MB Financial, Inc. Reports Third Quarter Net Income and Strong Balance Sheet, Capital, and Liquidity Position

MB Financial, Inc. (NASDAQ: MBFI), the holding company for MB Financial Bank, N.A., announced today third quarter results for 2008. The words "MB Financial,” "the Company,” "we,” "our” and "us” refer to MB Financial, Inc. and its wholly owned subsidiaries, unless indicated otherwise. We had net income from continuing operations of $13.2 million for the third quarter of 2008 compared to $17.3 million for the third quarter of 2007, and $22.0 million for the second quarter of 2008. Fully diluted earnings per share from continuing operations for the third quarter of 2008 were $0.38 per share as compared to $0.48 per share for the third quarter of 2007, and $0.63 per share for the second quarter of 2008. During the third quarter of 2008, income was positively impacted by a $1.5 million adjustment, or $0.04 per diluted share, related to a reduction of state tax contingency reserves. During the second quarter of 2008, income was positively impacted by a $7.3 million adjustment, or $0.21 per diluted share, related to the removal of valuation allowances on certain state tax net operating loss carryforwards and an adjustment of state tax contingency reserves.

Key items for the quarter were as follows:

Strong Balance Sheet and Liquidity Position

• Strong commercial loan growth continued in the third quarter. Commercial related loans increased by 15% from the end of the third quarter of 2007 to the end of the third quarter of 2008, and 6% annualized on a linked quarter basis driven by strong commercial and commercial real estate loan growth, while our construction real estate loan balance continues to decline. Furthermore, we continue to see significantly better credit spreads on new and renewed loans.
• Our liquidity position substantially improved during the third quarter, primarily due to an increase in customer deposits of $233.5 million, or 20% on an annualized basis, and a reduction in short-term borrowings of $379.1 million. In addition, we lengthened the maturities on both customer and brokered certificates of deposits.
• Our non-interest bearing deposits grew by 11% from the end of the third quarter of 2007 to the end of the third quarter of 2008, and 16% annualized on a linked quarter basis. Total core funding grew by 5% compared to the third quarter of 2007 and 14% annualized on a linked quarter basis.
• We have maintained our disciplined investment management philosophy. We have not incurred impairment losses on any investment securities during 2008 and have avoided the types of problem securities that have caused many financial institutions to incur large losses. Net unrealized gains in the portfolio were $5.5 million as of September 30, 2008.

Positive Operating Leverage

• Net interest income on a tax equivalent basis increased by $3.1 million, or 5.6% from the third quarter of 2007, and increased by $646 thousand, or 4.4% annualized on a linked quarter basis.
• Fee income growth continues to be good. Core fee income increased by $3.5 million or 15% compared to the third quarter of 2007. This increase was driven by robust growth in trust and asset management fees, resulting from our acquisition of Cedar Hill Associates, LLC (Cedar Hill) during the second quarter of 2008, and strong deposit service and loan fees.

Credit Quality

• During the third quarter we experienced a $23.6 million increase in non-performing loans while the overall level of potential problem loans did not change significantly (See "Asset Quality” section below for additional information).
• We increased the allowance for loan losses to total loans to 1.46% as of September 30, 2008 from 1.38% as of June 30, 2008.
• Our provision for loan losses was $18.4 million for the third quarter, while our net charge-offs were $12.1 million.

Strong Capital Position

• Our quarterly dividend of $0.18 per share was approved last week and remained consistent with prior quarters.
• MB Financial Bank, N.A., continues to significantly exceed the "Well-Capitalized” threshold established under the regulations of the Office of the Comptroller of the Currency. At September 30, 2008, MB Financial, Inc.’s total risk-based capital ratio was 11.65%, Tier 1 capital to risk-weighted assets ratio was 9.64% and Tier 1 capital to average asset ratio was 8.00%.
• Our tangible equity to assets ratio increased to 6.10% at September 30, 2008, compared to 5.95% at June 30, 2008.

RESULTS OF OPERATIONS

Third Quarter Results

Net Interest Income

Net interest income on a tax equivalent basis increased by $3.1 million, or 5.6% from the third quarter of 2007, and increased by $646 thousand, or 4.4% annualized on a linked quarter basis. An increase in average interest earning assets from the second quarter of 2008 to the third quarter of 2008 was offset by a seven basis point decrease in the net interest margin, which was primarily due to the steps we took to improve our liquidity position, including increased customer and brokered deposits, lengthening the terms of our brokered deposits, and reducing lower cost short-term borrowings.

See the supplemental net interest margin table for further detail.

Other Income (in thousands):

		Three Months Ended
		September 30,				June 30,			March 31,				December 31,				September 30,
		2008				2008			2008				2007				2007
Core other income:
	Loan service fees	$	2,385			$	2,475		$	2,470			$	2,080			$	1,253
	Deposit service fees		7,330				6,889			6,530				6,635				6,501
	Lease financing, net		4,533				3,969			3,867				4,155				3,952
	Brokerage fees		1,177				1,187			985				1,399				2,067
	Trust and asset management fees		3,276				3,589			2,220				2,101				2,490
	Increase in cash surrender value of life insurance		1,995				1,128			1,606				1,225				1,288
	Merchant card processing		4,541				4,644			4,530				4,293				4,131
	Other operating income		1,557				1,580			1,605				1,282				1,507
Total core other income			26,794				25,461			23,813				23,170				23,189
Non-core other income (1):
	Gain on sale of third party brokerage business (A)		-				-			-				447				-
	Gain on sale of artwork (C)		-				-			-				733				-
	Net gain (loss) on sale of other assets (C)		26				50			(306	)			(10	)			293
	Net gain (loss) on sale of investment securities		-				1			1,105				(1,529	)			(114	)
	Increase (decrease) in market value of assets held in trust for deferred compensation (B)		(395	)			55			(75	)			170				(109	)
Total non-core other income			(369	)			106			724				(189	)			70
Total other income		$	26,425			$	25,567		$	24,537			$	22,981			$	23,259

(1)		Letters denote the corresponding line items where these non-core other income items reside in the consolidated statements of income as follows: A – Brokerage fees, B – Other Operating Income, and C – Net gain (loss) on sale of other assets.

Core other income has grown steadily over the past year. Core other income increased by 15% compared to the third quarter of 2007. Loan service fees increased from the third quarter of 2007 to the third quarter of 2008, primarily due to an increase in letter of credit fees, prepayment fees and swap fees recognized during the third quarter of 2008 compared to the third quarter of 2007. Deposit service fees increased from the third quarter of 2007 to the third quarter of 2008, primarily due to an increase in commercial deposit and treasury management fees as a result of a lower earnings credit rate. Trust and asset management fees increased primarily due to our Cedar Hill acquisition during the second quarter of 2008. The decrease in core brokerage fee income from the third quarter of 2007 to the third quarter of 2008 was due to the sale of our third party brokerage business during the second quarter of 2007, and conversion of customer accounts to the purchaser’s platform in third quarter. This decrease was offset by a corresponding reduction in brokerage expense.

Core other income increased 19% on an annualized basis from the second quarter of 2008. Deposit service fees increased from the second quarter of 2008 to the third quarter of 2008, primarily due to an increase in overdraft fees. Net lease financing increased primarily due to due to higher levels of income realized on leased equipment in which we own a residual interest during the third quarter of 2008. The increase in cash surrender value of life insurance was primarily due to a $938 thousand death benefit on a bank owned life insurance policy that we recognized during the third quarter of 2008.

