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First Midwest Bancorp, Inc. Announces 2016 Second Quarter Results


/EINPresswire.com/ -- ITASCA, IL -- (Marketwired) -- 07/19/16 -- 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 second quarter of 2016. Net income for the second quarter of 2016 was $25.3 million, or $0.31 per share. This compares to $18.0 million, or $0.23 per share, for the first quarter of 2016, and $22.6 million, or $0.29 per share, for the second quarter of 2015. Performance for the second and first quarters of 2016 were impacted by acquisition and integration related pre-tax expenses of $618,000 and $5.0 million, respectively. Excluding these expenses, earnings per share was $0.32 for the second quarter of 2016 compared to $0.27 for the first quarter of 2016.

SELECT SECOND QUARTER HIGHLIGHTS

  • Increased earnings per share to $0.32, up 19% from the first quarter of 2016 and 10% from second quarter of 2015, excluding acquisition and integration related expenses.

  • Grew fee-based revenues to $36 million, an increase of 7% from the first quarter of 2016 and 14% from the second quarter of 2015.

  • Improved efficiency ratio to 61%, compared to 65% for the first quarter of 2016 and 62% for the second quarter of 2015.

  • Expanded total loans to $8.0 billion, up 8% annualized from March 31, 2016 and 17% from June 30, 2015.

  • Reported non-performing assets to total loans plus OREO of 0.93%, down 17 basis points from June 30, 2015 and consistent with March 31, 2016.

  • Grew average core deposits to $7.7 billion, up 9% from the first quarter of 2016 and 13% from the second quarter of 2015.

  • Announced the pending acquisition of Standard Bancshares, Inc. on June 28, 2016, with $2.5 billion in assets, $2.2 billion in deposits, and $1.8 billion in loans.

"It was an active second quarter, reflecting continued, successful execution on a number of business fronts," said Michael L. Scudder, President and Chief Executive Officer of First Midwest Bancorp, Inc. "Core earnings per share improved by 19% to $0.32 as compared to first quarter 2016, benefiting from the full quarter impact of our acquisition of The National Bank and Trust Company of Sycamore as well as organic earning asset and revenue growth and controlled operating expenses. Our loan growth was both strong and balanced, growing by 8% annualized versus the end of last quarter and 17% as contrasted to a year ago."

Mr. Scudder continued, "Against a backdrop of market volatility and uncertainty, we remain centered on those actions which enhance the value of our franchise and inure to the long term benefit of our shareholders. Our pending acquisition of Standard Bank and Trust Company further positions us as a premier market leader in metro Chicago and reinforces our commitment to relationship based business banking. At the same time, we continue to strengthen our lines of business and work to efficiently grow and diversify our revenues. Combined with our strong capital foundation, these efforts add to our underlying business momentum and position us well for future performance and growth."

ACQUISITIONS

Pending Acquisition

Standard Bancshares, Inc.

On June 28, 2016, the Company entered into a definitive agreement to acquire Standard Bancshares, Inc. ("Standard"), the holding company for Standard Bank and Trust Company. With the acquisition, the Company would acquire 35 banking offices in the southwest Chicago suburbs and adjacent markets in northwest Indiana. Standard has total assets of approximately $2.5 billion with $2.2 billion in deposits, of which over 90% are core deposits, and $1.8 billion in loans, of which 80% are commercial-related. If the merger is completed, the merger consideration to Standard shareholders will be Company common stock, with an overall transaction value of approximately $365 million as of the date of announcement. The acquisition is expected to close in late 2016 or early 2017, subject to customary regulatory approvals and closing conditions, as well as Company and Standard shareholder approval.

Completed Acquisitions

NI Bancshares Corporation

On March 8, 2016, the Company completed its acquisition of NI Bancshares Corporation ("NI Bancshares"), the holding company for The National Bank & Trust Company of Sycamore. With the acquisition, the Company obtained ten banking offices in northern Illinois, and added approximately $400 million in loans and $600 million in deposits. In addition, the Company acquired over $700 million in trust assets under management, which increased the Company's trust assets under management by approximately 10%. The merger consideration totaled $70.1 million and consisted of $54.9 million in Company common stock and $15.2 million in cash.

Peoples Bancorp, Inc.

On December 3, 2015, the Company completed its acquisition of Peoples Bancorp, Inc. ("Peoples") and its wholly-owned banking subsidiary, The Peoples' Bank of Arlington Heights. With the acquisition, the Company acquired two banking offices in Arlington Heights, Illinois, and approximately $92 million in deposits and $54 million in loans. The merger consideration totaled $16.8 million and was paid in cash.


OPERATING PERFORMANCE

                   Net Interest Income and Margin Analysis
                        (Dollar amounts in thousands)

                                         Quarters Ended
                    --------------------------------------------------------
                           June 30, 2016               March 31, 2016
                    --------------------------- ---------------------------
                                Interest Yield/             Interest Yield/
                      Average    Earned/  Rate    Average    Earned/  Rate
                      Balance     Paid     (%)    Balance     Paid     (%)
                    ----------- -------- ------ ----------- -------- ------
Assets:
Other interest-
 earning assets     $   300,945 $    426   0.57 $   241,645 $    342   0.57
Securities (1)        1,721,781   10,636   2.47   1,495,462    9,998   2.67
Federal Home Loan
 Bank ("FHLB") and
 Federal Reserve
 Bank ("FRB") stock      42,561      200   1.88      39,773      159   1.60
Loans (1)(2)          7,883,806   87,481   4.46   7,346,035   79,356   4.34
                    ----------- -------- ------ ----------- -------- ------
  Total interest-
   earning assets
   (1)                9,949,093   98,743   3.99   9,122,915   89,855   3.96
                                -------- ------             -------- ------
Cash and due from
 banks                  154,693                     133,268
Allowance for loan
 and covered loan
 losses                 (80,561)                    (75,654)
Other assets            945,291                     876,316
    Total assets    $10,968,516                 $10,056,845
                    ===========                 ===========
Liabilities and
 Stockholders'
 Equity:
Interest-bearing
 core deposits (3)  $ 4,941,779      991   0.08 $ 4,607,738      948   0.08
Time deposits         1,277,694    1,491   0.47   1,183,463    1,437   0.49
Borrowed funds          461,363    1,499   1.31     303,232    1,316   1.75
Senior and
 subordinated debt      162,836    2,588   6.39     201,253    3,133   6.26
                    ----------- -------- ------ ----------- -------- ------
  Total interest-
   bearing
   liabilities        6,843,672    6,569   0.39   6,295,686    6,834   0.44
                                -------- ------             -------- ------
Demand deposits (3)   2,771,813                   2,463,017
                    -----------                 -----------
  Total funding
   sources            9,615,485                   8,758,703
Other liabilities       117,534                     119,554
Stockholders'
 equity - common      1,235,497                   1,178,588
    Total
     liabilities
     and
     stockholders'
     equity         $10,968,516                 $10,056,845
                    ===========                 ===========
Tax-equivalent net
 interest
 income/margin (1)                92,174   3.72               83,021   3.66
                                         ======                      ======
Tax-equivalent
 adjustment                       (2,193)                     (2,307)
                                --------                    --------
    Net interest
     income (GAAP)              $ 89,981                    $ 80,714
                                ========                    ========



                                        Quarters Ended
                                ------------------------------
                                         June 30, 2015
                                ------------------------------
                                             Interest   Yield/
                                  Average    Earned/     Rate
                                  Balance      Paid      (%)
                                ----------  ---------  -------
             Assets:
             Other interest-
              earning assets    $  669,556  $     516     0.31
             Securities (1)      1,177,516      9,792     3.33
             Federal Home Loan
              Bank ("FHLB") and
              Federal Reserve
              Bank ("FRB") stock    38,748        368     3.80
             Loans (1)(2)        6,815,781     76,573     4.51
                                ----------  ---------  -------
               Total interest-
                earning assets
                (1)              8,701,601     87,249     4.02
                                            ---------  -------
             Cash and due from
              banks                133,180
             Allowance for loan
              and covered loan
              losses               (73,865)
             Other assets          881,613
                 Total assets   $9,642,529
                                ==========
             Liabilities and
              Stockholders'
              Equity:
             Interest-bearing
              core deposits (3) $4,407,168        896     0.08
             Time deposits       1,216,371      1,506     0.50
             Borrowed funds        140,002        118     0.34
             Senior and
              subordinated debt    200,999      3,134     6.25
                                ----------  ---------  -------
               Total interest-
                bearing
                liabilities      5,964,540      5,654     0.38
                                            ---------  -------
             Demand deposits (3) 2,437,742
                                ----------
               Total funding
                sources          8,402,282
             Other liabilities     116,717
             Stockholders'
              equity - common    1,123,530
                 Total
                  liabilities
                  and
                  stockholders'
                  equity        $9,642,529
                                ==========
             Tax-equivalent net
              interest
              income/margin (1)                81,595     3.76
                                                       =======
             Tax-equivalent
              adjustment                       (2,693)
                                            ---------
                 Net interest
                  income (GAAP)             $  78,902
                                            =========

(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 35%. 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 accompanying Non-GAAP Financial Information
    discussion and the Non-GAAP Reconciliations for details on the
    calculation of tax-equivalent net interest income.
(2) Includes loans acquired through Federal Deposit Insurance Corporation
    ("FDIC")-assisted transactions subject to loss sharing agreements
    ("covered loans"), which totaled $27.2 million, $28.4 million, and $57.9
    million at June 30, 2016, March 31, 2016, and June 30, 2015,
    respectively.
(3) See the Deposit Composition table for further average balance detail by
    category.

