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MB Financial – MBFI – Second quarter results for 2012

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MB Financial, Inc. (NASDAQ: MBFI), the holding company for MB Financial Bank, N.A announced second quarter results for 2012. MBFI had net income and net income available to common stockholders of $22.1 million for the second quarter of 2012 compared to a net loss of $7.4 million and net loss available to common stockholders of $10.0 million for the second quarter of 2011, and net income of $21.1 million and net income available to common stockholders of $17.8 million for the first quarter of 2012.

MBFI Key items for the quarter were as follows:

MBFI Improved Return on Assets and Return on Equity:


  • Annualized return on average assets increased to 0.94% for the second quarter of 2012 compared to 0.87% for the first quarter of 2012, driven by lower credit costs.
  • Annualized return on average common equity improved to 7.28% for the second quarter of 2012 compared to 5.94% for the first quarter of 2012. The improvement was a result of lower credit costs and the repurchase in the first quarter of 2012 of all $196 million of preferred stock issued in 2008 to the U.S. Department of Treasury as part of the Troubled Asset Relief Program (“TARP”) Capital Purchase Program. As a result, there were no TARP dividends in the second quarter of 2012 compared to $3.3 million in the first quarter of 2012.
  • Annualized cash return on average tangible common equity increased to 11.28% in the second quarter of 2012 from 9.36% in the first quarter of 2012.

MBFI Improved Credit Metrics:

  • We had no provision for credit losses for the second quarter of 2012, while our net charge-offs were $4.4 million. Our provision for credit losses and net charge-offs for the first quarter of 2012 were $3.1 million and $5.8 million, respectively.
  • Losses recognized on other real estate owned (“OREO”), which we view as credit costs, were $5.4 million in the second quarter of 2012 compared to $6.6 million in the first quarter of 2012.
  • Our non-performing loans improved to $113.5 million or 1.98% of total loans as of June 30, 2012 from $124.7 million or 2.15% of total loans at March 31, 2012, a decrease of $11.2 million (-9.0%)
  • Our non-performing assets improved to $163.3 million or 1.72% of total assets as of June 30, 2012 from $187.8 million or 1.94% of total assets as of March 31, 2012, a decrease of $24.6 million (-13.1%)
  • Our allowance for loan losses to non-performing loans was 107.25% as of June 30, 2012 compared to 100.59% as of March 31, 2012.

MBFI Balance Sheet Trends:

  • Gross loan balances as of June 30, 2012, excluding covered loans and loans held for sale, were essentially unchanged compared to March 31, 2012 balances. Commercial and industrial loans (+3.8%), lease loans (+0.9%), construction loans (+17.7%) and consumer loans (+1.2%) all increased during the quarter, while commercial real estate loans decreased (-4.4%).
  • Noninterest bearing deposits increased approximately $72 million (+3.9%) from March 31, 2012 to June 30, 2012 due primarily to the addition of new customers. Money market and NOW accounts decreased approximately $138 million (-5.1%) and certificate of deposit balances decreased approximately $102 million (-4.5%) from the prior quarter as we continued our efforts to lower our funding costs and improve our deposit mix.
  • During the first quarter of 2012, we entered into and fully utilized a $35 million unsecured line of credit to fund a portion of our TARP repayment. During the second quarter of 2012, though still available for future borrowing, the outstanding amount on this line of credit was repaid in full.
  • During the second quarter of 2012, we repurchased in full the ten-year warrant held by the U.S. Department of Treasury to purchase 506,024 shares of the Company’s common stock issued in 2008 to the Treasury as part of TARP. The price paid by the Company to repurchase the warrant was $1.5 million.

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edliston
Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.

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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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