mbfi-11k_123106.htm
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SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
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FORM
11-K
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Annual
Report Pursuant to Section 15(d) of the
Securities
Exchange Act of 1934
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(Mark
One)
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For
the fiscal year ended December 31, 2006
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OR
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¨ Transition
report pursuant to Section 15(d) of the Securities Exchange Act
of 1934
(No Fee Required)
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For
the transition period from ___to ___
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Commission
file number 000-24566-01
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A. Full
title of the
plan and the address of the plan, if different from that of the
issuer
named below:
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MB
Financial, Inc. 401(k) Profit Sharing Plan
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B. Name
of
issuer of the securities held pursuant to the plan and the address
of its
principal executive office :
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MB
Financial, Inc.
800
West Madison Street
Chicago,
Illinois 60607
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Required
Information
The
MB
Financial, Inc. 401(k) Profit Sharing Plan (the “Plan”) is subject to the
provisions of the Employee Retirement Security Act of 1974, as amended
(“ERISA”), and for purposes of satisfying the requirements of Form 11-K has
included for filing herewith the Plan financial statements and schedules
prepared in accordance with the financial reporting requirements of ERISA.
Attached to this report as Exhibit 23 is the consent of McGladrey
& Pullen LLP.
2
MB
Financial, Inc.
401(k)
Profit Sharing Plan
Financial
Report
December
31, 2006
Contents
Report
of
Independent Registered Public Accounting Firm 1
Financial
Statements
Statements
of Net Assets Available
for
Benefits 2
Statements
of Changes in Net Assets
Available for Benefits 3
Notes
to Financial
Statements 4 –
8
Schedule
Assets
(Held at End of
Year)
9
Report
of Independent Registered
Public
Accounting Firm
To
the
Plan Administrator
MB
Financial, Inc.
401(k)
Profit Sharing Plan
Chicago,
Illinois
We
have
audited the accompanying statements of net assets available for benefits of
MB
Financial, Inc. 401(k) Profit Sharing Plan (the “Plan”) as of December 31, 2006
and 2005, and the related statement of changes in net assets available for
benefits for the year ended December 31, 2006. These financial
statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based
on
our audits.
We
conducted our audits in accordance with auditing standards of the Public Company
Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
the
plan management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis
for our opinion.
In
our
opinion, the financial statements referred to above present fairly, in all
material respects, the net assets available for benefits of the MB Financial,
Inc. 401(k) Profit Sharing Plan as of December 31, 2006 and 2005, and the
changes in net assets available for benefits for the year ended December 31,
2006 in conformity with accounting principles generally accepted in the United
States of America.
As
described in Note 2, the Plan adopted Financial Accounting Standards Board
Staff
Position AAG INV-1 and SOP 94-4-1, Reporting of Fully Benefit-Responsive
Investment Contracts Held by Certain Investment Companies Subject to the AICPA
Investment Company Guide and Defined Contribution Health and Welfare and Pension
Plans, as of December 31, 2006.
Our
audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of
Assets (Held at End of Year) as of December 31, 2006 is presented for the
purpose of additional analysis and is not a required part of the basic financial
statements but is supplementary information required by the United States
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The supplemental
schedule is the responsibility of the Plan's management. The
supplemental schedule has been subjected to the auditing procedures applied
in
the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/ McGladrey & Pullen, LLP
Chicago,
Illinois
July
11,
2007
| MB
Financial, Inc |
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| 401(k)
Profit Sharing Plan |
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| Statements
of Net Assets Available for Benefits |
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| December
31, 2006 and 2005 |
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2006
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2005
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| Assets |
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Investments at fair value: |
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| Shares
of registered investment companies |
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$ |
45,050,898 |
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$ |
40,669,199 |
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| Common
collective trust |
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13,241,312 |
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13,872,327 |
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| Common
stock of MB Financial, Inc. |
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10,708,545 |
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9,922,832 |
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| Participant
loans |
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1,059,049 |
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993,089 |
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70,059,804 |
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65,457,447 |
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Receivables: |
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| Employer
contributions |
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3,190,718 |
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3,036,043 |
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| Participant
contributions |
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8,140 |
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12,579 |
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3,198,858 |
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3,048,622 |
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Cash |
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453,974 |
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483,041 |
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| Total
assets |
