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     132  0 Kommentare First Midwest Bancorp, Inc. Announces 2021 First Quarter Results – EPS Up 100% From a Year Ago

    CHICAGO, April 20, 2021 (GLOBE NEWSWIRE) -- First Midwest Bancorp, Inc. (the "Company" or "First Midwest"), the holding company of First Midwest Bank (the "Bank"), today reported results of operations and financial condition for the first quarter of 2021. Net income applicable to common shares for the first quarter of 2021 was $41 million, or $0.36 per diluted common share, compared to $37 million, or $0.33 per diluted common share, for the fourth quarter of 2020, and $19 million, or $0.18 per diluted common share, for the first quarter of 2020.

    Comparative results for the first quarter of 2021 and the fourth and first quarters of 2020 were, in certain cases, impacted by the timing of costs related to bank acquisition and branch consolidation, as well as the recognition of certain income tax benefits. Such results were also impacted by the Company’s response to the COVID-19 pandemic (the "pandemic"), as well as governments' responses to the pandemic. The Company's responses included repositioning its balance sheet which impacted its performance. To facilitate comparison between periods, adjustments to reported results have been made to reflect these impacts. For additional detail on these adjustments, see the "Non-GAAP Financial Information" section presented later in this release.

    SELECT FIRST QUARTER HIGHLIGHTS

    • Improved diluted EPS to $0.36, up 9% and 100% from the fourth and first quarters of 2020, respectively.
      • Diluted EPS, adjusted(1) of $0.37, declined 14% from the fourth quarter of 2020, impacted by lower income from the Paycheck Protection Program ("PPP"), partly offset by lower provisioning for loan losses. The increase from a year ago largely reflects the initial increase in provision for loan losses responsive to the pandemic.
    • Increased fee-based revenues to $44 million, up 5% and 17% from the fourth and first quarters of 2020, respectively, reflective of record wealth management fees and mortgage banking income.
    • Produced net interest income of $141 million at a net margin of 3.03%, down 11 basis points ("bps") linked quarter due to lower PPP loan income and down 51 bps from a year ago, reflective of lower interest rates.
    • Increased total loans to $14 billion, up 3% annualized from December 31, 2020, excluding PPP.
    • Maintained robust credit and capital reserves as economic recovery continues:
      • Held the allowance for credit losses ("ACL") at 1.73% of total loans, excluding PPP loans, in-line with 1.77% linked quarter and up from 1.62% a year ago.
        • Incurred net loan charge-offs ("NCOs") of $8 million, compared to $4 million and $10 million in the fourth and first quarters of 2020, excluding purchased credit deteriorated ("PCD") loans.
        • Decreased performing loans classified as substandard and special mention by 9% linked quarter while loans past due 30-89 days declined by 24%.
      • Increased Tier 1 capital to 11.7% of risk-weighted assets, up 12 bps linked quarter and 203 bps from a year ago.
        • Repurchased 715,000 shares of our common stock at a cost of $15 million.

    "We had a solid start to the year as our overall performance improved as the economic recovery gains traction," said Michael L. Scudder, Chairman of the Board and Chief Executive Officer of the Company. "Operating performance for the quarter once again benefited from strong production from our fee-based businesses and continued focus on managing our costs. As expected, quarterly comparisons were affected by both normal seasonality and the impact of federal stimulus programs on both client liquidity and transactional volumes. Importantly, our underlying business momentum is strengthening as both production volumes and sales pipelines normalize and improve."

    Mr. Scudder concluded, "As the economic recovery builds momentum, we are well positioned for continued growth and expansion. Our balance sheet is strong, preparing us to benefit from an improving credit outlook and growing business demand, as well as from anticipated higher interest rates. As always, our response and collective focus remain on helping our clients achieve financial success, delivering on our strategic priorities and creating long term value for our shareholders."

    (1) This metric is a non-GAAP financial measure. For details on the calculation of this metric, see the sections titled "Non-GAAP Financial Information" and "Non-GAAP Reconciliations" presented later in this release.

    OPERATING PERFORMANCE

    Net Interest Income and Margin Analysis
    (Dollar amounts in thousands)
       
      Quarters Ended
      March 31, 2021     December 31, 2020     March 31, 2020
      Average
    Balance
      Interest   Yield/
    Rate
    (%)
        Average
    Balance
      Interest   Yield/
    Rate
    (%)
        Average
    Balance
      Interest   Yield/
    Rate
    (%)
    Assets                                      
    Other interest-earning assets $ 760,302     $ 680     0.36       $ 1,244,999     $ 930     0.30       $ 164,351     $ 816     2.00  
    Securities(1) 3,131,096     16,264     2.08       3,164,310     17,051     2.16       3,066,574     20,757     2.71  
    Federal Home Loan Bank ("FHLB") and Federal Reserve Bank ("FRB") stock 107,595     989     3.68       123,287     1,342     4.35       126,643     1,387     4.38  
    Loans, excluding PPP loans(1) 13,993,303     125,308     3.63       13,335,154     126,474     3.77       13,073,752     148,420     4.57  
    PPP loans(1) 1,014,798     8,892     3.55       1,013,511     15,195     5.96                
    Total loans(1) 15,008,101     134,200     3.63       14,348,665     141,669     3.93       13,073,752     148,420     4.57  
    Total interest-earning assets(1) 19,007,094     152,133     3.24       18,881,261     160,992     3.39       16,431,320     171,380     4.19  
    Cash and due from banks 236,944               252,268               261,336          
    Allowance for loan losses (239,802 )             (246,278 )             (179,392 )        
    Other assets 1,914,804               1,995,074               1,891,557          
    Total assets $ 20,919,040               $ 20,882,325               $ 18,404,821          
    Liabilities and Stockholders' Equity                                      
    Savings deposits $ 2,573,495     113     0.02       $ 2,436,930     109     0.02       $ 2,069,163     164     0.03  
    NOW accounts 2,802,568     251     0.04       2,774,989     277     0.04       2,273,156     1,630     0.29  
    Money market deposits 3,008,597     634     0.09       2,923,881     694     0.09       2,227,707     3,099     0.56  
    Time deposits 1,978,986     2,459     0.50       2,047,260     3,131     0.61       2,932,466     12,224     1.68  
    Borrowed funds 1,329,394     3,107     0.95       1,661,731     4,158     1.00       2,007,700     5,841     1.17  
    Senior and subordinated debt 234,873     3,471     5.99       234,669     3,482     5.90       234,053     3,694     6.35  
    Total interest-bearing liabilities 11,927,913     10,035     0.34       12,079,460     11,851     0.39       11,744,245     26,652     0.91  
    Demand deposits 5,917,978               5,753,600               3,884,015          
    Total funding sources 17,845,891         0.23       17,833,060         0.26       15,628,260         0.69  
    Other liabilities 389,396               373,854               361,404          
    Stockholders' equity 2,683,753               2,675,411               2,415,157          
    Total liabilities and stockholders' equity $ 20,919,040               $ 20,882,325               $ 18,404,821          
    Tax-equivalent net interest income/margin(1)     142,098     3.03           149,141     3.14           144,728     3.54  
    Tax-equivalent adjustment     (983 )             (1,030 )             (1,153 )    
    Net interest income (GAAP)(1)     $ 141,115               $ 148,111               $ 143,575      
    Impact of acquired loan accretion(1)     $ 7,165     0.15           $ 7,603     0.16           $ 6,946     0.17  
    Tax-equivalent net interest income/margin, adjusted(1)     $ 134,933     2.88           $ 141,538     2.98           $ 137,782     3.37  

    (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 21%. The corresponding income tax impact related to tax-exempt items is recorded in income tax expense. These adjustments have no impact on net income. See the "Non-GAAP Financial Information" section presented later in this release for a discussion of this non-GAAP financial measure.

    Net interest income for the first quarter of 2021 was down 4.7% from the fourth quarter of 2020 and 1.7% from the first quarter of 2020. The decrease in net interest income compared to the fourth quarter of 2020 resulted primarily from lower fees on PPP loans and fewer days in the quarter, partially offset by growth in loans and lower costs of funds. Compared to the first quarter of 2020, net interest income was impacted by lower interest rates, partially offset by growth in loans and an increase in interest income and fees on PPP loans, as well as the acquisition of interest-earning assets from the Park Bank transaction that closed in the first quarter of 2020.

    Acquired loan accretion contributed $7.2 million, $7.6 million, and $6.9 million to net interest income for the first quarter of 2021, fourth quarter of 2020, and first quarter of 2020, respectively.

