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 THIRD QUARTER EARNINGS OF $.52 PER SHARE
Clarendon Hills, Illinois, October 19, 1999 - MAF Bancorp, Inc. (MAFB)
announced today that earnings for the third quarter ended September 30, 1999
totaled $12.9 million, or $.52 per diluted share, compared to earnings of $9.9
million, or $.42 per diluted share reported in last year's third quarter.
Earnings per share in the current period were highlighted by continued strong
core banking and real estate development results, which included a pre-tax gain
of $2.3 million on the sale of two commercial real estate parcels. 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 $.55 in the current quarter compared to
$.44 last year. Return on average equity was 14.77% in the current quarter while
cash return on average tangible equity was 18.93%. Return on average assets was
1.19% while cash return on average tangible assets was 1.28% for the current
quarter.
Net interest income, after provision for loan losses, totaled $29.1 million
in the current quarter compared to $23.9 million a year ago and $28.7 million in
the prior quarter. The Bank's net interest margin improved slightly to 2.86% for
the quarter ended September 30, 1999 compared to 2.83% for the quarter ended
September 30, 1998 and declined from 2.95% in the previous quarter. The yield on
average interest-earning assets increased two basis points to 7.01% over the
past three months while the cost of interest-bearing liabilities increased by
eleven basis points to 4.49%. The decline in the net interest margin is
primarily due to higher funding costs on both deposits and borrowings as well as
the Bank's heavier reliance on FHLB advances to fund the adjustable rate loan
growth in the portfolio. Management expects that the net interest margin will
continue to come under pressure for the next few quarters due to higher interest
rates.
Average interest-earning assets in the current quarter grew to $4.12
billion compared to $3.41 billion for last year's third quarter and $3.93
billion for the quarter ended June 30, 1999. Mortgage loan volume continued to
be strong during the quarter, totaling $456.9 million compared to $427.8 million
a year ago and $464.0 million in the quarter ended June 30, 1999. A continuation
of consumers' current preference for adjustable rate loans should contribute to
continued strong earning asset growth and offset any negative margin pressure,
resulting in steady growth in net interest income.
Non-interest income increased to $8.6 million in the current quarter,
compared to $7.0 million reported for the quarter ended September 30, 1998.
These results were driven by increased real estate development profits, fee
income from deposit account products and higher loan servicing fee income. These
positive results were offset by reduced gains on sales of loans and
mortgage-backed securities in the Company's mortgage banking operation. Included
in the loss on foreclosed real estate is a $350,000 writedown in value of a $6.5
million commercial office building. Income from real estate operations totaled
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$2.5 million for the quarter ended September 30, 1999, down from last quarter's
record results of $3.9 million but up 41.2% from the prior year's third quarter
results of $1.8 million. A total of 22 residential lots were sold in the current
quarter and 404 lots were under contract at the end of the quarter, including
327 lots in the Tallgrass of Naperville development, and 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. It is expected that Tallgrass
Unit 2 lot closings should commence late in the fourth quarter if weather
permits the completion of the roadwork. Management expects that strong lot sales
activity in Tallgrass, along with higher gross margins based on recent lot price
increases, will generate stronger residential lot sale profits in calendar 2000.
Deposit account service fees totaled $2.7 million for the quarter ended
September 30, 1999, up from the $2.3 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. During the quarter, the number of checking
accounts increased to over 100,000. Brokerage commissions also increased during
the quarter, totaling $719,000 compared to $644,000 for the quarter ended
September 30, 1998.
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 $464,000 in the quarter, compared to $873,000 a
year ago. Loan sales in the current quarter were $140.4 million compared to
$120.7 million for the quarter ended September 30, 1998. Loan servicing fee
income increased during the quarter to $751,000 compared to $(383,000) in last
year's third quarter. The current year's result includes a $290,000 recovery of
a previously recorded mortgage servicing impairment writedown. The prior year
quarter includes a $(740,000) impairment valuation writedown.
