EXHIBIT 99
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FOR IMMEDIATE RELEASE
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 SECOND QUARTER RESULTS
OF $.60 PER DILUTED SHARE
Clarendon Hills, Illinois, July 19, 2001 - MAF Bancorp, Inc. (MAFB) announced
today that earnings per share for the second quarter ended June 30, 2001 totaled
$.60 per diluted share, compared to $.58 per diluted share reported for the
quarter ended June 30, 2000. Return on average equity and return on average
assets were 14.17% and 1.06%, respectively, in the current quarter compared to
15.43% and 1.12% in last year's comparable period. Cash earnings per share
(diluted), which excludes amortization of goodwill and deposit base intangibles,
totaled $.64 in the current quarter compared to $.62 in last year's second
quarter.
Net interest income remained steady with the level of a year ago, totaling $31.9
million for the current quarter compared to $32.1 million in last year's second
quarter. Over the past three months, the net interest margin contracted to 2.56%
compared to 2.66% for the quarter ended March 31, 2001. In last year's second
quarter, the net interest margin was 2.75%. The drop in the net interest margin
was primarily driven by the faster pace at which the Company's loan portfolio
has repriced downward, compared to the Company's funding costs. Heavy
refinancing activity during the quarter resulted in a higher level of overnight
deposits and investment securities and a decline in the overall yield on the
loan portfolio. The Company currently expects its net interest margin to
moderate in the third quarter and trend upward near the end of 2001 and into
2002, as loan refinancings slow and certificates of deposit and borrowings
mature and/or reprice at lower rates. With the heavy loan refinancing activity
and related loan sales, interest-earning asset growth continued to be modest.
Average interest-earning assets in the current quarter grew to $4.99 billion,
compared to $4.67 billion reported for last year's second quarter and $4.90
billion reported for the quarter ended March 31, 2001. The growth in
interest-earning assets was primarily attributable to increases in investment
securities.
Management currently anticipates that with the steeper yield curve environment,
and its corresponding impact on the Company's net interest margin and loan
origination activity, earnings for 2001 should be in the range of $2.45-$2.50
per diluted share. This earnings per share range is based in part on estimated
pre-tax income from the Company's real estate development operation of $8.5-$9.5
million for 2001.
Loan origination volume totaled a record $693.4 million in the current quarter,
up more than 61% from the $429.3 million reported for the second quarter of last
year and also higher than the $515.5 million reported for the quarter ended
March 31, 2001. Fixed-rate loans remain the preferred choice of customers, a
trend that led to substantial loan sale gains in the quarter as the Company
generally sells longer-term fixed-rate loans. Given management's current outlook
for mortgage interest rates, the Company expects fixed-rate loan origination
activity to continue to be strong for the next couple of quarters, leading to
continued loan sale gains and little balance sheet growth.
Non-interest income increased 34.3% to $10.5 million in the current quarter,
compared to $7.8 million reported in the second quarter of last year. Increases
in gains on sales of loans and higher deposit account service fees offset lower
income from real estate development operations and lower loan servicing fee
income caused by increased amortization expense resulting from higher than
projected prepayments of loans serviced for others. The results from the prior
year period also included a loss of approximately $700,000 on a sale of a
mortgage-backed security.
The Company's real estate development operations contributed $1.3 million to
non-interest income in the current quarter, compared to $2.7 million of income
reported for the quarter ended June 30, 2000. A total of 33 residential lots
were sold in the current period compared to 169 lots in last year's second
quarter. All of the sales in the current period were in the Company's Tallgrass
of Naperville development. Given the low amount of currently available
inventory, the Company expects real estate income in the third quarter of 2001
to be less than $400,000. However, the Company is working on the next phase of
the Tallgrass development and expects to sell and close on a number of these new
lots prior to the end of the fourth quarter of this year. Assuming no delays in
anticipated closings, management expects that pre-tax income from real estate
development should be in the range of $8.5-$9.5 million for 2001.