    Tax-equivalent net interest margin for the current quarter was 3.03%, decreasing 11 and 51 basis points from the fourth and first quarters of 2020, respectively. Excluding the impact of acquired loan accretion, tax-equivalent net interest margin was 2.88%, down 10 and 49 basis points from the fourth and first quarters of 2020, respectively. Compared to the fourth quarter of 2020, tax-equivalent net interest margin decreased due primarily to lower accelerated income on the forgiveness of PPP loans. Tax-equivalent net interest margin decreased compared to the first quarter of 2020 as a result of lower interest rates on loans and securities, as well as a higher balance of other interest-earning assets due to higher demand deposits as a result of PPP loan funds and other government stimuli, partially offset by lower cost of funds, loan growth, and higher yields on PPP loans.

    For the first quarter of 2021, total average interest-earning assets rose by $125.8 million and $2.6 billion from the fourth and first quarters of 2020, respectively. The increase compared to the fourth quarter of 2020 resulted primarily from loan growth, partially offset by a lower balance of other interest-earning assets. Compared to the first quarter of 2020, the increase in average interest-earning assets was due primarily to assets acquired in the Park Bank transaction, loan growth, and a higher balance of other interest-earning assets due to higher demand deposits as a result of PPP loan funds and other government stimuli.

    Total average funding sources for the first quarter of 2021 were consistent with the fourth quarter of 2020 and increased by $2.2 billion from first quarter of 2020. The increase compared to the first quarter of 2020 was driven primarily by deposit growth due to higher customer balances resulting from PPP funds and other government stimuli, as well as deposits assumed in the Park Bank transaction, partially offset by a decrease in FHLB advances.

     
    Noninterest Income Analysis
    (Dollar amounts in thousands)
             
        Quarters Ended   March 31, 2021
    Percent Change From
        March 31,
    2021
      December 31, 
     2020
      March 31,
    2020
      December 31, 
     2020
      March 31,
    2020
    Wealth management fees   $ 14,149     $ 13,548     $ 12,361     4.4     14.5  
    Mortgage banking income   10,187     9,191     1,788     10.8     469.7  
    Service charges on deposit accounts   9,980     10,811     11,781     (7.7 )   (15.3 )
    Card-based fees, net   4,556     4,530     3,968     0.6     14.8  
    Capital market products income   2,089     659     4,722     217.0     (55.8 )
    Other service charges, commissions, and fees   2,761     2,993     2,682     (7.8 )   2.9  
    Total fee-based revenues   43,722     41,732     37,302     4.8     17.2  
    Other income   2,081     3,550     3,065     (41.4 )   (32.1 )
    Swap termination costs       (17,567 )       N/M     N/M  
    Net securities losses           (1,005 )   N/M     N/M  
    Total noninterest income   $ 45,803     $ 27,715     $ 39,362     65.3     16.4  

    N/M – Not meaningful.

    Total noninterest income of $45.8 million was up 65.3% from the fourth quarter of 2020 and 16.4% from the first quarter of 2020. Excluding the impact of swap termination costs in the fourth quarter of 2020, total noninterest income increased 1.2%. Record wealth management fees resulted from a higher market environment and continued sales of fiduciary and investment advisory services to new and existing customers compared to both prior periods. The decrease in service charges on deposit accounts compared to the fourth quarter of 2020 was due primarily to seasonality, whereas the decrease from the first quarter of 2020 resulted from the impact of lower transaction volumes due to the pandemic. Capital market products income resulted from levels of sales to corporate clients in light of market conditions that were higher than the fourth quarter of 2020 and lower than the first quarter of 2020.

    Record mortgage banking income for the first quarter of 2021 resulted from sales of $283.9 million of 1-4 family mortgage loans in the secondary market compared to $275.6 million and $116.6 million in the fourth and first quarters of 2020, respectively. In addition, mortgage banking income for the first quarter of 2021 increased compared to both prior periods due to increases in the fair value of mortgage servicing rights.

    Other income decreased compared to both prior periods as a result of fair value adjustments on equity securities.

    During the fourth quarter of 2020, the Company terminated longer term interest rate swaps with a notional amount of $510 million as a result of excess liquidity and in response to market conditions. As a result, $17.6 of pre-tax losses on swap terminations were recorded.

    Net securities losses of $1.0 million were recognized during the first quarter of 2020 as a result of repositioning of the Company's securities portfolio due to market conditions.

     
    Noninterest Expense Analysis
    (Dollar amounts in thousands)
             
        Quarters Ended   March 31, 2021
    Percent Change From
        March 31,
    2021
      December 31, 
     2020
      March 31,
    2020
      December 31, 
     2020
      March 31,
    2020
    Salaries and employee benefits:                    
    Salaries and wages   $ 53,693     $ 55,950     $ 49,990     (4.0 )   7.4  
    Retirement and other employee benefits   12,708     10,430     12,869     21.8     (1.3 )
    Total salaries and employee benefits   66,401     66,380     62,859         5.6  
    Net occupancy and equipment expense   14,752     14,002     14,227     5.4     3.7  
    Technology and related costs   10,284     11,005     8,548     (6.6 )   20.3  
    Professional services   8,059     8,424     10,390     (4.3 )   (22.4 )
    Advertising and promotions   1,835     1,850     2,761     (0.8 )   (33.5 )
    Net other real estate owned ("OREO") expense   589     106     420     455.7     40.2  
    Other expenses   14,735     12,851     12,654     14.7     16.4  
    Optimization costs   1,525     1,493         2.1     100.0  
    Acquisition and integration related expenses   245     1,860     5,472     (86.8 )   (95.5 )
    Total noninterest expense   $ 118,425     $ 117,971     $ 117,331     0.4     0.9  
    Optimization costs   (1,525 )   (1,493 )       2.1     (100.0 )
    Acquisition and integration related expenses   (245 )   (1,860 )   (5,472 )   (86.8 )   (95.5 )
    Total noninterest expense, adjusted(1)   $ 116,655     $ 114,618     $ 111,859     1.8     4.3  

    (1) See the "Non-GAAP Financial Information" section presented later in this release for a discussion of this non-GAAP financial measure.

    Total noninterest expense was stable compared to both prior periods. Noninterest expense for all periods presented was impacted by acquisition and integration related expenses. In addition, the first quarter of 2021 and fourth quarter of 2020 were impacted by optimization costs. Excluding these items, noninterest expense for the first quarter of 2021 was $116.7 million, up 1.8% from the fourth quarter of 2020 reflective of seasonality, and up 4.3% from the first quarter of 2020. Overall, noninterest expense, adjusted, to average assets, excluding PPP loans, was 2.38% for the first quarter of 2021, up 9 basis points and down 6 basis points from the fourth and first quarters of 2020, respectively.

    Operating costs associated with the Park Bank transaction contributed to the increase in noninterest expense compared to the first quarter of 2020. These costs primarily occurred in salaries and employee benefits, net occupancy and equipment expense, technology and related costs, and other expenses.

    Salaries and employee benefits compared to the fourth quarter of 2020 were impacted by merit increases, payroll tax timing, and higher equity compensation valuations, offset by ongoing benefits of optimization strategies and lower compensation accruals. Compared to the first quarter of 2020, salaries and employee benefits increased primarily due to higher equity compensation valuations, compensation accruals, commissions, and merit increases, partially offset by ongoing benefits of optimization strategies. Higher costs related to winter weather conditions contributed to the increase in net occupancy and equipment costs compared to the fourth quarter of 2020. Compared to the first quarter of 2020, technology and related costs was impacted by investments in technology, including the origination of PPP loans. Professional services expenses were elevated for the first quarter of 2020 due to process enhancements and expenses associated with higher capital market products income. Advertising and promotions expense decreased compared to the first quarter of 2020 due to the timing of certain costs related to marketing campaigns. Other expenses for the first quarter of 2021 was impacted by a valuation adjustment on a foreclosed asset.

    Optimization costs of $1.5 million for the first quarter of 2021 primarily include advisory fees, employee severance, and other expenses associated with locations identified for closure.

    Acquisition and integration related expenses for all periods presented resulted primarily from the acquisition of Park Bank.

    INCOME TAXES

    The Company's effective tax rate for the first quarter of 2021 was 27.8% up from 12.1% and 24.8% for the fourth and first quarters of 2020, respectively. The increase compared to both prior periods was driven primarily by a $1.1 million increase in income tax expense related to share-based payments and a decrease in federal and state tax exempt income. In addition, the effective tax rate for the fourth quarter of 2020 was impacted by $3.6 million of income tax benefits resulting from deferred tax asset adjustments, as well as the finalization of the prior year returns and the expiration of the statute of limitations on uncertain tax positions.

