EXHIBIT 99.1
Date: | April 21, 2003 |
From: | MutualFirst Financial, Inc. |
For Publication: | Immediately |
Contact: | Tim McArdle, Senior Vice President and Treasurer of MutualFirst Financial, Inc. (765) 747-2818 |
MutualFirst Financial, Inc. (NASDAQ: MFSF), the holding company of Mutual Federal Savings Bank (the "Bank"), announced today that net income for the first quarter ended March 31, 2003 was $2.1 million, or $.42 for basic and $.40 for diluted earnings per share. This compared to net income for the comparable period in 2002 of $1.9 million or $.32 for both basic and diluted earnings per share. The 25% increase in diluted earnings per share was a result of increased earnings and share repurchases during the quarter. Annualized return on assets was 1.07% and return on equity was 8.68% for the first quarter of 2003 compared to .98% and 7.04% respectively, for the same period of last year.
Assets totaled $776.5 million at March 31, 2003, an increase from December 31, 2002 of $675,000. Loans, excluding loans held for sale, increased $13.4 million. Consumer loans were little changed, and commercial business loans increased $1.9 million, or 5.4%, while residential mortgage loans held in portfolio increased $10.5 million. Mortgage loans held for sale decreased $4.0 million and mortgage loans sold during the quarter totaled $10.4 million.
Allowance for loan losses increased $153,000 from $6.3 million at December 31, 2002 to $6.4 million at March 31, 2003. Net charge offs for the quarter ended March 31, 2003 were $220,000 or .13% of average loans on an annualized basis compared to $193,000, or .12% of average loans for the comparable period in 2002.
Total deposits were $555.9 million at March 31, 2003 an increase of $5.5 million, or 1.0% from December 31, 2002. Of this growth, $2.6 million was in non-interest bearing deposits. Total borrowings decreased $3.0 million to $115.3 million at March 31, 2003 from $118.3 million at December 31, 2002.
Stockholders' equity decreased $3.6 million, or 3.7%, from $96.7 million at December 31, 2002, to $93.1 million at March 31, 2003. The decrease was due primarily to the repurchase of 255,000 shares of common stock for $5.4 million and dividend payments of $521,000. These decreases were partially offset by net income of $2.1 million, Employee Stock Ownership Plan (ESOP) shares earned of $168,000, and RRP shares earned of $113,000. Also, unrealized gain on securities available for sale decreased $70,000.
Net interest income increased $197,000 or 3.0%, from $6.6 million for the three months ended March 31, 2002, to $6.8 million for the three months ended March 31, 2003. The average interest rate spread increased from 3.47% for the three-month period ended March 31, 2002, to 3.67% for the comparable period in 2003 as yields on interest- earning assets decreased at a slower rate than the decrease in the cost of interest-bearing liabilities.
The provision for loan losses for the first quarter of 2003 was $375,000 compared to $587,000 for the same period in 2002. Non-performing loans to total loans at March 31, 2003 were .71%, compared to .78% at December 31, 2002. Non-performing assets to total assets were .81% at March 31, 2003 compared to .89% at December 31, 2002. The Bank believes that it has adequate collateral and reserves to absorb potential losses.
Non-interest income increased $234,000, or 19.9%, to $1.4 million for the three months ended March 31, 2003 compared to $1.2 million for the same period in 2002. The increase was primarily due to a gain on sale of loans of $350,000 in the first quarter of 2003 compared to no gain in the comparable 2002 quarter. This was partially offset by increased losses of $109,000 in the limited partnerships in the first quarter of 2003 compared to the comparable 2002 period.
Non-interest expense increased $295,000 or 6.3% to $5.0 million for the three months ended March 31, 2003 compared to $4.7 million for the same period in 2002. Salaries and employee benefits were $3.3 million for the three months ended March 31, 2003 compared to $3.0 million for the 2002 period, an increase of $247,000 or 8.2%. The change in salaries and benefits included a $208,000 increase in health insurance premium costs due to increased health care costs and an increased level of claims experience. Also included was a $41,000 increase in our ESOP expense due to the increase in the market value of our stock. All other expenses increased $48,000 or 2.9% for the three-month period ended March 31, 2003 compared to the same period in 2002.
Income tax expense increased $166,000 for the three months ended March 31, 2003 compared to the same period in 2002. The increase resulted from increased taxable income and an increase in the effective tax rate from 26.2% to 28.8% due to less non- taxable income.
MutualFirst Financial, Inc. and Mutual Federal Savings Bank are headquartered in Muncie, Indiana with seventeen full service offices in Delaware, Randolph, Kosciusko and Grant counties.
Statements contained in this release, which are not historical facts, are forward-looking statements, as that term is defined in the Private Securities Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time.
