MutualFirst Financial Announces Record Earnings for 2019
MUNCIE, Ind., Jan. 31, 2020 /PRNewswire/ -- MutualFirst Financial, Inc. (NASDAQ: MFSF), the holding company of MutualBank (the "Bank"), announced today record net income available to common shareholders for the fourth quarter ended December 31, 2019 of $6.6 million, or $0.77 diluted earnings per common share. This compared to net income available to common shareholders for the same period in 2018 of $5.3 million, or $0.61 diluted earnings per common share. Net income for the fourth quarter ended December 31, 2019 represents an annualized return on average assets of 1.28% and annualized return on average tangible common equity of 13.36% compared to 1.04% and 12.56%, respectively, for the same period of last year.
Record net income available to common shareholders for the year ended 2019 was $23.8 million, or $2.74 diluted earnings per common share, compared to net income available to common shareholders of $18.9 million, or $2.21 diluted earnings per common share for the year ended 2018. Net income for the year ended 2019 represents a return on average assets of 1.15% and return on average tangible common equity of 12.60% compared to 0.97% and 11.66%, respectively, for the same period of last year.
On a Form 8-K filed on October 29, 2019, MutualFirst announced it had entered into an Agreement and Plan of Merger (the "Merger Agreement") with Northwest Bancshares, Inc. ("Northwest Bancshares"). Pursuant to the Merger Agreement at the closing of the merger, MutualFirst will merge with and into Northwest Bancshares, with Northwest Bancshares as the surviving entity. Immediately thereafter, MutualBank will merge with and into Northwest Bank, the wholly owned subsidiary of Northwest Bancshares, with Northwest Bank as the surviving entity.
Under the terms of the Merger Agreement, each share of common stock of MutualFirst will be converted into the right to receive 2.4 shares of Northwest Bancshares's common stock, for total consideration valued at approximately $346 million at announcement.
The Merger Agreement has been approved by the Boards of Directors of Northwest Bancshares and MutualFirst. Completion of the transaction is subject to customary closing conditions, including the receipt of required regulatory approvals and the approval of stockholders of MutualFirst. The parties anticipate completing the Merger during the second quarter 2020.
Adjusted net income available to common shareholders for the fourth quarter ended December 31, 2019, without one-time merger related expenses of $1.1 million pre-tax and $1.0 million after tax, was $7.6 million, or $0.88 diluted earnings per common share. Adjusted net income represents an annualized return on average assets of 1.48% and return on average tangible common equity of 15.38%. Adjusted net income available to common shareholders for the year ended 2019, without the one-time merger related expenses, was $24.8 million, or $2.85 diluted earnings per common share. Adjusted net income represents a return on average assets of 1.20% and return on average tangible common equity of 13.13%.
"We are pleased with our record performance in 2019," said David W. Heeter, CEO, "We also are very excited about joining the Northwest team. Northwest has demonstrated a similar commitment to its clients, employees and the communities it serves, shares our core values and has an outstanding record of enhancing shareholder value."
Balance Sheet
Assets increased $14.5 million as of December 31, 2019 compared to December 31, 2018 primarily due to increases in mortgage loans held for sale and investment securities. Mortgage loans held for sale increased $9.4 million compared to December 31, 2018 due to strong mortgage production as originations increased in 2019 compared to 2018. Investment securities increased $14.7 million from December 31, 2018 to December 31, 2019 primarily due to a decline in market interest rates, which increased the market value of the securities. The gross loan portfolio decreased by $5.7 million from December 31, 2018 to December 31, 2019 due to a decrease in residential mortgage loans of $47.6 million primarily as a result of a sale of $27 million of mortgages in the third quarter of 2019. This decrease was mainly offset by increases in commercial loans by $31.3 million, or 4.5%, and non-residential consumer loans by $10.6 million, or 4.0%. The loan mix is 48.3% commercial loans, 33.0% residential loans and 18.7% non-residential consumer loans as of December 31, 2019 compared to 46.0%, 36.2% and 17.8%, respectively, as of December 31, 2018.
