First Midwest Bancorp, Inc. Announces 2015 Second Quarter

ITASCA, IL--(Marketwired - Jul 21, 2015) - First Midwest Bancorp, Inc. (the "Company" or "First Midwest") (NASDAQ: FMBI), the holding company of First Midwest Bank (the "Bank"), today reported results of operations and financial condition for the second quarter of 2015. Net income for the second quarter of 2015 was $22.6 million, or $0.29 per share. This compares to $19.9 million, or $0.26 per share, for the first quarter of 2015, and $18.5 million, or $0.25 per share, for the second quarter of 2014.

SELECT HIGHLIGHTS

Increased earnings per share to $0.29, up 16% from the second quarter of 2014 and 12% from the first quarter of 2015.
Grew fee-based revenues to $32 million, up 17% from the second quarter of 2014 and 10% from the first quarter of 2015.
Improved efficiency ratio to 62%, compared to 64% for both the second quarter of 2014 and the first quarter of 2015.
Grew total loans, excluding covered loans, to nearly $7 billion at June 30, 2015, an increase of 16% from June 30, 2014 and 3% annualized from March 31, 2015.
Reduced non-performing assets to $75 million, down 29% from June 30, 2014 and 7% from March 31, 2015.
Grew average core deposits to nearly $7 billion, up 18% from June 30, 2014 and 3% from March 31, 2015.
Increased return on average tangible common equity to 12%, up from 10% for the second quarter of 2014 and 11% for the first quarter of 2015.

"Performance for the quarter was strong," said Michael L. Scudder, President and Chief Executive Officer of First Midwest Bancorp, Inc. "Quarterly earnings per share of $0.29 increased 12% from the first quarter of 2015, reflecting broad based revenue growth across all sales platforms and improved operating efficiency."

Mr. Scudder concluded, "As we look to the second half of the year, our priorities remain centered on strengthening our lines of business and efficiently growing and diversifying revenues. We continue to be sensitive to the expected rise in interest rates and committed to the underlying discipline required to navigate today's economy and the competitive lending environment. We are confident in our ability to leverage our culture, infrastructure and capital foundation to continue to grow and produce even stronger returns for our shareholders."

OPERATING PERFORMANCE

Net Interest Income and Margin Analysis

(Dollar amounts in thousands)

			Quarters Ended
			June 30, 2015							March 31, 2015							June 30, 2014
			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			$	669,556		$	516		0.31	$	522,232		$	398		0.31	$	532,900		$	369		0.28
Securities ⁽¹⁾				1,177,516			9,792		3.33		1,218,117			10,411		3.42		1,131,114			10,284		3.64
Federal Home Loan Bank ("FHLB") and Federal Reserve Bank stock				38,748			368		3.80		37,822			357		3.78		35,517			348		3.92
Loans ⁽¹⁾⁽²⁾				6,815,781			76,573		4.51		6,740,399			74,186		4.46		5,902,953			63,901		4.34
	Total interest-earning assets ⁽¹⁾			8,701,601			87,249		4.02		8,518,570			85,352		4.06		7,602,484			74,902		3.95
Cash and due from banks				133,180							124,730							117,108
Allowance for loan and covered loan losses				(73,865	)						(73,484	)						(79,071	)
Other assets				881,613							891,925							776,148
		Total assets	$	9,642,529						$	9,461,741						$	8,416,669

Liabilities and Stockholders' Equity:
Interest-bearing core deposits ⁽³⁾			$	4,407,168			896		0.08	$	4,313,802			927		0.09	$	3,721,134			720		0.08
Time deposits				1,216,371			1,506		0.50		1,266,562			1,598		0.51		1,168,898			1,791		0.61
Borrowed funds				140,002			118		0.34		127,571			18		0.06		164,605			169		0.41
Senior and subordinated debt				200,999			3,134		6.25		200,910			3,144		6.35		190,981			3,016		6.33
	Total interest-bearing liabilities			5,964,540			5,654		0.38		5,908,845			5,687		0.39		5,245,618			5,696		0.44
Demand deposits ⁽³⁾				2,437,742							2,312,431							2,069,781
	Total funding sources			8,402,282							8,221,276							7,315,399
Other liabilities				116,717							125,703							66,681
Stockholders' equity - common				1,123,530							1,114,762							1,034,589
		Total liabilities and stockholders' equity	$	9,642,529						$	9,461,741						$	8,416,669
Tax-equivalent net interest income/margin ⁽¹⁾							81,595		3.76					79,665		3.79					69,206		3.65
Tax-equivalent adjustment							(2,693	)						(2,883	)						(2,899	)
		Net interest income (GAAP)				$	78,902						$	76,782						$	66,307

⁽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 in income tax expense. These adjustments have no impact on net income.
⁽²⁾		Includes loans acquired through Federal Deposit Insurance Corporation ("FDIC")-assisted transactions subject to loss sharing agreements ("covered loans") and a related FDIC indemnification asset.
⁽³⁾		See the deposit portfolio section for further average balance detail by category.

For the second quarter of 2015, total average interest-earning assets rose $183.0 million from the first quarter of 2015 driven by loan growth and an increase in lower yielding other interest-earning assets, which was partially offset by a decrease in investment securities. Total average funding sources increased $181.0 million from the first quarter of 2015 as a result of seasonally higher levels of interest-bearing core deposits and demand deposits.

Compared to the second quarter of 2014, the $1.1 billion increase in total average interest-earning assets and total average funding sources reflects the impact of acquisitions during the second half of 2014 and organic loan growth over the course of the year.

Tax-equivalent net interest margin for the current quarter was 3.76%, decreasing 3 basis points from the first quarter of 2015 and increasing 11 basis points from the second quarter of 2014. Compared to the first quarter of 2015, the reduction in tax-equivalent net interest margin was impacted by higher levels of other interest-earning assets, the continued shift in the loan mix to floating rate loans, and the flattening of the yield curve, which was partially offset by acquired loan accretion income and interest rate swaps. Tax-equivalent net interest margin grew compared to the second quarter of 2014 due to acquired loan accretion income and interest rate swaps, partially offset by a decrease in accretion income on covered loans and the continued shift in the loan mix.


