First Midwest Bancorp, Inc. Announces 2015 Third Quarter Results

ITASCA, IL--(Marketwired - Oct 20, 2015) - 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 third quarter of 2015. Net income for the third quarter of 2015 was $23.3 million, or $0.30 per share. This compares to $22.6 million, or $0.29 per share, for the second quarter of 2015, and $18.5 million, or $0.25 per share, for the third quarter of 2014.

SELECT HIGHLIGHTS

• Increased earnings per share to $0.30, up 20% from the third quarter of 2014 and 3% from the second quarter of 2015.
  
  
• Produced a return on average tangible common equity of 12%, up from 10% for the third quarter of 2014 and consistent with the second quarter of 2015.
  
  
• Grew fee-based revenues to $33 million, an increase of 12% from the third quarter of 2014 and 5% from the second quarter of 2015.
  
  
• Increased total loans, excluding covered loans, to nearly $7 billion, up 7% from September 30, 2014 and 5% annualized from June 30, 2015.
  
  
• Decreased non-performing assets to $71 million, down 33% from September 30, 2014 and 6% from June 30, 2015.
  
  
• Reduced net loan charge-offs to $3.1 million for the third quarter of 2015, down 81% from the third quarter of 2014 and 45% from the second quarter of 2015.
  
  

"Our performance for the quarter was once again strong, reflecting balanced execution of our business objectives," said Michael L. Scudder, President and Chief Executive Officer of First Midwest Bancorp, Inc. "Quarterly earnings per share improved to $0.30, an increase of 20% from a year ago and 3% compared to last quarter. Business performance was solid across our sales platforms, benefiting from targeted growth in our consumer and fee-based businesses as well as reduced credit costs."

Mr. Scudder concluded, "Our sales teams are fully engaged and our balance sheet is strong, providing ample liquidity and capital for growth. Concurrently, our recently announced pending acquisition of The Peoples' Bank of Arlington Heights is expected to add to our expanding suburban Chicago footprint and provide additional business opportunities. As we look ahead, our priorities remain balanced on building and broadening our client relationships as we navigate evolving market conditions and the accompanying competitive pressures. We remain well positioned to leverage the strength of our balance sheet and infrastructure to pursue opportunities for growth and return value to our shareholders."

ACQUISITION

On September 21, 2015, the Company entered into a definitive agreement to acquire Peoples Bancorp, Inc. and its wholly-owned banking subsidiary, The Peoples' Bank of Arlington Heights. As part of the acquisition, the Company will acquire two banking offices in Arlington Heights, Illinois, approximately $95 million in deposits, and $57 million in loans. The acquisition is subject to customary regulatory approvals and certain closing conditions and is expected to close before the end of 2015.

OPERATING PERFORMANCE

Net Interest Income and Margin Analysis

(Dollar amounts in thousands)

				Quarters Ended
				September 30, 2015									June 30, 2015									September 30, 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				$	820,318		$	645			0.31		$	669,556		$	516			0.31		$	476,768			$	313			0.26
Securities (1)					1,194,711			9,559			3.20			1,177,516			9,792			3.33			1,086,105				9,689			3.57
Federal Home Loan Bank ("FHLB") and Federal Reserve Bank ("FRB") stock					38,748			369			3.81			38,748			368			3.80			35,588				341			3.83
Loans (1)(2)					6,887,611			76,328			4.40			6,815,781			76,573			4.51			6,302,883				69,458			4.37
	Total interest-earning assets (1)				8,941,388			86,901			3.86			8,701,601			87,249			4.02			7,901,344				79,801			4.01
Cash and due from banks					132,504									133,180									126,279
Allowance for loan and covered loan losses					(73,928	)								(73,865	)								(77,596	)
Other assets					875,668									881,613									818,066
		Total assets		$	9,875,632								$	9,642,529								$	8,768,093
Liabilities and Stockholders' Equity:
Interest-bearing core deposits (3)				$	4,465,956			931			0.08		$	4,407,168			896			0.08		$	3,906,975				865			0.09
Time deposits					1,173,127			1,398			0.47			1,216,371			1,506			0.50			1,226,025				1,941			0.63
Borrowed funds					168,807			928			2.18			140,002			118			0.34			101,674				9			0.04
Senior and subordinated debt					201,083			3,133			6.18			200,999			3,134			6.25			191,013				3,016			6.26
	Total interest-bearing liabilities				6,008,973			6,390			0.42			5,964,540			5,654			0.38			5,425,687				5,831			0.43
Demand deposits (3)					2,601,442									2,437,742									2,208,450
	Total funding sources				8,610,415									8,402,282									7,634,137
Other liabilities					130,250									116,717									83,075
Stockholders' equity - common					1,134,967									1,123,530									1,050,881
		Total liabilities and stockholders' equity		$	9,875,632								$	9,642,529								$	8,768,093
Tax-equivalent net interest income/margin (1)								80,511			3.58						81,595			3.76							73,970			3.72
Tax-equivalent adjustment								(2,609	)								(2,693	)									(2,939	)
		Net interest income (GAAP)					$	77,902								$	78,902									$	71,031

(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 portfolio section for further average balance detail by category.

For the third quarter of 2015, total average interest-earning assets rose $239.8 million from the second quarter of 2015 driven by loan growth and an increase in lower yielding other interest-earning assets. Total average funding sources increased $208.1 million from the second quarter of 2015 as a result of seasonally higher levels of interest-bearing core deposits and demand deposits.

Compared to the third quarter of 2014, the $1.0 billion increase in total average interest-earning assets and the $976.3 million rise in total average funding sources reflect the impact of the acquisitions completed in the second half of 2014 and organic loan growth over the course of the year.