Non-interest expense totaled $17.2 million in the current quarter, compared
to $15.0 million reported in the prior year's third quarter and $16.5 million
for the quarter ended June 30, 1999. Compensation and benefits expense totaled
$9.6 million in the current quarter, compared to $8.8 million a year ago,
primarily due to normal compensation increases and the additional staffing from
the Westco acquisition. Advertising expense increased over the prior year by
$484,000, primarily due to the new radio-based company branding campaign
initiated earlier this year. Other expenses are up primarily due to higher
professional fees related to the formation of a mortgage real estate investment
trust in connection with a new tax planning strategy. The ratio of total
non-interest expense to average assets was 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 45.8%, considerably better than peer group
averages. Income tax expense totaled $7.7 million in the current quarter, equal
to an effective income tax rate of 37.3% compared to a 38.3% effective tax rate
in the quarter ended September 30, 1998.
Non-performing assets at September 30, 1999 declined by $621,000 to $21.5
million, or .48% of total assets, compared to $22.1 million or .52% of total
assets at June 30, 1999. The Company recorded a provision for loan losses of
$300,000 in the current quarter, while net loan charge-offs totaled $267,000.
The Bank's allowance for loan losses was $17.0 million at September 30, 1999,
equal to 124.54% of total non-performing loans, 79.26% of total non-performing
assets and .46% of total loans receivable.
Net income for the nine months ended September 30, 1999 totaled $37.8
million, or $1.51 per diluted share, compared to $28.8 million, or $1.23 per
diluted share reported for the comparable nine-month period of a year ago. Net
interest income, after provision for loan losses, totaled $86.0 million for the
current nine-month period compared to $71.7 million for the nine months ended
September 30, 1998. The net interest margin improved to 2.92% in the current
period compared to 2.86% in 1998 while average interest-earning assets expanded
by 17.7%, due in part to continued growth in the Bank's mortgage loan portfolio
over the past year and to the Westco Bancorp acquisition.
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Non-interest income totaled $25.7 million in the current nine-month period
compared to $19.3 million last year. Almost all areas of non-interest income
improved, led by advances in income from real estate development operations,
deposit account service charges and loan servicing income. Year to date income
from real estate development operations totaled $7.0 million compared to $3.9
million for the nine months ended September 30, 1998, as the Company recorded
$5.2 million of gains on the sale of three large commercial real estate parcels
and strong sales in the Tallgrass subdivision. Deposit account service charges
advanced to $7.4 million compared to $6.2 million a year ago, an increase of
20.4%. Non-interest expense totaled $49.9 million for the nine months ended
September 30, 1999 compared to $44.3 million for the nine months ended September
30, 1998. The increase over the prior year is primarily due to the impact of the
Westco acquisition, including higher amortization of intangibles, normal
compensation and benefit increases, higher advertising costs related to the
initiation of the branding campaign and higher professional fees related to the
tax planning strategy. The efficiency ratio of 44.8% remains better than
industry standards.
Total assets increased to $4.43 billion at September 30, 1999, up $150.0
million from the $4.28 billion reported for the quarter ended June 30, 1999. The
growth in assets during the three-month period was driven by an increase in
loans receivable of $136.8 million. The balance of loans receivable at September
30, 1999 stood at $3.68 billion, including $13.8 million of loans held for sale.
Deposits increased slightly during the three-month period to $2.69 billion due
to the previously announced $23.0 million deposit purchase from Northern Trust,
while borrowed funds, used to fund the increased loan balances, increased by
$114.7 million to $1.29 billion, compared to $1.18 billion at June 30, 1999.
Total stockholders' equity was $350.5 million at September 30, 1999, resulting
in a stated book value per share of $14.45 and a tangible book value per share
of $11.87. The Company repurchased 125,000 shares of its common stock during the
current quarter, including 117,500 shares at an average price of $19.59 per
share under its existing 1.0 million share stock repurchase program. The Bank's
tangible, core and risk-based capital percentages of 6.35%, 6.35% and 12.37%,
respectively at September 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 25 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 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.
