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Filed Pursuant to Rule 424(b)(3)
Registration No. 333-226506

LOGO

August 23, 2018

Dear Stockholders of Northern States Financial Corporation:

         On June 6, 2018, First Midwest Bancorp, Inc. ("First Midwest") and Northern States Financial Corporation ("Northern States") entered into an Agreement and Plan of Merger ("merger agreement") that provides for the combination of the two companies. Under the merger agreement, Northern States will merge with and into First Midwest, with First Midwest being the surviving company (the "merger"). Following the merger at such time as First Midwest may determine, NorStates Bank, an Illinois state chartered bank and a wholly owned subsidiary of Northern States, will merge with and into First Midwest Bank, an Illinois state chartered bank and a wholly owned subsidiary of First Midwest, with First Midwest Bank being the surviving bank (the "bank merger"). Following the bank merger, First Midwest Bank will continue its corporate existence as a commercial bank organized under the laws of the State of Illinois.

         Upon completion of the merger, each holder of shares of Northern States common stock, par value $0.01 per share ("Northern States common stock"), will receive a fraction of a share (the "exchange ratio") of First Midwest common stock, par value $0.01 per share ("First Midwest common stock"), in exchange for each share of Northern States common stock held immediately prior to the completion of the merger (the "merger consideration"), except in certain circumstances and subject to conditions described in the accompanying proxy statement/prospectus, calculated as follows:

    if the per share volume weighted average price of First Midwest common stock on the Nasdaq Stock Market from 9:30 a.m. to 4:00 p.m., Eastern Time, for the 20 consecutive Nasdaq trading days ending on and including the fifth Nasdaq trading day immediately preceding (but not including) the closing date of the merger (the "Average First Midwest Stock Price") is greater than $26.49, the exchange ratio shall equal the quotient, rounded down to the nearest fourth decimal place, of 0.9775 divided by the Average First Midwest Stock Price, which effectively caps the maximum per share value of the merger consideration you may receive at $0.9775 per share of Northern States common stock;

    if the Average First Midwest Stock Price is greater than or equal to $22.86 and equal to or less than $26.49, the exchange ratio shall equal 0.0369;

    if the Average First Midwest Stock Price is equal to or greater than $20.31 and less than $22.86, the exchange ratio shall equal the quotient, rounded down to the nearest fourth decimal place, of 0.8435 divided by the Average First Midwest Stock Price; or

    if the Average First Midwest Stock Price is less than $20.31 (subject to Northern States' right to terminate the merger agreement and First Midwest's top-up right as described in the accompanying prospectus/proxy statement), the exchange ratio shall equal 0.0415.

         All unvested Northern States restricted stock awards outstanding immediately prior to the merger will become fully vested upon completion of the merger, and the holder thereof shall be entitled to receive the same merger consideration for the shares of Northern States common stock subject to such award as all other holders of Northern States common stock.

         Based on the number of shares of Northern States common stock outstanding on August 20, 2018, we expect that the payment of the merger consideration will require First Midwest to issue approximately 3,359,801 shares of First Midwest common stock in connection with the merger. Based on the 20-day volume weighted average price of First Midwest common stock of $26.0373 on June 6, 2018 (the last trading day before the announcement of the merger), each share of Northern States common stock exchanged for 0.0369 shares of First Midwest common stock would have a value of $0.9607, with a proposed aggregate value of approximately $88.7 million. Based on the 20-day volume weighted average price of First Midwest common stock of $26.7862 on August 20, 2018, each share of Northern States common stock exchanged for 0.0364 shares of First Midwest common stock would have a value of $0.975, with a proposed aggregate value of approximately $90.0 million. In addition, based on the number of issued and outstanding shares of First Midwest common stock and Northern States common stock as of August 20, 2018, and based on the exchange ratio of 0.0364, holders of shares of Northern States common stock as of immediately prior to the closing of the merger will hold, in the aggregate, approximately 3.2% of the issued and outstanding shares of First Midwest common stock immediately following the effectiveness of the merger.

         First Midwest common stock trades on the Nasdaq Stock Market under the symbol "FMBI." The following table shows the implied value of the merger consideration that would be received by Northern States stockholders in exchange for each share of Northern States common stock if the per share price of First Midwest common stock was $26.0373, which was the per share volume weighted average price of First Midwest common stock on the Nasdaq Stock Market for the 20 trading days ending on and including June 6, 2018, the last trading day before the announcement of the merger,


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and if such price was $26.7862, which was the per share volume weighted average price of First Midwest common stock on the Nasdaq Stock Market for the 20 trading days ending on and including August 20, 2018.

 
  20-Day Volume
Weighted Average
Price of First
Midwest
Common
Stock on Nasdaq
  Exchange
Ratio
  Total
Consideration Per
Share of Northern States
Common Stock*
 

June 6, 2018

  $ 26.0373     0.0369   $ 0.9607  

August 20, 2018

  $ 26.7862     0.0364   $ 0.9750  

*
Computed as the 20-day volume weighted average price of First Midwest common stock on the Nasdaq Stock Market ending on the date specified multiplied by the exchange ratio. The information presented does not reflect the actual value of the merger consideration that will be received by holders of Northern States common stock in the merger. The exchange ratio is subject to adjustment as described in the accompanying proxy statement/prospectus. The value of the merger consideration at the closing of the merger will be based on the price of First Midwest common stock on the date the merger is completed. The information presented above solely illustrates the implied value of the merger consideration based on the 20-day volume weighted average price of First Midwest common stock on the dates set forth above.

         Northern States will hold a special meeting of its stockholders in connection with the merger. Holders of Northern States common stock will be asked to vote to approve the merger agreement and the transactions contemplated thereby, as described in the accompanying proxy statement/prospectus. Approval of the merger agreement and the transactions contemplated thereby requires the affirmative vote of the holders of at least a majority of the outstanding shares of Northern States common stock. All of the directors of Northern States, collectively holding an aggregate 6,875,016 shares of Northern States common stock (or approximately 7.4% of the outstanding shares) as of the Northern States record date, have signed voting agreements with First Midwest agreeing to vote for approval of the merger agreement and the transactions contemplated thereby.

         The special meeting of holders of Northern States common stock will be held at the headquarters of Northern States Financial Corporation, located at 1601 North Lewis Avenue, Waukegan, Illinois 60085 on October 4, 2018, at 4:30 p.m. Central Time.

         Northern States' board of directors unanimously recommends that holders of Northern States common stock vote "FOR" the approval of the merger agreement and the transactions contemplated thereby and "FOR" one or more adjournments of the Northern States special meeting, including adjournments to permit the further solicitation of proxies in favor of the foregoing proposals.

         We cannot complete the merger without the approval of the merger agreement and the transactions contemplated thereby by holders of Northern States common stock. It is important that your shares be represented and voted regardless of the size of your holdings. Whether or not you plan to attend the special meeting of holders of Northern States common stock, we urge you to submit a proxy to have your shares voted in advance of the special meeting by using one of the methods described in the accompanying proxy statement/prospectus.

         The accompanying proxy statement/prospectus provides important information regarding the special meeting and a detailed description of the merger agreement, the merger, certain related transactions and agreements and the matters to be presented at the special meeting. We encourage you to read the entire accompanying proxy statement/prospectus carefully (including any documents incorporated therein by reference). Please pay particular attention to "Risk Factors" beginning on page 19 for a discussion of the risks relating to the proposed merger.

         We hope to see you at the special meeting and look forward to the successful completion of the merger.

 
   
   
        Sincerely,

 

 

 

 

GRAPHIC
        Scott M. Yelvington
President, Chief Executive Officer and Director
Northern States Financial Corporation

         Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved the securities to be issued in the merger or determined if this document is accurate or adequate. It is illegal to tell you otherwise. The securities to be issued in the merger are not savings or deposit accounts and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.

         The date of the accompanying proxy statement/prospectus is August 23, 2018, and it is first being mailed or otherwise delivered to the stockholders of Northern States on or about August 30, 2018.


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LOGO

1601 North Lewis Avenue
Waukegan, Illinois 60085

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON OCTOBER 4, 2018

To the Stockholders of Northern States Financial Corporation:

        NOTICE IS HEREBY GIVEN that a special meeting of the holders of common stock of Northern States Financial Corporation, a Delaware corporation ("Northern States"), will be held at the headquarters of Northern States Financial Corporation, located at 1601 North Lewis Avenue, Waukegan, Illinois 60085 on October 4, 2018, at 4:30 p.m. Central Time (the "Northern States special meeting"), for the purpose of considering and voting upon the following matters:

            1.     Approval by the holders of Northern States common stock of the Agreement and Plan of Merger, dated as of June 6, 2018, a copy of which is attached as Appendix A to the accompanying proxy statement/prospectus (the "merger agreement"), by and between First Midwest Bancorp, Inc. ("First Midwest") and Northern States, and the transactions contemplated thereby (the "merger proposal"), including the merger of Northern States with and into First Midwest, with First Midwest being the surviving company (the "merger");

            2.     Approval by the holders of Northern States common stock of one or more adjournments of the Northern States special meeting, if determined necessary and advisable, including adjournments to permit the further solicitation of proxies in favor of the merger proposal (the "Northern States adjournment proposal"); and

            3.     Transaction of such other business as may properly come before the Northern States special meeting and any adjournments or postponements thereof.

        We have fixed the close of business on August 20, 2018, as the record date for determining those stockholders entitled to notice of and to vote at the Northern States special meeting and any adjournments of the Northern States special meeting. Only holders of record of Northern States common stock at the close of business on that date are entitled to notice of and to vote on the proposals at the Northern States special meeting and any adjournments of the Northern States special meeting. Approval of the merger proposal requires the affirmative vote of a majority of the outstanding shares of Northern States common stock. As a result, abstentions and broker non-votes will have the same effect as votes against approval of the merger proposal. Approval of the Northern States adjournment proposal requires the affirmative vote of a majority of the shares of Northern States common stock present in person or represented by proxy. Abstentions will have the same effect as votes against approval of the Northern States adjournment proposal, and broker non-votes will have no effect on the approval of the Northern States adjournment proposal assuming a quorum has been established. All of the directors of Northern States, collectively holding an aggregate 6,875,016 shares of Northern States common stock (or approximately 7.4% of the outstanding shares) as of the Northern States record date, have signed voting agreements with First Midwest agreeing to vote for approval of the merger agreement and the transactions contemplated thereby.

        If you wish to attend the Northern States special meeting and your shares are held in the name of a bank, broker, trustee or other nominee, you must bring with you an account statement showing that you owned shares of Northern States common stock as of the record date and a "legal proxy" form from the bank, broker, trustee or other nominee to confirm your beneficial ownership of the shares.

        Under Delaware law, Northern States stockholders who do not vote in favor of the merger proposal will have the right to seek appraisal of the fair value of their shares of Northern States common stock as determined by the Delaware Court of Chancery if the merger of Northern States with


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and into First Midwest is completed, but only if they submit a written demand for such an appraisal prior to the vote on the adoption of the merger proposal and comply with the other Delaware law procedures explained in the accompanying proxy statement/prospectus. Northern States stockholders who do not vote in favor of the merger proposal and who submit a written demand for such an appraisal prior to the vote on the adoption of the merger proposal and comply with the other Delaware law procedures will not receive the merger consideration.

        Your vote is very important. Whether or not you plan to attend the Northern States special meeting in person, please complete, date, sign and return the enclosed proxy card in the enclosed envelope to ensure that your shares of Northern States common stock will be represented at the Northern States special meeting if you are unable to attend.

        The board of directors of Northern States has unanimously approved the merger agreement and the merger, has determined that the merger agreement and the transactions contemplated thereby, including the merger, are advisable, fair to and in the best interests of Northern States and its stockholders, as well as Northern States' other respective constituencies, and unanimously recommends that holders of Northern States common stock vote "FOR" the merger proposal and vote "FOR" the Northern States adjournment proposal.

        We encourage you to read the entire accompanying proxy statement/prospectus carefully (including any documents incorporated therein by reference). Please pay particular attention to "Risk Factors" beginning on page 19 for a discussion of the risks relating to the proposed merger.

  By Order of the Board of Directors,

 

 

GRAPHIC

  Kerry J. Biegay
Vice President and Secretary

Waukegan, Illinois
August 23, 2018


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ADDITIONAL INFORMATION

        This proxy statement/prospectus incorporates by reference important business and financial information about First Midwest from documents filed with the Securities and Exchange Commission ("SEC") that are not included in or delivered with this proxy statement/prospectus. You can obtain any of the documents filed with or furnished to the SEC by First Midwest at no cost from the SEC's website maintained at http://www.sec.gov. You may also request copies of these documents, including documents incorporated by reference into this proxy statement/prospectus, at no cost by contacting First Midwest in writing at the address or by telephone as specified below:

First Midwest Bancorp, Inc.
Attention: Corporate Secretary
8750 West Bryn Mawr Avenue, Suite 1300
Chicago, Illinois 60631
(708) 831-7563

        You will not be charged for any of these documents that you request. In order for you to receive timely delivery of the documents before the Northern States special meeting, you must request them no later than September 28, 2018.

        See "Where You Can Find More Information" on page 92 of this proxy statement/prospectus.


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ABOUT THIS PROXY STATEMENT/PROSPECTUS

        This proxy statement/prospectus, which forms part of a registration statement on Form S-4 filed with the SEC, constitutes a prospectus of First Midwest under Section 5 of the Securities Act of 1933, as amended (the "Securities Act"), with respect to the shares of First Midwest common stock to be issued to stockholders of Northern States as consideration in the merger of Northern States with and into First Midwest, as more fully described herein. This proxy statement/prospectus also constitutes a proxy statement for Northern States. In addition, it constitutes a notice of meeting with respect to the special meeting of Northern States stockholders.

        You should rely only on the information contained in, or incorporated by reference into, this proxy statement/prospectus. No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this proxy statement/prospectus. This proxy statement/prospectus is dated August 23, 2018, and you should assume that the information in this proxy statement/prospectus is accurate only as of such date. You should assume that the information incorporated by reference into this proxy statement/prospectus is accurate only as of the date of such incorporated document. Neither the mailing of this proxy statement/prospectus to Northern States stockholders nor the issuance by First Midwest of shares of First Midwest common stock in connection with the merger will create any implication to the contrary.

        This document does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.


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SUMMARY

    1  

SELECTED CONSOLIDATED FINANCIAL DATA OF FIRST MIDWEST

   
13
 

SELECTED CONSOLIDATED FINANCIAL DATA OF NORTHERN STATES

   
15
 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

   
17
 

RISK FACTORS

   
19
 

NORTHERN STATES SPECIAL MEETING

   
24
 

THE MERGER

   
28
 

Terms of the Merger

   
28
 

Background of the Merger

   
29
 

First Midwest's Reasons for the Merger

   
33
 

Northern States' Reasons for the Merger and Recommendation of the Board of Northern States

   
35
 

Opinion of Northern States' Financial Advisor

   
37
 

Material Federal Income Tax Consequences of the Merger

   
43
 

Accounting Treatment

   
47
 

Interests of Certain Persons in the Merger

   
48
 

THE MERGER AGREEMENT

   
52
 

Structure

   
52
 

Merger Consideration

   
52
 

Conversion of Shares; Exchange of Certificates; Fractional Shares

   
53
 

Effective Time

   
54
 

Representations and Warranties

   
55
 

Conduct of Business Pending the Merger

   
56
 

Acquisition Proposals by Third Parties

   
58
 

Other Agreements

   
60
 

Conditions to Completion of the Merger

   
62
 

Termination of the Merger Agreement

   
64
 

Waiver and Amendment of the Merger Agreement

   
66
 

Regulatory Approvals Required for the Mergers

   
67
 

Dividends

   
68
 

Stock Exchange Listing

   
68
 

Restrictions on Resales by Affiliates

   
68
 

Dissenters' Rights of Appraisal of Holders of Northern States Common Stock

   
68
 

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SUMMARY

        This summary highlights selected information from this proxy statement/prospectus and may not contain all the information that is important to you. We urge you to read carefully this entire document, and the documents referenced herein, for a more complete understanding of the merger between First Midwest and Northern States. In addition, we incorporate by reference into this document important business and financial information about First Midwest. You may obtain the information incorporated by reference in this document without charge by following the instructions in the section entitled "Where You Can Find More Information." Each item in this summary includes a page reference directing you to a more complete description of that item.

        Unless the context otherwise requires, references in this proxy statement/prospectus to "First Midwest" refer to First Midwest Bancorp, Inc., a Delaware corporation; references to "First Midwest Bank" refer to First Midwest Bank, an Illinois state chartered bank and wholly owned subsidiary of First Midwest; references to "Northern States" refer to Northern States Financial Corporation, a Delaware corporation; references to "NorStates Bank" refer to NorStates Bank, an Illinois state chartered bank and wholly owned subsidiary of Northern States; and references to "we," "our" or "us" refer to First Midwest and Northern States.

We Propose a Merger of First Midwest and Northern States (Page 28)

        We propose that Northern States will merge with and into First Midwest, with First Midwest being the surviving company (the "merger"). As a result of the merger, the separate existence of Northern States will terminate. Following the merger at such time as First Midwest may determine, Northern States' wholly owned bank subsidiary, NorStates Bank, will merge with and into First Midwest's wholly owned bank subsidiary, First Midwest Bank, with First Midwest Bank being the surviving bank (the "bank merger"). Following the bank merger, First Midwest Bank will continue its corporate existence as a commercial bank organized under the laws of the State of Illinois. We expect to complete the merger and the bank merger in the fourth quarter of 2018, although delays may occur.

Special Meeting of Northern States (Page 24)

        Northern States plans to hold its special meeting of stockholders at the headquarters of Northern States Financial Corporation, located at 1601 North Lewis Avenue, Waukegan, Illinois 60085, on October 4, 2018 at 4:30 p.m. Central Time (the "Northern States special meeting"). At the Northern States special meeting, holders of Northern States common stock, par value $0.01 per share ("Northern States common stock"), will be asked to approve the merger agreement and the transactions contemplated thereby, including the merger (the "merger proposal").

        You can vote at the Northern States special meeting to approve the merger proposal if you owned Northern States common stock at the close of business on August 20, 2018 (the "Northern States record date"). As of that date, there were 92,302,244 shares of Northern States common stock outstanding and entitled to vote. A holder of Northern States common stock can cast one vote for each share of Northern States common stock owned on that date.

Northern States' Board Unanimously Recommends That Holders of Northern States Common Stock Vote "FOR" the Merger Proposal (Page 35)

        Northern States' board of directors (i) believes that the Agreement and Plan of Merger, dated as of June 6, 2018, between Northern States and First Midwest (the "merger agreement") and the transactions contemplated thereby are advisable, fair to and in the best interests of Northern States and its stockholders, as well as Northern States' other respective constituencies, (ii) has unanimously approved and adopted the merger agreement and the transactions contemplated thereby, and

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(iii) unanimously recommends that holders of Northern States common stock vote "FOR" the merger proposal.

        All of the directors of Northern States, collectively holding an aggregate 6,875,016 shares of Northern States common stock (or approximately 7.4% of the outstanding shares) as of the Northern States record date, have signed voting agreements with First Midwest agreeing to vote for approval of the merger agreement and the transactions contemplated thereby.

Northern States Stockholders Will Receive Shares of First Midwest Common Stock in the Merger (Page 28)

        Upon completion of the merger, each holder of Northern States common stock will receive a fraction of a share (the "exchange ratio") of First Midwest common stock, par value $0.01 per share ("First Midwest common stock"), in exchange for each share of Northern States common stock held immediately prior to the completion of the merger (the "merger consideration"), except in certain circumstances and subject to adjustment as described in this proxy statement/prospectus, calculated as follows:

    if the per share volume weighted average price of First Midwest common stock on the Nasdaq Stock Market from 9:30 a.m. to 4:00 p.m., Eastern Time, for the 20 consecutive Nasdaq trading days ending on and including the fifth Nasdaq trading day immediately preceding (but not including) the closing date of the merger (the "Average First Midwest Stock Price", and such date, the "Determination Date") is greater than $26.49, the exchange ratio shall equal the quotient, rounded down to the nearest fourth decimal place, of 0.9775 divided by the Average First Midwest Stock Price, which effectively caps the maximum per share value of the merger consideration you may receive at $0.9775 per share of Northern States common stock;

    if the Average First Midwest Stock Price is greater than or equal to $22.86 and equal to or less than $26.49, the exchange ratio shall equal 0.0369;

    if the Average First Midwest Stock Price is equal to or greater than $20.31 and less than $22.86, the exchange ratio shall equal the quotient, rounded down to the nearest fourth decimal place, of 0.8435 divided by the Average First Midwest Stock Price; or

    if the Average First Midwest Stock Price is less than $20.31 (subject to Northern States' right to terminate the merger agreement and First Midwest's top-up right as described below under "The Merger Agreement—Termination of the Merger Agreement"), the exchange ratio shall equal 0.0415.

        The merger consideration may be subject to adjustment if certain environmental conditions exist with respect to Northern States' real property acquired after June 6, 2018 (if any) and/or title defects exist with respect to any of Northern States' real property and the total cost to remediate and/or cure such conditions or defects (the "real property adjustment amount") is greater than $100,000. In that case, the exchange ratio will be reduced by an amount equal to the result of: (i) the real property adjustment amount, divided by (ii) the number of outstanding shares of Northern States common stock, divided by (iii) the per share volume weighted average price of First Midwest common stock on the Nasdaq Stock Market from 9:30 a.m. to 4:00 p.m., Eastern Time, on the trading day immediately preceding the closing date of the merger.

        Instead of fractional shares of First Midwest common stock, Northern States stockholders will receive cash for any fractional shares based on the per share volume weighted average price of the First Midwest common stock on the Nasdaq Stock Market from 9:30 a.m. to 4:00 p.m., Eastern Time, on the trading day immediately preceding the closing date of the merger.

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        The following table shows the implied value of the merger consideration that would be received by Northern States stockholders in exchange for each share of Northern States common stock if the per share price of a share of First Midwest common stock was $26.0373, which was the per share volume weighted average price of First Midwest common stock on the Nasdaq Stock Market for the 20 trading days ending on and including June 6, 2018, the last trading day before the announcement of the merger, and if such price was $26.7862, which was the per share volume weighted average price of First Midwest common stock on the Nasdaq Stock Market for the 20 trading days ending on and including August 20, 2018.

 
  20-Day
Volume
Weighted
Average
Price of First
Midwest
Common
Stock on
Nasdaq
  Exchange
Ratio
  Total
Consideration
Per Share
of Northern
States
Common
Stock*
 

June 6, 2018

  $ 26.0373     0.0369   $ 0.9607  

August 20, 2018

  $ 26.7862     0.0364   $ 0.9750  

*
Computed as the 20-day volume weighted average price of First Midwest common stock on the Nasdaq Stock Market ending on the date specified multiplied by the exchange ratio. The information presented does not reflect the actual value of the merger consideration that will be received by holders of Northern States common stock in the merger. The exchange ratio is subject to adjustment as described in this proxy statement/prospectus. The value of the merger consideration at the closing of the merger will be based on the price of First Midwest common stock on the date the merger is completed. The information presented above solely illustrates the implied value of the merger consideration based on the 20-day volume weighed average price of First Midwest common stock on the dates set forth above.

        All unvested Northern States restricted stock awards outstanding immediately prior to the merger will become fully vested upon completion of the merger and the holder thereof shall be entitled to receive the same merger consideration for the shares of Northern States common stock subject to such award as all other holders of Northern States common stock.

Tax Consequences of the Merger (Page 43)

        Subject to certain circumstances described below, and based on certain representations, covenants and assumptions, all of which must continue to be true and accurate in all material respects as of the effective time of the merger, in the opinion of Chapman and Cutler LLP ("Chapman and Cutler") and Barack Ferrazzano Kirschbaum & Nagelberg LLP ("Barack Ferrazzano"), for United States federal income tax purposes, the merger will be treated as a "reorganization" within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code").

        Provided that the merger qualifies as a reorganization for United States federal income tax purposes, Northern States stockholders generally will not recognize any gain or loss upon receipt of First Midwest common stock in exchange for Northern States common stock in the merger (except for any gain or loss that may result from the receipt of cash in lieu of fractional shares of First Midwest common stock that a Northern States stockholder would otherwise be entitled to receive).

        For a complete description of the material United States federal income tax consequences of the transaction, see "The Merger—Material Federal Income Tax Consequences of the Merger." You should consult your own tax advisor for a full understanding of the tax consequences to you of the merger.

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Prohibition on Northern States Dividends; First Midwest's Dividend Policy Will Continue After the Merger (Pages 68 and 75)

        Northern States is generally prohibited from paying cash dividends to holders of its common stock prior to completion of the merger.

        First Midwest expects to continue its common stock dividend practice after the merger, but this practice is subject to the determination and discretion of First Midwest's board of directors and may change at any time. This determination depends on a variety of factors, including cash requirements, financial condition and earnings, legal and regulatory considerations and other factors. In each of the first three quarters of 2018, First Midwest declared a quarterly cash dividend of $0.11 per share of First Midwest common stock.

        Northern States has not declared or paid a dividend in 2018.

The Merger Will Be Accounted for as a Purchase (Page 47)

        The merger will be treated as a purchase by First Midwest of Northern States under generally accepted accounting principles ("GAAP").

First Midwest's Reasons for the Merger (Page 33)

        For a discussion of the factors considered by First Midwest's board of directors in reaching its decision to approve the merger agreement and the transactions contemplated thereby, including the merger, see "The Merger—First Midwest's Reasons for the Merger."

Northern States' Reasons for the Merger (Page 35)

        For a discussion of the factors considered by Northern States' board of directors in reaching its decision to approve the merger agreement and the transactions contemplated thereby, including the merger, see "The Merger—Northern States' Reasons for the Merger and Recommendation of the Board of Northern States."

Opinion of Northern States' Financial Advisor (Page 37)

        On June 5, 2018, Vining Sparks IBG, L.P. ("Vining Sparks") rendered its oral and written opinion to the board of directors of Northern States that, as of such date and based upon and subject to the various factors, assumptions and limitations set forth in such opinion, the exchange ratio in the proposed merger was fair, from a financial point of view, to the holders of Northern States common stock.

        The full text of the written opinion of Vining Sparks, dated June 5, 2018, which sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken, is attached as Appendix B to this proxy statement/prospectus and is incorporated herein by reference. The summary of the opinion of Vining Sparks set forth in this proxy statement/prospectus is qualified in its entirety by reference to the full text of such opinion. Northern States stockholders are urged to read the opinion in its entirety. Vining Sparks' written opinion was addressed to the board of directors of Northern States (in its capacity as such) in connection with and for the purposes of its evaluation of the proposed merger and was directed only to the exchange ratio in the proposed merger and did not address any other aspect of the merger. Vining Sparks expressed no opinion as to the fairness of the consideration to the holders of any other class of securities, creditors or other constituencies of Northern States or as to the underlying decision by Northern States to engage in the merger. The issuance of Vining Sparks' opinion was approved by a fairness opinion committee of Vining Sparks. The opinion does not constitute a recommendation to

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any Northern States stockholders as to how such stockholder should vote with respect to the proposed merger or any other matter.

Certain Directors and Executive Officers May Have Interests in the Merger That Differ from Your Interests (Page 48)

        Certain directors and executive officers of Northern States and/or NorStates Bank have interests in the merger other than their interests as stockholders, including:

    To the extent a director or executive officer holds unvested restricted stock awards, upon completion of the merger, such awards will become fully earned and vested per the terms of the Northern States 2015 Equity Incentive Plan (the "Northern States Stock Plan") and the award agreements issued thereunder, and the shares of Northern States common stock subject to such awards will be converted to First Midwest common stock as discussed in the "The Merger—Merger Consideration," subject to any required withholding tax. As of the date of the merger agreement, directors and executive officers of Northern States and NorStates Bank, as a group, held 2,100,000 unvested restricted stock awards.

    NorStates Bank has entered into employment agreements with each of Scott Yelvington, its President and Chief Executive Officer, Patricia Christian, its Chief Operating Officer, and Matthew Tilton, its Chief Lending Officer. The employment agreements provide for certain severance benefits in the event of a qualifying termination of employment in connection with a change in control of NorStates Bank or Northern States. In such instance, Mr. Yelvington and Ms. Christian would be entitled to receive a lump sum payment equal to two times his or her base salary plus two times the average of their respective last two annual and profit sharing bonuses, and Mr. Tilton would be entitled to receive a lump sum payment equal to one and one-half times his base salary plus one and one-half times the average of his last two annual and profit sharing bonuses, equal to approximately $540,192, $468,846 and $336,346, respectively, if such terminations were to occur in 2018. First Midwest and Northern States have agreed that these amounts will be paid in connection with closing. In addition, each executive would be entitled to health insurance continuation coverage for 36 months after termination and would be subject to non-competition restrictions for 12 months following termination of employment for any reason and non-solicitation restrictions for 12 months following termination of employment for just cause or without good reason. Additionally, as a result of the exchange of their Northern States unvested restricted stock holdings held as of the Northern States record date that vest on the completion of the merger, based on the 20-day volume weighted average price per share of First Midwest common stock of $26.7862 as of August 20, 2018 and assuming an exchange ratio of 0.0364, it is estimated that the executive officers of Northern States, Mr. Yelvington, Ms. Christian, Mr. Tilton and Mr. Randall Sara, its Chief Financial Officer, would respectively receive First Midwest common stock equal to a net cash value of approximately $429,008, $390,007, $351,006 and $292,505.

    First Midwest has entered into an agreement with Mr. Sara whereby it is expected that his employment will terminate 20 business days after the date following the bank merger on which NorStates Bank and First Midwest Bank complete their operating systems conversion, and he will be eligible to receive approximately $10,800 in severance payments under the NorStates Bank Transition Period Severance Plan. In addition, Mr. Sara will be eligible to receive a cash retention bonus equal to $17,500, subject to his continued employment through such time.

    In connection with the execution of the merger agreement, one Northern States executive officer, Mr. Tilton, entered into an offer letter with First Midwest setting forth the terms and conditions of employment with First Midwest Bank following the merger, in addition to a new confidentiality and restrictive covenants agreement. The terms and conditions of the offer letter

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      include a base salary of $190,000 and participation in First Midwest's short-term and long-term incentive programs. In recognition of his agreement to enter into a new confidentiality and restrictive covenants agreement, and as a retention incentive, the offer letter with First Midwest provides for a cash payment to Mr. Tilton by First Midwest of $90,000, payable $50,000 after the closing of the merger and $40,000 on the first anniversary thereof, subject to partial repayment on certain terminations of employment. First Midwest may determine to enter into new offer letters or other new employment arrangements with executive officers of Northern States that would be effective upon completion of the merger.

    Northern States retained FIG Partners LLC ("FIG") to serve as one of its financial advisors in connection with the merger. Pursuant to the engagement letter entered into between Northern States and FIG, as compensation for FIG's financial advisory services provided to Northern States, Northern States agreed to pay FIG a success fee equal to one and two-tenths percent (1.2%) of the purchase consideration, as defined in the engagement letter. Gregory Gersack, one of the directors of Northern States, is a managing principal of FIG.

    Upon the termination of a certain deferred compensation arrangement under the terms of the merger agreement, one of Northern States' directors will receive a lump sum payment of approximately $262,000.

    NorStates Bank maintains pre-retirement split dollar life insurance arrangements with respect to several of its employees, including Ms. Christian and Mr. Tilton. Pursuant to these arrangements, if an employee dies prior to his or her retirement age of 65 years, the employee's beneficiary will receive a stated death benefit. If either Ms. Christian or Mr. Tilton were to die prior to age 65, her or his respective beneficiary would receive a death benefit equal to $200,000. These death benefits are fully funded by bank-owned life insurance policies and, to the extent a policy has greater value than the death benefit at the time of an employee's death, such excess will revert to the benefit of NorStates Bank or its successor.

    Pursuant to the terms of the merger agreement, directors and officers of Northern States will be entitled to certain ongoing indemnification and coverage under directors' and officers' liability insurance policies following the merger.

        Northern States' board of directors was aware of these additional interests and considered them when they adopted the merger agreement and approved the merger.

