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MB Financial, Inc. Reports Loan Growth, Strong Fee Income, and Fourth Quarter Net Income of $24.0 Million

CHICAGO--(BUSINESS WIRE)--Jan. 29, 2013-- MB Financial, Inc. (NASDAQ: MBFI), the holding company for MB Financial Bank, N.A. (“the Bank” or “MB Financial Bank”), announced today fourth quarter and annual results for 2012. The words “MB Financial,” “the Company,” “we,” “our” and “us” refer to MB Financial, Inc. and its consolidated subsidiaries, unless indicated otherwise.

Net income, net income available to common stockholders and fully diluted earnings per share increased in the three months and year ended December 31, 2012 compared to the three months ended September 30, 2012 and the year ended December 31, 2011 as follows (note that all linked quarter change percentages presented here and throughout this release are not annualized):

                 
4Q12 3Q12 Change 4Q11 2012 2011 Change
(dollars in thousands, except per share data)
Net income $ 24,012 $ 23,133 + 3.8 % $ 19,453 $ 90,374 $ 38,728 +133.4 %
Net income available to
common stockholders 24,012 23,133 + 3.8 % 16,847 87,105 28,314 +207.6 %
Fully diluted earnings per share 0.44 0.42 + 4.8 % 0.31 1.60 0.52 +207.7 %
 

“I am pleased with our strong finish to 2012. We experienced robust loan growth in the fourth quarter, primarily driven by new customer relationships, strong lease loan growth and seasonal demand. Furthermore, we are seeing good progress in all of our key fee initiatives as evidenced by growth in fee income both on a quarterly and annual basis. We remain committed to building a relationship driven company that produces superior returns on capital, supported by a diversified revenue stream, with high quality loans and significant fee businesses, both growing at attractive rates,” stated Mitchell Feiger, President and Chief Executive Officer of the Company.

Key items were as follows:

Robust Loan Growth, Mix Improvements Continue:

  • Our loan balances, excluding covered loans, increased $192.1 million (+3.7%) during the fourth quarter of 2012 and our loan mix continued to improve with growth in generally lower risk commercial and lease loans and declines in generally higher risk construction and commercial real estate loans as follows (dollars in thousands):
   
Change in Percent
Loan Balance Growth
Commercial related credits:  
Commercial loans $ 146,491 +13.6 %
Commercial loans collateralized by
assignment of lease payments (lease loans) 87,408 +7.2 %
Commercial real estate (8,429 ) -0.5 %
Construction real estate   (39,611 ) -26.4 %
Total commercial related credits   185,859   +4.4 %
Other loans:
Residential real estate 5,493 +1.8 %
Indirect vehicle 1,660 +0.8 %
Home equity (9,532 ) -3.0 %
Consumer loans   8,666   +10.2 %
Total other loans   6,287   +0.7 %
Gross loans excluding covered loans $ 192,146   +3.7 %
 
  • Over the last year, our commercial related loan balances increased modestly (+0.9%), and our loan mix improved. Commercial and lease loans increased by 8.9%, while commercial real estate and construction loans decreased by 8.1%.

Strong Core Fee Income Growth (+20.5%) During the Quarter:

  • Revenues from key fee initiatives increased 18.7% compared to the third quarter of 2012:
    • Leasing revenues increased 28.4% to $12.4 million,
    • Capital markets and international banking service fees increased 80.6% to $2.6 million, and
    • Commercial deposit and treasury management fees increased 4.0% to $6.1 million.
  • Annual revenues from key fee initiatives increased 21.0% compared to 2011:
    • Leasing revenues increased 35.1% to $36.4 million,
    • Capital markets and international banking service fees increased 192.6% to $5.5 million, and
    • Card revenues increased 33.2% to $9.4 million.
  • Our core fee income to total revenues ratio improved to 34.2% in the fourth quarter compared to 29.5% in the prior quarter and 26.2% a year ago.
  • Fee income growth exceeded the impact of margin compression. As a result, total revenue, as adjusted and on a fully tax equivalent basis, increased by $4.1 million (+3.7%) during the fourth quarter.

Margin Compression Negatively Impacted Net Interest Income:

  • Net interest margin compression of 10 basis points (on a fully tax equivalent basis) for the quarter negatively impacted net interest income (down $2.5 million and 3.2%).
  • The decline in net interest margin was due to a decline in covered loan yields, tightening credit spreads and high levels of prepayments on mortgage-backed securities, partially offset by a lower cost of funds.

Classified Assets Declined, Non-Performing Loans Increased, Recoveries Exceeded Charge-offs During the Quarter:

  • Classified assets, defined as potential problem loans, non-performing loans, other real estate owned (“OREO”) and repossessed assets (excluding credit-impaired loans and OREO that were acquired as part of our FDIC-assisted transactions) declined in the quarter. Non-performing loans were up $11.7 million, while potential problem loans declined $22.7 million.
         
Change from
3Q12 to
  12/31/2012   9/30/2012   4Q12   12/31/2011
(dollars in thousands)
Potential problem loans $ 111,553 $ 134,289 $ (22,736) $ 149,756
Non-performing loans 116,986 105,283 11,703 129,391
OREO 36,977 42,427 (5,450) 78,452
Repossessed assets 773 113 660 156
Total classified assets $ 266,289 $ 282,112 $ (15,823) $ 357,755
 
  • Credit costs remained very low in the quarter, aided by net recoveries.
         
Change from
3Q12 to
4Q12 3Q12 4Q12 4Q11
(dollars in thousands)
Credit costs:
Provision for credit losses $ 1,000 $ (13,000 ) $ 14,000 $ 8,000
Net loss recognized on OREO 1,626   3,938   (2,312 ) 5,478
Total credit costs $ 2,626   $ (9,062 ) $ 11,688   $ 13,478
 
Net (recoveries) charge-offs $ (2,353 ) $ (9,086 ) $ 6,733 $ 13,886
 

Significant Balance Sheet Improvement over the Past Year:

  • As discussed above, over the past year we have improved the risk/return profile of our loan portfolio by significantly reducing our classified loans and changing our loan mix.
  • Over the past year, we changed the mix of our investment portfolio by allocating a larger portion of the investment portfolio to municipal securities. This has helped mitigate the impact of high levels of mortgage-backed security prepayments in the current interest rate environment. Municipal securities were 39.8% of total investment securities at December 31, 2012 compared to 30.9% of total investment securities a year ago.
  • Our funding mix improved over the past twelve months, with low cost deposits increasing $438.5 million (+8.3%) primarily driven by noninterest bearing deposits increasing by $278.9 million (+14.8%). Customer certificates of deposit decreased by $400.2 million (-20.8%) over the same period. In addition, our wholesale funding balances decreased $291.0 million (-33.6%) from a year ago largely due to prepayments in the third quarter of 2012.
  • During 2012, we repurchased all $196 million of preferred stock and the related warrant issued as part of the Troubled Asset Relief Program (“TARP”) Capital Purchase Program.

Significant Improvement in Return on Assets and Return on Equity over the Past Year:

  • Our annualized return on average assets, annualized return on average common equity and annualized cash return on average tangible common equity improved compared to the third quarter of 2012 and fourth quarter of 2011:
                 
4Q12 3Q12 4Q11 2012 2011
 
Annualized return on average assets 1.01% 0.97% 0.78% 0.95% 0.39%
Annualized return on average common equity 7.55% 7.38% 5.66% 7.05% 2.43%
Annualized cash return on average tangible
common equity 11.47% 11.29% 9.09% 10.87% 4.23%
 

Celtic Leasing Corp. Transaction:

  • On December 28, 2012, MB Financial Bank acquired Celtic Leasing Corp. (“Celtic”), a privately held, mid-ticket equipment leasing company.
  • Celtic specializes in solutions for the health care, legal, technology, and manufacturing industries. In recent years Celtic’s lease originations have ranged from $75 to $100 million on an annual basis.
  • Given the timing of the Celtic transaction, the impact to lease financing revenues was insignificant in the quarter and year.
  • Initial cash consideration paid was $58.7 million. Celtic stockholders will receive additional purchase consideration based on the performance of leases outstanding as of the acquisition date as well as the performance of leases originated during the three-year period immediately following the acquisition date. As a result of the transaction, $36.3 million in goodwill was recorded.

Top Ten Workplaces in Chicago:

  • During the fourth quarter of 2012, our bank was for the second consecutive year named one of Chicago’s Top Workplaces by the Chicago Tribune.
  • We ranked among the top ten in the large employers category.

RESULTS OF OPERATIONS

Fourth Quarter Results

Net Interest Income

Net interest income on a fully tax equivalent basis decreased $2.5 million from the third quarter of 2012. The decrease from the third quarter of 2012 to the fourth quarter of 2012 was due primarily to a 10 basis point decline in our net interest margin to 3.57% on a fully tax equivalent basis, primarily as a result of a decline in covered loan yields (negatively impacted the margin by eight basis points), high mortgage-backed investment securities prepayments (negatively impacted the margin by six basis points) and tighter credit spreads, which was partially offset by a decline in our cost of funds.

Net interest income on a fully tax equivalent basis decreased $25.2 million during the year ended December 31, 2012 compared to the year ended December 31, 2011, primarily due to a $285.2 million decrease in average interest earning assets and a 17 basis point decline in our net interest margin on a fully tax equivalent basis. The decline in the margin was primarily due to lower covered loan yields (negatively impacted the margin by 12 basis points), and tighter credit spreads, partially offset by lower costs of funds.

