10-Q

SECURITIES AND EXCHANGE COMMISSION
FORM 10-Q
Washington, D.C. 20549


(Mark One)

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarter ended  June 30, 2001 or

[  ]    Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from__________________to ____________________.

Commission File Number 0-10967
____________________________________________________________________________________________

FIRST MIDWEST BANCORP, INC. (Exact name of Registrant as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization)	36-3161078 (IRS Employer Identification No.)
300 Park Blvd., Suite 405, P.O. Box 459 Itasca, Illinois 60143-9768 (Address of principal executive offices) (zip code) (630) 875-7450 (Registrant's telephone number, including area code) Common Stock, $.01 Par Value Preferred Share Purchase Rights Securities Registered Pursuant to Section 12(g) of the Act
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ].
As of August 13, 2001, 39,855,126 shares of the Registrant's $.01 par value common stock were outstanding, excluding treasury shares.
Exhibit Index is located on page 22.

FIRST MIDWEST BANCORP, INC.
FORM 10-Q
TABLE OF CONTENTS
		Page
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
	Consolidated Statements of Condition		3
	Consolidated Statements of Income		4
	Consolidated Statements of Cash Flows		5
	Notes to Consolidated Financial Statements		6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			10
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K			21

PART I. FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTS FIRST MIDWEST BANCORP, INC. CONSOLIDATED STATEMENTS OF CONDITION (Amounts in thousands)
										June 30, 2001				December 31, 2000
										(Unaudited)
Assets
	Cash and due from banks									$	181,709			$				166,423
	Federal funds sold and other short-term investments										8,982			18,070
	Mortgages held for sale										14,641			5,438
	Securities available for sale, at market value										1,843,645			2,130,148
	Securities held to maturity, at amortized cost										96,810			84,797
	Loans, net of unearned discount										3,372,754			3,233,196
	Reserve for loan losses										(46,705)			(45,093)
				Net loans							3,326,049			3,188,103
	Premises, furniture and equipment										79,923			81,840
	Accrued interest receivable										35,352			41,589
	Investment in corporate owned life insurance										131,576			126,860
	Other assets										54,362			63,216
				Total assets						$	5,773,049			$					5,906,484
Liabilities
	Demand deposits									$	722,762			$				705,404
	Savings deposits										455,444			447,455
	NOW accounts										459,580				450,503
	Money market deposits										557,701				535,391
	Time deposits										1,967,120				2,113,452
				Total deposits							4,162,607			4,252,205
	Borrowed funds										1,103,410			1,145,872
	Accrued interest payable										17,983			20,568
	Other liabilities										36,336			41,116
				Total liabilities							5,320,336			5,459,761
Stockholders' equity
	Preferred stock, no par value; 1,000 shares authorized, none issued										-			-
	Common stock, $.01 par value; authorized 60,000 shares; issued     45,548 shares; outstanding: June 30, 2001 - 40,090 shares;     December 31, 2000 - 40,866 shares
											455			455
	Additional paid-in capital										77,495			78,269
	Retained earnings										511,312			487,878
	Accumulated other comprehensive (loss), net of tax										(1,405)			(7,039)
	Treasury stock, at cost: June 30, 2001 - 5,458 shares     December 31, 2000 - 4,682 shares
											(135,144)			(112,840)
			Total stockholders' equity								452,713			446,723
			Total liabilities and stockholders' equity							$	5,773,049			$				5,906,484
See notes to consolidated financial statements.
FIRST MIDWEST BANCORP, INC. CONSOLIDATED STATEMENTS OF INCOME (Amounts in thousands, except per share data) (Unaudited)
						Quarters Ended June 30,						Six Months Ended June 30,
					2001			2000				2001				2000
Interest Income
Loans					$		67,850	$	68,893			$	137,062			$					133,428
Securities available for sale					29,604			34,868				61,433				68,893
Securities held to maturity					1,429			729				2,836				1,409
Federal funds sold and other short-term investments					279			227				472				460
		Total interest income			99,162			104,717				201,803				204,190
Interest Expense
Deposits					36,234			36,471				76,351				71,040
Borrowed funds					12,563			19,846				28,199				36,558
		Total interest expense			48,797			56,317				104,550				107,598
		Net interest income			50,365			48,400				97,253				96,592
Provision for loan losses					4,065			2,512				7,523				4,474
		Net interest income after provision for loan losses			46,300			45,888				89,730				92,118
Noninterest Income
Service charges on deposit accounts					6,089			5,496				11,581				10,485
Trust and investment management fees					2,648			2,680				5,321				5,158
Other service charges, commissions, and fees					4,628			4,244				8,895				7,782
Mortgage banking revenues					-			1				-				406
Corporate owned life insurance income					2,019			1,454				4,287				2,877
Security (losses) gains, net					(2)			(49)				702				(57)
Other income					1,887			1,733				3,409				3,616
		Total noninterest income			17,269			15,559				34,195				30,267
Noninterest Expense
Salaries and wages					14,940			15,401				29,301				31,103
Retirement and other employee benefits					4,157			4,192				8,234				8,029
Occupancy expense of premises					3,819			3,299				7,933				6,766
Equipment expense					1,889			1,901				3,843				3,957
Technology and related costs					2,558			2,718				5,099				5,716
Professional services					1,522			2,168				2,922				3,872
Advertising and promotions					1,078			1,115				1,969				2,100
Other expenses					6,756			6,406				12,511				12,790
		Total noninterest expense			36,719			37,200				71,812				74,333
Income before income tax expense					26,850			24,247				52,113				48,052
Income tax expense					6,559			5,684				12,498				11,349
		Net income			$		20,291	$	18,563			$	39,615			$				36,703
Per Share Data
		Basic earnings per share			$		0.50	$	0.45			$	0.97				$			0.89
		Diluted earnings per share			$		0.50	$	0.45			$	0.97				$			0.89
		Cash dividends per share			$		0.20	$	0.18			$	0.40				$			0.36
		Weighted average shares outstanding			40,505			41,122				40,684					41,126
		Weighted average diluted shares outstanding			40,737			41,437				40,910					41,350
See notes to consolidated financial statements.

