First Midwest Bancorp Shares Plunged: What You Need to Know (FMBI, USB, WFC)

First Midwest Bancorp Shares Plunged: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of First Midwest Bancorp (Nasdaq: FMBI ) fell 14% at the market open today after the company released earnings.

So what: The fourth quarter was quite the disappointment, coming in at a $0.41 loss versus the $0.03 loss analysts expected. Underperforming land and construction loans were the main reasons for the large loss.

Now what: Regional banks are seeing a much more drawn out recovery than their larger rivals, and First Midwest Bancorp's results are showing the weakness. Instead of speculating on a regional bank like this, I will stick with bigger rivals who have returned to profitability. My picks, Wells Fargo (NYSE: WFC ) and US Bancorp (NYSE: USB ) , are both solidly profitable, pay a dividend, and trade at a forward price-to-earnings ratio around 10.

Interested in more info on First Midwest Bancorp? Add it to your watchlist.

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Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

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