SOURCE: First Midwest Bancorp, Inc.

First Midwest Bancorp, Inc.

April 19, 2016 18:24 ET

First Midwest Bancorp, Inc. Announces 2016 First Quarter Results

ITASCA, IL--(Marketwired - Apr 19, 2016) - 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 first quarter of 2016. Net income for the first quarter of 2016 was $18.0 million, or $0.23 per share. This compares to $19.9 million, or $0.26 per share, for the first quarter of 2015, and $16.3 million, or $0.21 per share, for the fourth quarter of 2015. Performance for the first quarter of 2016 and fourth quarter of 2015 were impacted by acquisition and integration related pre-tax expenses of $5.0 million and $1.4 million, respectively. In addition, property valuation pre-tax adjustments of $8.6 million were recorded in the fourth quarter of 2015 as a result of strategic branch initiatives. Excluding these expenses, earnings per share was $0.27 for the first quarter of 2016 compared to $0.26 for the first quarter of 2015 and $0.29 for the fourth quarter of 2015.

SELECT FIRST QUARTER HIGHLIGHTS

  • Increased earnings per share to $0.27, up 4% from the first quarter of 2015, excluding acquisition and integration related expenses.

  • Expanded net interest margin to 3.66%, up 7 basis points, and period end interest-earning assets, up 10%, from the fourth quarter 2015.

  • Grew fee-based revenues to $34 million, an increase of 17% from the first quarter of 2015 and consistent with the fourth quarter of 2015.

  • Increased total loans to $7.8 billion, up 15% from March 31, 2015 and 9% from December 31, 2015.

  • Reduced non-performing assets to $69 million, down 15% from March 31, 2015.

  • Decreased net loan charge-offs to average loans, annualized, to 22 basis points for the first quarter of 2016, down 56% from the first quarter of 2015.

  • Consummated The National Bank & Trust Company of Sycamore transaction on March 8, 2016, adding $680 million in assets and $700 million in trust assets under management.

"Performance for the quarter was solid, reflecting consistent execution across our business lines," said Michael L. Scudder, President and Chief Executive Officer of First Midwest Bancorp, Inc. "Our core earnings per share improved by 4% to $0.27 as compared to first quarter 2015, benefiting from earning asset and revenue growth as well as controlled operating expenses. Our acquisition of The National Bank & Trust Company of Sycamore significantly strengthened our balance sheet and expanded our wealth management presence, further adding to our underlying business momentum."

Mr. Scudder concluded, "A broadly slowing global economy has added uncertainty to market expectations as to the size and pace of further changes in interest rates. Against this backdrop, our priorities remain focused on strengthening our lines of business and efficiently growing and diversifying revenues. As we look ahead, we remain focused on helping our clients achieve financial success. It is this relationship centered focus combined with our strong capital foundation that leaves us well positioned to pursue opportunities to grow and perform for our shareholders."

RECENT EVENTS

The National Bank & Trust Company of Sycamore

On March 8, 2016, the Company consummated the acquisition of NI Bancshares Corporation ("NI Bancshares"), the holding company for The National Bank & Trust Company of Sycamore. With the acquisition, the Company obtained ten banking offices in northern Illinois, and added approximately $400 million in loans and $600 million in deposits. In addition, the Company acquired over $700 million in trust assets under management, which increased the Company's trust assets under management by approximately 10%. The merger consideration totaled $70.1 million and consisted of $54.9 million in Company common stock and $15.2 million in cash. The conversion of operating systems is substantially complete.

 
OPERATING PERFORMANCE
 
Net Interest Income and Margin Analysis
(Dollar amounts in thousands)
 
    Quarters Ended
    March 31, 2016   December 31, 2015   March 31, 2015
    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   $ 241,645   $ 342     0.57   $ 587,112   $ 530     0.36   $ 522,232   $ 398     0.31
Securities (1)     1,495,462     9,998     2.67     1,260,167     9,855     3.13     1,218,117     10,411     3.42
Federal Home Loan Bank ("FHLB") and Federal Reserve Bank ("FRB") stock     39,773     159     1.60     38,926     371     3.81     37,822     357     3.78
Loans (1)(2)     7,346,035     79,356     4.34     7,013,586     76,405     4.32     6,740,399     74,186     4.46
  Total interest-earning assets (1)     9,122,915     89,855     3.96     8,899,791     87,161     3.89     8,518,570     85,352     4.06
Cash and due from banks     133,268                 131,589                 124,730            
Allowance for loan and covered loan losses     (75,654 )               (74,823 )               (73,484 )          
Other assets     876,316                 865,873                 891,925            
    Total assets   $ 10,056,845               $ 9,822,430               $ 9,461,741            
Liabilities and Stockholders' Equity:                                                      
Interest-bearing core deposits (3)   $ 4,607,738     948     0.08   $ 4,471,645     930     0.08   $ 4,313,802     927     0.09
Time deposits     1,183,463     1,437     0.49     1,152,895     1,341     0.46     1,266,562     1,598     0.51
Borrowed funds     303,232     1,316     1.75     167,120     1,250     2.97     127,571     18     0.06
Senior and subordinated debt     201,253     3,133     6.26     201,168     3,134     6.18     200,910     3,144     6.35
  Total interest-bearing liabilities     6,295,686     6,834     0.44     5,992,828     6,655     0.44     5,908,845     5,687     0.39
Demand deposits (3)     2,463,017                 2,560,604                 2,312,431            
  Total funding sources     8,758,703                 8,553,432                 8,221,276            
Other liabilities     119,554                 114,492                 125,703            
Stockholders' equity - common     1,178,588                 1,154,506                 1,114,762            
    Total liabilities and stockholders' equity   $ 10,056,845               $ 9,822,430               $ 9,461,741            
Tax-equivalent net interest income/margin (1)           83,021     3.66           80,506     3.59           79,665     3.79
Tax-equivalent adjustment           (2,307 )               (2,494 )               (2,883 )    
  Net interest income (GAAP)         $ 80,714               $ 78,012               $ 76,782      
                                                       
(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"), which totaled $28.4 million, $30.8 million, and $62.8 million at March 31, 2016, December 31, 2015, and March 31, 2015, respectively.
(3) See the Deposit Composition table for further average balance detail by category.
   