See the supplemental net interest margin tables for further detail.

Fee Income (dollars in thousands):

                   
4Q12 3Q12 2Q12 1Q12 4Q11 2012   2011  
Core fee income:
Key fee initiatives:
Capital markets and international banking
service fees $

2,593

$

1,436

$

912

$

531

$ 762 $

5,472

$ 1,870
Commercial deposit and treasury management fees 6,095 5,860 5,784 5,897 6,113 23,636 23,559
Lease financing, net 12,419 9,671 7,334 6,958 7,801 36,382 26,939
Trust and asset management fees 4,623 4,428 4,535 4,404 4,166 17,990 17,324
Card fees 2,505   2,388   2,429   2,046   1,101   9,368   7,032  
Total key fee initiatives

28,235

23,783

20,994

19,836

19,943

92,848

76,724
 
Loan service fees

2,229

1,039

1,143

1,048

1,069

5,459

6,355
Consumer and other deposit service fees 3,655 3,786 3,534 3,453 3,917 14,428 15,375
Brokerage fees 1,088 1,185 1,264 1,255 1,577 4,792 5,884
Increase in cash surrender value of life insurance 893 890 870 917 944 3,570 4,377
Accretion of FDIC indemnification asset 154 204 222 475 683 1,055 4,838
Net gain on sale of loans 822 575 554 374 366 2,325 817
Other operating income 1,325   405   958   1,604   1,086   4,292   5,676  
Total core fee income 38,401   31,867   29,539   28,962   29,585   128,769   120,046  
 
Non-core fee income: (1)
Net gain (loss) on investment securities 311 281 (34 ) (3 ) 411 555 640
Net (loss) gain on sale of other assets (905 ) (12 ) (8 ) (17 ) (87 ) (942 ) 283
Net gain on sale of loans held for sale (A) - - - - - - 1,790
Net loss recognized on other real estate owned (B) (1,848 ) (4,151 ) (4,156 ) (4,348 ) (3,620 ) (14,503 ) (9,971 )
Net gain (loss) recognized on other real estate
owned related to FDIC transactions (B) 222 213 (1,285 ) (2,241 ) (1,858 ) (3,091 ) (3,642 )
Increase (decrease) in market value of assets held
in trust for deferred compensation (C) 104   355   (149 ) 501   20   811   (40 )
Total non-core fee income (2,116 ) (3,314 ) (5,632 ) (6,108 ) (5,134 ) (17,170 ) (10,940 )
 
Total fee income $ 36,285   $ 28,553   $ 23,907   $ 22,854   $ 24,451   $ 111,599   $ 109,106  
 
(1)   Letter denotes the corresponding line items where these non-core fee income items reside in the consolidated statements of income as follows: A – Net gain on sale of loans, B – Net loss recognized on other real estate owned, C – Other operating income.
 

Core fee income increased by $6.5 million (+20.5%) from the third quarter of 2012 to the fourth quarter of 2012, driven by revenue from our key fee initiatives (+18.7%).

  • Net lease financing income increased as a result of increase in equipment remarketing gains and fees from the sale of equipment maintenance contracts.
  • Capital markets and international banking service fees increased primarily due to an increase in merger and acquisition advisory and interest rate swap fees.
  • Loan service fees increased due to an increase in prepayment fees.
  • Other operating income increased due to higher income from low income housing partnerships.
  • Non-core fee income was primarily impacted by lower losses recognized on OREO, partially offset by higher losses on the sale of other assets as a result of the disposal of fixed assets.

Core fee income increased by $8.7 million (+7.3%) for the year ended December 31, 2012 compared to the year ended December 31, 2011, driven by revenue from our key fee initiatives (+21.0%).

  • Net lease financing income increased as a result of increase in equipment remarketing gain and fees from the sale of equipment maintenance contracts.
  • Capital markets and international banking service fees increased due to an increase in interest rate swap fees, merger and acquisition advisory fees, and international banking activities.
  • Card fee income increased primarily due to fees earned on prepaid and credit cards.

These annual core fee income increases were offset by the decreases in brokerage fees, consumer and other deposit service fees and accretion of FDIC indemnification asset.

  • Brokerage fees declined due to a decrease in third party brokerage revenues.
  • Consumer and other deposit service fees decreased as a result of lower NSF fees.
  • Accretion of FDIC indemnification asset decreased $3.8 million as expected. Accretion is recorded based on the FDIC indemnification asset balance, which has declined as we have received loss-share payments.
  • Non-core fee income was primarily impacted by higher losses recognized on OREO as well as higher losses on the sale of other assets as a result of the disposal of fixed assets.

Other Expense (dollars in thousands):

                 
4Q12 3Q12 2Q12 1Q12 4Q11 2012 2011  
Core other expense:
Salaries and employee benefits $ 42,934 $ 41,728 $ 40,295 $ 39,928 $ 39,826 $ 164,885 $ 153,898
Occupancy and equipment expense 8,774 8,274 9,188 9,570 8,498 35,806 35,467
Computer services and telecommunication expense 4,160 3,777 3,909 3,653 4,382 15,499 14,885
Advertising and marketing expense 2,335 1,936 1,839 2,073 1,831 8,183 7,038
Professional and legal expense 1,640 1,554 1,503 1,413 1,422 6,110 6,147
Other intangible amortization expense 1,251 1,251 1,251 1,257 1,410 5,010 5,665
Other real estate expense, net 449 874 424 1,243 1,464 2,990 4,294
Other operating expenses 8,027 7,976 8,574   7,693 9,986 32,270 40,685  
Total core other expense 69,570 67,370 66,983   66,830 68,819 270,753 268,079  
 
Non-core other expense: (1)
Branch impairment charges 1,432 758 - - 594 2,190 1,594
Prepayment fees on interest bearing liabilities - 12,682 - - - 12,682 -
Increase (decrease) in market value of assets held
in trust for deferred compensation (A) 104 355 (149 ) 501 20 811 (40 )
Total non-core other expense 1,536 13,795 (149 ) 501 614 15,683 1,554  
 
Total other expense $ 71,106 $ 81,165 $ 66,834   $ 67,331 $ 69,433 $ 286,436 $ 269,633  
 
(1)   Letters denote the corresponding line items where these non-core other expense items reside in the consolidated statements of income as follows: A – Salaries and employee benefits.
 

Core other expense increased by $2.2 million (+3.3%) from the third quarter of 2012 to the fourth quarter of 2012.

  • Salaries and employee benefits expense increased primarily due to an increase in incentives and commissions on higher lease revenues.
  • Non-core other expense decreased as we did not incur any prepayment fees in the fourth quarter of 2012, while in the third quarter of 2012 we incurred $12.7 million in prepayment fees, when we prepaid certain brokered certificates of deposits and an FHLB advance.

Core other expense increased by $2.7 million (+1.0%) from the year ended December 31, 2011 to the year ended December 31, 2012.

  • Salaries and employee benefits expense increased primarily due to annual salary increases, an increase in incentives, commissions on higher lease revenues, and higher health insurance claims.
  • Other operating expenses were down partially due to the decrease in FDIC insurance premiums as a result of a change in the assessment computation during the second quarter of 2012 and the impact of improved credit quality on the computation.
  • Other operating expenses were also favorably impacted in the twelve months ended December 31, 2012 by a decrease in the clawback liability related to our loss share agreements with the FDIC recorded during the period.
  • Other real estate expense decreased as a result of fewer properties in other real estate owned throughout 2012 compared to 2011.
  • Non-core other expense was impacted by the $12.7 million in prepayment fees on interest bearing liabilities discussed above.

LOAN PORTFOLIO

The following table sets forth the composition of the loan portfolio (excluding loans held for sale) as of the dates indicated (dollars in thousands):

           
12/31/2012 9/30/2012 6/30/2012 3/31/2012 12/31/2011
  % of   % of   % of   % of   % of
Amount   Total Amount   Total Amount   Total Amount   Total Amount   Total
Commercial related credits:
Commercial loans $ 1,220,472 21 % $ 1,073,981 19 % $ 1,079,436 19 % $ 1,040,340 18 % $ 1,113,123 19 %
Commercial loans collateralized by
assignment of lease payments (lease loans) 1,306,769 23 % 1,219,361 22 % 1,221,199 21 % 1,209,942 21 % 1,208,575 20 %
Commercial real estate 1,761,832 30 % 1,770,261 31 % 1,794,777 31 % 1,877,380 32 % 1,853,788 31 %
Construction real estate 110,261   2 % 149,872   3 % 150,665   3 % 128,040   2 % 183,789   3 %
Total commercial related credits 4,399,334   76 % 4,213,475   75 % 4,246,077   74 % 4,255,702   73 % 4,359,275   73 %
Other loans:
Residential real estate 314,359 5 % 308,866 5 % 313,137 5 % 309,644 5 % 316,787 5 %
Indirect vehicle 208,633 4 % 206,973 3 % 198,848 3 % 186,736 3 % 187,481 3 %
Home equity 305,186 5 % 314,718 6 % 323,234 6 % 327,450 6 % 336,043 6 %
Consumer loans 93,317   2 % 84,651   2 % 89,115   2 % 89,705   2 % 88,865   2 %
Total other loans 921,495   16 % 915,208   16 % 924,334   16 % 913,535   16 % 929,176   16 %
Gross loans excluding covered loans 5,320,829 92 % 5,128,683 91 % 5,170,411 90 % 5,169,237 89 % 5,288,451 89 %
Covered loans (1) 449,850   8 % 496,162   9 % 552,838   10 % 620,528   11 % 662,544   11 %
Total loans $ 5,770,679 100 % $ 5,624,845 100 % $ 5,723,249 100 % $ 5,789,765 100 % $ 5,950,995 100 %
 
(1)   Covered loans refer to loans we acquired in FDIC-assisted transactions that are subject to loss-sharing agreements with the FDIC.
 

