MutualFirst Announces Second Quarter 2006 Earnings26 July 2006
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, 2006 was $1.3 million, or $.32 for basic and $.31 for diluted earnings per share. This compared to net income for the comparable period in 2005 of $1.7 million, or $.39 for basic and $.38 for diluted earnings per share. Annualized return on assets was .56% and return on tangible equity was 7.18% for the second quarter of 2006 compared to .80% and 7.77% respectively, for the same period last year.
Net income for the six months ended June 30, 2006 was $2.9 million or $.68 for basic and $.67 for diluted earnings per share. This compared to net income for the comparable period in 2005 of $3.3 million or $.76 for basic and $.74 for diluted earnings per share. Annualized return on average assets was .60% and return on average tangible equity was 7.75% for the first half of 2006 compared to .78% and 7.62% respectively, for the same period last year.
Assets totaled $978.9 million at June 30, 2006, an increase from December 31, 2005 of $7.1 million, or .7%. Loans, excluding loans held for sale, increased $6.4 million or .8%. Consumer loans increased $8.3 million, or 3.9%, and commercial business loans increased $3.9 million, or 6.0%, while residential and commercial real estate loans held in the portfolio decreased $6.4 million, furthering our strategy to reduce the percentage of real estate mortgage loans to total loans. Mortgage loans held for sale increased $1.3 million and mortgage loans sold during the first half of 2006 totaled $11.3 million.
Allowance for loan losses increased $77,000 to $8.2 million when comparing December 31, 2005 to June 30, 2006. Net charge offs for the first half of 2006 were $841,000 or .20% of average loans on an annualized basis compared to $846,000, or .23% of average loans for the comparable period in 2005. A large portion of the net charge offs in the second quarter of 2006 was a $300,000 write-down of a $623,000 commercial business loan on a property and business located in Muncie, Indiana. The loan is in default and the value of the real estate and business is not sufficient to pay off the total debt. As of June 30, 2006 the allowance for loan losses as a percentage of loans receivable and non-performing loans was .98% and 122.91%, respectively.
Total deposits were $684.3 million at June 30, 2006 a small decrease from $684.6 at December 31, 2005. Total borrowings increased $7.3 million to $195.1 million at June 30, 2006 from $187.8 million at December 31, 2005.
Stockholders' equity decreased $618,000, or .7%, from $88.8 million at December 31, 2005, to $88.2 million at June 30, 2006. The decrease was due primarily to the repurchase of 139,000 shares of common stock for $2.9 million and dividend payments of $1.2 million. This decrease was partially offset by net income of $2.9 million, Employee Stock Ownership Plan (ESOP) shares earned of $333,000, and RRP shares earned of $75,000. Also, the market value of securities available for sale compared to their book value decreased $167,000 from a loss of $375,000 at December 31, 2005 to a loss of $542,000 at June 30, 2006.
Net interest income before the provision for loan losses increased $61,000 from $6.7 million for the three months ended June 30, 2005 to $6.8 million for the three months ended June 30, 2006. The primary reason for the improvement was due to a $108.9 million, or 14.0% increase in average interest earning assets (mainly due to the Fidelity Federal purchase in September of 2005), partially offset by a 40 basis point decrease in the net interest margin reflecting the Bank's liability sensitive nature, as short term interest rates continued to rise.
Net interest income before the provision for loan losses increased $419,000 for the six months ended June 30, 2006 compared to the six months ended June 30, 2005. The reasons for the increase were similar to those stated above. Average interest earning assets increased $109.0 million, or 14.1% and the net interest margin decreased by 33 basis points from 3.46% for the six months ended June 30, 2005 to 3.13% for the same period in 2006.
The provision for loan losses for the second quarter of 2006 was $525,000, compared to $444,000 for last year's comparable period. The increase was due primarily to higher non-performing loans and higher loan portfolio balances (mainly due to the Fidelity Federal purchase in September of 2005). Non- performing loans to total loans at June 30, 2006 were .79% compared to .70% at June 30, 2005. Non-performing assets to total assets were .90% at June 30, 2006 compared to .76% at June 30, 2005. It should be noted that subsequent to June 30, 2006 and prior to today's earnings release, a non-performing loan in the amount of approximately $1.9 million was paid in full.