For the first quarter of 2016, total average interest-earning assets rose $223.1 million from the fourth quarter of 2015 and $604.3 million from the first quarter of 2015. The increase from both prior periods was driven by organic loan growth, purchased securities, and assets acquired in the NI Bancshares transaction during first quarter of 2016.

Average funding sources increased by $205.3 million from the fourth quarter of 2015 and $537.4 million from the first quarter of 2015. Compared to both prior periods presented, the increase resulted primarily from deposits acquired from both the NI Bancshares transaction late in the first quarter of 2016 and the Peoples Bancorp, Inc. ("Peoples") transaction late in the fourth quarter of 2015, and the addition of $262.5 million of FHLB advances during the first quarter of 2016.

Tax-equivalent net interest margin for the current quarter was 3.66%, growing 7 basis points from the fourth quarter of 2015 and decreasing 13 basis points from the first quarter of 2015. Compared to the fourth quarter of 2015, the increase in tax-equivalent net interest margin was due primarily to the reinvestment of other interest-earning assets into higher yielding loans and securities. Tax-equivalent net interest margin decreased compared to the first quarter of 2015 due primarily to lower accretion on acquired loans, lower covered loan income, and the continued shift to floating rate loans, which more than offset the redeployment of other interest-earning assets into higher yielding loans and securities.

Net interest income increased by 3.5% and 5.1% from the fourth and first quarters of 2015, respectively, reflecting the increase in average loans of 4.7% and 9.0% from the same periods, respectively.

Acquired loan accretion contributed $1.4 million, $1.3 million, and $2.3 million to net interest income for the first quarter of 2016, the fourth quarter of 2015, and the first quarter of 2015, respectively.

   
Fee-based Revenues and Total Noninterest Income Analysis  
(Dollar amounts in thousands)  
   
    Quarters Ended   March 31, 2016
Percent Change from
 
    March 31,
 2016
  December 31,
 2015
  March 31,
 2015
  December 31,
 2015
    March 31,
 2015
 
Service charges on deposit accounts   $ 9,473   $ 10,303   $ 9,271   (8.1 )   2.2  
Wealth management fees     7,559     7,493     7,014   0.9     7.8  
Card-based fees     6,718     6,761     6,402   (0.6 )   4.9  
Merchant servicing fees     3,028     2,929     2,665   3.4     13.6  
Mortgage banking income     1,368     1,777     1,123   (23.0 )   21.8  
Other service charges, commissions, and fees     5,448     4,664     2,166   16.8     151.5  
  Total fee-based revenues     33,594     33,927     28,641   (1.0 )   17.3  
Other income     1,445     1,729     1,948   (16.4 )   (25.8 )
Net securities gains     887     822     512   7.9     73.2  
  Total noninterest income   $ 35,926   $ 36,478   $ 31,101   (1.5 )   15.5  
                               

Total fee-based revenues of $33.6 million decreased 1.0% from the fourth quarter of 2015 and grew 17.3% compared to the first quarter of 2015, reflecting growth across all categories. Compared to the fourth quarter of 2015, growth in income resulted primarily from the sales of capital market products within other service charges, commissions, and fees and from services provided to customers acquired from the NI Bancshares transaction late in the first quarter of 2016. These increases were offset by the normal seasonal decline in service charges on deposit accounts and the reduction in mortgage banking income.

Continued sales of fiduciary and investment advisory services to new and existing customers drove the rise in wealth management fees compared to the first quarter of 2015. In addition, the NI Bancshares transaction, which added approximately $700.0 million in trust assets under management, contributed approximately $260,000 to wealth management fees in the first quarter of 2016.

Mortgage banking income resulted from sales of $38.7 million of 1-4 family mortgage loans in the secondary market during the first quarter of 2016, compared to $51.4 million in the fourth quarter of 2015 and $34.5 million in the first quarter of 2015.

The increases in other service charges, commissions, and fees compared to both prior periods presented were primarily due to the sales of capital market products to commercial clients. Gains realized on the sale of equipment financing contracts originated by First Midwest Equipment Finance also drove the increase compared to the first quarter of 2015.

Total noninterest income of $35.9 million was consistent with the fourth quarter of 2015 and increased 15.5% from the first quarter of 2015.

   
Noninterest Expense Analysis  
(Dollar amounts in thousands)  
   
    Quarters Ended   March 31, 2016
Percent Change from
 
    March 31,
 2016
  December 31,
 2015
  March 31,
 2015
  December 31,
 2015
  March 31,
 2015
 
Salaries and employee benefits:                            
  Salaries and wages   $ 36,296   $ 34,295   $ 32,794   5.8   10.7  
  Retirement and other employee benefits.     8,298     8,925     7,922   (7.0 ) 4.7  
    Total salaries and employee benefits     44,594     43,220     40,716   3.2   9.5  
Net occupancy and equipment expense     9,697     9,256     10,436   4.8   (7.1 )
Professional services     5,920     6,117     5,109   (3.2 ) 15.9  
Technology and related costs     3,701     3,694     3,687   0.2   0.4  
Merchant card expense     2,598     2,495     2,197   4.1   18.3  
Advertising and promotions     1,589     2,211     1,223   (28.1 ) 29.9  
Cardholder expenses     1,359     1,329     1,268   2.3   7.2  
Net other real estate owned ("OREO") expense     664     926     1,204   (28.3 ) (44.9 )
Other expenses     7,447     7,525     6,817   (1.0 ) 9.2  
  Total noninterest expense excluding certain significant transactions (1)     77,569     76,773     72,657   1.0   6.8  
Acquisition and integration related expenses     5,020     1,389     --   261.4   N/M  
Property valuation adjustments     --     8,581     --   N/M   --  
      Total noninterest expense   $ 82,589   $ 86,743   $ 72,657   (4.8 ) 13.7  
Efficiency ratio (2)     64.8 %   65.1 %   64.5 %        
                             

N/M - Not meaningful.

