Company Website:
http://www.mbfinancial.com
CHICAGO -- (Business Wire)
MB Financial, Inc. (NASDAQ: MBFI), the holding company for MB Financial
Bank, N.A., today announced 2014 second quarter net income of $23.1
million compared to $20.0 million last quarter and $25.3 million in the
second quarter a year ago.
Key items for the second quarter include:
Net Interest Income Increased Modestly:
-
Net interest income on a fully tax equivalent basis increased $840
thousand from the first quarter of 2014 due to an extra day in the
quarter, and increased $675 thousand from the second quarter of 2013
primarily due to higher yields on taxable investment securities partly
offset by lower loan yields.
-
Fully taxable equivalent net interest margin was 3.53% for the second
quarter of 2014 compared to 3.64% for the prior quarter and 3.61% for
the second quarter of 2013. Higher cash balances in the second quarter
of 2014 resulting from strong deposit inflows had minimal impact on
net interest income, but reduced net interest margin by 11 basis
points.
Credit Quality Metrics Improved during the Quarter:
-
We recorded a negative provision for credit losses of $2.0 million in
the second quarter compared to a positive provision for credit losses
of $1.2 million in the prior quarter as a result of reduced levels of
classified and special mention assets.
-
Non-performing loans decreased by $8.0 million from March 31, 2014.
-
Potential problem loan balances improved by $5.3 million from March
31, 2014.
-
Special mention assets decreased by $24.0 million compared to March
31, 2014.
Fee Income from Key Fee Initiatives Increased $2.8 million, 9.6%,
from the Prior Quarter and $2.3 million, 7.9%, from the Second Quarter
of 2013:
-
Leasing revenues increased due to higher fees from the sale of
third-party equipment maintenance contracts compared to the prior
quarter, but decreased slightly compared to the second quarter of 2013.
-
Capital markets and international banking service fees increased due
to higher M&A advisory and syndication fees.
-
Card fees increased due to prepaid card program growth.
-
Commercial deposit and treasury management fees increased compared to
the second quarter of 2013 due to new customer activity, but slightly
decreased compared to the prior quarter.
Core Non-interest Expenses Increased $3.9 million, 5.3%, from the
Prior Quarter and $4.6 million, 6.4%, from the Second Quarter of 2013:
-
Salaries and employee benefits increased compared to the prior quarter
primarily due to annual salary increases, an extra day in the quarter,
an increase in leasing commissions as a result of higher leasing
revenues and higher long-term incentive expense. Compared to the
second quarter of 2013, salaries and employee benefits increased due
to annual salary increases and higher long-term incentive expense,
health insurance costs and temporary staffing costs.
-
Other operating expense increased from the prior quarter as a result
of an increase of $1.4 million in the clawback liability related to
our loss share agreements with the FDIC. The increase was due to
better than expected performance of the acquired loan portfolios
(faster resolution and lower charge-offs). Compared to the second
quarter of 2013, other operating expense increased as a result of an
increase in filing and other loan expense, as well as higher FDIC
assessments due to our larger balance sheet, increased FDIC clawback
liability and higher currency delivery expenses related to new
treasury management accounts.
Balance Sheet Activity - Loans and Deposits Increased, Low Cost
Deposit Flows Strong:
-
Loans, excluding covered loans, increased approximately $27 million
(+0.5%) from March 31, 2014 and approximately $62 million (+1.2%) from
June 30, 2013.
-
Low cost deposit flows were strong, increasing approximately $335
million (+5.5%) from March 31, 2014 and approximately $615 million
(+10.6%) from June 30, 2013.
-
Noninterest bearing deposits as a percent of total deposits were 34%
at June 30, 2014.
-
We continue to maintain robust levels of capital and liquidity and are
positioned well to complete our pending merger with Taylor Capital
Group, Inc. Cash and interest bearing deposits at our holding company
totaled approximately $154 million as of June 30, 2014.
RESULTS OF OPERATIONS
Second Quarter Results
Net Interest Income
Net interest income on a fully tax equivalent basis increased $840
thousand from the first quarter of 2014 primarily due to an extra day in
the quarter. Our net interest margin on a fully tax equivalent basis for
the second quarter of 2014 decreased 11 basis points compared to the
first quarter of 2014 primarily due to higher cash balances held during
the second quarter of 2014 as a result of the strong deposit inflows.
Higher deposits and cash balances had minimal impact on net interest
income.
Net interest income on a fully tax equivalent basis increased $675
thousand from the second quarter of 2013 primarily due to higher yields
on taxable investment securities partly offset by lower loan yields. Our
net interest margin on a fully tax equivalent basis for the second
quarter of 2014 decreased eight basis points compared to the second
quarter of 2013 primarily due to higher cash balances.
See the supplemental net interest margin tables for further detail.
Non-interest Income (in thousands):
|
| | |
| | |
| | |
| | |
| | |
|
| Six Months Ended |
| | | | | | | | | | | | | | | | | | June 30, |
| | 2Q14 | | 1Q14 | | 4Q13 | | 3Q13 | | 2Q13 | | | 2014 |
| 2013 |
Core non-interest income:
| | | | | | | | | | | | | | | | | | | | | |
Key fee initiatives:
| | | | | | | | | | | | | | | | | | | | | |
Capital markets and international banking service fees
| |
$
|
1,360
| | |
$
|
978
| | |
$
|
841
| | |
$
|
972
| | |
$
|
939
| | | |
$
|
2,338
| | |
$
|
1,747
|
Commercial deposit and treasury management fees
| |
7,106
| | |
7,144
| | |
6,545
| | |
6,327
| | |
6,029
| | | |
14,250
| | |
11,995
|
Lease financing, net
| |
14,853
| | |
13,196
| | |
15,808
| | |
14,070
| | |
15,102
| | | |
28,049
| | |
31,365
|
Trust and asset management fees
| |
5,405
| | |
5,207
| | |
4,975
| | |
4,799
| | |
4,874
| | | |
10,612
| | |
9,368
|
Card fees
| |
3,304
|
| |
2,701
|
| |
2,838
|
| |
2,745
|
| |
2,735
|
| | |
6,005
|
| |
5,430
|
Total key fee initiatives
| |
32,028
| | |
29,226
| | |
31,007
| | |
28,913
| | |
29,679
| | | |
61,254
| | |
59,905
|
| | | | | | | | | | | | | | | | | | | | |
|
Loan service fees
| |
916
| | |
965
| | |
1,214
| | |
1,427
| | |
1,911
| | | |
1,881
| | |
2,922
|
Consumer and other deposit service fees
| |
3,156
| | |
2,935
| | |
3,481
| | |
3,648
| | |
3,593
| | | |
6,091
| | |
6,839
|
Brokerage fees
| |
1,356
| | |
1,325
| | |
1,227
| | |
1,289
| | |
1,234
| | | |
2,681
| | |
2,391
|
Increase in cash surrender value of life insurance
| |
834
| | |
827
| | |
848
| | |
851
| | |
842
| | | |
1,661
| | |
1,686
|
Accretion of FDIC indemnification asset
| |
28
| | |
31
| | |
35
| | |
64
| | |
100
| | | |
59
| | |
243
|
Net gain on sale of loans
| |
187
| | |
59
| | |
342
| | |
177
| | |
506
| | | |
246
| | |
1,145
|
Other operating income
| |
1,134
|
| |
768
|
| |
641
|
| |
878
|
| |
1,039
|
| | |
1,902
|
| |
1,994
|
Total core non-interest income
| |
39,639
|
| |
36,136
|
| |
38,795
|
| |
37,247
|
| |
38,904
|
| | |
75,775
|
| |
77,125
|
Non-core non-interest income:
| | | | | | | | | | | | | | | | | | | | | |
Net (loss) gain on investment securities
| |
(87
|
)
| |
317
| | |
(15
|
)
| |
1
| | |
14
| | | |
230
| | |
13
|
Net (loss) gain on sale of other assets
| |
(24
|
)
| |
7
| | |
(323
|
)
| |
—
| | |
—
| | | |
(17
|
)
| |
—
|
Increase in market value of assets held in trust for deferred
compensation (1) | |
400
|
| |
152
|
| |
588
|
| |
459
|
| |
21
|
| | |
552
|
| |
504
|
Total non-core non-interest income
| |
289
|
| |
476
|
| |
250
|
| |
460
|
| |
35
|
| | |
765
|
| |
517
|
| | | | | | | | | | | | | | | | | | | | |
|
Total non-interest income
| |
$
|
39,928
|
| |
$
|
36,612
|
| |
$
|
39,045
|
| |
$
|
37,707
|
| |
$
|
38,939
|
| | |
$
|
76,540
|
| |
$
|
77,642
|
(1) Resides in other operating income in the consolidated
statements of income.
Core non-interest income for the second quarter of 2014 increased
approximately 9.7% from the first quarter of 2014.
-
Leasing revenues increased due to higher fees from the sale of
third-party equipment maintenance contracts.
-
Capital markets and international banking service fees increased due
to higher M&A advisory and syndication fees.
-
Card fees increased due to a new payroll prepaid card program.
Core non-interest income for the first six months of 2014 decreased
approximately 1.8% from the first six months of 2013.
-
Commercial deposit and treasury management fees increased in the first
half of 2014 due to robust new customer activity.
-
Trust and asset management fees increased due to the growth in
investment management fees as a result of new customers added and the
impact of higher equity values on assets under management and related
fee revenue.
-
Card fees increased due to a new payroll prepaid card program as well
as higher ATM and debit card fees.
-
Leasing revenues declined due to lower equipment remarketing gains and
lower fees from the sale of third-party equipment maintenance
contracts.
-
Loan service fees decreased due to lower late, prepayment and
miscellaneous loan fees collected.
-
Consumer and other deposit service fees decreased due to lower demand
deposit service and overdraft charges.
-
Net gain on sale of loans decreased as a result of less mortgage
origination activity.
Non-interest Expense (in thousands):
|
| | |
| | |
| | |
| | |
| | |
|
| Six Months Ended |
| | | | | | | | | | | | | | | | | | June 30, |
| | 2Q14 | | 1Q14 | | 4Q13 | | 3Q13 | | 2Q13 | | | 2014 |
| 2013 |
Core non-interest expense:
| | | | | | | | | | | | | | | | | | | | | | |
Salaries and employee benefits
| |
$
|
46,222
| | |
$
|
44,121
| | |
$
|
44,929
| | |
$
|
44,459
| | |
$
|
43,888
| | | |
$
|
90,343
| | |
$
|
86,919
| |
Occupancy and equipment expense
| |
9,504
| | |
9,592
| | |
9,269
| | |
8,797
| | |
9,408
| | | |
19,096
| | |
18,812
| |
Computer services and telecommunication expense
| |
4,909
| | |
5,071
| | |
5,509
| | |
4,870
| | |
4,617
| | | |
9,980
| | |
8,504
| |
Advertising and marketing expense
| |
2,113
| | |
1,991
| | |
2,081
| | |
1,917
| | |
2,167
| | | |
4,104
| | |
4,270
| |
Professional and legal expense
| |
1,488
| | |
1,369
| | |
2,340
| | |
1,408
| | |
1,353
| | | |
2,857
| | |
2,648
| |
Other intangible amortization expense
| |
1,174
| | |
1,240
| | |
1,489
| | |
1,513
| | |
1,538
| | | |
2,414
| | |
3,082
| |
Other real estate expense, net
| |
337
| | |
396
| | |
175
| | |
240
| | |
193
| | | |
733
| | |
332
| |
Other operating expenses
| |
11,108
|
| |
9,220
|
| |
10,171
|
| |
10,052
|
| |
9,083
|
| | |
20,328
|
| |
18,296
|
|
Total core non-interest expense
| |
76,855
|
| |
73,000
|
| |
75,963
|
| |
73,256
|
| |
72,247
|
| | |
149,855
|
| |
142,863
|
|
Non-core non-interest expense: (1) | | | | | | | | | | | | | | | | | | | | | | |
Merger related expenses (A)
| |
488
| | |
680
| | |
724
| | |
1,759
| | |
—
| | | |
1,168
| | |
—
| |
Net loss (gain) recognized on other real estate owned
| |
204
| | |
122
| | |
(831
|
)
| |
754
| | |
(2,130
|
)
| | |
326
| | |
(1,811
|
)
|
Net (gain) loss recognized on other real estate owned related to
FDIC transactions (B)
| |
(13
|
)
| |
65
| | |
197
| | |
37
| | |
115
| | | |
52
| | |
126
| |
Loss on low to moderate income real estate investment (C)
| |
96
| | |
2,028
| | |
—
| | |
—
| | |
—
| | | |
2,124
| | |
—
| |
Increase in market value of assets held in trust for deferred
compensation (D)
| |
400
|
| |
152
|
| |
588
|
| |
459
|
| |
21
|
| | |
552
|
| |
504
|
|
Total non-core non-interest expense
| |
1,175
|
| |
3,047
|
| |
678
|
| |
3,009
|
| |
(1,994
|
)
| | |
4,222
|
| |
(1,181
|
)
|
| | | | | | | | | | | | | | | | | | | | | |
|
Total non-interest expense
| |
$
|
78,030
|
| |
$
|
76,047
|
| |
$
|
76,641
|
| |
$
|
76,265
|
| |
$
|
70,253
|
| | |
$
|
154,077
|
| |
$
|
141,682
|
|
(1) Letters denote the corresponding line items where these
non-core non-interest expense items reside in the consolidated
statements of income as follows: A – Salaries and employee benefits,
computer services and telecommunication expense, advertising and
marketing expense, professional and legal expense and other operating
expenses, B – Net (gain) loss recognized on other real estate owned, C –
Other operating expenses, D – Salaries and employee benefits.
