MUNCIE, Ind., July 17 /PRNewswire-FirstCall/ -- MutualFirst Financial, Inc. , the holding company of MutualBank (the "Bank"), announced today that net income available to common shareholders for the second quarter ended June 30, 2009 was $864,000, or $.13 for basic and diluted earnings per common share. This compared to net income for the same period in 2008 of $1.2 million, or $.30 for basic and diluted earnings per common share. Annualized return on assets was .25% and return on average tangible common equity was 3.82% for the second quarter of 2009 compared to .49% and 6.58% respectively, for the same period last year.
Net income available to common shareholders for the six months ended June 30, 2009 was $2.2 million or $.33 for basic and diluted earnings per common share. This compared to net income for the comparable period in 2008 of $2.4 million or $.60 for basic and diluted earnings per share. Annualized return on average assets was .31% and return on average tangible common equity was 4.85% for the first half of 2009 compared to .50% and 6.69% respectively, for the same period last year.
"We are pleased with our performance as we manage through this very challenging economic environment," said David W. Heeter, President and CEO, "and we will continue to work diligently to increase value for our shareholders."
Assets totaled $1.4 billion at June 30, 2009, a decrease from December 31, 2008 of $4.3 million, or 0.3%. Gross loans, excluding loans held for sale, decreased $27.8 million, or 2.5%. Consumer loans decreased $3.7 million, or 1.4%, and commercial loans increased $6.4 million, or 2.0%, while residential mortgage loans held in the portfolio decreased $30.5 million, or 5.8%. Residential mortgage loans held for sale increased $15.5 million and mortgage loans sold during the first half of 2009 totaled $94.9 million compared to $28.2 million sold in the first half of last year. Mortgage loan sales are the primary reasons for the decreased loan balances. Investment securities available for sale increased $30.3 million, or 39.2% primarily due to investments in highly rated municipal, corporate and mortgage-backed securities.
Allowance for loan losses was $16.3 million at June 30, 2009, an increase of $1.2 million from December 31, 2008. Net charge offs for the quarter ended June 30, 2009 were $992,000, or .36% of average loans on an annualized basis compared to $569,000, or .28% of average loans for the comparable period in 2008. Net charge offs for the first half of 2009 were $2.0 million, or .35% of average loans on an annualized basis compared to $1.1 million, or .27% of average loans for the comparable period in 2008. On a linked quarter basis net charge offs increased from an annualized .34% of average loans for the quarter ended March 31, 2009 to .36% for the current quarter. The allowance for loan losses as a percentage of non-performing loans and total loans was 57.05% and 1.49%, respectively at June 30, 2009 compared to 69.38% and 1.41%, respectively at March 31, 2009. Heeter commented, "We continue to actively monitor the credit risk in our loan portfolio and believe we have increased the allowance properly as current information dictates."
Total deposits were $1.0 billion at June 30, 2009 an increase of $37.7 million, or 3.9% from December 31, 2008. This increase was due primarily to increases in certificates of deposit and savings deposits of $45.7 million, partially offset by declines in demand and money market deposits of $8.0 million. Total borrowings decreased $43.1 million to $236.0 million at June 30, 2009 from $279.1 million at December 31, 2008 primarily due to the payment of maturing and variable rate FHLB advances.
Stockholders' equity was $129.5 million at June 30, 2009, a decrease of $1.0 million, or 0.7% from December 31, 2008. The decline was due primarily to a decrease in accumulated other comprehensive income of $1.9 million from a loss of $2.0 million at December 31, 2008 to a loss of $3.9 million at June 30, 2009 due to increased discount rates used to price trust preferred securities in an inactive market. Other reasons for the decline include dividend payments of $1.7 million to common shareholders and $639,000 to preferred shareholders. These were partially offset by net income of $3.1 million and Employee Stock Ownership Plan (ESOP) shares earned of $102,000. The Bank's risk-based capital ratio is well in excess of "well-capitalized" levels as defined by all regulatory standards.
Net interest income before the provision for loan losses increased $3.5 million from $6.8 million for the three months ended June 30, 2008 to $10.3 million for the three months ended June 30, 2009. The primary reason for the increase was an increase in average earning assets of $418.6 million due to the acquisition of MFB Corp in the third quarter of 2008. In addition, net interest margin increased 8 basis points to 3.21% in the second quarter 2009 compared to 3.13% for the second quarter 2008.