Our loan portfolio mix improved over the past twelve months from the standpoint of lowering our real estate-related exposure, as commercial and lease loan balances increased while commercial real estate and construction loan balances decreased. Growth in the fourth quarter was primarily driven by new middle market customer relationships and strong lease loan originations as well as seasonal loan demand.

ASSET QUALITY

As discussed earlier, classified assets declined during the quarter and compared to a year ago. The increase in non-performing loans on a linked quarter basis was more than offset by the decline in potential problem loans and OREO.

The following table presents a summary of classified assets (excluding loans held for sale, credit-impaired loans and OREO that were acquired as part of our FDIC-assisted transactions) as of the dates indicated (dollars in thousands):

         
12/31/2012 9/30/2012 6/30/2012 3/31/2012 12/31/2011
Non-performing loans:
Non-accrual loans (1) $ 115,387 $ 104,813 $ 113,077 $ 124,011 $ 129,309
Loans 90 days or more past due, still accruing interest 1,599   470   453   679   82  
Total non-performing loans 116,986   105,283   113,530   124,690   129,391  
 
OREO 36,977 42,427 49,690 63,077 78,452
Repossessed assets 773   113   60   81   156  
Total non-performing assets 154,736   147,823   163,280   187,848   207,999  
 
Potential problem loans 111,553   134,289   141,066   159,440   149,756  
Total classified assets $ 266,289   $ 282,112   $ 304,346   $ 347,288   $ 357,755  
 
Total allowance for loan losses $ 124,204 $ 121,182 $ 121,756 $ 125,431 $ 126,798
 
Accruing restructured loans (2) $ 21,256 $ 17,929 $ 16,536 $ 24,145 $ 37,996
 
Total non-performing loans to total loans 2.03 % 1.87 % 1.98 % 2.15 % 2.17 %
Total non-performing assets to total assets 1.62 % 1.56 % 1.72 % 1.94 % 2.12 %
Allowance for loan losses to non-performing loans 106.17 % 115.10 % 107.25 % 100.59 % 98.00 %
 
(1)   Includes $25.4 million, $27.1 million, $32.7 million, $34.7 million and $42.5 million of restructured loans on non-accrual status at December 31, 2012, September 30, 2012, June 30, 2012, March 31, 2012 and December 31, 2011, respectively.
(2) Accruing restructured loans consists primarily of residential real estate and home equity loans that have been modified and are performing in accordance with those modified terms as of the dates indicated.
 

The following table presents data related to non-performing loans by category (excluding loans held for sale and credit-impaired loans that were acquired as part of our FDIC-assisted transactions) as of the dates indicated (dollars in thousands):

           
12/31/2012 9/30/2012 6/30/2012 3/31/2012 12/31/2011
 
Commercial and lease $ 25,517 $ 22,648 $ 24,402 $ 34,471 $ 36,995
Commercial real estate 59,508 55,387 62,512 70,939 76,551
Construction real estate 1,028 1,225 1,470 1,553 1,145
Consumer related 30,933 26,023 25,146 17,727 14,700
Total non-performing loans $ 116,986 $ 105,283 $ 113,530 $ 124,690 $ 129,391
 

Consumer related non-performing loans increased compared to September 30, 2012 as a result of three residential real estate loans being downgraded to non-accrual status during the fourth quarter of 2012. Consumer related non-performing loans increased compared to a year ago primarily due to the increase in home equity and residential non-performing loans.

We define potential problem loans as performing loans rated substandard that do not meet the definition of a non-performing loan (See “Asset Quality” section above for non-performing loans). Potential problem loans carry a higher probability of default and require additional attention by management.

The following table presents data related to potential problem loans by category (excluding loans held for sale and credit-impaired loans that were acquired as part of our FDIC-assisted transactions) as of the dates indicated (dollars in thousands):

           
12/31/2012 9/30/2012 6/30/2012 3/31/2012 12/31/2011
 
Commercial and lease $ 33,600 $ 48,933 $ 46,532 $ 49,197 $ 39,193
Commercial real estate 66,995 73,941 82,596 98,834 99,588
Construction real estate 10,958 11,415 11,938 11,409 10,375
Consumer related - - - - 600
Total potential problem loans $ 111,553 $ 134,289 $ 141,066 $ 159,440 $ 149,756
 

The following table represents a summary of OREO (excluding OREO related to assets acquired in FDIC-assisted transactions) as of the dates indicated (dollars in thousands):

           
12/31/2012 9/30/2012 6/30/2012 3/31/2012 12/31/2011
 
Balance at the beginning of quarter $ 42,427 $ 49,690 $ 63,077 $ 78,452 $ 87,469
Transfers in at fair value less estimated costs to sell 1,811 63 910 1,751 3,657
Capitalized OREO costs 505 978 967 359 552
Fair value adjustments (1,982 ) (4,648 ) (4,507 ) (4,764 ) (3,733 )
Net gains on sales of OREO 134 497 351 416 113
Cash received upon disposition (5,918 ) (4,153 ) (11,108 ) (13,137 ) (9,606 )
Balance at the end of quarter $ 36,977   $ 42,427   $ 49,690   $ 63,077   $ 78,452  
 

Below is a reconciliation of the activity in our allowance for credit and loan losses for the periods indicated (dollars in thousands):

                 
4Q12 3Q12 2Q12 1Q12 4Q11 2012 2011
 
Allowance for credit losses, balance at the beginning of period $ 124,926 $ 128,840 $ 133,255 $ 135,975 $ 141,861 $ 135,975 $ 192,217
Provision for credit losses 1,000 (13,000 ) - 3,100 8,000 (8,900 ) 120,750
Charge-offs:
Commercial loans 343 75 1,451 539 2,932 2,408 17,571

Commercial loans collateralized by assignment of lease payments (lease loans)

1 - 1,720 - 1,373 1,721 1,466
Commercial real estate loans 2,965 2,994 2,415 3,003 3,793 11,377 96,633
Construction real estate 56 71 444 3,436 6,989 4,007 52,917
Residential real estate 1,068 474 1,108 294 860 2,944 12,643
Indirect vehicle 623 433 488 715 954 2,259 2,836
Home equity 1,394 1,209 876 1,072 2,061 4,551 11,066
Consumer loans 485   332   274   258   285   1,349   1,648  
Total charge-offs 6,935   5,588   8,776   9,317   19,247   30,616   196,780  
Recoveries:
Commercial loans 745 306 386 2,038 634 3,475 5,370

Commercial loans collateralized by assignment of lease payments (lease loans)

6,260 111 93 256 1 6,720 225
Commercial real estate loans 871 12,893 3,061 162 747 16,987 3,332
Construction real estate 561 752 141 565 3,519 2,019 8,590
Residential real estate 271 8 188 34 9 501 49
Indirect vehicle 261 224 300 311 378 1,096 1,399
Home equity 248 303 100 20 6 671 224
Consumer loans 71   77   92   111   67   351   599  
Total recoveries 9,288   14,674   4,361   3,497   5,361   31,820   19,788  
 
Total net (recoveries) charge-offs (2,353 ) (9,086 ) 4,415   5,820   13,886   (1,204 ) 176,992  
 
Allowance for credit losses 128,279 124,926 128,840 133,255 135,975 128,279 135,975
 
Allowance for unfunded credit commitments (4,075 ) (3,744 ) (7,084 ) (7,824 ) (9,177 ) (4,075 ) (9,177 )
 
Allowance for loan losses $ 124,204   $ 121,182   $ 121,756   $ 125,431   $ 126,798   $ 124,204   $ 126,798  
 
Total loans, excluding loans held for sale $ 5,770,679 $ 5,624,845 $ 5,723,249 $ 5,789,765 $ 5,950,995 $ 5,770,679 $ 5,950,995
Average loans, excluding loans held for sale $ 5,604,837 $ 5,630,232 $ 5,712,630 $ 5,802,037 $ 5,818,425 $ 5,687,052 $ 6,097,291
 
Ratio of allowance for loan losses to total loans, excluding loans held for sale 2.15 % 2.15 % 2.13 % 2.17 % 2.13 % 2.15 % 2.13 %
 
Net loan (recoveries) charge-offs to average loans, excluding loans held for sale (annualized) (0.17 )% (0.64 )% 0.31 % 0.40 % 0.95 % (0.02 )% 2.90 %
 

Our allowance for loan losses is comprised of three elements: a general loss reserve, a specific reserve for impaired loans and a reserve for smaller-balance homogenous loans.

The following table presents these three elements of our allowance for loan losses (dollars in thousands):

           
12/31/2012 9/30/2012 6/30/2012 3/31/2012 12/31/2011
 
General loss reserve $ 91,745 $ 95,586 $ 93,904 $ 98,673 $ 102,196
Specific reserve 13,691 11,300 13,674 13,734 10,804
Smaller-balance homogenous loans reserve 18,768 14,296 14,178 13,024 13,798
Total allowance for loan losses $ 124,204 $ 121,182 $ 121,756 $ 125,431 $ 126,798
 

Although management believes that adequate general, specific and smaller-balance homogenous loan loss allowances have been established, actual losses are dependent upon future events and, as such, further additions to the level of general, specific and smaller-balance homogenous loan loss allowances may become necessary.

INVESTMENT SECURITIES

The following table sets forth, by type, the fair value and amortized cost of our investment securities, excluding FHLB and FRB stock, as well as the unrealized gain of our investment securities available for sale (dollars in thousands):

           
12/31/2012 9/30/2012 6/30/2012 3/31/2012 12/31/2011
 
Securities available for sale:
Fair value
Government sponsored agencies and enterprises $ 41,315 $ 42,187 $ 42,175 $ 42,070 $ 42,401
States and political subdivisions 725,019 668,966 629,173 581,720 535,660
Mortgage-backed securities 993,328 1,075,962 1,035,473 1,193,248 1,334,491
Corporate bonds 96,674 16,626 5,569 5,686 5,899
Equity securities 11,835   11,231 11,081 10,887 10,846
Total fair value $ 1,868,171   $ 1,814,972 $ 1,723,471 $ 1,833,611 $ 1,929,297
 
Amortized cost
Government sponsored agencies and enterprises $ 38,605 $ 39,233 $ 39,366 $ 39,503 $ 39,640
States and political subdivisions 679,991 620,489 589,654 547,262 500,979
Mortgage-backed securities 981,513 1,060,665 1,014,186 1,168,340 1,308,020
Corporate bonds 97,014 16,617 5,569 5,686 5,899
Equity securities 11,398   10,644 10,584 10,520 10,457
Total amortized cost $ 1,808,521   $ 1,747,648 $ 1,659,359 $ 1,771,311 $ 1,864,995
 
Unrealized gain
Government sponsored agencies and enterprises $ 2,710 $ 2,954 $ 2,809 $ 2,567 $ 2,761
States and political subdivisions 45,028 48,477 39,519 34,458 34,681
Mortgage-backed securities 11,815 15,297 21,287 24,908 26,471
Corporate bonds (340 ) 9 - - -
Equity securities 437   587 497 367 389
Total unrealized gain $ 59,650   $ 67,324 $ 64,112 $ 62,300 $ 64,302
 
Securities held to maturity, at cost:
States and political subdivisions $ 237,563 $ 238,211 $ 238,869 $ 239,526 $ 240,183
Mortgage-backed securities 255,858   257,640 258,931 259,241 259,100
Total amortized cost $ 493,421   $ 495,851 $ 497,800 $ 498,767 $ 499,283
 

We do not have any meaningful direct or indirect holdings of subprime residential mortgage loans, home equity lines of credit, or any Fannie Mae or Freddie Mac preferred or common equity securities in our investment securities portfolio. Additionally, more than 99% of our mortgage-backed securities are agency guaranteed.

DEPOSIT MIX

The following table shows the composition of deposits as of the dates indicated (dollars in thousands):

           
12/31/2012 9/30/2012 6/30/2012 3/31/2012 12/31/2011
  % of   % of   % of   % of   % of
Amount   Total Amount   Total Amount   Total Amount   Total Amount   Total
Low cost deposits:
Noninterest bearing deposits $ 2,164,547 29 % $ 2,011,542 27 % $ 1,946,468 26 % $ 1,874,028 25 % $ 1,885,694 25 %
Money market and
NOW accounts 2,747,273 36 % 2,682,608 36 % 2,564,493 34 % 2,702,636 35 % 2,645,334 34 %
Savings accounts 811,333   11 % 797,741   10 % 790,350   11 % 786,357   10 % 753,610   10 %
Total low cost deposits 5,723,153   76 % 5,491,891   73 % 5,301,311   71 % 5,363,021   70 % 5,284,638   69 %
 
Certificates of deposit:
Certificates of deposit 1,525,366 20 % 1,632,370 22 % 1,718,266 23 % 1,820,266 24 % 1,925,608 25 %
Brokered deposit accounts 294,178   4 % 355,086   5 % 451,132   6 % 451,415   6 % 437,361   6 %
Total certificates of deposit 1,819,544   24 % 1,987,456   27 % 2,169,398   29 % 2,271,681   30 % 2,362,969   31 %
 
Total deposits $ 7,542,697   100 % $ 7,479,347   100 % $ 7,470,709   100 % $ 7,634,702   100 % $ 7,647,607   100 %
 

Our deposit mix improved over the past twelve months as low cost deposits increased by 8.3% and comprised 76% of total deposits at December 31, 2012 compared to 69% at December 31, 2011 driven by positive noninterest bearing deposit inflows.

CAPITAL

Tangible book value per common share increased to $15.21 at December 31, 2012 compared to $14.49 a year ago primarily due to retained net income. Our regulatory capital ratios remain strong and MB Financial Bank, N.A. was categorized as “well capitalized” at December 31, 2012 under the Prompt Corrective Action (“PCA”) provisions.

In June 2012, the federal banking agencies issued notices of proposed rulemaking (“NPRs”) on regulatory capital enhancements, which would implement the Basel III capital standards and address certain requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). The NPRs would revise banking regulatory capital requirements and the risk-weighted asset rules. The NPRs would increase the minimum levels of required capital, narrow the definition of capital, add a new regulatory capital component (common equity Tier 1), increase the required capital for certain categories of assets and expand the number of risk-weighted categories, including higher-risk residential mortgages and higher-risk construction real estate loans. These rules were proposed to go into effect on January 1, 2013 with all of the requirements being phased in by January 1, 2019; however, the final regulations have not yet been adopted and it is uncertain as to when the final regulations will be adopted or become effective or to what extent the final regulations will differ from the proposed regulations. If the fully phased-in capital requirements within the NPRs were adopted as proposed and were effective as of December 31, 2012, the Company has estimated that it would be categorized as “well capitalized” under the PCA provisions with ratios significantly above the “well capitalized” threshold.

FORWARD-LOOKING STATEMENTS

When used in this press release and in reports filed with or furnished to the Securities and Exchange Commission, in other press releases or other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases “believe,” “will,” “should,” “will likely result,” “are expected to,” “will continue” “is anticipated,” “estimate,” “project,” “plans,” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date made. These statements may relate to our future financial performance, strategic plans or objectives, revenues or earnings projections, or other financial items. By their nature, these statements are subject to numerous uncertainties that could cause actual results to differ materially from those anticipated in the statements.

Important factors that could cause actual results to differ materially from the results anticipated or projected include, but are not limited to, the following: (1) expected revenues, cost savings, synergies and other benefits from our merger and acquisition activities might not be realized within the anticipated time frames or at all, and costs or difficulties relating to integration matters, including but not limited to customer and employee retention, might be greater than expected; (2) the possibility that the expected benefits of the FDIC-assisted transactions we previously completed will not be realized; (3) the credit risks of lending activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses, which could necessitate additional provisions for loan losses, resulting both from loans we originate and loans we acquire from other financial institutions; (4) results of examinations by the Office of Comptroller of Currency and other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our allowance for loan losses or write-down assets; (5) competitive pressures among depository institutions; (6) interest rate movements and their impact on customer behavior and net interest margin; (7) the impact of repricing and competitors’ pricing initiatives on loan and deposit products; (8) fluctuations in real estate values; (9) the ability to adapt successfully to technological changes to meet customers’ needs and developments in the market place; (10) our ability to realize the residual values of our direct finance, leveraged, and operating leases; (11) our ability to access cost-effective funding; (12) changes in financial markets; (13) changes in economic conditions in general and in the Chicago metropolitan area in particular; (14) the costs, effects and outcomes of litigation; (15) new legislation or regulatory changes, including but not limited to the Dodd-Frank Act and regulations adopted thereunder, any changes in capital requirements pursuant to the Dodd-Frank Act and the implementation of the Basel III capital standards, other governmental initiatives affecting the financial services industry and changes in federal and/or state tax laws or interpretations thereof by taxing authorities; (16) changes in accounting principles, policies or guidelines; (17) our future acquisitions of other depository institutions or lines of business; and (18) future goodwill impairment due to changes in our business, changes in market conditions, or other factors.

We do not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date on which the forward-looking statement is made.