   
(1) In management's view, total noninterest expense excluding certain significant transactions are meaningful to the Company, as well as analysts and investors, in assessing the Company's operating expenses and facilitating comparisons with the prior periods presented.
(2) 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 bank-owned life insurance ("BOLI") income. In addition, acquisition and integration related expenses of $5.0 million are excluded from the efficiency ratio for the first quarter of 2016. For the fourth quarter of 2015, property valuation adjustments of $8.6 million and acquisition and integration related expenses of $1.4 million are excluded from the efficiency ratio. See the accompanying Non-GAAP Reconciliations for details on the calculation of the efficiency ratio.
   

Total noninterest expense increased by 1.0% from the fourth quarter of 2015 and 6.8% compared to the first quarter of 2015, excluding acquisition and integration related expenses and property valuation adjustments. The increase compared to the first quarter of 2015 was driven primarily by salaries and employee benefits and professional services costs associated with merit increases and organizational growth needs, as well as the acquisitions of Peoples and NI Bancshares.

Compared to both prior periods presented, total noninterest expense was impacted by the costs of operating the 10 banking locations acquired in the NI Bancshares transaction late in the first quarter of 2016, and the full quarter impact of the 2 banking locations acquired in the Peoples transaction late in the fourth quarter of 2015. These costs primarily occurred within salaries and employee benefits expense and other expenses.

During the fourth quarter of 2015, property valuation adjustments of $8.6 million were recognized on twelve closed branches and seven parcels of land as part of the Company's strategic branch initiatives.

 
LOAN PORTFOLIO AND ASSET QUALITY
 
Loan Portfolio Composition
(Dollar amounts in thousands)
 
    As Of   March 31, 2016
Percent Change From
 
    March 31, 2016                    
    Legacy   Acquired (1)   Total   December 31,
2015
  March 31, 2015   December 31, 2015     March 31, 2015  
Commercial and industrial   $ 2,584,800   $ 49,591   $ 2,634,391   $ 2,524,726   $ 2,318,058   4.3     13.6  
Agricultural     393,131     29,100     422,231     387,440     368,836   9.0     14.5  
Commercial real estate:                                          
  Office, retail, and industrial.     1,457,692     108,703     1,566,395     1,395,454     1,443,562   12.2     8.5  
  Multi-family     520,277     41,788     562,065     528,324     560,800   6.4     0.2  
  Construction     258,546     2,197     260,743     216,882     191,104   20.2     36.4  
  Other commercial real estate     977,335     82,967     1,060,302     931,190     881,026   13.9     20.3  
    Total commercial real estate     3,213,850     235,655     3,449,505     3,071,850     3,076,492   12.3     12.1  
    Total corporate loans     6,191,781     314,346     6,506,127     5,984,016     5,763,386   8.7     12.9  
Home equity     668,527     14,644     683,171     653,468     599,543   4.5     13.9  
1-4 family mortgages     370,457     20,430     390,887     355,854     285,758   9.8     36.8  
Installment     167,578     46,401     213,979     137,602     92,834   55.5     130.5  
    Total consumer loans     1,206,562     81,475     1,288,037     1,146,924     978,135   12.3     31.7  
Covered loans     28,391     --     28,391     30,775     62,830   (7.7 )   (54.8 )
    Total loans   $ 7,426,734   $ 395,821   $ 7,822,555   $ 7,161,715   $ 6,804,351   9.2     15.0  
                                           
(1) Amount represents loans acquired in the NI Bancshares transaction which was completed late in the first quarter of 2016.
   

Excluding loans acquired in the NI Bancshares transaction of $395.8 million, total loans grew by 3.7% from December 31, 2015 and 9.1% from March 31, 2015. Compared to December 31, 2015, loan growth was driven primarily by strong sales production from the corporate and consumer lending teams. Overall, the mix of loans remained consistent with both prior periods presented.

Compared to both prior periods presented, growth in corporate loans reflects the strong sales performance across diversified commercial real estate categories, as well as the continued expansion into select sector-based lending areas such as healthcare, structured finance, asset-based lending, and equipment financing. The rise in consumer loans compared to both prior periods presented reflects the continued expansion of online installment lending channels, as well as the addition of shorter-duration, floating rate home equity loans and 1-4 family mortgages.

   
Asset Quality  
(Dollar amounts in thousands)  
   
    As of     March 31, 2016
Percent Change from
 
    March 31,
 2016
    December 31,
 2015
    March 31,
 2015
    December 31,
2015
    March 31,
2015
 
Asset quality, excluding covered loans and covered OREO                                    
Non-accrual loans   $ 31,383     $ 28,875     $ 48,077     8.7     (34.7 )
90 days or more past due loans     5,483       2,883       3,564     90.2     53.8  
  Total non-performing loans     36,866       31,758       51,641     16.1     (28.6 )
Accruing troubled debt restructurings ("TDRs")     2,702       2,743       3,581     (1.5 )   (24.5 )
OREO     29,238       27,349       26,042     6.9     12.3  
  Total non-performing assets   $ 68,806     $ 61,850     $ 81,264     11.2     (15.3 )
30-89 days past due loans   $ 29,826     $ 16,329     $ 18,631              
Non-accrual loans to total loans     0.40 %     0.40 %     0.71 %            
Non-performing loans to total loans     0.47 %     0.45 %     0.77 %            
Non-performing assets to total loans plus OREO     0.88 %     0.86 %     1.20 %            
Allowance for Credit Losses                                    
Allowance for loan losses   $ 77,150     $ 73,630     $ 70,990              
Reserve for unfunded commitments     1,225       1,225       1,816              
  Total allowance for credit losses   $ 78,375     $ 74,855     $ 72,806              
Allowance for credit losses to total loans (1)     1.00 %     1.05 %     1.07 %            
Allowance for credit losses to loans, excluding acquired loans     1.11 %     1.11 %     1.19 %            
Allowance for credit losses to non-accrual loans, excluding covered loans     244.74 %     253.57 %     139.62 %            
                                     
(1) This ratio includes acquired loans that are recorded at fair value through an acquisition adjustment, which incorporates credit risk as of the acquisition date with no allowance for credit losses being established at that time. As the acquisition adjustment is accreted into income over future periods, an allowance for credit losses on acquired loans is established as necessary to reflect credit deterioration.
   

