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MB Financial, Inc. Reports Earnings for the First Quarter of 2016

CHICAGO, April 18, 2016 (GLOBE NEWSWIRE) -- MB Financial, Inc. (NASDAQ:MBFI), the holding company for MB Financial Bank, N.A., today announced 2016 first quarter net income available to common stockholders of $37.1 million, or $0.50 per diluted common share, compared to $41.6 million, or $0.56 per diluted common share, last quarter and $32.1 million, or $0.43 per diluted common share, in the first quarter a year ago.

Highlights Include:

Growth in Core Earnings for the Quarter

Core (or operating) earnings increased by $1.3 million, or $0.02 per diluted common share, compared to last quarter and $2.6 million, or $0.04 per diluted common share, compared to the first quarter of last year.

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

1Q16 4Q15 1Q15
Net income - as reported $39,114 $43,607 $34,111
Less non-core items:
Net loss on investment securities (3) (460)
Net (loss) gain on sale of other assets (48) 4
Merger related and repositioning expenses (3,287) 4,186 (8,069)
Prepayment fees on interest bearing liabilities (85)
Total non-core items (3,335) 4,183 (8,610)
Income tax expense on non-core items (577) 1,140 (3,417)
Non-core items, net of tax (2,758) 3,043 (5,193)
Operating earnings 41,872 40,564 39,304
Dividends on preferred shares 2,000 2,000 2,000
Operating earnings available to common stockholders $39,872 $38,564 $37,304
Diluted operating earnings per common share $0.54 $0.52 $0.50
Weighted average common shares outstanding for diluted operating earnings per common share 73,966,935 73,953,165 75,164,716

  • Net interest income on a fully tax equivalent basis decreased $2.6 million (-2.0%) to $126.5 million in the first quarter of 2016 compared to the prior quarter due to one less day in the quarter (approximately $1.4 million) and lower accretion income on loans acquired in the Taylor Capital merger ($2.4 million) partially offset by net interest income related to an increase in average interest earning asset balances.
  • Our net interest margin on a fully tax equivalent basis, excluding accretion on loans acquired in the Taylor Capital merger, was stable at 3.55% compared to 3.56% last quarter.
  • Our core non-interest income was $81.7 million compared to $75.1 million in the prior quarter (8.9% increase). The improvement was largely driven by an increase in fees and promotional revenue (lease financing) from the sale of third-party equipment maintenance contracts as well as trust and asset management fees which increased primarily due to $1.7 million in fees from MSA Holdings, LLC ("MSA"), which we acquired on December 31, 2015.
  • Our core non-interest expense increased $1.7 million (+1.3%) compared to the prior quarter primarily due to an increase in leasing commission expense (salaries and employee benefits) as a result of higher lease financing revenues.

Growth in Loan Balances During the Quarter

  • Loan balances, excluding purchased credit-impaired loans, increased $168.3 million (+1.7%, or +7.0% annualized) during the first quarter of 2016.

Change from 12/31/2015 to 3/31/2016
(Dollars in thousands) 3/31/2016 12/31/2015 Amount Percent
Commercial-related credits:
Commercial loans $3,509,604 $3,616,286 $(106,682) (3.0)%
Commercial loans collateralized by assignment of lease payments (lease loans) 1,774,104 1,779,072 (4,968) (0.3)
Commercial real estate 2,831,814 2,695,676 136,138 5.1
Construction real estate 310,278 252,060 58,218 23.1
Total commercial-related credits 8,425,800 8,343,094 82,706 1.0
Other loans:
Residential real estate 677,791 628,169 49,622 7.9
Indirect vehicle 432,915 384,095 48,820 12.7
Home equity 207,079 216,573 (9,494) (4.4)
Consumer loans 77,318 80,661 (3,343) (4.1)
Total other loans 1,395,103 1,309,498 85,605 6.5
Total loans, excluding purchased credit-impaired 9,820,903 9,652,592 168,311 1.7
Purchased credit-impaired 140,445 141,406 (961) (0.7)
Total loans $9,961,348 $9,793,998 $167,350 1.7%

Stable Deposit Balances During the Quarter

  • Total low cost deposits continued to represent 84% of total deposits at March 31, 2016 and non-interest bearing deposits continued to comprise 40% of total deposits.

Change from 12/31/2015 to 3/31/2016
(Dollars in thousands) 3/31/2016 12/31/2015 Amount Percent
Low cost deposits:
Noninterest bearing deposits $4,667,410 $4,627,184 $40,226 0.9%
Money market and NOW 4,048,054 4,144,633 (96,579) (2.3)
Savings 991,300 974,555 16,745 1.7
Total low cost deposits 9,706,764 9,746,372 (39,608) (0.4)
Certificates of deposit:
Certificates of deposit 1,255,457 1,244,292 11,165 0.9
Brokered certificates of deposit 571,605 514,551 57,054 11.1
Total certificates of deposit 1,827,062 1,758,843 68,219 3.9
Total deposits $11,533,826 $11,505,215 $28,611 0.2%

Credit Quality Metrics

  • Provision for credit losses was $7.6 million in the first quarter of 2016 compared to $6.8 million in the fourth quarter of 2015.
  • Our net loan charge-offs during the first quarter of 2016 were $1.3 million, or 0.06% of loans (annualized), compared to net loan charge-offs of $3.3 million, or 0.14% of loans (annualized), in the fourth quarter of 2015.
  • Non-performing loans and non-performing assets decreased by $9.9 million and $13.1 million, respectively, from December 31, 2015 primarily due to loans that paid off during the quarter.
  • Potential problem loans decreased by $29.7 million from December 31, 2015 primarily due to loans that paid off during the quarter.
  • Our allowance for loan and lease losses to total loans ratio was 1.35% at March 31, 2016 compared to 1.31% at December 31, 2015.

American Chartered Bancorp, Inc. Pending Merger Update

  • The transaction was approved by American Chartered shareholders in March 2016.
  • The merger remains subject to regulatory approval and is expected to close around June 30, 2016.

RESULTS OF OPERATIONS

First Quarter Results

Net Interest Income

(Dollars in thousands) 1Q16
4Q15
Change from 4Q15 to 1Q16 1Q15
Change from 1Q15 to 1Q16
Net interest income - fully tax equivalent $126,499 $129,076 -2.0% $119,473 +5.9%
Net interest income - fully tax equivalent, excluding acquisition accounting discount accretion on Taylor Capital loans $119,146 $119,373 -0.2% $110,897 +7.4%
Net interest margin - fully tax equivalent 3.79% 3.86% -0.07% 3.93% -0.14
Net interest margin - fully tax equivalent, excluding acquisition accounting discount accretion on Taylor Capital loans 3.55% 3.56% -0.01% 3.62% -0.07

Reconciliations of net interest income - fully tax equivalent to net interest income, as reported, net interest margin - fully tax equivalent to net interest margin and net interest margin - fully tax equivalent, excluding acquisition accounting discount accretion on Taylor Capital loans to net interest margin are set forth in the tables in the "Net Interest Margin" section.

Net interest income on a fully tax equivalent basis decreased in the first quarter of 2016 compared to the prior quarter due to one less day in the quarter (approximately $1.4 million) and lower accretion income on loans acquired in the Taylor Capital merger ($2.4 million) partially offset by net interest income related to an increase in average interest earning asset balances.

Net interest income on a fully tax equivalent basis increased in the first quarter of 2016 compared to the first quarter of 2015 primarily due to an increase in average interest earning assets, partially offset by a decrease in our net interest margin.

