---

UNITED STATES

SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period
ended March 31, 2005

or

TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition
period from to

Commission file number
0-18121

MAF BANCORP, INC.

(Exact name of
registrant as specified in its charter)

|                                                                                                         |                                                   
|-------------------------------------------------------------------------------------------------------- | --------------------------------------------------
|Delaware
(State of Incorporation)                                                                        | 36-3664868
  (I.R.S. Employer
 Identification No.)
|                                                                                                         |                                                   
|                                                                                                         |                                                   
|                                                                                                         |                                                   
|                                                                                                         |                                                   
|55th Street & Holmes Avenue
         Clarendon Hills, Illinois
 (Address of Principal Executive Offices) | 60514-1500
(Zip Code)                             

Registrants
telephone number: (630) 325-7300

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Indicate by checkmark whether the
registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).

The number of shares of common stock
outstanding as of May 6, 2005: 32,287,504

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Page

# Part I. Financial
Information

|        |                                                                                       |  |   
|------- | ------------------------------------------------------------------------------------- |  | --
|Item 1. | Financial Statements                                                                  |  | 3 
|Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations |  | 12
|Item 3. | Quantitative and Qualitative Disclosures About Market Risk                            |  | 27
|Item 4. | Controls and Procedures                                                               |  | 27
|        |                                                                                       |  |   

# Part II - Other
Information

|           |                                                             |  |   
|---------- | ----------------------------------------------------------- |  | --
|Item 1.    | Legal Proceedings.                                          |  | 28
|Item 2.    | Unregistered Sales of Equity Securities and Use of Proceeds |  | 28
|Item 3.    | Defaults Upon Senior Securities.                            |  | 28
|Item 4.    | Submission of Matters to a Vote of Security Holders.        |  | 28
|Item 5.    | Other Information.                                          |  | 28
|Item 6.    | Exhibits                                                    |  | 28
|SIGNATURES |                                                             |  | 30
|           |                                                             |  |   

2

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Part I. Financial
Information

Item 1. Financial Statements

MAF BANCORP, INC. AND
SUBSIDIARIES Consolidated Statements
of Financial Condition(Dollars in thousands) (Unaudited)

|                                                                                                                                   | March 31,
 2005 | December 31,
  2004
|---------------------------------------------------------------------------------------------------------------------------------- | --------------- | -------------------
|Assets                                                                                                                             |                 |                    
|Cash and due from banks                                                                                                            |                 |                    
|Interest-bearing deposits                                                                                                          |                 |                    
|Federal funds sold                                                                                                                 |                 |                    
|                                                                                                                                   |                 |                    
|Total cash and cash equivalents                                                                                                    |                 |                    
|Investment securities available for sale, at fair value                                                                            |                 |                    
|Stock in Federal Home Loan Bank of Chicago, at cost                                                                                |                 |                    
|Mortgage-backed securities available for sale, at fair value                                                                       |                 |                    
|Mortgage-backed securities held to maturity (fair value $268,927 and $244,615)                                                     |                 |                    
|Loans receivable held for sale                                                                                                     |                 |                    
|Loans receivable, net                                                                                                              |                 |                    
|Allowance for loan losses                                                                                                          |                 |                    
|                                                                                                                                   |                 |                    
|Loans receivable, net of allowance for loan losses                                                                                 |                 |                    
|                                                                                                                                   |                 |                    
|Accrued interest receivable                                                                                                        |                 |                    
|Foreclosed real estate                                                                                                             |                 |                    
|Real estate held for development or sale                                                                                           |                 |                    
|Premises and equipment, net                                                                                                        |                 |                    
|Other assets                                                                                                                       |                 |                    
|Goodwill                                                                                                                           |                 |                    
|Intangibles                                                                                                                        |                 |                    
|                                                                                                                                   |                 |                    
|Total Assets                                                                                                                       |                 |                    
|                                                                                                                                   |                 |                    
|Liabilities and Stockholders' Equity                                                                                               |                 |                    
|Liabilities                                                                                                                        |                 |                    
|Deposits                                                                                                                           |                 |                    
|Borrowed funds                                                                                                                     |                 |                    
|Advances by borrowers for taxes and insurance                                                                                      |                 |                    
|Accrued expenses and other liabilities                                                                                             |                 |                    
|                                                                                                                                   |                 |                    
|Total liabilities                                                                                                                  |                 |                    
|                                                                                                                                   |                 |                    
|Stockholders' equity                                                                                                               |                 |                    
|Preferred stock, $.01 par value; authorized 5,000,000 shares; none issued or
outstanding                                           |                 |                    
|Common stock, $.01 par value; 80,000,000 shares authorized; 33,634,642 shares issued; 32,558,252 and 33,273,235 shares outstanding |                 |                    
|Additional paid-in capital                                                                                                         |                 |                    
|Retained earnings, substantially restricted                                                                                        |                 |                    
|Stock in Gain Deferral Plan; 245,467 shares at December 31, 2004                                                                   |                 |                    
|Accumulated other comprehensive loss, net of tax                                                                                   |                 |                    
|Treasury stock, at cost; 1,076,390 and 361,407 shares                                                                              |                 |                    
|                                                                                                                                   |                 |                    
|Total stockholders' equity                                                                                                         |                 |                    
|                                                                                                                                   |                 |                    
|                                                                                                                                   |                 |                    
|                                                                                                                                   |                 |                    

See
accompanying notes to unaudited consolidated financial statements.

3

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MAF BANCORP, INC. AND
SUBSIDIARIES

Consolidated Statements
of Operations(Dollars in thousands,
except per share data)(Unaudited)

|                                                    | Three Months Ended,
     March 31,
|--------------------------------------------------- | ----------------------------------
|
|Interest income:                                    |                                   
|Loans receivable                                    |                                   
|Mortgage-backed securities available for sale       |                                   
|Mortgage-backed securities held to maturity         |                                   
|Federal Home Loan Bank of Chicago stock             |                                   
|Investment securities available for sale            |                                   
|Interest-bearing deposits and federal funds sold    |                                   
|                                                    |                                   
|Total interest income                               |                                   
|                                                    |                                   
|Interest expense:                                   |                                   
|Deposits                                            |                                   
|Borrowed funds                                      |                                   
|                                                    |                                   
|Total interest expense                              |                                   
|                                                    |                                   
|Net interest income                                 |                                   
|Provision for loan losses                           |                                   
|                                                    |                                   
|Net interest income after provision for loan losses |                                   
|                                                    |                                   
|Non-interest income:                                |                                   
|Net gain on sale of:                                |                                   
|Loans receivable                                    |                                   
|Mortgage-backed securities                          |                                   
|Investment securities                               |                                   
|Foreclosed real estate                              |                                   
|Income from real estate operations                  |                                   
|Deposit account service charges                     |                                   
|Loan servicing fee income, net                      |                                   
|Valuation recovery on mortgage servicing rights     |                                   
|Other loan fees                                     |                                   
|Brokerage commissions                               |                                   
|Other                                               |                                   
|                                                    |                                   
|Total non-interest income                           |                                   
|                                                    |                                   
|Non-interest expense:                               |                                   
|Compensation and benefits                           |                                   
|Office occupancy and equipment                      |                                   
|Advertising and promotion                           |                                   
|Data processing                                     |                                   
|Amortization of core deposit intangibles            |                                   
|Other                                               |                                   
|                                                    |                                   
|Total non-interest expense                          |                                   
|                                                    |                                   
|Income before income taxes                          |                                   
|Income taxes                                        |                                   
|                                                    |                                   
|Net income                                          |                                   
|                                                    |                                   
|Basic earnings per share                            |                                   
|                                                    |                                   
|Diluted earnings per share                          |                                   
|                                                    |                                   

See
accompanying notes to unaudited consolidated financial statements.

4

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MAF BANCORP, INC. AND
SUBSIDIARIES

Consolidated Statement
of Changes in Stockholders Equity (Dollars in thousands) (Unaudited)

|                                                                    | Three Months Ended March 31, 2005
|------------------------------------------------------------------- | ---------------------------------
|
|Balance at December 31, 2004                                        |                                  
|                                                                    |                                  
|Comprehensive income:                                               |                                  
|Net income                                                          |                                  
|Other comprehensive income      (loss), net of tax:                 |                                  
|Unrealized holding loss during               the period             |                                  
|Reclassification adjustment of         gains included in net income |                                  
|                                                                    |                                  
|Total comprehensive income                                          |                                  
|                                                                    |                                  
|Exercise of 19,010 stock options,                                   |                                  
|and reissuance of treasury stock                                    |                                  
|Tax benefits from stock-related                                     |                                  
|compensation                                                        |                                  
|Purchase of 644,000 shares of                                       |                                  
|treasury stock                                                      |                                  
|Cash dividends declared, $0.23 per                                  |                                  
|share                                                               |                                  
|Distribution of Gain Deferral Plan                                  |                                  
|shares                                                              |                                  
|Dividends paid to Gain Deferral Plan                                |                                  
|                                                                    |                                  
|Balance at March 31, 2005                                           |                                  
|                                                                    |                                  

See
accompanying notes to unaudited consolidated financial statements.

5

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MAF BANCORP, INC. AND
SUBSIDIARIES

Consolidated Statements
of Cash Flows(Dollar in thousands) (Unaudited)

