PART
I.
|
FINANCIAL
INFORMATION
|
|
Item
1.
|
Financial
Statements
|
|
Consolidated
Balance Sheets at September 30, 2006 (Unaudited) and December 31,
2005
|
3
|
|
Consolidated
Statements of Income for the Three and Nine Months ended September
30,
2006 and 2005 (Unaudited)
|
4
|
|
Consolidated
Statements of Cash Flows for the Nine Months ended September 30,
2006
and
2005 (Unaudited)
|
5
- 6
|
|
Notes
to Consolidated Financial Statements (Unaudited)
|
7
- 18
|
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
19
- 34
|
Item
3.
|
Quantitative
and Qualitative Disclosures about Market Risk
|
35
- 37
|
Item
4.
|
Controls
and Procedures
|
37
- 38
|
PART
II.
|
OTHER
INFORMATION
|
|
Item
1A.
|
Risk
Factors
|
38
|
Item
2.
|
Changes
in Securities, Use of Proceeds and Issuer Purchases of Equity
Securities
|
38
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
38
|
Item
6.
|
Exhibits
|
39
|
Signatures
|
40
|
|
September
30,
|
December
31,
|
||||||
2006
|
2005
|
||||||
ASSETS
|
|||||||
Cash
and due from banks
|
$
|
136,938
|
$
|
92,001
|
|||
Interest
bearing deposits with banks
|
8,666
|
12,783
|
|||||
Federal
funds sold
|
36,071
|
-
|
|||||
Investment
securities available for sale
|
1,762,943
|
1,405,844
|
|||||
Trading
securities
|
899
|
-
|
|||||
Loans
held for sale
|
4,850
|
500
|
|||||
Loans
(net of allowance for loan losses of $61,128
at
September 30, 2006 and
|
|
||||||
$44,979
at December 31, 2005)
|
5,090,214
|
3,701,203
|
|||||
Lease
investments, net
|
65,646
|
65,696
|
|||||
Premises
and equipment, net
|
195,091
|
147,701
|
|||||
Cash
surrender value of life insurance
|
119,657
|
90,194
|
|||||
Goodwill,
net
|
379,867
|
125,010
|
|||||
Other
intangibles, net
|
29,828
|
12,594
|
|||||
Other
assets
|
130,454
|
65,539
|
|||||
Total
assets
|
$
|
7,961,124
|
$
|
5,719,065
|
|||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
Liabilities
|
|||||||
Deposits:
|
|||||||
Noninterest
bearing
|
$
|
906,667
|
$
|
694,548
|
|||
Interest
bearing
|
5,157,576
|
3,507,152
|
|||||
Total
deposits
|
6,064,243
|
4,201,700
|
|||||
Short-term
borrowings
|
511,005
|
745,647
|
|||||
Long-term
borrowings
|
298,890
|
71,216
|
|||||
Junior
subordinated notes issued to capital trusts
|
179,230
|
123,526
|
|||||
Accrued
expenses and other liabilities
|
76,289
|
69,990
|
|||||
Total
liabilities
|
7,129,657
|
5,212,079
|
|||||
Stockholders'
Equity
|
|||||||
Common
stock, ($0.01 par value; authorized 40,000,000 shares;
issued
|
|||||||
37,330,205
and 28,912,803 shares at September 30,2006 and
|
|||||||
December
31, 2005)
|
373
|
289
|
|||||
Additional
paid-in capital
|
439,906
|
141,745
|
|||||
Retained
earnings
|
425,867
|
390,407
|
|||||
Accumulated
other comprehensive loss
|
(8,699
|
)
|
(9,453
|
)
|
|||
Less:
747,612 and 453,461 shares of treasury stock, at cost,
|
|||||||
at
September 30, 2006 and December 31, 2005
|
(25,980
|
)
|
(16,002
|
)
|
|||
Total
stockholders' equity
|
831,467
|
506,986
|
|||||
Total
liabilities and stockholders' equity
|
$
|
7,961,124
|
$
|
5,719,065
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
|||||||||||||
2006
|
2005
|
2006
|
2005
|
|||||||||||
Interest
income:
|
||||||||||||||
Loans
|
$
|
87,959
|
$
|
62,156
|
$
|
231,020
|
$
|
170,764
|
||||||
Investment
securities:
|
||||||||||||||
|
Taxable
|
14,134
|
11,563
|
38,427
|
35,903
|
|||||||||
Nontaxable
|
3,054
|
2,536
|
8,492
|
7,457
|
||||||||||
Federal
funds sold
|
46
|
24
|
139
|
25
|
||||||||||
Other
interest bearing accounts
|
123
|
98
|
352
|
255
|
||||||||||
Total
interest income
|
105,316
|
76,377
|
278,430
|
214,404
|
||||||||||
Interest
expense:
|
||||||||||||||
Deposits
|
41,161
|
22,212
|
100,435
|
57,584
|
||||||||||
Short-term
borrowings
|
7,818
|
5,346
|
22,320
|
13,901
|
||||||||||
Long-term
borrowings and
junior subordinated notes
|
4,583
|
2,632
|
11,441
|
7,360
|
||||||||||
Total
interest expense
|
53,562
|
30,190
|
134,196
|
78,845
|
||||||||||
Net
interest income
|
51,754
|
46,187
|
144,234
|
135,559
|
||||||||||
Provision
for loan losses
|
4,000
|
1,750
|
6,600
|
7,150
|
||||||||||
Net
interest income after provision for loan losses
|
47,754
|
44,437
|
137,634
|
128,409
|
||||||||||
Other
income:
|
||||||||||||||
Loan
service fees
|
1,110
|
1,413
|
4,153
|
3,965
|
||||||||||
Deposit
service fees
|
5,157
|
5,065
|
14,817
|
14,603
|
||||||||||
Lease
financing, net
|
2,832
|
3,557
|
9,474
|
10,387
|
||||||||||
Brokerage
fees
|
2,568
|
1,973
|
7,305
|
6,115
|
||||||||||
Trust
and asset management fees
|
1,736
|
1,705
|
4,590
|
4,368
|
||||||||||
Net
gain (loss) on sale of securities available for sale
|
(121)
|
85
|
(527)
|
2,213
|
||||||||||
Increase
in cash surrender value of life insurance
|
1,070
|
1,016
|
2,956
|
2,949
|
||||||||||
Net
gain (loss) on sale of other assets
|
(296)
|
-
|
805
|
1
|
||||||||||
Merchant
card processing
|
1,820
|
630
|
3,414
|
1,579
|
||||||||||
Other
operating income
|
1,739
|
1,279
|
4,194
|
3,865
|
||||||||||
17,615
|
16,723
|
51,181
|
50,045
|
|||||||||||
Other
expense:
|
||||||||||||||
Salaries
and employee benefits
|
24,628
|
20,037
|
65,597
|
57,329
|
||||||||||
Occupancy
and equipment expense
|
6,528
|
5,947
|
18,513
|
17,077
|
||||||||||
Computer
services expense
|
1,801
|
1,430
|
5,053
|
4,147
|
||||||||||
Advertising
and marketing expense
|
1,343
|
2,032
|
3,781
|
4,207
|
||||||||||
Professional
and legal expense
|
784
|
733
|
1,848
|
2,090
|
||||||||||
Brokerage
fee expense
|
1,405
|
957
|
3,899
|
2,970
|
||||||||||
Telecommunication
expense
|
683
|
1,080
|
2,002
|
2,640
|
||||||||||
Other
intangibles amortization expense
|
523
|
240
|
999
|
757
|
||||||||||
Merchant
card processing
|
1,689
|
549
|
3,165
|
1,427
|
||||||||||
Other
operating expenses
|
4,642
|
4,064
|
13,334
|
11,824
|
||||||||||
44,026
|
37,069
|
118,191
|
104,468
|
|||||||||||
Income
before income taxes
|
21,343
|
24,091
|
70,624
|
73,986
|
||||||||||
Income
taxes
|
6,602
|
7,445
|
21,598
|
22,938
|
||||||||||
Net
Income
|
$
|
14,741
|
$
|
16,646
|
$
|
49,026
|
$
|
51,048
|
||||||
Common
share data:
|
||||||||||||||
Basic earnings per common share |
$
|
0.47
|
$
|
0.58
|
$
|
1.67
|
$
|
1.79
|
||||||
Diluted
earnings per common share
|
$
|
0.46
|
$
|
0.57
|
$
|
1.64
|
$
|
1.77
|
||||||
Cash dividends declared per common share |
$
|
0.18
|
$ | 0.15 |
$
|
0.48
|
$
|
0.41
|
||||||