Compared to the first quarter of 2015, our net interest margin on a fully tax equivalent basis, excluding accretion of the acquisition accounting discount recorded on loans acquired in the Taylor Capital merger, decreased by seven basis points primarily due to a decrease in average yields earned on loans (excluding accretion) and, to a lesser extent, an increase in cost of funds.

See the supplemental net interest margin tables for further detail.

Non-interest Income (in thousands):

1Q16 4Q15 3Q15 2Q15 1Q15
Core non-interest income:
Key fee initiatives:
Lease financing revenues, net $19,046 $15,937 $20,000 $15,564 $25,080
Mortgage banking revenue 27,482 26,542 30,692 35,648 24,544
Commercial deposit and treasury management fees 11,878 11,711 11,472 11,062 11,038
Trust and asset management fees 7,950 6,077 6,002 5,752 5,714
Card fees 3,525 3,651 3,335 4,409 3,927
Capital markets and international banking service fees 3,227 2,355 2,357 1,508 1,928
Total key fee initiatives 73,108 66,273 73,858 73,943 72,231
Consumer and other deposit service fees 3,025 3,440 3,499 3,260 3,083
Brokerage fees 1,158 1,252 1,281 1,543 1,678
Loan service fees 1,752 1,890 1,531 1,353 1,485
Increase in cash surrender value of life insurance 854 864 852 836 839
Other operating income 1,836 1,344 1,730 2,098 2,102
Total core non-interest income 81,733 75,063 82,751 83,033 81,418
Non-core non-interest income:
Net gain (loss) on investment securities (3) 371 (84) (460)
Net (loss) gain on sale of other assets (48) 1 (7) 4
(Decrease) increase in market value of assets held in trust for deferred compensation (1) 8 565 (872) 7 306
Total non-core non-interest income (40) 562 (500) (84) (150)
Total non-interest income $81,693 $75,625 $82,251 $82,949 $81,268

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

Core non-interest income for the first quarter of 2016 increased by $6.7 million, or 8.9%, to $81.7 million from the fourth quarter of 2015.

  • Lease financing revenues increased due to an increase in fees and promotional revenue from the sale of third-party equipment maintenance contracts.
  • Trust and asset management fees increased primarily due to the acquisition of MSA.
  • Mortgage banking revenue increased due to higher mortgage servicing fees partly offset by a decrease in mortgage origination fees.
  • Capital markets and international banking services fees increased due to higher swap fees.

Core non-interest income for the first quarter of 2016 increased by $315 thousand, or 0.4%, to $81.7 million from the first quarter of 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 acquisition of MSA.
  • Capital markets and international banking services fees increased due to higher derivatives fees.
  • Commercial deposit and treasury management fees increased due to new customer activity.
  • Lease financing revenues decreased due to lower 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. We estimate the quarterly impact of the Durbin amendment, when comparing the first quarter of 2016 with the first quarter of 2015, was $1.2 million.

Non-interest Expense (in thousands):

1Q16 4Q15 3Q15 2Q15 1Q15
Core non-interest expense:(1)
Salaries and employee benefits expense $85,502 $84,356 $88,760 $86,138 $84,447
Occupancy and equipment expense 13,260 12,935 12,456 12,081 12,763
Computer services and telecommunication expense 8,750 8,548 8,558 8,407 8,634
Advertising and marketing expense 2,855 2,549 2,578 2,497 2,446
Professional and legal expense 2,492 2,715 1,496 1,902 2,480
Other intangible amortization expense 1,626 1,546 1,542 1,509 1,518
Net (gain) loss recognized on other real estate owned (A) (637) (256) 520 662 888
Net loss (gain) recognized on other real estate owned related to FDIC transactions (A) 154 (549) 65 (88) (273)
Other real estate expense, net (A) 137 76 (8) 150 281
Other operating expenses 18,366 18,932 18,782 18,238 18,276
Total core non-interest expense 132,505 130,852 134,749 131,496 131,460
Non-core non-interest expense: (1)
Merger related and repositioning expenses (B) 3,287 (4,186) 389 1,234 8,069
Prepayment fees on interest bearing liabilities 85
Increase (decrease) in market value of assets held in trust for deferred compensation (C) 8 565 (872) 7 306
Total non-core non-interest expense 3,295 (3,621) (483) 1,241 8,460
Total non-interest expense $135,800 $127,231 $134,266 $132,737 $139,920

(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.

Core non-interest expense increased by $1.7 million, or 1.3%, from the fourth quarter of 2015 to $132.5 million for the first quarter of 2016.

  • Salaries and employee benefits expense was up due to an increase in leasing commission expense as a result of higher lease financing revenues.
  • Occupancy and equipment expense increased due to higher rental operating expenses and real estate taxes offset partly by lower building repair and maintenance expenses.

Core non-interest expense increased by $1.0 million, or 0.8%, from the first quarter of 2015 to $132.5 million for the first quarter of 2016.

  • Salaries and employee benefits expense was up due to annual pay increases as well as an increase in temporary help in our mortgage and IT areas.
  • Occupancy and equipment expense increased due to higher depreciation expense, rental operating expenses and real estate taxes offset partly by lower building repair and maintenance expenses.

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

1Q16 4Q15 3Q15 2Q15 1Q15
Merger related and repositioning expenses:
Salaries and employee benefits $81 $(212) $3 $ $33
Occupancy and equipment expense 2 96 177
Computer services and telecommunication expense 305 (103) 9 130 270
Advertising and marketing expense 23 2
Professional and legal expense 97 1,454 305 511 190
Branch exit and facilities impairment charges 44 616 70 438 7,391
Contingent consideration expense - Celtic acquisition (1) 2,703
Other operating expenses 34 (5,943) 59 8
Total merger related and repositioning expenses $3,287 $(4,186) $389 $1,234 $8,069

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

In the first quarter of 2016, merger related and repositioning expenses included contingent consideration for our acquisition of Celtic Leasing Corp. due to strong lease residual performance. 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.

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 present summary financial information, adjusted for funds transfer pricing and internal allocations of certain expenses, for the reportable segments (in thousands):

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 losses7,001 437 125 7,563
Net interest income after provision for credit losses102,607 1,986 7,148 111,741
Non-interest income:
Lease financing revenues, net679 18,367 19,046
Mortgage origination fees 16,894 16,894
Mortgage servicing fees 10,588 10,588
Other non-interest income34,388 828 (3) (48) 35,165
Total non-interest income35,067 19,195 27,479 (48) 81,693
Non-interest expense:
Salaries and employee benefits53,421 9,072 23,017 81 85,591
Occupancy and equipment expense10,430 895 1,935 13,260
Computer services and telecommunication expense6,446 363 1,941 305 9,055
Professional and legal expense1,486 409 597 97 2,589
Other operating expenses15,570 1,447 5,484 2,804 25,305
Total non-interest expense87,353 12,186 32,974 3,287 135,800
Income before income taxes50,321 8,995 1,653 (3,335) 57,634
Income tax expense14,927 3,509 661 (577) 18,520
Net income$35,394 $5,486 $992 $(2,758) $39,114


