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| 8-K - FORM 8-K - MUTUALFIRST FINANCIAL INC | tv499100_8k.htm |
MutualFirst Financial Announces Second Quarter Earnings
MUNCIE, Ind., July 25, 2018 /PRNewswire/ -- MutualFirst Financial, Inc. (NASDAQ: MFSF), the holding company of MutualBank (the "Bank"), announced today adjusted net income available to common shareholders, excluding $1.1 million of one-time merger related expenses, net of tax, for the second quarter ended June 30, 2018 was $5.3 million, or $0.60 diluted earnings per common share. This compares to net income available to common shareholders for the same period in 2017 of $3.9 million, or $0.52 diluted earnings per common share. The adjusted net income for the second quarter ended June 30, 2018 represents an annualized return on average assets of 1.05% and return on average tangible common equity of 13.22% compared to 0.99% and 10.92%, respectively, for the same period of last year.
Including the one-time merger related expenses, net income available to common shareholders for the second quarter ended June 30, 2018 was $4.2 million, or $0.48 diluted earnings per common share. Annualized return on average assets was 0.83% and return on average tangible common equity was 10.46% for the second quarter of 2018.
Adjusted net income available to common shareholders, excluding $1.6 million of one-timer merger related expenses, net of tax, for the first six months of 2018 was $9.8 million, or $1.17 diluted earnings per common share. This compares to net income available to common shareholders for the same period in 2017 of $7.1 million, or $0.95 diluted earnings per common share. The adjusted net income for the six months ended June 30, 2018 represents an annualized return on average assets of 1.05% and return on average tangible common equity of 12.57% compared to 0.91% and 10.09%, respectively, for the same period of last year.
Including the one-time merger related expenses, net income available to common shareholders for the six months ended June 30, 2018 was $8.2 million, or $0.98 diluted earnings per common share. Annualized return on average assets was 0.88% and return on average tangible common equity was 10.49% for the six months ended June 30, 2018.
On February 28, 2018, MutualFirst Financial, Inc. closed its acquisition of Universal Bancorp and merged Universal's wholly owned subsidiary, BloomBank, into MutualFirst Financial's wholly owned subsidiary, MutualBank. At closing, this acquisition increased total assets by approximately $398 million, total investments by $88 million, total loans by $253 million and total deposits by $315 million. As a result of the acquisition, initial goodwill generated was $21 million and the core deposit intangible was $4.5 million. On April 23, 2018, the system conversion was completed to merge all of the BloomBank customers into MutualBank.
"The conversion of BloomBank customers into MutualBank was a success. This will allow us to focus on realizing the opportunities expected," said David W. Heeter, President and CEO.
Balance Sheet
Assets increased $422 million as of June 30, 2018 compared to December 31, 2017 primarily due to the acquisition of Universal. The gross loan portfolio increased by $285 million primarily due to acquiring the $253 million net loan portfolio of Universal in the first quarter of 2018. Non-residential consumer loans increased by $36 million, or 37% on an annualized basis in the first half of 2018. The mix of loans in our portfolio as of June 30, 2018 compared to December 31, 2017 shifted toward our desired strategic objective through the acquisition. Commercial loans increased to 46.7% compared to 40.3%, residential loans decreased to 37.6% compared to 43.3% and non-residential consumer loans decreased to 15.7% compared to 16.4%.
Deposits increased by $318 million as of June 30, 2018 compared to December 31, 2017 primarily due to an increase of $315 million in the acquisition. As of June 30, 2018, core deposits totaled $1.1 billion, or 70.9% of total deposits and certificates of deposit totaled $443 million, or 29.1% of total deposits. This is compared to a mix of core deposits of 69.1% and certificates of deposit of 30.9 % as of December 31, 2017.
Allowance for loan losses increased to $12.7 million as of June 30, 2018 compared to $12.4 million as of December 31, 2017. The allowance for loan losses to non-performing loans as of June 30, 2018 was 241% compared to 236% as of December 31, 2017. The allowance for loan losses to total loans as of June 30, 2018 was 0.87% compared to 1.05% as of December 31, 2017. Non-performing loans to total loans at June 30, 2018 were 0.36% compared to 0.44% at December 31, 2017. Non-performing assets to total assets were 0.36% at June 30, 2018 compared to 0.38% at December 31, 2017. Loans acquired from Universal in the first quarter of 2018 had an initial credit mark of $4.0 million.
