MutualFirst Financial Announces Second Quarter Earnings
MUNCIE, Ind., July 23, 2019 /PRNewswire/ -- MutualFirst Financial, Inc. (NASDAQ: MFSF), the holding company of MutualBank (the "Bank"), announced today net income available to common shareholders for the second quarter ended June 30, 2019 was $5.8 million, or $0.66 diluted earnings per common share. This compares to net income available to common shareholders for the same period in 2018 of $4.2 million, or $0.48 diluted earnings per common share. The net income for the second quarter ended June 30, 2019 represents an annualized return on average assets of 1.11% and return on average tangible common equity of 12.24% compared to 0.83% and 10.46%, respectively, for the same period of last year.
Net income available to common shareholders for the first six months of 2019 was $11.0 million, or $1.26 diluted earnings per common share. This compares to net income available to common shareholders for the same period in 2018 of $8.2 million, or $0.98 diluted earnings per common share. The net income for the six months ended June 30, 2019 represents an annualized return on average assets of 1.06% and return on average tangible common equity of 11.99% compared to 0.88% and 10.49%, respectively, for the same period of last year.
Other financial highlights for the second quarter and first six months of 2019 include:
- Loans held for sale increased by $34.8 million as of June 30, 2019 compared to December 31, 2018. The increase was a result of $27 million of portfolio mortgage loans being transferred to held for sale along with increased mortgage banking activity.
- Commercial loans increased $20.2 million, or 11.6% on an annualized basis in the second quarter of 2019 and $26.5 million, or 7.7% on an annualized basis in the first half of 2019.
- Non-residential consumer loans increased $7.1 million, or 10.3% on an annualized basis in the second quarter of 2019 and $17.2 million, or 12.9% on an annualized basis in the first half of 2019.
- Deposits increased $16.2 million, or 4.2% on an annualized basis in the second quarter of 2019 and $56.8 million, or 7.5% on an annualized basis in the first half of 2019.
- Stockholders' equity increased by $14.5 million in the first half of 2019 due to net income of $11.0 million and a net increase in accumulated other comprehensive income of $9.1 million. This increase was partially offset by stock repurchases of 76,729 shares at an average price of $30.65 and common stock dividends of $3.4 million.
"We are pleased with the first half of 2019 and our continued earnings momentum," said David W. Heeter, President and CEO.
Balance Sheet
Assets increased $42 million as of June 30, 2019 compared to December 31, 2018 primarily due to growth in the overall loan portfolio. Loans held for sale increased $34.8 million as $27 million was transferred from portfolio mortgage loans to take advantage of a reduction in market rates and the ability to remove certain low rate mortgage loans from the balance sheet. The gross loan portfolio, not including loans held for sale, increased by $3.2 million primarily due to an increase in commercial loans of $26.5 million, or 7.7% on an annualized basis and an increase of non-residential consumer loans of $17.2 million, or 12.9% on an annualized basis in the first half of 2019. These increases were offset by a decrease in residential loans of $40.6 million primarily due to the transfer of portfolio mortgage loans to held for sale discussed above. The mix of loans in our portfolio as of June 30, 2019 compared to December 31, 2018 shifted toward our desired strategic objective. Commercial loans increased to 48.0% compared to 46.0%, residential loans decreased to 33.1% compared to 36.2% and non-residential consumer loans increased to 18.9% compared to 17.8%.
Deposits increased by $57 million as of June 30, 2019 compared to December 31, 2018. As of June 30, 2019, core deposits totaled $1.1 billion, or 67.2% of total deposits and certificates of deposit totaled $517 million, or 32.8% of total deposits. This is compared to a mix of core deposits of 67.9% and certificates of deposit of 32.1% as of December 31, 2018.
Allowance for loan losses increased to $13.4 million as of June 30, 2019 compared to $13.3 million as of December 31, 2018. The allowance for loan losses to non-performing loans as of June 30, 2019 was 226% compared to 146% as of December 31, 2018. The allowance for loan losses to total loans as of June 30, 2019 was 0.90% compared to 0.89% as of December 31, 2018. Non-performing loans to total loans at June 30, 2019 were 0.40% compared to 0.61% at December 31, 2018. Non-performing assets to total assets were 0.39% at June 30, 2019 compared to 0.54% at December 31, 2018.
