Mutualfirst Financial (MFSF) 8-K MutualFirst Financial Announces Record Earnings for 2019

Exhibit 99

MutualFirst Financial Announces Record Earnings for 2019

MUNCIE, Ind., Jan. 31, 2020 /PRNewswire/ -- MutualFirst Financial, Inc. (NASDAQ: MFSF), the holding company of MutualBank (the “Bank”), announced today record net income available to common shareholders for the fourth quarter ended December 31, 2019 of $6.6 million, or $0.77 diluted earnings per common share. This compared to net income available to common shareholders for the same period in 2018 of $5.3 million, or $0.61 diluted earnings per common share. Net income for the fourth quarter ended December 31, 2019 represents an annualized return on average assets of 1.28% and annualized return on average tangible common equity of 13.36% compared to 1.04% and 12.56%, respectively, for the same period of last year.

Record net income available to common shareholders for the year ended 2019 was $23.8 million, or $2.74 diluted earnings per common share, compared to net income available to common shareholders of $18.9 million, or $2.21 diluted earnings per common share for the year ended 2018. Net income for the year ended 2019 represents a return on average assets of 1.15% and return on average tangible common equity of 12.60% compared to 0.97% and 11.66%, respectively, for the same period of last year.

On a Form8-K filed on October 29, 2019, MutualFirst announced it had entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Northwest Bancshares, Inc. (“Northwest Bancshares”). Pursuant to the Merger Agreement at the closing of the merger, MutualFirst will merge with and into Northwest Bancshares, with Northwest Bancshares as the surviving entity. Immediately thereafter, MutualBank will merge with and into Northwest Bank, the wholly owned subsidiary of Northwest Bancshares, with Northwest Bank as the surviving entity.

Under the terms of the Merger Agreement, each share of common stock of MutualFirst will be converted into the right to receive 2.4 shares of Northwest Bancshares’s common stock, for total consideration valued at approximately $346 million at announcement.

The Merger Agreement has been approved by the Boards of Directors of Northwest Bancshares and MutualFirst. Completion of the transaction is subject to customary closing conditions, including the receipt of required regulatory approvals and the approval of stockholders of MutualFirst. The parties anticipate completing the Merger during the second quarter 2020.

Adjusted net income available to common shareholders for the fourth quarter ended December 31, 2019, withoutone-time merger related expenses of $1.1 millionpre-tax and $1.0 million after tax, was $7.6 million, or $0.88 diluted earnings per common share. Adjusted net income represents an annualized return on average assets of 1.48% and return on average tangible common equity of 15.38%. Adjusted net income available to common shareholders for the year ended 2019, without theone-time merger related expenses, was $24.8 million, or $2.85 diluted earnings per common share. Adjusted net income represents a return on average assets of 1.20% and return on average tangible common equity of 13.13%.

“We are pleased with our record performance in 2019,” said David W. Heeter, CEO, “We also are very excited about joining the Northwest team. Northwest has demonstrated a similar commitment to its clients, employees and the communities it serves, shares our core values and has an outstanding record of enhancing shareholder value.”

Balance Sheet

Assets increased $14.5 million as of December 31, 2019 compared to December 31, 2018 primarily due to increases in mortgage loans held for sale and investment securities. Mortgage loans held for sale increased $9.4 million compared to December 31, 2018 due to strong mortgage production as originations increased in 2019 compared to 2018. Investment securities increased $14.7 million from December 31, 2018 to December 31, 2019 primarily due to a decline in market interest rates, which increased the market value of the securities. The gross loan portfolio decreased by $5.7 million from December 31, 2018 to December 31, 2019 due to a decrease in residential mortgage loans of $47.6 million primarily as a result of a sale of $27 million of mortgages in the third quarter of 2019. This decrease was mainly offset by increases in commercial loans by $31.3 million, or 4.5%, andnon-residential consumer loans by $10.6 million, or 4.0%. The loan mix is 48.3% commercial loans, 33.0% residential loans and 18.7%non-residential consumer loans as of December 31, 2019 compared to 46.0%, 36.2% and 17.8%, respectively, as of December 31, 2018.

