S-4 1 forms-4mbfitaycmerger.htm S-4 FORM S-4 MBFI TAYC MERGER

As filed with the Securities and Exchange Commission on October 17, 2013
Registration No. 333-_______
    


UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

MB FINANCIAL, INC.
(Exact name of registrant as specified in its charter)


Maryland
(State or other jurisdiction of incorporation or organization)

6021
(Primary Standard Industrial Classification Code Number)

36-4460265
(I.R.S. Employer Identification No.)


MB Financial, Inc.
800 West Madison Street
Chicago, Illinois 60607
(888) 422-6562

JILL E. YORK
Vice President and Chief Financial Officer
MB Financial, Inc.
6111 N. River Road
Rosemont, Illinois 60018
(847) 653-1992

(Address, including zip code, and telephone
number, including area code, of registrant's
principal executive offices)

(Name, address, including zip code,
and telephone number, including area
code, of agent for service)

COPIES TO:
 
 
 
CRAIG M. SCHEER, P.C.
RANDALL T. CONTE
DENNIS R. WENDTE, ESQ.
Silver, Freedman & Taff, L.L.P.
Chief Financial Officer and
Barack Ferrazzano
3299 K Street, N.W., Suite 100
Chief Operating Officer
 Kirschbaum &
Washington, D.C. 20007
Taylor Capital Group, Inc.
Nagelberg LLP
Telephone: (202) 295-4500
9550 West Higgins Road
200 West Madison Street,
 
Rosemont, Illinois  60018
Suite 3900
 
Telephone: (847) 653-7978
Chicago, Illinois 60606
 
 
Telephone: (312) 984-3100
 
 
 

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable following the effectiveness of this Registration Statement and upon completion of the merger described in this Registration Statement.

If the securities being registered on this Form are being offered in connection with formation of a holding company and there is compliance with General Instruction G, check the following box. [ ]    

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]




If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [X]        Accelerated Filer [ ]
Non-accelerated filer [ ]            Smaller reporting company [ ]
(Do not check if a smaller reporting company)

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:
    
Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)     [ ]
Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer    [ ]

CALCULATION OF REGISTRATION FEE



Title of each class of
securities to be registered


Amount to
be registered(1)

Proposed maximum
offering price
per share
Proposed maximum aggregate offering price


Amount of
registration fee
Common Stock, par value $.01 per share

 20,454,831shares(2)
N/A

$596,528,653(3)
$
76,833

Perpetual Non-Cumulative Preferred Stock, Series A, par value $.01 per share

 4,000,000 shares(4)
N/A

$103,220,000(5)
$
13,295

Fixed Rate Cumulative Perpetual Preferred Stock, Series B, par value $0.01 per share
78,623(6)
N/A
$78,623,000(7)
$
10,127

Total
 
 
 
$
100,255


(1)
Pursuant to Rule 416, this Registration Statement also covers an indeterminate number of additional securities of MB Financial, Inc. (“MB Financial”) as may be issuable as a result of stock splits, stock dividends or similar transactions.
(2)
Represents the maximum number of shares of common stock of MB Financial estimated to be issuable upon completion of the merger described herein in exchange for shares of Taylor Capital Group, Inc. (“Taylor Capital”) common stock and Nonvoting Convertible Preferred Stock (“nonvoting preferred stock”) that are currently outstanding and shares of Taylor Capital common stock that may be issued upon exercise of Taylor Capital stock options and warrants that are currently outstanding.
(3)
Estimated solely for the purpose of calculating the registration fee required by Section 6(b) of the Securities Act of 1933, as amended (the “Securities Act”), and calculated pursuant to Rules 457(f)(1), 457(f)(3) and 457(c) under the Securities Act, the proposed maximum aggregate offering price of MB Financial’s common stock was calculated based upon the market value of shares of Taylor Capital common stock as follows:  (A) the product of (1) $22.685, which is the average of the high and low prices per share of Taylor Capital common stock on October 11, 2013, as reported on the NASDAQ Global Select Market, multiplied by (2) 31,802,654, which is the sum of (i) 30,519,980, the estimated maximum number of shares of Taylor Capital common stock that may be exchanged in the merger, and (ii) 1,282,674, the maximum number of shares of Taylor Capital nonvoting preferred stock that may be exchanged in the merger, less (B) the estimated maximum amount of cash to be paid by MB Financial in exchange for shares of Taylor Capital common stock and nonvoting preferred stock that are currently outstanding (which equals $124,914,553).
(4)
Represents the maximum number of shares of MB Financial’s Perpetual Non-Cumulative Preferred Stock, Series A (“MB Financial Series A preferred stock”) estimated to be issuable upon completion of the merger described herein in exchange for shares of Taylor Capital’s Perpetual Non-Cumulative Preferred Stock, Series A (“Taylor Capital Series A preferred stock”) that are currently outstanding.
(5)
Estimated solely for the purpose of calculating the registration fee required by Section 6(b) of the Securities Act, and calculated pursuant to Rules 457(f)(1) and 457(c) under the Securities Act, the proposed maximum aggregate offering price of MB Financial Series A preferred stock was calculated based upon the market value of shares of Taylor Capital Series A preferred stock as follows:  the product of (A) $25.805, which is the average of the high and low prices per share of Taylor Capital Series A preferred stock on October 11, 2013, as reported on the NASDAQ Global Select Market, multiplied by (B) 4,000,000, which is the maximum number of shares of Taylor Capital Series A preferred stock that may be exchanged in the merger.
(6)
Represents the maximum number of shares of MB Financial’s Fixed Rate Cumulative Perpetual Preferred Stock, Series B (“MB Financial Series B preferred stock”), estimated to be issuable upon completion of the merger described herein in exchange for shares of Taylor Capital’s Fixed Rate Cumulative Perpetual Preferred Stock, Series B (“Taylor Capital Series B preferred stock”), that are currently outstanding, to the extent such shares are not repurchased or redeemed by Taylor Capital prior to completion of the merger described herein.
(7)
Estimated solely for the purpose of calculating the registration fee required by Section 6(b) of the Securities Act, and calculated pursuant to Rule 457(f)(2) under the Securities Act, the proposed maximum aggregate offering price of MB Financial Series B preferred stock was calculated based upon the liquidation value of Taylor Capital Series B preferred stock of $1,000 per share.







The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
    






The information contained in this joint proxy statement/prospectus is not complete and may be changed. A registration statement relating to the shares of MB Financial stock to be issued in the merger has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This joint proxy statement/prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale is not permitted or would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
PRELIMINARY JOINT PROXY STATEMENT/PROSPECTUS
DATED OCTOBER 16, 2013, SUBJECT TO COMPLETION
 

MERGER PROPOSED - YOUR VOTE IS VERY IMPORTANT

Dear Stockholders of MB Financial, Inc. and Taylor Capital Group, Inc.:

We are pleased to report that the boards of directors of MB Financial, Inc. and Taylor Capital Group, Inc. have each approved a merger of our two companies. We believe that this combination will create Chicagoland’s premier commercial bank.

Under the merger agreement, Taylor Capital will merge with and into MB Financial, with MB Financial as the surviving corporation. Each outstanding share of Taylor Capital common stock and Taylor Capital nonvoting preferred stock will be converted into the right to receive, promptly following the completion of the merger, 0.64318 shares of MB Financial common stock and $4.08 in cash. Each outstanding share of Taylor Capital Series A preferred stock will be exchanged for a share of a series of MB Financial preferred stock with substantially identical terms. Any shares of Taylor Capital Series B preferred stock that are not repurchased or redeemed by Taylor Capital prior to the merger will be exchanged for a series of MB Financial preferred stock with substantially identical terms and repurchased or redeemed by MB Financial at the time of or promptly after the merger.

Although the number of shares of MB Financial common stock that holders of Taylor Capital common stock and nonvoting preferred stock will receive for the stock portion of the merger consideration is fixed, the market value of those shares will fluctuate with the market price of MB Financial common stock and will not be known at the time Taylor Capital stockholders vote on the merger agreement. Based on the closing price of MB Financial’s common stock on July 12, 2013, the last trading day before public announcement of the merger agreement, the per share stock consideration to be issued at the 0.64318 exchange ratio represented approximately $18.12 in value for each share of Taylor Capital common stock and nonvoting preferred stock, which, when added to the $4.08 per share cash merger consideration, equated to approximately $22.20 in value for each share of Taylor Capital common stock and nonvoting preferred stock. Based on the closing price of MB Financial’s common stock on _____, 2013, the last trading day before the date of this joint proxy statement/prospectus, the per share stock consideration to be issued at the 0.64318 exchange ratio represented approximately $___ in value for each share of Taylor Capital common stock and nonvoting preferred stock, which, when added to the $4.08 per share cash merger consideration, equated to approximately $___ in value for each share of Taylor Capital common stock and nonvoting preferred stock. We urge you to obtain current market quotations for MB Financial common stock (NASDAQ: trading symbol “MBFI”) and Taylor Capital common stock (NASDAQ: trading symbol “TAYC”). Based on the 0.64318 exchange ratio and the number of shares of Taylor Capital common stock and nonvoting preferred stock outstanding and reserved for issuance under various plans and agreements, the maximum number of shares of MB Financial common stock issuable in the merger is expected to be __________.

At a special meeting of MB Financial stockholders to be held on ____, 2013, MB Financial common stockholders will be asked to approve (1) the merger agreement and the issuance of MB Financial common stock in connection with the merger and (2) a proposal to adjourn the MB Financial special meeting, if necessary or appropriate, to solicit additional proxies in favor of the merger proposal. Approval of the MB Financial merger proposal requires the affirmative vote of the holders of a majority of the outstanding shares of MB Financial common stock, and approval of the MB Financial adjournment proposal requires the affirmative vote of a majority of the votes cast on the matter.

At a special meeting of Taylor Capital stockholders to be held on ____, 2013, Taylor Capital common stockholders will be asked to (1) adopt the merger agreement, (2) approve a proposal to adjourn the Taylor Capital special meeting, if necessary or appropriate, to solicit additional proxies in favor of the merger proposal and (3) approve on an advisory (non-binding) basis, the compensation of certain executive officers of Taylor Capital in connection with the merger. Approval of the Taylor Capital merger proposal requires the affirmative vote of the holders of a majority of the outstanding shares of Taylor Capital common stock, and approval of each of the other items to be considered at the Taylor Capital special meeting requires the affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote on the item. Holders of Taylor Capital




nonvoting preferred stock, Series A preferred stock and Series B preferred stock are not entitled to, and are not being requested to, vote at the Taylor Capital special meeting.

MB Financial’s board of directors unanimously recommends that MB Financial stockholders vote “FOR” the MB Financial merger proposal and “FOR” the MB Financial adjournment proposal.

Taylor Capital’s board of directors unanimously recommends that Taylor Capital stockholders vote “FOR” the Taylor Capital merger proposal, “FOR” the Taylor Capital adjournment proposal and “FOR” the Taylor Capital compensation proposal.

This joint proxy statement/prospectus describes the special meetings of MB Financial and Taylor Capital, the documents related to the merger and other related matters. Please carefully read this entire joint proxy statement/prospectus, including “Risk Factors,” beginning on page 19, for a discussion of the risks relating to the proposed merger. You also can obtain information about MB Financial and Taylor Capital from documents that each has filed with the Securities and Exchange Commission.

 
 
 
 
 
 
 
 
 
 
 
Mitchell Feiger
 
Mark A. Hoppe
 
 
President and Chief Executive officer
 
President and Chief Executive Officer
 
 
MB Financial, Inc.
 
Taylor Capital Group, Inc.
 


Neither the Securities and Exchange Commission nor any state securities commission or any bank regulatory agency has approved or disapproved the shares of MB Financial stock to be issued in the merger or passed upon the adequacy or accuracy of this joint proxy statement/prospectus. Any representation to the contrary is a criminal offense.

The securities to be issued in the merger are not savings or deposit accounts or other obligations of any bank or nonbank subsidiary of MB Financial or Taylor Capital, and they are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.

The date of this joint proxy statement/prospectus is _______, 2013, and it is first being mailed or otherwise delivered to the stockholders of MB Financial and Taylor Capital on or about ______, 2013.




MB Financial, Inc.
800 West Madison Street
Chicago, Illinois 60607
(888) 422-6562

Notice of Special Meeting of MB Financial, Inc. Stockholders

Date:    ______, ______, 2013
Time:     __:__ __.m., local time
Place:     MB Financial Center, 6111 North River Road, Rosemont, Illinois 60018

To MB Financial, Inc. Stockholders:

We are pleased to notify you of and invite you to a special meeting of stockholders (which we refer to as the “MB Financial special meeting”). At the MB Financial special meeting, you will be asked to vote on the following matters:
the approval of the Agreement and Plan of Merger, dated as of July 14, 2013, by and between MB Financial and Taylor Capital Group, Inc., pursuant to which Taylor Capital will merge with and into MB Financial, and the approval of the issuance of MB Financial common stock to Taylor Capital stockholders in connection with the merger (which we refer to as the “MB Financial merger proposal”);
a proposal to adjourn the MB Financial special meeting, if necessary or appropriate, to solicit additional proxies in favor of the MB Financial merger proposal (which we refer to as the “MB Financial adjournment proposal”); and
any other business that may properly come before the MB Financial special meeting or any adjournment or postponement of the MB Financial special meeting.
Only holders of record of MB Financial common stock as of the close of business on ______, 2013 are entitled to notice of, and to vote at, the MB Financial special meeting and any adjournments or postponements of the MB Financial special meeting. Approval of the MB Financial merger proposal requires the affirmative vote of holders of a majority of the outstanding shares of MB Financial common stock. The MB Financial adjournment proposal will be approved if a majority of the votes cast on such proposal at the MB Financial special meeting are voted in favor of such proposal.
MB Financial’s board of directors has unanimously approved the merger agreement, has determined that the merger agreement and the transactions contemplated thereby, including the merger, are advisable and in the best interests of MB Financial and its stockholders, and unanimously recommends that MB Financial stockholders vote “FOR” the MB Financial merger proposal and “FOR” the MB Financial adjournment proposal.
Your vote is very important. We cannot complete the merger unless MB Financial’s stockholders approve the MB Financial merger proposal.
To ensure your representation at the MB Financial special meeting, please complete and return the enclosed proxy card or submit your proxy by telephone or via the Internet. Whether or not you expect to attend the MB Financial special meeting in person, please vote promptly. If you hold your shares in street name through a bank, broker or other nominee and wish to vote your shares in person at the MB Financial special meeting, then you must obtain a legal proxy from the holder of record authorizing you to do so by contacting your bank, broker or other nominee.




The enclosed joint proxy statement/prospectus provides a detailed description of the MB Financial special meeting, the merger, the documents related to the merger and other related matters. We urge you to read the joint proxy statement/prospectus, including its appendices, and the documents incorporated in the joint proxy statement/prospectus by reference carefully and in their entirety.
By Order of the Board of Directors




Mitchell Feiger
President and Chief Executive Officer
______, 2013
Chicago, Illinois










Taylor Capital Group, Inc.
9550 West Higgins Road
Rosemont, Illinois 60018
(847) 653-7978

Notice of Special Meeting of Taylor Capital Group, Inc. Stockholders

Date:    ______, _______, 2013
Time:     __:__ _.m., local time
Place:     Taylor Capital Executive Offices – Ninth Floor
9550 West Higgins Road, Rosemont Illinois 60018

To Taylor Capital Group, Inc. Stockholders:

We are pleased to notify you of and invite you to a special meeting of stockholders (which we refer to as the “Taylor Capital special meeting”). At the Taylor Capital special meeting, holders of Taylor Capital common stock will be asked to vote on the following matters:
the adoption of the Agreement and Plan of Merger, dated as of July 14, 2013, by and between MB Financial, Inc. and Taylor Capital, pursuant to which Taylor Capital will merge with and into MB Financial (which we refer to as the “Taylor Capital merger proposal”);
a proposal to adjourn the Taylor Capital special meeting, if necessary or appropriate, to solicit additional proxies in favor of the Taylor Capital merger proposal (which we refer to as the “Taylor Capital adjournment proposal”);
the approval, on an advisory (non-binding) basis, of the compensation of certain executive officers of Taylor Capital in connection with the merger (which we refer to as the “Taylor Capital compensation proposal”); and
any other business that may be properly come before the Taylor Capital special meeting or any adjournment or postponement of the Taylor Capital special meeting.
Only holders of record of Taylor Capital common stock as of the close of business on ______, 2013 are entitled to vote at the Taylor Capital special meeting and any adjournments or postponements of the Taylor Capital special meeting. Holders of Taylor Capital Nonvoting Convertible Preferred Stock, Perpetual Non-Cumulative Preferred Stock, Series A and Fixed Rate Cumulative Perpetual Preferred Stock, Series B, are not entitled to, and are not being requested to, vote at the Taylor Capital special meeting. Approval of the Taylor Capital merger proposal requires the affirmative vote of holders of a majority of the outstanding shares of Taylor Capital common stock. Each of the Taylor Capital adjournment proposal and the Taylor Capital compensation proposal will be approved if a majority of the shares present in person or represented by proxy and entitled to vote on such proposal vote in favor of the proposal.
Taylor Capital’s board of directors has unanimously approved the merger agreement, has determined that the merger agreement and the transactions contemplated thereby, including the merger, are advisable and in the best interests of Taylor Capital and its stockholders, and unanimously recommends that Taylor Capital stockholders vote “FOR” the Taylor Capital merger proposal, “FOR” the Taylor Capital adjournment proposal and “FOR” the Taylor Capital compensation proposal.
Your vote is very important. We cannot complete the merger unless Taylor Capital’s stockholders approve the Taylor Capital merger proposal.