    LOAN PORTFOLIO AND ASSET QUALITY

    Loan Portfolio Composition
    (Dollar amounts in thousands)
             
        As of   March 31, 2021
    Percent Change From
        March 31, 
     2021
      December 31, 
     2020
      March 31, 
     2020
      December 31, 
     2020
      March 31, 
     2020
    Commercial and industrial   $ 4,546,317     $ 4,578,254     $ 5,064,295     (0.7 )   (10.2 )
    Agricultural   355,883     364,038     393,063     (2.2 )   (9.5 )
    Commercial real estate:                    
    Office, retail, and industrial   1,827,116     1,861,768     2,092,097     (1.9 )   (12.7 )
    Multi-family   906,124     872,813     918,944     3.8     (1.4 )
    Construction   614,021     612,611     661,363     0.2     (7.2 )
    Other commercial real estate   1,463,582     1,481,976     1,415,892     (1.2 )   3.4  
    Total commercial real estate   4,810,843     4,829,168     5,088,296     (0.4 )   (5.5 )
    Total corporate loans, excluding PPP loans   9,713,043     9,771,460     10,545,654     (0.6 )   (7.9 )
    PPP loans   1,109,442     785,563         41.2     N/M  
    Total corporate loans   10,822,485     10,557,023     10,545,654     2.5     2.6  
    Home equity   690,030     761,725     973,658     (9.4 )   (29.1 )
    1-4 family mortgages   3,187,066     3,022,413     1,957,037     5.4     62.9  
    Installment   483,945     410,071     488,668     18.0     (1.0 )
    Total consumer loans   4,361,041     4,194,209     3,419,363     4.0     27.5  
    Total loans   $ 15,183,526     $ 14,751,232     $ 13,965,017     2.9     8.7  
                         

    N/M – Not meaningful.

    Total loans includes loans originated under the PPP loan programs beginning in the second quarter of 2020, which totaled $1.1 billion and $785.6 million as of March 31, 2021 and December 31, 2020, respectively. Excluding these loans, total loans were up 3% annualized from December 31, 2020 and 1% from March 31, 2020. Compared to both prior periods, corporate loans, excluding PPP loans, were impacted by lower line usage and higher paydowns due to current economic conditions as a result of the ongoing pandemic. Production increased in the first quarter of 2021 compared to the fourth quarter of 2020; however, this continued to be more than offset by excess borrower liquidity and paydowns as a result of the pandemic and below pre-pandemic production levels.

    Growth in consumer loans compared to both prior periods resulted primarily from purchases of 1-4 family mortgages and installment loans, as well as strong production in the 1-4 family mortgages portfolio, which more than offset higher prepayments.

     
    Allowance for Credit Losses
    (Dollar amounts in thousands)
             
        As of or for the Quarters Ended   March 31, 2021
    Percent Change From
        March 31,
    2021
      December 31, 
     2020
      March 31,
    2020
      December 31, 
     2020
      March 31,
    2020
    ACL, excluding PCD loans   $ 215,305     $ 215,915     $ 176,478     (0.3 )   22.0  
    PCD loan ACL   28,079     31,127     50,223     (9.8 )   (44.1 )
    Total ACL   $ 243,384     $ 247,042     $ 226,701     (1.5 )   7.4  
    Provision for credit losses   $ 6,098     $ 10,507     $ 39,532     (42.0 )   (84.6 )
    ACL to total loans   1.60 %   1.67 %   1.62 %        
    ACL to total loans, excluding PPP loans(1)   1.73 %   1.77 %   1.62 %        
    ACL to non-accrual loans   153.67 %   173.33 %   154.64 %        

    (1) This ratio excludes PPP loans that are fully guaranteed by the Small Business Administration ("SBA"). As a result, no allowance for credit losses is associated with these loans. See the "Non-GAAP Financial Information" section presented later in this release for a discussion of this non-GAAP financial measure.

    The ACL was $243.4 million or 1.60% of total loans as of March 31, 2021, decreasing $3.7 million from December 31, 2020 and increasing $16.7 million compared to March 31, 2020. Excluding the impact of PPP loans, ACL to total loans was 1.73% as of March 31, 2021, compared to 1.77% and 1.62% as of December 31, 2020 and March 31, 2020, respectively. The decrease from December 31, 2020 reflects net charge-offs on PCD loans that previously had an ACL established upon acquisition and the increase compared to March 31, 2020 is due to additional ACL established as a result of the pandemic during 2020.

     
    Asset Quality
    (Dollar amounts in thousands)
             
        As of   March 31, 2021
    Percent Change From
        March 31,
    2021
      December 31, 
     2020
      March 31,
    2020
      December 31, 
     2020
      March 31,
    2020
    Non-accrual loans, excluding PCD loans(1)   $ 128,650     $ 109,957     $ 97,649     17.0     31.7  
    Non-accrual PCD loans   29,734     32,568     48,950     (8.7 )   (39.3 )
    Total non-accrual loans   158,384     142,525     146,599     11.1     8.0  
    90 days or more past due loans, still accruing interest(1)   5,354     4,395     5,052     21.8     6.0  
    Total non-performing loans, ("NPLs")   163,738     146,920     151,651     11.4     8.0  
    Accruing troubled debt restructurings ("TDRs")   798     813     1,216     (1.8 )   (34.4 )
    Foreclosed assets(2)   13,228     16,671     21,027     (20.7 )   (37.1 )
    Total non-performing assets ("NPAs")   $ 177,764     $ 164,404     $ 173,894     8.1     2.2  
    30-89 days past due loans   $ 30,973     $ 40,656     $ 81,127     (23.8 )   (61.8 )
    Special mention loans(3)   $ 355,563     $ 409,083     $ 240,826     (13.1 )   47.6  
    Substandard loans(3)   342,600     357,219     196,923     (4.1 )   74.0  
    Total performing loans classified as substandard and special mention(3)   $ 698,163     $ 766,302     $ 437,749     (8.9 )   59.5  
    Non-accrual loans to total loans:                    
    Non-accrual loans to total loans   1.04 %   0.97 %   1.05 %        
    Non-accrual loans to total loans, excluding PPP loans(1)(4)   1.13 %   1.02 %   1.05 %        
    Non-accrual loans to total loans, excluding PCD and PPP loans(1)(4)   0.93 %   0.80 %   0.71 %        
    Non-performing loans to total loans:                    
    NPLs to total loans   1.08 %   1.00 %   1.09 %        
    NPLs to total loans, excluding PPP loans(1)(4)   1.16 %   1.05 %   1.09 %        
    NPLs to total loans, excluding PCD and PPP loans(1)(4)   0.97 %   0.83 %   0.75 %        
    Non-performing assets to total loans plus foreclosed assets:                
    NPAs to total loans plus foreclosed assets   1.17 %   1.11 %   1.24 %        
    NPAs to total loans plus foreclosed assets, excluding PPP loans(1)(4)   1.26 %   1.18 %   1.24 %        
    NPAs to total loans plus foreclosed assets, excluding PCD and PPP loans(1)(4)   1.07 %   0.96 %   0.91 %        
    Performing loans classified as substandard and special mention to corporate loans:      
    Performing loans classified as substandard and special mention to corporate loans(3)   6.45 %   7.26 %   4.15 %        
    Performing loans classified as substandard and special mention to corporate loans, excluding PPP loans(3)   7.19 %   7.84 %   4.15 %        

    N/M – Not meaningful.
    (1) See the "Non-GAAP Financial Information" section presented later in this release for a discussion of this non-GAAP financial measure.
    (2) Foreclosed assets consists of OREO and other foreclosed assets acquired in partial or total satisfaction of defaulted loans. Other foreclosed assets are included in other assets in the Consolidated Statements of Financial Condition.
    (3) Performing loans classified as substandard and special mention excludes accruing TDRs.
    (4) This ratio excludes PPP loans that are fully guaranteed by the SBA. As a result, no allowance for credit losses is associated with these loans.

    NPAs represented 1.17% of total loans and foreclosed assets at March 31, 2021 compared to 1.11% and 1.24% at December 31, 2020 and March 31, 2020, respectively. Excluding the impact of PCD and PPP loans, NPAs to total loans plus foreclosed assets was 1.07% at March 31, 2021, compared to 0.96% at December 31, 2020 and 0.91% at March 31, 2020, reflective of normal fluctuations that occur on a quarterly basis.

    Performing loans classified as substandard and special mention were $698 million for the first quarter of 2021 compared to $766 million and $438 million at December 31, 2020 and March 31, 2020, respectively. The decrease from the fourth quarter of 2020 was due primarily to the payoff of certain corporate credits in addition to upgrade and downgrade activity. The increase from the first quarter of 2020, is a result of the pandemic's impact on certain borrowers primarily focused in elevated risk sectors that the Company has determined require additional monitoring. These loans exhibit potential or well-defined weaknesses but continue to accrue interest because they are well secured, and collection of principal and interest is expected.