Deposits increased by $34.3 million in 2019 due to an increase of $20.0 million in core deposits and $14.2 million in certificates of deposit. As of December 31, 2019, core deposits totaled $1.1 billion, or 67.6% of total deposits and certificates of deposit totaled $503 million, or 32.4% of total deposits compared to 67.8% and 32.2%, respectively, on December 31, 2018.
Allowance for loan losses remained constant at $13.3 million as of December 31, 2019 compared to December 31, 2018. The allowance for loan losses to non-performing loans as of December 31, 2019 was 185% compared to 146% as of December 31, 2018. The allowance for loan losses to total loans as of December 31, 2019 remained the same as December 31, 2018 at 0.89%. Non-performing loans to total loans at December 31, 2019 were 0.48% compared to 0.61% at December 31, 2018. Non-performing assets to total assets were 0.45% at December 31, 2019 compared to 0.54% at December 31, 2018.
Stockholders' equity was $226.8 million at December 31, 2019, an increase of $24.4 million from December 31, 2018. The increase was primarily due to net income available to common shareholders of $23.8 million during the year ended December 31, 2019 and an increase in accumulated other comprehensive income of $10.8 million. These increases were partially offset by common stock dividends of $6.9 million and stock repurchases of 136,471 shares at a cost of $4.3 million in 2019. The Company's tangible book value per common share as of December 31, 2019 was $23.43 compared to $20.51 as of December 31, 2018 and the tangible common equity ratio increased to 9.89% as of December 31, 2019 compared to 8.72% as of December 31, 2018. 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, 2019.
Income Statement
Net interest income before the provision for loan losses decreased $528,000 for the quarter ended December 31, 2019 compared to the same period in 2018. The decrease in net interest income was primarily a result of a decrease of thirteen basis points in net interest margin from 3.47% in the fourth quarter of 2018 compared to 3.34% in the fourth quarter of 2019. Net interest margin decreased primarily due to a larger decrease in the yield on interest-earnings assets of sixteen basis points compared to a decrease of two basis points on cost of interest-bearing liabilities. This decrease was partially offset by an increase of $15.4 million in average interest-earning assets, due primarily to organic loan growth. Net interest margin was also aided in the quarter by approximately three basis points of purchase accounting adjustments in fourth quarter of 2019 compared to nine basis points in the fourth quarter of 2018. On a linked-quarter basis, net interest income decreased by $279,000 primarily due to a decrease in net interest margin of four basis points and a decline in average earning assets of $9.6 million.
Net interest income before the provision for loan losses increased $1.2 million for the year ended 2019 compared to 2018. The increase in net interest income was primarily due to an increase of $101.5 million in average interest-earning assets. This increase was partially offset by a decrease of twelve basis points in net interest margin from 3.47% for the year ended 2018 compared to 3.35% in 2019. Net interest margin decreased primarily due to an increase in the cost of interest-bearing liabilities of twenty-two basis points compared to an increase in yield on interest-earning assets of six basis points. Net interest margin was aided by purchase accounting adjustments of eight basis points for the year ended 2018 compared to four basis points for 2019.
Provision for loan losses in the fourth quarter of 2019 was $575,000 compared to $600,000 during last year's comparable period. The decrease was due to management's ongoing evaluation of the adequacy of the allowance for loan losses. Net charge-offs in the fourth quarter of 2019 were $679,000, or 0.18% of average total loans on an annualized basis, compared to $328,000, or 0.09% of average total loans on an annualized basis in the fourth quarter of 2018. On a linked-quarter basis, provision for loan losses increased $150,000.
The provision for loan losses in 2019 was $2.0 million compared to $2.1 million in 2018. Net charge-offs for the year ended December 31, 2019 equaled $1.9 million, or 0.13% of loans, compared to $1.2 million, or 0.09% in 2018.
