First Midwest Bancorp Inc., which is closing five Region banks, made $29.6 million in the second quarter, a 15.4 percent year-over-year decline as compared to the second quarter of 2017.
The Chicago-based bank, which is closing branches in Lowell, Chesterton, Gary, East Chicago and Calumet City later this year, made $0.29 per share in the second quarter, down from $0.34 per share in the second quarter of 2017. It grew loans by 8 percent and deposits by 3 percent.
"It was a strong and active quarter," CEO Michael Scudder said. "We earned $0.29 per share for the quarter, which, as expected, absorbed $0.11 per share of implementation costs attendant to our Delivering Excellence initiative. Adjusted for this investment, earnings improved to $0.40 per share, a robust 21 percent increase over last quarter."
"Overall, earnings benefited from solid loan growth, stable core funding, as well as higher interest rates, which in turn expanded net interest income and margin. Our performance was further enhanced by improved credit costs, controlled operating expenses, and lower taxes."
First Midwest bought Bank Calumet for $1.1 billion in 2006, Great Lakes Bank for $58 million in 2014, and Standard Bank and Trust for $365 million in 2016. It has since closed or announced it would close nine bank branches in Northwest Indiana and one in neighboring Calumet City, partly in response to the growth of online and mobile banking.
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The bank has called the closure of multiple branches its "Delivering Excellence initiative."
"Delivering Excellence remains on track as we advance our commitment to give our clients a superior service experience, as well as maximize the efficiency and scalability of our platforms," Scudder said. "Importantly, today’s investments will be more than recouped through the benefits of a deeper relationship with our clients and improved operating performance."
Despite the shrinking of its brick-and-mortar footprint in the communities it serves, First Midwest is continuing to expand through acquisition.
"Additionally, our pending acquisition of Northern States Financial Corporation will further strengthen our balance sheet and add to our business momentum," Scudder said. "As we look ahead, these investments, supported by a talented team of colleagues and healthy economic backdrop, leave us well positioned for continued business growth and improved performance."