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73,712,636 |
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68,989,110 |
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| Liabilities,
excess contributions |
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90,716 |
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90,874 |
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| Net
Assets available for benefits at fair value |
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73,621,920 |
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68,898,236 |
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| Adjustment
from fair value to contract value for interest in common |
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collective fund relating to fully benefit-responsive investment contracts
(Note 2) |
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214,897 |
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201,501 |
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| Net
Assets available for benefits |
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$ |
73,836,817 |
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$ |
69,099,737 |
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| See
Notes to Financial Statements. |
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| MB
Financial, Inc. |
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| 401(k)
Profit Sharing Plan |
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| Statement
of Changes in Net Assets Available for Benefits |
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| Year
Ended December 31, 2006 |
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| Investment
income: |
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Net appreciation in fair value of investments |
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$ |
4,140,735 |
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Interest and dividends |
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2,655,929 |
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6,796,664 |
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| Contributions: |
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Participants |
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2,893,050 |
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Employer |
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3,190,718 |
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Rollovers |
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286,329 |
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6,370,097 |
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| Total
additions |
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13,166,761 |
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| Deductions: |
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Benefits paid |
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8,412,984 |
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Administrative expenses |
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16,697 |
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| Total
deductions |
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8,429,681 |
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| Net
increase |
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4,737,080 |
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| Net
assets available for benefits: |
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Beginning of year |
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69,099,737 |
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End of year |
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$ |
73,836,817 |
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| See
Notes to Financial Statements. |
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MB
Financial, Inc.
401(k) Plan Profit Sharing Plan
Notes
to Financial Statements
The
following description of the MB Financial, Inc. 401(k) Profit Sharing Plan
(the
"Plan"), provides only general information. Participants should refer
to the Plan Agreement for a more complete description of the Plan's
provisions.
General:
The
Plan
is a defined contribution plan covering all full-time and part-time employees
of
MB Financial, Inc. (the "Company" or "Trustee"). Employees scheduled
to work at least twenty hours per week are eligible upon completion of three
months of service and enter the Plan effective as of the first day of the month
following meeting eligibility. Employees scheduled to work less than
twenty hours per week are eligible upon completion of 1,000 hours of service
in
a 12-month period beginning on their date of hire and enter the Plan on the
January 1, or July 1 after meeting the eligibility requirements. The
Plan is subject to the provisions of the Employee Retirement Income Security
Act
of 1974 (ERISA).
Participant
accounts:
Each
participant's account is credited with the participant's contributions, the
Company's matching contributions, and an allocation of (a) Plan earnings, and
(b) the Company's profit sharing contributions, and charged with an allocation
of administrative expenses. Allocations are based on participant
earnings or account balances, as defined. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account.
Contributions:
The
Company contributes to the Plan from current or accumulated
profits. In 2006, the Company contributed on behalf of each
participant a matching contribution equal to 100% of each participant's deferral
contribution up to the first 2% of the participant's compensation and 50% of
each participant's deferral contribution for the next 2% of the participant's
compensation along with a profit sharing contribution of approximately 3.5%
of
total compensation in 2006. Each participant may make tax deferred
contributions up to 15% of his or her compensation, as defined in the
Plan. Participants may make rollover contributions to the Plan from
prior employer plans. Contributions are subject to certain
limitations.
Vesting:
Participants
are immediately vested in their contributions and Company matching contributions
plus actual earnings thereon. Vesting in the Company’s profit sharing
contribution portion of their accounts plus actual earnings thereon, if any,
is
based on years of service, as defined. A participant is 100% vested
after 7 years of credited service.
Investment
options:
Upon
enrollment in the Plan, participants may direct their contributions, the
Company's matching contributions, and the Company's profit sharing contributions
in a variety of investment options as more fully described in the Plan's
literature. Participants may change their investment options at any
time.
MB
Financial, Inc.
401(k) Plan Profit Sharing Plan
Notes
to Financial Statements
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Note
1.
