MUNCIE, Ind., Feb. 11 /PRNewswire-FirstCall/ -- MutualFirst Financial, Inc. (Nasdaq: MFSF), the holding company of MutualBank (the "Bank"), announced today that net income available to common shareholders for the year ended December 31, 2009 was $1.4 million, or $.20 for basic and diluted earnings per common share. This compared to a net loss for the year ended December 31, 2008 of $22.1 million, or $4.22 for basic and diluted earnings per common share. Return on assets was .23% and return on average tangible common equity was 1.49% for the year ended 2009 compared to a negative 1.91% and a negative 28.04% respectively, for the year ended 2008.
"We are pleased to report positive annual earnings through this difficult economic environment, which has included historically high levels of credit expense on the loan portfolio and other than temporary impairments on the investment portfolio," said David W. Heeter, President and CEO.
Assets totaled $1.4 billion at December 31, 2009, an increase from December 31, 2008 of $10.1 million, or 0.7% as cash received from loan sales and prepayments was reinvested into securities. Gross loans, excluding loans held for sale, decreased $52.1 million, or 4.6%. Increases in commercial loans of $8.7 million, or 2.6% were offset by decreases in consumer loans of $8.6 million, or 3.3% and residential mortgage loans held in the portfolio of $52.2 million, or 9.8%. Residential mortgage loans held for sale increased $1.0 million and mortgage loans sold during the year 2009 totaled $160.0 million compared to $92.9 million sold during the year 2008. Total loan originations for the year ended December 31, 2009 were approximately $335 million, a 68% increase over 2008. Despite the increased originations, loan prepayments and mortgage loan sales have led to a decrease in loan balances. Increases in investment securities available for sale of $53.7 million, or 69.5% primarily due to investments in highly rated municipal, corporate and mortgage-backed securities and cash and cash equivalents of $6.6 million helped offset the decreases in the loan portfolio.
The net loss for the three months ended December 31, 2009 was $1.6 million, or $.24 for basic and diluted earnings per common share. The net loss for the quarter was a direct result of $2.4 million of other than temporary impairment charges on several investments. This compared to a net loss for the comparable period in 2008 of $24.9 million, or $3.65 for basic and diluted earnings per share. The net loss in fourth quarter 2008 was primarily due to a goodwill impairment charge of $29.0 million. Annualized return on average assets was a negative .34% and return on average tangible common equity was a negative 7.06% for the three months ended December 31, 2009 compared to a negative 7.13% and a negative 108.92% respectively, for the same period last year.
Allowance for loan losses was $16.4 million at December 31, 2009, an increase of $1.3 million from December 31, 2008. Net charge offs for the quarter ended December 31, 2009 were $1.9 million, or .69% of average loans on an annualized basis compared to $1.9 million, or .66% of average loans for the comparable period in 2008. Net charge offs for the year ended December 31, 2009 were $5.2 million, or .47% of average loans compared to $3.2 million, or .34% of average loans for the comparable period in 2008. The allowance for loan losses as a percentage of non-performing loans and total loans was 50.38% and 1.53%, respectively at December 31, 2009 compared to 69.41% and 1.34%, respectively at December 31, 2008 and 50.68% and 1.53%, respectively at September 30, 2009. On a linked quarter basis net charge offs increased from an annualized .50% of average loans for the quarter ended September 30, 2009 to .69% for the current quarter. Heeter commented, "We continue to actively monitor our loan portfolio and we believe our allowance is adequate."
Total deposits were $1.0 billion at December 31, 2009 an increase of $82.7 million, or 8.6% from December 31, 2008. This increase was due to increases in certificates of deposit of $62.1 million and transactional deposits of $20.6 million. Total borrowings decreased $81.1 million to $198.0 million at December 31, 2009 from $279.1 million at December 31, 2008. The decrease in total borrowings was a direct result of increasing retail deposits and paying down maturating borrowings helping to reduce interest costs.
Stockholders' equity was $129.7 million at December 31, 2009, a decrease of $788,000, or 0.6% from December 31, 2008. The decrease was due primarily to dividend payments of $2.9 million to common shareholders and $1.4 million to preferred shareholders. This decrease was partially offset by net income of $3.2 million and Employee Stock Ownership Plan (ESOP) shares earned of $215,000. Accumulated other comprehensive income increased $170,000 as unrealized gains on securities and derivatives of $325,000 were partially offset by a $155,000 unrealized loss on a benefit plan. The Bank's risk-based capital ratio is 12.75% and the tier one capital ratio is 11.50%. The Bank's capital ratios are well in excess of "well-capitalized" levels as defined by all regulatory standards.
