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First Midwest closing 19 locations in cost-cutting effort

Chicago-based First Midwest Bancorp Inc. plans to close 19 locations across the company's footprint, along with realignments that would result in about 7% net reduction in total workforce.

First Midwest expects a recurring annual benefit from cost reductions — which would make up 80% of the benefit — and revenue enhancements from service penetration. It anticipates a benefit of $22 million in 2019, rising to $27 million in 2021.

Pretax implementation expenses of $25 million are expected through 2020, with 40% attributable to branch closings, 20% related to employee severance and the rest from general restructuring and advisory services. Most of this expense, $22 million, is expected to be incurred in 2018, beginning in the second quarter.

One half of the workforce reduction is expected to result from natural attrition. The actions are to be significantly completed by the fourth quarter.

The company cited a larger number of clients relying on its online and mobile applications. Following the completion of the branch actions, First Midwest Bancorp will operate 110 locations.