CST: 25/07/2016 23:30:22   

First Midwest Bancorp, Inc. Announces 2015 Fourth Quarter and Full Year Results

181 Days ago

ITASCA, IL--(Marketwired - Jan 26, 2016) -  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.

SELECT FOURTH QUARTER HIGHLIGHTS

  • Increased earnings per share to $0.29, or 7%, compared to the fourth quarter of 2014, excluding the valuation adjustment and acquisition and integration related expenses.

  • Expanded fee-based revenues to $34 million, an increase of 16% from the fourth quarter of 2014.

  • Grew total loans to over $7 billion, up 7% from December 31, 2014 and 15% annualized from September 30, 2015.

  • Reduced non-performing assets to $62 million, a decline of 33% from December 31, 2014 and 13% from September 30, 2015.

  • Reduced loans past due 30-89 days to $16 million, down 19% from December 31, 2014 and 43% from September 30, 2015.

  • Completed the acquisition of The Peoples' Bank of Arlington Heights on December 3, 2015, adding $92 million in deposits and $57 million in loans, and concluded the conversion of operating systems on December 7, 2015.

  • Announced the acquisition of The National Bank & Trust Company of Sycamore on November 12, 2015, with $680 million in assets and $700 million in trust assets under management, receiving Bank Regulatory approvals by mid-January of 2016.

"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."

RECENT EVENTS

Strategic Branch Initiatives

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.

Pending Acquisition

The National Bank & Trust Company of Sycamore

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.

Completed Acquisition

The Peoples' Bank of Arlington Heights

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.

 
OPERATING PERFORMANCE
Net Interest Income and Margin Analysis
(Dollar amounts in thousands)
 
    Quarters Ended
    December 31, 2015   September 30, 2015   December 31, 2014
    Average Balance    Interest
Earned/
Paid 
  Yield/
Rate
(%)
  Average
Balance 
  Interest
Earned/
Paid 
  Yield/
Rate
(%)
  Average
Balance 
  Interest
Earned/
Paid 
  Yield/
Rate
(%)
Assets:                                                
Other interest-earning assets   $ 587,112     $ 530     0.36   $ 820,318     $ 645     0.31   $ 625,183     $ 527     0.33
Securities (1)     1,260,167       9,855     3.13     1,194,711       9,559     3.20     1,113,546       9,992     3.59
Federal Home Loan Bank ("FHLB") and Federal Reserve Bank ("FRB") stock     38,926       371     3.81     38,748       369     3.81     36,209       342     3.78
Loans (1)(2)     7,013,586       76,405     4.32     6,887,611       76,328     4.40     6,545,967       73,371     4.45
  Total interest-earning assets (1)     8,899,791       87,161     3.89     8,941,388       86,901     3.86     8,320,905       84,232     4.02
Cash and due from banks     131,589                   132,504                   126,317              
Allowance for loan and covered loan losses     (74,823 )                 (73,928 )                 (74,686 )            
Other assets     865,873                   875,668                   859,633              
    Total assets   $ 9,822,430                 $ 9,875,632                 $ 9,232,169              
Liabilities and Stockholders' Equity:                                                            
Interest-bearing core deposits (3)   $ 4,471,645       930     0.08   $ 4,465,956       931     0.08   $ 4,144,391       984     0.09
Time deposits     1,152,895       1,341     0.46     1,173,127       1,398     0.47     1,255,355       1,479     0.47
Borrowed funds     167,120       1,250     2.97     168,807       928     2.18     111,213       12     0.04
Senior and subordinated debt     201,168       3,134     6.18     201,083       3,133     6.18     194,137       3,015     6.16
  Total interest-bearing liabilities     5,992,828       6,655     0.44     6,008,973       6,390     0.42     5,705,096       5,490     0.38
Demand deposits (3)     2,560,604                   2,601,442                   2,339,298              
  Total funding sources     8,553,432                   8,610,415                   8,044,394              
Other liabilities     114,492                   130,250                   115,093              
Stockholders' equity - common     1,154,506                   1,134,967                   1,072,682              
    Total liabilities and stockholders' equity   $ 9,822,430                 $ 9,875,632                 $ 9,232,169              
Tax-equivalent net interest income/margin (1)             80,506     3.59             80,511     3.58             78,742     3.76
Tax-equivalent adjustment             (2,494 )                 (2,609 )                 (2,923 )    
    Net interest income (GAAP)           $ 78,012                 $ 77,902                 $ 75,819      
                                                                 
(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%. This non-GAAP financial measure assists management in comparing revenue from both taxable and tax-exempt sources. The corresponding income tax impact related to tax-exempt items is recorded in income tax expense. These adjustments have no impact on net income.
(2) Includes loans acquired through Federal Deposit Insurance Corporation ("FDIC")-assisted transactions subject to loss sharing agreements ("covered loans") and a related FDIC indemnification asset.
(3) See the Deposit Composition table for further average balance detail by category.

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.

 
Fee-based Revenues and Total Noninterest Income Analysis
(Dollar amounts in thousands)
 
    Quarters Ended     December 31, 2015
Percent Change from
 
    December 31,
 2015
  September 30,
 2015
  December 31,
 2014
    September 30,
 2015
    December 31,
 2014
 
Service charges on deposit accounts   $ 10,303   $ 10,519   $ 10,015     (2.1 )   2.9  
Wealth management fees     7,493     7,222     6,744     3.8     11.1  
Card-based fees     6,761     6,868     6,390     (1.6 )   5.8  
Merchant servicing fees (1)     2,929     3,207     2,703     (8.7 )   8.4  
Mortgage banking income     1,777     1,402     812     26.7     118.8  
Other service charges, commissions, and fees     4,664     3,900     2,700     19.6     72.7  
  Total fee-based revenues     33,927     33,118     29,364     2.4     15.5  
Other income     1,729     1,372     1,767     26.0     (2.2 )
Net securities gains (losses)     822     524     (63 )   56.9     N/M  
  Total noninterest income   $ 36,478   $ 35,014   $ 31,068     4.2     17.4  
                                   
N/M - Not meaningful. 
(1) Merchant servicing fees are substantially offset by merchant card expense included in noninterest expense for each period presented.
   

