SOURCE: First Midwest Bancorp, Inc.

First Midwest Bancorp, Inc.

April 27, 2011 06:55 ET

First Midwest Bancorp, Inc. Announces 2011 First Quarter Results

Improved Earnings and Credit Metrics -- Strong Capital and Liquidity

ITASCA, IL--(Marketwire - Apr 27, 2011) - First Midwest Bancorp, Inc. (the "Company" or "First Midwest") (NASDAQ: FMBI)

Operating Performance

--  Net income applicable to common shares of $7.5 million, or $0.10 per
    share, for first quarter 2011 compared to $5.4 million, or $0.08 per
    share, for first quarter 2010.
--  Net interest margin of 4.15% for first quarter 2011, up 13 basis points
    from 4.02% for fourth quarter 2010.
--  Commercial and industrial loan growth of 1.9%, or 7.6% annualized, for
    first quarter 2011.
--  Average core transactional deposits of $4.5 billion for first quarter
    2011 up $611.1 million, or 15.6%, from first quarter 2010.

Credit and Capital

--  Non-performing assets reduced $29.7 million, or 11.0%, from December
    31, 2010 and $52.0 million, or 17.8% from March 31, 2010.
--  Allowance for credit losses to non-performing loans increased to 76% at
    March 31, 2011 compared to 67% at December 31, 2010 and 65% at March
    31, 2010.
--  Tier 1 common capital to risk-weighted assets of 9.88% as of March 31,
    2011, up 16 basis points from 9.72% as of December 31, 2010.
--  Tangible common equity to tangible assets of 8.26% as of March 31,
    2011, up 27 basis points from 7.99% as of December 31, 2010.

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 first quarter 2011. Net income for the quarter was $10.2 million, before adjustments for preferred dividends and non-vested restricted shares, with net income of $7.5 million, or $0.10 per share, applicable to common shareholders after such adjustments. This compares to net income of $8.1 million and net income applicable to common shareholders of $5.4 million, or $0.08 per share, for first quarter 2010.

SUMMARY UPDATE

"Operating performance for the quarter was encouraging and reflected the continued execution of our business priorities," said Michael L. Scudder, President and Chief Executive Officer of First Midwest Bancorp, Inc. "The quarter reflected notable improvement in overall earnings, credit, and capital metrics, as well as lower loan loss provisioning. Our core earnings continue to remain solid, reflecting the seasonality typically experienced in the first quarter, as well as improvement in margins, increased trust and investment advisory fees, and a pickup in our commercial loan activity."

Mr. Scudder further commented, "Economic conditions remain challenging but appear to be slowly improving, with the pace of improvement closely tied to housing market recovery and employment. We remain focused on the proactive remediation of problem assets, continued investment in and expansion of our core business, and the prudent management of our capital. Our solid market presence and client-centered sales approach, enabled by our strong liquidity and capital position, leave us well positioned to benefit as the markets continue to recover, operating conditions stabilize, and demand for credit grows."

In closing, Mr. Scudder said, "We were very proud to receive the recent news that First Midwest Bank ranked highest in the Midwest for Customer Satisfaction in the J.D. Power and Associates 2011 Retail Banking Satisfaction Study(SM). Such recognition is testament not only to the relationship we strive to maintain with all of our clients but also the exceptional employees of First Midwest."


OPERATING PERFORMANCE

                          Performance Highlights
           (Dollar amounts in thousands, except per share data)

                                                Quarters Ended
                                    --------------------------------------
                                     March 31,   December 31,   March 31,
                                       2011         2010          2010
                                    -----------  -----------   -----------
Operating Performance
  Net income (loss)                 $    10,218  $   (28,159)  $     8,081
  Net income (loss) applicable to
   common shares                          7,497      (30,327)        5,428
  Diluted earnings (loss) per
   common share                     $      0.10  $     (0.41)  $      0.08
  Return on average common equity          3.27%      (12.49%)        2.38%
  Return on average assets                 0.51%       (1.34%)        0.43%
  Pre-tax, pre-provision core
   operating earnings               $    31,427       34,998        31,737
  Net interest margin                      4.15%        4.02%         4.28%
  Efficiency ratio                        62.40%       59.08%        58.41%
Credit, Capital, and Other
  Loans, including covered loans    $ 5,447,900  $ 5,475,200   $ 5,340,243
  Average core transactional
   deposits (1)                     $ 4,527,937  $ 4,590,489   $ 3,916,804
  Non-performing assets (2)         $   239,777  $   269,466   $   291,801
  Tier 1 common capital to
   risk-weighted assets                    9.88%        9.72%        10.81%
  Tangible common equity to
   tangible assets                         8.26%        7.99%         9.17%


(1) Includes average demand deposits and average interest-bearing
    transactional deposits.
(2) Excluding covered loans and covered other real estate owned, which were
    acquired through transactions with the Federal Deposit Insurance
    Corporation ("FDIC") and 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.