To ensure your representation at the Taylor Capital special meeting, please complete and return the enclosed proxy card or submit your proxy by telephone or via the Internet. Whether or not you expect to attend the Taylor Capital special meeting in person, please vote promptly. If you hold your shares in street name through a bank, broker or other nominee and wish to vote your shares in person at the Taylor Capital special meeting, then you must obtain a legal proxy from the holder of record authorizing you to do so by contacting your bank, broker or other nominee.
The enclosed joint proxy statement/prospectus provides a detailed description of the Taylor Capital special meeting, the merger, the documents related to the merger and other related matters. We urge you to read the joint proxy statement/prospectus, including its appendices, and the documents incorporated in the joint proxy statement/prospectus by reference carefully and in their entirety.
Under Delaware law, holders of Taylor Capital common stock, Nonvoting Convertible Preferred Stock and Fixed Rate Cumulative Perpetual Preferred Stock, Series B (to the extent any shares of such Series B preferred stock have not been repurchased or redeemed by Taylor Capital and remain outstanding immediately prior to the effective time of the merger) who submit a written demand for appraisal of their shares and who perfect their appraisal rights by complying with the other applicable statutory procedures under Delaware law will be entitled to receive a cash payment for the fair value of their shares as determined by the Delaware Chancery Court in lieu of the merger consideration provided for under the merger agreement. A summary of the applicable requirements of Delaware law is contained in the enclosed joint proxy statement/prospectus under “The Merger—Taylor Capital Stockholder Appraisal Rights,” and the text of the applicable provisions of Delaware law is attached to that document as Appendix D.

By Order of the Board of Directors



Brian T. Black
General Counsel and Secretary
______, 2013
Rosemont, Illinois




REFERENCES TO ADDITIONAL INFORMATION

This joint proxy statement/prospectus incorporates important business and financial information about MB Financial and Taylor Capital from documents filed with the Securities and Exchange Commission, or the SEC, that are not included in or delivered with this joint proxy statement/prospectus. You can obtain any of the documents filed with or furnished to the SEC by MB Financial and/or Taylor Capital at no cost from the SEC’s website at http://www.sec.gov. You may also request copies of these documents, including documents incorporated by reference in this joint proxy statement/prospectus, at no cost by contacting the appropriate company:
MB Financial, Inc.
 
Taylor Capital Group, Inc.
6111 North River Road
 
9550 West Higgins Road
Rosemont, Illinois 60018
 
Rosemont, Illinois 60018
Attention: Doria L. Koros,
Vice President and Secretary
   (847) 653-1992
 
Attention: Investor Relations
(847) 653-7978
 
 
 
You will not be charged for any of these documents that you request. To obtain timely delivery of these documents, you must request them no later than five business days before the date of your company’s special meeting. This means that MB Financial stockholders requesting documents must do so by _____, 2013, in order to receive them before the MB Financial special meeting, and Taylor Capital stockholders requesting documents must also do so by _____, 2013, in order to receive them before the Taylor Capital special meeting.

You should rely only on the information contained in, or incorporated by reference into, this document. No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this document. This document is dated _______, 2013, and you should assume that the information in this document is accurate only as of such date. You should assume that the information incorporated by reference into this document is accurate as of the date of the document containing such information. Neither the mailing of this document to MB Financial stockholders or Taylor Capital stockholders nor the issuance by MB Financial of shares of MB Financial stock in connection with the merger will create any implication to the contrary.

Information on the websites of MB Financial or Taylor Capital, or any subsidiary of MB Financial or Taylor Capital, is not part of this document or incorporated by reference herein. You should not rely on that information in deciding how to vote.

This document does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction. Except where the context otherwise indicates, information contained in this document regarding MB Financial has been provided by MB Financial and information contained in this document regarding Taylor Capital has been provided by Taylor Capital.

See “Where You Can Find More Information” for more details.





TABLE OF CONTENTS
 
 
 
 
 
Page

QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETINGS
1

SUMMARY
9

RISK FACTORS
19

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
26

SELECTED HISTORICAL AND PRO FORMA FINANCIAL INFORMATION
28

 
Selected Historical Financial Data of MB Financial and Taylor Capital
28

 
Selected Historical Financial Data of MB Financial
29

 
Selected Historical Financial Data of Taylor Capital
31

 
Selected Unaudited Consolidated Pro Forma Financial Data of MB Financial and Taylor Capital
33

 
Comparative Unaudited Pro Forma Per Share Data
34

THE MB FINANCIAL SPECIAL MEETING
35

 
Date, Time and Place of Meeting
35

 
Matters to Be Considered
35

 
Recommendation of MB Financial’s Board of Directors
35

 
Record Date and Quorum
35

 
Vote Required; Treatment of Abstentions and Failure to Vote
36

 
Shares Held by Directors and Executive Officers; Voting and Support Agreements
36

 
Voting of Proxies; Incomplete Proxies
36

 
Shares Held in Street Name
36

 
Revocability of Proxies and Changes to a MB Financial Stockholder’s Vote
37

 
Solicitation of Proxies
37

 
Attending the MB Financial Special Meeting
37

MB FINANCIAL PROPOSALS
38

 
MB Financial Merger Proposal
38

 
MB Financial Adjournment Proposal
38

THE TAYLOR CAPITAL SPECIAL MEETING
38

 
Date, Time and Place of Meeting
38

 
Matters to Be Considered
39

 
Recommendation of Taylor Capital’s Board of Directors
39

 
Record Date and Quorum
39

 
Vote Required; Treatment of Abstentions and Failure to Vote
39

 
Shares Held by Directors and Executive Officers; Voting and Support Agreements
40

 
Voting of Proxies; Incomplete Proxies
40

 
Shares Held in Street Name
40

 
Revocability of Proxies and Changes to a Taylor Capital Stockholder’s Vote
41

 
Solicitation of Proxies
41

 
Attending the Taylor Capital Special Meeting
41

TAYLOR CAPITAL PROPOSALS
42

 
Taylor Capital Merger Proposal
42

 
Taylor Capital Adjournment Proposal
42


i


 
Taylor Capital Compensation Proposal
42

THE MERGER
44

 
Background of the Merger
44

 
MB Financial’s Reasons for the Merger; Recommendation of MB Financial’s Board of Directors
50

 
Taylor Capital’s Reasons for the Merger; Recommendation of Taylor Capital’s Board of Directors
52

 
Opinion of J.P. Morgan Securities LLC —Financial Advisor to MB Financial
55

 
Opinion of Sandler O’Neill & Partners, L.P. – Financial Advisor to Taylor Capital
61

 
MB Financial Board of Directors Following Completion of the Merger
75

 
Interests of Taylor Capital’s Directors and Executive Officers in the Merger
75

 
Regulatory Approvals
86

 
Accounting Treatment
87

 
Taylor Capital Stockholder Appraisal Rights
87

 
Amendment to MB Financial’s Charter
90

 
MB Financial’s Dividend Policy
90

 
Public Trading Markets
91

 
Litigation Relating to the Merger
91

THE MERGER AGREEMENT
92

 
Structure of the Merger
92

 
Merger Consideration
92

 
Treatment of Taylor Capital Stock Options, Warrants and Restricted Stock Awards
93

 
Possible Sale of Taylor Capital’s Mortgage Banking Business
94

 
Closing and Effective Time of the Merger
95

 
Conversion of Shares; Exchange Procedures
95

 
Representations and Warranties
96

 
Covenants and Agreements
99

 
Stockholder Meetings and Recommendation of MB Financial’s and Taylor Capital’s Boards of Directors
104

 
Agreement Not to Solicit Other Offers
105

 
Conditions to Complete the Merger
106

 
Termination of the Merger Agreement
107

 
Effect of Termination
108

 
Termination Fees
108

 
Expenses and Fees
109

 
Amendment, Waiver and Extension of the Merger Agreement
109

 
Voting and Support Agreements
110

UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL INFORMATION
111

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
120

 
Tax Consequences of the Merger Generally
121

 
Taxation of Capital Gain
122

 
Potential Recharacterization of Gain as a Dividend
122

 
Receipt of Only Cash Consideration Upon Exercise of Appraisal Rights and Cash Received Instead of a Fractional Share of MB Financial Common Stock
123

 
Medicare Tax on Unearned Income
123


ii


 
Backup Withholding and Information Reporting
123

INFORMATION ABOUT MB FINANCIAL AND TAYLOR CAPITAL
124

 
MB Financial
124

 
Taylor Capital
124

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF MB FINANCIAL
125

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF TAYLOR CAPITAL
128

 
Beneficial Ownership of Taylor Capital Common Stock
128

 
Beneficial Ownership of Taylor Capital Series A Preferred Stock
132

 
Beneficial Ownership of Taylor Capital Nonvoting Preferred Stock
132

 
Beneficial Ownership of Taylor Capital Series B Preferred Stock
132

COMPARATIVE MARKET PRICES OF AND DIVIDENDS ON COMMON STOCK
133

DESCRIPTION OF MB FINANCIAL’S CAPITAL STOCK
134

 
General
134

 
Common Stock
134

 
Preferred and Other Stock - General
134

 
New MB Financial Preferred Stock
135

 
Other Anti-Takeover Provisions
145

COMPARISON OF STOCKHOLDER RIGHTS
146

LEGAL MATTERS
156

EXPERTS
156

FUTURE STOCKHOLDER PROPOSALS
156

 
MB Financial
156

 
Taylor Capital
156

WHERE YOU CAN FIND MORE INFORMATION
157

APPENDICES
 
A
Agreement and Plan of Merger, dated as of July 14, 2013, by and between MB Financial, Inc. and Taylor Capital Group, Inc.
 
B
Opinion of J.P. Morgan Securities LLC
 
C
Opinion of Sandler O’Neill & Partners, L.P.
 
D
Section 262 of Delaware General Corporation Law
 



iii


QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETINGS
The following are some questions that you may have about the merger and the special meetings, and brief answers to those questions. We urge you to read carefully the remainder of this joint proxy statement/prospectus because the information in this section does not provide all of the information that might be important to you with respect to the merger and the special meetings. Additional important information is contained in the documents incorporated by reference into this joint proxy statement/prospectus. See “Where You Can Find More Information.”
Unless the context otherwise requires, throughout this document, “MB Financial” refers to MB Financial, Inc., “Taylor Capital” refers to Taylor Capital Group, Inc. and “we,” “us” and “our” refers collectively to MB Financial and Taylor Capital.
Q:
What is the merger?
 
 
A:
MB Financial and Taylor Capital have entered into an Agreement and Plan of Merger, dated as of July 14, 2013 (which we refer to as the “merger agreement”), pursuant to which Taylor Capital will be merged with and into MB Financial, with MB Financial continuing as the surviving corporation (we refer to this transaction as the “merger”). Immediately following the merger, Taylor Capital’s wholly-owned subsidiary bank, Cole Taylor Bank, will merge with MB Financial’s wholly-owned subsidiary bank, MB Financial Bank, N.A. (we refer to this transaction as the “bank merger”). A copy of the merger agreement is attached to this joint proxy statement/prospectus as Appendix A.
 
 
Q:
Why am I receiving this joint proxy statement/prospectus?
 
 
A:
We are delivering this document to you because it is a joint proxy statement being used by both the MB Financial and Taylor Capital boards of directors to solicit proxies of their respective common stockholders in connection with approval of the merger and related matters. This document is also a prospectus that is being delivered to Taylor Capital stockholders because MB Financial is offering shares of its stock to Taylor Capital stockholders in connection with the merger.

The merger cannot be completed unless the common stockholders of MB Financial approve the merger agreement and the issuance of MB Financial stock in the merger (which we refer to as the “MB Financial merger proposal”) and the common stockholders of Taylor Capital adopt the merger agreement (which we refer to as the “Taylor Capital merger proposal”).
 
 
Q:
In addition to the MB Financial merger proposal, what else are MB Financial stockholders being asked to vote on?
 
 
A:
In addition to the MB Financial merger proposal, MB Financial is soliciting proxies from holders of its common stock with respect to a proposal to adjourn the MB Financial special meeting, if necessary or appropriate, to solicit additional proxies in favor of the MB Financial merger proposal (which we refer to as the “MB Financial adjournment proposal”). Completion of the merger is not conditioned upon approval of the MB Financial adjournment proposal.
 
 

1


Q:
In addition to the Taylor Capital merger proposal, what else are Taylor Capital stockholders being asked to vote on?
 
 
A:
In addition to the Taylor Capital merger proposal, Taylor Capital is soliciting proxies from holders of its common stock with respect to two additional proposals:
 
a proposal to adjourn the Taylor Capital special meeting, if necessary or appropriate, to solicit additional proxies in favor of the Taylor Capital merger proposal (which we refer to as the “Taylor Capital adjournment proposal”); and

a proposal to approve, on an advisory (non-binding) basis, the compensation that certain executive officers of Taylor Capital may receive in connection with the merger (which we refer to as the “Taylor Capital compensation proposal”).

Completion of the merger is not conditioned upon approval of either of these additional proposals.
 
 
Q:
What will Taylor Capital stockholders receive in the merger?
 
 
A:
Each outstanding share of Taylor Capital common stock and Taylor Capital Nonvoting Convertible Preferred Stock (which we refer to as “Taylor Capital nonvoting preferred stock”) will be converted into the right to receive, promptly following the completion of the merger, (1) 0.64318 shares of MB Financial common stock and (2) $4.08 in cash. MB Financial will not issue any fractional shares of MB Financial common stock in the merger. Taylor Capital stockholders who would otherwise be entitled to a fractional share of MB Financial common stock upon completion of the merger will instead receive an amount in cash equal to the fractional share interest multiplied by the average closing sale price per share of MB Financial common stock for the ten trading days ending on the trading day immediately preceding the day on which the merger is completed (which we refer to as the “Average MB Financial common stock price”).

Although the number of shares of MB Financial common stock that holders of Taylor Capital common stock and nonvoting preferred stock will receive is fixed, the market value of the stock portion of the merger consideration payable to those stockholders will fluctuate with the market price of MB Financial common stock and will not be known at the time Taylor Capital stockholders vote on the merger agreement.

We refer to the consideration described above as the “base merger consideration.” The merger agreement provides for the possibility of the payment of additional cash merger consideration to holders of Taylor Capital common stock and nonvoting preferred stock if and to the extent that the “gain,” which is defined in the merger agreement as 60% of the pre-tax gain, from a sale of Taylor Capital’s mortgage banking business exceeds $57.0 million. We refer to this consideration as “additional merger consideration” and any “gain” in excess of $57.0 million as “excess gain.” As discussed under “The Merger Agreement—Possible Sale of Taylor Capital’s Mortgage Banking Business,” in order for any additional merger consideration to become payable, definitive transaction documents for the sale of the mortgage banking business meeting the criteria set forth in Exhibit D to the merger agreement and approved by MB Financial must be entered into by December 31, 2013 and the sale transaction must be consummated by July 31, 2014. MB Financial has the right to elect to retain the mortgage banking business and not approve a sale transaction that meets the criteria set forth in Exhibit D to the merger agreement, in which case it must pay as additional merger consideration any excess gain that otherwise would have resulted from such sale. Based on existing market conditions in the mortgage banking industry, MB Financial and Taylor Capital currently believe it is unlikely that any additional merger consideration will become payable to holders of Taylor Capital common stock and nonvoting preferred stock.

