Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - MUTUALFIRST FINANCIAL INC | tv511912_8k.htm |
Exhibit 99
MutualFirst Financial Announces Record Earnings for 2018
MUNCIE, Ind., Jan. 30, 2019 /PRNewswire/ -- MutualFirst Financial, Inc. (NASDAQ: MFSF), the holding company of MutualBank (the "Bank"), announced today net income available to common shareholders was $5.3 million, or $0.61 diluted earnings per common share for the quarter ended December 31, 2018. This compared to net income available to common shareholders for the same period in 2017 of $1.5 million, or $0.19 diluted earnings per common share. Annualized return on average assets was 1.04% and return on average tangible common equity was 12.56% for the fourth quarter of 2018 compared to 0.37% and 3.89%, respectively, for the same period of last year. In the fourth quarter of 2017, MFSF recorded an additional tax expense of $2.0 million due to a revaluation of MFSF's deferred tax asset.
Adjusted net income to common shareholders, excluding $1.9 million of one-time merger related expenses, net of tax, was $20.8 million, or $2.43 diluted earnings per common share for year ended 2018. This compared to net income available to common shareholders of $12.3 million, or $1.64 diluted earnings per common share for the year ended December 31, 2017. Return on average assets would have been 1.07% and return on average tangible common equity would have been 12.85% for the year ended 2018 compared to 0.78% and 8.52%, respectively, for last year.
Including the one-time merger related expenses, net income available to common shareholders was $18.9 million, or $2.21 diluted earnings per common share for the year ended December 31, 2018. Annualized return on average assets was 0.97% and return on tangible common equity was 11.66% for the year ended 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, net 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's system.
"2018 was an exciting and successful year for MutualFirst Financial," said David W. Heeter, CEO. "The successful acquisition and integration of Universal has provided an accretion in earnings and an increase in shareholder value."
Balance Sheet
Assets increased $460 million as of December 31, 2018 compared to December 31, 2017, primarily due to the acquisition of Universal. The gross loan portfolio increased by $316 million primarily due to acquiring the $253 million net loan portfolio of Universal in the first quarter of 2018. Non-residential consumer loans have been the primary source of organic loan growth increasing by $69 million, or 35%, in 2018. As of December 31, 2018, the loan mix is 46.0% commercial, 36.2% residential loans and 17.8% non-residential consumer loans compared to 40.3%, 43.3% and 16.4%, respectively as of December 31, 2017.
Deposits increased by $317 million in 2018 primarily due to an increase of $315 million from the acquisition of Universal. As of December 31, 2018, core deposits totaled $1.0 billion, or 67.8% of total deposits and certificates of deposit totaled $488 million, or 32.2% 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 $13.3 million as of December 31, 2018 compared to $12.4 million as of December 31, 2017. The allowance for loan losses to non-performing loans as of December 31, 2018 was 146% compared to 236% as of December 31, 2017. The allowance for loan losses to total loans as of December 31, 2018 was 0.89% compared to 1.05% as of December 31, 2017. The decrease is a result of loans obtained in the Universal acquisition with an original credit mark of $4.0 million which is not included in the allowance for loan losses. Non-performing loans to total loans at December 31, 2018 were 0.61% compared to 0.44% at December 31, 2017. Non-performing assets to total assets were 0.54% at December 31, 2018 compared to 0.38% at December 31, 2017. The increase in non-performing loans was primarily due to one loan in the amount of $3.2 million, that went non-performing at year end, but was back to performing in early January.
Stockholders' equity was $202.4 million at December 31, 2018, an increase of $52.1 million from December 31, 2017. The increase was primarily due to $42.3 million of capital issued as part of the acquisition of Universal and net income available to common shareholders of $18.9 million during the year ended December 31, 2018. These increases were partially offset by a decrease in accumulated other comprehensive income of $3.0 million and common stock dividends of $6.4 million for the year ended December 31, 2018. The Company's tangible book value per common share as of December 31, 2018 was $20.51 compared to $20.08 as of December 31, 2017 and the tangible common equity ratio decreased to 8.72% as of December 31, 2018 compared to 9.35% as of December 31, 2017. MFSF's and the Bank's risk-based capital ratios remained in excess of "well-capitalized" levels as defined by all regulatory standards as of December 31, 2018.
Mr. Heeter added, "We are continuing to remix our balance sheet, which is important to continue our performance momentum."
