| MutualFirst Announces Increased Second Quarter 2010 Earnings |
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| Posted by mincho2008 | |
| Saturday, 24 July 2010 | |
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MutualFirst Financial, Inc. , the holding company of MutualBank (the "Bank"), announced today that net income available for common shareholders for the second quarter ended June 30, 2010 was $1.3 million, or $.19 for basic and diluted earnings per common share. This compared to net income available for common shareholders for the same period in 2009 of $864,000, or $.13 for basic and diluted earnings per common share. Annualized return on assets was .48% and return on average tangible common equity was 5.66% for the second quarter of 2010 compared to .25% and 3.82% respectively, for the same period of last year. Net income available for common shareholders for the six months ended June 30, 2010 was $2.2 million, or $.32 for basic and diluted earnings per common share, consistent with the results from the same period in 2009. Annualized return on assets was .42% and return on average tangible common equity was 4.77% for the first half of 2010 compared to .44% and 4.85% respectively, for the same period of last year. Other financial highlights for the second quarter ended June 30, 2010 include: -- Non-performing assets declined $3.0 million during the second quarter
of 2010, reducing the non-performing asset ratio from 2.44% at March
31, 2010 to 2.31% as of June 30, 2010. Non-performing loans declined
$1.7 million in the second quarter of 2010 reducing the non-performing
loan ratio from 2.62% to 2.49%.
-- Net charge offs annualized to average loans for the quarter were .74%,
compared to .49% for quarter ended March 31, 2010 and .36% for quarter
ended June 30, 2009.
-- Allowance for loan losses to non-performing loans as of June 30, 2010
increased to 63.30% from 60.77% as of March 31, 2010 and allowance for
loan losses to loans receivable decreased slightly to 1.58% as of June
30, 2010 from 1.59% as of March 31, 2010.
-- Net interest income increased $566,000 for the quarter ended June 30,
2010 compared to the same quarter in 2009. On a linked quarter basis,
net interest income increased $390,000.
-- Net interest margin increased to 3.23% as of June 30, 2010 compared to
3.18% as of March 31, 2010 and 3.21% as of June 30, 2009.
-- Non-interest income for the quarter ended June 30, 2010 decreased
$753,000 compared to the second quarter 2009 due to approximately
$900,000 less gain on sale of loans and investments. On a linked
quarter basis, non-interest income increased $252,000.
-- Non-interest expense for the second quarter 2010 was $826,000 less
than the second quarter 2009. Excluding the one-time FDIC special
assessment in the second quarter 2009 of $630,000, non-interest
expense decreased $196,000. On a linked quarter basis, non-interest
expense increased $150,000 from the first quarter 2010.
"We continued to see improvement in the second quarter as we navigate through this current economic cycle," said David W. Heeter, President and CEO. "As we see improvement, we believe that our ability to retire the preferred stock issued from the Capital Purchase Plan will be possible without diluting current shareholders. Generating organic capital is a top priority." Heeter added, "We continue to review ways to increase shareholder value. We recently were an unsuccessful bidder for a FDIC assisted deal and we strongly believe this type of transaction would increase shareholder value. We will continue to seek out such transactions that are geographically and financially feasible." Assets totaled $1.4 billion at June 30, 2010, an increase from December 31, 2009 of $42.9 million, or 3.1%. Gross loans, excluding loans held for sale, decreased $45.7 million, or 4.2%. Consumer loans decreased $18.0 million, or 6.9%, commercial loans decreased $18.4 million, or 5.5%, and residential mortgage loans held in the portfolio decreased $9.3 million, or 1.9%. Residential mortgage loans held for sale decreased $208,000 and mortgage loans sold during the first half of 2010 totaled $23.0 million compared to $94.9 million sold in the first half of last year. The decrease in consumer lending was a result of the Bank suspending origination of indirect boat and recreational vehicle lending at the beginning of 2010, which