     
    Charge-Off Data
    (Dollar amounts in thousands)
         
        Quarters Ended
        March 31,
    2021
      % of
    Total
      December 31, 
     2020
      % of
    Total
      March 31,
    2020
      % of
    Total
    Net loan charge-offs(1)                          
    Commercial and industrial   $ 1,740     17.8     $ 3,536     33.6     $ 4,680     38.7  
    Agricultural   363     3.7     1,779     16.9     1,227     10.1  
    Commercial real estate:                          
    Office, retail, and industrial   4,377     44.9     1,701     16.1     329     2.7  
    Multi-family   (5 )   (0.1 )   19     0.2     5      
    Construction           140     1.3     1,808     14.9  
    Other commercial real estate   371     3.9     916     8.7     164     1.4  
    Consumer   2,910     29.8     2,448     23.2     3,901     32.2  
    Total NCOs   $ 9,756     100.0     $ 10,539     100.0     $ 12,114     100.0  
    Less: NCOs on PCD loans(2)   (2,107 )   21.6     (6,488 )   61.6     (1,720 )   14.2  
    Total NCOs, excluding PCD loans(2)   $ 7,649         $ 4,051         $ 10,394        
    Recoveries included above   $ 1,561         $ 2,588         $ 1,816        
    Net loan charge-offs to average loans(1)(3)                          
    Quarter to date   0.26 %       0.29 %       0.37 %      
    Quarter to date, excluding PPP loans(2)(4)   0.28 %       0.31 %       0.37 %      
    Quarter to date, excluding PCD and PPP loans(2)(4)   0.22 %       0.12 %       0.32 %      

    N/A – Not applicable.
    (1) Amounts represent charge-offs, net of recoveries.
    (2) See the "Non-GAAP Financial Information" section presented later in this release for a discussion of this non-GAAP financial measure.
    (3) Annualized based on the actual number of days for each period presented.
    (4) This ratio excludes PPP loans that are fully guaranteed by the SBA. As a result, no allowance for credit losses is associated with these loans.

    NCOs to average loans, annualized was 0.26%, down from 0.29% and 0.37% for the fourth and first quarters of 2020, respectively. Excluding charge-offs on PCD loans and the impact of PPP loans, NCOs to average loans was 0.22% for the first quarter of 2021, compared to 0.12% and 0.32% for the fourth and first quarters of 2020, respectively.

    DEPOSIT PORTFOLIO

    Deposit Composition
    (Dollar amounts in thousands)
             
        Average for the Quarters Ended   March 31, 2021
    Percent Change From
        March 31,
    2021
      December 31, 
     2020
      March 31,
    2020
      December 31, 
     2020
      March 31,
    2020
    Demand deposits   $ 5,917,978     $ 5,753,600     $ 3,884,015     2.9     52.4  
    Savings deposits   2,573,495     2,436,930     2,069,163     5.6     24.4  
    NOW accounts   2,802,568     2,774,989     2,273,156     1.0     23.3  
    Money market accounts   3,008,597     2,923,881     2,227,707     2.9     35.1  
    Core deposits   14,302,638     13,889,400     10,454,041     3.0     36.8  
    Time deposits   1,978,986     2,047,260     2,932,466     (3.3 )   (32.5 )
    Total deposits   $ 16,281,624     $ 15,936,660     $ 13,386,507     2.2     21.6  

    Total average deposits were $16.3 billion for the first quarter of 2021, up 2.2% from the fourth quarter of 2020 and 21.6% from the first quarter of 2020. The increase in total average deposits compared to both prior periods was impacted by higher customer balances resulting from PPP funds and other government stimuli. Compared to the fourth quarter of 2020, the increase in total average deposits was partially offset by the normal seasonal decline in commercial and municipal deposits. In addition, the increase in total average deposits compared to the first quarter of 2020 was also driven by deposits assumed in the Park Bank transaction in March 2020.

    CAPITAL MANAGEMENT

     
    Capital Ratios
        As of
        March 31,
    2021
      December 31, 
     2020
      March 31,
    2020
    Company regulatory capital ratios:            
    Total capital to risk-weighted assets   14.26 %   14.14 %   12.00 %
    Tier 1 capital to risk-weighted assets   11.67 %   11.55 %   9.64 %
    Common equity Tier 1 ("CET1") to risk-weighted assets   10.17 %   10.06 %   9.64 %
    Tier 1 capital to average assets   8.96 %   8.91 %   8.60 %
    Company tangible common equity ratios(1)(2):        
    Tangible common equity to tangible assets   7.37 %   7.67 %   7.97 %
    Tangible common equity to tangible assets, excluding PPP loans   7.79 %   7.98 %   7.97 %
    Tangible common equity, excluding accumulated other comprehensive income ("AOCI"), to tangible assets   7.48 %   7.54 %   7.79 %
    Tangible common equity, excluding AOCI, to tangible assets, excluding PPP loans   7.91 %   7.85 %   7.79 %
    Tangible common equity to risk-weighted assets   9.73 %   9.93 %   9.63 %

    (1) These ratios are not subject to formal Federal Reserve regulatory guidance.
    (2) Tangible common equity ("TCE") is a non-GAAP measure that represents common stockholders' equity less goodwill and identifiable intangible assets. For details of the calculation of these ratios, see the sections titled, "Non-GAAP Financial Information" and "Non-GAAP Reconciliations" presented later in this release.

    Regulatory capital ratios increased compared to all prior periods as a result of retained earnings and the mix of risk-weighted assets, partially offset by the approximately 10 basis point impact of stock repurchases. Compared to March 31, 2020 total and Tier 1 capital ratios also benefited from the issuance of preferred stock. The Company elected the five-year current expected credit losses ("CECL") transition relief for regulatory capital, which retained approximately 30 basis points of CET1 and Tier 1 capital at March 31, 2021.

    During the first quarter of 2021, the Company announced that it would restart repurchases of its outstanding shares of common stock under its stock repurchase program after suspending repurchases in March 2020 as it shifted its capital deployment strategy in response to the COVID-19 pandemic. The Company repurchased approximately 715,000 shares of its common stock at a total cost of $14.9 million during the first quarter of 2021.

    The Board of Directors approved a quarterly cash dividend of $0.14 per common share during the first quarter of 2021, which is consistent with the fourth and first quarters of 2020. This dividend represents the 153rd consecutive cash dividend paid by the Company since its inception in 1983.

    Conference Call

    A conference call to discuss the Company's results, outlook, and related matters will be held on Wednesday, April 21, 2021 at 11 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, investor.firstmidwest.com. 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. 10154308 beginning one hour after completion of the live call until 8:00 A.M. (ET) on July 20, 2021. 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, Presentation Materials, and Additional Information Available on Website

    This press release, the presentation materials to be discussed during the conference call, and the accompanying unaudited Selected Financial Information are available through the Investor Relations section of First Midwest's website at investor.firstmidwest.com.

    Forward-Looking Statements

    This press release, as well as any oral statements made by or on behalf of First Midwest, 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," "outlook," "predict," "project," "probable," "potential," "possible," "target," "continue," "look forward," or "assume" and words of similar import. Forward-looking statements are not historical facts or guarantees of future performance 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. First Midwest cautions you not to place undue reliance on these statements. Forward-looking statements speak only as of the date made, and First Midwest undertakes no obligation to update any forward-looking statements.

    Forward-looking statements may be deemed to include, among other things, statements relating to First Midwest's future financial performance, including the related outlook for 2021, the performance of First Midwest's loan or securities portfolio, the expected amount of future credit allowances or charge-offs, corporate strategies or objectives, including the impact of certain actions and initiatives, anticipated trends in First Midwest's business, regulatory developments, acquisition transactions, estimated synergies, cost savings and financial benefits of completed transactions, growth strategies, including possible future acquisitions, and the continued or potential effects of the pandemic on our business, financial condition, liquidity, loans, asset quality and results of operations. These statements are subject to certain risks, uncertainties and assumptions, including the duration, extent and severity of the pandemic, including the continued effects on our business, operations and employees, as well as on our customers and service providers, and on economies and markets more generally and other risks, uncertainties and assumptions that are discussed under the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in First Midwest's Annual Report on Form 10-K for the year ended December 31, 2020, and in First Midwest's subsequent filings made with the Securities and Exchange Commission ("SEC"). These risks and uncertainties are not exhaustive, and other sections of these reports describe additional factors that could adversely impact First Midwest's 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 practices 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. These non-GAAP financial measures include EPS, adjusted, the efficiency ratio, return on average assets, adjusted, tax-equivalent net interest income (including its individual components), tax-equivalent net interest margin, tax-equivalent net interest margin, adjusted, noninterest expense, adjusted, tangible common equity to tangible assets, tangible common equity, excluding AOCI, to tangible assets, tangible common equity to risk-weighted assets, return on average common equity, adjusted, return on average tangible common equity, return on average tangible common equity, adjusted, non-accrual loans, excluding PCD loans, non-accrual loans to total loans, excluding PPP loans, non-accrual loans to total loans, excluding PCD and PPP loans, NPLs to total loans, excluding PPP loans, NPLs to total loans, excluding PCD and PPP loans, NPAs to total loans plus foreclosed assets, excluding PPP loans, NPAs to total loans plus foreclosed assets, excluding PCD and PPP loans, performing loans classified as substandard and special mention to corporate loans, excluding PPP loans, NCOs, excluding PCD loans, NCOs to average loans, excluding PPP loans, NCOs to average loans, excluding PCD and PPP loans, and pre-tax, pre-provision earnings, adjusted.

