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MutualFirst Financial Announces Record Earnings for 2018

MUNCIE, Ind., Jan. 30, 2019 /PRNewswire/ -- MutualFirst Financial, Inc. (MFSF), the holding company of MutualBank (the "Bank"), announced today net income available to common shareholders was $5.3 million, or $0.61 diluted earnings per common share for the quarter ended December 31, 2018.  This compared to net income available to common shareholders for the same period in 2017 of $1.5 million, or $0.19 diluted earnings per common share. Annualized return on average assets was 1.04% and return on average tangible common equity was 12.56% for the fourth quarter of 2018 compared to 0.37% and 3.89%, respectively, for the same period of last year.  In the fourth quarter of 2017, MFSF recorded an additional tax expense of $2.0 million due to a revaluation of MFSF's deferred tax asset.

Adjusted net income to common shareholders, excluding $1.9 million of one-time merger related expenses, net of tax, was $20.8 million, or $2.43 diluted earnings per common share for year ended 2018. This compared to net income available to common shareholders of $12.3 million, or $1.64 diluted earnings per common share for the year ended December 31, 2017.  Return on average assets would have been 1.07% and return on average tangible common equity would have been 12.85% for the year ended 2018 compared to 0.78% and 8.52%, respectively, for last year.

Including the one-time merger related expenses, net income available to common shareholders was $18.9 million, or $2.21 diluted earnings per common share for the year ended December 31, 2018.  Annualized return on average assets was 0.97% and return on tangible common equity was 11.66% for the year ended 2018.

On February 28, 2018, MutualFirst Financial, Inc. closed its acquisition of Universal Bancorp and merged Universal's wholly owned subsidiary, BloomBank, into MutualFirst Financial's wholly owned subsidiary, MutualBank.  At closing, this acquisition increased total assets by approximately $398 million, total investments by $88 million, net loans by $253 million and total deposits by $315 million.  As a result of the acquisition, initial goodwill generated was $21 million and the core deposit intangible was $4.5 million.  On April 23, 2018, the system conversion was completed to merge all of the BloomBank customers into MutualBank's system.

"2018 was an exciting and successful year for MutualFirst Financial," said David W. Heeter, CEO. "The successful acquisition and integration of Universal has provided an accretion in earnings and an increase in shareholder value."

Balance Sheet

Assets increased $460 million as of December 31, 2018 compared to December 31, 2017, primarily due to the acquisition of Universal.  The gross loan portfolio increased by $316 million primarily due to acquiring the $253 million net loan portfolio of Universal in the first quarter of 2018.  Non-residential consumer loans have been the primary source of organic loan growth increasing by $69 million, or 35%, in 2018. As of December 31, 2018, the loan mix is 46.0% commercial, 36.2% residential loans and 17.8% non-residential consumer loans compared to 40.3%, 43.3% and 16.4%, respectively as of December 31, 2017.

Deposits increased by $317 million in 2018 primarily due to an increase of $315 million from the acquisition of Universal.  As of December 31, 2018, core deposits totaled $1.0 billion, or 67.8% of total deposits and certificates of deposit totaled $488 million, or 32.2% of total deposits.  This is compared to a mix of core deposits of 69.1% and certificates of deposit of 30.9% as of December 31, 2017.

Allowance for loan losses increased to $13.3 million as of December 31, 2018 compared to $12.4 million as of December 31, 2017.  The allowance for loan losses to non-performing loans as of December 31, 2018 was 146% compared to 236% as of December 31, 2017.  The allowance for loan losses to total loans as of December 31, 2018 was 0.89% compared to 1.05% as of December 31, 2017.  The decrease is a result of loans obtained in the Universal acquisition with an original credit mark of $4.0 million which is not included in the allowance for loan losses. Non-performing loans to total loans at December 31, 2018 were 0.61% compared to 0.44% at December 31, 2017.  Non-performing assets to total assets were 0.54% at December 31, 2018 compared to 0.38% at December 31, 2017. The increase in non-performing loans was primarily due to one loan in the amount of $3.2 million, that went non-performing at year end, but was back to performing in early January.