|                                                                                                     | Three Months Ended
    March 31,
|---------------------------------------------------------------------------------------------------- | --------------------------------
|
|Operating activities:                                                                                |                                 
|Net income                                                                                           |                                 
|Adjustments to reconcile net income to net cash provided by                                          |                                 
|(used in) operating activities:                                                                      |                                 
|Amortization of premiums, discounts and deferred loan fees                                           |                                 
|Provision for loan losses                                                                            |                                 
|FHLB of Chicago stock dividends                                                                      |                                 
|Net gain on sale of loans receivable                                                                 |                                 
|Net gain on sale of investment and mortgage-backed securities                                        |                                 
|Net gain on real estate held for development or sale                                                 |                                 
|Amortization and impairment (recovery) of mortgage servicing rights, net                             |                                 
|Depreciation and amortization                                                                        |                                 
|Amortization of core deposit intangibles                                                             |                                 
|Deferred income tax expense (benefit)                                                                |                                 
|Decrease in accrued interest receivable                                                              |                                 
|Net (increase) decrease in other assets and liabilities                                              |                                 
|Loans originated and purchased for sale                                                              |                                 
|Sale of loans originated and purchased for sale                                                      |                                 
|                                                                                                     |                                 
|Net cash provided by operating activities                                                            |                                 
|                                                                                                     |                                 
|Investing activities:                                                                                |                                 
|Loans originated and purchased for investment                                                        |                                 
|Principal repayments on loans receivable                                                             |                                 
|Principal repayments on mortgage-backed securities                                                   |                                 
|Proceeds from maturities of investment securities available for sale                                 |                                 
|Proceeds from sale of:                                                                               |                                 
|Investment securities available for sale                                                             |                                 
|Mortgage-backed securities available for sale                                                        |                                 
|Real estate held for development or sale, including foreclosed real estate                           |                                 
|Stock in Federal Home Loan Bank of Chicago                                                           |                                 
|Purchases of:                                                                                        |                                 
|Investment securities available for sale                                                             |                                 
|Mortgage-backed securities available for sale                                                        |                                 
|Real estate held for development or sale, including foreclosed real estate                           |                                 
|Premises and equipment                                                                               |                                 
|                                                                                                     |                                 
|Net cash used in investing activities                                                                |                                 
|                                                                                                     |                                 
|Financing Activities:                                                                                |                                 
|Proceeds from:                                                                                       |                                 
|FHLB of Chicago advances                                                                             |                                 
|Unsecured line of credit                                                                             |                                 
|Repayments of:                                                                                       |                                 
|FHLB of Chicago advances                                                                             |                                 
|Net increase in other borrowings                                                                     |                                 
|Net increase in deposits                                                                             |                                 
|Increase in advances by borrowers for taxes and insurance                                            |                                 
|Proceeds from exercise of stock options                                                              |                                 
|Purchase of treasury stock                                                                           |                                 
|Cash dividends paid                                                                                  |                                 
|                                                                                                     |                                 
|Net cash provided by financing activities                                                            |                                 
|                                                                                                     |                                 
|Decrease in cash and cash equivalents                                                                |                                 
|Cash and cash equivalents at beginning of period                                                     |                                 
|                                                                                                     |                                 
|Cash and cash equivalents at end of period                                                           |                                 
|                                                                                                     |                                 
|Supplemental disclosure of cash flow information:                                                    |                                 
|Cash paid during the year for:                                                                       |                                 
|Interest on deposits and borrowed funds                                                              |                                 
|Income taxes                                                                                         |                                 
|Summary of non-cash transactions:                                                                    |                                 
|Transfer of loans receivable to foreclosed real estate                                               |                                 
|Loans receivable swapped into mortgage-backed securities                                             |                                 
|Transfer of equity lines of credit from loans receivable, net to loans receivable available for sale |                                 

See
accompanying notes to unaudited consolidated financial statements.

6

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MAF BANCORP, INC. AND
SUBSIDIARIES

Notes to Consolidated Financial
Statements Three Months Ended
March 31, 2005 and 2004 (Unaudited)

(1) Basis of Presentation

The
accompanying unaudited consolidated financial statements have been prepared in accordance
with U.S. generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes required by U.S generally accepted
accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting of only
normal recurring accruals) necessary for a fair presentation have been included. The
results of operations for the three months ended March 31, 2005 are not necessarily
indicative of results that may be expected for the year ending December 31, 2005.

The
consolidated financial statements include the accounts of MAF Bancorp, Inc.
(Company), Mid America Bank, fsb including its subsidiaries (Bank)
and MAF Developments, Inc. (MAFD), for the three month periods ended March 31,
2005 and 2004 and as of March 31, 2005 and December 31, 2004. All material intercompany
balances and transactions have been eliminated in consolidation.

(2) Statement of Cash
Flows

For
purposes of reporting cash flows, cash and cash equivalents include cash and due from
banks, interest-bearing deposits and federal funds sold. Generally, federal funds are sold
for one-day periods and interest-bearing deposits mature within one day to three months.

(3) Reclassifications

Certain
reclassifications of 2004 amounts have been made to conform with the current period
presentation.

(4) Earnings Per Share

Earnings
per share is determined by dividing net income for the period by the weighted average
number of shares outstanding. Stock options and restricted stock units are regarded as
potential common stock and are considered in the diluted earnings per share calculations
to the extent that they would have a dilutive effect if converted to common stock.
Weighted average shares used in calculating earnings per share are summarized below for
the periods indicated:

|                               | Three Months Ended March 31,
|------------------------------ | ----------------------------
|
|
|
|Basic earnings per share:      |                             
|Income available to common     |                             
|shareholders                   |                             
|                               |                             
|Effect of dilutive securities: |                             
|Stock options                  |                             
|                               |                             
|Diluted earnings per share:    |                             
|Income available to common     |                             
|shareholders plus assumed      |                             
|conversions                    |                             
|                               |                             

(5) Stock Option Plans

The
Company applies APB Opinion 25, Accounting for Stock Issued to Employees, and
related Interpretations in accounting for its stock option plans. Accordingly,
compensation cost is recognized on restricted stock unit awards, but no compensation
expense has been recognized for stock options granted under its plans. In accordance with
SEC rules, the Company anticipates adopting the fair value method of expense recognition
consistent with SFAS No. 123R Share-Based Payment, as of January 1, 2006. SFAS
No. 123R eliminates the ability to account for stock-based compensation using
APB 25 and requires that such transactions be recognized as compensation cost in the
income statement based on the fair value of stock based awards on the date of the grant.
Had the Company elected to record compensation expense for stock option grants based on
the fair value at the grant dates for stock option awards under those plans consistent
with the method of SFAS No. 148, the Companys net income and earnings per share
would have been reduced to the pro-forma amounts indicated in the table on the next page:

7

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|                                          | Three Months Ended March 31,
|----------------------------------------- | ----------------------------
|
|
|Net income, as reported                   |                             
|Deduct: total stock option employee       |                             
|compensation expense determined using the |                             
|Black-Scholes method for all awards,      |                             
|net of related tax effects                |                             
|                                          |                             
|Pro-forma net income                      |                             
|                                          |                             
|Basic Earnings per Share                  |                             
|As Reported                               |                             
|Pro-forma                                 |                             
|Diluted Earnings Per Share                |                             
|As Reported                               |                             
|Pro-forma                                 |                             
|                                          |                             

(6) Commitments and
Contingencies

At
March 31, 2005, we had outstanding commitments to originate loans of $779.7 million, of
which $197.9 million were fixed-rate loans and $581.8 million were primarily hybrid
adjustable-rate loans with initial fixed-rate terms of 3, 5 or 7 years. Prospective
borrowers had locked the interest rate on $134.8 million of these commitments, of which
$52.6 million were fixed-rate loans, with rates ranging from 5.0% to 7.25%, and $82.2
million were adjustable rate loans with rates ranging from 4.125% to 7.75%. The interest
rates on the remaining commitments of $644.9 million float at current market rates.
Included in the outstanding commitments were $62.5 million of business banking loans. At
March 31, 2005, we had outstanding forward commitments to sell $72.6 million of fixed-rate
mortgage loans and we had outstanding commitments to originate $139.6 million of floating
rate equity lines of credit.

At
March 31, 2005, we had outstanding standby letters of credit, excluding land development,
totaling $68.4 million. Of this amount $32.3 million is comprised of letters of credit to
enhance developers industrial revenue bond financings of commercial real estate in
the Banks market. Additionally, the Company had outstanding standby letters of
credit totaling $5.6 million related to real estate development improvements.

The
Company could face potential loss equal to the contractual amounts of contingent
credit-related financial instruments such as commitments to extend credit, and letters of
credit, if the loans are actually originated or the contracts are fully drawn upon, and
the customers default and the value of any existing collateral becomes worthless.

At
March 31, 2005, we had $13.0 million of credit risk related to loans sold to the Federal
Home Loan Bank Mortgage Partnership Finance Program (MPF), $40.9 million of
loans sold with full recourse to other investors, and approximately $27.0 million of
credit risk related to reinsurance obligations on loans with private mortgage insurance in
force.

(7) Segment Information

The
Company utilizes the management approach for segment reporting. This approach
is based on the way that management of the Company organizes lines of business for making
operating decisions and assessing performance. Currently, the Company has two segments.
The Banking segment includes our lending and deposit gathering operations as well as other
financial services we offer to individual and business customers. The business of our Land
Development segment primarily involves land acquisitions, obtaining necessary zoning and
regulatory approvals and improving raw land into developed residential lots for sale to
builders. All goodwill has been allocated to the Banking segment. Selected segment
information is included in the table on the next page:

8

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|                                        | Three Months Ended March 31,
|--------------------------------------- | ----------------------------
|
|
|
|Interest income                         |                             
|Interest expense                        |                             
|                                        |                             
|Net interest income                     |                             
|Provision for loan losses               |                             
|Non-interest income                     |                             
|Non-interest expense                    |                             
|                                        |                             
|Income (loss) before income       taxes |                             
|Income tax expense (benefit)            |                             
|                                        |                             
|Net income (loss)                       |                             
|                                        |                             
|                                        |                             
|Average assets                          |                             
|                                        |                             

(8) Goodwill and
Intangible Assets

Goodwill
had a net carrying amount of $305.2 million at March 31, 2005. All of the Companys
goodwill is in the Banking segment. The Company evaluates goodwill for impairment at least
annually. An evaluation was completed as of May 31, 2004. No impairment was deemed
necessary as a result of the Companys analysis.

The changes in the net carrying amounts of
intangible assets subject to amortization are as follows:

|                                  | Core 
Deposit Intangibles | Mortgage
ServicingRights(1) | Total
|--------------------------------- | ------------------------- | --------------------------- | -----
|
|Balance at December 31, 2004      |                           |                             | $    
|Additions                         |                           |                             |      
|Amortization expense              |                           |                             |      
|Valuation allowance recovery, net |                           |                             |      
|                                  |                           |                             |      
|Balance at March 31, 2005         |                           |                             | $    
|                                  |                           |                             |      

The following
is a summary of intangible assets subject to amortization:

|                             | March 31, 2005 | December 31, 2004
|---------------------------- | -------------- | -----------------
|
|
|Core deposit intangibles     |                |                  
|Mortgage servicing rights(1) |                |                  
|                             |                |                  
|Total                        |                |                  
|                             |                |                  

---

| | (1) | The carrying amounts for March 31, 2005 and December 31, 2004 are net of
               impairment reserves of $46,000 and $171,000, respectively.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------

Amortization
expense for core deposit intangibles and mortgage servicing rights for the three months
ended March 31, 2005 and estimates for the nine months ending December 31, 2005 and five
years thereafter are as follows. These estimates are based on the net carrying amount of
the Banks core deposit intangibles and mortgage servicing rights as of March 31,
2005.

