MB FINANCIAL INC /MD - FORM 8-K - EX-99 - PRESS RELEASE

Attached files

file	filename
8-K - MB FINANCIAL, INC. 8-K 07212011 - MB FINANCIAL INC /MD	mbfi_8k072111.htm

EXHIBIT 99

MB Financial, Inc.

800 West Madison Street

Chicago, Illinois 60607

(888) 422-6562

NASDAQ: MBFI

PRESS RELEASE

For Information at MB Financial, Inc. contact:

Jill York - Vice President and Chief Financial Officer

E-Mail: jyork@mbfinancial.com

FOR IMMEDIATE RELEASE

MB FINANCIAL, INC. REPORTS 53% REDUCTION IN NON-PERFORMING LOANS, CONTINUED STRONG CAPITAL POSITION AND GROWTH IN CORE PRE-TAX, PRE-PROVISION EARNINGS OVER THE PREVIOUS QUARTER

CHICAGO, July 21, 2011 – MB Financial, Inc. (NASDAQ: MBFI), the holding company for MB Financial Bank, N.A (“the Bank” or “MB Financial Bank”), announced today second quarter results for 2011. The words “MB Financial,” “the Company,” “we,” “our” and “us” refer to MB Financial, Inc. and its consolidated subsidiaries, unless indicated otherwise. We had a net loss of $7.4 million and a net loss available to common stockholders of $10.0 million for the second quarter of 2011 compared to net income of $19.2 million and net income available to common stockholders of $16.6 million for the second quarter of 2010, and net income of $6.9 million and net income available to common stockholders of $4.3 million for the first quarter of 2011. The net loss for the second quarter of 2011 was due to the sale of certain loans described below, which required us to increase our provision for credit losses by approximately $50 million.

Key items for the quarter were as follows:

Credit Quality – Decreased Non-Performing Loans, and Non-Performing Assets:

During the second quarter of 2011, we sold certain performing, sub-performing and non-performing loans. The loans sold had an aggregate carrying amount of $281.6 million prior to the transfer to loans held for sale, $156.3 million of which were non-performing loans. We received $194.6 million in proceeds (net of expenses) and recognized approximately $87 million in charge-offs as a result of this transaction. The loan sale caused us to increase our provision for credit losses in the quarter by approximately $50 million.

Our non-performing loans were $151.0 million or 2.54% of total loans as of June 30, 2011, a decrease of $167.9 million (53%) from $318.9 million at March 31, 2011. Excluding the loan sale, our non-performing loans would have decreased by approximately $12 million in the second quarter of 2011. Our allowance for loan losses to non-performing loans was 86.12% as of June 30, 2011 compared to 55.94% as of March 31, 2011.

Our provision for credit losses was $61.3 million for the second quarter of 2011, while our net charge-offs were $92.6 million. For the first quarter of 2011, our provision for credit losses and net charge-offs were $40.0 million and $53.8 million, respectively. Excluding the loan sale, our provision for credit losses and net charge-offs for the second quarter of 2011 would have been approximately $11 million and $6 million, respectively.

·	Our non-performing assets were $239.3 million or 2.40% of total assets as of June 30, 2011, a decrease of $159.9 million (40%) from $399.2 million or 3.96% of total assets as of March 31, 2011.

·	Our allowance for loan losses to total loans was 2.19% as of June 30, 2011 compared to 2.80% as of March 31, 2011. The decrease was primarily due to the loan sale and the related reduction in non-performing and sub-performing loans discussed above.

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

Core pre-tax, pre-provision earnings were $47.4 million, or 3.06% of risk-weighted assets, for the second quarter of 2011, compared to $48.4 million or 2.71% of risk-weighted assets for the second quarter of 2010. Core pre-tax, pre-provision earnings increased $45.5 million, or 2.81% of risk-weighted assets, from the first quarter of 2011.

·	Net interest income on a fully tax equivalent basis decreased to $85.2 million, or by 4.6%, compared to $89.3 million for the second quarter of 2010. Net interest income on a fully tax equivalent basis increased $353 thousand compared to the first quarter of 2011.

·	Net interest margin on a fully tax equivalent basis increased to 3.92% from 3.91% in the second quarter of 2010 and from 3.88% in the first quarter of 2011.

·	Core other income increased 13.5% to $31.6 million compared to $27.8 million for the second quarter of 2010. Core other income increased $2.6 million, or 9.1%, compared to the first quarter of 2011.

Strong Capital Position:

MB Financial Bank significantly exceeds the “Well-Capitalized” threshold established under the regulations of the Office of the Comptroller of the Currency. At June 30, 2011, MB Financial, Inc.’s consolidated total risk-based capital ratio was 19.13%, Tier 1 capital to risk-weighted assets ratio was 17.06% and Tier 1 capital to average asset ratio was 11.16%, compared with 18.33%, 16.31% and 11.00%, respectively, as of March 31, 2011. As of June 30, 2011, total capital was approximately $567.8 million in excess of the “Well-Capitalized” threshold, compared with $548.1 million as of March 31, 2011. Our tangible common equity to tangible assets ratio was 7.76% at June 30, 2011 compared to 7.73% at March 31, 2011.

RESULTS OF OPERATIONS

Second Quarter Results

Net Interest Income

Net interest income on a fully tax equivalent basis increased $353 thousand from the first quarter of 2011 and decreased by $4.1 million from the second quarter of 2010 to the second quarter of 2011. Our net interest margin, on a fully tax equivalent basis, was 3.92% for the second quarter of 2011 compared to 3.88% in the first quarter of 2011 and 3.91% in the second quarter of 2010. The margin increase from the first quarter of 2011 was primarily due to a decrease in average cash balances held at the Federal Reserve, continued downward deposit repricing, and less margin reduction from non-performing loans. The margin increase from the second quarter of 2010 was primarily due to continued downward deposit repricing and less margin reduction from non-performing loans.

Our net interest margin, on a fully tax equivalent basis, was 3.90% for the first six months of 2011 compared to 3.80% in the first six months of 2010. The margin increase from 2010 was due to a decrease in our average cost of funds as a result of an improved deposit mix and downward repricing of interest bearing deposits.

Our non-performing loans reduced net interest margin during the second quarter of 2011, first quarter of 2011 and the second quarter of 2010 by approximately 15 basis points, 19 basis points and 21 basis points, respectively.

See the supplemental net interest margin table for further detail.

Other Income (in thousands):

		Three Months Ended										Six Months Ended
			June 30,		March 31,		December 31,		September 30,		June 30,		June 30,		June 30,
			2011		2011		2010		2010		2010		2011		2010
Core other income:
	Loan service fees	$	2,812	$	1,126	$	1,532	$	1,659	$	2,042	$	3,938	$	3,326
	Deposit service fees		9,023		10,030		9,920		10,705		9,461		19,053		18,309
	Lease financing, net		6,861		5,783		7,185		5,022		5,026		12,644		9,646
	Brokerage fees		1,615		1,419		1,231		1,407		1,129		3,034		2,374
	Trust and asset management fees		4,455		4,431		4,243		3,923		3,536		8,886		6,871
	Increase in cash surrender value of life insurance		1,451		968		930		1,209		706		2,419		1,377
	Accretion of FDIC indemnification asset		1,339		1,831		3,009		3,602		3,067		3,170		3,067
	Other operating income		4,041		3,386		3,857		2,406		2,872		7,427		5,741
Total core other income			31,597		28,974		31,907		29,933		27,839		60,571		50,711

Non-core other income: (1)
	Net gain (loss) on sale of investment securities		232		(3)		(4)		9,482		2,304		229		9,170
	Net gain(loss) on sale of other assets		13		357		419		299		(99)		370		(88)
	Net gain on sale of loans held for sale (A)		1,790		-		-		-		-		1,790		-
	Net gain (loss) recognized on other real estate owned (A)		(3,628)		(369)		(1,656)		(3,608)		52		(3,997)		(3,247)
	Net loss recognized on other real estate owned related to FDIC transactions (A)		(1,017)		(3)		(468)		(305)		-		(1,020)		-
	Acquisition related gains		-		-		-		-		62,649		-		62,649
	Increase (decrease) in market value of assets held in trust deferred compensation (A)		158		187		597		(3)		(39)		345		(32)
Total non-core other income			(2,452)		169		(1,112)		5,865		64,867		(2,283)		68,452

Total other income		$	29,145	$	29,143	$	30,795	$	35,798	$	92,706	$	58,288	$	119,163

(1)	Letter denotes the corresponding line items where these non-core other income items reside in the consolidated statements of income as follows: A – Other operating income.

Core other income increased by $2.6 million from the first quarter of 2011 to the second quarter of 2011. Loan service fees increased by $1.7 million in the second quarter due to an increase in prepayment penalties and exit fees received on early payoffs. Deposit service fees decreased from the first quarter of 2011 due to changes in customer usage and product changes. Net lease financing income increased mainly as a result of an increase in the sales of third party equipment maintenance contracts and favorable lease renewals. The increase in cash surrender value of life insurance was higher due to a death benefit recorded in 2011. Accretion of indemnification asset decreased as expected due to a corresponding decrease in the indemnification asset balance during the second quarter of 2011. The decrease in non-core other income was mainly a result of higher valuation adjustments recognized on other real estate owned (“OREO”) in the second quarter of 2011. This was offset by gains recognized in the second quarter of 2011 on loans held for sale as of March 31, 2011.

Core other income increased by $9.9 million from the first six months of 2010 to the first six months of 2011. Net lease financing increased primarily due to an increase in the sales of third party equipment maintenance contracts. Core trust and asset management fees increased primarily due to an increase in assets under management as a result of organic growth and an increase in the market value of assets under management. The increase in cash surrender value of life insurance was higher due to a death benefit recorded and an improvement in overall asset yields. Non-core other income decreased in the first half of 2011 compared to the first half of 2010 as a result of the acquisition related gains recognized on the Broadway Bank and New Century Bank FDIC-assisted transactions in the second quarter of 2010 and lower gains on sales of investment securities in 2011.

Other Expense (in thousands):

		Three Months Ended										Six Months Ended
			June 30,		March 31,		December 31,		September 30,		June 30,		June 30,		June 30,
			2011		2011		2010		2010		2010		2011		2010
Core other expense:
	Salaries and employee benefits	$	37,657	$	37,588	$	35,802	$	37,427	$	37,143	$	75,245	$	70,558
	Occupancy and equipment expense		8,483		9,394		7,938		8,800		8,928		17,877		18,107
	Computer services expense		2,633		2,510		2,445		2,654		3,322		5,143		5,850
	Advertising and marketing expense		1,748		1,719		1,573		1,620		1,639		3,467		3,272
	Professional and legal expense		1,853		1,225		1,718		1,637		1,370		3,078		2,448
	Brokerage fee expense		574		483		448		596		420		1,057		882
	Telecommunication expense		937		935		819		975		964		1,872		1,872
	Other intangibles amortization expense		1,416		1,425		1,632		1,567		1,505		2,841		3,015
	FDIC insurance premiums		3,502		3,428		3,930		3,873		3,833		6,930		7,797
	Other real estate expense, net		1,251		398		858		734		417		1,649		1,102
	Other operating expenses		6,516		6,572		6,855		6,598		6,530		13,088		12,812
Total core other expense			66,570		65,677		64,018		66,481		66,071		132,247		127,715

Non-core other expense: (1)
	Branch impairment charges		-		1,000		-		-		-		1,000		-
	Increase (decrease) in market value of assets held in trust for deferred compensation (A)		158		187		597		(3)		(39)		345		(32)
Total non-core other expense			158		1,187		597		(3)		(39)		1,345		(32)

Total other expense		$	66,728	$	66,864	$	64,615	$	66,478	$	66,032	$	133,592	$	127,683

(1)	Letters denote the corresponding line items where these non-core other expense items reside in the consolidated statements of income as follows: A – Salaries and employee benefits.

Core other expense increased by $893 thousand from the first quarter of 2011 to the second quarter of 2011. Occupancy and equipment expense decreased as a result of decreased property taxes. Professional and legal expense increased during the second quarter of 2011 as a result of higher loan remediation expenses. Other real estate expense increased as a result of an increase in property maintenance and real estate tax expense. Non-core other expense was primarily impacted by a $1.0 million fixed asset impairment charge incurred in the first quarter of 2011 caused by our decision to close a branch.

Core other expense increased by $4.5 million from the first six months of 2010 to the first six months of 2011. Salaries and employee benefits expense increased due additional employees added due to the New Century and Broadway FDIC-assisted transactions, problem loan remediation staff added throughout 2010 and increased leasing commissions on higher revenues. Computer services expense decreased primarily due to conversion expenditures on FDIC assisted transactions completed in 2010. Professional and legal expense increased during the first half of 2011 as a result of higher loan remediation expenses. FDIC insurance premiums decreased due to lower deposit balances. Other real estate expense increased as a result of an increase in property maintenance and real estate tax expense. As noted above, non-core other expense was primarily impacted by a $1.0 million fixed asset impairment charge.

Income Taxes

The Company had an income tax benefit of $9.1 million for the three months ended June 30, 2011 and a benefit of $11.5 million for the six months ended June 30, 2011. The three month and year-to-date tax benefits are calculated based on pre-tax income excluding tax-exempt items. The year-to-date amount also includes a $2 million increase in deferred tax assets as a result of the Illinois corporate income tax rate increase which was enacted and reflected in the first quarter of 2011.

LOAN PORTFOLIO

The following table sets forth the composition of the loan portfolio, excluding loans held for sale, as of the dates indicated (dollars in thousands):

			June 30,			March 31,			December 31,			September 30,			June 30,
			2011			2011			2010			2010			2010
			Amount	% of Total		Amount	% of Total		Amount	% of Total		Amount	% of Total		Amount	% of Total
Commercial related credits:
	Commercial loans	$	1,108,295	19%	$	1,154,451	18%	$	1,206,984	18%	$	1,291,115	19%	$	1,315,899	19%
	Commercial loans collateralized by assignment of lease payments (lease loans)		1,031,677	17%		1,038,507	16%		1,053,446	16%		1,019,083	15%		992,301	14%
	Commercial real estate		1,863,223	32%		2,084,651	33%		2,176,584	33%		2,259,708	33%		2,378,272	34%
	Construction real estate		246,557	4%		356,579	6%		423,339	6%		445,881	6%		496,732	7%
Total commercial related credits			4,249,752	72%		4,634,188	73%		4,860,353	73%		5,015,787	73%		5,183,204	74%
Other loans:
	Residential real estate		317,821	5%		335,423	5%		328,482	5%		328,985	5%		321,665	5%
	Indirect motorcycle		172,620	3%		163,301	3%		161,761	2%		166,163	2%		164,269	2%
	Indirect automobile		9,916	0%		11,757	0%		13,903	1%		15,928	0%		17,914	0%
	Home equity		357,181	6%		371,108	6%		381,662	6%		386,866	6%		389,298	6%
	Consumer loans		75,069	1%		74,585	1%		59,320	1%		76,219	1%		73,436	1%
Total other loans			932,607	15%		956,174	15%		945,128	15%		974,161	14%		966,582	14%
Gross loans excluding covered loans			5,182,359	87%		5,590,362	88%		5,805,481	88%		5,989,948	87%		6,149,786	88%
	Covered loans (1)		755,670	13%		777,634	12%		812,330	12%		859,038	13%		879,909	12%
Total loans		$	5,938,029	100%	$	6,367,996	100%	$	6,617,811	100%	$	6,848,986	100%	$	7,029,695	100%

(1)	Covered loans refer to loans we acquired in FDIC-assisted transactions that are subject to loss-sharing agreements with the FDIC.

The decrease in loan balances from the March 31, 2011 to June 30, 2011 was primarily due to the sale during the second quarter of 2011 of approximately $281.6 million of loans.

ASSET QUALITY

The following table presents a summary of non-performing assets, excluding loans held for sale, credit-impaired loans that were acquired as part of our FDIC-assisted transactions (see definition of “purchased credit-impaired loans” below) and OREO related to FDIC-assisted transactions, as of the dates indicated (dollar amounts in thousands):

			June 30,		March 31,		December 31,		September 30,		June 30,
			2011		2011		2010		2010		2010
Non-performing loans:
	Non-accrual loans(1)	$	149,905	$	318,923	$	362,441	$	392,477	$	343,838
	Loans 90 days or more past due, still accruing interest		1,121		-		1		115		-
Total non-performing loans			151,026		318,923		362,442		392,592		343,838

OREO			88,185		80,107		71,476		59,114		43,988
Repossessed vehicles			55		139		82		321		191
Total non-performing assets		$	239,266	$	399,169	$	434,000	$	452,027	$	388,017

	Total allowance for loan losses (2)		130,057		178,410		192,217		193,926		195,612
	Partial charge-offs taken on non-performing loans		54,424		156,692		163,972		171,549		142,872
	Allowance for loan losses, including partial charge-offs	$	184,481	$	335,102	$	356,189	$	365,475	$	338,484

Accruing restructured loans(3)		$	35,037	$	31,819	$	22,543	$	12,226	$	10,940

Total non-performing loans to total loans			2.54%		5.01%		5.48%		5.73%		4.89%
Total non-performing assets to total assets			2.40%		3.96%		4.21%		4.26%		3.64%
Allowance for loan losses to non-performing loans			86.12%		55.94%		53.03%		49.40%		56.89%
Allowance for loan losses to non-performing loans,
	including partial charge-offs taken(4)		89.79%		70.46%		67.66%		64.78%		69.55%

(1)	Includes $25.6 million, $60.9 million, $47.6 million, $16.9 million, and $6.0 million of restructured loans on non-accrual status at June 30, 2011, March 31, 2011, December 31, 2010, September 30, 2010 and June 30, 2010, respectively.

(2)	Includes $12.7 million, $13.6 million, $15.6 million and $8.5 million for unfunded credit commitments at March 31, 2011, December 31, 2010, September 30, 2010 and June 30, 2010, respectively.

(3)	Accruing restructured loans consists primarily of commercial and commercial real estate loans that have been modified and are performing in accordance with those modified terms.

(4)	Calculated by adding partial charge-offs to both the numerator and denominator in the calculation.

The decreases in total non-performing loans and total non-performing assets from March 31, 2011 to June 30, 2011 were primarily due to the sale during the second quarter of 2011 of loans with an aggregate carrying amount of $281.6 million prior to the transfer to loans held for sale, $156.3 million of which were non-performing.

The following table presents a summary of total performing loans greater than 30 days and less than 90 days past due, excluding loans held for sale and credit-impaired loans that were acquired as part of our FDIC-assisted transactions (see definition of “purchased credit-impaired loans” below), as of the dates indicated (dollar amounts in thousands):

		June 30,		March 31,		December 31,		September 30,		June 30,
		2011		2011		2010		2010		2010

30 - 59 Days Past Due	$	10,568	$	23,912	$	9,386	$	19,302	$	26,491
60 - 89 Days Past Due		4,881		4,049		5,073		6,011		3,746
	$	15,449	$	27,961	$	14,459	$	25,313	$	30,237

Approximately $1.1 million of performing loans past due were classified as potential problem loans (defined below) as of June 30, 2011, compared to $11.0 million as of March 31, 2011.

The following table represents a summary of OREO, excluding OREO related to FDIC-assisted transactions (in thousands):

		June 30,		March 31,		December 31,		September 30,		June 30,
		2011		2011		2010		2010		2010

Balance at the beginning of quarter	$	80,107	$	71,476	$	59,114	$	43,988	$	41,589
Transfers in at fair value less estimated costs to sell		15,761		25,167		27,170		21,383		4,967
Fair value adjustments		(3,417)		(1,314)		(1,562)		(3,429)		-
Net (losses) gains on sales of OREO		(212)		945		(94)		(179)		52
Cash received upon disposition		(4,054)		(16,167)		(13,152)		(2,649)		(2,620)
Balance at the end of quarter	$	88,185	$	80,107	$	71,476	$	59,114	$	43,988

The following table presents data related to non-performing loans, by dollar amount and category at June 30, 2011, excluding loans held for sale and credit-impaired loans that were acquired as part of our FDIC-assisted transactions (dollar amounts in thousands):

	Commercial and Lease Loans			Construction Real Estate Loans			Commercial Real Estate Loans				Consumer Loans		Total Loans
	Number of Relationships		Amount	Number of Relationships		Amount	Number of Relationships		Amount		Amount		Amount
$10.0 million or more	-	$	-	-	$	-	-	$	-	$	-	$	-
$5.0 million to $9.9 million	3		20,950	1		7,708	4		32,325		-		60,983
$1.5 million to $4.9 million	-		-	3		8,858	11		29,442		-		38,300
Under $1.5 million	34		12,397	3		653	42		25,319		13,374		51,743
	37	$	33,347	7	$	17,219	57	$	87,086	$	13,374	$	151,026

Percentage of individual loan category			1.56%			6.98%			4.67%		1.43%		2.54%

Specific reserves and partial charge-offs as a
percentage of non-performing loans			46%			57%			25%

The following table presents data related to non-performing loans, by dollar amount and category at March 31, 2011, excluding loans held for sale and credit-impaired loans that were acquired as part of our FDIC-assisted transactions (dollar amounts in thousands):

	Commercial and Lease Loans			Construction Real Estate Loans			Commercial Real Estate Loans				Consumer Loans		Total Loans
	Number of Relationships		Amount	Number of Relationships		Amount	Number of Relationships		Amount		Amount		Amount
$10.0 million or more	-	$	-	2	$	25,195	1	$	17,328	$	-	$	42,523
$5.0 million to $9.9 million	2		16,245	3		16,597	2		18,312		-		51,154
$1.5 million to $4.9 million	3		5,827	13		42,055	19		50,748		1,575		100,205
Under $1.5 million	47		18,210	29		13,998	158		66,366		26,467		125,041
	52	$	40,282	47	$	97,845	180	$	152,754	$	28,042	$	318,923

Percentage of individual loan category			1.84%			27.44%			7.33%		2.93%		5.01%

Specific reserves and partial charge-offs as a
percentage of non-performing loans			46%			47%			32%

The decrease in non-performing loans from March 31, 2011 to June 30, 2011 was primarily due to the sale during the second quarter of 2011 of loans with an aggregate carrying amount of $281.6 million prior to the transfer to loans held for sale, $156.3 million of which were non-performing. The following non-performing balances were sold (in thousands):


Commercial	$	9,122
Commercial Real Estate		74,973
Construction Real Estate		55,313
Consumer		16,930
Total	$	156,338

We define potential problem loans as performing loans rated substandard that do not meet the definition of a non-performing loan (See “Asset Quality” section above for non-performing loans). Potential problem loans carry a higher probability of default and require additional attention by management. The aggregate principal amount of potential problem loans was $234.8 million, or 3.95% of total loans, as of June 30, 2011, compared to $307.4 million, or 4.83% of total loans, as of March 31, 2011. Our potential problem loans decreased during the second quarter primarily as the result of the loan sale discussed above. Potential problem loans with an aggregate carrying amount of approximately $66.6 million prior to the transfer to loans held for sale were sold during the second quarter of 2011.

“Purchased credit-impaired loans” refer to certain loans acquired in FDIC-assisted transactions, for which deterioration in credit quality occurred before the acquisition date. Upon acquisition, these loans were recorded at fair value with interest income to be accreted over the estimated life of the loan when cash flows are reasonably estimable, even if the underlying loans are contractually past due. Acquisition fair value incorporates the Company’s estimate, as of the acquisition date, of credit losses over the remaining life of the portfolio.

The following table displays information on commercial real estate loans by risk category and type, excluding covered loans, at June 30, 2011 (dollars in thousands):

	Risk Category

					Potential Problem
	Non-Performing				and Other Watch
	Loans (NPLs)				List Loans			Pass Loans			Total
		Amount	% of Loan Balance Reserved(1)		Amount	% of Loan Balance Reserved		Amount	% of Loan Balance Reserved		Amount	% of Loan Balance Reserved(1)

Church and school	$	3,645	41%	$	237	21%	$	59,625	1%	$	63,507	4%
Healthcare		-	0%		-	0%		156,941	2%		156,941	2%
Industrial		40,003	34%		50,436	18%		370,301	2%		460,740	8%
Multifamily		1,079	35%		38,369	17%		356,312	2%		395,760	3%
Office		4,130	14%		24,886	19%		155,272	2%		184,288	4%
Other		25,992	11%		11,107	13%		144,954	2%		182,053	4%
Retail		12,237	15%		52,168	11%		355,529	2%		419,934	3%
	$	87,086	25%	$	177,203	16%	$	1,598,934	2%	$	1,863,223	4%

(1)	To calculate the percentage of loan balances reserved, partial charge-offs taken on non-performing loans have been added back to both reserves and outstanding balance.

The following table sets forth trend information for commercial real estate loans by risk category, excluding covered loans, for the past four quarters (dollars in thousands):

	Risk Category

					Potential Problem
	Non-Performing				and Other Watch
	Loans (NPLs)				List Loans			Pass Loans			Total
		Amount	% of Loan Balance Reserved(1)		Amount	% of Loan Balance Reserved		Amount	% of Loan Balance Reserved		Amount	% of Loan Balance Reserved(1)

Total CRE loans as of June 30, 2011	$	87,086	25%	$	177,203	16%	$	1,598,934	2%	$	1,863,223	4%

Total CRE loans as of March 31, 2011	$	152,754	32%	$	256,368	20%	$	1,675,529	2%	$	2,084,651	7%

Total CRE loans as of December 31, 2010	$	158,864	32%	$	263,829	18%	$	1,753,891	2%	$	2,176,584	7%

Total CRE loans as of September 30, 2010	$	180,125	27%	$	290,734	14%	$	1,788,849	2%	$	2,259,708	6%

(1)	To calculate the percentage of loan balances reserved, partial charge-offs taken on non-performing loans have been added back to both reserves and outstanding balance.

The following table sets forth trend information for construction real estate loans by risk category, excluding covered loans, for the past five quarters (dollars in thousands):

	Risk Category

					Potential Problem
	Non-Performing				and Other Watch
	Loans (NPLs)				List Loans			Pass Loans			Total
		Amount	% of Loan Balance Reserved(1)		Amount	% of Loan Balance Reserved		Amount	% of Loan Balance Reserved		Amount	% of Loan Balance Reserved(1)

Total construction loans as of June 30, 2011	$	17,219	57%	$	33,010	25%	$	196,328	5%	$	246,557	13%

Total construction loans as of March 31, 2011	$	97,845	47%	$	45,026	19%	$	213,708	3%	$	356,579	23%

Total construction loans as of December 31, 2010	$	122,077	47%	$	64,303	14%	$	236,959	3%	$	423,339	22%

Total construction loans as of September 30, 2010	$	130,422	48%	$	95,256	16%	$	220,203	3%	$	445,881	23%

Total construction loans as of June 30, 2010	$	176,531	44%	$	97,162	17%	$	223,039	3%	$	496,732	24%

(1)	To calculate the percentage of loan balances reserved, partial charge-offs taken on non-performing loans have been added back to both reserves and outstanding balance.

Below is a reconciliation of the activity in our allowance for loan losses for the periods indicated (dollar amounts in thousands):

			Three Months Ended									Six Months Ended
			June 30,		March 31,		December 31,		September 30,		June 30,		June 30,		June 30,
			2011		2011		2010		2010		2010		2011		2010
Balance at the beginning of period		$	178,410	$	192,217	$	193,926	$	195,612	$	177,787	$	192,217	$	177,072
Provision for credit losses			61,250		40,000		49,000		65,000		85,000		101,250		132,200
Reclassification to allowance for
	unfunded credit commitments		(17,050)		-		-		-		-		(17,050)		-
Charge-offs:
	Commercial loans		(7,991)		(3,151)		(9,141)		(11,362)		(30,211)		(11,142)		(37,574)
	Commercial loans collateralized by assignment of lease payments (lease loans)		(93)		-		(43)		(418)		(917)		(93)		(1,250)
	Commercial real estate loans		(55,250)		(29,775)		(27,360)		(25,265)		(15,002)		(85,025)		(27,203)
	Construction real estate		(18,826)		(21,094)		(17,136)		(29,120)		(22,992)		(39,920)		(48,277)
	Residential real estate		(8,080)		(3,562)		(1,363)		(1,500)		(4)		(11,642)		(463)
	Indirect vehicle		(553)		(718)		(968)		(503)		(611)		(1,271)		(1,728)
	Home equity		(5,493)		(1,907)		(1,364)		(1,369)		(1,271)		(7,400)		(1,899)
	Consumer loans		(344)		(544)		(428)		(600)		(202)		(888)		(727)
	Total charge-offs		(96,630)		(60,751)		(57,803)		(70,137)		(71,210)		(157,381)		(119,121)
Recoveries:
	Commercial loans		758		2,565		3,842		1,900		2,322		3,323		3,046
	Commercial loans collateralized by assignment of lease payments (lease loans)		153		66		26		62		96		219		96
	Commercial real estate loans		312		1,534		800		907		177		1,846		363
	Construction real estate		2,364		2,026		1,672		330		1,055		4,390		1,168
	Residential real estate		26		7		127		7		9		33		50
	Indirect vehicle		369		325		286		232		344		694		645
	Home equity		19		48		250		11		31		67		90
	Consumer loans		76		373		91		2		1		449		3
	Total recoveries		4,077		6,944		7,094		3,451		4,035		11,021		5,461

Total net charge-offs			(92,553)		(53,807)		(50,709)		(66,686)		(67,175)		(146,360)		(113,660)

Allowance for loan losses (1)			130,057		178,410		192,217		193,926		195,612		130,057		195,612

Allowance for unfunded credit commitments (2)			17,050		-		-		-		-		17,050		-

Allowance for credit losses		$	147,107	$	178,410	$	192,217	$	193,926	$	195,612	$	147,107	$	195,612

Total loans, excluding loans held for sale		$	5,938,029	$	6,367,996	$	6,617,811	$	6,848,986	$	7,029,695	$	5,938,029	$	7,029,695
Average loans, excluding loans held for sale		$	6,299,900	$	6,460,637	$	6,723,840	$	6,939,415	$	6,925,140	$	6,379,824	$	6,925,140

Ratio of allowance for loan losses to total loans,
	excluding loans held for sale		2.19%		2.80%		2.90%		2.83%		2.78%		2.19%		2.78%
Ratio of allowance for credit losses to total loans,
	excluding loans held for sale		2.48%		2.80%		2.90%		2.83%		2.78%		2.48%		2.78%
Net loan charge-offs to average loans, excluding loans
	held for sale (annualized)		5.89%		3.38%		2.99%		3.81%		3.89%		4.63%		3.31%

(1)	Includes $12.7 million, $13.6 million, $15.6 million and $8.5 million for unfunded credit commitments at March 31, 2011, December 31, 2010, September 30, 2010 and June 30, 2010, respectively.

(2)	The reserve for unfunded credit commitments (primarily letters of credit) was reclassified from the allowance for loan losses to other liabilities as of June 30, 2011.

Excluding the effects of the loan sale transaction during the second quarter of 2011, which resulted in approximately $87 million in charge-offs and an increase in the provision for losses of approximately $50 million, the provision for credit losses during the second quarter of 2011 would have been approximately $11 million. The decrease in the required provision, excluding the effects of the loan sale transaction, was a result of lower downward migration of loans to non-performing status and higher collateral values underlying loans that did migrate. Excluding the effects of the loan sale, net charge-offs were approximately $6 million.

Our allowance for loan losses is comprised of three elements: a general loss reserve, a specific reserve for impaired loans, and a reserve for smaller-balance homogenous loans. The following table presents these three elements of our allowance for loan losses as of June 30, 2011, March 31, 2011 and December 31, 2010 (in thousands):

		June 30,		March 31,		December 31,
		2011		2011		2010

General loss reserve	$	104,002	$	126,423	$	126,435
Specific reserve (1)		12,111		38,054		51,826
Smaller-balance homogenous loans reserve		13,944		13,933		13,956
Total allowance for loan losses	$	130,057	$	178,410	$	192,217

(1)	The specific reserve as of March 31, 2011 and December 31, 2010 includes reserves on unfunded credit commitments of approximately $13.6 million and $15.6 million, respectively. Beginning as of June 30, 2011, reserves on unfunded credit commitments are recorded as liabilities.

The general reserve decreased during the second quarter of 2011 primarily due to a decrease in sub-performing loans as a result of the loan sale as well as a reduction in valuation risk. Specific reserves decreased during the second quarter of 2011 primarily as a result of a reduction in non-performing loan balances as a result of the loan sale during the second quarter and the reclassification of the reserves on unfunded credit commitments to other liabilities. A majority of reserves on unfunded credit commitments relate to specific reserves on problem letters of credit.

Although management believes that adequate specific and general loan loss allowances have been established, actual losses are dependent upon future events and, as such, further additions to the level of specific and general loan loss allowances may become necessary.

INVESTMENT SECURITIES

The following table sets forth the fair value, amortized cost, and total unrealized gain of our investment securities, by type (in thousands):

		At June 30,		At March 31,		At December 31,		At September 30,		At June 30,
		2011		2011		2010		2010		2010

Securities available for sale:
Fair value
Government sponsored agencies and enterprises	$	55,656	$	56,971	$	19,434	$	24,698	$	49,142
States and political subdivisions		392,670		365,481		364,932		379,675		377,105
Mortgage-backed securities		1,424,302		1,279,968		1,197,066		898,837		1,326,432
Corporate bonds		6,019		6,019		6,140		6,140		6,356
Equity securities		10,435		10,215		10,171		10,315		10,172
Total fair value	$	1,889,082	$	1,718,654	$	1,597,743	$	1,319,665	$	1,769,207

Amortized cost
Government sponsored agencies and enterprises	$	54,423	$	56,452	$	18,766	$	23,826	$	48,138
States and political subdivisions		371,598		350,851		351,274		355,121		359,556
Mortgage-backed securities		1,401,975		1,258,171		1,175,021		887,422		1,301,301
Corporate bonds		6,019		6,019		6,140		6,140		6,356
Equity securities		10,246		10,169		10,093		10,016		9,949
Total amortized cost	$	1,844,261	$	1,681,662	$	1,561,294	$	1,282,525	$	1,725,300

Unrealized gain
Government sponsored agencies and enterprises	$	1,233	$	519	$	668	$	872	$	1,004
States and political subdivisions		21,072		14,630		13,658		24,554		17,549
Mortgage-backed securities		22,327		21,797		22,045		11,415		25,131
Corporate bonds		-		-		-		-		-
Equity securities		189		46		78		299		223
Total unrealized gain	$	44,821	$	36,992	$	36,449	$	37,140	$	43,907

Securities held to maturity, at cost:
Mortgage-backed securities	$	230,154	$	102,206	$	-	$	-	$	-

We do not have any meaningful direct or indirect holdings of subprime residential mortgage loans, home equity lines of credit, or any Fannie Mae or Freddie Mac preferred or common equity securities in our investment securities portfolio. Additionally, more than 99% of our mortgage-backed securities are agency guaranteed.

DEPOSIT MIX

The following table shows the composition of deposits as of the dates indicated (dollars in thousands):

			June 30,			March 31,			December 31,			September 30,			June 30,
			2011			2011			2010			2010			2010
				% of			% of			% of			% of			% of
			Amount	Total		Amount	Total		Amount	Total		Amount	Total		Amount	Total
Low cost deposits:
	Noninterest bearing deposits	$	1,776,873	23%	$	1,666,868	22%	$	1,691,599	21%	$	1,704,142	20%	$	1,604,482	19%
	Money market and NOW accounts		2,645,953	34%		2,712,314	35%		2,776,181	34%		2,819,731	34%		2,773,306	33%
	Savings accounts		729,222	9%		718,896	10%		697,851	8%		633,975	7%		618,199	7%
Total low cost deposits			5,152,048	66%		5,098,078	65%		5,165,631	63%		5,157,848	61%		4,995,987	59%

Certificates of deposit:
	Certificates of deposit		2,082,393	27%		2,273,447	28%		2,447,005	30%		2,649,759	31%		2,824,075	34%
	Public funds - certificates of deposit		42,422	1%		53,144	1%		72,112	1%		90,754	1%		76,863	1%
	Brokered deposit accounts		441,720	6%		467,337	6%		468,210	6%		498,264	6%		500,342	6%
Total certificates of deposit			2,566,535	34%		2,793,928	35%		2,987,327	37%		3,238,777	39%		3,401,280	41%

Total deposits		$	7,718,583	100%	$	7,892,006	100%	$	8,152,958	100%	$	8,396,625	100%	$	8,397,267	100%

Our deposit mix improved in the quarter, with approximately 66% of deposits in lower cost sources at June 30, 2011, compared to 65% at March 31, 2011 and 59% at June 30, 2010. Our ratio of certificates of deposit to total deposits was 34% at June 30, 2011 compared to 35% at March 31, 2011 and 41% at June 30, 2010. Our ratio of noninterest bearing deposits to total deposits was 23% at June 30, 2011 up from 22% at March 31, 2011 and 19% at June 30, 2010.

FORWARD-LOOKING STATEMENTS

When used in this press release and in reports filed with or furnished to the Securities and Exchange Commission, in press releases or other public stockholder communications, or in oral statements made with the approval of an authorized 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 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 our 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.

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 revenues, cost savings, synergies and other benefits from our merger and acquisition activities might not be realized within the anticipated time frames or at all, and costs or difficulties relating to integration matters, including but not limited to customer and employee retention, might be greater than expected; (2) the possibility that the expected benefits of the FDIC-assisted transactions we previously completed will not be realized; (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, which could necessitate additional provisions for loan losses, resulting both from loans we originate and loans we acquire from other financial institutions; (4) results of examinations by the Office of Comptroller of Currency and other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our allowance for loan losses or write-down assets; (5) competitive pressures among depository institutions; (6) interest rate movements and their impact on customer behavior and net interest margin; (7) the impact of repricing and competitors’ pricing initiatives on loan and deposit products; (8) fluctuations in real estate values; (9) the ability to adapt successfully to technological changes to meet customers’ needs and developments in the market place; (10) our ability to realize the residual values of our direct finance, leveraged, and operating leases; (11) our ability to access cost-effective funding; (12) changes in financial markets; (13) changes in economic conditions in general and in the Chicago metropolitan area in particular; (14) the costs, effects and outcomes of litigation; (15) new legislation or regulatory changes, including but not limited to the Dodd-Frank Wall Street Reform and Consumer Protection Act and regulations adopted thereunder, changes in federal and/or state tax laws or interpretations thereof by taxing authorities, changes in laws, rules or regulations applicable to companies that have participated in the TARP Capital Purchase Program of the U.S. Department of the Treasury and other governmental initiatives affecting the financial services industry; (16) changes in accounting principles, policies or guidelines; (17) our future acquisitions of other depository institutions or lines of business; and (18) future goodwill impairment due to changes in our business, changes in market conditions, or other factors.

We do not undertake any obligation to update any forward-looking statement to reflect circumstances 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 (Unaudited)

As of the dates indicated

(Amounts in thousands)

			June 30,		March 31,		December 31,		September 30,		June 30,
			2011		2011		2010		2010		2010
ASSETS
Cash and due from banks		$	129,942	$	123,794	$	106,726	$	131,381	$	115,450
Interest earning deposits with banks			513,378		504,765		737,433		857,997		262,828
Total cash and cash equivalents			643,320		628,559		844,159		989,378		378,278
Investment securities:
	Securities available for sale, at fair value		1,889,082		1,718,654		1,597,743		1,319,665		1,769,207
	Securities held to maturity, at cost		230,154		102,206		-		-		-
	Non-marketable securities - FHLB and FRB Stock		80,815		80,186		80,186		78,807		78,807
Total investment securities			2,200,051		1,901,046		1,677,929		1,398,472		1,848,014
Loans held for sale			-		11,533		-		-		-
Loans:
	Total loans excluding covered loans		5,182,359		5,590,362		5,805,481		5,989,948		6,149,786
	Covered loans		755,670		777,634		812,330		859,038		879,909
	Total loans		5,938,029		6,367,996		6,617,811		6,848,986		7,029,695
	Less allowance for loan losses		130,057		178,410		192,217		193,926		195,612
Net loans			5,807,972		6,189,586		6,425,594		6,655,060		6,834,083
Lease investments, net			139,391		129,182		126,906		131,324		143,143
Premises and equipment, net			210,901		209,257		210,886		185,064		180,714
Cash surrender value of life insurance			126,938		126,014		125,046		124,116		123,324
Goodwill, net			387,069		387,069		387,069		387,069		387,069
Other intangibles, net			32,318		33,734		35,159		36,791		35,199
Other real estate owned			88,185		80,107		71,476		59,114		43,988
Other real estate owned related to FDIC transactions			69,920		61,461		44,745		63,495		75,205
FDIC indemnification asset			119,837		148,314		215,460		380,342		377,060
Other assets			151,833		165,481		155,935		212,755		231,888
Total assets		$	9,977,735	$	10,071,343	$	10,320,364	$	10,622,980	$	10,657,965
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits:
	Noninterest bearing	$	1,776,873	$	1,666,868	$	1,691,599	$	1,704,142	$	1,604,482
	Interest bearing		5,941,710		6,225,138		6,461,359		6,692,483		6,792,785
Total deposits			7,718,583		7,892,006		8,152,958		8,396,625		8,397,267
Short-term borrowings			235,733		295,180		268,844		282,364		302,087
Long-term borrowings			275,559		275,327		285,073		294,529		306,569
Junior subordinated notes issued to capital trusts			158,554		158,563		158,571		158,579		158,605
Accrued expenses and other liabilities			243,962		100,031		110,132		154,969		148,524
Total liabilities			8,632,391		8,721,107		8,975,578		9,287,066		9,313,052
Stockholders' Equity
Preferred stock			194,407		194,255		194,104		193,956		193,809
Common stock			546		546		546		540		538
Additional paid-in capital			728,244		726,604		725,400		716,294		714,882
Retained earnings			396,081		406,594		402,810		402,754		408,991
Accumulated other comprehensive income			27,322		22,566		22,233		22,655		26,783
Treasury stock			(3,771)		(2,845)		(2,828)		(2,806)		(2,632)
Controlling interest stockholders' equity			1,342,829		1,347,720		1,342,265		1,333,393		1,342,371
Noncontrolling interest			2,515		2,516		2,521		2,521		2,542
Total stockholders' equity			1,345,344		1,350,236		1,344,786		1,335,914		1,344,913
Total liabilities and stockholders' equity		$	9,977,735	$	10,071,343	$	10,320,364	$	10,622,980	$	10,657,965

MB FINANCIAL, INC. & SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands, except per share data)(Unaudited)

		Three Months Ended					Six Months Ended
		June 30,	March 31,	December 31,	September 30,	June 30,	June 30,	June 30,
		2011	2011	2010	2010	2010	2011	2010
Interest income:
	Loans	$ 84,114	$ 87,167	$ 92,701	$ 94,697	$ 94,699	$ 171,281	$ 177,086
	Investment securities:
	Taxable	10,290	7,752	7,001	11,420	12,154	18,042	32,120
	Nontaxable	3,443	3,345	3,367	3,387	3,403	6,788	6,831
	Federal funds sold	-	-	-	-	-	-	2
	Other interest bearing accounts	258	470	504	248	185	728	276
	Total interest income	98,105	98,734	103,573	109,752	110,441	196,839	216,315
Interest expense:
	Deposits	11,746	13,359	15,598	18,597	20,283	25,105	41,655
	Short-term borrowings	239	217	255	281	264	456	609
	Long-term borrowings & junior subordinated notes	3,713	2,953	3,065	3,256	3,213	6,666	6,552
	Total interest expense	15,698	16,529	18,918	22,134	23,760	32,227	48,816
Net interest income		82,407	82,205	84,655	87,618	86,681	164,612	167,499
Provision for credit losses		61,250	40,000	49,000	65,000	85,000	101,250	132,200
Net interest income after provision for credit losses		21,157	42,205	35,655	22,618	1,681	63,362	35,299
Other income:
	Loan service fees	2,812	1,126	1,532	1,659	2,042	3,938	3,326
	Deposit service fees	9,023	10,030	9,920	10,705	9,461	19,053	18,309
	Lease financing, net	6,861	5,783	7,185	5,022	5,026	12,644	9,646
	Brokerage fees	1,615	1,419	1,231	1,407	1,129	3,034	2,374
	Trust & asset management fees	4,455	4,431	4,243	3,923	3,536	8,886	6,871
	Net gain (loss) on sale of investment securities	232	(3)	(4)	9,482	2,304	229	9,170
	Increase in cash surrender value of life insurance	1,451	968	930	1,209	706	2,419	1,377
	Net gain (loss) on sale of other assets	13	357	419	299	(99)	370	(88)
	Acquisition related gains	-	-	-	-	62,649	-	62,649
	Accretion of FDIC indemnification asset	1,339	1,831	3,009	3,602	3,067	3,170	3,067
	Other operating income	1,344	3,201	2,330	(1,510)	2,885	4,545	2,462
	Total other income	29,145	29,143	30,795	35,798	92,706	58,288	119,163
Other expense:
	Salaries & employee benefits	37,815	37,775	36,399	37,424	37,104	75,590	70,526
	Occupancy & equipment expense	8,483	9,394	7,938	8,800	8,928	17,877	18,107
	Computer services expense	2,633	2,510	2,445	2,654	3,322	5,143	5,850
	Advertising & marketing expense	1,748	1,719	1,573	1,620	1,639	3,467	3,272
	Professional & legal expense	1,853	1,225	1,718	1,637	1,370	3,078	2,448
	Brokerage fee expense	574	483	448	596	420	1,057	882
	Telecommunication expense	937	935	819	975	964	1,872	1,872
	Other intangible amortization expense	1,416	1,425	1,632	1,567	1,505	2,841	3,015
	FDIC insurance premiums	3,502	3,428	3,930	3,873	3,833	6,930	7,797
	Branch impairment charges	-	1,000	-	-	-	1,000	-
	Other real estate expense, net	1,251	398	858	734	417	1,649	1,102
	Other operating expenses	6,516	6,572	6,855	6,598	6,530	13,088	12,812
	Total other expense	66,728	66,864	64,615	66,478	66,032	133,592	127,683
(Loss) income before income taxes		(16,426)	4,484	1,835	(8,062)	28,355	(11,942)	26,779
Income taxes		(9,060)	(2,460)	(1,358)	(5,253)	9,158	(11,520)	6,635
Net (loss) income		(7,366)	6,944	3,193	(2,809)	19,197	(422)	20,144
Preferred stock dividends and discount accretion		2,602	2,601	2,598	2,597	2,594	5,203	5,187
	Net (loss) income available to common stockholders	$ (9,968)	$ 4,343	$ 595	$ (5,406)	$ 16,603	$ (5,625)	$ 14,957

	Three Months Ended										Six Months Ended
		June 30,		March 31,		December 31,		September 30,		June 30,		June 30,		June 30,
		2011		2011		2010		2010		2010		2011		2010
Common share data:
Net (loss) income per basic common share	$	(0.14)	$	0.13	$	0.06	$	(0.05)	$	0.36	$	(0.01)	$	0.39
Impact of preferred stock dividends on basic earnings (loss) per common share		(0.04)		(0.05)		(0.05)		(0.05)		(0.05)		(0.09)		(0.10)
Basic (loss) earnings per common share		(0.18)		0.08		0.01		(0.10)		0.31		(0.10)		0.29

Net (loss) income per common share		(0.14)		0.13		0.06		(0.05)		0.36		(0.01)		0.38
Impact of preferred stock dividends on diluted earnings (loss) per common share		(0.04)		(0.05)		(0.05)		(0.05)		(0.05)		(0.09)		(0.10)
Diluted (loss) earnings per common share		(0.18)		0.08		0.01		(0.10)		0.31		(0.10)		0.28

Weighted average common shares outstanding		54,002,979		53,961,176		53,572,157		53,327,219		52,702,779		53,982,193		51,987,725
Diluted weighted average common shares outstanding		54,002,979		54,254,876		53,790,047		53,327,219		53,034,426		53,982,193		52,332,142

.		Three Months Ended										Six Months Ended
		June 30,		March 31,		December 31,		September 30,		June 30,			June 30,		June 30,
		2011		2011		2010		2010		2010			2011		2010
Performance Ratios:
Annualized return on average assets		(0.30)	%	0.28	%	0.12	%	(0.10)	%	0.73	%		(0.01)	%	0.39	%
Annualized return on average common equity		(3.43)		1.53		0.21		(1.86)		5.79			(0.98)		2.69
Annualized cash return on average tangible common equity(1)		(4.80)		2.88		0.89		(2.34)		9.52			(1.02)		4.81
Net interest rate spread		3.71		3.68		3.63		3.71		3.69			3.70		3.58
Cost of funds(2)		0.74		0.77		0.83		0.96		1.04			0.76		1.09
Efficiency ratio(3)		57.01		57.71		53.72		55.32		56.39			57.35		57.16
Annualized net non-interest expense to average assets(4)		1.41		1.46		1.22		1.36		1.45			1.43		1.48
Core pre-tax pre-provision earnings to risk-weighted assets(5)		3.06		2.81		3.08		2.91		2.71			3.01		2.54
Core pre-tax pre-provision earnings to average assets(5)		1.91		1.81		1.99		1.91		1.84			1.86		1.74
Net interest margin		3.79		3.76		3.72		3.81		3.79			3.78		3.69
Tax equivalent effect		0.13		0.12		0.11		0.11		0.12			0.12		0.11
Net interest margin - fully tax equivalent basis(6)		3.92		3.88		3.83		3.92		3.91			3.90		3.80
Asset Quality Ratios:
Non-performing loans(7) to total loans		2.54	%	5.01	%	5.48	%	5.73	%	4.89	%		2.54	%	4.89	%
Non-performing assets(7) to total assets		2.40		3.96		4.21		4.26		3.64			2.40		3.64
Allowance for loan losses to non-performing loans(7)		86.12		55.94		53.03		49.40		56.89			86.12		56.89
Allowance for loan losses to non-performing loans,(7)
including partial charge-offs taken		89.79		70.46		67.66		64.78		69.55			89.79		69.55
Allowance for loan losses to total loans		2.19		2.80		2.90		2.83		2.78			2.19		2.78
Allowance for credit losses to total loans		2.48		2.80		2.90		2.83		2.78			2.48		2.78
Net loan charge-offs to average loans (annualized)		5.89		3.38		2.99		3.81		3.89			4.63		3.31
Capital Ratios:
Tangible equity to tangible assets(8)		9.79	%	9.74	%	9.43	%	9.06	%	9.12	%		9.79	%	9.12	%
Tangible common equity to risk weighted assets(9)		11.95		11.36		10.94		10.46		10.31			11.95		10.31
Tangible common equity to tangible assets(10)		7.76		7.73		7.47		7.16		7.23			7.76		7.23
Book value per common share(11)	$	21.14	$	21.24	$	21.14	$	21.14	$	21.46		$	21.14	$	21.46
Less: goodwill and other intangible assets, net of tax
benefit, per common share		7.49		7.52		7.53		7.64		0.76			7.49		0.76
Tangible book value per common share(12)		13.64		13.73		13.60		13.58		13.81			13.64		13.81

Total capital (to risk-weighted assets)		19.13	%	18.33	%	17.75	%	17.10	%	16.77	%		19.13	%	16.77	%
Tier 1 capital (to risk-weighted assets)		17.06		16.31		15.75		15.12		14.81			17.06		14.81
Tier 1 capital (to average assets)		11.16		11.00		10.66		10.38		10.48			11.16		10.48
Tier 1 common capital (to risk-weighted assets)		11.47		11.01		10.61		10.14		9.96			11.47		9.96

(1)	Net cash flow available to common stockholders (net income available to common stockholders, plus other intangibles amortization expense, net of tax benefit) divided by average tangible common equity (average common equity less average goodwill and average other intangibles, net of tax benefit).
(2)	Equals total interest expense divided by the sum of average interest bearing liabilities and noninterest bearing deposits.
(3)	Equals total other expense excluding non-core items divided by the sum of net interest income on a fully tax equivalent basis and total other income less non-core items.
(4)	Equals total other expense excluding non-core items less total other income excluding non-core items divided by average assets.
(5)	Equals net income before taxes excluding loan loss provision expense, non-core other income items, and non-core other expense items divided by risk-weighted assets or average assets.
(6)	Represents net interest income, on a fully tax equivalent basis assuming a 35% tax rate, as a percentage of average interest earning assets.
(7)	Non-performing loans excludes purchased credit-impaired loans and loans held for sale. Non-performing assets excludes purchased credit-impaired loans, loans held for sale, and other real estate owned related to FDIC transactions.
(8)	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.
(9)	Equals total ending common stockholders’ equity less goodwill and other intangibles, net of tax benefit, divided by total risk weighted assets.
(10)	Equals total ending common stockholders’ equity less goodwill and other intangibles, net of tax benefit, divided by total assets less goodwill and other intangibles, net of tax benefit.
(11)	Equals total ending common stockholders’ equity divided by common shares outstanding.
(12)	Equals total ending common 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 with accounting principles generally accepted in the United States of America (GAAP). These measures include core pre-tax, pre-provision earnings; core other income, core other expense, non-core other income and non-core other expense; net interest income on a fully tax equivalent basis, net interest margin on a fully tax equivalent basis; the addition of partial charge-offs to the allowance for loan losses and to the numerator and the denominator in the ratio of the allowance for loan losses to non-performing loans; efficiency ratio, ratio of annualized net non-interest expense to average assets, ratio of core pre-tax, pre-provision earnings to risk-weighted assets and ratio of core pre-tax, pre-provision earnings to average assets, with net gains and losses on securities available for sale, net gains and losses on sale of other assets, net gains and losses on other real estate owned, acquisition related gains and increase (decrease) in market value of assets held in trust for deferred compensation excluded from the non-interest income components of these ratios, and impairment charges and increase (decrease) in market value of assets held in trust for deferred compensation excluded from the non-interest expense components of these ratios; ratios of tangible equity to tangible assets, tangible common equity to risk weighted assets, tangible common equity to tangible assets and Tier 1 common capital to risk-weighted assets; tangible book value per common share; and annualized cash return on average tangible common equity. Our management uses these non-GAAP measures, together with the related GAAP measures, in its analysis of our performance and in making business decisions. Management also uses these measures for peer comparisons.

Management believes that core pre-tax, pre-provision earnings are a useful measure in assessing our core operating performance, particularly during times of economic stress. In recent periods, our results of operations have been negatively impacted by adverse economic conditions, as seen in our elevated levels of loan charge-offs and provision for credit losses. Management believes that measuring earnings before the impact of the provision for loan losses makes our financial data more comparable between reporting periods so that investors can better understand our operating performance trends. Management also believes that this is a standard figure used in the banking industry to measure performance.

Management believes that core and non-core other income and other expense are useful in assessing our core operating performance and in understanding the primary drivers of our other income and other expense when comparing periods.

The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt 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.

Management believes that the addition of partial charge-offs to the allowance for loan losses and to the numerator and the denominator in the ratio of allowance for loan losses to non-performing loans may be useful to investors because it reflects what our loan loss reserve levels would have been had the partial charge-offs not been taken.

Management also believes that by excluding net gains and losses on securities available for sale, net gains and losses on sale of other assets, net gains and losses on other real estate owned, acquisition-related gains and increase (decrease) in market value of assets held in trust for deferred compensation from the non-interest income components, and excluding impairment changes and increase (decrease) in market value of assets held in trust for deferred compensation from the non-interest expense components, of the efficiency ratio, the ratio of annualized net non-interest expense to average assets, the ratio of core pre-tax, pre-provision earnings to risk-weighted assets and the ratio of core pre-tax, pre-provision earnings to average assets, these ratios better reflect our core operating performance, as the excluded items do not pertain to our core business operations and their exclusion makes these ratios more meaningful when comparing our operating results from period to period.

In addition, management believes that presenting the ratio of Tier 1 common equity to risk weighted assets is useful for assessing our capital strength and for peer comparison purposes. The other measures exclude the acquisition-related goodwill and other intangible assets, net of tax benefit, in determining tangible assets, tangible equity, tangible common equity and average tangible common equity and exclude other intangible amortization expense, net of tax benefit, in determining net cash flow available to common stockholders. 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 as well as our capital strength. Management also believes that providing measures that exclude balances of acquisition-related goodwill and other intangible assets, which are subjective components of valuation, facilitates the comparison of our performance with the performance of our peers. In addition, management believes that these are standard financial measures used in the banking industry to evaluate performance.

The non-GAAP disclosures contained herein 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 equity (in thousands):

			June 30,		March 31,		December 31,		September 30,		June 30,
			2011		2011		2010		2010		2010
Stockholders' equity - as reported		$	1,345,344	$	1,350,236	$	1,344,786	$	1,335,914	$	1,344,913
	Less: goodwill		387,069		387,069		387,069		387,069		387,069
	Less: other intangible, net of tax benefit		21,007		21,927		22,853		23,914		22,879
Tangible equity		$	937,268	$	941,240	$	934,864	$	924,931	$	934,965

The following table presents a reconciliation of tangible assets to total assets (in thousands):

			June 30,		March 31,		December 31,		September 30,		June 30,
			2011		2011		2010		2010		2010
Total assets - as reported		$	9,977,735	$	10,071,343	$	10,320,364	$	10,622,980	$	10,657,965
	Less: goodwill		387,069		387,069		387,069		387,069		387,069
	Less: other intangible, net of tax benefit		21,007		21,927		22,853		23,914		22,879
Tangible assets		$	9,569,659	$	9,662,347	$	9,910,442	$	10,211,997	$	10,248,017

The following table presents a reconciliation of tangible common equity to stockholders’ common equity (in thousands):

			June 30,		March 31,		December 31,		September 30,		June 30,
			2011		2011		2010		2010		2010
Common stockholders' equity - as reported		$	1,150,937	$	1,155,981	$	1,150,682	$	1,141,958	$	1,151,104
	Less: goodwill		387,069		387,069		387,069		387,069		387,069
	Less: other intangible, net of tax benefit		21,007		21,927		22,853		23,914		22,879
Tangible common equity		$	742,861	$	746,985	$	740,760	$	730,975	$	741,156

The following table presents a reconciliation of average tangible common equity to average common stockholders’ equity (in thousands):

			Three Months Ended									Six Months Ended
			June 30,		March 31,		December 31,		September 30,		June 30,		June 30,		June 30,
			2011		2011		2010		2010		2010		2011		2010
Average common stockholders' equity - as reported		$	1,165,022	$	1,152,119	$	1,147,581	$	1,152,058	$	1,150,440	$	1,158,565	$	1,120,317
	Less: average goodwill		387,069		387,069		387,069		387,069		387,069		387,069		387,445
	Less: average other intangible assets,
	net of tax benefit		21,331		22,254		23,236		22,596		22,905		21,790		23,396
Average tangible common equity		$	756,622	$	742,796	$	737,276	$	742,393	$	740,466	$	749,706	$	709,476

The following table presents a reconciliation of net cash flow available to common stockholders to net income (loss) available to common stockholders (in thousands):

			Three Months Ended									Six Months Ended
			June 30,		March 31,		December 31,		September 30,		June 30,		June 30,		June 30,
			2011		2011		2010		2010		2010		2011		2011
Net (loss) income available to common
stockholders - as reported		$	(9,968)	$	4,343	$	595	$	(5,406)	$	16,603	$	(5,625)	$	14,957
	Add: other intangible amortization expense,
	net of tax benefit		920		926		1,062		1,018		978		1,846		1,960
Net cash flow available to common stockholders		$	(9,048)	$	5,269	$	1,657	$	(4,388)	$	17,581	$	(3,779)	$	16,917

Efficiency Ratio Calculation (Dollars in Thousands)

			Three Months Ended									Six Months Ended
			June 30,		March 31,		December 31,		September 30,		June 30,		June 30,		June 30,
			2011		2011		2010		2010		2010		2011		2010
Non-interest expense		$	66,728	$	66,864	$	64,615	$	66,478	$	66,032	$	133,592	$	127,683
Adjustment for impairment charges			-		1,000		-		-		-		1,000		-
Adjustment for increase (decrease) in market value of
assets held in trust for deferred compensation			158		187		597		(3)		(39)		345		(32)
	Non-interest expense - as adjusted	$	66,570	$	65,677	$	64,018	$	66,481	$	66,071	$	132,247	$	127,715

Net interest income		$	82,407	$	82,205	$	84,655	$	87,618	$	86,681	$	164,612	$	167,499
Tax equivalent adjustment			2,775		2,625		2,609		2,614		2,642		5,400		5,235
Net interest income on a fully tax equivalent basis			85,182		84,830		87,264		90,232		89,323		170,012		172,734
Plus other income			29,145		29,143		30,795		35,798		92,706		58,288		119,163
Less net (losses) gains on other real estate owned			(4,645)		(372)		(2,124)		(3,913)		52		(5,017)		(3,247)
Less net (losses) gains on securities available for sale			232		(3)		(4)		9,482		2,304		229		9,170
Less net gains (losses) on sale of other assets			13		357		419		299		(99)		370		(88)
Less net gain on sale of loans held for sale			1,790		-		-		-		-		1,790		-
Less acquisition related gains			-		-		-		-		62,649		-		62,649
Less increase (decrease) in market value of assets held in
trust for deferred compensation			158		187		597		(3)		(39)		345		(32)
Net interest income plus non-interest income -
	as adjusted	$	116,779	$	113,804	$	119,171	$	120,165	$	117,162	$	230,583	$	223,445

Efficiency ratio			57.01%		57.71%		53.72%		55.32%		56.39%		57.35%		57.16%

Efficiency ratio (without adjustments)			59.82%		60.05%		55.97%		53.86%		36.81%		59.93%		44.54%

Annualized Net Non-interest Expense to Average Assets Calculation (Dollars in Thousands)

			Three Months Ended									Six Months Ended
			June 30,		March 31,		December 31,		September 30,		June 30,		June 30,		June 30,
			2011		2011		2010		2010		2010		2011		2010
Non-interest expense		$	66,728	$	66,864	$	64,615	$	66,478	$	66,032	$	133,592	$	127,683
Adjustment for impairment charges			-		1,000		-		-		-		1,000		-
Adjustment for increase (decrease) in market value of
assets held in trust for deferred compensation			158		187		597		(3)		(39)		345		(32)
	Non-interest expense - as adjusted		66,570		65,677		64,018		66,481		66,071		132,247		127,715

Other income			29,145		29,143		30,795		35,798		92,706		58,288		119,163
Less net (losses) gains on other real estate owned			(4,645)		(372)		(2,124)		(3,913)		52		(5,017)		(3,247)
Less net (losses) gains on securities available for sale			232		(3)		(4)		9,482		2,304		229		9,170
Less net gains (loss) on sale of other assets			13		357		419		299		(99)		370		(88)
Less net gain on sale of loans held for sale			1,790		-		-		-		-		1,790		-
Less acquisition related gains			-		-		-		-		62,649		-		62,649
Less increase (decrease) in market value of assets
held in trust for deferred compensation			158		187		597		(3)		(39)		345		(32)
Other income - as adjusted			31,597		28,974		31,907		29,933		27,839		60,571		50,711

Net non-interest expense		$	34,973	$	36,703	$	32,111	$	36,548	$	38,232	$	71,676	$	77,004

Average assets		$	9,966,898	$	10,198,626	$	10,452,626	$	10,634,556	$	10,584,722	$	10,082,121	$	10,467,843

Annualized net non-interest expense to average assets			1.41%		1.46%		1.22%		1.36%		1.45%		1.43%		1.48%

Annualized net non-interest expense to average assets
	(without adjustments)		1.51%		1.50%		1.28%		1.14%		-1.01%		1.51%		0.16%

Calculation of Core Pre-Tax, Pre-Provision Earnings (Dollars in Thousands)

			Three Months Ended									Six Months Ended
			June 30,		March 31,		December 31,		September 30,		June 30,		June 30,		June 30,
			2011		2011		2010		2010		2010		2011		2010
(Loss) income before income taxes		$	(16,426)	$	4,484	$	1,835	$	(8,062)	$	28,355	$	(11,942)	$	26,779
Provision for credit losses			61,250		40,000		49,000		65,000		85,000		101,250		132,200
	Pre-tax, pre-provision earnings		44,824		44,484		50,835		56,938		113,355		89,308		158,979

Non-core other income
	Net (losses) gains on other real estate owned		(4,645)		(372)		(2,124)		(3,913)		52		(5,017)		(3,247)
	Net (losses) gains on securities available for sale		232		(3)		(4)		9,482		2,304		229		9,170
	Net gain (loss) on sale of other assets		13		357		419		299		(99)		370		(88)
	Net gain on sale of loans held for sale		1,790		-		-		-		-		1,790		-
	Acquisition related gains		-		-		-		-		62,649		-		62,649
	Increase (decrease) in market value of assets held in
	trust for deferred compensation		158		187		597		(3)		(39)		345		(32)
Total non-core other income			(2,452)		169		(1,112)		5,865		64,867		(2,283)		68,452

Non-core other expense
	Impairment charges		-		1,000		-		-		-		1,000		-
	Increase (decrease) in market value of assets held in
	trust for deferred compensation		158		187		597		(3)		(39)		345		(32)
Total non-core other expense			158		1,187		597		(3)		(39)		1,345		(32)
Core pre-tax, pre-provision earnings		$	47,434	$	45,502	$	52,544	$	51,070	$	48,449	$	92,936	$	90,495

Risk-weighted assets		$	6,220,636	$	6,577,477	$	6,772,761	$	6,971,810	$	7,172,094	$	6,220,636	$	7,172,094

Average Assets		$	9,966,898	$	10,198,626	$	10,452,626	$	10,634,556	$	10,584,722	$	10,082,121	$	10,467,842


Annualized pre-tax, pre-provision earnings to risk-
	weighted assets		3.06%		2.81%		3.08%		2.91%		2.71%		3.01%		2.54%
Annualized pre-tax, pre-provision earnings to risk-
	weighted assets (without adjustments)		2.89%		2.74%		2.98%		3.24%		6.34%		2.90%		4.47%

Annualized pre-tax, pre-provision earnings to average
	assets		1.91%		1.81%		1.99%		1.91%		1.84%		1.86%		1.74%
Annualized pre-tax, pre-provision earnings to average
	assets (without adjustments)		1.80%		1.77%		1.93%		2.12%		4.30%		1.79%		3.06%

A reconciliation of net interest margin on a fully tax equivalent basis to net interest margin is contained in the tables under “Net Interest Margin.” A reconciliation of tangible book value per common share to book value per common share is contained in the “Selected Financial Ratios” table. Reconciliations of the allowance for loan losses including partial charge-offs to the allowance for loan losses, and the ratio of the allowance for loan losses to non-performing loans including partial charge-offs to the same ratio without the addition of partial charge-offs, are contained in the first table under “Asset Quality.” Reconciliations of core and non-core other income and other expense to other income and other expense are contained in the tables under “Results of Operations—Second Quarter Results.”

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 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,										Three Months Ended March 31,
				2011					2010					2011
				Average			Yield/		Average			Yield/		Average			Yield/
				Balance		Interest	Rate		Balance		Interest	Rate		Balance		Interest	Rate
Interest Earning Assets:
Loans (1) (2) (3):
Commercial related credits
	Commercial		$	1,147,173	$	13,578	4.75%	$	1,381,828		17,185	4.99%	$	1,164,698	$	14,331	4.99%
	Commercial loans collateralized by assignment
		of lease payments		1,041,311		14,502	5.57		980,959		15,207	6.20		1,003,872		14,090	5.61
	Real estate commercial			2,051,711		26,745	5.16		2,392,791		31,993	5.29		2,139,597		28,235	5.28
	Real estate construction			349,367		3,789	4.29		549,545		4,366	3.14		407,148		3,519	3.46
Total commercial related credits				4,589,562		58,614	5.05		5,305,123		68,751	5.13		4,715,315		60,175	5.10
Other loans
	Real estate residential			339,048		3,989	4.71		307,864		4,343	5.64		332,856		4,467	5.37
	Home equity			367,829		3,949	4.31		398,028		4,467	4.50		376,361		4,003	4.31
	Indirect			178,978		3,046	6.83		181,140		3,288	7.28		174,362		2,940	6.84
	Consumer loans			56,356		436	3.10		60,439		526	3.49		57,468		600	4.23
Total other loans				942,211		11,420	4.86		947,471		12,624	5.34		941,047		12,010	5.18
	Total loans, excluding covered loans			5,531,773		70,034	5.08		6,252,594		81,375	5.22		5,656,362		72,185	5.18
	Covered loans			768,127		15,003	7.83		672,546		14,133	8.43		804,275		15,805	7.97
	Total loans			6,299,900		85,037	5.41		6,925,140		95,508	5.53		6,460,637		87,990	5.52

Taxable investment securities				1,668,406		10,290	2.47		1,633,167		12,154	2.98		1,313,061		7,752	2.36
Investment securities exempt from federal income taxes (3)				357,828		5,297	5.86		358,192		5,236	5.78		348,831		5,146	5.90
Federal funds sold				-		-	0.00		-		-	0.00		-		-	0.00
Other interest bearing deposits				389,311		257	0.26		252,262		185	0.29		747,013		471	0.26
	Total interest earning assets		$	8,715,445	$	100,881	4.64	$	9,168,761	$	113,083	4.95	$	8,869,542	$	101,359	4.63
Non-interest earning assets				1,251,453					1,415,961					1,329,084
	Total assets		$	9,966,898				$	10,584,722				$	10,198,626

Interest Bearing Liabilities:
Core funding:
	Money market and NOW accounts		$	2,676,663	$	1,922	0.29%	$	2,745,286	$	3,905	0.57%	$	2,726,599	$	2,486	0.37%
	Savings accounts			725,810		312	0.17		609,378		487	0.32		710,455		420	0.24
	Certificate of deposit			2,173,951		5,522	1.02		2,870,090		11,012	1.54		2,362,918		6,418	1.10
	Customer repurchase agreements			242,939		155	0.26		270,506		253	0.38		262,578		187	0.29
Total core funding				5,819,363		7,911	0.55		6,495,260		15,657	0.97		6,062,550		9,511	0.64
Whole sale funding:
	Public funds			45,219		67	0.59		103,282		157	0.61		66,362		102	0.62
	Brokered accounts (includes fee expense)			462,003		3,924	3.41		502,638		4,723	3.77		467,417		3,933	3.41
	Other borrowings			461,653		3,796	3.25		473,468		3,223	2.69		440,241		2,983	2.71
Total wholesale funding				968,875		7,787	3.22		1,079,388		8,103	3.01		974,020		7,018	2.92
Total interest bearing liabilities			$	6,788,238	$	15,698	0.93	$	7,574,648	$	23,760	1.26	$	7,036,570	$	16,529	0.95
Non-interest bearing deposits				1,724,429					1,552,813					1,672,003
Other non-interest bearing liabilities				94,976					113,097					143,775
Stockholders' equity				1,359,255					1,344,164					1,346,278
		Total liabilities and stockholders' equity	$	9,966,898				$	10,584,722				$	10,198,626
		Net interest income/interest rate spread (4)			$	85,183	3.71%			$	89,323	3.69%			$	84,830	3.68%
		Taxable equivalent adjustment				2,775					2,642					2,625
		Net interest income, as reported			$	82,408				$	86,681				$	82,205
		Net interest margin (5)					3.79%					3.79%					3.76%
		Tax equivalent effect					0.13%					0.12%					0.12%
		Net interest margin on a fully equivalent basis (5)					3.92%					3.91%					3.88%

(1)	Non-accrual loans are included in average loans.
(2)	Interest income includes amortization of deferred loan origination fees of $1.3 million, $1.3 million, and $1.5 million for the three months ended June 30, 2011, March 31, 2011, and June 30 2010, 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.

				Six Months Ended June 30,
				2011					2010
				Average			Yield/		Average			Yield/
				Balance		Interest	Rate		Balance		Interest	Rate
Interest Earning Assets:
Loans (1) (2) (3):
Commercial related credits
	Commercial		$	1,155,886	$	27,909	4.87%	$	1,373,951	$	34,135	5.01%
	Commercial loans collateralized by assignment
		of lease payments		1,022,695		28,592	5.59		958,678		29,439	6.14
	Real estate commercial			2,095,411		54,980	5.22		2,415,820		64,556	5.31
	Real estate construction			378,098		7,308	3.84		572,682		9,164	3.18
Total commercial related credits				4,652,090		118,789	5.08		5,321,131		137,294	5.13
Other loans
	Real estate residential			335,969		8,456	5.03		301,983		8,229	5.45
	Home equity			372,072		7,952	4.31		400,835		8,799	4.43
	Indirect			176,683		5,986	6.83		180,067		6,340	7.10
	Consumer loans			56,909		1,036	3.67		59,747		1,076	3.63
Total other loans				941,633		23,430	5.02		942,632		24,444	5.23
	Total loans, excluding covered loans			5,593,723		142,219	5.13		6,263,763		161,738	5.21
	Covered loans			786,101		30,808	7.90		379,528		16,904	8.98
	Total loans			6,379,824		173,027	5.47		6,643,291		178,642	5.42

Taxable investment securities				1,491,715		18,042	2.42		1,964,777		32,120	3.27
Investment securities exempt from federal income taxes (3)				353,355		10,443	5.88		359,418		10,510	5.82
Federal funds sold				-		-	0.00		710		2	0.56
Other interest bearing deposits				567,174		728	0.26		188,635		276	0.30
	Total interest earning assets		$	8,792,068	$	202,240	4.64	$	9,156,831	$	221,550	4.88
Non-interest earning assets				1,290,053					1,311,011
	Total assets		$	10,082,121				$	10,467,842

Interest Bearing Liabilities:
Core funding:
	Money market and NOW accounts		$	2,701,493	$	4,408	0.33%	$	2,727,104	$	7,533	0.56%
	Savings accounts			718,175		732	0.21		597,569		937	0.32
	Certificate of deposit			2,267,912		11,940	1.06		2,875,922		23,453	1.64
	Customer repurchase agreements			252,704		342	0.27		251,310		498	0.40
Total core funding				5,940,284		17,422	0.59		6,451,905		32,421	1.01
Whole sale funding:
	Public funds			55,732		169	0.62		102,768		344	0.68
	Brokered accounts (includes fee expense)			464,695		7,857	3.41		499,201		9,388	3.79
	Other borrowings			451,006		6,779	2.99		489,383		6,662	2.71
Total wholesale funding				971,433		14,805	3.07		1,091,352		16,394	3.03
Total interest bearing liabilities			$	6,911,717	$	32,227	0.94	$	7,543,257	$	48,815	1.30
Non-interest bearing deposits				1,698,361					1,503,810
Other non-interest bearing liabilities				119,241					106,810
Stockholders' equity				1,352,802					1,313,965
		Total liabilities and stockholders' equity	$	10,082,121				$	10,467,842
		Net interest income/interest rate spread (4)			$	170,013	3.70%			$	172,735	3.58%
		Taxable equivalent adjustment				5,400					5,235
		Net interest income, as reported			$	164,613				$	167,500
		Net interest margin (5)					3.78%					3.69%
		Tax equivalent effect					0.12%					0.11%
		Net interest margin on a fully equivalent basis (5)					3.90%					3.80%

(1)	Non-accrual loans are included in average loans.
(2)	Interest income includes amortization of deferred loan origination fees of $2.6 million and $2.6 million for the six months ended June 30, 2011, and June 30 2010, 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.

MB FINANCIAL INC /MD - FORM 8-K - EX-99 - PRESS RELEASE - July 21, 2011

Attached files

MB FINANCIAL INC /MD Reports