Stockholders' equity was $192.7 million at June 30, 2018, an increase of $42.4 million from December 31, 2017. The increase was primarily due to $42.3 million of capital issued as part of the acquisition of Universal. Other increases included net income available to common shareholders of $8.2 million. These increases were partially offset by a decrease in accumulated other comprehensive income of $5.1 million, due to market value changes in the investment portfolio, and common stock cash dividends paid of $3.1 million during the first half of 2018. The Company's tangible book value per common share as of June 30, 2018 decreased to $19.34 compared to $20.08 as of December 31, 2017 and the tangible common equity ratio decreased to 8.37% as of June 30, 2018 compared to 9.35% as of December 31, 2017. These declines are primarily a result of the acquisition. 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 June 30, 2018.
Income Statement
Net interest income before the provision for loan losses increased $4.5 million for the quarter ended June 30, 2018 compared to the same period in 2017. The increase in net interest income was a result of an increase of $395.6 million in average interest earning assets, due to the acquisition in the first quarter of 2018 and organic loan growth. An additional benefit was the increase of twenty-seven basis points in net interest margin to 3.56%. The increase in net interest margin is a result of the yield on interest earning assets increasing forty-four basis points partially offset by an increase on the cost of interest bearing liabilities of twenty-two basis points.
Net interest income before the provision for loan losses increased $6.4 million for the first half of 2018 compared to the same period in 2017. The increase was a result of an increase of $279.2 million in average interest earning assets due the acquisition in the first quarter of 2018 and organic loan growth. This increase was aided by the net interest margin increasing to 3.46% in the first half of 2018 compared to 3.25% in the first half of 2017, while the tax equivalent net interest margin increased to 3.53% in the first half of 2018 compared to 3.36% in the comparable period in 2017. The increase in net interest margin is a result of the yield on interest earning assets increasing thirty-six basis points partially offset by an increase on the cost of interest bearing liabilities of twenty basis points.
Provision for loan losses in the second quarter of 2018 was $500,000, a $200,000 increase 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 $308,000, or 0.08% of total average loans on an annualized basis, in the second quarter of 2018 compared to net charge offs of $256,000, or 0.09% of total average loans on an annualized basis, in the second quarter of 2017.
The provision for loan losses for the first half of 2018 was $950,000 compared to $500,000 during last year's comparable period. The increase was primarily due to an increasing organic loan portfolio. Net charge-offs for the first half of 2018 equaled $608,000, or 0.09% of loans on an annualized basis compared to $456,000, or 0.08% in the same period of 2017.
Non-interest income for the second quarter of 2018 was $4.8 million, an increase of $134,000 compared to the second quarter of 2017. Increases in non-interest income included an increase of $245,000 in service fee income on deposit accounts aided by increases in interchange fee income along with increases due to the acquisition. This increase was partially offset by a $209,000 decrease in net gain on loan sales due to lower mortgage loan production and a decrease of $173,000 in net gain on sale of investments.
Non-interest income for the first half of 2018 was $9.2 million, an increase of $445,000 compared to the first half of 2017. An increase of $409,000 in service fee income was a result of increasing interchange fees and increases due to the acquisition and an increase of $290,000 in other income was primarily a result of death benefits received in the first quarter of 2018. These increases were partially offset by a decrease of $344,000 in net gain on sale of loans due to lower mortgage banking activity and a decrease of $148,000 in net gain on sale of investments.
Non-interest expense increased $4.9 million when comparing the second quarter of 2018 with the same period in 2017. The increase was primarily due to the acquisition and integration of Universal, which included severance, integration and termination expenses. One-time pretax merger related expenses, primarily in salaries and other expenses, were $1.4 million in the second quarter of 2018 with no similar activity in the same period of 2017.
Non-interest expense increased $6.5 million when comparing the first half of 2018 with the same period in 2017. This increase was directly related to the acquisition and integration of Universal into MutualFirst in the first half of 2018. One-time pretax merger related expenses were approximately $2.0 million in the first half of 2018.
The effective tax rate for the second quarter of 2018 was 12.3% compared to 25.6% in the same quarter of 2017. The effective tax rate for the first six months of 2018 was 12.5% compared to 25.0% for the same period in 2017. The primary reason for the decline was the reduction of the corporate tax rate to 21% and an increase in non-taxable income compared to total income. The effective tax rate for 2018 has been less than expected primarily due to one-time merger related expenses.