Each outstanding share of Taylor Capital’s Perpetual Non-Cumulative Preferred Stock, Series A (which we refer to as “Taylor Capital Series A preferred stock”), will automatically be converted into the right to receive a share of a series of MB Financial preferred stock with substantially identical terms. Any shares of Taylor Capital’s Fixed Rate Cumulative Perpetual Preferred Stock, Series B (which we refer to as “Taylor Capital Series B preferred stock”), that are not repurchased or redeemed by Taylor Capital prior to the merger will automatically be converted into the right to receive shares of a series of MB Financial preferred stock with substantially identical terms and repurchased or redeemed by MB Financial at the time of or promptly after the merger.
 
 

2


Q:
What will MB Financial stockholders receive in the merger?
 
 
A:
MB Financial stockholders will not receive anything in the merger for their shares. If you are an MB Financial stockholder, each share of MB Financial common stock that you hold before the merger will continue to represent one share of MB Financial common stock after the merger.
 
 
Q:
How will the merger affect outstanding Taylor Capital stock options, warrants and restricted stock awards?
 
 
A:
The outstanding Taylor Capital stock options, warrants and restricted stock awards will be affected as follows:
Stock Options and Warrants. Each Taylor Capital stock option and warrant with an exercise price per share that is less than the base merger consideration value (as defined below) and is outstanding immediately prior to the merger will be canceled and entitle its holder to receive a cash payment as soon as reasonably practicable following the merger equal to: (i) the excess, if any, of (A) the sum of (1) $4.08 and (2) the product of 0.64318 and the Average MB Financial common stock price (we refer to the sum of (1) and (2) as the “base merger consideration value”) over (B) the exercise price per share of the Taylor Capital stock option or warrant, multiplied by (ii) the number of shares of Taylor Capital common stock subject to such Taylor Capital stock option or warrant. In addition, if any additional merger consideration is payable to Taylor Capital stockholders as a result of a sale of Taylor Capital’s mortgage banking business, a holder of a Taylor Capital stock option or warrant with an exercise price per share that is less than the aggregate of the base merger consideration value and such holder’s proportionate share of the additional merger consideration will receive a cash payment equal to such portion of additional merger consideration in excess of the exercise price multiplied by the number of shares of Taylor Capital common stock subject to such Taylor Capital stock option or warrant. All Taylor Capital stock options and warrants with an exercise price per share equal to or greater than the base merger consideration value will, at the time of the merger or immediately prior to the merger, be cancelled and terminated, subject to any rights of the holders of those stock options and warrants to receive any additional merger consideration as described above.
Restricted Stock Awards.  Each Taylor Capital restricted stock award that is unvested and outstanding immediately prior to the merger will be converted into the right to receive a cash payment in the amount of the base merger consideration value multiplied by the number of shares of Taylor Capital common stock subject to such award, payable by MB Financial as and when such award vests in accordance with its vesting schedule. In addition, if any additional merger consideration is payable to Taylor Capital stockholders as a result of a sale of Taylor Capital’s mortgage banking business, the holder of such award will be entitled to an additional cash payment in the amount of his or her proportionate share of the additional merger consideration, subject to the vesting of such award in accordance with its vesting schedule.
 
 
Q:
How does MB Financial’s board of directors recommend that I vote at the MB Financial special meeting if I am a holder of MB Financial common stock?
 
 
A:
MB Financial’s board of directors unanimously recommends that you vote “FOR” the MB Financial merger proposal and “FOR” the MB Financial adjournment proposal.
 
 
Q:
How does Taylor Capital’s board of directors recommend that I vote at the Taylor Capital special meeting if I am a holder of Taylor Capital common stock?
 
 
A:
Taylor Capital’s board of directors unanimously recommends that you vote “FOR” the Taylor Capital merger proposal, “FOR” the Taylor Capital adjournment proposal and “FOR” the Taylor Capital compensation proposal.
 
 

3


Q:
Have MB Financial’s and Taylor Capital’s directors and executive officers entered into voting agreements with respect to the merger proposals?
 
 
A:
The directors and executive officers of MB Financial have agreed to vote their shares of MB Financial common stock for the MB Financial merger proposal, and certain of the directors of Taylor Capital have agreed to vote their shares of Taylor Capital common stock for the Taylor Capital merger proposal. See “The Merger Agreement—Voting and Support Agreements.”
 
 
Q:
When and where are the special meetings?
 
 
A:
The MB Financial special meeting will be held at MB Financial Center, 6111 North River Road, Rosemont, Illinois 60018 on ___________, 2013, at __:__ _.m. local time.

The Taylor Capital special meeting will be held on the ninth floor of Taylor Capital’s executive offices at 9550 West Higgins Road, Rosemont Illinois 60018 on _______, 2013, at __:__ _.m. local time.
 
 
Q:
What do I need to do now?
 
 
A:
After you have carefully read this joint proxy statement/prospectus and have decided how you wish to vote your shares, please vote your shares promptly so that your shares are represented and voted at your company’s special meeting, as applicable. If you hold your shares in your name as a stockholder of record, you must complete, sign, date and mail your proxy card in the enclosed postage-paid return envelope as soon as possible. Alternatively, you may vote through the Internet or by telephone. Information and applicable deadlines for voting through the Internet or by telephone are set forth in the enclosed proxy card instructions. If you hold your shares in “street name” through a bank or broker, you must direct your bank or broker how to vote in accordance with the instructions you have received from your bank or broker.
 
 
Q:
What constitutes a quorum for the MB Financial special meeting?
 
 
A:
The presence at the MB Financial special meeting, in person or by proxy, of holders of a majority of the outstanding shares of MB Financial common stock entitled to vote at the special meeting will constitute a quorum for the transaction of business. Abstentions will be included in determining the number of shares present at the meeting for the purpose of determining the presence of a quorum.
 
 
Q:
What constitutes a quorum for the Taylor Capital special meeting?
 
 
A:
The presence at the Taylor Capital special meeting, in person or by proxy, of holders of at least 35% of the outstanding shares of Taylor Capital common stock entitled to vote at the special meeting will constitute a quorum for the transaction of business. Abstentions will be included in determining the number of shares present at the meeting for the purpose of determining the presence of a quorum.
 
 

4


Q:
If my shares are held in “street name” through a bank, broker or other nominee, will my bank, broker or other nominee vote my shares for me?
 
 
A:
If your shares are held in “street name” through a bank, broker or other nominee, you must provide your bank, broker or other nominee with instructions on how to vote your shares. Please follow the voting instruction form provided by your bank, broker, bank or other nominee.

Under stock exchange rules, brokers who hold shares in street name for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, brokers are not allowed to exercise their voting discretion with respect to the approval of matters that are determined under exchange rules to be “non-routine” without specific instructions from the beneficial owner. It is expected that all proposals to be voted on at the MB Financial and Taylor Capital special meetings will be considered “non-routine” matters. The effects of failing to instruct your bank, broker or other nominee how to vote your shares of MB Financial or Taylor Capital common stock on each of the proposals to be considered at the MB Financial and Taylor Capital special meetings are described below.
 
 
Q:
What is the vote required to approve each proposal at the MB Financial special meeting?
 
 
A:
MB Financial merger proposal:  Approval of the MB Financial merger proposal requires the affirmative vote of the holders of a majority of the outstanding shares of MB Financial common stock entitled to vote on the proposal. If you fail to vote, mark “ABSTAIN” on your proxy or fail to instruct your bank or broker with respect to the MB Financial merger proposal, it will have the same effect as a vote “AGAINST” the proposal.

MB Financial adjournment proposal:  The MB Financial adjournment proposal will be approved if a majority of the votes cast at the MB Financial special meeting are voted in favor of such proposal. If you fail to vote, mark “ABSTAIN” on your proxy or fail to instruct your bank or broker with respect to the MB Financial adjournment proposal, it will have no effect on such proposal.
 
 
Q:
What is the vote required to approve each proposal at the Taylor Capital special meeting?
 
 
A:
Taylor Capital merger proposal:  Approval of the Taylor Capital merger proposal requires the affirmative vote of the holders of a majority of the outstanding shares of Taylor Capital common stock entitled to vote on the proposal. If you fail to vote, mark “ABSTAIN” on your proxy or fail to instruct your bank or broker with respect to the Taylor Capital merger proposal, it will have the same effect as a vote “AGAINST” the proposal.
Taylor Capital adjournment proposal: The Taylor Capital adjournment proposal will be approved if a majority of the shares present in person or represented by proxy and entitled to vote on the proposal vote in favor of the proposal. If you mark “ABSTAIN” on your proxy it will have the same effect as a vote “AGAINST” the Taylor Capital adjournment proposal. If you fail to vote or fail to instruct your bank or broker with respect to the Taylor Capital adjournment proposal, it will have no effect on such proposal.
Taylor Capital compensation proposal:  The Taylor Capital compensation proposal will be approved if a majority of the shares present in person or represented by proxy and entitled to vote on the proposal vote in favor of the proposal. If you mark “ABSTAIN” on your proxy it will have the same effect as a vote “AGAINST” the Taylor Capital compensation proposal. If you fail to vote or fail to instruct your bank or broker with respect to the Taylor Capital merger proposal, it will have no effect on such proposal.
 
 
Q:
What impact will my vote have on the amounts that certain executive officers of Taylor Capital may receive in connection with the merger?
 
 
A:
Certain of Taylor Capital’s executive officers are entitled, pursuant to the terms of their existing compensation arrangements, to receive certain payments in connection with the merger. If the merger is completed, Taylor Capital is contractually obligated to make these payments to these executives under certain circumstances. Accordingly, even if the Taylor Capital stockholders vote not to approve these payments, the compensation will be payable, subject to the terms and conditions of the arrangements. Taylor Capital is seeking your approval of these payments, on an advisory (non-binding) basis, in order to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and related SEC rules.

5


 
 
Q:
Why is my vote important?
 
 
A:
If you do not vote by proxy or in person at your company’s special meeting, it will be more difficult for your company to obtain the necessary quorum to hold its special meeting. In addition, your failure to submit a proxy or vote in person, or failure to instruct your bank or broker how to vote, or abstention will have the same effect as a vote “AGAINST” the merger proposal for your company’s special meeting. The merger agreement must be approved by the affirmative vote of the holders of a majority of the outstanding shares of MB Financial common stock entitled to vote at the MB Financial special meeting and adopted by the affirmative vote of the holders of a majority of the outstanding shares of Taylor Capital stock entitled to vote at the Taylor Capital special meeting.
 
 
Q:
Can I attend my company’s special meeting and vote my shares in person?
 
 
A:
Yes. All common stockholders of MB Financial and all common stockholders of Taylor Capital, including stockholders of record and stockholders who hold their shares through banks, brokers, nominees or any other holder of record, are invited to attend their respective special meetings. Holders of record of MB Financial and Taylor Capital common stock can vote in person at the MB Financial special meeting and Taylor Capital special meeting, respectively. If you wish to vote in person at your company’s special meeting and if you are a stockholder of record, you should bring the enclosed proxy card and proof of identity. If you hold your shares in street name through a broker, or beneficially own your shares through another holder of record, you will need to bring with you and provide to the inspectors of election proof of identity and a letter from your bank, broker, nominee or other holder of record confirming your beneficial ownership of common stock as of the record date and authorization for you to vote such shares at your company’s special meeting (a “legal proxy” from your holder of record). At the appropriate time during your company’s special meeting, the stockholders present will be asked whether anyone wishes to vote in person. You should raise your hand at this time to receive a ballot to record your vote. Everyone who attends a special meeting must abide by any rules for the conduct of the meeting distributed at the meeting.
 
 
Q:
Can I change my vote?
 
 
A:
MB Financial stockholders:    Yes. If you are a holder of record of MB Financial common stock, you may revoke your proxy at any time before it is voted by (1) signing and returning a proxy card with a later date, (2) delivering a written revocation to MB Financial’s corporate secretary, (3) attending the MB Financial special meeting in person and voting by ballot at the special meeting, or (4) voting by telephone or the Internet at a later time (but prior to the stated deadline to vote by such methods). Attendance at the MB Financial special meeting will not automatically revoke your proxy. A revocation or later-dated proxy received by MB Financial after the vote will not affect the vote. MB Financial’s corporate secretary’s mailing address is: Corporate Secretary, MB Financial, Inc., 6111 North River Road, Rosemont, Illinois 60018. If you hold your shares in “street name” through a bank, broker or other nominee, you should contact your bank or broker to revoke your proxy.
 
 
 
Taylor Capital stockholders:    Yes. If you are a holder of record of Taylor Capital common stock, you may revoke your proxy at any time before it is voted by (1) signing and returning a proxy card with a later date, (2) delivering a written revocation to Taylor Capital’s corporate secretary, (3) attending the Taylor Capital special meeting in person and voting by ballot at the special meeting, or (4) voting by telephone or the Internet at a later time (but prior to the stated deadline to vote by such methods). Attendance at the Taylor Capital special meeting by itself will not automatically revoke your proxy. A revocation or later-dated proxy received by Taylor Capital after the vote will not affect the vote. Taylor Capital’s corporate secretary’s mailing address is: Corporate Secretary, Taylor Capital Group, Inc., 9550 West Higgins Road, Rosemont Illinois 60018. If you hold your shares in “street name” through a bank, broker or other nominee, you should contact your bank or broker to revoke your proxy.
 
 

6


Q:
Will MB Financial be required to submit the proposal to approve the merger agreement to its stockholders even if MB Financial’s board of directors has withdrawn, modified or qualified its recommendation?
 
 
A:
Yes. Unless the merger agreement is terminated before the MB Financial special meeting, MB Financial is required to submit the proposal to approve the merger agreement to its stockholders even if MB Financial’s board of directors has withdrawn or modified its recommendation.
 
 
Q:
Will Taylor Capital be required to submit the proposal to adopt the merger agreement to its stockholders even if Taylor Capital’s board of directors has withdrawn, modified or qualified its recommendation?
 
 
A:
Yes. Unless the merger agreement is terminated before the Taylor Capital special meeting, Taylor Capital is required to submit the proposal to adopt the merger agreement to its stockholders even if Taylor Capital’s board of directors has withdrawn or modified its recommendation.
 
 
Q:
What are the material U.S. Federal income tax consequences of the merger to holders of Taylor Capital common stock?
 
 
A:
The merger is intended to qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code. Assuming the merger qualifies as a reorganization, a U.S. holder of Taylor Capital common stock generally will not recognize any gain or loss upon receipt of MB Financial common stock in exchange for Taylor Capital common stock in the merger, and will recognize gain (but not loss) in an amount not to exceed any cash received as part of the merger consideration (except with respect to any cash received upon exercise of appraisal rights under Delaware law and in lieu of a fractional share of MB Financial common stock, as discussed below under “Material United States Federal Income Tax Consequences of the Merger—Receipt of Only Cash Consideration Upon Exercise of Appraisal Rights and Cash Received Instead of a Fractional Share of MB Financial Common Stock”). It is a condition to the completion of the merger that MB Financial and Taylor Capital receive written opinions from their respective counsel to the effect that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code.
 
 
Q:
Are Taylor Capital stockholders entitled to appraisal rights?
 
 
A:
Under Delaware law, any holder of Taylor Capital common stock, Taylor Capital nonvoting preferred stock or Taylor Capital Series B preferred stock (to the extent any shares of Taylor Capital Series B preferred stock have not been repurchased or redeemed by Taylor Capital and remain outstanding immediately prior to the effective time of the merger) may elect to have the value of his or her shares appraised and paid in cash instead of receiving the consideration issuable to him or her pursuant to the merger agreement. For further information, see “The Merger—Taylor Capital Stockholder Appraisal Rights.” Under Delaware law, holders of Taylor Capital Series A preferred stock are not entitled to appraisal rights in connection with the merger.
 
 
Q:
Are MB Financial stockholders entitled to appraisal rights?
 
 
A:
Under Maryland law, MB Financial stockholders are not entitled to appraisal rights in connection with the merger.
 
 
Q:
If I am a holder of Taylor Capital stock in certificated form, should I send in my Taylor Capital stock certificates now?
 
 
A:
No. Please do not send in your Taylor Capital stock certificates with your proxy. After the merger, an exchange agent will send you instructions for exchanging Taylor Capital stock certificates for the merger consideration. See “The Merger Agreement-Conversion of Shares; Exchange of Certificates.”
 
 

7


Q:
What should I do if I hold my shares of Taylor Capital stock in book-entry form?
 
 
A:
You are not required to take any special additional actions if your shares of Taylor Capital stock are held in book-entry form. After the completion of the merger, an exchange agent will send you instructions for exchanging your shares for the merger consideration. See “The Merger Agreement-Conversion of Shares; Exchange of Certificates.”
 
