MB FINANCIAL INC /MD - FORM 8-K - EX-99 - EXHIBIT 99

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8-K - 8-K - MB FINANCIAL INC /MD	form8-kearningsrelease2q16.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:

Berry Allen - Investor Relations

E-Mail: beallen@mbfinancial.com

FOR IMMEDIATE RELEASE

MB FINANCIAL, INC. REPORTS EARNINGS FOR THE SECOND QUARTER OF 2016

CHICAGO, July 20, 2016 – MB Financial, Inc. (NASDAQ: MBFI), the holding company for MB Financial Bank, N.A., today announced 2016 second quarter net income available to common stockholders of $41.4 million, or $0.56 per diluted common share, compared to $37.1 million, or $0.50 per diluted common share, last quarter and $39.0 million, or $0.52 per diluted common share, in the second quarter a year ago.

KEY ITEMS

Growth in Operating Earnings for the Quarter

Operating earnings increased by $3.0 million, or $0.04 per diluted common share, compared to last quarter and $3.1 million, or $0.05 per diluted common share, compared to the second quarter of last year.

The following table presents a reconciliation of net income to operating earnings (in thousands):



							Six Months Ended
							June 30,
	2Q16		1Q16		2Q15		2016		2015
Net income - as reported	$	43,412	$	39,114	$	40,952	$	82,526	$	75,063
Non-core items adjustment:
Non-core items	2,454		3,335		1,325		5,789		9,935
Income tax expense on non-core items	1,003		577		526		1,580		3,943
Non-core items, net of tax	1,451		2,758		799		4,209		5,992
Operating earnings	44,863		41,872		41,751		86,735		81,055
Dividends on preferred shares	2,000		2,000		2,000		4,000		4,000
Operating earnings available to common stockholders	$	42,863	$	39,872	$	39,751	$	82,735	$	77,055
Diluted operating earnings per common share	$	0.58	$	0.54	$	0.53	$	1.12	$	1.02
Weighted average common shares outstanding for diluted operating earnings per common share	74,180,374		73,966,935		75,296,029		74,073,655		75,230,455


•	Net interest income on a fully tax equivalent basis increased $3.3 million (+2.6%) to $129.8 million in the second quarter of 2016 compared to the prior quarter due to higher average loan balances and higher yields earned on loans.


•	Our net interest margin on a fully tax equivalent basis, excluding accretion on loans acquired in the Taylor Capital merger, increased two basis points to 3.57% compared to 3.55% last quarter.


•	Our core non-interest income increased 11.6% to $91.3 million compared to $81.7 million in the prior quarter primarily due to an increase in mortgage banking revenue. The increase in mortgage banking revenue was driven by higher

origination fees as a result of higher origination volumes in the second quarter of 2016 and higher gains on sale margins. The increase in mortgage banking revenue was partially offset by lower lease financing revenue, which decreased due to lower fees from the sale of third-party equipment maintenance contracts.

•

Our core non-interest expense increased $12.2 million (+9.2%) compared to the prior quarter primarily due to an increase in salaries and employee benefits expense, which increased due to higher mortgage commission expense resulting from higher mortgage origination volumes, annual pay increases effective in the beginning of the second quarter and an increase in bonus expense based on company performance through June 2016.

Growth in Loan Balances During the Quarter

Loan balances, excluding purchased credit-impaired loans, increased $240.2 million (+2.4%, or +9.8% annualized) during the second quarter of 2016.

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



					Change from 3/31/2016 to 6/30/2016
(Dollars in thousands)	6/30/2016		3/31/2016		Amount			Percent
Commercial-related credits:
Commercial loans	$	3,561,500	$	3,509,604	$	51,896		+1.5	%
Commercial loans collateralized by assignment of lease payments (lease loans)	1,794,465		1,774,104		20,361			+1.1
Commercial real estate	2,827,720		2,831,814		(4,094		)	-0.1
Construction real estate	357,807		310,278		47,529			+15.3
Total commercial-related credits	8,541,492		8,425,800		115,692			+1.4
Other loans:
Residential real estate	753,707		677,791		75,916			+11.2
Indirect vehicle	491,480		432,915		58,565			+13.5
Home equity	198,622		207,079		(8,457		)	-4.1
Consumer loans	75,775		77,318		(1,543		)	-2.0
Total other loans	1,519,584		1,395,103		124,481			+8.9
Total loans, excluding purchased credit-impaired	10,061,076		9,820,903		240,173			+2.4
Purchased credit-impaired	136,811		140,445		(3,634		)	-2.6
Total loans	$	10,197,887	$	9,961,348	$	236,539		+2.4	%

Growth in Non-Interest Bearing Deposit Balances During the Quarter

Non-interest bearing deposits increased $108.0 million (+2.3% or +9.3% annualized) during the second quarter of 2016, and represented 42% of total deposits at June 30, 2016. Total low cost deposits declined during the quarter due to the reduction in balances of certain large accounts, but continued to represent 84% of total deposits at June 30, 2016.

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



					Change from 3/31/2016 to 6/30/2016
(Dollars in thousands)	6/30/2016		3/31/2016		Amount			Percent
Low cost deposits:
Non-interest bearing deposits	$	4,775,364	$	4,667,410	$	107,954		+2.3	%
Money market and NOW	3,771,111		4,048,054		(276,943		)	-6.8
Savings	1,021,845		991,300		30,545			+3.1
Total low cost deposits	9,568,320		9,706,764		(138,444		)	-1.4
Certificates of deposit:
Certificates of deposit	1,220,562		1,255,457		(34,895		)	-2.8
Brokered certificates of deposit	647,214		571,605		75,609			+13.2
Total certificates of deposit	1,867,776		1,827,062		40,714			+2.2
Total deposits	$	11,436,096	$	11,533,826	$	(97,730	)	-0.8	%

Positive Credit Quality Metrics

Our credit quality metrics improved during the second quarter of 2016 as follows:


•	Provision for credit losses decreased to $2.8 million in the second quarter of 2016 compared to $7.6 million in the prior quarter primarily due to a decrease in non-performing loans and a reduction in specific reserves.


•	Non-performing loans and non-performing assets decreased by $20.0 million and $20.4 million, respectively, from March 31, 2016 primarily due to loans that paid off during the quarter.


•	Potential problem loans decreased by $10.4 million from March 31, 2016 primarily due to loans that paid off during the quarter and loans that were upgraded from potential problem loan status to pass status.


•	Our net loan charge-offs during the second quarter of 2016 were $2.2 million, or 0.09% of loans (annualized), compared to net loan charge-offs of $1.3 million, or 0.06% of loans (annualized), in the first quarter of 2016.


•	Our allowance for loan and lease losses to total loans ratio was 1.33% at June 30, 2016 compared to 1.35% at March 31, 2016. The decrease in the allowance for loan and lease losses to total loans ratio was primarily due to lower specific reserves.

American Chartered Bancorp, Inc. ("ACB") Pending Merger Update

The Office of the Comptroller of the Currency has approved the merger of American Chartered Bank, the bank subsidiary of American Chartered Bancorp, Inc., with MB Financial, Inc.’s bank subsidiary, MB Financial Bank, N.A. The Board of Governors of the Federal Reserve System has also approved the merger of American Chartered Bancorp, Inc. with MB Financial, Inc. The transaction, which remains subject to the satisfaction of other customary conditions to closing, is expected to be completed in the third quarter of 2016.

RESULTS OF OPERATIONS

Second Quarter Results

Net Interest Income

The following table presents net interest income and net interest margin on fully tax equivalent basis (dollars in thousands):



							Change from 1Q16 to 2Q16					Change from 2Q15 to 2Q16		Six Months Ended						Change from 2015 to 2016
														June 30,
	2Q16			1Q16					2Q15					2016			2015
Net interest income - fully tax equivalent	$	129,810		$	126,499		+2.6	%	$	121,149		+7.1	%	$	256,309		$	240,622		+6.5	%
Net interest income - fully tax equivalent, excluding acquisition accounting discount accretion on Taylor Capital loans	$	122,108		$	119,146		+2.5	%	$	113,197		+7.9	%	$	241,254		$	224,094		+7.7	%
Net interest margin - fully tax equivalent	3.81		%	3.79		%	+0.02	%	3.84		%	-0.03	%	3.80		%	3.89		%	-0.09	%
Net interest margin - fully tax equivalent, excluding acquisition accounting discount accretion on Taylor Capital loans	3.57		%	3.55		%	+0.02	%	3.57		%	0.00	%	3.56		%	3.59		%	-0.03	%

Net interest income on a fully tax equivalent basis increased in the second quarter of 2016 compared to the prior quarter due to higher average loan balances and higher yields earned on loans. Net interest income on a fully tax equivalent basis increased in the second quarter of 2016 compared to the second quarter of 2015 primarily due to an increase in average loans, partially offset by an increase in average borrowings and an increase in the average cost of deposits as a result of the increase in interest rates.

Our net interest margin on a fully tax equivalent basis, excluding accretion on loans acquired in the Taylor Capital merger, was stable at 3.57% in the second quarter of 2016 compared to 3.55% last quarter and 3.57% in the same quarter of last year.

Net interest income on a fully tax equivalent basis increased in the six months ended June 30, 2016 compared to the six months ended June 30, 2015 primarily due to an increase in average loans, partially offset by an increase in average borrowings and an increase in the cost of deposits as well as lower average yields earned on interest earning assets.

Our net interest margin on a fully tax equivalent basis, excluding accretion on loans acquired in the Taylor Capital merger, decreased slightly to 3.56% in the six months ended June 30, 2016 compared to 3.59% in the six months ended June 30, 2015.

See the supplemental net interest margin tables in the "Net Interest Margin" section for further detail. Reconciliations of net interest income and net interest margin to net interest income and net interest margin on a fully tax equivalent basis and to net interest income and net interest margin on a fully tax equivalent basis, excluding acquisition accounting discount accretion on Taylor Capital loans are also set forth in the tables in the "Net Interest Margin" section.

Non-interest Income

The following table presents non-interest income (in thousands):



																Six Months Ended
																June 30,
	2Q16			1Q16			4Q15			3Q15			2Q15			2016			2015
Core non-interest income:
Key fee initiatives:
Lease financing revenues, net	$	15,708		$	19,046		$	15,937		$	20,000		$	15,564		$	34,754		$	40,644
Mortgage banking revenue	39,615			27,482			26,542			30,692			35,648			67,097			60,192
Commercial deposit and treasury management fees	11,548			11,878			11,711			11,472			11,062			23,426			22,100
Trust and asset management fees	8,236			7,950			6,077			6,002			5,752			16,186			11,466
Card fees	4,045			3,525			3,651			3,335			4,409			7,570			8,336
Capital markets and international banking service fees	2,771			3,227			2,355			2,357			1,508			5,998			3,436
Total key fee initiatives	81,923			73,108			66,273			73,858			73,943			155,031			146,174
Consumer and other deposit service fees	3,161			3,025			3,440			3,499			3,260			6,186			6,343
Brokerage fees	1,315			1,158			1,252			1,281			1,543			2,473			3,221
Loan service fees	1,961			1,752			1,890			1,531			1,353			3,713			2,838
Increase in cash surrender value of life insurance	850			854			864			852			836			1,704			1,675
Other operating income	2,043			1,836			1,344			1,730			2,098			3,879			4,200
Total core non-interest income	91,253			81,733			75,063			82,751			83,033			172,986			164,451
Non-core non-interest income:
Net gain (loss) on investment securities	269			—			(3		)	371			(84		)	269			(544		)
Net (loss) gain on sale of other assets	(2		)	(48		)	—			1			(7		)	(50		)	(3		)
Increase (decrease) in market value of assets held in trust for deferred compensation ⁽¹⁾	480			8			565			(872		)	7			488			313
Total non-core non-interest income	747			(40		)	562			(500		)	(84		)	707			(234		)
Total non-interest income	$	92,000		$	81,693		$	75,625		$	82,251		$	82,949		$	173,693		$	164,217


⁽¹⁾	Resides in other operating income in the consolidated statements of operations.

