SOURCE: First Midwest Bancorp, Inc.

First Midwest Bancorp, Inc.

January 26, 2011 06:55 ET

First Midwest Bancorp, Inc. Announces 2010 Fourth Quarter and Full Year Results

Solid Core Operating Performance -- Proactively Addressing Credit, Lower Delinquency Levels -- Strong Capital and Liquidity

ITASCA, IL--(Marketwire - January 26, 2011) - First Midwest Bancorp, Inc. (NASDAQ: FMBI)

Operating Performance

--  Net loss before preferred dividends and accretion on preferred stock of
    $28.2 million and $9.7 million for fourth quarter and full year 2010
    compared to net loss of $37.5 million and $25.8 million for fourth
    quarter and full year 2009, respectively.

--  Pre-tax, pre-provision core operating earnings of $35.0 million for
    fourth quarter 2010 and $136.4 million for full year 2010, up 7.2% and
    3.8% from fourth quarter and full year 2009, respectively.

--  Average core transactional deposits up $696.8 million, or 17.9%, from
    fourth quarter 2009.

Capital and Credit

--  Tangible common equity to tangible assets of 7.99% up from 6.29% at
    December 31, 2009.

--  Non-performing assets, excluding covered assets, of $269.5 million,
    down 20.0% from December 31, 2009.

--  Allowance for credit losses of $145.1 million represented 2.84% of
    loans, excluding covered loans, compared to 2.78% at December 31, 2009.

--  Total charge-offs on loans and losses on other real estate owned of
    $89.3 million, including $47.7 million attributed to shift in
    disposition strategy for select construction and development problem
    assets.

--  Loans 30-89 days past due, excluding covered loans, of $23.6 million,
    down 38% from December 31, 2009 and the lowest level in more than
    seven years

Today First Midwest Bancorp, Inc. (the "Company" or "First Midwest") (NASDAQ: FMBI), the holding company of First Midwest Bank, reported results of operations and financial condition for fourth quarter and full year 2010. Net loss for the quarter was $28.2 million, before adjustments for preferred dividends and non-vested restricted shares, with a net loss of $30.3 million, or $0.41 per share, available to common shareholders after such adjustments. This compares to net income available to common shareholders of $11 thousand, or $0.00 per share, for third quarter 2010 and a loss of $39.5 million, or $0.73 loss per share, for fourth quarter 2009.

For full year 2010, the Company had a net loss of $9.7 million, before adjustments for preferred dividends and non-vested restricted shares, with a net loss of $19.7 million, or $0.27 per share, available to common shareholders after these adjustments. The current year loss was lower than the full year 2009 net loss available to common shareholders of $35.6 million, or $0.71 loss per share.

Summary Update

"Performance both for the quarter and the year evidenced solid improvement in our core operating business offset by elevated credit costs," said Michael L. Scudder, President and Chief Executive Officer of First Midwest Bancorp, Inc. "In comparison to last year, pre-tax, pre-provision core operating earnings for the quarter were up 7.2% as we benefited from our consistent focus on relationship-based sales and strategic acquisition activity."

Mr. Scudder further commented, "We have made notable improvement in non-performing asset and delinquency levels since 2009. However, our credit costs have remained high, largely due to the impact of the lagging market recovery on land and construction related loans and other real estate owned. Year-end assessment of market realities for these asset categories warranted a shift in our planned liquidation strategies and valuations to more aggressively pursue disposition, significantly increasing our fourth quarter credit costs. While painful, these actions should better position the Company to remediate problem assets sooner, lower future remediation costs, and expand and stabilize earnings." (Refer to the supplemental schedules available on the Company's website.)

Mr. Scudder concluded, "While signs of economic recovery and stability are emerging, the operating environment remains difficult as we enter 2011. Importantly, while short-term challenges still lay ahead, the strength of our core business, capital foundation, and liquidity position represent a significant competitive advantage as the economy rebounds. These strengths, when combined with the commitment and focus of our 1,800 employees, leave us well positioned to improve our credit and earnings performance, continue the prudent management of capital, and pursue opportunities to invest in our business, all for the benefit of our shareholders."

Operating Performance

The Company generated pre-tax, pre-provision core operating earnings of $35.0 million for fourth quarter 2010, consistent with third quarter 2010 and up from $32.7 million for fourth quarter 2009. The improvement compared to the prior year resulted from higher net interest income, which more than offset higher non-interest expense, excluding losses recognized on other real estate owned ("OREO"). A reconciliation of earnings in accordance with U.S. generally accepted accounting principles ("GAAP") to the non-GAAP financial measures of pre-tax, pre-provision core operating earnings is presented on page 11 of this earnings release.

Average earning assets were $7.4 billion for fourth quarter 2010, an increase of $166.5 million, or 2.3%, from third quarter 2010 and $520.1 million, or 7.5%, from fourth quarter 2009. The increases from both prior periods were due primarily to increases in covered assets acquired in Federal Deposit Insurance Corporation ("FDIC")-assisted transactions and short-term investments. These increases were partially offset by reductions in loans resulting from net charge-offs of $73.8 million and $147.1 million for fourth quarter and full year 2010, respectively. The Company continues to maintain an elevated level of short-term investments as it manages its liquidity within the current low-yield environment.

Average sources of funding were $7.1 billion for fourth quarter 2010, an increase of $105.7 million, or 1.5%, from third quarter 2010 and $370.5 million, or 5.5%, from fourth quarter 2009. The growth from third quarter resulted from a 2.6% increase in average core transactional deposits, led by an 8.5% increase in demand deposits. Compared to fourth quarter 2009, 20% increases in average demand and money market balances, which were offset by a decline in more expensive short-term borrowings, drove the 5.5% increase. The increase in core transactional deposits reflects industry trends as well as the impact of deposits acquired through FDIC-assisted transactions.

The growth in earning assets from both prior periods generated $1.4 million and $5.6 million of higher net interest income than third quarter 2010 and fourth quarter 2009, respectively.

Fee-based revenues of $22.4 million for fourth quarter 2010 were relatively unchanged compared to third quarter 2010, with the growth in trust and investment advisory fees and card-based fees offsetting declines in service charges on deposits, other service charges, commissions, and fees.

Fee-based revenues increased 1.9% compared to fourth quarter 2009 with the 7.8% decline in service charges on deposits more than offset by increases of 16.0% in card-based fees, 9.1% in trust and investment advisory fees, and 5.3% in other service charges, commissions, and fees (primarily merchant fee income).

Total noninterest income declined 14.9% from third quarter 2010 and 17.6% from fourth quarter 2009 due primarily to lower net securities gains and a $13.1 million gain on an FDIC-assisted transaction in fourth quarter 2009.

Total noninterest expense for fourth quarter 2010 increased $8.3 million from third quarter 2010 primarily as a result of a $7.1 million increase in losses recognized on OREO (discussed below). The majority of the $1.1 million increase in salaries and employee benefits represents the full quarter expense of additional staff hired through the acquisition of Palos Bank and Trust ("Palos") in third quarter 2010.

Other professional fees fell $1.2 million from third quarter 2010, primarily reflecting third quarter's higher acquisition and integration expenses. The majority of the $893 thousand increase in other non-interest expense from third quarter 2010 reflected higher technology and network costs, which included a one-time conversion fee related to Palos in fourth quarter 2010, as well as additional costs for servicing larger volumes of transactions relating to the branches added through our FDIC-assisted acquisitions and higher monthly fees for improved network access.

The $1.1 million increase in OREO expenses, net from third quarter 2010 was due to higher costs and commissions related to disposition of properties and seasonal maintenance.

Total noninterest expense rose by $6.6 million, or 9.3%, in fourth quarter 2010 compared to fourth quarter 2009 and $44.0 million, or 18.7%, for full year 2010 compared to full year 2009. The Company recorded integration expenses associated with its FDIC-assisted acquisitions of $576 thousand for fourth quarter 2010 and $3.3 million for full year 2010.

The fourth quarter 2010 increase from fourth quarter 2009 was due to $3.4 million in higher salaries and benefits primarily attributed to the increase in salaries and benefits from fourth quarter 2009 resulting from the addition of retail and commercial sales employees from the Company's three FDIC-assisted acquisitions and $1.4 million of higher losses and write-downs on OREO.

Asset Quality

Non-performing assets, excluding covered assets, were $269.5 million at December 31, 2010, decreasing $14.1 million, or 5.0%, from September 30, 2010 and $66.5 million, or 20.0%, from December 31, 2009. The reductions were substantially due to charge-offs taken in fourth quarter and full year 2010 offset by loans downgraded to non-accrual status. Non-performing assets, excluding covered assets, represented 5.25% of total loans plus OREO at December 31, 2010 compared to 5.44% at September 30, 2010 and 6.39% at December 31, 2009. Loans 30-89 days delinquent, excluding covered assets, stood at $23.6 million, down $17.9 million, or 43.1% from the September 30, 2010 level.

The allowance for credit losses represented 2.84% of total loans, excluding covered loans, at December 31, 2010 compared to 2.81% at September 30, 2010 and 2.78% at December 31, 2009. The allowance for credit losses as a percentage of non-performing loans, excluding covered loans, was 67% at December 31, 2010 compared to 66% at September 30, 2010 and 58% at December 31, 2009.

Net charge-offs, excluding covered loans, for fourth quarter 2010 were $72.9 million compared to $34.0 million for third quarter 2010 and $82.5 million for fourth quarter 2009. The Company sold $19.8 million of OREO (including $4.7 million of covered OREO) at a loss of $3.5 million during the quarter and recorded OREO write-downs of $11.9 million in noninterest expense. Following year-end assessment of market conditions for construction and development related asset classes, management shifted its strategy to more aggressively pursue disposition of selected problem assets within these classes and adjusted values accordingly. Included in total charge-offs and losses on OREO of $89.3 million for fourth quarter 2010 was an additional $47.7 million attributable to further reductions of carrying value of these selected non-performing assets. The supplemental schedules available on the Company's website provide a summary of the earnings impact of these actions, as well as additional detail regarding the charge-offs and OREO write-downs by asset class.

Securities Portfolio

Approximately 95% of the Company's $1.1 billion available-for-sale portfolio is comprised of municipals, collateralized mortgage obligations ("CMOs"), and other mortgage-backed securities. The remainder consists of trust-preferred collateralized debt obligation pools ("CDOs") with a fair value of $14.9 million and an aggregate unrealized loss of $34.8 million, and miscellaneous other securities totaling $35.0 million. Net securities gains were $1.7 million for fourth quarter 2010 and were net of other-than-temporary impairment charges of $56 thousand on an equity security. Net unrealized losses at December 31, 2010 were $32.5 million, up from $5.8 million at September 30, 2010 and $21.3 million at December 31, 2009 and reflect the impact of the higher interest rate environment on the Company's portfolio.