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

                                                   Quarters Ended
                                           -------------------------------
                                           March 31,  December   March 31,
                                             2011     31, 2010     2010
                                           ---------  ---------  ---------
Income (loss) before income tax            $  10,248  $ (53,225) $   8,436
Provision for loan losses                     19,492     73,897     18,350
                                           ---------  ---------  ---------
  Pre-tax, pre-provision earnings             29,740     20,672     26,786
                                           ---------  ---------  ---------
Non-Operating Items
Securities gains, net                            540      1,662      3,057
Losses on sales and write-downs of other
 real estate owned ("OREO")                   (2,227)   (15,412)    (7,879)
Integration costs associated with Federal
 Deposit Insurance Corporation
 ("FDIC")-assisted acquisitions                    -       (576)      (129)
                                           ---------  ---------  ---------
  Total non-operating items                   (1,687)   (14,326)    (4,951)
                                           ---------  ---------  ---------
  Pre-tax, pre-provision core operating
   earnings (1)                            $  31,427  $  34,998  $  31,737
                                           =========  =========  =========

(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.

The decline in core operating earnings from fourth quarter 2010 resulted from lower net interest income, primarily due to lower average interest-earning assets, and seasonal changes in noninterest income and expense. First quarter 2011 was relatively unchanged compared to first quarter 2010, as higher net interest income offset higher noninterest expense, excluding losses recognized on OREO. Further discussion of noninterest income and expense is presented in later sections.


                  Net Interest Income and Margin Analysis
                       (Dollar amounts in thousands)

                                                 Quarters Ended
                                     --------------------------------------
                                                 March 31, 2011
                                     --------------------------------------
                                       Average                  Yield/Rate
                                       Balance      Interest       (%)
                                     -----------  ------------ ------------
Assets:
Federal funds sold and other
 short-term investments              $   483,252  $        322         0.27
Investment securities (1)              1,166,991        13,048         4.47
Federal Home Loan Bank ("FHLB")
 and Federal Reserve Bank stock           61,338           357         2.33
Loans, excluding covered loans (1)     5,075,840        63,301         5.06
Covered interest-earning assets (2)      444,242         7,822         7.14
                                     -----------  ------------ ------------
    Total loans                        5,520,082        71,123         5.23
                                     -----------  ------------ ------------
      Total interest-earning assets
       (1)                             7,231,663        84,850         4.75
                                                  ------------ ------------
Cash and due from banks                  121,494
Allowance for credit losses             (148,051)
Other assets                             889,845
                                     -----------
      Total assets                   $ 8,094,951
                                     ===========
Liabilities and Stockholders' Equity:
Interest-bearing transaction
 deposits                            $ 3,185,924         1,656         0.21
Time deposits                          1,937,890         6,015         1.26
Borrowed funds                           285,847           680         0.96
Subordinated debt                        137,745         2,286         6.73
                                     -----------  ------------ ------------
      Total interest-bearing
       liabilities                     5,547,406        10,637         0.78
                                                  ------------ ------------
Demand deposits                        1,342,013
                                     -----------
      Total funding sources            6,889,419
Other liabilities                         83,217
Stockholders' equity - common            929,315
Stockholders' equity - preferred         193,000
                                     -----------
         Total liabilities and
          stockholders' equity       $ 8,094,951
                                     ===========
Net interest income/margin (1)                    $     74,213         4.15
                                                  ============ ============




                                                 Quarters Ended
                                     --------------------------------------
                                               December 31, 2010
                                     --------------------------------------
                                       Average                  Yield/Rate
                                       Balance      Interest       (%)
                                     -----------  ------------ ------------
Assets:
Federal funds sold and other
 short-term investments              $   609,391  $        485         0.32
Investment securities (1)              1,139,127        13,568         4.76
Federal Home Loan Bank ("FHLB")
 and Federal Reserve Bank stock           61,703           347         2.25
Loans, excluding covered loans (1)     5,155,416        64,387         4.95
Covered interest-earning assets (2)      480,612         7,431         6.13
                                     -----------  ------------ ------------
    Total loans                        5,636,028        71,818         5.06
                                     -----------  ------------ ------------
      Total interest-earning assets
       (1)                             7,446,249        86,218         4.60
                                                  ------------ ------------
Cash and due from banks                  128,919
Allowance for credit losses             (157,145)
Other assets                             896,611
                                     -----------
      Total assets                   $ 8,314,634
                                     ===========
Liabilities and Stockholders' Equity:
Interest-bearing transaction
 deposits                            $ 3,242,301         1,930         0.23
Time deposits                          2,069,389         5,977         1.15
Borrowed funds                           281,050           711         1.00
Subordinated debt                        137,743         2,279         6.56
                                     -----------  ------------ ------------
      Total interest-bearing
       liabilities                     5,730,483        10,897         0.75
                                                  ------------ ------------
Demand deposits                        1,348,188
                                     -----------
      Total funding sources            7,078,671
Other liabilities                         79,700
Stockholders' equity - common            963,263
Stockholders' equity - preferred         193,000
                                     -----------
         Total liabilities and
          stockholders' equity       $ 8,314,634
                                     ===========
Net interest income/margin (1)                    $     75,321         4.02
                                                  ============ ============



