First Midwest Bancorp, Inc. Announces 2015 Fourth Quarter and Full Year Results
(firmenpresse) - ITASCA, IL -- (Marketwired) -- 01/26/16 -- 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 fourth quarter of 2015. Net income for the fourth quarter of 2015 was $16.3 million, or $0.21 per share. This compares to $23.3 million, or $0.30 per share, for the third quarter of 2015, and $14.6 million, or $0.19 per share, for the fourth quarter of 2014. Fourth quarter performance for the current and prior year was impacted by acquisition and integration related pre-tax expenses of $1.4 million and $9.3 million, respectively, or $0.01 and $0.07 per share after tax. In addition, a non-cash property valuation pre-tax adjustment of $8.6 million, or $0.07 per share after tax, was recorded in the fourth quarter of 2015 as a result of previously announced strategic branch initiatives. Excluding these expenses, earnings per share was $0.29 for the fourth quarter of 2015 compared to $0.27 for the fourth quarter of 2014, an increase of 7%.
For the full year of 2015, the Company reported net income of $82.1 million, or $1.05 per share, compared to $69.3 million, or $0.92 per share, for the year ended December 31, 2014. Earnings per share was $1.13 for the year ended December 31, 2015, excluding the valuation adjustment and acquisition and integration related expenses, and $1.03 for the year ended December 31, 2014, excluding acquisition and integration related expenses.
"It was an active quarter and year, reflecting strong progress on a number of business fronts and positioning us well as we enter 2016," said Michael L. Scudder, President and Chief Executive Officer of First Midwest Bancorp, Inc. "Business growth was solid in an intensely competitive environment, with performance impacted by both prior and current year acquisitions as well as ongoing strategic efforts to optimize our branch distribution network. Excluding charges attendant to these activities, performance for the quarter was up 7% as compared to last year. Late year and expected first quarter of 2016 acquisitions will grow our Company by some 10% in assets and further expand our wealth management capabilities and branch distribution network in the western markets of metro Chicago."
Mr. Scudder continued, "As we look ahead, 2016 is looking to be a year of transition for the industry and First Midwest. An evolving, upward rate environment will require balanced financial management. At the same time, the growth of our Company will be accompanied by greater regulatory oversight and expectations. We are well prepared to navigate this transition, leveraging the strength of our balance sheet, products, distribution, and an engaged team of colleagues to grow and enhance shareholder returns."
On January 15, 2016, the Company announced planned strategic branch initiatives to enhance its customer experience, branch network, and operating efficiency. Based on the Company's ongoing analysis of its existing distribution network as well as customer preference and usage patterns, the Company will open a full service branch in the attractive Naperville, Illinois and downtown Chicago markets during the first quarter of 2016, consolidate four existing branches into nearby operating locations, and sell twelve closed branches and seven parcels of land previously purchased for expansion.
The orderly execution of these plans over the near term will result in an annual pre-tax reduction of ongoing operating costs of approximately $3.6 million, 60% of which the Company expects to realize in 2016. In furtherance of these initiatives, First Midwest recorded a pre-tax, non-cash valuation adjustment of $8.6 million, or $0.07 per share after tax, as of December 31, 2015 for those properties designated for sale.
On November 12, 2015, the Company entered into a definitive agreement to acquire NI Bancshares Corporation, the holding company for The National Bank & Trust Company of Sycamore ("NB&T"). With the acquisition, the Company will acquire ten banking offices in northern Illinois, $415 million in loans, and $600 million in deposits. In addition, the Company will acquire over $700 million in trust assets under management which represents approximately a 10% increase in the Company's current trust assets under management. The merger consideration will be a combination of Company common stock and cash, with an overall transaction value of $70 million. The Company received approval for this acquisition from the Federal Reserve on January 5, 2016 and the Illinois Department of Financial and Professional Regulation on January 15, 2016. The acquisition is expected to close and the operating systems converted late in the first quarter of 2016, subject to approval by the stockholders of NB&T and customary closing conditions.
On December 3, 2015, the Company completed the acquisition of Peoples Bancorp, Inc. and its wholly-owned banking subsidiary, The Peoples' Bank of Arlington Heights ("Peoples Bank"), which was previously announced on September 21, 2015. With the acquisition, the Company acquired two banking offices in Arlington Heights, Illinois, and approximately $92 million in deposits and $57 million in loans. The conversion of operating systems concluded on December 7, 2015.
Total average interest-earning assets were relatively unchanged from the third quarter of 2015, with the increase of $126.0 million in average loans and $65.5 million in securities offset by a $233.2 million decline in lower yielding other interest-earning assets. Total average funding sources were consistent with the third quarter of 2015.