Weighted
average common shares outstanding
|
31,529,245
|
28,506,656
|
29,328,102
|
28,467,292
|
||||||||||
Diluted
weighted average common shares outstanding
|
32,055,721
|
28,955,455
|
29,842,456
|
28,912,076
|
Nine
months Ended
September
30,
|
|||||||
2006
|
2005
|
||||||
Cash
Flows From Operating Activities:
|
|||||||
Net
income
|
$
|
49,026
|
$
|
51,048
|
|||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|||||||
Depreciation
|
27,831
|
26,237
|
|||||
Amortization
of restricted stock awards
|
988
|
635
|
|||||
Compensation
expense for stock option grants
|
1,849
|
1,777
|
|||||
Gain
on sales of premises and equipment and leased equipment
|
(920
|
)
|
(520
|
)
|
|||
Amortization
of other intangibles
|
999
|
757
|
|||||
Provision
for loan losses
|
6,600
|
7,150
|
|||||
Deferred
income tax benefit
|
2,023
|
(1,168
|
)
|
||||
Amortization
of premiums and discounts on investment securities, net
|
6,117
|
9,416
|
|||||
Accretion
of premiums and discounts on loans, net
|
(943
|
)
|
|||||
Trading
securities transactions, net
|
18
|
-
|
|||||
Net
(gain) loss on sale of investment securities
|
527
|
(2,213
|
)
|
||||
Proceeds
from sale of loans
|
360,870
|
16,220
|
|||||
Origination
of loans held for sale
|
(19,772
|
)
|
(15,832
|
)
|
|||
Net
gains on sale of loans
|
(617
|
)
|
(233
|
)
|
|||
Increase
in cash surrender value of life insurance
|
(2,956
|
)
|
(2,949
|
)
|
|||
Deferred
gain amortization on interest only securities pool
termination
|
(718
|
)
|
(431
|
)
|
|||
Increase
in other assets
|
(40,317
|
)
|
(7,127
|
)
|
|||
Decrease
in other liabilities, net
|
(9,364
|
)
|
(8,766
|
)
|
|||
Net
cash provided by operating activities
|
381,241
|
74,001
|
|||||
Cash
Flows From Investing Activities:
|
|||||||
Proceeds
from sales of investment securities available for sale
|
372,792
|
226,721
|
|||||
Proceeds
from maturities and calls of investment securities available for
sale
|
171,992
|
131,778
|
|||||
Purchase
of investment securities available for sale
|
(163,079
|
)
|
(381,141
|
)
|
|||
Net
increase in loans
|
(321,277
|
)
|
(360,027
|
)
|
|||
Purchases
of premises and equipment and leased equipment
|
(30,372
|
)
|
(53,696
|
)
|
|||
Proceeds
from sales of premises and equipment and leased equipment
|
5,752
|
2,536
|
|||||
Cash
paid, net of cash and cash equivalents in acquisitions
|
(58,978
|
)
|
-
|
||||
Principal
paid on lease investments
|
(555
|
)
|
(583
|
)
|
|||
Net
cash used in investing activities
|
(23,725
|
)
|
(434,412
|
)
|
|||
Cash
Flows From Financing Activities:
|
|||||||
Net
increase (decrease) in deposits
|
(20,211
|
)
|
292,176
|
||||
Net
increase (decrease) in short-term borrowings
|
(281,173
|
)
|
95,900
|
||||
Proceeds
from long-term borrowings
|
65,045
|
10,017
|
|||||
Principal
paid on long-term borrowings
|
(49,785
|
)
|
(23,790
|
)
|
|||
Proceeds
from junior subordinated notes issued to capital trusts
|
30,000
|
35,000
|
|||||
Treasury
stock transactions, net
|
(13,943
|
)
|
(4,004
|
)
|
|||
Stock
options exercised
|
2,361
|
3,973
|
|||||
Excess
tax benefits from share-based payment arrangements
|
647
|
622
|
|||||
Dividends
paid on common stock
|
(13,566
|
)
|
(11,714
|
)
|
|||
Net
cash (used in) provided by financing activities
|
(280,625
|
)
|
398,180
|
||||
Net
increase in cash and cash equivalents
|
$
|
76,891
|
$
|
37,769
|
|||
Cash
and cash equivalents:
|
|||||||
Beginning
of period
|
104,784
|
105,437
|
|||||
End
of period
|
$
|
181,675
|
$
|
143,206
|
|||
Supplemental
Disclosures of Cash Flow Information:
|
|||||||
Cash
payments for:
|
|||||||
Interest
paid to depositors and other borrowed funds
|
$
|
132,689
|
$
|
75,133
|
|||
Income
tax paid, net
|
31,336
|
13,582
|
|||||
Supplemental
Schedule of Noncash Investing Activities:
|
|||||||
Loans
transferred to other real estate owned
|
$
|
-
|
$
|
529
|
|||
Loans
securitized transferred to investment securities available for
sale
|
$
|
-
|
$
|
12,088
|
MB
FINANCIAL, INC. & SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS (Continued)
|
|||||||
(Amounts
in thousands)
|
|||||||
(Unaudited)
|
Nine
Months
Ended
September
30,
2006
|
Nine
Months
Ended
September
30,
2005
|
||||||||
Supplemental
Schedule of Noncash Investing Activities:
|
|||||||||
Acquisitions
|
|||||||||
Noncash
assets acquired:
|
|||||||||
Investment
securities available for sale
|
$
|
744,292
|
$
|
-
|
|||||
Trading
securities
|
898
|
-
|
|
||||||
Loans
held for sale
|
1,471
|
-
|
|
||||||
Loans,
net
|
1,418,638
|
-
|
|
||||||
Premises
and equipment, net
|
48,703
|
-
|
|||||||
Goodwill,
net
|
253,390
|
-
|
|||||||
Other
intangibles, net
|
18,233
|
-
|
|||||||
Cash
surrender value of life insurance
|
26,507
|
-
|
|||||||
Other
assets
|
21,321
|
-
|
|||||||
Total
noncash assets acquired:
|
2,533,453
|
$
|
-
|
||||||
|
|||||||||
Liabilities
assumed:
|
|
||||||||
Deposits
|
1,882,754
|
-
|
|||||||
Short-term
borrowings
|
46,532
|
-
|
|
||||||
Long-term
borrowings
|
212,414
|
-
|
|||||||
Junior
subordinated notes issued to capital trusts
|
24,775
|
-
|
|||||||
Accrued
expenses and other liabilities
|
12,571
|
-
|
|||||||
Total
liabilities assumed:
|
2,179,046
|
-
|
|||||||
Net
noncash assets acquired:
|
$
|
354,407
|
$
|
-
|
|||||
|
|||||||||
Cash
and cash equivalents acquired
|
$
|
16,585
|
$
|
-
|
|||||
Stock
issuance in lieu of cash paid in acquisition
|
$
|
296,896
|
$
|
-
|
|||||
Purchase
Price of First Oak Brook (in thousands):
|
|
|
Market
value (market value per share of $35.45) of MB Financial common stock
to
be issued
|
$
|
296,896
|
Cash
to be paid
|
|
74,095
|
Transaction
costs, net of tax of $5,172
|
|
11,294
|
|
$
|
382,285
|
Allocation
of the purchase price
|
|
|
Historical
net assets of First Oak Brook as of August 25, 2006
|
$
|
135,493
|
Fair
market value adjustments as of August 25, 2006
|
|
|
Loans
|
$
|
(32,952)
|
Premises
and Equipment
|
|
6,379
|
Goodwill
|
|
253,390
|
Core
deposit intangibles
|
|
18,233
|
Junior
subordinated debt issued to capital trusts
|
|
(1,379)
|
Other
borrowings
|
(547)
|
|
Deferred
taxes on purchase accounting adjustments
|
|
3,668
|
|
$
|
382,285
|
|
|
|
Deferred
taxes on purchase accounting adjustments netted with the deferred
taxes on
transaction costs
|
$
|
8,840
|
Three
Months Ended September 30,
|
Nine
Months Ended September 30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Net