Other Expense (in thousands):

		Three Months Ended
		September 30,				June 30,			March 31,				December 31,			September 30,
		2008				2008			2008				2007			2007
Core other expense:
	Salaries and employee benefits	$	29,700			$	29,052		$	26,859			$	26,571		$	27,273
	Occupancy and equipment expense		7,120				6,967			7,525				7,239			6,928
	Computer services expense		1,840				1,843			1,737				1,739			1,615
	Advertising and marketing expense		1,487				1,504			1,316				962			1,214
	Professional and legal expense		884				803			306				862			593
	Brokerage fee expense		564				470			419				620			1,152
	Telecommunication expense		621				774			762				757			681
	Other intangibles amortization expense		913				913			815				871			874
	Merchant card processing		4,175				4,256			4,105				4,025			3,718
	Other operating expenses		5,257				5,489			4,797				5,156			4,888
Total core other expense			52,561				52,071			48,641				48,802			48,936
Non-core other expense (1):
	Executive separation agreement expense (E)		-				-			-				5,908			-
	Contribution to MB Financial Charitable Foundation (F)		-				-			-				1,500			-
	Unamortized issuance costs related to redemption of trust preferred securities (G)		-				-			-				1,914			-
	Rent expense (H)		-				-			-				494			-
	Visa litigation expense (F)		-				-			(342	)			342			-
	Increase in market value of assets held in trust for deferred compensation (E)		(395	)			55			(75	)			170			(109	)
Total non-core other expense			(395	)			55			(417	)			10,328			(109	)
Total other expense		$	52,166			$	52,126		$	48,224			$	59,130		$	48,827

(1)		Letters denote the corresponding line items where the non-core other expense items reside in the consolidated statements of income as follows: E – Salaries and employee benefits, F – Other Operating Expenses, G – Professional and legal expense and H –Occupancy and equipment expense.

Other expenses increased approximately $3.6 million from the third quarter of 2007 to the third quarter of 2008. This increase is primarily a result of the Cedar Hill acquisition and the impact of hiring 32 bankers from the end of the third quarter of 2007 through the second quarter of 2008. Salaries and employee benefits related to the new bankers totaled approximately $1.3 million during the third quarter of 2008. The acquisition of Cedar Hill increased total core other expense by $1.1 million per quarter beginning in the second quarter of 2008. As noted earlier, the decrease in our core business brokerage fee expense from the third quarter of 2007 to the third quarter of 2008 was primarily due to the sale of our third party brokerage business during the second quarter of 2007. Excluding these items, core other income increased by 3.7% compared to the third quarter of 2007.

Core other expense increased approximately 4% on an annualized basis from the quarter ended June 30, 2008. Salaries and employee benefits increased from the second quarter of 2008 to the third quarter of 2008, primarily due to one additional day during the third quarter compared to the second quarter and annual hourly employee pay increases during the third quarter.

Income Taxes

Income tax benefit from continuing operations for the three months ended September 30, 2008, decreased $4.0 million to $689 thousand compared to $4.7 million for the three months ended June 30, 2008. The tax benefit in the third quarter was related to a $1.5 million adjustment, related to a reduction of state tax contingency reserves. The tax benefit in the second quarter was related a $7.3 million adjustment, due to the removal of valuation allowances on state net operating loss carryforwards and an adjustment of state tax contingency reserves. Not including these adjustments and a $300 thousand adjustment to our tax contingency reserves in the first quarter of 2008, our effective tax rate was 13.9% for the nine months ended September 30, 2008. Our effective tax rate may be in the range of 10% to 15% for the remainder of 2008 depending on pre-tax income, and we expect our effective tax rate to increase in 2009.

LOAN PORTFOLIO

The following table sets forth the composition of the loan portfolio as of the dates indicated (dollars in thousands):

		September 30,						June 30,						March 31,						December 31,						September 30,
		2008						2008						2008						2007						2007
					% of						% of						% of						% of						% of
		Amount			Total			Amount			Total			Amount			Total			Amount			Total			Amount			Total
Commercial related credits:
	Commercial loans	$	1,510,620		25	%		$	1,450,822		24	%		$	1,433,114		25	%		$	1,323,455		24	%		$	1,261,995		23	%
	Commercial loans collateralized by assignment of lease payments (lease loans)		609,101		10	%			596,148		10	%			581,502		10	%			553,138		10	%			453,340		8	%
	Commercial real estate		2,316,657		38	%			2,234,848		37	%			2,048,123		35	%			1,994,312		36	%			1,915,845		36	%
	Construction real estate		715,220		12	%			795,506		14	%			822,312		14	%			825,216		14	%			849,914		16	%
Total commercial related credits			5,151,598		85	%			5,077,324		85	%			4,885,051		84	%			4,696,121		84	%			4,481,094		83	%
Other loans:
	Residential real estate		317,534		5	%			328,469		5	%			379,279		7	%			372,787		6	%			362,963		7	%
	Indirect motorcycle		155,045		2	%			144,684		2	%			118,912		2	%			101,883		2	%			97,677		2	%
	Indirect automobile		38,844		1	%			40,399		1	%			43,436		1	%			44,428		1	%			45,150		1	%
	Home equity		366,088		6	%			356,314		6	%			347,752		5	%			347,676		6	%			344,116		6	%
	Consumer loans		66,938		1	%			53,792		1	%			54,671		1	%			52,732		1	%			51,532		1	%
Total other loans			944,449		15	%			923,658		15	%			944,050		16	%			919,506		16	%			901,438		17	%
Gross loans			6,096,047		100	%			6,000,982		100	%			5,829,101		100	%			5,615,627		100	%			5,382,532		100	%
	Allowance for loan losses		(88,863	)					(82,544	)					(78,764	)					(65,103	)					(61,122	)
Net loans		$	6,007,184					$	5,918,438					$	5,750,337					$	5,550,524					$	5,321,410

Commercial related credits increased by 6% on an annualized basis from June 30, 2008 to September 30, 2008 and by 15% from September 30, 2007. Total loans grew by 6% on an annualized basis from the second quarter of 2008 to the third quarter of 2008, and 13% from September 30, 2007. As of September 30, 2008 and June 30, 2008, there were $449.6 million and $529.1 million, respectively, of residential construction loans in our construction real estate portfolio. The remainder of construction real estate loans consisted of commercial construction loans.

ASSET QUALITY

The following table presents a summary of total performing loans greater than 30 days and less than 90 days past due as of the dates indicated (dollars in thousands):

		September 30,			June 30,			March 31,			December 31,			September 30,
		2008			2008			2008			2007			2007
30 - 59 Days Past Due		$	22,583		$	21,117		$	17,330		$	18,619		$	9,266
60 - 89 Days Past Due			14,043			7,188			11,318			6,351			4,078
		$	36,626		$	28,305		$	28,648		$	24,970		$	13,344

As of September 30, 2008, approximately $8.3 million of the performing loans past due are included as potential problem loans.