Total non-performing assets represented 0.88% of total loans and OREO at March 31, 2016, consistent with 0.86% at December 31, 2015 and down from 1.20% at March 31, 2015.

Loans 30-89 days past due to total loans was 0.38% at March 31, 2016 compared to 0.23% and 0.28% at December 31, 2015 and March 31, 2015, respectively. The increase in loans 30-89 days past due compared to the fourth quarter of 2015 was driven primarily by normal fluctuations and loans acquired in the NI Bancshares transaction that are currently in the process of renewal.

   
Charge-Off Data  
(Dollar amounts in thousands)  
   
    Quarters Ended  
    March 31,
 2016
    % of
Total
  December 31,
 2015
    % of
Total
    March 31,
 2015
    % of
Total
 
Net loan charge-offs (1):                                        
  Commercial and industrial   $ 1,396     34.3   $ 1,781     52.8     $ 6,657     80.6  
  Agricultural     --     --     --     --       --     --  
  Office, retail, and industrial     421     10.3     267     7.9       (166 )   (2.0 )
  Multi-family     179     4.4     (27 )   (0.8 )     24     0.3  
  Construction     111     2.7     105     3.2       (17 )   (0.2 )
  Other commercial real estate     1,294     31.8     110     3.3       1,051     12.7  
  Consumer     672     16.5     1,134     33.6       479     5.8  
  Covered     --     --     --     --       228     2.8  
    Total net loan charge-offs   $ 4,073     100.0   $ 3,370     100.0     $ 8,256     100.0  
                                         
Net loan charge-offs to average loans, annualized     0.22 %         0.19 %           0.50 %      
                                         
(1) Amounts represent charge-offs, net of recoveries.
   
   
DEPOSIT PORTFOLIO  
   
Deposit Composition  
(Dollar amounts in thousands)  
   
    Average for Quarters Ended   March 31, 2016
Percent Change from
 
    March 31,
 2016
  December 31,
 2015
  March 31,
 2015
  December 31,
2015
    March 31,
2015
 
Demand deposits   $ 2,463,017   $ 2,560,604   $ 2,312,431   (3.8 )   6.5  
Savings deposits     1,575,174     1,483,962     1,426,546   6.1     10.4  
NOW accounts     1,448,666     1,411,425     1,365,494   2.6     6.1  
Money market accounts     1,583,898     1,576,258     1,521,762   0.5     4.1  
  Core deposits     7,070,755     7,032,249     6,626,233   0.5     6.7  
Time deposits and other     1,183,463     1,152,895     1,266,562   2.7     (6.6 )
    Total deposits   $ 8,254,218   $ 8,185,144   $ 7,892,795   0.8     4.6  
                               

Average core deposits of $7.1 billion for the first quarter of 2016 increased by 0.5% and 6.7% compared to the fourth quarter of 2015 and the first quarter of 2015, respectively. The rise in average core deposits compared to the fourth quarter of 2015 resulted primarily from $443.1 million in core deposits assumed in the NI Bancshares transaction, which contributed $110.0 million to average core deposits as the transaction was completed late in the first quarter of 2016. This increase more than offset the normal seasonal decline in commercial deposits. Compared to the first quarter of 2015, the rise in average core deposits was driven by growth, the NI Bancshares transaction, and the full quarter impact of deposits assumed in the December of 2015 Peoples acquisition.

   
CAPITAL MANAGEMENT  
   
Capital Ratios  
   
    As of  
    March 31,
 2016
    December 31,
 2015
    March 31,
 2015
 
Company regulatory capital ratios:  
  Total capital to risk-weighted assets   10.64 %   11.15 %   11.23 %
  Tier 1 capital to risk-weighted assets   9.81 %   10.28 %   10.35 %
  Tier 1 common capital to risk-weighted assets   9.30 %   9.73 %   9.79 %
  Tier 1 leverage to average assets   9.56 %   9.40 %   9.32 %
Company tangible common equity ratios (1)(2):                  
  Tangible common equity to tangible assets   8.25 %   8.59 %   8.54 %
  Tangible common equity, excluding other comprehensive loss, to tangible assets   8.39 %   8.89 %   8.68 %
  Tangible common equity to risk-weighted assets   9.04 %   9.29 %   9.51 %
                   
(1) Ratio is not subject to formal Federal Reserve regulatory guidance.
(2) 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.
   

Compared to both prior year periods presented, the Company's regulatory capital ratios related to end-of-period risk-weighted assets decreased due to organic loan growth and the NI Bancshares acquisition completed late in the first quarter of 2016.

The Board of Directors approved a quarterly cash dividend of $0.09 per common share during the first quarter of 2016, which is consistent with the quarterly dividend paid to shareholders in the fourth quarter of 2015 and 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, April 20, 2016 at 11:00 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 ID 10084141 beginning one hour after completion of the live call until 9:00 A.M. (ET) on April 28, 2016. 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," "continue," "look forward," or "assume" 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, 2015, 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 is a relationship-focused financial institution and one of the largest independent bank holding companies based in the Midwest. First Midwest's principal subsidiary, First Midwest Bank, and its affiliates provide a full range of commercial, retail, wealth management, trust, and private banking products and services through over 110 locations in metropolitan Chicago, northwest Indiana, central and western Illinois, and eastern Iowa. First Midwest's website is www.firstmidwest.com.