Noninterest Income Analysis
(Dollar amounts in thousands)

		Quarters Ended							June 30, 2015 Percent Change from
		June 30, 2015		March 31, 2015		June 30, 2014			March 31, 2015		June 30, 2014
Service charges on deposit accounts		$	9,886	$	9,271	$	8,973		6.6		10.2
Wealth management fees			7,433		7,014		6,552		6.0		13.4
Card-based fees			6,953		6,402		5,969		8.6		16.5
Merchant servicing fees			2,938		2,665		2,916		10.2		0.8
Mortgage banking income			1,439		1,123		959		28.1		50.1
Other service charges, commissions, and fees			2,924		2,166		1,639		35.0		78.4
	Total fee-based revenues		31,573		28,641		27,008		10.2		16.9
Net securities gains			515		512		4,517		0.6		(88.6	)
Other income			1,900		1,948		1,727		(2.5	)	10.0
Loss on early extinguishment of debt			--		--		(2,059	)	--		(100.0	)
	Total noninterest income	$	33,988	$	31,101	$	31,193		9.3		9.0

Total fee-based revenues of $31.6 million grew 10.2% compared to the first quarter of 2015 and 16.9% compared to the second quarter of 2014, reflecting growth across all categories.

Compared to the first quarter of 2015, the increase in service charges on deposit accounts was impacted by growth and seasonality in treasury management services and a seasonal rise in other consumer deposit transactions. The increase in card-based fees from the first quarter of 2015 reflects seasonally higher transaction volumes. Growth in service charges on deposit accounts and card-based fees compared to the second quarter of 2014 resulted primarily from services provided to customers acquired in the acquisitions completed during the second half of 2014.

Compared to both prior periods presented, continued sales of fiduciary and investment advisory services to new and existing customers drove the rise in wealth management fees. During the second quarter of 2015, we sold $51.9 million of 1-4 family mortgage loans in the secondary market compared to sales of $34.5 million in the first quarter of 2015 and $32.2 million in the second quarter of 2014. Fee income generated by sales of capital market products to commercial clients and gains realized on the sale of leasing equipment contracts contributed to the increase in other service charges, commissions, and fees compared to both prior periods presented.

Total noninterest income of $34.0 million grew 9.3% and 9.0% from the first quarter of 2015 and the second quarter of 2014, respectively. During the second quarter of 2014, the Company realized net securities gains of $4.5 million and a $2.1 million loss from the prepayment of $114.6 million in FHLB advances.


Noninterest Expense Analysis
(Dollar amounts in thousands)

				Quarters Ended									June 30, 2015 Percent Change from
				June 30, 2015			March 31, 2015			June 30, 2014			March 31, 2015		June 30, 2014
Salaries and employee benefits:
	Salaries and wages			$	33,096		$	32,794		$	28,403		0.9		16.5
	Retirement and other employee benefits				7,198			7,922			6,158		(9.1	)	16.9
		Total salaries and employee benefits			40,294			40,716			34,561		(1.0	)	16.6
Net occupancy and equipment expense					9,622			10,436			7,672		(7.8	)	25.4
Professional services					5,322			5,109			5,691		4.2		(6.5	)
Technology and related costs					3,527			3,687			3,104		(4.3	)	13.6
Merchant card expense					2,472			2,197			2,383		12.5		3.7
Advertising and promotions					2,344			1,223			2,306		91.7		1.6
Net other real estate owned ("OREO") expense					1,861			1,204			1,569		54.6		18.6
Cardholder expenses					1,292			1,268			1,081		1.9		19.5
Other expenses					6,717			6,817			5,820		(1.5	)	15.4
Acquisition and integration related expenses					--			--			830		--		(100.0	)
			Total noninterest expense	$	73,451		$	72,657		$	65,017		1.1		13.0
Efficiency ratio ⁽¹⁾					62	%		64	%		64	%

⁽¹⁾		The efficiency ratio expresses noninterest expense, excluding OREO expense, as a percentage of tax-equivalent net interest income plus total fee-based revenues, other income, and tax-equivalent adjusted BOLI income. In addition, acquisition and integration related expenses of $830,000 are excluded from the efficiency ratio for the second quarter of 2014. See the accompanying Non-GAAP Reconciliations for details on the calculation of the efficiency ratio.

The efficiency ratio improved to 62% in the second quarter of 2015 from 64% for both the first quarter of 2015 and the second quarter of 2014. Total noninterest expense increased 1.1% from the first quarter of 2015, reflecting the timing of advertising and certain OREO valuation expenses. The rise in total noninterest expense compared to the second quarter of 2014 was impacted by operating costs of the 21 banking locations acquired during the second half of 2014, of which four have been closed. These costs primarily occurred within salaries and employee benefits, net occupancy and equipment expense, technology and related costs, and other expenses.

Compared to the first quarter of 2015, the decline in net occupancy and equipment expense resulted from lower weather related costs such as snow removal and utilities.

The decrease in professional services compared to the second quarter of 2014 was driven by lower levels of loan remediation expenses and covered loan portfolio servicing costs.

Approximately half of the other expenses category consists of FDIC premiums and other intangible amortization expenses. Compared to the second quarter of 2014, the increase resulted primarily from other intangible amortization and other miscellaneous operating expenses related to the 2014 acquisitions.

LOAN PORTFOLIO AND ASSET QUALITY


Loan Portfolio Composition
(Dollar amounts in thousands)

			As of						June 30, 2015 Percent Change from
			June 30, 2015		March 31, 2015		June 30, 2014		March 31, 2015 ⁽¹⁾		June 30, 2014
Commercial and industrial			$	2,366,056	$	2,318,058	$	2,073,018	8.3		14.1
Agricultural				377,410		368,836		330,626	9.3		14.2
Commercial real estate:
	Office			488,863		488,263		444,956	0.5		9.9
	Retail			432,880		437,751		377,427	(4.5	)	14.7
	Industrial			510,759		517,548		490,018	(5.2	)	4.2
	Multi-family			557,947		560,800		350,430	(2.0	)	59.2
	Construction			190,970		191,104		195,109	(0.3	)	(2.1	)
	Other commercial real estate			871,119		881,026		798,324	(4.5	)	9.1
		Total commercial real estate		3,052,538		3,076,492		2,656,264	(3.1	)	14.9
		Total corporate loans		5,796,004		5,763,386		5,059,908	2.3		14.5
Home equity				599,320		599,543		485,085	(0.1	)	23.5
1-4 family mortgages				283,562		285,758		241,156	(3.1	)	17.6
Installment				113,382		92,834		57,308	88.5		97.8
		Total consumer loans		996,264		978,135		783,549	7.4		27.1
		Total loans, excluding covered loans		6,792,268		6,741,521		5,843,457	3.0		16.2
Covered loans				57,917		62,830		104,867	(31.3	)	(44.8	)
		Total loans	$	6,850,185	$	6,804,351	$	5,948,324	2.7		15.2

⁽¹⁾		Ratios are presented on an annualized basis.