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.

 
Noninterest Expense Analysis
(Dollar amounts in thousands)
 
    Quarters Ended     December 31, 2015
Percent Change from
 
    December 31,
 2015
    September 30,
 2015
    December 31,
 2014
    September 30,
 2015
    December 31,
 2014
 
Salaries and employee benefits:                              
  Salaries and wages   $ 34,295     $ 33,554     $ 32,640     2.2     5.1  
  Retirement and other employee benefits     8,925       7,807       7,660     14.3     16.5  
    Total salaries and employee benefits     43,220       41,361       40,300     4.5     7.2  
Net occupancy and equipment expense     9,256       9,406       9,479     (1.6 )   (2.4 )
Professional services     6,117       6,172       6,664     (0.9 )   (8.2 )
Technology and related costs     3,694       3,673       3,444     0.6     7.3  
Merchant card expense (1)     2,495       2,722       2,203     (8.3 )   13.3  
Advertising and promotions     2,211       1,828       2,418     21.0     (8.6 )
Cardholder expenses     1,329       1,354       1,036     (1.8 )   28.3  
Net other real estate owned ("OREO") expense     926       1,290       2,544     (28.2 )   (63.6 )
Other expenses     7,525       6,559       7,446     14.7     1.1  
Property valuation adjustments     8,581       --       --     N/M     N/M  
Acquisition and integration related expenses     1,389       --       9,294     N/M     (85.1 )
      Total noninterest expense   $ 86,743     $ 74,365     $ 84,828     16.6     2.3  
Efficiency ratio (2)     65 %     63 %     66 %            
                                     
N/M - Not meaningful. 
(1) Merchant card expenses are substantially offset by merchant servicing fees included in noninterest income for each period presented.
(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, property valuation adjustments of $8.6 million and acquisition and integration related expenses of $1.4 million are excluded from the efficiency ratio for the fourth quarter of 2015. For the fourth quarter of 2014, acquisition and integration related expenses of $9.3 million are excluded from the efficiency ratio. See the accompanying Non-GAAP Reconciliations for details on the calculation of the efficiency ratio.
   

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.

 
LOAN PORTFOLIO AND ASSET QUALITY
 
Loan Portfolio Composition
(Dollar amounts in thousands)
 
    As of   December 31, 2015
Percent Change from
 
    December 31,
 2015
  September 30,
 2015
  December 31,
 2014
  September 30, 2015 (1)     December 31,
 2014
 
Commercial and industrial   $ 2,524,726   $ 2,392,860   $ 2,253,556   22.0     12.0  
Agricultural     387,440     393,732     358,249   (6.4 )   8.1  
Commercial real estate:                              
  Office     479,374     487,629     494,637   (6.8 )   (3.1 )
  Retail     434,241     432,107     452,225   2.0     (4.0 )
  Industrial     481,839     494,341     531,517   (10.1 )   (9.3 )
  Multi-family     528,324     539,308     564,421   (8.1 )   (6.4 )
  Construction     216,882     192,086     204,236   51.6     6.2  
  Other commercial real estate     931,190     869,748     887,897   28.3     4.9  
      Total commercial real estate     3,071,850     3,015,219     3,134,933   7.5     (2.0 )
      Total corporate loans     5,984,016     5,801,811     5,746,738   12.6     4.1  
Home equity     653,468     647,223     543,185   3.9     20.3  
1-4 family mortgages     355,854     294,261     291,463   83.7     22.1  
Installment     137,602     131,185     76,032   19.6     81.0  
    Total consumer loans     1,146,924     1,072,669     910,680   27.7     25.9  
    Total loans, excluding covered loans     7,130,940     6,874,480     6,657,418   14.9     7.1  
Covered loans     30,775     51,219     79,435   N/M     (61.3 )
    Total loans   $ 7,161,715   $ 6,925,699   $ 6,736,853   13.6     6.3  
 
N/M - Not meaningful. 
(1)  Ratios are presented on an annualized basis.
   

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
(Dollar amounts in thousands)
 
    As of     December 31, 2015
Percent Change from
 
    December 31,
 2015
    September 30,
 2015
    December 31,
 2014
    September 30,
 2015
    December 31,
 2014
 
Asset quality, excluding covered
loans and covered OREO
                             
Non-accrual loans   $ 28,875     $ 32,308     $ 59,971     (10.6 )   (51.9 )
90 days or more past due loans     2,883       4,559       1,173     (36.8 )   N/M  
  Total non-performing loans     31,758       36,867       61,144     (13.9 )   (48.1 )
Accruing troubled debt restructurings ("TDRs")     2,743       2,771       3,704     (1.0 )   (25.9 )
OREO     27,349       31,129       26,898     (12.1 )   1.7  
  Total non-performing assets   $ 61,850     $ 70,767     $ 91,746     (12.6 )   (32.6 )
30-89 days past due loans   $ 16,329     $ 28,629     $ 20,073              
Non-accrual loans to total loans     0.40 %     0.47 %     0.90 %            
Non-performing loans to total loans     0.45 %     0.54 %     0.92 %            
Non-performing assets to total loans plus OREO     0.86 %     1.02 %     1.37 %            
Allowance for Credit Losses                                    
Allowance for loan and covered loan losses   $ 73,630     $ 72,500     $ 72,694              
Reserve for unfunded commitments     1,225       1,225       1,816              
  Total allowance for credit losses   $ 74,855     $ 73,725     $ 74,510              
Allowance for credit losses to total loans (1)     1.05 %     1.06 %     1.11 %            
Allowance for credit losses to non-accrual loans, excluding covered loans     253.57 %     215.45 %     112.19 %            
                                     
N/M - Not meaningful. 
(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 is established as necessary to reflect credit deterioration. The allowance for credit losses to total loans, excluding acquired loans, was 1.11%, 1.14%, and 1.24% at December 31, 2015, September 30, 2015, and December 31, 2014, respectively.
   