 
Q:
Whom may I contact if I cannot locate my Taylor Capital stock certificate(s)?
 
 
A:
If you are unable to locate your original Taylor Capital stock certificate(s), you should contact Computershare Trust Company, Taylor Capital’s transfer agent, at (877) 269-2330.
 
 
Q:
What should I do if I receive more than one set of voting materials?
 
 
A:
MB Financial stockholders and Taylor Capital stockholders may receive more than one set of voting materials, including multiple copies of this joint proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold shares of MB Financial and/or Taylor Capital common stock in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold such shares. If you are a holder of record of MB Financial common stock or Taylor Capital common stock and your shares are registered in more than one name, you will receive more than one proxy card. In addition, if you are a holder of both MB Financial common stock and Taylor Capital common stock, you will receive one or more separate proxy cards or voting instruction cards for each company. Please complete, sign, date and return each proxy card and voting instruction card that you receive or otherwise follow the voting instructions set forth in this joint proxy statement/prospectus to ensure that you vote every share of MB Financial common stock and/or Taylor Capital common stock that you own.
 
 
Q:
When do you expect to complete the merger?
 
 
A:
MB Financial and Taylor Capital expect to complete the merger in the first half of 2014. However, neither MB Financial nor Taylor Capital can assure you of when or if the merger will be completed. MB Financial and Taylor Capital must first obtain the approval of MB Financial stockholders and Taylor Capital stockholders for the merger, as well as obtain necessary regulatory approvals and satisfy certain other closing conditions.
 
 
Q:
What happens if the merger is not completed?
 
 
A:
If the merger is not completed, holders of Taylor Capital stock will not receive any consideration for their shares in connection with the merger. Instead, Taylor Capital will remain an independent public company and its common stock and Series A preferred stock will continue to be listed and traded on the NASDAQ Global Select Market. In addition, if the merger agreement is terminated in certain circumstances, a termination fee may be required to be paid by either MB Financial or Taylor Capital to the other party. See “The Merger Agreement—Termination Fees” beginning on page 107 for a complete discussion of the circumstances under which termination fees will be required to be paid.
 
 
Q:
Whom should I call with questions?
 
 
A:
MB Financial stockholders:    If you have any questions concerning the merger or this joint proxy statement/prospectus or would like additional copies of this joint proxy statement/prospectus, please contact Doria Koros, Vice President and Secretary, at (847) 653-1992.

Taylor Capital stockholders:    If you have any questions concerning the merger or this joint proxy statement/prospectus or would like additional copies of this joint proxy statement/prospectus, please contact Taylor Capital’s Office of the Corporate Secretary, at (847) 653-7978.



8


 
 
 
 
SUMMARY
 
 
This summary highlights selected information from this joint proxy statement/prospectus and may not contain all of the information that is important to you. You should carefully read this entire document, including the appendices, and the other documents to which this document refers to fully understand the merger and the related transactions. A list of the documents incorporated by reference appears on page 156 under “Where You Can Find More Information.”
 
 
The Merger and the Merger Agreement (page 92)
 
 
 
 
 
The terms and conditions of the merger are contained in the merger agreement, which is attached to this joint proxy statement/prospectus as Appendix A. We encourage you to read the merger agreement carefully, as it is the legal document that governs the merger.
 
 
 
 
 
Under the terms of the merger agreement, Taylor Capital will merge with and into MB Financial, with MB Financial as the surviving corporation (we refer to this transaction as the “merger”). Immediately following the merger, Taylor Capital’s wholly-owned subsidiary bank, Cole Taylor Bank, will merge with MB Financial’s wholly-owned subsidiary bank, MB Financial Bank, N.A. (we refer to this transaction as the “bank merger”).
 
 
 
 
 
Holders of Taylor Capital Common Stock and Taylor Capital Nonvoting Preferred Stock Will Receive Shares of MB Financial Common Stock and Cash (page 92)
 
 
 
 
 
If the merger is completed, each outstanding share of Taylor Capital common stock and Taylor Capital Nonvoting Convertible Preferred Stock (which we refer to as “Taylor Capital nonvoting preferred stock”) will be converted into the right to receive, promptly following the completion of the merger, (1) 0.64318 shares of MB Financial common stock and (2) $4.08 in cash. MB Financial will not issue any fractional shares of MB Financial common stock in the merger. Taylor Capital stockholders who would otherwise be entitled to a fractional share of MB Financial common stock upon completion of the merger will instead receive an amount in cash equal to the fractional share interest multiplied by the average closing sale price per share of MB Financial common stock for the ten trading days ending on the trading day immediately prior to the date on which the merger is completed (which we refer to as the “Average MB Financial common stock price”). For example, if you hold 1,000 shares of Taylor Capital common stock, then for the stock portion of the merger consideration, you will receive 643 shares of MB Financial common stock and a cash payment instead of the 0.18 fractional share of MB Financial common stock that you otherwise would have received (1,000 shares × 0.64318 = 643.18 shares), and for the cash portion of the merger consideration, you will receive a cash payment of $4,080 (1,000 x $4.08).
 
 
 
 
 
We refer to the consideration described above as the “base merger consideration.” The merger agreement provides for the possibility of the payment of additional cash merger consideration to holders of Taylor Capital common stock and nonvoting preferred stock if and to the extent that the “gain,” which is defined in the merger agreement as 60% of the pre-tax gain, from a sale of Taylor Capital’s mortgage banking business exceeds $57.0 million. We refer to this consideration as “additional merger consideration” and any “gain” in excess of $57.0 million as “excess gain.” As discussed under “The Merger Agreement-Possible Sale of Taylor Capital’s Mortgage Banking Business,” in order for any additional merger consideration to become payable, definitive transaction documents for the sale of the mortgage banking business meeting the criteria set forth in Exhibit D to the merger agreement and approved by MB Financial must be entered into by December 31, 2013 and the sale transaction must be consummated by July 31, 2014. MB Financial has the right to elect to retain the mortgage banking business and not approve a sale transaction that meets the criteria set forth in Exhibit D to the merger agreement, in which case it must pay as additional merger consideration any excess gain that otherwise would have resulted from such sale. Based on existing market conditions in the mortgage banking industry, MB Financial and Taylor Capital currently believe it is unlikely that any additional merger consideration will become payable to holders of Taylor Capital common stock and nonvoting preferred stock.
 
 
 
 

9


 
MB Financial common stock is listed on the NASDAQ Global Select Market under the symbol “MBFI,” and Taylor Capital common stock is listed on the NASDAQ Global Select Market under the symbol “TAYC.” The following table shows the closing sale prices of MB Financial common stock and Taylor Capital common stock as reported on the NASDAQ Global Select Market on July 12, 2013, the last full trading day before the public announcement of the merger agreement, and on ____, 2013, the last practicable trading day before the printing of this joint proxy statement/prospectus. This table also shows the implied value of the base merger consideration payable for each share of Taylor Capital common stock and nonvoting preferred stock, calculated by multiplying the closing price of MB Financial common stock on those dates by the exchange ratio of 0.64318 for the stock portion of the base merger consideration, and adding to that amount $4.08 for the cash portion of the base merger consideration. The implied value excludes the value of any additional merger consideration that may become payable as a result of a sale of Taylor Capital’s mortgage banking business, as described above.
 
 
 
 
 
 
 
 
 
 
 
Date
  
MB Financial
Closing Price
  
Taylor Capital
Closing Price
  
Equivalent
Taylor Capital
Per Share Value
 
 
July 12, 2013
  
$28.17
  
$17.81
  
$22.20
 
 
______, 2013
  
$
  
$
  
$
 
 
 
 
 
 
 
 
 
 
 
Holders of Taylor Capital Series A Preferred Stock and, if Not Repurchased or Redeemed in its Entirety Prior to the Completion of the Merger, Taylor Capital Series B Preferred Stock, Will Receive Shares of MB Financial Preferred Stock with Substantially Identical Terms (page 93)

Each outstanding share of Taylor Capital’s Perpetual Non-Cumulative Preferred Stock, Series A (which we refer to as “Taylor Capital Series A preferred stock”), will automatically be converted into the right to receive a share of a series of MB Financial preferred stock with substantially identical terms. Any shares of Taylor Capital’s Fixed Rate Cumulative Perpetual Preferred Stock, Series B (which we refer to as “Taylor Capital Series B preferred stock”), that are not repurchased or redeemed by Taylor Capital prior to the merger will automatically be converted into the right to receive shares of a series of MB Financial preferred stock with substantially identical terms and repurchased or redeemed by MB Financial at the time of or promptly after the merger.
MB Financial Will Hold Its Special Meeting on ________, 2013 (page 35)
The special meeting of MB Financial stockholders will be held on _______ __, 2013, at __:__ _.m. local time, at MB Financial Center, 6111 North River Road, Rosemont, Illinois 60018. At the MB Financial special meeting, MB Financial stockholders will be asked to:
 
 
 
 
 
 
Ÿ
approve the merger agreement and the issuance of MB Financial common stock in connection with the merger (which we refer to as the “MB Financial merger proposal”); and
 
 
Ÿ
approve a proposal to adjourn the MB Financial special meeting, if necessary or appropriate, to solicit additional proxies in favor of the MB Financial merger proposal (which we refer to as the “MB Financial adjournment proposal”).
 
 
 
 
 
 
 
 
 
 
 
Only holders of record of MB Financial common stock at the close of business on _____, 2013 will be entitled to vote at the MB Financial special meeting. Each share of MB Financial common stock is entitled to one vote on each proposal to be considered at the MB Financial special meeting, provided that under MB Financial’s charter, no beneficial owner of more than 14.9% of the outstanding shares of MB Financial common stock may vote shares in excess of this limit. As of the record date, there were _________ shares of MB Financial common stock entitled to vote at the MB Financial special meeting. As of the record date, the directors and executive officers of MB Financial and their affiliates beneficially owned and were entitled to vote approximately ________ shares of MB Financial common stock representing approximately __% of the shares of MB Financial common stock outstanding on that date. Concurrent with the execution of the merger agreement, each of the directors and executive officers of MB Financial entered into a voting and support agreement with Taylor Capital under which he or she generally has agreed (1) to vote or cause to be voted in favor of the MB Financial merger proposal all shares of MB Financial common stock over which he or she or a member of his or her immediate family has, directly or indirectly, sole or shared voting power as of the record date for the MB Financial special meeting and (2) subject to limited exceptions, not to sell or otherwise dispose of shares of MB Financial common stock representing more than 25% of the shares of MB Financial common stock he or she beneficially owned as of the date of such voting and support agreement until after the approval of the MB Financial merger proposal by the stockholders of MB Financial. For additional information regarding the voting and support agreements, see “The Merger Agreement—Voting and Support Agreements.”
 
 
 
 
 
 
 
 
 
 

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To approve the MB Financial merger proposal, a majority of the shares of MB Financial common stock outstanding and entitled to vote thereon must be voted in favor of such proposal. The MB Financial adjournment proposal will be approved if a majority of the votes cast at the MB Financial special meeting are voted in favor of such proposal. If you mark “ABSTAIN” on your proxy, fail to submit a proxy or vote in person at the MB Financial special meeting or fail to instruct your bank or broker how to vote with respect to the MB Financial merger proposal, it will have the same effect as a vote “AGAINST” the MB Financial merger proposal. If you mark “ABSTAIN” on your proxy, fail to submit a proxy or vote in person at the MB Financial special meeting or fail to instruct your bank or broker how to vote with respect to the MB Financial adjournment proposal, it will have no effect on such proposal.

MB Financial’s Board of Directors Unanimously Recommends that MB Financial Stockholders Vote “FOR” the Approval of the MB Financial Merger Proposal and the MB Financial Adjournment Proposal (page 50)
MB Financial’s board of directors has determined that the merger, the merger agreement and the transactions contemplated by the merger agreement are advisable and in the best interests of MB Financial and its stockholders and has unanimously approved the merger agreement. MB Financial’s board of directors unanimously recommends that MB Financial stockholders vote “FOR” the MB Financial merger proposal and “FOR” the MB Financial adjournment proposal. For the factors considered by MB Financial’s board of directors in reaching its decision to approve the merger agreement, see “The Merger-MB Financial’s Reasons for the Merger; Recommendation of MB Financial’s Board of Directors.”
Taylor Capital Will Hold Its Special Meeting on ________, 2013 (page 38)
The special meeting of Taylor Capital stockholders will be held on _______ __, 2013, at __:__ _.m. local time, on the ninth floor of Taylor Capital’s executive offices, located at 9550 West Higgins Road, Rosemont, Illinois 60018. At the Taylor Capital special meeting, holders of Taylor Capital common stock will be asked to:
 
 
 
 
 
 
Ÿ
adopt the merger agreement (which we refer to as the “Taylor Capital merger proposal”);
 
 
Ÿ
approve a proposal to adjourn the Taylor Capital special meeting, if necessary or appropriate, to solicit additional proxies in favor of the Taylor Capital merger proposal (which we refer to as the “Taylor Capital adjournment proposal”); and
 
 
Ÿ
approve, on an advisory (non-binding) basis, the compensation of certain executive officers of Taylor Capital in connection with the merger (which we refer to as the “Taylor Capital compensation proposal”).
 
 
 
 
 
 
Only holders of record of Taylor Capital common stock at the close of business on _____, 2013 will be entitled to vote at the Taylor Capital special meeting. Holders of Taylor Capital nonvoting preferred stock, Series A preferred stock and Series B preferred stock are not entitled to, and are not being requested to, vote at the Taylor Capital special meeting. Each share of Taylor Capital common stock is entitled to one vote on each proposal to be considered at the Taylor Capital special meeting. As of the record date, there were _________ shares of Taylor Capital common stock entitled to vote at the Taylor Capital special meeting. As of the record date, the directors and executive officers of Taylor Capital and their affiliates beneficially owned and were entitled to vote approximately ________ shares of Taylor Capital common stock representing approximately __% of the shares of Taylor Capital common stock outstanding on that date.

Concurrent with the execution of the merger agreement, Taylor Capital directors Bruce W. Taylor, Jeffrey W. Taylor, Harrison I. Steans and Jennifer W. Steans each entered into a voting and support agreement with MB Financial under which he or she generally has agreed (1) to vote or cause to be voted in favor of the Taylor Capital merger proposal all shares of Taylor Capital common stock over which he or she or a member of his or her immediate family has, directly or indirectly, sole or shared voting power as of the record date for the Taylor Capital special meeting and (2) subject to limited exceptions, not to sell or otherwise dispose of shares of Taylor Capital common stock representing more than 25% of the shares of Taylor Capital common stock he or she beneficially owned as of the date of such voting and support agreement until after the approval of the Taylor Capital merger proposal by the stockholders of Taylor Capital. As of the record date for the Taylor Capital special meeting, the number of shares of Taylor Capital common stock subject to these voting and support agreements was approximately _____ shares, representing approximately ___% of the outstanding shares of Taylor Capital common stock. For additional information regarding the voting and support agreements, see “The Merger Agreement-Voting and Support Agreements.”
 
