MB Financial announces third quarter results positive
MB Financial, the holding company for MB Financial Bank, N.A announced today third quarter results for 2012.
The words “MB Financial,” “the Company,” “we,” “our” and “us” refer to MB Financial, Inc. and its consolidated subsidiaries, unless indicated otherwise. We had net income and net income available to common stockholders of $23.1 million for the third quarter of 2012 compared to net income of $19.7 million (+17.4%) and net income available to common stockholders of $17.1 million (+35.3%) for the third quarter of 2011, and net income and net income avail- able to common stockholders of $22.1 million (+17.8% annualized) for the second quarter of 2012. Third quarter earnings were driven by strong fee income growth which exceeded the impact of net interest margin compression. While we had some large unusual items in the quarter, including a negative provision and prepayment fees, they were largely offsetting and had minimal impact on our results. I’m very pleased with the progress we have made over the past year in several areas including credit quality, improving our balance sheet mix and executing on our fee income initiatives. Return on assets is approaching normal levels, and from a shareholder perspective, we are ready to return more capital to shareholders in the form of higher quarterly dividends, stated Mitchell Feiger, President and Chief Executive Officer of the Company.
Key items for the quarter were as follows: Improved Return on Assets and Return on Equity. Annualized return on average assets increased to 0.97% for the third quarter of 2012 compared to 0.94% for the second quarter of 2012 and 0.80% for the third quarter of 2011. Annualized return on average common equity improved to 7.38% for the third quarter of 2012 compared to 7.28% for the second quarter of 2012 and 5.86% for the third quarter of 2011. Annualized cash return on average tangible common equity in the third quarter of 2012 was 11.29% compared to 11.28% for the second quarter of 2012 and 9.52% for the third quarter of 2011.
Leasing revenues increased 31.9% to $9.7 million, Capital markets and international banking service fees increased 72.3% to $1.3 million, and Commercial deposit and treasury management fees increased 1.3% to $5.9 million. Liability repositioning, discussed below, which occurred at the end of the quarter, will address the elevated cash balances and is expected to have a seven to eight basis point positive impact on the fourth quarter margin.
Annualized net charge-offs to average loans for the nine months ended September 30, 2012 improved to 0.03% compared to 3.52% for the same period in 2011.
Losses recognized on other real estate owned, which we view as part of our credit costs, were $3.9 million in the third quarter of 2012 compared to $5.4 million in the second quarter of 2012 and $3.1 million in the third quarter of 2011. Our non-performing loans improved to $105.3 million or 1.87% of total loans as of September 30, 2012 from $113.5 million or 1.98% of total loans at June 30, 2012, a decrease of $8.2 million (7.3%), and from $141.0 million or 2.42% of total loans at September 30, 2011, a decrease of $35.7 million (-25.3%).
Our non-performing assets improved to $147.8 million or 1.56% of total assets as of September 30, 2012 from $163.3 million or 1.72% of total assets as of June 30, 2012, a decrease of $15.5 million (-9.5%), and from $228.7 million or 2.30% of total assets as of September 30, 2011, a decrease of $80.9 million (-35.4%). Net interest income on a fully tax equivalent basis decreased $15.4 million during the nine months ended September 30, 2012 compared to the nine months ended September 30, 2011 primarily due to a decrease in average interest earning assets of approximately $300 million and an 11 basis point decline in our net interest margin to 3.79% on a fully tax equivalent basis.