    The Company presents EPS, the efficiency ratio, return on average assets, return on average common equity, and return on average tangible common equity, all adjusted for certain significant transactions. These transactions include optimization costs (first quarter 2021 and fourth and third quarter of 2020), acquisition and integration related expenses associated with completed and pending acquisitions (all periods), swap termination costs (fourth and third quarters of 2020), income tax benefits (fourth quarter of 2020), and net securities gains (losses) (third and first quarters of 2020). In addition, net OREO expense is excluded from the calculation of the efficiency ratio. Management believes excluding these transactions from EPS, the efficiency ratio, return on average assets, return on average common equity, and return on average tangible common equity may be useful in assessing the Company's underlying operational performance since these transactions do not pertain to its core business operations and their exclusion may facilitate better comparability between periods. Management believes that excluding acquisition and integration related expenses from these metrics may be useful to the Company, as well as analysts and investors, since these expenses can vary significantly based on the size, type, and structure of each acquisition. Additionally, management believes excluding these transactions from these metrics may enhance comparability for peer comparison purposes.

    Income tax expense, provision for loan losses, and the certain significant transactions listed above are excluded from the calculation of pre-tax, pre-provision earnings, adjusted due to the fluctuation in income before income tax and the level of provision for loan losses required based on the estimated impact of the pandemic on the ACL. Management believes pre-tax, pre-provision earnings, adjusted may be useful in assessing the Company's underlying operational performance and their exclusion may facilitate better comparability between periods and for peer comparison purposes.

    The Company presents noninterest expense, adjusted, which excludes optimization costs and acquisition and integration related expenses. Management believes that excluding these items from noninterest expense may be useful in assessing the Company’s underlying operational performance as these items either do not pertain to its core business operations or their exclusion may facilitate better comparability between periods and for peer comparison purposes.

    The tax-equivalent adjustment to net interest income and net interest margin recognizes the income tax savings when comparing taxable and tax-exempt assets. Interest income and yields on tax-exempt securities and loans are presented using the current federal income tax rate of 21%. Management believes that it is standard practice in the banking industry to present net interest income and net interest margin on a fully tax-equivalent basis and that it may enhance comparability for peer comparison purposes. In addition, management believes that presenting tax-equivalent net interest margin, adjusted, may enhance comparability for peer comparison purposes and is useful to the Company, as well as analysts and investors, since acquired loan accretion income may fluctuate based on the size of each acquisition, as well as from period to period.

    In management's view, tangible common equity measures are capital adequacy metrics that may be meaningful to the Company, as well as analysts and investors, in assessing the Company's use of equity and in facilitating comparisons with peers. These non-GAAP measures are valuable indicators of a financial institution's capital strength since they eliminate intangible assets from stockholders' equity and retain the effect of accumulated other comprehensive loss in stockholders' equity.

    The Company presents non-accrual loans, non-accrual loans to total loans, NPLs to total loans, NPAs to total loans plus foreclosed assets, performing loans classified as substandard and special mention to corporate loans, excluding PPP loans, NCOs, and NCOs to average loans, all excluding PCD and/or PPP loans. Management believes excluding PCD and PPP loans is useful as it facilitates better comparability between periods. Prior to the adoption of CECL on January 1, 2020, PCI loans with an accretable yield were considered current and were not included in past due and non-accrual loan totals and the portion of PCI loans deemed to be uncollectible was recorded as a reduction of the credit-related acquisition adjustment, which was netted within loans. Subsequent to adoption, PCD loans, including those previously classified as PCI, are included in past due and non-accrual loan totals and an ACL on PCD loans is established as of the acquisition date and the PCD loans are no longer recorded net of a credit-related acquisition adjustment. PCD loans deemed to be uncollectible are recorded as a charge-off through the ACL. The Company began originating PPP loans during the second quarter of 2020 and the loans are fully guaranteed by the SBA and are expected to be forgiven if the applicable criteria are met. Additionally, management believes excluding PCD and PPP loans from these metrics may enhance comparability for peer comparison purposes.

    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. In addition, these non-GAAP financial measures may differ from those used by other financial institutions to assess their business and performance. See the previously provided tables and the following reconciliations in the "Non-GAAP Reconciliations" section for details on the calculation of these measures to the extent presented herein.

    About First Midwest

    First Midwest (NASDAQ: FMBI) is a relationship-focused financial institution and one of the largest independent publicly traded bank holding companies based on assets headquartered in Chicago and the Midwest, with approximately $21 billion of assets and an additional $14 billion of assets under management. First Midwest Bank and First Midwest's other affiliates provide a full range of commercial, treasury management, equipment leasing, consumer, wealth management, trust and private banking products and services. The primary footprint of First Midwest's branch network and other locations is in metropolitan Chicago, southeast Wisconsin, northwest Indiana, central and western Illinois, and eastern Iowa. Visit First Midwest at www.firstmidwest.com.

    CONTACTS:

    Investors
    Patrick S. Barrett
    EVP, Chief Financial Officer
    (708) 831-7231
    pat.barrett@firstmidwest.com
    Media
    Maurissa Kanter
    SVP, Director of Corporate Communications
    (708) 831-7345
    maurissa.kanter@firstmidwest.com
       

    Accompanying Unaudited Selected Financial Information

    First Midwest Bancorp, Inc.
    Consolidated Statements of Financial Condition (Unaudited)
    (Dollar amounts in thousands)
       
      As of
      March 31,   December 31,   September 30,   June 30,   March 31,
      2021   2020   2020   2020   2020
    Period-End Balance Sheet                  
    Assets                  
    Cash and due from banks $ 223,713     $ 196,364     $ 254,212     $ 304,445     $ 252,138  
    Interest-bearing deposits in other banks 786,814     920,880     936,528     637,856     229,474  
    Equity securities, at fair value 96,983     76,404     55,021     43,954     40,098  
    Securities available-for-sale, at fair value 3,195,405     3,096,408     3,279,884     3,435,862     3,382,865  
    Securities held-to-maturity, at amortized cost 11,711     12,071     22,193     19,628     19,825  
    FHLB and FRB stock 106,170     117,420     138,120     148,512     154,357  
    Loans:                  
    Commercial and industrial 4,546,317     4,578,254     4,635,571     4,789,556     5,064,295  
    Agricultural 355,883     364,038     377,466     381,124     393,063  
    Commercial real estate:                  
    Office, retail, and industrial 1,827,116     1,861,768     1,950,406     2,020,318     2,092,097  
    Multi-family 906,124     872,813     868,293     874,861     918,944  
    Construction 614,021     612,611     631,607     687,063     661,363  
    Other commercial real estate 1,463,582     1,481,976     1,452,994     1,475,937     1,415,892  
    PPP loans 1,109,442     785,563     1,196,538     1,179,403      
    Home equity 690,030     761,725     827,746     892,867     973,658  
    1-4 family mortgages 3,187,066     3,022,413     2,287,555     2,175,322     1,957,037  
    Installment 483,945     410,071     425,012     457,207     488,668  
    Total loans 15,183,526     14,751,232     14,653,188     14,933,658     13,965,017  
    Allowance for loan losses (235,359 )   (239,017 )   (239,048 )   (240,052 )   (219,948 )
    Net loans 14,948,167     14,512,215     14,414,140     14,693,606     13,745,069  
    OREO 6,273     8,253     6,552     9,947     9,814  
    Premises, furniture, and equipment, net 129,514     132,045     132,267     143,001     145,844  
    Investment in bank-owned life insurance ("BOLI") 301,365     301,101     300,429     299,649     298,827  
    Goodwill and other intangible assets 928,974     932,764     935,801     940,182     935,241  
    Accrued interest receivable and other assets 473,502     532,753     612,996     568,239     539,748  
    Total assets $ 21,208,591     $ 20,838,678     $ 21,088,143     $ 21,244,881     $ 19,753,300  
    Liabilities and Stockholders' Equity                  
    Noninterest-bearing deposits $ 6,156,145     $ 5,797,899     $ 5,555,735     $ 5,602,016     $ 4,222,523  
    Interest-bearing deposits 10,455,309     10,214,565     10,215,838     10,055,640     9,876,427  
    Total deposits 16,611,454     16,012,464     15,771,573     15,657,656     14,098,950  
    Borrowed funds 1,295,737     1,546,414     1,957,180     2,305,195     2,648,210  
    Senior and subordinated debt 234,973     234,768     234,563     234,358     234,153  
    Accrued interest payable and other liabilities 413,112     355,026     460,656     391,461     336,280  
    Stockholders' equity 2,653,315     2,690,006     2,664,171     2,656,211     2,435,707  
    Total liabilities and stockholders' equity $ 21,208,591     $ 20,838,678     $ 21,088,143     $ 21,244,881     $ 19,753,300  
    Stockholders' equity, excluding AOCI $ 2,675,411     $ 2,663,627     $ 2,638,422     $ 2,627,484     $ 2,400,384  
    Stockholders' equity, common 2,422,815     2,459,506     2,433,671     2,425,711     2,435,707  
                                 