TABLES TO FOLLOW

 
MB FINANCIAL, INC. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited)
As of the dates indicated
(Dollars in thousands)
           
12/31/2012 9/30/2012 6/30/2012 3/31/2012 12/31/2011
ASSETS
Cash and due from banks $ 176,010 $ 129,326 $ 132,737 $ 128,411 $ 144,228
Interest earning deposits with banks 111,533   327,301   304,075   272,553   100,337  
Total cash and cash equivalents 287,543 456,627 436,812 400,964 244,565
Investment securities:
Securities available for sale, at fair value 1,868,171 1,814,972 1,723,471 1,833,611 1,929,297
Securities held to maturity, at amortized cost 493,421 495,851 497,800 498,767 499,283
Non-marketable securities - FHLB and FRB Stock 55,385   57,653   61,462   65,541   80,832  
Total investment securities 2,416,977 2,368,476 2,282,733 2,397,919 2,509,412
Loans held for sale 7,492 7,221 2,290 3,364 4,727
Loans:
Total loans, excluding covered loans 5,320,829 5,128,683 5,170,411 5,169,237 5,288,451
Covered loans 449,850   496,162   552,838   620,528   662,544  
Total loans 5,770,679 5,624,845 5,723,249 5,789,765 5,950,995
Less: Allowance for loan losses 124,204   121,182   121,756   125,431   126,798  
Net loans 5,646,475 5,503,663 5,601,493 5,664,334 5,824,197
Lease investments, net 129,823 113,180 111,122 124,748 135,490
Premises and equipment, net 221,533 214,301 214,935 212,589 210,705
Cash surrender value of life insurance 128,879 127,985 127,096 126,226 125,309
Goodwill 423,369 387,069 387,069 387,069 387,069
Other intangibles 29,512 25,735 26,986 28,237 29,494
Other real estate owned, net 36,977 42,427 49,690 63,077 78,452
Other real estate owned related to FDIC transactions 22,478 32,607 43,807 53,703 60,363
FDIC indemnification asset 39,345 36,311 56,637 72,161 80,830
Other assets 185,151   147,943   148,896   137,209   142,459  
Total assets $ 9,575,554   $ 9,463,545   $ 9,489,566   $ 9,671,600   $ 9,833,072  
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits:
Noninterest bearing $ 2,164,547 $ 2,011,542 $ 1,946,468 $ 1,874,028 $ 1,885,694
Interest bearing 5,378,150   5,467,805   5,524,241   5,760,674   5,761,913  
Total deposits 7,542,697 7,479,347 7,470,709 7,634,702 7,647,607
Short-term borrowings 220,602 289,613 261,729 269,691 219,954
Long-term borrowings 116,050 118,798 221,100 256,456 266,264
Junior subordinated notes issued to capital trusts 152,065 152,065 158,521 158,530 158,538
Accrued expenses and other liabilities 268,370   162,892   139,756   136,791   147,682  
Total liabilities 8,299,784   8,202,715   8,251,815   8,456,170   8,440,045  
Stockholders' Equity
Preferred stock - - - - 194,719
Common stock 550 550 549 549 548
Additional paid-in capital 732,771 731,679 732,297 732,613 731,248
Retained earnings 507,933 489,426 466,812 445,233 427,956
Accumulated other comprehensive income 36,326 40,985 39,035 37,935 39,150
Treasury stock (3,293 ) (3,304 ) (3,353 ) (3,326 ) (3,044 )

Controlling interest stockholders' equity

1,274,287 1,259,336 1,235,340 1,213,004 1,390,577
Noncontrolling interest 1,483   1,494   2,411   2,426   2,450  
Total stockholders' equity 1,275,770   1,260,830   1,237,751   1,215,430   1,393,027  
Total liabilities and stockholders' equity $ 9,575,554   $ 9,463,545   $ 9,489,566   $ 9,671,600   $ 9,833,072  
 
 
MB FINANCIAL, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data) (Unaudited)
                     
 
4Q12 3Q12 2Q12 1Q12 4Q11 2012 2011
Interest income:
Loans $ 63,328 $ 67,482 $ 69,250 $ 71,648 $ 75,466 $ 271,708 $ 324,793
Investment securities:
Taxable 6,371 7,287 8,882 10,884 11,608 33,424 41,349
Nontaxable 7,687 7,582 7,303 6,739 6,178 29,311 17,265
Other interest earning accounts   228     312     158     169     181     867     1,153  
Total interest income   77,614     82,663     85,593     89,440     93,433     335,310     384,560  
Interest expense:
Deposits 6,066 7,374 8,058 8,760 9,569 30,258 44,881
Short-term borrowings 294 342 362 206 189 1,204 849
Long-term borrowings and junior subordinated notes   1,738     2,872     3,069     3,381     3,430     11,060     13,557  
Total interest expense   8,098     10,588     11,489     12,347     13,188     42,522     59,287  
Net interest income 69,516 72,075 74,104 77,093 80,245 292,788 325,273
Provision for credit losses   1,000     (13,000 )   -     3,100     8,000     (8,900 )   120,750  
Net interest income after
provision for credit losses   68,516     85,075     74,104     73,993     72,245     301,688     204,523  
Fee income:

Capital markets and international banking service fees

2,593

1,436

912

531

762

5,472

1,870
Commercial deposit and treasury management fees 6,095 5,860 5,784 5,897 6,113 23,636 23,559
Lease financing, net 12,419 9,671 7,334 6,958 7,801 36,382 26,939
Trust and asset management fees 4,623 4,428 4,535 4,404 4,166 17,990 17,324
Card fees 2,505 2,388 2,429 2,046 1,101 9,368 7,032
Loan service fees

2,229

1,039

1,143

1,048

1,069

5,459

6,355
Consumer and other deposit service fees 3,655 3,786 3,534 3,453 3,917 14,428 15,375
Brokerage fees 1,088 1,185 1,264 1,255 1,577 4,792 5,884
Net gain (loss) on investment securities 311 281 (34 ) (3 ) 411 555 640
Increase in cash surrender value of life insurance 893 890 870 917 944 3,570 4,377
Net (loss) gain on sale of assets (905 ) (12 ) (8 ) (17 ) (87 ) (942 ) 283
Accretion of FDIC indemnification asset 154 204 222 475 683 1,055 4,838
Net loss recognized on other real estate owned (1,626 ) (3,938 ) (5,441 ) (6,589 ) (5,478 ) (17,594 ) (13,613 )
Net gain on sale of loans 822 575 554 374 366 2,325 2,607
Other operating income   1,429     760     809     2,105     1,106     5,103     5,636  
Total fee income   36,285     28,553     23,907     22,854     24,451     111,599     109,106  
Other expenses:
Salaries and employee benefits 43,038 42,083 40,146 40,429 39,846 165,696 153,858
Occupancy and equipment expense 8,774 8,274 9,188 9,570 8,498 35,806 35,467
Computer services and telecommunication expense 4,160 3,777 3,909 3,653 4,382 15,499 14,885
Advertising and marketing expense 2,335 1,936 1,839 2,073 1,831 8,183 7,038
Professional and legal expense 1,640 1,554 1,503 1,413 1,422 6,110 6,147
Other intangible amortization expense 1,251 1,251 1,251 1,257 1,410 5,010 5,665
Branch impairment charges 1,432 758 - - 594 2,190 1,594
Other real estate expense, net 449 874 424 1,243 1,464 2,990 4,294
Prepayment fees on interest bearing liabilities - 12,682 - - - 12,682 -
Other operating expenses   8,027     7,976     8,574     7,693     9,986     32,270     40,685  
Total other expense   71,106     81,165     66,834     67,331     69,433     286,436     269,633  
Income before income taxes 33,695 32,463 31,177 29,516 27,263 126,851 43,996
Income tax expense   9,683     9,330     9,034     8,430     7,810     36,477     5,268  
Net income 24,012 23,133 22,143 21,086 19,453 90,374 38,728
Dividends and discount accretion on preferred shares   -     -     -     3,269     2,606     3,269     10,414  
Net income available to
common stockholders $ 24,012   $ 23,133   $ 22,143   $ 17,817   $ 16,847   $ 87,105   $ 28,314  
 
               
4Q12 3Q12 2Q12 1Q12 4Q11 2012 2011
Common share data:
Basic earnings allocated to common stock per common share $ 0.44 $ 0.43 $ 0.41 $ 0.39 $ 0.36 $ 1.67 $ 0.71

Impact of preferred stock dividends on basic earnings per common share

- - - (0.06 ) (0.05 ) (0.06 ) (0.19 )
Basic earnings per common share 0.44 0.43 0.41 0.33 0.31 1.61 0.52
 
Diluted earnings allocated to common stock per common share 0.44 0.42 0.41 0.39 0.36 1.66 0.71

Impact of preferred stock dividends on diluted earnings per common share

- - - (0.06 ) (0.05 ) (0.06 ) (0.19 )
Diluted earnings per common share 0.44 0.42 0.41 0.33 0.31 1.60 0.52
 

Weighted average common shares outstanding for basic earnings per common share

54,401,504 54,346,827 54,174,717 54,155,856 54,140,646 54,270,297 54,057,158
 

Weighted average common shares outstanding for diluted earnings per common share

54,597,737 54,556,517 54,448,709 54,411,916 54,360,178 54,505,976 54,337,280
 
             
Selected Financial Data:
4Q12 3Q12 2Q12 1Q12 4Q11 2012 2011
Performance Ratios:
Annualized return on average assets 1.01 % 0.97 % 0.94 % 0.87 % 0.78 % 0.95 % 0.39 %
Annualized return on average common equity 7.55 7.38 7.28 5.94 5.66 7.05 2.43
Annualized cash return on average tangible common equity(1) 11.47 11.29 11.28 9.36 9.09 10.87 4.23
Net interest rate spread 3.41 3.48 3.65 3.67 3.71 3.55 3.71
Cost of funds(2) 0.40 0.52 0.57 0.60 0.63 0.52 0.70
Efficiency ratio(3) 61.16 61.43 61.36 60.04 59.94 60.99 58.17
Annualized net other expense to average assets(4) 1.29 1.46 1.57 1.54 1.56 1.47 1.46
Core fee income to revenues (5) 34.18 29.49 27.49 26.46 26.21 29.44 26.56
Net interest margin 3.31 3.42 3.59 3.64 3.71 3.49 3.75
Tax equivalent effect 0.26 0.25 0.24 0.23 0.20 0.24 0.15
Net interest margin - fully tax equivalent basis(6) 3.57 3.67 3.83 3.87 3.91 3.73 3.90
Asset Quality Ratios:
Non-performing loans(7) to total loans 2.03 % 1.87 % 1.98 % 2.15 % 2.17 % 2.03 % 2.17 %
Non-performing assets(7) to total assets 1.62 1.56 1.72 1.94 2.12 1.62 2.12
Allowance for loan losses to non-performing loans(7) 106.17 115.10 107.25 100.59 98.00 106.17 98.00
Allowance for loan losses to total loans 2.15 2.15 2.13 2.17 2.13 2.15 2.13
Net loan (recoveries) charge-offs to average loans (annualized) (0.17 ) (0.64 ) 0.31 0.40 0.95 (0.02 ) 2.90
Capital Ratios:
Tangible equity to tangible assets(8) 9.12 % 9.46 % 9.17 % 8.74 % 10.47 % 9.12 % 10.47 %
Tangible common equity to risk weighted assets(9) 12.96 14.16 13.67 13.17 12.48 12.96 12.48
Tangible common equity to tangible assets(10) 9.12 9.46 9.17 8.74 8.40 9.12 8.40
Book value per common share(11) $ 23.29 $ 23.01 $ 22.64 $ 22.23 $ 21.92 $ 23.29 $ 21.92

