MutualFirst Announces Record Earnings for the Third Quarter of 2019
MUNCIE, Ind., Oct. 21, 2019 /PRNewswire/ -- MutualFirst Financial, Inc. (NASDAQ: MFSF), the holding company of MutualBank (the "Bank"), announced today record quarterly net income available to common shareholders for the third quarter ended September 30, 2019 was $6.1 million, or $0.71 diluted earnings per common share. This compared to net income available to common shareholders for the same period in 2018 of $5.4 million, or $0.62 diluted earnings per common share. Net income for the third quarter ended September 30, 2019 represents an annualized return on average assets of 1.18% and return on average tangible common equity of 12.65% compared to 1.07% and 12.92%, respectively, for the same period of last year.
Net income available to common shareholders for the nine months ended September 30, 2019 was $17.1 million, or $1.97 diluted earnings per common share, compared to net income available to common shareholders of $13.6 million, or $1.60 diluted earnings per common share for the nine months ended September 30, 2018. Net income for the nine months ended September 30, 2019 represents an annualized return on average assets of 1.10% and return on average tangible common equity of 12.22% compared to 0.95% and 11.34%, respectively, for the same period of last year.
Other financial highlights for the third quarter and first nine months of 2019 include:
- Mortgage production for the third quarter of 2019 increased $31.8 million, or 61% over the third quarter of 2018. Year to date mortgage production increased $51.9 million, or 40% over the same period in 2018.
- For the first nine months of 2019, commercial loans increased $28.5 million, or 5.5% on an annualized basis, and non-residential consumer loans increased $15.2 million, or 7.6% on an annualized basis.
- Non-performing assets to total assets ratio was 0.38% and non-performing loans to total loans ratio was 0.39% as of September 30, 2019 compared to 0.54% and 0.61%, respectively, as of December 31, 2018.
- Tangible common equity to tangible assets ratio was 9.60% and tangible book value per common share was $23.15 as of September 30, 2019 compared to 8.72% and $20.51, respectively, as of December 31, 2018.
- Stock repurchases of 59,742 shares occurred in the third quarter of 2019 and stock repurchases of 136,471 shares occurred in the first nine months of 2019.
"We are pleased with our record earnings and earnings momentum," said David W. Heeter, President and CEO.
Balance Sheet
Assets increased $24.2 million as of September 30, 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 $15.7 million compared to December 31, 2018 due to strong mortgage production as originations have increased in 2019 compared to the same period in 2018. Investment securities increased $12.1 million from December 31, 2018 to September 30, 2019 primarily due to a decline in market interest rates, which increases the market value of the securities. The gross loan portfolio increased by $1.1 million from December 31, 2018 to September 30, 2019 primarily due to increases in commercial loans by $28.5 million, or 5.5% annualized, and non-residential consumer loans by $15.2 million, or 7.6% annualized. These increases were partially offset by a decline from December 31, 2018 to September 30, 2019 in residential mortgage loans of $42.7 million primarily as a result of a sale of $27 million of mortgages in the third quarter of 2019. The loan mix is 48.1% commercial loans, 33.0% residential loans and 18.9% non-residential consumer loans as of September 30, 2018 compared to 46.0%, 36.2% and 17.8%, respectively, as of December 31, 2018.
Deposits increased by $53.9 million in the first nine months of 2019 due to an increase of $36.5 million in core deposits and $17.4 million in certificates of deposit. As of September 30, 2019, core deposits totaled $1.1 billion, or 67.9% of total deposits and certificates of deposit totaled $506 million, or 32.1% of total deposits. The percentage mix of core deposits was unchanged from December 31, 2018.
Allowance for loan losses increased to $13.4 million as of September 30, 2019 compared to $13.3 million as of December 31, 2018. The allowance for loan losses to non-performing loans as of September 30, 2019 was 230% compared to 146% as of December 31, 2018. The allowance for loan losses to total loans as of September 30, 2019 was 0.90% compared to 0.89% as of December 31, 2018. Non-performing loans to total loans at September 30, 2019 were 0.39% compared to 0.61% at December 31, 2018. Non-performing assets to total assets were 0.38% at September 30, 2019 compared to 0.54% at December 31, 2018.
