First Midwest Bancorp, Inc. Announces 2013 First Quarter Results

ITASCA, IL--(Marketwired - Apr 24, 2013) - Today, First Midwest Bancorp, Inc. (the "Company" or "First Midwest") (NASDAQ: FMBI), the holding company of First Midwest Bank (the "Bank"), reported results of operations and financial condition for the first quarter of 2013. Net income applicable to common shares for the first quarter of 2013 was $14.4 million, or $0.20 per share. This compares to $13.0 million, or $0.18 per share, for the fourth quarter of 2012 and $7.8 million, or $0.11 per share, for the first quarter of 2012.

"Performance for the quarter benefited from significant improvement in our credit risk profile and solid line of business momentum," said Michael L. Scudder, President and Chief Executive Officer of First Midwest Bancorp, Inc. "As expected, our wealth management and mortgage sales teams continue to drive stronger revenue growth and serve as an important offset to the revenue headwinds created by the current low interest rate environment. Loan balances remained steady, reflecting both historical seasonality and solid, disciplined growth in corporate lending."

Mr. Scudder concluded, "As we look ahead, low interest rates and evolving regulatory expectations will continue to present performance challenges for our industry. At the same time, our strong capital base and improved earnings profile leave us well positioned to navigate these headwinds, pursue opportunities for growth, and return value to our shareholders."

SELECT HIGHLIGHTS

Growing Earnings

• Earnings per share improved to $0.20, up 82% from the first quarter of 2012 and 11% from the fourth quarter of 2012.
  
  
• Total loans remained stable at $5.2 billion compared to December 31, 2012 with annualized C&I growth of 7% largely offset by mortgage loan sales.
  
  
• Year-over-year, total loans increased 4% after adjusting for the 2012 bulk loan sales.
  
  
• Operating revenues increased to $26.5 million, up 11% from the first quarter of 2012, reflecting strong growth in mortgage banking income and wealth management fees.
  
  
• Noninterest expense totaled $63.8 million, excluding severance-related costs of $1.0 million, up 2% from the first quarter of 2012.
  
  

Improving Credit and Strengthening Capital

• Net loan charge-offs, excluding covered loan charge-offs, totaled $6.8 million, down from $21.1 million for the first quarter of 2012 and consistent with the fourth quarter of 2012.
  
  
• Non-performing assets decreased 41% to $143.5 million compared to March 31, 2012 and were stable compared to December 31, 2012.
  
  
• Performing potential problem loans declined to 3.9% of total loans, down 43% and 7% from March 31, 2012 and December 31, 2012, respectively.
  
  
• Tier 1 common capital to risk-weighted assets remained strong at 9.62% as of March 31, 2013, a 29 basis point improvement from December 31, 2012.
  
  

OPERATING PERFORMANCE

Operating Performance Highlights
(Dollar amounts in thousands)
		Quarters Ended
		March 31, 2013				December 31, 2012				March 31, 2012
Net income		$	14,642			$	13,216			$	7,892
Net income applicable to common shares		$	14,430			$	13,022			$	7,753
Diluted earnings per common share		$	0.20			$	0.18			$	0.11
Return on average common equity			6.17	%			5.50	%			3.21	%
Return on average assets			0.74	%			0.65	%			0.40	%
Net interest margin			3.77	%			3.84	%			3.88	%
Efficiency ratio			66.50	%			74.02	%			64.62	%
Loans, excluding covered loans, at period end		$	5,175,271			$	5,189,676			$	5,137,328
Average transactional deposits (1)		$	5,244,755			$	5,276,919			$	4,823,339
Average assets		$	8,071,301			$	8,139,243			$	7,957,191
Average equity		$	948,060			$	941,175			$	970,368

(1)		Comprised of demand deposits and interest-bearing transactional accounts.