Net interest income before the provision for loan losses decreased $263,000 from $10.5 million for the three months ended December 31, 2008 to $10.3 million for the three months ended December 31, 2009. The primary reason for the decrease was a decrease in net interest margin of 17 basis points to 3.24% in the fourth quarter 2009 compared to 3.41% for the fourth quarter 2008. This decrease was partially offset by an increase in average earning assets of $30.1 million due to an increased investment portfolio. On a linked quarter basis, net interest income increased $38,000 primarily due to an increase in net interest margin of 3 basis points, partially offset by a decrease in average earning assets of $8.4 million.
Net interest income before the provision for loan losses increased $7.7 million from $33.5 million for the year ended December 31, 2008 to $41.2 million for the year ended December 31, 2009. The primary reason for the increase was an increase in average earning assets of $239.5 million due to the acquisition of MFB Corp in the third quarter of 2008. Net interest margin remained unchanged at 3.22% for the years ended December 31, 2009 and 2008.
The provision for loan losses for the fourth quarter of 2009 was $1.7 million, a decrease of $3.1 million from last year's comparable period. This decline was due to the fourth quarter of 2008 provision of $4.8 million to sufficiently meet the Bank's internal allowance calculation due to the declining economic and loan factors. The current provision continues to provide sufficient additional allowance to meet the Bank's internal allowance calculation. Non-performing loans to total loans at December 31, 2009 were 3.03% compared to 1.93% at December 31, 2008. 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 2.86% at December 31, 2009 compared to 1.92% at December 31, 2008. On a linked quarter basis, non-performing loans to total loans at December 31, 2009 were 3.03% compared to 3.02% at September 30, 2009. This increase in non-performing loans was primarily due to a decreased level of total loans as non-performing loans decreased $208,000. Non-performing assets to total assets were 2.86% at December 31, 2009 compared to 2.74% at September 30, 2009.
The provision for loan losses for the year ended 2009 was $6.5 million, a decrease of $500,000 from 2008. The provision for loan losses continued to exceed net charge offs and added an additional $1.3 million to the allowance. Allowance for loan losses to loans receivable was 1.53% as of December 31, 2009 compared to 1.34% as of December 31, 2008.
Non-interest income increased $599,000 to $1.8 million for the three months ended December 31, 2009 compared to the same period in 2008. This increase is primarily due to increases in service fees on transaction accounts of $19,000, increases in commission income of $243,000 primarily due to an increase in income on trust services, increases in limited partnership income of $407,000 primarily due to one-time gains of $427,000, and increases in net gain on sale of loans of $596,000 primarily due to a $500,000 mortgage servicing rights impairment in the fourth quarter of 2008, which was not duplicated in 2009. These increases were partially offset by a decrease in gains on sale of investments of $936,000 due to impairment charges of $2.4 million on securities taken in the fourth quarter of 2009 compared to $1.2 million taken in the fourth quarter 2008.
For the year ended December 31, 2009 non-interest income increased $6.6 million to $13.2 million compared to $6.5 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, the impairment charge taken in the third quarter of 2008, and increased mortgage banking income in 2009.
Non-interest expense decreased $28.2 million to $11.9 million for the three months ended December 31, 2009 compared to $40.1 million for the same period in 2008. The fourth quarter 2008 included a goodwill impairment charge of $29.0 million. The increases in the current quarter non-interest expense compared to the same period in 2008 included increases in occupancy and equipment expense of $222,000 primarily due to increased property taxes, increases in data processing of $85,000, increases in deposit insurance of $208,000 primarily due to higher premium rates and increased deposits, and increases in repossessed asset expense of $494,000 primarily due to increased repossessed assets. The decreases in the current quarter non-interest expense compared to the same period in 2008 included a decrease in salaries and employee benefits of $54,000, a decrease in marketing expense of $73,000, a decrease in software subscriptions and maintenance of $42,000, a decrease in intangible amortization of $44,000 and a decrease in other expenses of $29.0 million related to the goodwill impairment charge.
For the year ended December 31, 2009 non-interest expense decreased $19.1 million to $44.5 million compared to $63.6 million for the same period in 2008. The reasons for the increase after excluding the $29.0 million goodwill impairment charge were due to the acquisition of MFB Corp in the third quarter of 2008, increased FDIC assessments, which included a one-time $630,000 in the second quarter 2009, and credit related expenses on the loan portfolio.