Stockholders' equity was $216.9 million at June 30, 2019, an increase of $14.5 million from December 31, 2018. The increases included net income available to common shareholders of $11.0 million and a net increase in accumulated other comprehensive income of $9.1 million due to market value changes in the investment portfolio. These increases were partially offset by common stock cash dividends paid of $3.4 million during the first half of 2019 and stock repurchases of 76,729 shares for $2.4 million. The Company's tangible book value per common share as of June 30, 2019 increased to $22.38 compared to $20.51 as of December 31, 2018 and the tangible common equity ratio increased to 9.27% as of June 30, 2019 compared to 8.72% as of December 31, 2018.
Income Statement
Net interest income before the provision for loan losses decreased $564,000 for the quarter ended June 30, 2019 compared to the same period in 2018. The decrease in net interest income was a result of a decline in net interest margin of twenty-three basis points that was partially offset by an increase of $61.4 million in average interest earning assets, due primarily to organic loan growth. The decrease in net interest margin is a result of the yield on interest earning assets increasing four basis points which was offset by an increase in the cost of interest-bearing liabilities of thirty-four basis points. Purchase accounting accretion decreased eight basis points in the second quarter of 2019 compared to the second quarter of 2018. On a linked-quarter basis, net interest income increased $2,000 as average interest earning assets increased $15.3 million primarily offset by a two basis point decrease in net interest margin. The decrease in net interest margin is a result of the yield on interest earning assets increasing one basis point being offset by an increase in the cost of interest-bearing liabilities of five basis points.
Net interest income before the provision for loan losses increased $1.9 million for the first half of 2019 compared to the same period in 2018. The increase was a result of an increase of $176.7 million in average interest earning assets due primarily to the acquisition of Universal Bancorp in the first quarter of 2018 and organic loan growth. This increase was partially offset by the net interest margin decreasing to 3.34% in the first half of 2019 compared to 3.46% in the first half of 2018. The decrease in net interest margin is a result of the yield on interest earning assets increasing seventeen basis points being offset by an increase in the cost of interest-bearing liabilities of thirty-six basis points.
Provision for loan losses in the second quarter of 2019 was $475,000, a $25,000 decrease from last year's comparable period. Provision for loan losses was calculated based on management's ongoing evaluation of the adequacy of the allowance for loan losses, which is partially attributable to an increasing organic loan portfolio and net charge offs of $404,000, or 0.11% of total average loans on an annualized basis, in the second quarter of 2019 compared to net charge offs of $308,000, or 0.08% of total average loans on an annualized basis, in the second quarter of 2018. Heeter commented, "Credit quality remains exceptionally strong."
The provision for loan losses for the first half of 2019 was $950,000 the same as last year's comparable period. Net charge-offs for the first half of 2019 equaled $796,000, or 0.11% of loans on an annualized basis compared to $608,000, or 0.09% in the same period of 2018.
Non-interest income for the second quarter of 2019 was $5.7 million, an increase of $900,000 compared to the second quarter of 2018. Increases in non-interest income included an increase of $605,000 in gain on sale of mortgage loans due to increased mortgage banking activity, an increase of $316,000 in gain on sale of securities and an increase of $82,000 in service fee income on deposit accounts aided by increases in interchange fee income. On a linked-quarter basis, non-interest income increased $619,000 primarily due to increases of $311,000 in gain on sale of loans, $233,000 in service fee income on deposit accounts and $86,000 in commission income.
Non-interest income for the first half of 2019 was $10.8 million, an increase of $1.5 million compared to the first half of 2018. An increase of $1.0 million in gain on sale of mortgage loans, an increase of $606,000 in gain on sale of securities and an increase of $326,000 in service fee income were partially offset by a decrease of $229,000 in other income primarily due to a death benefit received in the first half of 2018 not repeated in the first half of 2019.