Core non-interest income for the second quarter of 2016 increased by $9.5 million, or 11.6%, to $91.3 million from the first quarter of 2016.


•	Mortgage banking revenue increased due to higher origination volumes as a result of the favorable interest rate environment and higher gains on sale margins.


•	Card fees increased primarily due to higher prepaid card revenue.


•	Lease financing revenues decreased due to a decrease in fees from the sale of third-party equipment maintenance contracts.


•	Capital markets and international banking services fees decreased due to lower swap fees partially offset by higher syndication and M&A advisory fees.

Core non-interest income for the six months ended June 30, 2016 increased by $8.5 million, or 5.2%, to $173.0 million from the six months ended June 30, 2015.


•	Mortgage banking revenue increased due to higher mortgage servicing fees partly offset by lower mortgage origination fees.


•	Trust and asset management fees increased due to the addition of new customers as well as the acquisitions of MSA Holdings, LLC ("MSA") and the Illinois court-appointed guardianship and special needs trust business.


•	Capital markets and international banking services fees increased due to higher swap, syndication and M&A advisory fees partly offset by lower commercial real estate advisory fees.


•	Commercial deposit and treasury management fees increased due to new customer activity.


•	Loan service fees increased due to higher unused line and letter of credit fees.


•	Lease financing revenues decreased due to lower residual gains and fees from the sale of third-party equipment maintenance contracts.


•	Card fees decreased due to the impact of becoming subject to the Durbin amendment of the Dodd-Frank Act starting on July 1, 2015, which was partly offset by an increase in prepaid card revenue and credit card fees. We estimate the quarterly impact of the Durbin amendment was a loss of $1.2 million of revenue.

Non-interest Expense

The following table presents non-interest expense (in thousands):



																Six Months Ended
																June 30,
	2Q16			1Q16			4Q15			3Q15			2Q15			2016			2015
Core non-interest expense: ⁽¹⁾
Salaries and employee benefits expense:
Salaries and commissions	$	61,105		$	58,282		$	56,741		$	59,358		$	57,459		$	119,387		$	114,858
Bonus and stock-based compensation	13,971			9,532			11,436			11,316			11,264			23,503			21,356
Health and accident insurance	6,079			5,599			4,646			5,640			5,296			11,678			10,789
Other salaries and benefits ⁽²⁾	13,045			12,089			11,533			12,446			12,119			25,134			23,582
Total salaries and employee benefits expense	94,200			85,502			84,356			88,760			86,138			179,702			170,585
Occupancy and equipment expense	13,407			13,260			12,935			12,456			12,081			26,667			24,844
Computer services and telecommunication expense	9,266			8,750			8,548			8,558			8,407			18,016			17,041
Advertising and marketing expense	2,923			2,855			2,549			2,578			2,497			5,778			4,943
Professional and legal expense	3,220			2,492			2,715			1,496			1,902			5,712			4,382
Other intangible amortization expense	1,618			1,626			1,546			1,542			1,509			3,244			3,027
Net (gain) loss recognized on other real estate owned (A)	(297		)	(637		)	(256		)	520			662			(934		)	1,550
Net loss (gain) recognized on other real estate owned related to FDIC transactions (A)	312			154			(549		)	65			(88		)	466			(361		)
Other real estate expense, net (A)	243			137			76			(8		)	150			380			431
Other operating expenses	19,813			18,366			18,932			18,782			18,238			38,179			36,514
Total core non-interest expense	144,705			132,505			130,852			134,749			131,496			277,210			262,956
Non-core non-interest expense: ⁽¹⁾
Merger related and repositioning expenses (B)	2,566			3,287			(4,186		)	389			1,234			5,853			9,303
Branch exit and facilities impairment charges	155			—			—			—			—			155			—
Prepayment fees on interest bearing liabilities	—			—			—			—			—			—			85
Increase (decrease) in market value of assets held in trust for deferred compensation (C)	480			8			565			(872		)	7			488			313
Total non-core non-interest expense	3,201			3,295			(3,621		)	(483		)	1,241			6,496			9,701
Total non-interest expense	$	147,906		$	135,800		$	127,231		$	134,266		$	132,737		$	283,706		$	272,657


⁽¹⁾	Letters denote the corresponding line items where these non-core non-interest expense items reside in the consolidated statements of operations as follows: A – Net loss (gain) recognized on other real estate owned and other expense, B – See merger related and repositioning expenses table below, and C – Salaries and employee benefits.


⁽²⁾	Includes payroll taxes, 401(k) and profit sharing contributions, overtime and temporary help expenses.

Core non-interest expense increased by $12.2 million, or 9.2%, from the first quarter of 2016 to $144.7 million for the second quarter of 2016.


•	Salaries and employee benefits expense was up due to the following:


◦	Bonus and stock-based compensation increased due to an increase in bonus expense based on company performance through June 2016. Bonus expense for the first quarter of 2016 included a reduction in expense related to 2015 bonus payments.


◦	Salaries and commissions expense increased due to higher mortgage commission expense resulting from higher mortgage origination volumes and annual pay increases effective in the beginning of the second quarter.


•	Other operating expenses increased due to higher filing and other loan expense.


•	Professional and legal expense increased due to an increase in litigation fees and organizational legal fees related to the setup of a Canadian entity as well as an increase in consulting expense.


•	Computer services and telecommunication expense increased due to higher processing fees and increased spending in infrastructure.

Core non-interest expense increased by $14.3 million, or 5.4%, from the six months ended June 30, 2015 to $277.2 million for the six months ended June 30, 2016.


•	Salaries and employee benefits expense was up due to the following:


◦	Salaries and commissions expense increased due to annual pay increases effective in the beginning of the second quarter as well as new hires.


◦	Bonus and stock-based compensation increased due to an increase in bonus expense based on company performance through June 2016.


◦	Other benefits expense increased due to increased temporary help in our IT and mortgage areas as well as higher 401(k) match and profit sharing contribution expense.


•	Occupancy and equipment expense increased due to higher depreciation expense and rental operating expenses as a result of the acquisition of MSA, new offices opened at our mortgage banking segment and an office relocation at our leasing segment.


•	Other operating expenses increased due to higher FDIC premiums (as a result of MB Financial Bank, N.A. (the "Bank") exceeding $10 billion in assets) and card expenses (higher rewards and product development expense).


•	Professional and legal expense increased due to an increase in litigation and consulting fees.


•	Computer services and telecommunication expense increased due to higher processing costs as a result of increased customer activity and investments in systems.


•	Advertising and marketing expense increased due to increased advertising.

The following table presents the detail of the merger related and repositioning expenses (in thousands):



												Six Months Ended
												June 30,
	2Q16		1Q16		4Q15			3Q15		2Q15		2016		2015
Merger related and repositioning expenses:
Salaries and employee benefits	$	324	$	81	$	(212	)	$	3	$	—	$	405	$	33
Occupancy and equipment expense	8		—		—			2		96		8		273
Computer services and telecommunication expense	511		305		(103		)	9		130		816		400
Advertising and marketing expense	41		23		2			—		—		64		—
Professional and legal expense	101		97		1,454			305		511		198		701
Branch exit and facilities impairment charges	—		44		616			70		438		44		7,829
Contingent consideration expense - Celtic acquisition ⁽¹⁾	—		2,703		—			—		—		2,703		—
Other operating expenses	1,581		34		(5,943		)	—		59		1,615		67
Total merger related and repositioning expenses	$	2,566	$	3,287	$	(4,186	)	$	389	$	1,234	$	5,853	$	9,303


⁽¹⁾	Resides in other operating expenses in the consolidated statements of operations.

In the second quarter of 2016, merger related and repositioning expenses included a $1.5 million contract termination fee related to the anticipated ACB integration (reflected in other operating expenses). In the first quarter of 2016, merger related and repositioning expenses included an increase in our contingent consideration accrual for our acquisition of Celtic Leasing Corp. as a result of stronger lease residual performance than previously estimated. In the fourth quarter of 2015, merger related and repositioning expenses were impacted by the reversal of an accrual for a potential contingent loss we assumed in connection with the Taylor Capital merger (reflected in other operating expenses).

Operating Segments

The Company's operations consist of three reportable operating segments: Banking, Leasing and Mortgage Banking. Our Banking Segment generates revenues primarily from its lending, deposit gathering and fee business activities. Our Leasing Segment generates revenues through lease originations and related services offered through the Company's leasing subsidiaries: LaSalle Systems Leasing, Inc., Celtic Leasing Corp. and MB Equipment Finance, LLC. Our Mortgage Banking Segment originates residential mortgage loans for sale to investors through its retail and third party origination channels as well as residential mortgage loans held in our loan portfolio. The Mortgage Banking Segment also services residential mortgage loans owned by investors and the Company.

The following tables summarize financial information, adjusted for funds transfer pricing and internal allocations of certain expenses, for the reportable segments for the periods presented (in thousands):



	Banking		Leasing			Mortgage Banking		Non-core Items			Consolidated
Three months ended June 30, 2016
Net interest income	$	112,152	$	2,411		$	8,039	$	—		$	122,602
Provision for credit losses	2,995		(356		)	190		—			2,829
Net interest income after provision for credit losses	109,157		2,767			7,849		—			119,773
Non-interest income:
Lease financing revenues, net	789		14,919			—		—			15,708
Mortgage origination fees	—		—			31,417		—			31,417
Mortgage servicing fees	—		—			8,198		—			8,198
Other non-interest income	35,132		798			—		747			36,677
Total non-interest income	35,921		15,717			39,615		747			92,000
Non-interest expense:
Salaries and employee benefits expense:
Salaries and commissions	36,552		5,317			19,236		—			61,105
Bonus and stock-based compensation	11,676		1,028			1,267		—			13,971
Health and accident insurance	3,816		376			1,887		—			6,079
Other salaries and benefits ⁽¹⁾	8,170		886			3,989		804			13,849
Total salaries and employee benefits expense	60,214		7,607			26,379		804			95,004
Occupancy and equipment expense	10,561		947			1,899		8			13,415
Computer services and telecommunication expense	6,945		431			1,890		511			9,777
Professional and legal expense	2,385		414			421		101			3,321
Other operating expenses	16,587		1,716			6,309		1,777			26,389
Total non-interest expense	96,692		11,115			36,898		3,201			147,906
Income before income taxes	48,386		7,369			10,566		(2,454		)	63,867
Income tax expense	14,353		2,879			4,226		(1,003		)	20,455
Net income	$	34,033	$	4,490		$	6,340	$	(1,451	)	$	43,412


⁽¹⁾	Includes payroll taxes, 401(k) and profit sharing contributions, overtime and temporary help expenses.



	Banking		Leasing		Mortgage Banking			Non-core Items			Consolidated
Three months ended March 31, 2016
Net interest income	$	109,608	$	2,423	$	7,273		$	—		$	119,304
Provision for credit losses	7,001		437		125			—			7,563
Net interest income after provision for credit losses	102,607		1,986		7,148			—			111,741
Non-interest income:
Lease financing revenues, net	679		18,367		—			—			19,046
Mortgage origination fees	—		—		16,894			—			16,894
Mortgage servicing fees	—		—		10,588			—			10,588
Other non-interest income	34,380		828		(3		)	(40		)	35,165
Total non-interest income	35,059		19,195		27,479			(40		)	81,693
Non-interest expense:
Salaries and employee benefits expense:
Salaries and commissions	35,154		6,715		16,413			—			58,282
Bonus and stock-based compensation	7,245		925		1,362			—			9,532
Health and accident insurance	3,461		335		1,803			—			5,599
Other salaries and benefits ⁽¹⁾	7,542		1,108		3,439			89			12,178
Total salaries and employee benefits expense	53,402		9,083		23,017			89			85,591
Occupancy and equipment expense	10,430		895		1,935			—			13,260
Computer services and telecommunication expense	6,446		363		1,941			305			9,055
Professional and legal expense	1,486		409		597			97			2,589
Other operating expenses	15,570		1,447		5,484			2,804			25,305
Total non-interest expense	87,334		12,197		32,974			3,295			135,800
Income before income taxes	50,332		8,984		1,653			(3,335		)	57,634
Income tax expense	14,927		3,509		661			(577		)	18,520
Net income	$	35,405	$	5,475	$	992		$	(2,758	)	$	39,114


⁽¹⁾	Includes payroll taxes, 401(k) and profit sharing contributions, overtime and temporary help expenses.