Tax-equivalent net interest margin for the current quarter was 3.58%, decreasing 18 basis points from the second quarter of 2015 and 14 basis points from the third quarter of 2014. Compared to the second quarter of 2015, the reduction in tax-equivalent net interest margin was due primarily to a decrease in acquired loan accretion, a seasonally higher balance of other interest-earning assets, the continued shift in the loan mix to floating rate loans, and the flattening of the yield curve. Tax-equivalent net interest margin decreased compared to the third quarter of 2014 due primarily to a rise in other interest-earning assets, lower accretion on covered loans, the continued shift in the loan mix, and the flattening of the yield curve, which were partially offset by greater accretion on acquired loans related to the 2014 acquisitions.

Acquired loan accretion related to the 2014 acquisitions contributed $1.8 million and $3.6 million to net interest income for the third and second quarters of 2015, respectively. This acquired loan accretion includes accelerated accretion on purchased credit impaired ("PCI") loans of $556,000 and $1.7 million for the third and second quarters of 2015, respectively.

Fee-based Revenues and Total Noninterest Income Analysis
(Dollar amounts in thousands)
			Quarters Ended									September 30, 2015 Percent Change from
			September 30,  2015			June 30,  2015			September 30,  2014			June 30,  2015			September 30,  2014
Service charges on deposit accounts			$	10,519		$	9,886		$	9,902		6.4			6.2
Wealth management fees				7,222			7,433			6,721		(2.8	)		7.5
Card-based fees				6,868			6,953			6,646		(1.2	)		3.3
Merchant servicing fees (1)				3,207			2,938			2,932		9.2			9.4
Mortgage banking income				1,402			1,439			1,125		(2.6	)		24.6
Other service charges, commissions, and fees				3,900			2,924			2,334		33.4			67.1
	Total fee-based revenues			33,118			31,573			29,660		4.9			11.7
Other income				1,372			1,900			923		(27.8	)		48.6
Net securities gains				524			515			2,570		1.7			(79.6	)
Gains on sales of properties				--			--			3,954		--			(100.0	)
	Total noninterest income		$	35,014		$	33,988		$	37,107		3.0			(5.6	)

(1)	Merchant servicing fees are substantially offset by merchant card expense included in noninterest expense for each period presented.

Total fee-based revenues of $33.1 million grew 4.9% compared to the second quarter of 2015, primarily reflecting normal seasonality. The 11.7% increase compared to the third quarter of 2014 primarily reflects organic growth across the majority of categories. In addition, the benefit from the 2014 acquisitions contributed to the increase.

Compared to the second quarter of 2015, the increase in service charges on deposit accounts was driven by seasonally higher activity. The increase in service charges on deposit accounts compared to the third quarter of 2014 also reflects services provided to customers added in the 2014 acquisitions. Continued sales of fiduciary and investment advisory services to new and existing customers drove the rise in wealth management fees compared to the third quarter of 2014.

Mortgage banking income resulted from sales of $42.2 million of 1-4 family mortgage loans in the secondary market during the third quarter of 2015, compared to $51.9 million in the second quarter of 2015 and $31.7 million in the third quarter of 2014. Compared to both prior periods presented, gains realized on the sale of leasing equipment contracts originated by First Midwest Equipment Finance, which was formed from an acquisition in September of 2014, drove the increase in other service charges, commissions, and fees. In addition, fee income generated from sales of capital market products to commercial clients contributed to the increase compared to both prior periods presented.

Total noninterest income of $35.0 million grew 3.0% and decreased 5.6% from the second quarter of 2015 and the third quarter of 2014, respectively. Other income was elevated during the second quarter of 2015 due to greater bank-owned life insurance income. The third quarter of 2014 total noninterest income reflects the net gains from the disposition of two branch properties and net securities gains.

Noninterest Expense Analysis
(Dollar amounts in thousands)
					Quarters Ended												September 30, 2015 Percent Change from
					September 30,  2015				June 30,  2015				September 30,  2014				June 30,  2015			September 30,  2014
Salaries and employee benefits:
	Salaries and wages				$	33,554			$	33,096			$	28,152			1.4			19.2
	Retirement and other employee benefits					7,807				7,198				7,319			8.5			6.7
		Total salaries and employee benefits				41,361				40,294				35,471			2.6			16.6
Net occupancy and equipment expense						9,406				9,622				8,639			(2.2	)		8.9
Professional services						6,172				5,322				5,692			16.0			8.4
Technology and related costs						3,673				3,527				3,253			4.1			12.9
Merchant card expense (1)						2,722				2,472				2,396			10.1			13.6
Advertising and promotions						1,828				2,344				1,822			(22.0	)		0.3
Net other real estate owned ("OREO") expense						1,290				1,861				1,406			(30.7	)		(8.3	)
Cardholder expenses						1,354				1,292				1,120			4.8			20.9
Other expenses						6,559				6,717				6,766			(2.4	)		(3.1	)
Acquisition and integration related expenses						--				--				3,748			--			(100.0	)
			Total noninterest expense		$	74,365			$	73,451			$	70,313			1.2			5.8
Efficiency ratio (2)						63	%			62	%			62	%

(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, acquisition and integration related expenses of $3.7 million are excluded from the efficiency ratio for the third quarter of 2014. See the accompanying Non-GAAP Reconciliations for details on the calculation of the efficiency ratio.

Total noninterest expense increased 1.2% from the second quarter of 2015 and 5.8% from the third quarter of 2014. The increase from the second quarter of 2015 primarily reflects seasonal increases in benefits, as well as expenses associated with talent recruitment and organizational growth needs, including an independent cyber-risk assessment as a part of a targeted risk mitigation process.

The rise in total noninterest expense compared to the third quarter of 2014 was due primarily to operating costs of the 21 banking locations acquired during the second half of 2014, of which four have been closed. These costs primarily occurred within salaries and employee benefits, net occupancy and equipment expense, technology and related costs, and other expenses.