Net interest income before the provision for loan losses increased $7.5 million from $13.2 million for the six months ended June 30, 2008 to $20.7 million for the six months ended June 30, 2009. As mentioned above, the primary reason for the increase was an increase in average earning assets of $420.5 million due to the acquisition of MFB Corp in the third quarter of 2008. In addition, net interest margin increased 18 basis points to 3.22% in for the six months ended June 30, 2009 compared to 3.04% for the comparable period in 2008.
The provision for loan losses for the second quarter of 2009 was $1.8 million, an increase from $733,000 for last year's comparable period. The increase was due primarily to an increased loan portfolio, increased net charge offs, increased non-performing loans and increased delinquency over the comparable period in 2008. Non-performing loans to total loans at June 30, 2009 were 2.60% compared to 2.03% at March 31, 2009. This increase in non-performing loans was primarily due to an increased level of non-performing residential property loans and non-performing commercial business loans. Non-performing assets to total assets were 2.41% at June 30, 2009 compared to 1.90% at March 31, 2009.
The provision for loan losses for the first half of 2009 was $3.2 million, an increase from $1.3 million for last year's comparable period. This increase was due primarily to the above mentioned reasons.
Non-interest income increased $2.0 million to $4.1 million, or 96.5% for the three months ended June 30, 2009 compared to the same period in 2008. The increase was primarily due to an increase in gains on sales and servicing of loans sold of $521,000, or 331.8%, as a result of increases in mortgage loan production and commitments to sell loans as of June 30, 2009. Another reason for the increase was due to the increase in gain on sale of investments of $358,000 as a result of a gain on the strategic sale of investments and a gain on the sale of a bank subsidiary. Other increases included increases in service fees on transaction accounts of $511,000, or 37.5%, increases in commission income of $552,000, or 179.4%, and increases in cash surrender value of life insurance of $136,000, or 49.4%, all primarily due to the acquisition of MFB Corp in the third quarter of 2008. On a linked quarter basis, non-interest income increased $565,000 mainly due to increases in gains on sales of investments of $557,000, increases in service fees on transaction accounts of $187,000, and increases in commission income of $232,000. These increases were partially offset by a decrease in gains on sales and servicing of loans sold of $425,000.
For the six month period ended June 30, 2009 non-interest income increased $3.5 million, or 82.7%, to $7.7 million compared to $4.2 million for the same period in 2008. The reasons are similar to those mentioned above.
Non-interest expense increased $4.4 million to $11.3 million for the three months ended June 30, 2009 compared to $6.9 million for the same period in 2008. Increases in current quarter non-interest expense compared to the same period in 2008 include increases in salaries and employee benefits of $1.8 million, increases in occupancy and equipment expense of $345,000, increases in professional fees of $96,000 and increases in marketing expense of $45,000. An increase in other expenses of $2.0 million was partially due to increases in FDIC insurance premiums of $969,000, of which $630,000 was related to the FDIC special assessment, increases in software subscriptions and maintenance of $187,000 and increases in intangible amortization of $340,000. All of these increases were primarily due to the acquisition of MFB Corp in the third quarter of 2008. On a linked quarter basis, non-interest expense increased by $937,000 compared to the three months ended March 31, 2009, primarily due to the FDIC special assessment of $630,000 and increases in salaries and benefits of $228,000 primarily due to the increased mortgage production.
For the six month period ended June 30, 2009 non-interest expense increased $8.3 million, or 62.1%, to $21.7 million compared to $13.4 million for the same period in 2008. The reasons for the increase are similar to those mentioned above.