Net income from our Banking Segment for the second quarter of 2016 decreased compared to the prior quarter. This decrease in net income was primarily due to higher salaries and employee benefits expense due to higher bonus expense and annual pay increases partly offset by an increase in net interest income driven by loan growth and higher loan yields and a decrease in provision for credit losses expense.

Net income from our Leasing Segment for the second quarter of 2016 decreased compared to the prior quarter. This decrease in net income was primarily due to a decrease in lease financing revenues, as a result of a decrease in fees from the sale of third-party equipment maintenance contracts, partly offset by a decrease in commission expense and provision for credit losses expense.

Net income from our Mortgage Banking Segment for the second quarter of 2016 increased compared to the prior quarter. This increase in net income was due to an increase in mortgage origination fees and net interest income, which was partly offset by higher mortgage commission expense and other operating expenses. The increase in mortgage origination fees was driven by higher origination volumes in the second quarter of 2016, as a result of the favorable interest rate environment, and higher gains on sale margins.



	Banking		Leasing		Mortgage Banking			Non-core Items			Consolidated
Six months ended June 30, 2016
Net interest income	$	221,760	$	4,834	$	15,312		$	—		$	241,906
Provision for credit losses	9,996		81		315			—			10,392
Net interest income after provision for credit losses	211,764		4,753		14,997			—			231,514
Non-interest income:
Lease financing, net	1,468		33,286		—			—			34,754
Mortgage origination fees	—		—		48,311			—			48,311
Mortgage servicing fees	—		—		18,786			—			18,786
Other non-interest income	69,512		1,626		(3		)	707			71,842
Total non-interest income	70,980		34,912		67,094			707			173,693
Non-interest expense:
Salaries and employee benefits expense:
Salaries and commissions	71,706		12,032		35,649			—			119,387
Bonus and stock-based compensation	18,921		1,953		2,629			—			23,503
Health and accident insurance	7,277		711		3,690			—			11,678
Other salaries and benefits ⁽¹⁾	15,712		1,994		7,428			893			26,027
Total salaries and employee benefits expense	113,616		16,690		49,396			893			180,595
Occupancy and equipment expense	20,991		1,842		3,834			8			26,675
Computer services and telecommunication expense	13,391		794		3,831			816			18,832
Professional and legal expense	3,871		823		1,018			198			5,910
Other operating expenses	32,157		3,163		11,793			4,581			51,694
Total non-interest expense	184,026		23,312		69,872			6,496			283,706
Income before income taxes	98,718		16,353		12,219			(5,789		)	121,501
Income tax expense	29,280		6,388		4,887			(1,580		)	38,975
Net income	$	69,438	$	9,965	$	7,332		$	(4,209	)	$	82,526


⁽¹⁾	Includes payroll taxes, 401(k) and profit sharing contributions, overtime and temporary help expenses.



	Banking		Leasing		Mortgage Banking		Non-core Items			Consolidated
Six months ended June 30, 2015
Net interest income	$	208,478	$	5,930	$	13,460	$	—		$	227,868
Provision for credit losses	7,818		1,356		96		—			9,270
Net interest income after provision for credit losses	200,660		4,574		13,364		—			218,598
Non-interest income:
Lease financing, net	933		39,711		—		—			40,644
Mortgage origination fees	—		—		53,758		—			53,758
Mortgage servicing fees	—		—		6,434		—			6,434
Other non-interest income	61,926		1,685		4		(234		)	63,381
Total non-interest income	62,859		41,396		60,196		(234		)	164,217
Non-interest expense:
Salaries and employee benefits expense:
Salaries and commissions	67,647		13,615		33,596		—			114,858
Bonus and stock-based compensation	17,367		1,800		2,189		—			21,356
Health and accident insurance	7,043		644		3,102		—			10,789
Other salaries and benefits ⁽¹⁾	14,480		1,716		7,386		346			23,928
Total salaries and employee benefits expense	106,537		17,775		46,273		346			170,931
Occupancy and equipment expense	20,187		1,656		3,001		273			25,117
Computer services and telecommunication expense	12,604		569		3,868		400			17,441
Professional and legal expense	3,223		554		605		701			5,083
Other operating expenses	30,720		2,930		12,454		7,981			54,085
Total non-interest expense	173,271		23,484		66,201		9,701			272,657
Income before income taxes	90,248		22,486		7,359		(9,935		)	110,158
Income tax expense	27,274		8,820		2,944		(3,943		)	35,095
Net income	$	62,974	$	13,666	$	4,415	$	(5,992	)	$	75,063


⁽¹⁾	Includes payroll taxes, 401(k) and profit sharing contributions, overtime and temporary help expenses.

Net income from our Banking Segment for the six months ended June 30, 2016 increased compared to the six months ended June 30, 2015. This increase in net income was primarily due to an increase in net interest income driven by loan growth and an increase in other non-interest income partly offset by higher salaries and employee benefits expense due to annual pay increases, new hires and bonus expense as well as an increase in provision for credit losses expense.

Net income from our Leasing Segment for the six months ended June 30, 2016 decreased compared to the six months ended June 30, 2015. This decrease in net income was primarily due to a decrease in lease financing revenues, as a result of a decrease in residual gains and fees from the sale of third-party equipment maintenance contracts, partly offset by a decrease in commission expense and provision for credit losses expense.

Net income from our Mortgage Banking Segment for the six months ended June 30, 2016 increased compared to the six months ended June 30, 2015. This increase in net income was due to an increase in mortgage servicing fees and net interest income, which was partly offset by lower mortgage origination fees and higher salaries expense due to annual pay increases and new hires.

The following table presents additional information regarding the Mortgage Banking Segment (dollars in thousands):



	2Q16			1Q16			4Q15			3Q15			2Q15
Origination volume:	$	1,709,044		$	1,328,804		$	1,437,057		$	1,880,960		$	2,010,175
Refinance	42		%	49		%	42		%	34		%	43		%
Purchase	58			51			58			66			57
Origination volume by channel:
Retail	23		%	19		%	18		%	18		%	18		%
Third party	77			81			82			82			82
Mortgage servicing book (unpaid principal balance of loans serviced for others) at period end ⁽¹⁾	$	17,739,626		$	16,911,325		$	16,218,613		$	15,582,911		$	23,588,345
Mortgage servicing rights, recorded at fair value, at period end	134,969			145,800			168,162			148,097			261,034
Notional value of rate lock commitments, at period end	981,000			823,000			622,906			800,162			992,025

⁽¹⁾ 3Q15 does not include the unpaid principal balance of serviced loans sold in July 2015 that continued to be sub-serviced through October 2015.

LOAN PORTFOLIO

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



	6/30/2016					3/31/2016					12/31/2015					9/30/2015					6/30/2015
	Amount			% of Total		Amount			% of Total		Amount			% of Total		Amount			% of Total		Amount			% of Total
Commercial-related credits:
Commercial loans	$	3,561,500		35	%	$	3,509,604		36	%	$	3,616,286		37	%	$	3,440,632		37	%	$	3,354,889		37	%
Commercial loans collateralized by assignment of lease payments (lease loans)	1,794,465			18		1,774,104			18		1,779,072			18		1,693,540			18		1,690,866			18
Commercial real estate	2,827,720			28		2,831,814			28		2,695,676			27		2,580,009			27		2,539,991			28
Construction real estate	357,807			3		310,278			3		252,060			3		255,620			3		189,599			2
Total commercial-related credits	8,541,492			84		8,425,800			85		8,343,094			85		7,969,801			85		7,775,345			85
Other loans:
Residential real estate	753,707			7		677,791			7		628,169			6		607,171			6		533,118			6
Indirect vehicle	491,480			5		432,915			4		384,095			4		345,731			4		303,777			3
Home equity	198,622			2		207,079			2		216,573			2		223,173			2		230,478			3
Consumer loans	75,775			1		77,318			1		80,661			1		87,612			1		86,463			1
Total other loans	1,519,584			15		1,395,103			14		1,309,498			13		1,263,687			13		1,153,836			13
Total loans, excluding purchased credit-impaired loans	10,061,076			99		9,820,903			99		9,652,592			98		9,233,488			98		8,929,181			98
Purchased credit-impaired loans	136,811			1		140,445			1		141,406			2		155,693			2		164,775			2
Total loans	$	10,197,887		100	%	$	9,961,348		100	%	$	9,793,998		100	%	$	9,389,181		100	%	$	9,093,956		100	%
Change over prior quarter	+2.4		%			+1.7		%			+4.3		%			+3.2		%			+1.9		%

Our loan balances, excluding purchased credit-impaired loans, increased $240.2 million (+2.4%, or +9.8% annualized) during the second quarter of 2016. Residential real estate loan balances have increased over the past year as a result of retaining adjustable rate mortgages originated by our Mortgage Banking Segment in our loan portfolio. Construction loans have increased over the past year due to draws on new and existing credit lines primarily in the areas of apartments, healthcare and office. Indirect vehicle loans have increased as a result of growth in boat, motorcycle and other recreational vehicle loans.

The following table sets forth the composition of the loan portfolio (excluding loans held for sale) based on quarterly average balances for the periods indicated (dollars in thousands):



	2Q16					1Q16					4Q15					3Q15					2Q15
	Amount			% of Total		Amount			% of Total		Amount			% of Total		Amount			% of Total		Amount			% of Total
Commercial-related credits:
Commercial loans	$	3,522,641		35	%	$	3,531,441		36	%	$	3,492,161		37	%	$	3,372,279		37	%	$	3,309,519		37	%
Commercial loans collateralized by assignment of lease payments (lease loans)	1,777,763			18		1,754,558			18		1,708,404			18		1,674,939			18		1,634,583			18
Commercial real estate	2,821,516			28		2,734,148			28		2,627,004			28		2,568,539			28		2,522,473			28
Construction real estate	351,079			3		276,797			3		274,188			2		210,506			2		191,935			2
Total commercial-related credits	8,472,999			84		8,296,944			85		8,101,757			85		7,826,263			85		7,658,510			85
Other loans:
Residential real estate	710,384			7		640,231			7		612,275			6		566,115			6		512,766			6
Indirect vehicle	462,053			5		404,473			4		365,744			4		325,323			4		286,107			3
Home equity	202,228			2		210,678			2		219,440			2		226,365			2		233,867			3
Consumer loans	78,108			1		80,569			1		83,869			1		85,044			1		76,189			1
Total other loans	1,452,773			15		1,335,951			14		1,281,328			13		1,202,847			13		1,108,929			13
Total loans, excluding purchased credit-impaired loans	9,925,772			99		9,632,895			99		9,383,085			98		9,029,110			98		8,767,439			98
Purchased credit-impaired loans	136,415			1		139,451			1		154,562			2		156,309			2		202,374			2
Total loans	$	10,062,187		100	%	$	9,772,346		100	%	$	9,537,647		100	%	$	9,185,419		100	%	$	8,969,813		100	%
Change over prior quarter	+3.0		%			+2.5		%			+3.8		%			+2.4		%			+0.9		%

Our average loan balances, excluding purchased credit-impaired loans, increased $292.9 million (+3.0%, or +12.2% annualized) during the second quarter of 2016.