Stockholders' equity was $222.0 million at September 30, 2019, an increase of $19.6 million from December 31, 2018. The increase was primarily due to net income available to common shareholders of $17.1 million during the nine months ended September 30, 2019 and an increase in accumulated other comprehensive income of $11.6 million. These increases were partially offset by common stock dividends of $5.1 million and stock repurchases of 136,471 shares at a cost of $4.3 million for the first nine months of 2019. The Company's tangible book value per common share as of September 30, 2019 was $23.15 compared to $20.51 as of December 31, 2018 and the tangible common equity ratio increased to 9.60% as of September 30, 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 September 30, 2019.
Income Statement
Net interest income before the provision for loan losses decreased $172,000 for the quarter ended September 30, 2019 compared to the same period in 2018. The decrease in net interest income was primarily a result of a decrease of twelve basis points in net interest margin from 3.50% in the third quarter of 2018 compared to 3.38% in the third quarter of 2019. Net interest margin decreased primarily due to an increase in the cost of interest-bearing liabilities of twenty-three basis points compared to an increase in yield on interest-earning assets of five basis points. This decrease was partially offset by an increase of $45.1 million in average interest-earning assets, due primarily to organic loan growth. Net interest margin was also aided in the quarter by approximately six basis points of purchase accounting adjustments in both the third quarter of 2019 and 2018. On a linked quarter basis, net interest income increased by $201,000 primarily due to an increase in net interest margin of five basis points.
Net interest income before the provision for loan losses increased $1.7 million for the nine months ended September 30, 2019 compared to the same period in 2018. The increase in net interest income was primarily due to an increase of $133 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 first nine months of 2018 compared to 3.35% in the same period of 2019. Net interest margin decreased primarily due to an increase in the cost of interest-bearing liabilities of thirty-two basis points compared to an increase in yield on interest-earning assets of thirteen basis points. Net interest margin was aided by purchase accounting adjustments of eight basis points for the nine months ended 2018 compared to five basis points for the same period in 2019.
Provision for loan losses in the third quarter of 2019 was $425,000 compared to $570,000 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 third quarter of 2019 were $449,000, or 0.12% of average total loans on an annualized basis, compared to $290,000, or 0.08% of average total loans on an annualized basis in the third quarter of 2018. On a linked quarter basis, provision for loan losses decreased $50,000.
The provision for loan losses for the first nine months of 2019 was $1.4 million compared to $1.5 million during last year's comparable period. Net charge-offs for the first nine months of 2019 equaled $1.2 million, or 0.11% of loans on an annualized basis, compared to $898,000, or 0.09% in the same period of 2018.
Non-interest income for the third quarter of 2019 was $5.8 million, an increase of $810,000 compared to the third quarter of 2018. This increase was primarily a result of an increase of $926,000 in gain on sale of mortgage loans due to a $26.4 million, or 75.8% increase in sold mortgage loans in the third quarter of 2019 compared to the same period in 2018. This increase was partially offset by a decrease of $297,000 in net gain on sale of investments. On a linked quarter basis, non-interest income increased $145,000 primarily due to an increase of $438,000 in net gain on sale of loans partially offset by a decline of $313,000 in net gain on sale of investments.
Non-interest income for the first nine months of 2019 was $16.6 million, an increase of $2.4 million compared to the first nine months of 2018. An increase of $1.9 million in gain on sale of mortgage loans, an increase of $382,000 in service fee income, and an increase of $310,000 in gain on sale of securities were partially offset by a decrease of $162,000 in other income primarily due to a death benefit received in the first nine months of 2018 not repeated in the first nine months of 2019.
