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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 26, 2000
MAF BANCORP, INC.
(Exact name of registrant as specified in its charter)
-----------------------------
DELAWARE 0-18121 36-3664868
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
Incorporation) Identification No.)
55TH STREET & HOLMES AVENUE 60514
CLARENDON HILLS, ILLINOIS (Zip Code)
(Address of principal executive
offices)
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 26, 2000, MAF Bancorp, Inc. announced its 1999 fourth
quarter 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 26, 2000.
<PAGE>
SIGNATURE
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 hereunto duly authorized.
MAF Bancorp, Inc.
Date: January 27, 2000 By:/s/ Jerry Weberling
----------------------------
Jerry A. Weberling
Executive Vice President and
Chief Financial Officer
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit
- -------
99.1 Press Release dated January 26, 2000.
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
www.mafbancorp.com (630) 325-7300
MAF BANCORP REPORTS RECORD QUARTERLY EARNINGS OF $.56 PER SHARE
Clarendon Hills, Illinois, January 26, 2000--MAF Bancorp, Inc. (MAFB)
announced today that earnings per share for the fourth quarter ended December
31, 1999 increased 37% to a record $.56 per diluted share, compared to $.41 per
diluted share reported in last year's fourth quarter. Net income for the period
totaled $13.8 million compared to $9.4 million in the year earlier period.
Earnings per share in the current period were highlighted by continued strong
core banking and real estate development results. Cash earnings per share
(diluted), which excludes amortization of goodwill and deposit base intangibles,
totaled $.59 in the current quarter compared to $.44 in last year's fourth
quarter. Return on average equity was 15.7% in the current quarter and the
return on average assets was 1.21%.
The results for the year ended December 31, 1999 also marked the best
performance in the Company's history. Earnings increased to $2.07 per diluted
share, up 25% from the $1.65 per diluted share reported for the year ended
December 31, 1998. Return on average equity was 15.0% for calendar 1999 while
the return on average assets was 1.20% for the current year.
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, results for 1999 periods,
other than per share amounts and ratio analyses, are not generally comparable to
the reported results for the corresponding prior year's quarter.
Net interest income, after provision for loan losses, totaled $29.6 million
in the current quarter compared to $24.0 million a year ago and $29.1 million in
the prior quarter. The Bank's net interest margin remained relatively stable at
2.77% for the quarter ended December 31, 1999 compared to 2.79% for the quarter
ended December 31, 1998 and declined from 2.86% in the previous quarter. The
yield on average interest-earning assets increased seven basis points to 7.08%
over the past three months while the cost of interest-bearing liabilities
increased by 16 basis points to 4.64%. The nine basis point decline in the net
interest margin over the past three months 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 over the next year due to expected higher interest rates. A
continuation of consumers' current preference for adjustable rate loans should
contribute to continued strong earning asset growth, however, and offset
negative margin pressure, resulting in steady growth in net interest income.
Average interest-earning assets in the current quarter grew to $4.33
billion from $3.47 billion reported for last year's fourth quarter and up from
$4.12 billion reported for the quarter ended September 30, 1999. Recent
increases in interest rates slowed mortgage loan volume from its previous record
pace. Loan volume totaled $399.3 million in the current quarter compared to
$519.2 million for the quarter ended December 31, 1998 and $456.9 million in the
quarter ended September 30, 1999.
Non-interest income increased to $9.1 million in the current quarter,
compared to $6.4 million reported for the quarter ended December 31, 1998. These
results were driven by increased real estate development profits, fee income
from deposit account products, higher loan servicing related income and gains on
sale of investment securities. These positive results were offset by reduced
gains on sales of loans in the Company's mortgage banking operation and lower
other income due primarily to a reduction in loan modification fee income and
higher net expenses relating to foreclosed real estate. Income from real estate
operations totaled $2.6 million for the quarter ended December 31, 1999, up
considerably from last year's fourth quarter results of $663,000 and up slightly
from the $2.5 million reported for the
<PAGE>
quarter ended September 30, 1999. A total of 104 residential lots were sold in
the current quarter compared to 43 lots in last year's fourth quarter. A total
of 304 lots were under contract at the end of the quarter, including 226 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. Management expects that strong lot sales in
Tallgrass, along with sustaining the higher gross margins due to recent lot
price increases, will generate strong residential lot sale profits in calendar
2000.
Deposit account service fees totaled $2.8 million for the quarter ended
December 31, 1999, up from the $2.5 million reported in the year earlier period.
