MutualFirst Announces Third Quarter 2009 Earnings
- Press Release
- Source: MutualFirst Financial, Inc.
- On 4:00 pm EDT, Wednesday October 21, 2009
Related Quotes
| Symbol | Price | Change |
|---|---|---|
| MFSF | 6.90 | -0.10 |
MUNCIE, Ind., Oct. 21 /PRNewswire-FirstCall/ -- MutualFirst Financial, Inc. (Nasdaq: MFSF - News), the holding company of MutualBank (the "Bank"), announced today that net income available to common shareholders for the third quarter ended September 30, 2009 was $791,000, or $.12 for basic and diluted earnings per common share. This compared to net income for the same period in 2008 of $359,000, or $.06 for basic and diluted earnings per common share. Annualized return on assets was .23% and return on average tangible common equity was 3.48% for the third quarter of 2009 compared to .11% and 1.77% respectively, for the same period last year.
Net income available to common shareholders for the nine months ended September 30, 2009 was $3.0 million, or $.44 for basic and diluted earnings per common share. This compared to net income for the comparable period in 2008 of $2.7 million, or $.58 for basic and diluted earnings per share. Annualized return on average assets was .28% and return on average tangible common equity was 4.39% for the first nine months of 2009 compared to .34% and 4.91% respectively, for the same period last year.
"The economic environment continues to present significant challenges. Despite the challenges, we continue to produce income while managing difficult issues," said David W. Heeter, President and CEO.
Assets totaled $1.4 billion at September 30, 2009, an increase from December 31, 2008 of $8.3 million, or 0.6%. Gross loans, excluding loans held for sale, decreased $44.1 million, or 3.9%. Increases in commercial loans of $4.4 million, or 1.3% were offset by decreases in consumer loans of $2.7 million, or 1.0% and residential mortgage loans held in the portfolio of $45.8 million, or 8.6%. Residential mortgage loans held for sale increased $1.1 million and mortgage loans sold during the first nine months of 2009 totaled $142.9 million compared to $86.6 million sold in the first nine months of last year. Mortgage loan originations for the nine months ended September 30, 2009 were approximately $190 million, a 92% increase over the same time period in 2008. Despite the increased originations, mortgage loan sales have led to a decrease in loan balances. Increases in investment securities available for sale of $40.0 million, or 51.8% primarily due to investments in highly rated municipal, corporate and mortgage-backed securities and cash and cash equivalents of $14.7 million helped offset the decreases in the loan portfolio.
Allowance for loan losses was $16.6 million at September 30, 2009, an increase of $1.5 million from December 31, 2008. Net charge offs for the quarter ended September 30, 2009 were $1.4 million, or .50% of average loans on an annualized basis compared to $253,000, or .09% of average loans for the comparable period in 2008. Net charge offs for the first nine months of 2009 were $3.3 million, or .40% of average loans on an annualized basis compared to $1.3 million, or .20% of average loans for the comparable period in 2008. On a linked quarter basis net charge offs increased from an annualized .36% of average loans for the quarter ended June 30, 2009 to .50% for the current quarter. The allowance for loan losses as a percentage of non-performing loans and total loans was 50.68% and 1.53%, respectively at September 30, 2009 compared to 57.05% and 1.49%, respectively at June 30, 2009. Heeter commented, "Our allowance for loan losses continues to increase despite having to navigate through the current credit environment."
Total deposits were $1.0 billion at September 30, 2009 an increase of $68.9 million, or 7.2% from December 31, 2008. This increase was due primarily to increases in certificates of deposit of $65.4 million and transactional deposits of $3.5 million. Total borrowings decreased $59.6 million to $219.5 million at September 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 $130.9 million at September 30, 2009, an increase of $422,000, or 0.3% from December 31, 2008. The increase was due primarily to net income of $4.4 million and Employee Stock Ownership Plan (ESOP) shares earned of $163,000. These increases were partially offset by decreases in accumulated other comprehensive income of $537,000 from a loss of $2.0 million at December 31, 2008 to a loss of $2.6 million at September 30, 2009 due to increased discount rates used to price trust preferred securities in an inactive market. Other decreases include dividend payments of $2.5 million to common shareholders and $1.0 million to preferred shareholders. 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 $407,000 from $9.8 million for the three months ended September 30, 2008 to $10.2 million for the three months ended September 30, 2009. The primary reason for the increase was an increase in average earning assets of $86.9 million due to the acquisition of MFB Corp in the third quarter of 2008. This increase was partially offset by a decrease in net interest margin of 10 basis points to 3.21% in the third quarter 2009 compared to 3.31% for the third quarter 2008.