ASSET QUALITY

The following table presents a summary of criticized assets (excluding loans held for sale) as of the dates indicated (dollars in thousands):



	6/30/2016			3/31/2016			12/31/2015			9/30/2015			6/30/2015
Non-performing loans:
Non-accrual loans ⁽¹⁾	$	67,544		$	93,602		$	98,065		$	92,302		$	91,943
Loans 90 days or more past due, still accruing interest	7,190			1,112			6,596			4,275			6,112
Total non-performing loans	74,734			94,714			104,661			96,577			98,055
Other real estate owned	27,663			28,309			31,553			29,587			28,517
Repossessed assets	459			187			81			216			78
Total non-performing assets	$	102,856		$	123,210		$	136,295		$	126,380		$	126,650
Potential problem loans ⁽²⁾	$	99,782		$	110,193		$	139,941		$	122,966		$	116,443
Purchased credit-impaired loans	$	136,811		$	140,445		$	141,406		$	155,693		$	164,775
Total non-performing, potential problem and purchased credit-impaired loans	$	311,327		$	345,352		$	386,008		$	375,236		$	379,273

Total allowance for loan and lease losses	$	135,614		$	134,493		$	128,140		$	124,626		$	120,070
Accruing restructured loans ⁽³⁾	26,715			27,269			26,991			20,120			16,875
Total non-performing loans to total loans	0.73		%	0.95		%	1.07		%	1.03		%	1.08		%
Total non-performing assets to total assets	0.64			0.79			0.87			0.85			0.84
Allowance for loan and lease losses to non-performing loans	181.46			142.00			122.43			129.04			122.45


⁽¹⁾	Includes $29.3 million, $24.0 million, $23.6 million, $21.4 million and $24.5 million of restructured loans on non-accrual status at June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015 and June 30, 2015, respectively.


⁽²⁾	We define potential problem loans as loans rated substandard that do not meet the definition of a non-performing loan. Potential problem loans carry a higher probability of default and require additional attention by management.


⁽³⁾	Accruing restructured loans consist of loans that have been modified and are performing in accordance with those modified terms as of the dates indicated.

The following table presents data related to non-performing loans by category (excluding loans held for sale and purchased credit-impaired loans that were acquired as part of our FDIC-assisted transactions and the Taylor Capital merger) as of the dates indicated (in thousands):



	6/30/2016		3/31/2016		12/31/2015		9/30/2015		6/30/2015
Commercial and lease	$	29,509	$	28,590	$	37,076	$	34,465	$	31,053
Commercial real estate	7,163		27,786		29,073		25,437		32,358
Construction real estate	—		—		—		—		337
Consumer related	38,062		38,338		38,512		36,675		34,307
Total non-performing loans	$	74,734	$	94,714	$	104,661	$	96,577	$	98,055

Non-performing commercial real estate loans decreased at June 30, 2016 compared to March 31, 2016 as a result of loans paid off during the quarter.

The following table represents a summary of other real estate owned (excluding other real estate owned acquired as part of our FDIC-assisted transactions) as of the dates indicated (in thousands):



	6/30/2016			3/31/2016			12/31/2015			9/30/2015			6/30/2015
Balance at the beginning of quarter	$	28,309		$	31,553		$	29,587		$	28,517		$	21,839
Transfers in at fair value less estimated costs to sell	1,367			1,270			5,964			2,402			8,595
Fair value adjustments	70			45			(721		)	(565		)	(920		)
Net gains on sales of other real estate owned	227			592			977			45			258
Cash received upon disposition	(2,310		)	(5,151		)	(4,254		)	(812		)	(1,255		)
Balance at the end of quarter	$	27,663		$	28,309		$	31,553		$	29,587		$	28,517

Below is a reconciliation of the activity in our allowance for credit and loan losses for the periods indicated (dollars in thousands):



																Six Months Ended
																June 30,
	2Q16			1Q16			4Q15			3Q15			2Q15			2016			2015
Allowance for credit losses, balance at the beginning of period	$	137,732		$	131,508		$	128,038		$	124,130		$	117,189		$	131,508		$	114,057
Provision for credit losses	2,829			7,563			6,758			5,358			4,296			10,392			9,270
Charge-offs:
Commercial loans	72			713			710			1,657			57			785			626
Commercial loans collateralized by assignment of lease payments (lease loans)	2,347			574			685			1,980			100			2,921			100
Commercial real estate	1,720			352			1,251			170			108			2,072			2,142
Construction real estate	144			—			23			5			3			144			6
Residential real estate	476			368			261			292			318			844			897
Home equity	619			238			407			358			276			857			720
Indirect vehicle	651			931			898			581			627			1,582			1,501
Consumer loans	395			412			550			467			500			807			924
Total charge-offs	6,424			3,588			4,785			5,510			1,989			10,012			6,916
Recoveries:
Commercial loans	952			380			235			456			816			1,332			1,058
Commercial loans collateralized by assignment of lease payments (lease loans)	467			50			12			11			340			517			1,089
Commercial real estate	1,843			594			385			2,402			2,561			2,437			3,936
Construction real estate	17			27			19			216			35			44			37
Residential real estate	82			24			98			337			8			106			80
Home equity	193			318			132			186			160			511			261
Indirect vehicle	501			463			499			334			545			964			1,020
Consumer loans	141			393			117			118			169			534			238
Total recoveries	4,196			2,249			1,497			4,060			4,634			6,445			7,719
Total net charge-offs (recoveries)	2,228			1,339			3,288			1,450			(2,645		)	3,567			(803		)
Allowance for credit losses	138,333			137,732			131,508			128,038			124,130			138,333			124,130
Allowance for unfunded credit commitments	(2,719		)	(3,239		)	(3,368		)	(3,412		)	(4,060		)	(2,719		)	(4,060		)
Allowance for loan and lease losses	$	135,614		$	134,493		$	128,140		$	124,626		$	120,070		$	135,614		$	120,070
Total loans, excluding loans held for sale	$	10,197,887		$	9,961,348		$	9,793,998		$	9,389,181		$	9,093,956		$	10,197,887		$	9,093,956
Average loans, excluding loans held for sale	10,062,187			9,772,346			9,537,647			9,185,419			8,969,813			9,917,267			8,929,474
Ratio of allowance for loan and lease losses to total loans, excluding loans held for sale	1.33		%	1.35		%	1.31		%	1.33		%	1.32		%	1.33		%	1.32		%
Net loan charge-offs (recoveries) to average loans, excluding loans held for sale (annualized)	0.09			0.06			0.14			0.06			(0.12		)	0.07			(0.02		)

The following table presents the three elements of the Company's allowance for loan and lease losses as of the dates indicated (in thousands):



	6/30/2016		3/31/2016		12/31/2015		9/30/2015		6/30/2015
Commercial related loans:
General reserve	$	108,972	$	98,001	$	94,164	$	93,903	$	89,642
Specific reserve	12,205		20,995		16,173		13,683		11,303
Consumer related reserve	14,437		15,497		17,803		17,040		19,125
Total allowance for loan and lease losses	$	135,614	$	134,493	$	128,140	$	124,626	$	120,070

Purchased loans acquired in a business combination are recorded at estimated fair value on their purchase date without a carryover of the related allowance for loan and lease losses. These acquired loans are segregated into three types: pass rated loans with no discount attributable to credit quality, non-impaired loans with a discount attributable at least in part to credit quality and impaired loans with evidence of significant credit deterioration.


•	Pass rated loans (typically performing loans) are accounted for in accordance with ASC 310-20 "Nonrefundable Fees and Other Costs" as these loans do not have evidence of credit deterioration since origination.


•	Non-impaired loans (typically performing substandard loans) are accounted for in accordance with ASC 310-30 if they display at least some level of credit deterioration since origination.


•	Impaired loans (typically substandard loans on non-accrual status) are accounted for in accordance with ASC 310-30 as they display significant credit deterioration since origination.

For pass rated loans (non-purchased credit-impaired loans), the difference between the estimated fair value of the loans (computed on a loan by loan basis) and the principal outstanding is accreted over the remaining life of the loans.

In accordance with ASC 310-30, for both purchased non-impaired loans and purchased credit-impaired loans ("PCI loans"), the difference between contractually required payments at acquisition and the cash flows expected to be collected is referred to as the non-accretable difference. Further, any excess of cash flows expected at acquisition over the estimated fair value is referred to as the accretable yield and is recognized into interest income over the remaining life of the loan when there is a reasonable expectation about the amount and timing of such cash flows.

Changes in the purchase accounting discount for loans acquired in the Taylor Capital merger were as follows for the three months ended June 30, 2016 (in thousands):



	Non-Accretable Discount - PCI Loans			Accretable Discount - PCI Loans			Accretable Discount - Non-PCI Loans			Total
Balance at beginning of period	$	10,954		$	13,479		$	29,818		$	54,251
Charge-offs	(9		)	—			—			(9		)
Accretion	—			(2,312		)	(5,390		)	(7,702		)
Transfer	(1,510		)	1,510			—			—
Balance at end of period	$	9,435		$	12,677		$	24,428		$	46,540

Changes in the purchase accounting discount for loans acquired in the Taylor Capital merger were as follows for the three months ended March 31, 2016 (in thousands):



	Non-Accretable Discount - PCI Loans			Accretable Discount - PCI Loans			Accretable Discount - Non-PCI Loans			Total
Balance at beginning of period	$	14,661		$	12,298		$	34,768		$	61,727
Charge-offs	(123		)	—			—			(123		)
Accretion	—			(2,403		)	(4,950		)	(7,353		)
Transfer	(3,584		)	3,584			—			—
Balance at end of period	$	10,954		$	13,479		$	29,818		$	54,251

The $1.5 million and $3.6 million purchase accounting discount transfer from non-accretable discount on purchased credit-impaired loans to accretable discount for the three months ended June 30, 2016 and March 31, 2016, respectively, was due to better than expected cash flows on several pools of purchased credit-impaired loans.

INVESTMENT SECURITIES

The following table sets forth, by type, the fair value and amortized cost of our investment securities, excluding FHLB and FRB stock, as well as the unrealized gain, net of our investment securities available for sale as of the dates indicated (in thousands):



	6/30/2016		3/31/2016			12/31/2015			9/30/2015			6/30/2015
Securities available for sale:
Fair value
Government sponsored agencies and enterprises	$	54,457	$	64,762		$	64,611		$	65,461		$	65,485
States and political subdivisions	400,948		398,024			396,367			399,274			395,912
Mortgage-backed securities	785,367		834,559			893,656			847,426			902,017
Corporate bonds	225,525		224,530			219,628			228,251			246,468
Equity securities	11,098		10,969			10,761			10,826			10,669
Total fair value	$	1,477,395	$	1,532,844		$	1,585,023		$	1,551,238		$	1,620,551

Amortized cost
Government sponsored agencies and enterprises	$	53,674	$	63,600		$	63,805		$	64,008		$	64,211
States and political subdivisions	369,816		371,006			373,285			379,015			380,221
Mortgage-backed securities	769,109		820,825			888,325			834,791			890,334
Corporate bonds	224,730		225,657			222,784			228,711			245,506
Equity securities	10,872		10,814			10,757			10,701			10,644
Total amortized cost	$	1,428,201	$	1,491,902		$	1,558,956		$	1,517,226		$	1,590,916

Unrealized gain, net
Government sponsored agencies and enterprises	$	783	$	1,162		$	806		$	1,453		$	1,274
States and political subdivisions	31,132		27,018			23,082			20,259			15,691
Mortgage-backed securities	16,258		13,734			5,331			12,635			11,683
Corporate bonds	795		(1,127		)	(3,156		)	(460		)	962
Equity securities	226		155			4			125			25
Total unrealized gain, net	$	49,194	$	40,942		$	26,067		$	34,012		$	29,635

Securities held to maturity, at amortized cost:
States and political subdivisions	$	960,784	$	986,340		$	1,016,519		$	1,002,963		$	974,032
Mortgage-backed securities	190,631		205,570			214,291			221,889			229,595
Total amortized cost	$	1,151,415	$	1,191,910		$	1,230,810		$	1,224,852		$	1,203,627

Our investment securities, excluding FHLB and FRB stock, decreased by $95.9 million to $2.6 billion at June 30, 2016 compared to $2.7 billion at March 31, 2016 primarily due to principal paydowns on our mortgage-backed securities that were not re-invested in the portfolio.