Capital Management

As reflected in the table on page 8, all regulatory mandated ratios for characterization as "well-capitalized" were exceeded as of December 31, 2010. 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 98 offices located in 65 communities, primarily in metropolitan Chicago. First Midwest was recently recognized by the Chicago Tribune as one of the top 20 best places to work in Chicago among large employers.

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, 2009 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 26, 2011 at 10:00 A.M. (ET). Members of the public who would like to listen to the conference call should dial (877) 317-6789 (U.S. domestic) or (412) 317-6789 (international) and ask for the First Midwest Bancorp, Inc. Earnings Conference Call. 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/investorrelations. For those unable to listen to the live broadcast, a replay will be available on the Company's website or by dialing (877) 344-7529 (U.S. domestic) or (412) 317-0088 (international) conference I.D. 447286 beginning one hour after completion of the live call until 8:00 A.M. (ET) on February 2, 2011. 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
--  Condensed Consolidated Statements of Financial Condition
--  Condensed Consolidated Statements of Income
--  Pre-Tax, Pre-Provision Core Operating Earnings
--  Loan Portfolio Composition
--  Asset Quality and Asset Quality Ratios, Excluding Covered Assets
--  Covered Assets
--  Non-performing Assets and Past Due Loans
--  Charge-off Data
--  Securities Available-For-Sale

Press Release and Additional Information Available on Website

This press release, the accompanying financial statements and tables, and certain additional unaudited Selected Financial Information are available through the "Investor Relations" section of First Midwest's website at www.firstmidwest.com.



First Midwest Bancorp, Inc.            Press Release Dated January 26, 2011

Operating Highlights
Unaudited
                            Quarters Ended               Years Ended
(Dollar amounts in  -------------------------------  --------------------
thousands except    December   September  December   December   December
per share data)     31, 2010   30, 2010   31, 2009   31, 2010   31, 2009
                    ---------  ---------  ---------  ---------  ---------
Net (loss) income   $ (28,159) $   2,585  $ (37,491) $  (9,684) $ (25,750)
Net (loss) income
 applicable to
 common shares        (30,327)        11    (39,542)   (19,717)   (35,551)
Diluted (loss)
 earnings per
 common share       $   (0.41) $    0.00  $   (0.73) $   (0.27) $   (0.71)
Return on average
 common equity         (12.49%)     0.00%    (19.84%)    (2.06%)    (4.84%)
Return on average
 assets                 (1.34%)     0.13%     (1.92%)    (0.12%)    (0.32%)
Net interest margin      4.02%      4.05%      4.04%      4.13%      3.72%
Efficiency ratio        59.08%     59.91%     58.48%     58.84%     57.86%


Balance Sheet Highlights
Unaudited
                                                      As Of
                                        ----------------------------------
(Dollar amounts in thousands             December    September   December
per share data)                          31, 2010    30, 2010    31, 2009
                                        ----------  ----------  ----------
Total assets                            $8,146,973  $8,376,494  $7,710,672
Total loans, excluding covered loans     5,100,560   5,164,666   5,203,246
Covered assets (1)                         493,319     519,305     223,245
Total deposits                           6,511,476   6,677,259   5,885,279
Total stockholders' equity               1,112,045   1,160,059     941,521
Common stockholders' equity                919,045     967,059     748,521
Book value per common share             $    12.40  $    13.06  $    13.66
Period end common shares outstanding        74,096      74,057      54,793

(1) Covered assets were obtained through the FDIC-assisted transactions
    related to First DuPage Bank on October 23, 2009, Peotone Bank and
    Trust Company on April 23, 2010, and Palos Bank and Trust Company on
    August 13, 2010. Refer to table on page 14.


Capital Ratios
Unaudited
                                                      As Of
                                        ----------------------------------
                                         December    September   December
                                         31, 2010    30, 2010    31, 2009
                                        ----------  ----------  ----------
Regulatory capital ratios:
  Total capital to risk-weighted assets      16.18%      16.82%      13.94%
  Tier 1 capital to risk-weighted assets     14.12%      14.77%      11.88%
  Tier 1 leverage to average assets          11.10%      11.99%      10.18%

Regulatory capital ratios, excluding
 preferred stock:
  Total capital to risk-weighted assets      13.13%      13.81%      10.93%
  Tier 1 capital to risk-weighted assets     11.06%      11.76%       8.88%
  Tier 1 leverage to average assets           8.70%       9.55%       7.61%

Tier 1 common capital to risk-weighted
 assets                                       9.72%      10.44%       7.56%

Tangible common equity ratios:
  Tangible common equity to tangible
   assets                                     7.99%       8.34%       6.29%
  Tangible common equity, excluding
   accumulated other comprehensive loss,
   to tangible assets                         8.34%       8.46%       6.54%
  Tangible common equity to
   risk-weighted assets                       9.93%      10.51%       7.27%





First Midwest Bancorp, Inc.            Press Release Dated January 26, 2011

Condensed Consolidated Statements of Financial Condition
Unaudited
                                                        December 31,
                                                  ------------------------
(Amounts in thousands)                                2010         2009
                                                  -----------  -----------
Assets