 
 
 
 

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To approve the Taylor Capital merger proposal, a majority of the shares of Taylor Capital common stock outstanding and entitled to vote thereon must be voted in favor of such proposal. The Taylor Capital adjournment proposal and the Taylor Capital compensation proposal will each be approved if a majority of the shares present in person or represented by proxy and entitled to vote on such proposal vote in favor of such proposal. If you mark “ABSTAIN” on your proxy, fail to submit a proxy or vote in person at the Taylor Capital special meeting or fail to instruct your bank or broker how to vote with respect to the Taylor Capital merger proposal, it will have the same effect as a vote “AGAINST” the Taylor Capital merger proposal. With respect to the Taylor Capital adjournment proposal or the Taylor Capital compensation proposal, if you mark “ABSTAIN” on your proxy it will have the same effect as a vote “AGAINST” such proposal, and if you fail to vote or fail to instruct your bank or broker with respect to the proposal, it will have no effect on such proposal.  
Taylor Capital’s Board of Directors Unanimously Recommends that Taylor Capital Stockholders Vote “FOR” the Approval of the Taylor Capital Merger Proposal and the Other Proposals Presented at the Taylor Capital Special Meeting (page 52)
Taylor Capital’s board of directors has determined that the merger, the merger agreement and the transactions contemplated by the merger agreement are advisable and in the best interests of Taylor Capital and its stockholders and has unanimously approved the merger agreement. Taylor Capital’s board of directors unanimously recommends that Taylor Capital stockholders vote “FOR” the Taylor Capital merger proposal and “FOR” the other proposals presented at the Taylor Capital special meeting. For the factors considered by Taylor Capital’s board of directors in reaching its decision to approve the merger agreement, see “The Merger—Taylor Capital’s Reasons for the Merger; Recommendation of Taylor Capital’s Board of Directors.”
Opinion of MB Financial’s Financial Advisor (page 55 and Appendix B)
In connection with its consideration of the merger, on July 14, 2013, the MB Financial board of directors received from J.P. Morgan Securities LLC (which we refer to as “J.P. Morgan”), its oral opinion, which opinion was confirmed by delivery of a written opinion, dated July 14, 2013, to the effect that, as of such date and based upon and subject to the various factors, assumptions and limitations set forth in its opinion, the base merger consideration payable by MB Financial in the merger was fair, from a financial point of view, to MB Financial. The full text of J.P. Morgan’s written opinion is attached as Appendix B to this joint proxy statement/prospectus. You should read the entire opinion for a discussion of, among other things, the assumptions made, procedures followed, matters considered and limitations on the review undertaken by J.P. Morgan in rendering its opinion. J.P. Morgan’s written opinion is addressed to the MB Financial board of directors, is directed only to the base merger consideration and does not constitute a recommendation to any MB Financial stockholder as to how such stockholder should vote with respect to the merger or any other matter.
Opinion of Taylor Capital’s Financial Advisor (page 61 and Appendix C)
In connection with its consideration of the merger, on July 14, 2013, the Taylor Capital board of directors received from Sandler O’Neill & Partners, L.P. (which we refer to as “Sandler O’Neill”), its oral opinion, which opinion was confirmed by delivery of a written opinion, dated July 14, 2013, to the effect that, as of such date and based upon and subject to the various factors, assumptions and limitations set forth in its opinion, the merger consideration was fair, from a financial point of view, to the holders of Taylor Capital common stock and nonvoting preferred stock. The full text of Sandler O’Neill’s written opinion is attached as Appendix C to this joint proxy statement/prospectus. You should read the entire opinion for a discussion of, among other things, the assumptions made, procedures followed, matters considered and limitations on the review undertaken by Sandler O’Neill in rendering its opinion. Sandler O’Neill’s written opinion is addressed to the Taylor Capital board of directors, is directed only to the merger consideration and does not constitute a recommendation to any Taylor Capital stockholder as to how such stockholder should vote with respect to the merger or any other matter.
 
 
 
 


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What Holders of Taylor Capital Warrants, Stock Options and Restricted Stock Awards Will Receive (page 93)
Stock Options and Warrants
Each Taylor Capital stock option and warrant with an exercise price per share that is less than the base merger consideration value (as defined below) and is outstanding immediately prior to the merger will be canceled and entitle its holder to receive a cash payment as soon as reasonably practicable following the merger equal to: (i) the excess, if any, of (A) the sum of (1) $4.08 and (2) the product of 0.64318 and the Average MB Financial common stock price (we refer to the sum of (1) and (2) as the “base merger consideration value”) over (B) the exercise price per share of the Taylor Capital stock option or warrant, multiplied by (ii) the number of shares of Taylor Capital common stock subject to such Taylor Capital stock option or warrant. In addition, if any additional merger consideration is payable to holders of Taylor Capital common stock and nonvoting preferred stock as a result of a sale of Taylor Capital’s mortgage banking business, a holder of a Taylor Capital stock option or warrant with an exercise price per share that is less than the aggregate of the base merger consideration value and such holder’s proportionate share of the additional merger consideration will receive a cash payment equal to such portion of additional merger consideration in excess of the exercise price multiplied by the number of shares of Taylor Capital common stock subject to such Taylor Capital stock option or warrant. All Taylor Capital stock options and warrants with an exercise price per share equal to or greater than the base merger consideration value will, at the time of the merger or immediately prior to the merger, be cancelled and terminated, subject to any rights of the holders of those stock options and warrants to receive any additional merger consideration as described above.
Restricted Stock Awards  
Each Taylor Capital restricted stock award that is unvested and outstanding immediately prior to the merger will be converted into the right to receive from MB Financial a cash payment in the amount of the base merger consideration value multiplied by the number of shares of Taylor Capital common stock subject to such award, payable as and when such award vests in accordance with its vesting schedule. In addition, if any additional merger consideration is payable to holders of Taylor Capital common stock and nonvoting preferred stock as a result of a sale of Taylor Capital’s mortgage banking business, the holder of such award will be entitled to an additional cash payment in the amount of his or her proportionate share of the additional merger consideration, subject to the vesting of such award in accordance with its vesting schedule.
Material U.S. Federal Income Tax Consequences of the Merger (page 120)
The merger is intended to qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code. Assuming the merger qualifies as a reorganization, a U.S. holder of Taylor Capital common stock generally will not recognize any gain or loss upon receipt of MB Financial common stock in exchange for Taylor Capital common stock in the merger, and will recognize gain (but not loss) in an amount not to exceed any cash received as part of the merger consideration (except with respect to any cash received upon exercise of appraisal rights under Delaware law and in lieu of a fractional share of MB Financial common stock, as discussed under “Material U.S. Federal Income Tax Consequences of the Merger—Receipt of Only Cash Consideration Upon Exercise of Appraisal Rights and Cash Received Instead of a Fractional Share of MB Financial Common Stock”). It is a condition to the completion of the merger that MB Financial and Taylor Capital receive written opinions from their respective counsel to the effect that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code.
For further information, see “Material U.S. Federal Income Tax Consequences of the Merger.”
 
 
 
 


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The U.S. federal income tax consequences described above may not apply to all holders of Taylor Capital common stock. Your tax consequences will depend on your individual situation. Accordingly, we strongly urge you to consult your independent tax advisor for a full understanding of the particular tax consequences of the merger to you.
Holders of Taylor Capital Common Stock, Nonvoting Preferred Stock and Series B Preferred Stock Have Appraisal Rights in Connection with the Merger (see page 87)
Under Delaware law, any holder of Taylor Capital common stock, nonvoting preferred stock and Series B preferred stock (to the extent any shares of Taylor Capital Series B preferred stock have not been repurchased or redeemed by Taylor Capital and remain outstanding immediately prior to the effective time of the merger) can elect to have the fair value of his or her shares appraised and paid in cash instead of receiving the applicable merger consideration under the merger agreement.
To perfect appraisal rights, a holder of such shares must satisfy the following conditions:
Ÿ deliver a written demand for appraisal to Taylor Capital before the vote on the merger agreement;
Ÿ in the case of a holder of Taylor Capital common stock, not vote in favor of the merger agreement (the return of a signed proxy which does not specify a vote against the merger agreement or a direction to abstain will constitute a waiver of the stockholder’s right of appraisal); and
Ÿ continuously hold the Taylor Capital shares from the date of the making of the demand through the time the merger is completed.
A copy of the relevant sections of Delaware law governing this process is attached to this joint proxy statement/prospectus as Appendix D. MB Financial stockholders are not entitled to appraisal rights in connection with the merger.
Taylor Capital’s Executive Officers and Directors May Have Financial Interests in the Merger that Differ from, or Are in Addition to, Your Interests (page 75)
Taylor Capital stockholders should be aware that certain of Taylor Capital’s directors and executive officers may have interests in the merger and have arrangements that are different from, or in addition to, those of Taylor Capital stockholders generally. Taylor Capital’s board of directors was aware of these interests and considered these interests, among other matters, when making its decision to approve the merger agreement, and in recommending that Taylor Capital stockholders vote in favor of adopting the merger agreement.
These interests include, but are not limited to, the following:
Ÿ Certain executive officers of Taylor Capital may be eligible for severance benefits under existing agreements with, and benefit plans offered by, Taylor Capital.
Ÿ Accelerated vesting of certain of the unvested restricted stock awards held by Taylor Capital directors and executive officers.
Ÿ Mark A. Hoppe, President and Chief Executive Officer of Taylor Capital and Cole Taylor Bank, will become President, Chief Executive Officer and a director of MB Financial Bank following the bank merger and has entered into an employment agreement with MB Financial and MB Financial Bank, to become effective at the effective time of the merger.
Ÿ Two current Taylor Capital directors, C. Bryan Daniels and Jennifer W. Steans, are expected to be appointed to the board of directors of MB Financial upon completion of the merger.
 
 
 
 


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For a more complete description of these and other interests, see “The Merger—Interests of Taylor Capital’s Directors and Executive Officers in the Merger.”
 
 
Regulatory Approvals
 
 
Under federal law, the merger must be approved by the Board of Governors of the Federal Reserve System (which we refer to as the “Federal Reserve Board”), and the bank merger must be approved by the Office of the Comptroller of the Currency. The U.S. Department of Justice may review the impact of the merger and the bank merger on competition.
 
 
 
 
 
 
If and when the Federal Reserve Board approves the merger, we must wait for up to 30 days before we can complete the merger. If, however, there are no adverse comments from the U.S. Department of Justice and we receive permission from the Federal Reserve Board to do so, the merger may be completed on or after the 15th day after approval from the Federal Reserve Board. Similarly, if and when we receive approval of the bank merger from the Office of the Comptroller of the Currency, we must wait for up to 30 days before we can complete the bank merger. If, however, there are no adverse comments from the U.S. Department of Justice and we receive permission from the Office of the Comptroller of the Currency to do so, the bank merger may be completed on or after the 15th day after approval from the Office of the Comptroller of the Currency.
 
 
 
 
 
 
As of the date of this joint proxy statement/prospectus, all of the required applications for regulatory approval have been filed. There can be no assurance as to whether all regulatory approvals will be obtained or as to the dates of the approvals. There also can be no assurance that the regulatory approvals received will not contain a condition or requirement that results in a failure to satisfy the conditions to closing set forth in the merger agreement. See “The Merger Agreement—Conditions to Complete the Merger.”
 
 
 
 
 
 
Conditions that Must Be Satisfied or Waived for the Merger to Occur (page 106)
 
 
 
 
 
 
As more fully described in this joint proxy statement/prospectus and in the merger agreement, the completion of the merger depends on a number of conditions being satisfied or, where legally permitted, waived. These conditions include: (1) the approval of the MB Financial merger proposal by MB Financial stockholders and approval of the Taylor Capital merger proposal by Taylor Capital stockholders; (2) the authorization for listing on the NASDAQ Global Select Market of the shares of MB Financial common stock to be issued in connection with the merger and the shares of MB Financial preferred stock to be issued in connection with the merger in exchange for Taylor Capital Series A preferred stock; (3) the receipt of all required regulatory approvals; (4) the effectiveness of the registration statement on Form S-4 of which this joint proxy statement/prospectus is a part, and the absence of a stop order or proceeding initiated or threatened by the SEC for that purpose; (5) subject to the materiality standards provided in the merger agreement, the accuracy of the representations and warranties of MB Financial and Taylor Capital; (6) performance in all material respects by each of MB Financial and Taylor Capital of its obligations under the merger agreement; (7) receipt by each of MB Financial and Taylor Capital of an opinion from its counsel as to certain U.S. federal income tax matters; and (8) as an additional condition to MB Financial’s obligation to complete the merger, the shares of Taylor Capital common stock and Taylor Capital nonvoting preferred stock whose holders have perfected appraisal rights under Delaware law must represent less than nine percent of the total number of outstanding shares of Taylor Capital common stock and Taylor Capital nonvoting preferred stock.
 
 
 
 
 
 
We expect to complete the merger in the first half of 2014. No assurance can be given, however, as to when, or if, the conditions to the merger will be satisfied or waived, or that the merger will be completed.
 
 
 
 
 
 
Termination of the Merger Agreement (page 107)
 
 
 
 
 
 
The merger agreement can be terminated at any time prior to completion of the merger in the following circumstances:
 
 
 
 
 
 
Ÿ
by mutual consent of MB Financial and Taylor Capital, if the board of directors of each so determines by a vote of a majority of the members of its entire board;
 
 
 
 
 


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Ÿ by either MB Financial or Taylor Capital if any governmental entity that must grant a requisite regulatory approval has denied approval of the merger and such denial has become final and non-appealable or any governmental entity of competent jurisdiction has issued a final non-appealable order permanently enjoining or otherwise prohibiting or making illegal the consummation of the transactions contemplated by the merger agreement, unless the failure to obtain a requisite regulatory approval is due to the failure of the party seeking to terminate the merger agreement to perform or observe its covenants and agreements under the merger agreement;
Ÿ by either MB Financial or Taylor Capital if (1) the merger has not been completed on or before June 30, 2014 (which we refer to as the “termination date”), unless the failure of the merger to be completed by that date is due to the failure of the party seeking to terminate the merger agreement to perform or observe its covenants and agreements under the merger agreement, (2) the Taylor Capital special meeting has concluded without the approval of the Taylor Capital merger proposal or (3) the MB Financial special meeting has concluded without the approval of the MB Financial merger proposal;
Ÿ by either MB Financial or Taylor Capital (provided that the terminating party is not then in material breach of any representation, warranty, covenant or other agreement contained in the merger agreement) if there is a breach of any of the covenants or agreements or any of the representations or warranties set forth in the merger agreement on the part of the other party which either individually or in the aggregate would constitute, if occurring or continuing on the date the merger is to be completed, the failure of a closing condition of the terminating party and which is not cured within 45 days following written notice to the party committing such breach, or by its nature or timing cannot be cured during such period (or such fewer days as remain prior to the termination date);
Ÿ by Taylor Capital, if (1) the board of directors of MB Financial fails to recommend in this joint proxy statement/prospectus that the stockholders of MB Financial approve the MB Financial merger proposal, or withdraws, modifies or qualifies such recommendation in a manner adverse to Taylor Capital, or resolves to do so, or fails to reaffirm such recommendation within two business days after Taylor Capital requests in writing that such action be taken, or (2) MB Financial materially breaches certain obligations, including with respect to the non-solicitation of alternative acquisition proposals or calling a meeting of MB Financial stockholders and recommending that they approve the MB Financial merger proposal;
Ÿ by MB Financial, if (1) the board of directors of Taylor Capital fails to recommend in this joint proxy statement/prospectus that the stockholders of Taylor Capital approve the Taylor Capital merger proposal, or withdraws, modifies or qualifies such recommendation in a manner adverse to MB Financial, or resolves to do so, or fails to reaffirm such recommendation within two business days after MB Financial requests in writing that such action be taken, (2) the board of directors of Taylor Capital (A) recommends or endorses an alternative acquisition proposal, or (B) fails to issue a press release announcing its opposition to a publicly announced alternative acquisition proposal within five business days after receiving a written request from MB Financial to do so or (3) Taylor Capital materially breaches certain obligations, including with respect to the non-solicitation of alternative acquisition proposals or calling a meeting of its stockholders and recommending that they approve the Taylor Capital merger proposal; or
Ÿ by Taylor Capital, if Taylor Capital receives a superior proposal, provided that Taylor Capital (1) has not breached in any material respect certain obligations, including with respect to the non-solicitation of alternative acquisition proposals or calling a meeting of its stockholders and recommending that they approve the Taylor Capital merger proposal, (2) subsequent to delivering notice of termination to MB Financial, intends to enter into a letter of intent, acquisition agreement or similar agreement relating to the superior proposal and (3) has provided MB Financial at least five days’ prior written notice advising MB Financial that the board of directors of Taylor Capital is prepared to accept the superior proposal and has given MB Financial an opportunity to amend the merger agreement in a manner that would enable Taylor Capital’s board of directors to proceed with the merger. A “superior proposal” means an alternative acquisition proposal for Taylor Capital that is determined in good faith by the board of directors of Taylor Capital, after consultation with its financial advisor, to be on terms that are more favorable to the stockholders of Taylor Capital than the merger and that there is a reasonable likelihood of such transaction being consummated in accordance with its terms.
 