Non-interest income was basically unchanged at $1.7 million for the three months ended June 30, 2006 compared to the same period in 2005. Increases in service fees on transaction accounts of $123,000, or 12.4% were offset by a reduction in commission income on annuity and mutual fund sales as short term interest rates have risen making these products less competitive.
For the six month period ended June 30, 2006 non-interest income has remained flat at $3.3 million compared to the same period in 2005. The reasons are similar to those mentioned above.
Non-interest expense increased $587,000 or 10.4% to $6.2 million for the three months ended June 30, 2006 compared to $5.6 million for the same period in 2005. The increase was due primarily to increased salaries and benefits which were up $246,000 due to annual salary adjustments, increased health insurance costs and increased staffing for two new branches opened; one in May of 2005 and the other with the purchase of Fidelity Federal in September of 2005. Marketing expenses were up $105,000 primarily due to a new branding campaign designed to more clearly communicate our strategic position. Other expenses increased $180,000 due to increased professional fees primarily related to regulatory compliance requirements and legal costs related to REO, increased REO expenses (other than legal costs) due to more repossessed properties, and other general and administrative expense increases related to the opening of the new branches. On a linked quarter basis non-interest expense was flat at $6.2 million.
Non-interest expense increased $1.2 million or 11.3% to $12.4 million for the six months ended June 30, 2006 compared to $11.2 million for the same period in 2005 for similar reasons mentioned above.
Income tax expense decreased $305,000 for the three months ended June 30, 2006 compared to the same period in 2005 due to less taxable income. The effective tax rate decreased from 27.5% to 20.0% due to an increased percentage of low income housing tax credits to taxable income when comparing the second quarter of 2006 to the second quarter of 2005.
For the six-month period ended June 30, 2006, income tax expense decreased $396,000 compared to the same period in 2005. The decrease was due primarily to decreased taxable income. The effective tax rate decreased from 27.5% to 22.7% due to an increased percentage of low income housing tax credits to taxable income when comparing the first half of 2006 to the first half of 2005.
MutualFirst Financial, Inc. and Mutual Federal Savings Bank are headquartered in Muncie, Indiana with twenty 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 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 changes in interest rates; the loss of deposits and loan demand to competitors; substantial changes in financial markets; changes in real estate values and the real estate market; or regulatory changes.
MUTUALFIRST FINANCIAL INC.
30-Jun 31-Dec
Selected Financial Condition
Data (Unaudited): 2006 2005
-------------------------------------------------------------------------
(000) (000)
Total Assets $978,880 $971,829
Cash and cash equivalents 20,064 22,365
Loans held for sale 3,336 2,022
Loans receivable, net 828,948 822,547
Investment securities available for
sale, at fair value 40,906 40,081
Total deposits 684,311 684,554
Total borrowings 195,129 187,792
Total stockholders' equity 88,176 88,794
Three Three Three Six Six
Months Months Months Months Months
Ended Ended Ended Ended Ended
30-Jun 31-Mar 30-Jun 30-Jun 30-Jun
Selected Operations Data
(Unaudited): 2006 2006 2005 2006 2005
--------------------------------------------------------------------------
(000) (000) (000) (000) (000)
Total interest income $13,911 $13,588 $11,507 $27,500 $22,743
Total interest expense 7,158 6,557 4,815 13,715 9,377
------- ------- ------- ------- -------
Net interest income 6,753 7,031 6,692 13,785 13,366
Provision for loan losses 525 393 444 918 888
------- ------- ------- ------- -------
Net interest income after
provision
for loan losses 6,228 6,638 6,248 12,867 12,478
------- ------- ------- ------- -------
Non-interest income
Fees and service charges 1,113 1,007 990 2,119 1,876
Equity in gains (losses) of
limited partnerships (13) 12 (9) (2) (26)
