some $290 million in excess of regulatory minimums to be considered well capitalized. By addressing these issues proactively, First Midwest is better positioned to meet the needs of our clients and communities as well as benefit from future recovery in the market place."

Scudder further commented, "As we enter 2009, the year promises to be even more challenging than 2008. Consumers and businesses alike are experiencing increasing strain creating an environment of continuing credit weakness. Over the course of the year, we have worked to prepare ourselves for the demands of 2009, increasing our loan loss reserves, adding to our capital through the issuance of preferred securities, and reducing our dividend as well as expanding credit remediation resources and reducing our operating costs. For 2009, our focus will remain on the prudent management of these same elements."

Operating Performance

Income before taxes totaled $36.0 million for full year 2008, as compared to $94.0 million for full year 2007, with the difference largely due to higher provision for loan losses. Provision for loan losses for 2008 was $70.3 million as contrasted to $7.2 million in 2007. Excluding the provision for loan losses and market-related securities losses, income before taxes for both 2008 and 2007 was $152 million.

Total loans as of December 31, 2008 were $5.4 billion, up 2.6% compared to September 30, 2008, with the increase reflecting loans made to strong borrowers representing full customer relationships. Total average deposits for fourth quarter 2008 were $5.6 billion, compared to $5.8 billion for third quarter 2008 with the decline reflecting slightly lower retail deposits stemming from competitive pricing in our market and general economic conditions. The Company's ability to fund its lending activity predominantly with core customer deposits provides a competitive advantage given the current volatility in the cost and availability of wholesale funds.

The Company's tax equivalent net interest margin improved from the preceding quarter and from fourth quarter 2007. Tax equivalent net interest margin was 3.71% for fourth quarter 2008 and 3.61% for full year 2008 as compared to 3.63% for third quarter 2008, 3.53% for fourth quarter 2007, and 3.58% for full year 2007. Over this period, the yield on the Company's average earning assets declined 102 basis points while its cost of funds declined 126 basis points.

Fee-based revenues were $23.0 million for fourth quarter 2008 and $95.1 million for full year 2008, down 9.1% and 3.8%, respectively, from the same periods of 2007. In 2007 the Company ceased outsourcing its official check business as well as generating fees from mortgage originations. If both are excluded from the 2007 amount, fee-based revenues for the full year 2008 declined 1.0% from 2007, primarily due to lower trust revenue and retail sales of investment products.

Operating expenses continue to be well controlled as reflected by the Company's efficiency ratio of 53.5% for full year 2008. Noninterest expense was $46.6 million for fourth quarter 2008 and $194.3 million for full year 2008, down 7.3% and 2.4%, respectively, from the same periods of 2007. The declines were primarily due to reductions in salaries and benefits costs. In late 2007 and continuing into 2008, the Company initiated targeted staff reductions, primarily in support and administrative areas. Full time employees have declined over this period by 4.4%, or 83 full-time equivalents.

Credit Remediation

Nonaccrual loans at December 31, 2008 were $127.8 million, representing 2.38% of total loans, with residential construction and development customer relationships accounting for $97.1 million of the total. Of such $97.1 million, undeveloped land and land with improvements totaled $28.4 million and $38.9 million, respectively. The increase in nonaccrual loans from September 30, 2008 of $74.5 million stems primarily from the impact of slowing market conditions on five residential developers.

As of December 31, 2008, loans 90 days past due and still accruing totaled $37.0 million, unchanged from September 30, 2008 and up $15.9 million from December 31, 2007. All such loans are believed to be adequately collateralized and in the process of collection.

Foreclosed real estate was $24.4 million as of December 31, 2008 as compared to $23.7 million as of September 30, 2008 and $6.1 million as of December 31, 2007, with 60% of this representing collateral underlying foreclosed residential developments.

Restructured loans totaled $3.3 million at December 31, 2008, up $1.0 million from September 30, 2008 and $3.0 million from December 31, 2007.