DEPOSIT MIX

The following table shows the composition of deposits based on period end balances as of the dates indicated (dollars in thousands):



	6/30/2016					3/31/2016					12/31/2015					9/30/2015					6/30/2015
	Amount			% of Total		Amount			% of Total		Amount			% of Total		Amount			% of Total		Amount			% of Total
Low cost deposits:
Non-interest bearing deposits	$	4,775,364		42	%	$	4,667,410		40	%	$	4,627,184		40	%	$	4,434,067		39	%	$	4,378,005		40	%
Money market, NOW and interest bearing deposits	3,771,111			33		4,048,054			35		4,144,633			36		4,129,414			37		3,842,264			35
Savings	1,021,845			9		991,300			9		974,555			8		953,746			8		970,875			9
Total low cost deposits	9,568,320			84		9,706,764			84		9,746,372			84		9,517,227			84		9,191,144			84
Certificates of deposit:
Certificates of deposit	1,220,562			11		1,255,457			11		1,244,292			11		1,279,842			12		1,261,843			12
Brokered certificates of deposit	647,214			5		571,605			5		514,551			5		457,509			4		408,827			4
Total certificates of deposit	1,867,776			16		1,827,062			16		1,758,843			16		1,737,351			16		1,670,670			16
Total deposits	$	11,436,096		100	%	$	11,533,826		100	%	$	11,505,215		100	%	$	11,254,578		100	%	$	10,861,814		100	%
Change over prior quarter	-0.8		%			+0.2		%			+2.2		%			+3.6		%			-1.4		%

Non-interest bearing deposits grew by $108.0 million (+2.3%, or +9.3% annualized) during the second quarter of 2016 and comprised 42% of total deposits at quarter-end. Total low cost deposits decreased $138.4 million (-1.4%, or -5.7% annualized) to $9.6 billion at June 30, 2016 compared to March 31, 2016 but continued to represent 84% of total deposits at quarter-end. Money market, NOW and interest bearing deposits decreased due to the reduction in balances of certain large accounts.

The following table shows the composition of deposits based on quarterly average balances for the periods indicated (dollars in thousands):



	2Q16					1Q16					4Q15					3Q15					2Q15
	Amount			% of Total		Amount			% of Total		Amount			% of Total		Amount			% of Total		Amount			% of Total
Low cost deposits:
Non-interest bearing deposits	$	4,806,692		42	%	$	4,606,008		40	%	$	4,617,076		40	%	$	4,428,065		39	%	$	4,273,931		39	%
Money market, NOW and interest bearing deposits	3,836,134			33		4,109,150			36		4,214,099			37		4,119,625			36		3,940,201			36
Savings	1,006,902			9		984,019			9		959,049			8		965,060			9		972,327			9
Total low cost deposits	9,649,728			84		9,699,177			85		9,790,224			85		9,512,750			84		9,186,459			84
Certificates of deposit:
Certificates of deposit	1,237,198			11		1,237,971			11		1,245,947			11		1,304,516			12		1,302,031			12
Brokered certificates of deposit	598,702			5		534,910			4		492,839			4		427,649			4		412,517			4
Total certificates of deposit	1,835,900			16		1,772,881			15		1,738,786			15		1,732,165			16		1,714,548			16
Total deposits	$	11,485,628		100	%	$	11,472,058		100	%	$	11,529,010		100	%	$	11,244,915		100	%	$	10,901,007		100	%
Change over prior quarter	+0.1		%			-0.5		%			+2.5		%			+3.2		%			-0.8		%

CAPITAL

Tangible book value per common share was $17.48 at June 30, 2016 compared to $17.04 at March 31, 2016 and $16.36 at June 30, 2015.

Our regulatory capital ratios remain strong. The Bank was categorized as “well capitalized” at June 30, 2016 under the Prompt Corrective Action (“PCA”) provisions. The Bank would be categorized as "well capitalized" under the fully phased in rules under the Basel III regulatory capital reform.

FORWARD-LOOKING STATEMENTS

When used in this press release and in reports filed with or furnished to the Securities and Exchange Commission (the "SEC"), in other 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 the pending MB Financial-American Chartered merger might not be realized within the expected 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 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 originated loans and loans acquired from other financial institutions; (3) competitive pressures among depository institutions; (4) interest rate movements and their impact on customer behavior, net interest margin and the value of our mortgage servicing rights; (5) the possibility that our mortgage banking business may experience increased volatility in its revenues and earnings and the possibility that the profitability of our mortgage banking business could be significantly reduced if we are unable to originate and sell mortgage loans at profitable margins or if changes in interest rates negatively impact the value of our mortgage servicing rights; (6) the impact of repricing and competitors’ pricing initiatives on loan and deposit products; (7) fluctuations in real estate values; (8) the ability to adapt successfully to technological changes to meet customers’ needs and developments in the market place; (9) the possibility that security measures implemented might not be sufficient to mitigate the risk of a cyber attack or cyber theft, and that such security measures might not protect against systems failures or interruptions; (10) our ability to realize the residual values of its direct finance, leveraged and operating leases; (11) the 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 of 2010 (the “Dodd-Frank Act”) and regulations adopted thereunder, changes in capital requirements pursuant to the Dodd-Frank Act, changes in the interpretation and/or application of laws and regulations by regulatory authorities, other governmental initiatives affecting the financial services industry and changes in federal and/or state tax laws or interpretations thereof by taxing authorities; (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.

ADDITIONAL INFORMATION

In connection with the proposed merger between MB Financial and American Chartered, MB Financial filed a registration statement on Form S-4 with the SEC, which was declared effective by the SEC on February 4, 2016. The registration statement includes a proxy statement/prospectus, which was sent to the shareholders of American Chartered. Investors and shareholders of American Chartered are advised to read the proxy statement/prospectus, which was filed by MB Financial with the SEC on February 4, 2016, and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they contain, or will contain, as the case may be, important information about MB Financial, American Chartered and the proposed transaction. Copies of all documents relating to the merger filed by MB Financial can be obtained free of charge from the SEC’s website at www.sec.gov. These documents also can be obtained free of charge by accessing MB Financial’s website at www.mbfinancial.com under the tab “Investor Relations” and then under “SEC Filings.” Alternatively, these documents, when available, can be obtained free of charge from MB Financial upon written request to MB Financial, Inc., Corporate Secretary, 6111 North River Road, Rosemont, Illinois 60018 or by calling (847) 653-1992.

TABLES TO FOLLOW

MB FINANCIAL, INC. & SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited)

As of the dates indicated

(In thousands)



	6/30/2016			3/31/2016			12/31/2015			9/30/2015			6/30/2015
ASSETS
Cash and due from banks	$	303,037		$	271,732		$	307,869		$	234,220		$	290,266
Interest earning deposits with banks	123,086			113,785			73,572			66,025			144,154
Total cash and cash equivalents	426,123			385,517			381,441			300,245			434,420
Federal funds sold	—			—			—			—			5
Investment securities:
Securities available for sale, at fair value	1,477,395			1,532,844			1,585,023			1,551,238			1,620,551
Securities held to maturity, at amortized cost	1,151,415			1,191,910			1,230,810			1,224,852			1,203,627
Non-marketable securities - FHLB and FRB Stock	130,232			121,750			114,233			91,400			111,400
Total investment securities	2,759,042			2,846,504			2,930,066			2,867,490			2,935,578
Loans held for sale	843,379			632,196			744,727			676,020			801,343
Loans:
Total loans, excluding purchased credit-impaired loans	10,061,076			9,820,903			9,652,592			9,233,488			8,929,181
Purchased credit-impaired loans	136,811			140,445			141,406			155,693			164,775
Total loans	10,197,887			9,961,348			9,793,998			9,389,181			9,093,956
Less: Allowance for loan and lease losses	135,614			134,493			128,140			124,626			120,070
Net loans	10,062,273			9,826,855			9,665,858			9,264,555			8,973,886
Lease investments, net	233,320			216,046			211,687			184,223			167,966
Premises and equipment, net	243,319			238,578			236,013			234,115			234,651
Cash surrender value of life insurance	138,657			137,807			136,953			136,089			135,237
Goodwill	725,039			725,068			725,070			711,521			711,521
Other intangibles	41,569			43,186			44,812			37,520			34,979
Mortgage servicing rights, at fair value	134,969			145,800			168,162			148,097			261,034
Other real estate owned, net	27,663			28,309			31,553			29,587			28,517
Other real estate owned related to FDIC transactions	8,356			10,397			10,717			13,825			13,867
Other assets	352,081			339,390			297,948			346,814			285,190
Total assets	$	15,995,790		$	15,575,653		$	15,585,007		$	14,950,101		$	15,018,194
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits:
Noninterest bearing	$	4,775,364		$	4,667,410		$	4,627,184		$	4,434,067		$	4,378,005
Interest bearing	6,660,732			6,866,416			6,878,031			6,820,511			6,483,809
Total deposits	11,436,096			11,533,826			11,505,215			11,254,578			10,861,814
Short-term borrowings	1,246,994			884,101			1,005,737			940,529			1,382,635
Long-term borrowings	518,545			439,615			400,274			95,175			89,639
Junior subordinated notes issued to capital trusts	185,925			185,820			186,164			186,068			185,971
Accrued expenses and other liabilities	451,695			409,406			400,333			410,523			420,396
Total liabilities	13,839,255			13,452,768			13,497,723			12,886,873			12,940,455
Stockholders' Equity
Preferred stock	115,280			115,280			115,280			115,280			115,280
Common stock	757			756			756			756			754
Additional paid-in capital	1,288,777			1,284,438			1,280,870			1,277,348			1,273,333
Retained earnings	783,468			756,272			731,812			702,789			677,246
Accumulated other comprehensive income	28,731			24,687			15,777			20,968			18,778
Treasury stock	(60,732		)	(59,863		)	(58,504		)	(55,258		)	(9,035		)
Controlling interest stockholders' equity	2,156,281			2,121,570			2,085,991			2,061,883			2,076,356
Noncontrolling interest	254			1,315			1,293			1,345			1,383
Total stockholders' equity	2,156,535			2,122,885			2,087,284			2,063,228			2,077,739
Total liabilities and stockholders' equity	$	15,995,790		$	15,575,653		$	15,585,007		$	14,950,101		$	15,018,194

MB FINANCIAL, INC. & SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)