interest income after provision for loan losses
|
$
|
48,639
|
$
|
59,821
|
$
|
166,269
|
$
|
173,816
|
|||||
Noninterest
income
|
21,006
|
22,072
|
68,525
|
65,358
|
|||||||||
Noninterest
expense
|
54,147
|
49,926
|
156,571
|
141,948
|
|||||||||
Income
before income taxes
|
15,498
|
31,967
|
78,223
|
97,226
|
|||||||||
Income
taxes
|
4,465
|
9,918
|
23,674
|
30,340
|
|||||||||
Net
income
|
$
|
11,033
|
$
|
22,049
|
54,549
|
66,886
|
|||||||
Per
common share information
|
|||||||||||||
Earnings
|
$
|
0.30
|
$
|
0.60
|
$
|
1.49
|
$
|
1.82
|
|||||
Diluted
earnings
|
$
|
0.30
|
$
|
0.59
|
$
|
1.47
|
$
|
1.79
|
|||||
Average
common shares issued and outstanding
|
36,626,650
|
36,880,964
|
36,598,106
|
36,841,600
|
|||||||||
Average
diluted common shares outstanding
|
37,153,126
|
37,329,763
|
37,112,460
|
37,286,384
|
|||||||||
Three
Months Ended
September
30,
|
Nine
months Ended
September
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Net
income
|
$
|
14,741
|
$
|
16,646
|
$
|
49,026
|
$
|
51,048
|
|||||
Unrealized
holding gains (losses) on investment securities, net of tax
|
11,330
|
(7,295
|
)
|
411
|
(11,742
|
)
|
|||||||
Reclassification
adjustments for (gains) losses included in net income, net of tax
|
79
|
(56
|
)
|
343
|
(1,439
|
)
|
|||||||
Other
comprehensive income (loss), net of tax
|
11,409
|
(7,351
|
)
|
754
|
(
13,181
|
)
|
|||||||
Comprehensive
income
|
$
|
26,150
|
$
|
9,295
|
$
|
49,780
|
$
|
37,867
|
Three
Months Ended
September
30,
|
Nine
months Ended
September
30,
|
||||||||||||
Basic:
|
2006
|
2005
|
2006
|
2005
|
|||||||||
Net
income
|
$
|
14,741
|
$
|
16,646
|
$
|
49,026
|
$
|
51,048
|
|||||
Average
shares outstanding
|
31,529,245
|
28,506,656
|
29,328,102
|
28,467,292
|
|||||||||
Basic
earnings per share
|
$
|
0.47
|
$
|
0.58
|
$
|
1.67
|
$
|
1.79
|
|||||
Diluted:
|
|||||||||||||
Net
income
|
$
|
14,741
|
$
|
16,646
|
$
|
49,026
|
$
|
51,048
|
|||||
Average
shares outstanding
|
31,529,245
|
28,506,656
|
29,328,102
|
28,467,292
|
|||||||||
Net
effect of dilutive stock options (1)
|
526,476
|
448,799
|
514,354
|
444,784
|
|||||||||
Total
|
32,055,721
|
28,955,455
|
$
|
29,842,456
|
$
|
28,912,076
|
|||||||
Diluted
earnings per share
|
$
|
0.46
|
$
|
0.57
|
$
|
1.64
|
$
|
1.77
|
(1) |
Includes
the common stock equivalents for stock options and restricted share
rights
that are dilutive.
|
September
30,
|
December
31,
|
||||||
2006
|
2005
|
||||||
Balance
at beginning of period
|
$
|
125,010
|
$
|
123,628
|
|||
Goodwill
from business combinations (1)
|
254,857
|
1,382
|
|||||
Balance
at end of period
|
$
|
379,867
|
$
|
125,010
|
(1) |
The
purchase price paid for the Company’s acquisition of LaSalle Systems
Leasing, Inc. in August of 2002 included a $4.0 million deferred
payment
tied to LaSalle’s operating results for a four year period subsequent to
the acquisition date. The transaction generated approximately $5.6
million
in goodwill which includes a $1.5 million adjustment made in the
first
nine months of 2006 and a $1.4 million adjustment made in 2005 for
deferred payments.
|
September
30,
|
December
31,
|
||||||
2006
|
2005
|
||||||
Balance
at beginning of period
|
$
|
12,594
|
$
|
13,587
|
|||
Amortization
expense
|
(999
|
)
|
(993
|
)
|
|||
Other
intangibles from business combinations
|
18,233
|
-
|
|||||
Balance
at end of period
|
$
|
29,828
|
$
|
12,594
|
|||
Gross
carrying amount
|
$
|
47,494
|
$
|
29,261
|
|||
Accumulated
amortization
|
(17,666
|
)
|
(16,667
|
)
|
|||
Net
book value
|
$
|
29,828
|
$
|
12,594
|
Amount
|
||||||
Year
ending December 31,
|
||||||
2006
|
$
|
971
|
||||
2007
|
3,504
|
|||||
2008
|
3,255
|
|||||
2009
|
3,116
|
|||||
2010
|
2,927
|
|||||
Thereafter
|
16,055
|
|||||
$
|
29,828
|
Three
months
|
Nine
months
|
||||
ended
|
ended
|
||||
September
30, 2005
|
September
30, 2005
|
||||
(In
thousands, except per
share
data)
|
|||||
(In
thousands, except per
share
data)
|
|||||
Income
before income taxes, originally reported
|
$
|
24,695
|
$
|
75,763
|
|
Stock-based
compensation expense under the fair value method
|
|
(604)
|
|
(1,777)
|
|
Income
before income taxes, restated
|
$
|
24,091
|
$
|
73,986
|
|
Net
Income, originally reported
|
$
|
17,039
|
$
|
52,203
|
|
Stock-based
compensation expense under the fair value method,
|
|||||
net
of tax
|
|
(393)
|
|
(1,155)
|
|
Net
Income, restated
|
$
|
16,646
|
$
|
51,048
|
|
Net
income per share (basic), originally reported
|
$
|
0.60
|
$
|
1.83
|
|
Net
income per share (basic), restated
|
0.58
|
1.79
|
|||
|
|||||
Net
income per share (diluted), originally reported
|
$
|
0.59
|
|
$
|
1.80
|
Net
income per share (diluted), restated
|
0.57
|
1.77
|
Weighted
|
|||||||||
Average
|
|||||||||
Weighted
|
Remaining
|
Aggregate
|
|||||||
Average
|
Contractual
|
Intrinsic
|
|||||||
Number
of
|
Exercise
|
Term
|
Value
|
||||||
Options
|
Price
|
(In
Years)
|
(in
millions)
|
||||||
Options
outstanding as of December 31, 2005
|
1,870,353
|
$25.29
|
|||||||
Granted
|
438,989
|
$36.46
|
|||||||
Assumed
in purchase
|
251,312
|
$23.30
|
|||||||
Exercised
|
(99,994)
|
$17.32
|
|||||||
Expired
or cancelled
|
-
|
$
0.00
|
|||||||
Forfeited
|
(42,705)
|
$32.07
|
|||||||
Options
outstanding as of September 30, 2006
|
2,417,955
|
$27.32
|
6.14
|
$
23.1
|
|||||
Options
exercisable as of September 30, 2006
|
1,246,692
|
$19.94
|
4.01
|
$
21.1
|
|
|||||
September
30, 2006
|
September
30, 2005
|
||||
Expected
volatility
|
|
16.62%
|
22.00%
|
||
Risk
free interest rate
|
|
5.12%
|
4.30%
|
||
Dividend
yield
|
|
|
1.61%
|
1.20%
|
|
Expected
life
|
|
|
6
years
|
6
years
|
Weighted
Average
|
|||||
Number
of Shares
|
Grant
Date Fair Value
|
||||
Shares
Outstanding at December 31, 2005
|
80,018
|
$37.68
|
|||
Granted
|
46,877
|
35.78
|
|||
Vested
|
(9,104)
|
35.39
|
|||
Cancelled
|
(3,783)
|
38.61
|
|||
Shares
Outstanding at September 30, 2006
|
114,008
|
$38.22
|
|||
September
30,
|
December
31,
|
||||||||||||
2006
|
2005
|
||||||||||||
Weighted
Average
Interest
Rate
|
Amount
|
Weighted
Average
Interest
Rate
|
Amount
|
||||||||||
Federal
funds purchased
|
-
|
%
|
$
|
-
|
4.46
|
%
|
$
|
30,600
|
|||||
Assets
sold under agreements to repurchase:
|
|||||||||||||
Customer
repurchase agreements
|
3.54
|
238,520
|
2.47
|
196,024
|
|||||||||
Company
repurchase agreements
|
5.30
|
48,020
|
4.35
|