Non-interest expense decreased $91,000 when comparing the third quarter of 2019 with the same period in 2018. Non-interest expense declined partially due to $238,000 of merger-related expenses in the third quarter of 2018 not repeated in the same period of 2019, a reduction of $212,000 in FDIC insurance premiums due to Small Bank Assessment Credits received as a result of the FDIC's Reserve Ratio exceeding 1.38% and a decline of $129,000 in core deposit intangible amortization. These decreases were primarily offset by an increase of $674,000 in salaries and benefits due to increased commission expense for mortgage originators and health insurance expenses. On a linked-quarter basis, non-interest expense decreased $161,000 due to a decrease in FDIC insurance premiums of $212,000 and various other declines, partially offset by an increase of $285,000 in salaries and benefits as described above.
Non-interest expense decreased $29,000 when comparing the first nine months of 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 primarily offset by one-time acquisition-related expenses of $2.2 million in the first nine months of 2018 with no similar activity in the same period of 2019.
The effective tax rate for the third quarter of 2019 was 14.6% compared to 14.4% in the same quarter of 2018. The effective tax rate for the first nine months of 2019 was 14.0% compared to 13.3% for the same period in 2018. The primary reason for the increase is due to greater taxable income as a percentage of total income.
Mr. Heeter concluded, "This quarter continued an improvement in earnings with increased non-interest income and controlled non-interest expense. We believe our earnings momentum can continue as we strive to efficiently drive 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) | ||||||
September 30, | June 30, | December 31, | September 30, | |||
Balance Sheet (Unaudited): | 2019 | 2019 | 2018 | 2018 | ||
(000) | (000) | (000) | (000) | |||
Assets | ||||||
Cash and cash equivalents | $ 31,315 | $ 32,944 | $ 33,414 | $ 31,872 | ||
Interest-bearing time deposits | 4,023 | 4,277 | 4,239 | 4,236 | ||
Investment securities - AFS | 382,976 | 375,948 | 370,875 | 360,747 | ||
Loans held for sale | 19,643 | 38,744 | 3,987 | 7,434 | ||
Loans, gross | 1,497,022 | 1,499,138 | 1,495,943 | 1,474,383 | ||
Allowance for loan losses | (13,411) | (13,435) | (13,281) | (13,009) | ||
Net loans | 1,483,611 | 1,485,703 | 1,482,662 | 1,461,374 | ||
Premises and equipment, net | 24,518 | 24,969 | 25,641 | 25,628 | ||
FHLB of Indianapolis stock | 13,115 | 13,115 | 13,034 | 12,820 | ||
Deferred tax asset, net | 3,344 | 4,142 | 7,744 | 12,151 | ||
Cash value of life insurance | 61,099 | 60,787 | 60,160 | 59,845 | ||
Other real estate owned and repossessed assets | 1,952 | 2,259 | 2,013 | 1,530 | ||
Goodwill | 22,310 | 22,310 | 22,310 | 22,479 | ||
Core deposit and other intangibles | 2,969 | 3,156 | 3,569 | 3,818 | ||
Other assets | 22,675 | 22,565 | 19,665 | 17,237 | ||
Total assets | $ 2,073,550 | $ 2,090,919 | $ 2,049,313 | $ 2,021,171 | ||
Liabilities and Stockholders' Equity | ||||||