FIRST MIDWEST BANCORP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) (Unaudited)
				Six Months Ended June 30,
				2001					2000
Operating Activities
Net income					$	39,615		$		36,703
Adjustments to reconcile net income to net cash provided by operating activities:
	Provision for loan losses				7,523			4,474
	Depreciation of premises, furniture, and equipment				4,496			4,384
	Net amortization (accretion) of premium (discount) on securities				219			(1,237)
	Net (gains) losses on sales of securities				(702)			57
	Net (gains) on sales of other real estate owned				(68)			(333)
	Net (gains) on sales of premises, furniture, and equipment				(220)			(28)
	Net loss on sale of mortgage servicing rights				-			207
	Tax benefits from employee exercises of nonqualified stock options				359			849
	Net (increase) in deferred income taxes				(655)			(4,414)
	Net amortization of goodwill and other intangibles				1,527			1,674
	Originations and purchases of mortgage loans held for sale				(133,218)			(51,446)
	Proceeds from sales of mortgage loans held for sale				124,015			59,311
	Net (increase) in corporate owned life insurance				(4,716)			(7,877)
	Net decrease (increase) in accrued interest receivable				6,237			(5,454)
	Net (decrease) increase in accrued interest payable				(2,585)			1,488
	Net decrease in other assets				3,970			6,832
	Net (decrease) in other liabilities				(4,610)			(7,753)
		Net cash provided by operating activities			41,187			37,437
Investing Activities
Securities available for sale:
	Proceeds from maturities, repayments, and calls				352,649			126,300
	Proceeds from sales				355,405			118,529
	Purchases				(410,780)			(365,362)
Securities held to maturity:
	Proceeds from maturities, repayments, and calls				12,530			5,255
	Purchases				(24,496)			(7,268)
Net (increase) in loans					(147,518)			(244,336)
Proceeds from sales of other real estate owned					1,191			2,303
Purchases of other real estate owned					(162)			-
Proceeds from sales of premises, furniture, and equipment					860			685
Purchases of premises, furniture, and equipment					(3,179)			(5,421)
Proceeds from sale of mortgage servicing rights					-			22,564
		Net cash provided (used) by investing activities			136,500			(346,751)
Financing Activities
Net (decrease) increase in deposit accounts					(89,598)			62,919
Net (decrease) increase in borrowed funds					(42,462)			314,752
Purchase of treasury stock					(24,343)			(2,360)
Proceeds from issuance of treasury stock					8			5
Cash dividends paid					(16,340)			(14,817)
Exercise of stock options					1,246			696
			Net cash (used) provided by financing activities		(171,489)			361,195
			Net increase in cash and cash equivalents		6,198			51,881
			Cash and cash equivalents at beginning of period		184,493			156,973
			Cash and cash equivalents at end of period		$		190,691	$			208,854
See notes to consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except per share data)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited interim consolidated financial statements of First Midwest Bancorp, Inc. ("First Midwest" or the "Company") have been prepared in accordance with generally accepted accounting principles and with the rules and regulations of the Securities and Exchange Commission for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of Management, all normal and recurring adjustments which are necessary to fairly present the results for the interim periods presented have been included. The preparation of financial statements requires Management to make estimates and assumptions that affect the recorded amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. In addition, certain reclassifications have been made to the 2000 data to conform to the 2001 presentation. For further information with respect to significant accounting policies followed by First Midwest in the preparation of its consolidated financial statements, refer to First Midwest's Annual Report on Form 10-K for the year ended December 31, 2000.

Disclosures about Segments of an Enterprise and Related Information

Operating segments are components of a business about which separate financial information is available and that are evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assess performance. Public companies are required to report certain financial information about operating segments in interim and annual financial statements. First Midwest's chief operating decision maker evaluates the operations of the Company as one operating segment, commercial banking, due to the materiality of the commercial banking operation to the Company's financial condition and results of operations taken as a whole, and, as a result, separate segment disclosures are not required. First Midwest offers the following products and services to external customers: deposits, loans, and trust services. Revenues for each of these products and services are disclosed separately in the Consolidated Statements of Income.

Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities

Effective April 1, 2001, First Midwest adopted Financial Accounting Standards Board ("FASB") Statement No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities" that replaces, in its entirety, FASB Statement No. 125. Although FASB No. 140 has changed many of the rules regarding securitizations, it continues to require an entity to recognize the financial and servicing assets it controls and the liabilities it has incurred and to derecognize financial assets when control has been surrendered in accordance with the criteria provided in the Statement. The adoption of FASB No. 140 had no impact on the consolidated position or results of operations of First Midwest.

Recent Accounting Pronouncements

In June 2001, the FASB issued Statements No. 141, "Business Combinations" ("FASB No. 141"), and No. 142, "Goodwill and Other Intangible Assets" ("FASB No. 142"). These Statements significantly change the accounting for business combinations, goodwill and intangible assets. FASB No. 141 eliminates the pooling-of-interests method of accounting for business combinations except for qualifying business combinations that were initiated prior to July 1, 2001. Additionally, FASB No. 141 further clarifies the criteria to recognize intangible assets separately from goodwill. This Statement is effective for business combinations initiated after June 30, 2001.

Under FASB No. 142, goodwill and intangible assets deemed to have indefinite lives will no longer be amortized but will be subject to annual impairment tests in accordance with the Statement. Other intangible assets will continue to be amortized over their useful lives. The amortization provisions of FASB No. 142 apply to goodwill and intangible assets acquired after June 30, 2001. With respect to existing goodwill and intangible assets, companies are required to adopt FASB No. 142 in their fiscal year beginning after December 15, 2001.

First Midwest will adopt FASB No. 142 on January 1, 2002. Application of the non-amortization provisions of the Statement is expected to result in additional net income of approximately $2.2 million, or $.05 per share per year. During 2002, First Midwest will perform the first of the required impairment tests of goodwill and indefinite lived intangible assets as of January 1, 2002 and has not yet determined what the effect of these tests will be on the financial position or results of operations of First Midwest.

2. SECURITIES

The aggregate amortized cost, gross unrealized gains and losses, and market value of securities were as follows:

		June 30, 2001										December 31, 2000
		Amortized		Gross Unrealized					Market			Amortized					Gross Unrealized								Market
		Cost		Gains		Losses		Value				Cost					Gains				Losses				Value
Securities Available    for Sale
U.S. Treasury		$	401	$	6	$	-		$	407		$		602			$		2		$			-	$		604
U.S. Agency		145,718		147		(195)			145,670			423,211					546				(1,068)				422,689
Mortgage-backed		1,157,696		6,823		(10,095)			1,154,424			1,172,187					5,648				(11,311)				1,166,524
State and municipal		478,119		8,811		(4,856)			482,074			480,730					6,202				(8,413)				478,519
Other		62,916		48		(1,894)			61,070			64,958					102				(3,248)				61,812
	Total	$	1,844,850	$	15,835	$	(17,040)		$	1,843,645			$			2,141,688		$		12,500		$	(24,040)			$		2,130,148
Securities Held    to Maturity
U.S. Treasury		$	1,827	$	-	$	-		$		1,827	$			1,821		$		17		$			-	$		1,838
U.S. Agency		75		-		-			75			75					-				(1)				74
State and municipal		71,795		653		(4)			72,444			60,392					709				(5)				61,096
Other		23,113		-		-			23,113			22,509					-				-				22,509
	Total	$	96,810	$	653	$	(4)		$		97,459	$			84,797		$		726		$			(6)	$		85,517

For additional details of the securities available for sale portfolio and the related impact of unrealized gains/(losses) thereon, see Note 6 to the interim consolidated financial statements on page 9.