Non-interest income for the fourth quarter of 2019 was $8.3 million, an increase of $3.0 million compared to the fourth quarter of 2018. This increase in non-interest income included a $1.6 million increase in other income, primarily related to the sale of Visa B shares and a death benefit received in the fourth quarter of 2019, along with an increase of $820,000 in net gain on sale of mortgage loans due to a $37.1 million, or 101%, increase in mortgage loans sold in the fourth quarter of 2019 compared to the same period in 2018. Non-interest income also increased by $542,000 in service fee income on deposit accounts due to Visa incentive payments along with changes made in the structure of our deposit accounts. On a linked-quarter basis, non-interest income increased $2.4 million primarily due to the reasons mentioned above.
Non-interest income for the year ended 2019 was $24.9 million, an increase of $5.3 million compared to the year ended 2018. Net gain on sale of mortgage loans increased $2.7 million, other income increased by $1.4 million and service fee income increased $1.0 million for the reasons described above.
Non-interest expense increased $2.5 million when comparing the fourth quarter of 2019 with the same period in 2018. Non-interest expense increased due to an increase of $1.5 million in salaries and benefits due to increased commission expense for mortgage originators, higher health insurance expense and employee benefits accelerated due to the death of an executive. Non-interest expense was also higher due to $1.1 million of merger-related expenses, primarily in professional fees and other expenses. These increases were partially offset by a reduction of $207,000 in FDIC insurance premiums due to Small Bank Assessment Credits received as a result of the FDIC's Reserve Ratio exceeding 1.38%. On a linked-quarter basis, non-interest expense increased $3.0 million for the same reasons as stated above.
Non-interest expense increased $2.4 million when comparing the year ended 2019 with the same period in 2018. Non-interest expense was impacted by general expense increases due to timing of the Universal Bancorp acquisition in 2018 along with items mentioned above.
The effective tax rate for the fourth quarter of 2019 was (6.9) % compared to 14.3% in the same quarter of 2018. The primary reason for the decline in the effective tax rate in the fourth quarter was the exercise of non-qualified stock options. The effective tax rate for the year ended 2019 was 9.0% compared to 13.6% for 2018.
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): | 2019 | 2019 | 2018 | |||
(000) | (000) | (000) | ||||
Assets | ||||||
Cash and cash equivalents | $ 32,323 | $ 31,315 | $ 33,414 | |||
Interest-bearing time deposits | 3,496 | 4,023 | 4,239 | |||
Investment securities - AFS | 385,622 | 382,976 | 370,875 | |||
Loans held for sale | 13,397 | 19,643 | 3,987 | |||
Loans, gross | 1,490,232 | 1,497,022 | 1,495,943 | |||
Allowance for loan losses | (13,307) | (13,411) | (13,281) | |||
Net loans | 1,476,925 | 1,483,611 | 1,482,662 | |||
Premises and equipment, net | 24,505 | 24,518 | 25,641 | |||