Deposits | $ 1,573,088 | $ 1,576,013 | $ 1,519,225 | $ 1,531,198 | ||
FHLB advances | 239,661 | 260,615 | 292,497 | 261,150 | ||
Other borrowings | 17,653 | 17,732 | 17,988 | 17,963 | ||
Other liabilities | 21,170 | 19,701 | 17,240 | 17,150 | ||
Stockholders' equity | 221,978 | 216,858 | 202,363 | 193,710 | ||
Total liabilities and stockholders' equity | $ 2,073,550 | $ 2,090,919 | $ 2,049,313 | $ 2,021,171 | ||
Three Months | Three Months | Three Months | Nine Months | Nine Months | ||
Ended | Ended | Ended | Ended | Ended | ||
September 30, | June 30, | September 30, | September 30, | September 30, | ||
Income Statement (Unaudited): | 2019 | 2019 | 2018 | 2019 | 2018 | |
(000) | (000) | (000) | (000) | (000) | ||
Total interest and dividend income | $ 21,617 | $ 21,518 | $ 20,836 | $ 64,437 | $ 58,204 | |
Total interest expense | 5,372 | 5,474 | 4,419 | 16,106 | 11,595 | |
Net interest income | 16,245 | 16,044 | 16,417 | 48,331 | 46,609 | |
Provision for loan losses | 425 | 475 | 570 | 1,375 | 1,520 | |
Net interest income after provision | ||||||
for loan losses | 15,820 | 15,569 | 15,847 | 46,956 | 45,089 | |
Non-interest income | ||||||
Service fee income | 2,081 | 2,041 | 2,024 | 5,930 | 5,547 | |
Net realized gain on sales of AFS securities | 109 | 422 | 406 | 975 | 666 | |
Commissions | 1,147 | 1,282 | 1,121 | 3,625 | 3,751 | |
Net gain on sale of loans | 1,778 | 1,341 | 853 | 4,149 | 2,224 | |
Net servicing fees | 158 | 139 | 129 | 446 | 433 | |
Increase in cash value of life insurance | 312 | 325 | 313 | 939 | 924 | |
Net gain (loss) on sale of other real estate and repossessed assets | 28 | (29) | 23 | (30) | (34) | |
Other income | 236 | 183 | 170 | 604 | 766 | |
Total non-interest income | 5,849 | 5,704 | 5,039 | 16,638 | 14,277 | |
Non-interest expense | ||||||
Salaries and employee benefits | 8,826 | 8,541 | 8,152 | 25,927 | 24,069 | |
Net occupancy expenses | 1,005 | 996 | 1,087 | 3,045 | 2,979 | |
Equipment expenses | 574 | 584 | 635 | 1,805 | 1,889 | |
Data processing fees | 680 | 639 | 669 | 1,970 | 1,938 | |
Advertising and promotion | 296 | 345 | 416 | 970 | 1,275 | |
ATM and debit card expense | 590 | 598 | 664 | 1,750 | 1,708 | |
Deposit insurance | (3) | 209 | 209 | 413 | 691 | |
Professional fees | 484 | 472 | 460 | 1,364 | 1,714 | |
Software subscriptions and maintenance | 723 | 816 | 702 | 2,308 | 1,987 | |
Other real estate and repossessed assets | 47 | 70 | 51 | 170 | 140 | |
Core deposit intangible amortization | 187 | 200 | 316 | 601 | 854 | |
Other expenses | 1,074 | 1,174 | 1,213 | 3,363 | 4,470 | |
Total non-interest expense | 14,483 | 14,644 | 14,574 | 43,686 | 43,714 | |
Income before income taxes | 7,186 | 6,629 | 6,312 | 19,908 | 15,652 | |
Income tax provision | 1,052 | 878 | 910 | 2,785 | 2,079 | |
Net income available to common shareholders | $ 6,134 | $ 5,751 | $ 5,402 | $ 17,123 | $ 13,573 | |
Pre-tax pre-provision earnings (1) | $ 7,611 | $ 7,104 | $ 6,882 | $ 21,283 | $ 17,172 | |
Average Balances, Net Interest Income, Yield Earned and Rates Paid | ||||||
Three | Three | |||||
months ended | months ended | |||||
9/30/2019 | 9/30/2018 | |||||
