EXHIBIT 99.1
------------
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
website: www.mafbancorp.com (630) 325-7300
MAF BANCORP REPORTS SECOND QUARTER EARNINGS OF $.53 PER SHARE
Clarendon Hills, Illinois, July 21, 1999 - MAF Bancorp, Inc. (MAFB) announced
today that earnings for the second quarter ended June 30, 1999 totaled $13.2
million, or a record $.53 per diluted share, compared to earnings of $9.8
million, or $.42 per diluted share reported in last year's second quarter.
Earnings per share in the current period were highlighted by continued strong
core banking and real estate development results which included a $2.9 million
pre-tax gain on the sale of a large commercial parcel. The commercial property
sale added $.07 per diluted share to the current quarter's earnings per share
results. Exclusive of this gain, diluted earnings per share results were 9.5%
higher than in the same period a year ago. On December 31, 1998, the Company
completed its acquisition of Westco Bancorp in a transaction that was accounted
for under the purchase accounting method for financial reporting purposes. As a
result, the current period's results, other than per share amounts and ratio
analyses, are not generally comparable to the reported results for the
corresponding prior year's quarter.
Cash earnings per share (diluted), which excludes amortization of goodwill and
deposit base intangibles, totaled $.57 in the current quarter ($.50 excluding
the commercial real estate gain) compared to $.44 last year. Return on equity
was 15.67% in the current quarter while cash return on average tangible equity
was 20.14%. Return on average assets was 1.27% while cash return on average
tangible assets was 1.37% for the current quarter.
Net interest income, after provision for loan losses, totaled $28.7 million in
the current quarter compared to $24.0 million a year ago and $28.1 million in
the prior quarter. The Bank's net interest margin improved to 2.95% for the
quarter ended June 30, 1999 compared to 2.87% for the quarter ended June 30,
1998 and 2.94% for the quarter ended March 31, 1999. Management expects that the
net interest margin may come under pressure over the balance of the year due to
the higher interest rates and potential negative impact on funding costs as
certificates of deposit and borrowings reprice. The yield on average
interest-earning assets remained steady over the past three months at 6.99%
while the cost of interest-bearing liabilities declined by five basis points to
4.38%.
Average interest-earning assets in the current quarter grew to $3.93 billion
compared to $3.38 billion for last year's second quarter and $3.86 billion for
the quarter ended March 31, 1999. Mortgage loan volume continued to be strong
during the quarter, totaling $464.0 million compared to $439.2 million a year
ago and $391.1 million in the quarter ended March 31, 1999. Despite higher
mortgage interest rates in recent months, purchase mortgage activity in the
Bank's markets remains robust.
Non-interest income increased to $9.7 million in the current quarter, compared
to $6.9 million reported for the quarter ended June 30, 1998. These results were
driven by increased real estate development profits and fee income from deposit
account products. These positive results were offset by reduced gains on sales
of loans in the Company's mortgage banking operation. Income from real estate
development operations totaled $3.9 million for the quarter ended June 30, 1999,
up significantly from the $1.3 million reported in the comparable period a year
ago. The sale of a 26-acre commercial parcel in the Company's Woodbridge
development added $2.9 million to pre-tax earnings for the quarter. In addition,
a total of 140 residential lots were sold in the current quarter and 110 lots
were under contract at the end of the quarter. Included in the 110 lots are 75
lots in the Creekside subdivision which are under contract to be sold in a bulk
sale expected to close in the second quarter of 2000. The Company expects to
report good real estate results for the remainder of 1999, resulting from
additional, smaller commercial property sales and activity in its
Tallgrass of Naperville development. It is currently expected that Tallgrass
Unit 2 lots will be available, and commence closing, in the fourth quarter of
1999.
Deposit account service fees totaled $2.5 million for the quarter ended June 30,
1999, up 22.2% from the $2.1 million reported in the year earlier period.
Deposit account fees continues to be one of the Company's strongest revenue
growth areas, the result of a continuing focus on expanding the Bank's consumer
checking account business. Brokerage commissions declined during the quarter,
totaling $627,000 compared to $839,000 for the quarter ended June 30, 1998. The
decrease is due to turnover in the sales force and the record quarter for the
brokerage operation in last year's comparable period.