Cash and due from banks                           $   102,495  $   101,177
Federal funds sold and other short-term
 investments                                          483,281       26,202
Trading account securities, at fair value              15,282       14,236
Securities available-for-sale, at fair value        1,057,802    1,266,760
Securities held-to-maturity, at amortized cost         81,320       84,182
Federal Home Loan Bank and Federal Reserve Bank
 stock, at cost                                        61,338       56,428
Loans, excluding covered loans                      5,100,560    5,203,246
Covered loans                                         374,640      146,319
Allowance for loan losses                            (142,572)    (144,808)
                                                  -----------  -----------

    Net loans                                       5,332,628    5,204,757
                                                  -----------  -----------
Other real estate owned ("OREO"), excluding
 covered OREO                                          31,069       57,137
Covered OREO                                           29,698        8,981
Federal Deposit Insurance Corporation ("FDIC")
 indemnification asset                                 88,981       67,945
Premises, furniture, and equipment                    140,907      120,642
Investment in bank owned life insurance               197,644      197,962
Goodwill and other intangible assets                  291,383      281,479
Accrued interest receivable and other assets          233,145      222,784
                                                  -----------  -----------

    Total assets                                  $ 8,146,973  $ 7,710,672
                                                  ===========  ===========

Liabilities and Stockholders' Equity

Deposits
  Transactional deposits                          $ 4,519,492  $ 3,885,885
  Time deposits                                     1,991,984    1,999,394
                                                  -----------  -----------
    Total deposits                                  6,511,476    5,885,279
Borrowed funds                                        303,974      691,176
Subordinated debt                                     137,744      137,735
Accrued interest payable and other liabilities         81,734       54,961
                                                  -----------  -----------

    Total liabilities                               7,034,928    6,769,151
                                                  -----------  -----------
Preferred stock                                       190,882      190,233
Common stock                                              858          670
Additional paid-in capital                            437,550      252,322
Retained earnings                                     787,678      810,626
Accumulated other comprehensive loss, net of tax      (27,739)     (18,666)
Treasury stock, at cost                              (277,184)    (293,664)
                                                  -----------  -----------

    Total stockholders' equity                      1,112,045      941,521
                                                  -----------  -----------

    Total liabilities and stockholders' equity    $ 8,146,973  $ 7,710,672
                                                  ===========  ===========





First Midwest Bancorp, Inc.            Press Release Dated January 26, 2011

Condensed Consolidated Statements of Income
Unaudited
                             Quarters Ended               Years Ended
(Amounts in          -------------------------------  --------------------
thousands, except    December   September  December   December   December
per share data)      31, 2010   30, 2010   31, 2009   31, 2010   31, 2009
                     ---------  ---------  ---------  ---------  ---------
Interest Income
Loans                $  63,983  $  65,416  $  65,668  $ 259,318  $ 261,221
Securities              10,230     11,920     14,848     49,801     77,486
Covered loans            7,431      4,294      1,419     17,285      1,419
Federal funds sold
 and other
 short-term
 investments               832        708        435      2,463      1,625
                     ---------  ---------  ---------  ---------  ---------
   Total interest
    income              82,476     82,338     82,370    328,867    341,751
                     ---------  ---------  ---------  ---------  ---------

Interest Expense
Deposits                 7,907      9,049     12,774     37,127     64,177
Borrowed funds             711        797      1,276      3,267     12,569
Subordinated debt        2,279      2,279      2,379      9,124     13,473
                     ---------  ---------  ---------  ---------  ---------
   Total interest
    expense             10,897     12,125     16,429     49,518     90,219
                     ---------  ---------  ---------  ---------  ---------
Net interest income     71,579     70,213     65,941    279,349    251,532
Provision for loan
 losses                 73,897     33,576     93,000    147,349    215,672
                     ---------  ---------  ---------  ---------  ---------
   Net interest
    income (loss)
    after provision
    for loan losses     (2,318)    36,637    (27,059)   132,000     35,860
                     ---------  ---------  ---------  ---------  ---------

Noninterest Income
Service charges on
 deposit accounts        9,202      9,249      9,977     35,884     38,754
Trust and investment
 advisory fees           4,040      3,728      3,704     15,063     14,059
Other service
 charges,
 commissions,
 and fees                4,506      4,932      4,280     18,238     16,529
Card-based fees          4,640      4,547      4,000     17,577     15,826
                     ---------  ---------  ---------  ---------  ---------
   Total fee-based
    revenues            22,388     22,456     21,961     86,762     85,168
Bank owned life
 insurance income          696        267        281      1,560      2,263
Securities gains
 (losses), net           1,662      6,376     (5,772)    12,216      2,110
Gains on
 FDIC-assisted
 transactions                -          -     13,071      4,303     13,071
Gains on early
 extinguishment
 of debt                     -          -      1,267          -     15,258
Other                    1,421      1,654        939      3,710      5,132
                     ---------  ---------  ---------  ---------  ---------
   Total noninterest
    income              26,167     30,753     31,747    108,551    123,002
                     ---------  ---------  ---------  ---------  ---------

