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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): JANUARY 27, 1999
MAF BANCORP, INC.
(Exact name of registrant as specified in its charter)
-----------------------------
DELAWARE 0-18121 36-3664868
(State or other jurisdiction (Commission file number) (I.R.S. employer
of incorporation) identification no.)
55TH STREET & HOLMES AVENUE
CLARENDON HILLS, ILLINOIS
(Address of principal executive 60514
offices) (Zip Code)
Registrant's telephone number, including area code: (630) 325-7300
NOT APPLICABLE
(Former name or former address, if changed since last year)
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<PAGE>
ITEM 5. OTHER EVENTS.
On January 27, 1999, MAF Bancorp, Inc. announced its 1998 fourth quarter
and year-end earnings results as reflected in the attached press release which
is incorporated herein by reference and which constitutes a part of this report.
ITEM 7(c). EXHIBITS.
Exhibit 99.1 Press Release dated January 27, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MAF BANCORP, INC.
Date: January 29, 1999 By: /s/ Jerry A. Weberling
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Jerry A. Weberling
Executive Vice President and Chief
Financial Officer
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INDEX TO EXHIBITS
Exhibit
- -------
99.1 Press Release dated January 27, 1999.
4
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
- ---------------------
For: MAF Bancorp, Inc. Contact: Jerry Weberling, EVP and
55th Street & Holmes Avenue Chief Financial Officer
Clarendon Hills, IL 60514 Michael Janssen, Senior
Vice President
(630) 325-7300
MAF BANCORP ANNOUNCES FOURTH QUARTER EARNINGS OF $.41 PER SHARE
Clarendon Hills, Illinois, January 27, 1999 - MAF Bancorp, Inc. announced today
that earnings for the fourth quarter ended December 31, 1998 totaled $9.4
million, or $.41 per diluted share, compared to $9.3 million, or $.39 per
diluted share reported for the quarter ended December 31, 1997. Included in the
current quarter's results was an after-tax extraordinary charge of $456,000, or
$.02 per share resulting from an early extinguishment of debt. Cash earnings per
share (diluted), which excludes amortization of goodwill and deposit base
intangibles, totaled $.44 in the current quarter compared to $.42 in last year's
fourth quarter. Return on equity was 13.63% in the current quarter while cash
return on average tangible equity was 15.91%. Return on average assets was 1.03%
for the quarter ended December 31, 1998 while cash return on average tangible
assets was 1.09% for the current quarter.
For the year ended December 31, 1998, the Company reported record results with
net income of $38.2 million, or $1.65 per diluted share compared to net income
of $37.9 million, or $1.59 per diluted share reported for the year ended
December 31, 1997. 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. Operating results for Westco
Bancorp for the quarter ended December 31, 1998 are not included in MAF
Bancorp's reported results for the current quarter although the December 31,
1998 statement of financial condition does include year-end balances for Westco
Bancorp.
Net interest income, after provision for loan losses, totaled $24.0 million in
the current quarter, up 2.7% from the $23.3 million reported for the quarter
ended December 31, 1997. The Bank's net interest margin was 2.79% for the
current quarter compared to 2.92% for the quarter ended December 31, 1997. The
yield on interest-earning assets declined from 7.59% to 7.13% as higher loan
prepayments led to loans refinancing at lower rates and accelerated amortization
of deferred loan expenses. The lower asset yields were partially offset by a
decline in funding costs as the average cost of interest-bearing liabilities
decreased to 4.67% in the current quarter compared to 5.01% in last year's
comparable period. The net interest margin of 2.79% in the current period was
slightly below the 2.83% reported for the quarter ended September 30, 1998.
The Company continued to be successful in growing its core lending business as
average interest-earning assets expanded to $3.47 billion for the quarter ended
December 31, 1998 compared to $3.25 billion for the quarter ended December 31,
1997. Mortgage loan originations for the three months ended December 31, 1998
totaled a record $519.2 million compared to $331.5 million for the quarter ended
December 31, 1997. For the year, the Company had the most productive year in its
history, originating a record $1.8 billion in mortgage loans, compared to $1.1
billion for calendar 1997.
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Non-interest income for the current quarter totaled $6.4 million, up modestly
from the $6.2 million reported for the quarter ended December 31, 1997. The
improvement resulted from higher gains on sale of loans and continued growth in
deposit account service fees, brokerage commissions and other income. Offsetting
these improvements were a decline in income from real estate operations and a
$529,000 impairment writedown on mortgage loan servicing rights due to higher
than projected prepayments of loans serviced for others.