281,305
|
|||||||||
Federal
Home Loan Bank advances
|
5.23
|
209,193
|
4.43
|
237,718
|
|||||||||
Treasury,
tax and loan demand notes
|
5.34
|
3,272
|
-
|
||||||||||
Correspondent
bank line of credit of $30 million
|
6.07
|
12,000
|
-
|
||||||||||
4.47
|
%
|
$
|
511,005
|
3.89
|
%
|
$
|
745,647
|
Amount
|
||||
Year
ending December 31,
|
||||
2006
|
$
|
1,886
|
||
2007
|
6,002
|
|||
2008
|
80,419
|
|||
2009
|
2,061
|
|||
2010
|
439
|
|||
Thereafter
|
208,083
|
|||
$
|
298,890
|
MB
Financial (2)
Capital
Trust III
|
MB
Financial
Capital
Trust II
|
MB
Financial
Capital
Trust I
|
Coal
City
Capital
Trust I
|
|
Junior
Subordinated Notes:
|
||||
Principal
balance
|
$
10,310
|
$
36,083
|
$
61,669
|
$
25,774
|
Annual
interest rate
|
3-mo
LIBOR + 1.50%
|
3-mo
LIBOR + 1.40%
|
8.60%
|
3-mo
LIBOR + 1.80%
|
Stated
maturity date
|
September
23, 2036
|
September
15, 2035
|
September
30, 2032
|
September
1, 2028
|
Call
date
|
September
23, 2011
|
September
15, 2010
|
September
30, 2007
|
September
1, 2008
|
Trust
Preferred Securities:
|
||||
Face
value
|
$
10,000
|
$
35,000
|
$
59,800
|
$
25,000
|
Annual
distribution rate
|
3-mo
LIBOR + 1.50%
|
3-mo
LIBOR + 1.40%
|
8.60%
|
3-mo
LIBOR + 1.80%
|
Issuance
date
|
July
2006
|
August
2005
|
August
2002
|
July
1998
|
Distribution
dates (1)
|
Quarterly
|
Quarterly
|
Quarterly
|
Quarterly
|
MB
Financial (2)
Capital
Trust IV
|
FOBB
(3)
Capital
Trust III
|
FOBB
(3)
Capital
Trust II
|
FOBB
(3)
Capital
Trust I
|
|
Junior
Subordinated Notes:
|
||||
Principal
balance
|
$
20,619
|
$
5,155
|
$
12,372
|
$
6,186
|
Annual
interest rate
|
3-mo
LIBOR + 1.52%
|
3-mo
LIBOR + 2.80%
|
3-mo
LIBOR + 3.45%
|
10.60%
|
Stated
maturity date
|
September
15, 2036
|
January
23, 2034
|
June
26, 2032
|
September
7, 2030
|
Call
date
|
September
15, 2011
|
January
23, 2009
|
June
26, 2007
|
September
7, 2010
|
Trust
Preferred Securities:
|
||||
Face
value
|
$
20,000
|
$
5,000
|
$
12,000
|
$
6,000
|
Annual
distribution rate
|
3-mo
LIBOR + 1.52%
|
3-mo
LIBOR + 2.80%
|
3-mo
LIBOR + 3.45%
|
10.60%
|
Issuance
date
|
August
2006
|
December
2003
|
June
2002
|
September
2000
|
Distribution
dates (1)
|
Quarterly
|
Quarterly
|
Quarterly
|
Semi-annual
|
(1) |
All
cash distributions are cumulative.
|
(2) |
The
company issued MB Financial Capital Trust III & IV during the third
quarter of 2006.
|
(3) |
As
the merger with FOBB was treated as a purchase, FOBB’s trust preferred
securities were not outstanding for the Company as of December 31,
2005
|
September
30, 2006
|
December
31, 2005
|
|||||||||||||||||||||
Weighted-Average
|
||||||||||||||||||||||
Notional
Amount
|
Estimated
Fair Value
|
Years
to Maturity
|
Receive
Rate
|
Pay
Rate
|
Notional
Amount
|
Estimated
Fair Value
|
||||||||||||||||
Derivative
instruments designated as hedges of fair value:
|
||||||||||||||||||||||
Pay
fixed/receive variable swaps (1)
|
$
|
17,693
|
$
|
641
|
5.7
|
7.47
|
%
|
6.05
|
%
|
$
|
28,553
|
$
|
837
|
|||||||||
Pay
variable/receive fixed swaps (2)
|
205,405
|
(5,472
|
)
|
5.7
|
4.64
|
%
|
5.34
|
%
|
218,851
|
(5,454
|
)
|
|||||||||||
Non-hedging
derivative instruments (3):
|
||||||||||||||||||||||
Pay
fixed/receive variable swaps
|
53,550
|
423
|
7.2
|
7.23
|
%
|
6.58
|
%
|
33,932
|
(603
|
)
|
||||||||||||
Pay
variable/receive fixed swaps
|
58,145
|
(576
|
)
|
7.2
|
6.44
|
%
|
7.08
|
%
|
35,081
|
568
|
||||||||||||
Total
portfolio swaps
|
$
|
334,793
|
$
|
(4,984
|
)
|
6.2
|
5.52
|
%
|
5.88
|
%
|
$
|
316,417
|
$
|
(4,652
|
)
|
|||||||
(1)
Hedges fixed-rate commercial real estate loans
|
||||||||||||||||||||||
(2)
Hedges fixed-rate callable brokered deposits
|
||||||||||||||||||||||
(3)
These portfolio swaps are not designated as hedging instruments under
SFAS
No. 133.
|
Contract
Amount
|
|||||||
September
30,
2006
|
December
31,
2005
|
||||||
Commitments
to extend credit:
|
|||||||
Home
equity lines
|
$
|
469,346
|
$
|
194,579
|
|||
Other
commitments
|
1,395,721
|
913,142
|
|||||
Letters
of credit:
|
|||||||
Standby
|
110,103
|
76,651
|
|||||
Commercial
|
53,242
|
32,781
|
· |
We
incurred merger related expenses (severance, contract termination
costs,
moving expenses, etc.) of approximately $800 thousand. These were
expenses
incurred at MB Financial that were required to be expensed and not
included in the purchase accounting.
|
· |
We
sold $345 million of indirect auto loans held by Oak Brook Bank on
September 29, 2006 to remove low yielding assets. Furthermore, we
have
significantly scaled back our indirect auto origination business.
These
loans were marked to fair value on the merger date. Due to movement
in
interest rates from the merger date to sale date, the sale resulted
in a
gain of $338 thousand. The yield on the loans sold was approximately
6.34%.
|
· |
We
sold of $335 million in investment securities held by Oak Brook Bank,
the
majority of which were callable, to remove negative convexity from
our
balance sheet. These securities were marked to fair value on the
merger
date. Due to movement in interest rates from the merger date to the
sale
dates, a loss of $66 thousand was recorded on the
sale.
|
· |
On
July 27, 2006 we issued $10 million of trust preferred securities
at a
rate of 3 month LIBOR plus 1.50%, and on August 23, 2006 we issued
$20
million in trust preferred securities at a rate of 3 month LIBOR
plus
1.52%, to fund part of the cash portion of the merger consideration
paid
to FOBB stockholders. On September 29, 2006, through Oak Brook Bank,
we
issued $10 million of subordinated debt at a rate of 3 month LIBOR
plus
1.25%.
|
· |
Oak
Brook Bank’s results were included for 36 days in the quarter. Net income
related to Oak Brook Bank for those 36 days was $2.0 million, including
the carrying cost of cash consideration paid to former FOBB stockholders.
Oak Brook Bank’s net income does not reflect cost savings which we expect
to realize after the conversion of Oak Brook Bank’s systems to MB
Financial Bank’s systems and the merger of Oak Brook Bank into MB
Financial Bank, both of which occurred on November 2, 2006. We believe
that we will meet our previously announced cost savings target of
$12.6
million (pre-tax) and may exceed that target. We issued approximately
8.4
million shares of common stock and paid approximately $74.1 million
in
cash to FOBB shareholders in connection with the
merger.