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.

 
Charge-Off Data
 (Dollar amounts in thousands)
 
    Quarters Ended     Years Ended  
    December 31,
 2015
    September 30,
 2015
    December 31,
 2014
    December 31, 2015     December 31, 2014  
Net loan charge-offs (1):                              
  Commercial and industrial   $ 1,781     $ 1,601     $ 1,217     $ 13,312     $ 13,471  
  Agricultural     --       --       --       --       153  
  Office, retail, and industrial     267       457       143       2,420       6,848  
  Multi-family     (27 )     67       476       530       856  
  Construction     105       (114 )     (6 )     (214 )     886  
  Other commercial real estate     110       92       (247 )     650       3,107  
  Consumer     1,134       959       342       3,004       6,845  
  Covered     --       1       146       514       (187 )
    Total net loan charge-offs   $ 3,370     $ 3,063     $ 2,071     $ 20,216     $ 31,979  
                                         
Net loan charge-offs to average loans     0.19 %     0.18 %     0.13 %     0.29 %     0.52 %
                                         
(1) Amounts represent charge-offs, net of recoveries.
   

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.

 
DEPOSIT PORTFOLIO
 
Deposit Composition
(Dollar amounts in thousands)
 
    Average for Quarters Ended   December 31, 2015
Percent Change from
 
    December 31,
 2015
  September 30,
 2015
  December 31,
 2014
  September 30, 2015     December 31, 2014  
Demand deposits   $ 2,560,604   $ 2,601,442   $ 2,339,298   (1.6 )   9.5  
Savings deposits     1,483,962     1,471,003     1,306,388   0.9     13.6  
NOW accounts     1,411,425     1,405,371     1,331,360   0.4     6.0  
Money market accounts     1,576,258     1,589,582     1,506,643   (0.8 )   4.6  
  Core deposits     7,032,249     7,067,398     6,483,689   (0.5 )   8.5  
Time deposits and other     1,152,895     1,173,127     1,255,355   (1.7 )   (8.2 )
    Total deposits   $ 8,185,144   $ 8,240,525   $ 7,739,044   (0.7 )   5.8  
                                   

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.

 
CAPITAL MANAGEMENT
 
Capital Ratios
 
    As of  
    December 31,
 2015
    September 30,
 2015
    June 30,
 2015
    December 31,
 2014
 
Company regulatory capital ratios (1):                        
  Total capital to risk-weighted assets   11.15 %   11.43 %   11.37 %   11.23 %
  Tier 1 capital to risk-weighted assets   10.28 %   10.55 %   10.49 %   10.18 %
  Tier 1 common capital to risk-weighted assets   9.73 %   10.00 %   9.93 %   N/A  
  Tier 1 leverage to average assets   9.40 %   9.29 %   9.34 %   9.03 %
Company tangible common equity ratios (2)(3):                        
  Tangible common equity to tangible assets   8.59 %   8.50 %   8.32 %   8.41 %
  Tangible common equity, excluding other comprehensive loss,to tangible assets   8.89 %   8.67 %   8.54 %   8.59 %
  Tangible common equity to risk-weighted assets   9.29 %   9.70 %   9.55 %   9.73 %
N/A - Not applicable. 
   
(1) Basel III Capital Rules became effective for the Company on January 1, 2015. These rules revise the risk-based capital requirements and introduce a new capital measure, Tier 1 common capital to risk-weighted assets. As a result, ratios subsequent to December 31, 2014 are computed using the new rules and prior periods presented are reported using the regulatory guidance applicable at that time.
(2) Ratio is not subject to formal Federal Reserve regulatory guidance.
(3) Tangible common equity ("TCE") represents common stockholders' equity less goodwill and identifiable intangible assets. In management's view, Tier 1 common capital and TCE 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 competitors. See the accompanying Non-GAAP Reconciliations for details of the calculation of these ratios.

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.

Conference Call

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, 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 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 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 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.

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 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 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 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.

Participants in this Transaction

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 www.sec.gov.

Non-GAAP Financial Information

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.

About the Company

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 www.firstmidwest.com.

* 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.

Accompanying Unaudited Selected Financial Information

   
Consolidated Statements of Financial Condition (Unaudited)
(Dollar amounts in thousands)
 