The following table presents a summary of non-performing assets as of the dates indicated (dollar amounts in thousands):

		September 30,				June 30,				March 31,				December 31,				September 30,
		2008				2008				2008				2007				2007
Non-performing loans:
	Non-accrual loans (1)	$	115,716			$	91,972			$	46,666			$	24,459			$	23,901
	Loans 90 days or more past due, still accruing interest		1,490				1,627				4,218				-				-
Total non-performing loans			117,206				93,599				50,884				24,459				23,901
Other real estate owned			3,821				1,499				1,770				1,120				566
Repossessed vehicles			108				81				225				179				288
Total non-performing assets		$	121,135			$	95,179			$	52,879			$	25,758			$	24,755
Total non-performing loans to total loans			1.92	%			1.56	%			0.87	%			0.44	%			0.44	%
Total non-performing assets to total assets			1.45	%			1.13	%			0.65	%			0.33	%			0.31	%
Allowance for loan losses to non-performing loans			75.82	%			88.19	%			154.79	%			266.17	%			255.73	%
(1) There were no restructured loans in any period presented.

Although management believes that adequate specific and general loan loss allowances have been established, actual losses are dependent upon future events and, as such, further additions to the level of specific and general loan loss allowances may become necessary.

The following table presents data related to non-performing loans by Dollar amount and category at September 30, 2008 (dollar amounts in thousands):

		Commercial and Lease Loans						Construction Real Estate Loans						Commercial Real Estate Loans						Consumer Loans				Total Loans
Dollar Range		Number of Borrowers		Amount				Number of Borrowers		Amount				Number of Borrowers		Amount				Amount				Amount
$5.0 million or more		-		$	-			6		$	55,598			-		$	-			$	-			$	55,598
$3.0 million to $4.9 million		-			-			2			6,901			2			6,982				-				13,883
$1.5 million to $2.9 million		-			-			3			7,446			4			8,352				-				15,798
Under $1.5 million		22			7,491			4			2,256			31			16,022				6,158				31,927
		22		$	7,491			15		$	72,201			37		$	31,356			$	6,158			$	117,206
Percentage of individual loan category					0.35	%					10.09	%					1.35	%			0.65	%			1.92	%

The aggregate principal amount of non-performing loans was $117.2 million as of September 30, 2008, compared to $93.6 million as of June 30, 2008. Approximately $40 million in loans migrated to non-performing status during the third quarter. Of this amount, approximately $17 million were classified as potential problem loans as of June 30, 2008. The remainder of the loans migrating to non-performing status consisted primarily of one large construction loan and two commercial real estate loans that deteriorated during the third quarter. Additions to non-performing loans were partially offset by paydowns, charge-offs and up-grades of approximately $10 million, $4 million, and $3 million, respectively, during the third quarter.

We define potential problem loans as performing loans rated substandard or doubtful, that do not meet the definition of a non-performing loan (See "Asset Quality” section above for non-performing loans). We do not necessarily expect to realize losses on potential problem loans, but we recognize potential problem loans carry a higher probability of default and require additional attention by management. The aggregate principal amount of potential problem loans was $73.8 million, or 1.21% of total loans as of September 30, 2008, compared to $75.2 million, or 1.25% of total loans as of June 30, 2008. There were approximately $37 million in new potential problem loans in the third quarter, which were offset primarily by approximately $17 million in loans that migrated from potential problem to non-performing status during the quarter, approximately $15 million in paydowns during the quarter, and $6 million in charge-offs primarily relating to one large commercial loan.

The following table presents data related to potential problem loans by dollar amount and category at September 30, 2008 (dollar amounts in thousands):

	Commercial and						Construction Real						Commercial Real
	Lease Loans						Estate Loans						Estate Loans						Total
	Number of						Number of						Number of						Number of
Dollar Range	Borrowers		Amount				Borrowers		Amount				Borrowers		Amount				Borrowers		Amount
$5.0 million or more	2		$	21,965			2		$	18,378			-		$	-			4		$	40,343
$3.0 million to $4.9 million	2			7,799			1			3,257			-			-			3			11,056
$1.5 million to $2.9 million	1			1,623			-			-			3			7,234			4			8,857
Under $1.5 million	11			3,762			4			4,163			10			5,571			25			13,496
	16		$	35,149			7		$	25,798			13		$	12,805			36		$	73,752
Percentage of individual loan category				1.66	%					3.61	%					0.55	%					1.21	%

Below is a reconciliation of the activity in our allowance for loan losses for the periods indicated (dollar amounts in thousands):

				Three Months Ended
				September 30,		June 30,		March 31,		December 31,		September 30,
				2008		2008		2008		2007		2007
Balance at the beginning of period				$ 82,544		$ 78,764		$ 65,103		$ 61,122		$ 59,058
Provision for loan losses				18,400		12,200		22,540		8,000		4,500
Charge-offs:
	Commercial loans			(6,231)		(1,342)		(4,166)		(136)		(2,409)
	Commercial loans collateralized by assignment of lease payments (lease loans)			(482)		(154)		(182)		(108)		-
	Commercial real estate loans			(2,292)		(1,854)		(3,650)		(1,239)		(489)
	Construction real estate			(2,110)		(4,551)		(1,135)		(2,293)		-
	Residential real estate			(315)		(92)		(26)		(11)		(186)
	Indirect vehicle			(499)		(366)		(629)		(450)		(152)
	Home equity			(628)		(488)		(182)		(93)		(26)
	Consumer loans			(167)		(144)		(115)		(182)		(133)
		Total charge-offs		(12,724)		(8,991)		(10,085)		(4,512)		(3,395)
Recoveries:
	Commercial loans			132		214		191		289		648
	Commercial loans collateralized by assignment of lease payments (lease loans)			-		-		-		17		18
	Commercial real estate loans			257		6		3		20		7
	Construction real estate			40		161		750		-		-
	Residential real estate			1		5		6		4		5
	Indirect vehicle			152		163		194		109		156
	Home equity			48		15		52		41		120
	Consumer loans			13		7		10		13		5
		Total recoveries		643		571		1,206		493		959
Net charge-offs				(12,081)		(8,420)		(8,879)		(4,019)		(2,436)
Balance				$ 88,863		$ 82,544		$ 78,764		$ 65,103		$ 61,122
Total loans				$ 6,096,047		$ 6,000,982		$ 5,829,101		$ 5,615,627		$ 5,382,532
Average loans				$ 6,026,179		$ 5,927,236		$ 5,687,646		$ 5,459,430		$ 5,275,376
Ratio of allowance for loan losses to total loans				1.46%		1.38%		1.35%		1.16%		1.14%
Net loan charge-offs to average loans (annualized)				0.80%		0.57%		0.63%		0.29%		0.18%

The following is a summary of charge-offs and non-performing loans for the prior twenty-three quarters (in thousands):