Deposit account fee income 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. Total checking accounts now exceed 102,000.
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 $245,000 in the quarter, compared to $954,000 a
year ago. Loan sales in the current quarter were $50.6 million compared to
$118.3 million for the quarter ended December 31, 1998. Loan servicing fee
income increased during the quarter to $520,000 compared to $287,000 in last
year's fourth quarter. The current quarter's results also included a $360,000
recovery of previously recorded mortgage servicing impairment writedowns. The
prior year quarter included a $(529,000) impairment valuation writedown.
Non-interest expense totaled $17.8 million in the current quarter, compared
to $14.7 million reported in the prior year's fourth quarter and $17.2 million
for the quarter ended September 30, 1999. Compensation and benefits expense
totaled $9.6 million in the current quarter, compared to $8.5 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 $266,000, primarily due to the new radio-based company branding campaign
initiated earlier this year. Other expenses increased by $868,000 primarily due
to Year 2000-related expenses and higher professional fees related to the
formation of a mortgage real estate investment trust in connection with a new
tax planning initiative. The ratio of total non-interest expense to average
assets was 1.56% for the current quarter. The Company's efficiency ratio, a
measure of the amount of expense needed to generate each dollar of revenue, was
46.3%, considerably better than peer group averages.
Income tax expense totaled $7.3 million in the current quarter, equal to an
effective income tax rate of 34.6% compared to a 37.0% effective tax rate in the
quarter ended December 31, 1998. The lower effective income tax rate in the
current period compared to a year ago was primarily the result of proactive tax
planning involving the transfer of Bank portfolio assets to a newly-formed
operating subsidiary. In addition, the recognition in the current period of
income tax benefits relating to the resolution of certain prior years' income
tax issues resulted in a lower effective tax rate.
Non-performing assets at December 31, 1999 increased by $1.6 million to
$23.1 million, or .50% of total assets, compared to $21.5 million or .48% of
total assets at September 30, 1999. The Company recorded a provision for loan
losses of $300,000 in the current quarter, while net loan charge-offs totaled
$36,000. The Bank's allowance for loan losses was $17.3 million at December 31,
1999, equal to 110.4% of total non-performing loans, 74.9% of total
non-performing assets and .44% of total loans receivable.
Net income for the year ended December 31, 1999 totaled $51.5 million, or
$2.07 per diluted share, compared to $38.2 million, or $1.65 per diluted share
reported for calendar 1998. Net interest income, after provision for loan
losses, totaled $115.6 million for the current year compared to $95.7 million
for the year ended December 31, 1998. The net interest margin improved to 2.88%
in the current year compared to 2.85% in 1998 while average interest-earning
assets expanded by 19.5%, due in part to strong growth in the Bank's mortgage
loan portfolio over the past year and to the Westco Bancorp acquisition.
Non-interest income totaled $34.8 million in the current year compared to
$25.7 million last year. The increase was led by advances in income from real
estate development operations, deposit account service charges and loan
servicing related income, including the recovery of prior year mortgage
servicing rights impairment writedowns. Income from real estate development
operations totaled $9.6 million compared to $4.5 million for calendar 1998. The
increase in real estate development profits was attributable to $5.2 million of
gains on the sale of three large commercial
2
<PAGE>
real estate parcels. In addition, strong sales in the Company's Tallgrass
subdivision contributed to the strong performance. Deposit account service
charges advanced to $10.2 million in 1999 compared to $8.6 million a year ago,
an increase of 18.2%. Non-interest expense totaled $67.7 million for the current
year compared to $58.9 million last year. The increase over the prior year is
primarily due to the impact of the Westco acquisition, including higher
amortization of intangibles, as well as normal compensation and benefit
increases, higher advertising costs related to the initiation of the branding
campaign and higher professional fees related to tax planning initiatives. The
efficiency ratio of 45.2% for the year ended December 31, 1999 remains better
than industry standards.
Total assets increased to $4.66 billion at December 31, 1999, up $231.4
million from the $4.43 billion reported at September 30, 1999. The growth in
assets during the three-month period was driven by an increase in loans
receivable of $199.6 million. The balance of loans receivable at December 31,
1999 stood at $3.88 billion. Deposits increased slightly during the three-month
period to $2.70 billion while borrowed funds, used to fund the increased loan
balances, increased by $232.2 million to $1.53 billion, compared to $1.29
billion at September 30, 1999. Total stockholders' equity was $352.9 million at
December 31, 1999, resulting in a stated book value per share of $14.76 and a
tangible book value per share of $12.20. The Company repurchased 400,200 shares
of its common stock during the current quarter at an average price of $21.60 per
share. The Bank's tangible, core and risk-based capital percentages of 6.32%,
6.32% and 12.32%, respectively, at December 31, 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
---------------------------
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, 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.
