"In addition, during the fourth section of 2008 we successfully completed the integration of 1st Independence into MainSource. I am especially splendid of our employees who worked steadfastly to make sure a seamless transition. While we are worried about the deepening slump and the clout it may have on our client base, we allow we are bewitching the fit steps to successfully regulate through the surroundings and are positioning MainSource to capitalize on the various opportunities that may be mentioned out of these ill-behaved times," concluded Mr. Brown. 4TH QUARTER RESULTS NET INTEREST INCOME Net enrol proceeds was $24.1 million for the fourth division of 2008, which was a 28.2% swell over the fourth locality of 2007.
Earning assets increased by approximately $350 million with approximately $275 million coming from the August 2008 getting of 1st Independence Bank and $75 million of inborn growth. Net persuade margin, on a fully-taxable of a piece basis, was 3.85% for the fourth put up of 2008 versus 3.49% for the fourth neighbourhood of 2007. On a linked spot basis, the Company's clear kindle line decreased by seven constituent points due fundamentally to interest reversals for loans that were classified as non-accrual during the quarter.
NON-INTEREST INCOME The Company's non-interest profit was $6.3 million for the fourth forgiveness of 2008 compared to $7.0 million for the same space in 2007.
As mentioned above, the Company incurred a $1.2 million harm imbue on its mortgage servicing rights during the fourth part of 2008 which reduced non-interest income. With the significant dash in mortgage rates at the end of 2008, the value of these assets declined. Other significant items for the lodge included $683 thousand of gains akin to the sales of investment securities which were cancel by a diminution in other income.
The curtail in other revenue was basically consanguineous to a shrivelling in return tied up to the Company's bank-owned life security policies. NON-INTEREST EXPENSE The Company's non-interest destruction was $19.6 million for the fourth quadrature of 2008 compared to $16.8 million for the same while in 2007, an inflation of 16.7%. The main drivers of the increase were the full-period meaning of the acquisition of 1st Independence Bank, an gain in FDIC indemnification expense and the costs incurred to disciple the data processing system of 1st Independence Bank.
The Company's adeptness proportion was 63.0% compared to 62.8% for the same aeon a year ago. Excluding the mortgage servicing rights reduction charge, the Company's expertise relationship was 60.7% for the fourth humanity of 2008.
FULL YEAR RESULTS BALANCE SHEET Total assets were $2.9 billion as of December 31, 2008, an improve of approximately $363 million compared to year-end 2007. The boost in assets was first of all attributable to the purchase of 1st Independence Bank which added approximately $325 million in assets. Total loans were $2.0 billion as of December 31, 2008, an further of $301 million compared to year-end 2007. Total deposits grew by 5.6% year-over-year and were $2.0 billion as of December 31, 2008.
NET INTEREST INCOME Net curiosity gain was $87.5 million for the wholly year 2008, which represents an increment of 17.6% versus 2007. Net influence margin, on a fully-taxable synonymous basis, was 3.83% for 2008 compared to 3.57% for the same epoch a year ago.
Entering 2008, the Company's make up for fitted sheet was favorably positioned for a reduction in prevail upon rates. NON-INTEREST INCOME Non-interest receipts was $29.7 million for 2008 compared to $28.1 million for the same patch in 2007. Increases in post charges, interchange takings and gains on the selling of investment securities were check by the curtailment in mortgage banking income and other income.
Other income decreased due at bottom to a reduction in income associate to bank-owned zest cover policies. NON-INTEREST EXPENSE Non-interest loss was $72.8 million compared to $68.0 million in 2007.
The bump of the 1st Independence property and reasonable wage-earner quality increases were the predominant drivers of this increase. The Company's adroitness correspondence was 60.8% for 2008 compared to 64.4% for 2007.
ASSET QUALITY Non-performing assets were $65.3 million as of December 31, 2008 compared to $23.3 million as of December 31, 2007 and represented 2.25% of aggregate assets at December 31, 2008 compared to 0.92% at year-end 2007.
On a linked-quarter basis, non-performing assets increased by approximately $18.0 million. The proliferate was principally attributable to three credits totaling $14.3 million. These three credits ally to borrowers tied to the case industry. Net charge-offs for 2008 equaled 0.35% of standard prominent loans compared to 0.26% for 2007.
The Company's reimbursement for accommodation losses was $34.5 million and represented 1.73% as a percent of sum marvellous loans. This compares to $14.3 million as of December 31, 2007, or 0.85% as a percent of loans.