Pre-Tax, Pre-Provision Operating Earnings (1)
(Dollar amounts in thousands)
				Quarters Ended
				March 31, 2013			December 31, 2012				March 31, 2012
Income before income tax expense				$	20,935		$	19,410			$	9,048
Adjustments:
	Provision for loan and covered loan losses				5,674			5,593				18,210
	Net securities (gains) losses				-			(88	)			943
	Net losses on sales and valuation adjustments of other real estate owned ("OREO"), excess properties, assets held-for sale, and other.				781			1,864				303
	Gain, less related expenses, on bulk loan sales				-			(2,639	)			-
	Adjusted amortization of FDIC indemnification asset				750			2,705				-
	Acquisition integration costs				-			588				-
	Losses (gains) on early extinguishment of debt				-			814				(256	)
	Severance-related costs				980			-				315
		Pre-tax, pre-provision operating earnings		$	29,120		$	28,247			$	28,563

(1)		The Company's accounting and reporting policies conform to U.S. generally accepted accounting principles ("GAAP") and general practices within the banking industry. As a supplement to GAAP, the Company provided this non-GAAP performance result, which the Company believes is useful because it assists investors in evaluating the Company's operating performance. This non-GAAP financial measure should not be considered an alternative to GAAP.

Pre-tax, pre-provision operating earnings of $29.1 million for the first quarter of 2013 increased 2.0% and 3.1% from the first and fourth quarters of 2012, respectively. Compared to the quarter ended March 31, 2012, the increase resulted primarily from growth in mortgage banking income and wealth management fees, which more than offset the decline in net interest income.

For the quarter ended December 31, 2012, the increase in pre-tax, pre-provision operating earnings resulted from a reduction in noninterest expense, primarily from lower loan remediation costs and personnel recruitment expenses, which was offset by the decrease in net interest income and noninterest income.

Further discussion of net interest income and noninterest income and expense is presented in later sections of this release.

Net Interest Income and Margin Analysis
(Dollar amounts in thousands)
											Quarters Ended
			March 31, 2013								December 31, 2012								March 31, 2012
				Average Balance			Interest Earned/Paid		Yield/ Rate (%)			Average Balance			Interest Earned/Paid		Yield/ Rate (%)			Average Balance			Interest Earned/Paid		Yield/ Rate (%)
Assets:
Other interest-earning assets			$	584,170		$	434		0.30		$	562,288		$	345		0.24		$	449,788		$	275		0.25
Trading securities				14,357			36		1.00			15,597			94		2.41			14,585			36		0.99
Investment securities (1)				1,175,063			9,940		3.38			1,144,997			10,154		3.55			1,163,338			11,734		4.03
Federal Home Loan Bank and Federal Reserve Bank stock				47,232			339		2.87			47,232			349		2.96			52,531			330		2.51
Loans held-for-sale				-			-		-			53,808			323		2.39			-			-		-
Loans, excluding covered loans (1)				5,148,343			60,001		4.73			5,160,576			62,192		4.79			5,089,286			61,983		4.90
Covered interest-earning assets (2)				223,691			3,449		6.25			248,971			3,975		6.35			318,569			4,202		5.31
	Total interest-earning assets (1)			7,192,856			74,199		4.18			7,233,469			77,432		4.26			7,088,097			78,560		4.45
Cash and due from banks				110,073								122,328								109,717
Allowance for loan and covered loan losses				(99,086)								(103,302)								(123,667)
Other assets				867,458								886,748								883,044
	Total assets		$	8,071,301							$	8,139,243							$	7,957,191
Liabilities and Stockholders' Equity:
Interest-bearing transaction deposits			$	3,503,930			892		0.10		$	3,468,397			903		0.10		$	3,232,141			1,022		0.13
Time deposits				1,374,529			2,428		0.72			1,447,918			2,832		0.78			1,621,926			4,491		1.11
Borrowed funds				199,891			442		0.90			185,390			497		1.07			203,548			515		1.02
Senior and subordinated debt				214,796			3,435		6.49			214,764			3,445		6.38			248,232			4,058		6.57
	Total interest-bearing liabilities			5,293,146			7,197		0.55			5,316,469			7,677		0.57			5,305,847			10,086		0.76
Demand deposits				1,740,825								1,808,522								1,591,198
	Total funding sources			7,033,971								7,124,991								6,897,045
Other liabilities				89,270								73,077								89,778
Stockholders' equity - common				948,060								941,175								970,368
	Total liabilities and stockholders' equity		$	8,071,301							$	8,139,243							$	7,957,191
Net interest income/margin (1)						$	67,002		3.77					$	69,755		3.84					$	68,474		3.88

