First Midwest Bank, which has grown into one of the area’s biggest banks without a presence in downtown Chicago, confirmed that it plans to set up shop for the first time in the city’s central business district.
The bank told the Tribune that it plans to open an office in a LaSalle Street building in the Loop in early April. It’s not divulging the address until a lease for the property, which has 3,500 to 4,000 square feet, is signed, which should occur “shortly,” a bank spokesman said. The office will handle commercial banking, cash management and trust services, he said.
In a note to clients on Monday about his recent meetings with First Midwest management, Oppenheimer & Co. analyst Terry McEvoy said that “a strategic move into downtown Chicago, an untapped market for the company, should be a positive.”
Also, the $8.15 billion-asset bank, which is headquartered in Itasca and has 98 branches in 65 communities, on February 22 posted a help-wanted listing for a commercial banking officer that “will be based at the central business district facility located in downtown Chicago.” The office will have five to 10 staffers, a First Midwest bank spokesman said.
At a March 1 presentation at a Keefe Bruyette Woods banking conference, First Midwest noted that it plans to expand its market presence in the central business district. The bank’s Web site currently lists only one Chicago branch, at 8501 W. Higgins Road.
McEvoy later told the Tribune on Monday that he expects First Midwest’s plans for downtown Chicago to be “very small,” like “dipping the toe in the water.”
The First Midwest “locations would complement their suburban branches so a customer that works downtown but lives in the suburbs has a branch,” said McEvoy, who believes that First Midwest’s initial focus downtown will be on commercial banking.
Wintrust Financial Corp., which runs 15 community banks, set up a downtown presence last year.
First Midwest has bought three failed banks in Illinois since late 2009.
“Bank failures should continue in the Chicago marketplace, and we see First Midwest looking at these deals,” Oppenheimer’s McEvoy said.
But eventually the flow of failed-bank deals, which come with financial assistance from the Federal Deposit Insurance Corp.,will dry up, and more traditional acquisitions and mergers will get done. At that point, it’s First Midwest that could get scooped up, McEvoy said in his note.
“As the wave of bank failures passes, open bank deal flow will pick up and First Midwest could be viewed as a target once again,” McEvoy wrote.
McEvoy said that First Midwest is seeing little demand from borrowers for loans, a trend that is consistent with what he has been hearing from other banks.