For the second quarter of 2016, total average interest-earning assets rose $826.2 million from the first quarter of 2016 and $1.2 billion from the second quarter of 2015. The increase from both prior periods was driven primarily by $528.8 million of interest-earning assets acquired in the NI Bancshares transaction late in the first quarter of 2016, as well as leveraging growth in deposits and FHLB advances. Compared to the second quarter of 2015, the rise in average interest-earning assets was also impacted by $96.2 million of interest-earning assets acquired in the Peoples transaction late in the fourth quarter of 2015.

Average funding sources increased by $856.8 million from the first quarter of 2016 and $1.2 billion from the second quarter of 2015. Compared to both prior periods, the increase resulted primarily from deposits acquired in the NI Bancshares transaction and the full quarter impact of the addition of $262.5 million of FHLB advances during the first quarter of 2016. In addition, deposits acquired in the Peoples transaction contributed to the increase in average funding sources compared to the second quarter of 2015.

Tax-equivalent net interest margin for the current quarter was 3.72%, increasing 6 basis points from the first quarter of 2016 and decreasing 4 basis points from the second quarter of 2015. The increase in tax-equivalent net interest margin from the first quarter of 2016 was due primarily to higher accretion on acquired loans and lower funding costs resulting from the maturity of $38.5 million of subordinated notes early in the second quarter of 2016, partially offset by the addition of lower yielding securities. Compared to the second quarter of 2015, the decrease in tax-equivalent net interest margin was due primarily to the addition of FHLB advances and lower covered loan income, partially offset by the maturity of subordinated notes.

Net interest income increased by 11.5% and 14.0% from the first quarter of 2016 and second quarter of 2015, respectively, due primarily to the increase in average loans of 7.3% and 15.7% from the same periods.

Acquired loan accretion contributed $3.9 million, $1.4 million, and $3.6 million to net interest income for the second quarter of 2016, the first quarter of 2016, and the second quarter of 2015, respectively.


          Fee-based Revenues and Total Noninterest Income Analysis
                       (Dollar amounts in thousands)

                                                           June 30, 2016
                                  Quarters Ended        Percent Change from
                          ----------------------------- -------------------
                           June 30, March 31,  June 30, March 31,  June 30,
                             2016      2016      2015      2016      2015
                          --------- --------- --------- ---------  --------
Service charges on
 deposit accounts         $  10,169 $   9,473 $   9,886       7.3       2.9
Wealth management fees        8,642     7,559     7,433      14.3      16.3
Card-based fees               7,592     6,718     6,953      13.0       9.2
Merchant servicing fees       3,170     3,028     2,938       4.7       7.9
Mortgage banking income       1,863     1,368     1,439      36.2      29.5
Other service charges,
 commissions, and fees        4,498     5,448     2,924     (17.4)     53.8
                          --------- --------- --------- ---------  --------
  Total fee-based
   revenues                  35,934    33,594    31,573       7.0      13.8
Other income                  1,865     1,445     1,900      29.1      (1.8)
Net securities gains             23       887       515     (97.4)    (95.5)
                          --------- --------- --------- ---------  --------
    Total noninterest
     income               $  37,822 $  35,926 $  33,988       5.3      11.3
                          ========= ========= ========= =========  ========

Total fee-based revenues of $35.9 million grew $2.3 million, or 7.0%, compared to the first quarter of 2016, with services provided to customers acquired in the NI Bancshares transaction contributing to the majority of the increase. In addition, the increase in card-based fees from the first quarter of 2016 reflected seasonally higher transaction volumes and mortgage banking income rose as a result of $52.1 million in sales of 1-4 family mortgage loans in the secondary market during the second quarter of 2016, compared to $38.7 million in the first quarter of 2016. These increases were partially offset by lower sales of capital market products to commercial clients within other service charges, commissions, and fees.

Compared to the second quarter of 2015, total fee-based revenues grew $4.4 million, or 13.8%, with approximately half due to services provided to customers acquired in the NI Bancshares and Peoples transactions. In addition, card-based fees increased as a result of higher transaction volumes and other service charges, commissions, and fees grew due to sales of capital market products to commercial clients and gains realized on the sale of equipment financing contracts originated by First Midwest Equipment Finance.

Total noninterest income of $37.8 million grew 5.3% and 11.3% from the first quarter of 2016 and the second quarter of 2015, respectively.


                        Noninterest Expense Analysis
                       (Dollar amounts in thousands)

                                                           June 30, 2016
                                Quarters Ended          Percent Change from
                       -------------------------------  -------------------
                        June 30,  March 31,   June 30,  March 31,  June 30,
                          2016       2016       2015       2016      2015
                       ---------  ---------  ---------  ---------  --------
Salaries and employee
 benefits:
  Salaries and wages   $  37,916  $  36,296  $  33,096        4.5      14.6
  Retirement and other
   employee benefits       8,351      8,298      7,198        0.6      16.0
                       ---------  ---------  ---------  ---------  --------
    Total salaries and
     employee benefits    46,267     44,594     40,294        3.8      14.8
                       ---------  ---------  ---------  ---------  --------
Net occupancy and
 equipment expense         9,928      9,697      9,622        2.4       3.2
Professional services      5,292      5,920      5,322      (10.6)     (0.6)
Technology and related
 costs                     3,669      3,701      3,527       (0.9)      4.0
Merchant card expense      2,724      2,598      2,472        4.8      10.2
Advertising and
 promotions                1,927      1,589      2,344       21.3     (17.8)
Cardholder expenses        1,512      1,359      1,292       11.3      17.0
Net other real estate
 owned ("OREO")
 expense                   1,122        664      1,861       69.0     (39.7)
Other expenses             8,295      7,447      6,717       11.4      23.5
                       ---------  ---------  ---------  ---------  --------
    Total noninterest
     expense excluding
     acquisition and
     integration
     related expenses
     (1)                  80,736     77,569     73,451        4.1       9.9
Acquisition and
 integration related
 expenses                    618      5,020         --      (87.7)      N/M
                       ---------  ---------  ---------  ---------  --------
      Total
       noninterest
       expense         $  81,354  $  82,589  $  73,451       (1.5)     10.8
                       =========  =========  =========  =========  ========
Efficiency ratio (2)          61%        65%        62%

N/M - Not meaningful.

(1) See the Non-GAAP Financial Information discussion for detail.
(2) The efficiency ratio expresses noninterest expense, excluding OREO
    expense, as a percentage of tax-equivalent net interest income plus
    total fee-based revenues, other income, and tax-equivalent adjusted
    bank-owned life insurance ("BOLI") income. In addition, acquisition and
    integration related pre-tax expenses of $618,000 and $5.0 million are
    excluded from the efficiency ratio for the second and first quarters of
    2016, respectively. See the accompanying Non-GAAP Financial Information
    discussion and Non-GAAP Reconciliations for details on the calculation
    of the efficiency ratio.

The efficiency ratio improved to 61% in the second quarter of 2016 compared to 65% for the first quarter of 2016 and 62% for the second quarter of 2015. Excluding acquisition and integration related expenses, total noninterest expense increased by 4.1% from the first quarter of 2016 and 9.9% compared to the second quarter of 2015, with the operations associated with the NI Bancshares and Peoples transactions contributing to substantially all of the linked quarter increase and approximately two-thirds of the increase from second quarter of 2015. These costs primarily occurred within salaries and employee benefits expense, net occupancy and equipment expense, technology and related costs, cardholder expenses, and other expense.

The decrease in professional services from the first quarter of 2016 resulted primarily from a reduction in covered loan remediation expenses.