During fourth quarter 2008, net charge-offs totaled $18.3 million as compared to $9.3 million in third quarter 2008. Net charge-offs for full year 2008 were $38.2 million, compared to $7.8 million for full year 2007. The majority of the year over year increase is due to charge-offs of real estate construction and development loans. In fourth quarter 2008, the Company charged off $9.2 million related to residential construction, with four loans accounting for substantially the entire amount, and $5.6 million related to commercial and industrial loans, with the majority due to two individual loans.

In response to the anticipated impact of continuing economic weakness on real estate and related markets, the Company increased its reserve for loan losses to $93.9 million as of December 31, 2008, up $24.1 million from September 30, 2008 and $32.1 million from December 31, 2007. The reserve for loan losses represented 1.75% of total loans outstanding at December 31, 2008, compared to 1.25% at December 31, 2007 and 1.34% at September 30, 2008. Provisions for loan losses for fourth quarter and full year 2008 were $42.4 million and $70.3 million, respectively, with full year 2008 provision exceeding net charge-offs by $32.1 million, or almost two times.

Given current conditions, the Company has taken a number of aggressive steps to manage and mitigate the impact on its loan portfolio. These steps include the assignment of additional dedicated resources to both the remediation of existing problem credits as well as pre-emptive analysis and communication with performing borrowers.

Securities Portfolio

Non-cash impairment charges totaling $34.5 million were recorded in fourth quarter 2008. Of such charges, $24.8 million related to three trust-preferred collateralized debt obligations ("CDOs") with an aggregate cost of $38.9 million. The remaining $9.7 million of non-cash impairment charges related to two whole loan mortgage backed securities with a combined par value of $16.6 million and a single Sallie Mae debt issuance with a par value of $10.0 million. These non-cash charges largely reflect the illiquidity and market risks existent generally.

The Company holds an additional $46.3 million of trust-preferred CDOs with a combined unrealized loss of $18.3 million. The after-tax impact of these unrealized losses has been recorded through shareholders' equity as a component of other comprehensive income.

At December 31, 2008 the Company held securities (substantially all classified as Available-for-Sale) with an amortized cost of $2.2 billion and a net unrealized loss of $3.3 million versus a net unrealized loss of $73.3 million at September 30, 2008 and $7.6 million at December 31, 2007. The $70.0 million improvement in the net unrealized loss position from September 30, 2008 was due to the recognition of the aforementioned non-cash impairment of $34.5 million in fourth quarter 2008 and $67.6 million of appreciation in the Company's $2.1 billion portfolio of fixed income municipal and government-sponsored mortgaged backed securities, partly offset by a decline in fair value of unimpaired CDOs.

Bank-Owned Life Insurance ("BOLI")

At December 31, 2008, the cash surrender value of BOLI assets totaled $198.5 million, down $8.9 million from September 30, 2008. The decline stemmed from fourth quarter losses in certain underlying investment funds and Company actions taken to reposition the funds in shorter duration assets to mitigate future reinvestment risk.

Capital Management

All regulatory mandated ratios for characterization as "well capitalized" were significantly exceeded as of December 31, 2008 and improved versus December 31, 2007 as follows:

 Minimum "Well- Excess Over Capitalized" Required Minimums Level 12/31/08 at 12/31/08 12/31/07 ----- -------- ----------------- -------- (Amounts in millions) Tier 1 Risk Based Capital 6.00% 11.60% 93% $ 370 9.03% Total Risk Based Capital 10.00% 14.36% 44% $ 288 11.58% Tier 1 Leverage Capital 5.00% 9.41% 88% $ 359 7.46% 

On December 5, 2008 the Company received $193.0 million from the sale of preferred shares to the U.S. Treasury as part of its Capital Purchase Program ("CPP"). In connection with the CPP investment, the Company issued to the U.S. Treasury a total of 193,000 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series B, at an initial fixed rate of 5% with a $1,000 per share liquidation preference, and a warrant to purchase up to 1.3 million shares of the Company's common stock at an exercise price of $22.18 per share. Both the preferred shares and the warrants are accounted for as components of the Company's regulatory Tier 1 capital as of December 31, 2008. Preferred share proceeds received were temporarily invested in government sponsored mortgage-backed securities pending future deployment.