Total loans, excluding covered loans, of $6.8 billion grew 3.0% on an annualized basis from March 31, 2015 and 16.2% from June 30, 2014. The loan growth from June 30, 2014 related to loans obtained in the 2014 acquisitions and organic growth.

Compared to March 31, 2015, growth was concentrated within our commercial and industrial and agricultural loan categories and reflects the continued expansion into select sector-based lending areas such as asset-based lending and leasing.


Asset Quality
(Dollar amounts in thousands)

		As of									June 30, 2015 Percent Change from
		June 30, 2015			March 31, 2015			June 30, 2014			March 31, 2015		June 30, 2014
Asset quality, excluding covered loans and covered OREO
Non-accrual loans		$	45,009		$	48,077		$	66,728		(6.4	)	(32.5	)
90 days or more past due loans			2,744			3,564			3,533		(23.0	)	(22.3	)
	Total non-performing loans		47,753			51,641			70,261		(7.5	)	(32.0	)
Accruing troubled debt restructurings ("TDRs")			3,067			3,581			5,697		(14.4	)	(46.2	)
OREO			24,471			26,042			30,331		(6.0	)	(19.3	)
	Total non-performing assets	$	75,291		$	81,264		$	106,289		(7.4	)	(29.2	)
30-89 days past due loans		$	28,625		$	18,631		$	24,167
Non-accrual loans to total loans			0.66	%		0.71	%		1.14	%
Non-performing loans to total loans			0.70	%		0.77	%		1.20	%
Non-performing assets to total loans plus OREO			1.10	%		1.20	%		1.81	%

Allowance for Credit Losses
Allowance for loan and covered loan losses		$	71,463		$	70,990		$	78,326
Reserve for unfunded commitments			1,816			1,816			1,616
	Total allowance for credit losses	$	73,279		$	72,806		$	79,942
Allowance for credit losses to total loans ⁽¹⁾			1.07	%		1.07	%		1.34	%
Allowance for credit losses to non-accrual loans, excluding covered loans			152.01	%		139.62	%		105.80	%

⁽¹⁾		Acquired loans are recorded at fair value as of the acquisition date with no allowance for credit losses being established. Included within total loans are loans acquired during 2014 which totaled $587.0 million at June 30, 2015 and $660.9 million and March 31, 2015. These loans have an allowance for loan loss of $821,000 that was established during the second quarter of 2015. In addition, there was a remaining acquisition adjustment of $17.5 million and $22.4 million at June 30, 2015 and March 31, 2015, respectively. This acquisition adjustment represents the difference between the contractual loan balances and the carrying value of these loans.

Total non-performing assets, excluding covered loans and covered OREO, decreased by $6.0 million, or 7.4%, from March 31, 2015 and $31.0 million, or 29.2%, from June 30, 2014.


Charge-Off Data
(Dollar amounts in thousands)

			Quarters Ended
			June 30, 2015			% of Total		March 31, 2015			% of Total		June 30, 2014			% of Total
Net loan charge-offs ⁽¹⁾:
	Commercial and industrial		$	3,273		59.2		$	6,657		80.6		$	1,840		24.1
	Agricultural			--		--			--		--			--		--
	Office, retail, and industrial			1,862		33.7			(166	)	(2.0	)		3,221		42.1
	Multi-family			466		8.4			24		0.3			265		3.5
	Construction			(188	)	(3.4	)		(17	)	(0.2	)		232		3.0
	Other commercial real estate			(603	)	(10.9	)		1,051		12.7			472		6.2
	Consumer			432		7.8			479		5.8			1,615		21.1
	Covered			285		5.2			228		2.8			2		--
		Total net loan charge-offs	$	5,527		100.0		$	8,256		100.0		$	7,647		100.0

Net loan charge-offs to average loans, annualized:
	Quarter-to-date			0.33	%				0.50	%				0.52	%
	Year-to-date			0.41	%				0.50	%				0.49	%

⁽¹⁾		Amounts represent charge-offs, net of recoveries.

Total net loan charge-offs for the second quarter of 2015 were 33 basis points of average loans, or $5.5 million, decreasing from 50 basis points for the first quarter of 2015 and 52 basis points for the second quarter of 2014.

DEPOSIT PORTFOLIO


Deposits - Average Balances
(Dollar amounts in thousands)

			Quarters Ended						June 30, 2015 Percent Change from
			June 30, 2015		March 31, 2015		June 30, 2014		March 31, 2015		June 30, 2014
Demand deposits			$	2,437,742	$	2,312,431	$	2,069,781	5.4		17.8
Savings deposits				1,470,441		1,426,546		1,189,722	3.1		23.6
NOW accounts				1,379,508		1,365,494		1,196,712	1.0		15.3
Money market accounts				1,557,219		1,521,762		1,334,700	2.3		16.7
	Core deposits			6,844,910		6,626,233		5,790,915	3.3		18.2
Time deposits and other				1,216,371		1,266,562		1,168,898	(4.0	)	4.1
		Total deposits	$	8,061,281	$	7,892,795	$	6,959,813	2.1		15.8

Average core deposits of $6.8 billion for the second quarter of 2015 increased 3.3% and 18.2% compared to the first quarter of 2015 and the second quarter of 2014, respectively. The rise in average core deposits compared to the first quarter of 2015 resulted primarily from a seasonal increase in average municipal deposits of nearly $135.0 million. Compared to the second quarter of 2014, the rise was due primarily to deposits assumed in the acquisitions completed during the second half of 2014, which further strengthened the Company's core deposit base.

CAPITAL MANAGEMENT


Capital Ratios
(Dollar amounts in thousands)

		As of
		June 30, 2015		March 31, 2015		December 31, 2014		June 30, 2014
Company regulatory capital ratios: ⁽¹⁾
	Total capital to risk-weighted assets	11.37	%	11.23	%	11.23	%	12.20	%
	Tier 1 capital to risk-weighted assets	10.49	%	10.35	%	10.19	%	10.97	%
	Tier 1 common capital to risk-weighted assets	9.93	%	9.79	%	N/A		N/A
	Tier 1 leverage to average assets	9.34	%	9.32	%	9.03	%	9.61	%
Company tangible common equity ratios ⁽²⁾⁽³⁾:
	Tangible common equity to tangible assets	8.32	%	8.54	%	8.41	%	9.52	%
	Tangible common equity, excluding other comprehensive loss, to tangible assets	8.54	%	8.68	%	8.59	%	9.71	%
	Tangible common equity to risk-weighted assets	9.55	%	9.51	%	9.73	%	10.74	%

N/A - Not applicable.