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 | $ 24,247 | $ 79 | 1.30% | $ 21,654 | $ 58 | 1.07% |
Mortgage-backed securities: | ||||||
Available-for-sale | 213,006 | 1,336 | 2.51 | 210,518 | 1,433 | 2.72 |
Investment securities: | ||||||
Available-for-sale | 156,313 | 1,268 | 3.24 | 158,671 | 1,299 | 3.27 |
Loans receivable | 1,517,257 | 18,754 | 4.94 | 1,475,178 | 17,902 | 4.85 |
Stock in FHLB of Indianapolis | 13,115 | 180 | 5.49 | 12,820 | 144 | 4.49 |
Total interest-earning assets (2) | 1,923,938 | 21,617 | 4.49 | 1,878,841 | 20,836 | 4.44 |
Non-interest earning assets, net of allowance | ||||||
for loan losses and unrealized gain/loss | 154,170 | 134,096 | ||||
Total assets | $ 2,078,108 | $ 2,012,937 | ||||
Interest-Bearing Liabilities: | ||||||
Demand and NOW accounts | $ 404,589 | 785 | 0.78 | $ 402,393 | 664 | 0.66 |
Savings deposits | 181,116 | 5 | 0.01 | 186,659 | 5 | 0.01 |
Money market accounts | 205,301 | 525 | 1.02 | 190,851 | 253 | 0.53 |
Certificate accounts | 508,095 | 2,645 | 2.08 | 471,061 | 1,970 | 1.67 |
Total deposits | 1,299,101 | 3,960 | 1.22 | 1,250,964 | 2,892 | 0.92 |
Borrowings | 249,262 | 1,412 | 2.27 | 270,940 | 1,527 | 2.25 |
Total interest-bearing liabilities | 1,548,363 | 5,372 | 1.39 | 1,521,904 | 4,419 | 1.16 |
Non-interest bearing deposit accounts | 288,961 | 279,574 | ||||
Other liabilities | 21,484 | 17,788 | ||||
Total liabilities | 1,858,808 | 1,819,266 | ||||
Stockholders' equity | 219,300 | 193,671 | ||||
Total liabilities and stockholders' equity | $ 2,078,108 | $ 2,012,937 | ||||
Net interest earning assets | $ 375,575 | $ 356,937 | ||||
Net interest income | $ 16,245 | $ 16,417 | ||||
Net interest rate spread (4) | 3.11% | 3.27% | ||||
Net yield on average interest-earning assets (4) | 3.38% | 3.50% | ||||
Net yield on average interest-earning assets, tax equivalent (3)(4) | 3.45% | 3.57% | ||||
Average interest-earning assets to | ||||||
average interest-bearing liabilities | 124.26% | 123.45% | ||||
Nine | Nine | |||||
months ended | months ended | |||||
9/30/2019 | 9/30/2019 | |||||
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 | $ 24,072 | $ 235 | 1.30% | $ 22,991 | $ 188 | 1.09% |
Mortgage-backed securities: | ||||||
Available-for-sale | 218,065 | 4,370 | 2.67 | 199,540 | 4,002 | 2.67 |
Investment securities: | ||||||
Available-for-sale | 152,715 | 3,730 | 3.26 | 147,801 | 3,589 | 3.24 |
Loans receivable | 1,513,717 | 55,566 | 4.89 | 1,406,011 | 49,965 | 4.74 |
Stock in FHLB of Indianapolis | 13,106 | 536 | 5.45 | 12,468 | 460 | 4.92 |
Total interest-earning assets (2) | 1,921,675 | 64,437 | 4.47 | 1,788,811 | 58,204 | 4.34 |
Non-interest earning assets, net of allowance | ||||||
for loan losses and unrealized gain/loss | 147,403 | 126,199 | ||||
Total assets | $ 2,069,078 | $ 1,915,010 | ||||
Interest-Bearing Liabilities: | ||||||
Demand and NOW accounts | $ 403,891 | 2,451 | 0.81 | $ 383,120 | 1,683 | 0.59 |
Savings deposits | 184,223 | 14 | 0.01 | 178,605 | 15 | 0.01 |
Money market accounts | 192,169 | 1,267 | 0.88 | 193,928 | 724 | 0.50 |
Certificate accounts | 510,169 | 7,702 | 2.01 | 444,413 | 5,116 | 1.53 |