Noninterest Expense
Salaries and
 employee benefits      31,028     29,926     27,592    114,378    106,548
Losses realized
 on OREO                15,412      8,265     14,051     40,480     18,554
OREO expense, net        2,408      1,312      1,642      9,554      4,905
FDIC insurance           2,967      2,835      2,720     10,880     13,673
Net occupancy and
 equipment expense       7,916      8,326      7,661     32,218     31,724
Loan remediation
 expense                 2,330      2,817      2,890     11,020      7,458
Other professional
 fees                    2,194      3,370      2,478     11,883      8,338
Other                   12,819     11,926     11,487     48,366     43,588
                     ---------  ---------  ---------  ---------  ---------
   Total noninterest
    expense             77,074     68,777     70,521    278,779    234,788
                     ---------  ---------  ---------  ---------  ---------
Loss before income
 tax benefit           (53,225)    (1,387)   (65,833)   (38,228)   (75,926)
Income tax benefit     (25,066)    (3,972)   (28,342)   (28,544)   (50,176)
                     ---------  ---------  ---------  ---------  ---------
   Net (loss) income   (28,159)     2,585    (37,491)    (9,684)   (25,750)
Preferred dividends     (2,579)    (2,575)    (2,569)   (10,299)   (10,265)
Net loss (income)
 applicable to
 non-vested
 restricted shares         411          1        518        266        464
                     ---------  ---------  ---------  ---------  ---------
   Net (Loss) Income
    Applicable to
    Common Shares    $ (30,327) $      11  $ (39,542) $ (19,717) $ (35,551)
                     =========  =========  =========  =========  =========
     Diluted Loss Per
      Common Share   $   (0.41) $       -  $   (0.73) $   (0.27) $   (0.71)
     Dividends
      Declared Per
      Common Share   $    0.01  $    0.01  $    0.01  $    0.04  $    0.04
     Weighted Average
      Diluted Common
      Shares
      Outstanding       73,085     73,072     54,152     72,422     50,034





First Midwest Bancorp, Inc.            Press Release Dated January 26, 2011

Pre-Tax, Pre-Provision Core Operating Earnings (1)
Unaudited
(Dollar amounts in thousands)

                             Quarters Ended               Years Ended
                     -------------------------------  --------------------
                     December   September  December   December   December
                     31, 2010   30, 2010   31, 2009   31, 2010   31, 2009
                     ---------  ---------  ---------  ---------  ---------
Loss before income
 tax benefit         $ (53,225) $  (1,387) $ (65,833) $ (38,228) $ (75,926)
Provision for loan
 losses                 73,897     33,576     93,000    147,349    215,672
                     ---------  ---------  ---------  ---------  ---------
    Pre-tax,
     pre-provision
     earnings           20,672     32,189     27,167    109,121    139,746
                     ---------  ---------  ---------  ---------  ---------

Non-Operating Items

Securities gains
 (losses), net           1,662      6,376     (5,772)    12,216      2,110
Gains on FDIC-assisted
 transactions                -          -     13,071      4,303     13,071
Gains on early
 extinguishment of
 debt                        -          -      1,267          -     15,258

Losses realized
 on OREO               (15,412)    (8,265)   (14,051)   (40,480)   (18,554)
Integration costs
 associated with
 FDIC-assisted
 acquisitions             (576)      (847)         -     (3,324)         -
FDIC special deposit
 insurance assessment        -          -          -          -     (3,500)
                     ---------  ---------  ---------  ---------  ---------
    Total non-
     operating items   (14,326)    (2,736)    (5,485)   (27,285)     8,385
                     ---------  ---------  ---------  ---------  ---------
  Pre-tax,
   pre-provision core
   operating
   earnings          $  34,998  $  34,925  $  32,652  $ 136,406  $ 131,361
                     =========  =========  =========  =========  =========
  Pre-tax,
   pre-provision core
   operating
   earnings to risk-
   weighted assets        2.21%      2.18%      2.03%      2.16%      2.04%

(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 26, 2011

Loan Portfolio Composition
Unaudited
(Dollar amounts in thousands)
                                                               Percent
                                    As Of                    Change From
                   --------------------------------------- ----------------
                              % of
                    12/31/10  Total   9/30/10    12/31/09  9/30/10 12/31/09
                   ---------- -----  ---------- ---------- ------- --------
Corporate:
  Commercial and
   industrial      $1,465,903  28.7% $1,472,439 $1,438,063  (0.4%)    1.9%
  Agricultural and
   farmland           227,756   4.5%    212,800    209,945   7.0%     8.5%
  Commercial real
   estate:
    Office            396,836   7.8%    402,947    394,228  (1.5%)    0.7%
    Retail            328,751   6.4%    329,153    331,803  (0.1%)   (0.9%)
    Industrial        478,026   9.4%    483,549    486,934  (1.1%)   (1.8%)
                   ---------- -----  ---------- ---------- ------- --------
      Total office,
       retail, and
       industrial   1,203,613  23.6%  1,215,649  1,212,965  (1.0%)   (0.8%)
                   ---------- -----  ---------- ---------- ------- --------

