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

November 06, 2009 | About:

First Midwest Bancorp Inc. (NASDAQ:FMBI) filed Quarterly Report for the period ended 2009-09-30.

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 $475.4 million; its shares were traded at around $9.67 with and P/S ratio of 1.1. The dividend yield of First Midwest Bancorp Inc. stocks is 0.4%. 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 $3.4 million, before adjustment for preferred dividends and non-vested restricted shares, with $773,000, or $0.02 per share, available to common shareholders after such adjustments. This compares to net income available to common shareholders of $24.1 million, or $0.50 per share, for third quarter 2008, with the difference largely due to higher provision for loan losses, FDIC insurance premiums, and loan remediation expenses, partially offset by an increase in net securities and debt extinguishment gains.

During the quarter, we also notably improved the quality of our capital composition by increasing our level of tangible common equity. We did so through the successful exchange of $68.8 million of subordinated and trust preferred debt for common stock at a discount from the par value of the debt securities, with a resulting pre-tax gain of $14.0 million.

Outstanding loans totaled $5.31 billion as of September 30, 2009, an annualized decrease of 1.3% from December 31, 2008. During the nine-month period ended September 30, 2009, we extended approximately $90 million in new credit, net of paydowns, which was more than offset by net charge-offs, conversion of loans to OREO, and the securitization of $25.7 million of real estate 1-4 family loans, which are now included in the securities available-for-sale portfolio.

Average core transactional deposits for third quarter 2009 were $3.86 billion, an increase of $271.5 million, or 7.6% from third quarter 2008. The increase from prior year was due primarily to growth in money market account balances as a result of a successful promotional campaign.

During third quarter 2009, we increased our reserve for loan losses $6.7 million from June 30, 2009 and $40.4 million from December 31, 2008. The reserve for loan losses represented 2.53% of total loans outstanding at September 30, 2009, compared to 2.39% at June 30, 2009 and 1.75% at December 31, 2008.

Net securities losses were $7.0 million for third quarter 2009. Gains totaling $4.5 million on sales of collateralized mortgage-backed, municipal, and other securities were more than offset by an other-than-temporary impairment charge of $11.5 million associated with our portfolio of trust-preferred collateralized debt obligations.

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

About the author:

Charlie Tian, Ph.D. - Founder of GuruFocus. You can now order his book Invest Like a Guru on Amazon.

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