Income Statement
Net interest income before the provision for loan losses increased $6.4 million for the quarter ended December 31, 2018 compared to the same period in 2017. The increase in net interest income was primarily a result of an increase of $409 million in average interest earning assets, due to the acquisition in the first quarter of 2018 and organic loan growth. This increase was aided by an increase of twenty basis points in net interest margin to 3.47%, while the tax equivalent margin increased sixteen basis points. Net interest margin was also aided by approximately nine basis points of purchase accounting adjustments in the quarter from acquired loan prepayments and paydowns. On a linked quarter basis, net interest income before the provision for loan losses decreased $77,000 as net interest margin decreased by three basis points partially offset by average interest earning assets increasing by $20.1 million, primarily due to increases in the average loan portfolio and average investment portfolio.
Net interest income before the provision for loan losses increased $14.8 million in 2018 compared to 2017. The increase was a result of an increase of $342 million in average interest earning assets due to the acquisition in the first quarter of 2018 and organic loan growth. This increase was aided by the net interest margin increasing to 3.47% in 2018 compared to 3.27% in 2017, while the tax equivalent net interest margin increased to 3.55% in 2018 compared to 3.38% in 2017. Net interest margin was also aided in 2018 by approximately eight basis points of purchase accounting adjustments from acquired loan prepayments and paydowns.
Provision for loan losses in the fourth quarter of 2018 was $600,000 compared to $350,000 during last year's comparable period. The increase was due to management's ongoing evaluation of the adequacy of the allowance for loan losses and was primarily attributable to an increasing loan portfolio. Net charge offs totaled $328,000, or 0.09% of total average loans on an annualized basis, in the fourth quarter of 2018 compared to net charge offs of $341,000, or 0.11% of total average loans on an annualized basis, in the fourth quarter of 2017.
The provision for loan losses for 2018 was $2.1 million compared to $1.2 million during 2017. The increase was primarily due to our growing loan portfolio. Net charge-offs for 2018 equaled $1.2 million, or 0.09% of total average loans compared to $1.2 million, or 0.10% of total average loans in 2017.
Non-interest income for the fourth quarter of 2018 was $5.3 million, an increase of $449,000 compared to the fourth quarter of 2017. Increases in non-interest income included an increase of $571,000 in service charges on deposit accounts primarily due to increases in interchange income along with increases due to the acquisition and an increase of $206,000 in other income due to a gain on the sale of a low-income housing property. These increases were partially offset by a decrease of $260,000 on gain on sale of loans primarily due to selling $18.5 million of portfolio mortgage loans in the fourth quarter of 2017, which was not repeated in 2018, a decrease of $139,000 in commission income and a decrease of $117,000 on gain on sale of investments. On a linked quarter basis, non-interest income increased $258,000 due to an increase of $366,000 in service charges on deposit accounts and an increase of $119,000 in other income. These increases were partially offset by a decline of $268,000 in gain on sale of investments.
Non-interest income for the year ended December 31, 2018 was $19.6 million, an increase of $1.5 million compared to year ended 2017. The reasons for the increase include a $1.4 million improvement in service fee income on deposit accounts for the reasons mentioned above and a $567,000 improvement in other income primarily due to a death benefit received on life insurance in the first quarter of 2018 along with the sale of a low-income housing property in the fourth quarter. These increases were partially offset by a decline of $761,000 in net gain on sale of mortgage loans primarily due to fewer mortgage loans being sold in 2018 compared to 2017.
Non-interest expense increased $3.1 million when comparing the fourth quarter of 2018 with the same period in 2017. The increase was primarily due to the acquisition and integration of Universal. One-time pretax merger-related expenses, primarily in compensation and other expenses, were $79,000 in the fourth quarter of 2018. On a linked quarter basis, non-interest expense increased $445,000 primarily due to an increase of $743,000 in compensation and benefit expenses due to an increase of $511,000 in health insurance due to an increase in claims paid.
Non-interest expense increased $12.7 million when comparing the full year of 2018 with 2017. The increase was directly related to the acquisition and integration of Universal into MutualFirst in 2018. One-time pretax merger-related expenses were $2.4 million in 2018.
The effective tax rate for the fourth quarter of 2018 was 14.3% compared to 69.3% in the same quarter of 2017. The primary reason for the decline was the reduction of the corporate tax rate to 21% and the one-time deferred tax revaluation as of December 2017 that was not repeated in 2018.
The effective tax rate for the full year of 2018 was 13.6% compared to 35.6% for 2017. The primary reason for the decline was the reduction of the corporate tax rate to 21% and the one-time deferred tax revaluation as of December 2017 that was not repeated in 2018.