Less: goodwill and other intangible assets, net of benefit, per common share

8.08   7.37   7.40 7.41 7.43 8.08   7.43
Tangible book value per common share(12) $ 15.21 $ 15.64 $ 15.24 $ 14.81 $ 14.49 $ 15.21 $ 14.49
 
Total capital (to risk-weighted assets) 16.49 % 17.91 % 17.53 % 17.10 % 19.39 % 16.49 % 19.39 %
Tier 1 capital (to risk-weighted assets) 14.61 15.83 15.45 15.02 17.34 14.61 17.34
Tier 1 capital (to average assets) 10.50 10.60 10.46 9.99 11.73 10.50 11.73
Tier 1 common capital (to risk-weighted assets) 12.31 13.39 12.93 12.54 11.86 12.31 11.86
 
(1)   Net cash flow available to common stockholders (net income available to common stockholders, plus other intangibles amortization expense, net of tax benefit) divided by average tangible common equity (average common equity less average goodwill and average other intangibles, net of tax benefit).
(2) Equals total interest expense divided by the sum of average interest bearing liabilities and noninterest bearing deposits.
(3) Equals total other expense excluding non-core items divided by the sum of net interest income on a fully tax equivalent basis, total fee income less non-core items, and tax equivalent adjustment on the increase in cash surrender value of life insurance.
(4) Equals total other expense excluding non-core items less total fee income excluding non-core items, and including tax equivalent adjustment on the increase in cash surrender value of life insurance divided by average assets.
(5) Equals total fee income excluding non-core items and tax equivalent adjustment on the increase in cash surrender value of life insurance divided by the sum of net interest income on a fully tax equivalent basis, total fee income less non-core items, and tax equivalent adjustment on the increase in cash surrender value of life insurance.
(6) Represents net interest income, on a fully tax equivalent basis assuming a 35% tax rate, as a percentage of average interest earning assets.
(7) Non-performing loans excludes purchased credit-impaired loans and loans held for sale. Non-performing assets excludes purchased credit-impaired loans, loans held for sale, and other real estate owned related to FDIC transactions.
(8) Equals total ending stockholders’ equity less goodwill and other intangibles, net of tax benefit, divided by total assets less goodwill and other intangibles, net of tax benefit.
(9) Equals total ending common stockholders’ equity less goodwill and other intangibles, net of tax benefit, divided by total risk-weighted assets.
(10) Equals total ending common stockholders’ equity less goodwill and other intangibles, net of tax benefit, divided by total assets less goodwill and other intangibles, net of tax benefit.
(11) Equals total ending common stockholders’ equity divided by common shares outstanding.
(12) Equals total ending common stockholders’ equity less goodwill and other intangibles, net of tax benefit, divided by common shares outstanding.
 

NON-GAAP FINANCIAL INFORMATION

This press release contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (GAAP). These measures include core fee income, core fee income to revenues (with non-core items excluded from both core fee income and revenues), core other expense, non-core fee income and non-core other expense, net interest income on a fully tax equivalent basis, net interest margin on a fully tax equivalent basis, efficiency ratio and the ratio of annualized net other expense to average assets with net gains and losses on investment securities, net gains and losses on sale of other assets, net losses on other real estate owned, net gain on sale of loans held for sale and increase (decrease) in market value of assets held in trust for deferred compensation excluded from the non-interest income components of these ratios, prepayment fees on interest bearing liabilities, impairment charges and increase (decrease) in market value of assets held in trust for deferred compensation excluded from the other expense components of these ratios, with tax equivalent adjustment for tax-exempt interest income and increase in cash surrender value of life insurance, as applicable; ratios of tangible equity to tangible assets, tangible common equity to risk-weighted assets, tangible common equity to tangible assets and Tier 1 common capital to risk-weighted assets; tangible book value per common share; and annualized cash return on average tangible common equity. Our management uses these non-GAAP measures, together with the related GAAP measures, in its analysis of our performance and in making business decisions. Management also uses these measures for peer comparisons.

Management believes that core and non-core fee income and other expense are useful in assessing our core operating performance and in understanding the primary drivers of our fee income and other expense when comparing periods.

The tax equivalent adjustment to net interest income, net interest margin, tax-exempt interest income and increase in cash surrender value of life insurance recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 35% tax rate. Management believes that it is a standard practice in the banking industry to present net interest income and net interest margin on a fully tax equivalent basis, and accordingly believes that providing these measures may be useful for peer comparison purposes. For the same reasons, management believes the tax equivalent adjustments to tax-exempt interest income and increase in cash surrender value of life insurance are useful.

Management also believes that by excluding net gains and losses on investment securities, net gains and losses on sale of other assets, net losses on other real estate owned, net gain on sale of loans held for sale and increase (decrease) in market value of assets held in trust for deferred compensation from the non-interest income components, and excluding prepayment fees on interest bearing liabilities, impairment changes and increase (decrease) in market value of assets held in trust for deferred compensation from the other expense components, of the efficiency ratio and the ratio of annualized net other expense to average assets, these ratios better reflect our core operating performance, as the excluded items do not pertain to our core business operations and their exclusion makes these ratios more meaningful when comparing our operating results from period to period.

In addition, management believes that presenting the ratio of Tier 1 common equity to risk-weighted assets is useful for assessing our capital strength and for peer comparison purposes. The other measures exclude the acquisition-related goodwill and other intangible assets, net of tax benefit, in determining tangible assets, tangible equity, tangible common equity and average tangible common equity and exclude other intangible amortization expense, net of tax benefit, in determining net cash flow available to common stockholders. Management believes the presentation of these other financial measures excluding the impact of such items provides useful supplemental information that is helpful in understanding our financial results, as they provide a method to assess management’s success in utilizing our tangible capital as well as our capital strength. Management also believes that providing measures that exclude balances of acquisition-related goodwill and other intangible assets, which are subjective components of valuation, facilitates the comparison of our performance with the performance of our peers. In addition, management believes that these are standard financial measures used in the banking industry to evaluate performance.

The non-GAAP disclosures contained herein should not be viewed as substitutes for the results determined to be in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

A reconciliation of net interest margin on a fully tax equivalent basis to net interest margin is contained in the tables under “Net Interest Margin.” A reconciliation of tangible book value per common share to book value per common share is contained in the “Selected Financial Ratios” table. Reconciliations of core and non-core fee income and other expense to fee income and other expense are contained in the tables under “Results of Operations—Fourth Quarter Results.”

The following table presents a reconciliation of tangible equity to equity (dollars in thousands):

           
12/31/2012 9/30/2012 6/30/2012 3/31/2012 12/31/2011
Stockholders' equity - as reported $ 1,275,770 $ 1,260,830 $ 1,237,751 $ 1,215,430 $ 1,393,027
Less: goodwill 423,369 387,069 387,069 387,069 387,069
Less: other intangible assets, net of tax benefit 19,183 16,728 17,541 18,354 19,171
Tangible equity $ 833,218 $ 857,033 $ 833,141 $ 810,007 $ 986,787
 

The following table presents a reconciliation of tangible assets to total assets (dollars in thousands):

           
12/31/2012 9/30/2012 6/30/2012 3/31/2012 12/31/2011
Total assets - as reported $ 9,575,554 $ 9,463,545 $ 9,489,566 $ 9,671,600 $ 9,833,072
Less: goodwill 423,369 387,069 387,069 387,069 387,069
Less: other intangible assets, net of tax benefit 19,183 16,728 17,541 18,354 19,171
Tangible assets $ 9,133,002 $ 9,059,748 $ 9,084,956 $ 9,266,177 $ 9,426,832
 

The following table presents a reconciliation of tangible common equity to stockholders’ common equity (dollars in thousands):

           
12/31/2012 9/30/2012 6/30/2012 3/31/2012 12/31/2011
Common stockholders' equity - as reported $ 1,275,770 $ 1,260,830 $ 1,237,751 $ 1,215,430 $ 1,198,308
Less: goodwill 423,369 387,069 387,069 387,069 387,069
Less: other intangible assets, net of tax benefit 19,183 16,728 17,541 18,354 19,171
Tangible common equity $ 833,218 $ 857,033 $ 833,141 $ 810,007 $ 792,068
 

