First Midwest Bancorp, Inc. Announces 2014 Fourth Quarter and Full Year Results
Strong Core Earnings, Significantly Improved Asset Quality, Acquisitions Substantially Integrated
(firmenpresse) - ITASCA, IL -- (Marketwired) -- 01/20/15 -- 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 fourth quarter of 2014. Net income for the fourth quarter of 2014 was $14.6 million, or $0.19 per share. This compares to $18.5 million, or $0.25 per share, for the third quarter of 2014 and $19.2 million, or $0.26 per share, for the fourth quarter of 2013. Excluding acquisition and integration related expenses, earnings per share was $0.27 for the fourth quarter of 2014 and $0.28 for the third quarter of 2014.
For the full year of 2014, the Company reported net income of $69.3 million, or $0.92 per share, compared to $79.3 million, or $1.06 per share, for the year ended December 31, 2013. Earnings per share was $1.03 for the year ended December 31, 2014, excluding acquisition and integration related expenses.
"Performance for the fourth quarter of 2014 was strong, benefiting from consistent, balanced business execution throughout the year," said Michael L. Scudder, President and Chief Executive Officer of First Midwest Bancorp, Inc. "Sales success across our business lines, combined with our acquisitions of Great Lakes Bank and the Popular Community Bank branches, significantly expanded and strengthened our balance sheet. Our acquisition of National Machine Tool added leasing capabilities and an experienced sales team to our line of commercial offerings. Importantly, our results for the year reflected balanced execution across all of our business lines, significantly improved credit metrics, and successful completion of three acquisitions during the second half of 2014."
Mr. Scudder continued, "As we enter 2015, our business momentum is building amid expectations of improving operating conditions and, ultimately, a transition to higher rates. As we navigate this environment, a talented and engaged team of colleagues combined with strong capital and core deposit foundations leave us well positioned for continued growth and enhanced shareholder value."
On August 8, 2014, the Bank completed the acquisition of the Chicago banking operations of Popular Community Bank ("Popular"). The acquisition included Popular's twelve full-service retail banking offices and its small business and middle market commercial lending activities in the Chicago metropolitan area. On the date of acquisition, the Bank acquired $550 million in loans and $732 million in deposits.
On September 26, 2014, the Bank completed the acquisition of National Machine Tool Financial Corporation ("National Machine Tool"). In business for more than 28 years and a customer of the Bank for more than 15 years, National Machine Tool provides equipment leasing and financing alternatives to traditional bank financing.
On December 2, 2014, the Company completed the acquisition of the south suburban Chicago-based Great Lakes Financial Resources, Inc. ("Great Lakes"). As part of the transaction, the Company acquired seven full-service retail banking offices, one drive-up location, $223 million in loans, and $466 million in deposits on the date of acquisition.
The conversion and integration of these transactions were substantially complete as of December 31, 2014.
For the fourth quarter of 2014, total average interest-earning assets rose $419.6 million and $771.2 million from the third quarter of 2014 and the fourth quarter of 2013, respectively, driven by loans acquired in the Popular and Great Lakes acquisitions during the second half of 2014 and solid organic loan growth over the course of the year.
Total average funding sources for the fourth quarter of 2014 increased $410.3 million from the third quarter of 2014 and $753.8 million from the fourth quarter of 2013. The rise in both prior periods resulted mainly from acquisition activity. The decline in borrowed funds from the fourth quarter of 2013 was due to the prepayment of $114.6 million of FHLB advances with a weighted-average rate of 1.08% during the second quarter of 2014, which is net of the yield earned on the cash used for the prepayment.
Tax-equivalent net interest margin for the fourth quarter of 2014 was 3.76%, a rise of 4 basis points from the third quarter of 2014 and 14 basis points from the fourth quarter of 2013. The Popular and Great Lakes acquisitions contributed to the increases, adding a greater proportion of higher yielding, fixed rate loans along with low cost deposits. In addition, net accretion resulting from the fair value adjustments on acquired assets and assumed liabilities contributed 8 basis points and 3 basis points to the tax-equivalent net interest margin in the fourth and third quarters of 2014, respectively. A decrease in the yield on covered interest-earning assets partially offset these increases. Certain loan hedging strategies and the prepayment of the FHLB advances contributed to the increase in tax-equivalent net interest margin compared to the fourth quarter of 2013.
Compared to the third quarter of 2014, tax-equivalent net interest income rose $4.8 million due primarily to the full quarter impact of the Popular acquisition, which included approximately $1.6 million of net accretion, and the December acquisition of Great Lakes. The $10.0 million increase in tax-equivalent net interest income compared to the fourth quarter of 2013 was mainly due to the acquisitions and loan growth, which was funded by a rise in core transactional deposits that also replaced higher costing time deposits and borrowed funds.
