SOURCE: First Midwest Bancorp, Inc.

First Midwest Bancorp, Inc.

January 12, 2010 16:49 ET

First Midwest Bancorp, Inc. Announces 2009 Fourth Quarter and Full Year Results

Solid Core Operating Earnings -- Proactively Addressing Credit -- Improved Capital Position

ITASCA, IL--(Marketwire - January 12, 2010) - First Midwest Bancorp, Inc. (NASDAQ: FMBI)

Operating Performance

--  Full year loss of $25.8 million and diluted loss per share of $0.71
    compared to 2008 full year earnings of $49.3 million and diluted earnings
    per share of $1.00.
--  Net loss of $37.5 million for fourth quarter 2009 vs. $3.4 million net
    income for third quarter 2009 and $26.9 million net loss for fourth quarter
    2008.
--  Pre-tax, pre-provision core operating earnings of $32.7 million for
    fourth quarter 2009, up 8% from third quarter 2009.
--  Net interest margin of 4.04% for fourth quarter 2009, up 38 basis points
    from third quarter 2009.
--  Pre-tax gain of $13.1 million resulting from acquisition of First DuPage
    Bank and net securities loss of $5.8 million during the fourth quarter.
    

Capital and Credit

--  Tangible common equity to tangible assets of 6.29%, up 106 basis points
    from prior year end.
--  Non-accrual plus 90 days past due loans totaled $248.3 million down 6%
    from September 30, 2009.
--  Loan loss reserves to total loans increased 25 basis points to 2.78% from
    September 30, 2009, with provisions of $93.0 million exceeding net charge-
    offs of $82.5 million.
--  Other real estate owned of $57.1 million at December 31, 2009, net of
    valuation write-downs and losses on disposition totaling $14.1 million for
    the fourth quarter 2009.
    

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 2009. Net loss for the quarter was $37.5 million, before adjustment for preferred dividends and non-vested restricted shares, with a loss of $39.5 million, or $0.73 loss per share, available to common shareholders after such adjustments. This compares to net income of $3.4 million and $773,000, or $0.02 per share, respectively, for third quarter 2009, and a net loss of $26.9 million and $27.6 million, or $0.57 loss per share, respectively for fourth quarter 2008.

Summary Update

In making the announcement, Michael L. Scudder, President and Chief Executive Officer of First Midwest Bancorp, Inc., said, "Performance for 2009 reflects balanced management of our credit, capital, and core business in what has been an extremely difficult environment. As we close 2009, we have worked to align problem asset carrying values with our planned disposition strategies while confronting lower property values. While painful in the short term, these actions better position us to work out problem loans in the most expedient and economically responsible manner. Importantly, we have been able to absorb these significantly higher costs while strengthening our capital position, as we have benefited from continued solid operating performance. Our tangible common equity now stands at 6.29%, 106 basis points higher than last year. Our core business has benefited from continued sales, greatly improved margins, and controlled spending."

Mr. Scudder continued, "As we enter 2010, signs of economic recovery are emerging but remain tenuous. In what promises to again be a challenging credit environment, our priorities remain centered on remediating problem assets, managing capital, and expanding our core business. By doing so, we better position ourselves to benefit from economic recovery and pursue opportunities for growth when other less healthy institutions cannot -- thereby enhancing the long-term value of the Company for our shareholders."

Operating Performance

The Company generated pre-tax, pre-provision core operating earnings, of $32.7 million for fourth quarter 2009, up 8.1% from third quarter 2009 and down 21.2% from fourth quarter 2008. A reconciliation of earnings in accordance with generally accepted accounting principles ("GAAP") to non-GAAP pre-tax, pre-provision core operating earnings is presented on page 11 of this earnings release.

The increase from third quarter 2009 was due primarily to improved net interest income, while the decline from fourth quarter 2008 primarily reflects the impact of higher compensation-related expenses, loan remediation costs, and FDIC premiums on deposits.

Pre-tax, pre-provision core operating earnings for full year 2009 were $131.4 million, a decrease of 14.6% from 2008. Improved net interest income was more than offset by lower fee-based revenue and higher remediation costs and FDIC premiums.

Total loans as of December 31, 2009 were $5.2 billion, a decrease of $102.8 million and $156.8 million from September 30, 2009 and December 31, 2008, respectively.

Average core transactional deposits for fourth quarter 2009 were $3.9 billion, an increase of $29.7 million from third quarter 2009 and $440.7 million, or 12.8%, from fourth quarter 2008. Average core transactional deposits for the full year 2009 increased $175.7 million, or 4.9%, from 2008 due in large part to customers' desire to maintain more liquid, short-term deposits.