Accompanying Unaudited Selected Financial Information

   
Consolidated Statements of Financial Condition (Unaudited)
(Dollar amounts in thousands)
 
       
    As of  
    March 31,
2016
  December 31,
2015
  September 30,
2015
  June 30,
2015
  March 31,
2015
 
Period-End Balance Sheet                                
Assets                                
Cash and due from banks   $ 135,049   $ 114,587   $ 125,279   $ 135,546   $ 126,450  
Interest-bearing deposits in other banks     171,312     266,615     822,264     811,287     492,607  
Trading securities, at fair value     17,408     16,894     17,038     18,172     18,374  
Securities available-for-sale, at fair value     1,625,579     1,306,636     1,151,418     1,142,407     1,151,603  
Securities held-to-maturity, at amortized cost     21,051     23,152     23,723     24,292     25,861  
FHLB and FRB stock     40,916     39,306     38,748     38,748     38,748  
Loans:                                
  Commercial and industrial     2,634,391     2,524,726     2,392,860     2,366,056     2,318,058  
  Agricultural     422,231     387,440     393,732     377,410     368,836  
  Commercial real estate:                                
    Office, retail, and industrial     1,566,395     1,395,454     1,414,077     1,432,502     1,443,562  
    Multi-family     562,065     528,324     539,308     557,947     560,800  
    Construction     260,743     216,882     192,086     190,970     191,104  
    Other commercial real estate     1,060,302     931,190     869,748     871,119     881,026  
  Home equity     683,171     653,468     647,223     599,320     599,543  
  1-4 family mortgages     390,887     355,854     294,261     283,562     285,758  
  Installment     213,979     137,602     131,185     113,382     92,834  
  Covered loans     28,391     30,775     51,219     57,917     62,830  
    Total loans     7,822,555     7,161,715     6,925,699     6,850,185     6,804,351  
Allowance for loan losses     (77,150 )   (73,630 )   (72,500 )   (71,463 )   (70,990 )
  Net loans     7,745,405     7,088,085     6,853,199     6,778,722     6,733,361  
OREO     29,649     27,782     32,035     28,230     33,351  
Premises, furniture, and equipment, net     141,323     122,278     127,443     128,621     128,698  
Investment in BOLI     218,873     209,601     208,666     207,814     207,190  
Goodwill and other intangible assets     369,979     339,277     331,250     332,223     333,202  
Accrued interest receivable and other assets     212,378     178,463     203,983     216,965     209,151  
  Total assets   $ 10,728,922   $ 9,732,676   $ 9,935,046   $ 9,863,027   $ 9,498,596  
Liabilities and Stockholders' Equity                                
Noninterest-bearing deposits   $ 2,627,530   $ 2,414,454   $ 2,671,793   $ 2,508,316   $ 2,339,492  
Interest-bearing deposits     6,153,288     5,683,284     5,624,657     5,704,355     5,575,187  
  Total deposits     8,780,818     8,097,738     8,296,450     8,212,671     7,914,679  
Borrowed funds     387,411     165,096     169,943     189,036     131,200  
Senior and subordinated debt     201,293     201,208     201,123     201,039     200,954  
Accrued interest payable and other liabilities     134,835     122,366     119,861     135,324     135,813  
Stockholders' equity     1,224,565     1,146,268     1,147,669     1,124,957     1,115,950  
  Total liabilities and stockholders' equity   $ 10,728,922   $ 9,732,676   $ 9,935,046   $ 9,863,027   $ 9,498,596  
Stockholders' equity, excluding accumulated other comprehensive income ("AOCI")   $ 1,239,606   $ 1,174,657   $ 1,163,487   $ 1,146,189   $ 1,128,755  
Stockholders' equity, common     1,224,565     1,146,268     1,147,669     1,124,957     1,115,950  
                                 
 
Condensed Consolidated Statements of Income (Unaudited)
(Dollar amounts in thousands)
                     
    Quarters Ended
    March 31,
2016
  December 31,
2015
  September 30,
2015
  June 30,
2015
  March 31,
2015
Income Statement                              
Interest income   $ 87,548   $ 84,667   $ 84,292   $ 84,556   $ 82,469
Interest expense     6,834     6,655     6,390     5,654     5,687
   Net interest income     80,714     78,012     77,902     78,902     76,782
Provision for loan losses     7,593     4,500     4,100     6,000     6,552
      Net interest income after provision for loan losses     73,121     73,512     73,802     72,902     70,230
Noninterest Income                              
    Service charges on deposit accounts     9,473     10,303     10,519     9,886     9,271
    Wealth management fees     7,559     7,493     7,222     7,433     7,014
    Card-based fees     6,718     6,761     6,868     6,953     6,402
    Merchant servicing fees     3,028     2,929     3,207     2,938     2,665
    Mortgage banking income     1,368     1,777     1,402     1,439     1,123
    Other service charges, commissions, and fees     5,448     4,664     3,900     2,924     2,166
      Total fee-based revenues     33,594     33,927     33,118     31,573     28,641
    Other income     1,445     1,437     1,372     1,900     1,948
    Net securities gains     887     822     524     515     512
    Gains on sales of properties     --     292     --     --     --
      Total noninterest income     35,926     36,478     35,014     33,988     31,101
Noninterest Expense                              
  Salaries and employee benefits:                              
    Salaries and wages     36,296     34,295     33,554     33,096     32,794
    Retirement and other employee benefits     8,298     8,925     7,807     7,198     7,922
      Total salaries and employee benefits     44,594     43,220     41,361     40,294     40,716
    Net occupancy and equipment expense     9,697     9,256     9,406     9,622     10,436
    Professional services     5,920     6,117     6,172     5,322     5,109
    Technology and related costs     3,701     3,694     3,673     3,527     3,687
    Merchant card expense     2,598     2,495     2,722     2,472     2,197
    Advertising and promotions     1,589     2,211     1,828     2,344     1,223
    Cardholder expenses     1,359     1,329     1,354     1,292     1,268
    Net OREO expense     664     926     1,290     1,861     1,204
    Other expenses     7,447     7,525     6,559     6,717     6,817
    Acquisition and integration related expenses     5,020     1,389     --     --     --
    Property valuation adjustments     --     8,581     --     --     --
      Total noninterest expense     82,589     86,743     74,365     73,451     72,657
    Income before income tax expense     26,458     23,247     34,451     33,439     28,674
    Income tax expense     8,496     6,923     11,167     10,865     8,792
      Net income   $ 17,962   $ 16,324   $ 23,284   $ 22,574   $ 19,882
Net income applicable to common shares   $ 17,750   $ 16,145   $ 23,058   $ 22,325   $ 19,654
Net income applicable to common shares, excluding certain significant transactions (1)   $ 20,762   $ 22,127   $ 23,058   $ 22,325   $ 19,654
                               