Total fee-based revenues increased 9.9% from the fourth quarter of 2013, reflecting growth across most categories. Higher levels of service charge volume, primarily from customers acquired in the Popular and Great Lakes transactions, drove the rise in service charges on deposit accounts. New customer relationships continued to drive the increase in wealth management fees. The increase in card-based fees reflects higher transaction volumes along with incentives from a renewed vendor contract.
Compared to the linked quarter, total fee-based revenues were consistent. Overall, increases in fee-based revenues due to the acquisitions were offset by lower levels of mortgage banking income, driven by a valuation adjustment relating to mortgage servicing rights, and the impact of a renewed vendor contract within card-based fees during the third quarter of 2014. The normal seasonal decline in merchant servicing fees was substantially offset by lower merchant card expense.
The rise in other service charges, commissions, and fees compared to both prior periods was driven primarily by gains realized on the sale of certain equipment leasing contracts. These sales were generated from a new commercial product offering introduced with the acquisition of National Machine Tool in the third quarter of 2014.
Total noninterest income of $31.1 million decreased 16.3% from the linked quarter and grew 11.8% from the fourth quarter of 2013. During the third quarter of 2014, the Company sold longer-duration corporate bonds out of the Company's securities portfolio at a pre-tax gain of $2.0 million and disposed of two branch properties, which generated pre-tax gains of $4.0 million. The Company repurchased and retired $23.3 million of 6.95% junior subordinated debentures during the fourth quarter of 2013, which resulted in a pre-tax loss of $1.0 million.
Excluding acquisition and integration related expenses, total noninterest expense for the fourth quarter of 2014 increased 13.5% from the third quarter of 2014 and 16.6% from the fourth quarter of 2013. The remaining increase from the third quarter of 2014 was due to a rise in operating costs attendant to Popular, National Machine Tool, and Great Lakes, additional staffing and higher salaries in response to growth and organizational needs, targeted remediation costs, and the timing of certain compensation and benefit accruals, impacted in part by the acquisitions.
Recurring costs associated with operating the newly acquired Popular, National Machine Tool, and Great Lakes locations of approximately $3.5 million and $2.0 million for the fourth and third quarters of 2014, respectively, were primarily concentrated in salaries and employee benefits, net occupancy and equipment expense, professional services, and other expenses. The conversion and integration of these transactions is substantially complete with certain remaining efficiencies to be implemented in the first half of 2015.
Compared to both prior periods, the rise in salaries and wages also reflects the timing of certain incentive compensation accruals, impacted by acquisition results, as well as additional staff and higher salaries in response to growth and organizational needs. Lower levels of deferred loan origination costs contributed to the variance from the third quarter of 2014.
Retirement and other employee benefits increased from the third quarter of 2014 and the fourth quarter of 2013 due to the timing of certain profit sharing expenses. A reduction in pension expense as a result of changes to the Company's defined benefit pension plan partially offset these increases compared to the fourth quarter of 2013.
Professional services were elevated from the third quarter of 2014 due to remediation costs on select significant credits, contributing to the improvements in credit quality. In addition, personnel recruitment costs increased in response to growth and organizational needs compared to both prior periods.
A $1.6 million valuation adjustment on an OREO property resulted in the rise in net OREO expense compared to the third quarter of 2014.
Other expenses were lower in the fourth quarter of 2013 due to a $770,000 reduction in the reserve for unfunded commitments.
Compared to September 30, 2014, total loans of $6.7 billion increased by 3.3%, driven primarily by the Great Lakes acquisition, which added $217.6 million of loans at December 31, 2014. In addition, growth in our legacy loans of 3.0% on an annualized basis from September 30, 2014 was offset by anticipated paydowns on certain loans acquired in the Popular transaction.
Total loans rose $1.0 billion, or 17.9%, from December 31, 2013. Excluding loans acquired in the Popular and Great Lakes acquisitions of $718.3 million and covered loans, total loans grew $359.1 million, or 6.4%, from December 31, 2013 due primarily to well-balanced growth distributed across the commercial and industrial, agricultural, multi-family, and consumer categories. Strong growth in the commercial and industrial and agricultural loan categories, excluding acquired and covered loans, of 17.4% and 10.8%, respectively, reflects the impact of greater resource investments and expansion into certain sector-based lending areas, such as agri-business, asset-based lending, and healthcare.
Total non-performing loans, excluding acquired and covered loans, were $59.6 million at December 31, 2014, decreasing $10.2 million, or 14.6%, from September 30, 2014 and 6.1% from December 31, 2013. The improvement compared to the linked quarter was due primarily to a $2.3 million paydown of a non-accrual commercial real estate loan and the return of a $3.8 million past due commercial real estate loan relationship to current status.
Net loan charge-offs for the fourth quarter of 2014 represents one of the lowest levels in over seven years. Continued progress in consumer delinquencies and a $1.3 million recovery on an other commercial real estate loan relationship contributed to the decrease compared to the third quarter of 2014. In addition, net loan charge-offs for the third quarter of 2014 were elevated due to the recognition of a $7.5 million loss on a commercial loan relationship, for which the Company continues to aggressively pursue all collection and other remedies.
