EX-99.1 2 a08-12061_1ex99d1.htm EX-99.1

Exhibit 99.1

 

NEWS RELEASE

 

DATE:

April 22, 2008

4:00 p.m. E.S.T

CONTACT:

Robert E. Hoptry, Chairman, President and CEO

 

MainSource Financial Group, Inc. 812-663-6734

 

 

MAINSOURCE FINANCIAL GROUP–NASDAQ, MSFG –

Announces Earnings for the First Quarter 2008

Greensburg, Indiana (NASDAQ: MSFG) Robert E. Hoptry, Chairman, President & Chief Executive Officer of MainSource Financial Group, announced today the unaudited results for the quarter ended March 31, 2008.  Net income was $6.3 million in the first quarter of 2008, which equates to $0.34 per share, compared to $5.4 million for the same period a year ago, or $0.29 per share.  During the first quarter, the Company reversed a tax reserve in the amount of $595,000 due to developments resulting from a recent favorable ruling in a tax court case.  This reversal was partially offset by a $600,000 pre-tax severance accrual related to the departure of the Company’s former Chief Executive Officer in February.

 

Mr. Hoptry stated, “We are very pleased with our performance in the first quarter of 2008 as earnings exceeded expectations.  While we saw significant improvements in our net interest margin and non-interest income, credit quality remained in check and our core non-interest expense items saw only marginal increases.”

 

NET INTEREST INCOME

 

Net interest income was $19.7 million for the first quarter of 2008, which represents an increase of 5.7% from the first quarter of 2007.  Net interest margin, on a fully-taxable equivalent basis, was 3.64% for the first quarter of 2008, an increase of fifteen basis points on a linked quarter basis.  This increase was primarily due to the rate cuts that occurred during the fourth quarter of 2007 and the first quarter of 2008 as the Company’s cost of funds decreased at a faster rate than the yield on earning assets.

 

NON-INTEREST INCOME

 

The Company’s non-interest income increased to $7.8 million for the first quarter of 2008 compared to $6.1 million for the same period in 2007.  Increases were realized across the board with service charges on deposit accounts increasing $0.6 million and mortgage banking income increasing $0.4 million.

 

NON-INTEREST EXPENSE

 

The Company’s non-interest expense was $17.8 million for the first quarter of 2008 compared to $16.9 million for the same period in 2007.  Excluding the aforementioned severance costs, the Company’s non-interest expense would have been $17.2 million, an increase of approximately 2% over the same period a year ago.  The Company’s efficiency ratio was 63.8% for the first quarter of 2008, which was relatively flat compared to the same period a year ago.

 

ASSET QUALITY

 

Non-performing assets were $23.3 million as of March 31, 2008, which was flat compared to December 31, 2007.  Non-performing assets represented 0.92% of total assets as of March 31, 2008.  Annualized net charge-offs for the first quarter of 2008 equaled 0.26% which is consistent with the level of charge-offs for all of 2007.  The Company’s allowance for loan losses as a percent of total outstanding loans was 0.92% as of March 31, 2008 compared to 0.85% as of December 31, 2007.  Total loan loss provision expense was $2.2 million in the first quarter of 2008 compared to $700 thousand for the same period a year ago.  The additional provision expense was primarily due to an increase in specific allocations related to certain commercial real estate loans which exhibited credit deterioration during the first quarter due to the continued weakening in the real estate markets.

 


 

MAINSOURCE FINANCIAL GROUP

(unaudited)

(Dollars in thousands except per share data)

 

Income Statement Summary

 

 

 

Three months ended March 31

 

 

 

2008

 

2007

 

Interest Income

 

$

36,055

 

$

35,100

 

Interest Expense

 

16,380

 

16,493

 

Net Interest Income

 

19,675

 

18,607

 

Provision for Loan Losses

 

2,196

 

696

 

Noninterest Income:

 

 

 

 

 

Insurance commissions

 

512

 

419

 

Trust and investment product fees

 

417

 

368

 

Mortgage banking

 

967

 

615

 

Service charges on deposit accounts

 

3,241

 

2,670

 

Gain/(losses) on sales of securities

 

342

 

39

 

Interchange income

 

810

 

741

 

Other

 

1,554

 

1,239

 

Total Noninterest Income

 

7,843

 

6,091

 

 

 

 

 

 

 

Noninterest Expense:

 

 

 

 

 

Employee

 

10,672

 

9,689

 

Occupancy

 

1,503

 

1,426

 

Equipment

 

1,481

 

1,458

 

Intangible amortization

 

635

 

666

 

Telecommunications

 

431

 

492

 

Stationary, printing, and supplies

 

310

 

383

 

Other

 

2,779

 

2,756

 

Total Noninterest Expense

 

17,811

 

16,870

 

 

 

 

 

 

 

Earnings Before Income Taxes

 

7,511

 

7,132

 

Provision for Income Taxes

 

1,260

 

1,717

 

