MAFB Maf Bancorp (MM)

MAF Bancorp Reports Second Quarter Earnings of $.77 Per Diluted Share; Lowers Outlook for 2004 CLARENDON HILLS, Ill., July 23 /PRNewswire-FirstCall/ -- MAF Bancorp, Inc. (NASDAQ:MAFB) announced today that net income for the second quarter ended June 30, 2004 totaled $26.0 million compared to $19.5 million in last year's second quarter. Earnings per diluted share for the current quarter totaled $.77 per diluted share, compared to $.82 per diluted share reported for the second quarter of 2003. The current quarter's results include $.03 of charges for merger-related costs and a previously-disclosed accounting change. For the six months ended June 30, 2004, diluted earnings per share totaled $1.50 compared to $1.63 for the first six months of 2003. Earnings per share for the 2004 periods were impacted by the larger number of average shares outstanding as a result of the Company's acquisition of St. Francis Capital Corporation in December 2003 and Fidelity Bancorp in July 2003. As discussed later, the Company currently estimates calendar 2004 results of $3.20-$3.35 per diluted share. Net Interest Income and Net Interest Margin QE 6/30/04 QE 3/31/04 QE 6/30/03 Net interest margin 3.05% 3.10% 2.89% Interest rate spread 2.86% 2.90% 2.59% Net interest income (000's) $65,170 $64,029 $40,563 Average assets: Yield on interest-earning assets 4.85% 4.94% 5.27% Yield on loans receivable 5.05% 5.14% 5.67% Yield on mortgage-backed securities 3.78% 3.74% 3.60% Yield on investment securities 4.84% 5.11% 4.57% Average interest-earning assets (000's) $8,539,108 $8,264,886 $5,613,261 Average liabilities: Cost of interest-bearing liabilities 1.99% 2.04% 2.68% Cost of deposits 1.34% 1.34% 1.70% Cost of borrowed funds 3.34% 3.58% 5.01% Average interest-bearing liabilities (000's) $7,704,319 $7,472,967 $4,995,666 Net Interest Margin: 2nd Quarter 2004 v. 1st Quarter 2004. The net interest margin contracted by five basis points during the quarter. The yield on interest-earning assets fell by 9 basis points, largely due to the decrease in the overall yield on the loan portfolio. While loan refinancing activity has recently slowed and the pace of the decline in the yield on loans receivable has slowed, new portfolio originations of adjustable-rate loans and equity lines of credit remain priced at levels below the average portfolio yield. The net interest margin was also impacted by the reduction from 6.5% to 6.0% in the dividend yield earned during the quarter on an investment of approximately $390 million in Federal Home Loan Bank of Chicago stock. The average cost of interest-bearing liabilities also declined, but at a slower rate than asset yields, decreasing 5 basis points over the past three months. This decline was largely due to the decrease in the cost of borrowed funds as the cost of new borrowings were significantly lower than the overall portfolio cost. The average cost for deposits, the Company's primary funding source, remained stable. Average interest-earning assets grew at a 13.3% annualized rate during the quarter, fueled by increases in loans receivable held in portfolio. Compared to the first quarter of 2004, average loans receivable balances increased by $207 million to $6.67 billion. A consumer shift to adjustable-rate loans, which the Company generally retains in portfolio, along with the continued growth in home equity loan balances, were the primary reasons for the increase. Average mortgage-backed securities balances also showed considerable growth, increasing $65 million to $1.03 billion, reflecting securitization of loans receivable offset by prepayments in the portfolio. Other categories of interest-earning assets remained relatively stable. The asset growth was largely matched by growth in average interest-bearing liabilities, which increased at an annualized rate of 12.4%. The average balance of borrowed funds rose by $184 million to $2.50 billion and represented the primary source of funding for the asset growth during the quarter. During the past three months, the average balance of deposits increased by $48 million to $5.20 billion. Net Interest Margin: 2nd Quarter 2004 v. 2nd Quarter 2003. Compared to the prior year quarter, the Company's funding costs declined at a faster pace than decreases in asset yields, and led to the 16 basis point increase in the net interest margin. This year over year improvement in net interest margin primarily reflects the lower cost