EXHIBIT 99.1
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FOR IMMEDIATE RELEASE
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For: MAF Bancorp, Inc. Contacts: Jerry A. Weberling, Chief
55th Street & Holmes Avenue Financial Officer
Clarendon Hills, IL 60514 Michael J. Janssen, Senior
Vice President
www.mafbancorp.com (630) 325-7300
MAF BANCORP REPORTS RECORD THIRD QUARTER RESULTS OF $.71 PER SHARE,
INCLUDING $.11 PER SHARE GAIN ON SALE OF SERVICING RIGHTS
Clarendon Hills, Illinois, October 19, 2000 - MAF Bancorp, Inc. (MAFB) announced
today that earnings per share for the quarter ended September 30, 2000 increased
36% to $.71 per diluted share, compared to $.52 per diluted share reported in
last year's third quarter. The current period results included a pre-tax gain of
$4.3 million on the sale of mortgage servicing rights, equal to $.11 per diluted
share on an after-tax basis. Exclusive of this gain, earnings were a record $.60
per diluted share, advancing by 15% over the prior year quarter.
Net income for the period totaled $16.5 million compared to $12.9 million in the
year earlier period. Cash earnings per share (diluted), which excludes
amortization of goodwill and deposit base intangibles, totaled $.75 in the
current quarter compared to $.55 in last year's third quarter. Return on average
equity and return on average assets were 18.08% and 1.32%, respectively, in the
current quarter compared to 14.77% and 1.19% in last year's comparable period.
Exclusive of the gain on sale of servicing rights, return on average equity and
return on average assets were 15.21% and 1.11%, respectively, in the current
quarter.
In addition to the loan servicing sale gain, the strong results for the quarter
were attributable to higher net interest income, which increased by nearly 9%
from a year ago, and growth in deposit account service fees which improved by
28% from the 1999 third quarter. These improvements were partially offset by
lower gains on sales of loans and investment securities and an increase in
non-interest expense and income tax expense. Earnings per share was positively
impacted by a lower number of outstanding shares resulting from the ongoing
stock repurchase program.
Net interest income, after provision for loan losses, totaled $31.3 million for
the quarter ended September 30, 2000 compared to $29.0 million a year ago and
$31.8 million in the quarter ended June 30, 2000. The net interest margin
declined to 2.67% compared to 2.75% for the quarter ended June 30, 2000. In last
year's third quarter, the net interest margin was 2.85%. The yield on average
interest-earning assets increased 12 basis points to 7.38% over the past three
months while the cost of interest-bearing liabilities increased by 20 basis
points to 5.07%. A rising short-term rate environment, coupled with the flat to
inverted yield curve, led to a compression in the net interest spread and a
corresponding reduction in the net interest margin. Management expects that
there will be continued pressure on the net interest margin in the near term,
due to higher funding costs from upward repricing of certificates of deposit and
borrowed funds.
Average interest-earning assets in the current quarter grew to $4.78 billion
from $4.12 billion reported for last year's third quarter and up from $4.67
billion reported for the quarter ended June 30, 2000.
Increases in loans receivable balances led to the growth in interest-earning
assets. The balance sheet loan growth was generated from adjustable rate
single-family mortgages and consumer loans, primarily home equity lines of
credit. New marketing initiatives have resulted in a 42% annualized increase in
consumer loans since the start of the year, with balances totaling $201 million
at September 30, 2000. Overall loan volume totaled $386.1 million in the current
quarter, down from the $456.9 million reported for the quarter ended September
30, 1999 and the $429.3 million reported for the quarter ended June 30, 2000.
The lower loan volume was primarily due to a decline in mortgage refinancing
activity compared to last year and the recent decision to significantly reduce
wholesale lending.
Non-interest income increased to $13.2 million in the current quarter, compared
to $8.7 million reported in the third quarter of last year. Exclusive of the
$4.3 million gain on the servicing rights sale, total non-interest income
remained steady at $8.8 million. Positive results in real estate development
income and higher fee income from deposit account products were offset by
reduced gains on sales of loans and investment securities, and lower loan
servicing fee income.