Lower interest rates and high refinance activity led to considerable loan sale
activity through the Company's mortgage banking operation. Gains on sale of
loans and mortgage-backed securities totaled $954,000 in the current quarter,
compared to $246,000 in last year's fourth quarter. Loan sales in the current
quarter were $118.3 million compared to $39.0 million for the quarter ended
December 31, 1997. Deposit account service charges increased to $2.5 million for
the three months ended December 31, 1998, up 23.3% from the $2.0 million
reported in the year earlier period. Other non-interest income totaled $1.7
million compared to $885,000 a year ago as loan modification fee income
continued to grow as a result of lower mortgage interest rates.
Income from real estate development operations totaled $663,000 for the current
quarter compared to $1.8 million in last year's comparable period. A total of 43
lots were sold in the Company's four subdivisions during the quarter and a total
of 166 lots were under contract at December 31, 1998. Certain higher-margin
developments were substantially completed in 1997.
Non-interest expense totaled $14.7 million for the quarter ended December 31,
1998, up $397,000 or 2.8% from the $14.3 million reported for the quarter ended
December 31, 1997, but down slightly from the $15.0 million reported for the
quarter ended September 30, 1998. Compensation and benefits expense rose to $8.5
million in the current quarter, compared to $7.9 million for the quarter ended
December 31, 1997, an increase of 7.0%. This increase resulted primarily from
normal salary increases and higher loan department compensation expenses
resulting from the record loan volume. Advertising and promotion expense
declined to $479,000 for the quarter ended December 31, 1998 compared to
$798,000 for the quarter ended December 31, 1997. All other major categories of
expense remained relatively stable compared to a year ago. The ratio of
non-interest expense to total average assets was 1.61% for the current quarter.
The Company's efficiency ratio, a measure of the amount of expenses needed to
generate each dollar of revenue, was 48.3%, considerably better than peer group
averages.
Asset quality remained stable as total non-performing assets at December 31,
1998 stood at $22.4 million, or .54% of total assets compared to $19.1 million,
or .53% of total assets at September 30, 1998. The Company recorded a provision
for loan losses of $200,000 in the current quarter and had net charge-offs of
$84,000 during the period, resulting in an allowance for loan losses of $16.8
million at December 31, 1998 equal to 119.4% of total non-performing loans,
74.9% of non-performing assets and .52% of total loans receivable.
For the year ended December 31, 1998, net income totaled $38.2 million, or $1.65
per diluted share, compared to $37.9 million or $1.59 per diluted share for the
year ended December 31, 1997. Cash earnings per share (diluted), totaled $1.73
in calendar 1998 compared to $1.68 in 1997.
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The Company reported a net interest margin of 2.85% for calendar 1998, compared
to 2.98% for calendar 1997. Despite this margin decline, net interest income
after provision for loan losses expanded by 3.4% in 1998 as a result of the
growth in interest-earning assets. The improvement in core banking income was
also aided by a substantial rise in fee income. In calendar 1998, deposit
account fees, brokerage commissions and other income increased by 19.5%, 37.2%
and 56.8%, respectively. Income from real estate development operations totaled
$4.5 million in 1998, down from $6.9 million reported in 1997 as certain
higher-margin developments were substantially completed in 1997. Overall
non-interest expenses rose by 7.9% during the year, due primarily to higher
compensation and benefits expense which increased in large part because of the
record loan origination activity.
Total assets increased to $4.12 billion at December 31, 1998, up $515.5 million
from the $3.61 billion reported for the quarter ended September 30, 1998. The
increase was due to continued growth in loan receivable balances and to the
completion of the merger with Westco Bancorp which had approximately $320
million in assets at the time of closing. The balance of loans receivable at
December 31, 1998 stood at $3.32 billion, compared to $2.92 billion three months
ago, an increase of $400.1 million, of which $244.4 million was attributable to
Westco loan balances. Intangible assets generated from the Westco merger totaled
$34.0 million, comprised of $32.3 million of goodwill and $1.7 million of core
deposit intangibles.
Deposit balances increased by $319.5 million to $2.66 billion at December 31,
1998 compared to $2.34 billion at September 30, 1998. Deposits from Westco of
$259.4 million were the primary factor in the overall increase. Borrowed funds
increased to $1.03 billion at December 31, 1998 compared to $891.0 million at
September 30, 1998.
Total stockholders' equity was $344.7 million at year-end, resulting in a stated
book value per share of $13.80 and a tangible book value per share of $11.31.
During the quarter, the Company repurchased 734,438 shares of its common stock
at an average price of $23.72 per share. The Bank's tangible, core and
risk-based capital percentages of 6.66%, 6.66% and 13.39%, respectively, at
December 31, 1998 exceeded all regulatory requirements by a significant margin.
