MutualFirst Announces Second Quarter 2005 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 second quarter ended June June: see month. 30, 2005 was $1.7 million, or $.39 for basic and $.38 for 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 2004 of $1.8 million, or $.38 for basic and $.37 for diluted earnings per share. 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 .80% and return on equity was 7.69% for the second quarter of 2005 compared to .89% and 7.59% respectively, for the same period last year. Net income for the six months ended June 30, 2005 was $3.3 million or $.76 for basic and $.74 for diluted earnings per share. This compared to net income for the comparable period in 2004 of $3.8 million or $.79 for basic and $.77 for diluted earnings per share. Annualized return on average assets was .78% and return on average equity was 7.54% for the first half of 2005 compared to .93% and 7.84% respectively, for the same period last year. Assets totaled $858.1 million at June 30, 2005, an increase from December December: see month. 31, 2004 of $18.7 million, or 2.2%. Loans, excluding loans held for sale, increased $17.8 million or 2.5%. Consumer loans increased $5.6 million, or 2.9%, and commercial business loans increased $5.4 million, or 10.1%, while residential and commercial real estate loans held in portfolio increased $6.8 million. Mortgage loans held for sale decreased $2.9 million and mortgage loans sold during the first half of 2005 totaled $12.2 million. Allowance for loan losses was unchanged at $6.9 million when comparing December 31, 2004 to June 30, 2005. Net charge offs for the first half of 2005 were $846,000 or .23% of average loans on an annualized basis compared to $517,000, or .15% of average loans for the comparable period in 2004. The primary reason for the increase was a $240,000 charge-off Eliminate or write off. The term charge-off is used to describe the process of removing from the records of a company something that was once regarded as an asset but has subsequently become worthless. of a commercial business loan to a distribution center that failed and the collateral collateral (kəlăt`ərəl), something of value given or pledged as security for payment of a loan. Collateral consists usually of financial instruments, such as stocks, bonds, and negotiable paper, rather than physical goods, although (accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying ) have proven to be uncollectible Adj. 1. uncollectible - not capable of being collected; "a bad (or uncollectible) debt" bad invalid - having no cogency or legal force; "invalid reasoning"; "an invalid driver's license" . Also, the Bank wrote down $150,000 of an $800,000 commercial business loan because the business generates insufficient in·suf·fi·cient adj. 1. Not sufficient. 2. Incapable of proper functioning. cash flow to service the debt and the value of the collateral (fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → ) is not sufficient to pay off the total debt. As of June 30, 2005 allowance for loan losses as a percentage of loans receivable and 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. was .94% and 132.89%, respectively. Total deposits were $606.3 million at June 30, 2005 an increase of $5.9 million, or 1.0% from December 31, 2004. Total borrowings increased $12.1 million to $153.7 million at June 30, 2005 from $141.6 million at December 31, 2004. 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 $251,000, or .3%, from $87.9 million at December 31, 2004, to $87.6 million at June 30, 2005. 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 141,000 shares of common stock for $3.3 million and dividend payments of $1.2 million. This decrease was partially offset by net income of $3.3 million, Employee Stock Ownership Plan (ESOP ESOP See: Employee Stock Ownership Plan ESOP See Employee Stock Ownership Plan (ESOP). ) shares earned of $370,000, and RRP RRP n abbr (= recommended retail price) → PVP m shares earned of $128,000. Also, the market value of securities available for sale compared to their book value decreased $139,000 from a loss of $89,000 at December 31, 2004 to a loss of $228,000 at June 30, 2005. Net interest income decreased $145,000 from $6.8 million for the three months ended June 30, 2004, to $6.7 million for the three months ended June 30, 2005. The primary reason for the decrease was that the net interest margin decreased from 3.66% for the three-month period ended June 30, 2004, to 3.45% for the comparable period in 2005 as yields on interest-earning assets increased at a slower rate than the increase in the cost of interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid liabilities due to the bank being more liability sensitive in an increasing interest