Core non-interest expense increased by $3.9 million, or 5.3%, from the
first quarter of 2014 to the second quarter of 2014.
-
Salaries and employee benefits increased primarily due to annual
salary increases, an extra day in the quarter, an increase in leasing
commissions as a result of higher leasing revenues and higher
long-term incentive expense.
-
Other operating expense increased primarily as a result of an increase
of $1.4 million in the clawback liability related to our loss share
agreements with the FDIC.
Core non-interest expense increased by $7.0 million, or 4.9%, from the
first six months of 2013 to the first six months of 2014.
-
Salaries and employee benefits increased due to annual salary
increases, long-term incentive expense, health insurance and temporary
staffing needs.
-
Computer services and telecommunication expenses increased due
primarily to an increase in spending on IT security, data warehouse,
investments in our key fee initiatives, as well as higher transaction
volumes in leasing, treasury management and card areas. The increase
was also due to increased telecommunication expense related to the
transitioning to a new provider.
-
Other operating expense increased primarily as a result of an increase
in filing and other loan expense as well as higher FDIC assessments
due to our larger balance sheet, higher ATM and debit card processing
costs and higher currency delivery expenses related to new treasury
management accounts.
Non-core non-interest expense decreased from the preceding quarter. Last
quarter's results included a write-off of an investment in funds that
invested in low to moderate income real estate projects. This investment
was made in 2006 as a community development initiative. The extended
slow real estate recovery in some low income areas of Chicago negatively
impacted this investment.
LOAN PORTFOLIO
The following table sets forth the composition of the loan portfolio
(excluding loans held for sale) based on period end balances as of the
dates indicated (dollars in thousands):
|
| 6/30/2014 |
| 3/31/2014 |
| 12/31/2013 |
| 9/30/2013 |
| 6/30/2013 |
| | |
| % of | | |
| % of | | |
| % of | | |
| % of | | |
| % of |
| | Amount | | Total | | Amount | | Total | | Amount | | Total | | Amount | | Total | | Amount | | Total |
Commercial related credits:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial loans
| |
$
|
1,272,200
| | |
23
|
%
| |
$
|
1,267,398
| | |
23
|
%
| |
$
|
1,281,377
| | |
22
|
%
| |
$
|
1,169,009
| | |
21
|
%
| |
$
|
1,198,862
| | |
22
|
%
|
Commercial loans collateralized by assignment of lease payments
(lease loans)
| |
1,515,446
| | |
27
| | |
1,472,621
| | |
27
| | |
1,494,188
| | |
26
| | |
1,468,814
| | |
26
| | |
1,422,901
| | |
25
| |
Commercial real estate
| |
1,619,322
| | |
29
| | |
1,623,509
| | |
29
| | |
1,647,700
| | |
29
| | |
1,638,368
| | |
29
| | |
1,710,964
| | |
30
| |
Construction real estate
| |
116,996
|
| |
2
|
| |
132,997
|
| |
2
|
| |
141,253
|
| |
3
|
| |
136,146
|
| |
2
|
| |
121,420
|
| |
2
|
|
Total commercial related credits
| |
4,523,964
|
| |
81
|
| |
4,496,525
|
| |
81
|
| |
4,564,518
|
| |
80
|
| |
4,412,337
|
| |
78
|
| |
4,454,147
|
| |
79
|
|
Other loans:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential real estate
| |
309,234
| | |
6
| | |
309,137
| | |
5
| | |
314,440
| | |
5
| | |
311,256
| | |
6
| | |
305,710
| | |
5
| |
Indirect vehicle
| |
272,841
| | |
5
| | |
266,044
| | |
5
| | |
262,632
| | |
5
| | |
257,740
| | |
5
| | |
242,964
| | |
5
| |
Home equity
| |
245,135
| | |
4
| | |
258,120
| | |
5
| | |
268,289
| | |
5
| | |
274,484
| | |
5
| | |
281,334
| | |
5
| |
Consumer loans
| |
70,584
|
| |
1
|
| |
64,812
|
| |
1
|
| |
66,952
|
| |
1
|
| |
57,418
|
| |
1
|
| |
75,476
|
| |
1
|
|
Total other loans
| |
897,794
|
| |
16
|
| |
898,113
|
| |
16
|
| |
912,313
|
| |
16
|
| |
900,898
|
| |
17
|
| |
905,484
|
| |
16
|
|
Gross loans excluding covered loans
| |
5,421,758
| | |
97
| | |
5,394,638
| | |
97
| | |
5,476,831
| | |
96
| | |
5,313,235
| | |
95
| | |
5,359,631
| | |
95
| |
Covered loans (1) | |
134,966
|
| |
3
|
| |
173,677
|
| |
3
|
| |
235,720
|
| |
4
|
| |
273,497
|
| |
5
|
| |
308,556
|
| |
5
|
|
Total loans
| |
$
|
5,556,724
|
| |
100
|
%
| |
$
|
5,568,315
|
| |
100
|
%
| |
$
|
5,712,551
|
| |
100
|
%
| |
$
|
5,586,732
|
| |
100
|
%
| |
$
|
5,668,187
|
| |
100
|
%
|
(1) Covered loans refer to loans we acquired in FDIC-assisted
transactions that are subject to loss-sharing agreements with the FDIC.
The following table sets forth the composition of the loan portfolio
(excluding loans held for sale) based on quarterly average balances for
the periods indicated (dollars in thousands):
|
| 2Q14 |
| 1Q14 |
| 4Q13 |
| 3Q13 |
| 2Q13 |
| | |
| % of | | |
| % of | | |
| % of | | |
| % of | | |
| % of |
| | Amount | | Total | | Amount | | Total | | Amount | | Total | | Amount | | Total | | Amount | | Total |
Commercial related credits:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial loans
| |
$
|
1,229,799
| | |
22
|
%
| |
$
|
1,232,562
| | |
22
|
%
| |
$
|
1,167,924
| | |
21
|
%
| |
$
|
1,166,887
| | |
21
|
%
| |
$
|
1,206,740
| | |
21
|
%
|
Commercial loans collateralized by assignment of lease payments
(lease loans)
| |
1,476,618
| | |
27
| | |
1,479,998
| | |
26
| | |
1,468,257
| | |
26
| | |
1,429,169
| | |
26
| | |
1,340,854
| | |
25
| |
Commercial real estate
| |
1,620,658
| | |
29
| | |
1,631,041
| | |
29
| | |
1,629,270
| | |
29
| | |
1,652,339
| | |
30
| | |
1,716,170
| | |
30
| |
Construction real estate
| |
133,557
|
| |
2
|
| |
140,920
|
| |
3
|
| |
141,041
|
| |
3
|
| |
128,115
|
| |
2
|
| |
133,705
|
| |
2
|
|
Total commercial related credits
| |
4,460,632
|
| |
80
|
| |
4,484,521
|
| |
80
|
| |
4,406,492
|
| |
79
|
| |
4,376,510
|
| |
79
|
| |
4,397,469
|
| |
78
|
|
Other loans:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential real estate
| |
309,848
| | |
6
| | |
311,466
| | |
5
| | |
315,303
| | |
5
| | |
307,555
| | |
5
| | |
306,978
| | |
5
| |
Indirect vehicle
| |
269,556
| | |
5
| | |
263,510
| | |
5
| | |
260,918
| | |
5
| | |
250,003
| | |
5
| | |
231,577
| | |
5
| |
Home equity
| |
252,891
| | |
5
| | |
263,283
| | |
5
| | |
271,898
| | |
5
| | |
277,122
| | |
5
| | |
286,640
| | |
5
| |
Consumer loans
| |
65,437
|
| |
1
|
| |
62,616
|
| |
1
|
| |
60,054
|
| |
1
|
| |
61,950
|
| |
1
|
| |
70,603
|
| |
1
|
|
Total other loans
| |
897,732
|
| |
17
|
| |
900,875
|
| |
16
|
| |
908,173
|
| |
16
|
| |
896,630
|
| |
16
|
| |
895,798
|
| |
16
|
|
Gross loans excluding covered loans
| |
5,358,364
| | |
97
| | |
5,385,396
| | |
96
| | |
5,314,665
| | |
95
| | |
5,273,140
| | |
95
| | |
5,293,267
| | |
94
| |
Covered loans (1) | |
158,371
|
| |
3
|
| |
221,481
|
| |
4
|
| |
258,094
|
| |
5
|
| |
281,896
|
| |
5
|
| |
335,148
|
| |
6
|
|
Total loans
| |
$
|
5,516,735
|
| |
100
|
%
| |
$
|
5,606,877
|
| |
100
|
%
| |
$
|
5,572,759
|
| |
100
|
%
| |
$
|
5,555,036
|
| |
100
|
%
| |
$
|
5,628,415
|
| |
100
|
%
|
(1) Covered loans refer to loans we acquired in FDIC-assisted
transactions that are subject to loss-sharing agreements with the FDIC.
ASSET QUALITY
The following table presents a summary of criticized assets (excluding
loans held for sale, credit-impaired loans and other real estate owned
that were acquired as part of our FDIC-assisted transactions) as of the
dates indicated (dollars in thousands):
|
| 6/30/2014 |
| 3/31/2014 |
| 12/31/2013 |
| 9/30/2013 |
| 6/30/2013 |
Non-performing loans:
| | | | | | | | | | | | | | | |
Non-accrual loans (1) | |
$
|
108,414
| | |
$
|
118,023
| | |
$
|
106,115
| | |
$
|
102,042
| | |
$
|
112,926
| |
Loans 90 days or more past due, still accruing interest
| |
2,363
|
| |
747
|
| |
446
|
| |
410
|
| |
2,322
|
|
Total non-performing loans
| |
110,777
|
| |
118,770
|
| |
106,561
|
| |
102,452
|
| |
115,248
|
|
Other real estate owned
| |
20,306
| | |
20,928
| | |
23,289
| | |
31,356
| | |
32,993
| |
Repossessed assets
| |
73
|
| |
772
|
| |
840
|
| |
861
|
| |
749
|
|
Total non-performing assets
| |
131,156
|
| |
140,470
|
| |
130,690
|
| |
134,669
|
| |
148,990
|
|
Potential problem loans (2) | |
63,477
|
| |
68,785
|
| |
79,589
|
| |
96,410
|
| |
131,746
|
|
Total classified assets
| |
194,633
|
| |
209,255
|
| |
210,279
|
| |
231,079
|
| |
280,736
|
|
Special mention
| |
47,284
|
| |
71,311
|
| |
68,277
|
| |
73,931
|
| |
85,835
|
|
Total criticized assets
| |
$
|
241,917
|
| |
$
|
280,566
|
| |
$
|
278,556
|
| |
$
|
305,010
|
| |
$
|
366,571
|
|
| | | | | | | | | | | | | | |
|
Total allowance for loan losses
| |
$
|
100,910
| | |
$
|
106,752
| | |
$
|
111,746
| | |
$
|
118,031
| | |
$
|
123,685
| |
Accruing restructured loans (3) | |
27,135
| | |
25,797
| | |
29,430
| | |
29,911
| | |
28,270
| |
Total non-performing loans to total loans
| |
1.99
|
%
| |
2.13
|
%
| |
1.87
|
%
| |
1.83
|
%
| |
2.03
|
%
|
Total non-performing assets to total assets
| |
1.34
| | |
1.49
| | |
1.36
| | |
1.45
| | |
1.59
| |
Allowance for loan losses to non-performing loans
| |
91.09
| | |
89.88
| | |
104.87
| | |
115.21
| | |
107.32
| |
(1) Includes $14.5 million, $15.6 million, $25.0 million,
$22.3 million and $20.9 million of restructured loans on non-accrual
status at June 30, 2014, March 31, 2014, December 31, 2013,
September 30, 2013 and June 30, 2013, respectively.
(2) We define potential problem loans as loans rated
substandard that do not meet the definition of a non-performing loan.
Potential problem loans carry a higher probability of default and
require additional attention by management.
(3) Accruing restructured loans consist primarily of
residential real estate and home equity loans that have been modified
and are performing in accordance with those modified terms as of the
dates indicated.