                                                 Quarters Ended
                                     --------------------------------------
                                                 March 31, 2010
                                     --------------------------------------
                                       Average                  Yield/Rate
                                       Balance      Interest       (%)
                                     -----------  ------------ ------------
Assets:
Federal funds sold and other
 short-term investments              $    55,275            57         0.42
Investment securities (1)              1,298,832        17,879         5.51
Federal Home Loan Bank ("FHLB")
 and Federal Reserve Bank stock           58,495           328         2.24
Loans, excluding covered loans (1)     5,197,499        64,805         5.06
Covered interest-earning assets (2)      208,663         2,962         5.76
                                     -----------  ------------ ------------
    Total loans                        5,406,162        67,767         5.08
                                     -----------  ------------ ------------
      Total interest-earning assets
       (1)                             6,818,764        86,031         5.10
                                                  ------------ ------------
Cash and due from banks                  112,437
Allowance for credit losses             (152,487)
Other assets                             887,067
                                     -----------
      Total assets                   $ 7,665,781
                                     ===========
Liabilities and Stockholders' Equity:
Interest-bearing transaction
 deposits                            $ 2,792,484         2,911         0.42
Time deposits                          1,956,745         7,634         1.58
Borrowed funds                           477,323         1,010         0.86
Subordinated debt                        137,736         2,286         6.73
                                     -----------  ------------ ------------
      Total interest-bearing
       liabilities                     5,364,288        13,841         1.05
                                                  ------------ ------------
Demand deposits                        1,124,320
                                     -----------
      Total funding sources            6,488,608
Other liabilities                         57,307
Stockholders' equity - common            926,866
Stockholders' equity - preferred         193,000
                                     -----------
         Total liabilities and
          stockholders' equity       $ 7,665,781
                                     ===========
Net interest income/margin (1)                    $     72,190         4.28
                                                  ============ ============

(1) Interest income and yields are presented on a tax-equivalent basis,
    assuming a federal income tax rate of 35%.
(2) Covered interest-earning assets consist of loans acquired through the
    Company's FDIC-assisted transactions and the related FDIC
    indemnification asset.

Average interest-earning assets for first quarter 2011 decreased $214.6 million, or 2.9%, from fourth quarter 2010. The quarter-over-quarter decrease in average interest-earning assets was driven by remediation of non-performing loans and a reduction in average short-term investments.

Average interest-earning assets for first quarter 2011 rose $412.9 million, or 6.1%, from first quarter 2010. This increase was due primarily to the addition of covered interest-earning assets and the investment of deposits acquired in the Company's FDIC-assisted transactions, partially offset by remediation of non-performing loans.

Average funding sources for first quarter 2011 declined $189.3 million, or 2.7%, from fourth quarter 2010. The reduction in core transactional deposits from fourth quarter 2010 to first quarter 2011 resulted from seasonal declines in public funds balances.

Average funding sources increased $400.8 million, or 6.2%, from first quarter 2010 to first quarter 2011. The growth during this period resulted from a $217.7 million, or 19.4%, rise in average demand deposits and a $393.4 million, or 14.1%, increase in average interest-bearing transactional deposits (collectively core transactional deposits). The addition of core transactional deposits reflected ongoing sales efforts, customers' liquidity preferences in today's low interest rate environment, and the acquisition of deposits through the Company's FDIC-assisted transactions. This increase was partially offset by a decline in more expensive short-term borrowings.

Interest earned on covered loans is generally recognized through the accretion of the discount taken on expected future cash flows. The Company realized actual cash flows in excess of estimates on certain loans of $954,000 for first quarter 2011 and $629,000 in fourth quarter 2010. This additional income is included in interest on covered interest-earning assets in the table above and increased net interest margin by 5 basis points for first quarter 2011 and 3 basis points for fourth quarter 2010.