															Six Months Ended
															June 30,
(Dollars in thousands, except per share data)	2Q16			1Q16			4Q15			3Q15		2Q15			2016			2015
Interest income:
Loans:
Taxable	$	110,231		$	104,923		$	106,137		$	100,573	$	98,768		$	215,154		$	197,614
Nontaxable	2,741			2,586			2,602			2,283		2,259			5,327			4,433
Investment securities:
Taxable	7,799			9,566			9,708			9,655		10,002			17,365			19,936
Nontaxable	10,644			10,776			10,969			10,752		10,140			21,420			19,253
Federal funds sold	—			—			1			—		—			—			—
Other interest earning accounts	125			141			110			89		57			266			119
Total interest income	131,540			127,992			129,527			123,352		121,226			259,532			241,355
Interest expense:
Deposits	5,952			5,622			5,357			5,102		4,554			11,574			9,199
Short-term borrowings	910			721			385			395		355			1,631			632
Long-term borrowings and junior subordinated notes	2,076			2,345			2,016			1,886		1,844			4,421			3,656
Total interest expense	8,938			8,688			7,758			7,383		6,753			17,626			13,487
Net interest income	122,602			119,304			121,769			115,969		114,473			241,906			227,868
Provision for credit losses	2,829			7,563			6,758			5,358		4,296			10,392			9,270
Net interest income after provision for credit losses	119,773			111,741			115,011			110,611		110,177			231,514			218,598
Non-interest income:
Lease financing revenue, net	15,708			19,046			15,937			20,000		15,564			34,754			40,644
Mortgage banking revenue	39,615			27,482			26,542			30,692		35,648			67,097			60,192
Commercial deposit and treasury management fees	11,548			11,878			11,711			11,472		11,062			23,426			22,100
Trust and asset management fees	8,236			7,950			6,077			6,002		5,752			16,186			11,466
Card fees	4,045			3,525			3,651			3,335		4,409			7,570			8,336
Capital markets and international banking service fees	2,771			3,227			2,355			2,357		1,508			5,998			3,436
Consumer and other deposit service fees	3,161			3,025			3,440			3,499		3,260			6,186			6,343
Brokerage fees	1,315			1,158			1,252			1,281		1,543			2,473			3,221
Loan service fees	1,961			1,752			1,890			1,531		1,353			3,713			2,838
Increase in cash surrender value of life insurance	850			854			864			852		836			1,704			1,675
Net gain (loss) on investment securities	269			—			(3		)	371		(84		)	269			(544		)
Net (loss) gain on sale of assets	(2		)	(48		)	—			1		(7		)	(50		)	(3		)
Other operating income	2,523			1,844			1,909			858		2,105			4,367			4,513
Total non-interest income	92,000			81,693			75,625			82,251		82,949			173,693			164,217
Non-interest expense:
Salaries and employee benefits expense	95,004			85,591			84,709			87,891		86,145			180,595			170,931
Occupancy and equipment expense	13,415			13,260			12,935			12,458		12,177			26,675			25,117
Computer services and telecommunication expense	9,777			9,055			8,445			8,567		8,537			18,832			17,441
Advertising and marketing expense	2,964			2,878			2,551			2,578		2,497			5,842			4,943
Professional and legal expense	3,321			2,589			4,169			1,801		2,413			5,910			5,083
Other intangible amortization expense	1,618			1,626			1,546			1,542		1,509			3,244			3,027
Branch exit and facilities impairment charges	155			44			616			70		438			199			7,829
Net loss (gain) recognized on other real estate owned and other expense	258			(346		)	(729		)	577		724			(88		)	1,620
Prepayment fees on interest bearing liabilities	—			—			—			—		—			—			85
Other operating expenses	21,394			21,103			12,989			18,782		18,297			42,497			36,581
Total non-interest expense	147,906			135,800			127,231			134,266		132,737			283,706			272,657
Income before income taxes	63,867			57,634			63,405			58,596		60,389			121,501			110,158
Income tax expense	20,455			18,520			19,798			18,318		19,437			38,975			35,095
Net income	43,412			39,114			43,607			40,278		40,952			82,526			75,063
Dividends on preferred shares	2,000			2,000			2,000			2,000		2,000			4,000			4,000
Net income available to common stockholders	$	41,412		$	37,114		$	41,607		$	38,278	$	38,952		$	78,526		$	71,063



											Six Months Ended
											June 30,
	2Q16		1Q16		4Q15		3Q15		2Q15		2016		2015
Common share data:
Basic earnings per common share	$	0.56	$	0.51	$	0.57	$	0.52	$	0.52	$	1.07	$	0.95
Diluted earnings per common share	0.56		0.50		0.56		0.51		0.52		1.06		0.94
Weighted average common shares outstanding for basic earnings per common share	73,475,258		73,330,731		73,296,602		74,297,281		74,596,925		73,402,995		74,582,097
Weighted average common shares outstanding for diluted earnings per common share	74,180,374		73,966,935		73,953,165		75,029,827		75,296,029		74,073,655		75,230,455
Common shares outstanding (at end of period)	73,740,348		73,639,487		73,678,329		73,776,196		75,073,292		73,740,348		75,073,292



Selected Financial Data:
																Six Months Ended
																June 30,
	2Q16			1Q16			4Q15			3Q15			2Q15			2016			2015
Performance Ratios:
Annualized return on average assets	1.11		%	1.02		%	1.13		%	1.06		%	1.12		%	1.06		%	1.04		%
Annualized operating return on average assets ⁽¹⁾	1.15			1.09			1.06			1.06			1.14			1.12			1.13
Annualized return on average common equity	8.27			7.52			8.48			7.75			8.02			7.90			7.41
Annualized operating return on average common equity ⁽¹⁾	8.56			8.08			7.86			7.75			8.19			8.32			8.03
Annualized cash return on average tangible common equity ⁽²⁾	13.53			12.47			13.97			12.74			13.21			13.01			12.28
Annualized cash operating return on average tangible common equity ⁽³⁾	13.99			13.37			12.97			12.74			13.47			13.69			13.28
Net interest rate spread	3.64			3.63			3.72			3.60			3.72			3.64			3.75
Cost of funds ⁽⁴⁾	0.27			0.27			0.24			0.23			0.22			0.27			0.22
Efficiency ratio ⁽⁵⁾	65.32			63.49			63.95			65.35			64.26			64.44			64.77
Annualized net non-interest expense to average assets ⁽⁶⁾	1.35			1.31			1.44			1.36			1.32			1.33			1.36
Core non-interest income to revenues ⁽⁷⁾	41.40			39.38			36.91			40.35			40.80			40.42			40.73
Net interest margin	3.60			3.57			3.64			3.52			3.63			3.59			3.68
Tax equivalent effect	0.21			0.22			0.22			0.21			0.21			0.21			0.21
Net interest margin - fully tax equivalent basis ⁽⁸⁾	3.81			3.79			3.86			3.73			3.84			3.80			3.89
Loans to deposits	89.17			86.37			85.13			83.43			83.72			89.17			83.72
Asset Quality Ratios:
Non-performing loans ⁽⁹⁾ to total loans	0.73		%	0.95		%	1.07		%	1.03		%	1.08		%	0.73		%	1.08		%
Non-performing assets ⁽⁹⁾ to total assets	0.64			0.79			0.87			0.85			0.84			0.64			0.84
Allowance for loan and lease losses to non-performing loans ⁽⁹⁾	181.46			142.00			122.43			129.04			122.45			181.46			122.45
Allowance for loan and lease losses to total loans	1.33			1.35			1.31			1.33			1.32			1.33			1.32
Net loan charge-offs (recoveries) to average loans (annualized)	0.09			0.06			0.14			0.06			(0.12		)	0.07			(0.02		)
Capital Ratios:
Tangible equity to tangible assets ⁽¹⁰⁾	9.21		%	9.24		%	8.99		%	9.34		%	9.41		%	9.21		%	9.41		%
Tangible common equity to tangible assets ⁽¹¹⁾	8.46			8.46			8.21			8.53			8.60			8.46			8.60
Tangible common equity to risk weighted assets ⁽¹²⁾	9.75			9.54			9.34			9.69			10.02			9.75			10.02
Total capital (to risk-weighted assets) ⁽¹³⁾	12.81			12.65			12.54			12.94			13.07			12.81			13.07		%
Tier 1 capital (to risk-weighted assets) ⁽¹³⁾	11.77			11.60			11.54			11.92			12.06			11.77			12.06
Common equity tier 1 capital (to risk-weighted assets) ⁽¹³⁾	9.52			9.33			9.27			9.56			9.66			9.52			9.66
Tier 1 capital (to average assets) ⁽¹³⁾	10.41			10.38			10.40			10.43			10.69			10.41			10.69
Per Share Data:
Book value per common share ⁽¹⁴⁾	$	27.68		$	27.26		$	26.77		$	26.40		$	26.14		$	27.68		$	26.14
Less: goodwill and other intangible assets, net of benefit, per common share	10.20			10.22			10.24			9.97			9.78			10.20			9.78
Tangible book value per common share ⁽¹⁵⁾	$	17.48		$	17.04		$	16.53		$	16.43		$	16.36		$	17.48		$	16.36
Cash dividends per common share	$	0.19		$	0.17		$	0.17		$	0.17		$	0.17		$	0.36		$	0.31


⁽¹⁾	Annualized operating return on average assets is computed by dividing annualized operating earnings by average total assets. Annualized operating return on average common equity is computed by dividing annualized operating earnings by average common equity. Operating earnings is defined as net income as reported less non-core items, net of tax.


⁽²⁾	Annualized cash return on average tangible equity is computed by dividing net cash flow available to common stockholders (net income available to common stockholders, plus other intangibles amortization expense, net of tax benefit) by average tangible common equity (average common stockholders' equity less average goodwill and average other intangibles, net of tax benefit).


⁽³⁾	Annualized cash operating return on average tangible common equity is computed by dividing annualized cash operating earnings (operating earnings plus other intangibles amortization expense, net of tax benefit, less dividends on preferred shares) by average tangible common equity. Operating earnings is defined as net income as reported less non-core items, net of tax.


⁽⁴⁾	Equals total interest expense divided by the sum of average interest bearing liabilities and noninterest bearing deposits.


⁽⁵⁾	Equals total non-interest expense excluding non-core items divided by the sum of net interest income on a fully tax equivalent basis, total non-interest income less non-core items, and tax equivalent adjustment on the increase in cash surrender value of life insurance.


⁽⁶⁾	Equals total non-interest expense excluding non-core items less total non-interest income excluding non-core items, and including tax equivalent adjustment on the increase in cash surrender value of life insurance divided by average assets.


⁽⁷⁾	Equals total non-interest income excluding non-core items and tax equivalent adjustment on the increase in cash surrender value of life insurance divided by the sum of net interest income on a fully tax equivalent basis, total non-interest income less non-core items, and tax equivalent adjustment on the increase in cash surrender value of life insurance.


⁽⁸⁾	Represents net interest income on a fully tax equivalent basis assuming a 35% tax rate, as a percentage of average interest earning assets.


⁽⁹⁾	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.


⁽¹⁰⁾	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.


⁽¹¹⁾	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.


⁽¹²⁾	Equals total ending common stockholders’ equity less goodwill and other intangibles, net of tax benefit, divided by risk-weighted assets. Current quarter risk-weighted assets are estimated.


⁽¹³⁾	Current quarter ratios are estimated.


⁽¹⁴⁾	Equals total ending common stockholders’ equity divided by common shares outstanding.


⁽¹⁵⁾	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 operating earnings, core non-interest income, core non-interest income to revenues (with non-core items excluded from both core non-interest income and revenues), core non-interest expense, non-core non-interest income and non-core non-interest expense, net interest income on a fully tax equivalent basis, net interest margin on a fully tax equivalent basis, net interest margin on a fully tax equivalent basis excluding acquisition accounting discount accretion on Taylor Capital loans, efficiency ratio and the ratio of annualized net non-interest expense to average assets with net gains and losses on investment securities, net gains and losses on sale of other assets, 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 prepayment fees on interest bearing liabilities, branch exit and facilities impairment charges, merger related and repositioning expenses, and increase (decrease) in market value of assets held in trust for deferred compensation excluded from the non-interest expense components of these ratios, with tax equivalent adjustment for tax-exempt interest income and increase in cash surrender value of life insurance, as applicable; ratios of tangible equity to tangible assets, tangible common equity to tangible assets and tangible common equity to risk-weighted assets; tangible book value per common share; annualized operating return on average assets, annualized operating return on average common equity, annualized cash return on average tangible common equity and annualized cash operating 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 operating earnings, core and non-core non-interest income and core and non-core non-interest expense are useful in assessing our core operating performance and in understanding the primary drivers of our non-interest income and non-interest expense when comparing periods.

The tax equivalent adjustment to net interest income, net interest margin, tax-exempt interest income and increase in cash surrender value of life insurance 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. For the same reasons, management believes that the tax equivalent adjustments to tax-exempt interest income and increase in cash surrender value of life insurance are useful.

Management also believes that by excluding net gains and losses on investment securities, net gains and losses on sale of other assets and increase (decrease) in market value of assets held in trust for deferred compensation from the non-interest income components, and excluding prepayment fees on interest bearing liabilities, branch exit and facilities impairment charges, merger related and repositioning expenses and increase (decrease) in market value of assets held in trust for deferred compensation from the non-interest expense components, of the efficiency ratio and the ratio of annualized net non-interest expense 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.

