Why First Midwest Bancorp Inc (NASDAQ: FMBI) stock is declining

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First Midwest Bancorp Inc (NASDAQ: FMBI) stock fell over 1% on 22nd January, 2020 (As of 9:45 am GMT-5; Source: Google finance).

For fourth quarter of FY 19, Net interest income for the fourth quarter of 2019 declined by 1.6% from the third quarter of 2019 and rose by 7% from the fourth quarter of 2018. The decline in net interest income compared to the third quarter of 2019 was mainly due to lower interest rates, which was partially offset by lower cost of funds and higher acquired loan accretion. Compared to the fourth quarter of 2018, the net interest income rose due to the acquisition of interest-earning assets from the Bridgeview Bancorp, Inc. transaction.

The company has reported net income for the fourth quarter of 2019 of $52.1 million compared to $54.5 million for the third quarter of 2019, and $41.4 million for the fourth quarter of 2018. Moreover, for the fourth quarter of 2019, total average interest-earning assets have increased by $168.4 million from the third quarter of 2019 and $2 billion from the fourth quarter of 2018. The increase compared to the third quarter of 2019 is on back of loan growth, while the increase compared to the fourth quarter of 2018 was due to interest-earning assets acquired in the Bridgeview transaction, loan growth, and securities purchases.

Meanwhile, the Company has signed a merger agreement to acquire Bankmanagers Corp., the holding company for Park Bank, based in Milwaukee, Wisconsin for the total consideration of approximately $195 million. As of September 30, 2019, Bankmanagers had about $1 billion of assets, $875 million of deposits, and $700 million of loans. The merger agreement offers for a fixed exchange ratio of 29.9675 shares of Company common stock, plus $623.02 in cash, for each share of Bankmanagers common stock, subject to certain adjustments.

FMBI in the fourth quarter of FY 19 has reported the adjusted earnings per share of 51 cents, beating the analysts’ estimates for the adjusted earnings per share of 50 cents, according to Zacks Investment Research. The company had reported the adjusted revenue of $194.9 million in the fourth quarter of FY 19, beating the analysts’ estimates for revenue of $192.3 million.

Additionally, the company has declared a quarterly cash dividend of $0.14 per common share during the fourth quarter of 2019, which is a 17% increase from the fourth quarter of 2018.

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