Deposits increased by $34.3 million in 2019 due to an increase of $20.0 million in core deposits and $14.2 million in certificates of deposit. As of December 31, 2019, core deposits totaled $1.1 billion, or 67.6% of total deposits and certificates of deposit totaled $503 million, or 32.4% of total deposits compared to 67.8% and 32.2%, respectively, on December 31, 2018.

Allowance for loan losses remained constant at $13.3 million as of December 31, 2019 compared to December 31, 2018. The allowance for loan losses tonon-performing loans as of December 31, 2019 was 185% compared to 146% as of December 31, 2018. The allowance for loan losses to total loans as of December 31, 2019 remained the same as December 31, 2018 at 0.89%.Non-performing loans to total loans at December 31, 2019 were 0.48% compared to 0.61% at December 31, 2018.Non-performing assets to total assets were 0.45% at December 31, 2019 compared to 0.54% at December 31, 2018.

Stockholders’ equity was $226.8 million at December 31, 2019, an increase of $24.4 million from December 31, 2018. The increase was primarily due to net income available to common shareholders of $23.8 million during the year ended December 31, 2019 and an increase in accumulated other comprehensive income of $10.8 million. These increases were partially offset by common stock dividends of $6.9 million and stock repurchases of 136,471 shares at a cost of $4.3 million in 2019. The Company’s tangible book value per common share as of December 31, 2019 was $23.43 compared to $20.51 as of December 31, 2018 and the tangible common equity ratio increased to 9.89% as of December 31, 2019 compared to 8.72% as of December 31, 2018. 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, 2019.

Income Statement

Net interest income before the provision for loan losses decreased $528,000 for the quarter ended December 31, 2019 compared to the same period in 2018. The decrease in net interest income was primarily a result of a decrease of thirteen basis points in net interest margin from 3.47% in the fourth quarter of 2018 compared to 3.34% in the fourth quarter of 2019. Net interest margin decreased primarily due to a larger decrease in the yield on interest-earnings assets of sixteen basis points compared to a decrease of two basis points on cost of interest-bearing liabilities. This decrease was partially offset by an increase of $15.4 million in average interest-earning assets, due primarily to organic loan growth. Net interest margin was also aided in the quarter by approximately three basis points of purchase accounting adjustments in fourth quarter of 2019 compared to nine basis points in the fourth quarter of 2018. On a linked-quarter basis, net interest income decreased by $279,000 primarily due to a decrease in net interest margin of four basis points and a decline in average earning assets of $9.6 million.

Net interest income before the provision for loan losses increased $1.2 million for the year ended 2019 compared to 2018. The increase in net interest income was primarily due to an increase of $101.5 million in average interest-earning assets. This increase was partially offset by a decrease of twelve basis points in net interest margin from 3.47% for the year ended 2018 compared to 3.35% in 2019. Net interest margin decreased primarily due to an increase in the cost of interest-bearing liabilities oftwenty-two basis points compared to an increase in yield on interest-earning assets of six basis points. Net interest margin was aided by purchase accounting adjustments of eight basis points for the year ended 2018 compared to four basis points for 2019.

Provision for loan losses in the fourth quarter of 2019 was $575,000 compared to $600,000 during last year’s comparable period. The decrease was due to management’s ongoing evaluation of the adequacy of the allowance for loan losses. Net charge-offs in the fourth quarter of 2019 were $679,000, or 0.18% of average total loans on an annualized basis, compared to $328,000, or 0.09% of average total loans on an annualized basis in the fourth quarter of 2018. On a linked-quarter basis, provision for loan losses increased $150,000.

The provision for loan losses in 2019 was $2.0 million compared to $2.1 million in 2018. Net charge-offs for the year ended December 31, 2019 equaled $1.9 million, or 0.13% of loans, compared to $1.2 million, or 0.09% in 2018.