     
    First Midwest Bancorp, Inc.
    Condensed Consolidated Statements of Income (Unaudited)
    (Dollar amounts in thousands)
                       
      Quarters Ended
      March 31,   December 31,   September 30,   June 30,   March 31,
      2021   2020   2020   2020   2020
    Income Statement                  
    Interest income $ 151,150     $ 159,962     $ 159,085     $ 162,044     $ 170,227  
    Interest expense 10,035     11,851     16,356     16,810     26,652  
    Net interest income 141,115     148,111     142,729     145,234     143,575  
    Provision for loan losses 6,098     10,507     15,927     32,649     39,532  
    Net interest income after provision for loan losses 135,017     137,604     126,802     112,585     104,043  
    Noninterest Income                  
    Wealth management fees 14,149     13,548     12,837     11,942     12,361  
    Mortgage banking income 10,187     9,191     6,659     3,477     1,788  
    Service charges on deposit accounts 9,980     10,811     10,342     9,125     11,781  
    Card-based fees, net 4,556     4,530     4,472     3,180     3,968  
    Capital market products income 2,089     659     886     694     4,722  
    Other service charges, commissions, and fees 2,761     2,993     2,823     2,078     2,682  
    Total fee-based revenues 43,722     41,732     38,019     30,496     37,302  
    Other income 2,081     3,550     2,523     2,495     3,065  
    Swap termination costs     (17,567 )   (14,285 )        
    Net securities gains (losses)         14,328         (1,005 )
    Total noninterest income 45,803     27,715     40,585     32,991     39,362  
    Noninterest Expense                  
    Salaries and employee benefits:                
    Salaries and wages 53,693     55,950     53,385     52,592     49,990  
    Retirement and other employee benefits 12,708     10,430     11,349     11,080     12,869  
    Total salaries and employee benefits 66,401     66,380     64,734     63,672     62,859  
    Net occupancy and equipment expense 14,752     14,002     13,736     15,116     14,227  
    Technology and related costs 10,284     11,005     10,416     9,853     8,548  
    Professional services 8,059     8,424     7,325     8,880     10,390  
    Advertising and promotions 1,835     1,850     2,688     2,810     2,761  
    Net OREO expense 589     106     544     126     420  
    Other expenses 14,735     12,851     12,374     14,624     12,654  
    Optimization costs 1,525     1,493     18,376          
    Acquisition and integration related expenses 245     1,860     881     5,249     5,472  
    Total noninterest expense 118,425     117,971     131,074     120,330     117,331  
    Income before income tax expense 62,395     47,348     36,313     25,246     26,074  
    Income tax expense 17,372     5,743     8,690     6,182     6,468  
    Net income $ 45,023     $ 41,605     $ 27,623     $ 19,064     $ 19,606  
    Preferred dividends (4,034 )   (4,049 )   (4,033 )   (1,037 )    
    Net income applicable to non-vested restricted shares (486 )   (369 )   (236 )   (187 )   (192 )
    Net income applicable to common shares $ 40,503     $ 37,187     $ 23,354     $ 17,840     $ 19,414  
    Net income applicable to common shares, adjusted(1) 41,831     49,238     37,765     21,777     24,272  

    Footnotes to Condensed Consolidated Statements of Income
    (1)   See the "Non-GAAP Reconciliations" section for the detailed calculation.

     
    First Midwest Bancorp, Inc.
    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,
      2021   2020   2020   2020   2020
    EPS                  
    Basic EPS $ 0.36     $ 0.33     $ 0.21     $ 0.16     $ 0.18  
    Diluted EPS $ 0.36     $ 0.33     $ 0.21     $ 0.16     $ 0.18  
    Diluted EPS, adjusted(1) $ 0.37     $ 0.43     $ 0.33     $ 0.19     $ 0.22  
    Common Stock and Related Per Common Share Data
    Book value $ 21.22     $ 21.52     $ 21.29     $ 21.23     $ 21.33  
    Tangible book value $ 13.08     $ 13.36     $ 13.11     $ 13.00     $ 13.14  
    Dividends declared per share $ 0.14     $ 0.14     $ 0.14     $ 0.14     $ 0.14  
    Closing price at period end $ 21.91     $ 15.92     $ 10.78     $ 13.35     $ 13.24  
    Closing price to book value 1.0     0.7     0.5     0.6     0.6  
    Period end shares outstanding 114,196     114,296     114,293     114,276     114,213  
    Period end treasury shares 11,176     11,071     11,067     11,079     11,136  
    Common dividends $ 15,997     $ 16,017     $ 16,011     $ 16,015     $ 16,002  
    Dividend payout ratio 38.89 %   42.42 %   66.67 %   87.50 %   77.78 %
    Dividend payout ratio, adjusted(1) 37.84 %   32.56 %   42.42 %   73.68 %   63.64 %
    Key Ratios/Data                  
    Return on average common equity(2) 6.70 %   6.05 %   3.80 %   2.94 %   3.23 %
    Return on average common equity, adjusted(1)(2) 6.92 %   8.01 %   6.15 %   3.58 %   4.04 %
    Return on average tangible common equity(2) 11.35 %   10.35 %   6.73 %   5.32 %   5.66 %
    Return on average tangible common equity, adjusted(1)(2) 11.71 %   13.53 %   10.53 %   6.37 %   6.94 %
    Return on average assets(2) 0.87 %   0.79 %   0.51 %   0.37 %   0.43 %
    Return on average assets, adjusted(1)(2) 0.90 %   1.02 %   0.78 %   0.44 %   0.53 %
    Loans to deposits 91.40 %   92.12 %   92.91 %   95.38 %   99.05 %
    Efficiency ratio(1) 61.77 %   58.90 %   60.36 %   64.08 %   60.21 %
    Net interest margin(2)(3) 3.03 %   3.14 %   2.95 %   3.13 %   3.54 %
    Yield on average interest-earning assets(2)(3) 3.24 %   3.39 %   3.28 %   3.49 %   4.19 %
    Cost of funds(2)(4) 0.23 %   0.26 %   0.35 %   0.38 %   0.69 %
    Noninterest expense to average assets(2) 2.30 %   2.25 %   2.42 %   2.32 %   2.56 %
    Noninterest expense, adjusted to average assets, excluding PPP loans(1)(2) 2.38 %   2.29 %   2.19 %   2.32 %   2.44 %
    Effective income tax rate 27.84 %   12.13 %   23.93 %   24.49 %   24.81 %
    Capital Ratios                  
    Total capital to risk-weighted assets(1) 14.26 %   14.14 %   14.06 %   13.70 %   12.00 %
    Tier 1 capital to risk-weighted assets(1) 11.67 %   11.55 %   11.48 %   11.19 %   9.64 %
    CET1 to risk-weighted assets(1) 10.17 %   10.06 %   9.97 %   9.70 %   9.64 %
    Tier 1 capital to average assets(1) 8.96 %   8.91 %   8.50 %   8.70 %   8.60 %
    Tangible common equity to tangible assets(1) 7.37 %   7.67 %   7.43 %   7.32 %   7.97 %
    Tangible common equity, excluding AOCI, to tangible assets(1) 7.48 %   7.54 %   7.30 %   7.17 %   7.79 %
    Tangible common equity to risk-weighted assets(1) 9.73 %   9.93 %   9.84 %   9.61 %   9.63 %
    Note: Selected Financial Information footnotes are located at the end of this section.
     