3. LOANS

The major classifications of loans are as follows:

		June 30,		December 31,
		2001		2000
Commercial, industrial and agricultural		$	933,700	$	884,944
Consumer		948,406		924,189
Real estate - 1 - 4 family		226,809		250,635
Real estate - commercial		967,457		900,781
Real estate - construction		296,382		272,647
	Total loans, net of unearned discount	$	3,372,754	$	3,233,196

4. RESERVE FOR LOAN LOSSES/IMPAIRED LOANS

A summary of the transactions in the reserve for loan losses and details regarding impaired loans for the quarters and six months ended June 30, 2001 and 2000 are summarized below:

				Quarters Ended June 30,				Six Months Ended June 30,
				2001		2000		2001			2000
Balance at beginning of period				$	45,421	$	42,984	$		45,093	$		42,645
		Provision for loan losses		4,065		2,512		7,523				4,474
		Loans charged-off		(3,572)		(2,052)		(7,276)				(4,406)
		Recoveries of loans previously charged-off		791		668		1,365				1,399
			Net loans (charged-off)	(2,781)		(1,384)		(5,911)				(3,007)
Balance at end of period				$	46,705	$	44,112	$	46,705			$		44,112
Impaired Loans:
		Requiring valuation reserve (1)						$	7,731			$		570
		Not requiring valuation reserve						7,554				14,961
			Total impaired loans					$	15,285			$		15,531
Valuation reserve related to impaired loans								$	1,875			$		279
Average impaired loans								$	16,379			$		15,800
(1)	These impaired loans require a valuation reserve allocation because the value of the loans is less than the recorded investments in the loans.

Specific reserves are established for any impaired commercial, real estate commercial, and real estate construction loans for which the recorded investment in the loan exceeds the measured value of the loan. A loan is considered impaired when it is probable that a creditor will be unable to collect all contractual principal and interest due according to the terms of the loan agreement. Loans subject to impairment valuation are defined as nonaccrual and restructured loans exclusive of smaller balance homogeneous loans such as home equity, installment, and 1-4 family residential loans. The value of the loan is determined based on the present value of expected future cash flows discounted at the loan's effective interest rate, the market price of the loan, or the fair value of the underlying collateral less costs to sell, if the loan is collateral dependent.

5. EARNINGS PER COMMON SHARE

The following table sets forth the computation of basic and diluted earnings per share for the quarters and six months ended June 30, 2001 and 2000:

		Quarters Ended June 30,				Six Months Ended June 30,
		2001		2000		2001		2000
Basic Earnings Per Share:
	Net income	$	20,291	$	18,563	$	39,615	$	36,703
	Average common shares outstanding	40,505		41,122		40,684		41,126
	Basic earnings per share	$	0.50	$	0.45	$	0.97	$		0.89
Diluted Earnings Per Share:
	Net income	$	20,291	$	18,563	$	39,615	$		36,703
	Average common shares outstanding	40,505		41,122		40,684		41,126
	Dilutive effect of stock options	232		225		226		224
	Diluted average common shares outstanding	40,737		41,347		40,910		41,350
	Diluted earnings per share	$	0.50	$	0.45	$	0.97	$		0.89

6. COMPREHENSIVE INCOME

The components of comprehensive income, net of related taxes, for the quarters and six months ended June 30, 2001 and 2000 are as follows:

				Quarters Ended June 30,							Six Months Ended June 30,
				2001		2000					2001					2000
Net Income				$	20,291	$	18,563				$			39,615		$		36,703
Unrealized holding (losses) gains on securities
	available for sale, net of reclassification
	adjustment			(6,073)		1,994					6,304					5,697
Unrealized holding (losses) on hedging activity				(153)		¾					(670)					¾
			Comprehensive income	$	14,065	$	20,557					$			45,249		$	42,400
Disclosure of Reclassification Amount:
Unrealized holding (losses) gains on securities
	available for sale arising during the period			$	(6,073)	$			1,992		$			6,733		$		5,690
Less: Reclassification adjustment for net
	gains (losses) realized during the period			¾		(2)					429					(7)
	Net unrealized holding (losses) gains on securities
		securities available for sale		$	(6,073)	$		1,994		$			6,304			$		5,697
Provided below is the change in accumulated other comprehensive income (loss) for the six months ended June 30, 2001 and 2000:

	Six Months Ended June 30,
	2001		2000
Beginning balance	$	(7,039)	$	(49,072)
Current year change	5,634		5,697
Ending Balance	$	(1,405)	$	(43,375)

For additional details of the securities available for sale portfolio and the related impact of unrealized gains/(losses) thereon, see Note 2 to the interim consolidated financial statements on page 7.

7. SUPPLEMENTARY CASH FLOW INFORMATION

Supplemental disclosures to the consolidated statements of cash flows for the six months ended June 30, 2001 and 2000 are as follows:

	Six Months Ended June 30,
	2001		2000
Income taxes paid	$	9,701	$	19,837
Interest paid to depositors and creditors	107,135		106,110
Noncash transfers of loans to foreclosed real estate	1,448		2,108
Dividends declared but unpaid	8,025		7,400

8. ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Effective January 1, 2001, First Midwest adopted Financial Accounting Standards Board ("FASB") Statement No. 133, "Accounting for Derivative Instruments and Hedging Activities", as amended by FASB Nos. 137 and 138. The Statement establishes accounting and reporting standards requiring that derivative instruments (including certain derivative instruments embedded in other contracts) be recorded on the balance sheet as either assets or liabilities measured at fair value. FASB No. 133 requires that changes in the derivative's fair value be recognized currently in earnings unless specific hedge accounting criteria are met. If the derivative is designated as a hedge, depending on the nature of the hedge, changes in the fair value of derivatives that are considered to be effective, as defined, will either offset the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or will be recorded in other comprehensive income until the hedged item is recorded in earnings. Any por tion of a change in a derivative's fair value that is consider to be ineffective, as defined, may have to be immediately recorded in earnings. The adoption of these standards may cause volatility in both the income statement and the shareholders' equity section of the balance sheet.

First Midwest enters into derivative contracts to manage its sensitivity to interest rate risk. This is accomplished by using derivative instruments to offset the inherent price or interest rate risk of specific balance sheet assets or liabilities. All such derivative instruments are designated as hedges on the trade date and are recognized on the balance sheet at their fair value as other assets or other liabilities. The fair value of derivative instruments in a gain position is reported on the balance sheet in other assets, and the fair value of derivative contracts in a loss position is reported in other liabilities. Derivatives designated as hedges of changes in the fair value of an asset or liability are considered to be fair value hedges. Derivatives designated as hedges of a forecasted transaction or of the variability of cash flows to be received or paid related to an asset or liability are considered to be cash flow hedges. First Midwest formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. A formal assessment, both at the inception of the hedge and on an ongoing quarterly basis is performed to determine whether the derivative instruments that are used in hedging transactions have been effective and whether they are expected to continue to be effective in future periods.

