MutualFirst Announces Fourth Quarter 2004 Earnings.MUNCIE Muncie (mŭn`sē), city (1990 pop. 71,035), seat of Delaware co., E Ind., on the White River; inc. 1854. It is a trade, processing, and manufacturing center. , Ind IND Investigational new drug Therapeutics A status assigned by the FDA to a drug before allowing its use in humans, exempting it from premarketing approval requirements so that experimental clinical trials may be conducted. See Phase 1.2, 3 studies, Sponsorship. . -- MutualFirst Financial, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :MFSF MFSF Magazine of Fantasy and Science Fiction MfSF Music for Schools Foundation (UK) ), the holding company of Mutual Federal Savings Bank Noun 1. federal savings bank - a federally chartered savings bank FSB savings bank - a thrift institution in the northeastern United States; since deregulation in the 1980s they offer services competitive with many commercial banks (the "Bank"), announced today that net income for the fourth quarter ended December December: see month. 31, 2004 was $16,000, or $.00 for both basic and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of . This compared to net income for the comparable period in 2003 of $1.6 million, or $.33 for basic and $.32 for diluted earnings per share. The decrease was due primarily to the one time expenses associated with a separation agreement entered into in November November: see month. with the Company's former Senior Vice President and Director. The Company's earnings for the fourth quarter would have been $1.7 million ($.38 for diluted earnings per share) without the one time expense. Annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. return on assets Return on assets (ROA) Indicator of profitability. Determined by dividing net income for the past 12 months by total average assets. Result is shown as a percentage. ROA can be decomposed into return on sales (net income/sales) multiplied by asset utilization (sales/assets). was .01% and return on equity was .07% (.82% and 7.70% respectively, without the one time expense) for the fourth quarter of 2004 compared to .79% and 6.69% respectively, for the same period of last year. Net income for the year ended December 31, 2004 was $5.5 million or $1.19 for basic and $1.16 for diluted earnings per share. This compared to net income for 2003 of $8.1 million or $1.64 for basic and $1.59 for diluted earnings per share. The decrease was due primarily to the one time expense associated with the separation agreement. The Company's earnings for the year would have been $7.2 million ($1.51 for diluted earnings per share) without the one time expense. Annualized return on assets was .67% and return on equity was 5.84% (.88% and 7.65% respectively, without the one time expense) for 2004 compared to 1.01% and 8.43% respectively, for 2003. Assets totaled $839.4 million at December 31, 2004, an increase from December 31, 2003 of $15.6 million, or 1.9%. Gross loans, excluding loans held for sale, increased $9.1 million, or 1.3%. Consumer loans increased $4.8 million, or 2.5%, and commercial business loans increased $9.3 million, or 20.9%, while commercial and residential mortgage loans held in the portfolio decreased $5.0 million, or 1.0%. Mortgage loans held for sale increased $940,000 and mortgage loans sold during the year totaled $40.8 million. Investment securities available for sale increased $5.9 million, or 17.7%, to increase liquidity. Allowance for loan losses increased $88,000 from $6.8 million at December 31, 2003 to $6.9 million at December 31, 2004. Net charge offs for 2004 were $1.5 million or .21% of average loans compared to $957,000, or .14% of average loans for 2003. As of December 31, 2004 the allowance for loan losses as a percentage of non-performing loans A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 3 months, but this can depend on the contract terms. and total loans was 172.3% and .95%, respectively. Total deposits were $600.4 million at December 31, 2004, an increase of $21.0 million, or 3.6% from December 31, 2003. Of this growth, $18.5 million was in core deposits. Total borrowings increased $4.5 million to $141.6 million at December 31, 2004 from $137.1 million at December 31, 2003. Stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. decreased $9.6 million from $97.5 million at December 31, 2003, to $87.9 million at December 31, 2004. The decrease was due primarily to the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of 623,000 shares of common stock for $14.7 million and dividend payments of $2.1 million. These decreases were partially offset by net income of $5.5 million, Employee Stock Ownership Plan (ESOP ESOP See: Employee Stock Ownership Plan ESOP See Employee Stock Ownership Plan (ESOP). ) shares earned of $752,000, RRP RRP n abbr (= recommended retail price) → PVP m shares earned (including tax benefits) of $691,000 and stock options exercised for $554,000. Also, the market value of securities available for sale compared to their book value decreased $322,000 from a gain of $234,000 at December 31, 2003 to a loss of $89,000 at December 31, 2004. Net interest income