Non-interest expense decreased $1.5 million when comparing the second quarter of 2019 with the same period in 2018. The decrease was primarily due to expenses as a result of the acquisition and integration of Universal, which included severance, integration and termination expenses of $1.4 million in the second quarter of 2018 with no similar activity in the same period of 2019 along with cost saves generated from the acquisition. On a linked-quarter basis, non-interest expense increased $85,000 due to general expense increases.
Non-interest expense increased $63,000 when comparing the first half of 2019 with the same period in 2018. Non-interest expense was impacted by general expense increases due to timing of the acquisition in 2018 primarily offset by one-time acquisition related expenses of $2.0 million in the first half of 2018 with no similar activity in the same period of 2019.
The effective tax rate for the second quarter of 2019 was 13.2% compared to 12.3% in the same quarter of 2018. The effective tax rate for the first six months of 2019 was 13.6% compared to 12.5% for the same period in 2018. The primary reason for the increase is due to greater taxable income as a percentage of total income.
"We believe our earnings momentum will continue as we strive to efficiently drive shareholder value," Mr. Heeter concluded.
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 Global 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) | ||||||
June 30, | March 31, | December 31, | June 30, | |||
Balance Sheet (Unaudited): | 2019 | 2019 | 2018 | 2018 | ||
(000) | (000) | (000) | (000) | |||
Assets | ||||||
Cash and cash equivalents | $ 32,944 | $ 31,350 | $ 33,414 | $ 33,005 | ||
Interest-bearing time deposits | 4,277 | 4,311 | 4,239 | 4,482 | ||
Investment securities - AFS | 375,948 | 373,937 | 370,875 | 362,162 | ||
Loans held for sale | 38,744 | 8,702 | 3,987 | 3,927 | ||
Loans, gross | 1,499,138 | 1,504,093 | 1,495,943 | 1,464,735 | ||
Allowance for loan losses | (13,435) | (13,364) | (13,281) | (12,729) | ||
Net loans | 1,485,703 | 1,490,729 | 1,482,662 | 1,452,006 | ||
Premises and equipment, net | 24,969 | 25,188 | 25,641 | 25,984 | ||
FHLB of Indianapolis stock | 13,115 | 13,115 | 13,034 | 12,820 | ||
Deferred tax asset, net | 4,142 | 6,674 | 7,744 | 11,492 | ||
Cash value of life insurance | 60,787 | 60,462 | 60,160 | 59,531 | ||
Other real estate owned and repossessed assets | 2,259 | 1,752 | 2,013 | 1,942 | ||
Goodwill | 22,310 | 22,310 | 22,310 | 22,479 | ||
Core deposit and other intangibles | 3,156 | 3,356 | 3,569 | 4,134 | ||
Other assets | 22,565 | 22,255 | 19,665 | 17,388 | ||
Total assets | $ 2,090,919 | $ 2,064,141 | $ 2,049,313 | $ 2,011,352 | ||
Liabilities and Stockholders' Equity | ||||||
Deposits | $ 1,576,013 | $ 1,559,771 | $ 1,519,225 | $ 1,520,234 | ||
FHLB advances | 260,615 | 256,236 | 292,497 | 263,367 | ||
Other borrowings | 17,732 | 21,223 | 17,988 | 18,037 | ||
Other liabilities | 19,701 | 15,747 | 17,240 | 17,026 | ||
Stockholders' equity | 216,858 | 211,164 | 202,363 | 192,688 | ||