Tax-equivalent net interest margin was 4.04% for fourth quarter 2009, an increase from 3.66% for third quarter 2009 and 3.71% for fourth quarter 2008. The yield on average earning assets for fourth quarter 2009 improved 10 basis points compared to third quarter 2009, while the Company's cost of funds declined 31 basis points compared to third quarter 2009. The yield on average earning assets for fourth quarter 2009 declined 45 basis points compared to fourth quarter 2008 and the Company's cost of funds declined 86 basis points compared to the same period in 2008.

Fee-based revenues were $22.0 million and $85.2 million for fourth quarter and full year 2009, respectively. These represented decreases of 4.7% and 10.4%, respectively, from the same periods of 2008 and largely reflect the impact of reduced consumer spending. For the third consecutive quarter, fee-based revenues improved, reflecting increases in trust, card-based, and other service charge revenues.

Bank-owned life insurance income for fourth quarter 2009 increased $9.1 million from fourth quarter 2008, reflecting a $10.4 million charge in fourth quarter 2008 related to a reduction in the cash surrender value of bank-owned life insurance. Other income for fourth quarter and full year 2009 increased from the same periods in 2008 as a result of a market adjustment related to a change in value of certain assets held under a non-qualified deferred compensation plan. The market adjustment for each period is substantially offset by a corresponding amount in compensation expense.

For fourth quarter 2009, noninterest expense increased $13.9 million compared to third quarter 2009 and $23.9 million from fourth quarter 2008. The increase from third quarter 2009 was due primarily to losses related to other real estate owned. The increase from fourth quarter 2008 was also due to losses related to other real estate owned in addition to higher FDIC premiums, higher pension and profit-sharing expense, and higher compensation expense associated with the market adjustment referred to above.

For full year 2009, noninterest expense increased $40.5 million from full year 2008 with the increase due primarily to a $20.0 million increase in losses and remediation expenses related to other real estate owned, as well as a $12.6 million increase in FDIC premiums and the previously referenced market adjustment for the Company's non-qualified deferred compensation plan. The increase in FDIC premiums expense included an industry-wide special assessment of $3.5 million.

Asset Quality

Non-accrual plus 90 day past due loans as of December 31, 2009 were $248.3 million, down 6% compared to September 30, 2009, with residential construction loans comprising 45% of the total. Loans 30-89 days past due totaled $37.9 million at December 31, 2009, down 15% from September 30, 2009.

During fourth quarter 2009, the Company increased its reserve for loan losses to $144.8 million, up $10.5 million from September 30, 2009 and $50.9 million from December 31, 2008. The reserve for loan losses represented 2.78% of total loans outstanding at December 31, 2009, compared to 2.53% at September 30, 2009 and 1.75% at December 31, 2008. The reserve for loan losses as a percentage of nonaccrual plus 90-day past due loans was 58% at December 31, 2009, up from 51% and 57% at September 30, 2009 and December 31, 2008, respectively.

Net charge-offs totaled $82.5 million during fourth quarter 2009, compared to $31.3 million in third quarter 2009. Net charge-offs for full year 2009 totaled $164.7 million or 3.08% of average loans, as compared to $38.2 million or 0.74% of average loans for full year 2008.

The provision for loan losses for fourth quarter 2009 was $93.0 million and $215.7 million for full year 2009, compared to $42.4 million and $70.3 million for fourth quarter and full year 2008, respectively.

Charge-offs and provisioning during 2009 were largely influenced by the credit performance of the Company's residential construction and land loan portfolio. This portfolio currently represents only 6% of total loans but accounted for 45% of total non-performing loans and 46% of total fourth quarter charge-offs. These charge-offs reflect management's continuing efforts to align the carrying value of these assets with the value of underlying collateral based upon more aggressive disposition strategies and recognizing falling property values. To that end, updated appraisals were received on some 80% of the non-performing residential construction portfolio during fourth quarter 2009.

Other real estate owned (OREO) was $57.1 million as of December 31, 2009 compared to $57.9 million as of September 30, 2009. During fourth quarter the Company reduced the carrying value of OREO properties by $9.2 million reflective of existing market conditions and more aggressive disposition strategies; and additionally, OREO with a carrying value of $13.7 million was sold at a net loss of $4.9 million bringing full year sales to $25.3 million and losses of $6.0 million.