3
<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,
---------------------- -----------------------
1999 1998 1999 1998
--------- ---------- --------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Interest income ........................................ $ 76,640 $ 61,881 $ 285,092 $ 247,096
Interest expense ....................................... 46,716 37,707 168,401 150,575
--------- --------- --------- ---------
Net interest income ................................... 29,924 24,174 116,691 96,521
Provision for loan losses .............................. 300 200 1,100 800
--------- --------- --------- ---------
Net interest income after provision for loan losses ... 29,624 23,974 115,591 95,721
Non-interest income:
Gain (loss) on sale and writedown of:
Loans receivable ................................... 223 932 2,448 3,003
Mortgage-backed securities ......................... 22 22 135 201
Investment securities .............................. 744 210 1,776 816
Foreclosed real estate ............................. 64 60 (57) 212
Income from real estate operations ..................... 2,614 663 9,630 4,517
Deposit account service charges ........................ 2,775 2,457 10,200 8,626
Loan servicing fee income .............................. 520 287 1,761 1,400
Recovery (impairment) of mortgage servicing rights ..... 360 (529) 900 (1,269)
Brokerage commissions .................................. 628 659 2,566 2,812
Other .................................................. 1,198 1,658 5,485 5,399
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Total non-interest income ............................. 9,148 6,419 34,844 25,717
Non-interest expense:
Compensation and benefits ............................. 9,556 8,478 37,845 34,494
Office occupancy and equipment ........................ 1,850 1,620 7,274 6,645
Federal deposit insurance premiums .................... 398 347 1,585 1,438
Data processing ....................................... 755 578 2,611 2,267
Advertising and promotion ............................. 745 479 3,149 2,281
Amortization of goodwill .............................. 686 334 2,648 1,336
Amortization of core deposit intangibles .............. 293 244 1,236 1,075
Other ................................................. 3,476 2,608 11,332 9,407
--------- --------- --------- ---------
Total non-interest expense ......................... 17,759 14,688 67,680 58,943
--------- --------- --------- ---------
Income before income taxes ......................... 21,013 15,705 82,755 62,495
Income taxes ........................................... 7,262 5,811 31,210 23,793
--------- --------- --------- ---------
Income before extraordinary item ...................... 13,751 9,894 51,545 38,702
Extraordinary item-loss on early extinguishment of debt,
net of tax benefit of $294 ............................ -- (456) -- (456)
--------- --------- --------- ---------
Net income ............................................ $ 13,751 $ 9,438 $ 51,545 $ 38,246
========= ========= ========= =========
Basic earnings per share:
Income before extraordinary item ...................... $ .57 .45 2.13 1.72
--------- --------- --------- ---------
Extraordinary item, net of tax ........................ -- (.02) -- (.02)
--------- --------- --------- ---------
Net income ......................................... $ .57 .43 2.13 1.70
========= ========= ========= =========
Diluted earnings per share:
Income before extraordinary item ...................... $ .56 .43 2.07 1.67
Extraordinary item, net of tax ........................ -- (.02) -- (.02)
--------- --------- --------- ---------
Net income ......................................... $ .56 .41 2.07 1.65
========= ========= ========= =========
</TABLE>
4
<PAGE>
MAF BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands)
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1999 1998
------------ ------------
(UNAUDITED)
ASSETS
<S> <C> <C>
Cash and due from banks ................................................ $ 71,721 $ 53,995
Interest-bearing deposits .............................................. 51,306 24,564
Federal funds sold ..................................................... 35,013 79,140
Investment securities, at cost (fair value of $12,321 and $12,360) ..... 11,999 11,107
Investment securities available for sale, at fair value ................ 194,105 198,960
Stock in Federal Home Loan Bank of Chicago, at cost .................... 75,025 50,878
Mortgage-backed securities, at amortized cost (fair value of $92,095 and
$127,570) ............................................................. 94,251 128,538
Mortgage-backed securities available for sale, at fair value ........... 39,703 55,065
Loans receivable held for sale ......................................... 12,601 89,406
Loans receivable, net of allowance for losses of $17,276 and $16,770 ... 3,871,968 3,229,670