⁽¹⁾		Basel III Capital Rules became effective for the Company on January 1, 2015. These rules revise the risk-based capital requirements and introduce a new capital measure, Tier 1 common capital to risk-weighted assets. As a result, ratios subsequent to December 31, 2014 are computed using the new rules and prior periods presented are reported using the regulatory guidance applicable at that time.
⁽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 capital 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. See the accompanying Non-GAAP Reconciliations for details of the calculation of these ratios.

The Company's capital ratios increased from March 31, 2015 driven primarily by growth in retained earnings. The decline in capital ratios compared to June 30, 2014 resulted from the addition of risk-weighted and average assets, including goodwill and other intangible assets, related to acquisitions. These declines were partially offset by earnings and an increase in allowable deferred tax assets.

The Board of Directors approved a quarterly cash dividend of $0.09 per common share during the second quarter of 2015, which follows a dividend increase from $0.08 to $0.09 per common share during the first quarter of 2015.

Conference Call

A conference call to discuss the Company's results, outlook, and related matters will be held on Wednesday, July 22, 2015 at 10:00 A.M. (ET). Members of the public who would like to listen to the conference call should dial (877) 507-0639 (U.S. domestic) or (412) 317-6003 (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. 10068552 beginning one hour after completion of the live call until 9:00 A.M. (ET) on July 29, 2015. 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.

Press Release and Additional Information Available on Website

This press release and the accompanying unaudited Selected Financial Information are available through the "Investor Relations" section of First Midwest's website at www.firstmidwest.com/investorrelations.

Forward-Looking Statements

This press release may contain certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements can be identified by the use of words such as "may," "might," "will," "would," "should," "could," "expect," "plan," "intend," "anticipate," "believe," "estimate," "predict," "probable," "potential," "possible," "target," or "continue" and words of similar import. Forward-looking statements are not historical facts but instead express only management's beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside of management's control. It is possible that actual results and events may differ, possibly materially, from the anticipated results or events indicated in these forward-looking statements. Forward-looking statements are not guarantees of future performance, and we caution you not to place undue reliance on these statements. Forward-looking statements are made only as of the date of this press release, and we undertake no obligation to update any forward-looking statements contained in this press release to reflect new information or events or conditions after the date hereof.

Forward-looking statements may be deemed to include, among other things, statements relating to our future financial performance, the performance of our loan or securities portfolio, the expected amount of future credit reserves or charge-offs, corporate strategies or objectives, anticipated trends in our business, regulatory developments, acquisition transactions, including estimated synergies, cost savings and financial benefits of pending or consummated transactions, and growth strategies, including possible future acquisitions. These statements are subject to certain risks, uncertainties and assumptions. For a discussion of these risks, uncertainties and assumptions, you should refer to the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2014, as well as our subsequent filings made with the Securities and Exchange Commission. However, these risks and uncertainties are not exhaustive. Other sections of such reports describe additional factors that could adversely impact our business and financial performance.

Non-GAAP Financial Information

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 provides non-GAAP performance results, which the Company believes are useful because they assist investors in assessing the Company's operating performance. Although intended to enhance investors' understanding of the Company's business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP. See the following reconciliations for details on the calculation of these measures to the extent presented herein.

About the Company

First Midwest, with assets of $9.9 billion, is a relationship-focused financial institution and one of Illinois' largest independent publicly-traded banking companies. First Midwest's principal subsidiary, First Midwest Bank, and other affiliates provide a full range of business, middle-market and retail banking as well as wealth management services through over 100 locations in metropolitan Chicago, northwest Indiana, central and western Illinois, and eastern Iowa. First Midwest was recognized for the second year in a row by J.D. Power as having the "Highest Customer Satisfaction with Retail Banking in the Midwest"* according to the 2015 Retail Banking Satisfaction Study(SM). First Midwest's website is www.firstmidwest.com.

* First Midwest Bank received the highest numerical score among retail banks in the Midwest region in the proprietary J.D. Power 2014 and 2015 Retail Banking Satisfaction Studies(SM). The 2015 study is based on 82,030 total responses measuring 20 providers in the Midwest region (IA, IL, KS, MO, WI) and measures opinions of consumers with their primary banking provider. Proprietary study results are based on experiences and perceptions of consumers surveyed April 2014 - February 2015. Your experiences may vary. Visit JDPower.com.

Accompanying Unaudited Selected Financial Information


Consolidated Statements of Financial Condition (Unaudited) (Dollar amounts in thousands)
			As of
			June 30,			March 31,			December 31,			September 30,			June 30,
			2015			2015			2014			2014			2014
Period-End Balance Sheet
Assets
Cash and due from banks			$	135,546		$	126,450		$	117,315		$	125,977		$	155,099
Interest-bearing deposits in other banks				811,287			492,607			488,947			550,606			322,874
Trading securities, at fair value				18,172			18,374			17,460			17,928			18,231
Securities available-for-sale, at fair value				1,142,407			1,151,603			1,187,009			997,420			1,050,475
Securities held-to-maturity, at amortized cost				24,292			25,861			26,555			26,776			26,471
FHLB and FRB stock				38,748			38,748			37,558			35,588			35,588
Loans, excluding covered loans:
	Commercial and industrial			2,366,056			2,318,058			2,253,556			2,208,166			2,073,018
	Agricultural			377,410			368,836			358,249			347,511			330,626
	Commercial real estate:
		Office, retail, and industrial		1,432,502			1,443,562			1,478,379			1,422,522			1,312,401
		Multi-family		557,947			560,800			564,421			559,689			350,430
		Construction		190,970			191,104			204,236			193,445			195,109
		Other commercial real estate		871,119			881,026			887,897			871,825			798,324
	Home equity			599,320			599,543			543,185			517,446			485,085
	1-4 family mortgages			283,562			285,758			291,463			238,172			241,156
	Installment			113,382			92,834			76,032			69,428			57,308
		Total loans, excluding covered loans		6,792,268			6,741,521			6,657,418			6,428,204			5,843,457
Covered loans				57,917			62,830			79,435			90,875			104,867
Allowance for loan and covered loan losses				(71,463	)		(70,990	)		(72,694	)		(73,106	)		(78,326	)
	Net loans			6,778,722			6,733,361			6,664,159			6,445,973			5,869,998
OREO, excluding covered OREO				24,471			26,042			26,898			29,165			30,331
Covered OREO				3,759			7,309			8,068			9,277			9,825
FDIC indemnification asset				7,335			8,540			8,452			8,699			10,276
Premises, furniture, and equipment, net				128,621			128,698			131,109			123,473			118,305
Investment in BOLI				207,814			207,190			206,498			195,270			194,502
Goodwill and other intangible assets				332,223			333,202			334,199			318,511			274,962
Accrued interest receivable and other assets				209,630			200,611			190,912			211,688			188,310
	Total assets		$	9,863,027		$	9,498,596		$	9,445,139		$	9,096,351		$	8,305,247
Liabilities and Stockholders' Equity
Noninterest-bearing deposits			$	2,508,316		$	2,339,492		$	2,301,757		$	2,295,679		$	2,025,666
Interest-bearing deposits				5,704,355			5,575,187			5,586,001			5,320,454			4,869,584
	Total deposits			8,212,671			7,914,679			7,887,758			7,616,133			6,895,250
Borrowed funds				189,036			131,200			137,994			132,877			104,201
Senior and subordinated debt				201,039			200,954			200,869			191,028			190,996
Accrued interest payable and other liabilities				135,324			135,813			117,743			106,637			75,362
Stockholders' equity				1,124,957			1,115,950			1,100,775			1,049,676			1,039,438
	Total liabilities and stockholders' equity		$	9,863,027		$	9,498,596		$	9,445,139		$	9,096,351		$	8,305,247
Stockholders' equity, excluding AOCI			$	1,146,189		$	1,128,755		$	1,116,630		$	1,068,528		$	1,054,709
Stockholders' equity, common				1,124,957			1,115,950			1,100,775			1,049,676			1,039,438