9

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|                                             | Core 
Deposit Intangibles | Mortgage
Servicing
  Rights
|-------------------------------------------- | ------------------------- | ---------------------------
|
|Aggregate Amortization Expense:              |                           |                            
|For the three months ended March 31, 2005    |                           |                            
|Estimated Amortization Expense:              |                           |                            
|For the nine months ending December 31, 2005 |                           |                            
|For the year ending December 31, 2006        |                           |                            
|For the year ending December 31, 2007        |                           |                            
|For the year ending December 31, 2008        |                           |                            
|For the year ending December 31, 2009        |                           |                            
|For the year ending December 31, 2010        |                           |                            

(9) Post-Retirement Plans

The
Bank sponsors a supplemental executive retirement plan (SERP) for the purpose
of providing certain retirement benefits to executive officers and other corporate
officers approved by the Board of Directors. The Bank also provides employees and
directors post-retirement medical benefits. The components of the net periodic benefit
cost of post-retirement plans are as follows:

|                                      | Three Months Ended March 31,
|------------------------------------- | ----------------------------
|
|
|
|Service cost                          |                             
|Interest cost                         |                             
|Amortization of unrecognized net      |                             
|transition obligation                 |                             
|Amortization of unrecognized prior    |                             
|service cost                          |                             
|Amortization of unrecognized net loss |                             
|                                      |                             
|Net periodic benefit cost             |                             
|                                      |                             

(10) New Accounting
Pronouncements

Other-Than-Temporary
Impairment.In March 2004, the FASB ratified the consensus reached by the Emerging Issues
Task Force on Issue 03-1, The Meaning of Other-Than-Temporary Impairment and Its
Application to Certain Investments (EITF 03-1). EITF 03-1 provides
guidance for determining when an investment is considered impaired, whether that
impairment is other-than-temporary, and measuring an impairment loss. An investment is considered impaired
if the fair value of the investment is less than its cost. Generally, an impairment is
considered other-than-temporary unless: (a) the investor has the ability and intent to
hold an investment for a reasonable period of time sufficient for a forecasted recovery of
fair value up to (or beyond) the cost of the investment; and (b) evidence indicating that
the cost of the investment is recoverable within a reasonable period of time outweighs
evidence to the contrary. If impairment is determined to be other-than-temporary, then an
impairment loss is recognized equal to the difference between the investments cost
and its fair value. The guidance also includes accounting considerations subsequent to
recognition of an other-than-temporary impairment and requires certain disclosures about
unrealized losses that have not been recognized as other-than-temporary impairments.

10

---



With
the release of FASB Staff Position (FSP) EITF Issue 03-1-1 on September 30,
2004, the FASB staff delayed the effective date of the other-than-temporary impairment
evaluation guidance of EITF 03-1 (which was initially to be applied prospectively to all
current and future investments in interim and annual reporting periods beginning after
June 15, 2004). FSP EITF 03-1 delays the effective date of the measurement and recognition
guidance until certain implementation issues are addressed and a final FSP providing
implementation guidance is issued. The disclosure requirements of EITF 03-1 remain in
effect and were presented in Notes 3 and 4 of the 2004 Annual Report on Form 10-K. The
amount of any other-than-temporary impairment that may need to be recognized in the future
will be dependent on market conditions, the occurrence of certain events or changes in
circumstances relative to an investee, the final guidance issued by the FASB, and the
Companys intent and ability to hold the impaired investments at the time of the
valuation.

Stock
Based Compensation.In December 2004, the FASB issued Statement No. 123 (revised 2004),
Share-Based Payment (SFAS No. 123R). SFAS No. 123R is a revision
of SFAS No. 123, Accounting for Stock Based Compensation, supersedes APB 25
and amends FASB Statement No. 95, Statement of Cash Flows. SFAS No. 123R
establishes standards for the accounting for transactions in which an entity (i) exchanges
its equity instruments for goods or services, or (ii) incurs liabilities in exchange for
goods or services that are based on the fair value of the entitys equity instruments
or that may be settled by the issuance of the equity instruments. SFAS No. 123R eliminates
the ability to account for stock-based compensation using APB 25 and requires that such
transactions be recognized as compensation cost in the income statement based on their
fair values determined at the date of the grant. Under SEC guidance, the applicable
effective date of SFAS No. 123R is the beginning of the next fiscal year after June 15,
2005. The Company anticipates adopting the fair value method of expense recognition as of
January 1, 2006, in accordance with SFAS No. 123R, Share-Based Payment, which
is effective as of the beginning of next fiscal year after June 15, 2005. SFAS No. 123R
permits companies to adopt the recognition requirements using either a modified
prospective method or a modified retrospective method. Under the
modified prospective method, compensation cost is recognized in the financial
statements based on the time of vesting beginning with the effective date, under the
requirements of SFAS No. 123R for all shared-based payments granted after that date and
under the requirements of SFAS No. 123 for all awards granted prior to the effective date
of SFAS No. 123R that vest after the effective date. Under the modified
retrospective method, the requirements are the same as under the modified
prospective method, but this method also permits entities to restate financial
statement of previous periods based on pro forma disclosures made in accordance with SFAS
No. 123.

The
Company currently uses the intrinsic value method as permitted by APB 25 to account for
its share-based payments to employees, and as such, generally recognizes no compensation
expense for employee stock options. Accordingly, adopting SFAS No. 123R will result in the
Company recording compensation cost for employee stock options. Had the Company adopted
stock option expensing in prior periods, the impact would have approximated that as
presented in the SFAS No. 123 disclosure of pro-forma net income and earnings per share in
Note 1, Summary of Accounting Policies, of the 2004 Annual Report on Form
10-K.

The
Company currently utilizes the Black-Scholes option-pricing model to measure the fair
value of stock options granted. While SFAS No. 123R permits entities to continue to use
such a model, the standard also permits the use of a lattice model. The
Company expects to evaluate the alternative models, including the underlying valuation
assumptions, and has not yet determined which model it will use to measure the fair value
of stock options upon the adoption of SFAS No. 123R.

In
March 2005, the SEC staff issued Staff Accounting Bulletin No. 107 ("SAB 107") regarding the interaction between SFAS No. 123R and certain
SEC rules and regulations and provides the staffs views regarding the
valuation of share-based payment arrangements for public companies. SAB 107 provides
guidance related to valuation methods (including assumptions such as expected volatility
and expected term), accounting for certain redeemable financial
instruments issued under share-based payment arrangements, the classification of
compensation expense, non-GAAP financial measures, capitalization of compensation cost
related to share-based payment arrangements, the accounting for income tax effects of
share-based payment arrangements upon adoption of Statement 123R, the modification of
employee share options prior to adoption of Statement 123R and disclosures in
Managements Discussion and Analysis of Financial Condition and Result of Operations subsequent to adoption of Statement 123R.

11

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Item 2. Management's
Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Statement
Regarding Forward-Looking Information

This
report, in Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations and elsewhere contains, and other periodic reports and
press releases of the Company may contain, forward-looking statements (within the meaning
of Section 21E of the Securities Exchange Act of 1934, as amended), which involve
significant risks and uncertainties. The Company intends such forward-looking statements
to be covered by the safe harbor provisions for forward-looking statements contained in
the Private Securities Litigation Reform Act of 1995, and is including this statement for
purposes of invoking these safe harbor provisions. These forward-looking statements, which
are based on certain assumptions and describe future plans, strategies and expectations of
the Company, are generally identifiable by use of the words believe,
expect, intend, anticipate, estimate,
project, plan, or similar expressions. The Companys ability
to predict results or the actual effect of future plans or strategies is inherently
uncertain and actual results may differ from those predicted. The Company undertakes no
obligation to update these forward-looking statements in the future. Factors which could
have a material adverse effect on operations and could affect managements outlook or
future prospects of the Company and its subsidiaries include, but are not limited to,
higher than expected overhead, infrastructure and compliance costs, unanticipated changes
in interest rates or further flattening of the yield curve, less than anticipated balance
sheet growth, demand for loan products, unanticipated changes in secondary mortgage market
conditions, deposit flows, competition, adverse federal or state legislative or regulatory
developments, monetary and fiscal policies of the U.S. Government, including policies of
the U.S. Treasury and Federal Reserve Board, deteriorating economic conditions which could
result in increased delinquencies in the Companys loan portfolio, the quality or
composition of the Companys loan or investment portfolios, demand for financial
services and residential real estate in the Companys market area, unanticipated
problems in closing pending real estate contracts or slowdown in real estate lot sales,
delays in real estate development projects, the possible short-term dilutive effect of
other potential acquisitions, if any, and changes in accounting principles, policies and
guidelines. These risks and uncertainties should be considered in evaluating
forward-looking statements and undue reliance should not be placed on such statements.

General

MAF
Bancorp, Inc. was incorporated under the laws of the state of Delaware in 1989, as the
holding company for Mid America Bank, fsb (Bank), our banking subsidiary. The
Bank, which was organized as a mutual savings and loan association and has been operating
in the Chicago area since 1922, formed the holding company in connection with its
conversion from a mutual to stock savings institution. Today, the Bank is one of the
largest community-oriented financial institutions in the Chicago and Milwaukee
metropolitan areas and serves both retail and business banking customers. We also engage
in residential real estate land development through our subsidiary, MAF Developments, Inc.
(MAFD), a business we started at the Bank in 1974.

We
offer various financial services to retail and business banking customers through a
network of 72 branches in Illinois and southeastern Wisconsin. In Illinois, the Bank now
operates 49 branches located in residential neighborhoods in the City of Chicago and
throughout suburban communities in the Chicago metropolitan area. We have significant
market penetration in northwest Chicago and west and southwest suburban areas of Cook,
DuPage, Will and Kane counties. In Wisconsin, the Bank serves communities in the Milwaukee
area through 23 retail branches under the name of St. Francis Bank, a division of Mid
America Bank, fsb. All of our locations are full-service branches, many of which offer
customers the convenience of drive-up facilities.

We expect to continue to search for and evaluate potential acquisition
opportunities that could enhance franchise value and may periodically be presented with
opportunities to acquire other institutions, branches or deposits in the Chicago or
Milwaukee metropolitan areas or which allow the Company to expand outside its current
primary market areas, as we have done in recent years. Management intends to review acquisition opportunities across a
variety of parameters, including the potential impact on its financial condition as well
as its financial performance in the future. It is anticipated that future acquisitions, if
any, will likely be valued at a premium to book value, and generally at a premium to
current market value. As such, management anticipates that acquisitions made by the
Company could involve some short-term book value per share dilution and may involve
earnings per share dilution depending on the Companys timing and success in
integrating the operations of businesses acquired and the level of cost savings and
revenue enhancements that may be achieved.

12

---



Critical Accounting
Policies and Estimates

Our
discussion and analysis of the Companys financial condition and results of
operations is based upon our consolidated financial statements, which have been prepared
in conformity with U.S. generally accepted accounting principles, and are more fully
described in Note 1 of the consolidated financial statements found in the Companys
Form 10-K for the fiscal year ended December 31, 2004 in Item 8. Financial
Statements and Supplementary Data. The preparation of these consolidated financial
statements requires that we make estimates and assumptions that affect the reported
amounts of assets, liabilities, income and expense, as well as related disclosures of
contingencies. Managements judgment is based on historical experience, terms of
existing contracts, market trends, and other information available. We believe that of
significant accounting policies, the following involve a higher degree of judgment and
complexity.

Allowance
for loan losses.We maintain an allowance for loan losses to cover management's estimate of probable losses
inherent in the bank's loan portfolio. In evaluating the adequacy of the allowance for loan losses and
determining, if any, the related provision for loan losses, management considers:
(1) subjective factors, including local and general economic business factors and
trends, portfolio concentrations and changes in the size and/or general terms of the loan
portfolio, (2) historical loss experience and the change in the mix of the overall
portfolio composition over the last five years, (3) specific allocations based upon
probable losses identified during the review of the portfolio, and (4) delinquency in
the portfolio and the composition of non-performing loans including the percent of
non-performing loans with supplemental mortgage insurance. The allowance for loan losses
is established through a provision for loan losses that is recorded in the consolidated statement
of operations.