Commissions 154 198 341 352 555
Net gain on loan sales and
servicing 101 134 117 235 266
Increase in cash surrender
value of life insurance 267 237 250 504 515
Other income 55 76 29 131 68
------- ------- ------- ------- -------
Total non-interest income 1,677 1,664 1,718 3,339 3,254
------- ------- ------- ------- -------
Non-interest expense
Salaries and benefits 3,626 3,749 3,380 7,375 6,785
Occupancy and equipment 832 879 791 1,710 1,613
Data processing fees 214 218 202 432 396
Professional fees 233 258 231 491 441
Marketing 298 144 193 442 332
Other expenses 1,018 972 838 1,991 1,616
------- ------- ------- ------- -------
Total non-interest expense 6,221 6,220 5,635 12,441 11,183
------- ------- ------- ------- -------
Income before taxes 1,684 2,082 2,331 3,765 4,549
Income tax provision 337 520 642 856 1,252
------- ------- ------- ------- -------
Net income $1,347 $1,562 $1,689 $2,909 $3,297
======= ======= ======= ======= =======
Average Balances, Net Interest Income,
Yield Earned and Rates Paid
Three
mos ended
6/30/2006
-----------------------------
Average Interest Average
Outstanding Earned/ Yield/
Balance Paid Rate
-----------------------------
(000) (000)
Interest-Earning Assets:
Interest -bearing deposits $1,698 $15 3.53%
Mortgage-backed securities:
Available-for-sale 11,025 116 4.21
Investment securities:
Available-for-sale 30,186 352 4.66
Loans receivable 832,373 13,304 6.39
Stock in FHLB of Indianapolis 10,126 125 4.94
-----------------------------
Total interest-earning assets (1) 885,408 13,912 6.29
Non-interest earning assets, net of
allowance for loan losses and
unrealized gain/loss 85,041
----------
Total assets $970,449
==========
Interest-Bearing Liabilities:
Demand and NOW accounts $94,920 331 1.39
Savings deposits 62,601 78 0.50
Money market accounts 37,881 173 1.83
Certificate accounts 454,032 4,576 4.03
-----------------------------
Total deposits 649,434 5,158 3.18
Borrowings 171,387 2,000 4.67
-----------------------------
Total interest-bearing accounts 820,821 7,158 3.49
Non-interest bearing deposit accounts 46,148
Other liabilities 14,544
----------
Total liabilities 881,513
Stockholders' equity 88,936
----------
Total liabilities and stockholders'
equity $970,449
==========
Net earning assets $64,587
==========
Net interest income $6,754
==========
Net interest rate spread 2.81%
==========
Net yield on average interest-earning assets 3.05%
==========
Average interest-earning assets to
average interest-bearing liabilities 107.87%
==========
Three
mos ended
6/30/2005
-----------------------------
Average Interest Average
Outstanding Earned/ Yield/
Balance Paid Rate
-----------------------------
(000) (000)
Interest-Earning Assets:
Interest -bearing deposits $1,670 $7 1.68%
Mortgage-backed securities:
Available-for-sale 11,076 128 4.62
Investment securities:
Available-for-sale 29,771 276 3.71
Loans receivable 725,924 11,015 6.07
Stock in FHLB of Indianapolis 8,103 81 4.00
-----------------------------
Total interest-earning assets (1) 776,544 11,507 5.93
Non-interest earning assets, net of
allowance for loan losses and
unrealized gain/loss 71,481
----------
Total assets $848,025
==========
Interest-Bearing Liabilities:
Demand and NOW accounts $59,449 40 0.27
Savings deposits 61,461 68 0.44
Money market accounts 51,892 193 1.49
Certificate accounts 398,521 3,189 3.20
-----------------------------
Total deposits 571,323 3,490 2.44
Borrowings 135,242 1,325 3.92
-----------------------------
Total interest-bearing accounts 706,565 4,815 2.73
Non-interest bearing deposit accounts 39,730
Other liabilities 13,915
----------
Total liabilities 760,210
Stockholders' equity 87,815
----------
Total liabilities and stockholders'
equity $848,025
==========
Net earning assets $69,979
==========
Net interest income $6,692
==========
Net interest rate spread 3.21%
==========
Net yield on average interest-earning assets 3.45%
==========
Average interest-earning assets to
average interest-bearing liabilities 109.90%
==========
Three Three Three
Months Months Months
Ended Ended Ended
30-Jun 31-Mar 30-Jun
Selected Financial Ratios and Other
Financial Data (Unaudited): 2006 2006 2005
------------------------------------------------------------------------
