CHICAGO--(BUSINESS WIRE)--Jan. 26, 2012-- MB
Financial, Inc. (NASDAQ: MBFI), the holding company
for MB Financial Bank, N.A ("the Bank" or "MB
Financial Bank"), announced today fourth quarter
results for 2011. The words "MB Financial," "the
Company," "we," "our" and "us" refer to MB Financial,
Inc. and its consolidated subsidiaries, unless
indicated otherwise. We had net income of $19.5
million and net income available to common
stockholders of $16.8 million for the fourth quarter
of 2011 compared to net income of $3.2 million and
net income available to common stockholders of $595
thousand for the fourth quarter of 2010, and net
income of $19.7 million and net income available to
common stockholders of $17.1 million for the third
quarter of 2011.
Key items for the quarter were as follows:
Fourth Quarter Loan Growth:
-
Total loans increased $152.5 million to $6.0
billion at December 31, 2011, or 2.6% sequentially
compared to $5.8 billion at September 30, 2011.
-
Total commercial related loans increased $194.4
million to $4.4 billion at December 31, 2011, or
4.7% sequentially compared to $4.2 billion at
September 30, 2011. The four loan categories that
make up commercial related loans changed as follows
during the fourth quarter of 2011 (in millions):
Lease loans $ 141.4 Commercial and industrial loans
70.5 Commercial real estate loans 8.9 Construction
(26.4 ) $ 194.4
Pre-Tax, Pre-Provision Operating Earnings Remain
Strong:
-
Pre-tax, pre-provision operating earnings on a
fully tax equivalent basis were $46.0 million, or
2.87% of risk-weighted assets, for the fourth
quarter of 2011 compared to $47.2 million, or 3.03%
of risk-weighted assets, for the third quarter of
2011. Pre-tax, pre-provision operating earnings on
a fully tax equivalent basis to average assets was
1.85% for the fourth quarter of 2011 compared to
1.91% for the third quarter of 2011.
-
Net interest income on a fully tax equivalent basis
increased $977 thousand compared to the third
quarter of 2011.
-
Net interest margin on a fully tax equivalent basis
was 3.91% for the fourth quarter of 2011 compared
to 3.90% in the third quarter of 2011.
-
Core other income was $29.6 million for the fourth
quarter of 2011, relatively consistent with the
third quarter of 2011.
-
Core other expense was $68.8 million for the fourth
quarter of 2011, an increase of $1.8 million from
$67.0 million for the third quarter of 2011.
Continued Improvement in Credit Quality - Lower
Credit Losses, Lower Non-Performing Loans and Lower
Non-Performing Assets:
-
Our provision for credit losses was $8.0 million
for the fourth quarter of 2011, while our net
charge-offs were $13.9 million. Our provision for
credit losses and net charge-offs for the third
quarter of 2011 were $11.5 million and $16.7
million, respectively.
-
Our non-performing loans were $129.4 million or
2.17% of total loans as of December 31, 2011, a
decrease of $11.6 million from $141.0 million or
2.42% of total loans at September 30, 2011.
-
Our allowance for loan losses to non-performing
loans was 98.00% as of December 31, 2011 compared
to 91.23% as of September 30, 2011.
-
Our non-performing assets were $208.0 million or
2.12% of total assets as of December 31, 2011, a
decrease of $20.7 million from $228.7 million or
2.30% of total assets as of September 30, 2011.
-
Our allowance for loan losses to total loans was
2.13% as of December 31, 2011 compared to 2.21% as
of September 30, 2011.
Top Ten Workplaces in Chicago:
-
During the fourth quarter of 2011, our bank was
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
increased $977 thousand from the third quarter of
2011, but decreased by $2.6 million from the fourth
quarter of 2010 to the fourth quarter of 2011. The
decrease from the fourth quarter of 2010 was due
primarily to a decrease in interest earning assets
partially offset by an increase in net interest
margin.
Our net interest margin, on a fully tax equivalent
basis, was 3.91% for the fourth quarter of 2011
compared to 3.90% for the third quarter of 2011 and
3.83% for the fourth quarter of 2010. The margin
increase from 2010 was due to a decrease in our
average cost of funds as a result of an improved
deposit mix and downward repricing of interest
bearing deposits, as well as an improved interest
earning asset mix and a lower level of non-performing
loans.
Our net interest margin, on a fully tax equivalent
basis, was 3.90% for the year ended December 31, 2011
compared to 3.83% for the year ended December 31,
2010. The margin increase from 2010 was due to a
decrease in our average cost of funds as a result of
an improved deposit mix and downward repricing of
interest bearing deposits, as well as a lower level
of non-performing loans.
See the supplemental net interest margin tables for
further detail.
Other Income (in thousands):
| | | | | | | | | | | | | | | | | | | | |
Three Months Ended
| |
Year Ended
| | | |
December 31,
| |
September 30,
| |
June 30,
| |
March 31,
| |
December 31,
| |
December 31,
| |
December 31,
| | | |
2011
| |
2011
| |
2011
| |
2011
| |
2010
| |
2011
| |
2010
|
Core other income:
| | | | | | | | | | | | | | | | | | | | | | |
Loan service fees
| |
$
|
1,601
| | |
$
|
2,159
| | |
$
|
2,812
| | |
$
|
1,126
| | |
$
|
1,532
| | |
$
|
7,698
| | |
$
|
6,517
| | |
Deposit service fees
| | |
10,085
| | | |
9,932
| | | |
9,023
| | | |
10,030
| | | |
9,920
| | | |
39,070
| | | |
38,934
| | |
Lease financing, net
| | |
7,801
| | | |
6,494
| | | |
6,861
| | | |
5,783
| | | |
7,185
| | | |
26,939
| | | |
21,853
| | |
Brokerage fees
| | |
1,577
| | | |
1,273
| | | |
1,615
| | | |
1,419
| | | |
1,231
| | | |
5,884
| | | |
5,012
| | |
Trust and asset management fees
| | |
4,166
| | | |
4,272
| | | |
4,455
| | | |
4,431
| | | |
4,243
| | | |
17,324
| | | |
15,037
| | |
Increase in cash surrender value of life
insurance
| | |
944
| | | |
1,014
| | | |
1,451
| | | |
968
| | | |
930
| | | |
4,377
| | | |
3,516
| | |
Accretion of FDIC indemnification asset
| | |
683
| | | |
985
| | | |
1,339
| | | |
1,831
| | | |
3,009
| | | |
4,838
| | | |
9,678
| | |
Card fees
| | |
1,096
| | | |
2,071
| | | |
2,062
| | | |
1,788
| | | |
2,287
| | | |
7,017
| | | |
7,057
| | |
Other operating income
| | |
1,632
| | | |
1,690
| | | |
1,979
| | | |
1,598
| | | |
1,570
| | | |
6,899
| | | |
4,947
| |
Total core other income
| | |
29,585
| | | |
29,890
| | | |
31,597
| | | |
28,974
| | | |
31,907
| | | |
120,046
| | | |
112,551
| | | | | | | | | | | | | | | | | | | | | | | | |
Non-core other income: (1)
| | | | | | | | | | | | | | | | | | | | | | |
Net gain (loss) on sale of investment
securities
| | |
411
| | | |
-
| | | |
232
| | | |
(3
|
)
| | |
(4
|
)
| | |
640
| | | |
18,648
| | |
Net (loss) gain on sale of other assets
| | |
(87
|
)
| | |
-
| | | |
13
| | | |
357
| | | |
419
| | | |
283
| | | |
630
| | |
Net gain on sale of loans held for sale (A)
| | |
-
| | | |
-
| | | |
1,790
| | | |
-
| | | |
-
| | | |
1,790
| | | |
-
| | |
Net loss recognized on other real estate owned
(B)
| | |
(3,620
|
)
| | |
(2,354
|
)
| | |
(3,628
|
)
| | |
(369
|
)
| | |
(1,656
|
)
| | |
(9,971
|
)
| | |
(8,511
|
)
| |
Net loss recognized on other real estate owned
related to FDIC transactions (B)
| | |
(1,858
|
)
| | |
(764
|
)
| | |
(1,017
|
)
| | |
(3
|
)
| | |
(468
|
)
| | |
(3,642
|
)
| | |
(773
|
)
| |
Acquisition related gains
| | |
-
| | | |
-
| | | |
-
| | | |
-
| | | |
-
| | | |
-
| | | |
62,649
| | |
Increase (decrease) in market value of assets
held in trust for deferred compensation (A)
| | |
20
| | | |
(405
|
)
| | |
158
| | | |
187
| | | |
597
| | | |
(40
|
)
| | |
562
| |
Total non-core other income
| | |
(5,134
|
)
| | |
(3,523
|
)
| | |
(2,452
|
)
| | |
169
| | | |
(1,112
|
)
| | |
(10,940
|
)
| | |
73,205
| | | | | | | | | | | | | | | | | | | | | | | | |
Total other income
| |
$
|
24,451
| | |
$
|
26,367
| | |
$
|
29,145
| | |
$
|
29,143
| | |
$
|
30,795
| | |
$
|
109,106
| | |
$
|
185,756
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1)
| |
Letter denotes the corresponding line items where
these non-core other income items reside in the
consolidated statements of income as follows: A -
Other operating income, B - Net loss recognized
on other real estate owned.
| | | |
Core other income was relatively consistent from the
third quarter of 2011 to the fourth quarter of 2011.
Loan service fees decreased due to less prepayment,
exit and letters of credit fees during the fourth
quarter of 2011. Net lease financing income increased
mainly as a result of an increase in the sales of
third party equipment maintenance contracts and
related income. Accretion of indemnification asset
decreased as a result of the corresponding decrease
in the indemnification asset balance during the
fourth quarter of 2011. Card fees were down due to
the impact of the Durbin Amendment to the Dodd-Frank
Act on debit card interchange fees. Non-core other
income was impacted by higher losses recognized on
other real estate owned.
Core other income increased by $7.5 million from the
year ended December 31, 2010 to the year ended
December 31, 2011. Loan service fees increased due to
an increase in prepayment, exit and interest rate
swap fees partly offset by a decrease in letters of
credit fees. Net lease financing increased primarily
due to an increase in the sales of third party
equipment maintenance contracts and related income.
Trust and asset management fees increased primarily
due to the addition of a significant number of
accounts during the third quarter of 2010, which
impacted the full year in 2011. The increase in cash
surrender value of life insurance was higher due to
an improvement in overall asset yields. Accretion of
indemnification asset decreased as a result of
corresponding decrease in the indemnification asset
balance during the year ended December 31, 2011.
Other operating income increased primarily due to
additional income from our international banking line
of business and increased income from a Small
Business Investment Company (SBIC) investment.
Non-core other income decreased in the year ended
December 31, 2011 compared to the year ended December
31, 2010 primarily as a result of the acquisition
related gains recognized on the Broadway Bank and New
Century Bank FDIC-assisted transactions in the second
quarter of 2010, lower gains on sales of investment
securities in 2011 and higher losses recognized on
other real estate owned in 2011.
Other Expense (in thousands):
| | | | | | | | | | | | | | | | | | | | |
Three Months Ended
| |
Year Ended
| | | |
December 31,
| |
September 30,
| |
June 30,
| |
March 31,
| |
December 31,
| |
December 31,
| |
December 31,
| | | |
2011
| |
2011
| |
2011
| |
2011
| |
2010
| |
2011
| |
2010
|
Core other expense:
| | | | | | | | | | | | | | | | | | | | | | |
Salaries and employee benefits
| |
$
|
39,826
| |
$
|
38,827
| | |
$
|
37,657
| |
$
|
37,588
| |
$
|
35,802
| |
$
|
153,898
| | |
$
|
143,787
| |
Occupancy and equipment expense
| | |
8,498
| | |
9,092
| | | |
8,483
| | |
9,394
| | |
7,938
| | |
35,467
| | | |
34,845
| |
Computer services and telecommunication expense
| | |
4,382
| | |
3,488
| | | |
3,570
| | |
3,445
| | |
3,264
| | |
14,885
| | | |
14,615
| |
Advertising and marketing expense
| | |
1,831
| | |
1,740
| | | |
1,748
| | |
1,719
| | |
1,573
| | |
7,038
| | | |
6,465
| |
Professional and legal expense
| | |
1,422
| | |
1,647
| | | |
1,853
| | |
1,225
| | |
1,718
| | |
6,147
| | | |
5,803
| |
Brokerage fee expense
| | |
137
| | |
363
| | | |
574
| | |
483
| | |
448
| | |
1,557
| | | |
1,926
| |
Other intangible amortization expense
| | |
1,410
| | |
1,414
| | | |
1,416
| | |
1,425
| | |
1,632
| | |
5,665
| | | |
6,214
| |
FDIC insurance premiums
| | |
2,662
| | |
2,272
| | | |
3,502
| | |
3,428
| | |
3,930
| | |
11,864
| | | |
15,600
| |
Other real estate expense, net
| | |
1,464
| | |
1,181
| | | |
1,251
| | |
398
| | |
858
| | |
4,294
| | | |
2,694
| |
Other operating expenses
| | |
7,187
| | |
6,989
| | | |
6,516
| | |
6,572
| | |
6,855
| | |
27,264
| | | |
26,265
|
Total core other expense
| | |
68,819
| | |
67,013
| | | |
66,570
| | |
65,677
| | |
64,018
| | |
268,079
| | | |
258,214
| | | | | | | | | | | | | | | | | | | | | | | |
Non-core other expense: (1)
| | | | | | | | | | | | | | | | | | | | | | |
Branch impairment charges
| | |
594
| | |
-
| | | |
-
| | |
1,000
| | |
-
| | |
1,594
| | | |
-
| |
Increase (decrease) in market value of assets
held in trust for deferred compensation (A)
| | |
20
| | |
(405
|
)
| | |
158
| | |
187
| | |
597
| | |
(40
|
)
| | |
562
|
Total non-core other expense
| | |
614
| | |
(405
|
)
| | |
158
| | |
1,187
| | |
597
| | |
1,554
| | | |
562
| | | | | | | | | | | | | | | | | | | | | | | |
Total other expense
| |
$
|
69,433
| |
$
|
66,608
| | |
$
|
66,728
| |
$
|
66,864
| |
$
|
64,615
| |
$
|
269,633
| | |
$
|
258,776
| | | | | | | | | | | | | | | | | | | | | | | | |
(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 $1.8 million in the
fourth quarter of 2011 compared with the third
quarter of 2011. Salaries and employee benefits
increased due to an increase in leasing incentive
compensation on higher leasing revenues and an
increase in health and benefits expense. We are
largely self-insured for health insurance and expense
can vary from quarter to quarter. Occupancy and
equipment expense was down in the fourth quarter as
most major maintenance projects were completed by the
end of the third quarter. Computer services and
telecommunication expense increased due to product
and system enhancements during the fourth quarter of
2011. Non-core other expense was primarily impacted
by $594 thousand of fixed asset impairment charges as
a result of our decision to close two branches during
the fourth quarter.