 
 
 


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Termination Fees (page 108)
If the merger agreement is terminated under certain circumstances, including circumstances involving alternative acquisition proposals or changes in the recommendation of Taylor Capital’s or MB Financial’s respective boards of directors, Taylor Capital or MB Financial may be required to pay to the other party a termination fee equal to $20.0 million.
Amendment to MB Financial’s Charter (page 90)
In connection with the merger, MB Financial’s charter will be amended to increase the authorized number of shares of MB Financial common stock from 70,000,000 to 100,000,000 and to increase the authorized number of shares of MB Financial preferred stock from 1,000,000 to 10,000,000. Pursuant to MB Financial’s charter and Maryland law, this amendment is not subject to approval by the stockholders of MB Financial.
The Rights of Taylor Capital Stockholders Will Change as a Result of the Merger (page 146)
The rights of Taylor Capital stockholders will change as a result of the merger due to differences in MB Financial’s and Taylor Capital’s governing documents and states of incorporation. The rights of Taylor Capital stockholders are governed by Delaware law and by Taylor Capital’s certificate of incorporation and bylaws, each as amended to date. Upon the completion of the merger, Taylor Capital stockholders will become stockholders of MB Financial, as the continuing legal entity in the merger, and the rights of Taylor Capital stockholders will therefore be governed by Maryland law and MB Financial’s charter and bylaws.
See “Comparison of Stockholder Rights” for a description of the material differences in stockholder rights under each of the MB Financial and Taylor Capital governing documents.
MB Financial’s Board of Directors Following the Merger
Upon completion of the merger, the number of directors of MB Financial will be increased by two, and it is expected that current Taylor Capital directors C. Bryan Daniels and Jennifer W. Steans will be appointed as directors of MB Financial.
Information About the Companies (page 124)
MB Financial, Inc.
MB Financial, headquartered in Chicago, Illinois, is a financial holding company with banking offices located primarily in the Chicago area.  MB Financial’s primary market is the Chicago metropolitan area, in which it currently operates 84 banking offices and approximately 125 ATMs through its bank subsidiary, MB Financial Bank. Through MB Financial Bank, MB Financial offers a broad range of financial services primarily to small and middle-market businesses and individuals in the markets that it serves.  MB Financial’s primary lines of business include commercial banking, leasing, retail banking and wealth management.  As of June 30, 2013, on a consolidated basis, MB Financial had total assets of $9.4 billion, deposits of $7.4 billion, stockholders’ equity of $1.3 billion and $2.9 billion of client assets under management in its wealth management group (including $1.8 billion in MB Financial’s trust department and $1.1 billion in MB Financial’s majority-owned asset management firm, Cedar Hill Associates LLC).
MB Financial’s principal office is located at 800 West Madison Street, Chicago, Illinois 60607, and its telephone number is (888) 422-6562. MB Financial’s common stock is listed on the NASDAQ Global Select Market under the symbol “MBFI.”
 
 
 
 


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Additional information about MB Financial and its subsidiaries is included in documents incorporated by reference in this joint proxy statement/prospectus. See “Where You Can Find More Information.”
Taylor Capital Group, Inc.
Taylor Capital is a bank holding company headquartered in Rosemont, Illinois, a suburb of Chicago, and derives substantially all of its revenue from its wholly-owned subsidiary, Cole Taylor Bank. At June 30, 2013, on a consolidated basis, Taylor Capital had assets of $5.9 billion, deposits of $3.7 billion and stockholders’ equity of $560.3 million. Taylor Capital has two separate and discrete operating segments, banking and mortgage banking.
Taylor Capital’s banking segment consists of commercial banking, commercial real estate lending, asset-based lending, commercial equipment leasing and retail banking. In addition to Taylor Capital’s lending activities, it offers deposit products, such as checking, savings and money market accounts, as well as time deposits, through nine banking centers (branches) located in the Chicago area and through its on-line banking channel.
Taylor Capital’s mortgage banking segment originates, sells and services mortgage loans through Cole Taylor Mortgage, based in Ann Arbor, Michigan. Taylor Capital currently originates, sells or services mortgage loans in 48 states and the District of Columbia. As discussed under “The Merger Agreement—Possible Sale of Taylor Capital’s Mortgage Banking Business,” Taylor Capital is currently exploring the sale of its mortgage banking business, as permitted pursuant to the terms of the merger agreement. Taylor Capital is permitted to conduct such a sale so long as it enters into definitive transaction documents relating to the sale that meet the criteria set forth in Exhibit D to the merger agreement and are approved by MB Financial prior to December 31, 2013 and the sale is consummated by July 31, 2014.
Taylor Capital’s principal office is located at 9550 West Higgins Road, Rosemont, Illinois 60018, and its telephone number is (847) 653-7978. Taylor Capital’s common stock is listed on the NASDAQ Global Select Market under the symbol “TAYC,” Taylor Capital’s Series A preferred stock is listed on the NASDAQ Global Select Market under the symbol “TAYCO” and its trust preferred securities issued through TAYC Capital Trust I are listed on the NASDAQ Global Select Market under the symbol “TAYCP.”
Additional information about Taylor Capital and its subsidiaries is included in documents incorporated by reference in this joint proxy statement/prospectus. See “Where You Can Find More Information.”
Litigation Relating to the Merger (page 91)
On July 26, 2013, a class action complaint, captioned James Sullivan v. Taylor Capital Group, Inc., et al., was filed under Case No. 2013-CH-17751 in the Circuit Court of Cook County, Illinois, against Taylor Capital, its directors and MB Financial challenging the merger. On August 8, 2013, a second class action complaint, captioned Dennis Panozzo v Taylor Capital Group, Inc., et. al., was filed under Case No. 2013-CH-18546 in the Circuit Court of Cook County, Illinois, against these same defendants. Subsequently, the two cases were consolidated pursuant to court order under the first-filed Sullivan case number. The lawsuits allege, among other things, that the Taylor Capital directors breached their fiduciary duties to Taylor Capital and its stockholders by agreeing to the proposed merger at an unfair price pursuant to a flawed sales process and by agreeing to terms with MB Financial that discouraged other bidders. Plaintiffs further allege that certain Taylor Capital directors and officers were not independent or disinterested with respect to the merger. Plaintiffs also allege that MB Financial aided and abetted the Taylor Capital directors’ breaches of fiduciary duties. The complaints seek, among other things, an order enjoining the defendants from consummating the merger, as well as attorneys’ and experts’ fees and certain other damages. Taylor Capital, its directors, and MB Financial believe these actions are without merit and intend to vigorously defend against the lawsuits.
Risk Factors (page 19)
You should consider all the information contained in or incorporated by reference into this joint proxy statement/prospectus in deciding how to vote for the proposals presented in the joint proxy statement/prospectus. In particular, you should consider the factors under “Risk Factors.”
 
 
 
 

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RISK FACTORS
In addition to general investment risks and the other information contained in or incorporated by reference into this joint proxy statement/prospectus, including the matters addressed under the section “Cautionary Statement Regarding Forward-Looking Statements,” you should carefully consider the following risk factors in deciding how to vote for the proposals presented in this joint proxy statement/prospectus.
Because the market price of MB Financial common stock will fluctuate, holders of Taylor Capital common stock and nonvoting preferred stock cannot be certain prior to the completion of the merger of the market value of the stock portion of the base merger consideration they will receive.
Upon completion of the merger, each outstanding share of Taylor Capital common stock and Taylor Capital nonvoting preferred stock will be converted into the right to receive, promptly following the completion of the merger, (1) 0.64318 shares of MB Financial common stock and (2) $4.08 in cash. The market value of the stock portion of the base merger consideration will vary from the closing price of MB Financial common stock on the date MB Financial and Taylor Capital announced the merger, on the date that this joint proxy statement/prospectus is mailed to Taylor Capital stockholders, on the date of the Taylor Capital special meeting and on the date the merger is completed and thereafter. Any change in the market price of MB Financial common stock prior to the completion of the merger will affect the market value of the stock portion of the base merger consideration that holders of Taylor Capital common stock and nonvoting preferred stock will receive upon completion of the merger, and there will be no adjustment to the merger consideration for changes in the market price of either shares of MB Financial common stock or shares of Taylor Capital stock. Stock price changes may result from a variety of factors that are beyond the control of MB Financial and Taylor Capital, including, but not limited to, general market and economic conditions, changes in our respective businesses, operations and prospects and regulatory considerations. Therefore, if you are a holder of Taylor Capital common stock or nonvoting preferred stock, you will not know at the time of the Taylor Capital special meeting the precise market value of the base merger consideration you will receive at the effective time of the merger. You should obtain current market quotations for MB Financial common stock and Taylor Capital common stock.
It is unlikely that holders of Taylor Capital common stock and nonvoting preferred stock will receive any additional merger consideration from a sale of Taylor Capital’s mortgage banking business.
The merger agreement provides for the possibility of the payment of additional cash merger consideration to holders of Taylor Capital common stock and nonvoting preferred stock if and to the extent that the “gain,” which is defined in the merger agreement as 60% of the pre-tax gain, from a sale of Taylor Capital’s mortgage banking business exceeds $57.0 million. As discussed under “The Merger Agreement—Possible Sale of Taylor Capital’s Mortgage Banking Business,” in order for any additional merger consideration to become payable, definitive transaction documents for the sale of the mortgage banking business meeting the criteria set forth in Exhibit D to the merger agreement and approved by MB Financial must be entered into by December 31, 2013 and the sale transaction must be consummated by July 31, 2014. MB Financial has the right to elect to retain the mortgage banking business and not approve a sale transaction that meets the criteria set forth in Exhibit D to the merger agreement, in which case it must pay as additional merger consideration any gain in excess of $57.0 million that otherwise would have resulted from such sale. Based on existing market conditions in the mortgage banking industry, MB Financial and Taylor Capital currently believe it is unlikely that any additional merger consideration will become payable, and holders of Taylor Capital common stock and nonvoting preferred stock should not expect to receive any additional merger consideration.
The market price of MB Financial common stock after the merger may be affected by factors different from those affecting the shares of Taylor Capital or MB Financial currently.
Upon completion of the merger, holders of Taylor Capital common stock and nonvoting preferred stock will become holders of MB Financial common stock. MB Financial’s business differs in important respects from that of Taylor Capital, and, accordingly, the results of operations of the combined company and the market price of MB Financial common stock after the completion of the merger may be affected by factors different from those

19


currently affecting the independent results of operations of each of MB Financial and Taylor Capital. For a discussion of the businesses of MB Financial and Taylor Capital and of some important factors to consider in connection with those businesses, see the documents incorporated by reference in this joint proxy statement/prospectus and referred to under “Where You Can Find More Information.”
Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated or that could have an adverse effect on the combined company following the merger.
Before the merger and the bank merger may be completed, MB Financial and Taylor Capital must obtain approvals from the Federal Reserve Board and the Office of the Comptroller of the Currency. Other approvals, waivers or consents from regulators may also be required. An adverse development in either party’s regulatory standing or other factors could result in an inability to obtain approval or delay their receipt. These regulators may impose conditions on the completion of the merger or the bank merger. It is a condition to each company’s obligation to complete the merger that the requisite regulatory approvals be obtained without the imposition of any condition or restriction that would reasonably be expected to have a material adverse effect on, or materially and adversely affect the economic benefits to be realized by, MB Financial (as the surviving corporation of the merger) and its subsidiaries, taken as a whole, after giving effect to the merger. See “The Merger—Regulatory Approvals” and “The Merger Agreement—Conditions to Complete the Merger.”
Combining the two companies may be more difficult, costly or time consuming than expected and the anticipated benefits and cost savings of the merger may not be realized.
MB Financial and Taylor Capital have operated and, until the completion of the merger, will continue to operate, independently. The success of the merger, including anticipated benefits and cost savings, will depend, in part, on MB Financial’s ability to successfully combine the businesses of MB Financial and Taylor Capital. To realize these anticipated benefits and cost savings, after the completion of the merger, MB Financial expects to integrate Taylor Capital’s business into its own. It is possible that the integration process could result in the loss of key employees, the disruption of each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect the combined company’s ability to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits and cost savings of the merger. The loss of key employees could adversely affect MB Financial’s ability to successfully conduct its business in the markets in which Taylor Capital now operates, which could have an adverse effect on MB Financial’s financial results and the value of its common stock. If MB Financial experiences difficulties with the integration process, the anticipated benefits of the merger may not be realized fully or at all, or may take longer to realize than expected. As with any merger of financial institutions, there also may be business disruptions that cause MB Financial and/or Taylor Capital to lose customers or cause customers to close their accounts with MB Financial and/or Taylor Capital and move their business to competing financial institutions. Integration efforts between the two companies will also divert management attention and resources. In addition, the actual cost savings of the merger could be less than anticipated.
The fairness opinions obtained by MB Financial and Taylor Capital from their respective financial advisors will not reflect changes in circumstances between signing the merger agreement and the merger.
MB Financial and Taylor Capital have not obtained updated opinions as of the date of this joint proxy statement/prospectus from J.P. Morgan, MB Financial’s financial advisor, or Sandler O’Neill, Taylor Capital’s financial advisor. Changes in the operations and prospects of MB Financial or Taylor Capital, general market and economic conditions and other factors which may be beyond the control of MB Financial and Taylor Capital, and on which the fairness opinions were based, may alter the value of MB Financial or Taylor Capital or the prices of shares of MB Financial common stock or Taylor Capital common stock by the time the merger is completed. The opinions do not speak as of the time the merger will be completed or as of any date other than the dates of such opinions. The opinions will not address the fairness of the merger consideration, from a financial point of view, at the time a stockholder votes or at the time the merger is completed. For a description of the opinions that MB Financial and Taylor Capital received from their respective financial advisors, please refer to “The Merger—Opinion of J.P. Morgan–Financial Advisor to MB Financial” and “The Merger—Opinion of Sandler O’Neill–Financial Advisor to

20


Taylor Capital.” For a description of the other factors considered by the boards of directors of MB Financial and Taylor Capital in determining to approve the merger, please refer to “The Merger—MB Financial’s Reasons for the Merger; Recommendation of MB Financial’s Board of Directors” and “The Merger—Taylor Capital’s Reasons for the Merger; Recommendation of Taylor Capital’s Board of Directors.”
Certain of Taylor Capital’s directors and executive officers may have interests in the merger that differ from, or are in addition to, the interests of Taylor Capital’s stockholders.
Taylor Capital’s stockholders should be aware that certain of Taylor Capital’s directors and executive officers may have interests in the merger and have arrangements that are different from, or in addition to, those of Taylor Capital’s stockholders generally. These interests and arrangements may create potential conflicts of interest. Taylor Capital’s board of directors was aware of these interests and considered these interests, among other matters, when making its decision to approve the merger agreement, and in recommending that Taylor Capital’s stockholders vote in favor of adopting the merger agreement. See “The Merger—Interests of Taylor Capital’s Directors and Executive Officers in the Merger.”
Termination of the merger agreement could negatively impact Taylor Capital or MB Financial.
If the merger agreement is terminated, there may be various consequences. For example, Taylor Capital’s or MB Financial’s businesses may have been impacted adversely by the failure to pursue other beneficial opportunities due to the focus of management on the merger, without obtaining any of the anticipated benefits of completing the merger. Additionally, if the merger agreement is terminated, the market price of Taylor Capital’s or MB Financial’s stock could decline to the extent that the current market prices reflect a market assumption that the merger will be completed. Further, if the merger agreement is terminated under certain circumstances, Taylor Capital or MB Financial may be required to pay to the other party a termination fee of $20.0 million.
If the merger is not completed, MB Financial and Taylor Capital will have incurred substantial expenses without realizing the expected benefits of the merger.
Each of MB Financial and Taylor Capital has incurred and will incur substantial expenses in connection with the negotiation and completion of the transactions contemplated by the merger agreement, as well as the costs and expenses of filing, printing and mailing this joint proxy statement/prospectus and all filing and other fees paid to the SEC in connection with the merger. If the merger is not completed, MB Financial and Taylor Capital would have to recognize these expenses without realizing the expected benefits of the merger.
Taylor Capital will be subject to business uncertainties and contractual restrictions while the merger is pending.
Uncertainty about the effect of the merger on employees and customers may have an adverse effect on Taylor Capital. These uncertainties may impair Taylor Capital’s ability to attract, retain and motivate key personnel until the merger is completed, and could cause customers and others that deal with Taylor Capital to seek to change existing business relationships with Taylor Capital. Retention of certain employees by Taylor Capital may be challenging while the merger is pending, as certain employees may experience uncertainty about their future roles with Taylor Capital or MB Financial. If key employees depart because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with Taylor Capital or MB Financial, Taylor Capital’s business or Taylor Capital’s business assumed by MB Financial following the merger could be harmed. In addition, subject to certain exceptions, Taylor Capital has agreed to operate its business in the ordinary course prior to consummating the merger and not to take certain actions without the prior consent of MB Financial. See “The Merger Agreement—Covenants and Agreements-Conduct of Business Prior to Completion of the Merger.”