                        Noninterest Income Analysis
                       (Dollar amounts in thousands)

                                                          March 31, 2011
                                 Quarters Ended        Percent Change From
                          ----------------------------  ------------------
                            March   December    March   December    March
                          31, 2011  31, 2010  31, 2010  31, 2010  31, 2010
                          --------- --------  --------  --------  --------
Service charges on
 deposit accounts         $   8,144 $  9,202  $  8,381     (11.5)     (2.8)
Trust and investment
 advisory fees                4,116    4,040     3,593       1.9      14.6
Other service charges,
 commissions, and fees        4,914    4,506     4,172       9.1      17.8
Card-based fees               4,529    4,640     3,893      (2.4)     16.3
                          --------- --------  --------  --------  --------
  Total fee-based
   revenues                  21,703   22,388    20,039      (3.1)      8.3
Bank owned life insurance
 income                         252      696       248     (63.8)      1.6
Other income                    978      451       516     116.9      89.5
                          --------- --------  --------  --------  --------
  Total operating
   revenues                  22,933   23,535    20,803      (2.6)     10.2
Trading gains, net              744      970       461     (23.3)     61.4
Gains on securities
 sales, net                     540    1,718     5,820     (68.6)    (90.7)
Securities impairment
 losses                           -      (56)   (2,763)   (100.0)   (100.0)
                          --------- --------  --------  --------  --------
  Total noninterest
   income                 $  24,217 $ 26,167  $ 24,321      (7.5)     (0.4)
                          ========= ========  ========  ========  ========

Fee-based revenues for first quarter 2011 declined 3.1% from fourth quarter 2010 and rose 8.3% compared to first quarter 2010. The reduction from fourth quarter 2010 to first quarter 2011 was attributed to an 11.5% decline in service charges on deposits partially offset by a 9.1% increase in other service charges, commissions, and fees (primarily merchant fee income). The decline in service charges from fourth quarter 2010 was due primarily to lower overdraft occurrences by customers as well as normal seasonality.

For first quarter 2011 compared to first quarter 2010, there were increases in all categories of operating revenues except for service charges on deposits.

An increase in trust assets under management drove the increase in trust and investment advisory fees from first quarter 2010 to first quarter 2011. During this period, trust assets under management increased 14.7% from $4.0 billion to $4.6 billion. Approximately $500 million of this increase was derived equally from sales efforts and improving market values with the remaining $100 million increase resulting from the addition of managed assets acquired in an FDIC-assisted transaction.

Increased merchant fees led the increase in other service charges, commissions, and fees for both prior periods presented. The year-over-year increase in merchant fees was due primarily to a 25% volume increase resulting from customers acquired in an FDIC-assisted transaction. The increase in card-based fees from first quarter 2010 to first quarter 2011 was attributed to both volume and transaction rates.

                      Noninterest Expense Analysis
                      (Dollar amounts in thousands)

                                                          March 31, 2011
                                 Quarters Ended        Percent Change From
                          ----------------------------- ------------------  
                            March   December    March   December    March
                          31, 2011  31, 2010  31, 2010  31, 2010  31, 2010
                          --------- --------- --------- --------  --------
Salaries and employee
 benefits                 $  32,523 $  31,028 $  26,884      4.8      21.0
OREO expense, net:
  Write-downs of OREO         1,112    11,957     2,338    (90.7)    (52.4)
  Losses on the sales of
   OREO, net                  1,115     3,455     5,541    (67.7)    (79.9)
  OREO operating expense,
   net                        1,704     2,408     2,908    (29.2)    (41.4)
                          --------- --------- --------- --------  --------
  Total OREO expense          3,931    17,820    10,787    (77.9)    (63.6)
                          --------- --------- --------- --------  --------
Loan remediation costs        2,848     2,330     3,224     22.2     (11.7)
Other professional
 services                     2,271     2,194     3,316      3.5     (31.5)
                          --------- --------- --------- --------  --------
  Total professional
   services                   5,119     4,524     6,540     13.2     (21.7)
                          --------- --------- --------- --------  --------
FDIC premiums                 2,725     2,967     2,532     (8.2)      7.6
Net occupancy and
 equipment expense            9,103     7,916     8,168     15.0      11.4
Technology and related
 costs                        2,623     3,209     2,483    (18.3)      5.6
Advertising and
 promotions                   1,079     1,637     1,059    (34.1)      1.9
Other expenses                8,020     7,973     7,020      0.6      14.2
                          --------- --------- --------- --------  --------
  Total noninterest
   expense                $  65,123 $  77,074 $  65,473    (15.5)     (0.5)
                          ========= ========= ========= ========  ========
Total noninterest
 expense, excluding
 losses recognized on
 OREO                     $  62,896 $  61,662 $  59,594      2.0       5.5

Total noninterest expense for first quarter 2011 decreased 15.5% from fourth quarter 2010 and was relatively flat from first quarter 2010. The majority of the increase in salaries and employee benefits from fourth quarter 2010 resulted from annual merit increases and increased benefit costs. The increase from first quarter 2010 to first quarter 2011 was impacted by the timing of certain benefit accruals, as well as annual merit increases and an increase in overall staffing levels, including additional staff employed through the Company's FDIC-assisted transactions.

OREO expenses were elevated in 2010 due to higher levels of write-downs and losses on sales of OREO and related operating expenses.