The Company sold mortgage servicing rights relating to approximately $600
million of mortgage loans, or approximately 46% of the Company's total portfolio
of loans serviced for others. Allen Koranda, Chairman of the Board and Chief
Executive Officer commented, "We historically have not been a seller of
servicing rights and we expect to continue to service loans we sell to others.
However, we felt that prevailing prices for servicing were very attractive,
offering a compelling financial opportunity." As a result of this sale,
management expects that loan servicing fee income will decrease by approximately
$700,000-$900,000 in 2001.
The Company's real estate development operation reported outstanding results in
the current quarter, with income totaling $2.6 million. A total of 72
residential lots were sold in the current quarter compared to 22 lots in last
year's third quarter. The prior year period's income of $2.5 million included a
pre-tax gain of $2.3 million on the sale of two commercial parcels. Demand in
the Company's Tallgrass of Naperville development continues to be strong, with
margins expanding and income totaling $2.4 million on sales of 70 lots in the
current quarter. The demand for lots in the Tallgrass subdivision has reduced
available inventory pending completion of improvements in the next phase of the
project. As a result, real estate development income in the next quarter is
expected to be significantly lower than in the current quarter. Based on the
strong demand in Tallgrass and a new project in Sugar Grove, IL expected to
commence in 2001, management currently expects that pre-tax income from real
estate development in 2001 should be in the range of $7.0-$9.0 million.
Deposit account service fees totaled $3.4 million for the current quarter, up
28% from the $2.7 million reported for the quarter ended September 30, 1999.
Deposit account fee income continues to be one of the Company's strongest
revenue growth areas. The recent increase in the year-over-year growth rate for
deposit account service fees reflects the success of efforts aimed at growing
the Bank's transaction account base. Total checking accounts exceeded 113,300 at
quarter end, increasing at an annualized rate of 14.0% during the first nine
months of this year.
Higher interest rates, competitive pricing pressures, and a higher level of
adjustable rate loan originations led to continued low mortgage banking profits
resulting from loan sales. Total loan sales generated gains of $272,000 in the
current quarter compared to $464,000 a year ago. Loan sales in the current
quarter totaled $98.6 million compared to $140.4 million for the quarter ended
September 30, 1999. Recently, the Bank has begun to experience a shift in
consumers' preferences to fixed-rate mortgage loans, due in
part to a decline in long-term interest rates. Because the Company generally
sells fixed rate mortgage originations, this change may result in higher
mortgage banking profits in 2001 from gains on sale of loans, and lead to more
moderate balance sheet growth next year.
Non-interest expense totaled $18.4 million in the current quarter, compared to
$17.2 million reported for the quarter ended September 30, 1999 and $18.0
million for the quarter ended June 30, 2000. Compensation and benefits expense
totaled $10.4 million in the current quarter, compared to $9.6 million a year
ago. This change was primarily due to normal compensation increases and
compensation associated with three additional branch locations. Office occupancy
expense rose $272,000 due primarily to operational expenses at three additional
branches acquired in the past year. Amortization of intangibles increased to
$1.2 million from $1.0 million related to deposits acquired at three additional
branches in the past year.
The ratio of total non-interest expense to average assets improved to 1.47% for
the current quarter, compared to 1.59% in last year's third quarter and 1.47% in
the second quarter of 2000. The Company's efficiency ratio, a measure of the
amount of expense needed to generate each dollar of revenue, was 45.3%,
excluding the gain on sale of servicing rights. This measure is considerably
better than peer group averages. Income tax expense totaled $9.6 million in the
current quarter, equal to an effective income tax rate of 36.7%, compared to
$7.7 million and an effective tax rate of 37.3% for the quarter ended September
30, 1999.
Asset quality remained excellent during the quarter. Non-performing assets at
September 30, 2000 increased to $17.3 million, or .34% of total assets, compared
to $16.2 million or .33% of total assets at June 30, 2000. The Company recorded
a provision for loan losses of $500,000 in the current quarter, with net
charge-offs totaling $203,000. The Bank's allowance for loan losses was $18.2
million at September 30, 2000, equal to 114% of total non-performing loans, 105%
of total non-performing assets and .43% of total loans receivable. At September
30, 2000, a total of 89% of the Company's loan portfolio consisted of
one-to-four family residential mortgage loans.