Responsive to the then environment, the Company announced in fourth quarter 2008 a reduction in its quarterly common stock dividend from $0.310 per share to $0.225 per share. This reduction would equate to approximately $16 million in retained capital over the course of a year.

The Board of Directors will continue to evaluate all aspects of the Company's capital plan each quarter, recognizing both current and anticipated conditions.

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 some 100 offices located in 62 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.

Safe Harbor Statement

This 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 31, 2007 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, January 28, 2009 at 10:00 a.m. (ET). Members of the public who would like to listen to the conference call should dial 1-866-713-8310 (U.S. domestic) or 1-617-597-5308 (international) and enter passcode number 287-96-096. 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 website, [ 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 website or by dialing 1-888-286-8010 (U.S. domestic) or 1-617-801-6888 (international) passcode number 713-29-279, beginning approximately one hour after the event through 11:59 pm (ET) on February 4, 2009. Please direct any questions regarding obtaining access to the conference call to First Midwest Bancorp, Inc. Investor Relations, via e-mail, at [ investor.relations@firstmidwest.com ].

Accompanying Financial Statements and Tables

Accompanying this press release is the following unaudited financial information:

 -- Operating Highlights, Balance Sheet Highlights, Stock Performance Data, and Capital Ratios (1 page) -- Condensed Consolidated Statements of Condition (1 page) -- Condensed Consolidated Statements of Income (1 page) -- Loan Portfolio Composition (1 page) -- 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 at [ http://www.firstmidwest.com/aboutinvestor_selected.asp ].