Holders of Northern States Common Stock Have Dissenters' Rights of Appraisal (Page 68)

        If you are a stockholder of Northern States, you may elect to dissent from the merger and exercise appraisal rights by following the procedures set forth in Section 262 of the General Corporation Law of the State of Delaware (the "DGCL"). For more information regarding your right to dissent from the merger and exercise appraisal rights, please see "The Merger Agreement—Dissenters' Rights of Appraisal of Holders of Northern States Common Stock" on page 68. We have also attached a copy of the relevant provisions of Section 262 of the DGCL as Appendix C to this proxy statement/prospectus.

We Have Agreed When and How Northern States Can Consider Third-Party Acquisition Proposals (Page 58)

        We have agreed that Northern States will not, and will cause its subsidiaries and its subsidiaries' representatives, agents, advisors and affiliates not to, solicit or encourage proposals from other parties regarding acquiring Northern States or its businesses. In addition, we have agreed that Northern States will not engage in negotiations with or provide confidential information to a third party regarding acquiring Northern States or its businesses. However, if Northern States receives an unsolicited acquisition proposal from a third party, Northern States can participate in negotiations with and

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provide confidential information to the third party if, among other steps, Northern States' board of directors concludes in good faith that the proposal is superior to First Midwest's merger proposal. Northern States' receipt of a superior proposal or participation in such negotiations does not give Northern States the right to terminate the merger agreement.

Approval of the Merger Agreement and the Transactions Contemplated Thereby Requires the Affirmative Vote of the Holders of a Majority of the Outstanding Shares of Northern States Common Stock (Page 24)

        In order to approve the merger agreement and the transactions contemplated thereby, including the merger, the holders of a majority of the outstanding shares of Northern States common stock as of the record date of August 20, 2018, must vote in favor of that matter. As of that date, Northern States' directors and executive officers and their affiliates held approximately 9.4% of the outstanding shares of Northern States common stock entitled to vote at the special meeting. All of the directors of Northern States and NorStates Bank, collectively holding an aggregate 6,875,016 shares of Northern States common stock (or approximately 7.4% of the outstanding shares) as of the record date, have signed voting agreements with First Midwest agreeing to vote for approval of the merger agreement and the transactions contemplated thereby, including the merger.

        Under the terms of the Northern States Stock Plan and award agreements thereunder, recipients of restricted stock awards are entitled to vote on behalf of underlying shares, even while subject to vesting requirements, from the date of grant until such awards are forfeited. Holders of Northern States restricted stock will vote in the same manner as holders of Northern States common stock. As of the record date, participants in the Northern States Stock Plan held approximately 3.6% of the shares entitled to vote at the special meeting.

        For a list of the number of shares of Northern States common stock held by (i) each director and executive officer of Northern States, and (ii) all directors and executive officers of Northern States as a group, see "Security Ownership of Certain Northern States Beneficial Owners and Management."

Certain Stockholders of Northern States Have Agreed to Vote Their Shares "FOR" the Merger (Page 73 and Annex 1-B to Appendix A)

        As an inducement to and condition of First Midwest's willingness to enter into the merger agreement, all of the directors of Northern States and NorStates Bank, collectively holding an aggregate 6,875,016 shares of Northern States common stock (or approximately 7.4% of the outstanding shares) as of the record date, entered into voting agreements, pursuant to which, among other things, they agreed to vote all of their shares of Northern States common stock in favor of approval of the merger agreement and the transactions contemplated thereby and other matters required to be approved or adopted to effect the merger and any other transactions contemplated by the merger agreement.

We Must Meet Several Conditions to Complete the Merger (Page 62)

        Our obligations to complete the merger depend on a number of conditions being met. These include:

    the approval of the merger agreement and the transactions contemplated thereby by holders of Northern States common stock;

    the receipt of the remaining required approvals of federal and state regulatory authorities;

    the listing on the Nasdaq Stock Market of the shares of First Midwest common stock to be issued in the merger;

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    the effectiveness of the registration statement on Form S-4, of which this proxy statement/prospectus is a part, for the registration of the shares of First Midwest common stock to be issued in the merger;

    the absence of any government action or other legal restraint or prohibition that would prohibit the merger or make it illegal;

    as to each of us, the representations and warranties of the other party to the merger agreement being true and correct in all material respects (except for representations and warranties qualified by the words "material" or "Material Adverse Effect," and certain representations and warranties regarding Northern States' capitalization, which are required to be true and correct in all respects) as of the date of the merger agreement and as of the closing date of the merger, and the other party to the merger agreement having performed in all material respects all of its obligations and complied in all material respects with all of its agreements and covenants under the merger agreement;

    the receipt of legal opinions that, for United States federal income tax purposes, the merger will be treated as a tax-free reorganization under federal tax laws. These opinions will be based on customary assumptions and on factual representations made by First Midwest and Northern States and will be subject to various limitations;

    with regard to First Midwest's obligation (but not Northern States'), the receipt of a legal opinion from Northern States' outside counsel, Barack Ferrazzano, as to certain corporate matters, including Northern States' due incorporation and legal standing, the legal status of Northern States' capital stock and the due authorization and execution of the merger agreement;

    with regard to First Midwest's obligation (but not Northern States'), the number of dissenting shares of Northern States common stock must not exceed 5% of the outstanding shares of Northern States common stock;

    with regard to First Midwest's obligation (but not Northern States'), the receipt by Northern States of certain required third-party approvals;

    with regard to First Midwest's obligation (but not Northern States'), Northern States' closing tangible common equity, as defined in the merger agreement, must be greater than or equal to $53,100,000 (as of July 31, 2018, Northern States' tangible common equity was approximately $54,342,700);

    with regard to First Midwest's obligation (but not Northern States'), the ten-day average of Northern States' consolidated deposits must be greater than or equal to $353,300,000 for the ten-day period ending on the day immediately prior to the closing date;

    with regard to First Midwest's obligation (but not Northern States'), Northern States' closing consolidated total loans (excluding loans held for sale) must be greater than or equal to $285,700,000;

    with regard to First Midwest's obligation (but not Northern States'), the environmental and title review process of Northern States' real property set forth in the merger agreement shall be completed in accordance with the provisions of the merger agreement;

    with regard to First Midwest's obligation (but not Northern States'), the receipt by First Midwest of the resignations, effective as of the effective time of the merger, of each director and officer of Northern States and each director and executive officer of NorStates Bank;

    with regard to First Midwest's obligation (but not Northern States'), the receipt by First Midwest of a certificate by Northern States stating that it and NorStates Bank are not and have not been United States real property holding corporations;

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    with regard to First Midwest's obligation (but not Northern States'), the receipt by First Midwest of a certificate by Northern States stating a material adverse effect, as defined in the merger agreement, has not occurred to Northern States;

    with regard to First Midwest's obligation (but not Northern States'), the receipt by First Midwest of a certificate from American Stock & Transfer Company, LLC certifying the number of shares of Northern States common stock outstanding as of the closing date;

    with regard to First Midwest's obligation (but not Northern States'), no action, suit, claim or proceeding shall be pending against or affecting Northern States or First Midwest that is seeking to prohibit or make illegal the consummation of the merger; and

    with regard to First Midwest's obligation (but not Northern States'), an agreement to terminate certain agreements regarding the referral of certain Northern States customers to a third party and the use of certain Northern States office space by such third party shall be in full force and effect and NorStates Bank shall be in compliance with such agreement.

        Where the law permits, either of First Midwest or Northern States could choose to waive a condition to its obligation to complete the merger even when that condition has not been satisfied. We cannot be certain when, or if, the conditions to the merger will be satisfied or waived, or that the merger will be completed. Although the merger agreement allows both parties to waive the tax opinion condition, neither party currently anticipates doing so.

We Must Obtain Regulatory Approvals to Complete the Merger (Page 67)

        The merger and the related transactions require approval from the Board of Governors of the Federal Reserve System (the "Federal Reserve"), and our application has been approved by the Federal Reserve. The bank merger must also be approved by the Illinois Department of Financial and Professional Regulation (the "IDFPR"), and an application for approval was filed on July 3, 2018.

We May Terminate the Merger Agreement (Page 63)

        We can mutually agree at any time to terminate the merger agreement without completing the merger, even if Northern States has received approval of the merger agreement and the transactions contemplated thereby by its stockholders. Also, either of us can decide, without the consent of the other, to terminate the merger agreement in certain circumstances, including:

    if there is a continuing breach of the merger agreement by a party, and the breaching party has not cured the breach within 15 days after delivery of written notice to such breaching party, as long as that breach would entitle the non-breaching party not to complete the merger;

    if there is a final denial of a required regulatory approval or an application for a required regulatory approval has been withdrawn upon the request or recommendation of the applicable governmental authority and such governmental authority would not accept the refiling of such application;

    if the merger is not completed on or before the 12-month anniversary of the date of the signing of the merger agreement; or

    if a material adverse effect, as defined in the merger agreement, occurs with respect to the other party.

        In addition, First Midwest may terminate the merger agreement:

    if holders of Northern States common stock fail to approve the merger proposal;

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    if Northern States' board of directors fails to recommend approval of the merger agreement and the transactions contemplated thereby, including the merger, to its stockholders, or withdraws or materially and adversely modifies its recommendation;

    if Northern States' board of directors recommends an acquisition proposal other than the merger, or if Northern States' board of directors negotiates or authorizes negotiations with a third party regarding an acquisition proposal other than the merger and those negotiations continue for at least 10 business days;

    if Northern States has breached its covenant not to solicit or encourage inquiries or proposals with respect to any acquisition proposal, in circumstances not permitted under the merger agreement; or

    if the number of dissenting shares exceeds 5% of the outstanding shares of Northern States common stock.

        Further, Northern States may terminate the merger agreement if the Average First Midwest Stock Price is less than $20.31 per share. However, if Northern States elects to terminate the merger agreement under these circumstances, First Midwest may, but is not obligated to, elect to increase the exchange ratio or provide an amount of cash as additional consideration for each share of Northern States common stock as provided in the merger agreement (the "top-up right"). If this election is made, Northern States may not terminate the merger agreement under these circumstances.

        Whether or not the merger is completed, we will each pay our own fees and expenses, except that we will each pay one-half of the costs and expenses that we incur in copying, printing and distributing this proxy statement/prospectus and all listing, filing or registration fees, including fees paid for filing the registration statement of which this proxy statement/prospectus is a part with the SEC and any other fees paid for filings with governmental authorities, except fees paid to counsel, financial advisors and accountants.

        The merger agreement also provides that Northern States must pay First Midwest a fee and reimburse expenses in certain situations. In particular, Northern States will pay First Midwest a fee of $3,400,000 plus reasonable and documented out-of-pocket expenses incurred by First Midwest in connection with the transactions contemplated by the merger agreement if the merger agreement is terminated and, at or prior to the termination of the merger agreement or the 12-month anniversary of the termination of the merger agreement in certain circumstances set forth in the merger agreement, any of the following occurs:

    Northern States' board of directors submits the merger agreement and the transactions contemplated thereby, including the merger, to Northern States stockholders without a recommendation for approval or with material and adverse conditions on such approval, or withdraws or materially and adversely modifies its recommendation;

    Northern States enters into an agreement to engage in a competing acquisition proposal with any person other than First Midwest or any of First Midwest's subsidiaries;

    Northern States authorizes, recommends or proposes (or publicly announces its intention to authorize, recommend or propose) an agreement to engage in a competing acquisition proposal with any person other than First Midwest or its subsidiaries or recommends that Northern States stockholders approve or accept such a competing acquisition proposal;

    any person, other than First Midwest or its subsidiaries, acquires beneficial ownership or the right to acquire beneficial ownership of 20% or more of the outstanding shares of any class or series of Northern States common stock;

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    Northern States fails to convene a stockholder meeting to approve the merger agreement and the transactions contemplated thereby, including the merger, within 45 days of the effectiveness of the registration statement of which this proxy statement/prospectus is a part; or

    Northern States breaches its covenant not to solicit or encourage inquiries or proposals with respect to any acquisition proposal in circumstances not permitted under the merger agreement, which covenant is described below under "The Merger Agreement—Acquisition Proposals by Third Parties."

We May Amend or Waive Merger Agreement Provisions (Page 66)

        At any time before completion of the merger, either First Midwest or Northern States may, to the extent legally allowed, waive in writing compliance by the other with any provision contained in the merger agreement. However, once holders of Northern States common stock have approved the merger proposal, no waiver of any condition may be made that would require further approval by Northern States stockholders unless that approval is obtained.

        First Midwest may also change the structure of the merger or the method of effecting the merger before the effective time of the merger, by notice to Northern States at least 5 business days prior to the approval of the merger agreement and the transactions contemplated thereby, including the merger, by all requisite votes of the holders of Northern States common stock, so long as any change does not: (i) change the kind or amount of consideration to be received by Northern States stockholders; (ii) adversely affect the tax consequences of the merger to Northern States stockholders; (iii) adversely affect the timing of or capability of completion of the merger; or (iv) cause or could not be reasonably expected to cause any of the conditions to complete the merger to be incapable of being satisfied.

        The merger agreement may not be amended except by an instrument in writing signed on behalf of each of the parties. Any such amendment by the parties must be approved by the board of directors of First Midwest and the board of directors of Northern States at any time before or after the approval of the merger agreement and the transactions contemplated thereby by the stockholders of Northern States, except that no amendment may be made after the receipt of such approval which requires further approval of the stockholders of Northern States unless such further approval is obtained. Notwithstanding the foregoing, First Midwest and Northern States may, without approval of their respective boards of directors, make technical changes to the merger agreement, not inconsistent with the purposes of the merger agreement, as may be required to effect or facilitate any required government approvals or acceptance of the merger or of the merger agreement or to effect or facilitate any filing or recording required for the consummation of any of the transactions contemplated by the merger agreement.

The Rights of Northern States Stockholders Following the Merger Will Be Different (Page 82)

        The rights of First Midwest stockholders are governed by Delaware law and by First Midwest's restated certificate of incorporation and amended and restated by-laws. The rights of Northern States stockholders are also governed by Delaware law, and by Northern States' certificate of incorporation, as amended, and by-laws, as amended. Upon completion of the merger, the rights of both stockholder groups will be governed by Delaware law and First Midwest's restated certificate of incorporation and amended and restated by-laws.

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Information About the Companies (Page 78)

    First Midwest Bancorp, Inc.
    8750 West Bryn Mawr Avenue, Suite 1300
    Chicago, Illinois 60631
    (708) 831-7563

        First Midwest is a relationship-focused financial institution and one of the largest independent publicly-traded bank holding companies based on assets headquartered in Chicago and in the Midwest, with approximately $15 billion in assets and $11 billion in trust assets under management. First Midwest's principal subsidiary, First Midwest Bank, and other affiliates provide a full range of commercial, treasury management, equipment leasing, retail, wealth management, trust and private banking products and services through locations in metropolitan Chicago, northwest Indiana, central and western Illinois, and eastern Iowa. First Midwest common stock is traded on the Nasdaq Stock Market under the symbol "FMBI."

    Northern States Financial Corporation
    1601 North Lewis Avenue
    Waukegan, Illinois 60085
    (847) 775-8200

        NorStates Bank is a wholly owned subsidiary of Northern States and maintains its principal executive offices in Waukegan, Illinois. NorStates Bank is a client-focused bank committed to providing quality financial services with a personal touch through a complete line of loan, deposit and cash management services. It provides these financial services through eight banking locations in Lake County, Illinois. Northern States common stock is currently quoted over-the-counter on the OTC Pink market under the symbol "NSFC."

        See "Information About the Companies" on page 78 of this proxy statement/prospectus.

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SELECTED CONSOLIDATED FINANCIAL DATA OF FIRST MIDWEST

        You should read the selected consolidated financial data set forth below in conjunction with First Midwest's Management's Discussion and Analysis of Financial Condition and Results of Operations and the First Midwest consolidated financial statements and related notes incorporated by reference into this proxy statement/prospectus. The financial data as of and for the years ended December 31, 2017, 2016, 2015, 2014 and 2013 is derived from First Midwest's audited financial statements. The financial data as of and for the six month periods ended June 30, 2018 and 2017 is derived from First Midwest's unaudited financial statements incorporated by reference into this proxy statement/prospectus, which have been prepared on the same basis as First Midwest's audited financial statements, except for the adoption of accounting standards update ("ASU") 2014-09, Revenue from Contracts with Customers, ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, and ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. See "Where You Can Find More Information." First Midwest's historical results may not be indicative of First Midwest's future performance. In addition, results for the six month periods ended June 30, 2018 and 2017 may not be indicative of the results that may be expected for the full fiscal year or future periods.

 
  As of or for the
six months ended
June 30,
  As of or for the years ended December 31,  
 
  2018   2017   2017   2016   2015   2014   2013  
 
  (dollars in thousands, except per share information)
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Results

                                           

Net income

  $ 63,110   $ 57,805   $ 98,387   $ 92,349   $ 82,064   $ 69,306   $ 79,306  

Net income applicable to common shares

    62,559     57,235     97,471     91,306     81,182     68,470     78,199  

Per Common Share Data

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Basic earnings per common share

  $ 0.61   $ 0.57   $ 0.96   $ 1.14   $ 1.05   $ 0.92   $ 1.06  

Diluted earnings per common share

    0.61     0.57     0.96     1.14     1.05     0.92     1.06  

Common dividends declared

    0.22     0.19     0.39     0.36     0.36     0.31     0.16  

Book value at period end

    18.28     17.88     18.16     15.46     14.70     14.17     13.34  

Market price at period end

    25.47     23.31     24.01     25.23     18.43     17.11     17.53  

Performance Ratios

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Return on average common equity(1)

    6.70 %   6.42 %   5.32 %   7.38 %   7.17 %   6.56 %   8.04 %

Return on average tangible common equity(1)

    11.65 %   11.52 %   9.44 %   10.77 %   10.44 %   9.32 %   11.29 %

Return on average assets(1)

    0.88 %   0.84 %   0.70 %   0.84 %   0.85 %   0.80 %   0.96 %

Tax-equivalent net interest margin(1)(2)

    3.85 %   3.88 %   3.87 %   3.60 %   3.68 %   3.69 %   3.68 %

Non-performing loans to total loans

    0.56 %   0.79 %   0.68 %   0.78 %   0.45 %   1.07 %   1.79 %

Non-performing assets to total loans plus other real estate owned ("OREO")

    0.70 %   1.07 %   0.89 %   1.12 %   0.88 %   1.64 %   2.91 %

Balance Sheet Highlights

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Total assets

  $ 14,818,076   $ 13,969,140   $ 14,077,052   $ 11,422,555   $ 9,732,676   $ 9,445,139   $ 8,253,407  

Total loans

    10,891,565     10,232,159     10,437,812     8,254,145     7,161,715     6,736,853     5,714,360  

Deposits

    11,492,263     10,999,720     11,053,325     8,828,603     8,097,738     7,887,758     6,766,101  

Senior and subordinated debt

    195,453     194,886     195,170     194,603     201,208     200,869     190,932  

Stockholders' equity

    1,883,563     1,836,843     1,864,874     1,257,080     1,146,268     1,100,775     1,001,442  

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  As of or for the
six months ended
June 30,
  As of or for the years ended December 31,  
 
  2018   2017   2017   2016   2015   2014   2013  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Ratios

                                           

Allowance for credit losses to total loans(3)

    0.90 %   0.91 %   0.93 %   1.06 %   1.05 %   1.11 %   1.52 %

Net loan charge-offs to average loans, annualized(1)

    0.49 %   0.14 %   0.21 %   0.24 %   0.29 %   0.52 %   0.55 %

First Midwest Regulatory Ratios(4)

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Total capital to risk-weighted assets

    12.07 %   11.69 %   12.15 %   12.23 %   11.15 %   11.23 %   12.39 %

Tier 1 capital to risk-weighted assets

    10.09 %   9.71 %   10.10 %   9.90 %   10.28 %   10.19 %   10.91 %

Common equity Tier 1 ("CET1") to risk-weighted assets

    9.68 %   9.30 %   9.68 %   9.39 %   9.73 %   NA     NA  

Tier 1 capital to average assets

    8.95 %   8.93 %   8.99 %   8.99 %   9.40 %   9.03 %   9.18 %

NA—Not applicable.

(1)
Annualized based on the actual number of days for the six months ended June 30, 2018 and 2017.

(2)
Presented on a tax-equivalent basis, assuming the applicable federal income tax rate for each period presented. As a result, interest income and yields on tax-exempt securities and loans subsequent to December 31, 2017 are presented using the current federal income tax rate of 21% and prior periods are computed using the federal income tax rate at that time of 35%.

(3)
This ratio includes acquired loans that are recorded at fair value through an acquisition adjustment, which incorporates credit risk, as of the acquisition date with no allowance for credit losses being established at that time. As the acquisition adjustment is accreted into income over future periods, an allowance for credit losses is established on acquired loans as necessary to reflect credit deterioration.

(4)
Basel III Capital Rules became effective for First Midwest on January 1, 2015. These rules revise the risk-based capital requirements and introduce a new capital measure, CET1 to risk-weighted assets. As a result, ratios subsequent to December 31, 2014 are computed using the new rules and prior periods presented are reported using the regulatory guidance applicable at that time.

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SELECTED CONSOLIDATED FINANCIAL DATA OF NORTHERN STATES

        You should read the selected consolidated financial data set forth below in conjunction with Northern States' Consolidated Financial Statements and related notes included elsewhere in this proxy statement/prospectus. The financial data as of and for the years ended December 31, 2017, 2016, 2015, 2014 and 2013 is derived from Northern States' audited financial statements. The financial data as of and for the six month periods ended June 30, 2018 and 2017 is derived from Northern States' unaudited financial statements, which have been prepared on the same basis as Northern States' audited financial statements. Northern States' historical results may not be indicative of Northern States' future performance. In addition, results for the six month periods ended June 30, 2018 and 2017 have not been audited and may not be indicative of the results that may be expected for the full fiscal year or future periods.

 
  As of or for the six
months ended
June 30,
  As of or for the years ended December 31,  
 
  2018   2017   2017   2016   2015   2014   2013  

Operating Results

                                           

Net income (loss)

  $ 1,276   $ (1,078 ) $ (6,381 ) $ 2,141   $ 23,129   $ 210   $ (1,583 )

Net income (loss) applicable to common shares

    1,276     (1,078 )   (6,381 )   2,141     23,129     15,564     (2,771 )

Per Common Share Data

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Basic earnings per common share

  $ 0.01   $ (0.01 ) $ (0.07 ) $ 0.02   $ 0.26   $ 0.26   $ (0.65 )

Diluted earnings per common share

    0.01     (0.01 )   (0.07 )   0.02     0.26     0.26     (0.65 )

Common dividends declared

    0.00     0.00     0.00     0.00     0.00     0.00     0.00  

Book value at period end

    0.58     0.64     0.57     0.65     0.64     0.37     (1.77 )

Market price at period end

    0.91     0.78     0.80     0.73     0.59     0.65     0.65  

Performance Ratios

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Return on average common equity(1)

    4.80 %   (3.65 )%   (10.85 )%   3.77 %   68.78 %   61.27 %   (20.66 )%

Return on average assets(1)

    0.52 %   (0.44 )%   (1.29 )%   0.43 %   5.17 %   3.81 %   (0.68 )%

Tax-equivalent net interest margin(1)(2)

    3.44 %   3.25 %   3.35 %   3.03 %   3.04 %   3.02 %   3.37 %

Non-performing loans to total loans

    3.86 %   3.02 %   5.78 %   3.03 %   5.30 %   9.58 %   18.76 %

Non-performing assets to total loans plus OREO

    4.15 %   5.25 %   6.40 %   6.34 %   10.06 %   15.91 %   23.63 %

Balance Sheet Highlights

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Total assets

  $ 530,281   $ 479,908   $ 495,925   $ 489,988   $ 485,347   $ 422,023   $ 392,412  

Total loans

    310,453     294,901     307,448     289,594     237,327     219,049     225,295  

Deposits

    443,806     384,719     398,646     390,810     395,422     356,730     347,129  

Senior and subordinated debt

    10,310     10,310     10,310     10,310     10,310     10,310     10,310  

Stockholders' equity

    53,501     57,795     52,474     58,460     55,673     32,333     9,654  

Financial Ratios

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Allowance for credit losses to total loans

    2.05 %   1.92 %   2.22 %   1.97 %   2.53 %   2.99 %   4.05 %

Net loan charge-off to average loans, annualized(1)

    0.29 %   0.04 %   (0.38 )%   0.09 %   (0.07 )%   1.19 %   5.90 %

NorStates Bank Regulatory Ratios(3)

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Total capital to risk-weighted assets

    16.44 %   17.50 %   17.25 %   17.44 %   18.16 %   18.65 %   12.54 %

Tier 1 capital to risk-weighted assets

    15.19 %   16.20 %   15.98 %   16.15 %   16.90 %   17.39 %   11.25 %

CET1 to risk-weighted assets

    15.19 %   16.20 %   15.98 %   16.15 %   16.90 %   NA     NA  

Tier 1 capital to average assets

    10.78 %   10.92 %   10.25 %   10.60 %   10.98 %   9.88 %   6.49 %

NA—Not applicable.

(1)
Annualized based on the actual number of days for the six months ended June 30, 2018 and 2017.

(2)
Presented on a tax-equivalent basis, assuming the applicable federal income tax rate for each period presented. As a result, interest income and yields on tax-exempt securities and loans subsequent to December 31, 2017 are

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    presented using the current federal income tax rate of 21% and prior periods are computed using the federal income tax rate at that time of 35%.

(3)
Basel III Capital Rules became effective for NorStates Bank on January 1, 2015. These rules revise the risk-based capital requirements and introduce a new capital measure, CET1 to risk-weighted assets. As a result, ratios subsequent to December 31, 2014 are computed using the new rules, and prior periods presented are reported using the regulatory guidance applicable at that time.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

        This proxy statement/prospectus, as well as First Midwest's other filings with the SEC and Northern States' other communications with its stockholders, may contain certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "PSLRA"). These statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to be materially different from any results, levels of activity, performance, or achievements expressed or implied by any forward-looking statement. These factors include, among other things, the factors listed below.

        In some cases, forward-looking statements can be identified by the use of words such as "may," "might," "will," "would," "should," "could," "expect," "plan," "intend," "anticipate," "believe," "estimate," "outlook," "predict," "project," "probable," "potential," "possible," "target," "continue," "look forward," or "assume" and words of similar import. Forward-looking statements are not historical facts or guarantees of future performance or outcomes, but instead express only management's beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside of management's control. It is possible that actual results and events may differ, possibly materially, from the anticipated results or events indicated in these forward-looking statements. We caution you not to place undue reliance on these statements. Forward-looking statements are made only as of the date of this proxy statement/prospectus, and First Midwest and Northern States undertake no obligation to update any forward-looking statements to reflect new information or events or conditions after the date hereof.

        In connection with the safe harbor provisions of the PSLRA, we are hereby identifying important factors that could affect our financial performance and could cause our actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any forward-looking statements.

        Among the factors that could impact our ability to achieve operating results, growth plan goals, and the beliefs expressed or implied in forward-looking statements are:

    the risk that the business of First Midwest and Northern States will not be integrated successfully, or such integration may be more difficult, time consuming or costly than expected;

    expected revenue synergies, cost savings and other financial or other benefits of the proposed transaction between First Midwest and Northern States might not be realized within the expected time frames or might be less than projected;

    revenues following the merger may be lower than expected;

    deposit attrition, operating costs, customer loss and business disruption following the merger, including, without limitation, difficulties in maintaining relationships with employees, may be greater than expected;

    the ability to obtain governmental approvals of the merger, or the ability to obtain such regulatory approvals in a timely manner;

    the potential impact of announcement or completion of the merger on relationships with third parties, including customers, employees, and competitors;

    business disruption following the merger, including diversion of management's attention from ongoing business operations and opportunities;

    the failure of holders of Northern States common stock to approve the merger proposal;

    changes in the level of non-performing assets and charge offs;

    First Midwest's potential exposure to unknown contingent liabilities of Northern States;

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    any interruption or breach of security resulting in failures or disruptions in customer account management, general ledger, deposit, loan, or other systems;

    changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements;

    changes in First Midwest's stock price before closing, including as a result of the financial performance of Northern States prior to closing;

    inflation, interest rate, securities market and monetary fluctuations;

    credit and interest rate risks associated with First Midwest's and Northern States' respective businesses, customer borrowing, repayment, investment and deposit practices;

    general economic conditions, either internationally, nationally or in the market areas in which First Midwest and Northern States operate or anticipate doing business, may be less favorable than expected;

    changes in the economic environment, competition or other factors that may influence the anticipated growth of loans and deposits, the quality of the loan portfolio and loan and deposit pricing;

    changes in the competitive environment among financial holding companies and banks;

    new regulatory or legal requirements or obligations with which First Midwest and Northern States must comply; and

    other economic, competitive, governmental, regulatory and technological factors affecting First Midwest's and Northern States' operations, products, services and prices.

        The foregoing list of important factors may not be all inclusive, and we specifically decline to undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events. For a further discussion of these and other risks, uncertainties and other factors applicable to First Midwest and Northern States, see "Risk Factors" in this proxy statement/prospectus and First Midwest's other filings with the SEC incorporated by reference into this proxy statement/prospectus.

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RISK FACTORS

        In addition to the other information contained in or incorporated by reference into this proxy statement/prospectus, including the matters addressed under the heading "Cautionary Statement Regarding Forward-Looking Statements," you should carefully consider the following risk factors in deciding how to vote on the proposals presented in this proxy statement/prospectus. You should also consider the other information in, and the other documents incorporated by reference into, this proxy statement/prospectus, including in particular the risk factors associated with First Midwest's business contained under the heading "Risk Factors" in First Midwest's Annual Report on Form 10-K for the year ended December 31, 2017. See "Where You Can Find More Information."

Because the market price of First Midwest common stock will fluctuate, Northern States stockholders cannot be certain of the market value of the merger consideration they will receive.

        Upon completion of the merger, each holder of Northern States common stock will receive the merger consideration, except in certain circumstances and subject to adjustment as described in this proxy statement/prospectus, calculated as follows:

    if the Average First Midwest Stock Price is greater than $26.49, the exchange ratio shall equal the quotient, rounded down to the nearest fourth decimal place, of 0.9775 divided by the Average First Midwest Stock Price, which effectively caps the maximum per share value of the merger consideration you may receive at $0.9775 per share of Northern States common stock;

    if the Average First Midwest Stock Price is greater than or equal to $22.86 and equal to or less than $26.49, the exchange ratio shall equal 0.0369;

    if the Average First Midwest Stock Price is equal to or greater than $20.31 and less than $22.86, the exchange ratio shall equal the quotient, rounded down to the nearest fourth decimal place, of 0.8435 divided by the Average First Midwest Stock Price; or

    if the Average First Midwest Stock Price is less than $20.31 (subject to Northern States' right to terminate the merger agreement and First Midwest's top-up right as described below under "The Merger Agreement—Termination of the Merger Agreement"), the exchange ratio shall equal 0.0415.

        The merger consideration may be subject to adjustment if certain environmental conditions and/or title defects exist as described under "The Merger—Terms of the Merger." Any change in the market price of First Midwest common stock prior to completion of the merger will affect the value of any shares of First Midwest common stock Northern States stockholders receive as consideration in the merger. The market price of First Midwest common stock may fluctuate as a result of a variety of factors, including general market and economic conditions, changes in our respective businesses, operations and prospects, and regulatory considerations. Many of these factors are outside of our control. Accordingly, at the time of the Northern States special meeting, Northern States stockholders will not know or be able to calculate the market price of First Midwest common stock that they will receive upon completion of the merger.

Northern States will be subject to business uncertainties and contractual restrictions while the merger is pending.