Banking Leasing Mortgage Banking Non-core Items Consolidated
Three months ended December 31, 2015
Net interest income$111,691 $2,714 $7,364 $ $121,769
Provision for credit losses6,654 104 6,758
Net interest income after provision for credit losses105,037 2,714 7,260 115,011
Non-interest income:
Lease financing revenues, net1,180 14,757 15,937
Mortgage origination fees 17,596 17,596
Mortgage servicing fees 8,946 8,946
Other non-interest income32,337 802 10 (3) 33,146
Total non-interest income33,517 15,559 26,552 (3) 75,625
Non-interest expense:
Salaries and employee benefits54,655 7,474 22,792 (212) 84,709
Occupancy and equipment expense10,344 855 1,736 12,935
Computer services and telecommunication expense6,200 340 2,008 (103) 8,445
Professional and legal expense1,709 328 678 1,454 4,169
Other operating expenses15,757 1,501 5,040 (5,325) 16,973
Total non-interest expense88,665 10,498 32,254 (4,186) 127,231
Income before income taxes49,889 7,775 1,558 4,183 63,405
Income tax expense14,998 3,037 623 1,140 19,798
Net income$34,891 $4,738 $935 $3,043 $43,607

Net income from our Banking Segment for the first quarter of 2016 increased compared to the prior quarter. This increase was primarily due to higher fee income coupled with better expense control which offset lower accretion income on loans acquired in the Taylor Capital merger.

Net income from our Leasing Segment for the first quarter of 2016 increased compared to the prior quarter. This increase was primarily due to an increase in lease financing revenues due to an increase in fees and promotional revenue from the sale of third-party equipment maintenance contracts partly offset by an increase in commission expense and higher provision for credit losses.

Net income from our Mortgage Banking Segment for the first quarter of 2016 was stable compared to the prior quarter as an increase in mortgage servicing fees was partly offset by a decrease in mortgage origination fees and higher non-interest expenses.

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

1Q16 4Q15 3Q15 2Q15 1Q15
Origination volume: $1,328,804 $1,437,057 $1,880,960 $2,010,175 $1,688,541
Refinance 49% 42% 34% 43% 61%
Purchase 51 58 66 57 39
Origination volume by channel:
Retail 19% 18% 18% 18% 18%
Third party 81 82 82 82 82
Mortgage servicing book (unpaid principal balance of loans serviced for others) at period end (1) $16,911,325 $16,218,613 $15,582,911 $23,588,345 $22,978,750
Mortgage servicing rights, recorded at fair value, at period end 145,800 168,162 148,097 261,034 219,254
Notional value of rate lock commitments, at period end 823,000 622,906 800,162 992,025 1,069,145

(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):

3/31/2016 12/31/2015 9/30/2015 6/30/2015 3/31/2015
Amount % of Total Amount % of Total Amount % of Total Amount % of Total Amount % of Total
Commercial-related credits:
Commercial loans $3,509,604 36% $3,616,286 37% $3,440,632 37% $3,354,889 37% $3,258,652 37%
Commercial loans collateralized by assignment of lease payments (lease loans) 1,774,104 18 1,779,072 18 1,693,540 18 1,690,866 18 1,628,031 18
Commercial real estate 2,831,814 28 2,695,676 27 2,580,009 27 2,539,991 28 2,525,640 28
Construction real estate 310,278 3 252,060 3 255,620 3 189,599 2 184,105 2
Total commercial-related credits 8,425,800 85 8,343,094 85 7,969,801 85 7,775,345 85 7,596,428 85
Other loans:
Residential real estate 677,791 7 628,169 6 607,171 6 533,118 6 505,558 5
Indirect vehicle 432,915 4 384,095 4 345,731 4 303,777 3 273,105 3
Home equity 207,079 2 216,573 2 223,173 2 230,478 3 241,078 3
Consumer loans 77,318 1 80,661 1 87,612 1 86,463 1 77,645 1
Total other loans 1,395,103 14 1,309,498 13 1,263,687 13 1,153,836 13 1,097,386 12
Total loans, excluding purchased credit-impaired loans 9,820,903 99 9,652,592 98 9,233,488 98 8,929,181 98 8,693,814 97
Purchased credit-impaired loans 140,445 1 141,406 2 155,693 2 164,775 2 227,514 3
Total loans $9,961,348 100% $9,793,998 100% $9,389,181 100% $9,093,956 100% $8,921,328 100%

Our loan balances, excluding purchased credit-impaired loans, increased $168.3 million (+1.7%, or +7.0% annualized) during the first quarter of 2016. Commercial loan balances decreased due to seasonal borrowings of approximately $100 million that were outstanding at December 31, 2015 and repaid in the first 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.

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):

1Q16 4Q15 3Q15 2Q15 1Q15
Amount % of Total Amount % of Total Amount % of Total Amount % of Total Amount % of Total
Commercial-related credits:
Commercial loans $3,531,441 36% $3,492,161 37% $3,372,279 37% $3,309,519 37% $3,190,755 36%
Commercial loans collateralized by assignment of lease payments (lease loans) 1,754,558 18 1,708,404 18 1,674,939 18 1,634,583 18 1,647,761 18
Commercial real estate 2,734,148 28 2,627,004 28 2,568,539 28 2,522,473 28 2,538,995 29
Construction real estate 276,797 3 274,188 2 210,506 2 191,935 2 191,257 2
Total commercial-related credits 8,296,944 85 8,101,757 85 7,826,263 85 7,658,510 85 7,568,768 85
Other loans:
Residential real estate 640,231 7 612,275 6 566,115 6 512,766 6 493,366 5
Indirect vehicle 404,473 4 365,744 4 325,323 4 286,107 3 267,265 3
Home equity 210,678 2 219,440 2 226,365 2 233,867 3 246,537 3
Consumer loans 80,569 1 83,869 1 85,044 1 76,189 1 72,374 1
Total other loans 1,335,951 14 1,281,328 13 1,202,847 13 1,108,929 13 1,079,542 12
Total loans, excluding purchased credit-impaired loans 9,632,895 99 9,383,085 98 9,029,110 98 8,767,439 98 8,648,310 97
Purchased credit-impaired loans 139,451 1 154,562 2 156,309 2 202,374 2 240,376 3
Total loans $9,772,346 100% $9,537,647 100% $9,185,419 100% $8,969,813 100% $8,888,686 100%

Our average loan balances, excluding purchased credit-impaired loans, increased $249.8 million (+2.7%, or +10.7% annualized) during the first 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):

3/31/2016 12/31/2015 9/30/2015 6/30/2015 3/31/2015
Non-performing loans:
Non-accrual loans (1) $93,602 $98,065 $92,302 $91,943 $81,571
Loans 90 days or more past due, still accruing interest 1,112 6,596 4,275 6,112 1,707
Total non-performing loans 94,714 104,661 96,577 98,055 83,278
Other real estate owned 28,309 31,553 29,587 28,517 21,839
Repossessed assets 187 81 216 78 160
Total non-performing assets $123,210 $136,295 $126,380 $126,650 $105,277
Potential problem loans (2) $110,193 $139,941 $122,966 $116,443 $107,703
Purchased credit-impaired loans $140,445 $141,406 $155,693 $164,775 $227,514
Total non-performing, potential problem and purchased credit-impaired loans $345,352 $386,008 $375,236 $379,273 $418,495
Total allowance for loan and lease losses $134,493 $128,140 $124,626 $120,070 $113,412
Accruing restructured loans (3) 27,269 26,991 20,120 16,875 16,874
Total non-performing loans to total loans 0.95% 1.07% 1.03% 1.08% 0.93%
Total non-performing assets to total assets 0.79 0.87 0.85 0.84 0.73
Allowance for loan and lease losses to non-performing loans 142.00 122.43 129.04 122.45 136.18