funding added in the St. Francis merger. Lending Production QE 6/30/04 QE 3/31/04 QE 6/30/03 Amount % Amount % Amount % Loan Category (000's) 1-4 family originations $838,508 65% $553,422 61% $1,178,190 85% Multi-family 51,427 4 34,176 4 44,289 3 Equity lines of credit 282,064 22 231,983 26 135,689 10 All other 123,779 9 81,302 9 34,151 2 Total loan originations $1,295,778 100% $900,883 100% $1,392,319 100% 1-4 family originations Fixed rate % 41% 41% 57% Adjustable rate % 59 59 43 Refinance % 50 52 63 While interest rates remained attractive and at historically low levels, refinancing activity has recently slowed, leading to the lower residential mortgage loan volume compared to a year ago. Loan volume was higher in the second quarter of 2004 than the first quarter due to the decrease in rates in late March that created a flurry of refinancing activity in early April. The subsequent rise in interest rates during the second quarter significantly dampened mortgage loan demand. The Company currently expects 1-4 family mortgage loan volume to be significantly lower in the second half of 2004 compared to the first half due to a decrease in refinance activity and increased competition. Home purchase activity in the Bank's markets remains steady. Also, the Company continued to have success in marketing its home equity loan products. Home equity loan balances increased to $1.12 billion at June 30, 2004 compared to $1.04 billion at March 31, 2004 and $491 million at June 30, 2003. Home equity loan balances represented approximately 17% of the Company's total loan portfolio at June 30, 2004. Non-Interest Income QE 6/30/04 QE 3/31/04 QE 6/30/03 Total non-interest income (000's) $19,082 $20,395 $16,973 Non-interest income / total revenue * 22.6% 24.2% 29.5% * total revenue = net interest income plus non-interest income Overview. In the current quarter, loan sale gains declined from a year ago but mortgage servicing-related income increased and income from deposit account service charges and brokerage commissions increased. Given the refinance boom of a year ago, last year's second quarter results were highlighted by significant loan sale gains, reflecting high loan sale volume occurring during a declining interest rate environment, offset by high loan servicing amortization expense and impairment of mortgage servicing rights. The sequential quarter decline is primarily due to investment securities gains recorded in the first quarter of 2004. Loan Sales and Loan Servicing QE 6/30/04 QE 3/31/04 QE 6/30/03 Loan Sales Fixed-rate loans sold (000's) $208,089 $128,649 $401,358 Adjustable rate loans sold (000's) 49,403 4,832 - Total loans sold (000's) $257,492 $133,481 $401,358 Loan sale gains (000's) $1,676 $1,780 $8,254 Margin on loan sales 65 bp * 133 bp 206 bp * A change in accounting treatment during the current quarter resulted in a 30 basis point reduction in margin on loan sales. Loan Servicing Loan servicing fee income (expense) (000's) ($115) $241 ($2,040) Valuation (impairment) recovery on mortgage servicing rights (000's) $1,200 $555 ($940) Capitalized mortgage servicing rights as a percentage of loans serviced for others 75 bp 71 bp 62 bp During the quarter, fixed rate loan sales increased to $208.1 million from $128.6 million in the first quarter due to the decrease in long-term mortgage rates in March 2004 that led to an increase in refinance volumes. In addition, the Company began selling some of its adjustable-rate loan originations, resulting in an overall increase of $124.0 million in loan sale volume to $257.5 million from $133.5 million in the first quarter of 2004. Profits on adjustable-rate loan sales tend to be much less than on sales of fixed-rate loans and as a result, the overall margin on loan sales declined. Loan sale margins were negatively impacted by the general trend of increasing rates during most of the quarter as well as from an accounting change. As previously disclosed, this quarter's earnings include the adoption of SAB No. 105, which prohibits the inclusion of estimated servicing cash flows within the valuation of interest rate lock commitments under SFAS No. 133. The Company previously included a portion of the value of the associated servicing cash flows when recognizing loan commitments at inception and throughout its life. The adoption of SAB No. 105 created an accounting change in second quarter 2004 and lowered gain on sale by $765,000. This impact is a one-time change