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 December 31, December 31, Data(Unaudited): 2009 2008 ---------------------------- ---- ---- (000) (000) Total Assets $1,398,881 $1,388,827 Cash and cash equivalents 46,341 39,703 Loans held for sale 2,521 1,541 Loans receivable, net 1,059,694 1,113,132 Investment securities held to maturity 8,147 9,676 Investment securities available for sale, at fair value 130,914 77,255 Total deposits 1,045,196 962,514 Total borrowings 197,960 279,104 Total stockholders' equity 129,727 130,515
Three Three Three Twelve Twelve Months Months Months Months Months Ended Ended Ended Ended Ended Selected Operations December September December December December Data 31, 30, 31, 31, 31, (Unaudited): 2009 2009 2008 2009 2008 ------------------------ ---- ---- ---- ---- ---- (000) (000) (000) (000) (000) Total interest income $17,378 $17,682 $19,108 $71,852 $65,179 Total interest expense 7,097 7,439 8,564 30,624 31,639 ----- ----- ----- ------ ------ Net interest income 10,281 10,243 10,544 41,228 33,540 Provision for loan losses 1,650 1,650 4,763 6,500 7,020 ----- ----- ----- ----- ----- Net interest income after provision for loan losses 8,631 8,593 5,781 34,728 26,520 ----- ----- ----- ------ ------ Non-interest income ------------------- Fees and service charges 1,936 1,956 1,917 7,458 6,257 Net gain (loss) on sale of investments (2,019) 60 (1,083) (1,800) (3,716) Equity in gains (losses) of limited partnerships 341 (78) (66) 108 (158) Commissions 849 710 606 3,047 1,796 Net gain (loss) on loan sales 258 582 (338) 2,622 1,141 Increase in cash surrender value of life insurance 390 385 413 1,573 1,323 Other income (loss) 25 33 (268) 145 (121) --- --- ---- --- ---- Total non- interest income 1,780 3,648 1,181 13,153 6,522 ----- ----- ----- ------ ----- Non-interest expense ------------ Salaries and benefits 6,076 5,823 6,130 23,047 19,118 Occupancy and equipment 1,482 1,424 1,260 5,677 4,509 Data processing fees 407 388 322 1,510 1,192 Professional fees 319 310 312 1,291 1,133 Marketing 397 408 470 1,530 1,461 Deposit insurance 414 416 206 2,263 512 Software subscriptions and maintenance 334 367 376 1,378 1,011 Intangible amortization 359 372 403 1,525 805 Repossessed assets expense 899 446 405 2,025 875 Other expenses 1,191 993 30,234 4,261 33,009 Total non- interest expense 11,878 10,947 40,118 44,507 63,625 ------ ------ ------ ------ ------ Income (loss) before taxes (1,467) 1,294 (33,156) 3,374 (30,583) Income tax provision (benefit) (278) 52 (8,309) 211 (8,485) ---- --- ------ --- ------ Net income (loss) (1,189) 1,242 (24,847) 3,163 (22,098) Preferred stock dividends and amortization 451 451 31 1,803 31 --- --- --- ----- --- Net income (loss) available to common shareholders ($1,640) $791 ($24,878) $1,360 ($22,129) ======= ==== ======== ====== ========
Average Balances, Net Interest Income, Yield Earned and Rates Paid ------------------------------------ Three Three mos ended mos ended 12/31/2009 12/31/2008 ---------- ---------- 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 $31,203 $14 0.18% $8,855 $22 0.99% Mortgage- backed securities: Available- for-sale 101,110 990 3.92 49,950 707 5.66 Held-to- maturity 8,899 120 5.39 9,796 187 7.64 Investment securities: Available- for-sale 26,190 323 4.93 20,475 241 4.71 Loans receivable 1,082,263 15,882 5.87 1,130,529 17,729 6.27 Stock in FHLB of Indianapolis 18,632 50 1.07 18,632 222 4.77 ------ --- ---- ------ --- ---- Total interest- earning assets (3) 1,268,297 17,379 5.48 1,238,237 19,108 6.17 Non-interest earning assets, net of allowance for loan losses and unrealized gain/loss 125,854 155,839 ------- ------- Total assets $1,394,151 $1,394,076 ========== ========== Interest- Bearing Liabilities: Demand and NOW accounts $159,242 172 0.43 $169,002 328 0.78 Savings deposits 85,759 34 0.16 81,372 105 0.52 Money market accounts 49,826 120 0.96 47,161 203 1.72 Certificate accounts 640,102 4,570 2.86 573,707 5,005 3.49 ------- ----- ---- ------- ----- ---- Total deposits 934,929 4,896 2.09 871,242 5,641 2.59 Borrowings 211,071 2,201 4.17 280,390 2,923 4.17 ------- ----- ---- ------- ----- ---- Total interest- bearing accounts 1,146,000 7,097 2.48 1,151,632 8,564 2.97 Non- interest bearing deposit accounts 100,376 94,006 Other liabilities 16,410 20,612 ------ ------ Total liabilities 1,262,786 1,266,250 Stockholders' equity 131,365 127,826 ------- ------- Total liabilities and stockholders' equity $1,394,151 $1,394,076 ========== ========== Net earning assets $122,297 $86,605 ======== ======= Net interest income $10,282 $10,544 ======= ======= Net interest rate spread 3.00% 3.20% ==== ==== Net yield on average interest- earning assets 3.24% 3.41% ==== ==== Average interest- earning assets to average interest- bearing liabilities 110.67% 107.52% ====== ======