(1) Includes $24.0 million, $23.6 million, $21.4 million, $24.5 million and $25.5 million of restructured loans on non-accrual status at March 31, 2016, December 31, 2015, September 30, 2015, June 30, 2015 and March 31, 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 primarily of residential real estate and home equity 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):

3/31/2016 12/31/2015 9/30/2015 6/30/2015 3/31/2015
Commercial and lease $28,590 $37,076 $34,465 $31,053 $18,315
Commercial real estate 27,786 29,073 25,437 32,358 29,645
Construction real estate 337 337
Consumer related 38,338 38,512 36,675 34,307 34,981
Total non-performing loans $94,714 $104,661 $96,577 $98,055 $83,278

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):

3/31/2016 12/31/2015 9/30/2015 6/30/2015 3/31/2015
Balance at the beginning of quarter $31,553 $29,587 $28,517 $21,839 $19,198
Transfers in at fair value less estimated costs to sell 1,270 5,964 2,402 8,595 4,615
Fair value adjustments 45 (721) (565) (920) (922)
Net gains on sales of other real estate owned 592 977 45 258 34
Cash received upon disposition (5,151) (4,254) (812) (1,255) (1,086)
Balance at the end of quarter $28,309 $31,553 $29,587 $28,517 $21,839

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

1Q16 4Q15 3Q15 2Q15 1Q15
Allowance for credit losses, balance at the beginning of period $131,508 $128,038 $124,130 $117,189 $114,057
Provision for credit losses - legacy 6,409 6,758 1,225 (600) (550)
Provision for credit losses - acquired Taylor Capital loan portfolio renewals 1,154 4,133 4,896 5,524
Charge-offs:
Commercial loans 713 710 1,657 57 569
Commercial loans collateralized by assignment of lease payments (lease loans) 574 685 1,980 100
Commercial real estate 352 1,251 170 108 2,034
Construction real estate 23 5 3 3
Residential real estate 368 261 292 318 579
Home equity 238 407 358 276 444
Indirect vehicle 931 898 581 627 874
Consumer loans 412 550 467 500 424
Total charge-offs 3,588 4,785 5,510 1,989 4,927
Recoveries:
Commercial loans 380 235 456 816 242
Commercial loans collateralized by assignment of lease payments (lease loans) 50 12 11 340 749
Commercial real estate 594 385 2,402 2,561 1,375
Construction real estate 27 19 216 35 2
Residential real estate 24 98 337 8 72
Home equity 318 132 186 160 101
Indirect vehicle 463 499 334 545 475
Consumer loans 393 117 118 169 69
Total recoveries 2,249 1,497 4,060 4,634 3,085
Total net charge-offs (recoveries) 1,339 3,288 1,450 (2,645) 1,842
Allowance for credit losses 137,732 131,508 128,038 124,130 117,189
Allowance for unfunded credit commitments (3,239) (3,368) (3,412) (4,060) (3,777)
Allowance for loan and lease losses $134,493 $128,140 $124,626 $120,070 $113,412
Total loans, excluding loans held for sale $9,961,348 $9,793,998 $9,389,181 $9,093,956 $8,921,328
Average loans, excluding loans held for sale 9,772,346 9,537,647 9,185,419 8,969,813 8,888,686
Ratio of allowance for loan and lease losses to total loans, excluding loans held for sale 1.35% 1.31% 1.33% 1.32% 1.27%
Net loan charge-offs (recoveries) to average loans, excluding loans held for sale (annualized) 0.06 0.14 0.06 (0.12) 0.08

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

3/31/2016 12/31/2015 9/30/2015 6/30/2015 3/31/2015
Commercial related loans:
General reserve $98,001 $94,164 $93,903 $89,642 $88,425
Specific reserve 20,995 16,173 13,683 11,303 5,658
Consumer related reserve 15,497 17,803 17,040 19,125 19,329
Total allowance for loan and lease losses $134,493 $128,140 $124,626 $120,070 $113,412

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 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

Changes in the purchase accounting discount for loans acquired in the Taylor Capital merger were as follows for the three months ended December 31, 2015 (in thousands):

Non-Accretable Discount - PCI Loans Accretable Discount - PCI Loans Accretable Discount - Non-PCI Loans Total
Balance at beginning of period $19,747 $9,368 $40,961 $70,076
Recoveries 1,354 1,354
Accretion (3,510) (6,193) (9,703)
Transfer (6,440) 6,440
Balance at end of period $14,661 $12,298 $34,768 $61,727

The $3.6 million and $6.4 million purchase accounting discount transfer from non-accretable discount on purchased credit-impaired loans to accretable discount for the three months ended March 31, 2016 and December 31, 2015, 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):

3/31/2016 12/31/2015 9/30/2015 6/30/2015 3/31/2015
Securities available for sale:
Fair value
Government sponsored agencies and enterprises $64,762 $64,611 $65,461 $65,485 $66,070
States and political subdivisions 398,024 396,367 399,274 395,912 403,628
Mortgage-backed securities 834,559 893,656 847,426 902,017 856,933
Corporate bonds 224,530 219,628 228,251 246,468 252,042
Equity securities 10,969 10,761 10,826 10,669 10,751
Total fair value $1,532,844 $1,585,023 $1,551,238 $1,620,551 $1,589,424
Amortized cost
Government sponsored agencies and enterprises $63,600 $63,805 $64,008 $64,211 $64,411
States and political subdivisions 371,006 373,285 379,015 380,221 381,704
Mortgage-backed securities 820,825 888,325 834,791 890,334 841,727
Corporate bonds 225,657 222,784 228,711 245,506 250,543
Equity securities 10,814 10,757 10,701 10,644 10,587
Total amortized cost $1,491,902 $1,558,956 $1,517,226 $1,590,916 $1,548,972
Unrealized gain, net
Government sponsored agencies and enterprises $1,162 $806 $1,453 $1,274 $1,659
States and political subdivisions 27,018 23,082 20,259 15,691 21,924
Mortgage-backed securities 13,734 5,331 12,635 11,683 15,206
Corporate bonds (1,127) (3,156) (460) 962 1,499
Equity securities 155 4 125 25 164
Total unrealized gain, net $40,942 $26,067 $34,012 $29,635 $40,452
Securities held to maturity, at amortized cost:
States and political subdivisions $986,340 $1,016,519 $1,002,963 $974,032 $764,931
Mortgage-backed securities 205,570 214,291 221,889 229,595 235,928
Total amortized cost $1,191,910 $1,230,810 $1,224,852 $1,203,627 $1,000,859

DEPOSIT MIX

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

3/31/2016 12/31/2015 9/30/2015 6/30/2015 3/31/2015
Amount % of
Total
Amount % of
Total
Amount % of
Total
Amount % of
Total
Amount % of
Total
Low cost deposits:
Noninterest bearing deposits $4,667,410 40% $4,627,184 40% $4,434,067 39% $4,378,005 40% $4,290,499 39%
Money market, NOW and interest bearing deposits 4,048,054 35 4,144,633 36 4,129,414 37 3,842,264 35 4,002,818 36
Savings 991,300 9 974,555 8 953,746 8 970,875 9 969,560 9
Total low cost deposits 9,706,764 84 9,746,372 84 9,517,227 84 9,191,144 84 9,262,877 84
Certificates of deposit:
Certificates of deposit 1,255,457 11 1,244,292 11 1,279,842 12 1,261,843 12 1,354,633 12
Brokered certificates of deposit 571,605 5 514,551 5 457,509 4 408,827 4 401,991 4
Total certificates of deposit 1,827,062 16 1,758,843 16 1,737,351 16 1,670,670 16 1,756,624 16
Total deposits $11,533,826 100% $11,505,215 100% $11,254,578 100% $10,861,814 100% $11,019,501 100%

Non-interest bearing deposits grew by $40.2 million (+0.9%, or +3.5% annualized) during the first quarter of 2016 and comprised 40% of total deposits at quarter-end. Total low cost deposits decreased $39.6 million (-0.4%, or -1.6% annualized) to $9.7 billion at March 31, 2016 compared to December 31, 2015 and represented 84% of total deposits at quarter-end.