        Uncertainty about the effect of the merger on employees and customers may have an adverse effect on Northern States and consequently on First Midwest. These uncertainties may impair Northern States' ability to attract, retain and motivate key personnel until the merger is completed, and could cause customers and others that deal with Northern States to seek to change existing business relationships with Northern States. Retention of certain employees may be challenging during the pendency of the merger, as employees may experience uncertainty about their future roles with First

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Midwest. If key employees depart because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with First Midwest, First Midwest's business following the merger could be harmed. In addition, the merger agreement restricts Northern States from making certain acquisitions and taking other specified actions without the consent of First Midwest, and generally requires Northern States to continue its operations in the ordinary course, until the merger occurs. These restrictions may prevent Northern States from pursuing attractive business opportunities that may arise prior to the completion of the merger. For a description of the restrictive covenants to which Northern States is subject, see "The Merger Agreement—Conduct of Business Pending the Merger."

Combining our two companies may be more difficult, costly or time-consuming than we currently expect, and we may fail to realize the anticipated benefits and cost savings of the merger.

        First Midwest and Northern States have operated and, until the completion of the merger, will continue to operate independently. The success of the merger, including anticipated benefits and cost savings, will depend, in part, on First Midwest's ability to successfully combine and integrate the Northern States business into its own in a manner that permits growth opportunities and does not materially disrupt existing customer relationships or result in decreased revenues due to loss of customers. It is possible that the integration process could result in the loss of key employees, the disruption of either company's ongoing business or inconsistencies in standards, controls, procedures and policies that adversely affect our ability to maintain relationships with customers and employees. As with any merger of banking institutions, there also may be business disruptions that cause us to lose customers or cause customers to take their deposits or loans out of our banks. The success of the combined company following the merger and the bank merger may depend, in part, on the ability of First Midwest to integrate the two businesses, business models and cultures. If First Midwest experiences difficulties in the integration process, including those listed above, First Midwest may fail to realize the anticipated benefits of the merger in a timely manner or at all. First Midwest's business or results of operations or the value of its common stock may be materially and adversely affected as a result.

The market price of First Midwest common stock after the merger may be affected by factors different from those currently affecting First Midwest common stock.

        The businesses of First Midwest and Northern States differ in some respects and, accordingly, the results of operations of the combined company and the market price of First Midwest common stock after the merger may be affected by factors different from those currently affecting the independent results of operations of each of First Midwest or Northern States. For a discussion of the business of First Midwest and of certain factors to consider in connection with the business of First Midwest, see the documents incorporated by reference into this proxy statement/prospectus and referred to under "Where You Can Find More Information," including, in particular, the section titled "Risk Factors" in First Midwest's Annual Report on Form 10-K for the year ended December 31, 2017.

Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated or that could have an adverse effect on the combined company following the merger.

        Before the merger and the bank merger may be completed, First Midwest and Northern States must obtain approvals from the Federal Reserve, which approval has been received, and the IDFPR, which application has been submitted. Other approvals, waivers or consents from regulators may also be required. In determining whether to grant these approvals the regulators consider a variety of factors, including the regulatory standing of each party and the factors described under "The Merger Agreement—Regulatory Approvals Required for the Merger." An adverse development in either party's regulatory standing or these factors could result in a delay of or an inability to obtain regulatory approval. The regulators may impose conditions on the completion of the merger or the bank merger

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or require changes to the terms of the merger or the bank merger. Such conditions or changes could have the effect of delaying or preventing completion of the merger or the bank merger or imposing additional costs on or limiting the revenues of the combined company following the merger and the bank merger, any of which might have an adverse effect on the combined company following the merger. See "The Merger Agreement—Regulatory Approvals Required for the Merger." Regulatory approvals could also be adversely impacted based on the status of any ongoing investigation of either party or its customers, including subpoenas to provide information or investigations by a federal, state or local governmental agency. We cannot guarantee that we will be able to obtain all required regulatory approvals, the timing of those approvals or whether any conditions will be imposed.

Some Northern States directors and officers may have interests and arrangements that may have influenced their decisions to support or recommend that you approve the merger.

        Northern States' stockholders should be aware that some of Northern States' directors and executive officers have interests in the merger and have arrangements that are different from, or in addition to, those of Northern States' stockholders generally. These interests and arrangements may create potential conflicts of interest. Northern States' board of directors was aware of these interests and considered these interests, among other matters, when making its decision to approve the merger agreement, and in recommending that holders of Northern States common stock vote in favor of the merger proposal.

        For a more complete description of these interests, see "The Merger—Interests of Certain Persons in the Merger."

The merger agreement limits Northern States' ability to pursue alternatives to the merger.

        The merger agreement contains provisions that limit Northern States' ability to solicit, encourage or discuss competing third-party proposals to acquire all or a significant part of Northern States. These provisions, which include a $3,400,000 termination fee, might discourage a potential competing acquiror that might have an interest in acquiring all or a significant part of Northern States from considering or proposing that acquisition, even if it were prepared to pay consideration with a higher per share market price than that proposed in the merger, or might result in a potential competing acquiror proposing to pay a lower per share price to acquire Northern States than it might otherwise have proposed to pay.

Termination of the merger agreement could negatively impact First Midwest or Northern States.

        In the event the merger agreement is terminated, First Midwest's or Northern States' business may be adversely impacted by the failure to pursue other beneficial opportunities due to the focus of management on the merger. The market price of First Midwest common stock might decline to the extent that the current market price reflects a market assumption that the merger will be completed. If the merger agreement is terminated and Northern States' board of directors seeks another merger or business combination, Northern States stockholders cannot be certain that Northern States will be able to find a party willing to offer equivalent or more attractive consideration than the merger consideration provided in the merger. If the merger agreement is terminated under certain circumstances, Northern States may be required to pay First Midwest a termination fee of $3,400,000. If the merger agreement is terminated, First Midwest or Northern States may experience negative reactions from its customers, vendors and employees. See "The Merger Agreement—Termination of the Merger Agreement."

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If the merger is not completed, First Midwest and Northern States will have incurred substantial expenses without realizing the expected benefits of the merger.

        Each of First Midwest and Northern States has incurred and will incur substantial expenses in connection with the negotiation and completion of the transactions contemplated by the merger agreement, as well as the costs and expenses of filing, printing and mailing this proxy statement/prospectus and all filing and other fees paid to the SEC in connection with the merger. If the merger is not completed, First Midwest and Northern States would have to recognize these expenses without realizing the expected benefits of the merger.

Holders of Northern States common stock will have a reduced ownership and voting interest after the merger and will exercise less influence over management.

        Holders of Northern States common stock currently have the right to vote on matters affecting Northern States. Upon the completion of the merger, each Northern States stockholder who receives shares of First Midwest common stock will become a stockholder of First Midwest with a percentage ownership of First Midwest with respect to such shares that is smaller than the stockholder's current percentage ownership of Northern States. Assuming that the exchange ratio is 0.0364 of a share of First Midwest common stock per issued and outstanding share of Northern States common stock, following the effective time of the merger, the former stockholders of Northern States as a group would receive shares in the merger constituting approximately 3.2% of the outstanding shares of First Midwest common stock immediately after the merger based on the number of shares of First Midwest common stock and Northern States common stock outstanding as of August 20, 2018. Because of this, Northern States stockholders will have less influence on the management and policies of First Midwest than they now have on the management and policies of Northern States.

The opinion of Northern States' financial advisor will not reflect changes in circumstances between the signing of the merger agreement and the completion of the merger.

        Northern States has not obtained an updated opinion from Vining Sparks, its financial advisor, as of the date of this proxy statement/prospectus. Vining Sparks' opinion was based on certain facts and assumptions regarding the operations and prospects of First Midwest and Northern States, general market and economic conditions and other factors. Changes in the operations and prospects of First Midwest or Northern States, general market and economic conditions and other factors that may be beyond the control of First Midwest or Northern States may significantly alter the value of First Midwest or Northern States, the prices of the shares of First Midwest common stock by the time the merger is completed or the future price at which First Midwest common stock trades. Vining Sparks' opinion does not speak as of the time the merger will be completed or as of any date other than the date of such opinion. The opinion will not address the fairness of the merger consideration from a financial point of view at the time a Northern States stockholder votes or at the time the merger is completed. However, Northern States' board of directors' recommendation that Northern States stockholders vote "FOR" adoption of the merger agreement is made as of the date of this proxy statement/prospectus. For a description of the opinion that Northern States received from Vining Sparks, please refer to "The Merger—Opinion of Northern States' Financial Advisor".

The shares of First Midwest common stock that Northern States stockholders will receive as a result of the merger will have different rights from shares of Northern States common stock.

        The rights associated with Northern States common stock are different from the rights associated with First Midwest common stock. For a discussion of the different rights associated with First Midwest common stock, see "Comparison of Stockholder Rights."

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Under certain circumstances, the merger consideration may be reduced due to environmental conditions and/or title defects on Northern States' real property.

        The merger consideration may be subject to adjustment if certain environmental conditions exist with respect to Northern States' real property acquired after June 6, 2018 (if any) and/or title defects exist with respect to any of Northern States' real property and the real property adjustment amount is greater than $100,000. In that case, the exchange ratio will be reduced by an amount equal to the result of: (i) the real property adjustment amount, divided by (ii) the number of outstanding shares of Northern States common stock, divided by (iii) the per share volume weighted average price of the First Midwest common stock on Nasdaq from 9:30 a.m. to 4:00 p.m., Eastern Time, on the trading day immediately preceding the closing date of the merger. See "The Merger Agreement—Merger Consideration."

Completion of the merger is subject to certain conditions, and if these conditions are not satisfied or waived, the merger will not be completed.

        The obligations of First Midwest and Northern States to complete the merger are subject to satisfaction or waiver (if permitted) of a number of conditions. The satisfaction of all of the required conditions could delay the completion of the merger for a significant period of time or prevent it from occurring. Any delay in completing the merger could cause the combined company not to realize some or all of the benefits that the combined company expects to achieve if the merger is successfully completed within its expected time frame. Further, there can be no assurance that the conditions to the closing of the merger will be satisfied or waived or that the merger will be completed. See "The Merger Agreement—Conditions to Completion of the Merger."

        In addition, if the merger is not completed on or before June 6, 2019, either First Midwest or Northern States may choose not to proceed with the merger. First Midwest and/or Northern States may also terminate the merger agreement under certain circumstances. See "The Merger Agreement—Termination of the Merger Agreement."

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NORTHERN STATES SPECIAL MEETING

        This section contains information from Northern States for Northern States stockholders about the special meeting Northern States has called to consider and approve the merger agreement and the transactions contemplated thereby by the holders of Northern States common stock. We are mailing this proxy statement/prospectus to Northern States stockholders on or about August 30, 2018. Together with this proxy statement/prospectus, we are also sending to Northern States stockholders a notice of the Northern States special meeting and a form of proxy card that Northern States' board of directors is soliciting for use at the special meeting of Northern States stockholders and at any adjournments of the meeting.

        This proxy statement/prospectus is also being furnished by First Midwest to Northern States stockholders as a prospectus in connection with the issuance of shares of First Midwest common stock upon completion of the merger.

Date, Time and Place

        The special meeting of holders of Northern States common stock will be held at the headquarters of Northern States Financial Corporation, located at 1601 North Lewis Avenue, Waukegan, Illinois 60085 on October 4, 2018 at 4:30 p.m. Central Time.

Matters to Be Considered

        At the Northern States special meeting, holders of Northern States common stock as of the Northern States record date will be asked to consider and vote on the following matters:

    Approval by the holders of Northern States common stock of the merger agreement, a copy of which is attached as Appendix A to this proxy statement/prospectus, and the transactions contemplated thereby, including the merger;

    Approval by the holders of Northern States common stock of one or more adjournments of the Northern States special meeting, if determined necessary and advisable, including adjournments to permit further solicitation of proxies in favor of the merger proposal; and

    Transaction of such other business as may properly come before the Northern States special meeting and any adjournments or postponements thereof.

Recommendation of Northern States' Board

        The board of directors of Northern States recommends that holders of Northern States common stock vote "FOR" the merger proposal and "FOR" the Northern States adjournment proposal.

        All of the directors of Northern States, collectively holding an aggregate 6,875,016 shares of Northern States common stock (or approximately 7.4% of the outstanding shares) as of the Northern States record date, have signed voting agreements with First Midwest agreeing to vote for approval of the merger agreement and the transactions contemplated thereby.

Northern States Record Date and Quorum

        Northern States' board of directors has fixed the close of business on August 20, 2018, as the record date for determining the Northern States stockholders entitled to receive notice of and to vote at the Northern States special meeting. Each share of Northern States common stock held of record at the close of business on the Northern States record date entitles the holder thereof to one vote on each matter considered and voted on by holders of Northern States common stock at the Northern States special meeting. As of the Northern States record date, 92,302,244 shares of Northern States common stock were issued and outstanding and held by approximately 267 record holders.

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        If you hold shares of Northern States common stock indirectly through a broker, you are considered a beneficial owner of those shares but are not the stockholder of record. In this circumstance, you are a stockholder whose shares are held in "street name" and your broker is considered the stockholder of record. We sent copies of this proxy statement/prospectus directly to all stockholders of record. If you are a beneficial owner whose shares are held in street name, these materials were sent to you by the broker through which you hold your shares. As the beneficial owner, you may direct your broker how to vote your shares at the Northern States special meeting, and the broker is obligated to provide you with a voting instruction form for you to use for this purpose.

    Quorum Requirements

        A quorum is required to transact business and consider each proposal at the Northern States special meeting. The presence at the special meeting, in person or by proxy, of holders of a majority of the outstanding shares of Northern States common stock entitled to vote at the special meeting will constitute a quorum for the transaction of business. All shares of Northern States common stock present in person or represented by proxy, including abstentions, will be treated as present for purposes of determining the presence or absence of a quorum for all matters voted on at the Northern States special meeting but shares represented by a proxy from a broker indicating that such person has not received instructions from the beneficial owner or other person entitled to vote the shares, which we refer to as "broker non-votes," will not be counted as shares present.

Vote Required; Treatment of Abstentions and Failure to Vote

    Merger Proposal

        Approval of the merger agreement and the transactions contemplated thereby, including the merger, requires the affirmative vote of Northern States stockholders representing a majority of the outstanding shares of Northern States common stock as of the record date. The merger agreement and the completion of the transactions contemplated thereby, including the merger, will not require the approval of the holders of First Midwest common stock under the DGCL or applicable rules of the Nasdaq Stock Market. If you fail to submit a proxy card or vote in person at the Northern States special meeting, mark "ABSTAIN" on your proxy card or fail to instruct your bank or broker for shares held in street name with respect to the proposal to approve the merger agreement and the transactions contemplated thereby, including the merger, it will have the same effect as a vote "AGAINST" approval of the merger agreement and the transactions contemplated thereby, including the merger.

    Northern States Adjournment Proposal

        Approval of the Northern States adjournment proposal requires the affirmative vote of a majority of the shares of Northern States common stock present in person or represented by proxy at the Northern States special meeting. If you mark "ABSTAIN" with respect to the Northern States adjournment proposal, it will have the same effect as a vote "AGAINST" the Northern States adjournment proposal, and broker non-votes will have no effect on the approval of the Northern States adjournment proposal assuming a quorum has been established.

Shares Held by Directors and Officers

        As of the Northern States record date, Northern States' directors and executive officers and their affiliates held approximately 9.4% of the outstanding shares of Northern States common stock entitled to vote at the Northern States special meeting. All of the directors of Northern States, collectively holding an aggregate 6,875,016 shares of Northern States common stock (or approximately 7.4% of the outstanding shares) as of the Northern States record date, have signed voting agreements with First

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Midwest agreeing to vote for approval of the merger agreement and the transactions contemplated thereby. See "The Merger—Interests of Certain Persons in the Merger."

        As of the Northern States record date, except in a fiduciary capacity, First Midwest and its subsidiaries held no shares of Northern States common stock, and none of its directors and executive officers and their affiliates held shares of Northern States common stock.

Participants in the Northern States Stock Plan

        Northern States sponsors the Northern States Stock Plan. Under the terms of the Northern States Stock Plan, and award agreements thereunder, recipients of restricted stock awards are entitled to vote on behalf of underlying shares, even while subject to vesting requirements, from the date of grant until such awards are forfeited. Holders of Northern States restricted stock will vote in the same manner as holders of Northern States common stock. As of the record date, participants in the Northern States Stock Plan held approximately 3.6% of the shares entitled to vote at the special meeting.

Solicitation of Proxies; Payment of Solicitation Expenses

        Proxies are being solicited by Northern States' board of directors from Northern States stockholders. Shares of Northern States common stock represented by properly executed proxies, and that have not been revoked, will be voted in accordance with the instructions indicated on the proxies. If no instructions are indicated, such proxies representing shares of Northern States common stock will be voted "FOR" the merger proposal and "FOR" the Northern States adjournment proposal, and in the discretion of the individuals named as proxies as to any other matter that may come before the Northern States special meeting.

        First Midwest and Northern States have agreed to each pay for one-half of the costs and expenses (excluding the fees and disbursements of counsel, financial advisors and accountants) of copying, printing and distributing this proxy statement/prospectus and all listing, filing or registration fees, including fees paid for filing the registration statement of which this proxy statement/prospectus is a part with the SEC and any other fees paid for filings with governmental authorities. In addition to the solicitation of proxies by mail, solicitation may be made by certain directors, officers or employees of Northern States or its affiliates telephonically, electronically or by other means of communication. Directors, officers and employees will receive no additional compensation for such solicitation. Although Northern States does not anticipate using a paid proxy solicitor in connection with the special meeting, Northern States may do so if determined to be appropriate.

Voting Your Shares

        Northern States stockholders may vote in person or by proxy at the Northern States special meeting on the proposals upon which they are entitled to vote. Northern States stockholders may also vote by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. To be valid, your vote by mail must be received by the deadline specified on the proxy card.

        YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES OF NORTHERN STATES COMMON STOCK YOU OWN. ACCORDINGLY, YOU SHOULD SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD WHETHER OR NOT YOU PLAN TO ATTEND THE NORTHERN STATES SPECIAL MEETING IN PERSON.

Revocability of Proxies and Changes to a Northern States Stockholder's Vote

        A Northern States stockholder who has submitted a proxy may revoke it or change the stockholder's vote at any time before the shares are voted at the Northern States special meeting by (i) giving a written notice of revocation to Kerry Biegay, Vice President and Secretary of Northern

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States, (ii) attending the Northern States special meeting in person and voting by ballot at the Northern States special meeting, or (iii) by properly submitting to Northern States a duly executed proxy bearing a later date. All written notices of revocation and other communications with respect to revocation of proxies should be addressed to Northern States as follows: 1601 North Lewis Avenue, Waukegan, Illinois 60085, Attention: Kerry Biegay, Vice President and Secretary.

Attending the Northern States Special Meeting

        All holders of Northern States common stock, including stockholders of record and stockholders who hold their shares through brokers, trusts, banks, nominees or any other holder of record, are invited to attend the Northern States special meeting. All stockholders must bring an acceptable form of identification, such as a valid driver's license, in order to attend the Northern States special meeting in person. If you hold shares in street name and would like to attend the Northern States special meeting, you will also need to bring an account statement and a "legal proxy" form from the broker, or other acceptable evidence of ownership of Northern States common stock as of the close of business on the Northern States record date.

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THE MERGER

        The following discussion describes certain material information about the merger. We urge you to read carefully this entire document, including the merger agreement and the financial advisor opinion of Vining Sparks delivered to the board of directors of Northern States, attached as Appendices A and B, respectively, to this proxy statement/prospectus, for a more complete understanding of the merger.

Terms of the Merger

        First Midwest's board of directors and Northern States' board of directors have each unanimously approved and adopted the merger agreement and the transactions contemplated thereby, including the merger. The merger agreement provides for combining our companies through the merger of Northern States with and into First Midwest, with First Midwest as the surviving corporation. As a result, the separate existence of Northern States will terminate. Following the merger at such time as First Midwest may determine, NorStates Bank, Northern States' wholly owned bank subsidiary, will merge with and into First Midwest Bank, First Midwest's wholly owned bank subsidiary, with First Midwest Bank being the surviving bank. Following the bank merger, First Midwest Bank will continue its corporate existence as a commercial bank organized under the laws of the State of Illinois. We expect to complete the merger in the fourth quarter of 2018, although delays may occur.

        Upon completion of the merger, each holder of Northern States common stock will receive the merger consideration, except in certain circumstances and subject to adjustment as described in this proxy statement/prospectus, calculated as follows:

    if the Average First Midwest Stock Price is greater than $26.49, the exchange ratio shall equal the quotient, rounded down to the nearest fourth decimal place, of 0.9775 divided by the Average First Midwest Stock Price, which effectively caps the maximum per share value of the merger consideration you may receive at $0.9775 per share of Northern States common stock;

    if the Average First Midwest Stock Price is greater than or equal to $22.86 and equal to or less than $26.49, the exchange ratio shall equal 0.0369;

    if the Average First Midwest Stock Price is equal to or greater than $20.31 and less than $22.86, the exchange ratio shall equal the quotient, rounded down to the nearest fourth decimal place, of 0.8435 divided by the Average First Midwest Stock Price; or

    if the Average First Midwest Stock Price is less than $20.31 (subject to Northern States' right to terminate the merger agreement and First Midwest's top-up right as described below under "The Merger Agreement—Termination of the Merger Agreement"), the exchange ratio shall equal 0.0415.

        The merger consideration may be subject to adjustment if certain environmental conditions exist with respect to Northern States' real property acquired after June 6, 2018 (if any) and/or title defects exist with respect to any of Northern States' real property and the real property adjustment amount is greater than $100,000. In that case, the exchange ratio will be reduced by an amount equal the result of: (i) the real property adjustment amount, divided by (ii) the number of outstanding shares of Northern States common stock, divided by (iii) the per share volume weighted average price of First Midwest common stock on Nasdaq from 9:30 a.m. to 4:00 p.m., Eastern Time, on the trading day immediately preceding the closing date of the merger.

        Any change in the market price of First Midwest common stock prior to completion of the merger will affect the value of any shares of First Midwest common stock Northern States stockholders receive as consideration in the merger. The market price of First Midwest common stock may fluctuate as a result of a variety of factors, including general market and economic conditions, changes in our respective businesses, operations and prospects, and regulatory considerations. Many of these factors

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are outside our control. Accordingly, at the time of the Northern States special meeting, Northern States stockholders will not know or be able to calculate the market price of First Midwest common stock that they will receive upon completion of the merger.

        All unvested Northern States restricted stock awards outstanding immediately prior to the merger will become fully vested upon completion of the merger, and the holder thereof shall be entitled to receive the same merger consideration for the shares of Northern States common stock subject to such award as all other holders of Northern States common stock.

        For additional and more detailed information regarding the legal documents that govern the merger, including information about the conditions to the merger and the provisions for terminating or amending the merger agreement, see "The Merger Agreement."

Background of the Merger

        The board of directors of Northern States has engaged in a periodic strategic review process during which the board discusses Northern States' strategic direction, performance and prospects in the context of trends and developments in the markets that Northern States serves, the banking industry and the regulatory environment. Among other things, these discussions have focused on the competitive landscape and recent bank acquisition transactions in the Chicago metropolitan market, and possible strategic alternatives available to Northern States. From time to time, the board of directors of Northern States has invited FIG to participate in these discussions.

        On October 18, 2016, FIG was invited to a strategic planning meeting of the board of directors of Northern States and was asked to present information regarding the current market for mergers and acquisitions of financial institutions in the United States and in the Chicago metropolitan market and Northern States' strategic options, including buying another financial institution or selling itself. The board of directors of Northern States determined that it would be in the best interests of Northern States and its stockholders to continue its evaluation of strategic alternatives, including pursuing discussions with possible merger partners. Over the next several months, representatives of Northern States met with representatives of other local banking institutions, on an informal basis, to discuss banking philosophies, market trends, and possible business combinations.

        During the summer of 2017, following discussions with the board of directors of Northern States, FIG began conducting a limited market check and contacted three financial institutions that it believed were potentially interested in an acquisition of Northern States. After confidentiality agreements were signed with these three interested parties, information was made available to permit the interested parties the opportunity to conduct preliminary due diligence. Northern States received preliminary indications of interest from all three of these interested parties.

        On September 28, 2017, FIG was invited to a strategic planning meeting of the board of directors of Northern States and was asked to present the results of the market check as well as provide an update on the current market for mergers and acquisitions of financial institutions in the United States and in the Chicago metropolitan market and Northern States' strategic options, including buying another financial institution or selling itself. The board of directors of Northern States determined that the preliminary indications of interest did not deliver an appropriate value to Northern States' stockholders. As such, the board of directors instructed FIG to find a strategic partner that would be willing to submit an indication of interest more in-line with the board of directors' perceived value of the company.

        Subsequent to the September board meeting, FIG reached out to the three parties from the market check as well as three additional banks that were deemed to have an interest in Northern States, including First Midwest, and communicated the price expectations of the board. Of the new parties contacted, only First Midwest elected to conduct preliminary due diligence. Following

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discussions with all of the parties, Northern States received only two indications of interest that were close to the price expectations of the board, with First Midwest's indication of interest offering the highest value to Northern States' stockholders. First Midwest's initial indication of interest proposed a stock-for-stock exchange at a fixed exchange ratio of 0.0374 shares of First Midwest common stock for each share of Northern States common stock, which represented an implied valuation of $0.95 per share of Northern States common stock based on First Midwest's closing stock price of $25.42 on November 29, 2017. The initial indications of interest also requested that Northern States enter into an exclusivity period to permit the parties to more fully explore and negotiate the terms of a potential transaction.

        On December 1, 2017, the board of directors of Northern States held a special meeting to review the two indications of interest. The board directed FIG to counter both parties to determine whether the terms of the indications could be improved. In addition, the board sought assurances that the impact of potential changes in the tax code on Northern States' deferred tax assets would not negatively impact the offers. First Midwest responded by increasing its proposed fixed exchange ratio, subject to a pricing collar, and confirming that a potential write-down on deferred tax assets due to changes in the tax code would not result in a price reduction. First Midwest's revised indication of interest proposed a stock-for-stock exchange at a fixed exchange ratio of 0.0385 shares of First Midwest common stock for each share of Northern States common stock, which represented an implied valuation of $0.95 per share of Northern States common stock based on First Midwest's closing stock price of $24.63 on December 12, 2017. Under the terms of the proposed pricing collar, if First Midwest's common stock price declined to between and including $20.31 and $22.86 per share, the exchange ratio would be increased to result in a fixed price of $0.88 per share. If First Midwest's common stock price increased to above $26.49 per share, the exchange ratio would be decreased to result in a fixed price of $1.02 per share. If First Midwest's common stock price decreased below $20.31, then the exchange ratio would be fixed at 0.0433 and Northern States would be entitled to terminate the merger agreement, subject to a top-up option by First Midwest to increase the total merger consideration to $0.88 per share. The other party responded by reducing the terms of its indication of interest.

        On December 19, 2017, the board of directors of Northern States held a meeting at which they discussed the revised indications of interest from First Midwest and the other party. The board decided to move forward with First Midwest, given its superior offer, and directed Northern States' management to enter into an exclusivity agreement with First Midwest. On December 22, 2017, First Midwest and Northern States entered into an exclusivity agreement that allowed First Midwest to conduct its due diligence through February 2018.

        Also at the December 19, 2017 Northern States board meeting, the board discussed pre-transaction planning materials that had been prepared and provided by Barack Ferrazzano, Northern States' outside legal counsel. The board of directors of Northern States also discussed entering into an engagement letter with FIG for FIG's financial advisory services in connection with a strategic transaction with First Midwest. Greg Gersack, one of the directors of Northern States and also a managing principal of FIG, informed the board of his conflict of interest regarding the engagement letter due to his role at FIG, and Mr. Gersack recused himself from the discussion and approval of the engagement letter. The board approved the engagement letter, and on December 26, 2017, Northern States executed the engagement letter, which action was subsequently ratified by the board at its meeting held on January 16, 2018.

        On January 15, 2018, representatives of First Midwest conducted on-site due diligence at the offices of Northern States.

        On January 16, 2018, Northern States convened a meeting of its board, with FIG and Barack Ferrazzano as guests at the meeting. FIG described First Midwest's proposal and presented an analysis

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of the proposed merger consideration. Barack Ferrazzano explained to the directors their fiduciary duties in connection with their review and consideration of the proposed transaction with First Midwest. At the conclusion of the meeting, the board of directors of Northern States approved the formation of a strategic committee and authorized the strategic committee to continue evaluating and negotiating the proposal with First Midwest. The strategic committee consisted of Allan Jacobs, Scott Cottrell, Joel Leonard and Barbara Martin, with Scott Yelvington serving as an ex officio member. The strategic committee met several times over the following months to discuss the progress and the terms of the merger.

        Also on January 16, 2018, First Midwest provided an initial draft of the merger agreement to Northern States. This draft of the merger agreement reflected an exchange ratio ranging from 0.0433 shares of First Midwest common stock for each share of Northern States common stock to the number of shares derived from dividing 1.02 by the average stock price of First Midwest (for an implied value of $1.02). This draft also included drafts of a form voting agreement, pursuant to which Northern States directors would vote in favor of the merger and other matters to be voted upon in connection with the merger, and a form confidentiality, non-solicitation and non-competition agreement, which all of the directors of Northern States would be required to enter. However, this draft and the pricing remained subject to further due diligence by First Midwest.

        From January 2018 through March 2018, First Midwest conducted extensive due diligence on Northern States. In late March 2018, First Midwest provided Northern States with an updated proposal lowering the exchange ratio for the merger consideration, primarily based on adjustments to the values of Northern States' other real estate owned ("OREO") properties. The updated proposal provided that if certain OREO properties were sold prior to closing upon specified terms, the exchange ratio would range from 0.0415 shares of First Midwest common stock for each share of Northern States common stock to the number of shares derived from dividing 0.9775 by the average stock price of First Midwest (for an implied value of $0.9775). However, if the OREO properties could not be sold prior to closing upon specified terms, the exchange ratio would range from 0.0410 shares of First Midwest common stock for each share of Northern States common stock to the number of shares derived from dividing 0.9642 by the average stock price of First Midwest (for an implied value of $0.9642).

        On April 4, 2018, First Midwest and Northern States renewed the exclusivity agreement through May 2018 in order for the parties to conclude their respective due diligence and the negotiation of the merger agreement.

        On April 10, 2018, Chapman and Cutler, First Midwest's legal counsel, sent a revised draft of the merger agreement to Barack Ferrazzano, containing the revised terms regarding the merger consideration, among other changes. Following receipt of the revised draft, Barack Ferrazzano and Chapman and Cutler negotiated the merger agreement and the other transaction documents.

        One of the threshold issues in the revised draft of the merger agreement was the terms on which the OREO properties would need to be sold in order to receive the higher exchange ratio as merger consideration. On April 16, 2018, Chapman and Cutler sent Barack Ferrazzano the proposed terms under which the OREO properties would need to be sold to receive the higher exchange ratio. On April 17, 2018, First Midwest and Northern States agreed upon those terms.

        During April, May and early June 2018, First Midwest continued to conduct extensive due diligence of information related to Northern States, including through face-to-face meetings and conference calls between First Midwest management and selected officers of Northern States and NorStates Bank who were responsible for various aspects of Northern States' and NorStates Bank's operations. During the same time period, Northern States and Barack Ferrazzano conducted reverse due diligence concerning First Midwest, which included meetings with management of First Midwest and further documentary due diligence of public information.

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        Throughout the months of April, May and early June, the parties also negotiated drafts of the transaction documents, and Barack Ferrazzano coordinated the review of the proposed documents by Northern States' officers and directors. As proposed by First Midwest, at the time of the execution of the merger agreement, directors of Northern States would be required to agree to non-competition and non-solicitation arrangements and to voting requirements, transfer and disposition restrictions and standstill arrangements with respect to their respective holdings of Northern States common stock, as reflected in a form of confidentiality, non-solicitation and non-competition agreement and a form of voting agreement being negotiated by the parties. In particular, Scott Cottrell, Gregory Gersack, and Joel Leonard, directors of Northern States, requested certain accommodations in their confidentiality, non-solicitation and non-competition agreements so that these restrictions would not prevent them from continuing with their current employment and related activities in investment banking or investment management.