Core other expense increased by $9.9 million from the
year ended December 31, 2010 to the year ended
December 31, 2011. Salaries and employee benefits
expense increased due to additional employees added
in April 2010 in connection with the New Century and
Broadway FDIC-assisted acquisitions, problem loan
remediation staff added throughout 2010, and
increased leasing incentive compensation on higher
leasing revenues. FDIC insurance premiums decreased
due to lower deposits, a change in the assessment
computation during the second quarter of 2011, and
the impact of improved credit quality on the
computation. Other real estate expense increased as a
result of more properties in other real estate owned
throughout 2011 compared to 2010. Non-core other
expense was primarily impacted by $1.6 million of
fixed asset impairment charges due to our decision to
close three branches throughout 2011.
Income Taxes
The Company had income tax expense of $7.8 million
for the three months ended December 31, 2011 and $5.3
million for the year ended December 31, 2011. The
three month and annual tax expenses are calculated
based on pre-tax income excluding tax-exempt items.
The annual amount also reflects a $2 million increase
in deferred tax assets as a result of an increase in
the Illinois corporate income tax rate which was
enacted and effective in the first quarter of 2011.
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):
| | | | | | | | | | | | | | | | | | | | | | | |
December 31,
| |
September 30,
| |
June 30,
| |
March 31,
| |
December 31,
| | | |
2011
| |
2011
| |
2011
| |
2011
| |
2010
| | | |
Amount
| |
% of Total
| |
Amount
| |
% of Total
| |
Amount
| |
% of Total
| |
Amount
| |
% of Total
| |
Amount
| |
% of Total
|
Commercial related credits:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial loans
| |
$
|
1,113,123
| |
19%
| |
$
|
1,042,583
| |
18%
| |
$
|
1,108,295
| |
19%
| |
$
|
1,154,451
| |
18%
| |
$
|
1,206,984
| |
18%
| |
Commercial loans collateralized by assignment of
lease payments (lease loans)
| | |
1,208,575
| |
20%
| | |
1,067,191
| |
18%
| | |
1,031,677
| |
17%
| | |
1,038,507
| |
16%
| | |
1,053,446
| |
16%
| |
Commercial real estate
| | |
1,853,788
| |
31%
| | |
1,844,894
| |
32%
| | |
1,863,223
| |
32%
| | |
2,084,651
| |
33%
| | |
2,176,584
| |
33%
| |
Construction real estate
| | |
183,789
| |
3%
| | |
210,206
| |
4%
| | |
246,557
| |
4%
| | |
356,579
| |
6%
| | |
423,339
| |
6%
|
Total commercial related credits
| | |
4,359,275
| |
73%
| | |
4,164,874
| |
72%
| | |
4,249,752
| |
72%
| | |
4,634,188
| |
73%
| | |
4,860,353
| |
73%
|
Other loans:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential real estate
| | |
316,787
| |
5%
| | |
316,305
| |
5%
| | |
317,821
| |
5%
| | |
335,423
| |
5%
| | |
328,482
| |
5%
| |
Indirect vehicle
| | |
187,481
| |
3%
| | |
189,033
| |
4%
| | |
182,536
| |
3%
| | |
175,058
| |
3%
| | |
175,664
| |
3%
| |
Home equity
| | |
336,043
| |
6%
| | |
348,934
| |
6%
| | |
357,181
| |
6%
| | |
371,108
| |
6%
| | |
381,662
| |
6%
| |
Consumer loans
| | |
88,865
| |
2%
| | |
76,025
| |
1%
| | |
75,069
| |
1%
| | |
74,585
| |
1%
| | |
59,320
| |
1%
|
Total other loans
| | |
929,176
| |
16%
| | |
930,297
| |
16%
| | |
932,607
| |
15%
| | |
956,174
| |
15%
| | |
945,128
| |
15%
|
Gross loans excluding covered loans
| | |
5,288,451
| |
89%
| | |
5,095,171
| |
88%
| | |
5,182,359
| |
87%
| | |
5,590,362
| |
88%
| | |
5,805,481
| |
88%
| |
Covered loans (1)
| | |
677,770
| |
11%
| | |
718,566
| |
12%
| | |
755,670
| |
13%
| | |
777,634
| |
12%
| | |
812,330
| |
12%
|
Total loans
| |
$
|
5,966,221
| |
100%
| |
$
|
5,813,737
| |
100%
| |
$
|
5,938,029
| |
100%
| |
$
|
6,367,996
| |
100%
| |
$
|
6,617,811
| |
100%
| | | | | | | | | | | | | | | | | | | | | | | | | | |
(1)
| |
Covered loans refer to loans we acquired in
FDIC-assisted transactions that are subject to
loss-sharing agreements with the FDIC.
| | | |
During the second quarter of 2011, we sold certain
performing, sub-performing and non-performing loans.
The loans sold had an aggregate carrying amount of
$281.6 million prior to the transfer to loans held
for sale, which was comprised of $160.8 million in
commercial real estate loans, $73.7 million in
construction real estate loans, $14.5 million in
commercial loans and $32.6 million in residential
real estate and home equity loans.
ASSET QUALITY
The following table presents a summary of
non-performing assets, excluding loans held for sale,
credit-impaired loans that were acquired as part of
our FDIC-assisted transactions and OREO related to
FDIC
| | | | | | | | | | | | | | | | | | | |
December 31,
| |
September 30,
| |
June 30,
| |
March 31,
| |
December 31,
| | | |
2011
| |
2011
| |
2011
| |
2011
| |
2010
|
Non-performing loans:
| | | | | | | | | | | | | | | | |
Non-accrual loans(1)
| |
$
|
129,309
| |
$
|
140,979
| |
$
|
149,905
| |
$
|
318,923
| |
$
|
362,441
| |
Loans 90 days or more past due, still accruing
interest
| | |
82
| | |
-
| | |
1,121
| | |
-
| | |
1
|
Total non-performing loans
| | |
129,391
| | |
140,979
| | |
151,026
| | |
318,923
| | |
362,442
| | | | | | | | | | | | | | | | | |
OREO
| | |
78,452
| | |
87,469
| | |
88,185
| | |
80,107
| | |
71,476
|
Repossessed vehicles
| | |
156
| | |
249
| | |
55
| | |
139
| | |
82
|
Total non-performing assets
| |
$
|
207,999
| |
$
|
228,697
| |
$
|
239,266
| |
$
|
399,169
| |
$
|
434,000
| | | | | | | | | | | | | | | | | |
Total allowance for loan losses (2)
| |
$
|
126,798
| |
$
|
128,610
| |
$
|
130,057
| |
$
|
178,410
| |
$
|
192,217
| | | | | | | | | | | | | | | | | |
Accruing restructured loans(3)
| |
$
|
37,996
| |
$
|
34,321
| |
$
|
35,037
| |
$
|
31,819
| |
$
|
22,543
| | | | | | | | | | | | | | | | | |
Total non-performing loans to total loans
| | |
2.17%
| | |
2.42%
| | |
2.54%
| | |
5.01%
| | |
5.48%
|
Total non-performing assets to total assets
| | |
2.12%
| | |
2.30%
| | |
2.40%
| | |
3.96%
| | |
4.21%
|
Allowance for loan losses to non-performing loans
| | |
98.00%
| | |
91.23%
| | |
86.12%
| | |
55.94%
| | |
53.03%
| | | | | | | | | | | | | | | | |
(1)
| |
Includes $42.5 million, $36.0 million, $22.5
million, $60.9 million, and $47.6 million of
restructured loans on non-accrual status at
December 31, 2011, September 30, 2011, June 30,
2011, March 31, 2011 and December 31, 2010,
respectively.
|
(2)
| |
Includes $12.7 million and $13.6 million for
unfunded credit commitments at March 31, 2011 and
December 31, 2010, respectively.
|
(3)
| |
Accruing restructured loans consists primarily of
commercial, commercial real estate, and
residential real estate loans that have been
modified and are performing in accordance with
those modified terms.
| | | |
The decreases in total non-performing loans and total
non-performing assets from March 31, 2011 to June 30,
2011 were primarily due to the sale during the second
quarter of 2011 of loans with an aggregate carrying
amount of $281.6 million prior to the transfer to
loans held for sale, $156.3 million of which were
non-performing.
The following table presents a summary of total
performing loans greater than 30 days and less than
90 days past due, excluding loans held for sale and
credit-impaired loans that were acquired as part of
our FDIC
| | | | | | | | | | | | | | | | | | | | | |
December 31,
| |
September 30,
| |
June 30,
| |
March 31,
| |
December 31,
| | | | |
2011
| |
2011
| |
2011
| |
2011
| |
2010
| | | | | | | | | | | | | | | | | | |
30 - 59 Days Past Due
| | | |
$
|
9,379
| |
$
|
15,564
| |
$
|
10,568
| |
$
|
23,912
| |
$
|
9,386
|
60 - 89 Days Past Due
| | | | |
5,316
| | |
4,307
| | |
4,881
| | |
4,049
| | |
5,073
| | | | |
$
|
14,695
| |
$
|
19,871
| |
$
|
15,449
| |
$
|
27,961
| |
$
|
14,459
| | | | | | | | | | | | | | | | | | |
Approximately $549 thousand of performing loans past
due were included among the loans classified as
potential problem loans (defined and discussed below)
as of December 31, 2011 compared to $9.2 million as
of September 30, 2011.
The following table represents a summary of OREO,
excluding OREO related to FDIC-assisted transactions
(in thousands):
| | | | | | | | | | | | | | | | | |
December 31,
| |
September 30,
| |
June 30,
| |
March 31,
| |
December 31,
| | |
2011
| |
2011
| |
2011
| |
2011
| |
2010
| | | | | | | | | | | | | | | | |
Balance at the beginning of quarter
| |
$
|
87,469
| |
$
|
88,185
| |
$
|
80,107
| |
$
|
71,476
| |
$
|
59,114
|
Transfers in at fair value less estimated costs
to sell
| | |
4,209
| | |
15,658
| | |
15,761
| | |
25,167
| | |
27,170
|
Fair value adjustments
| | |
(3,733)
| | |
(2,524)
| | |
(3,417)
| | |
(1,314)
| | |
(1,562)
|
Net gains (losses) on sales of OREO
| | |
113
| | |
170
| | |
(212)
| | |
945
| | |
(94)
|
Cash received upon disposition
| | |
(9,606)
| | |
(14,020)
| | |
(4,054)
| | |
(16,167)
| | |
(13,152)
|
Balance at the end of quarter
| |
$
|
78,452
| |
$
|
87,469
| |
$
|
88,185
| |
$
|
80,107
| |
$
|
71,476
| | | | | | | | | | | | | | | | |
The following table presents data related to
non-performing loans, by dollar amount and category
at December 31, 2011, excluding loans held for sale
and credit-impaired loans that were acquired as part
of our FDIC-assisted transactions (dollar amounts in
thousands):
| | | | | | | | | | | | | | | | | | | | | | |
Construction Real Estate
| |
Commercial Real Estate
| |
Consumer
| | | | |
Commercial and Lease Loans
| |
Loans
| |
Loans
| |
Loans
| |
Total Loans
| | |
Number of
| | | |
Number of
| | | |
Number of
| | | | | | | | |
Relationships
| |
Amount
| |
Relationships
| |
Amount
| |
Relationships
| |
Amount
| |
Amount
| |
Amount
|
$10.0 million or more
| |
-
| |
$
|
-
| |
-
| |
$
|
-
| |
-
| |
$
|
-
| |
$
|
-
| |
$
|
-
|
$5.0 million to $9.9 million
| |
2
| | |
14,322
| |
-
| | |
-
| |
2
| | |
15,435
| | |
-
| | |
29,757
|
$1.5 million to $4.9 million
| |
5
| | |
12,031
| |
-
| | |
-
| |
13
| | |
37,509
| | |
-
| | |
49,540
|
Under $1.5 million
| |
42
| | |
10,642
| |
3
| | |
1,145
| |
61
| | |
23,607
| | |
14,700
| | |
50,094
| | |
49
| |
$
|
36,995
| |
3
| |
$
|
1,145
| |
76
| |
$
|
76,551
| |
$
|
14,700
| |
$
|
129,391
| | | | | | | | | | | | | | | | | | | | | | |
Percentage of individual loan category
| | | | |
1.59%
| | | | |
0.62%
| | | | |
4.13%
| | |
1.58%
| | |
2.17%
| | | | | | | | | | | | | | | | | | | | | | |
The following table presents data related to
non-performing loans, by dollar amount and category
at September 30, 2011, excluding loans held for sale
and credit-impaired loans that were acquired as part
of our FDIC-assisted transactions (dollar amounts in
thousands):
| | | | | | | | | | | | | | | | | | | | | | |
Construction Real Estate
| |
Commercial Real Estate
| |
Consumer
| |
Total
| | |
Commercial and Lease Loans
| |
Loans
| |
Loans
| |
Loans
| |
Loans
| | |
Number of
| | | |
Number of
| | | |
Number of
| | | | | | | | |
Relationships
| |
Amount
| |
Relationships
| |
Amount
| |
Relationships
| |
Amount
| |
Amount
| |
Amount
|
$10.0 million or more
| |
-
| |
$
|
-
| |
-
| |
$
|
-
| |
-
| |
$
|
-
| |
$
|
-
| |
$
|
-
|
$5.0 million to $9.9 million
| |
3
| | |
20,136
| |
-
| | |
-
| |
3
| | |
23,938
| | |
-
| | |
44,074
|
$1.5 million to $4.9 million
| |
4
| | |
8,854
| |
-
| | |
-
| |
13
| | |
37,474
| | |
-
| | |
46,328
|
Under $1.5 million
| |
37
| | |
8,654
| |
5
| | |
2,913
| |
54
| | |
25,495
| | |
13,515
| | |
50,577
| | |
44
| |
$
|
37,644
| |
5
| |
$
|
2,913
| |
70
| |
$
|
86,907
| |
$
|
13,515
| |
$
|
140,979
| | | | | | | | | | | | | | | | | | | | | | |
Percentage of individual loan category
| | | | |
1.78%
| | | | |
1.39%
| | | | |
4.71%
| | |
1.45%
| | |
2.42%
| | | | | | | | | | | | | | | | | | | | | | |
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
aggregate principal amount of potential problem loans
was $149.8 million, or 2.51% of total loans, as of
December 31, 2011, compared to $179.7 million, or
3.09% of total loans, as of September 30, 2011. The
decrease was primarily due to loan risk rating
upgrades and loan payments, as well as some downward
migration to non-performing status.