FHLB of Indianapolis stock | 13,115 | 13,115 | 13,034 | |||
Deferred tax asset, net | 5,146 | 3,344 | 7,744 | |||
Cash value of life insurance | 60,740 | 61,099 | 60,160 | |||
Other real estate owned and repossessed assets | 1,995 | 1,952 | 2,013 | |||
Goodwill | 22,310 | 22,310 | 22,310 | |||
Core deposit and other intangibles | 2,790 | 2,969 | 3,569 | |||
Other assets | 21,412 | 22,675 | 19,665 | |||
Total assets | $ 2,063,776 | $ 2,073,550 | $ 2,049,313 | |||
Liabilities and Stockholders' Equity | ||||||
Deposits | $ 1,553,478 | $ 1,573,088 | $ 1,519,225 | |||
FHLB advances | 245,879 | 239,661 | 292,497 | |||
Other borrowings | 17,573 | 17,653 | 17,988 | |||
Other liabilities | 20,034 | 21,170 | 17,240 | |||
Stockholders' equity | 226,812 | 221,978 | 202,363 | |||
Total liabilities and stockholders' equity | $ 2,063,776 | $ 2,073,550 | $ 2,049,313 | |||
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): | 2019 | 2019 | 2018 | 2019 | 2018 | |
(000) | (000) | (000) | (000) | (000) | ||
Total interest and dividend income | $ 20,892 | $ 21,617 | $ 21,489 | $ 85,329 | $ 79,694 | |
Total interest expense | 4,926 | 5,372 | 4,995 | 21,032 | 16,591 | |
Net interest income | 15,966 | 16,245 | 16,494 | 64,297 | 63,103 | |
Provision for loan losses | 575 | 425 | 600 | 1,950 | 2,120 | |
Net interest income after provision | ||||||
for loan losses | 15,391 | 15,820 | 15,894 | 62,347 | 60,983 | |
Non-interest income | ||||||
Service fee income | 3,019 | 2,081 | 2,390 | 8,949 | 7,937 | |
Net realized gain on sales of AFS securities | 39 | 109 | 138 | 1,014 | 804 | |
Commissions | 1,162 | 1,147 | 1,114 | 4,787 | 4,865 | |
Net gain on sale of loans | 1,722 | 1,778 | 902 | 5,871 | 3,126 | |
Net servicing fees | 149 | 158 | 158 | 595 | 591 | |
Increase in cash value of life insurance | 300 | 312 | 315 | 1,239 | 1,239 | |
Net gain (loss) on sale of other real estate and repossessed assets | 11 | 28 | (9) | (19) | (43) | |
Other income | 1,881 | 236 | 288 | 2,485 | 1,055 | |
Total non-interest income | 8,283 | 5,849 | 5,296 | 24,921 | 19,574 | |
Non-interest expense | ||||||
Salaries and employee benefits | 10,386 | 8,826 | 8,895 | 36,313 | 32,964 | |
Net occupancy expenses | 1,010 | 1,005 | 986 | 4,055 | 3,965 | |
Equipment expenses | 636 | 574 | 625 | 2,441 | 2,514 | |
Data processing fees | 643 | 680 | 686 | 2,613 | 2,624 | |
Advertising and promotion | 353 | 296 | 331 | 1,323 | 1,606 | |
ATM and debit card expense | 584 | 590 | 582 | 2,334 | 2,290 | |
Deposit insurance | - | (3) | 207 | 413 | 898 | |
Professional fees | 1,342 | 484 | 463 | 2,706 | 2,177 | |
Software subscriptions and maintenance | 706 | 723 | 732 | 3,014 | 2,719 | |
Other real estate and repossessed assets | 86 | 47 | 49 | 256 | 189 | |
Core deposit intangible amortization | 178 | 187 | 249 | 779 | 1,103 | |
Other expenses | 1,548 | 1,074 | 1,214 | 4,911 | 5,684 | |
Total non-interest expense | 17,472 | 14,483 | 15,019 | 61,158 | 58,733 | |
Income before income taxes | 6,202 | 7,186 | 6,171 | 26,110 | 21,824 | |
Income tax provision (benefit) | (426) | 1,052 | 881 | 2,359 | 2,960 | |
Net income available to common shareholders | $ 6,628 | $ 6,134 | $ 5,290 | $ 23,751 | $ 18,864 | |