 First Midwest Bancorp, Inc. Press Release Dated January 28, 2009 Operating Highlights Unaudited Quarters Ended Years Ended ------------------------------- -------------------- (Amounts in thousands except Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31, per share data) 2008 2008 2007 2008 2007 --------- --------- --------- --------- --------- Net income $ (26,890) $ 24,191 $ (5,418) $ 49,336 $ 80,159 Diluted earnings per share $ (0.57) $ 0.50 $ (0.11) $ 1.00 $ 1.62 Return on average equity (13.89%) 13.09% (2.91%) 6.48% 10.69% Return on average assets (1.31%) 1.16% (0.27%) 0.59% 0.99% Net interest margin 3.71% 3.63% 3.53% 3.61% 3.58% Efficiency ratio 59.06% 50.30% 53.87% 53.49% 52.50% Balance Sheet Highlights Unaudited As Of ------------------------------------- (Dollar amounts in thousands except Dec. 31, Sept. 30, Dec. 31, per share data) 2008 2008 2007 ----------- ----------- ----------- Total assets $ 8,528,341 $ 8,246,655 $ 8,091,518 Total loans 5,360,063 5,223,582 4,963,672 Total deposits 5,585,754 5,658,284 5,778,861 Total stockholders’ equity 908,279 718,909 723,975 Common stockholders’ equity 715,949 718,909 723,975 Book value per share $ 14.72 $ 14.80 $ 14.94 Period end shares outstanding 48,630 48,590 48,453 Stock Performance Data Unaudited Quarters Ended ------------------------------------- (Dollar amounts in thousands except Dec. 31, Sept. 30, Dec. 31, per share data) 2008 2008 2007 ----------- ----------- ----------- Market Closing Price: Quarter End $ 19.97 $ 24.24 $ 30.60 High $ 27.32 $ 29.84 $ 36.31 Low $ 14.33 $ 14.00 $ 29.89 Quarter end price to book value 1.4x 1.6x 2.0x Quarter end price to full year 2008 earnings 19.97x N/A N/A Dividends declared per share $ 0.225 $ 0.310 $ 0.310 Common dividends paid $ 10,955 $ 15,088 $ 15,045 Capital Ratios Unaudited As Of ------------------------------------- Dec. 31, Sept. 30, Dec. 31, 2008 2008 2007 ----------- ----------- ----------- Regulatory capital ratios: Total capital to risk-weighted assets 14.36% 12.04% 11.58% Tier 1 capital to risk-weighted assets 11.60% 9.42% 9.03% Tier 1 leverage to average assets 9.41% 7.59% 7.46% Tangible common equity ratios: Tangible common equity to tangible assets 5.23% 5.44% 5.58% Tangible common equity, excluding other comprehensive loss, to tangible assets 5.45% 6.09% 5.73% Tangible common equity to risk-weighted assets 6.53% 6.69% 6.87% First Midwest Bancorp, Inc. Press Release Dated January 28, 2009 Condensed Consolidated Statements of Condition Unaudited December 31, ------------------------ (Amounts in thousands) 2008 2007 ----------- ----------- Assets Cash and due from banks $ 106,082 $ 193,792 Funds sold and other short-term investments 8,226 1,439 Trading account securities 12,358 18,352 Securities available-for-sale 2,216,186 2,080,046 Securities held to maturity, at amortized cost 84,306 97,671 Federal Home Loan Bank and Federal Reserve Bank stock, at cost 54,767 54,767 Loans 5,360,063 4,963,672 Reserve for loan losses (93,869) (61,800) ----------- ----------- Net loans 5,266,194 4,901,872 ----------- ----------- Foreclosed real estate 24,368 6,053 Premises, furniture, and equipment 120,035 125,828 Investment in bank owned life insurance 198,533 203,535 Goodwill and other intangible assets 284,548 288,235 Accrued interest receivable and other assets 152,738 119,928 ----------- ----------- Total assets $ 8,528,341 $ 8,091,518 =========== =========== Liabilities and Stockholders' Equity Deposits Transactional deposits $ 3,457,954 $ 3,582,031 Time deposits 1,950,362 2,100,390 Brokered deposits 177,438 96,440 ----------- ----------- Total deposits 5,585,754 5,778,861 Borrowed funds 1,698,334 1,264,228 Subordinated debt 232,409 230,082 Accrued interest payable and other liabilities 103,565 94,372 ----------- ----------- Total liabilities 7,620,062 7,367,543 ----------- ----------- Preferred stock 189,617 - Common stock 613 613 Additional paid-in capital 210,698 207,851 Retained earnings 837,390 844,972 Accumulated other comprehensive (loss) (18,042) (11,727) Treasury stock, at cost (311,997) (317,734) ----------- ----------- Total stockholders' equity 908,279 723,975 ----------- ----------- Total liabilities and stockholders'equity $ 8,528,341 $ 8,091,518 =========== =========== First Midwest Bancorp, Inc. Press Release Dated January 28, 2009 Condensed Consolidated Statements of Income Quarters Ended Years Ended Unaudited December 31, December 31, -------------------- -------------------- (Amounts in thousands except per share data) 2008 2007 2008 2007 --------- --------- --------- --------- Interest Income Loans $ 71,849 $ 87,998 $ 302,931 $ 365,370 Securities 25,583 26,009 104,448 108,470 Other 501 604 1,828 3,121 --------- --------- --------- --------- Total interest income 97,933 114,611 409,207 476,961 --------- --------- --------- --------- Interest Expense Deposits 22,802 40,598 110,622 166,267 Borrowed funds 6,416 12,148 37,192 55,540 Subordinated debt 3,702 3,767 14,796 15,025 --------- --------- --------- --------- Total interest expense 32,920 56,513 162,610 236,832 --------- --------- --------- --------- Net interest income 65,013 58,098 246,597 240,129 --------- --------- --------- --------- Provision for loan losses 42,385 2,042 70,254 7,233 --------- --------- --------- --------- Net interest income after provision for loan losses 22,628 56,056 176,343 232,896 Noninterest Income Service charges on deposit accounts 11,206 11,986 44,987 45,015 Trust and investment management fees 3,420 4,061 15,130 15,701 Other service charges, commissions, and fees 4,554 5,324 18,846 22,183 Card-based fees 3,868 3,979 16,143 15,925 --------- --------- --------- --------- Subtotal, fee-based revenues 23,048 25,350 95,106 98,824 --------- --------- --------- --------- Bank owned life insurance income (8,858) 2,117 (2,369) 8,033 Securities (losses) gains, net (34,215) (50,041) (35,611) (50,801) Other (2,104) 109 (3,119) 4,197 --------- --------- --------- --------- Total noninterest income (22,129) (22,465) 54,007 60,253 --------- --------- --------- --------- Noninterest Expense Salaries and employee benefits 20,356 27,686 99,910 111,598 Net occupancy expense 5,967 5,480 23,378 22,054 Equipment expense 2,454 2,744 9,956 10,540 Technology and related costs 1,848 1,760 7,429 7,084 Other 15,956 12,594 53,632 47,861 --------- --------- --------- --------- Total noninterest expense 46,581 50,264 194,305 199,137 --------- --------- --------- --------- Income before taxes (46,082) (16,673) 36,045 94,012 Income tax (benefit) expense (19,192) (11,255) (13,291) 13,853 --------- --------- --------- --------- Net (Loss) Income (26,890) (5,418) 49,336 80,159 Preferred dividends (712) - (712) - --------- --------- --------- --------- Net (Loss) Income Applicable to Common Shares $ (27,602) $ (5,418) $ 48,624 $ 80,159 ========= ========= ========= ========= Diluted Earnings Per Share $ (0.57) $ (0.11) $ 1.00 $ 1.62 Dividends Declared Per Share $ 0.225 $ 0.310 $ 1.155 $ 1.195 Weighted Average Diluted Shares Outstanding 48,540 48,754 48,565 49,622 First Midwest Bancorp, Inc. Press Release Dated January 28, 2009 Percent Change Unaudited As Of From ---------------------------------------- ---------------- (Dollar amounts % of in thousands) 12/31/08 total 9/30/08 6/30/08 9/30/08 6/30/08 ---------- ------ ---------- ---------- ------- ------- Loan Portfolio Composition Commercial and industrial $1,490,101 27.8% $1,485,541 $1,448,723 0.3% 2.9% Agricultural 142,635 2.7% 159,217 207,438 (10.4%) (31.2%) Commercial real estate: Office, retail, and industrial 1,127,689 21.0% 1,092,268 1,048,547 3.2% 7.5% Residential land and development 509,059 9.5% 509,974 510,818 (0.2%) (0.3%) Multifamily 237,646 4.4% 204,029 195,815 16.5% 21.4% Other commercial real estate 1,106,952 20.7% 1,021,662 1,014,759 8.3% 9.1% ---------- ------ ---------- ---------- ------- ------- Total commer- cial real estate 2,981,346 55.6% 2,827,933 2,769,939 5.4% 7.6% ---------- ------ ---------- ---------- ------- ------- Consumer: Home equity 477,105 8.9% 468,703 