	Net Charge- Offs		Annualized Net Charge-Offs to Average Loans		End of Period Non- Performing Loans		Non- Performing Loans to Total Loans		Potential Problem Loans to Total Loans		Total Non- Performing Loans and Potential Problem Loans to Total Loans
2003 - 1st Qtr	$ 1,219		0.20%		$ 22,384		0.86%		1.56%		2.42%
2003 - 2nd Qtr	2,872		0.44%		$ 21,503		0.84%		1.15%		1.99%
2003 - 3rd Qtr	4,538		0.69%		$ 25,519		0.98%		1.04%		2.02%
2003 - 4th Qtr	1,524		0.23%		$ 21,073		0.79%		0.89%		1.68%
2003 - Full Year	$ 10,153		0.39%
2004 - 1st Qtr	$ 1,317		0.20%		$ 25,922		0.96%		1.45%		2.40%
2004 - 2nd Qtr	1,962		0.28%		$ 28,789		0.95%		1.34%		2.29%
2004 - 3rd Qtr	1,632		0.21%		$ 25,228		0.84%		1.45%		2.28%
2004 - 4th Qtr	2,416		0.31%		$ 22,571		0.71%		1.28%		1.99%
2004 - Full Year	$ 7,327		0.25%
2005 - 1st Qtr	$ 2,890		0.36%		$ 25,623		0.79%		0.81%		1.60%
2005 - 2nd Qtr	2,074		0.25%		$ 22,883		0.67%		0.59%		1.26%
2005 - 3rd Qtr	1,805		0.21%		$ 18,212		0.53%		0.67%		1.20%
2005 - 4th Qtr	1,346		0.16%		$ 20,171		0.58%		0.61%		1.19%
2005 - Full Year	$ 8,115		0.24%
2006 - 1st Qtr	$ 1,035		0.12%		$ 19,685		0.55%		0.66%		1.21%
2006 - 2nd Qtr	866		0.10%		$ 15,887		0.43%		0.88%		1.31%
2006 - 3rd Qtr	4,975		0.46%		$ 19,912		0.41%		0.45%		0.86%
2006 - 4th Qtr	2,956		0.24%		$ 21,468		0.43%		0.48%		0.91%
2006 - Full Year	$ 9,832		0.24%
2007 - 1st Qtr	$ 4,091		0.33%		$ 23,222		0.46%		0.63%		1.09%
2007 - 2nd Qtr	2,647		0.21%		$ 21,799		0.42%		0.41%		0.83%
2007 - 3rd Qtr	2,436		0.18%		$ 23,901		0.44%		0.85%		1.29%
2007 - 4th Qtr	4,019		0.29%		$ 24,459		0.44%		1.56%		2.00%
2007 - Full Year	$ 13,193		0.25%
2008 - 1st Qtr	$ 8,879		0.63%		$ 50,884		0.87%		2.11%		2.98%
2008 - 2nd Qtr	8,420		0.57%		$ 93,599		1.56%		1.25%		2.81%
2008 - 3rd Qtr	12,081		0.80%		$ 117,206		1.92%		1.21%		3.13%

INVESTMENT SECURITIES AVAILABLE FOR SALE

The following table sets forth the fair value, amortized cost, and total unrealized gain (loss) of our investment securities available for sale, by type (in thousands):

		At September 30,				At June 30,				At March 31,			At December 31,			At September 30,
		2008				2008				2008			2007			2007
Fair Value
U.S. Treasury securities		$	-			$	-			$	-		$	-		$	-
Government sponsored agencies and enterprises			209,350				269,947				274,217			310,538			328,040
States and political subdivisions			430,120				431,882				417,609			412,302			397,807
Mortgage-backed securities			569,947				608,737				479,383			438,056			487,747
Corporate bonds			6,990				8,000				11,123			13,057			22,006
Equity securities			3,524				3,480				3,520			3,460			9,892
Debt securities issued by foreign governments			298				295				301			301			298
	Total fair value	$	1,220,229			$	1,322,341			$	1,186,153		$	1,177,714		$	1,245,790
Amortized cost
U.S. Treasury securities		$	-			$	-			$	-		$	-		$	-
Government sponsored agencies and enterprises			206,429				266,418				266,276			305,768			326,504
States and political subdivisions			428,610				432,780				408,969			407,973			396,896
Mortgage-backed securities			568,054				606,150				472,482			435,743			489,219
Corporate bonds			7,764				7,765				10,779			12,797			22,120
Equity securities			3,557				3,520				3,484			3,446			9,950
Debt securities issued by foreign governments			301				301				301			299			298
	Total amortized cost	$	1,214,715			$	1,316,934			$	1,162,291		$	1,166,026		$	1,244,987
Unrealized gain (loss)
U.S. Treasury securities		$	-			$	-			$	-		$	-		$	-
Government sponsored agencies and enterprises			2,921				3,529				7,941			4,770			1,536
States and political subdivisions			1,510				(898	)			8,640			4,329			911
Mortgage-backed securities			1,893				2,587				6,901			2,313			(1,472	)
Corporate bonds			(774	)			235				344			260			(114	)
Equity securities			(33	)			(40	)			36			14			(58	)
Debt securities issued by foreign governments			(3	)			(6	)			-			2			-
	Total unrealized gain (loss)	$	5,514			$	5,407			$	23,862		$	11,688		$	803

We do not have any meaningful direct or indirect holdings of subprime residential mortgage loans, home equity lines of credit, or any Fannie Mae or Freddie Mac preferred or common equity securities in our investment portfolio. Additionally, more than 99% of our mortgage-backed securities are agency guaranteed.

FUNDING MIX AND LIQUIDITY

The following table shows the composition of our core and wholesale funding resources as of the dates indicated (dollars in thousands):

				September 30,						June 30,						March 31,						December 31,						September 30,
				2008						2008						2008						2007						2007
							% of						% of						% of						% of						% of
				Amount			Total			Amount			Total			Amount			Total			Amount			Total			Amount			Total
Core funding:
	Non-interest bearing deposits			$	935,153		13	%		$	898,954		12	%		$	865,665		12	%		$	875,491		13	%		$	846,699		13	%
	Money market and NOW accounts				1,326,474		18	%			1,257,852		17	%			1,220,152		17	%			1,263,021		18	%			1,336,162		20	%
	Savings accounts				375,567		5	%			390,145		5	%			389,944		5	%			390,980		6	%			407,608		6	%
	Certificates of deposit				2,523,198		34	%			2,379,894		32	%			2,324,157		33	%			2,193,793		32	%			2,236,197		33	%
	Customer repurchase agreements				260,087		3	%			312,170		4	%			328,976		5	%			367,702		5	%			341,893		5	%
Total core funding					5,420,479		73	%			5,239,015		70	%			5,128,894		72	%			5,090,987		74	%			5,168,559		77	%
Wholesale funding:
	Public funds deposits				211,250		3	%			252,693		3	%			264,972		5	%			312,032		5	%			314,826		5	%
	Brokered deposit accounts				997,767		13	%			858,135		12	%			616,197		9	%			478,466		7	%			408,796		6	%
	Other short-term borrowings				125,000		2	%			452,002		6	%			594,009		7	%			610,019		9	%			468,042		6	%
	Long-term borrowings				429,548		6	%			433,625		6	%			304,010		4	%			158,865		2	%			162,577		3	%
	Subordinated debt				50,000		1	%			50,000		1	%			50,000		1	%			50,000		1	%			25,000		0	%
	Junior subordinated notes issued to capital trusts				158,872		2	%			158,920		2	%			158,968		2	%			159,016		2	%			197,537		3	%
Total wholesale funding					1,972,437		27	%			2,205,375		30	%			1,988,156		28	%			1,768,398		26	%			1,576,778		23	%
		Total funding		$	7,392,916		100	%		$	7,444,390		100	%		$	7,117,050		100	%		$	6,859,385		100	%		$	6,745,337		100	%

Our liquidity position substantially improved during the third quarter compared to the second quarter, primarily due to an increase in customer deposits (non-interest bearing deposits, money market and NOW accounts, savings accounts, and certificates of deposit) of $233.5 million, and a reduction in short-term borrowings of $379.1 million. In addition, we lengthened the maturities of both customer and brokered certificates of deposits.

FORWARD-LOOKING STATEMENTS

When used in this press release and in filings with the Securities and Exchange Commission, in other press releases or other public shareholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases "believe," "will," "should," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "plans," or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date made. These statements may relate to our future financial performance, strategic plans or objectives, revenues or earnings projections, or other financial items. By their nature, these statements are subject to numerous uncertainties that could cause actual results to differ materially from those anticipated in the statements.

Important factors that could cause actual results to differ materially from the results anticipated or projected include, but are not limited to, the following (1) expected cost savings and synergies from our merger and acquisition activities, including our recently completed acquisition of Cedar Hill Associates, might not be realized within the expected time frames; (2) the credit risks of lending activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses; (3) competitive pressures among depository institutions; (4) interest rate movements and their impact on customer behavior and net interest margin; (5) the impact of repricing and competitors' pricing initiatives on loan and deposit products; (6) fluctuations in real estate values; (7) the ability to adapt successfully to technological changes to meet customers' needs and developments in the market place; (8) our ability to realize the residual values of our direct finance, leveraged, and operating leases; (9) our ability to access cost-effective funding; (10) changes in financial markets; (11) changes in economic conditions in general and in the Chicago metropolitan area in particular; (12) the costs, effects and outcomes of litigation; (13) new legislation or regulatory changes, including but not limited to changes in federal and/or state tax laws or interpretations thereof by taxing authorities and other governmental initiatives affecting the financial services industry; (14) changes in accounting principles, policies or guidelines; (15) our future acquisitions of other depository institutions or lines of business.

We do not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date on which the forward-looking statement is made.

TABLES TO FOLLOW

MB FINANCIAL, INC. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, 2008, June 30, 2008, March 31, 2008,
December 31, 2007, and September 30, 2007
(Amounts in thousands, except common share data)
(Unaudited)
			September 30,		June 30,		March 31,		December 31,		September 30,
			2008		2008		2008		2007		2007
ASSETS
Cash and due from banks			$ 118,191		$ 164,996		$ 187,116		$ 141,248		$ 119,961
Interest bearing deposits with banks			6,043		6,487		16,054		9,093		7,582
Investment securities:
	Securities available for sale, at fair value		1,220,229		1,322,341		1,186,153		1,177,714		1,245,790
	Non-marketable securities - FHLB and FRB Stock		63,913		63,913		63,671		63,671		63,634
		Total investment securities	1,284,142		1,386,254		1,249,824		1,241,385		1,309,424
Loans (net of allowance for loan losses of $88,863 at
	September 30, 2008, $82,544 at June 30, 2008, $78,764 at
	March 31, 2008, $65,103 at December 31, 2007, and $61,122
	at September 30, 2007)		6,007,184		5,918,438		5,750,337		5,550,524		5,321,410
Assets held for sale			-		-		-		-		353,028
Lease investments, net			117,474		113,101		91,675		97,321		90,670
Premises and equipment, net			185,556		185,411		184,257		183,722		183,506
Cash surrender value of life insurance			120,481		119,423		118,296		116,690		117,900
Goodwill, net			387,069		387,069		379,047		379,047		379,047
Other intangibles, net			26,689		27,602		24,537		25,352		26,223
Other assets			105,780		97,811		89,213		90,321		91,745
		Total assets	$ 8,358,609		$ 8,406,592		$ 8,090,356		$ 7,834,703		$ 8,000,496
LIABILITIES, MINORITY INTEREST AND
STOCKHOLDERS' EQUITY
Liabilities
Deposits:
	Noninterest bearing		$ 935,153		$ 898,954		$ 865,665		$ 875,491		$ 846,699
	Interest bearing		5,434,256		5,138,719		4,814,621		4,638,292		4,703,589
		Total deposits	6,369,409		6,037,673		5,680,286		5,513,783		5,550,288
Short-term borrowings			385,087		764,172		922,985		977,721		809,935
Long-term borrowings			479,548		483,625		354,010		208,865		187,577
Junior subordinated notes issued to capital trusts			158,872		158,920		158,968		159,016		197,537
Liabilities held for sale			-		-		-		-		321,144
Accrued expenses and other liabilities			76,172		81,321		102,060		112,949		79,112
		Total liabilities	7,469,088		7,525,711		7,218,309		6,972,334		7,145,593
Minority interest			2,595		2,564		-		-		-
Stockholder's Equity
Common stock, ($0.01 par value; authorized 43,000,000
	shares at September 30, 2008, June 30, 2008, March 31, 2008,
	December 31, 2007, and September 30, 2007; issued 37,539,615,
	37,525,940, 37,414,091, 37,401,023 and 37,404,087
	shares at September 30, 2008, June 30, 2008, March 31, 2008,
	December 31, 2007, and September 30, 2007, respectively)		375		375		374		374		374
Additional paid-in capital			443,380		441,914		441,405		441,201		440,655
Retained earnings			527,453		520,595		504,861		505,260		475,208
Accumulated other comprehensive income (loss)			3,584		3,515		15,511		7,597		120
Less: 2,674,240, 2,676,592, 2,734,281, 2,785,573, and 1,809,035
	shares of Treasury stock at cost, at September 30, 2008,
	June 30, 2008, March 31, 2008, December 31, 2007 and
	September 30, 2007, respectively		(87,866)		(88,082)		(90,104)		(92,063)		(61,454)
		Total stockholders' equity	886,926		878,317		872,047		862,369		854,903
Total liabilities, minority interest and stockholders' equity			$ 8,358,609		$ 8,406,592		$ 8,090,356		$ 7,834,703		$ 8,000,496