The increasing interest rate environment and decline in loan refinancing
activity during the quarter led to a decline in gain on sale of loans and
mortgage-backed securities to $414,000 in the quarter, compared to $930,000 a
year ago. Loan sales in the current quarter were $72.7 million compared to
$134.7 million for the quarter ended June 30, 1998. Loan servicing fee income
rebounded during the quarter, totaling $654,000 compared to $393,000 a year ago.
The total included a $250,000 recovery of the $1.3 million of mortgage servicing
impairment writedowns recognized by the Bank in the third and fourth quarters of
1998.
Non-interest expense totaled $16.5 million in the current quarter, compared to
$14.9 million reported in the prior year's second quarter and $16.2 million for
the quarter ended March 31, 1999. The ratio of total non-interest expense to
average assets was an impressive 1.59% for the current quarter. The Company's
efficiency ratio, a measure of the amount of expense needed to generate each
dollar of revenue, was 42.7%, considerably better than peer group averages.
Compensation and benefits expense totaled $9.3 million in the current quarter,
compared to $8.8 million a year ago, an increase of 5.9%. Occupancy costs were
up $124,000 in the quarter while advertising expense increased $239,000, due
largely to the initiation of a new radio-based company branding campaign which
will be an ongoing program. Income tax expense totaled $8.7 million in the
current quarter, equal to an effective income tax rate of 39.6% compared to a
38.8% effective tax rate in the quarter ended June 30, 1998.
Non-performing assets at June 30, 1999 declined slightly to $22.1 million, or
.52% of total assets, compared to $23.5 million or .57% of total assets at March
31, 1999. The Company recorded a provision for loan losses of $250,000 in the
current quarter, while net loan charge-offs totaled $66,000. The Bank's
allowance for loan losses was $17.0 million at June 30, 1999, equal to 130.0% of
total non-performing loans, 76.9% of total non-performing assets and .49% of
total loans receivable.
Net income for the six months ended June 30, 1999 totaled $24.9 million, or $.99
per diluted share, compared to $18.9 million, or $.81 per diluted share reported
for the comparable six-month period of a year ago. Net interest income, after
provision for loan losses, totaled $56.8 million for the current six-month
period compared to $47.8 million for the six months ended June 30, 1998. The net
interest margin improved to 2.94% in the current period compared to 2.88% in
1998 while average interest-earning assets expanded by 16.2%, due in part to
continued growth in the Bank's mortgage loan portfolio over the past year and to
the Westco Bancorp acquisition.
Almost all areas of non-interest income in the current six-month period improved
compared to a year ago, led by advances in income from real estate development
operations and deposit account service charges. Income from real estate
operations totaled $4.5 million compared to $2.1 million for the six months
ended June 30, 1998. Deposit account service charges advanced to $4.7 million
compared to $3.8 million a year ago, an increase of 23.9%. Gains on sales of
loans and mortgage-backed securities from the Company's mortgage banking
operation also contributed to the rise in non-interest income in the six-month
period, totaling $1.9 million compared to $1.4 million in the same period a year
ago. Non-interest expenses totaled $32.7 million for the six months ended June
30, 1999 compared to $29.3 million for the six months ended June 30, 1998, an
increase of 11.6%. The efficiency ratio of 44.3% remains better than industry
standards.
Total assets increased to $4.28 billion at June 30, 1999, up $165.4 million from
the $4.11 billion reported for the quarter ended March 31, 1999. The growth in
assets during the three-month period was driven by an increase in loans
receivable of $175.1 million. The balance of loans receivable at June 30, 1999
stood at $3.55 billion, including $100.0 million of loans held for sale.
Deposits remained stable during the three-month period at $2.67 billion while
borrowed funds, used to fund the increased loan balances, increased by $151.0
million to $1.18 billion, compared to $1.03 billion at March 31, 1999. Total
stockholders' equity was $343.9 million at June 30, 1999, resulting in a stated
book value per share of $14.24 and a tangible book value per share of $11.74.