Stockholders' equity was $202.4 million at December 31, 2018, an increase of $52.1 million from December 31, 2017. The increase was primarily due to $42.3 million of capital issued as part of the acquisition of Universal and net income available to common shareholders of $18.9 million during the year ended December 31, 2018.  These increases were partially offset by a decrease in accumulated other comprehensive income of $3.0 million and common stock dividends of $6.4 million for the year ended December 31, 2018.  The Company's tangible book value per common share as of December 31, 2018 was $20.51 compared to $20.08 as of December 31, 2017 and the tangible common equity ratio decreased to 8.72% as of December 31, 2018 compared to 9.35% as of December 31, 2017.  MFSF's and the Bank's risk-based capital ratios remained in excess of "well-capitalized" levels as defined by all regulatory standards as of December 31, 2018.

Mr. Heeter added, "We are continuing to remix our balance sheet, which is important to continue our performance momentum." 

Income Statement

Net interest income before the provision for loan losses increased $6.4 million for the quarter ended December 31, 2018 compared to the same period in 2017.  The increase in net interest income was primarily a result of an increase of $409 million in average interest earning assets, due to the acquisition in the first quarter of 2018 and organic loan growth.  This increase was aided by an increase of twenty basis points in net interest margin to 3.47%, while the tax equivalent margin increased sixteen basis points.  Net interest margin was also aided by approximately nine basis points of purchase accounting adjustments in the quarter from acquired loan prepayments and paydowns.  On a linked quarter basis, net interest income before the provision for loan losses decreased $77,000 as net interest margin decreased by three basis points partially offset by average interest earning assets increasing by $20.1 million, primarily due to increases in the average loan portfolio and average investment portfolio. 

Net interest income before the provision for loan losses increased $14.8 million in 2018 compared to 2017.  The increase was a result of an increase of $342 million in average interest earning assets due to the acquisition in the first quarter of 2018 and organic loan growth.  This increase was aided by the net interest margin increasing to 3.47% in 2018 compared to 3.27% in 2017, while the tax equivalent net interest margin increased to 3.55% in 2018 compared to 3.38% in 2017.  Net interest margin was also aided in 2018 by approximately eight basis points of purchase accounting adjustments from acquired loan prepayments and paydowns.  

Provision for loan losses in the fourth quarter of 2018 was $600,000 compared to $350,000 during last year's comparable period.  The increase was due to management's ongoing evaluation of the adequacy of the allowance for loan losses and was primarily attributable to an increasing loan portfolio. Net charge offs totaled $328,000, or 0.09% of total average loans on an annualized basis, in the fourth quarter of 2018 compared to net charge offs of $341,000, or 0.11% of total average loans on an annualized basis, in the fourth quarter of 2017.   

The provision for loan losses for 2018 was $2.1 million compared to $1.2 million during 2017.  The increase was primarily due to our growing loan portfolio.  Net charge-offs for 2018 equaled $1.2 million, or 0.09% of total average loans compared to $1.2 million, or 0.10% of total average loans in 2017.

Non-interest income for the fourth quarter of 2018 was $5.3 million, an increase of $449,000 compared to the fourth quarter of 2017.  Increases in non-interest income included an increase of $571,000 in service charges on deposit accounts primarily due to increases in interchange income along with increases due to the acquisition and an increase of $206,000 in other income due to a gain on the sale of a low-income housing property.  These increases were partially offset by a decrease of $260,000 on gain on sale of loans primarily due to selling $18.5 million of portfolio mortgage loans in the fourth quarter of 2017, which was not repeated in 2018, a decrease of $139,000 in commission income and a decrease of $117,000 on gain on sale of investments. On a linked quarter basis, non-interest income increased $258,000 due to an increase of $366,000 in service charges on deposit accounts and an increase of $119,000 in other income.  These increases were partially offset by a decline of $268,000 in gain on sale of investments.

Non-interest income for the year ended December 31, 2018 was $19.6 million, an increase of $1.5 million compared to year ended 2017.  The reasons for the increase include a $1.4 million improvement in service fee income on deposit accounts for the reasons mentioned above and a $567,000 improvement in other income primarily due to a death benefit received on life insurance in the first quarter of 2018 along with the sale of a low-income housing property in the fourth quarter.  These increases were partially offset by a decline of $761,000 in net gain on sale of mortgage loans primarily due to fewer mortgage loans being sold in 2018 compared to 2017.