Condensed Consolidated Statements of Income (Unaudited) (Dollar amounts in thousands)

				Three Months Ended												Six Months Ended
				June 30,		March 31,		December 31,			September 30,		June 30,			June 30,		June 30,
				2015		2015		2014			2014		2014			2015		2014
Income Statement
Interest income				$	84,556	$	82,469	$	81,309		$	76,862	$	72,003		$	167,025	$	141,693
Interest expense					5,654		5,687		5,490			5,831		5,696			11,341		11,691
	Net interest income				78,902		76,782		75,819			71,031		66,307			155,684		130,002
Provision for loan and covered loan losses					6,000		6,552		1,659			10,727		5,341			12,552		6,782
			Net interest income after provision for loan and covered loan losses		72,902		70,230		74,160			60,304		60,966			143,132		123,220
Noninterest Income
		Service charges on deposit accounts			9,886		9,271		10,015			9,902		8,973			19,157		16,993
		Wealth management fees			7,433		7,014		6,744			6,721		6,552			14,447		13,009
		Card-based fees			6,953		6,402		6,390			6,646		5,969			13,355		11,304
		Merchant servicing fees			2,938		2,665		2,703			2,932		2,916			5,603		5,625
		Mortgage banking income			1,439		1,123		812			1,125		959			2,562		2,074
		Other service charges, commissions, and fees			2,924		2,166		2,700			2,334		1,639			5,090		3,052
			Total fee-based revenues		31,573		28,641		29,364			29,660		27,008			60,214		52,057
		Net securities gains (losses)			515		512		(63	)		2,570		4,517			1,027		5,590
		Other income			1,900		1,948		1,767			923		1,727			3,848		2,855
		Gains on sales of properties			--		--		--			3,954		--			--		--
		Loss on early extinguishment of debt			--		--		--			--		(2,059	)		--		(2,059	)
			Total noninterest income		33,988		31,101		31,068			37,107		31,193			65,089		58,443
Noninterest Expense
	Salaries and employee benefits:
		Salaries and wages			33,096		32,794		32,640			28,152		28,403			65,890		55,786
		Retirement and other employee benefits			7,198		7,922		7,660			7,319		6,158			15,120		12,266
			Total salaries and employee benefits		40,294		40,716		40,300			35,471		34,561			81,010		68,052
		Net occupancy and equipment expense			9,622		10,436		9,479			8,639		7,672			20,058		17,063
		Professional services			5,322		5,109		6,664			5,692		5,691			10,431		11,080
		Technology and related costs			3,527		3,687		3,444			3,253		3,104			7,214		6,178
		Merchant card expense			2,472		2,197		2,203			2,396		2,383			4,669		4,596
		Advertising and promotions			2,344		1,223		2,418			1,822		2,306			3,567		3,919
		Net OREO expense			1,861		1,204		2,544			1,406		1,569			3,065		3,125
		Cardholder expenses			1,292		1,268		1,036			1,120		1,081			2,560		2,095
		Other expenses			6,717		6,817		7,446			6,766		5,820			13,534		11,747
		Acquisition and integration related expense			--		--		9,294			3,748		830			--		830
			Total noninterest expense		73,451		72,657		84,828			70,313		65,017			146,108		128,685
		Income before income tax expense			33,439		28,674		20,400			27,098		27,142			62,113		52,978
		Income tax expense			10,865		8,792		5,807			8,549		8,642			19,657		16,814
			Net income	$	22,574	$	19,882	$	14,593		$	18,549	$	18,500		$	42,456	$	36,164
	Net income applicable to common shares			$	22,325	$	19,654	$	14,454		$	18,307	$	18,270		$	41,979	$	35,709
	Net income applicable to common shares, excluding acquisition and integration related expenses			$	22,325	$	19,654	$	20,030		$	20,556	$	18,768		$	41,979	$	36,207

Selected Financial Information (Unaudited)

(Amounts in thousands, except per share data)

	As of or for the Quarters Ended															Six Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
	2015			2015			2014			2014			2014			2015			2014
Earnings Per Share
Basic earnings per common share ("EPS")	$	0.29		$	0.26		$	0.19		$	0.25		$	0.25		$	0.55		$	0.48
Diluted EPS	$	0.29		$	0.26		$	0.19		$	0.25		$	0.25		$	0.55		$	0.48
Diluted EPS, excluding acquisition and integration related expenses	$	0.29		$	0.26		$	0.27		$	0.28		$	0.25		$	0.55		$	0.49

Common Stock and Related Per Common Share Data
Book value	$	14.43		$	14.31		$	14.17		$	13.94		$	13.81		$	14.43		$	13.81
Tangible book value		10.17			10.04			9.87			9.71			10.16			10.17			10.16
Dividends declared per share		0.09			0.09			0.08			0.08			0.08			0.18			0.15
Closing price at period end		18.97			17.37			17.11			16.09			17.03			18.97			17.03
Closing price to book value		1.3			1.2			1.2			1.2			1.2			1.3			1.2
Period end shares outstanding		77,961			77,957			77,695			75,295			75,273			77,961			75,273
Period end treasury shares		10,267			10,271			10,533			10,492			10,514			10,267			10,514
Common dividends	$	7,022		$	7,011		$	6,206		$	6,027		$	6,025		$	14,033		$	11,297