Pre-tax pre-provision earnings (1) | $ 6,777 | $ 7,611 | $ 6,771 | $ 28,060 | $ 23,944 | |
Average Balances, Net Interest Income, Yield Earned and Rates Paid | ||||||
Three | Three | |||||
months ended | months ended | |||||
12/31/2019 | 12/31/2018 | |||||
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 | $ 22,866 | $ 56 | 0.98% | $22,735 | $63 | 1.11% |
Mortgage-backed securities: | ||||||
Available-for-sale | 213,821 | 1,333 | 2.49 | 216,947 | 1,511 | 2.79 |
Investment securities: | ||||||
Available-for-sale | 159,531 | 1,290 | 3.23 | 154,735 | 1,261 | 3.26 |
Loans receivable | 1,505,000 | 18,057 | 4.80 | 1,491,709 | 18,509 | 4.96 |
Stock in FHLB of Indianapolis | 13,115 | 156 | 4.76 | 12,823 | 145 | 4.52 |
Total interest-earning assets (2) | 1,914,333 | 20,892 | 4.37 | 1,898,949 | 21,489 | 4.53 |
Non-interest earning assets, net of allowance | ||||||
for loan losses and unrealized gain/loss | 152,354 | 129,974 | ||||
Total assets | $ 2,066,687 | $2,028,923 | ||||
Interest-Bearing Liabilities: | ||||||
Demand and NOW accounts | $ 410,289 | 621 | 0.61 | $393,365 | 779 | 0.79 |
Savings deposits | 178,983 | 5 | 0.01 | 184,447 | 5 | 0.01 |
Money market accounts | 216,414 | 510 | 0.94 | 183,947 | 303 | 0.66 |
Certificate accounts | 502,481 | 2,549 | 2.03 | 488,484 | 2,231 | 1.83 |
Total deposits | 1,308,167 | 3,685 | 1.13 | 1,250,243 | 3,318 | 1.06 |
Borrowings | 231,989 | 1,241 | 2.14 | 281,026 | 1,677 | 2.39 |
Total interest-bearing liabilities | 1,540,156 | 4,926 | 1.28 | 1,531,269 | 4,995 | 1.30 |
Non-interest bearing deposit accounts | 281,816 | 284,837 | ||||
Other liabilities | 21,118 | 18,196 | ||||
Total liabilities | 1,843,090 | 1,834,302 | ||||
Stockholders' equity | 223,597 | 194,621 | ||||
Total liabilities and stockholders' equity | $ 2,066,687 | $2,028,923 | ||||
Net interest earning assets | $ 374,177 | $367,680 | ||||
Net interest income | $ 15,966 | $16,494 | ||||
Net interest rate spread (4) | 3.09% | 3.22% | ||||
Net yield on average interest-earning assets (4) | 3.34% | 3.47% | ||||
Net yield on average interest-earning assets, tax equivalent (3)(4) | 3.41% | 3.55% | ||||
Average interest-earning assets to | ||||||
average interest-bearing liabilities | 124.29% | 124.01% | ||||
Twelve | Twelve | |||||
months ended | months ended | |||||
12/31/2019 | 12/31/2018 | |||||
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 | $ 23,947 | $ 291 | 1.22% | $ 22,927 | $ 250 | 1.09% |
Mortgage-backed securities: | ||||||
Available-for-sale | 216,374 | 5,703 | 2.64 | 203,891 | 5,513 | 2.70 |
Investment securities: | ||||||
Available-for-sale | 154,838 | 5,020 | 3.24 | 149,535 | 4,850 | 3.24 |
Loans receivable | 1,509,658 | 73,623 | 4.88 | 1,427,436 | 68,475 | 4.80 |
Stock in FHLB of Indianapolis | 13,105 | 692 | 5.28 | 12,557 | 606 | 4.83 |
Total interest-earning assets (2) | 1,917,922 | 85,329 | 4.45 | 1,816,346 | 79,694 | 4.39 |
Non-interest earning assets, net of allowance | ||||||
for loan losses and unrealized gain/loss | 147,692 | 127,142 | ||||
Total assets | $ 2,065,614 | $ 1,943,488 | ||||
Interest-Bearing Liabilities: | ||||||
Demand and NOW accounts | $ 403,399 | 3,072 | 0.76 | $ 385,681 | 2,462 | 0.64 |