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

1Q16 4Q15 3Q15 2Q15 1Q15
Amount % of
Total
Amount % of
Total
Amount % of
Total
Amount % of
Total
Amount % of
Total
Low cost deposits:
Noninterest bearing deposits $4,606,008 40% $4,617,076 40% $4,428,065 39% $4,273,931 39% $4,199,948 38%
Money market, NOW and interest bearing deposits 4,109,150 36 4,214,099 37 4,119,625 36 3,940,201 36 3,937,707 36
Savings 984,019 9 959,049 8 965,060 9 972,327 9 952,345 9
Total low cost deposits 9,699,177 85 9,790,224 85 9,512,750 84 9,186,459 84 9,090,000 83
Certificates of deposit:
Certificates of deposit 1,237,971 11 1,245,947 11 1,304,516 12 1,302,031 12 1,420,320 13
Brokered certificates of deposit 534,910 4 492,839 4 427,649 4 412,517 4 476,245 4
Total certificates of deposit 1,772,881 15 1,738,786 15 1,732,165 16 1,714,548 16 1,896,565 17
Total deposits $11,472,058 100% $11,529,010 100% $11,244,915 100% $10,901,007 100% $10,986,565 100%

CAPITAL

Tangible book value per common share was $17.04 at March 31, 2016 compared to $16.53 at December 31, 2015 and $16.08 at March 31, 2015.

Our regulatory capital ratios remain strong. MB Financial Bank, N.A. (the "Bank") was categorized as “well capitalized” at March 31, 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 requisite regulatory approvals for the pending MB Financial-American Chartered merger might not be obtained, or may take longer to obtain than expected; (3) the credit risks of lending activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses, which could necessitate additional provisions for loan losses, resulting both from originated loans and loans acquired from other financial institutions; (4) competitive pressures among depository institutions; (5) interest rate movements and their impact on customer behavior, net interest margin and the value of our mortgage servicing rights; (6) 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; (7) the impact of repricing and competitors’ pricing initiatives on loan and deposit products; (8) fluctuations in real estate values; (9) the ability to adapt successfully to technological changes to meet customers’ needs and developments in the market place; (10) 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; (11) our ability to realize the residual values of its direct finance, leveraged and operating leases; (12) the ability to access cost-effective funding; (13) changes in financial markets; (14) changes in economic conditions in general and in the Chicago metropolitan area in particular; (15) the costs, effects and outcomes of litigation; (16) 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; (17) changes in accounting principles, policies or guidelines; (18) our future acquisitions of other depository institutions or lines of business; and (19) 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)

3/31/2016 12/31/2015 9/30/2015 6/30/2015 3/31/2015
ASSETS
Cash and due from banks $271,732 $307,869 $234,220 $290,266 $248,840
Interest earning deposits with banks 113,785 73,572 66,025 144,154 52,212
Total cash and cash equivalents 385,517 381,441 300,245 434,420 301,052
Federal funds sold 5
Investment securities:
Securities available for sale, at fair value 1,532,844 1,585,023 1,551,238 1,620,551 1,589,424
Securities held to maturity, at amortized cost 1,191,910 1,230,810 1,224,852 1,203,627 1,000,859
Non-marketable securities - FHLB and FRB Stock 121,750 114,233 91,400 111,400 87,677
Total investment securities 2,846,504 2,930,066 2,867,490 2,935,578 2,677,960
Loans held for sale 632,196 744,727 676,020 801,343 686,838
Loans:
Total loans, excluding purchased credit-impaired loans 9,820,903 9,652,592 9,233,488 8,929,181 8,693,814
Purchased credit-impaired loans 140,445 141,406 155,693 164,775 227,514
Total loans 9,961,348 9,793,998 9,389,181 9,093,956 8,921,328
Less: Allowance for loan and lease losses 134,493 128,140 124,626 120,070 113,412
Net loans 9,826,855 9,665,858 9,264,555 8,973,886 8,807,916
Lease investments, net 216,046 211,687 184,223 167,966 159,191
Premises and equipment, net 238,578 236,013 234,115 234,651 234,077
Cash surrender value of life insurance 137,807 136,953 136,089 135,237 134,401
Goodwill 725,068 725,070 711,521 711,521 711,521
Other intangibles 43,186 44,812 37,520 34,979 36,488
Mortgage servicing rights, at fair value 145,800 168,162 148,097 261,034 219,254
Other real estate owned, net 28,309 31,553 29,587 28,517 21,839
Other real estate owned related to FDIC transactions 10,397 10,717 13,825 13,867 17,890
Other assets 339,390 297,948 346,814 285,190 319,883
Total assets $15,575,653 $15,585,007 $14,950,101 $15,018,194 $14,328,310
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits:
Noninterest bearing $4,667,410 $4,627,184 $4,434,067 $4,378,005 $4,290,499
Interest bearing 6,866,416 6,878,031 6,820,511 6,483,809 6,729,002
Total deposits 11,533,826 11,505,215 11,254,578 10,861,814 11,019,501
Short-term borrowings 884,101 1,005,737 940,529 1,382,635 615,231
Long-term borrowings 439,615 400,274 95,175 89,639 85,477
Junior subordinated notes issued to capital trusts 185,820 186,164 186,068 185,971 185,874
Accrued expenses and other liabilities 409,406 400,333 410,523 420,396 363,934
Total liabilities 13,452,768 13,497,723 12,886,873 12,940,455 12,270,017
Stockholders' Equity
Preferred stock 115,280 115,280 115,280 115,280 115,280
Common stock 756 756 756 754 754
Additional paid-in capital 1,284,438 1,280,870 1,277,348 1,273,333 1,268,851
Retained earnings 756,272 731,812 702,789 677,246 651,178
Accumulated other comprehensive income 24,687 15,777 20,968 18,778 26,101
Treasury stock (59,863) (58,504) (55,258) (9,035) (5,277)
Controlling interest stockholders' equity 2,121,570 2,085,991 2,061,883 2,076,356 2,056,887
Noncontrolling interest 1,315 1,293 1,345 1,383 1,406
Total stockholders' equity 2,122,885 2,087,284 2,063,228 2,077,739 2,058,293
Total liabilities and stockholders' equity $15,575,653 $15,585,007 $14,950,101 $15,018,194 $14,328,310