(1)		Interest income and yields on tax-exempt securities and loans are presented on a tax-equivalent basis, assuming a federal income tax rate of 35%. This non-GAAP financial measure assists management in comparing revenue from both taxable and tax-exempt sources. The corresponding income tax impact related to tax-exempt items is recorded within income tax expense. These adjustments have no impact on net income.
(2)		Covered interest-earning assets consist of loans acquired through the Company's Federal Deposit Insurance Corporation ("FDIC")-assisted transactions subject to loss sharing agreements and the related FDIC indemnification asset.

For the first quarter of 2013, average interest-earning assets increased $104.8 million from the first quarter of 2012 and declined $40.6 million from the fourth quarter of 2012. Compared to the first quarter of 2012, growth in the loan portfolio, primarily in the commercial and industrial ("C&I"), agricultural, and 1-4 family categories, was offset by the disposal of $172.5 million of original carrying value of certain non-performing and performing potential problem loans through bulk loan sales ("the bulk loan sales") completed during the fourth quarter of 2012. This loan growth, coupled with the rise in investment securities and other interest-earning assets, more than mitigated the decrease in covered interest-earning assets.

The decrease in average interest-earning assets from the fourth quarter of 2012 was partially driven by a reduction in loans held-for-sale and the sale of $41.9 million of mortgage loans outstanding at December 31, 2012. This decline was mitigated by the reinvestment of excess cash into the investment securities portfolio.

Average funding sources for the first quarter of 2013 were up $136.9 million from the first quarter of 2012 and were $91.0 million lower than the fourth quarter of 2012. For the first quarter of 2013 compared to the prior year period, growth in demand deposits more than offset the slight decline in interest-bearing liabilities. Compared to the fourth quarter of 2012, declines in time deposits and demand deposits primarily contributed to the variance.

Tax-equivalent net interest margin for the current quarter was 3.77%, declining 7 basis points compared to the fourth quarter of 2012 and 11 basis points from the first quarter of 2012. These decreases were driven by the continued repricing of maturing investment securities and loans at lower interest rates, which was mitigated by a reduction in rates paid on retail time deposits.

Interest earned on covered assets is generally recognized through the accretion of the discount on expected future cash flows. The change in the yield on covered interest-earning assets from the first quarter of 2012 was driven by revised estimates of future cash flows and the impact of adjusted amortization of the FDIC indemnification asset. The decline in yield from the fourth quarter of 2012 resulted from early pay-offs, downgrades of certain covered loans to non-accrual status, and transfers to OREO during the first quarter of 2013.

Noninterest Income Analysis
(Dollar amounts in thousands)
			Quarters Ended											March 31, 2013 Percent Change From
			March 31, 2013			December 31, 2012				March 31, 2012				December 31, 2012			March 31, 2012
Service charges on deposit accounts			$	8,677		$	9,689			$	8,660			(10.4	)		0.2
Card-based fees				5,076			5,274				5,020			(3.8	)		1.1
Wealth management fees				5,839			5,590				5,392			4.5			8.3
Mortgage banking income				1,966			2,102				-			(6.5	)		N/M
Merchant servicing fees				2,554			2,727				2,322			(6.3	)		10.0
Other service charges, commissions, and fees				1,646			1,348				1,198			22.1			37.4
Other income (1)				781			815				1,383			(4.2	)		(43.5	)
	Total operating revenues			26,539			27,545				23,975			(3.7	)		10.7
Net trading gains (2)				1,036			116				1,401			N/M			(26.1	)
Net securities gains (losses)				-			88				(943	)		N/M			N/M
Gain on bulk loan sales				-			5,153				-			N/M			N/M
(Losses) gains on early extinguishment of debt (1)				-			(814	)			256			N/M			N/M
	Total noninterest income		$	27,575		$	32,088			$	24,689			(14.1	)		11.7

N/M - Not meaningful.

(1)		These line items are included in other income in the Condensed Consolidated Statements of Income.
(2)		Net trading gains result from changes in the fair value of diversified investment securities held in a grantor trust under deferred compensation agreements and are substantially offset by nonqualified plan expense for each period presented.