Mr. Heeter concluded, "2018 was the fourth year of our five-year strategic plan. We have been successful in the execution of that plan. Now that the acquisition has been completed, our plan will be to recast the strategic plan over the next four years and build upon the momentum that has been created to enhance 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) |
|
|
|
|
| December 31, | September 30, | December 31, |
|
|
|
Balance Sheet (Unaudited): | 2018 | 2018 | 2017 |
|
|
|
|
| (000) | (000) | (000) |
|
|
|
Assets |
|
|
|
|
|
|
Cash and cash equivalents | $ 33,414 | $ 31,872 | $ 27,341 |
|
|
|
Interest-bearing time deposits | 4,239 | 4,236 | 1,853 |
|
|
|
Investment securities - AFS | 370,875 | 360,747 | 277,378 |
|
|
|
Loans held for sale | 3,987 | 7,434 | 4,577 |
|
|
|
Loans, gross | 1,495,943 | 1,474,383 | 1,180,145 |
|
|
|
Allowance for loan losses | (13,281) | (13,009) | (12,387) |
|
|
|
Net loans | 1,482,662 | 1,461,374 | 1,167,758 |
|
|
|
Premises and equipment, net | 25,641 | 25,628 | 21,539 |
|
|
|
FHLB of Indianapolis stock | 13,034 | 12,820 | 11,183 |
|
|
|
Deferred tax asset, net | 10,831 | 12,151 | 7,530 |
|
|
|
Cash value of life insurance | 60,160 | 59,845 | 52,707 |
|
|
|
Other real estate owned and repossessed assets | 2,013 | 1,530 | 733 |
|
|
|
Goodwill | 22,310 | 22,479 | 1,800 |
|
|
|
Core deposit and other intangibles | 3,569 | 3,818 | 127 |
|
|
|
Other assets | 16,578 | 17,237 | 14,406 |
|
|
|
Total assets | $ 2,049,313 | $ 2,021,171 | $ 1,588,932 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
Deposits | $ 1,519,225 | $ 1,531,198 | $ 1,202,034 |
|
|
|
FHLB advances | 292,497 | 261,150 | 217,163 |
|
|
|
Other borrowings | 17,988 | 17,963 | 4,232 |
|
|
|
Other liabilities | 17,240 | 17,150 | 15,221 |
|
|
|
Stockholders' equity | 202,363 | 193,710 | 150,282 |
|
|
|
Total liabilities and stockholders' equity | $ 2,049,313 | $ 2,021,171 | $ 1,588,932 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Audited) |
|
| Three Months | Three Months | Three Months |
| Twelve Months | Twelve Months |
|
| Ended | Ended | Ended |
| Ended | Ended |
|
| December 31, | September 30, | December 31, |
| December 31, | December 31, |
Income Statement (Unaudited): | 2018 | 2018 | 2017 |
| 2018 | 2017 |
|
| (000) | (000) | (000) |
| (000) | (000) |
|
|
|
|
|
|
|
|
Total interest and dividend income | $ 21,489 | $ 20,836 | $ 15,081 |
| $ 79,694 | $ 58,868 |
Total interest expense | 4,995 | 4,419 | 2,888 |
| 16,591 | 10,611 |
|
|
|
|
|
|
|
|
Net interest income | 16,494 | 16,417 | 12,193 |
| 63,103 | 48,257 |
Provision for loan losses | 600 | 570 | 350 |
| 2,120 | 1,220 |
Net interest income after provision |
|
|
|
|
|
|
for loan losses | 15,894 | 15,847 | 11,843 |
| 60,983 | 47,037 |
|
|
|
|
|
|
|
|
Non-interest income |
|
|
|
|
|
|
Service fee income | 2,390 | 2,024 | 1,819 |
| 7,937 | 6,584 |
Net realized gain on sales of AFS securities | 138 | 406 | 255 |
| 804 | 708 |
Commissions | 1,114 | 1,121 | 1,253 |
| 4,865 | 5,027 |
Net gain on sale of loans | 902 | 853 | 1,162 |
| 3,126 | 3,887 |
Net servicing fees | 158 | 129 | 85 |
| 591 | 391 |
Increase in cash value of life insurance | 315 | 313 | 278 |
| 1,239 | 1,113 |