MB FINANCIAL, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(Dollars in thousands, except per share data) 1Q16 4Q15 3Q15 2Q15 1Q15
Interest income:
Loans:
Taxable $104,923 $106,137 $100,573 $98,768 $98,846
Nontaxable 2,586 2,602 2,283 2,259 2,174
Investment securities:
Taxable 9,566 9,708 9,655 10,002 9,934
Nontaxable 10,776 10,969 10,752 10,140 9,113
Federal funds sold 1
Other interest earning accounts 141 110 89 57 62
Total interest income 127,992 129,527 123,352 121,226 120,129
Interest expense:
Deposits 5,622 5,357 5,102 4,554 4,645
Short-term borrowings 721 385 395 355 277
Long-term borrowings and junior subordinated notes 2,345 2,016 1,886 1,844 1,812
Total interest expense 8,688 7,758 7,383 6,753 6,734
Net interest income 119,304 121,769 115,969 114,473 113,395
Provision for credit losses 7,563 6,758 5,358 4,296 4,974
Net interest income after provision for credit losses 111,741 115,011 110,611 110,177 108,421
Non-interest income:
Lease financing revenue, net 19,046 15,937 20,000 15,564 25,080
Mortgage banking revenue 27,482 26,542 30,692 35,648 24,544
Commercial deposit and treasury management fees 11,878 11,711 11,472 11,062 11,038
Trust and asset management fees 7,950 6,077 6,002 5,752 5,714
Card fees 3,525 3,651 3,335 4,409 3,927
Capital markets and international banking service fees 3,227 2,355 2,357 1,508 1,928
Consumer and other deposit service fees 3,025 3,440 3,499 3,260 3,083
Brokerage fees 1,158 1,252 1,281 1,543 1,678
Loan service fees 1,752 1,890 1,531 1,353 1,485
Increase in cash surrender value of life insurance 854 864 852 836 839
Net (loss) gain on investment securities (3) 371 (84) (460)
Net (loss) gain on sale of assets (48) 1 (7) 4
Other operating income 1,844 1,909 858 2,105 2,408
Total non-interest income 81,693 75,625 82,251 82,949 81,268
Non-interest expense:
Salaries and employee benefits expense 85,591 84,709 87,891 86,145 84,786
Occupancy and equipment expense 13,260 12,935 12,458 12,177 12,940
Computer services and telecommunication expense 9,055 8,445 8,567 8,537 8,904
Advertising and marketing expense 2,878 2,551 2,578 2,497 2,446
Professional and legal expense 2,589 4,169 1,801 2,413 2,670
Other intangible amortization expense 1,626 1,546 1,542 1,509 1,518
Branch exit and facilities impairment charges 44 616 70 438 7,391
Net (gain) loss recognized on other real estate owned and other expense (346) (729) 577 724 896
Prepayment fees on interest bearing liabilities 85
Other operating expenses 21,103 12,989 18,782 18,297 18,284
Total non-interest expense 135,800 127,231 134,266 132,737 139,920
Income before income taxes 57,634 63,405 58,596 60,389 49,769
Income tax expense 18,520 19,798 18,318 19,437 15,658
Net income 39,114 43,607 40,278 40,952 34,111
Dividends on preferred shares 2,000 2,000 2,000 2,000 2,000
Net income available to common stockholders $37,114 $41,607 $38,278 $38,952 $32,111


1Q16 4Q15 3Q15 2Q15 1Q15
Common share data:
Basic earnings per common share $0.51 $0.57 $0.52 $0.52 $0.43
Diluted earnings per common share 0.50 0.56 0.51 0.52 0.43
Weighted average common shares outstanding for basic earnings per common share 73,330,731 73,296,602 74,297,281 74,596,925 74,567,104
Weighted average common shares outstanding for diluted earnings per common share 73,966,935 73,953,165 75,029,827 75,296,029 75,164,716
Common shares outstanding (at end of period) 73,639,487 73,678,329 73,776,196 75,073,292 75,122,076


Selected Financial Data:
1Q16 4Q15 3Q15 2Q15 1Q15
Performance Ratios:
Annualized return on average assets 1.02% 1.13% 1.06% 1.12% 0.96%
Annualized operating return on average assets (1) 1.09 1.06 1.06 1.14 1.11
Annualized return on average common equity 7.52 8.48 7.75 8.02 6.78
Annualized operating return on average common equity (1) 8.08 7.86 7.75 8.19 7.87
Annualized cash return on average tangible common equity (2) 12.47 13.97 12.74 13.21 11.31
Annualized cash operating return on average tangible common equity (3) 13.37 12.97 12.74 13.47 13.09
Net interest rate spread 3.63 3.72 3.60 3.72 3.80
Cost of funds (4) 0.27 0.24 0.23 0.22 0.23
Efficiency ratio (5) 63.49 63.95 65.35 64.26 65.29
Annualized net non-interest expense to average assets (6) 1.31 1.44 1.36 1.32 1.40
Core non-interest income to revenues (7) 39.38 36.91 40.35 40.80 40.66
Net interest margin 3.57 3.64 3.52 3.63 3.73
Tax equivalent effect 0.22 0.22 0.21 0.21 0.20
Net interest margin - fully tax equivalent basis (8) 3.79 3.86 3.73 3.84 3.93
Loans to deposits 86.37 85.13 83.43 83.72 80.96
Asset Quality Ratios:
Non-performing loans (9) to total loans 0.95% 1.07% 1.03% 1.08% 0.93%
Non-performing assets (9) to total assets 0.79 0.87 0.85 0.84 0.73
Allowance for loan and lease losses to non-performing loans (9) 142.00 122.43 129.04 122.45 136.18
Allowance for loan and lease losses to total loans 1.35 1.31 1.33 1.32 1.27
Net loan (recoveries) charge-offs to average loans (annualized) 0.06 0.14 0.06 (0.12) 0.08
Capital Ratios:
Tangible equity to tangible assets (10) 9.24% 8.99% 9.34% 9.41% 9.73%
Tangible common equity to tangible assets (11) 8.46 8.21 8.53 8.60 8.89
Tangible common equity to risk weighted assets (12) 9.56 9.34 9.69 10.02 10.09
Total capital (to risk-weighted assets) (13) 12.66 12.54 12.94 13.07 13.22
Tier 1 capital (to risk-weighted assets) (13) 11.62 11.54 11.92 12.06 12.24
Common equity tier 1 capital (to risk-weighted assets) (13) 9.34 9.27 9.56 9.66 9.79
Tier 1 capital (to average assets) (13) 10.38 10.40 10.43 10.69 10.80
Per Share Data:
Book value per common share (14) $27.26 $26.77 $26.40 $26.14 $25.86
Less: goodwill and other intangible assets, net of benefit, per common share 10.22 10.24 9.97 9.78 9.78
Tangible book value per common share (15) $17.04 $16.53 $16.43 $16.36 $16.08
Cash dividends per common share $0.17 $0.17 $0.17 $0.17 $0.14

(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 core (or 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, 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 risk-weighted assets and Tier 1 common capital 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, merger related and repositioning expenses and increase 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.

In addition, management believes that presenting the ratio of Tier 1 common equity to risk-weighted assets is useful for assessing our capital strength and for peer comparison purposes. The other measures exclude the acquisition-related goodwill and other intangible assets, net of tax benefit, in determining tangible assets, tangible equity, tangible common equity and average tangible common equity and exclude other intangible amortization expense, net of tax benefit, in determining net cash flow available to common stockholders. Management believes the presentation of these other financial measures, excluding the impact of such items, provides useful supplemental information that is helpful in understanding our financial results, as they provide a method to assess management’s success in utilizing our tangible capital, as well as our capital strength. Management also believes that providing measures that exclude balances of acquisition-related goodwill and other intangible assets, which are subjective components of valuation, facilitates the comparison of our performance with the performance of our peers. In addition, management believes that these are standard financial measures used in the banking industry to evaluate performance.