21


The merger agreement places limitations on MB Financial and Taylor Capital with regard to alternative acquisition proposals and requires each company to pay a termination fee of $20.0 million in certain circumstances, including circumstances relating to alternative acquisition proposals.
The merger agreement prohibits MB Financial and Taylor Capital from initiating, soliciting, knowingly encouraging or knowingly facilitating certain third-party alternative acquisition proposals. See “The Merger Agreement—Agreement Not to Solicit Other Offers.” The merger agreement also provides that MB Financial or Taylor Capital must pay a termination fee to the other party in the amount of $20.0 million in the event that the merger agreement is terminated under certain circumstances, including involving such party’s failure to abide by certain obligations with respect to alternative acquisition proposals. See “The Merger Agreement—Termination Fee.” These provisions might discourage a potential competing acquirer that might have an interest in acquiring all or a significant part of Taylor Capital or MB Financial from considering or proposing such an acquisition.
Pending litigation against Taylor Capital and MB Financial could result in an injunction preventing the completion of the merger or a judgment resulting in the payment of damages.
In connection with the merger, purported Taylor Capital stockholders have filed putative stockholder class action lawsuits against Taylor Capital, the members of the Taylor Capital board of directors and MB Financial. Among other remedies, the plaintiffs seek to enjoin the merger. The outcome of any such litigation is uncertain. If the cases are not resolved favorably, these lawsuits could prevent or delay completion of the merger and result in substantial costs to MB Financial and Taylor Capital, including any costs associated with the indemnification of directors and officers. There may be additional lawsuits filed against MB Financial, Taylor Capital and/or the directors and officers of either company in connection with the merger. The defense or outcome of any lawsuit or claim that remains unresolved at the time the merger is completed may adversely affect MB Financial’s business, financial condition, results of operations and cash flows following the merger. See “The Merger—Litigation Relating to the Merger.”
The shares of MB Financial common stock to be received by holders of Taylor Capital common stock and nonvoting preferred stock for the stock portion of the merger consideration will have different rights from the shares of Taylor Capital common stock.
Upon completion of the merger, Taylor Capital stockholders will become MB Financial stockholders and their rights as stockholders will be governed by the laws of the State of Maryland and MB Financial’s charter and bylaws. The rights associated with Taylor Capital common stock and nonvoting preferred stock are different from the rights associated with MB Financial common stock. See “Comparison of Stockholder Rights” for a discussion of the different rights associated with MB Financial common stock.
Holders of Taylor Capital and MB Financial common stock will have a reduced ownership and voting interest after the merger and will exercise less influence over management.
Holders of Taylor Capital common stock and MB Financial common stock currently have the right to vote in the election of the board of directors and on other matters affecting Taylor Capital and MB Financial, respectively. Upon the completion of the merger, each Taylor Capital stockholder who receives shares of MB Financial common stock will become a stockholder of MB Financial with a percentage ownership of MB Financial that is smaller than the stockholder’s percentage ownership of Taylor Capital. It is currently expected that the holders of Taylor Capital common stock and nonvoting preferred stock as a group will receive shares in the merger constituting approximately ___% of the outstanding shares of MB Financial common stock immediately after the merger. As a result, current stockholders of MB Financial as a group will own approximately __% of the outstanding shares of MB Financial common stock immediately after the merger. Because of this, Taylor Capital common stockholders may have less influence on the management and policies of MB Financial than they now have on the management and policies of Taylor Capital and current MB Financial stockholders may have less influence than they now have on the management and policies of MB Financial.

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The price of MB Financial common stock may fluctuate significantly, and this may make it difficult for holders of Taylor Capital common stock and nonvoting common stock to resell shares of MB Financial common stock they receive in the merger when they want or at prices they find attractive.     
MB Financial cannot predict how its common stock will trade in the future. The market value of MB Financial common stock will likely continue to fluctuate in response to a number of factors including the following, most of which are beyond MB Financial’s control:
actual or anticipated quarterly fluctuations in MB Financial’s operating and financial results;
developments related to proceedings or litigation that involve MB Financial;
changes in financial estimates and recommendations by financial analysts about MB Financial, its competitors or the financial services industry;
failure of MB Financial’s results of operations to meet expectations of financial analysts;
additions or departures of executive officers and other key management personnel;
dispositions, acquisitions and financings;
fluctuations in the stock prices and operating results of MB Financial’s competitors;
regulatory developments; and
other developments related to the financial services industry.
The market value of MB Financial common stock may also be affected by conditions affecting the financial markets in general, including price and trading fluctuations. These conditions may result in (i) volatility in the level of, and fluctuations in, the market prices of stocks generally and, in turn, MB Financial common stock and (ii) sales of substantial amounts of MB Financial common stock in the market, in each case that could be unrelated or disproportionate to changes in MB Financial operating performance. These broad market fluctuations may negatively affect the market value of MB Financial common stock.
There may be future sales of additional common stock or other dilution of MB Financial’s equity, which may adversely affect the market price of MB Financial common stock.
MB Financial is not restricted from issuing additional common stock or preferred stock, before or after the merger, including any securities that are convertible into or exchangeable for, or that represent the right to receive, common stock or preferred stock or any substantially similar securities.  The market value of MB Financial common stock could decline as a result of sales by MB Financial of a large number of shares of common stock or preferred stock or similar securities in the market or the perception that such sales could occur.
 MB Financial’s board of directors is authorized to cause MB Financial to issue additional common stock, as well as classes or series of preferred or other stock, generally without any action on the part of MB Financial’s stockholders.  MB Financial’s board of directors also has the power to amend MB Financial’s charter, without stockholder approval, to increase the number of shares of stock MB Financial is authorized to issue. In addition, the MB Financial board has the power, generally without stockholder approval, to set the terms of any such classes or series of preferred or other stock that may be issued, including voting rights, dividend rights and preferences over the common stock with respect to dividends or upon the liquidation, dissolution or winding-up of MB Financial and other terms.  If MB Financial issues preferred stock in the future that has a preference over its common stock with respect to the payment of dividends or upon a liquidation, dissolution or winding-up, or if MB Financial issues

23


preferred stock with voting rights that dilute the voting power of its common stock, the rights of holders of MB Financial common stock or the market value of MB Financial common stock could be adversely affected. The shares of preferred stock MB Financial will issue in the merger for Taylor Capital Series A preferred stock and, if not repurchased or redeemed in its entirety by Taylor Capital prior to the merger, Taylor Capital Series B preferred stock, will rank prior to MB Financial common stock with respect to the payment of dividends or upon a liquidation, dissolution or winding-up of MB Financial.
Regulatory and contractual restrictions may limit or prevent MB Financial from paying dividends on its common stock.
MB Financial is an entity separate and distinct from its principal subsidiary, MB Financial Bank, and derives substantially all of its revenue in the form of dividends from that subsidiary. Accordingly, MB Financial is, and will be, dependent upon dividends from MB Financial Bank to pay the principal of and interest on its indebtedness, to satisfy its other cash needs and to pay dividends on its common and preferred stock. MB Financial Bank’s ability to pay dividends is subject to its ability to earn net income and to meet certain regulatory requirements. In the event MB Financial Bank is unable to pay dividends to MB Financial, MB Financial may not be able to pay dividends on its common or preferred stock. Also, MB Financial’s right to participate in a distribution of assets upon a subsidiary’s liquidation or reorganization is subject to the prior claims of the subsidiary’s creditors.
Following the merger, MB Financial will be unable to pay any dividends on its common stock unless it is current in dividend payments on the preferred stock it issues in the merger in exchange for the Taylor Capital Series A preferred stock and, if not repurchased or redeemed in its entirety prior to the merger by Taylor Capital, the Taylor Capital Series B preferred stock. In addition, as described below, the terms of MB Financial’s junior subordinated debt securities prohibit it from paying dividends on or repurchasing its common stock at any time when MB Financial has elected to defer the payment of interest on such debt securities or certain events of default under the terms of those debt securities have occurred and are continuing. These restrictions could have a negative effect on the value of MB Financial common stock. Moreover, holders of MB Financial common stock are entitled to receive dividends only when, as and if declared by MB Financial’s board of directors. Although MB Financial has historically paid cash dividends on its common stock, MB Financial is not required to do so and its board of directors could suspend or eliminate its common stock cash dividend in the future.
If MB Financial defers payments of interest on its junior subordinated debt securities, including the junior subordinated debt securities of Taylor Capital that will be assumed by MB Financial in the merger, or if certain defaults relating to those debt securities occur, it will be prohibited from declaring or paying dividends or distributions on, and from making liquidation payments with respect to, MB Financial capital stock.
As of June 30, 2013, MB Financial had outstanding $152.1 million aggregate principal amount of junior subordinated debt securities and Taylor Capital had outstanding $86.6 million aggregate principal amount of junior subordinated debt securities (which will be assumed by MB Financial in the merger), issued in connection with the sale of trust preferred securities by certain of their respective subsidiaries that are statutory business trusts. MB Financial and Taylor Capital have also guaranteed their respective trust preferred securities and, following the merger, MB Financial will guarantee Taylor Capital’s trust preferred securities in addition to its own.
Following the merger, MB Financial will have nine separate series of these junior subordinated debt securities outstanding, each series having been issued under a separate indenture and with a separate guarantee. Each of these indentures, together with the related guarantee, will prohibit MB Financial, subject to limited exceptions, from declaring or paying any dividends or distributions on, or redeeming, repurchasing, acquiring or making any liquidation payments with respect to, any of its capital stock at any time when (i) there shall have occurred and be continuing an event of default under the indenture or any event, act or condition that with notice or lapse of time or both would constitute an event of default under the indenture; (ii) MB Financial is in default with respect to payment of any obligations under the related guarantee; or (iii) MB Financial has deferred payment of interest on the junior subordinated debt securities outstanding under that indenture. In that regard, MB Financial will be entitled, at its

24


option but subject to certain conditions, to defer payments of interest on the junior subordinated debt securities of each series from time to time for up to five consecutive years.
Events of default under each indenture generally consist of failure to pay interest on the junior subordinated debt securities outstanding under that indenture under certain circumstances other than pursuant to a permitted deferral, failure to pay any principal of or premium on such junior subordinated debt securities when due, failure to comply with certain covenants under the indenture, and certain events of bankruptcy, insolvency or liquidation.
As a result of these provisions, if MB Financial were to be in default under the applicable indenture or under the applicable guarantee or elect to defer payments of interest on any series of junior subordinated debt securities, MB Financial would be prohibited from declaring or paying any dividends on its capital stock, from redeeming, repurchasing or otherwise acquiring any of its capital stock, and from making any payments to holders of it its capital stock in the event of its liquidation, which would likely have a material negative effect on the market value of MB Financial common stock.
MB Financial’s charter contains a provision which could limit the voting rights of a holder of its common stock.
MB Financial’s charter provides that any person or group who acquires beneficial ownership of MB Financial common stock in excess of 14.9% of the outstanding shares may not vote the excess shares. Accordingly, if a person acquires beneficial ownership of more than 14.9% of the outstanding shares of MB Financial common stock, such person’s voting rights with respect to MB Financial common stock will not be commensurate with such person’s economic interest in MB Financial.
Anti-takeover provisions could negatively affect holders of MB Financial common stock.
Provisions in MB Financial’s charter and bylaws, the corporate laws of the State of Maryland and federal regulations could delay or prevent a third party from acquiring MB Financial, despite the possible benefit to MB Financial stockholders, or otherwise negatively affect the market price of MB Financial common stock. These provisions include: a prohibition on voting shares of MB Financial common stock beneficially owned in excess of 14.9% of total shares outstanding; advance notice requirements for nominations for election to the MB Financial board of directors and for proposing matters that stockholders may act on at stockholder meetings; and a requirement that only directors may fill a vacancy in MB Financial’s board of directors. MB Financial’s charter also authorizes its board of directors to issue preferred or other stock, and preferred or other stock could be issued as a defensive measure in response to a takeover proposal. See “Description of MB Financial’s Capital Stock—Other Anti-Takeover Provisions.” In addition, because MB Financial is a bank holding company, purchasers of 10% or more of MB Financial common stock may be required to obtain approvals under the Change in Bank Control Act of 1978, as amended, or the Bank Holding Company Act of 1956, as amended (and in certain cases such approvals may be required at a lesser percentage of ownership). Specifically, under regulations adopted by the Federal Reserve Board, (i) any other bank holding company may be required to obtain the approval of the Federal Reserve Board to acquire or retain 5% or more of MB Financial common stock and (ii) any person other than a bank holding company may be required to obtain the approval of the Federal Reserve Board to acquire or retain 10% or more of MB Financial common stock.
These provisions may discourage potential takeover attempts, discourage bids for MB Financial common stock at a premium over market price or negatively affect the market price of, and the voting and other rights of the holders of, MB Financial common stock.
 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained or incorporated by reference in this joint proxy statement/prospectus are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 expressing MB Financial’s or Taylor Capital’s expectations or predictions of future financial or business performance or conditions. Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “target,” “estimate,” “continue,” “positions,” “prospects” or “potential,” by future conditional verbs such as “will,” “would,” “should,” “could” or “may,” or by variations of such words or by similar expressions. Such forward-looking statements include, but are not limited to, statements about the possible benefits of the business combination transaction involving Taylor Capital and MB Financial, including future financial and operating results, the combined company’s plans, objectives, expectations and intentions and other statements that are not historical facts. These forward-looking statements are subject to numerous assumptions, risks and uncertainties which change over time. In addition to factors discussed in this joint proxy statement/prospectus under “Risk Factors” and factors previously disclosed in MB Financial’s and Taylor Capital’s reports filed with the SEC, the following factors, among others, could cause actual results to differ materially from forward-looking statements:
expected revenues, cost savings, synergies and other benefits from the merger might not be realized within the expected time frames or at all, and costs or difficulties relating to integration matters, including, but not limited to, customer and employee retention, might be greater than expected;
the requisite stockholder and regulatory approvals for the merger might not be obtained;
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, which could necessitate additional provisions for loan losses; 
results of examinations by regulatory authorities, including the possibility that any such regulatory authorities may, among other things, require increases in the allowance for loan losses or write-downs of assets;
competitive pressures among depository institutions;
interest rate movements and their impact on customer behavior and net interest margin;
the impact of repricing and competitors’ pricing initiatives on loan and deposit products; 
fluctuations in real estate values;
changes in both companies’ businesses during the period between now and the completion of the merger may have adverse impacts on the combined company; 
the ability to adapt successfully to technological changes to meet customers’ needs and developments in the market place; 
MB Financial’s ability to realize the residual values of its direct finance, leveraged and operating leases; 
the ability to access cost-effective funding; 
changes in financial markets; 

26


changes in economic conditions in general and in the Chicago metropolitan area in particular; 
the costs, effects and outcomes of litigation;
new legislation or regulatory changes, including, but not limited to, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and regulations adopted thereunder, changes in capital requirements pursuant to the Dodd-Frank Act and the implementation of the Basel III capital standards, other governmental initiatives affecting the financial services industry and changes in federal and/or state tax laws or interpretations thereof by taxing authorities;
changes in accounting principles, policies or guidelines;
future acquisitions by MB Financial of other depository institutions or lines of business; and
future goodwill impairment due to changes in MB Financial’s business, changes in market conditions, or other factors.
For any forward-looking statements made in this joint proxy statement/prospectus or in any documents incorporated by reference into this joint proxy statement/prospectus, MB Financial and Taylor Capital claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on these statements, which speak only as of the date of this joint proxy statement/prospectus or the date of the applicable document incorporated by reference in this joint proxy statement/prospectus. MB Financial and Taylor Capital do not undertake to update forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the dates on which the forward-looking statements are made. All subsequent written and oral forward-looking statements concerning the merger or other matters addressed in this joint proxy statement/prospectus and attributable to MB Financial, Taylor Capital or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this joint proxy statement/prospectus.