As of June 30, the only derivative contracts employed by First Midwest were interest rate swaps used to lengthen the duration of certain indexed deposit accounts. These interest rate swaps are designated as cash flow hedges under FASB No. 133. No ineffectiveness was recorded for such cash flow hedges for the quarter or six month periods ended June 30, 2001. Changes in the fair value of these cash flow hedges are reported in the accumulated other comprehensive income component of stockholders' equity.

For additional details of the unrealized gains/(losses) on hedging activity, see Note 6 to the interim financial statements on page 9.

9. CONTINGENT LIABILITIES AND OTHER MATTERS

There are certain legal proceedings pending against First Midwest and its Subsidiaries in the ordinary course of business at June 30, 2001. In assessing these proceedings, including the advice of counsel, First Midwest believes that liabilities arising from these proceedings, if any, would not have a material adverse effect on the consolidated financial condition of First Midwest.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The discussion presented below provides an analysis of First Midwest's results of operations and financial condition for the quarters and six months ended June 30, 2001 and 2000. Management's discussion and analysis should be read in conjunction with the consolidated financial statements and accompanying notes presented elsewhere in this report as well as First Midwest's 2000 Annual Report on Form 10-K. Results of operations for the quarter and six months ended June 30, 2001 are not necessarily indicative of results to be expected for the full year of 2001. Unless otherwise stated, all earnings per share data included in this section and throughout the remainder of this discussion are presented on a diluted basis. All financial information is presented in thousands, except per share data.

Summary of Performance

Net income for the quarter ended June 30, 2001 increased to $20,291, or $0.50 per share, as compared $18,563, or $.45 per share, for the same period in 2000, representing an increase of 11.1% on a per share basis. Net income for the six months ended June 30, 2001 totaled $39,615, or $0.97 per share, as compared to $36,703, or $.89 per share, for the same period in 2000, for an increase of 9.0% on a per share basis.

Performance for the second quarter of 2001 resulted in annualized returns on average stockholders' equity and assets of 17.65% and 1.41%, respectively, as compared to returns of 19.62% and 1.29% for the same quarter in 2000. Return on average stockholders' equity was 17.36% for the six months ended June 30, 2001 as compared to 19.73% for the same period in 2000. Return on average assets for the six months ended June 30, 2001 was 1.39% as compared to 1.29% for the same period in 2000.

The return on average assets for the second quarter of 2001 and for the six months then ended represented record levels of performance for First Midwest. The reduction in return on average equity for the second quarter and six months of 2001 is attributable to an approximate $58 million increase in total stockholders' equity at June 30, 2001 over the year-earlier level resulting primarily from the improvement in the market value of the available-for-sale securities portfolio. As a result of such increase, book value per share as of June 30, 2001 improved to $11.29 from $9.63 a year ago, for an increase of 17.2%. This increase in book value occurred while First Midwest continued to repurchase shares of its common stock with 1.2 million shares being purchased since June 30, 2000, of which 665,000 shares were purchased in the second quarter 2001.

Total average loans increased by 7.0% during the first half of 2001 as compared to the 2000 period, while total average deposits increased by 3.3% for the same comparative periods. The growth experienced in its core deposit base permitted First Midwest to continue to reduce its reliance on higher cost wholesale funds, with average wholesale funding decreasing by $165 million, or 13.1%, during the first six months of 2001 as compared to the same period in 2000. As a result of the combination of the quarter's loan growth and a reduced reliance on borrowed funds, as well as the series of interest rate reductions initiated by the Federal Reserve in 2001, net interest margin in the second quarter of 2001 increased by 20 basis points to 4.04% as compared to 3.84% for the 2000 period. Since troughing at 3.61% in the fourth quarter of 2000, net interest margin has improved for two consecutive quarters to 3.77% in the first quarter 2001 and 4.04% in the second quarter.

The provision for loan losses for the second quarter 2001 totaled $4,065 and exceeded net charge-offs for the period by $1,284. For the first half 2001, provisions of $7,523 exceeded net charge-offs by $1,612. As a result, even as the loan growth described was realized, First Midwest was able to increase the reserve for loan losses to $46,705, or 1.38% of total loans, at June 30, 2001.

Credit quality ratios improved at June 30, 2001, reversing the deterioration in such ratios seen at March 31, 2001. The ratio of nonperforming loans to total loans at June 30, 2001 improved by 7 basis points to .61% from .68% at the prior quarter-end, while net loan charge-offs to average loans decreased to .34% from .39% for the same comparative periods. As a result of such improvement, the coverage ratio of the reserve for loan losses to nonperforming loans increased to 228%, representing the highest level in the last nine quarters.

Total noninterest income for the second quarter 2001 grew by 11.0% over second quarter 2000 following a 15.1% increase in the first quarter of this year. The year-to-year improvement occurred primarily in the major categories of service charges on deposits and other service charges and fees. Corporate-owned life insurance income also increased by $565 resulting from higher outstanding balances and improved earnings rates.

Noninterest expenses for the second quarter 2001 decreased by 1.3% from second quarter 2000 and followed a decrease of 5.5% experienced in the first quarter 2001. Year-over-year improvement for both the second quarter and the six month period was realized in virtually all major categories of noninterest expense and resulted in efficiency ratios of 50.5% for the second quarter 2001 and 50.9% for the six month period, both representing record levels of performance.

Net Interest Income, Loan Growth and Funding Sources

Net interest income on a tax equivalent basis totaled $53,943 for the second quarter 2001, representing an increase of $1,646, or 3.1%, over the year-ago quarter which totaled $52,297, while net interest margin for the 2001 quarter improved to 4.04% as compared to 3.84% for the 2000 quarter. As shown in the Volume/Rate Analysis on page 14, the primary factors contributing to the improvement in net interest income and net interest margin were the

increase in higher-yielding loan balances accompanied by the decrease in high-cost borrowed funds, both occurring against a backdrop of declining interest rates. First Midwest has maintained a liability-sensitive balance sheet during 2000 and 2001 (a discussion of which provided in more detail on Page 16 of the 2000 Form 10-K) that reflects the decline in interest rates resulting from the series of Federal Reserve interest rate reductions which positively impacted First Midwest's net interest income and margin because the rates paid on the Company's interest bearing liabilities decreased at a faster pace than the rates earned on interest earning assets. This dynamic was especially evident in the liability accounts that reprice more quickly, namely borrowed funds and money market deposits. Although the decrease in interest rates also reduced income earned on the higher-yielding loan portfolio, such reduction was more than offset by reduced interest expense on these liability accounts. A s a result, both net interest income and net interest margin improved, with the latter increasing for the second consecutive quarter to its highest rate since the fourth quarter of 1999.