Key Ratios/Data
Return on average common equity ⁽¹⁾		7.97	%		7.15	%		5.35	%		6.91	%		7.08	%		7.56	%		7.03	%
Return on average tangible common equity ⁽¹⁾		11.62	%		10.52	%		7.89	%		9.73	%		9.85	%		11.07	%		9.84	%
Return on average tangible common equity, excluding acquisition and integration related expenses ⁽¹⁾		11.62	%		10.52	%		10.83	%		10.90	%		10.12	%		11.07	%		9.97	%
Return on average assets ⁽¹⁾		0.94	%		0.85	%		0.63	%		0.84	%		0.88	%		0.90	%		0.87	%
Efficiency ratio		61.70	%		64.46	%		66.09	%		62.02	%		63.60	%		63.05	%		65.09	%
Net interest margin ⁽²⁾		3.76	%		3.79	%		3.76	%		3.72	%		3.65	%		3.77	%		3.63	%
Loans-to-deposits		83.41	%		85.97	%		85.41	%		85.60	%		86.27	%		83.41	%		86.27	%
Yield on average interest-earning assets ⁽²⁾		4.02	%		4.06	%		4.02	%		4.01	%		3.95	%		4.04	%		3.94	%
Cost of funds		0.38	%		0.39	%		0.38	%		0.43	%		0.44	%		0.39	%		0.45	%
Net noninterest expense to average assets		1.66	%		1.80	%		2.31	%		1.80	%		1.73	%		1.73	%		1.78	%
Effective income tax rate		32.50	%		30.66	%		28.47	%		31.55	%		31.84	%		31.65	%		31.74	%

Capital Ratios
Total capital to risk-weighted assets		11.37	%		11.23	%		11.23	%		10.94	%		12.20	%		11.37	%		12.20	%
Tier 1 capital to risk-weighted assets		10.49	%		10.35	%		10.19	%		9.86	%		10.97	%		10.49	%		10.97	%
Tier 1 common capital to risk-weighted assets (CET1) ⁽³⁾		9.93	%		9.79	%		N/A			N/A			N/A			9.93	%		N/A
Tier 1 leverage to average assets		9.34	%		9.32	%		9.03	%		8.93	%		9.61	%		9.34	%		9.61	%
Tangible common equity to tangible assets		8.32	%		8.54	%		8.41	%		8.33	%		9.52	%		8.32	%		9.52	%
Tangible common equity, excluding AOCI, to tangible assets		8.54	%		8.68	%		8.59	%		8.54	%		9.71	%		8.54	%		9.71	%
Tangible common equity to risk-weighted assets		9.55	%		9.51	%		9.73	%		9.57	%		10.74	%		9.55	%		10.74	%

Note: Selected Financial Information footnotes are located at the end of this section.

Selected Financial Information (Unaudited)

(Amounts in thousands, except per share data)

			As of or for the Quarters Ended															Six Months Ended
			June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
			2015			2015			2014			2014			2014			2015			2014
Asset Quality Performance Data
Non-performing assets ⁽⁴⁾
Commercial and industrial			$	11,100		$	12,913		$	22,693		$	19,696		$	22,629		$	11,100		$	22,629
Agricultural				317			358			360			361			363			317			363
Office, retail, and industrial				12,599			11,363			12,939			16,963			16,423			12,599			16,423
Multi-family				1,287			700			754			1,536			1,572			1,287			1,572
Construction				4,940			7,488			6,981			7,082			5,077			4,940			5,077
Other commercial real estate				5,513			5,915			6,970			7,912			7,930			5,513			7,930
Consumer				9,253			9,340			9,274			10,978			12,734			9,253			12,734
	Total non-accrual loans			45,009			48,077			59,971			64,528			66,728			45,009			66,728
90 days or more past due loans				2,744			3,564			1,173			6,062			3,533			2,744			3,533
	Total non-performing loans			47,753			51,641			61,144			70,590			70,261			47,753			70,261
Accruing troubled debt restructurings				3,067			3,581			3,704			5,449			5,697			3,067			5,697
Other real estate owned				24,471			26,042			26,898			29,165			30,331			24,471			30,331
	Total non-performing assets		$	75,291		$	81,264		$	91,746		$	105,204		$	106,289		$	75,291		$	106,289
30-89 days past due loans ⁽⁴⁾			$	28,625		$	18,631		$	20,073		$	17,321		$	24,167		$	28,625		$	24,167
Allowance for credit losses
Allowance for loan losses			$	66,602		$	65,311		$	65,468		$	64,457		$	68,983		$	66,602		$	68,983
Allowance for covered loan losses				4,861			5,679			7,226			8,649			9,343			4,861			9,343
Reserve for unfunded commitments				1,816			1,816			1,816			1,616			1,616			1,816			1,616
Total allowance for credit losses			$	73,279		$	72,806		$	74,510		$	74,722		$	79,942		$	73,279		$	79,942
Provision for loan and covered loan losses			$	6,000		$	6,552		$	1,659		$	10,727		$	5,341		$	12,552		$	6,782
Net charge-offs by category
Commercial and industrial			$	3,273		$	6,657		$	1,217		$	9,047		$	1,840		$	9,930		$	3,207
Agricultural				--			--			--			--			--			--			153
Commercial real estate:
	Office, retail, and industrial			1,862			(166	)		143			2,459			3,221			1,696			4,246
	Multi-family			466			24			476			26			265			490			354
	Construction			(188	)		(17	)		(6	)		157			232			(205	)		735
	Other commercial real estate			(603	)		1,051			(247	)		1,255			472			448			2,099
Consumer				432			479			342			2,998			1,615			911			3,505
	Net charge-offs, excluding covered loans			5,242			8,028			1,925			15,942			7,645			13,270			14,299
Charge-offs on covered loans				285			228			146			5			2			513			(338	)
		Total net charge-offs	$	5,527		$	8,256		$	2,071		$	15,947		$	7,647		$	13,783		$	13,961
Total recoveries included above			$	2,579		$	1,797		$	2,669		$	1,159		$	1,133		$	4,376		$	4,377
Asset Quality ratios⁽⁴⁾
Non-accrual loans to total loans				0.66	%		0.71	%		0.90	%		1.00	%		1.14	%		0.66	%		1.14	%
Non-performing loans to total loans				0.70	%		0.77	%		0.92	%		1.10	%		1.20	%		0.70	%		1.20	%
Non-performing assets to total loans plus OREO				1.10	%		1.20	%		1.37	%		1.63	%		1.81	%		1.10	%		1.81	%
Non-performing assets to tangible common equity plus allowance for credit losses				8.69	%		9.56	%		11.00	%		13.20	%		12.73	%		8.69	%		12.73	%
Non-accrual loans to total assets				0.46	%		0.51	%		0.64	%		0.72	%		0.82	%		0.46	%		0.82	%
Allowance for credit losses and net charge-off ratios
Allowance for credit losses to total loans ⁽⁵⁾				1.07	%		1.07	%		1.11	%		1.15	%		1.34	%		1.07	%		1.34	%
Allowance for credit losses to non-accrual loans ⁽⁴⁾				152.01	%		139.62	%		112.19	%		102.39	%		105.80	%		152.01	%		105.80	%
Allowance for credit losses to non-performing loans ⁽⁴⁾				143.27	%		129.99	%		110.04	%		93.60	%		100.48	%		143.27	%		100.48	%
Net charge-offs to average loans ⁽¹⁾				0.33	%		0.50	%		0.13	%		1.01	%		0.53	%		0.41	%		0.51	%