Securities Portfolio

The Company's $1.3 billion available-for-sale portfolio remains highly liquid with approximately 95% comprised of municipals, CMOs, and agency pass-through securities. The remainder consists of trust-preferred collateralized debt obligation pools (CDOs) with a fair value of $11.7 million and an unrealized loss of $42.6 million, and miscellaneous other securities totaling $46.1 million.

Net securities losses were $5.8 million for fourth quarter 2009 and included an other-than-temporary impairment of $6.0 million associated with the Company's CDOs.

Acquisition of First DuPage Bank

On October 23, 2009 the Company acquired substantially all the assets of the $260 million former First DuPage Bank in an FDIC-assisted transaction generating a gain of $13.1 million. Loans comprise the majority of the assets acquired and are subject to a loss sharing arrangement with the FDIC whereby the Company is indemnified against the majority of any losses incurred related to these loans. The loans acquired from the former First DuPage Bank, including the FDIC indemnification, total $223.2 million at December 31, 2009 and are classified and presented as Covered Assets in the statement of financial condition. These assets are excluded from the asset quality presentation, given the loss share indemnification from the FDIC.

Debt and Capital Management

During fourth quarter 2009 the Company retired for cash $20 million of 5.95% subordinated debt, generating a pre-tax gain of $1.3 million, leaving a balance of $50.5 million at December 31, 2009.

Regulatory and tangible common equity ratios were improved in comparison to December 31, 2008. As reflected in the following table, all regulatory mandated ratios for characterization as "well-capitalized" were significantly exceeded as of December 31, 2009.

                                                                Excess
                                                   Minimum   Over Required
                                December December   "Well-    Minimums at
                                   31,      31,  Capitalized" December 31,
                                  2009     2008     Level        2009
                                 -------  -------  -------  --------------
                                                              (Amounts in
                                                                millions)
Regulatory capital ratios:
Total capital to risk-weighted
 assets                            14.26%   14.36%   10.00%     43% $  267
Tier 1 capital to risk-weighted
 assets                            12.19%   11.60%    6.00%    103% $  388
Tier 1 leverage to average
 assets                            10.18%    9.41%    5.00%    104% $  389

Regulatory capital ratios,
 excluding preferred stock:
  Total capital to risk-weighted
   assets                          11.18%   11.44%   10.00%     12% $   74
  Tier 1 capital to
   risk-weighted assets             9.11%    8.68%    6.00%     52% $  195
  Tier 1 leverage to average
   assets                           7.61%    7.04%    5.00%     52% $  196

Tier 1 common capital to
 risk-weighted assets               7.76%    6.79%     N/A     N/A     N/A
Tangible equity ratios:
  Tangible common equity to
   tangible assets                  6.29%    5.23%     N/A     N/A     N/A
  Tangible common equity,
   excluding other
   comprehensive loss, to
   tangible assets                  6.54%    5.45%     N/A     N/A     N/A
  Tangible common equity to
   risk-weighted assets             7.46%    6.53%     N/A     N/A     N/A


The Board of Directors reviews the Company's capital plan each quarter, giving consideration to the current and expected operating environment, as well as an evaluation of various capital alternatives.

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 approximately 100 offices located in 62 communities, primarily in metropolitan Chicago.

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, 2008 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 Tuesday, January 12, 2010 at 6:00 PM (ET). Members of the public who would like to listen to the conference call should dial (866) 713-8310 (U.S. domestic) or (617) 597-5308 (international) and enter passcode number 538 37 175. The number should be dialed 10 to 15 minutes prior to the start of the conference call. There is no charge to access the 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. For those unable to listen to the live broadcast, a replay will be available on the Company's website or by dialing (888) 286-8010 (U.S. domestic) or (617) 801-6888 (international) passcode number 562 40 343, beginning at 9:00 PM (ET) on January 12, 2010 until 11:59 PM (ET) on January 20, 2010. 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, and Capital Ratios (1
    page)
--  Condensed Consolidated Statements of Condition (1 page)
--  Condensed Consolidated Statements of Income (1 page)
--  Pre-Tax, Pre-Provision Core Operating Earnings (1 page)
--  Loan Portfolio Composition (1 page)
--  Asset Quality (1 page)
--  Charge-off Data (1 page)
--  Securities Available-for-Sale (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 www.firstmidwest.com.