Net Income

 

$

6,251

 

$

5,415

 

 


 

Average Balance Sheet Data

 

 

 

Three months ended March 31

 

 

 

2008

 

2007

 

Gross Loans

 

$

1,698,154

 

$

1,569,694

 

Earning Assets

 

2,216,640

 

2,093,755

 

Total Assets

 

2,515,109

 

2,389,542

 

Noninterest Bearing Deposits

 

191,114

 

183,025

 

Interest Bearing Deposits

 

1,677,269

 

1,627,333

 

Total Interest Bearing Liabilities

 

2,031,382

 

1,929,304

 

Shareholders’ Equity

 

269,062

 

253,583

 

 

Per Share Data

 

 

 

Three months ended March 31

 

 

 

2008

 

2007

 

Diluted Earnings Per Share

 

$

0.34

 

$

0.29

 

Cash Dividends Per Share

 

0.140

 

0.135

 

Market Value - High

 

16.51

 

17.53

 

Market Value - Low

 

12.15

 

15.42

 

Average Outstanding Shares (diluted)

 

18,573,123

 

18,767,360

 

 

Key Ratios

 

 

 

Three months ended March 31

 

 

 

2008

 

2007

 

Return on Average Assets

 

1.00

%

0.92

%

Return on Average Equity

 

9.35

%

8.66

%

Net Interest Margin

 

3.64

%

3.70

%

Efficiency Ratio

 

63.83

%

63.92

%

Net Overhead to Average Assets

 

1.61

%

1.81

%

 

Balance Sheet Highlights

 

 

 

2008

 

2007

 

As of March 31

 

 

 

 

 

Total Loans (Excluding Loans Held for Sale)

 

$

1,681,920

 

$

1,566,305

 

Allowance for Loan Losses

 

15,423

 

13,119

 

Total Securities

 

506,930

 

489,690

 

Goodwill and Intangible Assets

 

134,689

 

136,971

 

Total Assets

 

2,528,343

 

2,410,081

 

Noninterest Bearing Deposits

 

201,711

 

192,131

 

Interest Bearing Deposits (excluding Public Funds)

 

1,450,808

 

1,426,674

 

Public Fund Deposits

 

251,637

 

206,315

 

Repurchase Agreements

 

30,471

 

37,728

 

Other Borrowings

 

295,118

 

264,788

 

Shareholders’ Equity

 

273,757

 

255,872

 

 


 

Other Balance Sheet Data

 

 

 

2008

 

2007

 

As of March 31

 

 

 

 

 

Book Value Per Share

 

$

14.74

 

$

13.66

 

Loan Loss Reserve to Loans

 

0.92

%

0.84

%

Nonperforming Assets to Total Assets

 

0.92

%

0.76

%

Outstanding Shares

 

18,570,071

 

18,726,532

 

 

Asset Quality

 

 

 

2008

 

2007

 

As of March 31

 

 

 

 

 

Loans Past Due 90 Days or More and Still Accruing

 

$

1,046

 

$

1,081

 

Non-accrual Loans

 

19,150

 

15,685

 

Other Real Estate Owned

 

3,055

 

1,585

 

Total Nonperforming Assets

 

$

23,251

 

$

18,351

 

 

 

 

 

 

 

Net Charge-offs - YTD

 

$

1,104

 

$

369

 

Net Charge-offs as a % of average loans

 

0.26

%

0.10

%

 

MainSource Financial Group, Inc., headquartered in Greensburg, Indiana, is listed on the NASDAQ Global Select Market (under the symbol: “MSFG”) and is a community-focused, financial holding company with assets of approximately $2.5 billion. The Company operates 65 offices in 30 Indiana counties, six offices in three Illinois counties, and five offices in two Ohio counties through its three banking subsidiaries, MainSource Bank, Greensburg, Indiana, MainSource Bank - Illinois, Kankakee, Illinois, and MainSource Bank - Ohio, Troy, Ohio. Through its non-banking subsidiaries, MainSource Insurance LLC, and MainSource Title LLC, the Company and its banking subsidiaries provide various related financial services.

 

Forward-Looking Statements

 

Except for historical information contained herein, the discussion in this press release may include certain forward-looking statements based upon management expectations. Actual results and experience could differ materially from the anticipated results or other expectations expressed in the Company’s forward-looking statements.  Factors which could cause future results to differ from these expectations include the following: general economic 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; changes in the quality or composition of the Company’s loan and investment portfolios; the Company’s ability to integrate acquisitions; the impact of our continuing acquisition strategy; and other factors, including various “risk factors” as set forth in our most recent Annual Report on Form 10-K and in other reports we file from time to time with the Securities and Exchange Commission.  These reports are available publicly on the SEC website, www.sec.gov, and on the Company’s website, www.mainsourcefinancial.com.

 

* * * * *

 

MainSource Financial Group, Inc. 2105 N. State Road 3 Bypass, Greensburg, IN  47240