       
    As of  
    December 31,     September 30,     June 30,     March 31,     December 31,  
    2015     2015     2015     2015     2014  
Period-End Balance Sheet                                        
Assets                                        
Cash and due from banks   $ 114,587     $ 125,279     $ 135,546     $ 126,450     $ 117,315  
Interest-bearing deposits in other banks     266,615       822,264       811,287       492,607       488,947  
Trading securities, at fair value     16,894       17,038       18,172       18,374       17,460  
Securities available-for-sale, at fair value     1,306,636       1,151,418       1,142,407       1,151,603       1,187,009  
Securities held-to-maturity, at amortized cost     23,152       23,723       24,292       25,861       26,555  
FHLB and FRB stock     39,306       38,748       38,748       38,748       37,558  
Loans, excluding covered loans:                                        
  Commercial and industrial     2,524,726       2,392,860       2,366,056       2,318,058       2,253,556  
  Agricultural     387,440       393,732       377,410       368,836       358,249  
  Commercial real estate:                                        
    Office, retail, and industrial     1,395,454       1,414,077       1,432,502       1,443,562       1,478,379  
    Multi-family     528,324       539,308       557,947       560,800       564,421  
    Construction     216,882       192,086       190,970       191,104       204,236  
    Other commercial real estate     931,190       869,748       871,119       881,026       887,897  
  Home equity     653,468       647,223       599,320       599,543       543,185  
  1-4 family mortgages     355,854       294,261       283,562       285,758       291,463  
  Installment     137,602       131,185       113,382       92,834       76,032  
    Total loans, excluding covered loans     7,130,940       6,874,480       6,792,268       6,741,521       6,657,418  
Covered loans     30,775       51,219       57,917       62,830       79,435  
Allowance for loan and covered loan losses     (73,630 )     (72,500 )     (71,463 )     (70,990 )     (72,694 )
  Net loans     7,088,085       6,853,199       6,778,722       6,733,361       6,664,159  
OREO, excluding covered OREO     27,349       31,129       24,471       26,042       26,898  
Covered OREO     433       906       3,759       7,309       8,068  
FDIC indemnification asset     3,903       6,106       7,335       8,540       8,452  
Premises, furniture, and equipment, net     122,278       127,443       128,621       128,698       131,109  
Investment in BOLI     209,601       208,666       207,814       207,190       206,498  
Goodwill and other intangible assets     339,277       331,250       332,223       333,202       334,199  
Accrued interest receivable and other assets     174,560       197,877       209,630       200,611       190,912  
  Total assets   $ 9,732,676     $ 9,935,046     $ 9,863,027     $ 9,498,596     $ 9,445,139  
Liabilities and Stockholders' Equity                                        
Noninterest-bearing deposits   $ 2,414,454     $ 2,671,793     $ 2,508,316     $ 2,339,492     $ 2,301,757  
Interest-bearing deposits     5,683,284       5,624,657       5,704,355       5,575,187       5,586,001  
  Total deposits     8,097,738       8,296,450       8,212,671       7,914,679       7,887,758  
Borrowed funds     165,096       169,943       189,036       131,200       137,994  
Senior and subordinated debt     201,208       201,123       201,039       200,954       200,869  
Accrued interest payable and other liabilities     122,366       119,861       135,324       135,813       117,743  
Stockholders' equity     1,146,268       1,147,669       1,124,957       1,115,950       1,100,775  
  Total liabilities and stockholders' equity   $ 9,732,676     $ 9,935,046     $ 9,863,027     $ 9,498,596     $ 9,445,139  
Stockholders' equity, excluding accumulated other comprehensive income ("AOCI")   $ 1,174,657     $ 1,163,487     $ 1,146,189     $ 1,128,755     $ 1,116,630  
Stockholders' equity, common     1,146,268       1,147,669       1,124,957       1,115,950       1,100,775  
                                         
   
Condensed Consolidated Statements of Income (Unaudited)
(Dollar amounts in thousands)
 
                                 
    Quarters Ended     Years Ended  
    December 31,   September 30,   June 30,   March 31,   December 31,     December 31,   December 31,  
    2015   2015   2015   2015   2014     2015   2014  
Income Statement                                              
Interest income   $ 84,667   $ 84,292   $ 84,556   $ 82,469   $ 81,309     $ 335,984   $ 299,864  
Interest expense     6,655     6,390     5,654     5,687     5,490       24,386     23,012  
  Net interest income     78,012     77,902     78,902     76,782     75,819       311,598     276,852  
Provision for loan and covered loan losses     4,500     4,100     6,000     6,552     1,659       21,152     19,168  
      Net interest income after provision for loan and covered loan losses     73,512     73,802     72,902     70,230     74,160       290,446     257,684  
Noninterest Income                                              
    Service charges on deposit accounts     10,303     10,519     9,886     9,271     10,015       39,979     36,910  
    Wealth management fees     7,493     7,222     7,433     7,014     6,744       29,162     26,474  
    Card-based fees     6,761     6,868     6,953     6,402     6,390       26,984     24,340  
    Merchant servicing fees     2,929     3,207     2,938     2,665     2,703       11,739     11,260  
    Mortgage banking income     1,777     1,402     1,439     1,123     812       5,741     4,011  
    Other service charges, commissions, and fees     4,664     3,900     2,924     2,166     2,700       13,654     8,086  
      Total fee-based revenues     33,927     33,118     31,573     28,641     29,364       127,259     111,081  
    Other income     1,437     1,372     1,900     1,948     1,767       6,657     5,545  
    Net securities gains (losses)     822     524     515     512     (63 )     2,373     8,097  
    Gains on sales of properties     292     -     -     -     -       292     3,954  
    Loss on early extinguishment of debt     -     -     -     -     -       -     (2,059 )
      Total noninterest income     36,478     35,014     33,988     31,101     31,068       136,581     126,618  
Noninterest Expense                                              
  Salaries and employee benefits:                                              
    Salaries and wages     34,295     33,554     33,096     32,794     32,640       133,739     116,578  
    Retirement and other employee benefits     8,925     7,807     7,198     7,922     7,660       31,852     27,245  
      Total salaries and employee benefits     43,220     41,361     40,294     40,716     40,300       165,591     143,823  
    Net occupancy and equipment expense     9,256     9,406     9,622     10,436     9,479       38,720     35,181  
    Professional services     6,117     6,172     5,322     5,109     6,664       22,720     23,436  
    Technology and related costs     3,694     3,673     3,527     3,687     3,444       14,581     12,875  
    Merchant card expense     2,495     2,722     2,472     2,197     2,203       9,886     9,195  
    Advertising and promotions     2,211     1,828     2,344     1,223     2,418       7,606     8,159  
    Cardholder expenses     1,329     1,354     1,292     1,268     1,036       5,243     4,251  
    Net OREO expense     926     1,290     1,861     1,204     2,544       5,281     7,075  
    Other expenses     7,525     6,559     6,717     6,817     7,446       27,618     33,034  
    Property valuation adjustments     8,581     -     -     -     -       8,581     -  
    Acquisition and integration related expense     1,389     -     -     -     9,294       1,389     13,872  
      Total noninterest expense     86,743     74,365     73,451     72,657     84,828       307,216     283,826  
    Income before income tax expense     23,247     34,451     33,439     28,674     20,400       119,811     100,476  
    Income tax expense     6,923     11,167     10,865     8,792     5,807       37,747     31,170  
      Net income   $ 16,324   $ 23,284   $ 22,574   $ 19,882   $ 14,593     $ 82,064   $ 69,306  
Net income applicable to common shares   $ 16,145   $ 23,058   $ 22,325   $ 19,654   $ 14,454     $ 81,182   $ 68,470  
Net income applicable to common shares, excluding certain significant transactions (1)   $ 22,127   $ 23,058   $ 22,325   $ 19,654   $ 20,030     $ 87,164   $ 54,598  
                                               