An increase in the rates charged for property taxes as well as property taxes associated with branches acquired through the Company's FDIC-assisted transactions resulted in an increase in net occupancy and equipment expense from both prior periods. In addition, in fourth quarter 2010, the Company received a refund for prior years' property taxes based on an appeal of assessed property values.

Income Taxes

Income tax expense decreased from first quarter 2010 to first quarter 2011. Effective January 1, 2011, the Illinois corporate income tax rate increased from 7.3% to 9.5%. As a result of this rate change, the Company recorded a $1.6 million state tax benefit related to the write-up of state deferred tax assets. This benefit was offset, in part, by a $108,000 increase in first quarter 2011 income tax expense related to the rate increase. The rate increase is expected to result in an approximately 1% increase to the Company's effective income tax rate in 2011.

LOAN PORTFOLIO AND ASSET QUALITY

                       Loan Portfolio Composition
                      (Dollar amounts in thousands)

                                                           March 31, 2011
                                                           Percent Change
                                   As Of                        From
                  --------------------------------------- ----------------
                    March    % of    December    March    December   March
                   31, 2011  Total   31, 2010   31, 2010  31, 2010 31, 2010
                  ---------- -----  ---------- ---------- -------  -------
Corporate:
  Commercial and
   industrial     $1,493,465  29.2% $1,465,903 $1,454,714     1.9      2.7
  Agricultural
   and farmland      234,898   4.6%    227,756    200,527     3.1     17.1
  Commercial real
   estate:
    Office           412,256   8.1%    396,836    396,749     3.9      3.9
    Retail           320,313   6.3%    328,751    346,218    (2.6)    (7.5)
    Industrial       473,311   9.3%    478,026    496,616    (1.0)    (4.7)
    Multi-family     344,645   6.8%    349,862    348,178    (1.5)    (1.0)
    Residential
     construction    151,887   3.0%    174,690    276,322   (13.1)   (45.0)
    Commercial
     construction    153,392   3.0%    164,472    233,662    (6.7)   (34.4)
    Other
     commercial
     real estate     850,334  16.7%    856,357    790,502    (0.7)     7.6
                  ---------- -----  ---------- ---------- -------  -------
      Total
       commercial
       real
       estate      2,706,138  53.2%  2,748,994  2,888,247    (1.6)    (6.3)
                  ---------- -----  ---------- ---------- -------  -------
        Total
         corporate
         loans     4,434,501  87.0%  4,442,653  4,543,488    (0.2)    (2.4)
                  ---------- -----  ---------- ---------- -------  -------
Consumer:
  Home equity        434,138   8.5%    445,243    464,655    (2.5)    (6.6)
  Real estate 1-4
   family            178,538   3.5%    160,890    139,840    11.0     27.7
  Other consumer      48,366   1.0%     51,774     47,891    (6.6)     1.0
                  ---------- -----  ---------- ---------- -------  -------
        Total
         consumer
         loans       661,042  13.0%    657,907    652,386    (0.5)     1.3
                  ---------- -----  ---------- ---------- -------  -------

      Total
       loans,
       excluding
       covered
       loans       5,095,543 100.0%  5,100,560  5,195,874    (0.1)    (1.9)
                             =====
Covered loans        352,357           374,640    144,369    (5.9)   144.1
                  ----------        ---------- ---------- -------  -------
      Total loans $5,447,900        $5,475,200 $5,340,243    (0.5)     2.0
                  ==========        ========== ========== =======  =======

Total loans of $5.4 billion as of March 31, 2011 remained relatively unchanged from December 31, 2010. A decline in the construction loan portfolios from December 31, 2010 was substantially offset by annualized growth of 7.6% in commercial and industrial loans.

Total loans increased $107.7 million, or 2.0%, from March 31, 2010 to March 31, 2011. The growth was driven by the addition of covered loans acquired through the Company's FDIC-assisted transactions, which more than offset declines in the construction loan portfolios.

                              Asset Quality
                      (Dollar amounts in thousands)