Valuation
of mortgage servicing rights.The Bank capitalizes the estimated value of mortgage
servicing rights upon the sale of loans. The Banks estimated value takes into
consideration contractually known amounts, such as loan balance, term, contract rate, and
whether the customer escrows funds with the Bank for the payment of taxes and insurance.
Estimated value is also affected by additional assumptions relating to loan prepayment
speeds, earnings on escrow funds, as well as the discount rate used to present value the
estimated future cash flow stream. Subsequent to the establishment of this asset,
management reviews the fair value of mortgage servicing rights on a quarterly basis using
current prepayment speed, cash flow and discount rate estimates. Changes in these
estimates impact fair value, and could require the Bank to record a valuation allowance or
recovery. A recovery of $125,000 was recorded in the first three months of 2005 compared
to a $555,000 recovery in the prior year period. Should estimates assumed by management
regarding future prepayment speeds on the underlying loans supporting the mortgage
servicing rights prove to be incorrect, additional valuation allowances could occur, or
contrarily, valuation allowances could be recovered if changing estimates increase the
fair value of mortgage servicing rights.

Valuation
of goodwill and intangible assets.In accounting for acquisitions of other companies, we
generally record as assets on our financial statements both goodwill and identifiable
intangible assets such as core deposit intangibles. The amounts we record are based on our
estimates of the fair value of assets and liabilities acquired. The valuation techniques
we use to determine the carrying value of tangible and intangible assets and liabilities
acquired in acquisitions and the estimated lives of the identifiable intangible assets
involve a number of subjective judgments such as estimates for discount rates, projected
future cash flows and time period of useful lives, all of which are susceptible to change
based on changes in economic conditions and other factors. Core deposit and other
identifiable intangible assets are amortized to expense over their estimated useful lives
and are reviewed for impairment whenever events or changes in circumstances indicate that
the carrying amount of the asset exceeds the remaining value we are reasonably likely to
realize. Similarly, on an annual basis we evaluate whether the carrying value of our
goodwill has become impaired, in which case we reduce its carrying value through a charge
to our earnings. Goodwill is evaluated for impairment at the segment reporting level, and
all of our goodwill is recorded in our banking segment since it comprises a single component.

While
we believe the assumptions and estimates we used are reasonable, using different
assumptions or estimates for these valuations would have resulted in our recording
different amounts of goodwill and core deposit intangibles and could have impacted our
amortization expense. For example, if we had assumed faster prepayment speeds of mortgage
loans we acquired in the Fidelity or St. Francis acquisition, the value of the mortgage
loans we acquired would have been less and the goodwill we recorded would have been
greater. Similarly, if we had assumed greater deposit run off rates, we may have recorded
lower core deposit intangibles, but might have shortened our estimate of the average life
of this intangible asset and may have increased our amortization expense in 2004 or 2005.
Any changes in the assumptions and estimates which we use in future periods to determine
the carrying value of our goodwill and identifiable intangible assets which adversely
affect their value or shortens estimated lives would adversely affect our results of
operations. At March 31, 2005, our goodwill was $305.2 million and our identifiable
intangible assets (core deposits) amounted to $12.3 million. We

13

---



recorded $737,000 of
amortization of core deposit intangibles during the first quarter of 2005 and $740,000
during the first quarter of 2004. There was no goodwill impairment recorded in 2005 or
2004.

Real
estate held for development.Profits from lot sales in the Companys real estate
developments are based on cash received less the estimated cost of sales per lot in the
development, including capitalized interest and an estimate of future costs to be
incurred. This is especially true at the outset of a project, where few actual costs have
been incurred in the project as a whole. The estimate of total project costs is reviewed
on a quarterly basis by project management. Estimates are subject to change for various
reasons, including the duration of the project, changes in rules or requirements of the
communities where the projects reside, soil and weather conditions, increased project
budgets, as well as the general level of inflation. The changes in lot sale profits on
past sales that result from, changes in estimated future costs are recognized in the
period of that change as either a charge or an addition to income from real estate
operations. Additionally, management periodically evaluates the net realizable value from
each project by considering other factors, such as pace of lot absorption, sources of
funding and timing of disbursements. A charge to current earnings would occur if this
evaluation indicated a projects net realizable value did not exceed its recorded
cost. Currently, the net realizable value of each land development project the Company is
engaged in exceeds the recorded cost of the project.

Results of Operations for the Three
Months Ended March 31, 2005 and 2004

Overview

The
following table highlights selected financial information for
the three months ended March 31, 2005 and 2004.

|                                     | Three Months Ended March 31,
|------------------------------------ | ----------------------------
|
|
|Net income                           |                             
|Diluted earnings per share           |                             
|Average diluted shares outstanding   |                             
|Interest rate spread                 |                             
|Net interest margin                  |                             
|Average loans receivable             |                             
|Average interest-earning assets      |                             
|Average assets                       |                             
|Average deposits                     |                             
|Average interest-bearing liabilities |                             
|Return on average assets(1)          |                             
|Return on average equity(1)          |                             
|Efficiency ratio(2)                  |                             
|1-4 family loan originations         |                             
|Loan sales                           |                             
|Gain on sale of loans                |                             

---

| | (1) | Annualized.
| | --- | -----------

| | (2) | The efficiency ratio is calculated by dividing non-interest expense by the sum
               of net interest income and non-interest income, excluding net gain/(loss) on
               sale and writedown of mortgage-backed and investment securities.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | Net income and net income per diluted share for the first quarter of 2005 were relatively flat
compared to the first quarter of 2004 primarily due to lower non-interest income, as the higher
cost of operating a larger franchise largely offset increased net interest income.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | The 12.6% decline in non-interest income is due to higher securities gains and real estate
development income during the 2004 quarter. We recorded no income from real estate operations
during the first quarter of 2005, as the closings of pending lot sales in our new Springbank
development will not commence until the third quarter of 2005.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | Growth in average earning assets of approximately 7.7% over the past year contributed to a 5.5%
increase in net interest income compared to the prior year quarter. Rising short-term interest
rates and further flattening of the yield curve during the quarter resulted in modest margin compression compared
to the prior year quarter and the fourth quarter of 2004.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

14

---



| | o | Home equity line of credit balances were up $285 million after the sale of $77 million of equity line
of credit balances during the quarter at a gain of $1.9 million. We intend to continue to pursue
originations of home equity lines for portfolio growth and potential sales.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | Average deposits grew by approximately 6.3% compared to the prior year quarter. About $350 million
of our balance sheet growth year over year is attributable to the Chesterfield acquisition we
completed in the fourth quarter of 2004.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Net Interest Income and
Net Interest Margin

Net
interest income increased to $67.5 million for the three months ended March 31, 2005, from
$64.0 million for the three months ended March 31, 2004, primarily due to a $635 million
increase in average interest-earning assets, primarily in loans and mortgage-backed
securities. Our interest rate spread declined to 2.82% compared to 2.90% in
the prior year quarter, while the net interest margin declined to 3.04% for the quarter
compared to 3.10% the previous year quarter.

The
average yield on interest-earning assets increased ten basis points to 5.04% for the three
months ended March 31, 2005 from 4.94% for the three months ended March 31, 2004. This
increase was due primarily to an increase in the yield on loans receivable and
mortgage-backed securities, partially offset by a decline in the yield on investment
securities. The yield on loans receivable increased to 5.22% for the first quarter of 2005
from 5.14% for the first quarter of 2004 primarily as a result of an increase in the yield
on the equity line of credit portfolio, which in a rising rate environment, reprices more
quickly than other components of the loan portfolio. The yield on mortgage-backed
securities also benefited from rising interest rates, increasing 31 basis points to 4.05%
for the three months ended March 31, 2005 from 3.74% for the three months ended March 31,
2004. The yield on investment securities declined to 5.00% for the first quarter 2005 from
5.11% for the first quarter 2004 due primarily to a decrease in the dividends earned on  investments in
FHLB of Chicago stock (5.5% during the first quarter of 2005 compared to 6.5% during the first
quarter of 2004) as well as a decrease in the Banks average investment in FHLB of Chicago stock ($260.4
million in the first quarter of 2005 versus $387.9 million in the first quarter of 2004).

The
average cost of interest-bearing liabilities increased 18 basis points to 2.22% for the
three months ended March 31, 2005 from 2.04% for the three months ended March 31, 2004.
This increase was due primarily to an increase in the cost of deposits, partially offset
by a decline in the cost of borrowed funds. The cost of deposits increased 28 basis points
to 1.62% for the first quarter of 2005 from 1.34% for the first quarter of 2004 largely
due to higher rates on money market accounts and certificates of deposit driven by higher
short-term interest rates and more aggressive deposit pricing as the Company competes for
deposit growth in its market. The cost of borrowed funds decreased eight
basis points to 3.50% for the first quarter of 2005 from 3.58% for the first quarter of
2004 primarily due to the maturing of FHLB advances that had higher fixed interest rates.
As previously disclosed, the Company expects that the flatter yield curve and increased competition
for deposits is likely to pressure its net interest margin throughout 2005.

The
net interest margin declined during the quarter as deposits and other borrowings repriced
faster than asset yields as short-term interest rates rose. The six basis point
improvement in the yield on loans receivable was primarily the result of an increase in
the yield on the equity line of credit portfolio, which in a rising rate environment,
reprices more quickly than other components of the loan portfolio. The 11 basis point
rise in the cost of deposits is largely due to higher rates on money market accounts and
certificates of deposit driven by the higher short-term interest rates and more
aggressive deposit pricing as the Company completes for deposit growth in its markets.

The
increase in average interest-earning assets and liabilities during the quarter were the
result of the acquisition of Chesterfield Financial Corp., which closed on October 31,
2004. Average interest-earning assets grew $95 million or 1.1% during the quarter, with
growth occurring primarily in the balance of mortgage-backed securities, which increased
$191 million, or 18%, primarily to redeploy proceeds from loan sales and the redemption
of stock in the Federal Home Loan Bank of Chicago. Average loans receivable balances
declined by $50.9 million during the quarter as loan origination volumes were lower than
in the fourth quarter of 2004, the Bank experienced some large, expected paydowns on
business banking loans and growth in equity line of credit balances has slowed from the
strong growth experienced in the last three quarters of 2004.

The
growth in average interest-earning assets during the quarter was primarily funded by
deposits. Compared to the fourth quarter of 2004, the average balance of interest-bearing
deposits rose by $131 million, or 2.4%, to $5.48 billion during the first quarter of 2005.