|
Three
Months Ended September 30,
|
||||||||||||
2006
|
2005
|
|||||||||||
Average
Balance
|
|
Interest
|
Yield/
Rate
|
|
|
Average
Balance
|
|
Interest
|
Yield/
Rate
|
|
||
|
|
|||||||||||
Interest
Earning Assets:
|
|
|||||||||||
Loans
(1) (2)
|
$
|
4,583,830
|
$
|
87,913
|
7.61
|
%
|
$
|
3,670,401
|
$
|
62,125
|
6.72
|
%
|
Loans
exempt from federal income taxes (3)
|
4,056
|
72
|
6.95
|
2,923
|
48
|
6.43
|
|
|||||
Taxable
investment securities
|
1,205,210
|
14,134
|
4.69
|
1,119,324
|
11,563
|
4.13
|
|
|||||
Investment
securities exempt from federal income taxes (3)
|
330,526
|
4,698
|
5.56
|
278,281
|
3,901
|
5.49
|
|
|||||
Federal
funds sold
|
3,449
|
46
|
5.22
|
2,686
|
24
|
3.50
|
|
|||||
Other
interest bearing deposits
|
|
10,239
|
|
123
|
4.77
|
|
12,105
|
|
98
|
3.21
|
|
|
Total
interest earning assets
|
6,137,310
|
|
106,986
|
6.92
|
5,085,720
|
|
77,759
|
6.07
|
|
|||
Non-interest
earning assets
|
|
710,183
|
|
527,251
|
|
|||||||
Total
assets
|
$
|
6,847,493
|
$
|
5,612,971
|
|
|||||||
|
||||||||||||
Interest
Bearing Liabilities:
|
|
|||||||||||
Deposits:
|
|
|||||||||||
NOW
and money market deposit accounts
|
$
|
898,455
|
$
|
5,546
|
2.45
|
%
|
$
|
745,373
|
$
|
2,585
|
1.38
|
%
|
Savings
deposits
|
464,353
|
802
|
0.69
|
503,375
|
787
|
0.62
|
|
|||||
Time
deposits
|
3,018,685
|
34,813
|
4.58
|
2,264,255
|
18,840
|
3.30
|
|
|||||
Short-term
borrowings
|
659,964
|
7,818
|
4.70
|
679,256
|
5,346
|
3.12
|
|
|||||
Long-term
borrowings and junior subordinated notes
|
|
327,866
|
|
4,583
|
5.47
|
|
182,393
|
|
2,632
|
5.65
|
|
|
Total
interest bearing liabilities
|
5,369,323
|
|
53,562
|
3.96
|
4,374,652
|
|
30,190
|
2.74
|
|
|||
Non-interest
bearing deposits
|
767,925
|
682,955
|
|
|||||||||
Other
non-interest bearing liabilities
|
67,594
|
58,132
|
|
|||||||||
Stockholders’
equity
|
|
642,651
|
|
497,232
|
|
|||||||
Total
liabilities and stockholders’ equity
|
$
|
6,847,493
|
$
|
5,612,971
|
|
|||||||
Net
interest income/interest rate spread (4)
|
$
|
53,424
|
2.96
|
%
|
$
|
47,569
|
3.33
|
%
|
||||
Taxable
equivalent adjustment
|
|
1,670
|
|
1,382
|
|
|||||||
Net
interest income, as reported
|
$
|
51,754
|
$
|
46,187
|
|
|||||||
Net
interest margin (5)
|
3.35
|
%
|
3.60
|
%
|
||||||||
Tax
equivalent effect
|
0.10
|
%
|
0.11
|
%
|
||||||||
Net
interest margin on a fully tax equivalent basis (5)
|
3.45
|
%
|
3.71
|
%
|
(1) |
Non-accrual
loans are included in average
loans.
|
(2) |
Interest
income includes amortization of deferred loan origination fees of
$1.5
million and $1.7 million for the three months ended September 30,
2006 and
2005, 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.
|
Nine
Months Ended September 30,
|
|||||||||||||||||||
2006
|
2005
|
||||||||||||||||||
Average
Balance
|
Interest
|
Yield/
Rate
|
Average
Balance
|
Interest
|
Yield/
Rate
|
||||||||||||||
Interest
Earning Assets:
|
|||||||||||||||||||
Loans
(1) (2)
|
$
|
4,107,618
|
$
|
230,897
|
7.52
|
%
|
$
|
3,530,563
|
$
|
170,671
|
6.46
|
%
|
|||||||
Loans
exempt from federal income taxes (3)
|
3,675
|
189
|
6.78
|
2,969
|
144
|
6.40
|
|||||||||||||
Taxable
investment securities
|
1,121,903
|
38,427
|
4.57
|
1,139,989
|
35,903
|
4.20
|
|||||||||||||
Investment
securities exempt from federal income taxes (3)
|
309,430
|
13,065
|
5.57
|
271,774
|
11,472
|
5.57
|
|||||||||||||
Federal
funds sold
|
3,760
|
139
|
4.87
|
953
|
25
|
3.46
|
|||||||||||||
Other
interest bearing deposits
|
11,540
|
352
|
4.08
|
13,680
|
255
|
2.49
|
|||||||||||||
Total
interest earning assets
|
5,557,926
|
283,069
|
6.81
|
4,959,928
|
218,470
|
5.89
|
|||||||||||||
Non-interest
earning assets
|
605,707
|
513,314
|
|||||||||||||||||
Total
assets
|
$
|
6,163,633
|
$
|
5,473,242
|
|||||||||||||||
Interest
Bearing Liabilities:
|
|||||||||||||||||||
Deposits:
|
|||||||||||||||||||
NOW
and money market deposit accounts
|
$
|
778,579
|
$
|
12,456
|
2.14
|
%
|
$
|
772,133
|
$
|
7,186
|
1.24
|
%
|
|||||||
Savings
deposits
|
462,727
|
2,449
|
0.71
|
515,685
|
2,390
|
0.62
|
|||||||||||||
Time
deposits
|
2,658,392
|
85,530
|
4.30
|
2,121,306
|
48,008
|
3.03
|
|||||||||||||
Short-term
borrowings
|
680,847
|
22,320
|
4.38
|
678,704
|
13,901
|
2.74
|
|||||||||||||
Long-term
borrowings and junior subordinated notes
|
261,234
|
11,441
|
5.78
|
174,748
|
7,360
|
5.55
|
|||||||||||||
Total
interest bearing liabilities
|
4,841,779
|
134,196
|
3.71
|
4,262,576
|
78,845
|
2.47
|
|||||||||||||
Non-interest
bearing deposits
|
703,463
|
666,284
|
|||||||||||||||||
Other
non-interest bearing liabilities
|
63,535
|
55,500
|
|||||||||||||||||
Stockholders’
equity
|
554,856
|
488,882
|
|||||||||||||||||
Total
liabilities and stockholders’ equity
|
$
|
6,163,633
|
$
|
5,473,242
|
|||||||||||||||
Net
interest income/interest rate spread (4)
|
$
|
148,873
|
3.10
|
%
|
$
|
139,625
|
3.42
|
%
|
|||||||||||
Taxable
equivalent adjustment
|
4,639
|
4,066
|
|||||||||||||||||
Net
interest income, as reported
|
$
|
144,234
|
$
|
135,559
|
|||||||||||||||
Net
interest margin (5)
|
3.47
|
%
|
3.65
|
%
|
|||||||||||||||
Tax
equivalent effect
|
0.11
|
%
|
0.11
|
%
|
|||||||||||||||
Net
interest margin on a fully tax equivalent basis (5)
|
3.58
|
%
|
3.76
|
%
|
(1) |
Non-accrual
loans are included in average
loans.
|
(2) |
Interest
income includes amortization of deferred loan origination fees of
$5.1
million and $5.5 million for the nine months ended September 30,
2006 and
2005, 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.
|
Three
Months Ended
September
30, 2006
|
Nine
months Ended
September
30, 2006
|
||||||||||||||||||
Compared
to September 30,
2005
|
Compared
to September 30, 2005
|
||||||||||||||||||
Change
|
Change
|
Change
|
Change
|
||||||||||||||||
Due
to
|
Due
to
|
Total
|
Due
to
|
Due
to
|
Total
|
||||||||||||||
Volume
|
Rate
|
Change
|
Volume
|
Rate
|
Change
|
||||||||||||||
Interest
Earning Assets:
|
|||||||||||||||||||
Loans
|
$
|
16,666
|
$
|
9,122
|
$
|
25,788
|
$
|
30,171
|
$
|
30,055
|
$
|
60,226
|
|||||||
Loans
exempt from federal income taxes (1)
|
21
|
3
|
24
|
35
|
10
|
45
|
|||||||||||||
Taxable
investment securities
|
917
|
1,654
|
2,571
|
(579
|
)
|
3,103
|
2,524
|
||||||||||||
Investment
securities exempt from federal Income taxes (1)
|
731
|
66
|
797
|
1,591
|
2
|
1,593
|
|||||||||||||
Federal
funds sold
|
8
|
14
|
22
|
101
|
13
|
114
|
|||||||||||||
Other
interest bearing deposits
|
(17
|
)
|
42
|
25
|
(44
|
)
|
141
|
97
|
|||||||||||
Total
increase (decrease) in interest income
|
18,326
|
10,901
|
29,227
|
31,275
|
33,324
|
64,599
|
|||||||||||||
Interest
Bearing Liabilities:
|
|||||||||||||||||||
NOW
and money market deposit accounts
|
614
|
2,347
|
2,961
|
60
|
5,210
|
5,270
|
|||||||||||||
Savings
deposits
|
(65
|
)
|
80
|
15
|
(260
|
)
|
319
|
59
|
|||||||||||
Time
deposits
|
7,360
|
8,613
|
15,973
|
14,078
|
23,444
|
37,522
|
|||||||||||||
Short-term
borrowings
|
(156
|
)
|
2,628
|
2,472
|
44
|
8,375
|
8,419
|
||||||||||||
Long-term
borrowings and junior subordinated notes
|
2,028
|
(77
|
)
|
1,951
|
3,777
|
304
|
4,081
|
||||||||||||
Total
increase (decrease) in interest expense
|
9,781
|
13,591
|
23,372
|
17,699
|
37,652
|
55,351
|
|||||||||||||
Increase
(decrease) in net interest income
|
$
|
8,545
|
$
|
(2,690
|
)
|
$
|
5,855
|
$
|
13,576
|
$
|
(4,328
|
)
|
$
|
9,248
|
(1) |
Non-taxable
loan and investment income is presented on a fully tax equivalent
basis
assuming a 35% tax rate.
