SOURCE: First Midwest Bancorp, Inc.

First Midwest Bancorp, Inc.

July 21, 2015 18:30 ET

First Midwest Bancorp, Inc. Announces 2015 Second Quarter Results

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.
     
     

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