"We are pleased with the first half of 2018. We believe with the acquisition and conversion behind us, it will allow our team the ability to focus on delivering continued momentum into the second half of 2018. We believe our Indiana market presence, along with a strong Indiana economy, will provide us more opportunities to increase 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 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.
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MutualFirst Financial, Inc. Selected Financials |
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| June 30, | March 31, | December 31, | June 30, |
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Balance Sheet (Unaudited): | 2018 | 2018 | 2017 | 2017 |
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Assets |
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Cash and cash equivalents | $ 33,005 | $ 41,069 | $ 27,341 | $25,168 |
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Interest-bearing time deposits | 4,482 | 4,627 | 1,853 | 2,046 |
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Investment securities - AFS | 362,162 | 354,145 | 277,378 | 256,642 |
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Loans held for sale | 3,927 | 3,686 | 4,577 | 8,796 |
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Loans, gross | 1,464,735 | 1,449,426 | 1,180,145 | 1,184,353 |
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Allowance for loan losses | (12,729) | (12,537) | (12,387) | (12,426) |
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Net loans | 1,452,006 | 1,436,889 | 1,167,758 | 1,171,927 |
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Premises and equipment, net | 25,984 | 26,208 | 21,539 | 20,886 |
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FHLB of Indianapolis stock | 12,820 | 12,820 | 11,183 | 11,183 |
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Deferred tax asset, net | 11,492 | 10,665 | 7,530 | 10,800 |
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Cash value of life insurance | 59,531 | 59,209 | 52,707 | 52,155 |
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Other real estate owned and repossessed assets | 1,942 | 1,753 | 733 | 709 |
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Goodwill | 22,479 | 23,869 | 1,800 | 1,800 |
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Core deposit and other intangibles | 4,134 | 4,509 | 127 | 233 |
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Other assets | 17,388 | 16,656 | 14,406 | 13,604 |
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Total assets | $ 2,011,352 | $ 1,996,105 | $ 1,588,932 | $1,575,949 |
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Liabilities and Stockholders' Equity |
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Deposits | $ 1,520,234 | $ 1,540,452 | $ 1,202,034 | $1,172,985 |
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FHLB advances | 263,367 | 230,546 | 217,163 | 235,991 |
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Other borrowings | 18,037 | 18,110 | 4,232 | 4,211 |
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Other liabilities | 17,026 | 15,935 | 15,221 | 16,436 |
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Stockholders' equity | 192,688 | 191,062 | 150,282 | 146,326 |
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Total liabilities and stockholders' equity | $ 2,011,352 | $ 1,996,105 | $ 1,588,932 | $1,575,949 |
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| Three Months | Three Months | Three Months | Three Months |
| Six Months | Six Months |
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| Ended | Ended | Ended | Ended |
| Ended | Ended |
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| June 30, | March 31, | December 31, | June 30, |
| June 30, | June 30, |
Income Statement (Unaudited): | 2018 | 2018 | 2017 | 2017 |
| 2018 | 2017 |
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Total interest and dividend income | $ 20,621 | $ 16,748 | $ 15,081 | $ 14,652 |
| $ 37,369 | $ 28,761 |
Total interest expense | 4,013 | 3,164 | 2,888 | 2,565 |
| 7,177 | 4,961 |
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Net interest income | 16,608 | 13,584 | 12,193 | 12,087 |
| 30,192 | 23,800 |
Provision for loan losses | 500 | 450 | 350 | 300 |
| 950 | 500 |
Net interest income after provision |
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for loan losses | 16,108 | 13,134 | 11,843 | 11,787 |
| 29,242 | 23,300 |
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Non-interest income |
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Service fee income | 1,959 | 1,564 | 1,819 | 1,714 |
| 3,523 | 3,114 |
Net realized gain on sales of AFS securities | 106 | 154 | 255 | 279 |
| 260 | 408 |
Commissions | 1,368 | 1,262 | 1,253 | 1,318 |
| 2,630 | 2,514 |
Net gain on sale of loans | 736 | 635 | 1,162 | 945 |
| 1,371 | 1,715 |
Net servicing fees | 154 | 150 | 85 | 96 |
| 304 | 197 |
Increase in cash value of life insurance | 322 | 289 | 278 | 288 |
| 611 | 560 |
Net gain (loss) on sale of other real estate and repossessed assets | 11 | (68) | (87) | (75) |
| (57) | (21) |
Other income | 148 | 449 | 83 | 105 |
| 597 | 307 |
Total non-interest income | 4,804 | 4,435 | 4,848 | 4,670 |
| 9,239 | 8,794 |