   
Footnotes to Condensed Consolidated Statements of Income
(1) Certain significant transactions include property valuation adjustments related to strategic branch initiatives and acquisition and integration related expenses associated with completed and pending acquisitions.
   
   
Selected Financial Information (Unaudited)
(Amounts in thousands, except per share data)
 
                                           
    As of or for the  
    Quarters Ended     Years Ended  
    December 31,     September 30,     June 30,     March 31,     December 31,     December 31,     December 31,  
    2015     2015     2015     2015     2014     2015     2014  
Earnings Per Share                                                        
Basic earnings per common share ("EPS") (1)   $ 0.21     $ 0.30     $ 0.29     $ 0.26     $ 0.19     $ 1.05     $ 0.92  
Diluted EPS (1)   $ 0.21     $ 0.30     $ 0.29     $ 0.26     $ 0.19     $ 1.05     $ 0.92  
Diluted EPS, excluding certain significant transactions (1)(7)   $ 0.29     $ 0.30     $ 0.29     $ 0.26     $ 0.27     $ 1.13     $ 1.03  
Common Stock and Related Per Common Share Data  
Book value   $ 14.70     $ 14.72     $ 14.43     $ 14.31     $ 14.17     $ 14.70     $ 14.17  
Tangible book value     10.35       10.47       10.17       10.04       9.87       10.35       9.87  
Dividends declared per share     0.09       0.09       0.09       0.09       0.08       0.36       0.31  
Closing price at period end     18.43       17.54       18.97       17.37       17.11       18.43       17.11  
Closing price to book value     1.3       1.2       1.3       1.2       1.2       1.3       1.2  
Period end shares outstanding     77,952       77,942       77,961       77,957       77,695       77,952       77,695  
Period end treasury shares     10,276       10,286       10,267       10,271       10,533       10,276       10,533  
Common dividends   $ 7,017     $ 7,014     $ 7,022     $ 7,011     $ 6,206     $ 28,064     $ 23,530  
Key Ratios/Data                                                        
Return on average common equity (1)(2)     5.55 %     8.06 %     7.97 %     7.15 %     5.35 %     7.17 %     6.56 %
Return on average tangible common equity (1)(2)     8.06 %     11.68 %     11.62 %     10.52 %     7.89 %     10.44 %     9.32 %
Return on average tangible common equity, excluding certain significant transactions (1)(2)(7)     10.94 %     11.68 %     11.62 %     10.52 %     10.83 %     11.19 %     10.42 %
Return on average assets (2)     0.66 %     0.94 %     0.94 %     0.85 %     0.63 %     0.85 %     0.80 %
Efficiency ratio (1)     65.11 %     63.20 %     61.70 %     64.46 %     66.09 %     63.61 %     64.57 %
Net interest margin (3)     3.59 %     3.58 %     3.76 %     3.79 %     3.76 %     3.68 %     3.69 %
Loans-to-deposits     88.44 %     83.48 %     83.41 %     85.97 %     85.41 %     88.44 %     85.41 %
Yield on average interest-earning assets (3)     3.89 %     3.86 %     4.02 %     4.06 %     4.02 %     3.95 %     3.98 %
Cost of funds     0.44 %     0.42 %     0.38 %     0.39 %     0.38 %     0.41 %     0.43 %
Net noninterest expense to average assets     2.08 %     1.60 %     1.66 %     1.80 %     2.31 %     1.79 %     1.93 %
Effective income tax rate     29.78 %     32.41 %     32.50 %     30.66 %     28.47 %     31.51 %     31.02 %
Capital Ratios                                                        
Total capital to risk-weighted assets (1)     11.15 %     11.43 %     11.37 %     11.23 %     11.23 %     11.15 %     11.23 %
Tier 1 capital to risk-weighted assets (1)     10.28 %     10.55 %     10.49 %     10.35 %     10.19 %     10.28 %     10.19 %
Tier 1 common capital to risk- weighted assets (CET1) (1)(4)     9.73 %     10.00 %     9.93 %     9.79 %     N/A       9.73 %     N/A  
Tier 1 leverage to average assets (1)     9.40 %     9.29 %     9.34 %     9.32 %     9.03 %     9.40 %     9.03 %
Tangible common equity to tangible assets (1)     8.59 %     8.50 %     8.32 %     8.54 %     8.41 %     8.59 %     8.41 %
Tangible common equity, excluding AOCI, to tangible assets (1)     8.89 %     8.67 %     8.54 %     8.68 %     8.59 %     8.89 %     8.59 %
Tangible common equity to risk- weighted assets (1)     9.29 %     9.70 %     9.55 %     9.51 %     9.73 %     9.29 %     9.73 %
   
Note: Selected Financial Information footnotes are located at the end of this section.  
   