Net interest income before the provision for loan losses increased $8.0 million from $23.0 million for the nine months ended September 30, 2008 to $30.9 million for the nine months ended September 30, 2009. As mentioned above, the primary reason for the increase was an increase in average earning assets of $307.7 million due to the acquisition of MFB Corp in the third quarter of 2008. In addition, net interest margin increased 7 basis points to 3.22% for the nine months ended September 30, 2009 compared to 3.15% for the comparable period in 2008.
The provision for loan losses for the third quarter of 2009 was $1.7 million, an increase from $738,000 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 delinquencies over the comparable period in 2008. Non-performing loans to total loans at September 30, 2009 were 3.02% compared to 2.60% at June 30, 2009. This increase in non-performing loans was primarily due to an increased level of non-performing residential property loans. Non-performing assets to total assets were 2.74% at September 30, 2009 compared to 2.41% at June 30, 2009.
The provision for loan losses for the first nine months of 2009 was $4.9 million, an increase from $2.6 million for last year's comparable period. This increase was due primarily to the above mentioned reasons.
Non-interest income increased $2.5 million to $3.6 million for the three months ended September 30, 2009 compared to the same period in 2008. The increase was primarily due to an increase in gain on sale of investments of $2.8 million due to an impairment charge on securities taken in the third quarter of 2008 with no similar impairment charges taken in the current period. Other increases in the quarter included increases in service fees on transaction accounts of $141,000, increases in commission income of $119,000 and increases in cash surrender value of life insurance of $28,000. Most of these other increases are due to the acquisition of MFB Corp which occurred in the third quarter of 2008. These increases were partially offset by a decrease in gains on sales and servicing of loans sold of $530,000 and a decrease in other income of $19,000.
For the nine month period ended September 30, 2009 non-interest income increased $6.0 to $11.4 million compared to $5.3 million for the same period in 2008. The reasons for the increases are primarily due to the acquisition of MFB Corp in the third quarter 2008 and the impairment charge taken in the third quarter of 2008.
Non-interest expense increased $813,000 to $10.9 million for the three months ended September 30, 2009 compared to $10.1 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 $545,000 which was primarily due to commissions paid for mortgage origination. Other increases included increases in occupancy and equipment expense of $171,000, increases in data processing of $29,000, increases in deposit insurance of $222,000, increases in software subscriptions and maintenance of $68,000 and increases in intangible amortization of $84,000. Most of the increases are due to the acquisition of MFB Corp which occurred in the third quarter of 2008. These increases were partially offset by decreases in professional fees of $71,000, decreases in marketing expense of $36,000 and decreases in other expenses of $199,000.
For the nine month period ended September 30, 2009 non-interest expense increased $9.1 million to $32.6 million compared to $23.5 million for the same period in 2008. The reasons for the increase are due to the acquisition of MFB Corp in the third quarter of 2008.
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.