LOAN PORTFOLIO AND ASSET QUALITY

                         Loan Portfolio Composition
                       (Dollar amounts in thousands)

                                                           June 30, 2016
                                  As of                 Percent Change From
                   ----------------------------------- --------------------
                     June 30,   March 31,    June 30,  March 31,   June 30,
                       2016        2016        2015       2016       2015
                   ----------- ----------- ----------- ---------  ---------
Commercial and
 industrial        $ 2,699,742 $ 2,634,391 $ 2,366,056       2.5       14.1
Agricultural           401,858     422,231     377,410      (4.8)       6.5
Commercial real
 estate:
  Office, retail,
   and industrial    1,529,675   1,566,395   1,432,502      (2.3)       6.8
  Multi-family         587,104     562,065     557,947       4.5        5.2
  Construction         371,016     260,743     190,970      42.3       94.3
  Other commercial
   real estate       1,000,655   1,060,302     871,119      (5.6)      14.9
                   ----------- ----------- ----------- ---------  ---------
    Total
     commercial
     real estate     3,488,450   3,449,505   3,052,538       1.1       14.3
                   ----------- ----------- ----------- ---------  ---------
    Total
     corporate
     loans           6,590,050   6,506,127   5,796,004       1.3       13.7
                   ----------- ----------- ----------- ---------  ---------
Home equity            722,881     683,171     599,320       5.8       20.6
1-4 family
 mortgages             415,581     390,887     283,562       6.3       46.6
Installment            223,845     213,979     113,382       4.6       97.4
                   ----------- ----------- ----------- ---------  ---------
    Total consumer
     loans           1,362,307   1,288,037     996,264       5.8       36.7
Covered loans           27,180      28,391      57,917      (4.3)     (53.1)
                   ----------- ----------- ----------- ---------  ---------
    Total loans    $ 7,979,537 $ 7,822,555 $ 6,850,185       2.0       16.5
                   =========== =========== =========== =========  =========

Total loans grew by 8.0% on an annualized basis from March 31, 2016 and 11.2% from June 30, 2015, excluding loans acquired in the NI Bancshares transaction of $363.2 million. Compared to both prior periods presented, growth in commercial and industrial loans reflects the continued expansion into select sector-based lending areas such as structured finance, asset-based lending, and equipment financing. The rise in construction loans compared to both prior periods presented was driven mainly by select commercial projects for which permanent financing is expected upon their completion. Consumer loans grew compared to both prior periods presented due to the continued expansion of mortgage and installment loans, as well as the addition of shorter-duration, floating rate home equity loans.


                               Asset Quality
                       (Dollar amounts in thousands)

                                                           June 30, 2016
                                    As of               Percent Change from
                       -------------------------------  -------------------
                        June 30,  March 31,   June 30,  March 31,  June 30,
                          2016       2016       2015       2016      2015
                       ---------  ---------  ---------  ---------  --------
Asset quality,
 excluding covered
 loans and covered
 OREO
Non-accrual loans      $  36,859  $  31,383  $  45,009       17.4     (18.1)
90 days or more past
 due loans, still
 accruing interest         5,406      5,483      2,744       (1.4)     97.0
                       ---------  ---------  ---------  ---------  --------
  Total non-performing
   loans                  42,265     36,866     47,753       14.6     (11.5)
Accruing troubled debt
 restructurings
 ("TDRs")                  2,491      2,702      3,067       (7.8)    (18.8)
OREO                      29,452     29,238     24,471        0.7      20.4
                       ---------  ---------  ---------  ---------  --------
  Total non-performing
   assets              $  74,208  $  68,806  $  75,291        7.9      (1.4)
                       =========  =========  =========  =========  ========
30-89 days past due
 loans                 $  22,770  $  29,826  $  28,625
Non-accrual loans to
 total loans                0.46%      0.40%      0.66%
Non-performing loans
 to total loans             0.53%      0.47%      0.70%
Non-performing assets
 to total loans plus
 OREO                       0.93%      0.88%      1.10%
Allowance for Credit
 Losses
Allowance for loan
 losses                $  80,105  $  77,150  $  71,463
Reserve for unfunded
 commitments               1,400      1,225      1,816
                       ---------  ---------  ---------
    Total allowance
     for credit losses $  81,505  $  78,375  $  73,279
                       =========  =========  =========
Allowance for credit
 losses to total loans
 (1)                        1.02%      1.00%      1.07%
Allowance for credit
 losses to loans,
 excluding acquired
 loans                      1.11%      1.11%      1.16%
Allowance for credit
 losses to non-accrual
 loans, excluding
 covered loans            217.34%    244.74%    152.01%

(1) This ratio includes acquired loans that are recorded at fair value
    through an acquisition adjustment, which incorporates credit risk as of
    the acquisition date with no allowance for credit losses being
    established at that time. As the acquisition adjustment is accreted into
    income over future periods, an allowance for credit losses on acquired
    loans is established as necessary to reflect credit deterioration.

Total non-performing assets represented 0.93% of total loans and OREO at June 30, 2016, compared to 0.88% at March 31, 2016 and down from 1.10% at June 30, 2015.


                              Charge-Off Data
                       (Dollar amounts in thousands)

                                          Quarters Ended
                      -----------------------------------------------------
                      June 30,   % of   March 31,    % of  June 30,   % of
                        2016     Total     2016     Total    2015     Total
                      --------  ------  ---------  ------- --------  ------
Net loan charge-offs
 (1):
    Commercial and
     industrial       $  1,450    28.3  $   1,396     34.3 $  3,273    59.2
    Agricultural            --      --         --       --       --      --
    Office, retail,
     and industrial      1,633    31.8        421     10.3    1,862    33.7
    Multi-family            83     1.6        179      4.4      466     8.4
    Construction           (12)   (0.2)       111      2.7     (188)   (3.4)
    Other commercial
     real estate           810    15.8      1,294     31.8     (603)  (10.9)
    Consumer             1,164    22.7        672     16.5      432     7.8
    Covered                  2      --         --       --      285     5.2
                      --------  ------  ---------  ------- --------  ------
      Total net loan
       charge-offs    $  5,130   100.0  $   4,073    100.0 $  5,527   100.0
                      ========  ======  =========  ======= ========  ======

Net loan charge-offs
 to average loans,
 annualized:
  Quarter-to-date         0.26%              0.22%             0.33%
  Year-to-date            0.24%              0.22%             0.41%

(1) Amounts represent charge-offs, net of recoveries.

DEPOSIT PORTFOLIO

                             Deposit Composition
                        (Dollar amounts in thousands)

                                                             June 30, 2016
                                                            Percent Change
                           Average for Quarters Ended            from
                      ----------------------------------- ------------------
                        June 30,   March 31,    June 30,  March 31, June 30,
                          2016        2016        2015       2016     2015
                      ----------- ----------- ----------- --------- --------
Demand deposits       $ 2,771,813 $ 2,463,017 $ 2,437,742      12.5     13.7
Savings deposits        1,655,566   1,575,174   1,470,441       5.1     12.6
NOW accounts            1,615,677   1,448,666   1,379,508      11.5     17.1
Money market accounts   1,670,536   1,583,898   1,557,219       5.5      7.3
                      ----------- ----------- ----------- --------- --------
  Core deposits         7,713,592   7,070,755   6,844,910       9.1     12.7
Time deposits and
 other                  1,277,694   1,183,463   1,216,371       8.0      5.0
                      ----------- ----------- ----------- --------- --------
    Total deposits    $ 8,991,286 $ 8,254,218 $ 8,061,281       8.9     11.5
                      =========== =========== =========== ========= ========

Average core deposits of $7.7 billion for the second quarter of 2016 increased by 9.1% and 12.7% compared to the first quarter of 2016 and the second quarter of 2015, respectively. The rise in average core deposits compared to both prior periods reflects the full quarter impact of the $443.1 million in core deposits assumed in the NI Bancshares transaction, which was completed late in the first quarter of 2016, and organic growth. Additionally, the rise in average core deposits from the first quarter of 2016 was impacted by the seasonal increase in average municipal deposits of nearly $180.0 million.


CAPITAL MANAGEMENT

                               Capital Ratios

                                                  As of
                              ---------------------------------------------
                               June 30,  March 31,  December 31,   June 30,
                                 2016       2016        2015         2015
                              ---------  ---------  ------------  ---------
Company regulatory capital
 ratios:
  Total capital to risk-
   weighted assets                10.68%     10.64%        11.15%     11.37%
  Tier 1 capital to risk-
   weighted assets                 9.83%      9.81%        10.28%     10.49%
  Common equity Tier 1
   ("CET1") to risk-weighted
   assets                          9.32%      9.30%         9.73%      9.93%
  Tier 1 capital to average
   assets                          8.94%      9.56%         9.40%      9.34%
Company tangible common
 equity ratios (1)(2):
  Tangible common equity to
   tangible assets                 8.29%      8.25%         8.59%      8.32%
  Tangible common equity,
   excluding other
   comprehensive loss, to
   tangible assets                 8.37%      8.39%         8.89%      8.54%
  Tangible common equity to
   risk-weighted assets            9.14%      9.04%         9.29%      9.55%

(1) These ratios are not subject to formal Federal Reserve regulatory
    guidance.
(2) Tangible common equity ("TCE") represents common stockholders' equity
    less goodwill and identifiable intangible assets. See the accompanying
    Non-GAAP Reconciliations for details of the calculation of these ratios.

Overall, the Company's regulatory capital ratios were consistent compared to March 31, 2016 as a result of an increase in retained earnings, offset by the impact of loan growth on risk-weighted assets. The reduction in Tier 1 capital to average assets from March 31, 2016 resulted from the full quarter impact of assets acquired in the NI Bancshares transaction.

The Board of Directors approved a quarterly cash dividend of $0.09 per common share during the second quarter of 2016, which is consistent with the quarterly dividend paid to shareholders in the first quarter of 2016 and follows a dividend increase from $0.08 to $0.09 per common share during the first quarter of 2015.