The following table presents data related to non-performing loans by
category (excluding loans held for sale and credit-impaired loans that
were acquired as part of our FDIC-assisted transactions) as of the dates
indicated (in thousands):
|
| 6/30/2014 |
| 3/31/2014 |
| 12/31/2013 |
| 9/30/2013 |
| 6/30/2013 |
Commercial and lease
| |
$
|
36,807
| | |
$
|
42,532
| | |
$
|
22,348
| | |
$
|
22,293
| | |
$
|
25,968
|
Commercial real estate
| |
48,751
| | |
49,541
| | |
58,292
| | |
54,276
| | |
62,335
|
Construction real estate
| |
337
| | |
782
| | |
475
| | |
496
| | |
519
|
Consumer related
| |
24,882
|
| |
25,915
|
| |
25,446
|
| |
25,387
|
| |
26,426
|
Total non-performing loans
| |
$
|
110,777
|
| |
$
|
118,770
|
| |
$
|
106,561
|
| |
$
|
102,452
|
| |
$
|
115,248
|
| | | | | | | | | | | | | | | | | | |
|
The following table represents a summary of other real estate owned
(excluding other real estate owned related to assets acquired in
FDIC-assisted transactions) as of the dates indicated (in thousands):
|
| 6/30/2014 |
| 3/31/2014 |
| 12/31/2013 |
| 9/30/2013 |
| 6/30/2013 |
Balance at the beginning of quarter
| |
$
|
20,928
| | |
$
|
23,289
| | |
$
|
31,356
| | |
$
|
32,993
| | |
$
|
31,462
| |
Transfers in at fair value less estimated costs to sell
| |
112
| | |
539
| | |
104
| | |
1,846
| | |
3,503
| |
Capitalized other real estate owned costs
| |
—
| | |
—
| | |
21
| | |
45
| | |
8
| |
Fair value adjustments
| |
(286
|
)
| |
(140
|
)
| |
(176
|
)
| |
(741
|
)
| |
1,170
| |
Net gains (losses) on sales of other real estate owned
| |
82
| | |
18
| | |
1,007
| | |
(13
|
)
| |
960
| |
Cash received upon disposition
| |
(530
|
)
| |
(2,778
|
)
| |
(9,023
|
)
| |
(2,774
|
)
| |
(4,110
|
)
|
Balance at the end of quarter
| |
$
|
20,306
|
| |
$
|
20,928
|
| |
$
|
23,289
|
| |
$
|
31,356
|
| |
$
|
32,993
|
|
| | | | | | | | | | | | | | | | | | | |
|
Below is a reconciliation of the activity in our allowance for credit
and loan losses for the periods indicated (dollars in thousands):
|
| | |
| | |
| | |
| | |
| | |
|
| Six Months Ended |
| | | | | | | | | | | | | | | | | | June 30, |
| | 2Q14 | | 1Q14 | | 4Q13 | | 3Q13 | | 2Q13 | | | 2014 |
| 2013 |
Allowance for credit losses, balance at the beginning of period
| |
$
|
108,395
| | |
$
|
113,462
| | |
$
|
119,725
| | |
$
|
125,497
| | |
$
|
124,733
| | | |
$
|
113,462
| | |
$
|
128,279
| |
Provision for credit losses
| |
(1,950
|
)
| |
1,150
| | |
(3,000
|
)
| |
(3,304
|
)
| |
500
| | | |
(800
|
)
| |
500
| |
Charge-offs:
| | | | | | | | | | | | | | | | | | | | | | |
Commercial loans
| |
446
| | |
90
| | |
676
| | |
1,686
| | |
433
| | | |
536
| | |
1,344
| |
Commercial loans collateralized by assignment of lease payments
(lease loans)
| |
40
| | |
—
| | |
—
| | |
—
| | |
—
| | | |
40
| | |
—
| |
Commercial real estate
| |
1,727
| | |
7,156
| | |
2,386
| | |
1,236
| | |
1,978
| | | |
8,883
| | |
3,895
| |
Construction real estate
| |
14
| | |
56
| | |
125
| | |
26
| | |
747
| | | |
70
| | |
829
| |
Residential real estate
| |
433
| | |
265
| | |
722
| | |
713
| | |
399
| | | |
698
| | |
1,361
| |
Home equity
| |
817
| | |
619
| | |
1,145
| | |
437
| | |
1,323
| | | |
1,436
| | |
2,110
| |
Indirect vehicle
| |
583
| | |
920
| | |
981
| | |
572
| | |
629
| | | |
1,503
| | |
1,358
| |
Consumer loans
| |
590
|
| |
495
|
| |
572
|
| |
485
|
| |
451
|
| | |
1,085
|
| |
1,016
|
|
Total charge-offs
| |
4,650
|
| |
9,601
|
| |
6,607
|
| |
5,155
|
| |
5,960
|
| | |
14,251
|
| |
11,913
|
|
Recoveries:
| | | | | | | | | | | | | | | | | | | | | | |
Commercial loans
| |
696
| | |
1,628
| | |
1,348
| | |
579
| | |
777
| | | |
2,324
| | |
1,229
| |
Commercial loans collateralized by assignment of lease payments
(lease loans)
| |
130
| | |
—
| | |
—
| | |
—
| | |
987
| | | |
130
| | |
1,131
| |
Commercial real estate
| |
567
| | |
485
| | |
672
| | |
966
| | |
3,647
| | | |
1,052
| | |
4,387
| |
Construction real estate
| |
77
| | |
99
| | |
789
| | |
420
| | |
131
| | | |
176
| | |
407
| |
Residential real estate
| |
6
| | |
519
| | |
18
| | |
48
| | |
199
| | | |
525
| | |
413
| |
Home equity
| |
127
| | |
133
| | |
152
| | |
228
| | |
100
| | | |
260
| | |
214
| |
Indirect vehicle
| |
439
| | |
442
| | |
300
| | |
372
| | |
324
| | | |
881
| | |
739
| |
Consumer loans
| |
68
|
| |
78
|
| |
65
|
| |
74
|
| |
59
|
| | |
146
|
| |
111
|
|
Total recoveries
| |
2,110
|
| |
3,384
|
| |
3,344
|
| |
2,687
|
| |
6,224
|
| | |
5,494
|
| |
8,631
|
|
Total net charge-offs (recoveries)
| |
2,540
|
| |
6,217
|
| |
3,263
|
| |
2,468
|
| |
(264
|
)
| | |
8,757
|
| |
3,282
|
|
Allowance for credit losses
| |
103,905
| | |
108,395
| | |
113,462
| | |
119,725
| | |
125,497
| | | |
103,905
| | |
125,497
| |
Allowance for unfunded credit commitments
| |
(2,995
|
)
| |
(1,643
|
)
| |
(1,716
|
)
| |
(1,694
|
)
| |
(1,812
|
)
| | |
(2,995
|
)
| |
(1,812
|
)
|
Allowance for loan losses
| |
$
|
100,910
|
| |
$
|
106,752
|
| |
$
|
111,746
|
| |
$
|
118,031
|
| |
$
|
123,685
|
| | |
$
|
100,910
|
| |
$
|
123,685
|
|
| | | | | | | | | | | | | | | | | | | | | |
|
Total loans, excluding loans held for sale
| |
$
|
5,556,724
| | |
$
|
5,568,315
| | |
$
|
5,712,551
| | |
$
|
5,586,732
| | |
$
|
5,668,187
| | | |
$
|
5,556,724
| | |
$
|
5,668,187
| |
Average loans, excluding loans held for sale
| |
5,516,735
| | |
5,606,877
| | |
5,572,759
| | |
5,555,036
| | |
5,628,415
| | | |
5,561,559
| | |
5,648,277
| |
Ratio of allowance for loan losses to total loans, excluding loans
held for sale
| |
1.82
|
%
| |
1.92
|
%
| |
1.96
|
%
| |
2.11
|
%
| |
2.18
|
%
| | |
1.82
|
%
| |
2.18
|
%
|
Net loan charge-offs (recoveries) to average loans, excluding loans
held for sale (annualized)
| |
0.18
| | |
0.45
| | |
0.23
| | |
0.18
| | |
(0.02
|
)
| | |
0.32
| | |
0.12
| |
| | | | | | | | | | | | | | | | | | | | | |
|
The following table presents the three elements of our allowance for
loan losses (in thousands):
|
| 6/30/2014 |
| 3/31/2014 |
| 12/31/2013 |
| 9/30/2013 |
| 6/30/2013 |
Commercial related loans:
| | | | | | | | | | | | | | |
General reserve
| |
$
|
70,855
| | |
$
|
75,695
| | |
$
|
78,270
| | |
$
|
87,112
| | |
$
|
87,836
|
Specific reserve
| |
10,270
| | |
11,325
| | |
12,834
| | |
12,378
| | |
16,679
|
Consumer related reserve
| |
19,785
|
| |
19,732
|
| |
20,642
|
| |
18,541
|
| |
19,170
|
Total allowance for loan losses
| |
$
|
100,910
|
| |
$
|
106,752
|
| |
$
|
111,746
|
| |
$
|
118,031
|
| |
$
|
123,685
|
| | | | | | | | | | | | | | | | | | |
|
Although management believes that adequate loan loss allowances have
been established, actual losses are dependent upon future events and, as
such, further additions to the level of loan loss allowances may become
necessary.
INVESTMENT SECURITIES
The following table sets forth, by type, the fair value and amortized
cost of our investment securities, excluding FHLB and FRB stock, as well
as the unrealized gain of our investment securities available for sale
(in thousands):
|
| 6/30/2014 |
| 3/31/2014 |
| 12/31/2013 |
| 9/30/2013 |
| 6/30/2013 |
Securities available for sale: | | | | | | | | | | | | | | | |
Fair value | | | | | | | | | | | | | | | |
Government sponsored agencies and enterprises
| |
$
|
51,727
| | |
$
|
51,836
| | |
$
|
52,068
| | |
$
|
52,527
| | |
$
|
33,935
| |
States and political subdivisions
| |
19,498
| | |
19,350
| | |
19,143
| | |
19,312
| | |
684,710
| |
Mortgage-backed securities
| |
797,783
| | |
726,439
| | |
754,174
| | |
744,722
| | |
701,201
| |
Corporate bonds
| |
275,529
| | |
273,853
| | |
283,070
| | |
263,021
| | |
215,256
| |
Equity securities
| |
10,421
|
| |
10,572
|
| |
10,457
|
| |
10,541
|
| |
10,570
|
|
Total fair value
| |
$
|
1,154,958
|
| |
$
|
1,082,050
|
| |
$
|
1,118,912
|
| |
$
|
1,090,123
|
| |
$
|
1,645,672
|
|
| | | | | | | | | | | | | | |
|
Amortized cost | | | | | | | | | | | | | | | |
Government sponsored agencies and enterprises
| |
$
|
50,096
| | |
$
|
50,291
| | |
$
|
50,486
| | |
$
|
50,678
| | |
$
|
32,050
| |
States and political subdivisions
| |
19,228
| | |
19,285
| | |
19,398
| | |
19,461
| | |
669,791
| |
Mortgage-backed securities
| |
786,496
| | |
717,548
| | |
747,306
| | |
736,070
| | |
690,681
| |
Corporate bonds
| |
271,351
| | |
272,490
| | |
284,083
| | |
265,293
| | |
219,362
| |
Equity securities
| |
10,414
|
| |
10,703
|
| |
10,649
|
| |
10,574
|
| |
10,560
|
|
Total amortized cost
| |
$
|
1,137,585
|
| |
$
|
1,070,317
|
| |
$
|
1,111,922
|
| |
$
|
1,082,076
|
| |
$
|
1,622,444
|
|
| | | | | | | | | | | | | | |
|
Unrealized gain, net | | | | | | | | | | | | | | | |
Government sponsored agencies and enterprises
| |
$
|
1,631
| | |
$
|
1,545
| | |
$
|
1,582
| | |
$
|
1,849
| | |
$
|
1,885
| |
States and political subdivisions
| |
270
| | |
65
| | |
(255
|
)
| |
(149
|
)
| |
14,919
| |
Mortgage-backed securities
| |
11,287
| | |
8,891
| | |
6,868
| | |
8,652
| | |
10,520
| |
Corporate bonds
| |
4,178
| | |
1,363
| | |
(1,013
|
)
| |
(2,272
|
)
| |
(4,106
|
)
|
Equity securities
| |
7
|
| |
(131
|
)
| |
(192
|
)
| |
(33
|
)
| |
10
|
|
Total unrealized gain, net
| |
$
|
17,373
|
| |
$
|
11,733
|
| |
$
|
6,990
|
| |
$
|
8,047
|
| |
$
|
23,228
|
|
| | | | | | | | | | | | | | |
|
Securities held to maturity, at amortized cost: | | | | | | | | | | | | | | | |
States and political subdivisions
| |
$
|
993,937
| | |
$
|
940,610
| | |
$
|
932,955
| | |
$
|
941,273
| | |
$
|
282,655
| |
Mortgage-backed securities
| |
247,455
|
| |
248,082
|
| |
249,578
|
| |
252,271
|
| |
253,779
|
|
Total amortized cost
| |
$
|
1,241,392
|
| |
$
|
1,188,692
|
| |
$
|
1,182,533
|
| |
$
|
1,193,544
|
| |
$
|
536,434
|
|
| | | | | | | | | | | | | | | | | | | |
|
Securities of states and political subdivisions with an approximate fair
value of $656.6 million were transferred from available for sale to held
to maturity during the third quarter of 2013, which is the new cost
basis.