First Midwest Bancorp, Inc.            Press Release Dated January 12, 2010


Operating Highlights
Unaudited

                           Quarters Ended                 Years Ended
                     -------------------------------  --------------------
(Dollar amounts in
 thousands except    December   September  December   December   December
 per share data)     31, 2009   30, 2009   31, 2008   31, 2009   31, 2008
                     ---------  ---------  ---------  ---------  ---------
Net (loss) income    $ (37,491) $   3,351  $ (26,890) $ (25,750) $  49,336
Net (loss) income
 applicable to
 common shares         (39,542)       773    (27,568)   (35,551)    48,482
Diluted (loss)
 earnings per common
 share               $   (0.73) $    0.02  $   (0.57) $   (0.71) $   1.00
Return on average
 common equity         (19.84%)     0.43%    (13.90%)    (4.84%)     6.46%
Return on average
 assets                 (1.92%)     0.17%     (1.28%)    (0.32%)     0.60%
Net interest margin      4.04%      3.66%      3.71%      3.72%      3.61%
Efficiency ratio        58.48%     59.13%     59.06%     57.86%     53.49%


Balance Sheet Highlights
Unaudited
                                  As Of
                     --------------------------------
(Dollar amounts in
 thousands except     December   September  December
 per share data)      31, 2009   30, 2009   31, 2008
                     ---------- ---------- ----------
Total assets         $7,710,672 $7,678,434 $8,528,341
Total loans,
 excluding covered
 loans                5,203,246  5,306,068  5,360,063
Total deposits        5,885,279  5,749,153  5,585,754
Total stockholders'
 equity                 941,521    983,579    908,279
Common stockholders'
 equity                 748,521    790,579    715,949
Book value per share $    13.66 $    14.43 $    14.72
Period end shares
 outstanding             54,793     54,800     48,630


Capital Ratios
Unaudited                       As Of
                     --------------------------------
                      December   September  December
                      31, 2009   30, 2009   31, 2008
                     ---------- ---------- ----------
Regulatory capital
 ratios:
  Total capital to
   risk-weighted
   assets                14.26%     15.27%     14.36%
  Tier 1 capital to
   risk-weighted
   assets                12.19%     12.88%     11.60%
  Tier 1 leverage
   to average
   assets                10.18%     10.52%      9.41%

Regulatory capital
 ratios, excluding
 preferred stock:
  Total capital to
   risk-weighted
   assets                11.18%     12.18%     11.44%
  Tier 1 capital to
   risk-weighted
   assets                 9.11%      9.78%      8.68%
  Tier 1 leverage
   to average
   assets                 7.61%      7.99%      7.04%

Tier 1 common capital to
 risk-weighted
 assets                   7.76%      8.43%      6.79%

Tangible common
 equity ratios:
  Tangible common equity
   to tangible assets     6.29%      6.88%      5.23%
  Tangible common
   equity, excluding
   other comprehensive
   loss, to tangible
   assets                 6.54%      7.10%      5.45%
  Tangible common
   equity to
   risk-weighted
   assets                 7.46%      8.16%      6.53%




First Midwest Bancorp, Inc.           Press Release Dated January 12, 2010


Condensed Consolidated Statements of Condition
Unaudited
                                                       December 31,
(Amounts in thousands)                            ------------------------
                                                      2009         2008
                                                  -----------  -----------
 Assets
 Cash and due from banks                          $   101,177  $   106,082
 Funds sold and other short-term investments           26,202        8,226
 Trading account securities                            14,236       12,358
 Securities available-for-sale                      1,266,760    2,216,186
 Securities held-to-maturity, at amortized cost        84,182       84,306
 Federal Home Loan Bank and Federal Reserve Bank
  stock, at cost                                       56,428       54,767
 Loans                                              5,203,246    5,360,063
 Reserve for loan losses                             (144,808)     (93,869)
                                                  -----------  -----------
     Net loans                                      5,058,438    5,266,194
                                                  -----------  -----------
 Other real estate owned                               57,137       24,368
 Covered assets                                       223,245            -
 Premises, furniture, and equipment                   120,642      120,035
 Investment in bank owned life insurance              197,962      198,533
 Goodwill and other intangible assets                 281,479      284,548
 Accrued interest receivable and other assets         222,784      152,738
                                                  -----------  -----------
     Total assets                                 $ 7,710,672  $ 8,528,341
                                                  ===========  ===========
 Liabilities and Stockholders' Equity
 Deposits
  Transactional deposits                          $ 3,885,885  $ 3,457,954
  Time deposits                                     1,988,486    1,950,362
  Brokered deposits                                    10,908      177,438
                                                  -----------  -----------
      Total deposits                                5,885,279    5,585,754
 Borrowed funds                                       691,176    1,698,334
 Subordinated debt                                    137,735      232,409
 Accrued interest payable and other liabilities        54,961      103,565
                                                  -----------  -----------
     Total liabilities                              6,769,151    7,620,062
                                                  -----------  -----------
 Preferred stock                                      190,233      189,617
 Common stock                                             670          613
 Additional paid-in capital                           252,322      210,698
 Retained earnings                                    810,626      837,390
 Accumulated other comprehensive (loss)               (18,666)     (18,042)
 Treasury stock, at cost                             (293,664)    (311,997)
                                                  -----------  -----------
     Total stockholders' equity                       941,521      908,279
                                                  -----------  -----------
     Total liabilities and stockholders' equity   $ 7,710,672  $ 8,528,341
                                                  ===========  ===========