Return on average assets was 1.07% for the year ended December 31, 1998 while
return on average equity was 13.87%. Cash return on average tangible assets and
cash return on average tangible equity were 1.14% and 16.23%, respectively, for
calendar 1998.
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.
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<PAGE>
MAF BANCORP, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------------------ -------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Interest income....................................... $ 61,881 61,634 247,094 238,915
Interest expense...................................... 37,707 37,993 150,575 145,216
-------- -------- -------- --------
Net interest income................................. 24,174 23,641 96,521 93,699
Provision for loan losses............................. 200 300 800 1,150
-------- -------- -------- --------
Net interest income after provision for
loan losses....................................... 23,974 23,341 95,721 92,549
Non-interest income:
Gain on sale, net:
Loans receivable.................................. 932 240 3,003 419
Mortgage-backed securities........................ 22 6 201 13
Investment securities............................. 210 179 816 404
Foreclosed real estate............................ 60 7 212 17
Income from real estate operations.................. 663 1,788 4,517 6,876
Deposit account service charges..................... 2,457 1,993 8,626 7,217
Loan servicing fee income........................... 287 526 1,400 2,278
Impairment of mortgage servicing rights............. (529) -- (1,269) --
Brokerage commissions............................... 659 589 2,812 2,050
Other............................................... 1,658 885 5,399 3,443
-------- -------- -------- --------
Total non-interest income......................... 6,419 6,213 25,717 22,717
Non-interest expense:
Compensation and benefits........................... 8,478 7,924 34,494 30,472
Office occupancy and equipment...................... 1,620 1,564 6,645 6,203
Federal deposit insurance premiums.................. 347 366 1,438 1,468
Data processing..................................... 578 583 2,267 2,098
Advertising and promotion........................... 479 798 2,281 2,737
Amortization of goodwill............................ 334 334 1,336 1,341
Amortization of core deposit intangible............. 244 293 1,075 1,296
Other............................................... 2,608 2,429 9,407 8,996
-------- -------- -------- --------
Total non-interest expense........................ 14,688 14,291 58,943 54,611
-------- -------- -------- --------
Income before income taxes and extraordinary
item............................................ 15,705 15,263 62,495 60,655
Income taxes.......................................... 5,811 6,007 23,793 22,707
-------- -------- -------- --------
Income before extraordinary item.................. 9,894 9,256 38,702 37,948
Extraordinary item-loss on early extinguishment of
debt, net of tax benefit of $294.................... (456) -- (456) --
-------- -------- -------- --------
Net income........................................ $ 9,438 9,256 38,246 37,948
======== ======== ======== ========
Basic earnings per share:
Income before extraordinary item.................... $ .45 .41 1.72 1.64
Extraordinary item, net of tax...................... (.02) -- (.02) --
-------- -------- -------- --------
Net income........................................ $ .43 .41 1.70 1.64
======== ======== ======== ========
Diluted earnings per share:
Income before extraordinary item.................... $ .43 .39 1.67 1.59
Extraordinary item, net of tax...................... (.02) -- (.02) --
-------- -------- -------- --------
Net income........................................ $ .41 .39 1.65 1.59
======== ======== ======== ========
</TABLE>
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<PAGE>
MAF BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1998 1997
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(UNAUDITED)
<S> <C> <C>
ASSETS
Cash and due from banks..................................................................... $ 53,669 39,721
Interest-bearing deposits................................................................... 24,564 57,197
Federal funds sold.......................................................................... 79,140 50,000
Investment securities, at cost (fair value of $12,360 at December 31, 1998 and $26,222 at
December 31, 1997)........................................................................ 11,107 25,268
Investment securities available for sale, at fair value..................................... 198,960 119,510
Stock in Federal Home Loan Bank of Chicago, at cost......................................... 50,878 33,025
Mortgage-backed securities, at amortized cost (fair value of $127,570 at December 31, 1998
and $216,867 at December 31, 1997)........................................................ 128,538 215,449
Mortgage-backed securities available for sale, at fair value................................ 55,065 67,559
Loans receivable held for sale.............................................................. 89,406 6,537
Loans receivable, net of allowance for losses of $16,770 at December 31, 1998 and $15,475
at December 31, 1997...................................................................... 3,229,670 2,700,590
Accrued interest receivable................................................................. 21,545 20,970
Foreclosed real estate...................................................................... 8,357 489
Real estate held for development or sale.................................................... 25,134 31,197
Premises and equipment, net................................................................. 40,724 35,820
Goodwill.................................................................................... 55,553 24,606
Other assets................................................................................ 49,136 29,726
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$ 4,121,446 3,457,664