The Company repurchased 5,000 shares of its common stock during the current
quarter at an average price of $22.50 per share. The Company has repurchased
742,500 shares at an average price of $23.29 per share under its existing
750,000 share stock repurchase program. The Bank's tangible, core and risk-based
capital percentages of 6.53%, 6.53% and 12.66%, respectively at June 30, 1999
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 24 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 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 future prospects of the Company and the subsidiaries include, but
are not limited to, 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, deposit flows, competition, demand for
financial services in the Company's market area, the possible short-term
dilutive effect of potential acquisitions, the effectiveness of the Company's
compliance review and implementation plan to identify and resolve Year 2000
issues, and 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
RESULTS OF OPERATIONS
(Dollars in thousands, except per share data)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ ----------------
1999 1998 1999 1998
---- ---- ---- ----
(UNAUDITED) (UNAUDITED)
Interest income....................................... $68,811 $61,813 $136,209 $123,101
Interest expense...................................... 39,852 37,605 78,887 74,900
------- ------- -------- --------
Net interest income.................................. 28,959 24,208 57,322 48,201
Provision for loan losses............................. 250 200 500 400
------- ------- -------- --------
Net interest income after provision for loan
losses............................................ 28,709 24,008 56,822 47,801
Non-interest income:
Gain on sale of:
Loans receivable.................................. 382 804 1,838 1,209
Mortgage-backed securities........................ 32 126 36 168
Investment securities............................. -- 70 538 398
Foreclosed real estate............................ 108 21 120 66
Income from real estate operations................... 3,917 1,298 4,538 2,099
Deposit account service charges...................... 2,541 2,079 4,746 3,832
Loan servicing fee income............................ 654 393 1,030 756
Brokerage commissions................................ 627 839 1,219 1,509
Other................................................ 1,460 1,227 3,012 2,266
------- ------- -------- --------
Total non-interest income......................... 9,721 6,857 17,077 12,303
Non-interest expense:
Compensation and benefits............................ 9,269 8,755 18,735 17,252
Office occupancy and equipment....................... 1,818 1,694 3,625 3,346
Federal deposit insurance premiums................... 393 366 797 728
Data processing...................................... 600 564 1,191 1,096
Advertising and promotion............................ 823 584 1,355 1,237
Amortization of goodwill ............................ 650 334 1,300 668
Amortization of core deposit intangibles............. 327 293 654 587
Other................................................ 2,644 2,296 5,047 4,389
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Total non-interest expense........................ 16,524 14,886 32,704 29,303
------- ------- -------- --------
Income before income taxes........................ 21,906 15,979 41,195 30,801
Income taxes.......................................... 8,667 6,199 16,277 11,854
------- ------- -------- --------
Net income........................................... $13,239 $ 9,780 $ 24,918 $ 18,947
======= ======= ======== ========
Basic earnings per share.............................. .55 .43 1.02 .84
=== === ==== ===
Diluted earnings per share............................ .53 .42 .99 .81
=== === === ===
MAF BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands)
JUNE 30, 1999 DECEMBER 31, 1998
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(UNAUDITED)
ASSETS
Cash and due from banks......................................... $ 42,966 $ 53,995
Interest-bearing deposits....................................... 20,824 24,564
Federal funds sold.............................................. 39,310 79,140
Investment securities, at cost (fair value of $22,085 and
$12,360)....................................................... 21,426 11,107
Investment securities available for sale, at fair value......... 192,840 198,960
Stock in Federal Home Loan Bank of Chicago, at cost............. 55,525 50,878
Mortgage-backed securities, at amortized cost (fair value of
$105,556 and $127,570)......................................... 106,905 128,538
Mortgage-backed securities available for sale, at fair value.... 44,723 55,065
Loans receivable held for sale.................................. 100,016 89,406
Loans receivable, net of allowance for losses of $16,978 and
$16,770........................................................ 3,448,150 3,229,670
Accrued interest receivable..................................... 22,291 21,545
Foreclosed real estate.......................................... 9,028 8,357
Real estate held for development or sale........................ 22,775 25,134
Premises and equipment, net..................................... 41,472 40,724