Selected Financial Condition Data (Unaudited):
September 30, December 31,
2009 2008
------------ -----------
(000) (000)
Total Assets $1,397,154 $1,388,827
Cash and cash equivalents 54,406 39,703
Loans held for sale 2,658 1,541
Loans receivable, net 1,067,515 1,113,132
Investment securities held to maturity 9,011 9,676
Investment securities available for sale,
at fair value 117,290 77,255
Total deposits 1,031,429 962,514
Total borrowings 219,488 279,104
Total stockholders' equity 130,937 130,515
Selected Operations Data (Unaudited):
Three Three Three Nine Nine
Months Months Months Months Months
Ended Ended Ended Ended Ended
September June September September September
30, 30, 30, 30, 30,
2009 2009 2008 2009 2008
---------- ---------- ---------- ---------- ----------
(000) (000) (000) (000) (000)
Total interest
income $17,682 $18,136 $18,825 $54,474 $46,071
Total interest
expense 7,439 7,824 8,989 23,527 23,075
----- ----- ----- ------ ------
Net interest
income 10,243 10,312 9,836 30,947 22,996
Provision
for loan
losses 1,650 1,750 912 4,850 2,257
----- ----- --- ----- -----
Net interest
income after
provision
for loan
losses 8,593 8,562 8,924 26,097 20,739
----- ----- ----- ------ ------
Non-interest income
---------------------
Fees and
service
charges 1,956 1,877 1,815 5,522 4,340
Net gain
(loss) on
sale of
investments 60 358 (2,770) 219 (2,633)
Equity in
losses of
limited
partnerships (78) (78) (45) (233) (92)
Commissions 710 860 591 2,198 1,190
Net gain
(loss) on
loan sales 582 678 1,112 2,364 1,479
Increase
in cash
surrender
value of
life
insurance 385 413 357 1,183 909
Other income 33 38 52 121 148
-- -- -- --- ---
Total
non-interest
income 3,648 4,146 1,112 11,374 5,341
----- ----- ----- ------ -----
Non-interest
expense
------------
Salaries and
benefits 5,823 5,688 5,278 16,970 12,988
Occupancy and
equipment 1,424 1,344 1,253 4,195 3,250
Data processing
fees 388 361 359 1,103 869
Professional
fees 310 327 381 972 821
Marketing 408 362 444 1,133 991
Deposit
insurance 416 1,045 194 1,849 306
Software
subscriptions
and maintenance 367 345 299 1,045 635
Intangible
amortization 372 397 288 1,166 402
Other expenses 1,439 1,441 1,639 4,196 3,246
----- ----- ----- ----- -----
Total non-
interest
expense 10,947 11,310 10,135 32,629 23,508
------ ------ ------ ------ ------
Income
before taxes 1,294 1,398 (99) 4,842 2,572
Income tax
provision 52 83 (458) 489 (176)
-- -- ---- --- ----
Net income 1,242 1,315 359 4,353 2,748
Preferred
stock
dividends and
amortization 451 451 1,353
--- --- -----
Net income
available
to common
shareholders $791 $864 $359 $3,000 $2,748
==== ==== ==== ====== ======
Average Balances, Net Interest Income, Yield Earned and Rates Paid
Three Three
mos ended mos ended
9/30/2009 9/30/2008
--------- ---------
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 $31,855 $8 0.10% $13,985 $44 1.26%
Mortgage-
backed
securities:
Available-
for-sale 85,677 872 4.07 36,964 512 5.54
Held-to-
maturity 9,255 141 6.09 3,643 127 13.94
Investment
securities:
Available-
for-sale 26,975 385 5.71 29,535 295 4.00
Loans
receivable 1,104,330 16,184 5.86 1,089,002 17,603 6.47
Stock in
FHLB of
Indianapolis 18,632 92 1.98 16,723 244 5.84
------ -- ---- ------ --- ----
Total interest-
earning
assets (3) 1,276,724 17,682 5.54 1,189,852 18,825 6.33
Non-interest
earning
assets, net
of allowance
for loan
losses and
unrealized
gain/loss 126,134 140,950
------- -------
Total
assets $1,402,858 $1,330,802
========== ==========
Interest-
Bearing
Liabilities:
Demand and
NOW
accounts $168,341 210 0.50 $159,891 433 1.08
Savings
deposits 85,941 64 0.30 75,793 71 0.37
Money market
accounts 46,852 140 1.20 43,906 226 2.06
Certificate
accounts 636,664 4,674 2.94 547,817 5,159 3.77
------- ----- ---- ------- ----- ----
Total
Deposits 937,798 5,088 2.17 827,407 5,889 2.85
Borrowings 220,433 2,351 4.27 280,693 3,101 4.42
------- ----- ---- ------- ----- ----
Total
interest-
bearing
accounts 1,158,231 7,439 2.57 1,108,100 8,990 3.25
Non-interest
bearing
deposit
accounts 95,128 89,338