Compared to the fourth quarter of 2014, the $578.9 million increase in total average interest-earning assets and the $509.0 million rise in total average funding sources reflect loan growth over the course of the year, the full impact of the Great Lakes Financial Resources, Inc. ("Great Lakes") acquisition completed during the fourth quarter of 2014, and the Peoples Bank acquisition completed during the fourth quarter of 2015.
Tax-equivalent net interest margin for the current quarter was 3.59%, increasing one basis point from the third quarter of 2015 while decreasing 17 basis points from the fourth quarter of 2014. Compared to the third quarter of 2015, the rise in tax-equivalent net interest margin was due primarily to the reinvestment of other interest-earning assets into higher yielding loans and securities which was partially offset by lower acquired loan accretion and covered loan income and the continued shift in the loan mix to floating rate loans. Tax-equivalent net interest margin decreased compared to the fourth quarter of 2014, driven primarily by the continued shift in the loan mix and lower covered loan income.
Acquired loan accretion related to the Company's acquisitions completed in 2014 contributed $1.3 million for the fourth quarter of 2015, $1.8 million for the third quarter of 2015, and $1.4 million for the fourth quarter of 2014.
Total fee-based revenues of $33.9 million grew by 15.5% compared to the fourth quarter of 2014 and 2.4% compared to the third quarter of 2015. The increases compared to both prior periods presented reflect continued growth in wealth management fees, mortgage banking income, and capital market and lease initiatives within other service charges, commissions, and fees.
Continued sales of fiduciary and investment advisory services to new and existing customers drove the rise in wealth management fees compared to both prior periods presented.
Mortgage banking income resulted from sales of $51.4 million of 1-4 family mortgage loans in the secondary market during the fourth quarter of 2015, compared to $42.2 million in the third quarter of 2015 and $30.2 million in the fourth quarter of 2014.
Compared to both prior periods presented, the increase in other service charges, commissions, and fees was driven by fee income generated from sales of capital market products to commercial clients and gains on sales of lease contracts. Gains on sales of lease contracts generated by First Midwest Equipment Finance, formed from an acquisition in September of 2014, totaled $687,000, $456,000, and $327,000, for the fourth and third quarters of 2015 and fourth quarter of 2014, respectively. In addition, the Company has retained leases within the loan portfolio of $104.4 million as of December 31, 2015, up from $23.0 million as of December 31, 2014.
Total noninterest income of $36.5 million grew 17.4% and 4.2% from the fourth quarter of 2014 and the third quarter of 2015, respectively.
Excluding the property valuation adjustment and acquisition and integration related expenses, total noninterest expense increased by 1.6% from the fourth quarter of 2014 and 3.2% from the third quarter of 2015.
The rise in total noninterest expense compared to the fourth quarter of 2014 was due partly to operating costs of the banking locations acquired in the Great Lakes acquisition during December of 2014. These costs primarily occurred within salaries and employee benefits, net occupancy and equipment expense, and other expenses. The reduction in professional services compared to the fourth quarter of 2014 resulted primarily from lower legal and loan remediation expenses and lower costs to service the Company's covered loan portfolio.
Salaries and employee benefits and other expenses increased compared to the third quarter of 2015 due primarily to talent recruitment and organizational growth needs.
The rise in retirement and other employee benefits compared to both prior periods presented was impacted by lump sum distributions related to the Company's defined benefit retirement plan, prompted in part by an expectation of rising rates. This expense is expected to return to normalized levels in subsequent quarters.
During the fourth quarter of 2015, property valuation adjustments of $8.6 million were recognized on twelve closed branches and seven parcels of land as part of the Company's strategic branch initiatives.
Total loans, excluding covered loans, of $7.1 billion grew $256.5 million, or 14.9%, on an annualized basis from September 30, 2015 and $473.5 million, or 7.1%, from December 31, 2014. Compared to the third quarter of 2015, the increase in loans was driven primarily by strong sales production of the corporate lending teams, growth in 1-4 family mortgages, and the Peoples Bank acquisition completed in the fourth quarter of 2015, which contributed $53.9 million.
Compared to the fourth quarter of 2014, the increase in loans resulted primarily from strong sales production, growth in 1-4 family mortgages, and the expansion of the Company's web-based installment programs. The overall decline in commercial real estate loans compared to the fourth quarter of 2014 resulted from the decision of certain customers to opportunistically sell their commercial businesses and investment real estate properties or use excess liquidity to payoff long-term debt. These decreases more than offset organic commercial real estate growth.
Compared to both prior periods presented, growth in corporate loans was concentrated within our commercial and industrial loan category. The increase in commercial and industrial loans primarily reflects the continued expansion into select sector-based lending areas such as leasing, healthcare, asset-based lending, and structured finance.