MB FINANCIAL, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except common share data)
(Unaudited)
			Three months ended										Nine months ended
			September 30,		June 30,		March 31,		December 31,		September 30,		September 30,		September 30,
			2008		2008		2008		2007		2007		2008		2007
Interest income:
	Loans		$ 88,266		$ 87,458		$ 93,877		$ 100,802		$ 101,488		$ 269,601		$ 292,214
	Investment securities available for sale:
		Taxable	10,569		10,001		9,971		10,181		11,983		30,541		39,494
		Nontaxable	3,977		3,828		3,753		3,649		3,586		11,558		10,213
	Federal funds sold		165		14		95		95		52		274		354
	Other interest bearing accounts		84		89		106		102		63		279		162
		Total interest income	103,061		101,390		107,802		114,829		117,172		312,253		342,437
Interest expense:
	Deposits		37,216		34,309		40,849		45,917		47,942		112,374		139,732
	Short-term borrowings		2,966		5,351		7,867		9,729		9,617		16,184		27,625
	Long-term borrowings & junior subordinated notes		6,273		5,657		5,623		5,211		5,530		17,553		16,746
		Total interest expense	46,455		45,317		54,339		60,857		63,089		146,111		184,103
Net interest income			56,606		56,073		53,463		53,972		54,083		166,142		158,334
Provision for loan losses			18,400		12,200		22,540		8,000		4,500		53,140		11,313
Net interest income after provision for loan losses			38,206		43,873		30,923		45,972		49,583		113,002		147,021
Other income:
	Loan service fees		2,385		2,475		2,470		2,080		1,253		7,330		4,178
	Deposit service fees		7,330		6,889		6,530		6,635		6,501		20,749		17,283
	Lease financing, net		4,533		3,969		3,867		4,155		3,952		12,369		11,692
	Brokerage fees		1,177		1,187		985		1,846		2,067		3,349		7,735
	Trust & asset management fees		3,276		3,589		2,220		2,101		2,490		9,085		8,346
	Net (loss) gain on sale of investment securities		-		1		1,105		(1,529)		(114)		1,106		(2,215)
	Increase in cash surrender value of life insurance		1,995		1,128		1,606		1,225		1,288		4,729		3,778
	Net gain (loss) on sale of other assets		26		50		(306)		723		293		(230)		9,374
	Merchant card processing		4,541		4,644		4,530		4,293		4,131		13,715		12,054
	Other operating income		1,162		1,635		1,530		1,452		1,398		4,327		4,698
			26,425		25,567		24,537		22,981		23,259		76,529		76,923
Other expense:
	Salaries & employee benefits		29,305		29,107		26,784		32,649		27,164		85,196		78,620
	Occupancy & equipment expense		7,120		6,967		7,525		7,733		6,928		21,612		21,182
	Computer services expense		1,840		1,843		1,737		1,739		1,615		5,419		4,961
	Advertising & marketing expense		1,487		1,504		1,316		962		1,214		4,307		4,068
	Professional & legal expense		884		803		306		2,776		593		1,993		1,772
	Brokerage fee expense		564		470		419		620		1,152		1,453		4,182
	Telecommunica- tion expense		621		774		762		757		681		2,157		2,051
	Other intangible amortization expense		913		913		815		871		874		2,641		2,633
	Merchant card processing		4,175		4,256		4,105		4,025		3,718		12,537		10,790
	Charitable contributions		-		15		15		1,512		31		30		3,219
	Other operating expenses		5,257		5,474		4,440		5,486		4,857		15,171		14,228
			52,166		52,126		48,224		59,130		48,827		152,516		147,706
Income before income taxes			12,465		17,314		7,236		9,823		24,015		37,015		76,238
Income tax (benefit) expense			(689)		(4,693)		1,412		1,890		6,709		(3,970)		22,146
Income from continuing operations			13,154		22,007		5,824		7,933		17,306		40,985		54,092
Discounted operations
Income (loss) from discontinued operations before income taxes			-		-		-		(741)		1,499		-		4,731
Gain on disposal discontinued operations before income taxes			-		-		-		46,485		-		-		-
Income before income taxes			-		-		-		45,744		1,499		-		4,731
	Income taxes								17,281		500				1,356
Income from discontinued operations			-		-		-		28,463		999		-		3,375
		Net Income	$ 13,154		$ 22,007		$ 5,824		$ 36,396		$ 18,305		$ 40,985		$ 57,467
Common share data:
	Basic earnings per common share from continuing operations		$ 0.38		$ 0.63		$ 0.17		$ 0.23		$ 0.48		$ 1.18		$ 1.49
	Basic earnings per common share from discontinued operations		$ -		$ -		$ -		$ 0.81		$ 0.03		$ -		$ 0.09
	Basic earnings per common share		$ 0.38		$ 0.63		$ 0.17		$ 1.04		$ 0.51		$ 1.18		$ 1.59
	Diluted earnings per common share from continuing operations		$ 0.38		$ 0.63		$ 0.17		$ 0.22		$ 0.48		$ 1.17		$ 1.47
	Diluted earnings per common share from discontinued operations		$ -		$ -		$ -		$ 0.80		$ 0.03		$ -		$ 0.09
	Diluted earnings per common share		$ 0.38		$ 0.63		$ 0.17		$ 1.02		$ 0.51		$ 1.17		$ 1.56
	Weighted average common shares outstanding		34,732,633		34,692,571		34,620,435		35,095,301		35,733,165		34,682,065		36,197,787
	Diluted weighted average common shares outstanding		35,074,297		35,047,596		34,994,731		35,536,449		36,213,532		35,060,745		36,731,126

		Three months ended										Nine months ended
		September 30,		June 30,		March 31,		December 31,		September 30,		September 30,		September 30,
		2008		2008		2008		2007		2007		2008		2007
Performance Ratios (continuing operations):
	Annualized return on average assets	0.63%		1.08%		0.30%		0.40%		0.86%		0.67%		0.91%
	Annualized return on average equity	5.91		10.11		2.66		3.68		8.10		6.22		8.51
	Annualized cash return on average tangible equity (1)	11.31		19.12		5.28		7.32		15.72		11.86		16.48
	Net interest rate spread	2.82		2.88		2.75		2.76		2.81		2.82		2.80
	Efficiency ratio (2)	60.92		61.96		61.07		73.46		61.47		61.29		60.74
	Net interest margin	3.04		3.11		3.10		3.16		3.22		3.08		3.21
	Tax equivalent effect	0.14		0.14		0.12		0.12		0.12		0.14		0.12
	Net interest margin - fully tax equivalent basis (3)	3.18		3.25		3.22		3.28		3.34		3.22		3.33
Performance Ratios (total):
	Annualized return on average assets	0.63%		1.08%		0.30%		1.82%		0.91%		0.67%		0.97%
	Annualized return on average equity	5.91		10.11		2.66		16.86		8.57		6.22		9.04
	Annualized cash return on average tangible equity (1)	11.31		19.12		5.28		31.83		16.60		11.86		17.47
	Net interest rate spread	2.82		2.88		2.75		2.76		2.81		2.82		2.81
	Efficiency ratio (2)	60.92		61.96		61.07		47.60		61.29		61.29		60.44
	Net interest margin	3.04		3.11		3.10		3.17		3.24		3.08		3.23
	Tax equivalent effect	0.14		0.14		0.12		0.12		0.12		0.14		0.12
	Net interest margin - fully tax equivalent basis (3)	3.18		3.25		3.22		3.29		3.36		3.22		3.35
Asset Quality Ratios:
	Non-performing loans to total loans	1.92		1.56		0.87		0.44		0.44		1.92		0.44
	Non-performing assets to total assets	1.45		1.13		0.65		0.33		0.31		1.45		0.31
	Allowance for loan losses to total loans	1.46		1.38		1.35		1.16		1.14		1.46		1.14
	Allowance for loan losses to non-performing loans	75.82		88.19		154.79		266.17		255.73		75.82		255.73
	Net loan charge-offs to average loans (annualized)	0.80		0.57		0.63		0.29		0.18		0.67		0.24
Capital Ratios:
	Tangible equity to assets (4)	6.10%		5.95%		6.20%		6.28%		6.03%		6.10%		6.03%
	Equity to total assets	10.61		10.46		10.78		11.01		10.69		10.61		10.69
	Book value per share (5)	25.51		25.20		25.15		24.91		24.02		25.51		24.02
	Less: goodwill and other intangible assets, net of tax
	benefit, per common share	11.60		11.62		11.39		11.43		11.13		11.60		11.13
	Tangible book value per share (6)	13.91		13.58		13.76		13.48		12.89		13.91		12.89
	Total capital (to risk-weighted assets)	11.65%		11.59%		11.81%		11.58%		11.83%		11.65%		11.83%
	Tier 1 capital (to risk-weighted assets)	9.64		9.58		9.78		9.75		10.31		9.64		10.31
	Tier 1 capital (to average assets)	8.00		8.08		8.29		8.18		8.61		8.00		8.61

(1)		Net cash flow available to stockholders (net income or net income from continuing operations, as appropriate, plus other intangibles amortization expense, net of tax benefit) / Average tangible equity (average equity plus average minority interest less average goodwill and average other intangibles, net of tax benefit)
(2)		Equals total other expense divided by the sum of net interest income on a fully tax equivalent basis and total other income less net gains (losses) on securities available for sale
(3)		Represents net interest income, on a fully tax equivalent basis assuming a 35% tax rate, as a percentage of average interest earning assets.
(4)		Equals total ending stockholders’ equity plus minority interest less goodwill and other intangibles, net of tax benefit, divided by total assets less goodwill and other intangibles, net of tax benefit.
(5)		Equals total ending stockholders’ equity plus minority interest divided by common shares outstanding.
(6)		Equals total ending stockholders’ equity plus minority interest less goodwill and other intangibles, net of tax benefit, divided by common shares outstanding.