DEPOSIT MIX
The following table shows the composition of deposits based on period
end balances as of the dates indicated (dollars in thousands):
|
| 6/30/2014 |
| 3/31/2014 |
| 12/31/2013 |
| 9/30/2013 |
| 6/30/2013 |
| | |
| % of | | |
| % of | | |
| % of | | |
| % of | | |
| % of |
| | Amount | | Total | | Amount | | Total | | Amount | | Total | | Amount | | Total | | Amount | | Total |
Low cost deposits: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest bearing deposits
| |
$
|
2,605,367
| | |
34
|
%
| |
$
|
2,435,868
| | |
32
|
%
| |
$
|
2,375,863
| | |
32
|
%
| |
$
|
2,269,367
| | |
31
|
%
| |
$
|
2,230,384
| | |
30
|
%
|
Money market and NOW accounts
| |
2,932,089
| | |
38
| | |
2,772,766
| | |
37
| | |
2,682,419
| | |
36
| | |
2,680,127
| | |
37
| | |
2,718,989
| | |
37
| |
Savings accounts
| |
872,324
|
| |
11
|
| |
865,910
|
| |
12
|
| |
855,394
|
| |
12
|
| |
843,671
|
| |
12
|
| |
845,742
|
| |
11
|
|
Total low cost deposits
| |
6,409,780
|
| |
83
|
| |
6,074,544
|
| |
81
|
|
|
5,913,676
|
| |
80
|
| |
5,793,165
|
| |
80
|
| |
5,795,115
|
| |
78
|
|
Certificates of deposit: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Certificates of deposit
| |
1,137,262
| | |
14
| | |
1,188,896
| | |
16
| | |
1,243,433
| | |
17
| | |
1,266,989
| | |
17
| | |
1,357,777
| | |
18
| |
Brokered deposit accounts
| |
216,022
|
| |
3
|
| |
222,307
|
| |
3
|
| |
224,150
|
| |
3
|
| |
238,532
|
| |
3
|
| |
292,504
|
| |
4
|
|
Total certificates of deposit
| |
1,353,284
|
| |
17
|
| |
1,411,203
|
| |
19
|
| |
1,467,583
|
| |
20
|
| |
1,505,521
|
| |
20
|
| |
1,650,281
|
| |
22
|
|
Total deposits
| |
$
|
7,763,064
|
| |
100
|
%
| |
$
|
7,485,747
|
| |
100
|
%
| |
$
|
7,381,259
|
| |
100
|
%
| |
$
|
7,298,686
|
| |
100
|
%
| |
$
|
7,445,396
|
| |
100
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
The following table shows the composition of deposits based on quarterly
average balances for the periods indicated (dollars in thousands):
|
| 2Q14 |
| 1Q14 |
| 4Q13 |
| 3Q13 |
| 2Q13 |
| | |
| % of | | |
| % of | | |
| % of | | |
| % of | | |
| % of |
| | Amount | | Total | | Amount | | Total | | Amount | | Total | | Amount | | Total | | Amount | | Total |
Low cost deposits: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest bearing deposits
| |
$
|
2,476,396
| | |
33
|
%
| |
$
|
2,372,866
| | |
32
|
%
| |
$
|
2,352,901
| | |
32
|
%
| |
$
|
2,258,357
| | |
31
|
%
| |
$
|
2,179,284
| | |
30
|
%
|
Money market and NOW accounts
| |
2,880,910
| | |
38
| | |
2,727,620
| | |
37
| | |
2,685,343
| | |
36
| | |
2,695,479
| | |
37
| | |
2,675,189
| | |
36
| |
Savings accounts
| |
868,694
|
| |
11
|
| |
862,197
|
| |
12
|
| |
848,734
|
| |
12
|
| |
844,647
|
| |
11
|
| |
840,154
|
| |
11
|
|
Total low cost deposits
| |
6,226,000
|
| |
82
|
| |
5,962,683
|
| |
81
|
| |
5,886,978
|
| |
80
|
|
|
5,798,483
|
| |
79
|
| |
5,694,627
|
| |
77
|
|
Certificates of deposit: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Certificates of deposit
| |
1,157,805
| | |
15
| | |
1,210,189
| | |
16
| | |
1,250,049
| | |
17
| | |
1,309,539
| | |
17
| | |
1,406,693
| | |
19
| |
Brokered deposit accounts
| |
220,396
|
| |
3
|
| |
223,926
|
| |
3
|
| |
229,635
|
| |
3
|
| |
263,448
|
| |
4
|
| |
294,277
|
| |
4
|
|
Total certificates of deposit
| |
1,378,201
|
| |
18
|
| |
1,434,115
|
| |
19
|
| |
1,479,684
|
| |
20
|
| |
1,572,987
|
| |
21
|
| |
1,700,970
|
| |
23
|
|
Total deposits
| |
$
|
7,604,201
|
| |
100
|
%
| |
$
|
7,396,798
|
| |
100
|
%
| |
$
|
7,366,662
|
| |
100
|
%
| |
$
|
7,371,470
|
| |
100
|
%
| |
$
|
7,395,597
|
| |
100
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Average low cost deposits increased by $263.3 million (+4.4%) and $531.4
million (+9.3%) from the first quarter of 2014 and second quarter of
2013, respectively, to the second quarter of 2014, driven by growth in
noninterest bearing deposits. Our deposit mix improved over the past
twelve months as average low cost deposits now comprise 82% of total
deposits in the second quarter of 2014 compared to 77% in the second
quarter of 2013.
CAPITAL
Tangible book value per common share increased to $16.81 at June 30,
2014 compared to $15.60 a year ago primarily due to net income less
dividends. Our regulatory capital ratios remain strong. MB Financial
Bank, N.A. was categorized as “well capitalized” at June 30, 2014 under
the Prompt Corrective Action (“PCA”) provisions.
FORWARD-LOOKING STATEMENTS
When used in this press release and in reports filed with or furnished
to the Securities and Exchange Commission, in other press releases or
other public stockholder communications, or in oral statements made with
the approval of an authorized executive officer, the words or phrases
“believe,” “will,” “should,” “will likely result,” “are expected to,”
“will continue” “is anticipated,” “estimate,” “project,” “plans,” or
similar expressions are intended to identify “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. You are cautioned not to place undue reliance on any
forward-looking statements, which speak only as of the date made. These
statements may relate to our future financial performance, strategic
plans or objectives, revenues or earnings projections, or other
financial items. By their nature, these statements are subject to
numerous uncertainties that could cause actual results to differ
materially from those anticipated in the statements.
Important factors that could cause actual results to differ materially
from the results anticipated or projected include, but are not limited
to, the following: (1) expected revenues, cost savings, synergies and
other benefits from the pending Taylor Capital merger and our other
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
requisite regulatory approvals for the pending Taylor Capital merger
might not be obtained; (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; (4) results of examinations by the Office of Comptroller of
Currency, the Board of Governors of the Federal Reserve System 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, including without limitation
litigation relating to the pending Taylor Capital merger; (15) new
legislation or regulatory changes, including but not limited to, the
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the
"Dodd-Frank Act") and regulations adopted thereunder, changes in capital
requirements pursuant to the Dodd-Frank Act and the implementation of
the Basel III capital standards, other governmental initiatives
affecting the financial services industry and changes in federal and/or
state tax laws or interpretations thereof by taxing authorities; (16)
changes in accounting principles, policies or guidelines; (17) our
future acquisitions of other depository institutions or lines of
business; and (18) future goodwill impairment due to changes in our
business, changes in market conditions or other factors.
We do not undertake any obligation to update any forward-looking
statement to reflect circumstances or events that occur after the date
on which the forward-looking statement is made.
TABLES TO FOLLOW
|
| |
| |
| |
| |
| |
MB FINANCIAL, INC. & SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS (Unaudited) |
As of the dates indicated |
(In thousands) |
| | | | | | | | | |
|
| | 6/30/2014 | | 3/31/2014 | | 12/31/2013 | | 9/30/2013 | | 6/30/2013 |
ASSETS | | | | | | | | | | | | | | | |
Cash and due from banks
| |
$
|
294,475
| | |
$
|
268,803
| | |
$
|
205,193
| | |
$
|
215,017
| | |
$
|
152,302
| |
Interest earning deposits with banks
| |
466,820
|
| |
244,819
|
| |
268,266
|
| |
41,700
|
| |
280,618
|
|
Total cash and cash equivalents | |
761,295
| | |
513,622
| | |
473,459
| | |
256,717
| | |
432,920
| |
Federal funds sold
| |
10,000
| | |
7,500
| | |
42,950
| | |
47,500
| | |
7,500
| |
Investment securities:
| | | | | | | | | | | | | | | |
Securities available for sale, at fair value
| |
1,154,958
| | |
1,082,050
| | |
1,118,912
| | |
1,090,123
| | |
1,645,672
| |
Securities held to maturity, at amortized cost
| |
1,241,392
| | |
1,188,692
| | |
1,182,533
| | |
1,193,544
| | |
536,434
| |
Non-marketable securities - FHLB and FRB Stock
| |
51,432
|
| |
51,432
|
| |
51,417
|
| |
50,870
|
| |
50,870
|
|
Total investment securities | |
2,447,782
| | |
2,322,174
| | |
2,352,862
| | |
2,334,537
| | |
2,232,976
| |
Loans held for sale
| |
1,219
| | |
802
| | |
629
| | |
1,120
| | |
2,528
| |
Loans:
| | | | | | | | | | | | | | | |
Total loans, excluding covered loans
| |
5,421,758
| | |
5,394,638
| | |
5,476,831
| | |
5,313,235
| | |
5,359,631
| |
Covered loans
| |
134,966
|
| |
173,677
|
| |
235,720
|
| |
273,497
|
| |
308,556
|
|
Total loans | |
5,556,724
| | |
5,568,315
| | |
5,712,551
| | |
5,586,732
| | |
5,668,187
| |
Less: Allowance for loan losses
| |
100,910
|
| |
106,752
|
| |
111,746
|
| |
118,031
|
| |
123,685
|
|
Net loans | |
5,455,814
| | |
5,461,563
| | |
5,600,805
| | |
5,468,701
| | |
5,544,502
| |
Lease investments, net
| |
127,194
| | |
122,589
| | |
131,089
| | |
112,491
| | |
113,958
| |
Premises and equipment, net
| |
224,245
| | |
221,711
| | |
221,065
| | |
220,574
| | |
219,783
| |
Cash surrender value of life insurance
| |
131,842
| | |
131,008
| | |
130,181
| | |
129,332
| | |
130,565
| |
Goodwill
| |
423,369
| | |
423,369
| | |
423,369
| | |
423,369
| | |
423,369
| |
Other intangibles
| |
21,014
| | |
22,188
| | |
23,428
| | |
24,917
| | |
26,430
| |
Other real estate owned, net
| |
20,306
| | |
20,928
| | |
23,289
| | |
31,356
| | |
32,993
| |
Other real estate owned related to FDIC transactions
| |
15,349
| | |
22,682
| | |
20,472
| | |
24,792
| | |
19,014
| |
FDIC indemnification asset
| |
4,607
| | |
8,055
| | |
11,675
| | |
11,074
| | |
16,337
| |
Other assets
| |
174,655
|
| |
159,112
|
| |
186,154
|
| |
171,138
|
| |
166,784
|
|
Total assets | |
$
|
9,818,691
|
| |
$
|
9,437,303
|
| |
$
|
9,641,427
|
| |
$
|
9,257,618
|
| |
$
|
9,369,659
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | | | | | | | | |
Liabilities | | | | | | | | | | | | | | | |
Deposits:
| | | | | | | | | | | | | | | |
Noninterest bearing
| |
$
|
2,605,367
| | |
$
|
2,435,868
| | |
$
|
2,375,863
| | |
$
|
2,269,367
| | |
$
|
2,230,384
| |
Interest bearing
| |
5,157,697
|
| |
5,049,879
|
| |
5,005,396
|
| |
5,029,319
|
| |
5,215,012
|
|
Total deposits | |
7,763,064
| | |
7,485,747
| | |
7,381,259
| | |
7,298,686
| | |
7,445,396
| |
Short-term borrowings
| |
229,809
| | |
189,872
| | |
493,389
| | |
240,600
| | |
230,547
| |
Long-term borrowings
| |
71,473
| | |
65,664
| | |
62,159
| | |
62,428
| | |
62,786
| |
Junior subordinated notes issued to capital trusts
| |
152,065
| | |
152,065
| | |
152,065
| | |
152,065
| | |
152,065
| |
Accrued expenses and other liabilities
| |
236,964
|
| |
200,175
|
| |
225,873
|
| |
194,371
|
| |
182,784
|
|
Total liabilities | |
8,453,375
|
| |
8,093,523
|
| |
8,314,745
|
| |
7,948,150
|
| |
8,073,578
|
|
Stockholders' Equity | | | | | | | | | | | | | | | |
Common stock
| |
553
| | |
553
| | |
551
| | |
551
| | |
550
| |
Additional paid-in capital
| |
742,824
| | |
740,245
| | |
738,053
| | |
736,294
| | |
736,281
| |
Retained earnings
| |
611,741
| | |
595,301
| | |
581,998
| | |
564,779
| | |
547,116
| |
Accumulated other comprehensive income
| |
13,034
| | |
10,362
| | |
8,383
| | |
9,918
| | |
14,231
| |