        During this period, Chapman and Cutler and Barack Ferrazzano continued to engage in negotiations to finalize the terms of the proposed transaction. The parties negotiated extensively, among other items, the contents of the representations and warranties, certain closing conditions, covenants regarding real estate, and certain employment matters.

        In early May 2018, once all of the salient business points and legal matters had been decided, the board of Northern States authorized FIG to hire Vining Sparks on behalf of Northern States to issue a fairness opinion in connection with the merger with First Midwest. The board approved the engagement letter with Vining Sparks, and on May 15, 2018, Northern States executed the engagement letter.

        On May 16, 2018, First Midwest's board of directors met with members of First Midwest's executive management team. At this meeting, First Midwest's board of directors considered the proposed transaction and discussed, among other things, the strategic rationale, financial terms, consideration and integration risk for the transaction. First Midwest's board of directors also considered the advice of Sandler O'Neill & Partners, L.P. (``Sandler O'Neill"), First Midwest's financial advisor, and Chapman and Cutler with respect to the proposed transaction. Following these discussions, First Midwest's board of directors unanimously approved and adopted the merger agreement and the transactions contemplated thereby, and declared the merger and other transactions contemplated by the merger agreement to be advisable and in the best interests of First Midwest and its stockholders. The First Midwest board of directors then directed management and its advisors to finalize and execute a definitive merger agreement, subject to final approval by First Midwest's chief executive officer. First Midwest's chief executive officer subsequently confirmed approval of the merger agreement prior to execution on June 6, 2018. The board of directors of First Midwest Bank also unanimously approved the bank merger and recommended to its sole stockholder, First Midwest, that it approve the bank merger, which was subsequently approved by First Midwest.

        On June 5, 2018, Northern States held a board meeting to consider the transaction with First Midwest and the definitive transaction documents, including the merger agreement. As an initial matter, Barack Ferrazzano reviewed with directors their fiduciary duties in connection with their review and consideration of the transaction and the terms of the proposed merger with First Midwest. The board was reminded that this information had been provided and discussed at prior board meetings.

        Following this discussion, representatives of Vining Sparks reviewed the financial aspects of the proposed merger and discussed in detail their financial analyses as of the date of the meeting, including those described under "—Opinion of Northern States' Financial Advisor." At this meeting, Vining Sparks delivered its opinion to the board to the effect that as of June 5, 2018, and based upon and subject to various assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken described in its opinion, the exchange ratio was fair, from a financial point of view, to the holders of Northern States common stock, as described under

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"—Opinion of Northern States' Financial Advisor." In addition, FIG also presented additional analyses regarding the proposed merger from a financial point of view, including a comparison of the merger consideration to that in other recent mergers.

        After further discussion among members of the board, Barack Ferrazzano led a comprehensive review of the definitive transaction documents, including the merger agreement, and directed the attention of the board of directors of Northern States to a memorandum summarizing the terms of the merger agreement, the voting agreements, and the confidentiality, non-solicitation and non-competition agreements that had been provided to each member of the board.

        During the meeting, Northern States' management and legal advisors reported on, and the board of directors of Northern States discussed in detail, the reverse due diligence process undertaken by Northern States and its advisors with respect to First Midwest. Management reported favorably regarding the complementary culture and business objectives of First Midwest and Northern States, noting that the respective customer focus, geographic coverage and historical relationships with borrowers and customers of First Midwest and Northern States evidenced that the two companies shared a similar business orientation.

        Following extensive discussion and after considering the foregoing and the proposed terms of the transaction documents, and taking into consideration the factors described under "—Northern States' Reasons for the Merger and Recommendation of the Board of Northern States," the board of directors of Northern States, having determined that the terms of First Midwest's proposal, the related merger agreement and the transactions contemplated thereby, including the merger, were fair to and in the best interests of Northern States and its stockholders, unanimously approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger and the exchange ratio. The board directed that the merger agreement be submitted to its stockholders for approval, and recommended that stockholders vote in favor of the approval of the merger agreement and the transactions contemplated thereby.

        The merger agreement and related documents were executed by the parties on June 6, 2018. The transaction was announced the morning of June 7, 2018, by a press release issued by First Midwest.

First Midwest's Reasons for the Merger

        In reaching its decision to adopt and approve the merger agreement, the merger and the other transactions contemplated by the merger agreement, the First Midwest board of directors evaluated the merger in consultation with First Midwest management and considered information provided by First Midwest's financial and legal advisors, as well as a number of factors, including the following material factors:

    management's view that the acquisition of Northern States provides an attractive opportunity to strengthen First Midwest's presence in Lake County, Illinois and north metropolitan Chicago;

    Northern States' community banking orientation and its compatibility with First Midwest and its subsidiaries;

    management's assessment that Northern States presents a strong banking franchise that is consistent with First Midwest Bank's relationship-based banking model while adding talent and depth to First Midwest Bank's operations;

    management's review of the business, operations, earnings and financial condition, including capital levels and asset quality, of Northern States and NorStates Bank;

    management's belief that NorStates Bank's core deposit base was strong and that a substantial portion of these deposits would be retained following completion of the merger;

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    management's due diligence review of Northern States and NorStates Bank and the discussions with Sandler O'Neill and Chapman and Cutler related thereto and to other transactional matters;

    the projected earnings per share accretion expected to occur as a result of the proposed transactions;

    the projected tangible book value earn-back period of less than 2.5 years, which is an important investor metric;

    the expectation of management that First Midwest will maintain its strong capital ratios upon completion of the proposed transactions;

    the fact that stockholders of Northern States who hold Northern States common stock will have an opportunity to approve the merger;

    projected efficiencies, including reductions in Northern States' total non-interest expense base, to come from integrating certain of Northern States' operations into First Midwest's existing operations;

    the financial and other terms of the merger agreement, including the exchange ratio for the merger consideration, the expected tax treatment and the deal protection and termination fee provisions, which First Midwest reviewed with its outside financial and legal advisors;

    NorStates Bank's compatibility with First Midwest Bank, which First Midwest management believes should facilitate integration and implementation of the merger and the bank merger, and the complementary nature of the products and customers of NorStates Bank and First Midwest Bank, which First Midwest management believes should provide the opportunity to mitigate integration risks and increase potential returns;

    the nature and amount of payments and other benefits to be received by Northern States and NorStates Bank management in connection with the transactions pursuant to existing Northern States benefit plans and compensation arrangements and the merger agreement;

    the fact that, concurrently with the execution of the merger agreement, all of the directors of Northern States who beneficially owned in the aggregate approximately 7.4% of Northern States' outstanding common stock as of June 6, 2018, were entering into (i) voting agreements with First Midwest agreeing to vote for approval of the merger agreement and the transactions contemplated thereby and (ii) confidentiality, non-solicitation and non-competition agreements with First Midwest; and

    the regulatory and other approvals required in connection with the transactions and the expected likelihood that such regulatory approvals will be received in a reasonably timely manner and without the imposition of unacceptable conditions.

        First Midwest's board of directors believes that the merger and the merger agreement are advisable and in the best interests of First Midwest and its stockholders.

        The foregoing discussion of the information and factors considered by First Midwest's board of directors is not intended to be exhaustive, but includes a description of all material factors considered by First Midwest's board. First Midwest's board of directors further considered various risks and uncertainties related to each of these factors and the ability to complete the merger. In view of the wide variety of factors considered by First Midwest's board of directors in connection with its evaluation of the merger, First Midwest's board did not consider it practical to, nor did it attempt to, quantify, rank or otherwise assign relative weights to the specific factors that it considered. In considering the factors described above, individual directors may have given differing weights to different factors. First Midwest's board of directors collectively made its determination with respect to

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the merger based on the conclusion reached by its members, based on the factors that each of them considered appropriate, that the merger is in the best interests of First Midwest stockholders and that the benefits expected to be achieved from the merger outweigh the potential risks and vulnerabilities.

        It should be noted that this explanation of the First Midwest board of directors' reasoning and all other information presented in this section includes information that is forward-looking in nature, and, therefore, should be read in light of the factors discussed under the heading "Cautionary Statement Regarding Forward-Looking Statements."

Northern States' Reasons for the Merger and Recommendation of the Board of Northern States

        The board of directors of Northern States has concluded that the merger offers Northern States stockholders an attractive opportunity to achieve the board's strategic business objectives, including increasing stockholder value, growing the size of NorStates Bank's business and enhancing liquidity for Northern States stockholders. In addition, the board of directors of Northern States believes that the customers and communities served by NorStates Bank will benefit from the merger.

        In deciding to approve the merger agreement and the transactions contemplated thereby, Northern States' board of directors consulted with Northern States' management, as well as its legal counsel, Barack Ferrazzano, and financial advisors, FIG and Vining Sparks, and considered numerous factors, including the following:

    the value to be received by Northern States stockholders in the merger as compared to stockholder value projected for Northern States as an independent entity;

    the fact that the merger consideration offers Northern States stockholders the opportunity to participate in the future growth and opportunities of the combined company, and that the receipt of the merger consideration will generally be tax-free to Northern States stockholders based on the expected tax treatment of the merger as a "reorganization" for U.S. federal income tax purposes, as further described under "The Merger—Material Federal Income Tax Consequences of the Merger";

    information with respect to the businesses, earnings, operations, financial condition, prospects, capital levels and asset quality of Northern States and First Midwest, both individually and as a combined company;

    the enhanced liquidity for Northern States stockholders with respect to the First Midwest common stock to be received in the merger and the fact that First Midwest is publicly held and the merger would provide access to a public trading market for Northern States stockholders whose investment is currently in a company with a very limited trading market;

    the compatibility of Northern States' geographical footprint with that of First Midwest and the expansion of product and service availability to the customers of and communities currently served by NorStates Bank;

    the market value of First Midwest common stock prior to the execution of the merger agreement and the prospects for future appreciation in the stock;

    the perceived risks and uncertainties attendant to Northern States' operation as an independent banking organization, including the risks and uncertainties related to competition in Northern States' market area, and increased operating and regulatory costs;

    the belief of the board of directors of Northern States that combining with a larger financial institution will benefit stockholders and customers in that the combined organization will be better equipped to respond to economic and industry developments and should be better positioned to develop and build on its position in existing markets;

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    the financial presentation of Northern States' financial advisor, Vining Sparks, to the board of directors of Northern States on June 5, 2018, and the delivery of the written opinion of Vining Sparks, dated June 5, 2018, to the board of directors of Northern States, to the effect that as of such date and based on and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken described in its opinion, the exchange ratio was fair, from a financial point of view, to holders of Northern States common stock, as further described under "—Opinion of Northern States' Financial Advisor";

    the evaluation by the board of directors of Northern States, with the assistance of management and Northern States' financial and legal advisors, of strategic alternatives available to Northern States for facilitating liquidity and enhancing value over the long term for Northern States stockholders and the potential risks, rewards and uncertainties associated with such alternatives, and the board of directors of Northern States' belief that the proposed merger with First Midwest was the best option available to Northern States and its stockholders;

    the potential risk of diverting management attention and resources from the operation of Northern States' business to the merger, and the possibility of employee attrition or adverse effects on customer and business relationships as a result of the announcement and pendency of the merger;

    First Midwest's experience as an acquiror of financial institutions and, as a result, the acceptable execution and integration risk;

    the quality and experience of First Midwest's management team;

    the satisfactory results of Northern States' management's reverse due diligence of First Midwest; and

    the likelihood that the merger will be approved by the relevant bank regulatory authorities without undue burden and in a timely manner.

        The foregoing discussion of the information and factors considered by Northern States' board of directors is not intended to be exhaustive, but includes a description of all material factors considered by Northern States' board. Northern States' board of directors further considered various risks and uncertainties related to each of these factors and the ability to complete the merger. In view of the wide variety of factors considered by Northern States' board of directors in connection with its evaluation of the merger, Northern States' board did not consider it practical to, nor did it attempt to, quantify, rank or otherwise assign relative weights to the specific factors that it considered. In considering the factors described above, individual directors may have given differing weights to different factors. Northern States' board of directors collectively made its determination with respect to the merger based on the conclusion reached by its members, based on the factors that each of them considered appropriate, that the merger is in the best interests of Northern States stockholders and that the benefits expected to be achieved from the merger outweigh the potential risks and vulnerabilities.

        After considering the foregoing and other relevant factors and risks, and their overall impact on the stockholders and other constituencies of Northern States, Northern States' board of directors concluded that the anticipated benefits of the merger outweighed the anticipated risks of the transaction. Accordingly, Northern States' board of directors unanimously approved the merger agreement and the merger, and the board of directors unanimously recommends that Northern States stockholders vote "FOR" the proposal to approve and adopt the merger agreement and the transactions contemplated thereby, including the merger, and "FOR" the Northern States adjournment proposal.

        In considering the recommendation of the board of directors of Northern States, you should be aware that the directors and executive officers of Northern States have interests in the merger that are

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different from, or in addition to, interests of stockholders of Northern States generally and may create potential conflicts of interest. The board of directors of Northern States was aware of these interests and considered them when evaluating and negotiating the merger agreement, the merger and the other transactions contemplated by the merger agreement, and in recommending that holders of Northern States common stock vote in favor of the merger proposal. See "The Merger—Interests of Certain Persons in the Merger."

        It should be noted that this explanation of the Northern States board of directors' reasoning and all other information presented in this section includes information that is forward-looking in nature, and, therefore, should be read in light of the factors discussed under the heading "Cautionary Statement Regarding Forward-Looking Statements."

Opinion of Northern States' Financial Advisor

        Northern States' board of directors retained Vining Sparks to render financial advisory and investment banking services. Vining Sparks is a nationally recognized investment banking firm with substantial expertise in transactions similar to the proposed transaction and is familiar with Northern States and its business. As part of its investment banking business, Vining Sparks is regularly engaged in the valuation of financial services companies and their securities in connection with mergers and acquisitions, private placements and valuations for estate, corporate and other purposes.

        On June 5, 2018, Vining Sparks delivered its opinion to Northern States that the merger consideration to be received by Northern States common stockholders in the proposed transaction is fair, from a financial point of view, to Northern States' common stockholders. The full text of Vining Sparks' opinion is attached as Appendix B to this proxy statement/prospectus and should be read in its entirety.

        Vining Sparks' opinion was directed to Northern States' board of directors and is limited to the fairness, from a financial point of view, of the consideration to be received by Northern States common stockholders in the proposed transaction. It did not address Northern States' underlying business decision to proceed with the proposed transaction or constitute a recommendation to the board of directors of Northern States as to how it should vote on the merger, and does not constitute a recommendation to any holder of Northern States common stock as to how such stockholder should vote in connection with the merger.

        Vining Sparks' opinion was reviewed and approved by Vining Sparks' Fairness Opinion Committee in conformity with its policies and procedures established under the requirements of Rule 5150 of the Financial Industry Regulatory Authority.

        For purposes of Vining Sparks' opinion and in connection with its review of the proposed transaction, Vining Sparks has, among other things:

    reviewed the terms of the merger agreement made available to Vining Sparks;

    reviewed certain publicly available financial statements, both audited (where available) and un-audited, and related financial information of Northern States and First Midwest, including those included in their respective annual and quarterly reports for the past two years;

    reviewed publicly available consensus "street estimates" of First Midwest earnings for 2018 and 2019 and reviewed publicly available research reports;

    reviewed certain financial forecasts and projections of Northern States, prepared by Northern States management, as well as the amount and timing of the cost savings and related expenses and synergies expected to result from the merger furnished to Vining Sparks by Northern States management;

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    held discussions with senior management of Northern States concerning the past and current results of operations of Northern States, its current financial condition and management's opinion of its future prospects;

    reviewed reported market prices and historical trading activity of First Midwest and Northern States common stock and reviewed the trading collar for First Midwest as defined in Section 3.1 of the merger agreement;

    reviewed certain aspects of the financial performance of First Midwest and Northern States and compared such financial performance of First Midwest and Northern States, together with stock market data relating to First Midwest and Northern States common stock, with similar data available for certain other financial institutions the securities of which are publicly traded;

    reviewed the financial terms of merger and acquisition transactions, to the extent publicly available, involving financial institutions and financial institution holding companies that Vining Sparks deemed to be relevant;

    reviewed the pro forma financial impact of the merger on Northern States; and

    reviewed such other information, financial studies, analyses and investigations, as Vining Sparks considered appropriate under the circumstances.

        In conducting its review and arriving at its opinion, Vining Sparks has assumed and relied, without independent verification, upon the accuracy and completeness of all of the financial and other information that has been provided to it by Northern States and First Midwest, and their respective representatives, and of the publicly available information that was reviewed by Vining Sparks. Vining Sparks is not an expert in the evaluation of the adequacy of allowances for loan losses and it did not independently verify the adequacy of such allowances. Vining Sparks assumed that the allowance for loan losses set forth in the financial statements of First Midwest and Northern States were adequate to cover such losses and complied fully with applicable law, regulatory policy and sound banking practice as of the date of such financial statements. Vining Sparks did not conduct a physical inspection of any of the properties or facilities of Northern States or First Midwest, did not make any independent evaluation or appraisal of the assets, liabilities or prospects of Northern States or First Midwest, was not furnished with any such evaluation or appraisal, and did not review any individual credit files. Vining Sparks assumed that any projections provided by or approved by Northern States were reasonably prepared and reflect the best currently available estimates and judgments of Northern States management.

        Vining Sparks' opinion is necessarily based on economic, market, and other conditions as in effect on, and the information made available to it as of, the date of its opinion. Events occurring after the date thereof, including but not limited to, changes affecting the securities markets, the results of operations or material changes in the assets or liabilities of First Midwest or Northern States could materially affect the assumptions used in preparing the opinion. Vining Sparks assumed that there were no material changes in the assets, liabilities, financial condition, results of operations, business or prospects of either Northern States or First Midwest since the date of the last financial statements of each entity that were made available to Vining Sparks. Vining Sparks assumed that all of the representations and warranties contained in the merger agreement and all related agreements are true and correct, that each party to the merger agreement will perform all of the covenants required to be performed by each party under such agreement and that the conditions precedent in the merger agreement are not waived.

        In delivering its opinion to the board of directors of Northern States, Vining Sparks prepared and delivered to Northern States' board of directors written materials containing various analyses and other information. The following is a summary of the material financial analyses performed by Vining Sparks in connection with the preparation of its opinion and does not purport to be a complete description of

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all the analyses performed by Vining Sparks. The summary includes information presented in tabular format, which should be read together with the text that accompanies those tables. The preparation of a fairness opinion is a complex process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. Therefore, an opinion is not necessarily susceptible to partial analysis or summary description. Vining Sparks believes that its analyses must be considered as a whole and that selecting portions of such analyses and the factors considered therein, without considering all factors and analyses, could create an incomplete view of the analyses and the processes underlying its opinion. In its analyses, Vining Sparks made numerous assumptions with respect to industry performance, business and economic conditions, and other matters, many of which are beyond the control of Northern States, First Midwest and Vining Sparks. Any estimates contained in Vining Sparks' analyses are not necessarily indicative of future results or values, which may be significantly more or less favorable than such estimates. Estimates of values of companies do not purport to be appraisals or necessarily reflect the prices at which companies or their securities may actually be sold.

        Vining Sparks' opinion was based on information available to Vining Sparks through the date of its opinion and conditions as they existed and could be evaluated on the date thereof. Vining Sparks reviewed the financial terms of the proposed transaction set forth in the merger agreement and for purposes of the financial analyses described below, and based on merger consideration of 0.0369 of a share of First Midwest for each outstanding share of Northern States and a value of $25.71 per share for First Midwest, assumed that the merger consideration would equal $0.95 per share.

        Selected Company Analysis—First Midwest.    Vining Sparks used publicly available information to compare selected financial information and stock pricing for First Midwest with a selected group of financial institutions. The First Midwest selected peer group consisted of publicly traded regional banks with total assets between $5 billion and $20 billion, excluding merger targets. While Vining Sparks believes that the companies listed below are similar to First Midwest, none of these companies have the same composition, operations, size or financial profile as First Midwest.

Company
  Ticker   City   State
1st Source Corporation   SRCE   South Bend   IN
Central Bancompany, Inc.    CBCY.B   Jefferson City   MO
Chemical Financial Corporation   CHFC   Midland   MI
Enterprise Financial Services Corp   EFSC   Clayton   MO
First Busey Corporation   BUSE   Champaign   IL
First Financial Bancorp.    FFBC   Cincinnati   OH
First Merchants Corporation   FRME   Muncie   IN
Great Western Bancorp, Inc.    GWB   Sioux Falls   SD
Heartland Financial USA, Inc.    HTLF   Dubuque   IA
Midland States Bancorp, Inc.    MSBI   Effingham   IL
Old National Bancorp   ONB   Evansville   IN
Park National Corporation   PRK   Newark   OH

        To perform this analysis, Vining Sparks used financial information as of March 31, 2018, a price of $25.71 for First Midwest (the 20 day average closing price on June 1, 2018) and pricing data for the

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selected peer group as of June 1, 2018 obtained from SNL Financial LC. The following table sets forth the comparative financial and market data:

 
  First Midwest   Selected
Peer Group
Median
 

Total Assets (in millions)

  $ 14,380.0   $ 9,185.6  

LTM Return on Average Assets

    0.77 %   1.05 %

LTM Return on Average Equity

    5.86 %   8.52 %

Equity/Assets

    13.00 %   12.05 %

Loans/Deposits

    95.79 %   91.03 %

Loan Loss Reserve/Gross Loans

    0.89 %   0.91 %

Nonperforming Assets/Assets

    0.65 %   0.60 %

Efficiency Ratio

    59.05 %   57.79 %

Price/Book Value Per Share

    1.42x     1.66x  

Price/Tangible Book Value Per Share

    2.38x     2.49x  

Price/LTM Earnings Per Share

    24.3x     20.2x  

        Selected Company Analysis—Northern States.    Vining Sparks used publicly available information to compare selected financial information and proposed stock pricing for Northern States with a selected group of financial institutions. The Northern States selected peer group consisted of publicly traded Illinois banking organizations with total assets under $10 billion, excluding merger targets. While Vining Sparks believes that the companies listed below are similar to Northern States, none of these companies have the same composition, operations, size or financial profile as Northern States.

Company
  Ticker   City   State
BankFinancial Corporation   BFIN   Burr Ridge   IL
Byline Bancorp, Inc.    BY   Chicago   IL
Chester Bancorp, Inc.    CNBA   Chester   IL
First Bankers Trustshares, Inc.    FBTT   Quincy   IL
First Busey Corporation   BUSE   Champaign   IL
First Mid-Illinois Bancshares, Inc.    FMBH   Mattoon   IL
First Robinson Financial Corporation   FRFC   Robinson   IL
Foresight Financial Group, Inc.    FGFH   Winnebago   IL
Marquette National Corporation   MNAT   Chicago   IL
Midland States Bancorp, Inc.    MSBI   Effingham   IL
Old Second Bancorp, Inc.    OSBC   Aurora   IL
Pontiac Bancorp, Inc.    PONT   Pontiac   IL
QCR Holdings, Inc.    QCRH   Moline   IL
Town and Country Financial Corp.    TWCF   Springfield   IL
Town Center Bank   TCNB   New Lenox   IL
West Suburban Bancorp, Inc.    WNRP   Lombard   IL

        To perform this analysis, Vining Sparks used financial information as of March 31, 2018, a price of $0.78 for Northern States (the closing price on June 1, 2018) and pricing data for the selected peer

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group as of June 1, 2018 obtained from SNL Financial LC. The following table sets forth the comparative financial and market data:

 
  Northern
States
  Selected
Peer Group
Median
 

Total Assets (in millions)

  $ 487.1   $ 1,570.4  

LTM Return on Average Assets

    –1.19 %   0.71 %

LTM Return on Average Equity

    –10.27 %   7.26 %

Equity/Assets

    10.91 %   10.08 %

Loans/Deposits

    80.12 %   86.23 %

Loan Loss Reserve/Gross Loans

    2.17 %   1.05 %

Nonperforming Assets/Assets

    3.59 %   0.72 %

Efficiency Ratio

    75.95 %   65.69 %

Price/Book Value Per Share

    1.35x     1.31x  

Price/Tangible Book Value Per Share

    1.35x     1.41x  

Price/LTM Earnings Per Share

    N/M     18.1x  

        Stock Trading History.    Vining Sparks reviewed the closing per share market prices and volumes for First Midwest common stock and Northern States common stock on a daily basis from June 1, 2017 to June 1, 2018. First Midwest common stock is listed for trading on the Nasdaq Stock Market under the symbol "FMBI." For the period between June 1, 2017 to June 1, 2018, the closing price of First Midwest common stock ranged from a low of $20.50 to a high of $26.92. The closing price on June 1, 2018 was $26.52 per share and the 20-day average closing price was $25.71 and the average daily trading volume for First Midwest was 640,549 shares.

        Northern States common stock is quoted on the OTC Pink market under the symbol "NSFC." For the period between June 1, 2017 to June 1, 2018, the closing price of Northern States common stock ranged from a low of $0.72 to a high of $0.98, with an average closing price for the period of $0.80. The closing price on June 1, 2018 was $0.78 per share and the average daily trading volume for Northern States was 16,826 shares. The transaction value of $0.95 represented a 22% premium over Northern States' closing price on June 1, 2018.

        Analysis of Selected Financial Institution Transactions.    Vining Sparks reviewed certain publicly available information regarding selected merger and acquisition transactions (the "Comparable Transactions") announced from January 1, 2017 to June 1, 2018 involving Midwest financial institutions with total assets between $100 million and $1 billion and nonperforming assets to total assets over

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1.00%. The transactions included in the group are shown in the following chart. This data was obtained from SNL Financial LC.

Buyer
  State  
Seller
  State
Southern Missouri Bancorp, Inc.    MO   Tammcorp, Inc.    MO
First Busey Corporation   IL   Mid Illinois Bancorp, Inc.    IL
Topeka Bancorp Inc.    KS   Kaw Valley Bancorp, Inc.    KS
United Bancshares, Inc.    OH   Benchmark Bancorp, Inc.    OH
Bank First National Corporation   WI   Waupaca Bancorporation, Inc.    WI
Horizon Bancorp   IN   Lafayette Community Bancorp   IN
QCR Holdings, Inc.    IL   Guaranty B&TC & certain assets   IA
Horizon Bancorp   IN   Wolverine Bancorp, Inc.    MI
First American Bank Corporation   IL   Southport Financial Corporation   WI
MutualFirst Financial, Inc.    IN   Universal Bancorp   IN
Heartland Financial USA, Inc.    IA   Signature Bancshares, Inc.    MN
Guaranty Federal Bancshares, Inc.    MO   Hometown Bancshares, Inc.    MO
Independent Bank Corporation   MI   TCSB Bancorp, Inc.    MI
Investor group   N/A   St. Louis Bancshares, Inc.    MO
Equity Bancshares, Inc.    KS   Adams Dairy Bancshares, Inc.    MO
Old Second Bancorp, Inc.    IL   Greater Chicago Financial Corp.    IL
CNB Bank Shares, Inc.    IL   Jacksonville Bancorp, Inc.    IL
NorthWest Indiana Bancorp   IN   First Personal Financial Corporation   IL
Ames National Corporation   IA   Clarke County State Bank   IA
Stifel Financial Corp.    MO   Business Bancshares, Inc.    MO

        Vining Sparks reviewed the multiples of transaction value to book, transaction value to tangible book, transaction value to earnings, transaction value to assets and tangible book premium to core deposits and calculated high, low, mean and median multiples for the Comparable Transactions. The median multiples were then applied to Northern States' balance sheet information as of March 31, 2018, earnings for 2017 and estimated earnings for 2018 to derive an implied range of values for Northern States. The following table sets forth the median multiples as well as the implied values based upon those median multiples. The results of the analysis are set forth in the following table:

 
  Comparable
Transaction
Median Multiple
  Implied
Value
(Per Share)
 

Transaction Value/Book Value

    1.48x   $ 0.85  

Transaction Value/Tangible Book Value

    1.51x   $ 0.87  

Transaction Value/2017 Earnings

    19.91x     N/M  

Transaction Value/Estimated 2018 Earnings

    19.91x   $ 0.96  

Transaction Value/Assets

    15.76 % $ 0.83  

Tangible Premium/Core Deposits

    9.60 % $ 0.95  

        No company or transaction used as a comparison in the above analysis is identical to Northern States or the proposed transaction. Accordingly, an analysis of these results is not strictly mathematical. An analysis of the results of the foregoing involves complex considerations and judgments concerning differences in financial and operating characteristics of Northern States and the companies included in the Comparable Transactions. The transaction value of $0.95 is within the range of implied values computed using the Comparable Transactions, which supports the fairness of the transaction.

        Present Value Analysis.    Vining Sparks calculated the present value of theoretical future earnings of Northern States and compared the transaction value to the calculated present value of Northern States' common stock on a stand-alone basis. Based on projected earnings for Northern States of $4.43 million in 2018, $4.79 million in 2019, $5.46 million in 2020, $6.27 million in 2021 and $6.74 million in 2022, a

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discount rate of 14%, and including a residual value, the stand-alone present value of Northern States equaled $0.54 per share. The transaction value of $0.95 per share is above this value, which supports the fairness of the transaction.

        Discounted Cash Flow Analysis.    Using a discounted cash flow analysis, Vining Sparks estimated the net present value of the future streams of after-tax cash flow that Northern States could produce to benefit a potential acquirer, referred to as dividendable net income, and added a terminal value. Based on projected earnings for Northern States for 2018 through 2022 indicated above, Vining Sparks assumed after-tax distributions to a potential acquirer such that its Tier 1 leverage ratio would be maintained at 8.00%. The terminal value for Northern States was calculated based on Northern States' projected 2022 equity, and the median price to tangible book multiple paid in the Comparable Transactions and utilized discount rate of 14%. This discounted cash flow analysis indicated an implied value of $0.68 per share. The transaction value of $0.95 per share is above this value, which supports the fairness of the transaction.

        Pro Forma Merger Analysis.    Vining Sparks performed pro forma merger analyses to calculate the financial implications of the merger to Northern States common stockholders. This analysis assumes, among other things, the terms of the transaction as indicated above, that the merger closes at December 31, 2018 and cost savings and revenue enhancement opportunities of $7.0 million annually in the years 2019 through 2022, which approximates 50% of Northern States' 2017 overhead expenses (excluding expenses for other real estate). This analysis utilized earnings estimates of $1.61 per share in 2018, $1.97 per share in 2019 and $2.18 per share in 2020 for First Midwest and earnings estimates of $0.05 per share in 2018, $0.05 per share in 2019 and $0.06 per share in 2020 for Northern States. This analysis indicated that in 2019 and 2020, the merger would be approximately 42% and 38% accretive, respectively, to Northern States' projected earnings per share.

        In the two years prior to the issuance of this opinion, Vining Sparks has not provided financial advisory services to Northern States. In the two years prior to the issuance of this opinion, Vining Sparks engaged in securities and loan sales and trading activity with First Midwest and/or its subsidiary bank for which Vining Sparks was paid an immaterial amount of commissions or other fees, which may include mark-ups on the purchase or sale of loans and securities. Pursuant to the terms of an engagement letter with Northern States, Vining Sparks received a fee of $70,000 upon delivery of its opinion. Vining Sparks' opinion fee is not contingent upon consummation of the proposed transaction. In addition, Northern States has agreed to indemnify Vining Sparks against certain liabilities and expenses arising out of or incurred in connection with its engagement, including liabilities and expenses which may arise under the federal securities laws.

Material Federal Income Tax Consequences of the Merger

        The following discussion addresses the material United States federal income tax consequences of the merger to U.S. holders (as defined below) of Northern States common stock. The discussion is based on the provisions of the Code, its legislative history, U.S. Treasury regulations, administrative rulings and judicial decisions, all as currently in effect as of the date hereof and all of which are subject to change (possibly with retroactive effect) and all of which are subject to differing interpretations. Tax considerations under foreign, state, local or federal laws other than those pertaining to income tax are not addressed in this proxy statement/prospectus.