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Non-interest expense |
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Salaries and employee benefits | 8,628 | 7,289 | 7,098 | 6,534 |
| 15,917 | 13,260 |
Net occupancy expenses | 995 | 897 | 773 | 763 |
| 1,892 | 1,572 |
Equipment expenses | 698 | 556 | 466 | 438 |
| 1,254 | 865 |
Data processing fees | 676 | 593 | 622 | 541 |
| 1,269 | 1,095 |
Advertising and promotion | 499 | 360 | 318 | 303 |
| 859 | 614 |
ATM and debit card expense | 573 | 471 | 392 | 410 |
| 1,044 | 828 |
Deposit insurance | 225 | 257 | 162 | 168 |
| 482 | 381 |
Professional fees | 472 | 782 | 680 | 408 |
| 1,254 | 804 |
Software subscriptions and maintenance | 691 | 594 | 541 | 567 |
| 1,285 | 1,136 |
Other real estate and repossessed assets | 44 | 45 | 45 | 33 |
| 89 | 80 |
Other expenses | 2,662 | 1,133 | 840 | 1,052 |
| 3,795 | 1,988 |
Total non-interest expense | 16,163 | 12,977 | 11,937 | 11,217 |
| 29,140 | 22,623 |
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Income before income taxes | 4,749 | 4,592 | 4,754 | 5,240 |
| 9,341 | 9,471 |
Income tax provision | 584 | 585 | 3,294 | 1,342 |
| 1,169 | 2,367 |
Net income available to common shareholders | $ 4,165 | $ 4,007 | $ 1,460 | $ 3,898 |
| $ 8,172 | $ 7,104 |
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Pre-tax pre-provision earnings (1) | $ 5,249 | $ 5,042 | $ 5,104 | $ 5,540 |
| $ 10,291 | $ 9,971 |
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Average Balances, Net Interest Income, Yield Earned and Rates Paid |
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| 6/30/2018 |
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| Average | Interest | Average | Average | Interest | Average |
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| Outstanding | Earned/ | Yield/ | Outstanding | Earned/ | Yield/ |
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| Balance | Paid | Rate | Balance | Paid | Rate |
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Interest-earning Assets: |
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Interest -bearing deposits | $ 25,632 | $ 63 | 0.98% | $ 24,059 | $ 37 | 0.62% |
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Mortgage-backed securities: |
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Available-for-sale | 212,150 | 1,442 | 2.72 | 159,559 | 977 | 2.45 |
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Investment securities: |
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Available-for-sale | 153,875 | 1,251 | 3.25 | 93,956 | 768 | 3.27 |
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Loans receivable | 1,462,335 | 17,739 | 4.85 | 1,182,502 | 12,753 | 4.31 |
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Stock in FHLB of Indianapolis | 12,820 | 126 | 3.93 | 11,183 | 117 | 4.18 |
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Total interest-earning assets (2) | 1,866,812 | 20,621 | 4.42 | 1,471,259 | 14,652 | 3.98 |
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Non-interest earning assets, net of allowance |
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for loan losses and unrealized gain/loss | 135,591 |
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| 98,254 |
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Total assets | $ 2,002,403 |
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| $ 1,569,513 |
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Interest-Bearing Liabilities: |
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Demand and NOW accounts | $ 404,823 | 582 | 0.58 | $ 308,047 | 298 | 0.39 |
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Savings deposits | 191,637 | 5 | 0.01 | 139,766 | 4 | 0.01 |
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Money market accounts | 207,290 | 251 | 0.48 | 166,272 | 126 | 0.30 |
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Certificate accounts | 456,284 | 1,703 | 1.49 | 387,138 | 1,206 | 1.25 |
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Total deposits | 1,260,034 | 2,541 | 0.81 | 1,001,223 | 1,634 | 0.65 |
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Borrowings | 257,066 | 1,472 | 2.29 | 220,004 | 931 | 1.69 |
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Total interest-bearing liabilities | 1,517,100 | 4,013 | 1.06 | 1,221,227 | 2,565 | 0.84 |
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Non-interest bearing deposit accounts | 280,791 |
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| 187,791 |
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Other liabilities | 17,230 |
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| 15,664 |
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Total liabilities | 1,815,121 |
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| 1,424,682 |
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Stockholders' equity | 187,282 |
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| 144,831 |
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Total liabilities and stockholders' equity | $ 2,002,403 |
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| $ 1,569,513 |
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Net interest earning assets | $ 349,712 |
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| $ 250,032 |
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Net interest income |