Below is a reconciliation of the activity in our
allowance for credit and loan losses for the periods
indicated (dollar amounts in thousands):
| | | | | | | | | | | | | | | | | | | | | |
Three Months Ended
| |
Year Ended
| | | |
December 31,
| |
September 30,
| |
June 30,
| |
March 31,
| |
December 31,
| |
December 31,
| |
December 31,
| | | |
2011
| |
2011
| |
2011
| |
2011
| |
2010
| |
2011
| |
2010
|
Allowance for credit losses, balance at the
beginning of period
| |
$
|
141,861
| | |
$
|
147,107
| | |
$
|
178,410
| | |
$
|
192,217
| | |
$
|
193,926
| | |
$
|
192,217
| | |
$
|
177,072
| |
Provision for credit losses
| | |
8,000
| | | |
11,500
| | | |
61,250
| | | |
40,000
| | | |
49,000
| | | |
120,750
| | | |
246,200
| |
Charge-offs:
| | | | | | | | | | | | | | | | | | | | | | |
Commercial loans
| | |
(2,932
|
)
| | |
(3,497
|
)
| | |
(7,991
|
)
| | |
(3,151
|
)
| | |
(9,141
|
)
| | |
(17,571
|
)
| | |
(58,077
|
)
| |
Commercial loans collateralized by assignment
of lease payments (lease loans)
| | |
(1,373
|
)
| | |
-
| | | |
(93
|
)
| | |
-
| | | |
(43
|
)
| | |
(1,466
|
)
| | |
(1,711
|
)
| |
Commercial real estate loans
| | |
(3,793
|
)
| | |
(7,815
|
)
| | |
(55,250
|
)
| | |
(29,775
|
)
| | |
(27,360
|
)
| | |
(96,633
|
)
| | |
(79,828
|
)
| |
Construction real estate
| | |
(6,989
|
)
| | |
(6,008
|
)
| | |
(18,826
|
)
| | |
(21,094
|
)
| | |
(17,136
|
)
| | |
(52,917
|
)
| | |
(94,533
|
)
| |
Residential real estate
| | |
(860
|
)
| | |
(141
|
)
| | |
(8,080
|
)
| | |
(3,562
|
)
| | |
(1,363
|
)
| | |
(12,643
|
)
| | |
(3,326
|
)
| |
Indirect vehicle
| | |
(954
|
)
| | |
(611
|
)
| | |
(553
|
)
| | |
(718
|
)
| | |
(968
|
)
| | |
(2,836
|
)
| | |
(3,199
|
)
| |
Home equity
| | |
(2,061
|
)
| | |
(1,605
|
)
| | |
(5,493
|
)
| | |
(1,907
|
)
| | |
(1,364
|
)
| | |
(11,066
|
)
| | |
(4,632
|
)
| |
Consumer loans
| | |
(285
|
)
| | |
(475
|
)
| | |
(344
|
)
| | |
(544
|
)
| | |
(428
|
)
| | |
(1,648
|
)
| | |
(1,755
|
)
| |
Total charge-offs
| | |
(19,247
|
)
| | |
(20,152
|
)
| | |
(96,630
|
)
| | |
(60,751
|
)
| | |
(57,803
|
)
| | |
(196,780
|
)
| | |
(247,061
|
)
|
Recoveries:
| | | | | | | | | | | | | | | | | | | | | | |
Commercial loans
| | |
634
| | | |
1,413
| | | |
758
| | | |
2,565
| | | |
3,842
| | | |
5,370
| | | |
8,788
| | |
Commercial loans collateralized by assignment
of lease payments (lease loans)
| | |
1
| | | |
5
| | | |
153
| | | |
66
| | | |
26
| | | |
225
| | | |
184
| | |
Commercial real estate loans
| | |
747
| | | |
739
| | | |
312
| | | |
1,534
| | | |
800
| | | |
3,332
| | | |
2,070
| | |
Construction real estate
| | |
3,519
| | | |
681
| | | |
2,364
| | | |
2,026
| | | |
1,672
| | | |
8,590
| | | |
3,170
| | |
Residential real estate
| | |
9
| | | |
7
| | | |
26
| | | |
7
| | | |
127
| | | |
49
| | | |
184
| | |
Indirect vehicle
| | |
378
| | | |
327
| | | |
369
| | | |
325
| | | |
286
| | | |
1,399
| | | |
1,163
| | |
Home equity
| | |
6
| | | |
151
| | | |
19
| | | |
48
| | | |
250
| | | |
224
| | | |
351
| | |
Consumer loans
| | |
67
| | | |
83
| | | |
76
| | | |
373
| | | |
91
| | | |
599
| | | |
96
| | |
Total recoveries
| | |
5,361
| | | |
3,406
| | | |
4,077
| | | |
6,944
| | | |
7,094
| | | |
19,788
| | | |
16,006
| | | | | | | | | | | | | | | | | | | | | | | | |
Total net charge-offs
| | |
(13,886
|
)
| | |
(16,746
|
)
| | |
(92,553
|
)
| | |
(53,807
|
)
| | |
(50,709
|
)
| | |
(176,992
|
)
| | |
(231,055
|
)
| | | | | | | | | | | | | | | | | | | | | | | |
Allowance for credit losses
| | |
135,975
| | | |
141,861
| | | |
147,107
| | | |
178,410
| | | |
192,217
| | | |
135,975
| | | |
192,217
| | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for unfunded credit commitments (1)
| | |
(9,177
|
)
| | |
(13,251
|
)
| | |
(17,050
|
)
| | |
-
| | | |
-
| | | |
(9,177
|
)
| | |
-
| | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses (2)
| |
$
|
126,798
| | |
$
|
128,610
| | |
$
|
130,057
| | |
$
|
178,410
| | |
$
|
192,217
| | |
$
|
126,798
| | |
$
|
192,217
| | | | | | | | | | | | | | | | | | | | | | | | |
Total loans, excluding loans held for sale
| |
$
|
5,966,221
| | |
$
|
5,813,737
| | |
$
|
5,938,029
| | |
$
|
6,367,996
| | |
$
|
6,617,811
| | |
$
|
5,966,221
| | |
$
|
6,617,811
| |
Average loans, excluding loans held for sale
| |
$
|
5,818,425
| | |
$
|
5,827,181
| | |
$
|
6,299,990
| | |
$
|
6,460,508
| | |
$
|
6,723,840
| | |
$
|
6,097,291
| | |
$
|
6,758,776
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratio of allowance for loan losses to total
loans, excluding loans held for sale
| | |
2.13
|
%
| | |
2.21
|
%
| | |
2.19
|
%
| | |
2.80
|
%
| | |
2.90
|
%
| | |
2.13
|
%
| | |
2.90
|
%
|
Ratio of allowance for credit losses to total
loans, excluding loans held for sale, and
unfunded credit commitments
| | |
2.25
|
%
| | |
2.40
|
%
| | |
2.43
|
%
| | |
2.75
|
%
| | |
2.85
|
%
| | |
2.25
|
%
| | |
2.85
|
%
|
Net loan charge-offs to average loans,
excluding loans held for sale (annualized)
| | |
0.95
|
%
| | |
1.14
|
%
| | |
5.89
|
%
| | |
3.38
|
%
| | |
2.99
|
%
| | |
2.90
|
%
| | |
3.42
|
%
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1)
| |
The reserve for unfunded credit commitments
(primarily letters of credit) was reclassified
from the allowance for loan losses to other
liabilities as of June 30, 2011.
|
(2)
| |
Includes $12.7 million and $13.6 million for
unfunded credit commitments at March 31, 2011 and
December 31, 2010, respectively.
| | | |
The activity in the second quarter of 2011 reflects
the previously disclosed sale of certain performing,
sub-performing and non-performing loans, which
resulted in approximately $87 million in charge-offs
and an increase in the provision for losses of
approximately $50 million.
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 (in
thousands):
| | | | | | | | | | | | | | | | | | | |
December 31,
| |
September 30,
| |
June 30,
| |
March 31,
| |
December 31,
| | | |
2011
| |
2011
| |
2011
| |
2011
| |
2010
| | | | | | | | | | | | | | | | | |
General loss reserve
| | |
$
|
102,196
| |
$
|
102,752
| |
$
|
104,002
| |
$
|
126,423
| |
$
|
126,435
|
Specific reserve (1)
| | | |
10,804
| | |
11,416
| | |
12,111
| | |
38,054
| | |
51,826
|
Smaller-balance homogenous loans reserve
| | | |
13,798
| | |
14,442
| | |
13,944
| | |
13,933
| | |
13,956
|
Total allowance for loan losses
| | |
$
|
126,798
| |
$
|
128,610
| |
$
|
130,057
| |
$
|
178,410
| |
$
|
192,217
|
(1)
| |
The specific reserve as of March 31, 2011 and
December 31, 2010 includes reserves on unfunded
credit commitments of approximately $12.7 million
and $13.6 million, respectively. Beginning as of
June 30, 2011, reserves on unfunded credit
commitments are recorded as liabilities.
| | | |
Although management believes that adequate specific
and general loan loss allowances have been
established, actual losses are dependent upon future
events and, as such, further additions to the level
of specific and general loan loss allowances may
become necessary.