460,581 1.8% 3.6% Real estate 1-4 family 198,197 3.7% 205,851 213,295 (3.7%) (7.1%) Other consumer 70,679 1.3% 76,337 82,379 (7.4%) (14.2%) ---------- ------ ---------- ---------- ------- ------- Total consumer 745,981 13.9% 750,891 756,255 (0.7%) (1.4%) ---------- ------ ---------- ---------- ------- ------- Total loans $5,360,063 100.0% $5,223,582 $5,182,355 2.6% 3.4% ========== ====== ========== ========== ======= ======= Commercial Real Estate Detail Office, Retail, and Industrial Office $ 373,242 33.1% $ 352,200 $ 337,424 6.0% 10.6% Retail 313,286 27.8% 300,570 281,942 4.2% 11.1% Industrial 441,161 39.1% 439,498 429,181 0.4% 2.8% ---------- ------ ---------- ---------- ------- ------- Total office, retail, and industrial $1,127,689 100.0% $1,092,268 $1,048,547 3.2% 7.5% ========== ====== ========== ========== ======= ======= Residential Land and Development Structures $ 185,929 36.5% $ 190,741 $ 217,161 (2.5%) (14.4%) Land 323,130 63.5% 319,233 293,657 1.2% 10.0% ---------- ------ ---------- ---------- ------- ------- Total residential land and development $ 509,059 100.0% $ 509,974 $ 510,818 (0.2%) (0.3%) ========== ====== ========== ========== ======= ======= Other Commercial Real Estate Commercial land $ 280,120 25.3% $ 263,030 $ 285,411 6.5% (1.9%) 1-5 family investors 193,227 17.5% 178,540 168,259 8.2% 14.8% Service stations and truck stops 146,891 13.3% 134,677 120,670 9.1% 21.7% Warehouses and storage 85,276 7.7% 80,889 79,580 5.4% 7.2% Hotels 79,186 7.2% 67,217 67,574 17.8% 17.2% Restaurants 48,106 4.3% 44,872 47,313 7.2% 1.7% Medical 42,269 3.8% 42,253 43,347 0.0% (2.5%) Automobile dealers 38,505 3.5% 38,866 37,562 (0.9%) 2.5% Mobile home parks 36,790 3.3% 29,670 25,217 24.0% 45.9% Recreational 14,515 1.3% 14,760 15,106 (1.7%) (3.9%) Religious 11,224 1.0% 10,317 11,362 8.8% (1.2%) Other 130,843 11.8% 116,571 113,358 12.2% 15.4% ---------- ------ ---------- ---------- ------- ------- Total other commercial real estate $1,106,952 100.0% $1,021,622 $1,014,759 8.3% 9.1% ========== ====== ========== ========== ======= ======= First Midwest Bancorp, Inc. Press Release Dated January 28, 2009 ----------------------------------------------------- Unaudited As Of ----------------------------------------------------- (Dollar amounts in % of Loan % of thousands) 12/31/08 Category Total 9/30/08 6/30/08 --------- --------- --------- --------- --------- Asset Quality Nonaccrual loans: Commercial and industrial $ 15,586 1.05% 12.2% $ 13,961 $ 5,222 Office, retail, and industrial 2,533 0.22% 2.0% 1,195 1,125 Residential land and development 97,060 19.07% 76.0% 28,335 11,664 Multifamily 1,387 0.58% 1.1% 2,827 3,016 Other commercial real estate 6,926 0.63% 5.4% 1,845 885 Consumer 4,276 0.57% 3.3% 5,154 3,324 --------- ========= --------- --------- --------- Total nonaccrual loans $ 127,768 2.38% 100.0% $ 53,317 $ 25,236 ========= ========= ========= ========= ========= Restructured loans 3,260 2,258 259 Foreclosed real estate 24,368 23,697 7,042 90 days past due loans (still accruing interest): Commercial and industrial $ 6,818 0.46% 18.4% $ 4,006 $ 4,530 Agricultural 1,751 1.23% 4.7% 1,751 - Office, retail, and industrial 3,214 0.29% 8.7% 4,838 2,855 Residential land and development 8,489 1.67% 23.0% 17,615 16,696 Multifamily 1,881 0.79% 5.1% 1,216 2,071 Other commercial real estate 6,586 0.59% 17.8% 2,469 3,410 Consumer 8,260 1.11% 22.3% 5,421 7,948 --------- ========= --------- --------- --------- Total 90 days past due loans $ 36,999 0.69% 100.0% $ 37,316 $ 37,510 ========= ========= ========= ========= ========= 30-89 days past due loans $ 116,206 2.17% - $ 104,769 $ 185,186 ========= ========= ========= ========= ========= Asset Quality Ratios Nonaccrual loans to loans 2.38% - - 1.02% 0.49% Nonaccrual loans plus loans past due 90 days to loans 3.07% - - 1.74% 1.21% Reserve for loan losses $ 93,869 - - $ 69,811 $ 66,104 Reserve for loan losses to loans 1.75% - - 1.34% 1.28% Reserve for loan losses to nonaccrual loans 73% - - 131% 262% Reserve for loan losses