Footnotes to Condensed Consolidated Statements of Income 
(1) Certain significant transactions include acquisition and integration related expenses associated with completed and pending acquisitions and property valuation adjustments related to strategic branch initiatives.
   
   
Selected Financial Information (Unaudited)
(Amounts in thousands, except per share data)
 
                     
  As of or for the  
  Quarters Ended  
  March 31,
2016
  December 31,
2015
  September 30,
2015
  June 30,
2015
  March 31,
2015
 
Earnings Per Share                              
Basic earnings per common share ("EPS") (1) $ 0.23   $ 0.21   $ 0.30   $ 0.29   $ 0.26  
Diluted EPS (1) $ 0.23   $ 0.21   $ 0.30   $ 0.29   $ 0.26  
Diluted EPS, excluding certain significant transactions (1) (6) $ 0.27   $ 0.29   $ 0.30   $ 0.29   $ 0.26  
                               
Common Stock and Related Per Common Share Data                              
Book value $ 15.06   $ 14.70   $ 14.72   $ 14.43   $ 14.31  
Tangible book value $ 10.51   $ 10.35   $ 10.47   $ 10.17   $ 10.04  
Dividends declared per share $ 0.09   $ 0.09   $ 0.09   $ 0.09   $ 0.09  
Closing price at period end $ 18.02   $ 18.43   $ 17.54   $ 18.97   $ 17.37  
Closing price to book value   1.2     1.3     1.2     1.3     1.2  
Period end shares outstanding   81,298     77,952     77,942     77,961     77,957  
Period end treasury shares   9,976     10,276     10,286     10,267     10,271  
Common dividends $ 7,228   $ 7,017   $ 7,014   $ 7,022   $ 7,011  
                               
Key Ratios/Data                              
Return on average common equity (1) (2)   6.06 %   5.55 %   8.06 %   7.97 %   7.15 %
Return on average tangible common equity (1) (2)   8.87 %   8.06 %   11.68 %   11.62 %   10.52 %
Return on average tangible common equity, excluding certain significant transactions (1) (2) (6)   10.32 %   10.94 %   11.68 %   11.62 %   10.52 %
Return on average assets (2)   0.72 %   0.66 %   0.94 %   0.94 %   0.85 %
Efficiency ratio (1)   64.82 %   65.11 %   63.20 %   61.70 %   64.46 %
Net interest margin (3)   3.66 %   3.59 %   3.58 %   3.76 %   3.79 %
Loans to deposits   89.09 %   88.44 %   83.48 %   83.41 %   85.97 %
Yield on average interest-earning assets (3)   3.96 %   3.89 %   3.86 %   4.02 %   4.06 %
Cost of funds   0.44 %   0.44 %   0.42 %   0.38 %   0.39 %
Net noninterest expense to average assets   1.90 %   2.08 %   1.60 %   1.66 %   1.80 %
Effective income tax rate   32.11 %   29.78 %   32.41 %   32.50 %   30.66 %
                               
Capital Ratios                              
Total capital to risk-weighted assets (1)   10.64 %   11.15 %   11.43 %   11.37 %   11.23 %
Tier 1 capital to risk-weighted assets (1)   9.81 %   10.28 %   10.55 %   10.49 %   10.35 %
Tier 1 common capital to risk-weighted assets (CET1) (1)   9.30 %   9.73 %   10.00 %   9.93 %   9.79 %
Tier 1 leverage to average assets (1)   9.56 %   9.40 %   9.29 %   9.34 %   9.32 %
Tangible common equity to tangible assets (1)   8.25 %   8.59 %   8.50 %   8.32 %   8.54 %
Tangible common equity, excluding AOCI, to tangible assets (1)   8.39 %   8.89 %   8.67 %   8.54 %   8.68 %
Tangible common equity to risk-weighted assets (1)   9.04 %   9.29 %   9.70 %   9.55 %   9.51 %
   
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  
  March 31,   December 31,   September 30,   June 30,   March 31,  
  2016   2015   2015   2015   2015  
Asset Quality Performance Data                              
Non-performing assets(4)                              
Commercial and industrial $ 5,364   $ 5,587   $ 6,438   $ 11,100   $ 12,913  
Agricultural   295     355     112     317     358  
Commercial real estate:                              
  Office, retail, and industrial   10,910     6,875     6,961     12,599     11,363  
  Multi-family   410     796     1,046     1,287     700  
  Construction   778     905     3,332     4,940     7,488  
  Other commercial real estate   5,555     5,611     5,898     5,513     5,915  
Consumer   8,071     8,746     8,521     9,253     9,340  
  Total non-accrual loans   31,383     28,875     32,308     45,009     48,077  
90 days or more past due loans   5,483     2,883     4,559     2,744     3,564  
  Total non-performing loans   36,866     31,758     36,867     47,753     51,641  
Accruing troubled debt restructurings   2,702     2,743     2,771     3,067     3,581  
Other real estate owned   29,238     27,349     31,129     24,471     26,042  
  Total non-performing assets $ 68,806   $ 61,850   $ 70,767   $ 75,291   $ 81,264  
30-89 days past due loans (4) $ 29,826   $ 16,329   $ 28,629   $ 28,625   $ 18,631  
Allowance for credit losses                              
Allowance for loan losses $ 75,582   $ 71,992   $ 68,384   $ 66,602   $ 65,311  
Allowance for covered loan losses   1,568     1,638     4,116     4,861     5,679  
Reserve for unfunded commitments   1,225     1,225     1,225     1,816     1,816  
Total allowance for credit losses $ 78,375   $ 74,855   $ 73,725   $ 73,279   $ 72,806  
Provision for loan losses $ 7,593   $ 4,500   $ 4,100   $ 6,000   $ 6,552  
Net charge-offs by category                              
Commercial and industrial $ 1,396   $ 1,781   $ 1,601   $ 3,273   $ 6,657  
Agricultural   --     --     --     --     --  
Commercial real estate:                              
  Office, retail, and industrial   421     267     457     1,862     (166 )
  Multi-family   179     (27 )   67     466     24  
  Construction   111     105     (114 )   (188 )   (17 )
  Other commercial real estate   1,294     110     92     (603 )   1,051  
Consumer   672     1,134     959     432     479  
Covered loans   --     --     1     285     228  
    Total net charge-offs $ 4,073   $ 3,370   $ 3,063   $ 5,527   $ 8,256  
Total recoveries included above $ 1,116   $ 1,031   $ 1,294   $ 2,579   $ 1,797  
   