and will not affect the ongoing economic value of this business. Slower than expected loan prepayments led to a $1.2 million recovery of valuation reserves on mortgage servicing rights. Deposit Account Service Fees QE 6/30/04 QE 3/31/04 QE 6/30/03 Deposit service charges (000's) $8,721 $7,856 $5,960 Growth rate (year over year) 46.3% 44.4% 7.8% Growth rate (sequential quarter annualized) 44.0% 42.5% 38.3% Deposit service fees / total revenue 10.3% 9.3% 10.4% Checking accounts 238,500 235,600 161,300 Deposit account service fees increased considerably compared to the second quarter of 2003, primarily due to the impact of the St. Francis and Fidelity mergers. As a percentage of total revenue, deposit service fees remained consistent with last year's comparable period and slightly ahead of the results in the first quarter of this year. Real Estate Development Operations QE 6/30/04 QE 3/31/04 QE 6/30/03 RE development income - total (000's) $2,509 $1,102 $1,687 Residential lot sales 64 25 31 Pending lot sales at quarter end 10 58 72 Investment in real estate held for development or sale (000's) $38,416 $32,557 $23,280 All but one of the 64 lot sales during the quarter were residential lots in the Company's Shenandoah subdivision in Plainfield, IL. Most of the lot sales in the first quarter of 2004 were also in this 326-lot development, where 46 lots remain as of June 30, 2004. The increase in the investment in real estate compared to a year ago relates primarily to land purchases for the planned Springbank joint venture development in Plainfield, Illinois. Securities Sales QE 6/30/04 QE 3/31/04 QE 6/30/03 Investment securities: Net gains (losses) on sale (000's) ($32) $2,834 $285 Mortgage-backed securities: Net gains on sale (000's) - $489 - During the first quarter of 2004, the Company sold three investment securities on which it had previously taken other-than-temporary-impairment writedowns in 2002 and 2003. The net gain from the sale of these three securities was $2.7 million. Non-Interest Expense QE 6/30/04 QE 3/31/04 QE 6/30/03 Total non-interest expense (000's) $45,184 $46,890 $26,744 Non-interest expense to average assets 1.96% 2.10% 1.79% Efficiency ratio (1) 53.61% 57.82% 46.71% (1) The efficiency ratio is calculated by dividing non-interest expense by the sum of net interest income and non-interest income, excluding net gain/(loss) on sale and writedown of mortgage-backed and investment securities. Non-interest expense decreased modestly in the current quarter compared to the first quarter of 2004, primarily the result of the beginning of some compensation cost savings related to the St. Francis operations following the completion, on May 31, 2004, of the data processing and other systems conversion. Overall expenses in the current quarter also reflect approximately $880,000 in costs related to completion of the St. Francis systems conversion, including software programming costs and incremental incentive compensation and overtime costs. Compared to a year ago, all major categories of non-interest expense showed increases due to significant growth of the Company during the past year, including expansion into new markets. The added cost of management personnel and infrastructure needed to facilitate this growth and to address the increased compliance burden under new regulations also contributed to higher expenses year over year. Compensation and benefits expense totaled $24.0 million in the current period compared to $25.6 million in the quarter ended March 31, 2004 and $15.7 million in the second quarter of last year. The increase compared to a year ago was primarily due to the 2003 mergers, although normal salary increases, higher payroll taxes, increased medical costs and staffing at new branch offices opened during the past year also contributed to increased compensation costs. Office occupancy and equipment costs totaled $6.7 million in the current period compared to $6.5 million in the first quarter of 2004 and $3.5 million a year ago. This increase from a year ago is due primarily to the operation of 67 branch offices, compared to 43 offices operated at June 30, 2003. The additional rent expense resulting from the 2004 consolidation of four loan operations centers into one location also contributed to occupancy cost increases but is designed to improve efficiencies over the long term. Income tax expense totaled $12.8 million in the current quarter, an effective income tax rate of 33.0%, compared to $11.3 million or an effective income tax rate of 36.5% for the quarter ended June 30, 2003. The decline in the effective income tax rate is primarily due to the tax benefits generated from St. Francis' low income and senior housing projects. Asset Quality QE 6/30/04 QE 3/31/04 QE 6/30/03 Non-performing loans (NPL) (000's) $28,944 $30,259 $22,391 Non-performing assets (NPA) (000's) $31,152 $32,179 $32,802 NPL / total loans .43% .47% .49% NPA / total assets .33% .35% .55% Allowance for loan losses (ALL) (000's) $34,721 $34,437 $19,379 ALL / total loans .52% .53% .42% ALL / NPL 120.0% 113.8% 86.5% Provision for loan losses (000's) $280 $300 - Net charge-offs (recoveries) (000's) ($4) $418 $92 The Company continues to maintain strong asset quality. At June 30, 2004, 93% of non-performing loans consisted of loans secured by one-to four-family residential properties, compared to 90% at March 31, 2004. The Company recorded a provision for loan losses of $280,000 in the current quarter primarily due to the growth in the loan portfolio. Balance Sheet & Capital QE 6/30/04 QE 3/31/04 QE 6/30/03 Assets: Total assets (000's) $9,374,628 $9,077,753 $5,971,295 Loans receivable (000's) $6,730,929 $6,454,210 $4,614,757 Mortgage-backed securities (000's) $975,348 $1,045,142 $315,393 Liabilities and Equity: Total liabilities (000's) $8,468,564 $8,162,889 $5,445,459 Deposits (000's) $5,673,046 $5,618,127 $3,836,466 Borrowed funds (000's) $2,612,099 $2,381,838 $1,471,000 Stockholders' equity (000's) $906,064 $914,864 $525,836 Other: 1-4 family residential loans / total loans 60.8% 60.8% 76.9% Core deposits / total deposits 60.6% 59.9% 59.0% Book value per share $27.74 $27.79 $22.66 Stockholders equity / total assets 9.7% 10.1% 8.8% Total assets increased $296.9 million over the past three months (13.1% annualized) due primarily to growth in loans held in the portfolio. This growth was attributable to increased ARM originations, reflecting a shift in consumer preferences and the continued growth in home equity loan balances. Loans receivable increased by $277 million during the quarter, which represented annualized growth in loan balances of 17.1%. The percentage of 1-4 family residential loans to total loans remained steady at June 30, 2004 compared to March 31, 2004 but changed considerably compared to a year ago, primarily as a result of the impact of the St. Francis merger. The percentage of core deposits improved modestly. Stockholders' equity decreased during the quarter as the increase from net income of $26.0 million was partially offset by $6.9 million of dividends, and a $16.3 million after-tax decline in the market value of securities available for sale, due to the sharp rise in interest rates during the current quarter. In addition, the Company repurchased 309,500 shares during the quarter at an average price of $41.71 per share. Through June 30, 2004, a total of 1,380,000 shares have been repurchased under the Company's 1.6 million share repurchase program at an average price of $40.04 per share. The Bank's tangible, core and risk-based capital percentages of 6.71%, 6.71% and 10.60%, respectively, at June 30, 2004 exceeded all minimum regulatory capital requirements. Results for the Six Months Ended June 30, 2004 Diluted earnings per share totaled $1.50 in the current six-month period compared to $1.63 last year. For the six months ended June 30, 2004, net income totaled $50.8 million compared to $38.8 million in last year's comparable period. Net interest income totaled $129.2 million compared to $81.6 million last year. The net interest margin expanded to 3.08% for the six months ended June 30, 2004, compared to 2.91% for the first six months of 2003. Return on equity for the six months ended June 30, 2004 was 11.14% compared to 15.03% for the six months ended June 30, 2003. Non-interest income totaled $39.5 million for the six months ended June 30, 2004, equal to 23.4% of total revenue. For the six months ended June 30, 2003, non-interest income was $33.0 million, or 28.8% of total revenue. In the prior year period, there was considerable loan refinancing activity resulting in gains on sale of loans totaling $15.8 million compared to $3.5 million in the current year. Gains on sales of mortgage-backed securities were $489,000 for the current period compared to $5.4 million for the prior year period. Higher deposit account service charges and a $1.8 million impairment recovery