NON-GAAP FINANCIAL INFORMATION

This press release contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (GAAP). These measures include net interest income on a fully tax equivalent basis, net interest margin on a fully tax equivalent basis, tangible equity to assets ratio, tangible book value per share, and annualized cash return on average tangible equity. Our management uses these non-GAAP measures in its analysis of our performance. The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 35% tax rate. Management believes that it is a standard practice in the banking industry to present net interest income and net interest margin on a fully tax equivalent basis, and accordingly believes that providing these measures may be useful for peer comparison purposes. The other measures exclude the ending balances of acquisition-related goodwill and other intangible assets, net of tax benefit, in determining tangible stockholders’ equity. Management believes the presentation of these other financial measures excluding the impact of such items provides useful supplemental information that is helpful in understanding our financial results, as they provide a method to assess management’s success in utilizing our tangible capital. These disclosures should not be viewed as substitutes for the results determined to be in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

The following table presents a reconciliation of tangible equity to stockholders’ equity (in thousands):

		September 30,		June 30,		March 31,		December 31,		September 30,
		2008		2008		2008		2007		2007
Stockholders' equity - as reported		$ 886,926		$ 878,317		$ 872,047		$ 862,369		$ 854,903
Plus: minority interest		2,595		2,564		-		-		-
Less: goodwill		387,069		387,069		379,047		379,047		379,047
Less: other intangible, net of tax benefit		17,348		17,941		15,949		16,479		17,045
Tangible equity		$ 485,104		$ 475,871		$ 477,051		$ 466,843		$ 458,811

The following table presents a reconciliation of average tangible equity to average stockholders’ equity (in thousands):

		Three months ended										Nine months ended
		September 30,		June 30,		March 31,		December 31,		September 30,		September 30,		September 30,
		2008		2008		2008		2007		2007		2008		2007
Average Stockholders' equity - as reported		$ 885,641		$ 875,636		$ 879,056		$ 856,362		$ 847,326		$ 880,131		$ 849,626
Plus: average minority interest		2,565		1,814		-		-		-		1,463		-
Less: average goodwill		387,069		384,865		379,047		379,047		379,047		383,676		379,047
Less: average other intangible assets, net of tax benefit		17,582		17,295		16,131		16,671		17,245		17,068		17,812
Average tangible equity		$ 483,555		$ 475,290		$ 483,878		$ 460,644		$ 451,034		$ 480,850		$ 452,767

The following table presents a reconciliation of net cash flow available to stockholders to net income from continuing operations (in thousands):

		Three months ended										Nine months ended
		September 30,		June 30,		March 31,		December 31,		September 30,		September 30,		September 30,
		2008		2008		2008		2007		2007		2008		2007
Net income - as reported		$ 13,154		$ 22,007		$ 5,824		$ 7,933		$ 17,306		$ 40,985		$ 54,092
	Add: other intangible amortization
	expense, net of tax benefit	593		593		530		566		568		1,717		1,711
Net cash flow available to stockholders		$ 13,747		$ 22,600		$ 6,354		$ 8,499		$ 17,874		$ 42,702		$ 55,803

The following table presents a reconciliation of net cash flow available to stockholders to net income (in thousands):

		Three months ended										Nine months ended
		September 30,		June 30,		March 31,		December 31,		September 30,		September 30,		September 30,
		2008		2008		2008		2007		2007		2008		2007
Net income - as reported		$ 13,154		$ 22,007		$ 5,824		$ 36,396		$ 18,305		$ 40,985		$ 57,467
	Add: other intangible amortization
	expense, net of tax benefit	593		593		530		566		568		1,717		1,711
Net cash flow available to stockholders		$ 13,747		$ 22,600		$ 6,354		$ 36,962		$ 18,873		$ 42,702		$ 59,178

Reconciliations of net interest income on a fully tax equivalent basis to net interest income and net interest margin on a fully tax equivalent basis to net interest margin are contained in the tables under "Net Interest Margin.” A reconciliation of tangible book value per share to book value per share is contained in the "Selected Financial Ratios” table.

NET INTEREST MARGIN

The following table presents, for the periods indicated, the total dollar amount of interest income from average interest earning assets and the resultant yields, as well as the interest expense on average interest bearing liabilities, and the resultant costs, expressed both in dollars and rates (dollars in thousands):

			Three Months Ended September 30,												Three Months Ended June 30,
			2008						2007						2008
			Average				Yield/		Average				Yield/		Average				Yield/
			Balance		Interest		Rate		Balance		Interest		Rate		Balance		Interest		Rate
Interest Earning Assets:
Loans (1) (2):
Commercial related credits
	Commercial		$ 1,409,936		$ 20,377		5.66%		$ 1,177,597		$ 23,528		7.82%		$ 1,375,537		$ 19,605		5.64%
	Commercial - nontaxable (3)		70,868		1,299		7.17		7,362		140		7.44		65,880		1,206		7.24
	Commercial loans collateralized by assignment of lease payments		600,345		9,971		6.64		435,777		7,577		6.95		577,051		9,524		6.60
	Real estate commercial		2,247,768		34,022		5.92		1,893,883		34,924		7.22		2,145,371		32,593		6.01
	Real estate construction		768,467		10,044		5.11		867,641		18,793		8.48		804,946		11,010		5.41
Total commercial related credits			5,097,384		75,713		5.81		4,382,260		84,962		7.59		4,968,785		73,938		5.89
Other loans
	Real estate residential		322,421		4,748		5.89		357,839		5,430		6.07		378,163		5,565		5.89
	Home equity		360,618		4,305		4.75		345,887		6,604		7.57		352,209		4,273		4.88
	Indirect		191,533		3,413		7.09		136,911		3,541		10.26		174,681		3,395		7.82
	Consumer loans		54,223		542		3.98		52,479		999		7.55		53,398		709		5.34
Total other loans			928,795		13,008		5.57		893,116		16,574		7.36		958,451		13,942		5.85
Total loans			6,026,179		88,721		5.86		5,275,376		101,536		7.64		5,927,236		87,880		5.96
Taxable investment securities			911,034		10,569		4.64		983,795		11,983		4.87		886,736		10,001		4.51
Investment securities exempt from federal income taxes (3)			425,120		6,118		5.63		385,582		5,517		5.60		409,389		5,889		5.69
Federal funds sold			32,420		165		1.99		4,214		52		4.83		2,912		14		1.90
Other interest bearing deposits			16,065		84		2.08		4,848		63		5.16		18,345		89		1.95
	Total interest earning assets		$ 7,410,818		105,657		5.67		$ 6,653,815		119,151		7.10		$ 7,244,618		103,873		5.77
Assets held for sale			-						360,785						-
Non-interest earning assets			947,167						940,049						933,310
	Total assets		$ 8,357,985						$ 7,954,649						$ 8,177,928
Interest Bearing Liabilities:
Core funding:
	Money market and NOW accounts		$ 1,285,293		$ 5,492		1.70		$ 1,297,887		$ 10,930		3.34		$ 1,226,903		$ 4,762		1.56
	Savings accounts		384,059		270		0.28		417,341		763		0.73		391,683		269		0.28
	Certificate of deposit		2,485,198		20,789		3.33		2,243,190		27,106		4.79		2,299,976		20,647		3.61
	Customer repos		271,718		977		1.43		316,275		3,051		3.83		291,208		1,033		1.43
Total core funding			4,426,268		27,528		2.47		4,274,693		41,850		3.88		4,209,770		26,711		2.55
Whole sale funding:
	Public funds		207,389		1,514		2.90		298,215		3,952		5.26		245,953		1,956		3.20
	Brokered accounts (includes fee expense)		947,462		9,151		3.84		400,479		5,191		5.14		735,325		6,675		3.65
	Other short-term borrowings		269,795		1,989		2.93		500,383		6,566		5.21		533,462		4,318		3.26
	Long-term borrowings		640,096		6,273		3.83		356,130		5,530		6.08		587,940		5,657		3.81
Total wholesale funding			2,064,742		18,927		3.65		1,555,207		21,239		5.42		2,102,680		18,606		3.56
Total interest bearing liabilities			$ 6,491,010		46,455		2.85		$ 5,829,900		63,089		4.29		$ 6,312,450		45,317		2.89
Non-interest bearing deposits			904,571						864,165						905,201
Liabilities held for sale			-						329,540						-
Other non-interest bearing liabilities			76,763						83,718						84,645
Stockholders' equity			885,641						847,326						875,636
		Total liabilities and stockholders' equity	$ 8,357,985						$ 7,954,649						$ 8,177,932
		Net interest income/ interest rate spread (4)			$ 59,202		2.82				$ 56,062		2.81				$ 58,556		2.88
		Taxable equivalent adjustment			2,596						1,979						2,483
		Net interest income, as reported			$ 56,606						$ 54,083						$ 56,073
		Net interest margin (5)					3.04						3.22						3.11
		Tax equivalent effect					0.14						0.12						0.14
		Net interest margin on a fully equivalent basis (5)					3.18						3.34						3.25

