{"id":66104,"date":"2018-01-30T17:59:57","date_gmt":"2018-01-30T23:59:57","guid":{"rendered":"http:\/\/news.medill.northwestern.edu\/chicago\/?p=66104"},"modified":"2018-01-31T09:45:08","modified_gmt":"2018-01-31T15:45:08","slug":"first-midwest-bancorp-shares-sink-as-fourth-quarter-performance-fails-expectations","status":"publish","type":"post","link":"https:\/\/news.medill.northwestern.edu\/chicago\/first-midwest-bancorp-shares-sink-as-fourth-quarter-performance-fails-expectations\/","title":{"rendered":"First Midwest Bancorp shares sink as fourth-quarter performance fails expectations"},"content":{"rendered":"

By Jinman Li<\/strong>
\nMedill Reports<\/em><\/p>\n

Shares plummeted by 4.1 percent after First Midwest Bancorp Inc. (Nasdaq: FMBI), the holding company of First Midwest Bank, released fourth-quarter earnings that fell short of Wall Street expectations.<\/p>\n

The Itasca, Ill.-based company reported net income of $2.3 million, or 2 cents per diluted share, for the quarter ended Dec. 31, 2017, down 88.7 percent compared with $20.7 million, or 25 cents per diluted share, for the year-ago quarter, failing to meet the consensus estimate of 3 cents. <\/p>\n

The tax reform legislation enacted in 2017 contributed to the decline. A downward revaluation of the company’s deferred tax assets, or prepayment of anticipated taxes, triggered an additional income tax expense of $27 million, or 26 cents per share. <\/p>\n

\u201cExcluding tax-related actions and costs attendant to acquired growth, earnings per share improved 6% and 11% for the quarter and full year versus a year ago,\u201d stated Michael L. Scudder, chairman and chief executive officer, in a press release.<\/p>\n

<\/p>\n

First Midwest\u2019s net interest income for the fourth quarter of 2017 surged 35.6 percent to $119.3 million, compared with $88.0 million a year ago. \u201cThe biggest reason is the Standard Bancshares Inc. acquisition that was closed last year in January,\u201d said John Rodis, research analyst at Fig Partners LLC, who rated First Midwest as \u201cmarket perform\u201d before the release. <\/p>\n

Noninterest income sank to $34.9 million, down 12.1 percent, from $39.7 million in the same period last year. The Durbin Amendment of the Dodd-Frank Act, which took effect in the third quarter of 2017, dragged the noninterest income down by $2 million to $3 million a quarter, said Rodis. Excluding Durbin, the company\u2019s noninterest income climbed 10 percent from the same period in 2016. <\/p>\n

Total net charge-offs rose to $7.1 million from $4.5 million. The company increased its provision for loan losses to $8.0 million, up 51.2 percent compared with the year-ago quarter. <\/p>\n

Despite the increase in net charge-offs and provision for loan losses, Terry McEvoy, managing director of Stephens Inc., said the bank\u2019s credit trends are \u201cstable and healthy,\u201d consistent with the trend among Midwest banks, as the net charge-offs and level of non-performing assets are generally low. <\/p>\n

For the full year 2017, First Midwest saw a 6.8 percent increase in its net income, to $98.4 million from $92.3 million in 2016. However, because of an increase in the number of outstanding shares caused by the acquisition, earnings per diluted shares slid to 96 cents from $1.14. <\/p>\n

Looking to 2018, the company expects net interest income to rise by mid- to high-single digits and the noninterest income to grow by low-single digit. <\/p>\n

\u201cHigher interest rates, as well as the benefits of a lower corporate tax structure, will generate earnings momentum and further strengthen capital,\u201d said Scudder. <\/p>\n

First Midwest currently operates more than 130 branches in metropolitan Chicago, northwest Indiana, central and western Illinois, and eastern Iowa. The bank closed 16 branches, ten of them obtained in its acquisition of Standard Bancshares Inc., the holding company of Illinois-based Standard Bank. <\/p>\n

\u201cWhen a bank closes a branch, it saves expenses and it tends to have a positive impact on profitability and earnings,\u201d said McEvoy, who projects that the branch reduction trend will continue in 2018. <\/p>\n

First Midwest shares closed Tuesday at $24.97, down $1.07, in NASDAQ trading.<\/p>\n

Photo at top: Pedestrian passes by a First Midwest branch in downtown Chicago, Jan. 27, 2018. (Jinman Li\/MEDILL)<\/div>\n","protected":false},"excerpt":{"rendered":"

By Jinman Li Medill Reports Shares plummeted by 4.1 percent after First Midwest Bancorp Inc. (Nasdaq: FMBI), the holding company of First Midwest Bank, released fourth-quarter earnings that fell short of Wall Street expectations. The Itasca, Ill.-based company reported net income of $2.3 million, or 2 cents per diluted share, for the quarter ended Dec. […]<\/p>\n","protected":false},"author":445,"featured_media":66107,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27,3912],"tags":[],"class_list":["post-66104","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-fall-2017"],"yoast_head":"\nFirst Midwest Bancorp shares sink as fourth-quarter performance fails expectations - Medill Reports Chicago<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/news.medill.northwestern.edu\/chicago\/first-midwest-bancorp-shares-sink-as-fourth-quarter-performance-fails-expectations\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"First Midwest Bancorp shares sink as fourth-quarter performance fails expectations - Medill Reports Chicago\" \/>\n<meta property=\"og:description\" content=\"By Jinman Li Medill Reports Shares plummeted by 4.1 percent after First Midwest Bancorp Inc. 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