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.

Reconciliations of net interest margin on a fully tax equivalent basis to net interest margin and net interest margin on a fully tax equivalent basis excluding acquisition accounting discount accretion on Taylor Capital loans to net interest margin are 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 core and non-core non-interest income and non-interest expense to non-interest income and non-interest expense are contained in the tables under “Results of Operations—Second Quarter Results.”

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



	6/30/2016		3/31/2016		12/31/2015		9/30/2015		6/30/2015
Stockholders' equity - as reported	$	2,156,535	$	2,122,885	$	2,087,284	$	2,063,228	$	2,077,739
Less: goodwill	725,039		725,068		725,070		711,521		711,521
Less: other intangible assets, net of tax benefit	27,020		28,071		29,128		24,388		22,736
Tangible equity	$	1,404,476	$	1,369,746	$	1,333,086	$	1,327,319	$	1,343,482

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



	6/30/2016		3/31/2016		12/31/2015		9/30/2015		6/30/2015
Total assets - as reported	$	15,995,790	$	15,575,653	$	15,585,007	$	14,950,101	$	15,018,194
Less: goodwill	725,039		725,068		725,070		711,521		711,521
Less: other intangible assets, net of tax benefit	27,020		28,071		29,128		24,388		22,736
Tangible assets	$	15,243,731	$	14,822,514	$	14,830,809	$	14,214,192	$	14,283,937

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



	6/30/2016		3/31/2016		12/31/2015		9/30/2015		6/30/2015
Common stockholders' equity - as reported	$	2,041,255	$	2,007,605	$	1,972,004	$	1,947,948	$	1,962,459
Less: goodwill	725,039		725,068		725,070		711,521		711,521
Less: other intangible assets, net of tax benefit	27,020		28,071		29,128		24,388		22,736
Tangible common equity	$	1,289,196	$	1,254,466	$	1,217,806	$	1,212,039	$	1,228,202

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



											Six Months Ended
											June 30,
	2Q16		1Q16		4Q15		3Q15		2Q15		2016		2015
Average common stockholders' equity - as reported	$	2,014,822	$	1,984,379	$	1,945,772	$	1,958,947	$	1,947,231	$	1,999,601	$	1,934,760
Less: average goodwill	725,011		725,070		711,669		711,521		711,521		725,041		711,521
Less: average other intangible assets, net of tax benefit	27,437		28,511		23,826		23,900		23,092		27,974		23,622
Average tangible common equity	$	1,262,374	$	1,230,798	$	1,210,277	$	1,223,526	$	1,212,618	$	1,246,586	$	1,199,617

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



											Six Months Ended
											June 30,
	2Q16		1Q16		4Q15		3Q15		2Q15		2016		2015
Net income available to common stockholders - as reported	$	41,412	$	37,114	$	41,607	$	38,278	$	38,952	$	78,526	$	71,063
Add: other intangible amortization expense, net of tax benefit	1,052		1,057		1,005		1,002		981		2,109		1,968
Net cash flow available to common stockholders	$	42,464	$	38,171	$	42,612	$	39,280	$	39,933	$	80,635	$	73,031

The following table presents a reconciliation of net income to operating earnings (in thousands):



																Six Months Ended
																June 30,
	2Q16			1Q16			4Q15			3Q15			2Q15			2016			2015
Net income - as reported	$	43,412		$	39,114		$	43,607		$	40,278		$	40,952		$	82,526		$	75,063
Less non-core items:
Net gain (loss) on investment securities	269			—			(3		)	371			(84		)	269			(544		)
Net (loss) gain on sale of other assets	(2		)	(48		)	—			1			(7		)	(50		)	(3		)
Increase (decrease) in market value of assets held in trust for deferred compensation - other operating income	480			8			565			(872		)	7			488			313
Merger related and repositioning expenses	(2,566		)	(3,287		)	4,186			(389		)	(1,234		)	(5,853		)	(9,303		)
Branch exit and facilities impairment charges	(155		)	—			—			—			—			(155		)	—
Prepayment fees on interest bearing liabilities	—			—			—			—			—			—			(85		)
Increase (decrease) in market value of assets held in trust for deferred compensation - other operating expense	(480		)	(8		)	(565		)	872			(7		)	(488		)	(313		)
Total non-core items	(2,454		)	(3,335		)	4,183			(17		)	(1,325		)	(5,789		)	(9,935		)
Income tax expense on non-core items	(1,003		)	(577		)	1,140			(6		)	(526		)	(1,580		)	(3,943		)
Non-core items, net of tax	(1,451		)	(2,758		)	3,043			(11		)	(799		)	(4,209		)	(5,992		)
Operating earnings	44,863			41,872			40,564			40,289			41,751			86,735			81,055
Dividends on preferred shares	2,000			2,000			2,000			2,000			2,000			4,000			4,000
Operating earnings available to common stockholders	$	42,863		$	39,872		$	38,564		$	38,289		$	39,751		$	82,735		$	77,055
Diluted operating earnings per common share	$	0.58		$	0.54		$	0.52		$	0.51		$	0.53		$	1.12		$	1.02
Weighted average common shares outstanding for diluted operating earnings per common share	74,180,374			73,966,935			73,953,165			75,029,827			75,296,029			74,073,655			75,230,455

Efficiency Ratio Calculation (Dollars in Thousands)



																Six Months Ended
																June 30,
	2Q16			1Q16			4Q15			3Q15			2Q15			2016			2015
Non-interest expense	$	147,906		$	135,800		$	127,231		$	134,266		$	132,737		$	283,706		$	272,657
Less merger related and repositioning expenses	2,566			3,287			(4,186		)	389			1,234			5,853			9,303
Less prepayment fees on interest bearing liabilities	—			—			—			—			—			—			85
Less branch exit and facilities impairment charges	155			—			—			—			—			155			—
Less increase (decrease) in market value of assets held in trust for deferred compensation	480			8			565			(872		)	7			488			313
Non-interest expense - as adjusted	$	144,705		$	132,505		$	130,852		$	134,749		$	131,496		$	277,210		$	262,956

Net interest income	$	122,602		$	119,304		$	121,769		$	115,969		$	114,473		$	241,906		$	227,868
Tax equivalent adjustment	7,208			7,195			7,307			7,019			6,676			14,403			12,754
Net interest income on a fully tax equivalent basis	129,810			126,499			129,076			122,988			121,149			256,309			240,622
Plus non-interest income	92,000			81,693			75,625			82,251			82,949			173,693			164,217
Plus tax equivalent adjustment on the increase in cash surrender value of life insurance	458			460			465			459			450			918			902
Less net gain (loss) on investment securities	269			—			(3		)	371			(84		)	269			(544		)
Less net (loss) gain on sale of other assets	(2		)	(48		)	—			1			(7		)	(50		)	(3		)
Less increase (decrease) in market value of assets held in trust for deferred compensation	480			8			565			(872		)	7			488			313
Net interest income plus non-interest income - as adjusted	$	221,521		$	208,692		$	204,604		$	206,198		$	204,632		$	430,213		$	405,975
Efficiency ratio	65.32		%	63.49		%	63.95		%	65.35		%	64.26		%	64.44		%	64.77		%
Efficiency ratio (without adjustments)	68.92		%	67.56		%	64.46		%	67.74		%	67.24		%	68.26		%	69.54		%

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



																Six Months Ended
																June 30,
	2Q16			1Q16			4Q15			3Q15			2Q15			2016			2015
Non-interest expense	$	147,906		$	135,800		$	127,231		$	134,266		$	132,737		$	283,706		$	272,657
Less merger related and repositioning expenses	2,566			3,287			(4,186		)	389			1,234			5,853			9,303
Less prepayment fees on interest bearing liabilities	—			—			—			—			—			—			85
Less branch exit and facilities impairment charges	155			—			—			—			—			155			—
Less increase (decrease) in market value of assets held in trust for deferred compensation	480			8			565			(872		)	7			488			313
Non-interest expense - as adjusted	144,705			132,505			130,852			134,749			131,496			277,210			262,956

Non-interest income	92,000			81,693			75,625			82,251			82,949			173,693			164,217
Less net gain (loss) on investment securities	269			—			(3		)	371			(84		)	269			(544		)
Less net (loss) gain on sale of other assets	(2		)	(48		)	—			1			(7		)	(50		)	(3		)
Less increase (decrease) in market value of assets held in trust for deferred compensation	480			8			565			(872		)	7			488			313
Non-interest income - as adjusted	91,253			81,733			75,063			82,751			83,033			172,986			164,451
Less tax equivalent adjustment on the increase in cash surrender value of life insurance	458			460			465			459			450			918			902
Net non-interest expense	$	52,994		$	50,312		$	55,324		$	51,539		$	48,013		$	103,306		$	97,603
Average assets	$	15,740,658		$	15,487,565		$	15,244,633		$	15,059,429		$	14,631,999		$	15,614,111		$	14,498,364
Annualized net non-interest expense to average assets	1.35		%	1.31		%	1.44		%	1.36		%	1.32		%	1.33		%	1.36		%
Annualized net non-interest expense to average assets (without adjustments)	1.43		%	1.41		%	1.34		%	1.37		%	1.36		%	1.42		%	1.51		%

Core Non-interest Income to Revenues Ratio Calculation (Dollars in Thousands)



																Six Months Ended
																June 30,
	2Q16			1Q16			4Q15			3Q15			2Q15			2016			2015
Non-interest income	$	92,000		$	81,693		$	75,625		$	82,251		$	82,949		$	173,693		$	164,217
Plus tax equivalent adjustment on the increase in cash surrender value of life insurance	458			460			465			459			450			918			902
Less net gain (loss) on investment securities	269			—			(3		)	371			(84		)	269			(544		)
Less net (loss) gain on sale of other assets	(2		)	(48		)	—			1			(7		)	(50		)	(3		)
Less increase (decrease) in market value of assets held in trust for deferred compensation	480			8			565			(872		)	7			488			313
Non-interest income - as adjusted	$	91,711		$	82,193		$	75,528		$	83,210		$	83,483		$	173,904		$	165,353

Net interest income	$	122,602		$	119,304		$	121,769		$	115,969		$	114,473		$	241,906		$	227,868
Tax equivalent adjustment	7,208			7,195			7,307			7,019			6,676			14,403			12,754
Net interest income on a fully tax equivalent basis	129,810			126,499			129,076			122,988			121,149			256,309			240,622
Plus non-interest income	92,000			81,693			75,625			82,251			82,949			173,693			164,217
Plus tax equivalent adjustment on the increase in cash surrender value of life insurance	458			460			465			459			450			918			902
Less net gain (loss) on investment securities	269			—			(3		)	371			(84		)	269			(544		)
Less net (loss) gain on sale of other assets	(2		)	(48		)	—			1			(7		)	(50		)	(3		)
Less increase (decrease) in market value of assets held in trust for deferred compensation	480			8			565			(872		)	7			488			313
Total revenue - as adjusted and on a fully tax equivalent basis	$	221,521		$	208,692		$	204,604		$	206,198		$	204,632		$	430,213		$	405,975

Total revenue - unadjusted	$	214,602		$	200,997		$	197,394		$	198,220		$	197,422		$	415,599		$	392,085

Core non-interest income to revenues ratio	41.40		%	39.38		%	36.91		%	40.35		%	40.80		%	40.42		%	40.73		%
Non-interest income to revenues ratio (without adjustments)	42.87		%	40.64		%	38.31		%	41.49		%	42.02		%	41.79		%	41.88		%

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):