First Midwest continued to experience growth in average loans during the second quarter of 2001, with total average loans increasing by 5.7% as compared to the same period in 2000. As shown in the tables below, loan growth was experienced across virtually all categories based on both average and period-end balances. These increases were experienced despite the sale of $30 million in consumer home equity loans occurring at year-end 2000.

Total average deposits increased by 3.2% in the second quarter of 2001 as compared to the prior year and permitted First Midwest to further reduce its higher-cost wholesale funding. Average wholesale funding has now dropped for four consecutive quarters as the increase in core deposit growth combined with a reduction in the securities-available-for-sale portfolio continued to be sufficient to support loan growth.

Loan Growth

The following table summarizes growth in loans based upon both average and period end balances:

		Average Balances
			June 30, 2001		June 30, 2000		% Change
Commercial, industrial and agricultural			$	915,295	$	849,701	7.7
Consumer			939,740		915,692		2.6
Real estate - 1 - 4 family			233,870		258,933		(9.7)
Real estate - commercial			954,104		870,187		9.6
Real estate - construction			282,281		252,294		11.9
	Loans, net of unearned discount		$	3,325,290	$	3,146,807	5.7

		As of Period End
		2001		2000				June 30 % Change From
		June 30		December 31		June 30		12/31/00		6/30/00
Commercial, industrial and agricultural		$	933,700	$	884,944	$	860,133	5.5	8.6
Consumer		948,406		924,189		933,769		2.6	1.6
Real estate - 1 - 4 family		226,809		250,635		259,352		(9.5)	(12.5)
Real estate - commercial		967,457		900,781		896,196		7.4	8.0
Real estate - construction		296,382		272,647		252,258		8.7	17.5
	Loans, net of unearned discount	$	3,372,754	$	3,233,196	$	3,201,708	4.3	5.3

Core Funding Sources

The following table provides a comparison of average core funding sources for the quarters ended June 30, 2001 and 2000 based upon average balances. Average, rather than period-end balances are more meaningful in analyzing funding sources because of the inherent fluctuations that occur on a monthly basis within most deposit categories.

		Average Balances
		June 30, 2001		June 30, 2000		% Change
Demand Deposits		$	682,311	$	665,932	2.5
Savings deposits		459,758		484,194		(5.0)
NOW accounts		478,449		484,426		(1.2)
Money market deposits		550,181		471,792		16.6
Time deposits		2,006,332		1,940,270		3.4
	Total deposits	4,177,031		4,046,614		3.2
Borrowed funds		1,074,391		1,323,701		(18.8)
	Total funding sources	$	5,251,422	$	5,370,315	(2.2)

Volume/Rate Analysis

The table below summarizes the changes in average interest-bearing assets and interest-bearing liabilities as well as the average rates earned and paid on these assets and liabilities, respectively, for the quarters ended June 30, 2001 and 2000. The table also details the increase and decrease in income and expense for each major category of assets and liabilities and analyzes the extent to which such variances are attributable to volume and rate changes. Interest income and yields are presented on a tax-equivalent basis.

Quarters Ended June 30, 2001 and 2000
			Average Balances										Average Interest Rates Earned/Paid								Interest Income/Expense								Increase/(Decrease) in Interest Income/Expense Due to:
																		Basis
										Increase								Points									Increase
			2001			2000				(Decrease)			2001		2000			Inc/(Dec)			2001			2000			(Decrease)		Volume		Rate		Total
Fed funds sold and other investments
	short-term investments		$	9,853			$	9,373			$	480	4.43%		6.44%			(2.01)%			$	109		$	151		$	(42)	$	9	$	(51)	$	(42)
Mortgages held for sale			10,241			3,909				6,332			6.64%			7.78%		(1.14)%			170			76			94		103		(9)		94
Securities available for sale			1,902,161			2,242,339				(340,178)			6.86%			6.84%		0.02%			32,625			38,321			(5,696)		(5,836)		140		(5,696)
Securities held to maturity			96,529			46,963				49,566			7.75%			7.55%		0.20%			1,870			887			983		959		24		983
Loans net of unearned
	discount		3,325,290			3,146,807				178,483			8.18%			8.79%		(0.61)%			67,966			69,179			(1,213)		5,080		(6,293)		(1,213)
Total interest-earning assets			$	5,344,074		$		5,449,391		$		(105,317)	7.69%			7.97%		(0.28)%			$	102,740		$	108,614		$	(5,874)	$	315	$	(6,189)	$	(5,874)
Savings deposits			$	459,758		$		484,194		$		(24,436)	1.84%			1.93%		(0.09)%			$	2,112		$	2,337		$	(225)	$	(115)	$	(110)	$	(225)
NOW accounts			478,449			484,426				(5,977)			1.66%			1.86%		(0.20)%			1,983			2,257			(274)		(28)		(246)		(274)
Money market deposits			550,181			471,792				78,389			3.31%			4.24%		(0.93)%			4,559			5,005			(446)		1,406		(1,852)		(446)
Time deposits			2,006,332			1,940,270				66,062			5.50%			5.54%		(0.04)%			27,580			26,872			708		906		(198)		708
Borrowed funds			1,074,391			1,323,701				(249,310)			4.68%			6.00%		(1.32)%			12,563			19,846			(7,283)		(3,358)		(3,925)		(7,283)
Total interest-bearing
	liabilities		$	4,569,111		$		4,704,383		$		(135,272)	4.27%			4.79%		(0.52)%			$	48,797		$	56,317		$	(7,520)	$	(1,189)	$	(6,331)	$	(7,520)
Net interest margin / income													4.04%			3.84%		0.20%		%	$	53,943		$	52,297	$		1,646	$	1,504	$	142	$		1,646
					2001									2000
Net Interest Margin Trend By Quarter					2nd				1st					4th			3rd		2nd				1st
	Yield on interest earning assets				7.69%				7.94%					8.12%			8.13%		7.97%				7.86%
	Rates paid on interest bearing liabilities				4.27%				4.86%					5.26%			5.16%		4.79%				4.54%
		Net interest margin			4.04%				3.77%					3.61%			3.66%		3.84%				3.96%

Volume/Rate Analysis

The table below summarizes the changes in average interest-bearing assets and interest-bearing liabilities as well as the average rates earned and paid on these assets and liabilities, respectively, for the six months ended June 30, 2001 and 2000. The table also details the increase and decrease in income and expense for each major category of assets and liabilities and analyzes the extent to which such variances are attributable to volume and rate changes. Interest income and yields are presented on a tax-equivalent basis.

