MB Financial, Inc. Reports Second Quarter Net Income for 2006.CHICAGO Chicago, city, United States Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. -- MB Financial, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :MBFI MBFI Multiplex Bus Fault Isolator ) (the Company), the holding company for MB Financial Bank, N.A. and Union Bank, N.A., announced today second quarter results for 2006. The Company had net income of $17.1 million for the second quarter of 2006 compared to $17.6 million for the second quarter of 2005, a decrease of 2.4%. Fully diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the second quarter of 2006 decreased 1.6% to $0.60 compared to $0.61 per share in the second quarter of 2005. During the second quarter of 2005 the Company had net gains on the sale of investment securities of $2.1 million, or $0.05 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. See "Selected Financial Ratios" section below for additional statistical data regarding the Company's 2006 second quarter performance. RESULTS OF OPERATIONS Second Quarter Results Net income was $17.1 million for the second quarter of 2006, compared to $17.6 million for the second quarter of 2005. The results for the second quarter of 2006 generated an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. return on average assets of 1.17% and an annualized return on average equity of 13.50%, compared to 1.28% and 14.51%, respectively, for the same period in 2005. Net interest income was $46.9 million for the three months ended June June: see month. 30, 2006, an increase of $1.3 million, or 2.7% from $45.7 million for the comparable period in 2005. Net interest income grew primarily due to a $324.5 million, or 6.5% increase in average interest earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin as a result of organic growth. The net interest margin, expressed on a fully tax equivalent basis, was 3.66% for the second quarter of 2006 and 3.78% for the second quarter of 2005. The provision for loan losses was $1.5 million in the second quarter of 2006 compared to $3.0 million in the second quarter of 2005. Net charge-offs were $870 thousand in the quarter ended June 30, 2006 compared to $2.0 million in the quarter ended June 30, 2005. See "Asset Quality" section below for further analysis of the allowance for loan losses. Other income for the quarter ended June 30, 2006 decreased $1.4 million, or 7.7% to $16.3 million compared to $17.7 million in the second quarter in 2005. Net gains on sale of investment securities decreased by $2.1 million as a net loss of $25 thousand was realized in the second quarter of 2006 compared to net gains of $2.1 million in the second quarter of 2005. Investment security sales are periodically made as part of our ongoing strategy to maintain good long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. investment portfolio returns. Partially offsetting this decrease, brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. fee income increased by $409 thousand to $2.4 million and merchant card processing income increased by $333 thousand to $870 thousand. Other expense increased $2.4 million, or 6.9% to $37.3 million for the quarter ended June 30, 2006 from $34.9 million for the quarter ended June 30, 2005. Salaries and employee benefits increased by $1.7 million, primarily due to organic growth and partially due to the hiring of additional personnel needed to support the extension of branch office hours office hours, n.pl See business hours. as part of the Company's new deposit gathering strategy, initiated in the third quarter of 2005. The increase due to the new deposit gathering strategy was approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $250 thousand for the second quarter of 2006. Occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy and equipment expense increased by $217 thousand primarily due to increases in repair and maintenance expense and depreciation expense of $402 thousand and $254 thousand, respectively. The increases in repair and maintenance expense, and depreciation expense were primarily due to additional branch office locations. These increases were partially offset by a decrease in office rental RENTAL. A roll or list of the rents of an estate containing the description of the lands let, the names of the tenants, and other particulars connected with such estate. This is the same as rent roll, from which it is said to be corrupted. expense of $459 thousand. Office rental expense decreased by approximately $200 thousand due to the purchase of the land at the Company's operations center The facility or location on an installation, base, or facility used by the commander to command, control, and coordinate all crisis activities. See also base defense operations center; command center. in Rosemont, Illinois Rosemont is a village in Cook County, Illinois, founded in 1956. The population was 4,224 at the 2000 census. Geography Rosemont is located at (41.990730, -87.873816)GR1. , for $14.2 million in July July: see month. 2005. The land had previously been leased in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with the corresponding 2003 purchase of the Rosemont Rosemont can have many meanings, including: Places
The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. increased by $392, partially due to an increase in stationary Stationary can mean:
In the first quarter of 2006, MB Financial adopted Statement of Financial Accounting Standards No. 123R, "Share-Based Payment" (Statement 123R), using the modified mod·i·fy v. mod·i·fied, mod·i·fy·ing, mod·i·fies v.tr. 1. To change in form or character; alter. 2. retrospective LAW, RETROSPECTIVE. A retrospective law is one that is to take effect, in point of time, before it was passed. 2. Whenever a law of this kind impairs the obligation of contracts, it is void. 3 Dall. 391. application. Statement 123R requires the recognition of compensation expense for stock options and, under the modified retrospective application, prior period results are restated. As a result, previously reported diluted net income per share for the three months ended June 30, 2005 was reduced by $0.01. The impact on the three months ended June 30, 2006 due to the adoption of Statement 123R was also $0.01. Income tax expense for the three months ended June 30, 2006 decreased $600 thousand to $7.3 million compared to $7.9 million for the same period in 2005. The effective tax rate was 29.9% and 31.1% for the quarter ended June 30, 2006 and 2005, respectively. Year-To-Date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. Results Net income was $34.3 million for the first six months of 2006, compared to $34.4 million for the first six months of 2005. The results for the first six months of 2006 generated an annualized return on average assets of 1.19% and an annualized return on average equity of 13.55%, compared to 1.28% and 14.32%, respectively, for the first six months of 2005. Net interest income was $92.5 million for the six months ended June 30, 2006, an increase of $3.1 million, or 3.5% from $89.4 million for the comparable period in 2005. Net interest income grew primarily due to a $367.4 million, or 7.5% increase in average interest earning assets as a result of organic growth. The net interest margin, expressed on a fully tax equivalent basis, was 3.66% for the first six months of 2006 and 3.79% for the first six months of 2005. The provision for loan losses was $2.6 million in the first six months of 2006 compared to $5.4 million in the first six months of 2005. Net charge-offs were $1.9 million in the six months ended June 30, 2006 compared to $4.9 million in the six months ended June 30, 2005. See "Asset Quality" section below for further analysis of the allowance for loan losses. Other income increased $244 thousand, or 0.7% to $33.6 million for the six months ended June 30, 2006 from $33.3 million for the six months ended June 30, 2005. Net gain on sale of other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. increased by $1.1 million primarily due to the sale of excess space acquired through the Company's acquisition of South Holland Bancorp in February February: see month. 2003. Brokerage fee income increased $596 thousand during the first six months of 2006. Merchant card processing income increased by $645 thousand due to an increase in transactions processed during the first six months of 2006 compared to the first six months of 2005. Loan service fees increased by $491 thousand primarily due to a $304 thousand syndication See syndication format. fee realized in the first six months of 2006. Offsetting the increases above, net gains on sale of investment securities decreased by $2.5 million as a net loss of $406 thousand was realized in the first six months of 2006 compared to net gains of $2.1 million in the first six months of 2005. Other expense increased by $6.8 million, or 10.0% to $74.2 million for the six months ended June 30, 2006 from $67.4 million for the six months ended June 30, 2005. Salaries and employee benefits increased by $3.7 million, primarily due to organic growth and partially due to the new deposit gathering strategy, initiated in the third quarter of 2005. The increase due to the new deposit gathering strategy was approximately $700 thousand for the six months ended June 30, 2006. Occupancy and equipment expense increased by $855 thousand primarily due to increases in repair and maintenance expense, depreciation expense, and property tax expense of $750 thousand, $662 thousand, and $318 thousand, respectively. The increases in repair and maintenance expense, depreciation, and property tax expense were primarily due to additional branch office locations. These increases were partially offset by a decrease in office rental expense of $648 thousand and an increase in building rental income Noun 1. rental income - income received from rental properties income - the financial gain (earned or unearned) accruing over a given period of time of $348 thousand. Office rental expense decreased primarily due to the purchase of the land at the Company's operations center in Rosemont, Illinois, for $14.2 million in July 2005. The land had previously been leased in conjunction with the corresponding 2003 purchase of the Rosemont building. The increase in building rental income was primarily due to additional tenants at the MB Financial Center operations facility located in Rosemont, Illinois. Brokerage fee expense increased by $481 thousand. Merchant card processing expense increased by $598 thousand due to an increase in transactions processed during the first six months of 2006 compared to the first six months of 2005. Other operating expenses increased by $932 thousand primarily due to increases in operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. and stationary printing and supplies expense of $362 thousand and $180 thousand, respectively. In the first quarter of 2006, MB Financial adopted Statement of Financial Accounting Standards No. 123R, "Share-Based Payment" (Statement 123R), using the modified retrospective application. Statement 123R requires the recognition of compensation expense for stock options and, under the modified retrospective application, prior period results are restated. As a result, previously reported diluted net income per share for the six months ended June 30, 2005 was reduced by $0.03. The impact on the six months ended June 30, 2006 due to the adoption of Statement 123R was $0.02. Income tax expense for the six months ended June 30, 2006 decreased $497 thousand to $15.0 million compared to $15.5 million for the same period in 2005. The effective tax rate was 30.4% and 31.1% for the six months ended June 30, 2006 and 2005, respectively. 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 This article is about the resultant of polynomials. For the result of adding two or more vectors, see Parallelogram rule. For the technique in organ building, see Resultant (organ). In mathematics, the resultant of two monic polynomials yields, as well as the interest expense on average interest bearing liabilities, and the resultant costs, expressed both in dollars and rates (dollars in thousands):
Three Months Ended June 30,
------------------------------------------------------
2006 2005
------------------------------------------------------
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
------------------------------------------------------
Interest Earning
Assets:
Loans (1) (2) $3,934,669 $74,303 7.57 % $3,535,103 $57,162 6.49%
Loans exempt
from federal
income taxes (3) 4,075 71 6.89 2,975 48 6.38
Taxable
investment
securities 1,051,591 12,009 4.57 1,163,316 12,301 4.23
Investment
securities
exempt from
federal income
taxes (3) 304,718 4,276 5.55 273,336 3,845 5.56
Federal funds
sold 5,843 71 4.81 - - -
Other interest
bearing
deposits 11,154 108 3.88 12,816 75 2.35
--------------------- ---------------------
Total interest
earning
assets 5,312,050 90,838 6.86 4,987,546 73,431 5.91
--------- ---------
Non-interest
earning assets 554,943 510,322
------------ ------------
Total assets $5,866,993 $5,497,868
============ ============
Interest Bearing
Liabilities:
Deposits:
NOW and money
market
deposit
accounts $723,762 $3,785 2.10 % $772,767 $2,432 1.26%
Savings
deposits 452,916 779 0.69 516,318 799 0.62
Time deposits 2,565,295 27,429 4.29 2,133,830 15,896 2.99
Short-term
borrowings 641,259 6,801 4.25 701,732 4,884 2.79
Long-term
borrowings and
junior
subordinated
notes 236,611 3,585 5.99 168,262 2,370 5.57
--------------------- ---------------------
Total interest
bearing
liabilities 4,619,843 42,379 3.68 4,292,909 26,381 2.46
--------- ---------
Non-interest
bearing
deposits 677,014 665,188
Other non-
interest
bearing
liabilities 60,570 54,428
Stockholders'
equity 509,566 485,343
------------ ------------
Total
liabilities
and
stockholders'
equity $5,866,993 $5,497,868
============ ============
Net interest
income/interest
rate spread (4) $48,459 3.18 % $47,050 3.45%
=============== ===============
Taxable
equivalent
adjustment 1,521 1,363
--------- ---------
Net interest
income, as
reported $46,938 $45,687
========= =========
Net interest
margin (5) 3.54 % 3.67%
====== ======
Tax equivalent
effect 0.12 % 0.11%
====== ======
Net interest
margin on a
fully tax
equivalent
basis (5) 3.66 % 3.78%
====== ======
Three Months Ended March 31,
-------------------------------
2006
-------------------------------
Average Yield/
Balance Interest Rate
-------------------------------
Interest Earning Assets:
Loans (1) (2) $3,795,671 $68,681 7.34 %
Loans exempt from federal income
taxes (3) 2,881 46 6.39
Taxable investment securities 1,107,836 12,284 4.44
Investment securities exempt from
federal income taxes (3) 292,631 4,091 5.59
Federal funds sold 1,971 22 4.46
Other interest bearing deposits 13,262 121 3.70
---------------------
Total interest earning assets 5,214,252 85,245 6.63
----------
Non-interest earning assets 550,260
-----------
Total assets $5,764,512
===========
Interest Bearing Liabilities:
Deposits:
NOW and money market deposit accounts $711,464 $3,125 1.78 %
Savings deposits 470,984 868 0.75
Time deposits 2,384,224 23,288 3.96
Short-term borrowings 741,923 7,701 4.21
Long-term borrowings and junior
subordinated notes 218,317 3,273 6.00
---------------------
Total interest bearing liabilities 4,526,912 38,255 3.43
----------
Non-interest bearing deposits 664,311
Other non-interest bearing liabilities 62,391
Stockholders' equity 510,898
-----------
Total liabilities and stockholders'
equity $5,764,512
===========
Net interest income/interest rate
spread (4) $46,990 3.20 %
====================
Taxable equivalent adjustment 1,448
Net interest income, as reported $45,542
==========
Net interest margin (5) 3.54 %
==========
Tax equivalent effect 0.11 %
==========
Net interest margin on a fully tax
equivalent basis (5) 3.65 %
==========
(1) Non-accrual loans are included in average loans.
(2) Interest income includes amortization of deferred loan origination
fees of $1.9 million, $2.1 million and $1.7 million for the three
months ended June 30, 2006 and 2005, and March 31, 2006,
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.
Net interest income on a tax equivalent basis increased $1.4 million, or 3.0% to $48.5 million for the three months ended June 30, 2006 from $47.1 million for the three months ended June 30, 2005. Tax-equivalent interest income increased by $17.4 million due to a $324.5 million, or 6.5% increase in average interest earning assets. The yield on average interest earning assets increased 95 basis points to 6.86% due to the increase in market interest rates. Interest expense increased by $16.0 million as average interest bearing liabilities increased by $326.9 million, while their cost increased by 122 basis points to 3.68%, also due to the increase in market interest rates. The increase in average interest earning assets and average interest bearing liabilities was due to continued organic growth. The net interest margin expressed on a fully tax equivalent basis for the second quarter of 2006 decreased by 12 basis points from 3.78% in the second quarter of 2005 primarily due to the flattening
The flattening, ellipticity, or oblateness of an oblate spheroid is the "squashing" of the spheroid's pole, down towards its equator. yield curve and tightening credit spreads on loans. The net interest margin expressed on a fully tax equivalent basis increased by 1 basis point from 3.65% in the first quarter of 2006 to 3.66% in the second quarter of 2006. 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,
------------------------------------------------------
2006 2005
------------------------------------------------------
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
------------------------------------------------------
Interest Earning
Assets:
Loans (1) (2) $3,865,554 $142,985 7.46 % $3,459,486 $108,546 6.33 %
Loans exempt
from federal
income taxes
(3) 3,481 117 6.69 2,992 96 6.38
Taxable
investment
securities 1,079,558 24,293 4.50 1,150,493 24,340 4.23
Investment
securities
exempt from
federal income
taxes (3) 298,708 8,367 5.57 268,466 7,571 5.61
Federal funds
sold 3,918 93 4.72 72 1 2.76
Other interest
bearing
deposits 12,202 229 3.78 14,480 157 2.19
--------------------- ---------------------
Total interest
earning
assets 5,263,421 176,084 6.75 4,895,989 140,711 5.80
--------- ---------
Non-interest
earning assets 552,614 506,230
------------ ------------
Total assets $5,816,035 $5,402,219
============ ============
Interest Bearing
Liabilities:
Deposits:
NOW and money
market
deposit
accounts $717,647 $6,911 1.94 % $785,736 $4,601 1.18 %
Savings
deposits 461,900 1,647 0.72 521,941 1,603 0.62
Time deposits 2,475,260 50,717 4.13 2,048,647 29,168 2.87
Short-term
borrowings 691,313 14,502 4.23 678,423 8,555 2.54
Long-term
borrowings and
junior
subordinated
notes 227,515 6,858 6.00 170,862 4,728 5.50
--------------------- ---------------------
Total interest
bearing
liabilities 4,573,635 80,635 3.56 4,205,609 48,655 2.33
--------- ---------
Non-interest
bearing
deposits 670,697 657,810
Other non-
interest
bearing
liabilities 61,472 54,182
Stockholders'
equity 510,231 484,618
------------ ------------
Total
liabilities
and
stockholders'
equity $5,816,035 $5,402,219
============ ============
Net interest
income/interest
rate spread (4) $95,449 3.19 % $92,056 3.47 %
=============== ===============
Taxable
equivalent
adjustment 2,969 2,684
--------- ---------
Net interest
income, as
reported $92,480 $89,372
========= =========
Net interest
margin (5) 3.54 % 3.68 %
====== ======
Tax equivalent
effect 0.12 % 0.11 %
====== ======
Net interest
margin on a
fully tax
equivalent
basis (5) 3.66 % 3.79 %
====== ======
(1) Non-accrual loans are included in average loans.
(2) Interest income includes amortization of deferred loan origination
fees of $3.6 million and $3.8 million for the six months ended
June 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.
Net interest income on a tax equivalent basis increased $3.4 million, or 3.7% to $95.4 million for the six months ended June 30, 2006 from $92.1 million for the six months ended June 30, 2005. Tax-equivalent interest income increased by $35.4 million due to a $367.4 million, or 7.5% increase in average interest earning assets. The yield on average interest earning assets increased 95 basis points to 6.75% due to the increase in market interest rates. Interest expense increased by $32.0 million as average interest bearing liabilities increased by $368.0 million, while their cost increased by 123 basis points to 3.56%, also due to the increase in market interest rates. The increase in average interest earning assets and average interest bearing liabilities was due to continued organic growth. The net interest margin expressed on a fully tax equivalent basis for the six months ended June 30, 2006 decreased by 13 basis points from 3.79% for the six months ended June 30, 2005 primarily due to the flattening yield curve and tightening credit spreads on loans. BALANCE SHEET Total assets increased $189.8 million or 3.3% from $5.7 billion at December December: see month. 31, 2005 to $5.9 billion at June 30, 2006. Net loans increased by $246.5 million, or 6.7% to $3.9 billion at June 30, 2006. In aggregate, commercial related credits grew by $230.4 million, or 14.9% on a combined annualized basis. See "Loan Portfolio" section below for further analysis. Investment securities available for sale decreased by $78.8 million, or 5.6% to $1.3 billion at June 30, 2006. Total liabilities increased by $185.5 million, or 3.6% to $5.4 billion at June 30, 2006 from $5.2 billion at December 31, 2005. Total deposits grew by $278.2 million or 6.6% to $4.5 billion during that same period, primarily due to an increase in brokered deposits of $237.0 million. Short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. borrowings decreased by $122.7 million, or 16.5%, primarily due to decreases in securities sold under agreement to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. , Federal Home Loan Bank advances, and federal funds Federal Funds Funds deposited to regional Federal Reserve Banks by commercial banks, including funds in excess of reserve requirements. Notes: These non-interest bearing deposits are lent out at the Fed funds rate to other banks unable to meet overnight reserve purchased of $51.6 million, $40.5 million and $30.6 million, respectively. Long-term borrowings increased by $38.4 million primarily due to an increase in Federal Home Loan Bank advances of $40.7 million. Total stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. increased $4.3 million, or 0.8% to $511.3 million at June 30, 2006 compared to $507.0 million at December 31, 2005. Retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. increased by $25.8 million due to net income of $34.3 million, partially offset by $8.5 million or $0.30 per share, in cash dividends. Treasury stock increased by $11.6 million resulting primarily from the repurchase of 393,681 outstanding shares. Accumulated other comprehensive income In 1997 the Financial Accounting Standards Board issued a Statement on Financial Accounting Standards entitled “Comprehensive Income”. This statement required all income statement items to be reported either as a regular item in the income statement and or a special item as declined by $10.7 million due to an unrealized change in market value on investment securities available for sale. At June 30, 2006, the Company's total risk-based capital ratio Risk-based capital ratio Bank requirement that there be a minimum ratio of estimated total capital to estimated risk-weighted asset. was 12.44%; Tier 1 capital Tier 1 Capital A term used to describe the capital adequacy of a bank. Tier I capital is core capital, this includes equity capital and disclosed reserves. Notes: Equity capital includes instruments that can't be redeemed at the option of the holder. to risk-weighted assets Risk-Weighted Assets In terms of the minimum amount of capital that is required within banks and other institutions, based on a percentage of the assets, weighted by risk. Notes: The idea of risk-weighted assets is a move away from having a static requirement for capital. ratio was 11.29% and Tier 1 capital to average asset ratio was 8.99%. MB Financial Bank, N.A. and Union Bank, N.A. were each categorized cat·e·go·rize tr.v. cat·e·go·rized, cat·e·go·riz·ing, cat·e·go·riz·es To put into a category or categories; classify. cat as "Well-Capitalized" under Federal Deposit Insurance Corporation Federal Deposit Insurance Corporation (FDIC), an independent U.S. federal executive agency designed to promote public confidence in banks and to provide insurance coverage for bank deposits up to $100,000. regulations at June 30, 2006. LOAN PORTFOLIO The following table sets forth the composition of the loan portfolio as of the dates indicated (dollars in thousands):
June 30, December 31, June 30,
2006 2005 2005
---------------------------------------------------
% of % of % of
Amount Total Amount Total Amount Total
---------------------------------------------------
Commercial loans $917,260 23 % $833,046 22 % $801,253 22 %
Commercial loans
collateralized by
assignment of
lease payments 364,517 9 % 299,053 8 % 269,941 7 %
Commercial real
estate 1,431,571 36 % 1,456,585 39 % 1,431,125 39 %
Residential real
estate 405,579 10 % 387,167 10 % 419,873 12 %
Construction real
estate 627,189 16 % 521,434 14 % 463,410 13 %
Consumer loans 247,295 6 % 248,897 7 % 261,407 7 %
---------------------------------------------------
Gross loans (1) 3,993,411 100 % 3,746,182 100 % 3,647,009 100 %
====== ====== ======
Allowance for loan
losses (45,716) (44,979) (44,790)
----------- ----------- -----------
Net loans $3,947,695 $3,701,203 $3,602,219
=========== =========== ===========
(1) Gross loan balances at June 30, 2006, December 31, 2005, and June
30, 2005 are net of unearned income, including net deferred loan
fees of $3.2 million, $3.6 million, and $3.7 million,
respectively.
Net loans increased by $246.5 million, or 13.4% on an annualized basis, to $3.9 billion at June 30, 2006 from $3.7 billion at December 31, 2005. The above increases in commercial related credits were primarily due to growth in both existing customer and new customer loan demand resulting from the Company's focus on marketing and new business development. Net loans increased by $345.5 million, or 9.6%, to $3.9 billion at June 30, 2006 from $3.6 billion at June 30, 2005. The above increases in commercial related credits were primarily due to growth in both existing customer and new customer loan demand resulting from the Company's focus on marketing and new business development. These increases were partially offset by decreases in residential real estate and consumer loans resulting from pay downs on the existing portfolio. ASSET QUALITY The following table presents a summary of non-performing assets as of the dates indicated (dollar amounts in thousands):
June 30, December 31, June 30,
2006 2005 2005
------------------------------------
Non-performing loans:
Non-accrual loans (1) $16,920 $20,841 $23,888
Loans 90 days or more past due,
still accruing interest - 321 62
------------------------------------
Total non-performing loans 16,920 21,162 23,950
------------------------------------
Other real estate owned 37 354 285
------------------------------------
Total non-performing assets $16,957 $21,516 $24,235
====================================
Total non-performing loans to
total loans 0.42% 0.56% 0.66%
Allowance for loan losses to non-
performing loans 270.19% 212.55% 187.01%
Total non-performing assets to
total assets 0.29% 0.38% 0.43%
(1) Includes restructured loans totaling $542 thousand at June 30,
2005. There were no restructured loans at June 30, 2006 and
December 31, 2005.
A reconciliation of the activity in the Company's allowance for loan losses follows (dollar amounts in thousands):
Three Months Ended Six Months Ended
--------------------------------------------
June 30, June 30, June 30, June 30,
2006 2005 2006 2005
--------------------------------------------
Balance at beginning of
period $45,086 $43,820 $44,979 $44,266
Additions from acquisition - - - -
Provision for loan losses 1,500 3,000 2,600 5,400
Charge-offs (2,021) (2,474) (3,446) (5,975)
Recoveries 1,151 444 1,583 1,099
--------------------------------------------
Balance at June 30, $45,716 $44,790 $45,716 $44,790
============================================
Total loans at June 30, $3,993,411 $3,647,009 $3,993,411 $3,647,009
Ratio of allowance for
loan losses to total
loans 1.14% 1.23% 1.14% 1.23%
Net loan charge-offs to
average loans
(annualized) 0.09% 0.23% 0.10% 0.28%
Net charge-offs decreased by $3.0 million to $1.9 million in the six months ended June 30, 2006 from $4.9 million in the six months ended June 30, 2005. A substantial portion of the Company's charge-off Eliminate or write off. The term charge-off is used to describe the process of removing from the records of a company something that was once regarded as an asset but has subsequently become worthless. activity in the six months ended June 30, 2005 was due to the charge-off of one construction real estate loan. First Oak Brook A brook is a small stream. Brook may refer to the following places:
On May 1, 2006, the Company and its wholly-owned subsidiary, MBFI Acquisition Corp. ("Acquisition Corp."), entered into an Agreement and Plan of Merger with First Oak Brook Bancshares, Inc. ("First Oak Brook"), whereby the Company has agreed to acquire First Oak Brook in a stock and cash transaction valued at approximately $372 million, exclusive of stock options. First Oak Brook, the holding company for Oak Brook Bank, had consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: total assets of approximately $2.3 billion as of March 31, 2006. In the transaction, First Oak Brook will merge See mail merge and concatenate. with and into Acquisition Corp., with Acquisition Corp. as the surviving entity. First Oak Brook stockholders will receive, in exchange for each share of First Oak Brook common stock they hold, consideration with a value equal to the sum of (1) 0.8304 multiplied mul·ti·ply 1 v. mul·ti·plied, mul·ti·ply·ing, mul·ti·plies v.tr. 1. To increase the amount, number, or degree of. 2. Mathematics To perform multiplication on. by the average of the closing prices of the Company's common stock for the five consecutive trading days In Business, the trading day is the time span that a particular stock exchange is open. For example, the New York Stock Exchange is, as of 2006, open from 09:30AM to 4:00PM. Trading days never take place on weekends. ending on the trading day before the date of completion of the merger and (2) $7.36. Each First Oak Brook stockholder will be entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: to elect to receive their merger consideration in the form of the Company's common stock, cash or a combination of both, subject to limitations and prorations such that the aggregate merger consideration will be paid approximately 80% in the Company's common stock and approximately 20% in cash. The total number of shares the Company will issue and the total amount of cash the Company will pay in the transaction are approximately 8.4 million shares and $74.0 million, respectively, subject to adjustment as provided in the merger agreement. The transaction is currently expected to be completed in the third quarter of 2006, subject to customary closing conditions, the receipt of regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. approvals, the approval of the Company's stockholders of the issuance of the shares of the Company's common stock in the transaction and the approval of the stockholders of First Oak Brook. Additional Information Regarding First Oak Brook Transaction The Company has filed a registration statement on Form S-4 with the Securities and Exchange Commission (the "SEC"), which was declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. effective by the SEC, in connection with the proposed acquisition by the Company of First Oak Brook. The registration statement includes a joint proxy statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. of the Company and First Oak Brook that also constitutes a prospectus A document, notice, circular, advertisement, letter, or communication in written form or by radio or television that offers any security for sale, or confirms the sale of any security. of the Company (the "joint proxy See proxy server. (networking) proxy - A process that accepts requests for some service and passes them on to the real server. A proxy may run on dedicated hardware or may be purely software. statement/prospectus"), which has been sent to the stockholders of the Company and First Oak Brook. Stockholders are advised to read the joint proxy statement/prospectus, which was filed by the Company with the SEC on June 27, 2006, because it contains important information about the Company, First Oak Brook and the proposed transaction. The joint proxy statement/prospectus, and other documents relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the merger filed by the Company and First Oak Brook, can be obtained free of charge from the SEC's website at www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. . These documents also can be obtained free of charge by accessing the Company's website at www.mbfinancial.com under the tab "Investor Relations Investor relations The process by which the corporation communicates with its investors. " and then under "SEC Filings" or by accessing First Oak Brook's website at www.firstoakbrook.com. Alternatively, these documents can be obtained free of charge from the Company upon written request to MB Financial, Inc., Secretary, 6111 North River Road, Rosemont, Illinois 60018 or by calling (847) 653-1992, or from First Oak Brook, upon written request to First Oak Brook Bancshares, Inc., Rosemarie Bouman, 1400 Sixteenth Street, Oak Brook, Illinois Oak Brook is a suburb of Chicago in DuPage County, in Illinois. The population was 8,702 at the 2000 census. History Oak Brook was incorporated as a Village in 1958, due in large part to the efforts of Paul Butler, a prominent civic leader and landowner whose father had 60523, or by calling (630)571-1050. FORWARD-LOOKING STATEMENTS forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. When used in this press release and in filings with the Securities and Exchange Commission, in other press releases or other public shareholder communications, or in oral statements made with the approval of an authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: 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 The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 MB Financial Inc.'s 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. Statements about the expected timing, completion and effects of our proposed merger with First Oak Brook and all other statements in this report other than historical facts constitute forward-looking 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 cost savings and synergies from our proposed merger with First Oak Brook might not be realized within the expected time frames, and costs or difficulties related to integration matters might be greater than expected; (2) the requisite stockholder and regulatory approvals for our proposed merger with First Oak Brook might not be obtained or such regulatory approvals might be received later than expected; (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; (4) competitive pressures among depository institutions Depository institution A financial institution that obtains its funds mainly through deposits from the public. This includes commercial banks, savings and loan associations, savings banks and credit unions. ; (5) interest rate movements and their impact on customer behavior and net interest margin; (6) the impact of repricing Repricing To change the price of an asset. In derivatives, it sometimes refers to the exchange of options of with different strike prices. repricing and competitors' pricing initiatives on loan and deposit products; (7) the ability to adapt successfully to technological changes to meet customers' needs and developments in the market place; (8) our ability to realize the residual values Residual value Usually refers to the value of a lessor's property at the time the lease expires. residual value The price at which a fixed asset is expected to be sold at the end of its useful life. of our direct finance, leveraged, and operating leases Operating Lease A lease contract that allows the use of an asset, but does not convey rights similar to ownership of the asset. Notes: An operating lease is not capitalized it is accounted for as a rental expense. ; (9) our ability to access cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. funding; (10) changes in financial markets; (11) changes in economic conditions in general and in the Chicago metropolitan area “Chicagoland” redirects here. For for the racing venue, see Chicagoland Speedway. The Chicago metropolitan area is the metropolitan area associated with the city of Chicago in the United States. in particular; (12) the costs, effects and outcomes of litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. ; (13) new legislation or regulatory changes, including but not limited to changes in federal and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. state tax laws or interpretations thereof by taxing authorities; (14) changes in accounting principles, policies or guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. ; (15) our future acquisitions of other depository institutions or lines of business; (16) our deposit growth and deposit mix resulting from our new deposit gathering strategy may be less favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. than expected; and (17) the impact of the guidance recently prepared by the Office of the Comptroller of the Currency The Office of the Comptroller of the Currency (or OCC) was established by the National Currency Act of 1863 and serves to charter, regulate, and supervise all national banks and the federal branches and agencies of foreign banks in the United States. regarding concentrations in real estate lending. We do not undertake any obligation to update any forward-looking statement to reflect circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or 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
June 30, 2006, December 31, 2005 and June 30, 2005 (2005 restated for
SFAS 123R)
(Amounts in thousands, except common share data)
(Unaudited)
June 30, December 31, June 30,
2006 2005 2005
------------------------------------
ASSETS
Cash and due from banks $101,689 $92,001 $88,095
Interest bearing deposits with
banks 10,271 12,783 9,907
Federal funds sold 6,454 - -
Investment securities available
for sale 1,327,019 1,405,844 1,401,424
Loans held for sale 591 500 300
Loans (net of allowance for loan
losses of $45,716 at June 30, 2006,
$44,979 at December 31, 2005
and $44,790 at June 30, 2005) 3,947,695 3,701,203 3,602,219
Lease investments, net 66,331 65,696 60,435
Premises and equipment, net 147,201 147,701 129,649
Cash surrender value of life
insurance 92,080 90,194 88,237
Goodwill, net 125,358 125,010 124,010
Other intangibles, net 12,118 12,594 13,070
Other assets 72,076 65,539 72,097
------------------------------------
Total assets $5,908,883 $5,719,065 $5,589,443
====================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits:
Noninterest bearing $688,214 $694,548 $666,256
Interest bearing 3,791,709 3,507,152 3,504,918
------------------------------------
Total deposits 4,479,923 4,201,700 4,171,174
Short-term borrowings 622,948 745,647 693,125
Long-term borrowings 109,664 71,216 86,633
Junior subordinated notes issued
to capital trusts 123,526 123,526 87,443
Accrued expenses and other
liabilities 61,545 69,990 57,461
------------------------------------
Total liabilities 5,397,606 5,212,079 5,095,836
------------------------------------
Stockholders' Equity
Common stock, ($0.01 par value;
authorized 40,000,000 shares;
issued 28,916,945, 28,912,803 and
28,883,822 shares at June 30, 2006,
December 31, 2005 and June 30, 2005,
respectively) 289 289 289
Additional paid-in capital 142,489 141,745 141,483
Retained earnings 416,214 390,407 368,640
Accumulated other comprehensive
income (20,108) (9,453) (1,409)
Less: 785,241, 453,461 and
388,091 shares of treasury stock,
at cost, June 30, 2006,
December 31, 2005 and
June 30, 2005, respectively) (27,607) (16,002) (15,396)
------------------------------------
Total stockholders' equity 511,277 506,986 493,607
------------------------------------
Total liabilities and
stockholders' equity $5,908,883 $5,719,065 $5,589,443
====================================
MB FINANCIAL, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(2005 restated for SFAS 123R)
(Amounts in thousands, except common share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------------------------
2006 2005 2006 2005
--------------------------------------------
Interest income:
Loans $ 74,350 $ 57,193 $143,061 $108,608
Investment securities:
Taxable 12,009 12,301 24,293 24,340
Nontaxable 2,779 2,499 5,438 4,921
Federal funds sold 71 - 93 1
Other interest bearing
accounts 108 75 229 157
--------------------------------------------
Total interest income 89,317 72,068 173,114 138,027
--------------------------------------------
Interest expense:
Deposits 31,993 19,127 59,274 35,372
Short-term borrowings 6,801 4,884 14,502 8,555
Long-term borrowings and
junior subordinated
notes 3,585 2,370 6,858 4,728
--------------------------------------------
Total interest expense 42,379 26,381 80,634 48,655
--------------------------------------------
Net interest income 46,938 45,687 92,480 89,372
Provision for loan losses 1,500 3,000 2,600 5,400
--------------------------------------------
Net interest income
after provision for
loan losses 45,438 42,687 89,880 83,972
--------------------------------------------
Other income:
Loan service fees 1,291 1,396 3,043 2,552
Deposit service fees 4,887 4,866 9,660 9,538
Lease financing, net 3,398 3,225 6,642 6,830
Brokerage fees 2,431 2,022 4,737 4,141
Trust and asset
management fees 1,449 1,282 2,854 2,664
Net (loss) gain on sale
of securities available
for sale (25) 2,067 (406) 2,128
Increase in cash
surrender value of life
insurance 928 980 1,886 1,933
Net gain on sale of
other assets 4 - 1,101 1
Merchant card processing 870 537 1,594 949
Other operating income 1,114 1,331 2,455 2,586
--------------------------------------------
16,347 17,706 33,566 33,322
--------------------------------------------
Other expense:
Salaries and employee
benefits 20,669 18,943 40,969 37,292
Occupancy and equipment
expense 6,042 5,825 11,985 11,130
Computer services
expense 1,647 1,452 3,252 2,717
Advertising and
marketing expense 1,208 1,427 2,438 2,175
Professional and legal
expense 506 698 1,064 1,357
Brokerage fee expense 1,301 1,014 2,494 2,013
Telecommunication
expense 583 885 1,319 1,560
Other intangibles
amortization expense 236 250 476 517
Merchant card processing 800 482 1,476 878
Other operating expenses 4,323 3,931 8,692 7,760
--------------------------------------------
37,315 34,907 74,165 67,399
--------------------------------------------
Income before income
taxes 24,470 25,486 49,281 49,895
Income taxes 7,324 7,924 14,996 15,493
--------------------------------------------
Net Income $ 17,146 $ 17,562 $ 34,285 $ 34,402
============================================
Common share data (1):
Basic earnings per
common share $ 0.61 $ 0.62 $ 1.22 $ 1.21
Diluted earnings per
common share $ 0.60 $ 0.61 $ 1.19 $ 1.18
Weighted average common
shares outstanding 28,130,670 28,357,533 28,209,289 28,447,284
Diluted weighted average
common shares
outstanding 28,636,728 28,916,117 28,718,808 29,107,481
MB FINANCIAL, INC. & SUBSIDIARIES
SELECTED FINANCIAL RATIOS
(Unaudited)
At or For the At or For the
Three Months Six Months
Ended June 30, Ended June 30,
----------------- -----------------
2006 2005 2006 2005
-------- -------- -------- --------
Performance Ratios:
Annualized return on average
assets 1.17 % 1.28 % 1.19 % 1.28 %
Annualized return on average
equity 13.50 14.51 13.55 14.32
Annualized cash return on
average tangible equity (1) 18.43 20.14 18.50 19.88
Net interest rate spread 3.18 3.45 3.19 3.47
Efficiency ratio (2) 57.56 55.68 57.31 54.68
Net interest margin - fully tax
equivalent basis (3) 3.66 3.78 3.66 3.79
Net interest margin 3.54 3.67 3.54 3.68
Asset Quality Ratios:
Non-performing loans to total
loans 0.42 % 0.66 % 0.42 % 0.66 %
Non-performing assets to total
assets 0.29 0.43 0.29 0.43
Allowance for loan losses to
total loans 1.14 1.23 1.14 1.23
Allowance for loan losses to
non-performing loans 270.19 187.01 270.19 187.01
Net loan charge-offs to average
loans (annualized) 0.09 0.23 0.10 0.28
Capital Ratios:
Tangible equity to tangible
assets (4) 6.55 % 6.62 % 6.55 % 6.62 %
Equity to total assets 8.65 8.83 8.65 8.83
Book value per share (5) $18.17 $17.32 $18.17 $17.32
Less: goodwill and other
intangible assets, net of
tax benefit, per common
share common share 4.74 4.65 4.74 4.65
-------- -------- -------- --------
Tangible book value per
share (6) $13.43 $12.67 $13.43 $12.67
-------- -------- -------- --------
Total capital (to risk-weighted
assets) 12.44 % 12.02 % 12.44 % 12.02 %
Tier 1 capital (to risk-weighted
assets) 11.29 10.77 11.29 10.77
Tier 1 capital (to average
assets) 8.99 8.33 8.99 8.33
(1) Net cash flow available to stockholders (net income plus other
intangibles amortization expense, net of tax benefit) / Average
tangible equity (average equity less average goodwill and average
other intangibles, net of tax benefit)
(2) Equals total other expense divided by the sum of net interest
income on a fully tax equivalent basis and total other income less
net gains (losses) on securities available for sale.
(3) Represents net interest income, on a fully tax equivalent basis
assuming a 35% tax rate, as a percentage of average interest
earning assets.
(4) 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.
(5) Equals total ending stockholders' equity divided by common shares
outstanding.
(6) 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 Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with accounting principles generally accepted in the United States of America UNITED STATES OF AMERICA. The name of this country. The United States, now thirty-one in number, are Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Hampshire, (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ). These measures include net interest income on a fully tax equivalent basis, net interest margin on a fully tax equivalent basis, tangible Possessing a physical form that can be touched or felt. Tangible refers to that which can be seen, weighed, measured, or apprehended by the senses. A tangible object is something that is real and substantial. An automobile is an example of tangible Personal Property. equity to assets ratio, tangible book value per share and annualized cash return on average tangible equity. Our management uses these non-GAAP measures in its analysis of our performance. The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt tax-ex·empt adj. 1. Not subject to taxation, as the capital or income of a philanthropic organization. 2. Producing interest that is exempt from income tax: tax-exempt bonds. n. 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. The other measures exclude the ending balances of acquisition-related goodwill and other intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. , net of tax benefit, in determining tangible stockholders' equity and tangible assets Tangible Asset An asset that has a physical form such as machinery, buildings and land. Notes: This is the opposite of an intangible asset such as a patent or trademark. Whether an asset is tangible or intangible isn't inherently good or bad. . 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. These disclosures should not be viewed as substitutes for the results determined to be in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
The following table presents a reconciliation of tangible equity to
stockholders' equity (in thousands):
June 30, December 31, June 30,
2006 2005 2005
------------------------------------
Stockholders' equity - as reported $511,277 $506,986 $493,607
Less: goodwill 125,358 125,010 124,010
Less: other intangible assets,
net of tax benefit 7,877 8,186 8,496
------------------------------------
Tangible equity $378,042 $373,790 $361,101
====================================
The following table presents a reconciliation of tangible assets to
total assets (in thousands):
June 30, December 31, June 30,
2006 2005 2005
------------------------------------
Total assets - as reported $5,908,883 $5,719,065 $5,589,443
Less: goodwill 125,358 125,010 124,010
Less: other intangible assets,
net of tax benefit 7,877 8,186 8,496
------------------------------------
Tangible assets $5,775,648 $5,585,869 $5,456,937
====================================
The following table presents a reconciliation of average tangible
equity to average stockholders' equity (in thousands):
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------------
2006 2005 2006 2005
------------------------------------
Average stockholders' equity - as
reported $509,566 $485,343 $510,231 $484,618
Less: average goodwill 125,184 123,691 125,097 123,659
Less: average other intangible
assets, net of tax benefit 7,951 8,572 8,028 8,657
------------------------------------
Average tangible equity $376,431 $353,080 $377,106 $352,302
====================================
The following table presents a reconciliation of net cash flow
available to stockholders to net income (in thousands):
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------------
2006 2005 2006 2005
------------------------------------
Net income - as reported $17,146 $17,562 $34,285 $34,402
Add: other intangible
amortization expense, net of
tax benefit 153 163 309 336
------------------------------------
Net cash flow available to
stockholders $17,299 $17,725 $34,594 $34,738
====================================
Reconciliations of net interest income on a fully tax equivalent basis to net interest income and net interest margin on a fully tax equivalent basis to net interest margin are contained in the tables under "Net Interest Margin." A reconciliation of tangible book value per share to book value per share is contained in the "Selected Financial Ratios" table. |
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