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Plan
Description (continued)
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Participant
loans:
Participants
may borrow from their accounts up to a maximum equal to the lesser of $50,000
reduced by the excess, if any, of the participant's highest outstanding balance
of loans from the Plan during the one year period prior to the date of the
loan
over the participant's current outstanding balance of loans or 50% of their
vested account balances. Loan terms range from 1-5 years or up to 15
years for the purchase of a primary residence. The loans are
collateralized by the balance in the participant's account and bear interest
at
a rate commensurate with local prevailing rates as determined quarterly by
the
plan administrator. Current interest rates on outstanding loans range
from 3.5% to 10.0%. Principal and interest payments are required to
be paid not less than quarterly.
Payment
of benefits:
Upon
retirement, a participant may elect to receive either a lump-sum amount equal
to
the value of his or her account, or installment payments. The balance
in this account may be used to purchase a single premium annuity
contract. Upon termination, a participant may elect to receive a
lump-sum amount or direct rollover into another plan equal to the vested value
of his or her account, or if his or her vested value is greater than $5,000
he
or she may elect equal installment payments commencing within sixty days after
the close of the plan year in which employment is terminated.
Benefits
are recorded when paid.
Forfeitures:
At
each
anniversary date, defined as December 31, any forfeitures since the prior
anniversary date shall be made available to reinstate previously forfeited
account balances for former participants. The remaining forfeitures,
if any, shall be used to reduce the contribution of the Company in the year in
which such forfeitures occur. For the year ended December 31, 2006,
Company contributions were reduced by approximately $95,000 from forfeited
non-vested accounts. No forfeited amounts remain as of December 31,
2006.
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Note
2.
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Significant
Accounting Policies
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Basis
of accounting:
The
financial statements of the Plan are prepared under the accrual method of
accounting.
Use
of estimates:
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and changes therein, and disclosure of contingent assets and
liabilities. Actual results could differ from those
estimates.
MB
Financial, Inc.
401(k) Plan Profit Sharing Plan
Notes
to Financial Statements
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Note
2.
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Significant
Accounting Policies
(continued)
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New
Accounting Standards:
As
of
December 31, 2006, the Plan adopted Financial Accounting Standards Board Staff
Position, FSP AAG INV-1 and SOP 94-4-1, Reporting of Fully
Benefit-Responsive Investment Contracts Held by Certain Investment Companies
Subject to the AICPA Investment Company Guide and Defined-Contribution Health
and Welfare Pension Plans (the FSP). The FSP requires investment
contracts held by a defined-contribution plan to be reported at fair
value. However, contract value is the relevant measurement attribute
for that portion of the net assets available for benefit-responsive investment
contracts because contract value is the amount participants would receive if
they were to initiate permitted transactions under the terms of the
Plan. The Plan invests in investment contracts through a collective
trust. As required by the FSP, the Statement of Net Assets Available
for Benefits presents the fair value of the investment in the collective trust
as well as adjustment of the investment in the collective trust from fair value
to contract value relating to the investment contracts. The statement
of Changes in Net Assets Available for Benefits is prepared on a contract value
basis. The FSP has been retrospectively applied to the prior period
presented on the Statement of Net Assets Available for Benefits as of December
31, 2005.
In
September 2006, the FASB issued Statement on Financial Accounting Standards
No.
157 (SFAS 157), Fair Value Measurements. SFAS 157
establishes a single authoritative definition of fair value, sets out a
framework for measuring fair value and requires additional disclosures about
fair value measurement. SFAS 157 is effective for financial
statements issued for fiscal years beginning after November 15,
2007. The Company does not believe the adoption of SFAS 157 will have
a material impact on the financial statements.
Investment
valuation and income recognition:
Plan
investments are stated at fair value. Shares of registered investment
companies are valued at quoted net assets values which approximate the fair
value of shares held by the Plan at year-end. Shares of MB Financial,
Inc. common stock are valued at quoted market prices. Shares held in
common/collective trust funds are reported at fair value based on the unit
prices quoted by the fund, representing the fair value of the underlying
investments. The investments in the fully benefit-responsive
investment contracts are stated at contract value which is equal to principal
balance plus accrued interest. As provided in the FSP, an investment
contract is generally valued at contract value, rather than fair value, to
the
extent it is fully benefit-responsive. The fair value of fully
benefit-responsive investment contracts is calculated using a discounted cash
flow model which considers recent fee bids as determined by recognized dealers,
discount rate and the duration of the underlying portfolio
securities. The Participant loans are valued at cost which
approximates fair value.
