Fitch Downgrades First Midwest Bancorp Ratings

Most notable among those, Fitch said, was the bank's nonaccruing commercial loans, which increased 113 percent in the first quarter of 2009 and now represent 2.2 percent of that part of its portfolio.

The ratings agency said several commercial real estate categories, including office, retail, and industrial, also have deteriorated.

"Although (First Midwest Bancorp) has a history of solid operating performance, the need to build reserves given the level of asset quality deterioration will likely erode earnings through higher provisioning expenses," it said in a statement.

Fitch has also widened the notching on the bank's outstanding hybrid equity to two notches below the issuer default rating.

Shares of First Midwest Bancorp rose 31 cents, or 3.6 percent, to $9.04 in afternoon trading.