Exhibit 99.1
NEWS RELEASE
DATE: April 13, 2005 12:00 p.m. E.S.T.
CONTACT: James L. Saner, Sr., President and CEO 812-663-0157
[MainSource Logo]
MAINSOURCE FINANCIAL GROUP-NASDAQ, MSFG -
Announces Earnings for the First Quarter 2005
o Net Income of $3.8 million
o Earnings Per Share of $0.33
o Net Interest Margin of 3.90%
James L. Saner, Sr., President & CEO of MainSource Financial Group, Inc.
(NASDAQ: MSFG), announced today the unaudited results for the first quarter
ended March 31, 2005. Total net income for the first quarter was $3,790,000
compared to $3,635,000 for the same period in 2004. The Company reported
earnings per share of $0.33, which was equal to the first quarter of 2004. The
Company did, however, incur $140,000 of pre-tax expenses related to the
continued collapsing of its Indiana bank charters into MainSource Bank which was
announced in September 2004. Therefore, the Company's operating earnings per
share were $0.34.
Key measures of the financial performance of the Company are return on average
shareholders' equity and return on average assets. Return on average
shareholders' equity was 12.38% and return on average assets was 1.02% for the
first quarter of 2005.
Mr. Saner stated, "MainSource Financial Group continues to place its focus on
building financial relationships with its customers while simultaneously looking
for opportunities to enhance shareholder value. As interest rates continue to
rise, our Company has attempted to stay competitive in its markets by raising
its rates on loan and deposit products. As a result, our net interest margin
continues to increase. However, mortgage banking income, which is a main driver
of non-interest income, has decreased significantly. We do feel that the economy
is recovering and therefore we anticipate commercial loan growth will increase
in the future."
NET INTEREST INCOME
Net interest income was $12.7 million for the first quarter of 2005, which
represents an increase of 10.7% versus the first quarter of 2004. Average
earning assets increased 6.3% while net interest margin, on a fully-taxable
equivalent basis, was 3.90% for the first quarter of 2005 compared to 3.68% for
the same period a year ago and 3.76% for the fourth quarter of 2004.
NON-INTEREST INCOME
Non-interest income was $4.6 million for the first quarter of 2005 compared to
$4.8 million for the same period a year ago. The decrease was primarily
attributable to a decrease in mortgage banking income of $0.3 million, a lower
level of securities gains, and a decrease in insurance commissions. Insurance
commissions decreased as the Company sold the Kentucky division of MainSource
Insurance during the quarter. Offsetting these decreases was an increase in
service charges on deposit accounts and increases resulting from the acquisition
of Peoples Trust in June 2004.
NON-INTEREST EXPENSE
Non-interest expense for the first quarter of 2005 was $12.1 million compared to
$11.1 million for the first quarter of 2004. The increase was due primarily to
the acquisition of Peoples Trust, which added approximately $0.9 million in
non-interest expense. Excluding the effect of Peoples Trust, the Company's
non-interest expense would have been approximately $11.2 million and relatively
flat compared to the same period in 2004.
ASSET QUALITY
The Company's asset quality held steady as compared to the same period a year
ago. Non-performing assets totaled $16.6 million, or 1.11% of total assets, as
of March 31, 2005. This is compared to $16.6 million, or 1.13% of total assets,
as of the same period a year ago. The allowance for loan losses was $11.5
million as of March 31, 2005 and represented 1.28% of total outstanding loans.
Included in the $16.6 million of non-performing assets as of March 31, 2005, is
one credit relationship in the approximate aggregate amount of $1.9 million.
However, on April 8, 2005, the customer brought all of its loans to a current
status. This customer has indicated that it intends to pay off at least half of
the credit in the second quarter of 2005. Excluding this relationship,
non-performing assets would have been $14.7 million, or 0.98% of total assets as
of March 31, 2005.
The following table represents the unaudited summary financial data for the
first quarter of 2005. Dollar amounts are in thousands except share and per
share data.