related to servicing rights also contributed to the increase in 2004. Additionally, the results from last year included losses from sales and writedowns of investment securities of $5.4 million while the current period had net gains of $2.8 million. Non-interest expense totaled $92.1 million in the current six-month period, compared to $53.4 million reported for the six months ended June 30, 2003. Increased compensation expense accounted for $18.3 million of the increase, while all other categories of non-interest expense showed large increases due generally to increased costs associated with the Company's considerable market expansion over the past year. Recent Developments On June 5, 2004, the Company announced it had reached an agreement to acquire Chesterfield Financial Corp. in a cash and stock transaction valued at approximately $128.5 million. The Company expects this transaction to close in the fourth quarter of 2004. At March 31, 2004, Chesterfield had assets of $361 million, deposits of $279 million and four banking facilities in the Chicago area. Outlook for 2004 The Company indicated that it currently expects earnings for 2004 to be in the range of $3.20-$3.35 per diluted share. The lowered earnings guidance is primarily a function of current market dynamics. Mortgage loan demand, particularly refinance activity which comprised a significant portion of overall loan volume during 2003 and the beginning of 2004, has dropped significantly following the rise in interest rates during the second quarter. These developments have led the Company to lower its outlook on mortgage loan volume for the balance of the year and to increase lower-yielding adjustable- rate mortgages in its projected mortgage origination product mix. While the Company expects to benefit from lower non-interest expenses in the second half of the year due to completion of the St. Francis systems conversion, some of this benefit will be offset by higher than previously anticipated costs relating to management personnel and infrastructure improvements to accommodate the growth of the Company, as well as from increased costs associated with compliance with new laws affecting public companies. As a result of lower projected loan origination volume, the Company currently expects less earning asset growth in 2004 than previously projected, which impacts expected net interest income. In addition, the Company expects loan sale profits from 1-4 family originations to be less than previously projected. Income from real estate development activities is projected to be lower than previously estimated because of delays in receiving municipal approvals for the Company's Springbank development. While the approvals are still expected this year, the delay will postpone at least some of the previously anticipated lot sale closings in this new project until 2005. The Company currently estimates income from real estate development operations to be in the range of $6.0-$9.5 million for 2004. The projections assume a stable housing purchase market, continued good credit quality and completion of the Company's previously authorized stock buyback program. MAF Bancorp is the parent company of Mid America Bank, a federally chartered stock savings bank. The Bank currently operates a network of 67 retail banking offices throughout Chicago and Milwaukee and their surrounding areas. Offices in Wisconsin operate under the name "St. Francis Bank, a division of Mid America Bank." 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 including the statements in the "Outlook for 2004" section above, 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. These forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words "believe," "expect," "intend," "anticipate," "estimate," "project," "plan," or similar expressions. The Company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain and actual results may differ from those predicted. The Company undertakes no obligation to update these forward- looking statements in the future. Factors which could have a material adverse effect on operations and could affect management's outlook or future prospects of the Company and its subsidiaries include, but are not limited to, higher than expected overhead, infrastructure and compliance costs needed to support growth in the Company, difficulties implementing the Company's business model in the Milwaukee area markets, unanticipated changes in interest rates