     
    First Midwest Bancorp, Inc.
    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,
      2021   2020   2020   2020   2020
    Asset Quality Performance Data                
    Non-performing assets                  
    Commercial and industrial $ 59,723     $ 38,314     $ 40,781     $ 19,475     $ 24,944  
    Agricultural 8,684     10,719     13,293     8,494     5,823  
    Commercial real estate:                  
    Office, retail, and industrial 23,339     27,382     26,406     26,342     26,107  
    Multi-family 3,701     1,670     1,547     2,132     2,688  
    Construction 1,154     1,155     2,977     18,640     18,764  
    Other commercial real estate 15,406     15,219     4,690     5,304     4,562  
    Consumer 16,643     15,498     13,888     13,657     14,761  
    Non-accrual, excluding PCD loans 128,650     109,957     103,582     94,044     97,649  
    Non-accrual PCD loans 29,734     32,568     39,990     45,116     48,950  
    Total non-accrual loans 158,384     142,525     143,572     139,160     146,599  
    90 days or more past due loans, still accruing interest 5,354     4,395     3,781     3,241     5,052  
    Total NPLs 163,738     146,920     147,353     142,401     151,651  
    Accruing TDRs 798     813     841     1,201     1,216  
    Foreclosed assets(5) 13,228     16,671     15,299     19,024     21,027  
    Total NPAs $ 177,764     $ 164,404     $ 163,493     $ 162,626     $ 173,894  
    30-89 days past due loans $ 30,973     $ 40,656     $ 21,551     $ 36,342     $ 81,127  
    Allowance for credit losses                  
    Allowance for loan losses $ 235,359     $ 239,017     $ 239,048     $ 240,052     $ 219,948  
    Allowance for unfunded commitments 8,025     8,025     7,825     7,625     6,753  
    Total ACL $ 243,384     $ 247,042     $ 246,873     $ 247,677     $ 226,701  
    Provision for loan losses $ 6,098     $ 10,507     $ 15,927     $ 32,649     $ 39,532  
    Net charge-offs by category                  
    Commercial and industrial $ 1,740     $ 3,536     $ 5,470     $ 4,735     $ 4,680  
    Agricultural 363     1,779     265     118     1,227  
    Commercial real estate:                  
    Office, retail, and industrial 4,377     1,701     1,339     3,086     329  
    Multi-family (5 )   19         9     5  
    Construction     140     4,889     798     1,808  
    Other commercial real estate 371     916     1,753     19     164  
    Consumer 2,910     2,448     2,027     4,158     3,901  
    Total NCOs $ 9,756     $ 10,539     $ 15,743     $ 12,923     $ 12,114  
    Less: NCOs on PCD loans (2,107 )   (6,488 )   (6,923 )   (3,833 )   (1,720 )
    Total NCOs, excluding PCD loans $ 7,649     $ 4,051     $ 8,820     $ 9,090     $ 10,394  
    Total recoveries included above $ 1,561     $ 2,588     $ 1,795     $ 1,311     $ 1,816  
    Note: Selected Financial Information footnotes are located at the end of this section.
     


     
    First Midwest Bancorp, Inc.
    Selected Financial Information (Unaudited)
                       
      As of or for the
      Quarters Ended
      March 31,   December 31,   September 30,   June 30,   March 31,
      2021   2020   2020   2020   2020
    Performing loans classified as substandard and special mention                
    Special mention loans(7) $ 355,563     $ 409,083     $ 395,295     $ 256,373     $ 240,826  
    Substandard loans(7) 342,600     357,219     311,430     193,337     196,923  
    Total performing loans classified as substandard and special mention(7) $ 698,163     $ 766,302     $ 706,725     $ 449,710     $ 437,749  
    Asset quality ratios                  
    Non-accrual loans to total loans 1.04 %   0.97 %   0.98 %   0.93 %   1.05 %
    Non-accrual loans to total loans, excluding PPP loans(6) 1.13 %   1.02 %   1.07 %   1.01 %   1.05 %
    Non-accrual loans to total loans, excluding PCD and PPP loans(6) 0.93 %   0.80 %   0.78 %   0.70 %   0.71 %
    NPLs to total loans 1.08 %   1.00 %   1.01 %   0.95 %   1.09 %
    NPLs to total loans, excluding PPP loans(6) 1.16 %   1.05 %   1.10 %   1.04 %   1.09 %
    NPLs to total loans, excluding PCD and PPP loans(6) 0.97 %   0.83 %   0.81 %   0.72 %   0.75 %
    NPAs to total loans plus foreclosed assets 1.17 %   1.11 %   1.11 %   1.09 %   1.24 %
    NPAs to total loans plus foreclosed assets, excluding PPP loans(6) 1.26 %   1.18 %   1.21 %   1.18 %   1.24 %
    NPAs to total loans plus foreclosed assets, excluding PCD and PPP loans(6) 1.07 %   0.96 %   0.93 %   0.87 %   0.91 %
    NPAs to tangible common equity plus ACL 10.23 %   9.27 %   9.37 %   9.38 %   10.07 %
    Non-accrual loans to total assets 0.75 %   0.68 %   0.68 %   0.66 %   0.74 %
    Performing loans classified as substandard and special mention to corporate loans(6)(7) 6.45 %   7.26 %   6.36 %   3.94 %   4.15 %
    Performing loans classified as substandard and special mention to corporate loans, excluding PPP loans(6)(7) 7.19 %   7.84 %   7.13 %   4.40 %   4.15 %
    Allowance for credit losses and net charge-off ratios
    ACL to total loans 1.60 %   1.67 %   1.68 %   1.66 %   1.62 %
    ACL to non-accrual loans 153.67 %   173.33 %   171.95 %   177.98 %   154.64 %
    ACL to NPLs 148.64 %   168.15 %   167.54 %   173.93 %   149.49 %
    NCOs to average loans(2) 0.26 %   0.29 %   0.42 %   0.36 %   0.37 %
    NCOs to average loans, excluding PPP loans(2) 0.28 %   0.31 %   0.46 %   0.38 %   0.37 %
    NCOs to average loans, excluding PCD and PPP loans(2) 0.22 %   0.12 %   0.26 %   0.27 %   0.32 %

    Footnotes to Selected Financial Information
    (1)   See the "Non-GAAP Reconciliations" section for the detailed calculation.
    (2)   Annualized based on the actual number of days for each period presented.
    (3)   Presented on a tax-equivalent basis, assuming the applicable federal income tax rate of 21%.
    (4)   Cost of funds expresses total interest expense as a percentage of total average funding sources.
    (5)  Foreclosed assets consists of OREO and other foreclosed assets acquired in partial or total satisfaction of defaulted loans. Other foreclosed assets are included in other assets in the Consolidated Statements of Financial Condition.
    (6)   This ratio excludes PPP loans that are fully guaranteed by the SBA. As a result, no allowance for credit losses is associated with these loans.
    (7)   Performing loans classified as substandard and special mention excludes accruing TDRs.

     
    First Midwest Bancorp, Inc.
    Non-GAAP Reconciliations (Unaudited)
    (Amounts in thousands, except per share data)
                       
      Quarters Ended
      March 31,   December 31,   September 30,   June 30,   March 31,
      2021   2020   2020   2020   2020
    EPS                  
    Net income $ 45,023     $ 41,605     $ 27,623     $ 19,064     $ 19,606  
    Dividends and accretion on preferred stock (4,034 )   (4,049 )   (4,033 )   (1,037 )    
    Net income applicable to non-vested restricted shares (486 )   (369 )   (236 )   (187 )   (192 )
    Net income applicable to common shares 40,503     37,187     23,354     17,840     19,414  
    Adjustments to net income:                  
    Optimization costs 1,525     1,493     18,376          
    Tax effect of optimization costs (381 )   (373 )   (4,594 )        
    Acquisition and integration related expenses 245     1,860     881     5,249     5,472  
    Tax effect of acquisition and integration related expenses (61 )   (465 )   (220 )   (1,312 )   (1,368 )
    Swap termination costs     17,567     14,285          
    Tax effect of swap termination costs     (4,392 )   (3,571 )        
    Income tax benefits     (3,639 )            
    Net securities (gains) losses         (14,328 )       1,005  
    Tax effect of net securities (gains) losses         3,582         (251 )
    Total adjustments to net income, net of tax 1,328     12,051     14,411     3,937     4,858  
    Net income applicable to common shares, adjusted(1) $ 41,831     $ 49,238     $ 37,765     $ 21,777     $ 24,272  
    Weighted-average common shares outstanding:                
    Weighted-average common shares outstanding (basic) 113,098     113,174     113,160     113,145     109,922  
    Dilutive effect of common stock equivalents 773     430     276     191     443  
    Weighted-average diluted common shares outstanding 113,871     113,604     113,436     113,336     110,365  
    Basic EPS $ 0.36     $ 0.33     $ 0.21     $ 0.16     $ 0.18  
    Diluted EPS $ 0.36     $ 0.33     $ 0.21     $ 0.16     $ 0.18  
    Diluted EPS, adjusted(1) $ 0.37     $ 0.43     $ 0.33     $ 0.19     $ 0.22  
    Anti-dilutive shares not included in the computation of diluted EPS                  
    Dividend Payout Ratio                  
    Dividends declared per share $ 0.14     $ 0.14     $ 0.14     $ 0.14     $ 0.14  
    Dividend payout ratio 38.89 %   42.42 %   66.67 %   87.50 %   77.78 %
    Dividend payout ratio, adjusted(1) 37.84 %   32.56 %   42.42 %   73.68 %   63.64 %
                       
    Note: Non-GAAP Reconciliations footnotes are located at the end of this section.
     