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SELECTED HISTORICAL AND PRO FORMA FINANCIAL INFORMATION
Selected Historical Financial Data of MB Financial and Taylor Capital
The following tables set forth selected historical financial and other data of MB Financial and Taylor Capital for the periods and as of the dates indicated. The information as of December 31, 2012 and 2011 and for the years ended December 31, 2012, 2011 and 2010 is derived in part from and should be read together with the audited consolidated financial statements and notes thereto of MB Financial and Taylor Capital incorporated by reference in this joint proxy statement/prospectus from their Annual Reports on Form 10-K for the year ended December 31, 2012. The information as of December 31, 2010, 2009 and 2008 and for the years ended December 31, 2009 and 2008 is derived in part from audited consolidated financial statements and notes thereto of MB Financial and Taylor Capital that are not incorporated by reference in this joint proxy statement/prospectus. The information as of and for the six months ended June 30, 2013 and 2012 is derived in part from and should be read together with MB Financial’s and Taylor Capital’s unaudited financial statements and notes thereto incorporated by reference in this document from their Quarterly Reports on Form 10-Q for the quarter ended June 30, 2013. In the opinion of management of each of MB Financial and Taylor Capital, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results of operations of the respective companies for the unaudited periods have been made. The selected data presented below for the six months ended June 30, 2013 are not necessarily indicative of the results that may be expected for future periods.
On August 10, 2009, MB Financial sold its merchant card processing business.  In accordance with accounting principles generally accepted in the United States of America (which we refer to as “GAAP”), the assets, liabilities, results of operations, including a pre-tax gain of $10.2 million, and cash flows of MB Financial’s merchant card processing business have been shown separately as discontinued operations in the consolidated balance sheets, consolidated statements of operations, and consolidated statements of cash flows for all periods presented.
Certain of the selected financial data of MB Financial and Taylor Capital in the tables below contain information determined by methods other than in accordance with GAAP. This information consists of net interest margin on a fully tax-equivalent basis. The management of each company believes that it is a standard practice in the banking industry to present net interest margin on a fully tax-equivalent basis, and accordingly believes that providing this measure may be useful for peer comparison purposes. 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. Reconciliations of net interest margin on a fully tax-equivalent basis to net interest margin are contained in the selected financial data table of each company.

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Selected Historical Financial Data of MB Financial
 
As of or for the Six Months
Ended June 30,
 
As of or for the Year Ended December 31,
 
 
2013
 
2012
 
2012
 
2011
 
2010 (1)
 
2009 (2)
 
2008
 
 
(Dollars in thousands, except per share data)
Statement of Income Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
$
149,246

 
$
175,033

 
$
335,310

 
$
384,560

 
$
429,640

 
$
393,538

 
$
413,788

 
Interest expense
 
14,081

 
23,836

 
42,522

 
59,287

 
89,868

 
142,986

 
192,900

 
Net interest income
 
135,165

 
151,197

 
292,788

 
325,273

 
339,772

 
250,552

 
220,888

 
Provision for credit losses
 
500

 
3,100

 
(8,900
)
 
120,750

 
246,200

 
231,800

 
125,721

 
Net interest income after provision
for credit losses
 
134,665

 
148,097

 
301,688

 
204,523

 
93,572

 
18,752

 
95,167

 
Noninterest income
 
79,327

 
46,761

 
111,599

 
109,106

 
185,756

 
127,154

 
80,393

 
Noninterest expenses
 
143,367

 
134,165

 
286,436

 
269,633

 
258,776

 
223,750

 
183,390

 
Income (loss) before income taxes
 
70,625

 
60,693

 
126,851

 
43,996

 
20,552

 
(77,844
)
 
(7,830
)
 
Applicable income tax expense
(benefit)
 
20,426

 
17,464

 
36,477

 
5,268

 
24

 
(45,265
)
 
(23,555
)
 
Income (loss) from continuing
operations
 
50,199

 
43,229

 
90,374

 
38,728

 
20,528

 
(32,579
)
 
15,725

 
Income from discontinued
operations, net of income tax
 

 

 

 

 

 
6,453

 
439

 
Net income (loss)
 
50,199

 
43,229

 
90,374

 
38,728

 
20,528

 
(26,126
)
 
16,164

 
Dividends and discount accretion
on preferred shares
 

 
3,269

 
3,269

 
10,414

 
10,382

 
10,298

 
789

 
Net income (loss) available to
common stockholders
 
$
50,199

 
$
39,960

 
$
87,105

 
$
28,314

 
$
10,146

 
$
(36,424
)
 
$
15,375

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common Share Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings (loss) per common
share from continuing operations
 
$
0.92

 
$
0.74

 
$
1.61

 
$
0.52

 
$
0.19

 
$
(1.07
)
 
$
0.43

 
Basic earnings per common share from discontinued operations
 

 

 

 

 

 
0.16

 
0.01

 
Basic earnings (loss) per common
share
 
0.92

 
0.74

 
1.61

 
0.52

 
0.19

 
(0.91
)
 
0.44

 
Diluted earnings (loss) per common
share from continuing operations
 
0.92

 
0.73

 
1.60

 
0.52

 
0.19

 
(1.07
)
 
0.43

 
Diluted earnings per common share
from discontinued operations
 

 

 

 

 

 
0.16

 
0.01

 
Diluted earnings (loss) per common
share
 
0.92

 
0.73

 
1.60

 
0.52

 
0.19

 
(0.91
)
 
0.44

 
Common book value per common
share
 
23.63

 
22.64

 
23.29

 
21.92

 
21.14

 
20.75

 
25.17

 
Weighted average common shares
outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
54,423,992

 
54,165,286

 
54,270,297

 
54,057,158

 
52,724,715

 
40,042,655

 
34,706,092

 
Diluted
 
54,802,427

 
54,431,491

 
54,505,976

 
54,337,280

 
53,035,047

 
40,042,655

 
35,061,712

 
Dividend payout ratio (3)
 
21.74
%
 
2.74
%
 
8.13
%
 
7.69
%
 
21.05
%
 
NM

 
163.64
%
 
Cash dividends per common
share
 
$
0.20

 
$
0.02

 
$
0.13

 
$
0.04

 
$
0.04

 
$
0.15

 
$
0.72

 
_______________________
(1)
In 2010, MB Financial completed two FDIC-assisted acquisitions.
(2)
In 2009, MB Financial completed four FDIC-assisted acquisitions.
(3)
Not meaningful for 2009 due to the net loss for that year.




29


Selected Historical Financial Data of MB Financial (continued)
 
As of or for the Six Months
Ended June 30,
As of or for the Year Ended December 31,
 
 
2013
 
2012
 
2012
 
2011
 
2010
 
2009
 
2008 (1)
 
 
(Dollars in thousands)
Balance Sheet Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
152,302

 
$
132,737

 
$
176,010

 
$
144,228

 
$
106,726

 
$
136,763

 
$
79,824

 
Investment securities
 
2,232,976

 
2,282,733

 
2,416,977

 
2,509,412

 
1,677,929

 
2,913,594

 
1,400,376

 
Loans, gross
 
5,668,187

 
5,723,249

 
5,766,930

 
5,950,995

 
6,617,811

 
6,524,547

 
6,228,563

 
Allowance for loan losses
 
123,685

 
121,756

 
124,204

 
126,798

 
192,217

 
177,072

 
144,001

 
Loans held for sale
 
2,528

 
2,290

 
7,492

 
4,727

 

 

 

 
Total assets
 
9,369,659

 
9,489,566

 
9,571,805

 
9,833,072

 
10,320,364

 
10,865,393

 
8,819,763

 
Deposits
 
7,445,396

 
7,470,709

 
7,542,697

 
7,647,607

 
8,152,958

 
8,683,276

 
6,495,571

 
Short-term and long-term borrowings
 
293,333

 
482,829

 
336,652

 
486,218

 
553,917

 
655,266

 
960,085

 
Junior subordinated notes issued to
capital trusts
 
152,065

 
158,521

 
152,065

 
158,538

 
158,571

 
158,677

 
158,824

 
Stockholders’ equity
 
1,296,081

 
1,237,751

 
1,275,770

 
1,393,027

 
1,344,786

 
1,251,180

 
1,068,824

 
Performance Ratios:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets(1)
 
1.08
%
 
0.90
%
 
0.95
 %
 
0.39
%
 
0.20
%
 
(0.27
)%
 
0.20
%
 
Return on average equity(1)
 
7.85

 
6.61

 
6.83

 
2.85

 
1.54

 
(2.32
)
 
1.80

 
Return on average common equity(1)
 
7.85

 
6.61

 
7.05

 
2.43

 
0.89

 
(3.91
)
 
1.74

 
Net interest margin(1)(2)
 
3.33

 
3.62

 
3.49

 
3.75

 
3.72

 
2.85

 
3.03

 
Tax-equivalent effect(1)
 
0.27

 
0.23

 
0.24

 
0.15

 
0.11

 
0.12

 
0.13

 
Net interest margin - fully tax-equivalent
basis(1)(2)
 
3.60

 
3.85

 
3.73

 
3.90

 
3.83

 
2.97

 
3.16

 
Loans to deposits
 
76.13

 
76.61

 
76.46

 
77.82

 
81.17

 
75.14

 
95.89

 
Asset Quality Ratios:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-performing loans to total loans (3)
 
2.03
%
 
1.98
%
 
2.03
 %
 
2.17
%
 
5.48
%
 
4.16
 %
 
2.34
%
 
Non-performing assets to total assets (4)
 
1.59

 
1.72

 
1.62

 
2.12

 
4.21

 
0.03

 
1.71

 
Allowance for loan losses to total loans
 
2.18

 
2.13

 
2.15

 
2.13

 
2.90

 
2.71

 
2.31

 
Allowance for loan losses to
non-performing loans (3)
 
107.32

 
107.25

 
106.17

 
98.00

 
53.03

 
65.26

 
98.67

 
Net loan charge-offs to average loans
 
0.12

 
0.36

 
(0.02
)
 
2.90

 
3.42

 
3.09

 
0.79

 
Liquidity and Capital Ratios:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tier 1 capital to risk-weighted assets
 
15.22
%
 
15.45
%
 
14.73
 %
 
17.34
%
 
15.75
%
 
13.51
 %
 
12.07
%
 
Total capital to risk-weighted assets
 
16.48

 
17.53

 
16.62

 
19.39

 
17.75

 
15.45

 
14.08

 
Tier 1 capital to average assets
 
11.19

 
10.46

 
10.50

 
11.73

 
10.66

 
8.71

 
9.85

 
Average equity to average assets
 
13.76

 
13.46

 
13.35

 
13.65

 
12.65

 
11.51

 
10.90

 
Other:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Banking facilities
 
84

 
87

 
86

 
88

 
90

 
87

 
72

 
Full time equivalent employees
 
1,727

 
1,703

 
1,758

 
1,684

 
1,703

 
1,638

 
1,342

 
____________________
(1)
Ratios for the six months ended June 30, 2013 and 2012 are annualized.
(2)
Net interest margin represents net interest income from continuing operations as a percentage of average interest earning assets.
(3)
Non-performing loans include loans accounted for on a non-accrual basis and accruing loans contractually past due 90 days or more as to interest or principal.  Non-performing loans excludes purchased credit-impaired loans that were acquired as part of the Heritage, InBank, Corus, Benchmark, Broadway, and New Century FDIC-assisted transactions.  See Note 5 in the notes to consolidated financial statements contained under Item 8. Financial Statements and Supplementary Data in MB Financial’s Annual Report on Form 10-K for the year ended December 31, 2012, which is incorporated by reference into this joint proxy statement/prospectus. See “Where You Can Find More Information.”
(4)
Non-performing assets include non-performing loans, other real estate owned and other repossessed assets.  Non-performing assets exclude other real estate owned that is related to the Heritage, InBank, Benchmark, Broadway, and New Century FDIC-assisted transactions.  See Note 5 in the notes to consolidated financial statements contained under Item 8. Financial Statements and Supplementary Data in MB Financial’s Annual Report on Form 10-K for the year ended December 31, 2012, which is incorporated by reference into this joint proxy statement/prospectus. See “Where You Can Find More Information.”


30



Selected Historical Financial Data of Taylor Capital
 
As of or for the Six Months
Ended June 30,
 
As of or for the Year Ended December 31,
 
 
2013
 
2012
 
2012
 
2011
 
2010
 
2009
 
2008
 
 
(Dollars in thousands, except per share data)
Statement of Income Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
$
95,649

 
$
92,272

 
$
186,148

 
$
188,060

 
$
208,516

 
$
220,030

 
$
204,448

 
Interest expense
 
13,884

 
20,092

 
36,262

 
53,646

 
72,442

 
97,119

 
112,097

 
Net interest income
 
81,765

 
72,180

 
149,886

 
134,414

 
136,074

 
122,911

 
92,351

 
Provision for credit losses
 
1,000

 
7,450

 
9,550

 
49,258

 
143,127

 
89,611

 
144,158

 
Net interest income (loss) after provision for credit losses
 
80,765

 
64,730

 
140,336

 
85,156

 
(7,053
)
 
33,300

 
(51,807
)
 
Other income
 
85,820

 
55,835

 
155,047

 
49,242

 
72,683

 
33,591

 
12,437

 
Other expenses
 
112,026

 
80,554

 
191,737

 
116,393

 
118,236

 
97,607

 
93,370

 
Income (loss) before income taxes
 
54,559

 
40,011

 
103,646

 
18,005

 
(52,606
)
 
(30,716
)
 
(132,740
)
 
Applicable income tax expense
(benefit)
 
21,685

 
16,317

 
41,745

 
(73,110
)
 
1,217

 
834

 
(8,212
)
 
Net income (loss)
 
32,874

 
23,694

 
61,901

 
91,115

 
(53,823
)
 
(31,550
)
 
(124,528
)
 
Dividends and discount accretion
on preferred shares
 
(7,441
)
 
(3,490
)
 
(7,012
)
 
(19,646
)
 
(25,455
)
 
(11,483
)
 
(18,830
)
 
Net income (loss) available to
common stockholders
 
$
25,433

 
$
20,204

 
$
54,889

 
$
71,469

 
$
(79,278
)
 
$
(43,033
)
 
$
(143,358
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common Share Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings (loss) per common
share
 
0.84

 
0.68

 
1.84

 
3.45

 
(5.27
)
 
(4.1
)
 
(13.72
)
 
Diluted earnings (loss) per common
share
 
0.83

 
0.66

 
1.79

 
3.45

 
(5.27
)
 
(4.1
)
 
(13.72
)
 
Common book value per common
share
 
12.22

 
11.66

 
12.36

 
10.84

 
3.97

 
9.02

 
13.47

 
Weighted average common shares
outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
28,641,738

 
28,114,855

 
28,294,884

 
19,474,273

 
15,049,868

 
10,492,911

 
10,450,177

 
Diluted
 
28,977,242

 
28,870,106

 
29,016,717

 
19,499,275

 
15,049,868

 
10,492,911

 
10,450,177

 
Dividend payout ratio (1)
 
%
 
%
 
%
 
%
 
%
 
%
 
N.M.

 
Cash dividends per common
share
 
$

 
$

 
$

 
$

 
$

 
$

 
$
0.10

 
____________________
(1) Not meaningful for 2008 due to the net loss for that year.

31


Selected Historical Financial Data of Taylor Capital (continued)

 
As of or for the Six Months
Ended June 30,
 
As of or for the Year Ended December 31,
 
 
2013
 
2012
 
2012
 
2011
 
2010
 
2009
 
2008
 
 
(Dollars in thousands)
Balance Sheet Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
97,764

 
$
105,315

 
$
165,921

 
$
120,075

 
$
80,273

 
$
48,420

 
$
52,762

 
Investment securities
 
1,434,326

 
1,240,405

 
1,267,757

 
1,279,676

 
1,254,477

 
1,271,271

 
1,094,594

 
Loans, gross
 
3,302,548

 
2,981,827

 
3,168,303

 
2,928,299

 
2,835,338

 
2,953,475

 
3,233,261

 
Allowance for loan losses
 
83,576

 
86,992

 
82,191

 
103,744

 
124,568

 
106,185

 
128,548

 
Loans held for sale
 
693,937

 
255,693

 
938,379

 
185,984

 
259,020

 
81,853

 

 
Total assets
 
5,901,370

 
4,797,101

 
5,802,410

 
4,685,810

 
4,483,854

 
4,403,502

 
4,388,889

 
Deposits
 
3,692,426

 
3,184,610

 
3,528,342

 
3,123,211

 
3,026,906

 
2,976,800

 
3,131,046

 
Short-term and long-term borrowings
 
1,428,855

 
1,011,229

 
1,496,385

 
1,005,281

 
1,104,843

 
1,020,364

 
792,863

 
Junior subordinated notes issued to
capital trusts
 
86,607

 
86,607

 
86,607

 
86,607

 
86,607

 
86,607

 
86,607

 
Stockholders’ equity
 
560,274

 
436,408

 
559,603

 
409,528

 
208,801

 
258,806

 
307,087

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Performance Ratios:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets (1)
 
1.15
 %
 
0.99
%
 
1.24
%
 
2.06
%
 
(1.2
)%
 
(0.07
)%
 
(3.27
)%
 
Return on average equity (1)
 
11.45

 
11.50

 
14.02

 
36.73

 
(19.54
)
 
(10.74
)
 
(51.01
)
 
Return on average common equity (1)
 
13.73

 
13.05

 
16.76

 
65.19

 
(17.1
)
 
(31.65
)
 
(66.05
)
 
Net interest margin (2)