Net gain (loss) on sale of other real estate and repossessed assets | (9) | 23 | (87) |
| (43) | (122) |
Other income | 288 | 170 | 83 |
| 1,055 | 488 |
Total non-interest income | 5,296 | 5,039 | 4,848 |
| 19,574 | 18,076 |
|
|
|
|
|
|
|
|
Non-interest expense |
|
|
|
|
|
|
Salaries and employee benefits | 8,895 | 8,152 | 7,098 |
| 32,964 | 27,229 |
Net occupancy expenses | 986 | 1,087 | 773 |
| 3,965 | 3,133 |
Equipment expenses | 625 | 635 | 466 |
| 2,514 | 1,773 |
Data processing fees | 686 | 669 | 622 |
| 2,624 | 2,321 |
Advertising and promotion | 331 | 416 | 318 |
| 1,606 | 1,223 |
ATM and debit card expense | 582 | 664 | 392 |
| 2,290 | 1,676 |
Deposit insurance | 207 | 209 | 162 |
| 898 | 724 |
Professional fees | 463 | 460 | 680 |
| 2,177 | 1,855 |
Software subscriptions and maintenance | 732 | 702 | 541 |
| 2,719 | 2,202 |
Other real estate and repossessed assets | 49 | 51 | 45 |
| 189 | 165 |
Intangible amortization | 249 | 316 | 44 |
| 1,103 | 264 |
Other expenses | 1,214 | 1,213 | 796 |
| 5,684 | 3,440 |
Total non-interest expense | 15,019 | 14,574 | 11,937 |
| 58,733 | 46,005 |
|
|
|
|
|
|
|
|
Income before income taxes | 6,171 | 6,312 | 4,754 |
| 21,824 | 19,108 |
Income tax provision | 881 | 910 | 3,294 |
| 2,960 | 6,793 |
Net income available to common shareholders | $ 5,290 | $ 5,402 | $ 1,460 |
| $ 18,864 | $ 12,315 |
|
|
|
|
|
|
|
|
Pre-tax pre-provision earnings (1) | $ 6,771 | $ 6,882 | $ 5,104 |
| $ 23,944 | $ 20,328 |
|
|
|
|
|
|
|
|
Average Balances, Net Interest Income, Yield Earned and Rates Paid |
|
|
|
|
|
|
|
|
| Three |
|
| Three |
|
|
|
| months ended |
|
| months ended |
|
|
|
| 12/31/2018 |
|
| 12/31/2017 |
|
|
| Average | Interest | Average | Average | Interest | Average |
|
| Outstanding | Earned/ | Yield/ | Outstanding | Earned/ | Yield/ |
|
| Balance | Paid | Rate | Balance | Paid | Rate |
|
| (000) | (000) | (annualized) | (000) | (000) | (annualized) |
Interest-earning Assets: |
|
|
|
|
|
|
Interest -bearing deposits | $22,735 | $63 | 1.11% | $22,296 | $41 | 0.74% |
Mortgage-backed securities: |
|
|
|
|
|
|
Available-for-sale | 216,947 | 1,511 | 2.79 | 153,355 | 921 | 2.40 |
Investment securities: |
|
|
|
|
|
|
Available-for-sale | 154,735 | 1,261 | 3.26 | 105,392 | 880 | 3.34 |
Loans receivable | 1,491,709 | 18,509 | 4.96 | 1,197,370 | 13,119 | 4.38 |
Stock in FHLB of Indianapolis | 12,823 | 145 | 4.52 | 11,183 | 120 | 4.29 |
Total interest-earning assets (2) | 1,898,949 | 21,489 | 4.53 | 1,489,596 | 15,081 | 4.05 |
Non-interest earning assets, net of allowance |
|
|
|
|
|
|
for loan losses and unrealized gain/loss | 129,974 |
|
| 97,864 |
|
|
Total assets | $2,028,923 |
|
| $1,587,460 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-Bearing Liabilities: |
|
|
|
|
|
|
Demand and NOW accounts | $393,365 | 779 | 0.79 | $324,990 | 395 | 0.49 |
Savings deposits | 184,447 | 5 | 0.01 | 139,042 | 4 | 0.01 |
Money market accounts | 183,947 | 303 | 0.66 | 174,161 | 215 | 0.49 |
Certificate accounts | 488,484 | 2,231 | 1.83 | 372,816 | 1,297 | 1.39 |
Total deposits | 1,250,243 | 3,318 | 1.06 | 1,011,009 | 1,911 | 0.76 |
Borrowings | 281,026 | 1,677 | 2.39 | 215,586 | 977 | 1.81 |
Total interest-bearing liabilities | 1,531,269 | 4,995 | 1.30 | 1,226,595 | 2,888 | 0.94 |