Six Months Ended June 30, 2001 and 2000
		Average Balances								Average Interest Rates Earned/Paid						Interest Income/Expense							Increase/(Decrease) in Interest Income/Expense Due to:
														Basis
							Increase							Points							Increase
		2001		2000			(Decrease)			2001	2000			Inc/(Dec)		2001		2000			(Decrease)		Volume		Rate		Total
Fed funds sold and other investments
	short-term investments	$	7,920		$	7,199		$	721	5.18%	6.17%			(0.99)%		$	205	$	222		$	(17)	$	27	$	(44)	$	(17)
Mortgages held for sale		7,925		5,962			1,963			6.74%		7.98%		(1.24)%		267		238			29		55		(26)		29
Securities available for sale		1,951,279		2,223,199			(271,920)			6.32%		6.26%		0.06%		61,709		69,540			(7,831)		(8,608)		777		(7,831)
Securities held to maturity		90,744		43,970			46,774			19.69%		37.58%		(17.89)%		8,935		8,262			673		1,218		(545)		673
Loans net of unearned													%
	discount	3,291,832		3,075,373			216,459			8.33%		8.68%		(0.35)%		137,062		133,428			3,634		8,504		(4,871)		3,633
Total interest-earning assets		$	5,349,700	$		5,355,703	$		(6,003)	7.78%		7.91%		(0.13)%		$	208,178	$	211,690		$	(3,512)	$	1,196	$	(4,709)	$	(3,513)
Savings deposits		$	455,254	$		481,904	$		(26,650)	1.89%		1.93%		(0.04)%		$	4,297	$	4,655		$	(358)	$	(253)	$	(105)	$	(358)
NOW accounts		458,688		465,230			(6,542)			1.78%		1.87%		(0.09)%		4,092		4,347			(255)		(60)		(195)		(255)
Money market deposits		540,956		464,657			76,299			3.69%		4.09%		(0.40)%		9,968		9,497			471		1,177		(706)		471
Time deposits		2,030,041		1,943,376			86,665			5.71%		5.41%		0.30%		57,994		52,541			5,453		2,402		3,051		5,453
Borrowed funds		1,092,543		1,257,375			(164,832)			5.16%		5.81%		(0.65)%		28,199		36,558			(8,359)		(4,502)		(3,857)		(8,359)
Total interest-bearing
	liabilities	$	4,577,482	$		4,612,542	$		(35,060)	4.57%		4.67%		(0.10)%		$	104,550	$	107,598		$	(3,048)	$	(1,236)	$	(1,812)	$	(3,048)
Net interest margin / income										3.87%		3.89%		(0.02)%	%	$	103,628	$	104,092	$		(464)	$	2,432	$	(2,897)	$		(465)

Noninterest Income

Noninterest income increased by $1,710, or 11.0%, to $17,269 for the quarter ended June 30, 2001, as compared to $15,559 for the same period in 2000. Noninterest income totaled $34,195 for the six months ended June 30, 2001 as compared to $30,267 for the same period in 2000 for an increase of $3,928, or 13.0%. The factors resulting in the year-to-year changes are discussed below.

Service charges on deposit accounts increased 10.8% to $6,089 in the second quarter of 2001 as compared to $5,496 for the like 2000 period. The $593 increase is primarily attributable to higher returned check (NSF) revenue as a result of a tightening in fee waiver practices in addition to increases in service charges on business checking and savings accounts. Other service charges, commissions and fees increased by $384, or 9.0%, to $4,628 for the quarter ended June 30, 2001 over the second quarter 2000 of $4,244 due primarily to increases of $310 in commissions on mortgage loan originations and $151 in merchant credit card fees.

Trust and investment management fees for the second quarter 2001 decreased $32, or 1.2%, to $2,648 as compared to the $2,680 for the same period in 2000. These fees generally follow the amount of total assets under management, as well as conditions in the equity and credit markets, as such fees on certain accounts are based on market value. The decrease in the second quarter of 2001 was due in part to the overall condition of equity and credit markets since the beginning of the year, as well as to a modest decline in sales related to certain customers' reluctance to commit new funds and shift existing assets. Additionally, during the second quarter of 2001, activities were undertaken to merge First Midwest Trust Company into First Midwest Bank. The merger, which is further discussed below under the "Noninterest Expense" section, was completed on June 30, 2001. Incident to the merger, the premises housing the Company's primary trust operations were sold to a third party wit h such operations being moved to one of the Company's largest banking facilities in the south metro Chicago region. Management believes that the merger of the trust operations into the Bank has revenue enhancement potential arising from the more seamless and integrated delivery of trust, investment management and fiduciary services to the Bank's more extensive commercial and personal client base.

First Midwest's investment in corporate-owned life insurance generated $2,019 in income for the second quarter 2001 for an increase of $565, or 38.9%, as compared to the same period in 2000 due to higher outstanding balances and improved earnings rates resulting from the renegotiation of certain terms of the underlying insurance policies. Other income increased by $154, or 8.9%, to $1,887 for the second quarter 2001 as compared to the 2000 period primarily as a result of the above-mentioned sale of premises.

Noninterest Expense

Noninterest expense totaled $36,719 for the quarter ended June 30, 2001 as compared to the year-ago period of $37,200 for a decrease of $481, or 1.3%. For the six months ended June 30, 2001, noninterest expense decreased $2,521, or 3.4%, as compared to the same period in 2000. A comparison of the major categories of noninterest expense is discussed below.

Salaries and wages decreased by $461, or 3.0%, for the quarter ended June 30, 2001 as compared to prior year levels. The decrease was principally due to the elimination of approximately 100 full time equivalent employees of First Midwest Mortgage Corporation ("FMMC") in the first quarter of 2000. Additionally, modest other staffing reductions were experienced as a result of the reorganization of certain support operations of First Midwest Bank. Such staffing reductions also reduced the related retirement and other employee benefits by $35, or 0.8%, in the second quarter of 2001 compared to the same year-ago period.

Occupancy expenses increased $520, or 15.8%, for the 2001 quarter as compared to $3,299 for the same year-ago period. The increase is primarily attributable to one-time costs, representing various fixed asset and leasehold improvement write-offs in the approximate amount of $200 each, relating to the closing of two supermarket branches and the above-mentioned sale of the building housing trust operations. Equipment expense decreased $12, or 0.6%, as compared to the same year ago period of $1,901 due primarily to reduced depreciation expense relating the discontinuation of FMMC operations.

Technology and related costs decreased $160, or 5.9%, to $2,558 in the second quarter 2001 as compared to $2,718 for the same quarter in 2000 with approximately one-third of the decrease incident to the discontinuation of FMMC operations in 2000.

Professional services declined by $646, or 29.8%, to $1,522 for the quarter ended June 30, 2001 as compared to $2,168 for the 2000 quarter with such decrease being attributable to the elimination of certain professional costs associated with FMMC, as well as legal and other costs incurred to liquidate that corporation. Effective June 30, 2001, First Midwest Bank converted its charter from a national banking association to an Illinois banking corporation. The Bank's charter conversion was effected to realize a reduction in supervisory costs, included in the professional fees category, with such reduction estimated to be approximately $125 per quarter for the second half of 2001and in the range of $500 - $600 for 2002. Incident to such conversion, certain costs were incurred to change stationery, supplies, etc., which, combined with the general 3% increase in postage in 2001, contributed to the $350, or 5.5%, increase in other expenses for the second quarter 2001 as co mpared to the year-ago period.