Purchases
and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on
the ex-dividend date.
Participant
loans are valued at face value, which approximates fair value.
Investment
securities, in general, are exposed to various risks, such as interest rate,
credit, and overall market volatility. Due to the level of risk
associated with certain investment securities, it is reasonably possible that
changes in the value of investment securities will occur in the near term and
those changes could materially affect the amounts reported in the statements
of
net assets available for benefits.
MB
Financial, Inc.
401(k) Plan Profit Sharing Plan
Notes
to Financial Statements
The
following represents the Plan's investments at December 31, 2006 and
2005. Investments representing 5% or more of the Plan's net assets
are separately stated.
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2006
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2005
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Shares of registered investment companies: |
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| Mass
Investors Growth Stock Fund |
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$ |
4,703,429 |
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$ |
4,756,000 |
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| MFS
Value Fund |
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11,986,645 |
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6,198,763 |
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| Calvert
Income Fund A |
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5,787,569 |
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10,538,730 |
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| Other |
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22,573,255 |
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19,175,706 |
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Common stock: |
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| MB
Financial, Inc. |
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10,708,545 |
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9,922,832 |
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Common/collective trusts: |
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| MFS
Institutional Fixed Fund |
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13,241,312 |
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13,872,327 |
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Participant loans |
|
|
1,059,049 |
|
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|
993,089 |
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| |
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$ |
70,059,804 |
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$ |
65,457,447 |
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The
Plan's investments, including investments bought, sold, and held during the
year
ended December 31, 2006 appreciated (depreciated) in value as
follows:
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Shares of registered investment companies |
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$ |
3,334,751 |
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Common stock |
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|
806,557 |
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Common collective fund |
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(573) |
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$ |
4,140,735 |
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Note
4.
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Related
Party Transactions
|
The
Company provides certain administrative services to the Plan and is not
reimbursed. Certain other administrative expenses are paid by the
Company. These expenses are not material to the financial
statements.
The
Plan
held 284,726 shares of MB Financial, Inc. common stock with a cost of $7,049,373
and a fair value of $10,708,545 at December 31, 2006. The Plan
purchased approximately 29,124 shares of MB Financial, Inc. common stock at
a
cost of $1,056,143 and sold approximately 24,704 shares for $892,036 during
the
year ended December 31, 2006. The Plan held 280,306 shares of MB
Financial, Inc. common stock with a cost of $6,590,749 and a fair value of
$9,922,832 at December 31, 2005.
The
Plan
invests in certain registered investment companies managed by
MFS. MFS is the custodian of the Plan's assets and therefore these
transactions qualify as party-in-interest transactions.
MB
Financial, Inc.
401(k) Plan Profit Sharing Plan
Notes
to Financial Statements
Although
it has not expressed any intent to do so, the Company has the right under the
Plan to discontinue its contributions at any time and to terminate the Plan
subject to the provisions of ERISA. In the event of plan termination,
participants will become fully vested in their accounts.
|
Note
6.
|
Income
Tax Status
|
The
Internal Revenue Service has determined and informed the Company by a letter
dated March 10, 2003, that the Plan is qualified and the trust established
under the Plan is exempt under the appropriate sections of the Internal Revenue
Code ("IRC"). The Plan administrator believes that the Plan is
designed and is currently being operated in compliance with applicable
provisions of the IRC.
|
Note
7.
|
Reconciliation
of Differences Between these Financial Statements and the Financial
Information Required on Form
5500
|
The
following is a reconciliation of the differences between these financial
statements and the financial information shown on Form 5500:
| |
|
2006
|
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|
2005
|
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| Net
assets available for benefits per |
|
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|
|
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|
|
the financial statements |
|
$ |
73,836,817 |
|
|
$ |
69,099,737 |
|
| Fair
value of fully benefit-responsive contracts |
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|
(214,897 |
) |
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|
(201,501 |
) |
| Plus:
Adjustment from fair value to contract value for fully |
|
|
|
|
|
|
|
|
|
benefit-responsive investment contracts |
|
|
214,897 |
|
|
|
201,501 |
|
| Excess
contributions |
|
|
90,716 |
|
|
|
90,874 |
|
| Net
assets available for benefits per the Form 5500 |
|
$ |
73,927,533 |
|
|
$ |
69,190,611
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| |
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| Changes
in net assets available for benefits |
|
|
|
|
|
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|
per the financial statements |
|
$ |
4,737,080 |
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|
$ |
6,657,219 |
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| Excess
contributions |
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|
(158 |
) |
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|
8,374 |
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| Changes
in net assets available for benefits |
|
|
|
|
|
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|
per the Form 5500 |
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$ |
4,736,922 |
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$ |
6,665,593 |
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| |
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Note
8.
