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First Midwest Bancorp Inc. (NASDAQ:FMBI)

Q4 2007 Earnings Call

January 23, 2008 10:00 am ET

Executives

John O'Meara - Chairman and CEO

Paul Clemens - EVP and CFO

Mike Scudder - President and COO; First Midwest Bancorp

Tom Schwartz, President and COO; First Midwest Bank

Analysts

Erika Penala - Merrill Lynch

Terry McEvoy - Oppenheimer

Andrea Jao - Lehman Brothers

Ben Crabtree - Stifel Nicolaus

Brad Milsaps - Sandler O'Neill

Kenneth James - Robert W. Baird

David Konrad - K.B.W

Brad Vander Ploeg - Raymond James

Operator

Good morning ladies and gentlemen and welcome to the First Midwest Bancorp Inc., 2007 fourth quarter Earnings Call. At this time I would like to inform you that this conference is being recorded and that all participants are in a listen-only mode. At the request of the Company, we will open up the conference for questions-and-answers after the presentation.

It is now my pleasure to turn the floor over to your host, Paul Clemens. Sir, you may begin.

Paul Clemens

Good morning everyone, and thank you for joining us this morning. Earlier today, First Midwest announced its results for the fourth quarter of 2007. If you haven't already received a copy of the press release, you may obtain it on our website or by calling our office at 630-875-7463.

At this time I would like add the customary reminder that our comments today may contain forward-looking statements which are based on management's existing expectations and the current economic environment. These statements are not a guarantee of future performance and actual results may differ materially from those described or implied in the forward-looking statements.

Forward-looking statements are inherently subject to risks and uncertainties including, but not limited to, future operating results, market penetration and the financial condition of the Company. Please refer to our SEC filings for a full discussion of the Company's risk factors. We will not be updating any forward-looking statements to reflect facts or circumstances after this call.

Here this morning to discuss First Midwest's fourth quarter results and outlook are John O'Meara, Chairman and Chief Executive Officer; Mike Scudder, President and Chief Operating Officer of First Midwest Bancorp; Tom Schwartz, President and Chief Operating Officer of First Midwest Bank; and myself, Paul Clemens, Chief Financial Officer.

I will now turn the call over to John.

John O'Meara

Thank you, Paul, and good morning everybody, and thank you for your continuing interest in our company. The headline reads, First Midwest Bancorp announces fourth quarter loss of $0.11 per share, net of a non-cash impairment charge of $0.67.

Not ignoring the elephant in the corner of the room, why don't we start with the impairment charge? Even though we talked about that in the release here, we made that a subject of an 8-K release yesterday. I think it's appropriate that we perhaps visit there before we go into the discussion of the remainder of the quarter and our outlook for the year ahead.

As of December 31, 2007, the broker's indications of value of our $60 million par value portfolio of collateralized debt obligations approximated $10 million. This $50 million had depreciated $20 million from the end of the previous quarter and at the end of September, that portfolio had depreciated approximately $25 million from the end of June this year. Of course, our attention to this precipitous drop increased throughout this period of time, both in the individual securities involved in the accounting treatments that are required to account for the (inaudible).

This portfolio of $60 million is comprised of six discrete issues, four which have an average subprime exposure of 43%. I know many of you were puzzled by our previous representation of $17 million worth of exposure to this portfolio. This is represented by 43% of the principal amount of the securities that had subprime exposure of any type.

Each of the five of the six securities held today investment grade ratings. Each has paid in accordance with its underlying bond indenture and indeed are current, as we speak on both principal and interest through December 31, 2007. Nonetheless, as a result of the $10 million indicated value as of the end of the year, all six of these securities were deemed to be, other than temporarily impaired under U.S. generally accepted accounting principles. That's what precipitates non-cash, non-operating charge of $50 million or $0.67 per share.

Another frequently asked question is what a way from this? There is another $90 million portfolio of similar, although differently collateralized securities in our portfolio, which are not deemed to be anything other than temporarily impaired. These are primarily secured by trust preferred securities of smaller banks. Again, they are all investment grade. They are all current on principal and interest and carry approximately 15% depreciation from their par value, as we speak. We, of course, will accept your questions regarding debt activity at the conclusion of the call.

