This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

First Midwest Finally Cleans House

Stocks in this article: FMBI

First Midwest Bancorp's capital ratios declined as a result of the credit actions, but remained strong relative to regulatory requirements. The regulatory ratio of total capital to risk-weighted assets declined to 11.65% as of Sept. 30 from 13.68% the previous quarter, but was well above the 10% required for most banks to be considered well-capitalized. The company's ratio of tangible common equity to tangible assets was 8.26% as of Sept. 30, declining from 8.83% the previous quarter.

First Midwest CEO Michael Scudder said during the company's earnings conference call that "the remaining pool of non-performing and potential performing problem assets are better situated to improve or, as necessary, be liquidated," which "positions us for significantly lower future credit costs and we expect the resulting capital pressure to be relatively short-lived when these benefits are added to our current business momentum."

The company's total portfolio loans declined by 2% during the third quarter, to $5.4 billion, as a result of the loan transfer. Commercial and industrial loan balances grew 1% sequentially and 9% year-over-year, to $1.6 billion as of Sept. 30.

Third-quarter net interest income totaled $70.6 million, increasing from $70 million in the second quarter, but declining from $73.9 million a year earlier, as yields on interest-earning assets declined, following the industry trend. The company's third-quarter net interest margin -- the difference between the average yield on loans and investments and the average cost for deposits and borrowings -- was 3.83%, narrowing from 3.88% the previous quarter, and 3.97% a year earlier.

First Midwest CFO Paul Clemens said during the conference call that "even with $250 million of average earning asset growth over the past two quarters, we continue to maintain over $400 million in short-term overnight instruments." This liquidity, along with our significant decline in non-accrual loans should enable us to further mitigate market pressures" on asset yields.

Clemens also provided some forward guidance on the margin, saying "we think the margin is going to hover around where it is right now," and "maybe actually improve a little bit because we're going to be redeploying first of all about $70 million worth of non-performing, non-accruing loans."

2 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,055.99 +2.28 0.01%
S&P 500 2,092.59 +3.82 0.18%
NASDAQ 4,810.4870 +3.6280 0.08%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs