MB Financial 8-K Results of Operations and Financial Condition

EXHIBIT 99

MB Financial, Inc.

800 West Madison Street

Chicago, Illinois 60607

(888) 422-6562

NASDAQ:  MBFI

PRESS RELEASE

For Information at MB Financial, Inc. contact:

Jill York - Vice President and Chief Financial Officer

E-Mail: jyork@mbfinancial.com

FOR IMMEDIATE RELEASE

MB FINANCIAL, INC. REPORTS FIRST QUARTER 2015 RESULTS

CHICAGO, April 20, 2015 – MB Financial, Inc. (NASDAQ: MBFI), the holding company for MB Financial Bank, N.A., today announced 2015 first quarter net income available to common stockholders of $32.1 million, or $0.43 per diluted common share, compared to $34.1 million, or $0.45 per diluted common share, last quarter and $20.0 million, or $0.36 per diluted common share, in the first quarter a year ago.  

Highlights Include:

Operating Earnings Comparable to Prior Quarter and Up Significantly from One Year Ago

• Operating earnings, which we define as earnings excluding non-core items, were $39.3 million for the first quarter of 2015 compared to $39.6 million last quarter and $21.5 million in the first quarter a year ago. A table reconciling net income, as reported to operating earnings is set forth below and in the “Non-GAAP Financial Information” section.

• Annualized operating return on average assets increased to 1.11% for the first quarter of 2015 compared to 1.09% last quarter and 0.93% for the first quarter a year ago.

• Our net interest margin on a fully tax equivalent basis, excluding the accretion on loans acquired in the Taylor Capital merger ("the Merger") declined one basis point from the prior quarter and two basis points from the first quarter of 2014.

• Our core non-interest income grew from $79.4 million in the prior quarter to $81.4 million (+10.3% annualized) primarily as a result of higher leasing revenue. This increase was partially offset by lower mortgage revenue driven by a decline in the fair value of our mortgage servicing asset.

• Merger related expenses incurred in the first quarter of 2015 of $8.1 million were primarily related to branch exit charges on facilities we closed in connection with the Merger.

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The following table presents the calculation of operating earnings available to common stockholders:

	1Q15			4Q14			1Q14
(Dollars in thousands, except per share data)
Net income, as reported	$	34,111		$	36,125		$	19,969
Less non-core items:
Net (loss) gain on investment securities	(460		)	491			317
Net gain on sale of other assets	4			3,476			7
Merger related expenses	(8,069		)	(6,494		)	(680		)
Prepayment fees on interest bearing liabilities	(85		)	—			—
Loss on low to moderate income real estate investment	—			—			(2,028		)
Contribution to MB Financial Charitable Foundation	—			(3,250		)	—
Total non-core items	(8,610		)	(5,777		)	(2,384		)
Income tax expense on non-core items	(3,417		)	(2,314		)	(855		)
Non-core items, net of tax	(5,193		)	(3,463		)	(1,529		)
Operating earnings	39,304			39,588			21,498
Dividends on preferred shares	2,000			2,000			—
Operating earnings available to common stockholders	$	37,304		$	37,588		$	21,498
Diluted operating earnings per common share	$	0.50		$	0.50		$	0.39
Weighted average common shares outstanding for diluted earnings per common share	75,164,716			75,130,331			55,265,188
Annualized operating return on average assets	1.11		%	1.09		%	0.93		%

Balance Sheet Changes

• Loan balances, excluding purchased credit-impaired and covered loans, decreased $137.8 million (-1.6%) during the first quarter of 2015 primarily due to seasonality in our customer activity. The first quarter is often the softest quarter from a loan growth perspective. Notably, commercial loan growth has been strong subsequent to the Merger, with balances increasing $194.0 million (+6.3%) from September 30, 2014.

• Low cost deposits increased $290.5 million (+3.2%) during the first quarter of 2015 primarily due to strong non-interest bearing deposit flows. This growth allowed us to maintain our average cost of funds at 23 basis points during the first quarter of 2015 consistent with the prior quarter.

Credit Quality Metrics

• Non-performing loans decreased by $3.8 million and potential problem loans increased by $52.1 million from December 31, 2014. Potential problem loans increased from a very low level due to normal rotation in the portfolio.

• The ratio of non-performing loans to total loans improved to 0.93% at March 31, 2015 from 0.96% at December 31, 2014.

• Our coverage ratio of allowance for loan and lease losses to non-performing loans improved to 136.18% at March 31, 2015 compared to 126.34% at December 31, 2014.

• Provision for credit losses on legacy loans (loans excluding those acquired through the Merger) was a negative $550 thousand in the first quarter of 2015 compared to a provision of $2.5 million in the fourth quarter of 2014.

• Taylor Capital related provision for credit losses was $5.5 million in the first quarter of 2015 compared to $7.3 million in the fourth quarter of 2014. These credit costs are a result of Taylor Capital loan renewals and needed reserves on Taylor Capital acquired loans in excess of the purchase loan discount. As expected, these credit costs largely offset the accretion on Taylor Capital non-purchased credit-impaired loans of $7.9 million in the first quarter of 2015 and $10.1 million in the fourth quarter of 2014.

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RESULTS OF OPERATIONS

First Quarter Results

Net Interest Income

							Change from 4Q14 to 1Q15					Change from 1Q14 to 1Q15
	1Q15			4Q14					1Q14
(Dollars in thousands)
Net interest income - fully tax equivalent	$	119,473		$	126,057		-5.2	%	$	72,909		+63.9	%
Net interest margin - fully tax equivalent	3.93		%	4.01		%	-0.08		3.64		%	+0.29
Net interest margin - fully tax equivalent, excluding acquisition accounting discount accretion on Taylor Capital loans	3.62		%	3.63		%	-0.01		3.64		%	-0.02

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 2015 compared to the prior quarter primarily due to fewer days in the first quarter and a $2.3 million decrease in accretion of the acquisition accounting discount recorded on loans acquired in the Merger.

Net interest income in the first quarter of 2015 included interest income of $8.6 million resulting from accretion of the acquisition accounting discount recorded on loans acquired in the Merger ($7.9 million for non-purchased credit-impaired loans and $628 thousand for purchased credit-impaired loans).

Net interest income in the fourth quarter of 2014 included interest income of $10.9 million resulting from accretion of the acquisition accounting discount recorded on loans acquired in the Merger ($10.1 million for non-purchased credit-impaired loans and $833 thousand for purchased credit-impaired loans).

See the supplemental net interest margin tables for further detail.

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Non-interest Income (in thousands):

	1Q15			4Q14		3Q14			2Q14			1Q14
Core non-interest income:
Key fee initiatives:
Lease financing, net	$	25,080		$	18,542	$	17,719		$	14,853		$	13,196
Mortgage banking revenue	24,544			29,080		16,823			187			59
Commercial deposit and treasury management fees	11,038			10,720		9,345			7,106			7,144
Trust and asset management fees	5,714			5,515		5,712			5,405			5,207
Card fees	3,927			3,900		3,836			3,304			2,701
Capital markets and international banking service fees	1,928			1,648		1,472			1,360			978
Total key fee initiatives	72,231			69,405		54,907			32,215			29,285
Consumer and other deposit service fees	3,083			3,335		3,362			3,156			2,935
Brokerage fees	1,678			1,350		1,145			1,356			1,325
Loan service fees	1,485			1,864		1,069			916			965
Increase in cash surrender value of life insurance	839			865		855			834			827
Other operating income	2,102			2,577		1,145			1,162			799
Total core non-interest income	81,418			79,396		62,483			39,639			36,136
Non-core non-interest income:
Net (loss) gain on investment securities	(460		)	491		(3,246		)	(87		)	317
Net gain (loss) on sale of other assets	4			3,476		(7		)	(24		)	7
Gain on extinguishment of debt	—			—		1,895			—			—
Increase (decrease) in market value of assets held in trust for deferred compensation (1)	306			315		(38		)	400			152
Total non-core non-interest income	(150		)	4,282		(1,396		)	289			476
Total non-interest income	$	81,268		$	83,678	$	61,087		$	39,928		$	36,612

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

Core non-interest income for the first quarter of 2015 increased by $2.0 million, or 2.5%, to $81.4 million from the fourth quarter of 2014.

• Leasing revenues increased due to higher fees, promotional revenue from the sale of third-party equipment maintenance contracts and improved lease residual realization.

• Capital markets and international banking services fees increased due to higher swap, commercial real estate advisory and syndication fees.

• Mortgage banking revenue decreased due to lower servicing income as a result of a decline in the fair value of the mortgage servicing asset primarily due to lower and more volatile interest rates during the first quarter of 2015.

Core non-interest income for the first quarter of 2015 increased by $45.3 million, or 125.3%, to $81.4 million from the first quarter of 2014.

• Mortgage banking revenue increased due to the mortgage operations acquired through the Merger.

• Leasing revenues increased due to higher fees and promotional revenue from the sale of third-party equipment maintenance contracts and higher lease residual realization.

• Commercial deposit and treasury management fees increased due to new customer activity as well as the increased customer base as a result of the Merger.

• Other operating income increased due to higher earnings from investments in Small Business Investment Companies.

• Card fees increased due to a new payroll prepaid card program that started in the second quarter of 2014 as well as higher credit card fees.

• Capital markets and international banking services fees increased due to higher swap, commercial real estate advisory and syndication fees.

• Trust and asset management fees increased due to the addition of new customers and the impact of higher equity values.

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Non-interest Expense (in thousands):

	1Q15			4Q14			3Q14			2Q14			1Q14
Core non-interest expense:(1)
Salaries and employee benefits	$	84,447		$	83,242		$	65,271		$	46,222		$	44,121
Occupancy and equipment expense	12,763			13,757			11,314			9,504			9,592
Computer services and telecommunication expense	8,634			8,612			6,194			4,909			5,071
Advertising and marketing expense	2,446			2,233			1,973			2,113			1,991
Professional and legal expense	2,480			2,184			2,501			1,488			1,369
Other intangible amortization expense	1,518			1,617			1,470			1,174			1,240
Net loss (gain) recognized on other real estate owned (A)	888			(120		)	1,348			204			122
Net (gain) loss recognized on other real estate owned related to FDIC transactions (A)	(273		)	(27		)	421			(13		)	65
Other real estate expense, net (A)	281			433			409			337			396
Other operating expenses	18,276			18,514			13,577			11,108			9,220
Total core non-interest expense	131,460			130,445			104,478			77,046			73,187
Non-core non-interest expense: (1)
Merger related expenses (B)	8,069			6,494			27,161			488			680
Prepayment fees on interest bearing liabilities	85			—			—			—			—
Loss on low to moderate income real estate investment (C)	—			—			—			96			2,028
Contingent consideration - Celtic acquisition (C)	—			—			10,600			—			—
Contribution to MB Financial Charitable Foundation (C)	—			3,250			—			—			—
Increase (decrease) in market value of assets held in trust for deferred compensation (D)	306			315			(38		)	400			152
Total non-core non-interest expense	8,460			10,059			37,723			984			2,860
Total non-interest expense	$	139,920		$	140,504		$	142,201		$	78,030		$	76,047

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

Core non-interest expense increased by $1.0 million, or 0.8%, from the fourth quarter of 2014 to $131.5 million for the first quarter of 2015.

• Salaries and employee benefits increased primarily due to commissions on higher leasing revenue and long term incentive expense.

• Net loss on other real estate owned increased due to an unfavorable fair value adjustment on one property.

• Occupancy and equipment expense decreased due to lower depreciation and rent expense as a result of exiting certain facilities in the first quarter of 2015.

Core non-interest expense increased by $58.3 million, or 79.6%, from the first quarter of 2014 to $131.5 million for the first quarter of 2015.

• Salaries and employee benefits increased primarily due to the increased staff from the Merger.

• Other operating expense increased primarily as a result of an increase in filing and other loan expense, higher FDIC assessments due to our larger balance sheet, higher currency delivery expenses related to new treasury management accounts for customers and clawback expense related to our loss share agreements with the FDIC.

• Computer services and telecommunication expenses increased due primarily to the Merger as well as an increase in spending on IT security and our data warehouse.

• Professional and legal expense increased due to higher consulting expense.

• Occupancy and equipment expense increased due to the additional offices acquired in the Merger.

Non-core non-interest expense in the first quarter of 2015 was impacted by merger related expense primarily due to branch exit and facilities impairment charges resulting from closing nine banking centers and exiting other office facilities.

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

	1Q15		4Q14		3Q14		2Q14		1Q14
Merger related expenses:
Salaries and employee benefits	$	33	$	1,926	$	14,259	$	—	$	104
Occupancy and equipment expense	177		301		428		14		—
Computer services and telecommunication expense	270		1,397		5,312		170		13
Advertising and marketing expense	—		84		262		108		90
Professional and legal expense	190		258		6,363		79		410
Branch exit and facilities impairment charges	7,391		2,270		—		—		—
Other operating expenses	8		258		537		117		63
Total merger related expenses	$	8,069	$	6,494	$	27,161	$	488	$	680

Income Tax Expense

Income tax expense was $15.7 million for the first quarter of 2015 compared to $17.1 million for the fourth quarter of 2014. The decrease in income tax expense is primarily due to the $3.5 million decrease in income before taxes from $53.2 million in the fourth quarter of 2014 to $49.8 million in the first quarter of 2015.

Operating Segments

The Company's operations consist of three reportable operating segments: banking, leasing and mortgage banking. Our banking segment generates its revenues primarily from its lending and deposit gathering activities. Our leasing segment generates its revenues through lease originations and related services offered through the Company's leasing subsidiaries: LaSalle Systems Leasing, Inc., Celtic Leasing Corp. and Cole Taylor Equipment Finance. Our mortgage banking segment originates residential mortgage loans for sale to investors through its retail and third party origination channels. The mortgage banking segment also services residential mortgage loans owned by investors and the Company.

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The following table presents 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, 2015
Net interest income	$	104,126	$	3,015	$	6,254		$	—		$	113,395
Provision for credit losses	4,974		—		—			—			4,974
Net interest income after provision for credit losses	99,152		3,015		6,254			—			108,421
Non-interest income:
Lease financing, net	525		24,555		—			—			25,080
Mortgage origination fees	—		—		26,895			—			26,895
Mortgage servicing fees	—		—		(2,351		)	—			(2,351		)
Other non-interest income	31,448		648		4			(456		)	31,644
Total non-interest income	31,973		25,203		24,548			(456		)	81,268
Non-interest expense:
Salaries and employee benefits	52,682		10,789		21,282			33			84,786
Occupancy and equipment expense	10,454		833		1,476			177			12,940
Computer services and telecommunication expense	6,410		295		1,929			270			8,904
Professional and legal expense	1,568		307		605			190			2,670
Other operating expenses	16,151		1,432		5,638			7,399			30,620
Total non-interest expense	87,265		13,656		30,930			8,069			139,920
Income before income taxes	43,860		14,562		(128		)	(8,525		)	49,769
Income tax expense	13,345		5,747		(51		)	(3,383		)	15,658
Net income	$	30,515	$	8,815	$	(77	)	$	(5,142	)	$	34,111
Three months ended December 31, 2014
Net interest income	$	110,623	$	3,007	$	6,181		$	—		$	119,811
Provision for credit losses	9,743		—		—			—			9,743
Net interest income after provision for credit losses	100,880		3,007		6,181			—			110,068
Non-interest income:
Lease financing, net	662		17,880		—			—			18,542
Mortgage origination fees	—		—		18,716			—			18,716
Mortgage servicing fees	—		—		10,364			—			10,364
Other non-interest income	31,392		758		(61		)	3,967			36,056
Total non-interest income	32,054		18,638		29,019			3,967			83,678
Non-interest expense:
Salaries and employee benefits	53,658		8,137		21,762			1,926			85,483
Occupancy and equipment expense	11,460		817		1,480			301			14,058
Computer services and telecommunication expense	6,480		337		1,795			1,397			10,009
Professional and legal expense	1,106		338		740			258			2,442
Other operating expenses	14,910		1,773		5,967			5,862			28,512
Total non-interest expense	87,614		11,402		31,744			9,744			140,504
Income before income taxes	45,320		10,243		3,456			(5,777		)	53,242
Income tax expense	14,108		3,941		1,382			(2,314		)	17,117
Net income	$	31,212	$	6,302	$	2,074		$	(3,463	)	$	36,125

Net income from our banking segment for the first quarter of 2015 was consistent compared to the prior quarter. Net interest income decreased due to fewer days in the first quarter and a decrease in accretion of the acquisition accounting discount recorded on loans acquired in the Merger. Net income was aided by a decrease in provision for credit losses.

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Net income from our leasing segment for the first quarter of 2015 increased compared to the prior quarter. Lease financing revenues increased due to higher fees and promotional revenue from the sale of third-party equipment maintenance contracts and higher lease residual realization. This increase in revenues was partially offset by an increase in expense, primarily salaries and employee benefits, due to commissions on higher leasing revenue.

Net income from our mortgage segment for the first quarter of 2015 decreased compared to the prior quarter due to lower servicing income as a result of a decline in the fair value of the mortgage servicing asset primarily due to lower and more volatile interest rates during the first quarter of 2015 which impacted prepayment speeds.

The following table presents additional information regarding the mortgage banking segment (dollars in thousands):

	1Q15			4Q14			3Q14 (1)
Origination volume	$	1,688,541		$	1,511,909		$	724,713
Refinance	61		%	44		%	35		%
Purchase	39			56			65
Origination volume by channel:
Retail	18		%	19		%	18		%
Third party	82			81			82
Mortgage servicing book (unpaid principal balance of loans serviced for others) at period end	$	22,927,263		$	22,479,008		$	21,989,278
Mortgage servicing rights, recorded at fair value, at period end	219,254			235,402			241,391
Notional value of rate lock commitments, at period end	1,069,145			645,287			610,818

⁽¹⁾ For the 44 day period subsequent to the Merger.

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):

	3/31/2015				12/31/2014				9/30/2014				6/30/2014				3/31/2014
	Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total
Commercial related credits:
Commercial loans	$	3,258,652	37	%	$	3,245,206	36	%	$	3,064,669	34	%	$	1,272,200	23	%	$	1,267,398	23	%
Commercial loans collateralized by assignment of lease payments (lease loans)	1,628,031		18		1,692,258		18		1,631,660		18		1,515,446		27		1,472,621		27
Commercial real estate	2,525,640		28		2,544,867		28		2,647,412		29		1,619,322		29		1,623,509		29
Construction real estate	184,105		2		247,068		3		222,120		3		116,996		2		132,997		2
Total commercial related credits	7,596,428		85		7,729,399		85		7,565,861		84		4,523,964		81		4,496,525		81
Other loans:
Residential real estate	505,558		5		503,287		5		516,834		6		309,234		6		309,137		5
Indirect vehicle	273,105		3		268,840		3		273,038		3		272,841		5		266,044		5
Home equity	241,078		3		251,909		3		262,977		3		245,135		4		258,120		5
Consumer loans	77,645		1		78,137		1		69,028		1		70,584		1		64,812		1
Total other loans	1,097,386		12		1,102,173		12		1,121,877		13		897,794		16		898,113		16
Total loans, excluding purchased credit-impaired and covered loans	8,693,814		97		8,831,572		97		8,687,738		97		5,421,758		97		5,394,638		97
Purchased credit-impaired and covered loans (1)	227,514		3		251,645		3		288,186		3		134,966		3		173,677		3
Total loans	$	8,921,328	100	%	$	9,083,217	100	%	$	8,975,924	100	%	$	5,556,724	100	%	$	5,568,315	100	%

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

Our loan balances, excluding purchased credit-impaired and covered loans, decreased $137.8 million (-1.6%) during the first quarter of 2015 primarily due to seasonality in our customer activity. The first quarter is often the softest quarter from a loan growth perspective.

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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):

	1Q15				4Q14				3Q14				2Q14				1Q14
	Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total
Commercial related credits:
Commercial loans	$	3,190,755	36	%	$	3,110,016	35	%	$	2,118,864	30	%	$	1,229,799	22	%	$	1,232,562	22	%
Commercial loans collateralized by assignment of lease payments (lease loans)	1,647,761		18		1,642,427		18		1,561,484		22		1,476,618		27		1,479,998		26
Commercial real estate	2,538,995		29		2,611,410		29		2,108,492		29		1,620,658		29		1,631,041		29
Construction real estate	191,257		2		232,679		3		170,017		2		133,557		2		140,920		3
Total commercial related credits	7,568,768		85		7,596,532		85		5,958,857		83		4,460,632		80		4,484,521		80
Other loans:
Residential real estate	493,366		5		503,211		5		405,589		6		309,848		6		311,466		5
Indirect vehicle	267,265		3		273,063		3		251,969		3		269,556		5		263,510		5
Home equity	246,537		3		256,933		3		274,841		4		252,891		5		263,283		5
Consumer loans	72,374		1		75,264		1		69,699		1		65,437		1		62,616		1
Total other loans	1,079,542		12		1,108,471		12		1,002,098		14		897,732		17		900,875		16
Total loans, excluding purchased credit-impaired and covered loans	8,648,310		97		8,705,003		97		6,960,955		97		5,358,364		97		5,385,396		96
Purchased credit-impaired and covered loans (1)	240,376		3		273,136		3		221,129		3		158,371		3		221,481		4
Total loans	$	8,888,686	100	%	$	8,978,139	100	%	$	7,182,084	100	%	$	5,516,735	100	%	$	5,606,877	100	%

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

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ASSET QUALITY

The following table presents a summary of criticized assets (excluding loans held for sale, purchased credit-impaired loans that were acquired as part of our FDIC-assisted transactions and the Merger and other real estate owned acquired as part of our FDIC-assisted transactions) as of the dates indicated (dollars in thousands):

	3/31/2015			12/31/2014			9/30/2014			6/30/2014			3/31/2014
Non-performing loans:
Non-accrual loans (1)	$	81,571		$	82,733		$	97,580		$	108,414		$	118,023
Loans 90 days or more past due, still accruing interest	1,707			4,354			2,681			2,363			747
Total non-performing loans	83,278			87,087			100,261			110,777			118,770
Other real estate owned	21,839			19,198			18,817			20,306			20,928
Repossessed assets	160			93			126			73			772
Total non-performing assets	$	105,277		$	106,378		$	119,204		$	131,156		$	140,470
Potential problem loans (2)	$	107,703		$	55,651		$	51,690		$	63,477		$	68,785
Total allowance for loan losses	$	113,412		$	110,026		$	102,810		$	100,910		$	106,752
Accruing restructured loans (3)	16,874			15,603			16,877			26,793			25,797
Total non-performing loans to total loans	0.93		%	0.96		%	1.12		%	1.99		%	2.13		%
Total non-performing assets to total assets	0.73			0.73			0.82			1.34			1.49
Allowance for loan losses to non-performing loans	136.18			126.34			102.54			91.09			89.88

⁽¹⁾  Includes $25.5 million, $25.8 million, $22.4 million, $14.5 million and $15.6 million of restructured loans on non-accrual status at March 31, 2015, December 31, 2014, September 30, 2014, June 30, 2014 and March 31, 2014, 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.

Potential problem loans increased in the first quarter of 2015 from a very low level primarily due to normal rotation in the portfolio.

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

	3/31/2015		12/31/2014		9/30/2014		6/30/2014		3/31/2014
Commercial and lease	$	18,315	$	20,058	$	22,985	$	36,807	$	42,532
Commercial real estate	29,645		32,663		42,832		48,751		49,541
Construction real estate	337		337		337		337		782
Consumer related	34,981		34,029		34,107		24,882		25,915
Total non-performing loans	$	83,278	$	87,087	$	100,261	$	110,777	$	118,770

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):

	3/31/2015			12/31/2014			9/30/2014			6/30/2014			3/31/2014
Balance at the beginning of quarter	$	19,198		$	18,817		$	20,306		$	20,928		$	23,289
Transfers in at fair value less estimated costs to sell	4,345			1,261			221			112			539
Acquired from business combination	—			—			4,720			—			—
Capitalized other real estate owned costs	270			—			—			—			—
Fair value adjustments	(922		)	(34		)	(2,083		)	(286		)	(140		)
Net gains on sales of other real estate owned	34			154			735			82			18
Cash received upon disposition	(1,086		)	(1,000		)	(5,082		)	(530		)	(2,778		)
Balance at the end of quarter	$	21,839		$	19,198		$	18,817		$	20,306		$	20,928

10

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

	1Q15			4Q14			3Q14			2Q14			1Q14
Allowance for credit losses, balance at the beginning of period	$	114,057		$	106,912		$	103,905		$	108,395		$	113,462
Allowance for unfunded credit commitments acquired through business combination	—			—			1,261			—			—
Utilization of allowance for unfunded credit commitments	—			—			(637		)	—			—
Provision for credit losses - legacy	(550		)	2,472			(1,600		)	(1,950		)	1,150
Provision for credit losses - acquired Taylor Capital loan portfolio renewals	5,524			7,271			4,709			—			—
Charge-offs:
Commercial loans	569			197			606			446			90
Commercial loans collateralized by assignment of lease payments (lease loans)	—			546			—			40			—
Commercial real estate	2,034			1,528			1,027			1,727			7,156
Construction real estate	3			4			5			14			56
Residential real estate	579			280			740			433			265
Home equity	444			1,381			566			817			619
Indirect vehicle	874			1,189			1,043			583			920
Consumer loans	424			885			497			590			495
Total charge-offs	4,927			6,010			4,484			4,650			9,601
Recoveries:
Commercial loans	242			869			564			696			1,628
Commercial loans collateralized by assignment of lease payments (lease loans)	749			384			425			130			—
Commercial real estate	1,375			741			2,227			567			485
Construction real estate	2			51			25			77			99
Residential real estate	72			661			4			6			519
Home equity	101			176			46			127			133
Indirect vehicle	475			453			402			439			442
Consumer loans	69			77			65			68			78
Total recoveries	3,085			3,412			3,758			2,110			3,384
Total net charge-offs	1,842			2,598			726			2,540			6,217
Allowance for credit losses	117,189			114,057			106,912			103,905			108,395
Allowance for unfunded credit commitments	(3,777		)	(4,031		)	(4,102		)	(2,995		)	(1,643		)
Allowance for loan losses	$	113,412		$	110,026		$	102,810		$	100,910		$	106,752
Total loans, excluding loans held for sale	$	8,921,328		$	9,083,217		$	8,975,924		$	5,556,724		$	5,568,315
Average loans, excluding loans held for sale	8,888,686			8,978,139			7,182,084			5,516,735			5,606,877
Ratio of allowance for loan losses to total loans, excluding loans held for sale	1.27		%	1.21		%	1.15		%	1.82		%	1.92		%
Net loan charge-offs to average loans, excluding loans held for sale (annualized)	0.08			0.11			0.04			0.18			0.45

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

	3/31/2015		12/31/2014		9/30/2014		6/30/2014		3/31/2014
Commercial related loans:
General reserve	$	88,425	$	85,087	$	76,604	$	70,855	$	75,695
Specific reserve	5,658		5,189		5,802		10,270		11,325
Consumer related reserve	19,329		19,750		20,404		19,785		19,732
Total allowance for loan losses	$	113,412	$	110,026	$	102,810	$	100,910	$	106,752

11

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. We anticipate recording a provision for the acquired portfolio in future quarters related to renewing Taylor Capital loans which will largely offset the accretion from the pass rated loans.

In accordance with ASC 310-30, for both purchased non-impaired loans and purchased 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 Merger were as follows for the three months ended March 31, 2015 (in thousands):

	Non-Accretable Discount - PCI Loans			Accretable Discount - PCI Loans			Accretable Discount - Non-PCI Loans			Total
Balance at beginning of period	$	31,041		$	4,489		$	61,776		$	97,306
Charge-offs	(248		)	—			—			(248		)
Accretion	—			(628		)	(7,948		)	(8,576		)
Balance at end of period	$	30,793		$	3,861		$	53,828		$	88,482

Changes in the purchase accounting discount for loans acquired in the Merger were as follows for the three months ended December 31, 2014 (in thousands):

	Non-Accretable Discount - PCI Loans			Accretable Discount - PCI Loans			Accretable Discount - Non-PCI Loans			Total
Balance at beginning of period	$	33,135		$	5,322		$	71,848		$	110,305
Charge-offs	(2,094		)	—			—			(2,094		)
Accretion	—			(833		)	(10,072		)	(10,905		)
Balance at end of period	$	31,041		$	4,489		$	61,776		$	97,306

12

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):

	3/31/2015		12/31/2014			9/30/2014			6/30/2014		3/31/2014
Securities available for sale:
Fair value
Government sponsored agencies and enterprises	$	66,070	$	65,873		$	65,829		$	51,727	$	51,836
States and political subdivisions	403,628		410,854			409,033			19,498		19,350
Mortgage-backed securities	856,933		908,225			1,006,102			797,783		726,439
Corporate bonds	252,042		259,203			267,239			275,529		273,853
Equity securities	10,751		10,597			10,447			10,421		10,572
Total fair value	$	1,589,424	$	1,654,752		$	1,758,650		$	1,154,958	$	1,082,050
Amortized cost
Government sponsored agencies and enterprises	$	64,411	$	64,612		$	64,809		$	50,096	$	50,291
States and political subdivisions	381,704		390,076			391,900			19,228		19,285
Mortgage-backed securities	841,727		899,523			999,630			786,496		717,548
Corporate bonds	250,543		259,526			265,720			271,351		272,490
Equity securities	10,587		10,531			10,470			10,414		10,703
Total amortized cost	$	1,548,972	$	1,624,268		$	1,732,529		$	1,137,585	$	1,070,317
Unrealized gain, net
Government sponsored agencies and enterprises	$	1,659	$	1,261		$	1,020		$	1,631	$	1,545
States and political subdivisions	21,924		20,778			17,133			270		65
Mortgage-backed securities	15,206		8,702			6,472			11,287		8,891
Corporate bonds	1,499		(323		)	1,519			4,178		1,363
Equity securities	164		66			(23		)	7		(131		)
Total unrealized gain, net	$	40,452	$	30,484		$	26,121		$	17,373	$	11,733
Securities held to maturity, at amortized cost:
States and political subdivisions	$	764,931	$	752,558		$	760,674		$	993,937	$	940,610
Mortgage-backed securities	235,928		240,822			244,675			247,455		248,082
Total amortized cost	$	1,000,859	$	993,380		$	1,005,349		$	1,241,392	$	1,188,692

13

DEPOSIT MIX

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

	3/31/2015				12/31/2014				9/30/2014				6/30/2014				3/31/2014
	Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total
Low cost deposits:
Noninterest bearing deposits	$	4,290,499	39	%	$	4,118,256	37	%	$	3,807,448	34	%	$	2,605,367	34	%	$	2,435,868	32	%
Money market and NOW	4,002,818		36		3,913,765		36		4,197,166		37		2,932,089		38		2,772,766		37
Savings	969,560		9		940,345		9		931,985		8		872,324		11		865,910		12
Total low cost deposits	9,262,877		84		8,972,366		82		8,936,599		79		6,409,780		83		6,074,544		81
Certificates of deposit:
Certificates of deposit	1,354,633		12		1,479,928		13		1,646,000		15		1,137,262		14		1,188,896		16
Brokered certificates of deposit	401,991		4		538,648		5		655,843		6		216,022		3		222,307		3
Total certificates of deposit	1,756,624		16		2,018,576		18		2,301,843		21		1,353,284		17		1,411,203		19
Total deposits	$	11,019,501	100	%	$	10,990,942	100	%	$	11,238,442	100	%	$	7,763,064	100	%	$	7,485,747	100	%

Non-interest bearing deposits grew by $172.2 million (+4.2%) during the first quarter of 2015. Total low cost deposits increased $290.5 million (+3.2%) to $9.3 billion at March 31, 2015 compared to the prior quarter primarily due to strong noninterest bearing deposit flows.

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

	1Q15				4Q14				3Q14				2Q14				1Q14
	Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total
Low cost deposits:
Noninterest bearing deposits	$	4,199,948	38	%	$	4,072,797	36	%	$	3,175,512	34	%	$	2,476,396	33	%	$	2,372,866	32	%
Money market and NOW	3,937,707		36		4,023,657		37		3,518,314		37		2,880,910		38		2,727,620		37
Savings	952,345		9		936,960		8		906,630		10		868,694		11		862,197		12
Total low cost deposits	9,090,000		83		9,033,414		81		7,600,456		81		6,226,000		82		5,962,683		81
Certificates of deposit:
Certificates of deposit	1,420,320		13		1,563,011		14		1,411,407		15		1,157,805		15		1,210,189		16
Brokered certificates of deposit	476,245		4		606,166		5		417,346		4		220,396		3		223,926		3
Total certificates of deposit	1,896,565		17		2,169,177		19		1,828,753		19		1,378,201		18		1,434,115		19
Total deposits	$	10,986,565	100	%	$	11,202,591	100	%	$	9,429,209	100	%	$	7,604,201	100	%	$	7,396,798	100	%

CAPITAL

Tangible book value per common share was $16.08 at March 31, 2015 compared to $15.74 last quarter and $16.43 a year ago.

Our regulatory capital ratios remain strong. MB Financial Bank, N.A. (the "Bank") was categorized as “well capitalized” at March 31, 2015 under the Prompt Corrective Action (“PCA”) provisions. The Company and Bank have implemented the changes required under the Basel III regulatory capital reform. The Bank would be categorized as "well capitalized" under the fully phased in rules.

14

FORWARD-LOOKING STATEMENTS

When used in this press release and in reports filed with or furnished to the Securities and Exchange Commission, 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 Merger and our other merger and acquisition activities might not be realized within the anticipated time frames or at all, and costs or difficulties relating to integration matters, including but not limited to customer and employee retention, might be greater than expected; (2) the 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 and lease losses, which could necessitate additional provisions for loan losses, resulting both from loans we originate and loans we acquire from other financial institutions; (3) results of examinations by the Office of Comptroller of Currency, the Federal Reserve Board, the Consumer Financial Protection Bureau and other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our allowance for loan and lease losses or write-down assets; (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 increase volatility in our 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) our ability to realize the residual values of our direct finance, leveraged, and operating leases; (11) our ability to access cost-effective funding; (12) changes in financial markets; (13) changes in economic conditions in general and in the Chicago metropolitan area in particular; (14) the costs, effects and outcomes of litigation; (15) new legislation or regulatory changes, including but not limited to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and regulations adopted thereunder, changes in capital requirements pursuant to the Dodd-Frank Act, 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.

TABLES TO FOLLOW

15

MB FINANCIAL, INC. & SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited)

As of the dates indicated

(In thousands)

	3/31/2015			12/31/2014			9/30/2014			6/30/2014			3/31/2014
ASSETS
Cash and due from banks	$	248,840		$	256,804		$	267,405		$	294,475		$	268,803
Interest earning deposits with banks	52,212			55,277			179,391			466,820			244,819
Total cash and cash equivalents	301,052			312,081			446,796			761,295			513,622
Federal funds sold	—			—			—			10,000			7,500
Investment securities:
Securities available for sale, at fair value	1,589,424			1,654,752			1,758,650			1,154,958			1,082,050
Securities held to maturity, at amortized cost	1,000,859			993,380			1,005,349			1,241,392			1,188,692
Non-marketable securities - FHLB and FRB Stock	87,677			75,569			75,569			51,432			51,432
Total investment securities	2,677,960			2,723,701			2,839,568			2,447,782			2,322,174
Loans held for sale	686,838			737,209			553,627			1,219			802
Loans:
Total loans, excluding purchased credit-impaired and covered loans	8,693,814			8,831,572			8,687,738			5,421,758			5,394,638
Purchased credit-impaired and covered loans	227,514			251,645			288,186			134,966			173,677
Total loans	8,921,328			9,083,217			8,975,924			5,556,724			5,568,315
Less: Allowance for loan losses	113,412			110,026			102,810			100,910			106,752
Net loans	8,807,916			8,973,191			8,873,114			5,455,814			5,461,563
Lease investments, net	159,191			162,833			137,120			127,194			122,589
Premises and equipment, net	234,077			238,377			243,814			224,245			221,711
Cash surrender value of life insurance	134,401			133,562			132,697			131,842			131,008
Goodwill	711,521			711,521			711,521			423,369			423,369
Other intangibles	36,488			38,006			39,623			21,014			22,188
Mortgage servicing rights, at fair value	219,254			235,402			241,391			344			378
Other real estate owned, net	21,839			19,198			18,817			20,306			20,928
Other real estate owned related to FDIC transactions	17,890			19,328			22,028			15,349			22,682
Other assets	319,883			297,690			244,481			178,918			166,789
Total assets	$	14,328,310		$	14,602,099		$	14,504,597		$	9,818,691		$	9,437,303
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits:
Noninterest bearing	$	4,290,499		$	4,118,256		$	3,807,448		$	2,605,367		$	2,435,868
Interest bearing	6,729,002			6,872,686			7,430,994			5,157,697			5,049,879
Total deposits	11,019,501			10,990,942			11,238,442			7,763,064			7,485,747
Short-term borrowings	615,231			931,415			667,160			229,809			189,872
Long-term borrowings	85,477			82,916			77,269			71,473			65,664
Junior subordinated notes issued to capital trusts	185,874			185,778			185,681			152,065			152,065
Accrued expenses and other liabilities	363,934			382,762			335,677			236,964			200,175
Total liabilities	12,270,017			12,573,813			12,504,229			8,453,375			8,093,523
Stockholders' Equity
Preferred stock	115,280			115,280			115,280			—			—
Common stock	754			751			751			553			553
Additional paid-in capital	1,268,851			1,267,761			1,265,050			742,824			740,245
Retained earnings	651,178			629,677			606,097			611,741			595,301
Accumulated other comprehensive income	26,101			20,356			18,431			13,034			10,362
Treasury stock	(5,277		)	(6,974		)	(6,692		)	(4,295		)	(4,132		)
Controlling interest stockholders' equity	2,056,887			2,026,851			1,998,917			1,363,857			1,342,329
Noncontrolling interest	1,406			1,435			1,451			1,459			1,451
Total stockholders' equity	2,058,293			2,028,286			2,000,368			1,365,316			1,343,780
Total liabilities and stockholders' equity	$	14,328,310		$	14,602,099		$	14,504,597		$	9,818,691		$	9,437,303

16

MB FINANCIAL, INC. & SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(Dollars in thousands, except per share data)	1Q15			4Q14			3Q14			2Q14			1Q14
Interest income:
Loans:
Taxable	$	98,846		$	104,531		$	79,902		$	53,649		$	53,946
Nontaxable	2,174			2,203			2,265			2,256			2,298
Investment securities:
Taxable	9,934			10,651			11,028			8,794			8,146
Nontaxable	9,113			9,398			9,041			8,285			8,067
Federal funds sold	—			2			14			4			5
Other interest earning accounts	62			62			211			277			113
Total interest income	120,129			126,847			102,461			73,265			72,575
Interest expense:
Deposits	4,645			4,889			4,615			3,754			3,769
Short-term borrowings	277			354			231			95			100
Long-term borrowings and junior subordinated notes	1,812			1,793			2,003			1,344			1,378
Total interest expense	6,734			7,036			6,849			5,193			5,247
Net interest income	113,395			119,811			95,612			68,072			67,328
Provision for credit losses	4,974			9,743			3,109			(1,950		)	1,150
Net interest income after provision for credit losses	108,421			110,068			92,503			70,022			66,178
Non-interest income:
Lease financing, net	25,080			18,542			17,719			14,853			13,196
Mortgage banking revenue	24,544			29,080			16,823			187			59
Commercial deposit and treasury management fees	11,038			10,720			9,345			7,106			7,144
Trust and asset management fees	5,714			5,515			5,712			5,405			5,207
Card fees	3,927			3,900			3,836			3,304			2,701
Capital markets and international banking service fees	1,928			1,648			1,472			1,360			978
Consumer and other deposit service fees	3,083			3,335			3,362			3,156			2,935
Brokerage fees	1,678			1,350			1,145			1,356			1,325
Loan service fees	1,485			1,864		��	1,069			916			965
Increase in cash surrender value of life insurance	839			865			855			834			827
Net (loss) gain on investment securities	(460		)	491			(3,246		)	(87		)	317
Net gain (loss) on sale of assets	4			3,476			(7		)	(24		)	7
Gain on early extinguishment of debt	—			—			1,895			—			—
Other operating income	2,408			2,892			1,107			1,562			951
Total non-interest income	81,268			83,678			61,087			39,928			36,612
Non-interest expense:
Salaries and employee benefits	84,786			85,483			79,492			46,622			44,377
Occupancy and equipment expense	12,940			14,058			11,742			9,518			9,592
Computer services and telecommunication expense	8,904			10,009			11,506			5,079			5,084
Advertising and marketing expense	2,446			2,317			2,235			2,221			2,081
Professional and legal expense	2,670			2,442			8,864			1,567			1,779
Other intangible amortization expense	1,518			1,617			1,470			1,174			1,240
Branch exit and facilities impairment charges	7,391			2,270			—			—			—
Net loss (gain) recognized on other real estate owned and other expense	896			286			2,178			528			583
Prepayment fees on interest bearing liabilities	85			—			—			—			—
Other operating expenses	18,284			22,022			24,714			11,321			11,311
Total non-interest expense	139,920			140,504			142,201			78,030			76,047
Income before income taxes	49,769			53,242			11,389			31,920			26,743
Income tax expense	15,658			17,117			4,488			8,814			6,774
Net income	34,111			36,125			6,901			23,106			19,969
Dividends on preferred shares	2,000			2,000			2,000			—			—
Net income available to common stockholders	$	32,111		$	34,125		$	4,901		$	23,106		$	19,969

17

	1Q15		4Q14		3Q14		2Q14		1Q14
Common share data:
Basic earnings per common share	$	0.43	$	0.46	$	0.08	$	0.42	$	0.37
Diluted earnings per common share	0.43		0.45		0.08		0.42		0.36
Weighted average common shares outstanding for basic earnings per common share	74,567,104		74,525,990		63,972,902		54,669,868		54,639,951
Weighted average common shares outstanding for diluted earnings per common share	75,164,716		75,130,331		64,457,978		55,200,054		55,265,188

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Selected Financial Data:
	1Q15			4Q14			3Q14			2Q14			1Q14
Performance Ratios:
Annualized return on average assets	0.96		%	0.99		%	0.22		%	0.97		%	0.86		%
Annualized operating return on average assets (1)	1.11			1.09			1.16			0.99			0.93
Annualized return on average common equity	6.78			7.12			1.21			6.86			6.07
Annualized operating return on average common equity (1)	7.87			7.84			8.29			6.98			6.53
Annualized cash return on average tangible common equity (2)	11.31			11.98			2.23			10.47			9.39
Annualized cash operating return on average tangible common equity (3)	13.09			13.16			13.19			10.66			10.08
Net interest rate spread	3.80			3.88			3.66			3.40			3.51
Cost of funds (4)	0.23			0.23			0.26			0.26			0.27
Efficiency ratio (5)	65.29			63.35			63.46			67.68			66.84
Annualized net non-interest expense to average assets (6)	1.40			1.39			1.35			1.55			1.58
Core non-interest income to revenues (7)	40.66			38.78			38.23			35.22			33.41
Net interest margin	3.73			3.81			3.56			3.26			3.36
Tax equivalent effect	0.20			0.20			0.22			0.27			0.28
Net interest margin - fully tax equivalent basis (8)	3.93			4.01			3.78			3.53			3.64
Loans to deposits	80.96			82.64			79.87			71.58			74.39
Asset Quality Ratios:
Non-performing loans (9) to total loans	0.93		%	0.96		%	1.12		%	1.99		%	2.13		%
Non-performing assets (9) to total assets	0.73			0.73			0.82			1.34			1.49
Allowance for loan losses to non-performing loans (9)	136.18			126.34			102.54			91.09			89.88
Allowance for loan losses to total loans	1.27			1.21			1.15			1.82			1.92
Net loan charge-offs to average loans (annualized)	0.08			0.11			0.04			0.18			0.45
Capital Ratios:
Tangible equity to tangible assets (10)	9.73		%	9.32		%	9.17		%	9.89		%	10.07		%
Tangible common equity to tangible assets (11)	8.89			8.49			8.34			9.89			10.07
Tangible common equity to risk weighted assets (12)	10.34			10.38			10.34			13.97			13.82
Total capital (to risk-weighted assets) (13)	13.53			13.62			13.60			17.18			17.09
Tier 1 capital (to risk-weighted assets) (13)	12.52			12.61			12.64			15.92			15.84
Common equity tier 1 capital (to risk-weighted assets) (13)	10.03			N/A			N/A			N/A			N/A
Tier 1 capital (to average assets) (13)	10.78			10.47			12.29			11.61			11.65
Book Value Per Share Data:
Book value per common share (14)	$	25.86		$	25.58		$	25.09		$	24.73		$	24.37
Less: goodwill and other intangible assets, net of benefit, per common share	9.78			9.84			9.73			7.92			7.94
Tangible book value per common share (15)	$	16.08		$	15.74		$	15.36		$	16.81		$	16.43

⁽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 (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.

19

⁽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 total assets less goodwill and other intangibles, net of tax benefit.

⁽¹³⁾  2015 ratios reflect the new capital regulation changes required under the Basel III regulatory capital reform.

⁽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; annualized operating return on average assets; 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 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, gain on extinguishment of debt and increase in market value of assets held in trust for deferred compensation excluded from the non-interest income components of these ratios, and contingent consideration expense, Merger related expenses, loss on low to moderate income real estate investment, prepayment fees on interest bearing liabilities, contribution to MB Financial Charitable Foundation and increase 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 and tangible common equity to tangible assets; tangible book value per common share; 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, annualized operating return on average assets, annualized operating return on average common equity, annualized cash operating return on average tangible common equity, net interest margin on a fully tax equivalent basis excluding acquisition discount accretion on Taylor Capital loans, core and non-core non-interest income and non-interest expense are useful in assessing our core operating performance and, in the case of core and non-core non-interest income and non-interest expense, 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, gain on extinguishment of debt and increase in market value of assets held in trust for deferred compensation from the non-interest income components, and excluding contingent consideration expense, merger related expenses, loss on low to moderate income real estate investment, prepayment fees on interest bearing liabilities, contribution to MB Financial Charitable Foundation 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.

20

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.