Conference Call

A conference call to discuss the Company's results, outlook, and related matters will be held on Wednesday, July 20, 2016 at 11:00 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, www.firstmidwest.com/investorrelations. 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 ID 10088402 beginning one hour after completion of the live call until 9:00 A.M. (ET) on July 28, 2016. 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 and Additional Information Available on Website

This press release and the accompanying unaudited Selected Financial Information are available through the "Investor Relations" section of First Midwest's website at www.firstmidwest.com/investorrelations.

Forward-Looking Statements

This press release 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," "predict," "probable," "potential," "possible," "target," "continue," "look forward," or "assume" and words of similar import. Forward-looking statements are not historical facts 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. Forward-looking statements are not guarantees of future performance, and we caution you not to place undue reliance on these statements. Forward-looking statements are made only as of the date of this press release, and we undertake no obligation to update any forward-looking statements contained in this press release to reflect new information or events or conditions after the date hereof.

Forward-looking statements may be deemed to include, among other things, statements relating to our future financial performance, the performance of our loan or securities portfolio, the expected amount of future credit reserves or charge-offs, corporate strategies or objectives, anticipated trends in our business, regulatory developments, acquisition transactions, including estimated synergies, cost savings and financial benefits of pending or consummated transactions, including First Midwest's proposed acquisition of Standard, and growth strategies, including possible future acquisitions. These statements are subject to certain risks, uncertainties and assumptions. For a discussion of these risks, uncertainties and assumptions, you should refer to the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2015, as well as our subsequent filings made with the Securities and Exchange Commission. However, these risks and uncertainties are not exhaustive. Other sections of such reports describe additional factors that could adversely impact our 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 management believes are useful because they assist investors in assessing the Company's operating performance. These non-GAAP financial measures include earnings per share and total non-interest expense, excluding certain significant transactions, tax-equivalent net interest income (including its individual components), tax-equivalent net interest margin, the efficiency ratio, tangible common equity to tangible assets, tangible common equity, excluding accumulated other comprehensive loss, to tangible assets, tangible common equity to risk-weighted assets, return on average tangible common equity, and return on average tangible common equity, excluding certain significant transactions.

Earnings per share, excluding certain significant transactions, and the efficiency ratio exclude acquisition and integration related expenses and property valuation adjustments. Management believes excluding these transactions from earnings per share and the efficiency ratio are useful in assessing the Company's underlying operational performance since these transactions do not pertain to its core business operations and their exclusion facilitates better comparability between periods.

The tax-equivalent adjustment to net interest income and net interest margin recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 35% tax rate. 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 enhances comparability for peer comparison purposes.

In management's view, tangible common equity measures are meaningful to the Company, as well as analysts and investors, in assessing the Company's use of equity and in facilitating comparisons with peers.

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. See the following reconciliations for details on the calculation of these measures to the extent presented herein.

Additional Information for Stockholders

The information contained herein does not constitute an offer to sell or a solicitation of an offer to buy any securities or a solicitation of any vote or approval. In connection with the proposed merger of First Midwest and Standard, First Midwest will file a registration statement on Form S-4 with the SEC. The registration statement will include a joint proxy statement of First Midwest and Standard, which also will constitute a prospectus of First Midwest, that First Midwest and Standard will send to their respective shareholders. Investors and shareholders are advised to read the joint proxy statement/prospectus when it becomes available because it will contain important information about First Midwest, Standard and the proposed transaction. When filed, this document and other documents relating to the merger filed by First Midwest can be obtained free of charge from the SEC's website at www.sec.gov. These documents also can be obtained free of charge by accessing First Midwest's website at www.firstmidwest.com under the tab "Investor Relations" and then under "SEC Filings." Alternatively, these documents, when available, can be obtained free of charge from First Midwest upon written request to First Midwest Bancorp, Inc., Attn: Corporate Secretary, One Pierce Place, Suite 1500, Itasca, Illinois 60143 or by calling (630) 875-7463, or from Standard upon written request to Standard Bancshares, Inc., Attn: Lawrence P. Kelley, President and Chief Executive Officer, 7800 West 95th Street, Hickory Hills, Illinois 60457 or by calling (708) 499-2000.

Participants in the Proposed Standard Transaction

First Midwest, Standard and certain of their respective directors and executive officers may be deemed under the rules of the SEC to be participants in the solicitation of proxies from the respective shareholders of First Midwest and Standard in connection with the proposed Standard transaction. Certain information regarding the interests of these participants and a description of their direct and indirect interests, by security holdings or otherwise, will be included in the joint proxy statement/prospectus regarding the proposed Standard transaction when it becomes available. Additional information about First Midwest and its directors and officers may be found in the definitive proxy statement of First Midwest relating to its 2016 Annual Meeting of Stockholders filed with the SEC on April 14, 2016 and First Midwest's annual report on Form 10-K for the year ended December 31, 2015 filed with the SEC on February 23, 2016. The definitive proxy statement and annual report can be obtained free of charge from the SEC's website at www.sec.gov.

About the Company

First Midwest is a relationship-based financial institution and one of the largest independent publicly-traded bank holding companies based on assets headquartered in the Midwest. First Midwest's principal subsidiary, First Midwest Bank, and other affiliates provide a full range of commercial, retail, wealth management, trust, and private banking products and services through over 110 locations in metropolitan Chicago, northwest Indiana, central and western Illinois, and eastern Iowa. First Midwest's website is www.firstmidwest.com.

Accompanying Unaudited Selected Financial Information

First Midwest Bancorp, Inc.
Consolidated Statements of Financial Condition (Unaudited)
(Dollar amounts in thousands)

                                             As of
                   --------------------------------------------------------
                                            December   September
                     June 30,   March 31,      31,        30,     June 30,
                       2016        2016       2015       2015       2015
                   ----------- ----------- ---------- ---------- ----------
Period-End Balance
 Sheet
Assets
Cash and due from
 banks             $   149,957 $   135,049 $  114,587 $  125,279 $  135,546
Interest-bearing
 deposits in other
 banks                 105,432     171,312    266,615    822,264    811,287
Trading
 securities, at
 fair value             17,693      17,408     16,894     17,038     18,172
Securities
 available-for-
 sale, at fair
 value               1,773,759   1,625,579  1,306,636  1,151,418  1,142,407
Securities held-
 to-maturity, at
 amortized cost         20,672      21,051     23,152     23,723     24,292
FHLB and FRB stock      44,506      40,916     39,306     38,748     38,748
Loans:
 Commercial and
  industrial         2,699,742   2,634,391  2,524,726  2,392,860  2,366,056
 Agricultural          401,858     422,231    387,440    393,732    377,410
 Commercial real
  estate:
  Office, retail,
   and industrial    1,529,675   1,566,395  1,395,454  1,414,077  1,432,502
  Multi-family         587,104     562,065    528,324    539,308    557,947
  Construction         371,016     260,743    216,882    192,086    190,970
  Other commercial
   real estate       1,000,655   1,060,302    931,190    869,748    871,119
 Home equity           722,881     683,171    653,468    647,223    599,320
 1-4 family
  mortgages            415,581     390,887    355,854    294,261    283,562
 Installment           223,845     213,979    137,602    131,185    113,382
 Covered loans          27,180      28,391     30,775     51,219     57,917
                   ----------- ----------- ---------- ---------- ----------
  Total loans        7,979,537   7,822,555  7,161,715  6,925,699  6,850,185
Allowance for loan
 losses                (80,105)    (77,150)   (73,630)   (72,500)   (71,463)
                   ----------- ----------- ---------- ---------- ----------
 Net loans           7,899,432   7,745,405  7,088,085  6,853,199  6,778,722
OREO                    29,990      29,649     27,782     32,035     28,230
Premises,
 furniture, and
 equipment, net        140,554     141,323    122,278    127,443    128,621
Investment in BOLI     218,133     218,873    209,601    208,666    207,814
Goodwill and other
 intangible assets     369,962     369,979    339,277    331,250    332,223
Accrued interest
 receivable and
 other assets          225,720     212,378    178,463    203,983    216,965
                   ----------- ----------- ---------- ---------- ----------
 Total assets      $10,995,810 $10,728,922 $9,732,676 $9,935,046 $9,863,027
                   =========== =========== ========== ========== ==========
Liabilities and
 Stockholders'
 Equity
Noninterest-
 bearing deposits  $ 2,683,495 $ 2,627,530 $2,414,454 $2,671,793 $2,508,316
Interest-bearing
 deposits            6,287,821   6,153,288  5,683,284  5,624,657  5,704,355
                   ----------- ----------- ---------- ---------- ----------
 Total deposits      8,971,316   8,780,818  8,097,738  8,296,450  8,212,671
Borrowed funds         449,744     387,411    165,096    169,943    189,036
Senior and
 subordinated debt     162,876     201,293    201,208    201,123    201,039
Accrued interest
 payable and other
 liabilities           160,985     134,835    122,366    119,861    135,324
Stockholders'
 equity              1,250,889   1,224,565  1,146,268  1,147,669  1,124,957
                   ----------- ----------- ---------- ---------- ----------
 Total liabilities
  and
  stockholders'
  equity           $10,995,810 $10,728,922 $9,732,676 $9,935,046 $9,863,027
                   =========== =========== ========== ========== ==========
Stockholders'
 equity, excluding
 accumulated other
 comprehensive
 income ("AOCI")   $ 1,259,692 $ 1,239,606 $1,174,657 $1,163,487 $1,146,189
Stockholders'
 equity, common      1,250,889   1,224,565  1,146,268  1,147,669  1,124,957


