Despite lower credit costs, MutualFirst Financial Inc. in Muncie, Ind., returned to the red last quarter because of higher impairment charges on its securities.
The $1.4 billion-asset company had reported profits in each of the first three quarters, including $791,000 in the third quarter. But late Thursday it reported a $1.6 million fourth-quarter loss, versus a loss of $24.8 million a year earlier. For the year it turned a $1.4 million profit.
Driving the fourth-quarter loss was a $2.4 million other-than-temporary impairment charge on investment securities, double the amount of such impairments in the fourth quarter of 2008.
MutualFirst also reported a provision of $1.7 million. That was down 65% from a year earlier, when the company fattened its loan-loss reserve. Still, the lowered provision did not point to an easing in MutualFirst's asset-quality issues. Its nonperforming assets of $40 million were up 50% from a year earlier and accounted for 2.86% of its total assets.