As a result of continued cost containment and increased revenue from net interest income and noninterest income, the efficiency ratio for the quarter ended June 30, 2001 dropped to a record 50.5% as compared to the 2000 second quarter ratio of 54.0%, while the ratio for the six months ended June 30, 2001 was a record 50.9%, as compared to 54.3% for the same period in 2000.

Income Tax Expense

Income tax expense totaled $6,559 for the quarter ended June 30, 2001, increasing from $5,684 for the same period in 2000 and reflects effective income tax rates of 24.4% and 23.4%, respectively. Income tax expense totaled $12,498 for the six months ended June 30, 2001, increasing from $11,349 for the same period in 2000 and reflects effective tax rates of 24.0% and 23.6%, respectively.

Credit Quality and the Reserve for Loan Losses

The following table summarizes certain credit quality data for the last five calendar quarters:

		2001				2000
		June 30		March 31		December 31		September 30		June 30
Nonaccrual loans		$	20,518	$	22,453	$	19,849	$	20,313	$	19,838
Foreclosed real estate		2,425		1,246		1,337		2,467		1,295
	Total nonperforming assets	$	22,943	$	23,699	$	21,186	$	22,780	$	21,133
90 days past due and still accruing interest		$	5,187	$	5,339	$	7,045	$	6,217	$	6,099
Nonperforming loans to total loans			0.61%		0.68%		0.61%		0.62%		0.62%
Nonperforming assets to total loans plus
	foreclosed real estate		0.68%		0.72%		0.65%		0.69%		0.66%
Reserve for loan losses to loans			1.38%		1.39%		1.39%		1.37%		1.38%
Reserve for loan losses to
	nonperforming loans		228%		202%		227%		222%		222%
Provision for loan losses		$	4,065	$	3,458	$	1,995	$	2,625	$	2,512
Net loan charge-offs		$	2,781	$	3,130	$	1,951	$	1,688	$	1,384
Net loan charge-offs to average loans			0.34%		0.39%		0.23%		0.21%		0.18%

Nonaccrual loans, totaling $20,518 at June 30, 2001 are comprised of commercial and agricultural loans (27%), real estate loans (60%) and consumer loans (13%). Foreclosed real estate, totaling $2,425 at June 30, 2001 primarily represents real estate loans on 1-4 family properties. First Midwest's disclosure with respect to impaired loans is contained in Note 4 to the interim consolidated financial statements, located on page 8.

Transactions in the reserve for loan losses during the quarters and six months ended June 30, 2001 and 2000 are summarized in the following table:

			Quarters Ended June 30					Six Months Ended June 30
			2001			2000		2001		2000
Balance at beginning of period			$	45,421		$	42,984	$	45,093	$	42,645
	Provision for loan losses		4,065		2,512			7,523		4,474
	Loans charged-off		(3,572)		(2,052)			(7,276)		(4,406)
	Recoveries of loan previously charged-off		791		668			1,365		1,399
		Net loans (charged-off)	(2,781)		(1,384)			(5,911)		(3,007)
Balance at end of period			$	46,705		$	44,112	$	46,705	$	44,112

Credit quality ratios improved at June 30, 2001, reversing the deterioration in such ratios seen at March 31, 2001, with the ratio of nonperforming loans to total loans dropping by 7 basis points to 0.61% from 0.68% at the prior quarter end, while net charge-offs to average loans decreased to 0.34% from 0.39% for the quarters then ended.

The provision for loan losses for the second quarter 2001 totaled $4,065 and exceeded net charge-offs by $1,284, resulting in a ratio of the reserve for loan losses to total loans of 1.38% as of quarter end. The provision for loan losses in any given period is dependent upon many factors, including loan growth, changes in the composition of the loan portfolio, net charge-offs, delinquencies, collateral values, Management's assessment of current and prospective economic conditions and the level of the reserve for loan losses. First Midwest maintains a reserve for loan losses to

absorb losses inherent in the loan portfolio. The appropriate level of the reserve for loan losses is determined by systematically performing a review of the loan portfolio quality as required by First Midwest's credit administration policy. The reserve for loan losses consists of three elements; (i) specific reserves established for any impaired commercial, real estate commercial and real estate construction loan for which the recorded investment in the loan exceeds the measured value of the loan; (ii) reserves based on historical loan loss experience; and, (iii) reserves based on general economic conditions as well as specific economic factors in the markets in which First Midwest operates.

Loans within the portfolio that are selected for review to determine whether specific reserves are required include both loans over a specified dollar limit as well as loans where the internal credit rating is below a predetermined classification. Loans subject to this review process generally include commercial and agricultural loans, real estate commercial and real estate construction loans. Specific reserves for these loans are determined in accordance with the provisions of Financial Accounting Standards Board Statements 114 and 118, "Accounting by Creditors for Impairment of a Loan." Consumer and other retail loan reserve allocations are based upon the evaluation of pools or groups of such loans. The portion of the reserve based on historical loan loss experience is determined statistically using a loss migration analysis that examines loss experience and the related internal rating of loans charged off. The loss migration analysis is performed quarterly and loss factors are per iodically updated based on actual experience. The portion of the reserve based on general economic conditions and other factors is considered the unallocated portion of the reserve. This portion is determined based upon general economic conditions and involves a higher degree of subjectivity in its determination. This segment of the reserve considers risk factors that may not have manifested themselves in First Midwest's historical loss experience which is used to determine the allocated component of the reserve.

The distribution of the loan portfolio is presented in Note 3 to the interim consolidated financial statement located on page 7. The loan portfolio consists predominantly of loans originated by First Midwest from its primary markets and generally represents credit extension to multi-relationship customers.

Capital

Capital Measurements

The table below compares First Midwest's capital structure to the minimum capital ratios required by its primary regulator, the Federal Reserve Board ("FRB"). Both First Midwest and its bank subsidiary First Midwest Bank ("FMB") are subject to the minimum capital ratios defined by banking regulators pursuant to the FDIC Improvement Act ("FDICIA") and have capital measurements in excess of the levels required by their bank regulatory authority to be considered "well-capitalized," which is the highest capital category established under the FDICIA.