Other
liabilities 19,754 21,887
------ ------
Total
Liabili-
ties 1,273,113 1,219,325
Stockholders'
equity 129,745 111,477
------- -------
Total
Liabili-
ties
and
stock-
holders'
equity $1,402,858 $1,330,802
========== ==========
Net earning
assets $118,493 $81,752
======== =======
Net interest
income $10,243 $9,835
======= ======
Net interest rate
spread 2.97% 3.08%
==== ====
Net yield on
average interest-
earning assets 3.21% 3.31%
==== ====
Average interest-
earning
assets to
average
interest-bearing
liabilities 110.23% 107.38%
====== ======
Selected Financial Ratios and Other Financial Data (Unaudited):
Three Three Three Nine Nine
Months Months Months Months Months
Ended Ended Ended Ended Ended
September June September September September
30, 30, 30, 30, 30,
2009 2009 2008 2009 2008
---------- ---------- ---------- ---------- ----------
Share and per
share data:
Average common
shares
outstanding
Basic 6,845,697 6,837,751 6,188,036 6,836,345 4,723,430
Diluted 6,846,025 6,837,751 6,204,883 6,836,455 4,729,045
Per common
share:
Basic
earnings $0.12 $0.13 $0.06 $0.44 $0.58
Diluted
earnings $0.12 $0.13 $0.06 $0.44 $0.58
Dividends $0.12 $0.12 $0.16 $0.36 $0.48
Dividend payout
ratio 100.00% 92.31% 266.67% 81.82% 82.76%
Performance
Ratios:
Return on
average
assets
(ratio of
net income
to average
total assets)
(1) 0.23% 0.25% 0.11% 0.28% 0.34%
Return on
average
tangible
common equity
(ratio of net
income to
average
tangible
common
equity)(1) 3.48% 3.82% 1.77% 4.39% 4.91%
Interest rate
spread
information:
Average during
the period(1) 2.97% 2.96% 3.08% 2.97% 2.91%
Net interest
margin(1)(2) 3.21% 3.21% 3.31% 3.22% 3.15%
Efficiency
Ratio 78.81% 78.23% 92.57% 77.10% 82.96%
Ratio of
average
interest-
earning
assets to
average
interest-
bearing
liabilities 110.23% 110.24% 107.38% 110.09% 107.53%
Allowance for
loan losses:
Balance
Begin-
ning of
period $16,348 $15,590 $8,604 $15,107 $8,352
Charge
offs:
One- to
four-
family 218 431 226 749 341
Multi-
family 0 0 0 0 0
Commercial
Real
estate 585 172 140 1,122 324
Construc-
tion or
development 0 0 0 0 0
Consumer
loans 779 721 462 2,160 1,551
Commercial
business
loans 0 26 0 83 30
- -- - -- --
Sub-
total 1,582 1,350 828 4,114 2,246
Recoveries:
One- to
four-
family 0 17 5 94 42
Multi-
family 0 0 0 0 0
Commercial
real
estate 35 143 314 178 314
Construc-
tion or
development 0 0 0 0 0
Consumer
loans 169 198 256 503 487
Commercial
business
loans 0 0 0 2 57
- - - - --
Sub-
total 204 358 575 777 900
Net charge offs 1,378 992 253 3,337 1,346
Acquired with
MFB Financial
acquisition 2,954 2,954
Additions charged
to operations 1,650 1,750 912 4,850 2,257
----- ----- --- ----- -----
Balance end
of period $16,620 $16,348 $12,217 $16,620 $12,217
======= ======= ======= ======= =======
Net loan
charge-offs
to average
loans (1) 0.50% 0.36% 0.09% 0.40% 0.20%
September 30, June 30, September 30,
2009 2009 2008
---- ---- ----
Total shares outstanding 6,984,754 6,984,754 6,994,754
Tangible book value
per share $13.22 $12.96 $12.47
Tangible common equity to
tangible assets 6.85% 6.79% 6.40%
Nonperforming assets (000's)
Non-accrual loans
One- to four- family $16,100 $13,186 $6,413
Commercial real estate 9,269 8,692 4,987
Consumer loans 3,501 2,788 1,502
Commercial business
loans 2,192 2,852 4,350
----- ----- -----
Total non-accrual
loans 31,062 27,518 17,252
Accruing loans past due
90 days or more 1,266 1,039 1,138
Restructured loans 463 100 103
--- --- ---
Total
nonperforming
loans 32,791 28,657 18,493
Real estate owned 4,095 3,176 2,818
Other repossessed assets 1,440 1,499 1,671
----- ----- -----
Total
nonperforming
assets $38,326 $33,332 $22,982
Asset Quality Ratios:
Non-performing assets
to total assets 2.74% 2.41% 1.64%
Non-performing loans to
total loans 3.02% 2.60% 1.63%
Allowance for loan losses
to non-performing loans 50.68% 57.05% 66.06%
Allowance for loan losses
to loans receivable 1.53% 1.49% 1.08%
(1) Ratios for the three month and nine 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.
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