15

---



Average Balances/Rates

The
following table reflects the average yield on assets and average cost of liabilities for
the periods indicated. Such yields and costs are derived by dividing income or expense by
the average balance of assets or liabilities. Average balances are derived from average
daily balances. Loans receivable balances include non-accrual loans. The yield/cost at March 31, 2005,
includes fees that are considered adjustments to yield.

|                                 | Three Months Ended March 31, |  |  
|-------------------------------- | ---------------------------- |  | -
|
|
|
|Assets:                          |                              |  |  
|Loans receivable                 |                              |  | $
|Mortgage-backed securities       |                              |  |  
|Stock in FHLB of Chicago         |                              |  |  
|Investment securities            |                              |  |  
|Interest-bearing deposits        |                              |  |  
|Federal funds sold (1)           |                              |  |  
|                                 |                              |  |  
|Total interest-earning assets    |                              |  |  
|Non-interest earning assets      |                              |  |  
|                                 |                              |  |  
|Total assets                     |                              |  |  
|                                 |                              |  |  
|Liabilities and stockholders'    |                              | 
|equity:                          |                              | 
|Deposits                         |                              |  |  
|Borrowed funds                   |                              |  |  
|                                 |                              |  |  
|Total interest-bearing           |                              | 
|liabilities                      |                              |  |  
|Non-interest bearing deposits    |                              |  |  
|Other liabilities                |                              |  |  
|                                 |                              |  |  
|Total liabilities                |                              |  |  
|Stockholders' equity             |                              |  |  
|                                 |                              |  |  
|Liabilities and stockholders'    |                              | 
|equity                           |                              |  | $
|                                 |                              |  |  
|Net interest income/ interest    |                              | 
|rate spread                      |                              |  |  
|                                 |                              |  |  
|Net earning assets/net yield on  |                              | 
|average interest-earning assets  |                              |  | $
|                                 |                              |  |  
|Ratio of interest-earning assets |                              | 
|to interest-bearing liabilities  |                              |  |  
|                                 |                              |  |  

---

| | (1) | Includes pro-rated share of interest income received on outstanding drafts payable.
| | --- | -----------------------------------------------------------------------------------

Rate/Volume Analysis of
Net Interest Income

The
table below shows the impact of changes in the volume of interest-earning assets and interest-bearing
liabilities and changes in interest rates on the Banks interest income and interest
expense for the periods indicated. Changes attributable to the combined impact of volume
and rate have been allocated proportionately to the changes due to volume and the changes
due to rate.

|                                  | Three Months Ended March 31,
2005 Compared to March 31, 2004
|--------------------------------- | ------------------------------------------------------------
|
|
|
|Interest income:                  |                                                             
|Loans receivable                  |                                                             
|Mortgage-backed securities        |                                                             
|Investment securities             |                                                             
|Stock in FHLB of Chicago          |                                                             
|Interest-bearing deposits         |                                                             
|Federal funds sold                |                                                             
|                                  |                                                             
|Total                             |                                                             
|Interest expense:                 |                                                             
|Deposits                          |                                                             
|Borrowed funds                    |                                                             
|                                  |                                                             
|Total                             |                                                             
|                                  |                                                             
|Net change in net interest income |                                                             
|                                  |                                                             

Provision for Loan Losses

The
Bank recorded no provision for loan losses during the first quarter of 2005 compared to
$300,000 in the prior year first quarter. Net charge-offs for the three months ended March
31, 2005 were $6,000

16

---



compared to $418,000 for the three months ended March 31, 2004. At
March 31, 2005, the Banks allowance for loan losses was $36.2 million, which equaled
..53% of total loans receivable, compared to $36.3 million, or .53% at December 31, 2004,
and $34.4 million or .53% at March 31, 2004. The provisions recorded in 2004 were
primarily due to the change in the mix of loans and
non-performing loans, as well as chargeoffs incurred.

Non-Interest Income

Non-interest
income decreased $2.6 million, or 12.6% to $17.8 million in the first quarter of 2005,
compared to $20.4 million for the quarter ended March 31, 2004. Included in non-interest income in the 2004 period were
gains on the sale of investment securities of $2.8 million and income from real estate development
of $1.2 million. In the 2005 period we recorded $498,000 of gain on sale of investment securities and
no income from real estate development.

Loan Originations, Sales and Servicing

|                                                      | Three Months Ended
    March 31,
|----------------------------------------------------- | --------------------------------
|
|
|Originations and Purchases                            |                                 
|1-4 family mortgage loans:                            |                                 
|Fixed-rate                                            |                                 
|Adjustable rate                                       |                                 
|                                                      |                                 
|Total                                                 |                                 
|                                                      |                                 
|Loan Sales                                            |                                 
|1-4 family mortgage loans:                            |                                 
|Fixed-rate                                            |                                 
|Adjustable rate                                       |                                 
|                                                      |                                 
|Total                                                 |                                 
|Equity lines of credit                                |                                 
|                                                      |                                 
|Total loans sold                                      |                                 
|                                                      |                                 
|Gain on sale of 1-4 family mortgages                  |                                 
|Gain on sale of equity lines of credit                |                                 
|                                                      |                                 
|Total loan sale gains                                 |                                 
|                                                      |                                 
|Margin on 1-4 family loan sale (basis points)         |                                 
|Margin on equity lines of credit sale (basis points)  |                                 
|Loan Servicing                                        |                                 
|Loan servicing fee income                             |                                 
|Valuation recovery on mortgage servicing rights       |                                 
|Capitalized mortgage servicing rights as a percentage |                                 
|of loans serviced for others (basis points)           |                                 

The
Company completed its first sale of home equity lines, totaling $76.8 million resulting in
a gain of $1.9 million, in the first quarter of 2005. The Company is expanding its
wholesale equity line of credit production and expects to continue sales of these
single-service loan types during 2005 if favorable pricing trends continue. The decline in
traditional loan sale volume during the quarter was due primarily to the overall slowdown
in residential lending.

Deposit Account Service
Charges

|                                   | Three Months Ended March 31,
|---------------------------------- | ----------------------------
|
|
|Deposit service charges            |                             
|Deposit service fees/total revenue |                             

|                            | At
|--------------------------- | --
|
|Number of checking accounts |   

While
deposit account service fees remained relatively stable with fees recorded in last
years first quarter, the average fees per checking account declined. On a sequential quarter basis this
revenue source was down 12% compared to the fourth quarter of 2004, reflecting heavy competition
for consumer checking accounts and declines in consumer overdraft activity.

17

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Real Estate Development
Operations

|                               | Three Months Ended March 31,
|------------------------------ | ----------------------------
|
|
|Real estate development income |                             
|Residential lot sales          |                             

The
Company had no real estate development income during the quarter as we continued work in our
 new Springbank development in Plainfield, IL.  We received approval from
the village of Plainfield for this project which contains 1,599 residential lots,
281 multi-family lots and 45.8 acres of commercial parcels, in October 2004. As a result of a delay in receiving municipal
approvals, lot sale closings previously expected in 2004 are now expected to begin in the third
quarter of 2005. The Company has offered initial lots for sale to builders in the first phase of the
development and has experienced healthy demand to date. At March 31, 2005, 169 lots were
under contract for sale in Springbank.

|                                 | At March 31,
|-------------------------------- | ------------
|
|
|Pending lot sales at quarter end |             
|Investment in real estate        |             

At
March 31, 2005, three lots remain to be sold in our Tallgrass development and four lots remaining in our
Shenandoah development.  The increase in the balance of investment in real estate as compared to a year ago relates
primarily to completed land purchases for the Springbank joint venture development.

Securities Sales

|                           | Three Months Ended March 31,
|-------------------------- | ----------------------------
|
|
|Net gain on sale of:       |                             
|Investment securities      |                             
|Mortgage-backed securities |                             

The gain
on investment securities during the first quarter of 2005 resulted from the dissolution of stock in a
regional ATM network.  For the three months ended March 31, 2004, the gain on sale of investment securities included net gains of $2.7 million on the
sale of three investment securities on which other-than-temporary impairment writedowns
had been taken in prior years.

18

---



Non-Interest Expense

Non-interest
expense increased $1.3 million, or 2.7% to $48.2 million for the three months ended March
31, 2005 compared to $46.9 million for the three months ended March 31, 2004. The added
cost of management personnel and infrastructure needed to facilitate growth over the past year and to
address the increased compliance burden under new regulations also added to the increase.
The table below indicates the composition of non-interest expense for the three-month
periods indicated.

|                                                          | Three Months Ended March 31,
|--------------------------------------------------------- | ----------------------------
|
|
|Compensation                                              |                             
|Employee benefits                                         |                             
|                                                          |                             
|Total compensation and benefits                           |                             
|                                                          |                             
|Occupancy expense                                         |                             
|Furniture, fixture and equipment expense                  |                             
|Advertising and promotion                                 |                             
|Data processing                                           |                             
|Amortization of core deposit intangibles                  |                             
|Other expenses:                                           |                             
|Professional fees                                         |                             
|Stationery, brochures and supplies                        |                             
|Postage                                                   |                             
|Telephone                                                 |                             
|Transaction fraud losses                                  |                             
|Correspondent banking services                            |                             
|Title  fees,  recording  fees and  credit  report expense |                             
|Security expense                                          |                             
|ATM network fees                                          |                             
|Insurance costs                                           |                             
|FDIC premiums and OTS assessment                          |                             
|Real estate held for investment expenses(1)               |                             
|Other                                                     |                             
|                                                          |                             
|Total other expenses                                      |                             
|                                                          |                             
|                                                          |                             
|                                                          |                             

---

| | (1) | Expenses
from SF Equities, a subsidiary of the Bank that invests in affordable           housing
properties in Wisconsin.
| | --- | -------------------------------------------------------------------------------------------------------------------------

During
the current quarter, compensation and benefits increased 3.9%, primarily due to higher
incentive and employment related tax expenses and medical costs.

Occupancy
costs have increased over the prior year quarter due to the costs related to operating 72
branches, compared to 67 branches at March 31, 2004.

Advertising
and promotion expenses decreased from the prior year quarter due to the significant high rate checking account
advertising campaign we conducted in the first quarter of 2004. We expect annual advertising and promotion costs
in 2005 to exceed 2004 expenditures.

The large
increase in professional fees from the prior year quarter reflects
higher costs related to ongoing Sarbanes-Oxley compliance and consulting
fees related to various other compliance and efficiency improvement projects.

19

---



Income Tax Expense

Income
tax expense totaled $13.0 million for the three months ended March 31, 2005, equal to an
effective income tax rate of 35.0%, compared to $12.4 million or an effective income tax
rate of 33.4% for the three months ended March 31, 2004. The effective income tax rate was
lower in 2004 due to the resolution of certain prior years income tax matters.