     
    First Midwest Bancorp, Inc.
    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,
      2021   2020   2020   2020   2020
    Return on Average Common and Tangible Common Equity            
    Net income applicable to common shares $ 40,503     $ 37,187     $ 23,354     $ 17,840     $ 19,414  
    Intangibles amortization 2,807     2,807     2,810     2,820     2,770  
    Tax effect of intangibles amortization (702 )   (702 )   (703 )   (705 )   (693 )
    Net income applicable to common shares, excluding intangibles amortization 42,608     39,292     25,461     19,955     21,491  
    Total adjustments to net income, net of tax(1) 1,328     12,051     14,411     3,937     4,858  
    Net income applicable to common shares, adjusted(1) $ 43,936     $ 51,343     $ 39,872     $ 23,892     $ 26,349  
    Average stockholders' common equity $ 2,453,253     $ 2,444,911     $ 2,444,594     $ 2,443,212     $ 2,415,157  
    Less: average intangible assets (931,322 )   (934,347 )   (938,712 )   (934,022 )   (887,600 )
    Average tangible common equity $ 1,521,931     $ 1,510,564     $ 1,505,882     $ 1,509,190     $ 1,527,557  
    Return on average common equity(2) 6.70 %   6.05 %   3.80 %   2.94 %   3.23 %
    Return on average common equity, adjusted(1)(2) 6.92 %   8.01 %   6.15 %   3.58 %   4.04 %
    Return on average tangible common equity(2) 11.35 %   10.35 %   6.73 %   5.32 %   5.66 %
    Return on average tangible common equity, adjusted(1)(2) 11.71 %   13.53 %   10.53 %   6.37 %   6.94 %
    Return on Average Assets            
    Net income $ 45,023     $ 41,605     $ 27,623     $ 19,064     $ 19,606  
    Total adjustments to net income, net of tax(1) 1,328     12,051     14,411     3,937     4,858  
    Net income, adjusted(1) $ 46,351     $ 53,656     $ 42,034     $ 23,001     $ 24,464  
    Average assets $ 20,919,040     $ 20,882,325     $ 21,526,695     $ 20,868,106     $ 18,404,821  
    Return on average assets(2) 0.87 %   0.79 %   0.51 %   0.37 %   0.43 %
    Return on average assets, adjusted(1)(2) 0.90 %   1.02 %   0.78 %   0.44 %   0.53 %
    Noninterest Expense to Average Assets            
    Noninterest expense $ 118,425     $ 117,971     $ 131,074     $ 120,330     $ 117,331  
    Less:                  
    Optimization costs (1,525 )   (1,493 )   (18,376 )        
    Acquisition and integration related expenses (245 )   (1,860 )   (881 )   (5,249 )   (5,472 )
    Total $ 116,655     $ 114,618     $ 111,817     $ 115,081     $ 111,859  
    Average assets $ 20,919,040     $ 20,882,325     $ 21,526,695     $ 20,868,106     $ 18,404,821  
    Less: average PPP loans (1,014,798 )   (1,013,511 )   (1,194,808 )   (887,977 )    
    Average assets, excluding PPP loans $ 19,904,242     $ 19,868,814     $ 20,331,887     $ 19,980,129     $ 18,404,821  
    Noninterest expense to average assets(2) 2.30 %   2.25 %   2.42 %   2.32 %   2.56 %
    Noninterest expense, adjusted to average assets, excluding PPP loans(2) 2.38 %   2.29 %   2.19 %   2.32 %   2.44 %
                       
    Note: Non-GAAP Reconciliations footnotes are located at the end of this section.
     


     
    First Midwest Bancorp, Inc.
    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,
      2021   2020   2020   2020   2020
                       
    Efficiency Ratio Calculation                
    Noninterest expense $ 118,425     $ 117,971     $ 131,074     $ 120,330     $ 117,331  
    Less:                  
    Optimization costs (1,525 )   (1,493 )   (18,376 )        
    Acquisition and integration related expenses (245 )   (1,860 )   (881 )   (5,249 )   (5,472 )
    Net OREO expense (589 )   (106 )   (544 )   (126 )   (420 )
    Total $ 116,066     $ 114,512     $ 111,273     $ 114,955     $ 111,439  
    Tax-equivalent net interest income(3) $ 142,098     $ 149,141     $ 143,821     $ 146,389     $ 144,728  
    Noninterest income 45,803     27,715     40,585     32,991     39,362  
    Less:                  
    Swap termination costs     17,567     14,285          
    Net securities (gains) losses         (14,328 )       1,005  
    Total $ 187,901     $ 194,423     $ 184,363     $ 179,380     $ 185,095  
    Efficiency ratio 61.77 %   58.90 %   60.36 %   64.08 %   60.21 %
    Pre-Tax, Pre-Provision Earnings                
    Net Income $ 45,023     $ 41,605     $ 27,623     $ 19,064     $ 19,606  
    Income tax expense 17,372     5,743     8,690     6,182     6,468  
    Provision for credit losses 6,098     10,507     15,927     32,649     39,532  
    Pre-Tax, Pre-Provision Earnings $ 68,493     $ 57,855     $ 52,240     $ 57,895     $ 65,606  
    Adjustments to pre-tax, pre-provision earnings:                  
    Optimization costs $ 1,525     $ 1,493     $ 18,376     $     $  
    Acquisition and integration related expenses 245     1,860     881     5,249     5,472  
    Swap termination costs     17,567     14,285          
    Net securities (gains) losses         (14,328 )       1,005  
    Total adjustments 1,770     20,920     19,214     5,249     6,477  
    Pre-Tax, Pre-Provision Earnings, adjusted $ 70,263     $ 78,775     $ 71,454     $ 63,144     $ 72,083  
                       
    Note: Non-GAAP Reconciliations footnotes are located at the end of this section.
     


     
    First Midwest Bancorp, Inc.
    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,
      2021   2020   2020   2020   2020
    Tangible Common Equity                  
    Stockholders' equity, common $ 2,422,815     $ 2,459,506     $ 2,433,671     $ 2,425,711     $ 2,435,707  
    Less: goodwill and other intangible assets (928,974 )   (932,764 )   (935,801 )   (940,182 )   (935,241 )
    Tangible common equity 1,493,841     1,526,742     1,497,870     1,485,529     1,500,466  
    Less: AOCI 22,096     (26,379 )   (25,749 )   (28,727 )   (35,323 )
    Tangible common equity, excluding AOCI $ 1,515,937     $ 1,500,363     $ 1,472,121     $ 1,456,802     $ 1,465,143  
    Total assets $ 21,208,591     $ 20,838,678     $ 21,088,143     $ 21,244,881     $ 19,753,300  
    Less: goodwill and other intangible assets (928,974 )   (932,764 )   (935,801 )   (940,182 )   (935,241 )
    Tangible assets 20,279,617     19,905,914     20,152,342     20,304,699     18,818,059  
    Less: PPP loans (1,109,442 )   (785,563 )   (1,196,538 )   (1,179,403 )    
    Tangible assets, excluding PPP loans $ 19,170,175     $ 19,120,351     $ 18,955,804     $ 19,125,296     $ 18,818,059  
    Tangible common equity to tangible assets 7.37 %   7.67 %   7.43 %   7.32 %   7.97 %
    Tangible common equity to tangible assets, excluding PPP loans 7.79 %   7.98 %   7.90 %   7.77 %   7.97 %
    Tangible common equity, excluding AOCI, to tangible assets 7.48 %   7.54 %   7.30 %   7.17 %   7.79 %
    Tangible common equity, excluding AOCI, to tangible assets, excluding PPP loans 7.91 %   7.85 %   7.77 %   7.62 %   7.79 %
    Tangible common equity to risk-weighted assets 9.73 %   9.93 %   9.84 %   9.61 %   9.63 %
                       

    Footnotes to Non-GAAP Reconciliations
    (1)   Adjustments to net income for each period presented are detailed in the EPS non-GAAP reconciliation above. For additional discussion of adjustments, see the "Non-GAAP Financial Information" section.
    (2)   Annualized based on the actual number of days for each period presented.
    (3)   Presented on a tax-equivalent basis, assuming the applicable federal income tax rate of 21%.




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    First Midwest Bancorp, Inc. Announces 2021 First Quarter Results – EPS Up 100% From a Year Ago CHICAGO, April 20, 2021 (GLOBE NEWSWIRE) - First Midwest Bancorp, Inc. (the "Company" or "First Midwest"), the holding company of First Midwest Bank (the "Bank"), today reported results of operations and financial condition for the first quarter …