  Construction:
    Residential
     construction     174,690   3.4%    226,126    313,919 (22.7%)  (44.4%)
    Commercial
     construction
     and land         164,472   3.2%    193,041    231,518 (14.8%)  (29.0%)
                   ---------- -----  ---------- ---------- ------- --------
      Total
       construction   339,162   6.6%    419,167    545,437 (19.1%)  (37.8%)
                   ---------- -----  ---------- ---------- ------- --------
  Multi-family        349,862   6.9%    350,458    333,961  (0.2%)    4.8%
  Investor-owned
   rental property    124,671   2.4%    119,974    119,132   3.9%     4.6%
  Other commercial
   real estate        731,686  14.4%    717,903    679,851   1.9%     7.6%
                   ---------- -----  ---------- ---------- ------- --------
      Total
       commercial
       real estate  2,748,994  53.9%  2,823,151  2,891,346  (2.6%)   (4.9%)
                   ---------- -----  ---------- ---------- ------- --------
         Total
          corporate
          loans     4,442,653  87.1%  4,508,390  4,539,354  (1.5%)   (2.1%)
                   ---------- -----  ---------- ---------- ------- --------

Consumer:
  Home equity         445,243   8.7%    457,981    470,523  (2.8%)   (5.4%)
  Real estate 1-4
   family             160,890   3.2%    150,110    139,983   7.2%    14.9%
  Other consumer       51,774   1.0%     48,185     53,386   7.4%    (3.0%)
                   ---------- -----  ---------- ---------- ------- --------
      Total
       consumer
       loans          657,907  12.9%    656,276    663,892   0.2%    (0.9%)
                   ---------- -----  ---------- ---------- ------- --------
    Total loans,
     excluding
     covered loans  5,100,560 100.0%  5,164,666  5,203,246  (1.2%)   (2.0%)
                              =====                        ======= ========
    Covered loans     374,640           399,032    146,319
                   ----------        ---------- ----------
      Total loans  $5,475,200        $5,563,698 $5,349,565
                   ==========        ========== ==========





First Midwest Bancorp, Inc.            Press Release Dated January 26, 2011

Asset Quality, Excluding Covered Assets

Unaudited

(Dollar amounts in thousands)
                                              As Of
                          ------------------------------------------------
                                    % of Loan  % of
                          12/31/10  Category   Total    9/30/10   12/31/09
                          --------  --------  --------  --------  --------
Non-accrual loans:
    Commercial and
     industrial           $ 50,088      3.42%     23.7% $ 40,955  $ 28,193
    Agricultural and
     farmland                2,497      1.10%      1.2%    3,495     2,673
    Office, retail, and
     industrial             19,573      1.63%      9.2%   21,721    21,396
    Residential
     construction           52,122     29.84%     24.6%   61,050   112,798
    Commercial
     construction and
     land                   28,685     17.44%     13.5%   21,471    20,864
    Multi-family             6,203      1.77%      2.9%    6,813    12,486
    Investor-owned rental
     property                6,039      4.84%      2.9%    4,107     4,351
    Other commercial real
     estate                 34,566      4.72%     16.3%   40,409    28,006
    Consumer                12,009      1.83%      5.7%   11,345    13,448
                          --------  --------  --------  --------  --------
        Total non-accrual
         loans             211,782      4.15%    100.0%  211,366   244,215
                          --------  --------  ========  --------  --------
90 days past due loans
 (still accruing
 interest):
    Commercial and
     industrial              1,552      0.11%     36.6%    2,909     1,964
    Agricultural and
     farmland                  187      0.08%      4.4%        2         -
    Office, retail, and
     industrial                  -      0.00%      0.0%      460       330
    Residential
     construction              200      0.11%      4.7%      408        86
    Commercial
     construction and
     land                        -      0.00%      0.0%        -         -
    Multi-family                 -      0.00%      0.0%        -        55
    Investor-owned rental
     property                  135      0.11%      3.2%      562       225
    Other commercial real
     estate                    210      0.03%      4.9%    2,858       130
    Consumer                 1,960      0.30%     46.2%    1,937     1,289
                          --------  --------  --------  --------  --------
        Total 90 days
         past due loans      4,244      0.08%    100.0%    9,136     4,079
                          --------  --------  ========  --------  --------
        Total
         non-performing
         loans             216,026                       220,502   248,294

Restructured loans, still
 accruing interest          22,371                        11,002    30,553
OREO, excluding covered
 OREO                       31,069                        52,044    57,137
                          --------                      --------  --------
        Total
         non-performing
         assets           $269,466                      $283,548  $335,984
                          ========                      ========  ========
30-89 days past due loans $ 23,646      0.46%           $ 41,590  $ 37,912
Allowance for credit
 losses (1)               $145,072                      $145,019  $144,808

Asset Quality Ratios,
 Excluding Covered Assets
Non-accrual loans to
 loans                        4.15%                         4.09%     4.69%
Non-performing loans to
 loans                        4.24%                         4.27%     4.77%
Non-performing assets to
 loans plus OREO              5.25%                         5.44%     6.39%
Allowance for credit
 losses to loans              2.84%                         2.81%     2.78%
Allowance for credit
 losses to non-accrual
 loans                          69%                           69%       59%
Allowance for credit
 losses to
 non-performing
 loans                          67%                           66%       58%

(1) The allowance for credit losses includes a liability for unfunded
    commitments of $2.5 million as of December 31, 2010 and $450 thousand
    as of September 30, 2010.