Non-interest income for the fourth quarter of 2019 was $8.3 million, an increase of $3.0 million compared to the fourth quarter of 2018. This increase innon-interest income included a $1.6 million increase in other income, primarily related to the sale of Visa B shares and a death benefit received in the fourth quarter of 2019, along with an increase of $820,000 in net gain on sale of mortgage loans due to a $37.1 million, or 101%, increase in mortgage loans sold in the fourth quarter of 2019 compared to the same period in 2018.Non-interest income also increased by $542,000 in service fee income on deposit accounts due to Visa incentive payments along with changes made in the structure of our deposit accounts. On a linked-quarter basis,non-interest income increased $2.4 million primarily due to the reasons mentioned above.

Non-interest income for the year ended 2019 was $24.9 million, an increase of $5.3 million compared to the year ended 2018. Net gain on sale of mortgage loans increased $2.7 million, other income increased by $1.4 million and service fee income increased $1.0 million for the reasons described above.

Non-interest expense increased $2.5 million when comparing the fourth quarter of 2019 with the same period in 2018.Non-interest expense increased due to an increase of $1.5 million in salaries and benefits due to increased commission expense for mortgage originators, higher health insurance expense and employee benefits accelerated due to the death of an executive.Non-interest expense was also higher due to $1.1 million of merger-related expenses, primarily in professional fees and other expenses. These increases were partially offset by a reduction of $207,000 in FDIC insurance premiums due to Small Bank Assessment Credits received as a result of the FDIC’s Reserve Ratio exceeding 1.38%. On a linked-quarter basis,non-interest expense increased $3.0 million for the same reasons as stated above.

Non-interest expense increased $2.4 million when comparing the year ended 2019 with the same period in 2018.Non-interest expense was impacted by general expense increases due to timing of the Universal Bancorp acquisition in 2018 along with items mentioned above.

The effective tax rate for the fourth quarter of 2019 was (6.9) % compared to 14.3% in the same quarter of 2018. The primary reason for the decline in the effective tax rate in the fourth quarter was the exercise ofnon-qualified stock options. The effective tax rate for the year ended 2019 was 9.0% compared to 13.6% for 2018.

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):	2019			2019			2018
	(000)			(000)			(000)
Assets
Cash and cash equivalents	$	32,323		$	31,315		$	33,414
Interest-bearing time deposits		3,496			4,023			4,239
Investment securities - AFS		385,622			382,976			370,875
Loans held for sale		13,397			19,643			3,987
Loans, gross		1,490,232			1,497,022			1,495,943
Allowance for loan losses		(13,307	)		(13,411	)		(13,281	)
Net loans		1,476,925			1,483,611			1,482,662
Premises and equipment, net		24,505			24,518			25,641
FHLB of Indianapolis stock		13,115			13,115			13,034
Deferred tax asset, net		5,146			3,344			7,744
Cash value of life insurance		60,740			61,099			60,160
Other real estate owned and repossessed assets		1,995			1,952			2,013
Goodwill		22,310			22,310			22,310
Core deposit and other intangibles		2,790			2,969			3,569
Other assets		21,412			22,675			19,665
Total assets	$	2,063,776		$	2,073,550		$	2,049,313