Non-interest bearing deposit accounts | 284,837 |
|
| 194,563 |
|
|
Other liabilities | 18,196 |
|
| 14,374 |
|
|
Total liabilities | 1,834,302 |
|
| 1,435,532 |
|
|
Stockholders' equity | 194,621 |
|
| 151,928 |
|
|
Total liabilities and stockholders' equity | $2,028,923 |
|
| $1,587,460 |
|
|
|
|
|
|
|
|
|
|
Net interest earning assets | $367,680 |
|
| $263,001 |
|
|
|
|
|
|
|
|
|
|
Net interest income |
| $16,494 |
|
| $12,193 |
|
|
|
|
|
|
|
|
|
Net interest rate spread (4) |
|
| 3.22% |
|
| 3.11% |
|
|
|
|
|
|
|
|
Net yield on average interest-earning assets (4) |
|
| 3.47% |
|
| 3.27% |
|
|
|
|
|
|
|
|
Net yield on average interest-earning assets, tax equivalent (3)(4) |
|
| 3.55% |
|
| 3.39% |
|
|
|
|
|
|
|
|
Average interest-earning assets to |
|
|
|
|
|
|
average interest-bearing liabilities |
|
| 124.01% |
|
| 121.44% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Twelve |
|
| Twelve |
|
|
|
| months ended |
|
| months ended |
|
|
|
| 12/31/2018 |
|
| 12/31/2017 |
|
|
| Average | Interest | Average | Average | Interest | Average |
|
| Outstanding | Earned/ | Yield/ | Outstanding | Earned/ | Yield/ |
|
| Balance | Paid | Rate | Balance | Paid | Rate |
|
| (000) | (000) | (annualized) | (000) | (000) | (annualized) |
Interest-earning Assets: |
|
|
|
|
|
|
Interest -bearing deposits | $22,927 | $250 | 1.09% | $21,465 | $130 | 0.61% |
Mortgage-backed securities: |
|
|
|
|
|
|
Available-for-sale | 203,891 | 5,513 | 2.70 | 156,887 | 3,814 | 2.43 |
Investment securities: |
|
|
|
|
|
|
Available-for-sale | 149,535 | 4,850 | 3.24 | 98,493 | 3,223 | 3.27 |
Loans receivable | 1,427,436 | 68,475 | 4.80 | 1,185,956 | 51,231 | 4.32 |
Stock in FHLB of Indianapolis | 12,557 | 606 | 4.83 | 11,167 | 470 | 4.21 |
Total interest-earning assets (2) | 1,816,346 | 79,694 | 4.39 | 1,473,968 | 58,868 | 3.99 |
Non-interest earning assets, net of allowance |
|
|
|
|
|
|
for loan losses and unrealized gain/loss | 127,142 |
|
| 97,768 |
|
|
Total assets | $1,943,488 |
|
| $1,571,736 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-Bearing Liabilities: |
|
|
|
|
|
|
Demand and NOW accounts | $385,681 | 2,462 | 0.64 | $307,395 | 1,242 | 0.40 |
Savings deposits | 180,065 | 20 | 0.01 | 139,335 | 15 | 0.01 |
Money market accounts | 191,433 | 1,027 | 0.54 | 172,163 | 645 | 0.37 |
Certificate accounts | 455,431 | 7,347 | 1.61 | 382,134 | 4,913 | 1.29 |
Total deposits | 1,212,610 | 10,856 | 0.90 | 1,001,027 | 6,815 | 0.68 |
Borrowings | 260,994 | 5,735 | 2.20 | 220,648 | 3,796 | 1.72 |
Total interest-bearing liabilities | 1,473,604 | 16,591 | 1.13 | 1,221,675 | 10,611 | 0.87 |
Non-interest bearing deposit accounts | 267,812 |
|
| 188,203 |
|
|
Other liabilities | 17,315 |
|
| 15,282 |
|
|
Total liabilities | 1,758,731 |
|
| 1,425,160 |
|
|
Stockholders' equity | 184,757 |
|
| 146,576 |
|
|
Total liabilities and stockholders' equity | $1,943,488 |
|
| $1,571,736 |
|
|
|
|
|
|
|
|
|
|
Net interest earning assets | $342,742 |
|
| $252,293 |
|
|
|
|
|
|
|
|
|
|
Net interest income |
| $63,103 |
|
| $48,257 |
|
|
|
|
|
|
|
|
|
Net interest rate spread (4) |
|
| 3.26% |
|
| 3.13% |
|
|
|
|
|
|
|
|
Net yield on average interest-earning assets (4) |
|
| 3.47% |
|
| 3.27% |
|
|
|