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  
    March 31,   December 31,   September 30,   June 30,   March 31,  
    2016   2015   2015   2015   2015  
Asset Quality ratios(4)                      
Non-accrual loans to total loans   0.40 % 0.40 % 0.47 % 0.66 % 0.71 %
Non-performing loans to total loans   0.47 % 0.45 % 0.54 % 0.70 % 0.77 %
Non-performing assets to total loans plus OREO   0.88 % 0.86 % 1.02 % 1.10 % 1.20 %
Non-performing assets to tangible common equity plus allowance for credit losses   7.39 % 7.03 % 7.99 % 8.74 % 9.56 %
Non-accrual loans to total assets   0.29 % 0.30 % 0.33 % 0.46 % 0.51 %
Allowance for credit losses and net charge-off ratios                      
Allowance for credit losses to total loans (5)   1.00 % 1.05 % 1.06 % 1.07 % 1.07 %
Allowance for credit losses to loans, excluding acquired loans   1.11 % 1.11 % 1.14 % 1.16 % 1.19 %
Allowance for credit losses to non-accrual loans (4)   244.74 % 253.57 % 215.45 % 152.01 % 139.62 %
Allowance for credit losses to non-performing loans (4)   208.34 % 230.55 % 188.81 % 143.27 % 129.99 %
Net charge-offs to average loans (2)   0.22 % 0.19 % 0.18 % 0.33 % 0.50 %
                       
Footnotes to Selected Financial Information
(1) See the Non-GAAP Reconciliations section for detailed calculation.
(2) Annualized based on the actual number of days for each period presented.
(3) Tax equivalent basis reflects federal and state tax benefits.
(4) Excludes covered loans and covered OREO.
(5) This ratio includes acquired loans that are recorded at fair value through an acquisition adjustment, which incorporates credit risk, as of the acquisition date with no allowance for credit losses being established at that time. As the acquisition adjustment is accreted into income over future periods, an allowance for credit losses is established on acquired loans as necessary to reflect credit deterioration.
(6) Certain significant transactions include acquisition and integration related expenses associated with completed and pending acquisitions and property valuation adjustments related to strategic branch initiatives.
   
   
Non-GAAP Reconciliations (Unaudited)
(Amounts in thousands, except per share data)
 
                       
    Quarters Ended  
    March 31,   December 31,   September 30,   June 30,   March 31,  
    2016   2015   2015   2015   2015  
Earnings Per Share                                
Net income   $ 17,962   $ 16,324   $ 23,284   $ 22,574   $ 19,882  
Net income applicable to non-vested restricted shares     (212 )   (179 )   (226 )   (249 )   (228 )
  Net income applicable to common shares     17,750     16,145     23,058     22,325     19,654  
Tax-equivalent acquisition and integration related expenses (2)     3,012     833     --     --     --  
Tax-equivalent property valuation adjustments (2)     --     5,149     --     --     --  
  Net income applicable to common shares, excluding certain significant transactions (1)   $ 20,762   $ 22,127   $ 23,058   $ 22,325   $ 19,654  
Weighted-average common shares outstanding:                                
  Weighted-average common shares outstanding (basic)     77,980     77,121     77,106     77,089     76,918  
  Dilutive effect of common stock equivalents     12     13     13     12     12  
    Weighted-average diluted common shares outstanding     77,992     77,134     77,119     77,101     76,930  
Basic EPS   $ 0.23   $ 0.21   $ 0.30   $ 0.29   $ 0.26  
Diluted EPS   $ 0.23   $ 0.21   $ 0.30   $ 0.29   $ 0.26  
Diluted EPS, excluding certain significant transactions (1)   $ 0.27   $ 0.29   $ 0.30   $ 0.29   $ 0.26  
Anti-dilutive shares not included in the computation of diluted EPS     608     735     751     768     948  
Efficiency Ratio Calculation                                
Noninterest expense   $ 82,589   $ 86,743   $ 74,365   $ 73,451   $ 72,657  
Less:                 --              
  Net OREO expense     (664 )   (926 )   (1,290 )   (1,861 )   (1,204 )
  Acquisition and integration related expenses     (5,020 )   (1,389 )   --     --     --  
  Property valuation adjustments     --     (8,581 )   --     --     --  
    Total   $ 76,905   $ 75,847   $ 73,075   $ 71,590   $ 71,453  
Tax-equivalent net interest income (2)   $ 83,021   $ 80,506   $ 80,511   $ 81,595   $ 79,665  
Fee-based revenues     33,594     33,927     33,118     31,573     28,641  
Add:                                
  Other income, excluding BOLI income     579     515     446     446     1,065  
  Tax-adjusted BOLI (BOLI/.6)     1,443     1,537     1,543     2,423     1,472  
    Total   $ 118,637   $ 116,485   $ 115,618   $ 116,037   $ 110,843  
Efficiency ratio     64.82 %   65.11 %   63.20 %   61.70 %   64.46 %
Tax Equivalent Net Interest Income                                
Net interest income   $ 80,714   $ 78,012   $ 77,902   $ 78,902   $ 76,782  
Tax-equivalent adjustment     2,307     2,494     2,609     2,693     2,883  
  Tax-equivalent net interest income (2)   $ 83,021   $ 80,506   $ 80,511   $ 81,595   $ 79,665  
                                 