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LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits.................................................................................. 2,656,546 2,337,013
Borrowed funds............................................................................ 1,034,500 770,013
Subordinated capital notes, net........................................................... -- 26,779
Advances by borrowers for taxes and insurance............................................. 30,576 22,679
Accrued expenses and other liabilities.................................................... 55,144 37,769
---------- ----------
Total liabilities....................................................................... 3,776,766 3,194,253
---------- ----------
Stockholders' equity:
Preferred stock, $.01 par value; authorized 5,000,000 shares; none outstanding............ -- --
Common stock, $.01 par value; authorized 40,000,000 shares; 25,420,650 issued at
December 31, 1998 and 1997; 24,970,360 shares outstanding at December 31, 1998 and
22,518,632 shares outstanding at December 31, 1997...................................... 254 254
Additional paid-in capital................................................................ 191,473 172,201
Retained earnings, substantially restricted............................................... 159,935 128,917
Accumulated other comprehensive income, net of tax........................................ 425 1,552
Treasury stock, at cost; 450,290 shares at December 31, 1998 and 2,902,018 shares at
December 31, 1997....................................................................... (7,407) (39,513)
---------- ----------
Total stockholders' equity.............................................................. 344,680 263,411
Commitments and contingencies...............................................................
---------- ----------
$ 4,121,446 3,457,664
========== ==========
</TABLE>
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<PAGE>
MAF BANCORP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA
(In thousands, except share data)
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1998 1997
------------ ------------
<S> <C> <C>
Book value per share........................................................... $ 13.80 11.70
Tangible book value per share.................................................. 11.31 10.31
Stockholders' equity to total assets........................................... 8.36% 7.62
Tangible capital ratio (Bank only)............................................. 6.66 6.88
Core capital ratio (Bank only)................................................. 6.66 6.88
Risk-based capital ratio (Bank only)........................................... 13.39 14.34
Common shares outstanding:
Actual....................................................................... 24,970,360 22,518,632
Basic (weighted average)..................................................... 22,433,184 23,131,729
Diluted (weighted average)................................................... 23,198,162 23,898,254
Non-performing loans........................................................... $ 14,049 10,655
Non-performing assets.......................................................... 22,406 11,144
Allowance for loan losses...................................................... 16,770 15,475
Non-performing loans to total loans............................................ .43% .39
Non-performing assets to total assets.......................................... .54 .32
Allowance for loan losses to total loans....................................... .52 .57
Mortgage loans serviced for others............................................. $ 1,065,126 997,204
Investment in Bank real estate subsidiaries.................................... 12,518 15,351
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
--------------------------- ---------------------------
1998 1997 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Average balance data:
Total assets.................................................. $3,652,564 3,408,604 3,569,515 3,316,664
Loans receivable.............................................. 3,007,037 2,688,609 2,862,954 2,568,736
Interest-earning assets....................................... 3,469,380 3,245,441 3,397,751 3,153,717
Deposits...................................................... 2,246,120 2,229,467 2,247,306 2,217,908
Interest-bearing liabilities.................................. 3,204,554 3,010,130 3,128,178 2,920,359
Stockholders' equity.......................................... 276,891 261,926 275,834 258,358
Performance ratios (annualized):
Return on average assets...................................... 1.03% 1.09% 1.07 1.14
Return on average equity...................................... 13.63 14.14 13.87 14.69
Cash return on average tangible assets........................ 1.09 1.16 1.14 1.22
Cash return on average tangible equity........................ 15.91 16.78 16.23 17.55
Average yield on interest-earning assets...................... 7.13 7.59 7.27 7.58
Average cost of interest-bearing liabilities.................. 4.67 5.01 4.81 4.97
Interest rate spread.......................................... 2.46 2.58 2.46 2.61
Net interest margin........................................... 2.79 2.92 2.85 2.98
Average interest-earning assets to average
interest-bearing liabilities................................ 108.26 107.82 108.62 107.99
Non-interest expense to average assets........................ 1.61 1.68 1.65 1.65
Non-interest expense to average assets and
loans serviced for others................................... 1.25 1.30 1.28 1.26
Efficiency ratio.............................................. 48.34 48.16 48.54 47.07
Loan originations and purchases................................. $ 519,213 331,450 1,754,009 1,091,824
Loans and mortgage-backed securities sold....................... 118,254 39,030 437,549 105,817
Cash dividends declared per share............................... .07 .047 .257 .18
</TABLE>
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