Accrued interest receivable ............................................ 23,740 21,545
Foreclosed real estate ................................................. 7,415 8,357
Real estate held for development or sale ............................... 15,889 25,134
Premises and equipment, net ............................................ 42,489 40,724
Other assets ........................................................... 49,640 41,785
Intangible assets, net of accumulated amortization of $10,555 and $6,671 61,200 62,219
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$ 4,658,065 $ 4,121,087
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits .............................................................. 2,699,242 2,656,872
Borrowed funds ........................................................ 1,526,363 1,034,500
Advances by borrowers for taxes and insurance ......................... 34,767 30,576
Accrued expenses and other liabilities ................................ 44,772 54,143
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Total liabilities .................................................. 4,305,144 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; 23,911,508 and
24,984,398 shares outstanding ...................................... 254 254
Additional paid-in capital ............................................. 194,874 191,473
Retained earnings, substantially restricted ............................ 198,156 159,935
Stock in Gain Deferral Plan; 223,453 shares ............................ 511 --
Accumulated other comprehensive income (loss) .......................... (3,675) 425
Treasury stock, at cost; 1,732,595 and 436,252 shares .................. (37,199) (7,091)
----------- -----------
Total stockholders' equity ......................................... 352,921 344,996
Commitments and contingencies .......................................... $ 4,658,065 $ 4,121,087
=========== ===========
</TABLE>
5
<PAGE>
MAF BANCORP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA
(In thousands, except share data)
DECEMBER 31, DECEMBER 31,
1999 1998
------------ ------------
Book value per share ...................... $ 14.76 $ 13.81
Tangible book value per share ............. 12.20 11.32
Stockholders' equity to total assets ...... 7.58% 8.37%
Tangible capital ratio (Bank only) ........ 6.32% 6.67%
Core capital ratio (Bank only) ............ 6.32% 6.67%
Risk-based capital ratio (Bank only) ...... 12.32% 13.42%
Common shares outstanding:
Actual ................................... 23,911,508 24,984,398
Basic (weighted average) ................. 24,253,946 22,433,184
Diluted (weighted average) ............... 24,930,613 23,198,162
Non-performing loans ...................... $ 15,645 $ 14,049
Non-performing assets ..................... 23,061 22,406
Allowance for loan losses ................. 17,276 16,770
Non-performing loans to total loans ....... .40% .43%
Non-performing assets to total assets ..... .50% .54%
Allowance for loan losses to total loans .. .44% .52%
Mortgage loans serviced for others ........ $1,226,874 $1,065,126
Investment in Bank real estate subsidiaries 7,930 12,518
<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
-------------------------- --------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Average balance data:
Total assets ............................... $4,556,491 $3,652,564 $4,283,691 $3,569,515
Loans receivable ........................... 3,806,252 3,007,037 3,565,375 2,862,954
Interest-earning assets .................... 4,325,463 3,469,380 4,061,334 3,397,751
Deposits ................................... 2,657,337 2,246,120 2,553,732 2,247,306
Interest-bearing liabilities ............... 3,993,290 3,204,554 3,740,994 3,128,178
Stockholders' equity ....................... 350,200 276,891 344,106 275,834
Performance ratios (annualized):
Return on average assets ................... 1.21% 1.03% 1.20% 1.07%
Return on average equity ................... 15.71 13.63 14.98 13.87
Cash return on average tangible assets ..... 1.30 1.09 1.30 1.14
Cash return on average tangible equity ..... 20.01 15.91 19.25 16.23
Average yield on interest-earning assets ... 7.08 7.13 7.02 7.28
Average cost of interest-bearing liabilities 4.64 4.67 4.50 4.81
Interest rate spread ....................... 2.44 2.46 2.52 2.47
Net interest margin ........................ 2.77 2.79 2.88 2.85
Average interest-earning assets to average
interest-bearing liabilities ............ 108.32 108.26 108.56 108.62
Non-interest expense to average assets ..... 1.56 1.61 1.58 1.65
Non-interest expense to average assets and
loans serviced for others ............... 1.23 1.25 1.25 1.28
Efficiency ratio ............................ 46.33 48.34 45.19 48.54
Loan originations and purchases ............. $ 399,332 $ 519,213 $1,711,337 $1,754,009
Loans and mortgage-backed securities sold ... 50,640 118,254 402,891 437,549
Cash dividends declared per share ........... .09 .07 .340 .257
</TABLE>
6
