First Midwest completes TARP repayment

ITASCA — First Midwest Bancorp Inc. sai it has completed the repurchase of $193 million in U.S. Treasury stock issued as a part of the Troubled Asset Relief Program.

The repurchase of the preferred stock on Nov. 23 will result in a one-time, noncash, after-tax charge of approximately $1.5 million or 2 cents per share in the fourth quarter, representing the unaccreted discount recorded at the date of issuance, the bank said in a release.

In total, Treasury received $193.2 million, including $214,000 in accrued dividends from First Midwest as a result of the repurchase. Over the life of its investment, dividends totaling $28.6 million were paid to Treasury by First Midwest.

“We are very pleased to make this announcement,” said Michael L. Scudder, president and CEO of First Midwest Bancorp, Inc. “It was the right time to redeem Treasury’s investment and, with the absence of any requirement to raise equity, clearly in the best interest of our shareholders.

“We believe the approval to repay TARP further validates the strength and stability of First Midwest and recognizes the positive actions we have undertaken to enhance our credit and operating performance. Following repayment, we continue to maintain capital levels well in excess of the highest regulatory guidelines and will eliminate the dividend associated with the preferred stock,” Scudder added. “As we look forward, the strength of our capital and liquidity remain a competitive advantage and leave us well positioned to both meet the financial needs of our clients and expand our business.”