Wall Street Transcript Interview with Michael L. Scudder, President and CEO of First Midwest Bancorp, Inc. (FMBI)

Wall Street Transcript

67 WALL STREET, New York - February 5, 2013 - The Wall Street Transcript has just published its Southeast & Midwestern Banks Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Heightened M&A Activity - Consolidation in Regional Banking - Growth in U.S. Midwest - Regulatory Obstacles and Fee Income Replacement - Rise of Commercial and Industrial Lending

Companies include: First Midwest Bancorp Inc. (FMBI) and many others.

In the following excerpt from the Southeast & Midwestern Banks Report, the President and CEO of First Midwest Bancorp, Inc. (FMBI) discusses the outlook for his regional bank and the industry.

TWST: You announced Q4 earnings, showed a disposal of about $172 million in problem loans and a pretax earnings of $28 million. Would you share with us some of your other highlights and give us your opinion on how 2013 is shaping up? Do you believe that the worst is now over in that part of the country?

Mr. Scudder: Let's take those questions in sequence. Let me give you some highlights in terms of the performance that we had for the quarter. We posted earnings of $0.18 per share for the fourth quarter, that's up from $0.05 the like quarter a year ago, and improved from the credit-driven loss posted during the third quarter.

Our third quarter saw the accelerated remediation of some $170 million of both nonperforming and performing but potential problem credits. Our decisions here were designed to greatly improve to our credit risk profile and stabilize a very strong core earnings stream. In the fourth quarter, we saw continued credit improvement. Overall nonperforming loans decreased, dropping 17% on a linked-quarter basis, as well as significantly lower credit costs.

Other highlights for the quarter included a number of positive strategic business trends, which were partially masked by the closeout of certain credit actions. Over 2012, we have worked hard to both grow and diversify the mix of our loan portfolio as well as our revenue streams. We have done that through investment in our legacy platforms as well as investment in additional niche businesses.

Benefits of these investments helped drive full year loan growth of 2%, with organic growth at roughly 7%, offset by movement of problem and potential problem assets. Our organic growth rate was very solid given the competitive environment and the market environment generally. At the same time, we continued to grow our fee-based revenues, with fees up 10% on a linked-quarter basis, 12% from a year ago...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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