Savings deposits | 182,589 | 19 | 0.01 | 180,065 | 20 | 0.01 |
Money market accounts | 197,296 | 1,777 | 0.90 | 191,433 | 1,027 | 0.54 |
Certificate accounts | 507,589 | 10,251 | 2.02 | 455,431 | 7,347 | 1.61 |
Total deposits | 1,290,873 | 15,119 | 1.17 | 1,212,610 | 10,856 | 0.90 |
Borrowings | 261,460 | 5,913 | 2.26 | 260,994 | 5,735 | 2.20 |
Total interest-bearing liabilities | 1,552,333 | 21,032 | 1.35 | 1,473,604 | 16,591 | 1.13 |
Non-interest bearing deposit accounts | 278,792 | 267,812 | ||||
Other liabilities | 20,417 | 17,315 | ||||
Total liabilities | 1,851,542 | 1,758,731 | ||||
Stockholders' equity | 214,072 | 184,757 | ||||
Total liabilities and stockholders' equity | $ 2,065,614 | $ 1,943,488 | ||||
Net interest earning assets | $ 365,589 | $ 342,742 | ||||
Net interest income | $ 64,297 | $ 63,103 | ||||
Net interest rate spread (4) | 3.09% | 3.26% | ||||
Net yield on average interest-earning assets (4) | 3.35% | 3.47% | ||||
Net yield on average interest-earning assets, tax equivalent (3)(4) | 3.43% | 3.55% | ||||
Average interest-earning assets to | ||||||
average interest-bearing liabilities | 123.55% | 123.26% | ||||
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): | 2019 | 2019 | 2018 | 2019 | 2018 | |
Share and per share data: | ||||||
Average common shares outstanding: | ||||||
Basic | 8,563,012 | 8,516,038 | 8,590,729 | 8,575,355 | 8,394,195 | |
Diluted | 8,636,467 | 8,629,030 | 8,732,290 | 8,682,108 | 8,543,544 | |
Per common share: | ||||||
Basic earnings | $ 0.77 | $ 0.72 | $ 0.62 | $ 2.77 | $ 2.25 | |
Diluted earnings | $ 0.77 | $ 0.71 | $ 0.61 | $ 2.74 | $ 2.21 | |
Dividends | $ 0.20 | $ 0.20 | $ 0.20 | $ 0.80 | $ 0.74 | |
Dividend payout ratio | 25.97% | 28.17% | 32.79% | 29.20% | 33.48% | |
Performance Ratios: | ||||||
Return on average assets (ratio of net | ||||||
income to average total assets)(4) | 1.28% | 1.18% | 1.04% | 1.15% | 0.97% | |
Return on average tangible common equity (ratio of net | ||||||
income to average tangible common equity)(4) | 13.36% | 12.65% | 12.56% | 12.60% | 11.66% | |
Interest rate spread information: | ||||||
Average during the period(4) | 3.09% | 3.11% | 3.22% | 3.09% | 3.26% | |
Net interest margin(4)(5) | 3.34% | 3.38% | 3.47% | 3.35% | 3.47% | |
Efficiency Ratio | 72.05% | 65.55% | 68.93% | 68.55% | 71.04% | |
Ratio of average interest-earning | ||||||
assets to average interest-bearing | ||||||
liabilities | 124.29% | 124.26% | 124.01% | 123.55% | 123.26% | |
Allowance for loan losses: | ||||||
Balance beginning of period | $ 13,411 | $ 13,435 | $ 13,009 | $ 13,281 | $ 12,387 | |
Net charge-offs (recoveries): | ||||||
Real Estate: | ||||||
Commercial | 25 | 56 | 40 | 165 | 93 | |
Commercial construction and development | - | - | 0 | - | 0 | |
Consumer closed end first mortgage | 126 | 41 | 23 | 237 | 156 | |
Consumer open end and junior liens | - | - | 0 | - | 36 | |
Total real estate loans | 151 | 97 | 63 | 402 | 285 | |
Other loans: | ||||||
Auto | 71 | 37 | 5 | 237 | 41 | |
Boat/RV | 395 | 232 | 212 | 1,039 | 593 | |
Other | 62 | 74 | 48 | 237 | 208 | |
Commercial and industrial | - | 9 | 0 | 9 | 99 | |