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| $ 12,087 |
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Net interest rate spread (4) |
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| 3.36% |
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| 3.14% |
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Net yield on average interest-earning assets (4) |
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| 3.56% |
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| 3.29% |
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Net yield on average interest-earning assets, tax equivalent (3)(4) |
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| 3.63% |
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| 3.39% |
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Average interest-earning assets to |
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average interest-bearing liabilities |
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| 123.05% |
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| 120.47% |
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| Six |
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| 6/30/2018 |
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| 6/30/2017 |
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| Average | Interest | Average | Average | Interest | Average |
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| Outstanding | Earned/ | Yield/ | Outstanding | Earned/ | Yield/ |
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Interest-earning Assets: |
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Interest -bearing deposits | $ 23,659 | $ 130 | 1.10% | $ 22,742 | $ 62 | 0.55% |
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Mortgage-backed securities: |
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Available-for-sale | 194,051 | 2,569 | 2.65 | 160,364 | 1,976 | 2.46 |
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Investment securities: |
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Available-for-sale | 142,366 | 2,290 | 3.22 | 92,767 | 1,490 | 3.21 |
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Loans receivable | 1,371,428 | 32,063 | 4.68 | 1,177,526 | 25,002 | 4.25 |
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Stock in FHLB of Indianapolis | 12,293 | 317 | 5.16 | 11,150 | 231 | 4.14 |
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Total interest-earning assets (2) | 1,743,797 | 37,369 | 4.29 | 1,464,549 | 28,761 | 3.93 |
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Non-interest earning assets, net of allowance |
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for loan losses and unrealized gain/loss | 122,249 |
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| 97,819 |
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Total assets | $ 1,866,046 |
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| $ 1,562,368 |
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Interest-Bearing Liabilities: |
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Demand and NOW accounts | $ 373,483 | 1,019 | 0.55 | $ 298,956 | 498 | 0.33 |
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Savings deposits | 174,578 | 10 | 0.01 | 139,600 | 7 | 0.01 |
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Money market accounts | 195,467 | 471 | 0.48 | 170,660 | 251 | 0.29 |
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Certificate accounts | 431,089 | 3,147 | 1.46 | 386,147 | 2,343 | 1.21 |
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Total deposits | 1,174,617 | 4,647 | 0.79 | 995,363 | 3,099 | 0.62 |
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Borrowings | 246,006 | 2,530 | 2.06 | 224,961 | 1,862 | 1.66 |
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Total interest-bearing liabilities | 1,420,623 | 7,177 | 1.01 | 1,220,324 | 4,961 | 0.81 |
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Non-interest bearing deposit accounts | 253,418 |
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| 183,511 |
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Other liabilities | 16,637 |
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| 15,577 |
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Total liabilities | 1,690,678 |
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| 1,419,412 |
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Stockholders' equity | 175,368 |
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| 142,956 |
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Total liabilities and stockholders' equity | $ 1,866,046 |
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| $ 1,562,368 |
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Net interest earning assets | $ 323,174 |
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| $ 244,225 |
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Net interest income |
| $ 30,192 |
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| $ 23,800 |
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Net interest rate spread (4) |
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| 3.28% |
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| 3.11% |
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Net yield on average interest-earning assets (4) |
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| 3.46% |
