April 21 and 22, 2005 Chicago, IL

THE REINVESTMENT FUNDAn Informed Discussion:

Achieving Sustainability, Scale, and Impact in Community Development Finance

Presentation to the Federal Reserve Bank of Chicago and The Aspen Institute

April 21st, 2005

Mission

.

The Reinvestment Fund builds wealth and opportunity for low-wealth communities and individuals through the

promotion of socially and environmentally responsible development.

Loans, equity

Investments, and grants

Products and partnerships

that open new markets

Data and

policy analysis

Knowledge Innovation

Capital

TRF Profile

Over $400 million in cumulative investments and loans Currently manage $260 million in capital, with over 850 investors FY2004: $66 million in closed loans and investments

ResidentialReal Estate

CommercialReal Estate

CommunityFacilities

Small Business

Private EquitySustainable

Energy

Policy, Research & Assessment

Business Lines:

Capital

Total Investments:• 625 Individual• 104 Religious• 54 Civic Organizations and Corporations• 42 Banks• 29 Foundations

Number of Investors

Source of Funds, by dollars

Knowledge

We provide high quality research, information and policy ideas to government, nonprofit institutions, and private sector partners.

Innovation

Regional ChoiceHigh ValueSteady Transitional Up

TransitionalTransitional DownDistressed

ReclamationNon Residential

Transitional

Linking Private Equity

& HR Assistance

Distressed Urban

Markets Data Product

Pennsylvania Fresh

Food Financing

Initiative

Growth In Phase One

The Foundational Years (1985-1990)

• Attitude Towards Permanence • Regional Market Place as Geographical Unit• Broad Capital and Civic Expression • Not Owned by any Single Class of Investors • Flexible but Disciplined Culture

Growth In Phase Two

A Well Run Non-Profit (1991-2000)

• Movement Toward Capital Predictability • Internalizing the Lessons of Major Mistakes • Learning to Listen to the Market • Breaking the Rules of the CD Paradigm• Talent Attraction and Acquisition

Growth in Phase Three

Structuring A Business Model (2001- )

• Articulating A Sustainability Strategy• Understanding the Value of Information • Making Back Stage into Front Stage• Geographical Expansion • Broadening Capital Market Access

Sustainability Principles

Pricing Model

Smart Subsidy

Taking Advantage of Value We Create

Impact Transparency

Civic and Commercial Networks

Balance Sheet for Growth

Valued Products

TRF Sustainability

An Economic Engine

Regional Choice

High Value

Steady

Transitional

Distressed

Reclamation

Little Sales Activity*

Non Residential

* Less than 5 Sales per Block Group 1/02-7/03

Market Value Analysis Tools

Philadelphia 2003

Camden 2001

High ValueStrong ValueSteadyTransitionalDistressed Public MarketReclamation

Back Stage to Front Stage: Automation and Brand

Geographical Expansion

Capital Market AccessPriority Factors in Liquidity Options

April 21 and 22, 2005 Chicago, IL

Building a Better Business ModelBuilding a Better Business Model

Thomas Munoz, Senior Vice PresidentThomas Munoz, Senior Vice PresidentApril 18, 2005April 18, 2005

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MB Financial SnapshotMB Financial Snapshot

2003 2004 Change

Assets $4,355 $5,254 +20.6%

Loans $2,826 $3,346 +18.4%

Deposits $3,432 $3,962 +15.4%

Net income $53.4 $64.4 +20.7%

Fully diluted EPS $1.96 $2.25 +14.8%

Return on equity 14.82% 14.88% +0.06%

Cash return on tangible equity 18.79% 20.69% +1.90%

Net interest margin 3.80% 3.79% - 0.01%

Efficiency ratio 55.70% 53.68% - 2.02%

Non- performing loan ratio 0.75% 0.71% - 0.04%

(Dollars amounts in millions, except per share data)

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M & A HighlightsM & A Highlights2001 to 20042001 to 2004

AssetsAssets

1990 to 2000 (10 mergers and acquisitions)1990 to 2000 (10 mergers and acquisitions) $1.9 billion$1.9 billion

Acquired FSL Holdings, Inc.Acquired FSL Holdings, Inc. $222 million$222 millionApril 2001April 2001

MidCity Financial and MB Financial merge MidCity Financial and MB Financial merge MOEMOENovember 2001November 2001

Acquired Lincolnwood Financial Corp.Acquired Lincolnwood Financial Corp. $228 million$228 millionApril 2002April 2002

Acquired LaSalle Systems Leasing Acquired LaSalle Systems Leasing $92 million$92 millionAugust 2002August 2002