Total other | 528 | 352 | 265 | 1,522 | 941 | |
Net charge-offs (recoveries) | 679 | 449 | 328 | 1,924 | 1,226 | |
Provision for loan losses | 575 | 425 | 600 | 1,950 | 2,120 | |
Balance end of period | $ 13,307 | $ 13,411 | $ 13,281 | $ 13,307 | $ 13,281 | |
Net loan charge-offs to average loans (4) | 0.18% | 0.12% | 0.09% | 0.13% | 0.09% | |
December 31, | September 30, | December 31, | ||||
2019 | 2019 | 2018 | ||||
Total shares outstanding | 8,607,953 | 8,498,491 | 8,603,462 | |||
Tangible book value per common share | $ 23.43 | $ 23.15 | $ 20.51 | |||
Tangible common equity to tangible assets | 9.89% | 9.60% | 8.72% | |||
Nonperforming assets (000's) | ||||||
Non-accrual loans | ||||||
Real Estate: | ||||||
Commercial | $ 756 | $ 881 | $ 4,782 | |||
Commercial construction and development | 631 | - | 62 | |||
Consumer closed end first mortgage | 3,682 | 3,574 | 2,777 | |||
Consumer open end and junior liens | 352 | 184 | 273 | |||
Total real estate loans | 5,421 | 4,639 | 7,894 | |||
Other loans: | ||||||
Auto | 256 | 185 | 88 | |||
Boat/RV | 944 | 531 | 470 | |||
Other | 51 | 16 | 46 | |||
Commercial and industrial | 368 | 323 | 91 | |||
Total other | 1,619 | 1,055 | 695 | |||
Total non-accrual loans | 7,040 | 5,694 | 8,589 | |||
Accruing loans past due 90 days or more | 156 | 148 | 517 | |||
Total nonperforming loans | 7,196 | 5,842 | 9,106 | |||
Real estate owned | 1,217 | 1,283 | 1,223 | |||
Other repossessed assets | 778 | 669 | 790 | |||
Total nonperforming assets | $ 9,191 | $ 7,794 | $ 11,119 | |||
Performing restructured loans (6) | $ 1,371 | $ 1,401 | $ 2,571 | |||
Asset Quality Ratios: | ||||||
Non-performing assets to total assets | 0.45% | 0.38% | 0.54% | |||
Non-performing loans to total loans | 0.48% | 0.39% | 0.61% | |||
Allowance for loan losses to non-performing loans | 185% | 230% | 146% | |||
Allowance for loan losses to loans receivable | 0.89% | 0.90% | 0.89% | |||
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. | ||||||
As of or for | As of or for | As of or for | As of or for | As of or for | ||
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 | 2019 | 2019 | 2018 | 2019 | 2018 | |
Total stockholders' equity (GAAP) | $ 226,812 | $ 221,978 | $ 202,363 | $ 226,812 | $ 202,363 | |
Less: Intangible assets | 25,100 | 25,279 | 25,879 | 25,100 | 25,879 | |
Tangible common equity (non-GAAP) | $ 201,712 | $ 196,699 | $ 176,484 | $ 201,712 | $ 176,484 | |
Total assets (GAAP) | $ 2,063,776 | $ 2,073,550 | $ 2,049,313 | $ 2,063,776 | $ 2,049,313 | |
Less: Intangible assets | 25,100 | 25,279 | 25,879 | 25,100 | 25,879 | |
Tangible assets (non-GAAP) | $ 2,038,676 | $ 2,048,271 | $ 2,023,434 | $ 2,038,676 | $ 2,023,434 | |
Tangible common equity to tangible assets (non-GAAP) | 9.89% | 9.60% | 8.72% | 9.89% | 8.72% | |
Book value per common share (GAAP) | $ 26.35 | $ 26.12 | $ 23.52 | $ 26.35 | $ 23.52 | |
Less: Effect of intangible assets | 2.92 | 2.97 | 3.01 | 2.92 | 3.01 | |
Tangible book value per common share | $ 23.43 | $ 23.15 | $ 20.51 | $ 23.43 | $ 20.51 | |
Return on average stockholders' equity (GAAP) | 11.86% | 11.19% | 10.87% | 11.09% | 10.21% | |