or flattening of the yield curve, demand for loan products, unanticipated changes in secondary mortgage market conditions or the market for mortgage servicing rights, deposit flows, competition, adverse federal or state legislative or regulatory developments, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and Federal Reserve Board, difficulties or delays in completing the acquisition of Chesterfield, higher than expected costs or unanticipated difficulties associated with the integration of Chesterfield into MAF, deteriorating economic conditions which could result in increased delinquencies in MAF's or Chesterfield's loan portfolio, the quality or composition of MAF's or Chesterfield's loan or investment portfolios, demand for financial services and residential real estate in MAF's or Chesterfield's market area, unanticipated slowdowns in real estate lot sales or problems in closing pending real estate contracts, delays in real estate development projects, the possible short-term dilutive effect of other potential acquisitions, if any, and changes in 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. NOTE: The following notice is included to meet certain legal requirements. MAF has filed a registration statement containing a preliminary proxy statement/prospectus and other documents regarding the proposed transaction with Chesterfield Financial Corp. with the Securities and Exchange Commission. Chesterfield shareholders are urged to read the proxy statement/prospectus, because it contains important information about MAF and Chesterfield, and the proposed transaction. When available, copies of this proxy statement/prospectus will be mailed to Chesterfield shareholders, and it and other documents filed by MAF or Chesterfield with the SEC may be obtained free of charge at the SEC's web site at http://www.sec.gov/, or by directing a request to MAF at 55th Street & Holmes Avenue, Clarendon Hills, IL 60514 or Chesterfield at 10801 S. Western Avenue, Chicago, IL 60643. Chesterfield and its directors, executive officers and certain other members of management and employees may be soliciting proxies from their stockholders in favor of the proposed merger. Information regarding such persons who may, under the rules of the SEC, be considered to be participants in the solicitation of Chesterfield's stockholders in connection with the proposed merger is set forth in Chesterfield's proxy statement filed with the SEC on October 17, 2003 relating to its annual meeting of stockholders held on November 18, 2003. Additional information is set forth in the preliminary proxy statement/prospectus on file with the SEC. MAF BANCORP, INC. AND SUBSIDIARIES STATEMENTS OF OPERATIONS (Dollars in thousands, except per share data) Three Months Ended Six Months Ended June 30, June 30, 2004 2003 2004 2003 (Unaudited) (Unaudited) Interest income $103,378 73,925 $205,385 150,951 Interest expense 38,208 33,362 76,186 69,333 Net interest income 65,170 40,563 129,199 81,618 Provision for loan losses 280 - 580 - Net interest income after provision for loan losses 64,890 40,563 128,619 81,618 Non-interest income: Gain (loss) on sale and writedown of: Loans receivable held for sale 1,676 8,254 3,456 15,802 Mortgage-backed securities - - 489 5,352 Investment securities (32) 285 2,802 (5,427) Foreclosed real estate 50 302 196 233 Income from real estate operations 2,509 1,687 3,611 3,322 Deposit account service charges 8,721 5,960 16,577 11,399 Loan servicing fee income (expense) (115) (2,040) 126 (3,416) Valuation recovery (allowance) on mortgage servicing rights 1,200 (940) 1,755 (940) Brokerage commissions 1,002 648 2,098 1,379 Other 4,071 2,817 8,367 5,284 Total non-interest income 19,082 16,973 39,477 32,988 Non-interest expense: Compensation and benefits 24,006 15,654 49,640 31,292 Office occupancy and equipment 6,722 3,453 13,225 6,984 Advertising and promotion 2,594 1,777 5,001 3,098 Data processing 2,289 992 4,407 1,965 Other 8,842 4,498 18,330 9,331 Amortization of core deposit intangibles 731 370 1,471 749 Total non-interest expense 45,184 26,744 92,074 53,419 Income before income taxes 38,788 30,792 76,022 61,187 Income taxes 12,818 11,253 25,258 22,360 Net income $25,970 19,539 50,764 38,827 Basic earnings per share $.79 .84 1.54 1.67 Diluted earnings per share .77 .82 1.50 1.63 MAF BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Dollars in thousands) (Unaudited) June 30, December 31, 2004 2003 Assets Cash