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 http://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. ------------------------------------------- Selected Financial Condition June 30, December 31, Data(Unaudited): 2009 2008 ---------------------------------------------------------------------- (000) (000) Total Assets $1,384,329 $1,388,827 Cash and cash equivalents 21,012 39,703 Loans held for sale 17,047 1,541 Loans receivable, net 1,084,080 1,113,132 Investment securities held to maturity 9,422 9,676 Investment securities available for sale, at fair value 107,201 77,255 Total deposits 1,000,197 962,514 Total borrowings 235,992 279,104 Total stockholders' equity 129,547 130,515 Three Three Three Six Six Months Months Months Months Months Ended Ended Ended Ended Ended June 30, March 31, June 30, June 30, June 30, Selected Operations Data (Unaudited): 2009 2009 2008 2009 2008 -------------------------------------------------------------------- (000) (000) (000) (000) (000) Total interest income $18,136 $18,656 $13,489 $36,792 $27,246 Total interest expense 7,824 8,264 6,689 16,088 14,086 ----- ----- ----- ------ ------ Net interest income 10,312 10,392 6,800 20,704 13,160 Provision for loan losses 1,750 1,450 733 3,200 1,345 ----- ----- --- ----- ----- Net interest income after provision for loan losses 8,562 8,942 6,067 17,504 11,815 ----- ----- ----- ------ ------ Non-interest income --------------------- Fees and service charges 1,877 1,690 1,365 3,566 2,525 Net gain (loss) on sale of investments 358 (199) 0 159 137 Equity in losses of limited partnerships (78) (78) (24) (155) (47) Commissions 860 628 308 1,488 600 Net gain (loss) on loan sales 678 1,103 157 1,781 367 Increase in cash surrender value of life insurance 413 386 276 799 553 Other income 38 51 27 88 95 -- -- -- -- -- Total non-interest income 4,146 3,581 2,109 7,726 4,230 ----- ----- ----- ----- ----- Non-interest expense ---------------------- Salaries and benefits 5,688 5,460 3,892 11,148 7,711 Occupancy and equipment 1,344 1,427 999 2,770 1,997 Data processing fees 361 354 243 715 510 Professional fees 327 335 231 662 440 Marketing 362 363 317 725 547 Other expenses 3,228 2,434 1,189 5,662 2,168 ----- ----- ----- ----- ----- Total non-interest expense 11,310 10,373 6,871 21,682 13,373 ------ ------ ----- ------ ------ Income before taxes 1,398 2,150 1,305 3,548 2,672 Income tax provision 83 354 131 437 282 -- --- --- --- --- Net income 1,315 1,796 1,174 3,111 2,390 Preferred stock dividends and amortization 451 451 902 --- --- ------ --- ------ Net income available to common shareholders $864 $1,345 $1,174 $2,209 $2,390 ==== ====== ====== ====== ====== Average Balances, Net Interest Income, Yield Earned and Rates Paid ------------------------------- Three Three mos ended mos ended 6/30/2009 6/30/2008 -------------------------------------------------------------------- Average Interest Average Average Interest Average Outstanding Earned/ Yield/ Outstanding Earned/ Yield/ Balance Paid Rate Balance Paid Rate -------------------------------------------------------------------- (000) (000) (000) (000) Interest-Earning Assets: Interest-bearing deposits $43,102 $17 0.16% $6,951 $27 1.55% Mortgage-backed securities: Available- for-sale 71,921 953 5.30 16,141 219 5.43 Held-to- maturity 9,684 147 6.07 Investment securities: Available- for-sale 29,619 299 4.04 33,205 362 4.36 Loans receivable 1,113,404 16,670 5.99 801,027 12,747 6.37 Stock in FHLB of Indianapolis 18,632 50 1.07 10,395 134 5.16 ------- ------- ------- ------- ------- ------- Total interest- earning assets(3) 1,286,362 18,136 5.64 867,719 13,489 6.22 Non-interest earning assets, net of allowance for loan losses and unrealized gain/loss 123,385 89,475 ------- ------- Total assets $1,409,747 $957,194 ========== ========= Interest-Bearing Liabilities: Demand and NOW accounts $161,270 194 0.48 $123,177 290 0.94 Savings deposits 86,417 67 0.31 55,487 73 0.53 Money market accounts 42,446 121 1.14 22,229 75 1.35 Certificate accounts 631,478 4,905 3.11 419,724 4,142 3.95 ------- ------- ------- ------- ------- ------- Total deposits 921,611 5,287 2.29 620,617 4,580 2.95 