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First Midwest Bancorp, Inc. Announces 2016 Fourth Quarter and Full Year Results

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ITASCA, Ill., Jan. 24, 2017 (GLOBE NEWSWIRE) -- 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 fourth quarter and full year of 2016. Net income for the fourth quarter of 2016 was $20.7 million, or $0.25 per share, compared to $28.4 million, or $0.35 per share, for the third quarter of 2016, and $16.3 million, or $0.21 per share, for the fourth quarter of 2015.

Reported results included the following certain significant transactions: acquisition and integration related expenses associated with completed and pending acquisitions (all periods presented), the lease cancellation fee recognized as a result of the Company's planned 2018 corporate headquarters relocation (fourth quarter of 2016), the net gain on the sale-leaseback transaction (third quarter of 2016), and property valuation adjustments related to strategic branch initiatives (fourth quarter of 2015).

Excluding these certain significant transactions, earnings per share (1) was $0.32 for the fourth quarter of 2016, consistent with $0.32 the third quarter of 2016, and increased 10% compared to $0.29 for the fourth quarter of 2015.

FOURTH QUARTER HIGHLIGHTS

  • Generated earnings per share (1) of $0.32; up 10% from the fourth quarter of 2015, and consistent with a strong third quarter of 2016, excluding certain significant transactions.

  • Grew total loans 4% annualized from September 30, 2016.

  • Repaid $115 million of maturing senior notes with proceeds generated from the issuance of $150 million in subordinated notes late in the third quarter of 2016; absorbed approximately $1.5 million in overlapping interest costs.

  • Completed the acquisition of Standard Bancshares, Inc. on January 6, 2017, adding $1.9 billion in loans and $2.1 billion in deposits; absorbed $7.5 million in acquisition and integration related expenses in the fourth quarter of 2016.

  • Announced the decision to relocate corporate headquarters and consolidate certain centralized commercial sales platforms in 2018; absorbed approximately $1.0 million in lease cancellation fees.

FULL YEAR HIGHLIGHTS

  • Grew earnings per share to $1.14, up 9% from 2015.

  • Increased fee-based revenues 14% from 2015.

  • Expanded total loans 15% from 2015.

  • Increased average core deposits 11% from 2015.

"Strong performance in 2016 was capped by solid fourth quarter results, reflecting balanced business execution against a backdrop of substantial growth," said Michael L. Scudder, President and Chief Executive Officer. "Away from certain integration and organizational costs attendant to this growth, earnings per share improved 10% and 8% for the quarter and full year versus a year ago. This performance benefited from consistent sales success across major business lines as well as our acquisition of NI Bancshares Corporation in March of 2016. Further, we were very pleased to close on our acquisition of Standard Bancshares, Inc., a $2.3 billion asset financial institution, on January 6, 2017.  As a result, we begin 2017 with $14 billion in assets, 40% larger than we began 2016, and having greatly strengthened our place as the premier commercial bank in metro Chicago."

Mr. Scudder concluded, "Our performance momentum is building amid optimism for improved operating conditions and a transition to higher rates. Continued focus on investing in our colleagues and infrastructure combined with our strong balance sheet leave us well positioned to capitalize on this momentum and operate as a larger more diverse company.  As we do so, we remain centered on those actions which help our clients to achieve financial success, enhance the value of our franchise and inure to the long-term benefit of our shareholders."

(1) Earnings per share, excluding certain significant transactions, is a Non-GAAP financial measure. For details on the calculation, see the sections titled "Non-GAAP Financial Information" and "Non-GAAP Reconciliations" presented later in this release.

SIGNIFICANT RECENT EVENTS

Acquisition

Standard Bancshares, Inc.

On January 6, 2017, the Company completed its acquisition of Standard Bancshares, Inc. ("Standard"), the holding company for Standard Bank and Trust Company. With the acquisition, the Company acquired 35 banking offices located primarily in the southwest Chicago suburbs and adjacent markets in northwest Indiana, and added approximately $2.1 billion in deposits and $1.9 billion in loans. The merger consideration totaled $570.6 million and consisted of 21,057,085 shares of Company common stock and $47.1 million in cash. Operating systems are expected to be converted in the first quarter of 2017.

Headquarters Relocation to Chicago's Dynamic O'Hare Airport Corridor

On January 3, 2017, the Company announced its plan to relocate its corporate headquarters in early 2018 to Chicago's dynamic O'Hare airport corridor from its current location in Itasca, Illinois. The new headquarters, located at Triangle Plaza at 8750 W. Bryn Mawr Avenue, is expected to offer greater accessibility and collaboration opportunities for the Company's colleagues and a larger space to accommodate future growth. The Company recognized a $950,000 lease cancellation fee during the fourth quarter of 2016 as a result of its planned move.

OPERATING PERFORMANCE

Net Interest Income and Margin Analysis
(Dollar amounts in thousands)
 
  Quarters Ended
  December 31, 2016     September 30, 2016     December 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  $ 177,974     $ 362     0.81       $ 282,101     $ 472     0.67       $ 587,112     $ 530     0.36  
Securities (1)  2,016,588     11,088     2.20       1,896,195     10,752     2.27       1,260,167     9,855     3.13  
Federal Home Loan Bank ("FHLB") and
  Federal Reserve Bank ("FRB") stock 
54,093     421     3.11       51,451     261     2.03       38,926     371     3.81  
Loans (1)(2)  8,177,036     86,520     4.21       8,067,900     88,500     4.36       7,013,586     76,405     4.32  
Total interest-earning assets (1)  10,425,691     98,391     3.76       10,297,647     99,985     3.87       8,899,791     87,161     3.89  
Cash and due from banks  145,807               150,467               131,589          
Allowance for loan losses  (89,401 )             (84,088 )             (74,823 )        
Other assets  898,011               958,299               865,873          
Total assets $ 11,380,108               $ 11,322,325               $ 9,822,430          
Liabilities and Stockholders' Equity:                                      
Interest-bearing core deposits (3)  $ 4,971,630     1,049     0.08       $ 5,090,820     1,086     0.08       $ 4,471,645     930     0.08  
Time deposits  1,213,048     1,426     0.47       1,248,425     1,434     0.46       1,152,895     1,341     0.46  
Borrowed funds 
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