Liabilities and Stockholders’ Equity
Deposits	$	1,553,478		$	1,573,088		$	1,519,225
FHLB advances		245,879			239,661			292,497
Other borrowings		17,573			17,653			17,988
Other liabilities		20,034			21,170			17,240
Stockholders’ equity		226,812			221,978			202,363
Total liabilities and stockholders’ equity	$	2,063,776		$	2,073,550		$	2,049,313
	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):	2019			2019			2018			2019			2018
	(000)			(000)			(000)			(000)			(000)
Total interest and dividend income	$	20,892		$	21,617		$	21,489		$	85,329		$	79,694
Total interest expense		4,926			5,372			4,995			21,032			16,591
Net interest income		15,966			16,245			16,494			64,297			63,103
Provision for loan losses		575			425			600			1,950			2,120
Net interest income after provision for loan losses		15,391			15,820			15,894			62,347			60,983
Non-interest income
Service fee income		3,019			2,081			2,390			8,949			7,937
Net realized gain on sales of AFS securities		39			109			138			1,014			804
Commissions		1,162			1,147			1,114			4,787			4,865
Net gain on sale of loans		1,722			1,778			902			5,871			3,126
Net servicing fees		149			158			158			595			591
Increase in cash value of life insurance		300			312			315			1,239			1,239
Net gain (loss) on sale of other real estate and repossessed assets		11			28			(9	)		(19	)		(43	)
Other income		1,881			236			288			2,485			1,055
Totalnon-interest income		8,283			5,849			5,296			24,921			19,574
Non-interest expense
Salaries and employee benefits		10,386			8,826			8,895			36,313			32,964
Net occupancy expenses		1,010			1,005			986			4,055			3,965
Equipment expenses		636			574			625			2,441			2,514
Data processing fees		643			680			686			2,613			2,624
Advertising and promotion		353			296			331			1,323			1,606
ATM and debit card expense		584			590			582			2,334			2,290
Deposit insurance		-			(3	)		207			413			898
Professional fees		1,342			484			463			2,706			2,177
Software subscriptions and maintenance		706			723			732			3,014			2,719
Other real estate and repossessed assets		86			47			49			256			189
Core deposit intangible amortization		178			187			249			779			1,103
Other expenses		1,548			1,074			1,214			4,911			5,684
Totalnon-interest expense		17,472			14,483			15,019			61,158			58,733
Income before income taxes		6,202			7,186			6,171			26,110			21,824
Income tax provision (benefit)		(426	)		1,052			881			2,359			2,960
Net income available to common shareholders	$	6,628		$	6,134		$	5,290		$	23,751		$	18,864
Pre-taxpre-provision earnings (1)	$	6,777		$	7,611		$	6,771		$	28,060		$	23,944

Average Balances, Net Interest Income, Yield Earned and Rates Paid
			Three							Three
			months ended							months ended
			12/31/2019							12/31/2018
	Average		Interest		Average			Average		Interest		Average
	Outstanding		Earned/		Yield/			Outstanding		Earned/		Yield/
	Balance		Paid		Rate			Balance		Paid		Rate
	(000)		(000)		(annualized)			(000)		(000)		(annualized)
Interest-earning Assets:
Interest -bearing deposits	$	22,866	$	56		0.98	%		$22,735		$63		1.11	%
Mortgage-backed securities:
Available-for-sale		213,821		1,333		2.49			216,947		1,511		2.79
Investment securities:
Available-for-sale		159,531		1,290		3.23			154,735		1,261		3.26
Loans receivable		1,505,000		18,057		4.80			1,491,709		18,509		4.96
Stock in FHLB of Indianapolis		13,115		156		4.76			12,823		145		4.52
Total interest-earning assets (2)		1,914,333		20,892		4.37			1,898,949		21,489		4.53
Non-interest earning assets, net of allowance for loan losses and unrealized gain/loss		152,354							129,974
Total assets	$	2,066,687							$2,028,923
Interest-Bearing Liabilities:
Demand and NOW accounts	$	410,289		621		0.61			$393,365		779		0.79
Savings deposits		178,983		5		0.01			184,447		5		0.01
Money market accounts		216,414		510		0.94			183,947		303		0.66
Certificate accounts		502,481		2,549		2.03			488,484		2,231		1.83
Total deposits		1,308,167		3,685		1.13			1,250,243		3,318		1.06
Borrowings		231,989		1,241		2.14			281,026		1,677		2.39
Total interest-bearing liabilities		1,540,156		4,926		1.28			1,531,269		4,995		1.30
Non-interest bearing deposit accounts		281,816							284,837
Other liabilities		21,118							18,196
Total liabilities		1,843,090							1,834,302
Stockholders’ equity		223,597							194,621
Total liabilities and stockholders’ equity	$	2,066,687							$2,028,923
Net interest earning assets	$	374,177							$367,680
Net interest income			$	15,966							$16,494
Net interest rate spread (4)						3.09	%						3.22	%
Net yield on average interest-earning assets (4)						3.34	%						3.47	%
Net yield on average interest-earning assets, tax equivalent (3)(4)						3.41	%						3.55	%
Average interest-earning assets to average interest-bearing liabilities						124.29	%						124.01	%
			Twelve							Twelve
			months ended							months ended
			12/31/2019							12/31/2018
	Average		Interest		Average			Average		Interest		Average
	Outstanding		Earned/		Yield/			Outstanding		Earned/		Yield/
	Balance		Paid		Rate			Balance		Paid		Rate
	(000)		(000)		(annualized)			(000)		(000)		(annualized)
Interest-earning Assets:
Interest -bearing deposits	$	23,947	$	291		1.22	%	$	22,927	$	250		1.09	%
Mortgage-backed securities:
Available-for-sale		216,374		5,703		2.64			203,891		5,513		2.70
Investment securities:
Available-for-sale		154,838		5,020		3.24			149,535		4,850		3.24
Loans receivable		1,509,658		73,623		4.88			1,427,436		68,475		4.80
Stock in FHLB of Indianapolis		13,105		692		5.28			12,557		606		4.83
Total interest-earning assets (2)		1,917,922		85,329		4.45			1,816,346		79,694		4.39
Non-interest earning assets, net of allowance for loan losses and unrealized gain/loss		147,692							127,142
Total assets	$	2,065,614						$	1,943,488

Interest-Bearing Liabilities:
Demand and NOW accounts	$	403,399			3,072			0.76		$	385,681		2,462			0.64
Savings deposits		182,589			19			0.01			180,065		20			0.01
Money market accounts		197,296			1,777			0.90			191,433		1,027			0.54
Certificate accounts		507,589			10,251			2.02			455,431		7,347			1.61
Total deposits		1,290,873			15,119			1.17			1,212,610		10,856			0.90
Borrowings		261,460			5,913			2.26			260,994		5,735			2.20
Total interest-bearing liabilities		1,552,333			21,032			1.35			1,473,604		16,591			1.13
Non-interest bearing deposit accounts		278,792									267,812
Other liabilities		20,417									17,315
Total liabilities		1,851,542									1,758,731
Stockholders’ equity		214,072									184,757
Total liabilities and stockholders’ equity	$	2,065,614								$	1,943,488
Net interest earning assets	$	365,589								$	342,742
Net interest income				$	64,297							$	63,103
Net interest rate spread (4)								3.09	%							3.26	%
Net yield on average interest-earning assets (4)								3.35	%							3.47	%
Net yield on average interest-earning assets, tax equivalent (3)(4)								3.43	%							3.55	%
Average interest-earning assets to average interest-bearing liabilities								123.55	%							123.26	%
		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):		2019			2019			2018					2019			2018
Share and per share data:
Average common shares outstanding:
Basic		8,563,012			8,516,038			8,590,729					8,575,355			8,394,195
Diluted		8,636,467			8,629,030			8,732,290					8,682,108			8,543,544
Per common share:
Basic earnings	$	0.77		$	0.72		$	0.62				$	2.77		$	2.25
Diluted earnings	$	0.77		$	0.71		$	0.61				$	2.74		$	2.21
Dividends	$	0.20		$	0.20		$	0.20				$	0.80		$	0.74
Dividend payout ratio		25.97	%		28.17	%		32.79	%				29.20	%		33.48	%
Performance Ratios:
Return on average assets (ratio of net income to average total assets)(4)		1.28	%		1.18	%		1.04	%				1.15	%		0.97	%
Return on average tangible common equity (ratio of net income to average tangible common equity)(4)		13.36	%		12.65	%		12.56	%				12.60	%		11.66	%
Interest rate spread information:
Average during the period(4)		3.09	%		3.11	%		3.22	%				3.09	%		3.26	%
Net interest margin(4)(5)		3.34	%		3.38	%		3.47	%				3.35	%		3.47	%
Efficiency Ratio		72.05	%		65.55	%		68.93	%				68.55	%		71.04	%
Ratio of average interest-earning assets to average interest-bearing liabilities		124.29	%		124.26	%		124.01	%				123.55	%		123.26	%
Allowance for loan losses:
Balance beginning of period	$	13,411		$	13,435		$	13,009				$	13,281		$	12,387
Net charge-offs (recoveries):