Average core transactional deposits of $6.5 billion for the fourth quarter of 2014 increased 6.0% and 15.1% compared to the third quarter of 2014 and the fourth quarter of 2013, respectively. The rise was due primarily to deposits assumed in the Popular and Great Lakes acquisitions, further strengthening the Company's core transactional deposit base, led by an increase in average demand deposits of $382.7 million, or 19.6%, from December 31, 2013.
The Company's capital ratios increased from September 30, 2014, driven primarily by continued earnings and the $38.4 million of common stock issued as consideration for the Great Lakes acquisition. The decline in capital ratios compared to December 31, 2013 resulted from the addition of risk-weighted and average assets, including goodwill and other intangible assets, related to the Popular and Great Lakes acquisitions. These declines were partially offset by earnings and the increase in allowable deferred tax assets. The Bank's regulatory ratios exceeded all regulatory mandated ratios for characterization as "well-capitalized" as of December 31, 2014.
The Board of Directors approved a quarterly cash dividend of $0.08 per common share during the fourth quarter of 2014, consistent with the third quarter of 2014, and an increase compared to dividends of $0.07 per common share during the fourth quarter of 2013.
First Midwest, with assets of approximately $9.4 billion, is the premier relationship-based financial institution in the Chicago banking market. As one of Illinois' largest independent bank holding companies, First Midwest, through its subsidiary bank and other affiliates, provides a full range of business, middle-market and retail banking and wealth management services through approximately 110 banking offices located in metropolitan Chicago, northwest Indiana, central and western Illinois, and eastern Iowa. First Midwest has been recognized by J.D. Power as having the "Highest Customer Satisfaction with Retail Banking in the Midwest Region*" according to the 2014 Retail Banking Satisfaction Study(SM). The Company website is .
* First Midwest Bank received the highest numerical score among retail banks in the Midwest region in the proprietary J.D. Power 2014 Retail Banking Satisfaction Study(SM). The Study is based on 80,445 total responses measuring 21 providers in the Midwest region (Iowa, Illinois, Kansas, Missouri, Minnesota, and Wisconsin) and measures opinions of consumers with their primary banking provider. Proprietary study results are based on experiences and perceptions of consumers surveyed January 2014. Individual experiences may vary. Visit JDPower.com.
The Company's accounting and reporting policies conform to U.S. generally accepted accounting principles ("GAAP") and general practice within the banking industry. As a supplement to GAAP, the Company provides non-GAAP performance results, which the Company believes are useful because they assist investors in assessing the Company's operating performance. This includes, but is not limited to, earnings per share, excluding acquisition and integration related expenses, top-line revenue, tax-equivalent net interest income (including its individual components), tier 1 common capital to risk-weighted assets, tangible common equity to tangible assets, tangible common equity, excluding other comprehensive loss, to tangible assets, and tangible common equity to risk-weighted assets. 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.
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," or "continue" 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, 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 fiscal year ended December 31, 2013, as well as our subsequent filings made with the Securities and Exchange Commission ("SEC"). 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.
A conference call to discuss the Company's results, outlook, and related matters will be held on Wednesday, January 21, 2015 at 10:00 AM (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, . For those unable to listen to the live broadcast, a replay will be available on the Company's website or by dialing (877) 344-7529 (U.S. domestic) or (412) 317-0088 (International) conference I.D. 10058797 beginning one hour after completion of the live call until 9:00 A.M. (ET) on January 29, 2015. Please direct any questions regarding obtaining access to the conference call to First Midwest Bancorp, Inc. Investor Relations, via e-mail, at .
Accompanying this press release is the following unaudited financial information:
Condensed Consolidated Statements of Financial Condition
Condensed Consolidated Statements of Income
This press release, the accompanying financial statements and tables, and certain additional unaudited Selected Financial Information are available through the "Investor Relations" section of First Midwest's website at .
(Investors)
EVP and Chief Financial Officer
(630) 875-7347
(Media)
SVP and Corporate Relations Officer
(630) 875-7533
First Midwest Bancorp, Inc.
One Pierce Place, Suite 1500
Itasca, Illinois 60143-9768
Themen in dieser Pressemitteilung:
Unternehmensinformation / Kurzprofil:
Datum: 21.01.2015 - 00:36 Uhr
Sprache: Deutsch
News-ID 365774
Anzahl Zeichen: 0
contact information:
Town:
ITASCA, IL
Kategorie:
Commercial & Investment Banking
Diese Pressemitteilung wurde bisher 200 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"First Midwest Bancorp, Inc. Announces 2014 Fourth Quarter and Full Year Results"
steht unter der journalistisch-redaktionellen Verantwortung von
First Midwest Bancorp, Inc. (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