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| 3.25% |
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Net yield on average interest-earning assets, tax equivalent (3)(4) |
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| 3.53% |
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| 3.36% |
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Average interest-earning assets to |
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average interest-bearing liabilities |
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| 122.75% |
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| 120.01% |
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| Three Months | Three Months | Three Months | Three Months |
| Six Months | Six Months |
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| Ended | Ended | Ended | Ended |
| Ended | Ended |
|
| June 30, | March 31, | December 31, | June 30, |
| June 30, | June 30, |
Selected Financial Ratios and Other Financial Data (Unaudited): | 2018 | 2018 | 2017 | 2017 |
| 2018 | 2017 |
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Share and per share data: |
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Average common shares outstanding: |
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Basic | 8,577,017 | 7,810,916 | 7,389,394 | 7,344,233 |
| 8,196,083 | 7,338,377 |
Diluted | 8,731,611 | 7,965,893 | 7,526,416 | 7,487,489 |
| 8,350,868 | 7,484,018 |
Per common share: |
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Basic earnings | $ 0.49 | $ 0.51 | $ 0.20 | $ 0.53 |
| $ 1.00 | $ 0.97 |
Diluted earnings | $ 0.48 | $ 0.50 | $ 0.19 | $ 0.52 |
| $ 0.98 | $ 0.95 |
Dividends | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.16 |
| $ 0.36 | $ 0.32 |
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Dividend payout ratio | 37.50% | 36.00% | 94.74% | 30.77% |
| 36.73% | 33.68% |
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Performance Ratios: |
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Return on average assets (ratio of net |
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income to average total assets)(4) | 0.83% | 0.93% | 0.37% | 0.99% |
| 0.88% | 0.91% |
Return on average tangible common equity (ratio of net |
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income to average tangible common equity)(4) | 10.46% | 10.53% | 3.89% | 10.92% |
| 10.49% | 10.09% |
Interest rate spread information: |
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Average during the period(4) | 3.36% | 3.18% | 3.11% | 3.14% |
| 3.28% | 3.11% |
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Net interest margin(4)(5) | 3.56% | 3.35% | 3.27% | 3.29% |
| 3.46% | 3.25% |
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Efficiency Ratio | 75.49% | 72.02% | 70.05% | 66.94% |
| 73.90% | 69.41% |
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Ratio of average interest-earning |
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assets to average interest-bearing |
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liabilities | 123.05% | 122.19% | 121.44% | 120.47% |
| 122.75% | 120.01% |
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Allowance for loan losses: |
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Balance beginning of period | $ 12,537 | $ 12,387 | $ 12,378 | $ 12,382 |
| $ 12,387 | $ 12,382 |
Net charge-offs (recoveries): |
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Real Estate: |
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Commercial | 0 | 53 | 0 | (1) |
| 53 | (1) |
Commercial construction and development | 0 | 0 | 0 | 0 |
| 0 | 0 |
Consumer closed end first mortgage | 56 | 12 | 24 | 80 |
| 68 | 121 |
Consumer open end and junior liens | 20 | 0 | 0 | 8 |
| 20 | 8 |
Total real estate loans | 76 | 65 | 24 | 87 |
| 141 | 128 |
Other loans: |
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Auto | (1) | (10) | 5 | 19 |
| (11) | 26 |
Boat/RV | 185 | 131 | 208 | 91 |
| 316 | 234 |
Other | 58 | 30 | 37 | 52 |
| 88 | 68 |
Commercial and industrial | (10) | 84 | 67 | 7 |
| 74 | 0 |
Total other | 232 | 235 | 317 | 169 |
| 467 | 328 |
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Net charge-offs (recoveries) | 308 | 300 | 341 | 256 |
| 608 | 456 |
Provision for loan losses | 500 | 450 | 350 | 300 |
| 950 | 500 |
Balance end of period | $ 12,729 | $ 12,537 | $ 12,387 | $ 12,426 |
| $ 12,729 | $ 12,426 |
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Net loan charge-offs to average loans (4) | 0.08% | 0.09% | 0.11% | 0.09% |
| 0.09% | 0.08% |
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| June 30, | March 31, | December 31, | June 30, |
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| 2018 | 2018 | 2017 | 2017 |
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Total shares outstanding | 8,587,424 | 8,574,924 | 7,389,394 | 7,344,233 |
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Tangible book value per common share | $ 19.34 | $ 18.97 | $ 20.08 | $ 19.65 |
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Tangible common equity to tangible assets | 8.37% | 8.27% | 9.35% | 9.17% |
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Nonperforming assets (000's) |
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Non-accrual loans |
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Real Estate: |