(1)		Non-accrual loans are included in average loans.
(2)		Interest income includes amortization of deferred loan origination fees of $1.8 million, $1.7 million and $1.8 million for the three months ended September 30, 2008, September 30, 2007, and June 30, 2008, respectively.
(3)		Non-taxable loan and investment income is presented on a fully tax equivalent basis assuming a 35% tax rate.
(4)		Interest rate spread represents the difference between the average yield on interest earning assets and the average cost of interest bearing liabilities and is presented on a fully tax equivalent basis.
(5)		Net interest margin represents net interest income as a percentage of average interest earning assets.

The following table presents, for the periods indicated, the total dollar amount of interest income from average interest earning assets and the resultant yields, as well as the interest expense on average interest bearing liabilities, and the resultant costs, expressed both in dollars and rates (dollars in thousands):

			Nine Months Ended September 30,
			2008						2007
			Average				Yield/		Average				Yield/
			Balance		Interest		Rate		Balance		Interest		Rate
Interest Earning Assets:
Loans (1) (2):
Commercial related credits
	Commercial		$ 1,377,257		$ 62,503		5.96%		$ 1,117,051		$ 66,569		7.86%
	Commercial - nontaxable (3)		54,746		3,031		7.27		10,046		618		8.11
	Commercial loans collateralized by assignment of lease payments		577,574		28,906		6.67		408,466		21,174		6.91
	Real estate commercial		2,132,481		99,584		6.14		1,838,509		101,027		7.25
	Real estate construction		800,095		35,178		5.78		858,364		55,405		8.51
Total commercial related credits			4,942,153		229,202		6.09		4,232,436		244,793		7.63
Other loans
	Real estate residential		358,061		15,900		5.92		353,472		16,054		6.06
	Home equity		353,897		13,660		5.16		357,509		20,431		7.64
	Indirect		173,064		9,836		7.59		125,775		8,128		8.64
	Consumer loans		53,710		2,064		5.13		53,525		3,024		7.55
Total other loans			938,732		41,460		5.90		890,281		47,637		7.15
Total loans			5,880,885		270,662		6.15		5,122,717		292,430		7.63
Taxable investment securities			872,679		30,541		4.67		1,084,482		39,494		4.86
Investment securities exempt from federal income taxes (3)			411,954		17,781		5.67		368,213		15,712		5.63
Federal funds sold			16,907		274		2.13		9,055		354		5.16
Other interest bearing deposits			16,597		279		2.25		5,885		162		3.68
	Total interest earning assets		$ 7,199,022		319,537		5.93		$ 6,590,352		348,152		7.06
Assets held for sale			-						382,663
Non-interest earning assets			935,373						935,046
	Total assets		$ 8,134,395						$ 7,908,061
Interest Bearing Liabilities:
Core funding:
	Money market and NOW accounts		$ 1,249,186		$ 16,857		1.80		$ 1,184,019		$ 27,953		3.16
	Savings accounts		388,217		982		0.34		438,028		2,440		0.74
	Certificate of deposit		2,335,131		66,334		3.79		2,287,991		82,276		4.81
	Customer repos		299,030		3,840		1.72		307,910		8,812		3.83
Total core funding			4,271,564		88,013		2.75		4,217,948		121,481		3.85
Whole sale funding:
	Public funds		245,240		6,483		3.53		283,045		11,092		5.24
	Brokered accounts (includes fee expense)		733,991		21,718		3.95		426,792		15,971		5.00
	Other short-term borrowings		468,784		12,344		3.52		477,458		18,813		5.27
	Long-term borrowings		563,311		17,553		4.09		367,855		16,746		6.00
Total wholesale funding			2,011,326		58,098		3.86		1,555,150		62,622		5.38
Total interest bearing liabilities			$ 6,282,890		146,111		3.11		$ 5,773,098		184,103		4.26
Non-interest bearing deposits			883,131						857,274
Liabilities held for sale			-						351,479
Other non-interest bearing liabilities			88,243						76,584
Stockholders' equity			880,131						849,626
		Total liabilities and stockholders' equity	$ 8,134,395						$ 7,908,061
		Net interest income/ interest rate spread (4)			$ 173,426		2.82				$ 164,049		2.80
		Taxable equivalent adjustment			7,284						5,715
		Net interest income, as reported			$ 166,142						$ 158,334
		Net interest margin (5)					3.08						3.21
		Tax equivalent effect					0.14						0.12
		Net interest margin on a fully equivalent basis (5)					3.22						3.33

(1)		Non-accrual loans are included in average loans.
(2)		Interest income includes amortization of deferred loan origination fees of $5.3 million and $5.2 million for the nine months ended September 30, 2008 and September 30, 2007, respectively.
(3)		Non-taxable loan and investment income is presented on a fully tax equivalent basis assuming a 35% tax rate.
(4)		Interest rate spread represents the difference between the average yield on interest earning assets and the average cost of interest bearing liabilities and is presented on a fully tax equivalent basis.
(5)		Net interest margin represents net interest income as a percentage of average interest earning assets.