First Midwest Bancorp, Inc.
Condensed Consolidated Statements of Income (Unaudited)
(Dollar amounts in thousands)
                                             Quarters Ended
                            -----------------------------------------------
                                                December September
                            June 30, March 31,    31,       30,    June 30,
                              2016      2016      2015      2015     2015
                            -------- --------- --------- --------- --------
Income Statement
Interest income             $ 96,550 $  87,548 $  84,667 $  84,292 $ 84,556
Interest expense               6,569     6,834     6,655     6,390    5,654
                            -------- --------- --------- --------- --------
  Net interest income         89,981    80,714    78,012    77,902   78,902
Provision for loan losses      8,085     7,593     4,500     4,100    6,000
                            -------- --------- --------- --------- --------
    Net interest income
     after provision for
     loan losses              81,896    73,121    73,512    73,802   72,902
                            -------- --------- --------- --------- --------
Noninterest Income
    Service charges on
     deposit accounts         10,169     9,473    10,303    10,519    9,886
    Wealth management fees     8,642     7,559     7,493     7,222    7,433
    Card-based fees            7,592     6,718     6,761     6,868    6,953
    Merchant servicing fees    3,170     3,028     2,929     3,207    2,938
    Mortgage banking income    1,863     1,368     1,777     1,402    1,439
    Other service charges,
     commissions, and fees     4,498     5,448     4,664     3,900    2,924
                            -------- --------- --------- --------- --------
      Total fee-based
       revenues               35,934    33,594    33,927    33,118   31,573
    Other income               1,865     1,445     1,729     1,372    1,900
    Net securities gains          23       887       822       524      515
                            -------- --------- --------- --------- --------
      Total noninterest
       income                 37,822    35,926    36,478    35,014   33,988
                            -------- --------- --------- --------- --------
Noninterest Expense
  Salaries and employee
   benefits:
    Salaries and wages        37,916    36,296    34,295    33,554   33,096
    Retirement and other
     employee benefits         8,351     8,298     8,925     7,807    7,198
                            -------- --------- --------- --------- --------
      Total salaries and
       employee benefits      46,267    44,594    43,220    41,361   40,294
                            -------- --------- --------- --------- --------
    Net occupancy and
     equipment expense         9,928     9,697     9,256     9,406    9,622
    Professional services      5,292     5,920     6,117     6,172    5,322
    Technology and related
     costs                     3,669     3,701     3,694     3,673    3,527
    Merchant card expense      2,724     2,598     2,495     2,722    2,472
    Advertising and
     promotions                1,927     1,589     2,211     1,828    2,344
    Cardholder expenses        1,512     1,359     1,329     1,354    1,292
    Net OREO expense           1,122       664       926     1,290    1,861
    Other expenses             8,295     7,447     7,525     6,559    6,717
    Acquisition and
     integration related
     expenses                    618     5,020     1,389        --       --
    Property valuation
     adjustments                  --        --     8,581        --       --
                            -------- --------- --------- --------- --------
      Total noninterest
       expense                81,354    82,589    86,743    74,365   73,451
                            -------- --------- --------- --------- --------
    Income before income
     tax expense              38,364    26,458    23,247    34,451   33,439
    Income tax expense        13,097     8,496     6,923    11,167   10,865
                            -------- --------- --------- --------- --------
      Net income            $ 25,267 $  17,962 $  16,324 $  23,284 $ 22,574
                            ======== ========= ========= ========= ========
Net income applicable to
 common shares              $ 24,977 $  17,750 $  16,145 $  23,058 $ 22,325
Net income applicable to
 common shares, excluding
 certain significant
 transactions (1)           $ 25,348 $  20,762 $  22,127 $  23,058 $ 22,325

                              Six Months Ended
                           ---------------------
                            June 30,   June 30,
                              2016       2015
                           ---------- ----------
Income Statement
Interest income            $  184,098 $  167,025
Interest expense               13,403     11,341
                           ---------- ----------
  Net interest income         170,695    155,684
Provision for loan losses      15,678     12,552
                           ---------- ----------
    Net interest income
     after provision for
     loan losses              155,017    143,132
                           ---------- ----------
Noninterest Income
    Service charges on
     deposit accounts          19,642     19,157
    Wealth management fees     16,201     14,447
    Card-based fees            14,310     13,355
    Merchant servicing fees     6,198      5,603
    Mortgage banking income     3,231      2,562
    Other service charges,
     commissions, and fees      9,946      5,090
                           ---------- ----------
      Total fee-based
       revenues                69,528     60,214
    Other income                3,310      3,848
    Net securities gains          910      1,027
                           ---------- ----------
      Total noninterest
       income                  73,748     65,089
                           ---------- ----------
Noninterest Expense
  Salaries and employee
   benefits:
    Salaries and wages         74,212     65,890
    Retirement and other
     employee benefits         16,649     15,120
                           ---------- ----------
      Total salaries and
       employee benefits       90,861     81,010
                           ---------- ----------
    Net occupancy and
     equipment expense         19,625     20,058
    Professional services      11,212     10,431
    Technology and related
     costs                      7,370      7,214
    Merchant card expense       5,322      4,669
    Advertising and
     promotions                 3,516      3,567
    Cardholder expenses         2,871      2,560
    Net OREO expense            1,786      3,065
    Other expenses             15,742     13,534
    Acquisition and
     integration related
     expenses                   5,638         --
    Property valuation
     adjustments                   --         --
                           ---------- ----------
      Total noninterest
       expense                163,943    146,108
                           ---------- ----------
    Income before income
     tax expense               64,822     62,113
    Income tax expense         21,593     19,657
                           ---------- ----------
      Net income           $   43,229 $   42,456
                           ========== ==========
Net income applicable to
 common shares             $   42,727 $   41,979
Net income applicable to
 common shares, excluding
 certain significant
 transactions (1)          $   46,110 $   41,979
Footnotes to Condensed Consolidated Statements of Income
(1) Certain significant transactions include acquisition and integration
    related expenses associated with completed and pending acquisitions and
    property valuation adjustments related to strategic branch initiatives.


First Midwest Bancorp, Inc.
Selected Financial Information (Unaudited)
(Amounts in thousands, except per share data)
                                          As of or for the
                       -----------------------------------------------------
                                          Quarters Ended
                       ---------------------------------------------------
                                   March    December   September
                       June 30,     31,       31,         30,     June 30,
                         2016      2016       2015       2015       2015
                       --------  --------  ---------  ----------  --------
Earnings Per Share
Basic earnings per
 common share ("EPS")
 (1)                   $   0.31  $   0.23  $    0.21  $     0.30  $   0.29
Diluted EPS (1)        $   0.31  $   0.23  $    0.21  $     0.30  $   0.29
Diluted EPS, excluding
 certain significant
 transactions (1) (6)  $   0.32  $   0.27  $    0.29  $     0.30  $   0.29
Common Stock and Related Per Common Share Data
Book value             $  15.38  $  15.06  $   14.70  $    14.72  $  14.43
Tangible book value    $  10.83  $  10.51  $   10.35  $    10.47  $  10.17
Dividends declared per
 share                 $   0.09  $   0.09  $    0.09  $     0.09  $   0.09
Closing price at
 period end            $  17.56  $  18.02  $   18.43  $    17.54  $  18.97
Closing price to book
 value                      1.1       1.2        1.3         1.2       1.3
Period end shares
 outstanding             81,312    81,298     77,952      77,942    77,961
Period end treasury
 shares                   9,965     9,976     10,276      10,286    10,267
Common dividends       $  7,240  $  7,228  $   7,017  $    7,014  $  7,022
Key Ratios/Data
Return on average
 common equity (1) (2)     8.13%     6.06%      5.55%       8.06%     7.97%
Return on average
 tangible common
 equity (1) (2)           11.94%     8.87%      8.06%      11.68%    11.62%
Return on average
 tangible common
 equity, excluding
 certain significant
 transactions (1) (2)
 (6)                      12.11%    10.32%     10.94%      11.68%    11.62%
Return on average
 assets (2)                0.93%     0.72%      0.66%       0.94%     0.94%
Loans to deposits         88.94%    89.09%     88.44%      83.48%    83.41%
Efficiency ratio (1)      60.98%    64.82%     64.95%      63.20%    61.70%
Net interest margin
 (3)                       3.72%     3.66%      3.59%       3.58%     3.76%
Yield on average
 interest-earning
 assets (3)                3.99%     3.96%      3.89%       3.86%     4.02%
Cost of funds              0.39%     0.44%      0.44%       0.42%     0.38%
Net noninterest
 expense to average
 assets                    1.61%     1.90%      2.08%       1.60%     1.66%
Effective income tax
 rate                     34.14%    32.11%     29.78%      32.41%    32.50%
Capital Ratios
Total capital to risk-
 weighted assets (1)      10.68%    10.64%     11.15%      11.43%    11.37%
Tier 1 capital to
 risk-weighted assets
 (1)                       9.83%     9.81%     10.28%      10.55%    10.49%
CET1 to risk-weighted
 assets (1)                9.32%     9.30%      9.73%      10.00%     9.93%
Tier 1 capital to
 average assets (1)        8.94%     9.56%      9.40%       9.29%     9.34%
Tangible common equity
 to tangible assets
 (1)                       8.29%     8.25%      8.59%       8.50%     8.32%
Tangible common
 equity, excluding
 AOCI, to tangible
 assets (1)                8.37%     8.39%      8.89%       8.67%     8.54%
Tangible common equity
 to risk-weighted
 assets (1)                9.14%     9.04%      9.29%       9.70%     9.55%