 
Selected Financial Information (Unaudited)
(Amounts in thousands, except per share data)
                                             
    As of or for the  
    Quarters Ended       Years Ended  
    December 31,     September 30,     June 30,     March 31,     December 31,       December 31,     December 31,  
    2015     2015     2015     2015     2014       2015     2014  
Asset Quality Performance Data                                                          
Non-performing assets (5)                                                          
Commercial and industrial   $ 5,587     $ 6,438     $ 11,100     $ 12,913     $ 22,693       $ 5,587     $ 22,693  
Agricultural     355       112       317       358       360         355       360  
Commercial real estate:                                                          
  Office, retail, and industrial     6,875       6,961       12,599       11,363       12,939         6,875       12,939  
  Multi-family     796       1,046       1,287       700       754         796       754  
  Construction     905       3,332       4,940       7,488       6,981         905       6,981  
  Other commercial real estate     5,611       5,898       5,513       5,915       6,970         5,611       6,970  
Consumer     8,746       8,521       9,253       9,340       9,274         8,746       9,274  
  Total non-accrual loans     28,875       32,308       45,009       48,077       59,971         28,875       59,971  
90 days or more past due loans     2,883       4,559       2,744       3,564       1,173         2,883       1,173  
  Total non-performing loans     31,758       36,867       47,753       51,641       61,144         31,758       61,144  
Accruing troubled debt restructurings     2,743       2,771       3,067       3,581       3,704         2,743       3,704  
Other real estate owned     27,349       31,129       24,471       26,042       26,898         27,349       26,898  
Total non-performing assets   $ 61,850     $ 70,767     $ 75,291     $ 81,264     $ 91,746       $ 61,850     $ 91,746  
30-89 days past due loans (5)   $ 16,329     $ 28,629     $ 28,625     $ 18,631     $ 20,073       $ 16,329     $ 20,073  
Allowance for credit losses                                                          
Allowance for loan losses   $ 71,992     $ 68,384     $ 66,602     $ 65,311     $ 65,468       $ 71,992     $ 65,468  
Allowance for covered loan losses     1,638       4,116       4,861       5,679       7,226         1,638       7,226  
Reserve for unfunded commitments     1,225       1,225       1,816       1,816       1,816         1,225       1,816  
Total allowance for credit losses   $ 74,855     $ 73,725     $ 73,279     $ 72,806     $ 74,510       $ 74,855     $ 74,510  
Provision for loan and covered loan losses   $ 4,500     $ 4,100     $ 6,000     $ 6,552     $ 1,659       $ 21,152     $ 19,168  
Net charge-offs by category                                                          
Commercial and industrial   $ 1,781     $ 1,601     $ 3,273     $ 6,657     $ 1,217       $ 13,312     $ 13,471  
Agricultural     -       -       -       -       -         -       153  
Commercial real estate:                                                          
  Office, retail, and industrial     267       457       1,862       (166 )     143         2,420       6,848  
  Multi-family     (27 )     67       466       24       476         530       856  
  Construction     105       (114 )     (188 )     (17 )     (6 )       (214 )     886  
  Other commercial real estate     110       92       (603 )     1,051       (247 )       650       3,107  
Consumer     1,134       959       432       479       342         3,004       6,845  
  Net charge-offs, excluding covered loans     3,370       3,062       5,242       8,028       1,925         19,702       32,166  
Charge-offs on covered loans     -       1       285       228       146         514       (187 )
    Total net charge-offs   $ 3,370     $ 3,063     $ 5,527     $ 8,256     $ 2,071       $ 20,216     $ 31,979  
Total recoveries included above   $ 1,031     $ 1,294     $ 2,579     $ 1,797     $ 2,669       $ 6,701     $ 8,205  
 
Note: Selected Financial Information footnotes are located at the end of this section.
 
 
Selected Financial Information (Unaudited)
(Amounts in thousands, except per share data)
                                           
    As of or for the  
    Quarters Ended     Years Ended  
    December 31,     September 30,     June 30,     March 31,     December 31,     December 31,     December 31,  
    2015     2015     2015     2015     2014     2015     2014  
Asset Quality ratios (5)                                          
Non-accrual loans to total loans   0.40 %   0.47 %   0.66 %   0.71 %   0.90 %   0.40 %   0.90 %
Non-performing loans to total loans   0.45 %   0.54 %   0.70 %   0.77 %   0.92 %   0.45 %   0.92 %
Non-performing assets to total loans plus OREO   0.86 %   1.02 %   1.10 %   1.20 %   1.37 %   0.86 %   1.37 %
Non-performing assets to tangible common equity plus allowance for credit losses   7.03 %   7.99 %   8.74 %   9.56 %   11.00 %   7.03 %   11.00 %
Non-accrual loans to total assets   0.30 %   0.33 %   0.46 %   0.51 %   0.64 %   0.30 %   0.64 %
Allowance for credit losses and net charge-off ratios                                          
Allowance for credit losses to total loans (6)   1.05 %   1.06 %   1.07 %   1.07 %   1.11 %   1.05 %   1.11 %
Allowance for credit losses to loans, excluding acquired loans   1.11 %   1.14 %   1.16 %   1.19 %   1.24 %   1.11 %   1.24 %
Allowance for credit losses to non-accrual loans (5)   253.57 %   215.45 %   152.01 %   139.62 %   112.19 %   253.57 %   112.19 %
Allowance for credit losses to non-performing loans (5)   230.55 %   188.81 %   143.27 %   129.99 %   110.04 %   230.55 %   110.04 %
Net charge-offs to average loans (2)   0.19 %   0.18 %   0.33 %   0.50 %   0.13 %   0.29 %   0.52 %
 
Footnotes to Selected Financial Information
(1)   See the Non-GAAP Reconciliations section for the detailed calculation.
(2)   Annualized based on the actual number of days for each period presented.
(3)   Tax equivalent basis reflects federal and state tax benefits.
(4)   Basel III Capital Rules became effective for the Company on January 1, 2015. These rules revise the risk-based capital requirements and introduce a new capital measure, Tier 1 common capital to risk weighted assets. As a result, ratios subsequent to December 31, 2014 are computed using the new rules and prior periods presented are reported using the regulatory guidance applicable at that time.
(5)   Excludes covered loans and covered OREO.
(6)   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 as necessary to reflect credit deterioration.
(7)   Certain significant transactions include property valuation adjustments related to strategic branch initiatives and acquisition and integration related expenses associated with completed and pending acquisitions.
     