        For purposes of this discussion, we use the term "U.S. holder" to mean a beneficial owner that is:

    an individual citizen or resident of the United States;

    a corporation (or other entity taxable as a corporation for United States federal income tax purposes) created or organized under the laws of the United States or any of its political subdivisions;

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    a trust that (i) is subject to the supervision of a court within the United States and the control of one or more U.S. persons or (ii) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person; or

    an estate that is subject to United States federal income taxation on its income regardless of its source.

        This discussion applies only to Northern States stockholders that hold their Northern States common stock as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment), and does not address all aspects of United States federal taxation that may be relevant to a particular U.S. holder in light of its personal circumstances or to U.S. holders subject to special treatment under the United States federal income tax laws, including:

    financial institutions;

    qualified insurance plans;

    qualified retirement plans and individual retirement accounts;

    investors in pass-through entities;

    persons liable for the alternative minimum tax;

    insurance companies;

    mutual funds;

    tax-exempt organizations;

    brokers or dealers in securities or currencies;

    traders in securities that elect to use a mark-to-market method of accounting;

    persons that hold Northern States common stock as part of a straddle, hedge, constructive sale or conversion transaction;

    regulated investment companies;

    real estate investment trusts;

    persons whose "functional currency" is not the U.S. dollar;

    persons who are not citizens or residents of the United States; and

    stockholders who acquired their shares of Northern States common stock through the exercise of an employee stock option, as a restricted stock award, or otherwise as compensation.

        If a partnership or other entity taxed as a partnership holds Northern States common stock, the tax treatment of a partner in the partnership will depend upon the status of the partner and the activities of the partner and partnership. Partnerships and partners in such a partnership should consult their tax advisors about the tax consequences of the merger to them.

        The parties intend for the merger to be treated as a "reorganization" for U.S. federal income tax purposes. It is a condition to Northern States' obligation to complete the merger that Northern States receives a written opinion of its counsel, Barack Ferrazzano, dated as of the closing date, to the effect that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Code. It is a condition to First Midwest's obligation to complete the merger that First Midwest receives an opinion of its counsel, Chapman and Cutler, dated as of the closing date, to the effect that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Code. These opinions will be based on the assumption that the merger will be completed in the manner set forth in the merger agreement and the registration statement on Form S-4 of which this proxy statement/prospectus is a

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part, and on representation letters provided by First Midwest and Northern States to be delivered at the time of the closing. Those opinions will also be based on the assumption that the representations found in the representation letters are, as of the effective time, true and complete without qualification and that the representation letters are executed by appropriate and authorized officers of First Midwest and Northern States. If any of the assumptions or representations upon which such opinions are based is inconsistent with the actual facts with respect to the merger, the United States federal income tax consequences of the merger could be adversely affected.

        In addition, neither of the tax opinions given in connection with the merger or in connection with the filing of the registration statement on Form S-4 of which this proxy statement/prospectus is a part will be binding on the Internal Revenue Service or any court. Neither First Midwest nor Northern States has sought or intends to request any ruling from the Internal Revenue Service as to the United States federal income tax consequences of the merger, and consequently, there is no guarantee that the Internal Revenue Service will treat the merger as a "reorganization" within the meaning of Section 368(a) of the Code or that a court would not sustain a position to the contrary to any of the positions set forth herein.

        The actual tax consequences of the merger to you may be complex and will depend on your specific situation and on factors that are not within our control. You should consult with your own tax advisor as to the tax consequences of the merger in your particular circumstances, including the applicability and effect of the 3.8% Medicare tax on unearned income, the alternative minimum tax and any state, local or foreign and other tax laws and of any changes in those laws.

        Tax Consequences of the Merger.    Based upon the facts and representations contained in the representation letters received from First Midwest and Northern States in connection with the filing of the registration statement on Form S-4 of which this proxy statement/prospectus is a part, it is the opinion of Chapman and Cutler and Barack Ferrazzano that:

    For United States federal income tax purposes, the merger will be treated as a reorganization within the meaning of Section 368(a) of the Code;

    No gain or loss will be recognized by Northern States as a result of the merger,

    No gain or loss will be recognized by Northern States as a result of the distribution of common stock of First Midwest to common stockholders of Northern States;

    Gain (but not loss) may be recognized by U.S. common stockholders of Northern States who receive First Midwest common stock and cash in exchange for common stock of Northern States pursuant to the merger, in an amount equal to the lesser of (i) the amount by which the sum of the fair market value of the First Midwest common stock and cash received by a U.S. common stockholder of Northern States exceeds such U.S. holder's basis in its Northern States common stock and (ii) the amount of cash received by such U.S. holder of Northern States common stock (except with respect to any cash received instead of fractional share interests in First Midwest common stock);

    The basis of First Midwest common stock received by Northern States stockholders in connection with the merger will, in the aggregate, be the same as the basis, in the aggregate, of Northern States stock surrendered by such Northern States stockholder in the merger (after taking into account cash received in lieu of fractional shares by such stockholder), adjusted by any gain recognized by the stockholder in the merger;

    The holding period of First Midwest common stock received by a Northern States stockholder will be determined by including such stockholder's holding period for Northern States common stock exchanged therefor, provided that such stock was held by such stockholder as a capital asset on the date of exchange;

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    First Midwest will not recognize gain or loss as a result of the merger of Northern States with and into First Midwest;

    The basis of the assets of Northern States transferred to First Midwest in the merger will be the same in the hands of First Midwest as the basis of such assets in the hands of Northern States immediately prior to the transfer, adjusted by any gain recognized by Northern States stockholders in the merger;

    The holding periods of the assets of Northern States transferred to First Midwest in the merger in the hands of First Midwest will include the periods during which such assets were held by Northern States; and

    First Midwest will succeed to and take into account the items of Northern States described in Code Section 381(c), including net operating losses and earnings and profits, subject to certain conditions and limitations.

        If U.S. holders of Northern States common stock acquired different blocks of shares of Northern States common stock at different times or at different prices, such holders' basis and holding period may be determined with reference to each block of Northern States common stock. A loss realized on the exchange of one block of shares cannot be used to offset a gain realized on the exchange of another block of shares, but a U.S. holder will generally be able to reduce its capital gains by capital losses in determining its income tax liability. Any such holders should consult their tax advisors regarding the manner in which First Midwest common stock received in the exchange should be allocated among different blocks of Northern States common stock and with respect to identifying the bases or holding periods of the particular shares of First Midwest common stock received in the merger.

        Cash Received In Lieu of a Fractional Share.    A U.S. holder of Northern States common stock who receives cash in lieu of a fractional share of First Midwest common stock will be treated as having received the fractional share pursuant to the merger and then as having exchanged the fractional share for cash in a redemption by First Midwest. As a result, such U.S. holder will generally recognize gain or loss equal to the difference between the amount of cash received and the basis in his or her fractional share interest as set forth above. This gain or loss will generally be capital gain or loss, and will be long-term capital gain or loss if, as of the effective date of the merger, such U.S. holder's holding period for such shares is greater than one year. For U.S. holders of Northern States common stock that are non-corporate holders, long-term capital gain generally will be taxed at a U.S. federal income tax rate that is lower than the rate for ordinary income or for short-term capital gains. The deductibility of capital losses is subject to limitations. See the above discussion regarding blocks of stock that were purchased at different times or at different prices.

        Medicare Tax on Unearned Income.    In addition, net investment income of certain high-income individual taxpayers may also be subject to an additional 3.8% tax (i.e., the net investment income tax) on the lesser of (i) his or her net investment income for the relevant taxable year or (ii) the excess of his or her modified adjusted gross income for the taxable year over a certain threshold (between $125,000 and $250,000 depending on the individual's U.S. federal income tax filing status). A similar regime applies to estates and trust. Net investment income generally would include any capital gain realized in connection with a merger.

        Backup Withholding and Information Reporting.    Payments of cash to a U.S. holder of Northern States common stock pursuant to the merger are subject to information reporting and may, under certain circumstances, be subject to backup withholding, unless such stockholder provides First Midwest with its taxpayer identification number and otherwise complies with the backup withholding rules. Any amounts withheld from payments to a U.S. holder of Northern States common stock under the backup withholding rules are not additional tax and generally will be allowed as a refund or credit against such

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U.S. holder's federal income tax liability; provided that such U.S. holder timely furnishes the required information to the Internal Revenue Service.

        A U.S. holder of Northern States common stock who receives First Midwest common stock as a result of the merger will be required to retain records pertaining to the merger. Each U.S. holder of Northern States common stock who is required to file a U.S. federal income tax return and who is a "significant holder" that receives First Midwest common stock in the merger will be required to file a statement with such U.S. federal income tax return in accordance with Treasury Regulations Section 1.368-3 setting forth information regarding the parties to the merger, the date of the merger, such holder's basis in the Northern States common stock surrendered and the fair market value of First Midwest common stock and cash received in the merger. A "significant holder" is a holder of Northern States common stock who, immediately before the merger, owned at least 1% of the outstanding stock of Northern States or securities of Northern States with a basis for federal income tax purposes of at least $1 million.

        Tax Implications to Non-U.S. Shareholders.    For purposes of this discussion, the term "non-U.S. holder" means a beneficial owner of Northern States common stock (other than an entity treated as a partnership for U.S. federal income tax purposes) that is not a U.S. holder. The rules governing the U.S. federal income taxation of non-U.S. holders are complex, and no attempt will be made herein to provide more than a limited summary of those rules. Any gain a non-U.S. holder recognizes from the exchange of Northern States common stock for First Midwest common stock and cash in the merger generally will not be subject to U.S. federal income taxation unless (i) the gain is effectively connected with a trade or business conducted by the non-U.S. holder in the United States, or (ii) in the case of a non-U.S. holder who is an individual, such shareholder is present in the United States for 183 days or more in the taxable year of the sale and other conditions are met. Non-U.S. holders described in (i) above will be subject to tax on gain recognized at applicable U.S. federal income tax rates and, in addition, non-U.S. holders that are corporations (or treated as corporations for U.S. federal income tax purposes) may be subject to a branch profits tax equal to 30% (or a lesser rate under an applicable income tax treaty) on their effectively connected earnings and profits for the taxable year, which would include such gain. Non-U.S. holders described in (ii) above will be subject to a flat 30% tax on any gain recognized, which may be elimintated or reduced by an applicable treaty or offset by U.S. source capital losses.

        The preceding discussion is intended only as a summary of material United States federal income tax consequences of the merger. It is not a complete analysis or discussion of all potential tax effects that may be important to you. Thus, you are strongly encouraged to consult your tax advisor as to the specific tax consequences resulting from the merger, including tax return reporting requirements, the applicability and effect of federal, state, local, and other tax laws and the effect of any proposed changes in the tax laws, including the applicability and effect of the 3.8% Medicare tax on unearned income, the alternative minimum tax and any state, local or foreign and other tax laws and of changes in those laws.

Accounting Treatment

        First Midwest will account for the merger as a purchase by First Midwest of Northern States under GAAP. Under the purchase method of accounting, the total consideration paid in connection with the merger is allocated among Northern States' assets, liabilities and identified intangibles based on the fair values of the assets acquired, the liabilities assumed and the identified intangibles. The difference between the total consideration paid in connection with the merger and the fair values of the assets acquired, the liabilities assumed and the identified intangibles, if any, is allocated to goodwill. The results of operations of Northern States will be included in First Midwest's results of operations from the date of acquisition.

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Interests of Certain Persons in the Merger

    General

        In considering the recommendations of Northern States' board of directors with respect to the merger, you should be aware that certain directors and executive officers of Northern States and/or NorStates Bank have agreements or arrangements that provide them with interests in the merger, including financial interests, that may be different from, or in addition to, the interests of the other stockholders of Northern States. Northern States' board of directors was aware of these interests during its deliberations of the merits of the merger and in determining to recommend that holders of Northern States common stock vote in favor of the merger proposal (and thereby approve the transactions contemplated by the merger agreement, including the merger). These interests are described in more detail below, and certain of them are quantified in the narrative below.

    Stock Ownership

        As of July 6, 2018, Northern States' directors and executive officers and their affiliates held approximately 8,683,485 shares of Northern States common stock, representing approximately 9.4% of the outstanding shares of Northern States common stock. For more information, see "Security Ownership of Certain Northern States Beneficial Owners and Management."

    Treatment of Northern States Restricted Stock Awards

        To the extent a director or executive officer of Northern States and/or NorStates Bank holds unvested restricted stock awards, upon completion of the merger, such awards will become fully earned and vested per the terms of the Northern States Stock Plan and the award agreements issued thereunder, and the shares of Northern States common stock subject to such awards will be converted to First Midwest common stock as discussed in the "The Merger Agreement—Merger Consideration," subject to any required withholding tax. As of the date of the merger agreement, directors and executive officers of Northern States and NorStates Bank, as a group, held 2,100,000 shares of Northern States common stock as unvested restricted stock awards under the Northern States Stock Plan. Upon completion of the merger, Scott Yelvington, who serves as NorStates Bank President and Chief Executive Officer, will vest in 440,000 shares of restricted stock, Patricia Christian, who serves as NorStates Bank Chief Operating Officer, will vest in 400,000 shares of restricted stock, Matthew Tilton, who serves as NorStates Bank Chief Lending Officer, will vest in 360,000 shares of restricted stock, and Randall Sara, who serves as NorStates Bank Chief Financial Officer, will vest in 300,000 shares of restricted stock. In addition, the non-employee directors of Northern States and NorStates Bank will vest in shares of restricted stock as follows: Theodore Bertrand—100,000 shares; Jack Blumberg—100,000 shares; George Bridges—20,000 shares; Scott Cottrell—40,000 shares; Frank Furlan—100,000 shares; Gregory Gersack—40,000 shares; Allan Jacobs—100,000 shares; Joel Leonard—20,000 shares; and Barbara Martin—80,000 shares. Based on the 20-day volume weighted average price per share of First Midwest common stock of $26.7862 as of August 20, 2018 and assuming an exchange ratio of 0.0364, as a result of the exchange of their Northern States unvested restricted stock holdings as of the Northern States record date that vest on the completion of the merger, it is estimated that the executive officers of Northern States, Mr. Yelvington, Ms. Christian, Mr. Tilton and Mr. Sara would respectively receive FMBI common stock equal to a net cash value of approximately $429,008, $390,007, $351,006 and $292,505, and non-employee directors of Northern States would receive FMBI common stock equal to an aggregate net cash value of approximately $585,011, prior to any applicable tax withholdings.

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    Employment Agreements

        NorStates Bank is party to employment agreements with each of Mr. Yelvington, Ms. Christian and Mr. Tilton (whom we will refer to both individually and collectively as the "senior executive"). The employment agreements provide for certain severance benefits in the event the senior executive's employment is terminated by NorStates Bank without just cause or by the senior executive for good reason, including after a change in control of NorStates Bank or Northern States. Good reason includes a material reduction in compensation structure; the assignment of duties inconsistent with the senior executive's position, duties, responsibilities or status; a change in the senior executive's titles or offices; or a requirement for the senior executive to relocate to an office more than 30 miles from the senior executive's current office location. In the event of a qualifying termination, among other benefits, the senior executive would be entitled to one year of his or her base salary plus his or her target annual bonus. In the event of a qualifying termination at or after a change in control, the senior executive would be entitled to, in the case of Mr. Yelvington and Ms. Christian, two times his or her base salary plus two times the average of the senior executive's last two annual and profit sharing bonuses, or in the case of Mr. Tilton, one and one-half times his base salary plus one and one-half times the average of the senior executive's last two annual and profit sharing bonuses.

        If Mr. Yelvington has a qualifying termination after a change in control under his employment agreement in 2018, he would be entitled to a severance payment equal to approximately $540,192. If Ms. Christian has a qualifying termination after a change in control under her employment agreement in 2018, she would be entitled to a severance payment equal to approximately $468,846. If Mr. Tilton has a qualifying termination after a change in control under his employment agreement in 2018, he would be entitled to a severance payment equal to approximately $336,346. First Midwest and Northern States have agreed that these amounts will be paid in connection with closing. In addition, each senior executive would be entitled to health insurance coverage continuation for 36 months after termination. Each senior executive would be subject to non-competition restrictions for 12 months following termination of employment for any reason and non-solicitation restrictions for 12 months following termination of employment for just cause or without good reason.

        In connection with the execution of the merger agreement, one Northern States executive officer, Mr. Tilton, entered into an offer letter with First Midwest setting forth the terms and conditions of employment with First Midwest Bank following the merger, in addition to a new confidentiality and restrictive covenants agreement. The terms and conditions of the offer letter include a base salary of $190,000 and participation in First Midwest's short-term and long-term incentive programs. In recognition of his agreement to enter into a new confidentiality and restrictive covenants agreement, and as a retention incentive, the offer letter with First Midwest provides for a cash payment to Mr. Tilton by First Midwest of $90,000, payable $50,000 after the closing of the merger and $40,000 on the first anniversary thereof, subject to partial repayment on certain terminations of employment. First Midwest may determine to enter into new offer letters or other new employment arrangements with executive officers of Northern States that would be effective upon completion of the merger.

    Involvement of FIG as Financial Advisor

        Northern States retained FIG to serve as one of its financial advisors in connection with the merger with First Midwest. Pursuant to the engagement letter entered into between Northern States and FIG, as compensation for FIG's financial advisory services provided to Northern States, Northern States agreed to pay FIG a success fee equal to one and two-tenths percent (1.2%) of the purchase consideration, as defined in the engagement letter. However, the fee for the fairness opinion provided by Vining Sparks is deducted from the success fee. Gregory Gersack, one of the directors of Northern States, is a managing principal of FIG.

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    Other Compensation Matters

        Deferred Compensation Plan.    Jack Blumberg, a director of Northern States, has a fully vested deferred compensation arrangement with Northern States, which was acquired by Northern States in connection with its acquisition of another bank. In connection with the merger, Northern States has agreed to terminate this deferred compensation arrangement prior to the effective time of the merger and provide for a lump sum payment in satisfaction of the full account in the amount of approximately $262,000 under the deferred compensation arrangement to Mr. Blumberg.

        Split-Dollar Plans.    NorStates Bank maintains pre-retirement split dollar life insurance arrangements with respect to several of its employees, including Ms. Christian and Mr. Tilton. Pursuant to these arrangements, if an employee dies prior to his or her retirement age of 65 years, the employee's beneficiary will receive a stated death benefit. If either Ms. Christian or Mr. Tilton were to die prior to age 65, her or his respective beneficiary would receive a death benefit equal to $200,000. These death benefits are fully funded by bank-owned life insurance policies and, to the extent a policy has greater value than the death benefit at the time of an employee's death, such excess will revert to the benefit of NorStates Bank or its successor.

    Potential Severance Payments and Benefits to Executive Officers

        Executive officers who are not party to employment agreements or other arrangements providing for severance benefits and with one year or more of service with NorStates Bank will be eligible to receive severance benefits under the NorStates Bank Transition Period Severance Plan following the completion of the merger. Under the Transition Period Severance Plan, in the event that, during the twelve months following the closing of the merger: (i) an eligible employee's employment is terminated other than for cause or just reason; or (ii) an eligible executive officer resigns from employment following either (a) a reduction in base salary or (b) a requirement to relocate to an office more than 25 miles from the executive officer's current office location; then the employees will be entitled to the following compensation and benefits under the severance plan:

    two weeks of severance pay for each year of service up to a maximum of 52 weeks' severance pay, subject to a minimum of four weeks of severance pay;

    health coverage continuation at active employee rates during the period in which they are receiving severance pay; and

    all earned but unused vacation days through the date of the employee's termination of employment.

        As of the date of this proxy statement/prospectus, Mr. Sara is the only executive officer who would be eligible to participate in the Transition Period Severance Plan. First Midwest has entered into an agreement with Mr. Sara whereby it is expected that his employment will terminate 20 business days after the date following the bank merger on which NorStates Bank and First Midwest Bank complete their operating systems conversion, and he will be eligible to receive approximately $10,800 in severance payments under the NorStates Bank Transition Period Severance Plan. In addition, Mr. Sara will be eligible to receive a cash retention bonus equal to $17,500, subject to his continued employment through such time.

    Indemnification and Insurance

        The merger agreement provides that, upon completion of the merger, First Midwest will indemnify, defend and hold harmless the directors and officers of Northern States (when acting in such capacity) against all costs and liabilities arising out of actions or omissions occurring at or before the completion of the merger, in accordance with Northern States' certificate of incorporation, as amended, and by-laws, as amended, to the extent permitted by law.

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        The merger agreement also provides that for a period of six years after the merger is completed, First Midwest will maintain directors' and officers' liability insurance that provides at least the same coverage and amounts, and contains terms and conditions no less advantageous, as that portion of coverage currently provided by Northern States that serves to reimburse the present and former officers and directors of Northern States and/or NorStates Bank with respect to claims against such directors and officers arising from facts or events which occurred before the completion of the merger, provided that the total premium therefor is not in excess of 200% of the last annual premium paid prior to the date of the merger agreement.

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THE MERGER AGREEMENT

        The following discussion describes the material provisions of the merger agreement. We urge you to read the merger agreement, which is attached as Appendix A and incorporated by reference in this proxy statement/prospectus, carefully and in its entirety. The description of the merger agreement in this proxy statement/prospectus has been included to provide you with information regarding its terms. The merger agreement contains representations and warranties made by and to the parties thereto as of specific dates. The statements embodied in those representations and warranties were made for purposes of that contract between the parties and are subject to qualifications and limitations agreed by the parties in connection with negotiating the terms of that contract. In addition, certain representations and warranties were made as of a specified date, may be subject to a contractual standard of materiality different from those generally applicable to stockholders, or may have been used for the purpose of allocating risk between the parties rather than establishing matters as facts.

Structure

        Subject to the terms and conditions of the merger agreement, Northern States will merge with and into First Midwest, with First Midwest being the surviving company. As a result, the separate existence of Northern States will terminate. Following the merger at such time as First Midwest may determine, NorStates Bank will merge with and into First Midwest Bank. First Midwest Bank will be the surviving bank and will continue its corporate existence as a commercial bank organized under the laws of the State of Illinois.

Merger Consideration

        Upon completion of the merger, each holder of Northern States common stock will receive the merger consideration, except in certain circumstances and subject to adjustment as described in this proxy statement/prospectus, calculated as follows:

    if the Average First Midwest Stock Price is greater than $26.49, the exchange ratio shall equal the quotient, rounded down to the nearest fourth decimal place, of 0.9775 divided by the Average First Midwest Stock Price, which effectively fixes the maximum per share value of the merger consideration you may receive at $0.9775 per share of Northern States common stock;

    if the Average First Midwest Stock Price is greater than or equal to $22.86 and equal to or less than $26.49, the exchange ratio shall equal 0.0369;

    if the Average First Midwest Stock Price is equal to or greater than $20.31 and less than $22.86, the exchange ratio shall equal the quotient, rounded down to the nearest fourth decimal place, of 0.8435 divided by the Average First Midwest Stock Price; or

    if the Average First Midwest Stock Price is less than $20.31 (subject to Northern States' right to terminate the merger agreement and First Midwest's top-up right as described below under "—Termination of the Merger Agreement"), the exchange ratio shall equal 0.0415.

        Northern States has committed to use its commercially reasonable efforts to dispose of certain real estate assets prior to the completion of the merger in a manner mutually agreed to by First Midwest and Northern States. As of the date of this proxy statement/prospectus, Northern States has sold the real estate assets subject to this condition. If this condition had not been satisfied prior to the Determination Date, the exchange ratio would instead be calculated as follows:

    if the Average First Midwest Stock Price is greater than $26.49, the exchange ratio shall equal the quotient, rounded down to the nearest fourth decimal place, of 0.9642 divided by the Average First Midwest Stock Price;

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    if the Average First Midwest Stock Price is greater than or equal to $22.86 and equal to or less than $26.49, the exchange ratio shall equal 0.0364;

    if the Average First Midwest Stock Price is equal to or greater than $20.31 and less than $22.86, the exchange ratio shall equal the quotient, rounded down to the nearest fourth decimal place, of 0.8321 divided by the Average First Midwest Stock Price; or

    if the Average First Midwest Stock Price is less than $20.31 (subject to Northern States' right to terminate the merger agreement and First Midwest's top-up right as described below under "—Termination of the Merger Agreement"), the exchange ratio shall equal 0.0410.

        The merger consideration may be subject to adjustment if certain environmental conditions exist with respect to Northern States' real property acquired after June 6, 2018 (if any) and/or title defects exist with respect to any of Northern States' real property and the real property adjustment amount is greater than $100,000. In that case, the exchange ratio will be reduced by an amount equal the result of: (i) the real property adjustment amount, divided by (ii) the number of outstanding shares of Northern States common stock, divided by (iii) the per share volume weighted average price of First Midwest common stock on Nasdaq from 9:30 a.m. to 4:00 p.m., Eastern Time, on the trading day immediately preceding the closing date of the merger.

        Any change in the market price of First Midwest common stock prior to completion of the merger will affect the value of any shares of First Midwest common stock Northern States stockholders receive as consideration in the merger. The market price of First Midwest common stock may fluctuate as a result of a variety of factors, including general market and economic conditions, changes in our respective businesses, operations and prospects, and regulatory considerations. Many of these factors are outside our control. Accordingly, at the time of the Northern States special meeting, Northern States stockholders will not know or be able to calculate the market price of First Midwest common stock that they will receive upon completion of the merger.

        All unvested Northern States restricted stock awards outstanding immediately prior to the merger will become fully vested upon completion of the merger, and the holder thereof shall be entitled to receive the same merger consideration for the shares of Northern States common stock subject to such award as all other holders of Northern States common stock.

        The exchange ratio is subject to adjustment if, prior to the completion of the merger, First Midwest or Northern States changes the number or kind of shares of their respective common stock outstanding by way of stock split, stock dividend, recapitalization, reclassification, reorganization or similar transaction.

Conversion of Shares; Exchange of Certificates; Fractional Shares

        Conversion.    The conversion of Northern States common stock into the right to receive the merger consideration will occur automatically at the effective time of the merger.

        Exchange Procedures.    Prior to the completion of the merger, First Midwest will deposit with its transfer agent or with a depository or trust institution of recognized standing selected by it and reasonably satisfactory to Northern States, which we refer to as the "exchange agent," (i) certificates or, at First Midwest's option, evidence of shares in book-entry form, representing the shares of First Midwest common stock to be issued under the merger agreement and (ii) cash payable as part of the merger consideration in lieu of any fractional shares of First Midwest common stock to be issued under the merger agreement. As promptly as reasonably practicable after the effective time of the merger, the exchange agent will provide you with instructions in order to exchange your certificates representing shares of Northern States common stock for the merger consideration to be received in the merger pursuant to the terms of the merger agreement. No interest will accrue or be paid with respect to any

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First Midwest common stock or cash to be delivered upon surrender of Northern States stock certificates.

        If any First Midwest stock certificate is to be issued, or cash payment made, in a name other than that in which the Northern States stock certificate surrendered in exchange for the merger consideration is registered, the person requesting the exchange must pay any transfer or other taxes required by reason of the issuance of the new First Midwest certificate or the payment of the cash consideration in a name other than that of the registered holder of the Northern States stock certificate surrendered, or must establish to the satisfaction of First Midwest and the exchange agent that any such taxes have been paid or are not applicable.

        Dividends and Distributions.    Until your Northern States common stock is surrendered for exchange, any dividends or other distributions declared after the effective time with respect to First Midwest common stock into which shares of Northern States common stock may have been converted will accrue but will not be paid. When such Northern States common stock has been duly surrendered, First Midwest will pay any unpaid dividends or other distributions, without interest. After the effective time, there will be no transfers on the stock transfer books of Northern States of any shares of Northern States common stock. If shares of Northern States common stock are presented for transfer after the completion of the merger, they will be cancelled and exchanged for the merger consideration into which the shares of Northern States common stock have been converted.

        Withholding.    The exchange agent will be entitled to deduct and withhold from the merger consideration payable to any Northern States stockholder the amounts it is required to deduct and withhold under any federal, state, local or foreign tax law. If the exchange agent withholds any amounts, these amounts will be treated for all purposes as having been paid to the stockholders from whom they were withheld.

        No Fractional Shares Will Be Issued.    First Midwest will not issue fractional shares of First Midwest common stock in the merger. There will be no dividends or distributions with respect to any fractional shares of First Midwest common stock or any voting or other rights with respect to any fractional shares of First Midwest common stock. Instead of fractional shares of First Midwest common stock, First Midwest will pay to each Northern States stockholder an amount in cash for any fractional shares based on the per share volume weighted average price of the First Midwest common stock on Nasdaq from 9:30 a.m. to 4:00 p.m., Eastern Time, on the trading day immediately preceding the day on which the merger occurs.

        Lost, Stolen or Destroyed Northern States Common Stock Certificates.    If you have lost a certificate representing Northern States common stock, or it has been stolen or destroyed, First Midwest will issue to you the First Midwest common stock or cash in lieu of fractional shares payable under the merger agreement if you submit an affidavit of that fact and, if requested by First Midwest, if you post bond in a customary amount as indemnity against any claim that may be made against First Midwest about ownership of the lost, stolen or destroyed certificate.

        For a description of First Midwest common stock and a description of the differences between the rights of Northern States stockholders and First Midwest stockholders, see "Description of First Midwest Capital Stock" and "Comparison of Stockholder Rights."

Effective Time

        We plan to complete the merger on a business day designated by First Midwest, and consented to by Northern States, that is within 30 days after the satisfaction or waiver of the last remaining conditions to the merger, other than those conditions that by their nature are to be satisfied at the closing, but subject to the fulfillment or waiver of those conditions. The time the merger is completed is the effective time of the merger. See "—Conditions to Completion of the Merger."

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        We anticipate that we will complete the merger during the fourth quarter of 2018. However, completion could be delayed if there is a delay in obtaining the necessary regulatory approvals or for other reasons. There can be no assurances as to if or when these approvals will be obtained or as to whether or when the merger will be completed. If we do not complete the merger by June 6, 2019, either party may terminate the merger agreement without penalty, unless the failure to complete the merger by this date is due to the failure of the party seeking to terminate the merger agreement to perform or observe its obligations under the merger agreement. See "—Conditions to Completion of the Merger" and "—Regulatory Approvals Required for the Mergers."

Representations and Warranties

        The merger agreement contains representations and warranties of First Midwest and Northern States, to each other, as to, among other things:

    the corporate organization and existence of each party and its subsidiaries and the valid ownership of its significant subsidiaries;

    the capitalization of each party;

    the authority of each party and its subsidiaries to enter into the merger agreement (and any other agreement contemplated thereby) and the enforceability of the merger agreement against each party;

    governmental approvals and other consents and approvals required in connection with the merger;

    the fact that the merger agreement does not violate or breach the certificate of incorporation and by-laws of each party, applicable law, and agreements, instruments or obligations of each party;

    each party's relationships with financial advisors;

    each party's financial statements and filings with applicable regulatory authorities;

    sufficiency of each party's internal controls;

    the absence of material changes in each party's business;

    the absence of litigation;

    each party's compliance with applicable law; and

    regulatory investigations and orders.

        In addition, the merger agreement contains representations and warranties of Northern States to First Midwest as to, among other things:

    the absence of undisclosed obligations or liabilities;

    Northern States' stockholder rights plan;

    the inapplicability to the merger and voting agreements and the transactions contemplated thereby of state anti-takeover laws;

    accuracy of books and records and compliance with policies, practices and procedures;

    intellectual property;

    the filing and accuracy of material tax returns and other tax matters;

    environmental matters;

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    labor matters;

    its employment contracts and benefit arrangements;

    title and interest in property;

    the validity of, and the absence of material defaults under, its material contracts;

    material interests of officers and directors or their associates;

    adequacy of insurance coverage;

    extensions of credit;

    interest rate risk management instruments;

    sufficiency of its assets to conduct its business;

    collateralized debt obligations;

    its mortgage banking activities; and

    the absence of a trust business.

        In addition, the merger agreement contains representations and warranties of First Midwest to Northern States as to, among other things:

    availability of funds and shares of First Midwest common stock to complete the transactions contemplated by the merger agreement; and

    no ownership of Northern States common stock.