Total liabilities and stockholders' equity | $ 2,090,919 | $ 2,064,141 | $ 2,049,313 | $ 2,011,352 | ||
Three Months | Three Months | Three Months | Six Months | Six Months | ||
Ended | Ended | Ended | Ended | Ended | ||
June 30, | March 31, | June 30, | June 30, | June 30, | ||
Income Statement (Unaudited): | 2019 | 2019 | 2018 | 2019 | 2018 | |
(000) | (000) | (000) | (000) | (000) | ||
Total interest and dividend income | $ 21,518 | $ 21,302 | $ 20,621 | $ 42,820 | $ 37,369 | |
Total interest expense | 5,474 | 5,260 | 4,013 | 10,734 | 7,177 | |
Net interest income | 16,044 | 16,042 | 16,608 | 32,086 | 30,192 | |
Provision for loan losses | 475 | 475 | 500 | 950 | 950 | |
Net interest income after provision | ||||||
for loan losses | 15,569 | 15,567 | 16,108 | 31,136 | 29,242 | |
Non-interest income | ||||||
Service fee income | 2,041 | 1,808 | 1,959 | 3,849 | 3,523 | |
Net realized gain on sales of AFS securities | 422 | 444 | 106 | 866 | 260 | |
Commissions | 1,282 | 1,196 | 1,368 | 2,478 | 2,630 | |
Net gain on sale of loans | 1,341 | 1,030 | 736 | 2,371 | 1,371 | |
Net servicing fees | 139 | 149 | 154 | 288 | 304 | |
Increase in cash value of life insurance | 325 | 302 | 322 | 627 | 611 | |
Net gain (loss) on sale of other real estate and repossessed assets | (29) | (29) | 11 | (58) | (57) | |
Other income | 183 | 185 | 148 | 368 | 597 | |
Total non-interest income | 5,704 | 5,085 | 4,804 | 10,789 | 9,239 | |
Non-interest expense | ||||||
Salaries and employee benefits | 8,541 | 8,560 | 8,628 | 17,101 | 15,917 | |
Net occupancy expenses | 996 | 1,044 | 995 | 2,040 | 1,892 | |
Equipment expenses | 584 | 647 | 698 | 1,231 | 1,254 | |
Data processing fees | 639 | 651 | 676 | 1,290 | 1,269 | |
Advertising and promotion | 345 | 329 | 499 | 674 | 859 | |
ATM and debit card expense | 598 | 562 | 573 | 1,160 | 1,044 | |
Deposit insurance | 209 | 207 | 225 | 416 | 482 | |
Professional fees | 472 | 408 | 472 | 880 | 1,254 | |
Software subscriptions and maintenance | 816 | 769 | 691 | 1,585 | 1,285 | |
Other real estate and repossessed assets | 70 | 53 | 44 | 123 | 89 | |
Core deposit intangible amortization | 200 | 214 | 375 | 414 | 538 | |
Other expenses | 1,174 | 1,115 | 2,287 | 2,289 | 3,257 | |
Total non-interest expense | 14,644 | 14,559 | 16,163 | 29,203 | 29,140 | |
Income before income taxes | 6,629 | 6,093 | 4,749 | 12,722 | 9,341 | |
Income tax provision | 878 | 855 | 584 | 1,733 | 1,169 | |
Net income available to common shareholders | $ 5,751 | $ 5,238 | $ 4,165 | $ 10,989 | $ 8,172 | |
Pre-tax pre-provision earnings (1) | $ 7,104 | $ 6,568 | $ 5,249 | $ 13,672 | $ 10,291 |
Average Balances, Net Interest Income, Yield Earned and Rates Paid | ||||||
Three | Three | |||||
months ended | months ended | |||||
6/30/2019 | 6/30/2018 | |||||
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 | $ 23,281 | $ 68 | 1.17% | $ 25,632 | $ 63 | 0.98% |
Mortgage-backed securities: | ||||||
Available-for-sale | 223,113 | 1,512 | 2.71 | 212,150 | 1,442 | 2.72 |
Investment securities: | ||||||