Acquired South Holland BancorpAcquired South Holland Bancorp $560 million$560 millionFebruary 2003February 2003

Divested Abrams Centre Bancshares Divested Abrams Centre Bancshares $98 million$98 millionMay 2003May 2003

Acquired First SecurityFed Financial Acquired First SecurityFed Financial $567 million$567 millionMay 2004May 2004

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Chicagoland LocationsChicagoland Locations

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Customer FocusedCustomer Focused

We have always been Chicago based

Better convenience through convenient branch network

Great products

Third in Cook County in small loans to businesses; 58th in U.S. (according to American Banker)

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Customer FocusedCustomer Focused

We speak many languagesWe speak many languages

Automated voice response system speaks five languagesAutomated voice response system speaks five languages

Marketing messages and materials in multiple languagesMarketing messages and materials in multiple languages

Arabic Hindi Serbo-Croatian

Assyrian Italian Slovenian

Bulgarian Kannada Spanish

Croatian Korean Tagalog

Egyptian Pilipino Tamil

French Polish Ukrainian

German Portuguese Urdu

Greek Romanian Yiddish

Gujrati Russian Yoruba

Hebrew Serbian Yugoslavian

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Korean Bank

Ukrainian Division

Hispanic Banking Initiative

““Bank within the Bank”Bank within the Bank”

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““Outstanding” CRA rating from OCCOutstanding” CRA rating from OCC

Lending testLending test OutstandingOutstanding

Service testService test OutstandingOutstanding

Investment testInvestment test OutstandingOutstanding

Community Oriented Community Oriented

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Community OrientedCommunity Oriented

Community development investments and loans Community development investments and loans generated by MB Financial Community Development generated by MB Financial Community Development Corporation in 2004Corporation in 2004

Lending: Disbursements $ 50,132,000 Lending: Commitments 7,875,000 Investments: Grants 215,744 Investments: Direct 10,986,900 Federal Home Loan Bank 2,993,326

AHP Approved Grants 431 units

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Strategic Allies and PartnershipsStrategic Allies and Partnerships

“Renting” the Bank Platform Housing

Neighborhood Housing Services Loan Servicing by the bank Investor Remittances by the bank Loan Origination in partnership with bank Development of Investment vehicles to generate capital

Small and Micro-enterprise Financing ACCION Chicago

Loan Servicing by the bank Housed in bank office Partnership Lending with bank products Joint marketing and training for customers

Adds Efficiency NHS saved $600,000.00 plus ACCION Chicago saved $80,000.00 plus

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Small Business Lending – Retail Platform DeliverySmall Business Lending – Retail Platform Delivery

Competency development Constant Training of Retail sales staff

Cultural Shift management New employees and merger partners

Incentive-based compensation Part of the overall sales and service-delivery

Product Orientation Suite of Credit and Deposit Services Marketed through individual sales actions

Supported by Commercial Loan Officers

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Small Business Lending – Retail Platform DeliverySmall Business Lending – Retail Platform Delivery

Centralized Underwriting and Processing Within Retail Oversight and control Staffed with Commercial Credit expertise Remote documentation production

Transparent to the customer

Credit Limits Loans up to $1 million All Collateral types Credit Policy segmentation and review

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Small Business Lending – Retail Platform DeliverySmall Business Lending – Retail Platform Delivery

Delivery Differentiation Enables true Commercial Credit to be handled

within the Commercial Department Subjective Credit review

No Credit Scoring “models” Allows for more flexibility

Expands the deposit services growth Deposit services, cash management tools, etc. as

first offer 80% are non-borrowers

Provides further “granularity” to the bank’s overall commercial credit balances Enhances returns Spreads risk among variety of types

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Small Business Lending – Retail Platform DeliverySmall Business Lending – Retail Platform Delivery

Challenges No “instant answer”

Average 3-day decision Capacity demands Staff Confidence

Creating Small Business Sales Motivation Internal Acceptance

New/expanded Credit Authority Performance benefit

Lower than industry charge-off/losses

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Small Business Lending – Retail Platform DeliverySmall Business Lending – Retail Platform Delivery

Outcomes Grew platform performance

Expanded Deposit relationships (stickiness) Added fee revenue

Grew outstanding credits 200 to more than 1000 in four years $10 million to $70 million in credits in four years

Added franchise value to the Retail platform Added 4,000 net new small business demand deposit

accounts in four years Grew Treasury Management Revenue 64% in four

years

Building a Better Business ModelBuilding a Better Business Model

Thomas Munoz, Senior Vice PresidentThomas Munoz, Senior Vice PresidentApril 18, 2005April 18, 2005

April 21 and 22, 2005 Chicago, IL