Now, what I would like to point your attention to is our fundamental performance away from this non-cash, non-recurring activity. We did enjoy improved loan growth throughout the end of the fourth quarter. Our credit costs came in below a record breaking 2007 level, fee income was strong and growing, and we positioned ourselves from a staff realignment standpoint to take advantage of the opportunities that are available in the Chicago market.

Indeed, exclusive of the impairment charge, earnings per share performance for the current quarter amounted to $0.56 per share, as compared to $0.55 per share last quarter. Linked quarter performance was negatively impacted by certain charges associated with realignment of the staff. This amounted to about a penny per share and the change in interest rates announced by the Fed, not the most recent one, but the one preceding that cost our margins approximately 10%, as our book of rate sensitive assets pretty much immediately caused re-prices. It takes that liability pool approximately two to three months to catch up with that.

Performance for the fourth quarter evidences are response to the industry wide challenges present in the marketplace, which include challenging credit markets and continued pressure on loan yields and deposit pricing. Expansions in loan totals remain in trend, but costs remain controlled and lower than in 2006. Fee income grew 8.6% compared to the prior year, primarily due to the stronger service charges and trust collections. Rationalization of our staffing level should improve our competitiveness, indeed we expect that will be the case, as we move into 2008.

Our priorities remain focused on the long-term, and are continuing to execute our needs by our selling approach, protecting our capital, maintaining our liquidity and taking those actions necessary to generate sustainable earnings and growth.

With that, I'd like to turn it over to Paul Clemens to go into some of the detail of the fourth quarter of '07.

Paul Clemens

Thank you, John. I’d like to cover certain key items from the earnings release and then turn it over to our host for the Q&A session. We are encouraged to see that our loans outstanding increased for the second consecutive quarter. Loans outstanding increased $32 million in the fourth quarter and $54 million for the six month period.

On the deposit side, our average quarterly core deposit balance has declined $51.1 million in the fourth quarter. This reflects a large part substantially in the normal seasonal decline in our public fund deposits, such as in the municipalities and distributed tax proceeds. On the plus side, average annual core deposits increased $72 million from 2006, primarily due to growth in our savings deposit.

Net interest margin for the fourth quarter stood at 3.53%, compared to 3.63% for the third quarter. As John mentioned, the reductions in the Federal Reserves target discount rate in September, October and December, along with the client public funds, primarily account for this margin decline.

As John mentioned again, we are asset-sensitive, whenever the Federal Reserve drops its rates approximately 0.5 billion or 2.5 billion of our loans are re-priced immediately. We believe we can reduce our funding costs fairly quickly to offset most of the time in yield. For instance, yesterday we reduced our rates on approximately $850 million of transaction deposits, and $600 million of wholesale borrowings by 75 basis points each. We have another $1.4 billion in retail series and other borrowings that will be re-priced within four months. We hope to put in additional assets to make up many different costs of the timing of the yield, and rate changes over time.

Depending upon the timing and amount of any further Fed Reserve rate changes, among other factors, we expect a margin decline over the first six months of 2008 and to recover in the latter half. The company continued to show consistent credit quality, which we believe distinguishes us from many of our peers.

Charge-offs, as John mentioned, were a record 13 basis points of loans for the fourth quarter and 16 basis points for 2007. Increases in our 90 Day Past Due Credits [workers'] were concentrated in a small number of well secured deals. Many other financial institutions have recently reported significant increases in their reserves due to claim, losses, credit card, indirect auto, and mortgage portfolio.

First Midwest does not maintain a credit card portfolio. We exited the indirect auto line of business several years ago and have a very small portfolio of about $19 million remaining to runoff, and likewise the company maintained a very small mortgage portfolio. We continue to believe our reserve for loan losses, which is currently 1.25% of outstanding loans is sufficient. This reserve covers our nonperforming loans more than three times.

We continue to see consistent operating efficiency year-over-year. Fee-based revenues increased 12%, while non-interest expense increased only 3%. As John mentioned in his remarks, the company reduced its staffing levels, beginning December, primarily by consolidating certain support carriers. These changes are designed to help the company hold down costs without sacrificing the service in this extremely competitive environment. The company recorded severance costs of $621,000 related to this workforce adjustment.

In addition, as the member of the Visa Inc. organization, the company recognized a $299,000 expense in the fourth quarter for its proportionate share of litigation claims against Visa Inc. The company increased the value of certain state deferred tax assets in fourth quarter of 2007 by $1.4 million net of tax. These deferred tax assets represent certain expenses incurred for book purposes currently deductible on the tax return for future periods. Rises in state tax legislation will be apportioned more of these expenses to Illinois for tax purposes. The increase in asset value reflects the company's updated estimate of the benefit of portion more expenses to Illinois.