LOAN PORTFOLIO AND ASSET QUALITY
Loan Portfolio Composition
(Dollar amounts in thousands)
				As of									September 30, 2015 Percent Change from
				September 30,  2015			June 30,  2015			September 30,  2014			June 30, 2015 (1)			September 30,  2014
Commercial and industrial				$	2,392,860		$	2,366,056		$	2,208,166		4.5			8.4
Agricultural					393,732			377,410			347,511		17.3			13.3
Commercial real estate:
	Office				487,629			488,863			437,222		(1.0	)		11.5
	Retail				432,107			432,880			454,178		(0.7	)		(4.9	)
	Industrial				494,341			510,759			531,122		(12.9	)		(6.9	)
	Multi-family				539,308			557,947			559,689		(13.4	)		(3.6	)
	Construction				192,086			190,970			193,445		2.3			(0.7	)
	Other commercial real estate				869,748			871,119			871,825		(0.6	)		(0.2	)
		Total commercial real estate			3,015,219			3,052,538			3,047,481		(4.9	)		(1.1	)
		Total corporate loans			5,801,811			5,796,004			5,603,158		0.4			3.5
Home equity					647,223			599,320			517,446		32.0			25.1
1-4 family mortgages					294,261			283,562			238,172		15.1			23.5
Installment					131,185			113,382			69,428		62.8			89.0
		Total consumer loans			1,072,669			996,264			825,046		30.7			30.0
		Total loans, excluding covered loans			6,874,480			6,792,268			6,428,204		4.8			6.9
Covered loans					51,219			57,917			90,875		(46.3	)		(43.6	)
		Total loans		$	6,925,699		$	6,850,185		$	6,519,079		4.4			6.2

(1)	Ratios are presented on an annualized basis.

Total loans, excluding covered loans, of $6.9 billion grew 4.8% on an annualized basis from June 30, 2015 and 6.9% from September 30, 2014. The loan growth from September 30, 2014 related to loans obtained in the 2014 acquisition completed in the fourth quarter of 2014 and organic growth.

Compared to June 30, 2015, growth in corporate loans was concentrated within our commercial and industrial and agricultural loan categories. The increase in commercial and industrial loans primarily reflects the continued expansion into select sector-based lending areas such as healthcare, structured finance, and leasing. Agricultural loans grew due to seasonal draws on lines of credit and new relationships. The overall decline in commercial real estate loans resulted from the decision of certain customers to opportunistically sell their middle market businesses and investment real estate properties, which more than offset organic growth. The rise in consumer loans reflects the purchase of high quality, shorter-duration, floating rate home equity loans and the expansion of our web-based installment lending program.

Asset Quality
(Dollar amounts in thousands)
			As of												September 30, 2015 Percent Change from
			September 30,  2015				June 30,  2015				September 30,  2014				June 30,  2015			September 30,  2014
Asset quality, excluding covered loans and covered OREO
Non-accrual loans			$	32,308			$	45,009			$	64,528			(28.2	)		(49.9	)
90 days or more past due loans				4,559				2,744				6,062			66.1			(24.8	)
	Total non-performing loans			36,867				47,753				70,590			(22.8	)		(47.8	)
Accruing troubled debt restructurings ("TDRs")				2,771				3,067				5,449			(9.7	)		(49.1	)
OREO				31,129				24,471				29,165			27.2			6.7
	Total non-performing assets		$	70,767			$	75,291			$	105,204			(6.0	)		(32.7	)
30-89 days past due loans			$	28,629			$	28,625			$	17,321
Non-accrual loans to total loans				0.47	%			0.66	%			1.00	%
Non-performing loans to total loans				0.54	%			0.70	%			1.10	%
Non-performing assets to total loans plus OREO				1.02	%			1.10	%			1.63	%
Allowance for Credit Losses
Allowance for loan and covered loan losses			$	72,500			$	71,463			$	73,106
Reserve for unfunded commitments				1,225				1,816				1,616
	Total allowance for credit losses		$	73,725			$	73,279			$	74,722
Allowance for credit losses to total loans (1)				1.06	%			1.07	%			1.15	%
Allowance for credit losses to non-accrual loans, excluding covered loans				215.45	%			152.01	%			102.39	%

(1)	Acquired loans are recorded at fair value as of the acquisition date with no allowance for credit losses being established. Included within total loans are loans acquired during 2014 which totaled $545.9 million at September 30, 2015, $587.0 million at June 30, 2015, and $533.2 million at September 30, 2014. These loans have an allowance for loan losses of $1.2 million at September 30, 2015 and $821,000 at June 30, 2015. In addition, there was a remaining acquisition adjustment of $15.5 million at September 30, 2015, $17.5 million at June 30, 2015, and $13.6 million at September 30, 2014. This acquisition adjustment represents the difference between the contractual loan balances and the carrying value of these loans.

Asset quality continued to improve across all metrics. Total non-performing assets, excluding covered loans and covered OREO, decreased by $4.5 million, or 6.0%, from June 30, 2015 and $34.4 million, or 32.7%, from September 30, 2014.

Charge-Off Data
(Dollar amounts in thousands)
				Quarters Ended
				September 30,  2015				% of Total			June 30,  2015				% of Total			September 30,  2014				% of Total
Net loan charge-offs (1):
	Commercial and industrial			$	1,601			52.3			$	3,273			59.2			$	9,047			56.7
	Agricultural				--			--				--			--				--			--
	Office, retail, and industrial				457			14.9				1,862			33.7				2,459			15.4
	Multi-family				67			2.2				466			8.4				26			0.2
	Construction				(114	)		(3.7	)			(188	)		(3.4	)			157			1.0
	Other commercial real estate				92			3.0				(603	)		(10.9	)			1,255			7.9
	Consumer				959			31.3				432			7.8				2,998			18.8
	Covered				1			--				285			5.2				5			--
		Total net loan charge-offs		$	3,063			100.0			$	5,527			100.0			$	15,947			100.0
Net loan charge-offs to average loans, annualized:
	Quarter-to-date				0.18	%						0.33	%						1.01	%
	Year-to-date				0.33	%						0.41	%						0.67	%

(1)	Amounts represent charge-offs, net of recoveries.

Total net loan charge-offs for the third quarter of 2015 were 18 basis points of average loans, or $3.1 million, decreasing from 33 basis points for the second quarter of 2015 and 101 basis points for the third quarter of 2014.