INVESTMENT SECURITIES
The following table sets forth the fair value,
amortized cost, and total unrealized gain of our
investment securities, by type (in thousands):
| | | | | | | | | | | | | | | | | |
At December 31,
| |
At September 30,
| |
At June 30,
| |
At March 31,
| |
At December 31,
| | |
2011
| |
2011
| |
2011
| |
2011
| |
2010
| | | | | | | | | | | | | | | | |
Securities available for sale:
| | | | | | | | | | | | | | | |
Fair value
| | | | | | | | | | | | | | | |
Government sponsored agencies and enterprises
| |
$
|
42,401
| |
$
|
56,007
| |
$
|
55,656
| |
$
|
56,971
| |
$
|
19,434
|
States and political subdivisions
| | |
535,660
| | |
394,279
| | |
392,670
| | |
365,481
| | |
364,932
|
Mortgage-backed securities
| | |
1,334,491
| | |
1,421,789
| | |
1,424,302
| | |
1,279,968
| | |
1,197,066
|
Corporate bonds
| | |
5,899
| | |
5,899
| | |
6,019
| | |
6,019
| | |
6,140
|
Equity securities
| | |
10,846
| | |
10,764
| | |
10,435
| | |
10,215
| | |
10,171
|
Total fair value
| |
$
|
1,929,297
| |
$
|
1,888,738
| |
$
|
1,889,082
| |
$
|
1,718,654
| |
$
|
1,597,743
| | | | | | | | | | | | | | | | |
Amortized cost
| | | | | | | | | | | | | | | |
Government sponsored agencies and enterprises
| |
$
|
39,640
| |
$
|
53,016
| |
$
|
54,423
| |
$
|
56,452
| |
$
|
18,766
|
States and political subdivisions
| | |
500,979
| | |
366,651
| | |
371,598
| | |
350,851
| | |
351,274
|
Mortgage-backed securities
| | |
1,308,020
| | |
1,399,801
| | |
1,401,975
| | |
1,258,171
| | |
1,175,021
|
Corporate bonds
| | |
5,899
| | |
5,899
| | |
6,019
| | |
6,019
| | |
6,140
|
Equity securities
| | |
10,457
| | |
10,324
| | |
10,246
| | |
10,169
| | |
10,093
|
Total amortized cost
| |
$
|
1,864,995
| |
$
|
1,835,691
| |
$
|
1,844,261
| |
$
|
1,681,662
| |
$
|
1,561,294
| | | | | | | | | | | | | | | | |
Unrealized gain
| | | | | | | | | | | | | | | |
Government sponsored agencies and enterprises
| |
$
|
2,761
| |
$
|
2,991
| |
$
|
1,233
| |
$
|
519
| |
$
|
668
|
States and political subdivisions
| | |
34,681
| | |
27,628
| | |
21,072
| | |
14,630
| | |
13,658
|
Mortgage-backed securities
| | |
26,471
| | |
21,988
| | |
22,327
| | |
21,797
| | |
22,045
|
Corporate bonds
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
|
Equity securities
| | |
389
| | |
440
| | |
189
| | |
46
| | |
78
|
Total unrealized gain
| |
$
|
64,302
| |
$
|
53,047
| |
$
|
44,821
| |
$
|
36,992
| |
$
|
36,449
| | | | | | | | | | | | | | | | |
Securities held to maturity, at cost:
| | | | | | | | | | | | | | | |
States and political subdivisions
| |
$
|
240,183
| |
$
|
240,839
| |
$
|
-
| |
$
|
-
| |
$
|
-
|
Mortgage-backed securities
| | |
259,100
| | |
258,199
| | |
230,154
| | |
102,206
| | |
-
|
Total amortized cost
| |
$
|
499,283
| |
$
|
499,038
| |
$
|
230,154
| |
$
|
102,206
| |
$
|
-
| | | | | | | | | | | | | | | | |
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):
| | | | | | | | | | | | | | | | | | | | | | | |
December 31,
| |
September 30,
| |
June 30,
| |
March 31,
| |
December 31,
| | | |
2011
| |
2011
| |
2011
| |
2011
| |
2010
| | | | | | |
% of
| | | | |
% of
| | | | |
% of
| | | | |
% of
| | | | |
% of
| | | |
Amount
| |
Total
| |
Amount
| |
Total
| |
Amount
| |
Total
| |
Amount
| |
Total
| |
Amount
| |
Total
|
Low cost deposits:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest bearing deposits
| |
$
|
1,885,694
| |
25%
| |
$
|
1,803,141
| |
23%
| |
$
|
1,776,873
| |
23%
| |
$
|
1,666,868
| |
22%
| |
$
|
1,691,599
| |
21%
| |
Money market and NOW accounts
| | |
2,645,334
| |
34%
| | |
2,722,162
| |
35%
| | |
2,645,953
| |
34%
| | |
2,712,314
| |
34%
| | |
2,776,181
| |
34%
| |
Savings accounts
| | |
753,610
| |
10%
| | |
751,062
| |
10%
| | |
729,222
| |
9%
| | |
718,896
| |
9%
| | |
697,851
| |
8%
|
Total low cost deposits
| | |
5,284,638
| |
69%
| | |
5,276,365
| |
68%
| | |
5,152,048
| |
66%
| | |
5,098,078
| |
65%
| | |
5,165,631
| |
63%
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Certificates of deposit:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Certificates of deposit
| | |
1,925,608
| |
25%
| | |
2,001,210
| |
26%
| | |
2,124,815
| |
28%
| | |
2,326,591
| |
29%
| | |
2,519,117
| |
31%
| |
Brokered deposit accounts
| | |
437,361
| |
6%
| | |
444,332
| |
6%
| | |
441,720
| |
6%
| | |
467,337
| |
6%
| | |
468,210
| |
6%
|
Total certificates of deposit
| | |
2,362,969
| |
31%
| | |
2,445,542
| |
32%
| | |
2,566,535
| |
34%
| | |
2,793,928
| |
35%
| | |
2,987,327
| |
37%
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total deposits
| |
$
|
7,647,607
| |
100%
| |
$
|
7,721,907
| |
100%
| |
$
|
7,718,583
| |
100%
| |
$
|
7,892,006
| |
100%
| |
$
|
8,152,958
| |
100%
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Our deposit mix improved in the quarter.
Approximately 69% of deposits were in lower cost
sources at December 31, 2011 compared to 68% at
September 30, 2011 and 63% at December 31, 2010. Our
ratio of certificates of deposit to total deposits
was 31% at December 31, 2011 compared to 32% at
September 30, 2011 and 37% at December 31, 2010. Our
ratio of noninterest bearing deposits to total
deposits was 25% at December 31, 2011 compared to 23%
at September 30, 2011 and 21% at December 31, 2010.
FORWARD-LOOKING STATEMENTS
When used in this press release and in reports filed
with or furnished to the Securities and Exchange
Commission, in 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 Wall Street Reform and Consumer Protection
Act and regulations adopted thereunder, changes in
federal and/or state tax laws or interpretations
thereof by taxing authorities, changes in laws, rules
or regulations applicable to companies that have
participated in the TARP Capital Purchase Program of
the U.S. Department of the Treasury and other
governmental initiatives affecting the financial
services industry; (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
| | |
(Amounts in thousands)
| | | | | | | | | | | | | | | | | | | | |
December 31,
| |
September 30,
| |
June 30,
| |
March 31,
| |
December 31,
| | |
2011
| |
2011
| |
2011
| |
2011
| |
2010
|
ASSETS
| | | | | | | | | | | | | | | |
Cash and due from banks
| |
$
|
144,228
| | |
$
|
133,755
| | |
$
|
129,942
| | |
$
|
123,794
| | |
$
|
106,726
| |
Interest earning deposits with banks
| | |
100,337
| | | |
347,055
| | | |
513,378
| | | |
504,765
| | | |
737,433
| |
Total cash and cash equivalents
| | |
244,565
| | | |
480,810
| | | |
643,320
| | | |
628,559
| | | |
844,159
| |
Investment securities:
| | | | | | | | | | | | | | | |
Securities available for sale, at fair value
| | |
1,929,297
| | | |
1,888,738
| | | |
1,889,082
| | | |
1,718,654
| | | |
1,597,743
| |
Securities held to maturity, at cost
| | |
499,283
| | | |
499,038
| | | |
230,154
| | | |
102,206
| | | |
-
| |
Non-marketable securities - FHLB and FRB Stock
| | |
80,832
| | | |
80,815
| | | |
80,815
| | | |
80,186
| | | |
80,186
| |
Total investment securities
| | |
2,509,412
| | | |
2,468,591
| | | |
2,200,051
| | | |
1,901,046
| | | |
1,677,929
| |
Loans held for sale
| | |
4,727
| | | |
-
| | | |
-
| | | |
11,533
| | | |
-
| |
Loans:
| | | | | | | | | | | | | | | |
Total loans excluding covered loans
| | |
5,288,451
| | | |
5,095,171
| | | |
5,182,359
| | | |
5,590,362
| | | |
5,805,481
| |
Covered loans
| | |
677,770
| | | |
718,566
| | | |
755,670
| | | |
777,634
| | | |
812,330
| |
Total loans
| | |
5,966,221
| | | |
5,813,737
| | | |
5,938,029
| | | |
6,367,996
| | | |
6,617,811
| |
Less allowance for loan losses
| | |
126,798
| | | |
128,610
| | | |
130,057
| | | |
178,410
| | | |
192,217
| |
Net loans
| | |
5,839,423
| | | |
5,685,127
| | | |
5,807,972
| | | |
6,189,586
| | | |
6,425,594
| |
Lease investments, net
| | |
135,490
| | | |
133,345
| | | |
139,391
| | | |
129,182
| | | |
126,906
| |
Premises and equipment, net
| | |
210,705
| | | |
211,062
| | | |
210,901
| | | |
209,257
| | | |
210,886
| |
Cash surrender value of life insurance
| | |
125,309
| | | |
124,364
| | | |
126,938
| | | |
126,014
| | | |
125,046
| |
Goodwill, net
| | |
387,069
| | | |
387,069
| | | |
387,069
| | | |
387,069
| | | |
387,069
| |
Other intangibles, net
| | |
29,494
| | | |
30,904
| | | |
32,318
| | | |
33,734
| | | |
35,159
| |
Other real estate owned
| | |
78,452
| | | |
87,469
| | | |
88,185
| | | |
80,107
| | | |
71,476
| |
Other real estate owned related to FDIC
transactions
| | |
60,363
| | | |
69,311
| | | |
69,920
| | | |
61,461
| | | |
44,745
| |
FDIC indemnification asset
| | |
65,604
| | | |
94,542
| | | |
119,837
| | | |
148,314
| | | |
215,460
| |
Other assets
| | |
142,459
| | | |
149,767
| | | |
151,833
| | | |
165,481
| | | |
155,935
| |
Total assets
| |
$
|
9,833,072
| | |
$
|
9,922,361
| | |
$
|
9,977,735
| | |
$
|
10,071,343
| | |
$
|
10,320,364
| |
LIABILITIES AND STOCKHOLDERS' EQUITY
| | | | | | | | | | | | | | | |
Liabilities
| | | | | | | | | | | | | | | |
Deposits:
| | | | | | | | | | | | | | | |
Noninterest bearing
| |
$
|
1,885,694
| | |
$
|
1,803,141
| | |
$
|
1,776,873
| | |
$
|
1,666,868
| | |
$
|
1,691,599
| |
Interest bearing
| | |
5,761,913
| | | |
5,918,766
| | | |
5,941,710
| | | |
6,225,138
| | | |
6,461,359
| |
Total deposits
| | |
7,647,607
| | | |
7,721,907
| | | |
7,718,583
| | | |
7,892,006
| | | |
8,152,958
| |
Short-term borrowings
| | |
219,954
| | | |
257,418
| | | |
235,733
| | | |
295,180
| | | |
268,844
| |
Long-term borrowings
| | |
266,264
| | | |
274,378
| | | |
275,559
| | | |
275,327
| | | |
285,073
| |
Junior subordinated notes issued to capital
trusts
| | |
158,538
| | | |
158,546
| | | |
158,554
| | | |
158,563
| | | |
158,571
| |
Accrued expenses and other liabilities
| | |
147,682
| | | |
141,490
| | | |
243,962
| | | |
100,031
| | | |
110,132
| |
Total liabilities
| | |
8,440,045
| | | |
8,553,739
| | | |
8,632,391
| | | |
8,721,107
| | | |
8,975,578
| |
Stockholders' Equity
| | | | | | | | | | | | | | | |
Preferred stock
| | |
194,719
| | | |
194,562
| | | |
194,407
| | | |
194,255
| | | |
194,104
| |
Common stock
| | |
548
| | | |
548
| | | |
546
| | | |
546
| | | |
546
| |
Additional paid-in capital
| | |
731,248
| | | |
730,056
| | | |
728,244
| | | |
726,604
| | | |
725,400
| |
Retained earnings
| | |
427,956
| | | |
411,659
| | | |
396,081
| | | |
406,594
| | | |
402,810
| |
Accumulated other comprehensive income
| | |
39,150
| | | |
32,322
| | | |
27,322
| | | |
22,566
| | | |
22,233
| |
Treasury stock
| | |
(3,044
|
)
| | |
(3,010
|
)
| | |
(3,771
|
)
| | |
(2,845
|
)
| | |
(2,828
|
)
|
Controlling interest stockholders' equity
| | |
1,390,577
| | | |
1,366,137
| | | |
1,342,829
| | | |
1,347,720
| | | |
1,342,265
| |
Noncontrolling interest
| | |
2,450
| | | |
2,485
| | | |
2,515
| | | |
2,516
| | | |
2,521
| |
Total stockholders' equity
| | |
1,393,027
| | | |
1,368,622
| | | |
1,345,344
| | | |
1,350,236
| | | |
1,344,786
| |
Total liabilities and stockholders' equity
| |
$
|
9,833,072
| | |
$
|
9,922,361
| | |
$
|
9,977,735
| | |
$
|
10,071,343
| | |
$
|
10,320,364
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | |
MB FINANCIAL, INC. & SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF INCOME
|
(Amounts in thousands, except per share data)
(Unaudited)
| | | | | | | | | | | | | |
Three Months Ended
| |
Year Ended
| | |
December 31,
| |
September 30,
| |
June 30,
| |
March 31,
| |
December 31,
| |
December 31,
| |
December 31,
| | |
2011
| |
2011
| |
2011
| |
2011
| |
2010
| |
2011
| |
2010
|
Interest income:
| | | | | | | | | | | | | | |
Loans
| |
$
|
75,466
| | |
$
|
78,046
| | |
$
|
84,114
| | |
$
|
87,167
| | |
$
|
92,701
| | |
$
|
324,793
| | |
$
|
364,484
| |
Investment securities:
| | | | | | | | | | | | | | |
Taxable
| | |
11,608
| | | |
11,699
| | | |
10,290
| | | |
7,752
| | | |
7,001
| | | |
41,349
| | | |
50,541
| |
Nontaxable
| | |
6,178
| | | |
4,299
| | | |
3,443
| | | |
3,345
| | | |
3,367
| | | |
17,265
| | | |
13,585
| |
Federal funds sold
| | |
-
| | | |
-
| | | |
-
| | | |
-
| | | |
-
| | | |
-
| | | |
2
| |
Other interest earning accounts
| | |
181
| | | |
244
| | | |
258
| | | |