Asset quality continued to improve across all metrics. Total non-performing assets, excluding covered loans and covered OREO, decreased by $8.9 million, or 12.6%, from September 30, 2015 and $29.9 million, or 32.6%, from December 31, 2014. Non-performing assets to total loans plus OREO improved to 0.86% at December 31, 2015 compared to 1.02% at September 30, 2015 and 1.37% at December 31, 2014.
Total net loan charge-offs for the fourth quarter of 2015 were 19 basis points of average loans, or $3.4 million, consistent with the third quarter of 2015 and increasing slightly from 13 basis points for the fourth quarter of 2014.
Average core deposits of $7.0 billion for the fourth quarter of 2015 were consistent with the third quarter of 2015 and increased 8.5% compared to the fourth quarter of 2014. Compared to the third quarter of 2015, a normal seasonal decrease in average municipal deposits was offset by growth in commercial deposits and the one-month impact of $92.0 million in deposits assumed in the December of 2015 Peoples Bank acquisition. The rise in average core deposits compared to the fourth quarter of 2014 resulted from growth and the full quarter impact of deposits assumed in the December of 2014 Great Lakes acquisition, which further strengthened the Company's core deposit base.
Compared to September 30, 2015, the declines in the Company's regulatory capital ratios tied to end-of-period risk-weighted assets reflect the impact of the increase in assets late in the fourth quarter of 2015, including those acquired from the Peoples Bank acquisition.
The Board of Directors approved a quarterly cash dividend of $0.09 per common share during the fourth quarter of 2015, which is consistent with the third quarter of 2015 and follows a dividend increase from $0.08 to $0.09 per common share during the first quarter of 2015.
A conference call to discuss the Company's results, outlook, and related matters will be held on Wednesday, January 27, 2016 at 10:00 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, . 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. 10078820 beginning one hour after completion of the live call until 9:00 A.M. (ET) on February 4, 2016. Please direct any questions regarding obtaining access to the conference call to First Midwest Bancorp, Inc. Investor Relations, via e-mail, at .
This press release and the accompanying unaudited Selected Financial Information are available through the "Investor Relations" section of First Midwest's website at .
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 NI Bancshares Corporation ("NI Bancshares"), 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, 2014, 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.
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 NI Bancshares, First Midwest has filed a registration statement on Form S-4 (File no. 333-208781) with the SEC. The registration statement includes a proxy statement of NI Bancshares, which also constitutes a prospectus of First Midwest, that will be sent to the stockholders of NI Bancshares. Stockholders are advised to read the registration statement and proxy statement/prospectus because it contains important information about First Midwest, NI Bancshares and the proposed transaction. This document and other documents relating to the transaction filed by First Midwest can be obtained free of charge from the SEC's website at . These documents also can be obtained free of charge by accessing First Midwest's website at under the tab "Investor Relations" and then under "SEC Filings." Alternatively, these documents 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 NI Bancshares upon written request to NI Bancshares Corporation, Attn: Michael A. Cullen, President and Chief Executive Officer, 230 W. State Street, Sycamore, Illinois 60178 or by calling (815) 895-2125.
First Midwest, NI Bancshares, and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from NI Bancshares stockholders in connection with the proposed transaction between First Midwest and NI Bancshares under the rules of the SEC. Certain information regarding the interests of these participants and a description of their direct and indirect interests, by security holdings or otherwise, is included in the proxy statement/prospectus regarding the proposed transaction. Additional information about First Midwest and its directors and certain of its officers may be found in First Midwest's definitive proxy statement relating to its 2015 Annual Meeting of Stockholders filed with the SEC on April 14, 2015. This definitive proxy statement can be obtained free of charge from the SEC's website at .
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. 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.
First Midwest is a relationship-focused financial institution and one of Illinois' largest independent publicly-traded bank holding companies. First Midwest's principal subsidiary, First Midwest Bank, and other affiliates provide a full range of business, middle market and retail banking as well as wealth management and private banking services through over 100 locations in metropolitan Chicago, northwest Indiana, central and western Illinois, and eastern Iowa. First Midwest was recognized as having the "Highest Customer Satisfaction with Retail Banking in the Midwest, Two Years in a Row"* according to the J.D. Power 2014 and 2015 Retail Banking Satisfaction Studies(SM). First Midwest's website is .
* First Midwest Bank received the highest numerical score among retail banks in the Midwest region in the proprietary J.D. Power 2014 and 2015 Retail Banking Satisfaction Studies(SM). The 2015 study is based on 82,030 total responses measuring 20 providers in the Midwest region (IA, IL, KS, MO, MN, WI) and measures opinions of consumers with their primary banking provider. Proprietary study results are based on experiences and perceptions of consumers surveyed April 2014 - February 2015. Your experiences may vary. Visit jdpower.com.
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Datum: 26.01.2016 - 22:45 Uhr
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