DEPOSIT PORTFOLIO
Deposit Composition
(Dollar amounts in thousands)
				Quarters Ended (1)									September 30, 2015 Percent Change from
				September 30,  2015			June 30,  2015			September 30,  2014			June 30, 2015			September 30, 2014
Demand deposits				$	2,601,442		$	2,437,742		$	2,208,450		6.7			17.8
Savings deposits					1,471,003			1,470,441			1,231,700		--			19.4
NOW accounts					1,405,371			1,379,508			1,261,522		1.9			11.4
Money market accounts					1,589,582			1,557,219			1,413,753		2.1			12.4
	Core deposits				7,067,398			6,844,910			6,115,425		3.3			15.6
Time deposits and other					1,173,127			1,216,371			1,226,025		(3.6	)		(4.3	)
		Total deposits		$	8,240,525		$	8,061,281		$	7,341,450		2.2			12.2

(1)	Amounts presented are average balances.

Average core deposits of $7.1 billion for the third quarter of 2015 increased 3.3% and 15.6% compared to the second quarter of 2015 and the third quarter of 2014, respectively. The rise in average core deposits compared to the second quarter of 2015 resulted primarily from a seasonal increase in average municipal deposits of $221.9 million. Compared to the third quarter of 2014, the rise was due primarily to the full impact of deposits assumed in the acquisitions completed during the second half of 2014, which further strengthened the Company's core deposit base.

CAPITAL MANAGEMENT
Capital Ratios
(Dollar amounts in thousands)
		As of
		September 30, 2015		June 30, 2015		December 31, 2014		September 30, 2014
Company regulatory capital ratios: (1)
	Total capital to risk-weighted assets	11.43	%	11.37	%	11.23	%	10.94	%
	Tier 1 capital to risk-weighted assets	10.55	%	10.49	%	10.19	%	9.86	%
	Tier 1 common capital to risk-weighted assets	10.00	%	9.93	%	N/A		N/A
	Tier 1 leverage to average assets	9.29	%	9.34	%	9.03	%	8.93	%
Company tangible common equity ratios (2)(3):
	Tangible common equity to tangible assets	8.50	%	8.32	%	8.41	%	8.33	%
	Tangible common equity, excluding other comprehensive loss, to tangible assets	8.67	%	8.54	%	8.59	%	8.54	%
	Tangible common equity to risk-weighted assets	9.70	%	9.55	%	9.73	%	9.57	%

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.

The Company's capital ratios increased from June 30, 2015 and September 30, 2014 driven primarily by growth in retained earnings partially offset by an increase in assets.

The Board of Directors approved a quarterly cash dividend of $0.09 per common share during the third quarter of 2015, which is consistent with the second 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, October 21, 2015 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. 10073929 beginning one hour after completion of the live call until 9:00 A.M. (ET) on October 29, 2015. 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," or "continue" 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 The Peoples' Bank of Arlington Heights, 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. 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.

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, 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
				September 30,				June 30,				March 31,				December 31,				September 30,
				2015				2015				2015				2014				2014
Period-End Balance Sheet
Assets
Cash and due from banks				$	125,279			$	135,546			$	126,450			$	117,315			$	125,977
Interest-bearing deposits in other banks					822,264				811,287				492,607				488,947				550,606
Trading securities, at fair value					17,038				18,172				18,374				17,460				17,928
Securities available-for-sale, at fair value					1,151,418				1,142,407				1,151,603				1,187,009				997,420
Securities held-to-maturity, at amortized cost					23,723				24,292				25,861				26,555				26,776
FHLB and FRB stock					38,748				38,748				38,748				37,558				35,588
Loans, excluding covered loans:
	Commercial and industrial				2,392,860				2,366,056				2,318,058				2,253,556				2,208,166
	Agricultural				393,732				377,410				368,836				358,249				347,511
	Commercial real estate:
		Office, retail, and industrial			1,414,077				1,432,502				1,443,562				1,478,379				1,422,522
		Multi-family			539,308				557,947				560,800				564,421				559,689
		Construction			192,086				190,970				191,104				204,236				193,445
		Other commercial real estate			869,748				871,119				881,026				887,897				871,825
	Home equity				647,223				599,320				599,543				543,185				517,446
	1-4 family mortgages				294,261				283,562				285,758				291,463				238,172
	Installment				131,185				113,382				92,834				76,032				69,428
		Total loans, excluding covered loans			6,874,480				6,792,268				6,741,521				6,657,418				6,428,204
Covered loans					51,219				57,917				62,830				79,435				90,875
Allowance for loan and covered loan losses					(72,500	)			(71,463	)			(70,990	)			(72,694	)			(73,106	)
	Net loans				6,853,199				6,778,722				6,733,361				6,664,159				6,445,973
OREO, excluding covered OREO					31,129				24,471				26,042				26,898				29,165
Covered OREO					906				3,759				7,309				8,068				9,277
FDIC indemnification asset					6,106				7,335				8,540				8,452				8,699
Premises, furniture, and equipment, net					127,443				128,621				128,698				131,109				123,473
Investment in BOLI					208,666				207,814				207,190				206,498				195,270
Goodwill and other intangible assets					331,250				332,223				333,202				334,199				318,511
Accrued interest receivable and other assets					197,877				209,630				200,611				190,912				211,688
	Total assets			$	9,935,046			$	9,863,027			$	9,498,596			$	9,445,139			$	9,096,351
Liabilities and Stockholders' Equity
Noninterest-bearing deposits				$	2,671,793			$	2,508,316			$	2,339,492			$	2,301,757			$	2,295,679
Interest-bearing deposits					5,624,657				5,704,355				5,575,187				5,586,001				5,320,454
	Total deposits				8,296,450				8,212,671				7,914,679				7,887,758				7,616,133
Borrowed funds					169,943				189,036				131,200				137,994				132,877
Senior and subordinated debt					201,123				201,039				200,954				200,869				191,028
Accrued interest payable and other liabilities					119,861				135,324				135,813				117,743				106,637
Stockholders' equity					1,147,669				1,124,957				1,115,950				1,100,775				1,049,676
	Total liabilities and stockholders' equity			$	9,935,046			$	9,863,027			$	9,498,596			$	9,445,139			$	9,096,351
Stockholders' equity, excluding accumulated other comprehensive income ("AOCI")				$	1,163,487			$	1,146,189			$	1,128,755			$	1,116,630			$	1,068,528
Stockholders' equity, common					1,147,669				1,124,957				1,115,950				1,100,775				1,049,676

