Midwest Banc Holdings, Inc. Reports 22.0% Increase in Second Quarter 2003 Earnings.Business Editors MELROSE PARK Melrose Park, village (1990 pop. 20,859), Cook co., NE Ill., an industrial suburb of Chicago; inc. 1893. It has large railroad yards and shops, steel mills, and factories that make a wide variety of products. , Ill.--(BUSINESS WIRE)--July 29, 2003 Midwest Midwest or Middle West, region of the United States centered on the western Great Lakes and the upper-middle Mississippi valley. It is a somewhat imprecise term that has been applied to the northern section of the land between the Appalachians Banc Holdings, 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 :MBHI MBHI Millon Behavioral Health Inventory ), a community-based bank holding company, announced a 22.0% increase in net income for the second quarter of 2003 compared to the similar period of 2002. Net income was $7,791,000 for the three months ended June June: see month. 30, 2003 compared to $6,388,000 for the three months ended June 30, 2002. Net income increased 11.7% to $14,185,000 for the six months ended June 30, 2003 compared to $12,701,000 for the six months ended June 30, 2002. Second Quarter 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 Increased 10.3% Over Prior Year Period Basic earnings per share for the three months ended June 30, 2003 was $0.44 compared to $0.40 for the similar period of 2002, a 10.0% increase. Diluted earnings per share for the three months ended June 30, 2003 was $0.43 compared to $0.39 for the similar period of 2002, a 10.3% increase. The return on average assets for the three months ended June 30, 2003 was 1.40% compared to 1.38% for the similar period in 2002. The return on average equity for the three months ended June 30, 2003 was 19.63% compared to 24.19% for the similar period in 2002. Basic earnings per share for the six months ended June 30, 2003 was $0.80 compared to $0.79 for the similar period of 2002, an 1.3% increase. Diluted earnings per share for the six months ended June 30, 2003 was $0.78 compared to $0.77 for the similar period of 2002, an 1.3% increase. The return on average assets for the six months ended June 30, 2003 was 1.29% compared to 1.39% for the similar period in 2002. The return on average equity for the six months ended June 30, 2002 was 18.71% compared to 24.86% for the similar period in 2002. E. V. Silveri, Chairman of the Board of Midwest Banc Holdings, Inc. said, "Diluted earnings per share for the quarter increased 10.3%, after expenses of $820,000 associated with the cancellation cancellation (See: cancel) CANCELLATION. Its general acceptation, is the act of crossing a writing; it is used sometimes to signify the manual operation of tearing or destroying the instrument itself. Hyde v. Hyde, 1 Eq. Cas. Abr. 409; Rob. of the CoVest transaction and professional fees related to specific loans. Diluted earnings per share would have increased by 17.9% had we not had these expenses. In addition, 2003 basic and diluted earnings per share were affected by the issuance of an additional 1.6 million shares of common stock related to the Big Foot Financial Corp. acquisition." Silveri further stated, "although it reduced our reported earnings per share growth, the additional equity provides a stronger base for our banking activities in the future." Brad A. Luecke, President and Chief Executive Officer of Midwest Banc Holdings, Inc. stated: "The additional expenses resulting from the acquisition and integration of Big Foot Financial Corp. are also reflected in our year to date numbers." He noted the progress being made with the Big Foot acquisition. "The acquisition of Big Foot has provided the Company with good deposit growth in new markets. The three Big Foot banking centers have experienced an 18.8% growth in deposits since January January: see month. 3, 2003, the acquisition date. The projected cost savings have been realized, the integration is largely completed, and we expect the acquisition will be accretive to diluted earnings per share by the end of 2003 as originally anticipated." Second Quarter Net Interest Income Decreased 4.3% Net interest income decreased $671,000 or 4.3% to $14,827,000 in the second quarter of 2003 compared to $15,498,000 for the similar period in 2002. Year to date net interest income increased $1,462,000 or 4.8% to $31,793,000 compared to $30,331,000 for the similar period in 2002. Net interest margin decreased to 3.03% in the second quarter of 2003 compared to 3.64% in the second quarter of 2002. Net interest margin decreased to 3.24% for the six months ended June 30, 2003 compared to 3.61% for the six months ended June 30, 2002. Due to the low interest rate environment, the Company experienced an increase in amortization expense associated with the mortgage-backed securities Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. it holds in its investment securities portfolio. Amortization expense was $2.7 million and $5.0 million for the three and six months ended June 30, 2003, respectively, compared to $775,000 and $1.7 million, respectively, for the similar periods in 2002. The Company has reallocated its securities holdings in order to reduce the likelihood of an increase in future amortization expense by investing a larger portion of the portfolio in lower-yielding U.S. Treasury U.S. Treasury Created in 1798, the United States Department of the Treasury is the government (Cabinet) department responsible for issuing all Treasury bonds, notes and bills. Some of the government branches operating under the U.S. Treasury umbrella include the IRS, U.S. and government agency obligations. Accordingly as of June 30, 2003 mortgage-backed securities comprised 40.8% of the portfolio compared to 78.5% at December December: see month. 31, 2002. Going forward, it is expected that the net interest margin will begin to stabilize stabilize See peg. and improve, although they are unlikely to increase back to the 2002 levels during this year. Key factors for an improvement in the net interest margin include an increase in loan volumes, slower prepayment speeds Prepayment speed Also called speed, the estimated rate at which mortgagors pay off their loans ahead of schedule, critical in assessing the value of mortgage pass-through securities. on mortgage-backed securities, an interest rate swap Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. completed early in the third quarter related to high interest rate FHLB FHLB Federal Home Loan Bank advances, and the impact of deposit pricing strategies There are many ways in which the price of a product can be determined. The following are the foremost strategies that businesses are likely to use. Competition-based pricing Setting the price based upon prices of the similar competitor products. . Nevertheless, expected improvements in net interest margins assume no further cuts in interest rates by the Federal Reserve Board of Governors this year. The Company manages its securities available-for-sale portfolio and trading account Trading Account 1. An account similar to a traditional bank account, holding cash and securities, and is administered by an investment dealer. 2. An account held at a financial institution and administered by an investment dealer that the account holder uses to employ a portfolio on a total return basis. In this respect, management regularly reviews the performance of its securities and sells specific securities to provide opportunities to enhance net interest income and net interest margin, and when possible, will recognize gains on the sale of securities. The Company has a long history of managing its securities in this manner. Gains on securities transactions were $2,701,000 and $757,000 during the three months ended June 30, 2003 and June 30, 2002, respectively. For the six months ended June 30, 2003, gains on securities transactions were $2,803,000 compared to $1,295,000 for the similar period in 2002. Trading account profits were $130,000 compared to $3,000 during the three months ended June 30, 2003 and June 30, 2002, respectively. During the six months ended June 30, 2003 and June 30, 2002, trading account profits were $130,000 and $348,000, respectively. Second Quarter Other Income Increased 99.3% Other income, excluding gains on securities transactions and trading account profits, was $5,108,000, an increase of $2,545,000 or 99.3% on a comparable second quarter 2003 to 2002 basis. The other income to average assets ratio was 0.92% for the three months ended June 30, 2003 compared to 0.55% for the same period in 2002. Service charges on deposits increased $31,000 or 2.2% to $1,434,000 during the three months ended June 30, 2003 compared to the second quarter of 2002. Option fee income increased $1,897,000 for the second quarter of 2003 to $2,019,000 compared to the similar period in 2002. Option fees are part of management's ongoing program to manage risk in the securities portfolio and take advantage of favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. market conditions. Mortgage banking fees, trust, and insurance and brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. commissions increased, $288,000, $22,000 and $162,000, respectively, for the three months ended June 30, 2003 to $377,000, $169,000, and $556,000, respectively, compared to the second quarter of 2002. Other income, excluding gains on securities transactions and trading account profits, increased $3,828,000 or 73.1% to $9,068,000 for the six months ended June 30, 2002 compared to the six months ended June 30, 2002. The other income to average assets ratio was 0.83% for the six months ended June 30, 2003 compared to 0.57% for the same period in 2002. Service charges on deposits increased $192,000 or 7.1% to $2,901,000 during the six months ended June 30, 2003 compared to $2,709,000 for the same period in 2002. Option fee income increased $2,362,000 during the first half of 2003 to $3,016,000 compared to the similar period in 2002. Mortgage banking fees, trust, and insurance and brokerage commissions increased, $434,000, $9,000, and $474,000, respectively, for the six months ended June 30, 2002 to, $665,000, $304,000, and $1,014,000, respectively, compared to the similar period of 2002. Second Quarter Efficiency Ratio of 49.86% Other expenses increased $2,208,000 or 26.1% to $10,672,000 for the three months ended June 30, 2003 compared to the $8,464,000 for the three months ended June 30, 2002. The other expenses to average assets ratio was 1.92% for the three months ended June 30, 2003 compared to 1.82% for the same period in 2002. Salaries and employee benefits expense increased $756,000 to $5,999,000 during the three months ended June 30, 2003 compared to $5,243,000 for the similar period ended June 30, 2002. Increased full-time full-time adj. Employed for or involving a standard number of hours of working time: a full-time administrative assistant. full staff positions, including brokerage staff, employees added through the acquisition of Big Foot Financial Corp., and other new positions was the primary reason for the increase in salaries and benefits. Enhanced benefit programs and increased health insurance costs have also contributed to the increase in salaries and employee benefits. 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 expenses increased $236,000 or 19.2% to $1.5 million during the second quarter of 2003 compared to $1.2 million for the comparable period in 2002. This increase reflects the addition of the three branches acquired as a result of the Big Foot acquisition. The net overhead expense to average assets ratio was 1.00% for the second quarter of 2003 compared to 1.27% for the similar period in 2002. The efficiency ratio was 49.86% for the three months ended June 30, 2003 compared to 44.84% for the same period in 2002. Other expenses increased $4,793,000 or 28.8% to $21,455,000 for the six months ended June 30, 2003 compared to $16,662,000 for the six months ended June 30, 2002. The other expenses to average assets ratio was 1.96% for the six months ended June 30, 2003 compared to 1.83% for the same period in 2002. Salaries and employee benefits expense increased $1,809,000 to $12,051,000 during the six months ended June 30, 2003 compared to $10,242,000 for the same period ended June 30, 2002. For the six months ended June 30, 2003, occupancy expenses increased $841,000 or 35.3% to $3.2 million from $2.4 million in the six months of 2002. Due to the acquisition of Big Foot, the Company incurred nonrecurring Non`re`cur´ring a. 1. Nonrecurrent; as, the costs of a layoff are considered as a nonrecurring expense s>. expenses of $126,000 in legal and data conversion fees, $348,000 due to the disposal and purchase of equipment, and $30,000 in other operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . Due to the termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. of the CoVest agreement, $425,000 in legal, consulting, and data conversion fees were expensed. Specific collection expenses due to loans reflected in the first six months of 2003 include $430,000, in professional fees. The net overhead expense to average assets ratio was 1.13% for the six months ended June 30, 2003 compared to 1.25% for the similar period in 2002. The efficiency ratio was 49.15% for the six months ended June 30, 2003 compared to 44.74% for the same period in 2002. Balance Sheet Trends Total assets were $2.3 billion at June 30, 2003, an increase of $276.0 million compared to $2.0 billion at December 31, 2002. Loans decreased $58.4 million or 5.1% to $1.1 billion at June 30, 2003 compared to December 31, 2002. Loan demand was affected by current economic conditions, increased prepayments Prepayments Payments made in excess of scheduled mortgage principal repayments. of commercial and commercial real estate loans, and management's decision to maintain fixed rate pricing disciplines to protect longer-term profitability. 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 at June 30, 2003 were $2.1 billion compared to $1.9 billion at December 31, 2002, reflecting an increase of $228.1 million or 12.0%, primarily as a result in the increase in the Company's available-for-sale securities portfolio. The Company sold $141.9 million of mortgage loans during the first quarter of 2003 that were acquired from Big Foot in an effort to reduce the interest rate risk of the portfolio. Looking ahead, there is evidence that loan demand may be rebounding based upon an increase in the internal loan pipeline and the growth of unused customer commitments of the Company's banking subsidiaries. Total deposits of $1.6 billion as of June 30, 2003 represented an increase of $190.0 million or 13.7% from $1.4 billion as of December 31, 2002. Non-interest-bearing deposits were $148.5 million as of June 30, 2003, approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $13.6 million higher than the $134.9 million level as of December 31, 2002. Over the same period, interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid deposits increased 14.0% or $176.4 million. Certificates of deposit under $100,000 increased $123.9 million from December 31, 2002 to June 30, 2003. Certificates of deposit over $100,000 and public funds See Fund, 3. See also: Public decreased by $70.3 million from December 31, 2002 to June 30, 2003. The majority of the decrease was a result of brokered certificates of deposit and public fund maturities. The Company's marketing efforts focused on core and time deposit account growth in out retail markets, reducing the need for public funds and brokered certificates of deposit. The Company acquired $73.4 million in core deposits and $64.6 million in time deposits through the acquisition of Big Foot. Deposits at the three Big Foot branches increased 18.8% to $163.9 million at June 30, 2003 compared to January 3, 2003, the Big Foot acquisition date. 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. was $156.9 million as of June 30, 2003 compared to $115.0 million as of December 31, 2002. The Company issued 1.6 million shares of common stock upon the acquisition of Big Foot, representing an increase of $30.4 million in equity. Total capital to asset ratio at June 30, 2003 was 8.33% compared to 7.66% from December 31, 2002. Asset Quality and Nonperforming Loans The allowance for loan losses was $12.0 million or 1.12% of total loans at June 30, 2003 compared to $20.8 million or 1.83% of total loans at December 31, 2002. The provision for loan losses was $1,745,000 for the six months ended June 30, 2003 compared to $1,477,000 for the six months ended June 30, 2002. Net charge-offs for the six months ended June 30, 2003 were $4.1 million compared to $402,000 for the six months ended June 30, 2002. The net 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. percentage to average loans was 0.71% and 0.08% at June 30, 2003 and June 30, 2002, respectively. Allowance for loan losses to nonperforming loans ratio was 0.49x and 0.66x at June 30, 2003 and December 31, 2002, respectively. Nonperforming loans were $24.7 million and $31.5 million at June 30, 2003 and December 31, 2002, respectively. The nonperforming loans to total loans ratio for these two time periods was 2.29% and 2.78%, respectively. The nonperforming assets Nonperforming asset An asset that is not effectively producing income, such as an overdue loan. nonperforming asset An asset that produces no income. to total assets ratio was 1.16% and 1.60% for June 30, 2003 and December 31, 2002, respectively. The Company has identified four loans which total $19.2 million, or 77.7% of total nonperforming loans. Specific reserves of $6.6 million have been established for these loans. The remaining nonperforming loans are individually less than $2.0 million. The first loan, a commercial loan totals $5.2 million and a specific reserve of $4.7 million has been established for it. The second loan, is a townhouse town·house or town house n. 1. A residence in a city. 2. A row house, especially a fashionable one. development loan of $9.5 million of which the borrower BORROWER, contracts. He to whom a thing is lent at his request. 2. The contract of loan confers rights, and imposes duties on the borrower' 1. In general, he has the right to use the thing borrowed, during the time and for the purpose intended between the has ceased construction activities on the project and a receiver has been appointed ap·point tr.v. ap·point·ed, ap·point·ing, ap·points 1. To select or designate to fill an office or a position: appointed her the chief operating officer of the company. 2. . The Company will continue the development on an interim basis as the property is marketed. A specific reserve of $929,000 has been established on this loan. The third loan has a $1.0 million balance. This commercial credit was classified as doubtful by bank regulators and has been reduced from $2.2 million since the beginning of 2003. The Company expects the remaining balance to be fully collected and recoveries of the previously charged-off portion of the loan are anticipated. The fourth loan of $3.5 million is for the conversion and rehabilitation rehabilitation: see physical therapy. of three mixed use buildings into condos and commercial units. While this loan has not performed as originally expected, the Company has adequate collateral collateral (kəlăt`ərəl), something of value given or pledged as security for payment of a loan. Collateral consists usually of financial instruments, such as stocks, bonds, and negotiable paper, rather than physical goods, although coverage and no specific reserve has been established. The Company feels that adequate specific reserves have been established for problem loans, however there is no guaranty As a verb, to agree to be responsible for the payment of another's debt or the performance of another's duty, liability, or obligation if that person does not perform as he or she is legally obligated to do; to assume the responsibility of a guarantor; to warrant. that the reserves will be sufficient. Other Matters The Company announced on July July: see month. 1, 2003 that its merger agreement with CoVest Bancshares, Inc. was terminated ter·mi·nate v. ter·mi·nat·ed, ter·mi·nat·ing, ter·mi·nates v.tr. 1. To bring to an end or halt: effective June 30, 2003 due to the inability of the parties to agree upon the terms of an extension. Included in other expenses at June 30, 2003 are $425,000 of capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. costs relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc this transaction. On March 3, 2003, the Federal Reserve and the OBRE OBRE Office of Banks and Real Estate (Illinois State Regulatory Agency) commenced a regularly scheduled examination of the Company's banking subsidiaries. The examination included, among other items, a review of the Company's over-all risk management, lending and credit review practices. The regulators have completed their onsite review and, based upon preliminary discussions with the regulators, the Company expects some form of informal or formal 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. action will be taken. The Company expected to receive the written examination report during the second quarter; however the examination report has not yet been received. Midwest Banc Holdings, Inc. provides a wide range of retail and commercial lending services, personal and corporate trust services, residential mortgage origination Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real , and securities and insurance brokerage activities throughout the greater 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. and Western Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. . The Company's principal operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. are: Midwest Bank and Trust Company, Midwest Bank of Western Illinois, Midwest Financial and Investment Services, Inc., and Midwest Bank Insurance Services, L.L.C.. This press release contains certain "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. ," within the meaning of Section 27A of the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , and Section 21E of the Securities Exchange Act of 1934, as amended, and should be reviewed 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 Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and other publicly available information regarding the Company, copies of which are available from the Company upon request. Such publicly available information sets forth certain risks and uncertainties related to the Company's business which should be considered in evaluating "Forward-Looking Statements."
MIDWEST BANC HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
INCOME STATEMENT SUMMARY AND PER SHARE DATA
(In thousands, except per share data)
Three Months Ended
------------------
June 30, 2002-2003 Comparison
-------- --------------------
2003 2002 $Change % Change
---- ---- ------- --------
Interest income $27,576 $28,904 $(1,328) -4.6%
Interest expense 12,749 13,406 (657) -4.9%
--------- -------- -------- ---------
Net interest income 14,827 15,498 (671) -4.3%
Provision for loan losses 755 815 (60) -7.4%
Other income 5,108 2,563 2,545 99.3%
Net gains on securities
transactions 2,831 760 2,071 272.5%
Other expenses 10,672 8,464 2,208 26.1%
--------- -------- -------- ---------
Income before income taxes 11,339 9,542 1,797 18.8%
Provision for income taxes 3,548 3,154 394 12.5%
--------- -------- -------- ---------
Net income $ 7,791 $ 6,388 $ 1,403 22.0%
========= ======== ======== =========
Basic earnings per share(1) $ 0.44 $ 0.40 $ 0.04 10.0%
========= ======== ======== =========
Diluted earnings per share(1) $ 0.43 $ 0.39 $ 0.04 10.3%
========= ======== ======== =========
Cash dividends declared(1) $ 0.10 $ 0.10 $ 0.00 0.0%
========= ======== ======== =========
Six Months Ended
----------------
June 30, 2002-2003 Comparison
-------- --------------------
2003 2002 $Change % Change
---- ---- -------- ---------
Interest income $57,558 $56,986 $ 572 1.0%
Interest expense 25,765 26,655 (890) -3.3%
--------- -------- -------- ---------
Net interest income 31,793 30,331 1,462 4.8%
Provision for loan losses 1,745 1,477 268 18.1%
Other income 9,068 5,240 3,828 73.1%
Net gains on securities
transactions 2,933 1,643 1,290 78.5%
Other expenses 21,455 16,662 4,793 28.8%
--------- -------- -------- ---------
Income before income taxes 20,594 19,075 1,519 8.0%
Provision for income taxes 6,409 6,374 35 0.5%
--------- -------- -------- ---------
Net income $14,185 $12,701 $1,484 11.7%
========= ======== ======== =========
Basic earnings per share(1) $ 0.80 $ 0.79 $ 0.01 1.3%
========= ======== ======== =========
Diluted earnings per share(1) $ 0.78 $ 0.77 $ 0.01 1.3%
========= ======== ======== =========
Cash dividends declared(1) $ 0.10 $ 0.10 $ 0.00 0.0%
========= ======== ======== =========
Three Months Ended
------------------ Quarter to Quarter
June 30, March 31, Comparison
-------- --------- ------------------
2003 2003 $Change % Change
---- ---- ------- --------
Interest income $27,576 $29,982 $(2,406) -8.0%
Interest expense 12,749 13,016 (267) -2.1%
--------- -------- -------- ---------
Net interest income 14,827 16,966 (2,139) -12.6%
Provision for loan losses 755 990 (235) -23.7%
Other income 5,108 3,960 1,148 29.0%
Net gains on securities
transactions 2,831 102 2,729 2,675.5%
Other expenses 10,672 10,783 (111) -1.0%
--------- -------- -------- ---------
Income before income taxes 11,339 9,255 2,084 22.5%
Provision for income taxes 3,548 2,861 687 24.0%
--------- -------- -------- ---------
Net income $ 7,791 $ 6,394 $ 1,397 21.8%
========= ======== ======== =========
Basic earnings per share(1) $ 0.44 $ 0.36 $ 0.08 22.2%
========= ======== ======== =========
Diluted earnings per share(1) $ 0.43 $ 0.35 $ 0.08 22.9%
========= ======== ======== =========
Cash dividends declared(1) $ 0.10 $ 0.10 $ 0.00 0.0%
========= ======== ======== =========
(1) Restated for the 3-for-2 stock dividend effective July 1, 2002.
MIDWEST BANC HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(In thousands, except per share data)
Three Months Ended Six Months Ended
------------------ ----------------
June 30, March 31, June 30,
------- -------- -------
2003 2002 2003 2003 2002
---- ---- ---- ---- ----
Income Statement
Data:
Net income $ 7,791 $ 6,388 $ 6,394 $ 14,185 $ 12,701
Net overhead
expense to
average
assets(1)(2) 1.00% 1.27% 1.27% 1.13% 1.25%
Efficiency
ratio(2)(4)(8) 49.86 44.84 48.45 49.15 44.74
Other income
to average
assets 0.92 0.55 0.73 0.83 0.57
Other expense
to average
assets 1.92 1.82 2.00 1.96 1.83
Per Share Data(3):
Earnings per
share (basic) $ 0.44 $ 0.40 $ 0.36 $ 0.80 0.79
Earnings
per share
(diluted) 0.43 0.39 0.35 0.78 0.77
Cash dividends
declared 0.10 0.10 0.10 0.20 0.20
Book value at
end of period 8.98 6.90 8.71 8.98 6.90
Tangible book
value at end
of period 8.72 6.72 8.44 8.72 6.72
Stock price at
end of period 19.42 19.93 18.22 19.42 19.93
Average stock
price 18.77 18.32 19.46 19.11 16.38
Selected Financial
Ratios:
Return on
average
assets(5) 1.40% 1.38% 1.19% 1.29% 1.39%
Return on
average
equity(6) 19.63 24.19 17.70 18.71 24.86
Dividend
payout 22.84 25.21 27.84 25.04 25.36
Loan to
deposit 68.22 81.33 73.93 68.22 81.33
Average equity
to average
assets 7.14 5.69 6.70 6.91 5.60
Capital to
assets 7.00 5.94 6.95 7.00 5.94
Tangible
capital to
assets 6.79 5.78 6.74 6.79 5.78
Tier I capital
to risk-
weighted
assests 10.93 10.03 12.30 10.93 10.03
Tier II
capital to
risk-weighted
assests 11.66 10.95 13.40 11.66 10.95
Net interest
margin (tax
equivalent)(7)(8) 3.03 3.64 3.45 3.24 3.61
Allowance for
loan losses to
total loans
at the end of
period 1.12 1.03 1.33 1.12 1.03
Net loans
charged off
to average
total loans 1.37 0.09 0.10 0.71 0.08
Nonperforming
loans to
total loans
at the end
of period(9) 2.29 0.53 1.83 2.29 0.53
Nonperforming
assets to
total assets(10) 1.15 0.32 0.96 1.215 0.32
Allowance to
nonperforming
loans 0.49x 1.96x 0.72x 0.49x 1.96x
June 30, March 31, December 31,
-------- --------- ------------
2003 2002 2003 2002
---- ---- ---- ----
Balance Sheet Data:
Total assets $2,285,062 $1,876,585 $2,230,937 $2,009,047
Total earning
assets 2,136,639 1,764,246 2,099,179 1,908,533
Average assets
(quarter-to-date) 2,230,493 1,863,404 2,187,401 1,971,807
Average assets
(year-to-date) 2,212,410 1,839,578 2,187,401 1,889,511
Total loans 1,078,278 1,086,499 1,136,389 1,136,704
Allowance for loan
losses 12,044 11,210 15,063 20,754
Total deposits 1,580,655 1,335,917 1,537,047 1,390,648
Borrowings 497,986 409,252 509,700 462,382
Stockholders' equity 159,868 111,513 154,961 114,951
Tangible
stockholders'
equity(11) 155,238 108,529 150,277 111,929
Average equity
(quarter-to-date) 159,158 105,939 146,488 115,308
Average equity
(year-to-date) 152,860 103,019 146,488 110,101
Common Shares
Outstanding(3) 17,800 16,156 17,798 16,154
Average Shares
Outstanding (quarter
-to-date)(3) 17,798 16,127 17,727 16,157
Average Shares
Outstanding (year-to-
date)(3) 17,763 16,102 17,727 16,131
(1) Other expenses less other income divided by average total assets.
(2) Excludes net gains on securities transactions.
(3) Adjusted to reflect the 3-for-2 stock dividend effective July 1,
2002 for periods prior to that date.
(4) Other expense divided by the sum of net interest income (tax
equivalent) plus other income.
(5) Net income divided by quarter to date average assets.
(6) Net income divided by quarter to date average equity.
(7) Net interest income, on a tax equivalent basis, divided by quarter
to date average interest earning assets.
(8) The following table reconciles reported net interest income on a
tax equivalent basis for the periods presented:
2Q03 1Q03 4Q02 2Q02
Net interest income $ 14,827 $ 16,966 $ 14,055 $ 15,498
Tax equivalent
adjustment to net
interest income 1,127 973 803 610
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Net interest income,
tax equivalent
basis $ 15,954 $ 17,939 $ 14,858 $ 16,108
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(9) Includes total nonaccrual and all other loans 90 days or more past
due.
(10) Includes total nonaccrual, all other loans 90 days or more past
due, and other real estate owned.
(11) Stockholders' equity less goodwill. The following table
reconciles reported stockholders' equity to tangible
stockholders' equity for the periods presented:
2Q03 1Q03 4Q02 2Q02
Stockholders' equity $159,868 $154,961 $114,951 $111,513
Goodwill 4,630 4,684 3,022 2,984
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Tangible stockholders'
equity $155,238 $150,277 $111,929 $108,529
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