                                                     As Of
                                     -------------------------------------
                                         2011               2010
                                     -----------  ------------------------
                                       March 31   December 31    March 31
                                     -----------  -----------  -----------
Non-performing assets, excluding
 covered loans and covered OREO
Non-accrual loans                    $   186,563  $   211,782  $   216,073
90 days or more past due loans             5,231        4,244        7,995
                                     -----------  -----------  -----------
   Total non-performing loans            191,794      216,026      224,068
Restructured loans (still accruing
 interest)                                14,120       22,371        5,168
Other real estate owned                   33,863       31,069       62,565
                                     -----------  -----------  -----------
   Total non-performing assets       $   239,777  $   269,466  $   291,801
                                     ===========  ===========  ===========
30-89 days past due loans            $    28,927  $    23,646  $    28,018
Non-accrual loans to total loans            3.66%        4.15%        4.16%
Non-performing loans to total loans         3.76%        4.24%        4.31%
Non-performing assets to loans plus
 OREO                                       4.67%        5.25%        5.55%
Allowance for credit losses to loans        2.85%        2.84%        2.79%
Allowance for credit losses to
 non-accrual loans                            78%          69%          67%
Allowance for credit losses to
 non-performing loans                         76%          67%          65%
Covered loans and covered OREO (1)
Non-accrual loans                    $         -  $         -  $         -
90 days or more past due loans (2)        91,165       86,910       52,464
                                     -----------  -----------  -----------
   Total non-performing loans             91,165       86,910       52,464
Restructured loans (still accruing
 interest)                                     -            -            -
Other real estate owned                   28,871       29,698        8,649
                                     -----------  -----------  -----------
   Total non-performing assets       $   120,036  $   116,608  $    61,113
                                     ===========  ===========  ===========
30-89 days past due loans            $    10,399  $    18,445  $    10,175
Non-performing assets, including
 covered loans and covered OREO
Non-accrual loans                    $   186,563  $   211,782  $   216,073
90 days or more past due loans            96,396       91,154       60,459
                                     -----------  -----------  -----------
   Total non-performing loans            282,959      302,936      276,532
Restructured loans (still accruing
 interest)                                14,120       22,371        5,168
Other real estate owned                   62,734       60,767       71,214
                                     -----------  -----------  -----------
   Total non-performing assets       $   359,813  $   386,074  $   352,914
                                     ===========  ===========  ===========
30-89 days past due loans            $    39,326  $    42,091  $    38,193
Non-accrual loans to total loans            3.42%        3.87%        4.05%
Non-performing loans to total loans         5.19%        5.53%        5.18%
Non-performing assets to loans plus
 OREO                                       6.53%        6.97%        6.52%
Allowance for credit losses to loans        2.66%        2.65%        2.71%
Allowance for credit losses to
 non-accrual loans                            78%          69%          67%
Allowance for credit losses to
 non-performing loans                         51%          48%          52%

(1) Covered loans and covered OREO were acquired through transactions with
    the FDIC and 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.
(2) These loans are past due based on contractual terms, but are performing
    according to the Company's current expectations of cash flows.

Non-performing assets, excluding covered loans and covered OREO, were $239.8 million at March 31, 2011, decreasing $29.7 million, or 11.0%, from December 31, 2010 and $52.0 million, or 17.8%, from March 31, 2010. The reductions were substantially due to remediation activities, dispositions, and charge-offs partially offset by loans downgraded to non-accrual status. During the quarter, the Company either sold or transferred to held-for-sale $19.5 million in non-performing assets and returned $9.6 million of restructured loans to performing status as a result of satisfactory payment performance after the modification of the loans.

                               Charge-off Data
                        (Dollar amounts in thousands)


                                      Quarters Ended
                ----------------------------------------------------------
                 March 31,  % of Loan                December    March 31,
                   2011      Category   % of Total   31, 2010      2010
                ----------  ----------  ----------  ----------  ----------
Net loans
 charged-off:
  Commercial and
   industrial   $    3,128        0.21        16.9  $   10,198  $    4,463
  Agricultural
   and farmland          9           -           -         125         141
  Office, retail,
   and industrial    1,183        0.10         6.4       2,888       1,644
  Multi-family         549        0.16         3.0       1,206         512
  Residential
   construction      5,418        3.57        29.4      35,935       4,452
  Commercial
   construction        261        0.17         1.4       7,743         270
  Other
   commercial
   real estate       5,358        0.63        29.0      12,202       4,449
  Consumer           2,563        0.39        13.9       2,612       2,403
                ----------  ----------  ----------  ----------  ----------
    Total net
     loans
     charged-off,
     excluding
     covered
     loans          18,469        0.36       100.0      72,909      18,334
                            ==========  ==========
    Net charge-
     offs on
     covered
     loans           1,092                                 935           -
                ----------                          ----------  ----------
      Total net
       charge-
       offs     $   19,561                          $   73,844  $   18,334
                ==========                          ==========  ==========

Net loan
 charge-offs to
 average loans,
 excluding
 covered loans,
 annualized:
  Quarter-to-date     1.48%                               5.61%       1.43%
  Year-to-date        1.48%                               2.80%       1.43%

Net charge-offs for first quarter 2011 were down $54.3 million, or 73.5%, from fourth quarter 2010 and up $1.2 million, or 6.7%, from first quarter 2010. The quarter-over-quarter variance was driven by the additional charge-offs related to the change in disposition strategy implemented in fourth quarter 2010 with respect to certain construction related loans and OREO properties.