Deposit account service fees totaled $4.1 million for the current quarter, up
32.5% from the $3.1 million reported for the quarter ended June 30, 2000 and up
19.9% from the results in the first quarter of 2001. The continued strong growth
in deposit account fee income is driven by both fee increases and expansion of
the Bank's checking account base. Checking accounts totaled 122,600 at June 30,
2001, increasing at an annualized rate of 12.5% during the first six months of
the current year.
Gains on sales of mortgage loans totaled $1.9 million in the current quarter
compared to $147,000 a year ago, as loan sale volume expanded to $373.5 million
compared to $73.8 million for the second quarter of last year. Increased
prepayment rates in the Bank's loans serviced for others portfolio, due to
higher loan refinancings, led to a $63,000 loss in the Company's loan servicing
operation compared to loan servicing income of $473,000 last year.
Non-interest expense totaled $20.2 million in the current quarter, compared to
$18.0 million reported for the quarter ended June 30, 2000 and $19.9 million for
the quarter ended March 31, 2001. Compensation and benefits expense totaled
$11.7 million in the current quarter, compared to $10.1 million a year ago. This
change was primarily due to normal salary increases, higher benefit costs and
increased staffing costs related to the higher loan volume. Office occupancy
expense rose $220,000 due primarily to higher utilities and maintenance
expenses. Advertising expenses increased $211,000 due to increased spending
relating to the Company's branding campaign.
The ratio of total non-interest expense to average assets was 1.55% for the
current quarter, compared to 1.47% in last year's second quarter and 1.56% in
the first quarter of 2001. The Company's efficiency ratio, a measure of the
amount of expense needed to generate each dollar of revenue, was 48.3%. This
measure continues to be considerably better than peer group averages. Income tax
expense totaled $8.2 million in the current quarter, equal to an effective
income tax rate of 37.2%, compared to $7.9 million and an effective tax rate of
36.7% for the quarter ended June 30, 2000.
2
Asset quality remained excellent during the quarter. Non-performing assets at
June 30, 2001 were $17.8 million, or .34% of total assets, compared to $19.2
million or .37% of total assets at March 31, 2001. A year ago, non-performing
assets totaled $16.2 million, or .33% of total assets. The Company did not
record a provision for loan losses in the current quarter, and recorded $58,000
of net charge-offs during the quarter. The Bank's allowance for loan losses was
$18.2 million at June 30, 2001, equal to 110% of total non-performing loans,
102% of total non-performing assets and .44% of total loans receivable. At June
30, 2001, 88% of the Company's loan portfolio consisted of one-to-four family
residential mortgage loans.
For the six months ended June 30, 2001, net income totaled $28.0 million
compared to $26.8 million for the comparable period last year. Earnings per
share increased to $1.20 per diluted share compared to $1.13 per diluted share,
an increase of 6.2%. Return on average equity was 14.30% for the current
six-month period and return on average assets was 1.08%.
Net interest income totaled $64.3 million for the first six months of 2001,
compared to the $62.6 million reported for the first six months of 2000. The net
interest margin declined to 2.61% in the current six-month period compared to
2.73% a year ago, while average interest-earning assets expanded by 7.8% to
$4.94 billion from $4.59 billion last year.
Non-interest income increased by $4.8 million, or 30.7%, for the first six
months of 2001 compared to 2000. This increase was due to higher gains on sales
of loans and increased deposit account service fees, which were partially offset
by lower income from real estate development operations and loan servicing fees.
Non-interest expenses increased by $4.5 million, or 12.6%, due in part to
increased costs associated with additional branch locations and the much higher
loan volume, and from increased marketing costs relating to an expansion of the
Company's branding campaign. This initiative, along with heavier print
advertising for deposit products, has been instrumental in increasing total
deposits and new retail checking account openings.
