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MB Financial, Inc. Reports First Quarter 2012 Net Income Of $21.1 Million, Strong Pre-Tax, Pre-Provision Operating Earnings And Improving Credit Costs

MB Financial, Inc. (NASDAQ: MBFI), the holding company for MB Financial Bank, N.A (“the Bank” or “MB Financial Bank”), announced today first quarter results for 2012. The words “MB Financial,” “the Company,” “we,” “our” and “us” refer to MB Financial, Inc. and its consolidated subsidiaries, unless indicated otherwise. We had net income of $21.1 million and net income available to common stockholders of $17.8 million for the first quarter of 2012 compared to net income of $6.9 million and net income available to common stockholders of $4.3 million for the first quarter of 2011, and net income of $19.5 million and net income available to common stockholders of $16.8 million for the fourth quarter of 2011.

Key items for the quarter were as follows:

“Shareholder Friendly” TARP Repayment:

  • On March 14, 2012, we repurchased all $196 million of preferred stock issued in 2008 to the U.S. Department of Treasury as part of the Troubled Asset Relief Program (“TARP”) Capital Purchase Program. No equity or long term debt was issued in conjunction with the repurchase.
  • The repurchase resulted in a one-time, non-cash after-tax charge of approximately $1.2 million or $0.02 per common share in the first quarter of 2012, related to unaccreted discount recorded at the date of issuance.
  • The repurchase was made with cash on hand as of the repurchase date. Prior to the repurchase date, we entered into and fully utilized a $35.0 million unsecured line of credit agreement with a correspondent bank to supplement holding company cash.

Pre-Tax, Pre-Provision Operating Earnings Remain Strong:

  • Pre-tax, pre-provision operating earnings on a fully tax equivalent basis were $44.5 million, or 2.91% of risk-weighted assets, for the first quarter of 2012 compared to $46.0 million, or 2.87% of risk-weighted assets, for the fourth quarter of 2011.
  • Pre-tax, pre-provision operating earnings on a fully tax equivalent basis to average assets was 1.84% for the first quarter of 2012 compared to 1.85% for the fourth quarter of 2011.
  • Net interest margin on a fully tax equivalent basis was 3.87% for the first quarter of 2012 compared to 3.91% in the fourth quarter of 2011.

Credit Costs Continue to Improve:

  • Our provision for credit losses was $3.1 million for the first quarter of 2012, while our net charge-offs were $5.8 million. Our provision for credit losses and net charge-offs for the fourth quarter of 2011 were $8.0 million and $13.9 million, respectively.
  • Our non-performing loans were $124.7 million or 2.15% of total loans as of March 31, 2012, a decrease of $4.7 million from $129.4 million or 2.17% of total loans at December 31, 2011.
  • Our allowance for loan losses to non-performing loans was 100.59% as of March 31, 2012 compared to 98.00% as of December 31, 2011.
  • Our non-performing assets were $187.8 million or 1.94% of total assets as of March 31, 2012, a decrease of $20.2 million from $208.0 million or 2.12% of total assets as of December 31, 2011.
  • Other real estate owned decreased to $63.1 million as of March 31, 2012 compared to $78.5 million as of December 31, 2011, while losses recognized on other real estate owned increased by $1.1 million to $6.6 million for the first quarter of 2012 compared to the fourth quarter of 2011.

RESULTS OF OPERATIONS

First Quarter Results

Net Interest Income

Net interest income on a fully tax equivalent basis decreased $2.9 million from the fourth quarter of 2011 and decreased by $3.0 million from the first quarter of 2011 to the first quarter of 2012. The decrease from the fourth quarter of 2011 was due primarily to a decrease in average interest earning assets and a decrease in net interest margin. The decrease from the first quarter of 2011 to the first quarter of 2012 was due primarily to a decrease in average interest earning assets.

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