|
September
30,
|
December
31,
|
September
30,
|
|||||||||||||||||
2006
|
2005
|
2005
|
|||||||||||||||||
Amount
|
%
of Total
|
Amount
|
%
of Total
|
Amount
|
%
of Total
|
||||||||||||||
Commercial
related credits
|
|||||||||||||||||||
Commercial
loans
|
$
|
1,054,426
|
20
|
%
|
$
|
833,046
|
22
|
%
|
$
|
832,304
|
23
|
%
|
|||||||
Commercial
loans collateralized by assignment of lease payments
|
439,123
|
9
|
%
|
299,053
|
8
|
%
|
283,171
|
7
|
%
|
||||||||||
Commercial
real estate
|
1,740,988
|
34
|
%
|
1,456,585
|
39
|
%
|
1,438,333
|
39
|
%
|
||||||||||
Construction
real estate
|
828,157
|
16
|
%
|
521,434
|
14
|
%
|
485,762
|
13
|
%
|
||||||||||
Total
commercial related credits
|
4,062,694
|
79
|
%
|
3,110,118
|
83
|
%
|
3,039,570
|
82
|
%
|
||||||||||
Other
loans
|
|||||||||||||||||||
Residential
real estate
|
545,244
|
10
|
%
|
387,167
|
10
|
%
|
408,273
|
11
|
%
|
||||||||||
Indirect
vehicle
|
99,788
|
2
|
%
|
-
|
-
|
-
|
-
|
||||||||||||
Consumer
loans
|
443,616
|
9
|
%
|
248,897
|
7
|
%
|
251,104
|
7
|
%
|
||||||||||
Gross
loans (1)
|
5,151,342
|
100
|
%
|
3,746,182
|
100
|
%
|
3,698,947
|
100
|
%
|
||||||||||
Allowance
for loan losses
|
(61,128
|
)
|
(44,979
|
)
|
(44,779
|
)
|
|||||||||||||
Net
loans
|
$
|
5,090,214
|
$
|
3,701,203
|
$
|
3,654,168
|
(1) |
Gross
loan balances at September 30, 2006, December 31, 2005, and September
30,
2005 are net of unearned income, including net deferred loan fees
of $3.9
million, $3.6 million, and $3.5 million,
respectively.
|
September
30,
2006
|
December
31,
2005
|
September
30,
2005
|
||||||||
Non-performing
loans:
|
||||||||||
Non-accrual
loans
|
$
|
20,440
|
$
|
20,841
|
$
|
18,753
|
||||
Loans
90 days or more past due, still accruing interest
|
435
|
321
|
514
|
|||||||
Total
non-performing loans
|
20,875
|
21,162
|
19,267
|
|||||||
Other
real estate owned
|
37
|
354
|
266
|
|||||||
Repossessed
vehicles
|
259
|
-
|
-
|
|||||||
Total
non-performing assets
|
$
|
21,171
|
$
|
21,516
|
$
|
19,533
|
||||
Total
non-performing loans to total loans
|
0.41
|
%
|
0.56
|
%
|
0.52
|
%
|
||||
Allowance
for loan losses to non-performing loans
|
292.83
|
%
|
212.55
|
%
|
232.41
|
%
|
||||
Total
non-performing assets to total assets
|
0.27
|
%
|
0.38
|
%
|
0.34
|
%
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
September
30,
2006
|
September
30,
2005
|
September
30,
2006
|
September
30,
2005
|
||||||||||
Balance
at beginning of period
|
$
|
45,716
|
$
|
44,790
|
$
|
44,979
|
$
|
44,266
|
|||||
Additions
from acquisition
|
16,426
|
-
|
16,426
|
-
|
|||||||||
Provision
for loan losses
|
4,000
|
1,750
|
6,600
|
7,150
|
|||||||||
Charge-offs
|
(6,439
|
)
|
(2,687
|
)
|
(9,885
|
)
|
(8,662
|
)
|
|||||
Recoveries
|
1,425
|
926
|
3,008
|
2,025
|
|||||||||
Balance
at September 30,
|
$
|
61,128
|
$
|
44,779
|
$
|
61,128
|
$
|
44,779
|
|||||
Total
loans at September 30,
|
$
|
5,151,342
|
$
|
3,698,947
|
$
|
5,151,342
|
$
|
3,698,947
|
|||||
Ratio
of allowance for loan losses to total loans
|
1.19
|
%
|
1.21
|
%
|
1.19
|
%
|
1.21
|
%
|
|||||
Net
loan charge-offs to average loans (annualized)
|
0.43
|
%
|
0.19
|
%
|
0.22
|
%
|
0.25
|
%
|
September
30,
|
December
31,
|
September
30,
|
||||||||
2006
|
2005
|
2005
|
||||||||
Direct
finance leases:
|
||||||||||
Minimum
lease payments
|
$
|
42,322
|
$
|
40,264
|
$
|
36,872
|
||||
Estimated
unguaranteed residual values
|
5,626
|
4,801
|
4,398
|
|||||||
Less:
unearned income
|
(4,136
|
)
|
(3,540
|
)
|
(3,055
|
)
|
||||
Direct
finance leases (1)
|
$
|
43,812
|
$
|
41,525
|
$
|
38,215
|
||||
Leveraged
leases:
|
||||||||||
Minimum
lease payments
|
$
|
26,466
|
$
|
36,109
|
$
|
38,170
|
||||
Estimated
unguaranteed residual values
|
3,579
|
4,051
|
3,763
|
|||||||
Less:
unearned income
|
(2,079
|
)
|
(2,649
|
)
|
(2,836
|
)
|
||||
Less:
related non-recourse debt
|
(24,815
|
)
|
(34,018
|
)
|
(35,872
|
)
|
||||
Leveraged
leases (1)
|
$
|
3,151
|
$
|
3,493
|
$
|
3,225
|
||||
Operating
leases:
|
||||||||||
Equipment,
at cost
|
$
|
128,991
|
$
|
127,815
|
$
|
130,554
|
||||
Less
accumulated depreciation
|
(63,345
|
)
|
(62,119
|
)
|
(67,706
|
)
|
||||
Lease
investments, net
|
$
|
65,646
|
$
|
65,696
|
$
|
62,848
|
Residual
Values
|
|||||||||||||
End
of initial lease term December 31,
|
Direct
Finance Leases
|
Leveraged
Leases
|
Operating
Leases
|
Total
|
|||||||||
2006
|
$
|
509
|
$
|
84
|
$
|
2,848
|
$
|
3,441
|
|||||
2007
|
1,901
|
1,182
|
4,916
|
7,999
|
|||||||||
2008
|
1,721
|
1,281
|
4,626
|
7,628
|
|||||||||
2009
|
1,001
|
586
|
3,383
|
4,970
|
|||||||||
2010
|
146
|
446
|
2,125
|
2,717
|
|||||||||
2011
|
348
|
-
|
3,843
|
4,191
|
|||||||||
$
|
5,626
|
$
|
3,579
|
$
|
21,741
|
$
|
30,946
|
At
September 30, 2006
|
At
December 31, 2005
|
At
September 30, 2005
|
|||||||||||||||||
Amortized
|
Fair
|
Amortized
|
Fair
|
Amortized
|
Fair
|
||||||||||||||
Cost
|
Value
|
Cost
|
Value
|
Cost
|
Value
|
||||||||||||||
U.S.
Treasury securities (1)
|
$
|
14,289
|
$
|
14,233
|
$
|
13,597
|
$
|
13,550
|
$
|
13,668
|
$
|
13,673
|
|||||||
U.S.