Total deposits | 1,290,452 | 11,434 | 1.18 | 1,200,066 | 7,538 | 0.84 |
Borrowings | 267,971 | 4,672 | 2.32 | 254,317 | 4,057 | 2.13 |
Total interest-bearing liabilities | 1,558,423 | 16,106 | 1.38 | 1,454,383 | 11,595 | 1.06 |
Non-interest bearing deposit accounts | 277,773 | 262,137 | ||||
Other liabilities | 20,484 | 17,021 | ||||
Total liabilities | 1,856,680 | 1,733,541 | ||||
Stockholders' equity | 212,398 | 181,469 | ||||
Total liabilities and stockholders' equity | $ 2,069,078 | $ 1,915,010 | ||||
Net interest earning assets | $ 363,252 | $ 334,428 | ||||
Net interest income | $ 48,331 | $ 46,609 | ||||
Net interest rate spread (4) | 3.09% | 3.28% | ||||
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% | 3.56% | ||||
Average interest-earning assets to | ||||||
average interest-bearing liabilities | 123.31% | 122.99% | ||||
Three Months | Three Months | Three Months | Nine Months | Nine Months | ||
Ended | Ended | Ended | Ended | Ended | ||
September 30, | June 30, | September 30, | September 30, | September 30, | ||
Selected Financial Ratios and Other Financial Data (Unaudited): | 2019 | 2019 | 2018 | 2019 | 2018 | |
Share and per share data: | ||||||
Average common shares outstanding: | ||||||
Basic | 8,516,038 | 8,602,257 | 8,587,424 | 8,579,514 | 8,327,963 | |
Diluted | 8,629,030 | 8,718,407 | 8,733,691 | 8,697,365 | 8,479,908 | |
Per common share: | ||||||
Basic earnings | $ 0.72 | $ 0.67 | $ 0.63 | $ 2.00 | $ 1.63 | |
Diluted earnings | $ 0.71 | $ 0.66 | $ 0.62 | $ 1.97 | $ 1.60 | |
Dividends | $ 0.20 | $ 0.20 | $ 0.18 | $ 0.60 | $ 0.54 | |
Dividend payout ratio | 28.17% | 30.30% | 29.03% | 30.46% | 33.75% | |
Performance Ratios: | ||||||
Return on average assets (ratio of net | ||||||
income to average total assets)(4) | 1.18% | 1.11% | 1.07% | 1.10% | 0.95% | |
Return on average tangible common equity (ratio of net | ||||||
income to average tangible common equity)(4) | 12.65% | 12.24% | 12.92% | 12.22% | 11.34% | |
Interest rate spread information: | ||||||
Average during the period(4) | 3.11% | 3.06% | 3.27% | 3.09% | 3.28% | |
Net interest margin(4)(5) | 3.38% | 3.33% | 3.50% | 3.35% | 3.47% | |
Efficiency Ratio | 65.55% | 67.33% | 67.93% | 67.24% | 71.80% | |
Ratio of average interest-earning | ||||||
assets to average interest-bearing | ||||||
liabilities | 124.26% | 123.20% | 123.45% | 123.31% | 122.99% | |
Allowance for loan losses: | ||||||
Balance beginning of period | $ 13,435 | $ 13,364 | $ 12,729 | $ 13,281 | $ 12,387 | |
Net charge-offs (recoveries): | ||||||
Real Estate: | ||||||
Commercial | 56 | 33 | 0 | 140 | 53 | |
Commercial construction and development | - | - | 0 | - | 0 | |
Consumer closed end first mortgage | 41 | 31 | 65 | 111 | 133 | |
Consumer open end and junior liens | - | - | 16 | - | 36 | |
Total real estate loans | 97 | 64 | 81 | 251 | 222 | |
Other loans: | ||||||
Auto | 37 | 40 | 47 | 166 | 36 | |
Boat/RV | 232 | 241 | 65 | 644 | 381 | |
Other | 74 | 59 | 72 | 175 | 160 | |
Commercial and industrial | 9 | - | 25 | 9 | 99 | |
Total other | 352 | 340 | 209 | 994 | 676 | |