The following table presents a reconciliation of average tangible common equity to average common stockholders’ equity (dollars in thousands):

                 
4Q12 3Q12 2Q12 1Q12 4Q11 2012 2011
 
Average common stockholders' equity - as reported $ 1,264,772 $ 1,247,846 $ 1,223,667 $ 1,206,364 $ 1,181,820 $ 1,235,780 $ 1,164,316
Less: average goodwill 387,464 387,069 387,069 387,069 387,069 387,168 387,069
Less: average other intangible assets, net of tax benefit 16,238 17,018 17,903 18,721 19,494 17,465 20,865
Average tangible common equity $ 861,070 $ 843,759 $ 818,695 $ 800,574 $ 775,257 $ 831,147 $ 756,382
 

The following table presents a reconciliation of net cash flow available to common stockholders to net income available to common stockholders (dollars in thousands):

                   
4Q12 3Q12 2Q12 1Q12 4Q11 2012 2011
 
Net income available to common stockholders - as reported $ 24,012 $ 23,133 $ 22,143 $ 17,817 $ 16,847 $ 87,105 $ 28,314
Add: other intangible amortization expense, net of tax benefit 813 813 813 817 917 3,257 3,682
Net cash flow available to common stockholders $ 24,825 $ 23,946 $ 22,956 $ 18,634 $ 17,764 $ 90,362 $ 31,996
 

The following table presents a reconciliation of Tier 1 common capital to Tier 1 capital (dollars in thousands):

             
12/31/2012 9/30/2012 6/30/2012 3/31/2012 12/31/2011
Tier 1 capital - as reported $ 939,087 $ 958,123 $ 941,888 $ 925,089 $ 1,101,538
Less: preferred stock - - - - 194,719
Less: qualifying trust preferred securities 147,500 147,500 153,500 153,500 153,787
Tier 1 common capital $ 791,587 $ 810,623 $ 788,388 $ 771,589 $ 753,032
 

Efficiency Ratio Calculation (Dollars in Thousands)

               
4Q12 3Q12 2Q12 1Q12 4Q11 2012 2011
Other expense $ 71,106 $ 81,165 $ 66,834 $ 67,331 $ 69,433 $ 286,436 $ 269,633
Adjustment for prepayment fees on interest bearing liabilities - 12,682 - - - 12,682 -
Adjustment for impairment charges 1,432 758 - - 594 2,190 1,594

Adjustment for increase (decrease) in market value of assets held in trust for deferred compensation

104   355   (149 ) 501   20   811   (40 )
Other expense - as adjusted $ 69,570   $ 67,370   $ 66,983   $ 66,830   $ 68,819   $ 270,753   $ 268,079  
 
Net interest income $ 69,516 $ 72,075 $ 74,104 $ 77,093 $ 80,245 $ 292,788 $ 325,273
Tax equivalent adjustment 5,360   5,256   5,057   4,756   4,468   20,429   13,188  
Net interest income on a fully tax equivalent basis 74,876 77,331 79,161 81,849 84,713 313,217 338,461

Tax equivalent adjustment on the increase in cash surrender value of life insurance

481 479 468 494 508 1,922 2,357
Plus fee income 36,285 28,553 23,907 22,854 24,451 111,599 109,106
Less net losses on other real estate owned (1,626 ) (3,938 ) (5,441 ) (6,589 ) (5,478 ) (17,594 ) (13,613 )
Less net gains (losses) on investment securities 311 281 (34 ) (3 ) 411 555 640
Less net (losses) gains on sale of other assets (905 ) (12 ) (8 ) (17 ) (87 ) (942 ) 283
Less net gain on sale of loans held for sale - - - - - - 1,790

Less increase (decrease) in market value of assets held in trust for deferred compensation

104   355   (149 ) 501   20   811   (40 )
 
Net interest income plus fee income - as adjusted $ 113,758   $ 109,677   $ 109,168   $ 111,305   $ 114,806   $ 443,908   $ 460,864  
 
Efficiency ratio 61.16 % 61.43 % 61.36 % 60.04 % 59.94 % 60.99 % 58.17 %
 
Efficiency ratio (without adjustments) 67.21 % 80.66 % 68.19 % 67.37 % 66.32 % 70.83 % 62.07 %
 

Annualized Net Other Expense to Average Assets Calculation (Dollars in Thousands)

               
4Q12 3Q12 2Q12 1Q12 4Q11 2012 2011
Other expense $ 71,106 $ 81,165 $ 66,834 $ 67,331 $ 69,433 $ 286,436 $ 269,633
Adjustment for prepayment fees on interest bearing liabilities - 12,682 - - - 12,682 -
Adjustment for impairment charges 1,432 758 - - 594 2,190 1,594

Adjustment for increase (decrease) in market value of assets held in trust for deferred compensation

104   355   (149 ) 501   20   811   (40 )
Non-interest expense - as adjusted 69,570   67,370   66,983   66,830   68,819   270,753   268,079  
 
Fee income 36,285 28,553 23,907 22,854 24,451 111,599 109,106
Less net losses on other real estate owned (1,626 ) (3,938 ) (5,441 ) (6,589 ) (5,478 ) (17,594 ) (13,613 )
Less net gains (losses) on investment securities 311 281 (34 ) (3 ) 411 555 640
Less net (losses) gains on sale of other assets (905 ) (12 ) (8 ) (17 ) (87 ) (942 ) 283
Less net gain on sale of loans held for sale - - - - - - 1,790

Less increase (decrease) in market value of assets held in trust for deferred compensation

104   355   (149 ) 501   20   811   (40 )
Fee income - as adjusted 38,401   31,867   29,539   28,962   29,585   128,769   120,046  

Less tax equivalent adjustment on the increase in cash surrender value of life insurance

481   479   468   494   508   1,922   2,357  
 
Net other expense $ 30,688   $ 35,024   $ 36,976   $ 37,374   $ 38,726   $ 140,062   $ 145,676  
 
Average assets $ 9,461,895 $ 9,516,159 $ 9,478,480 $ 9,736,702 $ 9,856,835 $ 9,547,985 $ 9,956,133
 
Annualized net other expense to average assets 1.29 % 1.46 % 1.57 % 1.54 % 1.56 % 1.47 % 1.46 %
 

Annualized net other expense to average assets (without adjustments)

1.46 % 2.20 % 1.82 % 1.84 % 1.81 % 1.83 % 1.61 %
 

Core Fee Income to Revenues Ratio Calculation (Dollars in Thousands)

             
4Q12 3Q12 2Q12 1Q12 4Q11 2012 2011
Fee income $ 36,285 $ 28,553 $ 23,907 $ 22,854 $ 24,451 $ 111,599 $ 109,106
Less net losses on other real estate owned (1,626 ) (3,938 ) (5,441 ) (6,589 ) (5,478 ) (17,594 ) (13,613 )
Less net gains (losses) on investment securities 311 281 (34 ) (3 ) 411 555 640
Less net (losses) gains on sale of other assets (905 ) (12 ) (8 ) (17 ) (87 ) (942 ) 283
Less net gain on sale of loans held for sale - - - - - - 1,790

Less increase (decrease) in market value of assets held in trust for deferred compensation

104 355 (149 ) 501 20 811 (40 )

Plus tax equivalent adjustment on the increase in cash surrender value of life insurance

481   479   468   494   508   1,922   2,357  
Fee income - as adjusted $ 38,882   $ 32,346   $ 30,007   $ 29,456   $ 30,093   $ 130,691   $ 122,403  
 
Net interest income $ 69,516 $ 72,075 $ 74,104 $ 77,093 $ 80,245 $ 292,788 $ 325,273
Tax equivalent adjustment 5,360   5,256   5,057   4,756   4,468   20,429   13,188  
Net interest income on a fully tax equivalent basis 74,876 77,331 79,161 81,849 84,713 313,217 338,461

Tax equivalent adjustment on the increase in cash surrender value of life insurance

481 479 468 494 508 1,922 2,357
Plus fee income 36,285 28,553 23,907 22,854 24,451 111,599 109,106
Less net losses on other real estate owned (1,626 ) (3,938 ) (5,441 ) (6,589 ) (5,478 ) (17,594 ) (13,613 )
Less net gains (losses) on investment securities 311 281 (34 ) (3 ) 411 555 640
Less net (losses) gains on sale of other assets (905 ) (12 ) (8 ) (17 ) (87 ) (942 ) 283
Less net gain on sale of loans held for sale - - - - - - 1,790

Less increase (decrease) in market value of assets held in trust for deferred compensation

104   355   (149 ) 501   20   811   (40 )
 

Total revenue - as adjusted and on a fully tax equivalent basis

$ 113,758   $ 109,677   $ 109,168   $ 111,305   $ 114,806   $ 443,908   $ 460,864  
Core fee income to revenues ratio 34.18 % 29.49 % 27.49 % 26.46 % 26.21 % 29.44 % 26.56 %
 
Core fee income to revenues ratio (without adjustments) 34.30 % 28.37 % 24.39 % 22.87 % 23.35 % 27.60 % 25.12 %
 

NET INTEREST MARGIN

The following table presents, for the periods indicated, the total dollar amount of interest income from average interest earning assets and the resultant yields, as well as the interest expense on average interest bearing liabilities, and the resultant costs, expressed both in dollars and rates (dollars in thousands):