Conduct of Business Pending the Merger

        Northern States has agreed that, except as expressly contemplated by the merger agreement, or as disclosed in writing prior to the signing of the merger agreement, it will not, and will not agree to, without First Midwest's consent:

    conduct its business other than in the ordinary and usual course;

    fail to use commercially reasonable efforts to preserve intact its business organizations, assets and other rights, and its existing relations with customers and other parties;

    enter into any new line of business, change its banking and operating policies, except as required by law or policies imposed by regulatory authorities, or close, sell, consolidate or relocate or materially alter any of its branches, loan production offices or other significant offices or operations facilities of it or its subsidiaries;

    materially alter any of its policies or practices with respect to the rates, fees, interest, charges levels or types of services available to its customers or offer promotional pricing with respect to any product or service other than in the ordinary course of business and on commercially reasonable terms;

    book certain "brokered deposits";

    purchase securities other than short-term securities issued by the U.S. Department of the Treasury or any U.S. government agencies;

    make any capital expenditures in excess of specified amounts;

    enter into, terminate, amend, modify or renew any material contract;

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    make, renew, amend, extend the term of, extend the maturity of or grant the forbearance of any extension of credit (1) involving a total credit relationship of more than $2,000,000 with any single borrower and its affiliates, (2) involving a total credit relationship of more than $1,000,000 but less than $2,000,000 with any single borrower and its affiliates without first consulting First Midwest, or (3) other than in compliance with Northern States existing credit policies and procedures;

    enter into, renew or amend any interest rate instrument;

    except for the issuance of common stock pursuant to the Northern States Stock Plan, issue, sell, grant, transfer or dispose of or encumber, or authorize or propose the creation of, any additional shares of capital stock;

    grant stock options, stock appreciation rights, performance shares, restricted stock units, restricted stock or other equity-based awards or interests, or grant any person any right to acquire any shares of capital stock;

    make, declare, pay or set aside for payment any dividend or distribution on any shares of its stock, except for cash dividends from NorStates Bank to Northern States to cover operating expenses;

    adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, convert or liquidate any of its own stock;

    sell, transfer, mortgage, encumber or otherwise dispose of any loans, securities, assets, deposits, business or properties, except in a nonmaterial transaction in the ordinary course of business;

    acquire the loans, securities, real property, equity, business, deposits or properties of any other entity or make a contribution of capital to any other person, other than a wholly owned subsidiary, except in various specified transactions in the ordinary course of business;

    amend its certificate of incorporation or by-laws;

    change its accounting principles, practices or methods, except as required by GAAP;

    make, change or revoke any material tax election, file any amended tax return, enter into any closing agreement, settle any material tax claim or assessment, surrender any right to claim a material refund of taxes, take any action with respect to taxes that is outside the ordinary course of business or take any action that is reasonably likely to have a material adverse impact on the tax position of Northern States;

    settle any action, suit, claim or proceeding against it, other than in the ordinary course of business in an amount not in excess of $25,000 and that would not impose any material restriction on Northern States' or its subsidiaries' business;

    enter into, terminate, amend, modify, extend or renew any employment, consulting, severance, non-competition, non-solicitation, change-in-control, retention, stay bonus or similar agreements or grant salary increases or employee benefit increases, except as required by applicable law or the merger agreement, for certain prorated annual bonuses that are in the ordinary course of business, or to pay certain stay bonuses for certain employees as provided in the merger agreement;

    hire any employee or engage any consultant with an annual salary or wage rate or consulting fee and target cash bonus in excess of a specified amount, or terminate the employment of any executive officer other than for cause;

    enter into, terminate, establish, adopt, amend, modify, make any new grants or awards under or increase any benefits under any employee compensation or benefit plans, or take any action to

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      accelerate the vesting, payment, exercisability or funding under any employee compensation or benefit plan or add any new participants to any benefit plan, except as contemplated by the merger agreement, as required by applicable law, to pay certain stay bonuses as provided in the merger agreement, or to add individuals as participants to any existing benefit plan that is a tax-qualified retirement, health or welfare benefit plan who became eligible for participation in the ordinary course of business under the existing terms;

    communicate with its officers or employees regarding compensation or benefits matters affected by the transaction, except as permitted by the merger agreement;

    engage in or conduct any building, demolition, remodeling or material modifications or alterations to any of its business premises, unless required by applicable law or to comply with the merger agreement, or fail to maintain its business premises or other assets in substantially the same condition;

    acquire or otherwise become the owner of any real property by way of foreclosure or in satisfaction of a debt previously contracted without first obtaining an appropriate Phase I environmental site assessment and consulting First Midwest;

    other than in the ordinary course of business, incur any indebtedness for borrowed money that cannot be prepaid at any time without penalty, assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other person, other than indebtedness of Northern States or any of its wholly owned subsidiaries to Northern States or any of its subsidiaries;

    merge or consolidate itself or any of its significant subsidiaries with any other person, or restructure, reorganize or completely or partially liquidate or dissolve itself or any of its significant subsidiaries; or

    knowingly take, or knowingly fail to take, any action that would, or is reasonably likely to, prevent or impede the merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code or knowingly take, or knowingly fail to take, any action that is reasonably likely to result in any of the conditions to the merger not being satisfied in a timely manner, or any action that is reasonably likely to materially impair its ability to perform its obligations under the merger agreement or to complete the transactions contemplated thereby, except as required by applicable law.

Acquisition Proposals by Third Parties

        Northern States has agreed that it will not, and will cause its subsidiaries and its and its subsidiaries' representatives, agents, advisors and affiliates not to, solicit or encourage inquiries or proposals with respect to any other acquisition proposal. Northern States has also agreed that it will not engage in any negotiations concerning any other acquisition proposal, or provide any confidential or non-public information to, or have any discussions with, any person relating to any other acquisition proposal.

        However, if Northern States receives an unsolicited bona fide acquisition proposal and Northern States' board of directors concludes in good faith (after consultation with its financial and outside legal advisors) that it constitutes or could reasonably be expected to lead to a superior proposal, Northern States may furnish non-public information and participate in negotiations or discussions if its board of directors concludes in good faith, after consultation with such legal advisors, that failure to take those actions would be inconsistent with its fiduciary duties under applicable law. Before providing any non-public information, Northern States must enter into a confidentiality agreement with the third party no less favorable to it than the confidentiality agreement with First Midwest. While Northern States has the right to enter into negotiations regarding a superior proposal under the foregoing

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circumstances, the merger agreement does not allow Northern States to terminate the merger agreement solely because it has received a superior proposal, entered into such negotiations or decided to accept such offer.

        For purposes of the merger agreement, the terms "acquisition proposal" and "superior proposal" have the following meanings:

    The term "acquisition proposal" means, other than the transactions contemplated by the merger agreement:

    a tender or exchange offer to acquire more than 15% of the voting power in Northern States or its significant subsidiaries;

    a proposal for a merger, consolidation or other business combination involving Northern States or its significant subsidiaries; or

    any other proposal to acquire more than 15% of the voting power in, or more than 15% of the business, assets or deposits of, Northern States or its significant subsidiaries.

    The term "superior proposal" means a bona fide written acquisition proposal (with the references to 15% deemed references to 50%) that Northern States' board of directors concludes in good faith to be more favorable from a financial point of view to its stockholders than the First Midwest merger after:

    receiving the advice of its financial advisors;

    taking into account the likelihood of completion of the proposed transaction (as compared to, and with due regard for, the terms of the merger agreement); and

    taking into account legal, financial, regulatory and other aspects of such proposal.

        Northern States has agreed to cease immediately any activities, negotiations or discussions conducted before the date of the merger agreement with any other persons with respect to acquisition proposals and to use reasonable best efforts to enforce any confidentiality or similar agreement relating to such acquisition proposals. Northern States has also agreed to notify First Midwest within one business day of receiving any acquisition proposal and the substance of the proposal.

        In addition, Northern States has agreed to use its reasonable best efforts to obtain from its stockholders approval of the merger agreement and the transactions contemplated thereby, including the merger. However, if Northern States' board of directors (after consultation with, and based on the advice of, outside legal counsel) determines in good faith that, because of an acquisition proposal that Northern States' board of directors concludes in good faith constitutes a superior proposal, to continue to recommend such items to its stockholders would result in a violation of its fiduciary duties under applicable law, it may submit such items without recommendation and communicate the basis for its lack of recommendation to its stockholders. Northern States agreed that before taking such action with respect to an acquisition proposal, it will give First Midwest at least ten business days to respond to the proposal and will consider any amendment or modification to the merger agreement proposed by First Midwest.

        Under certain circumstances, including if the merger agreement is terminated in the event Northern States breaches certain obligations described above, Northern States must pay First Midwest a fee equal to $3,400,000. See "—Termination of the Merger Agreement."

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Other Agreements

        In addition to the agreements we have described above, we have also agreed in the merger agreement to take several other actions, such as:

    we agreed to use commercially reasonable efforts to complete the merger and the other transactions contemplated by the merger agreement;

    we agreed that First Midwest and Northern States will give notice to the other party of any fact, event or circumstance that is reasonably likely to result in any material adverse effect, as defined in the merger agreement, or that would constitute a breach of any of its representations, warranties, covenants or agreements in the merger agreement that reasonably could be expected to give rise to the failure of a condition to the merger to be satisfied;

    we agreed that First Midwest and Northern States will supplement their respective representations and warranties in the merger agreement with respect to any matter arising after the date of the merger agreement which would render any such representations and warranties inaccurate or incomplete in any material respect;

    we agreed that Northern States will convene a special meeting of its stockholders within 45 days from the date the registration statement, of which this proxy statement/prospectus is a part, becomes effective to consider and vote on the merger proposal;

    we agreed that First Midwest will use its commercially reasonable efforts to cause the shares of First Midwest common stock to be issued in the merger to be approved for listing on the Nasdaq Stock Market (subject to official notice of issuance) as promptly as practicable, and in any event before the effective time of the merger;

    we agreed that, subject to applicable law, First Midwest and Northern States will cooperate with each other and prepare promptly and file all necessary documentation to obtain all required permits, consents, approvals and authorizations of third parties and governmental entities, including applications for the required regulatory approvals and this proxy statement/prospectus and the registration statement for the First Midwest common stock to be issued in the merger of which this proxy statement/prospectus is a part;

    we agreed to cooperate on stockholder and employee communications and press releases;

    we agreed that Northern States will not take any actions that would cause the transactions contemplated by the merger agreement to be subject to any takeover laws;

    we agreed that Northern States will provide First Midwest, and First Midwest's officers, employees, counsel, accountants and other authorized representatives, reasonable access during normal business hours throughout the period prior to the effective time of the merger to the books, records, properties, personnel and other information of Northern States as First Midwest may reasonably request;

    we agreed that Northern States will provide First Midwest with copies of documents filed by Northern States pursuant to the requirements of federal or state banking or securities laws and all other information concerning the business, properties and personnel of Northern States and its subsidiaries as First Midwest may reasonably request, including providing First Midwest with biweekly general ledger reports beginning with the first full biweekly period following June 1, 2018 and until the effective time of the merger;

    we agreed to keep any non-public information confidential;

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    we agreed that First Midwest and Northern States will execute and deliver supplemental indentures and other documents and instruments required for the assumption of Northern States' outstanding debt, guarantees, securities, and other agreements;

    we agreed that, upon completion of the merger, First Midwest will indemnify, defend and hold harmless the directors and officers of Northern States (when acting in such capacity) against all costs and liabilities arising out of actions or omissions occurring at or before the completion of the merger, in accordance with Northern States' certificate of incorporation, as amended, and by-laws, as amended, to the extent permitted by law;

    we agreed that, for a period of six years after the effective time of the merger, First Midwest will use its commercially reasonable efforts to maintain Northern States' existing directors' and officers' liability insurance for liabilities that arose prior to the completion of the merger, or such amount of coverage that can be obtained for a premium that is not in excess of 200% of the annual premium paid by Northern States prior to the date of the merger agreement. See "The Merger—Interests of Certain Persons in the Merger;"

    we agreed that Northern States will, prior to the closing of the merger, take all actions necessary to terminate the NorStates Bank 401(k) Plan;

    we agreed that, following the effective time of the merger, First Midwest or its subsidiaries will cause Northern States' employees to be covered by a severance policy whereby certain employees of Northern States and NorStates Bank will be entitled to receive certain severance benefits as provided in the merger agreement if they incur a qualifying involuntary termination of employment after the effective time of the merger;

    we agreed that First Midwest will cause each employee benefit plan of First Midwest in which Northern States employees are eligible to participate (other than a cash or equity compensation plan) to take into account, for purposes of eligibility and vesting (and not for benefit accrual) thereunder, the service of such employees with Northern States as if such service were with First Midwest, to the same extent that such service was credited under a comparable plan of Northern States, and, with respect to welfare benefit plans of First Midwest in which employees of Northern States are eligible to participate, First Midwest agreed to waive any preexisting conditions, waiting periods and actively at work requirements under such plans;

    we agreed that for purposes of each First Midwest health plan, First Midwest shall cause any eligible expenses incurred by employees of Northern States who are employees of Northern States or NorStates Bank on the closing date of the merger and their covered dependents during the portion of the plan year of the comparable plan of Northern States or NorStates Bank ending on the date such employee's participation in the corresponding First Midwest plan begins to be taken into account under such First Midwest plan for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable to such employee and his or her covered dependents for the applicable plan year of the First Midwest plan;

    we agreed that Northern States will, prior to the closing of the merger, take all actions necessary to terminate any plan, agreement or arrangement of Northern States that provides for the deferral of compensation or fees for any director, officer, employee, consultant or other service provider and provide for a lump sum payment of the benefits thereunder within 20 days following the effective time of the merger;

    we agreed that within 15 business days of the date of the merger agreement, Northern States will accrue as a liability on its financial statements for purposes of calculating tangible common equity an amount equal to the aggregate unpaid costs and expenses related to the Northern States bank owned life insurance policies and split dollar programs, which Northern States has completed;

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    we agreed to use our commercially reasonable efforts to plan, execute and complete the conversion of the processing, reporting, payment and other operating systems of NorStates Bank to those of First Midwest Bank by the closing of the merger, or at such later time as First Midwest may determine, provided that such conversion shall not become effective prior to the closing of the merger;

    we agreed that Northern States and First Midwest will cause to be ordered (and Northern States will use commercially reasonable efforts to cause to be delivered to First Midwest) title commitments, surveys and title documents for real property owned by Northern States or its subsidiaries in order to determine, as provided in the merger agreement, whether there are any defects to the title of such real property;

    we agreed that First Midwest is authorized to obtain certain environmental examinations within 45 business days after Northern States notifies First Midwest that Northern States has acquired any real property after the date of the merger agreement in order to determine, as provided in the merger agreement, whether certain environmental conditions exist on such real property;

    we agreed that if certain environmental conditions and/or title defects exist with respect to Northern States' real property and the total cost to remediate and/or cure such conditions or defects (the "real property adjustment amount") is greater than $100,000, the exchange ratio will be reduced by an amount equal the result of: (i) the real property adjustment amount, divided by (ii) the number of outstanding shares of Northern States common stock, divided by (iii) the per share volume weighted average price of First Midwest common stock on Nasdaq from 9:30 a.m. to 4:00 p.m., Eastern Time, on the trading day immediately preceding the closing date of the merger;

    we agreed that Northern States will give First Midwest the opportunity to participate in the defense or settlement of any litigation against Northern States and/or its directors or affiliates relating to the transactions contemplated by the merger agreement;

    we agreed that Northern States will use its commercially reasonable efforts to dispose of certain identified real estate properties prior to the Determination Date;

    we agreed that First Midwest and Northern States will use their commercially reasonable efforts to cause the merger to qualify as a reorganization within the meaning of Section 368(a) of the Code;

    we agreed that if, after the effective time of the merger, any further action is necessary to carry out the purposes of the merger agreement or to vest First Midwest with full title to all properties, assets, rights, approvals, immunities and franchises of any of the parties to the merger, the then current officers and directors of each party to the merger agreement and their respective subsidiaries will take or cause to be taken such necessary action; and

    we agreed that at or immediately prior to the effective time, First Midwest will pay all unpaid transaction expenses to the extent Northern States does not have immediately available funds to make such payments.

Conditions to Completion of the Merger

        The obligations of First Midwest and Northern States to complete the merger are subject to the satisfaction or waiver of the following conditions:

    the merger agreement and the merger must be approved by the requisite vote of holders of Northern States common stock;

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    the remaining required regulatory approvals must be obtained without any conditions that could (i) materially and adversely affect the business, operations or financial condition of First Midwest (measured on a scale relative to Northern States), (ii) require First Midwest or any of its subsidiaries to make any material covenants or commitments, or complete any divestitures, whether prior to or subsequent to the closing of the merger, (iii) result in a material adverse effect on Northern States or its subsidiaries, or (iv) restrict or impose a burden on First Midwest or any of its subsidiaries in connection with the transactions contemplated by the merger agreement or with respect to the business or operations of First Midwest or any of its subsidiaries, and any waiting periods required by law must expire;

    the First Midwest common stock that is to be issued in the merger must be approved for listing on the Nasdaq Stock Market and the registration statement filed with the SEC, of which this proxy statement/prospectus is a part, must be effective; and

    there must be no government action or other legal restraint or prohibition preventing completion of the merger or the other transactions contemplated by the merger agreement.

        The obligation of Northern States to complete the merger is subject to the satisfaction or waiver of the following conditions:

    the representations and warranties of First Midwest contained in the merger agreement must be true and correct in all material respects (except for representations and warranties qualified by the words "material" or "Material Adverse Effect," which are required to be true and correct in all respects) as of the date of the merger agreement and as of the closing date of the merger, and First Midwest must have performed in all material respects all of its obligations and complied in all material respects with all of its agreements and covenants under the merger agreement; and

    the receipt of a legal opinion from Barack Ferrazzano, dated as of the date the merger is completed, that, on the basis of facts, representations and assumptions set forth in the opinion, the merger will be treated as a tax-free reorganization under federal tax laws.

        In addition, the obligation of First Midwest to complete the merger is subject to the satisfaction or waiver of the following conditions:

    the representations and warranties of Northern States contained in the merger agreement must be true and correct in all material respects (except for representations and warranties qualified by the words "material" or "Material Adverse Effect," and certain representations and warranties regarding Northern States' capitalization, which are required to be true and correct in all respects) as of the date of the merger agreement and as of the closing date of the merger, and Northern States must have performed in all material respects all of its obligations and complied in all material respects with all of its agreements and covenants under the merger agreement; and

    the receipt of a legal opinion from Chapman and Cutler, dated as of the date the merger is completed, that, on the basis of facts, representations and assumptions set forth in the opinion, the merger will be treated as a tax-free reorganization under federal tax laws;

    the receipt of a legal opinion from Barack Ferrazzano as to certain corporate matters, including Northern States' due incorporation and legal standing, the legal status of Northern States' capital stock and the due authorization and execution of the merger agreement;

    the number of dissenting shares must not exceed 5% of the outstanding shares of Northern States common stock;

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    Northern States shall have obtained certain required third-party consents, as defined in the merger agreement, and shall deliver to First Midwest an officers' certificate to that effect;

    Northern States' closing tangible common equity, as defined in the merger agreement, must be greater than or equal to $53,100,000 (as of July 31, 2018, Northern States' tangible common equity was approximately $54,342,700);

    the ten-day average of Northern States' consolidated deposits must be greater than or equal to $353,300,000 for the ten-day period ending on the day immediately prior to the closing date;

    Northern States' closing consolidated total loans (excluding loans held for sale of Northern States and its subsidiaries) must be greater than or equal to $285,700,000;

    the environmental and title review process of Northern States' real property set forth in the merger agreement shall be completed in accordance with the provisions of the merger agreement;

    the receipt by First Midwest of the resignations, effective as of the effective time of the merger, of each director and officer of Northern States and each director and executive officer of NorStates Bank;

    the receipt by First Midwest of a certificate by Northern States stating that it and NorStates Bank are not and have not been United States real property holding corporations;

    the receipt by First Midwest of a certificate by Northern States stating a material adverse effect, as defined in the merger agreement, has not occurred to Northern States;

    the receipt by First Midwest of a certificate from American Stock & Transfer Company, LLC certifying the number of shares of Northern States common stock outstanding as of the effective time;

    no action, suit, claim or proceeding shall be pending against or affecting Northern States or First Midwest that is seeking to prohibit or make illegal the consummation of the merger; and

    an agreement to terminate certain agreements regarding the referral of certain Northern States customers to a third party and the use of certain Northern States office space by such third party shall be in full force and effect and Northern States shall be in compliance with such agreement.

        No assurance can be provided as to if, or when, the remaining required regulatory approvals necessary to complete the merger will be obtained, or whether all of the other conditions to the merger will be satisfied or waived by the party permitted to do so. As discussed below, if the merger is not completed on or before June 6, 2019, either First Midwest or Northern States may terminate the merger agreement, unless the failure to complete the merger by that date is due to the failure of the party seeking to terminate the merger agreement to comply with any of the provisions of the merger agreement.

Termination of the Merger Agreement

        The merger agreement may be terminated by either First Midwest or Northern States at any time before or after Northern States has received approval of the merger agreement and the transactions contemplated thereby:

    by our mutual consent;

    if the other party is in a continuing breach of a representation, warranty or covenant contained in the merger agreement, as long as that breach has not been cured within 15 days following

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      written notice thereof and that breach would also allow the non-breaching party not to complete the merger;

    if any governmental entity that must grant a regulatory approval has denied approval of the merger, bank merger or the other transactions contemplated by the merger agreement by final and non-appealable action, or if an application for a required regulatory approval has been withdrawn upon the request or recommendation of the applicable governmental authority and such authority would not accept the refiling of such application, but not by a party whose failure to comply with any provision of the merger agreement caused, or materially contributed to, such denial or withdrawal request;

    if the merger is not completed on or before June 6, 2019, unless the failure to complete the merger by this date is due to the failure of the party seeking to terminate the merger agreement to comply with any of the provisions of the merger agreement; or

    if a material adverse effect, as defined in the merger agreement, occurs with respect to the other party.

        The merger agreement may also be terminated by First Midwest at any time before or after the stockholders of Northern States approve the merger proposal:

    if holders of Northern States common stock fail to approve the merger proposal;

    if Northern States' board of directors submits the merger agreement and the other transactions contemplated thereby to its stockholders without a recommendation for approval or with material and adverse qualifications on the approval, or if the board of directors otherwise withdraws or materially and adversely modifies its recommendation for approval;

    if Northern States' board of directors recommends an acquisition proposal other than the merger, or if Northern States' board of directors negotiates or authorizes negotiations with a third party regarding an acquisition proposal other than the merger and those negotiations continue for at least 10 business days, except that negotiations will not include the request and receipt of information from any person that submits an acquisition proposal, or discussions regarding such information for the sole purpose of ascertaining the terms of the acquisition proposal and determining whether Northern States' board of directors will, in fact, engage in or authorize negotiations;

    if Northern States has breached its covenant not to solicit or encourage inquiries or proposals with respect to any acquisition proposal, in circumstances not permitted under the merger agreement, as described above under "—Acquisition Proposals by Third Parties"; or

    if the number of dissenting shares of Northern States common stock exceeds 5% of the outstanding shares of Northern States common stock.

        Further, Northern States may terminate the merger agreement if the Average First Midwest Stock Price is less than $20.31 per share. However, if Northern States elects to terminate the merger agreement under these circumstances, First Midwest may, but is not obligated to, elect to increase the exchange ratio or provide an amount of cash as additional consideration for each share of Northern States common stock as provided in the merger agreement (the "top-up right"). If this election is made, Northern States may not terminate the merger agreement under these circumstances.

        The merger agreement also provides that Northern States must pay First Midwest a fee equal to $3,400,000 plus reasonable and documented out-of-pocket exepenses incurred by First Midwest in connection with the transactions contemplated by the merger agreement if, on or prior to the termination of the merger agreement or the 12 month anniversary of the termination of the merger

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agreement in certain circumstances set forth in the merger agreement, both (i) the merger agreement is terminated and (ii) any of the following circumstances occur:

    Northern States' board of directors submits the merger agreement and the transactions contemplated thereby, including the merger, to Northern States stockholders without a recommendation for approval or with material and adverse conditions on such approval, or withdraws or materially and adversely modifies its recommendation;

    Northern States enters into an agreement to engage in a competing acquisition proposal with any person other than First Midwest or any of First Midwest's subsidiaries;

    Northern States authorizes, recommends or proposes (or publicly announces its intention to authorize, recommend or propose) an agreement to engage in a competing acquisition proposal with any person other than First Midwest or its subsidiaries or recommends that Northern States stockholders approve or accept such a competing acquisition proposal;

    any person, other than First Midwest or its subsidiaries, acquires beneficial ownership or the right to acquire beneficial ownership of 20% or more of the outstanding shares of any class or series of Northern States common stock;

    Northern States fails to convene a stockholder meeting to approve the merger agreement and the transactions contemplated thereby, including the merger, within 45 days of the effectiveness of the registration statement of which this proxy statement/prospectus is a part; or

    Northern States breaches its covenant not to solicit or encourage inquiries or proposals with respect to any acquisition proposal in circumstances not permitted under the merger agreement, which covenant is described above under "—Acquisition Proposals by Third Parties."

Waiver and Amendment of the Merger Agreement

        At any time before completion of the merger, either First Midwest or Northern States may, to the extent legally allowed, waive in writing compliance by the other with any provision contained in the merger agreement or amend the merger agreement. However, once holders of Northern States common stock have approved the merger proposal, no waiver of any condition or amendment may be made that would require further approval by Northern States stockholders unless that approval is obtained.

        First Midwest may also change the structure of the merger or the method of effecting the merger before the effective time of the merger, by notice to Northern States at least five business days prior to the approval of the merger agreement and the transactions contemplated thereby, including the merger, by all requistite votes of the holders of Northern States common stock, so long as any change does not: (i) change the kind or amount of consideration to be received by Northern States stockholders; (ii) adversely affect the tax consequences of the merger to Northern States stockholders; (iii) adversely affect the timing of or capability of completion of the merger; or (iv) cause or could not be reasonably expected to cause any of the conditions to complete the merger to be incapable of being satisfied.

        The merger agreement may not be amended except by an instrument in writing signed on behalf of each of the parties. Any such amendment by the parties must be approved by the board of directors of First Midwest and the board of directors of Northern States at any time before or after the approval of the merger agreement and the transactions contemplated thereby by the stockholders of Northern States, except that no amendment may be made after the receipt of such approval which requires further approval of the stockholders of Northern States unless such further approval is obtained. Notwithstanding the foregoing, First Midwest and Northern States may without approval of their respective boards of directors, make technical changes to the merger agreement, not inconsistent with the purposes of the merger agreement, as may be required to effect or facilitate any required

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government approvals or acceptance of the merger or of the merger agreement or to effect or facilitate any filing or recording required for the consummation of any of the transactions contemplated by the merger agreement.

Regulatory Approvals Required for the Mergers

        We have agreed to use commercially reasonable efforts to obtain the regulatory approvals required for the merger. We refer to these approvals, along with the expiration of any statutory waiting periods related to these approvals, as the "requisite regulatory approvals." These include approval from the Federal Reserve and the IDFPR. We have filed the applications to obtain the requisite regulatory approvals and have received approval from the Federal Reserve. The merger and the related transactions cannot proceed in the absence of the requisite regulatory approvals. We cannot assure you as to whether or when the requisite regulatory approvals will be obtained, and, if obtained, we cannot assure you as to the date of receipt of any of these approvals, the terms thereof or the absence of any public protest or litigation challenging them. Likewise, we cannot assure you that the U.S. Department of Justice or a state attorney general will not attempt to challenge the merger on antitrust grounds, or, if such a challenge is made, as to the result of that challenge.

        We are not aware of any other material governmental approvals or actions that are required prior to the parties' completion of the merger other than those described below. We presently contemplate that if any additional governmental approvals or actions are required, these approvals or actions will be sought. However, we cannot assure you that any of these additional approvals or actions will be obtained.

        Federal Reserve.    Completion of the merger requires approval by the Federal Reserve pursuant to Section 3 of the Bank Holding Company Act of 1956, as amended (the "BHC Act"), and such approval has been received.

        The Federal Reserve is prohibited from approving any merger transaction under Section 3 of the BHC Act (i) that would result in a monopoly or be in furtherance of any combination or conspiracy to monopolize, or to attempt to monopolize, the business of banking in any part of the United States, or (ii) whose effect in any section of the United States may be to substantially lessen competition, or to tend to create a monopoly or in any other manner restrain trade, unless the Federal Reserve finds that the anti-competitive effects of the merger transaction are clearly outweighed in the public interest by the probable effect of the merger transaction in meeting the convenience and needs of the communities to be served.

        In addition, among other things, in reviewing the merger, the Federal Reserve must consider (i) the financial condition and future prospects of First Midwest, Northern States and their respective subsidiary banks, (ii) the competence, experience, and integrity of the officers, directors and principal stockholders of First Midwest, Northern States and their respective subsidiary banks, (iii) the convenience and needs of the communities to be served, including the record of performance under the Community Reinvestment Act of 1977, as amended, (iv) the companies' effectiveness in combating money-laundering activities, (v) First Midwest's and its subsidiaries' record of compliance with applicable community reinvestment laws and (vi) the risk to the stability of the United States banking or financial system presented by the merger and the related transactions.

        Completion of the bank merger requires approval by the Federal Reserve pursuant to the Bank Merger Act. In evaluating an application filed under the Bank Merger Act, the Federal Reserve uses substantially the same criteria as used when evaluating applications filed pursuant to the BHC Act as described above.

        Pursuant to the BHC Act and the Bank Merger Act, a transaction approved by the Federal Reserve is subject to a waiting period ranging from 15 to 30 days, during which time the U.S.

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Department of Justice may challenge the merger on antitrust grounds and seek appropriate relief. The commencement of an antitrust action would stay the effectiveness of such an approval, unless a court specifically ordered otherwise. In reviewing the merger, the U.S. Department of Justice could analyze the merger's effect on competition differently than the Federal Reserve, and thus, it is possible that the U.S. Department of Justice could reach a different conclusion than the Federal Reserve regarding the merger's effects on competition. A determination by the U.S. Department of Justice not to object to the merger does not prevent the filing of antitrust actions by private persons or state attorneys general.

        Illinois Department of Financial and Professional Regulation.    Completion of the bank merger requires approval from the IDFPR under Section 22 of the Illinois Banking Act, and an application for approval was filed filed on July 3, 2018.

        Among other things, in reviewing the bank merger, the IDFPR must consider (i) the financial condition and future prospects of First Midwest, Northern States and their respective subsidiary banks, (ii) the general character, experience and qualifications of the directors and management of the resulting bank, (iii) the convenience and needs of the area sought to be served by the resulting bank, (iv) the fairness of the proposed merger to all parties involved, and (v) the safety and soundness of the resulting bank following the proposed bank merger.

Dividends

        Pursuant to the terms of the merger agreement, Northern States is prohibited from paying cash dividends to holders of its common stock. For further information, please see "Price Range of Common Stock and Dividends."

Stock Exchange Listing

        First Midwest has agreed to use its commercially reasonable efforts to list the First Midwest common stock to be issued in the merger on the Nasdaq Stock Market. It is a condition to the completion of the merger that those shares be approved for listing on the Nasdaq Stock Market, subject to official notice of issuance. Following the merger, First Midwest expects that its common stock will continue to trade on the Nasdaq Stock Market under the symbol "FMBI."

Restrictions on Resales by Affiliates

        First Midwest has registered its shares of common stock to be issued in the merger with the SEC under the Securities Act. No restrictions on the sale or other transfer of shares of First Midwest common stock issued in the merger will be imposed solely as a result of the merger, except for restrictions on the transfer of shares of First Midwest common stock issued to any Northern States stockholder who is or becomes an "affiliate" of First Midwest for purposes of Rule 144 under the Securities Act. The term "affiliate" is defined in Rule 144 under the Securities Act as a person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, First Midwest or the combined company, as the case may be, and generally includes executive officers, directors and stockholders beneficially owning 10% or more of First Midwest's outstanding common stock.