Condensed Consolidated Statements of Income (Unaudited) (Dollar amounts in thousands)

					Quarters Ended																Nine Months Ended
					September 30,			June 30,			March 31,			December 31,				September 30,			September 30,			September 30,
					2015			2015			2015			2014				2014			2015			2014
Income Statement
Interest income					$	84,292		$	84,556		$	82,469		$	81,309			$	76,862		$	251,317		$	218,555
Interest expense						6,390			5,654			5,687			5,490				5,831			17,731			17,522
	Net interest income					77,902			78,902			76,782			75,819				71,031			233,586			201,033
Provision for loan and covered loan losses						4,100			6,000			6,552			1,659				10,727			16,652			17,509
			Net interest income after provision for loan and covered loan losses			73,802			72,902			70,230			74,160				60,304			216,934			183,524
Noninterest Income
		Service charges on deposit accounts				10,519			9,886			9,271			10,015				9,902			29,676			26,895
		Wealth management fees				7,222			7,433			7,014			6,744				6,721			21,669			19,730
		Card-based fees				6,868			6,953			6,402			6,390				6,646			20,223			17,950
		Merchant servicing fees				3,207			2,938			2,665			2,703				2,932			8,810			8,557
		Mortgage banking income				1,402			1,439			1,123			812				1,125			3,964			3,199
		Other service charges, commissions, and fees				3,900			2,924			2,166			2,700				2,334			8,990			5,386
			Total fee-based revenues			33,118			31,573			28,641			29,364				29,660			93,332			81,717
		Other income				1,372			1,900			1,948			1,767				923			5,220			3,778
		Net securities gains (losses)				524			515			512			(63	)			2,570			1,551			8,160
		Gains on sales of properties				--			--			--			--				3,954			--			3,954
		Loss on early extinguishment of debt				--			--			--			--				--			--			(2,059	)
			Total noninterest income			35,014			33,988			31,101			31,068				37,107			100,103			95,550
Noninterest Expense
	Salaries and employee benefits:
		Salaries and wages				33,554			33,096			32,794			32,640				28,152			99,444			83,938
		Retirement and other employee benefits				7,807			7,198			7,922			7,660				7,319			22,927			19,585
			Total salaries and employee benefits			41,361			40,294			40,716			40,300				35,471			122,371			103,523
		Net occupancy and equipment expense				9,406			9,622			10,436			9,479				8,639			29,464			25,702
		Professional services				6,172			5,322			5,109			6,664				5,692			16,603			16,772
		Technology and related costs				3,673			3,527			3,687			3,444				3,253			10,887			9,431
		Merchant card expense				2,722			2,472			2,197			2,203				2,396			7,391			6,992
		Advertising and promotions				1,828			2,344			1,223			2,418				1,822			5,395			5,741
		Net OREO expense				1,290			1,861			1,204			2,544				1,406			4,355			4,531
		Cardholder expenses				1,354			1,292			1,268			1,036				1,120			3,914			3,215
		Other expenses				6,559			6,717			6,817			7,446				6,766			20,093			18,513
		Acquisition and integration related expense				--			--			--			9,294				3,748			--			4,578
			Total noninterest expense			74,365			73,451			72,657			84,828				70,313			220,473			198,998
		Income before income tax expense				34,451			33,439			28,674			20,400				27,098			96,564			80,076
		Income tax expense				11,167			10,865			8,792			5,807				8,549			30,824			25,363
			Net income		$	23,284		$	22,574		$	19,882		$	14,593			$	18,549		$	65,740		$	54,713
	Net income applicable to common shares				$	23,058		$	22,325		$	19,654		$	14,454			$	18,307		$	65,037		$	54,016
	Net income applicable to common shares, excluding acquisition and integration related expenses				$	23,058		$	22,325		$	19,654		$	20,030			$	20,556		$	65,037		$	49,438

Selected Financial Information (Unaudited) (Amounts in thousands, except per share data)