Add: Effect of intangible assets | 1.50% | 1.46% | 1.69% | 1.51% | 1.45% | |
Return on average tangible common equity (non-GAAP) | 13.36% | 12.65% | 12.56% | 12.60% | 11.66% | |
Total tax free interest income (GAAP) | ||||||
Loans receivable | $ 98 | $ 98 | $ 106 | $ 399 | $ 420 | |
Investment securities | 1,256 | 1,236 | 1,226 | 4,884 | 4,494 | |
Total tax free interest income | $ 1,354 | $ 1,334 | $ 1,332 | $ 5,283 | $ 4,914 | |
Total tax free interest income, gross (at 21%) | $ 1,714 | $ 1,689 | $ 1,686 | $ 6,687 | $ 6,220 | |
Net interest margin, tax equivalent (non-GAAP) | ||||||
Net interest income (GAAP) | $ 15,966 | $ 16,245 | $ 16,494 | $ 64,297 | $ 63,103 | |
Add: Tax effect tax free interest income (3) | 360 | 355 | 354 | 1,404 | 1,306 | |
Net interest income (non-GAAP) | 16,326 | 16,600 | 16,848 | 65,701 | 64,409 | |
Divided by: Average interest-earning assets | 1,914,333 | 1,923,938 | 1,898,949 | 1,917,922 | 1,816,346 | |
Net interest margin, tax equivalent | 3.41% | 3.45% | 3.55% | 3.43% | 3.55% | |
One-time merger related expenses | ||||||
Non-tax deductible | $ 585 | $ - | $ - | $ 585 | $ 220 | |
Tax deductible | 527 | - | 79 | 527 | 2,158 | |
Total one-time merger related expenses | $ 1,112 | $ - | $ 79 | $ 1,112 | $ 2,378 | |
Subtract tax benefit | 111 | - | 17 | 111 | 453 | |
Net one-time merger related expenses | $ 1,001 | $ - | $ 62 | $ 1,001 | $ 1,925 | |
Net income (GAAP) | 6,628 | - | 5,290 | 23,751 | 18,864 | |
Net income excluding one-time merger expenses (non-GAAP) | $ 7,629 | $ - | $ 5,352 | $ 24,752 | $ 20,789 | |
Adjusted diluted earnings per share | ||||||
Net income excluding one-time merger expenses (non-GAAP) | $ 7,629 | $ - | $ 5,352 | $ 24,752 | $ 20,789 | |
Average diluted shares | 8,636,467 | - | 8,732,290 | 8,682,108 | 8,543,544 | |
Adjusted diluted earnings per share (non-GAAP) | $ 0.88 | $ - | $ 0.61 | $ 2.85 | $ 2.43 | |
Adjusted return on assets | ||||||
Net income excluding one-time merger expenses (non-GAAP) | $ 7,629 | $ - | $ 5,352 | $ 24,752 | $ 20,789 | |
Average assets | 2,066,687 | - | 2,028,923 | 2,065,614 | 1,943,488 | |
Adjusted return on average assets (non-GAAP) | 1.48% | - | 1.06% | 1.20% | 1.07% | |
Adjusted return on tangible common equity | ||||||
Net income excluding one-time merger expenses (non-GAAP) | $ 7,629 | $ - | $ 5,352 | $ 24,752 | $ 20,789 | |
Average tangible common equity | 198,401 | - | 168,443 | 188,563 | 161,788 | |
Adjusted return on average tangible common equity (non-GAAP) | 15.38% | - | 12.71% | 13.13% | 12.85% | |
Ratio Summary: | ||||||
Return on average equity | 11.86% | 11.19% | 10.87% | 11.09% | 10.21% | |
Return on average tangible common equity | 13.36% | 12.65% | 12.56% | 12.60% | 11.66% | |
Return on average assets | 1.28% | 1.18% | 1.04% | 1.15% | 0.97% | |
Tangible common equity to tangible assets | 9.89% | 9.60% | 8.72% | 9.89% | 8.72% | |
Net interest margin, tax equivalent | 3.41% | 3.45% | 3.55% | 3.43% | 3.55% | |
(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. | ||||||
(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. | ||||||
SOURCE MutualFirst Financial, Inc.
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