MAF Bancorp, Inc. was incorporated under the laws of the state of Delaware in 1989, as the holding company for Mid America Bank, fsb (“Bank”), our banking subsidiary. The Bank, which was organized as a mutual savings and loan association and has been operating in the Chicago area since 1922, formed the holding company in connection with its conversion from a mutual to stock savings institution. Over the last five years, the Bank has grown from 32 branches and $5.60 billion in total assets at December 31, 2001 to 82 branches and $11.12 billion in assets at December 31, 2006. Today, the Bank is one of the largest community-oriented financial institutions in the Chicago and Milwaukee metropolitan areas, serving both retail and business banking customers. We also engage in residential real estate land development through our subsidiary, MAF Developments, Inc., or MAFD, a business we have been active in for over 30 years.
The Company’s executive offices are located at 55th Street and Holmes Avenue, Clarendon Hills, Illinois 60514-1500. The Company’s telephone number is (630) 325-7300.
We have grown our franchise through de novo branching, as well as acquisitions of other financial institutions and branch acquisitions. We have opened 13 denovo branches in the past five years. The table below summarizes information regarding the acquisitions we have completed during the past five years.
| Acquired Company |
Number of Branches |
Market Area |
Acquisition Date |
Total Assets at Closing |
Total Deposits at Closing | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (In thousands) | ||||||||||||||||||||
| EFC Bancorp, Inc. | 7 | Elgin, IL | February 2006 | $ | 1,052,943 | 703,435 | ||||||||||||||
| Chesterfield Financial Corp | 3 | Chicago, IL | November 2004 | 354,221 | 270,711 | |||||||||||||||
| St. Francis Capital Corporation | 23 | Milwaukee, WI | December 2003 | 2,190,627 | 1,294,517 | |||||||||||||||
| Fidelity Bancorp, Inc. | 4 | Chicago, IL | July 2003 | 612,869 | 434,573 | |||||||||||||||
We may continue to consider selective acquisition opportunities to strengthen our market share in the greater Chicago and Milwaukee metropolitan areas or to pursue strategic growth opportunities in other attractive markets.
As we have grown, we have successfully transitioned our business from a traditional savings and loan engaged primarily in one- to four-family residential mortgage lending to a more diversified community bank, servicing both consumer and business customers, while retaining our emphasis on relationship-driven, responsive customer service. We offer a wide variety of checking, savings and other deposit accounts as well as investment services and securities brokerage, general insurance services and other financial services targeted to individuals, families and small- to medium-sized businesses in our primary market areas. All of our locations are full-service branches, many of which offer customers the convenience of drive-up facilities.
We launched our Business Banking unit in 2001 and have steadily grown commercial deposits and business banking loans over the past six years. We have also emphasized home equity lending in recent years as part of our strategy to diversify our loan portfolio with higher-yielding loan categories. We continue to originate, and to a lesser extent purchase, residential one- to four-family mortgage loans primarily in our market areas through our residential loan origination platform. While we expect to keep more of our adjustable rate mortgage originations in our portfolio, we have migrated to more of an originate-and-sell model in our mortgage business. The acquisitions of Fidelity, St. Francis and EFC Bancorp contributed significantly to the change in our asset mix, increasing our multi-family mortgages, home equity loans, commercial real estate and business loans and reducing the concentration of one- to four-family mortgage loans in our total loan portfolio. At December 31, 2006, 54% of total loans were comprised of one- to four-family mortgages compared to 79% at December 31, 2002.
For segment information regarding the Company’s two lines of business (banking and land development), see “Note 18. Segment Information” to the audited consolidated financial statements of the Company included in “Item 8. Financial Statements and Supplementary Data.”
Lending Activities
Loan Portfolio Composition . The following table sets forth the composition of the Bank’s loan portfolio by loan type at the dates indicated. The table reflects the change in the loan portfolio mix over the last four years resulting from increased emphasis on equity lines of credit, the successful growth of our Business Banking unit and the impact from acquisitions.
At December 31, 2006 2005 2004 2003 2002 Amount Percent
of Total Amount Percent
of Total Amount Percent
of Total Amount Percent
of Total Amount Percent
of Total (Dollars in thousands) One- to four-family $ 4,012,468 53 .87% $ 4,256,913 59.03 % $ 4,036,826 58 .69% $ 3,899,222 61.33 % $ 3,463,298 79 .02% Equity lines of credit and home equity loans 1,301,665 17 .47 1,346,750 18.67 1,336,090 19 .42 965,571 15.18 419,145 9 .56 Multi-family 801,866 10 .77 698,659 9.69 646,269 9 .40 622,207 9.78 258,464 5 .90 Commercial real estate 628,957 8 .44 492,307 6.83 476,796 6 .93 521,438 8.20 142,493 3 .25 Construction 194,254 2 .61 109,691 1.52 134,759 1 .96 110,860 1.74 33,418 0 .76 Land 304,685 4 .09 171,580 2.38 92,779 1 .35 73,365 1.15 40,011 0 .92 Commercial business loans 198,853 2 .67 129,771 1.80 147,345 2 .14 128,251 2.02 20,705 0 .47 Consumer 5,843 0 .08 5,566 0.08 7,650 0 .11 38,237 0.60 5,101 0 .12 $ 7,448,591 100 .00% $ 7,211,237 100.00 % $ 6,878,514 100 .00% $ 6,359,151 100.00 % $ 4,382,635 100 .00%
The following table shows the breakdown of fixed-rate and adjustable-rate loans in our portfolio for loan categories other than our residential lending categories as of the dates indicated:
At December 31, 2006 2005 2004 Amount Percent Amount Percent Amount Percent (Dollars in thousands) Multi-family: Adjustable-rate $ 656,385 81 .9% $ 604,235 86 .5% $ 571,524 88 .4% Fixed-rate 145,481 18 .1 94,424 13 .5 74,745 11 .6 Total multi-family $ 801,866 100 .0% $ 698,659 100 .0% $ 646,269 100 .0% Commercial real estate: Adjustable-rate 300,021 47 .7% $ 305,761 62 .1% $ 353,612 74 .2% Fixed-rate 328,936 52 .3 186,546 37 .9 123,184 25 .8 Total commercial real estate $ 628,957 100 .0% $ 492,307 100 .0% $ 476,796 100 .0% Construction and Land:
