Date: | July 17, 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 second quarter ended June 30, 2003 was $2.4 million, or $.49 for basic and $.47 for diluted earnings per share. This compared to net income for the comparable period in 2002 of $2.0 million, or $.35 for basic and $.34 for diluted earnings per share. The 38.2% increase in diluted earnings per share was a result of share repurchases and increased earnings during the quarter. Annualized return on assets was 1.21% and return on equity was 10.15% for the second quarter of 2003 compared to 1.07% and 7.71% respectively, for the same period of last year.
Net income for the six months ended June 30, 2003 was $4.5 million or $.89 for basic and $.86 for diluted earnings per share. This compared to net income for the comparable period in 2002 of $3.9 million or $.67 for basic and $.66 for diluted earnings per share. The 30.3% increase in diluted earnings per share was a result of share repurchases and increased earnings during the period. Annualized return on assets was 1.14% and return on equity was 9.41% for the first half of 2003 compared to 1.01% and 7.37% respectively, for the same period of last year.
Assets totaled $799.9 million at June 30, 2003, an increase from December 31, 2002 of $24.1 million. Loans, excluding loans held for sale, increased $29.9 million or 4.6%. Consumer loans increased $8.4 million, or 4.8%, and commercial business loans increased $3.7 million, or 10.7%, while residential mortgage loans held in portfolio increased $12.2 million. Mortgage loans held for sale increased $3.8 million and mortgage loans sold during the quarter totaled $18.2 million.
Allowance for loan losses increased $253,000 from $6.3 million at December 31, 2002 to $6.5 million at June 30, 2003. Net charge offs for the first half of 2003 were $496,000 or .15% of average loans on an annualized basis compared to $472,000, or .14% of average loans for the comparable period in 2002. As of June 30, 2003 allowance for loan losses as a percentage of loans receivable and non-performing loans was .97% and 163.30%, respectively.
Total deposits were $575.3 million at June 30, 2003 an increase of $24.9 million, or 4.5% from December 31, 2002. Of this growth, $5.1 million was in non-interest bearing deposits. Total borrowings decreased $766,000 to $117.5 million at June 30, 2003 from $118.3 million at December 31, 2002.
Stockholders' equity decreased $1.7 million, or 1.8%, from $96.7 million at December 31, 2002, to $95.0 million at June 30, 2003. The decrease was due primarily to the repurchase of 274,778 shares of common stock for $5.9 million and dividend payments of $1.0 million. These decreases were partially offset by net income of $4.5 million, Employee Stock Ownership Plan (ESOP) shares earned of $348,000, and RRP shares earned of $225,000. Also, unrealized gain on securities available for sale decreased $185,000 from $464,000 at December 31, 2002 to $279,000 at June 30, 2003.
Net interest income increased $81,000 from $6.8 million for the three months ended June 30, 2002, to $6.9 million for the three months ended June 30, 2003. The average interest rate spread increased from 3.58% for the three-month period ended June 30, 2002, to 3.65% for the comparable period in 2003 as yields on interest-earning assets decreased at a slightly slower rate than the decrease in the cost of interest-bearing liabilities. Net interest income increased $278,000 from $13.4 million for the six months ended June 30, 2002, to $13.7 million for the six months ended June 30, 2003. The average interest rate spread increased from 3.52% for the six-month period ended June 30, 2002, to 3.65% for the comparable period in 2003 for the same reason mentioned above.
The provision for loan losses for the second quarter of 2003 was $375,000, the same as last year's comparable period. Non-performing loans to total loans at June 30, 2003 were .58% compared to ..78% at December 31, 2002. Non-performing assets to total assets were .68% at June 30, 2003 compared to .89% at December 31, 2002.
Non-interest income increased $600,000 or 43.0%, to $2.0 million for the three months ended June 30, 2003 compared to $1.4 million for the same period in 2002. The increase was primarily due to a gain on sale of loans of $573,000 in the second quarter of 2003 compared to $202,000 in the comparable 2002 quarter. Also, increase in cash surrender value of life insurance was up $194,000 for the 2003 second quarter when compared to the comparable 2002 quarter due to the receipt of life insurance proceeds following the death of a former director of Marion Capital Inc. (a December, 2000 merger partner). In addition, service fee income increased $60,000. Non-interest income for the six months ended June 30, 2003 increased $832,000 from $2.6 million for the six months ended June 30, 2002 to $3.4 million. This increase was due primarily to a $720,000 increase in gain on sale of loans in the 2003 period compared to the comparable period in 2002.