First Midwest Bancorp, Inc.           Press Release Dated January 12, 2010

Condensed Consolidated
 Statements of Income
Unaudited                          Quarters Ended         Years Ended
                                --------------------  --------------------
(Amounts in thousands, except   December   December   December   December
 per share data)                31, 2009   31, 2008   31, 2009   31, 2008
                                ---------  ---------  ---------  ---------
Interest Income
 Loans                          $  65,668  $  71,849  $ 261,221  $ 302,931
 Securities                        14,848     25,583     77,486    104,448
 Covered assets                     1,419          -      1,419          -
 Other                                435        501      1,625      1,828
                                ---------  ---------  ---------  ---------
     Total interest income         82,370     97,933    341,751    409,207
                                ---------  ---------  ---------  ---------
Interest Expense
 Deposits                          12,774     22,802     64,177    110,622
 Borrowed funds                     1,276      6,416     12,569     37,192
 Subordinated debt                  2,379      3,702     13,473     14,796
                                ---------  ---------  ---------  ---------
     Total interest expense        16,429     32,920     90,219    162,610
                                ---------  ---------  ---------  ---------
     Net interest income           65,941     65,013    251,532    246,597
 Provision for loan losses         93,000     42,385    215,672     70,254
                                ---------  ---------  ---------  ---------
     Net interest income (loss)
      after provision for loan
      losses                      (27,059)    22,628     35,860    176,343
                                ---------  ---------  ---------  ---------
 Noninterest Income
 Service charges on deposit
  accounts                          9,977     11,206     38,754     44,987
 Trust and investment
  management fees                   3,704      3,420     14,059     15,130
 Other service charges,
  commissions, and fees             4,280      4,554     16,529     18,846
 Card-based fees                    4,000      3,868     15,826     16,143
                                ---------  ---------  ---------  ---------
     Subtotal, fee-based
      revenues                     21,961     23,048     85,168     95,106
 Bank owned life insurance
  income                              281     (8,858)     2,263     (2,369)
 Securities gains (losses) net     (5,772)   (34,215)     2,110    (35,611)
 Gains on FDIC-assisted
  transaction                      13,071          -     13,071          -
 Gains on early extinguishment
  of debt                           1,267          -     15,258          -
 Other                                939     (2,104)     5,132     (3,119)
                                ---------  ---------  ---------  ---------
  Total noninterest income
   (loss)                          31,747    (22,129)   123,002     54,007
                                ---------  ---------  ---------  ---------
Noninterest Expense
Salaries and employee benefits     27,592     20,356    106,548     99,910
Federal Deposit Insurance
 Corporation ("FDIC") insurance     2,720        301     13,673      1,065
Net occupancy expense               5,453      5,967     22,762     23,378
Losses realized on other real
 estate owned                      14,051        576     18,554      1,566
Other real estate owned
 expense, net                       1,642        713      4,905      1,843
Loan remediation expense            2,013        369      4,685        888
Equipment expense                   2,208      2,454      8,962      9,956
Technology and related costs        2,375      1,848      8,987      7,429
Other                              12,467     13,997     45,712     48,270
                                ---------  ---------  ---------  ---------
  Total noninterest expense        70,521     46,581    234,788    194,305
                                ---------  ---------  ---------  ---------
(Loss) income before taxes        (65,833)   (46,082)   (75,926)    36,045
Income tax (benefit) expense      (28,342)   (19,192)   (50,176)   (13,291)
                                ---------  ---------  ---------  ---------
  Net (loss) income               (37,491)   (26,890)   (25,750)    49,336
Preferred dividends                (2,569)      (712)   (10,265)      (712)
Net loss (income) applicable to
 non-vested restricted shares         518         34        464       (142)
                                ---------  ---------  ---------  ---------
  Net (Loss) Income Applicable
   to Common Shares             $ (39,542) $ (27,568) $ (35,551)    48,482
                                =========  =========  =========  =========
    Diluted (Loss) Earnings Per
     Common Share               $   (0.73) $   (0.57) $   (0.71)      1.00
    Dividends Declared Per
     Common Share               $    0.01  $    0.23  $    0.04      1.155
    Weighted Average Diluted
     Shares Outstanding            54,152     48,508     50,034     48,516