Total noninterest income for the first quarter of 2013 increased 11.7% compared to the first quarter of 2012 and declined 14.1% compared to the fourth quarter of 2012. Excluding the $5.2 million gain on the bulk loan sales during the fourth quarter of 2012, noninterest income increased 2.4% from the prior quarter.

Compared to the first quarter of 2012, total operating revenues increased 10.7%, attributed mainly to a rise in wealth management fees, gains on the sale of $54.0 million of mortgage loans, and fee income generated from interest rate derivative transactions.

Total operating revenues for the first quarter of 2013 declined 3.7% compared to the fourth quarter of 2012, resulting from a decrease in card-based fees and seasonally lower volumes of non-sufficient funds fees, service charges on business accounts, and merchant servicing fees.

Noninterest Expense Analysis
(Dollar amounts in thousands)
			Quarters Ended									March 31, 2013 Percent Change From
			March 31, 2013			December 31, 2012			March 31, 2012			December 31, 2012			March 31, 2012
Salaries and wages (1)(3)			$	27,839		$	27,036		$	25,699		3.0			8.3
Nonqualified plan expense (2)(3)				1,124			205			1,558		N/M			(27.9	)
Retirement and other employee benefits (1)				7,606			6,787			6,793		12.1			12.0
	Total compensation expense			36,569			34,028			34,050		7.5			7.4
Net losses on OREO sales and valuation adjustments				781			31			303		N/M			N/M
Net OREO operating expense				1,018			1,294			1,561		(21.3	)		(34.8	)
	Net OREO expense			1,799			1,325			1,864		35.8			(3.5	)
Loan remediation costs				2,139			5,654			2,788		(62.2	)		(23.3	)
Other professional services (1)				3,079			4,761			2,841		(35.3	)		8.4
	Total professional services			5,218			10,415			5,629		(49.9	)		(7.3	)
Net occupancy and equipment expense				8,147			8,747			8,331		(6.9	)		(2.2	)
Technology and related costs				2,483			3,231			2,858		(23.2	)		(13.1	)
FDIC premiums				1,742			1,763			1,719		(1.2	)		1.3
Advertising and promotions (4)				1,410			1,744			870		(19.2	)		62.1
Merchant card expense (4)				2,044			2,192			1,796		(6.8	)		13.8
Cardholder expenses (4)				929			935			1,042		(0.6	)		(10.8	)
Adjusted amortization of FDIC indemnification asset				750			2,705			-		(72.3	)		N/M
Other expenses (4)				3,723			6,522			4,454		(42.9	)		(16.4	)
	Total noninterest expense		$	64,814		$	73,607		$	62,613		(11.9	)		3.5

N/M - Not meaningful.

(1)		In the first quarter of 2013, the Company recorded a $980,000 charge for severance-related costs that included $811,000 in salaries and wages, $64,000 in retirement and other employee benefits, and $105,000 in other professional services.
(2)		Nonqualified plan expense results from changes in the Company's obligation to participants under deferred compensation agreements.
(3)		These expenses are included in salaries and wages in the Condensed Consolidated Statements of Income.
(4)		These expenses are included in other expenses in the Condensed Consolidated Statements of Income.

Total noninterest expense for the first quarter of 2013 increased 3.5% compared to the first quarter of 2012 and declined by 11.9% compared to the fourth quarter of 2012. Excluding severance-related costs recorded in the first quarter of 2013, noninterest expense increased 2.5% from the first quarter of 2012.

First quarter 2013 salaries and wages increased from both prior periods presented due to severance expense of $811,000, along with annual merit increases and an increase in incentive compensation, which was slightly offset by a decrease in deferred salaries.

Retirement and other employee benefits increased compared to both prior periods from higher pension expense. A rise in FICA taxes also contributed to the variance compared to December 31, 2012.

The linked-quarter increase in OREO expenses resulted primarily from losses on sales of OREO properties in the first quarter of 2013 compared to gains on sales during the fourth quarter of 2012. This increase was partially offset by a reduction in real estate tax expense for the first three months of 2013.