Total assets decreased to $5.23 billion at June 30, 2001, down $32.4 million
from the $5.26 billion reported at March 31, 2001. The decline in assets during
the three-month period was attributable to a decrease in loans receivable of
$152.1 million as lower mortgage interest rates led to heavy prepayments and
higher loan sales. The balance of loans receivable at June 30, 2001 stood at
$4.21 billion. Deposit balances grew by $58.1 million in the quarter, totaling
$3.13 billion at June 30, 2001 compared to $3.07 billion at March 31, 2001. This
marked the third consecutive quarter of strong deposit growth.
Borrowed funds declined by $84.0 million to $1.60 billion at June 30, 2001,
compared to $1.68 billion at March 31, 2001, due to an increase in deposits.
Total stockholders' equity was $394.9 million at June 30, 2001, resulting in a
stated book value per share of $17.55 and a tangible book value per share of
$14.59. The Company repurchased 243,200 shares of its common stock during the
current quarter at an average price of $26.71 per share. The Bank's tangible,
core and risk-based capital percentages of 6.47%, 6.47% and 11.95%,
respectively, at June 30, 2001 exceeded all minimum regulatory requirements.
On July 5, 2001, the Company announced that it had agreed to acquire
privately-held Mid Town Bancorp, Inc., based in Chicago. Mid Town with assets of
$322 million and deposits of $283 million at March 31, 2000, will add four
offices to the Company's Chicago region. The transaction is subject to
regulatory approval and the approval of Mid Town's shareholders. The Company
expects the transaction to close in the fourth quarter of 2001.
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Outlook for 2002
----------------
In providing its first outlook for next year, the Company indicated it currently
expects earnings per share for 2002 in the range of $2.65-$2.75 per diluted
share. The projected earnings per share results for 2002 assume the completion
of the Mid Town acquisition in the fourth quarter of 2001. The earnings per
share estimate is also based on current accounting for purchase transactions,
which requires goodwill to be amortized through the income statement. The
estimate does not reflect the provisions of Financial Accounting Standards Board
Statement 141, "Business Combinations" or Statement 142, "Goodwill and Other
Intangible Assets," which are expected to be issued in late July 2001.
The Company's 2002 projections assume a favorable interest rate environment in
2002, which is expected to result in an increase in the interest rate spread and
a corresponding improvement in both the net interest margin and overall net
interest income next year. The Company indicated it was looking for its real
estate development operation to contribute approximately $9.5-$11.5 million in
pre-tax earnings next year and also to report continued strong growth in fee
income. The projections also assume housing and mortgage activity in the Bank's
markets will remain strong.
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
---------------------------
Statements contained in this news release that are not historical facts
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. Forward-looking
statements, which are based on certain assumptions and describe future plans,
strategies and expectations of the Company, are generally identifiable by use of
the words "believe," "expect," "intend," "anticipate," "estimate," "project,"
"plan," or similar expressions. The Company's ability to predict results or the
actual effect of future plans or strategies is inherently uncertain and actual
results may differ from those predicted. The Company undertakes no obligation to
update these forward-looking statements in the future. Factors which could have
a material adverse effect on the operations and could affect the outlook or
future prospects of the Company and its subsidiaries 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 or Mid Town Bancorp'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, unanticipated slowdowns in
real estate lot sales or problems in closing pending real estate contracts,
delays in real estate development projects, higher than anticipated costs, or
lower than the anticipated revenues, associated with the Mid Town Bancorp
acquisition or the possible short-term dilutive effect of other potential
acquisitions, if any, 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.
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NOTE: The following notice is included to meet certain legal requirements.
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The Company will be filing a proxy statement/prospectus and other documents
regarding the proposed transaction with Mid Town Bancorp, Inc. with the
Securities and Exchange Commission. Mid Town shareholders are urged to read the
proxy statement/prospectus when it becomes available, because it will contain
important information about the Company and Mid Town Bancorp, Inc., and the
proposed transaction. When available, copies of this proxy statement/prospectus
will be mailed to Mid Town shareholders ,and it and other documents filed by the
Company with the SEC may be obtained free of charge at the SEC's web site at
http://www.sec.gov, or by directing a request to the Company at 55th Street &
Holmes Avenue, Clarendon Hills, IL 60514.