                         As of or for the
                      ----------------------
                         Six Months Ended
                      ----------------------
                       June 30,    June 30,
                         2016        2015
                      ----------  ----------
Earnings Per Share
Basic earnings per
 common share ("EPS")
 (1)                  $     0.54  $     0.55
Diluted EPS (1)       $     0.54  $     0.55
Diluted EPS, excluding
 certain significant
 transactions (1) (6) $     0.58  $     0.55
Common Stock and
 Related Per Common
 Share Data
Book value            $    15.38  $    14.43
Tangible book value   $    10.83  $    10.17
Dividends declared per
 share                $     0.18  $     0.18
Closing price at
 period end           $    17.56  $    18.97
Closing price to book
 value                       1.1         1.3
Period end shares
 outstanding              81,312      77,961
Period end treasury
 shares                    9,965      10,267
Common dividends      $   14,468  $   14,033
Key Ratios/Data
Return on average
 common equity (1) (2)      7.12%       7.56%
Return on average
 tangible common
 equity (1) (2)            10.44%      11.07%
Return on average
 tangible common
 equity, excluding
 certain significant
 transactions (1) (2)
 (6)                       11.24%      11.07%
Return on average
 assets (2)                 0.83%       0.90%
Loans to deposits          88.94%      83.41%
Efficiency ratio (1)       62.81%      63.05%
Net interest margin
 (3)                        3.69%       3.77%
Yield on average
 interest-earning
 assets (3)                 3.97%       4.04%
Cost of funds               0.41%       0.39%
Net noninterest
 expense to average
 assets                     1.75%       1.73%
Effective income tax
 rate                      33.31%      31.65%
Capital Ratios
Total capital to risk-
 weighted assets (1)       10.68%      11.37%
Tier 1 capital to
 risk-weighted assets
 (1)                        9.83%      10.49%
CET1 to risk-weighted
 assets (1)                 9.32%       9.93%
Tier 1 capital to
 average assets (1)         8.94%       9.34%
Tangible common equity
 to tangible assets
 (1)                        8.29%       8.32%
Tangible common
 equity, excluding
 AOCI, to tangible
 assets (1)                 8.37%       8.54%
Tangible common equity
 to risk-weighted
 assets (1)                 9.14%       9.55%
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
                       ---------------------------------------------------
                                            December   September
                       June 30,  March 31,    31,         30,     June 30,
                         2016       2016      2015       2015       2015
                       --------  --------- ---------  ----------  --------
Asset Quality Performance Data
Non-performing
 assets(4)
Commercial and
 industrial            $  6,303  $   5,364 $   5,587  $    6,438  $ 11,100
Agricultural                475        295       355         112       317
Commercial real
 estate:
  Office, retail, and
   industrial            16,815     10,910     6,875       6,961    12,599
  Multi-family              321        410       796       1,046     1,287
  Construction              360        778       905       3,332     4,940
  Other commercial
   real estate            4,797      5,555     5,611       5,898     5,513
Consumer                  7,788      8,071     8,746       8,521     9,253
                       --------  --------- ---------  ----------  --------
  Total non-accrual
   loans                 36,859     31,383    28,875      32,308    45,009
90 days or more past
 due loans, still
 accruing interest        5,406      5,483     2,883       4,559     2,744
                       --------  --------- ---------  ----------  --------
  Total non-performing
   loans                 42,265     36,866    31,758      36,867    47,753
Accruing TDRs             2,491      2,702     2,743       2,771     3,067
OREO                     29,452     29,238    27,349      31,129    24,471
                       --------  --------- ---------  ----------  --------
Total non-performing
 assets                $ 74,208  $  68,806 $  61,850  $   70,767  $ 75,291
                       ========  ========= =========  ==========  ========
30-89 days past due
 loans (4)             $ 22,770  $  29,826 $  16,329  $   28,629  $ 28,625
Allowance for credit
 losses
Allowance for loan
 losses                $ 78,711  $  75,582 $  71,992  $   68,384  $ 66,602
Allowance for covered
 loan losses              1,394      1,568     1,638       4,116     4,861
Reserve for unfunded
 commitments              1,400      1,225     1,225       1,225     1,816
                       --------  --------- ---------  ----------  --------
  Total allowance for
   credit losses       $ 81,505  $  78,375 $  74,855  $   73,725  $ 73,279
                       ========  ========= =========  ==========  ========
Provision for loan
 losses                $  8,085  $   7,593 $   4,500  $    4,100  $  6,000
Net charge-offs by
 category
Commercial and
 industrial            $  1,450  $   1,396 $   1,781  $    1,601  $  3,273
Agricultural                 --         --        --          --        --
Commercial real
 estate:
  Office, retail, and
   industrial             1,633        421       267         457     1,862
  Multi-family               83        179       (27)         67       466
  Construction              (12)       111       105        (114)     (188)
  Other commercial
   real estate              810      1,294       110          92      (603)
Consumer                  1,164        672     1,134         959       432
Covered loans                 2         --        --           1       285
                       --------  --------- ---------  ----------  --------
    Total net charge-
     offs              $  5,130  $   4,073 $   3,370  $    3,063  $  5,527
                       ========  ========= =========  ==========  ========
Total recoveries
 included above        $  1,003  $   1,116 $   1,031  $    1,294  $  2,579

                         As of or for the
                      ---------------------
                         Six Months Ended
                      ---------------------
                       June 30,   June 30,
                         2016       2015
                      ---------- ----------
Asset Quality
 Performance Data
Non-performing
 assets(4)
Commercial and
 industrial           $    6,303 $   11,100
Agricultural                 475        317
Commercial real
 estate:
  Office, retail, and
   industrial             16,815     12,599
  Multi-family               321      1,287
  Construction               360      4,940
  Other commercial
   real estate             4,797      5,513
Consumer                   7,788      9,253
                      ---------- ----------
  Total non-accrual
   loans                  36,859     45,009
90 days or more past
 due loans, still
 accruing interest         5,406      2,744
                      ---------- ----------
  Total non-performing
   loans                  42,265     47,753
Accruing TDRs              2,491      3,067
OREO                      29,452     24,471
                      ---------- ----------
Total non-performing
 assets               $   74,208 $   75,291
                      ========== ==========
30-89 days past due
 loans (4)            $   22,770 $   28,625
Allowance for credit
 losses
Allowance for loan
 losses               $   78,711 $   66,602
Allowance for covered
 loan losses               1,394      4,861
Reserve for unfunded
 commitments               1,400      1,816
                      ---------- ----------
  Total allowance for
   credit losses      $   81,505 $   73,279
                      ========== ==========
Provision for loan
 losses               $   15,678 $   12,552
Net charge-offs by
 category
Commercial and
 industrial           $    2,846 $    9,930
Agricultural                  --         --
Commercial real
 estate:
  Office, retail, and
   industrial              2,054      1,696
  Multi-family               262        490
  Construction                99       (205)
  Other commercial
   real estate             2,104        448
Consumer                   1,836        911
Covered loans                  2        513
                      ---------- ----------
    Total net charge-
     offs             $    9,203 $   13,783
                      ========== ==========
Total recoveries
 included above       $    2,119 $    4,376
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
                      -----------------------------------------------------
                                             December  September
                       June 30,  March 31,     31,        30,      June 30,
                         2016       2016       2015       2015       2015
                      ---------  ---------  ---------  ---------  ---------
Asset Quality
 ratios(4)
Non-accrual loans to
 total loans               0.46%      0.40%      0.40%      0.47%      0.66%
Non-performing loans
 to total loans            0.53%      0.47%      0.45%      0.54%      0.70%
Non-performing assets
 to total loans plus
 OREO                      0.93%      0.88%      0.86%      1.02%      1.10%
Non-performing assets
 to tangible common
 equity plus
 allowance for credit
 losses                    7.72%      7.39%      7.03%      7.99%      8.74%
Non-accrual loans to
 total assets              0.34%      0.29%      0.30%      0.33%      0.46%
Allowance for credit
 losses and net
 charge-off ratios
Allowance for credit
 losses to total
 loans (5)                 1.02%      1.00%      1.05%      1.06%      1.07%
Allowance for credit
 losses to loans,
 excluding acquired
 loans.                    1.11%      1.11%      1.11%      1.14%      1.16%
Allowance for credit
 losses to non-
 accrual loans (4)       217.34%    244.74%    253.57%    215.45%    152.01%
Allowance for credit
 losses to non-
 performing loans (4)    189.54%    208.34%    230.55%    188.81%    143.27%
Net charge-offs to
 average loans (2)         0.26%      0.22%      0.19%      0.18%      0.33%
Footnotes to Selected Financial Information
     (1)  See the Non-GAAP Reconciliations section for detailed calculation.
     (2)  Annualized based on the actual number of days for each period
          presented.
     (3)  Presented on a tax equivalent basis, which reflects federal and
          state tax benefits.
     (4)  Excludes covered loans and covered OREO.
     (5)  This ratio includes acquired loans that are recorded at fair value
          through an acquisition adjustment, which incorporates credit risk,
          as of the acquisition date with no allowance for credit losses
          being established at that time. As the acquisition adjustment is
          accreted into income over future periods, an allowance for credit
          losses is established on acquired loans as necessary to reflect
          credit deterioration.
     (6)  Certain significant transactions include acquisition and
          integration related expenses associated with completed and pending
          acquisitions and property valuation adjustments related to
          strategic branch initiatives.