Government agencies
|
722,468
|
719,939
|
335,032
|
332,270
|
326,301
|
321,629
|
|||||||||||||
States
and political subdivisions
|
360,320
|
360,328
|
295,033
|
293,706
|
280,357
|
281,954
|
|||||||||||||
Mortgage-backed
securities
|
552,415
|
541,698
|
652,428
|
642,576
|
655,917
|
645,751
|
|||||||||||||
Corporate
bonds
|
58,500
|
58,486
|
60,046
|
59,443
|
60,226
|
59,895
|
|||||||||||||
Equity
securities
|
68,680
|
68,612
|
64,253
|
64,299
|
63,588
|
63,678
|
|||||||||||||
Debt
securities issued by foreign governments
|
546
|
546
|
-
|
-
|
25
|
25
|
|||||||||||||
Total
|
$
|
1,777,218
|
$
|
1,763,842
|
$
|
1,420,389
|
$
|
1,405,844
|
$
|
1,400,082
|
$
|
1,386,605
|
Payments
Due by Period
|
|||||||||||
Contractual
Obligations
|
Total
|
Less
than 1 Year
|
1
-
3 Years
|
3
-
5 Years
|
More
than 5 Years
|
||||||
Time
deposits
|
$
|
3,528,003
|
$
|
2,982,696
|
$
|
356,419
|
$
|
63,638
|
$
|
125,250
|
|
Long-term
borrowings
|
298,890
|
5,610
|
89,597
|
38,909
|
164,774
|
||||||
Junior
subordinated notes issued to capital trusts
|
179,230
|
-
|
-
|
-
|
179,230
|
||||||
Operating
leases
|
22,008
|
2,967
|
4,115
|
2,114
|
12,812
|
||||||
Capital
expenditures
|
5,591
|
5,591
|
-
|
-
|
-
|
||||||
Total
|
$
|
4,033,722
|
$
|
2,996,864
|
$
|
450,131
|
$
|
104,661
|
$
|
482,066
|
|
Commitments
to extend credit and letters of credit
|
$
|
2,028,412
|
Time
to Maturity or Repricing
|
||||||||||||||||
0
- 92
|
92
- 365
|
1
- 5
|
Over
5
|
|||||||||||||
Days
|
Days
|
Years
|
Years
|
Total
|
||||||||||||
Interest
Earning Assets:
|
||||||||||||||||
Interest
bearing deposits with banks
|
$
|
7,235
|
$
|
351
|
$
|
1,080
|
$
|
-
|
$
|
8,666
|
||||||
Federal
funds sold
|
36,071
|
-
|
-
|
-
|
36,071
|
|||||||||||
Investment
securities available for sale
|
171,009
|
328,043
|
641,836
|
622,055
|
1,762,943
|
|||||||||||
Loans
held for sale
|
4,850
|
-
|
-
|
-
|
4,850
|
|||||||||||
Loans
|
2,997,667
|
659,874
|
1,396,262
|
97,539
|
5,151,342
|
|||||||||||
Total
interest earning assets
|
$
|
3,216,832
|
$
|
988,268
|
$
|
2,039,178
|
$
|
719,594
|
$
|
6,963,872
|
||||||
Interest
Bearing Liabilities:
|
||||||||||||||||
NOW
and money market deposit
|
||||||||||||||||
accounts
|
$
|
101,065
|
$
|
303,648
|
$
|
498,652
|
$
|
227,051
|
$
|
1,130,416
|
||||||
Savings
deposits
|
47,915
|
142,271
|
216,238
|
92,733
|
499,157
|
|||||||||||
Time
deposits
|
1,386,766
|
1,774,623
|
364,083
|
2,531
|
3,528,003
|
|||||||||||
Short-term
borrowings
|
302,628
|
207,889
|
488
|
-
|
511,005
|
|||||||||||
Long-term
borrowings
|
95,175
|
7,829
|
93,503
|
102,383
|
298,890
|
|||||||||||
Junior
subordinated notes issued
|
||||||||||||||||
to
capital trusts
|
110,486
|
-
|
-
|
68,744
|
179,230
|
|||||||||||
Total
interest bearing liabilities
|
$
|
2,044,035
|
$
|
2,436,260
|
$
|
1,172,964
|
$
|
493,442
|
$
|
6,146,701
|
||||||
Rate
sensitive assets (RSA)
|
$
|
3,216,832
|
$
|
4,205,100
|
$
|
6,244,278
|
$
|
6,963,872
|
$
|
6,963,872
|
||||||
Rate
sensitive liabilities (RSL)
|
2,044,035
|
4,480,295
|
5,653,259
|
6,146,701
|
6,146,701
|
|||||||||||
Cumulative
GAP
|
1,172,797
|
(275,195
|
)
|
591,019
|
817,171
|
817,171
|
||||||||||
(GAP=RSA-RSL)
|
||||||||||||||||
RSA/Total
assets
|
40.41
|
%
|
52.82
|
%
|
78.43
|
%
|
87.47
|
%
|
87.47
|
%
|
||||||
RSL/Total
assets
|
25.68
|
%
|
56.28
|
%
|
71.01
|
%
|
77.21
|
%
|
77.21
|
%
|
||||||
GAP/Total
assets
|
14.73
|
%
|
(3.46)
|
%
|
7.42
|
%
|
10.26
|
%
|
10.26
|
%
|
||||||
GAP/RSA
|
36.46
|
%
|
(6.54)
|
%
|
9.46
|
%
|
11.73
|
%
|
11.73
|
%
|
Immediate
|
Change
in Net Interest Income Over One Year Horizon
|
|||||||||
Changes
in
|
At
September 30, 2006
|
At
December 31, 2005
|
||||||||
Levels
of
|
Dollar
|
Percentage
|
Dollar
|
Percentage
|
||||||
Interest
Rates
|
Change
|
Change
|
Change
|
Change
|
||||||
+
2.00 %
|
$
|
10,175
|
4.36 %
|
$
|
6,770
|
3.56
%
|
||||
+
1.00
|
5,848
|
2.51
|
4,376
|
2.30
|
||||||
(1.00)
|
(5,565)
|
(2.38)
|
(6,006)
|
(3.16)
|
||||||
(2.00)
|
(15,476)
|
(6.63)
|
(14,893)
|
(7.83)
|
Gradual
|
Change
in Net Interest Income Over One Year Horizon
|
|||||||||
Changes
in
|
At
September 30, 2006
|
At
December 31, 2005
|
||||||||
Levels
of
|
Dollar
|
Percentage
|
Dollar
|
Percentage
|
||||||
Interest
Rates
|
Change
|
Change
|
Change
|
Change
|
||||||
+
2.00 %
|
$
|
8,907
|
3.82
%
|
$
|
5,517
|
2.90
%
|
||||
+
1.00
|
4,821
|
2.07
|
3,674
|
1.93
|
||||||
(1.00)
|
(2,522)
|
(1.08)
|
(4,002)
|
(2.11)
|
||||||
(2.00)
|
(7,191)
|
(3.08)
|
(9,084)
|
(4.78)
|
EXHIBIT
INDEX
|
|
Exhibit
Number
|
Description
|
2.1
|
Amended
and Restated Agreement and Plan of Merger, dated as of April 19,
2001, by
and among the Registrant, MB Financial, Inc., a Delaware corporation
(“Old
MB Financial”) and MidCity Financial (incorporated herein by reference to
Appendix A to the joint proxy statement-prospectus filed by the Registrant
pursuant to Rule 424(b) under the Securities Act of 1933 with the
Securities and Exchange Commission (the “Commission”) on October 9,
2001)
|
2.2
|
Agreement
and Plan of Merger, dated as of November 1, 2002, by and among the
Registrant, MB Financial Acquisition Corp II and South Holland Bancorp,
Inc. (incorporated herein by reference to Exhibit 2 to the Registrant’s
Current Report Form 8-K filed on November 5, 2002 (File No.
0-24566-01))
|
2.3
|
Agreement
and Plan of Merger, dated as of January 9, 2004, by and among the
Registrant and First SecurityFed Financial, Inc. (incorporated herein
by
reference to Exhibit 2 to the Registrant’s Current Report on Form 8-K
filed on January 14, 2004 (File No.0-24566-01))
|
2.4
|
Agreement
and Plan of Merger, dated as of May 1, 2006, by and among the Registrant,
MBFI Acquisition Corp. and First Oak Brook Bancshares, Inc. (incorporated
herein by reference to Exhibit 2.1 to the Registrant’s Current Report on
Form 8-K filed on May 2, 2006 (File No.0-24566-01))
|
3.1
|
Charter
of the Registrant, as amended (incorporated herein by reference to
Exhibit
3.1 to the Registrant’s Annual Report on Form 10-K for the year ended
December 31, 2001 (File No. 0-24566-01))
|
3.2
|
Bylaws
of the Registrant, as amended (incorporated herein by reference to
Exhibit
3.2 to Amendment No. One to the Registration Statement on Form S-1
of the
Registrant and MB Financial Capital Trust I filed on August 7, 2002
(File
Nos. 333-97007 and 333-97007-01))
|
4.1
|
The
Registrant hereby agrees to furnish to the Commission, upon request,
the
instruments defining the rights of the holders of each issue of long-term
debt of the Registrant and its consolidated subsidiaries
|
4.2
|
Certificate
of Registrant’s Common Stock (incorporated herein by reference to Exhibit
4.1 to Amendment No. One to the Registrant’s Registration Statement on
Form S-4 (No. 333-64584))
|
10.1
|
Reserved
|
10.2
|
Employment
Agreement between the Registrant and Mitchell Feiger (incorporated
herein
by reference to Exhibit 10.2 to the Registrant’s Annual Report on Form
10-K for the year-end December 31, 2002 (File No.