Footnotes to Selected Financial Information
⁽¹⁾		Annualized based on the actual number of days for each period presented.
⁽²⁾		Tax equivalent basis reflects federal and state tax benefits.
⁽³⁾		Basel III Capital Rules became effective for the Company on January 1, 2015. These rules revise the risk-based capital requirements and introduce a new capital measure, Tier 1 common capital to risk weighted assets. As a result, ratios subsequent to December 31, 2014 are computed using the new rules and prior periods presented are reported using the regulatory guidance applicable at that time.
⁽⁴⁾		Excludes covered loans and covered OREO.
⁽⁵⁾		Acquired loans are recorded at fair value as of the acquisition date with no allowance for credit losses being established. Included within total loans are loans acquired during 2014 which totaled $587.0 million at June 30, 2015, $660.9 million and March 31, 2015, $718.3 million at December 31, 2014, and $533.2 million at September 30, 2014. These loans have an allowance for loan loss of $821,000 that was established during the second quarter of 2015. In addition, there was a remaining acquisition adjustment of $17.5 million at June 30, 2015, $22.4 million at March 31, 2015, $24.7 million at December 31, 2014, and $13.6 million at September 30, 2014. This acquisition adjustment represents the difference between the contractual loan balances and the carrying value of these loans.

Non-GAAP Reconciliations (Unaudited)

(Amounts in thousands, except per share data)

			Three Months Ended															Six Months Ended
			June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
			2015			2015			2014			2014			2014			2015			2014
Earnings Per Share
Net income			$	22,574		$	19,882		$	14,593		$	18,549		$	18,500		$	42,456		$	36,164
Net income applicable to non-vested restricted shares				(249	)		(228	)		(139	)		(242	)		(230	)		(477	)		(455	)
	Net income applicable to common shares			22,325			19,654			14,454			18,307			18,270			41,979			35,709
Tax-equivalent acquisition and integration related expenses				--			--			5,576			2,249			498			--			498
	Net income applicable to common shares,excluding acquisition and integration related expenses		$	22,325		$	19,654		$	20,030		$	20,556		$	18,768		$	41,979		$	36,207
Weighted-average common shares outstanding:
	Weighted-average common shares outstanding (basic)			77,089			76,918			75,119			74,341			74,322			77,004			74,235
	Dilutive effect of common stock equivalents			12			12			12			11			11			12			12
		Weighted-average diluted common shares outstanding		77,101			76,930			75,131			74,352			74,333			77,016			74,247
Basic earnings per common share ("EPS")			$	0.29		$	0.26		$	0.19		$	0.25		$	0.25		$	0.55		$	0.48
Diluted EPS			$	0.29		$	0.26		$	0.19		$	0.25		$	0.25		$	0.55		$	0.48
Diluted EPS, excluding acquisition and integration related expenses			$	0.29		$	0.26		$	0.27		$	0.28		$	0.25		$	0.55		$	0.49
Anti-dilutive shares not included in the computation of diluted earnings per common share				768			948			1,146			1,155			1,177			857			1,246

Efficiency Ratio Calculation
Noninterest expense			$	73,451		$	72,657		$	84,828		$	70,313		$	65,017		$	146,108		$	128,685
Less:
	Net OREO expense			(1,861	)		(1,204	)		(2,544	)		(1,406	)		(1,569	)		(3,065	)		(3,125	)
	Acquisition and integration related expenses			--			--			(9,294	)		(3,748	)		(830	)		--			(830	)
		Total	$	71,590		$	71,453		$	72,990		$	65,159		$	62,618		$	143,043		$	124,730
Tax-equivalent net interest income ⁽¹⁾			$	81,595		$	79,665		$	78,742		$	73,970		$	69,206		$	161,260		$	135,877
Fee-based revenues				31,573			28,641			29,364			29,660			27,008			60,214			52,057
Add:
	Other income, excluding BOLI income			446			1,065			924			156			954			1,511			1,592
	Tax-adjusted BOLI (BOLI/.6)			2,423			1,472			1,405			1,278			1,288			3,895			2,105
		Total	$	116,037		$	110,843		$	110,435		$	105,064		$	98,456		$	226,880		$	191,631
Efficiency ratio				61.70	%		64.46	%		66.09	%		62.02	%		63.60	%		63.05	%		65.09	%

Tax Equivalent Net Interest Income
Net interest income			$	78,902		$	76,782		$	75,819		$	71,031		$	66,307		$	155,684		$	130,002
Tax equivalent adjustment				2,693			2,883			2,923			2,939			2,899			5,576			5,875
	Tax-equivalent net interest income ⁽¹⁾		$	81,595		$	79,665		$	78,742		$	73,970		$	69,206		$	161,260		$	135,877

Note: Non-GAAP Reconciliations footnotes are located at the end of this section.