Fourth quarter 2012 loan remediation costs were elevated due to expenses of $2.5 million related to the bulk loan sales and higher real estate taxes paid to preserve the Company's rights to collateral associated with problem loans. Compared to the first quarter of 2012, loan remediation costs decreased 23.3%. Improved credit quality driven by management's accelerated credit remediation actions in the third and fourth quarters of 2012 resulted in lower legal expenses and appraisal costs related to performing potential problem loans. In addition, the positive variance was also impacted by lower servicing costs for our covered loan portfolio.

Other professional services decreased compared to the fourth quarter of 2012 due primarily to a reduction in personnel recruitment expenses and a decline in legal fees.

Technology and related costs for the fourth quarter of 2012 were elevated from conversion expenses related to the integration of a bank acquired during the third quarter of 2012 in an FDIC-assisted transaction.

Adjusted amortization of the FDIC indemnification asset results from changes in the timing and amount of future cash flows expected to be received from the FDIC under loss sharing agreements based on management's periodic estimates of future cash flows on covered loans.

For the fourth quarter of 2012, other expenses were elevated from a $1.3 million valuation adjustment on a former banking office transferred to OREO. In addition, other expenses declined compared to both prior periods presented due to a $500,000 reduction in the reserve for unfunded commitments during the first quarter of 2013.

LOAN PORTFOLIO AND ASSET QUALITY

Loan Portfolio Composition
(Dollar amounts in thousands)
						As Of									March 31, 2013 Percent Change From
						March 31, 2013			December 31, 2012			March 31, 2012			December 31, 2012			March 31, 2012
Corporate:
	Commercial and industrial					$	1,659,872		$	1,631,474		$	1,496,966		1.7			10.9
	Agricultural						274,991			268,618			237,686		2.4			15.7
	Commercial real estate:
		Office					465,279			474,717			480,288		(2.0	)		(3.1	)
		Retail					385,413			368,796			371,258		4.5			3.8
		Industrial					493,564			489,678			515,353		0.8			(4.2	)
		Multi-family					298,117			285,481			301,356		4.4			(1.1	)
		Residential construction					54,032			61,462			99,768		(12.1	)		(45.8	)
		Commercial construction					122,210			124,954			142,307		(2.2	)		(14.1	)
		Other commercial real estate					743,076			773,121			829,005		(3.9	)		(10.4	)
			Total commercial real estate				2,561,691			2,578,209			2,739,335		(0.6	)		(6.5	)
				Total corporate loans			4,496,554			4,478,301			4,473,987		0.4			0.5
Consumer:
	Home equity loans						379,352			390,033			406,367		(2.7	)		(6.6	)
	1-4 family mortgages						263,286			282,948			217,729		(6.9	)		20.9
	Installment loans						36,079			38,394			39,245		(6.0	)		(8.1	)
				Total consumer loans			678,717			711,375			663,341		(4.6	)		2.3
			Total loans, excluding covered loans				5,175,271			5,189,676			5,137,328		(0.3	)		0.7
Covered loans							186,687			197,894			251,376		(5.7	)		(25.7	)
			Total loans			$	5,361,958		$	5,387,570		$	5,388,704		(0.5	)		(0.5	)

Total loans, excluding covered loans, of $5.2 billion remained stable compared to December 31, 2012. The Company experienced annualized growth of 7.0% in C&I loans, 9.5% in agricultural lending, and 17.7% in multi-family loans from December 31, 2012, which was offset by declines in the residential construction and other commercial real estate portfolios.

During the first quarter of 2013, $41.9 million of mortgage loans outstanding at December 31, 2012 were sold, which contributed to the decrease in the consumer portfolio. We continue to generate solid new mortgage volume, reflecting the expansion of our mortgage lending sales force that began in the second quarter of 2012.

Compared to March 31, 2012, total loans, excluding covered loans, increased 4.1% after adjusting for the 2012 bulk loan sales. In addition to growth in C&I loans and agricultural lending, the year-over-year increase was impacted by a rise in the 1-4 family portfolio from loans acquired in an FDIC-assisted transaction during the third quarter of 2012 and from new volume due to focused origination efforts.