|
|
|
|
|
Net yield on average interest-earning assets, tax equivalent (3)(4) |
|
| 3.55% |
|
| 3.38% |
|
|
|
|
|
|
|
|
Average interest-earning assets to |
|
|
|
|
|
|
average interest-bearing liabilities |
|
| 123.26% |
|
| 120.65% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months | Three Months | Three Months |
| Twelve Months | Twelve Months |
|
| Ended | Ended | Ended |
| Ended | Ended |
|
| December 31, | September 30, | December 31, |
| December 31, | December 31, |
Selected Financial Ratios and Other Financial Data (Unaudited): | 2018 | 2018 | 2017 |
| 2018 | 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share and per share data: |
|
|
|
|
|
|
Average common shares outstanding: |
|
|
|
|
|
|
Basic | 8,590,729 | 8,587,424 | 7,389,394 |
| 8,394,195 | 7,360,066 |
Diluted | 8,732,290 | 8,733,691 | 7,526,416 |
| 8,543,544 | 7,502,059 |
Per common share: |
|
|
|
|
|
|
Basic earnings | $ 0.62 | $ 0.63 | $ 0.20 |
| $ 2.25 | $ 1.67 |
Diluted earnings | $ 0.61 | $ 0.62 | $ 0.19 |
| $ 2.21 | $ 1.64 |
Dividends | $ 0.20 | $ 0.18 | $ 0.18 |
| $ 0.74 | $ 0.66 |
|
|
|
|
|
|
|
|
Dividend payout ratio | 32.79% | 29.03% | 94.74% |
| 33.48% | 40.24% |
|
|
|
|
|
|
|
|
Performance Ratios: |
|
|
|
|
|
|
Return on average assets (ratio of net |
|
|
|
|
|
|
income to average total assets)(4) | 1.04% | 1.07% | 0.37% |
| 0.97% | 0.78% |
Return on average tangible common equity (ratio of net |
|
|
|
|
|
|
income to average tangible common equity)(4) | 12.56% | 12.92% | 3.89% |
| 11.66% | 8.52% |
Interest rate spread information: |
|
|
|
|
|
|
Average during the period(4) | 3.22% | 3.27% | 3.11% |
| 3.26% | 3.13% |
|
|
|
|
|
|
|
|
Net interest margin(4)(5) | 3.47% | 3.50% | 3.27% |
| 3.47% | 3.27% |
|
|
|
|
|
|
|
|
Efficiency Ratio | 68.93% | 67.93% | 70.05% |
| 71.04% | 69.35% |
|
|
|
|
|
|
|
|
Ratio of average interest-earning |
|
|
|
|
|
|
assets to average interest-bearing |
|
|
|
|
|
|
liabilities | 124.01% | 123.45% | 121.44% |
| 123.26% | 120.65% |
|
|
|
|
|
|
|
|
Allowance for loan losses: |
|
|
|
|
|
|
Balance beginning of period | $ 13,009 | $ 12,729 | $ 12,378 |
| $ 12,387 | $ 12,382 |
Net charge-offs (recoveries): |
|
|
|
|
|
|
Real Estate: |
|
|
|
|
|
|
Commercial | 40 | 0 | 0 |
| 93 | (1) |
Commercial construction and development | 0 | 0 | 0 |
| 0 | 0 |
Consumer closed end first mortgage | 23 | 65 | 24 |
| 156 | 271 |
Consumer open end and junior liens | 0 | 16 | 0 |
| 36 | 21 |
Total real estate loans | 63 | 81 | 24 |
| 285 | 291 |
Other loans: |
|
|
|
|
|
|
Auto | 5 | 47 | 5 |
| 41 | 32 |
Boat/RV | 212 | 65 | 208 |
| 593 | 603 |
Other | 48 | 72 | 37 |
| 208 | 151 |
Commercial and industrial | 0 | 25 | 67 |
| 99 | 138 |
Total other | 265 | 209 | 317 |
| 941 | 924 |
|
|
|
|
|
|
|
|
Net charge-offs (recoveries) | 328 | 290 | 341 |
| 1,226 | 1,215 |
Provision for loan losses | 600 | 570 | 350 |
| 2,120 | 1,220 |
Balance end of period | $ 13,281 | $ 13,009 | $ 12,387 |
| $ 13,281 | $ 12,387 |
|
|
|
|
|
|
|
|
Net loan charge-offs to average loans (4) | 0.09% | 0.08% | 0.11% |
| 0.09% | 0.10% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| December 31, | September 30, | December 31, |
|
|
|
|
| 2018 | 2018 | 2017 |
|
|
|
|
|
|
|
|
|
|
|