and due from banks $134,051 144,290 Interest-bearing deposits 116,443 57,988 Federal funds sold 64,410 19,684 Total cash and cash equivalents 314,904 221,962 Investment securities available for sale, at fair value 347,833 365,334 Stock in Federal Home Loan Bank of Chicago, at cost 366,681 384,643 Mortgage-backed securities available for sale, at fair value 874,052 971,969 Mortgage-backed securities held to maturity (fair value $98,300) 101,296 - Loans receivable held for sale 106,831 44,511 Loans receivable, net of allowance for losses of $34,721 and $34,555 6,624,098 6,324,596 Accrued interest receivable 32,822 31,168 Foreclosed real estate 2,204 3,200 Real estate held for development or sale 38,416 32,093 Premises and equipment, net 132,434 122,817 Other assets 133,245 130,615 Goodwill 262,443 262,488 Intangibles 37,369 38,189 $9,374,628 8,933,585 Liabilities and Stockholders' Equity Liabilities: Deposits 5,673,046 5,580,455 Borrowed funds 2,612,099 2,299,427 Advances by borrowers for taxes and insurance 49,952 41,149 Accrued expenses and other liabilities 133,467 110,950 Total liabilities 8,468,564 8,031,981 Stockholders' equity: Preferred stock, $.01 par value; authorized 5,000,000 shares; none outstanding - - Common stock, $.01 par value; 80,000,000 shares authorized; 33,121,465 and 33,063,853 shares issued; 32,667,915 and 33,063,853 shares outstanding 331 331 Additional paid-in capital 497,663 495,747 Retained earnings, substantially restricted 435,897 402,402 Accumulated other comprehensive income (loss), net of tax (9,823) 2,109 Stock in Gain Deferral Plan; 243,052 and 240,879 shares 1,109 1,015 Treasury stock, at cost; 453,550 at June 30, 2004 (19,113) - Total stockholders' equity 906,064 901,604 $9,374,628 8,933,585 MAF BANCORP, INC. AND SUBSIDIARIES SELECTED FINANCIAL DATA (In thousands, except share data) (Unaudited) June 30, December 31, June 30, 2004 2003 2003 Book value per share $27.74 $27.27 $22.66 Stockholders' equity to total assets 9.67% 10.09% 8.81% Tangible capital ratio (Bank only) 6.71 7.16 6.96 Core capital ratio (Bank only) 6.71 7.16 6.96 Risk-based capital ratio (Bank only) 10.60 11.45 11.73 Common shares outstanding: Actual 32,667,915 33,063,853 23,201,179 Basic (weighted average) 32,740,881 27,951,055 23,274,342 Diluted (weighted average) 33,564,045 28,836,235 23,857,888 Non-performing loans $28,944 $32,787 $22,391 Non-performing assets 31,152 43,684 32,802 Allowance for loan losses 34,721 34,555 19,379 Non-performing loans to total loans .43% .51% .49% Non-performing assets to total assets .33 .49 .55 Allowance for loan losses to total loans .52 .54 .42 Mortgage loans serviced for others $3,308,843 $3,330,039 $2,237,178 Capitalized mortgage servicing rights, net 24,779 24,128 13,820 Core deposit intangibles 12,590 14,061 6,506 Three Months Ended Six Months Ended June 30, June 30, 2004 2003 2004 2003 Average balance data: Total assets $9,238,105 $5,966,598 $9,087,753 $5,946,390 Loans receivable 6,665,054 4,533,706 6,561,424 4,519,388 Interest-earning assets 8,539,108 5,613,261 8,401,997 5,599,867 Deposits 5,201,601 3,514,946 5,177,834 3,494,269 Interest-bearing liabilities 7,704,319 4,995,666 7,588,643 4,996,482 Stockholders' equity 910,958 522,170 911,079 516,654 Performance ratios (annualized): Return on average assets 1.12% 1.31% 1.12% 1.31% Return on average equity 11.40 14.97 11.14 15.03 Average yield on interest-earning assets 4.85 5.27 4.89 5.40 Average cost of interest-bearing liabilities 1.99 2.68 2.01 2.80 Interest rate spread 2.86 2.59 2.88 2.60 Net interest margin 3.05 2.89 3.08 2.91 Average interest-earning assets to average interest-bearing liabilities 110.84% 112.36% 110.72 112.08% Non-interest expense to average assets 1.96 1.79 2.03 1.80 Non-interest expense to average assets and loans serviced for others 1.44 1.31 1.52 1.32 Efficiency ratio (1) 53.61 46.71 55.67 46.58 Loan originations $1,295,778 $1,392,319 $2,196,661 $2,448,220 Loans sold 257,492 401,358 390,973 878,976 Cash dividends declared per share .21 .18 .42 .36 (1) The efficiency ratio is calculated by dividing non-interest expense by the sum of net interest income and non-interest income, excluding net gain/(loss) on sale and writedown of mortgage-backed and investment securities. DATASOURCE: MAF Bancorp CONTACT: Jerry A. Weberling, Chief Financial Officer of MAF Bancorp, Inc., +1-630-887-5999 Web site: http://www.mafbancorp.com/

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