Compared to both prior periods presented, strong growth in the C&I, agricultural, retail, and multi-family loan categories benefitted from our targeted portfolio distribution efforts. In addition, sales personnel have been focused on expansion into specialized lending areas, such as agribusiness and asset-based lending, which contributed to the increases.

Asset Quality
(Dollar amounts in thousands)
				As Of												March 31, 2013 Percent Change From
				March 31, 2013				December 31, 2012				March 31, 2012				December 31, 2012			March 31, 2012
Asset quality, excluding covered loans and covered OREO
Non-accrual loans				$	95,397			$	84,534			$	199,545			12.9			(52.2	)
90 days or more past due loans					5,552				8,689				7,674			(36.1	)		(27.7	)
		Total non-performing loans			100,949				93,223				207,219			8.3			(51.3	)
Troubled debt restructurings (still accruing interest)					2,587				6,867				2,076			(62.3	)		24.6
OREO					39,994				39,953				35,276			0.1			13.4
		Total non-performing assets		$	143,530			$	140,043			$	244,571			2.5			(41.3	)
30-89 days past due loans				$	22,222			$	22,666			$	21,241			(2.0	)		4.6
Performing potential problem loans:
	Special mention			$	121,789			$	137,622			$	234,055			(11.5	)		(48.0	)
	Substandard				82,170				81,425				123,316			0.9			(33.4	)
		Total potential problem loans		$	203,959			$	219,047			$	357,371			(6.9	)		(42.9	)
Non-accrual loans to total loans					1.84	%			1.63	%			3.88	%
Non-performing loans to total loans					1.95	%			1.80	%			4.03	%
Non-performing assets to loans plus OREO					2.75	%			2.68	%			4.73	%
Potential problem loans to total loans					3.94	%			4.22	%			6.96	%
Allowance for Credit Losses
Allowance for loan losses, excluding covered loans				$	85,364			$	87,384			$	115,271			(2.3	)		(25.9	)
Allowance for covered loan losses					12,227				12,062				993			1.4			N/M
		Total allowance for loan and covered loan losses			97,591				99,446				116,264			(1.9	)		(16.1	)
Reserve for unfunded commitments					2,866				3,366				2,500			(14.9	)		14.6
		Total allowance for credit losses		$	100,457			$	102,812			$	118,764			(2.3	)		(15.4	)
Allowance for credit losses to loans, excluding covered loans					1.70	%			1.75	%			2.29	%
Allowance for credit losses to non-accrual loans, excluding covered loans					92	%			107	%			59	%
N/M - Not meaningful.

Non-performing assets, excluding covered loans and covered OREO, were $143.5 million at March 31, 2013, decreasing $101.0 million, or 41.3%, from March 31, 2012. Compared to March 31, 2012, the significant decline in non-performing assets and potential problem loans resulted from management's accelerated credit remediation activities, including the bulk loan sales during the fourth quarter of 2012.

Non-accrual loans increased $10.9 million from December 31, 2012, primarily from the transfer of five credit relationships to non-accrual during the first quarter of 2013. Total potential problem loans declined 6.9% compared to December 31, 2012, with improvement across the majority of corporate loan categories.

Charge-Off Data
(Dollar amounts in thousands)
						Quarters Ended
						March 31, 2013			% of Total		December 31, 2012			% of Total		March 31, 2012			% of Total
Net loan charge-offs (1):
	Commercial and industrial					$	897		13.1		$	1,778		28.4		$	7,524		35.6
	Agricultural						90		1.3			(177)		(2.8)			(50)		(0.2)
	Office, retail, and industrial						1,260		18.5			95		1.5			2,665		12.6
	Multi-family						160		2.3			9		0.1			9		0.0
	Residential construction						565		8.3			134		2.1			463		2.2
	Commercial construction						(2)		0.0			100		1.6			170		0.8
	Other commercial real estate						1,604		23.5			1,786		28.5			8,177		38.7
	Consumer						2,257		33.0			2,536		40.6			2,176		10.3
			Total net loan charge-offs, excluding covered loans				6,831		100.0			6,261		100.0			21,134		100.0
			Net covered loan charge-offs (1)				698					1,465					274
				Total net loan charge-offs		$	7,529				$	7,726				$	21,408
Net loan charge-offs to average loans, excluding covered loans, annualized:
	Quarter-to-date						0.54%					0.48%					1.67%
	Year-to-date						0.54%					3.32%					1.67%

Net loan charge-offs for the first quarter of 2013 were $7.6 million, decreasing 64.8% from the first quarter of 2012 and 2.5% from the fourth quarter of 2012. The decline in charge-offs compared to the first quarter of 2012 reflected improved credit quality due to management's accelerated credit remediation actions, including the bulk loan sales.