accounted for approximately 49% of the consumer outstanding balances at the beginning of 2010. The decrease in commercial loans was a result of several commercial loans paying down, some of which were loans of concern for the Bank. Mortgage loan balances continue to decline as the Bank has sold a majority of its fixed rate production. Investment securities available for sale increased $77.5 million, or 59.2%, primarily due to the current liquidity available to the Bank. Allowance for loan losses was $16.2 million at June 30, 2010, a decrease of $166,000 from December 31, 2009. Net charge offs for the quarter ended June 30, 2010 were $1.9 million, or .74% of average loans on an annualized basis compared to $992,000, or .36% of average loans for the comparable period in 2009. Net charge offs for the six months ended June 30, 2010, $3.2 million, or .61% of average loans on an annualized basis compared to $2.0 million, or .35% of average loans for the comparable period in 2009. Net charge offs increased as a larger amount of previously identified problem loans were settled in the quarter than in the same period in 2009. On a linked quarter basis net charge offs increased from an annualized .49% of average loans for the quarter ended March 31, 2010 to .74% for the current quarter. The allowance for loan losses as a percentage of non-performing loans and total loans was 63.30% and 1.58%, respectively at June 30, 2010 compared to 50.38% and 1.53%, respectively at December 31, 2009. Total deposits were $1.1 billion at June 30, 2010 an increase of $64.0 million, or 6.1% from December 31, 2009. This increase was due to increases in certificates of deposit and savings deposits of $35.4 million and increases in demand and money market deposits of $28.6 million. Total borrowings decreased $25.2 million to $186.8 million at June 30, 2010 from $212.1 million at December 31, 2009 as the Bank utilized excess liquidity to pay down maturing FHLB advances.Stockholders' equity was $134.4 million at June 30, 2010, an increase of $4.6 million, or 3.6% from December 31, 2009. The increase was due primarily to net income of $3.1 million and unrealized gains on securities of $3.3 million. This increase was partially offset by dividend payments of $838,000 to common shareholders and $410,000 to preferred shareholders and net unrealized losses on derivatives of $241,000. The Bank's risk-based capital ratio was well in excess of "well-capitalized" levels as defined by all regulatory standards as of June 30, 2010. Net interest income before the provision for loan losses increased $566,000 from $10.3 million for the three months ended June 30, 2009 to $10.9 million for the three months ended June 30, 2010. The primary reason for the increase was an increase in average earning assets of $61.2 million as a result of increased liquidity and an increase in net interest margin of 2 basis points to 3.23% in the second quarter 2010 compared to 3.21% for the second quarter 2009. On a linked quarter basis, net interest income before the provision for loan losses increased $390,000 primarily due to an increase in average earning assets of $28.5 million and an increase of 5 basis points in net interest margin. Net interest income before the provision for loan losses increased $662,000 from $20.7 million for the six months ended June 30, 2009 to $21.4 million for the six months ended June 30, 2010. The primary reason for the increase was an increase in average earning assets of $45.9 million as a result of increased liquidity, partially offset by a decrease in net interest margin of 2 basis points to 3.20% in the first half of 2010 compared to 3.22% for the first half of 2009. The provision for loan losses for the second quarter of 2010 was $1.5 million compared to $1.8 million in the second quarter of 2009. The provision for loan loss for the first half of 2010 was $3.1 million compared to $3.2 million in the first half of 2009. Non-performing loans to total loans at June 30, 2010 were 2.49% compared to 2.60% at June 30, 2009. Non-performing loans to total loans have also declined from 3.03% as of December 31, 2009 and 2.62% as of March 2010. Non-performing loans in all loan segments have decreased. Non-performing assets to total assets were 2.31% at June 30, 2010 comparing favorably to ratios of 2.44% at March 31, 2010, 2.86% at December 31, 2009 and 2.41% as of