First Midwest Bancorp, Inc.           Press Release Dated January 12, 2010

Pre-Tax, Pre-Provision Core Operating Earnings (1)

Unaudited                 Quarters Ended                  Years Ended
                ----------------------------------  ----------------------
(Dollar amounts  December   September    December    December    December
 in thousands)   31, 2009    30, 2009    31, 2008    31, 2009    31, 2008
                ----------  ----------  ----------  ----------  ----------
(Loss) income
 before taxes   $  (65,833) $   (2,569) $  (46,082) $  (75,926) $   36,045
Provision for
 loan losses        93,000      38,000      42,385     215,672      70,254
                ----------  ----------  ----------  ----------  ----------
  Pre-tax,
   pre-provision
   earnings
   (loss)           27,167      35,431      (3,697)    139,746     106,299
                ----------  ----------  ----------  ----------  ----------
Non-Operating
 Items
Securities
 gains
 (losses), net      (5,772)     (6,975)    (34,215)      2,110     (35,611)
Gains on
 FDIC-assisted
 transaction        13,071           -           -      13,071           -
Gains on early
 extinguishment
 of debt             1,267      13,991           -      15,258           -
Write-down of
 bank owned
 life
 insurance
 included in
 non-interest
 income                  -           -     (10,360)          -     (10,360)
Losses realized
 on other real
 estate owned      (14,051)     (1,801)       (576)    (18,554)     (1,566)
FDIC special
 deposit
 insurance
 assessment              -           -           -      (3,500)          -
                ----------  ----------  ----------  ----------  ----------
  Total non-
   operating
   items            (5,485)      5,215     (45,151)      8,385     (47,537)
                ----------  ----------  ----------  ----------  ----------
Pre-tax,
 pre-provision
 core operating
 earnings       $   32,652  $   30,216  $   41,454  $  131,361  $  153,836
                ==========  ==========  ==========  ==========  ==========
Risk-weighted
 assets         $6,262,883  $6,234,283  $6,609,359  $6,262,883  $6,609,359
Pre-tax,
 pre-provision
 core
 operating
 earnings to
 risk-weighted
 assets               2.07%       1.92%       2.50%       2.10%       2.33%


(1) The Company's accounting and reporting policies conform to U.S.
    generally accepted accounting principles ("GAAP") and general practice
    within the banking industry. As a supplement to GAAP, the Company has
    provided this non-GAAP performance result. The Company believes that
    this non-GAAP financial measure is useful because it allows investors
    to assess the Company's operating performance. Although this non-GAAP
    financial measure is intended to enhance investors' understanding of
    the Company's business and performance, this non-GAAP financial measure
    should not be considered an alternative to GAAP.



First Midwest Bancorp, Inc.       Press Release Dated January 12, 2010

                                                       Percent Change
Unaudited                    As Of                          From
           ------------------------------------------ ----------------
(Dollar
 amounts
 in                    % of
 thousands)  12/31/09  Total    9/30/09    12/31/08   9/30/09 12/31/08
           ----------- -----  ----------- ----------- ------- --------
Loan
 Portfolio
 Composition
Commercial
 and
 industri-
 al        $ 1,438,063  27.6% $ 1,484,601 $ 1,490,101    (3.1%)   (3.5%)
Agricultur-
 al and
 farmland      209,945   4.0%     200,955     216,814     4.5%    (3.2%)
Commercial
 real
 estate:
 Office,
  retail,
  and
  industri-
  al         1,212,965  23.3%   1,151,276   1,025,241     5.4%    18.3%
 Residential
  construction
  and land     313,919   6.0%     400,502     509,059   (21.6%)  (38.3%)
 Commercial
  construc-
  tion and
  land         231,518   4.5%     301,462     356,575   (23.2%)  (35.1%)
 Multifamily   333,961   6.4%     342,807     286,963    (2.6%)   16.4%
 Investor-
  owned
  rental
  property     119,132   2.3%     117,276     131,635     1.6%    (9.5%)
 Other
  commercial
  real
  estate       679,851  13.1%     636,153     597,694     6.9%    13.7%
           ----------- -----  ----------- ----------- -------  -------
  Total
   commercial
   real
   estate    2,891,346  55.6%   2,949,476   2,907,167    (2.0%)   (0.5%)
           ----------- -----  ----------- ----------- -------  -------
Consumer:
 Home
  equity       470,523   9.1%     478,204     477,105    (1.6%)   (1.4%)
 Real
  estate
  1-4 family   139,983   2.7%     138,862     198,197     0.8%   (29.4%)
 Other
  consumer      53,386   1.0%      53,970      70,679    (1.1%)  (24.5%)
           ----------- -----  ----------- ----------- -------  -------
  Total
   consumer    663,862  12.8%     671,036     745,981    (1.1%)  (11.0%)
           ----------- -----  ----------- ----------- -------  -------
 Total
  loans    $ 5,203,246 100.0% $ 5,306,068 $ 5,360,063    (1.9%)   (2.9%)
           =========== =====  =========== =========== =======  =======