CAPITAL MANAGEMENT

Capital Ratios
(Dollar amounts in thousands)
			March 31, 2013			December 31, 2012			March 31, 2012			Regulatory Minimum For "Well- Capitalized"			Excess Over Required Minimums at March 31, 2013
Regulatory capital ratios:
	Total capital to risk-weighted assets		12.05	%		11.90	%		13.47	%		10.00	%		20	%		$	131,048
	Tier 1 capital to risk-weighted assets		10.55	%		10.28	%		11.41	%		6.00	%		75	%		$	291,389
	Tier 1 leverage to average assets		8.75	%		8.40	%		9.38	%		5.00	%		75	%		$	289,558
Tier 1 common capital to risk-weighted assets (1)			9.62	%		9.33	%		10.38	%		N/A (2)			N/A (2)				N/A (2)
Tangible common equity ratios (3):
	Tangible common equity to tangible assets		8.66	%		8.44	%		8.95	%		N/A (2)			N/A (2)				N/A (2)
	Tangible common equity, excluding other comprehensive loss, to tangible assets		8.88	%		8.64	%		9.10	%		N/A (2)			N/A (2)				N/A (2)
	Tangible common equity to risk-weighted assets		10.52	%		10.39	%		11.01	%		N/A (2)			N/A (2)				N/A (2)
Non-performing assets to tangible common equity and allowance for credit losses			18.55	%		18.36	%		30.24	%		N/A (2)			N/A (2)				N/A (2)

(1)		Excludes the impact of trust-preferred securities.
(2)		Ratio is not subject to formal Federal Reserve regulatory guidance.
(3)		Tangible common equity ("TCE") represents common stockholders' equity less goodwill and identifiable intangible assets. In management's view, Tier 1 common and TCE measures are meaningful to the Company, as well as analysts and investors, in assessing the Company's use of equity and in facilitating comparisons with competitors.

The Company's regulatory ratios exceeded all regulatory mandated ratios for characterization as "well-capitalized" as of March 31, 2013. 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 dynamic Chicagoland banking market. As one of the Chicago metropolitan area's largest independent bank holding companies, First Midwest provides the full range of business and retail banking and wealth management services through approximately 95 offices located in communities in metropolitan Chicago, northwest Indiana, central and western Illinois, and eastern Iowa. First Midwest has been recognized by the Chicago Tribune as one of Chicago's Top Workplaces for the third consecutive year by being named a National Standard Top Workplace. Additionally, Forbes has recognized First Midwest as one of America's Most Trustworthy Companies for 2012.

Safe Harbor Statement

This press release may contain "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, 2012 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. The Company undertakes no duty to update any forward-looking statements contained in 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 24, 2013 at 10:00 AM (ET). Members of the public who would like to listen to the conference call should dial (888) 317-6016 (U.S. domestic) or (412) 317-6016 (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. 10027318 beginning one hour after completion of the live call until 9:00 A.M. (ET) on May 1, 2013. 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

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/investorrelations.