Non-interest expense increased $3.1 million when comparing the fourth quarter of 2018 with the same period in 2017.  The increase was primarily due to the acquisition and integration of Universal.  One-time pretax merger-related expenses, primarily in compensation and other expenses, were $79,000 in the fourth quarter of 2018.  On a linked quarter basis, non-interest expense increased $445,000 primarily due to an increase of $743,000 in compensation and benefit expenses due to an increase of $511,000 in health insurance due to an increase in claims paid.

Non-interest expense increased $12.7 million when comparing the full year of 2018 with 2017.  The increase was directly related to the acquisition and integration of Universal into MutualFirst in 2018.  One-time pretax merger-related expenses were $2.4 million in 2018.

The effective tax rate for the fourth quarter of 2018 was 14.3% compared to 69.3% in the same quarter of 2017. The primary reason for the decline was the reduction of the corporate tax rate to 21% and the one-time deferred tax revaluation as of December 2017 that was not repeated in 2018. 

The effective tax rate for the full year of 2018 was 13.6% compared to 35.6% for 2017. The primary reason for the decline was the reduction of the corporate tax rate to 21% and the one-time deferred tax revaluation as of December 2017 that was not repeated in 2018. 

Mr. Heeter concluded, "2018 was the fourth year of our five-year strategic plan.  We have been successful in the execution of that plan.  Now that the acquisition has been completed, our plan will be to recast the strategic plan over the next four years and build upon the momentum that has been created to enhance shareholder value."

MutualFirst Financial, Inc. is the parent company of MutualBank, an Indiana-based financial institution since 1889. MutualBank has thirty-nine full-service retail financial centers throughout Indiana. MutualBank has two offices located in Fishers and Crawfordsville, Indiana specializing in wealth management and trust services and a loan origination office in New Buffalo, Michigan. MutualBank also operates a wholly owned subsidiary named Summit Mortgage which operates out of Fort Wayne, Indiana. MutualBank provides a full range of financial services including commercial and business banking, personal banking, wealth management, trust services, investments and internet banking services. The Company's stock is traded on the NASDAQ National Market under the symbol "MFSF". Additional information can be found online 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 Litigation 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 Financials












(Audited)





December 31,

September 30,

December 31,




Balance Sheet (Unaudited):

2018

2018

2017





(000)

(000)

(000)




Assets







Cash and cash equivalents

$            33,414

$         31,872

$        27,341




Interest-bearing time deposits

4,239

4,236

1,853




Investment securities - AFS

370,875

360,747

277,378




Loans held for sale

3,987

7,434

4,577




Loans, gross

1,495,943

1,474,383

1,180,145




Allowance for loan losses

(13,281)

(13,009)

(12,387)




Net loans

1,482,662

1,461,374

1,167,758




Premises and equipment, net

25,641

25,628

21,539




FHLB of Indianapolis stock

13,034

12,820

11,183




Deferred tax asset, net

10,831

12,151

7,530




Cash value of life insurance

60,160

59,845

52,707




Other real estate owned and repossessed assets

2,013

1,530

733




Goodwill

22,310

22,479

1,800




Core deposit and other intangibles

3,569

3,818

127




Other assets

16,578

17,237

14,406




Total assets

$       2,049,313

$     2,021,171

$    1,588,932











Liabilities and Stockholders' Equity







Deposits

$       1,519,225

$     1,531,198

$    1,202,034




FHLB advances

292,497

261,150

217,163




Other borrowings

17,988

17,963

4,232




Other liabilities

17,240

17,150

15,221




Stockholders' equity

202,363

193,710

150,282




Total liabilities and stockholders' equity

$       2,049,313

$     2,021,171

$    1,588,932
























(Audited)


Three Months

Three Months

Three Months


Twelve Months

Twelve Months


Ended

Ended

Ended


Ended

Ended


December 31, 

September 30,

December 31,


December 31,

December 31,

Income Statement (Unaudited):