CAPITAL MANAGEMENT

                             Capital Ratios
                     (Dollar amounts in thousands)

                                             Regulatory
                                              Minimum
                                      Decem-    For
                        March 31,     ber 31,  "Well       Excess Over
                    ----------------  -------  Capita-  Required Minimums
                      2011     2010     2010   lized"   at March 31, 2011
                    -------  -------  -------  -------  -------------------
Regulatory capital
 ratios:
  Total capital to
   risk-weighted
   assets             16.36%   17.23%   16.18%   10.00%      64%  $ 400,070
  Tier 1 capital to
   risk-weighted
   assets             14.29%   15.17%   14.11%    6.00%     138%  $ 521,783
  Tier 1 leverage to
   average assets     11.53%   13.06%   11.16%    5.00%     131%  $ 509,471
Regulatory capital
 ratios, excluding
 preferred stock (1):
  Total capital to
   risk-weighted
   assets             13.29%   14.20%   13.12%   10.00%      33%  $ 207,070
  Tier 1 capital to
   risk-weighted
   assets             11.22%   12.14%   11.06%    6.00%      87%  $ 328,783
  Tier 1 leverage to
   average assets      9.06%   10.45%    8.74%    5.00%      81%  $ 316,471
  Tier 1 common
   capital to
   risk-weighted
   assets (2)(3)       9.88%   10.81%    9.72%  N/A (3)  N/A (3)    N/A (3)
Tangible common
 equity ratios:
  Tangible common
   equity to tangible
   assets              8.26%    9.17%    7.99%  N/A (3)  N/A (3)    N/A (3)
  Tangible common
   equity, excluding
   other
   comprehensive
   loss, to tangible
   assets              8.58%    9.42%    8.34%  N/A (3)  N/A (3)    N/A (3)
  Tangible common
   equity to
   risk-weighted
   assets             10.18%   10.52%    9.93%  N/A (3)  N/A (3)    N/A (3)



(1) These ratios exclude the impact of $193.0 million in preferred shares
    issued to the U.S. Department of the Treasury in December 2008 as part
    of its Capital Purchase Plan.
(2) Excludes the impact of preferred shares and trust-preferred securities.
(3) Ratio is not subject to formal Federal Reserve regulatory guidance.

All regulatory mandated ratios for characterization as "well-capitalized"
were exceeded as of March 31, 2011.

All regulatory mandated ratios for characterization as "well-capitalized" were exceeded as of March 31, 2011.

About the Company

First Midwest is the premier relationship-based banking franchise in the growing Chicagoland banking market. As one of the Chicago metropolitan area's largest independent bank holding companies, First Midwest provides the full range of both business and retail banking and trust and investment management services through some 100 offices located 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. First Midwest Bank received the highest numerical score among retail banks in the Midwest region in the proprietary J.D. Power and Associates 2011 Retail Banking Satisfaction Study(SM). The study was based on 51,620 total responses measuring 27 providers in the Midwest region (IA, IL, KS, MO, MN, and WI) and measures opinions of consumers with their primary banking provider. These proprietary study results are based on experiences and perceptions of consumers surveyed in January 2011. Your experiences may vary. Visit jdpower.com.

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, 2010 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, April 27, 2011 at 10:00 A.M. (EDT). 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. 450019 beginning one hour after completion of the live call until 9:00 A.M. (EDT) on May 5, 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:

--  Condensed Consolidated Statements of Financial Condition
--  Condensed Consolidated Statements of Income
--  Non-performing Assets and Past Due Loans

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.

             Condensed Consolidated Statements of Financial Condition
                                   Unaudited
                            (Amounts in thousands)


                                       March 31,  December 31,   March 31,
                                         2011         2010         2010
                                     -----------  -----------  -----------
Assets

Cash and due from banks              $   104,982  $   102,495  $    97,251
Interest-bearing deposits in other
 banks                                   421,478      483,281        2,928
Federal funds sold and other
 short-term investments                        -            -       26,735
Trading account securities, at fair
 value                                    16,227       15,282       14,114
Securities available-for-sale, at
 fair value                            1,057,758    1,057,802    1,152,039
Securities held-to-maturity, at
 amortized cost                           81,218       81,320       90,449
Federal Home Loan Bank and Federal
 Reserve Bank stock, at cost              61,338       61,338       59,428
Loans held-for-sale                        3,800          236            -
Loans, excluding covered loans         5,095,543    5,100,560    5,195,874
Covered loans                            352,357      374,640      144,369
Allowance for loan losses               (142,503)    (142,572)    (144,824)
                                     -----------  -----------  -----------

  Net loans                            5,305,397    5,332,628    5,195,419
                                     -----------  -----------  -----------
Other real estate owned ("OREO"),
 excluding covered OREO                   33,863       31,069       62,565
Covered OREO                              28,871       29,698        8,649
Federal Deposit Insurance
 Corporation ("FDIC")
 indemnification asset                    78,468       88,981       54,591
Premises, furniture, and equipment       138,119      140,907      128,180
Investment in bank owned life
 insurance                               197,889      197,644      198,201
Goodwill and other intangible assets     290,135      291,383      280,477
Accrued interest receivable and
 other assets                            225,445      232,909      221,881
                                     -----------  -----------  -----------
  Total assets                       $ 8,044,988  $ 8,146,973  $ 7,592,907
                                     ===========  ===========  ===========