before provision for loan losses decreased $124,000 to $6.6 million for the three months ended December 31, 2004 compared to $6.8 million for the three months ended December 31, 2003. The net interest margin decreased from 3.59% for the three-month period ended December 31, 2003, to 3.46% for the comparable period in 2004 as yields on interest-earning assets decreased at a more rapid rate than the decrease in the cost of interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid liabilities. Net interest income decreased $419,000 for the year ended December 31, 2004 compared to the year ended December 31, 2004 due to a lower net interest margin and a lower volume of net earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin . The net interest margin decreased from 3.73% for the year ended December 31, 2003, to 3.57% for the year ended December 31, 2004 for the same reasons mentioned above. The provision for loan losses for the fourth quarter of 2004 was $450,000, $75,000 more than last year's comparable period. Non-performing loans to total loans at December 31, 2004 were .55% compared to .46% at December 31, 2003. Non-performing assets to total assets were .64% at December 31, 2004 compared to .57% at December 31, 2003. Non-interest income increased $76,000 to $1.5 million for the three months ended December 31, 2004 compared to $1.4 million for the same period in 2003. The increase was primarily due to an increase in service fee income and commissions of $321,000 when comparing the two quarters, due to an increased number of checking accounts outstanding, a new overdraft A check that is drawn on an account containing less money than the amount stated on the check. The term overdraft is also used in reference to the condition that exists when vouchers protection program and increased sales of investment products. This increase was partially offset by a decrease in loan sale gains and a smaller increase in cash surrender value The amount of money that an insurance company pays the insured upon cancellation of a life insurance policy before death and which is a specific figure assigned to the policy at that particular time, reduced by a charge for administrative expenses. of life insurance. Non-interest income for the year ended December 31, 2004 increased slightly from $6.0 million for the year ended December 31, 2003 to $6.1 million. This increase was primarily due to a $375,000 increase in service fee and commission income, a $376,000 reduction in loss on limited partnerships and $274,000 increase in other income. These changes were partially offset by a decrease in loan sale gains of $504,000 and a smaller increase of cash surrender value of life insurance of $394,000. Non-interest expense increased $2.9 million or 54.5% to $8.2 million for the three months ended December 31, 2004 compared to $5.3 million for the same period in 2003. The primary reason for the increase was the one time $2.8 million expense associated with the separation agreement announced in November. For the year non-interest expense was up $3.7 million or 18.2% when compared to 2003. The majority of this increase was due to the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. one time separation agreement expense. Due to the large one time expense, there was an income tax credit of $476,000 for the three months ended December 31, 2004 compared to an income tax expense of $916,000 for the same period in 2003. For the year ended December 31, 2004, income tax expense decreased $1.6 million compared to 2003. The effective tax rate decreased from 29.3% to 24.1% when comparing 2003 and 2004, respectively. MutualFirst Financial, Inc. and Mutual Federal Savings Bank are headquartered in Muncie, Indiana Muncie (IPA: [ˈmʌn.si]) is a city in Delaware County in east central Indiana, best known as the home of Ball State University and the birthplace of the Ball Corporation. with seventeen Seventeen novel of young love. [Am. Lit.: Booth Tarkington Seventeen in Magill I, 882] See : Adolescence full service offices in Delaware Delaware, state, United States Delaware (dĕl`əwâr, –wər), one of the Middle Atlantic states of the United States, the country's second smallest state (after Rhode Island). , Randolph Randolph, town (1990 pop. 30,093), Norfolk co., E Mass.; settled c.1710, set off from Braintree and inc. 1793. A suburb of Boston, it has diverse light manufacturing. , Kosciusko and Grant counties. Statements contained in this release, which are not historical facts, are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , 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.
MUTUALFIRSTFINANCIAL INC.
----------------------------------------------------
31-Dec 31-Dec
Selected Financial Condition Data(Unaudited): 2004 2003
----------------------------------------------------------------------
(000) (000)
Total Assets $839,387 $823,791
Cash and cash equivalents 19,743 23,068
Loans held for sale 2,913 1,975
Loans receivable, net 713,022 703,981
Investment securities available for sale, at fair
value 39,409 33,472
Total deposits 600,407 579,362
Total borrowings 141,572 137,103
Total stockholders' equity 87,860 97,520