Borrowings 245,273 2,537 4.14 185,197 2,109 4.56 ------- ------- ------- ------- ------- ------- Total interest- bearing accounts 1,166,884 7,824 2.68 805,814 6,689 3.32 Non-interest bearing deposit accounts 94,243 49,274 Other liabilities 18,971 15,626 ------ ------ Total liabilities 1,280,098 870,714 Stockholders' equity 129,649 86,480 ------- ------ Total liabilities and stockholders' equity $1,409,747 $957,194 ========== ======== Net earning assets $119,478 $61,905 ======== ======= Net interest income $10,312 $6,800 ======= ====== Net interest rate spread 2.96% 2.90% ==== ==== Net yield on average interest- earning assets 3.21% 3.13% ==== ==== Average interest- earning assets to average interest- bearing liabilities 110.24% 107.68% ====== ====== Three Three Three Six Six Months Months Months Months Months Ended Ended Ended Ended Ended June 30, March 31, June 30, June 30, June 30, Selected Financial Ratios and Other Financial Data 2009 2009 2008 2009 2008 (Unaudited): ---------------------------------------------------- ------------------- Share and per share data: Average common shares outstanding Basic 6,837,751 6,825,544 3,970,982 6,831,647 3,987,123 Diluted 6,837,751 6,825,544 3,970,982 6,831,647 3,987,123 Per common share: Basic earnings $0.13 $0.20 $0.30 $0.33 $0.60 Diluted earnings $0.13 $0.20 $0.30 $0.33 $0.60 Dividends $0.12 $0.12 $0.16 $0.24 $0.32 Dividend payout ratio 92.31% 60.00% 53.33% 72.73% 53.33% Performance Ratios: Return on average assets (ratio of net income to average total assets)(1) 0.25% 0.38% 0.49% 0.31% 0.50% Return on average tangible common equity (ratio of net income to average tangible common equity)(1) 3.82% 5.86% 6.58% 4.85% 6.69% Interest rate spread information: Average during the period(1) 2.96% 2.98% 2.90% 2.97% 2.79% Net interest margin(1)(2) 3.21% 3.23% 3.13% 3.22% 3.04% Efficiency Ratio 78.23% 74.24% 77.12% 76.26% 76.90% Ratio of average interest-earning assets to average interest-bearing liabilities 110.24% 109.75% 107.68% 110.00% 107.59% Allowance for loan losses: Balance beginning of period $15,590 $15,107 $8,440 $15,107 $8,352 Charge offs: One- to four- family 431 100 113 531 115 Commercial real estate 172 365 153 537 184 Consumer loans 721 660 541 1,381 1,089 Commercial business loans 26 57 0 83 30 -- -- -- -- -- Sub-total 1,350 1,182 807 2,532 1,418 Recoveries: One- to four- family 17 77 35 94 37 Commercial real estate 143 0 0 143 0 Consumer loans 198 136 203 334 231 Commercial business loans 0 2 0 2 57 -- -- -- -- -- Sub-total 358 215 238 573 325 Net charge offs 992 967 569 1,959 1,093 Additions charged to operations 1,750 1,450 733 3,200 1,345 ----- ----- --- ----- ----- Balance end of period $16,348 $15,590 $8,604 $16,348 $8,604 ======= ======= ====== ======= ====== Net loan charge- offs to average loans (1) 0.36% 0.34% 0.28% 0.35% 0.27% June 30, March 31, June 30, 2009 2009 2008 -------------------------------- Total shares outstanding 6,984,754 6,984,754 4,118,079 Tangible book value per share $12.96 $12.90 $16.60 Tangible common equity to tangible assets 6.79% 6.59% 7.20% Nonperforming assets (000's) Non-accrual loans One- to four- family $13,186 $10,253 $5,748 Commercial real estate 8,692 7,934 2,272 Consumer loans 2,788 2,203 1,167 Commercial business loans 2,852 1,075 1,339 ----- ----- ----- Total non-accrual loans 27,518 21,465 10,526 Accruing loans past due 90 days or more 1,039 715 350 Restructured loans 100 292 105 --- --- --- Total nonperforming loans 28,657 22,472 10,981 Real estate owned 3,176 2,659 2,302 Other repossessed assets 1,499 1,865 1,483 ----- ----- ----- Total nonperforming assets $33,332 $26,996 $14,766 Asset Quality Ratios: Non-performing assets to total assets 2.41% 1.90% 1.51% Non-performing loans to total loans 2.60% 2.03% 1.37% Allowance for loan losses to non- performing loans 57.05% 69.38% 78.35% Allowance for loan losses to loans receivable 1.49% 1.41% 1.07% (1) Ratios for the three month 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.
MutualFirst Financial, Inc.
CONTACT: Tim McArdle, Senior Vice President and Treasurer of MutualFirst
Financial, Inc., +1-765-747-2818
Web Site: http://www.bankwithmutual.com/