		As of or for the
		Quarters Ended																				Nine Months Ended
		September 30,				June 30,				March 31,				December 31,				September 30,				September 30,				September 30,
		2015				2015				2015				2014				2014				2015				2014
Earnings Per Share
Basic earnings per common share ("EPS")		$	0.30			$	0.29			$	0.26			$	0.19			$	0.25			$	0.84			$	0.73
Diluted EPS		$	0.30			$	0.29			$	0.26			$	0.19			$	0.25			$	0.84			$	0.73
Diluted EPS, excluding acquisition and integration related expenses		$	0.30			$	0.29			$	0.26			$	0.27			$	0.28			$	0.84			$	0.76
Common Stock and Related Per Common Share Data
Book value		$	14.72			$	14.43			$	14.31			$	14.17			$	13.94			$	14.72			$	13.94
Tangible book value			10.47				10.17				10.04				9.87				9.71				10.47				9.71
Dividends declared per share			0.09				0.09				0.09				0.08				0.08				0.27				0.23
Closing price at period end			17.54				18.97				17.37				17.11				16.09				17.54				16.09
Closing price to book value			1.2				1.3				1.2				1.2				1.2				1.2				1.2
Period end shares outstanding			77,942				77,961				77,957				77,695				75,295				77,942				75,295
Period end treasury shares			10,286				10,267				10,271				10,533				10,492				10,286				10,492
Common dividends		$	7,014			$	7,022			$	7,011			$	6,206			$	6,027			$	21,047			$	17,324
Key Ratios/Data
Return on average common equity (1)			8.06	%			7.97	%			7.15	%			5.35	%			6.91	%			7.73	%			6.99	%
Return on average tangible common equity (1)			11.68	%			11.62	%			10.52	%			7.89	%			9.73	%			11.28	%			9.80	%
Return on average tangible common equity, excluding acquisition and integration related expenses (1)			11.68	%			11.62	%			10.52	%			10.83	%			10.90	%			11.28	%			10.29	%
Return on average assets (1)			0.94	%			0.94	%			0.85	%			0.63	%			0.84	%			0.91	%			0.86	%
Efficiency ratio			63.20	%			61.70	%			64.46	%			66.09	%			62.02	%			63.10	%			64.00	%
Net interest margin (2)			3.58	%			3.76	%			3.79	%			3.76	%			3.72	%			3.70	%			3.66	%
Loans-to-deposits			83.48	%			83.41	%			85.97	%			85.41	%			85.60	%			83.48	%			85.60	%
Yield on average interest-earning assets (2)			3.86	%			4.02	%			4.06	%			4.02	%			4.01	%			3.98	%			3.97	%
Cost of funds			0.42	%			0.38	%			0.39	%			0.38	%			0.43	%			0.40	%			0.44	%
Net noninterest expense to average assets			1.60	%			1.66	%			1.80	%			2.31	%			1.80	%			1.69	%			1.79	%
Effective income tax rate			32.41	%			32.50	%			30.66	%			28.47	%			31.55	%			31.92	%			31.67	%
Capital Ratios
Total capital to risk-weighted assets			11.43	%			11.37	%			11.23	%			11.23	%			10.94	%			11.43	%			10.94	%
Tier 1 capital to risk-weighted assets			10.55	%			10.49	%			10.35	%			10.19	%			9.86	%			10.55	%			9.86	%
Tier 1 common capital to risk- weighted assets (CET1) (3)			10.00	%			9.93	%			9.79	%			N/A				N/A				10.00	%			N/A
Tier 1 leverage to average assets			9.29	%			9.34	%			9.32	%			9.03	%			8.93	%			9.29	%			8.93	%
Tangible common equity to tangible assets			8.50	%			8.32	%			8.54	%			8.41	%			8.33	%			8.50	%			8.33	%
Tangible common equity, excluding AOCI, to tangible assets			8.67	%			8.54	%			8.68	%			8.59	%			8.54	%			8.67	%			8.54	%
Tangible common equity to risk- weighted assets			9.70	%			9.55	%			9.51	%			9.73	%			9.57	%			9.70	%			9.57	%

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																			Nine Months Ended
				September 30,				June 30,				March 31,				December 31,				September 30,			September 30,				September 30,
				2015				2015				2015				2014				2014			2015				2014
Asset Quality Performance Data
Non-performing assets(4)
Commercial and industrial				$	6,438			$	11,100			$	12,913			$	22,693			$	19,696		$	6,438			$	19,696
Agricultural					112				317				358				360				361			112				361
Commercial real estate:
	Office, retail, and industrial				6,961				12,599				11,363				12,939				16,963			6,961				16,963
	Multi-family				1,046				1,287				700				754				1,536			1,046				1,536
	Construction				3,332				4,940				7,488				6,981				7,082			3,332				7,082
	Other commercial real estate				5,898				5,513				5,915				6,970				7,912			5,898				7,912
Consumer					8,521				9,253				9,340				9,274				10,978			8,521				10,978
	Total non-accrual loans				32,308				45,009				48,077				59,971				64,528			32,308				64,528
90 days or more past due loans					4,559				2,744				3,564				1,173				6,062			4,559				6,062
	Total non-performing loans				36,867				47,753				51,641				61,144				70,590			36,867				70,590
Accruing troubled debt restructurings					2,771				3,067				3,581				3,704				5,449			2,771				5,449
Other real estate owned					31,129				24,471				26,042				26,898				29,165			31,129				29,165
	Total non-performing assets			$	70,767			$	75,291			$	81,264			$	91,746			$	105,204		$	70,767			$	105,204
30-89 days past due loans (4)				$	28,629			$	28,625			$	18,631			$	20,073			$	17,321		$	28,629			$	17,321
Allowance for credit losses
Allowance for loan losses				$	68,384			$	66,602			$	65,311			$	65,468			$	64,457		$	68,384			$	64,457
Allowance for covered loan losses					4,116				4,861				5,679				7,226				8,649			4,116				8,649
Reserve for unfunded commitments					1,225				1,816				1,816				1,816				1,616			1,225				1,616
Total allowance for credit losses				$	73,725			$	73,279			$	72,806			$	74,510			$	74,722		$	73,725			$	74,722
Provision for loan and covered loan losses				$	4,100			$	6,000			$	6,552			$	1,659			$	10,727		$	16,652			$	17,509
Net charge-offs by category
Commercial and industrial				$	1,601			$	3,273			$	6,657			$	1,217			$	9,047		$	11,531			$	12,254
Agricultural					--				--				--				--				--			--				153
Commercial real estate:
	Office, retail, and industrial				457				1,862				(166	)			143				2,459			2,153				6,705
	Multi-family				67				466				24				476				26			557				380
	Construction				(114	)			(188	)			(17	)			(6	)			157			(319	)			892
	Other commercial real estate				92				(603	)			1,051				(247	)			1,255			540				3,354
Consumer					959				432				479				342				2,998			1,870				6,503
	Net charge-offs, excluding covered loans				3,062				5,242				8,028				1,925				15,942			16,332				30,241
Charge-offs on covered loans					1				285				228				146				5			514				(333	)
		Total net charge-offs		$	3,063			$	5,527			$	8,256			$	2,071			$	15,947		$	16,846			$	29,908
Total recoveries included above				$	1,294			$	2,579			$	1,797			$	2,669			$	1,159		$	5,670			$	5,536