Share and per share data:
Average common shares outstanding
Basic 4,227,308 4,269,197 4,352,236
Diluted 4,303,654 4,357,474 4,464,114
Per share:
Basic earnings $0.32 $0.37 $0.39
Diluted earnings $0.31 $0.36 $0.38
Dividends $0.14 $0.14 $0.13
Dividend payout ratio 45.16% 38.89% 34.21%
Performance Ratios:
Return on average assets (ratio of
net income to average total
assets)(1) 0.56% 0.65% 0.80%
Return on average tangible equity
(ratio of net income to average
tangible equity)(1) 7.18% 8.32% 7.77%
Interest rate spread information:
Average during the period(1) 2.81% 2.97% 3.21%
Net interest margin(1)(2) 3.05% 3.20% 3.45%
Efficiency Ratio 73.80% 71.54% 67.00%
Ratio of average interest-earning
assets to average interest-
bearing liabilities 107.87% 107.78% 109.90%
Allowance for loan losses:
Balance beginning of period $8,029 $8,100 $6,737
Charge offs:
One- to four- family 33 222 93
Multi-family 0 0 0
Commercial real estate 0 0 6
Construction or development 0 0 0
Consumer loans 178 247 237
Commercial business loans 300 25 150
-------------------------------
Sub-total 511 494 486
Recoveries:
One- to four- family 77 0 9
Multi-family 0 0 0
Commercial real estate 0 0 120
Construction or development 0 0 0
Consumer loans 47 30 85
Commercial business loans 10 0 0
-------------------------------
Sub-total 134 30 214
Net charge offs 377 464 272
Additions charged to operations 525 393 444
-------------------------------
Balance end of period $8,177 $8,029 $6,909
===============================
Net loan charge-offs to average
loans (1) 0.18% 0.22% 0.15%
Six Months Six Months
Ended Ended
30-Jun 30-Jun
Selected Financial Ratios and Other
Financial Data (Unaudited): 2006 2005
------------------------------------------------------------------------
Share and per share data:
Average common shares outstanding
Basic 4,248,603 4,359,063
Diluted 4,330,914 4,482,952
Per share:
Basic earnings $0.68 $0.76
Diluted earnings $0.67 $0.74
Dividends $0.28 $0.26
Dividend payout ratio 41.79% 35.14%
Performance Ratios:
Return on average assets (ratio of
net income to average total
assets)(1) 0.60% 0.78%
Return on average tangible equity
(ratio of net income to average
tangible equity)(1) 7.75% 7.62%
Interest rate spread information:
Average during the period(1) 2.88% 3.21%
Net interest margin(1)(2) 3.13% 3.46%
Efficiency Ratio 72.65% 67.29%
Ratio of average interest-earning
assets to average interest-
bearing liabilities 107.83% 110.08%
Allowance for loan losses:
Balance beginning of period $8,100 $6,867
Charge offs:
One- to four- family 255 171
Multi-family 0 0
Commercial real estate 0 6
Construction or development 0 0
Consumer loans 425 516
Commercial business loans 325 392
--------------------------
Sub-total 1,005 1,085
Recoveries:
One- to four- family 77 12
Multi-family 0 0
Commercial real estate 0 120
Construction or development 0 0
Consumer loans 77 107
Commercial business loans 10 0
--------------------------
Sub-total 164 239
Net charge offs 841 846
Additions charged to operations 918 888
--------------------------
Balance end of period $8,177 $6,909
==========================
Net loan charge-offs to average
loans (1) 0.20% 0.23%
June 30, March 31, June 30,
2006 2006 2005
----------------------------------
Total shares outstanding 4,439,620 4,513,476 4,608,013
Tangible book value per share $16.73 $16.65 $18.82
Nonperforming assets (000's)
Loans: Non-accrual $4,135 $4,416 $4,386
Accruing loans past due 90
days or more 2,404 2,025 694
Restructured loans 114 115 120
----------------------------------
Total nonperforming
loans 6,653 6,556 5,200
Real estate owned 1,360 1,647 351
Other repossessed assets 813 823 985
----------------------------------
Total
nonperforming
assets $8,826 $9,026 $6,536
Asset Quality Ratios:
Non-performing assets to total
assets 0.90% 0.94% 0.76%
Non-performing loans to total
loans 0.79% 0.79% 0.70%
Allowance for loan losses to
non-performing loans 122.91% 122.47% 132.87%
Allowance for loan losses to
loans receivable 0.98% 0.97% 0.94%
(1) Ratios for the three and six month periods have been annualized.
(2) Net interest income divided by average interest earning assets.
Source: prnewswire
All trademarks and copyrighted information contained herein are the property of their respective owners.
Related Articles
|