The non-GAAP disclosures contained herein should not be viewed as substitutes for the results determined to be in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

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—First Quarter Results.”

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

3/31/2016 12/31/2015 9/30/2015 6/30/2015 3/31/2015
Stockholders' equity - as reported $2,122,885 $2,087,284 $2,063,228 $2,077,739 $2,058,293
Less: goodwill 725,068 725,070 711,521 711,521 711,521
Less: other intangible assets, net of tax benefit 28,071 29,128 24,388 22,736 23,717
Tangible equity $1,369,746 $1,333,086 $1,327,319 $1,343,482 $1,323,055

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

3/31/2016 12/31/2015 9/30/2015 6/30/2015 3/31/2015
Total assets - as reported $15,575,653 $15,585,007 $14,950,101 $15,018,194 $14,328,310
Less: goodwill 725,068 725,070 711,521 711,521 711,521
Less: other intangible assets, net of tax benefit 28,071 29,128 24,388 22,736 23,717
Tangible assets $14,822,514 $14,830,809 $14,214,192 $14,283,937 $13,593,072

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

3/31/2016 12/31/2015 9/30/2015 6/30/2015 3/31/2015
Common stockholders' equity - as reported $2,007,605 $1,972,004 $1,947,948 $1,962,459 $1,943,013
Less: goodwill 725,068 725,070 711,521 711,521 711,521
Less: other intangible assets, net of tax benefit 28,071 29,128 24,388 22,736 23,717
Tangible common equity $1,254,466 $1,217,806 $1,212,039 $1,228,202 $1,207,775

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

1Q16 4Q15 3Q15 2Q15 1Q15
Average common stockholders' equity - as reported $1,984,379 $1,945,772 $1,958,947 $1,947,231 $1,922,151
Less: average goodwill 725,070 711,669 711,521 711,521 711,521
Less: average other intangible assets, net of tax benefit 28,511 23,826 23,900 23,092 24,157
Average tangible common equity $1,230,798 $1,210,277 $1,223,526 $1,212,618 $1,186,473

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

1Q16 4Q15 3Q15 2Q15 1Q15
Net income available to common stockholders - as reported $37,114 $41,607 $38,278 $38,952 $32,111
Add: other intangible amortization expense, net of tax benefit 1,057 1,005 1,002 981 987
Net cash flow available to common stockholders $38,171 $42,612 $39,280 $39,933 $33,098

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

1Q16 4Q15 3Q15 2Q15 1Q15
Net income - as reported $39,114 $43,607 $40,278 $40,952 $34,111
Less non-core items:
Net (loss) gain on investment securities (3) 371 (84) (460)
Net (loss) gain on sale of other assets (48) 1 (7) 4
Merger related and repositioning expenses (3,287) 4,186 (389) (1,234) (8,069)
Prepayment fees on interest bearing liabilities (85)
Total non-core items (3,335) 4,183 (17) (1,325) (8,610)
Income tax expense on non-core items (577) 1,140 (6) (526) (3,417)
Non-core items, net of tax (2,758) 3,043 (11) (799) (5,193)
Operating earnings 41,872 40,564 40,289 41,751 39,304
Dividends on preferred shares 2,000 2,000 2,000 2,000 2,000
Operating earnings available to common stockholders $39,872 $38,564 $38,289 $39,751 $37,304
Diluted operating earnings per common share $0.54 $0.52 $0.51 $0.53 $0.50
Weighted average common shares outstanding for diluted operating earnings per common share 73,966,935 73,953,165 75,029,827 75,296,029 75,164,716

Efficiency Ratio Calculation (Dollars in Thousands)

1Q16 4Q15 3Q15 2Q15 1Q15
Non-interest expense $135,800 $127,231 $134,266 $132,737 $139,920
Less merger related and repositioning expenses 3,287 (4,186) 389 1,234 8,069
Less prepayment fees on interest bearing liabilities 85
Less increase (decrease) in market value of assets held in trust for deferred compensation 8 565 (872) 7 306
Non-interest expense - as adjusted $132,505 $130,852 $134,749 $131,496 $131,460
Net interest income $119,304 $121,769 $115,969 $114,473 $113,395
Tax equivalent adjustment 7,195 7,307 7,019 6,676 6,078
Net interest income on a fully tax equivalent basis 126,499 129,076 122,988 121,149 119,473
Plus non-interest income 81,693 75,625 82,251 82,949 81,268
Plus tax equivalent adjustment on the increase in cash surrender value of life insurance 460 465 459 450 452
Less net (loss) gain on investment securities (3) 371 (84) (460)
Less net (loss) gain on sale of other assets (48) 1 (7) 4
Less increase (decrease) in market value of assets held in trust for deferred compensation 8 565 (872) 7 306
Net interest income plus non-interest income - as adjusted $208,692 $204,604 $206,198 $204,632 $201,343
Efficiency ratio 63.49% 63.95% 65.35% 64.26% 65.29%
Efficiency ratio (without adjustments) 67.56% 64.46% 67.74% 67.24% 71.88%

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

1Q16 4Q15 3Q15 2Q15 1Q15
Non-interest expense $135,800 $127,231 $134,266 $132,737 $139,920
Less merger related and repositioning expenses 3,287 (4,186) 389 1,234 8,069
Less prepayment fees on interest bearing liabilities 85
Less increase (decrease) in market value of assets held in trust for deferred compensation 8 565 (872) 7 306
Non-interest expense - as adjusted 132,505 130,852 134,749 131,496 131,460
Non-interest income 81,693 75,625 82,251 82,949 81,268
Less net (loss) gain on investment securities (3) 371 (84) (460)
Less net (loss) gain on sale of other assets (48) 1 (7) 4
Less increase (decrease) in market value of assets held in trust for deferred compensation 8 565 (872) 7 306
Non-interest income - as adjusted 81,733 75,063 82,751 83,033 81,418
Less tax equivalent adjustment on the increase in cash surrender value of life insurance 460 465 459 450 452
Net non-interest expense $50,312 $55,324 $51,539 $48,013 $49,590
Average assets $15,487,565 $15,244,633 $15,059,429 $14,631,999 $14,363,244
Annualized net non-interest expense to average assets 1.31% 1.44% 1.36% 1.32% 1.40%
Annualized net non-interest expense to average assets (without adjustments) 1.41% 1.34% 1.37% 1.36% 1.66%

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

1Q16 4Q15 3Q15 2Q15 1Q15
Non-interest income $81,693 $75,625 $82,251 $82,949 $81,268
Plus tax equivalent adjustment on the increase in cash surrender value of life insurance 460 465 459 450 452
Less net (loss) gain on investment securities (3) 371 (84) (460)
Less net (loss) gain on sale of other assets (48) 1 (7) 4
Less increase (decrease) in market value of assets held in trust for deferred compensation 8 565 (872) 7 306
Non-interest income - as adjusted $82,193 $75,528 $83,210 $83,483 $81,870
Net interest income $119,304 $121,769 $115,969 $114,473 $113,395
Tax equivalent adjustment 7,195 7,307 7,019 6,676 6,078
Net interest income on a fully tax equivalent basis 126,499 129,076 122,988 121,149 119,473
Plus non-interest income 81,693 75,625 82,251 82,949 81,268
Plus tax equivalent adjustment on the increase in cash surrender value of life insurance 460 465 459 450 452
Less net (loss) gain on investment securities (3) 371 (84) (460)
Less net (loss) gain on sale of other assets (48) 1 (7) 4
Less increase (decrease) in market value of assets held in trust for deferred compensation 8 565 (872) 7 306
Total revenue - as adjusted and on a fully tax equivalent basis $208,692 $204,604 $206,198 $204,632 $201,343
Total revenue - unadjusted $200,997 $197,394 $198,220 $197,422 $194,663
Core non-interest income to revenues ratio 39.38% 36.91% 40.35% 40.80% 40.66%
Non-interest income to revenues ratio (without adjustments) 40.64% 38.31% 41.49% 42.02% 41.75%