|
Plan
Merger and Subsequent
Event
|
In
December 2006, the Plan Sponsor approved the merger of the First Oak Brook
Bancshares, Inc. (FOBB) Employees’ Stock Bonus Plan and the FOBB 401(K) Savings
Plan into the Plan. The net assets of approximately $16.4 million were
transferred into the Plan in January 2007.
| MB
Financial, Inc. |
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| 401(k)
Profit Sharing Plan |
|
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| Schedule
H, Line 4i - Assets Held at End of Year |
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| December
31, 2006 |
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(c)
Description of investment
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| |
(b)
Identity of issue,
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including
maturity
date, |
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| |
borrower,
lessor |
rate of interest,
collateral, |
(d)
|
(e)
Current |
| (a) |
or similar party |
par or maturity value |
Cost |
Value |
| |
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| |
Massachusetts
Investors Trust |
Registered
Investment Company |
N/A |
$ 1,873,775 |
| |
Mass
Investors Growth Stock Fund |
Registered
Investment Company |
N/A |
4,703,429 |
| * |
MFS
Total Return Fund |
Registered
Investment Company |
N/A |
2,206,948 |
| * |
MFS
High Income Fund |
Registered
Investment Company |
N/A |
556,607 |
| * |
MFS
Institutional Fixed Fund |
Registered
Investment Company |
N/A |
13,241,312 |
| * |
MFS
Value Fund |
Registered
Investment Company |
N/A |
11,986,645 |
| * |
MFS
Technology Fund |
Registered
Investment Company |
N/A |
528,273 |
| * |
MFS
Research International Fund |
Registered
Investment Company |
N/A |
3,058,888 |
| * |
MFS
Conservative Allocation Fund |
Registered
Investment Company |
N/A |
2,391,408 |
| * |
MFS
Moderate Allocation Fund |
Registered
Investment Company |
N/A |
1,809,019 |
| * |
MFS
Growth Allocation Fund |
Registered
Investment Company |
N/A |
3,022,904 |
| * |
MFS
Aggressive Growth Allocation Fund |
Registered
Investment Company |
N/A |
903,207 |
| * |
MFS
Money Market Fund |
Registered
Investment Company |
N/A |
108,938 |
| |
Dreyfus
Basic S&P 500 Index Fund |
Registered
Investment Company |
N/A |
2,966,089 |
| |
Victory
Special Value A |
Registered
Investment Company |
N/A |
416,487 |
| |
Columbia
Acorn Fund A |
Registered
Investment Company |
N/A |
2,035,948 |
| |
Calvert
Income Fund A |
Registered
Investment Company |
N/A |
5,787,569 |
| |
Lord
Abbot Small Cap Blend A |
Registered
Investment Company |
N/A |
694,764 |
| * |
MB
Financial, Inc. Stock |
Common
Stock |
N/A |
10,708,545 |
| * |
Participant
Loans |
Interest
Rates Range from |
|
|
| |
|
3.50%
to 10.00% Maturing |
|
|
| |
|
through 6/1/2018 |
N/A |
1,059,049 |
| |
|
|
|
$
70,059,804 |
| |
|
|
|
|
| |
*
Party-in-interest - refer to Note 4. |
|
|
|
| |
N/A
- Investments are participant directed; therefore, cost is not
applicable. |
|
|
Signatures
The
Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
|
|
|
|
MB
FINANCIAL, INC. 401(k) PROFIT SHARING PLAN
|
|
|
|
|
|
|
|
|
By:
|
MB
Financial Bank, N.A., as Plan Trustee
|
|
|
|
|
|
|
Date:
|
July
16, 2007
|
|
/s/
Jill E. York
|
|
|
|
|
Jill
E. York
Executive
Vice President and Chief Financial
Officer
|