470
| | | |
504
| | | |
1,153
| | | |
1,028
| |
Total interest income
| | |
93,433
| | | |
94,288
| | | |
98,105
| | | |
98,734
| | | |
103,573
| | | |
384,560
| | | |
429,640
| |
Interest expense:
| | | | | | | | | | | | | | |
Deposits
| | |
9,569
| | | |
10,207
| | | |
11,746
| | | |
13,359
| | | |
15,598
| | | |
44,881
| | | |
75,850
| |
Short-term borrowings
| | |
189
| | | |
204
| | | |
239
| | | |
217
| | | |
255
| | | |
849
| | | |
1,145
| |
Long-term borrowings and junior subordinated
notes
| | |
3,430
| | | |
3,461
| | | |
3,713
| | | |
2,953
| | | |
3,065
| | | |
13,557
| | | |
12,873
| |
Total interest expense
| | |
13,188
| | | |
13,872
| | | |
15,698
| | | |
16,529
| | | |
18,918
| | | |
59,287
| | | |
89,868
| |
Net interest income
| | |
80,245
| | | |
80,416
| | | |
82,407
| | | |
82,205
| | | |
84,655
| | | |
325,273
| | | |
339,772
| |
Provision for credit losses
| | |
8,000
| | | |
11,500
| | | |
61,250
| | | |
40,000
| | | |
49,000
| | | |
120,750
| | | |
246,200
| |
Net interest income after provision for credit
losses
| | |
72,245
| | | |
68,916
| | | |
21,157
| | | |
42,205
| | | |
35,655
| | | |
204,523
| | | |
93,572
| |
Other income:
| | | | | | | | | | | | | | |
Loan service fees
| | |
1,601
| | | |
2,159
| | | |
2,812
| | | |
1,126
| | | |
1,532
| | | |
7,698
| | | |
6,517
| |
Deposit service fees
| | |
10,085
| | | |
9,932
| | | |
9,023
| | | |
10,030
| | | |
9,920
| | | |
39,070
| | | |
38,934
| |
Lease financing, net
| | |
7,801
| | | |
6,494
| | | |
6,861
| | | |
5,783
| | | |
7,185
| | | |
26,939
| | | |
21,853
| |
Brokerage fees
| | |
1,577
| | | |
1,273
| | | |
1,615
| | | |
1,419
| | | |
1,231
| | | |
5,884
| | | |
5,012
| |
Trust and asset management fees
| | |
4,166
| | | |
4,272
| | | |
4,455
| | | |
4,431
| | | |
4,243
| | | |
17,324
| | | |
15,037
| |
Net gain (loss) on sale of investment
securities
| | |
411
| | | |
-
| | | |
232
| | | |
(3
|
)
| | |
(4
|
)
| | |
640
| | | |
18,648
| |
Increase in cash surrender value of life
insurance
| | |
944
| | | |
1,014
| | | |
1,451
| | | |
968
| | | |
930
| | | |
4,377
| | | |
3,516
| |
Net (loss) gain on sale of other assets
| | |
(87
|
)
| | |
-
| | | |
13
| | | |
357
| | | |
419
| | | |
283
| | | |
630
| |
Acquisition related gains
| | |
-
| | | |
-
| | | |
-
| | | |
-
| | | |
-
| | | |
-
| | | |
62,649
| |
Accretion of FDIC indemnification asset
| | |
683
| | | |
985
| | | |
1,339
| | | |
1,831
| | | |
3,009
| | | |
4,838
| | | |
9,678
| |
Card fees
| | |
1,096
| | | |
2,071
| | | |
2,062
| | | |
1,788
| | | |
2,287
| | | |
7,017
| | | |
7,057
| |
Net loss recognized on other real estate owned
| | |
(5,478
|
)
| | |
(3,118
|
)
| | |
(4,645
|
)
| | |
(372
|
)
| | |
(2,124
|
)
| | |
(13,613
|
)
| | |
(9,285
|
)
|
Other operating income
| | |
1,652
| | | |
1,285
| | | |
3,927
| | | |
1,785
| | | |
2,167
| | | |
8,649
| | | |
5,510
| |
Total other income
| | |
24,451
| | | |
26,367
| | | |
29,145
| | | |
29,143
| | | |
30,795
| | | |
109,106
| | | |
185,756
| |
Other expense:
| | | | | | | | | | | | | | |
Salaries and employee benefits
| | |
39,846
| | | |
38,422
| | | |
37,815
| | | |
37,775
| | | |
36,399
| | | |
153,858
| | | |
144,349
| |
Occupancy and equipment expense
| | |
8,498
| | | |
9,092
| | | |
8,483
| | | |
9,394
| | | |
7,938
| | | |
35,467
| | | |
34,845
| |
Computer services and telecommunication expense
| | |
4,382
| | | |
3,488
| | | |
3,570
| | | |
3,445
| | | |
3,264
| | | |
14,885
| | | |
14,615
| |
Advertising and marketing expense
| | |
1,831
| | | |
1,740
| | | |
1,748
| | | |
1,719
| | | |
1,573
| | | |
7,038
| | | |
6,465
| |
Professional and legal expense
| | |
1,422
| | | |
1,647
| | | |
1,853
| | | |
1,225
| | | |
1,718
| | | |
6,147
| | | |
5,803
| |
Brokerage fee expense
| | |
137
| | | |
363
| | | |
574
| | | |
483
| | | |
448
| | | |
1,557
| | | |
1,926
| |
Other intangible amortization expense
| | |
1,410
| | | |
1,414
| | | |
1,416
| | | |
1,425
| | | |
1,632
| | | |
5,665
| | | |
6,214
| |
FDIC insurance premiums
| | |
2,662
| | | |
2,272
| | | |
3,502
| | | |
3,428
| | | |
3,930
| | | |
11,864
| | | |
15,600
| |
Branch impairment charges
| | |
594
| | | |
-
| | | |
-
| | | |
1,000
| | | |
-
| | | |
1,594
| | | |
-
| |
Other real estate expense, net
| | |
1,464
| | | |
1,181
| | | |
1,251
| | | |
398
| | | |
858
| | | |
4,294
| | | |
2,694
| |
Other operating expenses
| | |
7,187
| | | |
6,989
| | | |
6,516
| | | |
6,572
| | | |
6,855
| | | |
27,264
| | | |
26,265
| |
Total other expense
| | |
69,433
| | | |
66,608
| | | |
66,728
| | | |
66,864
| | | |
64,615
| | | |
269,633
| | | |
258,776
| |
Income (loss) before income taxes
| | |
27,263
| | | |
28,675
| | | |
(16,426
|
)
| | |
4,484
| | | |
1,835
| | | |
43,996
| | | |
20,552
| |
Income taxes
| | |
7,810
| | | |
8,978
| | | |
(9,060
|
)
| | |
(2,460
|
)
| | |
(1,358
|
)
| | |
5,268
| | | |
24
| |
Net income (loss)
| | |
19,453
| | | |
19,697
| | | |
(7,366
|
)
| | |
6,944
| | | |
3,193
| | | |
38,728
| | | |
20,528
| |
Preferred stock dividends and discount
accretion
| | |
2,606
| | | |
2,605
| | | |
2,602
| | | |
2,601
| | | |
2,598
| | | |
10,414
| | | |
10,382
| |
Net income (loss) available to common
stockholders
| |
$
|
16,847
| | |
$
|
17,092
| | |
$
|
(9,968
|
)
| |
$
|
4,343
| | |
$
|
595
| | |
$
|
28,314
| | |
$
|
10,146
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Three Months Ended
| |
Year Ended
| | |
December 31,
| |
September 30,
| |
June 30,
| |
March 31,
| |
December 31,
| |
December 31,
| |
December 31,
| | |
2011
| |
2011
| |
2011
| |
2011
| |
2010
| |
2011
| |
2010
|
Common share data:
| | | | | | | | | | | | | | | | | | | | | |
Net income (loss) per basic common share
| |
$
|
0.36
| | |
$
|
0.36
| | |
$
|
(0.14
|
)
| |
$
|
0.13
| | |
$
|
0.06
| | |
$
|
0.71
| | |
$
|
0.39
| |
Impact of preferred stock dividends on basic
earnings (loss) per common share
| | |
(0.05
|
)
| | |
(0.04
|
)
| | |
(0.04
|
)
| | |
(0.05
|
)
| | |
(0.05
|
)
| | |
(0.19
|
)
| | |
(0.20
|
)
|
Basic earnings (loss) per common share
| | |
0.31
| | | |
0.32
| | | |
(0.18
|
)
| | |
0.08
| | | |
0.01
| | | |
0.52
| | | |
0.19
| | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) per common share
| | |
0.36
| | | |
0.36
| | | |
(0.14
|
)
| | |
0.13
| | | |
0.06
| | | |
0.71
| | | |
0.39
| |
Impact of preferred stock dividends on diluted
earnings (loss) per common share
| | |
(0.05
|
)
| | |
(0.05
|
)
| | |
(0.04
|
)
| | |
(0.05
|
)
| | |
(0.05
|
)
| | |
(0.19
|
)
| | |
(0.20
|
)
|
Diluted earnings (loss) per common share
| | |
0.31
| | | |
0.31
| | | |
(0.18
|
)
| | |
0.08
| | | |
0.01
| | | |
0.52
| | | |
0.19
| | | | | | | | | | | | | | | | | | | | | | | |
Weighted average common shares outstanding
| | |
54,140,646
| | | |
54,121,156
| | | |
54,002,979
| | | |
53,961,176
| | | |
53,572,157
| | | |
54,057,158
| | | |
52,724,715
| |
Diluted weighted average common shares
outstanding
| | |
54,360,178
| | | |
54,323,320
| | | |
54,002,979
| | | |
54,254,876
| | | |
53,790,047
| | | |
54,337,280
| | | |
53,035,047
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Three Months Ended
| |
Year Ended
| | |
December 31,
| |
September 30,
| |
June 30,
| |
March 31,
| |
December 31,
| |
December 31,
| |
December 31,
| | |
2011
| |
2011
| |
2011
| |
2011
| |
2010
| |
2011
| |
2010
|
Performance Ratios:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Annualized return on average assets
| | |
0.78
|
%
| | |
0.80
|
%
| | |
(0.30
|
)
|
%
| | |
0.28
|
%
| | |
0.12
|
%
| | |
0.39
|
%
| | |
0.20
|
%
|
Annualized return on average common equity
| | |
5.66
| | | |
5.86
| | | |
(3.43
|
)
| | | |
1.53
| | | |
0.21
| | | |
2.43
| | | |
0.89
| |
Annualized cash return on average tangible
common equity(1)
| | |
9.09
| | | |
9.52
| | | |
(4.80
|
)
| | | |
2.88
| | | |
0.89
| | | |
4.23
| | | |
1.96
| |
Net interest rate spread
| | |
3.71
| | | |
3.71
| | | |
3.71
| | | | |
3.68
| | | |
3.63
| | | |
3.71
| | | |
3.61
| |
Cost of funds(2)
| | |
0.63
| | | |
0.66
| | | |
0.74
| | | | |
0.77
| | | |
0.83
| | | |
0.70
| | | |
0.99
| |
Efficiency ratio(3)
| | |
59.94
| | | |
58.69
| | | |
56.63
| | | | |
57.45
| | | |
53.49
| | | |
58.17
| | | |
55.57
| |
Annualized net non-interest expense to average
assets(4)
| | |
1.56
| | | |
1.48
| | | |
1.38
| | | | |
1.44
| | | |
1.20
| | | |
1.46
| | | |
1.37
| |
Pre-tax pre-provision operating earnings to
risk-weighted assets(5)
| | |
2.87
| | | |
3.03
| | | |
3.30
| | | | |
3.00
| | | |
3.26
| | | |
3.04
| | | |
3.05
| |
Pre-tax pre-provision operating earnings to
average assets(5)
| | |
1.85
| | | |
1.91
| | | |
2.05
| | | | |
1.93
| | | |
2.11
| | | |
1.94
| | | |
1.97
| |
Net interest margin
| | |
3.71
| | | |
3.74
| | | |
3.79
| | | | |
3.76
| | | |
3.72
| | | |
3.75
| | | |
3.72
| |
Tax equivalent effect
| | |
0.20
| | | |
0.16
| | | |
0.13
| | | | |
0.12
| | | |
0.11
| | | |
0.15
| | | |
0.11
| |
Net interest margin - fully tax equivalent
basis(6)
| | |
3.91
| | | |
3.90
| | | |
3.92
| | | | |
3.88
| | | |
3.83
| | | |
3.90
| | | |
3.83
| |
Asset Quality Ratios:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Non-performing loans(7) to total loans
| | |
2.17
|
%
| | |
2.42
|
%
| | |
2.54
| |
%
| | |
5.01
|
%
| | |
5.48
|
%
| | |
2.17
|
%
| | |
5.48
|
%
|
Non-performing assets(7) to total assets
| | |
2.12
| | | |
2.30
| | | |
2.40
| | | | |
3.96
| | | |
4.21
| | | |
2.12
| | | |
4.21
| |
Allowance for loan losses to non-performing
loans(7)
| | |
98.00
| | | |
91.23
| | | |
86.12
| | | | |
55.94
| | | |
53.03
| | | |
98.00
| | | |
53.03
| |
Allowance for loan losses to total loans
| | |
2.13
| | | |
2.21
| | | |
2.19
| | | | |
2.80
| | | |
2.90
| | | |
2.13
| | | |
2.90
| |
Allowance for credit losses to total loans and
unfunded credit commitments
| | |
2.25
| | | |
2.40
| | | |
2.43
| | | | |
2.75
| | | |
2.85
| | | |
2.25
| | | |
2.85
| |
Net loan charge-offs to average loans
(annualized)
| | |
0.95
| | | |
1.14
| | | |
5.89
| | | | |
3.38
| | | |
2.99
| | | |
2.90
| | | |
3.42
| |
Capital Ratios:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Tangible equity to tangible assets(8)
| | |
10.47
|
%
| | |
10.10
|
%
| | |
9.79
| |
%
| | |
9.74
|
%
| | |
9.43
|
%
| | |
10.47
|
%
| | |
9.43
|
%
|
Tangible common equity to risk weighted assets(9)
| | |
12.48
| | | |
12.42
| | | |
11.97
| | | | |
11.36
| | | |
10.94
| | | |
12.48
| | | |
10.94
| |
Tangible common equity to tangible assets(10)
| | |
8.40
| | | |
8.06
| | | |
7.76
| | | | |
7.73
| | | |
7.47
| | | |
8.40
| | | |
7.47
| |
Book value per common share(11)
| |
$
|
21.92
| | |
$
|
21.48
| | |
$
|
21.14
| | | |
$
|
21.24
| | |
$
|
21.14
| | |
$
|
21.92
| | |
$
|
21.14
| | | | |
7.43
| | | |
7.45
| | | |
7.49
| | | | |
7.52
| | | |
7.53
| | | |
7.43
| | | |
7.53
| |
Tangible book value per common share(12)
| | |
14.49
| | | |
14.03
| | | |
13.64
| | | | |
13.73
| | | |
13.60
| | | |
14.49
| | | |
13.60
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total capital (to risk-weighted assets)
| | |
19.41
|
%
| | |
19.61
|
%
| | |
19.18
| |
%
| | |
18.33
|
%
| | |
17.75
|
%
| | |
19.41
|
%
| | |
17.75
|
%
|
Tier 1 capital (to risk-weighted assets)
| | |
17.36
| | | |
17.54
| | | |
17.11
| | | | |
16.31
| | | |
15.75
| | | |
17.36
| | | |
15.75
| |
Tier 1 capital (to average assets)
| | |
11.73
| | | |
11.59
| | | |
11.16
| | | | |
11.00
| | | |
10.66
| | | |
11.73
| | | |
10.66
| |
Tier 1 common capital (to risk-weighted assets)
| | |
11.87
| | | |
11.90
| | | |
11.50
| | | | |
11.01
| | | |
10.61
| | | |
11.87
| | | |
10.61
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(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 other
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 other 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 net income before taxes, on a fully tax
equivalent basis, excluding loan loss provision
expense, non-core other income items, and
non-core other expense items, including tax
equivalent adjustment on the increase in cash
surrender value of life insurance divided by
risk-weighted assets or average assets.