First Midwest Bancorp, Inc.            Press Release Dated January 26, 2011

Covered Assets (1)

Unaudited

(Dollar amounts in thousands)                     As Of
                                -------------------------------------------
                                December 31,   September 30,  December 31,
                                    2010           2010           2009
                                -------------  -------------  -------------
Loans (2)                       $     374,640  $     399,032  $     146,319

FDIC indemnification asset             88,981         88,723         67,945

Other real estate owned (2)            29,698         31,550          8,981
                                -------------  -------------  -------------

     Total covered assets       $     493,319  $     519,305  $     223,245
                                =============  =============  =============
90 days or more past due loans
 (3)                            $      86,910  $      74,777  $      30,286

30-89 days past due loans (3)   $      18,445  $      24,005  $      22,988

Net charge-offs (recoveries) -
 quarter to date                $         935  $         (11) $           -

(1) Covered assets were obtained through the FDIC-assisted transactions
    related to First DuPage Bank on October 23, 2009, Peotone Bank and
    Trust Company on April 23, 2010, and Palos Bank and Trust Company on
    August 13, 2010.

(2) Covered loans and other real estate owned are subject to loss sharing
    agreements with the FDIC whereby the Company is indemnified against the
    majority of any losses incurred related to these assets.

(3) These loans are past due based on contractual terms, but are performing
    according to the Company's expectations of cash flows.







First Midwest Bancorp, Inc.            Press Release Dated January 26, 2011

Non-performing Assets and Past Due Loans

Unaudited

(Dollar amounts in thousands)
                                              As Of
                     -----------------------------------------------------
                                        2010                       2009
                     ------------------------------------------  ---------
                     December   September                        December
                        31         30       June 30    March 31     31
                     ---------  ---------  ---------  ---------  ---------
Non-performing
 assets, excluding
 covered assets
Non-accrual loans    $ 211,782  $ 211,366  $ 193,689  $ 216,073  $ 244,215
90 days or more past
 due loans               4,244      9,136      6,280      7,995      4,079
                     ---------  ---------  ---------  ---------  ---------
  Total
   non-performing
   loans               216,026    220,502    199,969    224,068    248,294

Restructured loans
 (still accruing
 interest)              22,371     11,002      9,030      5,168     30,553
Other real estate
 owned                  31,069     52,044     57,023     62,565     57,137
                     ---------  ---------  ---------  ---------  ---------
  Total
   non-performing
   assets            $ 269,466  $ 283,548  $ 266,022  $ 291,801  $ 335,984
                     =========  =========  =========  =========  =========
30-89 days past due
 loans               $  23,646  $  41,590  $  32,012  $  28,018  $  37,912

Non-accrual loans to
 total loans              4.15%      4.09%      3.72%      4.16%      4.69%
Non-performing loans
 to total loans           4.24%      4.27%      3.84%      4.31%      4.77%
Non-performing
 assets to loans
 plus OREO                5.25%      5.44%      5.05%      5.55%      6.39%

Covered assets (1)
Non-accrual loans    $       -  $       -  $       -  $       -  $       -
90 days or more past
 due loans (2)          86,910     74,777     47,912     52,464     30,286
                     ---------  ---------  ---------  ---------  ---------
  Total
   non-performing
   loans                86,910     74,777     47,912     52,464     30,286

Restructured loans
 (still accruing
 interest)                   -          -          -          -          -
Other real estate
 owned                  29,698     31,550     10,657      8,649      8,981
                     ---------  ---------  ---------  ---------  ---------
  Total
   non-performing
   assets            $ 116,608  $ 106,327  $  58,569  $  61,113  $  39,267
                     =========  =========  =========  =========  =========
30-89 days past due
 loans               $  18,445  $  24,005  $  13,725  $  10,175  $  22,988

Non-performing
 assets, including
 covered assets
Non-accrual loans    $ 211,782  $ 211,366  $ 193,689  $ 216,073  $ 244,215
90 days or more past
 due loans              91,154     83,913     54,192     60,459     34,365
                     ---------  ---------  ---------  ---------  ---------
  Total
   non-performing
   loans               302,936    295,279    247,881    276,532    278,580

Restructured loans
 (still accruing
 interest)              22,371     11,002      9,030      5,168     30,553
Other real estate
 owned                  60,767     83,594     67,680     71,214     66,118
                     ---------  ---------  ---------  ---------  ---------
  Total
   non-performing
   assets            $ 386,074  $ 389,875  $ 324,591  $ 352,914  $ 375,251
                     =========  =========  =========  =========  =========
30-89 days past due
 loans               $  42,091  $  65,595  $  45,737  $  38,193  $  60,900

Non-accrual loans to
 total loans              3.87%      3.80%      3.60%      4.05%      4.57%
Non-performing loans
 to total loans           5.53%      5.31%      4.61%      5.18%      5.21%
Non-performing
 assets to loans
 plus OREO                6.97%      6.90%      5.97%      6.52%      6.93%

(1) Covered assets were recorded at their estimated fair values at the time
    of acquisition. These assets are covered by loss sharing agreements
    with the FDIC that substantially mitigate the risk of loss.

(2) These loans are past due based on contractual terms, but are performing
    according to the Company's expectations of cash flows.