A reconciliation of net interest margin on a fully tax equivalent basis to net interest margin is contained in the tables under “Net Interest Margin.” A reconciliation of tangible book value per common share to book value per common share is contained in the “Selected Financial Ratios” table. Reconciliations of 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):

	3/31/2015		12/31/2014		9/30/2014		6/30/2014		3/31/2014
Stockholders' equity - as reported	$	2,058,293	$	2,028,286	$	2,000,368	$	1,365,316	$	1,343,780
Less: goodwill	711,521		711,521		711,521		423,369		423,369
Less: other intangible assets, net of tax benefit	23,717		24,704		25,755		13,659		14,422
Tangible equity	$	1,323,055	$	1,292,061	$	1,263,092	$	928,288	$	905,989

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

	3/31/2015		12/31/2014		9/30/2014		6/30/2014		3/31/2014
Total assets - as reported	$	14,328,310	$	14,602,099	$	14,504,597	$	9,818,691	$	9,437,303
Less: goodwill	711,521		711,521		711,521		423,369		423,369
Less: other intangible assets, net of tax benefit	23,717		24,704		25,755		13,659		14,422
Tangible assets	$	13,593,072	$	13,865,874	$	13,767,321	$	9,381,663	$	8,999,512

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

	3/31/2015		12/31/2014		9/30/2014		6/30/2014		3/31/2014
Common stockholders' equity - as reported	$	1,943,013	$	1,913,006	$	1,885,088	$	1,365,316	$	1,343,780
Less: goodwill	711,521		711,521		711,521		423,369		423,369
Less: other intangible assets, net of tax benefit	23,717		24,704		25,755		13,659		14,422
Tangible common equity	$	1,207,775	$	1,176,781	$	1,147,812	$	928,288	$	905,989

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

	1Q15		4Q14		3Q14		2Q14		1Q14
Average common stockholders' equity - as reported	$	1,922,151	$	1,901,830	$	1,613,375	$	1,351,604	$	1,335,223
Less: average goodwill	711,521		711,521		550,667		423,369		423,369
Less: average other intangible assets, net of tax benefit	24,157		25,149		19,734		13,990		14,758
Average tangible common equity	$	1,186,473	$	1,165,160	$	1,042,974	$	914,245	$	897,096

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

	1Q15		4Q14		3Q14		2Q14		1Q14
Net income available to common stockholders - as reported	$	32,111	$	34,125	$	4,901	$	23,106	$	19,969
Add: other intangible amortization expense, net of tax benefit	987		1,051		956		763		806
Net cash flow available to common stockholders	$	33,098	$	35,176	$	5,857	$	23,869	$	20,775

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

	1Q15			4Q14			3Q14			2Q14			1Q14
Net income - as reported	$	34,111		$	36,125		$	6,901		$	23,106		$	19,969
Less non-core items:
Net (loss) gain on investment securities	(460		)	491			(3,246		)	(87		)	317
Net gain (loss) on sale of other assets	4			3,476			(7		)	(24		)	7
Gain on extinguishment of debt	—			—			1,895			—			—
Merger related expenses	(8,069		)	(6,494		)	(27,161		)	(488		)	(680		)
Prepayment fees on interest bearing liabilities	(85		)	—			—			—			—
Loss on low-income housing investment	—			—			—			(96		)	(2,028		)
Contingent consideration expense - Celtic acquisition	—			—			(10,600		)	—			—
Contribution to MB Financial Charitable Foundation	—			(3,250		)	—			—			—
Total non-core items	(8,610		)	(5,777		)	(39,119		)	(695		)	(2,384		)
Income tax expense on non-core items	(3,417		)	(2,314		)	(10,295		)	(266		)	(855		)
Non-core items, net of tax	(5,193		)	(3,463		)	(28,824		)	(429		)	(1,529		)
Operating earnings	$	39,304		$	39,588		$	35,725		$	23,535		$	21,498

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Efficiency Ratio Calculation (Dollars in Thousands)

	1Q15			4Q14			3Q14			2Q14			1Q14
Non-interest expense	$	139,920		$	140,504		$	142,201		$	78,030		$	76,047
Less merger related expenses	8,069			6,494			27,161			488			680
Less prepayment fees on interest bearing liabilities	85			—			—			—			—
Less loss on low to moderate income real estate investment	—			—			—			96			2,028
Less contingent consideration expense	—			—			10,600			—			—
Less contribution to MB Financial Charitable Foundation	—			3,250			—			—			—
Less increase (decrease) in market value of assets held in trust for deferred compensation	306			315			(38		)	400			152
Non-interest expense - as adjusted	$	131,460		$	130,445		$	104,478		$	77,046		$	73,187
Net interest income	$	113,395		$	119,811		$	95,612		$	68,072		$	67,328
Tax equivalent adjustment	6,078			6,246			6,087			5,677			5,581
Net interest income on a fully tax equivalent basis	119,473			126,057			101,699			73,749			72,909
Plus non-interest income	81,268			83,678			61,087			39,928			36,612
Plus tax equivalent adjustment on the increase in cash surrender value of life insurance	452			466			460			449			445
Less net (loss) gain on investment securities	(460		)	491			(3,246		)	(87		)	317
Less net gain (loss) on sale of other assets	4			3,476			(7		)	(24		)	7
Less gain on extinguishment of debt	—			—			1,895			—			—
Less increase (decrease) in market value of assets held in trust for deferred compensation	306			315			(38		)	400			152
Net interest income plus non-interest income - as adjusted	$	201,343		$	205,919		$	164,642		$	113,837		$	109,490
Efficiency ratio	65.29		%	63.35		%	63.46		%	67.68		%	66.84		%
Efficiency ratio (without adjustments)	71.88		%	69.05		%	90.75		%	72.25		%	73.16		%

23

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

	1Q15			4Q14			3Q14			2Q14			1Q14
Non-interest expense	$	139,920		$	140,504		$	142,201		$	78,030		$	76,047
Less merger related expenses	8,069			6,494			27,161			488			680
Less prepayment fees on interest bearing liabilities	85			—			—			—			—
Less loss on low to moderate income real estate investment	—			—			—			96			2,028
Less contingent consideration expense	—			—			10,600			—			—
Less contribution to MB Financial Charitable Foundation	—			3,250			—			—			—
Less increase (decrease) in market value of assets held in trust for deferred compensation	306			315			(38		)	400			152
Non-interest expense - as adjusted	131,460			130,445			104,478			77,046			73,187
Non-interest income	81,268			83,678			61,087			39,928			36,612
Less net (loss) gain on investment securities	(460		)	491			(3,246		)	(87		)	317
Less net gain (loss) on sale of other assets	4			3,476			(7		)	(24		)	7
Less gain on extinguishment of debt	—			—			1,895			—			—
Less increase (decrease) in market value of assets held in trust for deferred compensation	306			315			(38		)	400			152
Non-interest income - as adjusted	81,418			79,396			62,483			39,639			36,136
Less tax equivalent adjustment on the increase in cash surrender value of life insurance	452			466			460			449			445
Net non-interest expense	$	49,590		$	50,583		$	41,535		$	36,958		$	36,606
Average assets	$	14,363,244		$	14,466,066		$	12,206,014		$	9,575,896		$	9,367,942
Annualized net non-interest expense to average assets	1.40		%	1.39		%	1.35		%	1.55		%	1.58		%
Annualized net non-interest expense to average assets (without adjustments)	1.66		%	1.56		%	2.64		%	1.60		%	1.71		%

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

	1Q15			4Q14			3Q14			2Q14			1Q14
Non-interest income	$	81,268		$	83,678		$	61,087		$	39,928		$	36,612
Plus tax equivalent adjustment on the increase in cash surrender value of life insurance	452			466			460			449			445
Less net (loss) gain on investment securities	(460		)	491			(3,246		)	(87		)	317
Less net gain (loss) on sale of other assets	4			3,476			(7		)	(24		)	7
Less gain on extinguishment of debt	—			—			1,895			—			—
Less increase (decrease) in market value of assets held in trust for deferred compensation	306			315			(38		)	400			152
Non-interest income - as adjusted	$	81,870		$	79,862		$	62,943		$	40,088		$	36,581
Net interest income	$	113,395		$	119,811		$	95,612		$	68,072		$	67,328
Tax equivalent adjustment	6,078			6,246			6,087			5,677			5,581
Net interest income on a fully tax equivalent basis	119,473			126,057			101,699			73,749			72,909
Plus non-interest income	81,268			83,678			61,087			39,928			36,612
Plus tax equivalent adjustment on the increase in cash surrender value of life insurance	452			466			460			449			445
Less net (loss) gain on investment securities	(460		)	491			(3,246		)	(87		)	317
Less net gain (loss) on sale of other assets	4			3,476			(7		)	(24		)	7
Less gain on extinguishment of debt	—			—			1,895			—			—
Less increase (decrease) in market value of assets held in trust for deferred compensation	306			315			(38		)	400			152
Total revenue - as adjusted and on a fully tax equivalent basis	$	201,343		$	205,919		$	164,642		$	113,837		$	109,490
Total revenue - unadjusted	$	194,663		$	203,489		$	156,699		$	108,000		$	103,940
Core non-interest income to revenues ratio	40.66		%	38.78		%	38.23		%	35.22		%	33.41		%
Non-interest income to revenues  ratio (without adjustments)	41.75		%	41.12		%	38.98		%	36.97		%	35.22		%