First Midwest Bancorp, Inc.
Non-GAAP Reconciliations (Unaudited)
(Amounts in thousands, except per share data)
                                         Quarters Ended
                      ----------------------------------------------------
                                            December   September
                      June 30,  March 31,     31,         30,     June 30,
                        2016       2016       2015       2015       2015
                      --------  ---------  ---------  ----------  --------
Earnings Per Share
Net income            $ 25,267  $  17,962  $  16,324  $   23,284  $ 22,574
Net income applicable
 to non-vested
 restricted shares        (290)      (212)      (179)       (226)     (249)
                      --------  ---------  ---------  ----------  --------
  Net income
   applicable to
   common shares        24,977     17,750     16,145      23,058    22,325
Acquisition and
 integration related
 expenses                  618      5,020      1,389          --        --
Tax-equivalent
 adjustment of
 acquisition and
 integration related
 expenses (2)             (247)    (2,008)      (556)         --        --
Property valuation
 adjustments.               --         --      8,581          --        --
Tax-equivalent
 adjustment of
 property valuation
 adjustments (2)            --         --     (3,432)         --        --
                      --------  ---------  ---------  ----------  --------
  Net income
   applicable to
   common shares,
   excluding certain
   significant
   transactions (1)   $ 25,348  $  20,762  $  22,127  $   23,058  $ 22,325
                      ========  =========  =========  ==========  ========
Weighted-average
 common shares
 outstanding:
  Weighted-average
   common shares
   outstanding
   (basic)              80,383     77,980     77,121      77,106    77,089
  Dilutive effect of
   common stock
   equivalents              13         12         13          13        12
                      --------  ---------  ---------  ----------  --------
    Weighted-average
     diluted common
     shares
     outstanding        80,396     77,992     77,134      77,119    77,101
                      ========  =========  =========  ==========  ========
Basic EPS             $   0.31  $    0.23  $    0.21  $     0.30  $   0.29
Diluted EPS           $   0.31  $    0.23  $    0.21  $     0.30  $   0.29
Diluted EPS,
 excluding certain
 significant
 transactions (1)     $   0.32  $    0.27  $    0.29  $     0.30  $   0.29
Anti-dilutive shares
 not included in the
 computation of
 diluted EPS               469        608        735         751       768
Tax Equivalent Net
 Interest Income
Net interest income   $ 89,981  $  80,714  $  78,012  $   77,902  $ 78,902
Tax-equivalent
 adjustment              2,193      2,307      2,494       2,609     2,693
                      --------  ---------  ---------  ----------  --------
  Tax-equivalent net
   interest income
   (2)                $ 92,174  $  83,021  $  80,506  $   80,511  $ 81,595
                      ========  =========  =========  ==========  ========
Efficiency Ratio
 Calculation
Noninterest expense   $ 81,354  $  82,589  $  86,743  $   74,365  $ 73,451
Less:                                             --
  Net OREO expense      (1,122)      (664)      (926)     (1,290)   (1,861)
  Acquisition and
   integration
   related expenses       (618)    (5,020)    (1,389)         --        --
  Property valuation
   adjustments              --         --     (8,581)         --        --
                      --------  ---------  ---------  ----------  --------
    Total             $ 79,614  $  76,905  $  75,847  $   73,075  $ 71,590
                      ========  =========  =========  ==========  ========
Tax-equivalent net
 interest income (2)  $ 92,174  $  83,021  $  80,506  $   80,511  $ 81,595
Fee-based revenues      35,934     33,594     33,927      33,118    31,573
Add:
  Other income,
   excluding BOLI
   income                  984        579        807         446       446
  BOLI                     881        866        922         926     1,454
  Tax-equivalent
   adjustment of BOLI      587        577        615         617       969
                      --------  ---------  ---------  ----------  --------
    Total             $130,560  $ 118,637  $ 116,777  $  115,618  $116,037
                      ========  =========  =========  ==========  ========
Efficiency ratio         60.98%     64.82%     64.95%      63.20%    61.70%

                        Six Months Ended
                     ----------------------
                      June 30,    June 30,
                        2016        2015
                     ----------  ----------
Earnings Per Share
Net income           $   43,229  $   42,456
Net income applicable
 to non-vested
 restricted shares         (502)       (477)
                     ----------  ----------
  Net income
   applicable to
   common shares         42,727      41,979
Acquisition and
 integration related
 expenses                 5,638          --
Tax-equivalent
 adjustment of
 acquisition and
 integration related
 expenses (2)            (2,255)         --
Property valuation
 adjustments.                --          --
Tax-equivalent
 adjustment of
 property valuation
 adjustments (2)             --          --
                     ----------  ----------
  Net income
   applicable to
   common shares,
   excluding certain
   significant
   transactions (1)  $   46,110  $   41,979
                     ==========  ==========
Weighted-average
 common shares
 outstanding:
  Weighted-average
   common shares
   outstanding
   (basic)               79,182      77,004
  Dilutive effect of
   common stock
   equivalents               12          12
                     ----------  ----------
    Weighted-average
     diluted common
     shares
     outstanding         79,194      77,016
                     ==========  ==========
Basic EPS            $     0.54  $     0.55
Diluted EPS          $     0.54  $     0.55
Diluted EPS,
 excluding certain
 significant
 transactions (1)    $     0.58  $     0.55
Anti-dilutive shares
 not included in the
 computation of
 diluted EPS                539         857
Tax Equivalent Net
 Interest Income
Net interest income  $  170,695  $  155,684
Tax-equivalent
 adjustment               4,500       5,576
                     ----------  ----------
  Tax-equivalent net
   interest income
   (2)               $  175,195  $  161,260
                     ==========  ==========
Efficiency Ratio
 Calculation
Noninterest expense  $  163,943  $  146,108
Less:
  Net OREO expense       (1,786)     (3,065)
  Acquisition and
   integration
   related expenses      (5,638)         --
  Property valuation
   adjustments               --          --
                     ----------  ----------
    Total            $  156,519  $  143,043
                     ==========  ==========
Tax-equivalent net
 interest income (2) $  175,195  $  161,260
Fee-based revenues       69,528      60,214
Add:
  Other income,
   excluding BOLI
   income                 1,563       1,511
  BOLI                    1,747       2,337
  Tax-equivalent
   adjustment of BOLI     1,165       1,558
                     ----------  ----------
    Total            $  249,198  $  226,880
                     ==========  ==========
Efficiency ratio          62.81%      63.05%
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
                   --------------------------------------------------------
                                            December   September
                     June 30,   March 31,      31,        30,     June 30,
                       2016        2016       2015       2015       2015
                   ----------- ----------- ---------- ---------- ----------
Risk-Based Capital
 Data
Common stock       $       913 $       913 $      882 $      882 $      882
Additional paid-in
 capital               495,159     493,153    446,672    445,037    443,558
Retained earnings      982,277     964,250    953,516    944,209    927,939
Treasury stock, at
 cost                 (218,657)   (218,710)  (226,413)  (226,641)  (226,190)
Goodwill and other
 intangible assets    (358,582)   (357,895)  (327,115)  (318,854)  (319,243)
Disallowed
 deferred tax
 assets                 (2,263)     (2,956)    (1,902)    (2,889)    (3,046)
                   ----------- ----------- ---------- ---------- ----------
  CET1 capital         898,847     878,755    845,640    841,744    823,900
Trust-preferred
 securities             50,690      50,690     50,690     50,690     50,690
Other disallowed
 deferred tax
 assets                 (1,508)     (1,970)    (2,868)    (4,334)    (4,568)
                   ----------- ----------- ---------- ---------- ----------
  Tier 1 capital       948,029     927,475    893,462    888,100    870,022
Tier 2 capital          81,505      78,375     74,855     73,725     73,279
                   ----------- ----------- ---------- ---------- ----------
  Total capital    $ 1,029,534 $ 1,005,850 $  968,317 $  961,825 $  943,301
                   =========== =========== ========== ========== ==========
Risk-weighted
 assets            $ 9,641,953 $ 9,452,551 $8,687,864 $8,414,729 $8,296,679
Adjusted average
 assets            $10,608,085 $ 9,700,671 $9,501,087 $9,559,796 $9,318,347
Total capital to
 risk-weighted
 assets                  10.68%      10.64%     11.15%     11.43%     11.37%
Tier 1 capital to
 risk-weighted
 assets                   9.83%       9.81%     10.28%     10.55%     10.49%
CET1 to risk-
 weighted assets          9.32%       9.30%      9.73%     10.00%      9.93%
Tier 1 capital to
 average assets           8.94%       9.56%      9.40%      9.29%      9.34%
Tangible Common
 Equity
Stockholders'
 equity            $ 1,250,889 $ 1,224,565 $1,146,268 $1,147,669 $1,124,957
Less: goodwill and
 other intangible
 assets               (369,962)   (369,979)  (339,277)  (331,250)  (332,223)
                   ----------- ----------- ---------- ---------- ----------
  Tangible common
   equity              880,927     854,586    806,991    816,419    792,734
Less: AOCI               8,803      15,041     28,389     15,818     21,232
                   ----------- ----------- ---------- ---------- ----------
  Tangible common
   equity,
   excluding AOCI  $   889,730 $   869,627 $  835,380 $  832,237 $  813,966
                   =========== =========== ========== ========== ==========
Total assets       $10,995,810 $10,728,922 $9,732,676 $9,935,046 $9,863,027
Less: goodwill and
 other intangible
 assets               (369,962)   (369,979)  (339,277)  (331,250)  (332,223)
                   ----------- ----------- ---------- ---------- ----------
  Tangible assets  $10,625,848 $10,358,943 $9,393,399 $9,603,796 $9,530,804
                   =========== =========== ========== ========== ==========
Tangible common
 equity to
 tangible assets          8.29%       8.25%      8.59%      8.50%      8.32%
Tangible common
 equity, excluding
 AOCI, to tangible
 assets                   8.37%       8.39%      8.89%      8.67%      8.54%
Tangible common
 equity to risk-
 weighted assets          9.14%       9.04%      9.29%      9.70%      9.55%

