The following brief description of the First Midwest Bancorp, Inc. Savings and Profit Sharing Plan ("Plan") is provided for general information purposes. The Plan document provides more complete information about the Plan.

First Midwest Bancorp, Inc. ("Company") established the Plan effective December 31, 1984. The Plan is a defined-contribution benefit plan covering substantially all full-time and part-time Company employees meeting certain age and length-of-service criteria.

The Company's contribution to the Plan during 1999 and 1998 included a contribution of 2% of eligible participant compensation and a discretionary contribution of up to an additional 6% of eligible participant compensation. Company contributions are based upon performance of all subsidiaries and the overall consolidated performance of the Company. Participants are fully vested in Company contributions and participants become vested in Company discretionary contributions after seven years.

Contributions by participants of up to 10% of eligible compensation are allowed on a tax deferred basis under the provisions of Internal Revenue Code (the Code) section 401(k), subject to certain limitations. Participant contributions (and earnings thereon) are fully vested.

Participants may direct their contributions as well as Company contributions and Company discretionary contributions to any of the investment options offered by the Plan.

Company contributions are reduced by any forfeitures during the year.

A trust fund was established for the purpose of holding and investing Plan assets in accordance with the terms of the Trust Agreement between the Company and the Trustee, First Midwest Trust Company, N.A., (Trustee), a subsidiary of the Company and a party-in-interest.

Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their vested account balance. Loan terms range from 0-60 months or up to 25 years for the purchase of a primary residence. The loans are secured by the balance in

the participant's account and bear interest at a rate commensurate with local prevailing rates as determined quarterly by the plan administrator. Principal and interest is paid ratably through monthly payroll deductions.

The accompanying financial statements are prepared under the accrual basis of accounting in accordance with generally accepted accounting principles.

Investments are reported at fair value which, except for short-term investments and loans to participants, is determined using quoted market prices. Short-term investments and loans to participants are reported at cost and unpaid principal balance, respectively, which approximates market.

Purchases and sales of securities are recorded on a trade-date basis and are accounted for using the specific identification method. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Net appreciation (depreciation) in fair value of investments includes realized and unrealized investment gains and losses.

Administrative expenses of the Plan are paid from the trust fund, to the extent they are not paid by the Company. All administrative expenses were paid by the Company for the years ended December 31, 1999 and 1998.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Certain amounts in the 1998 statements have been reclassified to conform with the 1999 presentation.

During 1999 and 1998, the Plan's investments (including investments bought, sold, and held during the year) appreciated (depreciated) in fair value by:


Dividends received by the Plan on First Midwest common stock during 1999 and 1998 amounted to $1,107,513 and $875,642, respectively. Net appreciation on First Midwest Common Trust Funds amounted to $3,356,450 and $3,458,162, respectively.

As of December 31, 1999 and 1998, the Plan held the following investments that comprised 5% or more of the Plan's net assets:

The Plan has received a determination letter from the Internal Revenue Service, dated June 22, 1996, stating that the Plan is qualified under the Code, as amended and, therefore, the related trust is exempt from taxation. The Plan has been amended and restated since the previous determination letter. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. Management believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, income of the related trust is exempt from tax under Section 501(a) of the Code.

The Company is not aware of any activity or transactions that may adversely affect the qualified status of the Plan.

Although it has not expressed any intent to do so, the Company has the right to terminate the Plan at any time. In the event of Plan termination, participants become fully vested in Company contributions.

The financial information provided in the Plan's Form 5500 includes an accrual for benefits that have been reported by participants but remains unpaid. This amount was $1,275,775 for 1999 and $782,736 for 1998, respectively. In accordance with generally accepted accounting principles, this liability is not recognized in the accompanying financial statements.

On July 1, 1998, the Company acquired Heritage Financial Services, Incorporated whose principal subsidiary was Heritage Bank. The Heritage Financial Services, Incorporated Profit Sharing Plan ("Heritage Plan") was merged into the Plan on January 1, 1999. Assets of the Heritage Plan have been transferred to the Plan, and are allocated to participants and beneficiaries in the same manner and amounts under the Plan as prescribed by ERISA.

On October 1, 1997, the Company acquired SparBank, Incorporated whose principal subsidiary was McHenry State Bank. The McHenry State Bank Profit Sharing and Savings Plan and Trust ("McHenry Plan") was merged into the Plan on January 1, 1998. Assets of the McHenry Plan have been transferred to the Plan and are allocated to participants and beneficiaries in the same manner and amount under the Plan as prescribed by ERISA.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Committee of the First Midwest Bancorp, Inc. Savings and Profit Sharing Plan has caused this annual report to be signed by the undersigned thereunto duly authorized.