5
MAF BANCORP, INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2001 2000 2001 2000
---- ---- ---- ----
(UNAUDITED) (UNAUDITED)
Interest income........................................ $87,907 $84,631 $177,054 $164,722
Interest expense....................................... 56,056 52,570 112,705 102,118
------- ------- -------- --------
Net interest income................................. 31,851 32,061 64,349 62,604
Provision for loan losses.............................. - 300 - 600
------- ------- -------- --------
Net interest income after provision for loan losses. 31,851 31,761 64,349 62,004
Non-interest income:
Gain (loss) on sale of:
Loans receivable held for sale................... 1,906 147 2,597 204
Mortgage-backed securities....................... - (700) - (700)
Investment securities............................ 390 - 560 133
Foreclosed real estate........................... 147 132 322 204
Income from real estate operations.................. 1,321 2,701 4,670 5,176
Deposit account service charges..................... 4,107 3,100 7,533 5,670
Loan servicing fee income........................... (63) 473 (326) 1,029
Brokerage commissions............................... 637 476 1,182 1,154
Other............................................... 2,056 1,489 3,822 2,707
------- ------- -------- --------
Total non-interest income........................ 10,501 7,818 20,360 15,577
Non-interest expense:
Compensation and benefits........................... 11,704 10,112 23,045 20,257
Office occupancy and equipment...................... 2,210 1,990 4,434 3,905
Federal deposit insurance premiums.................. 147 149 302 296
Data processing..................................... 746 736 1,510 1,452
Advertising and promotion........................... 1,099 888 2,347 1,890
Amortization of goodwill............................ 811 811 1,622 1,495
Amortization of core deposit intangibles............ 319 373 659 649
Other............................................... 3,211 2,938 6,276 5,739
------- ------- -------- --------
Total non-interest expense....................... 20,247 17,997 40,195 35,683
------- ------- -------- --------
Income before income taxes....................... 22,105 21,582 44,514 41,898
Income taxes........................................... 8,225 7,911 16,556 15,118
------- ------- -------- --------
Net income....................................... $13,880 $13,671 27,958 26,780
======= ======= ======== ========
Basic earnings per share............................... $ .61 $ .59 1.23 1.14
======= ======= ======== ========
Diluted earnings per share............................. .60 .58 1.20 1.13
======= ======= ======== ========
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MAF BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands)
JUNE 30, DECEMBER 31,
ASSETS 2001 2000
------ ----------- ------------
(UNAUDITED)
Cash and due from banks................................................... $ 94,491 $ 77,860
Interest-bearing deposits................................................. 52,128 53,392
Federal funds sold........................................................ 144,367 139,268
Investment securities, at cost (fair value of $13,290 at December 31,
2000).................................................................. - 12,633
Investment securities available for sale, at fair value................... 283,764 174,494
Stock in Federal Home Loan Bank of Chicago, at cost....................... 117,968 84,775
Mortgage-backed securities, at amortized cost (fair value of $79,137 at
December 31, 2000)..................................................... - 80,301
Mortgage-backed securities available for sale, at fair value.............. 103,254 24,084
Loans receivable held for sale............................................ 87,036 41,074
Loans receivable, net of allowance for losses of $18,221 and $18,258...... 4,126,468 4,287,040
Accrued interest receivable............................................... 27,859 27,888
Foreclosed real estate.................................................... 1,260 1,808
Real estate held for development or sale.................................. 7,721 12,643
Premises and equipment, net............................................... 50,144 48,904
Other assets.............................................................. 66,482 60,560
Intangible assets, net of accumulated amortization of $17,311 and $15,030. 66,583 68,864
