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First Midwest Bancorp Inc. Reports Operating Results (10-Q)

August 10, 2009 | About:

First Midwest Bancorp Inc. (FMBI) filed Quarterly Report for the period ended 2009-06-30.

FIRST MIDWEST BANCORP INC. is a multi-bank holding company engaged in commercial banking trust investment management insurance mortgage origination and servicing activities. First Midwest Bancorp Inc. has a market cap of $511.56 million; its shares were traded at around $10.52 with and P/S ratio of 1.1. The dividend yield of First Midwest Bancorp Inc. stocks is 0.38%. First Midwest Bancorp Inc. had an annual average earning growth of 4.1% over the past 5 years.

Highlight of Business Operations:

Net income was $2.7 million, before adjustment for preferred dividends and non-vested restricted shares, with $63,000 available to common shareholders after such adjustments compared to income of $27.0 million for second quarter 2008. We recorded a loss before taxes of $3.7 million for second quarter 2009 compared to income of $27.0 million for second quarter 2008, with the difference largely due to higher provision for loan losses, partially offset by an increase in net securities gains. Provision for loan losses for second quarter 2009 was $36.3 million compared to $5.8 million for second quarter 2008. Pre-tax earnings, excluding the provision for loan losses, net market-related gains, and FDIC special deposit insurance assessment from each period, were $29.4 million for second quarter 2009 and $37.4 million for second quarter 2008, with the decline substantially due to increases in operating expenses of $2.9 million incurred to remediate loans and maintain other real estate owned, a $2.6 million reversal of year to date interest accrued on loans placed on non-accrual, and a $2.3 million increase in FDIC deposit insurance assessment apart from the special assessment noted above.

Performance for the quarter reflected the execution of a number of planned steps taken to strengthen the overall company and navigate what remains a very difficult operating environment. We increased loan loss reserves by $11.5 million to 2.39% of total loans, restructured an additional $21.3 million in delinquent loans, reduced early stage delinquencies by nearly 30%, and held total non-accrual loans, including loans past due 90 days or more, at essentially the March 31, 2009 level. Concurrently, we took advantage of market conditions to sell securities at a net gain and redeploy other assets that, in combination, enabled us to improve our key capital ratios.

Loans outstanding at June 30, 2009 were $5.3 billion, an increase of $158.4 million from prior year. For the same 12-month period, average transactional deposits increased $87.4 million to $3.7 billion. The increase in transactional deposits was due largely to growth in money market account balances.

Although noninterest expense for the quarter and six-month periods ended June 30, 2009 increased $9.3 million and $8.3 million, respectively, from the same periods in 2008, over half the increase for each period was due to higher FDIC deposit premium assessments, including a special industry-wide assessment. The remainder was due to higher expenses associated with other real estate owned and loan remediation costs.

Net securities gains of $10.7 million from sales of mortgage-backed and municipal securities more than offset impairment charges of $4.1 million associated with four trust-preferred collateralized debt obligations.

Read the The complete ReportFMBI is in the portfolios of Kenneth Fisher of Fisher Asset Management, LLC, Dodge & Cox.

Rating: 3.3/5 (4 votes)

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