 
Non-GAAP Reconciliations (Unaudited)
(Amounts in thousands, except per share data)
                                             
    Quarters Ended       Years Ended  
    December 31,     September 30,     June 30,     March 31,     December 31,       December 31,     December 31,  
    2015     2015     2015     2015     2014       2015     2014  
Earnings Per Share                                                          
Net income   $ 16,324     $ 23,284     $ 22,574     $ 19,882     $ 14,593       $ 82,064     $ 69,306  
Net income applicable to non- vested restricted shares     (179 )     (226 )     (249 )     (228 )     (139 )       (882 )     (836 )
  Net income applicable to common shares     16,145       23,058       22,325       19,654       14,454         81,182       68,470  
Tax-equivalent property valuation adjustments     5,149       -       -       -       -         5,149       -  
Tax-equivalent acquisition and integration related expenses     833       -       -       -       5,576         833       8,323  
  Net income applicable to common shares, excluding certain significant transactions (1)   $ 22,127     $ 23,058     $ 22,325     $ 19,654     $ 20,030       $ 87,164     $ 76,793  
Weighted-average common shares outstanding:                                                          
  Weighted-average common shares outstanding (basic)     77,121       77,106       77,089       76,918       75,119         77,059       74,484  
  Dilutive effect of common stock equivalents     13       13       12       12       12         13       12  
    Weighted-average diluted common shares outstanding     77,134       77,119       77,101       76,930       75,131         77,072       74,496  
Basic EPS   $ 0.21     $ 0.30     $ 0.29     $ 0.26     $ 0.19       $ 1.05     $ 0.92  
Diluted EPS   $ 0.21     $ 0.30     $ 0.29     $ 0.26     $ 0.19       $ 1.05     $ 0.92  
Diluted EPS, excluding certain significant transactions (1)   $ 0.29     $ 0.30     $ 0.29     $ 0.26     $ 0.27       $ 1.13     $ 1.03  
Anti-dilutive shares not included in the computation of diluted EPS     735       751       768       948       1,146         800       1,198  
Efficiency Ratio Calculation                                                          
Noninterest expense   $ 86,743     $ 74,365     $ 73,451     $ 72,657     $ 84,828       $ 307,216     $ 283,826  
Less:                                                          
  Net OREO expense     (926 )     (1,290 )     (1,861 )     (1,204 )     (2,544 )       (5,281 )     (7,075 )
  Property valuation adjustments     (8,581 )     -       -       -       -         (8,581 )     -  
  Acquisition and integration related expenses     (1,389 )     -       -       -       (9,294 )       (1,389 )     (13,872 )
    Total   $ 75,847     $ 73,075     $ 71,590     $ 71,453     $ 72,990       $ 291,965     $ 262,879  
Tax-equivalent net interest income (2)   $ 80,506     $ 80,511     $ 81,595     $ 79,665     $ 78,742       $ 322,277     $ 288,589  
Fee-based revenues     33,927       33,118       31,573       28,641       29,364         127,259       111,081  
Add:                                                          
  Other income, excluding BOLI income     515       446       446       1,065       924         2,472       2,672  
  Tax-adjusted BOLI (BOLI/.6)     1,537       1,543       2,423       1,472       1,405         6,975       4,788  
    Total   $ 116,485     $ 115,618     $ 116,037     $ 110,843     $ 110,435       $ 458,983     $ 407,130  
Efficiency ratio     65.11 %     63.20 %     61.70 %     64.46 %     66.09 %       63.61 %     64.57 %
Tax Equivalent Net Interest Income                                                          
Net interest income   $ 78,012     $ 77,902     $ 78,902     $ 76,782     $ 75,819       $ 311,598     $ 276,852  
Tax-equivalent adjustment     2,494       2,609       2,693       2,883       2,923         10,679       11,737  
  Tax-equivalent net interest income (2)   $ 80,506     $ 80,511     $ 81,595     $ 79,665     $ 78,742       $ 322,277     $ 288,589  
 
Note: Non-GAAP Reconciliations footnotes are located at the end of this section.
 
 
Non-GAAP Reconciliations (Unaudited)
(Amounts in thousands, except per share data)
                                             