Non-interest expense increased $105,000 or 2.1% to $5.2 million for the three months ended June 30, 2003 compared to $5.1 million for the same period in 2002. For the six-month period non-interest expense was up $400,000 when comparing the first half of 2003 to the same period in 2002. The majority of this increase was due to a $270,000 increase in health insurance premium costs.
Income tax expense increased $197,000 for the three months ended June 30, 2003 compared to the same period in 2002. The increase resulted from increased taxable income and an increase in the effective tax rate from 27.1% to 28.3%, due to less non- taxable income. For the six-month period ended June 30, 2003, income tax expense increased $360,000 compared to the same period in 2002. The increase was due primarily to increased taxable income. The effective tax rate increased from 26.7% to 28.5% when comparing the two six month periods ended June 30, 2002 and 2003, respectively.
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.
MUTUALFIRST FINANCIAL INC. | ||
Selected Financial Condition Data (Unaudited): | 30-Jun 2003 | 31-Dec 2002 |
(000) | (000) | |
Total Assets | $799,913 | $775,798 |
Cash and cash equivalents | 22,481 | 23,620 |
Loans held for sale | 11,667 | 7,851 |
Loans receivable, net | 670,736 | 641,113 |
Investment securities available for sale, | ||
at market value | 33,295 | 42,362 |
Total deposits | 575,271 | 550,364 |
Total borrowings | 117,521 | 118,287 |
Total stockholders' equity | 94,962 | 96,717 |
Selected Operations Data (Unaudited): | Three Months Ended 30-Jun 2003 | Three Months Ended 31-Mar 2003 | Three Months Ended 30-Jun 2002 | Six Months Ended 30-Jun 2003 | Six Months Ended 30-Jun 2002 | |
(000) | (000) | (000) | (000) | (000) | ||
Total interest income | $11,737 | $11,791 | $12,716 | $23,528 | $25,471 | |
Total interest expense | 4,828 | 4,964 | 5,888 | 9,792 | 12,013 | |
Net interest income | 6,909 | 6,827 | 6,828 | 13,736 | 13,458 | |
Provision for loan losses | 375 | 375 | 375 | 750 | 963 | |
Net interest income after provision | ||||||
for loan losses | 6,534 | 6,452 | 6,453 | 12,986 | 12,495 | |
Non-interest income | ||||||
Fees and service charges | 748 | 699 | 688 | 1,447 | 1,295 | |
Equity in losses of limited partnerships | (78) | (147) | (101) | (225) | (139) | |
Commissions | 175 | 175 | 189 | 350 | 379 | |
Net gain on loan sales | 573 | 350 | 202 | 923 | 202 | |
Increase in cash surrender value | ||||||
of life insurance | 502 | 294 | 308 | 796 | 608 | |
Other income | 70 | 34 | 106 | 105 | 219 | |
Total non-interest income | 1,990 | 1,405 | 1,392 | 3,396 | 2,564 | |
Non-interest expense | ||||||
Salaries and benefits | 3,221 | 3,256 | 3,161 | 6,477 | 6,170 | |
Occupancy and equipment | 642 | 643 | 647 | 1,284 | 1,172 | |
Data processing fees | 151 | 159 | 200 | 310 | 393 | |
Deposit insurance expense | 22 | 23 | 23 | 45 | 48 | |
Marketing | 227 | 95 | 115 | 323 | 208 | |
Other expenses | 926 | 779 | 938 | 1,706 | 1,753 | |
Total non-interest expense | 5,189 | 4,955 | 5,084 | 10,145 | 9,744 | |
Income before taxes | 3,335 | 2,902 | 2,761 | 6,237 | 5,315 | |
Income tax provision | 945 | 835 | 748 | 1,780 | 1,418 | |
Net income | $2,390 | $2,067 | $2,013 | $4,457 | $3,897 |