|
(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 pre-tax, pre-provision
operating earnings; core other income, core other
expense, non-core other 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, ratio of
annualized net non-interest expense to average
assets, ratio of pre-tax, pre-provision operating
earnings to risk-weighted assets and ratio of
pre-tax, pre-provision operating earnings to average
assets, with net gains and losses on securities
available for sale, net gains and losses on sale of
other assets, net gains and losses on other real
estate owned, net gain on sale of loans held for
sale, acquisition related gains and increase
(decrease) in market value of assets held in trust
for deferred compensation excluded from the
non-interest income components of these ratios,
impairment charges and increase (decrease) in market
value of assets held in trust for deferred
compensation excluded from the non-interest expense
components of these ratios, and the tax equivalent
adjustment for tax-exempt interest income and
increase in cash surrender value of life insurance
included in the net interest income and non-interest
income components of these ratios; 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 pre-tax, pre-provision
operating earnings are a useful measure in assessing
our core operating performance, particularly during
times of economic stress. In recent periods, our
results of operations have been negatively impacted
by adverse economic conditions, as seen in our
elevated levels of loan charge-offs and provision for
credit losses. Management believes that measuring
earnings before the impact of the provision for loan
losses makes our financial data more comparable
between reporting periods so that investors can
better understand our operating performance trends.
Management also believes that this is a standard
figure used in the banking industry to measure
performance.
Management believes that core and non-core other
income and other expense are useful in assessing our
core operating performance and in understanding the
primary drivers of our other 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 securities available for sale, net
gains and losses on sale of other assets, net gains
and losses on other real estate owned, net gain on
sale of loans held for sale, acquisition-related
gains and increase (decrease) in market value of
assets held in trust for deferred compensation from
the non-interest income components, and excluding
impairment changes and increase (decrease) in market
value of assets held in trust for deferred
compensation from the non-interest expense
components, of the efficiency ratio, the ratio of
annualized net non-interest expense to average
assets, the ratio of pre-tax, pre-provision operating
earnings to risk-weighted assets and the ratio of
pre-tax, pre-provision operating earnings 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.
The following table presents a reconciliation of
tangible equity to equity (in thousands):
| | | | | | | | | | | | | | | | | | | |
December 31,
| |
September 30,
| |
June 30,
| |
March 31,
| |
December 31,
| | | |
2011
| |
2011
| |
2011
| |
2011
| |
2010
|
Stockholders' equity - as reported
| |
$
|
1,393,027
| |
$
|
1,368,622
| |
$
|
1,345,344
| |
$
|
1,350,236
| |
$
|
1,344,786
| |
Less: goodwill
| | |
387,069
| | |
387,069
| | |
387,069
| | |
387,069
| | |
387,069
| |
Less: other intangible, net of tax benefit
| | |
19,171
| | |
20,088
| | |
21,007
| | |
21,927
| | |
22,853
|
Tangible equity
| |
$
|
986,787
| |
$
|
961,465
| |
$
|
937,268
| |
$
|
941,240
| |
$
|
934,864
| | | | | | | | | | | | | | | | |
The following table presents a reconciliation of
tangible assets to total assets (in thousands):
| | | | | | | | | | | | | | |
December 31,
| |
September 30,
| |
June 30,
| |
March 31,
| |
December 31,
| | | |
2011
| |
2011
| |
2011
| |
2011
| |
2010
|
Total assets - as reported
| |
$
|
9,833,072
| |
$
|
9,922,361
| |
$
|
9,977,735
| |
$
|
10,071,343
| |
$
|
10,320,364
| |
Less: goodwill
| | |
387,069
| | |
387,069
| | |
387,069
| | |
387,069
| | |
387,069
| |
Less: other intangible, net of tax benefit
| | |
19,171
| | |
20,088
| | |
21,007
| | |
21,927
| | |
22,853
|
Tangible assets
| |
$
|
9,426,832
| |
$
|
9,515,204
| |
$
|
9,569,659
| |
$
|
9,662,347
| |
$
|
9,910,442
| | | | | | | | | | | | | | | | |
The following table presents a reconciliation of
tangible common equity to stockholders' common equity
(in thousands):
| | | | | | | | | | | | | | |
December 31,
| |
September 30,
| |
June 30,
| |
March 31,
| |
December 31,
| | | |
2011
| |
2011
| |
2011
| |
2011
| |
2010
|
Common stockholders' equity - as reported
| |
$
|
1,198,308
| |
$
|
1,174,060
| |
$
|
1,150,937
| |
$
|
1,155,981
| |
$
|
1,150,682
| |
Less: goodwill
| | |
387,069
| | |
387,069
| | |
387,069
| | |
387,069
| | |
387,069
| |
Less: other intangible, net of tax benefit
| | |
19,171
| | |
20,088
| | |
21,007
| | |
21,927
| | |
22,853
|
Tangible common equity
| |
$
|
792,068
| |
$
|
766,903
| |
$
|
742,861
| |
$
|
746,985
| |
$
|
740,760
| | | | | | | | | | | | | | | | |
The following table presents a reconciliation of
average tangible common equity to average common
stockholders' equity (in thousands):
| | | | | | | | | | | | | | | | | | | | | |
Three Months Ended
| |
Year Ended
| | | |
December 31,
| |
September 30,
| |
June 30,
| |
March 31,
| |
December 31,
| |
December 31,
| |
December 31,
| | | |
2011
| |
2011
| |
2011
| |
2011
| |
2010
| |
2011
| |
2010
|
Average common stockholders' equity - as
reported
| |
$
|
1,181,820
| |
$
|
1,158,119
| |
$
|
1,165,022
| |
$
|
1,152,119
| |
$
|
1,147,581
| |
$
|
1,164,316
| |
$
|
1,135,189
| |
Less: average goodwill
| | |
387,069
| | |
387,069
| | |
387,069
| | |
387,069
| | |
387,069
| | |
387,069
| | |
387,069
| |
Less: average other intangible assets, net of tax
benefit
| | |
19,494
| | |
20,414
| | |
21,331
| | |
22,254
| | |
23,236
| | |
20,865
| | |
23,154
|
Average tangible common equity
| |
$
|
775,257
| |
$
|
750,636
| |
$
|
756,622
| |
$
|
742,796
| |
$
|
737,276
| |
$
|
756,382
| |
$
|
724,966
| | | | | | | | | | | | | | | | | | | | | | |
The following table presents a reconciliation of net
cash flow available to common stockholders to net
income (loss) available to common stockholders (in
thousands):
| | | | | | | | | | | | | | | | | | | | | |
Three Months Ended
| |
Year Ended
| | | |
December 31,
| |
September 30,
| |
June 30,
| |
March 31,
| |
December 31,
| |
December 31,
| |
December 31,
| | | |
2011
| |
2011
| |
2011
| |
2011
| |
2010
| |
2011
| |
2010
| | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) available to common
stockholders - as reported
| |
$
|
16,847
| |
$
|
17,092
| |
$
|
(9,968
|
)
| |
$
|
4,343
| |
$
|
595
| |
$
|
28,314
| |
$
|
10,146
| |
Add: other intangible amortization expense, net
of tax benefit
| | |
917
| | |
919
| | |
920
| | | |
926
| | |
1,062
| | |
3,682
| | |
4,039
|
Net cash flow available to common stockholders
| |
$
|
17,764
| |
$
|
18,011
| |
$
|
(9,048
|
)
| |
$
|
5,269
| |
$
|
1,657
| |
$
|
31,996
| |
$
|
14,185
| | | | | | | | | | | | | | | | | | | | | | | |
The following table presents a reconciliation of Tier
1 common capital to Tier 1 capital (in thousands):
| | | | | | | | | | | | | | | | | | | |
December 31,
| |
September 30,
| |
June 30,
| |
March 31,
| |
December 31,
| | | |
2011
| |
2011
| |
2011
| |
2011
| |
2010
|
Tier 1 capital - as reported
| |
$
|
1,101,538
| |
$
|
1,083,020
| |
$
|
1,061,482
| |
$
|
1,072,537
| |
$
|
1,066,538
| |
Less: preferred stock
| | |
194,719
| | |
194,562
| | |
194,407
| | |
194,255
| | |
194,104
| |
Less: qualifying trust preferred securities
| | |
153,787
| | |
153,795
| | |
153,803
| | |
153,812
| | |
153,820
|
Tier 1 common capital
| |
$
|
753,032
| |
$
|
734,663
| |
$
|
713,272
| |
$
|
724,470
| |
$
|
718,614
| | | | | | | | | | | | | | | | |
Efficiency Ratio Calculation (Dollars in Thousands)
| | | | | | | | | | | | | | | | | | | | | |
Three Months Ended
| |
Year Ended
| | | |
December 31,
| |
September 30,
| |
June 30,
| |
March 31,
| |
December 31,
| |
December 31,
| |
December 31,
| | | |
2011
| |
2011
| |
2011
| |
2011
| |
2010
| |
2011
| |
2010
|
Non-interest expense
| |
$
|
69,433
| | |
$
|
66,608
| | |
$
|
66,728
| | |
$
|
66,864
| | |
$
|
64,615
| | |
$
|
269,633
| | |
$
|
258,776
| |
Adjustment for impairment charges
| | |
594
| | | |
-
| | | |
-
| | | |
1,000
| | | |
-
| | | |
1,594
| | | |
-
| |
Adjustment for increase (decrease) in market
value of assets held in trust for deferred
compensation
| | |
20
| | | |
(405
|
)
| | |
158
| | | |
187
| | | |
597
| | | |
(40
|
)
| | |
562
| | |
Non-interest expense - as adjusted
| |
$
|
68,819
| | |
$
|
67,013
| | |
$
|
66,570
| | |
$
|
65,677
| | |
$
|
64,018
| | |
$
|
268,079
| | |
$
|
258,214
| | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income
| |
$
|
80,245
| | |
$
|
80,416
| | |
$
|
82,407
| | |
$
|
82,205
| | |
$
|
84,655
| | |
$
|
325,273
| | |
$
|
339,772
| |
Tax equivalent adjustment
| | |
4,468
| | | |
3,320
| | | |
2,775
| | | |
2,625
| | | |
2,609
| | | |
13,188
| | | |
10,458
| |
Net interest income on a fully tax equivalent
basis
| | |
84,713
| | | |
83,736
| | | |
85,182
| | | |
84,830
| | | |
87,264
| | | |
338,461
| | | |
350,230
| |
Tax equivalent adjustment on the increase in
cash surrender value of life insurance
| | |
508
| | | |
546
| | | |
781
| | | |
521
| | | |
501
| | | |
2,357
| | | |
1,893
| |
Plus other income