Total shares outstanding | 8,603,462 | 8,587,424 | 7,389,394 |
|
|
|
Tangible book value per common share | $ 20.51 | $ 19.50 | $ 20.08 |
|
|
|
Tangible common equity to tangible assets | 8.72% | 8.39% | 9.35% |
|
|
|
|
|
|
|
|
|
|
|
Nonperforming assets (000's) |
|
|
|
|
|
|
Non-accrual loans |
|
|
|
|
|
|
Real Estate: |
|
|
|
|
|
|
Commercial | $ 4,782 | $ 1,759 | $ 1,107 |
|
|
|
Commercial construction and development | 62 | 52 | - |
|
|
|
Consumer closed end first mortgage | 2,777 | 2,503 | 3,409 |
|
|
|
Consumer open end and junior liens | 273 | 205 | 309 |
|
|
|
Total real estate loans | 7,894 | 4,519 | 4,825 |
|
|
|
Other loans: |
|
|
|
|
|
|
Auto | 88 | 40 | 22 |
|
|
|
Boat/RV | 470 | 696 | 198 |
|
|
|
Other | 46 | 48 | 16 |
|
|
|
Commercial and industrial | 91 | 416 | 159 |
|
|
|
Total other | 695 | 1,200 | 395 |
|
|
|
Total non-accrual loans | 8,589 | 5,719 | 5,220 |
|
|
|
Accruing loans past due 90 days or more | 517 | 0 | 31 |
|
|
|
Total nonperforming loans | 9,106 | 5,719 | 5,251 |
|
|
|
Real estate owned | 1,223 | 1,195 | 251 |
|
|
|
Other repossessed assets | 790 | 335 | 482 |
|
|
|
Total nonperforming assets | $ 11,119 | $ 7,249 | $ 5,984 |
|
|
|
|
|
|
|
|
|
|
|
Performing restructured loans (6) | $ 2,571 | $ 2,148 | $ 1,389 |
|
|
|
|
|
|
|
|
|
|
|
Asset Quality Ratios: |
|
|
|
|
|
|
Non-performing assets to total assets | 0.54% | 0.36% | 0.38% |
|
|
|
Non-performing loans to total loans | 0.61% | 0.39% | 0.44% |
|
|
|
Allowance for loan losses to non-performing loans | 146% | 227% | 236% |
|
|
|
Allowance for loan losses to loans receivable | 0.89% | 0.88% | 1.05% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months | Three Months | Three Months |
| Twelve Months | Twelve Months |
|
| Ended | Ended | Ended |
| Ended | Ended |
|
| December 31, | September 30, | December 31, |
| December 31, | December 31, |
Non-GAAP Measurements (7) | 2018 | 2018 | 2017 |
| 2018 | 2017 |
|
|
|
|
|
|
|
|
Total stockholders' equity (GAAP) | $ 202,363 | $ 193,710 | $ 150,282 |
| $ 202,363 | $ 150,282 |
Less: Intangible assets | 25,879 | 26,297 | 1,927 |
| 25,879 | 1,927 |
Tangible common equity (non-GAAP) | $ 176,484 | $ 167,413 | $ 148,355 |
| $ 176,484 | $ 148,355 |
|
|
|
|
|
|
|
|
Total assets (GAAP) | $ 2,049,313 | $ 2,021,171 | $ 1,588,932 |
| $ 2,049,313 | $ 1,588,932 |
Less: Intangible assets | 25,879 | 26,297 | 1,927 |
| 25,879 | 1,927 |
Tangible assets (non-GAAP) | $ 2,023,434 | $ 1,994,874 | $ 1,587,005 |
| $ 2,023,434 | $ 1,587,005 |
|
|
|
|
|
|
|
|
Tangible common equity to tangible assets (non-GAAP) | 8.72% | 8.39% | 9.35% |
| 8.72% | 9.35% |
|
|
|
|
|
|
|
|
Book value per common share (GAAP) | $ 23.52 | $ 22.56 | $ 20.34 |
| $ 23.52 | $ 20.34 |
Less: Effect of intangible assets | 3.01 | 3.06 | 0.26 |
| 3.01 | 0.26 |
Tangible book value per common share | $ 20.51 | $ 19.50 | $ 20.08 |
| $ 20.51 | $ 20.08 |
|
|
|
|
|
|
|
|
Return on average stockholders' equity (GAAP) | 10.87% | 11.16% | 3.84% |
| 10.21% | 8.40% |
Add: Effect of intangible assets | 1.69% | 1.76% | 0.05% |
| 1.45% | 0.12% |
Return on average tangible common equity (non-GAAP) | 12.56% | 12.92% | 3.89% |
| 11.66% | 8.52% |
|
|
|
|
|
|
|
|
Total tax free interest income (GAAP) |
|
|
|
|
|
|