June 30, 2009. Heeter continued, "Asset quality has continued to improve over the last couple of quarters and we are making considerable progress to reduce non-performing assets. We continue to monitor our loan portfolio closely to ensure we are taking prompt action when necessary to minimize possible losses." Non-interest income decreased $753,000 to $3.4 million for the three months ended June 30, 2010 compared to the same period in 2009. The decrease was primarily due to a reduction on gain on sale of loans of $409,000 as mortgage loan sales slowed as did production in comparison to the second quarter of 2009. Another reason for the decline was a $323,000 decrease in gains on sale of securities and a $151,000 increase in other than temporary impairment in the second quarter of 2010 compared to the second quarter of 2009. Other than temporary impairment in the second quarter of 2010 included several private labeled mortgage backed securities that have seen charge offs in the last quarter in the individual mortgage back pools. These decreases were partially offset by increases in service fees on transaction accounts of $10,000 and increases in commission income of $222,000. The increase in commission income was due primarily to commissions received from the trust and brokerage businesses for the quarter. On a linked quarter basis, non-interest income increased by $252,000. Non-interest income decreased $1.2 million to $6.5 million for the six months ended June 30, 2010 compared to the same period in 2009. The decrease was primarily due to a reduction in gain on sale of loans of $1.1 million and increased other than temporary impairment of securities of approximately $528,000. These decreases are partially offset with increases in commission income of $536,000. Non-interest expense decreased $826,000 to $10.5 million for the three months ended June 30, 2010 compared to $11.3 million for the same period in 2009, or a decrease of $196,000 when excluding the one-time FDIC special assessment in the second quarter for $630,000. Decreases in current quarter non-interest expense compared to the same period in 2009 include decreases in salaries and employee benefits of $356,000, decreases in marketing expense of $57,000, decreases in intangible amortization of $44,000, decreases in deposit insurance premiums of $592,000 and decreases in other expenses of $37,000. These decreases were partially offset by increases in data processing fees of $26,000, increases in software subscriptions and maintenance of $58,000 and increases in other repossessed asset expense of $231,000. On a linked quarter basis, non-interest expense increased by $150,000 compared to the three months ended March 31, 2010, primarily due to an increase in repossessed asset expense. Non-interest expense decreased $863,000 to $20.8 million, for the six months ended June 30, 2010 compared to $21.7 million for the same period in 2009. The decrease in expenses was partially due to the FDIC special assessment in the second quarter of 2009 as discussed above. Another reason for the decrease was a decline in salaries and benefits of $480,000. These decreases were partially offset by an increase of $401,000 in repossessed asset expense. Heeter concluded, "Our staff has diligently decreased expenses over the last several quarters and are continually attempting to increase the efficiency of our company." MutualFirst Financial, Inc. and MutualBank, an Indiana-based financial institution, has thirty-three full-service retail financial centers in Delaware, Elkhart, Grant, Kosciusko, Randolph, St. Joseph and Wabash Counties in Indiana. MutualBank also has two Wealth Management and Trust offices located in Carmel and Crawfordsville, Indiana and a loan origination office in New Buffalo, Michigan. MutualBank is a leading residential lender in each of the market areas it serves, and provides a full range of financial services including wealth management and trust services and Internet banking services. The Company's stock is traded on the NASDAQ National Market under the symbol "MFSF" and can be found on the internet at www.bankwithmutual.com. Statements contained in this release, which are not historical facts, are forward-looking statements, as that term is defined in the Private Securities Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time. MUTUALFIRST FINANCIAL INC.