Real Estate:
Commercial		25			56			40			165			93
Commercial construction and development		-			-			0			-			0
Consumer closed end first mortgage		126			41			23			237			156
Consumer open end and junior liens		-			-			0			-			36
Total real estate loans		151			97			63			402			285
Other loans:
Auto		71			37			5			237			41
Boat/RV		395			232			212			1,039			593
Other		62			74			48			237			208
Commercial and industrial		-			9			0			9			99
Total other		528			352			265			1,522			941
Net charge-offs (recoveries)		679			449			328			1,924			1,226
Provision for loan losses		575			425			600			1,950			2,120
Balance end of period	$	13,307		$	13,411		$	13,281		$	13,307		$	13,281
Net loan charge-offs to average loans (4)		0.18	%		0.12	%		0.09	%		0.13	%		0.09	%
		December 31,			September 30,			December 31,
		2019			2019			2018
Total shares outstanding		8,607,953			8,498,491			8,603,462
Tangible book value per common share	$	23.43		$	23.15		$	20.51
Tangible common equity to tangible assets		9.89	%		9.60	%		8.72	%
Nonperforming assets (000’s)
Non-accrual loans
Real Estate:
Commercial	$	756		$	881		$	4,782
Commercial construction and development		631			-			62
Consumer closed end first mortgage		3,682			3,574			2,777
Consumer open end and junior liens		352			184			273
Total real estate loans		5,421			4,639			7,894
Other loans:
Auto		256			185			88
Boat/RV		944			531			470
Other		51			16			46
Commercial and industrial		368			323			91
Total other		1,619			1,055			695
Totalnon-accrual loans		7,040			5,694			8,589
Accruing loans past due 90 days or more		156			148			517
Total nonperforming loans		7,196			5,842			9,106
Real estate owned		1,217			1,283			1,223
Other repossessed assets		778			669			790
Total nonperforming assets	$	9,191		$	7,794		$	11,119
Performing restructured loans (6)	$	1,371		$	1,401		$	2,571
Asset Quality Ratios:
Non-performing assets to total assets		0.45	%		0.38	%		0.54	%
Non-performing loans to total loans		0.48	%		0.39	%		0.61	%
Allowance for loan losses tonon-performing loans		185	%		230	%		146	%
Allowance for loan losses to loans receivable		0.89	%		0.90	%		0.89	%

This earnings release and selected financials contain GAAP financial measures andnon-GAAP financial measures where management believes it to be helpful in understanding MutualFirst’s results of operations or financial position. This table showsnon-GAAP financial measures and the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure.