MAINSOURCE FINANCIAL GROUP
(unaudited)
(Dollars in thousands except per share data)
Income Statement Summary Three months ended March 31
---------------------------
2005 2004
---------------- ----------------
Interest Income $18,693 $16,764
Interest Expense 5,988 5,292
---------------- ----------------
Net Interest Income
12,705 11,472
Provision for Loan Losses 120 -
Noninterest Income:
Insurance commissions 587 698
Mortgage banking 546 799
Service charges on deposit accounts 1,666 1,538
Gain (loss) on sales of securities 11 336
Other 1,769 1,393
---------------- ----------------
Total Noninterest Income
4,579 4,764
Noninterest Expense:
Employee 6,876 6,441
Occupancy 899 758
Equipment 1,030 932
Intangible amortization 295 234
Other 2,994 2,716
---------------- ----------------
Total Noninterest Expense
12,094 11,081
Earnings Before Income Taxes 5,070 5,155
Provision for Income Taxes 1,280 1,520
---------------- ----------------
Net Income
$3,790 $3,635
================ ================
Three months ended March 31
Average Balance Sheet Data 2005 2004
---------------- ----------------
Gross Loans $920,849 $851,525
Earning Assets 1,363,575 1,282,987
Total Assets 1,512,547 1,417,779
Noninterest Bearing Deposits 135,655 116,338
Interest Bearing Deposits 1,066,509 1,035,485
Total Interest Bearing Liabilities 1,240,976 1,183,044
Shareholders' Equity 124,185 107,213
Three months ended March 31
Per Share Data 2005 2004
---------------- ----------------
Diluted Earnings Per Share $0.33 $0.33
Cash Dividends Per Share 0.130 0.114
Market Value - High 23.96 23.08
Market Value - Low 20.96 20.12
Average Outstanding Shares 11,527,515 11,134,913
Three months ended March 31
Key Ratios 2005 2004
---------------- ----------------
Return on Average Assets 1.02% 1.03%
Return on Average Equity 12.38% 13.60%
Net Interest Margin 3.90% 3.68%
Efficiency Ratio 68.39% 67.06%
Net Overhead to Average Assets 2.01% 1.79%
Balance Sheet Highlights
As of March 31 2005 2004
---------------- ----------------
Total Loans (Excluding Loans Held for Sale) $901,312 $839,306
Allowance for Loan Losses 11,505 11,333
Total Securities 428,831 421,781
Goodwill and Intangible Assets 45,445 41,160
Total Assets 1,488,804 1,416,180
Noninterest Bearing Deposits 147,181 123,167
Interest Bearing Deposits 1,044,832 1,024,791
Other Borrowings 164,446 145,460
Shareholders' Equity 121,295 108,563
Other Balance Sheet Data
As of March 31 2005 2004
---------------- ----------------
Book Value Per Share $10.57 $9.77
Loan Loss Reserve to Loans 1.28% 1.35%
Nonperforming Assets to Total Assets 1.11% 1.13%
Outstanding Shares 11,471,128 11,106,971
Asset Quality
As of March 31 2005 2004
---------------- ----------------
Loans Past Due 90 Days or More and Still Accruing $2,425 $718
Non-accrual Loans 13,129 13,388
Other Real Estate Owned 1,008 1,955
---------------- ----------------
Total Nonperforming Assets $16,562 $16,061
MainSource Financial Group, Inc., headquartered in Greensburg, Indiana, is
listed on the NASDAQ Stock Market (trading symbol: MSFG) and is a
community-focused, financial holding company with assets of approximately $1.5
billion. Through its three banking subsidiaries, MainSource Bank, Greensburg,
Indiana; Peoples Trust Company, Linton, Indiana; and MainSource Bank of
Illinois, Kankakee, Illinois, it operates 54 offices in 22 Indiana counties and
six offices in three Illinois counties. Through its non-banking subsidiaries,
MainSource Insurance LLC, MainSource Title LLC, and MainSource Mortgage LLC, the
Company provides various related financial services through the Company's
banking affiliates.
Forward-Looking Statements
The discussion in this press release includes certain forward-looking statements
based upon management expectations. Factors which could cause future results to
differ from these expectations include the following: general economic or market
conditions; legislative and regulatory initiatives; monetary and fiscal policies
of the federal government; deposit flows; the costs of funds; general market
rates of interest; interest rates on competing investments; demand for loan
products; demand for financial services; changes in accounting policies or
guidelines; and changes in the quality or composition of the Company's loan and
investment portfolios.