rate environment. This lower margin was partially offset by a $28.8 million increase in average interest-earning assets when comparing the second quarter of 2005 to that of 2004. Net interest income decreased $301,000 for the six months ended June 30, 2005 compared to the six months ended June 30, 2004. The net interest margin decreased from 3.65% for the six-month period ended June 30, 2004, to 3.46% for the comparable period in 2005 for the same reason mentioned above. This lower margin was partially offset by a $23.5 million increase in average interest-earning assets when comparing the first half of 2005 to that of 2004. The provision for loan losses for the first half of 2005 was $888,000, compared to $757,000 for last year's comparable period. Non-performing loans to total loans at June 30, 2005 were .70% compared to .55% at June 30, 2004. Non-performing assets to total assets were .76% at June 30, 2005 compared to .57% at June 30, 2004. With this addition to the loan loss provision management believes loan loss reserves to be adequate. Non-interest income increased $250,000 or 17.0%, to $1.7 million for the three months ended June 30, 2005 compared to $1.5 million for the same period in 2004. Increases in service fee and commission income, due to 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 privilege A permission or right. In information security, it refers to the modes of operation that a user or a process is granted. Examples include user-level privilege, operator privilege and supervisory privilege. program and an increase in annuity annuity: see insurance. annuity Payment made at a fixed interval. A common example is the payment received by retirees from their pension plan. There are two main classes of annuities: annuities certain and contingent annuities. and mutual fund sales, were partially offset by a $100,000 reduction in the gain on sale of loans due to reduced mortgage refinancing Refinancing An extension and/or increase in amount of existing debt. activity in the 2005 quarter and a $58,000 reduction in other income due primarily to reduced gains on the sale of real estate owned Real Estate Owned Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in most . For the six month period ended June 30, 2005 non-interest income increased $246,000 or 8.2% to $3.3 million compared to $3.0 for the comparable period in 2004. The increase was due primarily to a $431,000 or 29.8% increase in service fee income and a $258,000 or 86.8% increase in commission income for the same reasons mentioned above. These increases were partially offset by a $346,000 reduction in the gain on sale of loans due to reduced mortgage refinancing activity in the 2005 period and a $58,000 reduction in other income due primarily to reduced gain on the sale of real estate owned. Non-interest expense increased $436,000 or 8.4% to $5.6 million for the three months ended March 31, 2005 compared to $5.2 million for the same period in 2004. The increase was due primarily to increased occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy and equipment expenses which were up $103,000 due to costs related to two new offices. One opened in May of 2004 in Warsaw, Indiana Warsaw is a city in, and the county seat of, Kosciusko County, Indiana, United StatesGR6. The population was 12,415, as of the 2000 census. Cradled between Winona Lake, Pike Lake and Center Lake, Warsaw is nicknamed "Lake City and the other opened in June of this year in Syracuse, Indiana Syracuse is a town in Kosciusko County, Indiana, United States. The population was 3,038 at the 2000 census. Attractions Syracuse is town situated in north central Indiana. . Also, we relocated re·lo·cate v. re·lo·cat·ed, re·lo·cat·ing, re·lo·cates v.tr. To move to or establish in a new place: relocated the business. v.intr. our corporate and investment management and private banking staffs to a recently purchased office building located next to our main office in Muncie. Data processing data processing or information processing, operations (e.g., handling, merging, sorting, and computing) performed upon data in accordance with strictly defined procedures, such as recording and summarizing the financial transactions of a fees increased $52,000 due to the addition of the two new offices and the expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of several contractual credits from our service provider received in the 2004 period and not in the 2005 period. Advertising and promotion was up $47,000 due to more advertising campaigns and new office promotions in the 2005 quarter when compared to comparable 2004 quarter. Other expenses increased $182,000 due to increases in legal and consulting services Noun 1. consulting service - service provided by a professional advisor (e.g., a lawyer or doctor or CPA etc.) service - work done by one person or group that benefits another; "budget separately for goods and services" primarily related to regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. compliance requirements Compliance requirements are a series of directives established by United States Federal government agencies that summarize hundreds of Federal laws and regulations applicable to Federal assistance (also known as Federal aid or Federal funds). and other general and administrative expense increases. Non-interest expense increased $644,000 or 6.1% to $11.2 million for the six months ended June 30, 2005 compared to $10.5 million for the same period in 2005 for similar reasons mentioned above. Income tax expense decreased $121,000 for the three months ended June 30, 2005 compared to the same period in 2004 due to less taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. . The effective tax rate decreased from 29.6% to 27.5% due to an increased percentage of low income housing tax credits to taxable income when comparing the second quarter of 2005 to the second quarter of 2004. For the six-month period ended June 30, 2005, income tax expense decreased $345,000 compared to the same period in 2004. The decrease was due primarily to decreased taxable income. The effective tax rate decreased from 29.7% to 27.5% due to an increased percentage of low income housing tax credits to taxable income when comparing the second half of 2005 to the second half of 2004. 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 nineteen 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 changes in interest rates; the loss of deposits and loan demand to competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. ; 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): 2005 2004
----------------------------------------------------------------------
(000) (000)
Total Assets $858,123 $839,387
Cash and cash equivalents 16,872 19,743
Loans held for sale 0 2,913
Loans receivable, net 730,798 713,022
Investment securities available for sale, at
fair value 41,891 39,409
Total deposits 606,345 600,407
Total borrowings 153,721 141,572
Total stockholders' equity 87,610 87,860
Three Three Three Six Six
Months Months Months Months Months
Ended Ended Ended Ended Ended
Selected Operations Data 30-Jun 31-Mar 30-Jun 30-Jun 30-Jun
(Unaudited): 2005 2005 2004 2005 2004
----------------------------------------------------- ----------------
(000) (000) (000) (000) (000)
Total interest income $11,507 $11,237 $11,048 $22,743 $22,245
Total interest expense 4,815 4,563 4,211 9,377 8,578
------------------------ ----------------
Net interest income 6,692 6,674 6,837 13,366 13,667
Provision for loan losses 444 444 530 888 757
------------------------ ----------------
Net interest income after
provision for loan losses 6,248 6,230 6,307 12,478 12,910
------------------------ ----------------
Non-interest income
-----------------------------
Fees and service charges 990 886 743 1,876 1,445
Equity in gains (losses) of
limited partnerships (9) (17) 19 (26) 22
Commissions 341 214 154 555 297
Net gain on loan sales and
servicing 117 149 217 266 612
Increase in cash surrender
value of life insurance 250 265 247 515 505
Other income 29 39 88 68 128
------------------------ ----------------
Total non-interest income 1,718 1,536 1,468 3,254 3,009
------------------------ ----------------
Non-interest expense
-----------------------------
Salaries and benefits 3,380 3,406 3,329 6,785 6,769
Occupancy and equipment 791 822 684 1,613 1,382
Data processing fees 202 194 150 396 347
Deposit insurance expense 21 21 22 42 44
Marketing 193 139 147 332 242
Other expenses 1,048 967 866 2,015 1,756
------------------------ ----------------
Total non-interest expense 5,635 5,549 5,198 11,183 10,540
------------------------ ----------------
Income before taxes 2,331 2,217 2,577 4,549 5,379
Income tax provision 642 610 763 1,252 1,598
------------------------ ----------------
Net income $1,689 $1,607 $1,814 $3,297 $3,781
======================== ================
Average Balances, Net Interest Income, Yield Earned and Rates Paid
----------------------------------------------------------------------
Three Six
mos ended mos ended
6/30/2005 6/30/2005
----------------------------------------------------
Average Average
Out- Interest Average Out- Interest Average
standing Earned/ Yield/ standing Earned/ Yield/
Balance Paid Rate Balance Paid Rate
----------------------------------------------------
(000) (000) (000) (000)
Interest-Earning
Assets:
Interest -bearing
deposits $1,670 $7 1.68% $1,605 $14 1.74%
Mortgage-backed
securities: 0.00
Available-for-
sale 11,076 128 4.62 11,102 258 4.65
Investment
securities:
Available-for-