	As of or for			As of or for			As of or for			As of or for			As of or for
	Three Months			Three Months			Three Months			Twelve Months			Twelve Months
	Ended			Ended			Ended			Ended			Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
Non-GAAP Measurements	2019			2019			2018			2019			2018
Total stockholders’ equity (GAAP)	$	226,812		$	221,978		$	202,363		$	226,812		$	202,363
Less: Intangible assets		25,100			25,279			25,879			25,100			25,879
Tangible common equity(non-GAAP)	$	201,712		$	196,699		$	176,484		$	201,712		$	176,484
Total assets (GAAP)	$	2,063,776		$	2,073,550		$	2,049,313		$	2,063,776		$	2,049,313
Less: Intangible assets		25,100			25,279			25,879			25,100			25,879
Tangible assets(non-GAAP)	$	2,038,676		$	2,048,271		$	2,023,434		$	2,038,676		$	2,023,434
Tangible common equity to tangible assets(non-GAAP)		9.89	%		9.60	%		8.72	%		9.89	%		8.72	%
Book value per common share (GAAP)	$	26.35		$	26.12		$	23.52		$	26.35		$	23.52
Less: Effect of intangible assets		2.92			2.97			3.01			2.92			3.01
Tangible book value per common share	$	23.43		$	23.15		$	20.51		$	23.43		$	20.51
Return on average stockholders’ equity (GAAP)		11.86	%		11.19	%		10.87	%		11.09	%		10.21	%
Add: Effect of intangible assets		1.50	%		1.46	%		1.69	%		1.51	%		1.45	%
Return on average tangible common equity(non-GAAP)		13.36	%		12.65	%		12.56	%		12.60	%		11.66	%
Total tax free interest income (GAAP)
Loans receivable	$	98		$	98		$	106		$	399		$	420
Investment securities		1,256			1,236			1,226			4,884			4,494
Total tax free interest income	$	1,354		$	1,334		$	1,332		$	5,283		$	4,914
Total tax free interest income, gross (at 21%)	$	1,714		$	1,689		$	1,686		$	6,687		$	6,220
Net interest margin, tax equivalent(non-GAAP)
Net interest income (GAAP)	$	15,966		$	16,245		$	16,494		$	64,297		$	63,103
Add: Tax effect tax free interest income (3)		360			355			354			1,404			1,306
Net interest income(non-GAAP)		16,326			16,600			16,848			65,701			64,409
Divided by: Average interest-earning assets		1,914,333			1,923,938			1,898,949			1,917,922			1,816,346
Net interest margin, tax equivalent		3.41	%		3.45	%		3.55	%		3.43	%		3.55	%
One-time merger related expenses
Non-tax deductible	$	585		$	-		$	-		$	585		$	220
Tax deductible		527			-			79			527			2,158
Totalone-time merger related expenses	$	1,112		$	-		$	79		$	1,112		$	2,378
Subtract tax benefit		111			-			17			111			453
Netone-time merger related expenses	$	1,001		$	-		$	62		$	1,001		$	1,925
Net income (GAAP)		6,628			-			5,290			23,751			18,864
Net income excludingone-time merger expenses(non-GAAP)	$	7,629		$	-		$	5,352		$	24,752		$	20,789
Adjusted diluted earnings per share
Net income excludingone-time merger expenses(non-GAAP)	$	7,629		$	-		$	5,352		$	24,752		$	20,789
Average diluted shares		8,636,467			-			8,732,290			8,682,108			8,543,544
Adjusted diluted earnings per share(non-GAAP)	$	0.88		$	-		$	0.61		$	2.85		$	2.43
Adjusted return on assets
Net income excludingone-time merger expenses(non-GAAP)	$	7,629		$	-		$	5,352		$	24,752		$	20,789
Average assets		2,066,687			-			2,028,923			2,065,614			1,943,488
Adjusted return on average assets(non-GAAP)		1.48	%		-			1.06	%		1.20	%		1.07	%
Adjusted return on tangible common equity
Net income excludingone-time merger expenses(non-GAAP)	$	7,629		$	-		$	5,352		$	24,752		$	20,789
Average tangible common equity		198,401			-			168,443			188,563			161,788
Adjusted return on average tangible common equity(non-GAAP)		15.38	%		-			12.71	%		13.13	%		12.85	%
Ratio Summary:
Return on average equity		11.86	%		11.19	%		10.87	%		11.09	%		10.21	%
Return on average tangible common equity		13.36	%		12.65	%		12.56	%		12.60	%		11.66	%
Return on average assets		1.28	%		1.18	%		1.04	%		1.15	%		0.97	%
Tangible common equity to tangible assets		9.89	%		9.60	%		8.72	%		9.89	%		8.72	%
Net interest margin, tax equivalent		3.41	%		3.45	%		3.55	%		3.43	%		3.55	%

(1) Pre-taxpre-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 takingnon-taxable interest and grossing up by 21% applicable tax rate.    

(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 fromnon-performing ratios. Restructured loans that are onnon-accrual are in thenon-accrual loan categories.    

CONTACT: Chris Cook, Senior Vice President, Treasurer and CFO of MutualFirst Financial, Inc. (765)747-2945