First Midwest Bancorp Inc. in Itasca, Ill., said Wednesday that it had received approval from the Treasury Department to redeem $193 million in preferred stock issued in December 2008 under the Troubled Asset Relief Program.
The $8 billion-asset company said the redemption would be funded through a combination of existing liquid assets and proceeds from one or more debt offerings totaling about $115 million. The size, structure and timing of debt offerings will depend on market conditions, the company said.
Michael L. Scudder, its president and chief executive, said in a press release that there was no requirement to raise equity as part of the approval. After the redemption of the preferred stock, First Midwest said it expects to enter into negotiations to by back warrants the Treasury holds to purchase 1.3 million shares of common stock at a price of $22.18 per share.
First Midwest also said Wednesday in a separate press release that it earned $6.4 million in the third quarter due to improved credit conditions. This was down about 21% from the second quarter but up significantly from the earnings of $11,000 a year earlier.
Nonperforming assets dropped almost 23% from Dec. 31, 2010, to $208.1 million for the quarter. This was due to remediation activities, dispositions and chargeoffs partially offset by loans downgraded to nonaccrual status, the company said. The provision for loan losses was $20.4 million, up about 9% from the second quarter but down 39% from a year ago.
Fee-based revenues totaled $24.4 million, relatively unchanged from the second quarter but up 8.7% from a year ago.