December
June 30, 31,
Balance Sheet (Unaudited): 2010 2009
-------------------------- ---- ----
(000) (000)
Assets
Cash and cash equivalents $60,613 $46,341
Interest-bearing deposits 3,001 0
Investment securities - AFS 208,452 130,914
Investment securities - HTM 7,097 8,147
Loans held for sale 2,313 2,521
Loans, gross 1,030,453 1,076,108
Allowance for loan loss (16,248) (16,414)
------- -------
Net loans 1,014,205 1,059,694
Premise and equipment 33,927 34,556
FHLB of Indianapolis stock 18,632 18,632
Investment in limited partnerships 3,905 4,161
Cash surrender value of life insurance 45,039 44,247
Prepaid FDIC premium 5,074 5,907
Core deposit and other intangibles 5,175 5,881
Deferred income tax benefit 16,590 19,514
Other assets 17,871 18,519
Total assets 1,441,894 1,399,034
========= =========
Liabilities and Stockholders' Equity
Deposits 1,109,209 1,045,196
FHLB advances 173,314 197,960
Other borrowings 13,528 14,114
Other liabilities 11,481 12,037
Stockholders' equity 134,362 129,727
Total liabilities and stockholders'
equity 1,441,894 1,399,034
========= =========
Three Three Three
Months Months Months
Ended Ended Ended
June 30, March 31, June 30,
Income Statement (Unaudited): 2010 2010 2009
----------------------------- ---- ---- ----
(000) (000) (000)
Total interest income $17,403 $17,244 $18,136
Total interest expense 6,525 6,756 7,824
----- ----- -----
Net interest income 10,878 10,488 10,312
Provision for loan losses 1,525 1,525 1,750
----- ----- -----
Net interest income after provision
for loan losses 9,353 8,963 8,562
----- ----- -----
Non-interest income
-------------------
Fees and service charges 1,887 1,740 1,877
Net gain (loss) on sale of investments 35 285 358
Other than temporary impairment of
securities (151) (577) 0
Equity in losses of limited
partnerships (128) (127) (78)
Commissions 1,082 942 860
Net gain (loss) on loan sales 209 354 618
Net servicing fees 31 37 60
Increase in cash surrender value of
life insurance 372 383 413
Other income 56 104 38
--- --- ---
Total non-interest income 3,393 3,141 4,146
----- ----- -----
Non-interest expense
--------------------
Salaries and benefits 5,332 5,336 5,688
Occupancy and equipment 1,372 1,425 1,343
Data processing fees 387 411 361
Professional fees 243 342 327
Marketing 306 298 363
Deposit insurance 453 446 1,045
Software subscriptions and maintenance 403 397 345
Intangible amortization 353 353 397
Repossessed assets expense 614 467 383
Other expenses 1,021 859 1,058
Total non-interest expense 10,484 10,334 11,310
Income before taxes 2,262 1,770 1,398
Income tax provision 487 426 83
Net income 1,775 1,344 1,315
Preferred stock dividends and
amortization 451 451 451
Net income available to common
shareholders $1,324 $893 $864
====== ==== ====
Six Six
Months Months
Ended Ended
June June
30, 30,
Income Statement (Unaudited): 2010 2009
----------------------------- ---- ----
(000) (000)
Total interest income $34,647 $36,792
Total interest expense 13,281 16,088
------ ------
Net interest income 21,366 20,704
Provision for loan losses 3,050 3,200
----- -----
Net interest income after provision
for loan losses 18,316 17,504
------ ------
Non-interest income
-------------------
Fees and service charges 3,627 3,566
Net gain (loss) on sale of investments 320 359
Other than temporary impairment of
securities (728) (200)
Equity in losses of limited
partnerships (255) (155)
Commissions 2,024 1,488
Net gain (loss) on loan sales 564 1,644
Net servicing fees 68 137
Increase in cash surrender value of
life insurance 755 799
Other income 159 88
--- ---
Total non-interest income 6,534 7,726
----- -----
Non-interest expense
--------------------
Salaries and benefits 10,668 11,148
Occupancy and equipment 2,797 2,770
Data processing fees 798 715
Professional fees 585 662
Marketing 604 725
Deposit insurance 899 1,433
Software subscriptions and maintenance 800 677
Intangible amortization 706 795
Repossessed assets expense 1,081 680
Other expenses 1,881 2,077