| | |
24,451
| | | |
26,367
| | | |
29,145
| | | |
29,143
| | | |
30,795
| | | |
109,106
| | | |
185,756
| |
Less net losses on other real estate owned
| | |
(5,478
|
)
| | |
(3,118
|
)
| | |
(4,645
|
)
| | |
(372
|
)
| | |
(2,124
|
)
| | |
(13,613
|
)
| | |
(9,284
|
)
|
Less net gains (losses) on securities available
for sale
| | |
411
| | | |
-
| | | |
232
| | | |
(3
|
)
| | |
(4
|
)
| | |
640
| | | |
18,648
| |
Less net (losses) gains on sale of other assets
| | |
(87
|
)
| | |
-
| | | |
13
| | | |
357
| | | |
419
| | | |
283
| | | |
630
| |
Less net gain on sale of loans held for sale
| | |
-
| | | |
-
| | | |
1,790
| | | |
-
| | | |
-
| | | |
1,790
| | | |
-
| |
Less acquisition related gains
| | |
-
| | | |
-
| | | |
-
| | | |
-
| | | |
-
| | | |
-
| | | |
62,649
| |
Less increase (decrease) in market value of
assets held in trust for deferred compensation
| | |
20
| | | |
(405
|
)
| | |
158
| | | |
187
| | | |
597
| | | |
(40
|
)
| | |
562
| | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income plus non-interest income - as
adjusted
| |
$
|
114,806
| | |
$
|
114,172
| | |
$
|
117,560
| | |
$
|
114,325
| | |
$
|
119,672
| | |
$
|
460,864
| | |
$
|
464,674
| | | | | | | | | | | | | | | | | | | | | | | | |
Efficiency ratio
| | |
59.94
|
%
| | |
58.69
|
%
| | |
56.63
|
%
| | |
57.45
|
%
| | |
53.49
|
%
| | |
58.17
|
%
| | |
55.57
|
%
| | | | | | | | | | | | | | | | | | | | | | | |
Efficiency ratio (without adjustments)
| | |
66.32
|
%
| | |
62.38
|
%
| | |
59.82
|
%
| | |
60.05
|
%
| | |
55.97
|
%
| | |
62.07
|
%
| | |
49.24
|
%
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Annualized Net Non-interest Expense to Average Assets
Calculation (Dollars in Thousands)
| | | | | | | | | | | | | | | | | | | | | |
Three Months Ended
| |
Year Ended
| | | |
December 31,
| |
September 30,
| |
June 30,
| |
March 31,
| |
December 31,
| |
December 31,
| |
December 31,
| | | |
2011
| |
2011
| |
2011
| |
2011
| |
2010
| |
2011
| |
2010
|
Non-interest expense
| |
$
|
69,433
| | |
$
|
66,608
| | |
$
|
66,728
| | |
$
|
66,864
| | |
$
|
64,615
| | |
$
|
269,633
| | |
$
|
258,776
| |
Adjustment for impairment charges
| | |
594
| | | |
-
| | | |
-
| | | |
1,000
| | | |
-
| | | |
1,594
| | | |
-
| |
Adjustment for increase (decrease) in market
value of assets held in trust for deferred
compensation
| | |
20
| | | |
(405
|
)
| | |
158
| | | |
187
| | | |
597
| | | |
(40
|
)
| | |
562
| | |
Non-interest expense - as adjusted
| | |
68,819
| | | |
67,013
| | | |
66,570
| | | |
65,677
| | | |
64,018
| | | |
268,079
| | | |
258,214
| | | | | | | | | | | | | | | | | | | | | | | | |
Other income
| | |
24,451
| | | |
26,367
| | | |
29,145
| | | |
29,143
| | | |
30,795
| | | |
109,106
| | | |
185,756
| |
Less net losses on other real estate owned
| | |
(5,478
|
)
| | |
(3,118
|
)
| | |
(4,645
|
)
| | |
(372
|
)
| | |
(2,124
|
)
| | |
(13,613
|
)
| | |
(9,284
|
)
|
Less net gains (losses) on securities available
for sale
| | |
411
| | | |
-
| | | |
232
| | | |
(3
|
)
| | |
(4
|
)
| | |
640
| | | |
18,648
| |
Less net (losses) gains on sale of other assets
| | |
(87
|
)
| | |
-
| | | |
13
| | | |
357
| | | |
419
| | | |
283
| | | |
630
| |
Less net gain on sale of loans held for sale
| | |
-
| | | |
-
| | | |
1,790
| | | |
-
| | | |
-
| | | |
1,790
| | | |
-
| |
Less acquisition related gains
| | |
-
| | | |
-
| | | |
-
| | | |
-
| | | |
-
| | | |
-
| | | |
62,649
| |
Less increase (decrease) in market value of
assets held in trust for deferred compensation
| | |
20
| | | |
(405
|
)
| | |
158
| | | |
187
| | | |
597
| | | |
(40
|
)
| | |
562
| |
Other income - as adjusted
| | |
29,585
| | | |
29,890
| | | |
31,597
| | | |
28,974
| | | |
31,907
| | | |
120,046
| | | |
112,551
| |
Less tax equivalent adjustment on the increase
in cash surrender value of life insurance
| | |
508
| | | |
546
| | | |
781
| | | |
521
| | | |
501
| | | |
2,357
| | | |
1,893
| | | | | | | | | | | | | | | | | | | | | | | | |
Net non-interest expense
| |
$
|
38,726
| | |
$
|
36,577
| | |
$
|
34,192
| | |
$
|
36,182
| | |
$
|
31,610
| | |
$
|
145,676
| | |
$
|
143,770
| | | | | | | | | | | | | | | | | | | | | | | | |
Average assets
| |
$
|
9,856,835
| | |
$
|
9,807,561
| | |
$
|
9,966,898
| | |
$
|
10,198,626
| | |
$
|
10,452,626
| | |
$
|
9,956,133
| | |
$
|
10,506,028
| | | | | | | | | | | | | | | | | | | | | | | | |
Annualized net non-interest expense to average
assets
| | |
1.56
|
%
| | |
1.48
|
%
| | |
1.38
|
%
| | |
1.44
|
%
| | |
1.20
|
%
| | |
1.46
|
%
| | |
1.37
|
%
| | | | | | | | | | | | | | | | | | | | | | | |
Annualized net non-interest expense to average
assets (without adjustments)
| | |
1.81
|
%
| | |
1.63
|
%
| | |
1.51
|
%
| | |
1.50
|
%
| | |
1.28
|
%
| | |
1.61
|
%
| | |
0.70
|
%
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Calculation of Pre-Tax, Pre-Provision Operating
Earnings (Dollars in Thousands)
| | | | | | | | | | | | | | | | | | | | | |
Three Months Ended
| |
Year Ended
| | | |
December 31,
| |
September 30,
| |
June 30,
| |
March 31,
| |
December 31,
| |
December 31,
| |
December 31,
| | | |
2011
| |
2011
| |
2011
| |
2011
| |
2010
| |
2011
| |
2010
|
Income (loss) before income taxes
| |
$
|
27,263
| | |
$
|
28,675
| | |
$
|
(16,426
|
)
| |
$
|
4,484
| | |
$
|
1,835
| | |
$
|
43,996
| | |
$
|
20,552
| |
Provision for credit losses
| | |
8,000
| | | |
11,500
| | | |
61,250
| | | |
40,000
| | | |
49,000
| | | |
120,750
| | | |
246,200
| | |
Pre-tax, pre-provision earnings
| | |
35,263
| | | |
40,175
| | | |
44,824
| | | |
44,484
| | | |
50,835
| | | |
164,746
| | | |
266,752
| | | | | | | | | | | | | | | | | | | | | | | | |
Tax equivalent adjustment on tax-exempt interest
income
| | |
4,468
| | | |
3,320
| | | |
2,775
| | | |
2,625
| | | |
2,609
| | | |
13,188
| | | |
10,458
| |
Tax equivalent adjustment on the increase in
cash surrender value of life insurance
| | |
508
| | | |
546
| | | |
781
| | | |
521
| | | |
501
| | | |
2,357
| | | |
1,893
| | |
Pre-tax, pre-provision earnings on a fully tax
equivalent basis
| | |
40,239
| | | |
44,041
| | | |
48,380
| | | |
47,630
| | | |
53,945
| | | |
180,291
| | | |
279,103
| | | | | | | | | | | | | | | | | | | | | | | | |
Non-core other income
| | | | | | | | | | | | | | | | | | | | | | |
Net losses on other real estate owned
| | |
(5,478
|
)
| | |
(3,118
|
)
| | |
(4,645
|
)
| | |
(372
|
)
| | |
(2,124
|
)
| | |
(13,613
|
)
| | |
(9,284
|
)
| |
Net gains (losses) on securities available for
sale
| | |
411
| | | |
-
| | | |
232
| | | |
(3
|
)
| | |
(4
|
)
| | |
640
| | | |
18,648
| | |
Net (losses) gain on sale of other assets
| | |
(87
|
)
| | |
-
| | | |
13
| | | |
357
| | | |
419
| | | |
283
| | | |
630
| | |
Net gain on sale of loans held for sale
| | |
-
| | | |
-
| | | |
1,790
| | | |
-
| | | |
-
| | | |
1,790
| | | |
-
| | |
Acquisition related gains
| | |
-
| | | |
-
| | | |
-
| | | |
-
| | | |
-
| | | |
-
| | | |
62,649
| | |
Increase (decrease) in market value of assets
held in trust for deferred compensation
| | |
20
| | | |
(405
|
)
| | |
158
| | | |
187
| | | |
597
| | | |
(40
|
)
| | |
562
| |
Total non-core other income
| | |
(5,134
|
)
| | |
(3,523
|
)
| | |
(2,452
|
)
| | |
169
| | | |
(1,112
|
)
| | |
(10,940
|
)
| | |
73,205
| | | | | | | | | | | | | | | | | | | | | | | | |
Non-core other expense
| | | | | | | | | | | | | | | | | | | | | | |
Impairment charges
| | |
594
| | | |
-
| | | |
-
| | | |
1,000
| | | |
-
| | | |
1,594
| | | |
-
| | |
Increase (decrease) in market value of assets
held in trust for deferred compensation
| | |
20
| | | |
(405
|
)
| | |
158
| | | |
187
| | | |
597
| | | |
(40
|
)
| | |
562
| |
Total non-core other expense
| | |
614
| | | |
(405
|
)
| | |
158
| | | |
1,187
| | | |
597
| | | |
1,554
| | | |
562
| |
Pre-tax, pre-provision operating earnings
| |
$
|
45,987
| | |
$
|
47,159
| | |
$
|
50,990
| | |
$
|
48,648
| | |
$
|
55,654
| | |
$
|
192,785
| | |
$
|
206,460
| | | | | | | | | | | | | | | | | | | | | | | | |
Risk-weighted assets
| |
$
|
6,346,201
| | |
$
|
6,174,508
| | |
$
|
6,203,587
| | |
$
|
6,577,477
| | |
$
|
6,772,761
| | |
$
|
6,346,201
| | |
$
|
6,772,761
| | | | | | | | | | | | | | | | | | | | | | | | |
Average assets
| |
$
|
9,856,835
| | |
$
|
9,807,561
| | |
$
|
9,966,898
| | |
$
|
10,198,626
| | |
$
|
10,452,626
| | |
$
|
9,956,133
| | |
$
|
10,506,028
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Annualized pre-tax, pre-provision operating
earnings to risk-weighted assets
| | |
2.87
|
%
| | |
3.03
|
%
| | |
3.30
|
%
| | |
3.00
|
%
| | |
3.26
|
%
| | |
3.04
|
%
| | |
3.05
|
%
|
Annualized pre-tax, pre-provision operating
earnings to risk-weighted assets (without
adjustments)
| | |
2.20
|
%
| | |
2.58
|
%
| | |
2.90
|
%
| | |
2.74
|
%
| | |
2.98
|
%
| | |
2.60
|
%
| | |
3.94
|
%
| | | | | | | | | | | | | | | | | | | | | | | |
Annualized pre-tax, pre-provision operating
earnings to average assets
| | |
1.85
|
%
| | |
1.91
|
%
| | |
2.05
|
%
| | |
1.93
|
%
| | |
2.11
|
%
| | |
1.94
|
%
| | |
1.97
|
%
| | | | | | | | | | | | | | | | | | | | | | | |
Annualized pre-tax, pre-provision operating
earnings to average assets (without
adjustments)
| | |
1.42
|
%
| | |
1.63
|
%
| | |
1.80
|
%
| | |
1.77
|
%
| | |
1.93
|
%
| | |
1.65
|
%
| | |
2.54
|
%
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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 other income and
other expense to other income and other expense are
contained in the tables under "Results of
Operations-Fourth Quarter Results."