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															Nine Months Ended
		September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
		2015			2015			2015			2014			2014			2015			2014
Asset Quality ratios(4)
Non-accrual loans to total loans		0.47	%		0.66	%		0.71	%		0.90	%		1.00	%		0.47	%		1.00	%
Non-performing loans to total loans		0.54	%		0.70	%		0.77	%		0.92	%		1.10	%		0.54	%		1.10	%
Non-performing assets to total loans plus OREO		1.02	%		1.10	%		1.20	%		1.37	%		1.63	%		1.02	%		1.63	%
Non-performing assets to tangible common equity plus allowance for credit losses		7.99	%		8.74	%		9.56	%		11.00	%		13.20	%		7.99	%		13.20	%
Non-accrual loans to total assets		0.33	%		0.46	%		0.51	%		0.64	%		0.72	%		0.33	%		0.72	%
Allowance for credit losses and net charge-off ratios
Allowance for credit losses to total loans (5)		1.06	%		1.07	%		1.07	%		1.11	%		1.15	%		1.06	%		1.15	%
Allowance for credit losses to non-accrual loans (4)		215.45	%		152.01	%		139.62	%		112.19	%		102.39	%		215.45	%		102.39	%
Allowance for credit losses to non-performing loans (4)		188.81	%		143.27	%		129.99	%		110.04	%		93.60	%		188.81	%		93.60	%
Net charge-offs to average loans (1)		0.18	%		0.33	%		0.50	%		0.13	%		1.01	%		0.33	%		0.67	%

 

Footnotes to Selected Financial Information
(1)	Annualized based on the actual number of days for each period presented.
(2)	Tax equivalent basis reflects federal and state tax benefits.
(3)	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.
(4)	Excludes covered loans and covered OREO.
(5)	Acquired loans are recorded at fair value as of the acquisition date with no allowance for credit losses being established. Included within total loans are loans acquired during 2014 which totaled $545.9 million at September 30, 2015, $587.0 million at June 30, 2015, $660.9 million at March 31, 2015, $718.3 million at December 31, 2014, and $533.2 million at September 30, 2014. These loans have an allowance for loan losses of $1.2 million at September 30, 2015 and $821,000 at June 30, 2015. In addition, there was a remaining acquisition adjustment of $15.5 million at September 30, 2015, $17.5 million at June 30, 2015, $22.4 million at March 31, 2015, $24.7 million at December 31, 2014, and $13.6 million at September 30, 2014. This acquisition adjustment represents the difference between the contractual loan balances and the carrying value of these loans.

Non-GAAP Reconciliations (Unaudited) (Amounts in thousands, except per share data)

				Quarters Ended																				Nine Months Ended
				September 30,				June 30,				March 31,				December 31,				September 30,				September 30,				September 30,
				2015				2015				2015				2014				2014				2015				2014
Earnings Per Share
Net income				$	23,284			$	22,574			$	19,882			$	14,593			$	18,549			$	65,740			$	54,713
Net income applicable to non- vested restricted shares					(226	)			(249	)			(228	)			(139	)			(242	)			(703	)			(697	)
	Net income applicable to common shares				23,058				22,325				19,654				14,454				18,307				65,037				54,016
Tax-equivalent acquisition and integration related expenses					--				--				--				5,576				2,249				--				2,747
	Net income applicable to common shares, excluding acquisition and integration related expenses			$	23,058			$	22,325			$	19,654			$	20,030			$	20,556			$	65,037			$	56,763
Weighted-average common shares outstanding:
	Weighted-average common shares outstanding (basic)				77,106				77,089				76,918				75,119				74,341				77,038				74,270
	Dilutive effect of common stock equivalents				13				12				12				12				11				13				12
		Weighted-average diluted common shares outstanding			77,119				77,101				76,930				75,131				74,352				77,051				74,282
Basic EPS				$	0.30			$	0.29			$	0.26			$	0.19			$	0.25			$	0.84			$	0.73
Diluted EPS				$	0.30			$	0.29			$	0.26			$	0.19			$	0.25			$	0.84			$	0.73
Diluted EPS, excluding acquisition and integration related expenses				$	0.30			$	0.29			$	0.26			$	0.27			$	0.28			$	0.84			$	0.76
Anti-dilutive shares not included in the computation of diluted EPS					751				768				948				1,146				1,155				822				1,215
Efficiency Ratio Calculation
Noninterest expense				$	74,365			$	73,451			$	72,657			$	84,828			$	70,313			$	220,473			$	198,998
Less:
	Net OREO expense				(1,290	)			(1,861	)			(1,204	)			(2,544	)			(1,406	)			(4,355	)			(4,531	)
	Acquisition and integration related expenses				--				--				--				(9,294	)			(3,748	)			--				(4,578	)
		Total		$	73,075			$	71,590			$	71,453			$	72,990			$	65,159			$	216,118			$	189,889
Tax-equivalent net interest income (1)				$	80,511			$	81,595			$	79,665			$	78,742			$	73,970			$	241,771			$	209,847
Fee-based revenues					33,118				31,573				28,641				29,364				29,660				93,332				81,717
Add:
	Other income, excluding BOLI income				446				446				1,065				924				156				1,957				1,748
	Tax-adjusted BOLI (BOLI/.6)				1,543				2,423				1,472				1,405				1,278				5,438				3,383
		Total		$	115,618			$	116,037			$	110,843			$	110,435			$	105,064			$	342,498			$	296,695
Efficiency ratio					63.20	%			61.70	%			64.46	%			66.09	%			62.02	%			63.10	%			64.00	%
Tax Equivalent Net Interest Income
Net interest income				$	77,902			$	78,902			$	76,782			$	75,819			$	71,031			$	233,586			$	201,033
Tax-equivalent adjustment					2,609				2,693				2,883				2,923				2,939				8,185				8,814
	Tax-equivalent net interest income (1)			$	80,511			$	81,595			$	79,665			$	78,742			$	73,970			$	241,771			$	209,847