Three Three Three Twelve Twelve
Months Months Months Months Months
Ended Ended Ended Ended Ended
Selected Operations Data 31-Dec 30-Sep 31-Dec 31-Dec 31-Dec
(Unaudited): 2004 2004 2003 2004 2003
----------------------------------------------------- ----------------
(000) (000) (000) (000) (000)
Total interest income $11,176 $10,979 $11,382 $44,400 $46,442
Total interest expense 4,529 4,368 4,611 17,476 19,099
------------------------ ----------------
Net interest income 6,647 6,611 6,771 26,924 27,343
Provision for loan losses 450 350 375 1,557 1,450
------------------------ ----------------
Net interest income after
provision for loan losses 6,197 6,261 6,396 25,367 25,893
------------------------ ----------------
Non-interest income
-----------------------------
Fees and service charges 942 806 735 3,193 2,927
Equity in gains (losses) of
limited partnerships (38) 69 (61) 52 (323)
Commissions 331 225 218 854 745
Net gain on loan sales and
servicing 89 152 163 852 1,357
Increase in cash surrender
value of life insurance 190 255 294 950 1,343
Other income 7 63 96 198 (74)
------------------------ ----------------
Total non-interest income 1,521 1,570 1,445 6,099 5,975
------------------------ ----------------
Non-interest expense
-----------------------------
Salaries and benefits 6,094 3,304 3,496 16,167 13,097
Occupancy and equipment 731 748 694 2,861 2,686
Data processing fees 105 179 157 630 607
Deposit insurance expense 21 21 22 86 89
Marketing 272 208 114 722 640
Other expenses 971 999 821 3,725 3,347
------------------------ ----------------
Total non-interest expense 8,194 5,459 5,304 24,191 20,466
------------------------ ----------------
Income before taxes (476) 2,372 2,537 7,275 11,402
Income tax provision (492) 648 916 1,753 3,340
------------------------ ----------------
Net income $16 $1,724 $1,621 $5,522 $8,062
======================== ================
Selected Three Three Three Twelve Twelve
Financial Ratios Months Months Months Months Months
and Other Ended Ended Ended Ended Ended
Financial Data 31-Dec 30-Sep 31-Dec 31-Dec 31-Dec
(Unaudited): 2004 2004 2003 2004 2003
------------------------------------------------- --------------------
Share and per share
data:
Average common
shares
outstanding
Basic 4,417,915 4,557,861 4,891,585 4,625,437 4,904,007
Diluted 4,558,347 4,698,863 5,092,585 4,772,036 5,084,514
Per share:
Basic earnings $0.00 $0.38 $0.33 $1.19 $1.64
Diluted earnings $0.00 $0.37 $0.32 $1.16 $1.59
Dividends $0.12 $0.12 $0.11 $0.47 $0.42
Dividend payout
ratio n/a 32.43% 34.38% 40.52% 26.42%
Performance Ratios:
Return on average
assets (ratio of
net income to
average total
assets)(1) 0.01% 0.84% 0.79% 0.67% 1.01%
Return on average
equity (ratio of
net income to
average equity)(1) 0.07% 7.62% 6.69% 5.84% 8.43%
Interest rate
spread
information:
Average during
the period(1) 3.35% 3.39% 3.44% 3.46% 3.56%
Net interest
margin(1)(2) 3.46% 3.51% 3.59% 3.60% 3.73%
Efficiency Ratio 100.32% 66.73% 64.56% 73.26% 61.43%
Ratio of average
interest-earning
assets to average
interest-bearing
liabilities 104.94% 105.37% 106.52% 106.06% 106.53%
Allowance for loan
losses:
Balance beginning
of period $7,023 $7,020 $6,707 $6,779 $6,286
Charge offs:
One- to four-
family 38 50 64 249 210
Multi-family 0 0 0 0 0
Commercial real
estate 0 21 59 34 173
Construction or
development 0 0 0 0 0
Consumer loans 356 228 387 1,093 948
Commercial
business loans 247 254 0 616 30
------------------------------ --------------------
Sub-total 641 553 510 1,992 1,361
Recoveries:
One- to four-
family 0 1 0 21 27
Multi-family 0 0 0 0 0
Commercial real
estate 12 154 44 326 108
Construction or
development 0 0 0 0 0
Consumer loans 25 51 62 176 159
Commercial
business loans 0 0 101 0 110
------------------------------ --------------------
Sub-total 37 206 207 523 404
Net charge offs 604 347 303 1,469 957
Additions charged
to operations 448 350 375 1,557 1,450
------------------------------ --------------------
Balance end of
period $6,867 $7,023 $6,779 $6,867 $6,779
============================== ====================
Net loan charge-
offs to average
loans (1) 0.34% 21.00% 0.17% 0.21% 0.14%
December 31, September 30, December 31,
2004 2004 2003
---------------------------------------
Total shares outstanding 4,708,318 4,781,778 5,268,571
Tangible book value per share $18.47 $18.58 $18.34
Nonperforming assets (000's)
Loans: Non-accrual $3,985 $4,053 $3,245
Past due 90 days or
more 0 10 10
Restructured 120 120 0
---------------------------------------
Total nonperforming
loans 4,105 4,183 3,255
Real estate owned 340 285 597
Other repossessed assets 894 625 824
---------------------------------------
Total nonperforming
assets $5,339 $5,093 $4,676
Asset Quality Ratios:
Non-performing assets to total
assets 0.64% 0.61% 0.57%
Non-performing loans to total
loans 0.55% 0.57% 0.46%
Allowance for loan losses to
non-performing loans 172.30% 172.85% 208.26%
Allowance for loan losses to
loans receivable 0.95% 0.98% 0.95%
(1) Ratios for the three month periods have been annualized.
(2) Net interest income divided by average interest earning assets.
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