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):
| | | | | | | | | | | | | | | | | |
Three Months Ended December 31,
| |
Three Months Ended September 30,
| | | | |
2011
| |
2010
| |
2011
| | | | |
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
| |
$
|
1,051,065
| |
$
|
12,989
| |
4.90%
| |
$
|
1,243,057
| | |
15,053
| |
4.80%
| |
$
|
1,070,852
| |
$
|
12,915
| |
4.78%
| |
Commercial loans collateralized by assignment
of lease payments
| | |
1,102,220
| | |
14,167
| |
5.14
| | |
1,018,026
| | |
14,662
| |
5.76
| | |
1,015,925
| | |
13,694
| |
5.39
| |
Real estate commercial
| | |
1,839,689
| | |
25,132
| |
5.35
| | |
2,235,328
| | |
29,853
| |
5.23
| | |
1,845,988
| | |
25,230
| |
5.35
| |
Real estate construction
| | |
209,098
| | |
2,443
| |
4.57
| | |
438,622
| | |
3,741
| |
3.34
| | |
238,396
| | |
2,233
| |
3.67
|
Total commercial related credits
| | |
4,202,072
| | |
54,731
| |
5.10
| | |
4,935,033
| | |
63,309
| |
5.02
| | |
4,171,161
| | |
54,072
| |
5.07
|
Other loans
| | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate residential
| | |
316,087
| | |
3,719
| |
4.71
| | |
326,785
| | |
4,523
| |
5.54
| | |
317,050
| | |
3,739
| |
4.72
| |
Home equity
| | |
342,011
| | |
3,701
| |
4.29
| | |
385,119
| | |
4,234
| |
4.36
| | |
354,131
| | |
3,828
| |
4.29
| |
Indirect
| | |
188,562
| | |
3,080
| |
6.48
| | |
178,940
| | |
3,583
| |
7.94
| | |
185,850
| | |
2,968
| |
6.34
| |
Consumer loans
| | |
62,703
| | |
482
| |
3.05
| | |
57,709
| | |
633
| |
4.35
| | |
56,257
| | |
439
| |
3.10
|
Total other loans
| | |
909,363
| | |
10,982
| |
4.79
| | |
948,553
| | |
12,973
| |
5.43
| | |
913,288
| | |
10,974
| |
4.77
| |
Total loans, excluding covered loans
| | |
5,111,435
| | |
65,713
| |
5.10
| | |
5,883,586
| | |
76,282
| |
5.14
| | |
5,084,449
| | |
65,046
| |
5.08
| |
Covered loans
| | |
707,039
| | |
10,894
| |
6.11
| | |
840,254
| | |
17,213
| |
8.13
| | |
742,732
| | |
14,004
| |
7.48
| |
Total loans
| | |
5,818,474
| | |
76,607
| |
5.22
| | |
6,723,840
| | |
93,495
| |
5.52
| | |
5,827,181
| | |
79,050
| |
5.38
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Taxable investment securities
| | |
1,820,680
| | |
11,608
| |
2.55
| | |
1,172,751
| | |
7,002
| |
2.39
| | |
1,869,961
| | |
11,699
| |
2.50
|
Investment securities exempt from federal income
taxes (3)
| | |
676,893
| | |
9,505
| |
5.49
| | |
351,955
| | |
5,181
| |
5.76
| | |
456,777
| | |
6,614
| |
5.67
|
Federal funds sold
| | |
-
| | |
-
| |
0.00
| | |
-
| | |
-
| |
0.00
| | |
-
| | |
-
| |
0.00
|
Other interest earning deposits
| | |
272,762
| | |
181
| |
0.26
| | |
784,803
| | |
504
| |
0.25
| | |
365,723
| | |
244
| |
0.26
| |
Total interest earning assets
| |
$
|
8,588,809
| |
$
|
97,901
| |
4.52
| |
$
|
9,033,349
| |
$
|
106,182
| |
4.66
| |
$
|
8,519,642
| |
$
|
97,607
| |
4.55
|
Non-interest earning assets
| | |
1,268,026
| | | | | | | |
1,419,277
| | | | | | | |
1,287,919
| | | | | | |
Total assets
| |
$
|
9,856,835
| | | | | | |
$
|
10,452,626
| | | | | | |
$
|
9,807,561
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest Bearing Liabilities:
| | | | | | | | | | | | | | | | | | | | | | | | |
Core funding:
| | | | | | | | | | | | | | | | | | | | | | | | | |
Money market and NOW accounts
| |
$
|
2,653,486
| |
$
|
1,498
| |
0.22%
| |
$
|
2,823,619
| |
$
|
3,410
| |
0.48%
| |
$
|
2,656,490
| |
$
|
1,731
| |
0.26%
| |
Savings accounts
| | |
751,766
| | |
327
| |
0.17
| | |
657,816
| | |
505
| |
0.30
| | |
742,334
| | |
320
| |
0.17
| |
Certificates of deposit
| | |
1,971,473
| | |
4,294
| |
0.89
| | |
2,611,365
| | |
7,609
| |
1.17
| | |
2,048,556
| | |
4,759
| |
0.92
| |
Customer repurchase agreements
| | |
235,666
| | |
151
| |
0.25
| | |
277,782
| | |
218
| |
0.31
| | |
218,928
| | |
146
| |
0.26
|
Total core funding
| | |
5,612,391
| | |
6,270
| |
0.44
| | |
6,370,582
| | |
11,742
| |
0.73
| | |
5,666,308
| | |
6,956
| |
0.49
|
Wholesale funding:
| | | | | | | | | | | | | | | | | | | | | | | | | |
Brokered accounts (includes fee expense)
| | |
438,123
| | |
3,450
| |
3.12
| | |
473,090
| | |
4,074
| |
3.42
| | |
412,714
| | |
3,396
| |
3.26
| |
Other borrowings
| | |
431,165
| | |
3,468
| |
3.15
| | |
452,212
| | |
3,102
| |
2.68
| | |
442,066
| | |
3,519
| |
3.11
|
Total wholesale funding
| | |
869,288
| | |
6,918
| |
2.88
| | |
925,302
| | |
7,176
| |
2.88
| | |
854,780
| | |
6,915
| |
3.08
|
Total interest bearing liabilities
| |
$
|
6,481,679
| |
$
|
13,188
| |
0.81
| |
$
|
7,295,884
| |
$
|
18,918
| |
1.03
| |
$
|
6,521,088
| |
$
|
13,871
| |
0.84
|
Non-interest bearing deposits
| | |
1,878,049
| | | | | | | |
1,694,179
| | | | | | | |
1,810,501
| | | | | |
Other non-interest bearing liabilities
| | |
120,671
| | | | | | | |
120,974
| | | | | | | |
123,391
| | | | | |
Stockholders' equity
| | |
1,376,436
| | | | | | | |
1,341,589
| | | | | | | |
1,352,581
| | | | | | | |
Total liabilities and stockholders' equity
| |
$
|
9,856,835
| | | | | | |
$
|
10,452,626
| | | | | | |
$
|
9,807,561
| | | | | | | |
Net interest income/interest rate spread (4)
| | | | |
$
|
84,713
| |
3.71%
| | | | |
$
|
87,264
| |
3.63%
| | | | |
$
|
83,736
| |
3.71%
| | |
Taxable equivalent adjustment
| | | | | |
4,468
| | | | | | | |
2,609
| | | | | | | |
3,320
| | | | |
Net interest income, as reported
| | | | |
$
|
80,245
| | | | | | |
$
|
84,655
| | | | | | |
$
|
80,416
| | | | |
Net interest margin (5)
| | | | | | | |
3.71%
| | | | | | | |
3.72%
| | | | | | | |
3.74%
| | |
Tax equivalent effect
| | | | | | | |
0.20%
| | | | | | | |
0.11%
| | | | | | | |
0.16%
| | |
Net interest margin on a fully tax equivalent
basis (5)
| | | | | | |
3.91%
| | | | | | | |
3.83%
| | | | | | | |
3.90%
| | | | | | | | | | | | | | | | | | | | | | | | | | |
(1)
| |
Non-accrual loans are included in average loans.
|
(2)
| |
Interest income includes amortization of deferred
loan origination fees of $1.2 million, $972
thousand, and $1.0 million for the three months
ended December 31, 2011, September 30, 2011, and
December 31, 2010, 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.
| | | |
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):
| | | | | | | | | | | | | | | |
Year Ended December 31,
| | | | |
2011
| |
2010
| | | | |
Average
| | | | |
Yield/
| |
Average
| | | | |
Yield/
| | | | |
Balance
| |
Interest
| |
Rate
| |
Balance
| |
Interest
| |
Rate
|
Interest Earning Assets:
| | | | | | | | | | | | | | | | |
Loans (1) (2) (3):
| | | | | | | | | | | | | | | | |
Commercial related credits
| | | | | | | | | | | | | | | | | |
Commercial
| |
$
|
1,108,033
| |
$
|
53,813
| |
4.86%
| |
$
|
1,324,118
| |
$
|
66,121
| |
4.99%
| |
Commercial loans collateralized by assignment
of lease payments
| | |
1,041,033
| | |
56,453
| |
5.42
| | |
981,384
| | |
58,807
| |
5.99
| |
Real estate commercial
| | |
1,968,087
| | |
105,342
| |
5.28
| | |
2,345,202
| | |
125,115
| |
5.26
| |
Real estate construction
| | |
300,288
| | |
11,984
| |
3.94
| | |
520,734
| | |
17,357
| |
3.29
|
Total commercial related credits
| | |
4,417,441
| | |
227,592
| |
5.08
| | |
5,171,438
| | |
267,400
| |
5.10
|
Other loans
| | | | | | | | | | | | | | | | | |
Real estate residential
| | |
326,189
| | |
15,914
| |
4.88
| | |
314,713
| | |
16,878
| |
5.36
| |
Home equity
| | |
359,972
| | |
15,481
| |
4.30
| | |
394,142
| | |
17,317
| |
5.39
| |
Indirect
| | |
181,988
| | |
12,034
| |
6.61
| | |
180,337
| | |
13,115
| |
7.27
| |
Consumer loans
| | |
58,205
| | |
1,957
| |
3.36
| | |
58,834
| | |
2,209
| |
3.75
|
Total other loans
| | |
926,354
| | |
45,386
| |
4.90
| | |
948,026
| | |
49,519
| |
5.22
| |
Total loans, excluding covered loans
| | |
5,343,795
| | |
272,978
| |
5.11
| | |
6,119,464
| | |
316,919
| |
5.18
| |
Covered loans
| | |
755,242
| | |
55,706
| |
7.38
| | |
639,312
| | |
50,707
| |
7.93
| |
Total loans
| | |
6,099,037
| | |
328,684
| |
5.39
| | |
6,758,776
| | |
367,626
| |
5.44
| | | | | | | | | | | | | | | | | | | |
Taxable investment securities
| | |
1,669,971
| | |
41,349
| |
2.48
| | |
1,635,544
| | |
50,542
| |
3.09
|
Investment securities exempt from federal income
taxes (3)
| | |
460,972
| | |
26,562
| |
5.68
| | |
356,496
| | |
20,900
| |
5.78
|
Federal funds sold
| | |
-
| | |
-
| |
0.00
| | |
352
| | |
2
| |
0.56
|
Other interest earning deposits
| | |
442,190
| | |
1,153
| |
0.26
| | |
386,521
| | |
1,028
| |
0.27
| |
Total interest earning assets
| |
$
|
8,672,170
| |
$
|
397,748
| |
4.59
| |
$
|
9,137,689
| |
$
|
440,098
| |
4.82
|
Non-interest earning assets
| | |
1,283,963
| | | | | | | |
1,368,339
| | | | | | |
Total assets
| |
$
|
9,956,133
| | | | | | |
$
|
10,506,028
| | | | | | | | | | | | | | | | | | | | | | | | |
Interest Bearing Liabilities:
| | | | | | | | | | | | | | | | |
Core funding:
| | | | | | | | | | | | | | | | | |
Money market and NOW accounts
| |
$
|
2,678,049
| |
$
|
7,637
| |
0.29%
| |
$
|
2,767,044
| |
$
|
14,965
| |
0.54%
| |
Savings accounts
| | |
732,731
| | |
1,379
| |
0.19
| | |
619,304
| | |
1,911
| |
0.31
| |
Certificates of deposit
| | |
2,165,541
| | |
21,162
| |
0.99
| | |
2,846,246
| | |
41,085
| |
1.47
| |
Customer repurchase agreements
| | |
239,896
| | |
639
| |
0.27
| | |
260,291
| | |
959
| |
0.37
|
Total core funding
| | |
5,816,217
| | |
30,817
| |
0.53
| | |
6,492,885
| | |
58,920
| |
0.91
|
Wholesale funding:
| | | | | | | | | | | | | | | | | |
Brokered accounts (includes fee expense)
| | |
444,895
| | |
14,703
| |
3.30
| | |
489,211
| | |
17,889
| |
3.66
| |
Other borrowings
| | |
443,752
| | |
13,767
| |
3.06
| | |
473,347
| | |
13,059
| |
2.72
|
Total wholesale funding
| | |
888,647
| | |
28,470
| |
3.03
| | |
962,558
| | |
30,948
| |
2.99
|
Total interest bearing liabilities
| |
$
|
6,704,864
| |
$
|
59,287
| |
0.88
| |
$
|
7,455,443
| |
$
|
89,868
| |
1.21
|
Non-interest bearing deposits
| | |
1,771,918
| | | | | | | |
1,594,504
| | | | | |
Other non-interest bearing liabilities
| | |
120,647
| | | | | | | |
127,099
| | | | | |
Stockholders' equity
| | |
1,358,704
| | | | | | | |
1,328,982
| | | | | | | |
Total liabilities and stockholders' equity
| |
$
|
9,956,133
| | | | | | |
$
|
10,506,028
| | | | | | | |
Net interest income/interest rate spread (4)
| | | |
$
|
338,461
| |
3.71%
| | | | |
$
|
350,230
| |
3.61%
| | |
Taxable equivalent adjustment
| | | | | |
13,188
| | | | | | | |
10,458
| | | | |
Net interest income, as reported
| | | | |
$
|
325,273
| | | | | | |
$
|
339,772
| | | | |
Net interest margin (5)
| | | | | | | |
3.75%
| | | | | | | |
3.72%
| | |
Tax equivalent effect
| | | | | | | |
0.15%
| | | | | | | |
0.11%
| | |
Net interest margin on a fully tax equivalent
basis (5)
| | | |
3.90%
| | | | | | | |
3.83%
| | | | | | | | | | | | | | | |
(1)
| |
Non-accrual loans are included in average loans.
|
(2)
| |
Interest income includes amortization of deferred
loan origination fees of $4.7 million and $4.6
million for the year ended December 31, 2011, and
December 31 2010, 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
|