For the nine months ended September 30, 2000, net income totaled $43.3 million
compared to $37.8 million for the comparable period last year. Earnings per
share increased to $1.83 per diluted share compared to $1.51 per diluted share
for the first three quarters of 1999, an increase of 21%. Exclusive of the
servicing rights gain in 2000, the year-over-year earnings per share increase
was 14% for the nine-month period. Return on average equity was 15.17% for the
nine months ended September 30, 2000 and return on average assets was 1.11%,
both excluding the gain on sale of servicing rights.
Net interest income after provision for loan losses totaled $93.3 million, up
8.6% from the $86.0 million reported for the first nine months of 1999. The net
interest margin declined to 2.71% in the current nine-month period compared to
2.92% a year ago, while average interest-earning assets expanded by 17.1% to
$4.65 billion from $3.97 billion last year.
Non-interest income increased by $3.1 million for the first nine months of 2000
compared to last year, the result of the gain on the servicing rights sale,
improved real estate development income and higher deposit account fees, offset
by $3.8 million in lower mortgage banking revenue and investment securities
gains. Income from real estate operations improved by $785,000, or 11.2%, and
deposit account service fees increased by $1.7 million, or 22.7%. Non-interest
expenses increased by $4.2 million, or 8.4%, due in part to the Company's
internal growth and branch acquisitions as well as from increased marketing
costs relating to the Company's radio-based branding campaign. This initiative,
along with heavier print advertising for deposit products, has been instrumental
in expanding total deposits and new retail checking account openings.
Total assets increased to $5.07 billion at September 30, 2000, up $80.5 million
from the $4.99 billion reported at June 30, 2000. The growth in assets during
the three-month period was driven by an increase in loans receivable of $92.3
million. The balance of loans receivable at September 30, 2000 stood at $4.29
billion. Deposit balances grew by $29.7 million in the quarter, totaling $2.91
billion at September 30, 2000.
Borrowed funds increased by $22.0 million to $1.69 billion at September 30,
2000, compared to $1.67 billion at June 30, 2000. Total stockholders' equity was
$373.9 million at September 30, 2000, resulting in a stated book value per share
of $16.19 and a tangible book value per share of $13.16. The Company repurchased
88,500 shares of its common stock during the current quarter at an average price
of $19.58 per share. The Bank's tangible, core and risk-based capital
percentages of 6.19%, 6.19% and 11.83%, respectively, at September 30, 2000
exceeded all regulatory requirements by a significant margin.
MAF Bancorp is the parent company of Mid America Bank, a federally chartered
stock savings bank. The Bank operates a network of 27 retail banking offices
primarily in Chicago and its western suburbs. The Company's common stock trades
on the Nasdaq Stock Market under the symbol MAFB.
Forward-Looking Information
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Statements contained in this news release that are not historical facts may
constitute forward-looking statements (within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended) which involve significant risks and
uncertainties. The Company intends such forward-looking statements to be covered
by the safe harbor provisions for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995, and is including this
statement for purposes of invoking these safe harbor provisions. The Company's
ability to predict results or the actual effect of future plans or strategies is
inherently uncertain. Factors which could have a material adverse effect on the
operations and could affect the outlook or future prospects of the Company
include, but are not limited to, unanticipated changes in interest rates,
general economic conditions, legislative/regulatory changes, monetary and fiscal
policies of the U.S. Government, including policies of the U.S. Treasury and the
Federal Reserve Board, the quality or composition of the Company's loan or
investment portfolios, demand for loan products, secondary mortgage market
conditions, deposit flows, competition, demand for financial services and
residential real estate in the Company's market area, the possible short-term
dilutive effect of potential acquisitions, and changes in accounting principles,
policies and guidelines. These risks and uncertainties should be considered in
evaluating forward-looking statements and undue reliance should not be placed on
such statements.