Available-for-sale | 149,239 | 1,218 | 3.26 | 153,875 | 1,251 | 3.25 |
Loans receivable | 1,519,466 | 18,542 | 4.88 | 1,462,335 | 17,739 | 4.85 |
Stock in FHLB of Indianapolis | 13,115 | 178 | 5.43 | 12,820 | 126 | 3.93 |
Total interest-earning assets (2) | 1,928,214 | 21,518 | 4.46 | 1,866,812 | 20,621 | 4.42 |
Non-interest earning assets, net of allowance | ||||||
for loan losses and unrealized gain/loss | 147,814 | 135,591 | ||||
Total assets | $ 2,076,028 | $ 2,002,403 | ||||
Interest-Bearing Liabilities: | ||||||
Demand and NOW accounts | $ 407,476 | 882 | 0.87 | $ 404,823 | 582 | 0.58 |
Savings deposits | 187,073 | 5 | 0.01 | 191,637 | 5 | 0.01 |
Money market accounts | 189,341 | 411 | 0.87 | 207,290 | 251 | 0.48 |
Certificate accounts | 513,837 | 2,603 | 2.03 | 456,284 | 1,703 | 1.49 |
Total deposits | 1,297,727 | 3,901 | 1.20 | 1,260,034 | 2,541 | 0.81 |
Borrowings | 267,385 | 1,573 | 2.35 | 257,066 | 1,472 | 2.29 |
Total interest-bearing liabilities | 1,565,112 | 5,474 | 1.40 | 1,517,100 | 4,013 | 1.06 |
Non-interest bearing deposit accounts | 276,577 | 280,791 | ||||
Other liabilities | 20,889 | 17,230 | ||||
Total liabilities | 1,862,578 | 1,815,121 | ||||
Stockholders' equity | 213,450 | 187,282 | ||||
Total liabilities and stockholders' equity | $ 2,076,028 | $ 2,002,403 | ||||
Net interest earning assets | $ 363,102 | $ 349,712 | ||||
Net interest income | $ 16,044 | $ 16,608 | ||||
Net interest rate spread (4) | 3.06% | 3.36% | ||||
Net yield on average interest-earning assets (4) | 3.33% | 3.56% | ||||
Net yield on average interest-earning assets, tax equivalent (3)(4) | 3.40% | 3.63% | ||||
Average interest-earning assets to | ||||||
average interest-bearing liabilities | 123.20% | 123.05% | ||||
Six | Six | |||||
months ended | months ended | |||||
6/30/2019 | 6/30/2018 | |||||
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 | $ 23,985 | $ 156 | 1.30% | $ 23,659 | $ 130 | 1.10% |
Mortgage-backed securities: | ||||||
Available-for-sale | 220,595 | 3,034 | 2.75 | 194,051 | 2,569 | 2.65 |
Investment securities: | ||||||
Available-for-sale | 150,915 | 2,462 | 3.26 | 142,366 | 2,290 | 3.22 |
Loans receivable | 1,511,948 | 36,812 | 4.87 | 1,371,428 | 32,063 | 4.68 |
Stock in FHLB of Indianapolis | 13,101 | 356 | 5.43 | 12,293 | 317 | 5.16 |
Total interest-earning assets (2) | 1,920,544 | 42,820 | 4.46 | 1,743,797 | 37,369 | 4.29 |
Non-interest earning assets, net of allowance | ||||||
for loan losses and unrealized gain/loss | 144,020 | 122,249 | ||||
Total assets | $ 2,064,564 | $ 1,866,046 | ||||
Interest-Bearing Liabilities: | ||||||
Demand and NOW accounts | $ 403,639 | 1,666 | 0.83 | $ 373,483 | 1,019 | 0.55 |
Savings deposits | 185,777 | 9 | 0.01 | 174,578 | 10 | 0.01 |
Money market accounts | 185,603 | 742 | 0.80 | 195,467 | 471 | 0.48 |
Certificate accounts | 511,206 | 5,057 | 1.98 | 431,089 | 3,147 | 1.46 |
Total deposits | 1,286,225 | 7,474 | 1.16 | 1,174,617 | 4,647 | 0.79 |
Borrowings | 277,325 | 3,260 | 2.35 | 246,006 | 2,530 | 2.06 |
Total interest-bearing liabilities | 1,563,550 | 10,734 | 1.37 | 1,420,623 | 7,177 | 1.01 |