Selected Financial Condition Data (Unaudited): | 31-Mar 2003 (000) | 31-Dec 2002 (000) |
Total Assets | $776,473 | $775,798 |
Cash and cash equivalents | 19,098 | 23,620 |
Loans held for sale | 3,879 | 7,851 |
Loans receivable, net | 654,402 | 641,113 |
Investment securities available for sale, at market value | 37,698 | 42,362 |
Total deposits | 555,911 | 550,364 |
Total borrowings | 115,289 | 118,287 |
Total stockholders' equity | 93,150 | 96,717 |
Selected Operations Data (Unaudited): | Three Months Ended 31-Mar 2003 | Three Months Ended 31-Dec 2002 | Three Months Ended 31-Mar 2002 | |
(000) | (000) | (000) | ||
Total interest income | $11,791 | $12,418 | $12,755 | |
Total interest expense | 4,964 | 5,396 | 6,125 | |
Net interest income | 6,827 | 7,022 | 6,630 | |
Provision for loan losses | 375 | 375 | 587 | |
Net interest income after provision | ||||
for loan losses | 6,452 | 6,647 | 6,043 | |
Non-interest income | ||||
Fees and service charges | 699 | 775 | 607 | |
Equity in losses of limited partnerships | (147) | (248) | (37) | |
Commissions | 175 | 201 | 189 | |
Net gain on loan sales | 350 | 592 | 0 | |
Increase in cash surrender value of life insurance | 294 | 306 | 300 | |
Other income | 34 | 13 | 113 | |
Total non-interest income | 1,405 | 1,639 | 1,172 | |
Non-interest expense | ||||
Salaries and benefits | 3,256 | 3,198 | 3,009 | |
Occupancy and equipment | 643 | 698 | 525 | |
Data processing fees | 159 | 181 | 194 | |
Deposit insurance expense | 23 | 23 | 24 | |
Marketing | 95 | 99 | 93 | |
Other expenses | 779 | 838 | 816 | |
Total non-interest expense | 4,955 | 5,037 | 4,661 | |
Income before taxes | 2,902 | 3,249 | 2,554 | |
Income tax provision | 835 | 992 | 670 | |
Net income | $2,067 | $2,257 | $1,884 |
Selected Financial Ratios and Other Financial Data (Unaudited): | Three Months Ended 31-Mar 2003 | Three Months Ended 31-Dec 2002 | Three Months Ended 31-Mar 2002 | |||
Share and per share data: | ||||||
Average common shares outstanding | ||||||
Basic | 4,969,482 | 5,089,704 | 5,848,967 | |||
Diluted | 5,123,491 | 5,224,655 | 5,915,690 | |||
Per share: | ||||||
Basic earnings | $0.42 | $0.44 | $0.32 | |||
Diluted earnings | $0.40 | $0.43 | $0.32 | |||
Dividends | $0.10 | $0.10 | $0.09 | |||
Dividend payout ratio | 25.00% | 23.26% | 28.13% | |||
Performance Ratios: | ||||||
Return on average assets (ratio of net | ||||||
income to average total assets)(1) | 1.07% | 1.15% | 0.98% | |||
Return on average equity (ratio of net | ||||||
income to average equity)(1) | 8.68% | 9.67% | 7.04% | |||
Interest rate spread information: | ||||||
Average during the period(1) | 3.67% | 3.73% | 3.47% | |||
Net interest margin(1)(2) | 3.85% | 3.92% | 3.77% | |||
Efficiency ratio | 60.19% | 58.15% | 59.74% | |||
Ratio of average interest-earning | ||||||
assets to average interest-bearing | ||||||
liabilities | 106.79% | 106.77% | 108.70% | |||
Allowance for loan losses: | ||||||
Balance beginning of period | $6,286 | $6,601 | $5,449 | |||
Charge offs: | ||||||
One- to four- family | 55 | 147 | 40 | |||
Multi-family | 0 | 0 | 0 | |||
Commercial real estate | 0 | 220 | 0 | |||
Construction or development | 0 | 0 | 0 | |||
Consumer loans | 171 | 272 | 168 | |||
Commercial business loans | 19 | 88 | 10 | |||
Sub-total | 245 | 727 | 218 | |||
Recoveries: | ||||||
One- to four- family | 3 | 22 | 8 | |||
Multi-family | 0 | 0 | 0 | |||
Commercial real estate | 0 | 0 | 0 | |||
Construction or development | 0 | 0 | 0 | |||
Consumer loans | 22 | 15 | 17 | |||
Commercial business loans | 0 | 0 | 0 | |||
Sub-total | 25 | 37 | 25 | |||
Net charge offs | 220 | 690 | 193 | |||
Additions charged to operations | 375 | 375 | 588 | |||
Balance end of period | $6,441 | $6,286 | $5,844 | |||
Net loan charge-offs to average loans (1) | 0.13% | 0.42% | 0.12% |
March 31, 2003 | December 31, 2002 | March 31, 2002 | |||||
Total shares outstanding | 5,275,774 | 5,523,052 | 6,325,078 | ||||
Tangible book value per share | $17.48 | $16.95 | $16.55 | ||||
Nonperforming assets (000's) | |||||||
Loans: Non-accrual | $4,607 | $5,032 | $6,189 | ||||
Past due 90 days or more | 81 | 64 | 456 | ||||
Restructured | 0 | 0 | 0 | ||||
Total nonperforming loans | 4,688 | 5,096 | 6,645 | ||||
Real estate owned | 1,160 | 1,473 | 1,075 | ||||
Other repossessed assets | 448 | 335 | 501 | ||||
Total nonperforming assets | $6,296 | $6,904 | $8,221 | ||||
Asset Quality Ratios: | |||||||
Non-performing assets to total assets | 0.81% | 0.89% | 1.07% | ||||
Non-performing loans to total loans | 0.71% | 0.78% | 1.03% | ||||
Allowance for loan losses to non-performing loans | 137.39% | 123.35% | 87.95% | ||||
Allowance for loan losses to loans receivable | 0.97% | 0.97% | 0.88% |
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(1) Ratios have been annualized.
(2) Net interest income divided by average interest earning assets.