		Actual		Capital Required
					Minimum
				Minimum	Well-
		First		Required	Capitalized
		Midwest	FMB	FRB	FDICIA
As of June 30, 2001:
	Tier I capital to risk-based assets	10.69%	9.19%	4.00%	6.00%
	Total capital to risk-based assets	11.83%	10.30%	8.00%	10.00%
	Leverage ratio	7.58%	6.74%	3.00%	5.00%
As of December 31, 2000:
	Tier I capital to risk-based assets	10.51%	9.57%	4.00%	6.00%
	Total capital to risk-based assets	11.61%	10.67%	8.00%	10.00%
	Leverage ratio	7.36%	6.67%	3.00%	5.00%

Dividends

As a result of improved performance from operations as well as First Midwest's perceived future prospects, the Board of Directors has increased the quarterly dividend every year since 1993. The following table summarizes the dividend increases declared during the years 1994 through 2000:

	Quarterly Rate
Date	Per Share		% Increase
November 2000	$	0.200	11%
November 1999		0.180	13%
November 1998		0.160	7%
November 1997		0.150	13%
November 1996		0.133	18%
February 1996		0.113	13%
February 1995		0.100	15%
February 1994		0.087	13%

Capital Management

First Midwest has continued to follow a policy of retaining sufficient capital to support growth in total assets and returning excess capital to shareholders in the form of dividends and through common stock repurchases, with the latter resulting in an increase in the percentage ownership of the Company by existing shareholders.

The following table summarizes the shares repurchased by First Midwest for the prior three calendar years and for the current year-to-date period:

	Quarters Ended				Years Ended December 31,
	6/30/01		3/31/01		2000		1999		1998
Shares repurchased	852		187		485		2,669		1,275
Cost	$	24,343	$	5,117	$	12,195	$	70,043	$	35,434

As of June 30, 2001, First Midwest had 845 shares remaining to be repurchased under its current share repurchase authorization.

FORWARD LOOKING STATEMENTS

Statements made in the preceding "Management's Discussion and Analysis of Financial Condition and Results of Operations" section which are not purely historical are forward-looking statements with respect to the goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and business of First Midwest, including, without limitation, (i) loan and deposit growth, market interest rates on net interest income and net interest margin, wholesale funding sources, provision and reserve for loan losses, nonperforming loan levels and net charge-offs, collateral value and economic conditions, noninterest income and expenses, diluted earnings per share growth rates for 2001, and dividends to shareholders, and (ii) statements preceded by, followed by or that include the words "may", "would", "could", "should", "expects", "projects", "anticipates", "believes", "estimates", "plans", "intends", "targets" or similar expressions.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond First Midwest's control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following, in addition to those contained in First Midwest's reports on file with the Securities and Exchange Commission: general economic or industry conditions, nationally and/or in the communities in which First Midwest conducts business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, deposit flows, cost of funds, demand for loan products, demand for financial services, competition, changes in quality or composition of First Midwest's loan and investment portfolios, assumptions used to evaluate the appropriate level of the reserve for loan losses, the impact of future earnings performance and capital levels on dividends declared by the Board of Directors , changes in accounting principals, policies or guidelines, other economic, competitive, governmental, regulatory and technical factors affecting First Midwest's operations, products, services and prices.

Accordingly, results actually achieved may differ materially from expected results in these statements. Forward-looking statements speak only as of the date they are made. First Midwest does not undertake, and specifically disclaims, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statement.

PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits - See Exhibit Index appearing on page 22.

(b) Forms 8-K and 8-K/A -

On April 18, 2001, First Midwest filed a report on Form 8-K announcing its earnings results for the quarter ended March 31, 2001.

On April 18, 2001, First Midwest filed a report on From 8-K announcing the completion of the 3 million share repurchase authorization approved by its Board of Directors in February 1999.

On April 30, 2001, First Midwest filed a report on Form 8-K to announce the approval of all matters put forth to its shareholders at its Annual Meeting on April 25.

On April 30, 2001, First Midwest filed a report on Form 8-K/A to amend the previously reported voting results.

On May 16, 2001, First Midwest filed a report on Form 8-K announcing the declaration of a quarterly cash dividend on its common stock of $0.20 per share.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

First Midwest Bancorp, Inc.

/s/ DONALD J. SWISTOWICZ

Donald J. Swistowicz
Executive Vice President*

Date: August 14, 2001

* Duly authorized to sign on behalf of the Registrant.

EXHIBIT INDEX

Exhibit Number	Description of Documents	Sequential Page Number
15	Acknowledgment of Ernst & Young LLP	23
99	Independent Accountant's Review Report	24

EX-10

Exhibit 15

ACKNOWLEDGEMENT OF INDEPENDENT AUDITORS

The Board of Directors
First Midwest Bancorp, Inc.:

We are aware of the incorporation by reference in the following Registration Statements of our report dated May 14, 2001 and August 10, 2001 relating to the unaudited consolidated interim financial statements of First Midwest Bancorp, Inc. that are included in its Form 10-Q for the quarters ended March 31, 2001 and June 30 2001:

o Registration Statement (Form S-3 No. 33-20439) pertaining to the First Midwest Bancorp, Inc. Dividend Reinvestment and Stock Purchase Plan

o Registration Statement (Form S-8 No. 33-25136) pertaining to the First Midwest Bancorp, Inc Savings and Profit Sharing Plan

o Registration Statement (Form S-8 No. 33-42980) pertaining to the First Midwest Bancorp, Inc. 1989 Omnibus Stock and Incentive Plan

o Registration Statement (Form S-8 No. 333-42273) pertaining to the First Midwest Bancorp, Inc. 1989 Omnibus Stock and Incentive Plan

o Registration Statement (Form S-8 No. 333-61090) pertaining to the First Midwest Bancorp, Inc. 1989 Omnibus Stock and Incentive Plan

o Registration Statement (Form S-8 No. 333-50140) pertaining to the First Midwest Bancorp, Inc. Non-employee Director Stock Option Plan

o Registration Statement (Form S-8 No. 333-63095) pertaining to the First Midwest Bancorp, Inc. Non-employee Director Stock Option Plan

o Registration Statement (Form S-8 No. 333-63097) pertaining to the First Midwest Bancorp, Inc. Nonqualified Retirement Plan

/s/ Ernst & Young, LLP

Chicago, Illinois

August 10, 2001

EX-99

Exhibit 99

Independent Accountants' Review Report

The Board of Directors
First Midwest Bancorp, Inc.:

We have reviewed the accompanying consolidated statements of condition of First Midwest Bancorp, Inc. and subsidiaries as of June 30, 2001, and the related consolidated statements of income for the three-month and six-month periods ended June 30, 2001 and 2000, and the consolidated statements of cash flows for the six-month periods ended June 30, 2001 and 2000. These financial statements are the responsibility of the Company's management.

We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States, which will be performed for the full year with the objective of expressing an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying consolidated financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States.

We have previously audited, in accordance with auditing standards generally accepted in the United States, the consolidated statement of condition of First Midwest Bancorp, Inc. as of December 31, 2000, and the related consolidated statements of income, shareholders' equity, and cash flows for the year then ended (not presented herein) and in our report dated January 16, 2001, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated statement of condition as of December 31, 2000, is fairly stated, in all material respects, in relation to the consolidated statement of condition from which it has been derived.

/s/ Ernst & Young, LLP

Chicago, Illinois

August 10, 2001