Net charge-offs (recoveries) | 449 | 404 | 290 | 1,245 | 898 | |
Provision for loan losses | 425 | 475 | 570 | 1,375 | 1,520 | |
Balance end of period | $ 13,411 | $ 13,435 | $ 13,009 | $ 13,411 | $ 13,009 | |
Net loan charge-offs to average loans (4) | 0.12% | 0.11% | 0.08% | 0.11% | 0.09% | |
September 30, | June 30, | December 31, | September 30, | |||
2019 | 2019 | 2018 | 2018 | |||
Total shares outstanding | 8,498,491 | 8,551,233 | 8,603,462 | 8,587,424 | ||
Tangible book value per common share | $ 23.15 | $ 22.38 | $ 20.51 | $ 19.50 | ||
Tangible common equity to tangible assets | 9.60% | 9.27% | 8.72% | 8.39% | ||
Nonperforming assets (000's) | ||||||
Non-accrual loans | ||||||
Real Estate: | ||||||
Commercial | $ 881 | $ 848 | $ 4,782 | $ 1,759 | ||
Commercial construction and development | - | - | 62 | 52 | ||
Consumer closed end first mortgage | 3,574 | 3,984 | 2,777 | 2,503 | ||
Consumer open end and junior liens | 184 | 170 | 273 | 205 | ||
Total real estate loans | 4,639 | 5,002 | 7,894 | 4,519 | ||
Other loans: | ||||||
Auto | 185 | 50 | 88 | 40 | ||
Boat/RV | 531 | 616 | 470 | 696 | ||
Other | 16 | 27 | 46 | 48 | ||
Commercial and industrial | 323 | 250 | 91 | 416 | ||
Total other | 1,055 | 943 | 695 | 1,200 | ||
Total non-accrual loans | 5,694 | 5,945 | 8,589 | 5,719 | ||
Accruing loans past due 90 days or more | 148 | - | 517 | 0 | ||
Total nonperforming loans | 5,842 | 5,945 | 9,106 | 5,719 | ||
Real estate owned | 1,283 | 1,731 | 1,223 | 1,195 | ||
Other repossessed assets | 669 | 528 | 790 | 335 | ||
Total nonperforming assets | $ 7,794 | $ 8,204 | $ 11,119 | $ 7,249 | ||
Performing restructured loans (6) | $ 1,401 | $ 1,148 | $ 2,571 | $ 2,148 | ||
Asset Quality Ratios: | ||||||
Non-performing assets to total assets | 0.38% | 0.39% | 0.54% | 0.36% | ||
Non-performing loans to total loans | 0.39% | 0.40% | 0.61% | 0.39% | ||
Allowance for loan losses to non-performing loans | 230% | 226% | 146% | 227% | ||
Allowance for loan losses to loans receivable | 0.90% | 0.90% | 0.89% | 0.88% | ||
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 | Nine Months | Nine Months | ||
Ended | Ended | Ended | Ended | Ended | ||
September 30, | June 30, | September 30, | September 30, | September 30, | ||
Non-GAAP Measurements | 2019 | 2019 | 2018 | 2019 | 2018 | |
Total stockholders' equity (GAAP) | $ 221,978 | $ 216,858 | $ 193,710 | $ 221,978 | $ 193,710 | |
Less: Intangible assets | 25,279 | 25,466 | 26,297 | 25,279 | 26,297 | |
Tangible common equity (non-GAAP) | $ 196,699 | $ 191,392 | $ 167,413 | $ 196,699 | $ 167,413 | |
Total assets (GAAP) | $ 2,073,550 | $ 2,090,919 | $ 2,021,171 | $ 2,073,550 | $ 2,021,171 | |
Less: Intangible assets | 25,279 | 25,466 | 26,297 | 25,279 | 26,297 | |
Tangible assets (non-GAAP) | $ 2,048,271 | $ 2,065,453 | $ 1,994,874 | $ 2,048,271 | $ 1,994,874 | |
Tangible common equity to tangible assets (non-GAAP) | 9.60% | 9.27% | 8.39% | 9.60% | 8.39% | |
Book value per common share (GAAP) | $ 26.12 | $ 25.36 | $ 22.56 | $ 26.12 | $ 22.56 | |
Less: Effect of intangible assets | 2.97 | 2.98 | 3.06 | 2.97 | 3.06 | |