2018

2018

2017


2018

2017


(000)

(000)

(000)


(000)

(000)








Total interest and dividend income

$            21,489

$         20,836

$        15,081


$         79,694

$         58,868

Total interest expense

4,995

4,419

2,888


16,591

10,611








   Net interest income

16,494

16,417

12,193


63,103

48,257

Provision for loan losses

600

570

350


2,120

1,220

Net interest income after provision 







  for loan losses

15,894

15,847

11,843


60,983

47,037








  Non-interest income







Service fee income

2,390

2,024

1,819


7,937

6,584

Net realized gain on sales of AFS securities

138

406

255


804

708

Commissions

1,114

1,121

1,253


4,865

5,027

Net gain on sale of loans

902

853

1,162


3,126

3,887

Net servicing fees

158

129

85


591

391

Increase in cash value of life insurance

315

313

278


1,239

1,113

Net gain (loss) on sale of other real estate and repossessed assets

(9)

23

(87)


(43)

(122)

Other income

288

170

83


1,055

488

Total non-interest income

5,296

5,039

4,848


19,574

18,076








  Non-interest expense







Salaries and employee benefits

8,895

8,152

7,098


32,964

27,229

Net occupancy expenses

986

1,087

773


3,965

3,133

Equipment expenses

625

635

466


2,514

1,773

Data processing fees

686

669

622


2,624

2,321

Advertising and promotion

331

416

318


1,606

1,223

ATM and debit card expense

582

664

392


2,290

1,676

Deposit insurance

207

209

162


898

724

Professional fees

463

460

680


2,177

1,855

Software subscriptions and maintenance

732

702

541


2,719

2,202

Other real estate and repossessed assets

49

51

45


189

165

Intangible amortization

249

316

44


1,103

264

Other expenses

1,214

1,213

796


5,684

3,440

Total non-interest expense

15,019

14,574

11,937


58,733

46,005








Income before income taxes

6,171

6,312

4,754


21,824

19,108

Income tax provision

881

910

3,294


2,960

6,793

Net income available to common shareholders

$              5,290

$           5,402

$          1,460


$         18,864

$         12,315








Pre-tax pre-provision earnings (1)

$              6,771

$           6,882

$          5,104


$         23,944

$         20,328








Average Balances,  Net Interest Income, Yield Earned and Rates Paid









Three



Three




months ended



months ended




12/31/2018



12/31/2017



Average

Interest

Average

Average

Interest

Average


Outstanding

Earned/

Yield/

Outstanding

Earned/

Yield/


Balance

Paid

Rate

Balance

Paid

Rate


(000)

(000)

(annualized)

(000)

(000)

(annualized)

Interest-earning Assets:







 Interest -bearing deposits

$22,735

$63

1.11%

$22,296

$41

0.74%

 Mortgage-backed securities:







Available-for-sale

216,947

1,511

2.79

153,355

921

2.40

 Investment securities:







Available-for-sale

154,735

1,261

3.26

105,392

880

3.34

 Loans receivable

1,491,709

18,509

4.96

1,197,370

13,119

4.38

Stock in FHLB of Indianapolis

12,823

145

4.52

11,183

120

4.29

Total interest-earning assets (2)

1,898,949

21,489

4.53

1,489,596

15,081

4.05

Non-interest earning assets, net of allowance 







  for loan losses and unrealized gain/loss

129,974



97,864



     Total assets

$2,028,923



$1,587,460

















Interest-Bearing Liabilities:







 Demand and NOW accounts

$393,365

779

0.79

$324,990

395

0.49

 Savings deposits

184,447

5

0.01

139,042

4

0.01

 Money market accounts

183,947

303

0.66

174,161

215

0.49

 Certificate accounts

488,484

2,231

1.83

372,816

1,297

1.39

 Total deposits

1,250,243

3,318

1.06

1,011,009

1,911

0.76

 Borrowings

281,026

1,677

2.39

215,586

977

1.81

  Total interest-bearing liabilities

1,531,269

4,995

1.30

1,226,595

2,888

0.94

Non-interest bearing deposit accounts

284,837



194,563



Other liabilities

18,196



14,374



  Total liabilities

1,834,302



1,435,532



Stockholders' equity

194,621



151,928



    Total liabilities and stockholders' equity

$2,028,923



$1,587,460










Net interest earning assets

$367,680



$263,001










Net interest income


$16,494



$12,193









Net interest rate spread (4)