Condensed Consolidated Statements of Financial Condition
Unaudited
(Amounts in thousands)
				March 31, 2013				December 31, 2012				March 31, 2012
Assets
Cash and due from banks				$	95,983			$	149,420			$	105,722
Interest-bearing deposits in other banks					457,333				566,846				380,651
Trading securities, at fair value					15,544				14,162				16,031
Securities available-for-sale, at fair value					1,246,679				1,082,403				1,183,975
Securities held-to-maturity, at amortized cost					31,443				34,295				56,319
Federal Home Loan Bank and Federal Reserve Bank stock, at cost					47,232				47,232				46,750
Loans, excluding covered loans					5,175,271				5,189,676				5,137,328
Covered loans					186,687				197,894				251,376
Allowance for loan and covered loan losses					(97,591	)			(99,446	)			(116,264	)
	Net loans				5,264,367				5,288,124				5,272,440
OREO, excluding covered OREO					39,994				39,953				35,276
Covered OREO					14,774				13,123				16,990
FDIC indemnification asset					28,958				37,051				58,488
Premises, furniture, and equipment					118,617				121,596				132,865
Investment in BOLI					206,706				206,405				206,304
Goodwill and other intangible assets					280,240				281,059				282,815
Accrued interest receivable and other assets					207,949				218,170				193,376
	Total assets			$	8,055,819			$	8,099,839			$	7,988,002
Liabilities and Stockholders' Equity
Deposits
	Transactional deposits			$	5,251,715			$	5,272,307			$	4,897,093
	Time deposits				1,349,080				1,399,948				1,589,270
		Total deposits			6,600,795				6,672,255				6,486,363
	Borrowed funds				208,854				185,984				202,155
	Senior and subordinated debt				214,811				214,779				231,106
	Accrued interest payable and other liabilities				77,908				85,928				95,677
		Total liabilities			7,102,368				7,158,946				7,015,301
Common stock					858				858				858
Additional paid-in capital					409,077				418,318				413,742
Retained earnings					800,343				786,453				817,630
Accumulated other comprehensive loss, net of tax					(16,889	)			(15,660	)			(10,919	)
Treasury stock, at cost					(239,938	)			(249,076	)			(248,610	)
	Total stockholders' equity				953,451				940,893				972,701
	Total liabilities and stockholders' equity			$	8,055,819			$	8,099,839			$	7,988,002

Condensed Consolidated Statements of Income
Unaudited
(Amounts in thousands, except per share data)
				Quarters Ended
				March 31, 2013				December 31, 2012				March 31, 2012
Interest Income
	Loans			$	59,431			$	61,596			$	61,491
	Covered loans				3,449				3,975				4,202
	Investment securities				7,356				7,517				8,934
	Other short-term investments				809				1,111				641
		Total interest income			71,045				74,199				75,268
Interest Expense
	Deposits				3,320				3,735				5,513
	Borrowed funds				442				497				515
	Senior and subordinated debt				3,435				3,445				4,058
		Total interest expense			7,197				7,677				10,086
		Net interest income			63,848				66,522				65,182
	Provision for loan and covered loan losses				5,674				5,593				18,210
		Net interest income after provision for loan and covered loan losses			58,174				60,929				46,972
Noninterest Income
	Service charges on deposit accounts				8,677				9,689				8,660
	Card-based fees				5,076				5,274				5,020
	Wealth management fees				5,839				5,590				5,392
	Mortgage banking income				1,966				2,102				-
	Merchant servicing fees				2,554				2,727				2,322
	Other service charges, commissions, and fees				1,646				1,348				1,198
	Other income				781				1				1,639
	Net trading gains				1,036				116				1,401
	Net securities gains (losses)				-				88				(943	)
	Gain on bulk loan sales				-				5,153				-
		Total noninterest income			27,575				32,088				24,689
Noninterest Expense
	Salaries and wages				28,963				27,241				27,257
	Retirement and other employee benefits				7,606				6,787				6,793
	Net occupancy and equipment expense				8,147				8,747				8,331
	Technology and related costs				2,483				3,231				2,858
	Professional services				5,218				10,415				5,629
	Net OREO expense				1,799				1,325				1,864
	FDIC premiums				1,742				1,763				1,719
	Adjusted amortization of FDIC indemnification asset				750				2,705				-
	Other expenses				8,106				11,393				8,162
		Total noninterest expense			64,814				73,607				62,613
	Income before income tax expense				20,935				19,410				9,048
	Income tax expense				6,293				6,194				1,156
		Net income			14,642				13,216				7,892
	Net income applicable to non-vested restricted shares				(212	)			(194	)			(139	)
		Net income applicable to common shares		$	14,430			$	13,022			$	7,753
		Diluted earnings per common share		$	0.20			$	0.18			$	0.11
		Dividends declared per common share		$	0.01			$	0.01			$	0.01
	Weighted average diluted common shares outstanding				73,874				73,758				73,505