First Midwest Bancorp, Inc.            Press Release Dated January 26, 2011

Charge-off Data

Unaudited

(Dollar amounts in thousands)
                                           Quarters Ended
                          ------------------------------------------------
                                    % of Loan  % of
                          12/31/10  Category   Total    9/30/10   12/31/09
                          --------  --------  --------  --------  --------
Net loans charged-off:
    Commercial and
     industrial           $ 10,198      0.70%     14.0% $ 13,262  $ 23,320
    Agricultural and
     farmland                  125      0.05%      0.2%      489       180
    Office, retail, and
     industrial              2,888      0.24%      4.0%    2,825     3,265
    Residential
     construction           35,935     20.57%     49.3%    4,460    38,315
    Commercial
     construction and
     land                    7,743      4.71%     10.6%      228     2,714
    Multi-family             1,206      0.34%      1.6%      222     2,325
    Investor-owned rental
     property                  799      0.64%      1.1%      748     1,229
    Other commercial real
     estate                 11,403      1.56%     15.6%    9,469     7,908
    Consumer                 2,612      0.40%      3.6%    2,342     3,205
                          --------  --------  --------  --------  --------
        Total net loans
         charged-off,
         excluding
         covered assets     72,909      1.43%    100.0%   34,045    82,461
                                    ========  ========
        Net charge-offs
         (recoveries) on
         covered loans         935                           (11)        -
                          --------                      --------  --------
           Total net
            charge-offs   $ 73,844                      $ 34,034  $ 82,461
                          ========                      ========  ========

Net loan charge-offs,
 excluding covered
 charge-offs, to average
 loans, annualized:
    Quarter-to-date           5.61%                         2.59%     6.17%
    Year-to-date              2.80%                         1.87%     3.08%






First Midwest Bancorp, Inc.            Press Release Dated January 26, 2011

Securities Available-For-Sale

Unaudited

(Dollar amounts in thousands)
                                      Collateralized  Other       State
                               U.S.       Mortgage   Mortgage      and
                              Agency    Obligations   Backed     Municipal
                            ----------  ----------- ----------  ----------
As of December 31, 2010
Amortized cost              $   18,000  $  377,692  $  100,780  $  512,063
Gross unrealized gains
 (losses):
    Gross unrealized gains           7       4,261       5,732       4,728
    Gross unrealized losses       (121)     (2,364)        (61)    (12,800)
                            ----------  ----------  ----------  ----------
        Net unrealized
         gains (losses)           (114)      1,897       5,671      (8,072)
                            ----------  ----------  ----------  ----------
Fair value                  $   17,886  $  379,589  $  106,451  $  503,991
                            ==========  ==========  ==========  ==========

As of September 30, 2010
Amortized cost              $   24,088  $  297,935  $  107,966  $  549,505
Gross unrealized gains
 (losses):
    Gross unrealized gains          68       4,702       6,070      19,834
    Gross unrealized losses        (21)     (1,639)        (28)       (805)
                            ----------  ----------  ----------  ----------
        Net unrealized
         gains (losses)             47       3,063       6,042      19,029
                            ----------  ----------  ----------  ----------
Fair value                  $   24,135  $  300,998  $  114,008  $  568,534
                            ==========  ==========  ==========  ==========

As of December 31, 2009
Amortized cost              $      756  $  299,920  $  239,567  $  649,269
Gross unrealized gains
 (losses):
    Gross unrealized gains           -      10,060       9,897       8,462
    Gross unrealized losses          -      (2,059)       (182)     (6,051)
                            ----------  ----------  ----------  ----------
        Net unrealized
         gains (losses)              -       8,001       9,715       2,411
                            ----------  ----------  ----------  ----------
Fair value                  $      756  $  307,921  $  249,282  $  651,680
                            ==========  ==========  ==========  ==========


                           Collateralized
                               Debt
                            Obligations    Other       Total
                            ----------  ----------  ----------
As of December 31, 2010
Amortized cost              $   49,695  $   32,070  $1,090,300
Gross unrealized gains
 (losses):
    Gross unrealized gains           -       2,957      17,685
    Gross unrealized losses    (34,837)          -     (50,183)
                            ----------  ----------  ----------
        Net unrealized
         gains (losses)        (34,837)      2,957     (32,498)
                            ----------  ----------  ----------
Fair value                  $   14,858  $   35,027  $1,057,802
                            ==========  ==========  ==========

As of September 30, 2010
Amortized cost              $   49,695  $   35,270  $1,064,459
Gross unrealized gains
 (losses):
    Gross unrealized gains           -       2,368      33,042
    Gross unrealized losses    (36,271)       (128)    (38,892)
                            ----------  ----------  ----------
        Net unrealized
         gains (losses)        (36,271)      2,240      (5,850)
                            ----------  ----------  ----------
Fair value                  $   13,424  $   37,510  $1,058,609
                            ==========  ==========  ==========

As of December 31, 2009
Amortized cost              $   54,359  $   44,238  $1,288,109
Gross unrealized gains
 (losses):
    Gross unrealized gains           -       2,376      30,795
    Gross unrealized losses    (42,631)     (1,221)    (52,144)
                            ----------  ----------  ----------
        Net unrealized
         gains (losses)        (42,631)      1,155     (21,349)
                            ----------  ----------  ----------
Fair value                  $   11,728  $   45,393  $1,266,760
                            ==========  ==========  ==========

Contact Information

  • CONTACT:
    Paul F. Clemens
    Chief Financial Officer
    (630) 875-7347
    www.firstmidwest.com

    First Midwest Bancorp, Inc.
    One Pierce Place, Suite 1500
    Itasca, Illinois 60143
    (630) 875-7450