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):

1Q16 1Q15 4Q15
Average
Balance
Interest Yield/
Rate
Average
Balance
Interest Yield/
Rate
Average
Balance
Interest Yield/
Rate
Interest Earning Assets:
Loans held for sale $661,021 $5,966 3.61% $658,169 $5,785 3.52% $681,682 $6,276 3.68%
Loans (1) (2) (3):
Commercial-related credits
Commercial 3,531,441 37,357 4.18 3,190,755 32,623 4.09 3,492,161 35,890 4.02
Commercial loans collateralized by assignment of lease payments 1,754,558 16,577 3.78 1,647,761 15,438 3.75 1,708,404 15,901 3.72
Real estate commercial 2,734,148 28,039 4.06 2,538,995 27,548 4.34 2,627,004 27,759 4.13
Real estate construction 276,797 2,902 4.15 191,257 4,081 8.54 274,188 3,736 5.33
Total commercial-related credits 8,296,944 84,875 4.05 7,568,768 79,690 4.21 8,101,757 83,286 4.02
Other loans
Real estate residential 640,231 5,695 3.56 493,366 5,028 4.08 612,275 5,490 3.59
Home equity 210,678 2,033 3.88 246,537 2,468 4.06 219,440 2,142 3.87
Indirect 404,473 4,758 4.73 267,265 3,485 5.29 365,744 4,403 4.78
Consumer loans 80,569 794 3.97 72,374 797 4.47 83,869 777 3.67
Total other loans 1,335,951 13,280 4.00 1,079,542 11,778 4.42 1,281,328 12,812 3.97
Total loans, excluding purchased credit-impaired loans 9,632,895 98,155 4.10 8,648,310 91,468 4.29 9,383,085 96,098 4.06
Purchased credit-impaired loans 139,451 4,780 13.75 240,376 4,937 8.33 154,562 7,766 19.93
Total loans 9,772,346 102,935 4.24 8,888,686 96,405 4.40 9,537,647 103,864 4.32
Taxable investment securities 1,524,583 9,566 2.51 1,556,530 9,934 2.55 1,510,047 9,708 2.57
Investment securities exempt from federal income taxes (3) 1,362,468 16,579 4.87 1,126,133 14,021 4.98 1,383,592 16,875 4.88
Federal funds sold 42 1.00 16 100 1 1.00
Other interest earning deposits 113,748 141 0.50 102,346 62 0.25 141,891 110 0.31
Total interest earning assets $13,434,208 $135,187 4.05% $12,331,880 $126,207 4.15% $13,254,959 $136,834 4.10%
Non-interest earning assets 2,053,357 2,031,364 1,989,674
Total assets $15,487,565 $14,363,244 $15,244,633
Interest Bearing Liabilities:
Core funding:
Money market, NOW and interest bearing deposits $4,109,150 $2,086 0.20% $3,937,707 $1,595 0.16% $4,214,099 $1,999 0.19%
Savings deposits 984,019 159 0.06 952,345 120 0.05 959,049 123 0.05
Certificates of deposit 1,237,971 1,413 0.46 1,420,320 1,452 0.42 1,245,947 1,431 0.46
Customer repurchase agreements 190,114 94 0.20 245,875 119 0.20 230,412 115 0.20
Total core funding 6,521,254 3,752 0.23 6,556,247 3,286 0.20 6,649,507 3,668 0.22
Wholesale funding:
Brokered certificates of deposit (includes fee expense) 534,910 1,964 1.48 476,245 1,478 1.26 492,839 1,804 1.45
Other borrowings 1,327,274 2,972 0.89 731,688 1,970 1.08 1,031,301 2,286 0.87
Total wholesale funding 1,862,184 4,936 1.07 1,207,933 3,448 1.12 1,524,140 4,090 1.06
Total interest bearing liabilities $8,383,438 $8,688 0.42% $7,764,180 $6,734 0.35% $8,173,647 $7,758 0.38%
Non-interest bearing deposits 4,606,008 4,199,948 4,617,076
Other non-interest bearing liabilities 398,460 361,685 392,858
Stockholders' equity 2,099,659 2,037,431 2,061,052
Total liabilities and stockholders' equity $15,487,565 $14,363,244 $15,244,633
Net interest income/interest rate spread (4) $126,499 3.63% $119,473 3.80% $129,076 3.72%
Taxable equivalent adjustment 7,195 6,078 7,307
Net interest income, as reported $119,304 $113,395 $121,769
Net interest margin (5) 3.57% 3.73% 3.64%
Tax equivalent effect 0.22% 0.20% 0.22%
Net interest margin on a fully tax equivalent basis (5) 3.79% 3.93% 3.86%

(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 March 31, 2016, March 31, 2015 and December 31, 2015 (dollars in thousands):

1Q16 1Q15 4Q15
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 $9,772,346 $102,935 4.24% $8,888,686 $96,405 4.40% $9,537,647 $103,864 4.32%
Less acquisition accounting discount accretion on non-PCI loans (32,293) 4,950 (57,802) 7,948 (37,865) 6,193
Less acquisition accounting discount accretion on PCI loans (25,696) 2,403 (35,092) 628 (28,037) 3,510
Total loans, excluding acquisition accounting discount accretion on Taylor Capital loans $9,830,335 $95,582 3.91% $8,981,580 $87,829 3.97% $9,603,549 $94,161 3.89%
Net interest margin on a fully tax equivalent basis, excluding acquisition accounting discount accretion on Taylor Capital loans:
Total interest earning assets, as reported $13,434,208 $126,499 3.79% $12,331,880 $119,473 3.93% $13,254,959 $129,076 3.86%
Less acquisition accounting discount accretion on non-PCI loans (32,293) 4,950 (57,802) 7,948 (37,865) 6,193
Less acquisition accounting discount accretion on PCI loans (25,696) 2,403 (35,092) 628 (28,037) 3,510
Total interest earning assets/net interest margin on a fully tax equivalent basis, excluding acquisition accounting discount accretion on Taylor Capital loans $13,492,197 $119,146 3.55% $12,424,774 $110,897 3.62% $13,320,861 $119,373 3.56%

The table below reflects the impact that the loan discount accretion and provision for credit losses on Taylor Capital loans had on earnings for the three months ended March 31, 2016 and December 31, 2015 (dollars in thousands):

1Q16 4Q15
Acquisition accounting discount accretion on Taylor Capital loans $7,353 $9,703
Provision for credit losses on Taylor Capital loans 1,154
Earnings impact of discount accretion and merger related provision 6,199 9,703
Tax expense 2,460 3,850
Earnings impact of discount accretion and merger related provision, net of tax $3,739 $5,853

For Information at MB Financial, Inc. contact: Berry Allen - Investor Relations E-Mail: beallen@mbfinancial.com

Source:MB Financial