And finally, our capital. As to our key capital ratios, including the impairment charge, the company's capital position continues to exceed all of the regulatory minimum levels to be considered a well-capitalized institution by the Federal Reserve. Our intangible capital ratio of 5.6% is unchanged from December 31st, 2006 and compares to 5.8% at September 30th, 2007.

With that, I will turn the call over to our conference call host to open the question-and-answer session.

Question-and-Answer Session

Operator

Thank you sir. (Operator Instructions). And your first question comes from the line of Erika Penala from Merrill Lynch. Please proceed.

Erika Penala - Merrill Lynch

Good morning.

Paul Clemens

Good morning.

John O'Meara

Good morning.

Erika Penala - Merrill Lynch

I was wondering if you could share with us the economic outlook upon which you based your 2008 budget, both from a national standpoint and from a local standpoint.

John O'Meara

Primarily, the driver there is the interest rate we forecasted. The initial budget was predicated upon a total of two decreases in a discount rate. But we have already modeled what took place yesterday, and we are beginning to modify our budgets based upon that. Where Paul is making reference to, basically, is contemporaneous, refiguring, and in terms of repricing of the liabilities and et cetera.

We expect that the overall circumstance in Chicagoland should be opportunistic, with a great deal of business being swapped between existing financial institutions. This is because of the competitive churns that are going on here with a lower level of activity in the home builder activity, but a decent level of activity in other lines of business.

Erika Penala - Merrill Lynch

In terms of, I guess, I was more curious about, what are you budgeting for the losses in 2008, and what are the economic circumstances surrounding that last outlook?

John O'Meara

We don't give guidance in terms of a specific number there. What we're suggesting is that we are comfortable with our reserving level. We're comfortable with our budgeting level for reserves to be added during the year and we don't expect that to be out of trend with where it has been.

Erika Penala - Merrill Lynch

Okay. And if I could ask one more question, I was surprised by the up tick in or the rise in non-accruals quarterly in the commercial -- the term CRE bucket, could you talk more about what has been going on there, and if there are any particular asset classes that drove the issues?

John O'Meara

And a little bit of the non-accrual loans that are greater than $1 million, are circumstances that we've been working with for some period of time. And there is only one of the four of those credits that we expect to see any potential negative credit costs emanating from it.

Erika Penala - Merrill Lynch

Okay. And what's the relationship side for that one credit that you are most worried about?

John O'Meara

Less than $2 million.

Erika Penala - Merrill Lynch

Thank you for the time gentlemen.

John O'Meara

Thank you.

Operator

Your next question comes from the line of Terry McEvoy from Oppenheimer. Please proceed.

Terry McEvoy - Oppenheimer

Good morning.

John O'Meara

Hi, Terry.

Terry McEvoy - Oppenheimer

The strongest loan growth last year was in the construction area, up about 12%. Could you just give us a little color on what was driving that growth, and maybe your outlook for the construction area going into '08 in terms of growth and possibly credit as well?

Tom Schwartz

Terry, this is Tom Schwartz. In terms of the construction area, the drivers were a combination of some ongoing single-family residential deals, as well as some commercial deals that we were involved in. In terms of what we think the construction world will look like in '08, single-family will be down considerably as it has been across the country.

We do see some commercial real estate activity continuing in the Chicago marketplace. We've seen strength in several of those areas. Although, recently I have read that some of our warehouses and that type of business have slowed. But I think that's a temporary phenomenon. So we expect construction to continue this year, mostly on the commercial side of the business.

Terry McEvoy - Oppenheimer

Okay. And then, just looking at some of the fee income trends, service charges up 12.5%, card revenue up over 15%, could you talk about expected growth rates in '08 versus '07? Do you think you can maintain that type of double-digit growth?

Paul Clemens

Terry, this is Paul Clemens. Well, we certainly think so. We are budgeting somewhere in the high single digits like we have in the past, and what generally happens is the fee increases generally occur in the first quarter, late in the first quarter. So we've had good growth in our trust, good growth in our merchant business and good growth in our deposit fee. So we expect that to continue.

Terry McEvoy - Oppenheimer

Just one last quick question on the severance expenses, could you talk about what areas within the banks, those cuts were coming from and do you think, we will see more severance related expenses in '08?