Treasury stock
| |
(4,295
|
)
| |
(4,132
|
)
| |
(3,747
|
)
| |
(3,525
|
)
| |
(3,558
|
)
|
Controlling interest stockholders' equity
| |
1,363,857
| | |
1,342,329
| | |
1,325,238
| | |
1,308,017
| | |
1,294,620
| |
Noncontrolling interest
| |
1,459
|
| |
1,451
|
| |
1,444
|
| |
1,451
|
| |
1,461
|
|
Total stockholders' equity | |
1,365,316
|
| |
1,343,780
|
| |
1,326,682
|
| |
1,309,468
|
| |
1,296,081
|
|
Total liabilities and stockholders' equity | |
$
|
9,818,691
|
| |
$
|
9,437,303
|
| |
$
|
9,641,427
|
| |
$
|
9,257,618
|
| |
$
|
9,369,659
|
|
|
| | |
| | |
| | |
| | |
| | |
|
| |
MB FINANCIAL, INC. & SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF INCOME |
(In thousands, except share and per share data) (Unaudited) |
| | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | Six Months Ended |
| | | | | | | | | | | | | | | | | | June 30, |
| | 2Q14 | | 1Q14 | | 4Q13 | | 3Q13 | | 2Q13 | | | 2014 |
| 2013 |
Interest income:
| | | | | | | | | | | | | | | | | | | | | | |
Loans
| |
$
|
55,905
| | |
$
|
56,244
| | |
$
|
58,053
| | |
$
|
60,115
| | |
$
|
59,581
| | | |
$
|
112,149
| | |
$
|
120,374
| |
Investment securities:
| | | | | | | | | | | | | | | | | | | | | | |
Taxable
| |
8,794
| | |
8,146
| | |
7,334
| | |
6,330
| | |
6,280
| | | |
16,940
| | |
12,419
| |
Nontaxable
| |
8,285
| | |
8,067
| | |
8,166
| | |
8,175
| | |
8,163
| | | |
16,352
| | |
16,224
| |
Federal funds sold
| |
4
| | |
5
| | |
6
| | |
7
| | |
2
| | | |
9
| | |
2
| |
Other interest earning accounts
| |
277
|
| |
113
|
| |
270
|
| |
193
|
| |
92
|
| | |
390
|
| |
227
|
|
Total interest income | |
73,265
|
| |
72,575
|
| |
73,829
|
| |
74,820
|
| |
74,118
|
| | |
145,840
|
| |
149,246
|
|
Interest expense:
| | | | | | | | | | | | | | | | | | | | | | |
Deposits
| |
3,754
| | |
3,769
| | |
3,966
| | |
4,433
| | |
5,132
| | | |
7,523
| | |
10,841
| |
Short-term borrowings
| |
95
| | |
100
| | |
227
| | |
112
| | |
116
| | | |
195
| | |
283
| |
Long-term borrowings and junior subordinated notes
| |
1,344
|
| |
1,378
|
| |
1,373
|
| |
1,367
|
| |
1,390
|
| | |
2,722
|
| |
2,957
|
|
Total interest expense | |
5,193
|
| |
5,247
|
| |
5,566
|
| |
5,912
|
| |
6,638
|
| | |
10,440
|
| |
14,081
|
|
Net interest income | |
68,072
| | |
67,328
| | |
68,263
| | |
68,908
| | |
67,480
| | | |
135,400
| | |
135,165
| |
Provision for credit losses
| |
(1,950
|
)
| |
1,150
|
| |
(3,000
|
)
| |
(3,304
|
)
| |
500
|
| | |
(800
|
)
| |
500
|
|
Net interest income after provision for credit losses | |
70,022
|
| |
66,178
|
| |
71,263
|
| |
72,212
|
| |
66,980
|
| | |
136,200
|
| |
134,665
|
|
Non-interest income:
| | | | | | | | | | | | | | | | | | | | | | |
Capital markets and international banking service fees
| |
1,360
| | |
978
| | |
841
| | |
972
| | |
939
| | | |
2,338
| | |
1,747
| |
Commercial deposit and treasury management fees
| |
7,106
| | |
7,144
| | |
6,545
| | |
6,327
| | |
6,029
| | | |
14,250
| | |
11,995
| |
Lease financing, net
| |
14,853
| | |
13,196
| | |
15,808
| | |
14,070
| | |
15,102
| | | |
28,049
| | |
31,365
| |
Trust and asset management fees
| |
5,405
| | |
5,207
| | |
4,975
| | |
4,799
| | |
4,874
| | | |
10,612
| | |
9,368
| |
Card fees
| |
3,304
| | |
2,701
| | |
2,838
| | |
2,745
| | |
2,735
| | | |
6,005
| | |
5,430
| |
Loan service fees
| |
916
| | |
965
| | |
1,214
| | |
1,427
| | |
1,911
| | | |
1,881
| | |
2,922
| |
Consumer and other deposit service fees
| |
3,156
| | |
2,935
| | |
3,481
| | |
3,648
| | |
3,593
| | | |
6,091
| | |
6,839
| |
Brokerage fees
| |
1,356
| | |
1,325
| | |
1,227
| | |
1,289
| | |
1,234
| | | |
2,681
| | |
2,391
| |
Net (loss) gain on securities available for sale
| |
(87
|
)
| |
317
| | |
(15
|
)
| |
1
| | |
14
| | | |
230
| | |
13
| |
Increase in cash surrender value of life insurance
| |
834
| | |
827
| | |
848
| | |
851
| | |
842
| | | |
1,661
| | |
1,686
| |
Net (loss) gain on sale of other assets
| |
(24
|
)
| |
7
| | |
(323
|
)
| |
—
| | |
—
| | | |
(17
|
)
| |
—
| |
Accretion of FDIC indemnification asset
| |
28
| | |
31
| | |
35
| | |
64
| | |
100
| | | |
59
| | |
243
| |
Net gain on sale of loans
| |
187
| | |
59
| | |
342
| | |
177
| | |
506
| | | |
246
| | |
1,145
| |
Other operating income
| |
1,534
|
| |
920
|
| |
1,229
|
| |
1,337
|
| |
1,060
|
| | |
2,454
|
| |
2,498
|
|
Total non-interest income | |
39,928
|
| |
36,612
|
| |
39,045
|
| |
37,707
|
| |
38,939
|
| | |
76,540
|
| |
77,642
|
|
Non-interest expense:
| | | | | | | | | | | | | | | | | | | | | | |
Salaries and employee benefits
| |
46,622
| | |
44,377
| | |
45,517
| | |
44,918
| | |
43,909
| | | |
90,999
| | |
87,423
| |
Occupancy and equipment expense
| |
9,518
| | |
9,592
| | |
9,269
| | |
8,797
| | |
9,408
| | | |
19,110
| | |
18,812
| |
Computer services and telecommunication expense
| |
5,079
| | |
5,084
| | |
5,509
| | |
4,870
| | |
4,617
| | | |
10,163
| | |
8,504
| |
Advertising and marketing expense
| |
2,221
| | |
2,081
| | |
2,085
| | |
1,917
| | |
2,167
| | | |
4,302
| | |
4,270
| |
Professional and legal expense
| |
1,567
| | |
1,779
| | |
3,057
| | |
3,102
| | |
1,353
| | | |
3,346
| | |
2,648
| |
Other intangible amortization expense
| |
1,174
| | |
1,240
| | |
1,489
| | |
1,513
| | |
1,538
| | | |
2,414
| | |
3,082
| |
Net loss (gain) recognized on other real estate owned
| |
191
| | |
187
| | |
(634
|
)
| |
791
| | |
(2,015
|
)
| | |
378
| | |
(1,685
|
)
|
Other real estate expense, net
| |
337
| | |
396
| | |
175
| | |
240
| | |
193
| | | |
733
| | |
332
| |
Other operating expenses
| |
11,321
|
| |
11,311
|
| |
10,174
|
| |
10,117
|
| |
9,083
|
| | |
22,632
|
| |
18,296
|
|
Total non-interest expense | |
78,030
|
| |
76,047
|
| |
76,641
|
| |
76,265
|
| |
70,253
|
| | |
154,077
|
| |
141,682
|
|
Income before income taxes | |
31,920
| | |
26,743
| | |
33,667
| | |
33,654
| | |
35,666
| | | |
58,663
| | |
70,625
| |
Income tax expense
| |
8,814
|
| |
6,774
|
| |
9,811
|
| |
9,254
|
| |
10,373
|
| | |
15,588
|
| |
20,426
|
|
Net income | |
$
|
23,106
|
| |
$
|
19,969
|
| |
$
|
23,856
|
| |
$
|
24,400
|
| |
$
|
25,293
|
| | |
$
|
43,075
|
| |
$
|
50,199
|
|
|
| | |
| | |
| | |
| | |
| | |
|
| |
| | | | | | | | | | | | | | | | | | Six Months Ended |
| | | | | | | | | | | | | | | | | | June 30, |
| | 2Q14 | | 1Q14 | | 4Q13 | | 3Q13 | | 2Q13 | | | 2014 |
|
| 2013 |
Common share data: | | | | | | | | | | | | | | | | | | |
| | |
Basic earnings per common share
| |
$
|
0.42
| | |
$
|
0.37
| | |
$
|
0.44
| | |
$
|
0.45
| | |
$
|
0.46
| | | |
$
|
0.79
| | |
$
|
0.92
|
Diluted earnings per common share
| |
0.42
| | |
0.36
| | |
0.43
| | |
0.44
| | |
0.46
| | | |
0.78
| | |
0.92
|
Weighted average common shares outstanding for basic earnings per
common share
| |
54,669,868
| | |
54,639,951
| | |
54,622,584
| | |
54,565,089
| | |
54,436,043
| | | |
54,654,992
| | |
54,423,992
|
Weighted average common shares outstanding for diluted earnings per
common share
| |
55,200,054
| | |
55,265,188
| | |
55,237,160
| | |
55,130,653
| | |
54,868,075
| | | |
55,232,703
| | |
54,802,427
|
|
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
Selected Financial Data: |
| | | | | | | | | | | | | | | | | | Six Months Ended |
| | | | | | | | | | | | | | | | | | June 30, |
| | 2Q14 | | 1Q14 | | 4Q13 | | 3Q13 | | 2Q13 | | | 2014 | | 2013 |
Performance Ratios: | | | | | | | | | | | | | | | | | | | | | | |
Annualized return on average assets
| |
0.97
|
%
| |
0.86
|
%
| |
0.99
|
%
| |
1.05
|
%
| |
1.09
|
%
| | |
0.92
|
%
| |
1.08
|
%
|
Annualized return on average equity
| |
6.86
| | |
6.07
| | |
7.19
| | |
7.46
| | |
7.82
| | | |
6.47
| | |
7.85
| |
Annualized cash return on average tangible equity(1) | |
10.47
| | |
9.39
| | |
11.23
| | |
11.74
| | |
12.31
| | | |
9.94
| | |
12.42
| |
Net interest rate spread
| |
3.40
| | |
3.51
| | |
3.37
| | |
3.52
| | |
3.46
| | | |
3.46
| | |
3.45
| |
Cost of funds(2) | |
0.26
| | |
0.27
| | |
0.27
| | |
0.30
| | |
0.34
| | | |
0.27
| | |
0.36
| |
Efficiency ratio(3) | |
67.51
| | |
66.67
| | |
67.12
| | |
65.11
| | |
64.26
| | | |
67.10
| | |
63.68
| |
Annualized net non-interest expense to average assets(4) | |
1.54
| | |
1.58
| | |
1.52
| | |
1.52
| | |
1.42
| | | |
1.56
| | |
1.40
| |
Core non-interest income to revenues (5) | |
35.22
| | |
33.41
| | |
34.68
| | |
33.51
| | |
35.01
| | | |
34.33
| | |
34.78
| |
Net interest margin
| |
3.26
| | |
3.36
| | |
3.23
| | |
3.37
| | |
3.33
| | | |
3.31
| | |
3.33
| |
Tax equivalent effect
| |
0.27
| | |
0.28
| | |
0.27
| | |
0.29
| | |
0.28
| | | |
0.28
| | |
0.27
| |
Net interest margin - fully tax equivalent basis(6) | |
3.53
| | |
3.64
| | |
3.50
| | |
3.66
| | |
3.61
| | | |
3.59
| | |
3.60
| |
Loans to deposits
| |
71.58
| | |
74.39
| | |
77.39
| | |
76.54
| | |
76.13
| | | |
71.58
| | |
76.13
| |
Asset Quality Ratios: | | | | | | | | | | | | | | | | | | | | | | |
Non-performing loans(7) to total loans
| |
1.99
|
%
| |
2.13
|
%
| |
1.87
|
%
| |
1.83
|
%
| |
2.03
|
%
| | |
1.99
|
%
| |
2.03
|
%
|
Non-performing assets(7) to total assets
| |
1.34
| | |
1.49
| | |
1.36
| | |
1.45
| | |
1.59
| | | |
1.34
| | |
1.59
| |
Allowance for loan losses to non-performing loans(7) | |
91.09
| | |
89.88
| | |
104.87
| | |
115.21
| | |
107.32
| | | |
91.09
| | |
107.32
| |
Allowance for loan losses to total loans
| |
1.82
| | |
1.92
| | |
1.96
| | |
2.11
| | |
2.18
| | | |
1.82
| | |
2.18
| |
Net loan charge-offs (recoveries) to average loans (annualized)
| |
0.18
| | |
0.45
| | |
0.23
| | |
0.18
| | |
(0.02
|
)
| | |
0.32
| | |
0.12
| |
Capital Ratios: | | | | | | | | | | | | | | | | | | | | | | |
Tangible equity to tangible assets(8) | |
9.89
|
%
| |
10.07
|
%
| |
9.65
|
%
| |
9.87
|
%
| |
9.58
|
%
| | |
9.89
|
%
| |
9.58
|
%
|
Tangible common equity to risk weighted assets(9) | |
13.97
| | |
13.82
| | |
13.27
| | |
13.40
| | |
13.23
| | | |
13.97
| | |
13.23
| |
Book value per common share(10) | |
$
|
24.73
| | |
$
|
24.37
| | |
$
|
24.14
| | |
$
|
23.82
| | |
$
|
23.63
| | | |
$
|
24.73
| | |
$
|
23.63
| |
Less: goodwill and other intangible assets, net of benefit, per
common share
| |
7.92
|
| |
7.94
|
| |
7.98
|
| |
7.99
|
| |
8.03
|
| | |
7.92
|
| |
8.03
|
|
Tangible book value per common share(11) | |
$
|
16.81
| | |
$
|
16.43
| | |
$
|
16.16
| | |
$
|
15.83
| | |
$
|
15.60
| | | |
$
|
16.81
| | |
$
|
15.60
| |
| | | | | | | | | | | | | | | | | | | | | |
|
Total capital (to risk-weighted assets)
| |
17.18
|
%
| |
17.09
|
%
| |
16.53
|
%
| |
16.70
|
%
| |
16.48
|
%
| | |
17.18
|
%
| |
16.48
|
%
|
Tier 1 capital (to risk-weighted assets)
| |
15.92
| | |
15.84
| | |
15.28
| | |
15.44
| | |
15.22
| | | |
15.92
| | |
15.22
| |
Tier 1 capital (to average assets)
| |
11.61
| | |
11.65
| | |
11.22
| | |
11.39
| | |
11.19
| | | |
11.61
| | |
11.19
| |
Tier 1 common capital (to risk-weighted assets)
| |
13.71
| | |
13.59
| | |
13.07
| | |
13.17
| | |
12.94
| | | |
13.71
| | |
12.94
| |
(1) Net cash flow (net income, plus other intangibles
amortization expense, net of tax benefit) divided by average tangible
equity (average common stockholders' 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 non-interest expense excluding non-core
items divided by the sum of net interest income on a fully tax
equivalent basis, total non-interest income less non-core items, and tax
equivalent adjustment on the increase in cash surrender value of life
insurance.