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																				Nine Months Ended
			September 30,				June 30,				March 31,				December 31,				September 30,				September 30,				September 30,
			2015				2015				2015				2014				2014				2015				2014
Risk-Based Capital Data
Common stock			$	882			$	882			$	882			$	882			$	858			$	882			$	858
Additional paid-in capital				445,037				443,558				441,689				449,798				408,789				445,037				408,789
Retained earnings				944,209				927,939				912,387				899,516				891,129				944,209				891,129
Treasury stock, at cost				(226,641	)			(226,190	)			(226,203	)			(233,566	)			(232,248	)			(226,641	)			(232,248	)
Goodwill and other intangible assets				(318,854	)			(319,243	)			(319,635	)			(334,199	)			(318,511	)			(318,854	)			(318,511	)
Disallowed deferred tax assets (CET1) (2)				(2,889	)			(3,046	)			(3,354	)			(30,638	)			(33,473	)			(2,889	)			(33,473	)
	Common equity Tier 1 capital			841,744				823,900				805,766				751,793				716,544				841,744				716,544
Trust preferred securities				50,690				50,690				50,690				50,690				36,690				50,690				36,690
Disallowed deferred tax assets (other) (2)				(4,334	)			(4,568	)			(5,030	)			N/A				N/A				(4,334	)			N/A
	Tier 1 capital			888,100				870,022				851,426				802,483				753,234				888,100				753,234
Tier 2 capital				73,725				73,279				72,806				82,209				82,421				73,725				82,421
	Total capital		$	961,825			$	943,301			$	924,232			$	884,692			$	835,655			$	961,825			$	835,655
Risk-weighted assets			$	8,414,729			$	8,296,679			$	8,229,627			$	7,876,754			$	7,640,487			$	8,414,729			$	7,640,487
Adjusted average assets			$	9,559,796			$	9,318,347			$	9,134,320			$	8,884,045			$	8,433,363			$	9,559,796			$	8,433,363
Total capital to risk-weighted assets				11.43	%			11.37	%			11.23	%			11.23	%			10.94	%			11.43	%			10.94	%
Tier 1 capital to risk-weighted assets				10.55	%			10.49	%			10.35	%			10.19	%			9.86	%			10.55	%			9.86	%
Tier 1 common capital to risk- weighted assets (CET1)				10.00	%			9.93	%			9.79	%			N/A				N/A				10.00	%			N/A
Tier 1 leverage to average assets				9.29	%			9.34	%			9.32	%			9.03	%			8.93	%			9.29	%			8.93	%
Tangible Common Equity
Stockholders' equity			$	1,147,669			$	1,124,957			$	1,115,950			$	1,100,775			$	1,049,676			$	1,147,669			$	1,049,676
Less: goodwill and other intangible assets				(331,250	)			(332,223	)			(333,202	)			(334,199	)			(318,511	)			(331,250	)			(318,511	)
	Tangible common equity			816,419				792,734				782,748				766,576				731,165				816,419				731,165
Less: AOCI				15,818				21,232				12,805				15,855				18,852				15,818				18,852
	Tangible common equity, excluding AOCI		$	832,237			$	813,966			$	795,553			$	782,431			$	750,017			$	832,237			$	750,017
Total assets			$	9,935,046			$	9,863,027			$	9,498,596			$	9,445,139			$	9,096,351			$	9,935,046			$	9,096,351
Less: goodwill and other intangible assets				(331,250	)			(332,223	)			(333,202	)			(334,199	)			(318,511	)			(331,250	)			(318,511	)
	Tangible assets		$	9,603,796			$	9,530,804			$	9,165,394			$	9,110,940			$	8,777,840			$	9,603,796			$	8,777,840
Tangible common equity to tangible assets				8.50	%			8.32	%			8.54	%			8.41	%			8.33	%			8.50	%			8.33	%
Tangible common equity, excluding AOCI, to tangible assets				8.67	%			8.54	%			8.68	%			8.59	%			8.54	%			8.67	%			8.54	%
Tangible common equity to risk- weighted assets				9.70	%			9.55	%			9.51	%			9.73	%			9.57	%			9.70	%			9.57	%

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																				Nine Months Ended
			September 30,				June 30,				March 31,				December 31,				September 30,				September 30,				September 30,
			2015				2015				2015				2014				2014				2015				2014
Return on Average Common and Tangible Common Equity
Net income applicable to common shares			$	23,058			$	22,325			$	19,654			$	14,454			$	18,307			$	65,037			$	54,016
Intangibles amortization				973				978				998				842				643				2,949				2,047
Tax-equivalent adjustment of intangibles amortization				(389	)			(391	)			(399	)			(337	)			(257	)			(1,180	)			(819	)
	Net income applicable to common shares, excluding intangibles amortization			23,642				22,912				20,253				14,959				18,693				66,806				55,244
Acquisition and integration related expenses				--				--				--				9,294				3,748				--				4,578
Tax-equivalent adjustment of acquisition and integration related expenses				--				--				--				(3,718	)			(1,499	)			--				(1,831	)
	Net income applicable to common shares, excluding intangibles amortization and acquisition and integration related expenses		$	23,642			$	22,912			$	20,253			$	20,535			$	20,942			$	66,806			$	57,991
Average stockholders' equity			$	1,134,967			$	1,123,530			$	1,114,762			$	1,072,682			$	1,050,881			$	1,124,493			$	1,033,754
Less: average intangible assets				(331,720	)			(332,694	)			(333,684	)			(320,533	)			(288,975	)			(332,692	)			(280,115	)
	Average tangible common equity		$	803,247			$	790,836			$	781,078			$	752,149			$	761,906			$	791,801			$	753,639
Return on average common equity (3)				8.06	%			7.97	%			7.15	%			5.35	%			6.91	%			7.73	%			6.99	%
Return on average tangible common equity (3)				11.68	%			11.62	%			10.52	%			7.89	%			9.73	%			11.28	%			9.80	%
Return on average tangible common equity, excluding acquisition and integration related expenses (3)				11.68	%			11.62	%			10.52	%			10.83	%			10.90	%			11.28	%			10.29	%

Footnotes to Non-GAAP Reconciliations
(1)	Tax equivalent basis reflects federal and state tax benefits.
(2)	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.
(3)	Annualized based on the actual number of days for each period presented.