MAF BANCORP, INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2000 1999 2000 1999
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(UNAUDITED) (UNAUDITED)
Interest income ...................................... $88,310 72,119 253,032 208,452
Interest expense ..................................... 56,475 42,798 158,593 121,685
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Net interest income ............................... 31,835 29,321 94,439 86,767
Provision for loan losses ............................ 500 300 1,100 800
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Net interest income after provision for loan losses 31,335 29,021 93,339 85,967
Non-interest income:
Gain (loss) on sale of:
Loans receivable ................................ 272 464 476 2,225
Mortgage-backed securities ...................... -- -- (700) 113
Investment securities ........................... 4 494 137 1,032
Foreclosed real estate .......................... (27) (241) 177 (121)
Mortgage loan servicing rights .................. 4,337 -- 4,337 --
Income from real estate operations ................ 2,625 2,478 7,801 7,016
Deposit account service charges ................... 3,439 2,679 9,109 7,425
Loan servicing fee income ......................... 365 751 1,394 1,781
Brokerage commissions ............................. 586 719 1,740 1,938
Other ............................................. 1,585 1,399 4,292 4,287
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Total non-interest income ....................... 13,186 8,743 28,763 25,696
Non-interest expense:
Compensation and benefits ......................... 10,408 9,554 30,665 28,289
Office occupancy and equipment .................... 2,071 1,799 5,976 5,424
Federal deposit insurance premiums ................ 153 390 449 1,187
Data processing ................................... 784 665 2,236 1,856
Advertising and promotion ......................... 830 1,049 2,720 2,404
Amortization of goodwill .......................... 812 662 2,307 1,962
Amortization of core deposit intangibles .......... 355 289 1,004 943
Other ............................................. 3,025 2,809 8,764 7,856
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Total non-interest expense ...................... 18,438 17,217 54,121 49,921
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Income before income taxes ...................... 26,083 20,547 67,981 61,742
Income taxes ......................................... 9,570 7,671 24,688 23,948
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Net income ...................................... $16,513 12,876 43,293 37,794
======= ====== ======= =======
Basic earnings per share ............................. $ .71 .53 1.85 1.55
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Diluted earnings per share ........................... $ .71 .52 1.83 1.51
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MAF BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands)
SEPTEMBER 30, DECEMBER 31,
2000 1999
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(UNAUDITED)
ASSETS
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Cash and due from banks ................................................. $ 82,836 $ 71,721
Interest-bearing deposits ............................................... 18,713 51,306
Federal funds sold ...................................................... 89,772 35,013
Investment securities, at cost (fair value of $12,802 and $12,321) ...... 12,361 11,999
Investment securities available for sale, at fair value ................. 173,129 194,105
Stock in Federal Home Loan Bank of Chicago, at cost ..................... 82,275 75,025
Mortgage-backed securities, at amortized cost
(fair value of $81,576 and $92,095) .................................. 83,939 94,251
Mortgage-backed securities available for sale, at fair value ............ 24,746 39,703
Loans receivable held for sale .......................................... 52,156 12,601
Loans receivable, net of allowance for losses of $18,167 and $17,276 .... 4,236,696 3,871,968
Accrued interest receivable ............................................. 27,713 23,740
Foreclosed real estate .................................................. 1,321 7,415
Real estate held for development or sale ................................ 6,348 15,889
Premises and equipment, net ............................................. 46,946 42,489
Other assets ............................................................ 64,789 49,640
Intangible assets, net of accumulated amortization of $13,866 and $10,555 70,028 61,200
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$5,073,768 $4,658,065
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Liabilities:
Deposits ............................................................. $2,906,240 $2,699,242
Borrowed funds ....................................................... 1,687,075 1,526,363
Advances by borrowers for taxes and insurance ........................ 41,593 34,767
Accrued expenses and other liabilities ............................... 64,957 44,772
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Total liabilities .................................................. 4,699,865 4,305,144
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Stockholders' equity:
Preferred stock, $.01 par value; authorized
5,000,000 shares; none outstanding ................................. -- --
Common stock, $.01 par value;
80,000,000 shares authorized; 25,420,650 shares issued;
23,094,170 and 23,911,508 shares outstanding ....................... 254 254
Additional paid-in capital ........................................... 198,060 194,874
Retained earnings, substantially restricted .......................... 227,126 198,156
Stock in Gain Deferral Plan; 223,453 shares .......................... 511 511
Accumulated other comprehensive loss, net of tax ..................... (1,329) (3,675)
Treasury stock, at cost; 2,549,933 and 1,732,595 shares .............. (50,719) (37,199)
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Total stockholders' equity ....................................... 373,903 352,921
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Commitments and contingencies ...........................................