Non-GAAP Reconciliations (Unaudited)
(Amounts in thousands, except per share data)

		As of or for the Quarters Ended															Six Months Ended
		June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
		2015			2015			2014			2014			2014			2015			2014
Risk-Based Capital Data
Common stock		$	882		$	882		$	882		$	858		$	858		$	882		$	858
Additional paid-in capital			443,558			441,689			449,798			408,789			407,895			443,558			407,895
Retained earnings			927,939			912,387			899,516			891,129			878,607			927,939			878,607
Treasury stock, at cost			(226,190	)		(226,203	)		(233,566	)		(232,248	)		(232,651	)		(226,190	)		(232,651	)
Goodwill and other intangible assets			(319,243	)		(319,635	)		(334,199	)		(318,511	)		(274,962	)		(319,243	)		(274,962	)
Disallowed deferred tax assets (CET1) ⁽²⁾			(3,046	)		(3,354	)		(30,638	)		(33,473	)		(35,861	)		(3,046	)		(35,861	)
	Common equity Tier 1 capital		823,900			805,766			751,793			716,544			743,886			823,900			743,886
Trust preferred securities			50,690			50,690			50,690			36,690			36,690			50,690			36,690
Disallowed deferred tax assets (other) ⁽²⁾			(4,568	)		(5,030	)		N/A			N/A			N/A			(4,568	)		N/A
	Tier 1 capital		870,022			851,426			802,483			753,234			780,576			870,022			780,576
Tier 2 capital			73,279			72,806			82,209			82,421			87,641			73,279			87,641
	Total capital	$	943,301		$	924,232		$	884,692		$	835,655		$	868,217		$	943,301		$	868,217
Risk-weighted assets		$	8,296,679		$	8,229,627		$	7,876,754		$	7,640,487		$	7,116,599		$	8,296,679		$	7,116,599
Adjusted average assets		$	9,318,347		$	9,134,320		$	8,884,045		$	8,433,363		$	8,123,488		$	9,318,347		$	8,123,488
Total capital to risk-weighted assets			11.37	%		11.23	%		11.23	%		10.94	%		12.20	%		11.37	%		12.20	%
Tier 1 capital to risk-weighted assets			10.49	%		10.35	%		10.19	%		9.86	%		10.97	%		10.49	%		10.97	%
Tier 1 common capital to risk-weighted assets (CET1)			9.93	%		9.79	%		N/A			N/A			N/A			9.93	%		N/A
Tier 1 leverage to average assets			9.34	%		9.32	%		9.03	%		8.93	%		9.61	%		9.34	%		9.61	%

Tangible Common Equity
Stockholders' equity		$	1,124,957		$	1,115,950		$	1,100,775		$	1,049,676		$	1,039,438		$	1,124,957		$	1,039,438
Less: goodwill and other intangible assets			(332,223	)		(333,202	)		(334,199	)		(318,511	)		(274,962	)		(332,223	)		(274,962	)
	Tangible common equity		792,734			782,748			766,576			731,165			764,476			792,734			764,476
Less: accumulated other comprehensive income ("AOCI")			21,232			12,805			15,855			18,852			15,271			21,232			15,271
	Tangible common equity, excluding AOCI	$	813,966		$	795,553		$	782,431		$	750,017		$	779,747		$	813,966		$	779,747
Total assets		$	9,863,027		$	9,498,596		$	9,445,139		$	9,096,351		$	8,305,247		$	9,863,027		$	8,305,247
Less: intangible assets			(332,223	)		(333,202	)		(334,199	)		(318,511	)		(274,962	)		(332,223	)		(274,962	)
	Total tangible assets	$	9,530,804		$	9,165,394		$	9,110,940		$	8,777,840		$	8,030,285		$	9,530,804		$	8,030,285
Tangible common equity to tangible assets			8.32	%		8.54	%		8.41	%		8.33	%		9.52	%		8.32	%		9.52	%
Tangible common equity, excluding AOCI, to tangible assets			8.54	%		8.68	%		8.59	%		8.54	%		9.71	%		8.54	%		9.71	%
Tangible common equity to risk-weighted assets			9.55	%		9.51	%		9.73	%		9.57	%		10.74	%		9.55	%		10.74	%

Note: Non-GAAP Reconciliations footnotes are located at the end of this section.

Non-GAAP Reconciliations (Unaudited)

(Amounts in thousands, except per share data)

		As of or for the Quarters Ended															Six Months Ended
		June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
		2015			2015			2014			2014			2014			2015			2014
Return on Average Common and Tangible Common Equity
Net income applicable to common shares		$	22,325		$	19,654		$	14,454		$	18,307		$	18,270		$	41,979		$	35,709
Tax-equivalent intangibles amortization			587			599			505			386			386			1,186			843
	Net income applicable to common shares, excluding intangibles amortization		22,912			20,253			14,959			18,693			18,656			43,165			36,552
Tax-equivalent acquisition and integration related expenses			--			--			5,576			2,249			498			--			498
	Net income applicable to common shares, excluding intangibles amortization and acquisition and integration related expenses	$	22,912		$	20,253		$	20,535		$	20,942		$	19,154		$	43,165		$	37,050
Average stockholders' equity		$	1,123,530		$	1,114,762		$	1,072,682		$	1,050,881		$	1,034,589		$	1,119,170		$	1,025,049
Less: average intangible assets			(332,694	)		(333,684	)		(320,533	)		(288,975	)		(275,273	)		(333,186	)		(275,613	)
	Average tangible common equity	$	790,836		$	781,078		$	752,149		$	761,906		$	759,316		$	785,984		$	749,436
Return on average common equity ⁽³⁾			7.97	%		7.15	%		5.35	%		6.91	%		7.08	%		7.56	%		7.03	%
Return on average tangible common equity ⁽³⁾			11.62	%		10.52	%		7.89	%		9.73	%		9.85	%		11.07	%		9.84	%
Return on average tangible common equity, excluding acquisition and integration related expenses ⁽³⁾			11.62	%		10.52	%		10.83	%		10.90	%		10.12	%		11.07	%		9.97	%

Footnotes to Non-GAAP Reconciliations
⁽¹⁾		Tax equivalent basis reflects federal and state tax benefits.
⁽²⁾		Basel III Capital Rules became effective for the Company on January 1, 2015. These rules revise the risk-based capital requirements and introduce a new capital measure, Tier 1 common capital to risk-weighted assets. As a result, ratios subsequent to December 31, 2014 are computed using the new rules and prior periods presented are reported using the regulatory guidance applicable at that time.
⁽³⁾		Annualized based on the actual number of days for each period presented.

Contact Information:

Contact Information

Investors:
Paul F. Clemens
EVP and Chief Financial Officer
(630) 875-7347
paul.clemens@firstmidwest.com

Media:
James M. Roolf
SVP and Corporate Relations Officer
(630) 875-7533
jim.roolf@firstmidwest.com

First Midwest Bancorp, Inc. Announces 2015 Second Quarter Results