                       As of or for the
                  -------------------------
                       Six Months Ended
                   ------------------------
                     June 30,     June 30,
                       2016         2015
                   -----------  -----------
Risk-Based Capital
 Data
Common stock       $       913  $       882
Additional paid-in
 capital               495,159      443,558
Retained earnings      982,277      927,939
Treasury stock, at
 cost                 (218,657)    (226,190)
Goodwill and other
 intangible assets    (358,582)    (319,243)
Disallowed
 deferred tax
 assets                 (2,263)      (3,046)
                   -----------  -----------
  CET1 capital         898,847      823,900
Trust-preferred
 securities             50,690       50,690
Other disallowed
 deferred tax
 assets                 (1,508)      (4,568)
                   -----------  -----------
  Tier 1 capital       948,029      870,022
Tier 2 capital          81,505       73,279
                   -----------  -----------
  Total capital    $ 1,029,534  $   943,301
                   ===========  ===========
Risk-weighted
 assets            $ 9,641,953  $ 8,296,679
Adjusted average
 assets            $10,608,085  $ 9,318,347
Total capital to
 risk-weighted
 assets                  10.68%       11.37%
Tier 1 capital to
 risk-weighted
 assets                   9.83%       10.49%
CET1 to risk-
 weighted assets          9.32%        9.93%
Tier 1 capital to
 average assets           8.94%        9.34%
Tangible Common
 Equity
Stockholders'
 equity            $ 1,250,889  $ 1,124,957
Less: goodwill and
 other intangible
 assets               (369,962)    (332,223)
                   -----------  -----------
  Tangible common
   equity              880,927      792,734
Less: AOCI               8,803       21,232
                   -----------  -----------
  Tangible common
   equity,
   excluding AOCI  $   889,730  $   813,966
                   ===========  ===========
Total assets       $10,995,810  $ 9,863,027
Less: goodwill and
 other intangible
 assets               (369,962)    (332,223)
                   -----------  -----------
  Tangible assets  $10,625,848  $ 9,530,804
                   ===========  ===========
Tangible common
 equity to
 tangible assets          8.29%        8.32%
Tangible common
 equity, excluding
 AOCI, to tangible
 assets                   8.37%        8.54%
Tangible common
 equity to risk-
 weighted assets          9.14%        9.55%
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
                 ----------------------------------------------------------
                                          December    September
                  June 30,    March 31,      31,         30,      June 30,
                    2016        2016        2015        2015        2015
                 ----------  ----------  ----------  ----------  ----------
Return on Average Common and Tangible
 Common Equity
Net income
 applicable to
 common shares   $   24,977  $   17,750  $   16,145  $   23,058  $   22,325
Intangibles
 amortization         1,245         985         971         973         978
Tax-equivalent
 adjustment of
 intangibles
 amortization          (498)       (394)       (388)       (389)       (391)
                 ----------  ----------  ----------  ----------  ----------
  Net income
   applicable to
   common
   shares,
   excluding
   intangibles
   amortization      25,724      18,341      16,728      23,642      22,912
Acquisition and
 integration
 related
 expenses               618       5,020       1,389          --          --
Tax-equivalent
 adjustment of
 acquisition and
 integration
 related
 expenses (2)          (247)     (2,008)       (556)         --          --
Property
 valuation
 adjustments             --          --       8,581          --          --
Tax-equivalent
 adjustment of
 property
 valuation
 adjustments (2)         --          --      (3,432)         --          --
                 ----------  ----------  ----------  ----------  ----------
  Net income
   applicable to
   common
   shares,
   excluding
   intangibles
   amortization
   and certain
   significant
   transactions
   (1)           $   26,095  $   21,353  $   22,710  $   23,642  $   22,912
                 ==========  ==========  ==========  ==========  ==========
Average
 stockholders'
 equity          $1,235,497  $1,178,588  $1,154,506  $1,134,967  $1,123,530
Less: average
 intangible
 assets            (369,177)   (346,549)   (331,013)   (331,720)   (332,694)
                 ----------  ----------  ----------  ----------  ----------
  Average
   tangible
   common equity $  866,320  $  832,039  $  823,493  $  803,247  $  790,836
                 ==========  ==========  ==========  ==========  ==========
Return on
 average common
 equity (3)            8.13%       6.06%       5.55%       8.06%       7.97%
Return on
 average
 tangible common
 equity (3)           11.94%       8.87%       8.06%      11.68%      11.62%
Return on
 average
 tangible common
 equity,
 excluding
 certain
 significant
 transactions
 (1) (3)              12.11%      10.32%      10.94%      11.68%      11.62%

                    As of or for the
                -----------------------
                    Six Months Ended
                 ----------------------
                  June 30,    June 30,
                    2016        2015
                 ----------  ----------
Return on
 Average Common
 and Tangible
 Common Equity
Net income
 applicable to
 common shares   $   42,727  $   41,979
Intangibles
 amortization         2,230       1,976
Tax-equivalent
 adjustment of
 intangibles
 amortization          (892)       (790)
                 ----------  ----------
  Net income
   applicable to
   common
   shares,
   excluding
   intangibles
   amortization      44,065      43,165
Acquisition and
 integration
 related
 expenses             5,638          --
Tax-equivalent
 adjustment of
 acquisition and
 integration
 related
 expenses (2)        (2,255)         --
Property
 valuation
 adjustments             --          --
Tax-equivalent
 adjustment of
 property
 valuation
 adjustments (2)         --          --
                 ----------  ----------
  Net income
   applicable to
   common
   shares,
   excluding
   intangibles
   amortization
   and certain
   significant
   transactions
   (1)           $   47,448  $   43,165
                 ==========  ==========
Average
 stockholders'
 equity           1,207,043  $1,119,170
Less: average
 intangible
 assets            (357,863)   (333,186)
                 ----------  ----------
  Average
   tangible
   common equity $  849,180  $  785,984
                 ==========  ==========
Return on
 average common
 equity (3)            7.12%       7.56%
Return on
 average
 tangible common
 equity (3)           10.44%      11.07%
Return on
 average
 tangible common
 equity,
 excluding
 certain
 significant
 transactions
 (1) (3)              11.24%      11.07%
Footnotes to Non-GAAP Reconciliations
     (1) Certain significant transactions include acquisition and
         integration related expenses associated with completed and pending
         acquisitions and property valuation adjustments related to
         strategic branch initiatives.
     (2) Presented on a tax equivalent basis, which reflects federal and
         state tax benefits.
     (3) Annualized based on the actual number of days for each period
         presented.

Contact Information

Investors:
Paul F. Clemens
EVP and Chief Financial Officer
(630) 875-7347
paul.clemens@firstmidwest.com

Media:
James M. Roolf
SVP and Corporate Relations Officer
(630) 875-7533
jim.roolf@firstmidwest.com



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