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MB Financial, Inc. Reports Fourth Quarter 2011 Net Income Of $19.5 Million, Fourth Quarter Loan Growth, Strong Pre-Tax, Pre-Provision Income And Improving Credit Quality

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.

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