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$5,229,525 $5,195,588
========== ==========
Liabilities and Stockholders' Equity
Liabilities:
Deposits.................................................................. $3,125,251 $2,974,213
Borrowed funds............................................................ 1,600,900 1,728,900
Advances by borrowers for taxes and insurance............................. 38,992 38,354
Accrued expenses and other liabilities.................................... 69,523 66,392
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Total liabilities......................................................... 4,834,666 4,807,859
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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; 22,504,396 and 23,110,022 shares outstanding............ 254 254
Additional paid-in capital................................................ 198,144 198,068
Retained earnings, substantially restricted............................... 260,712 237,867
Stock in Gain Deferral Plan; 223,453 shares............................... 511 511
Accumulated other comprehensive income, net of tax........................ 1,993 1,435
Treasury stock, at cost; 3,139,707 and 2,534,081 shares................... (66,755) (50,406)
----------- -----------
Total stockholders' equity................................................ 394,859 387,729
----------- -----------
$5,229,525 $5,195,588
=========== ===========
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MAF BANCORP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA
(In thousands, except share data)
JUNE 30 DECEMBER 31, JUNE 30,
2001 2000 2000
------- ------------ --------
Book value per share.......................... $17.55 $16.78 $15.51
Tangible book value per share................. 14.59 13.80 12.44
Stockholders' equity to total assets.......... 7.55% 7.46% 7.19%
Tangible capital ratio (Bank only)............ 6.47 6.32 6.03
Core capital ratio (Bank only)................ 6.47 6.32 6.03
Risk-based capital ratio (Bank only).......... 11.95 11.98 11.59
Common shares outstanding:
Actual..................................... 22,504,396 23,110,022 23,158,787
Basic (weighted average)................... 22,585,594 23,097,972 23,245,139
Diluted (weighted average)................. 23,087,008 23,455,319 23,518,493
Non-performing loans.......................... $16,580 $16,709 $15,262
Non-performing assets......................... 17,840 18,517 16,243
Allowance for loan losses..................... 18,221 18,258 17,870
Non-performing loans to total loans........... .40% .39% .36%
Non-performing assets to total assets......... .34 .36 .33
Allowance for loan losses to total loans...... .44 .42 .43
Mortgage loans serviced for others............ $1,117,886 $785,350 $1,247,136
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THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2001 2000 2001 2000
--------------------- ---------------------
Average balance data:
Total assets............................... $5,214,100 $4,903,009 $5,171,614 $4,817,044
Loans receivable........................... 4,344,926 4,118,049 4,356,519 4,034,245
Interest-earning assets.................... 4,990,504 4,668,637 4,944,829 4,588,169
Deposits................................... 2,913,615 2,700,355 2,876,704 2,641,760
Interest-bearing liabilities............... 4,552,779 4,325,660 4,526,019 4,249,779
Stockholders' equity....................... 391,830 354,494 391,004 353,406
Performance ratios (annualized):
Return on average assets................... 1.06% 1.12% 1.08% 1.11%
Return on average equity................... 14.17 15.43 14.30 15.16
Average yield on interest-earning assets... 7.06 7.26 7.17 7.19
Average cost of interest-bearing
liabilities............................. 4.94 4.87 5.03 4.82
Interest rate spread....................... 2.12 2.39 2.14 2.37
Net interest margin........................ 2.56 2.75 2.61 2.73
Average interest-earning assets to average
interest-bearing liabilities............ 109.61% 107.93 109.25 107.96
Non-interest expense to average assets..... 1.55 1.47 1.55 1.48
Non-interest expense to average assets and
loans serviced for others............... 1.32 1.17 1.33 1.18
Efficiency ratio........................... 48.25 44.35 47.77 45.31
Loan originations and purchases............... $693,380 $429,323 $1,208,835 $736,229
Loans and mortgage-backed securities sold..... 373,454 73,772 499,791 109,484
Cash dividends declared per share............. .12 .10 .22 .19
8