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Commercial | $ 1,753 | $ 1,415 | $ 1,107 | $ 1,199 |
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Commercial construction and development | - | 17 | - | - |
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Consumer closed end first mortgage | 2,661 | 3,633 | 3,409 | 1,679 |
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Consumer open end and junior liens | 251 | 223 | 309 | 238 |
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Total real estate loans | 4,665 | 5,288 | 4,825 | 3,116 |
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Other loans: |
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Auto | 31 | 11 | 22 | 4 |
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Boat/RV | 290 | 367 | 198 | 342 |
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Other | 92 | 21 | 16 | 10 |
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Commercial and industrial | 183 | 208 | 159 | 39 |
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Total other | 596 | 607 | 395 | 395 |
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Total non-accrual loans | 5,261 | 5,895 | 5,220 | 3,511 |
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Accruing loans past due 90 days or more | 15 | 38 | 31 | 27 |
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Total nonperforming loans | 5,276 | 5,933 | 5,251 | 3,538 |
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Real estate owned | 1,584 | 1,390 | 251 | 326 |
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Other repossessed assets | 358 | 363 | 482 | 383 |
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Total nonperforming assets | $ 7,218 | $ 7,686 | $ 5,984 | $ 4,247 |
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Performing restructured loans (6) | $ 1,525 | $ 913 | $ 1,389 | $ 2,071 |
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Asset Quality Ratios: |
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Non-performing assets to total assets | 0.36% | 0.39% | 0.38% | 0.27% |
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Non-performing loans to total loans | 0.36% | 0.41% | 0.44% | 0.30% |
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Allowance for loan losses to non-performing loans | 241% | 211% | 236% | 351% |
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Allowance for loan losses to loans receivable | 0.87% | 0.86% | 1.05% | 1.05% |
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| Three Months | Three Months | Three Months | Three Months |
| Six Months | Six Months |
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| Ended | Ended | Ended | Ended |
| Ended | Ended |
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| June 30, | March 31, | December 31, | June 30, |
| June 30, | June 30, |
Non-GAAP Measurements (7) | 2018 | 2018 | 2017 | 2017 |
| 2018 | 2017 |
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Total stockholders' equity (GAAP) | $ 192,688 | $ 191,062 | $ 150,282 | $ 146,326 |
| $ 192,688 | $ 146,326 |
Less: Intangible assets | 26,613 | 28,378 | 1,927 | 2,033 |
| 26,613 | 2,033 |
Tangible common equity (non-GAAP) | $ 166,075 | $ 162,684 | $ 148,355 | $ 144,293 |
| $ 166,075 | $ 144,293 |
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Total assets (GAAP) | $ 2,011,352 | $ 1,996,105 | $ 1,588,932 | $ 1,575,949 |
| $ 2,011,352 | $ 1,575,949 |
Less: Intangible assets | 26,613 | 28,378 | 1,927 | 2,033 |
| 26,613 | 2,033 |
Tangible assets (non-GAAP) | $ 1,984,739 | $ 1,967,727 | $ 1,587,005 | $ 1,573,916 |
| $ 1,984,739 | $ 1,573,916 |
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Tangible common equity to tangible assets (non-GAAP) | 8.37% | 8.27% | 9.35% | 9.17% |
| 8.37% | 9.17% |
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Book value per common share (GAAP) | $ 22.44 | $ 22.28 | $ 20.34 | $ 19.92 |
| $ 22.44 | $ 19.92 |
Less: Effect of intangible assets | 3.10 | 3.31 | 0.26 | 0.27 |
| 3.10 | 0.27 |
Tangible book value per common share | $ 19.34 | $ 18.97 | $ 20.08 | $ 19.65 |
| $ 19.34 | $ 19.65 |
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Return on average stockholders' equity (GAAP) | 8.90% | 9.81% | 3.84% | 10.77% |
| 9.32% | 9.94% |
Add: Effect of intangible assets | 1.56% | 0.72% | 0.05% | 0.15% |
| 1.17% | 0.15% |
Return on average tangible common equity (non-GAAP) | 10.46% | 10.53% | 3.89% | 10.92% |
| 10.49% | 10.09% |
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Total tax free interest income (GAAP) |
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Loans receivable | $ 108 | $ 100 | $ 104 | $ 106 |
| $ 208 | $ 213 |
Investment securities | 1,139 | 944 | 743 | 661 |
| 2,083 | 1,308 |
Total tax free interest income | $ 1,247 | $ 1,044 | $ 847 | $ 767 |
| $ 2,291 | $ 1,521 |
Total tax free interest income, gross (at 21%, or 34% prior to 2018) | $ 1,578 | $ 1,322 | $ 1,283 | $ 1,162 |
| $ 2,900 | $ 2,305 |
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Net interest margin, tax equivalent (non-GAAP) |
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Net interest income (GAAP) | $ 16,608 | $ 13,584 | $ 12,193 | $ 12,087 |
| $ 30,192 | $ 23,800 |
Add: Tax effect tax free interest income (3) | 331 | 278 | 436 | 395 |
| 609 | 784 |
Net interest income (non-GAAP) | 16,939 | 13,862 | 12,629 | 12,482 |