Dissenters' Rights of Appraisal of Holders of Northern States Common Stock

        The following discussion is a summary of the material statutory procedures to be followed by a holder of Northern States common stock in order to dissent from the merger and perfect appraisal rights. If you want to exercise appraisal rights, you should review carefully Section 262 of the DGCL and are urged to consult a legal advisor before electing or attempting to exercise these rights because the failure to precisely follow all the necessary legal requirements may result in the loss of such appraisal rights. This description is not complete and is qualified in its entirety by the full text of the relevant provisions of the DGCL, which

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are reprinted in their entirety as Appendix C to this proxy statement/prospectus. Northern States stockholders seeking to exercise appraisal rights must strictly comply with these provisions.

        Stockholders of Northern States as of the record date may exercise appraisal rights in connection with the merger by complying with Section 262 of the DGCL. Completion of the merger is subject to, among other things, the holders of no more than 5% of the outstanding shares of Northern States common stock electing to exercise their appraisal rights.

        If you hold one or more shares of Northern States common stock, you are entitled to appraisal rights under Delaware law and have the right to dissent from the merger, have your shares appraised by the Delaware Court of Chancery and receive the "fair value" of such shares (exclusive of any element of value arising from the accomplishment or expectation of the merger) as of completion of the merger in place of the merger consideration, as determined by the court, if you strictly comply with the procedures specified in Section 262 of the DGCL. Any such Northern States stockholder awarded "fair value" for such stockholder's shares by the Delaware Court of Chancery would receive payment of that fair value in cash, together with interest, if any, in lieu of the right to receive the merger consideration, and accordingly, such stockholder awarded "fair value" for their shares would not receive any shares of First Midwest common stock following the completion of the merger. Such fair value amount may differ from the value of the consideration that you would otherwise receive in the merger.

        The following is a summary of the statutory procedures that you must follow if you elect to exercise your appraisal rights under the DGCL. The following summary does not constitute any legal or other advice, nor does it constitute a recommendation that you exercise your rights to seek appraisal under Section 262 of the DGCL. This summary is not complete and is qualified in its entirety by reference to Section 262 of the DGCL, the text of which is set forth in full in Appendix C to this proxy statement/prospectus.

        Under Section 262 of the DGCL, where a merger agreement is to be submitted for adoption at a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, must notify each of its stockholders entitled to appraisal rights that appraisal rights are available and include in the notice a copy of Section 262 of the DGCL. This proxy statement/prospectus constitutes Northern States' notice to its stockholders that appraisal rights are available in connection with the merger, and the full text of Section 262 of the DGCL is attached to this proxy statement/prospectus as Appendix C. A holder of Northern States common stock who wishes to exercise appraisal rights or who wishes to preserve the right to do so should review the following discussion and Appendix C carefully. Failure to strictly comply with the procedures of Section 262 of the DGCL in a timely and proper manner will result in the loss of appraisal rights. A stockholder who loses his, her or its appraisal rights will be entitled to receive only the per share merger consideration.

        How to exercise and perfect your right to dissent.    Northern States stockholders wishing to exercise the rights to seek an appraisal of its shares must do ALL of the following:

    you must not vote in favor of the adoption of the merger agreement. Because a proxy that is signed and submitted but does not otherwise contain voting instructions will, unless revoked, be voted in favor of the adoption of the merger agreement, if you vote by proxy and wish to exercise your appraisal rights you must vote against the adoption of the merger agreement or abstain from voting your shares;

    you must deliver to Northern States a written demand for appraisal before the vote on the adoption of the merger agreement at the special meeting and all demands for appraisal must reasonably inform Northern States of your identity and your intention to demand appraisal of your shares of common stock;

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    you must continuously hold the shares from the date of making the demand through the effective date of the merger. You will lose your appraisal rights if you transfer the shares before the effective date of the merger; and

    you or the surviving company must file a petition in the Delaware Court of Chancery requesting a determination of the fair value of the shares within 120 days after the effective date of the merger. The surviving company is under no obligation to file any such petition in the Delaware Court of Chancery and has no intention of doing so. Accordingly, it is the obligation of the Northern States stockholders demanding appraisal to initiate all necessary action to perfect their appraisal rights in respect of shares of Northern States common stock within the time prescribed in Section 262 of the DGCL.

        Voting, in person or by proxy, against, abstaining from voting on or failing to vote on the adoption of the merger agreement will not constitute a written demand for appraisal as required by Section 262 of the DGCL. The written demand for appraisal must be in addition to and separate from any proxy or vote.

        Who May Exercise Appraisal Rights.    Any holder of shares of Northern States common stock wishing to exercise appraisal rights must deliver to Northern States, before the vote on the adoption of the merger agreement at the special meeting at which the merger proposal will be submitted to the Northern States stockholders, a written demand for the appraisal of such stockholder's shares, and that stockholder must not submit a blank proxy or vote in favor of the merger proposal. A holder of shares of Northern States common stock wishing to exercise appraisal rights must hold of record the shares on the date the written demand for appraisal is made and must continue to hold the shares of record through the effective date of the merger. A demand for appraisal must be executed by or on behalf of the stockholder of record and must reasonably inform Northern States of the identity of the stockholder and that the stockholder intends to demand appraisal of his, her or its shares of Northern States common stock.

        Only a holder of record of shares of Northern States common stock is entitled to demand appraisal rights for the shares registered in that holder's name. Beneficial owners who do not also hold their shares of common stock of record may not directly make appraisal demands to Northern States. The beneficial holder must, in such cases, have the owner of record, such as a bank, brokerage firm or other nominee, submit the required demand in respect of those shares of common stock of record. A record owner, such as a bank, brokerage firm or other nominee, who holds shares of Northern States common stock as a nominee for others, may exercise his, her or its right of appraisal with respect to the shares of Northern States common stock held for one or more beneficial owners, while not exercising this right for other beneficial owners. In that case, the written demand should state the number of shares of Northern States common stock as to which appraisal is sought. Where no number of shares of Northern States common stock is expressly mentioned, the demand will be presumed to cover all shares of Northern States common stock held in the name of the record owner.

        IF YOU HOLD YOUR SHARES IN BANK OR BROKERAGE ACCOUNTS OR OTHER NOMINEE FORMS, AND YOU WISH TO EXERCISE APPRAISAL RIGHTS, YOU SHOULD CONSULT WITH YOUR BANK, BROKERAGE FIRM OR OTHER NOMINEE, AS APPLICABLE, TO DETERMINE THE APPROPRIATE PROCEDURES FOR THE BANK, BROKERAGE FIRM OR OTHER NOMINEE TO MAKE A DEMAND FOR APPRAISAL OF THOSE SHARES. IF YOU HAVE A BENEFICIAL INTEREST IN SHARES HELD OF RECORD IN THE NAME OF ANOTHER PERSON, SUCH AS A BANK, BROKERAGE FIRM OR OTHER NOMINEE, YOU MUST ACT PROMPTLY TO CAUSE THE RECORD HOLDER TO FOLLOW PROPERLY AND IN A TIMELY MANNER THE STEPS NECESSARY TO PERFECT YOUR APPRAISAL RIGHTS.

        If you own shares of Northern States common stock jointly with one or more other persons, as in a joint tenancy or tenancy in common, demand for appraisal must be executed by or for you and all

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other joint owners. An authorized agent, including an agent for two or more joint owners, may execute the demand for appraisal for a stockholder of record; however, the agent must identify the record owner and expressly disclose the fact that, in exercising the demand, such person is acting as agent for the record owner. If you hold shares of Northern States common stock through a broker who in turn holds the shares through a central securities depository nominee such as Cede & Co., a demand for appraisal of such shares must be made by or on behalf of the depository nominee and must identify the depository nominee as record holder.

        If you elect to exercise appraisal rights under Section 262 of the DGCL, you should mail or deliver a written demand to:

      Northern States Financial Corporation
      Attention: Scott M. Yelvington
      President and Chief Executive Officer
      1601 North Lewis Avenue
      Waukegan, Illinois 60085

You should sign every communication.

        First Midwest's actions after completion of the merger.    If the merger is completed, the surviving company will give written notice of the effective date of the merger within 10 days after the effective date to you if you did not vote in favor of the merger agreement and you made a written demand for appraisal in accordance with Section 262 of the DGCL. At any time within 60 days after the effective date of the merger, you have the right to withdraw the demand and to accept the merger consideration in accordance with the merger agreement for your shares of Northern States common stock, provided that you have not commenced an appraisal proceeding or joined an appraisal proceeding as a named party. Within 120 days after the effective date of the merger, but not later, either you, provided you have complied with the requirements of Section 262 of the DGCL, or the surviving company may commence an appraisal proceeding by filing a petition in the Delaware Court of Chancery, with a copy served on the surviving company in the case of a petition filed by you, demanding a determination of the value of the shares of Northern States common stock held by all stockholders entitled to appraisal rights. The surviving company is under no obligation to file an appraisal petition and has no intention of doing so. If you desire to have your shares appraised, you should initiate any petitions necessary for the perfection of your appraisal rights within the time periods and in the manner prescribed in Section 262 of the DGCL.

        Within 120 days after the effective date of the merger, provided you have complied with the provisions of Section 262 of the DGCL, you will be entitled to receive from the surviving company, upon written request, a statement setting forth the aggregate number of shares not voted in favor of the adoption of the merger agreement and with respect to which Northern States has received demands for appraisal, and the aggregate number of holders of those shares. The surviving company must mail this statement to you within the later of 10 days of receipt of the request or 10 days after expiration of the period for delivery of demands for appraisal. If you are the beneficial owner of shares of stock held in a voting trust or by a nominee on your behalf you may, in your own name, file an appraisal petition or request from the surviving company the statement described in this paragraph.

        If a petition for appraisal is duly filed by you or another record holder of Northern States common stock who has properly exercised appraisal rights in accordance with the provisions of Section 262 of the DGCL, and a copy of the petition is delivered to the surviving company, the surviving company will then be obligated, within 20 days after receiving service of a copy of the petition, to provide the Chancery Court with a duly verified list containing the names and addresses of all holders who have demanded an appraisal of their shares. The Delaware Court of Chancery will then determine which stockholders are entitled to appraisal rights and may require the stockholders demanding appraisal who hold certificated shares to submit their stock certificates to the Register in Chancery for notation

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thereon of the pendency of the appraisal proceedings and the Delaware Court of Chancery may dismiss any stockholder who fails to comply with this direction from the appraisal proceedings. Where appraisal proceedings are not dismissed or the demand for appraisal is not successfully withdrawn, the appraisal proceeding will be conducted as to the shares of Northern States common stock owned by such stockholders, in accordance with the rules of the Delaware Court of Chancery, including any rules specifically governing appraisal proceedings. The Delaware Court of Chancery will thereafter determine the fair value of the shares of Northern States common stock at the effective time held by stockholders entitled to appraisal rights, exclusive of any element of value arising from the accomplishment or expectation of the merger. Unless the Delaware Court of Chancery in its discretion determines otherwise for good cause shown, interest from the effective date of the merger through the date of payment of the judgment will be compounded quarterly and will accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the effective date of the merger and the date of payment of the judgment. When the value is determined, the Delaware Court of Chancery will direct the payment of such value, with interest thereon, if any, to the stockholders entitled to receive the same, upon surrender by such stockholders of their stock certificates in the case of shares represented by certificates and forthwith in the case of uncertificated shares.

        In determining the fair value, the Delaware Court of Chancery is required to take into account all relevant factors. In Weinberger v. UOP, Inc., the Delaware Supreme Court discussed the factors that could be considered in determining fair value in an appraisal proceeding, stating that "proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court" should be considered and that "[f]air price obviously requires consideration of all relevant factors involving the value of a company." The Delaware Supreme Court has stated that, in making this determination of fair value, the court must consider market value, asset value, dividends, earnings prospects, the nature of the enterprise and any other factors which could be ascertained as of the date of the merger which throw any light on future prospects of the merged corporation. Section 262 of the DGCL provides that fair value is to be "exclusive of any element of value arising from the accomplishment or expectation of the merger." In Cede & Co. v. Technicolor, Inc., the Delaware Supreme Court stated that such exclusion is a "narrow exclusion [that] does not encompass known elements of value," but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger, the Delaware Supreme Court construed Section 262 of the DGCL to mean that "elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the merger and not the product of speculation, may be considered."

        An opinion of an investment banking firm as to the fairness from a financial point of view of the consideration payable in a merger is not an opinion as to, and does not in any manner address, fair value under Section 262 of the DGCL. The fair value of their shares as determined under Section 262 of the DGCL could be greater than, the same as, or less than the value of the merger consideration. We do not anticipate offering more than the per share merger consideration to any stockholder exercising appraisal rights and reserve the right to assert, in any appraisal proceeding, that, for purposes of Section 262, the "fair value" of a share of Northern States common stock is less than the per share merger consideration.

        If no party files a petition for appraisal within 120 days after the effective time, then you will lose the right to an appraisal, and will instead receive the merger consideration described in the merger agreement, without interest thereon, less any withholding taxes.

        The Delaware Court of Chancery may determine the costs of the appraisal proceeding and may allocate those costs to the parties as the Delaware Court of Chancery determines to be equitable under the circumstances. However, costs do not include attorneys and expert witness fees. Each stockholder exercising appraisal rights is responsible for its own attorneys and expert witnesses expenses, although,

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upon application of a stockholder, the Delaware Court of Chancery may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including reasonable attorneys' fees and the fees and expenses of experts, to be charged pro rata against the value of all shares entitled to appraisal.

        If you have duly demanded an appraisal in compliance with Section 262 of the DGCL you may not, after the effective date of the merger, vote the Northern States shares subject to the demand for any purpose or receive any dividends or other distributions on those shares, except dividends or other distributions payable to holders of record of shares of Northern States common stock as of a record date prior to the effective date of the merger.

        If you have not commenced an appraisal proceeding or joined such a proceeding as a named party you may withdraw a demand for appraisal and accept the merger consideration by delivering a written withdrawal of the demand for appraisal to the surviving company, except that any attempt to withdraw made more than 60 days after the effective date of the merger will require written approval of the surviving company, and no appraisal proceeding in the Delaware Court of Chancery will be dismissed as to any stockholder without the approval of the Delaware Court of Chancery. Such approval may be conditioned on the terms the Delaware Court of Chancery deems just; provided, however, that this provision will not affect the right of any stockholder who has not commenced an appraisal proceeding or joined such proceeding as a named party to withdraw such stockholder's demand for appraisal and to accept the terms offered in the merger within 60 days after the effective date of the merger. If you fail to perfect, successfully withdraw or lose the appraisal right, your shares will be converted into the right to receive the merger consideration, without interest thereon, less any withholding taxes.

        Failure to follow the steps required by Section 262 of the DGCL for perfecting appraisal rights may result in the loss of appraisal rights. In that event, you will be entitled to receive the merger consideration for your shares in accordance with the merger agreement. In view of the complexity of the provisions of Section 262 of the DGCL, if you are a Northern States stockholder and are considering exercising your appraisal rights under the DGCL, you should consult your own legal advisor.

        THE PROCESS OF DEMANDING AND EXERCISING APPRAISAL RIGHTS REQUIRES STRICT COMPLIANCE WITH TECHNICAL PREREQUISITES. IF YOU WISH TO EXERCISE YOUR APPRAISAL RIGHTS, YOU SHOULD CONSULT WITH YOUR OWN LEGAL COUNSEL IN CONNECTION WITH COMPLIANCE UNDER SECTION 262 OF THE DGCL. TO THE EXTENT THERE ARE ANY INCONSISTENCIES BETWEEN THE FOREGOING SUMMARY AND SECTION 262 OF THE DGCL, THE DGCL WILL GOVERN.

Voting Agreements

        In connection with the execution of the merger agreement, and as a condition to First Midwest's willingness to enter into the merger agreement, all of the directors of Northern States who beneficially owned in the aggregate approximately 7.4% of Northern States' outstanding common stock as of June 6, 2018, have entered into voting agreements with First Midwest. A copy of the form of these voting agreements is attached as Annex 1-B to Appendix A to this proxy statement/prospectus.

        Under the voting agreement, each such stockholder has agreed, with respect to the shares of Northern States common stock owned of record or beneficially by the stockholder, that at any meeting of Northern States stockholders in relation to the merger agreement and transactions contemplated by the merger agreement and at the special stockholders meeting or any other meeting or action of

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Northern States stockholders called in relation to such matters, the stockholder shall vote, or cause to be voted, such shares as follows:

    vote in favor of the adoption of the merger agreement and the transactions contemplated by the merger agreement, including the merger, any other matters required to be approved or adopted in order to effect the merger and the transactions contemplated by the merger agreement; and

    not vote in favor of any competing acquisition proposal or any action that is intended or could reasonably be expected to materially impede, interfere with, delay or materially and adversely affect the merger or any transactions contemplated by the merger agreement.

        The voting agreement also contains restrictions on the sale, transfer, assignment, pledge or other disposition of the stockholder's shares prior to the effective time of the merger, unless the proposed transferee executes and delivers an agreement in which it agrees to comply with the requirements of the voting agreement.

        The voting agreement will terminate automatically upon the termination of the merger agreement, in the event the board of directors of Northern States submits the merger agreement to the Northern States stockholders without a recommendation for approval or December 31, 2020.

Confidentiality, Non-Solicitation and Non-Competition Agreements

        In connection with the execution of the merger agreement, and as a condition to First Midwest's willingness to enter into the merger agreement, all of the directors of Northern States who beneficially owned in the aggregate approximately 7.4% of Northern States' outstanding common stock as of the Northern States record date, have entered into confidentiality, non-solicitation and non-competition agreements with First Midwest. Copies of the forms of these confidentiality, non-solicitation and non-competition agreements are attached as Annex 2-B to Appendix A to this proxy statement/prospectus.

        Under the confidentiality, non-solicitation and non-competition agreement, each director has agreed to keep secret and confidential certain information related to Northern States, NorStates Bank and their respective businesses and to refrain from competing against the business of Northern States and soliciting the customers or employees of Northern States for two years following the effective time of the merger. Although most of our directors entered into the form of confidentiality, non-solicitaion and non-competition agreement attached hereto as Annex 2-B to Appendix A, Scott Cottrell, Gregory Gersack, and Joel Leonard, directors of Northern States, entered into a modified version of the confidentiality, non-solicitaion and non-competition agreement. The modified version revised certain of the non-competition provisions so that these restrictions would not prevent these directors from continuing with their current employment and related activities in investment banking or investment management.

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PRICE RANGE OF COMMON STOCK AND DIVIDENDS

Market Prices

        First Midwest common stock is traded on the Nasdaq Stock Market under the symbol "FMBI." The following table sets forth the high and low reported intra-day sales prices per share of First Midwest common stock as reported by Nasdaq and the cash dividends declared per share of First Midwest common stock.

 
  Sales Price
Per Share
   
 
 
  Quarterly Cash
Dividends
Per Share
 
 
  High   Low  

2016

                   

First Quarter

  $ 18.59   $ 14.56   $ 0.09  

Second Quarter

  $ 18.85   $ 15.86   $ 0.09  

Third Quarter

  $ 19.90   $ 16.68   $ 0.09  

Fourth Quarter

  $ 25.56   $ 18.75   $ 0.09  

2017

                   

First Quarter

  $ 25.83   $ 22.19   $ 0.09  

Second Quarter

  $ 24.72   $ 21.61   $ 0.09  

Third Quarter

  $ 24.00   $ 20.50   $ 0.10  

Fourth Quarter

  $ 25.86   $ 22.03   $ 0.10  

2018

                   

First Quarter

  $ 26.55   $ 23.44   $ 0.11  

Second Quarter

  $ 27.40   $ 23.93   $ 0.11  

Third Quarter (through August 20, 2018)

  $ 27.28   $ 25.31   $ 0.11 (1)

(1)
On August 15, 2018, First Midwest declared its third quarter cash dividend of $0.11 per share, payable October 9, 2018 to stockholders of record as of September 28, 2018.

        Northern States common stock is currently quoted over-the-counter on the OTC Pink market under the symbol "NSFC." Any market in Northern States common stock prior to the merger should be characterized as illiquid and irregular. The following table sets forth the high and low trading prices per share of Northern States common stock as reported on the OTC Pink market.

 
  Sales Price
Per Share
 
 
  High   Low  

2016

             

First Quarter

  $ 0.64   $ 0.575  

Second Quarter

  $ 0.63   $ 0.60  

Third Quarter

  $ 0.68   $ 0.611  

Fourth Quarter

  $ 0.74   $ 0.65  

2017

             

First Quarter

  $ 0.845   $ 0.70  

Second Quarter

  $ 0.80   $ 0.736  

Third Quarter

  $ 0.8949   $ 0.77  

Fourth Quarter

  $ 0.84   $ 0.72  

2018

             

First Quarter

  $ 0.98   $ 0.73  

Second Quarter

  $ 0.95   $ 0.745  

Third Quarter (through August 20, 2018)

  $ 0.93   $ 0.87  

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        The following table sets forth the closing sale prices per share of First Midwest common stock and Northern States common stock on June 6, 2018, the last trading day completed before the public announcement of the signing of the merger agreement, and on August 20, 2018.

 
  Closing Price
Per Share of
First Midwest
Common Stock
  Closing Price
Per Share of
Northern States
Common Stock
 

June 6, 2018

  $ 27.25   $ 0.7801  

August 20, 2018

  $ 27.17   $ 0.9150  

        Past price performance is not necessarily indicative of likely future performance. Because market prices of shares of First Midwest common stock will fluctuate, you are urged to obtain current market prices for shares of First Midwest common stock. No assurance can be given concerning the market price of shares of First Midwest common stock before or after the effective date of the merger. Changes in the market price of shares of First Midwest common stock prior to the completion of the merger will affect the market value of the merger consideration that Northern States stockholders will receive upon completion of the merger.

Dividends and Other Matters

        First Midwest may repurchase shares of its common stock in accordance with applicable legal guidelines. The actual amount of shares repurchased will depend on various factors, including: the discretion of First Midwest's board of directors, market conditions, legal limitations and considerations affecting the amount and timing of repurchase activity, the company's capital position, internal capital generation and alternative potential investment opportunities.

        After the merger, First Midwest currently expects to pay (when, as and if declared by First Midwest's board of directors out of funds legally available) regular quarterly cash dividends of at least $0.11 per share, in accordance with First Midwest's current practice. The actual payment of future dividends remains subject to the determination and discretion of First Midwest's board of directors and may change at any time. In each of the first three quarters of 2018, First Midwest declared a quarterly cash dividend of $0.11 per share of First Midwest common stock.

        First Midwest's primary source of liquidity is dividend payments from First Midwest Bank. In addition to requirements to maintain adequate capital above regulatory minimums, First Midwest Bank is limited in the amount of dividends it can pay to First Midwest under the Illinois Banking Act. Under this law, First Midwest Bank is permitted to declare and pay dividends in amounts up to the amount of its accumulated net profits, provided that it retains in its surplus at least one-tenth of its net profits since the date of the declaration of its most recent dividend until those additions to surplus, in the aggregate, equal the paid-in capital of First Midwest Bank. While it continues its banking business, First Midwest Bank may not pay dividends in excess of its net profits then on hand (after deductions for losses and bad debts). In addition, First Midwest Bank is limited in the amount of dividends it can pay under the Federal Reserve Act and Regulation H. For example, dividends cannot be paid that would constitute a withdrawal of capital, dividends cannot be declared or paid if they exceed a bank's undivided profits and a bank may not declare or pay a dividend if all dividends declared during the calendar year are greater than current year net income plus retained net income of the prior two years without Federal Reserve approval.

        Since First Midwest is a legal entity separate and distinct from First Midwest Bank, its dividends to stockholders are not subject to the bank dividend guidelines discussed above. However, First Midwest is subject to other regulatory policies and requirements related to the payment of dividends, including requirements to maintain adequate capital above regulatory minimums. The Federal Reserve and the IDFPR are authorized to determine that the payment of dividends by First Midwest would be an

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unsafe or unsound practice and to prohibit payment under certain circumstances related to the financial condition of a bank or bank holding company. The Federal Reserve has taken the position that dividends that would create pressure or undermine the safety and soundness of a subsidiary bank are inappropriate. Due to the current financial and economic environment, the Federal Reserve indicated that bank holding companies should carefully review their dividend policy and discourage payment ratios that are at maximum allowable levels, unless both asset quality and capital are very strong.

        Northern States has not paid any dividends to holders of its common stock during 2018 and the last two most recent fiscal years. Pursuant to the merger agreement, Northern States is generally prohibited from paying cash dividends to holders of its common stock prior to completion of the merger.

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INFORMATION ABOUT THE COMPANIES

First Midwest

        First Midwest is a relationship-focused financial institution and one of the largest independent publicly-traded bank holding companies based on assets headquartered in Chicago and in the Midwest, with approximately $15 billion in assets and $11 billion in trust assets under management. First Midwest's principal subsidiary, First Midwest Bank, and other affiliates provide a full range of commercial, treasury management, equipment leasing, retail, wealth management, trust and private banking products and services through locations in metropolitan Chicago, northwest Indiana, central and western Illinois, and eastern Iowa. First Midwest common stock is traded on the Nasdaq Stock Market under the symbol "FMBI."

        First Midwest's executive offices are located at 8750 West Bryn Mawr Avenue, Suite 1300, Chicago, Illinois 60631, and its telephone number is (708) 831-7563.

Northern States

        Northern States, a Delaware corporation incorporated in 1984, is a registered bank holding company headquartered in Waukegan, Illinois. Its primary business is operating its bank subsidiary, NorStates Bank, an Illinois state chartered bank headquartered in Waukegan, Illinois. NorStates Bank is the successor to financial institutions dating back to 1919. With eight locations throughout Lake County, Illinois, NorStates Bank is committed to providing quality financial and investment services with a personal approach through a complete line of loan, deposit, cash management and wealth management services. On June 30, 2018, Northern States had approximately $530.3 million in total assets, $443.8 million in deposits and $310.5 million in total loans.

    Business

        NorStates Bank is an independent, community banking institution headquartered in Waukegan, Illinois. NorStates Bank offers a comprehensive line of products and services designed to meet the financial needs of the communities it serves. The banking and financial services industry in the markets in which NorStates Bank operates is highly competitive. Generally, NorStates Bank competes for banking customers and deposits with other local, regional, national, and internet banks and savings and loan associations; personal loan and finance companies; credit unions; mutual funds; and investment brokers.

    Personal and Business Services

        NorStates Bank offers a full range of personal and business products and services, including checking and savings accounts, money market accounts and time deposits of various types, ranging from short-term to long-term certificates of deposit and individual retirement accounts. In addition, NorStates Bank offers online and mobile banking services, merchant services, and credit cards.

    Lending

        NorStates Bank provides a full range of borrowing options, including business term loans, commercial real estate loans, equipment financing and leasing options, SBA financing, residential real estate loans, and personal lending products and services for its customers. The majority of NorStates Bank's customer relationships are based in northeastern Illinois and southeastern Wisconsin. When extending credit, NorStates Bank's decisions are based upon many factors, including, but not limited to, the customer's ability to repay their loan, as well as the value of any collateral securing the loan.

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    Sources of Funds

        NorStates Bank maintains stable sources of funding, primarily through deposits from its customers. NorStates Bank's largest categories of deposits are noninterest-bearing demand deposits, followed by savings deposits, time deposits, interest-bearing demand deposits and money market accounts. NorStates Bank also obtains funds from the amortization, repayment, and prepayment of loans; the sales or maturity of investment securities; securities sold under agreements to repurchase; federal funds purchased; and cash flows generated by operations.

    Investment Activities

        NorStates Bank maintains a securities portfolio to manage risk and provide NorStates Bank with asset diversification, income, collateral for its own borrowing and financial stability. The objectives of the securities portfolio are to diversify and mitigate exposures to credit and interest rate risk, to provide liquidity and to enhance profitability by fully investing available funds.

    Additional Information

        Northern States common stock is not registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, accordingly, Northern States does not file periodic or current reports with the SEC. Northern States common stock is currently quoted over-the-counter on the OTC Pink market under the symbol "NSFC."

        Northern States' executive offices are located at 1601 North Lewis Avenue, Waukegan, Illinois 60085, and its telephone number is (847) 775-8200.

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DESCRIPTION OF FIRST MIDWEST CAPITAL STOCK

        As a result of the merger, Northern States stockholders who receive shares of First Midwest common stock in the merger will become stockholders of First Midwest. First Midwest stockholder's rights will be governed by Delaware law and the restated certificate of incorporation and the amended and restated by-laws of First Midwest as may be amended and in effect from time to time. The following description of the material terms of First Midwest's capital stock, including the common stock to be issued in the merger, reflects the anticipated state of affairs upon completion of the merger. We urge all Northern States stockholders to read the applicable provisions of Delaware law, First Midwest's restated certificate of incorporation and amended and restated by-laws and federal law governing bank holding companies carefully and in their entirety. Copies of First Midwest's restated certificate of incorporation and First Midwest's amended and restated by-laws have been filed with the SEC. To find out where copies of these documents can be obtained, see "Where You Can Find More Information."

General

        First Midwest's authorized capital stock consists of 250,000,000 shares of First Midwest common stock, par value $0.01 per share, and 1,000,000, shares of preferred stock, without par value. As of the Northern States record date, there were 103,158,871 shares of First Midwest common stock, including 882,419 shares of restricted stock, outstanding and no shares of First Midwest preferred stock outstanding. In addition, as of the Northern States record date, 555,804 shares of First Midwest common stock were reserved for issuance upon vesting of awards of performance shares and restricted stock units under First Midwest's equity compensation plans.

        Because First Midwest is a holding company, the rights of First Midwest to participate in any distribution of assets of any subsidiary upon its liquidation or reorganization or otherwise (and thus the ability of First Midwest stockholders to benefit indirectly from such distribution) would be subject to the prior claims of creditors of that subsidiary, except to the extent that First Midwest itself may be a creditor of that subsidiary with recognized claims. Claims on First Midwest's subsidiaries by creditors other than First Midwest will include substantial obligations with respect to deposit liabilities and purchased funds.

Preferred Stock

        First Midwest's restated certificate of incorporation authorizes the First Midwest board of directors to authorize the issuance of shares of First Midwest preferred stock without stockholder approval. The First Midwest board of directors is authorized to divide the preferred stock into series and, subject to applicable law, to fix for any series of preferred stock the number of shares of such series and the voting powers (if any), designations and preferences, priorities, qualifications, privileges, limitations, restrictions, options, conversion rights, dividend features, retirement features, liquidation features, redemption features and any other special or relative rights that may be desired for any such series. If and when any First Midwest preferred stock is issued, the holders of First Midwest preferred stock may have a preference over holders of First Midwest common stock in the payment of dividends, upon liquidation of First Midwest, in respect of voting rights and in the redemption of the capital stock of First Midwest.

Common Stock

        Dividends.    Subject to the rights of any series of preferred stock authorized by the board of directors as provided by First Midwest's restated certificate of incorporation, the holders of First Midwest common stock are entitled to dividends as and when declared by the First Midwest board of directors out of funds legally available for the payment of dividends.

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        Voting Rights.    Each holder of First Midwest common stock has one vote for each share held on matters presented for consideration by the stockholders. Except as otherwise required by law or provided in any resolution adopted by First Midwest's board of directors with respect to any series of preferred stock, the holders of common stock possess all voting power. First Midwest's restated certificate of incorporation does not provide for cumulative voting in the election of directors.

        Preemptive Rights.    The holders of First Midwest common stock have no preemptive rights and no right to convert their stock into any other securities.

        Redemption and Sinking Fund.    There are no redemption or sinking fund provisions applicable to First Midwest common stock. The holders of First Midwest common stock will have no liability for further calls or assessments and will not be personally liable for the payment of First Midwest's debts except as they may be liable by reason of their own conduct or acts.

        Issuance of Stock.    First Midwest's restated certificate of incorporation authorizes the First Midwest board of directors to authorize the issuance of shares of First Midwest common stock and any other securities without stockholder approval. However, First Midwest common stock is listed on the Nasdaq Stock Market, which requires stockholder approval of the issuance of additional shares of First Midwest common stock under certain circumstances. The DGCL also requires stockholder approval of the issuance of additional shares of First Midwest common stock under certain circumstances.