(4) Equals total non-interest expense excluding non-core
items less total non-interest income excluding non-core items, and
including tax equivalent adjustment on the increase in cash surrender
value of life insurance divided by average assets.
(5) Equals total non-interest income excluding non-core items
and tax equivalent adjustment on the increase in cash surrender value of
life insurance divided by the sum of net interest income on a fully tax
equivalent basis, total non-interest income less non-core items, and tax
equivalent adjustment on the increase in cash surrender value of life
insurance.
(6) Represents net interest income on a fully tax equivalent
basis assuming a 35% tax rate, as a percentage of average interest
earning assets.
(7) Non-performing loans excludes purchased credit-impaired
loans and loans held for sale. Non-performing assets excludes purchased
credit-impaired loans, loans held for sale, and other real estate owned
related to FDIC transactions.
(8) Equals total ending stockholders’ equity less goodwill
and other intangibles, net of tax benefit, divided by total assets less
goodwill and other intangibles, net of tax benefit.
(9) Equals total ending common stockholders’ equity less
goodwill and other intangibles, net of tax benefit, divided by total
risk-weighted assets.
(10) Equals total ending stockholders’ equity divided by
common shares outstanding.
(11) Equals total ending stockholders’ equity less goodwill
and other intangibles, net of tax benefit, divided by common shares
outstanding.
NON-GAAP FINANCIAL INFORMATION
This press release contains certain financial information determined by
methods other than in accordance with accounting principles generally
accepted in the United States of America (GAAP). These measures include
core non-interest income, core non-interest income to revenues (with
non-core items excluded from both core non-interest income and
revenues), core non-interest expense, non-core non-interest income and
non-core non-interest expense, net interest income on a fully tax
equivalent basis, net interest margin on a fully tax equivalent basis,
efficiency ratio and the ratio of annualized net non-interest expense to
average assets with net gains and losses on investment securities, net
gains and losses on sale of other assets, and increase in market value
of assets held in trust for deferred compensation excluded from the
non-interest income components of these ratios, and net gains and losses
recognized on other real estate owned, merger-related expenses, loss on
low to moderate income real estate investment and increase in market
value of assets held in trust for deferred compensation excluded from
the non-interest expense components of these ratios, with tax equivalent
adjustment for tax-exempt interest income and increase in cash surrender
value of life insurance, as applicable; ratios of tangible equity to
tangible assets, tangible common equity to risk-weighted assets and Tier
1 common capital to risk-weighted assets; tangible book value per common
share; and annualized cash return on average tangible common equity. Our
management uses these non-GAAP measures, together with the related GAAP
measures, in its analysis of our performance and in making business
decisions. Management also uses these measures for peer comparisons.
Management believes that core and non-core non-interest income and
non-interest expense are useful in assessing our core operating
performance and in understanding the primary drivers of our non-interest
income and non-interest 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 that the tax equivalent adjustments to tax-exempt
interest income and increase in cash surrender value of life insurance
are useful.
Management also believes that by excluding net gains and losses on
investment securities, net gains and losses on sale of other assets, and
increase in market value of assets held in trust for deferred
compensation from the non-interest income components, and excluding net
gains and losses on other real estate owned, merger-related expenses,
loss on low to moderate income real estate investment and increase in
market value of assets held in trust for deferred compensation from the
non-interest expense components, of the efficiency ratio and the ratio
of annualized net non-interest expense to average assets, these ratios
better reflect our core operating performance, as the excluded items do
not pertain to our core business operations and their exclusion makes
these ratios more meaningful when comparing our operating results from
period to period.
In addition, management believes that presenting the ratio of Tier 1
common equity to risk-weighted assets is useful for assessing our
capital strength and for peer comparison purposes. The other measures
exclude the acquisition-related goodwill and other intangible assets,
net of tax benefit, in determining tangible assets, tangible equity,
tangible common equity and average tangible common equity and exclude
other intangible amortization expense, net of tax benefit, in
determining net cash flow available to common stockholders. Management
believes the presentation of these other financial measures, excluding
the impact of such items, provides useful supplemental information that
is helpful in understanding our financial results, as they provide a
method to assess management’s success in utilizing our tangible capital,
as well as our capital strength. Management also believes that providing
measures that exclude balances of acquisition-related goodwill and other
intangible assets, which are subjective components of valuation,
facilitates the comparison of our performance with the performance of
our peers. In addition, management believes that these are standard
financial measures used in the banking industry to evaluate performance.
The non-GAAP disclosures contained herein should not be viewed as
substitutes for the results determined to be in accordance with GAAP,
nor are they necessarily comparable to non-GAAP performance measures
that may be presented by other companies.
A reconciliation of net interest margin on a fully tax equivalent basis
to net interest margin is contained in the tables under “Net Interest
Margin.” A reconciliation of tangible book value per common share to
book value per common share is contained in the “Selected Financial
Ratios” table. Reconciliations of core and non-core non-interest income
and non-interest expense to non-interest income and non-interest expense
are contained in the tables under “Results of Operations—Second Quarter
Results.”
The following table presents a reconciliation of tangible equity to
equity (in thousands):
|
| 6/30/2014 |
| 3/31/2014 |
| 12/31/2013 |
| 9/30/2013 |
| 6/30/2013 |
Stockholders' equity - as reported
| |
$
|
1,365,316
| | |
$
|
1,343,780
| | |
$
|
1,326,682
| | |
$
|
1,309,468
| | |
$
|
1,296,081
|
Less: goodwill
| |
423,369
| | |
423,369
| | |
423,369
| | |
423,369
| | |
423,369
|
Less: other intangible assets, net of tax benefit
| |
13,659
|
| |
14,422
|
| |
15,228
|
| |
16,196
|
| |
17,180
|
Tangible equity
| |
$
|
928,288
|
| |
$
|
905,989
|
| |
$
|
888,085
|
| |
$
|
869,903
|
| |
$
|
855,532
|
| | | | | | | | | | | | | | | | | | |
|
The following table presents a reconciliation of tangible assets to
total assets (in thousands):
|
| 6/30/2014 |
| 3/31/2014 |
| 12/31/2013 |
| 9/30/2013 |
| 6/30/2013 |
Total assets - as reported
| |
$
|
9,818,691
| | |
$
|
9,437,303
| | |
$
|
9,641,427
| | |
$
|
9,257,618
| | |
$
|
9,369,659
|
Less: goodwill
| |
423,369
| | |
423,369
| | |
423,369
| | |
423,369
| | |
423,369
|
Less: other intangible assets, net of tax benefit
| |
13,659
|
| |
14,422
|
| |
15,228
|
| |
16,196
|
| |
17,180
|
Tangible assets
| |
$
|
9,381,663
|
| |
$
|
8,999,512
|
| |
$
|
9,202,830
|
| |
$
|
8,818,053
|
| |
$
|
8,929,110
|
| | | | | | | | | | | | | | | | | | |
|
The following table presents a reconciliation of average tangible equity
to average common stockholders’ equity (in thousands):
|
| | |
| | |
| | |
| | |
| | |
|
| Six Months Ended |
| | | | | | | | | | | | | | | | | | June 30, |
| | 2Q14 | | 1Q14 | | 4Q13 | | 3Q13 | | 2Q13 | | | 2014 |
|
| 2013 |
Average common stockholders' equity - as reported
| |
$
|
1,351,604
| | |
$
|
1,335,223
| | |
$
|
1,315,804
| | |
$
|
1,297,498
| | |
$
|
1,297,364
| | | |
$
|
1,343,458
|
| |
$
|
1,289,187
|
Less: average goodwill
| |
423,369
| | |
423,369
| | |
423,369
| | |
423,369
| | |
423,369
| | | |
423,369
| | |
423,369
|
Less: average other intangible assets, net of tax benefit
| |
13,990
|
| |
14,758
|
| |
15,647
|
| |
16,620
|
| |
17,605
|
| | |
14,372
|
| |
18,106
|
Average tangible common equity
| |
$
|
914,245
|
| |
$
|
897,096
|
| |
$
|
876,788
|
| |
$
|
857,509
|
| |
$
|
856,390
|
| | |
$
|
905,717
|
| |
$
|
847,712
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
The following table presents a reconciliation of net cash flow available
to common stockholders to net income available to common stockholders
(in thousands):
|
| | |
| | |
| | |
| | |
| | |
|
| Six Months Ended |
| | | | | | | | | | | | | | | | | | June 30, |
| | 2Q14 | | 1Q14 | | 4Q13 | | 3Q13 | | 2Q13 | | | 2014 |
|
| 2013 |
Net income - as reported
| |
$
|
23,106
| | |
$
|
19,969
| | |
$
|
23,856
| | |
$
|
24,400
| | |
$
|
25,293
| | | |
$
|
43,075
|
| |
$
|
50,199
|
Add: other intangible amortization expense, net of tax benefit
| |
763
|
| |
806
|
| |
968
|
| |
983
|
| |
1,000
|
| | |
1,569
|
| |
2,003
|
Net cash flow
| |
$
|
23,869
|
| |
$
|
20,775
|
| |
$
|
24,824
|
| |
$
|
25,383
|
| |
$
|
26,293
|
| | |
$
|
44,644
|
| |
$
|
52,202
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
The following table presents a reconciliation of Tier 1 common capital
to Tier 1 capital (in thousands):
|
| 6/30/2014 |
| 3/31/2014 |
| 12/31/2013 |
| 9/30/2013 |
| 6/30/2013 |
Tier 1 capital - as reported
| |
$
|
1,058,504
| | |
$
|
1,038,600
| | |
$
|
1,022,512
| | |
$
|
1,002,883
| | |
$
|
983,997
|