Loans receivable | $ 106 | $ 106 | $ 104 |
| $ 420 | $ 424 |
Investment securities | 1,226 | 1,185 | 743 |
| 4,494 | 2,752 |
Total tax free interest income | $ 1,332 | $ 1,291 | $ 847 |
| $ 4,914 | $ 3,176 |
Total tax free interest income, gross (at 21%, or 34% prior to 2018) | $ 1,686 | $ 1,634 | $ 1,283 |
| $ 6,220 | $ 4,812 |
|
|
|
|
|
|
|
|
Net interest margin, tax equivalent (non-GAAP) |
|
|
|
|
|
|
Net interest income (GAAP) | $ 16,494 | $ 16,417 | $ 12,193 |
| $ 63,103 | $ 48,257 |
Add: Tax effect tax free interest income (3) | 354 | 343 | 436 |
| 1,306 | 1,636 |
Net interest income (non-GAAP) | 16,848 | 16,760 | 12,629 |
| 64,409 | 49,893 |
Divided by: Average interest-earning assets | 1,898,949 | 1,878,841 | 1,489,596 |
| 1,816,346 | 1,473,968 |
Net interest margin, tax equivalent | 3.55% | 3.57% | 3.39% |
| 3.55% | 3.38% |
|
|
|
|
|
|
|
|
One-time merger related expenses |
|
|
|
|
|
|
Non-tax deductible | $ - | $ - |
|
| $ 220 |
|
Tax deductible | 79 | 238 |
|
| 2,158 |
|
Total one-time merger related expenses | $ 79 | $ 238 |
|
| $ 2,378 |
|
Subtract tax benefit | 17 | 50 |
|
| 453 |
|
Net one-time merger related expenses | $ 62 | $ 188 |
|
| $ 1,925 |
|
Net income (GAAP) | 5,290 | 5,402 |
|
| 18,864 |
|
Net income excluding one-time merger expenses (non-GAAP) | $ 5,352 | $ 5,590 |
|
| $ 20,789 |
|
|
|
|
|
|
|
|
|
Adjusted diluted earnings per share |
|
|
|
|
|
|
Net income excluding one-time merger expenses (non-GAAP) | $ 5,352 | $ 5,590 |
|
| $ 20,789 |
|
Average diluted shares | 8,732,290 | 8,733,691 |
|
| 8,543,544 |
|
Adjusted diluted earnings per share (non-GAAP) | $ 0.61 | $ 0.64 |
|
| $ 2.43 |
|
|
|
|
|
|
|
|
|
Adjusted return on assets |
|
|
|
|
|
|
Net income excluding one-time merger expenses (non-GAAP) | $ 5,352 | $ 5,590 |
|
| $ 20,789 |
|
Average assets | 2,028,923 | 2,012,937 |
|
| 1,943,488 |
|
Adjusted return on average assets (non-GAAP) | 1.06% | 1.11% |
|
| 1.07% |
|
|
|
|
|
|
|
|
|
Adjusted return on tangible common equity |
|
|
|
|
|
|
Net income excluding one-time merger expenses (non-GAAP) | $ 5,352 | $ 5,590 |
|
| $ 20,789 |
|
Average tangible common equity | 168,443 | 167,207 |
|
| 161,788 |
|
Adjusted return on average tangible common equity (non-GAAP) | 12.71% | 13.37% |
|
| 12.85% |
|
|
|
|
|
|
|
|
|
Ratio Summary: |
|
|
|
|
|
|
Return on average equity | 10.87% | 11.16% | 3.84% |
| 10.21% | 8.40% |
Return on average tangible common equity | 12.56% | 12.92% | 3.89% |
| 11.66% | 8.52% |
Return on average assets | 1.04% | 1.07% | 0.37% |
| 0.97% | 0.78% |
Tangible common equity to tangible assets | 8.72% | 8.39% | 9.35% |
| 8.72% | 9.35% |
Net interest margin, tax equivalent | 3.55% | 3.57% | 3.39% |
| 3.55% | 3.38% |
|
| ||||||
(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 for 2018 and 34% applicable tax rate prior to 2018. | ||||||
|
| ||||||
(4) Ratios for the three month periods have been annualized. | ||||||
|
| ||||||
(5) Net interest income divided by average interest earning assets. | ||||||
|
| ||||||
(6) Performing restructured loans are excluded from non-performing ratios. Restructured loans that are on non-accrual are in the non-accrual loan categories. | ||||||
|
| ||||||
(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