3.22%



3.11%








Net yield on average interest-earning assets (4)



3.47%



3.27%








Net yield on average interest-earning assets, tax equivalent (3)(4)



3.55%



3.39%








Average interest-earning assets to







  average interest-bearing liabilities



124.01%



121.44%

















Twelve



Twelve




months ended



months ended




12/31/2018



12/31/2017



Average

Interest

Average

Average

Interest

Average


Outstanding

Earned/

Yield/

Outstanding

Earned/

Yield/


Balance

Paid

Rate

Balance

Paid

Rate


(000)

(000)

(annualized)

(000)

(000)

(annualized)

Interest-earning Assets:







 Interest -bearing deposits

$22,927

$250

1.09%

$21,465

$130

0.61%

 Mortgage-backed securities:







Available-for-sale

203,891

5,513

2.70

156,887

3,814

2.43

 Investment securities:







Available-for-sale

149,535

4,850

3.24

98,493

3,223

3.27

 Loans receivable

1,427,436

68,475

4.80

1,185,956

51,231

4.32

Stock in FHLB of Indianapolis

12,557

606

4.83

11,167

470

4.21

Total interest-earning assets (2)

1,816,346

79,694

4.39

1,473,968

58,868

3.99

Non-interest earning assets, net of allowance 







  for loan losses and unrealized gain/loss

127,142



97,768



     Total assets

$1,943,488



$1,571,736

















Interest-Bearing Liabilities:







 Demand and NOW accounts

$385,681

2,462

0.64

$307,395

1,242

0.40

 Savings deposits

180,065

20

0.01

139,335

15

0.01

 Money market accounts

191,433

1,027

0.54

172,163

645

0.37

 Certificate accounts

455,431

7,347

1.61

382,134

4,913

1.29

 Total deposits

1,212,610

10,856

0.90

1,001,027

6,815

0.68

 Borrowings

260,994

5,735

2.20

220,648

3,796

1.72

  Total interest-bearing liabilities

1,473,604

16,591

1.13

1,221,675

10,611

0.87

Non-interest bearing deposit accounts

267,812



188,203



Other liabilities

17,315



15,282



  Total liabilities

1,758,731



1,425,160



Stockholders' equity

184,757



146,576



    Total liabilities and stockholders' equity

$1,943,488



$1,571,736










Net interest earning assets

$342,742



$252,293










Net interest income


$63,103



$48,257









Net interest rate spread (4)



3.26%



3.13%








Net yield on average interest-earning assets (4)



3.47%



3.27%








Net yield on average interest-earning assets, tax equivalent (3)(4)



3.55%



3.38%








Average interest-earning assets to







  average interest-bearing liabilities



123.26%



120.65%
















Three Months

Three Months

Three Months


Twelve Months

Twelve Months


Ended

Ended

Ended


Ended

Ended


December 31,

September 30,

December 31,


December 31,

December 31,

  Selected Financial Ratios and Other Financial Data (Unaudited):

2018

2018

2017


2018

2017






















Share and per share data:







 Average common shares outstanding:







   Basic

8,590,729

8,587,424

7,389,394


8,394,195

7,360,066

   Diluted

8,732,290

8,733,691

7,526,416


8,543,544

7,502,059

 Per common share:







   Basic earnings

$               0.62

$             0.63

$            0.20


$             2.25

$             1.67

   Diluted earnings 

$               0.61

$             0.62

$            0.19


$             2.21

$             1.64

   Dividends

$               0.20

$             0.18

$            0.18


$             0.74

$             0.66








Dividend payout ratio

32.79%

29.03%

94.74%


33.48%

40.24%








Performance Ratios:







   Return on average assets (ratio of net







      income to average total assets)(4)

1.04%

1.07%

0.37%


0.97%

0.78%

   Return on average tangible common equity (ratio of net 







      income to average tangible common equity)(4)