John O'Meara

On the preponderance of these change was our exiting the conventional mortgage business in favor of the subprime business. That was perhaps as much as 40% of the total, not the subprime business, I mean the reversal business. You have to excuse me, if I have subprime on the mind here.

Terry McEvoy - Oppenheimer

And then further expenses this year '08?

John O'Meara

Proportionately, I'd say maybe as little as 20% more. Mike, would you say that?

Mike Scudder

Yeah, 20%. Not necessarily more, but I think should be nominal, roughly about, I'd say maybe 20% less.

Terry McEvoy - Oppenheimer

Thank you.

Operator

Your next question comes from the line of Andrea Jao from Lehman Brothers. Please proceed.

Andrea Jao - Lehman Brothers

Good morning everyone.

Paul Clemens

Good morning.

John O'Meara

Good Morning, Andrea.

Andrea Jao - Lehman Brothers

As you look into 2008, do you think you can continue the same pace of share repurchases as we've seen in the fourth quarter?

Mike Scudder

Andrea, this is Mike. No

Andrea Jao - Lehman Brothers

Hi, Mike.

Mike Scudder

I don't think so. I think from a share repurchase program, as John alluded to, one of our focuses in the environment that's facing the industry of all here today is to be very cautious of what our capital levels are. So, I think you will see the trend in our share repurchase slow, at least through the first half of the year, as we try to get a read on what's going on from a market standpoint.

Andrea Jao - Lehman Brothers

Okay. And then is the $2 million in the fourth quarter a good run rate? Is there provision to assume that given it's probably reasonable to see nonperformance and it should stay at the higher fourth quarter level? Does this make sense?

John O'Meara

If that's at the high end of a range then I would admit to that.

Andrea Jao - Lehman Brothers

Okay. And last but not least, if your margin contracts in the front half of 2008 and picks up in the back half, given the beneficial yield curve, is it reasonable for me to think that the pick in the back half of '08 would be greater than the contraction in the front half?

John O'Meara

I would concur with that. Our treasury people that I spoke with as recently as yesterday were very confident, and frankly encouraged by the fact that the Fed was aggressive in January, rather than leading out the relief to the marketplace over the course of the year.

We're much more concerned about the shape of the yield curve and the fluctuation. The reality of the special charge that we took is more than anything else liquidity in the marketplace. And to the extent that the Fed's activities improved that illiquidity situation, they weren't very much in favor of that. And I think it will create opportunities throughout the banking industry.

Andrea Jao - Lehman Brothers

Perfect. Thank you so much.

Operator

Your next question comes from line of Ben Crabtree from Stifel Nicolaus. Please proceed.

Ben Crabtree - Stifel Nicolaus

Yes. Thank you. Good morning.

John O'Meara

Good morning.

Ben Crabtree - Stifel Nicolaus

Two quick questions, one of which is, I didn't get it down, your share of the visa litigation expense in the quarter?

Paul Clemens

Yes. That was $299,000.

Ben Crabtree - Stifel Nicolaus

Okay, $299,000. And I am not sure I understand the going forward implications of all these changes in the Illinois tax situation. Obviously, it has been a short term benefit, but I seem to recall that the outlook is that is going to end up being a negative in terms of a tax rate going forward. So, if you could give us any help in thinking of what the tax rate might be, say, in 2008? Is it reasonable to assume that the tax rate would be somewhat higher in 2009?

Mike Scudder

Ben, this is Mike. Paul can jump in here as well. Generally, our expectations for 2008 is that you will not see material change in our effective tax rate. As far as 2009 goes, we're still analyzing the impact of the legislation itself. So to give you a comment in terms of what the expectations would be beyond 2008…

Ben Crabtree - Stifel Nicolaus

Okay. But something in the mid 20's for 2008 is a reasonable number for us to use.

Mike Scudder

I would say, look and see approximately what 2007 was, and that should be in the ballpark.

Ben Crabtree - Stifel Nicolaus

Yes. What if 2007 is an unusual number with where is your first quarter I think, but as you ran up in the mid 20's in the first half of the year so, I will take that as the correct number. Then one further point of clarification, the comment was made that the Fed actions cost the margin 10% and I didn't -- I am not exactly sure whether that means 10% on the margin or 10% on net interest income or--?