Liabilities and Stockholders' Equity

Deposits
Transactional deposits               $ 4,545,670  $ 4,519,492  $ 3,948,025
Time deposits                          1,874,224    1,991,984    1,916,079
                                     -----------  -----------  -----------

  Total deposits                       6,419,894    6,511,476    5,864,104
Borrowed funds                           273,342      303,974      387,163
Subordinated debt                        137,746      137,744      137,737
Accrued interest payable and other
 liabilities                              90,130       81,734       60,135
                                     -----------  -----------  -----------

  Total liabilities                    6,921,112    7,034,928    6,449,139
                                     -----------  -----------  -----------
Preferred stock                          191,050      190,882      190,392
Common stock                                 858          858          858
Additional paid-in capital               422,405      437,550      434,704
Retained earnings                        794,569      787,678      815,395
Accumulated other comprehensive
 loss, net of tax                        (24,373)     (27,739)     (18,878)
Treasury stock, at cost                 (260,633)    (277,184)    (278,703)
                                     -----------  -----------  -----------

  Total stockholders' equity           1,123,876    1,112,045    1,143,768
                                     -----------  -----------  -----------

  Total liabilities and stockholders'
   equity                            $ 8,044,988  $ 8,146,973  $ 7,592,907
                                     ===========  ===========  ===========





                  Condensed Consolidated Statements of Income
                                 Unaudited
                 (Amounts in thousands, except per share data)


                                                   Quarters Ended
                                           -------------------------------
                                           March 31, December 31, March 31,
                                              2011       2010       2010
                                           ---------  ---------  ---------
Interest Income
 Loans                                     $  62,917  $  63,983  $  64,480
 Investment securities                         9,865     10,230     13,952
 Covered loans                                 7,822      7,431      2,962
 Federal funds sold and other short-term
  investments                                    679        832        385
                                           ---------  ---------  ---------
   Total interest income                      81,283     82,476     81,779
                                           ---------  ---------  ---------
Interest Expense
 Deposits                                      7,671      7,907     10,545
 Borrowed funds                                  680        711      1,010
 Subordinated debt                             2,286      2,279      2,286
                                           ---------  ---------  ---------
   Total interest expense                     10,637     10,897     13,841
                                           ---------  ---------  ---------
   Net interest income                        70,646     71,579     67,938
Provision for loan losses                     19,492     73,897     18,350
                                           ---------  ---------  ---------
   Net interest income (loss) after
    provision for loan losses                 51,154     (2,318)    49,588
                                           ---------  ---------  ---------
Noninterest Income
Service charges on deposit accounts            8,144      9,202      8,381
Trust and investment management fees           4,116      4,040      3,593
Other service charges, commissions, and
 fees                                          4,914      4,506      4,172
Card-based fees                                4,529      4,640      3,893
                                           ---------  ---------  ---------
   Total fee-based revenues                   21,703     22,388     20,039
Bank owned life insurance income                 252        696        248
Securities gains, net                            540      1,662      3,057
Other                                          1,722      1,421        977
                                           ---------  ---------  ---------
   Total noninterest income                   24,217     26,167     24,321
                                           ---------  ---------  ---------
Noninterest Expense
Salaries and employee benefits                32,523     31,028     26,884
OREO expense, net                              3,931     17,820     10,787
FDIC premiums                                  2,725      2,967      2,532
Net occupancy and equipment expense            9,103      7,916      8,168
Technology and related costs                   2,623      3,209      2,483
Professional fees                              5,119      4,524      6,540
Other                                          9,099      9,610      8,079
                                           ---------  ---------  ---------
   Total noninterest expense                  65,123     77,074     65,473
                                           ---------  ---------  ---------
Income (loss) before income tax               10,248    (53,225)     8,436
Income tax expense (benefit)                      30    (25,066)       355
                                           ---------  ---------  ---------
   Net income (loss)                          10,218    (28,159)     8,081
Preferred dividends                           (2,581)    (2,579)    (2,572)
Net (income) loss applicable to non-vested
 restricted shares                              (140)       411        (81)
                                           ---------  ---------  ---------
  Net income (loss) applicable to common
   shares                                  $   7,497  $ (30,327) $   5,428
                                           =========  =========  =========
   Diluted earnings (loss) per common
    share                                  $    0.10  $   (0.41) $    0.08
   Dividends declared per common share     $    0.01  $    0.01  $    0.01
   Weighted average diluted shares
    outstanding                               73,151     73,085     70,469

Contact Information

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

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