	2Q16						2Q15						1Q16
	Average Balance		Interest		Yield/ Rate		Average Balance		Interest		Yield/ Rate		Average Balance		Interest		Yield/ Rate
Interest Earning Assets:
Loans held for sale	$	727,631	$	6,311	3.47	%	$	781,020	$	6,839	3.50	%	$	661,021	$	5,966	3.61	%
Loans ^{(1) (2) (3)}:
Commercial-related credits
Commercial	3,522,641		39,002		4.38		3,309,519		34,884		4.17		3,531,441		37,357		4.18
Commercial loans collateralized by assignment of lease payments	1,777,763		16,647		3.75		1,634,583		15,235		3.73		1,754,558		16,577		3.78
Real estate commercial	2,821,516		29,948		4.20		2,522,473		27,145		4.26		2,734,148		28,039		4.06
Real estate construction	351,079		3,436		3.87		191,935		2,388		4.92		276,797		2,902		4.15
Total commercial-related credits	8,472,999		89,033		4.16		7,658,510		79,652		4.11		8,296,944		84,875		4.05
Other loans
Real estate residential	710,384		6,064		3.41		512,766		4,785		3.73		640,231		5,695		3.56
Home equity	202,228		1,969		3.92		233,867		2,301		3.95		210,678		2,033		3.88
Indirect	462,053		5,333		4.64		286,107		3,769		5.28		404,473		4,758		4.73
Consumer loans	78,108		767		3.95		76,189		780		4.11		80,569		794		3.97
Total other loans	1,452,773		14,133		3.91		1,108,929		11,635		4.21		1,335,951		13,280		4.00
Total loans, excluding purchased credit-impaired loans	9,925,772		103,166		4.18		8,767,439		91,287		4.18		9,632,895		98,155		4.10
Purchased credit-impaired loans	136,415		4,972		14.66		202,374		4,117		8.16		139,451		4,780		13.75
Total loans	10,062,187		108,138		4.32		8,969,813		95,404		4.27		9,772,346		102,935		4.24
Taxable investment securities	1,466,915		7,799		2.13		1,545,284		10,002		2.59		1,524,583		9,566		2.51
Investment securities exempt from federal income taxes ⁽³⁾	1,339,465		16,375		4.89		1,261,567		15,600		4.95		1,362,468		16,579		4.87
Federal funds sold	35		0		1.00		126		0		1.00		42		0		1.00
Other interest earning deposits	100,200		125		0.50		85,935		57		0.27		113,748		141		0.50
Total interest earning assets	$	13,696,433	$	138,748	4.07	%	$	12,643,745	$	127,902	4.06	%	$	13,434,208	$	135,187	4.05	%
Non-interest earning assets	2,044,225						1,988,254						2,053,357
Total assets	$	15,740,658					$	14,631,999					$	15,487,565
Interest Bearing Liabilities:
Core funding:
Money market, NOW and interest bearing deposits	$	3,836,134	$	2,049	0.21	%	$	3,940,201	$	1,634	0.17	%	$	4,109,150	$	2,086	0.20	%
Savings deposits	1,006,902		174		0.07		972,327		135		0.06		984,019		159		0.06
Certificates of deposit	1,237,198		1,474		0.48		1,302,031		1,259		0.39		1,237,971		1,413		0.46
Customer repurchase agreements	162,038		85		0.21		241,942		104		0.17		190,114		94		0.20
Total core funding	6,242,272		3,782		0.24		6,456,501		3,132		0.19		6,521,254		3,752		0.23
Wholesale funding:
Brokered certificates of deposit (includes fee expense)	598,702		2,255		1.51		412,517		1,526		1.48		534,910		1,964		1.48
Other borrowings	1,573,083		2,901		0.73		1,078,297		2,095		0.77		1,327,274		2,972		0.89
Total wholesale funding	2,171,785		5,156		0.95		1,490,814		3,621		0.96		1,862,184		4,936		1.07
Total interest bearing liabilities	$	8,414,057	$	8,938	0.43	%	$	7,947,315	$	6,753	0.34	%	$	8,383,438	$	8,688	0.42	%
Non-interest bearing deposits	4,806,692						4,273,931						4,606,008
Other non-interest bearing liabilities	389,807						348,242						398,460
Stockholders' equity	2,130,102						2,062,511						2,099,659
Total liabilities and stockholders' equity	$	15,740,658					$	14,631,999					$	15,487,565
Net interest income/interest rate spread ⁽⁴⁾			$	129,810	3.64	%			$	121,149	3.72	%			$	126,499	3.63	%
Taxable equivalent adjustment			7,208						6,676						7,195
Net interest income, as reported			$	122,602					$	114,473					$	119,304
Net interest margin ⁽⁵⁾					3.60	%					3.63	%					3.57	%
Tax equivalent effect					0.21	%					0.21	%					0.22	%
Net interest margin on a fully tax equivalent basis ⁽⁵⁾					3.81	%					3.84	%					3.79	%


⁽¹⁾	Non-accrual loans are included in average loans.


⁽²⁾	Interest income includes amortization of deferred loan origination fees and costs.


⁽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,
	2016						2015
	Average Balance		Interest		Yield/ Rate		Average Balance		Interest		Yield/ Rate
Interest Earning Assets:
Loans held for sale	$	694,326	$	12,277	3.54	%	$	719,934	$	12,624	3.51	%
Loans ^{(1) (2) (3)}:
Commercial-related credits
Commercial	3,527,041		76,359		4.28		3,250,466		67,507		4.13
Commercial loans collateralized by assignment of lease payments	1,766,161		33,224		3.76		1,641,135		30,673		3.74
Real estate commercial	2,777,832		57,987		4.13		2,530,688		54,693		4.30
Real estate construction	313,938		6,338		3.99		191,598		6,469		6.72
Total commercial-related credits	8,384,972		173,908		4.10		7,613,887		159,342		4.16
Other loans
Real estate residential	675,307		11,759		3.48		503,120		9,813		3.90
Home equity	206,453		4,002		3.90		240,167		4,769		4.00
Indirect	433,263		10,091		4.68		276,738		7,254		5.29
Consumer loans	79,339		1,561		3.96		74,292		1,577		4.28
Total other loans	1,394,362		27,413		3.95		1,094,317		23,413		4.31
Total loans, excluding purchased credit-impaired loans	9,779,334		201,321		4.14		8,708,204		182,755		4.23
Purchased credit-impaired loans	137,933		9,752		14.22		221,270		9,054		8.25
Total loans	9,917,267		211,073		4.28		8,929,474		191,809		4.33
Taxable investment securities	1,495,749		17,365		2.32		1,550,876		19,936		2.57
Investment securities exempt from federal income taxes ⁽³⁾	1,350,967		32,954		4.88		1,194,224		29,621		4.96
Federal funds sold	39		0		1.00		71		0		1.00
Other interest earning deposits	106,974		266		0.50		94,095		119		0.26
Total interest earning assets	$	13,565,322	$	273,935	4.06	%	$	12,488,674	$	254,109	4.10	%
Non-interest earning assets	2,048,789						2,009,690
Total assets	$	15,614,111					$	14,498,364
Interest Bearing Liabilities:
Core funding:
Money market and NOW accounts	$	3,972,642	$	4,135	0.21	%	$	3,938,962	$	3,229	0.17	%
Savings accounts	995,460		333		0.07		962,391		255		0.05
Certificates of deposit	1,237,584		2,887		0.47		1,360,849		2,711		0.40
Customer repurchase agreements	176,076		179		0.20		243,897		223		0.18
Total core funding	6,381,762		7,534		0.24		6,506,099		6,418		0.20
Wholesale funding:
Brokered accounts (includes fee expense)	566,806		4,219		1.50		444,205		3,004		1.36
Other borrowings	1,450,178		5,873		0.80		905,950		4,065		0.89
Total wholesale funding	2,016,984		10,092		1.01		1,350,155		7,069		1.03
Total interest bearing liabilities	$	8,398,746	$	17,626	0.42	%	$	7,856,254	$	13,487	0.35	%
Non-interest bearing deposits	4,706,351						4,237,144
Other non-interest bearing liabilities	394,133						354,926
Stockholders' equity	2,114,881						2,050,040
Total liabilities and stockholders' equity	$	15,614,111					$	14,498,364
Net interest income/interest rate spread ⁽⁴⁾			$	256,309	3.64	%			$	240,622	3.75	%
Taxable equivalent adjustment			14,403						12,754
Net interest income, as reported			$	241,906					$	227,868
Net interest margin ⁽⁵⁾					3.59	%					3.68	%
Tax equivalent effect					0.21	%					0.21	%
Net interest margin on a fully tax equivalent basis ⁽⁵⁾					3.80	%					3.89	%


⁽¹⁾	Non-accrual loans are included in average loans.


⁽²⁾	Interest income includes amortization of deferred loan origination fees and costs.


⁽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.

The table below reflects the impact the acquisition accounting loan discount accretion on Taylor Capital loans had on the loan yield and net interest margin on a fully tax equivalent basis for the three months ended June 30, 2016, June 30, 2015 and March 31, 2016 (dollars in thousands):



	2Q16							2Q15							1Q16
	Average Balance			Interest		Yield		Average Balance			Interest		Yield		Average Balance			Interest		Yield
Loan yield excluding acquisition accounting discount accretion on Taylor Capital loans:
Total loans, as reported	$	10,062,187		$	108,138	4.32	%	$	8,969,813		$	95,404	4.27	%	$	9,772,346		$	102,935	4.24	%
Less acquisition accounting discount accretion on non-PCI loans	(27,123		)	5,390				(50,333		)	6,992				(32,293		)	4,950
Less acquisition accounting discount accretion on PCI loans	(23,272		)	2,312				(34,514		)	960				(25,696		)	2,403
Total loans, excluding acquisition accounting discount accretion on Taylor Capital loans	$	10,112,582		$	100,436	3.99	%	$	9,054,660		$	87,452	3.87	%	$	9,830,335		$	95,582	3.91	%

Net interest margin on a fully tax equivalent basis, excluding acquisition accounting discount accretion on Taylor Capital loans:
Total interest earning assets, as reported	$	13,696,433		$	129,810	3.81	%	$	12,643,745		$	121,149	3.84	%	$	13,434,208		$	126,499	3.79	%
Less acquisition accounting discount accretion on non-PCI loans	(27,123		)	5,390				(50,333		)	6,992				(32,293		)	4,950
Less acquisition accounting discount accretion on PCI loans	(23,272		)	2,312				(34,514		)	960				(25,696		)	2,403
Total interest earning assets/net interest margin on a fully tax equivalent basis, excluding acquisition accounting discount accretion on Taylor Capital loans	$	13,746,828		$	122,108	3.57	%	$	12,728,592		$	113,197	3.57	%	$	13,492,197		$	119,146	3.55	%



	Six Months Ended June 30,
	2016							2015
	Average Balance			Interest		Yield		Average Balance			Interest		Yield
Loan yield excluding acquisition accounting discount accretion on Taylor Capital loans:
Total loans, as reported	$	9,917,267		$	211,073	4.28	%	$	8,929,474		$	191,809	4.33	%
Less acquisition accounting discount accretion on non-PCI loans	(29,598		)	10,340				(54,047		)	14,940
Less acquisition accounting discount accretion on PCI loans	(24,535		)	4,715				(34,802		)	1,588
Total loans, excluding acquisition accounting discount accretion on Taylor Capital loans	$	9,971,400		$	196,018	3.95	%	$	9,018,323		$	175,281	3.92	%

Net interest margin on a fully tax equivalent basis, excluding acquisition accounting discount accretion on Taylor Capital loans:
Total interest earning assets, as reported	$	13,565,322		$	256,309	3.80	%	$	12,488,674		$	240,622	3.89	%
Less acquisition accounting discount accretion on non-PCI loans	(29,598		)	10,340				(54,047		)	14,940
Less acquisition accounting discount accretion on PCI loans	(24,535		)	4,715				(34,802		)	1,588
Total interest earning assets/net interest margin on a fully tax equivalent basis, excluding acquisition accounting discount accretion on Taylor Capital loans	$	13,619,455		$	241,254	3.56	%	$	12,577,523		$	224,094	3.59	%

MB FINANCIAL INC /MD - FORM 8-K - EX-99 - EXHIBIT 99 - July 21, 2016

Attached files

MB FINANCIAL INC /MD Reports