0-24566-01))
|
10.3
|
Form
of Employment Agreement between the Registrant and Burton Field
(incorporated herein by reference to Exhibit 10.5 to Old MB Financial’s
Annual Report on Form 10-K for the fiscal year ended December 31,
1999
(File No. 0-24566))
|
10.3A
|
Amendment
No. One to Employment Agreement between MB Financial Bank, N.A. and
Burton
Field (incorporated herein by reference to Exhibit 10.3A to the
Registrant’s Registration Statement on Form S-4 filed on April 6, 2004
(File No. 333-114252))
|
EXHIBIT
INDEX
|
|
Exhibit
Number
|
Description
|
10.3B
|
Amendment
No. Two to Employment Agreement between MB Financial Bank, N.A. and
Burton
Field (incorporated herein by reference to Exhibit 10.3B to the
Registrant’s Annual Report on Form 10-K for the year-end December 31, 2005
(File No. 0-24566-01)
|
10.4
|
Form
of Change of Control Severance Agreement between MB Financial Bank,
National Association and each of Thomas Panos, Jill E. York, Thomas
P.
Fitzgibbon, Jr., Jeffrey L. Husserl and others (incorporated herein
by
reference to Exhibit 10.4 to the Registrant’s Annual Report on Form 10-K
for the year ended December 31, 2001 (File No. 0-24566-01))
|
10.5
|
Avondale
Financial Corp. 1995 Stock Option and Incentive Plan (incorporated
herein
by reference to Exhibit 4.3 to the Registration Statement on Form
S-8 of
Old MB Financial (then known as Avondale Financial Corp.) (No.
33-98860))
|
10.6
|
Coal
City Corporation 1995 Stock Option Plan (incorporated herein by reference
to Exhibit 10.6 to the Registrant’s Registration Statement on Form S-4
(No. 333-64584))
|
10.7
|
MB
Financial, Inc. 1997 Omnibus Incentive Plan (the “Omnibus Incentive Plan”)
(incorporated herein by reference to Exhibit 10.7 to the Registrant’s
Annual Report on Form 10-K for the year ended December 31, 2003 (File
No.
0-24566-01))
|
10.8
|
Amended
and Restated MB Financial Stock Deferred Compensation Plan (incorporated
herein by reference to Exhibit 10.8 to the Registrant’s Annual Report on
Form 10-K for the year ended December 31, 2005 (File No.
0-24566-01))
|
10.9
|
Amended
and Restated MB Financial Non-Stock Deferred Compensation Plan
(incorporated herein by reference to Exhibit 10.9 to the Registrant’s
Annual Report on Form 10-K for the year ended December 31, 2005 (File
No.
0-24566-01))
|
10.10
|
Avondale
Federal Savings Bank Supplemental Executive Retirement Plan Agreement
(incorporated herein by reference to Exhibit 10.2 to Old MB Financial’s
(then known as Avondale Financial Corp.) Annual Report on Form 10-K
for
the year ended December 31, 1996 (File No. 0-24566))
|
10.11
|
Non-Competition
Agreement between the Registrant and E.M. Bakwin (incorporated
herein by reference to Exhibit 10.11 to the Registrant’s Annual Report on
Form 10-K for the year ended December 31, 2001
(File No. 0-24566-01))
|
10.12
|
Non-Competition
Agreement between the Registrant and Kenneth A. Skopec (incorporated
herein by reference to Exhibit 10.12 to the Registrant’s Annual Report on
Form 10-K for the year ended December 31, 2001 (File No.
0-24566-01))
|
10.13
|
Amended
and Restated Employment Agreement between MB Financial Bank, N.A.
and
Ronald D. Santo (incorporated herein by reference to Exhibit 10.1
to the
Registrant’s Current Report on Form 8-K filed on December 14, 2004 (File
No. 0-24566-01))
|
10.14
|
First
SecurityFed Financial, Inc. 1998 Stock Option and Incentive Plan
(incorporated herein by reference to Exhibit B to the definitive
proxy
statement filed by First SecurityFed Financial, Inc. on March 24,
1998
(File No. 0-23063))
|
EXHIBIT
INDEX
|
|
Exhibit
Number
|
Description
|
10.15
|
Tax
Gross Up Agreements between the Registrant and each of Mitchell Feiger,
Burton J. Field, Ronald D. Santo, Thomas D. Panos, Jill E. York,
Thomas P.
FitzGibbon, Jr., and Jeffrey L. Husserl (incorporated herein by reference
to Exhibits 10.1 - 10.7 to the Registrant’s Current Report on Form 8-K
filed on November 5, 2004 (File No. 0-24566-01))
|
10.16
|
Form
of Incentive Stock Option Agreement for Executive Officers under
the
Omnibus Incentive Plan (incorporated herein by reference to Exhibit
10.1
to the Registrant’s Current Report on Form 8-K/A filed on March 2, 2005
(File No. 0-24566-01))
|
10.17
|
Form
of Non-Qualified Stock Option Agreement for Directors under the Omnibus
Incentive Plan (incorporated herein by reference to Exhibit 10.2
to the
Registrant’s Current Report on Form 8-K/A filed on March 2, 2005 (File No.
0-24566-01))
|
10.18
|
Form
of Restricted Stock Agreement for Executive Officers under the Omnibus
Incentive Plan (incorporated herein by reference to Exhibit 10.3
to the
Registrant’s Current Report on Form 8-K/A filed on March 2, 2005 (File No.
0-24566-01))
|
10.19
|
Form
of Restricted Stock Agreement for Directors under the Omnibus Incentive
Plan (incorporated herein by reference to Exhibit 10.4 to the Registrant’s
Current Report on Form 8-K/A filed on March 2, 2005 (File No.
0-24566-01))
|
10.20
|
First
Oak Brook Bancshares, Inc. Incentive Compensation Plan (incorporated
herein by reference to Appendix A to the definitive proxy statement
filed
by First Oak Brook Bancshares, Inc. (“First Oak Brook”) on March 30, 2004
(File No. 0-14468))
|
10.21
|
First
Oak Brook Bancshares, Inc. 2001 Stock Incentive Plan (incorporated
herein
by reference to Appendix A to the definitive proxy statement filed
by
First Oak Brook on April 2, 2001 (File No. 0-14468))
|
10.22
|
First
Oak Brook Bancshares, Inc. Directors Stock Plan (incorporated herein
by
reference to Exhibit 4.1 to the Registration Statement on Form S-8
filed
by First Oak Brook on October 25, 1999 (File No. 333-89647))
|
|
|
|
|
10.25
|
Form
of Supplemental Pension Benefit Agreement for Richard M. Rieser,
Jr.
(incorporated herein by reference to Exhibit 10.13 to First Oak Brook’s
Annual Report on Form 10-K for the year ended December 31, 1994 (File
No.
0-14468))
|
10.26
|
Form
of Agreement Regarding Post-Employment Restrictive Covenants between
the
Registrant (as successor to First Oak Brook) and Richard M. Rieser,
Jr.
(incorporated herein by reference to Exhibit 10.13 to First Oak Brook’s
Annual Report on Form 10-K for the year ended December 31, 1994 (File
No.
0-14468))
|
10.27
|
First
Oak Brook Bancshares, Inc. Executive Deferred Compensation Plan
(incorporated by reference to Exhibit 10.3 to First Oak Brook’s Annual
Report on Form 10-K for the year ended December 31, 1997 (File No.
0-14468))
|
EXHIBIT
INDEX
|
|
Exhibit
Number
|
Description
|
|
|
16
|
KPMG
LLP letter re change in certifying accountant (incorporated herein
by
reference to Exhibit 16 to the Registrant’s Current Report on Form 8-K/A
filed on July 13, 2004 (File No. 0-24566-01))
|
|
|
|
|
|
|