Less: qualifying trust preferred securities
| |
147,500
|
| |
147,500
|
| |
147,500
|
| |
147,500
|
| |
147,500
|
Tier 1 common capital
| |
$
|
911,004
|
| |
$
|
891,100
|
| |
$
|
875,012
|
| |
$
|
855,383
|
| |
$
|
836,497
|
| | | | | | | | | | | | | | | | | | |
|
Efficiency Ratio Calculation (Dollars in Thousands)
|
| | |
| | |
| | |
| | |
| | |
|
| Six Months Ended |
| | | | | | | | | | | | | | | | | | June 30, |
| | 2Q14 | | 1Q14 | | 4Q13 | | 3Q13 | | 2Q13 | | | 2014 |
| 2013 |
Non-interest expense
| |
$
|
78,030
| | |
$
|
76,047
| | |
$
|
76,641
| | |
$
|
76,265
| | |
$
|
70,253
| | | |
$
|
154,077
| | |
$
|
141,682
| |
Less net loss (gain) recognized on other real estate owned
| |
191
| | |
187
| | |
(634
|
)
| |
791
| | |
(2,015
|
)
| | |
378
| | |
(1,685
|
)
|
Less merger related expenses
| |
488
| | |
680
| | |
724
| | |
1,759
| | |
—
| | | |
1,168
| | |
—
| |
Less loss on low to moderate income real estate investment
| |
96
| | |
2,028
| | |
—
| | |
—
| | |
—
| | | |
2,124
| | |
—
| |
Less increase in market value of assets held in trust for deferred
compensation
| |
400
|
| |
152
|
| |
588
|
| |
459
|
| |
21
|
| | |
552
|
| |
504
|
|
Non-interest expense - as adjusted
| |
$
|
76,855
|
| |
$
|
73,000
|
| |
$
|
75,963
|
| |
$
|
73,256
|
| |
$
|
72,247
|
| | |
$
|
149,855
|
| |
$
|
142,863
|
|
| | | | | | | | | | | | | | | | | | | | | |
|
Net interest income
| |
$
|
68,072
| | |
$
|
67,328
| | |
$
|
68,263
| | |
$
|
68,908
| | |
$
|
67,480
| | | |
$
|
135,400
| | |
$
|
135,165
| |
Tax equivalent adjustment
| |
5,677
|
| |
5,581
|
| |
5,655
|
| |
5,905
|
| |
5,594
|
| | |
11,258
|
| |
11,149
|
|
Net interest income on a fully tax equivalent basis
| |
73,749
| | |
72,909
| | |
73,918
| | |
74,813
| | |
73,074
| | | |
146,658
| | |
146,314
| |
Plus non-interest income
| |
39,928
| | |
36,612
| | |
39,045
| | |
37,707
| | |
38,939
| | | |
76,540
| | |
77,642
| |
Plus tax equivalent adjustment on the increase in cash surrender
value of life insurance
| |
449
| | |
445
| | |
457
| | |
458
| | |
454
| | | |
894
| | |
908
| |
Less net (loss) gain on investment securities
| |
(87
|
)
| |
317
| | |
(15
|
)
| |
1
| | |
14
| | | |
230
| | |
13
| |
Less net (loss) gain on sale of other assets
| |
(24
|
)
| |
7
| | |
(323
|
)
| |
—
| | |
—
| | | |
(17
|
)
| |
—
| |
Less increase in market value of assets held in trust for deferred
compensation
| |
400
|
| |
152
|
| |
588
|
| |
459
|
| |
21
|
| | |
552
|
| |
504
|
|
Net interest income plus non-interest income - as adjusted
| |
$
|
113,837
|
| |
$
|
109,490
|
| |
$
|
113,170
|
| |
$
|
112,518
|
| |
$
|
112,432
|
| | |
$
|
223,327
|
| |
$
|
224,347
|
|
| | | | | | | | | | | | | | | | | | | | | |
|
Efficiency ratio
| |
67.51
|
%
| |
66.67
|
%
| |
67.12
|
%
| |
65.11
|
%
| |
64.26
|
%
| | |
67.10
|
%
| |
63.68
|
%
|
Efficiency ratio (without adjustments)
| |
72.25
|
%
| |
73.16
|
%
| |
71.42
|
%
| |
71.53
|
%
| |
66.02
|
%
| | |
72.70
|
%
| |
66.58
|
%
|
| | | | | | | | | | | | | | | | | | | | | |
|
Annualized Net Non-interest Expense to Average Assets Calculation
(Dollars in Thousands)
|
| | |
| | |
| | |
| | |
| | |
|
| Six Months Ended |
| | | | | | | | | | | | | | | | | | June 30, |
| | 2Q14 | | 1Q14 | | 4Q13 | | 3Q13 | | 2Q13 | | | 2014 |
| 2013 |
Non-interest expense
| |
$
|
78,030
| | |
$
|
76,047
| | |
$
|
76,641
| | |
$
|
76,265
| | |
$
|
70,253
| | | |
$
|
154,077
| | |
$
|
141,682
| |
Less net loss (gain) recognized on other real estate owned
| |
191
| | |
187
| | |
(634
|
)
| |
791
| | |
(2,015
|
)
| | |
378
| | |
(1,685
|
)
|
Less merger related expenses
| |
488
| | |
680
| | |
724
| | |
1,759
| | |
—
| | | |
1,168
| | |
—
| |
Less loss on low to moderate income real estate investment
| |
96
| | |
2,028
| | |
—
| | |
—
| | |
—
| | | |
2,124
| | |
—
| |
Less increase in market value of assets held in trust for deferred
compensation
| |
400
|
| |
152
|
| |
588
|
| |
459
|
| |
21
|
| | |
552
|
| |
504
|
|
Non-interest expense - as adjusted
| |
76,855
|
| |
73,000
|
| |
75,963
|
| |
73,256
|
| |
72,247
|
| | |
149,855
|
| |
142,863
|
|
| | | | | | | | | | | | | | | | | | | | | |
|
Non-interest income
| |
39,928
| | |
36,612
| | |
39,045
| | |
37,707
| | |
38,939
| | | |
76,540
| | |
77,642
| |
Less net (loss) gain on investment securities
| |
(87
|
)
| |
317
| | |
(15
|
)
| |
1
| | |
14
| | | |
230
| | |
13
| |
Less net (loss) gain on sale of other assets
| |
(24
|
)
| |
7
| | |
(323
|
)
| |
—
| | |
—
| | | |
(17
|
)
| |
—
| |
Less increase in market value of assets held in trust for deferred
compensation
| |
400
|
| |
152
|
| |
588
|
| |
459
|
| |
21
|
| | |
552
|
| |
504
|
|
Non-interest income - as adjusted
| |
39,639
|
| |
36,136
|
| |
38,795
|
| |
37,247
|
| |
38,904
|
| | |
75,775
|
| |
77,125
|
|
Less tax equivalent adjustment on the increase in cash surrender
value of life insurance
| |
449
|
| |
445
|
| |
457
|
| |
458
|
| |
454
|
| | |
894
|
| |
908
|
|
Net non-interest expense
| |
$
|
36,767
|
| |
$
|
36,419
|
| |
$
|
36,711
|
| |
$
|
35,551
|
| |
$
|
32,889
|
| | |
$
|
73,186
|
| |
$
|
64,830
|
|
| | | | | | | | | | | | | | | | | | | | | |
|
Average assets
| |
$
|
9,575,896
| | |
$
|
9,367,942
| | |
$
|
9,567,388
| | |
$
|
9,261,291
| | |
$
|
9,289,382
| | | |
$
|
9,472,493
| | |
$
|
9,369,042
| |
| | | | | | | | | | | | | | | | | | | | | |
|
Annualized net non-interest expense to average assets
| |
1.54
|
%
| |
1.58
|
%
| |
1.52
|
%
| |
1.52
|
%
| |
1.42
|
%
| | |
1.56
|
%
| |
1.40
|
%
|
| | | | | | | | | | | | | | | | | | | | | |
|
Annualized net non-interest expense to average assets (without
adjustments)
| |
1.60
|
%
| |
1.71
|
%
| |
1.56
|
%
| |
1.65
|
%
| |
1.35
|
%
| | |
1.65
|
%
| |
1.38
|
%
|
| | | | | | | | | | | | | | | | | | | | | |
|
Core Non-interest Income to Revenues Ratio Calculation (Dollars in
Thousands)
|
| | |
| | |
| | |
| | |
| | |
|
| Six Months Ended |
| | | | | | | | | | | | | | | | | | June 30, |
| | 2Q14 | | 1Q14 | | 4Q13 | | 3Q13 | | 2Q13 | | | 2014 |
| 2013 |
Non-interest income
| |
$
|
39,928
| | |
$
|
36,612
| | |
$
|
39,045
| | |
$
|
37,707
| | |
$
|
38,939
| | | |
$
|
76,540
| | |
$
|
77,642
| |
Plus tax equivalent adjustment on the increase in cash surrender
value of life insurance
| |
449
| | |
445
| | |
457
| | |
458
| | |
454
| | | |
894
| | |
908
| |
Less net (loss) gain on investment securities
| |
(87
|
)
| |
317
| | |
(15
|
)
| |
1
| | |
14
| | | |
230
| | |
13
| |
Less net (loss) gain on sale of other assets
| |
(24
|
)
| |
7
| | |
(323
|
)
| |
—
| | |
—
| | | |
(17
|
)
| |
—
| |
Less increase in market value of assets held in trust for deferred
compensation
| |
400
|
| |
152
|
| |
588
|
| |
459
|
| |
21
|
| | |
552
|
| |
504
|
|
Non-interest income - as adjusted
| |
$
|
40,088
|
| |
$
|
36,581
|
| |
$
|
39,252
|
| |
$
|
37,705
|
| |
$
|
39,358
|
| | |
$
|
76,669
|
| |
$
|
78,033
|
|
| | | | | | | | | | | | | | | | | | | | | |
|
Net interest income
| |
$
|
68,072
| | |
$
|
67,328
| | |
$
|
68,263
| | |
$
|
68,908
| | |
$
|
67,480
| | | |
$
|
135,400
| | |
$
|
135,165
| |
Tax equivalent adjustment
| |
5,677
|
| |
5,581
|
| |
5,655
|
| |
5,905
|
| |
5,594
|
| | |
11,258
|
| |
11,149
|
|
Net interest income on a fully tax equivalent basis
| |
73,749
| | |
72,909
| | |
73,918
| | |
74,813
| | |
73,074
| | | |
146,658
| | |
146,314
| |
Plus non-interest income
| |
39,928
| | |
36,612
| | |
39,045
| | |
37,707
| | |
38,939
| | | |
76,540
| | |
77,642
| |
Plus tax equivalent adjustment on the increase in cash surrender
value of life insurance
| |
449
| | |
445
| | |
457
| | |
458
| | |
454
| | | |
894
| | |
908
| |
Less net (loss) gain on investment securities
| |
(87
|
)
| |
317
| | |
(15
|
)
| |
1
| | |
14
| | | |
230
| | |
13
| |
Less net (loss) gain on sale of other assets
| |
(24
|
)
| |
7
| | |
(323
|
)
| |
—
| | |
—
| | | |
(17
|
)
| |
—
| |
Less increase in market value of assets held in trust for deferred
compensation
| |
400
|
| |
152
|
| |
588
|
| |
459
|
| |
21
|
| | |
552
|
| |
504
|
|
Total revenue - as adjusted and on a fully tax equivalent basis
| |
$
|
113,837
|
| |
$
|
109,490
|
| |
$
|
113,170
|
| |
$
|
112,518
|
| |
$
|
112,432
|
| | |
$
|
223,327
|
| |
$
|
224,347
|
|
| | | | | | | | | | | | | | | | | | | | | |
|
Total revenue - unadjusted
| |
$
|
108,000
| | |
$
|
103,940
| | |
$
|
107,308
| | |
$
|
106,615
| | |
$
|
106,419
| | | |
$
|
211,940
| | |
$
|
212,807
| |
| | | | | | | | | | | | | | | | | | | | | |
|
Core non-interest income to revenues ratio
| |
35.22
|
%
| |
33.41
|
%
| |
34.68
|
%
| |
33.51
|
%
| |
35.01
|
%
| | |
34.33
|
%
| |
34.78
|
%
|
| | | | | | | | | | | | | | | | | | | | | |
|
Non-interest income to revenues ratio (without adjustments)
| |
36.97
|
%
| |
35.22
|
%
| |
36.39
|
%
| |
35.37
|
%
| |
36.59
|
%
| | |
36.11
|
%
| |
36.48
|
%
|
| | | | | | | | | | | | | | | | | | | | | |
|
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):
|
| 2Q14 |
| 2Q13 |
|
| 1Q14 |
| | 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
| |
$
|
1,229,799
| | |
$
|
11,912
| | |
3.83
|
%
| |
$
|
1,206,740
| | |
12,613
| | |
4.18
|
%
| | |
$
|
1,232,562
| | |
$
|
12,312
| | |
4.00
|
%
|
Commercial loans collateralized by assignment of lease payments
| |
1,476,618
| | |
14,693
| | |
3.98
| | |
1,340,854
| | |
12,987
| | |
3.87
| | | |
1,479,998
| | |
14,319
| | |
3.87
| |
Real estate commercial
| |
1,620,658
| | |
17,008
| | |
4.15
| | |
1,718,979
| | |
19,736
| | |
4.54
| | | |
1,631,041
| | |
17,332
| | |
4.25
| |
Real estate construction
| |
133,557
|
| |
1,274
|
| |
3.77
| | |
133,705
|
| |
1,270
|
| |
3.76
| | | |
140,920
|
| |
1,278
|
| |
3.63
| |
Total commercial related credits
| |
4,460,632
|
| |
44,887
|
| |
3.98
| | |
4,400,278
|
| |
46,606
|
| |
4.19
| | | |
4,484,521
|
| |
45,241
|
| |
4.04
| |
Other loans
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate residential
| |
310,345
| | |
2,809
| | |
3.62
| | |
306,978
| | |
3,042
| | |
3.96
| | | |
311,760
| | |
2,992
| | |
3.84
| |
Home equity
| |
252,891
| | |
2,678
| | |
4.25
| | |
286,640
| | |
3,076
| | |
4.30
| | | |
263,283
| | |
2,712
| | |
4.18