Changes in Financial
Condition

Total
assets of the Company were $9.71 billion at March 31, 2005, an increase of $29.5 million,
or .3% from $9.68 billion at December 31, 2004. This increase has been driven by an
increase in mortgage-backed securities, partially offset by redemptions of FHLB stock and
decreases in loans receivable. Loans receivable decreased as a result of the sale of $76.8
million of equity line of credit balances during the first quarter of 2005 and $37.2
million of 15-year fixed-rate loans that were swapped into a mortgage-backed security
classified as held to maturity. The growth in deposits was the primary funding source for
the increase in assets.

|                                              | March 31,
   2005 | December 31,
    2004 | Amount 
 Increase/ (Decrease) | Percentage
 Increase/(Decrease)
|--------------------------------------------- | ----------------- | --------------------- | ----------------------------- | -------------------------------
|
|Assets:                                       |                   |                       |                               |                                
|Cash and cash equivalents                     |                   |                       | $                             | 241,652                        
|Investment securities available for sale      |                   |                       |                               | 400,102                        
|Stock in FHLB of Chicago                      |                   |                       |                               | 233,916                        
|Mortgage-backed securities available for sale |                   |                       |                               | 1,038,672                      
|Mortgage-backed securities held to maturity   |                   |                       |                               | 275,328                        
|Loans receivable                              |                   |                       |                               | 6,831,830                      
|Goodwill and intangibles                      |                   |                       |                               | 342,878                        
|Other                                         |                   |                       |                               | 351,151                        
|                                              |                   |                       |                               |                                
|Total Assets                                  |                   |                       | $                             | 9,715,529                      
|                                              |                   |                       |                               |                                
|Liabilities and Equity:                       |                   |                      
|Deposits                                      |                   |                       | $                             | 6,014,946                      
|Borrowed funds                                |                   |                       |                               | 2,575,155                      
|Other liabilities                             |                   |                       |                               | 172,358                        
|                                              |                   |                       |                               |                                
|Total Liabilities                             |                   |                       |                               | 8,762,459                      
|Stockholders' equity                          |                   |                       |                               | 953,070                        
|                                              |                   |                       |                               |                                
|Total Liabilities and Equity                  |                   |                       | $                             | 9,715,529                      
|                                              |                   |                       |                               |                                

Loans Receivable.The following table sets forth the composition of the Bank's loans portfolio by loan
type at the dates indicated.

|                            | At
|--------------------------- | --
|
|
|                            |   
|One- to four-family         |   
|Equity lines of credit      |   
|Home equity loans           |   
|Multi-family                |   
|Commercial                  |   
|Construction                |   
|Land                        |   
|Consumer loans              |   
|Commercial business loans   |   
|                            |   
|Total loans receivable, net |   
|                            |   

20

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Deposits.    
The following table sets forth the composition of the deposits by type at March
31, 2005 and December 31, 2004:

|                              | March 31, 2005 | December 31, 2004
|----------------------------- | -------------- | -----------------
|
|
|Commercial checking           |                |                  
|Non-interest bearing checking |                |                  
|Interest-bearing checking     |                |                  
|Commercial money market       |                |                  
|Money markets                 |                |                  
|Passbook                      |                |                  
|                              |                |                  
|                              |                |                  
|                              |                |                  
|Certificates of deposit       |                |                  
|                              |                |                  
|Unamortized premium           |                |                  
|                              |                |                  
|Total deposits                |                |                  
|                              |                |                  

At March 31, 2005, the Bank had
$317.6 million of certificates of deposit at an average rate of 2.68% with original
maturities of 13 to 23 months, which contain a one-time option for the owner to increase
the interest rate to current rates.

Borrowed Funds.The following is a
summary of the Companys borrowed funds at March 31, 2005 and December 31, 2004:

|                                 | March 31, 2005 | December 31, 2004
|-------------------------------- | -------------- | -----------------
|
|
|Federal Home Loan Bank advances: |                |                  
|Fixed rate                       |                |                  
|Floating rate                    |                |                  
|                                 |                |                  
|Total FHLB advances              |                |                  
|Reverse repurchase agreement     |                |                  
|Other borrowings                 |                |                  
|Unsecured term loan              |                |                  
|Unsecured line of credit         |                |                  
|Unamortized premium              |                |                  
|                                 |                |                  
|Total borrowed funds             |                |                  
|                                 |                |                  

Included
in FHLB of Chicago advances at March 31, 2005 are $365.0 million of fixed-rate
advances with original scheduled maturities of 5 to 10 years, which mature beyond 2005 and
are putable at the discretion of the FHLB of Chicago as follows: $290.0 million at 4.90%
in 2005, $75.0 million at 2.94% in 2006. The average term to maturity on these advances is
45 months, while the average term to put is six months. At inception, the Bank received a
lower interest rate on such advances than on similar termed non-putable advances, in
return for granting the FHLB of Chicago the option to put the advances prior to their
final maturity. If put, the FHLB of Chicago will provide replacement funding, should the
Bank want or need to refinance the borrowing, at the then prevailing market rate of
interest for the remaining term to maturity of the advances, subject to standard terms and
conditions. Of the FHLB advances we had outstanding at March 31, 2005, we currently expect
$50.0 million (with an average rate of 2.52%) to be put back to us during the remainder of 2005.

At
March 31, 2005, all reverse repurchase agreements totaled $350.0 million and are floating rate with remaining
terms to maturity ranging from twelve months to 4.5 years. The interest rate on $250.0
million of these agreements is tied to the prime rate and ranges from prime minus 275
basis points to prime minus 280 basis points. The remaining $100.0 million have interest
rates ranging from three-month LIBOR minus 50 basis points to three-month LIBOR minus 75
basis points. The LIBOR-based repurchase agreements are putable at the discretion of the
lender quarterly starting in 2006.

21

---



Stockholders Equity.On
February 1, 2005, our Gain Deferral Plan was terminated and the remaining shares were
distributed to the two plan participants upon termination with a net effect to
stockholders equity of ($8,000). See Liquidity and Capital Resources for
a further discussion of shares repurchased and cash dividends paid also affecting
stockholders equity. Stockholders' equity was also impacted by the $10.8 million
decline in the fair value of the Company's available for sale securities portfolio resulting from
the substantial increase in short-term interest rates during the quarter.

Asset Quality

Non-Performing
Assets.The Bank ceases the accrual of interest when, based on current information and
events, it is probable that the Bank will be unable to collect all amounts due according
to the contractual terms of the loan. Generally, when a loan is 91 days or more past due,
in the process of foreclosure, or in bankruptcy, or when collectibility is otherwise in
doubt, the full amount of previously accrued but unpaid interest on non-accrual loans is
deducted from interest income. Income is subsequently recorded to the extent cash payments
are received, or at the time when the loan is brought current in accordance with its
original terms. This policy is applied consistently for all types of loans in the
Banks loan portfolio. Additionally, the Bank considers the classification of
investment securities, should they show signs of deteriorating quality.

The
following table sets forth information regarding non-accrual loans, non-accrual investment
securities, and foreclosed real estate of the Bank.

|                                            | At
|------------------------------------------- | --
|
|
|Non-accrual loans:                          |   
|One- to four-family                         |   
|Equity lines of credit                      |   
|Home equity loans                           |   
|Multi-family                                |   
|Commercial real estate                      |   
|Consumer loans                              |   
|Commercial business loans                   |   
|                                            |   
|Total                                       |   
|                                            |   
|Non-performing loans to total loans         |   
|                                            |   
|Foreclosed real estate, net of reserves:    |   
|One- to four-family                         |   
|                                            |   
|Total non-performing assets                 |   
|                                            |   
|Total non-performing assets to total assets |   
|                                            |   

Non-performing
loans were $30.3 million, or .44% of total loans receivable at March 31, 2005, compared to
$31.5 million, or .46% of loans receivable at December 31, 2004, and $30.3 million, or
..47% of total loans receivable at March 31, 2004. The decrease of $2.5 million for one- to
four-family during the first quarter of 2005 compared to the first quarter of 2004 was
essentially offset by a $2.6 million increase for equity lines of credit for the same
periods. Non-performing assets were $31.8 million or .33% of total assets at March 31,
2005, compared to $33.0 million or .34% of total assets at December 31, 2004, and $32.2
million or .35% of total assets at March 31, 2004.

For
the quarter ended March 31, 2005, interest on non-accrual loans that would have been
recorded as income, had they been performing according to their original terms, amounted
to $461,000, compared to $516,000 for the three months ended March 31, 2004.

Non-Performing Residential
Loans.Ratios for loans secured by one-to four-family residential properties were as
follows:

|                                                                                                                                 | March
31, 
 2005 | December
31, 2004 | March
 31,
  2004
|-------------------------------------------------------------------------------------------------------------------------------- | ---------------- | ----------------- | -----------------
|One- to four-family loans as a percentage    of total loans                                                                      |                  |                   |                  
|Non-performing one- to four-family loans as    a percentage of total non-performing      loans                                   |                  |                   |                  
|Percentage of non-performing one- to four-   family loans with private mortgage      insurance or other guarantees               |                  |                   |                  
|Average loan-to-value of non-performing    one- to four-family loans without private      mortgage insurance or other guarantees |                  |                   |                  
|                                                                                                                                 |                  |                   |                  

22

---



Classified
Assets.The federal regulators have adopted a classification system for problem assets of
insured institutions. Under this classification system, problem assets of insured
institutions are classified as substandard, doubtful or
loss. In addition, a special mention category consists of assets,
which currently do not expose the Company to a sufficient degree of risk to warrant
classification, but do possess deficiencies or other characteristics deserving
managements close attention.

In
connection with the filing of its periodic reports with the OTS, the Bank regularly
reviews the problem assets in its portfolio to determine whether any loans or investments
require classification in accordance with applicable regulations. At March 31, 2005 and
December 31, 2004 all of the Banks non-performing loans were classified as substandard. In
addition, at March 31, 2005, the Bank had classified $3.7 million of multi-family loans
and $24.8 million of commercial loans as substandard for regulatory purposes that were
still accruing interest. The Bank also had $1.4 million of commercial loans classified as
doubtful of which $56,000 were non-accrual and the remaining were still accruing interest.
Special mention loans at March 31, 2005 and December 31, 2004 totaled $10.5 million and
$10.2 million, respectively.

Allowance for Loan Losses

Activity
in the allowance for loan losses is summarized in the following table for the three months
ended March 31, 2005 and 2004.

|                               | Three Months Ended
 March 31,
|------------------------------ | -----------------------------
|
|
|Balance at beginning of period |                              
|Provision for loan losses      |                              
|Charge-offs                    |                              
|Recoveries                     |                              
|                               |                              
|Balance at end of period       |                              
|                               |                              

The
allowance for loan losses to total loans at March 31, 2005 and December 31, 2004 was .53%.
The allowance for loan losses to non-performing loans increased to 119.59% at March 31,
2005, from 115.18% at December 31, 2004, reflecting the decline in non-performing loans.
Management believes the allowance for loan losses was adequate at March 31, 2005.

Liquidity and Capital
Resources

Our
holding company manages liquidity and capital resources to provide funds necessary for
holding company debt service on borrowings, cash dividends to stockholders, funding for
our land development operation, and planned repurchases of common stock. Our major sources
of funds are dividends from the Bank, which are subject to regulatory limitations, and to
a lesser extent, cash flow from our land development operation. Additionally, we maintain
a $55 million unsecured line of credit with a Chicago-based commercial bank under which we
had $25 million of remaining availability at March 31, 2005.

Subsequent
to March 31, 2005, we formed a special purpose finance subsidiary, and the
subsidiary issued $30 million in trust preferred securities on April 15, 2005. The trust
preferred securities mature in 30 years and are callable at par in five years at the
Companys option. The Company will pay interest on the indebtedness at 3 month LIBOR
plus 1.75%, resetting quarterly. The proceeds were used to repay amounts drawn on the
Companys existing $55 million line of credit, which remains available for general
corporate purposes, including the Companys stock repurchase program.

During
the three months ended March 31, 2005, the Companys principal uses of funds were cash dividends to shareholders and stock
repurchases. During the current three month period, the Company repurchased 644,000 shares
of its common stock at an average price of $43.16 per share, for a total of $27.8 million,
and declared common stock dividends of $.23 per share, for a total of $7.5 million.