Non-interest bearing deposit accounts | 272,081 | 253,418 | ||||
Other liabilities | 19,985 | 16,637 | ||||
Total liabilities | 1,855,616 | 1,690,678 | ||||
Stockholders' equity | 208,948 | 175,368 | ||||
Total liabilities and stockholders' equity | $ 2,064,564 | $ 1,866,046 | ||||
Net interest earning assets | $ 356,994 | $ 323,174 | ||||
Net interest income | $ 32,086 | $ 30,192 | ||||
Net interest rate spread (4) | 3.09% | 3.28% | ||||
Net yield on average interest-earning assets (4) | 3.34% | 3.46% | ||||
Net yield on average interest-earning assets, tax equivalent (3)(4) | 3.41% | 3.53% | ||||
Average interest-earning assets to | ||||||
average interest-bearing liabilities | 122.83% | 122.75% |
Three Months | Three Months | Three Months | Six Months | Six Months | ||
Ended | Ended | Ended | Ended | Ended | ||
June 30, | March 31, | June 30, | June 30, | June 30, | ||
Selected Financial Ratios and Other Financial Data (Unaudited): | 2019 | 2019 | 2018 | 2019 | 2018 | |
Share and per share data: | ||||||
Average common shares outstanding: | ||||||
Basic | 8,602,257 | 8,621,406 | 8,577,017 | 8,611,779 | 8,196,083 | |
Diluted | 8,718,459 | 8,745,821 | 8,731,611 | 8,732,087 | 8,350,868 | |
Per common share: | ||||||
Basic earnings | $ 0.67 | $ 0.61 | $ 0.49 | $ 1.28 | $ 1.00 | |
Diluted earnings | $ 0.66 | $ 0.60 | $ 0.48 | $ 1.26 | $ 0.98 | |
Dividends | $ 0.20 | $ 0.20 | $ 0.18 | $ 0.40 | $ 0.36 | |
Dividend payout ratio | 30.30% | 33.33% | 37.50% | 31.75% | 36.73% | |
Performance Ratios: | ||||||
Return on average assets (ratio of net | ||||||
income to average total assets)(4) | 1.11% | 1.02% | 0.83% | 1.06% | 0.88% | |
Return on average tangible common equity (ratio of net | ||||||
income to average tangible common equity)(4) | 12.24% | 11.73% | 10.46% | 11.99% | 10.49% | |
Interest rate spread information: | ||||||
Average during the period(4) | 3.06% | 3.11% | 3.36% | 3.09% | 3.28% | |
Net interest margin(4)(5) | 3.33% | 3.35% | 3.56% | 3.34% | 3.46% | |
Efficiency Ratio | 67.33% | 68.91% | 75.49% | 68.11% | 73.90% | |
Ratio of average interest-earning | ||||||
assets to average interest-bearing | ||||||
liabilities | 123.20% | 122.47% | 123.05% | 122.83% | 122.75% | |
Allowance for loan losses: | ||||||
Balance beginning of period | $ 13,364 | $ 13,281 | $ 12,537 | $ 13,281 | $ 12,387 | |
Net charge-offs (recoveries): | ||||||
Real Estate: | ||||||
Commercial | 33 | 51 | - | 84 | 53 | |
Commercial construction and development | - | - | - | - | - | |
Consumer closed end first mortgage | 31 | 40 | 56 | 71 | 68 | |
Consumer open end and junior liens | - | - | 20 | - | 20 | |
Total real estate loans | 64 | 91 | 76 | 155 | 141 | |
Other loans: | ||||||
Auto | 40 | 88 | (1) | 128 | (11) | |
Boat/RV | 241 | 171 | 185 | 412 | 316 | |
Other | 59 | 42 | 58 | 101 | 88 | |
Commercial and industrial | - | - | (10) | - | 74 | |
Total other | 340 | 301 | 232 | 641 | 467 | |
Net charge-offs (recoveries) | 404 | 392 | 308 | 796 | 608 | |
Provision for loan losses | 475 | 475 | 500 | 950 | 950 | |