Three Three Three Twelve Twelve Months Months Months Months Months Selected Financial Ended Ended Ended Ended Ended Ratios and December September December December December Other Financial Data 31, 30, 31, 31, 31, (Unaudited): 2009 2009 2008 2009 2008 -------------------- ---- ---- ---- ---- ---- Share and per share data: Average common shares outstanding Basic 6,853,643 6,845,697 6,820,638 6,840,659 5,249,135 Diluted 6,853,672 6,846,025 6,821,158 6,840,748 5,253,477 Per common share: Basic earnings ($0.24) $0.12 ($3.65) $0.20 ($4.22) Diluted earnings ($0.24) $0.12 ($3.65) $0.20 ($4.22) Dividends $0.06 $0.12 $0.16 $0.42 $0.64 Dividend payout ratio -25.00% 100.00% -4.38% 210.00% -15.17% Performance Ratios: Return on average assets (ratio of net income to average total assets)(1) -0.34% 0.23% -7.13% 0.23% -1.91% Return on average tangible common equity (ratio of net income to average tangible common equity)(1) -7.06% 3.48% -108.92% 1.49% -28.04% Interest rate spread information: Average during the period(1) 3.00% 2.97% 3.20% 2.98% 3.01% Net interest margin(1)(2) 3.24% 3.21% 3.41% 3.22% 3.22% Efficiency Ratio 98.48% 78.81% 342.14% 81.84% 158.82% Ratio of average interest- earning assets to average interest- bearing liabilities 110.67% 110.23% 107.52% 110.22% 107.14% Allowance for loan losses: Balance beginning of period $16,620 $16,348 $12,217 $15,107 $8,352 Charge offs: One- to four-family 979 218 139 1,728 480 Multi-family 0 0 0 0 0 Commercial real estate 169 585 1,224 1,291 1,548 Construction or development 0 0 0 0 0 Consumer loans 994 779 623 3,154 2,174 Commercial business loans 0 0 200 83 230 --- --- --- --- --- Sub-total 2,142 1,582 828 6,256 4,432 Recoveries: One- to four- family 16 0 0 110 42 Multi-family 0 0 0 0 0 Commercial real estate 6 35 244 184 558 Construction or development 0 0 0 0 0 Consumer loans 264 169 69 767 556 Commercial business loans 0 0 0 2 57 --- --- --- --- --- Sub-total 286 204 313 1,063 1,213 Net charge offs 1,856 1,378 1,873 5,193 3,219 Acquired with MFB Financial acquisition 0 2,954 Additions charged to operations 1,650 1,650 4,763 6,500 7,020 ----- ----- ----- ----- ----- Balance end of period $16,414 $16,620 $15,107 $16,414 $15,107 ======= ======= ======= ======= ======= Net loan charge-offs to average loans (1) 0.69% 0.50% 0.66% 0.47% 0.34%
December September December 31, 30, 31, 2009 2009 2008 ---- ---- ---- Total shares outstanding 6,984,754 6,984,754 6,984,754 Tangible book value per share $13.09 $13.22 $12.99 Tangible common equity to tangible assets 6.77% 6.85% 6.79% Nonperforming assets (000's) Non-accrual loans One- to four- family $14,617 $16,100 $7,917 Commercial real estate 8,986 9,269 7,723 Consumer loans 3,610 3,501 1,851 Commercial business loans 1,873 2,192 2,507 ----- ----- ----- Total non-accrual loans 29,086 31,062 19,998 Accruing loans past due 90 days or more 1,934 1,266 1,473 Restructured loans 1,563 463 293 ----- --- --- Total nonperforming loans 32,583 32,791 21,764 Real estate owned 5,424 4,095 2,979 Other repossessed assets 2,027 1,440 1,861 ----- ----- ----- Total nonperforming assets $40,034 $38,326 $26,604 Asset Quality Ratios: Non-performing assets to total assets 2.86% 2.74% 1.92% Non-performing loans to total loans 3.03% 3.02% 1.93% Allowance for loan losses to non- performing loans 50.38% 50.68% 69.41% Allowance for loan losses to loans receivable 1.53% 1.53% 1.34% (1) Ratios for the three month period have been annualized. (2) Net interest income divided by average interest earning assets. (3) Calculated net of deferred loan fees, loan discounts, loans in process and loss reserves.
SOURCE MutualFirst Financial, Inc.
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