Total non-interest expense 20,819 21,682
Income before taxes 4,031 3,548
Income tax provision 913 437
Net income 3,118 3,111
Preferred stock dividends and
amortization 902 902
Net income available to common
shareholders $2,216 $2,209
====== ======
Average Balances, Net Interest Income, Yield Earned and Rates Paid
-------------------------------------------------------------------
Three
mos ended
6/30/2010
---------
Average Interest Average
Outstanding Earned/ Yield/
Balance Paid Rate
------- ---- ----
(000) (000)
Interest-Earning Assets:
Interest -bearing deposits $88,121 $56 0.25%
Mortgage-backed securities:
Available-for-sale 175,556 1,721 3.92
Held-to-maturity 7,481 131 7.00
Investment securities:
Available-for-sale 18,346 161 3.51
Loans receivable 1,039,443 15,242 5.87
Stock in FHLB of Indianapolis 18,632 92 1.98
------ --- ----
Total interest-earning assets (3) 1,347,579 17,403 5.17
Non-interest earning assets, net of
allowance for loan losses and
unrealized gain/loss 131,466
Total assets $1,479,045
==========
Interest-Bearing Liabilities:
Demand and NOW accounts $186,499 257 0.55
Savings deposits 91,545 36 0.16
Money market accounts 66,621 156 0.94
Certificate accounts 669,630 4,174 2.49
------- ----- ----
Total deposits 1,014,295 4,623 1.82
Borrowings 210,792 1,902 3.61
------- ----- ----
Total interest-bearing accounts 1,225,087 6,525 2.13
Non-interest bearing deposit accounts 107,805
Other liabilities 14,823
------
Total liabilities 1,347,715
Stockholders' equity 131,330
-------
Total liabilities and stockholders'
equity $1,479,045
==========
Net earning assets $122,492
========
Net interest income $10,878
=======
Net interest rate spread 3.04%
====
Net yield on average interest-earning
assets 3.23%
====
Average interest-earning assets to
average interest-bearing liabilities 110.00%
======
Three
mos
ended
6/30/2009
---------
Average Interest Average
Outstanding Earned/ Yield/
Balance Paid Rate
------- ---- ----
(000) (000)
Interest-Earning Assets:
Interest -bearing deposits $43,102 $17 0.16%
Mortgage-backed securities:
Available-for-sale 71,921 953 5.30
Held-to-maturity 9,684 147 6.07
Investment securities:
Available-for-sale 29,619 299 4.04
Loans receivable 1,113,404 16,670 5.99
Stock in FHLB of Indianapolis 18,632 50 1.07
------ --- ----
Total interest-earning assets (3) 1,286,362 18,136 5.64
Non-interest earning assets, net of
allowance for loan losses and
unrealized gain/loss 123,385
Total assets $1,409,747
==========
Interest-Bearing Liabilities:
Demand and NOW accounts $161,270 194 0.48
Savings deposits 86,417 67 0.31
Money market accounts 42,446 121 1.14
Certificate accounts 631,478 4,905 3.11
------- ----- ----
Total deposits 921,611 5,287 2.29
Borrowings 245,273 2,537 4.14
------- ----- ----
Total interest-bearing accounts 1,166,884 7,824 2.68
Non-interest bearing deposit accounts 94,243
Other liabilities 18,971
------
Total liabilities 1,280,098
Stockholders' equity 129,649
-------
Total liabilities and stockholders'
equity $1,409,747
==========
Net earning assets $119,478
========
Net interest income $10,312
=======
Net interest rate spread 2.96%
====
Net yield on average interest-earning
assets 3.21%
====
Average interest-earning assets to
average interest-bearing liabilities 110.24%
======
Three Three Three
Months Months Months
Ended Ended Ended
June 30, March 31, June 30,
Selected Financial Ratios and
Other Financial Data
(Unaudited): 2010 2010 2009
----------------------------- ---- ---- ----
Share and per share data:
Average common shares outstanding
Basic 6,869,535 6,861,589 6,837,751
Diluted 6,881,672 6,864,138 6,837,751
Per common share:
Basic earnings $0.19 $0.13 $0.13
Diluted earnings $0.19 $0.13 $0.13
Dividends $0.06 $0.06 $0.12
Dividend payout ratio 31.58% 46.15% 92.31%
Performance Ratios:
Return on average assets (ratio
of net
income to average total
assets)(1) 0.48% 0.37% 0.25%
Return on average tangible common
equity (ratio of net income 5.66% 3.87% 3.82%