                                             
    As of or for the  
    Quarters Ended       Years Ended  
    December 31,     September 30,     June 30,     March 31,     December 31,       December 31,     December 31,  
    2015     2015     2015     2015     2014       2015     2014  
Risk-Based Capital Data (3)                                                          
Common stock   $ 882     $ 882     $ 882     $ 882     $ 882       $ 882     $ 882  
Additional paid-in capital     446,672       445,037       443,558       441,689       449,798         446,672       449,798  
Retained earnings     953,516       944,209       927,939       912,387       899,516         953,516       899,516  
Treasury stock, at cost     (226,413 )     (226,641 )     (226,190 )     (226,203 )     (233,566 )       (226,413 )     (233,566 )
Goodwill and other intangible assets     (327,115 )     (318,854 )     (319,243 )     (319,635 )     (334,199 )       (327,115 )     (334,199 )
Disallowed deferred tax assets (CET1) (3)     (1,888 )     (2,889 )     (3,046 )     (3,354 )     (30,638 )       (1,888 )     (30,638 )
  Common equity Tier 1 capital     845,654       841,744       823,900       805,766       751,793         845,654       751,793  
Trust preferred securities     50,690       50,690       50,690       50,690       50,690         50,690       50,690  
Disallowed deferred tax assets (other) (3)     (2,868 )     (4,334 )     (4,568 )     (5,030 )     N/A         (2,868 )     N/A  
  Tier 1 capital     893,476       888,100       870,022       851,426       802,483         893,476       802,483  
Tier 2 capital     74,855       73,725       73,279       72,806       82,209         74,855       82,209  
  Total capital   $ 968,331     $ 961,825     $ 943,301     $ 924,232     $ 884,692       $ 968,331     $ 884,692  
Risk-weighted assets   $ 8,687,864     $ 8,414,729     $ 8,296,679     $ 8,229,627     $ 7,876,754       $ 8,687,864     $ 7,876,754  
Adjusted average assets   $ 9,501,087     $ 9,559,796     $ 9,318,347     $ 9,134,320     $ 8,884,045       $ 9,501,087     $ 8,884,045  
Total capital to risk-weighted assets     11.15 %     11.43 %     11.37 %     11.23 %     11.23 %       11.15 %     11.23 %
Tier 1 capital to risk-weighted assets     10.28 %     10.55 %     10.49 %     10.35 %     10.19 %       10.28 %     10.19 %
Tier 1 common capital to risk- weighted assets (CET1) (3)     9.73 %     10.00 %     9.93 %     9.79 %     N/A         9.73 %     N/A  
Tier 1 leverage to average assets     9.40 %     9.29 %     9.34 %     9.32 %     9.03 %       9.40 %     9.03 %
Tangible Common Equity                                                          
Stockholders' equity   $ 1,146,268     $ 1,147,669     $ 1,124,957     $ 1,115,950     $ 1,100,775       $ 1,146,268     $ 1,100,775  
Less: goodwill and other intangible assets     (339,277 )     (331,250 )     (332,223 )     (333,202 )     (334,199 )       (339,277 )     (334,199 )
  Tangible common equity     806,991       816,419       792,734       782,748       766,576         806,991       766,576  
Less: AOCI     28,389       15,818       21,232       12,805       15,855         28,389       15,855  
  Tangible common equity, excluding AOCI   $ 835,380     $ 832,237     $ 813,966     $ 795,553     $ 782,431       $ 835,380     $ 782,431  
Total assets   $ 9,732,676     $ 9,935,046     $ 9,863,027     $ 9,498,596     $ 9,445,139       $ 9,732,676     $ 9,445,139  
Less: goodwill and other intangible assets     (339,277 )     (331,250 )     (332,223 )     (333,202 )     (334,199 )       (339,277 )     (334,199 )
  Tangible assets   $ 9,393,399     $ 9,603,796     $ 9,530,804     $ 9,165,394     $ 9,110,940       $ 9,393,399     $ 9,110,940  
Tangible common equity to tangible assets     8.59 %     8.50 %     8.32 %     8.54 %     8.41 %       8.59 %     8.41 %
Tangible common equity, excluding AOCI, to tangible assets     8.89 %     8.67 %     8.54 %     8.68 %     8.59 %       8.89 %     8.59 %
Tangible common equity to risk- weighted assets     9.29 %     9.70 %     9.55 %     9.51 %     9.73 %       9.29 %     9.73 %
 
Note: Non-GAAP Reconciliations footnotes are located at the end of this section.
 
 
Non-GAAP Reconciliations (Unaudited)
(Amounts in thousands, except per share data)
                                             
    As of or for the  
    Quarters Ended       Years Ended  
    December 31,     September 30,     June 30,     March 31,     December 31,       December 31,     December 31,  
    2015     2015     2015     2015     2014       2015     2014  
Return on Average Common and Tangible Common Equity                                                          
Net income applicable to common shares   $ 16,145     $ 23,058     $ 22,325     $ 19,654     $ 14,454       $ 81,182     $ 68,470  
Intangibles amortization     971       973       978       998       842         3,920       2,889  
Tax-equivalent adjustment of intangibles amortization     (388 )     (389 )     (391 )     (399 )     (337 )       (1,568 )     (1,156 )
  Net income applicable to common shares, excluding intangibles amortization     16,728       23,642       22,912       20,253       14,959         83,534       70,203  
Tax-equivalent property valuation adjustments (2)     5,149       -       -       -       -         5,149       -  
Tax-equivalent acquisition and integration related expenses (2)     833       -       -       -       5,576         833       8,323  
  Net income applicable to common shares, excluding certain significant transactions (1)   $ 22,710     $ 23,642     $ 22,912     $ 20,253     $ 20,535       $ 89,516     $ 78,526  
Average stockholders' equity   $ 1,154,506     $ 1,134,967     $ 1,123,530     $ 1,114,762     $ 1,072,682       $ 1,132,058     $ 1,043,566  
Less: average intangible assets     (331,013 )     (331,720 )     (332,694 )     (333,684 )     (320,533 )       (332,269 )     (290,303 )
  Average tangible common equity   $ 823,493     $ 803,247     $ 790,836     $ 781,078     $ 752,149       $ 799,789     $ 753,263  
Return on average common equity (4)     5.55 %     8.06 %     7.97 %     7.15 %     5.35 %       7.17 %     6.56 %
Return on average tangible common equity (4)     8.06 %     11.68 %     11.62 %     10.52 %     7.89 %       10.44 %     9.32 %
Return on average tangible common equity, excluding certain significant transactions (1)(4)     10.94 %     11.68