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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.

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.

The Fool owns shares of Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Travis Hoium

Travis Hoium has been writing for since July 2010 and covers the solar industry, renewable energy, and gaming stocks among other things.

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Related Tickers

5/5/2016 4:00 PM
FMBI $17.66 Down -0.23 +0.00%
First Midwest Banc… CAPS Rating: No stars
USB $41.65 Down -0.07 +0.00%
US Bancorp CAPS Rating: ****
WFC $48.96 Up +0.02 +0.00%
Wells Fargo CAPS Rating: *****