John O'Meara

That was mainly speaking -- this is John. It was 10 basis points.

Ben Crabtree - Stifel Nicolaus

10 basis points. Okay. Thank you very much.

Operator

Your next question comes from the line of Brad Milsaps from Sandler O'Neill. Please proceed.

Brad Milsaps - Sandler O'Neill

Hi, good morning.

John O'Meara

Good morning, Brad.

Brad Milsaps - Sandler O'Neill

Hey, John, if you can talk little about your hiring plans for 2008, in the terms of additional loan products. I know you touched on it a little bit, taking advantage of opportunities in the market, maybe. What have you been able to get down thus far, and sort of what do you see as the opportunity in '08?

John O'Meara

We've been working very hard on this. After seven individuals that are maybe available in the marketplace. We are waiting for their options in the marketplace. We expect that those decisions will come down in the next probably two or three weeks. There are certain stay-bonus arrangements that expire at the end of February. So people somewhat are handcuffed until then. But the discussions are ongoing. Tom Schwartz had interviews, I have had interviews of one-off level and I am hopeful that we're going to be able to land multiple people.

Brad Milsaps - Sandler O'Neill

But it sounds like it's going to be a one-off situation picking up a half dozen, as group of half dozen here and there, and so on so forth.

John O'Meara

I wouldn't call that a one-off. Those are whole departments.

Brad Milsaps - Sandler O'Neill

Okay. And then, second question, it sounds like you've been able to pretty aggressively lower your deposit rates in light of what happened yesterday. I guess the challenge has always been in Chicago, and that's always very difficult to do. Does this time feel a little bit different? Do you think that the market is going to be -- the market will bear more aggressive cuts in deposit rates relative to other markets around the country?

John O'Meara

I don't know about that relative to other markets. But again, our treasury people as recently as yesterday said that they felt they could begin to sense some relief, particularly in the deposit market, which is where people are then competing.

If we were fortunate that the big dominant players here are national players now and they are going to be much more rational than some of the local players have been in the past with Bank of America and Chase dominating the retail market here with probably 35% of the market. Hopefully, that will call the tune.

Brad Milsaps - Sandler O'Neill

Okay. And final question, more of a housekeeping item. It looks like you re-classed some loans and different category this quarter any color there? Just wondering kind of what transpired?

John O'Meara

It was a detail that was left over from the North and Northwestern [Indiana] acquisition, strictly housekeeping.

Brad Milsaps - Sandler O'Neill

Sure. Okay. Fair enough. Thank you very much.

John O'Meara

Thank you.

Operator

(Operator Instructions). Your next question comes from the line of Kenneth James from Robert W. Baird. Please proceed.

Kenneth James - Robert W. Baird

Hi, Good Morning.

John O'Meara

Good Morning

Kenneth James - Robert W. Baird

I wanted to talk specifically about the commercial loan growth, C&I specifically. It seems that it would be where a lot of people are focusing, given the slowdown in real estate, and it seems that there would be a good opportunity in the Chicago market with the turmoil. There hasn't been a lot of momentum there in the last few quarters.

I was just wondering if you could talk about the outlook for that type of lending, specifically going forward, and whether you think we could see some improved growth there.

Tom Schwartz

Yes. This is Tom Schwartz talking. I do expect C&I growth in the coming year. We are very focused on developing that business and keeping a good balance within our loan portfolios. So there are opportunities, and we are taking advantage of some of those opportunities as we speak. And I think you'll see some good growth in C&I loans.

Kenneth James - Robert W. Baird

Okay. Are any of the lenders you are talking to are prospectively looking at purely C&I focus, as opposed to commercial real estate teams, et cetera.

Tom Schwartz

Yes

Kenneth James - Robert W. Baird

Okay. And then I had a housekeeping item or clarification on the other portion of the CDO portfolio, the bankruptcy. You talked about it being down 15% from par. I am assuming that it's strictly interest rate-related, due to wider spreads on trust preferred.

Tom Schwartz

Yes

Kenneth James - Robert W. Baird

Okay. Thank you.

Tom Schwartz

Thank you.

Operator

And your next question come from the line of David Konrad from KBW. Please proceed.

David Konrad - KBW

Good Morning

John O'Meara

Good morning.

David Konrad - KBW

A quick follow-on question regarding the margin, I guess it was down 10 basis points this past linked quarter, primarily due to the Fed new. But it seems like the Fed is getting a little bit more aggressive this quarter with the recent action, perhaps something additional here soon.

