Market Overview

First Midwest Bancorp, Inc. Announces 2018 First Quarter Results

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ITASCA, Ill., April 24, 2018 (GLOBE NEWSWIRE) -- First Midwest Bancorp, Inc. (the "Company" or "First Midwest") (NASDAQ NGS:FMBI), the holding company of First Midwest Bank (the "Bank"), today reported results of operations and financial condition for the first quarter of 2018. Net income for the first quarter of 2018 was $33.5 million, or $0.33 per share, compared to $2.3 million, or $0.02 per share, for the fourth quarter of 2017, and $22.9 million, or $0.23 per share, for the first quarter of 2017.

Reported results for the fourth quarter of 2017 were impacted by the revaluation of the Company's deferred tax assets ("DTAs") and various actions taken by the Company in light of federal income tax reform legislation. For the first quarter of 2017, reported results were impacted by acquisition and integration related expenses. For additional detail on these adjustments, see the "Non-GAAP Financial Information" section presented later in this release.

Earnings per share, adjusted(1) was $0.33 for the first quarter of 2018, compared to $0.34 for both the fourth and the first quarters of 2017.

SELECT FIRST QUARTER HIGHLIGHTS

  • Increased earnings per share to $0.33, up from $0.02 and $0.23 for the fourth and first quarters of 2017, respectively.
    • Generated earnings per share, adjusted(1) of $0.33, down 3% from the fourth and first quarters of 2017.
    • Higher provision expense impacted earnings per share by $0.05 compared to the fourth quarter of 2017, reflective of loan growth and remediation costs specific to two isolated credits.
  • Grew loans to $11 billion, up 9% annualized from December 31, 2017 and 6% from March 31, 2017.
  • Maintained total average deposits at $11 billion, consistent with the fourth quarter of 2017 and up 3% from the first quarter of 2017; core deposit mix of 84%, consistent with both prior periods.
  • Generated tax-equivalent net interest margin(1) of 3.80%; reflects declining loan accretion and a 3 basis point reduction due to federal income tax reform; excluding these items, underlying margin expanded 3 basis points compared to the fourth quarter of 2017 and up 16 basis points from the first quarter of 2017.
  • Lower noninterest income by 11% compared to the first quarter of 2017; up 6% from the first quarter of 2017, excluding the $4 million reclassification impact of recently adopted accounting guidance(2), the impact of the Durbin Amendment effective in the third quarter of 2017, and net securities losses(1).
  • Controlled noninterest expenses, reporting an efficiency ratio(1) of 61%, consistent with the fourth and first quarters of 2017.
  • Increased dividends per share to $0.11, up 10% and 22% from the fourth and first quarters of 2017, respectively.

"We had a solid start to the year," said Michael L. Scudder, Chairman of the Board, President, and Chief Executive Officer of the Company. "Operating performance for the quarter benefitted from strong earning asset growth and stable core funding and margins, combined with lower corporate income taxes. At the same time, comparatively higher credit provisioning weighed on the quarter's results, reflective of both the pace of loan growth and isolated credit remediation."

Mr. Scudder concluded, "As we look ahead, progress continues on our "Delivering Excellence" initiative, our Company-wide effort to better align customer needs, technology, and processes with client experiences. These same efforts will also enhance operational efficiency and further improve the scalability of our platform. Continued successful execution combined with the strength of our capital and core funding will leave us well-positioned for further business expansion and improved operating performance." 

(1) These metrics are non-GAAP financial measures. For details on the calculation of these metrics, see the sections titled "Non-GAAP Financial Information" and "Non-GAAP Reconciliations" presented later in this release.
(2) As a result of accounting guidance adopted in the first quarter of 2018, certain noninterest income line items and the related noninterest expense line items that are presented on a gross basis in prior periods are presented on a net basis in noninterest income for the current period.

OPERATING PERFORMANCE 

   
Net Interest Income and Margin Analysis
(Dollar amounts in thousands)
   
  Quarters Ended
  March 31, 2018     December 31, 2017     March 31, 2017
  Average Balance   Interest   Yield/
Rate
(%)
    Average
Balance
  Interest   Yield/
Rate
(%)
    Average
Balance
  Interest   Yield/
Rate
(%)
Assets                                      
Other interest-earning assets $ 112,137     $ 423     1.53       $ 203,459     $ 721     1.41       $ 215,915     $ 441     0.83  
Securities(1) 2,063,223     12,141     2.35       1,890,020     10,977     2.32       2,021,157     11,535     2.28  
Federal Home Loan Bank ("FHLB") and
  Federal Reserve Bank ("FRB") stock
76,883     438     2.28       63,520     506     3.19       54,219     368     2.71  
Loans(1) 10,499,283     119,318     4.61       10,384,074     119,204     4.55       9,920,513     113,409     4.64  
Total interest-earning assets(1) 12,751,526     132,320     4.20       12,541,073     131,408     4.16       12,211,804     125,753     4.17  
Cash and due from banks 181,797               188,683               176,953          
Allowance for loan losses (99,234 )             (99,590 )             (89,065 )        
Other assets 1,352,964               1,488,459               1,373,433          
Total assets $ 14,187,053               $ 14,118,625               $ 13,673,125          
Liabilities and Stockholders' Equity                                      
Savings deposits $ 2,015,679     368     0.07       $ 2,017,489     382     0.08       $ 2,029,631     400     0.08  
NOW accounts 1,992,672     1,048     0.21       1,992,150     690     0.14       1,916,816     478     0.10  
Money market deposits 1,814,057     824     0.18       1,938,195     772     0.16       1,890,703     619     0.13
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