Selected Financial Ratios and Other Financial Data (Unaudited): | Three Months Ended 30-Jun 2003 | Three Months Ended 31-Mar 2003 | Three Months Ended 30-Jun 2002 | Six Months Ended 30-Jun 2003 | Six Months Ended 30-Jun 2002 | |
Share and per share data: | ||||||
Average common shares outstanding | ||||||
Basic | 4,869,462 | 4,969,482 | 5,739,746 | 5,002,173 | 5,793,963 | |
Diluted | 5,044,636 | 5,123,491 | 5,870,259 | 5,166,765 | 5,892,581 | |
Per share: | ||||||
Basic earnings | $0.49 | $0.42 | $0.35 | $0.89 | $0.67 | |
Diluted earnings | $0.47 | $0.40 | $0.34 | $0.86 | $0.66 | |
Dividends | $0.10 | $0.10 | $0.09 | $0.20 | $0.18 | |
Dividend payout ratio | 21.28% | 25.00% | 26.47% | 23.26% | 27.27% | |
Performance Ratios: | ||||||
Return on average assets (ratio of net | ||||||
income to average total assets)(1) | 1.21% | 1.07% | 1.04% | 1.14% | 1.01% | |
Return on average equity (ratio of net | ||||||
income to average equity)(1) | 10.15% | 8.68% | 7.71% | 9.41% | 7.37% | |
Interest rate spread information: | ||||||
Average during the period(1) | 3.65% | 3.67% | 3.58% | 3.65% | 3.52% | |
Net interest margin(1)(2) | 3.81% | 3.85% | 3.85% | 3.83% | 3.81% | |
Efficiency Ratio | 58.31% | 60.19% | 61.85% | 59.22% | 60.82% | |
Ratio of average interest-earning | ||||||
assets to average interest-bearing | ||||||
liabilities | 106.38% | 106.79% | 108.22% | 106.58% | 108.46% | |
Allowance for loan losses: | ||||||
Balance beginning of period | $6,441 | $6,286 | $5,844 | $6,286 | $5,449 | |
Charge offs: | ||||||
One- to four- family | 38 | 55 | 20 | 93 | 60 | |
Multi-family | 0 | 0 | 0 | 0 | 0 | |
Commercial real estate | 114 | 0 | 300 | 114 | 300 | |
Construction or development | 0 | 0 | 0 | 0 | 0 | |
Consumer loans | 210 | 171 | 162 | 381 | 330 | |
Commercial business loans | 0 | 19 | 158 | 19 | 168 | |
Sub-total | 362 | 245 | 640 | 607 | 858 | |
Recoveries: | ||||||
One- to four- family | 24 | 3 | 0 | 27 | 8 | |
Multi-family | 0 | 0 | 0 | 0 | 0 | |
Commercial real estate | 0 | 0 | 348 | 0 | 348 | |
Construction or development | 0 | 0 | 0 | 0 | 0 | |
Consumer loans | 58 | 22 | 13 | 80 | 30 | |
Commercial business loans | 3 | 0 | 0 | 3 | 0 | |
Sub-total | 85 | 25 | 361 | 110 | 386 | |
Net charge offs | 277 | 220 | 279 | 497 | 472 | |
Additions charged to operations | 375 | 375 | 375 | 750 | 963 | |
Balance end of period | $6,539 | $6,441 | $5,940 | $6,539 | $5,940 | |
Net loan charge-offs to average loans (1) | 0.16% | 0.13% | 0.17% | 0.15% | 0.14% |
June 30, 2003 | December 31, 2002 | June 30, 2002 | |
Total shares outstanding | 5,267,974 | 5,523,052 | 6,040,141 |
Tangible book value per share | $17.85 | $16.95 | $16.74 |
Nonperforming assets (000's) | |||
Loans: Non-accrual | $3,915 | $5,032 | $5,549 |
Past due 90 days or more | 90 | 64 | 175 |
Restructured | 0 | 0 | 0 |
Total nonperforming loans | 4,005 | 5,096 | 5,724 |
Real estate owned | 928 | 1,473 | 620 |
Other repossessed assets | 494 | 335 | 426 |
Total nonperforming assets | $5,427 | $6,904 | $6,770 |
Asset Quality Ratios: | |||
Non-performing assets to total assets | 0.68% | 0.89% | 0.87% |
Non-performing loans to total loans | 0.58% | 0.78% | 0.88% |
Allowance for loan losses to non-performing loans | 163.27% | 126.39% | 103.77% |
Allowance for loan losses to loans receivable | 0.97% | 0.97% | 0.91% |
(1) | Ratios for the three and six month periods have been annualized. |
(2) | Net interest income divided by average interest earning assets. |