The
Banks principal sources of funds are deposits, advances from the FHLB of Chicago and
other borrowings, principal repayments on loans and mortgage-backed securities, proceeds
from the sale of loans, and funds provided by operations. While scheduled loan and
mortgage-backed securities amortization and maturing investment securities are a
relatively predictable source of funds, deposit flows as well as loan and mortgage-backed
securities prepayments are greatly influenced by economic conditions, the general level of
interest rates and competition. Decisions to sell investment securities and other assets
are also generally market driven, although the Bank may at times sell these assets for
asset/liability management purposes or as a source of liquidity.

The
Bank utilizes particular sources of funds based on comparative costs and availability. The
Bank generally manages the pricing of its deposits to maintain a steady to increasing
deposit portfolio in the aggregate, but has from time to time decided not to pay rates on
deposits as high as its competition, and when necessary, to supplement deposits with
longer term and/or other alternative sources of funds such as FHLB advances and other
borrowings. The Bank currently expects that due to increased competition for deposits in
its markets, that more of its growth is expected to be funded with higher cost wholesale
borrowings.

23

---



The
Bank has a concentration in its investment portfolio in stock of the FHLB of Chicago
(FHLBC) and has continued to reduce its investment in FHLBC stock. At March
31, 2005, the Bank had $233.9 million invested in FHLBC stock of which $129.1 million was
in excess of the minimum investment required as collateral for its FHLB borrowings as of
that date. During the three months ended March 31, 2005, the Bank redeemed $45.0 million
in stock. A significant portion of the excess investment resulted from the Fidelity and
St. Francis acquisitions, as they maintained investments in excess of their required
minimums due to the high rate of dividends being paid by the FHLBC. The Bank may, at the
FHLBCs discretion, redeem at par any capital stock greater than its required
investment or sell it to other FHLBC members. The Bank monitors the financial results and
interest rate risk position of the FHLBC on a quarterly basis. The Bank plans to continue
reducing its investment in 2005.

Loan commitments
totaled $779.7 million at March 31, 2005, compared to $650.4 million at December 31,
2004. At March 31, 2005, the Company believes that it has sufficient cash to fund its
outstanding commitments or will be able to obtain the necessary funds from outside sources
to meet its cash requirements. At March 31, 2005, the Bank had $13.0 million of credit
risk related to loans sold to the MPF program with recourse provisions, $40.9 million of
credit risk related to loans sold with recourse to other investors and approximately $27.0
million of credit risk related to loans with private mortgage insurance in force.

The
following table lists the commitments and contingencies of the Company and the Bank as of
March 31, 2005:

|                                               | Total | Less 
  than 
 1 Year | 1 to3 Years | 3 to5 Years | After5 Years
|---------------------------------------------- | ----- | --------------------- | ----------- | ----------- | ------------
|
|One- to four-family and multi-family           |       |                       |             |             |             
|mortgage commitments                           |       |                       | $           | 577,598     |             
|Equity line and equity loan commitments        |       |                       |             | 139,613     |             
|Unused portion of equity lines of credit(2)    |       |                       |             | 1,056,745   |             
|Commercial business lines(2)                   |       |                       |             | 252,157     |             
|Letters of credit(1)                           |       |                       |             | 74,017      |             
|Commercial business loan commitments           |       |                       |             | 62,545      |             
|Contingent liability under recourse provisions |       |                       |             | 80,939      |             
|                                               |       |                       |             |             |             
|Total                                          |       |                       | $           | 2,243,614   |             
|                                               |       |                       |             |             |             

---

| | (1) | Letters of
credit include $5.6 million related to land development projects.
| | --- | ----------------------------------------------------------------------------

| | (2) | Amounts
are shown based on time to maturity for amounts if used. Reflects the maximum amount of
potential liability for credit losses at March 31, 2005 that we have retained
relating to an aggregate $913.9 million of one- to four-family loans. We have either sold
the loans to investors with recourse or have assumed a layer of credit risk through
private mortgage insurance in force in the Banks captive reinsurance subsidiary.
Our loss experience to date under such recourse provisions has been immaterial.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

24

---



Asset/Liability Management

As
part of its normal operations, the Bank is subject to interest-rate risk on the
interest-sensitive assets it invests in and the interest-sensitive liabilities it borrows.
The Banks exposure to interest rate risk is reviewed at least quarterly by the
Banks asset/liability management committee (ALCO) of the Board of
Directors of the Company. The ALCO, which also includes certain members of senior
management with financial expertise, monitors the rate and sensitivity repricing
characteristics of the individual asset and liability portfolios the Bank maintains and
determines risk management strategies.

The
Bank utilizes an interest rate sensitivity gap analysis to monitor the relationship of
maturing or repricing interest-earning assets and interest-bearing liabilities, while
maintaining an acceptable interest rate spread. Interest rate sensitivity gap is defined
as the difference between the amount of interest-earning assets maturing or repricing
within a specific period of time and the amount of interest-bearing liabilities maturing
or repricing within that same period of time, and is usually analyzed at a period of one
year. Generally, a positive gap, where more interest-earning assets are repricing or
maturing than interest-bearing liabilities, would tend to result in a reduction in net
interest income in a period of falling interest rates. Conversely, during a period of
rising interest rates, a positive gap would likely result in an improvement in net
interest income. Managements goal is to maintain its cumulative one-year gap within
the range of (15)% to 15%. The gap ratio fluctuates as a result of market conditions and
managements decisions based on its expectation of future interest rate trends, as
well as the impact of the interest rate risk position of acquired institutions. The
Banks asset/liability management strategy emphasizes the origination of one- to
four-family adjustable-rate loans and other loans which have shorter terms to maturity or
reprice more frequently than fixed-rate mortgage loans, yet provide a positive margin over
the Banks cost of funds, for its own portfolio. Historically, the Bank has generally
sold its conforming long-term fixed-rate loan originations in the secondary market in
order to improve and maintain its interest rate sensitivity levels.

The
Bank, except as noted below, has not used derivative financial instruments such as
interest rate swaps, caps, floors, options or similar financial instruments to manage its
interest rate risk. However, in conjunction with its origination and sale strategy
discussed above, management does hedge the Banks exposure to interest rate risk
primarily by committing to sell fixed-rate mortgage loans for future delivery. Under these
commitments, the Bank agrees to sell fixed-rate mortgage loans at a specified price and at
a specified future date. The sale of fixed-rate mortgage loans for future delivery has
enabled the Bank to continue to originate new mortgage loans, and to generate gains on
sale of these loans as well as loan servicing fee income, while maintaining its gap ratio
within the parameters discussed above. Most of these forward sale commitments are
conducted with Fannie Mae, Freddie Mac and the MPF with respect to loans that conform to
the requirements of these government agencies. The forward commitment of mortgage loans
presents a risk to the Bank if the Bank is not able to deliver the mortgage loans by the
commitment expiration date. If this should occur, the Bank would be required to pay a fee
to the buyer. The Bank attempts to mitigate this risk by charging potential retail
borrowers a 1% fee to fix the interest rate. The Bank also estimates a percentage of
fallout when determining the amount of forward commitments to enter into.

The
table on the next page sets forth the scheduled repricing or maturity of the Banks
assets and liabilities at March 31, 2005 and managements assumptions regarding
prepayment percentages on loans and mortgage-backed securities, based on its current
experience in these portfolios. The Bank uses the withdrawal assumptions used by the OTS
with respect to interest-bearing and non-interest bearing checking and passbook accounts,
which are 17.0%, 17.0%, 17.0%, 16.0%, and 33.0%, respectively, although they are
considered conservative by the ALCO. Fixed rate investment securities and borrowings that
contain call or put provisions are generally shown in the category relating to their
respective final maturities or expected put or call option being exercised. However,
$305,000 of investments with final maturities averaging 18 months, but callable in six
months or less are categorized in the six months or less category, and $5.6 million of
investment securities with final maturities averaging 41 months, but callable in six
months to one-year are categorized in the six-months to one-year category in anticipation
of their calls. At March 31, 2005, the Bank had $365.0 million of FHLB advances that mature
beyond 2005 which contain various put positions exercisable at the option of the FHLB of Chicago. These
are shown in the category relating to their final maturities since it is uncertain whether the FHLB will exercies its put option.

The
effect of these assumptions is to quantify the dollar amount of items that are
interest-sensitive and may be repriced within each of the periods specified. Certain
shortcomings are inherent in using gap analysis to quantify exposure to interest rate
risk. For example, although certain assets and liabilities may have similar maturities or
repricings in the table, they may react differently to actual changes in market interest
rates. The interest rates on certain types of assets and liabilities may fluctuate in
advance of changes in market interest rates, while interest rates on other types may lag
behind changes in market rates. This is especially true in circumstances where management
has a certain amount of control over interest rates, such as the pricing of deposits.
Additionally, certain assets such as hybrid adjustable-rate mortgage loans have features
that restrict

25

---



changes in interest rates on a short-term basis and over the life of the
asset. Finally, as interest rates change, actual loan prepayment rates may differ
significantly from those rates assumed by management for presentation purposes in the
table.

Though
management believes that its asset/liability management strategies help to mitigate the
potential negative effects of changes in interest rates on the Banks operations, a
decrease in long term interest rates in the near term may adversely affect the Banks
operations because prepayments on higher-yielding mortgage-related assets would likely
accelerate and would be reinvested at lower rates. Conversely, increases in long-term
interest rates could benefit the Banks operation primarily due to a slowing of
prepayments on higher yielding loans receivable and mortgage-backed securities and rates
adjusting upward and new loans would be originated at higher rates, although the higher
rates may also dampen the level of new originations.

|                                | At March 31, 2005
|------------------------------- | -----------------
|
|
|Interest-earning assets:        |                  
|Loans receivable held for sale  |                  
|Loans receivable                |                  
|Mortgage-backed securities      |                  
|Investment securities           |                  
|available for sale              |                  
|Stock in FHLB of Chicago        |                  
|Interest-bearing deposits       |                  
|Federal funds sold              |                  
|                                |                  
|Total interest-earning          |                  
|assets                          |                  
|Impact of hedging               |                  
|activities(1)                   |                  
|                                |                  
|Total net interest-earning      |                  
|assets, adjusted for            |                  
|impact of hedging               |                  
|activities                      |                  
|Interest-bearing liabilities:   |                  
|Interest-bearing checking       |                  
|accounts                        |                  
|Money market accounts           |                  
|Passbook accounts               |                  
|Certificate accounts            |                  
|FHLB advances                   |                  
|Other borrowings                |                  
|                                |                  
|Total interest-bearing          |                  
|liabilities                     |                  
|                                |                  
|Interest sensitivity gap        |                  
|                                |                  
|Cumulative gap                  |                  
|                                |                  
|Cumulative gap as a percentage  |                  
|of total assets                 |                  
|Cumulative net interest-earning |                  
|assets as a percentage of       |                  
|interest-bearing liabilities    |                  
|At December 31, 2004            |                  
|Cumulative gap                  |                  
|Cumulative gap as a percentage  |                  
|of total assets                 |                  
|Cumulative net interest-earning |                  
|assets as a percentage of       |                  
|interest-bearing liabilities    |                  

---

(1)    
          Represents forward commitments to sell mortgage loans.