Office,
 Retail and
 Industrial
Office     $   394,228  32.5% $   376,897 $   339,912     4.6%    16.0%
Retail         331,803  27.4%     314,586     265,568     5.5%    24.9%
Industrial     486,934  40.1%     459,793     419,761     5.9%    16.0%
           ----------- -----  ----------- ----------- -------  -------
 Total
  office,
  retail,
  and
  industri-
  al       $ 1,212,965 100.0% $ 1,151,276 $ 1,025,241     5.4%    18.3%
           =========== =====  =========== =========== =======  =======



First Midwest Bancorp, Inc.          Press Release Dated January 12, 2010

Asset Quality                                As Of
                     ----------------------------------------------------
Unaudited                          % of
(Dollar amounts in                 Loan       %
 thousands)          12/31/09    Category   of Total   9/30/09   12/31/08
                     ---------  ---------  ---------  ---------  ---------
Non-accrual loans:
 Commercial and
  industrial         $  28,193       1.96%      11.5% $  45,134  $  15,586
 Agricultural and
  farmland               2,673       1.27%       1.1%     2,384         12
 Office, retail, and
  industrial            21,396       1.76%       8.8%    15,738      2,533
 Residential
  construction and
  land                 112,798      35.93%      46.2%   138,593     97,060
 Commercial
  construction and
  land                  20,864       9.01%       8.5%     2,908      2,080
 Multi-family           12,486       3.74%       5.1%    15,910      1,387
 Investor-owned
  rental property        4,351       3.65%       1.8%     4,069        270
 Other commercial
  real estate           28,006       4.12%      11.5%    18,841      4,564
 Consumer               13,448       2.03%       5.5%    13,228      4,276
                     ---------  =========  ---------  ---------  ---------
  Total non-accrual
   loans               244,215       4.69%     100.0%   256,805    127,768
                     ---------  =========  =========  ---------  ---------
90 days past due
 loans (still
 accruing interest):
 Commercial and
  industrial             1,964       0.14%      48.2%     3,216      6,818
 Agricultural and
  farmland                   -          -          -          -      1,751
 Office, retail, and
  industrial               330       0.03%       8.1%     1,036      3,214
 Residential
  construction and
  land                      86       0.03%       2.1%        66      8,489
 Commercial
  construction and
  land                       -          -          -          -      2,092
 Multi-family               55       0.02%       1.3%       238      1,881
 Investor-owned
  rental property          225       0.19%       5.5%         -          -
 Other commercial
  real estate              130       0.02%       3.2%       338      4,494
 Consumer                1,289       0.19%      31.6%     1,066      8,260
                     ---------  =========  ---------  ---------  ---------
  Total 90 days past
   due loans             4,079       0.08%     100.0%     5,960     36,999
                     ---------  =========  =========  ---------  ---------
  Total non-performing
   loans             $ 248,294                        $ 262,765  $ 164,767
                     =========                        =========  =========

Restructured loans,
 still accruing      $  30,553                        $  26,718  $   7,344
Other real estate
 owned               $  57,137                        $  57,945  $  24,368
30-89 days past due
 loans               $  37,912       0.73%         -  $  44,346  $ 116,206
Reserve for loan
 losses              $ 144,808          -          -  $ 134,269  $  93,869


Asset Quality Ratios
Non-accrual loans to
 loans                    4.69%         -          -       4.84%      2.38%
Non-accrual plus 90
 days past due loans
 to loans                 4.77%         -          -       4.95%      3.07%
Reserve for loan
 losses to loans          2.78%         -          -       2.53%      1.75%
Reserve for loan
 losses to
 non-accrual loans          59%         -          -         52%        73%
Reserve for loan
 losses to
 non-accrual plus
 90 days past due
 loans to loans             58%         -          -         51%        57%