Tangible book value per common share | $ 23.15 | $ 22.38 | $ 19.50 | $ 23.15 | $ 19.50 | |
Return on average stockholders' equity (GAAP) | 11.19% | 10.78% | 11.16% | 10.75% | 9.97% | |
Add: Effect of intangible assets | 1.46% | 1.46% | 1.76% | 1.47% | 1.37% | |
Return on average tangible common equity (non-GAAP) | 12.65% | 12.24% | 12.92% | 12.22% | 11.34% | |
Total tax free interest income (GAAP) | ||||||
Loans receivable | $ 98 | $ 101 | $ 106 | $ 302 | $ 314 | |
Investment securities | 1,236 | 1,184 | 1,185 | 3,628 | 3,268 | |
Total tax free interest income | $ 1,334 | $ 1,285 | $ 1,291 | $ 3,930 | $ 3,582 | |
Total tax free interest income, gross (at 21%) | $ 1,689 | $ 1,627 | $ 1,634 | $ 4,975 | $ 4,534 | |
Net interest margin, tax equivalent (non-GAAP) | ||||||
Net interest income (GAAP) | $ 16,245 | $ 16,044 | $ 16,417 | $ 48,331 | $ 46,609 | |
Add: Tax effect tax free interest income (3) | 355 | 342 | 343 | 1,045 | 952 | |
Net interest income (non-GAAP) | 16,600 | 16,386 | 16,760 | 49,376 | 47,561 | |
Divided by: Average interest-earning assets | 1,923,938 | 1,928,214 | 1,878,841 | 1,921,675 | 1,788,811 | |
Net interest margin, tax equivalent | 3.45% | 3.40% | 3.57% | 3.43% | 3.55% | |
One-time Universal merger related expenses | ||||||
Non-tax deductible | $ - | $ - | $ - | $ - | $ 220 | |
Tax deductible | - | - | 238 | - | 2,010 | |
Total one-time merger related expenses | $ - | $ - | $ 238 | $ - | $ 2,230 | |
Subtract tax benefit | - | - | 50 | - | 422 | |
Net one-time merger related expenses | $ - | $ - | $ 188 | $ - | $ 1,808 | |
Net income (GAAP) | - | - | 5,402 | - | 13,573 | |
Net income excluding one-time merger expenses (non-GAAP) | $ - | $ - | $ 5,590 | $ - | $ 15,381 | |
Adjusted diluted earnings per share | ||||||
Net income excluding one-time merger expenses (non-GAAP) | $ - | $ - | $ 5,590 | $ - | $ 15,381 | |
Average diluted shares | - | - | 8,733,691 | - | 8,479,908 | |
Adjusted diluted earnings per share (non-GAAP) | $ - | $ - | $ 0.64 | $ - | $ 1.81 | |
Adjusted return on assets | ||||||
Net income excluding one-time merger expenses (non-GAAP) | $ - | $ - | $ 5,590 | $ - | $ 15,381 | |
Average assets | - | - | 2,012,937 | - | 1,915,010 | |
Adjusted return on average assets (non-GAAP) | - | - | 1.11% | - | 1.07% | |
Adjusted return on tangible common equity | ||||||
Net income excluding one-time merger expenses (non-GAAP) | $ - | $ - | $ 5,590 | $ - | $ 15,381 | |
Average tangible common equity | - | - | 167,207 | - | 159,570 | |
Adjusted return on average tangible common equity (non-GAAP) | - | - | 13.37% | - | 12.85% | |
Ratio Summary: | ||||||
Return on average equity | 11.19% | 10.78% | 11.16% | 10.75% | 9.97% | |
Return on average tangible common equity | 12.65% | 12.24% | 12.92% | 12.22% | 11.34% | |
Return on average assets | 1.18% | 1.11% | 1.07% | 1.10% | 0.95% | |
Tangible common equity to tangible assets | 9.60% | 9.27% | 8.39% | 9.60% | 8.39% | |
Net interest margin, tax equivalent | 3.45% | 3.40% | 3.57% | 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 and nine 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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