        Liquidation Rights.    In the event of liquidation or dissolution, subject to the rights of any outstanding series of preferred stock and creditors of First Midwest, the holders of First Midwest common stock are entitled to share in all assets remaining for distribution to holders of common stock according to their interests therein.

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COMPARISON OF STOCKHOLDER RIGHTS

        The rights of First Midwest stockholders are governed by the DGCL, and First Midwest's restated certificate of incorporation and amended and restated by-laws. The rights of Northern States stockholders are governed by the DGCL and Northern States' certificate of incorporation, as amended, and by-laws, as amended. After the merger, the rights of Northern States and First Midwest stockholders will be governed by the DGCL and First Midwest's restated certificate of incorporation and amended and restated by-laws. The following discussion summarizes the material differences between the rights of Northern States stockholders and the rights of First Midwest stockholders. We urge you to read First Midwest's restated certificate of incorporation, First Midwest's amended and restated by-laws, Northern States' certificate of incorporation, as amended, Northern States' by-laws, as amended, and the DGCL carefully and in their entirety.

Authorized Capital Stock

  First Midwest.    First Midwest's restated certificate of incorporation authorizes it to issue up to 250,000,000 shares of First Midwest common stock, par value $0.01 per share, and 1,000,000 shares of preferred stock, without par value. As of the Northern States record date, there were 103,158,871 shares of First Midwest common stock, including 882,419 shares of restricted stock, outstanding and no shares of First Midwest preferred stock outstanding. See "Description of First Midwest Capital Stock." As of the Northern States record date, 555,804 shares of First Midwest common stock were reserved for issuance upon vesting of awards of performance shares and restricted stock units under First Midwest's equity compensation plans.   Northern States.    Northern States' certificate of incorporation, as amended, provides that the authorized capital stock of Northern States consists of 100,000,000 shares of common stock, par value $0.01 per share, and 1,000,000 shares of preferred stock, par value $0.40 per share. As of the Northern States record date, there were 92,302,244 shares of Northern States common stock outstanding and no shares of Northern States preferred stock outstanding. As of the Northern States record date, of the authorized capital stock, 3,300,000 shares of Northern States common stock were issuable upon vesting of awards under Northern States' equity compensation plans.

Size of Board of Directors

 

First Midwest.    First Midwest's restated certificate of incorporation provides for First Midwest's board of directors to consist of not less than 3 nor more than 20 directors, with the exact number to be fixed by First Midwest's board of directors from time to time. The First Midwest board of directors currently has 13 directors.

 

Northern States.    Northern States' by-laws, as amended, provide for Northern States' board of directors to consist of not less than 7 nor more than 15 directors, with the exact number to be fixed by Northern States' board of directors from time to time. The board of directors of Northern States currently has 10 directors.

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Classes of Directors

 

First Midwest.    On May 17, 2017, First Midwest's restated certificate of incorporation was amended to declassify the board of directors. First Midwest has engaged in a three-year process to declassify its board of directors, which will conclude at First Midwest's 2019 annual meeting. Accordingly, all director terms will expire at the next annual meeting of stockholders and the successors of the directors whose terms expire at each annual meeting of stockholders shall serve a term of office expiring at the annual meeting of stockholders next following their election. Holders of shares of First Midwest common stock do not have the right to cumulate their votes in the election of directors.

 

Northern States.    Northern States' by-laws, as amended, provide that Northern States' board of directors consists of one class of directors, elected on an annual basis. Holders of shares of Northern States common stock do not have the right to cumulate their votes in the election of directors.

Removal of Directors

 

First Midwest.    Under First Midwest's restated certificate of incorporation, any First Midwest director may be removed either for or without cause at any time by the affirmative vote of the holders of at least a majority of the shares then entitled to vote in the election of directors.

 

Northern States.    Under Northern States' by-laws, as amended, any Northern States director may be removed either for or without cause at any time by the affirmative vote of the holders of at least a majority of the shares then entitled to vote in the election of directors.

Filling Vacancies on the Board of Directors

 

First Midwest.    Under First Midwest's restated certificate of incorporation, any vacancy occurring in First Midwest's board of directors shall be filled by a majority vote of the remaining directors.

 

Northern States.    Under Northern States' by-laws, as amended, any vacancy occurring in Northern States' board of directors may be filled by a majority vote of the remaining directors.

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Nomination of Director Candidates by Stockholders

 

First Midwest.    First Midwest's restated certificate of incorporation establishes procedures that stockholders must follow to nominate persons for election to First Midwest's board of directors. The stockholder making the nomination must deliver written notice to First Midwest's Secretary between 120 and 180 days prior to the date of the meeting at which directors will be elected. However, if less than 130-days' notice is given of the meeting date, that written notice by the stockholder must be delivered by the tenth day after the day on which the meeting date notice was given. Notice will be deemed to have been given more than 130 days prior to the annual meeting if First Midwest previously disclosed that the meeting in each year is to be held on a specific date.

 

Northern States.    There is no provision in Northern States' certificate of incorporation, as amended, or by-laws, as amended, that regulates the submission of nominations of director candidates by stockholders.

 

The nomination notice must set forth certain information about the person to be nominated, including information that is required pursuant to paragraphs (a), (e) and (f) of Item 401 of Regulation S-K adopted by the SEC, and must also include the nominee's written consent to being nominated and to serving as a director if elected. The nomination notice must also set forth certain information about the person submitting the notice, including the stockholder's name and address and the class and number of First Midwest shares that the stockholder owns of record or beneficially. The person presiding at the meeting may, if the facts warrant, determine that a nomination was not made in accordance with the provisions of First Midwest's restated certificate of incorporation, and the defective nomination will be disregarded.

   

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Calling Special Meetings of Stockholders

 

First Midwest.    A special meeting of stockholders may be called only by First Midwest's board of directors, by First Midwest's Chairman of the board of directors or by First Midwest's President; provided, however, that holders of at least 51% of First Midwest's outstanding stock entitled to vote generally in the election of directors may also call a special meeting solely for the purpose of removing a director or directors for cause.

 

Northern States.    A special meeting of stockholders may be called only by Northern States' board of directors, by Northern States' Chairman of the board of directors, by Northern States' President, or by Northern States' Secretary, and shall be called upon a request in writing stating the purpose of such special meeting signed by a majority of Northern States' board of directors or the holders of the majority of the capital stock of Northern States issued and outstanding and entitled to vote at such special meeting.

Stockholder Proposals

 

First Midwest.    First Midwest's amended and restated bylaws provide that stockholder proposals brought before any stockholder meeting shall be determined by a majority of the votes cast, unless a greater number is required by law or the First Midwest restated certificate of incorporation for the action proposed.

 

Northern States.    There is no provision in Northern States' certificate of incorporation, as amended, or by-laws, as amended, that regulates the submission by a stockholder of a proposal for business to be transacted at an annual or special meeting of stockholders.

 

First Midwest's restated certificate of incorporation provides that a stockholder must give advance written notice to First Midwest of any proposal for business to be transacted at an annual or special meeting of stockholders. The notice must be in writing and must be delivered to the Secretary of First Midwest between 120 and 180 days before the stockholder meeting. However, if less than 130-days' notice is given of the meeting date, that written notice by the stockholder must be delivered by the tenth day after the day on which the meeting date notice was given.

   

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Stockholder notice for stockholder proposals must set forth, as to each matter such stockholder proposes to bring before the stockholder meeting, (i) a brief description of the business desired to be brought before the meeting and the reasons for why the stockholder favors the proposal, (ii) the name and record address of such stockholder, (iii) the class or series and number of shares of First Midwest capital stock which are owned beneficially or of record of such stockholder, and (iv) any material interest of the stockholder in such proposal.

   

Notice of Stockholder Meetings

 

First Midwest.    First Midwest's amended and restated by-laws provide that First Midwest must notify stockholders between 10 and 60 days before any stockholder meeting of the place, day and hour of the meeting and the general nature of the business to be considered at the meeting.

 

Northern States.    Northern States' by-laws, as amended, provide that Northern States must notify stockholders between 10 and 50 days before any stockholder meeting of the place, day and hour of the meeting and the general nature of the business to be considered at the meeting.

Stockholder Rights Plans ("Poison Pill")

 

First Midwest.    First Midwest does not have a stockholder rights plan in place.

 

Northern States. Northern States does not have a stockholder rights plan in place. Northern States' prior stockholder rights plan expired on April 3, 2017.

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Indemnification of Directors and Officers

 

First Midwest.    First Midwest's amended and restated by-laws provide that First Midwest will indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of the fact that such person is or was a director, officer, employee or agent of First Midwest or by reason of the fact that such person is or was serving at the request of First Midwest as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, or other enterprise, against expenses (including attorneys' fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit, or proceeding, but in each case only if and to the extent permitted under Delaware or federal law.

 

Northern States.    Northern States' by-laws, as amended, provide that Northern States will indemnify, to the extent permitted by Delaware law, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of Northern States) by reason of the fact that such person is or was a director, officer, employee or agent of Northern States, or is or was serving at the request of the agent of Northern States, or is or was serving at the request of Northern States as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, or other enterprise, against expenses (including attorneys' fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit, or proceeding, if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of Northern States, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such conduct was unlawful.

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Northern States' by-laws, as amended, also provide that Northern States will indemnify, to the extent permitted by Delaware law, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of Northern States to procure a judgment in its favor by reason of the fact that such person is or was a director, officer, employee or agent of Northern States or is or was serving at the request of Northern States as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit, if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of Northern States.

Amendments to Certificate of Incorporation and By-Laws

 

First Midwest.    First Midwest's restated certificate of incorporation provides that the affirmative vote of the holders of at least 80% of the outstanding shares of capital stock entitled to vote is required to alter, amend or repeal most provisions of the restated certificate of incorporation; provided, however, if any proposal to alter, amend or repeal any such provision is approved by 80% of the board of directors, then in such case only the affirmative vote as is required by law or as may otherwise be required by the restated certificate of incorporation of the outstanding shares of capital stock entitled to vote is required to alter, amend or repeal such provision. First Midwest's amended and restated by-laws may be amended only upon the affirmative vote of a majority of all of the directors or upon the affirmative vote of the holders of at least 67% of the voting power of the then outstanding shares of capital stock entitled to vote.

 

Northern States.    Northern States' certificate of incorporation, as amended, provides that the corporation reserves the right to amend its certificate of incorporation in the manner prescribed by the DGCL. Northern States' by-laws, as amended, provide that Northern States' by-laws may be amended by Northern States' stockholders at a regular or special meeting of the stockholders or by Northern States' board of directors at any regular or special meeting of the board of directors.

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Forum Selection Clause

 

First Midwest.    First Midwest's by-laws were amended on May 18, 2016 to provide that Delaware will be the sole and exclusive forum for certain types of legal actions unless First Midwest consents in writing to the selection of an alternative forum.

 

Northern States.    Northern States does not have a forum selection clause in its certificate of incorporation, as amended, or by-laws, as amended.

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SECURITY OWNERSHIP OF CERTAIN NORTHERN STATES BENEFICIAL OWNERS AND MANAGEMENT

        The following table sets forth, as of August 20, 2018, holdings of Northern States common stock by each present director and executive officer of Northern States and all directors and executive officers as a group based on 92,302,244 shares of common stock outstanding. The address for each director and executive officer listed below is c/o Northern States Financial Corporation, 1601 North Lewis Avenue, Waukegan, Illinois 60085. To the knowledge of Northern States, there are no stockholders that beneficially own 5% or more of the outstanding shares of Northern States common stock.

Name
  Number and
Nature of
Common
Shares
Beneficially
Owned(1)(2)(3)
  % of
Outstanding
Common
Shares(2)

Directors

         

Theodore A. Bertrand

    450,120   *

Jack H. Blumberg

    199,710   *

Hon. George Bridges

    20,000   *

Scott A. Cottrell(4)

    40,000   *

Frank J. Furlan

    160,000   *

Gregory R. Gersack

    2,914,106   3.2%

Allan J. Jacobs

    198,634   *

Joel T. Leonard

    740,000   *

Barbara J. Martin

    100,000   *

Scott M. Yelvington (President and Chief Executive Officer)

    2,052,446   2.2%

Other Executive Officers

   
 
 

 

Patricia Christian

   
979,659
 

1.1%

Randall P. Sara

    300,000   *

Matthew Tilton

    528,810   *

All directors and executive officers as a group (13 in group)

   
8,683,485
 

9.4%


*
Less than 1.0%.

(1)
For purposes of this table, "beneficial ownership" is determined in accordance with Rule 13d-3 under the Exchange Act, pursuant to which a person or group of persons is deemed to have "beneficial ownership" of any shares of Northern States common stock that such person or group has the right to acquire within 60 days after August 20, 2018.

(2)
The amounts shown include shares held through the Northern States Stock Plan, including 2,100,000 restricted stock awards that have been issued to officers and directors of Northern States and will be eligible to vote at the meeting pursuant to the terms of the Northern States Stock Plan.

(3)
The amounts shown include shares held jointly with such person's spouse (except where legally separated) or for minor children; shares held by a family trust as to which such person is a trustee with sole voting and investment power (or shared power with a spouse); and shares held in an Individual Retirement Account or pension plan of which such person is the sole beneficiary, and as to which such person has pass-through voting rights and investment power.

(4)
Scott Cottrell is a Managing Director of FJ Capital Management, LLC, which owns, or manages on behalf of its clients shares of Northern States Financial Corporation stock. Mr. Cottrell has no voting power or dispositive authority over the shares owned or managed by FJ Capital Management, LLC.

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STOCKHOLDER PROPOSALS

        Northern States held its annual meeting of stockholders on May 17, 2018. If the merger is completed, Northern States stockholders will become stockholders of First Midwest and there will be no future annual meetings of Northern States stockholders.

        Northern States' next annual meeting is currently anticipated to be held on May 16, 2019, if the merger has not been completed by that date. Stockholders who have director nomination recommendations should contact Jack Blumberg, Chairman of the Nominating and Corporate Governance Committee, Northern States Financial Corporation, 1601 North Lewis Avenue, Waukegan, Illinois 60085. To recommend a prospective nominee for the committee's consideration, stockholders must submit the candidate's name and qualifications to the Chairman of the Nominating and Corporate Governance Committee, which must include: (i) the proposed nominee's name and qualifications (including five-year employment history with employer names and a description of the employer's business, whether such individual can read and understand basic financial statements and board memberships (if any)), and the reasons for such recommendation, (b) the name and the record address of the stockholder or stockholders proposing such nominee, (c) the number of shares of common stock of Northern States that are beneficially owned by such stockholder or stockholders, and (d) a description of any financial or other relationship between the stockholder or stockholders and such nominee, or between the nominee and Northern States or any of its subsidiaries. The submission must be accompanied by a written consent of the individual to stand for election if nominated by the board of directors of Northern States and to serve if elected by the stockholders. Recommendations received by December 26, 2018 will be considered for nomination at the 2019 annual meeting of stockholders if the merger has not been completed by that date.


VALIDITY OF SECURITIES

        The validity of the First Midwest common stock to be issued in connection with the merger has been passed upon for First Midwest by Chapman and Cutler.


EXPERTS

        The consolidated financial statements of First Midwest Bancorp, Inc. appearing in First Midwest Bancorp, Inc.'s Annual Report (Form 10-K) for the year ended December 31, 2017, and the effectiveness of First Midwest Bancorp, Inc.'s internal control over financial reporting as of December 31, 2017 have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports thereon, included therein, and incorporated herein by reference. Such consolidated financial statements and First Midwest Bancorp, Inc. management's assessment of the effectiveness of internal control over financial reporting as of December 31, 2017 are incorporated herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.

        The consolidated financial statements of Northern States Financial Corporation and its subsidiaries as of December 31, 2017 and 2016 and for each of the years in the two-year period ended December 31, 2017, have been audited by Plante & Moran, PLLC, an independent registered public accounting firm, as stated in their reports thereon and included in the registration statement of which this proxy statement/prospectus is a part in reliance upon such reports and upon the authority of such firm as experts in accounting and auditing.

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OTHER MATTERS

        As of the date of this proxy statement/prospectus, Northern States' board of directors knows of no matter that will be presented for consideration at its special meeting other than as described in this proxy statement/prospectus. If any other matters properly come before the Northern States special meeting, or any adjournments thereof, and are voted upon, the enclosed proxies will be deemed to confer discretionary authority on the individuals that they name as proxies to vote the shares represented by those proxies as to any of these matters. The individuals named as proxies intend to vote or not to vote in accordance with the recommendation of the board of directors of Northern States.


WHERE YOU CAN FIND MORE INFORMATION

        First Midwest has filed a registration statement with the SEC under the Securities Act that registers the distribution to Northern States stockholders of the shares of First Midwest common stock to be issued in the merger.

        The registration statement, of which this proxy statement/prospectus is a part, including the attached appendices and exhibits, contains additional relevant information about First Midwest and its common stock, Northern States and the combined company.

        First Midwest is required to file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any documents filed by First Midwest at the SEC's public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. First Midwest's filings with the SEC are also available to the public through the SEC's Internet website at http://www.sec.gov. You can also find information about First Midwest by visiting First Midwest's website at www.firstmidwest.com. Information contained on these websites does not constitute part of this proxy statement/prospectus.

        The SEC allows First Midwest to "incorporate by reference" information into this proxy statement/prospectus. This means that First Midwest can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is considered to be a part of this proxy statement/prospectus, except for any information that is superseded by information that is included directly in this proxy statement/prospectus.

        This proxy statement/prospectus incorporates by reference the documents listed below that First Midwest has previously filed with the SEC (other than the portions of those documents not deemed to be filed). They contain important information about First Midwest and First Midwest's financial condition:

    Annual Report on Form 10-K for the year ended December 31, 2017;

    Definitive Proxy Statement on Schedule 14A for First Midwest's 2018 Annual Meeting of Stockholders filed on April 11, 2018;

    Quarterly Reports on Form 10-Q filed for the quarters ended March 31, 2018 and June 30, 2018;

    Current Reports on Form 8-K filed on February 27, 2018, May 17, 2018, May 21, 2018 (solely with respect to the disclosure set forth under Item 2.05 of such report), June 7, 2018, June 22, 2018 and August 16, 2018; and

    The description of First Midwest common stock set forth in First Midwest's registration statement on Form 8-A filed on March 7, 1983 and any amendment or report filed for the purpose of updating any such description, including the form of First Midwest common stock

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      certificate filed as an exhibit to the registration statement of which this proxy statement/prospectus is a part.

        First Midwest incorporates by reference additional documents that it may file with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act between the date of this proxy statement/prospectus and the date of Northern States' special meeting (other than the portions of those documents not deemed to be filed). These documents include periodic reports, such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as proxy statements.

        First Midwest has supplied all information contained or incorporated by reference in this proxy statement/prospectus relating to First Midwest. Northern States has supplied all information contained in this proxy statement/prospectus relating to Northern States.

        You can obtain any of the documents incorporated by reference in this proxy statement/prospectus through First Midwest or from the SEC through the SEC's Internet website at http://www.sec.gov. Documents incorporated by reference are available from First Midwest without charge, excluding any exhibits to those documents unless the exhibit is specifically incorporated by reference as an exhibit in this proxy statement/prospectus. You can obtain documents incorporated by reference in this proxy statement/prospectus by requesting them in writing or by telephone as specified below:

First Midwest Bancorp, Inc.
Attention: Corporate Secretary
8750 West Bryn Mawr Avenue, Suite 1300
Chicago, Illinois 60631
(708) 831-7563

        You will not be charged for any of these documents that you request. In order for you to receive timely delivery of the documents, you must request them no later than September 28, 2018, in order to receive them before the Northern States special meeting. If you request any incorporated documents, First Midwest will mail them to you by first-class mail, or another equally prompt means, within one business day after it receives your request.

        We have not authorized anyone to give any information or make any representation about the merger agreement or the merger or our companies that is different from, or in addition to, that contained in this proxy statement/prospectus or in any of the materials that First Midwest has incorporated into this proxy statement/prospectus. Therefore, if anyone does give you information of this sort, you should not rely on it. If you are in a jurisdiction where offers to exchange or sell, or solicitations of offers to exchange or purchase, the securities offered by this proxy statement/prospectus or the solicitation of proxies is unlawful, or if you are a person to whom it is unlawful to direct these types of activities, then the offer presented in this proxy statement/prospectus does not extend to you. The information contained in this proxy statement/prospectus speaks only as of the date of this proxy statement/prospectus unless the information specifically indicates that another date applies.

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INDEX TO FINANCIAL STATEMENTS

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LOGO   Plante & Moran, PLLC
10 South Riverside Plaza
9th floor
Chicago, IL 60606
Tel: 312.207.1040
Fax: 312.207.1066
plantemoran.com


Independent Auditor's Report

To the Audit Committee of the
Board of Directors and Stockholders
Northern States Financial Corporation

        We have audited the accompanying consolidated financial statements of Northern States Financial Corporation (the "Corporation"), which comprise the consolidated balance sheet as of December 31, 2017 and 2016 and the related consolidated statements of income (loss), comprehensive income (loss), stockholders' equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.

Management's Responsibility for the Consolidated Financial Statements

        Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

        Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

        An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

        We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

   

LOGO

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Opinion

        In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Northern States Financial Corporation as of December 31, 2017 and 2016 and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

    SIG

March 14, 2018

 

 

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NORTHERN STATES FINANCIAL CORPORATION

CONSOLIDATED BALANCE SHEET

December 31,
  2017   2016  
($000s, except per share data)
   
   
 

Assets

             

Cash and due from banks

  $ 4,323   $ 4,552  

Interest bearing deposits in financial institutions—maturities less than 90 days

    59,062     41,179  

Total cash and cash equivalents

    63,385     45,731  

Interest bearing deposits in financial institutions—maturities of 90 days or greater

    28,492     29,233  

Securities available for sale

    50,570     63,180  

Securities held to maturity (fair value $12,808 and $13,082 at December 31, 2017 and 2016, repectively)

    12,714     12,996  

Loans and leases, net of deferred fees

    307,448     289,594  

Less: Allowance for loan and lease losses

    (6,821 )   (5,703 )

Loans and leases, net

    300,627     283,891  

Federal Home Loan Bank stock

    492     931  

Office buildings and equipment, net

    8,443     8,525  

Other real estate owned

    2,039     10,236  

Accrued interest receivable

    1,224     1,247  

Bank owned life insurance

    10,886     10,597  

Deferred tax asset, net

    15,693     22,436  

Other assets

    1,360     985  

Total assets

  $ 495,925   $ 489,988  

Liabilities and Stockholders' Equity

             

Liabilities

             

Deposits

             

Demand—noninterest bearing

  $ 115,619   $ 100,870  

Demand—interest bearing

    61,288     70,127  

Money market accounts

    53,347     48,231  

Savings

    89,876     90,095  

Time, over $250,000

    26,892     26,510  

Time, $250,000 and under

    51,624     54,977  

Total deposits

    398,646     390,810  

Securities sold under repurchase agreements

    29,012     25,901  

Subordinated debentures

    10,310     10,310  

Advances from borrowers for taxes and insurance

    2,897     1,902  

Accrued interest payable and other liabilities

    2,586     2,605  

Total liabilities

    443,451     431,528  

Stockholders' Equity

             

Common stock

    927     906  

Restricted stock—unearned compensation

    (2,542 )   (1,260 )

Additional paid-in capital

    35,700     34,019  

Retained earnings

    18,927     25,308  

Treasury stock, at cost

    (297 )   (182 )

Accumulated other comprehensive loss, net

    (241 )   (331 )

Total stockholders' equity

    52,474     58,460  

Total liabilities and stockholders' equity

  $ 495,925   $ 489,988  

 

 
  December 31, 2017   December 31, 2016  
 
  Preferred
Shares
  Common
Shares
  Preferred
Shares
  Common
Shares
 

Par value

  $ 0.40   $ 0.01   $ 0.40   $ 0.01  

Shares authorized

    1,000,000     100,000,000     1,000,000     100,000,000  

Shares issued

    0     92,654,088     0     90,604,088  

Treasury shares

    0     401,844     0     258,914  

Shares outstanding

    0     92,252,244     0     90,345,174  

   

The accompanying notes are an integral part of these consolidated financial statements.

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NORTHERN STATES FINANCIAL CORPORATION

CONSOLIDATED STATEMENT OF INCOME (LOSS)

($000s, except share and per share data)

Years ended December 31,
  2017   2016  

Interest income

             

Loans (including fee income)

  $ 13,405   $ 11,864  

Securities

             

Taxable

    1,336     1,528  

Exempt from federal income tax

    0     12  

Federal funds sold and other

    874     582  

Total interest income

    15,615     13,986  

Interest expense

             

Time deposits

    288     270  

Other deposits

    104     91  

Repurchase agreements and federal funds purchased

    3     2  

Subordinated debentures

    335     271  

Total interest expense

    730     634  

Net interest income

    14,885     13,352  

Recovery of loan and lease losses

    0     (75 )

Net interest income after recovery of loan and lease losses

    14,885     13,427  

Noninterest income

             

Service fees on deposits

    1,524     1,441  

Gain on sale of securities

    0     221  

Net gain (loss) on sale of other real estate owned

    (64 )   200  

Net gain on sale of assets

    68     0  

Bank owned life insurance income

    289     293  

Other operating income

    1,580     1,640  

Total noninterest income

    3,397     3,795  

Noninterest expense

             

Salaries and employee benefits

    7,801     8,063  

Occupancy and equipment, net

    1,926     2,069  

Data processing

    1,837     1,701  

Legal

    168     200  

FDIC insurance

    180     340  

Audit and other professional

    798     613  

Printing and supplies expense

    175     168  

Write-down of other real estate owned

    3,303     668  

Other real estate owned expense

    539     558  

Other operating expenses

    1,246     1,237  

Total noninterest expense

    17,973     15,617  

Net income before income tax benefit

    309     1,605  

Income tax expense (benefit)

    6,690     (536 )

Net income (loss)

  $ (6,381 ) $ 2,141  

Basic income (loss) per average outstanding share

  $ (0.07 ) $ 0.02  

Diluted income (loss) per average outstanding share

  $ (0.07 ) $ 0.02  

Average outstanding shares

    90,733,626     87,693,960  

   

The accompanying notes are an integral part of these consolidated financial statements.

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NORTHERN STATES FINANCIAL CORPORATION

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

($000s)

Years ended December 31,
  2017   2016  

Net income (loss)

  $ (6,381 ) $ 2,141  

Other income:

             

Changes in unrealized holding gains on securities available for sale

    142     242  

Reclassification adjustments for gains recognized in income

    0     (221 )

Tax effect

    (52 )   (33 )

Unrealized net gains (losses) on securities available for sale,net of tax

    90     (12 )

Comprehensive income (loss)

  $ (6,291 ) $ 2,129  

   

The accompanying notes are an integral part of these consolidated financial statements.

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NORTHERN STATES FINANCIAL CORPORATION

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

($000s, except per share data)

Years ended December 31,
2017 and 2016
  Common
Stock
  Restricted
Stock-
Unearned
Compensation
  Additional
Paid-In
Capital
  Retained
Earnings
  Treasury
Stock,
at Cost
  Accumulated
Other
Comprehensive
Income (Loss),
Net
  Total
Stockholders'
Equity
 

Balance, Janaury 1, 2016

  $ 878   $ 0   $ 32,088   $ 27,700   $ (4,674 ) $ (319 ) $ 55,673  

Net income

                      2,141                 2,141  

Issuance of 3,000,000 restricted common stock awards

    28     (2,100 )   1,931     (4,533 )   4,674           0  

Restricted stock awards expense

          840                             840  

Repurchase of 258,914 shares

                            (182 )         (182 )

Unrealized net loss on securities available for sale

                                  (12 )   (12 )

Balance, December 31, 2016

  $ 906   $ (1,260 ) $ 34,019   $ 25,308   $ (182 ) $ (331 ) $ 58,460  

Balance, January 1, 2017

  $ 906   $ (1,260 ) $ 34,019   $ 25,308   $ (182 ) $ (331 ) $ 58,460  

Net loss

                      (6,381 )               (6,381 )

Issuance of 2,050,000 restricted common stock awards

    21     (1,702 )   1,681                       0  

Restricted stock awards expense

          420                             420  

Repurchase of 142,930 shares

                            (115 )         (115 )

Unrealized net gain on securities available for sale

                                  90     90  

Balance, December 31, 2017

  $ 927   $ (2,542 ) $ 35,700   $ 18,927   $ (297 ) $ (241 ) $ 52,474  

   

The accompanying notes are an integral part of these consolidated financial statements.

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NORTHERN STATES FINANCIAL CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS

($000s)

Years ended December 31,
  2017   2016  

Cash flows from operating activities

             

Net income

  $ (6,381 ) $ 2,141  

Adjustments to reconcile net income to net cash from operating activities:

             

Depreciation

    618     541  

Gain on sales of securities available for sale

    0     (221 )

Gain on sales of office buildings and equipment

    (68 )   0  

Recovery of loan and lease losses

    0     (75 )

Write-down of other real estate owned

    3,303     668  

Gain/loss on sales of other real estate owned

    64     (200 )

Deferred tax expense (benefit)

    6,654     (601 )

Appreciation of bank owned life insurance

    (289 )   (293 )

Restricted stock awards expense

    420     840  

Net change in accrued interest receivable and other assets

    (329 )   266  

Net change in accrued interest payable and other liabilities

    (96 )   (330 )

Net cash provided from operating activities

    3,896     2,736  

Cash flows from investing activities

             

Investment in interest bearing deposits in financial institutions—maturities of 90 days or more

    (32,277 )   (35,172 )

Proceeds from maturities of interest bearing deposits in financial institutions—maturities of 90 days or more

    33,018     39,725  

Proceeds from maturities, calls and principal reductions of securities available for sale

    12,751     39,972  

Proceeds from maturities, calls and principal reductions of securities held to maturity

    282     568  

Proceeds from sales of securities available for sale

    0     14,794  

Purchases of securities available for sale

    0     (19,915 )

Purchases of securities held to maturity

    0     (3,000 )

Changes in federal home loan bank stock

    439     0  

Changes in loans made to customers

    (16,759 )   (53,720 )

Proceeds from sales of office buildings and equipment

    199     0  

Improvements to other real estate owned

    (28 )   0  

Property and equipment expenditures

    (667 )   (1,290 )

Purchases of bank owned life insurance

    0     (5,250 )

Proceeds from sales of other real estate owned

    4,858     3,067  

Net cash provided by (used in) investing activities

    1,816     (20,221 )

Cash flows from financing activities

             

Net increase (decrease) in:

             

Deposits

    7,836     (4,612 )

Securities sold under repurchase agreements and other short-term borrowings

    3,111     6,907  

Advances from borrowers for taxes and insurance

    995     (293 )

Net cash provided by financing activities

    11,942     2,002  

Net change in cash and cash equivalents

    17,654     (15,483 )

Cash and cash equivalents at beginning of period

    45,731     61,214  

Cash and cash equivalents at end of period

  $ 63,385   $ 45,731  

Supplemental disclosures

             

Cash paid for interest

  $ 351   $ 408  

Noncash transfer of loans to other real estate owned

    0     1,192  

   

The accompanying notes are an integral part of these consolidated financial statements.

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Northern States Financial Corporation

Notes to the Consolidated Financial Statements

Note 1—Summary of Significant Accounting Policies

        Principles of Consolidation:    The consolidated financial statements include the accounts of Northern States Financial Corporation (the "Company"), its wholly owned subsidiaries, NorStates Bank (the "Bank") and NorStates Bank's wholly owned subsidiary, Northern States Community Development Corporation (NSCDC). NSCDC was formed in 2002 and the Bank contributed a parcel of other real estate owned and cash to this entity. Significant intercompany transactions and balances are eliminated in consolidation.

        Nature of Operations:    The Company's and the Bank's revenues, operating income, and assets are from the banking industry. Loan customers are mainly located in Lake County, Illinois and surrounding areas of northeastern Illinois and southeastern Wisconsin and include a wide range of individuals, businesses, and other organizations. A major portion of