to nonaccrual loans plus loans past due 90 days 57% - - 77% 105% ========= ========= ========= ========= ========= Quarters Ended ----------------------------------------------------- (Dollar amounts in % of Loan % of thousands) 12/31/08 Category Total 9/30/08 6/30/08 --------- --------- --------- --------- --------- Charge-off Data Net loans charged-off: Commercial and industrial $ 5,601 0.38% 30.6% $ 1,899 $ 2,338 Agricultural - (4) 42 Office, retail, and industrial 699 0.06% 3.8% 2 31 Residential land and development 9,227 1.81% 50.3% 5,856 138 Multifamily 164 0.07% 0.9% (40) 830 Other commercial real estate 397 0.04% 2.2% 62 116 Consumer 2,239 0.30% 12.2% 1,547 961 --------- --------- --------- --------- --------- Total net loans charged-off $ 18,327 1.38% 100.0% $ 9,322 $ 4,456 ========= ========= ========= ========= ========= Net loan charge-offs to average loans (annualized): Quarter-to-date 1.38% - - 0.71% 0.35% Year-to-date 0.74% - - 0.52% 0.42% First Midwest Bancorp, Inc. Press Release Dated January 28, 2009 Securities Available-For-Sale Collateralized Other U.S. U.S. Mortgage Mortgage Unaudited Treasury Agency Obligations Backed ----------- ------------ ----------- ----------- As of December 31, 2008 Amortized cost $ 1,039 $ - $ 694,285 $ 504,918 Gross unrealized gains (losses): Gross unrealized Gains 2 - 7,668 13,421 Gross unrealized losses - - (3,114) (74) ----------- ------------ ----------- ----------- Net unrealized gains (losses) 2 - 4,554 13,347 ----------- ------------ ----------- ----------- Fair value $ 1,041 $ - $ 698,839 $ 518,265 =========== ============ =========== =========== As of September 30, 2008 Amortized cost $ 902 $ 1,999 $ 515,376 $ 517,139 Gross unrealized gains (losses): Gross unrealized gains 3 3 1,798 1,970 Gross unrealized losses - - (6,827) (3,068) ----------- ------------ ----------- ----------- Net unrealized gains (losses) 3 3 (5,029) (1,098) ----------- ------------ ----------- ----------- Fair value $ 905 $ 2,002 $ 510,347 $ 516,041 =========== ============ =========== =========== As of December 31, 2007 Amortized cost $ 1,027 $ 41,895 $ 534,688 $ 417,532 Gross unrealized gains (losses): Gross unrealized gains 2 597 2,333 5,116 Gross unrealized losses (1) - (2,221) (2,328) ----------- ------------ ----------- ----------- Net unrealized gains (losses) 1 597 112 2,788 ----------- ------------ ----------- ----------- Fair value $ 1,028 $ 42,492 $ 534,800 $ 420,320 =========== ============ =========== =========== State Collateralized and Debt Unaudited Municipal Obligations Other Total ----------- ----------- ----------- ----------- As of December 31, 2008 Amortized cost $ 907,036 $ 60,406 $ 51,820 $ 2,219,504 Gross unrealized gains (losses): Gross unrealized gains 12,606 - 213 33,910 Gross unrealized losses (12,895) (18,320) (2,825) (37,228) ----------- ----------- ----------- ----------- Net unrealized gains (losses) (289) (18,320) (2,612) (3,318) ----------- ----------- ----------- ----------- Fair value $ 906,747 $ 42,086 $ 49,208 $ 2,216,186 =========== =========== =========== =========== As of September 30, 2008 Amortized cost $ 926,519 $ 85,286 $ 50,973 $ 2,098,194 Gross unrealized gains (losses): Gross unrealized gains 1,987 80 26 5,867 Gross unrealized losses (45,854) (14,000) (9,431) (79,180) ----------- ----------- ----------- ----------- Net unrealized gains (losses) (43,867) (13,920) (9,405) (73,313) ----------- ----------- ----------- ----------- Fair value $ 882,652 $ 71,366 $ 41,568 $ 2,024,881 =========== =========== =========== =========== As of December 31, 2007 Amortized cost $ 961,638 $ 95,584 $ 35,295 $ 2,087,659 Gross unrealized gains (losses): Gross unrealized gains 7,728 - 34 15,810 Gross unrealized losses (2,531) (13,954) (2,388) (23,423) ----------- ----------- ----------- ----------- Net unrealized gains (losses) 5,197 (13,954) (2,354) (7,613) ----------- ----------- ----------- ----------- Fair value $ 966,835 $ 81,630 $ 32,941 $ 2,080,046 =========== =========== =========== ===========