Since
December 31, 2004, our cumulative one-year gap has extended to a (8.20)% from (3.98)%. Both the sale of $76.8 million
of floating rate equity lines of credit and a large increase in money market accounts
due to the Bank's promotional efforts during the quarter directly impacted the negative gap position.
We expect to address this recent trend as we continue to implement asset/liability strategies during 2005,
including continued expansion of home equity lines of credit, origination of short-term hybrid arms, and use of additional
fixed-rate borrowings.

26

---



Regulatory Capital.The Bank is
subject to regulatory capital requirements under the rules of the Office of Thrift
Supervision (OTS). Failure to meet minimum capital requirements can initiate
certain mandatory, and possibly additional discretionary, actions by regulators, which
could have a material impact on the Banks financial statements. Under capital
adequacy guidelines and the regulatory framework for prompt corrective action, the Bank
must maintain capital amounts in excess of specified minimum ratios based on quantitative
measures of the Banks assets, liabilities, and certain off-balance sheet items as
calculated under regulatory accounting practices.

Quantitative
measures established by the OTS to ensure capital adequacy require the Bank to maintain
minimum amounts and ratios (as set forth in the table below) of three capital
requirements: a tangible capital (as defined in the regulations) to adjusted total assets
ratio, a core capital (as defined) to adjusted total assets ratio, and a risk-based
capital (as defined) to total risk-weighted assets ratio. The Bank met all capital
adequacy requirements to which it is subject as of March 31, 2005.

The
Banks actual capital amounts and ratios, as well as minimum amounts and ratios
required for capital adequacy and prompt corrective action provisions are presented below:

|                                   | Actual | For Capital
 Adequacy 
 Purposes | To Be Well
 Capitalized
 Under Prompt
  Corrective
    Action
   Provisions
|---------------------------------- | ------ | -------------------------------- | ---------------------------------------------------------------------------
|
|
|As of March 31, 2005:              |        |                                  |                                                                            
|Tangible capital (to total assets) |        |                                  | $                                                                          
|Core capital (to total assets)     |        |                                  | $                                                                          
|Total capital (to risk-weighted    |        |                                 
|assets)                            |        |                                  | $                                                                          
|Core capital (to risk-weighted     |        |                                 
|assets)                            |        |                                  | $                                                                          
|As of December 31, 2004:           |        |                                 
|Tangible capital (to total assets) |        |                                  | $                                                                          
|Core capital (to total assets)     |        |                                  | $                                                                          
|Total capital (to risk-weighted    |        |                                 
|assets)                            |        |                                  | $                                                                          
|Core capital (to risk-weighted     |        |                                 
|assets)                            |        |                                  | $                                                                          

A
reconciliation of consolidated stockholders equity of the Bank for financial
reporting purposes to capital available to the Bank to meet regulatory capital
requirements is as follows:

|                                                | March 31,
  2005 | December 31,
  2004
|----------------------------------------------- | ---------------- | -------------------
|
|Stockholder's equity of the Bank                |                  |                    
|Goodwill and core deposit intangibles           |                  |                    
|Non-permissible subsidiary deduction            |                  |                    
|Non-includable mortgage servicing rights        |                  |                    
|Regulatory capital adjustment for available for |                  |                    
|sale securities                                 |                  |                    
|Recourse on loan sales                          |                  |                    
|Allowance for loan losses                       |                  |                    
|                                                |                  |                    
|Core and supplementary capital                  |                  |                    
|                                                |                  |                    

Item 3.
Quantitative and Qualitative Disclosures About Market Risk

A
quantitative and qualitative analysis about market risk is included in the Companys
December 31, 2004 Form 10-K. There have been no material changes in the assumptions used
or in the results of market risk analysis as of March 31, 2005 since December 31, 2004.
See Asset/Liability Management in Item 2, for a further discussion of the
Companys interest rate sensitivity gap analysis.

Item 4. Controls and
Procedures

As
of March 31, 2005, our Chief Executive Officer and Chief Financial Officer carried
out an evaluation under their supervision, with the participation of other members of
management as they deemed appropriate, of the effectiveness of the design and operation of
the Companys disclosure controls and procedures as contemplated by Rule 13a-15(e)
under the Securities Exchange Act of 1934. Based upon, and as of the date of that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the
Companys disclosure controls and procedures are effective, in all material respects,
in timely alerting them to material information

27

---



relating to the Company (and its consolidated subsidiaries) and in ensuring that information required
to be included in the
periodic reports the Company files or submits to the SEC under the Securities Exchange Act
is recorded, processed, summarized and reported as required.

There has been no change in our internal control over fiancial reporting during the first quarter of
2005 that has materially affected or is reasonably likely to materially affect our internal control
over financial reporting.

Part II  Other
Information

Item 1. Legal
Proceedings. Not applicable.

Item 2. Unregistered
Sales of Equity Securities and Use of Proceeds.

The
following table sets forth information in connection with purchases of the Companys
common stock made by, or on behalf of, the Company during the first quarter of 2005.

|Period                                     | Total 
Number 
of Shares Purchased(1) | Average 
Price 
Paid per
  Share | Total Number of
Shares Purchased
   as Part of 
    Publicly 
 Announced Plans
   or Programs | Maximum Number
 of Shares that
   May Yet be
 Purchased under
  the Plans or
   Programs(2)
|------------------------------------------ | ------------------------------------- | -------------------------------- | --------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------
|January 1, 2005 through January 31, 2005 . |                                       |                                  |                                                                                               | 134,000                                                                                    
|February 1, 2005 through February 28, 2005 |                                       |                                  |                                                                                               | 258,500                                                                                    
|March 1, 2005 through March 31, 2005       |                                       |                                  |                                                                                               | 251,500                                                                                    
|                                           |                                       |                                  |                                                                                               |                                                                                            
|Total                                      |                                       |                                  |                                                                                               | 644,000                                                                                    
|                                           |                                       |                                  |                                                                                               |                                                                                            

---

| | (1) | The table does not include 89,993 shares that were surrendered
                    in payment of withholding tax in connection with the exercise of related
                    options during the quarter.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | The Companys Board of Directors approved the repurchase of up to 500,000
                    shares in November 2004. This program was completed with the purchase of the
                    remaining 10,000 shares in February 2005. We announced a new stock repurchase
                    plan in January 2005, which authorized the purchase of up to 1.2 million
                    shares of common stock. Unless earlier terminated by the Board of Directors,
                    this program will expire when we have completed the repurchase of all shares
                    authorized under the new plan.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Item 3. Defaults Upon
Senior Securities. Not applicable.

Item 4. Submission of
Matters to a Vote of Security Holders. Not applicable.

Item 5. Other
Information. None.

Item 6. Exhibits.

| | Exhibit | No.
3.  Certificate of Incorporation and By-laws.
| | ------- | -------------------------------------------------

| | (i) | Restated Certificate of Incorporation. (Incorporated herein by reference to
               Exhibit 3.1 to Registrants Form 8-K (File No. 0-18121) dated December 19,
               2000.)
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii) | Amended and Restated By-laws of Registrant. (Incorporated herein by reference to
               Exhibit No. 3 to Registrants September 30, 2003 Form 10-Q (File No.
               0-18121).)
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Exhibit | No.
4.1.          Certain instruments defining the rights of the holders of long-term debt of
the Company and of a subsidiary, involving total amount of indebtedness
not in excess of 10% of the total assets of the Company and its subsidiaries
on a consolidated basis, have not been filed as Exhibits. The Company
hereby agrees to furnish a copy of any of these agreements to the Commission upon request.
| | ------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Exhibit | No.
10.1.       Employment agreement, as amended, between Mid America Bank, fsb and James Eckel.*+
| | ------- | --------------------------------------------------------------------------------------------------

28

---



| | Exhibit | No. 
10.2.       Special termination agreement between Mid America Bank, fsb, and Edward A. Karasek.*+
| | ------- | ------------------------------------------------------------------------------------------------------

| | Exhibit | No. 
31.1.       Certification of Chief Executive Officer.+
| | ------- | -----------------------------------------------------------

| | Exhibit | No. 
31.2.       Certification of Chief Financial Officer.+
| | ------- | -----------------------------------------------------------

| | Exhibit | No. 
32.1. Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18
 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
 2002.+
| | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|+ | Filed
herewith.
|- | ---------------

|* | Indicated management contracts or compensatory plans
or arrangements required to be filed as an exhibit.
|- | --------------------------------------------------------------------------------------------------------

29

---



SIGNATURES

Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.

| |                  
| | -----------------
| | MAF Bancorp, Inc.
| | (Registrant)     

|                              |            
|----------------------------- | -----------
|/s/ Allen H. Koranda          | May 9, 2005
|Allen H. Koranda              | (Date)     
|Chairman of the Board and     |            
|Chief Executive Officer       |            
|(Principal Executive Officer) |            

|                                     |            
|------------------------------------ | -----------
|/s/ Jerry A. Weberling               | May 9, 2005
|Jerry A. Weberling                   | (Date)     
|Executive Vice President and         |            
|Chief Financial Officer and Director |            
|(Principal Financial Officer)        |            

30

---

# EXHIBIT INDEX

| | Exhibit | No.
3.  Certificate of Incorporation and By-laws.
| | ------- | -------------------------------------------------

| | (i) | Restated Certificate of Incorporation. (Incorporated herein by reference to
               Exhibit 3.1 to Registrants Form 8-K (File No. 0-18121) dated December 19,
               2000.)
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii) | Amended and Restated By-laws of Registrant. (Incorporated herein by reference to
               Exhibit No. 3 to Registrants September 30, 2003 Form 10-Q (File No.
               0-18121).)
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Exhibit | No. 
4.1.          Certain instruments defining the rights of the holders of long-term debt of
the Company and of a subsidiary, involving total amount of indebtedness
not in excess of 10% of the total assets of the Company and its subsidiaries
on a consolidated basis, have not been filed as Exhibits. The Company
hereby agrees to furnish a copy of any of these agreements to the Commission upon request.
| | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Exhibit | No. 
10.1.       Employment agreement, as amended, between Mid America Bank, fsb and James Eckel*+
| | ------- | --------------------------------------------------------------------------------------------------

| | Exhibit | No. 
10.2.       Special termination agreement between Mid America Bank, fsb, and Edward A. Karasek *+
| | ------- | ------------------------------------------------------------------------------------------------------

| | Exhibit | No. 
31.1.       Certification of Chief Executive Officer.+
| | ------- | -----------------------------------------------------------

| | Exhibit | No. 
31.2.       Certification of Chief Financial Officer.+
| | ------- | -----------------------------------------------------------

| | Exhibit | No. 
32.1. Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18
 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
 2002.+
| | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|+ | Filed
herewith.
|- | ---------------

|+ | Indicated management contracts or compensatory plans
or arrangements required to be filed as an exhibit.
|- | --------------------------------------------------------------------------------------------------------