Other assets.................................................... 48,143 41,785
Intangible assets, net of accumulated amortization of $8,625
and $6,671..................................................... 60,270 62,219
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$4,276,664 $4,121,087
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LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits....................................................... 2,669,886 2,656,872
Borrowed funds................................................. 1,179,500 1,034,500
Advances by borrowers for taxes and insurance.................. 33,262 30,576
Accrued expenses and other liabilities......................... 50,069 54,143
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Total liabilities........................................... 3,932,717 3,776,091
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Stockholders' equity:
Preferred stock, $.01 par value; authorized 5,000,000
shares; none outstanding.................................... -- --
Common stock, $.01 par value; 40,000,000 shares
authorized; 25,420,650 shares issued; 24,156,627 and
24,984,398 shares outstanding.................................. 254 254
Additional paid-in capital..................................... 194,016 191,473
Retained earnings, substantially restricted.................... 177,396 159,935
Accumulated other comprehensive income (loss).................. (401) 425
Treasury stock, at cost; 1,264,023 and 436,252 shares.......... (27,318) (7,091)
---------- ----------
Total stockholders' equity.................................. 343,947 344,996
---------- ----------
Commitments and contingencies................................... $4,276,664 $4,121,087
========== ==========
MAF BANCORP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA
(In thousands, except share data)
JUNE 30, DECEMBER 31, JUNE 30,
1999 1998 1998
-------- ------------ ---------
Book value per share................................ $ 14.24 $ 13.81 $ 12.40
Tangible book value per share....................... 11.74 11.32 11.07
Stockholders' equity to total assets................ 8.04% 8.37% 7.84%
Tangible capital ratio (Bank only).................. 6.53% 6.67% 6.88%
Core capital ratio (Bank only)...................... 6.53% 6.67% 6.88%
Risk-based capital ratio (Bank only)................ 12.66% 13.42% 13.95%
Common shares outstanding:
Actual............................................. 24,156,627 24,984,398 22,576,705
Basic (weighted average)........................... 24,139,952 22,068,823 22,562,943
Diluted (weighted average)......................... 24,894,128 22,789,419 23,377,866
Non-performing loans................................ $ 13,056 $ 14,049 $ 12,525
Non-performing assets............................... 22,084 22,406 19,291
Allowance for loan losses........................... 16,978 16,770 15,689
Non-performing loans to total loans................. .38% .43% .45%
Non-performing assets to total assets............... .52% .54% .54%
Allowance for loan losses to total loans............ .49% .52% .56%
Mortgage loans serviced for others.................. $ 1,129,715 $ 1,065,126 $ 1,028,586
Investment in Bank real estate subsidiaries......... 10,706 12,518 13,819
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------- --------------------------
1999 1998 1999 1998
---------- ---------- ---------- -----------
Average balance data:
Total assets....................................... $4,157,126 $3,543,293 $4,119,912 $3,518,148
Loans receivable................................... 3,457,332 2,802,948 3,410,019 2,778,660
Interest-earning assets............................ 3,934,544 3,379,916 3,898,114 3,353,548
Deposits........................................... 2,554,424 2,246,770 2,544,095 2,244,777
Interest-bearing liabilities....................... 3,626,342 3,100,747 3,589,396 3,084,790
Stockholders' equity............................... 337,846 275,791 338,722 271,801
Performance ratios (annualized):
Return on average assets........................... 1.27% 1.10% 1.21% 1.08%
Return on average equity........................... 15.67 14.18 14.71 13.94
Cash return on average tangible assets............. 1.37 1.17 1.30 1.14
Cash return on average tangible equity............. 20.14 16.61 17.13 16.39
Average yield on interest-earning assets........... 6.99 7.31 6.99 7.34
Average cost of interest-bearing liabilities....... 4.38 4.84 4.41 4.87
Interest rate spread............................... 2.61 2.47 2.58 2.47
Net interest margin................................ 2.95 2.87 2.94 2.88
Average interest-earning assets to average
interest-bearing liabilities.................... 108.50 109.00 108.60 108.71
Non-interest expense to average assets............. 1.59 1.68 1.59 1.67
Non-interest expense to average assets and
loans serviced for others....................... 1.25 1.31 1.25 1.30
Efficiency ratio................................... 42.72 48.03 44.28 48.75
Loan originations and purchases..................... $ 464,014 $ 439,198 $ 855,124 $ 806,924
Loans and mortgage-backed securities sold........... 72,672 134,720 211,869 198,571
Cash dividends declared per share................... .09 .07 .16 .117