12.56%

12.92%

3.89%


11.66%

8.52%

   Interest rate spread information:







    Average during the period(4)

3.22%

3.27%

3.11%


3.26%

3.13%








    Net interest margin(4)(5)

3.47%

3.50%

3.27%


3.47%

3.27%








Efficiency Ratio

68.93%

67.93%

70.05%


71.04%

69.35%








    Ratio of average interest-earning







     assets to average interest-bearing







     liabilities

124.01%

123.45%

121.44%


123.26%

120.65%








Allowance for loan losses:







       Balance beginning of period

$            13,009

$         12,729

$        12,378


$         12,387

$         12,382

        Net charge-offs (recoveries):







Real Estate:







Commercial

40

0

0


93

(1)

Commercial construction and development

0

0

0


0

0

Consumer closed end first mortgage

23

65

24


156

271

Consumer open end and junior liens

0

16

0


36

21

Total real estate loans

63

81

24


285

291

Other loans:







Auto

5

47

5


41

32

Boat/RV

212

65

208


593

603

Other

48

72

37


208

151

Commercial and industrial

0

25

67


99

138

Total other

265

209

317


941

924








Net charge-offs (recoveries)

328

290

341


1,226

1,215

Provision for loan losses

600

570

350


2,120

1,220

Balance end of period

$            13,281

$         13,009

$        12,387


$         13,281

$         12,387








    Net loan charge-offs to average loans (4)

0.09%

0.08%

0.11%


0.09%

0.10%























December 31,

September 30,

December 31,





2018

2018

2017











Total shares outstanding

8,603,462

8,587,424

7,389,394




Tangible book value per common share

$              20.51

$           19.50

$          20.08




Tangible common equity to tangible assets

8.72%

8.39%

9.35%











 Nonperforming assets (000's)







Non-accrual loans







Real Estate:







Commercial

$              4,782

$           1,759

$          1,107




Commercial construction and development

62

52

-




Consumer closed end first mortgage

2,777

2,503

3,409




Consumer open end and junior liens

273

205

309




Total real estate loans

7,894

4,519

4,825




Other loans:







Auto

88

40

22




Boat/RV

470

696

198




Other

46

48

16




Commercial and industrial

91

416

159




Total other

695

1,200

395




Total non-accrual loans

8,589

5,719

5,220




Accruing loans past due 90 days or more

517

0

31




Total nonperforming loans

9,106

5,719

5,251




    Real estate owned

1,223

1,195

251




    Other repossessed assets

790

335

482




 Total nonperforming assets

$            11,119

$           7,249

$          5,984











Performing restructured loans (6)

$              2,571

$           2,148

$          1,389











Asset Quality Ratios:







Non-performing assets to total assets 

0.54%

0.36%

0.38%




Non-performing loans to total loans

0.61%

0.39%

0.44%




Allowance for loan losses to non-performing loans

146%

227%

236%




Allowance for loan losses to loans receivable

0.89%

0.88%

1.05%



















Three Months

Three Months

Three Months


Twelve Months

Twelve Months


Ended

Ended

Ended


Ended

Ended


December 31,

September 30,

December 31,


December 31,

December 31,

Non-GAAP Measurements (7)

2018

2018

2017


2018

2017








Total stockholders' equity (GAAP)

$          202,363

$       193,710

$      150,282


$       202,363

$       150,282

Less: Intangible assets

25,879

26,297

1,927


25,879

1,927

Tangible common equity (non-GAAP)

$          176,484

$       167,413

$      148,355


$       176,484

$       148,355








Total assets (GAAP)

$       2,049,313

$     2,021,171

$    1,588,932


$     2,049,313

$     1,588,932

Less: Intangible assets

25,879

26,297

1,927


25,879

1,927

Tangible assets (non-GAAP)

$       2,023,434

$     1,994,874

$    1,587,005


$     2,023,434

$     1,587,005








Tangible common equity to tangible assets (non-GAAP)

8.72%

8.39%

9.35%


8.72%

9.35%








Book value per common share (GAAP)