| 30,801 | 24,584 |
Divided by: Average interest-earning assets | 1,866,812 | 1,620,871 | 1,489,596 | 1,471,259 |
| 1,743,797 | 1,464,549 |
Net interest margin, tax equivalent | 3.63% | 3.42% | 3.39% | 3.39% |
| 3.53% | 3.36% |
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One-time merger related expenses |
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Non-tax deductible | $ - | $ 220 |
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| $ 220 |
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Tax deductible | 1,387 | 385 |
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| 1,772 |
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Total one-time merger related expenses | $ 1,387 | $ 605 |
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| $ 1,992 |
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Subtract tax benefit | 291 | 81 |
|
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| 372 |
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Net one-time merger related expenses | $ 1,096 | $ 524 |
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| $ 1,620 |
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Net income (GAAP) | 4,165 | 4,007 |
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| 8,172 |
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Net income excluding one-time merger expenses (non-GAAP) | $ 5,261 | $ 4,531 |
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| $ 9,792 |
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Adjusted diluted earnings per share |
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Net income excluding one-time merger expenses (non-GAAP) | $ 5,261 | $ 4,531 |
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| $ 9,792 |
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Average diluted shares | 8,731,611 | 7,965,893 |
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| 8,350,868 |
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Adjusted diluted earnings per share (non-GAAP) | $ 0.60 | $ 0.57 |
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| $ 1.17 |
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Adjusted return on assets |
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Net income excluding one-time merger expenses (non-GAAP) | $ 5,261 | $ 4,531 |
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| $ 9,792 |
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Average assets | 2,002,403 | 1,729,690 |
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| 1,866,046 |
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Adjusted return on average assets (non-GAAP) | 1.05% | 1.05% |
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| 1.05% |
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Adjusted return on tangible common equity |
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Net income excluding one-time merger expenses (non-GAAP) | $ 5,261 | $ 4,531 |
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| $ 9,792 |
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Average tangible common equity | 159,225 | 152,276 |
|
|
| 155,751 |
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Adjusted return on average tangible common equity (non-GAAP) | 13.22% | 11.90% |
|
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| 12.57% |
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Ratio Summary: |
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Return on average equity | 8.90% | 9.81% | 3.84% | 10.77% |
| 9.32% | 9.94% |
Return on average tangible common equity | 10.46% | 10.53% | 3.89% | 10.92% |
| 10.49% | 10.09% |
Return on average assets | 0.83% | 0.93% | 0.37% | 0.99% |
| 0.88% | 0.91% |
Tangible common equity to tangible assets | 8.37% | 8.27% | 9.35% | 9.17% |
| 8.37% | 9.17% |
Net interest margin, tax equivalent | 3.63% | 3.42% | 3.39% | 3.39% |
| 3.53% | 3.36% |
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(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. | |||||||
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(2) Calculated net of deferred loan fees, loan discounts, loans in process and loss reserves. |
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(3) Tax equivalent margin is calculated by taking non-taxable interest and grossing up by 21% applicable tax rate for 2018 and 34% applicable tax rate prior to 2018. | |||||||
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(4) Ratios for the three and six month periods have been annualized. |
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(5) Net interest income divided by average interest earning assets. |
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(6) Performing restructured loans are excluded from non-performing ratios. Restructured loans that are on non-accrual are in the non-accrual loan categories. | |||||||
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(7) This earnings release and selected financials contain GAAP financial measures and non-GAAP financial measures where management believes it to be helpful in understanding MutualFirst's results of operations or financial position. This table shows non-GAAP financial measures and the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure. | |||||||
CONTACT: Chris Cook, Senior Vice President, Treasurer and CFO of MutualFirst Financial, Inc. (765) 747-2945