| |
Indirect
| |
269,556
| | |
3,579
| | |
5.33
| | |
231,577
| | |
3,176
| | |
5.50
| | | |
263,510
| | |
3,391
| | |
5.22
| |
Consumer loans
| |
65,437
|
| |
725
|
| |
4.44
| | |
70,603
|
| |
624
|
| |
3.54
| | | |
62,616
|
| |
676
|
| |
4.38
| |
Total other loans
| |
898,229
|
| |
9,791
|
| |
4.37
| | |
895,798
|
| |
9,918
|
| |
4.44
| | | |
901,169
|
| |
9,771
|
| |
4.40
| |
Total loans, excluding covered loans
| |
5,358,861
| | |
54,678
| | |
4.09
| | |
5,296,076
| | |
56,524
| | |
4.28
| | | |
5,385,690
| | |
55,012
| | |
4.14
| |
Covered loans
| |
158,371
|
| |
2,441
|
| |
6.18
| | |
335,148
|
| |
4,255
|
| |
5.09
| | | |
221,481
|
| |
2,470
|
| |
4.52
| |
Total loans
| |
5,517,232
|
| |
57,119
|
| |
4.15
| | |
5,631,224
|
| |
60,779
|
| |
4.33
| | | |
5,607,171
|
| |
57,482
|
| |
4.16
| |
Taxable investment securities
| |
1,434,300
| | |
8,794
| | |
2.45
| | |
1,377,368
| | |
6,280
| | |
1.82
| | | |
1,384,371
| | |
8,146
| | |
2.35
| |
Investment securities exempt from federal income taxes (3) | |
966,518
| | |
12,748
| | |
5.28
| | |
933,442
| | |
12,559
| | |
5.38
| | | |
935,863
| | |
12,410
| | |
5.30
| |
Federal funds sold
| |
4,359
| | |
4
| | |
0.36
| | |
2,879
| | |
2
| | |
0.27
| | | |
5,889
| | |
5
| | |
0.34
| |
Other interest earning deposits
| |
448,173
|
| |
277
|
| |
0.25
| | |
183,010
|
| |
92
|
| |
0.20
| | | |
187,049
|
| |
113
|
| |
0.25
| |
Total interest earning assets
| |
$
|
8,370,582
| | |
$
|
78,942
|
| |
3.78
|
%
| |
$
|
8,127,923
| | |
$
|
79,712
|
| |
3.93
|
%
| | |
$
|
8,120,343
| | |
$
|
78,156
|
| |
3.90
|
%
|
Non-interest earning assets
| |
1,205,314
|
| | | | | | | |
1,161,459
|
| | | | | | | | |
1,247,599
|
| | | | | | |
Total assets
| |
$
|
9,575,896
|
| | | | | | | |
$
|
9,289,382
|
| | | | | | | | |
$
|
9,367,942
|
| | | | | | |
Interest Bearing Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Core funding:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Money market and NOW accounts
| |
$
|
2,880,910
| | |
$
|
899
| | |
0.13
|
%
| |
$
|
2,675,189
| | |
$
|
833
| | |
0.12
|
%
| | |
$
|
2,727,620
| | |
$
|
848
| | |
0.13
|
%
|
Savings accounts
| |
868,694
| | |
97
| | |
0.04
| | |
840,154
| | |
136
| | |
0.06
| | | |
862,197
| | |
109
| | |
0.05
| |
Certificates of deposit
| |
1,157,805
| | |
1,124
| | |
0.40
| | |
1,406,693
| | |
1,893
| | |
0.55
| | | |
1,210,189
| | |
1,174
| | |
0.40
| |
Customer repurchase agreements
| |
184,178
|
| |
95
|
| |
0.21
| | |
187,496
|
| |
101
|
| |
0.22
| | | |
190,466
|
| |
96
|
| |
0.20
| |
Total core funding
| |
5,091,587
|
| |
2,215
|
| |
0.17
| | |
5,109,532
|
| |
2,963
|
| |
0.23
| | | |
4,990,472
|
| |
2,227
|
| |
0.18
| |
Wholesale funding:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Brokered accounts (includes fee expense)
| |
220,396
| | |
1,634
| | |
2.97
| | |
294,277
| | |
2,271
| | |
3.10
| | | |
223,926
| | |
1,638
| | |
2.97
| |
Other borrowings
| |
236,292
|
| |
1,344
|
| |
2.25
| | |
216,372
|
| |
1,404
|
| |
2.57
| | | |
231,805
|
| |
1,382
|
| |
2.38
| |
Total wholesale funding
| |
456,688
|
| |
2,978
|
| |
2.33
| | |
510,649
|
| |
3,675
|
| |
2.55
| | | |
455,731
|
| |
3,020
|
| |
2.38
| |
Total interest bearing liabilities
| |
$
|
5,548,275
| | |
$
|
5,193
|
| |
0.38
|
%
| |
$
|
5,620,181
| | |
$
|
6,638
|
| |
0.47
|
%
| | |
$
|
5,446,203
| | |
$
|
5,247
|
| |
0.39
|
%
|
Non-interest bearing deposits
| |
2,476,396
| | | | | | | | |
2,179,284
| | | | | | | | | |
2,372,866
| | | | | | | |
Other non-interest bearing liabilities
| |
199,621
| | | | | | | | |
192,553
| | | | | | | | | |
213,650
| | | | | | | |
Stockholders' equity
| |
1,351,604
|
| | | | | | | |
1,297,364
|
| | | | | | | | |
1,335,223
|
| | | | | | |
Total liabilities and stockholders' equity
| |
$
|
9,575,896
|
| | | | | | | |
$
|
9,289,382
|
| | | | | | | | |
$
|
9,367,942
|
| | | | | | |
Net interest income/interest rate spread (4) | | | | |
$
|
73,749
|
| |
3.40
|
%
| | | | |
$
|
73,074
|
| |
3.46
|
%
| | | | | |
$
|
72,909
|
| |
3.51
|
%
|
Taxable equivalent adjustment
| | | | |
5,677
|
| | | | | | | |
5,594
|
| | | | | | | | |
5,581
|
| | | |
Net interest income, as reported
| | | | |
$
|
68,072
|
| | | | | | | |
$
|
67,480
|
| | | | | | | | |
$
|
67,328
|
| | | |
Net interest margin (5) | | | | | | | |
3.26
|
%
| | | | | | | |
3.33
|
%
| | | | | | | | |
3.36
|
%
|
Tax equivalent effect
| | | | | | | |
0.27
|
%
| | | | | | | |
0.28
|
%
| | | | | | | | |
0.28
|
%
|
Net interest margin on a fully tax equivalent basis (5) | | | | | | | |
3.53
|
%
| | | | | | | |
3.61
|
%
| | | | | | | | |
3.64
|
%
|
(1) Non-accrual loans are included in average loans.
(2) Interest income includes amortization of deferred loan
origination fees of $28 thousand and $817 thousand for the three months
ended June 30, 2014 and June 30, 2013, respectively, deferred loan
origination costs of $55 thousand for the three months ended March 31,
2014.
(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):
|
| Six Months Ended June 30, |
| | 2014 |
| 2013 |
| | Average |
| |
| Yield/ | | Average |
| |
| Yield/ |
| | Balance | | Interest | | Rate | | Balance | | Interest | | Rate |
Interest Earning Assets: | | | | | | | | | | | | | | | | | | |
Loans (1) (2) (3):
| | | | | | | | | | | | | | | | | | |
Commercial related credits
| | | | | | | | | | | | | | | | | | |
Commercial
| |
$
|
1,231,171
| | |
$
|
24,224
| | |
3.91
|
%
| |
$
|
1,206,324
| | |
25,172
| | |
4.15
|
%
|
Commercial loans collateralized by assignment of lease payments
| |
1,478,299
| | |
29,012
| | |
3.93
| | |
1,320,946
| | |
25,786
| | |
3.90
| |
Real estate commercial
| |
1,625,821
| | |
34,340
| | |
4.20
| | |
1,726,986
| | |
40,480
| | |
4.66
| |
Real estate construction
| |
137,219
|
| |
2,552
|
| |
3.70
| | |
123,694
|
| |
2,390
|
| |
3.84
| |
Total commercial related credits
| |
4,472,510
|
| |
90,128
|
| |
4.01
| | |
4,377,950
|
| |
93,828
|
| |
4.26
| |
Other loans
| | | | | | | | | | | | | | | | | | |
Real estate residential
| |
311,049
| | |
5,801
| | |
3.73
| | |
309,847
| | |
6,327
| | |
4.08
| |
Home equity
| |
258,060
| | |
5,390
| | |
4.21
| | |
292,319
| | |
6,266
| | |
4.32
| |
Indirect
| |
266,549
| | |
6,970
| | |
5.27
| | |
221,919
| | |
6,198
| | |
5.63
| |
Consumer loans
| |
64,034
|
| |
1,401
|
| |
4.41
| | |
70,484
|
| |
1,231
|
| |
3.52
| |
Total other loans
| |
899,692
|
| |
19,562
|
| |
4.38
| | |
894,569
|
| |
20,022
|
| |
4.51
| |
Total loans, excluding covered loans
| |
5,372,202
| | |
109,690
| | |
4.12
| | |
5,272,519
| | |
113,850
| | |
4.35
| |
Covered loans
| |
189,751
|
| |
4,911
|
| |
5.22
| | |
379,671
|
| |
8,937
|
| |
4.75
| |
Total loans
| |
5,561,953
|
| |
114,601
|
| |
4.16
| | |
5,652,190
|
| |
122,787
|
| |
4.38
| |
Taxable investment securities
| |
1,409,473
| | |
16,940
| | |
2.40
| | |
1,430,539
| | |
12,419
| | |
1.74
| |
Investment securities exempt from federal income taxes (3) | |
951,275
| | |
25,158
| | |
5.29
| | |
922,652
| | |
24,960
| | |
5.41
| |
Federal funds sold
| |
5,120
| | |
9
| | |
0.35
| | |
1,448
| | |
2
| | |
0.27
| |
Other interest earning deposits
| |
318,332
|
| |
390
|
| |
0.25
| | |
189,994
|
| |
227
|
| |
0.24
| |
Total interest earning assets
| |
$
|
8,246,153
| | |
$
|
157,098
|
| |
3.84
|
%
| |
$
|
8,196,823
| | |
$
|
160,395
|
| |
3.95
|
%
|
Non-interest earning assets
| |
1,226,340
|
| | | | | | | |
1,172,219
|
| | | | | | |
Total assets
| |
$
|
9,472,493
|
| | | | | | | |
$
|
9,369,042
|
| | | | | | |
Interest Bearing Liabilities: | | | | | | | | | | | | | | | | | | |
Core funding:
| | | | | | | | | | | | | | | | | | |
Money market and NOW accounts
| |
$
|
2,804,688
| | |
$
|
1,747
| | |
0.13
|
%
| |
$
|
2,706,169
| | |
$
|
1,760
| | |
0.13
|
%
|
Savings accounts
| |
865,463
| | |
206
| | |
0.05
| | |
831,233
| | |
272
| | |
0.07
| |
Certificates of deposit
| |
1,183,852
| | |
2,298
| | |
0.40
| | |
1,459,354
| | |
4,290
| | |
0.61
| |
Customer repurchase agreements
| |
187,305
|
| |
191
|
| |
0.21
| | |
184,593
|
| |
199
|
| |
0.22
| |
Total core funding
| |
5,041,308
|
| |
4,442
|
| |
0.18
| | |
5,181,349
|
| |
6,521
|
| |
0.25
| |
Wholesale funding:
| | | | | | | | | | | | | | | | | | |
Brokered accounts (includes fee expense)
| |
222,151
| | |
3,272
| | |
2.97
| | |
294,286
| | |
4,520
| | |
3.10
| |
Other borrowings
| |
234,062
|
| |
2,726
|
| |
2.32
| | |
237,636
|
| |
3,040
|
| |
2.54
| |
Total wholesale funding
| |
456,213
|
| |
5,998
|
| |
2.36
| | |
531,922
|
| |
7,560
|
| |
2.53
| |
Total interest bearing liabilities
| |
$
|
5,497,521
| | |
$
|
10,440
|
| |
0.38
|
%
| |
$
|
5,713,271
| | |
$
|
14,081
|
| |
0.50
|
%
|
Non-interest bearing deposits
| |
2,424,917
| | | | | | | | |
2,162,266
| | | | | | | |
Other non-interest bearing liabilities
| |
206,597
| | | | | | | | |
204,318
| | | | | | | |
Stockholders' equity
| |
1,343,458
|
| | | | | | | |
1,289,187
|
| | | | | | |
Total liabilities and stockholders' equity
| |
$
|
9,472,493
|
| | | | | | | |
$
|
9,369,042
|
| | | | | | |
Net interest income/interest rate spread (4) | | | | |
$
|
146,658
|
| |
3.46
|
%
| | | | |
$
|
146,314
|
| |
3.45
|
%
|
Taxable equivalent adjustment
| | | | |
11,258
|
| | | | | | | |
11,149
|
| | | |
Net interest income, as reported
| | | | |
$
|
135,400
|
| | | | | | | |
$
|
135,165
|
| | | |
Net interest margin (5)
| | | | | | | |
3.31
|
%
| | | | | | | |
3.33
|
%
|
Tax equivalent effect
| | | | | | | |
0.28
|
%
| | | | | | | |
0.27
|
%
|
Net interest margin on a fully tax equivalent basis (5) | | | | | | | |
3.59
|
%
| | | | | | | |
3.60
|
%
|
(1) Non-accrual loans are included in average loans.
(2) Interest income includes amortization of deferred loan
origination costs of $27 thousand and deferred loan origination fees
$1.8 million for the six months ended June 30, 2014 and 2013,
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.
Contacts:
MB Financial, Inc.
Jill York - Vice President and Chief
Financial Officer
E-Mail: jyork@mbfinancial.com
(888)
422-6562
Source: MB Financial, Inc.
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