Balance end of period | $ 13,435 | $ 13,364 | $ 12,729 | $ 13,435 | $ 12,729 | |
Net loan charge-offs to average loans (4) | 0.11% | 0.10% | 0.08% | 0.11% | 0.09% | |
June 30, | March 31, | December 31, | June 30, | |||
2019 | 2019 | 2018 | 2018 | |||
Total shares outstanding | 8,551,233 | 8,624,462 | 8,603,462 | 8,587,424 | ||
Tangible book value per common share | $ 22.38 | $ 21.51 | $ 20.51 | $ 19.34 | ||
Tangible common equity to tangible assets | 9.27% | 9.10% | 8.72% | 8.37% | ||
Nonperforming assets (000's) | ||||||
Non-accrual loans | ||||||
Real Estate: | ||||||
Commercial | $ 848 | $ 1,281 | $ 4,782 | $ 1,753 | ||
Commercial construction and development | - | - | 62 | - | ||
Consumer closed end first mortgage | 3,984 | 3,759 | 2,777 | 2,661 | ||
Consumer open end and junior liens | 170 | 212 | 273 | 251 | ||
Total real estate loans | 5,002 | 5,252 | 7,894 | 4,665 | ||
Other loans: | ||||||
Auto | 50 | 64 | 88 | 31 | ||
Boat/RV | 616 | 646 | 470 | 290 | ||
Other | 27 | 44 | 46 | 92 | ||
Commercial and industrial | 250 | 267 | 91 | 183 | ||
Total other | 943 | 1,021 | 695 | 596 | ||
Total non-accrual loans | 5,945 | 6,273 | 8,589 | 5,261 | ||
Accruing loans past due 90 days or more | - | 206 | 517 | 15 | ||
Total nonperforming loans | 5,945 | 6,479 | 9,106 | 5,276 | ||
Real estate owned | 1,731 | 1,141 | 1,223 | 1,584 | ||
Other repossessed assets | 528 | 611 | 790 | 358 | ||
Total nonperforming assets | $ 8,204 | $ 8,231 | $ 11,119 | $ 7,218 | ||
Performing restructured loans (6) | $ 1,148 | $ 1,087 | $ 2,571 | $ 1,525 | ||
Asset Quality Ratios: | ||||||
Non-performing assets to total assets | 0.39% | 0.40% | 0.54% | 0.36% | ||
Non-performing loans to total loans | 0.40% | 0.43% | 0.61% | 0.36% | ||
Allowance for loan losses to non-performing loans | 226% | 206% | 146% | 241% | ||
Allowance for loan losses to loans receivable | 0.90% | 0.89% | 0.89% | 0.87% |
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 | Six Months | Six Months | ||
Ended | Ended | Ended | Ended | Ended | ||
June 30, | March 31, | June 30, | June 30, | June 30, | ||
Non-GAAP Measurements (7) | 2019 | 2019 | 2018 | 2019 | 2018 | |
Total stockholders' equity (GAAP) | $ 216,858 | $ 211,164 | $ 192,688 | $ 216,858 | $ 192,688 | |
Less: Intangible assets | 25,466 | 25,666 | 26,613 | 25,466 | 26,613 | |
Tangible common equity (non-GAAP) | $ 191,392 | $ 185,498 | $ 166,075 | $ 191,392 | $ 166,075 | |
Total assets (GAAP) | $ 2,090,919 | $ 2,064,141 | $ 2,011,352 | $ 2,090,919 | $ 2,011,352 | |
Less: Intangible assets | 25,466 | 25,666 | 26,613 | 25,466 | 26,613 | |
Tangible assets (non-GAAP) | $ 2,065,453 | $ 2,038,475 | $ 1,984,739 | $ 2,065,453 | $ 1,984,739 | |
Tangible common equity to tangible assets (non-GAAP) | 9.27% | 9.10% | 8.37% | 9.27% | 8.37% | |
Book value per common share (GAAP) | $ 25.36 | $ 24.48 | $ 22.44 | $ 25.36 | $ 22.44 | |
Less: Effect of intangible assets | 2.98 | 2.98 | 3.10 | 2.98 | 3.10 | |
Tangible book value per common share | $ 22.38 | $ 21.51 | $ 19.34 | $ 22.38 | $ 19.34 | |
Return on average stockholders' equity (GAAP) | 10.78% | 10.25% | 8.90% | 10.52% | 9.32% | |