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  
 
 
  March 31,
2016
 
 
December 31,
2015
 
 
September 30,
2015
 
 
June 30,
2015
 
 
March 31,
2015
 
 
Risk-Based Capital Data                                
Common stock   $ 913   $ 882   $ 882   $ 882   $ 882  
Additional paid-in capital     493,153     446,672     445,037     443,558     441,689  
Retained earnings     964,250     953,516     944,209     927,939     912,387  
Treasury stock, at cost     (218,710 )   (226,413 )   (226,641 )   (226,190 )   (226,203 )
Goodwill and other intangible assets     (357,895 )   (327,115 )   (318,854 )   (319,243 )   (319,635 )
Disallowed deferred tax assets     (2,956 )   (1,902 )   (2,889 )   (3,046 )   (3,354 )
  Common equity Tier 1 capital     878,755     845,640     841,744     823,900     805,766  
Trust-preferred securities     50,690     50,690     50,690     50,690     50,690  
Other disallowed deferred tax assets     (1,970 )   (2,868 )   (4,334 )   (4,568 )   (5,030 )
  Tier 1 capital     927,475     893,462     888,100     870,022     851,426  
Tier 2 capital     78,375     74,855     73,725     73,279     72,806  
  Total capital   $ 1,005,850   $ 968,317   $ 961,825   $ 943,301   $ 924,232  
Risk-weighted assets   $ 9,452,551   $ 8,687,864   $ 8,414,729   $ 8,296,679   $ 8,229,627  
Adjusted average assets   $ 9,700,671   $ 9,501,087   $ 9,559,796   $ 9,318,347   $ 9,134,320  
Total capital to risk-weighted assets     10.64 %   11.15 %   11.43 %   11.37 %   11.23 %
Tier 1 capital to risk-weighted assets     9.81 %   10.28 %   10.55 %   10.49 %   10.35 %
Tier 1 common capital to risk-weighted assets     9.30 %   9.73 %   10.00 %   9.93 %   9.79 %
Tier 1 leverage to average assets     9.56 %   9.40 %   9.29 %   9.34 %   9.32 %
Tangible Common Equity                                
Stockholders' equity   $ 1,224,565   $ 1,146,268   $ 1,147,669   $ 1,124,957   $ 1,115,950  
Less: goodwill and other intangible assets     (369,979 )   (339,277 )   (331,250 )   (332,223 )   (333,202 )
  Tangible common equity     854,586     806,991     816,419     792,734     782,748  
Less: AOCI     15,041     28,389     15,818     21,232     12,805  
  Tangible common equity, excluding AOCI   $ 869,627   $ 835,380   $ 832,237   $ 813,966   $ 795,553  
Total assets   $ 10,728,922   $ 9,732,676   $ 9,935,046   $ 9,863,027   $ 9,498,596  
Less: goodwill and other intangible assets     (369,979 )   (339,277 )   (331,250 )   (332,223 )   (333,202 )
  Tangible assets   $ 10,358,943   $ 9,393,399   $ 9,603,796   $ 9,530,804   $ 9,165,394  
Tangible common equity to tangible assets     8.25 %   8.59 %   8.50 %   8.32 %   8.54 %
Tangible common equity, excluding AOCI, to tangible assets     8.39 %   8.89 %   8.67 %   8.54 %   8.68 %
Tangible common equity to risk-weighted assets     9.04 %   9.29 %   9.70 %   9.55 %   9.51 %
                                 
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  
    March 31,   December 31,   September 30,   June 30,   March 31,  
    2016   2015   2015   2015   2015  
Return on Average Common and Tangible Common Equity                                
Net income applicable to common shares   $ 17,750   $ 16,145   $ 23,058   $ 22,325   $ 19,654  
Intangibles amortization     985     971     973     978     998  
Tax-equivalent adjustment of intangibles amortization     (394 )   (388 )   (389 )   (391 )   (399 )
  Net income applicable to common shares, excluding intangibles amortization     18,341     16,728     23,642     22,912     20,253  
Tax-equivalent acquisition and integration related expenses (2)     3,012     833     --     --     --  
Tax-equivalent property valuation adjustments (2)     --     5,149     --     --     --  
  Net income applicable to common shares, excluding intangibles amortization and certain significant transactions (1)   $ 21,353   $ 22,710   $ 23,642   $ 22,912   $ 20,253  
Average stockholders' equity   $ 1,178,588   $ 1,154,506   $ 1,134,967   $ 1,123,530   $ 1,114,762  
Less: average intangible assets     (346,549 )   (331,013 )   (331,720 )   (332,694 )   (333,684 )
  Average tangible common equity   $ 832,039   $ 823,493   $ 803,247   $ 790,836   $ 781,078  
Return on average common equity (3)     6.06 %   5.55 %   8.06 %   7.97 %   7.15 %
Return on average tangible common equity (3)     8.87 %   8.06 %   11.68 %   11.62 %   10.52 %
Return on average tangible common equity, excluding certain significant transactions (1) (3)     10.32 %   10.94 %   11.68 %   11.62 %   10.52 %
                                 
Footnotes to Non-GAAP Reconciliations
(1) Certain significant transactions include acquisition and integration related expenses associated with completed and pending acquisitions and property valuation adjustments related to strategic branch initiatives.
(2) Tax equivalent basis reflects federal and state tax benefits.
(3) Annualized based on the actual number of days for each period presented.
   

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