$              23.52

$           22.56

$          20.34


$           23.52

$           20.34

Less: Effect of intangible assets

3.01

3.06

0.26


3.01

0.26

Tangible book value per common share

$              20.51

$           19.50

$          20.08


$           20.51

$           20.08








Return on average stockholders' equity (GAAP)

10.87%

11.16%

3.84%


10.21%

8.40%

Add: Effect of intangible assets

1.69%

1.76%

0.05%


1.45%

0.12%

Return on average tangible common equity (non-GAAP)

12.56%

12.92%

3.89%


11.66%

8.52%








Total tax free interest income (GAAP)







Loans receivable

$                106

$              106

$             104


$              420

$              424

Investment securities

1,226

1,185

743


4,494

2,752

Total tax free interest income

$              1,332

$           1,291

$             847


$           4,914

$           3,176

Total tax free interest income, gross (at 21%, or 34% prior to 2018)

$              1,686

$           1,634

$          1,283


$           6,220

$           4,812








Net interest margin, tax equivalent (non-GAAP)







Net interest income (GAAP)

$            16,494

$         16,417

$        12,193


$         63,103

$         48,257

Add: Tax effect tax free interest income (3)

354

343

436


1,306

1,636

Net interest income (non-GAAP)

16,848

16,760

12,629


64,409

49,893

Divided by: Average interest-earning assets

1,898,949

1,878,841

1,489,596


1,816,346

1,473,968

Net interest margin, tax equivalent

3.55%

3.57%

3.39%


3.55%

3.38%








One-time merger related expenses







Non-tax deductible

$                   -

$                -



$              220


Tax deductible

79

238



2,158


Total one-time merger related expenses

$                  79

$              238



$           2,378


Subtract tax benefit

17

50



453


Net one-time merger related expenses

$                  62

$              188



$           1,925


Net income (GAAP)

5,290

5,402



18,864


Net income excluding one-time merger expenses (non-GAAP)

$              5,352

$           5,590



$         20,789









Adjusted diluted earnings per share







Net income excluding one-time merger expenses (non-GAAP)

$              5,352

$           5,590



$         20,789


Average diluted shares

8,732,290

8,733,691



8,543,544


Adjusted diluted earnings per share (non-GAAP)

$               0.61

$             0.64



$             2.43









Adjusted return on assets







Net income excluding one-time merger expenses (non-GAAP)

$              5,352

$           5,590



$         20,789


Average assets

2,028,923

2,012,937



1,943,488


Adjusted return on average assets (non-GAAP)

1.06%

1.11%



1.07%









Adjusted return on tangible common equity







Net income excluding one-time merger expenses (non-GAAP)

$              5,352

$           5,590



$         20,789


Average tangible common equity 

168,443

167,207



161,788


Adjusted return on average tangible common equity (non-GAAP)

12.71%

13.37%



12.85%









Ratio Summary:







Return on average equity

10.87%

11.16%

3.84%


10.21%

8.40%

Return on average tangible common equity

12.56%

12.92%

3.89%


11.66%

8.52%

Return on average assets

1.04%

1.07%

0.37%


0.97%

0.78%

Tangible common equity to tangible assets

8.72%

8.39%

9.35%


8.72%

9.35%

Net interest margin, tax equivalent

3.55%

3.57%

3.39%


3.55%

3.38%


(1)   Pre-tax pre-provision income is calculated by taking net income available to common shareholders and adding income tax provision and provision for loan losses.


(2)   Calculated net of deferred loan fees, loan discounts, loans in process and loss reserves.


(3)   Tax equivalent margin is calculated by taking non-taxable interest and grossing up by 21% applicable tax rate for 2018 and 34% applicable tax rate prior to 2018.


(4)   Ratios for the three month periods have been annualized.


(5)   Net interest income divided by average interest earning assets.


(6)   Performing restructured loans are excluded from non-performing ratios.  Restructured loans that are on non-accrual are in the non-accrual loan categories.


(7)   This earnings release and selected financials contain GAAP financial measures and non-GAAP financial measures where management believes it to be helpful in understanding MutualFirst's results of operations or financial position. This table shows non-GAAP financial measures and  the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure.

 

 

 

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