Add: Effect of intangible assets | 1.46% | 1.48% | 1.56% | 1.47% | 1.17% | |
Return on average tangible common equity (non-GAAP) | 12.24% | 11.73% | 10.46% | 11.99% | 10.49% | |
Total tax free interest income (GAAP) | ||||||
Loans receivable | $ 101 | $ 102 | $ 108 | $ 203 | $ 208 | |
Investment securities | 1,184 | 1,209 | 1,139 | 2,393 | 2,083 | |
Total tax free interest income | $ 1,285 | $ 1,311 | $ 1,247 | $ 2,596 | $ 2,291 | |
Total tax free interest income, gross (at 21%, or 34% prior to 2018) | $ 1,627 | $ 1,659 | $ 1,578 | $ 3,286 | $ 2,900 | |
Net interest margin, tax equivalent (non-GAAP) | ||||||
Net interest income (GAAP) | $ 16,044 | $ 16,042 | $ 16,608 | $ 32,086 | $ 30,192 | |
Add: Tax effect tax free interest income (3) | 342 | 348 | 331 | 690 | 609 | |
Net interest income (non-GAAP) | 16,386 | 16,390 | 16,939 | 32,776 | 30,801 | |
Divided by: Average interest-earning assets | 1,928,214 | 1,912,873 | 1,866,812 | 1,920,544 | 1,743,797 | |
Net interest margin, tax equivalent | 3.40% | 3.43% | 3.63% | 3.41% | 3.53% | |
One-time merger related expenses | ||||||
Non-tax deductible | $ - | $ - | $ - | $ - | $ 220 | |
Tax deductible | - | - | 1,387 | - | 1,772 | |
Total one-time merger related expenses | $ - | $ - | $ 1,387 | $ - | $ 1,992 | |
Subtract tax benefit | - | - | 291 | - | 372 | |
Net one-time merger related expenses | $ - | $ - | $ 1,096 | $ - | $ 1,620 | |
Net income (GAAP) | - | - | 4,165 | - | 8,172 | |
Net income excluding one-time merger expenses (non-GAAP) | $ - | $ - | $ 5,261 | $ - | $ 9,792 | |
Adjusted diluted earnings per share | ||||||
Net income excluding one-time merger expenses (non-GAAP) | $ - | $ - | $ 5,261 | $ - | $ 9,792 | |
Average diluted shares | - | - | 8,731,611 | - | 8,350,868 | |
Adjusted diluted earnings per share (non-GAAP) | $ - | $ - | $ 0.60 | $ - | $ 1.17 | |
Adjusted return on assets | ||||||
Net income excluding one-time merger expenses (non-GAAP) | $ - | $ - | $ 5,261 | $ - | $ 9,792 | |
Average assets | - | - | 2,002,403 | - | 1,866,046 | |
Adjusted return on average assets (non-GAAP) | - | - | 1.05% | - | 1.05% | |
Adjusted return on tangible common equity | ||||||
Net income excluding one-time merger expenses (non-GAAP) | $ - | $ - | $ 5,261 | $ - | $ 9,792 | |
Average tangible common equity | - | - | 159,225 | - | 155,751 | |
Adjusted return on average tangible common equity (non-GAAP) | - | - | 13.22% | - | 12.57% | |
Ratio Summary: | ||||||
Return on average equity | 10.78% | 10.25% | 8.90% | 10.52% | 9.32% | |
Return on average tangible common equity | 12.24% | 11.73% | 10.46% | 11.99% | 10.49% | |
Return on average assets | 1.11% | 1.02% | 0.83% | 1.06% | 0.88% | |
Tangible common equity to tangible assets | 9.27% | 9.10% | 8.37% | 9.27% | 8.37% | |
Net interest margin, tax equivalent | 3.40% | 3.43% | 3.63% | 3.41% | 3.53% | |
(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 six 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 | ||||||
SOURCE MutualFirst Financial, Inc.
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