So I was wondering what should we expect when you talk about margin impression of first half of 2008? Should we expect it to be a little bit more meaningful in this quarter before we get the rebound, or what's the outlook? Can you give a little bit more color over the near term, given the Fed recent news?

John O'Meara

I think further negatively impacted by the move of yesterday, if we get the 50 basis points you are talking about next week, so that will be negatively impacting us. We make the whole, if you will, when they stop moving down. So if they do the majority of their work here in the first quarter, we expect that by the end of the year, we'll be able to make that up.

The 75 basis points, for example, that was put in the market yesterday will cost according to our very, very preliminary simulations. This will cost about $2 million or $3 million in margin. Our people are confident that by working the liability side of the balance sheet that they can make that up. But they need more stable market to be able to do that.

David Konrad - KBW

Right. Okay. Thank you.

Operator

And your next question comes from the line of Brad Vander Ploeg from Raymond James. Please proceed.

Brad Vander Ploeg - Raymond James

Thank you. Good morning.

John O'Meara

Hi, Brad.

Brad Vander Ploeg - Raymond James

Just one point just of the elaboration on the margin. I am just little bit curious. Given that you have a decent size security, which I imagine the rates are little bit more stable on, and adjustable rate loans, and then a high proportion of core deposits. I am just curious, what are the inner workings that are causing the margin pressure, given the rate cuts.

John O'Meara

I believe it's, as Paul suggested before, about half of our $5 billion loan growth re-prices on the day of announcement. And it takes us two to three months to reprice the liabilities that are supporting us. It's a timing issue.

Brad Vander Ploeg - Raymond James

Okay. Then also back to the competition issue, I am just curious if what you have seen on the [sale of] front in particular in middle market, and small business banking specifically in Chicago, and successes that you can point to in terms of prime relationships, if any at this point?

John O'Meara

In terms of the marketplace, we had initially seen a lot of the clients that we are calling on the frequency mode. So, we're now starting to see them accepting the appointments, and we are going on and talking with them. We've actually booked probably somewhere in the neighborhood of 8 or 10 deals, since the announcement were made, a total of 10 deals.

Among the people that were interviewing who happened to be employed in various places. What they are suggesting is that the change in management structure has created confusion in the decision process. Nothing unnerves the client more than asking a question and not getting an answer and that's the opportunity.

Brad Vander Ploeg - Raymond James

Right, okay. One final thing, from the 30,000 foot view, obviously a lot of your competitors are espousing fairly defensive stands for 2008, do you feel the same way as 2008 as a defensive year for you, or do you feel like you're positioned better to take advantage of some opportunities that are likely to come up?

John O'Meara

We're trying to be both. We think from a sales standpoint, there has never been bigger opportunities than what's available in the commercial area. We still need more beneficial yield curve. While we think that recent Fed activities are beneficial to us, as we move in that direction, we would very much like to see a spread between the overnight market and the investment areas, where we take a little bit more owned. The other thing that we'd love to see priced into the marketplace, it isn't there yet, is some better pricing for address. Tom, go ahead.

Tom Schwartz

Yeah. I would like to add to that in trying times, Brad, there is opportunity. This is one relationship that's really established with borrowers, and so we're out into the marketplace looking for those opportunities, as we speak.

Brad Vander Ploeg - Raymond James

Alright, that's good to hear. Then, I know I said one final thing, but one more thing just in terms of the acquisition market. I know that you all are the buyer of choice for some because you are not a slash and burn shop. I am just curious as to whether this environment is pushing more people who want to sell, and whether that is something that you're even interested in at this point.

John O'Meara

We're always interested in that. That's one of my portfolio responsibilities. I think it's going to take some getting used to security values where people are going to be heading in this market. It's been a very, very cold shower here in the last 90 days for all of us, in terms of value of our stock.

Brad Vander Ploeg - Raymond James

Okay. Thank you very much

John O'Meara

Thank you.

Operator

(Operator Instructions). If there are no further questions, I would now like to turn the call back over Mr. Clemens for closing remarks.

Paul Clemens

Okay. Well. I just want to echo John. Thank you for joining us and for your interest in First Midwest Bancorp. I hope you have a good day.

Operator

Ladies and gentlemen, this concludes the conference for today. Thank you all for your participation in today's conference call. You may now disconnect.

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