sale 29,771 276 3.71 29,064 504 3.47
Loans receivable 725,924 11,015 6.07 723,032 21,801 6.03
Stock in FHLB of
Indianapolis 8,103 81 4.00 8,063 166 4.12
----------------------------------------------------
Total interest-
earning assets
(1) 776,544 11,507 5.93 772,866 22,743 5.89
Non-interest
earning assets,
net of
allowance for
loan losses and
unrealized
gain/loss 71,481 70,091
--------- ---------
Total assets $848,025 $842,957
========= =========
Interest-Bearing
Liabilities:
Demand and NOW
accounts $59,449 40 0.27 $59,499 73 0.25
Savings deposits 61,461 68 0.44 61,789 108 0.35
Money market
accounts 51,892 193 1.49 53,668 358 1.33
Certificate
accounts 398,521 3,189 3.20 391,053 6,209 3.18
----------------------------------------------------
Total deposits 571,323 3,490 2.44 566,009 6,748 2.38
Borrowings 135,242 1,325 3.92 136,073 2,629 3.86
----------------------------------------------------
Total interest-
bearing
accounts 706,565 4,815 2.73 702,082 9,377 2.67
Non-interest
bearing deposit
accounts 39,730 39,820
Other liabilities 13,915 13,657
--------- ---------
Total
liabilities 760,210 755,559
Stockholders'
equity 87,815 87,398
--------- ---------
Total
liabilities
and
stockholders'
equity $848,025 $842,957
========= =========
Net earning assets $69,979 $70,784
========= =========
Net interest
income $6,692 $13,366
========== ==========
Net interest rate
spread 3.21% 3.22%
======= =======
Net yield on
average interest-
earning assets 3.45% 3.46%
======= =======
Average interest-
earning assets to
average interest-
bearing
liabilities 109.90% 110.08%
======= =======
Selected Three Three Three Six Six
Financial Ratios Months Months Months Months Months
and Other Ended Ended Ended Ended Ended
Financial Data 30-Jun 31-Mar 30-Jun 30-Jun 30-Jun
(Unaudited): 2005 2005 2004 2005 2004
------------------------------------------------- --------------------
Share and per share
data:
Average common
shares
outstanding
Basic 4,352,236 4,366,150 4,732,176 4,359,063 4,764,922
Diluted 4,464,114 4,501,208 4,879,960 4,482,952 4,928,857
Per share:
Basic earnings $0.39 $0.37 $0.38 $0.76 $0.79
Diluted earnings $0.38 $0.36 $0.37 $0.74 $0.77
Dividends $0.13 $0.13 $0.12 $0.26 $0.23
Dividend payout
ratio 34.21% 36.11% 32.43% 35.14% 29.87%
Performance Ratios:
Return on average
assets (ratio of
net income to
average total
assets)(1) 0.80% 0.77% 0.89% 0.78% 0.93%
Return on average
equity (ratio of
net income to
average
equity)(1) 7.69% 7.39% 7.59% 7.54% 7.84%
Interest rate
spread
information:
Average during
the period(1) 3.21% 3.37% 3.53% 3.50% 3.50%
Net interest
margin(1)(2) 3.45% 3.47% 3.66% 3.65% 3.65%
Efficiency Ratio 67.00% 67.59% 62.59% 67.29% 63.20%
Ratio of average
interest-
earning assets
to average
interest-
bearing
liabilities 109.90% 110.17% 111.70% 110.08% 111.76%
Allowance for loan
losses:
Balance
beginning of
period $6,737 $6,867 $6,799 $6,867 $6,779
Charge offs:
One- to four-
family 93 78 111 171 161
Multi-family 0 0 0 0 0
Commercial
real estate 6 0 13 6 13
Construction
or
development 0 0 0 0 0
Consumer
loans 237 279 255 516 509
Commercial
business
loans 150 242 0 392 115
------------------------------ --------------------
Sub-total 486 599 379 1,085 798
Recoveries:
One- to
four-
family 9 3 2 12 20
Multi-family 0 0 0 0 0
Commercial
real estate 120 0 2 120 161
Construction
or
development 0 0 0 0 0
Consumer
loans 85 22 66 107 101
Commercial
business
loans 0 0 0 0 0
------------------------------ --------------------
Sub-total 214 25 70 239 282
Net charge offs 272 574 309 846 516
Additions charged
to operations 444 444 530 888 757
------------------------------ --------------------
Balance end of
period $6,909 $6,737 $7,020 $6,909 $7,020
============================== ====================
Net loan charge-
offs to average
loans (1) 0.15% 0.32% 0.18% 0.23% 0.15%
June 30, March 31, June 30,
2005 2005 2004
---------------------------------
Total shares outstanding 4,608,013 4,673,444 4,949,919
Tangible book value per share $18.82 $18.61 $18.45
Nonperforming assets (000's)
Loans: Non-accrual $4,386 $4,499 $3,366
Past due 90 days or more 694 0 543
Restructured 119 120 0
---------------------------------
Total nonperforming
loans 5,199 4,619 3,909
Real estate owned 351 550 303
Other repossessed assets 985 679 463
---------------------------------
Total nonperforming
assets $6,535 $5,848 $4,675
Asset Quality Ratios:
Non-performing assets to total
assets 0.76% 0.70% 0.57%
Non-performing loans to total
loans 0.70% 0.62% 0.55%
Allowance for loan losses to
non-performing loans 132.89% 149.74% 179.59%
Allowance for loan losses to
loans receivable 0.94% 0.94% 1.00%
(1) Ratios for the three and six month periods have been annualized.
(2) Net interest income divided by average interest earning assets.
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