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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):

	1Q15						1Q14							4Q14
	Average Balance		Interest		Yield/ Rate		Average Balance			Interest		Yield/ Rate		Average Balance		Interest		Yield/ Rate
Interest Earning Assets:
Loans held for sale	$	658,169	$	5,785	3.52	%	$	294		$	—	—	%	$	604,196	$	5,850	3.87	%
Loans (1) (2) (3):									��
Commercial related credits
Commercial	3,190,755		32,623		4.09		1,232,562			12,312		4.00		3,110,016		34,609		4.35
Commercial loans collateralized by assignment of lease payments	1,647,761		15,438		3.75		1,479,998			14,319		3.87		1,642,427		15,280		3.72
Real estate commercial	2,538,995		27,548		4.34		1,631,041			17,332		4.25		2,611,410		30,249		4.53
Real estate construction	191,257		4,081		8.54		140,920			1,278		3.63		232,679		3,996		6.72
Total commercial related credits	7,568,768		79,690		4.21		4,484,521			45,241		4.04		7,596,532		84,134		4.33
Other loans
Real estate residential	493,366		5,028		4.08		311,466			2,992		3.84		503,211		4,897		3.89
Home equity	246,537		2,468		4.06		263,283			2,712		4.18		256,933		2,711		4.19
Indirect	267,265		3,485		5.29		263,510			3,391		5.22		273,063		3,660		5.32
Consumer loans	72,374		797		4.47		62,616			676		4.38		75,264		785		4.14
Total other loans	1,079,542		11,778		4.42		900,875			9,771		4.40		1,108,471		12,053		4.31
Total loans, excluding purchased credit-impaired and covered loans	8,648,310		91,468		4.29		5,385,396			55,012		4.14		8,705,003		96,187		4.38
Purchased credit-impaired and covered loans	240,376		4,937		8.33		221,481			2,470		4.52		273,136		5,883		8.55
Total loans	8,888,686		96,405		4.40		5,606,877			57,482		4.16		8,978,139		102,070		4.51
Taxable investment securities	1,556,530		9,934		2.55		1,384,371			8,146		2.35		1,649,937		10,651		2.58
Investment securities exempt from federal income taxes (3)	1,126,133		14,021		4.98		935,863			12,410		5.30		1,144,497		14,458		5.05
Federal funds sold	16		—		—		5,889			5		0.34		551		2		0.71
Other interest earning deposits	102,346		62		0.25		187,049			113		0.25		105,446		62		0.23
Total interest earning assets	$	12,331,880	$	126,207	4.15	%	$	8,120,343		$	78,156	3.90	%	$	12,482,766	$	133,093	4.23	%
Non-interest earning assets	2,031,364						1,247,599							1,983,300
Total assets	$	14,363,244					$	9,367,942						$	14,466,066
Interest Bearing Liabilities:
Core funding:
Money market and NOW deposits	$	3,937,707	$	1,595	0.16	%	$	2,727,620		$	848	0.13	%	$	4,023,657	$	1,600	0.16	%
Savings deposits	952,345		120		0.05		862,197			109		0.05		936,960		118		0.05
Certificates of deposit	1,420,320		1,452		0.42		1,210,189			1,174		0.40		1,563,011		1,537		0.39
Customer repurchase agreements	245,875		119		0.20		190,466			96		0.20		241,653		119		0.20
Total core funding	6,556,247		3,286		0.20		4,990,472			2,227		0.18		6,765,281		3,374		0.20
Wholesale funding:
Brokered certificates of deposit (includes fee expense)	476,245		1,478		1.26		223,926			1,638		2.97		606,166		1,634		1.07
Other borrowings	731,688		1,970		1.08		231,805			1,382		2.38		688,418		2,028		1.15
Total wholesale funding	1,207,933		3,448		1.12		455,731			3,020		2.38		1,294,584		3,662		1.08
Total interest bearing liabilities	$	7,764,180	$	6,734	0.35	%	$	5,446,203		$	5,247	0.39	%	$	8,059,865	$	7,036	0.35	%
Non-interest bearing deposits	4,199,948						2,372,866							4,072,797
Other non-interest bearing liabilities	361,685						213,650							316,294
Stockholders' equity	2,037,431						1,335,223							2,017,110
Total liabilities and stockholders' equity	$	14,363,244					$	9,367,942						$	14,466,066
Net interest income/interest rate spread (4)			$	119,473	3.80	%				$	72,909	3.51	%			$	126,057	3.88	%
Taxable equivalent adjustment			6,078							5,581						6,246
Net interest income, as reported			$	113,395						$	67,328					$	119,811
Net interest margin (5)					3.73	%						3.36	%					3.81	%
Tax equivalent effect					0.20	%						0.28	%					0.20	%
Net interest margin on a fully tax equivalent basis (5)					3.93	%						3.64	%					4.01	%

⁽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.

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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, 2015 and December 31, 2014 (dollars in thousands):

	Three months ended							Three months ended
	March 31, 2015							December 31, 2014
	Average Balance			Interest		Yield		Average Balance			Interest		Yield
Loan yield excluding acquisition accounting discount accretion on Taylor Capital loans:
Total loans, as reported	$	8,888,686		$	96,405	4.40	%	$	8,978,139		$	102,070	4.51	%
Less acquisition accounting discount accretion on non-PCI loans	(57,802		)	7,948				(65,975		)	10,082
Less acquisition accounting discount accretion on PCI loans	(35,092		)	628				(37,534		)	833
Total loans, excluding acquisition accounting discount accretion on Taylor Capital loans	$	8,981,580		$	87,829	3.97	%	$	9,081,648		$	91,155	3.98	%
Net interest margin on a fully tax equivalent basis, excluding acquisition accounting discount accretion on Taylor Capital loans:
Total interest earning assets, as reported	$	12,331,880		$	119,473	3.93	%	$	12,482,766		$	126,057	4.01	%
Less acquisition accounting discount accretion on non-PCI loans	(57,802		)	7,948				(65,975		)	10,082
Less acquisition accounting discount accretion on PCI loans	(35,092		)	628				(37,534		)	833
Total interest earning assets, excluding acquisition accounting discount accretion on Taylor Capital loans	$	12,424,774		$	110,897	3.62	%	$	12,586,275		$	115,142	3.63	%

Provision for credit losses will be recognized on acquired Taylor Capital loans as they renew and will largely offset the positive impact of the loan discount accretion on non-purchased credit-impaired loans. During the first quarter of 2015 and fourth quarter of 2014, a provision for credit losses of approximately $5.5 million and $7.3 million, respectively, was recorded related to acquired Taylor Capital loans.

The table below reflects the impact the acquisition accounting loan discount accretion and provision for credit losses on Taylor Capital loans had earnings for the three months ended March 31, 2015 and December 31, 2014 (dollars in thousands):

	1Q15		4Q14
Acquisition accounting discount accretion on acquired loans	$	8,576	$	10,915
Provision for credit losses on acquired loans	5,524		7,271
Earnings impact of discount accretion and merger related provision	3,052		3,644
Tax expense	1,211		1,467
Earnings impact of discount accretion and merger related provision, net of tax	$	1,841	$	2,177

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