$5,073,768 $4,658,065
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MAF BANCORP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA
(In thousands, except share data)
SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,
2000 1999 1999
---- ---- ----
Book value per share ................................................... $ 16.19 $ 14.76 $ 14.45
Tangible book value per share .......................................... 13.16 12.20 11.87
Stockholders' equity to total assets ................................... 7.37% 7.58% 7.92%
Tangible capital ratio (Bank only) ..................................... 6.19 6.32 6.35
Core capital ratio (Bank only) ......................................... 6.19 6.32 6.35
Risk-based capital ratio (Bank only) ................................... 11.83 12.32 12.37
Common shares outstanding:
Actual .............................................................. 23,094,170 23,911,508 24,266,205
Basic (weighted average) ............................................ 23,121,187 24,043,647 24,196,070
Diluted (weighted average) .......................................... 23,418,559 24,593,038 24,813,428
Non-performing loans .................................................. $ 15,974 $ 15,650 $ 13,660
Non-performing assets ................................................. 17,295 23,065 21,463
Allowance for loan losses ............................................. 18,167 17,276 17,012
Non-performing loans to total loans .................................... .38% .40% .37%
Non-performing assets to total assets .................................. .34 .50 .48
Allowance for loan losses to total loans ............................... .43 .44 .46
Mortgage loans serviced for others ..................................... $ 686,419 $ 1,226,874 $ 1,215,419
Investment in Bank real estate subsidiaries ............................ 2,428 7,930 8,853
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
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2000 1999 2000 1999
---- ---- ---- ----
Average balance data:
Total assets ........................................................ $ 5,013,319 $4,333,110 $4,882,945 $4,191,760
Loans receivable .................................................... 4,256,770 3,630,144 4,108,961 3,484,200
Interest-earning assets ............................................ 4,782,223 4,118,323 4,653,324 3,972,324
Deposits ............................................................ 2,748,745 2,559,086 2,677,682 2,549,147
Interest-bearing liabilities ....................................... 4,417,146 3,786,950 4,305,975 3,655,971
Stockholders' equity ................................................ 365,368 348,603 357,422 342,052
Performance ratios (annualized):
Return on average assets ............................................ 1.32% 1.19% 1.18% 1.20%
Return on average equity ............................................ 18.08 14.77 16.15 14.73
Cash return on average tangible assets .............................. 1.41 1.28 1.27 1.30
Cash return on average tangible equity .............................. 23.10 18.93 20.81 19.06
Average yield on interest-earning assets ........................... 7.38 7.00 7.25 7.00
Average cost of interest-bearing liabilities ....................... 5.07 4.48 4.91 4.45
Interest rate spread ................................................ 2.31 2.52 2.34 2.55
Net interest margin ................................................. 2.67 2.85 2.71 2.92
Average interest-earning assets to average
interest-bearing liabilities ...................................... 108.26 108.75 108.07 108.65
Non-interest expense to average assets .............................. 1.47 1.59 1.48 1.59
Non-interest expense to average assets
and loans serviced for others ..................................... 1.18 1.25 1.48 1.59
Efficiency ratio .................................................... 40.96 45.83 43.73 44.80
Loan originations and purchases ........................................ $ 386,098 $ 456,881 $1,122,327 $ 1,312,005
Loans and mortgage-backed securities sold ............................ 98,564 140,382 208,048 352,251
Cash dividends declared per share .................................... .10 .09 .29 .25