to average tangible common
equity)(1)
Interest rate spread information:
Average during the period(1) 3.04% 3.00% 2.96%
Net interest margin(1)(2) 3.23% 3.18% 3.21%
Efficiency Ratio 73.46% 75.82% 78.23%
Ratio of average interest-
earning
assets to average interest-
bearing
liabilities 110.00% 108.84% 110.24%
Allowance for loan losses:
Balance beginning of period $16,635 $16,414 $15,590
Charge offs:
One- to four- family 258 465 431
Multi-family 232 0 0
Commercial real estate 692 344 172
Construction or development 0 0 0
Consumer loans 917 895 721
Commercial business loans 0 0 26
--- --- ---
Sub-total 2,099 1,704 1,350
Recoveries:
One- to four- family 61 85 17
Multi-family 0 0 0
Commercial real estate 0 68 143
Construction or development 0 0 0
Consumer loans 126 247 198
Commercial business loans 0 0 0
--- --- ---
Sub-total 187 400 358
Net charge offs 1,912 1,304 992
Additions charged to operations 1,525 1,525 1,750
----- ----- -----
Balance end of period $16,248 $16,635 $16,348
======= ======= =======
Net loan charge-offs to average
loans (1) 0.74% 0.49% 0.36%
Six Six
Months Months
Ended Ended
June June
30, 30,
Selected Financial Ratios and Other
Financial Data (Unaudited): 2010 2009
----------------------------------- ---- ----
Share and per share data:
Average common shares outstanding
Basic 6,865,562 6,831,647
Diluted 6,872,905 6,831,647
Per common share:
Basic earnings $0.32 $0.32
Diluted earnings $0.32 $0.32
Dividends $0.12 $0.24
Dividend payout ratio 37.50% 75.00%
Performance Ratios:
Return on average assets (ratio of net
income to average total assets)(1) 0.42% 0.44%
Return on average tangible common equity
(ratio of net income 4.77% 4.85%
to average tangible common equity)(1)
Interest rate spread information:
Average during the period(1) 3.02% 2.97%
Net interest margin(1)(2) 3.20% 3.22%
Efficiency Ratio 74.62% 76.26%
Ratio of average interest-earning
assets to average interest-bearing
liabilities 109.42% 110.00%
Allowance for loan losses:
Balance beginning of period $16,414 $15,107
Charge offs:
One- to four- family 723 531
Multi-family 232 0
Commercial real estate 1,036 537
Construction or development 0 0
Consumer loans 1,812 1,381
Commercial business loans 0 83
--- ---
Sub-total 3,803 2,532
Recoveries:
One- to four- family 146 94
Multi-family 0 0
Commercial real estate 68 143
Construction or development 0 0
Consumer loans 373 334
Commercial business loans 0 2
--- ---
Sub-total 587 573
Net charge offs 3,216 1,959
Additions charged to operations 3,050 3,200
----- -----
Balance end of period $16,248 $16,348
======= =======
Net loan charge-offs to average loans
(1) 0.61% 0.35%
June 30, March 31, June 30,
2010 2010 2009
---- ---- ----
Total shares outstanding 6,984,754 6,984,754 6,984,754
Tangible book value per share $13.86 $13.23 $12.96
Tangible common equity to tangible
assets 6.94% 6.42% 6.79%
Nonperforming assets (000's)
Non-accrual loans
One- to four- family $13,501 $14,234 $13,186
Commercial real estate 7,464 7,309 8,692
Consumer loans 2,013 2,435 2,788
Commercial business loans 592 1,561 2,852
--- ----- -----
Total non-accrual loans 23,570 25,539 27,518
Accruing loans past due 90 days or
more 876 0 1,039
Restructured loans 1,224 1,833 100
----- ----- ---
Total nonperforming loans 25,670 27,372 28,657
Real estate owned 6,171 6,762 3,176
Other repossessed assets 1,318 2,027 1,499
Nonperforming securities 100 100 0
--- --- ---
Total nonperforming assets $33,259 $36,261 $33,332
Asset Quality Ratios:
Non-performing assets to total
assets 2.31% 2.44% 2.41%
Non-performing loans to total loans 2.49% 2.62% 2.60%
Allowance for loan losses to non-
performing loans 63.30% 60.77% 57.05%
Allowance for loan losses to loans
receivable 1.58% 1.59% 1.49%
(1) Ratios for the three and six month periods have been
annualized.
(2) Net interest income divided by average interest earning
assets.
(3) Calculated net of deferred loan fees, loan discounts, loans in
process and loss reserves.
Source: MutualFirst Financial, Inc. |