First Midwest Bancorp, Inc.           Press Release Dated January 12, 2010

Charge-off Data                            Quarters Ended
                          ------------------------------------------------
Unaudited                              %
(Dollar amounts in                  of Loan     % of
 thousands)               12/31/09  Category    Total    9/30/09  12/31/08
                          -------- ---------  --------  -------- ---------
Net loans charged-off:
  Commercial and
   industrial             $ 23,320      1.62%     28.3% $ 12,585  $  5,601
  Agricultural and
   farmland                    180      0.09%      0.2%        -         -
  Office, retail, and
   industrial                3,265      0.27%      4.0%    3,496       699
  Residential construction
   and land                 38,315     12.21%     46.5%    5,181     9,227
  Commercial construction
   and land                  2,715      1.17%      3.3%     (228)        -
  Multifamily                2,325      0.70%      2.8%       29       164
  Investor-owned rental
   property                  1,229      1.03%      1.5%      622       161
  Other commercial real
   estate                    7,907      1.16%      9.5%    6,006       236
  Consumer                   3,205      0.48%      3.9%    3,568     2,239
                          -------- =========  --------  -------- ---------
    Total net loans
     charged-off          $ 82,461      1.58%    100.0% $ 31,259  $ 18,327
                          ======== =========  ========  ======== =========
Net loan charge-offs to
 average loans,
 annualized:
  Quarter-to-date            6.17%        -         -      2.32%     1.38%
  Year-to-date               3.08%        -         -      2.05%     0.74%




First Midwest Bancorp, Inc.           Press Release Dated January 12, 2010

Securities Available-For-Sale
Unaudited
           U.S.  Collater-                    Collater-
        Treasury  alized    Other    State     alized
          and   Mortgage  Mortgage   and       Debt
        Agency Obligations Backed  Municipal Obligations Other    Total
         ------ --------  --------  --------  -------   ------  ---------
As of
 December
 31, 2009
Amortized
 cost    $  756 $299,920  $239,567  $649,269  $54,359  $44,238  $1,288,109
Gross
 unreal-
 ized gains
 (losses):
 Gross
  unreal-
  ized
  gains       -   10,060     9,897     8,462        -    2,376      30,795
 Gross
  unreal-
  ized
  losses      -   (2,059)     (182)   (6,051) (42,631)  (1,221)    (52,144)
         ------ --------  --------  --------  -------  -------  ----------
  Net
   unrealized
   gains
   (losses)   -    8,001     9,715     2,411  (42,631)   1,155     (21,349)
         ------ --------  --------  --------  -------  -------  ----------
Fair
 value   $  756 $307,921  $249,282  $651,680  $11,728  $45,393  $1,266,760
         ====== ========  ========  ========  =======  =======  ==========

As of
 September
 30,
 2009
Amortized
 cost    $  757 $322,780  $233,396  $680,216  $60,290  $50,929  $1,348,368
Gross
 unreal-
 ized
 gains
 (losses):
 Gross
  unreal-
  ized
  gains       -   10,651    10,782    29,176        -      578      51,187
 Gross
  unreal-
  ized
  losses      -   (2,224)       (3)   (1,078) (44,747)  (1,834)    (49,886)
         ------ --------  --------  --------  -------  -------  ----------
  Net
   unreal-
   ized
   gains
   (losses)   -    8,427    10,779    28,098  (44,747)  (1,256)      1,301
         ------ --------  --------  --------  -------  -------  ----------
Fair
 value   $  757 $331,207  $244,175  $708,314  $15,543  $49,673  $1,349,669
         ====== ========  ========  ========  =======  =======  ==========

As of
 December
 31, 2008
Amortized
 cost    $1,039 $694,285  $504,918  $907,036  $78,883  $51,820  $2,237,981
Gross
 unreal-
  ized
  gains
  (losses):
 Gross
  unreal-
  ized
  gains       2    7,668    13,421    12,606        -      213      33,910
 Gross
  unreal-
  ized
  losses      -   (3,114)      (74)  (12,895) (36,797)  (2,825)    (55,705)
         ------ --------  --------  --------  -------  -------  ----------
  Net
   unreal-
   ized
   gains
   (losses)   2    4,554    13,347      (289) (36,797)  (2,612)    (21,795)
         ------ --------  --------  --------  -------  -------  ----------
Fair
 value   $1,041 $698,839  $518,265  $906,747  $42,086  $49,208  $2,216,186
         ====== ========  ========  ========  =======  =======  ==========

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