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MAF BANCORP, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
(Dollars in thousands, except per share data)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
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1999 1998 1999 1998
---- ---- ---- ----
(UNAUDITED) (UNAUDITED)
Interest income......................................... $72,243 62,114 208,452 185,215
Interest expense........................................ 42,798 37,968 121,685 112,868
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Net interest income.................................. 29,445 24,146 86,767 72,347
Provision for loan losses............................... 300 200 800 600
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Net interest income after provision for loan
losses............................................ 29,145 23,946 85,967 71,747
Non-interest income:
Gain (loss) on sale and writedown of:
Loans receivable.................................. 387 862 2,225 2,071
Mortgage-backed securities........................ 77 11 113 179
Investment securities............................. 494 208 1,032 606
Foreclosed real estate............................ (241) 86 (121) 152
Income from real estate operations................... 2,478 1,755 7,016 3,854
Deposit account service charges...................... 2,679 2,337 7,425 6,169
Loan servicing fee income (loss)..................... 751 (383) 1,781 373
Brokerage commissions................................ 719 644 1,938 2,153
Other................................................ 1,275 1,475 4,287 3,741
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Total non-interest income......................... 8,619 6,995 25,696 19,298
Non-interest expense:
Compensation and benefits............................ 9,554 8,764 28,289 26,016
Office occupancy and equipment....................... 1,799 1,679 5,424 5,025
Federal deposit insurance premiums................... 390 363 1,187 1,091
Data processing...................................... 665 593 1,856 1,689
Advertising and promotion............................ 1,049 565 2,404 1,802
Amortization of goodwill ............................ 662 334 1,962 1,002
Amortization of core deposit intangibles............. 289 244 943 831
Other................................................ 2,809 2,410 7,856 6,799
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Total non-interest expense........................ 17,217 14,952 49,921 44,255
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Income before income taxes........................ 20,547 15,989 61,742 46,790
Income taxes............................................ 7,671 6,128 23,948 17,982
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Net income........................................ $12,876 9,861 37,794 28,808
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Basic earnings per share................................ $.53 .44 1.55 1.28
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Diluted earnings per share.............................. $.52 .42 1.51 1.23
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MAF BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands)
SEPTEMBER 30, DECEMBER 31,
1999 1998
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(UNAUDITED)
ASSETS
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Cash and due from banks....................................................... $ 43,473 $ 53,995
Interest-bearing deposits..................................................... 17,253 24,564
Federal funds sold............................................................ 77,004 79,140
Investment securities, at cost (fair value of $12,226 and $12,360)............ 11,658 11,107
Investment securities available for sale, at fair value....................... 182,141 198,960
Stock in Federal Home Loan Bank of Chicago, at cost........................... 62,275 50,878
Mortgage-backed securities, at amortized cost (fair value of
$97,467 and $127,570)...................................................... 99,381 128,538
Mortgage-backed securities available for sale, at fair value.................. 41,479 55,065
Loans receivable held for sale................................................ 13,787 89,406
Loans receivable, net of allowance for losses of $17,012 and
$16,770.................................................................... 3,671,171 3,229,670
Accrued interest receivable................................................... 23,255 21,545
Foreclosed real estate........................................................ 7,803 8,357
Real estate held for development or sale...................................... 21,956 25,134
Premises and equipment, net................................................... 42,031 40,724
Other assets.................................................................. 49,562 41,785
Intangible assets, net of accumulated amortization of $9,576 and
$6,671 .................................................................... 62,435 62,219
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$4,426,664 $4,121,087
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Liabilities:
Deposits................................................................... 2,693,588 2,656,872
Borrowed funds............................................................. 1,294,200 1,034,500
Advances by borrowers for taxes and insurance.............................. 31,283 30,576
Accrued expenses and other liabilities..................................... 57,063 54,143
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Total liabilities....................................................... 4,076,134 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; 80,000,000 shares authorized;
25,420,650 shares issued; 24,266,205 and 24,984,398 shares
outstanding............................................................. 254 254
Additional paid-in capital................................................. 194,188 191,473
Retained earnings, substantially restricted................................ 187,403 159,935
Stock in Gain Deferral Plan; 223,453 shares................................ 511 --
Accumulated other comprehensive income (loss).............................. (2,300) 425
Treasury stock, at cost; 1,377,898 and 436,252 shares...................... (29,526) (7,091)
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Total stockholders' equity.............................................. 350,530 344,996
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Commitments and contingencies ................................................ $4,426,664 $4,121,087
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MAF BANCORP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA
(In thousands, except share data)
SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,
1999 1998 1999
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Book value per share........................................ $ 14.45 $ 13.81 $ 12.56
Tangible book value per share............................... 11.87 11.32 11.24
Stockholders' equity to total assets........................ 7.92% 8.37% 7.80%
Tangible capital ratio (Bank only).......................... 6.35% 6.67% 6.65%
Core capital ratio (Bank only).............................. 6.35% 6.67% 6.65%
Risk-based capital ratio (Bank only)........................ 12.37% 13.42% 13.23%
Common shares outstanding:
Actual................................................... 24,266,205 24,984,398 22,392,947
Basic (weighted average)................................. 24,196,070 22,068,823 22,577,730
Diluted (weighted average)............................... 24,813,428 22,789,419 23,286,785
Non-performing loans........................................ $ 13,660 $ 14,049 $ 11,574
Non-performing assets....................................... 21,463 22,406 19,104
Allowance for loan losses................................... 17,012 16,770 15,808
Non-performing loans to total loans......................... .37% .43% .40%
Non-performing assets to total assets....................... .48% .54% .53%
Allowance for loan losses to total loans.................... .46% .52% .54%
Mortgage loans serviced for others.......................... $ 1,215,419 $ 1,065,126 $ 1,063,383
Investment in Bank real estate subsidiaries................. 8,853 12,518 14,683
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------------------- --------------------------------
1999 1998 1999 1998
----------------- ---------------- ---------------- ---------------
Average balance data:
Total assets................................ $4,333,110 $3,587,521 $4,191,760 $3,541,526
Loans receivable............................ 3,630,144 2,884,710 3,484,200 2,814,398
Interest-earning assets.................... 4,118,323 3,413,088 3,972,324 3,373,612
Deposits.................................... 2,531,868 2,253,467 2,539,974 2,247,706
Interest-bearing liabilities............... 3,759,732 3,137,161 3,646,798 3,102,439
Stockholders' equity........................ 348,603 282,713 342,052 275,478
Performance ratios (annualized):
Return on average assets.................... 1.19% 1.10% 1.20% 1.08%
Return on average equity.................... 14.77 13.95 14.73 13.94
Cash return on average tangible assets...... 1.28 1.16 1.29 1.15
Cash return on average tangible equity...... 18.93 16.21 17.12 16.33
Average yield on interest-earning assets.... 7.01 7.27 6.99 7.31
Average cost of interest-bearing
liabilities.............................. 4.49 4.78 4.44 4.84
Interest rate spread........................ 2.52 2.49 2.55 2.47
Net interest margin......................... 2.86 2.83 2.92 2.86
Average interest-earning assets to
average interest-bearing liabilities..... 109.54 108.80 108.93 108.74
Non-interest expense to average assets...... 1.59 1.67 1.59 1.67
Non-interest expense to average assets
and loans serviced for others............ 1.25 1.29 1.13 1.17
Efficiency ratio............................ 45.83 48.34 44.80 48.61
Loan originations and purchases................ $ 456,881 $ 427,810 $1,312,005 $1,234,705
Loans and mortgage-backed securities
sold........................................ 140,382 120,724 352,251 319,295
Cash dividends declared per share.............. .09 .07 .250 .187
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