MAINSOURCE FINANCIAL GROUP (unaudited) (Dollars in thousands leave out per equity data) Income Statement Summary Three months ended Twelve months ended December 31 December 31 ------------------------ ------------------------ 2008 2007 2008 2007 ----------- ----------- ----------- ----------- Interest Income $ 37,523 $ 36,883 $ 144,659 $ 144,827 Interest Expense 13,466 18,089 57,134 70,430 ----------- ----------- ----------- ----------- Net Interest Income 24,057 18,794 87,525 74,397 Provision for Loan Losses 9,997 2,966 20,918 5,745 Noninterest Income: Insurance commissions 483 459 2,073 1,864 Trust and investment offering fees 337 282 1,575 1,569 Mortgage banking (413) 796 2,565 2,921 Service charges on lees accounts 3,917 3,630 14,555 13,312 Gain on sales of securities 683 (115) 1,118 114 Interchange income 905 789 3,600 3,159 Other 394 1,192 4,211 5,187 ----------- ----------- ----------- ----------- Total Noninterest Income 6,306 7,033 29,697 28,126 Noninterest Expense: Employee 9,977 9,278 41,033 38,063 Occupancy 1,706 1,301 6,061 5,347 Equipment 1,930 1,406 6,496 5,788 Intangible amortization 704 667 2,607 2,666 Telecommunications 504 460 1,863 1,924 Stationary, printing, and supplies 356 331 1,374 1,475 Other 4,405 3,317 13,339 12,757 ----------- ----------- ----------- ----------- Total Noninterest Expense 19,582 16,760 72,773 68,020 Earnings Before Income Taxes 784 6,101 23,531 28,758 Provision for Income Taxes (560) 1,252 4,379 6,888 ----------- ----------- ----------- ----------- Net Income $ 1,344 $ 4,849 $ 19,152 $ 21,870 =========== =========== =========== =========== Three months ended Twelve months ended December 31 December 31 Average Balance Sheet ------------------------ ------------------------ Data 2008 2007 2008 2007 ----------- ----------- ----------- ----------- Gross Loans $ 1,973,871 $ 1,675,682 $ 1,791,727 $ 1,617,334 Earning Assets 2,547,886 2,196,943 2,342,114 2,144,010 Total Assets 2,849,761 2,484,733 2,628,137 2,438,515 Noninterest Bearing Deposits 218,339 195,418 203,979 190,162 Interest Bearing Deposits 1,847,397 1,672,821 1,738,594 1,640,770 Total Interest Bearing Liabilities 2,311,788 2,006,480 2,123,841 1,967,657 Shareholders' Equity 297,962 261,915 277,695 257,633 Three months ended Twelve months ended December 31 December 31 ------------------------ ------------------------ Per Share Data 2008 2007 2008 2007 ----------- ----------- ----------- ----------- Diluted Earnings Per Share $ 0.07 $ 0.26 $ 1.00 $ 1.17 Cash Dividends Per Share 0.145 0.140 0.575 0.555 Market Value - High 21.02 18.09 21.27 19.01 Market Value - Low 12.74 14.36 12.15 14.36 Average Outstanding Shares (diluted) 20,137,655 18,606,398 19,108,586 18,699,394 Three months ended Twelve months ended December 31 December 31 ------------------------ ------------------------ Key Ratios 2008 2007 2008 2007 ----------- ----------- ----------- ----------- Return on Average Assets 0.19% 0.78% 0.73% 0.90% Return on Average Equity 1.79% 7.41% 6.90% 8.49% Net Interest Margin 3.85% 3.49% 3.83% 3.57% Efficiency Ratio 63.01% 62.83% 60.73% 64.37% Net Overhead to Average Assets 1.85% 1.57% 1.64% 1.64% Balance Sheet Highlights As of December 31 2008 2007 ----------- ----------- Total Loans (Excluding Loans Held for Sale) $ 1,995,148 $ 1,693,678 Allowance for Loan Losses 34,583 14,331 Total Securities 513,310 489,739 Goodwill and Intangible Assets 150,437 135,324 Total Assets 2,899,835 2,536,437 Noninterest Bearing Deposits 232,024 200,753 Interest Bearing Deposits (excluding Public Funds) 1,530,639 1,431,035 Public Fund Deposits 246,661 270,041 Repurchase Agreements 32,234 30,006 Other Borrowings 535,198 318,488 Shareholders' Equity 299,949 264,102 Other Balance Sheet Data As of December 31 2008 2007 ----------- ----------- Book Value Per Share $ 14.90 $ 14.22 Loan Loss Reserve to Loans 1.73% 0.85% Loan Loss Reserve to Non-Performing Loans 58.31% 69.93% Nonperforming Assets to Total Assets 2.25% 0.92% Outstanding Shares 20,136,362 18,570,139 Asset Quality As of December 31 2008 2007 ----------- ----------- Loans Past Due 90 Days or More and Still Accruing $ 3,639 $ 1,693 Non-accrual Loans 55,671 18,800 Other Real Estate Owned 5,944 2,769 ----------- ----------- Total Nonperforming Assets $ 65,254 $ 23,262 Net Charge-offs - YTD $ 6,230 $ 4,206 Net Charge-offs as a % of regular loans 0.35% 0.26% MainSource Financial Group is listed on the NASDAQ National Market (under the symbol: "MSFG") and is a community-focused, pecuniary holding comrades with assets of approximately $2.9 billion.
The Company operates 85 banking offices through its three banking subsidiaries, MainSource Bank, Greensburg, Indiana, MainSource Bank of 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 furnish various linked economic services. Forward-Looking Statements Except for true word contained herein, the conference in this huddle delivering may cover guaranteed forward-looking statements based upon board expectations, goals and projections, which are issue to numerous assumptions, risks and uncertainties. Factors which could cause prospective results to take issue essentially from these expectations include, but are not restrictive to, the following: accepted cost-effective conditions; legislative and regulatory initiatives; financial and budgetary policies of the federal government; advance payment flows; the costs of funds; across the board deal in rates of interest; charge rates on competing investments; enquire for advance products; want for monetary services; changes in accounting policies or guidelines; changes in the trait or placing of the Company's credit and investment portfolios; the Company's talent to consolidate acquisitions; the brunt of our continuing obtaining strategy; and other factors, including various "risk factors" as set forth in our most new Annual Report on Form 10-K and in other reports we systematize from age to control with the Securities and Exchange Commission.
These reports are nearby publicly on the SEC website, , and on the Company's website,.
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