                     
4Q12 4Q11 3Q12
Average Yield/ Average Yield/ Average Yield/
Balance Interest   Rate Balance Interest   Rate Balance Interest   Rate
Interest Earning Assets:
Loans (1) (2) (3):
Commercial related credits
Commercial $ 1,117,323 $ 12,711 4.45 % $ 1,051,065 12,989 4.84 % $ 1,071,538 $ 12,640 4.62 %

Commercial loans collateralized by assignment of lease payments

1,204,431 12,797 4.25 1,102,220 14,167 5.14 1,193,462 13,119 4.40
Real estate commercial 1,766,332 21,636 4.79 1,839,689 25,132 5.35 1,778,414 22,836 5.02
Real estate construction 146,717 1,614 4.30 209,098 2,443 4.57 154,622 1,618 4.09
Total commercial related credits 4,234,803 48,758 4.51 4,202,072 54,731 5.10 4,198,036 50,213 4.68
Other loans
Real estate residential 312,189 3,417 4.38 316,087 3,719 4.71 310,374 3,425 4.41
Home equity 308,854 3,336 4.30 342,011 3,701 4.29 317,854 3,488 4.37
Indirect 207,429 3,061 5.87 188,562 3,080 6.48 202,583 2,984 5.86
Consumer loans 69,554 623 3.56 62,703 482 3.05 69,563 578 3.31
Total other loans 898,026 10,437 4.62 909,363 10,982 4.79 900,374 10,475 4.63
Total loans, excluding covered loans 5,132,829 59,195 4.59 5,111,435 65,713 5.10 5,098,410 60,688 4.74
Covered loans 479,011 5,354 4.45 707,039 10,894 6.11 536,697 7,967 5.91
Total loans 5,611,840 64,549 4.58 5,818,474 76,607 5.22 5,635,107 68,655 4.85
Taxable investment securities 1,508,774 6,371 1.69 1,820,680 11,608 2.55 1,418,549 7,287 2.05

Investment securities exempt from federal income taxes (3)

865,653 11,826 5.46 676,893 9,505 5.62 843,908 11,665 5.53
Other interest earning deposits 361,371 228 0.25 272,762 181 0.26 483,622 312 0.26
Total interest earning assets $ 8,347,638 $ 82,974 3.95 $ 8,588,809 $ 97,901 4.52 $ 8,381,186 $ 87,919 4.17
Non-interest earning assets 1,114,257 1,268,026 1,134,973
Total assets $ 9,461,895 $ 9,856,835 $ 9,516,159
 
Interest Bearing Liabilities:
Core funding:
Money market and NOW accounts $ 2,726,718 $ 1,007 0.15 % $ 2,653,486 $ 1,498 0.22 % $ 2,601,181 $ 1,026 0.16 %
Savings accounts 804,158 144 0.07 751,766 327 0.17 796,229 181 0.09
Certificates of deposit 1,570,147 2,562 0.67 1,971,473 4,294 0.89 1,676,047 2,826 0.70
Customer repurchase agreements 233,532 147 0.25 235,666 151 0.25 211,966 149 0.28
Total core funding 5,334,555 3,860 0.29 5,612,391 6,270 0.44 5,285,423 4,182 0.31
Wholesale funding:
Brokered accounts (includes fee expense) 302,565 2,353 3.09 438,123 3,450 3.12 429,342 3,341 3.10
Other borrowings 286,952 1,885 2.57 431,165 3,468 3.15 392,871 3,065 3.05
Total wholesale funding 589,517 4,238 2.49 869,288 6,918 2.88 822,213 6,406 2.73
Total interest bearing liabilities $ 5,924,072 $ 8,098 0.54 $ 6,481,679 $ 13,188 0.81 $ 6,107,636 $ 10,588 0.69
Non-interest bearing deposits 2,119,632 1,878,049 2,020,762
Other non-interest bearing liabilities 153,419 120,671 139,915
Stockholders' equity 1,264,772 1,376,436 1,247,846
Total liabilities and stockholders' equity $ 9,461,895 $ 9,856,835 $ 9,516,159
Net interest income/interest rate spread (4) $ 74,876   3.41 % $ 84,713   3.71 % $ 77,331   3.48 %
Taxable equivalent adjustment 5,360 4,468 5,256
Net interest income, as reported $ 69,516 $ 80,245 $ 72,075
Net interest margin (5) 3.31 % 3.71 % 3.42 %
Tax equivalent effect 0.26 % 0.20 % 0.25 %

Net interest margin on a fully tax equivalent basis (5)

3.57 % 3.91 % 3.67 %
 
 
(1) Non-accrual loans are included in average loans.
(2) Interest income includes amortization of deferred loan origination fees of $1.0 million, $1.2 million, and $749 thousand for the three months ended December 31, 2012, December 31, 2011, and September 30, 2012, respectively.
(3) Non-taxable loan and investment income is presented on a fully tax equivalent basis assuming a 35% tax rate.
(4) Interest rate spread represents the difference between the average yield on interest earning assets and the average cost of interest bearing liabilities and is presented on a fully tax equivalent basis.
(5) Net interest margin represents net interest income as a percentage of average interest earning assets.
 

NET INTEREST MARGIN

The following table presents, for the periods indicated, the total dollar amount of interest income from average interest earning assets and the resultant yields, as well as the interest expense on average interest bearing liabilities, and the resultant costs, expressed both in dollars and rates (dollars in thousands):

       
2012 2011
Average     Yield/ Average     Yield/
Balance Interest   Rate Balance Interest   Rate
Interest Earning Assets:
Loans (1) (2) (3):
Commercial related credits
Commercial $ 1,080,652 $ 51,051 4.65 % $ 1,108,033 53,813 4.79 %
Commercial loans collateralized by
assignment of lease payments 1,188,022 53,019 4.46 1,041,033 56,453 5.42
Real estate commercial 1,813,421 92,218 5.00 1,968,088 105,342 5.28
Real estate construction 146,660 6,176 4.14 300,288 11,984 3.94
Total commercial related credits 4,228,755 202,464 4.71 4,417,442 227,592 5.08
Other loans
Real estate residential 311,537 14,033 4.50 326,189 15,914 4.88
Home equity 321,031 14,068 4.38 359,972 15,481 4.30
Indirect 197,423 11,926 6.04 181,988 12,034 6.61
Consumer loans 69,638 2,281 3.28 58,205 1,957 3.36
Total other loans 899,629 42,308 4.70 926,354 45,386 4.90
Total loans, excluding covered loans 5,128,384 244,772 4.77 5,343,796 272,978 5.11
Covered loans 562,914 31,582 5.61 755,242 55,706 7.38
Total loans 5,691,298 276,354 4.86 6,099,038 328,684 5.39
Taxable investment securities 1,542,814 33,424 2.17 1,669,971 41,349 2.48
Investment securities exempt from
federal income taxes (3) 815,500 45,094 5.53 460,971 26,562 5.76
Other interest earning deposits 337,325 867 0.26 442,190 1,153 0.26
Total interest earning assets $ 8,386,937 $ 355,739 4.24 $ 8,672,170 $ 397,748 4.59
Non-interest earning assets 1,161,048 1,283,963
Total assets $ 9,547,985 $ 9,956,133
 
Interest Bearing Liabilities:
Core funding:
Money market and NOW accounts $ 2,646,299 $ 4,285 0.16 % $ 2,678,049 $ 7,637 0.29 %
Savings accounts 789,595 786 0.10 732,731 1,379 0.19
Certificates of deposit 1,725,462 12,532 0.76 2,165,541 21,162 0.99
Customer repurchase agreements 210,891 556 0.26 239,896 639 0.27
Total core funding 5,372,247 18,159 0.34 5,816,217 30,817 0.53
Wholesale funding:
Brokered accounts (includes fee expense) 406,908 12,655 3.11 444,895 14,703 3.30
Other borrowings 383,236 11,708 3.00 443,752 13,767 3.06
Total wholesale funding 790,144 24,363 2.70 888,647 28,470 3.03
Total interest bearing liabilities $ 6,162,391 $ 42,522 0.69 $ 6,704,864 $ 59,287 0.88
Non-interest bearing deposits 1,973,666 1,771,918
Other non-interest bearing liabilities 137,302 120,647
Stockholders' equity 1,274,626 1,358,704
Total liabilities and stockholders' equity $ 9,547,985 $ 9,956,133
Net interest income/interest rate spread (4) $ 313,217   3.55 % $ 338,461   3.71 %
Taxable equivalent adjustment 20,429 13,188
Net interest income, as reported $ 292,788 $ 325,273
Net interest margin (5) 3.49 % 3.75 %
Tax equivalent effect 0.24 % 0.15 %
Net interest margin on a fully tax
equivalent basis (5) 3.73 % 3.90 %
 
 
(1) Non-accrual loans are included in average loans.
(2) Interest income includes amortization of deferred loan origination fees of $3.5 million and $4.7 million for the twelve months ended December 31, 2012 and December 31, 2011, respectively.
(3) Non-taxable loan and investment income is presented on a fully tax equivalent basis assuming a 35% tax rate.
(4) Interest rate spread represents the difference between the average yield on interest earning assets and the average cost of interest bearing liabilities and is presented on a fully tax equivalent basis.
(5) Net interest margin represents net interest income as a percentage of average interest earning assets.

Source: MB Financial, Inc.

MB Financial, Inc.
Jill York - Vice President and Chief Financial Officer
E-Mail: jyork@mbfinancial.com
(888) 422-6562